President Donald Trump released his budget blueprint today, and his proposal for the Department of Energy is a breath of fresh air.
This proposal reflects the president’s priority of “[putting] America first by keeping more of America’s hard-earned tax dollars here at home.”
Opponents have pilloried the draft as anti-science, anti-clean energy, and even extreme—all of which lack merit. The reality is that the Department of Energy has gotten way out ahead of itself in recent years, inserting itself into policy areas and markets where it is not appropriate. This only distracts from the department’s core, appropriate mission.
The draft budget cuts many pet projects of both Democrats and Republicans. In particular, the request eliminates the Advanced Research Projects Agency-Energy program, the Title 17 Innovative Technology Loan Guarantee Program, and the Advanced Technology Vehicle Manufacturing Program.
The budget request also scales back funding for the applied energy research programs for all sources of energy, including fossil fuels, nuclear, and renewables.
The Heritage Foundation has long made the case for Congress and the administration to make such cuts. While narrow special interests are crying “bloody murder,” this draft budget reflects broader realities that must be addressed.
Addressing the Budget Crisis
The federal government is facing a massive budget crisis, yet many in Congress—who hold the power of the purse—have failed to make tough leadership decisions. Congress has too often opted to spend more while using the tax code to dole out special favors.
This is particularly true in the Department of Energy, where both parties have stuffed the budget with research and development programs that advance their preferred energy technologies.
For example, the Department of Energy’s science budget has ballooned since 1977 from $1.4 billion (inflation-adjusted) to $5.2 billion in 2014. It has grown to include programs for nearly every energy technology imaginable—biofuels, coal carbon capture and sequestration, renewables, small nuclear, batteries, and so on.
Downsizing the Department of Energy will not solve America’s massive budget problem, but it is an important piece of the overall picture. Hard cuts are necessary to scale back programs that are not proper functions of the federal government.
The Department of Energy dabbles in far more activity than it should. This distracts from legitimate government responsibilities and often puts the government in direct competition with the private sector.
The Department of Energy needs to reset its focus on key functions like maintaining the nuclear weapons complex, efficiently addressing environmental cleanup, and stewarding an appropriately sized national lab program.
The administration’s budget request rightly proposes cuts and terminations of offices and programs that, while perhaps doing work that has value, rightly belong in the private sector, the universities, and other nonprofits.
When the Department of Energy intervenes in energy markets through loan programs, research, development, and commercialization, it squashes entrepreneurs that do not receive government support. Both public and private investment dollars are drawn to favored projects that the Department of Energy anoints as political winners, and other potentially promising technologies lose out.
Aside from the fact that this distorts energy markets, government intervention in the energy economy is entirely unnecessary. Energy is a multi-trillion-dollar international market, and the U.S. is home to one of the world’s most attractive energy sectors.
The private sector is fully capable of funding research and development. According to the National Science Foundation, total research and development funding in the U.S. was $456.1 billion in 2013, and 65 percent of that came from the business sector. The federal government came in a distant second with $127.3 billion in research and development funding.
We constantly hear that the momentum green energy revolution is irreversible—that lower costs and market forces are going to drive more investment in renewable technologies. Here’s an opportunity to prove it.
When the federal government withdraws its artificial support and favoritism, the renewable technologies that survive will be the ones that are truly competitive with other sources of energy.
When it comes to fashioning a budget for the Department of Energy, Congress needs to confront fiscal and economic reality. That requires making some tough budgeting decisions and recognizing that government meddling in the private sector only squashes innovation, wastes taxpayer money, and distracts from the legitimate responsibilities of government.
In putting forth this Department of Energy budget request, the Trump administration has given Congress a great place to start.