The House Energy and Commerce Oversight Subcommittee grilled Department of Energy (DOE) Secretary Steven Chu for four hours yesterday about his role in approving and managing a $535 million loan guarantee to Solyndra. The solar technology company — celebrated by President Obama and other top administration officials as a “green jobs” and Stimulus success story in 2009 and 2010 — closed its doors and filed for bankruptcy protection in September 2011.
Yesterday’s hearing was part of a nine-month investigation. The Committee reviewed 186,000 pages of documents from DOE, 10,000 pages from the White House, and another 1,000 from Treasury. Oversight Chairman Cliff Stearns (R-FL) and other GOP Members charge that Obama officials rushed the Solyndra loan out the door without due diligence, ignored the company’s significant financial problems, and illegally gave investors first dibs over taxpayers in collecting $75 million loaned to the company in early 2011.
The Committee developed this case in several briefing memos (Sep. 12, Sep. 23, Oct. 12, Nov. 17) and published collections of supporting emails and documentation (here, here, here). Allegations — as yet unproven — have also been raised claiming the DOE loan and taxpayer subordination were political payoffs to George Kaiser, a big-time bundler for Obama’s presidential campaign who was also a major investor in Solyndra.
As expected, Chu denied that DOE officials acted incompetently or improperly, or that politics intruded in any of the decisions DOE made in reviewing, approving, and restructuring the Solyndra loan. However, Chu had so little to say about specific emails, most of which he had not seen until published by the Committee, that he came across as a man out of the loop at his own agency.
Chu probably failed to persuade any Republican on the Committee that Solyndra was just a good bet gone sour. On the other hand, GOP Committee members did not produce smoking-gun evidence of high crimes and misdemeanors.
Chu’s written testimony — barely three pages long — recycled his customary spiel about the promise and peril of the global “clean energy race.” The argument has become a staple of green rhetoric: China is spending billions subsidizing its clean tech sector, if we don’t “invest” in “our” clean tech firms America will lose the race and China will “eat our lunch.”
Talk of a clean energy race harkens to the “space race” and “arms race” of the Cold War era. But although those races had economic spinoffs, they were first and foremost geopolitical, not commercial. Renewable energy advocates now try to recreate a Cold War sense of drama about companies like Solyndra. Nukes and missiles had an obvious potential to affect the outcome of a global power struggle. But wind turbines and solar panels?
The global marketplace comprises countless races, because each firm typically faces competition from many others. Dannon, Yoplait, General Mills, Kraft Foods, and Chobani, for example, are engaged in a global yogurt race, and by all accounts “we” (General Mills, Kraft) are losing. Yet you probably won’t read about the yogurt race in the Washington Post.
Chu has probably done more than any other official to popularize the notion of a clean energy race. A testimony he gave in November 2009 offers a more complete explanation than the one he gave yesterday.
Chu argued that the world would need to invest $2.1 trillion in wind turbines and $1.5 trillion in solar panels to meet global emission reduction targets. Thus, to his mind: “The only question is … who will invent, manufacture, and export these clean technologies and which countries will become dependent on foreign products.”
Chu warned that China was investing “about $9 billion a month on clean energy” and lamented that America had “fallen behind” other countries in global market share, but said the Stimulus was helping U.S. firms make a comeback. However, he cautioned the only way to ensure our clean tech companies can compete is to put a steadily tightening “cap” on carbon emissions. “That critical step will drive investment decisions toward clean energy.”
This does not compute.