Biden’s Budget Pledges $36B for Climate, Nearly Doubling Federal Spending on It

Energy (DOE)Environmental Protection Agency Federal Agency/Executive Branch Federal Legislation Funding/Financing/Investing Opinions Policy White House

June 01, 2021

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(Our Daily Planet) The Biden administration released its detailed budget proposal on Friday and it contained $36 billion in total for climate, a huge increase in climate-related spending. According to the budget justification, the increase of more than $14 billion compared over current spending invests “in resilience and clean energy, enhancing U.S. competitiveness, and putting America on a path to achieve net-zero emissions no later than 2050—all while supporting communities that have been left behind and ensuring that 40 percent of the benefits from tackling the climate crisis are targeted toward addressing the disproportionately high cumulative impacts on disadvantaged communities.” The spending falls into three buckets: Building Clean Energy Projects and Investing in Resilience, Helping Communities Left Behind, and Increasing Competitiveness through Investments in Innovation and Science.

Why This Matters: Biden is making good on campaign promises, with a government-wide mobilization, creating good-paying union jobs building clean energy projects, buying electric vehicles that are made in the U.S.A., remediating abandoned wells and mines and rebuilding aging water pipes, expanding climate observation and forecasting, and putting more than $2 billion toward supporting emissions reductions abroad. And he proposes to pay for it by keeping another promise and ending subsidies to fossil fuels that would have cost billions.

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Tax Incentives Gained and Lost

The fossil fuel industry would lose tax credits for enhanced oil recovery, a method of extraction that allows companies to extract from hard-to-reach areas and for oil and gas from marginal wells, as well as tax credits for “intangible” costs like wages, repairs, supplies, and other expenses. It also eliminates a provision that allows oil and gas companies to deduct as much as 15 percent of the revenue they get from a well from their taxable income. It extends tax credits for wind and solar and other renewable sources, as well as for energy-efficient homes and buildings. And it adds new tax credits for heavy and medium-sized electric vehicles, for the use of sustainable aviation fuels, and enhances credits for carbon sequestration. READ MORE

Biden proposes more than $2B for clean energy infrastructure, $14B+ increase in climate spending (Utility Dive)

THE BUDGET: Biden unveiled his $6 trillion budget proposal on Friday, casting it as a display of the administration’s values on uplifting the middle class and improving American competitiveness. (Politico's Morning Energy)

What Biden's $6T budget plan means for energy (E&E News)

Carbon removal can and must be part of the climate justice agenda (The Hill/Carbon 180)

Rare climate bipartisanship emerges on carbon storage, air capture (Axios)

Iowans pressing for more biofuels language from Biden administration (We Are Iowa)

Excerpt from E&E News: Carbon capture and removal

The administration has already proposed adding the words "Carbon Management" to DOE's Office of Fossil Energy because carbon capture and storage (CCS) will be a key part of its focus. Biden's budget request would dedicate $890 million to the office — an 18.7% increase from 2021's $750 million.

Programs with increased funding from 2021 include CCS as well as "natural gas technologies."

The proposed budget increases for carbon capture and removal reflect the administration's priority to orient the office around its climate goals, said Erin Burns, executive director of climate-focused Carbon180.

She said the budget has a dedicated line for carbon dioxide removal, or CDR, for the first time, listing $63 million for the technology. CDR refers to activities that pull CO2 from the atmosphere, which can then be stored underground or used in products.

"The budget refocuses from traditional fossil-centric activities to climate-centric activities," Burns said.

DOE's "Budget in Brief" document said the "reallocations will enable near-term work to develop and deploy carbon solutions for the power and industrial sectors."

"Immediate action will be taken to locate and mitigate methane leaks, one of the most potent greenhouse gases — coupled with longer term [research and development] to expedite the hydrogen (H2) energy economy," it also said, adding that the investments will be "critical" to meeting Biden's goal of zeroing out electric-sector CO2 emissions by 2035.

There are also proposed budget cuts in areas that don't support a path to net-zero emissions by 2050, such as transformational coal pilots, said Ryan Fitzpatrick, director of the climate and energy program at the think tank Third Way.

"We're not just seeing an increase in carbon capture; we're seeing a reduction in some of the other areas that are not going to get the country on that path to net-zero emissions," he said.

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The budget also highlighted traditional energy sources like oil and gas. The White House request includes $529 million for onshore and offshore oil and gas programs. The Biden administration is proposing cuts in some areas, like a $3.5 million reduction to a BLM program aimed at improving oil and gas permit processing. That was a focus of the Trump administration as it tried to speed up federal approvals for energy projects.

Meanwhile, on enforcement and regulation, the budget proposal requested an extra $18 million for Alaska legacy oil and gas well cleanup — more than Congress appropriated last year. That increase is partly to deal with a legacy well that the U.S. Geological Survey has been using to keep tabs on permafrost temperature in the Arctic but that is now at risk of leaching its diesel and oil-based drilling cuttings at the surface due to the rapid erosion of the Arctic coastline.

The White House is also seeking $30 million to address remediation and reclamation for offshore oil and gas infrastructure and more than $461.3 million to clean up oil and gas wells and abandoned mines, which the administration promises to be a job-creation investment.

Still, one priority area the budget didn't directly illuminate is the future of Interior's oil and gas leasing program, which is still under White House review.

Biden ordered that review in a climate-focused executive order shortly after taking office, driving a wedge between the administration and political allies of the oil industry.

BOEM's "Budget in Brief" notes that "decisions on how to proceed with developing the next National [Outer Continental Shelf] Program will be made in the context of the comprehensive review," referring to its five-year plan for hosting oil and gas lease sales.

Haaland told reporters Friday that an interim report on the program review would be out this summer but declined to offer details.

"We need to make sure the department has a balanced approach to managing our public lands," she said. "We want to ensure that energy programs are run in a fair and transparent manner."

But that doesn't mean oil and gas are out of the picture, another official added.

"The oil and gas program at the Department of Interior will continue to be an essential part of the work of the agency," Daniel-Davis said. READ MORE