HOUSE APPROPS BILL INCREASES FOSSIL ENERGY R&D FUNDING

Tamar Hallerman

GHG Monitor

04/20/12

The House version of the Fiscal Year 2013 Energy and Water Appropriations bill increases funding for Fossil Energy R&D within the Department of Energy, restoring funding to a program that was ultimately scaled back in the Obama Administration’s February budget request. The bill, approved by the House Energy and Water Appropriations Subcommittee this week, provides $554 million for Fossil Energy R&D, more than 30 percent above President Obama’s $421 million request. The figure is also $20 million above the program’s FY2012 enacted level, which notably included a $187 million recision for unobligated funding from American Electric Power’s halted Mountaineer carbon capture and storage project.

The Fossil Energy R&D program was one of the only winners in the funding bill, which now moves to consideration by the full House Appropriations Committee. Overall, the measure allocates $26.3 billion for DOE programs, $1.8 billion below the Obama Administration’s request and $368 million below currently enacted levels. The bill achieves the bulk of its cost savings from cuts to the Advanced Research Projects Agency-Energy (ARPA-E) program, which was allocated $200 million—$150 million below the President’s request and $75 million less than FY2012 levels—and the Office of Energy Efficiency and Renewable Energy (EERE). That program was allocated nearly 40 percent less than the Administration’s request of $2.3 billion and 20 percent below the program’s current funding level of $1.8 billion. Subcommittee leaders said most of the cuts to EERE came from its applied R&D program. 

The measure largely maintains funding for DOE’s Office of Science, recommending $4.8 billion for the program, a slight decrease from its enacted $4.9 billion budget and the Administration’s $5 billion request. In particular, the subcommittee recommended cutting the Office’s fusion energy program proposed by the President and instead focusing on high performance computing systems, basic scientific exploration and R&D work into new clean energy sources in order to “help spur future economic growth.” “This basic research will lay the groundwork for more efficient and practical domestic energy solutions in the future to help reduce the nation’s dependence on foreign oil, and help promote future growth in American businesses and industries,” a Republican fact sheet stated.

Republican Priorities Reflected

The funding measure largely follows House Republicans’ rhetoric on DOE’s budget priorities over the last several months. The increase of funding to DOE’s Fossil Energy R&D program comes after Republicans heavily criticized the Obama Administration for not adhering to the President’s stated “all-of-the-above” energy strategy and cutting funding from programs that could help lower the cost of electricity in the shorter-term. While few details were published about individual programs within the Fossil Energy R&D program, committee leaders said they would be creating a $25 million shale oil research program. Appropriations Committee Republicans had also criticized the Administration’s boost to EERE funding in its request, saying that the budget increase to the program was too large and that the technologies developed would do little to combat high fuel prices in the future.

The subcommittee said it focused many of its funding priorities on helping combat rising gas prices. In addition to increasing funding for fossil energy programs, subcommittee leadership said it earmarked more than $1 billion in the budget to “strengthen Department of Energy programs addressing the causes and impacts of higher gasoline prices in the future.” However, in a prepared statement during the subcommittee markup, Chair Rodney Frelinghuysen (R-N.J.) said that there is no quick fix for high gasoline prices.

Some Democrats on the subcommittee, though, criticized the cuts to EERE and ARPA-E. “Overall, many programs in this Energy and Water bill are sufficiently funded; however, I have concerns about the funding levels provided to certain accounts. Of particular concern are the deep cuts to the Energy Efficiency & Renewable Energy program as well as steep reductions to the ARPA-E program. These efforts are vital to our gation’s innovation in the energy sector,” Committee Ranking Member Rep. Norm Dicks (D-Wash.) said in prepared testimony at a subcommittee markup this week.

Text Uses Lower Spending Cap

Subcommittee leaders in the text of the bill notably adhered to the lower government-wide cap in discretionary spending that House Republicans said they would follow for FY2013, $1.028 trillion for all programs, a level that falls below the $1.047  trillion amount agreed to in last summer’s debt negotiations between House Republicans and the Obama Administration. Appropriations Committee Chairman Hal Rogers (R-Ky.) said in a statement that the proposed funding levels for Energy-Water programs will help contribute to a “responsible and responsive” federal budget. “While cutting spending in lower priority programs, the bill focuses taxpayer dollars where they are most needed and best used,” he said.

However, Democrats have complained that the lower limit undercuts the agreement made with the President. “While it is always encouraging to see the appropriations process get underway, I fear that the outlook for this year’s bills may be ominous given the Republican’s choice to renege on the [budget] agreement and cut the FY2013 allocation by $19 billion,” Dicks said in a statement earlier this week. “The overall discretionary allocation… threatens to stall economic growth and job creation. However, I am cautiously optimistic that this allocation is merely temporary; at the end of the day, the real level will be $1.047 trillion, not $1.028.”

Meanwhile, the White House this week threatened to block any spending bill that did not comply with the $1.047 trillion funding level. In a letter sent to Rogers, 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.