Washington (Platts)--30Jul2009

The US Senate passed its fiscal 2010 Energy and Water Development
spending bill Wednesday night after making cuts that the White House has said
would hamper some of its energy policy efforts.

The measure passed on an 85-9 vote Wednesday night, after extensive
procedural delays. The spending bill (H.R. 3183) would provide $27.4 billion
for the Department of Energy, $1.1 billion below what the president requested.

A bill that passed the US House of Representatives earlier this month
called for $26.9 billion for the department, and the two measures must be
negotiated following Congress' annual August recess which begins next week.

The upper chamber accepted an amendment that would bar any funding for
the Strategic Petroleum Reserve from going to Iran, and another by sponsor
Byron Dorgan of North Dakota which would tighten reporting requirements for
DOE contracts.

The Senate bill provides $2.23 billion for the Energy Efficiency and
Renewable Energy programs at DOE, a cut of $85 million compared with the
president's request. The House cut the EERE allocation to $2.3 billion.

The White House chided both chambers for making the cut in separate
statements of administration policy, telling the Senate earlier this week that
the cuts would hamper efforts to transition to next generation energy sources,
such as solar energy.

Some of the Senate bill's priorities differ from those of the White
House. For instance, the Senate funded at $190 million a hydrogen vehicle
technology program that DOE marked for elimination. The bill also would fund
only one of eight energy innovation hubs that the administration proposed, but
would allow DOE to fund two additional hubs if the department finds funds for
them in stimulus allocations.

The White House also called on the Senate Monday to provide all of the
$208 million that the administration of President Barack Obama sought for the
Office of Electricity Delivery and Energy Reliability, which oversees federal
electricity policy. The Senate measure provides $179.6 million for the office.

The Senate-passed bill, in common with the House version, would provide
the administration's requested $196.8 million to support a Nuclear Regulatory
Commission application for a nuclear waste facility at Yucca Mountain, Nevada.
The administration plans to kill the proposed Nevada site, but is funding the
licensing application for legal reasons. The allocation includes $5 million
for a commission to examine other options for nuclear waste disposal.

Nuclear programs at DOE would receive a boost under the bill compared
with the president's request, receiving a total of $792 million compared with
the administration's recommended $761 million.

The measure also makes several changes in nuclear allocations, including
the revival of the Fuel Cycle Research and Development program. The Senate
bill would shift $10 million to a university-led nuclear research program.

Fossil energy programs also come out ahead with $700.2 million, which is
$82.6 million above the request. A majority of the funds would be directed to
carbon capture and storage technologies and other programs aimed an helping
fossil fuels participate in lower-carbon energy portfolio.

The Strategic Petroleum Reserve, an emergency stockpile of oil, would
receive $259.1 million including $30 million above the administration's
request for construction of a new storage site in Richton, Mississippi.

Non-Defense Environmental Cleanup would receive $259.8 million, up $22
million from the president's request, while weapons activities at DOE would
receive $6.468 billion, up $84 million compared with the request.

--Jean Chemnick, jean_chemnick@platts.com