The Department of Energy's budget might be targeted for near-total elimination.
The opening weeks of Donald Trump’s presidency have been a storm of activity. He has released controversial executive orders on everything from immigration to drug trafficking, and faced near-unrelenting scrutiny on the bureaucratic infighting and security concerns that have dogged his young administration. Amidst all this turmoil, it is easy to forget that there is a budget process moving slowly forward in Congress that will be far more consequential for achieving his policy goals than any executive order. Voters who expected Trump to prioritize revitalized manufacturing may be disappointed, though, as his opening proposals will stymie progress toward the critical jobs of the 21st century: developing, manufacturing, and installing renewable energy.
President Trump’s proposals draw heavily on a blueprint from the Heritage Foundation, a conservative, Washington-based think tank, and promise steep cuts over the next decade to more or less everything outside the national defense. The Department of Energy, for example, is targeted for near-total elimination. Energy isn’t a department that makes the news very often, but its role extends far beyond guarding the US nuclear arsenal. Basic and applied research funded through the department or conducted at US national labs drives clean energy innovation, and commercialization projects help ensure that technology makes it out of the lab and into the real economy where it fuels prosperity and job creation.
The Department of Energy is the largest source of federal funding for basic research in the physical sciences, supporting the work of 22,000 researchers at seventeen national labs and some 300 universities across the country. This funding supports the development of new energy sources, technologies to make fossil fuel use cleaner and safer for the environment, and a variety of other innovations in environmental science, physics, math, and engineering. Money invested in basic research, however, only goes so far. To have a transformative impact on the economy, discoveries must make the leap to the real world, and that’s where things get truly difficult.
New technologies face a host of challenges in being adopted by the market. They may require new infrastructure, such as charging stations for electric vehicles or upgrades to the electrical grid to handle fluctuating sources of renewable power. Like all new products, they will certainly start at an economic disadvantage relative to established, mature technologies. Venture capital often shies away from backing transformative energy innovation, wary of the scale of the risk. Clean energy companies call this gap—between scientific discovery and sustainable profit—the valley of death.
President Obama’s Department of Energy tackled this problem head-on. The Program on Energy Efficiency and Renewable Energy (EERE) became a clean technology incubator, stepping in to the Valley of Death with essential funding for applied research and commercialization. In the last few years, it has helped bring down the cost of lithium ion batteries and cellulosic ethanol, and supported the establishment of the country’s first offshore wind farms. Since 2011, the Better Buildings Challenge, an energy efficiency initiative sponsored by EERE, has saved participating buildings more than $1.3 billion. The Advanced Research Projects Agency—Energy (ARPA-E), meanwhile, supports potentially transformative energy technologies with early-stage funding to get them off the ground. Since 2009, ARPA-E has launched more than 200 projects that went on to secure more than $1 billion in private sector funding.
Under the Heritage Foundation’s blueprint, however, basic research through the national labs would be crippled. Their remits would be tightened substantially, to include only that basic research which was relevant to national security and which could not be undertaken by the private sector. In 2015, the Department of Energy devoted more than $5 billion to basic research through the national labs and other partners. The odds are vanishingly small that the states or the private sector could or would make up that annual level of funding for research—particularly for research without an obvious, immediate commercial application. ARPA-E, EERE, and other applied research programs would be eliminated entirely, closing off a valuable source of funding to help new technologies into the market.
It remains to be seen whether president Trump’s budget submission ultimately follows the blueprint laid out by the Heritage Foundation. His budget director, Mick Mulvaney, has previously supported similar budgets, but Congressional Democrats will have a vote, too, and they are unlikely to support such a plan. Nonetheless, it seems probable that the president’s proposals will not be supportive of clean energy development, and that will have substantial costs.
Those costs will be immediate, of course, for the 22,000 researchers employed in the national labs or funded through Department of Energy grants, and for the companies supported by EERE or ARPA-E. But it will have even more serious effects for the future of clean energy development and manufacturing in the United States. Building and installing the power sources of the future will create manufacturing and manual jobs across the country, aiding one of the Trump administration’s core constituencies and setting the United States on the path to a cleaner and more energy-secure future. If Trump is serious about revitalizing American manufacturing, he needs to re-evaluate his energy policies now.
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