As of midnight on September 30, the U.S. federal government officially shut down due to Congress’s failure to pass a new budget for the coming fiscal year. Since 2012, the government has been running on a continuing resolution, an extension of the previous budget, but this time a new decision was needed, and it wasn’t made.
Most people will concentrate on the political implications that this shutdown will lead to, but the fact is that it’s directly impacting on America’s overall capacity to drive global energy innovation. The short-term lack of a federal government means that many of the nation’s top energy innovation institutions and laboratories must scale down their operations, or completely shut down.
Basically, the longer this continues, the less the U.S. will be able to carry out cutting-edge research and produce next-generation energy technologies. Given time this will threaten the country’s ability to remain internationally competitive and its progress to a low-carbon economy.
As a result of the shutdown:
• The Interior Department has had to halt all permits and permit reviews for onshore and offshore oil and gas leases.
• The Bureau of Land Management has stopped developing rules for hydraulic fracturing operations on federal lands.
• The Environmental Protection Agency has had to halt its work on the recently announced regulations for controlling the greenhouse gas emissions for coal power plants.
• The Department of Energy has had to cut back on its review of LNG export applications, and may even have to stop altogether.
• The Bureau of Ocean Energy Management has stopped approving new offshore wind permits.
• The ARPA-E program, responsible for some of the greatest breakthroughs in clean energy technology, has been completely shut down.
• Research at NIST and NOAA, such as climate and weather research, nano-science, and energy science, has all been put on hold.
• And possibly the biggest threat is that the Patent and Trademark Office may have to be closed after another month, preventing innovation of all kind.
Many believe that the current shutdown will only be short-term and that the impacts will be minor, but the truth is that the federal government is vital to energy innovation, and this shutdown is already causing lots of damage.
Originally written for OilPrice.com, a website that focuses on news and analysis on topics of alternative energy, geopolitics, and oil and gas. OilPrice.com is written for an educated audience that includes investors, fund managers, resource bankers, traders, and energy market professionals around the world.