Rick Perry’s budget request is a ‘doorstop’

Source: Benjamin Storrow, E&E News reporter • Posted: Wednesday, February 14, 2018

Energy Secretary Rick Perry learned a lot about budgets in his three decades in Austin, Texas, where he served as a state legislator, agency head and governor.

“We used to joke that a budget made a pretty good doorstop,” he said in a conference call with reporters yesterday, where he outlined the Energy Department’s $30 billion budget proposal for fiscal 2019.

That’s never been truer. The proposal envisions deep cuts in spending on research for renewables while boosting support for coal and nuclear. But a two-year budget deal agreed to by lawmakers on Friday means the proposed cuts were immediately obsolete.

“I will say it is a bit like the cart came after the horse that left the barn because of the spending deal last week,” said Tom Pyle, president of the Institute for Energy Research, who served as the leader of President Trump’s DOE transition team. “I think the reality is we won’t see dramatic change at the DOE in the immediate future, which I think is needed.”

The budget request reflects the Trump administration’s energy priorities. Funding for DOE’s renewable energy office would fall from about $2 billion currently to $696 million in fiscal 2019.

The Advanced Research Projects Agency-Energy (ARPA-E), a program that pays for research in early-stage clean energy technology, would be eliminated. The department’s loan guarantee program would also be sent to the chopping block, but not before extending a $3.7 billion loan for a new nuclear reactor being built by Southern Co. in Georgia. Funding for advanced coal and nuclear projects, meanwhile, would increase.

The proposed budget would appease a long-standing Republican gripe about the Department of Energy, namely that it has funded renewables at the expense of traditional fossil fuels.

Under the plan, $502 million would be spent on fossil energy research and development, an increase of $81 million over fiscal 2017. The administration requested an additional $200 million for clean coal research in a budget proposal addendum sent to Congress yesterday. The additional request was meant to reflect the higher spending caps approved by lawmakers.

Perry said the money would be competitively awarded and would be targeted at early-stage research and development.

“I think everybody who is in touch with reality will tell you that fossil fuels are gonna continue to play a role in the future,” the secretary told reporters. “Our goal is to produce it more cleanly; our goal is to use American technology, innovation that often comes out of our national labs, many times in cooperation and coordination with our private-sector partners, to find the new ways to develop this energy in the most environmentally sensitive way they can.”

The budget proposal addendum also requested an additional $120 million for renewable research. But administration officials argued that overall cuts to renewable research are justified by the industry’s falling costs. Concentrated solar power, wind power and electric car batteries have consistently met or exceeded the government’s cost reduction targets, said Energy Undersecretary Mark Menezes.

“It’s actually a very good story to tell,” Menezes said, noting that DOE was moving away from commercially viable technologies to support breakthrough innovations.

History suggests Perry may have difficulty selling the cuts. This marks the second consecutive year DOE has proposed eliminating ARPA-E and the loan guarantee program. Neither proposal has gained much traction.

The idea of axing ARPA-E gained steam in the House but met stiff resistance in the Senate, where a series of Republican lawmakers objected to cutting the program.

Autumn Hanna, who tracks energy and natural resource spending at Taxpayers for Common Sense, noted that the administration doled out a $3.7 billion loan guarantee for Southern Co.’s Vogtle nuclear reactor last year, despite pledging to end the loan guarantee program.

“It’s just an example of saying one thing, doing another,” Hanna said. “They’re saying they’re going to make cuts and hard decisions, but they’re not acting on that.”

Renewable energy advocates were largely unworried. They expressed dismay that the cuts in renewable research could hamper long-term investment but said their industry is likely to shrug off the administration’s plan in the short term.

“The advanced energy industry is incredibly strong, and we don’t view this as an attack,” said Dylan Reed, head of congressional affairs at Advanced Energy Economy, a trade group.

Administration supporters, for their part, praised the overall direction of the budget plan. Cutting spending in DOE’s renewable-centric energy programs is long overdue, Pyle said. He called the plan a step toward the energy production and export goals laid out by Trump. Still, he conceded that the overall impact of the proposal is likely to be limited.

“The level of symbolism is higher because at this point, there is really a lot of money to be spent in the discretionary budget this year,” he said.

In other words, consider it a likely doorstop.