Conservatives seek to overhaul energy agenda

WASHINGTON — Over the past decade, the U.S. government has spent tens of billions of dollars to speed onto the market the energy technology that many believe is the future — from solar panels to industrial-size batteries to modernized nuclear reactors.

“Building the new energy economy,” the U.S. Department of Energy proclaims on its Twitter feed.

But with former President Barack Obama out of the White House, a coalition of conservative politicians led by San Antonio Rep. Lamar Smith — the powerful chairman of the House Science, Space and Technology Committee — is pressing to overhaul a system it says allows the government, rather than the market, to decide the future of the country’s energy industry in a bid to create a low-carbon economy.

Instead, Smith’s coalition of Republican politicians wants to cut funding for energy efficiency and renewable energy research. The politicians are questioning a program from the George W. Bush era that backs loans for advanced energy projects that can’t find financing in the private sector.

“You need to ask the philosophic question do we need to be in the loan-making business,” said Republican Rep. Randy Weber, an ally of Smith on the House science committee. “We’re going to be having a discussion with (Energy Secretary nominee Rick Perry) on this.”

Long an adversary of climate scientists, Smith has not wasted any time since President Donald Trump, another skeptic of climate change, took office last month in making clear his intentions to roll back Obama’s policies aimed at slowing global warming.

Smith, 69, has called for a congressional investigation into whether employees of the Environmental Protection Agency have communicated secretly about undermining the new administration’s environmental agenda via an encrypted messaging app. He also has claimed the National Oceanic and Atmospheric Administration carelessly rushed to publish data disproving a potential pause in global warming between the late 1990s and early 2000s. Climate change deniers have long pointed to that possible pause as evidence for their beliefs.

With Congress ready to begin work on next year’s budget, the science committee held a hearing last week on the alternative energy loan guarantee program, which was created in 2005 and has since loaned out more than $30 billion to projects ranging from the nation’s first utility-scale solar farms to one of the nation’s first new nuclear power plants in decades to a new electric car designed by Tesla.

All but a handful of the more than 30 loans are being paid down or were repaid, according to the Energy Department. But pointing at high-profile failures like the California solar panel manufacturer Solyndra and loans to entities backed by large investors such as the Wall Street investment bank Goldman Sachs and tech giant Google, Smith described a system that, “instead of the private sector taking on risk to develop new technology, the government steps in and risks taxpayer dollars.”

Such critiques have been made for years by conservative think tanks like the Heritage Foundation, which lobbies against any and all energy subsidies, including those to the oil and gas sector.

But Cherry Murray, who until last month served as director of the Department of Energy’s Office of Science, said the loan program has been critical in getting technologies like solar farms and electric cars through the difficult period between invention and commercial production — known as “the valley of death” in the startup world.

With limited options to obtain financing and no established supply chains, new technologies typically struggle to survive competitors until they can move into commercial production — and many don’t. In addition, with foreign governments doing much to subsidize the development of low-carbon technologies, alternative energy is fast becoming an international race.

“It’s difficult for these companies to find funding, because until you get economies of scale the costs are too high,” Murray said. “And you can’t get the economies of scale until the costs come down. The thinking is if we can get (companies) to pick up (this technology) sooner we can have this revolution here in the U.S., and it won’t be just in Europe and China.”

Smith declined to be interviewed. But staffers at the House science committee described his intent to focus the Energy Department on research into new frontiers of science, seeking breakthroughs in areas like supercomputers and calcium-ion batteries over helping established technologies onto the market.

But for Smith, a Yale University graduate and lawyer who has been in Congress since the late 1980s, a rapid transition toward low carbon energy could spell trouble for the oil companies and refineries that dominate the economy in his home state of Texas. With Trump promising to cut government spending and regulations while growing fossil fuel production, this might be Smith’s best chance to slow the low-carbon revolution sweeping the United States, political observers said.

But it won’t be easy.

The loan guarantee program has spurred multibillion-dollar construction projects that have meant plenty of hiring in states like Georgia and Louisiana, where the Department of Energy has offered $2 billion in loan guarantees for a new methanol plant that will capture and deliver carbon dioxide to nearby oil fields to help boost crude production.

“Energy subsidies are a bipartisan problem,” said Nick Loris, a research fellow at the Heritage Foundation. “Members of Congress like them whether they’re a ‘D’ or an ‘R’ because they can look good bringing home the bacon. These programs can be difficult to end once they’re in place.”

A spokesman for Perry, who is awaiting a Senate vote on his nomination as energy secretary, said the former Texas governor “was reserving comment on these policy matters while his confirmation is pending.”

Regardless of whether government is there to help, people on both sides of the debate agree the energy industry will keep innovating toward greater efficiency and lower carbon emissions. It’s simply a matter of how quickly they get there. james.osborne@chron.com twitter.com/osborneja