Joint Statement for the Record of Patricia Godley Assistant Secretary for Fossil Energy and Dan Reicher Assistant Secretary for Energy Efficiency U.S. Department of Energy Before the Subcommittee on Energy and Environment U.S. House of Representatives February 25, 1998 Mr. Chairman and Members of the Committee: The Subcommittee has asked us to comment on H.R. 1806, a bill to provide for the consolidation of the Office of Fossil Energy and the Office of Energy Efficiency and Renewable Energy. The following represents our joint views on this proposal: The legislation properly recognizes that many programs carried out by the Office of Fossil Energy and the Office of Energy Efficiency and Renewable Energy have much in common. Since 85% of the energy we consume in the United States is supplied by fossil fuels, increasing the efficiency of end-use applications is, in reality, largely a fossil fuel effort. Especially over the next few years, efficiency gains in energy consuming sectors will represent one of the most affordable and effective ways to meet environmental goals while retaining the economic benefits of fossil fuels. Similarly, many of the advanced energy systems being developed by our two offices share common market goals, as well as common technological principles. The photovoltaic and wind energy systems being developed in our Renewable Energy program, for example, are being driven to meet the needs of future utility markets, as are the advanced gas turbines and fuel cells of our Fossil Energy program. Advanced drilling technologies can offer equally important benefits for the geothermal industry as for the petroleum industry. Nonetheless, while there is much in common between the two programs, merging the management structure of the two offices may, in fact, slow the progress of these important technologies. In a large, combined operation, the attention of senior managers, including the 2 Program Secretarial Officer, inevitably would be dispersed among a much larger number of complex programs and projects. Together, the two programs manage over 1,000 R&D contracts. It would be difficult for a single senior manager to properly oversee a program of this scope and magnitude. Consolidating the two programs might also lead to a downgrading of the management structure of each program to a level below the current Presidentially-appointed officer. Key external audiences and stakeholders, including the Congress, would likely not have the direct access to the same level of policy setting and management that currently exists. - At the outset of the Department of Energy, one Assistant Secretary was responsible for the majority of energy technologies. Both of the problems described above a complex, unwieldy program structure and the inability to deal well with diverse external constituencies, including the Congress -- led to the current structure. Also, administrative time savings would be relatively small, since the bulk of headquarters personnel in both organizaitons is made up of technical program managers. Both offices also carry out functions that are not related. The Fossil Energy office, for example, oversees the Strategic Petroleum Reserve, while the Office of Energy Efficiency manages a key component of home weatherization. The diverse missions of these programs would make it exceedingly difficult to manage them properly in a single organization. Moreover, combining the two offices is unnecessary, particularly given the significant progress made recently to develop greater collaboration in areas where there is mutual interest. For example: The Advanced Turbine Systems program is jointly planned and managed by the two Advanced Drilling Systems R&D is also jointly funded by the two offices to ensure that research is carried out to benefit both hydrocarbon and geothermal drilling without unnecessary duplication. Alternative Transportation Fuels R&D is another area where the two offices are to meet fuel specification needs developed by the Office of Energy Efficiency and 49-799 98-3 3 Gas-to-Liquids R&D is being jointly funded by the two offices because technological breakthroughs in this area can benefit the future use of remote natural gas supplies as well as provide the feedstock for fuel cells and cleaner transportation fuels. Finally, we already have an effective coordination mechanism. The Department's R&D Council, under the new chairmanship of Under Secretary Ernest Moniz, includes an Energy Resources Working Group which is made up of our two offices, plus R&D components of the Office of Nuclear Energy, Science and Technology and the Office of Energy Research. This Working Group provides the forum for ensuring that our R&D efforts are guided by a common energy strategy and are avoiding wasteful duplication. These actions, coupled with the program-specific planning underway jointly between our two programs, is achieving the same benefits of a merger while continuing to provide proper management attention and responsiveness to stakeholder input. We appreciate the opportunity to provide our views on this subject. Patricia Godley became the U.S. Department of Energy's 7th Assistant Secretary for Fossil Energy on July 25, 1994. The President had announced his intent to nominate her to the position on April 18, 1994, and she was confirmed by the U.S. Senate on July 21, 1994. As Assistant Secretary, Ms. Godley oversees the national program to develop and demonstrate advanced natural gas, petroleum, and coal technologies. She is responsible for the Federal fossil fuel research and development program. She also oversees the Clean Coal Technology Demonstration Program, a multi-billion dollar government-industry partnership that is constructing and testing environmentally superior, first-of-a-kind coal-based energy facilities in the U.S. Similarly, she is responsible for managing the nationwide Reservoir Class Oil Recovery Program, a joint effort with the petroleum industry to demonstrate improved oil recovery technologies. Ms. Godley also has the responsibility for overseeing the Strategic Petroleum Reserve, the nation's emergency crude oil stockpile, and the Naval Petroleum and Oil Shale Reserves. She successfully directed the largest divestiture of federal property in U.S. Government history with the sale of the Elk Hills Naval Petroleum Reserve in California to Occidental Petroleum Corporation for $3.65 billion in February 1998. Ms. Godley joined the Department of Energy in September 1993. Prior to becoming Assistant Ms. Godley practiced energy law for nearly fifteen years in Houston, TX, and Washington, DC. She joined the federal energy regulatory section of the Bracewell & Patterson law firm's Washington office in 1979. She transferred to the firm's Houston office in 1985 to expand her practice to energy transactions and litigation. She became a partner in the firm in 1986 and returned to the firm's Washington office in July 1992. She has represented a wide variety of clients in the oil, gas, and electric utility industries in matters including asset sales and acquisitions, contract drafting and negotiation, business planning, Canadian and Mexican import and export matters and litigation on behalf of state and royalty owners, producers, marketers, pipeline companies, and end-users, as well as cogenerators and electric utility companies. 2 As a consultant for the World Bank, Ms. Godley drafted privatization legislation relating to natural gas transportation and distribution in Bolivia, Argentina, and the Russian Federation. She served as one of two reporters in the transportation group of the University of Houston Russian Petroleum Legislation Project in 1992. In this capacity she participated in the preparation of a draft treaty regulating the transportation of oil, oil products, and natural gas by pipeline among the Soviet republics. Her recent publications include "Natural Gas Gathering Systems," Chapter 84, Energy Law and Transactions (Matthew Bender) and "Russian Energy Legislation: Regulating State Monopolies to Allow the Development of Competitive Markets," 13 Energy Law Journal 1 (1992). Both of these articles were published under her former name, Patricia Fry Eldridge. Ms. Godley received a Bachelor of Arts degree from Trinity University in 1970, a Masters degree from Memphis State University in 1973, and a Juris Doctorate degree from the University of Texas in 1979, where she was managing editor of the Texas Law Review. She is admitted to practice before the United States Court of Appeals for the fifth, Tenth, Eleventh and District of Columbia Circuits and the United States District Courts in the Northern, Eastern, and Southern Districts of Texas. She is a member of the American, District of Columbia, Texas, and Federal Bar Associations. Born in Illinois, Ms. Godley resides in Washington, DC. 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