Bingaman on DOE Loan Guarantee Program

February 12, 2009
02:18 PM
“Thank you all for coming here today to give us your thoughts on the Department of Energy’s Loan Guarantee Program.  This is exceptionally busy time for all of you and I appreciate your effort to make time to help us understand the challenges we face in getting these critical technologies deployed and the role this program may play in that effort. 
“I’d specifically like to thank Mr. Frantz for coming here today to try and give us the views of the Department – particularly as those views have shifted so significantly from the preceding Administration.  It’s a bit unfair to ask this new Administration to address the implementation problems of this program when they have only inherited those problems less than a month ago, but I believe this is a potentially powerful tool for meeting our energy security needs in this country, so it would be a mistake to postpone making any needed adjustments.  After my conversation with Secretary Chu yesterday, I believe he shares that view.
“Secretary Chu was gracious enough to come and meet with Senator Murkowski and me and discuss his vision for the program and what he thinks the Department can do in the immediate future to generate green jobs and begin to reorient our energy economy to fit our national needs.  It was a very encouraging meeting and I am satisfied that the Secretary understands the task ahead and the sense of urgency that will be required to address it.  I look forward to a constructive partnership between this Committee and Department in realizing his and the President’s vision.
“As I’ve noted before on this topic, the challenges we face in reorienting our energy systems from our current path are significant.  Even as many of us realize the dangers to our health, security, and welfare that continuation of the status quo presents, the size of the challenge can be daunting.  Putting a price on CO2 will help, and I believe policies such as a Renewable Electricity Standard will also be a part of the solution, but to achieve the speed and scale required, we can’t limit ourselves to one or even a few policy tools.  We should explore every possible option and be ready to adapt when policies don’t seem to get the job done.
“We are an ingenious country and no one is more aware of that than the professionals at the Department of Energy who have seen any number of potentially world-changing technologies, both within the labs and in the affiliated research institutions.  The gap that seems to exist is in navigating those technologies through the ‘valley of death’ to widespread commercial deployment.  The loan guarantee program in the 2005 energy bill was aimed squarely at that problem, but somewhere along the line it seems the guiding principles of speed and scale were lost. 
“I believe the President and Secretary Chu are bringing the necessary will and sense of urgency to this problem, but we should still ask ourselves if the structure of the program is sufficient to allow them to succeed.  Can the Department take the necessary risks – risks the private sector is unwilling to take or unable to effectively price – to enable these technologies to get over the initial hurdles to commercialization?  Will they be able to act at a sufficient scale to reduce the deployment costs that keep these technologies from effectively competing with entrenched current technologies?
“In a very real sense, we are investing in our children’s future here.  The choices we make will dramatically shape the world in which they will live, and the longer we wait, the higher the hill we must climb.  It is with that sense of urgency that I believe we must approach this problem and I appreciate the good advice all of you here today are providing us to aid our efforts.”
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