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Is The U.S. Really A Leader In Clean Energy?

Is The U.S. Really A Leader In Clean Energy?

Without exception, the U.S. Department of Energy (DoE) is all about Atomic Energy Defense (AED). Energy Efficiency and Renewable Energy (EERE), on the other hand, are far from mission critical. To the extent that the DoE’s 2016 budget request allocates 63% to AED activities and only 9% to EERE, energy efficiency and renewable energy programs seem to make good publicity and little else, Figure 1.

The argument is not whether AED is more important than EERE; rather it is a question of the horsepower behind EERE and the Energy Department’s performance in ensuring America’s security and prosperity by addressing its energy, environmental and nuclear challenges through transformative science and technology solutions.

Despite its name, the U.S. Department of Energy spends the bulk of its money and time on managing America’s nuclear weapons stockpile, not investing in new sources of energy.

The DoE states, “the FY 2016 Budget Request includes robust funding levels for clean energy technologies that advance American leadership in nuclear power, fossil energy, renewables, efficiency, and grid security for the 21st century. To sustain the Nation’s primacy in scientific discovery, the Request also increases funding for basic research.”

Figure 1 shows a breakdown by apportions for the Department’s 2015 Enacted Budget and the 2016 Congressional Budget Request; $27.4 billion and $29.9 billion, respectively. The top section is a high-level overview; segmented into five major areas of investments. This is followed by EERE appropriations, which consist of four primary areas: Sustainable Transportation, Renewable Energy, Energy Efficiency, and Corporate Support.

Figure 1

(Click to enlarge)

Source: Department of Energy

Note: differences between requested and enacted are anticipated. For example, the 2015 enacted budget was 1.9% lower than the request. The largest reduction was EERE programs at 17.4%, from $2.3 to $1.9 billion. AED request of $17.7 billion was reduced by $133 million, a mere 0.7% decline.

Key points are (% of total budget):

• EERE allocations of $1.9 billion (7%) and $2.7 billion (9.1%) for 2015 and 2016, respectively;
• AED funding approximately 820% and 600% of EERE Program for 2015 and 2016, respectively;
• RE investments of $456 million (1.7%) and $645 million (2.2%) for 2015 and 2016, respectively;
• EE investments of $642 million (2.3%) and $1.0 billion (3.4%) for 2015 and 2016, respectively; Related: Does Saudi Arabia’s Play For Market Share Make Sense?

Figure 2 illustrates the relationship between the total DoE (red bars) and EERE (blue bars) budget requests from 2000 through 2016. EERE allocations ranged from a low of 1.4% in 2003 to a high of 9.8% in 2014. EERE allocations averaged about 5.8% during the 17-year period, with a slight upward trend in the latter years, though never exceeding 10%.

Figure 2

(Click to enlarge)

Source: Department of Energy FY 2000 through 2016 Congressional Budget Requests

Figure 3 shows 2012 to 2016 EERE budget allocations for 14 programs. Vehicle Technologies received the most funds and Strategic Programs the least. Within RE programs, the lion’s share of investments went to Solar projects. Collectively, the three Corporate Support activities (Facilities and Infrastructure, Program Direction and Strategic Programs) absorbed about 12% of all EERE dollars.

Figure 3

(Click to enlarge)

Source: Department of Energy FY 2012 through 2016 Congressional Budget Requests

Using total RE capacity as a measure of DoE’s effectiveness in transitioning the U.S. to a low-carbon energy future, America’s prowess is unquestioned. According to the Renewable Energy Policy Network, by the end of 2014, the seven countries with the highest capacity of renewable energy (not including hydro power) were China, the U.S., and Germany followed by Italy, Spain, Japan, and India, Figure 4. Related: $40 Oil Not High Enough To Save A Lot Of Drillers

Figure 4
Renewable Power Capacities* in World, EU-28, BRICS, and Top Seven Countries, 2014

(Click to enlarge)

* not including hydropower
Source: REN21. Renewables 2015 – Global Status Report

However, considering investments made in new renewable power and fuels relative to annual GDP, top countries included Burundi, Kenya, Honduras, Jordan, and Uruguay. The leading countries for investment per inhabitant were the Netherlands, Japan, Uruguay, the UK, Ireland and Canada.”

Another, meaningful, measure to determine DoE’s effectiveness in transitioning America to a low carbon-energy future is the share (percentage) of renewable energy (hydro, wind, geothermal and solar) in total electric generation.

This measure gives an entirely different picture from capacity statistics. Figure 5, compiled from data supplied by Enerdata, shows the 2014 share of renewables (including hydropower) by countries. The red bar shows America’s share at 13.7% (about 8% without hydro). Norway with a 98% share of renewable energy is the world leader and benchmark towards 100% renewable energy.

Figure 5

(Click to enlarge)

Source: Enerdata

Of the 44 counties in the study, 26 had a higher percentage of renewables than the U.S. This included such countries as Canada, Romania, Nigeria, China, India, Russia and Mexico. The U.S. share of renewables was also below the average share for the World, OECD, G7, BRICS, Europe, European Union, CIS, America and North America.

Most developed countries showed higher rates of renewables in their energy mix than U.S. Developed countries with lower RE inventories than the U.S. include the Netherlands, Poland, Australia, the Czech Republic, and South Korea. Related: Was Russia’s Syrian Campaign Aimed At Turkish Energy Security?

The other major program under EERE is the Energy Efficiency. Figure 7 shows useful EE statistics from The 2014 International Energy Efficiency Scorecard published by the American Council for an Energy-Efficient Economy. Scorecard evaluates “the energy efficiency of world’s 16 largest economies.

Figure 7: 2014 International Energy Efficiency Scorecard

(Click to enlarge)

Source: American Council for an Energy-Efficient Economy

The analysis finds “the US, long considered an innovative and competitive world leader, has allowed 12 of the 16 countries studied to surge ahead. Germany has the highest overall score. The top-scoring countries in each sector include:

• China in buildings,
• Germany in industry,
• Italy in transportation, and
• France, Italy, and the European Union in national efforts.

The report suggests the U.S. can improve by:

• National Effort – The U.S. Congress should pass a national energy saving target,
• Buildings – The U.S. federal government should strengthen national model building codes,
• Industry – The federal government should support education and training in the manufacturing and industrial sectors, and
• Transportation – The U.S. Congress should prioritize energy efficiency in transportation spending.

The U.S. “made some progress toward greater energy efficiency in recent years, particularly in areas such as building codes, appliance standards, voluntary partnerships between government and industry, and, recently, fuel economy standards for passenger vehicles and heavy-duty trucks.”

In closing, DoE’s performance in transitioning America to an energy efficient and renewable energy economy is rather disappointing when compared to other developed and developing economies of the world. The million-dollar question is “why?” The short answer is renewable energy costs more and is less reliable than traditional energy and significant gains in energy efficiency can be capital intensive.

The long and more plausible answer is fourfold - insufficient funds, politics at play, mismanagement, and lack of accountability. Fixing the problem is simple but politically impossible. The DoE should be taken out of the EERE business since most of its mission is managing nuclear weapons. Transition the cost of the programs to bottom line incentives granted by the IRS, such as Section 1603 Treasury Cash Grant Program. Provide tax deductions for energy efficiency improvements made to new and existing residential, commercial and industrial facilities. If incentives become a point of contention, then stop incentivizing the fossil fuel industry. With these measures in place, America could once again become a leader and help save our planet.

By Barry Stevens for Oilprice.com

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  • Jim Decker on March 31 2016 said:
    Let's face some facts.
    1. wind and solar will never be cost efficient with other sources of energy. Add in all the cost factors- initial capital, depreciation, maintenance, land use, back up power, power storage- and these energy sources make no sense.
    2. The best strategy for the future is to move first to natural gas, then to advanced nuclear and then to nuclear fusion.
    3. What country has the lowest cost for natural gas because of private industry and in spite of the gub'mint? The United States.
    4. What country could have the safest and lowest cost nuclear energy because of such things as nuclear submarine technology? The United States. Of course, something would need to be done about the lawyers and environmentalists. Maybe they are the ones who should get RICO charges filed against them.
    5. What country has a private company that will probably make fusion energy practicle while all the governments in the world spin their wheels? The United States (Lockheed Martin).

    Stop looking at government research as any kind of answer. Government is the problem, not the solution.
  • GregSS on March 31 2016 said:
    Jim: The first 2 are not facts, unless you can predict the future.

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