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The Department of Energy’s Fiscal Year 2010 Budget Request Robert Alvarez Senior Scholar Institute for Policy Studies June 2009

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Created in 1977 in response to oil disruptions, the U.S. Department of Energy has done little since to stem the country's burgeoning energy problems. With about 5.5% of the world's population, the United States consumes more oil than any other nation, three-fourths of which comes from foreign sources. As U.S. energy dependence has worsened, its greenhouse gas emissions have grown worse as well — increasing by 17% since 1990 — accelerating potentially disastrous climate change.

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The main reason for Energy's ineffectiveness is that it's not structured to usher in the country's energy future. For most of its existence, about two-thirds of Energy's annual spending has gone to maintaining the U.S. nuclear weapons complex and cleaning up its environmental legacy. Pantex Plant

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Obama Administration Energy Department FY2010 Budget Request Nuclear Weapons, Naval Reactors, Nuclear Site Cleanup, Radioactive Waste, and Non-Proliferation $16.4 billion 62% Science $4.9 B 18.5% Energy $4.9 B 18.5% Management $382 M Nuclear Weapons, Naval Reactors, Nuclear Site Cleanup, Radioactive Waste and Non-Proliferation $15.3 billion 61% Science $4.7 B 19% Energy $4.3 B 17% Management $670 M Bush Administration Energy Department FY2009 Budget Request

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Spending Including Stimulus Funds for the Department of Energy ($Billions of dollars) NNSA & DOE site cleanup Science Even with stimulus funds, nuclear defense spending still dominates DOE’s budget. Spending for the DOE weapons complex is currently comparable to that during the height of the nuclear arms race in the 1950s. Energy Activities

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The single largest expenditure in DOE’s FY 2010 budget is to maintain some 9,200 intact nuclear warheads and thousands of weapons parts ($6.4 billion). These weapons have about 400 times more destructive force than for all explosives used in World War II combined. Source: Norris and Kristensen 2009 An Oversized Nuclear Arsenal

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Nuclear Weapons Stockpile Spending There is a 15 year backlog of some 4,200 retired nuclear warheads awaiting dismantlement. Thousands more will be added if President Obama’s pledge to cut nuclear arms is realized. Yet, funding for dismantlement Is expected to drop by 50% over the next five years. Source: DOE/CF-035 Volume 1

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Nuclear weapons production has resulted in the most expensive environmental cleanup program in the United States. DOE Nuclear Site Environmental Cleanup Defense Department Environmental Cleanup EPA Superfund Program $1 B $1.3 B $6.0 B Stimulus funds include an additional $6 billion in FY09 &10 for DOE site cleanup

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Hanford, WA (ORP/RL) $135B SRS, SC $53B Idaho $33B Paducah, KY $15B Portsmouth,OH $11.2B Rocky Flats, CO $10B WIPP, NM $6.9 B Oak Ridge, TN $8B West Valley, NY $5 B LANL, NM $3.5B Uranium Mines & Mills $5B Fernald, OH $3B BNL, NY $541M NTS,NV $2.6B ETEC,CA $325M SNL,NM $236M Pantex, TX $200M DOE Site Cleanup Costs* Total Cost = $283 Billion Sources. DOE 2008, GAO 2005, EIA 2006 Mound, OH $116M *Does not include NNSA projects

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Energy Department Stimulus Spending for FY09-10 Weatherization and Intergovernmental Activities $ 11.6 billion Nuclear Site Cleanup $ 6.0 billion Innovative Technology Loan Guarantee Subsidy Costs $ 5.99 billion Electricity Delivery and Reliability $ 4.5 billion Fossil Energy $ 3.4 billion Advanced Battery Manufacturing $ 2.0 billion Science $ 1.6 billion Energy Efficiency, Renewable Energy Research, Development and Demonstration $ 951.4 million Biomass and Biorefinery Systems R&D $ 786 million Advanced Research Projects Agency – Energy $ 400 million Geothermal Energy $ 400 million Transportation Electrification $ 400 million Alternative Fuel Vehicles $ 300 million Wind Energy $ 118 million Facilities and Infrastructure $ 101 million Industrial Technologies $ 50 million Fuel Cell Technologies $ 43.4 million Program Direction $ 61 million TOTAL $ 38.7 billion

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<ul><li>More than half of energy research and development spending in FY 2010 is for nuclear and coal. </li></ul>20% 37% 20%

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Nuclear $3.3B Fossil $5.4B Efficiency $13.4B Vehicles $906M Electric Transmission $4.8B Biofuels $1.2B Wind $243M Water $94 M Geothermal $494M Energy R&D Spending for FY2009-10 With Stimulus Funds Advanced Battery Manufacturing $2B Efficiency/ Renewable Science R,D,D&D $1B Solar $495M Electric Transport $400M Fuel Cells $279M

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Nuclear $1.7B 37.7% Fossil $881M 19.5% Conservation $734M 16.2% Vehicles $333M 7.4% Solar $320M 7.1% Biofuels $235M 5.2% Fuel Cells $68 M 1.2% Wind $75M 1.6% Geothermal $50M 1% Water $30 M 0.6% Renewable Energy, Science & Engineering $115M 2.5% Proposed Energy R&D Spending for FY2010 (without stimulus funds) With few exceptions, energy R&D spending is generally the same as the Bush Administration.

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- DOE has the authority to provide $132 billion in federal loans and loan guarantees to aid the ailing auto industry, and help finance nuclear, coal, renewable energy projects and to restructure and modernize the nation’s electric grid system. - Loans will come from the Federal Financing Bank that draws from the U.S. Treasury. - The risk of energy-related loan defaults was estimated last year by the U.S. Government Accountability Office as greater than 50%. Loans and Loan Guarantees $20.5 billion in loan guarantees for nuclear projects $8 billion in loan guarantees for coal projects $78.5 billion in loan guarantees for renewables and electric transmission $25 billion for auto Industry loans

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Like those of his predecessors, nearly two thirds of President Obama’s FY 2010 Energy department budget is to support the government’s nuclear weapons infrastructure. The single largest expenditure in DOE’s FY 2010 budget is to maintain some 9,200 nuclear warheads ($6.4 billion). Funding for weapons dismantlement is being shortchanged, despite a 15-year backlog of retired weapons, and thousands more expected if President Obama’s nuclear arms reduction pledge is realized. The environmental legacy of DOE weapons sites remains perhaps the largest, most complex, and expensive cleanup challenge in the world. Summary

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Summary Actual energy-related spending is only 18.5 percent of Energy’s FY 2010 budget request. Energy R&D spending for FY 2010 is dominated by nuclear and coal. With additional energy stimulus money, energy conservation get the most, followed by coal, electric transmission and nuclear. After stimulus funds are spent in FY 2010, energy R&D it is likely to go back to “business-as-usual. ”

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<ul><li>What's needed is a major restructuring of the Department of Energy. The first step is to expeditiously transfer the department's nuclear weapons programs outside of DOE. </li></ul><ul><li>Freed from its nuclear weapons millstone, there's much that can be done do to make the Department of Energy a major player in constituting a sustainable U.S. energy policy. </li></ul><ul><li>President Obama's positive energy vision can either be sustained by a new, more responsive Energy Department, or risk failing due to the department's dysfunction. </li></ul>Conclusion

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About the Author Robert Alvarez is a senior scholar at IPS, where he is currently focused on nuclear disarmament, environmental, and energy policies. Between 1993 and 1999, Mr. Alvarez served as a Senior Policy Advisor to the Secretary and Deputy Assistant Secretary for National Security and the Environment. Prior to joining the DOE, Mr. Alvarez served for five years as a senior investigator for the U. S. Senate Committee on Governmental Affairs, chaired by Senator John Glenn, and as one of the Senate’s primary staff experts on the U.S. nuclear weapons program. Bob Alvarez is an award winning author and has published articles in prominent publications such as Science Magazine , the Bulletin of Atomic Scientists , Technology Review and The Washington Post . He has been featured in television programs such as NOVA and 60 Minutes . The Institute for Policy Studies strengthens social movements with independent research, visionary thinking, and links to the grassroots, scholars and elected officials. Since 1963 it has empowered people to build healthy and democratic societies in communities, the United States, and the world.