Politics and Law

WASHINGTON--Energy Secretary nominee Steven Chu was greeted with warm approval from a congressional committee during his confirmation hearing Tuesday, at which he acknowledged the need to pursue nuclear and clean-coal energy but promoted energy efficiency as the best means of addressing the nation's energy challenges in the face of a dour economy.

"I feel very strongly what the American family does not want is to pay an increasing fraction of their budget on energy costs," Chu said before the Senate Energy and Natural Resources Committee. "That we do the best we can on energy efficiency--that, in my mind, remains the lowest hanging fruit."

Nobel-prize winning physicist Steven Chu, Obama's pick to be the next energy secretary, appeared before a congressional committee Tuesday.

(Credit: Stanford University)

Working toward producing more efficient cars and tightly sealed homes will bring down energy consumption and costs, he said.

Committee Chair Jeff Bingaman (D-N.M.) said Chu would be heading up the Energy Department at a "pivotal time in the department's history," noting that tens of billions of dollars in the upcoming stimulus package are likely to be devoted to energy programs.

He said that he would like the committee to vote on Chu's nomination later this week so the Nobel Prize-winning physicist could be confirmed as Energy Secretary by the entire senate on January 20, when President-elect Barack Obama takes office.

Chu would take responsibility of an increasingly important energy program at a time when funding will be sparse. Bingaman noted the lack of funding for a loan guarantee program set up by the Energy Policy Act of 2005.

Chu said that he would be able to manage the department efficiently. Since becoming director of the Lawrence Berkeley National Laboratory in 2004, he has been primarily known as a scientist, he said, but "I spent three quarters of my time paying attention to the operation side of the house."

Part of the Energy Department's $25 billion budget should go toward accelerating the development of consumer-friendly batteries for electric hybrid cars, Chu said.

"These first electric hybrid cars don't have the energy capacity and the battery lifetime we need," he said. "Let's push hard towards more fuel-efficient personal vehicles."

While the senators present endorsed Chu's enthusiasm for developing new energy technologies, many emphasized the need to put funds toward readily available energy sources like nuclear power.

"Isn't it important we accelerate this proven source of clean energy?" Sen. Jeff Sessions (R-Al.) asked with respect to nuclear power.

"I'm supportive of the fact that the nuclear industry should be part of the mix," Chu said.

He said federal loan guarantee programs should be used to jump-start the nuclear industry while the nation develops a long-term plan for safe disposal of waste and researches ways to recycle waste in an economically viable and safe manner.

"The recycling issue is something we don't need a solution for today, or even 10 years from today," Chu said. "It's like coal--one doesn't have a hard moratorium on that while we search for ways to capture carbon safely."

Chu said the United States, India, China, and Russia will not turn their backs to coal, so it is critical to find ways to use it as cleanly as possible, a sentiment many senators agreed with.

"All of us understand we need to use coal differently in the future," said Sen. Byron Dorgan (D-N.D.). "But I don't think anybody believes we're not going to use our most abundant resource."

Chu said the United States has an opportunity to develop clean-coal technologies for the rest of the world to use, and "if confirmed, I will work very hard to extensively develop these."

WASHINGTON--Trends indicate that more and more commercially successful innovations are backed by federal dollars, a researcher said Monday, and politicians should do even more--even create a cabinet-level Innovation Department--to support the innovation economy if they want to kick-start the wider national economy.

"We need economic policies that pull us out of the recession but are oriented towards innovation," said Fred Block, a sociology professor from the University of California at Davis. "What we have to do as a country is figure out how to walk and chew gum at the same time."

Block co-authored a report released Monday that urges President-elect Barack Obama to integrate support for innovation in the stimulus package he is expected to sign at the start of his term. At a conference in here Monday, academics and industry representatives pointed out the weaknesses of innovation economy and ways the government could address the systemic problems. The conference was sponsored by the Economic Policy Institute, the Information Technology and Innovation Foundation, the Breakthrough Institute, the University of California Washington Center, and the Ford Foundation.

UC Davis professor Fred Block on Monday gave his innovation policy recommendations for the incoming administration.

(Credit: Stephanie Condon/ CNET News)

Block's paper suggests increased funding for federal innovation, new mechanisms to fund fledgling technology companies, increasing public knowledge about the government's role in innovation, and creating a cabinet-level Innovation Department. The new department, Block said, would not run innovation programs itself but instead oversee interdepartmental collaboration and the use of best practices, among other things.

While some conference attendees suggested that asking for innovation policy reform at the start of the new administration was asking for too much, Block said now is the time to bring together influential constituencies with an interest in innovation policy--labor leaders looking for job creation, environmentalists interested in green technologies, and the business community.

"There's the potential in the moment for these groups to cohere into a political coalition so we just don't have stimulus but 'stim-novation,'" Block said, coining a term.

The significance of government support for innovation research and development is evident in R&D Magazine's annual "R&D 100 Awards," which recognize products that skillfully combine research with commerce, Block said. In 2006, 88 domestically produced innovations won recognition from R&D Magazine, and of those, 77 had benefited from public funds. The recognition of government-backed products has increased over the years, Block said.

The industry is clearly interested in more government collaboration, the other conference speakers said. Venture capital firms have been closely following the Department of Energy's entrepreneurs-in-residence (EIR) program, said Victor Hwang, managing partner of T2 Venture Capital.

Established in the fall of 2007, the EIR program funds VC-sponsored entrepreneurs to work in national research labs in order to develop plans to commercialize new clean energy technologies. The first three entrepreneurs were funded with a total of $300,000. On November 19, the Department of Energy announced it is expanding the program to include five more entrepreneurs, funded at $50,000 each.

"With a very minuscule amount of money you can get the whole industry to pay attention because it's been waiting for something like this to happen," Hwang said. "There's no reason this couldn't happen on a wider scale at other agencies."

Federal support could be especially helpful for cases of market failure in which fragmented, state-based policies are insufficient, the panelists said. In today's global economy, entrepreneurs need to be able to find business partners outside their own geographic region, Hwang said, but the free market does not provide a wide enough social network for that. Even state agencies will rarely look outside of their own constituencies, he said.

It is difficult for innovators to accommodate inconsistent state-level policies, such as broadband or e-waste policies, said Sun Microsystems Senior Vice President David Douglas. Sun has 10 employees who simply track state laws, he said.