The New US Budget: The Energy Sector Becomes More “All of the Above”

December 31, 2014

The US statesmen’s vision for the energy sector has been under a series of transformations over the last several years. It has been through a few cycles, alternating its focus between fossil fuels and renewables, with everything else in between. Nowadays, fossil fuels are on the uptake.

On December 13, 2014, US Congress passed H.R. 83, the fiscal year 2015 budget. Some of the winners of next year’s national budget are the Pentagon, with a large portion of the funding allocated to defense, the National Institute of Health, and education. Overall, the Department of Energy’s $10.2 billion budget was largely unchanged; however, the budget featured mixed outcomes of cuts and additions that solidify the trend of renewable and environmental concerns giving way to fossil fuels – some of the Obama administration’s requests for funds have been reversed and others ignored.

The Office of Energy Efficiency and Renewable Energy received a modest increase of $25 million (to $1.937 billion), which nonetheless was about $380 million less than the administration requested. Another denied request for increase was funding for renewable energy research (16% less than President Obama was asking for). Obama was also denied $3 billion he had promised to the Green Climate Fund operating within the framework of the UNFCCC  as amechanism to redistribute money from developed to developing countries to counter climate change. The Environmental Protection Agency (EPA) is losing ground and funding as well: its $8.1 billion budget was cut by $60 million, bringing its staffing to the lowest level since the 1980s and curbing the agency’s efforts in enforcing some air and water laws. This budget reduction also prohibits the EPA from regulating lead ammunition and mountaintop-removal mining.

On the flip side, Congress was generous to fossil fuels and nuclear power by allocating more than requested by the administration. The bill provides $913 million to support nuclear energy. Fossil fuels research is an especially interesting case. President Obama requested a decrease in funding, from $562 million provided in fiscal year 2014 to $475 million. Instead, Congress increased support by boosting funding $100 million above what was asked. Fossil fuels R&D in 2015 will amount to $571 million. Slowly but surely, federal funding of fossil fuels research has been creeping up, growing by about 50% in the past five years.

All in all, a greater number of Republican representatives in Congress is becoming increasingly successful and inventive. Thus, Obama’s announcement a couple years ago of an “all of the above” energy strategy is playing right into their hands: it is being quoted mostly by these lawmakers when pledging their support for fossil fuels. Needless to say, the President has not referenced this energy strategy for a while.

Meanwhile, the markets do not demonstrate any hesitation about fossil fuels: public exchanges and brokers have been adding more products where oil, natural gas, and LNG are underlying commodities. In fact, I don’t remember any noticeable additions to environmental products in many months. And it is a safe bet that this state of affairs will not change in the near future.

Post a Comment


More Articles on Editorial

Data Smartens up in a Fog

Those who are part of the data management game can juggle terms like Hadoop, NoSQL, and RDBMS freely. However, for those who are not in the game, this lingo will likely carry the same meaning as a proclamation of goodwill ... Read more »

The Year-end Review and Future Projections: Awaiting More Synergy between the Energy Sector and IT

Lacking originality, we are closing 2015 with the yearly review and endeavored predictions of the near future; this time however, we will look at the energy sector in conjunction with data business and software solutions. The energy sector has been ... Read more »

Data Security + Data Surveillance = More Data Business

In today’s fast paced business environment, risk is everywhere and data security is rapidly changing. However, few things remain unchanged: hackers will create more sophisticated scripts to get around your security fortresses trying to steal your identity, money, and corporate ... Read more »

August, the Month of Energy Sector Discontent

The eighth month of the year has historically been very special for the US energy sector. The Northeast Blackout of 2003, the Energy Policy Act (EPAct) of 2005, and the Clean Power Plan and Methane Emission Reduction Policy proposal of ... Read more »

Natural Gas Coasts Along, while Other Energy Markets Test Rollercoasters

I do not recall more confusion and misalignment in the energy sector as is happening now. Any correlation and interdependency that existed previously among oil, coal, natural gas, and electricity markets seem to have evaporated; a multiplicity of independent events ... Read more »

Intermittent Success in the Battle between Coal and Renewables

On June 29, 2015, industry newsmakers announced “a blow” to President Obama’s environmental plan. On that day, the US Supreme Court overturned the Environmental Protection Agency’s (EPA’s) Mercury and Air Toxics Standards (MATS) limiting mercury and other hazardous air pollutants ... Read more »

Tesla’s Off-grid Power Storage Batteries: More Questions on Load Forecasting and Data

Tesla’s announcement last month of new energy storage batteries was positioned to mark a major milestone on the road towards a clean and sustainable future. Storage that is on the end-user’s side is being viewed, at least by some, as ... Read more »

Crude Oil Transportation by Rail: More than the Industry Bargained For?

An announcement by the US Energy Information Administration (EIA) about the new set of oil statistics missed the spotlight. Really, what’s so special about adding another data report that only expands on the list of transportation options for the same ... Read more »

Nasdaq Adds to the Energy Derivatives Markets and Steps in against CME and ICE

I admire the valor of Nasdaq – daring to enter the energy derivatives market space that has been dominated by two giants, CME and ICE. Nasdaq, operating mainly in stock markets, though with some exposure to European power markets, decided ... Read more »

Data Sources: NASDAQ OMX

The Emerging Power Markets’ New Player – the Microgrid Operator

The concept of microgrids is gaining momentum; their share in the energy space is growing. The microgrid is not a novel concept, as in most remote communities self-containment is the only feasible approach to power supply. For many years, localities without ... Read more »


Page 1 of 512345