Energy secretary nominee Moniz is expected to have a fairly easy confirmation in Congress, but he'll still have to answer tough questions about the sequester, nuclear energy, and direct financing of 'green' energy companies.
On Monday, President Obama nominated Ernie Moniz to be the next Secretary of Energy. Like his predecessor, Stephen Chu, he is a scientist - Moniz is a nuclear physicist. Unlike Dr. Chu, Moniz would come to the job with plenty of experience dealing with Beltway politics, having been in the Clinton Administration from 1995 until 2001 and a member of the President's council of Advisors on Science and Technology for the past four years. Early indications suggest a fairly easy confirmation process. Here are a few things to listen for as the confirmation process plays out:
* Sequester has kicked in, and the path to a resolution is opaque at best. Whether sequester is replaced with a deal or not, it seems virtually certain that DOE will be working with a smaller budget than it has had for years. How will Moniz reconcile the demands of a dynamic energy marketplace, the need for continued support for new energy technologies, and the integration of a carbon policy with the energy sector against a budget that may be diminished significantly?
* Former National Security Advisor and now president of the Institute for 21st Century Energy, General James Jones, has been championing the idea of a cross cabinet and bipartisan board to direct national energy policy. Given the pace of the changing energy landscape and the generally accepted view that the U.S. has been in need of a national energy policy for decades will Moniz get behind the creation of a national energy council?
* The meltdown at Fukushima, and ongoing challenges managing huge capital demands have brought the development of new nuclear plants to a halt here with the promised renaissance producing just two plants in construction and some license extensions for plants coming to the end of their original 40 year life. Moniz is an obvious proponent of nuclear power, who wrote a report in 2003 calling nuclear power an import option for a lower carbon energy sector. Will his leadership usher in the beginning of a real nuclear renaissance?
* Under Dr. Chu the role of the DOE expanded dramatically to include financing programs to support the expansion and deployment of new energy technologies including several direct funding programs as well as the loan guarantee program. The feedback on the effectiveness of this expanded role by the Department has been, to be kind, mixed with the obvious fervor over Solyndra and some other select projects combined with frustration over poor program administration by many clean energy executives. Does Moniz try to steer the Department away from engaging on deployment and financing towards a return to its earlier roots with a primary focus on nuclear management and R&D support for new energy technologies?
The loudest opposition seems to be coming from environmentalists based largely on a relatively warm embrace of fracking and natural gas (with some pointing to the potential conflict of interest with the MIT Energy Initiative, which Moniz led for the past 6 years being funded significantly by oil and gas interests). Additional concerns have been voiced about the apparent lack of enthusiasm for supporting renewable energies. Will the focus be natural gas and nuclear as the focus for long term carbon management with necessarily leaner support for renewable energy?
– This article originally appeared in Energy Trends Report, a free subscriber-only newsletter that identifies and analyzes financial trends in the energy sector. It's published by Energy Trends Insider.