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President's Budget Maintains "Green" Commitment but Has Several Unanticipated Surprises

On January 25, 2011, the President in his State of Union Address declared, "This is our generation's Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven't seen since the height of the Space Race. And in a few weeks, I will be sending a budget to Congress that helps us meet that goal. We'll invest in biomedical research, information technology, and especially clean energy technology -– (applause) -– an investment that will strengthen our security, protect our planet, and create countless new jobs for our people."

The FY’13 budget request for the U.S. Department of Energy Renewable Energy and Energy Efficiency RD&D programs is $2.267 billion from an appropriated FY’12 level of $1.809 billion. The big winners were Advanced Manufacturing (old Industries RD&D program), Buildings RD&D program, and the Transportation RD&D program. The Renewable Energy programs had modest gains with two stark recommended cuts: Hydrogen & Fuel Cell RD&D by over $23 million (-20%+) and Water Power RD&D by $38.7 million (-50%+). 

The Hydrogen and Fuel Cell RD&D program is one of Washington’s amusing RD&D ping pong games. The Clinton Administration enhanced the program, the Bush Administration sustained and retooled the program, and now the Obama Administration is giving it up for political fodder. Previous Administrations did the same “throw overboard” strategy using the Geothermal RD&D and Solar Buildings RD&D program. Cooler heads in Congress should just reject this perfunctory reflex action. 

The proposed cuts for the Water Power program is the sheer surprise. The RD&D program was wisely broadened through Congressional intervention to expand beyond traditional hydropower to include freeflow hydropower (no dams or diversions), tidal, wave, and ocean thermal and currents. Global investment in this young emerging industry topped $4 billion in 2011, and the US has a whole range of globally leading companies including  HydroCoil, HydroVolt, Ocean Power Technologies, Ocean Renewable Power, Verdant Power and many others.  The Administration’s public excuse was that hydropower is a mature technology, but the facts are that the lion’s share of the RD&D effort went towards the immature marine energy technologies. But just as with other renewables, the world is not sitting around, with Australia, Japan, Great Britain and Spain moving into world leadership of these 24/7 zero emission energy technologies. 

The Obama Administration closed out the Department of Energy Zero Energy Buildings program during FY’11, which was its hallmark applied R&D program to actually integrate technologies.

The renewable program approach was surprising, particularly after the solar building comments made in the SOTU. The President elaborated further:

Already, we’re seeing the promise of renewable energy.  Robert and Gary Allen are brothers who run a small Michigan roofing company.  After September 11th, they volunteered their best roofers to help repair the Pentagon.  But half of their factory went unused, and the recession hit them hard.  Today, with the help of a government loan, that empty space is being used to manufacture solar shingles that are being sold all across the country.  In Robert’s words, “We reinvented ourselves.…That’s what Americans have done for over 200 years: reinvented ourselves.  And to spur on more success stories like the Allen Brothers, we’ve begun to reinvent our energy policy. We’re not just handing out money.  We’re issuing a challenge.  We’re telling America’s scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we’ll fund the Apollo projects of our time.

Now the U.S. Department of Energy is not the only federal program driving clean energy. The U.S. Department of Agriculture, which has some of the most successful implementation programs in the federal portfolio, was also a disappointment. In its FY'13 budget request to Congress, the Administration requested only $4.6 million in new budget authority for the Rural Energy for America Program (REAP), and it did not request any new funds for the other bioenergy programs in the Farm Bill. Until now, the administration and the USDA have given strong priority to implementing Farm Bill energy programs.

The Environmental and Energy Study Institute reported:

First, the good news for bioenergy: the administration requested $270 million in new budget authority, an increase of $70 million (35%) over FY12 for the Department of Energy (DOE) Biomass Program. In addition, the administration is also proposing to continue funding the DOE Office of Science Bioenergy Research Centers at $75 million, the same level as previous years.

However, in the USDA FY 2013 Budget Summary and Annual Performance Plan, for energy title programs such as the Biorefinery Assistance Program, the Biomass Crop Assistance Program, the Biomass Research and Development Initiative, and the Bioenergy Program for Advanced Biofuels, the President’s budget says simply "subject to reauthorization." And for the widely popular, job-creating Renewable Energy for America Program, the administration requested only a small fraction of the amount funded in previous years. 

The U.S. Department of Defense is rumored to also have a strong energy efficiency and renewable energy focus primarily on facilities. Only one line in the budget addresses existing facilities, “DoD schools and facilities being restored and modernized." More detail may be released through the Congressional hearing and reporting process. The Republicans in the House passed a Defense spending bill in December 2011 which would prohibit FY 2012 DoD funds from being used to achieve a LEED Gold or Platinum certification, however these certifications could be obtained if they impose no additional cost to DoD. The bill would also require a cost-benefit analysis and return on investment for energy efficiency attributes and sustainable design achieved through DoD funds used to receive a Leadership in Energy and Environmental Design (LEED) Gold or Platinum certification.

So much for cutting energy and water bills at Defense installations that could be plowed back into the core Defense mission. The House Republican leadership is just trying to throw sand in the face of the Administration at the green sector’s expense.

But The Administration has it’s DOE programs on autopilot under the direction of Nobel prize winner Energy Secretary Chu. Several leaders in the clean energy industries see a sea change in DOE programs towards pure R&D, while applied RD&D programs are being dismantled and industry interface has been at an all time low. DOE programs seem to be coming “ivory towered” by well meaning scientists with only minor ongoing interaction with the breadth and depth of the clean energy industries.

I believe in and support the President’s sustained commitment to the cleantech industries, and I appreciate that he reiterated this commitment in the State of The Union and in his budget. I also believe that the Congressional Republican leadership are putting the country at risk by using the green programs as political fodder to gain political advantage. They forget that many of these programs were spearheaded by past Republican leaders too numerous to name here, but included Senators Curtis (NE), Percy (IL), Hatfield (OR), Javits (NY) as well as current senators Cochran (MS), Collins (ME), Grassley (IA) Lugar (IN), and representatives Bartlett (MD) and many, many others.

I am also concerned that the federal energy RD&D programs are becoming sterile and buffered away from the agile and organic interaction with industry and entrepreneurs that helped create it in the first place and are now innovating and leveraging these RD&D innnovations into their next stage of growth.

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