April 25, 2016

April 25, 2016 | Issue Brief on Budget and Spending

2017 Senate Energy and Water Appropriations: Bill Falls Short on Key Policies

This week, the Energy and Water Development appropriations bill is expected to be debated on the Senate floor. The first of 12 appropriations bills providing discretionary funding for the federal government, the bill provides funding for projects under the direction of the U.S. Army Corps of Engineers, the Department of the Interior’s Bureau of Reclamation, the Department of Energy, and the Nuclear Regulatory Commission.

The fiscal year (FY) 2017 Energy and Water appropriations bill provides $37.5 billion in discretionary budget authority, an increase of $355 million over the FY 2016 enacted level and $261 million above the President’s request.

In some cases, the legislation continues to provide funding to programs with poor track records or missions that fall outside the legitimate scope of the federal government. In other cases, the bill reduces spending for programs that should be eliminated.

The Heritage Foundation “Blueprint for Balance” recommended funding for Energy and Water to be $35.5 billion in 2017, about $2 billion less than the level proposed in this bill.[1]

Army Corps of Engineers

The Army Corps of Engineers is a Department of Defense agency that carries out both domestic and military projects, especially those dealing with water-related construction or facilities. The 2017 bill provides a total of $6 billion to the Corps, an increase of $11 million over the FY 2016 enacted level and $1.4 billion above the President’s request. Included is an additional $700 million above the President’s request for the construction of rivers and harbors, flood and storm damage reduction to improve public health, shore protection, aquatic ecosystem restoration, and other authorized projects.

Throughout its history, the Corps has played the primary role in managing the nation’s water infrastructure. However, existing project developments as well as budget realities reflect a need for the Corps to scale back its mission to its original intent: managing critical water infrastructure. With the nation’s waterways largely built, the Corps’ focus should be on management and rehabilitation of its existing estate.

Department of the Interior

The Bureau of Reclamation within the Department of the Interior is funded annually through the Energy and Water appropriations bill. This year’s bill provides the bureau with $1.1 billion in funding, $327 million above the President’s request. The funds are used to manage, develop, and protect water resources in the western United States, including the operation of dams, canals, and hydroelectric plants. The bureau is the largest wholesaler of water in the nation.

 

As with the Army Corps of Engineers, most of the necessary infrastructure has already been constructed. The Bureau of Reclamation continues to provide water to the western states at artificially low prices, while the agency’s policies continue to create economic distortion and environmental damage.[2]

With current projects underfunded and the system in need of reform, the bureau should not be receiving funding to start new projects. Alternatively, Congress should revamp the cost-sharing criteria to require more investment from water users and revisit federal policy concerning water rights, water transfers, and water pricing in the west. Further privatization of water services could also help to improve efficiency and the quality of the water utilities being provided.

Department of Energy

The bill provides the Department of Energy with $30.7 billion in funding for FY 2017. This is more than a $1 billion increase over the FY 2016 enacted level. This total includes $12.9 billion for the Department’s National Nuclear Security Administration, which consists of Weapons Activities, Defense Nuclear Nonproliferation, and Naval Reactors. This represents a $341 million increase in funding for nuclear security over the FY 2016 level. While the increase in funding for nuclear weapons is warranted, Congress should ensure that the funds are targeted at weapons programs rather than non-weapons activities and support programs.

Energy Efficiency and Renewable Energy, Fossil Energy, and Nuclear Energy. The bill provides $2.1 billion for Energy Efficiency and Renewable Energy, the same as last year’s level, and more than $825 million less than the President’s request. These programs have received numerous funding increases in the past several years, and the reduction of the President’s inflated request is a step in the right direction.

The Department of Energy should not use taxpayer dollars to reduce costs, reduce risk, or artificially create savings for any energy source or technology. These are activities that the private sector can and will undertake if the investment is seen as worth the risk. Such wasteful spending is not unique to Energy Efficiency and Renewable Energy; Congress should eliminate similar spending activities for oil, nuclear energy, and conventional electricity sources, such as coal and natural gas. Yet, the bill recommends increasing spending for many fossil-fuel programs.

Yucca Mountain

The House version of this bill provides funding to the Department of Energy and the Nuclear Regulatory Commission, with the goal of completing the licensing process of the Yucca Mountain nuclear waste storage facility. It also calls for sound policy by clearly stating that none of these funds may be used to terminate activities related to the review of Yucca Mountain or activities “that irrevocably remove the possibility” of a repository there.

In contrast, the Senate again has pursued a short-sighted approach to build a pilot interim storage facility and provides no funding for finishing the license review of Yucca Mountain. Even though it would allow the Department of Energy to contract with the private sector to build and operate such a facility, interim storage under the current waste management system only solves the government’s liability problem and side-steps the fundamental changes needed for a viable nuclear waste management system.[3]

Policy Rider

Clean Water Act (CWA) and “Fill Material” Regulation. Section 108 of the House bill would prohibit the Corps from redefining “fill material” or “discharge of fill material” under the CWA regulations. There is concern that the Corps and the Environmental Protection Agency (EPA) could redefine the terms so that mining companies would be required to secure Section 402 permits, as opposed to Section 404 permits, for various mining activities.[4] While there are certainly obstacles to securing Section 404 permits, Section 402 permits are even more stringent, and industry groups have argued that it would effectively prohibit numerous mining activities.[5] Existing regulations provide more than adequate environmental protection without imposing unnecessary restrictions that could harm the mining industry and the communities that benefit from mining operations.

Other Policy Riders

The Senate version of this bill is not nearly as bold in making policy changes through legislative riders as its House counterpart. The following riders are included in the House bill and should be added to the Senate bill through the amendment process:

  • Dredge-and-fill permits and the “recapture” provision. Under the CWA, Section 404 permits are not required for normal farming activities, construction of stock ponds, and other related activities. However, there are exceptions, including under the “recapture” provision.[6] The American Farm Bureau Federation explained this provision as:

    [W]here discharges of dredged or fill material are used to bring land into a new use (e.g. making wetlands amenable to farming) and impair the reach or reduce the scope of jurisdictional waters, those discharges are not exempt. The Agencies have broadly interpreted the “recapture” provision to apply even when the “new use” is simply a change from one crop to another crop.[7]

    Section 109 of the House bill would limit the application of the recapture provision, which would help to prevent the weakening of the exemptions that are critical for farmers and ranchers.

  • Waters of the United States rule. The House version of the bill contains language (Section 110) prohibiting the Corps from using funds to implement the proposed “waters of the United States” rule.[8] This controversial rule, published by both the Corps and the EPA, would greatly expand the types of waters that could be covered under the CWA, from most ditches to “waters” that are dry land most of the time.[ ]The Sixth Circuit Court issued a stay, blocking implementation of the rule. However, Congress should not rely on the judicial branch to strike down this rule.
  • National Ocean Policy Initiative. The House bill prohibits the use of any funds to implement President Obama’s National Ocean Policy Initiative executive order. The executive order came shortly after British Petroleum’s oil spill in the Gulf of Mexico and is an incremental move toward greater, unnecessary authority over oil and gas permits for offshore drilling. The Senate should follow the House lead and adopt a similar provision.
  • California drought relief. The House version of the Energy and Water bill contains several provisions aimed at enabling California to store more water, and divert that water to farmers and communities in times of severe drought.[8] Senate conservatives should push back against the objections of progressives and environmentalists and add these provisions to the bill.

Conclusion

The 2017 Senate Energy and Water Development appropriations bill does not go far enough in reducing spending, ultimately increasing the overall size and scope of government. It continues to fund programs, such as the Biological and Environmental Research Program and other energy research programs, which have produced questionable results and are not core functions of the federal government. It also does not include several important policy riders that have been proposed in the House Energy and Water bill. The bill does make progress in some areas. Members of the Senate should continue to improve upon the bill by adding additional key policy riders and lowering the overall spending level to $35.5 billion as recommended in the “Blueprint for Balance.”

—Justin Bogie is Senior Policy Analyst in the Thomas A. Roe Institute for Economic Policy Studies, of the Institute for Economic Freedom and Opportunity, at The Heritage Foundation. Daren Bakst is Research Fellow in Agricultural Policy in the Roe Institute. Nicolas D. Loris is Herbert and Joyce Morgan Fellow in the Roe Institute. Katie Tubb is a Policy Analyst in the Roe Institute.

About the Author

Justin Bogie Senior Policy Analyst
Thomas A. Roe Institute for Economic Policy Studies

Daren Bakst Research Fellow in Agricultural Policy
Thomas A. Roe Institute for Economic Policy Studies

Nicolas Loris Herbert and Joyce Morgan Fellow in Energy and Environmental Policy
Thomas A. Roe Institute for Economic Policy Studies

Katie Tubb Policy Analyst
Thomas A. Roe Institute for Economic Policy Studies

Related Issues: Budget and Spending

Show references in this report

[1] The Heritage Foundation, “A Blueprint for Balance: A Federal Budget for 2017,” February 23, 2016, http://www.heritage.org/research/reports/2016/02/a-blueprint-for-balance-a-federal-budget-for-2017.

[2] Chris Edwards and Peter J. Hill, “Cutting the Bureau of Reclamation and Reforming Water Markets,” Downsizing the Federal Government, February 1, 2012, http://www.downsizinggovernment.org/interior/cutting-bureau-reclamation (accessed April 20, 2016).

[3] Katie Tubb and Jack Spencer, “Real Consent for Nuclear Waste Management Starts with a Free Market,” Heritage Foundation Backgrounder No. 3107, March 22, 2016, http://www.heritage.org/research/reports/2016/03/real-consent-for-nuclear-waste-management-starts-with-a-free-market.

[4] Laura Barron-Lopez, “COP Omnibus Rider Keeps Administration from Tightening Mining Rule,” The Hill, January 16, 2014, http://thehill.com/policy/energy-environment/195621-gop-rider-in-omnibus-bill-would-tighten-rules-on-waste (accessed April 13, 2016).

[5] Claudia Copeland, “Controversies over Redefining ‘Fill Material’ Under the Clean Water Act,” Congressional Research Service Report for Congress, August 21, 2013, http://www.fas.org/sgp/crs/misc/RL31411.pdf (accessed April 13, 2016).

[6] Specifically: “Any discharge of dredged or fill material into the navigable waters incidental to any activity having as its purpose bringing an area of the navigable waters into a use to which it was not previously subject, where the flow or circulation of navigable waters may be impaired or the reach of such waters be reduced.” 33 U.S. Code § 1344 (f)(2), https://www.law.cornell.edu/uscode/text/33/1344 (accessed April 13, 2016).

[7] Ellen Steen, “Statement of the American Farm Bureau Federation Regarding: The Definition of ‘Waters of the United States’ Proposed Rule and Its Impact on Rural America,” testimony before the Subcommittee on Conservation, Energy, and Forestry, Committee on Agriculture, U.S. House of Representatives, March 3, 2015, http://agriculture.house.gov/sites/republicans.agriculture.house.gov/files/images/Steen%20Testimony.pdf (accessed April 13, 2016).

[8] Michael Doyle, “House Republicans Reopen the Bidding on California Water Bill,” The Fresno Bee, April 12, 2016, http://www.fresnobee.com/news/politics-government/article71446412.html (accessed April 19, 2016).