2011 Budget Emphasizes Energy, but Fails to Draw Connection to Transportation
Posted February 2, 2010 at 10:09 am 
Filed in: Yesterday the Obama administration released its 2011 budget proposal, and as yesterday’s EPIC blog anticipated, much-needed support for new nuclear power plants is requested. There is a lot more on energy in the budget, however, ranging from the practical to the pie-in-the-sky.
Somewhat worrisome is that despite the fact that the U.S. transportation sector is around 95% dependent on oil, and produces a third of our greenhouse gas emissions, the budget makes no effort to move toward explicit links between energy and transportation goals.
Here’s what’s in the budget that may be relevant to U.S. energy security:
Greenhouse Gases
Though the EPA’s budget will decline slightly, it would get $21 million to implement a Mandatory Greenhouse Gas Reporting Rule and $56 million to implement regulations on greenhouse gas emissions.
What it means: POTUS is sending a message to Congress that if they don’t pass what he termed in his State of the Union as a “comprehensive energy and climate bill,” the Administration will go ahead and regulate GHGs on its own. It’s also useful to know that the reporting rule funding is up only $4 million, while the implementation funding is up $43 million. The budget also includes an unspecified placeholder for revenue from a cap-and-trade system.
Oil and Gas Subsidies
Over $36 billion in tax breaks to oil and gas companies for domestic activities are slashed, with plans to repeal $2.3 billion in coal industry subsidies starting in 2011.
What it means: Most insiders agree this is only for show – it has little more than a prayer of getting through Congress. Similarly, in the in the FY2010 budget, the Administration proposed $31.5 billion worth of fossil-fuel tax cuts. They didn’t go anywhere.
Nuclear Power
DOE would be authorized to make loan guarantees for new power plant construction of up to $36 billion.
What it means: Current loan guarantees stand at $18.5 billion. The loans do have to be repaid in full, so this is no subsidy.
Energy Efficiency and Renewable Energy (EERE)
Out of DOE’s total proposed $28.4 billion 2011 budget, $2.4 billion will go to EERE, $545 million for clean coal and carbon capture and storage, $144 million for the smart grid, and $500 million are earmarked as a credit subsidy in order to provide $3-5 billion of loan guarantees for energy efficiency and renewable energy projects. The Labor Department gets $85 million to train 14,000 people for all the green jobs those projects will create. And the Department of Interior gets $73 million to speed the renewable energy permitting process on federal lands.
What it means: The “credit subsidy” is, in fact, a simple subsidy. The general EERE pot is up only $113 million from last year.
Transportation
The Department of Transportation’s highway funds will stay largely the same (the Federal Highway Administration’s programs would increase by $200 million to $41.3 billion, and the Federal Transit Administration would receive $10.8 billion, about $70 million more than last year). The major new initiative is a national infrastructure bank that the POTUS hopes to seed with $4 billion and use on projects of national and regional significance. The Sustainable Communities program, which aims to integrate land use (i.e. housing development) with transportation infrastructure, receives $530 million. High-speed rail gets an additional $1 billion.
What it means: The Sustainable Communities and high-speed rail programs have the potential to improve energy security, but only if carried out with a goal of oil savings in mind. Unfortunately, the budget does not make improving the energy efficiency of our outdated transportation system, which is responsible for over 70 percent of national daily oil consumption, a priority.
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