Obama seeks clean energy, pipeline funds in budget

WASHINGTON Mon Feb 13, 2012 6:36pm EST

WASHINGTON (Reuters) - The White House proposed more funds for renewable energy and pipeline safety in the 2013 budget while renewing the call to end subsidies for the oil and gas sector.

The budget for fiscal year 2013 proposes $27.2 billion for the Department of Energy, a 3.2 percent increase of what Congress enacted last year, and includes $2.3 billion for research and development for energy efficiency, advanced vehicles and biofuels.

The proposal on clean energy research funds represents nearly a 30 percent increase from the amount enacted last fiscal year. It also shows President Barack Obama is not backing off renewable energy despite last year's controversy with Solyndra, the solar company that went bankrupt after receiving $535 million in federal loan guarantees from the Department of Energy.

It increases the size of a state pipeline safety grant program within the Department of Transportation by 50 percent, and devotes money to modernize pipeline data collection and improve U.S. investigations of pipeline accidents.

"To lead in the industries of tomorrow, it is critical that we invest in research and development today," the budget said.

In the election-year budget that has little chance of surviving in Congress, President Barack Obama called for the repeal of some $4 billion a year in tax breaks for oil and gas companies. This has long been a goal of Obama's but it has been staunchly opposed by Republicans.

The budget proposes to revamp the Department of Transportation's Pipeline Safety program after a series of high-profile oil pipeline spills last year. It seeks $248 million for the Pipeline and Hazardous Materials Safety Administration, up $76 million from last year.

It also increases the size of a state pipeline safety grant program by 50 percent. The pipeline funding could be one of the pieces of the budget to survive in Congress. Obama signed a popular pipeline safety bill into law last year that included higher fines for spills and authorized more inspectors.

The budget for the DOE also provides $770 million for research in advanced small nuclear reactors.

It proposes $350 million in funding in the DOE's Advanced Research Projects Agency-Energy program, an increase of more than 27 percent over the amount Congress allotted it last year.

EFFICIENCY FOR MILITARY

The budget tucks about $1 billion for energy conservation investments in a Department of Defense program, up from $400 million in 2010. The DOD, which is the world's largest energy consumer, is increasing its exposure to renewable energy, which now makes up 8.5 percent of its energy output and procurement, the budget said.

The White House put more focus on clean energy in the DOD program as it seeks to put the Solyndra controversy behind it.

Including funding for clean energy in the Pentagon's budget could help shield the administration from Republicans who say the government should not be in the business of picking technologies. Few lawmakers would argue the country does not need to reduce the energy dependency of military aircraft, tanks and ships.

The DOE budget includes $12 million to fund a research program to improve safety of natural gas development including hydraulic fracturing, or fracking. The technique allows drillers access to vast new supplies of natural gas but critics say it has led to pollution of air and water.

The DOE would work with the Environmental Protection Agency and the U.S. Geological Survey to focus on reducing the environmental, health and safety risks from fracking.

To fund development of offshore oil and natural gas, the White House proposed $386 million, an increase of $28 million over what was enacted last year, to fund new bureaus in the Department of the Interior charged with overseeing offshore oil and natural gas development.

The money would help hire new inspectors, engineers and scientists to monitor oil drilling, improve oil spill research, and review company oil spill response plans.

(Reporting By Timothy Gardner; Editing by Lisa Shumaker)