President Obama’s 2013 Budget a Mixed Bag for Water, a Boon for Clean Energy

The president throws more clean energy money at the Energy Department, while cuts to the Environmental Protection Agency’s budget come at the expense of water and sewer infrastructure.

President Obama spoke to students at Northern Virginia Community College in Annandale, Va., on Monday, the day he submitted his fiscal year 2013 budget to Congress. (Official White House Photo by Lawrence Jackson)
Official White House Photo by Lawrence Jackson
President Obama spoke to students at Northern Virginia Community College in Annandale, Va., on Monday, the day he submitted his fiscal year 2013 budget to Congress.

By Brett Walton
Circle of Blue

Less than three weeks ago, in his State of the Union address, U.S. President Barack Obama touted an “all-of-the-above” strategy for developing America’s energy resources.

In his fiscal year 2013 budget request — released yesterday — the president leaned toward the clean-energy goals he has promoted while in office and along his initial campaign trail. The new plan includes substantial increases for renewable energy programs, while cutting fossil fuel subsidies and slashing allocations to a fossil fuels research program by a quarter.

The cuts are due, in part, to a general reduction in government subsidies in several areas, including agriculture. But they also reflect the nation’s new energy economics, in which cheap and bountiful natural gas supplies from the shale boom coupled with stricter environmental regulations make coal a less enticing fuel source.

On the whole, the president hopes to reduce the deficit by $US 4 trillion over the next decade by trimming military spending, by finding savings in federal healthcare programs, by letting tax cuts from the George W. Bush administration expire, and by increasing taxes on people making more than $US 1 million per year.

Under the president’s proposal, the U.S. Department of Energy’s budget would increase by more than 3 percent — one of the most significant gains for any department. The Office of Energy Efficiency and Renewable Energy would see its funding increase by a third to $US 2.3 billion. And ARPA-E, a research cauldron for innovative energy projects, would be funded at $US 325 million — down roughly 10 percent.

At the same time, the president would reform the tax code to cut loopholes that benefit oil and gas companies. The estimated savings come to $US 41 billion over the next decade.

President Obama is also pushing ahead with his program to expand renewable energy development on federal lands — a course of action that, in some regions of the country, has come up against strong local opposition.

The budget request sets a goal of 11,000 megawatts of new wind, solar, and geothermal energy sources on federal lands by the end of 2013. The Department of the Interior, which manages the affected lands, would get $US 86 million to guide the environmental reviews and the permitting process.

Water programs, on the other hand, were not as fortunate.

The budget for the Environmental Protection Agency — the headline agency for water — would fall by 1.2 percent, mostly through cuts to a loan program for water and sewer infrastructure and to Superfund allocations.

In a conference call with reporters, EPA Administrator Lisa Jackson said that the agency was “looking for the best return on investment” when deciding which programs would see cuts.

Ultimately, the final budget for fiscal year 2013, which begins October 1, will likely bear pale resemblance to the president’s request, since Congress has yet to weigh in. As was evident in the budget battles last year, the legislative branch, especially the Republican-led House, will be hard-pressed to agree to any plan from the president.

Here are department-by-department details on water and energy funding, with the change in the department’s total budget noted:

Funding Decreases
Army Corps of Engineers – 5.4% decrease
Taking one of the biggest hits, the Army Corps of Engineers was directed to focus on three core areas:
  • reducing damage from floods and storms
  • improving waterway navigation
  • restoring aquatic ecosystems
Dept. of Agriculture – nearly 3% decrease
Most of the savings will come from eliminating direct farm payments, from decreasing subsidies to crop insurance companies, and from decreasing funding to land conservation programs.
Dept. of Interior – 1% decrease
Besides the aforementioned funding to advance renewable energy projects on federal lands, the Interior Department would get $US 47 million for four water rights settlements with:

  • half dozen pueblos in New Mexico
  • the Navajo Nation in New Mexico
  • the White Mountain Tribe in Arizona
  • the Crow Tribe of Montana
Also included is $US 60 million for the Navajo-Gallup Water Supply Project, which will provide water to communities in northwestern New Mexico and eastern Arizona, and $US 21 million for the Central Utah Project, which will allow the state to use more of its share of the Colorado River.
Environmental Protection Agency 1.2% decrease in total funding
Most of the savings in the EPA budget request come from a 15 percent cut to the state revolving funds for drinking water and sewer infrastructure and cuts to Superfund activities.
Federal funding for the state revolving funds — requested at $US 2 billion for 2013 — has declined in the three years since the American Recovery and Reinvestment Act was passed. Grants to states for water pollution control would increase from $US 27 million to $US 265 million.
The budget request maintains funding for the Great Lakes restoration at $US 300 million, and it provides an additional $US 15 million for cleaning up the Chesapeake Bay.
The EPA’s science and technology budget would see a modest increase of 1 percent. Included in this area is the Safe and Sustainable Water Research program, which will:

  • assess green infrastructure
  • investigate the effects of hydraulic fracturing on water resources
  • evaluate the risks of estrogen and other endocrine disruptors on human health and the environment
Funding Increases
Dept. of State/U.S. AID — 1.6% increase
Payments to international organizations — such as the Global Environmental Facility and the International Bank for Reconstruction and Development, both of which go on the department’s ledger — are set to rise. International disaster assistance, however, will fall from $US 1.1 billion to $US 960 million.
A minimum of $US 315 million will be set aside for clean drinking water and sanitation under the 2005 Paul Simon Water for Poor Act. The actual amount spent in these areas is not known until the end of a fiscal year, because spending on water and sanitation comes from myriad sources.
Specific water goals mentioned in the president’s request include:

  • wastewater treatment in Nogales and Tijuana, two Mexican cities along the U.S. border
  • transboundary water management in South and Central Asia
  • water and energy projects in Afghanistan
  • water projects in conjunction with the program on maternal and child health and food security
Dept. of Energy – 3.2% increase
Money for clean energy programs has not gone away, and the Energy Department would see one of the largest budget gains in the administration. For instance, funding for the Office of Energy Efficiency and Renewable Energy would go up by a third to $US 2.3 billion, with notable increases for biomass, solar, and vehicle technology.
Funding for fossil fuels research — carbon storage, carbon capture, advanced coal-fueled power plants — would be set at $US 421 million, a decrease of roughly one-quarter. That program also includes $US 12 million for research into methods to “safely and responsibly” develop natural gas resources.
The budget for the Energy Information Administration, which compiles national energy data, would increase from $US 105 million to $US 116 million.
Author: Brett Walton  is a Seattle-based reporter for Circle of Blue. He writes our Federal Water Tap, a weekly breakdown of U.S. policy. Interests: Southwest, Pacific Northwest, Pricing, Infrastructure.

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