United States: Cleantech And Transportation Intersect In The 2017 U.S. Federal Budget Proposal

With the federal budget process for FY2017 and related appropriation discussions expected to heat up in Congress over the next couple of months, the previously announced 21st Century Clean Transportation Plan (the “CTP”) continues to be a featured aspect of the Obama Administration’s budget proposal. Designed to create a more sustainable transportation system through technology and increased R&D, the CTP is a $320 billion initiative that would build on existing federal investments, including increased investments in public transit systems under the recently-enacted Fixing America’s Surface Transportation (FAST) Act of December 2015. Attached is a summary of the CTP’s principal goals and matters likely to be the focus of Congressional debate, including the Plan’s proposed funding sources, which would include an upstream tax on oil (and a price increase at the pump).

Cleantech and Transportation Intersect in the 2017 Federal Budget Proposal

The enhancement of "clean" transportation through technology is a featured aspect of the Obama Administration's budget proposal for federal fiscal year 2017, which runs from October 2016 through September 2017 (the "Budget").1

The 21st Century Clean Transportation Plan (the "CTP" or the "Plan") is a multi-agency, $320 billion initiative to build a clean transportation system. The Plan builds on investments made by the federal government through the American Recovery and Reinvestment Act (ARRA) of 2009, which provided federal support for clean energy investments, the Build America Transportation Investment Center, which was established within the USDOT in July 2014 to facilitate transportation public-private partnerships (P3s), and the recently-enacted Fixing America's Surface Transportation (FAST) Act of December 2015, which significantly increased federal funding for public transit systems (although by less than the Administration had initially sought). The CTP also dovetails with the Administration's goals under Mission Innovation, the landmark 20-country agreement signed in connection with the recent Paris climate summit (COP21), to double federal funding for clean energy R&D over five years.2

Following is a brief summary of the Plan's principal goals. Based on early discussions in Congress in connection with the budget resolution process currently underway, the CTP is likely to be subject to robust partisan debate. In particular, the CTP's proposed funding sources, which would include an upstream tax on oil (and a price increase at the pump) appear to present a significant hurdle to advancement of the Plan.

Repositioning and Refocusing Federal Investments

The first major goal of the CTP is to reposition and refocus the federal government's current transportation investments toward more sustainable, low-carbon investments. The CTP proposes increasing US investments in clean transportation infrastructure by about $20 billion per year on average over ten years (an increase of about 50%), as follows:

  • The Budget would allot more than $10 billion on average over such 10-year period for the Federal Transit Administration ("FTA") New Starts, Small Starts and Transit Formula Grants programs, under which the US Department of Transportation ("USDOT") invests in the efficiency and performance of both existing and new transit systems. It would also create a new Rapid Growth Area Transit program to provide capital, on a competitive basis, to support the implementation of new bus rapid transit systems in communities experiencing rapid growth.
  • The federal government would allocate an additional $7 billion per year on average over such 10-year period to investments in high-speed rail (particularly those that integrate advanced rail technologies) and an additional $1 billion on average over such period to a multi-modal freight program that would provide grants for innovative rail, highway and port projects seeking to reduce emissions.
  • The Budget would almost double funds available through the USDOT's Transportation Investment Generating Economic Recovery ("TIGER") multi-modal competitive grant program, which supports innovative, sustainable investment in infrastructure. The TIGER grant program has made investments totaling nearly $4.6 billion to 381 different infrastructure projects nationwide.

Technology and Innovation at the State and Local Level

Second, the CTP aims to support innovation and the development of technologies at the state and local level through an allocation of approximately $10 billion per year on average over ten years for regional transportation initiatives. A 21st Century Regions grant program would allocate an average of over $6 billion per year to metropolitan and regional planners to support regional strategies that are designed to achieve large reductions in greenhouse gas emissions and vehicle miles traveled. A Clean Communities competitive grant program would provide an average of approximately $1.5 billion per year for the implementation of "green" policies such as cleaning up existing transportation assets, transit-oriented development and initiatives reconnecting downtowns within urban centers.

Approximately $1.7 billion per year on average, to be made available under the Climate-Smart Performance Formula Funds program, would reward states for investing in projects that reduce air pollution and other transportation impacts, and a further $750 million per year would be reserved for Resilient Transportation competitive grants to support investments making mass transit more resilient to climate change.

Integration of Technologies

The third major goal of the CTP is the integration of new technologies into US infrastructure and the speeding of cleaner, transportation-focused, goods to market. The CTP would allocate approximately $2 billion per year on average over ten years to clean transportation R&D and accelerating the transition to smart, clean vehicle fleets and supporting infrastructure.

Specifically, $400 million per year would support the deployment of self-driving and wirelessly connected vehicles, associated R&D, and the development of related infrastructure. Another $600 million per year would be made available to the US Department of Energy ("DOE") to fund initiatives to expand access to low-carbon fuels and electric vehicles powered with clean-sourced energy. DOE, the Environmental Protection Agency ("EPA"), and the National Aeronautics and Space Administration ("NASA") would also receive an average of $1 billion per year for R&D related to clean fuels and transportation technologies, including (in the case of NASA) a fleet of low-carbon aircraft.

Funding

The principal source of funding proposed for the CTP is true to the Plan's clean energy goals. The Plan would assess oil companies a fee of $10.25 for each barrel of oil produced domestically or imported from overseas. It would also apply to imported (but not exported) petroleum products, although the precise application of the fee to such products is not clear as one barrel of crude does not produce one barrel of gasoline, for example.3 A portion of the fee is anticipated to be passed on to consumers, who would see about a 25 cent per gallon increase in gas prices.

Conclusion

In the current political environment, it seems unlikely that the CTP will emerge unscathed from the budget process. Reactions to the Administration's funding proposal, which effectively would be an upstream fuel tax increase, have been strong on both sides of the political aisle, sowing the seeds for future debate on the feasibility of the Plan.4 The degree to which elements of the Plan described above, and of other similar initiatives, such as the Administration's Clean Power Plan published last year,5 gain traction in Congress (and are championed by the incoming President) will shape the future debate over federal clean energy programs and determine the feasibility of achieving the types of larger goals that have been proposed by the Obama Administration to combat climate change.

Special thanks to Shearman & Sterling Associate Alyssa Cowley for her contributions to this client publication.

Footnotes

1 Office of Management and Budget, The Budget of the United States Government, Fiscal Year 2017, https://www.whitehouse.gov/sites/default/files/omb/budget/fy2017/assets/budget.pdf.

2 White House, Announcing Mission Innovation, https://www.whitehouse.gov/blog/2015/11/29/announcing-mission-innovation  (Nov. 29, 2015, 7:01 p.m.).

3 Congressional Research Service, Memorandum to Senate Energy and Natural Resources Committee, $10 Fee/Tax on Oil (Feb. 8, 2016).

4 Brian Kahn, Climate Economists React to Obama's Proposed Oil Tax, Climate Central, http://www.climatecentral.org/news/climate-economists- react-obama-oil-tax-20000 ; Alan Neuhauser, Obama Floats $10-per-Barrel Oil Tax to Fund Green Transportation, US News & World Report, http://www.usnews.com/news/articles/2016-02-04/obama-floats-10-per-barrel-oil-tax-to-fund-green-transportation ; Keith Goldberg, Fossil Fuels Would Foot Bill for $320B Clean Transport Plan, LAW360 (Feb. 9, 2016).

5 See Robert Freedman, Jeff Salinger & Dillon Smith, Changing Climate: What the Paris Accord Means for the US, LAW360 (Mar. 11, 2016) (discussing the COP21, the CPP and other climate change initiatives of the Obama Administration).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.