DOE’S MCCONNELL PLANS FOSSIL ENERGY PROGRAM FOR ‘FISCAL CLIFF’

Tamar Hallerman
GHG Monitor
12/7/12

MIDLAND, TEXAS—Assistant Secretary for Fossil Energy Chuck McConnell said he is preparing the Department of Energy’s Office of Fossil Energy for the impending fiscal cliff in a manner similar to the way he has managed operations under recent temporary budget measures. In an interview on the sidelines of a carbon management workshop here, McConnell said he has become accustomed to running the program largely on a month-by-month basis under stop-gap budget measures because Congress has been unable to pass budgets on time. “The preparations for the fiscal cliff aren’t a whole lot different from the preparations we’ve been making under the Continuing Resolutions that we’ve been living under,” McConnell said.

The so-called fiscal cliff—a series of major tax and budget disruptions that will gradually take effect over the early months of 2013—will begin in January unless the White House and Congressional Republicans hammer out some sort of compromise legislation by the end of the year. While both sides have released initial proposals in recent weeks, negotiations currently appear all but deadlocked, according to the reports. One of the first major hurdles to pop up if the nation goes off the fiscal cliff is a budget sequestration, or automatic across-the-board spending cuts, on Jan. 3. The sequestration, which will cut the national deficit by $1.2 trillion over the next decade ($110 billion annually), is expected to slash the budgets for all discretionary programs by more than 8 percent, according to a September estimate from the White House. For DOE’s Fossil Energy R&D, which currently operates at a budget of $534 million, that would mean a $44 million cut. The White House says that level of budget slashing would be “deeply destructive” for discretionary programs.

Maintaining ‘Care and Feeding’

In remarks to GHG Monitor, McConnell said the program’s month-to-month budgets under the recent stop-gap measures have severely constrained activities already. “We’ve been in a mode for the past year or so with Continuing Resolutions where we’ve been operating on a month-to-month basis,” he said. “What that does is constrain your ability as organization to be able to look at the year in front of you, and it drives you to tactical month-to-month situations where you’re maintaining the care and feeding of an organization, but you’re not strategically able to deploy and move programs forward. If we’re looking for transformational technology changes, and we’re trying to operate it on a month-to-month tactical basis, it becomes very difficult and challenging.”

McConnell said he has aimed to position his office to do more with less money and increase the number of projects with industry in order to help buoy research and operations. But in a subsequent speech at the workshop here, he also underscored the need for Congress and the White House to work out some sort of compromise regarding the fiscal cliff. “Our ability to actually start to project out strategically will continue to be impaired by the lack of a passed budget and a resolution that we can get behind,” he said. “We can’t keep punting things and kicking the can down the alley. We’ve got to deal with them.”