Commentary: A nonpartisan approach best for progress on energy policy

William Hederman

was a senior adviser to Energy Secretary Ernest Moniz and is now a senior fellow at the University of Pennsylvania's Kleinman Center 

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The Trump International Hotel in Washington. RON SACHS / CNP, Sipa USA, TNS

Among policies where President Trump has promised change, energy ranks high. But it's important to remember that energy has, historically, avoided domination by partisan politics. And while former Energy Secretary Ernest Moniz's priorities fit the Obama administration he served, the new team can readily build upon some of those policies.

Start with energy efficiency in large commercial office buildings. Interestingly, Trump comes into office knowing more about building technology than any other president - with the possible exception of Thomas Jefferson. As a result, working to improve building energy efficiency would be a natural for the new president.

Trump could start by asking the managers at his leased Trump Hotel on Pennsylvania Avenue to explore what efficiency measures are not allowed because of bureaucratic and other institutional obstacles.

Many government buildings are under "performance contracts" that allow the contract owner to share in energy savings the contractor creates. As seems to happen far too often in the federal government, the performance contracts include multiple conditions, including disincentives toward innovation. This has often led to a bottom-line result that calls on contractors to deliver exactly the savings they estimated and penalizes them if they under deliver. Naturally, then, they are unwilling to employ novel ideas or technologies. Thus, a program with the laudable goal of promoting energy conservation innovation in buildings ends up hindering innovation.

Second, given Trump's emphasis on creating new jobs, the new energy secretary, former Texas Gov. Rick Perry, may want to take a fresh look at the job implications of energy infrastructure investment. Under the previous administration, the Quadrennial Energy Review team found that energy job figures were neither rigorously defined nor estimated. The data that had to be used often came from interest groups claiming massive job creation in their particular technology. The Energy Department began working with the Bureau of Labor Statistics to find ways to track the job shifts and job creation resulting from energy changes. This job information will be important to the new administration, and deserves more attention.

Third, the "all of the above" energy supply strategy strongly supported by the prior energy policy team did not eliminate any energy source from the plans for the future. That overarching strategy worked to maintain and enhance options in the face of great uncertainty and should be compatible with the new administration's goals.

Fourth, the Energy Breakthrough Coalition and Mission Innovation ideas promoted by Microsoft's Bill Gates envisioned advancing public-private partnerships where research and development would provide a robust stream of energy technologies ready for commercial scale investment by Gates' international group of billionaires. While the effectiveness of federal energy R&D in some areas may be spotty, this broad concept, properly implemented, could take advantage of American private ingenuity.

Sponsoring competitions that award substantial financial prizes to technology teams (researchers or entrepreneurs) to achieve commercial viability - instead of relying on federally supported research programs - deserves special consideration. No commercial achievement, no prize money.

The new energy policy team can also improve upon the presentation of data and analyses. For instance, the previous administration's estimates of damage caused by climate change generally failed to objectively present the effects of development in coastal areas. By including the value of increased development, the trends for severe storms exaggerated the increased damage.

In another example, an early natural gas analysis indicated that the nation's pipeline system had shown remarkable resilience and responsiveness to the topsy-turvy experience it had encountered in the decade before the review. Natural gas pipelines literally had to reverse direction, shifting to north-to-south flow from south-north flow to accommodate significant new production in the Northeast, always a prime consumption region but now a production area (at least up to Pennsylvania). Some pipes also had to switch from moving gaseous products to liquid products. After White House intervention, the focus on gas pipelines became their relatively minor methane emissions. The industry did not fight this emphasis because of its interest in being counted as part of a solution rather than the problem. But it was an unfortunate deflection of the most important policy lesson from the successful development of unconventional gas supplies and their movement along newly renovated systems.

Of course there is one large difference in policy between the previous administration and the new: climate change. Moniz was adamant that climate change is an undebatable fact. The Trump team seems equally adamant in its positions, but I hope it will be open to debate and discussions - because such interaction can help identify new ways to solve problems.

We can still make progress on innovation and solutions, but only if we continue our decades-old nonpartisan approach to energy.

hederman@upenn.edu

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