Obama’s Shout-Out for Energy


President Obama explained his budget priorities as Jack Lew, director of the Office of Management and Budget listened during a visit to a middle school in Baltimore.Agence France-Presse — Getty Images President Obama explained his budget priorities as Jack Lew, director of the Office of Management and Budget, listened during a visit to a middle school in Baltimore specializing in technology.

Over all, the Obama administration has pledged to hold the line on “discretionary spending” in its budget for the 2012 fiscal year — that is, everything it can control, which leaves out areas like Medicare and Social Security. But on energy, it is still going gangbusters, at least as proposed on Monday.

The budget request calls for $29.5 billion in Energy Department spending, up from $26.4 billion in the last budget Congress approved, for 2010. Congress could rewrite the budget, or it could pass no budget at all and simply vote to continue funding existing programs at some percentage of the prior-year appropriation.

But if the administration had its way, budgets for solar, geothermal, biomass and wind energy would rise sharply. The wind portion is concentrated on offshore generation because, as Energy Secretary Steven Chu said, the technology for onshore wind is already “mature.”

Yucca Mountain, the proposed site of a nuclear waste dump, was not mentioned, but the budget includes an increase of $23 million, or 17.5 percent, for “fuel cycle research and development,” a category that includes nuclear waste management. The Obama administration has promised not to go forward with the proposed waste repository at Yucca Mountain in Nevada, and a “blue-ribbon commission” is currently studying what to do with the waste.
 
Among the possibilities discussed is a new class of reactors that would burn some of the wastes as fuel and break up some of the longest-lived materials into isotopes with shorter half-lives, which would be easier to dispose of. But that would be a long-term research and development project.

The administration also asks for $550 million for the Advanced Research Project Agency – Energy, the Energy Department’s version of the Defense Department’s better-known Advanced Research Projects Agency, which finance high-potential long shots in the early research phases. For the first two years, ARPA-E was funded through the Recovery Act; its prospects as a separate line item in the 2012 budget are uncertain. And the administration is proposing to give ARPA-E $100 million that it would obtain by auctioning off radio frequencies to the private sector.

Some of the budget items are repeats of requests from previous years. For example, Secretary Chu has often referred to his desire for “lablettes,” small labs that would focus intensively on narrow areas. More formally, they are called “energy innovation hubs,” and Dr. Chu has been seeking six of them, but so far Congress has established only three. They center on making fuel from sunlight, increasing energy efficiency in buildings and modeling and simulating nuclear reactors.

The department wants three more: one each for battery and energy storage, smart grid technologies, and critical materials. The administration has requested $146 million for all six lablettes, which Dr. Chu called “the Apollo projects of our time.”

He is also trying to redirect money away from research that he does not believe has a strong possibility of delivering a payoff in the short term. Notably, he is trying to cut the budget for fuel cell research by nearly $70 million, or 40 percent. In the past, Congress has resisted that cut.

“We still think it’s a good idea” to make the cuts, Dr. Chu said.

But the research and development industry has its own constituency, which has promised to fight to reverse the cuts even if the technology has not paid off so far. At the Fuel Cell and Hydrogen Energy Association, Ruth Cox, the president, said, “After investing billions of American dollars and years of effort, we simply cannot walk away from our commitment to these critical technologies.”

Dr. Chu said the problem was not so much the fuel cell, which converts hydrogen into electric current and water, but the hydrogen, which creates pollution and involves an energy loss when it is made.

The budget also anticipates some revenue. The department is proposing to reduce the Strategic Petroleum Reserve, now 727 million barrels, to 720 million because it has to partly drain one of the salt caverns where the crude is stored in order to repair it. It anticipates revenue of about $500 million from the sale.

And with progress so far very slow in developing cellulosic fuels, which are substitutes for gasoline and diesel that come from the nonfood portion of crops, household garbage or wood waste, the department is proposing a new way to stimulate production. It plans a “reverse auction,” in which it would offer $150 million, with potential suppliers bidding on how much fuel they would provide.

The idea is to draw production from pilot plants that would eventually prove the technologies needed for commercial-scale production actually work.

As I reported on Sunday, small modular nuclear reactors would also get a boost.

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