The Trump administration has put forward a budget proposal for fiscal 2018 that would, if enacted, erode U.S. energy security, diminish our competitiveness in the growing global clean energy economy and slow progress in modernizing our domestic energy economy on the path to a low-carbon energy future.
The administration proposes to cut domestic discretionary spending by $54 billion below the cap agreed to on a bipartisan basis by Congress, affecting nearly every aspect of federal investment in science and technology, education, the environment and health. As a former secretary of energy who remains deeply engaged in energy issues, I have significant concerns about the impact of these cuts on our energy future.
Let’s start with energy security.
The G-7 leaders will convene in Italy this week. Back in 2014, after the Russian incursion into Ukraine and the explicit threat this posed to European energy supplies, the G-7 and the EU adopted a modern set of energy security principles that moved beyond the 40-year-old oil-centric version.
While oil security remains important, these principles reflect the greatly changed global energy landscape and several are particularly important to this discussion.
First, infrastructure modernization will improve energy system resilience.
Second, reducing our greenhouse gas emissions and accelerating the transition to a low-carbon economy are key contributors to enduring energy security.
Third, energy efficiency should be enhanced across the board.
And fourth, a commitment to clean energy technology innovation underpins energy security.
While our allies are implementing these principles as a collective responsibility, the administration’s budget proposal would take us backward. It would, for example, reduce energy efficiency programs, dramatically cut our investments in energy technology development, and greatly reduce the size of our Strategic Petroleum Reserve, the nation’s first line of defense against global oil market disruptions that still drive price spikes at home even with increased domestic production.
On clean energy innovation, energy ministers from more than 20 countries will meet in China in early June to discuss other collective commitments: accelerating the deployment of clean energy technology and doubling innovation investments to produce the breakthroughs in which the private sector is eager to invest. The United States was an indispensable leader in forging these commitments, as well as the 195-nation Paris climate agreement.
One of these commitments — Mission Innovation, an initiative coming out of COP 21 in Paris — is on the agenda in Beijing.
As part of this 22-nation agreement, the U.S. committed to doubling its clean energy innovation investment of $6.4 billion in 2016 to $12.8 billion in 2021. Rather than doubling our investment, the Trump budget would cut it in half, putting us behind China and Europe in a few years.
If we adopt the Trump energy budget, we explicitly and implicitly forego these critical agreements, diminishing both our collective energy security and our innovation leadership position, just as our allies and competitors are moving forward to capture market share in a growing, multi-trillion-dollar global clean energy marketplace.
This might be warranted if key programs weren’t working and hadn’t attracted bipartisan support. But the facts argue the opposite.
Take, for example, DOE’s Advanced Research Projects Agency-Energy. ARPA-E moves novel technologies to a stage where private investors can assume the commercialization risk.
ARPA-E investments have led to 56 new companies and over $1.8 billion in private sector follow-on investment, an enviable record for any technology investment portfolio. Acknowledging these successes, just last month, Energy Secretary Rick Perry appropriately praised ARPA-E innovation. This month, the Administration’s budget zeroes it out.
There’s a similar story further down the innovation supply chain. DOE’s loan program helps the first deployment of clean energy technologies in the marketplace, a particularly treacherous step in a changing marketplace. It played a critical role, for example, in establishing the first five U.S. utility-scale solar farms, paving the way for 10 times that number, and counting, in private sector projects.
This has helped to support over a quarter million solar jobs in the U.S. The program also supported the construction of a Tesla electric vehicle plant and modernization of auto factories in eight states to produce efficient cars, light trucks, and high-paying American jobs.
As with any investment vehicle, there have been some defaults. The interest payments to the Treasury on performing loans is, however, already several times greater than these losses. The program is accomplishing its primary — and critical — objective, yet the Trump Administration’s budget proposal, without analysis of the loan program’s many successes and the key role it is playing in technology diffusion, would zero it out.
The Administration has voiced strong skepticism about climate change even though this is at odds with the preponderance of scientific evidence and the positions of almost all other nations of the world. Its budget appears to be unilateral disarmament in the face of climate change, a modern set of energy security principles, and the competition for global clean energy market share.
We should work to ensure that this contrarianism about a low-carbon future does not seriously harm our bipartisan energy innovation agenda. It would be ironic and unfortunate if future presidents, as a result of this budget, are forced to grapple with rebuilding what was lost — America’s proper share of an enormous global cclean-energymarket and the jobs that go with it.
Ernest J. Moniz was the thirteenth Secretary of Energy, serving from 2013-2017.
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