Obama’s Budget Boosts Support for Energy Innovation
President Obama released his long-awaited FY2014 budget request and while it’s unlikely the budget will be taken up by Congress in its entirety, it remains an important document. Namely, the proposal is significant because it steadfastly argues that America can continue to support next-generation industries like clean energy. In fact, the President’s proposal budgets for a number of high-profile, high-impact programs, including those aimed at growing the domestic clean energy manufacturing sector, reduce transportation fuel use, and calls on Congress to fund a new Energy Innovation Hub to transform the electricity grid.
Across the board, the FY2014 request boosts key energy innovation offices at DOE by about 15 percent compared to the FY2013 Continuing Resolution and seven percent higher than the President’s FY2013 request. The lion’s share of budget gains are aimed at the Office of Energy Efficiency and Renewable Energy (EERE), which would see a budget increase of 54 percent from FY2013 CR levels, and at the Advanced Research Projects Agency-Energy (ARPA-E), which would see a budget increase of 46 percent.
Expanding Research Capabilities in Advanced Energy Manufacturing
The largest budget increase target at EERE – 22 percent to be exact – is for the department’s Advanced Manufacturing Office, which invests in transformational research and development of integral clean energy manufacturing technologies and practices. This investment would support and complement EERE’s recently announced Clean Energy Manufacturing Initiative, which aims to aggressively increase the international competitiveness of emerging energy manufacturing. The program is designed to begin reversing a decade’s long decline in U.S. manufacturing – immediate goals include transferring new research, technologies, and industrial education and training to industry through a new research institute under the banner of the President’s National Network of Manufacturing Innovation as well as EERE’s Better Plants Challenge.
Continued Focus on Getting U.S. Transportation Off of Oil
The President’s request also emphasizes the administration’s goal of cutting oil imports in half by 2020. To this end, the budget increases funding for EERE’s Vehicle Technologies Program by 69 percent from FY2013 CR levels, and also specifies that the additional funding requested for ARPA-E would be directed, in part, at developing projects associated with new transportation technologies that will enable the U.S. transportation system to be less reliant on conventional fuels. The budget increase also accentuates the now one year old EV Everywhere Grand Challenge initiative, which coordinates cross-cutting research important to vehicle technology and batteries among DOE office stovepipes and sets performance and cost goalposts for research.
Expanding Basic Energy Science Capabilities
The President’s proposal also pegs the Office of Science for a sizable budget increase, largely to increase research capabilities within the Basic Energy Science Office (BES). The BES invests in fundamental research to understand and control matter and energy, such as studying next-generation materials that can store energy. The budget proposal looks to continue and expand the vital Energy Frontier Research Centers that are working to solve the most perplexing, but potential disruptive research problems in energy today. The increase would also go towards ongoing construction of upgraded Synchotron Light Source II and Advanced Photon Source facilities that will offer world-leading laboratory environments for scientists across numerous disciplines studying anything from crystallography and genetics to drug research and semiconductor analysis.
Budget Proposal Still Miles Away from Fully Funding Energy Innovation
ITIF’s recent report Breaking Down the Federal Clean Energy Budget show that the U.S. clean energy innovation ecosystem is not receiving the amount of support from the federal government it needs to develop, demonstrate, and manufacture clean energy technologies. While the President’s budget does offer significant increases to some programs and boosts R&D overall, it is still far below experts’ average estimates of necessary funding, which are closer to $15 to $20 billion per year.
Correspondingly, the proposal continues to skew the energy innovation budget towards the deployment of existing energy technologies through tax breaks and incentives. While government support for early deployment is important and has been critical, most recently, for the successful emergence of cheap shale natural gas, many current renewable energy deployment policies offer little support for emerging technologies. As a result, the energy innovation budget is divided into two pieces, with only weak linkages between technologies working through the development process that will be competitive in the long-term, and uncompetitive, existing technologies supported by subsidies.
Although the energy innovation budget would remain underfunded compared to other national missions like defense and health R&D even if this budget were passed as it, the President deserves to be lauded for proposing modestly larger energy research budgets in this time of fiscal austerity. Policymakers must continue to recognize the importance of public support for energy innovation – and R&D funding throughout the federal government – as a means to rebuilding the post-recession American economy.
2015 EIA Energy Conference
June 15-16, 2015 - Washington, D.C.
Platts North American Crude Oil Summit
February 26-27, 2015 - Houston, TX