Obama’s Second-Term Energy Team

by Leo Wiegman

The major energy-related events of President Barack Obama’s first administration included passage of the 2009 American Recovery and Reinvestment Act (ARRA) stimulus package, an unprecedented federal investment of $831 billion that allocated money for both energy efficiency implementation and renewable energy deployment. And in 2010, the administration responded to the Deepwater Horizon explosion and oil disaster in the Gulf of Mexico.

In his inaugural address for his second term, President Obama laid out an “all-of-the-above” energy policy that includes a mix of nuclear, coal, and natural gas, as well as renewable energy, energy storage, and energy efficiency technologies. His nominees for three key leadership positions in the agencies most directly involved in energy closely mirror the leaders they will be replacing, and all three hewed closely to the administration’s talking points throughout the confirmation process.

Outgoing Secretary of Energy Steven Chu is a highly credentialed physicist from Stanford University who had ample prior management experience as director of the Lawrence Berkeley National Laboratory. His successor, Ernest Moniz, a physicist from the Massachusetts Institute of Technology (MIT), likewise comes from academia and has prior experience with government and management service as Under Secretary of Energy during the Clinton administration.

On the broad questions of energy supply, both Chu and Moniz see roles for natural gas and nuclear power in reducing the nation’s reliance on foreign oil and in lowering emissions of greenhouse gases. This disposition places Moniz under the same criticism Chu received from some environmental groups that oppose nuclear power and expansion of natural gas use.

Outgoing Secretary of the Interior Ken Salazar has a solid reputation for conservation of public lands from his time as director of the Colorado Department of Natural Resources and later as a U.S. Senator from Colorado. His successor, Sally Jewell, though lacking prior government experience, arrives with a significant track record in management as the former president and CEO of REI, an outdoor clothing company with a long history of environment conservation advocacy.

At the U.S. Environmental Protection Agency (EPA), outgoing Administrator Lisa Jackson had essentially been elevated from within the agency, having worked at the EPA for 16 years before serving as commissioner of the New Jersey Department of Envi-ronmental Protection and Governor Jon Corzine’s chief of staff. Jackson’s successor, Gina McCarthy, likewise is an inside appointment, being promoted to lead the EPA from her prior post as head of the EPA’s Office of Air and Radiation, which during Obama’s first term issued broad regulations to cut pollution from automobiles and coal-fired power plants.

Collectively, these three appointees become the president’s go-to team for addressing complex energy issues such as natural gas exports, crude oil imports, hydraulic fracturing, and climate change. Members of Congress hold sharply divided viewpoints on these topics, often along party lines. In choosing Moniz, Jewell, and McCarthy, the White House has chosen leaders whom most observers agree appear to have the political touch needed to counter the criticisms from congressional Republicans and some industry lobbyists.

Moniz, Jewell, and McCarthy each support the climate change adaptation and mitigation policies fostered by their predecessors.

Secretary of Energy: Ernest Moniz

A native of Fall River, Massachusetts, Ernest Moniz earned a doctorate in theoretical physics from Stanford University in 1972 and began his teaching and researching career at MIT the following year. During his tenure at MIT, Moniz served as head of the physics department, as director of the Bates Linear Accelerator Center, and most recently, as founding director of the Energy Initiative and director of the Laboratory for Energy and the Environment.

Moniz held an endowed chair at MIT with a research focus on energy technology and policy, which included a leadership role in MIT interdisciplinary technology and policy studies on the future of nuclear power, nuclear fuel cycles, coal, natural gas, and solar energy in a low-carbon world. Moniz has been a proponent of both nuclear energy and natural gas as solutions for reducing carbon emissions in the United States.

From 1995 to 1997, Moniz served as associate director for science in the Office of Science and Technology Policy in the Executive Office of the President. In 1997 President Clinton appointed Moniz as Under Secretary of the Department of Energy (DOE), a post he held until the end of Clinton’s second term in January 2001. As Under Secretary, Moniz oversaw the DOE’s science and energy programs, leading a comprehensive review of nuclear weapons stockpile stewardship, and serving as the Secretary’s special negotiator for Russian nuclear materials disposition programs.

Under Moniz’s leadership, MIT’s Energy Institute published influential research reports on the future of nuclear power, carbon capture and storage for coal, renewable energy, the electricity grid, and shale gas extracted by hydraulic fracturing.

Moniz is no stranger to the Obama administration. In 2009 Moniz was appointed a member of the president’s Science and Technology Advisory Council.

As Obama explained in nominating Moniz, “Ernie knows that we can produce more energy and grow our economy while still taking care of our air, our water, and our climate.”

Indeed, Moniz reaffirmed this approach in remarks during his confirmation hearing: “The President has advocated an ‘all-of-the-above’ energy strategy and, if confirmed as Secretary, I will pursue this with the highest priority.”

In his opening remarks, Moniz identified clean energy and nuclear security as “two of DOE’s core missions and high priority areas for the President.”

“DOE should continue to support a robust R&D portfolio of low-carbon options: efficiency, renewables, nuclear, carbon capture and sequestration, energy storage,” Moniz continued. “In addition, a 21st-century electricity delivery system, including cyberse-curity and a high degree of resilience to disruptions, is vital and deserves increased attention in the next years.”

How much Moniz will succeed in maintaining adequate budgets for the DOE’s critical role as a leading funder of R&D around the nation is unclear. But, at least for the coming year, the president’s proposed budget treats the DOE kindly.

If adopted, the DOE’s 2014 budget of $28.4 billion in discretionary funds would represent an 8% increase from 2012, with much of that going toward renewable energy and efficiency programs. Funding for fossil fuel programs would decrease.

More than was the case for his predecessor, Secretary Moniz brings extensive relationships with the corporate world to his Cabinet role. The MIT Energy Initiative, which Moniz founded, is funded in part by British Petroleum, Saudi Aramco, and Shell. Moniz has disclosed substantial personal financial holdings, all of which will be placed in blind trusts, as well as paid roles with a broad range of energy companies, from which Moniz resigned upon Senate confirmation.

Although some environmentalists sought to bring negative attention to these financial connections, Moniz presented his interaction with industry as a positive. As Moniz stated in the Senate, “I hope to be able to build on this experience so as to convene industry, environmental groups, academia, investors, policy makers, and other stakeholders for constructive and consequential discussions about America’s energy future.”

“A low-carbon economy is absolutely critical,” Moniz noted near the end of his confirmation hearing.

Secretary of the Interior: Sally Jewell

Born in England, Sally Jewell was naturalized as a U.S. citizen following the immigration of her parents to the United States when she was a child. Jewell earned a degree in mechanical engineering from the University of Washington in 1978 and began her career working for Mobil in the oil fields of Oklahoma.

In 1981 she began a 19-year period of working in banking, initially being hired to help banks understand how to finance oil companies. In 2000, after serving four years on the board of directors of Recreation Equipment, Inc. (REI), she was named the company’s chief operating officer. Five years later, she was appointed chief executive officer, succeeding Dennis Madsen.

During her tenure, REI nearly tripled in revenues to $2 billion and has been consistently ranked one of the “100 Best Companies to Work For” by Fortune magazine.

As CEO of REI, Jewell described her philosophy on leadership as one of “transparency and openness and listening” so that “nobody lets their position go their head.” “It’s not one person’s vision,” Jewell said. “It’s a team.”

An avid outdoorswoman, Jewell has scaled Mount Rainier on seven occasions and recently climbed Vinson Massif, the highest mountain in Antarctica.

Jewell has a long history of involvement in the administration’s environmental efforts. She helped create and implement the president’s Great Outdoors program. In 2011 she introduced President Obama at the program’s White House conference.
Jewell has won several awards for her community service, most significantly the Audubon Society’s Rachel Carson Award for Environmental Conservation in 2009.

As a business figure joining the Cabinet ranks, Jewell arrives with both oil sector and conservation credentials. She has less direct experience, however, with the Department of Interior’s responsibilities in overseeing millions of acres of national forests and parks.

“There’s no question that we need balance on the use of our public lands,” Jewell stated during her final confirmation hearing, in response to a question from Senator Lisa Murkowski (R-AK) about what she could take back to Alaskans about the resource side of the Interior Department’s responsibilities.

“Many people, as they enjoy the outdoors, jump in a car to get there. It requires fuel,” continued Jewell. “It is very important that we take [a] balanced approach to both energy development and resource development with conservation and recreation. I don’t think it is an ‘either-or.’ I think it is a ‘both-and.’”

In a question from Senator Mark Udall (D-CO) about how Jewell would use her business acumen in the decision-making process needed to head up “one of the largest divisions of USA, Inc.,” Jewell responded, “Government is different and I appreciate that I need to learn some of those things, coming from the private sector.”

However, as Murkowski noted, it could be an asset that Jewell had not “run the full gamut” of Interior Department issues during her career: “Perhaps that’s a good thing, because perhaps she is able to look through these issues with a fresh perspective, a different lens.”

As with the DOE, the Interior Department’s funding would also see an increase under Obama’s proposed budget, albeit a smaller one at 4%, to $11.7 billion in discretionary funding. The department’s funding ramps up for the Land and Conservation Fund and provides more money for oil and natural-gas permitting programs.

Following a question from Senator Tim Scott (R-SC) about ensuring access to the nation’s vast natural resources on public lands, Jewell stated, “I certainly do believe in the President’s ‘all-of-the-above’ energy strategy. . . . I certainly will work along with the federal land managers in the areas under my jurisdiction, to ensure thoughtfully leaning into those resources, bringing in the best available science, and developing them in a safe and responsible way.”

EPA Administrator: Gina McCarthy

A Massachusetts native, Gina McCarthy earned a bachelor’s degree in social anthropology from the University of Massachusetts Boston, and a joint master’s degree in environmental health engineering and planning and policy from Tufts University.

McCarthy arrives at the helm of the EPA after 25 years of service at all levels of government. Given McCarthy’s pivotal role at the EPA in the past four years, her confirmation hearing served as a referendum on the agency’s considerable regulatory powers among the senators taking part.

One of the most interesting aspects of McCarthy’s career is her work under five governors in Massachusetts and Connecticut, including both Republicans and Democrats. In 1999 she was appointed assistant secretary of pollution prevention, environmental business, and technology in Massachusetts, then was deputy secretary of operations for the Massachusetts Office of Commonwealth Development in 2003 and 2004. Thereafter, McCarthy served as commissioner of the Connecticut Department of Environmental Protection.

Widely respected by both environmentalists and industry for being pragmatic, nonpartisan, and factual, McCarthy was easily confirmed in 2009 as head of the EPA’s Office of Air and Radiation.

Since arriving at the EPA, McCarthy has overseen the development of some of the most critical safeguards the agency has issued since the clean air and clean water standards of the 1970s. The EPA also finalized the first-ever national standards to lower mercury emissions and other toxic air pollution from power plants.

Under McCarthy’s watch, the EPA also proposed the first standards to reduce industrial carbon pollution from new power plants. The EPA received an eye-popping three million comments in favor of lowering carbon pollution from power plants, which collectively comprise the country’s single largest source of emissions.

In early 2013, together with the Department of Transportation, the EPA also adopted historic advancements in clean automobile standards that represent the single largest step the nation has taken to reduce carbon pollution.

Widely supported by consumer and environmental groups as well as automakers and autoworkers, these standards for curbing tailpipe emissions and sulphur levels in gasoline will avoid billions of tons of carbon pollution, help consumers save money on fuel, and reduce the nation’s dependence on foreign oil.

Proponents consider these standards a significant victory for public health, and estimate that they will save thousands of lives and prevent more than 100,000 asthma and heart attacks each year. Critics of the EPA feel these regulations unnecessarily burden the private sector businesses operating the targeted facilities.

As Senator Mitch McConnell (R-KY) noted during the initial hearing, “Vast overreach and burdensome rules and regulations that stifle job creation have been the bedrock of this administration for too long.”

According to the U.S. Office of Information and Regulatory Affairs, EPA regulations cost between $23 and $29 billion each year, while the annual benefits of EPA regulations amount to somewhere between $83 billion and $560 billion.

“The economic exposure associated with climate change is large, not just domestically but also as a national security issue,” McCarthy said during her confirmation hearing to head the agency.

“We are regulating greenhouse gases as pollutants,” continued McCarthy, “but we’re doing it in common sense steps so that we can ensure the economy will continue to grow.”

Unlike the funding increases for Energy and Interior in next year’s proposed budget, the EPA gets the short end of the stick from the White House. The EPA’s total 2014 budget of $8.1 billion is 3.5% less than 2012 levels. But, backing up the president’s commitment to action on climate change, the EPA’s budget in this area shows a slight increase, from $476 million in 2012 to $477 million in 2014.