Proposed Spending Cuts

by Chris Edwards

May 2010

Department of Energy research activities should be terminated. The private sector is entirely capable of performing by itself 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 research subsidies impose a burden on taxpayers, and they can be counterproductive if they steer markets 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 more than $17 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.