Energy Secretary Chu felt pressure to speed up loans to firms like Solyndra

September 30, 2011

When Steven Chu took the reins of the Department of Energy in 2009, he was entering an agency that needed to completely reorient its outlook — and fast.

Until Chu arrived, the department’s primary focus had rarely been on energy. The bulk of its budget had long 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 technologies. Chu had to grapple with a massive infusion of money, even as critics accused the department of being too hidebound, too slow in disbursing funds.

“He has faced expectations that were unprecedented for an energy secretary,” said Paul Bledsoe, a senior adviser at the Bipartisan Policy Center. “There was pressure to spend billions of dollars quickly, and in a department that initially lacked the capacity to do so.”

Chu, a Nobel Prize-winning physicist and former head of the Lawrence Berkeley National Laboratory, seemed an ideal fit for overseeing a technological revolution in the nation’s energy sector. But now Chu is facing heavy criticism after one of the agency’s highest-profile investments, the California-based solar manufacturer Solyndra, defaulted on a $535 million loan in September. The accolades have vanished, and members of Congress are now accusing Chu of trying to do too much, too soon.

Energy secretaries have often hailed from the ranks of Congress. Political acumen was seen as crucial for managing an unwieldy agency composed of a sprawling network of national laboratories. Ambitious secretaries who have tried to focus on energy policy have often seen their attentions diverted elsewhere. Bill Richardson, for instance, spent much of the late 1990s dealing with scandal after Wen Ho Lee, a scientist at Los Alamos National Laboratory, was accused of spying for China.

Chu, by contrast, came from a nerdy scientific background. In 1997 he won the Nobel Prize for his work on cooling and trapping atoms using lasers. As a professor at Stanford University, his research interests included atomic physics and protein folding.

But Chu also had experience pushing a large organization toward an emphasis on clean energy. He has frequently spoken out about the dangers of global warming and has argued that only game-changing new technologies will enable humanity to avoid a dire climate fate.

It wasn’t until 2004, when he became director of Lawrence Berkeley, that he could put those views into effect. He set about transforming the lab into a leading center for research into biofuels and solar power.

“He was more aggressive at setting the research agenda than most directors have been,” said Robert Birgenau, chancellor of the University of California at Berkeley and a longtime colleague of Chu’s.

At the Energy Department, Chu had an even bigger opportunity to reset national energy priorities. But he faced a large and clumsy bureaucracy standing in the way.

The agency’s loan-guarantee program was set up in 2005, part of an energy bill that passed Congress with bipartisan support. But the program took a long time to show results. Bush-era officials said the agency was bogged down by federal hiring guidelines and a sluggish rule-making process.

Three years later, the agency still hadn’t approved a single loan guarantee. Andy Karsner, the assistant secretary for energy efficiency and renewable energy under President George W. Bush, told an incredulous Senate panel that progress had been “painfully slow,” blaming “organizational intransigence” and “institutional barriers.”

Not long after Chu arrived at the agency, he loudly announced that his top priority would be to speed up the process.

“We’re trying to streamline it so that the period of time will be reduced from a scale of four years to several months,” he said at an event hosted by The Washington Post in fall 2009, shortly after Solyndra’s loan guarantee was finally approved, to much fanfare.

Later, Chu pressed the Treasury Department and the Office of Management and Budget to end certain time-consuming reviews and subject the loans to less scrutiny. (In the end, he didn’t get the major overhaul he wanted.)

To date, the agency has approved nearly $40 billion in loan guarantees for projects ranging from solar manufacturers to electric-vehicle factories to a large nuclear reactor in Georgia.

In the meantime, Chu found himself coping with outside events beyond his control. In April 2010, the Deepwater Horizon drilling platform exploded, leading to a massive oil spill in the Gulf of Mexico that would take three months to plug. Because of his technical expertise, Chu was tapped to help lead administration efforts to deal with the crisis. Those who worked with Chu then recalled that the spill consumed a large part of his time.

Since Solyndra went bankrupt, Chu has drawn fire from Republicans in Congress for failing to subject the loan guarantees to proper scrutiny, and, in the process, putting taxpayer money at risk. This month, he could find himself summoned before Congress to answer questions about his role in green-lighting Solyndra’s loan guarantee.

But even as he is criticized for hastiness, Chu continues to face pressure to speed up the loan process. On Friday, Sen. Rob Portman (R-Ohio) blasted the Energy Department for delays in a loan-guarantee for a uranium-enrichment plant in Ohio.

“These workers have waited long enough,” Portman said.

SECTION: {section=business, subsection=economy}!!!
INITIAL commentConfig: {includereply=true, canvas_permalink_id=washpost.com/8bvh5zpd9k, allow_comments=true, commentmaxlength=2000, includeshare=true, display_comments=true, canvas_permalink_app_instance=m6yzjj840m, display_more=true, moderationrequired=false, includefeaturenotification=true, canvas_allcomments_id=washpost.com/km4ey0dajm, comments_period=3, defaultsort=reverseChronological, includevoteofftopic=false, allow_videos=false, includesorts=true, markerdisplay=post_commenter:Post Commenter|staff:Post Writer|top_commenter:Post Forum|top_local:Washingtologist|top_sports:SuperFan|fact_checker:Fact Checker|post_recommended:Post Recommended|world_watcher:World Watcher|cultuer_connoisseur:Culture Connoisseur|weather_watcher:Capital Weather Watcher|post_contributor:Post Contributor, childrenitemsperpage=3, includeheader=true, includeverifiedcommenters=true, defaulttab=all, includerecommend=true, includereport=true, maxitemstop=15, source=washpost.com, allow_photos=false, maxitems=3, display_ugc_photos=false, includepause=true, canvas_allcomments_app_instance=6634zxcgfd, includepermalink=false}!!!

UGC FROM ARTICLE: {allow_comments=true, allow_photos=false, allow_videos=false, comments_period=3, comments_source=washpost.com, default_sort=, default_tab=, display_comments=true, is_ugc_gallery=false, max_items_to_display=3, max_items_to_display_top=15, moderation_required=false}!!!

FINAL commentConfig: {includereply=true, canvas_permalink_id=washpost.com/8bvh5zpd9k, allow_comments=true, commentmaxlength=2000, includeshare=true, display_comments=true, canvas_permalink_app_instance=m6yzjj840m, display_more=true, moderationrequired=false, includefeaturenotification=true, canvas_allcomments_id=washpost.com/km4ey0dajm, comments_period=3, defaultsort=reverseChronological, includevoteofftopic=false, allow_videos=false, includesorts=true, markerdisplay=post_commenter:Post Commenter|staff:Post Writer|top_commenter:Post Forum|top_local:Washingtologist|top_sports:SuperFan|fact_checker:Fact Checker|post_recommended:Post Recommended|world_watcher:World Watcher|cultuer_connoisseur:Culture Connoisseur|weather_watcher:Capital Weather Watcher|post_contributor:Post Contributor, childrenitemsperpage=3, includeheader=true, includeverifiedcommenters=true, defaulttab=all, includerecommend=true, includereport=true, maxitemstop=15, source=washpost.com, allow_photos=false, maxitems=3, display_ugc_photos=false, includepause=true, canvas_allcomments_app_instance=6634zxcgfd, includepermalink=false}!!
Comments
SECTION: {section=business, subsection=economy}!!!
INITIAL commentConfig: {includereply=true, canvas_permalink_id=washpost.com/8bvh5zpd9k, allow_comments=true, commentmaxlength=2000, includeshare=true, display_comments=true, canvas_permalink_app_instance=m6yzjj840m, display_more=true, moderationrequired=false, includefeaturenotification=true, canvas_allcomments_id=washpost.com/km4ey0dajm, comments_period=3, defaultsort=reverseChronological, includevoteofftopic=false, allow_videos=false, includesorts=true, markerdisplay=post_commenter:Post Commenter|staff:Post Writer|top_commenter:Post Forum|top_local:Washingtologist|top_sports:SuperFan|fact_checker:Fact Checker|post_recommended:Post Recommended|world_watcher:World Watcher|cultuer_connoisseur:Culture Connoisseur|weather_watcher:Capital Weather Watcher|post_contributor:Post Contributor, childrenitemsperpage=3, includeheader=true, includeverifiedcommenters=true, defaulttab=all, includerecommend=true, includereport=true, maxitemstop=15, source=washpost.com, allow_photos=false, maxitems=3, display_ugc_photos=false, includepause=true, canvas_allcomments_app_instance=6634zxcgfd, includepermalink=false}!!!

UGC FROM ARTICLE: {allow_comments=true, allow_photos=false, allow_videos=false, comments_period=3, comments_source=washpost.com, default_sort=, default_tab=, display_comments=true, is_ugc_gallery=false, max_items_to_display=3, max_items_to_display_top=15, moderation_required=false}!!!

FINAL commentConfig: {includereply=true, canvas_permalink_id=washpost.com/8bvh5zpd9k, allow_comments=true, commentmaxlength=2000, includeshare=true, display_comments=true, canvas_permalink_app_instance=m6yzjj840m, display_more=true, moderationrequired=false, includefeaturenotification=true, canvas_allcomments_id=washpost.com/km4ey0dajm, comments_period=3, defaultsort=reverseChronological, includevoteofftopic=false, allow_videos=false, includesorts=true, markerdisplay=post_commenter:Post Commenter|staff:Post Writer|top_commenter:Post Forum|top_local:Washingtologist|top_sports:SuperFan|fact_checker:Fact Checker|post_recommended:Post Recommended|world_watcher:World Watcher|cultuer_connoisseur:Culture Connoisseur|weather_watcher:Capital Weather Watcher|post_contributor:Post Contributor, childrenitemsperpage=3, includeheader=true, includeverifiedcommenters=true, defaulttab=all, includerecommend=true, includereport=true, maxitemstop=15, source=washpost.com, allow_photos=false, maxitems=3, display_ugc_photos=false, includepause=true, canvas_allcomments_app_instance=6634zxcgfd, includepermalink=false}!!
Show Comments