Today the House will continue consideration of the Energy and Water Appropriations Act of 2012. This is where Uncle Sam tells the Department of Energy where and how it can spend its money. What does that mean for the automotive world? Money and lots of it! Most of the money for auto makers comes in the form of loans and grants.
Conservatives, acting on behalf of their constituents, have adopted a slash-and-burn approach to funding agencies this year. The amendments are a smorgasbord of “reduce this” and “defund that” measures. Like previous appropriations considered this year, the Energy and Water Appropriations Act will be considered under an open rule. In other words, instead of a small number of members hiding behind the Rules Committee gavel dictating what should and shouldn’t be brought to the floor, every amendment germane to the legislation will be given time on the floor for debate and consideration. Now that I’ve given you a quick piece of parliamentary procedures – let’s talk Benjamins!
The total piece of legislation comes in at just over $30 billion buckaroos, which is $5.9b less than El Presidente Obama has asked for, all of which comes directly from DOE. A summary of the bill with funding tables can be found here. Below are provisions of interest to the automotive world at large:
Hydrogen & Fuel Cells - Funded at $91m. $9m below request.
Biomass & Refinery R&D - Funded at $150m. $190m below request. Interesting to note that language in the bill states “DOE can only conduct research, development, and demonstration activities advancing technologies that produce fuels and electricity from biomass and crops that could not otherwise be used as food”. Also none of the money may be used for the cellulosic biofuels reverse auction. This auction doesn’t take into consideration established refineries vs. new, thus defeating the theory of “advancements in technology”.
Solar, Wind & Geothermal – All took big cuts but have little to do with the automotive industry.
Vehicle Technologies – The Administration was looking at this as their EV megafund: Cha-Ching! Not so fast says the U.S. House. The Committee funded the request at $254M which is $334M below the budget request. DOE planned to use 75% of the $589M to help mitigate range anxiety by offering states and cities cold hard cash in exchange for charging stations. Now, none of the $254M can be used to fund ANY infrastructure for EVs.
DOE planned to use 75% of the $589M to help mitigate range anxiety.
Instead the committee wants to blow $3M to study “to identify the market barriers slowing the purchase of electric vehicles and hindering the deployment of supporting infrastructure.” I would be willing to answer that question and only charge half the amount.
The Committee scolded DOE for its lack of support for the SuperTruck program for political reasons, like trying to get Obama’s million EVs on the road.
Here is a good news story, especially for anyone who likes composites like carbon fiber. The committee increased the amount requested for Lightweight Materials Technology bringing it to $28M. I’m impressed that someone educated a staffer on the connection between lightweight materials and fuel efficiency.
Advanced Technology Vehicles Manufacturing Loan Program – This program was funded at the requested level – $6M. Many automakers pulled out of this program when they realized DOE had turned it into yet another bureaucratic debacle. GAO released a report on the program 9 June 2011 stating that “DOE needs enhanced oversight and performance measures”. They went on to recommend that DOE “accelerate efforts to engage engineering expertise and develop sufficient, quantifiable performance measures. DOE disagreed with the recommendations, stating that such expertise had not yet been needed and that performance measures would expand the scope of the program.” Needless to say – this program will quickly become a piece of low hanging fruit for members still hungry for budget reduction bragging rights.
Startups like CODA Automotive are waiting on similar loan programs to open new facilities. Luckily, in their case, they’ve already greased the wheels with the two Buckeye Senators who represent home to their proposed battery factory. If the program comes under scrutiny in the People’s House the Gentlemen on the north side of Capitol Hill should be able to protect it.
Keep in mind as the day progresses these numbers could all change. The games kick off at 2 o’clock today. Tune into CSPAN to watch the action. Coffee is recommended. Unlike Romanian parliamentary procedures, we’ve evolved from the classic fist-to-face negotiations.