Bush Allocates $1 Billion to Renewable Energy

The 2008 budget request includes $179 million for the Biofuels Initiative (an increase of $29 million or 19 percent from 2007), which is designed to help the U.S. reduce gasoline consumption by 20 percent in ten years and make cellulosic ethanol cost-competitive by 2012 through research and development of biomass made from switch grass, wood chips and corn stalks.

The budget also calls for expansion in key energy programs that focus on developing clean and renewable energy including vehicle efficiency technology, $176 million; the Solar America Initiative, $148 million; hydrogen technology, $213 million (includes fuel cell development); and wind projects, $40 million.

"We applaud the Administration for continuing to support the President's Solar America Initiative (SAI) at robust funding levels. The Administration's FY 2008 budget request calls for $137 million in funding for the SAI, a major new R&D effort to achieve cost-competitive solar energy technologies across all market sectors by 2015," said Rhone Resch, president of the Solar Energy Industries Association (SEIA).

"At the same time, the administration's request funds solar water heating research at just $2 million and concentrating solar power at just $9 million. It is important that Congress recognize the vital contributions that these technologies can make to our energy security, by providing funding for concentrating solar power and solar heating / lighting programs at $25 million and $15 million, respectively. Moreover, the budget does not include a long-term extension of the Federal solar investment tax credits, which is the single most important policy affecting solar development. We urge Congress to enact an eight-year extension of the Federal solar investment tax credits as contained in H.R. 550., the Securing America's Energy Independence Act of 2007," continued Resch.

In addition, President Bush's FY 2008 budget requests $8.4 million to operate an Office of Loan Guarantees and the ability to expand the DOE's loan volume limitation to $9 billion. Congress has already approved $4 billion for the loan program, which is designed to provide loans to companies developing alternative energy sources

"This is an extremely important and positive move by the administration to drive the portfolio of clean energy technologies into the marketplace. And if leveraged with State programs including System Benefit Trust Funds, Clean Air Act Implementation Funds (SIPs), and State Renewable Energy Portfolio Standards, will further scale-up and accelerate renewable energy markets," said Scott Sklar, The Stella Group, Ltd., Washington, DC.

"[SEIA supports] the budget request to fund the Title XVII loan guarantee program with up to $9 billion in funding, which has the potential to fund large-scale innovative solar power projects," said Resch.

The DOE 2008 budget request also includes $2.7 billion, a 26 percent increase above the FY 2007 request of $2.1 billion, and 53 percent above FY 2006, to advance President Bush's Advanced Energy Initiative, which he unveiled in his 2006 State of the Union Address. The initiative seeks to reduce U.S. dependence on foreign sources of energy and transform the national energy economy by promoting the development of cleaner sources of electricity production and to accelerate the deployment of renewable energy technologies, such as biomass, hydrogen, and solar energy; clean coal technologies through FutureGen; and nuclear energy technologies, through the Global Nuclear Energy Partnership.

Although the AEI does not classify nuclear power as a renewable resource, in a letter sent to the White House last month, more than 100 environmental leaders, business owners and energy policy organizations refuted President Bush's oft-stated claim that "nuclear power is a renewable source of energy."

"Please be advised that nuclear power is neither a renewable nor a clean source of energy. For that matter, oil, coal, and natural gas are also not renewable or clean sources of energy. Nuclear power and fossil fuels are environmentally polluting and non-renewable sources of energy that produce long-term radioactive wastes and/or greenhouse gas emissions. The primary renewable sources of energy are biomass (e.g., biofuels, biopower), geothermal, solar, water (e.g., hydropower, tidal, wave, ocean currents) and wind," stated the letter.

The groups object to the President's efforts to revive the nuclear industry by defining it as "renewable" so that it might be included in a future federal Renewable Energy Portfolio Standard or supported by federal tax incentives or research and development programs specifically designed to promote renewable energy technologies.

Along with the DOE, a portion of the U.S. Department of Agriculture FY2008 budget will be allocated to renewable energy projects across the country. This budget includes $397 million for energy projects, an increase of $161 million over 2007. Of this increase, $132 million is for Rural Development renewable energy investments through guaranteed loans and grants, and other efforts.

The remaining increase of $29 million supports research and development activities to enhance bioenergy feedstocks and improve conversion technologies for cellulosic ethanol. It does not, however, include the $1.6 billion request for new funding cited in the Administration's 2007 Farm Bill Proposals.

"The President's agriculture budget provides important resources that are necessary to promote economic opportunities and to preserve our commitment to our farmers, ranchers, rural citizens, and families in need," said Agriculture Secretary Mike Johanns. "This budget aims to enhance our country's vibrant [agriculture] economy, advance renewable energy, protect America's food supply, improve nutrition and health and conserve our natural resources."

The budget request submitted Monday by the White House to Congress is the first step in the annual appropriations process. Over the next several months, the House of Representatives and the Senate will proceed with the actual work of writing the federal budget. But the White House numbers serve as recommendations to Congress that could set the parameters of the budget debate.