What Biden’s $6T budget plan means for energy

By E&E News staff | 06/01/2021 07:02 AM EDT

President Biden’s first full budget request positions his Department of Energy and related agencies at the heart of his aggressive effort to reach zero carbon emissions by 2050.

The Biden administration unveiled a $6 trillion spending plan Friday that would boost funding for clean energy technologies such as wind power and electric vehicles. The fiscal 2022 budget proposal is likely to be sidelined by Congress but still signals President Biden's policy priorities.

The Biden administration unveiled a $6 trillion spending plan Friday that would boost funding for clean energy technologies such as wind power and electric vehicles. The fiscal 2022 budget proposal is likely to be sidelined by Congress but still signals President Biden's policy priorities. Georgia Power Co. (Plant Vogtle); Sam Forson/Pexels (turbines); PublicDomainPictures.net (coal); PxHere (EV car)

President Biden’s first full budget request positions his Department of Energy and related agencies at the heart of his aggressive effort to reach zero carbon emissions by 2050.

The $6 trillion fiscal 2022 budget request is a massive spending package and met with heated opposition from Republicans who balked at the price tag. But environmentalists and some Democrats hailed the emphasis on tackling climate change and accelerating the transition to green energy.

"It’s an extraordinarily ambitious set of investments in a wide range of clean energy and climate priorities," Paul Bledsoe, an adviser at the Progressive Policy Institute, said of the spending plan, which would increase DOE’s budget to $46.1 billion, compared with the current level of $41.8 billion. "It’s the first budget that matches the true determination to decarbonize the U.S. economy by midcentury."


Senate Minority Leader Mitch McConnell (R-Ky.) said the budget dollars "would just disappear into a million mediocre socialist daydreams, from electric car subsidies to work-discouraging welfare programs."

Bledsoe, a former Senate Finance Committee staffer, noted that the budget proposal was unveiled as Democrats on the committee last week advanced dozens of tax breaks aimed at boosting clean energy.

"All of that needs to be worked out, but it would seem Democrats are very unified in their determination to pass most of the clean energy tax incentives and the agenda that Biden has proposed," Bledsoe said, suggesting Democrats are likely to work with Republicans to pass some of Biden’s infrastructure plan and look to enact additional clean energy provisions on their own. "That’s the most likely step toward getting the majority of the president’s agenda into law."

Part of the responsibility for selling the budget proposal will fall to Energy Secretary Jennifer Granholm, one of the Cabinet members charged with also pitching Biden’s $2.3 trillion infrastructure plan.

"These investments will ensure the U.S. is the global leader in research, development, and deployment of critical energy technologies to combat the climate crisis, create good-paying union jobs, and strengthen our communities in all pockets of America," Granholm said of the budget in a statement.

A presidential budget request is generally sidelined as Congress writes its own spending plan, but Biden’s first full budget proposal serves as a clear guidepost of the administration’s priorities and signals a stark shift from the previous administration.

The Trump administration routinely sought to wipe out various energy programs, including DOE’s Advanced Research Projects Agency-Energy and the agency’s loan program.

The Biden administration, by contrast, is calling for more money for ARPA-E and the creation of a similar agency that would focus on climate research. It also wants to boost funding for the loan program and use it to support electric vehicle charging and renewables.

Congressional Democrats last week questioned the department’s commitment to research programs, but DOE said the budget proposal calls for historic funding levels for energy and climate research at its 17 national labs.

The request includes $7.4 billion for the Office of Science — a $400 million increase that Democrats already said is insufficient — and includes a nearly 10% increase in funding for climate- and clean energy-focused research.

The proposal also calls for funding DOE’s role in a task force focused on coal and power plant communities as well as planning for a national climate laboratory or center to be affiliated with a historically Black college or university.

Under the plan, the Office of Energy Efficiency and Renewable Energy — a frequent target of fiscal conservatives — would receive $4.7 billion, about a 65% increase from current enacted levels.

Within that, geothermal technologies would see one of the largest increases, to $132 million. Wind and solar power also would get research funding boosts. A program that DOE says would create jobs decarbonizing federal buildings would get $400 million.

Funding for the Federal Energy Management Program, which the Biden administration said would help federal agencies reach their 2035 and 2050 carbon reduction goals, would increase almost tenfold to $385 million.

Granholm last week told members of the House Science, Space and Technology Committee that she’s a "big believer" in geothermal energy, which she called an underused resource. She noted that a 2019 department report found that geothermal resources — if used to their full capacity — could provide up to 8.5% of all power generation in the United States by 2050.

Pipeline, cyber concerns

Following a wave of high-profile cybersecurity incidents, Biden’s budget proposal seeks to spend $9.8 billion in civilian cybersecurity funding to beef up federal defenses and add to the nation’s critical infrastructure protection.

One of the most significant cyber investments was a proposal for $750 million for the federal government to respond to "lessons learned" from the breach of major software provider SolarWinds Inc. That cyberespionage campaign affected several agencies, including DOE.

The proposal would also provide $15 million to support the Office of the National Cyber Director, which was created last year through the National Defense Authorization Act.

The request is in line with Biden’s initial budget plan (E&E News PM, April 9).

The Cybersecurity and Infrastructure Security Agency, the nation’s top civilian cybersecurity authority, would see a $110 million increase from fiscal 2021, building on a $60 million boost provided through Biden’s COVID-19 relief bill. Similarly, $500 million would be set aside for the Technology Modernization Fund, adding to the American Rescue Plan, which allocated $1 billion for the IT modernization effort managed by the General Services Administration. The Department of Homeland Security would also see $20 million for a cyber response and recovery fund to improve "national critical infrastructure cybersecurity response."

However, some lawmakers warned that Biden’s proposal may not be enough to protect against rising cyberthreats.

Senate Homeland Security Subcommittee on Emerging Threats and Spending Oversight Chairwoman Maggie Hassan (D-N.H.) said she is "concerned that a flat DHS budget will not provide enough resources to address growing cybersecurity" and other threats, in a letter Friday to the Office of Management and Budget.

Jim Cunningham, executive director of grid advocacy group Protect Our Power, said that while Biden’s proposed budget would help protect federal networks, it doesn’t go far enough to protect the grid.

Cunningham said the proposal "does not appear to provide funds or needed incentives to spur the significant investments required to make our existing grid more resilient to cyber attacks."

DOE’s budget request also calls for moving the Strategic Petroleum Reserve (SPR) from the Office of Fossil Energy to the Office of Cybersecurity, Energy Security and Emergency Response.

"While the SPR was not called upon [in May], incidents like the Colonial Pipeline disruption showcase how reserve supplies of oil and refined products must be considered part of the emergency management toolset," DOE said, referring to a ransomware cyberattack last month that forced Colonial to shut down one of the biggest U.S. fuel pipelines for nearly a week (Energywire, May 10).

The budget request also includes a request for a nearly 8% increase in funding for the Pipeline and Hazardous Materials Safety Administration (PHMSA), to $310 million.

PHMSA regulates 2.8 million miles of pipelines in the country, which it says transport 65% of the energy consumed in the United States.

The budget proposal calls for it to add 21 positions, a 3.5% increase in its workforce.

The agency has already been adding new jobs in preparation for pursuing its newly added mission — clamping down on methane leaks.

Acting Administrator Tristan Brown said recently that the agency plans to hire its first senior National Environmental Policy Act adviser and its first environmental economist. The agency also plans to double the number of regulatory attorneys on staff and increase its inspection staff by 20% in "the next few years."

Carbon capture and removal

The administration has already proposed adding the words "Carbon Management" to DOE’s Office of Fossil Energy because carbon capture and storage (CCS) will be a key part of its focus. Biden’s budget request would dedicate $890 million to the office — an 18.7% increase from 2021’s $750 million.

Programs with increased funding from 2021 include CCS as well as "natural gas technologies."

The proposed budget increases for carbon capture and removal reflect the administration’s priority to orient the office around its climate goals, said Erin Burns, executive director of climate-focused Carbon180.

She said the budget has a dedicated line for carbon dioxide removal, or CDR, for the first time, listing $63 million for the technology. CDR refers to activities that pull CO2 from the atmosphere, which can then be stored underground or used in products.

"The budget refocuses from traditional fossil-centric activities to climate-centric activities," Burns said.

DOE’s "Budget in Brief" document said the "reallocations will enable near-term work to develop and deploy carbon solutions for the power and industrial sectors."

"Immediate action will be taken to locate and mitigate methane leaks, one of the most potent greenhouse gases — coupled with longer term [research and development] to expedite the hydrogen (H2) energy economy," it also said, adding that the investments will be "critical" to meeting Biden’s goal of zeroing out electric-sector CO2 emissions by 2035.

There are also proposed budget cuts in areas that don’t support a path to net-zero emissions by 2050, such as transformational coal pilots, said Ryan Fitzpatrick, director of the climate and energy program at the think tank Third Way.

"We’re not just seeing an increase in carbon capture; we’re seeing a reduction in some of the other areas that are not going to get the country on that path to net-zero emissions," he said.

Nuclear waste

Whereas many of the programs aimed at zero-carbon initiatives saw significant boosts in the Biden administration’s budget request, DOE’s nuclear waste disposal activities received little attention in comparison. The proposal does not detail how the administration plans to address the nation’s decadeslong nuclear waste disposal logjam, which has left more than 80,000 metric tons of spent nuclear fuel spread across the country.

The federal government has failed to find a workable alternative to the controversial Yucca Mountain disposal site in Nevada after the Obama administration formally canceled the project in 2010. Congress provided no new funding for those alternatives until last year.

Biden’s budget request would devote only $7.5 million to disposal activities, down $20 million from the initial jump-start money provided by Congress in 2020 to begin activities to site an interim storage facility to consolidate waste away from reactor sites.

The "Budget in Brief" document describes the money as an effort "to fund the department’s responsibilities for managing the [Nuclear Waste Fund] itself, administering the standard contract, and maintaining the security of the Yucca Mountain site."

Granholm said her interest lies in resurrecting the recommendations made by a blue-ribbon panel in 2013 that called for consent-based siting of an interim storage facility.

Similarly, DOE opted to provide no new funding for the proposed national uranium reserve, first pitched under the Trump administration to bolster the sagging domestic production industry.

The request does, however, call for the carrying over of $75 million provided by Congress for the program in this fiscal year rather than outright elimination. That money could still go to the formation of the reserve in the next fiscal year, although DOE’s plans for the program are muddled.

Granholm said during recent appearances on Capitol Hill that she would follow through with congressional intentions to construct the uranium reserve, but environmentalists have long been critical of the plan, which they see as promoting excess pollution from mining operations.

Wind, oil at Interior

The budget proposal for the Interior Department would drive millions of dollars toward advancing wind power. It’s also concerned with expanding the capacity of its agencies to juggle the growing renewable sector just as it has historically invested time and workers in fossil fuel programs.

Rachael Taylor, Interior’s principal deputy assistant secretary of policy, management and budget, told reporters Friday that the "through line" of the agency’s budget request is climate action.

"We are taking an all-of-government approach to the climate crisis," Interior Secretary Deb Haaland said on the call. "The budget absolutely reflects that."

What that means in hard numbers for the department — the 70,000-employee agency that oversees public lands and the country’s mineral estate — is more attention to wind and conservation programs.

The budget proposal calls for $11 million to boost the Bureau of Land Management’s resource management program for siting of wind projects on public lands. It also includes a request for a 60% increase in funding for the renewable energy office at the Bureau of Ocean Energy Management — the primary federal decisionmaker on the country’s offshore wind industry.

That BOEM funding bump would include $4 million to increase workforce capacity for renewables work at the bureau and a $7 million increase toward stakeholder engagements, according to the sub-agency’s "Budget in Brief." Offshore wind has attracted tremendous state policy and private investment interest but has come into conflict with other ocean users like fishermen and faced opposition from coastal beach communities.

The wind dollars wouldn’t stop at BLM and BOEM: The White House budget proposal would also boost renewable energy funding at the Bureau of Safety and Environmental Enforcement, funneling an increase of $9 million toward creating an offshore renewables safety and management program, said Laura Daniel-Davis, principal deputy assistant secretary for land and minerals management at Interior.

It’s the White House’s intention to help create a "formidable renewable energy industry" for public lands, she said.

The budget also highlighted traditional energy sources like oil and gas. The White House request includes $529 million for onshore and offshore oil and gas programs. The Biden administration is proposing cuts in some areas, like a $3.5 million reduction to a BLM program aimed at improving oil and gas permit processing. That was a focus of the Trump administration as it tried to speed up federal approvals for energy projects.

Meanwhile, on enforcement and regulation, the budget proposal requested an extra $18 million for Alaska legacy oil and gas well cleanup — more than Congress appropriated last year. That increase is partly to deal with a legacy well that the U.S. Geological Survey has been using to keep tabs on permafrost temperature in the Arctic but that is now at risk of leaching its diesel and oil-based drilling cuttings at the surface due to the rapid erosion of the Arctic coastline.

The White House is also seeking $30 million to address remediation and reclamation for offshore oil and gas infrastructure and more than $461.3 million to clean up oil and gas wells and abandoned mines, which the administration promises to be a job-creation investment.

Still, one priority area the budget didn’t directly illuminate is the future of Interior’s oil and gas leasing program, which is still under White House review.

Biden ordered that review in a climate-focused executive order shortly after taking office, driving a wedge between the administration and political allies of the oil industry.

BOEM’s "Budget in Brief" notes that "decisions on how to proceed with developing the next National [Outer Continental Shelf] Program will be made in the context of the comprehensive review," referring to its five-year plan for hosting oil and gas lease sales.

Haaland told reporters Friday that an interim report on the program review would be out this summer but declined to offer details.

"We need to make sure the department has a balanced approach to managing our public lands," she said. "We want to ensure that energy programs are run in a fair and transparent manner."

But that doesn’t mean oil and gas are out of the picture, another official added.

"The oil and gas program at the Department of Interior will continue to be an essential part of the work of the agency," Daniel-Davis said.

Reporters Lesley Clark, Carlos Anchondo, Jeremy Dillon, Christa Marshall, Heather Richards, Mike Soraghan and Christian Vasquez contributed.