Making sense of NREL’s budget math and job creation

October 6, 2011 by Amy
Filed under: Archive, New Energy Economy 

The story surrounding NREL’s possible $8 million reduction in 2012 doesn’t make sense. Is it a “savings” or a “cut”? Does NREL “create” green jobs or not? And NREL spokesman Bob Noun’s comments have not helped to clarify. Consider this story from CBS 4 Denver where Noun was questioned about NREL’s funding and stimulus money it received:

Noun said 98 percent of the lab’s funding comes from the federal government, including nearly $300 million in stimulus in 2009. It was money that was meant to create jobs.

That money was supposed to create 219 jobs at a cost of $1,360,540.11 per job as Michael Sandoval documented. When asked about the criticism, Noun had a different take on whether NREL creates green jobs or not:

Noun defends the lab, saying its mission isn’t job creation. “Our role here is to create technology, hand it off to industries so they can create jobs and grow.

President Obama said the stimulus money was supposed to “create” jobs in the green industry. Noun said the money, which NREL received, was supposed to create jobs, but when criticized he said job creation wasn’t the lab’s mission. Which is it?

Something else bothers me.  NREL got $298 million to “create” 219 green jobs, but it takes $8 million in “savings” to cut 100-150 jobs. Since taxpayers originally spent $1,360,540.11 to create one job, theoretically NREL could cut six jobs to achieve $8,163,240.66 in savings. Right?

Then there is the whole issue of whether the $8 million is a “savings” or an actual “cut” in NREL’s 2012 budget. Keep in mind that NREL enjoyed a 63.4 percent funding increase from 2008 to 2010. This is how the Denver Post reported NREL’s voluntary employee buyout:

NREL spokesman Bob Noun said the jobs were a victim of the gridlocked Congress, and that budget forecasts led the lab to look for more than $8 million in savings.

“We don’t see any budget scenario where the lab doesn’t face budget cuts,” Noun said. “We just want to be proactive in managing the budget so we continue our core mission.”

Is it a “savings” or is it a “cut”?  Because they are different.  An $8 million “cut” in the 2012 budget from  2010 funding would mean $528.5 million in funding. Not exactly chump change and still well above its 2008 funding levels of $328.3 million.

The “savings” versus “cut” debate would be academic were it not for a blog post from February 18, 2011 from the Denver University Sturm School of Law where Bob Noun is an adjunct professor in environmental and natural resources law. Noun’s class heard from guest lecturer Drew Willison, Vice President, Public Policy and External Relations for Battelle, a charitable trust and partner in the Alliance for Sustainable Energy that operates NREL. Lawyer/lobbyist Willison, who formerly worked  for U.S. Senator Majority Leader Harry Reid, discussed the budget process and revealed information about the proposed 2012 budget:

In particular, he focused on the proposed budgets for the U.S. Department of Energy, which funds energy efficiency and renewable energy efforts, as well as the appropriations process that actually provides money for measures that have been through the budget process. He noted that the President’s fiscal year 2012 budget, which will begin on October 1, provides a five percent increase from the fiscal year 2010 current appropriation.

As stated in an earlier NREL post, NREL’s funding comes through the DOE. Willison, with his insider information, tells a group of law students and the NREL spokesman that President Obama’s 2012 budget provides the DOE with a 5 percent increase over 2010 funding levels.  Although not guaranteed, it would be reasonable then for NREL to assume it too is receiving a 5 percent increase over 2010 levels.  That would put NREL’s 2012 funding at $563.3 million. Even with $8 million in “cuts” or “savings,” the 2012 anticipated funding would still be $555.3 million, a 3.5 percent increase over 2010 levels.

For the sake of argument, let’s say the $8 million really is a cut; it represents a 1.5 percent reduction in funding that has increased 63.4 percent since 2008. Even if the $8 million cuts really do materialize, they won’t likely threaten the Big Green Empire’s top-secret mission to “built a better future for everyone.”

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