President Obama appeared earlier this month at Penn State University. Photo taken by Marshall Stephens, DWM magazine.

U.S. Secretary of Energy Steven Chu detailed President Barack Obama’s $29.5 billion fiscal year 2012 budget request for the Department of Energy (DOE) and the Environmental Protection Agency yesterday. The budget details funds that will be used to promote the energy efficiency goals that were part of the recently announced Better Buildings Initiative. Highlights in the FY 2012 DOE budget include:

• $3.2 billion for energy efficiency and renewable energy programs;

• Promoting renewable energy and energy efficient projects with $300 million in credit subsidies to support $3-4 billion in projects;

• $5.4 billion for the Office of Science to expand investment in basic energy sciences, advanced scientific computing and biological and environmental sciences;

• $550 million for the Advanced Research Projects Agency-Energy (ARPA-E) to continue support for the promising early-stage research projects that could deliver game-changing clean energy technologies;

• $146 million to support the three existing Energy Innovation Hubs and to establish three new Hubs in the areas of batteries and energy storage, smart grid technologies and systems and critical materials; and

• $100 million to continue supporting 46 Energy Frontier Research Centers started in 2009.

In developing this budget, several program reductions and terminations are proposed. They include:

• In the Office of Energy Efficiency and Renewable Energy, DOE reduced funding for the hydrogen technology program by more than 40 percent, or nearly $70 million in order to focus on technologies deployable at large-scale in the near term.

• DOE has reduced the budget for the Fossil Energy Office by 45 percent, or $418 million. This includes zeroing out the Fuels Program, the Fuel Cells Program, the Oil and Gas Research and Development Program, and the Unconventional Fossil Technology Program.

• The proposal to repeal a number of subsidies and tax preferences available for fossil fuels. Repeal of these subsidies and preferences will save the taxpayer approximately $3.6 billion in FY 2012.

• The Department is reducing administrative expenses across all programs in the FY 2012 budget from FY 2010 levels.

The Obama Administration also proposed a FY 2012 budget yesterday of $8.973 billion for the U.S. Environmental Protection Agency (EPA). This budget proposal represents about a 13 percent decrease from the FY 2010 budget of $10.3 billion.

“As millions of families are cutting back and spending less, they expect the same good fiscal sense out of their government. That is why this budget reflects the tough choices needed for our nation’s short- and long-term fiscal health – and allows EPA to maintain its fundamental mission of protecting human health and the environment,” said EPA Administrator Lisa P. Jackson. “This budget focuses our resources on the most urgent health and environmental challenges we face. Though it includes significant cuts, it provides EPA with what we need to fundamentally protect the health of the American people.”

The budget includes an additional $46 million for regulatory efforts to reduce greenhouse gas (GHG) pollution and implement GHG reporting requirements under the Clean Air Act. This includes $25 million for states and $5 million for EPA to address GHGs in Clean Air Act permitting activities.

“Clearly there are huge differences between the President’s budget proposal and the House GOP plan and we are still a ways from finding out how much middle ground there is between the two parties,” says WDMA president Michael O’Brien. “How DOE and EPA absorb any final cuts has yet to be determined and whether specific cuts to the ENERGY STAR program make it through both chambers is unknown. We recognize that significant cuts must be made to the federal budget and we will be actively involved as the debate progresses. We are encouraged by the efforts to curb EPA’s ability to implement the GHG regulations and believe it will add pressure on the Administration to revisit the issue.”

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