6. COAL:
Proposed 'clean coal' budget cuts rattle industry, lawmakers
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Lawmakers and coal industry leaders are expressing concern about the Obama administration's proposed cuts to "clean coal" research and development.
The White House's fiscal 2013 spending plan would boost fossil energy research and development by 21 percent but cut the coal section by 25 percent, from $368.4 million to $275.9 million. Dollars for carbon capture and storage, a top coal research priority, would be cut from $184 million to $156 million.
"This budget proposal provides a blueprint as we move forward, though it certainly isn't perfect," Sen. Jay Rockefeller (D-W.Va.) said in a statement. "One area that I remain concerned about is proposed reductions in critical resources for fossil fuel research and development."
Janet Gellici, CEO of the American Coal Council, said proposed cuts "are never good news." She added, "It's frustrating, and we realize we are all doing belt tightening."
The Obama administration has reiterated its support for clean coal research. And its budget document said the spending proposals were an effort to stretch limited dollars.
"To foster the clean energy economy of the future and reduce the Nation's reliance on fossil fuels that contribute to climate change," the budget proposal says, "the budget proposes to focus limited Fossil Energy Research and Development resources on clean energy technology, namely carbon capture and storage."
Shannon Angielski, associate director of the Coal Utilization Research Council, does not think the cuts amount to a focus shift for the administration. "It didn't come as a surprise," she said in an interview. "What we look to is how Congress views this."
Angielski noted that the White House in the past proposed deeper cuts to coal research than lawmakers ultimately appropriated.
"I think the view of Congress is that there should be more funding provided to what is also considered a clean energy program," she said.
Rockefeller echoed that sentiment, "I will fight to continue investments in clean coal research, not cut them."
The National Mining Association said the budget proposal raises questions about the president's commitment to the all-of-the-above energy strategy he outlined in the State of the Union address. Other than the cuts to research, the spending plan would cut four coal tax "preferences."
"Coal subsidies are costly to the American taxpayer and do little to create incentives to boost production or reduce energy prices," the budget says.
However, the proposal will likely continue to face skepticism from coal industry supporters on Capitol Hill. In a recent interview, Rep. Nick Rahall (D-W.Va.) said, "Coal doesn't get any subsidies."
In an effort to differentiate tax incentives for companies in his home state from those for other energy interests, Rahall said, "My record has been vehemently opposed to subsidies to the oil industry and tax breaks and tax holidays and other give-aways."
Sen. Joe Manchin (D-W.Va.) said of the energy subsidies: "I'm open to cutting them when the prices are high and they don't need the subsidies. And there's a break even on all these commodities and all the resources we have. It's a reasonable approach to take."