Washington (Platts)--11Mar2009

The US Senate Tuesday voted to approve an additional $2.5 billion for the
Department of Energy's budget as part of a fiscal 2009 appropriations bill
which will fund the US government through September 30.

The measure was approved by voice vote after eight Republicans voted with
Democrats on a procedural clearance vote of 62-35.

DOE will receive a total allocation of $27 billion for fiscal 2009.
Programs in renewable energy, energy efficiency, science and environmental
cleanup stand to receive large increases.

A few programs at DOE would also see reductions, including nuclear energy
and the Strategic Petroleum Reserve.

The bill makes $205 million available for SPR, the nation's emergency
stockpile of oil. This is a sharp decline from the Bush administration's
requested $344 million. The new measure would require the DOE to submit a
report to Congress within 45 days of enactment on the effects on US oil
markets of expanding the reserve. The department could not spend the SPR money
on expansion before completing the report.

DOE had been given authorization in the Energy Policy Act of 2005 to
expand the reserve's capacity to more than 1 billion barrels. Its current
maximum storage capacity is 727 million barrels.

A proposed permanent nuclear waste repository at Yucca Mountain, Nevada
would receive $288.39 million for the year, a decline of roughly $98 million
below the fiscal 2008 level.

The Obama administration has said they do not intend to pursue Yucca
Mountain as the solution to nation's nuclear waste disposal issue.

The Senate spent all of last week debating the $410-billion omnibus
appropriations bill before it was pulled from the floor following objections
by Republicans who wished to offer amendments.

Though several Republican amendments received votes, in the end none were
adopted. The US House of Representatives passed an identical bill on February
25, and President Barack Obama is expected to sign it into law Wednesday.

The so-called omnibus appropriations bill combined nine unpassed spending
bills in one package.

House and Senate Democrats chose to delay the appropriations process last
year to avoid having to reconcile differences with the Bush administration
over spending across the government. Most of the government was funded through
stopgap measures.

A DOE program for low-income residents was one of several DOE programs
that received money in both an economic stimulus bill passed last month and
the 2009 bill.

The program received $5 billion in the American Recovery and Reinvestment
Act and $200 million for fiscal 2009. The program received $282 million for
fiscal 2008 after the Bush administration marked it for elimination.

DOE's Energy Efficiency and Renewable Energy division received $16.8
billion under the economic stimulus bill, and would get $1.9 billion for
fiscal 2009, compared with $1.3 billion requested by the Bush administration
and $1.7 billion enacted for fiscal 2008.

Some EERE programs stand to see substantial gains in the fiscal 2009
bill, relative to both last year's bill and the Bush administration request.
Vehicle technology research, including an advanced battery program authorized
under the Energy Independence and Security Act of 2007, would receive $273
million. This compares with $221 million requested by the administration and
$213 million provided for fiscal 2008. ARRA also provided $2 billion for
grants for the manufacturing of advanced batteries for vehicles.

SPENDING BILL FAVORS CLEAN COAL OVER FUTUREGEN CCS PROJECT

The bill also includes $168.9 million for hydrogen technology, a cut from
last year's enacted level of $211 million, but an increase compared with the
administration's request of $146 million. Biorefinery research and development
would receive $217 million, which is more than Congress provided for fiscal
2008 ($198 million), but less than the Bush administration requested for
fiscal 2009 ($225 million).

The omnibus bill likewise provides $876.3 million for fossil fuels
research and development, including $149 million transferred from the Clean
Coal Technology account.

It also includes $700 million for Clean Coal Power Initiative's third
round of solicitations, paid for partly by transferring funds away from the
carbon capture and sequestration project FutureGen, which would receive no
funds under fiscal 2009 bill. CCPI is a public-private partnership with
utilities aimed at reducing emissions from coal-fired power plants.

The bill would apply $5.6 billion to defense-related cleanup activities
at DOE, up from $5.3 billion requested by the Bush administration and made
available in last year's bill.

DOE, which faces lawsuits for missed deadlines for cleaning up Cold
War-era nuclear weapons labs across the country, also received $6 billion in
the stimulus bill to accelerate that process.

The bill provides $262 million for non-defense environmental cleanup at
DOE, and $45 million for nuclear site closures.
--Jean Chemnick, jean_chemnick@platts.com