Published: July 16, 2025
By: Concentric Staff Writer
Key takeaways:
- The President Donald Trump Administration submitted its Fiscal Year (FY) 2026 budget request for the U.S. Department of Energy (DOE).
- Energy Secretary Richard Wright outlined the budget request at a recent hearing of the U.S. Senate Committee on Energy and Commerce.
- The administration’s priorities reflect an opposite approach to his predecessor, President Joe Biden, particularly in the area of regulations and permitting, fossil fuels and climate policies, and funding.
- DOE also indicated a focus on nuclear energy, including small modular reactors (SMRs), developing artificial intelligence (AI) data centers, and stimulating production and export of fossil fuels.
The Trump Administration’s FY 2026 budget request for DOE reflects a departure from the previous administration in many ways, with a focus on emerging issues such as demand growth and new technologies.
DOE’s budget request reflects goals of securing the nation’s place in development of artificial intelligence and nuclear energy while also focusing on weapons stockpiles and meeting Cold War legacy waste commitments, according to DOE materials. The fiscal year begins on Oct. 1, 2025.
“The Department of Energy is capable of meeting these critical missions while increasing efficiency, unleashing innovation, and ensuring we are better stewards of taxpayer dollars,” Wright said at a June 18 hearing of the U.S. Senate Committee on Energy and Natural Resources. “President Trump is committed to balancing the budget and implementing fiscal restraint – focusing agency funding on the crucial goal of unleashing American energy dominance.”
The President’s 2026 Discretionary Budget Request totals $163 billion, a 22.6-percent drop from current-year spending.
The document describes a departure from policies of the previous Administration, a line-by-line review of spending, and consideration of whether certain governmental services could be better provided by state or local governments.
Generally, DOE proposed reductions in clean-energy programs and spending while making fossil fuel production a priority. Among the announced goals are increasing domestic exports of liquified natural gas (LNG) and decreasing timelines for permitting review and approval for LNG-related infrastructure. According to Wright, DOE so far has approved projects totaling more than 11.45 billion cubic feet per day (Bcf/d), an amount that eclipses the total annual exports of the world’s second-largest LNG exporter, Australia.
The Administration has also focused on reducing costs for consumers and expanding customer choice by cutting nearly 50 regulations and eliminating standards for electrical equipment, reducing regulations for building and energy production, and easing certain requirements for grant recipients. DOE rules that have been nullified involve equipment such as walk-in coolers and freezers, as well as efficiency standards for gas-fired instantaneous water heaters and commercial refrigeration equipment.
Trump has also indicated a focus on nuclear power, supporting the reopening of the Palisades Nuclear Energy Plant in Michigan and the DOE budget allocating high-assay low-enriched uranium material to several advanced nuclear energy developers.
“It is imperative to jumpstart America’s nuclear energy industrial base, and I am taking immediate action to accelerate the deployment of small modular reactors (SMRs). As electricity demand continues to grow, fueled by AI development and the growth of American manufacturing,” Wright said at the hearing.
The budget request provides for $46.3 billion in discretionary budget authority for FY 2026, a $3.5 billion (7-percent) decrease from the previously enacted level. The largest chunk of the budget, $30 billion, would go to the National Nuclear Security Administration (NNSA) which funds nuclear and fossil energy, invests in national laboratories, particularly in the areas of nuclear fission and artificial intelligence, and implements Trump’s announced “Peace Through Strength” initiative. There is also an announced goal of increasing production of domestic energy resources such as coal, natural gas, petroleum, and nuclear. The budget includes $1.37 billion for the Office of Nuclear Energy and $750 million in credit subsidy for the Loan Programs Office to accelerate deployment of nuclear energy.
Next to the National Nuclear Security Administration, the second-largest budget request is for environmental management ($8.09 billion) and the Office of Science ($7.09 billion), with nuclear energy receiving $1.37 billion. Less than $1 billion apiece is proposed for programs involving energy efficiency and renewable energy, fossil energy, and other areas. The Office of Fossil Energy would get $595 million.
The DOE budget traditionally gets submitted by the President in May of each year, including detailed proposals, at which point the House and Senate Budget Committees consider the request and pass a budget resolution known as a non-binding framework. Total discretionary spending is then allocated and divided among 12 appropriations committees and energy and water development subcommittees.
The House Energy and Water subcommittee recently announced a delay in its scheduled July mark-up of the budget request. After approval in subcommittee the full appropriations committees vote, disagreements in the House and Senate versions are reconciled in Congress before being submitted to the President for signature.
During Wright’s June 18 testimony on Capitol Hill, Rep. Scott Peters (D-CA) questioned him on the agency’s plans to accelerate the construction of electric transmission lines. Peters noted that previous “national-interest” transmission corridors with enhanced federal authority to site lines that were created in 2005, similar to those funded in the Inflation Reduction Act of 2021, have never been utilized. He also asked Wright if he would work with the Federal Energy Regulatory Commission to get permitting parity between natural gas lines and electric transmission lines.
“Absolutely. The United States needs to build more energy infrastructure of all kinds, and certainly including transmission lines,” Wright replied.
Peters also mentioned reliability issues such as North American Electric Reliability Corporation reports that 35 GW of transmission transfer capability among regions would lower costs and make the system more resilient to extreme weather.
“I agree with my colleagues that we are walking into an affordability and reliability crisis,” Peters said.
Wright said there is no doubt that the country would benefit from more transmission, and that National Environmental Policy Act environmental protests have lengthened the permitting process. The need for dynamic ratings allowing more efficient use of lines and wrong incentives in the regulatory environment are other issues, he said.
Rep. Robert Menendez (D-N.J.) asked Wright if he supported an “all of the above” energy strategy and Wright said he did not and that he would not support energy resources that are less reliable and more expensive. He added that he has worked in the solar, geothermal, and nuclear fields.
When Menendez asked if “increased production of all types of energy, including renewables, bring down costs for energy,” Wright replied “absolutely not. That is not at all how the marketplace has worked.”
“’Absolutely not,’” Menendez said, quoting Wright, “I’m going to make a note of that.”
Other discussion was declining costs in Texas with the addition of renewables, with Menendez questioning Wright on whether he would acknowledge that prices had come down because of the addition of renewables to the Texas grid. Wright said he didn’t think there was a correlation between the addition of renewables and lower energy prices.
Wright also said that large amounts of renewables had been added there because “you can build things in Texas.”
In conjunction with the budget request, DOE issued an Appropriations Detail including each allocation program and office, allowing comparison of enacted levels for FY 2024–25 versus FY 2026. This includes entities such as the Western Area Power Administration, Southeastern Power Administration, and Southwestern Power Administration.
The Atmospheric Protection Program was eliminated through a $100-million funding reduction, with the program described as “an overreach of Government authority that imposes unnecessary and radical climate change regulations on businesses and stifles economic growth. By prioritizing climate change over job creation and energy independence, the program has burdened American industries with costly mandates, ultimately hurting consumers and taxpayers,” according to DOE documents.
Other funding was removed for certain renewable energy, electric vehicle and battery manufacturers; the Advanced Research Project Agency Energy (ARPA-E) program; “non-essential” nuclear research; and climate and social programs. Other funding went towards securing access to critical energy and mineral resources.
ARPA-E will be refocused on high-risk, high-reward energy research focused on technologies that increase energy reliability, according to Wright.
Also proposed in the budget is a 157-percent cut in Infrastructure Investment and Jobs Act (IIJA) Funding for energy. Total cancellation of IIJA funds is proposed at $15.3 billion along with a $2.6 billion reduction in Energy Efficiency and Renewable Energy program funding, which would halt investment in “Green New Deal” programs. DOE also issued Budget justification for the FY 2026 request.
At the hearing, Wright described AI as “the next Manhattan Project,” and that it is essential that the U.S. lead in its development. DOE has a “significant role to play” in AI deployment for scientific discovery, energy innovation, and national security. He said the U.S. should not overburden AI developers with restrictions and regulations, including those needed for data centers.
“We need all energy sources to power the global AI race and meet growing data centers energy demand, including natural gas, nuclear, geothermal, and coal, while also ensuring the security of the grid,” Wright said.
Other topics discussed at the hearing included energy costs, cybersecurity, generation retirements, and grid reliability.
Wright had previously ordered the refilling of the Strategic Petroleum Reserve and its infrastructure, including plans to safeguard the reserve.
The final submitted budget bill must be signed by the President on or before the beginning of the fiscal year, which is Oct. 1.
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All views expressed by the author are solely the author’s current views and do not reflect the views of Concentric Energy Advisors, Inc., its affiliates, subsidiaries, related companies, or clients. The author’s views are based upon information the author considers reliable at the time of publication. However, neither Concentric Energy Advisors, Inc., nor its affiliates, subsidiaries, and related companies warrant the information’s completeness or accuracy, and it should not be relied upon as such.
