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Steven Chu on Solyndra: Enough already !!!

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.

Steven Chu on Solyndra: Enough already – Darren Samuelsohn – POLITICO.com.

Chu Uses Power Marketing Administrations to Implement Green Agenda

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Romina Boccia
March 20, 2012 at 5:25 pm

When it comes to finding alternate pathways to force their green agenda onto Americans, President Obama and his Administration know how to dream up creative solutions. In this latest installment, Energy Secretary Steven Chu is directing Power Marketing Administrations (PMAs) to invest in a smart electrical grid that also serves as test bed for cybersecurity technologies.

PMAs are federal agencies within the Department of Energy (DOE) that distribute and sell electricity from federal hydroelectric dams at cost-based prices, which allows them to sell the electricity at below-market rates. There are four PMAs split up by region: the Bonneville Power Administration, the Western Area Power Administration, the Southeastern Power Administration, and the Southwestern Power Administration. In the past, PMAs have relied heavily on taxpayer money to finance their capital investments.

In his March 16 memo, Chu instructs the PMAs to upgrade their transmission infrastructure, in part to enable more intermittent and unreliable “alternative” energy sources to travel over the grid. Chu also requests rate structure changes that provide incentives for energy efficiency programs, demand response programs, integration of variable resources, and preparation for electric vehicle deployment.

If the PMAs need such investments, then they should be made because it makes business sense—and funded through PMA revenues—not with taxpayer dollars because the President is running out of more transparent ways to advance his green energy agenda.

None of these are inherently bad ideas, if they were undertaken by the private sector on its own accord. Secretary Chu instructing the PMAs to “to take a leadership role in transforming our nation’s electric sector,” however, seems like a backdoor move to work toward the Administration’s agenda of incorporating more alternative energy sources in the power grid. This approach is bad policy for several reasons:

  • Without a law by Congress requesting that PMAs sell electricity at market prices, PMA customers will see their rates go up, while distortions in the price of electricity between PMA and market-based rates would continue to persist. PMAs should not exist to subsidize customers’ energy use through below-market rate electricity sales. However, raising these rates to bankroll the President’s economically unsustainable green agenda is also bad policy. Instead, the PMAs should simply sell their electricity at market rates and make whatever investments will help them meet their customers’ demands.
  • Taxpayers will likely be on the hook to subsidize the PMA spending on smart grid and cybersecurity technologies. In the memo, Chu announces reforms “necessary to ensure the borrowing authority programs are building the infrastructure this Nation needs while protecting and providing value to the taxpayer,” which suggests that taxpayers will subsidize the upgrades in one form or another.
  • The role of PMAs is to distribute and sell hydroelectric energy, not to be used as test beds for new grid technologies. They should make the upgrades necessary to allow proper functioning but should not serve as a testing ground.

Chu’s directing the PMAs to help carry out this Administration’s green energy aspirations on taxpayers’ and ratepayers’ dime is bad policy. Smart-grid initiatives should be led by the private sector—if they make sense—and the role of government should be in identifying and removing regulatory barriers to private-sector investments. PMA infrastructure that needs upgrading or replacing should be paid for by bringing MPA rates in line with market rates for electricity, instead of burdening taxpayers with additional spending.

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White House Wants to Keep Gas Prices High

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Mike Brownfield
February 29, 2012 at 8:40 am

With the national average of gas prices hitting $3.65 a gallon, nearing $6 in some parts of the country, and poised to head even higher, America’s families are wondering when the bleeding at the pump will stop. But for Secretary of Energy Stephen Chu, those steep prices aren’t even a concern. In fact, he says his goal is not to get the price of gasoline to go down.

Chu delivered those stunning remarks in testimony before Congress yesterday. When Rep. Alan Nunnelee (R-Miss.) asked Chu whether it’s his “overall goal to get our price” of gasoline lower, Chu said, “No, the overall goal is to decrease our dependency on oil, to build and strengthen our economy.”

As shocking as his remarks are, they shouldn’t come as a surprise. Chu has a long record of advocating for higher gas prices. In 2008, he stated, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” Last March, he reiterated his point in an interview with Fox News’ Chris Wallace, noting that his focus is to ease the pain felt by his energy policies by forcing automakers to make more fuel-efficient automobiles. “What I’m doing since I became Secretary of Energy has been quite clear. What I have been doing is developing methods to take the pain out of high gas prices.”

One of those methods is dumping taxpayer dollars into alternative energy projects like the Solyndra solar plant. Another is subsidizing the purchase of high-cost electric cars like the Chevy Volt to the tune of $7,500 per car (which the White House wants to increase to $10,000). In both cases, those methods aren’t working. Solyndra went bankrupt because its product couldn’t bear the weight of market pressures, and Chevy Volts aren’t selling, even with taxpayer-funded rebates. What’s the president’s next plan? Harvesting “a bunch of algae” as a replacement for oil.

Meanwhile, the Obama Administration is seemingly doing everything it can to make paying for energy even more painful by refusing to open access to the country’s oil and gas reserves and blocking new projects that would lead to the development of more energy in America. Case in point: the president’s decision to say “no” to the Keystone XL pipeline, a project that would have delivered hundreds of thousands of barrels of oil from Canada to Texas refineries, while bringing thousands of jobs along with it.

Sensing impending political fallout from the high cost of gas, President Obama last week spoke on the subject and attempted to deflect blame for the pain. He said that there is no quick fix to high gas prices and the nation cannot drill its way out of the problem, but as Heritage’s Nicolas Loris writes, the president ignored reality and dished out a series of half-truths. Among them, the president claimed oil production is its highest in eight years, that increasing oil production takes too long, and that oil is not enough. Loris writes that while production is up on private lands, unrealized production on federal lands and offshore could have yielded even more output, increasing supply and driving down costs. If the president had said “yes” to Keystone, oil could have reach the market quickly. And as for the president’s push for alternative energy, those sources simply cannot stand the test of the market.

There are steps the president and Congress can and should take today to bring down the cost of energy. Namely, end the de facto moratorium on drilling, open offshore areas that are off-limits to drilling, place a 270-day limit on environmental reviews for energy projects on federal lands, remove regulatory delays, and approve Keystone.

As Loris writes, “The market would respond if Congress and the Obama Administration allowed it to work.” But Secretary Chu and the Obama Administration are evidently not interested in market-based reforms that bring down the cost of energy. Instead, they’re bent on keeping energy costs high in order to placate the environmental left. And now Americans are paying the price.

VIDEO: Watch President Obama and Secretary Chu describe in their own words their vision of higher energy prices. See the video on YouTube.

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Energy secretary backs natural gas exports

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The low price of natural gas is hurting domestic job growth, and exporting a small amount of the fuel will boost the economy, U.S. Energy Secretary Steven Chu told a Houston audience Thursday.

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.

At the college, he answered questions about the Obama administration’s rejection of the Keystone XL pipeline and Iran’s threat to close the Strait of Hormuz, among other topics.

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.

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Photo: Melissa Phillip / © 2011 Houston Chronicle

 

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.”

simone.sebastian@chron.com @SimonesNews

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