Center Lost Federal Funds After Report

The head of the Kennedy School's Energy and Environmental Policy Center (EEPC) said yesterday that the Department of Energy (DOE) stopped funding the center after it produced a report last fall highly critical of the Reagan Administration's energy policy.

EEPC Director Irwin M. Stelzer said that while the DOE had been the center's largest donor over the past six years, giving between $100,000 and $200,000 a year, it cut off all support after the center issued a report last September that challenged an earlier DOE study of energy security issues.

"The DOE failed to renew our grant after we produced a report highly critical of the Reagan Administration's policies, and I would be inclined to say that it was strange this happened at exactly the same time," Stelzer said.

DOE spokesman Philip Keif said he had been unable to confirm that the DOE had given any money to the K-School center other than a $25,000 grant in 1985 for natural gas research, but said "if they were turned down, it was not for political reasons."

The EEPC report, called "Energy Security Revisited," advocated a $5 a barrel oil import fee and said the conclusions of a 1987 Energy Department study were politically biased. Written by Bradshaw Professor of Public Policy William W. Hogan and EEPC Assistant Director Bijan Mossavar-Rahmani, the report said the DOE miscalculated by $200 billion the effects an oil import fee would have on the economy.


Observers questioned the objectivity of the approximately $75,000 EEPC study at the time of its release because it was partially funded by independent oil companies who have a strong business stake in backing an oil import fee. (see related story)

Stelzer also said Union Carbide, which had given $15,000 annually to the center for the past few years, cut ties to the center following the study's release. Union Carbide, along with other multinational oil and chemical companies and the Reagan Administration opposes an oil import fee.

Clyde H. Greenert, Union Carbide's director of public issues, said yesterday that his company had stopped funding the center because it disagreed with the study. "We decided to stop funding for a variety of reasons, certainly including the fact that [the EEPC] is a proponent of something that would be disastrous for our industry," Greenert said. "Because of this, we decided that it might not be the best place to put our money."

Department of Energy

EEPC officials said that the Energy Department, which they said has been strongly partisan under Reagan, cut the center's funding because the EEPC report directly challenged the DOE's findings.

Hogan, who long advocated an oil-import tariffbefore releasing the "Energy Security Revisited"report last September, said yesterday that whilehe had no documentation to prove that the center'sfunding was withdrawn for political reasons, thetiming of the funding withdrawal seemed toindicate a retaliatory move on the EnergyDepartment's part.

Hogan said that the DOE announced in Octoberthat it was withdrawing its money from the center.Hogan said he then spoke with then-DeputySecretary of Energy William Martin, whoco-authored the opposing DOE study, and thatMartin said he would look into the problem.

Hogan added that DOE representatives appear tobe avoiding debate with him on the study'sfindings. He said that seven times since thereport's release last September he had beeninvited to debate DOE officials around thecountry, but that the Energy Department expertshad failed to appear each time.

Stelzer and other EEPC officials say the centerhas still not received any funding from the DOEsince the discussion with Martin last fall. Theysay the DOE has told them that the grants the EEPChad been receiving for the past six years stoppedbecause of a change in the procurement process.

But Stelzer was skeptical of that explanation."There are two ways of looking at it--one is thatthey are doing it because there is a newmechanical way of doing [the grants]," Stelzersaid. "But the other is that it was a politicaldecision, and we had heard they were very upsetwith the study."

Mossavar-Rahmani, who co-wrote the study and ison leave from the Kennedy School to serve aspresident of Apache oil company, one of thelargest independent oil producers in the U.S. andan advocate of an oil import fee, also said theDOE withdrew funding from the center for politicalreasons.

"I knew we were jeopardizing $150,000 in DOEsupport by releasing the report," Mossavar-Rahmanisaid. "The question we had to ask was `Did we wantto risk $150,000 in government funding?' and theanswer was `absolutely yes.'"

Stelzer, who said the DOE during the Reaganyears is a "very partisan, vindictive group," saidthat the withdrawal of funding had not hamperedthe center's ability to do research. He added,though, that such disputes over funding arisebecause the center has no endowment and must seekall of its funding from sources outside theKennedy School.

According to EEPC officials, the Venezuelangovernment continued to give money to the centerafter the report's release even though it stronglydisagreed with the study's findings and suggestedthat it was biased