State Power Without State Capacity

If there has been one dominant theme related to energy policy from the early months of the second Trump administration, it has been the Administration’s determination to break things. The administration has torn up CEQ’s long-standing guidance on federal NEPA review. It has asserted executive power over independent federal agencies, issuing sweeping directives to the Nuclear Regulatory Commission and firing a sitting commissioner. Its Department of Interior blessed a new uranium mine in Utah after a scant two week review. The administration has directed the Departments of Energy and Defense to license and site nuclear reactors and invoked the Defense Production Act to allow reactors licensed by DOE and DOD to sell power to data centers it has designated as “defense critical.”

At the same time, it has slashed staffing and budgets at many of the agencies tasked with implementing these sweeping new diktats. The administration has reduced staff at the Department of Energy’s Loan Program Office and its Office of Nuclear Energy. The executive leadership at the NRC has been forced out. The Administration’s NRC executive order has mandated a substantial staff reduction and reorganization at a time when the Administration has not only directed the agency to expeditiously license new reactors but undertake a sweeping 9 month review of all of the agency's regulations.

It remains an open question what sorts of administrative and regulatory procedures and rules will replace the technocratic edifices that are being torn down. Will these procedural replacements hold up under judicial review? Will the administration heed judicial directives in the event that they don’t? Will the new rules and administrative procedures work any better than the old ones?

In all of these regards, we are embarking on a series of natural experiments that will test long-standing claims about technocracy, regulation, and innovation from across the political spectrum. What sorts of state capacity are necessary to support innovation and the delivery of critical public goods such as clean, abundant energy? How necessary are the reams of regulations built up over decades to assure that energy technologies and infrastructure are safe and don’t exact a deep toll on the environment? Will dramatically simplifying the rules and regulations that govern these activities allow for federal agencies to more expeditiously approve critical projects and technologies with radically reduced staffing?

For both defenders of technocratic competence and capacity and skeptics, the coming years will be a test of whether an administration hell bent on radically reducing the regulatory and bureaucratic obstacles to deploying energy technology and infrastructure can deliver the goods. Can it produce rules and procedures that are simple and navigable, in a timely fashion, and in a way that will withstand judicial scrutiny? Can the resulting regulatory and governance framework deliver results with vastly less manpower? Will the combination of fewer rules, fewer regulations, and less enforcement unleash a future of cheap, abundant, and, perhaps, clean energy or will it have catastrophic results for public health and the environment?

If there has been a metaphor for the break things approach that the Trump Administration is taking to the federal administrative state, it was Elon Musk’s reboot of Twitter, now X. Musk promised big improvements and laid off 80% of the staff in a matter of months. But most people hardly noticed. While the enshittification of the platform continued apace, and arguably accelerated, the dramatic reductions didn’t appreciably diminish the basic functionality of the platform.

Musk’s short tenure at DOGE is now over. Yet the idea lives on. A radical downsizing of the federal regulatory bureaucracy is well underway. But the things that could go wrong are far more consequential than they are on a social media platform. Planes crashing and X crashing are not the same thing. Advocates of radical deregulation and downsizing should not be cavalier about these risks. I have long argued that worst case nuclear accidents, for instance, are far less catastrophic than both conventional wisdom and America’s nuclear regulator have long assumed. But even if one sees meltdowns and other serious nuclear accidents as garden variety industrial accidents, and not existential events, a rash of meltdowns and other releases of radioactive material would deeply challenge the nuclear regulatory reform project. The same is true across many other technologies and sectors.

Less dramatically, many technocratic minded reformers warn of the unintended consequences of slash and burn reform, that taking a chainsaw to long established regulatory frameworks, administrative processes, and technocratic capacity may end up creating more regulatory uncertainty than it resolves. It is hard to parse to what degree these concerns, often coming from those who have worked inside the bureaucratic beast, reflect underlying assumptions about the scope of reform and what the federal judiciary and the broader political climate will allow. The guardrails or deep state, depending on one’s perspective, limited the scope of reform, norm busting, and application of executive power during the first Trump administration. It is less clear that this will be the case in the second.

In all likelihood, the result of all this breaking of things will be more muddle than either triumph or catastrophe. Significant chunks of the federal bureaucracy may disappear without being much missed. Elsewhere, ill-conceived revisions, rescissions, and staffing reductions may have significant impacts on the ability of the federal government to deliver public goods that this Administration is deeply committed to.

Whatever happens, we are much closer to finding out than we were three or four months ago. The window for rapid fire, splashy executive orders is fast coming to a close. The next phase will prove far more consequential and determinative of the possibilities of deep reform to the federal administrative state. The arsonists are not only in the building but seated in the executive offices, at the Departments of Energy and Interior, at the EPA, and at the NRC and FERC. Breaking things is the easy part. But after that is done, the Trump administration and its allies will need to clear a path through all that rubble to deliver cheap nuclear energy, reliable electricity, and a well diversified energy economy. We’ll find out soon enough whether they are capable of doing so.