On May 23 the Trump Administration released its formal FY 2018 budget proposal for congressional approval. The formal budget mirrors many of the aspects of the budget blueprint that the Administration released on March 16—including significant cuts to offices and programs relating to renewable energy.
Overall, the proposal cuts the budgets of the U.S. Department of Energy and the U.S. Department of the Interior. The cuts align with the Administration’s goals of reducing non-defense discretionary spending to fund an increase in defense and infrastructure spending.
The Department of Energy’s (DOE) budget would be reduced by about 6% to $28 billion. Most of the proposed cuts center on programs that fund and support clean energy research and development. Specifically, two initiatives selected for elimination are the Advanced Research Projects Agency-Energy (ARPA-E), which funds early-stage innovations such as electric vehicles and battery storage, and the Innovative Technology Loan Guarantee Program, which provides credit subsidies to renewable energy projects. Funding for fossil energy research and development programs is slated to be reduced as well.
The budget also seeks to cut—by about half—the budget of the Office of Energy Efficiency & Renewable Energy (EERE), which oversees efficiency standards for appliances and buildings, supports clean energy research, and funds the National Renewable Energy Laboratory. The budget of the Office of Nuclear Energy (NE), which supports nuclear energy research and development, would be cut by about $300 million, and the budget of the Office of Electricity Delivery & Energy Reliability (OE), which funds improvements in energy infrastructure, will also be cut. Ultimately, the Administration wants to narrow the focus of these programs to limited, early-stage applied energy research and development.
Not all DOE agencies will see cuts under the proposed budget, though. The Administration has proposed an 11% increase for the National Nuclear Security Administration (NNSA) to modernize and bolster the country’s nuclear weapons capabilities. The Administration likewise seeks to restart collecting the Nuclear Waste Fund fee in 2020. Presumably, with the restarted collection of the fee, DOE will also restart its plans for a long-term waste repository.
Other DOE line items include reducing the Strategic Petroleum Reserve (SPR) by half and divesting the transmission assets of the Western Area Power Administration (WAPA), the Southwestern Power Administration (SWPA), and the Bonneville Power Administration (BPA).
The Department of the Interior’s (DOI) budget is slated to be reduced by about 11% to $11.7 billion. DOI budgetary initiatives include leasing for oil and gas production in the Arctic National Wildlife Refuge (ANWR) and repealing the Gulf of Mexico Energy Security Act (GOMESA), which provides revenues from offshore oil and gas leases to states on the Gulf of Mexico. The proposal also boosts funding for energy development on public lands and in offshore waters and sustains funding for the Office of Natural Resources Revenue (ONRR), which collects and distributes revenues from mineral development on federal lands. In addition, the proposed budget shifts payments for geothermal energy production on federal onshore lands, which are currently split between all three levels of government, away from counties to be split evenly between the federal and state governments.
The proposed budget also seeks to spur $1 trillion in infrastructure investment and spending, including energy infrastructure, from both public and private funds.
For more information, see the full budget proposal at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/2018_blueprint.pdf.
* The authors of this post would like to thank Miles Wobbleton, J.D. Candidate 2018 at the University of North Carolina Law School for his research and invaluable assistance with this post.