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Battery Diversity Among Top Emerging Issues for New Congress

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Battery Diversity Among Top Emerging Issues for New Congress

In the final days of its 113th session, Congress passed a continuing resolution omnibus appropriations bill to keep the US government running until September, 2015. Of particular interest to the lead-acid battery industry is how the US Department of Energy (DOE) fared. In summary, DOE fared well to the extent that the overall budget of $10.2 billion will remain largely unchanged. (Technically, the budget received a modest $22 million increase.)

Within the DOE budget the biggest “winners” were the fossil fuel and nuclear energy budgets. Both programs were granted more than requested by President Obama. The fossil programs received an increase of $8.9 million to bring the total budget to $571 million. The nuclear budget received a $24 million increase to bring that budget to $914 million.

Within the DOE Energy Efficiency and Renewable Energy (EERE) program budget, which is of special interest to the lead-acid battery industry, that program received a $25 million increase to bring its total budget to $1.93 billion. However, that increase was about 16 per cent less than that requested by President Obama.

The EERE’s battery research program will continue to have about $250 million. But, while the battery program’s budget will remain relatively constant, Congress also is telling DOE that it needs to continue diversifying its research into areas beyond lithium-ion. This, of course explains the vehicle technology program’s suggestion to the Advanced Lead-Acid Battery Consortium (ALABC) that it should develop a new relationship with the US Advanced Battery Consortium (USABC).

Also noteworthy is report language accompanying passage of the funding bill specifically mentioning the DOE “SuperTruck” program as one that deserves high priority. Congress wants a report on how DOE’s work on “SuperTruck” is being adopted by industry. This would be of interest to the ALABC since “idling reduction” is one of the issues in the program.

DOE’s basic science research program budget also will continue unchanged at $5.1 billion. The report said, “This funding will help strengthen innovation and future American competitiveness by supporting basic energy research, development of high-performance computing systems, and research into the next generation of clean energy sources.”

These budget developments are part of a larger US federal policy picture that is undergoing profound change. A key part of that change is coming about because of the dramatic shift from the US being a net importer of oil to becoming a net exporter of oil and natural gas. Exports of oil (mostly to Canada) are 500 per cent more than the previous year or approximately 500,000 barrels per day. Many experts predict that US oil exports will continue to be strong even if prices fall to $50 per barrel.

Natural gas is another part of the changing balance from imports to exports. Various “shale plays” in the US are actively lobbying Congress to push US DOE and the Federal Energy Regulatory Commission (FERC) to expedite the process of granting natural gas export licenses.

These and other developments are reflected in major policy initiatives to be undertaken in Congress next year. For the past four years, control of Congress was divided between the Republican-controlled House of Representatives and the Democrat-controlled Senate. With Republicans about to control both the House and Senate, attention now is focusing on Rep. Fred Upton (Republican of Michigan), Chairman of the House Energy and Commerce Committee, and Sen. Lisa Murkowski (Republican of Alaska), incoming chair of the Senate Energy and Natural Resources Committee.

Both lawmakers have strong ties to the fossil fuel industries and are expected to push a number of important initiatives when the new Congress convenes in January, 2015. Among them:

Both are expected to move legislation that will formally approve the Keystone XL pipeline, which would move oil from Canada to Texas for export shipments. In addition, they strongly support expanded exports of liquefied natural gas. They also are expected to push for greater funding for the research and development of clean coal technologies. They may also try to restrict funding for the US Environmental Protection Agency to impose tighter emission controls on coal-fired power plants, but, they will face a veto threat from President Obama. They also strongly support nuclear power.

As to renewables and energy efficiency, both are expected to support strong research and development of “clean” technologies, including energy storage. They can be expected to continue the “beyond lithium-ion” approach that has been taken by the House and Senate appropriations committees. The ALABC will have an opportunity to, among other things, work with national laboratories in identifying basic energy research topics.

Tax credits, however, are another matter. Neither the Senate Energy and Natural Resources Committee nor the House Energy and Commerce Committee has jurisdiction over tax credits. The future of tax credits for renewable energy projects like wind and solar are in doubt. Before adjourning, Congress extended the production tax credit for wind projects by another two weeks to the end of 2014. It is unlikely Congress will extend them further. The same applies to solar energy tax credits due to expire at the end of 2015.

In the case of energy storage, Senate Finance Committee Chairman Ron Wyden (D-Oregon) had introduced legislation for investments tax credits to encourage energy storage, primarily to help grid integration of wind and solar power, but that failed to pass in the last Congress and its future is unclear.

As a result, while tax credits may not be favored by Republicans, that leaves research and development and this is where the energy committees in the House and Senate are likely to support a strong package of funding measures for a broad range of technologies, including energy storage.

It’s also worth noting that falling oil prices – combined with the fact that lithium and nickel metal hydride batteries remain more expensive than lead-acid – have had a negative impact on sales of plug-in hybrid and electric vehicles. Consumer attention is focusing instead on stop-start and micro-hybrid vehicles with lead-acid remaining the battery of choice for automakers. An opportunity, therefore, exists for the ALABC to work more closely with DOE in the testing of new advanced lead-acid battery and also the development of new design innovations.