Energy Department, change is coming

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NEW YORK (CNNMoney.com) -- President-elect Barack Obama's pick for energy secretary will likely lead the department through a new era with a sharp focus on renewable energy, but who'll lead a revamped agency is far from clear.

Despite what some may think, the current Department of Energy isn't really about wind or solar power. It's not even about coal, oil or gas. Mainly, the agency is about nuclear - nuclear weapons to be exact.

The new agency is likely to focus on a big push into renewable R&D greater conservation efforts and some role in curtailing greenhouse gas emissions.

Currently about $15 billion out of the department's $24 billion dollar budget is spent maintaining the nation's nuclear weapons stockpiles, cleaning up sites used to produce those weapons, or dealing with non-proliferation issues.

Spending on energy programs and research - including nuclear, fossil fuels, renewables, and conservation - totals about $4 billion. Research into renewables alone totals just over $650 million.

"There's a misconception that the prime responsibility of the energy secretary is energy," said Melanie Kenderdine, an associate director at Massachusetts Institute of Technology's Energy Initiative and a former department head at DOE. "It's really nuclear weapons, cleanup, and proliferation."

The agency will likely retain it's nuclear focus, although that branch has been gaining independence from the energy side since the Clinton Administration.

"Under Obama you're likely to see an energy secretary focus more on energy rather than nuclear weapons," said Paul Bledsoe, strategy director for National Commission on Energy Policy, a bipartisan research group.

Who Obama might pick for the post remains a mystery - The Obama team would not comment. But some names discussed include Kansas Gov. Kathleen Sebelius, Michigan Gov. Jennifer Granholm, Sen. John Kerry, D-Mass., former NATO commander Wesley Clark, Google's renewable energy guru Dan Reicher, MIT's Ernest Moniz, even the Republican governor of California Arnold Schwarzenegger.

Bledsoe thinks it's likely to be a governor.

"A well known political figure may make sense," he said. "A lot of transition to a clean energy economy is convincing Americans it's the best thing to do."

Obama has an extensive energy agenda that includes comprehensive urban planning, further raising of fuel efficiency standards, developing clean coal technologies, and requiring utilities to buy a certain percentage of renewable power - to name just a few.

But central to his plan is a proposal to spend $15 billion a year researching and commercializing renewable energy technology. Much of that money would likely be funneled through the DOE, via one of their many national labs that do renewable research.

Money from a massive economic stimulus plan - which many expect will pass shortly after Obama takes office - may flow through DOE as well.

Conservation measures like adding insulation to homes, replacing appliances and light bulbs, and upgrading windows are things that could be done in a hurry and employ lots of laid off construction workers - a key criteria for getting stimulus money. Most of the federal government's conservation programs are currently run out of the energy department.

Another big role the energy secretary may take on is playing a part in any plan to control carbon dioxide emissions.

It's not exactly clear which agencies would have a role in a carbon dioxide law - which hinges on issuing permits to emit greenhouse gasses. It's likely the Environmental Protection Agency would play the part of compliance officer. But it could be EPA or the Departments of Commerce, Treasury or Energy that issue the permits.

"The problem with formulating policy on this is all these issues roll into each other," said one Washington, D.C.-based energy analyst, speaking of energy policy in general.

Gen. James Jones, Obama's pick for national security advisor, has made it clear he wants to deal with energy policy as a national security issue, and some have talked of giving the Pentagon a greater role.

Energy's wide reach is one reason why the Obama team has talked of creating a new office to oversee all the energy and climate change efforts, an energy/climate czar.

Some say an energy secretary won't be picked until the energy/climate czar is announced.

Then there's the hard part - getting all these changes passed even in a Democrat controlled Congress.

'It's going to be more complicated than people think," said the D.C. analyst, noting that a lot of lawmakers are from states reliant on the fossil fuel or automobile industry. "There are a number of Democrats who will vote with their state or region rather than their party."