WASHINGTON - The Obama Administration this week sent to Congress an overall budget of $3.8 trillion in fiscal year 2011 that projects a record budget shortfall of $1.6 trillion.

There are 126 terminations, reductions, and other areas of savings identified that will save approximately $23 billion next year, according to the White House Office of Management and Budget.

The President’s proposed 2011 federal budget allocates about one-sixth of $28.4 billion for the US Energy Department to invest in clean energy technologies, and a further $1.8 billion to discover novel ways to produce, store and use energy.

Congress must approve the proposed $3.83 trillion federal budget, which includes a record-breaking $1.56 trillion deficit. The federal fiscal year is 1 October to 30 September. Congress approved $26.4 billion for DOE in 2010.

The $4.7 billion in clean energy technology investments includes:

• Nearly $2.4 billion, an increase of $113 million, for energy efficiency and renewable energy programs including $302m for solar energy, $220m for biofuels and biomass R&D, $325m for advanced vehicle technologies and $231m for energy efficient building technologies.
• $545m for advanced coal climate change technologies such as to develop carbon capture technologies with broad applications to advanced coal power systems, existing power plants and industrial sources.
• $300m for the Advanced Research Projects Agency–Energy (ARPA-E) to accelerate transformational energy technologies in need of rapid and flexible experimentation or engineering. ARPA-E, a unit of DOE, was initially funded with $400m from the 2009 economic stimulus law.
• $793m for clean energy activities and civilian nuclear energy programs, including research and development and infrastructure programs.

The proposed federal budget also boosts DOE’s new loan authority by $36bn to $54.5bn to expand support for agency loan guarantees for nuclear power facilities. The program will encourage new nuclear facilities and a range of renewable energy projects that reduce greenhouse gases and pollutants, while simultaneously creating jobs and contributing to long-term economic growth.

Also allocated is $500m in credit subsidy funding to support $3bn to $5b in loan guarantees for innovative energy efficiency and renewable energy projects.

As well, there is $144m for research, development, and demonstration activities to modernize the electric grid. This includes technologies that will spur transition to a smarter, more efficient, secure and reliable electric system, resulting in energy- and cost-saving choices for consumers, reduced emissions, and growth of renewable energy sources.

In a statement, the White House says the budget also pledges that the administration will work to enact and implement a comprehensive market-based policy that will reduce greenhouse gas emissions in the range of 17 percent in 2020 and more than 80 percent by 2050.

“Businesses will have the flexibility to seek out the most profitable and least costly ways of achieving greenhouse gas emission reductions,” the statement says, without mentioning that the hoped-for climate change legislation is stymied in Congress.

Those ways include making investments in energy efficiency and low-carbon or zero-carbon fuels; to offsetting their emissions through agricultural activities that remove carbon dioxide from the atmosphere, and developing export markets for American clean energy technologies through investments in emission offset activities abroad.

To prepare for the reduction in emissions, the federal government will invest in climate registries to account for greenhouse gas emissions; implement regulations that improve energy efficiency, lower energy bills, and reduce emissions, the statement says without providing further detail.

The federal budget also expands the Advanced Energy Manufacturing Tax Credit by $5bn to $7.3bn. The popular 30 percent tax credit is for qualified investments in new, expanded or re-equipped advanced energy manufacturing projects. The additional funds “will help spur private investment in clean energy manufacturing and create jobs, helping to lay the groundwork for American leadership in the new clean energy economy,” according to the statement.

Obama also proposes investing $2.6bn to “deepen our understanding of climate change and its impact.” The US also will take prompt, substantial action to help the least developed and most vulnerable coun-tries adapt and build resilience to the impacts of climate change. No funding amount was given.

As part of the federal budget, Obama instructed DOE to lead the federal effort to double US renewable energy generating capacity by 2012 excluding conventional hydropower.

The agency will assist in the development and deployment of advanced battery manufacturing capacity to support 500,000 plug-in hybrid electric vehicles a year by 2015.

DOE and the US Housing and Urban Development Department will work together to enable the cost-effective energy retrofits of a total of 1.1 million housing units through 2011. Of this number, DOE programs will contribute to retrofits of an estimated one million housing units.

Simultaneously, the Energy Department budget eliminates more than $2.7 billion in tax subsidies for oil, coal and gas industries. This step is estimated to generate more than $38.8 billion dollars in revenue for the federal government over the course of the next 10 years.

It terminates the Ultra-Deepwater exploration program, saving $50 million, and cancels the planned expansion of the Strategic Petroleum Reserve, saving $71 million.

"The President's budget cuts wasteful spending while making wise investments in innovation and clean energy that will put Americans back to work, save families money and keep our nation competitive in the global marketplace," said Secretary Chu. "This budget supports new approaches to energy research and invests in the next generation of scientists and engineers, and it will spark new clean energy projects nationwide, including restarting the American nuclear power industry."

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