A new energy future means a new Energy Department

As a Nobel laureate in physics and a respected advocate for reducing greenhouse gas emissions, Steven Chu, President-elect Barack Obama’s choice for energy secretary, appears to be well suited to carrying out Obama’s pledge to generate new green energy jobs and reduce U.S. dependence on foreign oil.

But among Chu’s most daunting challenges will be reforming the Energy Department itself. Created in 1977 in response to oil disruptions, Energy has done little since to stem the country’s burgeoning energy problems. With about 5.5 percent of the world’s population, the United States consumes more oil than any other nation, three-fourths of which comes from foreign sources. And as U.S. energy dependence has worsened, its greenhouse gas emissions have grown worse as well–increasing by 17 percent since 1990–accelerating potentially disastrous climate change.

The main reason for Energy’s ineffectiveness is that it’s not structured to usher in the country’s energy future. Why? Because its mandate to maintain the country’s large, antiquated nuclear infrastructure effectively places budgetary handcuffs on the energy secretary–whoever it is.

For example, last year, Energy’s biggest spending priority was to maintain some 10,000 nuclear warheads. More largely, for most of its existence, two-thirds of Energy’s annual spending has gone to maintaining the U.S. nuclear weapons complex. With a land mass greater than Rhode Island and Delaware combined and about 100,000 employees, Energy’s nuclear complex would rank high among the country’s largest corporations. Yet, if it were a private business, it would be well into bankruptcy. Facing hundreds of billions in liabilities that rivals the Wall Street bailout, the country’s nuclear arms production legacy has stuck Energy with thousands of contaminated structures, an enormous amount of high-level radioactive waste, and some of the most severely polluted sites in the Western hemisphere.

Taking the perennial backseat is Energy’s loose confederation of energy programs such as technology research and development, energy regulatory programs, the Strategic Petroleum Reserve, management of public power supplies in 19 states, and providing in-depth energy information. Last year, these programs comprised only 17 percent of Energy’s $23.8 billion budget. In terms of technology research and development, nuclear energy, which primarily benefits Energy sites, received the most at $1 billion. Fossil fuels came in second, snagging $904 million, and energy conservation took a distant third with $468 million.

While Chu may have an aversion to coal and want to support alternative energy sources, his options are limited because of the heavy legacy of the weapons program, site cleanup, and the traditional priorities given to nuclear and fossil fuels, which have powerful constituencies in Congress.

Despite Obama’s campaign pledge to cut nuclear arms, spending for bombs won’t come down that much either. Energy’s National Nuclear Security Agency has its own constraints, including growing safeguard and security costs, restoring aged facilities, and the high price of maintaining the U.S. nuclear arsenal.

What’s needed is a major restructuring of Energy. The first step is to work with Congress to expeditiously transfer the department’s nuclear weapons programs to the Defense Department. With the Cold War concluding almost 20 years ago, it’s time to consolidate nuclear arms activities. In terms of cleaning up Energy sites, the United States should establish an independent nuclear decommissioning authority–such as Britain has recently done–to address its nuclear legacy. This could assure environmental compliance and public accountability. At that point, a new Energy structure should be established, based explicitly on meeting the nation’s energy, economic, and environmental goals.

Freed from its nuclear weapons millstone, there’s much Chu can do to make Energy a major player in constituting a sustainable U.S. energy policy–such as helping to establish a national electricity grid to tap into large potential sources of renewable wind and solar energy and investing in conservation that can become a potent tool to reducing fossil-fuel dependence and stimulate employment. Energy also can play a major role in helping the ailing U.S. auto industry through its research-and-development and loan-guarantee programs. And as a premier scientist, Chu can help strengthen the nation’s science base by sharpening the focus of academia and Energy laboratories to work toward President-elect Obama’s goals of achieving energy self-sufficiency and major reductions in greenhouse gas emissions.

While undertaking such a comprehensive restructuring won’t be easy, the status quo is far worse. Therefore, President-elect Obama’s positive energy vision can either be sustained by a new, more responsive Energy Department, or risk failing due to the department’s dysfunction.