January 18, 2013
The imminent departure of Energy Secretary Steven Chu highlights the political struggle President Obama has faced in trying to enact even a portion of the sweeping clean-energy and climate change agenda he envisioned when he ran for the White House in 2008.
Obama tapped the Nobel physicist to lead his fight to stop global warming and transform the nation’s energy economy but the broad climate bill the president hoped would become part of his legacy never made it through Congress and Chu later found himself embroiled in the political controversy over the bankrupt solar company Solyndra.
Several people close to the administration have said Chu was not planning to stay on in a second Obama administration. Bloomberg reported on Thursday that the secretary's departure could be announced as early as next week.
At the time Chu took the helm at the Energy Department, it actually played very small role in shaping energy policy. Its chief purview was to oversee the nation’s nuclear weapons arsenal. Obama's plan was to push a comprehensive energy and climate change bill through Congress, raising $150 billion for clean energy research over a decade. Chu was to oversee a transformation of the department into an international driver of clean energy development. And he did oversee the federal government’s single biggest investment in clean energy in history – a one-time shot of $35 billion from the 2009 stimulus law.
In 2010, the climate change bill died in Congress. And the following year, Chu’s star fell and he and the Energy Department became a political target when the solar company Solyndra, which received $535 million in stimulus funding, went bankrupt and became the subject of an FBI probe. But Chu also won high praise from all quarters for his central role in stopping the disastrous 2010 Gulf of Mexico oil spill. And while the ambitious plan to expand and transform the Energy Department into a juggernaut of clean energy research wasn’t realized, Chu brought in some of the greatest scientific minds of the country to help launch small but cutting-edge new clean energy research and development agencies, which have been hailed as some of the most innovative and important in the nation.
Chu was the first Nobel prize winner to be appointed to a U.S. Cabinet post. When he took office, he was already a star in the scientific community. He came to Washington from University of California, Berkeley, where he was a professor of physics and molecular biology and director of the Energy Department’s Lawrence Berkeley National Laboratory. When the new president declared that tackling global warming was a top priority, and that Chu was the man to take it on, the self-styled nerd was catapulted into a spotlight, and his stardom transcended the worlds of Washington and academia. In June 2009, Rolling Stone published a profile of him entitled “Secretary of Saving the Planet.”
Chu had almost no political experience when he came to Washington – a qualification that, at the beginning, often endeared him to lawmakers. He testified regularly before congressional committees and his warm but wonky style won plaudits even from Republicans, when he launched into enthusiastic explanations about energy and climate science.
When pressed on political questions by the press, Chu would sometimes quip, “I’m a scientist, not a politician!”
Susan Tierney, an assistant energy secretary in the Clinton administration, who worked with the Obama 2008 transition team to help prepare Chu for his new job, recalled the excitement over the new secretary.
“It’s not an accident that a Nobel prize winning scientist was chosen…the president had had a plank of wanting to be very much more scientifically based. Decarbonizing the energy supply was a big scientific goal. That was part of the excitement of bringing someone like him in,” she said.
Later, that lack of political experience would prove a challenge.
Obama’s first signature piece of clean energy legislation was his 2009 economic stimulus law, which injected $800 billion into the ailing economy – including $35 billion to the Energy Department for a massive jump-start in clean energy projects, such as wind, solar, geothermal and energy efficiency installations. The stimulus was both the biggest federal investment in clean energy in U.S. history, and an unprecedented sum for the agency, which typically has an annual budget of only about $28 billion -– of which only about $2 billion per year had previously gone to clean-energy funding.
The Obama administration saw the sum as a down payment on future clean-energy funding that would flow more freely once Congress passed a cap-and-trade law.
The money came with a deadline – it had to be spent in two years. In theory, the cash should have been a dream come true – but in practice, it created a logistical nightmare as the agency struggled to ramp up staff and resources in an area in which it had little expertise.
“It was an immense challenge to get that amount of money out the door in a Department that had never done it,” said Paul Bledsoe, an energy policy consultant and a senior energy official in the Clinton administration. “The agency just was not equipped to do what they were being asked to do.”
Among the most high-profile recipients of the new Energy Department funding was the California solar company Solyndra, which received a $535 million loan guarantee from the stimulus. In August 2011, Solyndra went bankrupt, and the FBI soon opened up an investigation against the company. House Republicans launched a high-profile probe of the Solyndra loan, and White House emails revealed that the administration had asked the Energy Department to hurry the process for approving the Solyndra funds, in order to make the company a poster child for the stimulus. Later, when it became clear that the company was struggling, the Energy Department restructured the loan rather than allowing the company to fail. And Republicans also took aim at the fact that Obama donor George Kaiser is the billionaire behind the George Kaiser Family Foundation, which has a subsidiary that was a major investor in Solyndra. House Republicans hauled Chu on the carpet to question and slam him over the deal, and Americans for Prosperity, the superPAC linked to the oil conglomerate Koch Industries, ran an ad charging, “Wealthy donors with ties to Solyndra give Obama hundreds of thousands of dollars. What does Obama give them in return? Half a billion in taxpayer money to help his friends at Solyndra, a business the White House knew was on the path to bankruptcy.”
To date, investigations of the Solyndra loan have not found evidence that the Energy Department was pressured to approve the loan to benefit political contributors. And the vast majority of the companies that received stimulus funding remained solvent. But the controversy tarnished Chu and the Energy Department –- and also froze future prospects for more federal clean energy funding.
Alternative Energy Lab
Despite the dust-up over Solyndra, Chu’s scientific chops shone at Energy - he won praise for the work he did to begin to transform the Energy Department into a leading clean-energy research and development facility in its own right. Chu used the stimulus money to start a cutting-edge alternative energy lab known as ARPA-E, or Advanced Research Projects Agency-Energy. The lab was modeled after the famous Pentagon DARPA (Defense Advanced Research Projects Agency) lab, a high-risk, high-rewards research program that helped birth technology like the Internet, the microwave, and stealth fighter planes. Today, ARPA-E is leading the way in funding energy research in fields from electrofuels (in which microbes harvested from the ocean absorb hydrogen and carbon dioxide to produce clean-burning oils) to batteries that could allow cars to travel 300 miles on one charge.
The lab has won almost universal praise from the scientific, commercial and even political communities. During the 2012 Presidential campaign, even Republican nominee Mitt Romney praised ARPA-E, and promised to continue funding for the program.
“There are some Secretaries of Energy that don’t leave a market – ARPA-E will leave a significant mark on the country,” said retired Sen. Byron Dorgan, D-N.D., who chaired the Senate panel that funded the Energy Department and now heads up the Bipartisan Policy Center’s energy program. If you fast forward 10 years from now, ARPA-E will be a permanent part of the landscape. It’s a very significant legacy.”
Point Man on Fukushima, BP
While Chu’s star fell during the Solyndra episode, he had also built up tremendous capital in the White House. He was Obama’s point man during the 2011 meltdown of Japan’s Fukushima nuclear plant, which triggered new oversight of the U.S. nuclear power fleet, and during the catastrophic 2010 Gulf of Mexico oil spill. Obama has credited Chu himself with designing the cap that ultimately plugged the gushing oil well (although other reports have said Chu chose the designs from thousands of submissions).
“He’s a brilliant scientist. But he is also real-world smart,” said former Congressman Bart Gordon, who was Chairman of the House Science Committee. “During the Gulf incident, the president called on Chu to do something. And he and [ARPA-E chief scientist] Arun Majumder put together a strike team and they went down there – and they were the ones who figured out how to cap that well.”
Republicans also praise his role in stopping the disaster. “His high point was his direct role in handling the Macondo problem,” said Bob McNally, a senior energy official in the George W. Bush White House, who now runs an energy consulting firm, The Rapidan Group. “His skill were applicable to the highest degree.”
A Less Muscular Role For Energy Department
It’s unlikely, in a second term, that the Energy Department will take on the muscular clean-energy engine role that Obama had once envisioned. But the small clean-energy research programs that Chu launched, particularly ARPA-E, do appear likely to keep going strong.
Among the top contenders to succeed Chu are Dorgan, and former Colorado governor Bill Ritter. Both are skilled politicians who have championed both clean energy and the boom in oil and gas extraction. The controversial extraction method known as “fracking” has benefitted both of their home states. Christine Gregoire, who this week wrapped up her tenure as governor of Washington state, has also been mentioned for the job. Gregoire is also being considered for secretary of the interior or head of the Environment Protection Agency.
Also on the list are Dan Reicher, who served as Clinton’s assistant secretary of energy efficiency and renewable energy, and from 2007 to 2011 was Google’s director of climate-change and energy initiatives. He currently heads the Center for Energy Policy and Finance at Stanford University, where Chu was once a professor of physics. Another possibility is John Podesta, chairman of the liberal think tank Center for American Progress, who was Clinton’s chief of staff. Their progressive pedigrees could be stumbling blocks to Senate confirmation but if either ended up in the job, they would continue the clean-tech work started by Chu.
“There is a real focus on energy R and D that had never been seen before,” said Josh Freed, director of energy policy at the Democratic think tank Third Way. “That evidence will endure beyond Steven Chu."
January 18, 2013