Senate Democrats Propose Across-the-Board Cuts in Energy Innovation Budgets

In the latest in DC's battle over the federal budget, the Senate Democrats released on Friday their plan to fund the government through FY2011, which would make substantial cuts in federal energy innovation across DOE agencies.

While ultimately keeping energy innovation-related spending at a higher level than would the House's Continuing Resolution (CR) (passed two weeks ago), the Senate's plan decreases budgets for each of the DOE's offices involved in energy-innovation as compared to FY2010 appropriations, in sharp contrast to the proposed increases for energy innovation related spending through President Obama's proposed FY2012 budget.

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*ARPA-E received $400 million in ARRA funding, to be spent over FY2009 and FY2010, or $200 million per year on average. No additional funding was provided for the agency in regular FY2010 appropriations.
**The estimates for Fossil Energy R&D used in this post refer solely to the Fossil Energy R&D program, rather than Fossil Energy Program as a whole, as Fossil Energy R&D is where energy innovation investments are concentrated.
***For exact figures, see chart at the end of this post.

Overall, the plan would cut over $800 million from the overall budgets of key DOE agencies engaged in energy innovation, relative to FY2010 levels (see Graphic 1/Table 1). Below, we estimate the impact on direct energy innovation investments that would result from these cuts. (Graphic 2/Table 2). We find that the overall budget cuts would strip at least $332 million in energy-innovation specific investments from these DOE agencies relative to FY2010 levels.

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*Calculations for share of FY11 House and Senate CR budgets devoted to energy innovation for the Fossil Energy R&D program are estimates based off of proportion of 2010 Fossil Energy R&D budget devoted to energy innovation projects. However, calculations for share of the FY12 Obama Administration's proposed budget for Fossil Energy R&D differed, as the Administration stated throughout the proposed budget its goal of phasing out inefficient fossil fuel subsidies, and proportions of total budget devoted to energy innovation are expected to change accordingly. For an explanation of the calculation used to estimate that number, see this post.
**See here for details on methodology used to estimate energy-innovation proportions of office budgets.
***For exact figures, see chart at the end of this post.

The largest of these cuts would come from the Office of Energy Efficiency and Renewable Energy, which is engaged in the research, development, demonstration and deployment of renewable energy and energy efficiency technologies, and whose energy innovation budget would be decreased by approximately $152 million. The Office of Science (OS), too, would see an energy innovation budgetary decrease of $55 million from FY2010, and the Office of Nuclear Energy's energy innovation investments would decrease by $81 million.

This plan is merely a starting point as the House and Senate gear up for negotiations with the White House over how to fund the government for the rest of the fiscal year. However, this presents a worrisome development for energy innovation investments, as the opening positions of both chambers of Congress now embrace across-the-board cuts in energy innovation investments. Senate Democrats appear poised to abandon the Obama Administration's efforts to preserve or enhance critical national investments in energy innovation, and as the House and Senate close the gap between their two proposals, more cuts may be forthcoming.

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(click to enlarge)
*ARPA-E received $400 million in ARRA funding, to be spent over FY2009 and FY2010, or $200 million per year on average. No additional funding was provided for the agency in regular FY2010 appropriations.

(click to enlarge)
*Calculations for share of FY11 House and Senate CR budgets devoted to energy innovation for the Fossil Energy R&D program are estimates based off of proportion of 2010 Fossil Energy R&D budget devoted to energy innovation projects. However, calculations for share of the FY12 Obama Administration's proposed budget for Fossil Energy R&D differed, as the Administration stated throughout the proposed budget its goal of phasing out inefficient fossil fuel subsidies, and proportions of total budget devoted to energy innovation are expected to change accordingly. For an explanation of the calculation used to estimate that number, see this post.
**See here for details on methodology used to estimate energy-innovation proportions of office budgets.