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Top 8 Ways to Rein in DOE Spending

Next week, the House will consider the FY 2016 DOE Appropriations bill. The Department of Energy has extended its reach into areas that are outside the bounds of the proper federal role with regard to energy. It should serve the public by providing basic research and development that is energy-source neutral and maintain the national laboratories to help advance innovation. Unfortunately, the DOE unfairly promotes and commercializes certain energy products and technologies, thereby stifling innovation and hampering the free market process. The House should use this opportunity to cut back on wasteful spending and federal intrusion in the energy and banking sector by strategically eliminating duplicative and wasteful programs in the Department of Energy. Here are the top areas the House should consider:

  1. Eliminate DOE Loans and Loan Guarantees – DOE loans and loan guarantees are intended to promote “clean” energy technologies. There is no reason for the DOE to be in the banking business. There is plenty of private capital available for worthy projects. These loans and loan guarantees fund projects for political reasons, not economic ones. As a result, the DOE promotes ineffective technologies and cronyism. The Solyndra and Fisker Automotive debacles are but two examples of taxpayer dollars being used to fund corporate handouts. The DOE should not be in the business of picking winners and losers. (Specific savings are variable, but would reduce taxpayer exposure)
  1. Eliminate programs in the Office of Electricity Delivery and Energy Reliability – The goal of this office is to promote grid reliability, flexibility, and security. In reality, OE’s agenda is to force ineffective and costly technologies onto consumers. One glaring example is the Administration’s “SmartGrid” initiative, which aims to implant unreliable and hugely expensive “clean” energy sources into the electric grid under the guise of reliability. This initiative could not be further removed from reality. The private sector should determine which technologies and products work best, not the government. Est. savings 2016-2020 = $758 million
  1. Eliminate the Office of Energy Efficiency and Renewable Energy – The role of this office is to promote and subsidize “clean energy” as determined by government bureaucrats. However, the government should not be in the business of trying to commercialize products and services it deems “clean”. This office aims to control multiple sectors of the economy, from energy production and transmission to manufacturing and construction. Cutting this office would help end large corporate handouts to failed technologies, such as the disastrous Chevy Volt bailout, and allow for true market-based innovation and development. Est. savings 2016-2020 = $9.78 billion
  1. Cut funding for the Office of Fossil Energy– FE’s goal is to fund development of fossil energy technologies. Just like in renewables, the federal government should not promote one energy source over another, including natural gas, coal, or oil. Programs that attempt to commercialize these technologies should be eliminated. The American people should determine which energy products and services work best, not federal bureaucrats. Est. savings 2016-2020 = $1.72 billion
  1. Cut funding for the Office of Nuclear Energy – This office is tasked with “advanc[ing] nuclear power as a resource capable of meeting the Nation’s energy…needs.” While nuclear energy is an important source of reliable and affordable energy, the DOE spends far too much money on modeling and commercialization. If nuclear technology is an energy source of the future then market forces should determine its future. Fixing the regulatory process and establishing a national waste repository as required by law would do significantly more to advance nuclear energy in this country than commercialization efforts at DOE. Est. savings 2016-2020 = $1.48 billion
  1. Get rid of Power Marketing Administration subsidies – PMAs were originally developed to help provide affordable energy to rural consumers. However, PMAs can now sell electricity below market rates. This distorts the energy market and should be ended. Est. savings 2016-2020 = $438 million
  1. Eliminate the Office of Workforce Development for Teachers and Scientists – This program, which intends to ensure that “the Nation have a sustained pipeline of highly skilled and diverse science, technology, engineering, and mathematics (STEM) workers,” is something that can be done entirely by the private sector. There are already numerous programs set up that accomplish this, such as Georgia Tech’s Enterprise Innovation Institute. Est. savings 2016 = $20.5 million
  1. Eliminate the Office of Technology Transitions – Created in 2014, this office has the vague task of “developing and overseeing delivery of the DOE strategic vision and goals for technology commercialization and engagement with the business and industrial sectors across the US…” The government has no place in commercializing products. This department is simply a duplication of other DOE functions and should be entirely eliminated. Est. savings 2016-2020 = 2016 budget request unavailable

It is time to reel in the Department of Energy. Cutting or reducing the programs above would realize a savings of over $12.6 billion in the next five years. These cuts are sensible, achievable reductions that would benefit all Americans. See The Heritage Foundation’s Budget Book and Nick Loris’ DOE budget backgrounder for more information.

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