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Christopher Paine’s Blog

A Question of Balance

Christopher Paine

Posted February 15, 2011

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Obama’s Department of Energy Budget Request for Fiscal Year 2012

Is Still Top Heavy with Funding for Nuclear Weapons and Nuclear Energy

While the final DOE budget for FY 2011 remains highly uncertain, due to ongoing Republican efforts to impose draconian cuts on the 12% of the federal budget that represents non-military discretionary spending, the overall DOE budget would increase from $26.5 billion (enacted) in FY 10 to $29.5 (requested) for FY 12, a proposed increase of $3 billion.  However, 63% of this overall increase will not go towards US clean energy research and development (R&D) but rather to the DOE’s semi-autonomous National Nuclear Security Administration (NNSA), which manages the US research and manufacturing complex for nuclear weapons and most of the US government’s programs devoted to nuclear non-proliferation.

The 2012 budget request provides $11.8 billion for NNSA, an increase of $1.9 billion (19%) over the $9.9 billion enacted level for FY 10, and amounts to a record level for US spending on nuclear weapons, which is kind of ironic given President Obama’s “vision” of nuclear disarmament in Prague followed by a Nobel Prize for peace. $1.2 billion (63%) of this increase is for the “Weapons Activities” account that funds the US nuclear weapons stockpile and supporting industrial complex, with the rest of the increase going to “defense nuclear nonproliferation” and the naval nuclear propulsion reactor program.  This means that fully 40% of the total requested budget increase for the Department of “Energy” is actually directed at maintaining and improving the US nuclear weapons stockpile rather than researching and deploying clean energy technologies.

While the balance between spending on civil nuclear and renewable energy technologies improves somewhat in the FY 2012 Budget Request, the nuclear budget tilt still carries over into the civilian science and energy research side of the DOE budget, as it has for decades.  For example, at $852 million the Office of Nuclear Energy request for fission reactor development is still almost twice the $457 million requested to advance all forms of solar energy, despite a near doubling of the latter request from the 2010 level. The combined conventional nuclear fission- and fusion-energy research and demonstration budgets total $2.618 billion, an amount that still exceeds by a wide margin the total amount spent on all the major renewable energy technologies combined. 

Still, for the first time in DOE budget history the total sum requested for renewable energy research ($1.066 billion) exceeds the request for DOE’s Office of Nuclear Energy.  The trend, at least, is in the right direction, even if the Obama team continues to misallocate billions of dollars to advanced nuclear energy technologies with only a slender chance of making meaningful near-term contributions to clean energy development and deployment

One area where the Administration continues to go wrong is in renewing its FY 2011 request for an additional $36 billion in additional loan guarantee authority to support construction of new nuclear power plants.  The DOE has still not used up the $18.6 billion in nuclear reactor loan guarantee authority that Congress provided DOE way back in FY 2008.  According to Secretary Chu’s budget presentation the combined $54.5 billion in federal taxpayer-provided loan guarantees “will support 6 to 8 nuclear power projects, which will result in the construction of anywhere from 9 to 13 new reactors.”  The wide range in possible outcomes is an indication of the economic uncertainty that continues to dog the ostensible “renaissance” of the nuclear industry, which after some 60 years of federally-funded development still hinges on taxpayer-supported financial mechanisms, such as federal loan guarantees and tax credits, to someday achieve the hoped-for “bankability” with private investors. Despite the use of the term “loan guarantee,” in reality the massive loans themselves will come directly from the Department of the Treasury’s Federal Financing Bank, and they represent a huge potential liability for taxpayers if the reactor projects get into technical or economic trouble and default on their government loans.

Nuclear versus Renewable Energy Technologies Funding

in Obama’s FY 2012 Request ($ millions)




Nuclear Enabling Technologies



Small Modular Reactors



Other Reactor Concepts RD&D



(Closed) Fuel Cycle R& D



Other (DOE nuclear energy infrastructure )



Subtotal (Office of Nuclear Energy)



Plutonium MOX fuel for current reactors*



Subtotal (Fission Energy)



Solar Energy



Wind Energy



Biomass and Bio-refinery systems






Water Power



Magnetic Fusion Energy (MFE) Research**



Inertial Confinement Fusion (ICF) Research***






DOE Loan Guarantee Programs



* Managed by NNSA’s Defense Nuclear Nonproliferation program for eventual disposition of excess stockpiled plutonium


** Managed by the DOE Office of Science


*** Managed by NNSA for its relevance to nuclear weapons and to demonstrate fusion ignition as a proof of principle for Inertial Fusion Energy (IFE) development.

Within the NNSA budget request, the balance between nuclear weapons and nuclear nonproliferation activities likewise continues to present a depressing picture, with the vast preponderance of the agency’s budget programmed to be spent on nuclear weapons for the indefinite future, despite the rebranding of the NNSA’s nuclear weapons complex as a supposedly diverse “Nuclear Security Enterprise.”  Funding for nuclear “Weapons Activities” increases 19.5 % over FY2010 – to $7.63 billion, while funding for naval reactors increases 22.1 %, to $1.15 billion, with the increase going to fund development of a propulsion reactor for a new ballistic missile-firing submarine the Obama Administration is planning as a replacement for the existing Ohio-class. Together these two military programs account for $8.78 billion of NNSA’s spending, or 74% of its total budget.

By contrast, the $2.5 billion request for “Defense Nuclear Nonproliferation” nominally represents 21% of the total NNSA budget.  But in reality, it’s even less. If one subtracts the $890 million in this request that really has nothing to do with “nonproliferation” and arms control treaties—but will go instead toward construction of a $7 billion DOE-owned plutonium pit conversion and mixed-oxide fuel complex in South Carolina to eventually “dispose” of excess U.S. warhead plutonium (by “burning” it in civil power reactors)—then NNSA’s actual “nonproliferation” effort represents a feeble $1.61 billion (13.6%) of its total budget request.  And what’s worse, in addition to being a monumentally expensive way to demilitarize separated warhead plutonium, this bipartisan pork-barrel MOX fuel program itself represents a nuclear safety and security hazard, and a poor U.S. non-proliferation example to other countries.

Unfortuntately, this is not the end of the bad news in this budget account. The Republican majority in the House has already signaled its intention to cut NNSA’s overall nonproliferation budget back to about $2.1 billion in FY 11, and if this level prevails in FY 2012, the genuine “nonproliferation” part of the NNSA budget – the part that funds nuclear treaty verification research and development and international cooperation in nuclear materials protection -- would likely shrink to only 7.5% of the total NNSA budget. 

So despite Secretary Chu’s laudable attempt to boost funding for energy efficiency and clean energy development in next year’s request, the DOE budget as whole remains weighed down by the legacy programs and mindsets of an earlier era, when nuclear weapons and uneconomic nuclear energy schemes ruled the roost at DOE.  Apparently they still do.

A far better budget strategy would have been for the President’s Office of Management and Budget (OMB) to cut more deeply into both the military and civil nuclear programs that are held dear by the new Republican budget cutters, and then force them to buy back these cuts by restoring clean energy and efficiency accounts that are already being swept clean by the new budget zealots on Capitol Hill.  Unfortunately, on the military side, this strategy has already been placed largely out of reach by President Obama’s decision early in 2010 to buy the Republican votes needed for ratification of the New START Treaty with Russia by making formal commitments to the Senate for huge unnecessary budget increases for modernizing nuclear weapons and NNSA’s supporting complex of laboratories and production facilities. This misguided strategy – which undermines the very nuclear disarmament objective Obama is purportedly trying to serve – leaves only the nuclear reactor R&D, MOX fuel, and nuclear loan guarantee accounts as potential items for clean energy bargaining leverage, and here once again the Obama team has preemptively surrendered, giving renewable energy opponents what they want up-front while exposing the programs it values most to merciless budget cutting.

When all is said and done, after two years in office, the Obama Administration has yet to come up with even an indicative national energy plan that blends efficiency-driven demand reduction targets with optimized regional portfolios of renewable and other sources of low-carbon energy supply to move us steadily in the direction of a clean energy economy on a defined timetable. Such a regionally diverse but national-in-scope clean energy plan could then become the yardstick for shaping the federal “Clean Energy Standard” the White House says it wants. Instead, we get a welter of new advanced energy research “hubs” that are sure to become targets of budget cutting, along with some vague language  in the State of the Union suggesting that lower-carbon but scarcely “clean” nuclear power and natural gas must be included in a “Clean Energy Standard” that apparently someone on Capitol Hill is expected to write. Or not. 

For all its good intentions, the Obama energy team seems to have forgotten that under our system of government, the Executive proposes and the Legislative Branch disposes. Before you can rally support for a national clean energy deployment strategy, you must have a strategy  – not just some vague outline to be filled in by others. The first step is the detailed elaboration and public release of an indicative national energy plan that systematically relates the projected “learning curves” for a wide range of clean energy technologies (the trends in cost-per-installed kilowatt over time) to the particular mix of efficiency, renewable energy and other lower-carbon resources potentially available at a given price in each region of the country, and then develops indicative supply curves and model regional clean energy portfolio targets based on these assessments. A public and congressional dialogue over this indicative set of linked regional energy plans could conceivably produce the wider public understanding and political consensus needed to legislate an environmentally responsible, cost-effective, and regionally diverse federal clean energy standard.

Absent such a detailed planning effort, the potential for another disastrous "centrist" led climate-bill-like free-for-all is all too evident. It seems the Obama energy team has a predilection for “bleeding-edge” technology and advanced energy research projects, and for talking optimistically about the green jobs that may spin out from them 10 or 15 years hence, but less appetite for the difficult work of formulating, explaining, and ultimately passing the critical public policies that will enable wider and more rapid uptake of the clean energy technologies we have on hand today.  With plentiful, cheap, but environmentally-harmful-to-extract natural gas threatening to undermine the economics of both a subsidized “nuclear renaissance” and an economy-wide shift toward renewable energy, the demand-side of the "clean energy" equation urgently requires attention. Federal “technology push” alone will not get the job done.

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