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A mixed budget bag for the environment -- Wind makes gains but so does coal while solar suffers

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Wind power has made some modest gains in President George Bush's proposed fiscal year 2003 budget, a stark contrast to last year when the new administration came out swinging with a plan to slash federal wind research and development (R&D) funding by half. "The Bush Administration has seen the light," says Jaime Steve of the American Wind Energy Association (AWEA). "What we saw a year ago was an administration that came in trying to cut the budget, not just for wind but for renewables in general, and we've educated them to understand these are positive investments that pay off large dividends."

The Republican president's proposal for wind totals $44 million out of a $2.13 trillion budget plan that focuses heavily on military and national security spending and forecast's the nation's first deficit in four years. Bush is asking for a $5.4 million increase in the wind budget, or 14%, over the $38.6 million actually appropriated for 2002.

Despite the increase, says Steve, the Bush plan is only a step in the right direction, especially when stacked up against the plan to allocate $326 million to clean coal research and $71.5 million for nuclear R&D, a 35% increase over last year. "We believe the wind development research program deserves far larger support that it's getting," says Steve. "We can see $55 or $60 million could easily be spent in an effort toward developing turbines that could be used in lower wind speed areas." In fact, the Bush budget specifically shifts the focus to less windy areas. "Advancement in this area could dramatically expand the application of this technology and expand wind energy use throughout the country," budget documents say.

The Bush proposal also allocates $9.5 billion over ten years to tax incentives aimed primarily at encouraging energy efficiency and use of renewables, a package that includes a three-year extension of the wind Production Tax Credit. Although the wind industry is "pleased to be there," says Steve, the budget proposal is two years short of what AWEA has sought. "That's where the administration was last year as well, but the real decision on the duration of the credit is going to be made on Capitol Hill." Congress adjourned for 2001 without agreeing on an economic stimulus package that contained a two-year extension of the tax credit. Attempts to pass similar legislation in the new year collapsed in the Senate in early February, when rival Republican and Democratic proposals failed to gain the majority of votes necessary to move forward.

In mid-February, the Senate Finance Committee acted on a package of energy tax items that included a five-year extension of the wind credit. "However," admits Steve, "the tax items are one component of a very broad-ranging energy policy bill which is not very likely to become law this year. That's the good news and the bad news."

Despite the setbacks, Steve insists, the PTC will be extended this year and points to the broad bipartisan support it has garnered. "Congress has already decided it will extend the wind tax credit. The question is when and how." The key to a long term, stable wind policy, says Steve, lies in a comprehensive national energy policy. But with the US industry in limbo waiting for action on the PTC, AWEA is also pushing for a more immediate solution. "We're looking short term and long term. We're looking for a short term immediate extension, and then a longer term extension in the national energy policy debate, which may take a year or so to get through."

Mostly bad

Wind's budget advances are part of what one environmental group called a "mixed bag for the environment." While federal support for oil and gas R&D was cut by 57% to $58 million, the proposed budget also reduces funding for solar energy by 2% and geothermal energy by 3%. That, combined with the millions allocated for coal and nuclear power research, says Christopher Sherry, research director for the Safe Energy Communication Council, shows the administration's priorities are in the wrong place.

"What we need is increased support for the emerging clean renewable technologies of the 21st century, not an obsolete energy policy reliant on coal and nuclear power," says Sherry. While the budget, overall, proposes a $10 million boost to funding for renewable energy and efficiency programs to $1.312 billion, the US Public Interest Research Group points out the allocation includes large increases in funding for hydropower and for hydrogen, which is not all renewably generated.

The budget still seeks to link funding of renewable energy programs to a controversial plan to open a small part of the Arctic National Wildlife Refuge to oil and gas exploration. Bush proposes devote $1.2 billion of the bonus bid receipts received for drilling in the refuge on renewable energy.

Bush's budget proposal is only the first step in a long budgetary process that will see both houses of Congress pass their own budget legislation before settling on a final package. Political reaction to the president's plan, with Democrats saying it would produce ruinous deficits and some conservative Republicans vowing to counter with a balanced budget, suggest it could be months before final budget is approved.

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