Chairman Bingaman on DOE Budget

”Today’s hearing will examine the President’s budget proposal for the Department of Energy for fiscal year 2009. I would like to welcome our witness, Secretary of Energy Samuel Bodman.

“The President’s energy budget proposal has some meritorious aspects and some problematic ones.

“On the positive side, the overall budget of the Department is increasing, in a year in which several other federal agencies, like the Forest Service, are slated for steep and damaging cuts. Within the Department, there are a number of well-run programs that are proposed for strong increases.

· I think all of us here will generally support the commitment the budget shows to basic research in the Office of Science. We need that strong commitment to keep our national globally competitive in science and engineering, as Congress called for in the bipartisan America COMPETES Act that the President signed last year. These programs did not fare well in the omnibus spending bill Congress passed at the end of the last year, and I appreciate the impact analysis of these problems that you sent to my office earlier this week. We have an important job to do to try to ameliorate these problems in this fiscal year.

· The budget proposal also gives strong support for biofuels, advanced hybrid batteries, solar and geothermal energy to diversify our energy portfolio. In the case of geothermal energy, I’m pleased that the Administration listened to and worked with Congress to define a new profile for that program in the recent energy bill, and then came through with a good funding proposal in this budget request.

“That said, the new budget proposal has a number of specific proposals for cuts that are very difficult to square with sound energy policy. Let me identify three of them now, and we can talk about them more in the question period.

“First, I am concerned about the proposed 27 percent decline from the current funding levels for the Office of Energy Efficiency and Renewable Energy. I had hoped that the Department would have taken the strong support by the Congress for this Office to put forward an equally strong request, but that does not appear to be the case. A big part of the budget decline in this Office is due to the decision to eliminate the DOE Weatherization Assistance Program. That looks pretty wrongheaded to me. The Weatherization Assistance Program is a valuable and successful program. The type of activities it funds are viewed by outside experts as being some of the most cost-effective ways of improving national energy efficiency. Cutting funding for this important program is particularly hard to understand when heating oil prices have almost doubled since 2003, propane is up 75%, natural gas up by 50% and electricity is 21% more expensive.

“Second, I am concerned that the costs of expanding the Strategic Petroleum Reserve outweigh the benefits. In this budget, the Administration is proposing to spend $584 million to buy millions of barrels of crude oil and take them off the market. It seems odd to be spending a half-billion taxpayer dollars on an activity that will help keep oil prices high. When Congress passed the Energy Policy Act of 2005, we included specific language that any filling of the SPR avoid excessive cost and minimize expense. I do not understand why you would continue to take crude oil off the market, when according to the Department of Energy’s Energy Information Administration; crude oil prices over the next few years will be lower than they are today.

“Finally, I would like to hear more the Department’s rationale for changing programmatic direction on FutureGen. We need to have a clear path forward for advanced coal technologies and carbon capture and storage associated with such plants, and while the FutureGen project may certainly have its flaws, the question is whether we have something better to take its place or not.

“Mr. Secretary, thank you for appearing today. I look forward to hearing your testimony.”

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