The Role of the Executive Office of the President

Energy security is a whole-of-government challenge, but the federal government’s ability to promote energy security is fractured and discontinuous. While a successful, large-scale reorganization would no doubt be helpful, some discrete remodeling will suffice – and is a more realistic option. There needs to be an energy transformation in the U.S. and global economies, moving from near-total dependence on fossil fuels toward carbon-free, alternative fuels. Although much of this transformation will be driven by the supply and demand of the private sector and consumers, the federal government has a critical, catalyzing role to play.

Today, the U.S. government it is not well postured to play that role. Even though this is a whole-of-government challenge (and arguably, a whole-of-society challenge), there is no whole-of-government response – certainly not a concerted one. The internal schisms and lack of direction are so strong that government representatives at the CNAS workshop referred to the system as “tribal” and several interviewees commented that “when no one is in charge, everyone is in charge.” Energy security is handled as environmental or economic policy, and in some cases agriculture or transportation policy. Domestic policy instruments tend to be entirely separate from international policy instruments. In particular, climate change is handled separately from energy policy within the Executive Office of the President and throughout the government (the Council on Environmental Quality being one of the few exceptions). Furthermore, across all these distinctions, multiple agencies and committees of Congress have jurisdiction, sometimes over the same constituencies.

Achieving energy security will require a coherent and concerted approach across all these dimensions of the challenge. We believe President-Elect Obama will be able to accomplish his energy security goals with a targeted remodeling and reorganization, led through the Executive Office of the President. By the end of his first term, many lessons gleaned from the initial reorganization should also help inform any large-scale structural changes that may be necessary.

Findings

Congress has been driving recent structural and policy changes on energy security through the energy acts of 2005 and 2007, farm bills, and through authorization and appropriation bills, but there are very complicated jurisdictional lines and even more complicated energy security constituencies (24 U.S. states, for example, produce some amount of coal). Although Congress has an important role to play, it is difficult and perhaps not feasible for Congress to lead a truly transformational, national energy policy.

The most important tool for achieving energy security, therefore, will be the president’s ability to lead the way for the U.S. government, the private sector, and the American people. Indeed, the President-Elect has already demonstrated he will use the power of his office to advance these issues. There will be tremendous pressure to focus on competing priorities, however, so the President will need an effective way to delegate and channel his authority. That authority should reside close to him in the Executive Office of the President (EOP).

Recommendations

Given the necessity of presidential leadership, we recommend that the new administration focus on improving and consolidating the Executive Office of the President’s (EOP) role in drafting and overseeing the implementation of a national energy security strategy. There are two basic options: reinvigorate and empower an existing EOP office or create a new council, akin to the National Economic Council or National Security Council.

Press reports and publications by key members of the transition team suggest that the incoming administration is in fact considering the creation of a new National Energy Council (we refer to this Council as the National Energy Security Council, or NESC, to distinguish it from the White House National Economic Council). Whether this independent council is newly created or existing offices such as the Council on Environmental Quality (CEQ) or National Security Council (NSC) are expanded, we believe it is essential to improve the Executive Office of the President’s ability to unify the disparate elements of national energy policy, author the national strategy, and coordinate the implementation of that strategy. In the areas where direct presidential participation may be warranted, such as international negotiations, the office should also have a lead role in supporting the president. We judge that in order to establish authority over and effectively collaborate with a vast and fractious government infrastructure, this new or reinvigorated office will need three key elements:

• A compelling and persuasive vision articulated and kept current by the President, combined with a sense of urgency;
• A national budget that aligns actions and resources with vision and new priorities;
• Participation in the development of strategy by those who need to change their efforts and behavior – agencies are much more likely to implement the strategy if they were at the table when it was drafted. Moreover, they have the resources and capacity to support a transformative vision and the connections to all the vast networks of constituencies that also need to change their efforts and behavior in order for a new strategy to succeed.

An existing EOP office effectively can be empowered to carry out the job of constructing and then coordinating and carrying out the implementation of a national energy security strategy. A Deputy National Security Advisor for Energy Security may be the best fit, although that would require bringing domestic policy issues into the NSC, where they have not traditionally resided. Overlapping authorities with the Council on Environmental Quality, the Office of Science and Technology Policy, and the National Economic Council’s Deputy for Energy would have to be worked out. We recommend that the other offices play an advisory role on energy and climate issues, working from their particular perspectives and with their constituencies, with the DNSA clearly in the lead.

Although existing structures would certainly work, we believe a National Energy Security Council has advantages. Creating a new White House office sometimes offers more symbolism than substance, and there are often better ways to elevate the importance of any given issue. In this case, however, the issue is unusually multidimensional -- energy is an economic, environmental, and security challenge that brings together domestic and international interests across all sectors of the economy. There are strong short-term risks and the potential for dramatic long-term dangers to the very way of American life. Moreover, market realities, such as today’s sharply falling oil prices, present stark public policy challenges for setting the nation on the right course. Truly, only strong presidential leadership can set the nation on the course to a long-term solution.

There are precedents for a distinct office within the White House to coordinate energy policy. Unfortunately, the precedents are not encouraging – but they are instructive. President Nixon hastily created an energy office in the White House in reaction to the 1973 oil embargo, but it clearly lacked resources and goals and was disbanded in about six months. A new Federal Energy Office (later changed to Administration) followed – this time led by a close Nixon advisor, William Simon, whose position was elevated to counselor to the President – and two-year statutory authority as an independent agency. By the end of 1974, Simon had been promoted to the Treasury Department, Nixon had resigned, and President Ford had very publicly fired another energy czar over policy disputes. The Federal Energy Administration took the brunt of Congressional, interdepartmental, and public dissatisfaction with federal energy policy, and was consistently criticized until President Carter and Congress rolled it into the newly-established Department of Energy in 1977. The offices fell victim to personality conflicts, controversies over policy decisions, poorly defined structures, roles and missions, and generally had little institutional heft or relationships to back up and execute their recommendations. They were essentially “czars without an empire.”

A better model for the new council is perhaps President Eisenhower’s original design for the National Security Council, with more grounding in the agencies and insulation from the daily grind.

The office was intended to develop national strategy and track the implementation of that strategy, largely by incorporating the relevant government actors in the process. The Special Assistant to the President for National Security (later the National Security Advisor) focused on strategy development while a Staff Secretariat managed day-to-day government operations.

A National Energy Security Council that focuses on capturing the president’s vision in a strategy, leveraging and building on the competencies and relationships already in the federal agencies can play a crucial role in guiding the nation through a difficult and necessary transformation. To appropriately resource this organization, the EOP would likely have to shutter or move some White House offices into the agencies. There are many opportunities to do so without losing effectiveness; Freedom Corps, for example, is highly redundant with the Corporation for National and Community Service and the Office of Faith Based and Community Initiatives and was largely created because of a State of the Union talking point.
We recommend that the Council itself be comprised of the heads of the frontline energy agencies, which would include: the Department of Agriculture, the Department of Commerce, the Department of Defense, the Department of Energy, the Department of the Interior, NASA, the Department of Transportation, and the Department of State. Other departments and offices would be convened along with the Council as needed, including FERC and the Nuclear Regulatory Commission.

At the November 24th CNAS workshop, attendees discussed the strengths and weaknesses of three models for how an NESC might be structured. One model was “solutions-oriented,” or aligned along the policy areas that will need to change in order to transform the American energy posture. This model would include senior directors in charge of: domestic policy; research, development, and deployment of technology; finance; business and public/private partnerships; international climate relations; and Congressional relations; plus a scientist and an economist. For another, “sectoral,” model organized according to federal agencies and the sectors they represent, the senior directors would include: commerce and industry; agriculture; transportation; science and technology; electric power; international relations; and defense. A third, management-oriented model, loosely inspired by the original National Security Council model proposed by President Eisenhower, would have senior directors for: strategy and policy; planning and operations; management and budget; people and culture; and information sharing and partnerships.

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Some workshop attendees thought goal-oriented functions that are inextricably embedded in government operations were the most important focus; others thought the focus on guidance, making sure that resources (personnel and budgets) match the policy proposals, and tracking implementation were very important. Based on this feedback and prior analysis, CNAS proposes that a National Energy Security Council – or, for that matter, any EOP office charged with promoting a transformative energy policy – be built on a model that mixes management competencies with policy areas that require a particularly strong focus or the direct engagement of the president (such as international climate change negotiations). Specifically, the NESC should include a Principal Deputy who can oversee the operations of the Council itself, plus Senior Directors, presiding over small staffs, who would manage the following areas:

• Strategy and Policy: focus on long-range strategy development, including through scenario planning and futures analysis, as well as the near-term “directional” strategy. The office would also identify legislation, Executive Orders, regulations, NSPDs or other directives needed to support and execute the strategy.
• Implementation: coordinate with the agencies and OMB to match resources against the strategy and establish performance measures. Indeed, it is worth formalizing the relationship with OMB by making the program associate director (PAD) double-hatted. Indeed, OMB should also revive its role in providing coordination and oversight of energy programs across agencies. In the past four years, it has not been playing as active a role in coordinating federal energy programs as it has in the past. This office should collaborate closely with OIRA, as well.The Operations office would alsocoordinate with OPM and other offices on personnel policy to ensure that agencieshave the human resources they need to carry out the policy, including incentives rewarding interagency coordination, which is crucial to developing and implementing a successful energy security strategy.
• Partnerships: orchestrate cooperation with Congress, state and local governments, NGOs, and the private sector in developing and implementing the national energy strategy.
• Innovation: develop and implement the elements of the national strategy focused on research, development, commercialization, and technology transfer of energy and related science and technologies. This category is drawn specifically from the President Elect’s November 18, 2008 remarks.
• International Negotiations: work with the State Department to develop and execute international climate negotiations and key energy agreements, including those in which the President will need to engage directly. This element is also drawn specifically from the President Elect’s November 18, 2008 remarks.
• Climate Science and Technology: fold the current structure for the U.S. Climate Change Science and Technology Programs into this council. The current coordination mission across the 13 agencies engaged in R&D on climate change is important, but is hampered by split authorities, inadequate resources, and lack of focused high-level engagement.

Finally, in recognition of the fact that it is the private sector that will actually drive any transformation in the country’s energy economy, the new administration should consider creating an independent, nonpartisan advisory board, modeled on the President’s Intelligence Advisory Board (PIAB, formerly the PFIAB). The President’s Energy Security Advisory and Oversight Board could have 16 members (like the PIAB), though in this case we believe it would be helpful if eight members are appointed by the President, four by the House, and four by the Senate (i.e., a bicameral, bipartisan appointment).