President Obama’s 2014 budget proposal would slash $4 billion in subsidies to fossils fuels while increasing support for renewable energy programs, electric vehicles, and energy efficiency measures.
“As we continue to pursue clean energy technologies that will support future economic growth, we should not devote scarce resources to subsidizing the use of fossil fuels produced by some of the largest, most profitable companies in the world,” reads the budget proposal. “That is why the Budget proposes to eliminate unnecessary fossil fuel subsidies that impede investment in clean energy sources and undermine efforts to address the threat of climate change.”
However, the president’s budget plan increases funding for various programs that promote green energy use, electric vehicles, and energy efficiency.
Obama promises $2.8 billion to the Office of Energy Efficiency and Renewable Energy for research and development to increase the use of clean energy technologies.
“The [EERE] [b]udget increases funding by 75 percent above 2012 levels for development and demonstration of the next generation of advanced vehicles and by 42 percent for the next generation of advanced biofuels and biorefineries,” reads the budget proposal. “It increases funding by 29 percent for innovative projects to make clean, renewable power, such as solar energy and off-shore wind, more easily integrated onto the electric grid and as affordable as electricity from conventional sources, without subsidies.”
“[The EERE] more than doubles funding for energy efficiency and advanced manufacturing activities to help reduce energy use and costs in commercial and residential buildings, in the industrial and business sectors, and in Federal buildings and fleets,” the budget continues. “These investments will support progress toward the President’s goal of cutting in half the energy wasted by our homes and businesses, doubling our energy productivity over them next 20 years.”
The budget also includes $615 million “to increase the use and decrease the costs of clean power from solar, wind, geothermal, and water energy.” During Obama’s first term, he came under fire for the high profile failures of government-backed renewable energy companies, such as Solyndra and Abound Solar.
Obama proposes investing “$575 million in cutting-edge vehicle technologies, $282 million in the next generation of advanced biofuels, and $2 billion of proposed mandatory funding for an Energy Security Trust to transition our cars and trucks off of oil.”
The DOE would get $28.4 billion in discretionary funds — an 8 percent increase from 2012 — to help the administration meet its clean energy goals, improve energy security, address the issue of climate change, and modernize the U.S. nuclear weapons systems.
President Obama has been at odds with the oil and gas industry over eliminating tax subsidies enjoyed by the industry. However, the oil and gas industry has argued that the “cost-recovery benefits” they receive aren’t actually subsidies.
“The oil and gas industry gets no subsidies, zero, nothing,” said Jack Gerard, president and CEO of the American Petroleum Institute. “We get cost-recovery benefits, much like other industries. You can go down the road of allowing economic activity, generating hundreds of billions to the government, or you can take the alternative route by trying to extract new revenue from industry by increasing their cost to do business.”
The Congressional Budget Office reported that tax benefits for renewable energy and energy efficiency make up three-quarters of more than $16 billion in energy-related tax subsidies the U.S. for 2013.
“Now months overdue, President Obama’s budget represents the administration’s desire to double down on bad energy policy,” said American Energy Alliance president Tom Pyle. “The same week that the U.S. Comptroller General identified scores of fragmented, duplicative and wasteful renewable energy programs, the Obama budget calls for even more spending on these and other initiatives, including permanent taxpayer-funded subsidies for century-old industries like wind and solar.”
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