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UPDATE - Bush budget cuts solar, renewable energy programs

Date: 10-Apr-01
Country: USA
Author: Tom Doggett

Under the president's proposed fiscal 2002 budget, the Energy Department's core solar, wind and other renewable energy programs would be cut by more than half to $186 million from current spending levels of $376 million.

The department's efficiency research programs, which seek ways to reduce energy use, would be cut by $61 million to $795 million in the 2002 spending year that begins Oct. 1.

While Energy Secretary Spencer Abraham said the U.S. is in its worst energy crisis since the Arab oil embargo of the 1970s, he justified the budget reductions by arguing the research programs have not produced results that could be applied in the marketplace.

"We decided it made little sense to continue forward with programs that have not helped us avert the energy crisis," he told reporters.

The funding reductions for renewables and energy efficiency programs are part of $500 million in overall cuts that would drop the Energy Department's budget to $19.2 billion.

Bush's budget assumes the federal government will raise $1.2 billion in bonus bids for oil and natural gas leases in Alaska's Arctic National Wildlife Refuge in 2004.

The White House proposes to spend that money on alternative energy programs over seven years. However, there is growing opposition in Congress to allowing drilling in the Arctic refuge for environmental reasons, so the money may never materialize.

The president's budget also proposes spending $150 million to develop less-polluting coal for fueling electric generating plants and would keep spending for nuclear power high.

Vice President Dick Cheney said on Sunday a special White House energy task force is considering the increased use of nuclear power, and he personally believes the United States needs to build more nuclear power plants. No utility has been issued a federal license to build a nuclear plant in two decades.

ENERGY RESEARCH CUTS OPPOSED

Renewable energy groups said the cuts will undermine efforts to boost energy supplies in the Western part of the United States, which has been hit with high electricity costs and in California by rolling blackouts.

"If not reversed by Congress, DOE's proposed cutbacks will seriously damage efforts to bring new clean energy supplies on-line to help solve the West's energy crisis," they said.

The Alliance to Save Energy contends that the programs under the administration's budget ax now save consumers more than $25 billion each year, lessen oil imports and prevent tons of pollution.

"Faced with sky-high heating bills, increased gasoline prices, and new prospects for electricity shortages, the nation needs to invest more heavily in energy efficiency, which remains the cheapest, quickest and cleanest way to lessen energy problems and extend energy supplies," said Alliance president David Nemtzow.

To boost U.S. electricity supplies, Bush's budget proposes expanding a tax credit for producing electricity from wind and other certain sources and applying it to more power plants.

The current 1.5-cent tax credit for each kilowatt-hour of electricity produced from wind, organic biomass material and poultry waste would be extended for three more years to power plants built through 2004.

In addition, eligible biomass would be expanded to include forest-related and agricultural sources.

Bush also proposed a new tax credit of up to $2,000 for individuals purchasing solar energy equipment to generate electricity or heat water in homes.

The administration also wants to increase funding by $120 million for the federal weatherization program, which helps low-income families make homes more energy-efficient.

Congress will spend the next few months finalizing a spending plan for the federal government for fiscal 2002.

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