By Kennedy Maize
When Denver energy businessman Chris Wright becomes the next energy secretary, he’s going to discover something few Americans know, including Donald Trump and his purported efficiency czars, the DOGE dopes Musk and Ramaswamy: the U.S. Department of Energy has very little to do with energy.
While self-proclaimed conservative budget cutters in GOP clothing are now, and have long, targeted the U.S. Department of Education for extinction, that urge is largely driven by the circumstance that it was created by President Jimmy Carter.
So was the energy department, cobbled together in the fallout from the 1970s Arab oil embargo. Many Americans have no memory of those events, which spiked gasoline prices in America, producing long lines at gas pumps and calls for a re of play of WW2 gasoline rationing. The incoming Carter administration was anxious to demonstrate that Washington would do something about that traumatic period. Ergo: The Department of Energy.
Immediately in his first year in office, Carter commissioned Republican Jim Schlesinger (1929-2014), a bureaucratic Swiss army knife, to create the agency. Schlesinger had been the Nixon administration’s Atomic Energy Commission chairman, CIA director, and Secretary of Defense. He became the first energy secretary.
Schlesinger suffered from a serious edifice complex. He assembled the energy agency by raiding other federal agencies right, left, and center. He cobbled together the defunct AEC’s nuclear weapons program along with the legacy national laboratories; many of the basic and applied research programs from the National Science Foundation; the Interior Department’s Bureau of Mines. He evicted the Agriculture Department from a new, prominent building at 1000 Independence Ave. for DOE headquarters. Schlesinger didn’t like the existing offices on a obscure part of D.C.’s Massachusetts Ave.
DOE was signed into official life on Oct. 1, 1977, with a budget of $10 billion. The 2025 budget request from the Biden administration is $51 billion, which is not an increase given the time value of money.
DOE essentially consists of two fundamental programs: nuclear weapons cleanup and production (with the former Manhattan Project weapons sites now dominant) and basic and applied science. None of those programs touch U.S. consumers directly. In its fiscal year 2023 budget request of a total of slightly more than $49 billion, the weapons program totaled over $30 billion and science programs over $8 billion.
The only DOE program that touches consumers directly is the strategic petroleum reserve, a stockpile of up to some 500 million barrels of crude oil stored in Louisiana and Texas at its peak. It was created in 1975 at the peak of the first oil embargo.
The rationale behind the reserve was specifically not to be used to manipulate consumer prices, rather to manage a cutoff or disruption as occurred in the 1970s. In March 2022 with gasoline prices spiking over $4/gallon, President Biden began releasing 1 million barrels per day from the reserve at about $96/barrel, for 180 days, the stated purpose of the reserve be damned.
Gasoline prices quickly came down, although not to the very low prices of around $1.35/gallon during the pandemic when travel declined dramatically. Gasoline prices today are around $3/gallon, varying by region. Whether Trump might eye the reserve to help fulfill his campaign promises to lower gasoline prices is unknown but unlikely. If he does, the now-depleted reserve would likely disappear entirely.
The federal government agencies that have programs and policies that impact energy businesses and ordinary Americans are the Interior Department (which governs access to oil, gas, coal drilling and mining sites and sites for renewables on federal land), the Environmental Protection Agency, and Treasury.
Trump knows nothing significant about energy, only fictions and cliches. His policy is summed up by his stupid chant of “drill, baby, drill.” That made some sense when Ronald Reagan coined it 45 years ago. It is irrelevant today.
It’s noteworthy that of the 16 individuals that have led DOE since its inception, only two had any actual experience with energy. Both Republican Don Hodel and Democrat Hazel Rollins had hands-on backgrounds in electricity. Rollins was a DOE official in the Carter DOE before a career at Northern States Power Co. in Minneapolis and then named DOE secretary by Bill Clinton. From 1972 to 1977 Hodel ran the federal government’s Bonneville Power Administration and its vast hydropower empire.
The other secretaries of energy have been seven elected officials (including a dentist) and affiliated political hangers-on, three academics, a chemical company executive, a coca cola executive, and a former chief of naval operations (who had some nuclear submarine experience, as did Jimmy Carter).
What would scrapping the energy department involve? Its core missions would likely remain, spun back into their ancestral homes. The Defense Department could take over the weapons program (although DOD is unlikely to be happy inheriting cleanup of the mess left behind by past nuclear weapons production). Many of the science programs could go back to the National Science Foundation. Some might end up at the Commerce Department’s National Institute of Science and Technology. Some might land at the Nuclear Regulatory Commission.
A special case is the Treasury Department. DOE has a well-funded loan programs office, which brags that it has “closed more than $30 billion of deals across a variety of energy sectors.” While that office selects projects for federal funds, Treasury actually closes the deals, writing the checks and setting the financial terms. The agencies with spun-off DOE programs could set up their own loan programs while Treasure remains the final hurdle.
Treasury also sets the rules for the myriad of tax-related energy incentives in Biden’s landmark legislative accomplishments, the 2021 Infrastructure Investment and Jobs Act and the 2022 Inflation Reduction Act. These tax breaks (Trump likes tax breaks) include such elements as incentives for electric vehicles, “green” hydrogen, carbon capture, advanced heat pumps, and the like.
Killing DOE would not be easy. There’s no clamor for it. Trump’s dodgy Department of Government Efficiency is nothing more than braggadocio and PR fluff.
So welcome to DOE, Christ Wright.