Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley
The Biden Administration released its budget proposal this week with an array of provisions that could affect our sector and the energy business more broadly. While Congress funds the government through the appropriations process, the president’s proposal shows the administration’s priorities and what policies they are likely to support. The president’s priorities may have extra weight this year because his party controls both branches of Congress.
As expected, President Biden’s budget calls for significant government spending on renewable and low carbon energy technologies and less for traditional oil and gas development. Biden’s plan for the Department of Energy includes increased funding for ARPA-E, a loan program for new technologies, to support electric vehicle charging and renewable technology development. The proposal also calls for creation of a similar agency focused specifically on climate research. This new agency would provide loan guarantees and other financial assistance to companies with new technologies in this area.
President Biden’s request includes $7.4 billion for the Office of Science and clean energy-focused research. Under the plan, the Office of Energy Efficiency and Renewable Energy would receive $4.7 billion, a 65% increase from current levels. This would allow the office to significantly expand research and development capacity to support renewable technologies.
This provision would increase funding for geothermal development to $132 million, while also boosting funding for wind and solar. We anticipate additional federal investment in geothermal development over the next three years. Council companies working on geothermal should connect with DOE to leverage opportunities.
A new program run through DOE to decarbonize federal buildings would also get $400 million. The Federal Energy Management Program, which has a mission to help agencies reach 2035 and 2050 carbon reduction goals, would receive an increase to $385 million.
As discussed in last week’s column, infrastructure modernization and security are expected to be top priorities for the Administration and Congress. The President’s budget includes $9.8 billion in civilian cybersecurity funding to improve federal defenses and add to the nation’s critical infrastructure protection. Included is $750 million for the federal government to respond to “lessons learned” from the breach of major software provider SolarWinds Inc.
DOE’s budget request also calls for moving the Strategic Petroleum Reserve (SPR) from the Office of Fossil Energy to the Office of Cybersecurity, Energy Security and Emergency Response in response to the disruption caused by the Colonial pipeline cyberattack.
President Biden’s budget proposal shows strong support for investments in carbon capture. The Administration has already proposed adding the words “Carbon Management” to DOE’s Office of Fossil Energy because carbon capture and storage (CCS) will be a key part of its focus. The proposed budget would allocate $890 million to the office, an 18.7% increase from 2021.
Programs receiving increases include CCS and natural gas technologies. The budget includes a $63 million line item for CDR technologies — technologies that remove carbon directly from the atmosphere. Including this line is significant because portions of the Democratic Party are pressuring the administration to abandon support for CCS and other carbon capturing technology in favor of no carbon alternatives. The president’s budget suggests a recognition that CCS technologies can play a major role in the long-term move towards a lower carbon future.
The Department of Energy is not the only agency seeing increases in funding for renewable energy development. The proposal calls for $11 million to boost the Bureau of Land Management’s resource management program for wind projects on public lands. It also includes a 60% increase in funding for the renewable energy office at the Bureau of Ocean Energy Management, which oversees offshore wind development. Traditional programs for onshore and offshore oil and gas development at Interior would receive $529 million.
The budget request includes $30 million to address remediation and reclamation for offshore oil and gas infrastructure, and $461.3 million to clean up oil and gas wells and abandoned mines. While this number is lower than many of the proposals in Congress, it’s still a significant request from the administration that’s likely to be increased by Congress. With both the administration and Congress showing support for a federal orphan well plugging program, prospects of such a program being funded are strong.
The Council Government Affairs team will continue to work with Congress to ensure that this program is structured in a way that allows our companies to participate and benefit from the program.
Now that the Administration’s budget has been released to Congress, we expect the appropriations committees in the House and Senate to craft their own proposals. We will continue to update Member Companies on these proposals going forward.
For more information on the Council’s advocacy efforts or to get involved, contact SVP Government Affairs & Counsel Tim Tarpley.
Tim Tarpley, SVP Government Affairs & Counsel, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Council’s newsletter, which highlights sector-specific issues, best practices, Council activities and more.