The Obama Administration has long advocated the use of federal funds to promote clean energy technologies. As part of that effort, the Administration has proposed using such funds to support research on and development of clean-vehicle technologies, with a focus on advanced batteries and the other technologies needed for electric and plug-in hybrid-electric vehicles. The Administration’s commitment to those programmes remains strong despite pressure to reduce federal spending and budget deficits.
That commitment was clear in President Obama’s US$3.083tn budget request for fiscal year (FY) 2013, which begins in October. In the budget, President Obama requests a 5% increase in federal spending on non-defence research and development that, while relatively small, is noteworthy because it comes at a time of intense fiscal pressures. The R&D proposal focuses on such White House priorities as clean energy, including advanced vehicle technologies.
The Obama Administration has long advocated the use of federal funds to promote clean energy technologies. As part of that effort, the Administration has proposed using such funds to support research on and development of clean-vehicle technologies.
Obama requests US$6.7bn for clean energy R&D, demonstration, and deployment projects, a 13% increase from FY 2012. The request includes a 29.1% increase to US$2.3bn in funding for Department of Energy (DOE) energy-efficiency and renewable energy programmes to support R&D related to biomass, geothermal, solar, wind, and other alternative energy technologies. The budget would cut spending on fuel cell and hydrogen technology – which the White House sees as more of a long-term technology option – though Congress in the past has balked at proposed cuts in those programmes.
The Vehicle Technologies Program at DOE does well in the Obama budget, which requests a 27.7% funding increase to US$420m. Spending to support advanced battery and electric drive technology R&D would increase by 73% as part of Obama’s continued focus on vehicle electrification. The budget highlights plans to support cooperative R&D with the automotive industry on electrochemical energy storage, power electronics, electric motors, electric traction drive, advanced combustion engines, and lightweight and propulsion materials.
Additional funding for advanced vehicle technologies R&D may come through the Advanced Research Projects Agency-Energy (ARPA-E), which supports research on “transformational” energy technologies. The budget also proposes an increase in the Department of Transportation’s “connected vehicle” programmes and intelligent transportation system R&D – although that is premised on Congress finally passing the long-delayed re-authorisation of federal transportation programmes.
The budget notably does not request further loan authority or credit subsidies for DOE’s renewable-energy loan guarantee programmes, which are under intense scrutiny due to the bankruptcy of solar-energy firm Solyndra after it received a US$535m DOE loan guarantee. The loan guarantee programmes – some of which target automotive technologies – have made little progress in fulfilling even their already-existing commitments since the Solyndra scandal broke last year. DOE is only now finalising a plan to do so.
The outlook for Obama’s clean-energy proposals is mixed: many face strong resistance in Congress and the Solyndra scandal poses serious problems for DOE’s loan-guarantee programmes.
The Obama budget as a whole was “dead on arrival” in the US Congress, and has already been overwhelmingly defeated in the House of Representatives. Despite that, the R&D requests made by DOE and other agencies will help shape federal spending priorities for the coming year (or beyond, depending on the outcome of the November 2012 US elections).
The outlook for Obama’s clean-energy proposals is mixed: many face strong resistance in Congress and the Solyndra scandal poses serious problems for DOE’s loan-guarantee programmes. But bipartisan and industry support for DOE’s Vehicle Technologies Program should protect it from major cuts – though the proposed increase in the programme’s budget is much more uncertain. Thus while all federal agencies are under intense pressure to reduce spending, the White House appears committed to maintaining federal support for efforts to develop advanced vehicle technologies.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Ian C. Graig, chief executive of Global Policy Group, Inc., has written in the past in AutomotiveWorld.com on a wide variety of US policy trends and their implications for the automotive industry. Global Policy Group is a Washington-based research and government relations consultancy whose clients include leading US, European, and Japanese firms in the automotive, energy, utility, information technology, and financial services sectors. For more information, visit www.globalpolicy.com or contact Ian Graig directly at ian.graig@globalpolicy.com.
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