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Outgoing Energy Secretary Could Be Remembered For More Than Solyndra


The outgoing energy secretary, Steven Chu, got a rousing ovation this week when he spoke at a summit on energy innovation. But his tenure has been clouded by the department's investment in alternative energy companies that later failed, most notably Solyndra. As Chu leaves office, his real legacy may be the government's ongoing search for energy breakthroughs. NPR's Scott Horsley tells us more.

SCOTT HORSLEY, BYLINE: The innovation summit where the secretary spoke this week has been called Woodstock for energy geeks, which would make Steven Chu a somewhat unlikely stand-in for Jimi Hendrix.


HORSLEY: On the other hand, Hendrix didn't have a Nobel Prize in physics. Early on his career, Chu worked at Bell Laboratories, and he began his talk to would-be inventors with a story about the skeptical reaction that greeted Alexander Graham Bell's invention of the telephone.

SECRETARY STEVEN CHU: Two years after he got the patent for the phone, the chief engineer of the British post office said, Americans have need for the telephone, but we do not. We have plenty of messenger boys.

HORSLEY: The point, Chu said, is that change is not always welcome.

CHU: People who are invested in existing technologies are sometimes not able to recognize or are reluctant to recognize when a transformative innovation occurs.

HORSLEY: As energy secretary, Chu has tried to be a catalyst for transformation towards less-polluting forms of energy. And he's met plenty of resistance. Thomas Pyle is president of the Institute for Energy Research, which draws some of its funding from the fossil fuel industry. Pyle criticized Chu's strategy of putting billions of federal dollars into alternative energy firms.

THOMAS PYLE: By propping them up and by giving them government grants and by, you know, just handing them money, they're not helping them at all in any way. I think they're harming them in the long run.

HORSLEY: Republican Congressman Darrell Issa has also called it deeply misguided for Chu to use taxpayer dollars to bankroll unproven technologies. Issa declined a request for an interview. But GOP Congressman Jim Jordan made a similar point during a hearing on the Energy Department's loan guarantees.

REPRESENTATIVE JIM JORDAN: The best way to get cheap energy to American consumers is to let the market forces work, not to allow bureaucrats in Washington to select who wins and who loses.

HORSLEY: The Energy Department has unquestionably selected some losers, including Solyndra, whose innovative solar panels became uncompetitive when the price of competing panels plunged. Many of those cheaper panels came from China. Investments in high-tech batteries also suffered when consumers didn't flock to buy electric cars. But Gregory Kats, an energy investor who's testified repeatedly before Congress, says lawmakers assumed not all of the department's bets would pay off. And so far, the losses are well below expectations

GREGORY KATS: Not surprisingly, there were a few companies that didn't do very well, particularly Solyndra. But for all of the companies, the overall record has been really good.

HORSLEY: Some of the department's bets were on large-scale solar projects, which were relatively safe, thanks to upfront commitments from utilities to buy their power. But Kats says the government shouldn't limit its investments to obvious winners.

KATS: What you need to do is invest in projects that probably wouldn't have happened otherwise because if there was no risk, then you don't add any value.

HORSLEY: Ironically, Chu's vigorous support for alternative energy has come at a boom time for America's oil and gas producers. Chu warns those fuels carry their own risks, especially to the climate and environment. He says the goal of the Energy Department is to find better and cheaper solutions.

CHU: We don't expect all those things to work. But we wanted home runs. Now, after three years, have there been home runs? Well, maybe not. But there are people rounding second and third base, so it's looking good.

HORSLEY: Chu will watch the next innings of this game from Stanford where he's a professor. But he's encouraging the Energy Department and the inventors it backs to keep swinging for the clean energy fences. Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.
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