A Supersized Increase for the Bloated Department of Energy Budget

Rolling Analysis, FY22 President's Skinny BudgetA Supersized Increase for the Bloated Department of Energy Budget

Energy & Natural Resources,  | Analysis
Apr 9, 2021  | 3 min read | Print Article

The FY22 budget request includes $46.1 billion for the Department of Energy (DOE), an increase of $4.3 billion over last year’s level. The desired destination for the additional funds seems to be targeted to “clean energy” research and development (R&D) and construction. Tradeoffs or offsets for the 10 percent increase for DOE are nowhere to be found. Given the recent growth of DOE’s spending – without noting any cuts to less effective DOE programs – the outline released today raises red (ink) flags for us.

In line with the Biden Administration’s recent infrastructure plan, the budget request for DOE is devoted to spending aimed at “reducing” greenhouse gas emissions as a climate strategy. The requested $4.3 billion increase for DOE would go to:

  • $1.9 billion – “Building Clean Energy Projects and Workforce Initiative”
  • $1.7 billion – “Clean Energy” R&D
    • This follows from the claim of a 27% increase for programs under the umbrella category for a total of $8 billion.
    • The funding would go to “advanced nuclear energy technologies, electric vehicles, green hydrogen, and even innovative approaches to air conditioning and refrigeration.”
  • $270 million –ARPA add-ons
    • The administration proposes to create a new Advanced Research Project Agency (ARPA) for climate and then fund both it and the current ARPA for Energy (ARPA-E) at $1 billion for FY22, of which $700 million would come through DOE. That’s roughly $270 million above the FY21 level for ARPA-E.
  • $374 – DOE Office of Science
    • Total FY22 funding request is $7.4 billion for the Office of Science, up from the $7.026 billion enacted in FY21.

The above plus-ups constitute $4.25 billion in new funding. The difference between the specified additions and the stated $4.3 billion is likely sprinkled over other DOE programs. But because the stated increases do not surpass the $4.3 billion in total additional spending for DOE, it seems the Biden Administration is choosing not to cut anything to offset its priorities.

To put the request in context, $46.1 billion for DOE would mean ballooning the agency’s budget by $10 billion, or 30%, in just two fiscal years. That’s quite a Trump-Biden tag team. In FY2020, Congress appropriated $35.7 billion for the agency. The programs where the administration is directing funding have already been the focus of enormous spending expansion in recent years. Over the five fiscal years from FY2017 to FY2021, spending on the DOE Office of Science grew by 30 percent, Office of Energy Efficiency and Renewable Energy grew by 37 percent, and Office of Nuclear Energy grew by a whopping 48%. Adding billions more to the budgets of these offices is a tacit statement that everything they’re currently supporting is worth funding, and that is far from the case.

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