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Analyzing Obama’s Budget

A good read from the Heritage Foundation on Obama’s budget and the Obama Energy Tax:

Obama’s Energy Budget: A Revenue Neutral Cap and Trade System?

President Obama released his fiscal year 2011 budget this morning; his budget provides $28.4 billion for the Department of Energy (DOE) and $10 billion for Environmental Protection Agency (EPA). Both sections in the budget reflect the president’s message in the State of the Union address delivered last week: a government attempt to facilitate America’s transition to a clean energy economy.

Highlights of the DOE budget include:

$36 billion for Nuclear Loan Guarantees: Many are writing that nuclear is one of the big winners this year because of the $36 billion in new loan guarantees, but $18.5 billion in authorized loan guarantees already exists to provide predictability after years of erratic regulatory hurdles. Extending the loan guarantee program is not only unnecessary but will also crowd out technological development within and across the nuclear industry by artificially reducing the capital cost for large, lightwater reactors. In reality, a loan guarantee extention could prevent a dynamic, robust nuclear industry by reducing the need to innovate and create private sector solutions to financing.

$4.7 billion for Clean Energy: Obama’s budget calls for a five percent increase for the energy efficiency and renewable energy section which includes funding for solar, biofuels, advanced vehicle technologies and energy efficiency improvements in buildings. Research and development may be a plausible role for the government, but much of this money is being spent on private sector responsibilities. The reason the private sector isn’t investing in these technologies (without help from the government) is a telling sign that these energy sources aren’t economical. One project that is still many years away from commercialization is carbon capture and sequestration (CCS). The clean energy section also includes $545 million for clean coal technologies, most notably carbon CCS. Even after the extraordinary technological and economic hurdles have been cleared, the political and environmental obstacles to storing tens or hundreds of millions of gallons of liquid CO2 each day must be overcome.

The rest here.

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