Sarah Stein

February 12, 2010

On February 1st, the Department of Energy revealed a $28.4 billion budget request for the 2011 fiscal year, which begins in October. The budget is focusing on expanding research and development, clean energy and efficiency technologies and creating a secure electric grid. The budget allots more than $217 million in new science research and discovery, $108 million in expanding research in the areas of wind, solar and geothermal energies, $40 million for the Office of Electricity to assist in the creation of a secure grid and a 5% increase for clean energy and energy efficiency advances, which are slated to help meet the President's pledge to cut greenhouse gas emissions 17% by 2020. Not included in the budget, but part of the proposed plans are $36 billion in loan guarantees for nuclear energy and another $3-6 billion for renewable energy loan guarantees.

In addition, the new budget proposes an elimination of more than $2.7 billion in tax subsidies for oil, coal and gas industries. The proposed elimination is slated to generate more than $38 billion in revenue over the next ten years. The proposal also calls for the elimination of the ultra-deepwater exploration program and cancelling the planned expansion of the Strategic Petroleum Reserve saving a combined total of more than $120 million.

Many are viewing this budget as a promising sign that the Administration is finally taking active steps to move towards green energy options. Others are calling the elimination of tax subsidies "aspirational" due to a lengthy Congressional history of failure. While many Nuclear Power supporters are both relieved and surprised by the increase in funding, others are concerned about the effect on tax payers if the Nuclear Industry defaults on their loans. The Congressional Budget Office cited in 2003 a more than 50% risk of default on such a loan guarantee. The bottom line is that this budget request is left to the hands of Congress and we can only wait and see how Congress chooses to implement the figures.

Sources:

Congressional Budget Office, Cost Estimate: S. 14, Energy Policy Act of 2003 (April 30, 2003)

http://www.cbo.gov/doc.cfm?index=4206&type=0 (last visited Feb. 11, 2010).

Department of Energy, The Budget for Fiscal Year 2011 (Feb. 1, 2010) available at

http://www.whitehouse.gov/omb/budget/fy2011/assets/doe.pdf.

Environmental Leader: Energy and Environmental News for Business, DOE Budget Targets Clean Energy, Energy Efficiency Advances (Feb. 2, 2010) http://www.environmentalleader.com/2010/02/02/presidents-energy-budget-targets-clean-energy-energy-efficiency-advances/ (last visited Feb. 11, 2010).

Environmental Leader: Energy and Environmental News for Business, U.S. Officially Pledges to Cut GHG Emissions by 17% (Jan. 29, 2010) http://www.environmentalleader.com/2010/01/29/u-s-officially-pledges-to-cut-ghg-emissions-by-17/ (last visited Feb. 11, 2010).

Fessler, David, NuWire Investor, Advancements In Geothermal Energy Could Help The Environment And Investors (Feb. 11, 2010)

http://www.nuwireinvestor.com/articles/advancements-in-geothermal-energy-could-help-the-environment-and-investors-54618.aspx (last visited Feb. 11, 2010).

Green Car Congress, $3.8 Trillion FY 2011 US Budget Proposal Boosts Department of Energy Spending (Feb. 11, 2010) http://www.greencarcongress.com/2010/02/doe-budget-20100201.html (last visited Feb. 11, 2010).

Grist: A Beacon in the Smog, Digging into Obama's 2011 budget on energy and the environment (Feb. 10, 2010) http://www.grist.org/article/2010-02-01-digging-into-obamas-2011-budget/ (last visited Feb. 11, 2010).