from Energy, Security, and Climate and Energy Security and Climate Change Program

Obama Needs More Oilmen

June 7, 2010

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Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

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President Obama caught some flak last week for appointing former EPA Administration William Reilly to cochair his oil spill commission. Rachel Maddow’s blog has highlighted the fact that Reilly sits on the boards of ConocoPhillips, DuPont, and Energy Future Holdings. (He will be taking leave from the ConocoPhillips board.) Tom Philpott at Grist has run with that report, noting that Obama also employs former BP chief scientist Steven Koonin as DOE Undersecretary for Science, and has called on Obama to “purge his administration of petro hacks”.

I can understand their concerns. The reality, though, is that the Obama administration is dangerously short of senior people who actually understand how the oil industry works. Even if the United States were to (wisely) adopt an ambitious policy that dramatically lowered U.S. dependence on oil, we’d still be consuming a lot of oil for quite a while. Given that reality, it would seem wise to have some people around who understand the guts of how the oil world works.

(Full disclosure: I know both people mentioned above. Bill Reilly was on a climate change task force that I directed in 2007-8. I’ve known Steve Koonin since 2002 through my work on radiological weapons; he was also the external examiner when I defended my PhD.)

Take a look at the organization chart for the Department of Energy, which, in principle, is the primary department responsible for energy in the U.S. government. It is populated by an extraordinary group of people. Yet Koonin is the only person with energy industry experience at the undersecretary level or above. He is also the only person at that level or above who entered the administration with substantial fossil fuel expertise. Most oil people, I should note, would beg to differ; Koonin had essentially no exposure to the oil industry prior to 2003, when he left his post as provost of CalTech.

Secretary Chu had been deeply immersed in renewables issues; Undersecretary Dan Poneman is an authority on all matters nuclear; neither of them had oil experience. Chu has, by all accounts, benefited enormously from the counsel of Matt Rogers, his special advisor for stimulus act spending, who, having once run McKinsey’s U.S. petroleum practice, has essentially doubled as a fossil fuel advisor to the Secretary; with much of the heavy lifting on the stimulus over, though, it would not be surprising to see him leave relatively soon. The reality is that very few people accumulate substantial expertise about the oil industry without being in it.

Or take a look at the staff of the National Security Council, which should be running the interagency process in this area. (I would provide a link if I could; there isn’t one.) The heavy lifting of interagency coordination typically happens at the senior director level. Yet, more than a year into the administration, the senior director for energy slot remains was unfilled. (UPDATE: The slot was apparently filled a day or two before the oil spill started. The new senior director for energy is Glen Sweetnam, who has decades of industry experience, and is currently on detail from the EIA. That’s good news, and a credit to the administration.) The reason? It’s complicated, but most people with deep practical oil expertise also have ties to industry, and, as a result, have conflicts of interest that making them unhireable. Moreover, if my conversations with people in the energy world are indicative, many of those experts who are free of conflicts have been wary of joining an administration that they perceive as being unwelcoming to those on how to live oil while we have to rather than on how to get off oil entirely. Again, this surely isn’t the full explanation, but it’s a significant part of it.

None of this is an argument for loading up the administration with people who have big stakes in the oil industry’s financial fortunes. But during the decades-long journey to an low-carbon economy, the United States is going to be hugely vulnerable to the vagaries of oil, be they environmental, economic, or geopolitical. Understanding those dangers – and the ways we can mitigate them – requires(among many other things) understanding how the oil industry works. Obama would benefit from having more people with such knowledge, not fewer, in his employ.

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