Who needs another stimulus bill or legislation handing out taxpayer dollars for energy efficiency when they can be stuffed into the Cromnibus like a Christmas stocking at the end of the year?
The Department of Energy’s budget is much of the same: bureaucrats will be spending money they shouldn’t on activities the private sector should if they deem worthy. For instance, members are quick to highlight that in the $1.9 billion allocated for renewable energy and energy efficiency technologies, weatherization and advanced manufacturing efficiency programs are two that are “effective and proven.” If effective and proven means effective at wasting taxpayer money and proven means proven to crowd out private sector investment, then the federal government is spot on.
Whether government spending on efficiency improvements for energy-intensive industries or for weatherization projects actually saves money is irrelevant. A far more pertinent question is why such upgrades should be supported by taxpayer dollars. Families and businesses do not need incentives or rewards for energy-saving behavior, because when the savings outweigh the costs, their reward is reduced energy bills and more competitive prices for their products.
The new spending is also duplicative of thousands of state and local programs. The Energy Independence and Security Act (EISA) of 2007 has provisions for energy savings in federal state, local, and commercial industrial buildings as well as a green jobs program for energy efficiency and renewable energy workers. The Energy Efficiency and Conservation Block Grant (EFCBG) authorized by EISA provided $10 billion in taxpayer money over five years to states, cities and counties for efficiency and climate provisions. In a survey of 204 cities that received EFCBG grants, 87 percent spent money on efficiency retrofits to their respective federal buildings.
Additionally, the 2009 stimulus law allocated $32 billion for energy efficiency and retrofits, which included billions for weatherization projects, worker-training programs and federal, state and tribal building-efficiency improvements. On top of that, the Department of Energy (DOE) provides a list of all state initiatives that improve efficiency including targeted tax breaks, rebate programs, revolving loans, low-interest loans and regulations. The list comprises over 4,200 state initiatives with efficiency and renewable projects making up the large majority of the programs.
But the green funding is only part of the junk in the DOE budget. Congress is spending hundreds of millions of dollars on fossil energy and nuclear energy that again, attempt to force government-developed technologies into the marketplace. Apparently bureaucrats haven’t learned their lesson because this path has failed time and again.
One area where this lesson hasn’t been learned is with DOE’s fusion energy program. Despite President Obama’s suggestion to cut fusion research, Congress rejected it. Fusion technology has much potential to offer inexhaustible quantities of energy without the byproduct of spent nuclear fuel that results from nuclear fission—the way that conventional nuclear power plants produce electricity. While research on fusion should continue, the question is whether the federal government should be involved and to what extent. Currently, there are 63 public and private universities, 11 national laboratories (eight belong to DOE), several private companies (with large market caps) and 29 international institutions that have fusion or plasma physics programs. The basic science for fusion energy already exists, which is why several start-up companies are raising capital for their own fusion reactors. The DOE should remain involved, perhaps by continuing to participate in the international ITER program, an international effort to advance fusion, but more of the research should be driven by the private sector and Congress would’ve been wise to take the president up on his budget cut request.
Even when Congress made prudent cuts by eliminating unnecessary programs, they ruined any progress by increasing spending for other nonsensical programs. Congress cut the $6.6 million in DOE for coal technologies that use carbon capture and sequestration but under the rural electric loans, Congress authorized $2 billion in loan guarantees for power plants that use CCS technologies. One step forward, two steps back.
Political favoritism and subsidies come in many shapes and sizes and DOE spending plays a huge part in favoring specific energy sources and technologies. Congress missed another opportunity to remove that favoritism.
