Remarks by Charles B. Curtis at the Dept. of Energy Schlesinger Medal Ceremony

“Reflections on James Schlesinger -- the Man,

his Times, and the Department of Energy”

Thank you, Mr. Secretary, for those very kind words. I am deeply honored to receive this medal and to have my name formally linked to James Rodney Schlesinger, an extraordinary man and a true patriot who served the political leadership of this country with distinction – as the event program notes – without "fear or favor."

I want in these remarks to share my reflections on the man whose name appears on this prized medal, and the Department he conceived nearly 40 years ago.

I first met Jim Schlesinger in the fall of 1976 in Senator "Scoop" Jackson’s office. Jim was a larger than life presence:  silver-haired former Associate Director of the Bureau of the Budget, past Chairman of the Atomic Energy Commission, former Director of the CIA, and immediate past Secretary of Defense. At the time of our meeting, Jim was only 47 years old. He was, in a word, Superman.

After stints at the Treasury Department and the SEC, I had come to the Hill to rewrite the securities laws and had gotten caught up in the energy swamp following the 1973 Yom Kippur War and the ensuing Arab oil embargo. Senator Jackson and Jim were talking about the formation of a new Natural Resources Department to coordinate Federal energy related functions, an idea first advanced by President Nixon.  I had been invited to join the discussion as the lead energy counsel in the House. 

Months later, Jim was asked to write a comprehensive energy plan for President-elect Carter and later to serve as the first Secretary of the to-be-formed Department of Energy. And I was recruited by Schlesinger to chair the newly formed Federal Energy Regulatory Commission.

Jim didn't get everything he wanted in the new Department. He didn't get public lands and offshore mineral leasing, and he didn't get the then six-year-old Environmental Protection Agency, which he rightly perceived would grow to have even more influence than the Department over energy production, use, and distribution. The environmental community and many in the Congress were concerned that a nation in crises (and we were in crises) would subordinate environmental values in these jurisdictional areas for short term energy gains. President Carter agreed. But Jim did succeed in pulling in the entire national laboratory system and the nuclear weapons responsibility, and in stealing the Forrestal building from the Army Corp of Engineers - a deed for which he was never forgiven by his otherwise good friend Defense Secretary Harold Brown.

I recount this history to make a point.  Several actually.  Jim Schlesinger uniquely understood the value of the national laboratories from his days on the Atomic Energy Commission.  He wanted those extraordinary scientific and technical resources to be available for the execution of the Department's mission.  He also wanted the Department recognized among its peers as having a critical security function.  Maintaining the safety, security and effectiveness of the nation's nuclear weapons was then and is now a foundational element of our defense posture. This, he thought, would give him an assured place at the table at the National Security Council.  And it did. He also wanted this prestigious address on Independence Avenue within sight of the Capitol Building.  In Jim's mind, I am sure it was not to facilitate Congressional oversight, but to enable HIM to keep an eye on the Congress.

Jim had been Defense Secretary for less than four months before receiving a call from Saudi Oil Minister Sheik Yamani during the Yom Kippur War telling him that US Naval vessels were to be blocked from receiving Arab oil. The US was already at DEFCON 2 to deter possible Soviet mischief in the region.  (I could explain what DEFCON 2 means, but you really wouldn’t like to know.  Let’s just say it involves the alert status and positioning of nuclear forces.) These were circumstances that focused the mind.

Energy Security was not an academic issue to Jim Schlesinger nor was it to my friend John Hill who is with us today.  John had the responsibility to administer the oil and petroleum product allocation and price controls for the Nixon and Ford Administrations in the two and a half years of energy shortages that followed the Yom Kippur War and the rise of the OPEC cartel.  In the early days, this required daily meetings at which he assigned allocation volumes to various sectors of the economy and to the US military. This made for some very dicey interagency meetings, which included at one point an invitation to John to step out into the White House-OMB alley to settle a matter.

Nor was it an academic issue for truck drivers who could buy only 5 gallons of gas at a time, or for the people who waited in long lines to buy gasoline, or for farmers who couldn't get the product needed to harvest their fields.  World oil prices and prices of a third of our imports had quadrupled. The economy was on full stop with inflation and interest rates in double figures, a condition colorfully called "stagflation".

In the end, Schlesinger and the Congress were able to craft solutions to end petroleum allocations and end oil and natural gas wellhead price controls, but to do so took great acts of political courage and leadership by people like Senators Jackson, Bennett Johnson, Congressmen John Dingle, Phil Sharp, and, of course, President Carter himself. As a consequence, enormous wealth transfers took place from largely Northern consuming states to largely Southern producing states splitting the Democratic majority and likely dooming Carter’s re-election chances and Schlesinger's base of political support for further public office.

But these essential steps and others taken by the Congress and FERC over the years unleashed

the private sector and market forces that shape the competitive energy markets of today. And the country and its citizens have been the better for it.

It is important to note that Jim was an economist (as a lawyer, I like to point this out to my physicist friends).  President Harry Truman who always yearned for a "one-handed economist," would have loved Jim Schlesinger.  Jim understood very well the linkages among energy security, our economic health, and national security.  Jim, the economist, was very one-handed in his thinking about such matters. And he was willing to explain these linkages in simple definitive sentences, speaking very, very slowly to presidents, senators and congressmen alike – a trait that did not always endear him to his audience.

Nevertheless, that vision of the arc of relationship among energy security, national security and the function of our economy is perhaps Jim Schlesinger's most sustaining legacy. I use this term in its geometric sense meaning arcs of a circle of relationships, interconnected and continuous.

When I returned to the Department in 1994 which some described as "a triumph of hope over experience," the focus along the Schlesinger arc had shifted. Gone was the energy security conflict over price controls of oil and natural gas. The dismantling of FERC’s command control system for regulating electricity and gas markets, begun in the late 1970's, was well under way under Chair Betsy Molar's leadership and given impetus by Phil Sharp's and Bennett Johnson's 1992 Energy Policy Act. (It continues today under the direction of former Chair Cheryl Leflore and current Chairman Norman Bay.)  For me, though, the urgent work of my days and nights in the early and mid-nineties was focused on the national security challenges that followed the end of the Cold War and the breakup of the Soviet Union.

My time was filled with the budget and early implementation challenges of putting in place a Science Based Stockpile Stewardship Program to preserve the safety, security and reliability of our nuclear deterrent under a test moratorium first ordered under President George Herbert Walker Bush that is still in effect today. Working under the mandates of the Nunn Lugar Cooperative Threat Reduction Program and the follow-on Nunn Lugar Domenici Program, we were able to build out the beginning structures of what is today a robust Nuclear

Nonproliferation initiative and to launch the Lab to Lab program to secure nuclear weapons useable materials scattered in dangerous circumstances throughout the nine time zones of the Russian Federation and in former Soviet States. This and my subsequent work on nuclear security with former Senator Sam Nunn at the Nuclear Threat Initiative became the most interesting and consequential work of my life.

Today we have moved further along the Schlesinger arc. As succinctly put in Secretary Moniz’s “Cabinet Exit Memo," the Department now defines its mission as responsible for advancing the "energy, environmental and nuclear security of the United States." The Secretary sees DOE as fundamentally a science, technology and innovation organization, supported by the full complement of the Department's 17 National Laboratories, 16 of which, Jim Schlesinger had the good sense to bring into DOE's orbit in 1977.

Note the use of the term "environmental security." This clearly is a reference to the security concerns with climate change and the need to speed the market penetration of clean, diversified energy sources. Climate security was not part of Jim Schlesinger's vision nor his arc of relationships.  While environmental policies were always a part of the energy security discussion, climate concerns were not part of the energy vocabulary in the 1970's, except, of course, for the concern about the potential for a nuclear winter should deterrence fail and a nuclear exchange with the Soviet Union occur.

I agree wholeheartedly with Secretary Moniz that environmental security and specifically climate change now must be part of DOE's mission. Not only for this Administration but for the next as well. The Department's laboratories are a great engine of technical innovation and basic research in the physical sciences.  And the world has a great market appetite for clean energy sources. Clearly, we cannot simply cede those jobs and technology leadership in this field to others. Today’s US military, in particular our Navy, sees climate change in security terms. As do the 195 countries who gave their consent to the 2015 Paris Agreement and the 19 governments who signed on to the Mission Innovation initiative.  They collectively represent a very large market awaiting innovative solutions to energy and environmental security. 

I think the numbers of climate deniers will actually shrink in the next Administration as its responsibility for governance and leadership expands.  A simple change in the vocabulary of the debate can help. The world is warming rapidly.  This is measurable.  The science is incontrovertible.  It is my belief that we have become entangled unnecessarily in a debate over causation. Deniers won't accept responsibility that human activity is the cause. Sometimes environmentalists, in their frustration, point to the International Panel on Climate Change as validating human activity as THE cause, though I have not read the IPCC reports that way.  Instead the emphasis in the reports is on the clarity found in the data of the significance of anthropogenic contributions to climate change. There are undoubtedly other factors at play, but the only one we can do anything about is human activity. We know it is significant, indeed very significant, and growing, while time is running out. Today's DOE is doing something about it.  In fact, quite a lot about it, much to the Department's great credit. This vital work and the budget support for it must continue. The optimist in me believes they will, but belief is not enough. We must stand and defend this essential part of our energy future.

Before I end, I should observe that energy policy in the intervening years has not remained static.  We used to explain that energy policy was a derivative of our dominant economic, security and environmental goals.  And because these goals were sometimes in conflict, this derivative character made it hard to clearly articulate the policy and harder still to get consistent majorities in the Senate or the House.  Most major legislation passed by narrow margins, sometimes by only a small handful of votes. Indeed, that conflict goes on today in the shale patch as primarily local and state governments attempt to work out questions of water, seismic, and transportation safety and infrastructure.  While this is going on, US oil production has climbed from 5 to more than 9 million barrels a day and the US has become the largest producer of natural gas in the world. The Energy Information Administration now estimates that we are rapidly approaching the day when the US will become a net exporter of both oil and natural gas. Quite a reversal of fortune from the days before and after DOE was birthed.

Moreover, in our increasingly globalized world, energy flows, sources, use, and production have become central matters of State, effecting bilateral and multilateral relations and the geopolitical capacity of Nation States to act independently. As Dan Yergin put it in a Foreign Affairs article ten years ago, energy security is "now lodged in the larger relations among nations and how they interact with one another."  Jim would have loved to be an actor in today’s world, playing with a much better energy security hand than he was dealt four decades ago.

Lastly, I want to take advantage of this stage to try to stem any talk of abolishing the Department.  When this last came up in my days here in the mid-1990s, I used to jokingly warn off advocates by noting that the Department was ''Dysfunctional, Armed with Nuclear Weapons, and Dangerous."

Under Secretary Moniz's stewardship, those arguments no longer exist.  The Department still has nuclear weapons, but is no longer dysfunctional, and dangers have been greatly reduced. So instead, we will have to rely on the shielding effect of his remarkable record of achievement these last four years.

It is not credible to argue that organizational truth was discovered in 1977. Rather, one must ask: Is the mission necessary and where else might that mission be best executed. In the early days of the Reagan Administration, Congressional witnesses bent on doing away with the Department were obliged to answer “Yes, the mission is necessary" and "I don't know where else to put it." Ultimately, proponents retreated to a weak suggestion that the Department's mission and its assets should be placed in the Department of Commerce. Very soon thereafter the abolitionists gave up the fight. Such would be the outcome today were the fight to be joined.

The major sticking point was, and is, what to do with DOE's nuclear weapons responsibilities? After the end of WWII, it was solemnly decided to take this responsibility away from the Army and give it to civilian authority outside the military. That decision and the reasons for it still hold. And in today's fiscal struggles, that part of DOE's mission certainly needs a Cabinet Secretary owner. Both the International Atomic Energy Agency and the Pentagon would have been shocked if that person ended up being the Secretary of Commerce.

What would Jim Schlesinger think of environmental security being added to the mission and placed in the arc of relationships tied to energy security?  I cannot know, of course. To the very end of his life he would send me copies of his speeches as he did to others in this audience. I can only read the tea leaves.

I know he was emphatically opposed to the Kyoto Accord negotiated in the second Clinton term. That opposition had mostly to do with Jim's objection to entering into a treaty which he saw as decidedly one sided, ineffective to achieve its announced purpose, and opposed in advance by more than 90 out of 100 Senators.

But what would he think of the Paris Agreement, which had universal accord, and what would he think of the last thirty-plus years of scientific work of the International Panel on Climate Change? Remember Jim was at his core an economist. While economics is sometimes referred to as the "dismal science," it is nonetheless highly disciplined, analytic, and respectful of facts. Probably that is why MIT now ranks as the leading economics department in the country.

So I believe Jim would find himself in agreement with Secretary Moniz’s decision to specifically add climate security to the Department's innovation mission and would particularly applaud the private sector partnership aspects of the initiative.  In any case I dearly wish he were here to tell us so.

Will the new Administration end up seeing things as I do? Will it see the Department and its arc of related missions as essential to the nation's future? Will it recognize and exploit the great value of this extraordinary scientific and technical enterprise? I don't know. But I do know our nation's security hangs in the balance.

A final note – I never worked harder or longer than during my days at FERC and the Department. I enjoyed every minute – well, almost every minute. Like Ernie, I was supported by extraordinary individuals, one of whom I want to pay special tribute to today. On December 24, we lost Bob Nordhaus who was my colleague on the Hill, the first general counsel at the FERC in the 1970's, my law partner, general counsel of the DOE in the 1990's, my friend of 40 years and (with apologies to many in this audience) the finest lawyer I ever knew. He will be missed by all who encountered him and benefitted from his brilliance – especially me.

So I end where I began.  Thank you, Mr. Secretary, for this award. I am honored to have served this Department that Jim Schlesinger built and to have played a part in his life's story.

January 19, 2017
About

NTI President Emeritus and Emeritus Board Member Charles B. Curtis gave remarks after being honored at the Schlesinger Medal Ceremony honoring at the Department of Energy.

Authors
Charles B. Curtis
Charles B. Curtis

NTI President Emeritus and Emeritus Board Member