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February 12, 2016
On February 9, 2016, President Obama released his $4.15 trillion fiscal year (FY) 2017 federal budget proposal, a 5 percent increase over 2016. In his final budget request, President Obama is seeking to increase funding for his top priorities—including clean energy and climate action. The president has called climate change "one of the greatest challenges of our time," and says his proposed budget includes "new investments to help the private sector create more jobs faster, lower the cost of clean energy faster, and help clean, renewable power outcompete dirty fuels in every state."
President Obama is calling for investment into clean energy research and development to double by 2021, from $6.4 billion (in 2016) to $12.8 billion. This would represent an average increase of 15 percent a year, starting with a 20 percent increase in 2017. The United States is one of 20 'Mission Innovation' countries that pledged last November to double their investments in clean energy over the next five years.
The budget seeks $7.7 billion for clean energy research at 12 federal agencies, with the Department of Energy receiving the bulk of the funding (80 percent). The extra funding would support the development of clean, renewable energies such as bioenergy, geothermal, hydrogen, solar, water, and wind, as well as clean-vehicle technologies and energy storage. The proposed 2017 budget increases the Department of Energy’s (DOE) funding by 10 percent over 2016 estimated levels, raises the Environmental Protection Agency's (EPA) budget by 4.23 percent, and increases the Department of Transportation’s (DOT) funding by 10.27 percent.
One of the budget proposal's highlights is a $10.25-a-barrel tax on crude oil, which would raise $319 billion over 10 years to make the transportation system more sustainable. The money raised would go toward an annual $32.4 billion push to fund mass transit (which would receive an extra $20 billion a year over current funding levels), clean vehicle research, an urban planning initiative, and research on self-driving cars.
This issue brief outlines the Obama administration’s FY 2017 budget request for several clean energy programs within key agencies.
The President’s FY 2017 budget request for the Department of Energy (DOE) is $32.5 billion, a 10 percent increase from last year's enacted funding levels. This funding increase is driven in large part by new funding for Mission Innovation, a 20-nation public-private collaborative effort to double clean energy investment over the next five years. Mission Innovation was announced in the run-up to the successful international negotiations on climate change that took place in Paris at the end of 2015. The public sector investments in research and development to drive forward Mission Innovation will be amplified by the Breakthrough Energy Coalition, an associated private investment project involving 28 investors, which will focus on early-stage and innovative investments.
The Department of Energy proposal strongly supports the Administration's energy goals, including reducing domestic greenhouse gas emissions 17 percent by 2020, 26-28 percent by 2025, and 83 percent by 2050 (all with respect to 2005 levels), as well as generating 80 percent of U.S. electricity from clean energy by 2035.
The 2017 request increases the Energy Efficiency and Renewable Energy (EERE) budget 40 percent over 2016 enacted levels, to $2.9 billion for continued investments in an array of clean transportation, energy and manufacturing initiatives. Electricity Delivery and Energy Reliability would grow 27 percent to $262 million. Funding for Fossil Energy Programs would shrink 26.5 percent to $638 million, with $600 million for Fossil Energy Research and Development—$240 million of which is available from last year's balance. Nuclear Energy's budget would increase 0.8 percent to $994 million to support continued R&D in fuel cycle and advanced reactor technologies as well as continued funding for waste management. The DOE Office of Science, which is the federal government's largest funder of basic research in the physical sciences, would grow 6.1 percent to $5.67 billion.
In 2015, DOE created the Office of Technology Transitions to increase the commercialization of DOE's research through increased technology-to-market work throughout the agency. DOE is asking for $8.4 million to support the new office. The proposal also funds the President's new 21st Century Clean Transportation Plan at a mandatory funding level of $1.335 billion to carry out clean energy research and development in the transportation sector; advance biofuels; and establish a facility to study how vehicle automation and connectivity will affect the energy system.
The budget also greatly increases funding for the Advanced Research Projects Agency – Energy (ARPA-E), which has shown a good track record in successfully funding the development of innovative energy technologies that are not ready for market investment. In line with the agency's original goal to fund ARPA-E at a $1 billion level, the budget request proposes a 72 percent increase in its budget over 2016 enacted levels to $500 million, with the intention to ramp funding up to $1 billion over the next five years.
The Office of Indian Energy (IE) is shown as having no historical funding as its previous budget came from departmental administration. The budget request for IE is $23 million, which includes a doubling of its budget for technical assistance to $6 million and a continued $12 million in grants for deployment and assistance in setting up energy systems.
The President’s FY 2017 Energy Efficiency and Renewable Energy budget request for DOE includes the following:
Renewable energy programs:
Sustainable transportation programs:
Energy efficiency programs:
The budget request continues to fund six crosscutting initiatives originally proposed last year, and proposes one new initiative. They include work on grid modernization, supercritical carbon dioxide (sCO2)-based power generation, subsurface technology and engineering, the energy-water nexus, exascale computing, cybersecurity, and—the latest initiative—advanced materials for energy innovation. DOE's crosscutting initiatives showcase an overlay of priorities which elaborate on the funding levels above. Crosscuts are a way to organize work which transcends office silos and leverage multi-disciplinary efforts to maximize progress.
In addition, DOE is requesting funding for a new program, Crosscutting Innovation Initiatives, which will help speed up the commercialization and innovation of clean energy technology. This program is separate from DOE's overall crosscutting initiatives, and will operate under EERE. The project will strengthen regional clean energy innovation, speed up the development of next-generation clean energy, and encourage innovation and technology transfer from Federal research to markets.
The Bioenergy Technologies Office (BETO) is part of DOE’s Sustainable Transportation initiative, within the Office of Energy Efficiency and Renewable Energy. The FY 2017 budget proposes funding of $279 million for BETO, a 24 percent increase over FY 2016 appropriations. In FY 2017, BETO will focus on algae, microbial waste and cellulosic feedstocks in an effort to overcome technical barriers towards developing 'drop-in' biofuels from these sources at $3.00 per gallon of gasoline equivalent by the end of 2017.
A collaborative program between BETO and the Vehicle Technologies office, the Co-Optimization of Fuels and Engines (Optima) is funded at $15 million. This program "establishes a link early in the R&D cycle of both fuels and engines … to create optimized solutions for fuels and engines" and was first authorized in FY 2016.
Within the Bioenergy Technologies program:
ARPA-E is conducting basic and applied research into plant genetics, microbes, biomass conversion, and biofuels. Major contributors to these efforts are the DOE Bioenergy Research Centers, three regional centers that undertake the research necessary to build a cost-effective and sustainable advanced cellulosic biofuels industry. Funding for the DOE Bioenergy Research Centers is set at $90 million for FY 2017.
The Basic Energy Sciences program at ARPA-E includes Chemical Transformations Research that focuses on "the efficient conversion of traditional and new feedstocks into higher-value fuels and other chemicals" with one priority feedstock being biomass. The program is funded at $106 million for FY 2017.
Within the office of Fossil Energy Research & Development, biomass is included in the Carbon Capture and Sequestration (CCS) and Advanced Power Systems budget. Technology developments in gasification systems to "facilitate co-feeding of coal with biomass or waste" is among the technologies listed in advanced combustion systems, which is funded at $30 million for FY 2017. The total carbon capture budget is set at $170 million, and the carbon storage budget is $91 million for FY 2017.
Now in its third year of funding, the Agricultural Act of 2014 (Farm Bill) continues to fund energy efficiency, renewable energy, and conservation programs established under its energy title. While President Obama’s FY 2017 budget request for energy title programs is $9 million less than FY 2015 funding levels, the request is similar to the mandatory funding levels outlined by the Farm Bill. The Farm Bill contains robust mandatory funding for its energy title programs over its five-year authorization, however Changes In Mandatory Spending (CHIMPS) enacted through the appropriations process have reduced mandatory funding outlined by the Farm Bill since 2014 (see table notes).
The President’s FY 2017 USDA budget request includes stable or increased funding levels for other programs that will continue to put farms, forests and rural economies on a more sustainable path. Research on climate change and its impacts on crop yields, food security, and food safety received attention throughout the budget request. Conservation, bioenergy, and related program requests include:
The FY 2017 EERE budget proposal includes $289 million for Building Technologies, an increase of $88.5 million over FY 2016 appropriations. The funding supports the goal of reducing U.S. building energy consumption by 50 percent (from the 2010 Annual Energy Outlook baseline). For 2017, the emphasis is on emerging technology R&D in lighting, heating and cooling, and the building envelope. A new multi-year program, with $40 million in proposed funding for 2017, is seeking a "paradigm shift" away from today’s refrigerant-based equipment to technologies with low/no-global warming potential (GWP). The 2017 budget continues to support the establishment of minimum energy efficiency standards for equipment and appliances and initiates a Metropolitan Systems activity to develop tools for cities to "become low carbon, affordable, livable, economically viable, and more resilient to extreme events." BTO will also assist in the crosscutting activity to improve the efficiency and resiliency of the electric grid.
Please see the Department of Energy budget analysis for more information on DOE Building Technologies Programs.
HUD’s FY 2017 budget proposes $48.9 billion in budget authority, an increase of $1.9 billion over the FY 2016 appropriation. This budget reflects the need to address a national shortage of affordable rental housing, cited in recent studies such as The State of the Nation’s Housing 2015 (Joint Center for Housing Studies, Harvard University: 2015). The 2017 HUD budget seeks to support 4.5 million households through rental assistance, reduce homelessness, and support community revitalization efforts, particularly in tribal communities. Energy efficiency is a goal throughout HUD’s housing programs, with the recognition that lower utility costs benefit those who receive housing assistance as well as the federal government and taxpayers who help fund it. Energy efficient housing is more affordable housing.
Energy-related and resilience items included in the Department’s FY 2017 budget request:
GSA is the landlord for the federal government, owning and leasing space in nearly 10,000 buildings in more than 2,000 communities nationwide. In addition to office buildings, GSA properties include courthouses, laboratories, post offices, data centers and land ports of entry.
GSA reports it has improved energy and water efficiency by 26.6 percent and 28.7 percent respectively across the federal portfolio from 2007 to 2014. At the Wayne N. Aspinall Federal Building in Denver, CO, photovoltaic panels on the roof provide enough energy to power the building’s peak demand; it became the first net-zero building listed on the National Register of Historic Places. The agency has increased the use of Energy Savings Performance Contracts (ESPCs), implementing 16 contracts since 2012 that will further improve energy performance at 93 buildings across the country.
The GSA's 2017 budget request includes $10 million for the Energy and Water Retrofit and Conservation Measures Program, which implements energy and water retrofit and conservation measures in government-owned buildings. GSA is identifying suitable projects in federal buildings: they must have positive savings-to-investment ratios and provide reasonable payback periods. In addition to energy and water retrofit work, the projects will include geothermal and other High Performance Green Building retrofit work, as well as design and construction work for new facilities that incorporate these technologies.
The Office of Federal High Performance Green Buildings budget request for FY 2017 is $4.3 million. The Office supports the federal government as it seeks to operate more effectively and efficiently, and it advances the Administration’s sustainability goals by minimizing the federal footprint through efficient use of energy, water, and resources.
The proposed Department of Transportation (DOT) FY 2017 budget requests a total of $98.1 billion in mandatory and discretionary funds, a 29 percent increase above the $76 billion enacted for 2016. The request fully supports the funding levels authorized in the recently enacted Fixing America’s Surface Transportation (FAST) Act. It expands that support with new 21st Century Clean Transportation Plan Investments to move the nation toward a cleaner, intermodal transportation network, and to support regional strategies to better connect the many communities that cross administrative boundaries. The proposed clean transportation investments, funded by a $10.25 per barrel fee on oil are:
Apart from the $6.385 billion in clean transportation investments listed above, the Federal Transit Administration's budget request for $19.9 billion sets funding at levels authorized in the FAST ACT, except for an additional $1.3 billion in Capital Investment Grants. Taken altogether, these grants would fund 31 New Starts projects in 18 states. Funding for low and no emission buses ($55 million) is now part of the Bus Discretionary Program reinstated by the FAST Act. The requested funding levels would reverse the deterioration of transit infrastructure, maintain and grow the economic vitality of the nation’s communities as their transportation needs evolve (through urbanization and population growth), and concurrently help establish a clean energy economy, combat climate change, and improve public health.
Two new freight programs, established by the FAST Act, are included in the Federal Highway Administration's budget request for $51.5 billion. The Nationally Significant Freight and Highway Project Program (NSFHP) provides for $850 million in discretionary grants, overseen by the new National Surface Transportation and Innovative Finance Bureau (NSTIFB) in the Office of the Secretary. The FAST Act limits funding for multimodal projects to about 10 percent of program grants. The National Highway Freight Program provides $1.1 billion of formula funding for states to improve the National Highway Freight Network based on their multimodal state freight plans. More than 95 percent of the funding from these programs go to roadways. The budget request includes a third new multimodal freight program in its Clean Transportation plan, to increase the entire network’s services and efficiency, while decreasing pollution.
The Surface Transportation Block Grant Program ($11.4 billion), established by the FAST Act, includes the former Surface Transportation Program and sets aside $835 million for alternative transportation projects, such as pedestrian and bike facilities, recreational trails, and safe routes to schools (such projects were formerly under the Transportation Alternatives Program). The portion of this program that states must allocate by population grows from 50 percent in 2015 to 55 percent by 2020, incrementally increasing local and regional governments’ ability to fund their priorities. The budget request’s 21st Century Regions grants (see above) would accelerate this trend.
The request fully supports the $275 million authorization for the Transportation Infrastructure Finance and Innovation Act (TIFIA) program to subsidize up to $8 billion in loans for public-private partnership projects of national or regional significance – transit-oriented development projects are now eligible. The new NSTIFB (see above) will also manage the TIFIA program. The Congestion Mitigation and Air Quality (CMAQ) Improvement program ($2.4 billion) provides flexible funds for state and local governments to reduce regional congestion and meet air quality standards. The Metropolitan Transportation Planning Program ($336 million) supports regional multi-modal planning.
The Federal Railroad Administration's budget request ($6.3 billion) would nearly triple FAST-authorized funding for the Federal State Partnership for State of Good Repair to $400 million, and increase other current services funding by about 25 percent to $1.9 billion. The $3.7 billion request for the Rail Service Improvement Program is in the Clean Transportation Plan (see above).
The $167.5 million Research, Engineering and Development program in the Federal Aviation Administration's budget request maintains $6 million to continue partnerships with industry to transition general aviation off leaded fuel to an unleaded replacement. It also maintains $26 million to increase efficiency and reduce harmful emissions by advancing alternative jet fuels. The Pipeline and Hazardous Materials Safety Administration regulates a 2.6 million mile pipeline network and about 1 million movements of hazardous materials. It requests $295 million, a $45.6 million increase over 2016 enacted levels to, among other things, improve data usage to make more effective use of inspection resources, and to improve coordination with state agencies.
Please see the Department of Energy budget analysis regarding vehicle technology, biofuels, hydrogen, fuel cells and additional 21st Century Clean Transportation Plan Initiatives.
The President’s FY 2017 budget request for the Environmental Protection Agency (EPA) is $8.27 billion, an increase of $127 million (1.56 percent) from FY 2016 enacted funding. The budget provides an increase of $25 million to help states implement climate change fighting strategies as part of the Clean Power Plan. The budget seeks $1.65 billion over 10 years to launch the Climate Infrastructure Fund, which would provide funding to retrofit diesel engines in trucks and buses (particularly school buses) to make them more efficient, or to replace them altogether.
The EPA breaks down its budget request into five overall goals. Two of those goals are highlighted below.
The Climate Protection Program of the FY 2017 EPA budget request, part of the "Addressing Climate Change & Improving Air Quality" goal, includes $115.9 million to support the Climate Action Plan and the ENERGY STAR program. The $12.4 million increase in the Climate Protection Program over the FY 2016 enacted budget includes a $7.6 million increase to support the Climate Action Plan, which focuses on the reduction of hydrofluorocarbons (HFCs) and implementation of the Interagency Methane Strategy. The Climate Protection Program also includes a $1.9 million increase for the ENERGY STAR program to enable local, state-wide, and federal government offices to better measure the greenhouse gas emissions of buildings.
The Addressing Climate Change & Improving Air Quality goal also includes $25 million in additional funding to help states comply with the Clean Power Plan, including reducing carbon dioxide (CO2) emissions from new and existing power plants, and reducing methane emissions from oil and natural gas drilling sites and landfills. The EPA will lead the Global Methane Initiative (GMI) and work with the Climate and Clean Air Coalition in order to reduce Short Lived Climate Pollutants (SLCP).
The Cleaning Up Communities & Advancing Sustainable Development goal includes an increase of $6.4 million dollars to assist with communities disproportionally impacted by environmental disasters and climate change mitigation. The EPA also requested $15.9 million for the Environmental Justice program, in order to engage minority, low-income and tribal communities and address their concerns regarding climate change. $17 million will go to climate resilience through Wetlands Program Development Grants.
The FY 2017 EPA budget request also includes:
The Department of State’s FY 2017 budget request includes $983.9 million for the Global Climate Change Initiative (GCCI) to help developing countries reduce their greenhouse gas emissions, invest in clean energy, increase energy efficiency, stop deforestation, and mitigate the impacts of climate change. With additional funding from the Treasury Department and the U.S. Agency for International Development, the Obama Administration would provide a total of $1.3 billion for the Global Climate Change Initiative. The GCCI helps reinforce the Paris Climate Agreement by helping countries reduce their greenhouse gas emissions and improve their carbon accounting measures.
Of the $983.9 million provided by the State Department to the Global Climate Change Initiative, $500 million is budgeted for the Green Climate Fund, which would be supplemented by $250 million from the Department of Treasury, for a total of $750 million. This is in line with the U.S. pledge to contribute $3 billion over four years to the Green Climate Fund. Another $147 million of GCCI funds would be set aside for the Global Environment Facility (GEF), which helps cover the costs of making development projects environmentally friendly.
The State Department's contribution to the Global Climate Change Initiative would also provide $310 million in direct assistance to developing countries for climate adaptation and clean energy initiatives. Of the $310 million, $142 million would help poor countries develop and implement their National Adaptation Plans, $93 million would be specifically set aside for clean energy programs (including modernizing regulatory policies and improving grids), and $75.5 million would help prevent deforestation and land degradation.
The U.S. Agency for International Development (USAID), under the aegis of the State Department, runs the Power Africa program, which aims to provide renewable energy generation projects to 60 million households and businesses in Africa. The 2017 budget request includes $291 million for Power Africa, a substantial increase from the $76.7 million request in FY 2016.
The Department of Commerce's $9.75 billion budget request includes $5.9 billion in budget authority for the National Oceanic and Atmospheric Administration (NOAA), up $50 million from enacted FY 2016. The request includes $2.3 billion to fund the next generation of weather and environmental satellites. The agency has requested $520 million for NOAA’s Office of Oceanic and Atmospheric Research (OAR), a $38 million increase over enacted FY 2016. The NOAA budget request includes $20 million for its Regional Coastal Resilience Grant program (a 400 percent increase over enacted FY 2016).
Also part of the US Department of Commerce is the National Institute of Standards and Technology (NIST), whose mission is to advance measurement science, standards and technology, and maintain national standards to ensure fairness in the marketplace. Priorities for its Built Environment program are energy efficiency, energy-rating software tools, indoor air quality, hazard prevention, and tools to predict the effects of hazards on building performance.
The Department of Interior’s (DOI) $13.4 billion budget request includes $97 million for renewable energy development programs ($3 million more than enacted FY 2016). The renewable funding request includes $34 million for the Bureau of Ocean Management, $29 million for the Bureau of Land Management, $11 million for the Fish and Wildlife Service, and $9 million for the Bureau of Indian Affairs. The agency requests $171 million ($31 million over enacted FY 2016 levels) for the U.S. Geological Survey’s Climate and Land Use Change initiative, which studies and forecasts impacts on the country’s natural resources. The budget proposes $200 million for the first year of a new 10-year, $2 billion Coastal Climate Resilience program to support at-risk coastal states, local governments, and their communities as they prepare for and adapt to climate change.
The Department of Defense's (DOD) budget provides support for energy efficiency initiatives (including improving fuel efficiency), developing new energy technologies, and expanding renewable energy resources. The Energy Conservation Investment Program (ECIP), which supports renewable energy and energy efficiency projects at military installations, remains at the enacted FY 2016 level of $150 million. The budget request also includes $52 million for the Navy Energy Program, $4 million less than in enacted FY 2016.
Authors: Alison Alford, John-Michael Cross, Paul Haven, Laura Small, Jessie Stolark, Ellen Vaughan
Editors: Carol Werner, Amaury Laporte
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