FY13 ENERGY APPROPRIATIONS BILLS RESTORE MONEY TO FOSSIL ENERGY R&D

Tamar Hallerman

GHG Monitor

04/27/12

The respective versions of the Fiscal Year 2013 Energy and Water Appropriations bills approved by Senate and House appropriators this week restore some or all of the funding to Department of Energy Fossil Energy R&D programs that the Obama Administration sought to cut in its FY13 request. During a rare week in which both the House and Senate Appropriations Committees met and rapidly approved the energy spending bills, appropriators backed DOE funding measures that would provide significant bumps to carbon capture and storage and coal plant efficiency programs that were trimmed in the President’s Feb. 13 budget request.

Reports accompanying the House and Senate bills reflected two appropriations panels that overall had fairly divergent priorities—House Republicans focused heavily on mitigating rising gasoline prices, while Senate Democrats pushed for more investment in clean energy technologies. But both reports showed an interest, albeit in varying degrees, in supporting Fossil Energy R&D programs beyond the levels the Obama Administration recommended in its request. In its FY2013 budget request, the White House asked for $420.58 million for Fossil Energy R&D programs, a roughly 21 percent cut from currently enacted FY2012 level of $534 million (see chart). In its budget justification, the White House said much of the cut would be offset by extra money previously allocated under the 2009 stimulus bill and that program coffers would not be as small as they initially appear in the budget request.

The House report criticized the Administration’s cuts to the program, arguing that steady funding levels for Fossil Energy are needed to help produce cheaper sources of domestic electricity like coal and natural gas at a time of rising gasoline prices. The funding bill passed by the House Appropriations Committee April 25 provides $554 million for the program, a nearly  32 percent increase over the White House’s budget request. “At a time when fossil fuel power generation is expanding around the globe and gas prices are at record high levels, the activities funded within this program advance our nation’s position as a leader in fossil energy technologies and ensure that we use the full extent of our vast domestic resources safely and efficiently,” the House report says. As expected, the Senate report provided fewer details of its spending plan for DOE and often took a middle ground between the House and the Obama Administration’s requests, recommending $460.58 million for the Fossil R&D program, a roughly 10 percent increase above the request.

Bills Seek to Restore CCS, Power Systems Funding

Within the Fossil Energy R&D line item, the CCS and Power Systems program received increases over the Obama Administration’s $275.87 million request in both the House and Senate bills. The House version provides $384.29 million for the program, a $108 million increase over the Administration’s request, while the Senate version proposes a $301.62 million allocation, roughly $26 million above the White House’s request. For carbon capture and carbon storage programs, the Senate bill passed April 26 matched the Administration’s budget request, recommending $60.44 million carbon capture and $95.48 for carbon storage research, which represent approximately 12 and 17 percent cuts compared to FY2012 enacted levels, respectively. The House measure roughly matches current funding levels, but notably carves out $16 million in additional support for enhanced oil recovery technologies and projects.

Both the House and Senate measures also increase funding for the Office of Fossil Energy’s Advanced Energy Systems and Cross-Cutting Research programs, which faced 45 and 40 percent budget cuts in the Obama Administration’s budget request, respectively, compared to FY2012 enacted levels. The House bill roughly doubles funding for both programs compared to the White House’s request, most notably by restoring funding to the solid oxide fuel cells and coal-biomass to liquids programs that were zeroed out by the White House in the FY2013 request. The House report says that restoring the budgets would help improve the efficiency of fossil power generation, protect against rising gas prices and help U.S. industry compete internationally. The Senate bill matches the White House request for Cross-Cutting Research, but calls for $25 million increase above the Administration’s request for Advanced Energy Systems, also advocating for the continuation of the solid oxide fuel cell systems program.

Different Discretionary Caps

Both bills share common ground in that they both largely increase funding for the Fossil Energy R&D program above the Obama Administration’s request. However, the Energy-Water bills could face a larger rift down the road to approval by both chambers of Congress because they both ultimately work under different funding caps for discretionary spending. In the House version, appropriators adhered to a lower government-wide cap on discretionary spending of $1.028 trillion for all programs. That amount falls below the $1.047 trillion amount agreed to in last summer’s debt negotiations between House Republicans and the Obama Administration, also the amount Democrats followed in their Senate Appropriations bill.

The Democrats are backed by the White House, which last week said it would block any spending bill that did not comply with the $1.047 trillion funding level. In a letter sent to House Appropriations Committee Chairman Hal Rogers (R-Ky.), acting Office of Management and Budget Director Jeffrey Zients criticized House Republicans for using spending caps that are billions of dollars below the debt limit agreement, saying that as a result either all appropriations bills will provide “inadequate funding” or that some bills will provide adequate funding while others will include “deeper, more problematic” cuts. “Until the House of Representatives indicates that it will abide by last summer’s agreement, the President will not be able to sign any appropriations bills,” Zients wrote. It is not yet clear whether a new set of negotiations will be required before a deal can be reached or whether the Energy-Water measure will be able to pass without much of a fight.