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The Impact of Budget Sequestration on DOD Energy Innovation

The impacts of budget sequestration are slowly being unveiled to the general public. Furloughs at the Federal Aviation Authority (FAA) led to air traffic gridlock and angry travelers. Parks and national tourist sites are cutting back hours. And the Department of Defense (DOD) recently announced furloughs for 680,000 civilian employees. While these short-term impacts are painful, in particular to those losing work hours and income, sequestration is initiating cuts with negative, long-term impacts, which are not yet immediately apparent.

One area of specific concern is the potential $381 million in cuts to energy innovation investments at the DOD – a 25 percent cut compared to FY2012 levels. Since 2009, DOD has invested $5 billion in clean energy research, development, testing, demonstration, and procurement, representing almost 25 percent of U.S. clean energy funding in FY2012. DOD’s focus on clean energy innovation is important for three reasons:

  • The DOD has been the source of some of the last century’s most important breakthrough technologies, including the Internet, GPS, and microchips and it could have a similar impact on clean energy technologies like batteries and smart grid;
  • The DOD has developed its own cohesive
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Scale-Up of Military Biofuels Could Generate Significant Economic Activity

The Department of Defense's role in energy innovation and the development of clean energy technologies from basic science through procurement and commercialization has come to the front of policy discussion. This conversation is particularly centered around DOD’s interests in using drop-in biofuels to reduce the department’s significant, costly, and sometimes dangerous reliance on petroleum-based fuels. According to the Energy Innovation Tracker, DOD investment in basic science, R&D, and procurement of advanced biofuels peaked in FY2010 at $155 million (including ARRA investment) and has fallen to $37 million in FY2012. Ninety-two percent of FY2012 biofuel investment was for research and development. A November 2012 report prepared by Environmental Entrepreneurs titled, The Economic Benefits of Military Biofuels, finds that meeting DOD’s biofuel utilization targets will generate significant economic activity — between $9.6 and $19.8 billion — and create between 14,000 and 17,000 new jobs by 2020. The report calculates the economic impact of DOD’s scale-up of biofuel usage by starting with the commitments ... Read the rest