Steven Chu, Obama's Point Man on Energy, Says Conservation Is 'Sexy'

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It could easily be argued that Steven Chu is the most high-profile energy secretary this country has seen. The Nobel Prize in physics he won in 1997 doesn't hurt. But it's the task before him—helping carry out President Obama's ambitious energy goals—that's fueling the attention. As the top voice at the Department of Energy, Chu is inheriting an agency that spends much of its budget on weapons protection and cleanup but is now being asked to play a leading part in transforming the country's energy supply. U.S. News recently spoke with Chu. Excerpts:

You've been immersed in research for much of your career. What is science's role in addressing energy problems?
There have to be some breakthroughs. Our current solar technology is silicon photocells. I think it will go down in price by a factor of two, maybe more, within the next decade. However, if you step back and ask, "What would it take for a utility company to start putting hundreds and hundreds of megawatts of solar energy in a desert where the land is cheap? What's preventing this from happening?" it's the cost of installment—capital costs. So we do need a breakthrough. We need a breakthrough of a factor of five in the overall cost of the system. We need a breakthrough in energy storage technology. We need the next-generation photovoltaics.

The stimulus includes $400 million for a new Advanced Research Projects Agency-Energy. What's its mission?
What I'd like to see it do is make investments in very high-risk efforts, very much in a venture capital mode, where you sprinkle money on various projects, give each one a three-year leash, and say, "Is this going to work or not?" If it looks like it's going to work, if it's going to have a life of its own, you can fund it with more money, or venture capitalists will pick it up. So it's high risk but high reward, meaning we would like to invest in very, very innovative things. There will be many failures. But if there's a success, it could be game-changing.

What types of projects would be included?
It would include biofuels; it would include photovoltaics; it would include game-changing solutions to building buildings more efficiently. It doesn't have to be all on the supply side. On the demand side, there can be a lot of innovation. I'm a big believer. People sometimes say energy efficiency and conservation are not sexy; they're low tech. That's actually not true. They can be very sexy and very high tech. Right now, we don't have adequate software tools for designing heating ventilation systems and integrating them with the passive design of the building.

On biofuels, where do you see potential for breakthroughs?
People are working on better enzymes. More globally, they are looking at genetically engineering plants that are easier to break down. They are looking at different treatments, like liquids called ionic liquids, in which the actual molecules that constitute the liquid are highly charged, that have been shown to break down plant material very quickly and are more benign. So it's a totally different approach.

Does the government need more authority to build transmission lines to promote renewable electricity?
This is a very complicated problem. People recognize that if we are going to take full advantage of our renewable-energy resources, we need to transport energy from faraway places with low population densities. So it's not only more authority. You have to work with state governments, local governments, and people who live where these lines go through. If we just take the view that we are going to cram something down someone's throat, this is not a constructive way of doing business. Having said that, there is going to be a need for taking full advantage of the resources in renewable energy in the United States.

So what's the first step?
The biggest gains, in terms of decreasing the country's energy bill, the amount of carbon dioxide we put into the atmosphere, and our dependency on foreign oil, will come from energy efficiency and conservation in the next 20 years. Make no doubt about it. That's where everybody who has really thought about the problem thinks the biggest gains can be and should be.

What's limiting these gains?
There are initial investment barriers. And this is where, for example, in the American Recovery and Reinvestment Act, a lot of the money is being targeted. But we want to also be looking systemically [at] how to do this.

How so?
Say you're building a new home. McKinsey has done a study that says for $1,000 extra in material and labor, that investment could pay for itself in one and a half years, and you could save a tremendous amount of energy. In terms of new homes and buildings, part of it is regulatory. But you've also got to convince people—they've got to believe in their heart and soul—that a small, minor upfront cost will actually decrease their monthly bill.

What about older homes and existing buildings?
If you're in an older home with these older, leaky windows, it could cost a lot of money to replace those. So we need more creative ways of allowing one to finance the replacement of the leaky doors and windows. It could be a loan from a city; it could be a loan that ends up being built into the tax base of a home, so that over a 20-year period, the taxes are incrementally higher. What we really care about is that your monthly bills are the same or lower, and saving energy.

What can you do to make sure this happens?
I think one of the things the Department of Energy has to do is educational. You have to make sure, when people plunk down this kind of money, that it's going to things that truly will bring their overall housing expenses down. I'm all for solar photovoltaics on roofs. But it could make more sense to plug up leaky windows than investing in solar photovoltaic generation on your roof.

Before taking this job, you ran Lawrence Berkeley National Laboratory. What role do you envision for the national labs?
If you think about one of the real bedrock strengths in the U.S. today, we have undoubtedly the best research university system in the world. We have an incredible—I think also the best—national lab system in the world that generates a lot of terrific research. In terms of the way we use and generate energy today and where we'd like to go, one would like to couple as best as one can all this intellectual horsepower into solving our energy problems. I would say this is arguably one of the major issues science and technology has to solve.

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