Senate Appropriators Grill Energy Secretary Perry on Proposed R&D Cuts

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Publication date: 
19 April 2018
Number: 
48

At a hearing on the fiscal year 2019 Department of Energy budget, Senate appropriators questioned the rationale behind the administration’s proposed spending cuts to energy R&D programs and made clear they will reject them again this year.

At an April 11 Senate hearing on the Trump administration’s fiscal year 2019 budget request for the Department of Energy, Subcommittee Chair Lamar Alexander (R-TN), Ranking Member Dianne Feinstein (D-CA), and other members questioned Energy Secretary Rick Perry about the deep spending cuts to applied energy R&D programs the Trump administration has proposed for the second year in a row. They also sought assurances that DOE would follow the intent of Congress when implementing the appropriated budget.

In his opening statement, Alexander made clear that, contrary to the administration’s proposal, fiscal year 2019 appropriations for DOE “will reflect funding levels much like the 2018 bill and will provide the department with more, not less money, than the budget requests.” He welcomed Perry to share his priorities given that reality.

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Energy Secretary Rick Perry testifies before the Senate Energy and Water Development Appropriations Subcommittee

Energy Secretary Rick Perry testifies before the Senate Energy and Water Development Appropriations Subcommittee on April 11.

(Image credit – Senate Appropriations Committee)

Feinstein criticized the president’s budget as “just cut, cut, cut,” and said she is “deeply disappointed” the administration did not adhere to the defense and nondefense spending levels that Congress and President Trump agreed to for fiscal year 2019 in a bipartisan budget agreement enacted in February.

Noting the president’s budget request for DOE proposes cutting nondefense programs by $3.9 billion while increasing defense funding, Feinstein declared,

That’s not the kind of parity between defense and nondefense that Congress just agreed to and that the president signed into law.

Over the last year, Congress has consistently shown a willingness to reject the administration’s policies and proposals and assert its own budgetary and legislative directions with respect to DOE and other science agencies. Congress flatly rejected the president’s first budget request for DOE’s nondefense programs, instead providing a spending windfall including a 16 percent spending increase for the DOE Office of Science and double-digit increases for the Advanced Research Projects Agency–E (ARPA–E) and DOE’s applied energy R&D offices that focus on nuclear, renewable, and fossil energy technologies. Congress did, however, accept the administration’s request to substantially ramp up spending on nuclear weapons research, increasing the National Nuclear Security Administration’s budget by 13 percent.

The fiscal year 2019 budget request, which the administration prepared before fiscal year 2018 levels for DOE were finalized, proposes flat funding for the DOE Office of Science. This is a significant shift from the previous request, which sought to cut the office by 17 percent. However, the request again proposes deep cuts to DOE’s applied energy R&D programs, including the elimination of ARPA–E.

Alexander touts societal value of energy R&D

Against the backdrop of the administration’s proposed cuts, Alexander gave a ringing defense of DOE’s R&D portfolio, saying:

Research funding for the Department of Energy laboratories has produced technologies for unconventional natural gas development, supercomputing, 3D printing, nuclear imaging devices used for medicine, MRI scanners, optical digital recording technologies, batteries and energy storage systems, precision detectors, pharmaceuticals. It’s hard to think of a major technological advance since World War II that hasn’t had some sort of federal research support. That’s made us a world leader in science and technology. It’s one important reason why the United States produces nearly one out of every four dollars in wealth produced in the world.

In his opening statement, Perry made a similar point, that “much of nation’s greatest technology breakthroughs affecting energy have come through our national labs.” He noted he has visited 13 of DOE's 17 national laboratories, and said he is especially proud of the work that they are doing to harness supercomputers in support of the National Institute of Health’s “All of Us” Precision Medicine Initiative, a new national medical data resource authorized in the 21st Century Cures Act.

Noting that he is pleased the budget request prioritizes supercomputing, Alexander inquired about DOE’s timeframe for developing exascale capabilities and how they will benefit the country. Perry replied that DOE is making significant progress with a recent $1.8 billion call for proposals to build exascale computers at Oak Ridge and Lawrence Livermore National Laboratories by 2023. These will be follow-on systems to Aurora, the first U.S. exascale system, currently under development at Argonne National Laboratory and scheduled to come online in 2021.

The U.S. will have the fastest computer in the world “for a period of time” as the result of these procurements, he said. But, he added, the competition will go on, reminding members that “our friends in China and elsewhere are very capable.

DOE’s Exascale Computing Project is one of its few nondefense programs the Trump administration has sought a large increase for in both budget requests, including by 25 percent in fiscal year 2019.

Perry calls battery storage the ‘holy grail’ of energy

In response to a concern from Sen. John Kennedy (R-LA) that “China is beating our brains out in terms of battery technology,” Perry acknowledged that “China is a heck of a competitor” but that the U.S. is “in the game on battery storage.” He added,

I believe battery storage is the holy grail of the energy side of things going forward, particularly on the renewable side, and we’re working and making good progress. [Pacific Northwest National Laboratory] out in Senator Murray’s state, they are doing some fabulous work on batteries, battery storage. And I will suggest to you the answer will be found in our universities and our international labs working together on battery storage.

Later, Sen. Jeff Merkley (D-OR) questioned why, if battery storage is the “holy grail,” that the president’s budget decreases its funding line from $41 million to $8 million within the Office of Electricity Delivery and Energy Reliability, “with that $8 million not even clearly dedicated to research.

Perry replied that “pulling that one line item and saying this is all of the dollars that we're going to be focusing on a particular effort might be a little bit narrow in scope.” Merkley asked him to point to the other areas of the budget where battery storage is being funded.

DOE Under Secretary for Science Paul Dabbar, who was also present at the hearing, stepped in, saying there are other battery funding line items at DOE, including in ARPA–E, the Office of Science, and the Office of Energy Efficiency and Renewable Energy.

Merkley interjected, pointing out that ARPA–E could not fund battery storage R&D if it is eliminated. He continued,

Mr. Secretary, if you believe that high-risk, high-return strategy is the appropriate role for government spending, and I think that's what I heard you say that you prefer to do it there than after you have mature technologies. Then why are you cutting ARPA-E to zero?

Perry replied, "Well, I'll use the same rationale that I used a year ago when I said that I understand how the appropriations process works. The budget goes forward by the administration and you all get to write it, and then we'll implement it."

Feinstein asks about ITER fusion project

Senate appropriators, including Feinstein, have been skeptical in recent years about the U.S. contribution to ITER, the large-scale international fusion energy project based in France, proposing to zero out its budget for multiple years in a row. Feinstein inquired about the administration’s current approach, asking why DOE only requested $75 million for the U.S. contribution to the project this year when funding would need to be at $200 million or greater to maintain the U.S.’ commitment of 9 percent of the project’s lifecycle cost.

Pointing out the riskiness of the project, Feinstein said that while ITER funding supports American jobs and involvement, “whether ITER can ever be successful or not, I think is still unknown.” Perry said he too is unsure whether ITER will ultimately be a successful scientific project.

Perry did add, however, that sometimes high-risk investments such as ITER are worth taking:

We also realize that for the future of energy, we’re going to be traveling down some roads from time to time that we don’t know what the destination may look like that we’re trying to get to. … The fact is, on this project, that may be one of those.

Dabbar shared concerns about ITER’s high cost, saying that internal DOE estimates of the total project construction cost have risen to $65 billion, with the U.S. obligated to cover $6.4 billion of that “plus a proportional share of operations after it starts operation in 2025, ramping up to 2035 ..." 

According to reporting from Physics Today, Bigot has objected to Dabbar’s estimate, stating “the cost has not gone up” and that he stands by the $22 billion total construction cost estimate he provided at a House hearing in 2016.

As for the U.S.’ future role in ITER, Perry said the administration is currently carrying out a “very high-level review” of nuclear energy-related activities, including ITER. The administration is expected to make a final decision on whether to stay fully committed as a part of that review, although Feinstein and Alexander speculated the decision probably would not be ready before they draft this year’s spending bill for DOE.

Perry shows deference to Congress on setting budget

Later in the hearing, Sen. Jeanne Shaheen (D-NH) questioned whether DOE is committed to properly implementing appropriations law, given violations identified by the Government Accountability Office last year.

At least twice in 2017,” she said, there has been “confusion around timing and delays particularly with respect to the DOE violating the Congressional Budget and Impoundment Control Act by withholding appropriated funds for ARPA–E and weatherization.” She cited a letter GAO sent Congress referencing two instances of DOE impoundment that led to the loss of jobs and the disruption of several ARPA–E projects.

When Shaheen asked what Perry would do to ensure this does not happen again, Perry assured her that he will follow Congress’ lead on setting the budget:

One of the things I learned as [governor] back in my days is that … appropriators do a lot of hard work and lay the budgets out, and governors sometimes don’t get to write those budgets. … I respect what you do, and I happen to know what my role is here. If this committee decides that they’re going to fund ARPA–E at a certain level, I’m going to implement it and run it as efficiently and effectively as we can. So I hope that you know we respect your right to write that budget and us to implement it.

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