A New Era

The Energy Department wants to jump-start the economy with renewable fuels.

While fossil fuels aren't exactly out, renewable energy and conservation are definitely in. Hardly a week goes by when the Energy Department isn't touting a new investment in clean energy technology. Energy Secretary Steven Chu told lawmakers in May that his department's spending authority is the key to addressing "the interconnected challenges of economic uncertainty, U.S. dependence on oil and the threat of a changing climate by transforming the way our nation produces and consumes energy."

Despite the ambitious rhetoric, the department's budget request of $26.4 billion for 2010 represents a 22 percent decrease, compared with funding in 2009. Chu said the drop must be viewed in the larger context of Energy's role in administering nearly $39 billion in funding through the American Recovery and Reinvestment Act.

During the next two years, the Recovery Act is slated to invest $16.8 billion in conservation efforts and renewable energy sources, $6 billion in environmental management, $6 billion in loan guarantees for renewable energy and electric power transmission projects, $4.5 billion to modernize the electric grid, $3.4 billion in research aimed at capturing carbon emissions from coal-fired power plants, and about $2 billion in basic research and to establish an advanced research projects agency at Energy.

Chu said he intends to expand the research mission at the Office of Science to develop practical solutions to the nation's seemingly intractable energy challenges, adding that President Obama has committed to doubling investment in basic research during the next 10 years.

"While the department has made important contributions over the years, despite almost three decades of effort, we are still confronted by the fundamental problems of energy security and environmental degradation from our energy use," he said. To address that shortcoming, the department is standing up eight energy innovation hubs that will take a multidisciplinary approach to key advances, such as making solar energy economically competitive with fossil fuels, or creating a battery that can power a vehicle for 300 miles before it needs to be recharged.

Despite the focus on renewable power and finding cleaner and more efficient ways to use fossil fuel, two-thirds of Energy's budget continues to be devoted to nuclear weapons and cleaning up the radioactive waste that is the legacy of Cold War weapons production. The department's top five contractors, Bechtel Group Inc., Battelle Memorial Institute, Lockheed Martin Corp., URS Corp. and McDermott Inc., play significant roles in those activities.

The administration will end the politically sensitive program to create a nuclear waste disposal facility at Yucca Mountain in Nevada, and instead will pursue other alternatives for storing the material. That decision will end the role of prime contractor USA Repository Services LLC, a wholly owned subsidiary of URS. "It is my firm belief that the short-term impact of the Recovery Act combined with the new approaches and long-term vision in [the 2010 budget request], will lay the groundwork necessary for creating the new green economy," Chu said.

Click here for the top 25 energy contractors.

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