On the campaign trail—before the global economic crisis—Barack Obama said the top three things he wanted to accomplish as president were withdrawing troops from Iraq, reforming health care, and putting in place a new energy policy. A health-care bill has passed, and U.S. combat troops are on their way out of Iraq later this summer. NEWSWEEK's Fareed Zakaria recently took up the third priority with Energy Secretary Steven Chu, a Nobel Prize–winning physicist who has proven that high intelligence is not a barrier to effectiveness in government. Excerpts:
How would you describe Obama's energy policy in a few sentences?
We look at all the factors and we say, how can we get to the lowest possible level of carbon as quickly as possible and not only at the lowest cost but with the greatest possible economic opportunity for the U.S.?
When people look at the fiscal stimulus, some say if only they'd taken this opportunity to make major investments in energy, science, and infrastructure. Do you believe you are making those investments?
I would say that we are making those investments, though in some areas the effort is just to get something started. The Department of Energy is responsible for the entire energy innovation chain—from basic science research to applied research, to even beginning to help deploy and scale [new technologies]. You fund for a very short period of time—two years, three years -maximum—in hopes of opening up something big. So we are saying, swing for the fences. Now if you swing for the fences, you may strike out more. But we want a few home runs.
Is the smart grid the interstate-highway system of the 21st century?
The analogy is very apt. It will take several decades to be able to get this to [work], and the cost will be very large. Before I took this job I [participated in] a National Academies study called America's Energy Future. The total cost, public and private, that I heard was half a trillion dollars or more.
We still overwhelmingly use fossil fuels—renewables, all told, probably add up to 5 percent. What's a realistic 10-year goal?
We're at about 4 percent now. President Obama made a target to double that by 2012, and we are on target. I expect that to continue. In 10 years' time we hope to have carbon-capture-and-sequestration technologies starting to be deployed. Hopefully, we'll have restarted the nuclear industry and we'll be building several nuclear reactors.
What is the blue-sky technology that you are most hopeful about?
I see the cost of [solar] photovoltaics going down and down. Right now it's about $4 per watt for full installation. In a decade it will certainly be less than $2. If it's $1 or $1.25, then everyone will put it up without subsidy. What else do I see? A new generation of biofuels that are direct substitutes for gasoline—so, better than ethanol—using agricultural waste: weed straw, rice straw, corncobs, wood surplus.
If you look at the top 30 companies in battery, wind, and solar technology, there are only four American firms on the list. Do you think that will change? Are we going to become the leader in clean energy?
Well, I certainly hope so. We still have a lot of really high-end, innovative stuff. But you also need to send consistent signals to allow that to be deployed at scale. That's a policy issue—technology policies, R&D policies, incentives for high-value manufacturing. We are very determined. Can we lead the world in the lowest cost? No. But we can lead the world in high-quality stuff that will create quality jobs for Americans.
Do you think that having a price on carbon is crucial?
I do. I absolutely believe a price on carbon is essential—that will send a very important long-term signal. [But] if it's five years from now, I think it will be truly tragic, because other countries, notably China, are moving ahead so aggressively. They see this as their economic opportunity to lead in the next industrial revolution.
When you look at the cap-and-trade bill that is floating around Congress, is it strong enough to do what you think needs to be done?
This is my belief: get it going. The Clean Air Act in the early '90s started slowly. But it got it going. The important thing was that the cost ended up being far lower than anybody projected, including the EPA, who you might think has a vested interest in trying to low-ball the cost. It was four times lower than even the EPA estimate. Once you get it going and start making progress, very clever people start to dream up better solutions. So rather than wait around for a perfect bill that might be delayed for four or five years or forever, get it going.