Earlier today, President Obama released his $3.4 trillion budget proposal for fiscal year 2010, setting the stage for the 2010 appropriations process in Congress. The proposal includes many significant increases for renewable energy and environmental programs, along with $17 billion in proposed spending cuts, about half of which come from non-defense spending. Many of these cuts target earmarked programs and will likely face opposition in Congress. Still, leaders on the Hill have expressed their desire to cooperate with the reductions, although many Republicans have criticized the proposal for its high spending levels, spending cuts notwithstanding.

Highlights include:

National Science Foundation: $7.045 billion (an increase of over $550 million), including increases in graduate research fellowships (1200 to 1600), an emphasis on high-risk/high-reward transformative research, climate change and climate change education (K-12 to graduate, in addition to the general public), computer modeling, and clean energy research.

Environmental Protection Agency (EPA): $10.5 billion ($3 billion increase) including additional funding for air, water and climate programs:

• Climate change and clean air (research and development): $249 million ($13 million increase) for implementing the renewable fuels provision in the 2005 Energy Policy Act, researching criteria air pollutants and developing federal clean air standards, and studying the effects of air pollutants on human health.
• Climate change and clean air (programs and management): $481 million ($19 million increase) to fund greenhouse gas reduction efforts as well as the development of a comprehensive climate change strategy, a mandatory greenhouse gas reporting rule, and a plan for achieving federal clean air standards.
• Compliance and environmental stewardship research funding: $47 million ($4 million increase)
• Clean Water and Drinking Water State Revolving Funds: $2.4 billion and $1.5 billion, respectively (compared to $689 million and $829 million in 2009). The funds finance low-interest loans to help states construct water treatment facilities. The budget proposal specifies that at least 20 percent of the funds are to be used for green infrastructure or projects aimed at increasing water or energy efficiency.
• Science and technology funding (clean and safe water initiatives): $168 million ($22 million increase). The initiatives would help small communities meet new drinking water standards and fund research on the risks that carbon capture and sequestration activities pose to water resources
• Science and technology funding (land preservation and restoration): $36 million ($12 million increase).
• Environmental programs and management (healthy communities and ecosystems): $981 million (a more than $300 million increase). The increase is largely due to the $475 million Great Lakes Restoration Initiative, which is aimed at combatting aquatic invasive species, contaminated sediment, and nonpoint source pollution in the lakes.
• The budget proposal will also fund research on beach evaluation tools, particularly those pertaining to controversial beach renourishment projects.

The proposal eliminates several local and regional programs that duplicate broader federal efforts. Cuts include:

• A competitive grant program for local communities to reduce greenhouse gas emissions. ($10 million)
• Earmarked funds for California to retrofit existing diesel engines ($15 million)
• Water infrastructure earmarks ($145 million)

Energy Department (DOE): The proposal maintains 2009 spending levels ($26.4 billion) for DOE, citing the almost $40 billion provided earlier this year in stimulus funding. Still, the proposal calls for some reshuffling of funds, resulting in boosts for several renewable energy and efficiency programs. A number of nuclear programs would be phased out. Of particular note:

• Yucca Mountain: The proposal would do away with the nuclear waste repository, redirecting its previous allotment toward exploring alternative sites.
• Office of Energy Efficiency and Renewable Energy: $2.32 billion, including $320 million for solar energy programs, $75 million for wind energy, $235 million for bio-energy, and $334 million for vehicle technologies.
• Office of Science: $4.94 billion (compared to $4.77 billion in 2009). The office, which Energy Secretary Steven Chu has named a top priority, would see boosts in a number programs, including those in basic energy sciences..
• Nuclear energy research: $762 million ($30 million reduction). The proposal would phase out a number of nuclear programs, including the Nuclear Power 2010 program and the Nuclear Hydrogen Initiative, while boosting funding for the Generation IV program, which supports international collaborations aimed at developing next-generation reactors.
• Environmental cleanup programs: $5.5 billion in new appropriations, which would be go toward cleaning up contamination from Cold War nuclear weapons production.
• Fossil-energy program: $618 million. This represents a significant drop from 2009 levels, although the program received $3.4 billion in stimulus funding. The 2010 funds will be directed largely toward “clean coal” research. Oil technology research will not be funded under the proposal, which gives the private oil industry the responsibility of financing research that it says provides little public benefit.
• Oil industry tax breaks: $26 billion reduction over the next decade. The proposal reflects Obama’s vows to end billions of dollars in oil industry tax breaks, although these cuts will likely meet strong opposition from Republicans and oil-state Democrats.

Interior Department: $12 billion, in addition to $3 billion from the stimulus package.

• US Geological Survey: $1.1 billion for surveys, investigations and research—a slight increase over 2009 levels
• Wildland fire management: $900 million (a $40 million increase) plus $75 million for a new contingency reserve fund to be tapped if that money runs out. The proposal also states that the administration will reform Interior and Forest Service wildfire management practices to improve oversight, accountability, and decision making.
• Fish and Wildlife Service: $1.6 billion, including $476 million for refuges, the highest spending ever for the system. The National Wildlife Refuge System has struggled in recent years due to underfunding.
• National Park Service: $2.7 billion, with $2.3 billion for operating the park system (a $200 million increase), $98 million for land acquisition (a $33 million increase), and $78 million for historic preservation (a $10 million increase). The Park Service will see some cuts in construction ($27 million less, although construction projects received $589 million from the stimulus) and national recreation and preservation ($54 million, compared to $60 million in 2009).
• The Bureau of Land Management: $1.1 billion, with $975 million for management of land and resources (an $85 million increase) and $25 million for land acquisition (a $10 million increase). Spending for construction and the Oregon and California Grant Lands account will remain roughly at 2009 levels.

Agriculture Department (USDA): $26 billion, including $20 billion for rural development activities.

• Forest Service: $4.93 billion ($200 million increase). In spite of numerous cuts throughout USDA, most major Forest Service line items will see small increases, which are aimed at protecting resources and infrastructure restored with the $1.15 billion provided by the stimulus package. State and private forestry initiatives are set to receive $306 million (a $40 million increase); forest and rangeland research will receive $301 million (a $5 million increase). Funds for land acquisition, however, will be cut nearly in half, falling from almost $50 million in 2009 to $28.6 million in 2010.
• Wildland fire management: $2.238 billion (a more than $100 million increase), including $328 million for hazardous fuels reduction activities, $11.5 million for rehabilitation and restoration, $23.9 million for research activities, and $55 million for state fire assistance.
• Rural Energy for America Program (REAP): $128 million (four times the program’s highest funding levels, and twice the amount mandated in the farm bill). The loan guarantee and grant program helps farmers, ranchers, and small rural businesses start energy development or efficiency projects on their property. REAP also finances wind power and biorefinery incentives.
• Budget cuts: The proposal cuts 17 USDA programs, including several dealing with farm subsidies and crop insurance, as well as two popular conservation programs: Watershed Protection and Flood Prevention Operations and Resource Conservation and Development. Although the administration asserted that the programs were not cost-effective, Congress has disputed similar cuts in the past.

National Oceanic and Atmospheric Administration (NOAA): $4.479 billion for NOAA, compared to $4.4 billion in 2009. NOAA received $600 million in the stimulus package.

• National Environmental Satellite Data and Information Service: $1.43 billion (a $200 million increase), which will include increased funding for polar and geostationary satellite acquisition and financing for a satellite to monitor sea level rise.
• Office of Atmospheric Research: $487 million, which will include increased funds for ocean acidification monitoring, the development of an integrated drought early warning system, and a “public data portal for climate models.”
• National Ocean Service: $487 million, including increased funding for coastal zone management.
• National Marine Fisheries Service: $891 million.

Amid ongoing negotiations to secure votes and GOP demands for additional hearings, Representatives Henry Waxman (D-CA) and Ed Markey (D-MA) postponed the subcommittee markup of their draft energy and climate bill, which had been scheduled to start last week. Waxman says he still plans to have a bill out of committee by his Memorial Day deadline, which could require going straight to the full committee without subcommittee markup. Many of the subcommittee’s Republicans and conservative Democrats have voiced their concerns about fast-tracking the process, although many other lawmakers have been sympathetic, noting the numerous time constraints placed on the bill. For now, the details of the markup schedule remain vague.

The draft bill’s stalling has raised a number of questions about its viability. Potential barriers to passage include:

Concerns about passage in the Senate: Climate legislation is less likely to pass in the Senate, where the Democratic majority is slimmer—some lawmakers are questioning whether it might be wiser to delay floor action. In spite of these concerns, House Majority Leader Steny Hoyer (D-MD) has stated that House Democrats will continue to move forward with attempts to pass a bill this year. Meanwhile, Senate Majority Leader Harry Reid (NV) said he plans to wait for House action on climate and energy before putting it on the Senate schedule: "I'm anxious to see what the House comes up with," he said. "I think we're going to follow them, and not do anything until they get theirs done."

Concerns from Republicans: The delayed subcommittee vote came partly in response to Republican requests for another set of hearings. One of the principal GOP concerns, the allocation of emission allowances, is left vague in the draft, prompting Representatives Joe Barton (R-TX) and Fred Upton (R-MI) to argue that additional hearings will only be productive after Democrats produce legislative language explaining their allocation process. But with Democrats still divided on the topic, a vote could be a week or more away.

Concerns from moderate Democrats: Democrats are divided along regional and political lines, with fiscally conservative or industry state Representatives remaining on the fence about the bill. Rick Boucher (D-VA), who has been a leader among the committee’s more moderate Democrats, recently met Waxman to discuss four major issues: the stringency and timetable of the cap-and-trade program's emission limits, the use of offsets to ease industrial compliance costs, the allocation of emission allowances, and the details of the nationwide renewable electricity standard.

In an effort to achieve a consensus among liberals, President Obama recently invited the 36 Democrats on the Energy and Commerce Committee to a White House meeting, where he urged them to reach an agreement by Memorial Day so they could redirect their attention to health care reform. Obama also said he would be open to providing industry with some free emissions credits as a way of reducing the economic impact of the transition period and protecting trade-sensitive industries. This represents a departure from the President’s budget proposal, which called for all allowances to be auctioned. Many of the bill’s proponents hope that White House intervention and guidance will give it some additional traction among fence-sitters.

In the Senate, Majority Leader Harry Reid (D-NV) has announced plans to address climate and energy legislation in a single bill. Until recently, the Senate had planned to handle the issues separately, but following a meeting with House Speaker Nancy Pelosi (D-CA), Reid decided to adopt the House approach. Although many lawmakers support combining the bills, a move they say will lead to more balanced legislation, others are more skeptical. Climate change legislation will be much harder to move than an energy package, raising concerns that the more contentious issue of cap-and-trade may bog down efforts to act on important energy issues.

Senate Energy and Natural Resources Chairman Jeff Bingaman (D-NM) is leading the current energy effort. His committee is currently reviewing a number of prominent issues, including a renewable energy standard (RES), a national transmission or “smart” grid, carbon capture and storage, and clean energy financing. A new national grid is of particular importance, since many alternative energy projects set to receive funding from the 2009 stimulus package require an updated transmission system. Although markups for the transmission section of Bingaman’s bill were recently postponed, the Senator plans to move the legislation as quickly as possible, and is concerned that climate negotiations will not be able to keep pace.

Meanwhile, lawmakers are working to craft the oil and gas section of the bill, which could include a major new assessment of offshore energy from both fossil fuels and renewable sources. In an April report, the Interior Department called for an inventory to fill data gaps identified on a number of offshore energy and environmental issues (For more information, see the April 2 edition of the ESA Policy News at:

http://www.esa.org/pao/policyNews/pn2009/04022009.php). Although there is bipartisan agreement on the importance of an inventory, many Republicans also want to open up new drilling areas in the immediate future, before additional data collection takes place.

The Senate Environment and Public Works Committee is preparing to review a bill aimed at clarifying language in the Clean Water Act (CWA) to better protect wetlands. S 787, sponsored by Senator Russ Feingold (D-WI), follows two Supreme Court Decisions (Rapanos-Carabell in 2006 and Solid Waste Agency of Northern Cook County v. US Army Corps of Engineers [SWANCC]in 2001) that confused or limited CWA jurisdiction over wetland permitting. The CWA grants the federal government authority over “navigable waters” and bodies of water that are connected to navigable waters. The 2006 casesaddressed whether landowners could develop over wetlands that were either distantly linked to (Rapanos) or completely isolated from (Carabel) traditional “navigable waters”; SWANCC questioned federal authority over “intrastate and isolated waters” that provided habitat for migratory birds crossing state lines.

Proponents of Feingold’s bill say that the Supreme Court rulings narrowed or obscured CWA jurisdiction over more isolated wetlands, arguing that there are necessary ecological ties between wetlands and other natural resources, regardless of hydrological connectivity. To more explicitly acknowledge these ties, the bill would replace “navigable waters” with “waters of the United States” in the CWA, and would insert the following definition:

“The term  ‘waters of the United States’ means all waters subject to the ebb and flow of the tide, the territorial seas, and all interstate and intrastate waters and their tributaries, including lakes, rivers, streams (including intermittent streams), mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, natural ponds, and all impoundments of the foregoing, to the fullest extent that these waters, or activities affecting these waters, are subject to the legislative power of Congress under the Constitution.”

The bill’s opponents are concerned that it extends beyond the intent of the CWA and would result in lawsuits and problems for farmers and developers. Although the bill has yet to acquire any Republican cosponsors, lawmakers expect divisions to be most pronounced along regional rather than party lines. Lawmakers from agricultural states, for example, are particularly concerned about the bill’s repercussions on constituents.

In the House, Transportation and Infrastructure Chairman James Oberstar (D-MN) plans to reintroduce a companion bill this session.

Meanwhile, the Obama administration has expressed its support for the legislation. Environmental Protection Agency (EPA) Administrator Lisa Jackson recently pointed to ambiguity over wetland permitting as a significant drain on EPA resources, and called upon Congress to more clearly define federal jurisdiction over the matter. The agency estimates 20 million acres of wetlands and isolated waters lost protection as a result of the ambiguous Supreme Court decisions.

On May 5, the Environmental Protection Agency (EPA) released a draft rule to implement the 2007 expansion of the national biofuels mandate. The mandate, which expanded the national renewable fuels standard to reach 36 billion gallons by 2022, also set limits on the lifecycle emissions of biofuels (the total emissions resulting from production, refining, and use). It requires biofuels to have lower lifecycle emissions than gasoline—20 percent less for corn-based ethanol and 50-60 percent less for advanced biofuels. According to EPA Administrator Lisa Jackson, ethanol currently represents only a 16-percent improvement over conventional gasoline, although there are numerous ways to improve performance. Still, the requirement, which applies only to plants constructed after 2007, is largely symbolic: The mandate limits annual ethanol production to 15 billion gallons, and existing plants are already on track to produce 10 billion gallons this year.

There has been a great deal of debate over what “lifecycle emissions” should encompass,  following studies showing that indirect land-use changes—clearing land to accommodate the agricultural demands of biofuels—will release stored carbon. For more information, see the March 5 edition of the ESA Policy News at: http://www.esa.org/pao/policyNews/pn2009/03052009.php

EPA does not take a stance on the issue in its draft rule, but will instead seek formal peer review of its methods for assessing emissions from land-use changes. Additional information is available at the EPA website: http://www.epa.gov/OTAQ/renewablefuels/index.htm#regulations

The EPA rule coincided with an Obama administration announcement of the new Biofuels Interagency Working Group. The group, to be led by the secretaries of Energy and Agriculture and the EPA administrator, will be tasked with the following:

• Creating a comprehensive market development program, to aid retail marketing and increase production of flex-fuel vehicles
• Improving and coordinating infrastructure policies affecting the supply, transport and distribution of fuels. The National Commission on Energy Policy recently released a report showing that infrastructure to deliver fuels is at risk of lagging behind increased production
• Developing policy ideas for reducing the environmental impact of growing biofuels, including land-use, natural resource conservation, water efficiency, and lifecycle emissions

Obama also called for the Department of Agriculture to accelerate the biofuel spending authorized in the 2008 farm bill. More than $1.1 billion will be available for investments such as loan guarantees for building and retrofitting biofuels refineries, grants for demonstration-scale projects, and funding for biofuels producers to produce next-generation biofuels from nonfood feedstocks. The Energy Department will direct an additional $786 million from the economic stimulus package towards next-generation biofuels research, development, and production.

Open for Public Comment:

• Presidential Memo on Scientific Integrity: On March 9, President Obama issued a memorandum requiring the Director of the Office of Science and Technology Policy (OSTP) to develop guidelines for ensuring scientific integrity among executive departments and agencies. These guidelines are to address the following:
• The selection of science officials based on their “knowledge, credentials, experience, and integrity”
• Agency-specific rules for ensuring integrity, including whistle-blowing procedures and protections
• The use of established scientific processes (e.g. peer review) to evaluate scientific information considered in policy decisions
• Transparency: agencies should make scientific information used for policy decisions available to the public (exceptions may be made for information restricted from disclosure)

OSTP is requesting public input to aid in developing the guidelines—visit http://edocket.access.gpo.gov/2009/E9-9307.htm for more information. The comment period ends May 13, 2009.

Just Introduced

• Border Conservation: Representative Raúl Grijalva (D-AZ) recently proposed legislation requiring the Department of Homeland Security (DHS) to consult with federal land managers and local and state governments along the border to minimize the environmental impacts of border security measures. The bill would address two existing bills: the 2005 Secure Fence Act, which has resulted in the construction of fences through protected habitat, public lands, and tribal areas along the US-Mexico border; and the REAL ID Act, which gives fence construction priority over other federal or state laws, including the National Environmental Policy Act and the Endangered Species Act. Former DHS Secretary Michael Chertoff exercised the waiver authority on four occasions. Grijalva introduced similar legislation in 2007—although it stalled in committee, he hopes it will gain more traction with President Obama in office. During his campaign, Obama vowed to reevaluate border control efforts based on local interests, including environmental concerns.

Under Subcommittee Review

• Southern sea otter recovery (HR 556): The Oceans and Wildlife Subcommittee is currently reviewing legislation to enhance southern sea otter conservation efforts by requiring the Fish and Wildlife Service (FWS) to institute a research and recovery program, identify ways to reduce limitations on population growth, and award competitive grants for research on the species. Acting FWS Director Rowan Gould advised the subcommittee that although his agency supports the bill’s intent, without extra money it could hinder existing efforts to protect other imperiled species in California.
• Reauthorization of marine turtle protection (HR 509): Also under review by the Oceans and Wildlife Subcommittee is a bill to extend a marine turtle protection program for an additional five years. The program, which directs the Interior Department to allocate a portion of the multinational species funds for marine turtle conservation, is set to expire this year.

Passed by Committee

Wild horse protection (HR 1018): The House Natural Resources Committee recently cleared legislation calling for an overhaul of the Bureau of Land Management (BLM) strategy for managing the 34,000 wild horses and burros under its care. The bill, which is largely in response to a recent BLM announcement that inadequate funding and space could force the agency to slaughter thousands of animals, would protect healthy animals from slaughter, expand the areas on which they can roam and create sanctuaries for them on federal lands. These measures raised objections from western Republicans, who are concerned that most of this new habitat will be in their home states, placing demands on constituents as well as existing wildlife populations in the area. They also argued that the bill does not adequately address alternative management practices like mass sterilization. In response, the committee adopted several GOP amendments, including ones to permit the removal of the horses in the event that they threaten water quality or wildlife, or conflict with energy and minerals development

• International Science Research (HR 1736): On April 29, the House Science Committee unanimously approved legislation to strengthen international cooperation for science and technology research. The bill would reinstate the Committee on International Science, Engineering, and Technology (CISET), and task it with developing inter-agency policies for establishing cooperative research partnerships abroad. CISET, which was created during the Clinton presidency but disbanded under former President George W. Bush, would fall under the jurisdiction of the National Science and Technology Committee, part of the White House Office of Science and Technology Policy.

Passed in the House

• Water Research (HR 1145): On April 23, the House voted 413-10 in favor of legislation to better coordinate water research and development efforts among the 20-some federal agencies that deal with water. Also approved were several amendments to the bill, including ones to expand research aimed at limiting water and energy consumption, predict long-term ice cover and water levels for major water bodies, and include water storage projects in the bill’s research and development plan. Senator Bill Nelson (D-FL) is considering sponsoring a Senate version of the bill.