U.S. GOVERNMENT PUBLISHING OFFICE

30–321PDF WASHINGTON : 2019

AN OVERVIEW OF THE BUDGET PROPOSAL 

FOR THE DEPARTMENT OF ENERGY 

FOR FISCAL YEAR 2019 

HEARING 

BEFORE THE

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

MAY 9, 2018 

Serial No. 115–58 

Printed for the use of the Committee on Science, Space, and Technology 

( 

Available via the World Wide Web: http://science.house.gov 
(II) 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HON. LAMAR S. SMITH, Texas, Chair 

FRANK D. LUCAS, Oklahoma 

DANA ROHRABACHER, California 

MO BROOKS, Alabama 

RANDY HULTGREN, Illinois 

BILL POSEY, Florida 

THOMAS MASSIE, Kentucky 

RANDY K. WEBER, Texas 

STEPHEN KNIGHT, California 

BRIAN BABIN, Texas 

BARBARA COMSTOCK, Virginia 

BARRY LOUDERMILK, Georgia 

RALPH LEE ABRAHAM, Louisiana 

DANIEL WEBSTER, Florida 

JIM BANKS, Indiana 

ANDY BIGGS, Arizona 

ROGER W. MARSHALL, Kansas 

NEAL P. DUNN, Florida 

CLAY HIGGINS, Louisiana 

RALPH NORMAN, South Carolina 

EDDIE BERNICE JOHNSON, Texas 

ZOE LOFGREN, California 

DANIEL LIPINSKI, Illinois 

SUZANNE BONAMICI, Oregon 

AMI BERA, California 

ELIZABETH H. ESTY, Connecticut 

MARC A. VEASEY, Texas 

DONALD S. BEYER, JR., Virginia 

JACKY ROSEN, Nevada 

CONOR LAMB, Pennsylvania 

JERRY MCNERNEY, California 

ED PERLMUTTER, Colorado 

PAUL TONKO, New York 

BILL FOSTER, Illinois 

MARK TAKANO, California 

COLLEEN HANABUSA, Hawaii 

CHARLIE CRIST, Florida 
(III) 

C O N T E N T S 

May 9, 2018 

Page 

Witness List ............................................................................................................. 2 

Hearing Charter ...................................................................................................... 3 

Opening Statements 

Statement by Representative Lamar Smith, Chairman, Committee on Science, 

Space, and Technology, U.S. House of Representatives .................................... 4 

Written Statement ............................................................................................ 5 

Statement by Representative Eddie Bernice Johnson, Ranking Member, Committee on Science, Space, and Technology, U.S. House of Representatives .... 7 

Written Statement ............................................................................................ 9 

Witnesses: 

The Honorable Rick Perry, Secretary, Department of Energy 

Oral Statement ................................................................................................. 11 

Written Statement ............................................................................................ 13 

Discussion ................................................................................................................. 27 

Appendix I: Answers to Post-Hearing Questions 

The Honorable Rick Perry, Secretary, Department of Energy ............................ 140 

(1) 

AN OVERVIEW OF THE BUDGET PROPOSAL 

FOR THE DEPARTMENT OF ENERGY 

FOR FISCAL YEAR 2019 

WEDNESDAY, MAY 9, 2018 

HOUSE OF REPRESENTATIVES, COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, Washington, D.C. 

The Committee met, pursuant to call, at 9:04 a.m., in Room 2318 

of the Rayburn House Office Building, Hon. Lamar Smith [Chairman of the Committee] presiding. 
2 

LAMAR S. SMITH, le-~as 

CHAIRMAN 

~ongrcss of the tinitcd ~tatcs 

~ou.sc of 'Rcprcsrntatiocs COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

2321 RAYBURN HOUSE OFFICE 8U!LD1NG 

WASHINGTON, DC 20515-6301 

(2021225-6371 

www.science.house.gov 

Full Committee 

EDOlE 6ERN1CE JOHNSON, l971:as 

RANKING MEMBER 

An Overview of the Budget Proposal for the Department of 

Energy for Fiscal Year 2019 

Wednesday, May 9, 2018 

9:00a.m. 

2318 Rayburn House Office Building 

The Honorable Rick Perry, Secretary, Department ofEnergy 
3 

U.S. HOUSE OF REPRESENTATIVES 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HEARING CHARTER 

Wednesday, May 9, 2018 

TO: Members, Committee on Science, Space, and Teclmology 

FROM: Majority Staff, Committee on Science, Space, and Teclmology 

SUBJECT: Full committee hearing: "An Overview of the Budget Proposal for the Department of 

Energy for Fiscal Year 20 19" 

The Committee on Science, Space, and Teclmology will hold a hearing titled An Overview of the 

Budget Proposal for the Department of Energy for Fiscal Year 2019 on May 9, 2018 at 9:00a.m. in 

Room 2318 of the Rayburn House Office Building. 

Hearing Purpose: 

The purpose of this hearing is to examine the Department of Energy (DOE) fiscal year (FY) 

2019 budget request to Congress and the impact this proposed funding could have on civilian research, 

development, demonstration, and commercial application programs at the Department. This hearing will 

also address the Administration's plans for implementing the FY 2018 enacted appropriations and future 

funding priorities at the Department. 

Witness List 

• The Honorable Rick Perry, Secretary, Department of Energy 

Staff Contact 

For questions related to the hearing, please contact Hillary O'Brien of the Majority Staff at 202-

226-8984. 
4 

Chairman SMITH. The Committee on Science, Space, and Technology will come to order. 

Without objection, the Chair is authorized to declare recesses of 

the Committee at any time. 

Welcome to today’s hearing entitled ‘‘An Overview of the Budget 

Proposal for the Department of Energy for Fiscal Year 2019.’’ 

First of all, I’d like to thank Secretary Perry for being here 

today. And just as a reminder to everyone, this committee has jurisdiction over all of the Department of Energy’s civilian research 

and development. That’s $10 billion or about 1/3 of their budget. 

I do want to say to Members that the Secretary has to leave at 

10:30 sharp in order to get to a meeting at the White House, and 

so I’m going to do two things so that we’ll make sure we have plenty of time for Members to ask questions. One, I’m going to put my 

opening statement into the record and also would like to limit 

questioning to four minutes per person, and that way I think we’ll 

have time for everybody. 

At this point I’ll recognize the Ranking Member, the gentlewoman from Texas, for her opening statement. 

[The prepared statement of Chairman Smith follows:] 
5 

A~~ COMMITTEE ON 

v~ ~£!!~N:£~c!n SPACE, & TECHNOLOGY 

For Immediate Release 

May9, 2018 

Media Contacts: Thea McDonald, Brandon VerVelde 

(202) 225-6371 

Statement by Chairman Lamar Smith (R-Texas) 

An Overview of the Budget Proposal forthe Department of Energy for Fiscal Year 2019 

Chairman Smith: Today we welcome Secretary of Energy Rick Perry to testify about the 

Department of Energy's (DOE) fiscal year 2019 budget request and priorities. 

Before he joined the administration in 2017, Secretary Perry served as the 47th Governor of 

Texas and under his direction, the state of Texas became a national leader in energy 

innovation and economic growth. 

DOE is the leading federal sponsor of research in the physical sciences and a world leader in 

technological development and early stage scientific research. 

The department funds research across the scientific disciplines and is responsible for 

groundbreaking discoveries in computing, manufacturing and medicine. 

The House Science, Space. and Technology Committee has jurisdiction over $10 billion in 

spending at DOE-approximately one third of its overall budget-including all civilian 

research, development, demonstration and commercial application programs and the 17 

DOE National Laboratories. 

Our discussion with the secretary this morning will focus on programs within this broad 

jurisdiction, particularly the funding priorities in the president's fiscal year 2019 budget for the 

department. 

This hearing also provides committee members with the opportunity to discuss the fiscal year 

2018 enacted budget, which was signed into law earlier this year. 

The budget proposes only $75 million in U.S. contributions to the ITER project, less than what is 

required to maintain U.S. participation in this world-leading international research 

collaboration. 

The potential benefits from fusion research are incalculable, and commercial fusion will 

revolutionize the energy market and significantly reduce global emissions when it is 

developed. 

However, the administration has proposed increased investments in the research 

infrastructure that will be necessary to maintain America's leadership in science. 
6 

For example, the budget request includes an increase in funding for the Advanced Scientific 

Computing Research (ASCR) program. 

Within ASCR, a large portion of the requested fiscal year 2019 funding is designated for a 

DOE Exascale Computing Initiative. 

Developing an exascale system is critical to enabling scientific discovery, strengthening 

national security and promoting U.S. industrial competitiveness. As of November 2017, the 

United States hosts only four of the top ten fastest supercomputers in the world, none of 

which are in the top three. 

As other countries race to develop exascale systems of their own, DOE investment in 

exascale computing is essential to reestablish U.S. leadership in this field. 

DOE also must invest in next generation research infrastructure at its world-renowned 

national laboratories. 

In February, the House passed three committee bills that prioritize new investments and 

upgrades for the national labs. This includes funding for the Versatile Neutron Source, a fast 

test reactor that is critical for the development of advanced nuclear reactors. 

The president's fiscal year 2019 budget includes funding for six of the eight facilities and 

upgrades included in this legislation. 

While the funding levels do not reach the amounts authorized in the committee's legislation 

for fiscal year 2019, prioritizing these DOE user facilities in the budget request is an important 

first step for funding next generation science. 

The president's request includes increased reliance on the private sector to drive 

commercialization of energy technologies. This ensures the department will focus limited 

research funds on the early-stage research that the private sector cannot perform. 

We look forward to hearing from Secretary Perry today about how he plans to execute 

DOE's mission objectives in the upcoming fiscal year and beyond. Maintaining U.S. 

leadership in science will require a shared commitment to prioritize DOE research and 

support the next generation of energy technology. 

### 
7 

Ms. JOHNSON. Thank you very much, Mr. Chairman. 

Before I begin my statement, I want to welcome to the full Committee Mr. Conor Lamb, who is one of our newest elected. And this 

is a very dynamic Committee, as you will understand later and 

could be better. A lot of Texans on this committee. 

Thank you, Mr. Chairman, for holding the hearing, and thank 

you, Secretary Perry, for finally appearing before us today. And it’s 

good to see you again, our longest-serving Texas Governor. And I 

knew him every day of it. 

As you know, this committee has jurisdiction over the Department of Energy’s vitally important science and energy research and 

development activities, the laboratories and facilities, so I hope we 

can see you much more frequently because we need your input, and 

I look forward to working with you for years to come. 

In that spirit, I’d like to highlight some remarks you have made 

recently that I appreciate and wholeheartedly agree. In the address 

to the ARPA–E Energy Innovation Summit in March, you told the 

audience that you hoped they would, and I quote, ‘‘enjoy the many 

high-potential, high-impact technologies that ARPA–E has moved 

out of the lab and toward deployment.’’ That’s also one of the areas 

that I have great interest. 

You also announced that ARPA–E projects have attracted more than $2.6 billion in private-sector follow-up funding. Seventy-one 

projects have formed new companies, and 109 have gone on to partner with other government agencies to further their research. And 

you went on to say that—and again I quote—‘‘ARPA–E is one of 

the reasons DOE has had and is having such a profound impact on 

American lives.’’ 

Secretary Perry, you have been singing my song. And yet, as I’m 

sure you’re aware, you made these remarks just a few weeks after 

the Administration proposed to eliminate ARPA–E for the second 

year in a row. You’re also proposing a 70 percent cut to research 

carried out by DOE’s Office of Energy Efficiency and Renewable 

Energies, a 37 percent cut to the Offices of Electricity and Nuclear 

Energy, and 31 percent cut to fossil fuel energy R&D. 

And last but certainly not least, you are again proposing to eliminate DOE’s remarkably successful Loan Programs Office, which 

has been instrumental in launching the utility-scale PV industry, 

the construction of our first new nuclear reactors in 30 years and 

announced, and are now supporting the commercialization of new 

carbon capture and reuse technologies for fossil fuel fossil energy 

system. 

And so I have to ask, given your consistent praise for ARPA–E 

and DOE’s energy technology and innovation programs more broadly throughout your tenure as Secretary of Energy to date, how do 

we make sense of this budget request? The Department’s arguments about the value of these activities fall on deaf ears at OMB. 

Did you even push back on any of these ill-conceived draconian 

cuts at all? 

By all credible accounts, American industry will not fund the activities that are proposed for elimination no matter how much the 

Administration would like to think so. The Department could have 

heard from industry directly, but for the second year in a row, we 

heard from the Department officials that they did not formally en-
8 

gage with the private sector in deciding what activities we would 

cut—you would cut. And yet, that did not stop you from 

rationalizing these large cuts by simply stating that the federal 

role in our energy innovation pipeline should be strictly limited to 

support for so-called early-stage research without providing any 

clear definition for what that actually means. 

And then over and over again in this request you state that the 

private sector is better suited to carry out anything that you’re proposing to cut or eliminate entirely. But if you don’t have any process to engage with the private sector before proposing to cut energy 

efficiency programs by 84 percent and then you’ll have to excuse 

me if I find it difficult to take your justification for this budget request seriously. 

Now, to be clear, I’m not saying that every program the Department currently implements is perfect. We should continue to identify small reforms and debate our priorities. We must be thoughtful 

investors of taxpayers’ dollars. But I’m confident that investing 

robustly in our national laboratories and early and appropriately 

reviewed later-stage R&D is the right decision. 

With that, I’d like to thank you again for being here, and I look 

forward to a productive discussion this morning. 

I yield back, Mr. Chairman. 

[The prepared statement of Ms. Johnson follows:] 
9 

OPENING STATEMENT 

Ranking Member Eddie Bernice Johnson (D-TX) 

Committee on Science, Space, and Technology 

An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

Full Committee Hearing 

May9,2018 

Thank you, Mr. Chairman for holding this hearing, and thank you, Secretary Perry, for finally 

appearing before us today. It is good to see you again. As you know, this Committee has 

jurisdiction over all of the Department of Energy's vitally important science and energy research 

and development activities, laboratories, and facilities, so I hope we see you much more 

frequently from now on, and I look forward to working with you in the years to come. 

In that spirit, I would like to highlight some remarks you've made recently that I appreciate and 

wholeheartedly agree with. In your address to the ARPA-E Energy Innovation Summit in March, 

you told the audience that you hoped they would, and I quote, "enjoy the many high-potential, 

high-impact technologies that ARP A-E has moved out of the lab" and towards deployment". You 

also announced that "ARP A-E projects have attracted more than 2.6 billion dollars in private 

sector follow-on funding. 71 projects have formed new companies, and 109 have gone on to 

partner with other government agencies to further their research." And you went on to say that, 

and again I quote, "ARPA-E is one of the reasons DOE has had and is having such a profound 

impact on American lives." 

Secretary Perry, you've been singing my song. And yet, as I'm sure you are well aware, you 

made these remarks just a few weeks after the Administration proposed to eliminate ARPA -E for 

the second year in a row. You're also proposing a 70% cut to research carried out by DOE's 

Office of Energy Efficiency and Renewable Energy, a 37% cut to the Offices of Electricity and 

Nuclear Energy, and a 31% cut to fossil energy R&D. 

And last but certainly not least, you are again proposing to eliminate DOE's remarkably 

successful loan programs office, which has been instrumental in launching the utility-scale PV 

industry, the construction of our first new nuclear reactors in 30 years, and is now supporting the 

commercialization of new carbon capture and reuse technologies for fossil energy systems. 

So I have to ask, given your consistent praise for ARPA-E and DOE's energy technology and 

innovation programs more broadly throughout your tenure as the Secretary of Energy to date, 

how do we make sense of this budget request? Did the Department's arguments about the value 

of these activities fall on deaf ears at OMB, or did you even push back on these ill-conceived, 

draconian cuts at all? 

By all credible accounts, American industry will not fund the activities that are proposed for 

elimination, no matter how much the Administration would like to think so. The Department 

could have heard that from industry directly, but for the second year in a row, we heard from 

Department officials that they did not formally engage with the private sector in deciding what 

activities you would cut. And yet that did not stop you from rationalizing these large cuts by 
10 

simply stating that the federal role in our energy innovation pipeline should be strictly limited to 

support for so-called "early-stage" research, without providing any clear definition for what that 

actually means. And then, over and over again in this request, you state that the private sector is 

better suited to carry out anything that you are proposing to cut or eliminate entirely. But if you 

don't have any process to engage with the private sector before proposing to, say, cut energy 

efficiency programs by 84%, then you'll have to excuse me if I find it difficult to take your 

justifications for this budget request seriously. 

Now to be clear- I am not saying that every program the Department currently implements is 

perfect. We should continue to identify smart reforms and debate our priorities. We must be 

thoughtful investors of taxpayer dollars. But I am confident that investing robustly in our 

national laboratories in early and appropriately reviewed later-stage R&D is the right decision. 

With that, I would like to thank you again for being here, Mr. Secretary, and I look forward to a 

productive discussion this morning. I yield back. 
11 

Chairman SMITH. Thank you, Ms. Johnson. 

And I’ll introduce our only expert witness today, who is Rick 

Perry, the 14th Secretary of the United States Department of Energy. Secretary Perry attended Texas A&M University, where he 

was a member of the Corps of Cadets and one of A&M’s five Yell 

Leaders. After graduation, he was commissioned and served in the 

United States Air Force. He flew C–130 tactical airlifts in Europe 

and the Middle East until 1977 when he retired with the rank of 

Captain and returned to Texas to enter the cotton farming business 

with his father. 

Secretary Perry served in the Texas House of Representatives 

and then as Texas Commissioner of Agriculture. He was elected 

Lieutenant Governor of Texas in 1998 and assumed the governorship in December 2000 when then-Governor George Bush resigned 

to become President of the United States. 

In 2002, he was elected the 47th Governor of the Lone Star 

State. As the longest-serving Governor in Texas history, Secretary 

Perry oversaw the world’s 12th-largest economy from 2000 to 2015. 

Under his leadership, Texas set the pace for job creation, innovation, and population growth. During his tenure, Texas improved air 

quality while reducing emissions and carbon dioxide, sulfur dioxide, 

and nitrogen oxide. 

Besides guiding the Department of Energy, Secretary Perry also 

manages the 17 national laboratories, home to the country’s best 

scientists and engineers. 

I’ve had the privilege of working with Secretary Perry for over 

30 years and very much appreciate his testifying before the Science 

Committee today. We look forward to his insights on the future of 

American energy and innovation. 

Governor, welcome. We look forward to your comments. 

TESTIMONY OF HON. RICK PERRY, 

SECRETARY, DEPARTMENT OF ENERGY 

Secretary PERRY. Thank you, Mr. Chairman. 

Ranking Member Johnson, it’s a privilege to be in front of you 

again. She’s been mentoring me for nearly 30 years, so it’s good to 

be back with you and an honor to appear before all of you today 

to discuss the President’s 2019 budget request for the Department 

of Energy. 

And, as an aside, let me just say I really appreciate your understanding and your flexibility, the Cabinet meeting that’s been 

called, and so in respect to your time and for us to be as productive 

as we can, I’ll try to keep my remarks and my answers as brief as 

I can to save us time. 

This fiscal year 2019 $30.6 billion budget request will help the 

Department of Energy fulfill the key objectives that is accelerating 

exascale computing, fostering and furthering our scientific and 

technological mission, modernizing our nuclear arsenal, addressing 

our Cold War environmental legacy, advancing energy production, 

and better protecting our infrastructure. 

I’d like to briefly highlight the outstanding work. Mr. Foster, you 

represent one of the 17 national labs, and we had the opportunity 

to go out to your area and look at one of them. And not a greater 

I think cheerleader do we have, supporter of Fermi and Argonne 
12 

and the other 15 labs than you. These are incubators of innovation, 

and they are among America’s greatest treasures. 

And I also want to highlight the DOE’s supercomputing and 

other advanced technologies that are going to play a crucial role in 

confronting threats to our energy and national security infrastructure and to maintaining America’s leadership in science and medicine. 

There is no more appropriate place for this kind of massive computing power than in America’s lead science agency, and that’s the 

Department of Energy. And we also must regain leadership in the 

broader area of STEM, science, technology, engineering, and math. 

Through our STEM Rising initiative and related activities, our Department is promoting STEM programs, collaborating with students and teachers at every level of education. 

We also have a duty to advance our entire—I should—excuse me, 

our energy security by pursuing American energy independence because we are innovating more. We’re regulating less. We are producing more energy from more diverse sources more efficiently 

than anyone ever predicted a few short years ago. We’re now the 

number one combined oil and gas producing country in the world. 

I mean, that’s fascinating when you think 15 years ago—Mr. Rohrabacher, I mean, this is a stunning development. Just last year, we 

became a net exporter of natural gas. Today, we are exporting LNG 

to 27 countries on five continents. 

And thanks to that same innovation and that same drive, we are 

producing more energy cleaner than ever before. In fact, from 2005 

to 2017 our economy was growing, and we led the world in reducing carbon emissions, cutting them by 14 percent over that period 

of time. Clearly, we don’t have to choose between growing our economy and protecting our environment, but to achieve more complete 

energy security, we must ensure our energy actually gets delivered 

without interruption. And so my greatest focus as Energy Secretary 

is to ensure the reliability and resilience of our energy grid. 

So this year, we’ve requested a funding increase to strengthen 

cybersecurity, cyber defenses. We’re establishing a new office. It 

goes by the acronym of CESER, Office of Cybersecurity, Energy Security, and Emergency Response, CESER. In the end, it will be 

you, though, our elected representatives, who will decide how to 

best allocate the resources of our hardworking taxpayers. And I 

look forward to not only answering your questions but working 

with you, taking your advice as we go forward to make this agency 

even more efficient and better prepared for the future. 

Thank you, Mr. Chairman. 

[The prepared statement of Secretary Perry follows:] 
13 

Testimony of Secretary Rick Perry 

U.S. Department of Energy 

Before the 

U.S. House Committee on Science, Space, and Technology 

May9,2018 

Chairman Smith, Vice Chairman Lucas, Ranking Member Johnson, and Members 

of the Committee, it is an honor to appear before you today to discuss the 

President's FY 2019 Budget Request for the Department of Energy ("the 

Department" or "DOE"). 

It is a privilege and an honor to serve as the 14th Secretary of Energy. 

This budget represents a request to the American people through their 

representatives in Congress to fund the priorities of this Department. 

As such, it represents a commitment from all of us at DOE- that we will honor the 

trust of our citizens with stewardship, accountability and service. 

As Ronald Reagan reminded us in his First Inaugural, "We are a nation that has a 

government- not the other way around." 

Last year, I committed to modernize our nuclear weapons arsenal, protect our 

energy infrastructure from cyber and other attacks, achieve exascale computing, 

advance strong domestic energy production, and address obligations regarding 

nuclear waste management and the Nation's nuclear legacy. 

This FY 2019 $30.6 billion Budget Request for the Department of Energy 

("Budget") delivers on these commitments. 

The Department's world-leading science and technology enterprise generates the 

innovations to fulfill our mission. Through our 17 National Laboratories, we engage 

in cutting-edge research that expands the frontiers of scientific knowledge and 

generates new technologies to address our greatest challenges. 

Our National Laboratories are doing outstanding work in many areas, and they have 

a rich history of innovation that has bettered the lives of millions across the globe. 

For example, in FY 2017, the National Laboratories won 33 of the prestigious R&D 

100 Awards, including technologies regarding new materials, protecting our 

environment, incorporating renewable energy reliably on to our electric grid, and 

sophisticated cybersecurity tools. These are but a few examples of the work the 

National Laboratories have done just last year to push the boundaries of research, 
14 

development, and commercialization. I have had the opportunity to visit many of the 

Laboratories over the past year, and witness first-hand this outstanding work done by 

the dedicated workforce across the nation. 

I am especially proud of how our National Laboratories, in working with the 

Department of Veteran's Affairs and other federal agencies, universities, doctors, and 

researchers, are harnessing the power of our world-class supercomputers to improve 

the health of our veterans. This work is part of DOE's proud legacy in the 

biosciences, and as the initiator of the Human Genome Project. 

This Budget proposes over $12 billion in early stage research and development 

(R&D) that will focus the intellectual prowess of our scientists and engineers on the 

development of technologies that the ingenuity and capital of America's 

entrepreneurs and businesses can convert into commercial applications and products 

to improve the lives and security of all Americans. 

Restoring the Nuclear Security Enterprise 

The security of the United States and its allies is one of our primary DOE 

missions. 

The Budget fulfills the President's vision of rebuilding and restoring our Nation's 

security through robust investments in the Department's nuclear security mission. 

The Budget provides $15.1 billion for the National Nuclear Security 

Administration (NNSA), $2.2 billion or 16.7 percent above the FY 2017 enacted 

level. 

The Request makes necessary investments consistent with the February 2018 

Nuclear Posture Review (NPR) to modernize and rebuild a nuclear force and 

nuclear security enterprise; prevent, counter, and respond to nuclear 

proliferation and terrorism threats; and provide safe, reliable, and long-term 

nuclear propulsion to the Nation's Navy. 

The Budget includes $11.0 billion for Weapons Activities. This $1.8 billion 

increase over the FY 2017 enacted level supports maintaining the safety, security, 

and effectiveness of the nuclear stockpile; continuing the nuclear modernization 

program; and modernizing NNSA' s nuclear security infrastructure portfolio in 

alignment with the NPR. 

2 
15 

The Budget includes $1.9 billion for our ongoing Life Extension Programs (LEP) 

and Major Alterations, a $580 million increase. Funding for the W76-l warhead 

LEP supports the Navy and will keep the LEP on schedule and on budget to 

complete production in FY 2019. An increase of$178 million for the B61-12 

LEP will keep us on schedule to deliver the First Production Unit (FPU) in FY 

2020 to consolidate four variants of the B61 gravity bomb and improve the safety 

and security of the oldest weapon system in our nuclear arsenal. 

The Budget also supports the Air Force's Long-Range Stand-Off program through an 

increase of $435 million from FY 2017 enacted for the W80-4 LEP, to deliver the 

first production unit in FY 2025 of the cruise missile warhead. We also increase 

funding by $23 million for the W88 Alteration 370 to provide the scheduled first 

production unit in FY 2020. The request includes $53 million for a replacement for 

the W78, one of the oldest warheads in the stockpile, by 2030. 

The Budget for Weapons Activities also increases investments to modernize our 

nuclear infrastructure. For example, we include $703 million, a $128 million 

increase from FY 2017, for construction of the Uranium Processing Facility 

needed to replace deteriorating facilities at the Y-12 National Security Complex, 

as well as $27 million for a Tritium Production Capability at Savannah River and 

$19 million for a Lithium Production Capability at Y -12. 

The Weapons Activities Budget request also includes $163 million, a $68 million 

increase from FY 2017 enacted, for NNSA collaboration with the Office of Science 

on the development of exascale computer systems, which I address below. 

In the NNSA's Naval Reactors program, the Department has the ongoing 

responsibility to provide militarily effective nuclear propulsion plants for Navy 

vessels and to ensure their safe, reliable and long-lived operation. The Budget 

provides $1.8 billion to support the safe and reliable operation of the Navy's 

nuclear-powered fleet and continuation of the Columbia-class submarine program, 

refueling of the Land-Based Prototype reactor, and the Spent Fuel Handling 

Recapitalization Project. 

Today, over 45% of the Navy's major combatants are nuclear powered. DOE's role 

in propulsion plants, spent fuel handling, and recapitalization is critical to the 

Navy's ability to conduct its mission around the globe. 

The Budget also includes $1.9 billion for the Defense Nuclear Nonproliferation 

(DNN) program to reduce global threats from nuclear weapons. This critical 

national security program prevents the spread of nuclear and radiological materials, 

3 
16 

advances technologies that detect nuclear and radiological proliferation worldwide, 

and eliminates or secures inventories of surplus materials and infrastructure usable 

for nuclear weapons. 

The Budget continues termination activities for the Mixed Oxide Fuel 

Fabrication Facility project proposed in the FY 2018 Request, providing $220 

million for use toward an orderly and safe closure of the project. The Budget. 

also includes $59 million for the continuation of preliminary design and the 

initiation of long-lead procurements for the Surplus Plutonium Disposition 

project in support of the dilute and dispose strategy. 

The Budget provides $319 million for Nuclear Counterterrorism and Incident 

Response, $4 7 million above FY 20 17 enacted, to work domestically and around 

the world to improve our ability to respond to radiological or nuclear incidents, in 

conjunction with other agencies in a broader U.S. Government effort. 

Finally, the Budget includes $423 million for the federal workforce at the NNSA. 

This $35 million increase is essential to ensuring our world-class workforce of 

dedicated men and women can effectively oversee NNSA's critical national 

security missions. 

Securing against Cyber Threats 

Among the most critical missions at the Department is to develop science and 

technology that will ensure Americans have a resilient electric grid and energy 

infrastructure. Protecting this infrastructure means it has to be resilient and secure 

to defend against the evolving threat of cyber and other attacks. 

Unfortunately, cyberattacks pose an ever-increasing threat to the Nation's 

networks, data, facilities, and infrastructure. A reliable and resilient power grid is 

critical to U.S. economic competiveness and leadership, and to the safety and 

security of the nation. We need to understand the increasing and evolving natural 

and man-made threats and develop the tools to respond to those threats across our 

energy infrastructure. 

The Department is the sector-specific agency for the energy sector, and therefore, 

is the lead federal agency for the Emergency Support Function #12 that partners 

with the energy sector to ensure infrastructure security and resilience and to 

coordinate response and recovery. To elevate the Department's focus on energy 

infrastructure protection, the Budget Request splits the Office of Electricity 

Delivery and Energy Reliability, which totals $157 million, into two offices. Doing 

4 
17 

so will increase focus on grid reliability in the Office of Electricity Delivery (OE) 

and cybersecurity in the Office of Cybersecurity, Energy Security, and Emergency 

Response (CESER). 

CESER will allow more coordinated preparedness and response to emerging 

cyber and physical threats and natural disasters and support the Department's 

national security responsibilities. To work toward this critical objective, the 

Budget provides $96 million for the CESER office to develop tools needed to 

protect the U.S. energy sector against threats and hazards, mitigate the risks and 

the extent of damage from cyberattacks and other disruptive events, and improve 

resilience through the development of techniques for more rapid restoration of 

capabilities. 

CESER will work in an integrated manner with private industry, as well as 

Federal, State, and Local jurisdictions and other DOE offices, to enable industry to 

enhance the resilience (the ability to withstand and quickly recover from 

disruptions and maintain critical function) and security (the ability to protect 

system assets and critical functions from unauthorized and undesirable actors) of 

the U.S. energy infrastructure. 

Also, in FY 2019, the Office of Nuclear Energy's budget includes $5 million for 

the Nuclear Energy Enabling Technologies (NEET) Crosscutting Technology 

Development (CTD) program to expand its nuclear reactor cybersecurity research 

to support development of intrusion-resistant systems and practices. Research will 

be conducted in four areas: cyber risk management, secure architectures, modeling 

and simulation, and supply chain cyber security assurance. NEET -CTD will also 

perform simulated cyber-attacks against existing and next generation control 

system architectures to verify attack difficulty and control efficacy, methods, and 

metrics. 

Securing against cyber threats means we must also protect against threats to the 

Department's own infrastructure in science, technology, and nuclear security. This 

Budget takes major steps to safeguard DOE's enterprise-wide assets against cyber 

threats. The Budget provides funding to secure our own networks, and increases 

funding for the Chief Information Officer by $16 million from the FY 2017 enacted 

level to modernize infrastructure and improve cybersecurity across the DOE IT 

enterprise. Funding for cybersecurity in the National Nuclear Security 

Administration is increased to $185 million to enhance security for our nuclear 

security enterprise. In the Environmental Management program, we provide $43 

million for cybersecurity to ensure the security at seven cleanup sites. This Budget 

provides the resources we require to secure our systems and our infrastructure. 

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Improving Grid Resilience 

As we protect our energy infrastructure from cyber threats, we also must 

improve resilience and reliability of the nation's electricity system. The 

Budget provides $61 million for Electricity Delivery to support transmission 

system resource adequacy and generation diversity, move forward with new 

architecture approaches for the transmission and distribution system to 

enhance security and resilience, and advance energy storage. The Budget 

supports research and development at DOE's National Laboratories to develop 

technologies that strengthen, transform, and improve energy infrastructure so 

that consumers have access to reliable and secure sources of energy. 

Advancing Exascale and Quantum Computing 

As I discussed last year, the Department's leadership in developing and building the 

world's fastest computers has faced increasingly fierce global competition over the 

last decade. Maintaining the Nation's global primacy in high-performance 

computing is more critical than ever for our national security, our continuing role as 

a science and innovation leader, and our economic prosperity. 

The Budget includes $636 million to accelerate development of an exascale 

computing system, including $473 million in the Office of Science (Science) and 

$163 million in NNSA. This unprecedented investment, which is $376 million-or 

145 percent-above the FY 2017 enacted level, reflects the Department's plan to 

deliver an exascale machine for the Office of Science in 2021 and a second 

machine with a different architecture by 2022. 

To achieve these goals, the Science/NNSA partnership will focus on hardware and 

software technologies needed to produce an exascale system, and the critical DOE 

applications needed to use such a platform. This world-leading exascale program 

will bolster our national security by supporting the nuclear stockpile, while also 

supporting the next generation of scientific breakthroughs not possible with today's 

computing systems. 

We will not, however, satisfy our need for computing advances with the 

achievement of exascale computing alone. The FY 2019 Budget Request also 

includes $105 million in quantum computing to address the emerging urgency of 

building our competency and competitiveness in the developing area of quantum 

information science. This early-stage, fundamental research will concentrate on 

accelerating progress toward application of quantum computing techniques and 

quantum sensing to grand challenge science questions. 

6 
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Addressing the Imperative of Nuclear Waste Management 

As I mentioned to this Committee last year, we must move ahead in fulfilling the 

Federal Government's responsibility to dispose of the Nation's nuclear waste. The 

Budget includes $120 million, including $30 million in defense funds, to resume 

licensing for the nuclear waste repository at Yucca Mountain and implement a 

robust interim storage program. 

The Budget devotes $110 million for DOE to support the Nuclear 

Regulatory Commission (NRC) licensing proceeding for the nuclear waste 

repository at Yucca Mountain, including funding for technical, scientific, 

legal and other support. 

In addition, the Budget includes $10 million to implement a robust interim storage 

program to ensure earlier acceptance of spent nuclear fuel and accelerate removal 

from sites in 39 states across the country. Interim storage capability also adds 

flexibility to the system that will move materials from sites across the country to its 

ultimate disposition. 

By restarting the long-stalled licensing process for Yucca Mountain and 

committing to establishing interim storage capability for near-term acceptance of 

spent nuclear fuel, our Budget demonstrates the Administration's commitment to 

nuclear waste management and will help accelerate fulfillment of the Federal 

Government's obligations to address nuclear waste, enhance national security, and 

reduce future burdens on taxpayers. This also will increase public confidence in the 

safety and security of nuclear energy, thus helping nuclear energy to remain a 

significant contributor to the country's energy needs for generations to come. 

Fulfilling Legacy Cleanup Responsibilities 

The Budget also includes $6.6 billion for Environmental Management (EM), $182 

million above the FY 2017 enacted level, to address its responsibilities for the 

cleanup and disposition of excess facilities, radioactive waste, spent nuclear fuel, 

and other materials resulting from five decades of nuclear weapons development 

and production and Government-sponsored nuclear energy research. 

To date, EM has completed cleanup activities at 91 sites in 30 states and Puerto 

Rico, and is responsible for cleaning up the remaining 16 sites in 11 states-some 

of the most challenging sites in the cleanup portfolio. 

The Budget continues funding of $150 million to address specific high-risk 

contaminated excess facilities at the Y -12 National Security Complex and the 

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20 

Lawrence Livermore National Laboratory. 

The Budget includes $1.4 billion for the Office of River Protection at the Hanford 

Site, for continued work at the Hanford Tank Farms and to make progress on the 

Waste Treatment and Immobilization Plant. This budget will continue progress 

toward important cleanup required by the Consent Decree and Tri-Party Agreement 

to include a milestone to complete hot commissioning of the Low Activity Waste 

Facility by December 31, 2023. The Budget also includes $747 million to continue 

cleanup activities at Richland, including continued K-Area decontamination and 

decommissioning remediation and the K-West Basin sludge removal project. For 

Savannah River, the Budget provides $1.7 billion, $287 million above enacted FY 

2017, to support activities at the site. This will include the Liquid Tank Waste 

Management Program, completing commissioning and beginning operation of the 

Salt Waste Processing Facility, continued construction of the Saltstone Disposal 

Unit #7, a start to construction of the Saltstone Disposal Units #8/9, and support for 

facilities that receive and store nuclear materials. 

The Waste Isolation Pilot Plant (WIPP) is essential for the disposition oftransuranic 

defense-generated waste across the DOE complex, and the Budget provides $403 

million to safely continue waste emplacement at WIPP. The Budget Request will 

continue WIPP operations, including waste emplacements, shipments, and 

maintaining enhancements and improvements, and progress on critical infrastructure 

repair/replacement projects, including $84 million for the Safety Significant 

Confinement Ventilation System and $1 million for the Utility Shaft (formerly 

Exhaust Shaft). These steps will increase airflow in the WIPP underground for 

simultaneous mining and waste emplacement operations. 

The Budget includes $359 million to continue cleanup projects at the Idaho site, 

such as the Integrated Waste Treatment Unit, and to process, characterize, and 

package transuranic waste for disposal at offsite facilities. It provides $409 million 

for Oak Ridge to continue deactivation and demolition of remaining facilities at 

the East Tennessee Technology Park, continue preparation of Building 2026 to 

support processing of the remaining U-233 material at the Oak Ridge National 

Laboratory, and support construction activities for the Outfall 200 Mercury 

Treatment Facility at the Y-12 National Security Complex. 

For Portsmouth, the Budget includes $415 million, $33 million above FY 2017 

enacted, to continue progress on the deactivation and decommissioning project at 

the Portsmouth Gaseous Diffusion Plant, safe operation of the Depleted Uranium 

Hexafluoride Conversion Facility, and construction activities at the On-Site Waste 

Disposal facility. At Paducah, the Budget includes $270 million to continue 

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21 

ongoing environmental cleanup and depleted uranium hexafluoride (DUF6) 

conversion facility operations at the Paducah site. In addition, the FY 2019 Budget 

Request supports activities to continue the environmental remediation and further 

stabilize the gaseous diffusion plant. 

Together, these investments for Environmental Management will make significant 

progress in fulfilling our cleanup responsibilities while also starting to address our 

high-risk excess facilities at NNSA sites. 

Focusing Priorities on Core Missions 

The Budget continues to focus the Department's energy and science programs on 

early-stage research and development at our National Laboratories to advance 

American primacy in scientific and energy research in an efficient and costeffective manner. 

Also, in line with Administration priorities, the Budget terminates the Advanced 

Research Projects Agency-Energy, known as ARPA-E, and the Department's 

Loan Programs, while maintaining necessary federal staff to oversee existing 

awards and loans. Termination of these programs will save over $300 million in 

FY 2019 alone while significantly reducing financial risk to the taxpayer moving 

forward. 

Advancing AmeFican Energy Dominance 

The Budget requests $2.1 billion for the applied energy programs. Within these 

offices, the FY 2019 Budget focuses resources on early-stage, cutting-edge R&D 

conducted by the scientists and engineers at our 17 National Laboratories who 

continually develop the next great innovations that can transform society and foster 

American economic competitiveness and then on transitioning these breakthroughs 

to the private marketplace. 

The Budget consolidates programs focused on bringing technologies to the market 

in the Office of Technology Transitions, requesting a 23% increase from FY 2017. 

Through concerted effort and coordination with our labs, this will reduce costs to 

the taxpayer while at the same time providing a robust technology transfer program 

to transfer breakthroughs from the National Laboratories to the private sector. 

Nuclear Energy 

Nuclear energy provides 20 percent of our electricity baseload, and 60 percent of 

our carbon-free generated electricity. The Budget provides $757 million for the 

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Office of Nuclear Energy to continue innovating new and improved nuclear energy 

technologies. The budget focuses funding on early-stage research and development, 

such as the Nuclear Energy Enabling Technologies program, that enables the 

research and development of innovative and crosscutting nuclear energy 

technologies to resolve fundamental nuclear technology challenges. 

The FY 2019 Budget includes $163 million for the Reactor Concepts 

Research, Development and Demonstration program. Within this total, $128 

million is for early-stage R&D on advanced reactor technologies; including 

$54 million for a new Advanced Small Modular Reactor R&D subprogram. 

This new subprogram is a one-time effort to fund cost-shared early-stage 

design-related technical assistance and R&D, the results of which are intended 

to be widely applicable and employed by nuclear technology development 

vendors for the purpose of accelerating the development of their advanced 

SMR designs. The Budget also provides $15 million within Reactor Concepts 

for early-stage R&D and pre-conceptual design work related to Versatile 

Advanced Fast Test Reactor concept. 

Within the Fuel Cycle Research and Development program, the Budget provides 

$40 million to support the development of one or more light water reactor fuel 

concepts with significantly enhanced accident tolerance. 

Finally, the Budget for Nuclear Energy also supports robust safeguards and 

security funding of $136 million-a $7 million increase-for protection of our 

nuclear energy infrastructure and robust infrastructure investments at lNL 

facilities. 

Fossil Energy Research and Development 

The Fossil Energy Research and Development (FER&D) program advances 

transformative science and innovative technologies which enable the reliable, 

efficient, affordable, and environmentally sound use of fossil fuels. Fossil energy 

sources currently constitute over 81 percent of the country's total energy use and are 

critical for the nation's security, economic prosperity, and growth. The FY 2019 

Budget focuses $502 million on cutting-edge fossil energy research and development 

to secure. energy dominance, further our energy security, advance strong domestic 

energy production, and support America's coal industry through innovative clean 

coal technologies. 

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FER&D will support early-stage research in advanced technologies, such as materials, 

sensors, and processes, to expand the knowledge base upon which industry can improve 

the efficiency, flexibility, and resilience of the existing fleet of coal fired power plants. 

The request also focuses funding on early-stage research that enables the next generation 

of high efficiency and low emission coal fired power plants that can directly compete 

with other sources of electricity in the market and provide low cost reliable power 24/7. 

Funding is also provided to support competitive awards with industry, National 

Laboratories and academia focused on innovative early-stage R&D to improve the 

reliability, availability, efficiency, and environmental performance of advanced 

fossil-based power systems. For example, the Advanced Energy Systems 

subprogram will focus on the following six activities: 1) Advanced 

Combustion/Gasification Systems, 2) Advanced Turbines, 3) Solid Oxide Fuel 

Cells, 4) Advanced Sensors and Controls, 5) Power Generation Efficiency, and 6) 

Advanced Energy Materials, While the primary focus is on coal-based power 

systems, improvements to these technologies will result in spillover benefits that can 

reduce the cost of converting other carbon-based fuels, such as natural gas, biomass, 

or petroleum coke into power and other useful products in an environmentallysound manner. 

Energy Efficiency and Renewable Energy 

The Energy Efficiency and Renewable Energy budget funds $696 million to 

maintain America's leadership in transformative science and emerging 

energy technologies in sustainable transportation, renewable power, and 

energy efficiency. Knowledge generated by early-stage R&D enables U.S. 

industries, businesses and entrepreneurs to develop and deploy innovative 

energy technologies and gives them the competitive edge needed to excel in 

the rapidly changing global energy economy. 

Energy storage is an important area of focus, and the Request includes $36 million 

for battery R&D as well as $90 million for a new "Beyond Batteries" R&D 

initiative. As part of grid modernization efforts, "Beyond Batteries" considers 

energy storage holistically, and focuses on advances in controllable loads, hybrid 

systems, and new approaches to energy storage, which are essential to increasing the 

reliability and resiliency of our energy systems. 

Advances in these areas, as well as in battery technologies, will allow for loads to be 

combined with generation from all sources to optimize use of existing assets to 

provide grid services, and increase grid reliability. The FY 2019 also invests in 

advanced combustion engines, and new science and technology for developing 

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biofuels. The Budget funds research into the underpinnings of future generations of 

solar photovoltaic technology, into the design and manufacturing of low-specific 

power rotors for tall wind applications, and on wind energy grid integration and 

infrastructure challenges. 

The Budget also funds early-stage R&D for advanced manufacturing processes and 

materials technologies. These efforts, combined with the research that leverages the 

unique high-performance computing assets in the National Laboratories, can drive 

the breakthroughs that will promote economic growth and manufacturing jobs in the 

United States. 

Leading World-Class Scientific Research 

The Department of Energy is the Nation's largest Federal supporter of basic 

research in the physical sciences, and the President's FY 2019 Budget provides 

$5.4 billion for the Office of Science to continue and strengthen American 

leadership in scientific inquiry. By focusing funding on early-stage research, 

this Budget will ensure that the Department's National Laboratories continue to 

be the backbone of American science leadership by supporting cutting-edge 

basic research, and by building and operating the world's most advanced 

scientific user facilities-which will be used by over 22,000 researchers in FY 

2019. 

We provide $899 million for Advanced Scientific Computing Research, an increase 

of $252 million above the FY 2017 enacted level. This funding will continue 

supporting our world-class high-performance computers that make possible cuttingedge basic research, while devoting $472 million in the Office of Science to reflect 

the Department's plan to achieve of exascale computing by 2021. This focused 

effort will drive the innovations necessary for computing at exascale speeds, 

resulting in computing systems at unprecedented speeds at Argonne National 

Laboratory in 2021 and Oak Ridge National Laboratory in2022. The FY 2019 

Request also supports quantum computing R&D and core research in applied 

mathematics and computer science, and high-performance computer simulation and 

modeling. 

The Budget also provides $1.8 billion for Basic Energy Sciences, supporting core 

research activities in ultrafast chemistry and materials science and the Energy 

Frontier Research Centers. We will continue construction ofthe Linac Coherence 

Light Source-II at SLAC National Accelerator Laboratory and the Advanced Photon 

Source Upgrade at the Argonne National Laboratory, and initiate the Advanced Light 

Source Upgrade project at the Lawrence Berkeley National Laboratory, and the 

12 
25 

Linac Coherence Light Source-II High Energy project at SLAC. The operations of 

the light sources across the DOE science complex and supporting research across the 

Nation will ensure our continued world leadership in light sources and the science 

they make possible. 

The Budget also provides $770 million for High Energy Physics, including $113 

million for construction of the Long Baseline Neutrino Facility and Deep 

Underground Neutrino Experiment at Fermilab, $63 million above the enacted FY 

2017 level. We will continue to fund ongoing major items of equipment projects, 

and initiate three new projects at the Large Hadron Collider, the High Luminosity 

Large Hadron Collider Accelerator Project, and the High Luminosity ATLAS and 

CMS detector upgrade projects. By supporting the highest priority activities and 

projects identified by the U.S. high energy physics community, this program will 

continue cutting-edge pursuit to understand how the universe works at its most 

fundamental level. 

The Budget for the Office of Science provides $340 million for Fusion Energy 

Sciences, including $265 million for domestic research and fusion facilities and 

$75 million for the ITER project. For Nuclear Physics, the budget provides $600 

million to discover, explore, and understand nuclear matter, including $75 

million for continued construction ofthe Facility for Rare Isotope Beams and 

operations offac1lities, including the newly-upgraded Continuous Electron 

Beam Accelerator Facility. For Biological and Environmental Research, the 

Budget includes $500 million to support foundational genomic sciences, 

including the Bioenergy Research Centers and to focus on increasing the 

sensitivity and reducing the uncertainty of earth and environmental systems 

predictions. 

Strategic Petroleum Reserve 

In addition to our nuclear security responsibilities, the Department of Energy 

ensures the Nation's energy security. The Strategic Petroleum Reserve (SPR), one 

component of that effort, protects the U.S. economy from disruptions in critical 

petroleum supplies and meets the U.S. obligations under the International Energy 

Program. The Budget includes $175.1 million, $47.5 million below the FY 2017 

enacted level, to support the Reserve's operational readiness and drawdown 

capabilities. The Request also includes a drawdown and sale of up to I million 

barrels of crude oil from the SPR to provide funding for Congressionally-mandated 

crude oil sales and emergency drawdown operations. 

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26 

The Budget continues the sale of SPR oil for the Energy Security and Infrastructure 

Modernization Fund authorized by the Bipartisan Budget Act of 2015 to support an 

effective modernization program for the SPR. 

Finally, as the Northeast Gasoline Supply Reserve (NGSR) is operationally 

ineffective and not cost-efficient as a regional product reserve, the President's 

Budget proposes to liquidate the NGSR and sell its one million barrels of refined 

petroleum product in FY 2019, resulting in an estimated $77 million in receipts. 

Power Marketing Administrations 

Finally, the Budget includes $77 million for the Power Marketing Administrations 

(PMAs). The Budget proposes the sale of the transmission assets of the Western 

Area Power Administration (W AP A), the Bonneville Power Administration 

(BPA), and the Southwestern Power Administration (SWPA) and to reform the 

laws governing how the PMAs establish power rates to require the consideration of 

market based incentives, including whether rates are just and reasonable. The 

Budget also proposes to repeal the $3.25 billion borrowing authority for W AP A 

authorized by the American Recovery and Reinvestment Act of2009. 

Conclusion 

In conclusion, I reaffirm my commitment to ensure that the Department of Energy, 

along with its national laboratories, will continue to support the world's best 

enterprise of scientists and engineers who create innovations to drive American 

prosperity, security and competitiveness. The President's FY 2019 Budget Request 

for the Department of Energy positions us to take up that challenge and delivers on 

the high-priority investments I proposed to you last year. 

As we move forward over the coming weeks and months, I look forward to 

working with you and your colleagues in Congress on the specific programs 

mentioned in this testimony and throughout the Department. Congress has an 

important role in the path forward on spending decisions for the taxpayer, and I 

will, in turn, ensure DOE is run efficiently, effectively, and we accomplish our 

mission driven goals. Thank you, and I look forward to answering your questions. 

14 
27 

Chairman SMITH. Thank you, Mr. Secretary. And I’ll recognize 

myself for questions. 

My first question is this, that the Department of Energy is 

known for its development of technology from hydraulic fracturing 

to supercomputing to better batteries for electric cars. And, Mr. 

Secretary, I’m just wondering how important you think it is for 

technologies to try to be used to meet the challenge, for example, 

of climate change. 

Secretary PERRY. Yes, sir. Obviously, living in a world that has 

an environment that’s pleasant, that’s safe is important. We were 

able to do that in the State of Texas while I was the Governor. It’s 

one of the things that I’m really proud of. I mentioned that. You 

mentioned it in your remarks as well during that 14-year period of 

time we drove down nitrogen oxide levels by over 60 percent, SOx 

by over 50 percent, carbon dioxide by almost 20 percent, while we 

grew more than any other state in the nation. We added seven million people to the population roles of the State of Texas during that 

period of time, and I tell people, I say you know that means. That’s 

a lot of pickup trucks. So—— 

Chairman SMITH. That’s true. 

Secretary PERRY. And so that’s nonpoint source pollution. 

You’re—conventional wisdom was, well, you’re growing a lot of vehicles on the road. You got all that petrochemical stuff going on 

down there, ozone, and so you’ve got to be playing heck with your 

environment, but we didn’t. And we didn’t because we put thoughtful processes and we used technology and we allowed technology, 

and that’s where the national labs are going to continue to play a 

very important role to make sure that our, you know—not only is 

it about job creation but it’s about addressing issues that are important like our—the environment that we live in and making sure 

that the emissions—you know, CCU down in Houston where we 

built now the biggest, largest—I think at this time still—carbon 

capture utilization plant in the world. We’re sequestering I think 

over 95 percent—or not sequestering, we’re capturing over 95 percent of the carbon and then shipping it over using it for secondary 

recovery. 

These are the types of science that come out of the national labs 

that we can implement and see the type of results that I think you 

and the Members of this Committee are looking for. 

Chairman SMITH. Thank you. Mr. Secretary, also the Department is known for its development and research into fusion energy, 

which might well be the solution to a lot of our energy needs in 

the future. There’s an international effort called ITER, which may 

or may not be receiving the funding that they would like. And I’m 

just wondering how important you think that ITER effort is and 

how important it is that the Department of Energy continue to 

fund the development of fusion energy. 

Secretary PERRY. Yes. Mr. Chairman, I think fusion has the potential to really change the world, so taking that position but also 

looking at—from time to time, one of the things that I ran into over 

the last 18 months, as I became intimately knowledgeable about 

what the Department of Energy does, from time to time, we get involved with some areas where the expenditures are off the charts, 

and, you know, I’m not going to sit here and try to micro-analyze 
28 

this and say it’s all been because of bad management or what have 

you, but I mean the billions of dollars that we spend on the MOX 

facility out in South Carolina and some of our environmental management cleanups, I mean, there have been some, you know, I 

think questionable—historically questionable expenditures of dollars. ITER is one of those. And it was poorly managed. I mean, I 

don’t think anybody argues that there was some management decisions made at that big consortium that’s over in France. 

Now, with all of that said, I think the previous Administration 

and this Administration both stepped back from that and said wait 

a minute, let’s take a look at this and make sure that the dollars 

that we’re going to be expending there, we’re getting a good return 

on our investment. And that’s exactly what we’re doing, Mr. Chairman. We think that this—and they have new management. I’ve sat 

down with Mr. Bigot and we’ve discussed and I’m getting comfortable that the management of ITER is indeed back on track. 

They’re headed in the right direction. 

Chairman SMITH. Okay. 

Secretary PERRY. So, you know, I’m—one of the things I learned 

as an appropriator back in—as a boy in Texas and as the Governor 

was that I know how the appropriations process works, and I respect it greatly. 

Chairman SMITH. Okay. 

Secretary PERRY. And it’s the Members of this Committee and 

the appropriators that are going to decide about, you know—they 

expect me to be a good manager, and that’s what I’m going to tell 

you is I’m going to be as transparent and hardworking person to 

earn your trust from a management standpoint. 

Chairman SMITH. Okay. 

Secretary PERRY. And if you see fit that—I’m going to try to give 

you the best information I can, but you see fit that projects like 

ITER need to be funded, we will give good oversight and we will 

make them be as transparent as we can and try to get us the results—— 

Chairman SMITH. Okay. 

Secretary PERRY. —that this committee wants. 

Chairman SMITH. Mr. Secretary, thank you. My time is expired. 

The gentlewoman from Texas, the Ranking Member Ms. Johnson, is recognized for her questions. 

Ms. JOHNSON. Thank you very much, Mr. Chairman. 

Mr. Secretary, I think that—I appreciate your statement and 

agree with what you’ve said about the progress in Texas. We started from a very low ebb and we’ve gone a long ways, but we have 

a long, long ways to go. 

Secretary PERRY. Yes, ma’am. 

Ms. JOHNSON. I guess my focus will be on the budget because I 

think I heard you say that it’s really up to this committee to make 

those budget authorization decisions, but we do have a budget before us that came over that does not necessarily I think reflect 

some of the things that you have spoken about, but you also said 

you would take on most what we give you and to do the best you 

can to manage it. 

But how can you agree for the 70 percent cuts to the energy efficiency and renewable energy and support these cuts? Where do you 
29 

say—did you have input on this or what is your opinion on what 

we are facing as your budget before us, getting rid of ARPA–E and 

all that? Did you have any input on that, and where do you stand? 

Secretary PERRY. Ms. Johnson, one of the things that I think is 

important to understand on the global look at the EERE and energy efficiency and that side of the house, it’s important for us to 

recognize that some of the dollars that were expended over, let’s 

say, the last decade were in those early-stage dollars—appropriately from my perspective I might add—in some of the renewables, solar and wind. 

As those have matured—it’s kind of like when I sent my kids off 

to college, that was a costly process. And then they graduated and 

went on and went to work and I didn’t expend those dollars because they had basically matured. Some of the things that you’ve 

seen in that side of this budget, that’s the reason that it’s occurred 

and you’ve seen the reduction in spending because those have 

made maturations. 

And I don’t think it’s any indication at all that there’s a lack of 

support for our renewables at the Department. I mean, you know 

this, having lived in Dallas in Texas, no State developed more wind 

energy in the nation while I was the Governor than Texas. Matter 

of fact, we created more wind than all but five countries. So the 

commitment to the renewables is still there. I think as we—I don’t 

like to use the term ebb and flow, but as we transition away from 

forms of energy that are maturing into others, you’ll see these 

changes in the budget. 

Now, with that said, I think, you know, we can always disagree 

that the total amount of money is the right amount of money. 

That—again, I respect this process greatly. You and I might not 

agree upon a total dollar amount in a particular line item. 

Ms. JOHNSON. Thank you. My time is expired. 

Chairman SMITH. Thank you, Ms. Johnson. 

The gentleman from Oklahoma, Mr. Lucas, is recognized. 

Mr. LUCAS. Thank you, Mr. Chairman. 

And I do note the observation of the number of, you know, Texans on important leadership positions on this committee. And of 

course the Secretary, having been the Governor, we in Oklahoma 

sometimes are viewed as the buffer zone or the catalyst or whatever, but you can always tell a good Texan. If you refer to it as the 

Republic of Texas, they invariably smile, so you know they’re a real 

Texan. 

That said, Mr. Secretary, I was pleased to see in the fiscal year 

2019 budget a refocus on the biological and environmental research 

programs on genomic science, particularly the funding included for 

four recently renewed bioenergy research centers. These centers 

provide fundamental science for better understanding of plant and 

micro biosystems, allowing DOE researchers to work with industry 

to create the next generation of transformative bioenergy resources 

and bio-based products. Can you update the Committee on the research goals for the bio research centers? 

Secretary PERRY. Yes, sir. And, Mr. Chairman, if I may, I’d like 

to introduce Paul Dabbar. He’s our Assistant Secretary for 

Science—— 

Chairman SMITH. Okay. 
30 

Secretary PERRY. —and his shop, that’s where that is. And, Mr. 

Lucas, if I may—— 

Mr. LUCAS. Please. 

Secretary PERRY. —and just to remind you, we were a Republic 

once. 

Mr. LUCAS. Never a doubt in my mind. 

Secretary PERRY. So, Paul Dabbar. 

Mr. DABBAR. And as an Oklahoman, as the wing man here to the 

Air Force officer, I thank you for this question. 

The bioenergy area in the area of BER is very important. And 

actually, we’re focusing more resources on that. There’s a few areas 

that we find particularly interesting. As you know, the DOE labs 

were at the forefront, along with NIH, in terms of gene editing, 

gene sequencing. A lot of people don’t know that. And, as a result, 

we have a lot of history and a lot of future ahead of us. 

The first area that we’re working on is in the area of precision 

medicine. This is tailoring specific therapeutic treatments to the individual genomics for a particular person. This is a very exciting 

area in the area of biotech and the genomics area for the Department that we work on with other universities and the National Institutes of Health, which could have a monumental shift in where 

health goes in this country. 

Secondly, we continue to do a lot of work in the area of bioenergy, looking at different types of plants that can be used in a 

more efficient manner, more efficient on the land, more efficient 

with water to look at applications associated with that. 

Thirdly, we do a lot also in another area of plant genomics, 

which could be used for biotech drug manufacturing. Taking various genomic sequences that certain plants have and being able to 

use those to engineer a manufacturing of biotech drugs outside of 

having to have to grow the individual plants, it’s a very important 

area that Lawrence Berkeley in particular but a number of other 

of our labs that are leadership in, and so we’re very excited about 

those opportunities. 

Mr. LUCAS. Governor, just one final thought here in the time 

that I have remaining just from a geographical reference. I’m fond 

of the Republic of Texas. I live 50 miles down the river from Canadians, so you know my geographic location. 

Secretary PERRY. I know exactly where you are. 

Mr. LUCAS. And with that, I would like to just reinforce comments made by my colleagues about the importance I think of 

ARPA–E—— 

Secretary PERRY. Yes, sir. 

Mr. LUCAS. —how that leverages your technology abilities within 

the agency, with private industry, and the potential to do great 

things I think exists in ARPA–E. 

Mr. LUCAS. And with that, Mr. Chairman, I’ll yield back. 

Chairman SMITH. Thank you, Mr. Lucas. 

And the gentleman from California, Mr. Bera, is recognized. 

Mr. BERA. You caught me off-guard there. 

You know, thank you for appearing here, Mr. Secretary. You 

know, I know we’re in conversations with Saudi Arabia right now 

about their pursuit of nuclear energy and nuclear reactors. You 

know, obviously this would be a big deal. They’re planning on 
31 

spending about $80 billion to build 16 nuclear reactors over the 

next 25 years. And, you know, there obviously is some concern as 

we’re negotiating the 123 agreement. The Obama Administration 

was never able to quite get that agreement completed because of 

concern over the Saudis potentially using those reactors for nuclear 

enrichment. You know, if you could give us an update on how those 

negotiations are going. 

You know, in a recent 60 Minutes interview, the Saudi Crown 

Prince suggested that if Iran were to pursue nuclear weapons, they 

certainly would be within their rights to pursue nuclear weapons 

as well. And with yesterday’s pulling out of the Iran nuclear deal, 

certainly there’s the potential of that deal collapsing and the Iranians going back to their pursuit of nuclear ambitions. There’s real 

concern in a bipartisan way in this body, in a bicameral way, that 

we may enter into a 123 agreement that actually does allow the 

Saudis to pursue nuclear enrichment, and I’d be curious to get your 

perspective on that. 

Secretary PERRY. Yes, Mr. Bera, absolutely. And I think I 

share—along with I would suggest every one of the people on this 

committee—your concerns about an increase in proliferation of nuclear materials in the world. And that goes right to the point that 

we’ve tried to make with the Saudi Crown Prince in our conversations with him and with his team that not only will it send a powerful message if they go into an acceptable 123 with additional protocols but that we—that they do that because if they don’t, the 

message that’s sent—if the Chinese or the Russians, which don’t 

require any of that, not only does it send the message—I think the 

wrong message by the Kingdom of Saudi Arabia but it also sends 

the message to the United States that we’re no longer the leader 

in the world when it comes to civil nuclear power. 

Westinghouse, best reactor builder in the world—— 

Mr. BERA. Right. 

Secretary PERRY. —you know, they’ve had their challenges from 

a business standpoint, but it wasn’t because they’re not really good 

at building reactors. It’s because they got involved in the construction side of it, which is not their expertise. That’s been straightened out. They have been, you know, working their way, but the 

reactor side of this is very important, and that is the second point 

that we tried to really drive home to the Crown Prince was that 

if you want the best reactors in the world, you have to come to the 

United States and you have to use Westinghouse. 

So you have to be seen, you know, what the Kingdom is going 

to decide when it comes to who’s going to be allowed to build those, 

but I think for us as Americans, for us that truly believe in nonproliferation, that that is a powerful place for us to be and the goal 

that we need to go into every arrangement, that if the Kingdom of 

Saudi Arabia does not sign a 123 with us with additional protocols, 

the message will be clear to the rest of the world that the Kingdom 

is not as concerned about being leaders when it comes to this issue, 

and they’ll be losing a great opportunity to stand up and say the 

Kingdom of Saudi Arabia is a serious country when it comes to 

nonproliferation and to the development of nuclear power in the 

Middle East. 
32 

Mr. BERA. Great. Well, know that you’ve got bipartisan support—— 

Secretary PERRY. Yes, sir. Thank you. 

Mr. BERA. —with that 123 agreement. 

Chairman SMITH. Okay. Thank you, Mr. Bera. 

The gentleman from California, Mr. Rohrabacher, is recognized. 

Mr. ROHRABACHER. Thank you very much, Mr. Chairman. 

And, Mr. Secretary, you have every right to be proud that America is now energy-independent. This didn’t just happen. The fact is 

is that there have been political elements and disagreements that 

perhaps would have stopped fracking in its place, which is the new 

system that’s given us so much energy and given us natural gas, 

which has permitted that level of CO2 to go down, as you mentioned. 

Let me just note that, as you take over your new responsibilities 

here, one of the most important responsibilities is to say no when 

things are bad, don’t really—aren’t as good as other alternatives or 

more expensive. And I would hope that, as you get into your job, 

that you take that part of your job very seriously. 

Quite frankly, building any new nuclear power plants based on 

the current technology is I believe not only a waste but a danger 

to the American people and the people of the world. The old-style 

nuclear reactors, for example, the reactors you’re talking about that 

you want to sell to Saudi Arabia, do they produce plutonium? 

Secretary PERRY. Yes, sir. 

Mr. ROHRABACHER. They do. Okay. Why should we—when we 

are capable—we have the capabilities now of building a new generation of nuclear power that will not have plutonium left over, 

that can’t melt down, that in fact will use the nuclear waste from 

the current generation as fuel and eat it up rather than having to 

have it here threatening us, I would hope that you take a very 

close look at that. 

And instead of just giving your support to ongoing projects like 

ITER, which has not seen any progress towards giving us a real 

energy source but sure eats up a lot of money, and so I’d hope as 

you move forward in this job—and I know you take it seriously. I 

think Texans have a lot to be proud of what you did down in Texas. 

So I will refrain from talking about all the wind that Texas produces. We think—that’s enough. I won’t go down that road. 

But let me just ask you this, Mr. Secretary. Mr. Shimkus of Illinois has a piece of legislation aimed at trying to offer us at least 

moving forward with some kind of plan that will make it safer— 

right now, the nuclear energy that’s being stored throughout the 

country, including San Onofre, California is enormously expensive—— 

Secretary PERRY. Yes, sir. 

Mr. ROHRABACHER. —and I’m not sure that it’s safe to have all 

the nuclear energy stored like that. Shimkus would reopen the 

Yucca Mountain debate. Do we have a position on that? 

Secretary PERRY. Yes, sir. From the standpoint of there are 38 

States that have nuclear materials stored in less-than-satisfactory 

places, one of them being San Onofre. And I’ve got great concern 

about San Onofre being in the circle of fire. It’s exactly the same 

geological area that Fukushima was in. 
33 

Mr. ROHRABACHER. Right. Correct. 

Secretary PERRY. And so the idea that you could have a major 

earthquake and with that a tragic event, that whole inland empire, 

you take that off of the economic—and it could be disastrous to our 

country—— 

Mr. ROHRABACHER. Let me invite you to San Onofre and we 

could go through that together. 

Secretary PERRY. Yes, sir. 

Mr. ROHRABACHER. You haven’t been there? 

Secretary PERRY. I’ve driven by it a number of times but have 

never been in it, so I—— 

Mr. ROHRABACHER. That would be a good thing to do. And I appreciate your leadership. And, again, leadership quite often means 

saying no—— 

Secretary PERRY. Yes, sir. 

Mr. ROHRABACHER. —and that’s the hardest part of a job here in 

Washington is saying no to people who want money. 

Secretary PERRY. Yes, sir. 

Mr. ROHRABACHER. Thank you. 

Chairman SMITH. Thank you, Mr. Rohrabacher. 

The gentlewoman from Nevada, Ms. Rosen, is recognized. 

Ms. ROSEN. Well, thank you, Mr. Chairman, Ranking Member, 

and Secretary Perry for being here today. 

I want to also talk a little bit about Yucca Mountain because, for 

decades, Nevadans have been fighting our State being a dumping 

ground for the nation’s nuclear waste. Yucca Mountain is actually 

seismically active as well. But besides that, what I want to do is 

emphasize how Yucca Mountain is also a threat to our national security because the site is located on DOE’s national security site, 

which, as you know, provides DOE and other government agencies 

unique high-hazard testing environments. 

Yucca Mountain is also adjacent to the Nevada Test and Training Range, which is the largest air and ground military training 

space in the contiguous United States, and it is home to 75 percent 

of all the stateside Air Force live munitions. 

So according to Air Force Secretary Heather Wilson, there is no 

transportation route—I repeat that—no transportation route across 

the NTTR that would not impact testing and training even 

around—outside the range’s boundary that might create encroachment issues. 

So, Mr. Chairman, I ask unanimous consent to put—provide a 

map about Nevada sites into the record, please. 

Chairman SMITH. Without objection, it’ll be made a part of the 

record. 

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35 

Ms. ROSEN. Thank you. 

So, Mr. Perry, Secretary Perry, to your knowledge, has the DOE 

worked with the Department of Defense to address these concerns, 

the concerns of Air Force Secretary Heather Wilson on the Yucca 

Mountain project? 

Secretary PERRY. Ms. Rosen, we are in pretty constant contact 

with our colleagues over at DOD in a host of different areas, that 

certainly be one of them. I think the important aspect of this issue 

from a DOE standpoint and the Secretary of Energy standpoint is 

that I have a requirement of law to take this licensing process forward. In this budget that we’re talking about I think there’s $120 

million, 110 of which is on the licensing side and going forward 

with NERC to get an answer on the licensing side. 

So, you know, the debate about Yucca, whether it should be 

opened, it shouldn’t be opened, it’s been ongoing for a long time, 

I think $15 billion worth of time. But my responsibility here is not 

to tell you whether I’m for Yucca or against Yucca from the standpoint of it being a permanent facility. It’s to follow the law, and the 

law says that DOE will go forward with the licensing side of it. 

Ms. ROSEN. Might I suggest, Secretary Perry, that you work in 

collaboration with our Department of Defense to secure our Nevada 

Test and Training Range and secure our live munitions. 

And I’d like to reiterate what happens on the Nevada test site 

as far as testing of hazardous material, Yucca Mountain sits right 

there. It’s also 60 miles from rare earth mines in California and not 

too much further on from the San Andreas Fault. So we need to 

talk about those things. You can’t exist in a vacuum. I would urge 

you to work with the Department of Defense on discussing these 

highly important issues of national security. 

Secretary PERRY. We’ll continue to do that with the DOD. 

Ms. ROSEN. Thank you. I yield back. 

Chairman SMITH. Thank you, Ms. Rosen. 

The gentleman from Illinois, Mr. Hultgren, is recognized for 

questions. 

Mr. HULTGREN. Thank you, Mr. Chairman. 

Thank you, Mr. Secretary, grateful for your work and the team 

that you’ve put together. I want to commend you for the work 

you’ve been doing at DOE, and I keep hearing nothing but good 

things when I’m out talking to people back home in Illinois at 

Fermilab and Argonne, grateful again for your visit and Mr. 

Dabbar’s visit. I had a great time with him there touring and also 

excited that a group of the Committee are going to be going to visit 

Argonne and Fermi this weekend, so important for us to recognize 

the incredible value, the treasure that we have with our national 

labs and how important of a piece they are in this ecosystem of 

science, and so thank you. 

I’m also going to continue to work in a bipartisan fashion. We’ve 

got a National Labs Caucus here in the House to keep telling the 

story of the great work that’s happening throughout our lab system, and grateful again for your commitment and support there. 

I’ve heard discussions about the National Science and Technology 

Council establishing a Science Infrastructure Subcommittee. This 

is something this committee has worked on with a number of bills, 

including my legislation to authorize construction of the Long-Base-
36 

line Neutrino Facility, as well as upgrades to APS at Argonne and 

the Spallation Neutron Source at Oak Ridge. What are the current 

plans of this subcommittee? What are its goals, and will DOE and 

Office of Science have a prominent role? I believe our DOE user facilities are truly the crown jewel of our research ecosystem, and I 

hope we continue to work with you to see these facilities and researchers supported. 

Secretary PERRY. Mr. Chairman, for the best edification of the 

Committee, I’d like to ask Paul again. This is right in his shop, and 

again—— 

Mr. HULTGREN. That’s perfect. 

Secretary PERRY. —he can succinctly address this. 

Mr. HULTGREN. Great. Thanks. 

Mr. DABBAR. Congressman, thank you, and I look forward to seeing you and many other Members here at Argonne on Friday. 

I sit as a Co-Chair with Under Secretary Copan from NIST from 

Commerce on that particular committee that you asked about. We 

are—we have a number of subcommittees on different sorts of research and not just energy but many other things across the whole 

of the federal government in terms of the infrastructure, much of 

which is based on labs, much of which also has topics around labto-market topics that obviously both us and Under Secretary Copan 

are part of. And so there’s a number of different committees. I cochair that, and items such as infrastructure buildout and national 

labs such as at Fermi and Argonne are an important part. 

Mr. HULTGREN. Great. Thanks, Mr. Dabbar. 

Mr. Secretary, I commend your work at the Department trying 

to find ways to get bureaucratic barriers out of the way so that the 

private sector can be nimble bringing new ideas to the market. 

This House has passed legislation a number of times that would 

give lab directors the signature authority for technology transfer 

agreements and other cooperative research projects under $1 million. I had a brief discussion with the Under Secretary Dabbar 

about this provision, and I believe it to be in line with the Administration’s goals and in the Department. I wonder, would this provision concern you, and is this something we can work with you in 

trying to move forward on? 

Secretary PERRY. No, sir, it does not concern me. 

Mr. HULTGREN. Great. Again, thank you. We want to work with 

you. We’re grateful for your commitment to all of the work in the 

Energy Department but I especially have a great passion for our 

labs and want to thank you for your commitment there as well. 

With that, I’ll yield back the balance of my time. 

Secretary PERRY. We share that passion, sir. 

Mr. HULTGREN. Thank you. Thank you, Secretary. 

Chairman SMITH. Thank you, Mr. Hultgren. 

And the gentleman from Pennsylvania, Mr. Lamb, is recognized. 

Mr. LAMB. Good morning, Mr. Secretary. I was encouraged to 

hear you say in the opening that your greatest concern is the reliability and resiliency of the electrical grid. And I am very concerned about the challenges that the nuclear plants in my State of 

Pennsylvania now face. We have thousands of hardworking men 

and women who work at these plants every day, and they work 
37 

hard to ensure that we have the reliable source of energy, the carbon-free source of energy provided by these nuclear plants. 

You also noted the concerns of cyber attacks and cyber threats 

to the grid, and I know that some of these nuclear plants like Beaver Valley, which is close to where I live, are almost completely 

independent of the internet. I mean, the control room is amazing. 

It’s a large analog operation that would be resilient and reliable in 

the event of a cyber attack on the rest of our grid. 

So I know that your agency is considering the 202(c) request 

from FirstEnergy related to baseload capacity. I’m not going to ask 

you to weigh in on that this morning. I saw your comments that 

202(c) may not be the way we decide is the most appropriate or the 

most efficient way to address this, and you seem to believe that 

there are other options for the nuclear plants especially besides 

202(c). So I was hoping you could fill us in. What do you see as 

other options on this issue? 

Secretary PERRY. Well, I’m looking for a solution. I’m looking for 

results. I’m—you know, the process kind of wears me out from time 

to time. And my point is the 202(c) is an economic issue. I mean, 

that’s approaching this from an economic standpoint. And I think 

it’s really important for us as a country to look at this for what you 

and I think—understand it to really be about, and it’s about the 

national security of our country, of keeping our plants—all of 

them—online, being able to deliver energy no matter whether it’s 

a natural disaster that we might see from a polar vortex or it’s 

something more nefarious as a cyber attack from a terrorist state 

or some entity with bad intent for the United States. So we’re looking at a number of ways to approach this. I know that the Defense 

Production Act is one of those ways to address that, that we’re 

looking at very closely as well. 

So having resiliency and reliability in our grid is as important to 

our national security as anything that I can think of. And making 

sure that the plants that we have today supported reliably with the 

fuel, and obviously nuclear is one of those, and there are coal 

plants out there that fit into that. 

I might just make the statement of fact that by 2040 the world 

will still be relying upon 77 percent of fossil fuels of driving that 

energy that’s being produced. 

Mr. LAMB. And I’ve seen that as well, Mr. Secretary, so I just 

want you to know that you have a partner here in trying to find 

other solutions on this issue. I will be happy to help in any way, 

and my staff will certainly reach out. 

Along that line, we have seen States pass some legislation to try 

to address this issue and to try to correct some of the market failures, especially for nuclear plants. Do you support the efforts of 

States like New Jersey and Illinois and New York that have taken 

on this issue and tried to develop their own solutions to correct 

some of these failures? 

Secretary PERRY. Yes, well, I wrote a book about the Tenth 

Amendment, so I—it would be pretty hard-pressed for me not to 

say that I don’t believe that States have a very important role. 

I think there is another issue that’s a side issue but directly to 

this. Do States have the right to block a pipeline across their State 

that will have a national security implication or an economic impli-
38 

cation on individuals? And that’s a whole other issue, but it’s one 

I hope you and I can continue to have a conversation on. That— 

the fight there will be the State’s sovereign ability to make a decision versus the national security of this country. 

Mr. LAMB. Thank you. 

Secretary PERRY. Yes, sir. 

Chairman SMITH. Thank you, Mr. Lamb. 

The gentleman from Texas, Mr. Weber, is recognized. 

Mr. WEBER. Thank you. 

Welcome, Mr. Secretary. 

Secretary PERRY. Thank you. Howdy. 

Mr. WEBER. It’s great to see you. 

Secretary PERRY. Yes, sir. Thank you. 

Mr. WEBER. We didn’t tell these other States that Texas has our 

own grid primarily. 

Secretary PERRY. They probably already know that. 

Mr. WEBER. Yes, I’m just saying. 

The gentleman from California, Mr. Rohrabacher, will be—— 

Secretary PERRY. And we’d like to keep it that way. 

Mr. WEBER. Well, amen. Let’s talk about the Tenth Amendment. 

And your book is on sale, right, about the Tenth Amendment? 

Secretary PERRY. Very much on sale. 

Mr. WEBER. I’m just saying. 

I’m pleased to see the funding requested in the fiscal year 2019 

budget includes request for what’s in my bill, a versatile neutron 

source—Dana, you’ll like this—the next round of nuclear reactors. 

My act is called the Nuclear Energy Innovation Capabilities Act. It’s clear that we need progress on this facility. This is where we 

can build the next round of reactors to move more quickly if we’re 

going to meet the needs of the advanced reactor community. 

So, Secretary Perry, I guess I don’t know how much you’ve 

looked at that bill that we’ve got coming down the line. You know 

we’re getting outstripped by Russia in nuclear innovation, and 

that’s totally unacceptable. That’s totally unacceptable. So I’d like 

for you to think about it, commit if you would to the funding of the 

versatile test reactor, and make that a top priority in energy R&D. 

It looks like maybe Mr. Dabbar—— 

Secretary PERRY. Yes. 

Mr. WEBER. —has got some experience on that or no? 

Secretary PERRY. Paul, you want to just—he pitched you a soft 

one. 

Mr. DABBAR. I—yes. Yes, sir, having run a reactor in my younger 

days. This is an important area. We’ve asked for $148 million as 

part of the 2019 budget request around advanced reactors, in addition, SMR reactors as another area that we’re very much focused 

on. So this is an area that is important, and I’d also like to point 

out for Congressman Beyer in Virginia, we just also—that big 

CEBAF nuclear physics facility that we just inaugurated this last 

week that had a ribbon-cutting on shows another area of leadership 

in the nuclear area that we do for the country. 

Secretary PERRY. Yes, Mr. Weber, I think it’s—and this is exactly 

down the line that Mr. Rohrabacher was making reference to from 

the standpoint of the old way of building civil nuclear reactors, it 

would be like kind of the old way they built cars. I mean, the tech-
39 

nology has changed, and we need to take advantage of the technology. We need to be a part of the technology. 

We need to be—and I might—let me just finish it by saying the 

work that we’re doing at Idaho National Lab is right along this line 

with the advanced reactors, and the funding of the national labs 

directly affects your point here. 

Mr. WEBER. Sure. 

Secretary PERRY. And INL is one of the lead labs that’s dealing 

with advanced nuclear reactors. 

Mr. WEBER. Right. And back to Mr. Rohrabacher’s point, we’re 

going to need an advanced fuel, so there’s going to have to be R&D 

on fuel for this advanced reactor, which part of the discussion has 

been. We can take some of that old fuel, whether it’s military grade 

or whatever kind of fuel it is. We can actually investigate and do 

the research on how to use that fuel in some of these advanced reactors and maybe do away with some of the storage. As you know, 

South Texas Nuclear Project when I was a State Rep is—was in 

my district, and we watched them change fuel rods, so it’s very, 

very important. You mentioned the 38 States I think that stored 

onsite. That’s just not sustainable. So we would also ask you all to 

commit to not only the advanced nuclear reactors in the versatile 

neutron source but also to research on the fuel for that next round. 

Are you all able to do that? 

Secretary PERRY. Yes. Well, we have some work going on now 

with the high-assay—— 

Mr. WEBER. Right. 

Secretary PERRY. —low-enriched uranium that I think fits the 

description of what you’re talking about right there. 

Mr. WEBER. Sure. Well, I appreciate that. And, Mr. Dabbar, 

you’re going to be with us at the labs this weekend, I believe. 

Mr. DABBAR. Yes, sir. I look forward to being there with you. 

Mr. WEBER. Okay. Well, bring the Secretary with you. I’m just 

saying, but thank you, Mr. Secretary. 

Mr. Chairman, I yield back. 

Chairman SMITH. Okay. Thank you, Mr. Weber. 

The gentlewoman from Oregon, Ms. Bonamici, is recognized for 

questions. 

Ms. BONAMICI. Thank you, Mr. Chairman, and thank you, Mr. 

Secretary, for being here. 

Our nation has some of the best scientists, researchers, programmers, and engineers in the world, but without strong investments 

in research and development, we fall behind. We risk falling behind 

our international competitors. This proposed budget takes us in the 

wrong direction, and I want to align myself with my colleagues who 

have objected to eliminating ARPA–E. 

And I’m glad to see that the Administration is supporting increased advanced scientific computing research, but foreign governments like China are much more aggressive with their investment 

in exascale computing. We’re falling behind there. This could have 

serious implications for our U.S. leadership for national security, 

economic competitiveness, and innovation. 

I’m disappointed to see that the Department of Energy’s budget 

proposal would make significant cuts to the development of clean 

energy technologies, including water power. In my State of Oregon, 
40 

Oregon State University is a global leader in marine renewable energy research and development. The Pacific Marine Energy Center 

relies on federal investment from the Office of Energy Efficiency 

and Renewable Energy to establish the nation’s fully energetic ongrid wave energy test facility off the Oregon coast. This facility will 

be able to test wave energy converting—converters that harness 

energy of ocean waves and currents and turn it into electricity. Hydropower has been—has tremendous potential to become a major 

source of electricity for the United States and the world, and other 

countries are ahead of us here. 

Mr. Secretary, your budget proposal cuts funding for hydropower 

research and development by more than 57 percent, so do you 

agree that this country should be reducing our dependence on fossil 

fuels, and if so, why is the Department pursuing such severe cuts 

for federal energy research investment? 

Secretary PERRY. Yes, ma’am. Let me just say in a global way 

we do support the renewables. You know, we can argue about the 

level of funding, which is what the appropriations process is all 

about, but we are continuing to fund the program. And I think 

it’s—is it Oregon State? I’m—— 

Ms. BONAMICI. Oregon State University has the facility. 

Secretary PERRY. Yes, ma’am. Yes. That’s what I was thinking. 

It is Oregon State that is—and we’re still funding that, so the support is still there certainly. You know, the—again, the level of 

funding we can discuss, but—— 

Ms. BONAMICI. Well, Mr. Secretary, with a 57 percent cut, that’s 

serious, and as someone whose responsibility it is to advise the 

President, I hope that you will advise the President that this is a 

good investment to invest in renewable energy. 

And also, Mr. Secretary, I was glad to see you mention the importance of the labs. The National Energy Technology Laboratory 

is in Albany, Oregon, and they’re working to make our energy systems more efficient. They’re developing new sensors and controls 

for power plants in our grid, designing materials that can be used 

in extreme high-temperature environments, and advancing carbon 

capture technologies to reduce emissions. These efforts should be a 

model for the energy industry nationwide, but the fiscal year budget justification discussed a phased approach to consolidate the 

NETL location. What is the status? It’s unclear from your proposal. 

Does the Department intend to close the NETL Albany location, 

and could you please provide us with an update on the possible 

consolidation of the NETL sites? 

Secretary PERRY. So to answer your question directly, there are 

no NETL reorganization plans being discussed that would result in 

the closure of your facility out in Albany, Oregon. They are still 

continuing to focus on advanced power applications and material 

performance research, geospatial data analysis, so in a nutshell, no. 

Ms. BONAMICI. I appreciate that. Thank you. 

Secretary PERRY. Yes, ma’am. 

Ms. BONAMICI. I yield back, Mr. Chairman. 

Chairman SMITH. Thank you, Ms. Bonamici. 

And the gentleman from Florida, Mr. Posey, is recognized. 

Mr. POSEY. Thank you, Mr. Chairman. 

Mr. Secretary, thank you for being here today. 
41 

Based on the testimonies that we’ve heard in committee, I’m concerned about the uncertainty and the way we assess the greenhouse gas emissions associated with blending ethanol in our fuel 

supplies. As you know, being accurate in these estimates depends 

on integrating the lifecycle effects of land-use changes in the growing of corn and other feedstocks for ethanol production. We should 

add these emission impacts into the estimate to get a full and accurate picture. 

Looking at the full lifecycle, some scientists contend that the 

greenhouse gas implications of land-use changes outweigh any savings in burning ethanol compared to fossil fuels. A University of 

Michigan study was particularly enlightening about the lifecycle 

aspects of ethanol, and I ask, Mr. Chairman, unanimous consent to 

enter into the record a study conducted by Professor John DeCicco. 

Chairman SMITH. Without objection, that will be made a part of 

the record. 

[The information follows:] 
42 

Climatic Change (2016) 138:667-680 

DOl 10.1007/sl0584-016-17644 

Carbon balance effects of U.S. biofuel production and use 

John M. DeCicco 1$ • Danielle Yuqiao Liu1 • Joonghyeok Heo 1 • 

Rashmi Krishnan 1 • Angelika Kurthen 1 • Louise Wang 1 

Received: 5 May 2016/ Accepted: 24 July 2016/Published online: 25 August 2016 

©The Author(s) 2016. This article is published with open access at Springerlink.com 

Abstract The use of liquid biofuels has expanded over the past decade in response to policies 

such as the U.S. Renewable Fuel Standard (RFS) that promote their use for transportation. One 

rationale is the belief that biofuels are inherently carbon neutral, meaning tltat only productionrelated greenhouse gas (GHG) emissions need to be tallied when comparing them to fossil 

fuels. This assumption is embedded in the lifecycle analysis (LCA) modeling used to justify 

and administer such policies. LCA studies have often found that crop-based biofuels such as 

com ethanol and biodiesel offer at least modest net GHG reductions relative to petroleum 

fuels. Data over tlte period ofRFS expansion enable empirical assessment of net C02 emission 

effects. This analysis evaluates the direct carbon exchanges (both emissions and uptake) 

between the atmosphere and the U.S. vehicle-fuel system (motor vehicles and the physical 

supply chain for motor fuels) over 2005-2013. While U.S. biofuel use rose from 0.37 to 

1.34 EJ/yr over this period, additional carbon uptake on cropland was enough to offset only 

3 7 % of tlte biofuel~related biogenic C02 emissions. This result falsifies the assumption of a 

full offset made by LCA and other GHG accounting methods that assume biofuel carbon 

neutrality. Once estimates from the literature for process emissions and displacement effects 

including land-use change are considered, the conclusion is that U.S. biofuel use to date is 

associated witlt a net increase rather than a net decrease in C02 emissions. 

1 Introduction 

Production and consumption ofbiofuels, meaning biomass-based liquids such as biodiesel and 

ethanol, has grown steadily in the United States, from 4.2 billion gallons (0.37 EJ/yr) in 2005 

Electronic supplementary material The online version of this article (doi:l0.1007/sl0584-016-17644) 

contains supplementary material, which is available to authorized users. 

L8: John M. DeCicco 

DeCicco@umich.edu 

University of Michigan Energy Institute, Ann Arbor, MI 48109, USA 

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668 Climatic Change (2016) 138:667-680 

to 14.6 billion gallons (1.34 EJ/yr) in 2013 (EIA 2015; higher heating value basis). By 2013 

biofuels accounted for nearly 6 %of U.S. motor fuel energy consumption. The use ofbiofuels 

to displace petroleum has been driven by public policies, including subsidies but most 

compellingly by regulations, notably the U.S. Renewable Fuel Standard (RFS) and California 

Low-Carbon Fuel Standard (LCFS). Policy rationales include agribusiness income, energy 

security, oil depletion and greenhouse gas (GHG) mitigation (Brown and Brown 2012). 

The environmental justification rests on the assumption that, as renewable alternatives to 

fossil fuels, biofuels are inherently carbon neutral because the C02 released when they are 

burned is derived from C02 uptake during feedstock growth (NRC 20 II, 195). That convention is premised on globally complete carbon accounting in which biogenic emissions are not 

counted in energy sectors when carbon stock changes are counted in land-use sectors. This 

assumption has been used in cap-and-trade programs and carbon taxes as promulgated to date, 

which address only fossil-derived C02 emissions. However, errors arise when bioenergy is 

treated as carbon neutral in national and subnational policies, which do not impose globally 

coherent accounting that tracks all carbon stock changes (Searchinger et al. 2009). 

The carbon neutrality assumption is also embedded in lifecycle analysis (LCA), which 

traditionally focused only on production-related GHG emissions within a fuel's supply chain. 

Some LCA models omit biogenic C02 emissions from the accounting, as in the U.S. 

Environmental Protection Agency (EPA) analysis of the RFS (EPA 2010a). Others automatically credit biogenic C02 emissions during their calculations, as in GREET (20 11 ). GREET 

modeling fmds that com ethanol, the dominant fuel used to comply with the RFS, reduces 

GHG emissions by 20-50% compared to petroleum gasoline (Wang et al. 1997; Wang et al. 

2012). Such studies have justified biofuel promotion as a both a near- and long-term GHG 

reduction strategy (Greene 2004; Farrell eta!. 2006; CARB 2010) and justifY claims that the 

RFS has reduced GHG emissions to date (BIO 2015). 

Once the significance of carbon stock changes, notably those due to indirect land-use 

change (ILUC), was recognized, traditional (attributional) LCA models were supplemented by 

economic modeling of market effects. Such consequential LCA methods are used to compute 

"carbon intensity" (CI) metrics for the RFS and LCFS (EPA 2010a; CARB 2010). However, 

their results are highly uncertain, undermining confidence in GHG reduction benefits (NRC 

2011). These LCA methods now have a system boundary that spans the globe spatially and 

extends many years into the future temporally. Thus, although it was proposed as an objective 

way to compare fuels (DeCicco and Lynd 1997; Sperling and Yeh 2009; CARB 2010), LCA 

has become a form of scenario analysis. However, it is inferior in this regard to integrated 

assessment modeling (lAM), which uses a biogeochemically and economically coherent 

analytic framework that LCA lacks (Delucchi 2013; DeCicco 2015). Moreover, as a static 

framework, it fails to reflect the stock-and-flow dynamics that are fundamental to bioenergy 

systems (DeCicco 2013; Haberl 2013). Indeed, policy applications of LCA raise serious 

questions regarding the limitations of the method (Plevin eta!. 2014; McManus et at. 2015). 

Given such concerns, it is useful to analyze the situation by a method other than LCA. One 

can empirically examine the directocarbon exchanges associated with the displacement of 

petroleum fuels by biofuels since the RFS was passed in 2005, a period for which commercialscale data are available. Here, direct exchanges refer to carbon flows, including C02 uptake 

and C02 emissions as well as movements of material carbon, between a vehicle-fuel system 

and the atmosphere, other parts of the biosphere (notably the food system where biomass used 

to make biofuels would otherwise be consumed) and the geosphere. Material carbon refers to 

carbon bound in organic materials (whether recently fixed through photosynthesis or of fossil 

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Climatic Change (2016) 138:667--680 669 

origin) as opposed to C02• The system to be analyzed includes motor vehicles using fuels 

regulated by the RFS and the associated fuel supply chains. The latter include farms and oil 

wells, biorefmeries and petroleum refmeries, operations that transport feedstocks and distribute 

fuels, and operations that provide inputs such as fertilizer and purchased energy. 

Such a vehicle-fuel system is the subject of attributional LCA as traditionally conducted. It 

excludes indirect, market-mediated effects outside the system boundary, such as interactions 

with global commodity markets for energy and for the agricultural products that in turn affect 

land use. Evaluating market effects requires economic modeling, resulting in the very large 

and, practically speaking, irreducible uncertainties that bedevil discussions of biofuels and 

climate. A narrow analysis of direct carbon exchanges carmot provide a complete answer to the 

question of a biofuel's GHG emissions impact globally. However, it can assess the extent to 

which C02 uptake in feedstocks suffices to offset C02 emissions from fuel combustion, 

providing a bounding result relevant to the broader question. Although indirect effects can 

be negative (reducing net emissions) or positive, they are dominated by carbon stock releases 

due to land-use change (Fargione et a!. 2008; Searchinger et a!. 2008; Melillo et al. 2009). 

Therefore, evaluating the offset observable within the vehicle-fuel system provides an upper 

bound on the net overall offset. 

2 Method 

Evaluating the direct carbon exchanges associated with a given physical system is conceptually straightforward. DeCicco (2012) proposed an Annual Basis Carbon (ABC) accounting 

method that treats all carbon flows in a spatially and temporally explicit manner. Unlike LCA 

or other forms of carbon accounting used for climate policy to date, it does not treat biofuels as 

inherently carbon neutral. Instead, irtallies C02 emissions on the basis of chemistry in the 

specific locations where they occur. ABC accounting reflects the stock-and-flow nature of the 

carbon cycle, recognizing that changes in the atmospheric stock depend on both inflows and 

outflows, while LCA focuses only on inflows (GHGs discharged into the atmosphere). It also 

conforms to a methodology that calls for a consistent system boundary that encompasses both 

biofuel and fossil fuel pathways (Schlamadinger et a!. 1997). 

Figure l depicts the vehicle-fuel system to be analyzed in terms of material carbon 

flows, referring to carbon that originates in feedstocks and is utilized as fuel, emitted 

during processing or exits the system in some other material form. These flows 

exclude other system inputs and outputs (such as natural gas or other fuels used for 

process energy and their associated GHG emissions), whose molecular carbon is not 

part of a feedstock-to-fuel material pathway. Those purely process-related emissions 

are evaluated separately in a manner similar to that of LCA. The extent to which enduse C02 is balanced by C02 uptake is a function of the carbon exchanges shown in 

Fig. I. Flows along the top of the diagram are C02 exchanges between the system 

and the atmosphere; flows along the bottom are exchanges of material carbon, in 

either biomass leaving the system or crude oil entering it, with external systems. 

Cropland is within the system boundary and so ABC analysis counts carbon uptake 

regardless of the extent of biofuel use. Although the carbon in biomass output from 

the system is eventually emitted as C02 when feed and food products are consumed, 

these emissions occur outside the vehicle-fuel system and are mediated by complex 

displacement effects, as described later. 

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670 Climatic Change (2016} 138:667 68\) 

Material carbon t1ows 

to the substitution of a 

biofuel lbr a tbssil fuel 

2.1 Evaluating carbon uptake 

food BiOOilil$1:1 fOIII>il 

lll!d f!!MI Copt«<uda ReiiOUfl::l!l> 

MArEI':IAI.. CARBON IN COMMODITY MARKETS 

The net amount of carbon taken up by is net primary production (NPP), which for 

annual crops ends up in one of several A significant portion ends up in the harvest and 

is removed from the cropland. A portion may accumulate as soil organic carbon (SOC). Some 

may be lost as organic matter carried by !ann runoff or blown from the field by the wind, and 

some may be oxidized by fire or other non-biological process. A large portion decomposes or 

is consumed by organisms on the land itsell: comprising local heterotrophic respiration (Rt,). Net ecosystem production (NEP) is the di!lerence between NPP and ~' and it 

represents the net downward !low of COz !rom the atmosphere in terrestrial ecosystems 

(Lovett et al. 2006). NEP is not necessarily the same as ongoing carbon accumulation on 

land; rather, it is the portion of NPP that becomes material carbon available for local 

scquJ.:~stmtion or other disposition. 

For a biofuel to provide a net n,'l:luction in C02 emissions, the production of its f.:,'Cdstock 

must cl1ect a gain in NEP (DtCicco 2013). In other words, it is not sutncient tbrthc fi-"L>dstock 

to have merely rcmovt.>d carbon from the atmosphere. Rather, there must be an increase the 

rate of carbon removal, a test written as: 

d(NEP)/dt 0 (I) 

This condition fonnalizes the (2010) insight about "the need lor additional 

carbon." It can be cvaluat.:,>d over a period of time calculating: 

.:.lNEP (2) 

where t, is a time index (year). 

For this analysis, we estima!t' NEP over 2005~20!3 and evaluate ANEP both annually and 

cumulatively over the period crop data from the U.S. Department of Agriculture 

{USDA). From Lovett ct aL (2006): 

NEP 

Here, H is the carbon harvest, that is. the mass ofthc carbon embodied in the crops harvest.:,'!~ . 

.:.lSOC is the change in soil organic carbon on the cropland; E, is carbon rcmovt>d !rom the 

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Climatic Change (2016) 138:667-680 671 

land by runoff, leaching or wind; and Ox is carbon oxidized non-biologically, e.g., through fire. 

As explained in the appendix, for annual cropland Ex and Ox are small enough to omit and 

.C.SOC does not differ significantly from zero. We therefore assume NEP :::; H and estimate 

annual changes in net carbon uptake as: 

(4) 

where 

H~, carbon harvest of crop "i" at time "t" (a given year), and 

Hi,t-l carbon harvest of crop "i" at time "t-1" (the prior year). 

Because harvest data reflect yield gains, increases in carbon uptake due to agricultural 

intensification are reflected in these estimates of NEP. 

2.2 Other material carbon flows 

Regarding the other flows depicted in Fig. 1, end-use C02 emissions from motor vehicles are 

readily computed from fuel consumption data. For biofuels at commercial scale to date, the 

only significant biogenic process emission is the C02 during ethanol fermentation. Biofuel 

coproducts are calculated using biorefming yield factors. The carbon exported to food and feed 

markets is computed by subtracting the coproduct carbon plus fuel end-use and biogenic 

process C02 emissions from the carbon harvest. The fossil carbon input is computed from an 

average well-to-pump processing factor for crude oil to gasoline and diesel fuel. 

2.3 Other processing emissions and displacement effects 

In addition to the C02 released through processing or combustion of material carbon, other 

GHGs are directly released from the system as a result of energy use and other processes 

within the respective fuel supply chains. These emissions are commonly modeled by 

attributional LCA and for our purposes there is no need to analyze them independently. We 

use parameters from EPA (20 I Ob) to make this part of the analysis consistent with EPA's RFS 

analysis [Al(a)]. 1 

Changes in flows of material carbon across the system boundary result in changes in the 

amount of carbon available to the rest of the economy nationally and internationally, causing 

market-mediated effects of varying sign and magnitude (Hertel et a!. 2010). Because they 

require economic modeling based on limited data, the net impact of such displacement effects 

is highly uncertain. They include product and co-product substitution, changes in food and 

feed consumption, agricultural intensification (yield gain) and expansion (land-use change), 

and petroleum market rebound. 

We do not evaluate these displacements but rather cite previously published estimates to put 

our vehicle-fuel system results in perspective. Overall, displacement effects increase the GHG 

releases from biofuel use at least for several decades (Melillo et al. 2009; Mullins et a!. 20 II; 

Mosnieretal. 2013; Chen et al. 2014; among others). Plevin eta!. (2015) show that the carbon 

releases due to ILUC, which can dominate displacement effects, are most likely to be quite 

large and very unlikely to be negligible. The net GHG emissions estimate obtained through our 

' See specified appendix section in the supplemental infonnation. 

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Climatic Change (20!6) 138:667~680 

circumscribed ABC analysis thcrelbrc provides a lower bound for the overall ( din."Ct plus 

indirect) GHG tmissions impact of c1<isting biofucl systems. 

3 Analysis 

This St'Ction has three main pan.s. The first evaluates the material carbon balance lor the 

v~·hicle-lhcl system to estimate !hi.' biogenic carbon offset, comprising the paper's main result 

The second and third parts address GHG emissions related to fuel processing and displacement 

effects, respectively. 

3.1 Material carbon balance 

We calculate vehicle end-use C02 emissions fi1el carbon content data from EPA (20 I Ob) 

and fuel cnnsumption data from EIA ( 20 !5). 2 shows the n:sulting estimates in T gCiyr 

(carbon rather than C02 mass basis; I Tg= g). The rate at which motor fuel carbon !lows 

into the air dt."Ciincd by 23 or 5 !Tom 455 to 432 2005-2013, due to the 

2008 n.-cession and vehicle efficiency [A l( c)]. However, the biotucl portion of tailpipe 

COc emissions rose from 6.5 TgCiyr in 2005 to 24.1 TgC/yr in 2013. In 2013. biofuels 

accounted for 5.8 % of motor fuel ent"fgy end-usc and 5.6 of tailpipe C02 emissions, up 

from a 1.4% shan: in 2005. 

The otht"f component of emissions occurs during ethanol fermentation, which 

yields one mole ofC01 per mole ofC2H50H produc<.-d. This release reached 10.2 in 

2013. Combined with biotlrcl end-use C02 emissions, the overall increase in motor tuelrclated biogenic emissions was 25 In policy-oriented carbon accounting to date, these 

biogenic emissions arc tn.'!lted as carbon neutraL In ABC accounting, how much they arc 

actually "neutralized" (off.">Ct) by in carbon uptake is a question to be addrt:ssed. 

3.1.1 Carbon uptake on cropland 

To estimate CO~ uptake on cropland we used Annual Crop Production (ACP) data from the 

National Agricultural Statistical Service (NASS; USDA 20!5), including plant~'<! area. harvested area, average yield and production by crop. For tractability, the analysis was limited to 

crops that covered at least 95 %of U.S. cropland according to the USDA Cropland Data Layer 

Fig. 2 Direct carbon emissions 

from U.S. motor fuel use. 200(} , 

201•t Source: derived !rom E!A 

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FOSSIL FUEL 

300+-~~~~-r-r~~~~~~F-~~ 

2000 2005 2010 201S 
48 

Climatic Change (2016) 138:067 MO 673 

in 2013. We did not attempt to estimate overseas c:arbon uptake lor the small portion ofbioluel 

!hat was imported, which averaged 5 %of U.S. biofuel consumption over 2005··13 [A l(I)J. 

Uptake was calculated by multiplying crop production by !he fraction of carbon in e-.ach crop 

from composition data adjusted tor moisture content [A2). As shown in Fig. 3, net C02 uptake 

rose trom 195 to 215 over 2005--2013. These estirnak'S ofNEP reflect the downward 

flow of carbon from the atmosphere into the part of the biosphere occupied by U.S. cropland. 

Carbon uptake is dominak'li by com, which has the largest planted area and a higher yield 

than other crops. The carbon harvest from com alone rose by 25 over !he analysis 

period due to a 17 % increase in planted area and a 7 increase in yield. The com-soy rotation 

is the most extensive U.S. farming practice and soybeans arc second to com basis in planted 

area. However, soybean yields average less !han one-third those of com by volume and only 

about 25 % !hose of com on a carbon basis. With inerea'it.>s of 6% in planted area and 2 % in 

yield, soybeans saw a c:arbon harvest gain of2 TgCJyr. Nearly all other U.S. field crops saw 

!heir planted areas decline over the period. Sorghum was an exct.j)lion; however, its yield fell 

and so il> harvest did not change signilicanlly. Among other crops, only wheat had a 

mea.sur<~ble gain in carbon harvest, but only 0.3 T~;,,>·Ciyr. Collectively, harvests !ell ll1r all 

other major crops, mainly because of smaller planted an2a, netting out to an agb>regate carbon 

harvest increase of20 TgC/yr (about 10 %) over 2005-2013. 

3.1.2 The carhon 

l11e observed increases in carbon harvest provide estimates of the incrcast'S in NEP over the 

analysis period. Being smaller than the 25 TgC/yr increase in biogenic COz emissions 

associated with biofuel use, it is not enough to fully otl~>el those emissions. Because cropland 

NEP varies annually with economically-driven crop planting decisions 1md weather-dependent 

harvest outcomes, the ov<lf'idl oll5ct is estimated by comparing cumulative gains in NEP to 

cumulative biogenic emissions. These calculations are given in Table l. 

The first section of the table shows 6NEP (first differences of the annual 

carbon harvest values shown in Fig. 1md the gains in NEP and biogenic emissions relative to 

2005. Because NEP is a flow is the derivative of a !low and has as 

its unit Being based on harvest data, lhe annual 6NEP can be positive (a gain in uptake) or 

negative (e.g., due to a poor growing season). As shown in the table, !he aggregate harvest as 

measured on a carbon basis tell in 2006, mt'llning that the flow rate of C01 !rom the 

Com 

2005 2011 

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674 Climatic Change (2016) 138:667--{)80 

Table l Biogenic carllon emissions compared to net gains in carbon uptake 

Annual changes 2006 2007 2008 2009 2010 2011 2012 2013 

Ll.NEP (TgC yr-2

) -ll.5 22.5 -2.3 10.3 -7.2 -10.2 -13.3 31.5 

Net NEP gain (TgC yr-1

) -11.5 11.0 8.7 19.0 11.8 1.6 -11.7 19.8 

Biogenic emissions (") 3.7 7.2 13.6 16.7 20.8 22.5 22.5 24.7 

Cumulative effects (running sum, TgC) 

Additional C uptake -11.5 -0.5 8.2 27.2 39.0 40.6 28.9 48.7 

Biogenic emissions 3.7 11.0 24.5 41.2 62.0 84.5 107.1 131.8 

Net carbon emissions 15.2 11.5 16.3 14.0 23.0 43.9 78.2 83.1 

Percent offset -308% -5% 33% 66% 63% 48% 27% 37% 

atmosphere to cropland declined, giving a negative value for L'.NEP that year. It jumped in 

2007 due to a better growing season but also because notably more com was planted that year. 

The annual variability ofNEP is reflected in the changing sign of L'.NEP throughout the period. 

Integrating L'.NEP gives the net change in the rate of carbon uptake since the base year 

(2005), as shown by the "Net NEP gain" row in Table l. By 2013, the net gain in NEP was 

nearly 20 TgC/yr, as can be seen in Fig. 3. To determine cumulative additional C02 removal 

from the atmosphere, we integrate again by taking the running sum of the annual gain in NEP. 

As the integral of a mass flow rate, the resulting values have units of mass (TgC, i.e., millions 

of metric tons). These results for additional C02 removal are shown as "Additional C uptake" 

in the cumulative effects section of the table and plotted as the green line in Fig. 4. 

Similar calculations are performed for the biogenic C02 emissions. As shown in Table 1, 

biogenic emissions increase annually because biofuel production rose steadily over the 2005-

2013 period. The cumulative amount of biogenic C02 that entered the atmosphere is obtained 

by integrating this flow, yielding the values plotted in black in Fig. 4. By the end of the period, 

cumulative biogenic emissions reach 132 TgC. Cumulative net uptake, which reflects the 

additional amount of carbon removed from the atmosphere by the cropland beyond what was 

removed in the base year, sums to 49 TgC. The difference between the biogenic carbon 

emitted and the additional carbon uptake is shown in Fig. 4 as the carbon neutrality "gap," 

which reaches 83 TgC by 2013. This value reflects the extent to which biogenic emissions 

exceeded additional carbon uptake over the analysis period. 

Fig. 4 Cumulative carllon emitted 

by U.S. biofue1 use compared to 

cumulative additional carbon 

uptake on cropland 

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c 

0 

-e 

.. 

u 

·~ :; 

E 

u " 

50 

25 

0 

-25 

2005 2007 2009 2011 2013 2015 
50 

Climatk Change (20!6) Ll8:667-{>RO 675 

The last line of Table l compares cumulative carbon uptake and biogenic emissions in 

percentage terms, indicating that the additional uptake was enough to o!Tset only 3 7 % of the 

increase in biogenic emissions from 2005 to 2013. This n:sult shows that full carbon neutrality 

(a 100% ofl'set) fails Ibr renewable fuel use in the UnitL'd States over this pt.'liod. I! also shows 

how the extent of oflset depends on the growing season. Because harvests fell in 2006 

comparL'd to 2005 (wh~'!l the RFS was passed), the percent otl'set is very negative in 2006 

and docs not hL>come positive until 2008. The cumulative oflsct reaches a high of 66 % of 

cumulative biogenic emissions in 2009 hclbre Jailing Although suhst"quent years of data 

arc nccdt'd to make a longcr-tenn estimate, evt'!l if biofuel production levels olT it seems 

unlikely that the cumulative o!Tset would reach I 00 anytime soon. 

Estimates of the material carbon flows defined in ! can he used to construct a carbon mass 

balance for the vehicle-fuel system, showing inputs by source and outputs according to their 

disposition [A l(b)]. Tht-sc balances, which exclude non-material-carbon process emissions. 

are depicted in Fig. 5. 

The carbon harvest is either output from the system as food and teed or relined into 

biofuel. Some carbon is emitted as CO~ during biorefining and petroleum refining. In 

biorclining, the primary coproduct is distiller's grain, which is supplied for usc as animal 

Iced [A l(c)]. For pt~roleum relining, the process C02 emissions estimate assumes a wellto-tank energy efficiency of 81.7 % 

In Fig. 5, the sum of input carbon !lows matches the sum of the output !lows each 

year. The total rate of carbon !low through the system fell from 745 in 2005 to 

715 TgC/yr in 2013, largely due to lower motor fuel demand. Although all of the 

biogenic carbon emitted comes from NEP (the gross carbon harvest), the gain in NEP 

over 2005··2013 docs not produce enough additional carbon to cover the sum of that 

which substitutes for fossil carbon in motor fuel plus what gets released during processBecause the increase in carbon harvest is less than the decrease in fossil carbon 

input, fuel demand is met at the expense of carbon supplied to the !bod and feed system. 

Thus, Fig. ret1ects how ABC accounting respects conservation of mass (carbon), in 

contrast to LCA. which does not ensure conservation of mass bt-cause it fails to properly 

assess carbon uptake. 

(a) 2005 

Fig. 5 Material carbnn t1ows through the U.S. vehicle-fuel system (TgCiyr) 

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676 Climatic Change (2016) 138:667-680 

3.2 Process. GHG emissions 

In addition to fuel-related material carbon emissions, GHGs are emitted from feedstock and fuel 

processing operations. These emissions are the traditional focus ofLCA and there is no need to revisit 

their estimation here. For comparison purposes, we use process emission factors from EPA (20 I Ob ). 

Adding process emissions to material C02 emissions yields total net GHG emissions from the 

vehicle-fuel system, which dropped by 38 TgC/yr from 2005 to 2013, i.e., by about 10% ofbase 

year emissions (calculations given in appendix Table A2). This drop is explained by a combination 

of greater carbon uptake (tallied as negative emissions), lower petroleum input and lower overall 

fuel demand. GHG emissions from fuel processing increase due to the greater amounts of energy 

and other inputs needed for producing biofuels compared to petroleum fuels. As seen in Fig. 5, 

there was a loss of biomass carbon output from the system. Therefore, although the system's net 

GHG emissions fell, the decrease is only partly from a gain in carbon uptake tied to biofuel use. In 

gross terms, the 20 TgC/yr increase in NEP explains just over half of the 38 TgC/yr GHG 

reduction, but that is before considering other important effects such as reduced fuel demand. 

3.3 Displacement effects 

Changes in flows of material carbon across the system boundary change the amount of carbon 

available to the rest of the economy nationally and internationally. Many effects are indirect, as 

changes in supply and demand cause changes in price that affect petroleum fuels, grains and 

other farm products as well as their coproducts, substitutes and other items, affecting GHG 

emissions the associated markets. These effects include: 

Substitution of agricultural products (including co-products) 

Deprivation of agricultural products (reduced feed and food consumption) 

Intensification of agriculture (increased yield) 

Expansion of agriculture (direct and indirect land-use change) 

Petroleum market rebound (higher demand in non-regulated fuel markets) 

Substitution, deprivation and intensification decrease net GHG emissions due to biofuel use 

while expansion and rebound effects increase net emissions. Because it involves a release of 

carbon stocks, agricultural expansion can have a very large impact. The other effects involve 

marginal changes but have magnitudes significant relative to the direct impacts of the vehiclefuel system. Modeling displacement effects is beyond the scope of this study and so we use 

estimates from the literature, acknowledging their very high uncertainty due to market 

behavior, differences in modeling methods and data limitations. 

Substitution effects are captured by EPA's RFS analysis and so are reflected in the process 

emissions estimates (Table A2). Evaluating deprivation effects is a new area of research; they may 

be on the order of one-third of biogenic end-use emissions (Searchinger et a!. 20 15). Agricultural 

intensification on U.S. cropland is reflected in the harvest data and so are reflected in our carbon 

uptake results; we did not attempt to estimate intensification internationally. Petroleum market 

rebound can amount to as much as one-half of the petroleum fuel displaced by biofuel, raising C02 

emissions in other markets (Chen eta!. 20 14 ). The net impact of these interactions is highly uncertain 

and so it is difficult to ascertain whether their combined effect is either positive or negative. 

The displacement effects that clearly increase biofuel-related carbon emissions are direct 

and indirect land-use change (DLUC and ILUC). For the RFS, EPA projected no significant 

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Climatic Change (20 16) 138:667-680 677 

DLUC-induced release of carbon stocks and a small gain in soil carbon by 2022. Nevertheless, 

the available evidence does not support a gain in soil carbon to date {A4}. For DLUC, Lark 

eta!. (2015) examined the 2008-12 subset of our 2005--13 analysis period and estimated a 

cumulative release of 36 TgC associated with the biofuel-related expansion of U.S. cropland 

[A5(a)]. 

For ILUC, EPA's RFS analysis amortizes carbon stock releases over a 30-year future time 

horizon. For ABC analysis, releases are counted in the years when they occur, and so we 

summed the EPA (20 1 Oc) projections of ILUC-induced C02 releases each year over 2005-

2013, implying a cumulative 433 TgC release over the 8-year period [AS(b)). Although any 

such projection is highly uncertain, the DLUC and ILUC releases clearly overwhelm the 

changes in direct vehicle-fuel systems emissions. 

4 Discussion 

These results demonstrate the value of going back to basics for addressing the C02 effects of 

biofuel use. ABC accounting focuses on the terms for which the best data are available and 

which can be evaluated with minimal reliance on assumptions. The analysis is therefore 

narrow in scope and does not attempt to quantify the overall GHG impact of biofuels 

production and use. ABC accounting does not replace LCA, but it does call LCA results into 

question, underscoring warnings about the method's ability to mislead (Plevin eta!. 2014). 

Because ABC accounting does not generate a lifecycle metric such as a CI value, its results 

cannot be directly compared to LCA results. Moreover, ABC accounting is sensitive to system 

dynamics, in contrast to LCA's treatment of a system as static over a defmed lifecycle. 

Nevertheless, the fmding of a 37 % offset of biogenic emissions over the period analyzed 

rather than the 100% offset assumed in LCA highlights the discrepancy. For example, take a 

typical attributional LCA result claiming that com ethanol is 44 % less carbon intensive than 

petroleum gasoline (Wang eta!. 2012). Using a 37 %offset of biogenic emissions instead of a 

100% offset would imply that com ethanol is 27% more carbon intensive than gasoline even 

before considering land-use change [Al(g)]. Of course, this ABC result is for a specific period 

of time and so makes no claim to offer a general characterization of com ethanol. The method 

thereby respects the fact that the seemingly simple question of comparing the carbon intensity 

of one fuel to another is an ill-posed question empirically. 

The differences between ABC accounting and LCA are more profound than numerical 

comparisons can reveal. One fundamental distinction is that the ABC approach treats biofuels 

as part of a dynamic stock-and-flow system. This differs from LCA, in which biofuel use is 

modeled as a static system, i.e., one presumed to be in equilibrium with the atmosphere in 

terms of its material carbon flow, that is compared to a distinct system involving the flow of 

fossil carbon into the atmosphere. A related difference is ABC accounting's explicit evaluation 

of additiona1ity by tracking changes in carbon uptake (NEP) when feedstocks are sourced. 

Although it does not address leakage, which would require global modeling, ABC accounting clearly delineates C02 flows between the vehicle-fuel system and the atmosphere 

from flows of material carbon with external markets. It thereby respects conservation of mass, 

which LCA-based fuel comparisons do not. This distinction highlights the weakness of even 

consequential LCA methods that fail to evaluate additionality but claim to offer correct carbon 

accounting because they model leakage effects such as ILUC. Finally, the core aspects of ABC 

accounting- including its estimation of the extent of offset- have a low level of uncertainty 

~Springer 
53 

678 Climatic Change (2016) 138:667-680 

because the carbon uptake and vehicle emissions estimates reflect the composition of directly 

measured material flows for feedstocks and fuels. 

This paper does not attempt a consequential analysis, which would entail modeling a 

counterfactual scenario against which actual 2005-2013 carbon exchanges are compared. 

Such an analysis is left for future work. More broadly, there is a need to develop analytic 

tools with a resolution and transparency suitable for addressing sectoral measures that target 

transportation fuels. Liquid fuels can couple strongly to energy and agricultural markets and 

therefore require dynamic analysis, ideally using commodity data for empirical validation as 

done here. It would be useful to conduct ABC evaluations of other programs, such as 

California's LCFS. The method can also prospectively assess emerging biofuel technologies 

that process cellulosic feedstocks. Such options may enable greater gains in NEP, e.g., by using 

crop residues that reduce Rh or by using feedstocks that raise NPP. Finally, given how different 

this approach is from .the methods commonly used for energy analysis, further work is needed 

to examine the research and policy implications going forward. 

5 Conclusion 

This retrospective, national-scale evaluation of substituting biofuels for petroleum fuels applied 

Annual Basis Carbon accounting to take a circumscribed look at the changes in carbon flows directly 

associated with a vehicle-fuel system. The system was defined to include motor fuel consumption, 

fuel processing operations and resource inputs, including cropland for biofuel feedstocks. The 

assumption that biofuels are inherently carbon neutral is a premise of most climate-related fuel 

policies promulgated to date, including measures such as the LCFS and RFS that evaluate GHG 

impacts using lifecycle modeling. However, this analysis found that the gains in C02 uptake by 

feedstock were enough to offset biofuel-related biogenic C02 emissions by only 37 % over 2005-

2013, showing that biofuel use fell well shortofbeingcarbonneutral even before considering process 

emissions. 

When this estimate of the real-world offset is considered together with values from the 

literature for displacement effects, the conclusion is that rising U.S. biofuel use has been 

associated with a net increase rather than a net decrease in C02 emissions. This fmding 

contrasts with those ofLCA studies which indicate that even crop-based biofuels such as corn 

ethanol and soy biodiesel offer modest net GHG reductions. The global GHG impact of 

biofuel use remains highly uncertain. Nevertheless, the necessary condition for a biofuel to 

offer a C02 mitigation benefit, namely, that the production of its feedstock must increase NEP, 

can be evaluated empirically. Doing so provides a bounding result that suggests a need for 

greater caution regarding the role of biofuels in climate mitigation. 

Acknowledgments The work reported here was supported by the American Petroleum Institute (API) and the 

University ofMichigi!l1 Energy Institute (UMEI). The analysis, results and conclusions presented are those of the 

authors alone. The conclusions and views expressed do not necessarily, and should not be taken to, reflect those 

of either API or UMEI. 

Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International 

License (http://creativecommons.org/licenseslby/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author( s) and the source, provide a 

link to the Creative Commons license, and indicate if changes were made. 

~Springer 
54 

Climatic Change (2016) 138:667-680 679 

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~Springer 
56 

Mr. POSEY. Thank you, Mr. Chairman. 

According to his study, despite the purported advantages of 

biofuels created from crops such as corn, soybeans cause more 

emissions of climate-change-causing carbon dioxide than gasoline. 

The study further remarks that carbon neutrality has really been 

an assumption. To verify the extent to which the assumption is 

true, you really need to analyze what’s going on in the farmland, 

where the biofuels are being grown. People haven’t done this in the 

past, and they felt like they didn’t need to. 

It’s truly puzzling to me that we aren’t looking at the full 

lifecycle of biofuels production. With gasoline, we take into account 

not just the tailpipe emissions but carbon emissions during the 

drilling, the transportation, the refueling, and other parts of the 

process. 

Now, Mr. Secretary, I’m working on legislation to authorize the 

Department of Energy to conduct research and development necessary to refine our models to better estimate the overall impact of 

ethanol fuels on greenhouse gas emissions. I believe it’s essential 

that we have an accurate estimate of these impacts to develop policymaking on such fuels. Ethanol is a very pure poor fuel product 

substitute, and mandating its use has serious implications for food 

supplies and prices. Will you pledge to work with me on legislation 

to improve the basic tools necessary for assessing the lifecycles and 

emissions of ethanol? 

Secretary PERRY. Yes, sir. 

Mr. POSEY. Thank you. I yield back, Mr. Chairman. 

Chairman SMITH. Thank you, Mr. Posey. 

And the gentleman from Illinois, Mr. Foster, is recognized. 

Mr. FOSTER. Well, thank you. 

And, Secretary Perry, I have to say how much I really enjoyed 

the day that we spent together visiting the two national labs that, 

you know, one of which I worked at for many years, another one 

which I currently represent. And, you know, I just want to say that 

your enthusiasm for the fundamental science has really shown 

through on that visit. You know, it’s a—you know, the Department 

of Energy has done well with, you know, technical wizards running 

it and also with people with more political backgrounds who really 

understand and appreciate what it does. And I just want to say 

how much, you know, I appreciate that, as well as of course your 

specific enthusiasms for the upgrades at Argonne and at Fermilab, 

which have already been mentioned here. 

Also, you know, when I look over, you know, the subject of this 

and the budget, you know, we’ve had some sort of off-the-record 

discussions there, and you mentioned in your opening remarks the 

return on investment, which I think is the right phrase for this. 

And so when you look at programs like the EERE investments 

where third-party independent estimates have said that between— 

the investments between 1976 and 2008 of about $15 billion generated economic benefits to the United States of about $388 billion. 

And that’s a return on investment of 24 to 1, an enormous number, 

and you’d be hard-pressed to find any industrial sector with a comparable return on investment. And, you know, you definitely get 

that. 
57 

And, you know, on the other hand if you look at this—at the 

budget proposal, you’re going to—you know, there are things like 

the Loan Program Office of the Advanced Tech Vehicle Manufacturing program. These are things that have turned a profit for the 

taxpayer in the sense of returned money to the taxpayer. So technically, the return on investment there is more than infinite. And 

yet when you see these things proposed to be zeroed out, you know, 

how do you react in the internal debates on that, and how do you 

go forward when you, I’m confident, advocate for this sort of program and then see the final proposal—— 

Secretary PERRY. Yes, sir. 

Mr. FOSTER. —being cut? 

Secretary PERRY. Mr. Foster, as you said, you and I have had 

some relatively lengthy conversations about this specific area of the 

budget. As—I try to remind people that, again, I really respect this 

process. I grew up in it having been an appropriator, having been 

an agency head, having been the chief executive of a State that was 

fairly successful. We actually created a program back in Texas 

called the Emerging Technology Fund that we oversaw, and I argued vehemently to some of my own colleagues on my political 

party that didn’t think government needed to be picking winners 

and losers, and I shared with them that we pick winners and losers 

every day. 

Mr. FOSTER. Yes, but—— 

Secretary PERRY. But my—— 

Mr. FOSTER. —I just—I really appreciate—you know, you actually get this issue in-depth, and I just really appreciate that. So 

keep fighting, and I wish you better luck in future debates here. 

Now to change the subject, your predecessor, one of the really 

great things he did with the scientific expertise of the national lab 

was to—and really engaged that expertise in the Iran nuclear negotiations, that he was providing real-time input to the negotiating 

team and to those of our allies on the detailed technical questions 

that are an essential part of this. So could you describe the extent 

to which the—that technical and scientific expertise at the national 

labs, both the science labs and the weapons labs have been engaged in the latest strategic decisions by the White House? 

Secretary PERRY. Yes. And it’s a lot broader. I know news of the 

day is the Iranian deal, the JCPOA, but the point is the Department of Energy is the agency of which the verification of nuclear 

materials and nuclear activities around the world, whether it’s 

North Korea, whether it’s Iran, our agency is where the expertise 

lies. National labs obviously play a very important role with that 

but also in the NNSA side of our house as well. So I’m not sure 

there is an agency of government with more expertise, with the—— 

Mr. FOSTER. So my question is why have seen very little evidence 

of that expertise being engaged or can you give specific examples 

where it has been in these latest decisions? 

Secretary PERRY. Yes, sir, I can but I’m not sure that some of it 

we can talk about in this room. 

Mr. FOSTER. Thank you. I appreciate that. 

Secretary PERRY. Yes, sir. But I’ll be more than happy to come 

and sit down with you in a classified environment and share with 

you I think the questions that you place forward. 
58 

Mr. FOSTER. Thank you. 

Secretary PERRY. Yes, sir. 

Mr. FOSTER. I yield back. 

Chairman SMITH. Thank you, Mr. Foster. 

The gentleman from Texas, Mr. Babin, is recognized for questions. 

Mr. BABIN. Yes, sir, thank you, Mr. Chairman, and thank you, 

Mr. Secretary, for being here, my favorite Governor. Glad to have 

you here. 

Secretary PERRY. Thank you. 

Mr. BABIN. I appreciate your long years of service to our Lone 

Star State. 

I would like to have a graph put up, please, from 2010 from the 

U.S. Energy Information Administration. 

[Slide.] 

Mr. BABIN. Let me make a note here. The graph all the way to 

the right, these are subsidies for unit of production per megawatt 

hour all the way to the right. That is not to scale. You can see for 

solar power the American taxpayers were subsidizing solar energy 

per megawatt hour at a rate—if that graph was to scale, we would 

have to be in about a three-story building. That’s how high and 

how large the amount of subsidies that we are giving solar energy. 

You can see that wind is the next one. It is to scale. And then a 

few years later in 2013 solar is still way up there above everything 

else. It’s declining but still unacceptably high as far as I’m concerned. This is probably the result of the Obama stimulus that was 

done at that point in time, thankfully winding down than anything 

else. 

To the best of our knowledge this is the last time that the EIA 

has published this particular chart laying out just how much hardworking taxpayers in our district and across the country are paying 

for energy subsidies. What happened? Environmentalist groups, 

along with our allies in Congress and the Obama Administration, 

pushed for and apparently succeeded in keeping this very simple, 

easy-to-read chart away from the public eye. 

I also have here the most recent report published just last month 

from 2016 which, Mr. Chairman, I’d like to enter into the record 

if that’s possible. 

Chairman SMITH. Without objection. 

[The information follows:] 
59 

Independent Statistus & Ana?Jsis 

U.S. Energy Information 

Administration 

Direct Federal Financial 

Interventions and Subsidies in 

Energy in Fiscal Year 2016 

April 2018 

Independent StutL>'lic,~ & .-lna!.ysis 

www.eia.gov 

U.S. Department of Energy 

Washington, DC 20585 
60 

This report was prepared by the U.S. Energy Information Administration (EIA), the statistical and 

analytical agency within the U.S. Department of Energy. By law, EIA's data, analyses, and forecasts are 

independent of approval by any other officer or employee of the United States Government. The views 

in this report therefore should not be construed as representing those of the U.S. Department of Energy 

or other federal agencies. 

U.S. Energy Information Administration I Financial Interventions and Subsidies 
61 

Apri/2018 

Contacts 

This report, Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2016, was 

prepared under the general guidance of lan Mead, Assistant Administrator for Energy Analysis; Jim 

Turnure at 202/586-1762 (email, james.turnure@eia.gov), Director, Office of Energy Consumption and 

Efficiency Analysis; and Shirley Neff, Senior Advisor, EIA. 

Technical information concerning the content of the report also may be obtained from Mark Schipper at 

202/586-1136 (email, mark.schipper@eia.gov) and technical information on the subsidies and support 

to the electric power industry may be obtained from Chris Namovicz at 202/586-7120 (email, 

chris.namovicz@eia.gov). 

Contributing authors, by fuel or technology subsidy and support issue areas, are as follows 

• Richard Bowers and Fred Mayes-renewables (electricity) subsidies and support 

• Steven Hanson-renewables (non-electricity) subsidies and support 

Fred Mayes and Mark Schipper-electricity transmission subsidies and support 

• Bonnie West-coal and coal-related subsidies and support 

• Chris Namovicz-loans and loan guarantees 

• Aloulou Faouzi-natural gas and petroleum subsidies and support 

• Mark Schipper-energy efficiency and conservation subsidies and support 

• Michael Scott-nuclear subsidies and support 

Other EIA contributors to the report include: Stefanie Palumbo, Michelle Bowman, and Manussawee 

Sukunta. 

U,S. Energy Information Administration ! Financial Interventions and Subsidies 
62 

Apri/2018 

Preface 

This report-an update based on Fiscal Year (FY) 2016 data-continues a series of U.S. Energy 

Information Administration (EIA) reports on federal direct 'financial interventions and subsidies into 

energy markets. Using a set of data sources and analytic procedures, EIA assigns within-scope U.S. tax 

and direct expenditures to a set of discrete energy system categories. 

U.S. Energy Information Administration I Financial Interventions and Subsidies m 
63 

Apri/2018 

Contacts ........................................................................................................................................................ ii 

Preface ......................................................................................................................................................... iii 

Tables ............................................................................................................................................................ v 

Figures ......................................................................................................................................................... vii 

Overview and Key Findings ........................................................................................................................... 1 

Overview .................................................................................................................................................. l 

Subsidy types ..................................................................................................................................... 1 

Key findings .............................................................................................................................................. 3 

Textbox: Renewable-related subsidy trends ........................................................................................... 6 

Limitations of this Report ............................................................................................................................ 13 

Analytic Approach ....................................................................................................................................... 14 

Data availability, accuracy, and variation ........................................................................................ 16 

Other energy subsidy studies .......................................................................................................... 17 

Tax Expenditures ......................................................................................................................................... 19 

Examples of energy-specific tax expenditures ...................................................................................... 21 

Direct Expenditures, Including R&D ............................................................................................................ 30 

Text box: Federal direct purchasing of designated energy products ..................................................... 31 

Examples of energy-specific direct expenditure and R&D programs .................................................... 35 

Text box: Research and development for general application ............................................................... 49 

U.S. Energy Information Administration I Financial Interventions and Subsidies iv 
64 

Apri/2018 

Tables 

Table 1. Total energy subsidies and support and selected energy indicators, FY 2010, FY 2013, and FY 

2016 .............................................................................................................................................................. 2 

Table 2. Measures of electricity net generation and growth (FY 2000 versus FY 2016) .............................. 5 

Table 3. Quantified energy-specific subsidies and support by type, FY 2010, FY 2013, and FY 2016 .......... 9 

Table 4. Quantified renewable-related energy-specific subsidies and support by type, FY 2010, FY 2013, 

and FY 2016 ................................................................................................................................................. 11 

Table 5. Estimates of energy-specific tax expenditures, FY 2010, FY 2013, and FY 2016 ........................... 19 

Table 6. Estimates of coal-related energy-specific tax expenditures, FY 2010, FY 2013, and FY 2016 ...... 22 

Table 7. Estimates of renewable-related energy-specific tax expenditures, FY 2010, FY 2013, and FY 2016 

.................................................................................................................................................................... 24 

Table 8. Estimates of natural gas- and petroleum-related energy-specific tax expenditures, FY 2010, FY 

2013, and FY 2016 ....................................................................................................................................... 25 

Table 9. Estimates of nuclear-related energy-specific tax expenditures, FY 2010, FY 2013, and FY 2016.26 

Table 10. Estimates of conservation, efficiency, and end-use energy-specific tax expenditures, FY 2010, 

FY 2013, and FY 2016 .................................................................................................................................. 27 

Table 11. Estimates of electricity transmission-related energy-specific tax expenditure, FY 2010, FY 2013, 

and FY 2016 ................................................................................................................................................. 28 

Table 12. Estimates of direct expenditures in energy, FY 2010, FY 2013, and FY 2016 ............................. 32 

Table 13. Estimates of research and development expenditures in energy, FY 2010, FY 2013, and FY 2016 

.................................................................................................................................................................... 34 

Table 14. Estimates of coal-related energy-specific direct expenditures by department and program, FY 

2010, FY 2013, and FY 2016 ........................................................................................................................ 36 

Table 15. Estimates of coal-related energy-specific research and development expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 ........................................................................ 36 

Table 16. Estimates of renewable-related energy-specific direct expenditures by department and 

program, FY 2010, FY 2013, and FY 2016 .................................................................................................... 37 

Table 17. Estimates of renewable-related energy-specific research and development expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 ........................................................................ 39 

Table 18. Estimates of natural gas- and petroleum-related energy-specific direct expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 ........................................................................ 42 

Table 19. Estimates of natural gas- and petroleum-related energy-specific research and development 

expenditures by department and program, FY 2010, FY 2013, and FY 2016 ............................................. 43 

Table 20. Estimates of nuclear transformation-related energy-specific direct expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 ........................................................................ 44 

Table 21. Estimates of nuclear transformation-related energy-specific research and development 

expenditures by department and program, FY 2010, FY 2013, and FY 2016 ............................................. 44 

Table 22. Estimates of conservation, efficiency, and end-use energy-specific direct expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 ........................................................................ 46 

Table 23. Estimates of conservation, efficiency, and end-use energy-specific research and development 

expenditures by department and program, FY 2010, FY 2013, and FY 2016 ............................................. 47 

U.S. Energy Information Administration I Financial Interventions and Subsidies 
65 

Apri/2018 

Table 24. Estimates of electricity transmission-related energy-specific direct expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 ........................................................................ 48 

Table 25. Estimates of electricity transmission-related energy-specific research and development 

expenditures by department and program, FY 2010, FY 2013, and FY 2016 ............................................. 48 

U.S. Energy Information Administration I Financial interventions and Subsidies vi 
66 

Apri/2018 

Figures 

Figure 1. U.S. Department offnergy budget authority and outlays (FY 1980-FY 2016) .............................. 4 

Figure 2. Renewable-related energy subsidies ............................................................................................. 6 

Figure 3. Renewable-related estimated tax expenditures ............................................................................ 7 

Figure 4. Renewable-related direct expenditures ........................................................................................ 7 

Figure 5. Renewable-related research and development expenditures ...................................................... 8 

Figure 6. Data sources used for energy-related subsidies .......................................................................... 14 

Figure 7. Relationship of data sources to EIA data processing .................................................. , ................ 15 

Figure 8. Direct expenditures by select programs, FY 2010, FY 2013, and FY 2016 ................................... 30 

U.S, Energy Information Administration 1 Financial Interventions and Subsidies vii 
67 

Apri/2018 

Overview and Key Findings 

Overview 

This report-an update based on Fiscal Year (FY) 2016 data and earlier EIA reports on direct federal 

financial interventions and subsidies in energy markets-continues a series of U.S. Energy Information 

Administration (EIA) reports' that began in response to congressional requests. More recently, the 

Secretary of Energy requested updated information as part of the U.S. Department of Energy's (DOE) 

Grid Resiliency Study. 2 

The scope of this EIA report is limited to direct federal financial interventions and subsidies, i.e., 

subsidies provided by the federal government, subsidies that provide a financial benefit with an 

identifiable federal budget impact, and subsidies that are specifically targeted at energy technologies 

and markets. State and local programs-although significant in a number of cases-have been excluded 

from EIA's reporting. As a result, this report does not encompass all subsidies that affect energy markets 

and should therefore be viewed in context and in conjunction with related information from other 

sources (see discussion of Other energy subsidy studies in the Analytic Approach section). 

Consistent with EIA's independent role and mission, this report focuses on providing information to 

inform discussion rather than drawing conclusions or discussing policy issues related to energy 

subsidies. By using a comprehensive data acquisition and analysis process, EIA estimates how federal 

financial actions are distributed among a defined set of categories comprising the U.S. energy system.,. 

EIA has made only limited observations of the scale, trends, and relationships within the data and the 

report tables. 

Table 1 summarizes total within-scope energy subsidies and selected U.S. energy system indicators. 

Subsidy types 

Federal financial interventions and subsidies included in this report fall into four categories: 

Tax expenditure: the amount of tax benefits or preferences received by taxpayers and forgone 

by the federal government 

Direct expenditures to recipients (i.e., both producers and consumers): the amount of grants, 

loans, or other financial assistance awards made directly to recipients 

• Research and development (R&D) support: the amount of grants, loans, or other financial 

assistance awards made for R&D 

1 The first EIA study was undertaken at the request of Congress in Fiscal Year (FY) 1992, pursuant to language appearing in the 

House Appropriations Committee's Report on the U.S. Energy Information Administration FY 1992 appropriations. 

2 U.S. Department of Energy, Staff Report to the Secretary on Electricity Markets and Reliability, Washington, DC, August 2017. 1 EIA has requested further detailed data from the Internal Revenue Service as it pertains to the distribution of energy·related 

tax benefits. 

U.S. Energy Information Administration I Flnancialln~erventions and Subsidies 
68 

• DOE loan guarantees: financial support authorized to be provided by DOE for innovative clean 

energy technologies that are typically unable to obtain conventional private financing because 

of their high technology risks. 4 

Table 1. Total energy subsidies and support and selected energy indicators, FY 2010, FY 2013, and FY 

2016 

trillion British thermal units or as specified 

Indicators 

_l),S:.!II~.!~~()Il~U'!'~~-" 

.. IJ:.S:.5".••.rgy P_o:<><l~t!i<l." .. ~ ··-

..... t),S1. Natura_l(;asJdryaf)d "<Jui_ds).. 

U.S. Crude Oil ~~~- ~ "• "'·-~~--.. ~ ·-· ~~~ 

U.S. Coal ~-~··-~· -~-- .... 

U.S. Nuclear . .. . -· --· ~--- ··-·-·-

u.s. Biomass ----- -~~--------~-···--

.. U.S, f{ydrgele_ctric __ _ 

U.S. Wind ·-----------··------

U.S. Solar 

U.S. Geothermal 

FY 2010 FY 2013 FY2016 

37,992 . ~9,335 .. 14,9~3. 

···~···· ~ . ··~9_6~8~!1_ .. .!8,~5~ __ 96,?~. 

.... ?3,695 ___ 8!,~--- _!1'!·~~3-

. 24,10_5 28,22()_ ~2,§52 

11,_:;1_2 ... _15,:!7.0 __ 18,_79_7__ 

.A11657 _AOP3 141807 __ 

..... ... . ... _8,_31_8_ ..... 8!09~ ••• • ? •. 35_2_ 

4,~58_ .... ~.§8.0. _4!963 

..... 2!_:i8!l _2,~82 .. . -~48_2 

863 ... _1,~!;7. _2,03_8_ 

88 205 533 

207 215 209 

Note: Totals may not equal the sum of components due to independent rounding. 

Sources: Consumption: EIA, Monthly Energy Review, February 2018, Table 1.3. Production: EIA, Monthly Energy Review, 

February 2018, Table 1.2. Tax expenditure estimates: Office of Management and Budget, Analytical Perspectives, Budget of 

the U.S. Government, FY 2012, 2015, and 2018. Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal 

Years 2010-2014, JC$-3-10 (Washington, DC, December 2010), Table 1, Joint Committee on Taxation, Estimates of Federal 

Tax Expenditures far Fiscal Years 2012-2017, JC$-1-13 (Washington, DC, February 2013), Table 1, and Joint Committee on 

Taxation, Estimates of Federal Tox Expenditures for Fiscal Years 2016-2020, JCX-3-17 (Washington, DC, January 2017), Table 

l. Federal direct expenditure and R&D expenditure subsidies: DOE: U.S. Department ofEnergy, Office of the Chief Financial 

Officer, Bose Finonciol Doto, FY 2010, FY 2013, and FY 2016; FY 2010 and FY 2013: U.S. General Services Administration, 

USASpending.gov- Government spending at your fingertips, https://www.usaspending.gov/, accessed October 22, 2014; FY 

2016: U.S. Department of the Treasury, USASpending.gov, https://www.usaspending.gov/, accessed November 16, 2017. 

Loan guarantee programs credit subsidy: Computed from data from U.S. Department of Energy, Loan Program Office, 

https://www.energy.gov/!po/portfolio/portfolio-projects, accessed January 20, 2015 and EIA, Direct Federal Financial 

Interventions and Subsidies in Energy in Fiscal Year 2010, July 2011, Table 29. 

4 Section 1703 of Title XVII of the Energy Policy Act of 2005 authorizes the U.S. Department of Energy to support innovative 

clean energy technologies that are typically unable to obtain conventional private financing due to high technology risks. In 

addition, the technologies must avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases. The 

Advanced Technology Vehicles Manufacturing (AIVM) Loan Program was established in Section 136 of the Energy 

Independence and Security Act of 2007 to support the production of fuel-efficient, advanced technology vehicles and qualifying 

components in the United States. American Recovery and Reinvestment Act of 2009 amended Loan Guarantee Program's 

authorizing legislation, creating Section 1705. 

U.S. Energy Information Administratlon I Financial Interventions and Subsidies 
69 

Apri/2018 

Key findings 

Table 3 and Table 4 summarize the allocation of federal direct financial interventions in U.S. energy 

markets by subsidy type. Several key findings stand out. 

The scope and complexity of federal financial and award activities are very large and spread over a 

wide range of sources, recipients, and time frames. Despite a recent trend of decreasing federal 

activity, hundreds of distinct energy-related federal financial programs continue to pursue a wide range 

of goals using various methods. The time frames of these programs and activities can be very different, 

as in the case of tax provisions that allow taxpayers to decide which year to take a credit or to pay a 

deferred charge. Isolating the impacts of these programs, as well as characterizing the net impact of the 

whole set of actions on the U.S. energy system, is challenging. 

Most current federal subsidies support developing renewable energy supplies (primarily biofuels, 

wind, and solar) and reducing energy consumption through energy efficiency. In FY 2016, nearly half 

(45%) of federal energy subsidies were associated with renewable energy, and 42% were associated 

with energy end uses. Table 4 shows a more detailed distribution of renewable energy-related federal 

support. The amount and distribution of renewable energy subsidies over time (see text box on 

renewable-related subsidy trends) have depended on congressional authorizations and the market 

competitiveness of renewable electricity technologies. Among renewable technologies, biofuels 

received the only incremental increase in FY 2016 subsidy support, driven by greater domestic biomassbased diesel production and foreign imports of these products that resulted in an approximately $1 

billion increase in tax credits from FY 2013 levels. 

Energy end-use and conservation subsidies decreased from $7.7 billion in FY 2013 to $7.2 billion in FY 

2016 (Table 3). The largest program in this combined category-the low Income Home Energy Assistance 

Program (liHEAP) operated through the U.S. Department of Health and Human Services (HHS)-

maintained its funding levels at $3.2 billion and $3.4 billion in FY 2013 and FY 2016, respectively. The 

decrease in total subsidies and support for energy-related conservation and end-use programs between 

FY 2013 and FY 2016 was led by declines in direct expenditures, which decreased from $4.2 billion to 

$3.6 billion, respectively. Of the $438 million decline in total federal support of conservation and enduse programs between FY 2013 and FY 2016, direct expenditures decreased $597 million. The tax credit 

for energy efficiency improvements to existing homes (26 U.S.C. 25C) accounted for $106 million of the 

decrease, and conversely, many tax expenditures (e.g., the credit for residential energy efficient 

property, 26 U.S.C. 25D) increased during the same period. 

Since FY 2010, the scale of federal support has decreased as temporary measures expired, even as the 

U.S. energy system continues to grow. Federal activities within the scope of this study have been 

decreasing, in large part because of the expiration of provisions and programs authorized by the 

American Recovery and Reinvestment Act (ARRA or the Recovery Act) of 2009 (Figure 1). The Recovery 

Act provided energy funding that greatly increased DOE's previous energy program budgets but also 

required the rapid obligation of funds that would cover outlays over several years. The U.S. energy 

system, as a whole, continues to grow, with production activities growing more rapidly than energy 

consumption. As a result, the relative scale of federal activity within the overall context of the energy 

system has continued to decline since FY 2010. 

U.S. Energy Information Administration I Financial Interventions and Subsidies 
70 

Figure 1. U.S. Department of Energy budget authority and outlays (FY 198Q-FY 2016) 

billion nominal dollars 

80 

70 

60 

50 - budget authority 

40 - budget outlays 

30 

20 J..l\ -~ 

10 , - 0 

1980 1985 1990 1995 2000 2005 2010 2016 

Source: Office of Management and Budget, Historical Tables, Tables 4.1 and 5.2, accessed February 23, 2018. 

In FY 2016, tax code provisions were the largest source of direct federal financial interventions and 

subsidies in energy markets, following a period of higher federal direct expenditures resulting from 

ARRA programs and funding. The federal tax code-with 36 wide-ranging, energy-specific tax provisions 

(Table 5)-provided greater financial support to energy in FY 2016 than direct expenditures and R&D 

support. This reversal from FY 2013 is best captured by the temporary ARRA Section 1603-grant 

program to allow an investment tax credit (ITC)5 in lieu of the renewable energy production tax credit 

(PTC).6 1n FY 2013, this lTC grant program pushed the direct expenditure category above estimated tax 

expenditures in absolute dollar terms. 7 In FY 2016, the lTC grant program had largely ended, and tax 

expenditures (in total) regained their dominance, with tax provisions representing 59% of the total 

(Table3). 

No new DOE loan guarantees were issued in either FV 2013 or FY 2016. The subsidy cost of the loans 

issued in FY 2010totaled $1.7 billion. Because this cost is assessed at the time the loan is issued, there 

was no related subsidy cost for FY 2013 or FY 2016. The loan guarantees associated with the Vogtle 

nuclear project8 are included with FY 2010 subsidy costs. However, there were still outstanding debts in 

FY 2016 for loans issued in prior years. Although lending authority for the Section 1705loan program 

had expired by 2013, budget authority remains for future lending on the Section 1703loan program. 

5 This report will reference only renewable electricity investment (i.e., energy investment credit) as the lTC. 

• This report will reference only renewable electricity production (i.e., energy production credit) as the PTC. 

7 This categorical shift can be viewed as an accounting issue, with the subsidy still ultimately stemming from the tax code. 

'DOE, Loan Guarantee Office, website: https://energy.gov/lpo/vogtle, accessed February 20,2018. On September 29,2017, the 

U.S. Department of Energy offered conditional commitments for construction to the Vogtle project, website: 

https://energy.gov/lpo/articles/vogtle-conditional-commitments-support-energy-infrastructure, accessed February 27, 2018. 

U.S. Energy Information Administration I Financial Interventions and Subsidies 
71 

Apri/2018 

Electricity projects accounted for 25% of FY 2016 total R&D expenditures. This share is similar to the 

share in FY 2010 and FY 2013. Except for biofuels, virtually all non-fossil energy subsidies (renewable 

fuel and nuclear) were for electricity projects. In addition, most coal subsidies were electricity-related, 

even though they were often not denoted as such, because about 85% of coal consumption is used to 

generate electricity. The share of natural gas subsidies for electricity generation is more difficult to 

determine. 

Table 2. Measures of electricity net generation and growth (FY 2000 versus FY 2016) 

Beneficiary 

Coal 

~ Na~tural §<~•~andf>etr()leurn Uquids 

Nuclear 

Other 

Renewables ~---- ~ ~-~~--~-~· 

Biomass 

Geothermal ---·-·-·--"" ··-· 

-· _ !:!X~~?~.I~c!ri~_ 

Solar 

2000Net 

Generation 

(billion 

kilowatthours) 

2016Net 

Generation 

(billion 

kilowatthours) 

~ 1,9~1~~ 1,208 

684 ~~ ~1,431 

765 799 

13 

365 

59 

5 

3,759 

21 

618 

63 

16 

268 

51 

220 -~~-------·-· ·-· --

4,077 

Share of 

2000 

Share of 

2016 

Generation Generation 

(percent) (percent) 

51.4 29.6 ··~------··*-**"*' 

18.2 35.1 

2Q.4 19.6 

0.3 0.5 

Annual 

Growth 

from 2000 

to2016 

(percent) 

(2,9) 

4.7 

0.3 

3.1 -----·--·------··-- 9.7 15.2 

1.6 1.5 

3.3 

0.4 

0.4 0.4 0.5 

7.6 6.6 .. ~ ~ j(),4l. 

0.0 

0.1 

100.0 

1.2 

5.4 

100.0 

31.8 

26.3 

0.5 

Notes: Totals may not equal sum of components due to independent rounding. A table value in brackets() denotes a 

negative value. Zero denotes rounding to zero value. Other includes net generation from hydroelectric pumped storage, 

other gases, batteries, chemicals, hydrogen, pitch, purchased steam, sulfur, and miscellaneous technologies. Biomass 

includes net generation from wood and waste. Solar includes distributed (small-scale) generation and utility~scale 

generation. 

Sources: U.S. Energy Information Administration, Monthly Energy Review, February 2018, Table 10.6 (solar) and Table 7.2a 

(all other). 

u.s. Energy Information Administration I Financial Interventions and Subsidies 
72 

Renewable energy (including biofuels) comprised between 42% and 52% of total energy subsidies for 

each of the three fiscal years analyzed (Table 5). Total renewable-related subsidies were about $15.5 

billion for both FY 2010 and FY 2013, then dropped to $6.7 billion in FY 2016 (Figure 2). Tax and direct 

expenditures combined accounted for about 93% of total renewable-related subsidies for each of the 

years analyzed. In FY 2016, tax expenditures alone accounted for 80% of total renewable energy 

subsidies. Direct expenditures decreased 90% from FY 2013 to FY 2016, largely as a result of the 

expiration of the Section 1603 grant program. 

million 2016 dot!ars 

18,000 

16,000 

14,000 

12,000 

10,000 

8,000 

6,000 

4,000 

2,000 

0 

Source: Table 4. 

FY 2010 FY 2013 FY 2016 

Renewable tax expenditures declined $367 million between FY 2013 and FY 2016, due almost entirely 

to lower outlays for the PTC for electricity plants {Figure 3). In previous years, the Section 1603 grant 

program was designed to achieve the same goals as the PTC (during years when investors had little tax 

liability) and represented a large portion of renewable energy subsidies. Changes in biofuel tax 

expenditures from FY 2010 to FY 2016 reflect the 2011 expiration of the alcohol fuel excise tax 

exemption followed by increasing expenditures associated with the biodiesel mixture credit (referred 

to as the biodiesel production tax credit in Table 5). 
73 

million 2016 dollars 

18,000 

16,000 

14,000 

12,000 

10,000 

8,000 

6,000 

4,000 

2,000 

0 

Source: Table 4. 

FY 2010 FY 2013 FY 2016 

Nearly all direct expenditures since FY 1010 for renewable-related energy have supported renewable 

electricity plant construction. Renewable-related direct expenditures were $5.7 billion and $8.7 

billion in FY 2010 and FY 2013, respectively, which consisted mostly of payments in lieu of tax credits 

to construct wind plants (Figure 4). Solar and wind projects, when combined, received at least 82% of 

direct expenditures in each of the years analyzed. 

million 2016 dollars 

18,000 

16,000 

14,000 

12,000 

10,000 

8,000 

6,000 

4,000 

2,000 

0 

Source: Table 4. 

FY 2010 FY 2013 

U.S. Energy Information Administration 1 Finandal1nterventions and Subsidies 

FY 2016 
74 

Most direct expenditures between FY 2010 and FY 2016 were Section 1603 grants designed as 

alternatives to previous tax expenditure subsidies. The number of tax equity investors willing to 

make new investments after the 2008-Q9 recession decreased substantially, as few investors had tax 

liabilities to make the tax credits meaningful. To be eligible for the Section 1603 grant program, a 

project had to meet statutory requirements for starting construction and entering service. This 

provision resulted in substantial grant payouts continuing into FY 2010 and FY 2013. By FY 2016, 

however, grants had been paid to most eligible plants. The wide swings in investor demand for tax 

credits, coupled with direct expenditure program expiration dates, account for the large changes 

over the years analyzed. 

Renewable energy research and development spending was about $850 million for FY 2010 and FY 

2013, then dropped to $456 million for FY 2016 (Figure 5). Of the total renewable R&D subsides, 

electricity projects accounted for more than 80% of each year's subsidies, despite the large FY 2016 

decrease in renewable-related R&D spending. 

million 2016 dollars 

1,000 

900 

800 

700 

600 

500 

400 

300 

200 

100 

0 

Source: Table 4. 

FY 2010 FY 2013 FY 2016 

Solar received the largest share of estimated renewable energy R&D funds for each of the years 

analyzed, ranging from 37% in FY 2010 to 58% in FY 2013. R&D spending dropped in FY 2016 for most 

renewable energy categories, with the exception of biofuels, which grew from $62 million in FY 2013 

to $90 million in FY 2016. 

U.S. Energy Information Administration j FinanciallntBrventlons and Subsidies 
Table 3. Quantified energy-specific subsidies and support by type, FY 2010, FY 2013, and FY 2016 

million 2016 dollars, unless otherwise specified 

Natural Electricity- 

Gas and Smart Grid 

Refined Petroleum and 

Year and Support Type Coal Coal liquids Nuclear Renewables Transmission Conservation End Use Total 

2010 

Direct Expenditures 48 83 69 5,732 4 3,226 6,264 15,427 

Tax Expenditures 506 187 2,883 999 8,913 63 3,511 1,055 18,119 

Research and DE!:v:elopment 320 10 177 844 566 704 97 2,718 

DOE L()an Guarantee Program 292 296 22 4 1,113 1,728 

Total -- 875_ 187 2,_9?6 __ -- __ 15,785- 655 _7,44_6 8,530 37,992 

2% _0% sr.-_- 4% _42% 2% 20% 22% 100% 

2013 

Direct Expenditures 77 388 38 8,716 9 872 3,349 13,450 

Tax Expenditures 801 10 2,345 1,155 5,683 219 657 2,081 12,951 

Research and Development 216 64 197 864 887 517 189 2,934 

DOE loan Guarantee Program 

Total 1,094 10 2,796 1,390 15,264 1,115 2,046 5,619 29,335 

C?f Total 4% 0% 10% 5% 52% 4% 7% 19% 100% 

2016 

Direct Expenditures 19 111 40 909 11 234 3,391 4,716 

Tax Expenditures 906 (940) 160 5,316 160 560 2,653 8,816 

Research and Development 337 56 164 456 49 189 200 1,451 

DOE Loan Guarantee Program 

Total (773) 365 6,682 220 983 6,244 14,983 

Share of Total (5%) 2% 100% 

Notes: Totals may not equal sum of components due to independent rounding. Zero denotes rounding to zero value and a denotes a zero value. Energ

expenditures associated with renewables we.fe allocated based on preliminary generation data. No hydropower generation was assumed to be eligible for produ

credits (PTC), It was assumed a!l investment tax credits were claimed by solar power plants. Municipal Solid Waste {MSW) and open-loop biomass generation est

to calculate PTCs were halved to represent the value of their PTC credit relative to geothermal and wind. Generation estimates for 2016 were used to calculate c

associated with the PTC for wind plants that came online in 2006 and later. 

U.S. Energy Information Administration 1 Financial Interventions and Subsidies 
Sources: Tax expenditure estimates: Office of Management and Budget, Analytical Perspectives, Budget of the U.S. Government, Fiscal Years 2012, 2015 and 201

Committee on Taxation, Estimates of Federal Tax ExpendUures for Fiscal Years 2016-2020, JCX-3-17 (Washington, DC, January 2017), Table 1, Estimates of Federal 

Expenditures for Fiscal Years 2012-2017, JCS-1-13 {Washington, DC, February 2013), Table 1, Joint Committee on Taxation, Estimates of Federal Tax Expenditures f

Years 2010-2014, JCS-3-10 (Washington, DC, December 2010). Table 1. Federal direct expenditure and R&D expenditure subsidies: DOE: U.S. Department of Ene

the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; FYs 2010 and 2013: U.S. General Services Administration, USASpending.gov 

spending at your fingertips, http://www.usaspending.gov/, accessed October 22, 2014; FY 2016: U.S. Department of the Treasury, USASpending.gov, 

http://www.usaspending.gov/, accessed November 16, 2017.loan guarantee programs credit subsidy: Computed from data from U.S. Department of Energy, lo

Office, https:/ /www.energy.gov/lpo/portfolio/portfolio-projects, accessed January 20, 2015 and EIA, Direct Federal Financial Interventions and Subsidies in Fiscal 

Table 29. 

U.S. Energy Information Administration I Financial Interventions and Subsidies 10 
Table 4. Quantified renewable-related energy-specific subsidies and support by type, FY 2010, FY 2013, and FY 2016 

million 2016 dollars, unless otherwise specified 

Renewable Electric 

Subtotal 

Renewable Total 

Year and Support Type Biomass Geothermal Hydroelectric Solar Wind Other Electric Biofuels Renewables 

2010 

Direct Expenditures 185 67 63 481 4,241 330 5,369 363 5,732 

Tax Expenditures 575 l 19 132 1,297 2,023 6,890 8,913 

Research and Development 277 l l3 313 74 79 757 86 844 

DOE Loan Guarantee Program l3 190 94 297 296 

Total 1,037 83 95 1,116 5,705 410 8,446 .7,340. 

Share of Total Renewables 7% 1% 1% 7% 36% 3% 54% 46% 100% 

2013 

Direct Expenditures 346 325 205 3,094 4,454 218 8,642 75 8,716 

Tax Expenditures 48 32 18 2,164 1,682 3,944 1,740 5,683 

Research and Development 178 l 10 499 51 63 802 62 864 

DOE loan Guarantee Program 

Total 572 358 233 5,756 6,187 280 13,387 1,878 15,264 Share of Total Renewables 4% 2% 2% 38% 41% 2% 88% 12% 100% 

2016 

Direct Expenditures 18 41 2 771 4 41 877 33 909 

Tax Expenditures 34 34 34 1,251 1,239 34 2,626 2,690 5,316 

Research and Development 27 10 2 209 24 95 367 90 456 

DOE loan Guarantee Program 

Total 86 169 3,869 -· - .2..813 6,682 

3% 58% 42% 100% 

Notes: Totals may not equal sum of components due to independent rounding. Zero denotes rounding to zero value and a "·"symbol denotes a zero value. Energy

expenditures associated with renewables were allocated based on preliminary generation data. No hydropower generation was assumed to be eligible for produc

credits (PTC). It was assumed all investment tax credits were claimed by solar power plants. Municipal Solid Waste {MSW) and open-loop biomass generation esti

U.S. Energy Information Administration ! Financial Interventions and Subsidies 11 
to calculate PTCs were halved to represent the value of their PTC credit, relative to geothermal and wind. Generation estimates for 2016 were used to calculate c

associated with the PTC captured wind plants that came online in 2006 and later, 

Sources: Tax expenditure estimates: Office of Management and Budget, Analytical Perspectives, Budget of the U.S. Government, Fiscal Years 2012, 2015 and 201

Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2016-2020, JCX-3-17 (Washington, DC, January 2017), Table 1, Estimates of Federa

Expenditures for Fiscal Years 2012-2017, JC5-1-13 (Washington, DC, February 2013), Table 1, Joint Committee on Taxation, Estimates a/Federal Tax Expenditures f

Years 2010*2014, JCS-3-10 (Washington, DC, December 2010), Table 1, and, computed from data from U.S. Energy information Administration (EIA), Form EIA-92

Electric Utility Data". Federal direct expenditure and R&D expenditure subsidies: U.S. General Services Administration, USASpending.gov *Government spending 

fingertips, http:/ /www.usaspending.gov/, accessed October 22, 2014 and U.S. Department ofthe Treasury, USASpending.gov, accessed November 16, 2017. Loan 

programs credit subsidy: Computed from data from U.S. Department of Energy, Loan Program Office, http://energy.gov/lpo/loan-programs-office, accessed Janu

and EIA, Direct Federal Financial Interventions and Subsidies in Fiscal Years 2010, July 2011, Table 29. 

U.S. Energy Information Administration I Finandallnterventions and Subsidies 12 
79 

Apri/2018 

Limitations of this Report 

Both the scope and the measurement of direct federal financial interventions and subsidies in energy 

markets are subject to limitations. This section addresses limitations in scope first, followed by 

limitations in measurement. 

This report is limited in scope to a defined set of federal activities. These activities must meet a certain 

set of criteria for inclusion. They must 

be provided by the federal government 

provide a financial benefit with an identifiable federal budget impact 

be specifically targeted at energy markets 

This scope does not include a wide range of more indirect or shared governmental activities that can 

provide financial benefits to energy market participants. For example, providing security to general 

infrastructure or tax provisions that apply to wide sets of equipment (i.e., applicable to both energyrelated and non-energy-related) are types of federal activities that are not considered within this 

report's scope. The definition used in this report also excludes activities performed by federal staff or 

contractors, which can include energy technology development and direct energy purchases. Examples 

of such activities are noted in later sections. 

Measurement limitations are an important consideration in the assessment of federal financial 

activities. Even a seemingly simple notion like the mismatch of fiscal, calendar, and tax years can result 

in the need to calculate, estimate, or interpolate figures, or to make different interpretations of an 

annualized benefit. Some fiscal year appropriations are not committed in a given fiscal year, and some 

obligated funds may not reach the intended recipients in the same fiscal year, leading to variability in 

the apparent pattern of federal activities over time. EIA provides a series of single-year estimates, not a 

continuous annual series, making specific events and broader trends more difficult to distinguish (as it is 

possible for any particular year's figures to be affected by unique factors). Finally, the estimation 

methods used by EIA are revised as new data and improved methods become available. While efforts 

are made to maintain consistency, improved estimation techniques take precedence over complete 

consistency with past editions of this report. EIA' s treatment of measurement issues is discussed further 

in the Analytic Approach section. 

U.S. Energy Information Administration I Financial Interventions and Subsidies 13 
80 

Apri/2018 

Analytic Approach 

This report compiles direct federal financial interventions and subsidies in energy markets using federal 

government outlays (for DOE and the U.S. Department of the Treasury (the Treasury)), reported budget 

obligations (for all other federal departments), the estimated outlay equivalent value of tax expenditure 

estimates, and the subsidy value of DOE loan guarantees (Figure 6). The report then sorts or assigns all 

of the within-scope federal activities into one or more energy-specific categories within the U.S. energy 

system (biomass, coal, end use, etc.). 

Goals. The primary goal of this report is to help people understand energy market interventions, 

specifically federal tax and direct expenditures that support various parts of the U.S. energy system. 

Consistent with this goal, EIA's final report tables are as simple as possible, despite the complexity of the 

data and the necessary analytic procedures. As noted in the Overview section, EIA has limited its 

observations of the scale, trends, and relationships within the data and the report tables. 

Previous EIA studies. Since 1992, EIA has periodically updated this report. Prior reports and supporting 

materials are available from the EIA website. 9 

Data sources. EIA relies on several official governmental data sources as initial report inputs. Distinct 

data sources are used for tax expenditures, direct expenditures, and research and development 

expenditures, as well as amounts for DOE-related financial spending activities (Figure 6). 

Figure 6. Data sources used for energy-related subsidies 

Primary data sources 

9 U.S. Energy Information Administration, Analysis and Projections: Subsidy, accessed February 16, 2018. 

U.S. Energy Information Administration 1 Financial Interventions and Subsidies 14 
81 

Apri/2018 

Budget terminology. Appropriations, obligations, and outlays are the primary phases of the U.S. 

government budget control system. Congress enacts appropriations that provide federal agencies and 

programs budget authority to make financial commitments (i.e., obligations) to spend funds. Obligations 

are legally binding agreements to purchase items or services, which is the budget phase captured in 

USASpending.gov. Outlays are actual payments made by the federal government for services performed, 

and they offset or liquidate outstanding obligations. 

Figure 7. Relationship of data sources to EIA data processing 

EIA uses the definitions of tax expenditures incorporated in federal budget documents and the 

associated tax expenditures estimated by the Treasury that are itemized in various sections of the 

Budget of the U.S. Government, Analytical Perspectives. To a lesser extent, this report includes data 

estimates by the congressional Joint Committee on Taxation. Some tax expenditures that benefit the 

energy industry may also support non-energy related activities, such as the use of accelerated 

depreciation schedules; these provisions are not included. EIA included only tax provisions that are 

narrowly targeted to the energy sector and were quantified by the other federal sources discussed here. 

For direct expenditures, including research and development, EIA developed automated data processing 

when assigning energy-specific beneficiaries. For FY 2016 data, automated tagging or classification of 

nearly three million federal budgetary transactions were custom-designed, which in turn provided 

automated pre-binning and aggregation of more than 20,000 transactions meeting specified criteria for 

subsequent review by EIA's subject-matter experts. 10 

Obligation data come from a comprehensive public database summarizing all federal budget obligations; 

this transaction data is made available through USASpending.gov. In this report, as in the FY 2013 report 

10 USASpendng.gov is a database website owned by the U.S. Department of the Treasury that identifies entities or organizations 

receiving federal funds. It was created as part of the Federal Funding Accountability and Transparency Act (FFATA) of 2006. 

U.S. Energy Information Administration I Financial Interventions and Subsidies lS 
82 

Apri/2018 

update, direct expenditures and R&D expenditures for federal agencies other than DOE, Treasury, and 

the U.S. Department of Health and Human Services that administers LIHEAP come from 

USASpending.gov. These data represented about 10% (or $624 million) of the $6.2 billion estimated as 

the combined direct and R&D expenditures in energy subsidies in FY 2016. This smaller subset of 

subsidies underwent more extensive automated data processing, whereas the remaining 90% (or $5.6 

billion) of the total was estimated directly from program office data sources listed in Figure 6. 

Subsidy type exclusions. The definition of energy subsidy for this EIA report excludes federal staff and 

contractor actions. Some federal programs-such as National laboratories-rely more extensively on 

contractor and staff work than others. As an example of a program with a large reliance on contracted 

work, the bulk of federal support to the nuclear energy industry is through direct federal program 

funding and not through grants and assistance awards. Funding is primarily through two organizations: 

the DOE and the Nuclear Regulatory Commission. The FY 2016 enacted appropriations for nuclear 

energy programs within DOE was $986 million." Based on DOE's FY 2016 budget within the President's 

FY 2018 budget request, most nuclear energy-specific spending would support nuclear energy 

technology research and development programs, including fuel cycle, nuclear energy enabling 

technologies, small modular reactor licensing support, and management and operations at Idaho 

National laboratory. These activities are not considered energy subsidies for purposes of this report. 

DOE's direct expenditures and R&D expenditures are based on actual outlays, as provided by the Office 

of the Chief Financial Officer at DOE (Figure 6). Treasury's direct expenditures are similarly based on 

outlays, as obtained from the Office of Management and Budget's Analytical Perspectives report. As 

noted in earlier sections, appropriations, obligations, and outlays are the primary phases of the U.S. 

government budget control system. 

Under steady-state conditions, where outlays follow obligations in a regular pattern and there are no 

sharp discontinuities in the former or the latter, obligation and outlay measures closely correspond. 

However, enactment of the Recovery Act of 2009, which included energy funding that dwarfed DOE's 

previous energy program budgets and required the rapid obligation of funds to cover outlays over 

several years, makes it more appropriate to report DOE programs based on outlays, using information 

obtained from DOE's Office of the Chief Financial Officer (Figure 1). This treatment is consistent with 

EIA's FY 2013 subsidy report update. 

Data availability, accuracy, and variation 

For measuring subsidies and support, EIA serves as a data aggregator from non-EIA federal data sources 

and depends on those federal sources for data quality and control issues. Tax expenditure estimates 

data are in most cases specific and accurate, as tax provisions included in this report typically are 

targeted to specific energy-related activities and are accounted for on a tax-year basis by Treasury. As a 

result, EIA staff could isolate numerous tax provisions and the corresponding energy system categories. 

Estimation procedures, however, were needed for a subset oftax expenditure data because particular 

tax provision data that could be made available, such as the specific types of renewable energy reported 

when a credit is taken, are not processed or published at this time. Improvements in the reporting on 

11 U.S. Department of Energy, FY 2018 Department of Energy's Budget Request to Congress, Nuclear Energy: Volume 3, page 

531, accessed March 21, 2018. 

U.S, Energy Information Administration I Financial Interventions and Subsidies 16 
83 

April2018 

these provisions would be beneficial. Such data are provided by taxpayers to the IRS when credits are 

claimed. 

Each year Treasury estimates tax expenditures for the upcoming fiscal year budget. These appear in 

OMB's Analytical Perspectives: Budget of the U.S. Government report. Tax expenditure figures are 

estimates for historical FYs and forecasts for non-historical FYs. Prior-year tax expenditure estimates 

may be substantially revised. However, a particular year's revision will not necessarily affect all past 

estimates. The methodology Treasury uses to estimate tax expenditures is also subject to periodic 

modification, and these changes are not always applied to revisions of all historical tax expenditure data. 

This report presents energy tax expenditure estimates for FYs 2010, 2013, and 2016. Sizable changes in 

the dollar value of particular expenditures over time often reflect changes in their utilization due to 

changes in the Internal Revenue Code {IRC), in key interpretations of the IRC, or in other relevant market 

and policy drivers. The historical data also reveal when particular energy programs were implemented 

and terminated, illustrating the magnitude of various tax policies affecting energy production and 

consumption over time. Although there are gaps in the data for some years, generalized trends in tax 

expenditures are still apparent. Some of the tax expenditure data presented in this report will be revised 

in the future, and some of the historical data presented here have not been fully revised. 

Agencies are required to submit data files to USAspending.gov within 30 days after making an award or 

after making a modification or transaction to an award, except for the U.S. Department of Defense, 

which delays its submission by 90 days to protect operations. However, the timing of when specific 

records are displayed on USAspending.gov depends on when the agency submits files to the data source 

sites and the processing time required by that site. There could be a lag of one to three days before the 

files are processed and uploaded to USAspending.gov. 

If an agency reports a modification or transaction to an award made in a previous fiscal year, the 

modification/transaction data are displayed in the fiscal year in which the modification/transaction was 

made, not in the fiscal year that the original award was made. EIA takes all fiscal year data as supplied 

regardless of these modifications. 

Other energy subsidy studies 

Debate continues over the scope, role, and effectiveness of energy policy measures, and several studies 

addressing energy subsidies appear each year from various sources and use different definitions and 

methods. Some examples within the past five years include: (1) Coady, Parry, Sears and Shang {2017), 

How Large Are Global Fossil Fuel Subsidies? in World Development; {2) National Renewable Energy 

Laboratory (2016), Impacts of the Federal Tax Credit Extensions on Renewable Deployment and Power 

Sector Emissions; (3) Department of the Treasury, Progress Report on Fossil Fuels Subsidies to G20; and 

{4) Institute for Energy Research (2013), Estimating the State-Level impact of Federal Wind Energy 

Subsidies. Several of these reports and others in the literature seek to draw conclusions about policy 

issues related to energy subsidies. 

This EIA report focuses on developing data to provide information that can be used by others to conduct 

their own analyses. Along with EIA, the Congressional Research Service (CRS), the Congressional Budget 

Office (CBO), and the Government Accountability Office (GAO) also issue occasional reports on the 

U.S. Energy Information Administration I Financial Interventions and Subsidies 17 
84 

Apri/2018 

scope and nature of federal energy subsidies that mainly or exclusively focus on data. Recent CRS, CBO, 

and GAO reports include: (1) CRS (2017), The Value of Energy Tax Incentives for Different Types of Energy 

Resources: In Brief'; (2) CRS (2015), Energy Tax Incentives: Measuring Value Across Different Types of 

Energy Resources''; (3) CBO (2017), Federal Support for Developing, Producing, ond Using Fuels and 

Energy Technologies; (4) GAO (2013). Energy: Federal Support for Renewable and Advanced Energy 

Technologies; and (5) GAO (2014), Energy Policy: Information on Federal and Other Factors Influencing 

U.S. Energy Production and Consumption from 2000 through 2013. 

Taken together, the extensive literature on subsidies provides examples of how differing definitions and 

methods can yield a wide range of estimates and interpretations. 

12 CRS Report R44852, The Value of Energy Tox Incentives for Different Types of Energy Resources: In Brief, May 18, 2017, by 

Molly F. Sherlock. 

13 CRS Report R41953, Energy Tax Incentives: Measuring Value Across Different Types of Energy Resources, March 19, 2015, by 

Molly F. Sherlock and Jeffrey M. Stupak. 

U.S. Energy Information Administration I Financial Interventions and Subsidies 18 
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Apri/2018 

Tax Expenditures 

In FY 2016, EIA estimates that U.S. federal energy-related tax expenditures were $8.8 billion, or 59% of 

the total subsidies and support identified in this report. This total is substantially lower than the $13.0 

billion, or 44% share, in FY 2013. This decrease reflects, in large part, shifts in subsidies for 'renewable 

energy production over this period, including the installation of renewable en.ergy production 

equipment on residential property. In addition, changes to tax expenditure estimates for oil- and natural 

gas-related activities for FY 2016 result in aggregate revenue inflows to Treasury, rather than subsidies 

to those industries {see Table ). 

Of the FY 2016 total tax expenditures ($8.8 billion) that subsidize or otherwise support activities of 

energy producers or consumers, $5.3 billion {60%) was for tax provisions that support renewable energy 

sources. End-use technologies represent the next largest source at $3.2 billion (36%), with coal being the 

next largest at $906 million (10%). 

In preparing detailed data on energy-related tax expenditures (Table 5), EIA relied on the definitions of 

tax expenditures incorporated in the federal budget and the associated tax expenditures estimated by 

Treasury. To a lesser extent, this section includes data estimates by the congressional Joint Committee 

on Taxation {JCT). Tax expenditures arise from provisions in federal tax laws including credits, 

deductions, deferrals, preferential rates, and exemptions (exclusions). Items in the budget identified as 

tax expenditures by Treasury on occasion differ from those determined to be tax expenditures by the 

JCT. Historical tax expenditure data used in this report are taken from a number of government sources. 

For FY 2016, Treasury is the primary provider of estimates for tax expenditures, supplemented by data 

provided by the JCT. 

Table 5. Estimates of energy-specific tax expenditures, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Tax Provision 

.. Biodies_e_l Prod_ucer _Tax Credit' {2 6US,(;,_6:426) 

.. Credit for_R_esi~er>tiai_Er>er:sv.~ffici."n_tf>rop~r!vJ26l),S,C. _ _25_DL 

_Ene.rsv ~r()duc_tionC:redit.[2~_u.s,c,_4_5L . 

.. En."rsv lnvestrner>tC.redi_t{;!6_l),S,(;,'!8) 

FY FY 

2010 2013 

FY 

2016 

539 _1,667_ 2,650 . 

242 ___ 1,0_0()_ .. 1,451) 

. .. ,.1,69~ 1,74() 1,400 

143 _2,032 ... 1,19,0 _ 

_ Aiternativ_e _Fuel_ a_nd_FueiMiJ<t_ure_Cr~dit_{26 _U.~,C,_6_426_ and_6427_e ).. 197 365 590 

. Tax C:r~it_and_[)e_d(lctionfor_Ciean:Burr~ing_Ve_hicles{26 u,S£ 30,3QB, }OC, and}O_D) 275 281 480 

_Exclusion from 111com_eof(;o_ns~rv<ltioi1Subsi(lie~Provided_l)yP_ul)li<:IJtiliti"s{26 U:~,C.l36)_ 242 354 430 

Excess_ofPercentag~ ov_erCost_ Depletion.J26_t)S,(;. 61_1:613Aand_2_91) .. .. _1,079 552 410 

.. AmortiZi)ti()f1(ll(;ertai_n_Pollutiol1(()[1!roi_F_aciliti"s.(2.~_u,s.C,169). 

Cre_dit for_Enersv_Eff'1ciency __ lmprov_ernentsto.E_xi_stinJ! .. H.omesj2_6_l),S,c.. 2SC:l 

.. Creditfor C,or~structi()n ofN."'oV_Ene_rgy _ _Efficier>t.Horn.esj_26U,s,C,_45L) .. 

.. Credit~orln11estment_ in CleanCoal Faciliti_es{26U_,s.c. 48A,'!8B)_ 

. Nuclear_D_e~orn_missi()ninJ!(2_6_l),S£ 461lAL. 

Capitai_GainsTre_atrnent ofRoyalties.C>nC:o_al {~6t),S;<:.631jcJ) 

.. Naturai_G.as_l)istrib_ution Pi[>elil1es_b_einJ!.Trea_te~a.~.1~:Year;:roJ>t!rtY {26_l),S,C.1_6ll[e)J9{iv!) 

U.S. Energy Information Administration 1 Financial Interventions and Subsidies 

110 417 500 ~~ -. ~-~ ...... . 

.. 3,511 636 530 

22 156 210 

264 188 160 

991 .... 1,14§___ 160 

55 

132 

94 

104 

150 

140 

19 
86 

Apri/2018 

Table 5. Estimates of energy-specific tax expenditures, FY 2010, FY 2013, and FY 2016 (cont.) 

million 2016 dollars 

Tax Provision - ~ - ~.' ·- ... -·-·-·--

Transmission Property Treated as Fifteen-Year Property(26 U.S. C. 168(e)) 

Auo;;;~~,~-~~~~t;;;o;;duc!iC.~ ;;icefiai~·E;,-e~gy Effi~ien! comm.:;~ial suiitii~g- F>;~;;~fiv(26 ·· 

l).SLg9Dt 

.. c;redit_f()rHoldin~ _Cie.a~. Re_n.,;va_ble_E_ner~_B()n_ds' (26 u,s,c. 54A_and 54 C) .•... 

Amortize_ All Geological and Geophysical Expenditures over 2_ Years (26 U.S.C.l67(h)) 

.. E;ceP-ti~n· f~"a~·p~~~i~; l~~~~ii~~atio0-f0r WOrki~iiOt~~~sts·i~ Oi-l a·nd~G~~ Pr~p;rti~s (26 

u,s,f._'\6_9) 

Deferral of Gain from Disposition of Transmission Property to Implement 

FY FY 

2010 2013 

110 208 

66 73 

77 73 

165 104 

21 

Policy (~6l),S.t:.~S_llilL .... . . (55[ 

_(lualifi_edEner~_(;onservati()n Bcmds'.(26 u,s.C,S_'l[)L .... 

. Partial Expef1sinJ! for_P,dva11c"d Mine. 5af"ty Eq_uiprnentJ26u,g,_179_EL 

.. Biodieselan_d_SrnaiiAJ!r~BiodieseiPr()d_ucer_Tax_ Credits. (2{i_U,S.C. _6~26) .. 

.. Exclusiof1_of Speciai_Benefits_for Disabled Coalf.Ainers (26 U.S.C. __ 104,_30_l).S.C,_922J .. 

.. Alcoh()I_Fu_el Credits(2_6_l),S.C,_6426). 

21 

3 28 

22 21 

43 31 -- --~~~~-~ ~~~~~~. 

77 42 

198 219 

FY 

2016 

100 

80 

70 

70 

60 

60 

30 

24 

30 

30 

10 

_P,d\lanc_ed J:nergy_Manufacturing_ Facilitylnvestment"[ax. C:redit_(26U,S.C. 48C}_ 10 

Expensing of Exploration and Development Costs (26 U.S.C. 263(c) and 291) 

'remi>~r~;y so=iiE!rce~i Ex;;;,;;;;;;gi;;; Eq~if'-.:;;;,;;;:;;~E!d in ih'e R'eii~ing.oti:iciui.i F~els(26 u:s:c. · · 179C) 

440 573 . (450) 

837 625 (1,760) 

__ P,Iternathte_Fuei_Production_cr.e~itj26_u,s,c,~SK) . 

. . Alco_hoiFu~l ~xemetion'. (26l),s,c, §4~6) ... 

.. credit forf>roclu_ction fro.rnA_dv_anced !llu_clear j>o;ver Fa£ilities.(2§ US.C.45J(aJ) . 

.. C:re_ditforEnergyEffici_ef1tAeplia_nc;es_(2_6US:C:-~SMJ 

Mine Rescue Training Credit (26 U.S.C. 45N) 

· Ex!le;;;;~g ~~ capit~l Good-;~111 ·R;;sf'~<i 1-,; c~mi>lving·;;;;;i1EP'As~iiur ii~gul;;;;~~s · (:26 u.s.c: 

1796) 

. S~Year Net Operatin_g_Loss Carryoverf()r Electric Tra_nsmi55ion Eguip~nent l26_U:S.C. 172). .. 

Total 

187 10 

. .. ,6,252_ 10 

165 156 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "M"symbol 

denotes a zero value. The advanced energy manufacturing facility investment tax credit or sometimes called advanced 

energy property credit was allocated by fuel and technology using data appearing in: https:f/energy.gov/articles/energydepartment-announces-150-million-tax-credits-investMusMclean-energyMmanufacturing (Phase II of Section 48C) and IRC 

Section 48C Certifications at https://www.irs.gov/businesses/irc-section-48c-certifications, accessed March 20, 2018. 

Sources: Tax expenditure estimates: Office of Management and Budget, Analytical Perspectives; Budget of the U.S. 

Government, Fiscal Years 2012, 2015 and 2018. Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal 

Years 2016·2020, JCX-3·17 (Washington, DC, January 2017), Table 1, Joint Committee on Taxation, Estimates of Federal Tax 

Expenditures for Fiscal Years 2012·2017, JCS-1-13 (Washington, DC, February 2013), Table 1, Joint Committee on Taxation, 

Estimates of Federal Tax Expenditures for Fiscal Years 2010·2014, JCS-3-10 (Washington, DC, December 2010). 

'The alcohol fuel exemption (VEETC) is essentially the excise tax exemption equivalent to the alcohol fuel credits. The 

biodiesel producer tax credit is the excise tax exemption to the biodiesel and small agri-biodiesel producer tax credits. These 

are both listed as footnotes to OMB, Analytical Perspectives, tables which includes energy tax expenditures. 

'In addition, the provision has an outlay effect of $10 million, S40 million, and $30 million in FY 2010, 2013, and 

2016, respectively. 

'In addition, the provision has an outlay effect of $30 million, $50 million, $40 million in FY 2010, 2013, and 2016, 

respectively. 

U.S. Energy Information Administration I Financial Interventions and Subsidies 20 
87 

Apri/2018 

In many cases, the level of energy production or investment determines the potential value of the tax 

expenditure for qualified taxpayers. However, the value of the tax expenditure received by eligible 

taxpayers may not equal the potential value ofthe expenditure based upon production or investment. 

One factor that mitigates against the eligible taxpayer receiving the full value of the tax expenditure is 

the alternative minimum tax (AMT), a separately calculated tax that eliminates many deductions and 

credits for which many tax expenditures are not exempt. Another mitigating factor is that the tax 

expenditure, in many cases, may not be received in the year in which the investment or production took 

place, but may, by law, be carried back or forward a number of tax years. Finally, most of the energyrelated tax credits discussed in this report are not refundable; that is, the credit may not be claimed in 

excess of a taxpayer's tax liability (i.e., the credit cannot cause their tax burden to go negative). 

Therefore, a taxpayer with insufficient gross tax burden may be unable to fully claim a credit. 

Treasury does not provide estimates of de minimis tax expenditures, i.e., $5 million or less. Therefore, 

the impact of such tax expenditures is not reported in either OMB budget documents or tabulations in 

this report. 

Examples of energy-specific tax expenditures 

The following examples illustrate the kinds of specific tax provisions associated with various categories 

of energy-related beneficiaries. 

Coal. Table shows coal-related U.S. tax expenditures with an estimated value of $90G million in FY 201G, 

down from an estimated $811 million in FY 2013. 

• Amortization of Pollution Control Equipment (26 U.S.C. 169). EPAct 2005, Section 1309 

modified Section 1G9 of the IRC, which permitted a GO-month amortization of qualifying 

pollution control facilities used in connection with plants placed in service before January 1, 

197G. For plants placed in service after 1975, the EPAct 2005 modification provides that a 

taxpayer can recover the cost of any certified pollution control facility (but not a water 

pollution-control facility) over a period of 84 months for one placed in service after Aprilll, 

200S, and used in connection with an electric generation plant or other property that is 

primarily coal-fired. The pre-existing GO-month amortization period remains in effect for any 

newly constructed certified air pollution control facility added at a plant in operation prior to 

January 1, 197G. The JCT estimated the value of this expenditure to be $417 million for FY 2013 

and $500 million for FY 201G. 

• Credit for Investment in Clean Coal Facilities (26 U.S.C. 48A and 488). This credit has an 

estimated value of $188 million in FY 2013 and $1GO million in FY 201G. Section 1307 of the 

EPAct 2005 provided for a 20% credit to advanced coal projects using integrated gasification 

combined-cycle (IGCC) technology and a 15% credit to other advanced coal technologies. This 

legislation allocated $800 million tax credits towards electricity-related IGCC projects and $500 

million towards other advanced coal technologies. An additional $350 million was applied to 

U.S. Energy Information Administration I Financial Interventions and Subsidies 21 
88 

Apri/2018 

coal gasification technologies for industrial use with an allowable tax credit of 20%. The Energy 

Improvement and Extension Act of 2008 (Public law 111-343) authorized an additional $1.5 

billion in tax credits for advanced coal and gasification projects, and it increased the investment 

' tax credit for qualifying advanced coal and gasification projects to 30%. 

Table 6. Estimates of coal-related energy-specific tax expenditures, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Tax Provision FY 2010 FY 2013 FY2016 

Amortization of Certain Pollution Control Facilities - "-~- -- -- -~---- ~ - -------- --· -----------

--~~~~~!!~t ~~~~~-!~~~_t_ !~. ~~E!:?.~-~~~~~~~]!!!i~~---" 

_. ~~,el_!~~-<?~l~~-~~~-~~~~~!-~_f_~gy~!!~~-s -~-~-~'?~I __ 

~~~E~f~~~-t!~~i-~~-~~e-~~t __ 

_ ~)l:c_I':J_~i_<?~-~f.?E~-~~~!-~~':1~~-~~-fo! .. !?i_~a-~1-~ES~~~-~-i-~~!~------ _ 

_ f'artial_ E_xpensinJ!for_"_d\la~cedl\,1ine_5afE!tyEg!Jipment .. 

-~-i-~~B~-~-~~-~-:r:~~~~i~lt~~~~i~ 

--~~Y?~~~~--~!_1-~!~-~-~~~!~-~~ri_"!~ fa_c_i.i!.!Y ~f.lY.~~!~~r_l!T~~-9"~-~i_! __ . _ 

Subtotal Coal Tal(_Expenditures 

Alternative Fuel Production Credit (Synthetic ;oa,l,-~~ke ~~d ~oke oven gas, and 

Ste".lln_d_ustry f~el.l_ 

Total 

110 417 

264 188 

55 94 ... 

30 42 

31 

28 

506 801 

187 10 

693 811 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "~"symbol 

denotes a zero value. The advanced energy manufacturing facility investment tax credit or sometimes called advanced 

energy property credit was allocated by fuel using data appearing in: https:/ /energy.gov/articles/energy-departmentannounces-150-million-tax-credits-invest-us-clean-energy-manufacturing (Phase II of Section 48C) and IRC Section 48C 

Certifications at https:/ /www.irs.gov/businesses/irc-section-48c-certifications, accessed March 20, 2018. 

500 

160 

150 

40 

30 

24 

0 

906 

906 

Sources: Tax expenditure estimates: Office of Management and Budget, Analytical Perspectives, Budget af the U.S. 

Government, Fiscal Years 2012, 2015 and 2018. Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal 

Yeors 2016-2020, JCX-3-17 (Washington, DC, January 2017), Table 1, Joint Committee on Taxation, Estimates of Federal Tox 

Expenditures/or Fiscal Years 2012-2017, JC5-1-13 (Washington, DC, February 2013), Table 1, and Joint Committee on 

Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2010-2014, JCS-3-10 (Washington, DC, December 2010), 

Table 1. 

Renewable energy including biofuels. In FY 2013, 44% of energy-related U.S. tax expenditures were for 

renewable fuels. At $5.7 billion, renewable-related tax expenditures in FY 2013 were down 36% from 

$8.9 billion in FY 2010 (see Table). Ethanol and biodiesel both provide sizable volumes of the U.S. liquid 

fuels supply, and their market penetration has increased as the result of several policies that have 

resulted in significant income and excise tax expenditures. The excise tax policies had large fiscal 

impacts for the biodiesel industry. The biggest change for renewable energy since FY 2010 was 

attributed to the expiration of the alcohol fuel tax exemption, which received $6.3 billion in FY 2010 but 

has since decreased to zero. The biodiesel mixture credit increased from $1.7 billion in FY 2013 to $2.7 

billion in FY 2016 as a result of greater domestic biomass-based diesel production and foreign imports of 

these products. Examples of renewable-related tax provisions include 

U.S. Energy Information Administration I Financial Interventions and Subsidies 22 
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Apri/2018 

• Biodiesel Mixture Credit (26 U.S.C. 6426). A tax credit was created by the American Jobs 

Creation Act of 2004 and later amended and extended various times. The biodiesel mixture 

credit-often referred to as the biodiesel blenders tax credit-had expired in previous years but 

Congress restored the credits retroactively. Qualified taxpayers may claim the biodiesel mixture 

credit, at $1.00 per gallon, when the applicable amount of biodiesel or renewable diesel is 

blended with petroleum diesel for sale or use in a trade or business. The credit is applied against 

the federal sales tax for diesel fuel imposed by 26 U.S.C. Section 4081. Biodiesel and renewable 

diesel blending activity wanupported by EPA's Renewable Fuels Standard, which mandates the 

incorporation of biofuels into the nation's fuel supply, with biomass-based diesel final volume 

requirements in 2015 and 2016 of 1.73 and 1.90 billion gallons, respectively. largely because of 

the renewable fuel standard (RFS), the fiscal impact increased from $1.7 billion in FY 2013 to 

$2.7 billion in FY 2016. The biodiesel mixture tax credit expired at the end of 2016 but was 

retroactively applied to 2017 as part of the Bipartisan Budget Act of 2018. 

• Production Tax Credit (26 U.S.C. 45) The PTC is frequently referred to as the Section 45 credit 

for its applicable provision in the IRC. 14•

15 It provides an inflation-adjusted tax credit worth 2.4 

cents per kilowatthour (kWh) in 2016 to qualifying electricity production from wind energy 

facilities. It also provides a half-value credit of 1.2 cents per kWh for qualifying electricity 

production from closed-loop biomass, geothermal, solar, open-loop biomass, incremental 

hydroelectric, marine, tidal, and certain other waste energy facilities not claiming the 

Investment Tax Credit. The production tax credit for renewable resources is reported to have 

totaled $1.4 billion in FY 2016 versus $1.7 billion in FY 2013. Wind power was the primary 

beneficiary of this credit in FY 2016, which includes facilities built from 2006 through 2016. With 

enactment of ARRA, wind energy also became eligible for the investment tax credit (lTC). 

Because of the ability to exclusively claim one of these three subsidies during the FY 2010 and FY 

2016 timeframe and because of the different temporal impacts of these provisions, it is not 

possible to accurately determine how much wind (or other similarly affected renewables) 

claimed the PTC or lTC for either year. EIA has generally assumed that wind energy projects will 

prefer the PTC over the lTC, and so assumed that those projects not taking the Section 1603 

grant received the PTC instead. 

The Energy Investment Tax Credit (26 U.S.C. 48). The lTC, also referred to as the Section 48 

credit, is the sole federal tax credit currently available to commercial solar facilities. It is also 

available as an alternative to the PTC discussed above. Originally established in the 1970s at a 

14 1n the FY 2007 version of this report, the PTC was reported aggregated with the lTC as the "New Technology Credit", to be 

consistent with OMB reporting. However, current reporting separates these two business credits. EIA's FY 2010, FY 2013, and 

current report presents the PTC and lTC separately. 

15 Note that Section 45 of the Internal Revenue Code now contains several provisions that are accounted for elsewhere in this 

report. This report will reference only the renewable electricity production as the PTC. 

u.s. Energy Information Administration I Financial interventions and Subsidies 23 
90 

Apri/2018 

value of 10%, the Energy Policy Act of 2005 (EPACT OS) temporarily increased the lTC value to 

30% of capital costs and modified the expiration date for projects entering service by the end of 

2019 and then ramped down to a value of 10% of capital cost for projects entering service by 

the end of 2022 and continued at the 10% level in perpetuity. The lTC is also known as a 

business credit and does not apply to projects owned by individuals. The credit for residential 

energy efficient property, also worth 30% of investment costs, was subsequently established for 

individual (residential) owners of solar and other end-use equipment. This latter credit reverted 

to zero at the end of 2016. ARRA expanded the scope of the lTC to include most renewable 

electricity technologies. However, EIA estimates that most of the more than $2.0 billion FY 2013 

lTC tax expenditures went to solar and other end-use equipment and that other eligible 

renewables 'claimed either the PTC or the Section 1603 grant. This represents a 14-fold increase 

in expenditures for the lTC between FY 2010 and FY 2013. 

Table 7. Estimates of renewable-related energy-specific tax expenditures, FY 2010, FY 2013, and FY 

2016 

million 2016 dollars 

Tax Provision 

Biodiesel Producer .Tax Credita 

-~£1!~~~~~~~~-~~t!~~~~~~I~--~ . 

FY 2010 FY 2013 FY 2016 

-· ~-'!~~~ J~~~~~-~.~~~-~re~J-~.-- 143 ...... 2,03~ ....... ,1,1.9(). 

. (;re<Jitfor.fjoldin~.Cieiln.R.e.n~V/a.ble. En~rl,!\' B()~ds~ 77 73 70 

_ -~~~~~~~~!-~-~~~ ,~~~~~-~~.~~~!!11?_~!~-~~LP_r?~~~~r~I~~ -~~~~!~~, __ 

.. JIIcoh()lf.uel(;redits 

22 21 30 

77 42 10 

--~~~~-~~~d -~-1!-~~~y -~-~~-~f?~~!~E~f'l~ £.~~i!~!Y"_If'l~~~-!~~-'!~-~ ~~- f:~~d~~­

A!ternative Fuel Production Creditc 

-·-~!~q~~~-~l!~I--~~~~R!~l?.~~-

Total 

138 139 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "~"symbol 

denotes a zero value. The credit for business installation of qualified fuel cells and microturbine power plants is part of the 

energy investment tax credit {Section 48 of the internal revenue code}. The advanced energy manufacturing facility 

investment tax credit or sometimes called advanced energy property credit was allocated by fuel using data appearing in: 

https:/ I energy .gov /artides/energy~department-announces~ 150~million·tax~credits~invest~us-clean-energy~manufacturlng 

{Phase II of Section 48C) and IRC Section 48C Certifications at https:/ /www.irs.gov/businesses/irc~section-48c-certifications, 

accessed March 20, 2018. 

6 

Sources: Tax expenditure estimates: Office of Management and Budget, Analytical Perspectives, Budget of the U.S. 

Government, Fiscal Years 2018, 2015 and 2012. Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal 

Years 2016-2020, JCX-3-17 {Washington, DC, January 2017), Table 1, Joint Committee on Taxation, Estimates of Federal Tax 

Expenditures far Fiscal Years 2012-2017, JCS-1-13 {Washington, DC, February 2013), Table 1, and Joint Committee on 

Taxation, Estimates of Federal Tax Expenditures far Fiscal Years 2010-2014, JCS-3-10 (Washington, DC, December 2010), 

Table 1. 

•The alcohol fuel exemption (VEETC) is essentially the excise tax exemption equivalent to the alcohol fuel credits. The 

biodiesel producer tax credit is the excise tax exemption to the biodiesel and small agri-biodiesel producer tax credits. These 

are both listed as footnotes in OMB's Analytical Perspectives tax expenditure tables, which includes energy tax expenditures. 

'In addition, the provision has an outlay effect of $10 million, $40 million, and $30 million in FY 2010, FY 2013, and FY 2016, 

respectively. 

U.S. Energy Information Administration 1 Financial Interventions and Subsidies 24 
91 

Apri/2018 

C"fhe alternative fuel production credit in FY 2010 and FY 2013 went primarily to coal. 

Natural gas and petroleum. Natural gas and petroleum-related U.S. tax expenditures decreased from 

$2.3 billion in FY 2013 to an estimated revenue inflow (versus a positive tax expenditure) of $940 million 

in FY 2016 thus in aggregate becoming a set of revenue-generating tax provisions to the government in 

that fiscal year (Table ). 

• The Temporary 50-Percent Expensing of Equipment Used in the Refining of Liquid Fuels (26 

U.S.C. 179C) Established under the Energy Policy Act of 2005, Section 1323, this provision is 

available for qualified refinery property used for processing liquid fuel from crude oil or qualified 

fuels and allows for an accelerated recovery of the cost of certain refinery investment under 

Section 179C ofthe IRC by allowing a partial expensing ofthe cost. It is estimated to have 

reached $625 million in FY 2013 to become a generating revenue item for the federal 

government with a.n estimated revenue of $1.8 billion in FY 2016. 

• The Expensing of Exploration and Development Costs (26 U.S.C. 263(c) and 291) This provision 

allows energy producers, principally oil and natural gas producers, to expense exploration and 

development (E&D) expenditures (to include certain intangible drilling and development costs) 

rather than capitalize and depreciate them over time. The FY 2013 tax expenditure is estimated 

at $573 million. In FY 2016, this sector generated an estimated $450 million in revenues to the 

federal government. 

Table 8. Estimates of natural gas- and petroleum-related energy-specific tax expenditures, FY 2010, FY 

2013, and FY 2016 

million 2016 dollars 

Tax Provision 

Alternative Fuel and Fuel Mixture Credit ----~·----~~---- "'' '****" -- •«««* ---" **** "****~· * ** --

__ Exc~ssofJ>e.rcent~~"gv_er C_ost [)"ele_ti_on __ 

~?-~~~<!~§~~-l?.i.~!~!.~.u.!~?!!_~~!?~!i_~~~-~!~'!~~I~~~!~.~ ~-~ ~?.-.~~~~.P!OJ?~~'( 

__ i\rngrtiz~J\11 _Geologic_al.an_d_Geg!'hxsica.I_Exp_ef1ditllresgver_2.'fears_ 

Exception from Passive Loss limitation for Working Interests in Oil 

-~E~-~~-~~~~-

. ~~p-~~~!ry_~ '?!_ ~~~~~,~~~~- ~.~~--1?-~~~}~J?.r'!!.~~.t~!:>~!~ -· 

~~~.e_C?~~-ry_?_q:~~~c_t:~!~~R~.~~!~$_!~~ ~~~!P~~f!~ ~~~~ _i_~_t~-~ -~-~~':l!n_s_of ~19~-i~ ~~el~ 

_ Expensin~of CaP.itaiG()ods ;yith_R~spect to Complyin~ with EPA Sulfur Re~ulations. 

Total 

FY2010 

197 

... 1,079 

132 

33 

440 

837 

FY 2013 FY2016 

365 590 

552 410 

104 140 

104 70 

21 60 

573 J4S_0! 

62S -· ... (1,76()L 

(940) 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a '~"symbol 

denotes a zero value. A portion of the tax expenditures, but indeterminate amount, of the Excess of Percentage over Cost 

Depletion and the Expensing of exploration and Development Costs goes to coal. 

Sources: Tax expenditure estimates: Office of Management and Budget, Analytical Perspectives, Budget of the U.S. 

Government, Fiscal Years 2012, 2015 and 2018. Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal 

Years 2016-2020, JCX-3-17 (Washington, DC, January 2017), Table 1, Joint Committee on Taxation, Estimates of Federal Tax 

U.S. Energy Information Administration I Flnanclallnterventions and Subsidies 25 
92 

Apri/2018 

Expenditures for Fiscal Years 2012-2017, JC$-1-13 (Washington, DC, February 2013), Table 1, Joint Committee on Taxation, 

Estimates of Federal Tax Expenditures for Fiscal Years 2010-2014, JCS-3-10 (Washington, DC, December 2010) 

Nuclear. The estimated expenditures for nuclear-related tax provisions fell from $1.2 billion in FY 2013 

to $160 million in FY 2016 (Table). Nearly all of this decrease stems from the tax treatment of qualified 

and nonqualified nuclear decommissioning trust funds. Because these particular revisions to the Internal 

Revenue Code were not itemized by OMB for FY 2010 and FY 2013, EIA relied on the estimates of the 

value of these tax expenditures prepared by the JCT. A small portion of the advanced energy property 

tax credit was also directed to nuclear facilities. An example of these provisions is below: 

• The Modification to Special Rules for Nuclear Decommissioning Costs (26 u.s.c. 468A). Section 

1310 of EPAct2005 changed the IRS rules for qualified nuclear decommissioning trust funds by 

repealing the cost of service requirement for contributions to a qualified decommissioning trust 

fund created under IRC Section 468A. This change permitted full present value funding of a 

qualified nuclear decommissioning fund and the transfer of pre-1984 decommissioning funds 

held in nonqualified trusts. The provision also required that nuclear plant owners obtain a new 

schedule of ruling amounts from the IRS upon renewal of a plant's operating license by the NRC. 

In FY 2016, EIA estimates the value of this tax expenditure was $160 million versus $1.2 billion in 

FY 2013. Modification of section 468A of the IRC was done to eliminate an impediment to 

nuclear plant sales arising from the structural change in the electric utility industry. 

Table 9. Estimates of nuclear-related energy-specific tax expenditures, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Tax Provision FY 2010 FY 2013 FY 2016 

-~~~.~~~~~~~-t:~!?~l!!!~~~~r:'!~~~ 

~~Y~~r:s:_~~~E~,~~~~.~.~~-~f~~u~~~.':!~U=.?~i!!~Y, l.ny~~~~~"! T~~. c~~d~~ 

Credit for Production from Advanced Nuclear Power Facilities 

991 1,146 160 

9 9 0 

----···-.---------·-···-----------------·-- -------------·--··------------------· 

Total 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "-''symbol 

denotes a zero value. The advanced energy manufacturing facility investment tax credit or sometimes called advanced 

energy property credit was allocated by fuel using data appearing in: https://energy.gov/articles/energy-departmentannounces-150-mi!lion-tax-credits-invest-us-dean-energy-manufacturing (Phase I! of SectiOn 48C} and IRC Section 48C 

Certifications at https://www.irs.gov/businesses/irc-section-48c-certifications, accessed March 20,2018. 

Sources: Tax expenditure estimates: Office of Management and Budget, Analytical Perspectives, Budget of the U.S. 

Government. Fiscal Years 2012, 2015 and 2018. Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal 

Years 2016-2020, JCX-3-17 (Washington, DC, January 2017), Table 1, Joint Committee on Taxation, Estimates of Federal Tax 

Expenditures for Fiscal Years 2012-2017, JCS-1-13 (Washington, DC, February 2013), Table 1, and Joint Committee on 

Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2010-2014, JCS-3-10 (Washington, DC, December 2010), 

Table 1. 

Efficiency and conservation. The nine energy efficiency- and conservation-related tax provisions have 

collectively increased from $2.7 billion in FY 2013 to $3.2 billion in FY 2016, with the tax credit for 

U.S. Energy Information Administration I Financial Interventions and Subsidies 26 
93 

Apri/2018 

residential energy efficient property accounting for an expenditure increase of $0.5 billion (Table ). 

Examples of these provisions include 

Credit for Residential Energy Efficient Property (26 U.S.C. 250). EIA estimates that this credit 

had a value of $1.5 billion in FY 2016 and $1.0 billion in FY 2013. Section 1335 of EPAct2005 

established a 30% personal tax credit, not to exceed $2,000, for the purchase of solar electric 

and solar water heating property. A 30% tax credit up to $500 per O.S kilowatt (kW) of capacity 

is also available for fuel cells. The fuel cell provision of EPAct2005 was due to expire at the end 

of 2007. It was extended through the end of calendar year 2008 by Section 206 of the Tax Relief 

and Health Care Act of 2006 (Public law 109-432). Section 106 of EIEA2007 removed the cap on 

the tax credit for purchase of residential solar photovoltaic installations and extended the credit 

to December 31, 2016. Section 104 of EIEA extended the credit to include small wind properties 

(under 100 kilowatts) through December 31, 2016; and, Section 105 extended the tax credit to 

include geothermal heat pumps through December 31, 2016. Finally, Section 1122 of ARRA 

removed some of the previous maximum amounts and allowed a credit equal to 30% of the cost 

of qualified property. 

• Credit for Energy Efficiency Improvements to Existing Homes (26 U.S.C 25C). This credit was 

established in EPAct2005, Section 1333, and it is estimated at a value of $530 million in FY 2016, 

down from an estimated $636 million in FY 2013 with most of this decrease traceable to the 

higher credit amounts made available due to ARRA. This credit applies to windows, furnaces, 

boilers, furnace fans, and building envelope components, such as exterior doors and any metal 

roof that has appropriate pigmented coatings. 

Table 10. Estimates of conservation, efficiency, and end-use energy-specific tax expenditures, FY 2010, 

FY 2013, and FY 2016 

million 2016 dollars 

Tax Provision 

_ Cre_ditf()r R_esidential Ener_ey Efficient ~r()eertv ... 

.. ~~~-~l!_f9~~~-':!~E$Y~_~ffi~~E;~~y !~J?£?.~~1!'~~!~-~'?-~~~i-~!l~~ ~~!:!1~~--­

J~~-f~~~!!.~!!~--~~-~~-~!~r:tJ'?!:_q~~~r:~~~~~l~~- ~!!-~!~~~~-

-~~~~~-~!<:'~}!<?_!!l __ !!!c~~-~-<?f ~.<?':!~~~_at~o~ .. ~u~~~~l~s_ P_~<?":!.d~~ ~Y Pu~l_ic_ l!~i!i~-i~~ __ 

Credit for Construction of New Energy Efficient Homes 

All~;~;n~e. to;·t-he· Oed~Ction·af c·erta·~~- E~~~gy Effl~ient c-~~~~rcia·,· Suii~ilng 

_PrOJl<lrtY 

. g_ualified __ Ener![yCol1se_rva_tionB()nds _ 

_ ~~-~~~~~~-~~!"~~~~. ~~~_l}fa_~~u-~i-~~t~~~-i_l~ty .!l_l~e?t.~~_nt_} ~x_ C~edit 

(;re_dit_f_or_Ene_l}I}'Eflicient~ppliances __ _ 

Total 

FY 2010 FY 2013 FY 2016 

242 1,000 1,450_ 

3,511 636 530 

275 281 480 

242 354 430 

22 156 210 

66 73 80 ~-····~ ·-···· .. 

21 30 - -· -~- . - .. ·-·-·. 

43 ---- " ..... _59 __ -- 3 

165 156 

2,737 3,213 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "-"symbol 

denotes a zero value. The advanced energy manufacturing facility investment tax credit or sometimes called advanced 

energy property credit was allocated by fuel using data appearing in: https://energy.gov/articles/energy·deeartmentU.S. Energy Information Administration I Financial Interventions and Subsidies 27 
94 

Apri/2018 

announces-150-million-tax-credits-invest-us-clean-energy-manufacturing (Phase II of Section 48C) and IRC Section 48C 

Certifications at https:/ /www.irs.gov/businesses/irc-section-48c-certifications, accessed March 20, 2018. 

Sources: Tax expenditure estimates: Office of Management and Budget, Analytical Perspectives, Budget of the U.S. 

Government, Fiscal Years 2012, 2015 and 2018. Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal 

Years 2016-2020, JCX-3-17 (Washington, DC, January 2017), Table 1, Joint Committee on Taxation, Estimates of Federal Tax 

Expenditures for Fiscal Years 2012-2017, JC5-1-13 (Washington, DC, February 2013), Table 1, and Joint Committee on 

Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2010-2014, JCS-3-10 (Washington, DC, December 2010), 

Table 1. 

Electricity transmission and grid network. Transmission-related tax expenditures fell from $219 million 

in FY 2013 to $160 million in FY 2016 (Table ). This decrease is largely a result of the decrease in 

estimated expenditures from transmission property treated as 15-year property, which fell by more 

than half from FY 2013 to FY 2016. Examples of these provisions include 

• The Transmission Property Treated as 15-year Property (26 U.S.C. 168(e)). This permanent 

provision was set forth in Section 1308 of EPAct2005 and modified Section 168 of the IRC by 

shortening the recovery period for specified assets from 20 to 15 years. To be eligible, an asset 

must be used in the transmission of electricity following sale of the property or related land 

improvements. Specifically, this applies to Section 1245 property, (i.e., personal property and 

real property subject to depreciation or amortization) used in the transmission of electricity that 

is energized at 69 kilovolts or more. The provision applies to transmission facilities placed in 

service by the taxpayer after Aprilll, 2005, but excludes any transmission facilities for which 

the taxpayer or related party had entered into a binding construction contract for or initiated 

self-construction on or before Aprilll, 2005. This tax provision is permanent, under current 

statutes. 16 For FY 2016, the estimated value of accelerating the standard recovery period by five 

years is $100 million, down from $208 million in FY 2013. 

Table 11. Estimates of electricity transmission-related energy-specific tax expenditure, FY 2010, FY 

2013, and FY 2016 

million 2016 dollars 

Tax Provision FY2010 FY2013 FY2016 

Transmission Property Treated as Fifteen-Year Property 

~~D~i~~~~~~f·G~~~~·f~~~ ·oi;p~~iti~~~~~t"T;~~~;~i~;i~;;--p~~P~rtY· to lmPI~;;,~~~t FER(, 

,~.~~~!~~~!~!!!!~~P!!!i~. 

--~~.~~~~~~-~~~~&Y. .~~~-'-:lf?~U-~l_~:t~t~~~i.l~~ ~f_lY~~t-~~-f_l~-!~~- ~~~-d!~ _ 

.. ~::Y_~a! .. ~~-t 9P~E~!!~g-~~~~ ~~rryg~~! f~~ ~lec_t~i-~-T~af_l~mi~si~f_l- ~~~~P~-~-~~­

Total 

110 208 100 

(55! 60 

8 11 0 

Note: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "-"symbol denotes 

a zero value. The advanced energy manufacturing facility investment tax credit or sometimes called advanced energy 

property credit was allocated by fuel using data appearing in: https://energy.gov/artlcles/energy-department-announces16 Joint Committee on Taxation, Report to the House Committee on Ways and Means on Present Law and Suggestions for 

Reform, Tax Reform Working Groups submissions, JC5-3-13, May 6, 2013. 

U.S. Energy Information Administration I Financial Interventions and Subsidies 28 
95 

150-million-tax-credits-invest-us-clean-energy-manufacturing (Phase II of Section 48C) and IRC Section 48C Certifications at 

https://www.irs.gov/businesses/irc-section-48c-certifications, accessed March 20,2018. 

Sources: Tax expenditure estimates: Office of Management and Budget, Analytical Perspectives, Budget of the U.S. 

Government, Fiscal Years 2018, 2015 and 2012. Joint Committee on Taxation, Estimates of Federal Tax Expenditures far Fiscal 

Years 2016-2020, JCX-3-17 (Washington, DC, January 2017), Table 1, Joint Committee on Taxation, Estimates of Federal Tax 

Expenditures for Fiscal Years 2012-2017, JCS-1-13 (Washington, DC, February 2013), Table 1, and Joint Committee on 

Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2010-2014, JCS-3-10 (Washington, DC, December 2010), 

Table 1. 

U.S. Energy Information Administration 1 Financial Interventions and Subsidies 29 
96 

Direct expenditures, in contrast to tax expenditures, involve the transfer of congressionally appropriated 

funds to recipients by federal agencies. The enormous volume and diversity of federal direct 

expenditures makes it very difficult to assign energy-related activities to specific aspects of the energy 

system. As discussed in the Analytic Approach section, EIA has developed several powerful methods of 

obtaining and processing federal expenditure data; the resulting estimates in this section are 

nonetheless subject to scope and measurement issues. 

This section follows the outline of the previous section, but adds information on agency-specific 

activities to the energy-specific discussions. 

Table 12 shows the most comprehensive picture of the direct expenditure amounts estimated for each 

part of the energy system. As described in the Analytic Approach section, the Catalog of Federal Direct 

Assistance (CFDA) is the primary source for program information as well as CFDA coding for both agency 

and program designations. 

Renewable energy facility construction (the Energy Investment Grant) and low-income energy assistance 

(LIHEAP, energy efficiency block grants, and weatherization) have dominated direct expenditures for 

energy over the three FY periods displayed in this report. Direct expenditures in these two areas 

accounted for nearly 67% of the FY 2010 total, with their percentage rising to 89% in FY 2016 (see Figure 

8). Of more than 35 direct expenditure programs in Table 12, 7 programs accounted for between 92% 

and 95% of the total direct expenditures over the three FY time periods of interest in this report. 

million 2016 dollars 

18,000 

16,000 

8,000 

6,000 

0 

Source: Table 12. 

U.S. Energy lnform<Jtion Administration I Financial Interventions and Subsidies 

Green Jobs Innovation Fund Grants- 17.275 

Energy Efficiency and Conservation Block 

Grants Program - 81.128 

30 
97 

Apri/2018 

Tables in this section summarize the energy-specific categories with respect to the total set of direct 

expenditures in Table 12 and also sort by the 15 energy-specific categories. 

Textbox: Federal direct purchasing of designated energy products 

A set of overlapping federal programs aimed at direct acquisition of renewable, sustainable, resilient, or 

other designated energy resources has seen rapid growth in recent years. Driven in part by statute and 

Executive Orders, these programs allow or require federal organizations to use certain energy resource 

acquisition procedures, sometimes on a pooled or regional basis. 

The definition of direct federal financial interventions (or subsidies) used in this report would generally 

only include federal energy purchases that add incremental cost and are intended to provide market 

support for the purchased resource. Because federal acquisition programs pursue a wide variety of 

goals-both operational and policy-related-such a determination is often difficult to make. To date, EIA 

has not included federal energy acquisition programs in the report tables or summaries. 

Without determining what portion of these activities might be considered subsidies or market 

interventions, data from federal programs, both Defense and non-Defense, indicate the magnitude of 

direct energy acquisition activities in FY 2016. 

Defense. The Department of Defense FY 2016 Operational Energy Annual Report includes accounting for 

more than $46 billion in Defense-related energy purchasing in FY 2016. Of this, slightly more than $1.8 

billion is considered to be Operational Energy Initiatives that encompass a wide variety of activities. 

Research and development, field testing, pilot deployments, energy-reducing measures, and purchases 

of specific fuels (typically renewable energy sources) are all included. 

Non-Defense. The Federal Energy Management Program (FEM.P) and the General Services 

Administration {GSA) are responsible for most non-defense federal energy acquisition activities. Much of 

this activity is related to the March 2015 Executive Order on federal facility sustainability planning, 

which is summarized in a DOE progress report. 

U.S, Energy Information Administration I financial Interventions and Subsidies 31 
98 

Table 12. Estimates of direct expenditures in energy, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Department and Program • CFDA Number FY 2010 FY2013 FY 2016 

.IJ . .S, De.!'!''!_m~nt.()f~~ultiJ.'''··­ 364 139 97 

.. Rur:af.E11er~. for )lfT\eric.af'ro~r•rn.:.:tO,B.6S. .. 

Biofuel.lnfrastr!Jct.ure.;::a.rtnership -}0.112 

... Bioenerzy .P.ro~r:•rn. for.)ld~a~C<'dijiofiJels: .10,8~7 ... 

-~~9-~.~~~~<;~~p- ~~-~j~~-~~-~~ ~~9~~~-~-- }9 .. ~Q?? 

~--- D~E~-~~i .~<!_l!!~!~~l~r:~~~~J~~~Ery_~-~~Q}~g __ 

.!lssis.tance to H.i&h.Er1.er~y C()st. Rur111 Commu11.ities -10 .. 8~9 .. 

Su11 Gra~tPr()~ram.:1,0320 

... VIJo.od 1Jtilizatioll.~sistar~c•.:.10.(i7<!. 

..... Bio(liesel (ijio(liesel£u.ei.Educati()nj>rograrl1)- ~0:306 .. 

ijiorefinery )lssistance :.1(),8£;5 ... 

. ... ~tateBulk.Fuei.R.evolvingFund.Grants.: 10,8.57. . 

.... For.estBiorn.assfor:.E11ergy: 10.61!6 .. 

..... Repov;eri_ng,)lssistance.:1,0,866 ... 

. . . co.m.~nurlity VIJ.o()df.n.erzy.Prograrn :10,6.85.. 

,_u,~,~p~men,t.e>!. E••••r.gy. ····--

., -'-~----------------

55 

21 

- ---~~~!!!~!J~~!~'?!!_~~~!S!~"r:!~~-f?~- ~~~--~~~~~~ f~i~?-~~-~ _?_~:'?'!~ .. 

... _5tateEnergy.P£O!Ir•l1'l·. 81,()41_ 

..... ~ .... - ..... 1,811! 

784 

Energy Efficiency and Renewable Energy !nforffiati~n Dissemination1 Outreach, 

__ }'r~!~}-~-~-?.r:!? "!"~-~!!':l.i~~~-~~~~y~i-~_/~~s!~!~-~c-~_-:.~~~·!~? __ _ ..... Epidernlol~gyandOth_erH.ea.lth StudiesFi11•11cial Assista_nc_eP_rografT\·.8.1,.108 ... 

.... Exp.and and~Ex~tend_ Cl.ea.nCoal Power.lrliti~tive. ~8.1 .. 1~1 

·~. State.E~er.gy P£ogra.n1.Specil!I_Pro)ect5.: .. 81.119 .. 

Nuclear Waste Disposal Siting· 81.065 

---- ·r~~~~P~rt~(f~~~~~r-;~-i~w~-~t~;to -th~-w~~te-,~-o!ati-~~"'Pi,~t-Ptant;-stat~·s­

:rribal. Co.ncern_s,j>r()p()SI!d~Sol~ti()r\S~ 131,10.6 .. 

lnd~strial_t:ar~~n_(_ap.tu!~.•r><f.?tor_ag_e (C~C?).I\pJ'Iica~i()n_: 81,134. 

(:ar~~n Capture_ar1~ .St()rag_e:F.utureG.•.f1.2,0- 81,13() 

.. ~State.Hea~til1g()il.and ~ropane_;>rogr<lln .:.8Ll38 

Energy Efficiency and Renewable Energy Technology Deployment, 

Demonstratio':l_~fld Commercialization~ 81.129 

National industrial Competitiveness t-hrough Energy, Environment, and 

Economics- 81.105 -~-- -- -~--- ----·------ ---- ~e~!~~!~ ~-~!=ll!!~!~~~,i_q~ ~i-~~-~-~~~~~-~~!:i.~~~lC?_~_-:, ~~·}_?_~ __ 

. En".r!IY. Efficie~c~.a n_dc_onservation Block~ Gra.nt. Pro~gra.m_(EECB§l .. -.~81:128 .. 

... .. EnerzyEfficient A_ppli11f>~ef1ebate Progra~nlEEARPJ -_81.127 .. 

. Office ofScientificand~Te_chnicallnfor.'l1ation: 81.0fi4 .. 

flegional Biomass .E~".rgx.Program_s :. 8.1,07.9 .. 

!~~~-n~!~_I}_S~~~-~--~-~-~-~~~-~~fl~--~-.?-~_·9}~--- _ 

_ U.?, _D"!'a_rtm<!ltll)f H<!alt.h_ an_d Hum!" .. ~e~ices 

Lo;v l~comeHo~neEner&V_Assistance -93,568.._ 

U.S. Energy Information Administration 1 Financial Interventions and Subsidies 

42 

46 

40 ---- 62 

549 .. 

214 

45 35 

15 

49 14 

9 10 

16 . 8 -----

14 6 ---· 

5 

3 3 

(0). 1 

313 182 

212 46 

47 31 ~ .. -~ .. --- . -·-

13 14 

52 

11 

5 

298 

24 

0 

1 ---·-

436 

(O)-

11 

7 

6 

4 

1 

0 

3l 
99 

April 2018 

Table 12. Estimates of direct expenditures in energy, FY 2010, FY 2013, and FY 2016 (cont.) 

million 2016 dollars 

De"'art_ll11!11!1'"d Pr21!ram - Q'D~ Nuonl:>er_~-~--- -~~~--- _ _ _ _ _______ FY ~010 .. _ FY 2013 FY2016 

u,_s. Depart_m<!ntof_li()usin~ and Urban eevel()prnent _ (2) 

Assisted Housing Stability and Energy and Green Retrofit Investments Program14.318 

_ _ _Multifamily En_e~~y_lnn()vauor~Fun(j:_143l9 __ _ 

U._s. Depart_mentoHabor 

259 

259 

499 (2) 

j2) 

(0) 

,, -~,~~~~-~}<?~~~ !!:'~9-~!~io~ -'=~-~~-§!_~!1-~~-:-~7:~2?_~­

u.s. Department of State 

~-s~-re;;,Qiwe.t<;~ iie;;;~;;iiereAfia;;:5(WfiA)Gre~i-rroiraffi~-(including e-;,e;gy-·- - ~nd(:lirna_tePartne_r:shipforthe Americas): 190

7_50 __ ... 

_ fe(jeral ()ilan_d Ga_s _Roy~lty l\.l_anagefl1ent~ta_te_a_nd _ _Tr~bal<;oor_din."tion_·_,lS.·<I27 

Science and Technology Projects Related to Coal Mining and Reclamation15.255 

.... BOE_I\.I_E_nviroflrnental~tudiesj>r()gra_rn:_15_,423 . 

___ ~i-~~r~l~- a_r:t~. -~!'!!!:!~t?n_!~d!~~ -~a_':l_c!~. :-~~.g~-~-­

_____ I,O(Jisia~a _State_IJfliversity (LSU) C:o_astai_Marine_lnstitute C_MI :.15,4_2? .. 

Energy Cooperatives to Support the National Coal Resources Data System 

_(NCRDS)-15.81~---

... Jrib."l ~n~r~y_Develo~m~(lt_Ca_p."city_§rants :1.5,148 

.IJ:S:I>•P."'!rn.•fl!_o~!r_ansl"'rt1!~()n _______ -~~- ---·~--

... f>ipe_li(le_~fety_Pr_o~r•rn. Sta!e_Ba.s<!Gri>n_t- ?O, 7_QQ_ 

_ f'fiiV1SA_j>ipeli_ne _ _5afe.ty~roj!rarl1QneCa_ll_(jrant :_20.72_1 

·~· .~.iE~~!"!"I_i.s_s_i_~!"!.~ .?!1.~ ~l]_t:~~ -~nl~i~!!!'~~-- ~9.:~!~--

... Hailr~a~ __ Rese_archa_nd[Jev<!IO!'rn<!nt:.2003_13 

Capital Assistance Program for Reducing Energy Consumption and Greenh~use 

Gas Emissions. 20.523 __ ,._. ....... ···-·····-···-

Clean Fuels· 20.519 --- ------ -----· ---------~··· -~· .. 

Energy Investment Grant; Outlay Equivalent for Clean Renewable Energy Bonds; 

« 2~~~~y-~q~~~~-'~!."-t!.!?~-g~~~-~~~~-~-~~~~.f~!l_5.~.~~!!?_~-~'? .. ~~-~----

. ..!2) 

0 4 

--- _____ l() 3 

0 0 0 

272 88 42 

43 46 40 -- .. 

0 

216 15 ~"" 

12 24 

820 

..... 4.678 ..... _8,514 . 

-~-~: .. ~~~~nme~~~!!.~-~~~~~~~~~~ncy _____ ~ _________ 13,4. ____ ..... -111 ....... .. 

820 

45 

.. ~~!~~~-~~-~-~~~~- P!~-~~~-~-1!!~~~!~~~-Re~~-~!~C?~.~L~~-r~.~ .~.§?:Q.3~ . 

State.Cie.an _ _Die_sei_G_ra_nt Pro~rarn.:.66,040 .. 

Nucle~r R~gulatory Comm~~~ion 

-~~U5~NtiC!ear RegulatOi=VCO~-n:;issio~ .. S~t;;;r~;;hiP-~~d F;ti~-;.,shiP Program77.008 

u~S.- N~Cte~;;·Reg~lato~·cc;~,;,issi·O~Mi·no~itY. S~~ing-~~~t-it-~tl~-~~· Pfogram 

l_MISP): 7_7,007 

... u,s. Nuclear Hej!ulatory Cornrnissi()n_t.j(JclearE(j ucati()nGrantj>ro~ram : 77.QQ6 _ 

Total 

101 

32 

··~1.L 

12 

2 

6 

15,427 

14 33 

5 12 

1_6_ ..... ~ .. 16. .. 

15 15 

(()L 

13,450 4,716 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "- 11symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets may be obligated 

and fund prpgrams in subsequent fiscal years. Energy investment grants are commonly referred to as Section 1603 grants 

administered by the U.S. Department of the Treasury. 

U.S. Energy Information Administration l Financial Interventions and Subsidies 33 
100 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

U.S. Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov, website: https://www.usaspending.gov/, 

accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 2017 (FY 2016); and, U.S. General Services 

Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, October 2014) 

https:l/www.cfda.gov/downloads/CFDA_2014.pdf, accessed December 1, 2014 and 2017 Catalog of Federal Domestic 

Assistance, {Washington, DC, October 2017) https:l/www.cfda.gov/downloads/CFDA_2017.pdf, accessed December 1, 2017. 

Table 13. Estimates of research and development expenditures in energy, FY 2010, FY 2013, and FY 

2016 

million 2016 dollars 

Department and Program - CFDA Number 

Biomass Research and Development Initiative Competitive Grants Program 

(BRDI) : 1().31_2 

.... i\&r~cultural R_ese_arch Bask and Applied ~~~~earc~_-_1_0,001 

_ _ll.S: Dep_artment~~fe~s_e_~----- ··-··-~-~-····· 

Basic Scientific Research- 12.431 , _____ . ~ ·····---··--· -- ---····.- ·- .......... -· . 

. . _[lasic,,\p_plie~,an_d i\d•ta_nced fle_searchin_Scienc_e_a_nd En_gineering: 12,6~0 ... 

Re_s~arc~~n_d T_echnol()gy Development: 12.91()_ 

_us. De_par!~n•nt of Enerf/_. 

.... _f()S_sll_ E~e_rgyfl~se~rc~_and ()~veloprn<!f1t: 81.0_89_ 

_fle_ne.>Va_ble E_ne.rrJ_R_ese_arc_h_al1d_D_e~-"loP.rnt!nt:8_1,Q87_ 

Advanced Research and Projects Agency- Energy Financial Assistance Program -

81.135 

Nuclear Energy Research, Development and Demonstration- 81.121 

-'-~~Etect-;:iCitV-Defi~e;y-a;;et~E~e~gy -Re,l~·t;iii'tY:Re~;a~~-h~~o~~~~c;pmen·t and A~alysis ~ 

81.122 

..... Ul1ive_rsityC()a_l_fles_earch_: 8L05J. .. 

_(;."ol~~ic_S€(l_U."stratioi1_Tr~i_nin~_afld_Res_earch _G_rant Program_: 81._133. 

Safety and Environmental Enforcement Research and Data Collection for 

Offshore Energy and Mineral Activities- 15.441 

··· ·ati5tioreliesear<11r!!clirioloi!YC:ente;:ioric)rexa·5 EngineeringEx;)!,riment 

Statio_n_(T_EES):_15,<\2? .. 

__ "!!~~J-~.~-§~-~--t'X~E~~~-~!~~-~r~-~-~~~~~!~1-~~-~ -~-~:~_2_~--­

u.s. Department of Transportation 

-~-PHMsA-Pipeli~-S~f;tYR~search-;~d oe~op;;:;entotherTranSaCtiOn 

Agreements_:_ 20.723 

. _Bio_ba_secj_Tra_ns_p()rtati()n fle_search -_20,?61_ 

Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose 

. Actiltit_ies_fl_elating _t9 th_e_ (;1~~~-Air_,\ct :_6_6,0~4 

U.S. Energy Information Administration 1 Financial Interventions and Subsidies 

FY 2010 

34 

6 

8 

2,2¥ 

321 .. 

610 

29 

FY2013 FY2016 

4 11 ~~ ~ ~~~---~--~ 

5 

4 

0 

2,284 

218 

501 

149 

7 

52 

46 

7 

0 

1,051 

377 

184 

587 454 

184 

151 

174 137 

518 

6 

0 

3 

133 

824 

4 

0 

16 

15 

2 

(())_ 

2 

2 

34 
101 

Apri/2018 

Table 13. Estimates of research and development expenditures in energy, FY 2010, FY 2013, and FY 

2016 (cont.) 

million 2016 dollars 

_ Department and~Pro~ram - CFD~ Nunlb.er 

... fv1atherna.tical.ar1d.f'hysical.~cief1ce.s :.4 7,<)49 ... 

~~~-- ~!:'J~~n_e_~_r!!:~- ~~~-"!~-=-~X:_Q~~-

Nuclear Regulatory Commission 

FY 2010 

407 ~---~~"'·~----~-- --~ _,~·~-~-~~~~-,~~ 

268 

138 

--- u~s.~N~Cie~r-Re&UI~to;v-c~~;;;~~~~~noffiCe-oTR~-;~~rctl Fi·na·ncJ;fAsSist';~c~-

. ProJlrarn ~_77,00.9 ... 

Total 

2 

2,718 

FY 2013 

621 

475 

146 

0 

0 

2,934 

FY 2016 

328 

243 

86 

1,451 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "-"symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets may be obligated 

and fund programs in subsequent fiscal years. DOE and totals exclude DOE's Office of Science, Office of Science Financial 

Assistance Program. 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov- Government spending at your fingertips; 

website: https://www.usaspending.gov/, accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 

2017 (FY 2016); and, U.S. General Services Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, 

October 2014) https://www.cfda.gov/downloads/CFDA~2014.pdf, accessed December 1, 2014 and 2017 Catalog ofFederol 

Domestic Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed 

December 1, 2017. 

Examples of energy-specific direct expenditure and R&D programs 

Coal. Direct expenditures for coal-related programs decreased from $77 million in FY 2013 to $19 million 

in FY 2016, while R&D spending rose from $216 million in FY 2013 to $337 million in FY 2016. Table and 

Table show detailed coal-related program outlays. Examples of coal-related federal activities include 

• Carbon Capture and Sequestration (CCS). DOE's Fossil Energy Research and Development 

program portfolio includes CCS technology research. Coal-centered CCS focuses on postcombustion capture of carbon dioxide (C02) from existing plants and industrial sources. 

Sequestration research aims to provide reliable and safe permanent storage of C02 gas to 

mitigate carbon emission for fossil fuel sources. In 2016, DOE's R&D expenditures also 

supported the FutureGen 2.0 project, an oxy-fuel retrofit of a recently idled 65-year-old facility 

in Illinois. FutureGen 2.0 was a DOE CCS demonstration project, combining all three aspects of 

CCS technology: capturing and separating C02 from other gases, compressing and transporting 

C02 to the sequestration site, and injecting C02 in geologic formations for permanent storage. 

• University Coal Research (UCR). UCR supports hands-on research experience to future 

generations of scientists and engineers. Since the program's inception in 1980, more than $100 

million has been provided and more than 1,700 students have acquired experience in 

understanding the science and technology of coal. UCR projects include a number of diverse 

coal-based studies. In FY 2016, UCR supported projects researching high-tech sensors and 

U.S. Energy Information Administration I Financial Interventions and Subsidies 3S 
102 

Apri/2018 

controls, water management and flue gas desulfurization, and the use of high-performance 

materials in steam turbines. 

Table 14. Estimates of coal-related energy-specific direct expenditures by department and program, 

FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Department and Program - CFDA Number FY 2010 FY 2013 FY 2016 

46 77 12 '~~-·~~··-~---·~-~-

Expaf1d an~_Extend_(;lea'l(;oal Power Initiative_ :.8:l,121 .•. 

.... <:arbon_(;apture_a_n!l ~to_ra![e:F_uture_G_ef1~:0:_81,1_30 .. 

46 52 11 

24 

_1!-~:_D~p-~rtlll~n~-~ th~_lrlt~ri()'_ ______ ·····~··-. ·---- ________ _ 2 7 

Science and Technology Projects Related to Coal Mining and Reclamation -

15.255 (OL_ 7 

.fV1~n."rals_a_n!l_Mini_n~_()nlndian_lan!ls:15.()28 0 0 

Energy Cooperatives to Support the National Coal Resources Data System 

.. (f'J(;RD_S(:_:tS.819 .... 0 0 

Total 77 19 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "-"symbol_ 

denotes a zero value. Appropriations made in either FY 2010, FV 2013, or FV 2016 federal agency budgets may be obligated 

and fund programs in subsequent fiscal years. 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov- Government spending at your fingertips; 

website: https://www.usaspending.gov/, accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 

2017 (FY 2016); and, U.S. General Services Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, 

October 2014) https://www.cfda.gov/downloads/CFDA_2014.pdf, accessed December 1, 2014 and 2017 Catalog of Federol 

Domestic Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed 

December 1, 2017. 

Table 15. Estimates of coal-related energy-specific research and development expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Department and Program~ CFDA Number FY 2010 FY2013 FY 2016 

320 211 335 -~·~~ ~*-~~~-

~ .. f.<?:>~~~-~.~~-~~y~~~~~~~~~~~!l-~-!?!:~~"l.~p-~~1!~ :_?*~:~~~'"' 

__ Uni\'e~sity_C_oai.Hes_ea_rch: .. 8.1,0_57 __ 

318 207 333 

Advanced Research and Projects Agency~ Energy Financial Assistance Program81.135 

National Science Foundation *~·-~~--~ .. ---- ~~---·-·--"~ ------~----~*-----

2 

.s 

.. _ _M~!he_rna_tic:al and Physic a !Sciences:. 4 7,049 

Total 320 216 337 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "-"symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets may be obligated 

and fund programs in subsequent fiscal years. DOE and totals exclude DOE's Office of Science, Office of Science Financial 

Assistance Program. 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov- Government spending at your fingertips; 

website: https://www.usaspending.gov/, accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 

U.S. Energy Information Administration I Financial Interventions and Subsidies 36 
103 

Apri/2018 

2017 (FY 2016); and, U.S. General Services Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, 

October 2014) https:/ /www.cfda.gov/downloads/CFDA_2014.pdf, accessed December 1, 2014 and 2017 Catalog of Federal 

Domestic Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed 

December 1, 2017. 

Renewable energy including biofuels. Renewable energy direct expenditures have varied considerably, 

dropping to $909 million in FY 2016 from $8.7 billion in FY 2013. In each fiscal year, however, the 

overwhelming share of renewable energy direct expenditures came from an ARRA modification of two 

tax expenditure provisions previously discussed: 

• The PTC, where the support amount is based on electricity generation from eligible new 

renewable electricity facilities 

• Two tax credit bonds, the clean renewable energy bond {CREB) and the qualified energy 

conservation bond (QECB) for public-sector renewable projects 

Table 16. Estimates of renewable-related energy-specific direct expenditures by department and 

program, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Department and Program -CFDA Number 

_ _ll:S._I)ep!_'!ITII!"!E!.~ricultu!."...... _. 

--~~~~!-~~~!ID'J9~~ ~~~!l~-~-~!-~~~~!1:'1.:: .. ~-Q:?_~~-­

Biofuellnfrastruc!.ure f>artnershiJ'.:.lQ.117 . 

.... llioen.er!!YProg_rarnf()r_Adyaf1ced_Biofuels_:l0,867 __ 

~~.~~~-~~~-~!!?!?_~s!~-t~~~~-.~~~J~~~~-~-~~·.0~? __ 

.. Su_n_G_rant_l'r()gr:arn.:.l_0,32() __ 

vv()od_l)tilizationAssi~af1C~:.10,67~. 

.... Assistance_ t() __ fiigh_ E_nergy C()st_Rural_ <:o_mmuf1iti_es_:1(J.Il59 .. 

.. llio_diese1J!liodiesel£llei_Edu_cati()n Pro_gram) -10,~06 __ 

~eJ'()Weri_ng Assis~an.ce : 10,8§6_ 

p~-r:'~!i_~<?!!~D~l~~J~~.~~~e~~-f!l_: .~Q~~Q9 __ __ _ 

__ .... r:?Et:~~- ~-~~~~~~-.f~!:-~~~!~t:.~~:~~~- ~~ 

~- . ,~~'?!_t::~-~~-1)'-~~S!S~-~~~-~-:-!Q:~~~--~ 

~9-~~~~-~~y}!'!~~~-~-'::l~~ri-~~~~~-a~- -_~q~6~~ 

_IJ.S. Dep_a_r!111ent ~1_~!!!'!'._~----.... ~---·--­

Energy Efficiency and Renewable Energy Information Dissemination, Outreach, 

__ T~~-!~!-~~" ~-':'~ !!C:~~}~-~L~~~!Y_~_i_~[~_~s!~~a.l!~-~ - ~_1_._1~ ?.~ 

. _ 5!~!.~-~r!e~-~-~r:c:>~~~~!:l.: __ ?~:g~-~" 

~~J~!g_~~l-~_i_~~-'!~~~£1')~~~X.~~~~!_i!!!l~: ~!:9.?~--

0ffice of Scientific and Technical Information- 81.064 

i;;.;;g;,;effi~i~n~v ~;;<i iie.ie;ailieene;&;. iectinology rieplovrlie'Ot; --~~-~~~~-!~~~lo_~-~-t]~-~~t:J:l!!!~!~~a!i_~i!l.~!~t:'.:_?.~.:!f_~---

U.S. Energy Information Administration I Financial Interventions and Subsidies 

FY2010 

19 

21 

269 

2 

4 

288 

23 

262 

0 

.. 

FY2013 FY 2016 

25 

49 

9 ~- _. .. 

5 

JOL 

98 

25 

71 

32 

14 

10 

3 

2 

4 

37 
104 

Apri/2018 

Table 16. Estimates of renewable-related energy-specific direct expenditures by department and 

program, FY 2010, FY 2013, and FY 2016 (cont.) 

million 2016 dollars 

_ DeJI•rtm_e_~t !"d Pros:ram -(;FDA Number FY2010 FY 2013 FY 2016 

__ ~,_Departm!"!_<>f_l,ab<>r__ ______ _ 

-.. ~~~~~J~.~~-~C:~'!~'!~-~i~!! ~~.'!~-~!~~~!~-~-~ ?~?:?~ .. 

_ll:S_,__I)e_p_a_o:trn_ll_"!~the lll!e_rior __ _ 

_ --~-i.':l~r~~~- ~-r:t~}~~~!~]!'!l:t ?!:l~!!lkd!~_f!~~·?D!!~-=- ~~·-~~? __ 

BO~f1,1_E_nvir~!1rnl!ntiJ1_5tucjie_s_Pr~&rarn- 15c42_3 __ 

_ _ Trib~IEne_rzyDevelopf11_el1t_Capacity_(3rants_:l5,148_ 

_ u~~:-~t!P~rt.m"llt_of_Transport"!iC)n_ _____ _ 

~~~~~!l!!.s_si_~!:~-~-~~~~~-~~~-l'!!~i~!!~.~-~- ~~:?_!? .. ___ _ 

Clean Fuels- 20.519 

4 10 

1 

8 

0 

0 

_u_,~l)epartmen!<>f~_Tr.,a_s[Jry____ __ __ __ _ _ --~ ____ _ --~4,6_7_8 ____ _!~14_ 820 

Energy Investment Grant; Outlay Equivalent for Clean Renewable Energy Bonds; 

__ ()u_tlay_Eguivalen_tf()r_gu_ali~e_d ~nergy (:()nservation _Bonds _ 820 

_ _IJ.gnviron_rn_e_n!al Pr_o!e_ctlon_ ~t!~"L.~~-~- 0 

~-- State__Cie~n Die_sel (;ra,tPro~rarn:_!;6,()4() __ _ 

Total 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a lt-"'symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets may be obligated 

and fund programs in subsequent fiscal years. 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov, website: https://www.usaspending.gov/, 

accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 2017 (FY 2016); and, U.S. General Services 

Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, October 2014) 

https://www.cfda.gov/downloads/CFDA_2014.pdf, accessed December 1, 2014 and 2017 Catalog of Federal Domestic 

Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed December 1, 2017. 

Congress created direct expenditure programs related to each of these after the 2008 recession. At that 

time, few companies interested in constructing projects that would qualify for the PTC, CREBs, or QECBs 

had sufficient tax liability to offset those programs' tax credits." To maintain support for building new 

renewable energy facilities, Congress created direct payment programs that entities could opt for in lieu 

of the tax credits. It is important to note that Treasury does not regard these two direct expenditure 

programs as domestic financial assistance, so they do not appear in the CFDA. Each program is discussed 

below: 

• Energy investment grants (Section 1603 of Public law 111-5) Congress created Energy 

Investment Grants as an alternative support program to the PTC. The program was created as a 

part of ARRA, which authorized Treasury to provide grants up to 30% of PTC-eligible facility 

17 Many firms during and after the 2008-09 recession were making little or no profit, so they owed little or no tax. Under such 

conditions, a firm's eligible PTC tax credit exceeded its total tax liability, greatly limiting the amount of the tax credit it could 

claim. 

U.S. Energy Information Administration I Financial Interventions and Subsidies 38 
105 

Apri/2018 

construction costs. 18 Taking a grant instead of the PTC eliminates dependence on tax liability 

considerations. Because the grants are largely tied to PTe-eligible facilities, direct expenditures 

for Section 1603 grants have declined sharply between FY 2013 and FY 2016 as the PTC or 1603 

grant deadline expired for some types of renewable energy-producing facilities. Energy 

investment grants fell sharply from previous years. No additional projects are expected to 

receive the Section 1603 grants. 

• Payments in lieu of tax credits for CREBs and QECBs (Public Law 111-147). In March 2010, 

Congress enacted Public Law 111-147 (Section 301), permitting new CREB and QECB issuers {in 

the public sector) to make an irrevocable election to receive a direct payment-a refundable tax 

credit-from Treasury. The amount is equivalent to, and in lieu of, the amount of the nonrefundable tax credit that would otherwise be provided to the bondholder. 19 New CREBs are 

those issued after March 18, 2010, the enactment date of the law. In April2010, the Internal 

Revenue Service issued Notice 2010-35 that provides guidance on the direct payment option. 20 

As a result ofthe Tax Cuts and Jobs Act being signed into law on December 22, 2017, new CREBs 

have been eliminated effective January 1, 2018. 

Table 17. Estimates of renewable-related energy-specific research and development expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Department and Program -CFDA Number 

U.S. Department of Agriculture 

·--Biomass R~e;;ch-;;nd oe~elopment~llliti~tiV~~co;;p~tith;~ G~;;~tS ~ Prog~~~~ 

. (IJRgl) :.1(),31_2 _ 

...... 1\~_r:ic_ulturai_ResE!arch_ Basicand AppliedResearcll-10,001 __ 

.. ll:?:l>•partme'!l_~D.efel1_se ·--~- ...... 

Basic Scientific Research· 12.431 ---~-- •-----•••--·---e-••--•·-·- -- ••• •• •-•-• • 

--~~-~i~,_ ~p_p~~~E!·-~':1-~-~~~~-1'!~.~~ ~~!_~~~~~ if! ~~~j~_r_:tc_~ -~~~ En_~~'!t:e!i!!B_~_ ~-2~~-~~--

32 

22 

8 

8 

5 2 

4 

0 

2 

0 

.l!:~:~J''!rl."'.E!nt of~~~~---···----~---- _______ _55_1 _____ ~88--~--_2!3 

_Renewabl~ ~'.1-~rgy RE7_s~ar~h and peveiC?pmen~ ~ ~_1.087 

--·-- Ad-~ancecrReSearc-h ·and PrOjects- Ai~~~v-=--e~ergy Financial Assistance Program- 81.135 

.... Fossii_Ene_r:~y ~ese~rchand Devei()P_ment -810

089 

-~-- !?!:1?~~~-~~!-~f_Ir~~~~p-~~~-~i!?!:l.-

Bioba_se~ Transportation Research.: 20.761_ 

542 

0 

0 

445 166 

43 60 .. -·--·-··-··-· 

6 ----·-··--···-··-

18 1n addition to PTe-eligible facilities, certain energy efficiency investments (e.g., LEO lighting} are also eligible for the grants. 

19 For more details, see the Database for State Incentives for Renewables and Efficiency {DSIRE). DSIRE also includes 

information on federal and state renewable energy incentive programs. 

10 Public law 111-147 also created direct expenditure provisions for other Tax Credit Bonds. 

u.s. Energy Information Administration I Financial Interventions and Subsidies 39 
106 

Apri/2018 

Table 17. Estimates of renewable-related energy-specific research and development expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 (cont.) 

million 2016 dollars 

FY 2010 FY 2013 FY 2016 ~' ---~- -~---------------

U.S. Environmental Protection Agency 

---- ·s·u~evs:st~-d~~-;:Re~e;~~h;l~~~stiiat·io"O·s~-oe;:,;o~st;atiO~~: ~~-d ·spe·~~~~ ·p-~~p-~~e 

0 0 

. p,ctivitie_sRE!i.O.tin~~othe.Ciean P,irAct_:6t;.()34_ 0 0 

National Science Foundation 237 367 214 --~-~--~••••~-~~-··-·-~~•~v-- ~-~-~-~~ -----~--

.. l'v1athen1a_tit:a1alldf'hxsica1Sciences :47,049. 

___ --~~-~!':'e_~!']!!tt.§~~-~!~. ~ -~Z:9.~~-- _ 

156 276 169 

81 90 45 

Total 844 864 456 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "-"symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets may be obligated 

and fund programs in subsequent fiscal years. DOE and totals exclude DOE's Office of Science, Office of Science Financial 

Assistance Program. 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

U.S. Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov ·Government spending at your fingertips; 

website: https://www.usaspending.gov/, accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 

2017 (FY 2016); and, U.S. General Services Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, 

October 2014) https://www.cfda.gov/downloads/CFDA~2014.pdf, accessed December 1, 2014 and 2017 Catalog of Federal 

Domestic Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed 

December 1, 2017. 

Renewable energy R&D. More than 90% of federal renewable energy R&D support came from DOE and 

the National Science Foundation (NSF) in all fiscal years. 

Federal spending on renewable energy R&D dropped by nearly 50% between FY 2013 and FY 2016. A 

$255 million reduction in DOE's principal renewable energy R&D program, although spending increased 

on early-stage research by DOE's Advanced Research Projects Agency. 

The principal NSF program funding renewable energy R&D in FY 2016 was the physical sciences. 

Physical science grants tend to address research at earlier stages than engineering grants (see Textbox: 

Research and development for general application at the end of this section). More than 70% of physical 

science grants went to solar energy research with virtually all of the remainder for other renewable 

energy (e.g., fuel cells). Engineering grants, which totaled slightly more than one-fifth of physical science 

grants, also principally funded solar energy research {56%). 

Major federal R&D programs for renewable energy are discussed below: 

Renewable Energy Research and Development (81.087). This R&D program is DOE's largest 

renewable-related R&D program (note that DOE's Office of Science programs are being treated 

as non-specific, as discussed in Textbox: Research and development for general application at 

the end of this section) and administers grants in the areas of solar, biomass, hydrogen fuel cells 

u.s. Energy Information Administration 1 Financial Interventions and Subsidies 40 
107 

Apri/2018 

and infrastructure, wind and hydropower, and geothermal. 21 Projects in fuel areas except for 

biomass are exclusively related to electricity generation. Biomass projects also include biofuels 

research and related fuel-vehicle research. The largest category of award recipients in FY 2016 

was colleges and universities, which received more than one-third of all awards. Solar and wind 

have received most of the grant money for electricity projects over the years with solar 

receiving the largest share in FY 2016. 

• Energy Efficiency and Renewable Energy Information Dissemination, Outreach, Training and 

Technical Analysis/Assistance (81.117}. This program is the longest-running direct assistance 

energy program, established by the Energy Reorganization Act of 1974 (Public law 93-438). As 

its name suggests, this program funds both energy efficiency and renewable energy projects. 

Within renewable energy, the program has a broad focus, including all forms of renewable 

energy use and production. Specifically, it provides financial assistance for information 

dissemination, outreach, training, and related technical analysis designed to encourage 

increased use of renewable and alternative energy and accelerate the adoption of new 

technologies to increase the use of renewable and alternative energy through the competitive 

solicitation of applications. More than half of FY 2016 awards supported Industrial Assessment 

Centers (lACs), whose primary goal is to train the next generation of energy engineers. lACs also 

offer feasibility studies to qualified plants to significantly improve their energy efficiency and 

promote renewable energy. This program also supports the Database for State Incentives on 

Renewable Energy (DSIRE}, 22 a website containing comprehensive information about incentives 

for renewable energy. 

National Science Foundation (47.041 and 47.049}. NSF implements two research programs that 

include sizable grant awards for energy research. Engineering grants provide engineering 

knowledge, education, and knowledge transfer to the broader population. However, only a 

fraction of engineering energy-related awards are oriented to specific fuel areas covered in this 

report. The most common renewable fuel studied in FY 2016 engineering grants was solar 

energy. Renewable projects range from basic engineering theory to studying engineering 

improvements for commercial projects and processes. The other major NSF energy project 

covers mathematics and physical sciences. 

Petroleum and natural gas. Table shows petroleum and natural gas-related federal direct expenditures 

while Table shows associated R&D outlays. Petroleum and natural gas-related direct expenditures, 

including R&D, would have been fairly stable except for the $298 million entry in FY 2013 for the 

Industrial Carbon Capture and Storage progr,am from the Department of Energy. In FY 2016, the National 

21 Hydropower includes conventional hydropower as wei! as ocean energy (e.g., wave, tidal, etc.). 

22 DSIRE also includes information about Federal renewable energy incentives. 

U.S. Energy Information Administration I Financial Interventions and Subsidies 41 
108 

Apri/2018 

Clean Diesel Emissions Reduction Program increased to $33 million from $14 million in FY 2013. Other 

elements in this area, in aggregate, saw funding decrease slightly from FY 2013 ($140 million) to FY 2016 

($134 million). One example of an oil and natural gas-related direct expenditure program is 

• The Bureau of Ocean Energy Management (BOEM) Environmental Studies Program (ESP). The 

mission of the ESP is to enable the Department of the Interior (DOl) to perform its 

environmental stewardship duties by producing scientific research aimed at safer ocean-based 

energy production. The ESP is a strategic planning program and plans annual activities through a 

Study Development Plan. The National Academy of Sciences Committee on Offshore Science and 

Assessment (COSA) advises ESP on the scientific and technical aspects of the proposed study 

efforts. According to BOEM, the ESP budget is balanced annually and tracked to its ultimate use. 

When a study is complete, BOEM measures· success and accountability with an OMB tool- the 

Environmental Studies Program Assessment Tool. 

Table 18. Estimates of natural gas- and petroleum-related energy-specific direct expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Department and Program - CFDA Number 

-~u.s. D~partrn~_t_of Ag_ricul!"_re 

---- Q~~-C!~i -~1?_1"!1_~!~~!~~-~~~-s~~'!:l_ .. -~Q .. _~P<? .. -~ 

.. State BIJik_F~ei_R_ey()lvin~ Fund _Grants.~ _10,857 __ 

_ U.:S.:IJe.l'".rtrn."flt of Ell~r.ID'...__~~----.... ~....... .. .................. . 

Industrial (:ar_bonCapture_a~d Stora!le _(C:CS) J\pplication · _81,134 __ 

_5tate .H_eatilll! ()il and Pr_opane_ Pro~r•rn. ~8!.138 __ 

___ -~-e~J?g~~ ~9u_~~~~~-~i_o~--~~-~e-~~~~'!I~~!!Z~!~?~.::~l:X~~-- ~­

Inventions and Innovations- 81.036 ---------------- ·-·-· ··------

FY2010 FY2013 FY2016 

11 6 "--~--------"'' 

11 6 

298 ----~~--~ ~------~-3 

3 

0 

298 

2 

" __ !_~~-~!-~! g_i!_~~~-§!1_~ -~~y~~-~'{ ~-~~~~-~.~~~~! .. ~~~~t.~_ ~-~~- ~~i-~~!.~?-9~~~-~!~c:>-~ -~- ~?::4?!- - 12 

.S()~M __ E_nvir()nrn~ntaiStudies~ro.~rarn :l5A23 __ 4 

lo~isiana State L!niversity (LSU) Coastal Marine Institute C~l ~ 15.422 

_____ ~~~~E~l~-~-"~-~!!'l}~It~~-!~~!~-~- ~~-~E~-: l?._Q~~­

--~·~~-P~-~!~~~---~!.!!~~-~~-~~~-~-~--

.. ~ipe~ne_5afety Pro~~amState _.Base _Gr~nt: 20,700 

.... PHf'ASJ\Pipeline _ _safety Pro&ramO_ne.Call Grant - 2Q_.721 

Clean Fuels· 20.519 

0 

............ ~ .. 48 

43 

4 

32 

4 

55 

46 

8 

18 

0 

42 

40 

44 

14 33 

_5tate Cle.,n_ ()iesel Gra_nt Program_:. 66,040 32 5 12 

Total ·--~-·--- ... ---~ .... 8!.. ..... _3_8!__~-~n .. 

U.S. Energy Information Administration I Financial interventions and Subsidies 42 
109 

Apri/2018 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "~"symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets may be obligated 

and fund programs in subsequent fiscal years. 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov · Government spending at your fingertips; 

website: https://www.usaspending.gov/, accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 

2017 (FY 2016); and, U.S. General Services Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, 

October 2014) https://www.cfda.gov/downloads/CFDA_2014.pdf, accessed December 1, 2014 and 2017Catalog of Federal 

Domestic Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed 

December 1, 2017. 

Table 19. Estimates of natural gas- and petroleum-related energy-specific research and development 

expenditures by department and program, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Department and Program - CFDA Number 

u.s. ().,p_a_f!l11_l!.,t.<>f_l)e~nSt! ... 

Basic Scientific Research· 12.431 ~ ., ~~ "-~,----~----,--, "·-- ·--

.... f!asi_C,Appliecl,_an_d_Ad>fanced_Researc~_ii1Science_and_ ~ngineering :_12,6_30_ 

.!J:S,()epartl11ent()f.En"~gy ______ ~----~--~ _ ........... .. 

.... l'.o~sii_EnerzyRese_arc;,andDevelopl11ent_:_81.Q.89_ 

. Conserv_ation R_esear_ch_a_nclg_ev_eiOJ'I11el1t.: l!_1,()8(; __ 

----~~9l~e!~.?~g_~~~!~~-!i_<:'~-'I~~_i_l!!~~ «~~~-~~.s-~~!c'! §ta_~-~-~~?J~~~-1!!"~.,~!::~~-~---- Advanced Research and Projects Agency- Energy Financial Assistance Program81.135 

U.S. Department of the Interior 

~ safety and EO~irOnmentaf E'nfOr~ement- ResearCh ~-~d6ata' COllection for 

Offshore Energy and Mineral Activities- 15.441 

· offshore Resea.rchrecli;,ololiv ce~!e~ iorRc) Texas Engineering Experiment 

.. Station(TEES): J,5_.42S 

. ~~T!!l.~. §~-~~l:i'i~~~~t~~~~~~~~~~-~~~~!.!~~~-:}?~4~8-~~­

u.s. Department ofTransportation 

-·--p-H-MSA-PJPeli~~ ~fetv -R~;;~ch 3ndDeve·iopment Ott;;.Tra~;acti~;;~---~--

. .'Wee_rne_nts_:zo,72L . 

National Science Foundation -~---~-~ ~---~-------

--~~.~!ry~-~rj~-~- ~r~_r:!~-~ -~! ~g~~-'" 

_ -~~!~~~~-!i_c_a~ -~~_d __ P_~~~!~~~- ?_~i~!l-~~~---: 4 ?.:~~~-- _ 

Total 

3 22 -~-~~-~--~----

11 

4 

0 8 

0 

42 

38 

5 

2 

0 .. jO) 

.. -~---6- ···- 16 2 

6 16 

··-~---~-----~----2~ ... -...... 8 

2S 

64 

6 

56 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "-"symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets may be obligated 

and fund programs in subsequent fiscal years. DOE and totals exclude DOE's Office of Science, Office of Science Financial 

Assistance Program. 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov ·Government spending at your fingertips; 

website: https://www.usaspending.gov/, accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 

2017 (FY 2016); and, U.S. General Services Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, 

October 2014) https://www.cfda.gov/downloads/CFDA_2014.pdf, accessed December 1, 2014 and 2017 Catalog of Federal 

Domestic Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed 

December 1, 2017. 

u.s. Energy Information Administration 1 Financial Interventions and Subsidies 43 
110 

April2018 

Nuclear. Nuclear direct expenditures, inclusive of R&D, have decreased from $235 million in FY 2013 to 

$204 million in FY 2016. These activities are dominated by DOE program efforts. Unlike most kinds of 

federal energy assistance, nuclear support is higher in R&D than in direct expenditures. Note that some 

DOE R&D is not categorized by energy system category, as discussed in the Textbox: Research and 

development for general application at the end of this section; some of this basic R&D is also 

presumably used by the nuclear energy industry, as well as by others. 

Table 20. Estimates of nuclear transformation-related energy-specific direct expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Department and Program - CFDA Number FY2010 FY 2013 

-----·--··- ~--~ _______ 5_0 __________ 23 

~pidefl1iOIO_f!Yan~Oth_er HealthStudies Financial Assistan£e Pro~rar11: t!l.:l08 ........... _ .. .. __ 13 

_ _Nljcle_ar \o\faste_DiSJ>()SaiSitinJ! ~ 81:065 

Transport of Transuranic Wastes to the Waste Isolation Pilot Plant: St~t~S and 

_ 'fribal C.onc_erns,_J>roJ>()SedSolu_tions :.!!1:106 

Nudear Regulatory Commission 

---u.S~.N~cle~-~·Reg~-ia-1:0-rY-CorTiffiiss.ion SchO!arShiP.30dFenOW~hip Program 77.008 

~~---·u:s.-N~·~,;:;~ R~g~-~~torY·c~mmiSSion ·Mrnori·tv-servi~g-,n~tit.~tiO~~-p~;;-g~a~- · (MISPl_:!7.007 

Y·~·- ~~c!ea_r R~-g~-~~~~~-~.?.'!~n:t.l~~-i-~1!- ~-u~!~-~~ ~~~-~~-~~~':-~ra':_l_~~~t?.l~!~~-.:-~??:~~~?~ _ 

Total 

9 

40 

19 16 

12 15 

6 

69 

FY2016 

25 

14 

6 

4 

16 

15 

- (()) 

40 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "-"symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets may be obligated 

and fund programs in subsequent fiscal years. · 

Sources: U.S. Department of Energy, Office of the Chief Financlal Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016i 

Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov- Government spending at your fingertips; 

website: https://www.usaspending.gov/, accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 

2017 (FY 2016); and, U.S. General Services Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, 

October 2014) https://www.cfda.gov/downloads/CFDA_2014.pdf, accessed December 1, 2014 and 2017 Catalog of Federal 

Domestic Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed 

December 1, 2017. 

Table 21. Estimates of nuclear transformation-related energy-specific research and development 

expenditures by department and program, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Department and Program - CFDA Number FY2010 FY 2013 FY2016 

u.s. Department of Eneri!Y 

_ ~~~!~~~ .. ~~~-~$}'_ ~e~-~.aE~!!,_g_~~!:t~Rrl).~~~ .an~ .. ~e:~9-~~-~r~~i_C?_~_- ~~: !?.! ·-

National Science Foundation ~-----~ .. ·-·------- ------ ·--------~-~- -~--~-~---··---~--

Mat_he_rnati_caland.~hysica_I_Sci_el1c"s_-_47,()4!) 

Engineering Grants -47.041 

U.S. Energy Information Administration I Financlallnterventions and Subsidies 

174 

174 ... 

-·-~~- ------ .... 

0 

133 137 

133 137 

64 25 

64 25 

0 

44 
111 

Apri/2018 

Table 21. Estimates of nuclear transformation-related energy-specific research and development 

expenditures by department and program, FY 2010, FY 2013, and FY 2016 (cont.) 

million 2016 dollars 

_ Depa,rtment_a_nd_Pr"llram_ :~Cf'DA Number __ 

Nuclear Regulatory Commission -~~~~--~ 

FY 2010 

2 

FY 2013 

0 

FY2016 

2 

~~-"u-.-s~~c~;;;:-ReiulatO~Om;.;iSSiO-~·omce~"Research-Fina,;~;~ ASSiStance _ Pro~ram:7!:0()9 __ 

Total 177 

0 

197 

2 

164 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "~"symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets may be obligated 

and fund programs in subsequent fiscal years. DOE and totals exclude DOE's Office of Science, Office of Science Financial 

Assistance Program. 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov- Government spending at your fingertips; 

website: https://www.usaspending.gov/, accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 

2017 (FY 2016); and, U.S. General Services Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, 

October 2014) https://www.cfda.gov/downloads/CFDA_2014.pdf, accessed December 1, 2014 and 2017 Catalog of Federal 

Domestic Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed 

December 1, 2017. 

Energy efficiency, conservation and end use. Taken together, support for end use-related activities 

decreased from $4.9 billion in FY 2013 to $4.0 billion in FY 2016 (see Table 22 for direct expenditures 

and Table 23 for R&D). The low Income Home Energy Assistance Program administered by the HHS, 

funded at $3.4 billion, accounted for almost 85% of the FY 2016 total. R&D program expenditures in 

these areas totaled $389 million, with most of this support originating at DOE. 

• The Low Income Home Energy Assistance Program (LIHEAP). HHS administers the LIHEAP 

program, largely through state energy offices. This program provides direct payments and 

technical assistance to individual consumers, households, and multi-family building owners and 

tenants. Although a portion of LIHEAP support is used directly for energy consumption and 

could be considered a subsidy for consumption, the program is designed to free-up low-income 

consumer funds for other critical needs (rather than simply increasing energy services) and to 

provide information and assistance for energy conservation, weatherization, and other 

efficiency-enhancing measures. LIHEAP funding levels were $3.2 billion in FY 2013 and $3.4 

billion in FY 2016. 

U.S. Energy Information Administration I Financial Interventions and Subsidies 45 
112 

Table 22. Estimates of conservation, efficiency, and end-use energy-specific direct expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Department and Program -CFDA Number 

.u,S~.!Je!'artm~er~t.~!'!!fi.c.ultlll'e~ 

~· . o.,nali(;ommission.Pro~r·~l11~: ~().~10~0 ~ 

~ .. Ru~al Enereyfo.rArneric~a Pro!!_ram~:.10:86l!.~ 

~~~ Assistance to Hif!h Ener~y C()st Ru~~IC:ol11rn"niti<!s -10:~59_ 

. 5un_Grallt_Pn>grarn_: 1_G,32(l_ 0 0 

.IJ:~:D.<!P."rtrn.~~t <>1 .. ~1le.!!!Y ..... - --~ ~-- .3-.1!)3 ___ ~ 925 254 

182 

44 

Weatherization Assistance for low-Income Persons - 81.042 ---- ------ ------------· ------·------------------------------¥-------

State .. Ener.&Y. Pr:o!!rarrl.~!lL()~L --------· -------- Energy Efficiency and Renewable Energy Information Dissemination, Outreach, 

_ Train.in~_ and Technica.l.l\nalysis[)\ssistance_: 81.117_ 

.. State E!lereyP.rografl1Sp_ecial Proj<!c~s: 8_1,1_19_. 

National Industria! Competitiveness through Energy, Environment, and 

Economics- 81.105 

·· - l'.f1eriYEfiiciencvandRene~~t;i~-E;;,;;!l¥rechnologyoe;;l;;;,.;;;er1t;·· 

Demonstration and Commercialization- 81.129 ~ ~~" ''' -~--~~-·~ -~"~---~-~--~-¥--"" --~·-- -~··--· "'.-.. -"'" 

Office of Scientific and Technical Information- 81.064 --·--·- ------- - . ....... --···-· -------- --- ---·" ·-- -~---------------

~nergy_Eificie_nt_Aj>~Jii<>~cejlebate ProJ;ram(EEARI'l. -1!1,127. 

_ .!!1¥€7_':.~~~~~-~n~ _l':l_f!~X~~~~-~:. ?_!.:~~~ 

-~- __ §!t:?!~~~~-~-~9.~~~~!~-~~<:'~~~!!~-9]~-~~-C!~!~~-~!l_~-~---~~}-~-~---

-.Enerey"Efficiencyand_ Conse_rv.ation BI()Ck_ (;rant ~ro_~ra_111 (EECB(i) -.81.128 .. 

_lnd!Jslrial Car~o_n_C_af>tu~e •!ld . .Stora$"e_(C(;S) )\pplicati()n: 810 134_ 

U.S,I>E!fl.artment C)!.J:I<!.a.lt.ll_ and l!uma~~~rvlces 

__ LoiN ln_c~rne_H()rn_e.Eile~ey 1\ssist.an_ce : 93.5(;8 __ 

_ IJ:S._ Depart..rn<!!ll ofli()usi~~~~~ndl)rb_a~•~[)e_~t!I<>Prt1~f1.t~-

Assisted Housing Stability and Energy and Green Retrofit InvestmentS -P~Ogr-;~-

14.318 

_ _r-1ultifa_l11il~ En_erj1y_ln_n()va_ti()n.£u_n<J:. !4,;31!)_ 

.lJ·~ .ll.l!~rtrt1<!!l!()f Labor~~---- ~~------ ... _ ~~~~·- ~-~---~~ 

____ <?~~e-~-~~-~~-!r:'_~~~~-tL~!1.£':JD~.-~!~~~-~ 17.275 

_ u,s, [)ep_a~'!rnellt.o.!.t.h<!l~e_fi.or_ ----~~~ _ 

~i~~-~~!s -~'!~ ~l!!i~~t~n !!1.~~~~ -~~-"~~-:-~~ .. o~-~ __ Tribai .. E.n<!r!!Y D.evel.o)lmentCapacity.§rants -15,148. 

us,.!Jee•rtm.~~of_!!.ll'''l'"rt~!i()n__.~- ~-··-~· ···~--~ ·-

Clean Fuels- 20.519 

--- ca·pi·tarAS~iStance-p;og·ra;;;for Red~Ci~g Ene~gy Consumption and Greenhouse 

Gas Emissions- 20.523 

.... .. l,B1!l .... __3_13_~ 

522 

19 

549 

141 

22 

11 

436 

21 

7 

5,~1~ ~ ~~i-?.4? . . . . ..3.~6<! ... 

.. 5,61:1 .. . ""3,24] - . 3,368 

······ ... " .. " .. ~59~·· (~) 

259 

62 

·- (2)_ 

...... !IlL . JOl 

62 (0) JO) 

0 

0 

6 

6 

220 

4 

216 

23 

8 

15 

.... N".tiol1ai_SII!•!l_[)i~~~I_E_f!!i~s!o_n~.fl~_diJC!io_n_Pr:o~.ralll:.§.§,(l3~---······················· ............. l.Q.l. ... __ ·······- -·~. ··-··· .... ----· 

Total_~·~~~-·~~~~--·~-~~~-~~-~~ ~~~-~~··-~·~·~---!1,49!~--~~~-·--···~62!>.~ 

U.S. Energy Information Administration 1 Financial Interventions and Subsidies 46 
113 

Apri/2018 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a 11-"symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets may be obligated 

and fund programs in subsequent fiscal years. 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov- Government spending at your fingertips; 

website: https://www.usaspending.gov/, accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 

2017 (FY 2016); and, U.S. General Services Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, 

October 2014) https://www.cfda.gov/downloads/CFDA_2014.pdf, accessed December 1, 2014 and 2017 Catalog of Federal 

Domestic Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed 

December 1, 2017. 

Table 23. Estimates of conservation, effici!!ncy, and end-use energy-specific research and 

development expenditures by department and program, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Department and Program - CFDA Number FY 2010 FY 2013 

I,J,~.Deea_rtmt!"!_of~~t~re~----~-------~ __ _ 

_A~ri_cultural Rt!St!arc_h_~a~ican<J_A_ppll~d_Research -_ _10,001 

_ .l!:~:.!lt!e~'!ITII!"! of Def~se ___ ~------- ----------~---- __ -------~------~~ _ 

Basic Scientific Research- 12.431 -···--»·-···---····-··-.----··--.. ------·--

" ~~-~iS_ ~PJ?!~~~~-~~-~-~~~~~~~~-~~-s-~~~~~-~~-~~!~'!~~-~!~9--~~J~~~~~~~!'~,: ,~~·?A9_ ·---

u.s._eeP•rtrnelltofEner&V 

_____ f~~~~~~!i_(_)~ -~~~-e.~!£~-~-ry~}?_~y-~!'?J?!!15~~!:-_~l~Q_~~ 

Advanced Research and Projects Agency- Energy Financial Assistance Program81.135 

Renewable Energy _Rt!s~_arch and Development- 81.087 

___ Gt!OI()~ic_S_eguestra_tioi!TraininJl a11d. Research_GrantPr()~ram- 81.1:33 

.... flvdro~enStora~eRest!archan<J D_eyelo~rnellt-_2_0.764 

U.S. Environmental Protection Agency 

--s~rvevS: SWdieS,Ri5earch, IOVestJgatiO~~:o~;;;~·mt;atk;~S:~~d-sp·~~~~-fP~n;~~~- - . _Activities _R"Iatinl! toth_eCI~all Air_)\ct ~ 66.034. 

643 

587 

18 

34 

3 

3 

569 

454 

87 

28 

FY 2016 

3 

49 

43 

6 

280 

147 

116 

18 

_2 

-~-ticl_~~iE!IlC_f!_f_()~dati()ll___ ___ ~---·---~-----~-~---------~------15_6 ____ _!3!__ __ ~--

MatheO'la_tical and P.hysicai_Sciellc"s-~ 47.()49_ 103 84 35 

___ Engin~ering Gra_nts~_47 041_ 53 51 18 

Total 801 706 389 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a u_"symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets may be obligated 

and fund programs in subsequent fiscal years. DOE and totals exclude DOE's Office of Science, Office of Science Financial 

Assistance Program. 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov- Government spending at your fingertips; 

website: https://www.usaspending.gov/, accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 

2017 (FY 2016); and, U.S. General Services Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, 

October 2014) https:/ /www.cfda.gov/downloads/CFDA_2014.pdf, accessed December 1, 2014 and 2017 Catalog of Federal 

Domestic Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed 

December 1, 2017. 

U.S. Energy Information Administration I Financial Interventions and Subsidies 47 
114 

Apri/2018 

Electricity transmission and grid network. Support for transmission grid-related programs was 

dominated by the DOE's Electricity Delivery and Energy Reliability Research, Development and Analysis 

program. This program accounted for 92% of total expenditures in this category. The program was 

expanded under ARRA and fell from $824 million in FY 2013 to $15 million in FY 2016 as ARRA funding 

authorities expired. 

Table 24. Estimates of electricity transmission-related energy-specific direct expenditures by 

department and program, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

Department and Program - CFDA Number FY2016 

--~-- ~_?]~~1!~-~~-~~-~i~~-~-~-~~ID' ~~~! _ ~~E-~~ ~~~~-~_f!i!i!:~~:}9.~~~-~-

Jl.S~el'".rtrt1~~t_o!~~!'!.~~~-- -~~- --~~-~~~~----· -~---- --~--~-----~~ _ Energy Efficiency and Renewable Energy Information Dissemination, Outreach, 

Trainill~-~nd:_Tedtnic"I_Ailalysis[Assista_nc~~~-81:_1~7 __ _ 

u,s, Def"'rt"!ent oftl!e ln_tf!rior 

...... l'v1in~rals_ancj_l'v1inin~_()nlndianlancjs ~ 1S:_03_8_ 

:rrib.,IE_ner~ Developm_ent Capacity Grants_:_15,148_ _ 

Total 

4 

4 

8 

8 

0 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "~"symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets may be obligated 

and fund programs in subsequent fiscal years. 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov ~Government spending at your fingertips; 

website: https://www.usaspending.gov/, accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 

2017 (FY 2016); and, U.S. General Services Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, 

October 2014) https://www.cfda.gov/downloads/CFDA_2014.pdf, accessed December 1, 2014 and 2017 Catalog of Federal 

Domestic Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed 

December 1, 2017. 

Table 25. Estimates of electricity transmission-related energy-specific research and development 

expenditures by department and program, FY 2010, FY 2013, and FY 2016 

million 2016 dollars 

FY 2010 

U.S:. Deeart_men_t_ol Delf!nse 

-· ---·~~~.iS.~E!P!~~~~ .. ~~~-~~~~~S~~-~~-~~!~~!!l~}~_i¥.1!£~ ·~-"~- ~~~i.'!~~!J.I'!S_: J~:~-~9. 

.u:~:~ep.a._rt_"!e_n!_()!EneriD'_ ___ ~-~~--~~----~-----·--···· ·--- --~- ....... ---· 553 

Electricity Delivery and Energy Reliability, Research, Development and Analysis-:_" 

.. l!L_!2~.. S18 

Advanced Research and Projects Agency· Energy Financial Assistance Programnrn 1 

... R,e_ne_wable E_n."r~ Re_searchandl)e_velop1111!nt ~.?.L087 __ 

National Science Foundation ' ...... __ ,...... .. ··-~..... "'~·~ 

EngineerillS.Ci•aDts · 47,041 

.... !'v1at_hel11a.ticalaf1df'hysicai_S_ciences_~ <17.-049 

Total ~--~ ~ ~-----·---·~------~--~"~~~--~·~--~---~----~ 

U.S. Energy Information Administration I Financial Interventions and Subsidies 

34 

13 

4 

8 

- ·------~-·-~ 566 

824 

10 

28 -------25 

21 

887 

1S 

25 

lS 

9 ----

-~ 

48 
115 

Apri/2018 

Notes: Totals may not equal sum due to independent rounding. Zero denotes rounding to zero value and a "-"symbol 

denotes a zero value. Appropriations made in either FY 2010, FY 2013, or FY 2016 federal agency budgets rrlay be obligated 

and fund programs in subsequent fiscal years. DOE and t-otals exclude DOE's Office of Science, Office of Science Financial 

Assistance Program. 

Sources: U.S. Department of Energy, Office of the Chief Financial Officer, Base Financial Data, FY 2010, FY 2013, and FY 2016; 

Department of the Treasury, Bureau of the Fiscal Service, USASpending.gov- Government spending at your fingertips; 

website: https:/ /www.usaspending.gov/, accessed December 1, 2014 (FY 2010 and FY 2013) and accessed November 16, 

2017 (FY 2016); and, U.S. General Services Administration, 2014 Catalog of Federal Domestic Assistance, (Washington, DC, 

October 2014) https:/ /www.cfda.gov/downloads/CFDA_2014.pdf, accessed December 1, 2014 and 2017 Catalog of Federal 

Domestic Assistance, (Washington, DC, October 2017) https://www.cfda.gov/downloads/CFDA_2017.pdf, accessed 

December 1, 2017. 

Textbox: Research and development for general application 

Research and development (R&D) in this report is treated as applying to specific parts of the U.S. energy 

system based on the research topics, program descriptions, and other available information, including 

information from the programs themselves in some cases. 

R&D is broadly characterized as either basic or applied, or sometimes as upstream or downstream R&D 

investment, with upstream referring to basic research. R&D investment is more generally applicable to a 

wider variety of activities, both energy-related and non-energy-related, when the activity is aimed at 

basic or upstream technological improvement. 

Basic R&D activities are not intended to support specific kinds of energy; instead they support advances 

in broadly applicable technologies such as high-speed computing or basic science such as physics. This 

concept is true of certain Department of Energy programs, notably those of the DOE's Office of Science 

(SC) under CFDA 81.049, the Office of Science Financial Assistance Program. EIA did not include these 

activities as line items in the direct expenditure and R&D expenditure tables for this report. With total 

FY 2016 outlays reported at $1.2 billion, the specific DOE financial programs and FY 2016 outlays in this 

category include the following: 

• Office of Advanced Scientific Computing Research at $39 million 

• Office of Basic Energy Sciences at $303 million 

• Office of Biological & Environmental Research at $130 million 

• Office of Fusion Energy Sciences at $168 million 

• Office of High-Energy Physics at $117 million 

• Office of Nuclear Physics at $181 million 

• various small business research and technology transfer DOE programs at $214 million 

U.S. Energy Information Administration 1 Financial!nterventlons and Subsidies 49 
116 

Mr. BABIN. Thank you. There is no such table in 2016’s report 

explaining how much that we are paying per megawatt hour for energy, so I understand that since we rely on them to call and report 

impartial data, the Energy Information Administration, it has a 

certain amount of autonomy from your direct management. But I 

would ask you, Mr. Secretary, would you be willing to offer your 

support for them to resume producing this same chart in future research products? Americans deserve to see the destinations of 

where their tax dollars are going. 

Secretary PERRY. Yes, sir, absolutely. 

Mr. BABIN. Would you be willing to do that? 

Secretary PERRY. And I think it’s it makes abundant good sense 

for the EIA to put that forward and make it public and so the 

American people can take a look at how their tax dollars are 

being—— 

Mr. BABIN. Absolutely. Thank you, and I really appreciate that 

because here we are in the age of energy independence here in the 

United States with all the developments in fossil fuel production, 

and do the American taxpayers need to continue that type of mammoth subsidies for this type of energy? 

Secretary PERRY. Yes, sir. 

Mr. BABIN. Thank you, Mr. Chairman. I yield back. 

Chairman SMITH. Thank you, Mr. Babin. 

And the gentlewoman from California, Ms. Lofgren, is recognized. 

Ms. LOFGREN. Well, thank you, Mr. Chairman, and thank you, 

Mr. Secretary, for being here to talk with us about your department. And I was glad to hear from Mr. Foster and others how 

much time you’ve spent looking at our national labs and—which is 

a great asset to our country, just miles and miles of brilliant people 

all over the country coming up with things that are going to change 

our future. 

One of the things I’d like to focus on today has to do with something that’s going on at the Lawrence Livermore National Lab, and 

that is the National Ignition Facility. I have—you know, Livermore 

Lab is not in my district, but it’s something I’ve been interested in 

for a long time and I’ve followed since its inception. I was glad to 

hear you say this morning that fusion has the potential to change 

the world. We know fusion exists because we have a sun, but we’re 

not sure when we will achieve it. We’re achieving fusion now, we’re 

just not achieving ignition. And when we do, that’s a gamechanger 

for the world. 

So given the potential benefits and the money that we spent to 

make this facility a reality, it was disappointing to see the budget 

recommendation. Now, I know that the Secretaries don’t always get 

the last say on what is requested. The OMB has a big role, and 

we all served with Mick Mulvaney when we he was here in the 

House, and I got along well enough with Mick when he was here, 

maybe better than in his current position. 

I was concerned that the budget would effectively result in a 40 

percent reduction of shots at the NIF from 400 to 250, it would 

eliminate 160 jobs out of the 750 associated with that. It even 

eliminated funding for General Atomics, again not in my district 

down in San Diego that provides the target fabrication, which 
117 

would actually increase the cost. If you don’t have a target, you 

don’t have a program. If you have targets but you eliminate funding for the only source of those targets, you’re going to increase the 

cost. 

So I’m wondering—I know that the Appropriations Committee is 

working on this. It’s possible that some changes will be made here, 

but I’m just wondering if you can talk about what you think about 

fusion and NIF’s future. 

And I want to say something else. You know, the new graduates 

in high-density physics don’t necessarily want to work only on the 

weapons program. They want to work on science programs. And if 

we eliminate our pipeline of physicists into these labs by cutting 

the science, we’re not going to be able to do the Stockpile Stewardship Program, which is the main function of course of the National 

Ignition Facility. So I wonder if you could comment—— 

Secretary PERRY. Ms. Lofgren, I—— 

Ms. LOFGREN. —on any of those things? 

Secretary PERRY. Yes, ma’am, thank you. And I agree with your 

observation about the intellectual pipeline. And one of the reasons 

that we are valiantly trying to express our support for Westinghouse so that the United States can maintain its position on the 

reactor side, it’s just like kids—when I was going to college, all the 

really smart kids wanted to be nuclear engineers. And for about 40 

years because of benign neglect and some other events, some accidents, et cetera, nuclear power, civil power became kind of out-offavor. 

This fusion side I think gives us the opportunity, and I think we 

can reasonably have our disagreements about, you know, we are 

not going to have the funding for every worthy initiative, we know 

that, and—but we can have these conversations back and forth, 

which are important. And whatever this committee and Congress 

decides on from the standpoint of your priorities, we’re going to 

manage them as well as can be done. 

Ms. LOFGREN. Thank you. And I know my time is up. I’d just like 

to say we spent a lot of money building this facility, and to walk 

away from it after we’ve built it, you know, now that China is on 

our heels, you know, we want to be the leader. We want don’t want 

to be behind China on this. So thank you, Mr. Secretary. 

Chairman SMITH. Thank you, Ms. Lofgren. 

The gentleman from Florida, Mr. Dunn, is recognized for his 

questions. 

Mr. DUNN. Thank you very much, Mr. Chairman. And thank you, 

Mr. Secretary, and your Under Secretaries, for joining us here 

today. I found a lot to celebrate in looking at your budget, but I’d 

like to focus on a small niche in it that’s the medical use, the 

healthcare use of medical isotopes. 

Secretary PERRY. Oh, yes. 

Mr. DUNN. So when Under Secretary Dabbar was with us here 

back in January, we discussed the market availability of a variety 

of medical isotopes and how the isotope program in the Department 

of Energy is actually run more like a business than it is an agency. 

And I was just wondering where in this budget are we looking to 

invest in American capabilities to generate the full array of medical 
118 

isotopes so that we’re not dependent on foreign sources for high-priority medical isotopes. 

Secretary PERRY. Yes. This kind of fits into the same arena as 

some of our rare earth minerals as well, just that the United States 

is going to be, I think, required to supply these ourselves. And for 

us to do the science, to do the funding of this so that we are not 

beholden to countries around the world that may not have our best 

interest in mind. I think about cobalt and the importance that cobalt can play, lithium, the importance that Lithium-6 is going to 

play going forward in the pit production for the weapons side of 

things. 

So focusing and being dependent upon U.S.-based sources of 

these very important elements is a focus of the Department, and 

you know that we will continue to prioritize the funding for these 

types of programs. And as I have shared with Ms. Lofgren, you 

know, there are a lot of worthy initiatives out there that we don’t 

have all the funding for them all. But in this area I think that is 

a priority of the Administration; it is a priority of our agency. 

Mr. DUNN. I’m glad to hear that. We see a lot of dependence on 

the newer isotopes in PET scanning, for instance, but not just PET 

scanning, also in therapeutics, and so I just want to make sure 

that the DOE is facilitating the development and actual construction of sufficiently energetic accelerators and some reactors. We 

need reactors, too. 

Secretary PERRY. Mr. Dunn, if I can just take a little bit of a turn 

away from that and talk about on the supercomputing side of 

things. We’re standing up an office that’s going to be referred to as 

Artificial Intelligence Big Data Initiative, ABI, and the focus there 

is going to be on precision medicine. We were out at Lawrence 

Livermore talking to some of their folks who are working with University of California San Francisco neuroscientists about managing 

all of this big data. It’s why our supercomputing investment is so 

important, and on precision medicine is one of those. 

I mean, the great progress that I think, Dr. Babin, in the future 

is going to be in the ability to manage all of this big data and those 

supercomputers. And five of the ten fastest supercomputers in the 

world belong to the Department of Energy. And soon, because of 

Argonne and the work that we’re going to do with Fermi and Oak 

Ridge, we’re going to be back in the position of being the number 

one. And how long we last as number one is going to be up to 

us—— 

Mr. DUNN. It’s up to us. 

Secretary PERRY. —but anyway, this precision medicine, there’s 

not much I’m more excited about than what we see with our ability 

to manage all this big data focused on precision medicine. 

Mr. DUNN. Well, thank you very much. I look forward to spending this weekend at Argonne Lab—— 

Secretary PERRY. Yes, sir. 

Mr. DUNN. —studying that with Under Secretary Dabbar. 

And I yield back, Mr. Chairman. 

Chairman SMITH. Thank you, Mr. Dunn. 

And I believe now we’re going to go to the gentleman from New 

York, Mr. Tonko. 

Mr. TONKO. Thank you, Mr. Chair. 
119 

And, Secretary Perry, it’s good to see you again—— 

Secretary PERRY. Yes, sir. 

Mr. TONKO. —and it’s good to see the work you continue to do 

in terms of visiting the national labs and supporting the DOE 

workforce. 

I want to ask you about two important programs, however, within the office of EERE. The Weatherization Assistance Program is 

the largest residential energy conservation program in our nation. 

It reduces the energy burden on low-income families and creates 

jobs. State energy program enable States to assist with energy efficiency and renewable energy projects, as well as develop critical energy emergency preparedness and response plans. 

As a former Governor, you likely have witnessed the value of 

these programs, and you understand that on-time delivery of 

weatherization and state energy program funds to States is crucial 

to ensuring these programs continue to run and run effectively. For 

weatherization, most States expect this funding on July 1. Will you 

ensure that weatherization state grantees and state energy program grantees will receive these funds on time this year? 

Secretary PERRY. Yes, sir. 

Mr. TONKO. I think that’s critical. 

Turning to a different DOE office, do you believe that the Office 

of Electricity research programs are valuable in terms of their potential to improve grid reliability and resilience through technologies such as storage, microgrids, and other smart grid technologies? 

Secretary PERRY. I do, Mr. Tonko. I believe it’s important that 

we again recognize the—and I can’t remember who—I think was 

Mrs. Johnson I was having the conversation earlier about the 

prioritization. And as some of these programs mature, then the 

funding will obviously fall off for them as we look to the next big 

thing that’s out there. And I think this fits right in to this area 

that you’re making comment about as well. 

Mr. TONKO. Well, earlier this year, DOE announced the creation 

of the Office of Cybersecurity, Energy Security, and Emergency Response, and I’m not necessarily opposed to this reorganization but 

I would like to understand how it might affect existing programs 

that will remain within the Office of Electricity. Cybersecurity is 

an important issue. That deserves to be elevated, but it should not 

be done at the expense of other critical programs. 

Secretary PERRY. Yes. 

Mr. TONKO. So are you committed to ensuring that there are sufficient resources and personnel for the Office of Electricity Grid 

Modernization and Energy Storage Programs, which are also essential for improving grid reliability? 

Secretary PERRY. Yes. And we are continuing to fund—‘‘beyond 

batteries’’ is in that shop, hydrogen R&D is in that shop. When I 

was out—I believe we were at Savannah River. We were looking 

at hydrogen fuel. And I don’t want to get deep in the weeds here, 

but this is pretty exciting stuff when you look at hypersonic aircraft and the ability to be anywhere in the world in I mean literally 

4 hours, and you can do that because of this hydrogen fuel. 

So there’s still a lot of exciting work to be done in the EERE. 

Again, you know, we can have our disagreements about line item 
120 

to line item, but the commitment is still there to come up with the 

new big things and to prioritize them and what have you. CESER 

got moved over and split out from that because of the very special 

focus that needs to be on cybersecurity in this country today. 

Mr. TONKO. Well, thank you, Mr. Secretary. The President’s 

budget request proposes a 74 percent cut to smart grid research, 

a 67 percent cut to clean energy transmission and reliability, and 

an 81 percent cut to energy storage R&D. So if this Administration 

is truly committed to improving grid reliability and resiliency, then 

these proposed cuts need to be rethought and removed. So I appreciate whatever assistance you can provide—— 

Secretary PERRY. Yes, sir. 

Mr. TONKO. —in making certain that these stabilizers are there 

that are essential. 

And with that, Mr. Chair, I yield back. 

Chairman SMITH. Okay. Thank you, Mr. Tonko. 

And the gentleman from Louisiana, Mr. Higgins, is recognized. 

Mr. HIGGINS. Thank you, Mr. Chairman. 

Secretary Perry, I very much appreciate your service to your 

country and your continued commitment to restore energy dominance of America in your current position. 

I represent south Louisiana, the epicenter of LNG expansion for 

the entire world. And the district I represent is commonly referred 

to by my Lone Star colleagues as east Texas. So keeping that in 

mind, I’d see a great partnership between the State of Texas and 

the State of Louisiana as we seek energy dominance for our nation. 

I very much appreciated your comments regarding management 

efficiency and operating within the parameters allowed to your Department by the appropriators of this Congress. I also support the 

President’s overall effort to reduce the size and scope of the agencies of the federal government that devour the people’s treasure, so 

I very much appreciate your approach, Mr. Secretary, regarding 

the efficient operation of the Department of Energy and the agencies therein. 

I’d like to ask you about grid security. The Grid Modernization 

Laboratory Consortium, the GMLC, is committed to advancing development of new tools and technology to increase grid resilience 

and particularly from cyber attacks. How does protection against 

EMP fit within that endeavor? And just how much focus are you 

placing upon? I personally think it’s a great threat to our nation, 

and within the confines of this environment obviously being a more 

open discussion, could you share with us what DOE is doing regarding the EMP protection of our grid? 

Secretary PERRY. Yes, sir. I’ll just speak in a generalization that 

that is certainly one of the challenges that we have and we recognize it. The work that they’re doing at Idaho National Lab with the 

test grid there, it’s—they’re addressing it is I think the appropriate 

thing for me to share with you at this time. 

The consortium supports, you know, the critical research and development in a host of different areas, advanced storage. Beyond 

batteries that I mentioned earlier is certainly one of those cleanenergy integration standards and test procedures, and a number of 

other really key modernization areas, the least of which is not 

making sure that the grid is protected from cyber attacks, from 
121 

EMP-type of attacks, and other anomalies that could be released 

upon our grid so that the American people will know with some 

surety that when they flip the switch on, the lights will come on. 

Mr. HIGGINS. Thank you for that answer. And just please share 

with this Committee regarding the budget and what you envision 

as required to secure our nation’s grid against EMP. Are you satisfied with the budget that you received? Can you work within those 

parameters? 

Secretary PERRY. Yes, sir. 

Mr. HIGGINS. Do we need to help you by increasing that budget? 

Secretary PERRY. We can work within the parameters. 

Mr. HIGGINS. Thank you, sir, for your answer. 

Mr. Chairman, I yield back. 

Chairman SMITH. Thank you, Mr. Higgins. 

Mr. Secretary, we know you have to leave for a Cabinet meeting. 

Thank you for spending the time you have with us. And I understand Mr. Dabbar can continue to stay and answer Members’ questions. Mr. Dabbar is the Under Secretary for Science, so I think 

he’ll be able to address most of the Members’ comments and questions after the Secretary leaves. 

Let me also say that I’m going to need to excuse myself, Mr. 

Dabbar. I have a Judiciary markup that’s ongoing, so I’m going to 

head there. 

But we appreciate again, Mr. Secretary, your being here, Mr. 

Dabbar, your being willing to stay. I know we have at least three 

Members more on either side, and up next is the gentleman from 

Florida, Mr. Crist. So Mr. Secretary, as soon as you leave, we’ll recognize Mr. Crist to address his questions to Mr. Dabbar. 

Mr. CRIST. Governor—— 

Secretary PERRY. Governor, I wish I could stay and hang out 

with you. 

Mr. CRIST. I wish you could, too. 

Secretary PERRY. It’s good to see you, sir. 

Mr. CRIST. It’s good to see you, sir. 

Secretary PERRY. My day job requires me to walk across the way 

and—but if there’s—in all seriousness to each of the Members that 

are still here, if there are questions that you need me or want me 

to address personally, I will make that happen in some form or 

fashion. But I’m leaving a very capable fellow right here, although 

he could not get into Texas A&M. He had to go to the Naval Academy. They trained him up pretty well. So, anyway, thank you, Mr. 

Chairman. 

Mr. CRIST. Thank you, Mr. Secretary. Thank you, Mr. Chairman, 

and thank you, Under Secretary Dabbar, for being able to stay here 

and help us out today. 

My hometown, which is the city of St. Petersburg, Florida, was 

one of the first cities in the country to commit to transitioning to 

100 percent renewable energy. It’s a lofty goal, and I commend the 

city for being proactive in reducing carbon emissions. However, I 

am concerned that the cuts to the energy research and development within this budget proposal will make that goal much more 

difficult. Those cuts happen to include a 66 percent cut to renewable energy, an 80 percent cut to energy storage research and development within the Office of Electricity, and complete elimination 
122 

of the Loan Programs Office, just to name a few. Do you think that 

this budget proposal will spur the kind of American innovation 

that’s needed to help my hometown of St. Petersburg and other 

communities meet their clean energy goals? 

Mr. DABBAR. Thank you, Congressman, Governor. I very much 

appreciate that question. 

Mr. CRIST. Certainly. 

Mr. DABBAR. As the Secretary said, line items on budgets are 

subject to your appropriation and your focus. Our focus is to take 

the resources that you give us and to maximize that. And we are 

very excited. I think as you may know, the cost-effectiveness of 

solar and wind and other renewables in the last decade has dramatically improved in part—large part because of the Department 

and the national lab complex. 

Another area is also in batteries and storage. And so what we’re 

trying to do is to try to take the—not only the great research that 

you fund but also try to push it out into the market and also very 

importantly push it out into the market so that it’s manufactured 

here in the United States. And so those are the areas that we’re 

focused on. And we continue to take the resources that you give us 

and build on the accomplishments and all those in many other 

areas for St. Petersburg and other localities that want to attack it 

that way. 

Mr. CRIST. Great. Thank you. Earlier this year, the President imposed a four-year tariff on solar cells. I understand that you may 

not have had any direct involvement with that decision, but I have 

some very serious concerns about the impact it’s having on our domestic solar industry. The Solar Energy Industries Association says 

that this tariff could cost as many as 23,000 American jobs this 

year alone. Meanwhile, as far as I’m aware, no one has really given 

an estimate as to how many manufacturing jobs would be created. 

That plus the 72 percent cut to solar in this budget makes me 

think that the solar industry may be under fire. What is the Department of Energy planning to do to support those companies, 

their employees, and the solar industry as a whole when they have 

been negatively impacted by this tariff? 

Mr. DABBAR. Thank you. So the primary focus for the Department is around innovation and technology. That is our primary 

focus. Sir, as you said, we are not involved in some of those points 

that you were just mentioning. So what we’re really focused on— 

and I’ll talk about solar—is what is the next technology? And it’s 

great that there’s been significant improvement in cost and therefore affordability and applicability within—for localities to deploy 

solar and wind and others. But a big focus for us is what’s next. 

What can we continue to move down the cost structure and develop 

those technologies? 

So on solar, for example, perovskite crystals is a new area that 

we think could continue to drive down potentially the cost curve 

and make it even more affordable for St. Petersburg and other 

places to attack. And once again, we’re very focused on that and 

we’re very focused on once again those new technologies hopefully 

being developed and built here. 

Mr. CRIST. Great. Thank you, sir. I appreciate that. I want to 

switch gears and talk briefly about offshore drilling. I know that 
123 

the Interior Department handles that issue primarily, but as Governor of Florida when Deepwater Horizon exploded and I was a 

Congressman representing a coastal district, offshore drilling is always at the forefront of my mind. In Florida our economy is really 

dependent upon our environment vis-a-vis tourism. The threat that 

offshore drilling poses to our oceans and coastal communities is not 

worth the risk in my opinion. I know that may be different where 

the Secretary is from in Texas where drilling does significantly contribute to the economy. I simply ask that you appreciate that 

States like mine are concerned with the Administration’s proposal 

and that you share our concern with the Secretary, as well as other 

members of the Cabinet, as appropriate. And I appreciate you 

being here again, and I yield back. 

Mr. LUCAS. [Presiding] The gentleman yields back. 

The Chair recognizes the gentleman from Alabama, Mr. Brooks, 

for four minutes. 

Mr. BROOKS. Thank you, Mr. Chairman. 

Hopefully, you’re the right individual to ask, but if not, if you 

would please relay this question to Secretary Perry. 

The Trump Administration says it wants to revive the nuclear 

industry because developing new nuclear projects is critical to the 

long-term viability of the nuclear industry. Currently, the Vogtle 

plant is under construction, and there is also an additional proposal to finish two new nuclear plants at Bellefonte in my Congressional District. Hopefully, you are aware of them. 

Many billions of dollars were spent by TVA on the two Bellefonte 

plants, and completion was substantially underway before the 

spending of those monies was stopped. If those plants are completed, that will bring thousands of jobs and billions of dollars in 

private sector money to the economies of Alabama, Georgia, and 

Tennessee, as well as creating a reliable source of nuclear power 

with essentially no greenhouse gases. 

It is important to have viable financing support through programs like the Department of Energy loan guarantees, and I understand that an important goal of the Energy Policy Act of 2005 

is to encourage the construction of more nuclear plants, including 

those involving public-private partnerships via programs like those 

Department of Energy loan guarantees. 

That being the question—the case and before you respond to my 

two questions, let me add that Under Secretary Moniz, who appeared before our Committee, and his staff have been in communication with us and we appreciate the reference. 

So here are the questions. First, can you comment on the status 

and future of the Department of Energy loan guarantee program 

as it pertains to the Bellefonte project specifically or else generally? 

And second, will the Administration commit to expanding America’s nuclear power fleet? 

Mr. DABBAR. Thank you, Congressman. So on your first question, 

yes. In addition to talking with your office, the Loan Program Office has been engaged in talking with the team that has the option 

to purchase the Bellefonte plant, and they’re very much continuing 

those conversations. And, you know, within the context is what’s 

the authority? What is required in order to meet the requirements 
124 

of the loan is ongoing with them. So I can confirm that that is taking place, as well as the conversations with your office directly. 

Around the area of commercial nuclear in general, I think as the 

Secretary said, several times making references to Westinghouse 

and development, as well as both his and my comments around it, 

the request on the advanced nuclear program, as well as on safe 

fuel that we just issued a new FOA on this last week is a high degree of focus for us. It’s important for us as a country to continue 

our leadership on a broad range of issues for commercial nuclear, 

and we appreciate the consideration for that request in the budget. 

Mr. BROOKS. Thank you, sir. 

Mr. Chairman, I yield back. 

Mr. LUCAS. The gentleman yields back. 

The Chair now recognizes the gentleman from Virginia, Mr. 

Beyer, for four minutes. 

Mr. BEYER. Thank you, Mr. Chairman. I’d like to begin by submitting to—for the record if there’s no objection a letter from 87 bipartisan Members of the House to Chairman Simpson and Ranking 

Member Kaptur on Appropriations on ARPA–E Energy Innovation 

Hubs and EFRCs. 

Mr. LUCAS. Seeing no objection. 

[The information follows:] 
125 

C!rnngre.a.a nf tlpe 1tnitell ~tute.a 

Bu.sl:)ingtnu, ll(! 211515 

The Honorable Mike Simpson 

Chainnan 

Energy and Water Development, and 

Related Agencies 

March 16,2018 

House Appropriations Committee 

2362-B Rayburn House Office Building 

Washington, DC 20515 

Dear Chainnan Simpson and Ranking Member Kaptur: 

The Honorable Marcy Kaptur 

Ranking Member 

Energy and Water Development, and 

Related Agencies 

House Appropriations Committee 

1016 Longworth House Office Building 

Washington, DC 20515 

As Members with a strong interest in ensuring our nation's future energy security, we thank the 

subcommittee for continuing to fund several key Department of Energy (DOE) research and 

innovation programs and request that these programs are given high priority as you consider the 

Fiscal Year (FY) 2019 Energy and Water Appropriations bill. We are specifically writing to support 

three complementary approaches to tackling the critical energy innovation challenges before us: the 

Advanced Research Projects Agency-Energy (ARPA-E) program, Energy Innovation Hubs, and 

Energy Frontier Research Centers (EFRCs). 

As you know, DOE plays an important role in the development and incubation of clean energy 

innovation that benefits our nation and the economy. DOE programs such as these support scientific 

research and technological advances at multiple stages of the innovation pipeline. These ptograrns 

represent a robust portfolio of energy R&D investments, each of which complements the others to 

maximize our nation's ability to achieve energy breakthroughs as quickly as possible. These 

programs, outlined below, deserve your highest consideration. 

• ARP A7E: $346.5 miUion 

• Energy Innovation Hubs: $108.4 million 

• EFRCs: $110 million 

Advanced Research Projects Agency-Energy (ARPA-E): With significant federal investments, 

the DOD-funded Defense Advanced Research Projects Agency (DARPA) has been responsible for 

some of the most innovative technological breakthroughs of our time, from Global Positioning 

Systems (GPS) to the Internet. ARPA-E was created to replicate the successful DARPA model by 

incentivizing researchers to develop promising research into game-changing technologies that can 

meet our future energy needs. Despite the potential for a huge payoff, the private sector does not 

invest sufficiently in this kind of"high-risk, high-reward" energy research. Supporting ARPA-E is a 

bet on Americans' proven ability to tum creative ideas into market-creating, job-growing businesses. 

Since 2009, 136 of these projects have attracted more than $2.6 billion in private sector follow-on 

funding. For FY 2019. we request $346.5 million to enable ARP A-E to continue to invest in 

innovative ideas. 

PR!NTEO ON RECYCLED PAPER 
126 

Energy Innovation Hubs (Hubs): The Hubs are large, integrated research centers involving 

multiple disciplines, investigators, and institutions with a focus on bridging the gap between 

scientific breakthroughs and industrial commercialization. The Hubs use a centralized, missionoriented research approach like that employed by the Manhattan Project or at AT&T's Bell 

Laboratories. To date, DOE has established and Congress has supported five hubs focusing on: Fuels 

from Sunlight; Modeling and Simulation for Nuclear Reactors; Batteries and Energy Storage; 

Critical Materials; and Desalination. For FY 2019. we request $108.4 million to fully fimd the five 

hubs. 

Energy Frontier Research Centers (EFRCs): EFRCs consist of small groups of researchers 

focused on the fundamental science that underlies roadblocks to revolutionary energy technologies, 

such as interfacial chemistry for solar energy conversion and electrical energy storage. Unlike the 

Hubs and ARP A-E, these centers specifically focus on long-term chemical and materials science for 

energy applications. The centers also play a significant role in training graduate students in scientific 

disciplines central to overcoming energy-related grand challenges. After 2016, there are now 36 

EFRCs with related research activities being conducted in 35 states and Washington, DC. For FY 

2019. we request $11 0 million to support these centers. 

America's innovation history is built on a foundation of robust federal investment in fimdamental 

scientific research. At the same time, the public sector has a deep history of working hand-in-hand 

with the private sector to bring the fruits of this research to market, address market failures, provide 

needed expertise, and raise capital for high-payoff, though riskier, projects in which industry would 

not otherwise invest. Without such partnerships, the stories of the transcontinental railroad, the 

aviation sector, and biotechnology industries would be dramatically different. As in these past 

projects, the government has a critical role to play in helping to support and foster the new ideas that 

will serve as the foundation for the nation's future energy economy. 

Thank you for your consideration of these important DOE innovation programs. 

Sincerely, 

U..M&~ Donald S. Beyer Jr. .· 
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133 

Mr. BEYER. Thank you very much. 

Under Secretary Dabbar, you know, we live with yesterday’s 

tragic news of President Trump’s decision to withdraw from 

JCPOA, the Iran deal. Secretary Perry’s predecessor, Dr. Moniz, a 

nuclear physicist, was deeply and extremely involved in the building and the—of the negotiations that surrounded the deal. Do you 

have any evidence that Iran was failing to meet its obligations 

under the JCPOA or any reason that would justify the United 

States’ reneging on its commitment to JCPOA? 

Mr. DABBAR. I apologize, Congressman. I don’t have any, nor 

have I participated in, any conversations with the Department 

around that topic. 

Mr. BEYER. I wonder. It’s—you know, I’m far down the pecking 

order, but it would be wonderful in the appropriate way to request 

you would pass these questions on to Secretary Perry. 

Mr. DABBAR. I—— 

Mr. BEYER. And try to get these back within 24 hours if possible? 

Mr. DABBAR. Well, I’ll pass it along to the Secretary about your 

question, and he’ll follow up—— 

Mr. BEYER. And whatever—— 

Mr. DABBAR. —with what’s appropriate—— 

Mr. BEYER. —from a staff perspective, whatever formal way we 

can get these entered would be also—I also think it’s a little tragic 

that the Under Secretary for Science would not be included in 

those discussions. I certainly know that the science folks at the 

previous Department of Energy were deeply involved. 

You know, the Secretary has consistently referred to the resiliency and reliability of the grid as the reason for the concern about 

the nuclear and coal power plant closures. When the Secretary 

used his power under section 403 to appeal to FERC to bail out the 

coal companies in the name of resilience, FERC rejected that request. And now FirstEnergy has asked the Secretary to invoke his 

202(c) power under the Federal Power Act and prevent PJM, the 

electrical distributor, from retiring plants. 

Assistant Secretary Bruce Walker said the DOE would never use 

an emergency order under section 202(c), the Federal Power Act, 

to prop up an uneconomic generator. And PJM has demonstrated 

that their retirement of plants do not affect the reliance of the grid. 

Republican FERC Commissioner Neil Chatterjee just yesterday 

said that the retirements will not impinge on resilience. And if 

FirstEnergy’s bailout is granted, it would raise the cost of electricity by $8 billion annually for its consumers. It would discourage 

any investments in clean energy resources and begin the slippery 

slope of the federal government dictating the energy mix of States. 

So do you have any idea whether the Secretary intends to reject 

this bailout of FirstEnergy? 

Mr. DABBAR. So I can’t comment on ongoing discussions specifically on that, but obviously, it’s an important aspect of what we do 

from a technology point of view regarding reliability and power. A 

lot of what we do at the Department is evaluate and look at technologies associated with the changing energy mix. Obviously, taking baseload power off has an impact. That’s an obvious point. And 

a lot of energy has been replaced with intermittent. And, you know, 
134 

we think it’s appropriate for it to be reviewed and it is being reviewed. 

Mr. BEYER. Great. Thank you. And perhaps we can also send this 

question to the Secretary, too, on his intentions on the bailout. 

Mr. DABBAR. We’ll pass the question along, too, also Congressman. Thank you. 

Mr. BEYER. Thank you very much. 

And lastly, we know that a diverse grid incorporates renewables 

but that their intermittent reliability and intermittency is an issue 

and that battery storage, especially grid-scale battery storage, is 

the key to this diverse and resilient grid that you talk about. Do 

you know—are you supportive—is the Secretary supportive of 

FERC order 4—841 that directs the ISOs and the RGOs to develop 

market rules to more fully integrate energy storage as a resource 

on the electric grid? 

Mr. DABBAR. Congressman, I can’t comment specifically to the 

FERC order, but I can say that, in general, including battery storage as reliability backup to the electric grid, is an important technology that we’re providing and I think should get properly included in the market structure. 

Mr. BEYER. And I’m really impressed that AEP, which is—or 

AES rather, which is headquartered in my district in Rosslyn just 

across the river that their single biggest project right now is battery storage facility in California. 

Mr. DABBAR. So—— 

Mr. BEYER. Globally, so—— 

Mr. DABBAR. So battery storage is a major focus of what we’re 

looking at around commercialization, a much longer topic, but one 

of the things that we focused on around commercialization of what 

are the major technologies that you all and the taxpayers have allocated money, and the one area that we’re attacking first is how do 

we accelerate the technologies that we’ve developed on new chemistries for batteries that could potentially be much better than the 

lithium-ion. 

The first event that we’re doing, a first multi-lab event that we’re 

doing on how to push forward stronger our technologies is on batteries. We’re doing that at Stanford in conjunction with the university and our SLAC laboratory where we’re inviting all the labs together to meet with industry to figure out how do we take the next 

wave of technologies on batteries beyond lithium-ion as we like to 

call it and how to move that forward for the country. 

Mr. LUCAS. The gentleman’s time has expired. 

The Chair now recognizes the gentleman from South Carolina, 

Mr. Norman, for five minutes. 

Mr. NORMAN. Thank you, Mr. Dabbar. 

Can you give us an update on the DOE’s approval of the Advanced Manufacturing Collaborative that’s located in Aiken, South 

Carolina? And as you know, the intent is to have a workforce training of manufacturing jobs. 

Mr. DABBAR. So I can repeat again that this is a high degree of 

focus for us. This is something that we are completely supportive 

of at the Department, and we continue to work with OMB around 

getting the final approvals of this, and we certainly hope that we 

will be able to do that in the near future. 
135 

Mr. NORMAN. Do we have a timing that you would think? 

Mr. DABBAR. I would hope it’s quite near, but it’s been quite near 

for a little while, and I can say it has a disproportionately high 

focus within the Department compared to the cost. 

Mr. NORMAN. We appreciate that. Later this month, the Committee will hold a hearing on technology that supports veterans. 

Here, we will include a witness from your department who will be 

providing us information on the MVP Champion program. It’s very 

important to veterans. Can you give us some update on that? 

Mr. DABBAR. Yes, Congressman. So just—as people may know 

here, the Department of Energy has a long history in the bio area 

in genomics, and with a very long history, and so this is quite consistent with what the Department has done over time. One of the 

things that we have a great leadership role in the world is supercomputing and applying that to various different health topics, including around genomics. This is a program that we are continuing 

to move along, work with the VA and work with the National Institutes of Health. And we continue to move that along, and it’s a 

part of funding discussions as part of this budget. 

Mr. NORMAN. And if you could provide this committee with information, updates I guess on it on how it would be impacting exactly 

what we would be doing, and we would appreciate it. And if there’s 

anything that you think we can do as a Congress, we’d definitely 

like to know that. 

Mr. DABBAR. Thank you, Congressman. We’ll follow up with that 

detail, and it is an important area, and we’ll get you that detail if 

that would be helpful for your deliberations. 

Mr. NORMAN. Thanks so much. I yield back. 

Mr. LUCAS. The gentleman yields back. 

The Chair now recognizes the gentleman from the big 1st District of Kansas, Dr. Marshall, for five minutes. 

Mr. MARSHALL. Yes, thank you, Chairman. 

Let me start by saying thank you. Excuse me. The Secretary 

lined out several of your vision, your goals, stewardship, accountability, and service, and several of my folks back home in the energy sector have said indeed, under this Administration, things are 

going in a positive direction. Especially my friends from the Cuyahoga, Kansas, oil and gas industry expressed their gratitude. 

I’ve been waiting here so long my throat got scratchy. 

The Secretary has been a leader to ensure resiliency of the electric grid and has proposed that several proposed actions that could 

favor fuels with onsite storage like nuclear and coal. How could 

this approach disadvantage natural gas in particular, which is currently the most affordable fuel on the market, and what steps is 

the Department taking to invest in grid resiliency without picking 

winners and losers in the energy market? 

Mr. DABBAR. Yes. So thank you, Congressman. You know, I think 

it’s been a long history of this country to have diversity. The allof-the-above is an important aspect to it. Obviously, natural gas 

has had significant improvements in technology, and whether it’s 

in turbine efficiency or production costs. And once again, we do feel 

this is generally appropriate, as has been a bipartisan view of having diversity across all the energy types and that we can continue 
136 

that. So we consider natural gas just as important as nuclear and 

coal. 

What other areas are we focused on around grid resiliency? This 

is a particularly interesting area for me as Under Secretary of 

Science. What one particular area that we’re focused on is in machine learning and artificial intelligence. Collecting data from the 

grid on all the different data points around weather, around wind, 

around solar intensity, around demand that’s coming up the next 

day or the next week as a result of those coming through, all the 

capabilities of the power plants, the costs associated with interconnections is a great example of the applicability of machine 

learning for potential grid management. And we actually have a 

number of different machine-learning algorithms on how to optimize the grid that will help resiliency, will help dispatch to lower 

costs, and it’s a particularly very interesting area for us that, in addition to the points that the Secretary made earlier that I wanted 

to point out on this important topic. 

Mr. MARSHALL. Okay. Next, I want to talk a little bit about lowdose radiation health risk. As a physician, it’s been an area of concern. We certainly know that at some point there’s an all-or-nothing phenomena for radiation, whether dealing with a pregnant 

woman or an adult, and we don’t really know, you know, where 

those limits are for low-dose radiation. And the House proud that 

we passed H.R. 4675, the Low-Dose Radiation Research Act. Under the previous Administration, research in this area was 

abruptly called to a stop for some reason. Can you commit today 

to restore the Department’s leadership in this field of science? 

Mr. DABBAR. Congressman, as a user of low-dose radiation earlier in my nuclear engineering days, I’m completely sympathetic of 

the topic. We certainly have been discussing this. Certainly, we’ve 

been getting up to speed on the past work that has been done. And 

should you appropriate that exactly how we would take it forward, 

so should that happen, should you appropriate, we actually have 

specific ideas and plans. We’re really focused on the genomics aspects, which is a bit new compared to the previous work in the last 

Administrations that have focused on this topic. There’s obviously 

an area of focus for and expertise for the Department should it be 

appropriated. 

Mr. MARSHALL. Right. I spent a little time exposed to some lowdose radiation myself in a nuclear reactor at Kansas State University. 

Lastly, I’d like to just talk about CFIUS for a second, in particular referring to Citgo. I don’t know all the details but I think 

Russia recently invested in Citgo, some concern on my part about 

a Russian zoning refining industries in this country and just wonder if the Department has any concerns about this. 

Mr. DABBAR. I apologize. I’m not the right person, but we can 

certainly follow up with that question. 

Mr. MARSHALL. Okay. Thank you, and I yield back. 

Mr. LUCAS. The gentleman yields back. 

The Chair wishes to thank both the Secretary and the Deputy 

Secretary for their testimony and the Members for their questions. 

The record will remain open two weeks for additional written 

comments and questions from the Members. 
137 

This hearing is adjourned. 

[Whereupon, at 10:51 a.m., the Committee was adjourned.] 

(139) 

Appendix I 

ANSWERS TO POST-HEARING QUESTIONS
140 

ANSWERS TO POST-HEARING QUESTIONS

Responses by the Hon. Rick Perry 
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COMMITTEE ON SCIENCE, SPACE, & TECHNOLOGY 

Questions for the Record Responses from Secretary of Energy Rick Perry 

An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May9, 2018 

test beds. A centers-based approach will need to be balanced with a portfolio of core 

research. 

Q2. In quantum technology, there is a major gap between university research and industrial 

development. This gap threatens U.S. advancement in a field that holds the keys to next 

generation navigation, computing, communication and security. In order to stay ahead of 

our international competitors, how do you plan to develop a workforce prepared to 

advance quantum technology in the United States? 

A2. DOE plans to develop a quantum technology workforce through support of graduate 

students and postdoctoral researchers through our research grants and support for 

undergraduate internships and graduate student thesis research at national laboratories. In 

addition, the Department's Computational Science Graduate Fellowship program will 

expand its efforts to identify and support future quantum technology leaders. 

Q3. In your testimony to Congress on the FY 2019 budget, you have been asked a lot of 

questions about the future of ARPA-E. What is your opinion on the concept of expanding 

ARPA-E's role in the Department to include research and technology development across 

the broader DOE mission- such as nuclear waste clean-up, cybersecurity technology, 

and even identifying technology solutions to national threats. Do you believe that with an 

expanded mission goals, ARPA-E could help the Department quickly develop technology 

solutions in these areas? 

A3. Under the proposed reorganization and modernization plan for DOE, aspects of APRA-E 

would be consolidated with DOE's other applied energy research programs into a single 

Office of Energy Innovation. The goal would be to take "a holistic view of energy 

innovation to ensure Federal research keeps pace with the changing needs of the Nation's 

energy system while maximizing the value to the taxpayer" including aspects of ARPAE; furthermore, "ARPA-E features positive aspects, such as coordination with industry 

and cross-cutting research" but it does not need to be independent of DOE's main applied 

research programs. (See "Delivering Government Solutions in the 21st Century-Reform 

Plan and Reorganization Recommendations" issued by the Office and Management 

Budget, attached as Appendix A. 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May9,2018 

The proposed reorganization and modernization plan for the Department has been a 

preliminary effort with high-level conversation between DOE and OMB. The Department 

is still evaluating elements of the proposal to form its judgments on how best to 

implement the proposal. Any proposed changes would comply with existing statutory and 

regulatory requirements. 

Q4. From deep space robotic missions to mobile and emergency power, the U.S. is in need of 

cost-effective, small-scale, and transport-ready energy sources. What steps, if any, are 

you taking to support basic and early-stage research in solar and fusion energy for space, 

military and civilian applications? 

A4. Solar photovoltaics (PV) are inherently well-suited to small-scale and lightweight needs, 

as it has the same performance at any size. The Department's Solar Energy and 

Technologies Office (SETO) PV research focuses on I) reducing costs by examining new 

materials, processing techniques, and cheaper inputs; 2) understanding and mitigating 

degradation to increase PV lifetime; and 3) increasing efficiency by identifying defects, 

opportunities to incorporate tandem/multi-junction cell architectures, and solar cell 

material interface passivation. SETO has a broad portfolio of relevant PV research at 

universities, national laboratories, and private companies. 

Examples of relevant SETO-funded research include: Using advanced hydride vaporphase epitaxy hydride to grow lower-cost III-V solar cells, which are highly efficient and 

lightweight; Driving down the costs of multi-junction lll-V solar cells, which have record 

power conversion efficiencies over 45%; and Developing large-area perovskite cells that 

have reasonable lifetimes, are potentially cheap, flexible, and lightweight, and could be 

fabricated quickly and domestically. 

The Fusion Energy Sciences (FES) program in the Office of Science supports research to 

build the scientific foundation needed to develop a fusion energy source for civilian 

applications. Currently it is envisioned that such fusion energy sources would be neither 

sufficiently small-scale nor transport-ready for mobile energy needs. However, the early3 
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COMMITTEE ON SCIENCE, SPACE, & TECHNOLOGY 

Questions for the Record Responses from Secretary of Energy Rick Perry 

An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May 9, 2018 

stage research supported by FES should be applicable to any fusion energy source, 

independent of configuration and size. 

Many of the Department's technology advances could potentially support space, military, 

and civilian applications in the future. 

Q5. What is the status of the Department's efforts to accelerate the deployment of advanced 

reactors? 

A5. The Department is using financial assistance and grant opportunities to advance the 

Office of Nuclear Energy (NE) mission to accelerate the development and deployment of 

new reactor designs. In fiscal year (FY) 2018, the Department issued a unique, 5-year 

United States (U.S.) Industry Funding Opportunity Announcement (FOA) to support the 

most innovative ideas driving the development and commercialization of domestic 

nuclear technologies. This funding is expected to result in technologies that enable new 

commercially available products. In FY 2019, additional funds are expected to be made 

available through current NE programs and the new Advanced Small Modular Reactor 

(SMR) Research and Development (R&D) program to support R&D, including designrelated R&D, for the safest, most innovative SMRs and micro-reactors. 

Q5a. What about efforts, like the Gateway for Accelerated Innovation in Nuclear or GAIN 

Initiative, designed to support the commercialization of advanced reactor technologies by 

providing the nuclear community with direct access to the technical, experimental 

facilities, and ability to demonstrate technologies at national labs? Is there any plan to 

expand this successful program? 

A5a. The GAIN Initiative is supporting the U.S. nuclear power industry through private-public 

partnership, and addressing issues that may prevent successful commercialization and 

global competiveness. Examples include, but are not limited to, easy access by 

developers to unique facilities within the DOE complex and financial support for 

expensive R&D. 

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COMMITTEE ON SCIENCE, SPACE, & TECHNOLOGY 

Questions for the Record Responses from Secretary of Energy Rick Perry 

An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May9,2018 

Within available FY 2018 funding, NE initiated a new "Industry Opportunities for 

Advanced Nuclear Technology Development" FOA. This FOA is open for up to a fiveyear period and applications will be accepted on a year-round basis with selections 

announced every quarter. Selections to-date include 15 FOA awards and an additional 7 

GAIN voucher awards for a total of22 U.S. industry-led, cost-shared projects for 

approximately $80M in federal funding for cost-shared research and development for 

advanced nuclear technologies. GAIN vouchers fund work to be performed at DOE 

national laboratories on behalf of U.S. businesses. 

In FY 2018, the Department also supported testing at DOE's experimental facilities 

through its Nuclear Science User Facilities (NSUF) program. NSUF provides U.S. 

researchers with access to unique and highly-specialized nuclear research capabilities, 

instrumentation, and scientific support. These include the Advanced Test Reactor, the 

Transient Test Reactor, and many partner facilities with advanced capabilities that are 

necessary to accelerate advanced reactor technology deployment. 

The Department's plans to support acceleration of the deployment of advanced reactors 

for FY 2019 include the continuation of GAIN engagement, additional awards to U.S. 

industry through the FOA, and the expansion ofNSUF's access to unique nuclear science 

capabilities and expertise, with a focus on U.S. industry support. 

Q6. What is the Department doing to ensure its grants for advanced nuclear reactor 

companies do not interfere with private industry activities by distracting or diluting 

resources that would otherwise benefit industry in a cross-cutting fashion? 

A6. The Department is providing financial assistance grants and cooperative agreements to a 

number of companies that are expected to support a pipeline of domestic advanced 

reactors designs. The work supported under these private-public partnerships is expected 

to provide valuable data, capabilities, and designs that can be accessed by the U.S. 

nuclear industry to improve their designs and manufacturing capabilities. There is no 

5 
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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May9,2018 

expectation that financial assistance provided for advanced reactors will distract or dilute 

resources provided for cross-cutting research activities through other NE programs. 

Q6a. What about licensing support programs? Couldn't DOE providing licensing support 

grants actually make it more difficult for privately financed advanced reactor companies 

to get through the NRC process, since the NRC has limited resources available for 

nuclear reactor licensing? 

A6a. The FY 2018 Omnibus Appropriations Act Committee Report refers to DOE issuing "a 

solicitation to support technical, first-of-its-kind engineering and design and regulatory 

development of next generation light water and non-light water reactor technologies .... " 

DOE believes that providing licensing support grants in connection with this solicitation 

is highly unlikely to interfere with private licensing activity. The grants funded will be a 

source of new ideas, creating an opportunity for U.S. companies pursuing deployment of 

advanced nuclear technologies to interact with the Nuclear Regulatory Commission 

(NRC) and to explore new concepts and new applications for nuclear energy. 

Furthermore, in responding to the licensing activities supported by DOE grants, awardees 

will provide information to NRC that may be useful in NRC's efforts. 

Q7. The Fossil Energy Research and Development program leads the federal research, 

development, and demonstration efforts on advanced carbon capture, and storage 

technologies. Earlier this year, the Department announced a request for information for 

the design, construction, and operation of a small-scale, modular coal-based pilot-scale 

plant. Can you discuss how this new proposal will help open new opportunities for coalfired power plants? 

Q7a. Modular plants are thought to be an option to lower cost, improve efficiency, and 

improve flexibility to meet load demands. What are some examples of DOE's research 

that could help industry accomplish these goals for new modular systems? 

A 7a. R&D on modular system design will focus on the development of new materials and 

computational modeling that can be adapted by industry to design smaller, more reliable 

and efficient reactors to increase deployment opportunities. Advancements in modular 

systems could overcome siting, operating, and logistical constraints that currently inhibit 

6 
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COMMITTEE ON SCIENCE, SPACE, & TECHNOLOGY 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May9,2018 

the deployment of large scale plants. In addition, R&D in this area will also enable 

improvements in existing plant efficiencies through topping cycles, advanced materials, 

recovery of low grade waste heat, improvements in water usage, lower parasitic losses 

and the development of advanced sensors, instrumentation, and artificial intelligence 

control systems based on dynamic data analysis. 

DOE envisions that the coal-fired fleet of the future may be based on power systems with 

the following characteristics: 

• Reduced design, construction, and commissioning schedules from conventional 

norms 

• Modular, maximizing the benefits of high-quality, low-cost shop fabrication to 

minimize field construction costs and project cycle time 

• Designs developed with advanced process engineering and parametric design 

methods 

• Simplified maintenance features 

• Integration with energy storage, coal upgrading, or other plant value streams 

• Near-zero emissions, including carbon capture ready 

• Capable of high ramp rates 

• Load following capability down to 25% of Maximum continuous rating (MCR) 

• Minimized water consumption 

This envisioned plant would be of modular design and capable of distributed generation; 

have a greater than 40% efficiency improvement, thereby reducing operating costs and 

overall emissions; use state-of-the-art materials and processes, including advanced 

sensors and controls to maximize its efficiency and further minimize emissions; and be 

economically competitive. 

The plant would also be equipped with advanced emission control systems. This includes 

the plant either being "carbon capture ready" or deploying carbon capture for enhanced 

oil recovery, utilization, or storage. This plant would be a critical contributor to the grid 

7 
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COMMITTEE ON SCIENCE, SPACE, & TECHNOLOGY 

Questions for the Record Responses from Secretary of Energy Rick Perry 

An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May 9, 2018 

of the future, and offer both "firm and flexible" operations-providing stable power with 

operational flexibility and high efficiency, such that it can quickly meet the needs of the 

evolving grid. 

The following research areas could contribute to accomplishing these goals: advanced 

materials (e.g., for condensers, turbines, boilers and heat exchangers); sensors and 

contro Is for efficient, flexible operation; condition-based maintenance; parametric system 

designs; advanced manufacturing (especially for modular, shop-built fabrication); 

gasification; fuel cells; gas turbines; supercritical carbon dioxide power cycles; 

simulation-based engineering; and energy storage. 

Q7b. Do you think the development of small modular fossil fuel plants could face similar 

hurdles to the development of small modular nuclear reactors? 

A7b. Small modular fossil fuel plants should have the same beneficial attributes as small 

modular reactors (SMRs) including lower overall cost, the ability to site the plants in 

more locations, the ability to incrementally add units as needed, and the ability to factory 

manufacture and mass produce components and parts with an accompanying reduction in 

construction costs. Due to the nature of fossil power plant operations, developing a new, 

scaled-down version of a coal or natural gas burning plant could be done with 

significantly less construction and operational uncertainty than SMRs. Specifically, small 

modular fossil fuel plants would not face the degree of regulatory oversight currently 

impacting the design, certification, and eventual operations of an advanced nuclear plant 

such as an SMR. 

QS. The United States no longer has an active uranium enrichment industry, and the only 

work being done on an existing domestic enrichment technology is at a small 

demonstration program in Oak Ridge. There is particularly the lack of low enriched 

uranium above 5%, which is needed for many advanced reactor designs. Based on the 

progress being made by advanced reactor developers towards deployment, it is likely that 

some of these designs may be licensed and built, but unable to load fuel. What is the 

Department doing to ensure this does not happen? 

8 
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COMMITTEE ON SCIENCE, SPACE, & TECHNOLOGY 

Questions for the Record Responses from Secretary of Energy Rick Perry 

An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May 9, 2018 

A8. Currently, there is no capability in the United States to produce High-Assay LowEnriched Uranium (HALEU), which is uranium enriched to between 5% and 20% U-235. 

A continuing lack of a HALEU production capability could adversely impact the 

deployment timetable for advanced reactor systems. Establishing HALEU production 

capability is critical to U.S. leadership in this emerging market sector, and to advancing 

vital strategic interests, and some quantities ofHALEU fuel will be needed to support 

research, technology development or licensing support activities well before a reactor 

concept can be licensed or constructed. 

Q8a. And what is the Department doing to restore and advance domestic uranium enrichment 

capabilities? 

A8a. The Department's Office of Nuclear Energy is exploring several options to ensure that 

necessary quantities of HALEU are available to advanced reactor developers for 

demonstrating and deploying advanced reactors. These options include down-blending 

highly enriched uranium and enriching uranium to higher levels than currently being 

produced. Down-blending options consist of potential reuse of material from the 

treatment of Experimental Breeder Reactor II fuel, as well as the recovery of enriched 

uranium from used naval reactor fuel. We are also working closely with industry 

stakeholders to improve forecasts of the quantity of material, specifications and timing to 

meet the needs of developers. These planning efforts are coordinated with the National 

Nuclear Security Administration's efforts to identify a source of enriched uranium for a 

variety of mission needs. A domestic source of U .S.-based enrichment technology would 

improve our ability to meet strategic energy security objectives. 

Q9. H.R. 4367, the "Department of Energy Research Infrastructure Act of 2017 ," authorizes 

upgrades and construction of major user facilities at the Department of Energy (DOE) 

national labs within funding allocated to the Basic Energy Sciences Program and the 

Nuclear Physics Program within DOE's Office of Science. If this legislation is enacted, 

what steps will you take to ensure that these key facilities receive the resources necessary 

to finish construction on time and on budget? 

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A9. The Office of Science (SC) supports a balanced portfolio of(!) forefront basic research, 

(2) the upgrade and construction of world-leading scientific user facilities, and (3) the 

operation of these facilities. Each facet of this portfolio is essential to maintaining 

international competitiveness and providing the foundation for many applications of 

potential societal benefit. Within available funding, SC balances these aspects of the 

portfolio and continues to successfully deliver our highest priority investments in facility 

upgrades on time and on budget. 

In addition, SC has a well-documented approach to project management oversight that 

adheres to DOE Order 413.3B. As part of this process, major construction projects are 

baselined for cost and schedule, including contingency, by the SC Office of Project 

Assessment. Once a project baseline has been established, the SC annual budget requests 

include the resources needed to successfully implement the project. 

Q9a. Do you believe that research infrastructure is the primary way DOE supports innovation 

at the national labs? 

A9a. Research infrastructure is an essential, enabling resource supporting innovation at DOE 

labs. However, the primary engine driving U.S. innovation is the principal investigators 

at universities and national laboratories. DOE support for research infrastructure creates 

unique opportunities at DOE labs at the frontiers of science and technology. DOE support 

for principal investigators at universities and national laboratories leverages those 

opportunities to create innovative technology and new knowledge, underpinning U.S. 

competitiveness and national security. Both of these clements are essential. 

QIO. DOE has a long history of public-private partnerships in the Fossil Energy Research and 

Development (FER&D) program, and the National Energy Technology Laboratory 

(NETL) spearheads this research. However, NETL remains the sole government 

operated laboratory the Department oversees. Could you describe the differences in 

research performed in the GOCO vs. GOGO model? Why is this GOGO model the best 

option for the fossil energy lab? 

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AIO. One of the main benefits of the GOGO model is ownership of the full RD3 lifecycle. 

Rather than early stage research being performed by one entity (National Lab) and then 

technology maturation being managed at the Program Office level in conjunction with 

Industry, the GOGO model enables integration and synchronization of the early-stage and 

technology maturation research portfolios. This integration better focuses early-stage 

research, enhances collaborations with researchers in academia, industry, and other 

National Laboratories, and increases the ability to consistently provide better science and 

research results. 

Other GOGO benefits include the ability to be integrated with HQ in strategy 

development and convening authority among stakeholders to further collaboration. A 

GOGO National Lab is uniquely positioned to act on behalf of the Government and 

provide unbiased, science-based analyses of energy policy, legislation, and regulations. 

Qll. The FY 2019 budget request proposes a shift away from large, commercial scale carbon 

capture and storage projects, to small pilots to demonstrate first generation technologies 

in carbon capture, storage, and carbon use and reuse. This should restore the relationship 

between DOE and industry, allowing DOE to develop next generation technologies, but 

giving industry the responsibility to take those technologies to commercial scale. Can you 

provide us with an update on some of the technology innovations DOE is pursuing in the 

fossil energy program? 

All. DOE's Carbon Capture Program is pursuing technology innovations to reduce the cost 

and energy required to separate carbon dioxide from flue gas (post-combustion carbon 

capture) or synthesis gas (pre-combustion carbon capture). The R&D effort is focused on 

advanced solvents, solid sorbents, and membrane systems. In addition, process 

engineering improvements and hybrid approaches are being investigated to reduce cost 

and improve efficiencies. 

DOE's Carbon Storage Program is also pursuing technology innovations to advance the 

effectiveness of onshore and offshore carbon storage, reduce the challenges to its 

implementation, and prepare the way for widespread commercial deployment. The R&D 

effort is developing, field-testing, and integrating technologies and data throughout the 

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entire value chain (e.g., site characterization, monitoring). These technologies are 

focused on reducing risks and costs while ensuring safe, permanent storage. The 

program is also advancing our fundamental understanding of fluid migration in the 

subsurface and developing technologies for real-time monitoring and gee-steering-all of 

which also benefit the associated storage of carbon dioxide in enhanced oil (or gas) 

recovery operations. 

DOE's Carbon Use and Reuse Program is pursuing technology innovations to utilize 

carbon dioxide to cost-effectively create valued products while making no additional 

contribution to carbon emissions. The R&D effort is developing catalysts and efficient 

manufacturing techniques to convert carbon dioxide into plastics and chemicals, possibly 

using waste energy or other alternative energy resources to drive the conversion process. 

In addition, technologies are being developed to convert carbon dioxide to solid minerals 

and to utilize carbon dioxide in the manufacture of high-strength cement. 

Qlla. What tools does the Department need to better leverage federal resources to advance 

fossil energy innovation? 

All a. The Fossil Energy Research and Development (FER&D) program advances 

transformative science and innovative technologies that enable the reliable, efficient, 

affordable, and environmentally sound use offossil fuels. Fossil energy sources 

constitute over 80% of the country's total energy use, and are important to the nation's 

security, economic prosperity, and growth. While the percentage of coal used for 

electricity generation has dropped over the past decade due to increased capacity from 

renewables and generation by natural gas plants, according to EIA data, coal is projected 

to play a critical role to our economy by providing electric power for decades to come. In 

addition to power generation, coal is a crucial feedstock for the steel and cement 

industries, two industries that are essential to our infrastructure. 

The Transformative Power Generation program, for example, would support improving 

the efficiency and reliability of existing and new power plants by developing and 

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applying advanced new materials, instrumentation and monitoring equipment, and 

controls systems that improve the efficiency and reliability of existing units over the load 

range. 

By enabling the continued operation of the coal fleet, this program can support domestic 

coal jobs by helping to revitalize the industry. It can also help to improve reliability of the 

nation's power grid by sustaining and potentially expanding reliable base load power 

across the nation. 

DOE remains committed to creating commercially viable economic solutions to protect 

our environment and enhance our nation's energy independence. A reliable and resilient 

electrical grid is critical not only to our national and economic security, but also to the 

everyday lives of American families. Coal can play a significant role in ensuring grid 

resiliency and reliability. 

Q 12. Within DOE programs, can you provide an example of an advancement in technology 

that could only have been accomplished with DOE support? 

Al2. An emblematic example is chrome molybdenum steel, also known as chrome-moly steel, 

which is significantly stronger and more heat- and corrosion-resistant than normal steel 

and is used today in an extraordinarily wide range of applications from nuclear reactor 

vessels, steam tanks, and coal-fired plants, to aircraft parts, vehicle axles, and high-end 

bicycle frames. It was developed at Oak Ridge National Laboratory in the 1970s for use 

in a planned Tennessee Valley Authority nuclear reactor and went on to find countless 

applications in all comers of the modem economy. The development of chrome-moly 

steel exemplifies the central role that DOE and the DOE national laboratories have 

played in the discovery and development of new materials to drive American 

technological progress and innovation. This role has two major dimensions. First, the 

Department provides the largest share of direct Federal support for materials science and 

engineering research, with much (though not all) focused on materials in extreme 

conditions-such as those required for nuclear reactors or other energy production 

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facilities. SC has been the major supporter of basic research in this area but has also long 

cooperated with the Office of Energy Efficiency and Renewable Energy (EERE) and the 

Office of Fossil Energy (FE) in helping to accelerate the transition from discovery to 

market. Second, SC's major scientific user facilities-in particular, the five large x-ray 

light sources and the two neutron scattering sources at the national laboratories-have 

driven discovery by providing ever deeper insight into the microstructure of materials, 

enabling the development of a wide range of lighter, stronger materials for aircraft, 

vehicles, and other applications. In addition, we are moving increasingly toward an era 

of rational design of materials, drawing on the Department's world-leading highperformance computing capabilities to accelerate the discovery process through 

computation. In short, the Department's role in advancing materials research and 

discovery, as a core energizer of technological innovation and the American economy, 

has been and continues to be nothing less than indispensable. 

Another example of revolutionary changes underway in the U.S. energy economy has 

been the advent of solid-state or LED (light-emitting diode) lighting-a technology that 

largely owes its existence to substantial DOE investments in both basic and applied 

research over recent decades. LED bulbs, which rely on semiconductors rather than 

filaments to generate light, are at least 75 percent more efficient than incandescent bulbs 

and last 25 times longer. Their use is bringing significant energy savings for both 

individual households and the Nation as a whole-with the promise of more down the 

road. Roughly a third of U.S. households are currently using at least some LED bulbs, 

according to a recent report by the Energy Information Agency, and LED bulb use is 

steadily spreading. It is estimated that by 2027, LED lighting across the Nation could 

save the equivalent of the output of 44 1000-megawatt energy plants, or $30 billion in 

today's energy costs. Through both SC and EERE, DOE supported both the basic and 

the applied research needed to develop this technology and transition it to the 

marketplace. The Department has sponsored over 290 research projects in solid-state 

lighting that generated more than 290 patents and patent applications. SC supported key 

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advances in the chemistry and precise technique of deposition needed to produce the 

LEDs as well as computer modeling that led to better understand the principles governing 

the operation of these semiconductors. EERE has partnered with industry to translate 

these discoveries into practical products and continues to work with industry to improve 

performance. Today you can walk into any supermarket, hardware, or big box store and 

purchase energy-saving LED bulbs for your home at a very reasonable price-a 

possibility that would not have existed in the absence of major DOE investments in both 

basic and applied science. 

Another example is the development of a world-first hybrid laser-mechanical drill 

assembly technology through the support of Foro Energy by ARPA-E. The project 

proposed combining a rotating drill bit with a new laser transmission system to project 

laser radiation onto the rock surface while rotating. The novel approach, combining laser 

and mechanical drilling technologies, could support accessing next-generation energy 

resources in a more timely and cost-effective manner. During its ARPA-E award, Foro 

demonstrated a world-first ability at surface to drill hard rock at I 0 feet per hour over 

multiple hours of operation on test bedrock, as well as project 20k W laser energy for 

12,000 feet distance in a rig-hardened fiber optic cable. The ARPA-E project opened the 

door to applications in drilling geothermal wells, and a novel technique for safe oil and 

gas well completion. 

Q12a. What about investments that are better suited for private industry to undertake? Are there 

any examples in DOE's current portfolio where you feel the private sector might be better 

suited to take the lead? 

A12a. The DOE Office of Science supports basic and use-inspired basic research that may be 

characterized as discovery research; industry research is primarily focused on applied 

uses that serve the interests of the company. 

Q 13. The Department's FY 2019 budget request, proposes to eliminate the Advanced 

Technology Vehicles Manufacturing Loan Program and the Title 17 Innovative 

Technology Loan Guarantee Program. The President's recently issued rescissions 

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request from prior year appropriations also includes cuts to prior year balances for these 

programs. 

DOE has an excellent track record offunding basic and early-stage research, and 

allowing the private sector to finance and deploy new technologies. DOE's track record 

on the loan program is less than successful, with over $800 million in taxpayer dollars 

wasted on bad loans to failed technology companies. Do you believe the Department 

should get out of the finance business, and focus on the research and development it does 

best? 

Q 13a. Why is it beneficial to the private sector to have the federal government only fund basic 

and early-stage research, and not compete with private financing for technology 

deployment? 

Al3. The Budget proposes to eliminate the Title XVII Innovative Technology Loan Guarantee 

Program, the Advanced Technology Vehicle Manufacturing (A TVM) Loan Program, and 

the Tribal Energy Loan Guarantee Program, because the private sector is better 

positioned to finance the deployment of commercially viable energy and advanced 

vehicle manufacturing projects. ' 

The Federal role in supporting advanced technologies is strongest in the early stages of 

research and development. The Government should not be in the business of picking 

which technologies "win" the commercialization race and displacing private sector 

investment opportunities. Instead, the Government should recognize the private sector's 

primary role in taking risks to finance projects in the energy and automobile 

manufacturing sectors. 

Q 14. The Department has prioritized maintaining the resiliency and reliability of the electric 

grid, including proposing new PERC rules to prioritize reliable fuels like fossil and 

nuclear power. What is the Department doing- particularly in the applied energy 

research programs that are under this Committee's jurisdiction- to ensure that those 

reliable energy sources can remain a competitive part of America's power grid? 

Al4. In the Light Water Reactor Sustainability program, DOE's Office ofNuclear Energy 

(NE) is conducting R&D to improve the economics, reliability, and maintain high levels 

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of safety in the existing fleet through plant modernization and risk-informed systems 

analysis. The plant modernization R&D efforts will enable modernization of plant 

systems and processes while building a technology-centric business model platform that 

supports improved performance at a lower cost. Specifically, this area is investigating 

human performance improvement for nuclear power plant field workers; outage safety 

and efficiency; centralized online monitoring and information integration; and integrated 

operations, automated plants, and hybrid control rooms. The risk-informed systems 

analysis R&D is focused on the benefits associated with an enhanced, resilient plant; 

assessing alternative margin recovery strategies; and supporting risk re-categorization 

and risk-informed plant enhancements. NE is also conducting R&D to leverage 

contributions from nuclear fission beyond the electricity sector through the Hybrid 

Energy Systems program. Currently, this program is investigating the feasibility of 

integrating an existing nuclear power plant with a large-scale desalination process for the 

treatment of regional brackish groundwater and evaluating the potential for hydrogen 

production via nuclear energy to support a broader industrial ecosystem. 

Q 15. The Joint Center for Energy Storage Research (JCESR) is a consortium of national labs, 

universities, and industry partners, including, Argonne National Lab University of 

Illinois, Northwestern, and University of Chicago. It integrates discovery science, battery 

design, and pre-commercial prototyping in one interactive organization focused on 

developing next-generation batteries beyond current lithium-ion technology. Now that 

JCESR is 5 years into its work, what lessons have we learned? What impacts has this 

consortium had on speeding the development of battery technology? 

A 15. Over the past five years, the Joint Center for Energy Storage Research (JCESR) has 

focused on advancing the understanding of the fundamental electrochemistry for 

advanced electrical energy storage solutions that are critical to the Nation for a reliable 

electrical grid and improved batteries for vehicles, as well as addressing the materials 

challenges required for these solutions. JCESR has focused on the development of an 

atomic-level understanding of reaction pathways and development of universal design 

rules for electrolyte function for battery systems that go beyond lithium-ion with an 

emphasis on discovery of new energy storage chemistries. JCESR pioneered the use of 

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technoeconomic modeling to provide a "cost" consideration in setting its fundamental 

research directions for next generation batteries. JCESR research has significantly 

advanced new energy storage pathways including demonstration of a new class of 

membranes for anode protection and flow batteries, elucidation of the characteristics 

required for multivalent intercalation electrodes, understanding of the chemical and 

physical processes that must be controlled to protect the inventories of active materials in 

lithium-sulfur batteries and greatly improve cycle life, and computational screening of 

over 16,000 potential electrolyte compounds using the Electrolyte Genome protocols. 

JCESR's early stage research, based on a strong partnership among national laboratories, 

universities, and industrial participants, has created a library of fundamental scientific 

knowledge of the phenomena and materials of energy storage at the atomic and molecular 

level and demonstrated a new paradigm for battery R&D-integrating discovery science, 

innovative architectures, computational methodologies, and research prototyping to foster 

advances for energy independence and economic competitiveness. 

Q15a. Now that the first five years of the Hub has been completed, what should the next five 

years JCESR look like if it is renewed? How important is its work to developing the 

next-generation battery and storage technologies? 

A ]Sa. JCESR was renewed in FY 2018, and the emphasis is on the discovery of new materials 

and chemistries beginning at atomic and molecular levels. Among the drivers for the 

research is transformational performance, such as increased stability to improve battery 

lifetimes and enhance safety, for stationary storage critical for the electrical grid, and 

advances for transportation. DOE is proactively leveraging the research efforts across the 

Department to translate scientific advances to technology applications. 

QJSb. In the Committee's House-passed H.R.589, it gives the Department some discretion on 

the continuation and closure of these initiatives. Which Hubs provide the most value to 

the innovation engine? Would you reprioritize, eliminate, or start new initiatives based 

off the Administration's priorities? 

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Al5b. Both JCESR and the Joint Center for Artificial Photosynthesis are making critical 

contributions to the Nation's future. Rapid progress in battery technology will be vital to 

both transportation and the grid. Artificial photosynthesis holds out the promise of a 

revolutionary new clean energy source from sunlight. Both Hubs have excellent track 

records based on performance to date. 

DOE will continue to assess whether other scientific and technical challenges can be best 

addressed through a Hub-like modality. 

Ql6. The Department's August 2017 "Staff Report on Electricity Markets and Reliability" 

acknowledges, cost-competitive energy storage "will be critical" to balance the grid 

under high levels of variable renewable energy. As electricity systems move towards 

greater variable renewables, large-scale energy storage will become increasingly 

important- capturing excess electricity, including renewable energy generation, when 

demand and prices are low, and then utilizing that energy during peak demand times with 

low storage cost. What importance is the Department placing on research in battery 

technologies? How does this research differ from the private sector interests and research 

in battery technology? 

Al6. The Office of Electricity's (OE) Energy Storage program is designed to develop new and 

advanced technologies that will ensure the stability, reliability, and resilience of 

electricity infrastructure. The program focuses on accelerating the development of new 

materials and device technologies that can lead to significant improvements in the cost 

and performance of grid-scale energy storage systems and accelerate the adoption of the 

energy storage into the grid infrastructure. In FY 2019, R&D efforts will continue to be 

focused on early stage high risk research of novel materials and key components for 

promising megawatt-scale energy storage systems, which will provide added resilience 

and control capabilities to the grid. Due to the high risk nature of this research, the private 

sector would typically underinvest in these areas. 

The Office of Energy Efficiency and Renewable Energy (EERE) focuses on accelerating 

the application of new and advanced energy storage technologies that can be used in 

buildings, electric vehicles, or to help address the added variability of renewable 

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technologies. Sustainable Transportation programs within EERE focus on batteries and 

hydrogen for vehicle-based energy storage, with research aimed to reduce battery cost, 

volume, and weight, while improving performance (power, energy, and durability) and 

the ability to tolerate abuse conditions. 

Q 17. Late last year, the Department reorganized program responsibilities between the two 

undersecretary positions, and separated the Office of Science and the applied energy 

research offices. Over the last five months, what examples could you share with this 

committee on the benefits to the management change that advances the Department's 

goals? 

Q 17a. How does this management structure improve the Department's operations compared to 

the last administration's management structure? 

A 17a. Under the DOE Organization Act, the Secretary of Energy has the authority to organize 

the Department in order to meet the needs of the current time and support and advance 

the policy priorities of the Administration. This new structure supports American energy 

dominance, enhances our energy and national security, and improves outcomes in 

environmental management while ensuring DOE remains the leader in scientific 

innovation. 

The Under Secretary of Energy focuses on energy policy, applied energy technologies, 

energy security and reliability, and certain DOE-wide management functions, while the 

Under Secretary for Science focuses on supporting innovation, basic scientific research, 

and environmental cleanup. 

Elements of the former Under Secretary for Management and Performance's portfolio 

have become the responsibility of the Deputy Secretary of Energy. 

This new structure enhances DOE's focus on early-stage scientific research and 

development and energy technology innovation, while improving environmental and 

legacy management outcomes. 

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QUESTIONS FROM RANKING MEMBER JOHNSON 

Q 1. The Fiscal Year 2018 omnibus funding bill included significantly increased funding for 

fusion energy research, and for the ITER international fusion project specifically. The 

bill's report language stated that the funds are for "the in-kind contributions and related 

support activities of ITER." That would certainly include the required cash contributions 

from the U.S. to the ITER international organization to maintain the project's cost and 

schedule, per our long-established obligations to the project. 

Q I a. Is this your understanding as well? 

A I. Pursuant to direction from Congress and statutory restrictions, the Department of Energy 

(DOE)'s understanding is that the $122M of appropriated funds is for "the in-kind 

contributions and related support activities ofiTER'' in FY 2018, which will enable the 

U.S. to maintain adequate progress on the highest priority in-kind hardware contributions 

required for First Plasma (Central Solenoid magnet modules, structural components, and 

assembly tooling, as well as Tokamak Cooling Water design efforts and hardware 

components), but that these appropriated funds in FY 2018 do not include a cash 

contribution. 

Qlb. Will the United States be making a cash contribution to ITER in FY 2018? What are the 

impacts on the cost and schedule ofthe U.S. contribution to ITER if we do not provide 

these cash contributions soon? 

A I b. Pursuant to direction from Congress and statutory restrictions, the Department's 

understanding is that the $122M of appropriated funds for "the in-kind contributions and 

related support activities of ITER" in FY 2018 do not include a cash contribution. Nonprovision of these cash contributions may impact the ITER Organization's ability to carry 

out the assembly, installation, and commissioning of the hardware systems. 

Q2. Secretary Perry, at the recent ARPA-E Summit you spoke very highly of the great work 

taking place at ARPA-E. Your praise falls in line with many experts in academia and 

industry, including the National Academies and the U.S. Chamber of Commerce that 

believe ARPA-E's work should not only be supported, but expanded. Unfortunately, your 

budget proposal does the opposite. 

Q2a. Why do you want to eliminate ARPA-E? 

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Q2b. What expert recommendations support this proposal to eliminate ARPA-E? Can you 

name specific organizations or experts that agree with this move? 

Q2c. What experts did you discuss this proposal with? 

A2a-c. The elimination of ARPA-E has been in the President's FY18 and FYI9 budget 

proposals, yet Congress has continued to fund the program. The House Science 

Committee has recently proposed reforms to ARPA-E that would give the Secretary of 

Energy greater discretion in prioritizing ARPA-E's research initiatives. As with all 

programs, DOE will follow authorizing and appropriations laws relative to ARPA-E. 

Q3. As you likely know, in December the Government Accountability Office (GAO) 

announced that DOE had committed an illegal impoundment of$91 million in funding 

for ARPA-E, which violated the Congressional Budget and Impoundment Control Act of 

1974. Prior to this, GAO had not found an Impoundment Control Act violation in more 

than a decade. 

Q3a. What are you doing to ensure that this does not occur again under your watch? 

A3. The FY18 budget request included a proposal to cancel $91 million in prior-year funds. 

As we waited for final enactment of the FY18 bill, the program did not obligate this 

funding, to avoid limiting Congressional prerogatives if it decided to rescind this funding. 

This action had no impact on funding for ongoing activities; final decisions on awards for 

new funding opportunities were temporarily delayed until a final bill was passed. 

Q4. Your budget request declared some research as early-stage, and therefore worthy of 

federal support, and other activities as later-stage research that should be immediately 

eliminated given that the private sector is supposedly better equipped to carry them out. 

However during a briefing to Congressional staff, and for the second year in a row, 

Administration officials confirmed that they did not engage with the private sector at all 

while compiling the FY 2019 budget request to determine what industry would be able or 

willing to pick up. 

Q4a. Given this complete absence of engagement with industry even as the Administration 

proposed massive, sweeping cuts to these programs, how did you determine what DOE 

should or should not s).lpport across these program offices? 

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Q4b. Are the cuts proposed in the FY 20 19 budget research areas that the private sector is 

willing to start funding after the federal government cuts them? If you didn't consult with 

them before proposing these massive cuts, then what are you basing these cuts on? 

Q4c. Should the federal government engage with stakeholders in the private sector to 

understand what research areas they are likely to fund on their own before it proposes to 

completely eliminate or drastically reduce funding for R&D programs? 

If so, do you plan to make any changes in your budget development process going 

forward? 

A4a-c. DOE will continue to play a leading role in early-stage, fundamental energy research and 

innovation. This early-stage research is critical to advancing American energy 

innovation, and is often used by our private sector in competing across the globe. 

Continuing American scientific and technological leadership is important not only for 

improving our understanding of the world, but also for the economic growth of our 

nation. The FY 2019 President's Budget refocuses DOE's energy and science programs 

on early-stage research and development with a renewed focus on cutting-edge 

innovation and transitioning those breakthroughs to the private marketplace. 

All funds have been released for obligation. As a result, GAO did not issue a formal 

report to Congress under the Impoundment Control Act. All funds have been made 

available, and will continue to be made available, consistent with the requirements of the 

Act. 

Q5. The terms "early-stage research" and "late-stage research" seem to be used in a rather 

cavalier fashion in the FY 2019 budget as a rationale to cut a program or fund another. I 

have yet to see how the Department defines these terms though. 

Q5a. Can you define for me what "early-stage research" is and what "late-stage research" is? 

A5a. In general, early-stage research focuses on technology challenges that present a 

significant degree of scientific or technical uncertainty across a relatively long period, 

making it unlikely that industry will invest significant R&D on their own. The primary 

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goal of early-stage R&D is to generate knowledge upon which industry as a whole, not 

individual companies, can develop and deploy innovative energy technologies. The 

R&D results would be widely useful to or adoptable across industry. 

While not interchangeable with early- and late-stage, the definitions of basic and applied 

research in Office of Management and Budget Circular No. A-ll: 

Basic research is defined as experimental or theoretical work undertaken primarily to 

acquire new knowledge of the underlying foundations of phenomena and observable 

facts. Basic research may include activities with broad or general applications in mind, 

but should exclude research directed towards a specific application or requirement. 

Applied research is defined as original investigation undertaken in order to acquire new 

knowledge. Applied research is, however, directed primarily towards a specific practical 

aim or objective. 

5b. Is it your belief that policymakers can and should draw a bright red line between "basic" 

and "applied" research or between early-stage and late-stage research? Or should we be 

realistic and identify where the government can play a valuable role in de-risking 

technologies and partnering with industry? 

It is generally possible to distinguish meaningfully between basic and applied research. 

The Department's organizational structure reflects this, with the Office of Science 

focusing on basic research and the Department's technology offices (EERE, FE, NE, and 

OE) focusing on applied research and maintaining close relationships with industry. 

There is a very clear case for Federal support of basic research-something demonstrated 

by America's leadership since the end of World War II, when it was first recognized that 

U.S. leadership in science would henceforth be critical to America's economic 

competitiveness and security as a Nation. But if the Nation is to benefit fully from the 

discoveries of federally sponsored basic research, in many cases there needs to be a 

means to transition these breakthroughs to the market. The Department's applied 

research offices play this role in helping transition Office of Science-supported 

discoveries to commercialization. This has been the case, for example, with battery 

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May 9, 2018 

technologies, where, say, a basic research breakthrough in potential cathode materials 

needed to be incorporated into a workable battery prototype before there could be 

commercial interest. 

Q6. You have been exploring several policy options to provide additional support to coal and 

nuclear plants, and argue that they are required for the reliability and resiliency of our 

electric grid. You then make the point that the energy market is not free and so doesn't 

sufficiently value these attributes. 

Q6a. However, nuclear energy has different characteristics, including zero emissions, which 

may provide a greater overall benefit to U.S. taxpayers than coal without carbon capture. 

If so, would it make more sense to provide a greater financial incentive to maintain our 

current nuclear fleet and support other zero emission sources of energy that better meet 

our nation's energy security and environmental needs, rather than lumping coal and 

nuclear energy together? 

A6a. America's national security and energy dominance depends on a reliable, resilient electric 

grid powered by a diverse mix of generation resources that help mitigate disruptions and 

enable rapid response when disruptions occur. Coal and nuclear are fuel-secure 

traditional base load resources and are essential components of our energy future. 

Nuclear power, for example, provides approximately 20 percent of the electricity 

generated in the United States, it is one of the most reliable sources ofbaseload power, 

and it is also one of our cleanest sources of power, providing about 60 percent of our 

carbon-free electricity. 

Speaking directly to low or zero emissions technologies, several DOE early stage 

research and development investments support low or zero emissions technologies. The 

FY 2019 Budget Request provides $757 million for the Office of Nuclear Energy to 

continue innovating new and improved nuclear energy technologies. Furthermore, the 

Energy Efficiency and Renewable Energy budget funds $696 million to maintain 

America's leadership in transformative science and emerging energy technologies in 

sustainable transportation, renewable power, and energy efficiency. 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May 9, 2018 

Q7. In your FY 2019 budget you request you proposed eliminating the Loan Programs Office, 

which has a strong performance record and has actually returned well over a billion 

dollars to the U.S. Treasury so far. Eliminating LPO would actually add to the national 

debt, not save money. Additionally, it would put the U.S. at a competitive disadvantage 

in developing and commercializing innovative energy technologies. 

Q7a. Given the Administration's recent conditional commitment of an additional loan 

guarantee to the Vogtle nuclear plants that are under construction in Georgia, are you 

reconsidering the value of maintaining the capabilities that LPO provides in supporting 

our nation's energy security after all? 

A7. The Budget proposes to eliminate the Title XVII Innovative Technology Loan Guarantee 

Program, the Advanced Technology Vehicle Manufacturing (ATVM) Loan Program, and 

the Tribal Energy Loan Guarantee Program, because the private sector is better 

positioned to finance the deployment of commercially viable energy and advanced 

vehicle manufacturing projects. 

The Federal role in supporting advanced technologies is strongest in the early stages of 

research and development. The Government should not be in the business of picking 

which technologies "win" the commercialization race and displacing private sector 

investment opportunities. Instead, the Government should recognize the private sector's 

primary role in taking risks to finance projects in the energy and automobile 

manufacturing sectors. 

Q8. The FY 2019 budget proposal included major cuts to FE's research activities, including 

an 80% cut to carbon capture, an 87% cut to carbon storage, and an 89% cut to natural 

gas technologies. These cuts were rationalized with a simple line about how industry can 

better commercialize these technologies and methods. Given how critically important 

these technologies are to ensuring a long-term future for coal in particular, I am trying to 

better understand how this proposal is consistent with the Administration's rhetoric 

regarding its support for developing and utilizing these resources. 

Q8a. How important is carbon capture technology to the future viability of coal and other fossil 

fuels in a carbon constrained world? Or do you believe we should not worry about C02 

emissions from power plants? 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May 9, 2018 

A8a. DOE is committed to supporting research and development for transformational 

technologies that reduce the capital and energy penalty so that carbon capture with 

enhanced oil recovery is economically viable for coal-fired power plants. The reduction 

in the FY 2019 request reflects DOE's successes in demonstrating first-generation 

capture technologies, which we now deem mature enough for industry to further adapt or 

deploy in a commercial environment. DOE's role will be to support early-stage research 

in the discovery of novel materials and processes that can be accomplished in the 

laboratory and with advanced computing through our network of universities and national 

laboratories. DOE will continue to seek partnerships with industry to scale these novel 

technologies for commercial deployment. 

Both the capture and storage program will focus on early-stage R&D, which is lower cost 

but higher risk. The Capture program will focus on transformational technologies for 

C02 separation that will enable adoption of C02 utilization opportunities. The Storage 

program will focus on early-stage R&D, focused on developing advanced monitoring and 

simulation tools, ensuring well bore integrity, addressing risks from induced seismicity, 

and characterizing offshore resources. The FY 20 19 budget request also supports carbon 

utilization that will focus on early-stage R&D on technologies that will convert 

C02/carbon waste streams from coal into valuable products. 

Q9. The Office of Fossil Energy (FE) does vital research to mitigate the environmental 

impacts offossil fuel utilization. But the FY 2019 budget is inconsistent with the 

importance of the research. 

Q9a. How do you expect to carry out a successful fossil energy research portfolio by only 

funding "early-stage" research, especially if the private sector is not able or willing to 

support what you call applied or "late-stage" research that will enable fossil energy 

resources to be technologically viable even when future environmental regulations are 

eventually enacted? 

A9a. We have worked diligently throughout the budget formulation process to ensure that the 

President's FY 2019 Budget works within budget constraints to allow us to be good 

stewards of taxpayer resources while also enabling DOE's critical missions of promoting 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May9,2018 

America's energy security; spurring innovation; reducing regulatory burden; restoring the 

nuclear security enterprise and enhancing national security through the military 

application of nuclear science; and addressing the obligation of legacy management and 

nuclear waste. 

To address these challenges· and improve the lives and security of all Americans, DOE's 

world-leading science and technology enterprise engages in cutting-edge research that 

expands the frontiers of scientific knowledge and generates new technologies. We, 

through our national laboratories, must continue to support the world's best enterprise of 

scientists and engineers who create innovations to drive American prosperity, security 

and competitiveness for the next generation. 

DOE will continue to play a leading role in early-stage, fundamental energy research and 

innovation. This early-stage research is critical to advancing American energy 

innovation, and is often used by our private sector in competing across the globe. 

Continuing American scientific and technological leadership is important not only for 

improving our understanding of the world, but also for the economic growth of our 

nation. The President's Budget focuses DOE's energy and science programs on earlystage research and development with a renewed focus on cutting-edge innovation and 

transitioning those breakthroughs to the private marketplace. 

9b. How can you rationalize the numerous cuts across FE's portfolio in the FY 2019 budget 

by saying industry is better suited to carry this work out, but also include a request for 

government funded research into emerging shale plays that is supported in large part by 

the oil and gas industry? 

A9b. Fossil Energy's Unconventional Oil and Gas research program provides information, 

data, and analysis that can be advanced by industry to enable sustainable and responsible 

development of domestic unconventional energy resources. Over the past decade, 

Unconventional Oil and Gas production from shale plays has grown exponentially, 

representing a fast-growing component ofthe U.S. energy portfolio. However, there 

remain key technical and scientific questions that require research that is best addressed 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May 9, 2018 

through targeted federal investment. The FY 2019 budget request targets both lab-based 

and field work on specific topics that are early-stage and not able to yet attract industry 

investment. These include research on new techniques to increase recovery factors, better 

understand flow mechanics, basin-specific subsurface engineering, and produce water 

treatment technologies. 

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Questions for the Record Responses from Secretary of Energy Rick Perry 

An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May9, 2018 

QUESTIONS FROM RANKING MEMBER LIPINSKI 

Ql. I'm concerned about the effect of the FY19 budget request on technology transfer and 

commercialization activities from our national labs. As you know, one of the White 

House's Cross-Agency Priority goals is improving the transfer of federally-funded 

technologies from lab to market, something the national labs do well. Yet the FYI9 

request proposes significant cuts to the Office Energy Efficiency and Renewable Energy, 

which funds technology transfer programs such as the Lab-Embedded Entrepreneurship 

Programs at Argonne, Berkeley, and Oak Ridge, and other Tech-to-Market programs. Can 

you please explain how cuts to the budgets of highly-successful technology transfer and 

commercialization programs are consistent with the goal of improving technology 

transfer? 

A 1. The Administration's budget reflects an increased reliance on the private sector to fund 

later-stage research, development, and commercialization of energy technologies by 

fostering collaboration between National Laboratories, universities and companies. 

Through careful prioritization and ensuring that funding goes to the most promising 

research, DOE will continue to be a world-leading science and technology enterprise that 

generates the innovations that fulfill our missions ensuring the Nation's security and 

prosperity. In tandem, the Department is working to enhance bridge programs and 

partnership mechanisms that facilitate the transfer of DOE-funded technology to the 

private sector. Through the Office of Technology Transitions (OTT), for which the 

Department has requested a $1.6 million funding increase in FY 2019, the Department 

continues to support an array of programs that support the development of public-private 

partnerships. 

Importantly, programs successfully launched in DOE's Office of Energy Efficiency and 

Renewable Energy (EERE) under the Technology-to-Market program such as the Energy 

I-Corps program are being transferred to OTT. Energy J-Corps trains lab researchers in 

the basics of customer acquisition and tailoring technology to meet market need and 

thereby maximize technology transfer opportunities. Successful technology transfer and 

commercialization efforts under the Technology-to-Market program are being continued 

under OTT. 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May9, 2018 

Among the OTT programs is the Technology Commercialization Fund (TCF), which is 

authorized in section 1001 ofthe Energy Policy Act of2005. It leverages the R&D 

funding in the applied energy programs to mature promising energy technologies with the 

potential for high impact. It leverages funding for the Department's applied energy 

research, and development budget for each fiscal year from the Office of Electricity, 

EERE, Office of Fossil Energy, and Office ofNuclear Energy with matching funds from 

private sources to achieve two goals: First, it is designed to increase the number of 

energy technologies developed at DOE's national labs that graduate to commercial 

development and achieve commercial impact. Second, the TCF enhances the 

Department's technology transitions system with a forward-looking and competitive 

approach to lab-industry partnerships. 

Other successful programs supported through OTT include those transferring from their 

successful launch in EERE Technology-to-Market, such as Energy !-Corps, which trains 

Lab researchers in the basics of customer acquisition and tailoring technology to meet 

market need. 

OTT also oversees the Energy Investor Center, which conducts outreach to the private 

sector to increase awareness of DOE's technical expertise and portfolio of technologies 

and facilitates private sector collaboration and partnerships with the National Labs. 

The Advanced Manufacturing Office's (AMO's) Lab-Embedded Entrepreneurship 

Programs employ a high-impact, lab-based entrepreneurial R&D model to address the 

challenge of hardware-based technology development by leveraging the U.S. national 

laboratories in a new way. These programs embed top technical talent with new ideas 

within the national labs, allowing entrepreneurial researchers to address fundamental 

science and engineering challenges while also receiving business mentorship and 

entrepreneurial training. This combined focus on both early-stage R&D and 

entrepreneurial development enables researchers to ready breakthrough ideas for 

adoption by the private sector. The Department has requested $6.5 million in FY 2019 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May 9, 2018 

funding for support of new projects led by early-career post-doctoral researchers at the 

National Laboratories that will support AMO's Lab-Embedded Entrepreneurship 

Programs at Lawrence-Berkeley, Argonne, and Oak Ridge national laboratories. 

Q2. I wanted to ask you to explain the reasoning behind the flat funding proposed for the 

Scientific User Facility Operations, which covers facilities such as the Advanced Photon 

Source at Argonne and the Stanford Synchrotron Radiation Light Source. These facilities 

have been flat funded for a number of years now, meaning that in real terms, their 

purchasing power is slowly decreasing. The FY19 budget request states that these 

facilities are funded at 95% of optimum. Given that these research facilities are not only 

critical to our global scientific leadership but also serve as magnets for science-driven 

companies to locate nearby, I cannot endorse intentionally under-funding them. The 

result could be reductions in available user tinie or shutdown of some analytical 

interfaces, reducing the amount of science that can be done. At a time when we are 

investing in major capital upgrades to several user facilities, including the Advanced 

Photon Source, why are we under-funding operations? 

A2. The FY 2019 President's Request for the Basic Energy Sciences (BES) program supports 

a balanced portfolio of (I) forefront research in condensed matter and materials sciences, 

chemical sciences, geosciences, and biosciences, (2) the upgrade and construction of 

world-leading scientific user facilities, and (3) the operation of these facilities. Each facet 

of this portfolio is essential to maintaining international competitiveness in new materials 

discovery and chemical processes, which are the foundation for many applications of 

potential societal benefit. Within available funding, BES can successfully deliver our 

highest priority investments in facility upgrades while continuing to operate the suite of 

scientific user facilities and serve the program's mission needs. 

Q3. I was pleased to see the emphasis on battery technologies and grid modernization in the 

budget request, including $90 million for a new "Beyond Batteries" initiative. Given that 

DOE already has a number of battery technology research and development programs, 

including the Joint Center for Energy Storage Research at Argonne National Lab, I 

wanted to ask how the new initiative will be integrated with existing programs for a 

cross-cutting approach. 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May 9, 2018 

A3. As part of the Administration's efforts to increase the reliability and resilience of our 

energy systems, Beyond Batteries takes a broad, holistic view of energy storage as part of 

a set of capabilities that enable temporal flexibility in the conversion of energy resources 

to useful energy services. Batteries, or electrochemical energy storage technologies, are 

an important technology solution to continue to advance, but there are other options to 

achieve the same energy services batteries can provide. Beyond Batteries looks at the 

functions that grid-scale batteries can provide, then focuses on other ways to provide 

those functions. In this way, it is inspired by the success of previous investments in gridscale batteries, and builds off of previous work in both the Office of Electricity and the 

Office of Energy Efficiency and Renewable Energy to effectively mimic many of the 

benefits of grid-scale batteries. 

Beyond Batteries will incorporate the progress made from previous work in each of the 

individual programs, building off of successful Grid Modernization Initiative projects 

that cut across DOE offices. For example, controllable loads work in the FY 2019 request 

concentrates on technologies that enal:ile behind-the-meter devices to provide grid 

services, including power electronics that incorporate storage controls. This work builds 

on previous investments in systems integration in the Solar program and in power 

electronics in the Advanced Manufacturing program to develop new technologies 

leveraging scalable domestic manufacturing capabilities. 

The FY 2019 request also includes work to research, validate, and improve the ability of 

large, bulk power resources like geothermal and hydropower to operate flexibly over long 

periods of time and provide essential reliability services. This includes field testing to 

validate the ability of these resources to respond quickly to electrical demand fluctuations 

and other grid disturbances. This work builds off of previous investments in the 

Geothermal program focused on the ramping ability of geothermal plants, as well as work 

in the Water program on valuation of hydropower and pumped storage. 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May 9, 2018 

Finally, the FY 2019 request for Beyond Batteries includes work centered on reliable 

hybrid energy systems to include technologies and approaches for integrating electric 

vehicles, hydrogen fuels cells, distributed wind and solar, and building loads. 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May9, 2018 

QUESTIONS FROM REPRESENTATIVE ROSEN 

Ql. For decades, Nevadans have been fighting against our state becoming a dumping ground 

for the rest of the nation's nuclear waste ... citing an array of serious and unresolved 

public safety and environmental concerns. Yucca Mountain threatens the health and 

safety of Nevadans ... and the millions of Americans who live in the 44 states and 329 

Congressional Districts along the proposed transportation routes. Secretary Perry, you 

and your Deputy Secretary, Dan Brouillette have both stressed the importance of science 

in evaluating where we should store our nation's nuclear waste. However, your budget 

request includes $120 million to bring high-level nuclear waste to Nevada. 

Q 1 a. What analysis do you believe is so scientifically justified for your budget to continue to 

push for Yucca Mountain to be the repository site and to move forward with therelicensing process at Yucca? 

Ala. The Department's License Application (LA), submitted to the Nuclear Regulatory 

Commission (NRC) in 2008, was supported by thousands of underlying technical reports 

and analyses that were conducted by the nation's national laboratories, which explain 

how the Yucca Mountain repository could be safely constructed and operated. The NRC 

conducted an independent review of DOE's LA, which confirmed the safety of the Yucca 

Mountain repository. The conclusions of the NRC staffs independent technical review 

are documented in a multivolume Safety Evaluation Report for a Geologic Repository at 

Yucca Mountain. 

Q 1 b. Has the Administration performed any further analysis of its own to support this budget 

request? 

Alb. The Administration has not conducted further analysis of Yucca Mountain and stands 

behind the work submitted to the NRC in the LA. The LA was prepared with support 

from the national laboratories and was independently validated by the NRC. The Budget 

Request is sufficient to restart licensing activities. 

Q2. In 2015, based on recommendations from the Blue Ribbon Commission on America's 

Nuclear Future ... your predecessor Secretary Moniz announced that DOE would pursue a 

consent-based approach to site nuclear waste facilities. Unfortunately, this 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May9,2018 

Administration has completely ignored this precedent and is trying to revive Yucca 

Mountain ... even though the majority of Nevadans oppose the site. 

Q2a. Has the Department of Energy, under this current Administration, considered a consentbased approach to storing nuclear waste? 

A2a. The current Administration is complying with the Nuclear Waste Policy Act (NWPA), as 

amended, which established the Federal responsibility and a definite Federal policy for 

disposal of high-level radioactive waste and spent fuel. The NWPA provides for State, 

tribal and public participation in the planning and development of a repository. The FY 

2019 Budget Request continues the NRC licensing proceeding for a repository at Yucca 

Mountain. 

Q3. Part of DOE's role includes advancing U.S. national security and economic growth. 

Some proponents of the Yucca Mountain project argue that it will create jobs and help 

the local economy, which is why I recently introduced the "Jobs, Not Waste Act" a 

proactive and innovative proposal to tum Yucca Mountain into something useful, a 

project that would create jobs without threatening the health and safety of Nevadans and 

other Americans across the country. 

Q3a. Will the Department consider how developing Yucca Mountain could hurt our local 

economy? 

A3a. The Repository Supplemental Environmental Impact Statement (SEIS), issued by DOE in 

2008, evaluated the potential socioeconomic impacts of the proposed repository and the 

associated transportation of spent nuclear fuel and high-level radioactive waste. 

The SE!S evaluated potential changes to employment, population, housing, public 

services, and three economic measures (real personal disposable income, spending by 

state and local governments, and gross regional products). In general, the project would 

result in increases to: employment, Gross Regional Product, real disposable personal 

income, and state and local government spending. The complete evaluation of the 

potential socioeconomic impacts including the potential for perceived risks are described 

in greater detail in the SEIS. 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May 9, 2018 

Q3b. Would the Department be open to alternative uses of the site, such as those outlined in 

my bill? 

A3b. The LA described ongoing, existing uses of the Nevada National Security Site and the 

surrounding area. Other uses may be permissible, as long as they do not interfere with the 

safety and mission of the repository. 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May 9, 2018 

QUESTIONS FROM REPRESENTATIVE FOSTER 

Ql. The Advanced Photon Source at Argonne National Laboratory is a crucial technical 

resource for scientists and engineers in universities and in industry. This user facility 

serves thousands of projects each year. The upgrade which is currently underway will 

allow researchers to explore molecular structures for drug discovery and identify 

advanced materials for energy and national security. 

In your testimony to the committee, you noted that the Budget Request includes funds to 

support the upgrade to the Advanced Photon Source. I've been pleased by the show of 

support so far for the upgrade to Argonne's Advanced Photon Source. 

However, to make the best use of this critical upgrade, we also need to ensure that the 

APS has sufficient operations funding. So I was concerned to see that the Fiscal Year 

2019 President's Budget Request notes that the APS and other light sources "will 

continue operations and are supported at 95% of optimum." 

Qla. Secretary Perry, it doesn't make sense to me that we would intentionally fund something 

at sup-optimal levels. What is the impact of sub-optimal funding on APS operations? 

AI. The Fiscal Year (FY) 2019 President's Request for the Basic Energy Sciences (BES) 

program supports a balanced portfolio of(!) forefront research in condensed matter and 

materials sciences, chemical sciences, geosciences, and biosciences, (2) the upgrade and 

construction of world-leading scientific user facilities, and (3) the operation of these 

facilities. Each facet of this portfolio is essential to maintaining international 

competitiveness in new materials discovery and chemical processes, which are the 

foundation for many applications of potential societal benefit. Within available funding, 

BES can continue to operate the suite of scientific user facilities to meet the needs of our 

user community while successfully delivering our highest priority investments in facility 

upgrades and serving the program's mission needs. Maintenance, equipment upgrades, 

and procurement activities will be deferred to minimize the impact on operations. 

Q I b. Can you comment on the efforts at the Office of Science to support upgrades for facilities 

such as Argonne's Advanced Photon Source, and the importance of continuing these 

kinds of investments? 

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An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May 9, 2018 

A 1 b. The BES strategy for light sources is informed by three recent reports by the BES 

Advisory Committee (BESAC): Report on Basic Energy Sciences Facilities 

Prioritization, Feb. 2013; Report of the BESAC Subcommittee on Future X-ray Light 

Sources, July 2!)13; and Report on Facility Upgrades, June 2016. BES plans to provide 

world leading x-ray scattering facilities based upon the complementary technologies of 

storage rings and free electron lasers (FEL) across the full spectrum from soft to hard xrays. The storage ring-based facilities (the Advanced Photon Source at Argonne National 

Laboratory and, in future plans, the Advanced Light Source at Lawrence Berkeley 

National Laboratory) are to be upgraded to incorporate new multi-bend achroma! (MBA) 

lattices to increase average brightness by I 00-1 OOOx. The Linac Coherent Light Source 

(LCLS) at SLAC National Accelerator Laboratory is being upgraded to provide new high 

average brightness capabilities (LCLS-ll) in addition to the extreme peak brightness 

performance. The upgrade is made possible by the use of superconducting linear 

accelerator technology that will increase the repetition rate from 120Hz to I MHz. These 

upgrades are essential to maintaining international competitiveness in light sources. 

Q2. As you know, I recently worked with Congressman Steve Knight to introduce the Better 

Energy Storage Technology (BEST) Act to support the development of energy storage 

technology that is commercially viable and capable of supporting the electrical grid. I 

appreciate the valuable feedback that National Lab staff were able to provide on the 

technical aspects of this bill. 

This legislation would initiate research that is complementary to the Department of 

Energy's current efforts in energy storage, including the work conducted at Argonne 

National Lab through the Joint Center for Energy Storage Research (JCESR). 

The Fiscal Year 2019 President's Budget Request includes support for a "Beyond 

Batteries'' initiative within the Office of Energy and Efficiency and Renewable Energy 

(EERE). Beyond Batteries is described in a few lines and, although it is a cross-cut 

initiative across multiple EERE program offices, I have not seen a detailed plan for 

coordination of efforts and how they will complement existing initiatives. 

Q2a. Secretary Perry, can you provide this Committee with an explanation of the holistic 

overview of and detailed plan for the Beyond Batteries initiative? 

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Questions for the Record Responses from Secretary of Energy Rick Perry 

An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May9,2018 

A2. As part of the Administration's efforts to increase the reliability and resilience of our 

energy systems, Beyond Batteries takes a broad, holistic view of energy storage as part of 

a set of capabilities that enable temporal flexibility in the conversion of energy resources 

to useful energy services. Batteries, or electrochemical energy storage technologies, are 

an important technology solution to continue to advance, but there are other options to 

achieve the same energy services batteries can provide. Beyond Batteries looks at the 

functions that grid-scale batteries can provide, then focuses on other ways to provide 

those functions. In this way, it is inspired by the success of previous investments in gridscale batteries, and builds off of previous work in both the Office of Electricity and the 

Office of Energy Efficiency and Renewable Energy to effectively mimic many of the 

benefits of grid-scale batteries. 

Beyond Batteries will incorporate the progress made from previous work in each of the 

individual programs, building off of successful Grid Modernization Initiative projects 

that cut across DOE offices. For example, controllable loads work in the FY 2019 request 

concentrates on technologies that enable behind-the-meter devices to provide grid 

services, including power electronics that incorporate storage controls. This work builds 

on previous investments in systems integration in the Solar program and in power 

electronics in the Advanced Manufacturing program to develop new technologies 

leveraging scalable domestic manufacturing capabilities. 

The FY 2019 request also includes work to research, validate, and improve the ability of 

large, bulk power resources like geothermal and hydropower to operate flexibly over long 

periods of time and provide essential reliability services. This includes field testing to 

validate the ability of these resources to respond quickly to electrical demand fluctuations 

and other grid disturbances. This work builds off of previous investments in the 

Geothermal program focused on the ramping ability of geothermal plants, as well as work 

in the Water program on valuation of hydropower and pumped storage. 

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COMMITTEE ON SCIENCE, SPACE, & TECHNOLOGY 

Questions for the Record Responses from Secretary of Energy Rick Perry 

An Overview of the Budget Proposal for the Department of Energy for Fiscal Year 2019 

May9,2018 

Finally, the FY 2019 request for Beyond Batteries includes work centered on reliable 

hybrid energy systems to include technologies and approaches for integrating electric 

vehicles, hydrogen fuels cells, distributed wind and solar, and building loads. 

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DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST CENTURY REFORM PLAN AND

REORGANIZATION RECOMMENDATIONS
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INTRODUCTION 

REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 
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Visit https://www.performance.gov/GovReform/ to view the entire report. 

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icant changes will require legis!ative action 

DEUVER!NG GOVERNMENT SOLUTIONS IN THE 21" CENTURY