Issue Brief | Obama Administration FY 2014 Budget Proposal: Sustainable Energy, Buildings, Transport

President Obama released his $3.77 trillion fiscal year (FY) 2014 budget proposal on April 10, 2013. This budget, the first since his reelection, reflects the priorities President Obama put forward during his campaign, in particular, the Administration's commitment to investments in clean energy and energy efficiency. The proposed 2014 budget increases funding for the Department of Energy’s (DOE) renewable energy and energy efficiency technology programs by more than 59 percent above 2012 enacted levels, to a total of $3.5 billion. According to the White House, it also increases funding for clean energy technology programs across all agencies by 30 percent, to approximately $7.9 billion.

Highlights include a $2 billion Energy Security Trust to help transition the nation off oil, a new Race to the Top program for energy efficiency and grid modernization, $2 billion towards a satellite system that would improve weather forecasts and climate modeling and $5 billion for basic research in energy (a 5.7 percent increase over 2012). The budget also repeats the President's call for the elimination of $4 billion in fossil fuel subsidies.

This fact sheet outlines the Obama administration’s FY 2014 budget request for several clean energy and transportation programs within key agencies. In most cases, comparisons are made to 2012 actual (or current) figures, as the final 2013 appropriations had not been enacted when the budget was drafted.

Department of Energy

The President’s FY 2014 budget request for the Department of Energy (DOE) is $28.4 billion, an increase of about 8 percent over FY 2012 current levels. The proposed budget increases funding for clean energy deployment, research and development and advanced manufacturing. The Office of Energy Efficiency and Renewable Energy (EERE) would receive$2.8 billion, an increase of almost 56 percent from 2012 appropriated levels. In addition, the budget outlines a new Presidential goal of doubling energy productivity by 2030 from 2010 levels. To support the goal, the FY 2014 request includes a one-time, $200 million Race to the Top competitive grant program that challenges states to cut energy waste, support energy efficiency and modernize their grids.

The budget request increases the Electric Delivery and Energy Reliability budget 24.1 percent to $169 million, including$20 million for the creation of a new electricity systems hub. The Fossil Energy budget would grow by 15 percent to $638 million, including $276.6 million for carbon capture and storage R&D. The Office of Nuclear Energy, which includes R&D for advanced small modular reactors, is funded at $735 million. The DOE science budget increases 4.4 percent from FY 2012 to $5.2 billion. The budget also provides $379 million for the Advanced Research Projects Agency-Energy (ARPA-E), an increase of 38 percent.

The President’s FY 2014 Energy Efficiency and Renewable Energy budget request for DOE includes:

• $254 million increase in the Vehicle Technologies program (79.1 percent increase from FY 2012 appropriations). For more details, see the “Department of Transportation” section below.
• $252 million increase in the Advanced Manufacturing (formerly Industrial Technologies) program (224 percent increase from FY 2012 appropriations).
• $120 million increase in the Weatherization and Intergovernmental Activities program (93.8 percent increase from FY 2012 appropriations, but a $22 million decrease from FY 2010 appropriations).
• $87 million increase in the Bioenergy Technologies (formerly Biomass and Biorefinery Systems R&D) program (44.6 percent increase from FY 2012 appropriations). For more details, see the “USDA/DOE Bioenergy Programs” section below.
• $85.3 million increase in the Building Technologies program (39.7 percent increase from FY 2012 appropriations). For more details, see the “Energy-Efficient / Sustainable Buildings Programs” section below.
• $71.8 million increase in the Solar Energy program (25.2 percent increase from FY 2012 appropriations).
• $52.2 million increase in the Wind Energy program (56.8 percent increase from FY 2012 appropriations).
• $23 million increase in the Geothermal program (62.3 percent increase from FY 2012 appropriations).
• $6.1 million increase in the Federal Energy Management program (20.4 percent increase from FY 2012 appropriations).
• $1.3 million decrease in the Hydrogen and Fuel Cell Technologies programs (1.3 percent decrease from FY 2012 appropriations).
• $3.1 million decrease in the Water Power program (5.3 percent decrease from FY 2012 appropriations).

USDA / DOE Bioenergy Programs

Department of Energy Bioenergy Programs

The Administration is proposing to renew investment for another five years in the nation’s three Bioenergy Research Centers, which conduct basic scientific research, and increase investment in bioenergy technology research and development. The BioEnergy Research Center (BESC) led by Oak Ridge National Laboratory, the Great Lakes Bioenergy Research Center (GLBRC) led by the University of Wisconsin-Madison in partnership with Michigan State University, and the Joint BioEnergy Institute (JBEI) led by Lawrence Berkeley National Laboratory would each be funded at $25 million per year. The initiative would include developing advanced integrated biorefineries that would produce drop-in renewable fuels, feedstock production systems, algae biofuel production, and sustainability research and analysis.

The Energy Efficiency and Renewable Energy Office's bioenergy program will be integrated into the department’s “Sustainable Transportation” initiative. The administration is proposing to boost investment in this area by $82 million (41 percent) over last year.

U.S. Department of Agriculture Bioenergy Programs

Overall Department of Agriculture funding for energy efficiency, bioenergy, or other renewable energy programs hasdeclined dramatically since FY10. Congress has yet to enact a new Farm Bill, and, in the temporary extension of the 2008 Farm Bill enacted at the beginning of the year, it did not provide any new mandatory funding for such programs. The Administration has repeatedly expressed strong support for these programs, but proposed funding for just two of them, leaving the decisions to Congress.

Agriculture committees in both the House and Senate are expected to begin marking up new versions of the Farm Bill this spring, and assuring reauthorization and mandatory funding for energy title programs will be a critical concern for many. For a relatively small public investment – matched by significantly larger private resources – these programs have been a win-win for advancing many critical national environmental, energy, and economic priorities.

Energy-Efficient / Sustainable Buildings Programs

Department of Energy

The U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE) proposes $300 million for Building Technologies in FY 2014, an increase of more than $85 million over FY 2012 appropriations. The focus on improving energy efficiency in residential and commercial buildings is part of the President’s goal of reducing building energy waste by half and doubling energy productivity over the next 20 years.

Funding for research and development of emerging technologies would more than double over the FY 2012 level to nearly$132 million. This includes sensors and controls linked to grid integration of building systems. An increase of $15 millionover FY 2012 is slated for the development of appliance efficiency standards and training and technical assistance on building energy code development and compliance. The budget proposal also urges Congress to pass Home Star legislation “or similar mandatory funding” to provide rebates for residential energy-saving retrofits that also create jobs. Funding would also go to state and local governments to provide financing options for consumers seeking to make efficiency investments.

Department of Housing and Urban Development (HUD)

The President’s budget provides $47.6 billion for HUD programs, an increase of $4.2 billion over the 2012 enacted level. The proposed budget cuts funding for the construction of new affordable housing and invests in revitalizing high-poverty neighborhoods and blighted communities that were hit hard by the foreclosure crisis. Support of sustainable housing and community development continues in a variety of forms including the following "cross-cutting" programs.

Transformation Initiative (TI) Fund – The 2014 budget request seeks authority for the Secretary to transfer up to 0.5 percent or $15 million, whichever is less, from each program account to Technical Assistance and other activities, such as:
- $1 million for Advancing Utility Allowance Modeling for HUD Housing Programs to “accurately account for energy usage in select housing assistance programs in which utility costs are paid by tenants.”
- $3 million for Standardized Skills Training to ensure that grantees and stakeholders acquire relevant knowledge and skills in areas such as “energy efficiency and weatherization; healthy housing; construction and rehabilitation management; and regional equity and sustainability.”

Choice Neighborhoods – The budget proposal includes $400 million (versus $120 million enacted in FY 2012) to transform 30 neighborhoods of extreme poverty into sustainable, mixed-income communities.

Interagency Partnerships – As part of a partnership between HUD, the Department of Transportation, and the Environmental Protection Agency, the budget includes $75 million in Integrated Planning and Investment Grants to help communities develop housing and transportation plans and improve their resilience to extreme weather and other climate change impacts. This may include incentives to update building codes, revise land-use and zoning ordinances, and other activities to “reduce energy consumption and greenhouse gas emissions and increase affordable housing near public transit.”

The Manufactured Housing Standards Program budget request is $7.53 million in 2014, an increase of 25.88 percent over 2012 enacted levels. The program maintains and updates federal standards for the construction, design and performance of manufactured housing (i.e. housing constructed in factories to "HUD Code" specifications) including "quality, durability, and safety," as well as model installation standards. The program also oversees inspections and code enforcement. However, HUD has not updated the standards to improve the energy efficiency of manufactured homes, which would make them more affordable to own and operate. With the Energy Independence and Security Act of 2007 (Sec. 413), Congress tasked DOE with this responsibility. Regulations have not yet been finalized.

Department of Transportation

The proposed Department of Transportation (DOT) FY 2014 budget calls for a total of $76.6 billion. This represents a 5.5 percent increase over the FY 2012 enacted level. The proposal also calls for an immediate investment of an additional $50 billion in FY 2014 to support critical infrastructure projects and to jump start job creation. The FY 2014 budget proposal for the Federal Transit Administration ($10.9 billion) provides for funding at the level included in the most recent surface transportation authorization law, Moving Ahead for Progress in the 21st Century Act (MAP-21). MAP-21 was enacted in July 2012, providing surface transportation authorization through FY 2014. New Starts and the Formula Programs are allocated $1.98 billion and $8.6 billion, respectively. The $41 billion request for the Federal Highway Administration consolidates Federal-Aid Highways into eight programs and implements the performance-based investment approach laid out by MAP-21. The $820 million Transportation Alternatives Program supports the goal of livable communities.

The Federal Railroad Administration’s FY 2014 budget includes a reauthorization proposal to reorganize its programs. A new five-year $40 billion National High Performance Rail System includes new Current Passenger Rail Service and Rail Service Improvement programs. The budget funds the programs in FY 2014 at $2.7 billion and $3.66 billion, respectively, by establishing a Rail Service account in the Transportation Trust Fund (a proposed renaming of the Highway Trust Fund). The “Current” program includes Amtrak grants, but is divided into four program areas: Northeast Corridor ($675 million), State Corridors ($300 million), Long Distance Routes ($800 million) and National Assets ($925 million). The proposed Rail Service Improvement Program would aim to provide 80 percent of the country with convenient access to passenger rail, featuring high speed service, within 25 years.

The Trust Fund’s solvency would be assured by $214 billion in general funds transfers over six years, including a $2.55 billion transfer in FY 2014. All transfers would be offset by reduced overseas military operations.

The administration’s FY 2014 request for $50 billion in immediate investment includes $40 billion for the “Fix-it-First” (FiF) program for urgent repairs to existing infrastructure, and $10 billion to spur State and local infrastructure development innovation, including $200 million for climate change resiliency projects. The additional spending would increase FY 2014’s highway and transit budgets by 66 and 82 percent, respectively.

The President’s budget requests additional funding for the Department of Energy (DOE) to invest in transportation technologies. The DOE Office of Energy Efficiency and Renewable Energy (EERE) proposed budget includes $575 million for EERE’s Vehicle Technologies Office. This would be an increase of 80 percent over current estimates for FY 2012 spending. Of the total request, $240 million would be allocated to improve batteries and electric drive technology. The budget for outreach, deployment, and analysis activities would be tripled over FY 2012 estimates to $126 million. The DOE budget also proposes to establish a new Energy Security Trust, capitalized by $2 billion over the next 10 years from Federal oil and gas development revenue. The Trust would be used to provide mandatory funding for research and development on cost-effective alternative transportation technologies that cut U.S. oil dependence, including vehicle electrification, fuel cells, and natural gas-powered vehicles.

Environmental Protection Agency

The President’s FY 2014 budget request for the Environmental Protection Agency (EPA) is $8.153 billion, a decrease of $296 million (a 3.5 percent decrease from FY 2012 enacted funding). The request for climate change programs is $176.5 million, a 4.8 percent increase from FY 2012 funding.

The Energy STAR program budget request is $52.9 million, a 6.4 percent increase from FY 2012 appropriations. This increase “will improve quality control over the Energy STAR product labeling program and revise product and building specifications to advance energy efficiency.” The Global Methane Initiative (GMI), formerly known as Methane-to-Markets, is slated to receive $4.8 million, a 4.1 percent decrease from FY 2012 enacted funding. The president has also requested $18.9 million for the Greenhouse Gas Reporting Registry, an increase of 19.7 percent from FY 2012. Federal vehicle and fuel standards initiatives would receive $100.4 million, a 9.2 percent increase from 2012.

The FY 2014 EPA budget request also includes:

• $20 million for climate change research, specifically climate change impacts on human health.
• $1.9 million was requested for the SmartGrowth program, which would strengthen local economies through sustainable community growth and efficient design.
• $7.6 million is slated for the Environmental Justice (EJ) program, which incorporates the considerations of disproportionately impacted minority, low-income and tribal communities into rulemaking processes.

Department of State

The Department of State’s FY 2014 budget request includes $427.5 million for international organizations that facilitate climate change resilience and provide affordable renewable energy to developing nations, an increase of $103 million(31.7 percent from FY 2012 levels). This includes an increase of approximately $54 million for the Global Environment Facility (GEF), $31 million for the Clean Technology Fund (CTF), and $18 million for the Strategic Climate Fund (SCF). The Strategic Climate Fund (SCF) includes funding for three programs: the Pilot Program for Climate Resilience (PPCR), the Forest Investment Program (FIP), and the Program for Scaling up Renewable Energy in Low-Income Countries (SREP).

In addition, the FY 2014 budget request for the Department of State includes $317 million in bilateral development assistance for climate adaptation, clean energy, and the sustainable landscapes program within the Global Climate Change (GCC) priority area. The Ocean and International Environmental and Scientific Affairs (OES) program would receive $116.5 million in the FY 2014 request. The OES supports, among other programs, the Clean Energy Ministerial, the Global Methane Initiative and the Clean Air and Climate Coalition, as well as the Special Envoy for Climate Change who leads U.S. climate negotiations.

Other Agency Highlights

The Department of Defense (DOD) budget includes more than $3 billion for operational and facility energy conservation investments. This includes $2 billion for initiatives to reduce fuel consumption and $1.2 billion for facility energy efficiency and renewable energy upgrades — $200 million more than the FY 2013 request. The Installation Energy Test Bed Program, which demonstrates new technologies and reduces commercial investment risk, would receive $32 million. The Energy Conservation Investment Program, which supports renewable energy and energy efficiency projects at military bases, remains at the FY 2013 appropriations level of $150 million.

The Department of Commerce's $8.6 billion budget request includes $5.4 billion for the National Oceanic and Atmospheric Administration (NOAA). The major focus is $2 billion towards the Geostationary Operational Environmental Satellite System, which will be used to improve weather predictions and modeling. The budget request includes $472.4 million for NOAA’s Office of Oceanic and Atmospheric Research (OAR). This increase of $82 million over FY 2013 will be used to enhance the agency’s ability to help local communities prepare for extreme weather events and to expand its climate change research.

The Department of Interior (DOI) budget request for renewable energy initiatives is $100 million, an increase of $26 million above FY 2012 enacted levels. The DOI climate change science budget is $71 million, an increase of $13 million.

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