Department of Energy

Proposed Spending Cuts

Chris Edwards

May 2010

Department of Energy research activities should be terminated. The private sector is entirely capable of funding its own research into coal, natural gas, nuclear power, solar power, and other forms of energy. Businesses will fund new technologies when there is a reasonable chance of commercial success, as they do in other private industries.

Federal energy subsidies impose a burden on taxpayers, and they can be counterproductive if they steer the marketplace away from the most efficient energy solutions. Furthermore, federal energy research has a track record of poor management, cost overruns, and wasteful boondoggles.

The Strategic Petroleum Reserve and the Power Marketing Administrations should be privatized. The Federal Energy Regulatory Commission should be terminated. Ending all these activities would save taxpayers about $18 billion annually, as shown in the table.

The bulk of the Department of Energy's activities are defense-related. Those activities, which total about $19 billion annually, should be moved to the Department of Defense. That would allow for a more transparent presentation of defense costs in the budget, and it would allow the Department of Energy to be abolished.


Department of Energy
Proposed Spending Cuts
Spending in 2010
($ million)
   Energy Efficiency and Renewables   $9,199
   General Science   $5,772
   Vehicle Technologies   $1,723
   Fossil Energy Research   $1,092
  Technology Loan Guarantee Program   $823
   Nuclear Energy Research   $816
   Power Marketing Administrations   $788
   Electricity Research   $381
   Strategic Petroleum Reserve   $232
   Energy Information Administration   $107
   Other programs and adjustments   ($2,502)
Transfer to the Environmental Protection Agency:
   Nondefense environmental clean-up   $401
   Nuclear waste disposal   $143
Transfer to the Department of Defense:    
   Nuclear Security Administration   $10,441
   Defense environmental clean-up   $8,163
   Uranium-related activities   $699
Total proposed cuts and transfers   $38,278
Total department outlays   $38,278
Source: Estimated fiscal year outlays from the Budget of the U.S. Government, FY2011.