TL/DR –
The Department of Energy (DOE) is seeing increased federal spending to influence energy markets and subsidize preferred technologies, leading to higher energy costs and growing deficits. The president’s budget request for the fiscal year 2027 includes a decrease in funding for non-National Nuclear Security Administration programs, particularly those related to “green” energy and diversity, equity, and inclusion initiatives, which the author argues have not served the public or generated reliable energy. It’s argued the DOE should refocus on its original purpose (ensuring abundant American energy) while the government should limit its influence over energy markets, focusing on free enterprise and a clear understanding of the proper role of government.
Federal Spending on Energy: The Role of the Department of Energy
The Department of Energy (DOE) has been increasingly utilized as a tool for federal spending to mold energy markets and support selected technologies. Such practices have led to escalated energy costs, expanding deficits, and a bloated bureaucracy that often does not provide useful services.
Last year’s initiative to curb DOE spending was critical for halting a contrived shift towards “green” energy and saving taxpayer dollars. The president’s budget proposal for fiscal year 2027 seeks to continue this restraint, a move that Congress should back.
Breakdown of the 2027 Budget Request for the DOE
The total budget request for FY27 for the DOE stands at $53.9 billion, marking a nearly 10% increase over the previous year. This includes a 12% budget hike for the National Nuclear Security Administration (NNSA), balanced out by an 11% cut in all non-NNSA programs.
The NNSA’s role includes maintaining the nation’s nuclear deterrent systems and supporting defense-related nuclear technologies. The non-NNSA programs, on the other hand, are concerned with energy deployment, subsidies, and policy.
Most of the non-NNSA program reductions are due to decreased funding for DEI-based grants and subsidies for “green” energy sources. It’s a positive move considering these grants and subsidies have failed to benefit the American public or contribute to reliable and affordable energy production.
The Impact of Infrastructure Investment and Jobs Act and Inflation Reduction Act
In recent years, massive legislative packages such as the Infrastructure Investment and Jobs Act and Inflation Reduction Act have funneled tens of billions of dollars into the DOE, leading to the creation of numerous programs aimed at subsidizing wind and solar energy and establishing an energy system reliant on “green” energy sources. However, given the abundance of energy resources in America like coal, oil, and natural gas, transitioning to less dependable wind and solar energy sources at the taxpayer’s expense is not sound policy.
Issues with the Funding Streams
Problems with these funding streams extend beyond just the doubtful goal of “green” energy infrastructure. Some grants have funded planning activities, social advocacy initiatives, and efforts to push forward diversity, equity, and inclusion policy goals.
For instance, the DOE granted $1.5 million to GRID Alternatives to promote “equitable access” to EV charging, supporting discounted charging programs and outreach tied to environmental justice goals.
Moreover, oversight failures have raised concerns about waste and fraud in these programs. A Government Accountability Office review revealed that the DOE has struggled to monitor billions of dollars linked to clean-energy demonstration projects.
Original Purpose of the DOE
The DOE was established during an oil crisis to ensure America’s abundant energy resources. Directing taxpayer money towards DEI initiatives doesn’t align with this original purpose, nor does supporting one energy source at the cost of another.
2027 Budget and the Future of Energy Policy
Against this backdrop, last year’s budget request and Congress’ decision to trim DOE spending and begin eliminating or reducing some of these programs were steps in the right direction.
The FY27 budget proposal continues in this vein, prioritizing national security and the reliability of the energy grid. It restructures funding to avoid subsidizing mature industries, financing large-scale deployment projects, or using taxpayer money to engineer social or economic outcomes.
While the current budget isn’t perfect, as the creation of new offices and an increase in spending compared to last year’s levels warrant scrutiny, its overall direction is sound. The ultimate goal should be to eliminate all federal subsidies, loan guarantees, and other policies used to shape energy markets.
After years of expansion, the DOE is focusing on its core mission again. Spending is being redirected towards areas directly supporting national security and innovation. There’s also a growing recognition that the government cannot and should not, plan our nation’s energy future.
Good energy policy is vital for economic growth and American prosperity. However, this does not stem from increased spending or more federal control over energy resources. It comes from free enterprise and a clear understanding of the government’s proper role.
The Role of Congress in Shaping Energy Spending
Congress faces a choice. It can revert to the status quo of expanding programs and unchecked spending or build on the progress made and pass a budget that trims waste and ensures that DOE funding focuses on areas that benefit Americans and not special interest groups. It should support the president’s budget request and ensure the DOE serves the American people, not Washington’s spending priorities.
This article is based on the insights of Sarah Wagoner, a Policy Analyst in Environmental and Energy Policy at the Heritage Foundation.
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