Burgeoning Solyndra controversy could put him on the ropes.
When Steven Chu, a Nobel physicist who had lately devoted his career to climate change and clean-energy research, was nominated by President Obama for Energy secretary in December 2008, it seemed like a perfect match.
Until then, the Energy Department had actually played very little role in energy policy. Despite its name, the agency's chief mandate is to guard the nation's nuclear arsenal, and to clean up Cold War-era defense nuclear waste. In most years, about two-thirds of its budget goes to nuclear weapons and waste cleanup, while roughly 10 percent to 15 percent goes to energy research.
The idea in 2008 was that Obama would push through a sweeping climate-change law, spurring a transformation of the nation's energy economy: Oil and coal companies would pay the federal government for pollution permits and around $150 billion of that money would be invested over the next decade in clean-energy research, a mission that would be led by the Energy Department, with Chu at the helm.
Three years later, that vision appears to be evaporating. The climate-change bill died in Congress. Clean energy got a one-shot cash infusion of about $30 billion in the economic stimulus law, but that money dries up this year, and Republicans on Capitol Hill want to slash what little federal spending remains on clean energy-and some want to ax the Energy Department altogether. The Energy Department has come under increasing criticism for its management of the clean-energy money-culminating in the dust-up over Solyndra, the bankrupt solar company that got $535 million in federal loan guarantees.
Now Chu is at the center of the explosive political controversy, and many people in Washington are asking if he'll resign because of it. Even if he's not forced out, some are questioning whether he'd even want to stay, since it's clear that the ambitious clean-energy agenda that he came on board to drive won't be enacted any time soon. And Chu himself, whose career until he came to Washington had been spent in scientific laboratories, has often pointed out that his forte is science, not politics-a distinction that could hurt him as Obama faces the political realities of the 2012 campaign.
The first cues on Chu's future are likely to come on Thursday, when he will give testimony on the Solyndra affair to the House Energy and Commerce Committee, his first appearance before Congress since the Solyndra controversy broke.
Media speculation about Chu's fate began to build last week, when emails released by the White House showed that Dan Carol, a former Obama campaign adviser, wrote to senior White House officials questioning Chu's aptitude as Energy secretary. In memos sent earlier this year to several senior White House officials, including Obama's then-Chief of Staff Pete Rouse, Carol laid out his vision for revamping the department. That vision included demoting Chu from the department's secretary to its chief scientist.
"Secretary Chu is a wonderful and brilliant man, but he is not perfect for the other critical DOE mission: deploying existing technologies at scale and creating jobs," Carol wrote in a February memo. "Chu should become chief scientist at DOE and re-inspire and re-organize DOE's labs."
In response to a similarly worded memo sent to Rouse in March, Rouse said in an email to Nancy-Ann DeParle, the White House deputy chief of staff for policy, that he wasn't "that interested in Dan's criticism of Secretary Chu, but what do you think of Dan's general assessment of the need for greater focus on our energy policy agenda?"
Energy Department and White House spokespeople brushed aside the significance of the memo and said Carol's recommendations were not taken seriously. But the administration adopted at least one of them in September when the Energy Department hired Richard Kauffman, former CEO of renewable-energy company Good Energies, as a senior adviser to Chu. Carol included Kauffman on his list of suggested new DOE leadership.
"I think Richard Kauffman is an excellent addition to Secretary Chu's staff," Carol told National Journal on Monday. "But larger challenges remain in moving top-down congressional mandates and DOE deployment to more locally led innovation."
Carol in his February memo also predicted-accurately-"the GOP attacks that are surely coming over Solyndra and other inside DOE deals that have gone to Obama donors and have underperformed."
Other people familiar with the White House's thinking on energy policy and politics privately voice similar criticisms.
"The department is at a point where policy and financial leadership is really quite critical more than the science leadership that Secretary Chu has brought," said one clean-energy expert who is close to the Obama administration. "And I think that's going to be a big challenge going forward."
The source, who insisted on anonymity because of the expert's connections with the administration, added that in light of the Solyndra scandal, "there is a serious question of whether or not" Chu has the necessary leadership skills "given what we're seeing now. That's what the president is probably wrestling with as we speak."
But Chu has also built up tremendous capital in the White House. He was Obama's point man during the Fukushima nuclear disaster in Japan and the catastrophic oil spill in the Gulf of Mexico, and Obama has credited Chu with designing the cap that ultimately plugged the BP well (although other reports have said Chu chose the design from thousands of submissions).
"He was the point person for the biggest energy crises the country has faced," said a former Energy official who worked with Chu. "The president turned to him and said: 'Chu: you're our guy on this.' "
"The idea that there is some kind of confidence issue with him is widely off base," the former official added, who would only speak on the condition of anonymity.
There's also a practical matter: If Chu resigns in the coming year, it's unlikely that the Senate would confirm a new Energy secretary before the 2012 election.
Chu could likely resign if Obama wins a second term, which is what most Energy secretaries have done before him. That would satisfy his critics-without tarring him directly with the taint of the Solyndra scandal. And it could well satisfy Chu's own inclinations.
"Even though it's the Department of Energy, today it has very little authority to affect how people use energy. Obviously, Steven Chu is associated with climate and clean energy. He had the expectation that there were going to be boosts in clean energy. But now you're moving to a situation where there's a Congress that doesn't believe you should exist and doesn't believe in clean energy," said Joseph Romm, a former assistant secretary of Energy who now writes the blog Climate Progress.
The wild card remains how big the Solyndra scandal will grow-and whether the Obama campaign will deem it politically necessary to make Chu a scapegoat.
One top Energy official, the agency's loan guarantee office director, Jonathan Silver, already resigned earlier this fall, soon after the Solyndra scandal broke. Chu said Silver had always planned to resign once the stimulus dollars ran out on Sept. 30.
"I don't know that Jonathan Silver is enough to satisfy the shark," said one clean-energy expert who sits on one of DOE's advisory boards.
Ultimately, said Romm, "It's 100 percent up to Barack Obama, and not Steven Chu."