Putting his money where his mouth is: What Obama’s budget proposal says about his energy views

Time and time again, Obama is criticized in the newspapers, on TV, and especially on the internet for his energy policy. “Obama hates big oil [2],” is an enemy for American solar panel production [3], and hates coal and nuclear [4]. Depending on where you get your news, some seem to have you believe Obama hates every form of energy, America in general, and about everything else under the sun. He did, however, recently propose a 3.7 trillion dollar budget [1]. He couldn’t have neglected energy all together, could he? Some of that money must have been allocated to the energy sector, right? He can’t possibly be an enemy of all things energy, can he?

The answers are, no, he did not neglect energy, yes, he did allocate a whole mess of money to the energy sector, and no, he is certainly not an enemy of all things energy in the least bit. Before you get too worked up, let me make it clear that this blog entry is not intended to be political in nature, and I am not trying to persuade you to approve of or support Obama. The purpose is to briefly dissect how the current president plans to spend money in the energy sector, and to see what he feels is important for the future of energy in America.

The first take-away from the budget is that the president wants solar power to be affordable. The budget allocates 3.2 billion for renewable energy technology projects. More specifically, it includes a “ShunShot” initiative, which aims directly to reduce the cost of solar cells [1]. The index cost for residential solar electricity is March 2012 is around 30 to 60 cents per kWh (depending on sunny vs cloudy climate) [5], as opposed to 3 to 6 cents per kWh from the utility company. The president (and most reasonable people) agrees that making solar panels cost-competitive is the first step to making them widely adopted.

Another big component of the budget was $588 million for electric vehicle infrastructure. Obama has been a proponent of electric vehicles since taking office, and his $7500 tax credit for new electric vehicle purchases (part of the stimulus package) back that up. He is now suggesting making the $7500 tax credit a tax rebate so the money would be available to buyers immediately at the point of sale. By continuing the electric vehicle discounts, and pumping new money into electric vehicle research, Obama is showing that he still thinks EVs are the cars of the future [1].

Finally, the budget calls for an additional $36 billion in loan-guarantees for new nuclear power plants. Under Obama, the NRC approved construction of a new nuclear power plant for the first time since the 1970s [6]. Now that the NRC is approving construction of new nuclear power plants, the biggest hurdle is finding funding for the multi-billion dollar projects. Allocating billions of dollars in loan guarantees proves that Obama supports nuclear power, and is doing what he can to create more of it in the US [1].

In summary, Obama’s budget proposal revealed a lot about his true views about energy in the United States. Obama is a proponent of renewable energy and is willing to put a lot of money towards funding innovation in the field. In particular, he must like solar power if he is willing to create an initiative geared directly towards making solar power affordable. Obama hasn’t waivered in his views that electric vehicles are the automobiles of the future, and he is using government money to try to make them more affordable (until auto manufacturers can do so themselves). Also, since US automakers are some of the leaders in electric vehicle technology, funding innovation is helping big US companies, which will hopefully, in the future, help the American economy. Finally, Obama is a big supporter of nuclear energy and is trying to expand its use in the US.


[1] http://voices.washingtonpost.com/44/2011/02/budget-2012-energy-department.html

[2] http://commonsensewonder.blogspot.com/2011/02/left-obama-hates-big-oil-thats-core.html

[3] http://www.reuters.com/article/2012/03/20/us-usa-china-solar-idUSBRE82J0Z420120320


[5] http://www.solarbuzz.com/node/244

[6] http://www.reuters.com/article/2012/02/09/us-usa-nuclear-license-idUSTRE8181T420120209





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