President-elect Donald Trump’s nominee for Energy Secretary, former Texas Governor Rick Perry, can’t singlehandedly make energy great again by deregulating the industry.
That’s because the U.S. Energy Department (DOE) isn’t the only government agency that oversees oil, gas, coal, wind, solar, and nuclear energy.
Making big investment bets on the future of energy production in the U.S. requires an understanding of which agencies really hold sway, who will head each department, how they will (or won’t) work together, and where paths of least resistance and black holes are.
Proponents of energy deregulation couldn’t believe it when Rick Perry, who led the country’s biggest energy producing state, was tapped to head the Energy Department.
That’s because in a 2011 presidential primary debate, Perry – then a candidate – vowed that if elected he would eliminate the Education Department, the Commerce Department and… He forgot what the third department was.
He was reminded by the moderator it was the Energy Department. Perry’s response was “Oops, I forgot.” That embarrassing moment ended his 2012 presidential run.
Nominating the man who once vowed to eliminate the Energy Department to actually head it seems (to fans of energy deregulation) like a dream come true. Perhaps the message to the industry, they hope, is the Energy Department might be dismantled from within. That’s highly unlikely.
Here’s the three agencies that control energy, and who might be tasked with deregulating them…
The Energy Department
The Energy Department was created under President Jimmy Carter in 1977 following the ill effects the country faced after the 1973 oil crisis. While the DOE oversees energy conservation, energy-related research, and domestic energy production, its top priority isn’t energy. Nor is it overseeing the reliability of the country’s electric grid, or – surprisingly – even the research it directs in genomics, including the Human Genome Project.
It’s shepherding America’s nuclear arsenal.
A sub-agency of the DOE, the National Nuclear Security Administration, is tasked with maintaining the safety of America’s nuclear stockpiles. In fact, more than half of the DOE’s annual $30 billion budget goes to protecting the nuclear arsenal and cleaning up nuclear waste and contamination sites around the U.S.
President Obama’s DOE’s secretary, Ernest Moniz, was even pivotal in the administration’s successful efforts to negotiate a deal with Iran curtailing its nuclear program.
That deal, Mr. Trump says, gives too much to the Iranians, and he’ll renegotiate or do away with it altogether.
Even if it is possible to dismantle the Energy Department, unfettered deregulation of energy would be impossible given the other government agencies overseeing energy.
The Environmental Protection Agency
The Environmental Protection Agency (EPA), created by an executive order penned by President Richard Nixon in 1970 and ratified by committee hearings in the House and Senate (so it can’t be overturned) is a bigger thorn in the side of energy than the DOE.
The EPA oversees the nation’s Clean Air and Clean Water Acts, and sets fuel economy standards for automobiles, among its many mandates.
According the EPA’s website, with its proposed 2017 $8.2 billion budget, the Administration “seeks to further key work in addressing climate change and improving air quality, protecting our water, safeguarding the health and safety of the public from toxic chemicals, supporting the environmental health of communities, and working toward a sustainable environmental future for all Americans.”
President-elect Trump recently nominated Oklahoma Attorney General Scott Pruitt to head the EPA. Mr. Pruitt, a staunch opponent of the EPA, sued the Agency twice over executive orders authorized by President Obama.
Mr. Pruitt says he supports “rescinding all job-destroying executive orders.” He is known to be a close ally of oil and natural gas explorers and producers, as well as climate change doubters.
As far as efforts to combat climate change, President-elect Trump has indicated that he’s is not a fan of the Environmental Protection Agency or its proposed regulation of greenhouse gases, including the Clean Power Plan (CPP).
Mr. Trump has suggested eliminating the EPA’s new source standards for power plants, and the Clean Water Act. Candidate Trump also said he would “revoke policies that impose unwarranted restrictions on new drilling technologies,” a reference to new restrictions proposed on methane emissions from oil and gas production.
But even if the Environmental Protection Agency can be brought to heel so energy companies can rule the roost, there’s another huge government department that dictates energy moves around the country.
The Interior Department
The United States Department of the Interior (DOI), which houses the Bureau of Land Management, the U.S. Geological Survey, the Office of Surface Mining, the Bureau of Ocean Energy Management, the Office of Natural Resources Revenue, the Bureau of Indian Affairs, and oversees the National Park Service and the Fish and Wildlife Service, to name a few of the dozens of operating units of the DOI, has a lot of power over energy rules and regulations.
The Interior Department has been aggressively focusing on what they call America’s “New Energy Frontier,” assessing their responsibilities for managing more than a fifth of the U.S. landmass while managing energy resources under their charge.
A page from Interior’s New Energy Frontier reminds us:
The Bureau of Land Management is responsible for coal leasing on about 570 million acres of BLM, national forest and other federal lands, as well as private lands where the federal government has retained the mineral rights.” And says, “The U.S. Geological Survey is beginning a national assessment of the geologic storage capacity for carbon dioxide in oil and gas reservoirs and saline formations. This effort will provide the foundational information needed to expand the technologies of carbon-capture projects and to understand impacts of such expansion.” And that, “The Office of Surface Mining Reclamation and Enforcement works with states and tribes to balance our nation’s need for continued domestic coal production with protection of the environment.
President-elect Trump just nominated Montana’s Congressional Freshman Ryan Zinke to head the Interior Department.
Although Zinke – who was elected to Congress in 2014, was a Montana state senator prior to becoming Montana’s sole House Representative, and a Navy SEAL commander for 25 years before that – is a Republican, he’s no pushover when it comes to protecting the environment.
Zinke (who broke with the GOP, quitting the platform committee rather than sign onto calls to transfer control of federal lands over to the states) also backs full funding of the Land and Water Conservation Fund.
The outdoorsman accepted Mr. Trump’s nomination saying, “As inscribed in the stone archway of Yellowstone National Park in Gardiner, Montana, I shall faithfully uphold Teddy Roosevelt’s belief that our treasured public lands are ‘for the benefit and enjoyment of the people,'” according to a statement released by Trump’s transition team. Zinke added, “I will work tirelessly to ensure our public lands are managed and preserved in a way that benefits everyone for generations to come.”
Mr. Trump hasn’t been inaugurated yet, and his cabinet nominees aren’t all shoe-ins for confirmation. So, the early betting on energy plays may be dangerously premature in some cases.
While Ryan Zinke seems to be well-liked by both Republicans and Democrats, and may slide into his office unscathed, Rick Perry and Scott Pruitt won’t be so lucky.
On Friday, I’ll tell you what the future of energy is up against and where the safest bets are going to be, no matter who gets to head what departments and what policies prevail.