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Is The Energy Department In Over Its Head?

As we noted last week, the stimulus bill Obama plans to sign into law on Tuesday has all sorts of green provisions in it. The Energy Department's going to be doling out billions of dollars in new grants for efficiency, home weatherization, battery research, and so forth. Goodies for all! But this raises a delicate question: Can the DOE even handle all this extra responsibility? After all, the point of a stimulus package is that the money flies out the door fast. Grants handed out, loan guarantees issued, contracts approved—bam, bam, bam. Fast. But, as The Wall Street Journal reported on Saturday, the gears at the Energy Department are notoriously slow to turn:

Minnesota's Sage Electrochromics Inc. has been ready for months to move on just the sort of project the Obama administration hopes will bolster the U.S. economy: a $65 million factory that would make energy-saving windows and generate 250 new jobs.

So what's holding it up? The Energy Department, whose fledgling loan-guarantee office has yet to approve a single project, including the proposed Sage glass factory, since the loan program launched in early 2007.

And so on. Now, on the plus side, new energy secretary Steven Chu grasps this problem. He's said straight out that one of his first priorities is to unclog the department's project pipeline and get companies like Sage Electrochromics the loan guarantees and grants they've been tapping their feet for. Fast. But now, all of a sudden, there's a whole new stack of grants and loan guarantees to shove through, as well. The department's battery research program—to take one example—is set to balloon from $215 million to $2 billion. And, while officials don't want to lavish this money on the first shady entrepreneur that strolls along, they also don't want to get so bogged down in scrutinizing projects that nothing ever gets the green light. That wouldn't be very stimulative, would it?

So Chu has to revamp the agency. In a big way. These are mostly dull, bureaucratic issues—but all those green provisions in the stimulus bill hinge on this dull, bureaucratic stuff! One potential snag, meanwhile, is the little-known fact that the bulk of the Energy Department's $25 billion budget actually has nothing at all to do with energy—most of the budget goes toward overseeing the nation's nuclear weapons arsenal and cleaning up former weapons labs. DOE simply isn't an agency whose primary focus is transforming the nation's energy economy... yet that's precisely the task Congress just told it to undertake.

That's why, of late, various think-tank types and government officials have been wondering whether it might make sense to remove the Energy Department's nuclear-weapons portfolio, so that the department can focus on, you know, energy. EnergyWashington has the rundown on some of those plans, which are still extremely embryonic. One recent OMB memo asked both the Energy Department and the Defense Department to "jointly study" whether the National Nuclear Security Administration should be handed over to the U.S. military. (One energy expert calls the department's nuclear responsibilities an "albatross.")

I'd expect to see a lot more ideas along those lines in the coming months, as the Energy Department struggles to keep pace with Obama's clean-energy dreams. To take another example, Earth2Tech's Josie Garthwaite reports that Andy Karsner, a former assistant secretary for efficiency and renewables, has argued for the creation of a new independent clean-energy bank that would handle project financing—something the Energy Department, with its core background in science and technology, isn't always well-equipped to handle. Ideas like that.

--Bradford Plumer