HOUSE REPUBLICANS OFFER PLAN TO DISMANTLE DOE

Republicans in the U.S. House of Representatives have offered a plan to dismember the Department of Energy and phase out all fossil research and development within 3 years. The legislation would downgrade DOE into an Energy Programs Resolution Agency within 6 months, which would end or spin off all DOE programs within 3 years.

June 19, 1995

2 min read

Republicans in the U.S. House of Representatives have offered a plan to dismember the Department of Energy and phase out all fossil research and development within 3 years.

The legislation would downgrade DOE into an Energy Programs Resolution Agency within 6 months, which would end or spin off all DOE programs within 3 years.

Two thirds of DOE's activities, nuclear weapons development and cleanup functions, would be transferred to the Defense Department. The five electric power marketing administrations would be sold, and a commission would examine what to do with the national laboratories.

The Energy Information Administration would be pared 50% and transferred to the Treasury Department. The Federal Energy Regulatory Commission, now quasi-independent, would become fully independent.

The plan calls for transferring the Naval Petroleum Reserves (NPR) and the Strategic Petroleum Reserves (SPR) to the Interior Department. Interior would sell the NPRs and 72 million bbl of oil stored at the Weeks Island SPR, thus closing it. Interior would establish a commission to recommend whether to keep or sell the other SPRs.

DOE plans to close Weeks Island because groundwater is seeping into the underground storage chambers, threatening to float out the oil. It proposes to transfer most of the crude to the Big Hill, Tex., storage site (OGJ, Dec. 26, 1994, p. 99). The Petroleum Industry Research Foundation Inc. recently warned that selling all the Weeks Island crude would depress Gulf Coast crude oil prices.

DOE had requested a $337 million budget increase to $17.8 billion in fiscal 1996 but also proposed a program to cut spending $14.1 billion the next 5 years. That proposal includes selling the NPRs (OGJ, Feb. 13, p. 30).

BILL'S PROSPECTS

A task force of Republican freshmen congressmen drafted the DOE dismemberment plan, which contained only general outlines.

The House plan will meet stiff opposition in the Senate, where key committee members doubt dismembering DOE would save money. However, Senate Majority Leader Robert Dole (R-Kan.) favors killing DOE and said, "There is a lot of interest on the Senate side."

Deputy Energy Sec. Bill White said the House Republicans' proposal contained little in spending cuts beyond what DOE proposed, and selling the SPRs "is simply a dumb idea." He noted the Republican plan did not demonstrate how much money would be saved by eliminating DOE.