Washington (Platts)--2Mar2011/1009 am EST/1509 GMT

A senior US Senate Republican said Wednesday he supports more funding for the US Department of Energy's basic scientific research programs, but in these times of fiscal austerity, he suggested the way to pay for that research would be to cut subsidies for both fossil fuels and renewable sources.

"Sometimes we get so entranced with an idea that we initiate a federal subsidy for it, and it never goes away," Tennessee Senator Lamar Alexander said during a keynote address at DOE's Energy Innovation Summit near Washington. "We've done that with renewable energy, ethanol, mature sources such as coal, oil and gas. That may be too expensive."

Later, on the sidelines of the conference, Alexander, the third ranking Republican in the Senate, said he may support some of President Barack Obama's proposal to eliminate $26 billion in oil and gas tax breaks. But he said he would not support repealing tax deductions that are available to all businesses, which the oil and gas industry has said make up a significant chunk of those tax breaks that Obama has targeted.

Alexander took specific exception at wind power subsidies, which have been in place since 1992 and are scheduled to total $30 billion over the next 10 years. He said he supports short-term incentives to promote renewable energy, but not long-term ones.

"Wind is a mature technology," he said. "There's no excuse."

Alexander said DOE programs like the Advanced Research Projects Agency-Energy, which supports high-risk, high-reward transformational clean-energy research, are worth supporting, despite calls by some of his Republican colleagues to eliminate the program's funding.

Alexander was the lead Senate sponsor of the America COMPETES Act, which in 2007 created ARPA-E. The program was then seeded with $400 million in the 2009 American Recovery and Reinvestment Act.

"I'm enormously impressed with what ARPA-E has been able to do," Alexander said. "It's my belief that the work done by ARPA-E is one of the bright stars in innovation in the world today, and certainly for our country."

But a continuing resolution passed by the Republican-controlled House of Representatives last month that would fund the federal government through the end of fiscal 2011 would provide only $50 million for ARPA-E. Obama had requested $300 million for the program in fiscal 2011 and is seeking to boost its budget to $650 million for fiscal 2012.

Alexander did not say how much ARPA-E funding he would advocate for, but he said he ranks ARPA-E and other DOE research programs as high priorities.

Alexander's speech came a day after another senior Republican senator, Alaska's Lisa Murkowski, advocated funding for ARPA-E in another keynote address at the conference.

"Obviously we're going to have to work to reduce spending, but we have to be smart, not cheap," Alexander said. "We need to make certain we leave room for the basic research that drives our high standard of living. Most of the focus is on reducing spending, but sooner or later we're going to have to set priorities. One of my priorities is research and development."

--Herman Wang, herman_wang@platts.com

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