May 23, 2016

May 23, 2016 | Issue Brief on Appropriations

House Energy and Water Appropriations Bill: Makes Progress but Could Do More to Cut Spending

This week, the Energy and Water appropriations bill is expected to be debated on the House floor. The second 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 $259 million over the 2016 enacted level and $168 million above the President’s request. This is a modest increase compared to the almost $3 billion in new funding provided by last year’s omnibus appropriations act. The bill also includes a number of policy riders that will help to stop continued government overreach on environmental issues.

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

Heritage Foundation analysts have recommended funding for Energy and Water to be $35.5 billion in 2017, about $1.9 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 $6.1 billion to the Corps, an increase of $100 million over the 2016 enacted level and $1.5 billion above the President’s request. Included in the total are $2.7 billion for navigation projects and studies, and $1.8 billion for public health and safety initiatives to fund flood and storm damage reduction activities.

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 managing and rehabilitating 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 of Reclamation with $1.1 billion in funding, $131 million below last year’s level and slightly below the President’s request. The funds are used to manage, develop, and protect water resources in the western U.S., including the operation of dams, canals, and hydroelectric plants. It is the largest wholesaler of water in the nation.

As with the Army Corps of Engineers, most of the necessary infrastructure under the Bureau of Reclamation’s purview 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 focus on existing projects rather than starting new ones. 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 western U.S. 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 $30.0 billion in funding for 2017. This is a slight increase above the 2016 enacted level and about $1.5 billion below the President’s requested level. This includes $12.9 billion for the Department’s National Nuclear Security Administration which includes Weapons and Activities, Defense Nuclear Nonproliferation, and Naval Reactors. This represents a $327 million increase over the 2016 level. While the increase in funding for nuclear weapons is warranted, Congress should ensure that the funds are aimed at weapons programs rather than non-weapons activities and support programs.

Energy Efficiency and Renewable Energy, Fossil Energy, and Nuclear Energy. The bill provides $1.8 billion for Energy Efficiency and Renewable Energy, $248 million below last year’s level and over $1 billion less than the President’s request. These programs have received numerous funding increases in the past several years and these reductions are a step in the right direction.

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

Yucca Mountain

The bill provides $150 million for the Department of Energy and $20 million for the Nuclear Regulatory Commission for the purpose of completing the licensing process of the Yucca Mountain nuclear waste storage facility. This bill also calls for sound policy by clearly stating that none of these funds may be used to terminate activities related to review of Yucca Mountain or activities “that irrevocably remove the possibility” of a repository there. Funding the completion of Yucca Mountain’s license review is necessary for several reasons:

  • The federal government is currently required to do so under current law.
  • Ratepayers have set aside sufficient funds to complete the review.
  • There is a need for deep geologic storage, like what could be made available at Yucca Mountain.
  • The license brings all information to the fore for Congress to make wise decisions about the future of nuclear waste management.[3]

Policy Riders

The following are crucial policy riders to the House Water and Energy appropriations bill.

  • Clean Water Act (CWA) and “fill material” regulation. Section 108 of the 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 in a manner that would require mining companies 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 they 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.
  • 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 significant exceptions, including under what is referred to as 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. This would help to prevent the weakening of the exemptions that are critical for farmers and ranchers.

  • Waters of the United States rule. Section 110 of the bill would prohibit 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 actually dry land most of the time.[9] Fortunately, the Sixth Circuit Court of Appeals issued a stay, blocking implementation of the rule. Congress should not rely, however, on the judicial branch to strike down this rule.
  • National Ocean Policy Initiative. The 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.

Conclusion

The 2017 House Energy and Water Development appropriations bill commendably includes policies that limit the scope of government in some areas. This bill, however, does not go far enough in reducing spending, ultimately increasing the overall size and scope of government. It continues to fund certain programs, such as Energy Efficiency and Renewable Energy and other energy research programs, that have produced questionable results and are not core functions of the federal government. The bill has flaws but does make progress in some areas. Members of the House should continue to improve upon the bill and lower the overall spending level.

—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

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 May 17, 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, “GOP 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 No. 31411, 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] “Clean Water Rule: Definition of ‘Waters of the United States,’’ Federal Register, Vol. 80, No. 124 (June 29, 2015), pp. 37054–37127, https://www.epa.gov/sites/production/files/2015-06/documents/epa-hq-ow-2011-0880-20862.pdf (accessed April 13, 2016).

[9] Daren Bakst, “What You Need to Know About the EPA/Corps Water Rule: It’s a Power Grab and an Attack on Property Rights,” Heritage Foundation Backgrounder No. 3012, April 29, 2015, http://www.heritage.org/research/reports/2015/04/what-you-need-to-know-about-the-epacorps-water-rule-its-a-power-grab-and-an-attack-on-property-rights.