published Sunday, February 13th, 2011

Energy budget calls for cuts in programs, closing facilities

WASHINGTON -- The Obama administration will propose significantly cutting fossil fuel research and closing two facilities, Energy Secretary Steven Chu said Friday.

"Fiscal responsibility demands shared sacrifice -- it means cutting programs we would not cut in better fiscal times," he wrote in a blog post Friday outlining the cuts, as well as a big increase for clean energy, that will be proposed in next year's budget.

Chu said the budget proposal, which will be released Monday, would cut the Office of Fossil Energy by 45 percent, or $418 million. That includes eliminating the Fuels Program, the Fuel Cells Program, the Oil and Gas Research and Development Program and the Unconventional Fossil Technology Program.

The budget would also save $70 million by reducing funding for the hydrogen technology program in the Office of Energy Efficiency and Renewable Energy.

The administration would also end operations at the Tevatron facility at Fermi National Laboratory in Illinois, saving $35 million, and close the Holifield Radioactive Ion Beam Facility at the Oak Ridge National Laboratory in Tennessee, saving $10.3 million. The department made the decision to close that facility in January.

Chu said the budget would also cut DOE corporate management by nearly 13 percent, saving nearly $45 million.

He did not say how much of an increase or decrease the administration would seek for the overall DOE budget, and a spokeswoman declined to provide that information Friday.

Following up on President Barack Obama's State of the Union call for the nation to get 80 percent of its electricity from clean sources by 2035, Chu said the budget would include over $8 billion for research, development and deployment investments in clean energy technology programs. A White House fact sheet last month said that represents a one-third increase.

Obama, in that speech, also called for eliminating billions in tax breaks to oil companies, and Chu said the administration will propose repealing several tax preferences for fossil fuels. Chu said those repeals, which are not part of the DOE budget, would save $3.6 billion next year and $46.2 billion over 10 years.

The cuts and increases, which were first reported by National Journal, are only proposed; any changes would have to be approved by Congress.

Another energy program not part of the DOE budget, the Low-Income Home Energy Assistance Program, would be cut in half -- by about $2.5 billion, two people familiar with the budget proposal told The Associated Press this week. That program provides home heating aid program for the poor.

Bill Wicker, a spokesman for the Senate energy committee chairman, Jeff Bingaman, D-N.M., said that "some of the cuts DOE is proposing seem sensible to us, others we do not quite understand." He said that the committee will ask Chu about the latter ones at a budget hearing next week.

Rep. Fred Upton, R-Mich., who chairs the House energy committee, had no immediate comment.

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