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Can Obama's Bold Stroke on Cleantech Innovation Survive Budget Cuts?

Innovators fear that the generous allotments targeted for renewables and efficiency in the DOE budget — the largest ever — could be in jeopardy

Mar 2, 2011

WASHINGTON—Clean technology innovators looking to sharpen this country's competitive elbows have every reason to be buoyed by the relatively bold numbers President Obama is floating in his 2012 Department of Energy budget.

Understandably, though, they fear that such generous allotments targeted for energy efficiency and solar, wind and other renewables could be in jeopardy.

Austerity, after all, is evolving into Capitol Hill's newest buzzword as House Republicans are wielding a buzz saw mentality toward a multitude of environment and energy programs designed to carry the federal government through September, when the 2011 fiscal year ends.

Despite this cleaver-heavy climate, however, Scott Sklar refuses to be a pessimist. He heads up the Stella Group, an energy marketing and policy firm in the nation's capital.

The newly minted 112th Congress, he noted, is still finding its footing. 

"Right now, what Congress is going through is, 'My opponent liked it so it's got to be bad,'" Sklar told SolveClimate News in an interview. "Every administration goes through this. Remember, when you get beyond all the rhetoric and the dialogue goes on, you will see some of that softened. So many of these are bipartisan programs."

Sklar was one of three panelists participating in a Capitol Hill briefing Tuesday focused on the 2012 DOE budget for energy efficiency and renewable energy. The nonprofit Environmental and Energy Study Institute organized the gathering.

Fred Sissine, an energy policy specialist with the Congressional Research Service, and Henry Kelly, acting assistant secretary with DOE's Office of Energy Efficiency and Renewable Energy (EERE), joined Sklar at the gathering.

Rosier Picture...

Overall DOE Energy Budget, 2012Briefly, the White House 2012 budget request for EERE programs is the largest ever. It rings in at a total of $3.2 billion, which is bordering on 11 percent of the total DOE budget. That's significant because it's a jump of $983 million — or 44 percent — above 2010 appropriations.

Those numbers first presented Feb. 14 are a reflection of what Obama laid out in his Jan. 25 State of the Union address as "our generation's Sputnik moment. We'll invest in ... clean energy technology — an investment that will strengthen our security, protect our planet and create countless new jobs for our people."

One concrete goal the president committed to during that speech is doubling the share of clean electricity — from 40 percent to 80 percent — by 2035.

Kelly emphasized that the 2012 budget is geared to meet three goals — national security by advancing domestic energy resources; environment by corralling greenhouse gas emissions; and economy by promoting clean energy jobs and business opportunities.

"The challenge we've got here is an enormous one," Kelly said.

Growth in EERE is especially prominent when compared to other DOE offices. For instance, funding for electricity delivery and energy reliability programs is set to rise $69 million — 41 percent over 2010 appropriations — but this part of DOE is much smaller, with total funding of just under $238 million.

Plus, nuclear energy and fossil energy programs are scheduled to be hit with reductions. Nuclear faces a decrease of $5.4 million, which is 0.6 percent below 2010 appropriations. Meanwhile, fossil will be lopped by $417 million, 44 percent below 2010 appropriations. Most of the savings for the latter will come from by slicing fossil energy research and development, as well as the Strategic Petroleum Reserve.

Contrasts With Grimmer 2011 Outlook

The reason that budget figures for 2011 are so strange and complicated is because Congress punted on its fiscal responsibilities last year.

House and Senate leaders — both then had Democratic majorities — failed to pass the 2011 White House budget during Decembers gridlock. Instead, they opted to approve a temporary spending bill that operates the government at fiscal 2010 levels through early March.

In theory, legislators have until Friday to craft another continuing resolution to set funding through Sept. 30, the end of the fiscal year. If House and Senate leaders can't compromise on a solution that funds government for the remainder of the fiscal year, the repercussions are that the government will repeat a less-than-desirable scenario from 1995 and 1996 and shut down.

However, with time ticking away toward that deadline this week, legislators spent Tuesday and Wednesday cranking out and approving an emergency-spending bill to fund the government through March 18. The temporary spending measure includes $4 billion in cuts and gives both chambers two weeks to cobble together some sort of compromise scramble to keep the government operating through the six-plus months remaining in this fiscal year.

With Democrats in power in the Senate and White House, it's unlikely that all $61 billion that House Republicans initially proposed shearing away from the 2011 budget will fly. Even though most legislators agree that spending needs to be reined in, Democrats and Republicans differ on which programs should go under the knife.

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