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Samuel Bodman, the Secretary of the Department of Energy (DOE), unveiled the President’s budget request for fiscal year 2007 for the Department of Energy at a press conference on February 6, 2006. He noted the importance of the President’s initiatives, American Competitiveness and Advanced Energy that were discussed in the State of the Union address on January 31. For DOE, the American Competitiveness Initiative would mean an increase of $505 million to the $3.5 billion Office of Science budget in fiscal year 2007 (FY 2007) to begin to achieve a doubling of basic research funding over the next 10 years.

The Advanced Energy Initiative would increase funding for clean energy research by 22% with most of the increased funds going to solar, biomass/biofuels, hydrogen fuel, FutureGen and nuclear power. Research for geothermal and hydropower would be zeroed out of the FY 2007 appropriations. The initiative would also establish a new international program, Global Nuclear Energy Partnership (GNEP) at a cost of $250 million. GNEP will reduce the threat of nuclear proliferation and anticipate a 50% increase in energy demand over the next 20 years. Bodman emphasized that the United States will work to reduce its dependency on foreign oil by developing “safe, emissions-free nuclear power” and “by emphasizing the potential of U.S. coal reserves”. GNEP represents a change in U.S. policy regarding the recycling of nuclear waste. GNEP will work to develop proliferation-resistant recycling of nuclear fuel for greater efficiency and less waste and to develop a new generation of small scale reactors to utilize recycled fuel in developing countries. Bodman concluded his introduction to the energy budget by emphasizing the department’s commitment to Yucca Mountain and improved management of programs and people. DOE is now planning programs on a multiple year time scale to ensure that the department honors its commitments in a timely fashion.

Overall DOE funding for FY 2007 would remain flat at $23.6 billion, but in terms of real dollars it would represent a $500 million decrease compared to FY 2006 appropriations. Science would receive a boost from $3.6 billion in FY06 to $4.1 billion, Energy and Environment would receive a decrease from $9.9 billion to $9.2 billion and National Security would receive an increase from $9.1 billion to $9.3 billion.

Within the Office of Fossil Energy, research for natural gas technologies and petroleum/oil technologies would be zeroed out as in previous requests because the administration believes that energy companies should be conducting this research with the large profits from the recent high prices of gasoline and other fossil fuel commodities. In addition the programs have received Office of Management and Budget assessments that are scored as “ineffective”. In addition to eliminating oil and gas research, the President requests that the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Research Fund passed as a mandatory funding program with revenues through oil and gas leases in the Energy Policy Act of 2005 be repealed by future legislation. The program was meant to fund ultra-deep research at $50 million per year over 5 years. Cooperative research and development and advanced metallurgical research were also zeroed out of the President’s budget request. Most of the funding in this office would be concentrated in coal research ($330 million), program direction ($129 million) and the strategic petroleum reserve ($155 million) and except for program direction these other programs would see decreases in their budget of more than 20%. The total budget for the office would fall from $841 million in FY 2006 to $649 million, a 22% cut.

The Office of Science would receive an increase of 14% compared to FY 2006 appropriations, consistent with the American Competitiveness Initiative, for a total budget of $4.1 billion. All programs would see increases except for Biological and Environmental Research (BER), which would receive a 12% cut. Climate Change Research within BER would be reduced by 5% from $142 million in FY 2006 to $135 million in FY 2007. The Basic Energy Sciences (BES) would remain the largest program in the Office with an increase of 25% from $1.134 billion in FY 2006 to $1.420 billion in FY 2007. Within BES, Chemical Sciences, Geosciences and Biosciences would receive a $47.9 million increase over their FY 2006 budget. About half of this increase would go toward the President’s Hydrogen Initiative ($6 million increase) and basic research related to energy technologies ($22.4 million increase) and the other half would go toward nanoscale science research ($22.2 million increase).

The Yucca Mountain waste repository project would receive $355.4 million, an increase of $49.5 million over FY 2006 funding. Transportation development would increase from $19.9 million in FY 2006 to $67.8 million and the President's request eliminates funding for the Integrated Spent Fuel Recycling program that Congress appropriated $49.5 million for in FY 2006. Spending within the civilian waste management office will focus on defending the department's license application at the Nuclear Regulatory Commission, improving decaying site infrastructure, planning facilities for the receipt of spent waste and developing a transportation infrastructure for spent waste. Within the Office of Environmental Management, funding for defense and non-defense environmental clean-up would decrease by more than 10% in each program while the Uranium Enrichment Decontamination and Decommissioning Fund would increase by 4% from $556.6 million in FY 2006 to $579.4 million.

Additional information is available at http://www.agiweb.org/gap/legis109/appropsfy2007_energy.html

Special update prepared by Linda Rowan, Director of Government Affairs

Sources: Department of Energy

Please send any comments or requests for information to the AGI Government Affairs Program.

Posted February 13, 2006

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