2. DOE:
Obama admin could use past energy investments to defend spending increases
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The Obama administration has been carefully setting itself up to plead a case for increased "clean energy" technology research spending as it prepares to roll out its fiscal 2012 budget request today.
During his State of the Union address last month, President Obama called for increasing spending by a third at Energy Department clean energy research programs like the Advanced Research Projects Agency-Energy and the energy innovation hubs. His budget request today is expected to reflect those proposed increases while recommending hefty cuts for traditional energy sources.
Specifically, the request will likely call for an elimination of tax incentives for the oil and gas industry. It also reportedly will cut spending on hydrogen and fossil fuel research programs by 50 percent and shutter two national labs.
Fiscally conservative Republicans -- who are also prepping legislation to fund the government for the rest of this year with cuts $100 billion below Obama's 2011 budget proposal -- are likely to bristle at the president's 2012 request.
"They may have to sustain a lot of their growth on what's left of their stimulus funds," said Rep. Rodney Frelinghuysen (R-N.J.), chairman of the House Energy and Water Development Appropriations Subcommittee. "We're in a very tight fiscal environment."
But the administration has been preparing its strategy for combatting Republican naysayers. For weeks, Obama and his advisers have been visiting sites around the country to tout federal investments in energy technology and their effect on jobs. The administration has also publicized early investments in various energy technologies to showcase the impact such investments have had on jobs -- and energy supplies.
For instance, earlier this month, DOE circulated a press release highlighting the agency's early investments in hydraulic fracturing technology, a method currently being used to tap vast domestic natural gas plays. The release touts DOE's $92 million research investment in the technology during the 1970s, saying that today it has led to "more U.S. jobs, increased energy security, and higher revenues for states and the federal government."
The release follows similar public statements made by Energy Secretary Steven Chu in recent weeks.
Administration officials could use the success of such early investments as an argument for sustaining significant funding levels for new energy technology research programs.
"I think the primary basis of battle is going to be over jobs," said Salo Zelermyer, a former DOE lawyer during the George W. Bush administration who now works for Bracewell and Giuliani. "The president is clearly going to make the argument that their investments in energy innovation ... are going to be the driving forces for new job creation for the new clean energy economy."
But the administration's pleas may fall on deaf ears in Congress.
"The counter by Republicans is going to be that ... we've got to get our financial house in order, get back to more realistic spending levels," Zelermyer said.
House GOP cuts
Indeed, Republican appropriators in the House appear anxious to take a hatchet to DOE research programs. Proposed spending cuts for the current fiscal year show that Republicans are considering an 18 percent cut from science programs at DOE compared with fiscal 2010 levels. Energy efficiency and renewable energy technology programs would see a 35 percent cut under the draft figures.
"If you just take the cuts that are in store for the energy and water, a lot of those cuts are going to affect the renewables," said Rep. Ed Pastor (D-Ariz.), ranking member on the House Energy and Water Appropriations Subcommittee. "I'm assuming that the secretary as well as the administration is concerned about the advances they've made in different programs -- especially ones on the hubs -- because they're going to see that that's where the ax is going to hit the road. And so I think they're concerned that that's where they're going to take out some of these cuts."
House Republicans also are likely to object to Obama's expected proposal to eliminate oil industry subsidies. In his State of the Union address, the president called for an end to the tax breaks as a way to offset spending for clean energy research. But the perennial proposal has generated controversy in recent weeks. Senate Democrats have suggested House Republicans turn to ending the tax incentives as they look for ways to cut spending in the current year's spending bill. Republicans have remained staunchly opposed to such an idea.
The administration and House Republicans may find some common ground on some issues. For instance, the White House is not likely to call for significant cuts in spending on coal-related research or nuclear research and development. The president also used his State of the Union address to call for a clean energy mandate that would require utilities to source a certain amount of their electricity from low-carbon sources. He specifically mentioned coal with carbon capture and storage and nuclear energy as potential energy sources during his address.
"I would be surprised if there were substantial cuts to clean coal technology efforts or nuclear efforts," Zelermyer said.
Senate differences
The administration's proposals may fare better in the Senate, which is controlled by Democrats, albeit by a slim majority.
Sen. Lamar Alexander (R-Tenn.), ranking member of the Senate's Energy and Water Development Appropriations panel, said he especially wants to see research spending for renewables, clean coal and nuclear energy. But divvying up a limited amount of funds will be a challenge, he said.
"We're just going to have to set priorities. It's going to be hard, but ... our government this year is spending $3.7 trillion and collecting $2.2 trillion, and when you're faced with that, you're going to have to face some reductions in spending," Alexander said. "We'll have to talk among the senators and hold hearings, see what makes sense, and we've got less money to spend, and so we'll have to spend it in the right places."
"I think our goal as a nation right now should be to increase funding for research for low-cost clean energy, and that's my overriding goal," he said.
The administration will have its first opportunity to defend the DOE spending proposals later this week before the Senate Energy and Natural Resources Committee. Chu is slated to testify before the committee Wednesday.
Schedule: The hearing is Wednesday, Feb. 16, at 9:30 a.m. in 366 Dirksen.
Witness: Energy Secretary Steven Chu.