The Fuse

Mack McLarty, Former White House Chief of Staff, on Bipartisan Energy Policy and Alternative Fuels

by Leslie Hayward | June 25, 2015

Mack McLarty has a distinguished record of business leadership and public service, including serving as President Bill Clinton’s White House Chief of Staff, Counselor to the President, and Special Envoy for the Americas. Previously, Mr. McLarty was Chairman and CEO of Arkla, a Fortune 500 natural gas company.  He currently serves as Chairman of McLarty Associates and as Chairman of The McLarty Companies, a fourth generation family transportation business that has operated throughout China, the United States, Brazil, and Mexico.

Hayward: As we enter an election year in what seems like a bitterly partisan period, are there any issues related to energy policy that could bring Republicans and Democrats together? Where do you see opportunities for compromise?

McLarty: Energy policy is a commanding focus of any White House, whether it’s occupied by a Democrat or Republican. Energy is a critical area of national security that also has an impact on consumer spending, the overall economy and the environment. There’s room for consensus building, whether in support of U.S. foreign policy or to generate jobs in the United States. The revolutionary growth of the North American energy platform in the last decade is a huge deal. Moving towards energy independence will strengthen us at home and overseas. It creates new opportunities for cooperation on the environment, but also new challenges. I think that policy in Washington is still catching up to rapid and far-reaching changes in the facts on the ground. We need to strike the right balance to make the most of these largely positive developments.

You began your career in the energy business in the 1970’s, served in economic and national security roles in the 1990’s, and have continued in a variety of business and consulting areas that relate to energy. What have you seen as the constants, and what have been the transformative developments in energy security over this 40 year span?

The most important constant has been the central role of energy in our national security and economic vitality. Energy clearly has a large impact on the strategic importance to the US and Europe of the Middle East during the last 60 years–though that’s not the only factor. What seems significantly new today is the incredible pace of change that is literally transforming the global energy map. Energy and technology have always been linked, so it shouldn’t be a surprise that a period of rapid technological innovation impacts energy. But today the scale is huge, and amplified by globalization. MA advises a number of firms, where we see energy as a crosscutting issue that influences the fates of nations, the health of companies and touches individual pocketbooks.

As Chief of Staff, can you share some examples of how oil dependence played into the White House’s policy calculations? Can you recall any specific instances of a time when concern over oil flows or security challenged our nation’s ability to accomplish a foreign policy objective?

Every administration is entrusted with protecting the security and well-being of the American people, and oil supplies are a part of that.

Energy is a cross-cutting issue for any White House. There are so many foreign policy and domestic issues where it plays some role, sometimes a big one. Every administration is entrusted with protecting the security and well-being of the American people, and oil supplies are a part of that. In the Clinton administration, energy was one of several factors that shaped our engagement in the Middle East and elsewhere. It also played a role in our vigorous case for the North American Free Trade Agreement, which solidified cooperation among three energy giants, in Canada, Mexico and the United States. We are reaping the benefits of that today.

As president of McLarty Companies, a network of car dealerships, do you have any insights on consumer interest in alternative fuel vehicles? Why are American drivers so committed to large personal vehicles?

Larger vehicles are a part of American culture, part of who we are.

The technological advances in alternative fuel vehicles are encouraging and intriguing. Both consumers and manufacturers are clearly interested in where this technology leads. It’s important to stay realistic, and not expect too much from vehicles that are priced way above the market. It’s worth recognizing also that real and tangible gains that have come from increases in CAFE standards. These have been a benefit all around. As for larger vehicles, they’re a part of American culture, part of who we are. They fit with how some people want to live. Especially in the West and South, but not only there, there’s a love affair with trucks and SUVs and that’s reflected in sales. At the same time, in many of these vehicles there have been improvements in fuel efficiency and lighter weight construction. It makes sense to support mass transportation in urban areas and alternative fuels consistent with the demands of the marketplace. It remains to see what kind of inroads these vehicles might have. It may be the case that they first play a larger role overseas, such as in China.