For Immediate Release: February 12, 2010
For more information contact EESI at (202) 662-1892 or climate [at] eesi.org.
President Obama said in his State of the Union address that investments in clean energy are a priority for his administration. His FY 2011 budget request funded these priorities through an increase of five percent for the Department of Energy’s Office of Energy Efficiency and Renewable Energy, including programs such as solar, wind, geothermal, biomass, water power and hydrogen fuel cell technologies. Additional funding for the Advanced Research Projects Agency – Energy (ARPA-E) totaling $300 million will spur innovation in the high-tech areas that America needs to address its energy challenges and strengthen its research and development potential. By focusing the administration’s resources on clean energy, the President is helping steer the United States towards a robust, low-carbon economy. Below are clean energy budget highlights from the Energy, Agriculture, and Transportation Departments, and the Environmental Protection Agency.
Department of Energy
The President’s FY 11 budget request for the Department of Energy’s (DOE) Energy Efficiency and Renewable Energy (EE/RE) programs is $2.36 billion (approximately eight percent of the total DOE budget), an increase of $113 million (five percent above the FY 10 appropriations). Nuclear Energy programs received an increase of $42 million (five percent above FY 10 appropriations) and Electricity Delivery and Energy Reliability programs increased by $14 million (five percent above FY 10 appropriations). The budget request for fossil energy decreased by $191 million (20 percent below FY 10 appropriations), primarily through a $105 million cut (43 percent below FY 10 appropriations) in the Strategic Petroleum Reserve. The Advanced Research Projects Agency – Energy (ARPA-E) program was authorized in the America COMPETES Act of 2007 (P.L. 110-69), and is responsible for funding specific “high-risk, high-payoff, game-changing research and development projects to meet the nation’s long-term energy challenges.” The FY 11 budget includes a request of $300 million for this program, following its initial FY 09 funds of approximately $400 million.
The President’s FY 11 energy efficiency and renewable energy budget request for DOE includes:
- $115 million increase in the Weatherization and Intergovernmental Activities program (43% increase from FY 10 appropriations)
- $55 million increase in the Solar Energy program (22% increase from FY 10 appropriations)
- $50 million for the RE-ENERGY SE (Regaining Our Energy Science and Engineering Edge), previously unfunded
- $43 million increase in the Wind Energy program (53% increase from FY 10 appropriations)
- $14 million increase in Vehicle Technologies program (5% increase from FY 10 appropriations)
- $11 million increase in the Geothermal program (25% increase from FY 10 appropriations)
- $10 million increase in the Federal Energy Management Program (32% increase from FY 10 appropriations)
- $10 million decrease in the Water Power program (19% decrease from FY 10 appropriations)
Department of Agriculture
The President’s FY 11 budget request includes $762 million for U.S. Department of Agriculture (USDA) farm energy programs, and requests $220 million for Department of Energy biomass and bioenergy programs. Additional bioenergy-related funding is provided through the DOE’s energy sciences program, which funds the ongoing Bioenergy Research Centers. Additional funding also may be provided on a competitive basis through DOE’s Energy Advanced Research Projects Agency and DOE’s Innovative Technology Loan Guarantee Program.
Overall biomass energy funding levels (mandatory and discretionary) would increase a little more than five percent in FY 11 compared to the FY 10 regular appropriations. Bioenergy programs also have received a significant infusion of additional funds ($777 million) in FY 09 and FY 10 through the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5). In addition, significant additional federal mandates and incentives for bioenergy production are provided through the Renewable Fuel Standard and in the tax code (various biofuel and biopower producer tax credits, investment tax credits, and fuel blender tax credits).
Highlights within the President’s FY 11 budget request for USDA are:
- The budget request reflects the administration’s continuing commitment to accelerating the deployment of advanced biofuel biorefineries and technologies. In the wake of almost $1 billion in DOE funding in regular appropriations and additional ARRA funds committed to this in FY 09 and FY 10, the administration would further increase the USDA Biorefinery Assistance Program’s budget by another $17 million. Adding $17 million in discretionary funds in FY 11 to the $245 million appropriated previously will allow the program to guarantee loans up to a total of $950 million for biorefinery projects.
- The cost of the Biomass Crop Assistance Program (BCAP) is growing the fastest. The program was recently authorized in the 2008 farm bill. It provides matching payments for the collection, harvest, storage and transport of biomass feedstocks to USDA-approved energy conversion facilities. The program is critical to developing sustainable biomass feedstocks for advanced, low carbon biofuels and other bioenergy applications. The program’s rapid growth far surpassed expectations, and it has led to unintended competition for feedstocks within the wood products industry. The USDA expected to spend $15 million on the program in FY 10, but it is now likely to spend more than $263 million this year, increasing to $479 million in FY 11. Congress and the administration are likely to give this program a second look this year.
Department of Transportation
The President’s FY 11 budget request for the Department of Transportation (DOT) is $78.8 billion, representing an increase of almost $2 billion (two percent above FY 10 appropriations). The minor increase reflects both the depleted reserves in the Highway Trust Fund (HTF) that funds federal surface transportation programs and an implied assumption that Congress will not pass a new transportation authorization bill before March 2011. In fact, the Obama administration has qualified the DOT budget request as a “placeholder” that highlights the critical need for major policy and funding reforms. The budget also notes a significant drop in funding relative to FY 09 which included supplemental funding from the American Recovery and Reinvestment Act of 2009 (P.L. 111-5). Within this constrained funding level, however, increased priorities on long-term investment, safety, and livability are evidenced in shifts in resources that are substantial in some cases but modest overall.
The President’s FY 11 budget request for DOT includes:
- $4 billion in seed money for National Infrastructure Innovation and Finance Fund (National Infrastructure Bank), which will help create new transportation funding mechanisms and introduce performance-based funding measures.
- $1 billion in annual funding for high-speed and intercity rail improvements, in addition to previous funding of more than $10 billion.
- $527 million to new livability initiatives within Federal Highway Administration (FHWA) and Federal Transit Administration (FTA).
- Funding for a special greenhouse gas reduction program within FTA is reduced from $75 million to $53 million .
- Modest increases to dedicated safety programs, such as the National Highway Traffic Safety Administration (NHTSA); prioritizes safety criteria for core capital programs.
Priorities for long-term investment are exemplified by a $4 billion initial seeding of a national infrastructure bank. Financing from the bank would be competitive based on project performance and ability to meet national or regional objectives. This important funding innovation points to the need to improve how transportation infrastructure will be funded in the future. The Obama administration’s signature high-speed and intercity rail program is allocated $1 billion after initial investments of more than $10 billion over the past two fiscal years.
Safety is DOT’s number one stated priority according to the administration, though explicit funding for safety programs, e.g. NHTSA, would receive minor increases under this proposed budget—again reflecting ongoing fiscal and funding mechanism constraints. Within the various capital funding programs that dominate DOT’s budget, however, the administration is overlaying safety as a primary factor for how these funds are used.
Livability—the administration’s term for increased emphasis on how transportation shapes community development and can provide Americans more travel options—is evidenced in the proposed budget by more than $500 million in new funding, split between the Federal Highway Administration (FHWA) and the Federal Transit Administration (FTA). A focus on livability is expected to have benefits for air quality, public health, energy savings, and greenhouse gas (GHG) reduction. The rest of the proposed budget, however, represents very little change in how these issues and public goals are addressed. A special fund to help reduce GHG emissions within FTA, in fact, saw a significant decrease from $75 million to $53 million . Though it is ultimately more important how these smaller funds leverage and influence larger capital expenditures, a substantial decline in resources for these efforts is inconsistent with the need for transportation to play a proportional role in meeting the nation’s GHG reduction goals.
Environmental Protection Agency
The President’s FY 11 budget request for the Environmental Protection Agency (EPA) is $10 billion, a decrease of approximately $300 million (three percent decrease from FY 10 appropriations). EPA Administrator Lisa Jackson indicated that the slight cut in EPA funds for FY 11 are in response to the President’s call to streamline agency operations through targeted program investments. The Greenhouse Gas (GHG) Reporting Registry increased to $20.8 million, an increase of approximately $4 million, as EPA prepares to implement its GHG endangerment finding under the Clean Air Act. In addition, the President has requested $30 million in new funds to support developing and deploying the technical capacity to address GHGs, with $25 million of those funds in state grants. The popular Energy STAR program is slated to receive $55.5 million, an increase of $3 million from FY 10 appropriations.