Secretary of Energy Steven Chu plans to dispense tens of billions of dollars in loans in the next year in an effort to stimulate the economy and shortcut bureaucracy at the Department of Energy.
In an interview with The Wall Street Journal on Friday, Chu said that the goal is to spend about half of the roughly $37 billion set aside for clean-energy projects in the coming year.
The clean-energy provisions are a central piece of the government stimulus package, which was passed by the House earlier this week. The Senate late Friday reached an agreement on the spending bill so that it could be voted on early next week.
Existing energy legislation from 2005 set aside loans and grants for energy and auto companies but no money has been dispensed because of a slow approval process, Chu said.
"This is the pace we expect, not three years, but five months." We've got to do this and we've got to do it in a way that has not been done at the Department of Energy," he said.
The amount of money available for clean-energy related projects is actually larger than the $25 billion annual budget of the Department of Energy whose mission is largely tied to protecting the U.S.'s nuclear arsenal.
An analysis by climate change business consulting firm ICT International, which was commissioned by Greenpeace, found that early versions of the stimulus bill had set aside over $50 billion for clean-energy measure, such as smart grid technologies and auto battery research. The American Association for the Advancement of Science put the number at about $37 billion, according to the Journal.
"The synopsis of the loans I've seen in innovative green energy -- they're in the hundred-million dollar range. They're in big hunks of money," Chu said.
The provisions are a mix of direct spending or loan guarantees, which have emerged as a vital source of capital for new energy technologies companies because of the credit crisis.
A number of clean-tech companies are seeking loans from the DOE in order to build manufacturing facilities, which are difficult to get financed as banks have become more conservative or unwilling to lend. Well known clean-tech companies, including Tesla Motors and battery company A123 Systems, have applied for existing loans but haven't received money.
Chu said that less technology-oriented Department of Energy projects could be quickly dispensed through states, including roughly $6 billion set aside to weatherize homes and municipal buildings to be more energy efficient.
"The secretary is committed to streamlining the process and eliminating unnecessary paperwork so that we can make these important investments that create jobs as quickly as possible," Energy Department spokesman Dan Leistikow told Reuters.
In an interview with The Los Angeles Times earlier this week, Chu spoke about the potentially severe economic and environmental impact from climate change, particularly in California.
"I don't think the American public has gripped in its gut what could happen," he told the newspaper. "We're looking at a scenario where there's no more agriculture in California." And, he added, "I don't actually see how they can keep their cities going."