SPECIAL UPDATE: The President's FY2009 Department of Energy Budget Request

On February 4, 2008, the President' fiscal year (FY) 2009 budget for the Department of Energy (DOE) was revealed by Secretary Samuel Bodman. The President's request of $25 billion for the Department would represent an increase of $1.1 billion above the FY08 appropriation level. The overall increase of 4.7% in the Department's budget compared to FY08 enacted levels is something few agencies are seeing in this time of fiscal constraint. The additional funds are targeted toward coal technologies, nuclear energy programs and U.S. scientific competitiveness through a significant increase for the Office of Science.

According to Bodman "this budget furthers President Bush's comprehensive strategy to increase energy, economic, and national security by focusing on accelerating technological breakthroughs, expanding traditional and renewable sources of energy, and increasing investment in scientific discovery and development."

While the proposed increases generally elicited positive responses from members of Congress, lawmakers did express concern regarding the decline in funds for the popular weatherization assistance program within the Office of Energy Efficiency and Renewable Energy. Congress will most likely also, haggle with the President on nuclear energy issues, which have mixed support, and the proposed increase in the Strategic Petroleum Reserve to 1.5 billion barrels.

Office of Energy Efficiency and Renewable Energy
The budget within the Office of Energy Efficiency and Renewable Energy (EERE) was slashed by 27% in the FY09 request, losing $1.25 billion. The renewable energy programs suffered mixed results with the geothermal program getting a boost to $30 million, an increase of 51% compared to FY08 levels.

The Chairman of the Senate Energy and Natural Resources Committee, Jeff Bingaman (D-NM) supported the increase for geothermal: "In the case of geothermal energy, I'm pleased that the Administration listened to and worked with Congress to define a new profile for that program in the recent energy bill, and then came through with a good funding proposal in this budget request."

The hydrogen and hydropower programs with proposed levels at $146 million and $3 million represent declines of 31% and 70% respectively, compared to FY08. According to DOE, the hydrogen program is being realigned with the deferral of hydrogen production and delivery efforts and instead focuses on the barriers of hydrogen storage.

Office of Fossil Energy
The Office of Fossil Energy would get a $223 million increase above last year's level for a total of $1.1 billion. Within Fossil Energy natural gas and petroleum technology programs are terminated again. These programs have been zeroed out for the past few years, but restored by Congress.

The proposed budget funnels $632 million in FY09 into the Coal technology program, $85 million into the Clean Coal Initiative, and $156 million into FutureGen. Earlier this month, Secretary Bodman announced that the FutureGen program would be altered from a single facility in Illinois that would have been designed to demonstrate advanced coal-fire electricity generation, hydrogen production, and carbon capture and sequestration to a variety of capture and sequestration projects that will be announced in an upcoming solicitation.

The leaders of the Senate Energy and Natural Resources Committee, Senators Bingaman and Domenici, both indicated in press statements that they'd like the Department to explain their reasoning for the programmatic changes in FutureGen.

Also, as part of the Department's focus on 'clean' coal technology development the Carbon Sequestration Regional Partnerships are slated to receive $149 million a boost of $30 million in FY09 for continued efforts to inject one million tons of carbon dioxide into various geologic formations.

Office of Science
The Office of Science proposed budget of $4.7 billion would include a $749 million increase above FY08 enacted levels and represents an increase for all programs. The Basic Energy Science program is proposed to receive a 24% increase above FY08 levels at $1.6 billion, the Chemical Sciences, Geosciences, and Energy Biosciences program would receive $75 million above FY08 enacted levels for a total proposed budget of $297 million. The Biological and Environmental Research program would be given $414 million in the FY09 budget request and the Climate Change Research program would receive $155 million, representing an increase of $6 million and $18 million, respectively.

The increases across the board in the Office of Science are part of President Bush's American Competitiveness Initiative (ACI) and some of the increases are also consistent with the bipartisan America COMPETES Act. Both have the overarching goal of keeping America the most innovative nation in the world through the strengthening of education and research in science, math and engineering.

However, Senator Pete Domenici (R-NM) had the following to say about the implementation of the act into the Department's request. "While I support the substantial increase for the Office of Science, I do plan on questioning the Department about how it plans to integrate the America COMPETES Act within this budget. I had hoped to see specific components of the COMPETES Act more fully funded in this budget request, but many simply are not mentioned. I certainly hope that the Department plans on carrying out the initiatives of this bipartisan law."

Office of Environmental Management
The Office of Environmental Management was established in 1989 to clean up the waste and contamination from nuclear weapons development and energy research. It includes an environmental clean-up account for defense and non-defense activities. Non-defense clean-up activities would receive a 17% increase in the proposed budget to $213 million, while defense activities would see a slight decline with total proposed level of $5.5 billion in FY09.

Office of Civilian Radioactive Waste Management
The primary mission of the Office of Civilian Radioactive Waste Management (OCRWM) is to develop a geologic repository at Yucca Mountain in Nevada, for spent nuclear fuel and high-level radioactive waste from commercial reactors and atomic energy defense activities. OCRWM receives funds from defense and non-defense waste disposal programs within DOE. The Nuclear Waste Disposal program contains funding for Yucca Mountain, Transportation, Program Management and Program Direction, while the Defense Nuclear Waste Disposal program only contains funding for Yucca Mountain.

The Nuclear Waste Disposal program would see a $60 million rise in funding compared to FY08 for a total of $247 million. The Defense Nuclear Waste program would also increase in FY09 by 48%, again to $247 million.

The $495 million budget proposal for Yucca Mountain will be challenged by Senate Majority Leader Harry Reid (D-NV), who has sworn to terminate the project in the appropriations process. Last year, Reid was able to convince enough legislators to cut $104.5 million from the project, which puts DOE's June deadline for the submission of a license application to the Nuclear Regulatory Commission at risk. However, Bodman assured reporters that DOE plans on moving forward with the Yucca Mountain Project and plans submit the license application by the end of 2008; a new timeline and cost of the repository will be released this spring based on the FY 08 budget.

Special update prepared by Marcy Gallo, Government Affairs Staff.

Sources: Department of Energy, E & E Daily

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

Posted February 11, 2008