Steven Chu steps down as energy secretary. So how did he do?

February 1, 2013

On Friday, Steven Chu announced that he was stepping down as head of the Department of Energy. You can read his farewell letter to the agency here.


Chu has garnered plenty of headlines over the years for a variety of reasons. A physicist by training, he was the first Nobel Prize-winner to head up a Cabinet agency. He played a key advisory role when BP and the Obama administration were frantically racing to plug the massive oil spill in the Gulf of Mexico in 2010. And he attracted criticism after Solyndra, a government-subsidized solar panel maker, declared bankruptcy in 2011.

But how did he actually fare as head of the Department of Energy? And how has the U.S. energy landscape changed under his watch? Here are a few big points to consider:

1) Until 2009, the Energy Department rarely focused on energy. Chu pushed to transform the agency. Before Chu arrived, the bulk of the Energy Department's budget had typically gone toward maintaining the nation's nuclear-weapons arsenal. But the 2009 stimulus bill gave the agency $39 billion for grants and loans to kick-start new clean-energy projects. Chu suddenly had to grapple with an unprecedented infusion of money.

Progress was uneven. Chu did manage to speed up the agency's loan-guarantee program, which had started in 2005 and was often criticized for being too sluggish. But a few years later, members of Congress were criticizing Chu for moving too quickly: One of the agency's early bets, Solyndra, went bust after receiving $535 million in loan guarantees.

“He faced expectations that were unprecedented for an energy secretary,” energy expert Paul Bledsoe told me last year. “There was pressure to spend billions of dollars quickly, and in a department that initially lacked the capacity to do so.”

2) The vast majority of clean-energy projects are still up and running, though there have been a few notable failures. The Department of Energy under Chu has poured billions into everything from solar and wind to home-weatherization programs to battery manufacturing. Most of those projects are still thriving — though not all of them.

Consider the agency's 1705 program, which provided about $16.1 billion in federal loan guarantees to various clean-energy companies. Of the 33 companies that received support, 30 are still operating, while 3 have declared bankruptcy — including Solyndra. (The other two firms are Abound Solar and Beacon Power, which is still operating and has largely repaid its loan.) More companies could eventually fail, but for now, less than 3 percent of the loan portfolio is in default.

It’s worth noting that Congress created the 1705 loan program with the explicit expectation that some companies would fail. And, as energy analyst Gregory Kats has testified (pdf), the loan program’s final cost will likely end up well below the $2.47 billion Congress set aside to cover losses.

3) Other Energy Department programs have had a more mixed track record. Not all programs have been successes. The Obama administration spent $2.4 billion to create a new battery industry in the United States, yet many of those factories are now running idle, thanks to weak demand for electric cars.

Other stimulus efforts, meanwhile, are only just starting to show signs of progress after early missteps. Back in 2009, the $5 billion home weatherization program looked like an outright disaster; in Delaware, state officials were grappling with contractors doing “shoddy, unnecessarily expensive work.” Since then, however, the Energy Department says it has weatherized 1 million homes, saving consumers an estimated average of $400 a year on energy bills.

4) The U.S. energy landscape has changed dramatically over the past four years, though that's only in part due to Chu's agency. Since 2009, the U.S. energy sector has undergone enormous changes. Cheap natural gas is elbowing out coal in the power sector and curtailing carbon emissions. Electricity from wind and solar has doubled, and both technologies are getting much cheaper. Oil imports are rapidly dwindling.


Sorting out how much credit the Obama administration should get for these trends, however, is a trickier task. In his farewell letter, Chu credited his agency's green investments with driving down the price of wind and solar. Yet China’s massive foray into renewable-energy manufacturing has also played a crucial role here. Meanwhile, the oil and gas boom has been largely driven by private drillers (although the fracking techniques used were developed over decades in partnership with the U.S. government).

5) It could take years for some of the Energy Department's long-term research to show results. In his farewell letter, Chu also mentioned his role in getting ARPA-E up and running at last. That program, which was modeled after a similar Pentagon program and funds long-shot energy research, is currently bankrolling novel ideas like laser drilling for geothermal energy, advanced lithium-ion batteries, and techniques to manufacture cheaper solar cells.

Could one of these technologies eventually transform the energy industry and become a big part of Chu's legacy? Perhaps. But it could take years to find out.

“Just as today’s boom in shale gas production was made possible by Department of Energy research from 1978 to 1991, some of the most significant work may not be known for decades,” Chu wrote in his farewell letter. “What matters is that our country will reap the benefits of what we have started.”

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