By Merrill Matthews
Former Texas Governor Rick Perry, now heading the Department of Energy, must contend with significant obstacles posed by bureaucratic structures, environmental advocates, and media scrutiny.
The agency itself was established by President Jimmy Carter in 1977, created partly as a response to Middle Eastern oil-exporting nations’ weaponization of petroleum supplies.
With a proposed 2017 budget of $32.5 billion, DOE oversees multiple energy-related functions. Notably, fossil fuel regulation falls outside its purview—that responsibility rests primarily with the Environmental Protection Agency and the Department of the Interior.
Among its core responsibilities is management of nuclear power facilities, missile complexes, nuclear waste, and environmental remediation efforts.
The agency formulates national energy policy, which shifts according to each administration’s priorities. Under the Obama presidency, it functioned as a major funding source for green energy initiatives, though results proved inconsistent.
Cape Wind, a Nantucket Sound wind turbine venture, received a $150 million loan guarantee from DOE in 2014. The project stalled, however, when local opposition emerged over concerns that consumers’ electricity costs could double.
Solyndra, the solar company whose collapse became a high-profile scandal, had secured its $535 million DOE loan in 2009.
Perry’s task is clear: he must streamline, reduce, and reorient DOE operations. Several steps merit consideration.
Remove energy source mandates and subsidies. Over a five-year period, the Obama administration disbursed an average of $39 billion annually toward solar and renewable energy initiatives, with DOE contributing significantly.
Markets and consumers, not government, should determine which energy sectors thrive. Perry ought to eliminate DOE’s clean energy subsidy programs and redirect those funds to taxpayers.
Restructure energy research priorities. DOE carries responsibility for energy research and development activities.
Pursuing Obama’s vision for a clean energy future, DOE’s 2017 budget request aimed to “double clean energy R&D funding in five years.” Such expansion appears unlikely now.
While DOE might appropriately conduct specialized research into both fossil fuels and clean energy, such work frequently becomes a vehicle for political objectives. Perry should remove political considerations from DOE’s R&D efforts and redirect them toward developing a practical energy strategy—one acknowledging that fossil fuels will remain essential to the nation for decades ahead.
Accelerate liquefied natural gas terminal approvals. The United States could develop LNG into a significant export commodity, yet federal processes have typically hindered rather than advanced this possibility.
The Federal Energy Regulatory Commission, an independent entity within DOE, bears responsibility for reviewing applications to construct LNG terminals that liquefy natural gas for ocean transport.
Permit issuance moved slowly under the Obama administration. Perry should accelerate this approval timeline. Beyond providing economic benefits from gas sales, expedited approvals would supply an energy alternative for allied nations currently reliant on Russian natural gas.
Dismantle the Strategic Petroleum Reserve. Created under DOE’s authority, the SPR maintains crude oil reserves as protection against potential American import disruptions. Yet advances in drilling technology have boosted U.S. oil output so dramatically that the nation will soon become a net exporter. With its original purpose obsolete, the SPR warrants phase-out.
Though DOE maintains several vital core functions, it has undertaken numerous expensive and ineffective initiatives. Perry must eliminate these undertakings and restore the agency to its foundational purpose. The result will be a leaner, more economical, and significantly more efficient DOE.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Follow at twitter.com/MerrillMatthews.