On June 20, the U.S. House of Representatives Committee on Appropriations held another hearing to discuss the proposed Department of Energy 2018 budget. It went about how you might expect. Testimony and witness statements showed that clear party lines have been drawn.

For nearly two and a half hours, the impacts of potential budget cuts were discussed with much of it revolving around cyber and nuclear security and very little being said about the Office of Energy Efficiency & Renewable Energy (EERE) and its programs.

If you don’t have the time to watch the full webcast, here’s a snapshot of which programs will benefit from the proposed budget:

  1. Defense increase. In addition to the president’s proposed $50 billion budget increase for the Department of Defense, it appears that the Department of Energy is adding several billion in defense-related spending as well, covering nuclear security and enterprise modernization.
  2. Cybersecurity increase. Cybersecurity is also getting close to $100 million in increased budget, which must be offset by deep cuts elsewhere.
  3. Exascale computing increase. The collaborative effort spanning several government organizations, including the DOE, is earmarked to receive up to $250 million in increased budget to build a new class of high-performance “super computers” that promise to enhance security, medicine and earth sciences.
  4. Nuclear waste increase. The proposal also adds $670 million more for nuclear waste management.

On the other hand, there are several programs – in addition to the much-discussed ENERGY STAR® elimination – that will face cuts so budgets can be reallocated to the above:

  1. Termination of Deployment programs, such as State Energy and Weatherization Assistance. The proposal includes $3.1 billion in cuts, eliminating these programs with $265 million coming from the EERE where window and door programs are run and funded.
  2. Termination of other programs, such as Advanced Research Projects Agency-Energy (ARPA-E). ARPA-E, which funds very early stage R&D, connecting investors with private and public labs, would see $300 million in cuts.

The View from Here?

As I have said before, cuts are inevitable and a healthy review of program spending is a good thing.

However – and it is a big however –  elimination of highly successful programs, such as ARPA-E, Weatherization Assistance and the State Energy Program, makes little sense to me when these programs have saved billions, created jobs and boosted the economy. In particular, ARPA-E cuts are a point of controversy, given the assertion that the budget is designed to support early stage R&D.

What’s your view? Email me directly at eric.jackson@quanex.com.

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