What is in Obama's budget for energy?

President Barack Obama's running mate Joe Biden is fond of saying "show me your budget, and I'll show you where your priorities are." Media outlets have already begun picking through the wording of the president's $3.78 trillion 2014 budget to see what is being prioritized at a time when seemingly every cent of spending results in overheated press conferences on Capitol Hill and the threat of some catastrophic government shut-down.

When you look at just one area of the budget, massive at it is, it gets a little easier. So let's see what the budget has to say about energy policy. Here are some highlights:

The budget provides $28.4 billion in discretionary funds for the Department of Energy (DOE) — an 8 percent increase about the 2012 enacted level. This is meant to position the U.S. as a leader in clean energy while boosting energy security.

The budget proposes for $615 million to promote wind, solar, geothermal and hydrokinetic energy.

The document calls for a "Race to the Top" program to promote grid modernization and energy efficiency, which is something Obama mentioned in his most recent State of the Union. The awards would support state-level policies that increase energy productivity and modernize the grid — with the goal of cutting energy waste in half over the next two decades.

Also in the budget is more than $5 billion — 5.7 percent more than 2012 — for energy sector research and development. The need to continue R&D even in difficult economic times is something the present has said repeatedly, so finding it in the budget is perhaps not unexpected.

About $153 million in research and development funding is proposed for grid modernization, cybersecurity and energy control systems. Advances in the technologies and tools for improved clean energy integration onto the grid through an $80 million coordinated effort within the Office of Energy Efficiency and Renewable Energy.

Part of this tranche would include $20 million for a new Electricity Systems Hub, which would explore the interface between transmission and distribution systems in the smart grid context. The budget would support hardware and modeling R&D to improve the integration of renewable energy into the distribution grid, distributed generation, electric vehicles and residential/commercial buildings loads behind the meter.





About $575 million will be invested in alternative vehicle technologies, according to this budget — presumably this goes further than electric vehicles and charging stations, but likely includes both. There is also mention of a $2 billion of proposed mandatory funding for an Energy Security Trust (also mentioned in the State of the Union), intended to transition cars, trucks and other vehicles off of oil (biofuels, hydrogen, natural gas and electricity are specifically mentioned).

The budget provides $735 million for the Office of Nuclear Energy, which includes funding for small modular reactors. There is also $379 million for the Advanced Research Projects Agency — Energy, or ARPA-E, which is the agency that investigates "long game" technologies.

Carbon capture and storage is mentioned in the budget breakdown, with $421 million for the Fossil Energy Research and Development program, including an investment of $266 million in fossil energy R&D primarily dedicated to carbon capture.

The budget eliminates $4 billion yearly in "unnecessary subsidies to the oil, gas and coal industries;" restructuring the plutonium disposition program; cutting low performing programs; and using existing facilities and infrastructure.

In another energy efficiency measure, the budget calls for funding of the president's Better Buildings Initiative, which is meant to help consumers and businesses save money through energy efficiency.

There is $16 million — up from $10 million — in enhanced energy infrastructure security and energy recovery capabilities.

Separate from the DOE funding, the Environmental Protection Agency budget is about $296 million lower than the 2012 level, with the president's budget allocating the EPA $8.2 billion.

Getting serious on cybersecurity

There's no shortage of cyber-attack stories in the news, but as you read them you tend to wonder how serious the problem really is. Maybe this is because no group of hackers has been able to do something big and dramatic, like say triggering a cascading power outage that knocked San Francisco off the power grid for a full day.

But just because it hasn't happened yet is no guarantee that it can't or won't happen. I spoke with Marty Meyer, president and CEO of Corero Network Security, who said utilities, if anything, are more vulnerable than entities that have already been attacked.

"We're on the first step of a twelve-step program to admitting we have a potential problem with cybersecurity," Meyer said.

Cyber-attacks on utilities are up 52 percent, according to the Department of Homeland Security's cybersecurity protection arm.

An attack like a distributed denial of service attack (or DDOS attack) can flood a computer network with a large, sudden volume of attack traffic until it is overwhelmed and shuts down, he said. The systems that support power grids weren't designed to handle this level of attack traffic, and a DDOS attack is relatively unsophisticated — easily within the capability of a small group of hackers, such as Anonymous.

"There was an attack reported on an unnamed U.S. utility, and it was one of these DDOS attacks. The impact was that people could not pay their bills online. It wasn't people losing their electricity and freezing in their homes, but it was still a successful attack that denied service to people," he said.

Cyber-attacks can range in severity from "this is annoying" to something more malicious, he said. Furthermore, a relatively simple DDOS attack could be used as a diversionary tactic to distract from a more sophisticated network intrusion.

"So while I would say there's been no advertized take-down of a major utility where people lost actual services, but there certainly could be concerned from the utilities to protect themselves now instead of waiting around," he said.

Simple firewalls by themselves are not a prudent strategy to prevent malicious attacks, he said. Geoblocking (also known as geofiltering) is an extra layer of protection that works by cutting off network access to computers from IP addresses that are affiliated with a geographic area or country that you don't want to allow access to.

Another way of launching a malicious attack is to "spoof" an IP address, which lets a malicious computer disguise itself as coming from a trusted address. Utilities can upgrade their systems to unmask such attacks, he said.

"There are technologies that can make sure that addresses are trusted," he said. "Utilities need to specifically look at technologies that restrict access in terms of geography or known problem locations to ensure that the network connection that's coming in is a real connection and not a spoofed connection."

My thanks to Marty Meyer for his help in putting this post together. His company, Corero Network Security, is based in Hudson, Massachusetts.