With the debt limit and budget serving as the principle areas of focus for the time being, the budget is rapidly becoming the battleground where the near future of energy policy will be decided. The Senate returns from its week-long Memorial Day recess June 6, while members of the House will spend the week in their home districts.

The House Energy and Water Development Appropriations Subcommittee cleared a $30.6 billion fiscal year 2012 funding measure for the Department of Energy ($24.7 billion) and Army Corps of Engineers ($4.8 billion) June 2. Appropriations Committee Chairman Hal Rogers (R-KY) promised to move the bill through the full committee and to the House floor before the August recess. Overall, the legislation would cut renewable energy and energy efficiency funding while increasing funding for fossil fuel programs. The budget is $6 billion less than what President Obama requested and $850 million less than the FY 2011 spending levels, and put spending on par with 2005 levels, though $35 million was added to continue operation of the Yucca Mountain nuclear waste repository that President Obama has sought to close.  

The bulk of cuts come from renewable energy programs, with the Department of Energy’s Office of Energy Efficiency and Renewable Energy receiving $1.9 billion less than the president’s request and $491 million less than FY 2011. The Department of Energy’s loan guarantee program would receive $160 million in subsidy costs for renewable projects, while ARPA-E would receive $100 million. Funding for small nuclear reactors would be equal to the President’s request, and overall nuclear spending would exceed his request by $8 million. The agency’s Office of Science would be funded at $4.8 billion, which is $43 million below FY 2011, and the number of energy innovation hubs would be increased from three to five.

The House Appropriations Subcommittee on Interior, Environment, and Related Agencies is expected to vote July 6 on the fiscal 2012 Interior-Environment spending measure that would fund the EPA, the Interior Department’s Office of Surface Mining Reclamation and Enforcement, the corps’ regulatory program, and a host of related agencies. Continued efforts to rein in EPA regulations are anticipated via the budgetary process.  

More details have emerged on the reductions to the current budget, as mandated by legislation (H.R. 1473, long term continuing resolution) approved April 14 by Congress, include more than $400 million from the Department of Energy’s Office of Energy Efficiency and Renewable Energy which have resulted in large cuts for research and development programs, weatherization, and other areas. Among the largest reductions is a $37.3 million cut in funds for the office’s biomass and biorefinery program, a $35.7 million reduction in weatherization funding, and a $20 million reduction in the water technologies program, supports research in marine and hydrokinetic energy as well as traditional hydropower. The office’s hydrogen technology program, which was funded at $174 million in fiscal year 2010, was zeroed out, and the office’s building technologies program was cut by $11.5 million while the vehicle technologies program was reduced by $11.4 million. Some programs received funding increases, including the newly established hydrogen fuel cell technologies program, which will receive $98 million this fiscal year, and the SunShot Initiative, which received an increase of $16.5 million.

Senate Majority Leader Harry Reid (D-NV) has not yet set a public timetable for when the Senate will address the fiscal year 2012 appropriations, but said last week that he, Senate Appropriations Chairman Daniel Inouye (D-HI), and others will meet with Vice President Joe Biden to write the 12 bills that can be marked up this summer.

In other interesting news, as presidential hopefuls begin to jockey for position, numerous Republicans are calling for an end to energy subsidies. Last Tuesday, Sarah Palin joined the call, and Jon Huntsman suggested striking energy subsidies as a part of the debt ceiling votes. Congressman Mike Pompeo (R-KS) circulated a “dear colleague” letter urging his colleagues to support a resolution he recently introduced that would repeal all energy subsidies.