The Limits of Technology and Spending
Science was an asset of state, not only because it furnished new tools and improved techniques of war, but because it contributed directly and indirectly to the general prosperity, and prosperity contributed to power.
David S. Landes, 1969
As international adjustment schemes and state-building efforts were breaking down, another policy effort was picking up momentum. It was a wide-ranging set of spending programs aimed at stimulating energy production, dampening energy consumption, and laying the groundwork for a national transition from traditional to advanced and renewable energy sources. In effect, executive officials fell back on a traditional form of public policy: spending programs designed to alter or encourage private behavior. In this case the spending instrument was tied to an energy science and technology policy, creating an even more compelling rationale for the disbursement of public funds. For a program presented as a forward-looking national investment in the transition from petroleum to advanced forms of energy, the public purse gradually opened, and by the end of the decade the American federal government had massive spending programs for massive research and development.
The attractiveness of these spending programs for administrative officials otherwise hemmed in by government institutions is clear. Expenditure programs required less centralized organization and did not raise the threat of direct government involvement in private commercial affairs. Although they promised little in the way of immediate relief, they did provide opportunities for modest levels of government leadership. Unable to alter prevailing government roles in the energy area, administrative officials resorted to pushing more money through current institutional channels.
Use of the spending instrument took the form of public expenditures for research and development. Executive officials did not think R & D programs promised simple solutions to energy adjustment problems, but they did think they provided a cutting edge for state leadership on energy adjustment. Because the American state could get involved in encouraging the development of technology, the energy R & D program provided a basis for leadership.
There are three reasons why the state could create this leadership role for itself in the 1970s. First, there was a “policy space” in which government could take on a leading role. There was no great resistance, and indeed, scientists and various congressional officials were actively encouraging organizational and programmatic expansion of the federal government’s efforts in science and technology.
Second, the fundamental logic of energy R & D initiatives involved spending money. Other federal initiatives were blocked, but the disbursement of money was a readily available option. Although the American government had little direct power to alter patterns of energy consumption and production, it could spend money—and in so doing indirectly encourage new patterns.
Third, the science and technology option involved a small circle of political players. Congressional committees were willing to appropriate huge sums of money, and planning did not require a large organizational infrastructure. Science and technology experts could be recruited into the executive branch to act as program managers, supervising the spending programs to encourage technological development. In essence, the government could exercise its new role without challenging established societal interests or exhorting society to adopt new forms of behavior.
ORGANIZATION OF ENERGY RESEARCH AND DEVELOPMENT
In the years prior to 1973 no government agency had central control over energy R & D. Various public and private studies and reports in the postwar period proclaimed the importance of a unified government role in energy science and technology, and in the early 1970s the urgency of these exhortations quickened. Nonetheless, federal responsibility for energy R & D remained bureaucratically fragmented and unprepared to generate a national strategy.
In the absence of a national R & D strategy and a central organization to undergird it, government expenditures remained the tool of disparate bureaus and agencies. One government study noted that without a national policy, “the method for managing those [R & D] activities requiring Federal attention has evolved gradually and in an uncoordinated fashion.” Consequently, “energy R & D has been conducted by the different agencies as a part of their particular missions.”1
Before 1968 modest coordination was possible only through the budgetary process. As one congressional study notes, “in the yearly review by the then Bureau of the Budget (now the Office of Management and Budget) of individual agency budget requests, some attempt was made to assure that the mission-oriented requests did not overlap requests for funds for the same programs from other agencies with other mission.” However, it was difficult for the bureau to do more than prevent simple duplication. “There was no rational way for them to determine whether the levels requested were too high or low, whether there was balance among the programs, or whether important omissions were occurring.”2
With the establishment in 1968 of the Energy Policy Office in the Office of Science and Technology, coordinating and planning efforts were attempted. Some achievements were made in specific projects; also, the office attempted to rationalize and balance the multiple bureaucratic bases for the sponsorship of energy R & D. However, the tasks of planning and coordinating continued to overwhelm the modest, three-person staff of the office. With the office directing its efforts at ad hoc problem solving, coordination had to remain with the budget mechanism.
Early Organizational Problems
The problem of planning and coordination should have come as no surprise for officials of the Nixon administration. The organizational and analytic inadequacies confronted in the early 1970s had been identified a decade before, in the first systematic study of energy R & D. An interdepartmental task force, initiated by the Kennedy administration and reporting in 1964, had identified problems in existing federal activities in energy R & D. The report acknowledged that energy R & D was carried on “at so many levels and in so many different types of institutions that it is not easy to derive a composite picture of what is being done, what is being neglected, and what should be started now if a possible future crisis is to be averted.” Nonetheless, although abundant domestic resources were adequate for the short term, longer-range requirements made necessary an expanded and coordinated R & D program. Indeed, the central failing of the existing government effort, the report concluded, was the absence of a “long-range, integrated plan for civilian energy R & D.” This institutional problem led to others, such as delays in initiating essential research with distant payoffs and inadequate support for programs without demonstratable high promise.3
The report identified a broader problem, one that would finally be redressed a decade later: the paucity of professional experts in energy research, both within and outside government. It concluded: “The scarcity of R & D talent in some disciplines, in fact, prevents full implementation of many essential programs, and it is critical for certain long-range research projects that must be initiated promptly if the payoffs are to ensue within the necessary time scale.” A unified field of “energy research” has not existed. Rather, energy research has been carried out in disparate and unconnected scientific subfields. Each type of research demands a different institutional setting. For these reasons, the report argued, a “dynamically balanced program in civilian energy R & D” would require more than a laissez-faire approach. It “must include appreciation of the necessity for the Government to assume a new role—stimulus, catalyst, or sponsor, as appropriate—if implementation of the overall program is to be assured.”4
This analysis foreshadowed the R & D imperatives rediscovered in the early 1970s. The report illustrates the professional view that institutional innovations were needed to facilitate long-term planning and investment. However, innovation would have to await the crises of the 1970s.
CONGRESS AND THE SCIENTIFIC COMMUNITY
The initiatives taken by the Nixon administration in the early 1970s were not simply matters of narrow concern to executive officials. Proposals emerged in a political context highly disposed to support an enhanced federal role in R & D. This support, which created a favorable policy space for organizational reform, came both from Congress and from the scientific and professional research community.
Support came at two levels. Various groups and agencies were advocating higher levels of spending on energy and R & D and more coherent planning techniques. More generally, a large array of groups and officials came to urge a broad-scale upgrading of the federal government’s commitment to science and research.
The first sort of professional research concern for an expansion of government responsibility for energy R & D can be seen in a 1971 report prepared for the National Science Foundation. The report was largely a technical discussion of state-of-the-art opportunites in energy R & D; however, criticism of existing administrative and funding commitments formed a central theme.5 The report concluded that in the United States, energy-oriented R & D, both public and private, was at an intolerably low level.
The view that government was not adequately organized for the effective deployment and direction of science and technological resources was shared more broadly. The science and research community, that is, professional scientists and engineers within and outside government, also called for a strengthened government presence in science and technology affairs. This concern was expressed in the National Science Foundation. In this body, for example, new programs were proposed in invigorate government support for science and technology development. In 1973 the NSF proposed a National R & D Assessment Program and an Experimental R & D Incentives Program. These programs were to be funded in the following year at the level of $30 billion.
Much of this concern from the professional research community was triggered by Richard Nixon’s abolition of the science policy machinery within the Executive Office; responsibilities for advice on civilian R & D programs had been transferred to the National Science Foundation. These actions prompted concern over an issue that had surfaced periodically throughout the postwar period: where should science and technology policy be located within the executive policymaking establishment, and how important was it?
In 1973 the National Academy of Sciences reaffirmed the need for a high-level apparatus to advise the president.6 It proposed a council of advisers similar to the abolished Office of Science and Technology and which was to function not unlike the Council of Economic Advisers.
Other calls for reform were registered before Congress. One important voice was that of S. David Freeman, formerly an official in the Nixon administration’s Office of Science and Technology. In congressional hearings in 1972 Freeman spoke as director of the Ford Foundation’s Energy Policy Project. He expressed a view shared widely among government, industry, and other private groups, that the nation needed a stronger federal effort in energy R & D. He argued that major areas of energy R & D remained grossly neglected and that this was a central reason for the serious national energy crisis then emerging. Behind inadequate government efforts was an organizational problem:
I am, of course, very much aware of the numerous Federal agencies and private companies engaged in energy research and development. With the exception of the Atomic Energy Commission the efforts are scattered and relatively weak. They are carried on in small offices in large departments. The department heads have numerous responsibilities which make it difficult for them to focus on energy R & D as a high priority item. There is no agency with responsibility to develop new sources of energy, such as solar, all the way to commercial feasibility. There is no agency to develop the means for consuming energy more efficiently, which I think holds great promise in helping us match supply and demand without shortages. There is no agency to compare all the rich array of options or push for a strong across-the-board program with commitments to produce commercial hardware on a realistic timetable.7
Later, Freeman pointed to the need not just for organizational reform but also for the recruitment of experts into central administration. He argued that “in order to lead a new thrust in energy R & D the responsible Federal agency must possess a critical mass of technical talent. Without such talent the program would be at the mercy of promoters and special interests.” Although the executive branch already had many experts, “the necessary depth of technical talent to carry major projects to commercial success does not seem to me to exist anywhere in the Federal energy establishment outside of the AEC.”
Other members of the national science establishment advocated integrated energy R & D programs and an enhanced federal organization. One prominent member of the science community was MIT scientist James R. Killian, Jr., who in 1972 congressional testimony had also signaled the need for federal action. “I support the view that the construction of a sound energy program for the Nation calls out for new organizational arrangements with the Federal Government, and for new ways to select the policies that will concert our actions and clarify our goals,” Killian argued. “I also want to emphasize that such a well conceived program will require policy guidelines and further integration of institutions for executing policy if we are going to do it well.”8
Representatives from the science community clearly wanted to remain at the center of federal initiatives. In 1972 a National Science Board report “The Role of Engineers and Scientists in a National Policy for Technology,” recommended that scientists and engineers gather in special groups “to explore specific large problems of national importance, and to explore alternatives for dealing with those problems.” It also suggested that these specialists could “put forward a menu of alternative solutions from among which choices can be made by the established decision making process of Government.” The NSB did not envisage these exploratory groups as replacing political officials in the political process. Rather, the groups were to frame choices and suggest possibilities.9
This report summarized the views of the science community on federal involvement in energy R & D and sought a greater role for government. To facilitate this expanded role, the community recognized, new institutions would be needed to coordinate and rationalize funding and administration. The NSB and those it represented hoped that those new institutions would build in major participation by the scientists and engineers themselves.
Other support for new federal efforts in science and research came inside Congress itself. Congressional interest in energy R & D came from many quarters, but it was concentrated in a subcommittee of the House Committee on Science and Astronautics. In 1970, after several months of hearings, the Subcommittee on Science, Research, and Development released a report recommending an expanded and integrated science policy. The subcommittee underscored the importance of science and technology to social problem solving. It urged a national program with formal policy goals and with planning responsibilities concentrated in a single administrative agency.10
This subcommittee, in the following year, focused more specifically on energy R & D. Led by Representative Mike McCormick, the subcommittee formed a task force on energy R & D, and it began meetings and briefings in 1971. In May 1972 the subcommittee held hearings, and the task force issued a report in January 1973. Along the way the task force published an inventory of energy research. In the 1973 report the task force urged that a “greatly increased national energy research and development effort” be implemented. Furthermore, it recommended organizational reform. The White House must be the “focal point” for the new effort, and a single operating agency should be established to support energy R & D. Finally, the report suggested particular priorities for federal funding.11
The full House Committee on Science and Astronautics continued to conduct hearings and issue reports during the 1970s. The committee held hearings in 1973 and 1974 whose theme was that new social and economic problems were producing new imperatives for high-level policy making in matters of science and technology.12 In 1973 the newly formed Subcommittee on Energy conducted hearings focused directly on substantive aspects of energy R & D. Representative McCormick, as subcommittee chairman, stressed “the high priority which I feel should be assigned to energy R & D.” In testimony from administration officials, the subcommittee sought to extract commitments from the administration for budget increases and specific targets for energy research.13
The second major congressional source of support for expanded programs for energy R & D was to be found in the Senate. In May 1971 the Senate approved a long-term study of energy and resource problems, to be conducted under the sponsorship of the Senate Committee on Interior and Insular Affairs.14 The mandate was quite broad, to study resource availability and emergent energy problems, to explore the impact of federal laws and government programs on the energy industry, and to recommend legislation. Senator Henry Jackson, chairman of the committee, was charged with responsibility, and in the years that followed this committee responsibility placed Jackson at the center of energy policy debate. The study produced a myriad of reports and hearings. These materials continued to appear throughout the Nixon and Ford administrations, although they never became a well-tailored legislative agenda or energy program.15
R & D AND THE NIXON PROPOSALS
The first national call by a president for a systematic policy for energy R & D came in June 1971. In a message to Congress, President Nixon outlined a general program to meet what was perceived to be a gradually emerging energy challenge. Nixon committed government to “providing technical leadership” on a broad range of emerging technologies and sources of energy. The president claimed “that the time has now come for government and industry to commit themselves to a joint effort to achieve commercial scale demonstrations in the most crucial and most promising clean energy development areas—the fast breeder reactor, sulfur oxide control technology and coal gasification.”16 R & D initiatives encouraged by the government were to be a central response to the dislocations and shortages caused by rapidly expanding energy consumption.
This new commitment to research and development was to be facilitated by organizational reform. Acknowledging the problems of bureaucratic dispersion of responsibility for research and policy, Nixon proposed that programs for energy production and development be consolidated into a new Department of Natural Resources. He argued that “one of the major advantages of consolidating energy responsibilities would be the broader scope and balance this would give to research and development work in the energy field.”17
The Nixon administration announced it would seek to consolidate bureaucratic functions into centralized superdepartments in the 1971 State of the Union Message. A Department of Natural Resources, it was argued, would concentrate fragmented government responsibilities. Within this new Department an Energy and Mineral Resources Administration would centralize and direct energy R & D programs, creating the organizational bases for a strategic R & D policy. “Broader scope and greater balance would be given to nationally supported research and development work in the energy field.”18
In March 1972 the president again addressed himself to the need for new government capacities. Nixon specified a variety of conditions—the sheer size of projects, their expense, and their risks—that justified the presence of government leadership. Secretary of Commerce Peter G. Peterson, in congressional testimony later that month, elaborated on the view of the executive branch. After noting the president’s stress on research and technology as instruments of public problem solving, Peterson focused on energy: “We have identified an energy crisis in this country, and we have realized that one crucial way to resolve this crisis is through technological advances.”19
1973 Nixon Proposals
The symbolic overture for the R & D initiatives came in June 1973, with a new set of proposals from the Nixon administration. The centerpiece was a proposal for a $10 billion program for energy R & D spread over a five-year period beginning in Fiscal Year 1975. In addition to this projected spending, Nixon authorized $100 million in the current budget to be “devoted to the acceleration of certain existing projects and the initiative of new projects in a number of critical research and development areas.” The presidential message directed the chairman of the Atomic Energy Commission (AEC) to review prevailing efforts by government and industry in energy R & D and to recommend an integrated national program. The president noted that “this program should encourage and demonstrate new technologies that will permit better use of our energy resources.”20
The June message also contained new organizational proposals. Nixon proposed a new, independent agency, the Energy Research and Development Agency (ERDA), to “focus” all federal energy R & D by merging the R & D responsibilities of the Atomic Energy Commission and the Department of Interior. The agency was to have responsibility for the planning and management of government operations and expenditures. In addition, he again proposed a Department of Energy and Natural Resources to take over authority for energy policy from the Department of Interior and other agencies. Finally, the president acted immediately to upgrade the existing energy policy staff in the Office of the President, by expanding existing staff into the Energy Policy Office. An advisory council of outside experts would advise this office.21
The initiatives led to little direct action, for the administration was still engaged in a complex reorganization within the executive branch. As late as April 1973, for example, in a message to Congress on energy, the president was still seeking to strengthen energy R & D within the Department of Interior. In addition, there were problems in the continuing absence of analytic capacities to evaluate the merits of particular programs and a centralized agency capable of setting research priorities.22
The Nixon administration, in the two years preceding the October embargo, had been developing broad policy proposals to meet energy problems that were not yet understood as an immediate crisis. On the one hand, these efforts were part of a larger executive plan for bureaucratic reform—embodied in the proposal for a Department of Energy and Natural Resources.23 This proposal met with stiff congressional resistance, but other initiatives, more directly related to energy R & D, were unfolding. The most important organizational step in this regard came with the June 1973 proposal for a centralized energy R & D agency, the Energy Research and Development Administration. This agency would centralize energy R & D responsibilities and generate a national strategy for implementation.
THE ENERGY RESEARCH AND DEVELOPMENT ADMINISTRATION
By 1975 the organizational machinery was in place and the disbursement of R & D money had begun. As Table 5 and Figure 2 indicate, government expenditures rose dramatically after 1974. Between 1974 and 1977, for example, energy-related R & D rose 191 percent, and the increases are even more striking when nuclear (fission and fusion) research funds are factored out. In a discussion of the energy R & D expenditures of different governments, the National Science Board noted in 1981 that “the United States is . . . one of the few OECD countries which have significantly and consistently increased public financing of energy research and development since the energy crisis began in 1973. The U.S. energy R & D budget rose 469 percent from $0.6 billion in 1973, to $3.6 billion in 1980.”24
Throughout the 1970s energy expenditures were one of the fastest-growing parts of the federal budget. Several Department of Energy research analysts have indicated that few budget requests were left unfunded, and only rarely were the substantive aspects of particular projects challenged. “I had essentially a blank check,” one official summarized.25 The political environment for the growth of government support for energy R & D was highly favorable. Few groups or officials opposed generous funding of research projects.
SOURCE. National Science Board, Science Indicators, 1982 (Washington, D.C.: National Science Foundation, 1983), p. 244.
The bureaucratic handling of these huge budget requests came to reside in ERDA, which was established in 1975. ERDA received administrative and congressional support to build a large-scale organization for planning and operations. Congress, in funding the first ERDA budget, stressed the technological dimension of the “Nation’s energy challenge,” claiming that energy solutions “will require commitments similar to those undertaken in the Manhattan and Apollo projects.”26
The agency recruited scientists and economists and became the main government body generating proposals for targeted research. In its first years ERDA was much envied; as one observer at the time noted, ERDA had “plenty of money and a lot of glamour,” and scientists and various experts from around the executive establishment were eager to move to ERDA. Chief administrator Robert Seamans also recruited officials from private industry. Behind the ambitiousness of the ERDA mission and the esprit of its early incumbents was Congress, which lavished funds on the new organization. “Congress believes that R & D, at least, is something the American government knows how to do,” one observer noted.27 With this political support and the ongoing problems of energy adjustment, ERDA became a highly visible and active bureaucratic agency within the executive establishment. By mid-1975 it had put forth a comprehensive plan for energy R & D, a plan that provided rationales and priorities to guide the large budget expenditures that Congress was beginning to pass.28
ERDA brought together the major federal responsibilities for energy R & D. Personnel and resources were transferred from the Atomic Energy Commission, bringing in nuclear research, the national laboratories, and military nuclear weapons research. Facilities from the Interior Department’s Office of Coal Research and the Bureau of Mines, and a variety of National Science Foundation programs concerned with solar and geothermal research, were incorporated into ERDA. Finally, programs in the Environmental Protection Agency concerned with advanced automotive research were brought under the new research umbrella. A total of 7,222 employees were transfered to ERDA, which began with an operating budget of approximately $3.6 billion.29
After its passage by Congress, ERDA was charged with developing a national plan for energy technology. With this general mandate ERDA produced a set of broad energy goals and developed a strategic planning approach to bring federal R & D resources to bear on them. It identified both conservation and production projects. Short-term, high-priority conservation investments included technologies to increase industrial and transportation efficiency. Among energy production goals, the important short-term priorities included technologies to facilitate the use of coal and enhance the recovery of oil and gas, as well as a continued commitment to light-water reactors.30
Longer-term commitments were made to energy technologies that expanded renewable sources, among them the breeder reactor, solar electric power, and wind and thermal power options. The immediate goal of ERDA was to move practical technologies to the commercialization stage quickly and then relinquish control to private industry. More remote technologies were to be encouraged at the level of basic research.31
Legislative mandates ensured that ERDA would focus its efforts on different energy sources. The Solar Heating and Cooling Act of 1974, the Geothermal Energy Research, Development, and Demonstration Act of 1974, and the Solar Energy Research, Development, and Demonstration Act of 1974 instructed ERDA to develop programs for effective use of particular types of energy.32
The most important aspect of ERDA’s mission was the establishment of program planning and implementation. Initially ERDA commited itself to the development of analytic techniques for program building. Planning responsibilities for R & D were carried out within the framework of a Planning, Programming, Budgeting, and Review (PPBR) system. This system, as ERDA described it, was “to provide an integrated and disciplined approach to analyzing the Nation’s future energy technology needs; formulating the Federal role in addressing those needs; designating targeted programs to conduct ERDA’s portion of the Plan; allocating resources consistent with the Plan and program design; and ensuring that ERDA’s programs are effectively managed.”33
At the center of the ERDA planning system was an assessment process to pinpoint projects for funding. The “strategic planning logic” is detailed in Figure 3. Its fundamental intent was to provide systematic assessments of opportunities for government intervention in energy R & D. Government involvement would be justified where returns on private investments were inadequate yet public returns on investment were deemed sufficiently high. Where public goals were involved, the planning process was to specify appropriate government mechanisms for implementation and review. Finally, the planning process was to be built upon continually enhanced analytic capacities. “An integral part of this Plan is a detailed program for improving the informational base for these assessments, facilitating ERDA’s access to this information, and developing the tools to better analyze the implications of new technologies in terms of economic growth, environmental impact, and public policy.”34 One analyst described the strategic planning more straightforwardly: “It will determine which of [ERDA’s] goals already meet private-sector investment criteria. For those that don’t, ERDA will design whatever incentives (e.g., guaranteed loans, capital grants, price supports, research and development funding) are required to attract private investment.”35
ERDA was molded into an active bureaucratic organization by its first administrator, Robert C. Seamans, Jr. Formerly president of the National Academy of Engineering, Seamans brought ERDA to the leading edge of energy planning during the mid- 1970s. His belief was that government had a special responsibility for moving the nation through a historic energy transition and that this contribution would center on science and technology. In his confirmation hearing Seamans underscored his “strong conviction that science and technology can and must make vital and fundamental contributions to both the short and long term solutions to our national energy predicament.” To this end Seaman affirmed his belief in a “strong R & D agency capable of developing and sustaining a balanced and practical program for energy generation and conservation.”36 With the ERDA plan as his organizing document, Seamans became active in the policy process.
SOURCE. ERDA 76–1, “A National Plan for Energy Research, Development & Demonstration: Creating Energy Choices for the Future, 1976” (Washington, D.C., 1976), 1:83.
Within the executive branch Seamans met weekly with the Ford administration’s Energy Resources Council (also authorized by the Energy Reorganization Act of 1974) to coordinate ERDA plans with the government’s larger efforts on energy policy. After the first ERDA plan took shape, Seamans and other officials conducted regional public discussions.37 The most important political relationships that Seamans and ERDA forged, however, were with relevant congressional committees. Here ERDA was pressed to relate its efforts to the formal administrative goals of energy self-sufficiency. In particular, although Congress tended to support most R & D funding requests, it did demand better indicators for program evaluation. Senator Jackson, for example, who chaired the Committee on Interior and Insular Affairs, asked for more sophisticated program analysis, pointing out that “it is the Committee’s feeling that there is a serious need for more specificity in the plan [ERDA 76–1] through targets and costs for the various plan elements. Any plan requires some quantitative measure of success, that is, clearly defined targets that allow others to judge the effectiveness of the actions taken to achieve the planned goals.” Seamans responded that ERDA was “still developing the techniques and information necessary to improve our procedures for allocating resources among the many energy R & D options.” But he also indicated the limits of strict cost-benefit analysis caused by “uncertainties derive[d] primarily from the forecast sensitivity to factors such as energy policy, government programs, economics of technology, and market situations.”38
Despite the analytic limits on evaluation of its programs, ERDA generated three national R & D plans between 1975 and 1977. The Department of Energy’s Historical Office summarizes these efforts as follows: “ERDA . . . made significant progress in developing national energy research and development plans, in mobilizing talent, and in coordinating the diverse energy activities formerly scattered among many federal agencies. The staff worked closely with all segments of industry, with the academic community, with foundations, with nonprofit corporations, and with foreign countries. . . . [B]y the time ERDA was absorbed into the Department of Energy in the fall of 1977 programs were well underway for the near-term demonstration of more efficient ways to recover and use coal, oil and shale, and a number of pilot plants had been constructed or were in progress.”39
ERDA was an attempt to construct an administrative apparatus capable of identifying and funding emerging energy technologies. It is revealing that Seamans, its first administrator, came from a background in large-scale technology projects, most notably the Apollo Project. Seamans drew strong parallels between ERDA and NASA. In 1977 Seamans noted that these two major projects “are the largest nonmilitary, government-run research and development organizations ever established.” He went on to note that “partly because of perceived threats from abroad, both commenced operations within an environment of strong presidential, congressional and public support.”40 The organization at its beginning was strongly imbued with an ambitious and vital administrative mission.
To its administrators, ERDA was to provide a focus for bringing together diverse and complex technology programs. Those officials, while attempting to design a coherent and autonomous government presence in the energy sector, recognized the inherent limits on ERDA’s control. Administrative goals were generally long-term, and the fruits of ERDA programs were ultimately to be given to the private sector. These factors, and the complex relationships that had to be forged with universities and private industry, pulled at the centralization and strength of ERDA’s leadership.
OMB and the 1977 Budget
Above ERDA (and later the Department of Energy) was the Office of Management and Budget, the instrument that related proposals being generated within ERDA to presidential goals. The OMB in many respects conforms to the archetypical “state organization”—isolated from interest groups and staffed by experts charged with making neutral judgements about budget proposals. Thus it can become a formidable counterweight to the play of particularistic interests. David Dickerson and David Noble note a relationship between the Office of Science and Technology and OMB that resembles the relationship between ERDA and OMB—an institutional pattern, they argue, that created “legitimation for the modern, executive-centered, interventionist state.”41
Yet in addition to this role as counterweight, OMB has also been used to rank and aggregate proposals, allowing the president, where he perceived a special issue (as Ford and Carter did with energy), to impose his priorities on the budget process. Indeed, one study of science and technology policy concludes that during the 1970s the “OMB became a potent manager of science through the mechanism of the annual federal budget cycles.”42
The ascendancy of the OMB as organizer and priority setter for energy research and technology initiatives was explicitly reflected for the first time in January 1977, in an important budget analysis document. In its major document for the 1978 budget, OMB provided the intellectual rationale for the federal government to take the lead in the nation’s achieving energy adjustment goals, and for the special role of R & D funding as an instrument by which the executive branch might impose order and direction on that process.43 In an otherwise conflict-ridden and decentralized policy process, funding for science and technology programs for energy was to provide the mechanism for shaping national priorities.
CARTER AND THE DISPERSION OF FUNDS
With the Carter administration energy R & D funding reached its zenith, both in level of expenditures and in diversity of targets. Indeed, the pattern of expenditures evolved over the Nixon, Ford, and Carter administrations. Early post-1973 funding, proposed in the context of the ambitious goals of Project Independence, focused on “big-ticket items” that would further efforts to expand domestic energy production rapidly. In subsequent years expenditures diversified, based increasingly on the assumption that domestic petroleum prices would have to rise to the international level. It was the gradual recognition among executive officials that payoffs from the massive R & D effort were tied to energy decontrol and domestic price increases which added political force to the effort to deregulate.
Gerald Ford expanded energy research and technology budgets, considerably broadening coal and conservation programs. Jimmy Carter also diversified research and was more willing to fund such renewable sources as solar and geothermal. Types of programs shifted, from big and ambitious projects to longer-term and more marginal programs, precisely the types of programs that depended on a progressive imposition of market adjustment.
Under Carter, energy R & D expenditures gradually began to deemphasize nuclear research and strengthen research programs in non-nuclear areas. The final Ford budget proposal (1978) would have provided 64 percent of the total energy R & D budget to nuclear research; Carter changed it to 57 percent. By the end of Carter’s administration, nuclear research amounted to only 41 percent.44
The state’s role in R & D began to move closer to commercial demonstration. The Carter administration repeated the familiar guidelines that defined the proper role of government in energy R & D—government was not to drive out private investors or displace the resources of industry. Nonetheless, Carter did allow federal programs to tangle with market demonstration and current industry investments. Carter states: “A major challenge is to demonstrate technologies that will enable us to substitute [coal and oil shale energy sources] for our ever increasing oil imports. My program provides for the government to work closely with American industry to accelerate the demonstration of commercial-scale technologies that show promise of entering feasibility and the economics of conversion processes.”45
With the creation of the Department of Energy, the activities of ERDA were brought under the administrative control of a large cabinet department. The new department’s hierarchy continued to press for a unified planning apparatus, and energy technology policy remained a key vehicle for this planning effort. Secretary of Energy James Schlesinger told the House Committee on Science and Technology in January 1978 that “we are moving to bring the concept of unified Executive Branch planning to a reality by pursuing the comprehensive approach that is needed. . . [This] approach will use the wide variety of tools at the Department’s disposal to stimulate greater and better use of new technologies.” The Carter administration, like its predecessors, stressed the need for the executive branch to gain control over emerging energy technology. “In the past,” Schlesinger argued, “we believe R & D has been conducted more or less in terms of the imperatives of the developers, rather than the imperatives of the economy at large.”46 For the Carter as for the Ford Administration, technology policy became an attractive vehicle upon which to build energy planning and budgeting.
The Carter administration’s energy technology policy was publicly presented in an impressive, sophisticated language of “time phasing” and investment payoff calculations. The chief outcome of the policy, however, was a broadening of the definition of programs and technologies that would receive federal funds. Indeed, Schlesinger admitted in congressional testimony in 1979 that the disbursement of energy R & D funds had not followed very closely from an analytic design. “There has been a habit,” he said, “particularly after the 1973–74 embargo, to scatter money around on various technologies of interest.” This dispersion of funds carried a policy logic; Schlesinger argued that “there is no single solution to our energy problems. . . As we adjust to these future problems, what we will have is a whole set of small solutions which will contribute to the totality of the United States’ grappling with its energy problem.”47 By 1978, for example, the share of government R & D funds going to nuclear programs had fallen to a new postwar low. Even in the mid-1970s, energy programs and technologies other than nuclear power were claiming a healthy share of federal energy R & D budget (see Table 6).
The juxtaposition of an energy R & D strategy with congressional willingness to appropriate funds makes it difficult to determine where strategy leaves off and constituency politics begins. At the very least the two were not always incompatible. The Department of Energy strategy of encouraging a wide range of new technologies sat well with a Congress eager to please those who would receive funds. Beyond this, the administration—beginning with ERDA and thereafter with the Department of Energy—sought persistently to put together a grand strategy. As late as 1979 Carter’s energy officials were still grappling with a programmatic apparatus that would generate a coherent R & D strategy. Schlesinger noted in that year that “the process of project definition before one starts the large expenditures of funds has hardly been done at all.”48 He added that the Department of Energy was struggling to develop the analytic competence to decide on funding levels and time horizons for various energy technologies. As ERDA officials had found in the mid- 1970s, the disjunction between program strategy and expenditures was large. It was not atypical for Congress to appropriate more funds than ERDA or the Department of Energy had requested. The House Committee on Science and Technology, for example, was a center of government support for a massive effort in non-nuclear R & D. In 1976 that committee raised ERDA’s budget request in the non-nuclear area by over a quarter of a billion dollars.49
Nonetheless, officials throughout the Ford and Carter periods labored to shift spending in one direction or another, acting according to an elaborate plan but implementing congressionally approved energy R & D programs that were rough around the edges. Charges of pork barrel politics were rife and not unfounded.50 Yet the aim of the state was indeed to channel money into the private sector, with the hope of providing a more or less efficient stimulus for the development of energy. The American government had sought similar responses to socioeconomic crisis before, spending money as a sort of public bribery in the service of national goals. Although energy R & D officials sought to spend money according to strategic policy, government could not implement policy “cleanly”—it was a cost of the type of policy instrument being used.
The rich irony of these technology spending programs was in the incentives they produced for a return to market pricing. Carter’s officials began their tenure with an elaborate program to stimulate energy production and conservation without moving directly to decontrol oil and natural gas prices. The Crude Oil Equalization Tax epitomized this elaborate effort to solve energy problems without confronting a difficult and politically costly problem. However, the successful commercialization of investments in energy technology, built up over the course of the decade, eventually turned on the question of pricing. If traditional energy sources—chiefly oil and natural gas—continued to be subsidized through price controls, the new and competing energy technologies would remain at a disadvantage. By the end of the 1970s the accumulated size and diversity of these new technology programs weighed on the side of market pricing.
It was for this reason that in 1978 the secretary of energy began to talk more forcefully about market pricing. “The first step to . . . commercialization is to provide financial inducements to industry to move in that direction [toward new technologies]. That is the reason we are attempting to get the price of oil up to the world price level and to provide a pattern of incentives in rebates in order to induce the shift away from oil and natural gas toward coal.” He concluded: “As long as we subsidize the price of oil in this country it is not going to be attractive to industry to shift.”51 In the later months of the Carter administration, therefore, while the funding of programs remained the central tool for the exercise of government power, all issues began to turn on the question of energy pricing and the market.
The spending instrument was used in a wide variety of ways after 1973. In this mixture of expenditure and taxing programs, energy R & D funding became a particularly important government instrument. Of course, the political usefulness of science and technology spending programs predated the energy problems of the 1970s. Indeed, programs of this sort reflected a more general conviction among executive officials and professionals that systematic science and technology spending would give the government new opportunities for problem solving in critical areas of public policy. The growth of R & D funding as a state tool has been noted by James Katz:
During the 1950s, research was perceived as important, but largely as insurance for national defense and to a lesser extent as a means of fostering public health. The Johnson and Nixon Administrations gave increased attention to the uses of research for social needs. First, the social problems, then the economic problems of the nation were perceived as soluble by additional research. These ideas have slowly gained intellectual currency (although hard-currency allocations were often postponed due to more immediate budget constraints) over the last twelve years. The Ford administration was the first to enunciate this belief formally and it also backed this commitment with significant money.52
The most important expression of this increasingly systematic and ambitious science and technology policy was in the area of energy adjustment.
The problem-solving potential of science and technology policy was affirmed by the Nixon administration’s secretary of commerce, Peter G. Peterson, in congressional hearings in 1972. He cited energy problems as a priority area. Peterson argued that “government can play a crucial role in the research and development of new ideas for solving our growing social problems. . . We have identified an energy crisis in this country, and we have realized that one crucial way to resolve this crisis is through technological advances. That is why the fiscal year 1973 budget had a major increase in expenditures for research and development in energy.”53
Beyond the general optimism within government regarding scientific instruments for problem solving was the attractiveness of programs that could be formulated as a public good. Research and development was amenable to this characterization, and the programmatic expression of this set of initiatives involved in essence the channeling of money into private-sector projects. R & D funding thus became attractive to successive administrations because it was an area where the state could dominate the debate. The “political function of the science policy apparatus” has generally been interpreted as a strategic government tool with which officials can rescue a measure of coherence over an otherwise disparate and fractious arena of public policy.54
The emphasis on R & D became particularly compelling for U.S. planners and politicians because energy research and development did not encroach on established private interests yet could be used to insinuate a measure of government control over energy investments. In a factious polity, R & D funding generated few opponents; it could be understood as a public good. One analyst notes: “Energy R & D is expensive, but not enough so to hurt the average taxpayer noticeably when it is financed through the massive Federal budget. And who can oppose research on new energy sources? . . . Nor does R & D by the Government necessarily mean eventual control of the technology that results by the Government or other insensitive institutions. Thus it has not been politically difficult for Congress to be generously supportive of virtually every valid energy R & D initiative, and some of less demonstrated validity.”55
At the same time the actual allocation of research funds tends to be reserved for administrative specialists, allowing state officials a measure of discretion with which to set priorities. In this way R & D spending is particularly attractive for an administratively weak state. Because it implies funding for prospective industries, not for established producers, it allows greater state direction without directly confronting private investment decision making. Department of Energy officials have indicated that research investment funding tended to be directed into parts of the energy industry that traditionally underinvested. For example, government specialists favored projects in coal, such as coal gasification research, because the industry tended to be less developed technologically. Indeed, this logic was foreshadowed by ERDA’s administrator, Seamans, at his confirmation hearings. “In the coal industry today . . . there is very limited research and development capability and I am not going to blame any of those who were operating these coal companies—but the truth of the matter is they have not brought along the science and the technology in anything like the imaginative way that the oil companies have in their exploration.”56 Government planners sought out similar suboptimal patterns of investment by private industry.57 But this logic—with government planners finding their “comparative advantage” in relation to industry—also held for relations within government. Because actual funding targets tended to be technical issues, the administrative planners were given opportunities in research and technology to exercise an influence disproportionate to their actual standing in the policy process. In responding to energy challenges, as a consequence, there emerged a pattern of fiscal initiatives which is understandable in terms of a larger set of institutional relations and capacities.
1“Energy Research and Development—Problems and Prospects,” Committee Print prepared for the U.S. Senate, Committee on Interior and Insular Affairs, 93d Cong., 1st sess., p.47.
2Ibid., p. 48.
3U.S. Executive Office of the President, Office of Science and Technology, Energy R & D and National Progress, Prepared for the Interdepartmental Energy Study by the Energy Study Group under the direction of Ali Bulent Cambel (Washington, D.C.: GPO, June 5, 1964), pp. xviii–xix.
4Ibid., pp. xviii–xxi.
5See National Science Foundation, Summary Report, The U.S. Energy Problem, prepared by the Inter Technology Corporation (Washington, D.C., November 1971).
6“Science and Technology Policymaking—A Proposal” (Washington, D.C.: National Academy of Sciences, 1973).
7“Energy Research and Development,” Hearings before the Subcommittee on Science, Research and Development of the Committee on Science and Astronautics, U.S. House, 92d Cong., 2d sess., May 1972, p. 299.
8Ibid., pp. 300, 5.
9National Science Foundation, National Science Board, “The Role of Engineers and Scientists in a National Policy for Technology” (Washington, D.C.: GPO, 1972).
10“Toward a Science Policy for the United States,” Report of the Subcommittee on Science, Research, and Development to the Committee on Science and Astronautics, U.S. House, 91st Cong., 2d sess., October 15, 1970.
11 “Energy Research and Development,” Report of the Task Force on Energy of the Subcommittee on Science, Research, and Development of the Committee on Science and Astronautics, U.S. House, 92d Cong., 2d sess., December 1972, pp. 3–5.
12“Federal Policy, Plans, and Organization for Science and Technology,” Hearings before the Committee on Science and Astronautics, U.S. House, 93d Cong., 1st and 2d sess., Part I, July 1973; Part II, June–July 1974.
13See, e.g., “Energy Research and Development—An Overview of Our National Effort,” Hearings before the Subcommittee on Energy of the Committee on Science and Astronautics, U.S. House, 93d Cong., 1st sess., May 15, 1973. In this session National Science Foundation officials were questioned concerning funding and commitments.
14“Authorization for a Study of National Fuels and Energy Policy,” Congressional Record, May 3, 1971, S13227–13230.
15See Neil De Marchi, “The Ford Administration: Energy as a Political Good,” in Craufurd D. Goodwin, ed., Energy Policy in Perspective (Washington, D.C.: Brookings, 1981), pp. 489–90.
16“Message to the Congress on a Program to Insure an Adequate Supply of Clean Energy in the Future,” June 4, 1971, rpt. in “Presidential Energy Statements,” Committee on Interior and Insular Affairs, U.S. Senate (Washington, D.C., 1973), p. 3.
17Ibid., p. 11.
18State of the Union message, January 22, 1971, in Weekly Compilation of Presidential Documents, vol. 7, January 25, 1971, pp. 94–95. The proposals were transmitted to Congress on March 25, 1971. Quotation from Papers Relating to the President’s Departmental Reorganization Program: A Reference Compilation (Washington, D.C., March 1971), p. 170.
19“Science, Technology, and the Economy,” Hearings before the Subcommittee on Science, Research, and Development of the Committee on Science and Astronautics, U.S. House, 92d Cong., 2d sess., April 11, 1972, p. 12.
20“Statement Announcing Additional Energy Policy Measures, June 29, 1973,” rpt. in “Presidential Energy Statements,” Committee on Interior and Insular Affairs, U.S. Senate, 1973, pp. 52–53.
21Ibid., pp. 57–58.
22“Message to the Congress, April 18, 1973,” in ibid., p. 26. During 1972 and early 1973 analysis and coordination of energy R&D policy came from the Office of Science and Technology (before it was abolished), assisted by the Federal Council for Science and Technology. “Energy Research and Development—Problems and Prospects,” Committee on Interior and Insular Affairs, U.S. Senate, 1973, p. 47.
23Neil de Marchi, “Energy Policy under Nixon: Mainly Putting Out Fires,” in Goodwin, Energy Policy in Perspective, p. 412.
24National Science Board, Science Indicators 1980 (Washington, D.C.: GPO, 1981), p. 10.
25Interview, Department of Energy research official, March 14, 1983.
26“Federal Nonnudear Energy Research and Development Act of 1974,” Public Law 93–577, 93d Cong., December 31, 1974, sec. 2(c).
27Tom Alexander, “ERDA’s Job Is to Throw Money at the Energy Crisis,” Fortune, July 1976, p. 153.
28ERDA 48, A National Plan for Energy Research, Development and Demonstration, 2 vols., June 28, 1975. This original plan was revised and submitted to Congress in early 1976 as ERDA 76–1, A National Plan for Energy Research, Development and Demonstration: Creating Energy Choices for the Future, 2 vols., April 15, 1976.
29Department of Energy, Historical Division, “History of the Energy Research and Development Administration” (Washington, D.C., March 1982).
30On the general plan see Federal Nonnuclear Energy R & D Act of 1974, Public Law 93–577; the administrative authority for this planning responsibility came from the Energy Reorganization Act of 1974, Public Law 93–438. The law mandated that the plan be updated annually. On short-term priorities see ERDA 76–1, 1:25.
31ERDA 76–1, 1:35–68.
32Department of Energy, Historical Division, “A History of the Energy Research and Development Administration,” March 1982, p. 3.
33ERDA 76–1, 1:81.
34ERDA 76–1, pp. 82–84; quotation at p. 13. See also “A Review of the Energy Research and Development Administration’s National Energy Plan,” prepared for the Subcommittee on Energy Research and Water Resources, Committee on Interior and Insular Affairs, U.S. Senate, 94th Cong., 2d sess., December 1976.
35Alexander, “ERDA’s Job,” p. 162.
36“Nomination of Dr. Robert C. Seamans, Jr. to Be Administrator, Energy Research and Development Administration,” Joint Hearings before the Joint Committee on Atomic Energy and the Committee on Interior and Insular Affairs, U.S. Senate, 93d Cong., 2d sess., December 11, 1974, pp. 8, 7. The Department of Energy’s Historical Office notes: “Seamans believed that a sixty-year lead time was no longer possible as in past energy transactions, and that in the current situation a transition to new forms of energy would have to be made in half the time and in a far more complex world.” “A History of the Energy Research and Development Administration,” p. 4.
37See DOE, “History of the Energy Research and Development Administration,” pp. 4–5.
38Letter reprinted in “A Review of the Energy Research and Development Administration’s National Energy Plan,” prepared for the Subcommittee on Energy Research and Water Resources, Committee on Interior and Insular Affairs, U.S. Senate, 94th Cong., 2d sess., December 1976, pp. 27, 32.
39DOE, “History of the Energy Research and Development Administration,” p. 14.
40Robert C. Seamans, Jr., and Fredrick I. Ordway, “The Apollo Tradition: An Object Lesson for the Management of Large-scale Technological Endeavors,” Interdisciplinary Science Reviews 2 (December 1977), 271.
41See Hugh Heclo, “OMB and the Presidency: The Problem of Neutral Competence,” Public Interest 38 (Winter 1975), 80–98, and Larry Berman, The Office of Management and Budget and the Presidency, 1921–1979 (Princeton: Princeton University Press, 1979). Quotation from David Dickerson and David Noble, “By Force of Reason: The Politics of Science and Technology Policy,” in Tom Ferguson and Joel Rogers, eds., The Hidden Election (New York: Pantheon, 1981), p. 267.
42Deborah Shapley and Rustom Roy, Lost at the Frontier: U.S. Science and Technology Policy Adrift (Washington, D.C.: Brookings, 1985), p. 55.
43Office of Management and Budget, Issues ‘78: Perspectives on Fiscal Year 1978 Budget (Washington, D.C.: GPO, 1977), pp. 81–110. See also Claude E. Barfield, Science Policy from Ford to Reagan: Change and Continuity (Washington, D.C.: American Enterprise Institute, 1983).
44Figures from Barfield, Science Policy, p. 20.
45Quoted in Barfield, Science Policy, p. 21.
46“1979 Department of Energy Authorization,” Hearings before the Committee on Science and Technology, U.S. House, 95th Cong., 2d sess., January 25, 1978, p. 10, and January 24, 1978, p. 35.
47“1980 Department of Energy Authorization,” Hearings before the Committee on Science and Technology, U.S. House, 96th Cong., 1st sess., February 8, 1979, p. 43, and “1979 Department of Energy Authorization,” January 24, 1978, p. 29.
48“1980 Department of Energy Authorization,” February 8, 1979, p. 43.
49Congressional Quarterly, May 15, 1976, p. 1189; on the general point of political and analytic processes in science and technology policy see W. Henry Lambright and Albert H. Teich, “Policy Innovation in Federal R&D: The Case of Energy,” Public Administration Review 30 (March/April 1979), 140–47.
50Alexander, “ERDA’s Job.”
51“1979 Department of Energy Authorization,” January 25, 1978, p. 38.
52James Everett Katz, Presidential Politics and Science Policy (New York: Praeger, 1978), p. 233; see also Barfield, Science Policy.
53“Science, Technology, and the Economy,” Hearings before the Subcommittee on Science, Research and Development of the Committee on Science and Astronautics, U.S. House, 92d Cong., 2d sess., April 11, 1972, p. 12.
54See David Dickerson and David Noble, “By Force of Reason: The Politics of Science and Technology Policy,” in Ferguson and Rogers, Hidden Election, p. 264.
55See J. Herbert Holloman and Michael Grenon, Energy Research and Development, A Report to the Energy Policy Project of the Ford Foundation (Cambridge, Mass.: Ballinger, 1975), pp. 16–18. The analyst quoted is John W. Jimison, Congressional Research Service, “Energy—Is There a Policy to Fit the Crisis?” Prepared for the use of the Subcommittee on Energy and Power, Committee on Interstate and Foreign Commerce, U.S. House, September 1980.
56“Nomination of Dr. Robert C. Seamans, Jr., to Be Administrator, Energy Research and Development Administration,” Joint Hearings before the Joint Committee on Atomic Energy and the Committee on Interior and Insular Affairs, U.S. Senate, 93d Cong., 2d sess., December 11, 1974, p. 73.
57Interviews, Department of Energy, March 1983.