By on February 14, 2011

The EPA’s National Clean Diesel Campaign and the Department of Energy’s Hydrogen Energy Program have both been defunded in President Obama’s proposed 2012 budget, as the White House focuses on the muchdebated goal of putting one million electric cars on the road by 2015. Bloomberg reports The NCDC budget was cut from $80m in 2010 to zero, even though Obama only just reauthorized $100m per year of grants through the program ten days ago. According to Senator Tom Carper, one of the  sponsors of that re-authorization, the program

leverages federal dollars so efficiently that for every $1 invested, we get over $13 in health and economic benefits in return

Oh well. Meanwhile, fans of the oil-burners imported by the German brands can relax: the NCDC focused on improving diesel emissions from freight, ports and fleets rather than subsidizing Euro-phile sports sedans. Besides, diesel isn’t the only loser in the rush to push plug-in cars to market: hydrogen is also losing out.

The Office of Energy Efficiency and Renewable Energy’s hydrogen technology program is another loser in the proposed budget, losing some $70m in funding according to DOE’s budget briefing. It’s not clear yet what portions of that program will be affected, but it represents a huge shift away from the Bush-era proposal for over a billion dollars in hydrogen fuel cell research.

Needless to say, the pro-clean diesel and pro-hydrogen lobbies are livid over these cuts. The hydrogen crowd took the big-picture approach, arguing

Even the President acknowledged the need for a portfolio approach in his State of the Union address. Just as American leadership in microprocessor technology led to the greatest economic expansion in the U.S. since post-World War II, fuel cells and hydrogen technologies have the transformative power to drive similar economic growth in the Energy Age.

We look to Congress for leadership to ensure the position of fuel cells and hydrogen in America’s clean energy future

The diesel dudes, meanwhile, take a more common-sense approach, arguing

It’s great to invest in something that’s a moon shot, 15 or 20 years from now, but what are you going to do until then? Modest sums to help modernize and upgrade some of these older engines would be dollars well spent.

But the forces of diesel and hydrogen face an uphill battle, as the Obama budget does include $588m in EV funding, the main feature of which would make $7,500 plug-in car consumer tax credits available as a discount at the point of purchase. This proposal will be hugely popular with GM, Nissan and other firms that are ahead of the game on the plug-in front, and could well squelch any opposition from within the auto industry. But this is also merely the first step in the budget process… twists and turns could well lie ahead.

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6 Comments on “EVs In, Diesel and Hydrogen Out In Obama Budget...”

  • avatar

    I’ve got an idea: why not get rid of Energy and EPA?  Then it wouldn’t be a problem.  A million subsidized electric cars no one wants.  What will they think of next?
    Oh well, I noticed that the price of diesel in my area was about 10 cents above high-test.  God knows what this summer will bring.

    • 0 avatar

      I’ve got another idea. The House Republicans remember that its their budget, not Obama’s. They keep some level of electric R&D funding and also fund alternatives like R&D into diesel and hydrogen. They don’t fund consumer car purchase subsidies. Let Government Motors do what Toyota did and take a loss on initial Volts to build recognition and share. let them divert some of that sweet, sweet white collar bonus money to do this.

  • avatar

    Does anyone else smell a potential rat here?  Government consolidating their market-corrupting efforts at pushing EVs over other potential technologies sounds like a sop to special interests, particularly Obama’s new buddy/industry adviser Immelt and GE, potentially other electric industry lobbying groups as well.
    GE is heavily involved in supplying equipment to the electric industry.  My father recently retired from a smallish regional electric utility company that controlled generation and distribution.  He spent the majority of his career doing engineering/installation of capital projects in their distribution network and if I understand his perspective correctly GE has more or less had their lunch eaten in the industrial transformer business by the competitors’ consolidation of the market after the “grid” expansion dropped off a cliff over the past 30-40 years.  Pushing for grid-busting electrical load of electrifying the nations’ transportation method of choice would explode the market for electrical distribution equipment and allow GE to increase sales/revenue without having to compete any more effectively.
    Additionally local utilities are still regulated to the point where they cannot set their own rates without governmental approval in most situations.  Lacking a free hand to increase prices they are left working on ways to sell more kW-hrs and/or justify to their overlords the need for increased rates; i.e. capital outlay for increased capacity.  Both GE and all the players in the generation/distribution business stand to gain a whole heck of a lot by being able to justify higher rates to cover installation of more generation capacity and higher load-carrying capacity including replacement/upgrade/addition of large transformers that GE hasn’t been able to move many of for nearly 40 years.

  • avatar

    How about this… get the government out of picking winners and losers and let the market decide.

  • avatar
    Mike Kelley

    The chance that our government types will make smart choices in this area is about zero.  Money will go to politically connected campaign donors as usual, with GE at the top.

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