Trump's Energy Pick to Face Senate Questions

Rick Perry, President-elect Donald Trump's pick to run the Energy Department, will face questioning by senators on Thursday on creating jobs in the industry and bolstering U.S. energy security - but also about an earlier proposal to abolish the agency.

Trump, who takes office at noon on Friday, has championed increased production of oil, gas and coal. In addition to market forces, coal has suffered under President Barack Obama's executive actions to curb climate change.

Trump sees Perry, 66, who was governor of Texas from 2000 to 2015, making him the longest-serving governor of the oil-producing state, as a person who can usher in energy jobs.

The energy committee senators - many of whom represent fossil fuel-producing states including Alaska, Wyoming and West Virginia - will likely ask Perry at the confirmation hearing how he plans to boost drilling, add wind and solar power capacity, and increase exports of natural gas to countries looking to reduce their dependence on Russia, a particularly important path to growth because demand for natural gas in the United States is relatively stagnate.

If confirmed, Perry, who made bids for the Republican presidential nomination in both 2016 and 2012, could face market and regulatory forces that could enhance growth for the oil industry but put up hurdles for the natural gas industry.

The current rise in oil prices means that domestic crude output could increase under Perry, even if he takes little direct action to boost drilling.

But swiftly increasing exports of natural gas, which is transported as liquefied natural gas, or LNG, could prove tricky.

Before the Energy Department gets to approve applications for exports of LNG, the Federal Energy Regulatory Commission must greenlight lengthy environmental reviews. In addition, many LNG projects lack adequate financial backing.

"Even if Perry speeds up the DOE, the market remains the final arbiter," said Kevin Book, an energy policy analyst at ClearView Energy Partners. Lengthy environmental reviews may remain in place as LNG sponsors want their projects to withstand legal challenges from the green movement, Book said.

Democrats plan to ask Perry, a self-professed climate skeptic, about the future of climate science at the department's lab network that sprawls across the country.

A questionnaire the Trump transition team sent to the department in December demanded names and publications of employees who had worked on climate issues. After an uproar by critics who said it amounted to a witch hunt, the team disavowed the survey.

The department is responsible for revamping the nation's aging nuclear weapons, many of which are decades old. More than half of the department's $32.5 billion budget goes to maintaining the U.S. nuclear weapons arsenal and cleaning up the country's nuclear waste legacy from the Cold War. Democrats also plan to ask Perry about how he will protect the electricity grid from cyber attacks, an aide to a senator said.

Perry vowed to abolish the department during his 2012 bid for the Republican presidential nomination. In a debate in 2011 he struggled to remember that the Energy Department was one three agencies he said he wanted to get rid of.

Department leadership under Perry, who has a bachelor's degree in animal science from Texas A&M, would represent a pivot from being run by learned scientists to a person who is known for close ties to energy interests. Current Energy Secretary Ernest Moniz is a nuclear physicist who led technical negotiations in the 2015 Iran nuclear deal, while the previous head, Steven Chu, is a Nobel Prize-winning physicist with a background in lab work and management.

Perry resigned from the board of directors of Energy Transfer Partners LP, the company building the Dakota Access Pipeline opposed by Native Americans and environmentalists. He has said that, if confirmed, he will divest his interests in two pipeline companies.

Reporting by Timothy Gardner