An employee arranges copies of President Donald Trump’s fiscal 2018 budget request, America First: A Budget Blueprint to Make America Great Again, at the Government Printing Office library in Washington, D.C., on March 16. Photographer: Andrew Harrer/Bloomberg
By Christopher Smith
Enthusiasm for coal and skepticism toward climate change were two of the themes consistently emphasized by the Trump campaign during the 2016 presidential election. This week the administration unveiled its first budget, ambitiously titled “America First: A Blueprint to Make America Great Again.”As expected, the budget proposes dramatic cuts to the clean energy research and development that was promoted during the Obama Administration. Somewhat more surprising was the 56% cut to the fossil energy portfolio, to include shuttering one of the flagship National Energy Technology Laboratory sites in the heart of coal country.
The Trump Administration has not made a serious effort to rally congressional support for this proposal, so it is unlikely the ideas expressed in this budget will become law. Notably, the Republican led Congress went in exactly the opposite direction in the 2017 omnibus bill by increasing DOE funding to applied energy and science. This budget is dead on arrival, but it should prompt policymakers and stakeholders to examine the appropriate role of government R&D in the area of energy security, environmental stewardship and technological innovation.
Cuts to fossil energy R&D
The 56% reduction in funding to fossil energy R&D – from the $631 million appropriated by congress in 2017 to the proposed level of $280 million – would represent an elimination of major programs and capabilities.
Most of the department’s fossil energy research supports efforts to reduce greenhouse gas emissions from fossil energy systems. The primary focus is on coal fired power plants, but research is also relevant to gas fired generation and industrial sources of emissions such as cement plants, chemical plants and refineries.
The carbon capture and the carbon storage programs support research to separate CO2 from plant emissions for permanent underground storage. The advanced energy systems program conducts research on advanced turbines, fuel cells, and other advanced systems to more efficiently use fossil energy resources. The oil and natural gas program focuses on quantifying the risks that drilling activity may pose to human health and the environment, from induced seismicity to the protection of drinking water.
This research is more relevant now than ever. It is difficult to overstate how much the world has changed over the past eight years with respect to the forces that drive energy supply and demand, particularly in the area of fossil energy. Shale gas has turned a domestic shortage of natural gas into a surplus, reducing the prices that American consumers pay and opening the door to liquefied natural gas exports. At the same time, hydraulic fracturing and other operations associated with shale gas drilling have ignited a debate on safety. Offshore, the 2010 BP oil spill in the Gulf of Mexico put a spotlight on the risks of deep-water drilling.
Perhaps most significant of all was the 2015 global climate conference in Paris, where over 190 countries committed to taking specific steps to address the threat of climate change. This global consensus will continue to impact market forces regardless of the Trump Administration’s decision on whether or not the United States should remain in the accord. Along with the availability of hundreds of trillions of cubic feet of shale gas, pressure to act on climate has permanently impacted the economy in coal producing regions. It’s widely understood that efforts to roll back environmental protections are unlikely to lead to a resurgence in coal production and utilization. To spend billions of dollars building a new coal-fired power plant is to make a wager that the Trump Administration’s fight against restrictions on greenhouse gas emissions will be successful over the twenty or thirty year period that it takes to make a return on these investments.
What is the government’s role?
It is against this backdrop that Congress will consider the 2018 budget request for the Department of Energy. There are some critical challenges which the public sector should meet.
First: Objective science is a prerequisite for effective, common-sense regulations. Government must quantify the risks of exploration and production activities and demonstrate to the public that these risks have been quantified and mitigated. Regulators at the local and federal level must be informed by a government research entity that works with industry to understand new technologies as they emerge. This is not a responsibility that can be outsourced to for-profit companies. To ask Exxon and Chevron to quantify the risks of their own operations would create an obvious conflict of interest.
We have recent, painful experience about the consequences of getting this wrong. The Deepwater Horizon spill in the Gulf of Mexico in 2010 exposed a number of technical and organizational failures in deep-water drilling. Oklahoma is experiencing an unprecedented number of earthquakes stemming from reinjection of wastewater associated with oil and gas operations. From October 2015 through February 2016 almost 100,000 tons of natural gas leaked from an uncontrolled blown-out well in a California gas storage facility. In all of these cases the scientific capabilities of the DOE’s network of national laboratories has been an indispensable tool to state and federal decision makers in responding to the crises and taking steps to prevent future ones. These challenges will continue as our infrastructure system ages and the impact from our changing climate increases.
Second: Government should be conducting research on new technologies and innovations that serve the public interest, but which lie beyond the risk appetite of for-profit companies. Shale gas is an illustrative example. The earliest horizontal drilling, advanced microseismic imaging, and hydraulic fracturing technologies came from government funded research which started in 1978. It was based on data from these efforts that George Mitchell and other early private sector pioneers were able to make their first investments in the Barnett Shale.
This partnership between government and the private sector is particularly critical in coal country. Coal still makes up thirty percent of the electricity that we use in the United States, so meeting our climate goals will require continued innovation in the ways that we reduce, capture, utilize and store CO2 emissions coming from the use of coal. With the leading coal companies succumbing to bankruptcy and utilities reducing their R&D budgets, these technologies will not advance unless the federal government continues to play a leading role.