On December 17, I announced my intention to propose a reorganization of Federal energy activities. The legislation I am submitting today reflects this Administration's commitment to the principle that the best way to meet the Nation's energy needs is to increase reliance on market decisions.

By transferring the current responsibilities of the Department of Energy to more appropriate agencies we can preserve and, in important ways, strengthen essential government-related energy activities. The proposed realignment of energy functions will more accurately reflect the Federal Government's essential role, which is:

supporting long-term, high-risk, potentially high payoff basic research on energy technologies while relying, whenever possible, on the private sector to bring new technologies to the marketplace;

protecting the public interest by assuring that the economy is protected against energy supply disruptions through maintenance of a strategic petroleum reserve contingency plan;

maintaining a set of policies in the energy sector consistent with overall economic and foreign policy;

performing balanced and effective management of our energy resources and administering utility regulation required by law;

supporting national defense needs through civilian-controlled research, design, production, and testing in the field of nuclear weapons.

When the Department of Energy was formed, some of its functions, such as collection of energy information, selected international nuclear regulatory responsibilities, and energy preparedness planning, technology development, and energy-related business analysis paralleled activities conducted by the Department of Commerce for non-energy sectors of the economy. Combining these activities of the Departments of Commerce and Energy recognizes that the development of an assured energy supply is one of the most important domestic and international business activities in the United States today. Integrating these responsibilities in the Commerce Department will strengthen its ability to develop policy, evaluate trends and requirements, and be of service to industry in meeting our energy requirements.

The nuclear energy and defense-related nuclear programs of DOE will also be transferred to Commerce. They will be kept intact in Commerce and closely associated with all energy research and development activities. The Secretaries of Commerce and Defense are working together to make sure that the revised structure will continue to meet the requirements of national security and strengthen the relationship where possible.

The reorganization I have proposed will preserve the valuable and time tested research and development work environment which has been so instrumental in achieving the objectives of long-range energy development. For example, integrated and comprehensive use of scarce technological management resources and multi-purpose national laboratories will continue with little or no disruption to key programs.

The other transfers are no less important to the sound management of the Federal Government's energy responsibilities.

The transfer to the Department of the Interior of programs closely related to energy resource management such as the Power Marketing Administrations and coal mining research and development will consolidate energy resource mangement in the Department responsible for stewardship, preservation, and development of much of the Nation's public domain natural resources.

The transfer to the Department of Justice of residual enforcement responsibilities under the Emergency Petroleum Allocation Act appropriately reflects that agency's law enforcement role and expertise in handling investigations and conducting litigation.

The establishment of the Federal Energy Regulatory Commission as a separate and fully independent agency reflects Congressional intent for regulatory independence.

The Department of Energy was created at a time when serious problems were said to require government-designed solutions imposed by executive agencies especially created to deal with them. The results of this approach are clear. Ill-conceived regulations have impeded development of new energy sources, discouraged conservation, and distorted distribution. Subsidy programs created artificial demand for energy technologies that could not stand the market test. The drain on Federal resources grew almost beyond control.

I urge the Congress to enact promptly the Federal Energy Reorganization Act of 1982. Its enactment will reverse the recent trend of establishing huge, unwieldly governmental institutions to address problems of the sort which can best be met by permitting America's citizens and businesses to act wisely and responsibly in their own economic self interest.

Ronald Reagan

The White House,

May 24, 1982.