DOE Budget Earmarks: A Selective Look at Energy Efficiency and Renewable Energy R&D Programs

CRS Report for Congress
DOE Budget Earmarks: A Selective Look at
Energy Efficiency and Renewable Energy
R&D Programs
March 3, 2006
Fred Sissine
Specialist in Energy Policy
Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

DOE Budget Earmarks: A Selective Look at Energy
Efficiency and Renewable Energy R&D Programs
Appropriations earmarks for the Department of Energy’s (DOE’s) Energy
Efficiency and Renewable Energy (EERE) programs have tripled from FY2003 to
FY2006. According to the Executive Office of the President and the private
American Association for the Advancement of Science (AAAS), this affects the
conduct of programs and may delay the achievement of goals. Further, the
Administration has proposed new funding for hydrogen, biomass/biorefinery, and
solar energy initiatives proposed under the American Competitiveness
Initiative/Advanced Energy Initiative (AEI).
The report discusses the potential impact of congressional earmarks on EERE
research and development (R&D) programs and, in particular, whether continued
high levels of earmarks could lead to new cuts in staff and dilute the desired impact
of the AEI initiatives under EERE, should Congress decide to fund them.
The congressional debate over earmarks centers on the transparency of the
process, with a focus on earmarks not initially approved in either chamber that appear
in a bill’s conference report. Opponents contend that the earmarking process is not
open, fair, or competitive. Proponents say it is a legitimate practice and is justified
by policymakers’ knowledge of local needs, as it spreads research money to
deserving states and institutions.
The appropriation figures cited as “earmarks” in this report are those labeled by
DOE budget requests as “congressionally directed activities” and, for FY2006,
appear to be completely consistent with figures in the FY2006 Energy and Water
Development (E&W) conference report that are labeled as “congressionally directed
projects.” In this regard, the earmark figures in this report appear consistent with the
definition of a congressional appropriations earmark as “funds set aside within an
account for individual projects, locations, or institutions.”
This report will be updated as events warrant.

Background ......................................................1
Definition of Earmark..........................................1
Debate over Earmarks..........................................1
DOE Energy Efficiency and Renewable Energy Earmark Funding............2
Impacts of Earmarks...............................................3
National Renewable Energy Laboratory............................3
American Competitiveness Initiative...............................4
Advanced Energy Initiative......................................5
AEI Compared with EERE Earmarks..............................5
Some Questions for Congressional Consideration........................6
List of Figures
Figure 1. DOE Earmark Funding for Renewables, Energy Efficiency,
and Electricity ................................................8
List of Tables
Table 1: Earmark Funding Trends for EERE and OE......................3
Table 2. Earmark Funding Compared with AEI Proposals..................6
Table 3. DOE EERE and OE Earmarks, FY2005-FY2006..................6

DOE Budget Earmarks: A Selective Look at
Energy Efficiency and Renewable Energy
R&D Programs
Definition of Earmark
In general, there is no single, accepted, and specific definition of the term
earmark for the congressional appropriations process, nor is there a standard practice
for earmarks.1 However, for funding provided by Energy and Water Development
(E&W) Appropriations laws to the Department of Energy (DOE), this report defines
an earmark as “funds set aside within an account for individual projects, locations,
or institutions.” In the FY2006 E&W appropriation law, earmarks were labeled as
“congressionally directed projects”2 and most often appeared in the joint explanatory
statement of the conference report.3 Accordingly, DOE budget request documents
usually refer to earmarks as “congressionally directed activities” and often report on
them in separate account lines under the functional energy area to which the earmarks
are applied.4
Debate over Earmarks
There is a general debate in Congress over earmarks, in which a key concern is
the transparency of earmark activities in the deliberative process. Critics of the
current earmarking process argue that it is not the subject of open debate and that the
number of earmarks has grown rapidly. A “dear colleague letter” that seeks to
change the process says,
We believe the process of earmarking undermines the confidence of the
American public in Congress because the practice is not open, fair, or5
competitive and tends to reward the politically well-connected.
Opponents further contend, as noted in the letter above, that it is wrong to take an
earmark provision that survives neither the House or the Senate version of a bill and,

1 CRS Report 98-518, Earmarks and Limitations in Appropriations Bills, by Sandy Streeter.
2 For example, see the FY2006 E&W Conference Report, H. Rept. 109-275, p. 143.
3 CRS Memorandum, Earmarks in Appropriations Acts: FY1994, FY1996, FY1998, FY2000,
FY2002, FY2004, FY2005, by CRS appropriations team, p. 16.
4 For example, see the FY2007 DOE Budget Request, vol. 3, pp. 23, 145, 180, 181, 250, 320.
5 Dear Colleague Letter from Senators Coburn and McCain on Earmarks, Jan. 25, 2006,
p. 2.

nevertheless, have it inserted into a conference report. This, they say, “stifles debate”
and unfairly empowers well-financed lobbyists.
Supporters of earmarking generally agree on the need for more transparency, but
they counter-argue that earmarks are not inherently wrong, nor should they be
forbidden by rules of congressional process. At a February 2006 hearing on the
subject, one proponent said,
[The Constitution] placed the responsibility for making spending decisions, not
in the Executive Branch, but in the Congress.... Congress has always had the
final say on that issue. Some would say that the earmarking process has been
abused in recent years and I would agree, especially in cases where earmarks are6
inserted into Conference Reports that have not been scrutinized by either body.
In general, proponents agree that some modification of the process may be needed,
but otherwise contend that earmarking is legitimate under the Constitution and is
justified because elected officials are better able to make decisions about funding for
local needs than program managers in the executive branch.7
DOE Energy Efficiency and Renewable Energy
Earmark Funding
In a review of the FY2006 DOE budget, the American Academy for the
Advancement of Science (AAAS) examined earmarks for DOE energy research and
development (R&D) programs and found that
... earmarks eat up whatever increases there are for most energy programs and cut
deeply into core R&D programs. Energy R&D earmarks total $266 million in
2006, more than double the previous record from last year, and make up one out
of every five R&D dollars. But they are especially concentrated in some areas,
including biomass R&D where they make up more than 50% of total program
funds, hydrogen (27%), and wind energy (33%), ratios far higher than in
previous years. As a result, there will be enormous cuts to competitively8
awarded R&D grants in those areas.
Table 1, below, shows the funding trends for earmarks under programs in
DOE’s Office of Energy Efficiency and Renewable Energy (EERE) and DOE’s

6 U.S. Congress, Senate Committee on Rules and Administration, Hearing to Examine
Procedures to Make the Legislative Process More Transparent, [
hearings/2006/020806_hearing.htm], Feb. 8, 2006. Statement of Chairman Trent Lott, p.


7 Legislation to increase the transparency of the earmarking process has been introduced by
proponents (e.g., S.Res. 365) and by opponents (e.g., S. 2265).
8 AAAS, R&D Earmarks Hit New Record of $2.4 Billion, Up 13 Percent (R&D Funding
Update), Jan. 4, 2006, p. 5, []. AAAS defines an
R&D earmark as “congressionally designated performer-specific R&D projects not included
in agency budget requests.”

Office of Electricity Delivery and Energy Reliability (OE). These trends are
illustrated in Figure 1, at the end of this report. The table shows that EERE funding
earmarks have more than tripled, from $46.0 million in FY2003 to $159.0 million in
Table 1: Earmark Funding Trends for EERE and OE
($ millions)
Office of Energy Efficiency andFY2003FY2004FY2005FY2006
Renewable Energy (EERE)
Renewable Energy34.044.852.082.6
Energy Efficiency12.135.434.076.4
Total 46.0 80.2 85.9 159.0
Office of Electricity DeliveryFY2003FY2004FY2005FY2006
and Energy Reliability (OE)
Electricity R&D26.028.635.163.3
Electricity Restructuring3.
Total 30.0 28.6 51.3 66.7
Sources: DOE Budget Requests FY2005, FY2006, and FY2007 and H. Rept. 109-275.
For FY2006, Table 3 (below) shows a $30.7 million increase in renewable
energy R&D earmarks, including increases of $16.4 million for Biomass &
Biorefinery, $8.3 million for Wind Energy, and $4.1 million for Solar Energy. Of the
$42.5 million increase for energy efficiency R&D earmarks, nearly half ($20.3
million) was for Vehicle Technologies. Also, Table 3 shows a $28.8 million
increase for Electricity R&D earmarks under the Office of Electricity (OE).
Impacts of Earmarks
National Renewable Energy Laboratory
In early February 2006, the National Renewable Energy Laboratory (NREL)
issued a press release stating that FY2006 earmarks for EERE programs had left it
with a $28 million gap in its operating funds, forcing NREL to cut 32 staff positions
in hydrogen, biomass, and basic research programs.9 The FY2007 DOE Budget

9 NREL Pressroom. Budget Shortfall Forces Renewable Energy Laboratory to Lay Off 32
Staff. February 7, 2006. 1 p. []

Request shows that the EERE share of NREL’s budget was reduced from $182.5
million in FY2005 to $161.6 million in FY2006, a $21 million (or 13%) reduction.10
However, in late February 2006, DOE announced that an additional $5 million
had been sent to NREL to immediately restore all 32 positions. DOE transferred the
funding from other accounts and announced that it was working with Congress to
restore funds to those accounts through several means, including the “deobligation
of funds provided to several congressionally directed projects in 2001 and 2002 that
have failed to make progress.” DOE further noted, “Should Congress fully fund the
President’s FY2007 request, unencumbered by earmarks, NREL should be able to
maintain a vibrant and stable workforce in the future.”11
American Competitiveness Initiative
In the State of the Union Speech given in January 2006, President Bush
announced the launch of the American Competitiveness Initiative (ACI), which
would increase support for R&D and technological innovation, including certain
energy initiatives,12 to help stimulate economic growth.
The Administration’s ACI document expresses concern about the potential for
earmarks to impede the proposed initiatives. Consistent with the previously noted
definition, it defines earmarks as “the assignment of science funding through the
legislative process for use by a specific organization or project.” It says,
... the practice signals to potential researchers that there are acceptable
alternatives to creating quality research proposals for merit-based consideration,
including the use of political influence or appeals to parochial interests. The
rapidly growing level of legislatively directed funds undermines America’s13
research productivity.
ACI contends that this type of funding is “rarely the most effective use of taxpayer
On the other hand, some proponents argue that R&D earmarks help spread the
research money to states and institutions that would receive less research funding
through other means. Also, some supporters of earmarking contend that earmarks

10 DOE. FY2007 Budget Request. Laboratory Tables Preliminary. February 2006. p. 68.
11 DOE. Office of Public Affairs. DOE Transfers $5 Million to NREL, Jobs to be Restored.
(Press Release) February 20, 2006. 1 p. []
12 Executive Office of the President. Office of Science and Technology Policy. Domestic
Policy Council. American Competitiveness Initiative: Leading the World in Innovation.
February 2006. p. 13.
13 ACI, p. 11. The same points are echoed in the Budget of the United States Government
Fiscal Year 2007, Analytical Perspectives, February 2006, p. 46.

provide a means for funding unique projects that would not be recognized by the
conventional peer-review system.14
Advanced Energy Initiative
A key component of ACI, the Advanced Energy Initiative (AEI), proposes new
initiatives for several energy technologies.15 In particular, it embraces key
initiatives16 for hydrogen, biomass/biorefinery, and solar energy17 that are reflected
in the FY2007 DOE budget request as major funding increases for corresponding
host programs under the Office of Energy Efficiency and Renewable Energy
(EERE). 18
AEI Compared with EERE Earmarks
Table 2 shows the FY2006 funding earmarks for the Hydrogen,
Biomass/Biorefinery, and Solar Energy programs at EERE. It also shows the
proposed FY2007 funding increases for AEI’s hydrogen, biomass/biorefinery, and
solar energy initiatives under those programs. The table shows that the FY2006
earmarks are nearly equal to the proposed increases for the hydrogen and
biomass/biorefinery initiatives; for the solar energy program, however, the total
earmark is much smaller than the proposed AEI increase.

14 Budget of the United States Government Fiscal Year 2007, Analytical Perspectives,
February 2006, p. 46.
15 The White House, National Economic Council, Advanced Energy Initiative, February

2006, 15 p., [].

16 The White House, State of the Union: Advanced Energy Initiative, Jan. 31, 2006,
[]. A request for
accelerated funding in FY2007 is presented as a key feature of the Hydrogen Fuel Initiative,
Biorefinery Initiative, and Solar America Initiative.
17 DOE, EERE, The Solar America Initiative, February 2006, p. 2. In addition to a major
spending increase, DOE notes that the Solar America initiative would also shift the program
emphasis away from R&D toward more stress on industry partnerships to accelerate market-
ready photovoltaics equipment. It also notes a key role in the initiative for the National
Renewable Energy Laboratory (NREL). See [
18 AAAS, AAAS Preliminary Analysis of R&D in the FY 2007 Budget, [
spp/rd/prel07p.htm], Feb. 8, 2006.

Table 2. Earmark Funding Compared with AEI Proposals
($ millions)
Office of Energy Efficiency andFY2006FY2007AEIDifference
Renewable Energy (EERE): SelectedEarmarksProposed(AEI -
P r ograms Increase Ear m ar k)
Hydrogen 42.5 40.2 -2.3
Biomass & Biorefinery51.859.07.2
Solar Energy14.365.351.0
Total, Selected Programs108.6164.555.9
Sources: DOE Budget Requests FY2005, FY2006, and FY2007 and H.Rept. 109-275.
Some Questions for Congressional Consideration
!Do the EERE earmarks seriously weaken R&D programs, as some
opponents contend, or do they merely provide a more equitable,
although perhaps more decentralized, distribution of R&D funding,
as some proponents argue?
!If renewable energy earmarks under EERE continue at the same or
higher levels in FY2007, would they lead to new cuts in staff
positions at NREL?
!If Congress were to approve the Administration’s requested
increases for the AEI renewable energy initiatives, would earmarks
continued at the same or higher levels act to dilute or otherwise erase
some of the technological stimulation that the AEI aims to generate
for its hydrogen, biomass/biorefinery, and solar energy goals?
Table 3. DOE EERE and OE Earmarks, FY2005-FY2006
($ millions, current)
Office of EEREFY2005FY2006Diff.Percent
Hydrogen 21.4 42.5 21.1 98.5%
Biomass & Biorefinery (R)35.351.816.446.5%
Solar Energy (R)
Wind Energy (R)4.612.98.3182.3%
Geothermal Energy (R)
Vehicle Technologies—20.320.3—

Building Technologies—5.35.3—
Distributed Energy Resources1.0———
Weatherization & Intergovernmental4.24.80.615.2%
Program Management7.43.5-3.9-53.1%
Subtotal, Renewables (R)52.082.630.759.0%
Subtotal, Energy Efficiency34.076.442.5125.0%
Total 85.9159.073.185.1%
Office of Electricity (OE)FY2005FY2006Diff.Percent
Superconductivity 14.9 14.6 -0.3 -1.9%
Transmission Reliability10.712.92.220.6%
Electric Distribution Transformation2.629.727.11,031.4%
Storage 2.0 1.5 -0.5 -25.2%
Gridwise 3.0 2.5 -0.5 -16.8%
Gridworks 2.0 2.8 0.8 39.7%
Subtotal, Electricity35.163.928.882.0%
Subtotal, Electricity—
(after 1% rescission)
Sources: DOE, FY2007 Budget Request, vol. 3; H.Rept. 109-275, pp. 143-145; and personal
communication with Mr. Randy Steer, DOE/EERE, Feb. 23, 2006.

Figure 1. DOE Earmark Funding for Renewables, Energy Efficiency, and Electricity