Fiscal 2018 budget blueprint reflects Trump’s energy priorities

The Trump administration’s Fiscal 2018 Budget Blueprint would increase or preserve discretionary expenditures for programs connected with fossil energy amid an overall 11.7% year-to-year reduction at the US Department of the Interior. It also would eliminate spending for advanced energy research at the US Department of Energy amid a 5.6% cut overall, and slash Environmental Protection Agency spending by 31.4%.

The blueprint fell short of a complete budget proposal because it did not include estimates of taxes and other revenue to offset expenditures. It nevertheless confirmed the White House’s priorities, particularly since its $52.3 billion, or 10%, increase in US Department of Defense spending would be made up by spending reductions elsewhere.

“Our Budget Blueprint insists on $54 billion in reductions to non-Defense programs. We are going to do more with less, and make the government lean and accountable to the people,” President Donald J. Trump said in his message to Congress in the spending proposal’s opening pages.

“This includes deep cuts to foreign aid,” Trump said. “Many other [federal] agencies and departments will also experience cuts. These cuts are sensible and rational. Every agency and department will be driven to achieve greater efficiency and to eliminate wasteful spending.”

The spending proposals also reflected the president’s pledges during his 2016 election campaign to move more regulatory responsibility to states.

They did not specifically mention either the Federal Energy Regulatory Commission or the Pipeline and Hazardous Material Safety Administration, which have significant impacts on oil and gas transportation. The US Chemical Safety Board, an independent agency which investigates major refining and chemical plant incidents, would not be funded.

Interior specifics

DOI’s authorized spending would total $11.6 billion, $1.5 billion less than the $13.2 billion for the fiscal year ending Sept. 30, 2017. “The budget requests an increase in funding for core energy development programs while supporting DOI’s priority agency mission and trust responsibilities, including public safety, land conservation, and revenue management,” the blueprint said. “It eliminates funding for unnecessary or duplicative programs while reducing funds for lower priority activities, such as acquiring new lands.”

Funding would be increased by an unspecified amount for programs that support environmentally responsible energy development on public lands and in offshore waters.

“Combined with administrative reforms already in progress, this would allow DOI to streamline permitting processes and provide industry with access to the energy resources America needs, while ensuring taxpayers receive a fair return from the development of these public resources,” the blueprint said.

It indicated that stewardship capacity at the US Bureau of Land Management, Fish and Wildlife Service, and National Parks Service would be supported in a budget that streamlines operations while continuing to provide necessary resources to protect public lands and recreation areas.

Office of Natural Resources Revenue funding would be sustained because the agency collects and disburses roughly $10 billion/year from federal mineral resource development to the US Treasury, states, and Native American tribes. Funding for programs the administration considers unnecessary, lower priority, or duplicative would be eliminated.

More than $900 million of expenditures would be authorized at the US Geological Survey for essential programs including the Landsat 9 ground system and “research and data collection that informs sustainable energy development, responsible resource management, and natural hazard risk reduction.”

Proposals for DOE

The blueprint would authorize $28 billion of discretionary expenditures at DOE in 2018, $1.7 billion less than 2017’s $29.7 billion. “The budget for DOE demonstrates the administration’s commitment to reasserting the proper role of what has become a sprawling federal government and reducing deficit spending,” the blueprint said.

It said it would rely on the private sector to fund later research, development, and commercialization of technologies and focus resources on early-stage R&D. This effectively would continue the strategy at DOE’s National Energy Technology Laboratories where basic research in the 1980s and ‘90s led to deployment of unconventional technology domestically from 2004 onward in a US oil and gas renaissance.

The blueprint also would eliminate Advanced Research Projects Agency-Energy, the Title 17 Innovative Technology Loan Guarantee Program, and the Advanced Technology Vehicle Manufacturing Program “because the private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies,” it noted.

While authorized expenditures would be reduced by $900 million from 2017 levels, budgeted outlays would let DOE’s Science Office invest in the highest priority basic science and energy [R&D] as well as operation and maintenance of existing scientific facilities for the community,” the blueprint noted. R&D outlays in the Fossil Energy and other DOE offices would be focused “on limited, early-stage applied energy research and development activities where the federal role is stronger,” it added.

The blueprint also would increase authorized expenditures at the National Nuclear Safety Administration by $1.4 billion, or 11% from the fiscal 2017 level. This would support a goal of moving toward a responsive nuclear infrastructure and advancing the existing program of record for warhead life extension programs through elimination of defense sequestration, it suggested.

Reductions at EPA

The White House proposed $5.7 billion of authorized expenditures at EPA, $2.6 billion less than 2017’s $8.2 billion. Funding would be eliminated for President Barack Obama’s Clean Power Plan, international climate change programs, climate change research and partnership programs, and related efforts for a more than $100 million projected savings.

“Consistent with the president’s America First Energy Plan, the budget reorients EPA’s air program to protect the air we breathe without unduly burdening the American economy,” the blueprint said.

It would try to limit Chemical and Hazardous Waste Superfund administrative costs and emphasize efficiency efforts by funding the Superfund Account at $762 million, $330 million less than in 2017. The agency would prioritize the use of existing settlement funds to clean up hazardous waste sites and look for ways to remove some of the barriers that have delayed the program’s ability to return sites to the community, according to the blueprint.

It also aimed to reduce duplication by concentrating EPA’s enforcement of environmental protection violations on programs that are not delegated to states, while providing oversight to maintain consistency and assistance across state, local, and tribal programs. This would reduce EPA’s Enforcement Office by $129 million year-to-year to $419 million.

Its Research and Development Office would spend about $250 million, $129 million less than in 2017, by prioritizing “activities that support decision-making related to core environmental statutory requirements, as opposed to extramural activities, such as providing [Science to Achieve Results, or STAR] grants.”

Categorical Grants would total $597 million, $492 million less than in 2017, in line with a broader strategy of streamlining environmental protection by eliminating or substantially reducing federal involvement in state activities that go beyond what the administration considers EPA’s statutory requirements.

Funding for specific regional programs such as the Great Lakes Restoration Initiative would be eliminated for a $427 million savings. “The budget returns the responsibility for funding local environmental efforts and programs to state and local entities, allowing EPA to focus on its highest national priorities,” the blueprint said.

More than 50 programs, including Energy Star and infrastructure assistance to Alaska Native villages, would be eliminated for a $347 million savings. “Lower priority and poorly performing programs and grants are not funded, nor are duplicative functions that can be absorbed into other programs or that are state and local responsibilities,” the blueprint said.

Contact Nick Snow at [email protected].