“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 recently 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."