President Obama has proposed creating an "Energy Security Trust" with a portion of royalties from offshore oil and gas extraction. It would be used to fund research and development of alternative energy in the transportation sector. The ultimate goal is to reduce our reliance on oil. He promoted the idea in his State-of-the-Union address as well as his weekly radio address on March 16.
A key part of that plan, according to the White House, is the creation of an "Energy Security Trust," in which some offshore drilling royalties would be steered into development of technologies that help curb reliance on oil for transportation.
The money – $2 billion over a decade – would support research into advancing technology around electric vehicles, biofuels, fuel cells, and natural gas-powered vehicles, according to the White House.
Using those funds, via the new energy trust, would allow Washington to "support American ingenuity without adding a dime to our deficit."
The Hill, March 16, article by Carlo Munoz
It sounds like a reasonable idea. In an era of tight budgets and crazy Republicans, funding alternative energy research and development is going to be difficult.
Here is what does not make any sense, particularly in the context of the Energy Security Trust proposal. The Government Accountability Office released a report on March 15 that documented $51 billion in unspent funds allocated to the Department of Energy. Most of the money is for renewable energy and "Advanced Technology Vehicles Manufacturing" (ATVM) loans.
The letter to the House and Senate Appropriations Committee from the GAO outlines the program funds in question.
The Department of Energy’s (DOE) Loan Guarantee Program (LGP) for innovative energy projects was established in Title XVII of the Energy Policy Act of 2005 to encourage early commercial use of new or significantly improved technologies in energy projects. The act—specifically section 1703—originally authorized DOE to guarantee loans for projects that (1) use new or significantly improved technologies as compared with commercial technologies already in service in the United States and (2) avoid, reduce, or sequester emissions of air pollutants or man-made greenhouse gases. Subsequently, in December 2007, Congress enacted the Energy Independence and Security Act (EISA), which made the nation’s corporate average fuel economy standards for newly manufactured passenger vehicles more stringent by requiring significant increases in the fuel economy of the vehicles being sold in the United States by 2020. In addition, EISA established the Advanced Technology Vehicles Manufacturing (ATVM) loan program, which provides loans for projects to produce more fuel-efficient passenger vehicles and their components.
Here is a breakdown of the unspent funds:
In the January and February performance audit conducted by the GAO, the agency reported that the DOE is in the midst of using $15.1 million of the $34.8 billion remaining funds for the renewable energy project loans, saying it had 13 “active” applicants in the process. The credit subsidy – which goes to cover the administrative costs to issue the loans – would be used to complete the process, DOE officials told the oversight body.
DOE also said that, as of Jan. 29, it was not “actively” considering any applications for the as not actively considering any applications for ATVM, of fuel-efficiency technology, loans – which leaves $16.6 billion in loan appropriations on the table.
The department noted that it had received seven applications for the program – which would requested a total of $1.48 billion in loans – but they chose not to proceed because of the companies having “insufficient equity or technology that is not ready,” GAO told lawmakers. DOE officials say that even though the department will still continue to receive applications, it does not plan to use the rest of its appropriated funds, which do not have an expiration date.
The Hill, March 15, article by Megan Wilson
If I understand this correctly, the Department of Energy has $16.6 billion earmarked for the development and manufacturing of advanced technology vehicles, but has no plans to use the funds. Meanwhile, the administration wants to divert $2 billion from oil and gas royalty payments to create the Energy Security Trust to fund alternative technology vehicle research and development.
The reaction of the crazy caucus to the Energy Security Trust idea was predictable. They will go along with it if and only if oil and gas companies are given carte blanche to drill anywhere and everywhere they damn well please.
On Friday, House Republicans doubted the viability of the president's clean energy strategy if expanded drilling is not part of the equation.
“For this proposal to even be plausible, oil and gas leasing on federal land would need to increase dramatically," according to Brendan Buck, a spokesman for Speaker John Boehner (R-Ohio).
The Hill, March 16, article by Carlo Munoz
I see two problems. First, this fosters a narrative that vehicles using little or no oil are not ready for prime time (hence the unspent Department of Energy funds in the ATVM loan program), not to mention the hoopla to create the Energy Security Trust to fund research and development. Meanwhile, the Energy Security Trust idea has given the
drill, baby, drill crowd a bargaining chip to demand expansion of drilling on federal lands. Idiots 2, Climate 0.
It feels like fiddling while the planet overheats by people smart enough to know better.
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