On January 20, Donald Trump, the real estate tycoon, is going to become Donald Trump the president.
He may not know it but in this transition he will take the reins of the largest energy company in the world.
{mosads}The federal government owns energy-rich real estate covering one-quarter of all U.S. lands, hundreds of power plants, tens of thousand of miles of transmission lines, 350,000 buildings and even more vehicles.
Throw in an annual energy bill of $23 billion, by far the largest in the nation, and a President Trump can rightly be called the CEO of U.S. Energy Inc.
There are many opportunities the new CEO has to do good and do well, that could save taxpayer dollars, cut pollution, advance U.S. competitiveness and reduce foreign oil imports. These are described in a recent major report to Secretary of Energy Moniz by a bipartisan federal task force of the Secretary of Energy Advisory Board that I co-chaired with former U.S. Representative and State Department official Ellen Tauscher.
First, President-elect Trump, with his deep real estate experience, ought to understand the major opportunity to invest in energy upgrades of his vast building portfolio and cut the federal energy bill.
Even better, there are well-established private ventures, called Energy Service Companies (ESCOs), which are willing to pay for energy efficiency improvements to public buildings — with private dollars — and pay themselves back out of the savings.
ESCOs have financed $30 billion of U.S. energy infrastructure improvements to date and stand ready to do more under President Trump’s proposed infrastructure plan.
Second, the federal government owns much of the U.S. transmission grid, especially in the western and southeast parts of the country. The nation’s grid is in desperate need of upgrade and expansion to improve system reliability, move vast stocks of wind and solar energy to distant markets and reduce cyber attacks.
The U.S. government, through its federal Power Marketing Administrations (PMAs), has the authority to undertake major improvements to significant portions of the grid, build badly needed power lines, and finance their development with cheap capital. This could be another element of President Trump’s infrastructure plan.
Third, the Departments of Defense and Energy and the General Services Administration have an unrivaled complex of facilities to test emerging energy technologies — efficiency, renewables, storage, carbon capture, nuclear and beyond — that can help meet the needs of the federal government’s vast complex of military bases, office buildings, and power plants.
U.S. companies are eager to increase their use of these energy technology “test beds” and win the federal government’s seal of approval. Modest federal funding of these test beds could help accelerate the commercialization of critical energy technologies developed by U.S. companies and sales at home and around the globe.
Fourth, the private sector is anxious to invest in the development of clean energy projects at federal facilities and on federal lands — but too often faces unwieldy federal power-purchase mechanisms and permitting requirements.
The Department of Defense and some of the PMAs have developed innovative new federal procurement vehicles, while the Department of Interior is working on improved approaches to permitting energy projects on federal lands and addressing wildlife impacts.
Finally, if CEO Trump wants to really cut the $23 billion federal energy bill, and other operational costs of his new building empire, he should trim the federal government’s real estate footprint, which stands at more that 3 billion square feet — more than a thousand times the president-elect’s current holdings. The Obama administration has regularly asked Congress for authority to close unneeded civilian and defense facilities but has regularly been rebuffed.
A White House and Congress of the same political party might stand a better chance of pulling this off — and saving taxpayers lots of money in the process.
Dan Reicher is executive director of Stanford University’s Steyer-Taylor Center for Energy Policy and Finance and formerly Google’s Director of Climate and Energy Initiatives and Assistant Secretary of Energy in the Clinton Administration.