NEW BUDGET IS GOOD TO NEW ENERGY

Obama Budget Erases Fossil Fuel Subsidies, Ramps Up Nuclear Spending; Clean Energy Comes Out a Winner
Tracy Morford, February 1, 2010 (SolveClimate)

…"[The Obama fiscal year 2011 federal budget]…would begin to tip the scales away from fossil fuels and toward greater government investment in clean energy…[by eliminating] several fossil fuel subsidies, a move expected to generate about $36 billion for the federal government over the next 10 years, and increase clean energy research and development spending by about $6 billion.

"To sweeten the deal for Republicans and fossil fuel-state Democrats, the president piled on loan guarantees for nuclear power and reiterated his support for a nuclear revival, more off-shore drilling, and “clean coal” technology, which was heavily funded through the recovery act last year. In addition, the new budget offers only a passing reference to a future cap-and-trade program, describing it as carbon neutral rather than assuming it would generate revenue."

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"Whether Congress can carry through on the president's recommendations remains to be seen…Obama pushed for similar cuts in fossil fuel subsidies last year and got nowhere in Congress…In September, [the President] made eliminating fossil fuel subsidies worldwide a top issue for the G20…[and] the G20 leaders agreed to phase out those subsidies in the medium term…U.S. leadership on subsidies now could encourage other countries with far higher fossil fuel incentives, some in the hundreds of billions annually, to follow suit…[E]nding fossil fuel subsidies in the emerging economies and developing countries could reduce global greenhouse gas emissions 10 percent by 2050 while increasing investment in cleaner energy.

"In the United States, the president's proposal to eliminate 12 tax breaks for oil, gas and coal would free up tens of billions of dollars. That could be a selling point for Congress this year with so much attention focused on the federal deficit and the president declaring a spending freeze…The fossil fuels industry has long benefited from federal subsidies [oil and gas started receiving subsidies in 1916 and coal in 1932]…"

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"…Clean energy is a big beneficiary of the president’s 2011 budget proposal…[It would] keep the country on track to double renewable energy output by 2012. The budget would provide loan guarantees and nearly $2.4 billion for energy efficiency and renewable energy programs, including significant investments in solar power ($302 million), biofuels and biomass ($220 million), advanced vehicle technology ($325 million) and energy efficiency building technologies ($231 million)…[as well as] $300 million increase in funding for ARPA-E, the disruptive technologies program tuned to energy innovation…

"The president also is proposing an additional $36 billion, for a total of$54 billion, in loan guarantees for nuclear energy development, an industry that several Republicans in Congress have been pushing to revive…The loan guarantees should be enough to build seven to 10 reactors, which would get the industry started again…[T]he U.S. has the potential to take the technological lead in such developments as small modular reactors and fast reactors that can burn down waste…[But President Obama ] said he believes clean energy will be the driver of the U.S. economy in the long-run…[He also said] it makes sense environmentally and economically for the U.S. to develop [“clean” coal] technology and export it to other countries…"