8. DOE:

Chu girds for Hill budget battles

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Energy Secretary Steven Chu is optimistic Congress will enact the budget requests his agency sent to Capitol Hill this morning despite a tough political climate and a body of lawmakers determined to rein in spending.

The Energy Department is requesting $29.5 billion for fiscal 2012, which would boost spending 12 percent over 2010 levels and 4 percent over expected levels for the current fiscal year. The spending boosts come as the president's overall budget request remains relatively flat compared with current spending.

"The fact that the Department of Energy has gotten a budget increase reflects the deep commitment the president feels the part energy will play in winning the future," Chu told reporters this afternoon during a briefing at DOE, "in actually creating jobs tomorrow and the following years and making sure the United States is going to be competitive as we go forward and how important the energy sector is to that competition."

Many of the agency's proposed spending increases would benefit programs that research low-carbon energy technologies, like solar, nuclear and energy efficiency, while fossil energy programs would take a cut (Greenwire, Feb. 14).

"This is a budget where the president has made some very tough choices," Chu said.

For example, energy efficiency and renewable energy programs would see a 44 percent increase over fiscal 2010 levels, while fossil energy programs would be cut 45 percent. In addition, the White House is repeating its request to eliminate tax incentives for the oil and gas industry, a move it says would save billions of dollars a year.

Republican lawmakers are not likely to embrace the increased spending on renewables at the expense of traditional energy sources.

"We'll take it a day at a time," Chu said of the proposal's chances of progressing on Capitol Hill.

Some Republican lawmakers are already railing against the proposals.

"I am particularly disappointed to see the White House continuing its efforts to manipulate free enterprise -- whether on energy or health care or technology, this budget continues to advance policies in which the federal government picks winners and losers, rather than letting the American people and the power of competition identify the most efficient, effective investment of resources," House Energy and Commerce Chairman Fred Upton (R-Mich.) said in a statement.

Rep. Hal Rogers (R-Ky.), chairman of the House Appropriations Committee, said the request is "long on rhetoric and lean on spending cuts."

But Democrats are generally praising the proposal -- especially the request to end the oil industry tax breaks.

"This Valentine's Day budget ends the decades of sweetheart deals given to the biggest oil companies and puts our nation on a long-term path towards financial stability," Rep. Ed Markey (D-Mass.), ranking member of the House Natural Resources Committee, said in a statement.

On the slim chance such a proposal finds legislative footing in Congress, the oil industry is not likely to accept it without a fight.

"Besides eliminating thousands of new potential jobs, the increases, over the long term, would actually lower revenue to the government by many billions of dollars as a result of foregone revenues from projects the tax hikes would prevent going forward," said American Petroleum Institute President and CEO Jack Gerard in a statement. "The irony is that the administration wants to increase taxes on the U.S. oil and natural gas industry so the government can create green jobs, but the industry is already doing that more efficiently and with less burden on American taxpayers through its own green investments."