Odds are that Ernest Moniz will replace Steven Chu to head the U.S. Department of Energy, or DOE. Like Chu, Moniz is an academic with stellar credentials but he has a bit more political savvy than the departing secretary. Moniz showed that when he testified on Tuesday to the full Senate Energy Committee.

While President Obama’s nominee was diplomatic and said that he would pursue the current “all-of-the-above” energy strategy, he did venture into areas that are now politically touchy: climate change and natural gas exports. To that end, he implied a need to dig for more shale gas so that it could feed both our own energy appetite as well as those of our European and Asian partners. But his true feeling is that natural gas is a bridge fuel until other low-carbon sources such as nuclear and renewables hit their stride.

“The need to mitigate climate change risks is emphatically supported by the science and by many military and religious leaders as well as the engaged scientific community,” Moniz testified. “DOE should continue to support a robust research and development portfolio of low-carbon options: efficiency, renewables, nuclear, carbon capture and sequestration, energy storage.”

As for natural gas exports in the form of liquefied natural gas: The U.S. Department of Energy found in December that prices could rise as much as $1.11 over five years. But it still concluded that the overall benefits to the U.S. economy would outweigh that potential price increase. The losers, it adds, would be the chemical makers like Dow while the winners would be the domestic natural gas producers such as Chesapeake Energy and ExxonMobil.

Altogether, 11 LNG receiving facilities exist here and 9 of those are asking U.S. regulators if they can be converted to export terminals. Most of the applications are coming from the Gulf States, which have already been receptive to their LNG import facilities and which would likely support any changes to their operations. In April 2012, federal energy regulators voted to allow Cheniere Energy to retrofit its Sabine Pass, and it should begin shipping operations 2014.

“There are numerous non–free trade agreement nations with which the U.S. trades regularly,” writes the conservative Heritage Foundation’s Nicolas Loris. “Natural gas should be no different and should be treated as any other good traded around the world.” Moniz has publicly supported more natural gas export licenses.

Scholarly Disagreements

But there’s where much of the conservative support for Moniz ends. The nominee has spoken forcefully for the need to curb greenhouse gas emissions. As such, he has said that old, inefficient coal plants must go and that the country ought to tax carbon.

Under that scenario, government would tax utilities according to their carbon footprints that can be readily measured. NextEra Energy says that it is a fairer way to compute results and that it is easier to administer than a cap-and-trade system. The proceeds from the carbon fee would then be targeted directly to an account that would help fund the development of new technologies.

Ultimately, Moniz says that the country must pursue zero-carbon fuel choices but that until such options become plausible, it must rely on natural gas for several decades. Natural gas will be key to reducing heat-trapping emissions, he says, mainly because it will replace the older pulverized coal plants. He does say that coal with carbon capture and storage is viable longer-term technology.

“Dr. Moniz seems to share the failed notion that politicians and bureaucrats can successfully orchestrate the energy economy,” write several Heritage Foundation scholars, in a different blog. 

To be clear, Moniz’s duties are to allocate Energy Department funds and to help build out the nation’s energy portfolio. It is the job of the U.S. Environmental Protection Agency and its would-be administrator Gina McCarthy to oversee the fracking methods that would dig out the shale from beneath the ground.

Environmentalists, conversely, have some concerns. That’s because Moniz’s MIT Energy Initiative got a healthy portion of funds from oil interests. But most such groups are ready to work with him. Moniz testified, for example, that the country needs to invest three times more in research and development than it is now doing.

Michael Shellenberger, president of the Breakthrough Institute, says that the $3 billion or $4 billion that the United States is now investing in innovation ought to be $30 billion. The environmental manager says that the goal is to advance wind, solar and nuclear research to get them to the level that shale gas has reached. “We should have increasingly stringent regulations on coal to help us move away from it.”

Moniz is moving into a hot political environment. It’s the same one that Secretary Chu is leaving, however, the MIT professor is better suited to take the intense heat.


EnergyBiz Insider has been awarded the Gold for Original Web Commentary presented by the American Society of Business Press Editors. The column is also the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has been honored as one of MIN’s Most Intriguing People in Media.

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