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What’s in Obama’s Budget for High-Tech & Clean Energy?

Continuing his defense of the fiscal 2012 budget, US president Barack Obama said the country must make some tough choices in the year ahead, including cutting some programs, freezing some spending, and focusing on economic areas that would help keep the nation competitive.

The high-tech sector qualified as one of the critical areas the president believes would require additional investment in because of the increasingly competitive environment American companies and employees operate in and the need to maintain an environment that sets the country apart in specific economic and manufacturing sectors.

One area of interest for the president is energy, hence the US Energy Department's $29.5 billion budget proposal, which includes spending on energy efficiency and energy renewal programs; clean energy technology; and $5.4 billion for scientific computing, biological, and environmental sciences. The government will also be offering $36 billion in loan guarantees for the nuclear energy industry.

“In an increasingly competitive world in which jobs and businesses are mobile, we have a responsibility to invest in those things that are absolutely critical to preparing our people and our nation for the economic competition of our time,” Obama said in a prepared speech. “We do this by investing in and reforming education and job training so that all Americans have the skills necessary to compete in the global economy.”

Obama today continued to advocate for his program and held a conference call to discuss the various elements of the budget:

Some highlights of the president's budget request for the Energy Department include:

  • $3.2 billion for energy efficiency and renewable energy programs.
  • Promoting renewable energy and energy efficient projects with $300 million in credit subsidies to support approximately $3 billion to $4 billion in projects.
  • $36 billion in loan guarantee authority to help jumpstart the domestic nuclear industry, as well as additional investments in the research and development of advanced nuclear technologies, including small modular reactors. Combined with existing authority, the additional loan guarantee authority will support 6 to 8 nuclear power projects, which will result in the construction of anywhere from 9 to 13 new reactors.
  • $5.4 billion for the Office of Science to expand our investment in basic energy sciences, advanced scientific computing and biological and environmental sciences.
  • $550 million for the Advanced Research Projects Agency-Energy (ARPA-E) to continue support for the promising early-stage research projects that could deliver game-changing clean energy technologies.
  • $146 million to support the three existing Energy Innovation Hubs and to establish three new Hubs in the areas of batteries and energy storage; smart grid technologies and systems; and critical materials.
  • $100 million to continue supporting 46 Energy Frontier Research Centers started in 2009.
  • A five-year fiscal 2012 to fiscal 2016 request of nearly $65 billion for the National Nuclear Security Administration.
  • To support the President's goal of securing all vulnerable nuclear material around the world in four years, the budget invests $2.5 billion in the NNSA Defense Nuclear Nonproliferation program. This is part of a five-year, $14.2 billion commitment for the program.

15 comments on “What’s in Obama’s Budget for High-Tech & Clean Energy?

  1. Parser
    February 16, 2011

    In the reality of the economical crisis Obama’s plan seems to be very thoughtful and very balanced. Republicans will have a different opinion the cuts will be divided differently. The net result is at present unknown and we have to wait for the partisan battle in next couple of months. 

  2. Barbara Jorgensen
    February 16, 2011

    It is going to be painful to see the allies of fossil fuels nip away at the budget allocations for green energy; or the proponents of green energy fight about the most viable technology. On one hand, democracy is a great thing and those fights should be fought. On the other hand, self-interest is what really fuels many of these debates. If the administration really believes in making tough choices, they have to start with where the government cuts back.

  3. SP
    February 17, 2011

    Mr Obama is a very good speaker. His speeches are very motivating. I wanted to see what's there for high tech sector in this budget.

  4. Mr. Roques
    February 17, 2011

    Have all those efforts (in previous years) resulted in good discoveries? I'm sure the private sector is a lot more efficient. Are those funds destined to be used by any sector? 

  5. Parser
    February 17, 2011

    A short answer to your first question is: No. Discoveries by definition are discoveries and cannot be predicted.

    Private sector seldom does basic scientific research unless founded by grants from government (quite often from the DoD with the famous DARPA program).

    A brief answer to your second question is: Yes. The government has very few research facilities on their own example NASA. All other grants, loans and tax write offs are going to private companies example High Speed Rail.

     

  6. elctrnx_lyf
    February 19, 2011

    Everything seems to be in the energy like green energy and nuclear energy. But what is there for the high tech industries like telecom, networking and semiconductor comapnies. There is a necessity of lot of money to encourage more research in these areas also.

  7. Clairvoyant
    February 19, 2011

    I agree with the US government putting money into green energy. In my opinion this is one of the main sectors the world needs to be putting more effort on. Oil prices continue to rise, resources are being used up in the world, and we need more sustainable ways to create energy as the world becomes more and more dependent on energy.

  8. stochastic excursion
    February 19, 2011

    One of the main points Obama was attempting to make in the press conference was that sectors that are already profitable should not get additional breaks.  Here's where one of the main areas of contention in this budget I think will be, where green energy funding encroaches on the profits of well-established fossil fuel markets, will this funding in combination with the absence of new tax cuts and loopholes for fossil fuels industries gain much ground?  IMHO the government should fund initiatives where the market isn't strong, but where there is informed consensus that the growth of a market in a particular area would lead to broadly positive outcome.  Where the market is strong, especially in sectors that depend on extracting natural resources (i.e. fossil fuels), this is where the government can claim a share of the revenue.  When I hear people who are looking for government funds I think of the words of the late great Paul Tsongas, who was the junior senator from Massachusetts before Kerry came along: before you start worrying about distributing the golden eggs, it's wise to think about the health of the goose.

  9. hwong
    February 24, 2011

    eltlrnx –

    The reason that Obama focuses on the green energy vs. high tech is that without government support, nobody would ever invest money into technologies like solar photovoltaic modules. The ROI is not there. Would you isntall a solar panel for $30,000 to put it up on your rooftop for a savings of your electricity bill for $20 a month?  The answer is probably no. Who in the right mind would do such an investment. That's precisely where government subsidies need to kick in to provide incentives. In Europe they have government policy called “Feed in tariff” or FIT that is designed to encourage the adoption of renewable energy sources by mandating regional electric utilities to pay a premium price for those who generates eligible renewable electricity.

  10. seel225
    February 28, 2011

    I think Obama had made a good decision on budget planning to investing more money on green energy.But he is not fair on IT and Telecom sectors.I think every one should satrt thinkg about energy saving to reduce global warming to save our lives.

  11. Mr. Roques
    March 10, 2011

    While they are not predictable, there must be some stat that shows which indudstry / company / sector is more efficient (mainly: funds vs discoveries). I'm sure private companies are far better in this aspect.

    Thanks for your reply.

  12. itguyphil
    March 10, 2011

    Small business is the engine that runs the country. Within that, private is the oil that greases the engine. any boon for these organizations would definitely help the economy as a whole.

  13. Parser
    March 10, 2011

    This looks like plainly political discussion. Yes, there are all sorts of checks and balances. Government is all of us and if you feel that there is something missing or too much you need to vote and talk with your representatives to fix it.  What I can see is that private investors want a return on investment within few months, maybe few years and for sure within life time. There is nothing wrong with that. Design of Space Shuttle by NASA created massive number of inventions, which are used by private sector. There is also large number of inventions by NASA, which are used in space, on the Moon or Mars. All these will not see private use in next 20 years or more. Astronomical research with Hubble Space, Spitzer Space Telescope and many other satellites brings very little as a return on investment but a lot as a to understand the Universe. Thanks to it we have very good military satellites. If we don’t do space research Russians or Chinese will and within a century they will dominate us.  

  14. Kunmi
    March 21, 2011

    Hi eltlrnx –
    The clean energy that President Obama is advocating is not a bad idea. Someone has to be a facilitator. NASA innovation in which the private investors were involved started from someone. I will advise that the clean energy plan should not be monopolized by the government but should be able to invite private investors to join hands with the government.

    In reference to your example is the solar energy that you mentioned.  Imagine a solar energy panels on our 3 bedrooms /1 bath with $30- $35,000 dollar investments: How many of us could the LTV allow to invest in such if the cost is not reduced. The idea is that within 5 years you will be able to make that money back and repay your loan through the re-distribution of the power that you generated in your house. Good attempt! Who wants to live in a house for ever? Go to Southern Africa and learn how they manage to have small units of Solar panels on the roof of most of their buildings. We always think big, and do big things but not all can afford big stuff.

  15. Mr. Roques
    March 23, 2011

    Indeed, governments don't put ROI very high on the list (although maybe it should start bumping it higher). You can measure ROI several ways, accounting for infinite things. 

    Businesses probably want the actual revenue that will result from that investment but governments might relax the condition so that it includes third-party benefits, etc.

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