Dec. 11 (Bloomberg) -- Barack Obama’s choice of a Clinton administration veteran to head a new White House energy office and a Nobel Prize-winning physicist as energy secretary will redefine the way policy is made and applied in the U.S.

Whether it also helps advance the president-elect’s agenda of boosting the economy and reducing pollution may depend on how well the two individuals get along. Carol Browner, 52, will head the national energy council, and Steven Chu, 60, will be Obama’s energy secretary, a person close to the transition said.

“If the chemistry is right between Carol Browner and Steve Chu then you can take what otherwise might be some creative tension and turn it into a positive,” said Dan Arvizu, director of the National Renewable Energy Laboratory in Golden, Colorado. “If they are not in alignment philosophically in terms of what they think ought to be done, then you’ve got an issue.”

At stake is the success of Obama’s plan to invest $150 billion in alternative energy technologies that will create jobs and cut emissions of gases linked to global warming. Chu, who won the 1997 Nobel Prize in Physics, will help decide how to spend the money. Browner, who led the Environmental Protection Agency under Bill Clinton, will coordinate the efforts of at least 13 federal agencies and commissions.

Browner is likely to focus on big-picture energy issues sweeping across all federal agencies, while Chu will be responsible for making sure the Energy Department develops the technologies needed to allow solar, wind and biomass to compete with oil and coal, said Arvizu and other analysts.

‘Real Action’

“The real action is going to be the person directing this White House council, that’s clear,” said James Lucier, managing director of Capital Alpha Partners LLC in Washington.

For Chu and the head of the Environmental Protection Agency, “it means that you will be more focused on dealing with congressional committees and more focused on managerial minutiae than making sweeping decisions,” Lucier said.

Mike Lubell, a physics professor at the City College of New York who has known Chu for 30 years, said having a scientist as an energy secretary will be vital in helping remove obstacles to achieving Obama’s goals. “Almost anything you look at in the energy arena today, the solutions are not cost competitive,” Lubell said.

In particular, mysteries regarding how to store energy when the wind is not blowing or the sun is not shining have to be unlocked, Lubell said. Battery technology has to be improved, carbon sequestration has to be developed and cellulosic ethanol has to be made more affordable.

“These are big science and technology problems,” he said.

Nuclear Loans

Chu, who heads the Lawrence Berkeley National Laboratory in California, also will be charged with doling out $38.5 billion in loan guarantees for new nuclear and other power plants that would cut emissions of so-called greenhouse gases.

The energy secretary traditionally exercises control over the Strategic Petroleum Reserve and is responsible for cleaning up old nuclear weapons assembly sites and ensuring adequate oil supplies.

“He’s going to continue to keep an international portfolio, but the message this sends is we are going to have a science-driven, fact-driven energy policy,” said Chris Van Hollen, a U.S. representative from Maryland and chairman of the Democratic Congressional Campaign Committee.

Chu in speeches has focused on the need for tackling global warming. In those addresses he has voiced concerns about the climate impacts of coal, suggesting he will seek alternatives to the source for 50 percent of U.S. electricity production.

Energy Biosciences

In August, he signed on to a report by 10 national laboratories advocating nuclear energy as having an essential role in a sustainable energy future.

Chu also helped form the Energy Biosciences Institute with BP Plc, which is a lab focused on next-generation biofuels like cellulosic ethanol. He has cautioned against the environmental impact of ethanol, whether it comes from corn or sugar cane, saying it does not reduce emissions of greenhouse gases blamed for global warming.

A spokesman for Alaska Senator Lisa Murkowski, who is expected to become the senior Republican on the Senate Energy and Natural Resources Committee next year, said she has concerns about the role of the new so-called “energy czar,” Browner’s role.

Another Layer

Murkowski is “not sure we need another level of bureaucracy,” said Robert Dillon, the spokesman.

Jack Gerard, president of the American Petroleum Institute, which represents U.S. oil companies, said that if the White House energy leader isn’t allowed to expedite processes that involve multiple agencies, “then all you’ve done is added another layer of decision-making which slows the process.”

Previous presidents have relied on White House councils to advise them on important issues. The National Security Council was created in 1947 to integrate foreign and domestic defense policies, and the National Economic Council was formed in 1993 to coordinate response to economic issues.

The White House Council on Environmental Quality, established by 1969 legislation, currently handles coordination of federal environmental efforts.

“Put the environment czar alongside the auto czar next to the technology czar cattycorner to the copyright czar, and before you know it, these guys are going to have more czars over there than the Romanov Dynasty,” said Chris Tucker, a spokesman for the Institute for Energy Research.

It’s unusual for a high-profile policy maker such as Browner to be put in an undefined role while appointing lesser- known people as Cabinet secretaries, said Jeffrey Holmstead, a partner at Bracewell & Giuliani LLP in Washington and a former assistant administrator at the Environmental Protection Agency.

“It will be interesting to see how that works,” he said.

To contact the reporters on this story: Tina Seeley in Washington at tseeley@bloomberg.net; Daniel Whitten in Washington at dwhitten2@bloomberg.net.

Last Updated: December 11, 2008 19:56 EST