ENERGY POLICY:

Senate committee bucks White House on hubs, defense cleanup, hydrogen spending

The Senate Appropriations Committee sent a $27.4 billion spending bill to the floor yesterday that seriously cripples the Obama administration's push for new energy innovation "hubs" but restores funding for hydrogen and Cold War legacy cleanup.

The fiscal 2010 spending bill, which also funds the Army Corps of Engineers and Bureau of Reclamation, passed by voice vote with no amendments to the funding for the Energy Department.

The bill is $500 million more than current spending levels and $1.1 billion below the White House 2010 budget request as scored by the Congressional Budget Office, whose calculations include a $1.5 billion subsidy appropriation to cover DOE's loan guarantee authority. The panel cut the $1.5 billion "scorekeeping" funds from their top line figure, making the bill's budget about $500 million more than the White House request.

Earlier this week, the House Appropriations Committee provided $26.9 billion for the energy and nuclear security programs (E&E Daily, July 8). That bill is expected on the House floor next week.

The Senate plan significantly scales back DOE's proposal to create eight multidisciplinary "energy innovation hubs" that span several energy technologies, blocking several of them outright. The House plan also slows DOE's effort to launch the "hubs" program.

Energy Secretary Steven Chu, when rolling out DOE's proposed budget in May, called the proposed hubs a major part of his effort to improve and better integrate agency research and development and science programs (E&ENews PM, May 7).

The Senate also ignored the administration's call to end funding for hydrogen vehicles research and transform the overall hydrogen program unto a broader fuel cell technology program. The Senate plan would provide $190 million overall for research across various hydrogen technologies. The House plan also includes $40 million in hydrogen transportation funding in the Vehicle Technologies program.

The committee provided $5.8 billion for defense environmental cleanup. In its report language, the committee critiqued the Obama administration for leaning on the stimulus to meet its 2010 compliance milestones, calling the White House request "deliberately underfunded."

"Next year, rather than parading out expensive new initiatives, the administration should consider meeting its basic legal, moral and human commitments to clean up nuclear research and Cold War sites," the report says.

Alternative energy, science

The Senate plan steers $2.23 billion into renewable energy and efficiency programs, compared to $1.93 billion in fiscal 2009. However, that is less than the $2.32 billion in the White House spending request.

The bill provides $235 million for biomass and biorefinery systems research, matching the White House request. Of this amount, it notes that at least $35 million must support a comprehensive research, development and deployment strategy on algae biofuels.

"This non-food source biofuel offers one of the best opportunities to develop large-scale production on non-arable land using non-potable water," the report language states. It also says DOE should pay special attention to algal biofuels that have potential to beneficially reuse industrial carbon dioxide.

The committee requires that $7.5 million is provided for coordinating with the vehicle technologies program to expand and speed up testing of intermediate ethanol blends in the 15-20 percent range. The ethanol industry is pressing U.S. EPA to approve higher level blends than the current 10 percent limit that applies to most engines.

Other funding levels include $85 million for wind energy research and development; $255 million for solar R&D; $50 million for geothermal R&D; $60 million for water power R&D; $323 million for vehicle technologies R&D; $202 million for building technologies; and $100 million for industrial technologies.

The committee provided $29 million less than the administration requested for the Electricity Delivery and Energy Reliability Office, allotting $179.5 million. Most of the decrease stems from the decision to cut funding for the Grid Materials, Devices and Systems Hub. The report emphasizes that grid cybersecurity funding should be prioritized and DOE should establish a private sector organization to identify vulnerabilities and develop research and development strategies for grid digital technology.

The recent stimulus law also provided $16.8 billion in renewable, efficiency and electricity infrastructure funding to and through DOE.

The committee slightly trimmed spending for the Office of Science from the White House request but boosted it above current funding. The bulk of the $4.9 billion recommendation is directed toward basic energy science research projects.

Nuclear

While the bill matched the White House budget request for nuclear energy at $761 million -- a $31 million decrease from this year's spending levels -- it shifted some of the funding priorities.

The committee funds the Nuclear Power 2010 program at $120 million, an increase of $100 million from the president's request. The additional funds will help support U.S. reactor designs for licensing and deployment domestically and abroad, according to the report.

Funding for the Generation IV nuclear energy program would decrease from the president's request to $143 million, as the report says the request "lacks focus and mission."

To correct the situation, the committee reinstates the decision to focus on two advanced reactor technologies that "offer the best opportunity to realize commercial deployment, a high level of safety and efficiency and exhibit the best waste management characteristics," rather than exploring six different technologies as laid out in the White House request, the report says.

The committee maintained funding levels for the fuel reprocessing and recycling research and development program at $145 million, even with this year's levels but $47 million below the president's request. The program "lacks specificity, yet the mission is critical to addressing our current and future spend fuel needs, especially in light of the administration's decision to abandon Yucca Mountain," the report says.

The nuclear budget included the establishment of one of the few hubs supported by the committee, the Energy Innovation Hub for Modeling and Simulation. But it did not fund a innovation hub in "extreme materials" because the administration terminated a facility with similar functions, known as LANSCE, at the Los Alamos National Laboratory, according to the report.

Fossil energy

The bill would provide about $700 million for fossil energy programs, with about one-fourth of that total going toward carbon sequestration projects.

However, no money is directed toward the Clean Coal Power Initiative, FutureGen or Chu's proposed sequestration hub. The committee said the Clean Coal Power Initiative and FutureGen were substantially funded in the stimulus plan earlier this year.

"We wanted to be careful not to be duplicative with money already moving forward in the stimulus," Energy and Water Development Appropriations Subcommittee ranking member Bob Bennett (R-Utah) said at the markup.

The $160 million directed toward carbon sequestration activities is $20 million less than the White House request, but the stimulus provided an additional $3.4 billion for sequestration projects earlier this year.

The committee followed the president's request to cut funding to the oil technologies program, which has been criticized on grounds that the private-sector oil industry should pay for technology developments that provide little public benefit. In its place, appropriators recommended $25 million to establish an unconventional fossil energy technologies program that would demonstrate technology applications for the vast domestic on-shore unconventional oil, natural gas and coal resources.

The committee boosted funding for the Strategic Petroleum Reserve from both the president's request and current funding. The funds are slated for operation activities, for engineering an expansion site in Mississippi and for the purchase of a commercial storage cavern to replace one that is threatened by environmental risk in Louisiana. No other expansion activities are included in the budget recommendation.

Nuclear security

The Senate spending plan boosts funding for nuclear weapons activities above the White House request, current funding and the House recommendation. The $6.5 billion spending plan for the National Nuclear Security Administration's weapons activities would focus funds on science and experimental activities.

"If we are to achieve our nuclear security goals, we will have to provide funding not to erode their purchasing power," Subcommittee Chairman Byron Dorgan (D-N.D.) said. "The science and weapons labs are very important."

Funding for the nuclear nonproliferation program is identical to the president's request and a boost above current spending, primarily due to the transfer of the Mixed Oxide Fuel Fabrication Facility back to NNSA from DOE's Office of Nuclear Energy.

The placement of that program could cause headaches in conference because the House has recommended moving the program to the other defense activities account within NNSA instead of nuclear nonproliferation.

A spokesman for Senate Majority Leader Harry Reid (D-Nev.) said no decision has been made as to when the Senate will take up the bill on the floor.

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