June 29, 2017

U.S. House Takes First Step in Moving Energy Spending Bill

The House Appropriations Committee marked up the FY18 Energy and Water Appropriations Bill this week, which provides annual funding for various programs under the Department of Energy (DOE), the Army Corps of Engineers, nuclear weapons activities and other related agencies. The bill totals $37.56 billion – $209 million below the FY17 enacted level and $3.65 billion above President Trump’s budget request. That the funding exceeded the administration’s request is hardly a surprise, as both Republicans and Democrats in Congress pushed back on the proposed spending when Energy Secretary Rick Perry testified last week. The House bill also largely ignores the steep cuts to clean energy programs that were outlined in President Trump’s proposal.

House Energy and Water Appropriations Bill Summary

Nuclear weapons activities received a major, $1 billion bump above FY17 levels. Energy programs under DOE would see $9.6 billion in funding next year, which is a $1.7 billion cut from FY17. Highlights of the bill include:

  • National Laboratories: The national laboratories operate under the Office of Science, which remains at the FY17 funding level of $5.4 billion under the House bill. President Trump recommended making a significant cut to the program. 
  • Office of Fossil Energy: This office directs much of DOE’s carbon capture and sequestration efforts. Secretary Perry has touted the benefits of carbon capture, even doing so as recently as last week’s congressional hearings, even though President Trump’s budget slashed funding for the office drastically from $668 in FY17 to $280 million. The House bill only cuts it to $636 million, which signals Congress’s commitment to continued research into clean coal technologies.
  • Energy Efficiency and Renewables: In one of the larger cuts, the bill slashed funding for the Office of Energy Efficiency and Renewable Energy by half from the FY17 enacted level of $2.1 billion. Although this a significant cut, the House’s $1.1 billion in allocations for this program exceeds the $636 million proposed in President Trump’s budget.
  • Nuclear: Nearly $1 billion was included in the bill for research and development for nuclear energy. This amount was $266 million more than the president’s request.
  • ARPA-E: The House bill followed the administration’s recommendation and eliminated funding for Advanced Research Projects Agency-Energy (ARPA-E). ARPA-E promotes funding research and development of advanced energy technologies within DOE. This is likely to roil some Republican Senators who have come out in support of the program in the past several weeks.
  • Yucca Mountain: The bill signals Congress’s intent on supporting the Yucca Mountain nuclear repository. According to the bill, it will provide $90 million for the Nuclear Waste Disposal program. Additionally, it shells out $30 million for Defense Nuclear Waste Disposal and $30 million for the Nuclear Regulatory Commission.
  • Petroleum Reserve: The House bill departs sharply from President Trump’s view that the Strategic Petroleum Reserve (SPR) is not as important as it once was. His budget advocates for selling off half of the reserves and use it to pay down the deficit. The House bill increases funding for the SPR to $252 million.
  • Army Corps of Engineers: The Army Corps of Engineers is funded at $6.16 billion, an increase of $120 million above the FY17 enacted level and $1.16 billion above the president’s budget request.

In addition to laying out the spending priorities, the legislation includes a provision authorizing the Environmental Protection Agency (EPA) and the Army Corps to withdraw the Waters of the U.S. rule without following the Administrative Procedure Act. It also included language from the FY17 omnibus stating that farm ponds and irrigation ditches are exempt from the Clean Water Act.

Next Steps

It remains to be seen whether the Senate will have similar funding levels in their version of the energy and water appropriations bill. As Energy Secretary Perry was testifying before the Energy and Water Appropriations Subcommittee last week, Chairman Lamar Alexander, R-TN, emphatically stated that funding for ARPA-E will not be zeroed out in the Senate appropriations process as President Trump has requested. He also stated his concern regarding cuts to the national labs and reiterated that there isn’t much to support in DOE’s budget request, which likely means he won’t like some of the items included in the House version as well. Even House appropriators have expressed doubt that the Senate will keep the larger cuts in place.

Because of administration’s tardiness in unveiling the budget, the appropriations process is months behind schedule, increasing the chances that a continuing resolution will be required to avoid a shutdown. House leadership had committed to bringing all 12 appropriations bills to the floor individually, but that is unlikely this year due to a jam-packed schedule. What’s more is the House was unable to agree on a budget resolution this week, which sets overall funding levels for appropriations bills. This could further set back Congress’s plans to get their bills to the floor. At the current pace, it seems likely that Congress will extend 2017 funding levels into the 2018 fiscal year under a continuing resolution or omnibus. As this is the first energy spending bill under the new administration, it will be important to see what priorities remain given the disagreements with Congress and tight budget constraints.

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