The Department of Energy’s

Fiscal Year 2010Budget Request

Robert AlvarezSenior Scholar

Institute for Policy StudiesJune 2009

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.

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

Nuclear Weapons, Naval Reactors, Nuclear Site Cleanup,

Radioactive Waste, and Non-Proliferation

$16.4 billion 62%

Science$4.9 B18.5%

Energy$4.9 B18.5%

Obama Administration Energy Department

FY2010 Budget Request

Management$382 M

Nuclear Weapons, Naval Reactors, Nuclear Site Cleanup,

Radioactive Waste and Non-Proliferation

$15.3 billion 61%

Science$4.7 B19%

Energy$4.3 B17%

Management$670 M

Bush Administration Energy Department

FY2009 Budget Request

0

5

10

15

20

25

30

35

40

Stimulus

FY 2009-10

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. 

EnergyActivities

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

0

200

400

600

800

1,000

1,200

1,400

1,600

dollars in thousands

FY 08 FY 09 FY10 FY 11 FY 12 FY13 FY 14

Weapons stockpile service and life extension

Dismantlement

Nuclear Weapons Stockpile Spending

There is a 15 year backlog of some 4,200 retired nuclear warheads awaiting dismantlement.

Thousands more will be added ifPresident Obama’spledge to cut nuclear arms is realized.

Yet, funding for dismantlementIs expected to drop by 50% over the next five years.

Source: DOE/CF-035Volume 1

Nuclear weapons production has resulted in the most expensive environmental cleanup program in the

United States.

DOE Nuclear Site

Environmental CleanupDefense Department

Environmental Cleanup

EPASuperfund

Program

$1 B

$1.3 B

$6.0 B

Stimulus funds include an additional $6 billion in FY09 &10 for DOE site cleanup

0

20

40

60

80

100

120

140Hanford, 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 BillionSources. DOE 2008, GAO 2005, EIA 2006

Mound, OH$116M

*Does not include NNSA projects

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

More than half of energy research and development spending in FY 2010 is for nuclear and coal.

20%

37%

20%

0

2

4

6

8

10

12

14

FY 09 FY 10 Stimulus

Nuclear$3.3B

Fossil$5.4B

Efficiency$13.4B

Vehicles$906M

ElectricTransmission

$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

ScienceR,D,D&D

$1B Solar$495M

ElectricTransport

$400M Fuel Cells$279M

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

$B

illion

Nuclear$1.7B37.7%

Fossil$881M 19.5%

Conservation $734M16.2%

Vehicles$333M7.4%

Solar$320M7.1%

Biofuels$235M5.2%

Fuel Cells$68 M1.2%

Wind$75M1.6%

Geothermal$50M1%

Water$30 M0.6%

Renewable Energy, Science & Engineering

$115M2.5%

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.

- 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 billionin loan guarantees for

nuclear projects $8 billion in loan guarantees

for coal projects

$78.5 billion inloan guarantees

forrenewablesand electric

transmission

$25 billion forauto

Industry loans

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

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. ”

• 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.

• 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.

• 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.

Conclusion

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.