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PRI's Environmental News Magazine

The Budget

Air Date: Week of February 18, 2011

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Steven Chu is the Secretary of the Department of Energy. (Los Alamos National Laboratory)

President Obama’s budget reduces funding for most federal agencies but the Department of Energy is looking at a 12 percent increase. Energy Secretary Steven Chu tells host Bruce Gellerman that his agency will prioritize financing for clean energy development, including new nuclear facilities.


GELLERMAN: From the Jennifer and Ted Stanley Studios in Somerville, Massachusetts, this is Living on Earth. I’m Bruce Gellerman. Congress and the White House are still struggling over the budget for the rest of this year – trying to figure out how to tackle the deficit - and pay to keep the government running. But as required by law, the President has unveiled his budget for next year - and it essentially freezes spending.

Well, the President proposes - and Congress disposes - and Congressman Paul Ryan, chair of the House budget committee, is not disposed to approve of the President's proposal.

RYAN: This is not a moderate budget. This is not a triangulation budget. This is a budget that went to the left. It would be better doing nothing than if we would actually pass this budget. For the sake of our economy, for the sake of our future, and for the sake of jobs.

GELLERMAN: But President Obama says creating jobs and the economy of the future are precisely his priorities - though for agencies and departments that regulate the environment, there are pains and gains. The President wants to cut 13 percent from the Environmental Protection Agency’s 10 billion dollar budget. Hardest hit are clean water programs. EPA administrator Lisa Jackson:

Environmental Protection Agency Administrator, Lisa Jackson. (EPA)

JACKSON: There's no moving away from a greener more sustainable economy. And that commitment remains. It's a tough year, but I think this budget continues an incredible legacy of support from President Obama for this agency.

GELLERMAN: Over at the Department of Agriculture, the President proposes cutting more than 3 billion dollars - much of it by eliminating subsidies to wealthy farmers. One of the few budgets the President wants to increase is the Dept of Energy - boosting it by about 12 percent. Dr. Steven Chu is the Secretary of Energy.

CHU: There was a lot of hard decision made on the overall budget. And the budget proposed for 2012 was a budget which actually put a freeze on the overall spending. There was a determination made, and I think it’s the right call, that in times of austerity, that the last thing you want to do is stop the things that will lead to future prosperity.

It’s the old expression - it’s as if you’re designing an airplane that looks like it’s overweight and the way to trim the weight is to take off an engine.

GELLERMAN: You have big boosts for things like electric vehicles, you have, what, 80 percent increase to nearly 600 million dollars for R&D for advanced vehicles.

CHU: That’s a good example of how to compete to win the future. All around the world, countries and companies take note that we expect great advances and better technologies and system technologies for plug-in and hybrids and electric vehicles. You start with a 100-mile range, but soon graduate to 200, 300, 400-mile range on a single charge.

The companies and the countries that develop that technology will have a world market. We do not want to be importing these cars. We want to be building them in America and exporting them to the entire world.

Steven Chu is the Secretary of the Department of Energy. (Los Alamos National Laboratory)

GELLERMAN: But it’s companies that will make a profit. Why don’t they pay for it?

CHU: What we’re proposing is to do research and development - not today’s batteries that are going into the Chevy Volt, that’s something that should be done by the sector and it has been taken up quite nicely. But we’re proposing a new generation of batteries, which is very basic research and development that could help. Again, other countries are aiding their companies in getting the lead in this technology.

GELLERMAN: In terms of conventional fuels though, subsidies through the Department of Energy for fossil fuels are getting sliced by 44 percent. They’ll still be nearly half a billion dollars, but that’s a big chunk out of fossil fuel subsidies.

CHU: That is somewhat of a legacy, and you have to ask yourself, in 2011, do companies who are making tens of billions of dollars of profit each year really need those subsidies? Then you look at what are the new things coming on the block: photovoltaic advances that could really dramatically lower the price.

Again, it’s going to be a race, among countries and companies to see who can drive those prices down, and make them much more efficient where the target is that they can compete for energy generation with fossil fuels without subsidy.

GELLERMAN: I wanted to ask you about the federal loan guarantees to nuclear power plants - the construction of new nuclear power plants. In your proposed budget for 2012, you’re asking for seed money to basically start 36 billion dollars in loan guarantees.

CHU: That’s correct. We want to restart the nuclear industry. We think that nuclear power in this century will be an essential part of the mix of power generation. It’s clean power generation. And, quite frankly, we want to restart our nuclear industry to get back in the game.

China – worldwide now, ground has been broken on about 50 nuclear reactors, of which China is building half of them. There’s an anticipation worldwide to have a nuclear renaissance. That you can build these nuclear reactors that will be far safer than the earlier ones, and it’s also about energy security and clean energy.

GELLERMAN: I believe there’s a line-item in the President’s FY 2012 budget for something I find kind of curious - modular nuclear power plants.

The Department of Energy is investing in modular nuclear reactors like this. (The Nuclear Former)

CHU: Yes. These are called small modular power plants - at the scale of let's say, 100 megawatts instead of 1,000 or 1,500 megawatts. And that can be done and built in a factory in a single location, and not only shipped around the United States, it could be shipped around the world. And again, this is where we can regain leadership in the nuclear industry.

And so, the Department of Energy is very enthusiastic about trying to support the research and development, and also the engineering work that could lead to licensing. And so, this idea of continuing this innovation chain, starting from basic discoveries to inventions to ideas for things that go onto the private sector is something the President and I feel very strongly about.

GELLERMAN: Dr. Steven Chu is the Secretary of the Department of Energy. Secretary Chu, thank you very much, really appreciate it.

CHU: Alright. Thank you!



Click here to hear a longer interview with Steven Chu

Dan Reicher from the Stanford Center on Energy Policy and Finance talks about the DOE budget.

Highlights from the 2012 budget


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