DOE overdue for divestiture

There is no more need for a Department of Energy than there is for a Department of Automobiles." That is one conclusion of a thoughtful, well-documented but no-holds-barred report circulated earlier this month by a task force established to help members of Congress examine the case for eliminating DOE.

This task force, chaired bv the Cato Institute, is part of a larger initiative by freshman House Republicans to eliminate four cabinet-level departments: Housing and Urban Development, Education and Commerce -- in addition to the DOE.

By any measure, the DOE is huge. Its budget is $17.5 billion. It employs 20,000 bureaucrats and another 150,000 at national laboratories, cleanup sites and other DOE facilities. The recommendations in the draft report, if enacted, would eliminate the DOE, saving taxpayers at least $9 billion annually.

In addition, the report shows how the U.S. Treasury could garner $5.3 billion by asset sales (e.g., the Strategic Petroleum Reserve, the Naval Petroleum Reserve, oil shale reserves, etc.) and by privatization of such entities as Alaska Power, Bonneville Power Southeastern Power, the Western Area Power Administration, and most federal labs under DOE's control. The Sandia and Los Alamos labs in New Mexico and California's Lawrence-Livermore labs would be saved in a pared-down, reorganized and consolidated weapons program.

As the report points out, DOE is more of a bomb factory than anything else. The numbers tell the story: Some $10.5 billion (58%) of its budget goes for nuclear weapons or nuclear cleanup activities. Only $6.3 billion (less than 35%) is actually related to energy activities such as energy conservation (e.g., home weatherization) and energy supply research and development (e.g., R&D on renewable energy or
clean coal technology). About $1.4 billion (7%) is devoted to general scientific research, which, the report recommends, should be transferred to the National Science Foundation.

The nation's ongoing nuclear weapons programs would be supervised by a new sub-cabinet agencv in the Department of Defense. In addition, the report argues persuasively that cleanup programs should be renegotiated to give a higher priority to containment and neutralization of risk rather than removal and return of each and every site to pristine conditions.

The onlv perplexing part of the draft report is the recommendation to eliminate DOE's energy information activities. Markets work best when there is what economists call "perfect and complete" information. Using public authority (and about $84 million) to collect information about commerce in oil, gas, coal and other energy fuels is a proper function of government -- even by libertarian standards -- though clearly the processing and retailing of "government" information could be (and probably should be) privatized.

These recommendations should be implemented, though they are sure to spark heated opposition, especially by some energy companies that are hooked on corporate welfare distributed by DOE. The elimination of DOE is good public management because it gets government out of things it should not be doing -- and it's good politics because it shows freshman Republicans in Congress eliminating subsidies even from those who are their natural constituents.