DOE

Perry's legacy? Expansion of agency he'd vowed to kill

If Energy Secretary Rick Perry leaves the Trump administration by year's end, as media reports say, he'll leave a Department of Energy that's far larger than when he arrived.

DOE's annual budget for fiscal 2020 could approach $40 billion — a nearly 25% increase from when Perry took the helm in fiscal 2017. That's an astonishing expansion of spending for a department that Republican presidential hopeful Perry had targeted for elimination before he comically forget its name in a 2012 candidates' debate.

While Perry has Congress to thank for DOE's budget increases, the secretary did spend much of his time on Capitol Hill over the past 2 ½ years assuring lawmakers that he would spend whatever cash they sent his way despite the dramatic cuts proposed annually by the White House to rein in energy and research spending.

The former Texas governor's deference earned him many fans in Congress, with even Democrats avoiding the political brinkmanship and hostility shown to other members of President Trump's Cabinet.

"Rick is open, he's pragmatic," Senate Energy and Natural Resources Committee ranking member Joe Manchin (D-W.Va.), another former governor, said earlier this year (E&E Daily, April 2).

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"Every governor has to be pragmatic," Manchin said. "It's not as political, because as governors, we don't look at things as a Democrat or a Republican idea and can you help or hurt this person. How do you fix the problem you've got? So Rick still has that mindset."

Multiple media outlets, led by Politico and The Washington Post, reported late yesterday that Perry plans to leave DOE this year, ending nearly three years of overseeing federal energy research and nuclear programs. DOE spokeswoman Shaylyn Hynes pushed back on the reports, issuing a statement that didn't outright deny that Perry is planning to exit.

"While the beltway media has breathlessly reported on rumors of Secretary Perry's departure for months, he is still the Secretary of Energy and a proud member of President Trump's Cabinet," she said. "One day the media will be right. Today is not that day."

While Congress has helped DOE's budget, Perry has done his share to refocus the department's policy efforts, notably through the creation of the Office of Cybersecurity, Energy Security and Emergency Response. Those responsibilities had previously been housed in the same office as electricity delivery.

But to highlight the growing importance of cybersecurity threats facing the electric sector, Perry split off those areas into their own program with their own newly created assistant secretary, Karen Evans.

In recent months, Perry has taken to expanding the department's role in artificial intelligence as well. Those efforts have included the launch of a DOE Artificial Intelligence and Technology Office to serve as the lead coordinating entity over the national laboratory complex initiatives into AI.

Some thought of Perry's AI effort as his pet project, and it led people familiar with the matter to think he was building his legacy.

Sanjiv Malhotra, who served as DOE's first director of the Energy Investor Center under both Obama DOE Secretary Ernest Moniz and Perry, stressed Perry's collaboration with the private sector.

In a phone interview this morning, Malhotra said he recently saw Perry in Chicago for the XLab Summit, where he said rumors swirled of a Perry exit from DOE. Malhotra was impressed at the more than 300 private-sector professionals participating in the artificial intelligence event.

"It's Perry's team that has done it," he said, adding, "I would say that is definitely something that will be given as a credit to him and his team that they worked to get science into the marketplace, which is very essential as we look at being a country facing competition from other countries."

Perry has also proposed a similar cross-cutting program to help coordinate DOE's development priorities for energy and battery storage — long hailed by the DOE chief as the "holy grail" for the energy sector.

"That's kind of a hallmark of this secretary and this administration, wanting to make sure that we aren't just continuing to fund legacy programs for the sake of funding legacy programs," said Rich Powell, executive director of ClearPath. "That we are doing things that make sense, that isn't duplicative and that stuff is well coordinated and that the dollars are being spent well, which is obviously a very healthy push in a time of a lot of budgetary concerns."

Powell noted his group has not heard anything definitive on Perry's departure, and he added he has been supportive of Perry's time atop the department and "hopes it continues."

Promoting 'freedom gas'

In the wake of the U.S. boom in hydraulic fracturing-spurred natural gas production, Perry emerged as an unabashed promoter of American liquefied natural gas. He regularly traveled the world championing LNG exports. DOE even issued a press release touting "freedom gas."

One of those international trips ensnared Perry in House Democrats' impeachment inquiry of Trump. Democratic investigators allege Trump pressured Ukraine in exchange for aid — an accusation the president has denied.

Perry traveled to Ukraine on May 20 for Ukrainian President Volodymyr Zelenskiy's inauguration, and Democrats have subpoenaed records related to that trip. Perry has said he would cooperate with Congress, but he scoffed at the idea there was anything nefarious about the trip.

Fred Hutchison, president of the nonprofit LNG Allies, which is working to expand U.S. exports, couldn't independently confirm Perry's exit rumors, and he dismissed the notion that there was any connection between the timing of the impeachment inquiry and the departure news.

Hutchison said he will see Perry this weekend at LNG conferences in Latvia and Lithuania. He noted that Perry has traveled to nearly every country that has the capacity to import LNG to explain the advantages of U.S. gas.

"He really has been the glue that held the LNG part together for the government, but there is a large working group of staff," Hutchison said. "So the band is still together even though the guy with the baton might be going."

Tom Pyle, the head of American Energy Alliance and the leader of Trump's DOE transition team, also noted Perry's LNG push but offered tempered praise for his performance as DOE chief.

"He kept his head down and was a fierce advocate for LNG exports around the globe, but he failed to restart the nuclear waste program or initiate the much needed reforms at the agency, which are major disappointments," he said via text.

Pyle noted that Perry failed to reorganize DOE to reflect the Trump budget and failed to "get out of the deployment business," referring to the funding opportunities the agency oversees.

Failed bid to boost coal, nuclear

Other critics have said the department's renewable energy office paled in comparison with the nuclear office, which was known to be a major priority at the White House.

Senate appropriators recently scolded DOE's Office of Energy Efficiency & Renewable Energy for a high number of staff vacancies. Perry dismissed those concerns, saying, "We move money around all of the time at this agency" (Energywire, Sept. 13).

Energy efficiency has also come under fire on Perry's watch. The office has missed more than a dozen deadlines for efficiency standards on a variety of household items. The agency recently finalized a rule rescinding Obama-era regulations for lightbulbs, a move Perry defended (Energywire, Sept. 16).

"There's no dancing around it. Rick Perry tried to prop up the most polluting energy sources and stall important efficiency standards and clean-energy research," said John Bowman, managing director for government relations at the Natural Resources Defense Council.

"Thankfully, most of his worst proposals flopped," he said.

Increased DOE visibility wasn't always welcomed by some in the energy sphere, especially as it related to Perry's early priority to help struggling coal and nuclear facilities better compete with natural gas and renewables under the umbrella of grid resilience.

The proposal would have introduced a heavy federal hand into electricity markets.

Those actions included an eventual failed notice of proposed rulemaking to the Federal Energy Regulatory Commission that would have given a market tariff to reward power production that could guarantee on-site fuel supplies.

It also involved the potential use of emergency powers to direct the continued operations of some coal and nuclear plants to ensure national security. That proposal eventually hit a snag at the White House.

When pressed about its cost to ratepayers at a House Energy and Commerce Committee hearing, Perry defended his strategy by asking about "the price of freedom."

Combined with his vast outreach to Europe to promote domestic natural gas exports, for some in the environmental community, Perry's exit has been long awaited.

"Rick Perry just joined the undistinguished list of Trump cabinet members to resign after wasting the American people's tax dollars trying to help fossil fuel billionaires, proving that while he eventually remembered the name of the Department he was tasked with running, he never understood its mission," Sierra Club Executive Director Michael Brune said in a statement.

"Further efforts by this Administration to illegally bail out the coal industry will face the same fate as Perry's tenure," Brune said.

'He knows ... how to keep out of trouble'

Perry's tenure is, in some ways, marked by what didn't happen more than what did.

Amid great Cabinet turmoil, Perry largely avoided the scandals and clashes with Trump that doomed many of his colleagues, like EPA Administrator Scott Pruitt, Interior Secretary Ryan Zinke and Health and Human Services Secretary Tom Price.

Perry's allies attribute that to a few qualities of the former Texas governor, like his political experience and how he chose top-ranking officials at the department.

"He had decades of experience as the chief executive of Texas," Dave Carney, a Republican consultant who used to work for Perry, told E&E News. "He knows, just by experience, how to keep out of trouble. It's just second nature to him to not cut corners to the extent that it becomes front-page news."

Perry also seemed to honestly love the job and rarely stepped on Trump's toes, Carney said.

Joe McMonigle, a consultant and lobbyist who was chief of staff under Energy Secretary Spencer Abraham during the George W. Bush administration, said that given the size of and potential for internal strife at DOE, Perry seems to have avoided problems by picking the right people to serve under him.

"What we haven't heard is as much an accomplishment as the fact that he's leaving scandal-free. I'm sure that there are issues they've had to manage," he said.

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