2012 DOE Budget to Eliminate $3.6 billion in tax breaks, subsidies for oil, natural gas, coal

WASHINGTON — The 2012 federal budget, released Monday, essentially treads water on energy and the environment, trying to maintain momentum for alternative energy research even as it cuts deeply into some environmental protection programs.

The president once again asks Congress to do away with billions in tax breaks for fossil fuel interests, over the outcries of the oil and gas industry.

The request deals with policies that involve some of the sharpest disagreements between the administration and Congress, which will debate it line by line.

Spending at the Department of Interior would remain at roughly the same level as past years, but with a major increase, to $358 million, for environmental and safety enforcement for offshore oil and gas drilling, to be offset largely with royalties and fees from oil companies.

The budget request represents an increase of $119 million, or 50 percent, from 2010 and is intended to address weaknesses revealed after last year’s BP spill in the Gulf of Mexico. The additional money would be used to hire new oil and gas inspectors, to more vigorously oversee drilling activities and to process drilling permit applications more efficiently.

The Energy Department budget includes more than $8 billion for research and development of alternative energy sources and provides hefty loan guarantees for the construction of nuclear power plants. The plan also includes $453 million for fossil fuel programs, with a heavy emphasis on developing ways to capture and store carbon dioxide emissions from power plants and refineries.

The plan provides money to establish three Department of Energy innovation centers in addition to the three already opened. It also devotes $550 million to cutting-edge energy programs supported by the Advanced Research Projects Agency-Energy, a new agency at the department.

Cuts at the department include major reductions in the programs for fossil fuels and fuel cells, as well as cutting spending on hydrogen power technology nearly in half. The agency would also eliminate two research programs at national laboratories, saving more than $45 million in 2012.

The department’s nuclear weapons program would get an increase of nearly $2 billion, to $11.8 billion, to replace aging facilities, extend the life of existing weapons and assure the safe storage of decommissioned warheads and materials.

The agency’s proposed budget would also eliminate $3.6 billion in tax breaks and other subsidies for oil, natural gas and coal to help finance the president’s other priorities. Mr. Obama has asked to eliminate these subsidies in his previous two budgets; Congress has refused to go along.

The Environmental Protection Agency, under heavy fire from Republicans in Congress for its plans to regulate greenhouse gases and other air pollutants, would suffer a $1.3 billion reduction in overall spending from 2010 levels, to $9 billion. Among the programs hardest hit would be the Great Lakes restoration initiative, grants for clean diesel engine development and money sent directly to states for drinking water and environmental cleanup projects.

The budget document repeats the president’s pledge to try to reduce emissions of heat-trapping gases by 17 percent below 2005 levels by 2020, but does not provide a detailed accounting of how to achieve it.

The environmental agency budget provides continued financing for the agency’s vehicle emissions and fuel economy programs, both in the near term and for the years 2017 and beyond.

source: NY Times


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