# Energy and Water Development: FY2013 Appropriations > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3AR42498 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** April 25, 2013 - **Citation:** R42498 ## Text Energy and Water Development: FY2013 Appropriations (name redacted), Coordinator Specialist in Energy Policy April 25, 2013 Congressional Research Service 7-.... www.crs.gov R42498 CRS Report for Congress Prepared for Members and Committees of Congress Energy and Water Development: FY2013 Appropriations Summary The Energy and Water Development appropriations bill provides funding for civil works projects of the Army Corps of Engineers (Corps), for the Department of the Interior’s Bureau of Reclamation (Reclamation) and the Department of Energy (DOE), and for a number of independent agencies. President Obama’s FY2013 budget request for Energy and Water Development was released in February 2012. For FY2013 the level of overall spending has been a major issue. The Budget Control Act of 2011 (BCA, P.L. 112-25) contained an overall discretionary spending cap for FY2013 of $1.047 trillion. On March 29, 2012, the House passed a budget resolution (H.Con.Res. 112) that caps spending at a lower level, $1.028 trillion. The Senate has not passed a budget resolution, but on April 19, 2012, the Senate Appropriations Committee allotted subcommittee funding levels that totaled the $1.047 trillion cap in the BCA. The difference between overall spending caps is reflected in differences in spending proposals for Energy and Water Development programs. The Administration’s request for FY2013 was $33.684 billion. On April 25, the House Appropriations Committee reported out H.R. 5325 (H.Rept. 112-462), with a total of $32.156 billion. The Senate Appropriations Committee reported out S. 2465 (S.Rept. 112-164) on April 26, funding Energy and Water Development programs at $33.432 billion. On June 6 the House passed H.R. 5325 by a vote of 255-165, with some amendments. On September 28, 2012, President Obama signed into law the Continuing Appropriations Resolution, 2013 (P.L. 112-175). The act continues appropriations until March 27, 2013, for Energy and Water Development programs at 0.612% above the FY2012-enacted levels, with several exceptions. On March 26, 2013, the President signed H.R. 933, the FY2013 Defense and Military Construction/VA, Full Year Continuing Resolution (P.L. 113-6). The act funds Energy and Water Development accounts at the FY2012 enacted level for the rest of FY2013, with some exceptions, and subject to the sequestration requirements of the Budget Control Act which went into effect March 1, 2013. In addition, issues specific to Energy and Water Development programs included • the distribution of appropriations for Corps (Title I) and Reclamation (Title II) projects that have historically received congressional appropriations above Administration requests; • alternatives to the proposed national nuclear waste repository at Yucca Mountain, Nevada, which the Administration has abandoned (Title III: Nuclear Waste Disposal); and • proposed FY2013 spending levels for Energy Efficiency and Renewable Energy (EERE) programs (Title III) that are 25% higher in the Administration’s request than the amount appropriated for FY2012. Congressional Research Service Energy and Water Development: FY2013 Appropriations Contents Most Recent Developments ............................................................................................................. 1 Status................................................................................................................................................ 1 Overview.......................................................................................................................................... 2 The Budget Control Act and Energy and Water Development Appropriations ........................ 2 Continuing Resolution Exceptions ............................................................................................ 3 Title I: Army Corps of Engineers .................................................................................................... 4 Earmarks and the Corps of Engineers ....................................................................................... 5 Key Policy Issues—Corps of Engineers.................................................................................... 6 Project Backlog ................................................................................................................... 6 Navigation Trust Funds ....................................................................................................... 7 Ecosystem Restoration Projects .......................................................................................... 9 Continuing Authorities Program ......................................................................................... 9 Title II: Department of the Interior .................................................................................................. 9 Central Utah Project and Bureau of Reclamation...................................................................... 9 Key Policy Issues—Bureau of Reclamation............................................................................ 11 Background ....................................................................................................................... 11 Central Valley Project (CVP) Operations ......................................................................... 11 San Joaquin River Restoration Fund ................................................................................. 12 Klamath Basin Restoration Agreement ............................................................................. 13 WaterSMART Program..................................................................................................... 13 Title III: Department of Energy ..................................................................................................... 14 Key Policy Issues—Department of Energy ............................................................................. 16 Energy Efficiency and Renewable Energy (EERE) .......................................................... 16 Electricity Delivery and Energy Reliability (EDER) Program ......................................... 22 Nuclear Energy.................................................................................................................. 22 Fossil Energy Research and Development ........................................................................ 27 Strategic Petroleum Reserve ............................................................................................. 28 Science .............................................................................................................................. 29 ARPA-E ............................................................................................................................ 32 Nuclear Waste Disposal .................................................................................................... 32 Loan Guarantees and Direct Loans ................................................................................... 34 Nuclear Weapons Stockpile Stewardship.......................................................................... 37 Nonproliferation and National Security Programs ............................................................ 49 Cleanup of Former Nuclear Weapons Production Facilities and Civilian Nuclear Energy Research Facilities ............................................................................................. 51 Power Marketing Administrations .................................................................................... 61 Title IV: Independent Agencies ..................................................................................................... 62 Key Policy Issues—Independent Agencies ............................................................................. 63 Nuclear Regulatory Commission ...................................................................................... 63 Tables Table 1. Status of Energy and Water Development Appropriations, FY2013................................. 1 Congressional Research Service Energy and Water Development: FY2013 Appropriations Table 2. Energy and Water Development Appropriations, FY2006 to FY2013 ............................. 3 Table 3. Energy and Water Development Appropriations Summary .............................................. 4 Table 4. Energy and Water Development Appropriations Title I: Army Corps of Engineers ...................................................................................................................................... 6 Table 5. Energy and Water Development Appropriations Title II: Central Utah Project Completion Account ................................................................................................................... 10 Table 6. Energy and Water Development Appropriations Title II: Bureau of Reclamation ......... 10 Table 7. Reclamation WaterSMART Program .............................................................................. 14 Table 8. Energy and Water Development Appropriations Title III: Department of Energy ......... 14 Table 9. Energy Efficiency and Renewable Energy Programs ...................................................... 17 Table 10. Fossil Energy Research and Development Program (FER&D) ..................................... 28 Table 11. Science ........................................................................................................................... 30 Table 12. Funding for Weapons Activities .................................................................................... 38 Table 13. DOE Defense Nuclear Nonproliferation Programs ....................................................... 49 Table 14. Appropriations for the Office of Environmental Management...................................... 53 Table 15. Energy and Water Development Appropriations Title IV: Independent Agencies ..................................................................................................................................... 63 Contacts Author Contact Information........................................................................................................... 65 Key Policy Staff ............................................................................................................................. 65 Congressional Research Service Energy and Water Development: FY2013 Appropriations Most Recent Developments President Obama’s FY2013 budget request for Energy and Water Development was released in February 2012. The request totaled $33.7 billion, compared to the FY2012 appropriation of $32.7 billion (plus $1.7 billion for disaster relief). On April 25, 2012, the House Appropriations Committee reported out H.R. 5325 (H.Rept. 112462), with a total of $32.2 billion. The Senate Appropriations Committee reported out S. 2465 (S.Rept. 112-164) on April 26, funding Energy and Water Development programs at $33.4 billion. The House passed H.R. 5325 with some amendments on June 6. The Continuing Appropriations Resolution, 2013 (P.L. 112-175), signed into law September 28, continues appropriations until March 27, 2013, for Energy and Water Development programs at 0.612% above the FY2012-enacted levels, with two exceptions: DOE’s Nuclear Weapons Activities program is funded at an annual rate of $7.577 billion, the amount requested for FY2013, instead of the FY2012 rate of $7.214 billion, and the Nuclear Nonproliferation program was increased by $100 million over the FY2012 level of $2.296 billion to fund domestic uranium enrichment R&D. (See Nuclear Weapons Stockpile Stewardship and Nonproliferation and National Security Programs, below.) On March 6, 2013, the House passed H.R. 933, the FY2013 Defense and Military Construction/VA, Full Year Continuing Resolution. The Senate approved an amended version of the bill on March 20, 2013, and the House agreed to the Senate amendment to H.R. 933 the next day. The bill was signed into law on March 26, 2013 (P.L. 113-6). The act funds Energy and Water Development accounts at the FY2012 enacted level for the rest of FY2013, with some exceptions, and subject to the sequestration requirements of the Budget Control Act which went into effect March 1, 2013. Status Table 1 indicates the status of the FY2013 funding legislation. Cells will be filled in as the appropriations cycle progresses. Table 1. Status of Energy and Water Development Appropriations, FY2013 Subcommittee Markup House Senate 4/18/12 4/24/12 Final Approval House Report House Passage Senate Report H.Rept. 112-462 6/6/12 S.Rept. 112-164 Congressional Research Service Senate Passage Conf. Report House Senate Public Law P.L. 113-6 1 Energy and Water Development: FY2013 Appropriations Overview The Energy and Water Development bill includes funding for civil works projects of the U.S. Army Corps of Engineers (Corps), the Department of the Interior’s Central Utah Project (CUP) and Bureau of Reclamation (Reclamation), the Department of Energy (DOE), and a number of independent agencies, including the Nuclear Regulatory Commission (NRC) and the Appalachian Regional Commission (ARC). The Budget Control Act and Energy and Water Development Appropriations FY2013 discretionary appropriations were considered in the context of the Budget Control Act of 2011 (BCA, P.L. 112-25), which established discretionary spending limits for FY2012-FY2021. The BCA also tasked a Joint Select Committee on Deficit Reduction to develop a federal deficit reduction plan for Congress and the President to enact by January 15, 2012. Because deficit reduction legislation was not enacted by that date, an automatic spending reduction process established by the BCA was triggered; this process consists of a combination of sequestration and lower discretionary spending caps, initially scheduled to begin on January 2, 2013. The “joint committee” sequestration process for FY2013 requires the Office of Management and Budget (OMB) to implement across-the-board spending cuts at the account and program level to achieve equal budget reductions from both defense and nondefense funding at a percentage to be determined, under terms specified in the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, Title II of P.L. 99-177, 2 U.S.C. 900-922), as amended by the BCA. For further information on the Budget Control Act, see CRS Report R41965, The Budget Control Act of 2011, by (name redacted), (name redacted), and (name redacted). The American Taxpayer Relief Act (ATRA, P.L. 112-240), enacted on January 2, 2013, made a number of significant changes to the procedures in the BCA that will take place during FY2013. First, the date for the joint committee sequester to be implemented was delayed for two months, until March 1, 2013. Second, the dollar amount of the joint committee sequester was reduced by $24 billion. Third, the statutory caps on discretionary spending for FY2013 (and FY2014) were lowered. For further information on the changes to BCA procedures made by ATRA, see CRS Report R42949, The American Taxpayer Relief Act of 2012: Modifications to the Budget Enforcement Procedures in the Budget Control Act, by (name redacted) Pursuant to the BCA, as amended by ATRA, President Obama ordered that the joint committee sequester be implemented on March 1, 2013.1 The accompanying OMB report indicated a dollar amount of budget authority to be canceled to each account containing non-exempt funds.2 The sequester will ultimately be applied at the program, project, and activity (PPA) level within each account.3 Because the sequester was implemented at the time that a temporary continuing 1 White House, President Obama, Sequestration Order for Fiscal Year 2013 Pursuant to Section 251A of the Balanced Budget and Emergency Deficit Control Act, As Amended, March 1, 2013, available at http://www.whitehouse.gov/ sites/default/files/2013sequestration-order-rel.pdf. 2 Executive Office of the President, Office of Management and Budget, OMB Report to the Congress on the Joint Committee Sequestration for Fiscal Year 2013, March 1, 2013, available at http://www.whitehouse.gov/sites/default/ files/omb/assets/legislative_reports/fy13ombjcsequestrationreport.pdf. 3 Ibid., pp. 11, 13. Congressional Research Service 2 Energy and Water Development: FY2013 Appropriations resolution was in force, the reductions were calculated on an annualized basis and will be apportioned throughout the remainder of the fiscal year.4 Although full year FY2013 funding has been enacted, the effect of these reductions on the budgetary resources that will ultimately be available to an agency at either the account or PPA level remain unclear until further guidance is provided by OMB as to how these reductions should be applied. Continuing Resolution Exceptions P.L. 113-6 continues funding for Energy and Water Development programs at the FY2012 level (minus sequestrations) for all accounts except the following: • In Title I, the Corps of Engineers Construction budget is reduced by $20 million from the FY2012 level of $1.617 billion • In Title II, the Central Utah Project funding is set at $21.0 million instead of the FY2012 level of $28.7 million • In Title III, the Energy Efficiency and Renewable Energy budget is $1.814 billion, rather than the FY2012 level of $1.810 billion • In Title III, the Nuclear Energy budget is $759.0 million, rather than $765.4 million • In Title III, the Science budget is $4.8760 billion, compared to the FY2012 level of $4.8736 billion • In Title III, Advanced Research Projects Agency – Energy funding is $265 million, rather than the FY2012 level of $275 million • In Title III, the National Nuclear Security Administration’s Weapons program is funded at $7.5573 billion, rather than the FY2012 level of $7.2141 billion • In Title III, the Defense Nuclear Nonproliferation program is increased by $110 million over the FY2012 level of $2.2959 billion, to fund domestic uranium enrichment R&D. Table 2 includes budget totals for energy and water development appropriations enacted for FY2006 to FY2013. Table 2. Energy and Water Development Appropriations, FY2006 to FY2013 (budget authority in billions of current dollars) FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013a 36.7b 29.4 30.9 40.5c 33.4 31.7 34.4d 34.0 Source: Compiled by CRS. Note: Figures represent current dollars, exclude permanent budget authorities, and reflect rescissions. 4 Ibid, p. 5. For general information on continuing resolutions, see CRS Report R42647, Continuing Resolutions: Overview of Components and Recent Practices, by (name redacted). Congressional Research Service 3 Energy and Water Development: FY2013 Appropriations a. Requested budget authority. b. Includes $6.6 billion in emergency funding for the Corps of Engineers. c. Includes $7.5 billion for Advanced Technology Vehicle Manufacturing Loan Program. d. Includes $1.7 billion in emergency funding for the Corps of Engineers. Table 3 lists totals for each of the bill’s four titles. Table 3. Energy and Water Development Appropriations Summary ($ millions) FY2012 Approp. FY2013 Request House Senate Title I: Corps of Engineers 6,726.0a 4,731.0 4,824.2 5,007.0 Title II: CUP & Reclamation 1,076.4 1,034.0 987.5 1,049.0 Title III: Department of Energy 26,748.1 27,667.7 26,048.4 27,127.6 Title IV: Independent Agencies 254.5 252.2 271.3 248.9 34,382.0a 33,684.0 32,131.4 33,432.5 Title E&W Total P.L. 113-6 Source: FY2013 budget request, H.Rept. 112-462, H.R. 5325 as passed, S.Rept. 112-164. a. Includes $1.724 billion in supplemental funding for the Corps of Engineers under the FY2012 Disaster Relief Appropriations Act (P.L. 112-77). Tables 4 through 15 provide budget details for Title I (Corps of Engineers), Title II (Department of the Interior), Title III (Department of Energy), and Title IV (independent agencies) for FY2012-FY2013. Accompanying these tables is a discussion of the key issues involved in the major programs in the four titles. Title I: Army Corps of Engineers5 The Energy and Water Development bill provides funding for the civil program of the U.S. Army Corps of Engineers, an agency in the Department of Defense with both military and civilian responsibilities. Under its civil works program, the Corps plans, builds, operates, and maintains a wide range of water resources facilities. The Corps attracts congressional attention because its projects can have significant local and regional economic benefits and environmental effects, in addition to their water resource development purposes. A number of recent changes have affected Corps appropriations, including earmark moratoriums in both houses in the 112th Congress and reductions for some projects and classes of projects compared to previous years. Additionally, 2011 flooding events on the Mississippi and Missouri rivers and in the northeastern United States affected a number of Corps projects and required reprogramming of Corps funds. In addition to the regular Corps appropriation for FY2012, Congress appropriated $1.724 billion in supplemental funding for response and recovery related to these events. (See Table 4.) 5 This section was prepared by (name redacted). Congressional Research Service 4 Energy and Water Development: FY2013 Appropriations In most years, the President’s budget request for the Army Corps of Engineers is below the agency’s enacted appropriation.6 Enacted appropriations for FY2012 continued this trend. In contrast to most other agencies, the Corps received an increase in total funding compared to the President’s request. The FY2012 enacted appropriation for the Corps was $5.002 billion, or approximately $500 million more than the President’s FY2012 request. The President’s FY2013 budget requested $4.731 billion for the Corps, a decrease of $271 million from the FY2012 enacted level. In its markup, the House Appropriations Committee recommended $4.814 billion for the Corps, or $83 million more than the President’s request. The Senate Appropriations Committee recommended $5.007 billion, or $276 million more than the President’s budget request and $193 million more than the House. Earmarks and the Corps of Engineers Corps funding is part of the debate over congressionally directed spending, or “earmarks.” Unlike highways and municipal water infrastructure programs, federal funds for the Corps are not distributed to states or projects based on a formula or delivered via competitive grants. Generally about 85% of the appropriations for Corps civil works activities are directed to specific projects. In addition to specific projects identified for funding in the President’s budget, in past years many Corps projects have received additional funding from Congress in the appropriations process.7 In the 112th Congress, site-specific project line items added by Congress (i.e., earmarks) have been among those projects subject to House and Senate earmark moratoriums. Thus, additional congressional funding at the project level was not provided in FY2011 and FY2012 enacted appropriations. In lieu of the traditional project-based increases, Congress in FY2012 included additional funding for broad categories of Corps projects (e.g., “ongoing navigation work”), and provided limited directions to the Corps for allocation of these funds.8 6 For instance, in FY2010, the Administration requested $5.1 billion and Congress appropriated $5.44 billion. While congressional earmarks make up a relatively small percentage of most agency budgets, a significant number of Corps projects have historically received additional funding from Congress for construction or operational expenditures. 8 While Congress did not add funding at the project level in FY2012 appropriations, it provided additional funding and guidance for several broad categories of projects in the FY2012 conference report, with instructions for the Corps to make project level allocations based on these instructions in a “work plan” and report back to Congress. These FY2012 Work Plan allocations are available at http://www.usace.army.mil/Missions/CivilWorks/Budget.aspx. 7 Congressional Research Service 5 Energy and Water Development: FY2013 Appropriations Table 4. Energy and Water Development Appropriations Title I: Army Corps of Engineers ($ millions) FY2012 Approp. FY2012 Supplementala FY2013 Request 117.0 - 102.0 102.0 125.0 1,617.0 - 1,471.0 1,488.3 1,700.0 Mississippi River & Tributaries (MR&T) 252.0 802.0 234.0 224.0 253.0 Operation and Maintenance (O&M) 2,412.0 534.0 2,398.0 2,508.4 2,404.0 Regulatory 193.0 - 205.0 190.0 199.0 General Expenses 185.0 - 182.0 172.5 182.0 FUSRAPb 109.0 - 104.0 104.0 109.0 Flood Control & Coastal Emergencies (FC&CE) 112.0 388.0 30.0 30.0 30.0 Office of the Asst. Secretary of the Army 5.0 - 5.0 5.0 5.0 5,002.0 1,724.0 4,731.0 4,824.2 5,007.0 Program Investigations and Planning Construction Total Title I House Senate P.L. 113-6 Source: FY2013 budget request, H.Rept. 112-462, H.R. 5325 as passed, S.Rept. 112-164. a. $1.724 billion was in supplemental funding was provided under the FY2012 Disaster Relief Appropriations Act (P.L. 112-77). b. Formerly Utilized Sites Remedial Action Program. Key Policy Issues—Corps of Engineers Project Backlog The large number of authorized Corps projects that have not received appropriations to date, or that are authorized and have received funding but are incomplete, is often referred to as the “backlog” of authorized projects. Estimates of the backlog range from $11 billion to more than $80 billion, depending on which projects are included (e.g., those that meet Administration budget criteria, those that have received funding in recent appropriations, those that have never received appropriations). The backlog raises policy questions, such as whether there is a disconnect between the authorization and appropriations processes, and how to prioritize among authorized activities.9 Recent budget requests by the Administration have included few new studies and construction starts, and enacted appropriations for FY2011 and FY2012 barred any funding for these project types (defined as projects or studies that have not received appropriations previously). For 9 For more information, see CRS Report R41243, Army Corps of Engineers Water Resource Projects: Authorization and Appropriations, by (name redacted) and (name redacted). Congressional Research Service 6 Energy and Water Development: FY2013 Appropriations FY2013, the Administration requested funding for three new construction starts and six new studies. Navigation Trust Funds In addition to regular appropriations, two congressionally authorized “trust funds” are administered by the Corps and require annual appropriations: the Harbor Maintenance Trust Fund and the Inland Waterway Trust Fund. Both trust funds received attention in the FY2012 appropriations process. While the Harbor Maintenance Trust Fund has a surplus balance, the Inland Waterway Trust Fund currently faces a shortfall and a curtailment of activities. Harbor Maintenance Trust Fund In 1986, Congress enacted the Harbor Maintenance Tax (HMT) to recover operation and maintenance (O&M) costs at U.S. coastal and Great Lakes harbors from maritime shippers. O&M is mostly the dredging of harbor channels to their authorized depths and widths. The tax is levied on importers and domestic shippers using coastal or Great Lakes ports.10 The tax revenues are deposited into the Harbor Maintenance Trust Fund (HMTF) from which Congress appropriates funds for harbor dredging. In 1990, Congress increased the HMT rate from four cents per $100 of cargo value to 12.5 cents per $100 of cargo value, one of many tax increases in the Omnibus Budget Reconciliation Act (P.L. 101-508) designed to lower the federal deficit at that time. In recent years, HMTF annual expenditures have remained relatively flat while HMT collections have increased due to rising import volume (except in 2009 when collections declined along with import volume). Consequently, a large “surplus” in the HMTF has developed. The maritime industry seeks to enact a “spending guarantee” to spend down the surplus in the HMTF (see H.R. 104 and S. 412). Some harbor channels are reportedly not being maintained at their authorized depth and width, requiring ships with the deepest drafts to “light load” or wait for high tide. Harbors primarily used by fishing vessels or recreational craft have also complained of insufficient maintenance dredging. Since spending from the HMTF requires an appropriation from Congress, spending more from the HMTF could reduce available funding for other Energy and Water Development activities under congressional budget caps. The Administration’s FY2013 budget requested $848 million from the HMTF, leaving an estimated-end-of-year balance of more than $8 billion. The House Appropriations Committee provided $1.0 billion in HMTF appropriations. The Senate Appropriations Committee report commented on the Administration’s funding level but did not name a specific HMTF amount. (For more information on harbor maintenance, see CRS Report R41042, Harbor Maintenance Trust Fund Expenditures, by (name redacted).) Inland Waterway Trust Fund Since the 1980s, expenditures for construction and major rehabilitation projects on inland waterways have been cost-shared on a 50/50 basis between the federal government and users 10 An estimate by the Corps is that improved collection from domestic shippers could increase annual receipts by $500 million. Congressional Research Service 7 Energy and Water Development: FY2013 Appropriations through the Inland Waterway Trust Fund (IWTF).11 IWTF monies derive from a fuel tax on commercial vessels on designated waterways, plus investment interest on the balance.12 Since FY2007, there has been a potential shortfall in the IWTF. In the past, Congress has taken measures to ensure temporary solvency of the IWTF, either by appropriating federal funds beyond the aforementioned 50% federal requirement (FY2009 and FY2010), or by limiting IWTF expenditures to the amount available under current year fuel tax revenues (FY2011 and FY2012). The IWTF is expected to have a balance of approximately $55 million at the end of FY2012, and without changes to the current system, needed funding for eligible work is expected to continue to exceed available funding for the foreseeable future. In the past multiple Administrations have proposed fees (e.g., lock user fees, congestion fees) that would have increased IWTF revenues. These fees have been opposed by users and rejected by Congress. In 2011, users endorsed a plan of their own that would increase the current fuel tax by $0.06-$0.08 per gallon and alter the cost-share arrangement for some IWTF projects to increase the portion paid for by the federal government. H.R. 5325 would authorize this proposal, which has been opposed by the Obama Administration. Changes to IWTF policies have historically been under the jurisdiction of the authorizing committees, but in recent years appropriators have expressed frustration with the lack of action on this issue. Without a new source of revenue or some other change directed by Congress, the overall number of inland waterway projects is expected to be extremely limited. Currently one project (Olmsted Lock and Dam on the Ohio River) accounts for almost all IWTF appropriations. This past year, estimates for the Olmsted project increased by $872 million, bringing the total estimate for the project to $2.9 billion.13 Based on the new estimates, the project is expected to continue to require the majority of IWTF revenues for at least 10 more years. In FY2013, the Administration requested limited appropriations for IWTF projects based on current-year fuel tax revenues.14 The FY2013 Administration budget requested approximately $94 million in inland waterway spending from the IWTF, with an equal amount to be drawn from the General Fund of the Treasury. The Administration also assumed an additional $80 million in new revenues from an unspecified user fee, presumably separate from the current fuel tax. The majority of FY2013 IWTF funds were proposed for the Olmsted project. In appropriations action, the House Committee agreed with the requested IWTF funding, but mandated that a portion be restricted until a review of the Olmsted project’s cost overruns is completed. The Senate Appropriations Committee also provided the funding for Olmsted, but provided that only 25% of the funding for Olmsted would have to be cost-shared with the IWTF (the rest would come from the General Fund). In effect, this change provides an extra $72 million for IWTF projects. 11 For more information on inland waterways, see CRS Report R41430, Inland Waterways: Recent Proposals and Issues for Congress, by (name redacted). 12 Pursuant to the Water Resources Development Act of 1986 (P.L. 99-662), the fuel tax has been fixed at $0.20 per gallon since 1992. 13 The project was originally estimated at $775 million in 1986, plus inflation. 14 This is the same approach that was proposed and enacted in FY2011 and FY2012. Assuming annual fuel tax revenues of approximately $95 million, spending on inland waterways construction for FY2013 would be approximately $190 million for each year (or approximately $60 million less than the average funding provided from FY1992-2010). Congressional Research Service 8 Energy and Water Development: FY2013 Appropriations Ecosystem Restoration Projects The Corps portion of the Energy and Water bill typically includes funding for ecosystem restoration projects, such as restoration of the Everglades in South Florida.15 Some in Congress have criticized the fact that while the Corps has requested reductions for some “traditional” activities in recent budgets, funding for activities under its environmental business line (which includes ecosystem restoration projects) has largely remained the same. For FY2013, the Administration requested $511 million (approximately 11% of the FY2013 request) for ecosystem restoration projects, which are the largest component of the environmental business line. This amount is similar to the amount appropriated for these activities in recent years. In its markup of the President’s budget, the House Appropriations Committee decreased funding levels for several of the Administration’s major ecosystem restoration initiatives, including Everglades (reduced from $153 million to $145 million) and Missouri River Fish and Wildlife Recovery (reduced from $90 million to $71 million). The Senate Appropriations Committee agreed with the Administration’s request. Continuing Authorities Program Projects funded under the Corps Continuing Authorities Programs (CAPs) are typically smaller projects that can be carried out without obtaining a project-specific study or construction authorization or project-specific appropriations.16 CAPs are referred to by the section number in the bill where the CAP was first authorized. The Administration’s FY2013 budget requested $24 million in funding for five of the nine CAPs, or a decrease of approximately $19 million from the FY2012 enacted level. The Administration proposed no funding for four CAPs, including no funding for Section 14 (emergency streambank and shoreline protection), Section 103 (shore protection), Section 107 (navigation), and Section 208 (snagging and clearing for flood control). The House Appropriations Committee agreed with the Administration’s overall request for CAPs, but shifted some of the funding within individual CAPs. The Senate Appropriations Committee provided $45 million in funding for eight of the nine CAPs. Title II: Department of the Interior17 Central Utah Project and Bureau of Reclamation The Energy and Water Development bill includes funding for the Central Utah Project (CUP) and the Bureau of Reclamation, both part of the Department of the Interior. The total discretionary FY2013 budget request for Title II funding for the Central Utah Project and Reclamation was approximately $1.034 billion, or a decrease of $42 million from the FY2012 enacted amount. The 15 Along with the Department of the Interior, the Corps typically receives funding for the Comprehensive Everglades Restoration Program, or CERP. For more information, see CRS Report R42007, Everglades Restoration: Federal Funding and Implementation Progress, by (name redacted). 16 A summary of projects under the Continuing Authorities Program is provided on p. 11 of CRS Report R41243, Army Corps of Engineers Water Resource Projects: Authorization and Appropriations, by (name redacted) and (name redac ted). 17 This section was prepared by (name redacted). Congressional Research Service 9 Energy and Water Development: FY2013 Appropriations Obama Administration requested $21 million for the Central Utah Project (CUP) Completion Account in FY2013, or $7 million less than the amount appropriated in FY2012. Significantly, the Administration also proposed to make Reclamation responsible for oversight and implementation of CUP (these responsibilities are currently housed within a separate office in DOI). Both the House and the Senate appropriations committees disagreed with this recommendation. The FY2013 request for the Bureau of Reclamation totaled $1.013 billion in gross current budget authority, or $34 million less than the amount enacted in FY2012. The FY2013 request for the Bureau of Reclamation included an “offset” of $39.9 million for the Central Valley Project (CVP) Restoration Fund (Congress does not list this line item as an offset), yielding a “net” discretionary authority of $973 million. As in previous years, additional funding is estimated to be available for FY2013 via “permanent and other” funds. Table 5. Energy and Water Development Appropriations Title II: Central Utah Project Completion Account ($ millions) FY2012 Approp. FY2013 Request House Senate Central Utah Water Conservancy District 26.7 19.8 19.8 19.8 Mitigation and Conservation Commission Activities 2.0 1.2 1.2 1.2 28.7 21.0 21.0 21.0 Program Total, Central Utah Project Conf. Source: FY2013 budget request, H.Rept. 112-462, S.Rept. 112-164. Table 6. Energy and Water Development Appropriations Title II: Bureau of Reclamation ($ millions) FY2012 Approp. FY2013 Request House Senate Water and Related Resources 895.0 818.6 833.6 892.1 Policy and Administration 60.0 60.0 57.0 60.0 CVP Restoration Fund (CVPRF) 53.1 39.9 39.9 39.9 Calif. Bay-Delta (CALFED) Program 39.7 36.0 36.0 36.0 San Joaquin Restoration Funda — 12.0 — — Indian Water Rights Settlementa — 46.5 — — Gross Current Reclamation Authority 1,047.7 1,013.0 966.5 1,028.0 Total, Title II (CUP and Reclamation) 1,076.4 1,034.0 987.5 1,049.0 Conf. Source: FY2013 budget request, H.Rept. 112-462, S.Rept. 112-164. Congressional Research Service 10 Energy and Water Development: FY2013 Appropriations a. In FY2012 and FY2013 appropriations, the House and Senate Appropriations Committees disagreed with the Administration’s request for new accounts for San Joaquin restoration and Indian water rights settlements and opted to retain funding levels within the Water and Related Resources account. Reclamation’s single largest account, Water and Related Resources, encompasses the agency’s traditional programs and projects, including construction, operations and maintenance, the Dam Safety Program, Water and Energy Management Development, and Fish and Wildlife Management and Development, among others. The Obama Administration requested $818 million for the Water and Related Resources Account for FY2013, a reduction of $76 million from the FY2012 level. However most of this decrease is due to shifting of funds for Indian water rights settlements and San Joaquin restoration to two new accounts. Accounting for these changes, the proposed decrease from FY2012 to the FY2013 request was approximately $34 million. In its markup, the House Appropriations Committee recommended $834 million in funding for Water and Related Resources, a decrease of $43.5 million from the Administration’s request after allowing for the shifting/elimination of funding for the aforementioned two accounts proposed in the President’s request. The Senate Appropriations Committee provided $892.1 million, which amounts to an increase of $15 million from the President’s request after accounting for these same changes. Key Policy Issues—Bureau of Reclamation Background Most of the large dams and water diversion structures in the West were built by, or with the assistance of, the Bureau of Reclamation. Whereas the Army Corps of Engineers built hundreds of flood control and navigation projects, Reclamation’s mission was to develop water supplies, primarily for irrigation to reclaim arid lands in the West. Today, Reclamation manages hundreds of dams and diversion projects, including more than 300 storage reservoirs in 17 western states. These projects provide water to approximately 10 million acres of farmland and a population of 31 million. Reclamation is the largest wholesale supplier of water in the 17 western states and the second-largest hydroelectric power producer in the nation. Reclamation facilities also provide substantial flood control, recreation, and fish and wildlife benefits. Operations of Reclamation facilities are often controversial, particularly for their effect on fish and wildlife species and conflicts among competing water users. As with the Corps of Engineers, the Reclamation budget is made up largely of individual project funding lines and relatively few “programs.” Also similar to the Corps, previously these Reclamation projects have often been subject to earmark disclosure rules. The current moratorium affects Congress’s ability to steer money toward specific Reclamation projects, as it has done in the past. Central Valley Project (CVP) Operations The CVP in California is one of Reclamation’s largest and most complex water projects, and limited deliveries to CVP contractors are often the subject of appropriations and authorization debates. In recent years, Reclamation has had to limit water deliveries and pumping from CVP facilities due to drought and other factors, including environmental restrictions. In previous Congressional Research Service 11 Energy and Water Development: FY2013 Appropriations appropriations bills, this action has resulted in attempts to prevent Reclamation from implementing Biological Opinions (BiOps), some of which restrict CVP operations because of the project’s potential effects on certain fish species.18 Previous restrictions that would prevent implementation of BiOps in the CVP, including amendments to appropriations bills, have not been enacted. However, other measures to lessen the impact of these restrictions have been enacted, and related legislation is currently under consideration.19 San Joaquin River Restoration Fund The San Joaquin River Restoration Fund was authorized by the enactment of Title X of the Omnibus Public Land Management Act of 2009 (P.L. 111-11), the San Joaquin River Restoration Settlement Act. The Fund is to be used to implement fisheries restoration and water management provisions of a stipulated settlement agreement for the Natural Resources Defense Council et al. v. Rodgers lawsuit.20 The Fund is supported through the combination of a reallocation of Central Valley Project Restoration Fund receipts from the Friant Division water users and accelerated payment of Friant water users’ capital repayment obligations, as well as other federal and nonfederal sources. In recent years, funding for the San Joaquin River settlement has been controversial. Some have proposed repealing the settlement outright.21 In lieu of repealing the settlement, some have proposed de-funding the most important components of the settlement that were authorized by Congress, including rescission of prior year mandatory appropriations for San Joaquin restoration. To date, none of these proposals have been enacted. Previous funding for the San Joaquin River settlement included mandatory funds that were made available to Reclamation without further appropriation between FY2010 and FY2012. For FY2013, Reclamation proposed an allocation of $12 million in discretionary funding within a new account for San Joaquin River restoration activities. The House Appropriations Committee provided no funding for these activities. The Senate Appropriations Committee agreed with the Administration’s request. 18 The two BiOps in question have found that continued operation of the projects under a plan developed and implemented in 2004 (known as the Operations Criteria and Plan, or OCAP) would jeopardize the existence of delta smelt and salmon and other endangered species in California. OCAP allowed increased pumping from the delta, which some believe has further imperiled fish species listed as threatened or endangered under the Endangered Species Act. Others note that factors such as invasive species, pollution, and non-federal withdrawals of water from the delta have contributed to fishery declines. Critically low numbers of delta smelt resulted in a court-imposed limit on pumping at certain times. These and other restrictions have led to low water deliveries for certain water districts (e.g., those with junior water rights). 19 Most prominently, H.R. 1837 would, among other things, alter the current regime for water deliveries in the Central Valley and repeal the San Joaquin River Restoration Act. H.R. 1837 passed the House on February 29, 2012. For more information, see CRS Report R42375, H.R. 1837—The Sacramento-San Joaquin Valley Water Reliability Act, by (name redacted). 20 Construction of Friant Dam in the 1940s and subsequent diversion of San Joaquin River water to off-stream agricultural uses blocked salmon migration and dewatered stretches of the San Joaquin, resulting in elimination of spring-run Chinook into the upper reaches of the river. One goal of the settlement is to bring back the salmon run; another is to reduce or avoid adverse water supply impacts to Friant Division long-term contractors. For more information on the settlement agreement and the San Joaquin River Restoration Fund, see CRS Report R40125, Title X of H.R. 146: San Joaquin River Restoration, by (name redacted) and (name redacted). 21 See footnote 19. Congressional Research Service 12 Energy and Water Development: FY2013 Appropriations Klamath Basin Restoration Agreement22 The current Administration has undertaken efforts to avoid water allocation conflicts and restore the fisheries of the Klamath Basin in southern Oregon and Northern California. Two related agreements, the Klamath Basin Restoration Agreement (KBRA) and the Klamath Hydroelectric Settlement Agreement (KHSA), aim to achieve these goals through a mix of federal actions and non-federal dam removal. The agreements, which require authorization by Congress to move forward, would cost the federal government $800 million over 15 years, with additional costs for dam removal funded by nonfederal entities. There are a number of ongoing federal activities in the Klamath, including some actions and studies under the KBRA and KHSA that are going forward under existing authorities. However in order to proceed with other activities, including most of the restoration actions in the KBRA and a secretarial determination related to dam removal under the KHSA, Congress must authorize the agreements.23 In FY2013, in addition to base funds for the Klamath Project (approximately $18.6 million), Reclamation proposed $7.1 million in new funding for selected KBRA activities that are authorized under existing law. Both the House and the Senate appropriations committees agreed with the Administration’s requested funding level. WaterSMART Program In recent years Reclamation has combined funding for several individual “bureau-wide” programs that promote water conservation into a single program—the WaterSMART (Sustain and Manage America’s Resources for Tomorrow) Program. The program is part of an effort by the Department of the Interior to focus on water conservation, re-use, and planning. In the FY2013 request the WaterSMART program included five components: WaterSMART Grants, Basin Studies, Title XVI Projects, the Cooperative Watershed Management Program, and Water Conservation Field Services.24 The FY2013 President’s budget request for WaterSMART programs was $53.9 million. The House Appropriations Committee recommended $46.9 million for the program, and the Senate Appropriations Committee agreed with the President’s request. Funding levels for WaterSMART programs are shown in Table 7. 22 For more information, see CRS Report R42157, Klamath River Basin: Background and Issues, coordinated by (name redacted). 23 Legislation currently before Congress (H.R. 3398 and S. 1851) would authorize the agreements. 24 Prior to FY2012, the Water Conservation Field Services program and the Cooperative Watershed Management Program had been a “bureau-wide” program. For consistency, comparisons to prior year funding in this report include this program within WaterSMART totals. Congressional Research Service 13 Energy and Water Development: FY2013 Appropriations Table 7. Reclamation WaterSMART Program (selected programs, $ millions) Program Name FY2011 FY2012 FY2013 Request House Senate WaterSMART Grants 33.0 12.2 21.5 12.2 21.5 Basin Studies 8.3 4.9 6.0 4.9 6.0 Title XVI Projects 20.5 24.7 20.3 24.6 20.3 Cooperative Watershed Management Program —a 0.25 0.25 0.25 0.25 Water Conservation Field Services [7.8]a 5.0 5.9 5.0 5.9 Total 61.9 47.1 53.9 46.9 53.9 Conf. Source: Bureau of Reclamation Congressional Justifications, FY2013, H.Rept. 112-462, S.Rept. 112-164. a. Prior to FY2012, the Cooperative Watershed Management Program and Water Conservation Field Services programs were not part of WaterSMART. Title III: Department of Energy The Energy and Water Development bill has funded all DOE’s programs since FY2005. Major DOE activities funded by the Energy and Water bill include research and development on renewable energy and nuclear power, general science, environmental cleanup, and nuclear weapons programs, as well as programs for fossil fuels, energy efficiency, the Strategic Petroleum Reserve, and energy statistics. The FY2012 appropriations act, P.L. 112-74, funded DOE programs at $26.3 billion. For FY2013, the Obama Administration requested $27.7 billion for DOE programs. The House Appropriations Committee recommended $26.1 billion. The Senate Appropriations Committee recommended $27.1 billion. Table 8. Energy and Water Development Appropriations Title III: Department of Energy ($ millions) FY2012 Approp. FY2013 Request Energy Efficiency and Renewable Energy 1,809.6 2,267.3 1,451.0 1,916.1 Electricity Delivery and Energy Reliability 139.1 143.0 123.0 143.0 Nuclear Energy 765.4 770.4 765.4 785.4 Fossil Energy R&D 346.7 420.6 529.0 460.6 Naval Petrol. and Oil Shale Reserves 14.9 14.9 14.9 14.9 Program House Senate P.L. 113-6 ENERGY PROGRAMS Congressional Research Service 14 Energy and Water Development: FY2013 Appropriations FY2012 Approp. FY2013 Request Elk Hills School Lands Fund 0.0 15.6 15.6 15.6 Strategic Petroleum Reserve 192.7 195.6 195.6 195.6 SPR Petroleum Account -500.0 -291.0 — — Northeast Home Heating Oil Reserve -89.9 4.1 4.1 4.1 Energy Information Administration 105.0 116.4 100.0 116.4 Non-Defense Environmental Cleanup 235.3 198.5 235.0 228.5 Uranium D&D Fund 472.2 442.5 425.0 442.5 4,873.6 4,992.1 4,801.4 4,909.0 275.0 350.0 200.0 312.0 Nuclear Waste Disposal 0.0 0.0 25.0 0.0 Departmental Admin. (net) 126.0 122.6 85.0 112.6 Office of Inspector General 42.0 43.5 43.5 43.5 Adv. Tech. Vehicles Manuf. Loan 6.0 9.0 6.0 9.0 Innovative Tech. Loan Guarantee 0.0 0.0 0.0 0.0 8,813.7 9,815.1 8,949.8 9,708.7 Weapons Activities 7,214.1 7,577.3 7,512.3 7,577.3 Nuclear Nonproliferation 2,295.9 2,458.6 2,283.0 2,458.6 Naval Reactors 1,080.0 1,088.6 1,086.6 1,088.6 410.0 411.3 382.0 386.3 11,000.0 11,535.9 11,257.0 11,510.9 5,003.0 5,472.0 4,920.0 5,064.0 823.4 735.7 813.4 735.7 0.0 0.0 0.0 0.0 16,826.3 17,743.6 16,990.4 17,310.6 Southeastern 0.0 0.0 0.0 0.0 Southwestern 11.9 11.9 11.9 11.9 Western 96.0 96.1 96.1 96.1 Falcon & Amistad O&M 0.2 0.2 0.2 0.2 Program Science Energy Transformation Acceleration Fund (ARPA-E) TOTAL, ENERGY PROGRAMS House Senate P.L. 113-6 DEFENSE ACTIVITIES National Nuclear Security Administration (NNSA) Office of Administrator Total, NNSA Defense Environmental Cleanup Other Defense Activities Defense Nuclear Waste Disposal TOTAL, DEFENSE ACTIVITIES POWER MARKETING ADMINISTRATION (PMAs) Congressional Research Service 15 Energy and Water Development: FY2013 Appropriations Program FY2012 Approp. FY2013 Request 108.1 108.2 108.2 108.2 25,748.1 27,666.9 26,048.4 27,127.6 TOTAL, PMAs Total, Title III House Senate P.L. 113-6 Source: FY2013 budget request, H.Rept. 112-462, H.R. 5325 as passed, S.Rept. 112-164. Key Policy Issues—Department of Energy DOE administers a wide variety of programs with different functions and missions. In the following pages, some of the most important programs are described and major issues are identified, in approximately the order in which they appear in Table 8. Energy Efficiency and Renewable Energy (EERE)25 President Obama has declared energy efficiency and renewable energy to be in a “Sputnik moment,” comparable to the U.S.-Soviet space race that began in the 1950s. In his State of the Union address in February 2012 he reiterated their importance to jobs, economic growth, and U.S. manufacturing competitiveness. But the Congress has been reluctant to go along with his efforts to boost spending for these programs. His proposed FY2011 budget for EERE of $2.4 billion was reduced to $1.8 billion, and his FY2012 proposal of $3.2 billion was cut to $1.8 billion. For FY2013, DOE requested $2.267 billion for the EERE programs. Compared with the FY2012 appropriation, the FY2013 request would increase EERE funding by $458 million, or 25%. The House bill would reduce the requested amount sharply, to $1.381 billion. The Senate bill would appropriate $1.916 billion. DOE requested an additional $143.0 million for Electricity Delivery and Energy Reliability (EDER) programs. Table 9 gives the programmatic breakdown for EERE and EDER. 25 This section was prepared by (name redacted). Congressional Research Service 16 Energy and Water Development: FY2013 Appropriations Table 9. Energy Efficiency and Renewable Energy Programs ($ millions) FY2012 Approp. FY2013 Request House Senate Hydrogen/Fuel Cell Technologies 103.6 80.0 82.0 104.0 Biomass and Biorefinery Systems 199.3 270.0 203.0 200.0 Solar Energy 289.0 310.0 155.0 293.0 —Concentrating Solar Power (CSP) 44.9 45.1 —- —- —Photovoltaic (PV) Power 75.6 66.0 —- —- Wind Energy 93.3 95.0 70.0 95.0 Geothermal Technology 37.9 65.0 30.0 65.0 Water Power (Hydro/Ocean) 58.8 20.0 45.0 59.0 Subtotal, Renewable and Hydrogen 781.8 840.0 585.0 820.0 Vehicle Technologies 328.8 420.0 335.0 330.0 Building Technologies 219.2 310.0 125.0 220.0 Advanced Manufacturing 115.6 290.0 150.0 168.6 Federal Energy Management 29.9 32.0 18.0 30.0 Subtotal, Efficiency R&D 693.5 1,052.0 628.0 750.6 Facilities and Infrastructure 26.3 26.4 26.4 26.4 Program Direction 165.0 164.7 115.0 164.7 Strategic Programs 25.0 58.9 10.0 25.0 R&D Subtotal 1,691.5 2,142.0 1,364.4 1,786.7 Renewables Deployment 10.0 7.0 7.0 10.0 Subtotal, Demonstration and Deployment 10.0 7.0 7.0 10.0 Weatherization Grants 68.0 139.0 54.6 145.0 State Energy Grants 50.0 49.0 25.0 50.0 Use of Prior Year Balances -9.9 -69.7 -69.7 -69.7 Total EERE Appropriation 1,809.6 2,267.3 1,381.3 1,916.1 Electricity Delivery and Energy Reliability (EDER) 139.1 143.0 123.0 143.0 Program Conf. Sources: FY2013 budget request, H.Rept. 112-462, S.Rept. 112-164. New Subprogram Account Structure For each major EERE technology program (e.g., Solar Technologies, Vehicle Technologies), DOE proposed changing the subprogram account structure from descriptions of technology- Congressional Research Service 17 Energy and Water Development: FY2013 Appropriations specific activities (e.g., Photovoltaic R&D, Battery Technology) to a uniform sub-program structure that has four areas: Innovations, Emerging Technologies, Systems Integration, and Market Barriers. The four areas are sequential, following the technology development progression—research, development, demonstration, and deployment (RDD&D). Each of the four new subprogram areas is identified with the concept of “technology readiness level (TRL),” a new element of its vocabulary for describing EERE technology programs. TRL is defined by a numerical scale that covers the RDD&D progression. The scale ranges from TRL1, for basic research, to TRL10, for commercial market penetration. Thus, the Innovations subprogram encompasses activities traditionally defined as applied research, covering TRL levels 2 through 3. The Emerging Technologies subprogram captures activities traditionally defined as development, covering TRL levels 3 through 6. The Systems Integration subprogram embraces demonstration activities, associated with TRL levels 6 through 8. The Market Barriers subprogram is comprised of deployment-related activities, covering TRL levels 8 through 10. Both the House and Senate reports rejected DOE’s proposal for a new subprogram account structure, citing its inadequacy for budgeting purposes. For the FY2014 request, the Senate report directed DOE to provide more detail at the program, project, and activity level. Hydrogen/Fuel Cell Program For the Hydrogen/Fuel Cell Program, DOE requested $80 million, $24 million below FY2012. In general, activities would be reduced, but not eliminated. The House bill would go along with the cut, appropriating $82 million. The Senate bill would appropriate $104 million, the FY2012 level. Biomass and Biorefinery Program Initiatives This program aims to foster a domestic bioenergy industry that produces renewable biofuels, bioproducts, and biopower. The goals are to curb oil dependence, reduce greenhouse gas emissions, and stimulate economic and job development—especially in the farms and forests of rural areas. While biofuels and bioproducts may soon be price-competitive, swings in oil prices pose an ongoing challenge to achieve cost-competitiveness. The program strategy addresses a feedstock collection barrier by focusing on converting raw biomass to solid pellets or to “green crude” oil that is easy to transport at large scale. The program aims to help cellulosic biofuels (renewable gasoline, diesel, and jet fuel) reach a wholesale finished-fuel cost under $3 per gallon by 2017. DOE requested $270 million for FY2013 for biomass and biorefinery programs, compared to $199 million appropriated for FY2012. Most of the increased funding would be used to complete pilot- and demonstration-scale biorefinery demonstration projects. The increase would support the construction and operation phases for biofuels, such as cellulosic ethanol and renewable diesel. Also, funds would support an innovative pilot program and deployment of a mobile feedstock process demonstration. DOE also sought authority from Congress to transfer $100 million from the EERE appropriation to the Defense Production Act Fund. This money would be used in joint activities by DOE, the Congressional Research Service 18 Energy and Water Development: FY2013 Appropriations Department of Defense, and the Department of Agriculture to develop pilot-scale demonstrations for production of renewable diesel and jet fuel to be used by the Navy. The House and Senate bills, as reported by the Appropriations Committees, would not fund the increased activity. The House bill would appropriate $203 million, the Senate bill $200 million. The House Appropriations Committee did not agree to the proposed transfer to the Defense Production Act Fund; the Senate Appropriations Committee approved it. Solar Energy For the Solar Program, DOE requested $310 million, a net increase of $21 million over FY2012. Much of the increase would go to research on new data analysis capabilities to help cut time and permitting process costs for solar installations. The Senate Appropriations Committee recommended $293 million, and supported the increase for data analysis. The House bill would cut the Solar Program to $155 million. The House Appropriations report specified a minimum of $65 million for Innovations in Manufacturing, and $20 million for Photovoltaic Cell Development and Supply Chain activities. Wind Energy For the Wind Program, DOE requested $95 million, essentially no change over FY2012. The Senate Appropriations Committee recommended the full amount of the request, while the House report recommended $70 million. Both reports stressed support for offshore wind technology development. Geothermal Technologies For the Geothermal Program, DOE requested $65 million, an increase of $27.1 million over FY2012. Much of the increase would go to an Enhanced Geothermal Systems (EGS) Field Sites program. The Senate bill would fund the Geothermal Program at the requested level. The House bill would appropriate $30 million. The House Committee report specified no funding for the EGS program. Both the House and the Senate Appropriations Committees urged DOE to pursue the potential of low-temperature geothermal sources. Water Power For the Water Power Program, DOE requested $20 million, a cut of $38.8 million below FY2012. Water power technologies employ marine and hydrokinetic (wave, tidal, current, and ocean thermal) resources, and conventional hydropower resources, to generate electricity. The budget request would have allocated $15 million to water power technologies and $5 million to conventional hydropower. The Senate Appropriations Committee recommended $59 million for water power, in the same proportion of 75% for water power technologies and 25% for conventional hydropower. The House Appropriations Committee recommended $25 million for technologies and $20 million for conventional hydropower. Congressional Research Service 19 Energy and Water Development: FY2013 Appropriations Vehicle Technologies In 2011 the President announced a goal to put 1 million electric vehicles (EVs) on the road by 2015, although since then the administration has backed off from this goal. To help promote EV development and deployment, DOE requested an increase of $91 million for the Vehicle Technologies Program over the $329 million appropriated for FY2012. Most of the increase would support the Electric Vehicle (EV) Grand Challenge, with the goal of assuring U.S. leadership in the global market for next generation electric vehicle technology. The EV Challenge focuses on advanced battery technology, power electronics, and advanced charging technology. Neither the House nor the Senate Appropriations Committees agreed to the increase. The House bill would appropriate $335 million; the Senate bill $330 million. Building Technologies This program develops energy efficiency measures to curb building-related energy costs, with a goal of reducing energy use 50% by 2030. The program strategy is designed with three linked paths: improve building components (envelope/windows, HVAC, lighting, and sensors/controls), strengthen market pull (through cooperation with private industry), and raise energy efficiency for new equipment (via standards) and new buildings (via model codes). DOE requested $310 million for FY2013, an increase of $90.8 million over FY2012. The funding increase would be spread over most building activities, with a special focus on accelerating currently scheduled rulemakings for equipment standards and on initiating standards for about six additional (new) products. Both reports rejected DOE’s proposed overall increase—yet both support another year of funding for the Building Innovation Hub. The Senate Appropriations Committee recommended $220 million, which is the same as FY2012. The House report recommended $125 million. Also, it directed DOE to (1) conduct a study of the benefits of an R&D program to improve the manufacturing of consumer electronics and (2) ensure that any proposed standards for manufactured housing account for both up-front costs and lifecycle operating costs. Advanced Manufacturing DOE proposes to restructure the Industrial Technologies Program into an Advanced Manufacturing Office (AMO). This reflects an effort to accelerate the program’s evolution in response to national interests—especially concerns about jobs, critical materials, and international competitiveness. The general goal for AMO programs is to reduce the energy use of manufactured goods across targeted product life-cycles by 50% over 10 years. The manufacturing focus is a major theme of the EERE request, which follows from the President’s Advanced Manufacturing Partnership initiative. Under EERE, the focus centers on the AMO and is also evidenced by manufacturing elements under several other technology programs. To meet the above-noted goal, DOE requested $290 million, a net increase of $174.4 million. Nearly 80% of the increase would go Next Generation Manufacturing Processes, with the remainder split between Next Generation Materials and Industrial Technical Assistance. These proposed increases directly parallel the “Next Generation” manufacturing initiatives proposed in Congressional Research Service 20 Energy and Water Development: FY2013 Appropriations the FY2012 request. The FY2013 proposals appear to involve less funding, more focus, and more specifics than those in the FY2012 request.26 The increase for Manufacturing Processes is intended to develop new ways to reduce and/or integrate the number of steps in industrial processes (e.g. to reduce energy losses from industrial motors, steam, and process heating activities) and to discover alternate processes (e.g., biomanufacturing to support the production of oil substitutes). Public-private partnerships would be expanded through manufacturing demonstration facilities (MDFs),27 research/industry manufacturing awards,28 and manufacturing challenges.29 DOE expects that many projects funded through the Administration’s Innovative Manufacturing Initiative (IMI) will advance into this phase, as technologies are scaled up and demonstrated for industrial applications.30 Through these various activities, small- and medium-sized firms would gain access to specialized technology that would otherwise be cost-prohibitive. Also, the funding for Next Generation Materials aims to allow for energy savings in energy intensive processes, create new design opportunities for renewable energy generation in austere environments, and help bypass the need for critical materials while reducing cost. The House Appropriations Committee recommended $150 million, which is $34 million more than FY2012. The Senate report recommended $168.6 million, which is $52.6 million more than FY2012. Both reports agreed to extend funding for the Critical Materials Hub for another year. Federal Energy Management Program (FEMP) FEMP provides expertise, training, and other services to help federal agencies achieve congressionally mandated energy efficiency and renewable energy goals. DOE requested $32 million, which would be $2 million more than FY2012. The Senate Appropriations Committee recommended $30 million and the House Appropriations Committee recommended $18 million. Program Direction This program funds federal employees, contract support, and operational costs. DOE requested $164.7 million, essentially level funding with FY2012. The Senate Appropriations Committee recommended the full amount of the request. The House report recommended $115 million. 26 The FY2013 funding increase sought for Advanced Manufacturing Office initiatives ($174.4 million) is about $38 million (18%) less than the increase that was requested for FY2012. For more details on the FY2012 request, see CRS Report R41908, Energy and Water Development: FY2012 Appropriations, coordinated by (name redacted), pages 2223. 27 MDFs promote development, integration, evaluation, and exploitation of advanced materials and energy-efficient, flexible manufacturing technologies to hasten dissemination of technology developments across the supply chain of manufacturers. The MDF provides physical and virtual tools—from design to evaluation and testing/verification—for rapidly prototyping new technologies and optimizing critical manufacturing processes. 28 Laboratory and industry manufacturing awards provide incentives for collaboration between industry and researchers outside of the private sector, including National Laboratories. 29 Manufacturing Challenges establish open competitions to address non-conventional solutions to pervasive large-scale problems. 30 IMI public-private partnerships target core technical problems facing an industry or group of industries, that, if solved, hold the potential to produce large improvements in energy productivity, environmental performance, product yield, and economic benefits. Congressional Research Service 21 Energy and Water Development: FY2013 Appropriations Strategic Programs For Strategic Programs (formerly Program Support), DOE seeks $58.9 million, an increase of nearly $34 million over FY2012. Most of the increase would go for joint work with DOE’s Office of Science on clean energy research and innovation. Also, the International subprogram would get a $3.5 million increase, from which $2 million would support exports to foreign markets. The Senate Appropriations Committee recommended $25 million, the FY2012 level, and the House Appropriations Committee recommended $10 million. Weatherization Grant Program This program addresses regulatory, financial, and planning barriers faced by state and local governments. The goal is to foster technologies, practices, and policies that support state and local governments in providing home energy services to low-income families that help them reduce energy costs and save money. DOE requested $139 million for FY2013, compared to $68 million appropriated for FY2012. Nearly all of the addition would increase the number of lowincome households weatherized.31 The Senate Appropriations Committee recommended $145 million. The House Appropriations report cited the availability of $810 million in unspent prior year funds in its recommendation for $54.6 million. State Energy Grant Program This program supports many state energy offices, both administration and activities. DOE requested $49 million, nearly level funding with FY2012. The Senate Appropriations Committee recommended $50 million, and the House report recommended $25 million. Electricity Delivery and Energy Reliability (EDER) Program32 DOE requested $143 million, a net increase of $3.9 million, for EDER, which included $20.0 million for a new Electricity Systems Hub. The Hub would address the growing need for grid accommodation of renewables, the impact of electric vehicles and distributed generation, and the advent of smart grid equipment. Hub funding would be mostly offset by cuts to other programs. The Senate Appropriations Committee recommended the full amount of the request, including funding for the Hub. The House report recommended $123 million, specifying no funds for the Hub. Nuclear Energy33 The Obama Administration’s FY2013 funding request for nuclear energy research and development totaled $770.4 million. Including advanced reactors, fuel cycle technology, infrastructure support, and safeguards and security, the total nuclear energy request was $88.3 31 Also, in FY2013, collection and analysis of data from ARRA projects would enable updated estimates of program energy savings, cost savings, leveraged funds, and other impacts. For more details about the program see CRS Report R42147, DOE Weatherization Program: A Review of Funding, Performance, and Cost-Effectiveness Studies, by (name redacted). 32 This section was prepared by (name redacted). 33 This section was prepared by (name redacted). Congressional Research Service 22 Energy and Water Development: FY2013 Appropriations million (10%) below the enacted FY2012 funding level. Funding for safeguards and security at DOE’s Idaho facilities in FY2012 was provided under a separate appropriations account, Other Defense Activities, but it was included under the Nuclear Energy account in the FY2013 request. The largest proposed reductions for FY2013 were Reactor Concepts (36%), Radiological Facility Management (27%) and Nuclear Energy Enabling Technologies (13%). Excluding funding for Idaho safeguards and security, the House Appropriations Committee recommended an increase of $89.9 million for the nuclear energy account, for a total of $765.4 million. The committee recommended that $93.4 million for Idaho safeguards and security be provided under the Other Defense Activities Account. The Senate Appropriations recommended a $20.1 million increase for nuclear energy, including Idaho safeguards and security and $17.7 million in prior-year balances. Using reorganized budget categories established for FY2011, the Administration’s FY2013 nuclear R&D budget request is consistent with DOE’s Nuclear Energy Research and Development Roadmap issued in April 2010.34 The Roadmap lays out the following four main goals for the program: • Develop technologies and other solutions that can improve the reliability, sustain the safety, and extend the life of current reactors; • Develop improvements in the affordability of new reactors to enable nuclear energy to help meet the Administration’s energy security and climate change goals; • Develop sustainable nuclear fuel cycles; and • Understand and minimize the risks of nuclear proliferation and terrorism. Reactor Concepts The Reactor Concepts program area includes the Next Generation Nuclear Plant (NGNP) demonstration project and research on other advanced reactors (often referred to as Generation IV reactors). This area also includes funding for developing advanced small modular reactors (discussed in the next section) and to enhance the “sustainability” of existing commercial light water reactors. The total FY2013 funding request for this program was $73.7 million, a reduction of $41.2 million from FY2012. The House Appropriations Committee recommended an increase of $11.1 million from the FY2012 level, while the Senate panel’s recommendation was the same as the request. Most of the Administration’s proposed reduction in Reactor Concepts would be for NGNP, a high-temperature gas-cooled reactor demonstration project authorized by the Energy Policy Act of 2005 (EPACT05, P.L. 109-58). The reactor is intended to produce high-temperature heat that could be used to generate electricity, help separate hydrogen from water, or be used in other industrial processes. DOE is requesting $21.2 million for the NGNP project for FY2013, down from $40 million provided in FY2012. Under EPACT05, the Secretary of Energy was to decide by the end of FY2011 whether to proceed toward construction of a demonstration plant. Secretary of Energy Steven Chu informed Congress on October 17, 2011, that DOE would not proceed with 34 Department of Energy, Nuclear Energy Research and Development Roadmap, Report to Congress, Washington, DC, April 2010, http://nuclear.gov/pdfFiles/NuclearEnergy_Roadmap_Final.pdf. Congressional Research Service 23 Energy and Water Development: FY2013 Appropriations a demonstration plant design “at this time” but would continue research on the technology.35 Potential obstacles facing NGNP include low prices for natural gas, the major competing fuel, and private-sector unwillingness to share the project’s costs as required by EPACT05.36 According to the DOE budget justification, the NGNP program in FY2013 will focus on fuels for very high temperature reactors, the graphite used in high-temperature reactor cores, and licensing issues. The House Appropriations Committee recommended $50 million for NGNP, to allow DOE to continue developing a licensing framework and continue working with industry on the program. The Senate panel restricted NGNP activities to ongoing fuel-related research. Funding for the Advanced Reactor Concepts subprogram would also be reduced sharply by the Administration request, from $21.9 million in FY2012 to $12.4 million in FY2013. Reactor concepts being developed by this subprogram are generally classified as “Generation IV” reactors, as opposed to the existing fleet of commercial light water reactors, which are generally classified as generations II and III. Such advanced reactors “could dramatically improve nuclear power performance including sustainability, economics, and safety and proliferation resistance,” according to the FY2013 justification. Nuclear technology development under this program includes “fast reactors,” using high-energy neutrons, and reactors that would use a variety of heattransfer fluids, such as liquid sodium and supercritical carbon dioxide. International research collaboration in this area would continue under the Generation IV International Forum (GIF). The House Appropriations Committee recommended an increase $1.1 million over FY2012, while the Senate panel approved the Administration’s proposed reduction. DOE’s FY2013 request for the Light Water Reactor Sustainability subprogram was $21.7 million, $3.3 million below the FY2012 appropriation. The program conducts research on extending the life of existing commercial light water reactors beyond 60 years, the maximum operating period currently licensed by the Nuclear Regulatory Commission. The program, which is to be costshared with the nuclear industry, is to study the aging of reactor materials and analyze safety margins of aging plants. Other research under this program is to focus on improving the efficiency of existing plants, through such measures as increasing plant capacity and upgrading instrumentation and control systems. Research on longer-life LWR fuel is aimed at eliminating radioactive leakage from nuclear fuel and increasing its accident tolerance, along with other “post-Fukushima lessons learned research needs,” according to the budget justification. The House Appropriations Committee rejected the Administration’s proposed reduction, while the Senate panel approved it. Small Modular Light Water Reactors Rising cost estimates for large conventional nuclear reactors—widely projected to be $6 billion or more—have contributed to growing interest in proposals for small modular reactors (SMRs). Ranging from about 40 to 350 megawatts of electrical capacity, such reactors would be only a fraction of the size of current commercial reactors. Several modular reactors would be installed together to make up a power block with a single control room, under most concepts. Current SMR proposals would use a variety of technologies, including high-temperature gas technology in the NGNP program and the light water (LWR) technology used by today’s commercial reactors. 35 Idaho National Laboratory, NGNP Project 2011 Status and Path Forward, INL/EXT-11-23907, December 2011. Yanmei Xie, “Cheap Natural Gas, Cost-Share Disagreement Jeopardize NGNP,” Nucleonics Week, April 28, 2011, p. 1. 36 Congressional Research Service 24 Energy and Water Development: FY2013 Appropriations DOE requested $65 million for FY2013 to provide technical support for licensing small modular LWRs, $2 million below the FY2012 funding level. This program focuses on LWR designs because they are believed most likely to be deployed in the near term, according to DOE. Conferees on the FY2012 appropriations bill anticipated a five-year program totaling $452 million. The program is similar to DOE’s support for larger commercial reactor designs under the Nuclear Power 2010 Program, which ended in FY2010. DOE will provide support for design certification, standards, and licensing. As with the Nuclear Power 2010 Program, at least half the costs of the LWR SMR program are to be covered by industry partners, according to DOE. The program will support two teams of reactor vendors and specific utilities or consortia who are interested in building the reactors at specific sites, according to the DOE justification. DOE announced a funding solicitation for the program on March 22, 2012.37 The House Appropriations Committee recommended $114 million for the SMR licensing program, $47 million above FY2012. The committee report called the increase necessary to keep the program on track to receive $452 million over five years. The Senate panel provided the same funding as in the budget request. An additional $18.5 million for FY2013 was requested by DOE under the Reactor Concepts program (described in the section above) for SMR advanced concepts R&D—$10.2 million below the FY2012 funding level. Unlike the SMR licensing support program, which focuses on conventional LWR technology, the SMR advanced concepts program would conduct research on technologies that might be deployed in the longer term, according to the budget justification. The House Appropriations Committee rejected the Administration’s proposed reduction, while the Senate panel approved the budget request. Small modular reactors would go against the overall trend in nuclear power technology toward ever-larger reactors intended to spread construction costs over a greater output of electricity. Proponents of small reactors contend that they would be economically viable despite their far lower electrical output because modules could be assembled in factories and shipped to plant sites, and because their smaller size would allow for simpler safety systems. In addition, although modular plants might have similar or higher costs per kilowatt-hour than conventional large reactors, their ability to be constructed in smaller increments could reduce electric utilities’ financial commitment and risk. Fuel Cycle Research and Development The Fuel Cycle Research and Development Program conducts “long-term, science-based” research on a wide variety of technologies for improving the management of spent nuclear fuel, according to the DOE budget justification. The total FY2013 funding request for this program is $175.4 million, $10.8 million below the FY2012 appropriation. The House Appropriations Committee recommended $138.7 million for Fuel Cycle R&D, $36.7 million below the request. The Senate panel recommended $193.1 million, $17.7 million above the request. The range of fuel cycle technologies being studied by the program includes direct disposal of spent fuel (the “once through” cycle) and partial and full recycling, according to the budget justification. The Fuel Cycle R&D Program “will research and develop a suite of technology 37 Department of Energy, “Obama Administration Announces $450 Million to Design and Commercialize U.S. Small Modular Nuclear Reactors,” press release, March 22, 2012, http://www.ne.doe.gov/newsroom/2012PRs/ nePR032212_print.html. Congressional Research Service 25 Energy and Water Development: FY2013 Appropriations options that will enable future decision-makers to make informed decisions about how best to manage nuclear waste and used fuel from reactors,” the budget justification says. Much of the planned research on spent fuel management options will address the near-term recommendations of the Blue Ribbon Commission on America’s Nuclear Future, which issued its final report on January 26, 2012.38 The commission was chartered to develop alternatives to the planned Yucca Mountain, NV, spent fuel repository, which President Obama wants to terminate. The largest subprogram under Fuel Cycle Research and Development is Used Nuclear Fuel Disposition, with a request of $59.7 million, the same as the FY2012 funding level. Activities in that area include work toward the development and licensing of standardized spent fuel containers, studies of potential spent fuel disposal partnerships, and the accelerated characterization of potential geologic media for waste disposal. The House report contended that much of the proposed research in the Used Fuel Disposition Program relates to waste program changes recommended by the Blue Ribbon Commission that have not been enacted by Congress. As a result, the panel reduced funding for Used Fuel Disposition to $38 million, $15 million of which would be for storage and transportation work related to the Yucca Mountain repository. The Senate panel’s $17.7 million increase from the budget request consists of prior-year funds that would be used for a spent fuel storage pilot project (see the “Nuclear Waste Disposal” section for more details). Other major research areas in the Fuel Cycle R&D Program include the development of advanced fuels for existing commercial reactors and advanced reactors, improvements in nuclear waste characteristics, and technology to increase nuclear fuel resources, such as uranium extraction from seawater. Nuclear Energy Enabling Technologies The Nuclear Energy Enabling Technologies (NEET) program “is designed to conduct research and development (R&D) in crosscutting technologies that directly support and enable the development of new and advanced reactor designs and fuel cycle technologies,” according to the FY2013 DOE budget justification. The DOE funding request for the program was $65.3 million, $9.4 million below the FY2012 level. The House Appropriations Committee recommended $75 million, nearly the same as in FY2012, while the Senate panel recommended the same funding as the request. DOE’s proposed funding cut would come entirely under the category of Crosscutting Technology Development, for which $26.2 million was requested, $9.7 million below FY2012. According to the budget justification, the cuts result from elimination of research on manufacturing methods and nonproliferation risk assessments. Continuing crosscutting research activities are to include development of innovative materials, advanced automation and information technologies, advanced sensors, and improved fuel performance. The Energy Innovation Hub for Modeling and Simulation, created in FY2010, had a request of $24.6 million, slightly above the FY2012 appropriation. The Modeling and Simulation Hub is creating a computer model of an operating 38 Blue Ribbon Commission on America’s Nuclear Future, “Blue Ribbon Commission on America’s Nuclear Future Issues Final Report to Secretary of Energy,” press release, January 26, 2012, http://brc.gov/index.php?q= announcement/brc-releases-their-final-report. Congressional Research Service 26 Energy and Water Development: FY2013 Appropriations reactor to allow a better understanding of nuclear technology, with the benefits of such modeling extending to other energy technologies in the future, according to the budget justification. DOE requested $14.6 million for the National Scientific User Facility, the same as the FY2012 appropriation, to support partnerships by universities and other research organizations to conduct experiments “at facilities not normally accessible to these organizations,” according to the justification. Up to five such partnerships are currently anticipated, and the FY2013 funding will allow up to three new long-term and five “rapid turnaround” projects to be awarded. Fossil Energy Research and Development39 The Obama Administration proposed a new budget structure for the FY2012 Fossil Energy Research and Development (FER&D) program that emphasized coal with a focus on carbon capture and storage (CCS) technologies. The new structure was adopted in the final appropriations bill. The CCS program is intended to demonstrate advanced clean coal technologies on a commercial-project scale, and build and operate near-zero atmospheric emissions power plants that capture and store carbon dioxide (CO2). A Carbon Capture subprogram focuses on separating CO2 in both pre-combustion and post-combustion systems. The Carbon Storage sub-program focuses on long-term geologic storage of CO2, including small- and large-scale CO2 injection tests. An Advanced Energy Systems sub-program focuses on improving the efficiency of coal-based power systems to capture CO2. The Advanced Energy Systems subprogram focuses on improving the efficiency of coal-based power systems, enabling affordable CO2 capture, increasing plant availability, and maintaining the highest environmental standards. The Cross-Cutting Research activity serves as a bridge between basic and applied research by fostering the development and deployment of innovative systems. For FY2013 the budget structure remains unchanged, and the Administration requested $420.6 million and the use of $7.9 million in prior-year balances, bringing spending on Fossil Energy R&D to $428.5 million. The Administration had proposed eliminating spending on Natural Gas Technology, Unconventional Technologies, and Cooperative R&D for FY2011, but Congress insisted on continued spending on natural gas both in FY2011 and FY2012. For FY2013 the Administration requested $17 million for Natural Gas Technologies. The House Committee recommended $554 million for Fossil Energy Research and Development, $207.3 million above FY2012 and $133.4 million above the budget request. After accounting for rescissions of $187.3 million in FY2012, the recommendation is $20 million above FY2012. The committee recommendation of $384.3 million for Carbon Capture and Sequestration (CCS) and Power Systems includes $68.9 million for Carbon Capture, $115.3 million for Carbon Storage ($16 million for enhanced oil recovery technologies), $110 million for Advanced Energy Systems ($25 million for solid oxide fuel systems research, development, and demonstration), $10 million for coal-biomass to liquids activities, $5 million for High Performance Materials, $55 million for Cross-Cutting Research, and $35 million for NETL Coal Research and Development. The committee also recommended $17 million for Natural Gas Technologies ($10 million for shale gas extraction, and $2 million for Risk Based Data Management Systems), and $115.7 million for Program Direction. With gasoline prices once again at record levels, the committee report says, it is more important than ever to use all means possible to increase the domestic oil supply, and recommended $25 million for a new program in Unconventional Fossil Energy Technologies. 39 This section was prepared by (name redacted). Congressional Research Service 27 Energy and Water Development: FY2013 Appropriations The Senate Committee recommended $460.6 million for Fossil Energy Research and Development, $40 million more than the budget request. The committee recommendation of $301.6 million for Carbon Capture and Sequestration includes $60.4 million for Carbon Capture, $95.5 million for Carbon Storage, $80.9 million for Advanced Energy Systems, $29.7 million for Cross-Cutting Research, and $35.0 million for NETL Coal Research and Development. The committee also recommended $22 million for Natural Gas Technologies, $5 million for a new Unconventional Fossil Energy program, and $120 million for Program Direction. Table 10. Fossil Energy Research and Development Program (FER&D) ($ millions) FY2011 Approp. FY2012 Approp. FY2013 Request 400.2 0.0 0.0 Carbon Capture 0.0 68.9 60.4 68.9 60.4 Carbon Storage 0.0 115.5 95.5 115.3 95.5 Advanced Energy Systems 0.0 100.0 55.2 110.0 80.9 Cross Cutting Research 0.0 49.2 29.8 55.0 29.7 National Energy Tech. Lab Coal R&D 0.0 35.0 35.0 35.0 35.0 CCS Subtotal 0.0 368.6 275.9 384.3 301.6 25.0 5.0 Fuels and Power Systems House Senate Conf. CCS Demonstration Unconventional FE Natural Gas Technologies 2.0 15.0 17.0 17.0 22.0 Program Direction 151.7 120.0 115.8 115.8 120.0 Plant and Capital Equipment 20.0 16.8 13.3 13.3 13.3 F E Environmental Restoration 10.0 7.9 5.9 5.9 5.9 Special Recruitment Program 0.7 0.7 0.7 0.7 0.7 584.5 534.0 428.6 562.0 468.5 0.0 0.0 -7.9 -7.9 -7.9 Rescission -140.0 -187.0 0 0 0 Total 444.5 347.0 420.6 554.0 460.6 Subtotal Prior-year balances Source: FY2013 Budget Request, H.Rept. 112-462, and S.Rept. 112-164. Strategic Petroleum Reserve40 The Strategic Petroleum Reserve (SPR), authorized by the Energy Policy and Conservation Act (P.L. 94-163) in 1975, consists of caverns formed out of naturally occurring salt domes in 40 This section was prepared by (name redacted). Congressional Research Service 28 Energy and Water Development: FY2013 Appropriations Louisiana and Texas. The purpose of the SPR is to provide an emergency source of crude oil that may be tapped in the event of a presidential finding that an interruption in oil supply, or an interruption threatening adverse economic effects, warrants a drawdown from the reserve. By early 2010, the SPR’s maximum capacity reached 727 million barrels.41 The federal government has not purchased oil for the SPR since 1994. Beginning in 2000, additions to the SPR were made with royalty-in-kind (RIK) oil acquired by the Department of Energy in lieu of cash royalties paid on production from federal offshore leases. In September 2009 the Secretary of the Interior announced a transitional phasing out of the RIK Program.42 In its FY2012 request, the Obama Administration had proposed a sale of $500 million in petroleum from the SPR, to be completed not later than March 1, 2012, for deposit in the General Fund of the Treasury. In summer 2011, the President ordered an SPR sale in coordination with an International Energy Administration sale under treaty obligation. The U.S. sale of 30.6 million barrels, for a total of about $3.3 billion, reduced the SPR inventory to 695.9 million barrels. For FY2013, the administration requested $195.6 million to operate the SPR, an increase from the $192.7 million enacted in for FY2012. The Administration also proposed rescinding $291 million in balances from the SPR account resulting from the emergency sale of SPR oil conducted in 2011. The House and Senate Committees recommended $195.6 million for operation of the SPR, and opposed the Administrations proposed rescission of $291 million from the SPR Account. Science43 The DOE Office of Science conducts basic research in six program areas: basic energy sciences, high-energy physics, biological and environmental research, nuclear physics, advanced scientific computing research, and fusion energy sciences. Through these programs, DOE is the thirdlargest federal funder of basic research and the largest federal funder of research in the physical sciences.44 For FY2013, DOE requested $4.992 billion for the Office of Science, an increase of 2.4% from the FY2012 appropriation of $4.874 billion. The House committee recommended $4.801 billion. The Senate committee recommended $4.909 billion. (See Table 11.) 41 For details on the SPR see CRS Report R41687, The Strategic Petroleum Reserve and Refined Product Reserves: Authorization and Drawdown Policy, by (name redacted) and (name redacted). 42 Bureau of Ocean Management, Regulation and Enforcement. http://www.mrm.boemre.gov/AssetManagement/ default.htm. 43 This section was prepared by (name redacted). 44 Based on preliminary FY2010 data from Tables 29 and 22 of National Science Foundation, Division of Science Resources Statistics, Federal Funds for Research and Development: Fiscal Years 2008-10, NSF 12-308 (April 2012). Congressional Research Service 29 Energy and Water Development: FY2013 Appropriations Table 11. Science ($ millions) FY2012 Approp. FY2013 Request House Senate Basic Energy Sciences $1,688.1 $1,799.6 $1,657.1 $1,712.1 High Energy Physics 790.9 776.5 776.5 781.5 Biological and Environmental Research 609.6 625.3 542.0 625.3 Nuclear Physics 547.4 526.9 547.9 539.9 Advanced Scientific Computing Research 440.9 455.6 442.0 455.6 Fusion Energy Sciences 401.0 398.3 474.6 398.3 Science Program Direction 185.0 202.6 185.0 190.0 Science Laboratories Infrastructure 111.8 117.8 112.3 117.8 Safeguards and Security 80.6 84.0 82.0 83.0 Workforce Development for Teachers and Scientists 18.5 14.5 14.5 14.5 Use/Rescission of Prior-Year Balances — (9.1) (32.6) (9.1) 4,873.6 4,992.1 4,801.4 4,909.0 Program Total Conf. Source: FY2013 budget request, draft House committee report, S.Rept. 112-164. The Administration’s stated goal is to double the funding of the Office of Science.45 This continues a plan initiated by the Bush Administration in January 2006. The original target under both Administrations was to achieve the doubling goal in the decade from FY2006 to FY2016. The Administration’s current policy no longer specifies a completion date. The FY2013 request is 37% more than the FY2006 baseline. The House and Senate committee recommendations are respectively 32% and 35% more than the baseline. The request for the largest Office of Science program, basic energy sciences, is $1.800 billion. This would be an increase of $111 million from FY2012 and accounts for nearly the entire increase requested for the Science account. The increase would fund science in support of clean energy, such as combustion research to improve simulation of advanced engines; research on materials and chemistry by design; and jointly funded R&D with the Office of Energy Efficiency and Renewable Energy. The request would also support increased utilization of existing scientific user facilities and the start of construction of the Linac Coherent Light Source-II, a new highenergy x-ray source. The House committee recommended $1.657 billion, including $33 million less than the request for facility operations, $20 million less than the request for energy frontier research centers, $76 million less than the request for other research activities, and $14 million less than the request for construction projects. The Senate committee recommended $1.712 billion, including $88 million less than the request for research activities but the full requested amount for construction. Both committee reports directed DOE not to engage the energy frontier research centers in joint work with the Office of Energy Efficiency and Renewable Energy; they stated that DOE had not adequately justified this proposal. 45 For more information, see CRS Report R41951, An Analysis of Efforts to Double Federal Funding for Physical Sciences and Engineering Research, by (name redacted) Congressional Research Service 30 Energy and Water Development: FY2013 Appropriations For high-energy physics, the request is $777 million, a decrease of $14 million from FY2012. Nonaccelerator physics projects would increase $12 million, in part to support engineering and design work on the Large-Scale Synoptic Telescope, a joint activity with the National Science Foundation. This increase would be more than offset, however, by reductions elsewhere in the program. Facilities funding at Fermilab would decrease $13 million because of a planned shutdown to perform accelerator upgrades. Accelerator development would decrease $23 million because of the completion of R&D on the International Linear Collider. Construction of the Long Baseline Neutrino Experiment (LBNE) would not be funded. The House committee recommended $16 million for LBNE, offset by a reduction of $16 million in other activities. The Senate committee also recommended $16 million for LBNE, partially offset by a reduction of $11 million for other activities. The request for biological and environmental research is $625 million, an increase of $16 million from FY2012. Most of the increase ($12 million) would be for terrestrial ecosystem science. Funding for radiobiology would decrease $5 million. The House committee recommended $542 million and expressed support for the program’s activities in biological systems science without mentioning its activities in climate and environmental sciences. The Senate committee recommended the requested amount. For nuclear physics, the request is $527 million, down $20 million from FY2012. Funding for continued construction of an upgrade at the Continuous Electron Beam Accelerator Facility (CEBAF) would decrease $9 million. Utilization of existing nuclear physics user facilities would decrease: the Relativistic Heavy Ion Collider (RHIC) from 58% to 33%, and the Argonne Tandem Linac Accelerator System (ATLAS) from 95% to 80%. The House committee recommended $21 million more than the request to support facility operations and maintenance. The Senate committee recommended $13 million more than the request for the same purpose. The request for advanced scientific computing research is $456 million, an increase of $15 million. Research funding would increase by $28 million, while facilities funding would decrease by $13 million. The House committee recommended $442 million and expressed concern that DOE had not yet provided a long-term plan for exascale computing that was mandated by prior appropriations reports. The Senate committee recommended the requested amount. The request for fusion energy sciences is $398 million, a decrease of $3 million. The proposed U.S. contribution to the International Thermonuclear Experimental Reactor (ITER), a fusion research facility currently under construction in France, is $150 million, an increase of $45 million. As a consequence, funding for domestic fusion activities would decrease by $48 million. Among the affected domestic activities, the Alcator C-Mod fusion reactor would be permanently shut down. Policymakers and fusion researchers have long been concerned about the impact of ITER’s funding needs on the availability of resources for the domestic fusion program. The House committee recommended $475 million, including $28 million more than the request for ITER and $48 million more than the request for the domestic program. The Senate committee recommended the requested amount. Congressional Research Service 31 Energy and Water Development: FY2013 Appropriations ARPA-E46 The Advanced Research Projects Agency–Energy (ARPA-E) was authorized by the America COMPETES Act (P.L. 110-69) to support transformational energy technology research projects. It received its first funding in FY2009, mostly through the American Recovery and Reinvestment Act of 2009 (P.L. 111-5), and announced its first round of contract awards in October 2009. DOE budget documents describe ARPA-E’s mission as overcoming long-term, high-risk technological barriers to the development of energy technologies. The request for ARPA-E in FY2013 is $350 million, an increase of $75 million from FY2012. The House committee recommended $200 million. The Senate committee recommended $312 million, which it noted is the amount authorized by the America COMPETES Reauthorization Act of 2010 (P.L. 111-358). Nuclear Waste Disposal47 The Administration’s FY2013 budget includes no funding for DOE’s Office of Civilian Radioactive Waste Management (OCRWM), which was established by the Nuclear Waste Policy Act of 1982 (NWPA, 42 U.S.C. 10101 et seq.) to dispose of highly radioactive waste from nuclear power plants and defense facilities. OCRWM had been developing a permanent nuclear waste repository at Yucca Mountain, NV, as specified by an NWPA amendment in 1987. Funding for OCWRM ended after FY2010, so the office has been closed and activities at the Yucca Mountain site halted. The Obama Administration “has determined that developing the Yucca Mountain repository is not a workable option and the Nation needs a different solution for nuclear waste disposal,” according to the DOE FY2011 budget justification. To develop alternative waste management strategies, the Administration established the Blue Ribbon Commission on America’s Nuclear Future, which issued its final report to the Secretary of Energy on January 26, 2012.48 The Blue Ribbon Commission recommended that future efforts to develop nuclear waste facilities follow a “consent based” approach. The House Appropriations Committee sharply criticized the Administration’s nuclear waste policy and provided $25 million for FY2013 to resume work on the Yucca Mountain repository. The Senate Committee included language (§312) authorizing a pilot program to demonstrate one or more consolidated interim storage facilities for spent nuclear fuel and high level waste. Any proposed storage site would require the consent of the affected state governor, local government of jurisdiction, affected Indian tribes, and Congress. The Senate panel directed DOE to use $2 million of its program direction funding for the pilot program, along with $17.7 million in unobligated prior-year appropriations from the Nuclear Waste Fund. DOE had filed a license application with the Nuclear Regulatory Commission (NRC) for the proposed Yucca Mountain repository in June 2008 but filed a motion to withdraw the application on March 3, 2010. An NRC licensing panel rejected DOE’s withdrawal motion June 29, 2010, on the grounds that NWPA requires full consideration of the license application by NRC. The full NRC Commission deadlocked on the issue September 9, 2011, leaving the licensing panel’s 46 This section was prepared by (name redacted). This section was prepared by (name redacted). 48 Blue Ribbon Commission on America’s Nuclear Future, Report to the Secretary of Energy, January 2012, http://brc.gov/sites/default/files/documents/brc_finalreport_jan2012.pdf. 47 Congressional Research Service 32 Energy and Water Development: FY2013 Appropriations decision in place and prohibiting DOE from withdrawing the Yucca Mountain application. However, the commission ordered at the same time that the licensing process be halted because of “budgetary limitations.”49 No funding was provided in FY2012 or requested for FY2013 to continue Yucca Mountain licensing activities, although the issue is currently the subject of a federal appeals court case.50 The final report of the Blue Ribbon Commission on America’s Nuclear Future recommended options for temporary storage, treatment, and permanent disposal of highly radioactive nuclear waste, along with an evaluation of nuclear waste research and development programs and the need for legislation. It did not recommend specific sites for new nuclear waste facilities or evaluate the suitability of Yucca Mountain. The commission’s proposed “consent-based” approach called for the roles of local, state, and tribal governments to be negotiated for each potential site. The development of consolidated waste storage and disposal facilities should begin as soon as possible, the commission urged. A new waste management organization should be established to develop the repository, along with associated transportation and storage systems, according to the commission. The new organization should have “assured access” to the Nuclear Waste Fund, which holds fees collected from nuclear power plant operators to pay for waste disposal. Under NWPA, DOE could not spend those funds without congressional appropriations. DOE’s Office of Nuclear Energy (NE) has taken over the remaining functions of OCRWM and will “lead all future waste management activities,” according to the FY2011 budget justification. Substantial funding has been requested for NE to conduct research on nuclear waste disposal technologies and to respond to the recommendations of the Blue Ribbon Commission (see “Nuclear Energy” section above for more details). The House Appropriations Committee noted that many of the Blue Ribbon Commission’s recommendations would require changes in law to implement and cautioned the Administration against efforts to “unilaterally develop or implement policy” on nuclear waste management. The Senate panel directed DOE to implement the waste storage pilot program in its bill “consistent with the recommendations in the Blue Ribbon Commission’s final report.” NWPA required DOE to begin taking waste from nuclear plant sites by January 31, 1998. Nuclear utilities, upset over DOE’s failure to meet that deadline, have won two federal court decisions upholding the department’s obligation to meet the deadline and to compensate utilities for any resulting damages. Utilities have also won several cases in the U.S. Court of Federal Claims. DOE estimates that liability payments would eventually exceed $20 billion if DOE were to begin removing waste from reactor sites by 2020, the previous target for opening Yucca Mountain.51 (For more information, see CRS Report R42513, U.S. Spent Nuclear Fuel Storage, by (name redacted); CRS Report RL33461, Civilian Nuclear Waste Disposal, by (name redacted); and CRS Report R40996, Contract Liability Arising from the Nuclear Waste Policy Act (NWPA) of 1982, by (name redacted).) 49 Nuclear Regulatory Commission, “In the Matter of U.S. Department of Energy (High-Level Waste Repository),” CLI-11-07, September 9, 2011, http://www.nrc.gov/reading-rm/doc-collections/commission/orders/2011/201107cli.pdf. 50 U.S. Circuit Court of Appeals for the District of Columbia Circuit, USCA Case #11-1271, Yucca Mountain Reply Brief of Petitioners Mandamus Action, February 13, 2012, http://www.naruc.org/policy.cfm?c=filings. 51 Ibid., p. 80. Congressional Research Service 33 Energy and Water Development: FY2013 Appropriations Loan Guarantees and Direct Loans52 DOE’s Loan Programs Office provides loan guarantees for projects that deploy specified energy technologies, as authorized by Title XVII of the Energy Policy Act of 2005 (EPACT05, P.L. 10958), and direct loans for advanced vehicle manufacturing technologies. No funding for additional loans and loan guarantees was requested for FY2013. However, $38 million for loan guarantee administrative expenses would be offset by fees, and $9 million was requested for administrative expenses for the vehicle manufacturing loan program, an increase of $3 million over FY2012. The House and Senate Appropriations Committees approved the $38 million request for the loan guarantee program. The House panel cut the vehicle manufacturing request to $6 million, while the Senate panel approved the full request. Two major loan guarantee programs are currently conducted by the DOE Loan Programs Office: • Section 1703 innovative clean energy technology loan guarantees. Loan guarantees are provided for “new or significantly improved technologies,” as compared to existing commercial technologies, that “avoid, reduce, or sequester” air pollutants and greenhouse gas emissions. Eligible technology categories include renewable energy, advanced fossil energy, advanced nuclear energy, energy efficiency, and pollution control. • Section 1705 renewable energy, electric transmission, and advanced biofuels loan guarantees. Established by Section 406 of the American Recovery and Reinvestment Act (ARRA, P.L. P.L. 111-5), the Section 1705 program was designed as a temporary economic stimulus measure available through the end of FY2011. Unlike the Section 1703 program, which is limited to innovative technologies, loan guarantees are available to already-commercialized renewable energy and electric transmission technologies. Title XVII allows DOE to provide loan guarantees for up to 80% of construction costs for eligible energy projects. Under such loan guarantee agreements, the federal government would repay all covered loans if the borrower defaulted. This would reduce the risk to lenders and allow them to provide financing at below-market interest rates. DOE currently has two conditional loan guarantee commitments pending under Section 1703, totaling $10.33 billion for nuclear power and nuclear fuel projects. Under Section 1705, final loan guarantees have been issued for 26 projects, totaling $16 billion.53 DOE issued final rules for the program October 4, 2007.54 DOE’s proposed loan guarantee rules, published May 16, 2007, had faced sharp criticism for limiting the guarantees to 90% of a project’s debt. The affected industries contended that EPACT05 allows all of a project’s debt to be covered, as long as debt does not exceed 80% of total construction costs. In its explanation of the proposed rules, DOE expressed concern that guaranteeing 100% of a project’s debt could reduce lenders’ incentive to perform adequate due diligence and therefore increase default risks. 52 This section was prepared by (name redacted). For more details on loan guarantees, see CRS Report R42152, Loan Guarantees for Clean Energy Technologies: Goals, Concerns, and Policy Options, by (name redacted). 53 U.S. Department of Energy Loan Programs Office, “The Financing Force Behind America’s Clean Energy Economy,” https://lpo.energy.gov/?page_id=45. For a critique of the loan guarantee process, see U.S. Government Accountability Office, DOE Loan Guarantees: Further Actions Are Needed to Improve Tracking and Review of Applications, GAO-12-157, March 2012, http://www.gao.gov/products/GAO-12-157. 54 Published October 23, 2007 (72 Federal Register 60116). Congressional Research Service 34 Energy and Water Development: FY2013 Appropriations In the final rule, however, DOE agreed to guarantee up to 100% of debt, but only for loans issued by the Federal Financing Bank. DOE’s first loan guarantee under Section 1705 was issued in September 2009 to Solyndra Inc., a manufacturer of photovoltaic equipment. Solyndra’s bankruptcy announcement on August 31, 2011, prompted strong congressional criticism of the Administration’s management of the loan guarantee program.55 Solyndra’s DOE loan guarantee totaled $535 million, and the company’s bankruptcy placed most or all of that amount at risk. (For details, see CRS Report R42058, Market Dynamics That May Have Contributed to Solyndra’s Bankruptcy, by (name redacted).) Subsidy Costs Title XVII requires the estimated future government costs resulting from defaults on guaranteed loans to be covered up-front by appropriations or by payments from project sponsors (borrowers). These “subsidy costs” are calculated as the present value of the average possible future net costs to the government for each loan guarantee, on a case-by-case basis. If those calculations are accurate, the subsidy cost payments for all the guaranteed projects together should cover the future costs of the program. However, the Congressional Budget Office has predicted that the upfront subsidy cost payments will prove too low by at least 1% and is scoring bills accordingly.56 As a result, appropriations bills that provide loan guarantee authorizations include an adjustment totaling 1% of the loan guarantee ceiling. Subsidy costs for Section 1703 loan guarantees must usually be paid by project sponsors, because no appropriations for that program were provided before FY2011 (as described below). However, ARRA appropriated $6 billion to cover the subsidy costs of Section 1705 loan guarantees, so subsidy cost payments are not required from project sponsors under that program. The total loan guarantee amounts that could be provided under ARRA depend on the level of subsidy costs that would be charged. For example, if the subsidy costs averaged 10% of the total guaranteed loans, then $6 billion in subsidy cost appropriations would support $60 billion in loan guarantees. However, $2 billion of Section 1705 subsidy cost appropriation was subsequently transferred to the Consumer Assistance to Recycle and Save (“cash for clunkers”) automobile trade-in program by P.L. 111-47, and another $1.5 billion was rescinded to help pay for the Education Jobs and Medicaid Assistance Act (P.L. 111-226), leaving $2.5 billion. Of the $2.5 billion available for subsidy costs, $1.9 billion had been obligated by the end of FY2011.57 Authorized Loan Guarantee Amounts Under the Federal Credit Reform Act (FCRA), federal loan guarantees cannot be provided without an authorized level in an appropriations act or an appropriation for the subsidy costs. Pursuant to FCRA, the FY2007 continuing resolution (P.L. 110-5) established an initial cap of $4 55 Opening Statement of the Honorable Cliff Stearns, Chairman, Subcommittee on Oversight and Investigations. “Solyndra and the DOE Loan Guarantee Program,” September 14, 2011, http://republicans.energycommerce.house.gov/Media/file/Hearings/Oversight/091411/Stearns.pdf. 56 Congressional Budget Office, S. 1321, Energy Savings Act of 2007, CBO Cost Estimate, Washington, DC, June 11, 2007, pp. 7-9, http://www.cbo.gov/ftpdocs/82xx/doc8206/s1321.pdf; and CBO, Fair-Value Accounting for Federal Credit Programs, Issue Brief, March 2012, http://www.cbo.gov/publication/43027. 57 DOE Weekly Financial and Activity Report, September 30, 2011, http://www.recovery.gov/transparency/agency/ reporting/agency_reporting2.aspx?agency_code=89&dt=09/30/2011. Congressional Research Service 35 Energy and Water Development: FY2013 Appropriations billion on loan guarantees under the Section 1703 program, without allocating that amount among the various eligible technologies. The explanatory statement for the FY2008 omnibus funding act (P.L. 110-161) increased the Section 1703 loan guarantee ceiling to $38.5 billion through FY2009, including $18.5 billion specifically for nuclear power plants and $2 billion for uranium enrichment plants.58 The FY2009 Omnibus Appropriations Act (P.L. 111-8) increased DOE’s total loan guarantee authority under Section 1703 to $47 billion, in addition to the $4 billion authorized in FY2007, half of which DOE has designated for uranium enrichment. Of the $47 billion, $18.5 billion continued to be reserved for nuclear power, $18.5 billion was for energy efficiency and renewables, $6 billion was for coal, $2 billion was for carbon capture and sequestration, and $2 billion was for uranium enrichment. The time limits on the Section 1703 loan guarantee authority were eliminated. The FY2011 Department of Defense and Full-Year Continuing Appropriations Act (P.L. 112-10) reduced the previous loan guarantee authority for Section 1703 non-nuclear technologies to $8.3 billion but added new authority for a total of $9.5 billion. Including the $2 billion in FY2007 authority that has not been designated for uranium enrichment, the Section 1703 non-nuclear loan guarantee ceiling stands at about $11.5 billion. Nuclear loan guarantees remain at $18.5 billion, and uranium enrichment totals $4 billion. Unobligated appropriations for subsidy cost payments under the Section 1705 loan guarantee program were no longer available after FY2011, as noted above. However, the FY2011 Continuing Appropriations Act provided $170 million, with no expiration, to pay subsidy costs for renewable energy and efficiency projects under the Section 1703 program. The act also provided authority for up to $1.183 billion in loan guarantees for those renewable energy and efficiency projects, in addition to the $32.8 billion in Section 1703 authority remaining from earlier appropriations acts for all technologies. The additional loan guarantee authority and subsidy cost appropriation provided by the FY2011 Continuing Appropriations Act is available to projects [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR42498. Public record. Not legal advice.