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Published By: CQ Today
November 2, 2008

By Coral Davenport, CQ Staff

In a campaign marked by plenty of rancor down the homestretch, both presidential candidates still share one big area of broad agreement: The United States must act, and fast, to slow global warming by starting to wean the nation of its fossil-fuel dependence and doing more to promote alternative-energy sources. And with a bulked-up Democratic congressional majority keen to do big things, the country is poised to rethink fundamental questions about how energy gets used -- a shift that could shape the next decade of energy policy in Washington.

What's much less clear is where this new agenda will leave the Department of Energy. At first blush, it would seem the obvious arm of the federal government to put in charge of driving the next generation of energy technology and directing efforts to cut the carbon emissions that come from energy use. But because of its expansive responsibility to oversee civilian and military nuclear safety, the making of energy policy at the department has long been viewed as, at best, a second-tier priority.

One way or another, energy experts and department insiders expect that situation to change in the near future. The department's policy-making portfolio will be expanded significantly to include framing the options for combating climate change, with a bigger budget and more people to get the job done -- an approach that both John McCain and Barack Obama will likely adopt, people close to the debate say. Additionally, either could make an expanded Energy Department part of a new Cabinet team on the issue being run by the White House.

"I think you are going to see a revolution in the agency that moves it more toward clean energy production than toward its classic mission of nuclear weapons and waste issues," said Paul Bledsoe, the spokesman for the National Commission on Energy Policy, an independent think tank that advises Congress on energy policy.

Nuclear Concerns Come First

The Energy Department's energy-policy deficit has already emerged as a concern for some senior lawmakers who are trying to win more spending for its energy research programs, even as they worry openly that the department may lack the wherewithal to absorb the extra funds efficiently. Jeff Bingaman, the New Mexico Democrat who chairs the Senate Energy and Natural Resources Committee, said he wants to get Energy more money next year to develop "clean" energy technologies such as carbon sequestration, the process of capturing and storing carbon dioxide emissions before they rise into the sky and heat up the atmosphere. But he added that the success of his plan "will depend crucially on our ability to fund new energy science and engineering and on training the next generation of energy researchers and technicians."

Declaring that such efforts have so far been "totally inadequate," Bingaman said that "we need to improve the functioning of federal agencies and programs relating to energy across the board."

Despite its name, the Energy Department is principally a national security agency: About two-fifths of its spending now is on nuclear security programs, primarily safeguarding the nation's atomic weapons program, a mission it inherited from its precursor agency, the Cold War-era Atomic Energy Commission. To that end, it also extensively funds advanced research in related fields, such as high-energy physics, particle acceleration and supercomputing. It employs more than 30,000 scientists in 21 major research centers, such as the renowned Los Alamos National Laboratory.

It's true that in recent years the department has taken a somewhat more active hand in energy issues and jump-started some research and development initiatives, especially as oil reserves have dwindled, fuel prices have spiraled upward and climate change has emerged as a major issue.

Even so, 62 percent of the department's budget for the fiscal year that ended a month ago went to oversight of defense-related activities, including monitoring of nuclear weapons and nuclear reactors to power naval submarines. Just 12 percent, or $2.9 billion, was devoted to programs for promoting conservation and bolstering the nation's energy supply.

"It's been a longstanding joke in Congress and the executive branch that the agency would be better named the Department of Nuclear Weapons and Nuclear Cleanup," said Kevin Kolevar, a veteran Senate aide who is now assistant Energy secretary for electricity delivery and energy reliability.

Change Is Coming

But the department's priorities will likely be challenged next year. Obama has proposed spending $150 billion during the coming decade on researching and developing advanced energy technology aimed at lowering greenhouse gas emissions. McCain has proposed committing $2 billion annually -- almost the entire budget of the department's current energy program -- to advancing clean-coal technology alone and has set a target of cutting greenhouse emissions 60 percent within four decades.

If either proposal becomes law, the department would undergo a rare transformation, gaining important new responsibilities for policies that would have an impact on the domestic economy without shedding its principal current job, which could have enormous repercussions in global affairs.

The changes wrought in the energy sector -- and indeed throughout the U.S. economy -- under a federal initiative to curb carbon emissions would make for a workload in domestic energy policy unlike anything the department has seen. A cap-and-trade system to regulate carbon dioxide would, for example, plunge department regulators into the vanguard of an economywide initiative, one that would produce significant spikes in energy prices in the midst of an economic downturn.

The EPA, which will be designated to monitor compliance under such a system, would have a smooth transition into that new role, since it already oversees a version of the program to reduce emissions of sulfur dioxide and other air pollutants. But the Energy Department, as the lead agency to develop the energy technology to carry out cap-and-trade, would have to hit the ground running.

"Energy policy is an important function, and the department is not real well-organized to do it right now," said R. James Woolsey, a member of the National Commission on Energy Policy and a former director of central intelligence, who has gained notoriety for working to frame global warming and the national reliance on fossil fuels as national security threats. He proposes creating a fourth undersecretary of Energy, for energy efficiency and renewable energy, who would report directly to the secretary. He also recommends launching a "joint chiefs policy shop" for energy, modeled roughly on similar offices in the departments of Defense and State.

"Using arms control as a model, you'd want to have the policy office to have direct access to the secretary -- that statutory authority has not been there," he said. "On a lot of important energy policy, if you turn to DOE and say, 'Where's the policy office to deal with that?' it's not real easy to find."

Other experts say such an office would need to have access to much more money for researching and developing new, low-carbon-emitting energy technology. One proposal gaining traction in policy circles would launch an Energy equivalent of the Defense Department's Advanced Research Projects Agency, which has mounted high-risk, high-reward projects that led to key technological innovations such as the Internet and artificial intelligence. Democrats in Congress have sought to institute such a program for years, but President Bush has rebuffed the idea.

Locked in the Cabinet?

All this ambitious talk has sparked growing anxiety among personnel in the department's nuclear weapons and waste programs. They know that the economic downturn will likely call for some deep federal budget cuts, and they fear that their issues could get crowded out as the next administration seeks to take bold steps to curb climate change.

Kolevar, the assistant secretary, insists that the two missions can co-exist with skillful management. "You'll still have thousands of people involved in the nuclear issue. But there's clearly an understanding that there has to be an increasing role for energy sciences and energy policy. When you look across the government, you see a lot of agencies with very different missions, and it still works very well," he said.

Some liberal advocates on climate change question how well the department can take on these new responsibilities without a firm guiding hand from the White House. Leaders of the Center for American Progress, which has been consulted by the Obama campaign, say that the White House should create a National Energy Council on par with the National Security Council and National Economic Council, which would include the secretaries of State and Interior, along with the head of the EPA. Energy would still take on more energy-policy work, they argue, but under the direction of a new cabinet-level national energy adviser, who would coordinate the council's recommendations and answer directly to the president.

"This new body's mission would be to elevate the issue of energy and climate change and make sure there was the kind of cross-cutting thought in the White House that doesn't always happen within the agencies," said Kit Batten, a fellow at the center. In that vein, she and her colleagues recommend that the council's first order of business would be to draft major energy policy for the president to deliver to Congress within 60 days of inauguration.

Meanwhile, McCain has indicated that he, too, would create a White House council of energy policy -- under the direction of Vice President Sarah Palin, who would pick up where her predecessor, Dick Cheney, left off in steering White House energy debate.

But even if Energy retains its present status, it will be wrestling with a far greater workload, experts say. "A lot of people have been envisioning this for some time," said Bledsoe of the National Commission on Energy Policy. "There's going to be a very large focus on research, development and deployment of long-term clean-energy technology, which will lead to large increases in government spending and government research. How to do it will be a fundamental policy question the administration's going to have to address, and DOE will be in the center of it, playing a larger role than it ever has."