Washington (Platts)--10Jul2008

The US Senate Appropriations Committee passed the fiscal 2009 Energy and
Water Development funding bill Thursday, which included $27 billion for the
Department of Energy.

The bill made it out of committee as Senate Majority leader Harry Reid,
Democrat-Nevada, told reporters elsewhere that Congressional spending bills
would be put off until next year. However, he encouraged Senate committees to
continue marking up their spending bills.

The overall energy and water bill passed by the appropriations committee
totaled $33.3 billion for fiscal 2009, about $2 billion above fiscal 2008.
Department of Energy's $27 billion portion of the bill is more than $1 billion
above President Bush's request for the department.

The department's FutureGen project to develop carbon capture and storage
technology for coal-fired power plants did not receive any new funding, but
the bill would allow it to use $134 million in funds left over from previous
years, according to Byron Dorgan, the chairman of the Senate appropriations
subcommittee on energy and water.

DOE had requested $156 for FutureGen. The committee did, however, include
$149 million for carbon sequestration research.

The bill had passed out of Dorgan's subcommittee on Tuesday, and passed
the full committee with no amendments and little discussion.

DOE's Energy Efficiency and Renewable Energy Office was a big winner in
the bill, receiving $1.9 billion, an increase of $200 million on the year, but
down $600 million from $2.5 billion in a similar House bill passed two weeks
ago. EERE's appropriation included $200 million to restore its Weatherization
Program. The president's budget had eliminated the program, which helps
individuals pay for domestic energy efficiency improvements.

The department's Office of Science also got a large portion of DOE's
overall funds: $4.6 billion. This was less then the president requested, but
also dramatically higher than the $4 billion funding for fiscal 2008.

The Strategic Petroleum Reserve, which some Democrats in Congress have
recently suggested dipping into, was funded at $205 million, less then half
Bush's request of $584 million.

The panel also focused on increasing funds for integrating renewable
energy into the electricity grid, according to a committee summary of the
bill. This would come out of the Electricity and Energy Reliability program.
But a full report on the Senate bill will not be available until early next
week, according to a committee spokesman.

The Yucca Mountain nuclear waste repository would be funded at $108
million less than requested, and maintain its current level of $386 million.

Environmental clean-up, both for defense and non-defense related sites,
would receive a total of just over $6 billion, about $450 million more than
the current year and exactly what was requested by the president.

"The increased funding would enable programs to meet legal milestones
that were at risk strictly because of budget shortfalls. In addition, the
funding would keep more than 600 clean-up workers on the job," the committee's
budget summary said about the clean-up funding.

The bill also included $380 million for the authorization of $38.5
billion in DOE loan guarantees.

Robert Byrd, the committee's chairman, also said that the committee would
meet to consider a second supplemental appropriations bill on July 22. That
bill will largely cover the funding of natural disaster response and
infrastructure. The Department of Interior Appropriations bill will be
considered by the committee on July 24.

--Derek Sands, derek_sands@platts.com