Energy Secretary Steven Chu has just about had it with House Republican accusations about Solyndra and other clean-energy companies that won billions of dollars in federal loan guarantees.
“After hundreds of thousands of pages of documents sent over, there’s not any whiff that this was a politically influenced decision,” Chu told reporters Tuesday shortly after wrapping up House committee testimony on the controversial program. “That’s true of all the loans.”
Chu’s frustration was apparent after spending more than two hours before the Oversight and Government Reform Committee answering pointed GOP questions concerning his handling of more than $14.5 billion in stimulus-funded loan guarantees.
Earlier in the day, Rep. Darrell Issa’s panel released a blistering report claiming Chu had “turned a blind eye to the risks” associated with many of the companies applying for the loan guarantees, putting billions of dollars in taxpayer money in jeopardy.
During the hearing, House Republicans peppered Chu with questions about a “revolving green door” of current and former Obama administration officials and campaign fundraisers who have connections to the stimulus-funded loan guarantee winners.
Rep. Jim Jordan (R-Ohio) asked Chu whether his decisions had been influenced by several specific people tied to the administration, including former National Economic Council Chairman Larry Summers, who before joining the White House worked as a part-time managing director at D.E. Shaw, a New York-based investment firm that has an ownership stake in the Kahuku Wind project.
Chu replied that Summers’s connections to the Hawaii wind farm had nothing to do with it securing a $117 million loan guarantee in July 2010.
The DOE chief also had similar replies when asked about Commerce Secretary John Bryson, who before joining the administration sat on the board of directors at BrightSource, which won a $1.6 billion loan guarantee in April 2011 to support the Ivanpah Solar Energy Generating System in California’s Mojave Desert; Nancy-Ann DeParle, a deputy White House chief of staff for policy who served on the board of directors at Noble Environmental Power, the owner of the Granite Reliable wind energy project that won a partial $168.9 million loan guarantee last September; and Michael Froman, a deputy assistant to Obama and deputy national security adviser who worked at Citigroup, a major investor in SolarReserve, winner last September of a $737 million loan guarantee.
“There seems to be a pattern,” said Rep. Jason Chaffetz (R-Utah). “There’s so many names on this list. I just want to know personally what are you doing to follow through on our concerns that these people are personally financially benefiting from the decisions that they’re in positions to influence people when they have major financial gain on the upside of these loans.”
Chu responded that all of the DOE loan guarantees got greenlights based on their merits and without White House involvement. The DOE chief also said he hadn’t referred any of the specifics to the department’s inspector general, though he said he’d ask the DOE general counsel to review whether any of the officials breached a “firewall” designed to stop such conflict of interest concerns.
“We will look into this,” Chu told reporters after the hearing. “But again it’s easy to raise something and say, ‘Oh, by the way, this person had a connection to that company.’ Then there’s a big leap to say we funded the company because of it.”
Chu noted prominent Republicans and GOP donors have ties to some of the stimulus winners. But he also noted, “It’s not relevant to what we funded and that’s the bottom line.”
This article first appeared on POLITICO Pro at 3:59 p.m. on March 20, 2012.
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- Republicans expand complaints of energy loans beyond Solyndra (business.financialpost.com)
- When Wall Street Makes Crap Loans, It’s a Crisis; When DOE’s Steven Chu Does It, It’s Green Energy. (reason.com)
Speaking at a town hall at Houston Community College, Chu said a modest increase in the price of natural gas wouldn’t significantly raise its cost to U.S. consumers who use it to heat their homes and manufacturers who need it to make products.
Natural gas futures closed at $2.55, up 17 cents, in trading Thursday on the New York Mercantile Exchange. It brings much higher prices in other countries.
“Exporting natural gas means wealth comes into the United States,” Chu said.
The Energy Department’s Office of Fossil Energy is reviewing several applications to export liquefied natural gas. The exports would relieve the glut of natural gas on the domestic market and raise revenue, but also potentially increase prices for domestic consumers.
Several U.S. energy companies have announced plans to close their natural gas wells and curb spending in natural gas fields, as its price has fallen from more than $13.50 in 2008.
In his State of the Union speech last week, President Barack Obama called for an “all-of-the-above” approach to domestic energy production, including investment in oil, natural gas and renewable energy sources.
Chu said it’s important that the United States be at the forefront of innovations and technologies in renewable energy.
“We have a choice. When all these things become cost-competitive, do you want to buy or do you want to sell?” he asked. “If we are buying, that is wealth out of the country. If we are selling, that’s wealth into the country.”
Before the hour-long session with students at the college, Chu met with oil and gas executives and explored the Texas Medical Center’s energy efficiency upgrade.
Chu said the administration is open to exploring alternate routes for the pipeline that would carry oil from Canadian tar sands to Gulf Coast refineries.
It’s become a touchstone issue for supporters who say it will create jobs and reduce U.S. dependence on oil from hostile nations, and opponents who argue it could threaten water supplies and promote use of an especially dirty form of oil.
Chu said he supports construction of pipelines nationwide, particularly to relieve the glut of oil at the hub in Cushing, Okla., a major price point for domestic oil.
“There is such a shortage of pipelines between Cushing and Houston,” Chu said. “There will be major construction of pipelines in the next decade or so. All the job creation from Cushing to Houston is being done now.”
Chu touted government investment in wind, solar and other renewable energy sources, as well. He said he expects the cost of solar power to fall by 50 percent within six to eight years.
Chu also dismissed Iran’s threats to close the Strait of Hormuz, a key oil shipment channel, in retaliation for international sanctions aimed at the nation’s nuclear program.
“I don’t think they can really shut down the Strait of Hormuz,” Chu said. “We certainly have capabilities to reopen it.”
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