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ENERGY AND ENVIRONMENT WITHIN THE FINAL FISCAL STIMULUS PLAN

February 20, 2009

Energy and environment provisions were arguably the least contentious
among the the many measures contained within the overall stimulus
package and, beyond minor differences of opinion among lawmakers on
size and scope, enjoyed considerable bi-partisan support throughout
the Congressional process leading up to passage.  As a result,
spending allocations and tax incentives first floated in the earlier
House bill remained mostly intact in the final conference version,
although with an overall net decrease from the original proposal.

Energy spending in particular was heavily promoted in the lead-up to
final Congressional approval and was framed by President Obama and
Democratic leaders as an important "downpayment" towards America's
eventual transition to a "clean energy economy" and as a catalyst for
significant job creation.  The energy theme was also front and center
during the actual bill signing ceremony in Denver where President
Obama was introduced by the CEO of solar-panel manufacturer, Namaste
Solar.

The approved energy funding under the American Recovery and
Reinvestment Act is expected to be rolled out quickly and DOE's
Secretary Chu has announced that he has assembled a team to begin
streamlining ways in which to disburse programs monies.  This will be
a daunting undertaking: DOE's Office of Energy Efficiency and
Renewable Energy (EERE) alone is charged with dolling out some $17
billion, a nearly tenfold increase over its 2008 budget.

While most of the attention of the environmental community has been on
the energy provisions of the stimulus package, a wide range of other
environmental projects also stand to receive new or increased funding
under the plan.  These include projects related to science and
technology, parks, water infrastructure, cleanup of hazardous sites,
and wildfire prevention.  For the most part, the provisions of the
final stimulus package closely resemble the draft package first
discussed in the House, with reductions to the amount of funds for
most provisions. An exception is funding for nuclear waste cleanup,
which received a significant boost in the final version of the text.

ENERGY ($43.75 billion)
Highlights follow ('↑' = increase/'↓' = decrease, when compared to original House bill):

Energy Efficiency and Renewable Energy - $18.45 billion (↓)

• $6.3 billion to States/local governments for renewable energy
  and energy efficiency initiatives (↓) - $3.2 billion in block grants
  assist local governments in implementing energy efficiency and
  conservation programs and $3.1 billion for DOE's State Energy Program
  (SEP), which provides grants and funding to state energy offices for
  energy efficiency and renewable energy programs.
• $5 billion for home weatherization (↓) - to assist low-income
  families in making their homes more energy efficient through
  insulation improvements, etc.
• $4.5 billion for Federal Buildings (↓) - for renovations and
  repairs to federal buildings to increase energy efficiency and
  conservation.  Target is 75% of all federal buildings.
• $600 million to upgrade government vehicle fleets
  (federal/state/local) to alternative fuel automobiles (unchanged).
• $500 million for "green" jobs training (unchanged) - for
  research, labour exchange and job training projects to prepare workers
  for careers in energy efficiency and renewable energy industries
• $400 million for electric transportation (↑) - funding towards
  the Plug-In Electric Drive Vehicle Program, which provides grants to
  state and local governments and others to carry out projects to
  encourage the use of plug-in electric drive vehicles
• $300 million for more efficient home appliances (unchanged) -
  consumer rebates to purchase Energy Star products.
• $300 million for diesel emissions reduction (unchanged) - loans
  and grants directed to state and local governments to retrofit exhaust
  systems in school buses, replace engines and vehicles and to establish
  anti-idling programs. 70% of these monies would be in the form of
  competitive grants and 30% to fund grants to states with existing
  programs.
• $300 million for Defense research (↓) - aimed at developing
  renewable energy systems to power weapons and bases.
• $250 million for housing retrofits (↓) - new funding to expand
  existing US Housing and Urban Development (HUD) program to fund energy
  efficiency improvements for low-income housing.  Funds to be awarded
  on a competitive basis.

Renewable Energy - $10.5 billion (↓)

• $6 billion for renewable energy power generation and
  transmission (↓) - loan guarantees for projects that would begin
  construction before Sept. 9, 2011. The Act increases from 20% to 50%
  the maximum level of funding support to qualifying smart grid
  technology.  Guarantees will be directed towards renewable energy
  systems and facilities that manufacture related components, along with
  electric power transmission systems designed for renewable energy
  sources.
• $2.5 billion for renewable energy research and energy efficiency
  projects (↑) - grants and loans for energy efficiency and renewable
  energy research, development, demonstration and deployment activities
  to reduce carbon emissions and cut utility bills.  Funds to be awarded
  on a competitive basis to universities, companies and national
  laboratories.
• $2 billion for advance battery grants (unchanged) - directed to
  the Advanced Battery Grants Program to support US manufacturers of
  advance vehicle batteries and battery systems and to help position the
  country as a technological leader in this field.

Smart Grid - $11 billion

• $4.5 billion for R&D, pilot projects and federal matching funds
  for the Smart Grid Investment Program to modernize the electricity
  grid.  Emphasis will be placed on enhancing grid efficiency, security
  and reliability and also on building new power lines to transmit
  clean, renewable energy from sources throughout the US.
• Includes $3.25 billion each in borrowing authorities for the
  Bonneville Power Administration and  the Western Area Power
  Administration to construct transmission for renewable energy. Note:
• S&T - $400 million
• Towards the Advanced Research Projects Agency - Energy (ARPA-E)
  to support high-risk, breakthrough research on energy sources and
  energy efficiency.

$3.4 billion for fossil energy R&D (↑)

• for carbon capture and sequestration demonstration projects and
  technology research authorized under the 2007 Energy Independence and
  Security Act.

ENVIRONMENT ($24.3 billion)
Highlights follow ('↑' = increase/'↓' = decrease, when compared to earlier House bill):

S&T - $600 million

• $600 million will go to the National Oceanic and Atmospheric
  Administration (NOAA), including for climate modelling.  This amount
  for NOAA is unchanged, but the mandate for using the funds has been
  broadened to include a larger range of repair, weather forecasting,
  and satellite investments.

Public Lands and Parks - $2.5 billion (↓)

These funds will be allocated to restoration, preservation, cleanup,
and other infrastructure projects on federal lands, such as
rehabilitation of abandoned mines and oil fields.  Disbursement of
funds will include:

• $750 million for the National Park Service
• $320 million for the Bureau of Land Management
• $280 million for National Wildlife Refuges and National
  Fish Hatcheries
• $650 million for the Forest Service

Water and Water Resources - $13.54 billion (↓)

• $4 billion for upgrading wastewater treatment systems
• $2 billion for drinking water infrastructure loans
• A further $1.38 billion for rural waste and drinking water
• $4.6 billion for the Corps of Engineers to undertake
  environmental restoration, flood protection, hydropower, and
  navigation infrastructure projects
• $1 billion for the Bureau of Reclamation for water supply in
  rural and drought-stricken areas
• $340 million for the National Resources Conservation Service for
  flood protection, water quality, dam repair, and conservation
  easements
• $220 million to repair flood control systems damaged by
  Hurricane Katrina and other serious storms along the Rio Grande

Environmental Cleanup - $7.13 billion (↑)

• $600 million for cleanup of hazardous and toxic waste sites,
  prioritized by EPA
• $200 million for cleanup of petroleum leaks from underground
  storage tanks at approximately 1,600 sites
• $6 billion for cleanup of sites previously used for nuclear activities
• $230 million for NOAA habitat restoration projects
• $100 million for cleanup of industrial and commercial brownfield sites

Reducing Wildfire Threats - $515 million (↓)

• $515 for hazardous fuel removal and other efforts to prevent wildfires