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
Related Topics
 
Related Articles
 
Related Video
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions