A free-market energy blog
Random header image... Refresh for more!

A Case for Moniz (some intellectual diversity for DOE in the Obama era)

Like many Americans, I shake my head at the Obama Administration’s energy decisions. I am firmly convinced that the United States economy has been jeopardized by their actions, both made and not made. But hope springs eternal, and it is that time of year.

To many of you, I have a well-deserved reputation as a committed advocate for free energy markets. So it might seem incongruous to some that I would support a cabinet nomination by a progressive president.

Yet, here I am. President Obama has nominated Dr. Ernest Moniz to be the next Secretary Of Energy. I support that decision, and I believe all conservatives/market fans should do so also.

When I was CEO of the Center for the Advancement of Energy Markets (CAEM), the Board of Directors voted to issue an invitation to Dr. Moniz to join our Board. CAEM was a strong advocate for competition and reliance on market forces in energy markets and weighed in accordingly on a broad spectrum of issues relating to energy market policy.

At the time (shortly after the Enron and California debacles), CAEM was heavily involved in the debate over retail electricity competition. Still, Ernie accepted our invitation and served for several years on the Board.

He was always a thoughtful, knowledgeable, and collegial colleague. He had served as Undersecretary of Energy in the Clinton Administration and brought to the goals of CAEM the same rational analysis he brought to Clinton’s energy policy.

Moniz genuinely understood the benefits that could be achieved by well-functioning markets and was very helpful in developing strategy to further CAEM’s interest in promoting greater reliance on market forces, while acknowledging the need for attention to significant market and intervention failures.

Three Reasons

I support the Moniz nomination for these reasons.

First, his qualifications are as strong as any Secretary of Energy that has previously served since I first entered federal government during the Reagan Administration. I am especially convinced that though they are both renowned academics in physics, the everyman style of Dr. Moniz will be far more effective in building a rational consensus on energy policy than the effete style of Dr. Chu, notwithstanding his tremendous scientific credibility.

Not only does Ernie have unparalleled academic credentials in the field of energy but he has also walked the walk in serving effectively in the Clinton Administration and a variety of high-level positions.

Second, Ernie has a deep sense of integrity that causes me to believe that he will be willing to speak truth to power in regards to the precariousness of our current energy situation. The fact that he has engendered opposition from some environmentalists gives me hope that he is willing to take a realists view of the role of energy and environment.

Dr. Moniz will serve the Nation well if he can help inform Democratic leadership on the:

· Sound scientific basis for fracking,

· the need for a sound scientific and economic basis for any proposed action on climate change,

· The limitations of renewable energy to have the impact that Dr. Chu seemed to believe,

· The need for a rational policy on coal and nuclear generation,

· A deep concern for reform of the transmission grid, and

· Most of all an appreciation for how much heavy lifting markets can achieve.

Thirdly, as a lawyer, I believe in the principle that the president should have the right to choose his cabinet and that the advice and consent of Senate should be limited to qualifications and integrity and not to ideology.

Conclusion

I have no doubts that Ernie may make decisions with which I will disagree. I have no doubts that were I Secretary of Energy that Ernie would disagree with many of my decisions.

But guess what? We lost the election and that has consequences. One of the consequences is that the President gets to appoint his cabinet. That being said I have no doubts that Ernie will distinguish himself as one of the best Secretaries of Energy, though the standard for that honor is pitifully low.

I would like to close with an homage to Ernie as a person. In the time that he served on my Board of Directors, I could not have asked for a more congenial and helpful colleague. In fact, it mystified me as to why a person with his credentials should be willing to take the time to attend boring board meetings of a fledgling organization about the future of competition in the electric industry.

I appreciated and benefited greatly from his participation. I believe it is that attitude of service that will stand him in good stead in his new position.

I await your excoriation in the comment section for my blasphemy.

—————

Ken Malloy founded and runs CRISIS & energy markets!, a think tank that promotes greater reliance on market forces for energy markets. He is developing an analytical tool, the Responsible Ecoviergy Policy Index, that will facilitate a better understanding of how different policy proposals will affect energy markets. His preliminary efforts can be found at www.caem.org. He also administers a program at Randolph-Macon College under a grant from the BB&T Foundation to help students better understand the moral foundations of capitalism.

10 comments

1 Mark { 03.26.13 at 3:01 pm }

As long as he understands that energy isn’t created inside of utility meters it would be an improvement.

2 Mark { 03.26.13 at 3:12 pm }

PS: See page 15 titled “Gas Substitution for Electricity in the Buildings Sector”
http://www.energy.senate.gov/public/index.cfm/files/serve?File_id=42c2523f-b096-189b-6a12-925e1f9d1481

Testimony of Ernest J. Moniz
Before the United States Senate Committee on Energy and Natural Resources
July 19, 2011
MIT Study on the Future of Natural Gas

Gas Substitution for Electricity in the Buildings Sector

3 Ed Reid { 03.26.13 at 3:27 pm }

Ken,
While I expect, as you do, that Dr. Moniz will attempt to enlighten the Administration on a range of important issues, I doubt he will be successful in moving the Administration away from ideologically attractive positions toward technically and economically rational positions. I hope I am wrong.

4 rbradley { 03.26.13 at 5:13 pm }

Off to a bad start on pricing carbon–all pain and no gain.

5 Mark { 03.27.13 at 8:35 am }

“A deep concern for reform of the transmission grid”
In other words, continued subsidies for the “smart grid”

6 Ed Reid { 03.27.13 at 4:47 pm }

rbradley@4
I thought Moniz was nominated to be Secretary of Energy, not Secretary of the Treasury. I would call his position on pricing carbon “horrendous”.

7 Bob in Amarillo { 03.30.13 at 8:40 pm }

Moniz is just another political academician. We need a real-world business oriented leader for DOE. Somebody proven in the realities of energy supply who can stop the continuation of more-and-more-and-more ‘research’ into already proven and commercially deployable technologies. Who? Just about any energy utility CEO or manufacturer of stable base load generating equipment.

8 Ken Malloy { 04.01.13 at 9:02 am }

Comments from Author
Mark: I am not sure I understand your comment. Are you being critical of smart metering? Or is your second comment the relevant comment, i.e., site vs source efficiencies? If so, I am not sure I see anything objectionable in the comments on page 15. Do you?

Ed Reid
While I cannot be sure you are wrong, I have more hope that he will have both the personality, experience, and influence to do a better job than Dr. Chu.

Rob
I agree that he seems to have drunk the global warming Kool-Aid but it is the Obama Administration after all. My comments go to whether he is an improvement on what we might have expected from the Obama Administration and I believe he is.

Mark
You misunderstood my comment about “A deep concern for reform of the transmission grid.” This is NOT code for “subsidies for the smart grid.” As I have indicated in some of my previous posts, I believe the federal government needs to do largely what they did in all other network industries: preempt state regulation of transmission and develop coherent ownership, open access policies, and greater reliance on market forces.

Ed Reid
I would call Dr. Moniz’ policies on carbon pricing premature and potentially misguided but not “horrendous.” I generally support geoengineering if it turns out by 2050 that global warming is real.

Bob in Amarillo
In my experience, energy policy is best done by academicians or at least someone with a strong understanding of market processes. Business persons in my experience focus on what they know and tend to support distortive policies. I am not saying that we could not find a business person with both policy smarts and business experience but it is rare. John Allison yes, T. Boone Pickens no. What has been far worse is former politicians.

9 rbradley { 04.09.13 at 5:40 pm }
10 Shawn { 07.31.14 at 10:43 am }

Maybe Moniz’s level of understanding cannot be properly characterized by a single article or sound bite, maybe he was misquoted, or maybe he was being sarcastic when he said “it will never be cheaper to capture and store carbon dioxide emissions — a greenhouse gas linked to global warming — than it is to simply release it into the atmosphere”, and then contradicts himself when he proposes a tax on carbon that “could be used to make emitting CO2 costlier than storing it”. But he just said… Umm, OK.

How far must the reach of influence extend, to make things be what they are not? Can one man create a tax so big that even he cannot afford to pay it?

So there should be a tax on carbon, to make fossil fuels more expensive, because that “brings along with it a push toward efficiency; it brings along with it a push towards security”, which is needed because fossil fuels could become more expensive someday. Umm, OK.

It would be nice to finally see a coherent chain of logic applied to energy, something along the lines of “we’re going to do A because of B” that doesn’t involve contradictions or circular reasoning. I’m not aware that this has ever been done.

http://dailycaller.com/2013/03/26/obama-energy-nominee-triple-price-of-carbon-to-push-clean-energy/?fb_action_ids=10151505574707486&fb_action_types=og.recommends&fb_source=aggregation&fb_aggregation_id=246965925417366

Leave a Comment