The conservatives in Congress would make the case that the Department of Energy (DoE) has failed

in its mission of helping the United States become less dependent on foreign petroleum. Would you com-ment on the role the DoE plays today?

Alan Hegburg: This issue has been around for some time. I don’t know precisely what the numbers are right now, but about 80 percent or probably more of the DoE is dedicated to nuclear weapons, clean up, all those kinds of issues. When the DoE was estab-lished, it was a combination of the Energy Research and Development Administration and the Federal En-ergy Office. But the largest—by far the largest chunk of work and budget and everything else—is done on the nuclear weapons side. It was a military decision. It goes back to the post-war legislation on nuclear weap-ons in which the military did not have control over certain aspects of the fuel cycle, for whatever reason.

There were a lot of military people in the DoE, and there are DoE people that go out to deal with the mili-tary.

A lot of the lab system, which is an integral part of the DoE, deals with weapons. The labs tend to be out West where there’s lots of room. Those of you who have ever dealt with DoE labs will know that they have diverse interests. There’s a very large coal lab in Pennsylvania. There are people who do solar, there

are people who do nuclear, there are people who do earthquakes. These are all DoE lab-related activities.

When it comes down to understanding the non-nuclear parts, it is best to go through the assistant sec-retaries of the various departments and look at their portfolios. There is an international group, which I came out of. We dealt almost exclusively with oil and gas market issues and renewables. It’s a small group.

Most agencies talk in terms of 500 to 1,000 people. We were less than 100.

There is also a fossil energy group that manages the fossil energy programs. Congress appropriates a fair amount of money to support programs on fossil fuels, renewables, and energy conservation. These are among the non-nuclear programs in the DoE. They’re fairly substantial. They have very good staff. The labs report to the assistant secretaries and the under sec-retary for science who actually does basic science re-search.Thus if you do get rid of the DoE, that work will have to be done somewhere else.

On the international side, DoE is very active. Let me just give you a couple of examples. There is a series of what are called one-two-three agreements. These are bilateral agreements that the United States requires of any country with which it’s going to share nuclear technology. About 19 or 20 countries have these agree-ments and commit to certain things—probably provi-sion of information—not anything secret but related to proliferation concerns. There are at least four coun-tries in the Arabian Gulf that are interested in nuclear technology: the United Arab Emirates (UAE), Qatar, Saudi Arabia, and Kuwait. There is already a one-two-three agreement with the UAE. I think one is being negotiated with Qatar, but I’m not sure the Quatari are ready to sign off on it. It may seem odd that the

Saudis want to pursue nuclear power, given the extent of their oil and gas reserves. I suspect they are trying to reduce their domestic oil activities because they’re extremely inefficient and absorb a lot of capacity that could otherwise sell in the international marketplace.

Moreover, their oil is nonrenewable.

The Saudi government has set up a series of labs based on, essentially, the DoE lab system. These labs do different things. CSIS has an agreement with one of the labs. They want to look at what we have, and they want to talk with us. They hold public meetings to discuss a variety of different topics—energy effi-ciency, renewables, carbon capture and sequestration, obviously, given the size of their oil and gas reserves.

The bilateral relationships between the United States and the Saudis and other Gulf states are really quite extensive.

One example of the kind of negotiations that take place is that the Kuwaitis continue to build electric power facilities in Kuwait because electricity is free to its people. When you leave Kuwait for the summer, you leave the air conditioning on and close the door.

It’s a huge waste. There is actually no price or conser-vation sensitivity in that marketplace. We’ve had con-versations with the Kuwaitis about that, but of course this is a decision made at the top levels of the govern-ment, and so it can’t get undone. But the Kuwaitis are coming up against a problem, which is that they only have one site left on the Gulf that can give them water.

The question becomes, do they put a power station there, do they put a refinery there, or do they decide to take steps to make their domestic energy economy more efficient? We’ve had bilateral conversations with the people that run the system, and they would like very much to find the best answer. We also suggested

that they think about power-sharing or other corpo-rate power arrangements with the other Gulf States.

On the east coast, Qatar, Kuwait, the UAE, and Saudi Arabia all have large populations. Why wouldn’t you collectively build one power station as opposed to four individual power stations? Politics is, of course, a huge impediment, one over which we have little con-trol.

We have greater leverage when it comes to mar-kets. There is, in fact, a whole group of people in those countries who are very interested in changing their domestic energy markets, but again politics in-tervenes. But in the long run, markets will hopefully trump politics.

Q: You stressed earlier how difficult it is for oil to