State Department unveils new super-office: economics, energy, and the environment

The State Department formally rolled out a new plan today for how it will tackle economic, energy, and environmental issues — by combining them all into one bureaucratic structure.

Undersecretary Bob Hormats is the leader of the newly expanded "E" team in Foggy Bottom, making him the undersecretary for economic growth, energy, and the environment. Before today, Hormats was the undersecretary for economic, energy and agricultural affairs. The change moves several offices under Hormats’ umbrella, and also places him in charge of two new offices that never existed before.

Hormats is now in charge of three bureaus led by assistant secretaries and their teams: the Bureau of Oceans and International Environmental and Scientific Affairs (OES), led by Assistant Secretary Kerri-Ann Jones, the Bureau of Economic and Business Affairs (EB), led by Assistant Secretary Jose Fernandez, and the brand new Bureau of Energy Resources (ENR), led by State’s Coordinator for International Energy Carlos Pascual, pending the confirmation of an assistant secretary. 

The new "E" family will also, for the first time, include the Office of the Science and Technology Advisor, led by E. William Colglazier, and a new Office of the Chief Economist, which will be led by someone who hasn’t been hired yet – interviews are ongoing.

Hormats could have as many as 150 to 200 new people under his leadership, but the changes are basically cost neutral. The idea is to combine these three bureaus into a cohesive team, which can take advantage of the increasing overlap between energy policy, environmental policy, and the economy.

"If this was only moving the bureaucratic boxes around it wouldn’t be worth the effort," Hormats told The Cable in an interview. "This really responds to Secretary Clinton’s challenge to break down silos and to create greater efficiencies within the State Department and focus attention in developing economic statecraft."

The changes in the State Department’s bureaucracy were spelled out in the Quadrennial Diplomacy and Development Review, which was released last year, but also fits perfectly into Secretary of State Hillary Clinton‘s new favorite initiative, "Economic Statecraft," as laid out in her speech in October.

"America’s economic strength and our global leadership are a package deal," Clinton said. "A strong economy has been a quiet pillar of American power in the world. It gives us the leverage we need to exert influence and advance our interests. It gives other countries confidence in our leadership and a greater stake in partnering with us."                               

Hormats said the State Department was currently evaluating several ways in which the new offices could work together. For example, the United States could use economic strategies to promote access for U.S. energy technology companies in Africa, he said. The environmental experts could also chip in to make sure development in the African energy sector is ecologically sound.

Another initiative State is thinking about, Hormats said, is an effort to strengthen science and technology cooperation with the European Union in areas such as nanotechnology, smart grids, and electric cars. The idea is to play a role in setting industry-wide standards for new green technologies, helping U.S. businesses establish an international foothold in these emerging industries.

The conventional wisdom is that environmental and business objectives are at odds with each other, but Hormats is aiming to disprove that. He made the case that environmentally conscious companies are more energy efficient, and therefore more economically successful. President Barack Obama‘s Energy and Climate Partnership of the Americas is an existing example of this type of thinking, and a project that will be managed in his shop.

Hormats has also been meeting over several months with environmental groups to assure them that their concerns will not be made subservient to the overwhelming drive to seek economic gains and greater energy independence.

"The last thing we want to do is make the environmental bureau a subsidiary of the economic or energy bureaus," Hormats said. "The goal is to find synergies among co-equals. That’s the key."