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15,000 + 100,000 = U.S. Department of Energy (DoE)

February 7, 2011

This discussion is critical, in fact highly critical. Being critical is one thing, but providing solutions are another thing. Though improbable in terms of ever happing, this paper provides a solution. Unless we find a bold leader in executive and legislative branches of our government, this proposition will not happening because it requires a new way of thinking and major structural changes in the DoE and possibly other federal departments. Interestingly enough the answer is not foreign to our government, the military is a good example of being accountable.

The Problem: Apparent Waste and Lack of Performance
The Solution: Accountability

In an attempt to talk fact-based, the DoE will be evaluated from the standpoint on “What are They,” “How Large are They,” and of utmost importance “Their Impact on the U.S. Economy.” The latter can arguably be not the right parameter, but as in any business success is measured in terms of “Rate of Return.” If what the DoE does not bring bottom line economic results, it’s questionable if they should be allowed to continue on as business as usual.

The DoE
From energy.gov, “the DoE’s overarching mission is to advance the national, economic, and energy security of the United States; to promote scientific and technological innovation in support of that mission; and to ensure the environmental cleanup of the national nuclear weapons complex. The Department’s strategic goals to achieve the mission are designed to deliver results along five strategic themes:
 Energy Security:  Promoting America’s energy security through reliable, clean, and affordable energy.
• Nuclear Security:  Ensuring America’s nuclear security.
• Scientific Discovery and Innovation:  Strengthening U.S. scientific discovery, economic competitiveness, and improving quality of life through innovations in science and technology.
• Environmental Responsibility:  Protecting the environment by providing a responsible resolution to the environmental legacy of nuclear weapons production.
• Management Excellence:  Enabling the mission through sound management.

President Obama expressed clearly what is at stake with energy policy in the years and decades ahead when he said in October 2009 that “nations everywhere are racing to develop new ways to produce and use energy, and the nation that wins this competition will be the nation that leads the global economy.” The DoE will continue to be at the forefront of this effort to ensure the United States is the global leader. To succeed, the Department will pursue game-changing breakthroughs, invest in innovative technologies, and deploy commercially viable solutions.

According to the DoE, “The Department’s Fiscal Year (FY) 2011 budget request of $28.4 billion, a 6.8 percent or $1.8 billion increase from FY 2010, supports the President’s commitment to respond in a considered, yet expeditious manner to the challenges of rebuilding the economy, maintaining nuclear deterrence, securing nuclear materials, improving energy efficiency, incentivizing production of renewable energy, and curbing greenhouse gas emissions that contribute to climate change. Together with the American Recovery and Reinvestment Act of 2009 (Recovery Act) and FY 2010 budget, the FY 2011 budget request supports investment for a multi-year effort to address these interconnected challenges.

To achieve these noble goals of “LEADING THROUGH INNOVATION, ENERGY, and SECURITY,” the DoE has established a detailed list of appropriations that are summary in the DoE’s FY 2011 budget request as follows:

It is not the purpose of this discussion to judge the appropriateness of any of these programs. However, what would be of utmost interest is the superimposition of these appropriations over the last 10 years in order to determine their impact on: Energy Security; Nuclear Security; Scientific Discovery and Innovation; Environmental Responsibility; and Management Excellence. We will touch upon that in the last section of this report. But with much more sophistication and detailed analysis, I trust the results of this hypothetical study exist in some oversight committee. Would be nice to see that report!

Workforce
DoE Work Force Statistics shows:
• Total number of Direct Employees (as of September 30, 2010): 14,945
• Total number of Contract Employees (2008): 93,094
• Total Direct and Contract Employees: 108,048
(Source: U.S. DoE Website)

Using 2004 U.S. Census data, to put DoE’s total workforce of 108,048 into perspective, there was 890 Employer Firms in the U.S. with more than 10,000 employees. Considering at this time there was about a total of 5,900,000 Employer Firms in the U.S., the DoE is in a very elite group, representing only 0.02% of all Employer Firms in the U.S.  (Source: U.S. Census Bureau, 2004 Statistics about Business Size including Small Business, http://www.census.gov/epcd/www/smallbus.html). Note, knowing 2004 data is obsolete; these statistics from the U.S. Census Bureau were considered the most reputable of all other current sources of business statistics.

Taken alone, these statistics are somewhat meaningless until you compare what these firms contributed to the gross domestic product. The U.S. Census Bureau reports these Firms brought in slightly over $8 trillion in receipts or about $9 billion per company.  It is well known that the DoE is not a for-profit organization, and therefore this comparison may seem somewhat unfair.  Maybe yes, maybe no in context that their funds should at some time in the future boost the economy rather than go uselessly down the tube.

Unless you are from another planet, it is well known that the economy has been in a state of retraction or possibly in a slight upturn, depending on whose figures you use. Of extreme importance, it is almost impossible to determine the effect that the DoE had on the economy, whether plus or minus.  This in itself might be the problem; the difficulty to measure in dollars the performance of their programs.

Accountability
Without exception, the DoE has spawned several new industries and technologies. Now we need to ask: What have these appropriations achieved over the last 33 years? What can we show for them? Where is America in the world’s eye on renewable and sustainable energy? Have we really set the stage for a viable energy future? Or putting it in Shakespeare’s own words is it something “That struts and frets his hour upon the stage, And then is heard no more: it is a tale Told by an idiot, full of sound and fury,
Signifying nothing.” Extremes never work so one would take an educated guess and conclude that America is somewhere in between – done some good, but came up short.

Now for pièce de résistance! Pragmatically speaking, the only possible way a layman, lacking a compilation of fact, figures and data or every sort and a super-computer, would be foolish enough to even attempt this task would be to look at, as we said above, DoE’s five strategic themes. At best this is some poor man’s report card on the DoE. Then why not, I’m writing this piece and allowed to take some poetic license.  Sure enough, if wrong or miraculously even close to being right, I would suffer the consequence of such shoddy and unscientific work. Whatever wrath I bring on to myself, it is me who does so.  Yes, I am ultimately accountable for my actions and fewer and fewer will be reading my rubbish in the future.  So here goes:

Energy Security: 
 Thanks to the extension of the grant program as well as the existence of the ITC, PTC and other incentives there should be a renewed interest in developing renewable energy assets. AH, but there is one Catch 22, the cost of fossil fuels the golden yardstick to measure all that is renewable and efficient.

For now, as I have been doing over the last 14 years in the industry and in the hopes that something is finally brewing in this country, I will defer any criticism and take a wait and see attitude. However, in the past there have been reversals to terminate and restate programs, as oil friendly administrations took helm or the price of crude fluxuated to one extreme or another only to make commercialization of DoE’s inventions confusing and financially unattractive.

Due to the fact that the DoE was formed on August 4, 1977, some 33 years ago, the DoE receives a C- .

Nuclear Security: 
Well as not to go into another poor thesis, its far to say the fear of a Nuclear Holocaust with Russia is gone. Nuclear arms reduction appears to be the name of the game. This is a direct outcome of Reaganomics than to the best of my knowledge any dedicated DoE program. Other than the Cuban Missile Crisis and a few other events during the Cold War era, I truly feel less secure today in terms of Nuclear Security due to rogue regimes and countries such as Korea and Iran. Wonder if China is sitting idle on this one.  What about all this talk of dirty bombs and suitcase size nuclear devices?

DoE’s role is actually not the above, but should spark a viable nuclear industry, much like we see in Europe and other parts of the world. Forgive me if I missed the point with this strategy.

Only for apparent effort and the lack of any reported know events the DoE earns a D- .

Scientific Discovery and Innovation: 
Here things look good. Lots of money going out for quality research! That’s what we need. Keep going DoE. There is one caveat, “where are” the domestic industries these technologies spawned. Simple question deserves a simple answer – “off-shore” my dear Watson. Sure we start and start fast, but what really counts is who makes it to the finish line.  The checkered flag has been few and far in between. Our trophies sitting in the cabinet are getting tarnished and dusty.
 
For substantive patents and papers, the DoE receives a B.

Environmental Responsibility:
This theme sound a lot like clean up. I have no idea where we are with this. Nevertheless, I will use Hollywood as a barometer. Since there has not been movies in over 10-years like “Erin Brockovich,” “The China Syndrome,” and my personal favorite “The Toxic Avenger,” the DoE must be doing something right here.

Thanks to Hollywood the DoE receives a B+ .

Management Excellence: 
Using DoE’s strategic theme for this one – Enabling the mission through sound management – I went to USLEGAL.COM to find out what “sound management” meant. Surprisingly they had a definition for this one, which was right on. Their definition was “In the context of environmental law, sound management means to take all practicable steps to ensure that the overall management takes place in such a manner that protects human health and the environment against the adverse effects of activities, processes, products or substances.”

I will not challenge this definition other than to say if correct is it not also included the FDA and other regulatory agencies such as but not limited to “The Consumer Protection Agency” and “Consumer Product Safety Commission.” The scope and lines of responsibly are not entirely clear making it rather difficult to determine DoE’s effectiveness towards this theme.
 
Fundamental question is whether the DoE has any idea on constitutes “Management Excellence.” In today’s world, Management Excellence is focused on building better leaders and creating high performance organizations (HPO). Taking this one step further, a HPO is an organization that concentrates on bringing out the best in people. An organization that positions itself to emerge as an HPO designs itself to produce sustainable results. The organization should meet specific qualities typically attributed to being high performing in order to fit this model. Bottom line a HPO is:
• An organization that works better and spends less;
• One that can achieve significant results for the money spent;
• A business that provides value to the customers and stakeholders;
• An organization that delivers products and services on time, and
• One that achieves recognition for the services it provides.

The one unifying aspect of these five characteristic is bound by the terms – better, achieve, results, provides, and delivers; in other words, “ACCOUNTABILITY.” Accountability not in terms of:  I cut 10% off my budget, I ensured all the forms were provided for the grant application, I processed 10 applications today, and I attend three high-level meetings today; but accountability in terms of wanting to exceed goals, outperform competitors, and realize bottom-line results.

Due to the notion that the DoE rarely discusses the need to be accountable for what they do or do not bring to the table, I will give them a solid D.

In summary, the DoE’s report card is:
• Energy Security: C-
• Nuclear Security:  D-
• Scientific Discovery and Innovation:  B
• Environmental Responsibility: B+
• Management Excellence:  D

Overall, given an equal waiting for each strategy, the DoE earned a C .

I must be generous, thought they score less. But a C is nothing to run home to Mom and Dad, unless you’re constantly getting an F.  It’s hard to put the world of 1977 in perspective of today’s global economy, but I am willing to take a bet that we as American’s felt much better about ourselves than we do today. For DoE’s 2011 request of $28 billion, they have little to be happy about too.

In closing, a 1995 report by the Heritage Foundation, “How to Close Down the Department of Energy,” should be required reading,   http://www.heritage.org/Research/Reports/1995/11/BG1061nbsp-How-to-Close-Down-the-Department,   http://thf_media.s3.amazonaws.com/1995/pdf/bg1061.pdf

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4 Comments leave one →
  1. February 8, 2011 1:06 PM

    Closing the DOE would be great step in the right direction. And to add to that dream about 3/4 of the federal government should be shut down along with this boondoggle called the DOE.
    Of course it is a dream. The only way any of these agencies will be closed is when the real world wide bankruptcy of the US hits and there is no money for anything.
    Coming faster than you think.
    Terry

  2. February 17, 2011 7:57 AM

    i love it

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