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Government Shutdown Damages U.S. Energy Innovation

The Capitol Energy Report with Matthew Stepp

The federal government has officially shutdown as of midnight, October 1st, 2013 due to Congress’s failure to pass a budget. The 2013 fiscal year ends on September 30th and the government required a new budget to continue operations. The government has been operating on a Continuing Resolution – a CR, or an extension of the previous years budget, since 2012.

While coverage of the shutdown will focus on the political circus that is fueling it and the thousands furloughed from their jobs, it is also important to note that it is directly impacting America’s overall energy innovation capacity. In the short-term, many of the nation’s premier energy innovation institutions will scale-down or shutdown completely, while a few will continue to operate using carryover funds. That means the longer the shutdown drags on, the less research America will produce, and the fewer next-gen energy technologies and fundamental scientific discoveries. In other words, a prolonged shutdown threatens overall U.S. international competitiveness and progress towards a low-carbon advanced energy system.

Specifically, the following energy-related institutions and programs are being directly impacted by the government shutdown:

Impacts on Existing Fossil Fuel Energy Infrastructure

  • The Interior Department has halted permits and permit reviews for onshore and offshore oil and gas leases. While existing permits would still be inspected, the shutdown is halting existing lease payments to the Treasury.
  • The Bureau of Land Management has stopped development of first-of-its-kind regulatory rules for hydraulic fracturing on federal lands. It has also halted all law enforcement of existing regulations on drilling.
  • The EPA has stopped work on its recently announced greenhouse gas regulations for power plants, which could create increased uncertainty in energy markets.
  • The Department of Energy is slowing review of applications for exporting liquefied natural gas and may have to stop all reviews if the shutdown drags on.
  • DOE-run Power Administration’s, such as Bonneville and Southeastern Power, would be run under previous budget allocations until fully expended, at which point each will use a skeleton crew unless a major storm or issue arises and requires additional staff.

Impacts on the Development of Next-Generation Clean Energy

  • The Bureau of Ocean Energy Management has stopped all new offshore wind demonstration project permitting.
  • The Department of Energy’s leading research and technology development offices, such as the Office of Science and the Office of Energy Efficiency and Renewable Energy, are currently being run by a skeleton crew, dramatically decreasing stewardship of the National Labs and program management of nearly $5 billion in clean energy innovation projects. The NNSA – which manages the country’s nuclear stockpile – would continue to be managed by 343 essential personnel.
  • The shutdown will directly impact National Lab research if it is prolonged. Most Labs have enough carryover funds from the existing 2013 budget to fund Lab staff for between weeks or up to a month, depending on the Lab. After those funds are exhausted, non-security-related research would need to be halted.
  • ARPA-E, the Department of Energy’s high-risk, high-reward breakthrough energy technology program is completely shut down. For example, it is not able to advance or manage the recently announced 33 energy projects to advance low-carbon transportation technologies. Also completely shutting down is the Office of Electricity Delivery and Energy Reliability, which is working to advance the nations electric grid.
  • Research activities at NIST and NOAA, including climate and weather research, material science, nano-science, and energy science, have been stopped.
  • NASA energy and earth-systems research is halted, along with almost 98 percent of the agencies total staff.
  • The Patent and Trademark Office will be able to stay open for at least a month until it also has to shutdown, which would act as a significant barrier to innovation of all kind, including energy.
  • Non-essential research and procurement at the Department of Defense, such as investments in clean energy (roughly $1 billion worth), is halted which is slowing down development of next-generation batteries, microgrids, and power electronics as well as early markets for solar panels on bases. This includes DOD research contracts with external companies.
  • Non-federal scientists can continue working on existing DOE, NIST, and National Science Foundation research grants, such as those working in Universities, but no new research grants will be given.

Because many believe the current shutdown won’t last long and the long-term impacts will be minimal, it’s easy to lose sight of what’s at stake. The federal government is a cornerstone of energy innovation and its investments are critical to the global economy running on cheap, clean energy just as much as its critical to the lights turning on in today’s fossil-fuel driven economy.

Political gamesmanship and gridlock is already deeply harming America’s ability to innovate and create breakthroughs in clean energy technologies due to budget cuts and sequestration. The government shutdown is just the latest – and harshest – reality of a governing body unable to invest in the future. If the shutdown extends to days, significant impacts will certainly be felt, as researchers stay out of the labs and technology projects remain idle. If it extends longer, America’s overall standing as an energy innovation leader begins to be chipped away. The ball is in Congress’s court not only to turn the government’s lights on and let the country’s leading energy innovators get back to work, but also to reverse a staggeringly chilling trend of not aggressively supporting energy innovation.

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Discussions

Michael Berndtson's picture
Michael Berndtson on October 1, 2013

Nicely said. You covered a fair chunk of the spectrum of what’s involved and who’s impacted – regardless of one’s favorite flavor of power generating source.

Joris van Dorp's picture
Joris van Dorp on October 2, 2013

I think this shutdown highlights one of the major problems with driving energy innovation during troubled economic times. It is difficult to push for austerity on the one hand, while funding expensive and risky energy innovation developments on the other.

In my country (The netherlands) billions of dollar per year will be expended in subsidies for intermittent renewable energy, even while cuts are being made in all manner of public services, in order to balance the budget. In future, far more cuts will be needed as interest rates and healthcare costs rise. But in order to reach low-co2 energy targets, subsidies for intermittent renewables will also need to rise far more. These developments cause increasing stress and do not seem sustainable.

In order to reach low-co2 performance in countries struggling with mamoth public and private debts, it is necessary to focus on low-cost low-co2 technologies. That would be advanced nuclear power. But curiously, nuclear power development is deeply underfunded and no effort is made even to remove institutional barriers, let alone financial barriers.

We are setting ourselves up for failure on the front to prevent climate breakdown. Anti-nuclear ideology is the cause.

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