Interview with Steven Chu - Obama Presidency Oral History

Obama Presidency Oral History

Steven Chu

Secretary of Energy

Interview by Keith A. Wailoo

Steven Chu discusses his service as Secretary of Energy from 2009 to 2013 during the presidency of Barack Obama. Chu outlines the structure of the Department of Energy and its relationship to other federal agencies, and provides details about major programs and initiatives with which he was closely involved, including loan guarantee, weatherization, and retrofitting programs in the American Recovery and Reinvestment Act of 2009; changes to energy efficiency standards; investments in support of the development of the “smart grid”; incentives in support of electric vehicles; and reviews of the environmental safety of hydraulic fracturing (“fracking”). Chu also describes his role in the administration’s major disaster-response efforts, including those following the Deepwater Horizon oil spill in 2010, the Fukushima Daiichi nuclear disaster in 2011, and Superstorm Sandy in 2012. Also discussed are the importance of scientists and engineers in cabinet positions; the challenges associated with calculating the social cost of carbon; proposed cap-and-trade legislation; international climate negotiations and summits; and the perspective of the administration’s economic policy advisers toward loan guarantee programs for renewable energy development.

Session 1

Keith A. Wailoo: I need to start by thanking you, but also to say a couple of things by way of documenting this. Today is October 14, 2020. My name is Keith [A.] Wailoo. I have the pleasure of interviewing Steven Chu for the Obama Presidency Oral History project. Steven Chu served as US secretary of energy in the [Barack H.] Obama [II] administration from January 2009 to April of 2013. This is our first and only session [read: two sessions were conducted]. In this interview, we will not be discussing or disclosing information that would otherwise be classified.

Q: I want to thank you, Secretary Chu As I mentioned, it has been a while since we first talked, and this is an opportunity to hear more about your reflections on the period of time that you served in the Obama administration as secretary of energy. I thought I would ask, to start, at what point did President Obama ask you to be energy secretary, and why you decided to take on this role?

Steven Chu: I think he asked me in the first few weeks in December . I flew to Chicago [Illinois]. I was asked to fly to Chicago in the third or fourth week in November to talk to the president-elect about “a very important job.” And I said, “Well, I'm not really sure I'm interested in working in the government,” et cetera. [Laughs] But then I said, “How important?” And they mumbled, “Something like secretary of energy.” So I said, “Okay. For that, I will fly.”

Chu: The previous president's administration wanted to get me interested in being the science advisor, throwing my hat in the ring for that, [to] which I ultimately said no. I never wanted to be a bureaucrat. But I had been then director of Lawrence Berkeley National Lab [Laboratory], in large part because of climate change. And it was a great scientific organization, nearly adjacent to [University of California] Berkeley.

Chu: It was really in, maybe, the middle of December where I got the offer to be vetted. That's about when it started. You asked about why. Well, we spoke for about an hour, one on one, just the two of us. Afterward, I was very impressed by him, and I phoned my wife and said, “If this guy asks me, I will say yes.” Again, very, very impressed with everything I heard, and I thought it would be a wonderful opportunity to, again, help with the climate change agenda. He said in this interview that it would be one of the two highest things in his priority, the first being healthcare, and the second being climate change.

Chu: I have to tell you a funny story. I was put in a room. It was overheated. It must have been well over eighty degrees. I said, “Okay, it figures. He's from Hawaii.” Then he walks in, and I stand up and shake his hand. And he says, “A lot of people are telling me you should be the next secretary of energy.” So I said, “Who are these future former friends of mine?” [Laughter] Sometimes I make jokes, and he just dismisses them. He continued— [laughter] so he didn't do anything. I don't know if he even cracked a smile. But then we started talking.

Q: So it sounds as if the combination of his commitment to climate change and other impressions in that first meeting is what convinced you to take this seriously?

Chu: Sure. He asked me what my views are on a number of things. Of course, renewables, but in addition to that, nuclear—so I just told him. Nuclear is not ideal, but it appears a lot better than fossil fuel, and there has to be a place for it in the future because it's very hard to go to a hundred percent renewable any time soon. So we talked about a number of things. He nodded and asked me some questions.

Chu: It was his—just willing to sit and listen, rather than telling me what he believed, which is a proper interview. But as we talked, I realized that there was very little daylight, if any. That was another thing that weighed very heavily on me, because I did not want to serve an administration—once you join an administration, you serve the president. And I did not want to be asked to do things I did not believe in.

Q: Did you have any doubts at all? You mentioned concern about not imagining being a bureaucrat, for instance. Did you have any doubts about accepting the position?

Chu: Well, I had a warm-up exercise, as director of Lawrence Berkeley Lab. It had about four or five thousand employees. If you're the director of a national lab, it's very different than being a president of a university. More of the direct responsibility falls on your shoulders. The Department of Energy takes the director job very, very seriously. It was, at that time, about a half-to-$0.6 billion-a-year budget. In hindsight, I realized that I actually had more administrative experience than ninety-nine percent of the people in Washington [DC], because most people in DC don't actually run large organizations.

Chu: It was during the time, four and three-quarters years I was director of the lab, I learned how to be a bureaucrat, in the sense that there's a lot of responsibility. You can get some of the rougher edges knocked off you, although I was very clear and plainspoken when I was there, and also as secretary of energy. That part of my personality was not going to change. But just the experience of running a very large organization, and all that entails, from the safety of the individuals in your lab who might get hurt running down stairs, to science issues where you work with the people and decide what it is that you wanted to work on.

Chu: This is a lab, by the way, that has, in addition to the large number of people, it had about thirteen or fourteen Nobel [Prize] laureates as employees. But even more impressive than that, over thirty, maybe thirty-five, young scientists, either graduate students, postdocs [postdoctoral researchers], or beginning-career people, who were trained at the laboratory—including myself. I was a graduate student at Berkeley, but I was a lab employee for the time I was a grad student and the time I was a postdoc. So if you think of a laboratory that's going to train, let's say, three dozen Nobel laureates, and you can get them interested in the science they're doing, and, Oh, by the way, can it be helpful in climate change? That's a tremendous asset.

Q: Yes, yes. What about the political climate? Were you prepared for that aspect of the job, the politics of climate change, the politics of energy policy? Could you say a little bit more about what it was like to enter that world?

Chu: Okay. I thought I was prepared, but not quite. [Laughs] I, for example, knew that money speaks to both parties. But I learned in DC very quickly that it is not only the lingua franca of DC; it appeared to be the only language. I'm just being cynical, but—certainly, it has to do—I formulated three golden rules of politics. It had to do with rule number two, which is get reelected. Rule number one was get elected. And in order to do that in American politics, you need campaign contributions. So that certainly had an influence on what people did and who their supporters were. But I did not realize that, in some instances, donors' contributions also came with sheets of paper with bullet points that actually made it almost word for word into proposed legislation. So that was a bit of a surprise.

Chu: Other than that, I did find, on the positive side, during that time, 2009 to 2013, that there were people on both sides of the aisle who wanted to serve the country. I, especially, was incredibly impressed with the Senate Committee on Energy and Water [read: Energy and Water Appropriations Subcommittee]. The four senators in charge there were outstanding. This was [Andrew] Lamar Alexander [Jr.], Lisa [A.] Murkowski, Dianne [G.] Feinstein, and Jeff [Jesse F.] Bingaman [Jr.]. All of them great people. I got along—and they trusted each other. They actually began to trust me, or did trust me. That was fantastic, to see that.

Q: Great. Interesting. It seems that you came into the position with a major economic crisis [financial crisis of 2007–2008] and also the goals of building an economic recovery, but also with stimulus. How did that affect what you could do or couldn't do?

Chu: To put it crassly, it gave the Department of Energy three or four billion extra from its twenty-five billion a year budget. But in addition to that, the Department of Energy was asked to give advice on many other things that directly were not in the purview of the Department of Energy budget. So with that money, there was a bigger opportunity to do a number of things.

Chu: First, it was meant to be stimulus, so it really had to get jobs started. It had a two-year time line. One of the first things I did when I was secretary of energy is, I appointed a special advisor to me whose sole job was to make sure the money was spent, and spent as well as possible, given the time constraints and everything else. That was picked up by others soon thereafter, other agencies.

Chu: There are some things, I think, that worked very well, and things, in hindsight, that we could have done a little bit better. Let me give you one example of what we could have done a little bit better. Weatherization. It was a very meaningful bill. It was to help poor people within two hundred percent—factor of two [phonetic] over the poverty line, but you were very close to the poverty level, living in very dilapidated, run-down houses without proper insulation, very uncomfortable. So we retrofitted them. In hindsight, the money could have gone a lot further if there would be more cost sharing and other things.

Chu: But the major thing we did not do is, whenever you spend money, you have an opportunity to take data. The opportunity of taking data was—there were pre-investment tests of weatherization, how drafty it was, things like that—but taking data meant: What was the comfort level? How much was spent? How much was actually saved in terms of operational money? Things like that. And we had a treasure house, before and after, that we could have made uniform. One year into the program, I began to realize, Well, we missed an opportunity, but let's start taking data now.

Chu: The other thing that turned out—it was the biggest criticism of the Department of Energy, but one of the more successful ones was the loan guarantee program. Despite what opponents were saying—and opponents were not only on the Republican side; there were a lot of economists even within the administration who did not like this at all, because [that] set of economists were actually what I call the Jerry [C.] Rubin camp. [William “Bill” J.] Clinton, Bush two [George W. Bush], Obama; they were all from the same school. They were essentially—they're not quite Milton Friedman, but they were largely free market people.

Chu: Wall Street was not touching large renewable projects at the time. It was deemed too risky, because there could be delays in construction, project construction, environmental opposition to wind turbines, to solar—there was environmental opposition to seemingly about everything. So what we started doing was, we started investing in very large wind farms, solar farms, things like that, which would not have been able to have been funded by Wall Street. They just wouldn't. By very large, I mean hundreds of millions of dollars, sometimes up to half a billion dollars.

Chu: But we only funded those projects that had offtake agreements that [were] a certain rate. Although we were supposed to be funding new technology, we bent a little bit and said, Well, it's new in the sense of the size and scale, and it's the state-of-the-art technology. And one or two times, it was untested at this large scale.

Chu: By and large, those programs have paid off. There was a huge uptick in solar and wind. Solar prices were coming down, largely due to overinvestment in China, which helped. But it was the large, utility-scale things that really found a strong footing. It's now much more a darling of Wall Street than the oil and gas industry today, and for the last half a dozen years. It would have not taken hold quite as fast. It would have been delayed five, even longer, ten years, if it weren't for the fact that these very large projects, for the most part, were built on time and on budget.

Chu: In total, we don't know what the total cold losses of the—and then the automobile loan program. Our biggest loan, our riskiest loan, was to Ford Motor Company, for $6 billion. The OMB [Office of Management and Budget] decides on what the loan insurance would be. Now, what loan insurance is, is you have a loan for x amount of dollars, and you have to set aside as spent money in the Treasury to cover for losses of the portfolio. Each investment would have a certain risk. Legally, you couldn't invest in anything that had greater than a fifty percent chance of not making it. And Ford came in at fifty percent. That means we had to set aside $3 billion.

Chu: Solyndra [LLC], which was picked by the career people in the Department of Energy in the [George W.] Bush era, was the first in line. OMB had put that risk at something like twelve percent. In hindsight, who knows? Nissan [Motor Company, Ltd.] also was a big loan. So Ford is slowing up because of COVID [-19 Pandemic, 2020-], but they're going to pay. Nissan paid. Tesla [Inc.] was a big risk. Without the loan, they would have gone bankrupt that month. Half the initial investors were bailing. Fisker [Automotive] did go bankrupt. But all told, the portfolio was much more successful—it may make a small profit, it may make a teeny loss, but to make a profit when you're giving loans at three hundred basis points above Treasury, in those days, to invest in new technology—it was unheard of.

Q: This is the ARPA-E [Advanced Research Projects Agency–Energy] program, or is this separate from—

Chu: No, this is different. This was a loan program. There was one on advanced vehicle technology, so we helped Nissan with its Leaf program. We helped Ford design much more energy-efficient vehicles. By that time, remember, General Motors [Company] and Chrysler [LLC] had gone bankrupt. They were government owned. Ford planned a little bit better but was teetering on bankruptcy. They hocked their logo. That blue Ford logo? They put it in the pawnshop. [Laughter]

Chu: So that was one of the things. ARPA-E was another—that was very different. That was a funding of research. But that was something, again, which was funded for the first two years on stimulus. It was curious, because it was proposed in a National Academy [of Sciences] study in 2005 called “Rising Above the Gathering Storm [Energizing and Employing America for a Brighter Economic Future].” This was a very distinguished group of people, twenty, led by Norm [Norman R.] Augustine, the former CEO [chief executive officer] and chair of Lockheed [Martin Corporation]. It had—roughly a third of them [were] legendary CEOs or former CEOs of companies, a third of them university presidents, and a third scientists. I was in the scientist group.

Chu: We met, and the charge, if I had to say it in two sentences, was: In the flat world of the twenty-first century, what could the United States do to stay economically competitive and bring prosperity? The answer was, invest in the US. Especially invest in the intellectual capital of the US, which was education. We did not pick out any particular technology or science, or anything, except one, and that was energy, because all but one person in the group—the one person was Lee [R.] Raymond, who was then chair of Exxon Mobil [Corporation], who was against it—but everybody else felt that the challenges and the very scary prospects and risks of climate change meant that we should at least mention climate change as the singular thing in the twenty-first century that we have to pay attention to.

Chu: In that report was recommended an agency like DARPA [Defense Advanced Research Projects Agency] that would take very high risks, that would have been run out of the Department of Energy, and that would create, essentially, within the Department of Energy, a new, much riskier funding agency, where instead of trying to fund incremental things, you would fund much more daring things that could really change the world, like GPS [global positioning system] changed the world, as an example.

Chu: I was on the committee. That's how I first met Lamar Alexander. Jeff Bingaman and Lamar Alexander called for this report, on the Senate side. And I was also sent to Congress to argue for it, in terms of authorization, to the House [of Representatives]. In this hearing of a couple of hours, I was there; a person from DARPA was there; a person from ARPA Homeland Security [Homeland Security Advanced Research Projects Agency]. You probably haven't heard of ARPA Homeland Security. It flopped. And maybe one other person.

Chu: Okay. You can see how ARPA could succeed. It had one customer, the military. Energy has a very diverse set of customers, mostly in the private sector, so how could you deal with that? In the end, it was decided that it doesn't really matter who the customer is going to be. If you get the first people, it will succeed, if you worked out the logistics of reporting and everything else like that. A very wise conclusion, I thought, in this discussion of a couple of hours.

Chu: I was also sent, as a member of the committee, to the Department of Energy to convince the then-secretary of energy, Sam [Samuel W.] Bodman [III], to embrace it. By then, the Bush administration did embrace “Rising Above the Gathering Storm,” in a very serious way. It made the State of the Union address. There's an interesting story there—but you must have many questions. In any case, when I got to the Department of Energy, Sam Bodman said, “I'd love to, but my career folks here don't want to, so I don't think I can push against them.”

Chu: The new secretary of energy had a very different opinion about ARPA-E [laughs]—me, in January of 2009. It was interesting, because I was part of the discussions that led to the proposal, and I had a very clear idea in my mind how I wanted to do it.

Q: Right. And it seems like the idea of innovation in the energy sector is also something that informed the staff that you brought with you. Is that true? The Silicon Valley [California] approach to thinking about energy?

Chu: Yes. Very much, though, what happened is, there were a couple of people, my friends, who knew me as—I was a practicing scientist. I wasn't a scientist who got older and became a dean, or something like that. I was actually in the lab doing stuff. They were a little bit surprised. But I started, actually, actively—that was another thing with President Obama. I said, “Look, I know that you would want me to appoint certain people, and things like that, and I can understand this. I would look at all of them seriously. But can you give me the right and authority to hire who I want to hire?” And he said yes.

Chu: So hire who I want to hire. The chief of staff has to be politically connected. There's no debate about that. But among other people, I wanted to attract to the Department of Energy technical people who were really good, who were, again, mostly practicing scientists, with a few exceptions, because it's the practicing scientists who are actually just best. So I got on the phone and started calling up people I knew. It was a very simple pitch. I said, “Look, you were surprised I took this job. You can do it. Even if you stay for two, four, six years, that's okay. We're trying to save the world. Come join me.” About half of them took it up, people you never would have thought would work for government.

Q: One other work environment, culture question, before we turn to some specifics of what happened over the course of the four years, is the existence of an energy czar [assistant to the president for energy and climate change] in the White House. How did that—I mean, I could see how that highlights the importance of energy and climate policy. On the other hand, it divides responsibilities a little bit. Could you describe a little bit about how that worked, how that enhanced but also perhaps complicated the work of energy secretary?

Chu: Sure. In actual fact, government policy, and the execution of government policy, and the agencies, are not all centered in the Department of Energy. It's spread out among many, many people. It's [Department of the] Interior, Energy, even EPA [Environmental Protection Agency], a number of agencies. So it was good, and as you say, it highlighted the importance that this is a big deal. And so can we get all the agencies to act in a coordinated way?

Chu: The good news was, I don't think any of us, the cabinet members or equivalent level to cabinet members, had this big ego. I never thought to myself, “Well, I'm the secretary of energy. I should be in charge of this.” [Laughter] So that was good. And there were a bunch of meetings. Carol [M.] Browner is a very competent person, and she was the leader of this. But in the last analysis, when push comes to shove, it's the cabinet members who have the budget authority. So what it was really about was trying to say, “We don't want to be crosswise against each other,” and to discuss and keep each other informed of what we were doing. I thought that was a good thing. But in the end, the decisions were coming from the cabinet, plus members of Congress and members of the administration who also had ideas. But policy is set at the agency level, in the end.

Q: In terms of actual working relationships, the existence of an energy czar proved to be helpful in moving—

Chu: Yes. Yes. I mean, it wasn't as though people were going around gnashing their teeth, just another level of bureaucracy, “Why are we having these senseless meetings?” It was not like that at all. There were one or two times you would wish [laughs], being a non-bureaucrat, that the meetings would be a little shorter. But it was a way of ensuring that there was communication, which I thought was, in large part, a very good thing.

Q: Turning to the first year of the administration, it strikes me that there were a lot of agenda items, like the stimulus jobs, but also financial reform and regulation, cap and trade, and healthcare. Did you feel that the energy cap-and-trade issue—I'm just interested in your observations about whether that kind of agenda—it's important to be ambitious at the outset—too ambitious? What's the thinking that you carried into that first year?

Chu: I think when President Obama got elected, as you know, as we all know, he carried the House and he carried the Senate. There was a euphoria. The wind was to our back. But then reality begins to set in. Then a decision was made in the first year to concentrate on healthcare. At which the president took me aside and said, “Look, I know I said energy and healthcare, but next year; energy is next.”

Chu: By the end of year two, by the election in November of year two , you lose the House, and all of a sudden, a lot of things dramatically change. I think, in terms of talking and dealing with Congress on the energy side, the president was more hands off—in my opinion. I'm not a historian. But looking back at how people deal with Congress, I would say, LBJ [Lyndon B. Johnson] is probably the most effective person. He was not afraid of browbeating people with a very strong will. And I think President Obama was almost the opposite, very gentlemanly: “Okay, I told you the facts. You're reasonable people. You're going to come to some conclusion.”

Chu: He was less connected with Congress than I would have hoped. In fact, again, a funny story. This was in the last year, or something near, two-thirds of the way through. I had a few private one-on-ones with the president. This was one of them where he says, “Okay. How are you doing?” “Fine.” The first thing I said was, “Have you seen the movie Lincoln?” Steven [A.] Spielberg's movie. He said, “No, I'm going to see it in a private screening when Steven Spielberg is coming next weekend.” I said to myself, Aw, nuts. [Laughter]

Chu: Because I remember this line in Lincoln where Abraham Lincoln says, “I am cloaked in the immense authority of the president.” He wasn't above shaking down people. He wasn't above offering patron jobs, postmaster jobs, things like that, to get the Thirteenth Amendment [to the US Constitution]. Remember how it closes, where Thaddeus Stevens, the abolitionist, crawls in bed with his mistress, and says, “We passed the amendment. The most moral man did immoral things to get it.” Something like that. I'm paraphrasing. Now, I'm not asking President Obama to do immoral things. But to shake down and use the power of the presidency to really garner votes was something I wish he had done more of. He was too much of a gentleman, too standoffish about that.

Q: Right. You mentioned being pulled aside, and the number of—how many times did you have these consequential conversations about matters of energy policy, et cetera?

Chu: I think there were a few. One of them was not a quiet pull aside. It was where there was a big disagreement between me and his financial side of the house, Larry [Lawrence H.] Summers especially, and it had to do with the loan program. So this was a meeting in the Roosevelt Room [of the White House]. He just sat and listened, and sided with me.

Chu: There was another time with the chief of staff where—it was then Tim [Timothy F.] Geithner's [Department of the] Treasury. Again, they were cut from the same cloth, both of them, and they just felt that it was too much government getting into business, that the private sector should take care of it. And again, things like loans. There it was [William M.] Daley, who was then chief of staff. Go in, talk for an hour, hour and a half, and leave. What I did not realize is—I was just a scientist, so I didn't realize that Geithner had gone to see Daley before the meeting for about an hour, and then after I left, Geithner went to see Daley after the meeting. Didn't matter. Daley took my side. [Laughs]

Q: Can I ask you, what, in your view, was the winning argument? That is to say, what is compelling about the loan program, in your view, that won the day in that conversation?

Chu: The fact that it was actually instrumental in drawing in a lot of private sector money. And then you tried to de-risk—by that time, it was getting mature, and we figured out how to not do Solyndras; when you see companies beginning to go downhill, you make a very hard decision, because there are milestones and things like that. Solyndra, after half the money was dispensed, there was a fifty-fifty chance it was going to go downhill, because of the large number of solar-company failures around the world, again because of overinvestment in China. There was a surplus.

Chu: I remember a conversation with the loan people, and they said, “Well, yes, it might go bankrupt, but it may be a finished factory is better than half a factory.” And I made a mistake. The reason things were collapsing—I didn't deeply appreciate it was collapsing mostly because of overinvestment. A finished solar factory, due to overinvestment, it's not going to be used. And so I think that helped me gain insight as to what's going on. I had to personally sign for every loan. That, plus the constant criticism, keeps you on your toes. [Laughs]

Chu: With Fisker, we cut the losses. It looked like it was going to bankrupt, despite political pressures. People from Delaware calling me up and saying, “No, no, no. You can keep this alive. There are Chinese investors that are looking around it, and they may invest in it.” I said, “Look. Let me tell you, I've seen this before. I've become a little jaundiced. There are going to be two Chinese investors. They scare off the competition, because they come with huge bags of money. At the last minute, they're probably going to pull out, because they're going to wait for Fisker to go bankrupt and get it for a nickel on the dollar.” Which is exactly what happened. I was trying to explain this to the senators from Delaware: this is not going to happen. It's going to go bankrupt. Maybe we can save some of the remnants. But that's, again, part of my learning when I was there.

Q: You mentioned the Senate Committee on Energy and Water [Energy and Water Appropriations Subcommittee]. You just mentioned involvement in conversations with senators, as well. And earlier, you mentioned President Obama's slight detachment. Did you feel that you were doing a lot of the work of engaging with key senators, or is that just part and parcel of the job?

Chu: That's a very interesting thing. Because usually the way most presidents operate is, they want to get the marching orders coordinated from the White House. At year two or three, I forget when, but there was a coalition—I think John [F.] Kerry, [Joseph “Joe” I.] Lieberman, and I'm trying to remember who the Republican is. It may have been Lamar Alexander, but it wasn't. There was a bipartisan group. And I would meet with them. I would not ask permission from the White House. [Unclear] would like to talk to you. Again, they knew me as a technical person, a nonpolitical person. What should we, the United States, invest in, in order to deal with mitigating the risks of climate change? This is about building up industries. This was also still about jobs, as well, and prosperity. And they said, “We're not getting clear signals from the White House. They're not really engaging us. So we want to hear from you.” I said, “Look, I'm not speaking for the White House. But if you want to know, this is what I think,” da, da, da, da, da. So a couple of times, they would do this. That was, again, one of the signals I was getting by the time I was secretary, that the White House wasn't as engaged as they should have been.

Q: Interesting. So could you talk a little bit about—for the sake of posterity, decades from now, no one will know what the phrase “cap and trade” means. So I wonder if you could describe that, but also explain where that fit in the legislative priorities of the administration and your role in it, and the experience of going through that political conversation.

Chu: Yes. Okay. Aside from inventing better widgets and innovation that get into the marketplace because they're just superior technology, you also need policies to guide investments. In particular, you also need policies to guide polluters. There are several ways of doing that. One way is to just regulate it, like the EPA. It's illegal to dump direct chemical sludge into a river or into a lake, and if you do it, you're going to get fined. There's another way of dealing with bad behavior, and it's to tax it. Now, if you consider drinking bad behavior, then you just tax it. You tax cigarette smoking. You tax things like that. There are two forms of tax. One form is just directly tax it, and get direct revenues into the government, and then you can decide what to do with the revenues. The other way is to create a market force.

Chu: Cap and trade is a more market-force-driven way of doing it, which says, We want to decrease carbon pollution. We can put it on a schedule, and then each year, nominally, the amount that you're allowed to emit goes down. But we're going to use market forces, so that if you're one company, and you're another company, and you say, “Okay, you're getting a tax on this,” but it doesn't make as much sense for me to retrofit or do something here. Maybe I can have my carbon credits and give it over to you, so that market forces would make it much more efficient.

Chu: The economists, at first, really liked the idea of the free market making a wiser decision than just brute-force regulation or brute-force tax. But cap and trade required some discipline. What it required, mostly, is that you have to decide how much allowances you're going to give, and you have to have enough courage to knock it down, year, after year, after year. And so it didn't work, in part because the companies got in there and lobbied for a higher cap. It happened in Europe, and it happened in California. And there wasn't enough discipline to put on the screws to actually make it go down. Because as you make the amount of carbon emitted go down, in a more macro sense, it made it more costly, and it would spur more innovation and more investment.

Chu: So there were a few experiments done. Europe started it, and it went up to thirty-five euros a ton of CO2 [carbon dioxide] but very quickly went down below ten, and below ten, nothing would happen. I'm still convinced, below thirty—as technology gets better, thirty is going to become a threshold. But to really get it going, sixty to a hundred is where it needs to be, at least within a few decades from now.

Chu: And it has fallen out of favor. China actually has some version of that. But I now support the idea—I was ambivalent when I was secretary of energy, at least at the beginning, but now I'm very much in favor of a direct tax, but revenue free, no additional income to the government. It goes right back to the people who pay the tax. And since a tax on energy is a regressive tax—it affects poorer people much more than richer people, because a larger fraction of their income goes into energy, electricity, gasoline, you name it. So it should undo that.

Q: In terms of operationalizing this, that is, translating some of this into policy, it does seem as if there was movement in the first year, and signs of success in the House. Could you tell us a little bit about just how that played out, and your involvement in moving legislation, and how it came apart, in your view?

Chu: Yes. As I recall, then-congressman [Edward J.] Markey was one of the leaders in the cap and trade in Congress at the time. Lots of discussions with him, his staff, others, as they were designing the cap and trade. Whenever you do legislation, you'll be talking to the industry that gets affected by it, the lobbyists associated with those industries. But also wanting to know—from a neutral, technical point of view, the Congress and the Senate would come to the Department of Energy.

Chu: Because very early on, I established that I'm not political. I'll give you the technical advice and where we think the lay of the land is, technically. Which was good, because during the time I was there, I think I was regarded more or less—the Solyndra stuff was high theater. It was attack dog stuff that everybody knew [laughs] wasn't actually connected with any deep reality, especially after they subpoenaed truckloads of material and found nothing. But in shaping the legislation, really, what are things to watch out for? What policies? How might it affect certain industries? Those things we talked about. And then it moves from the House to the Senate, and it got stalled in the Senate.

Q: It seems that Senator Lindsey [O.] Graham's original sponsorship of it—and then at some point, I think in April, decided to withdraw sponsorship. Do you have a sense, in retrospect, as to why those positions shifted, and why this failed in the Senate? Were you involved?

Chu: I was, again, talking—I don't think it was Lindsey Graham who was the third person. But I don't remember. Anyway, during the time I was there, Lindsey Graham and I got along. Nuclear energy was a big part of his state, and I was supportive of that. I thought, at the time, he acted in a very sensible way. I couldn't understand what he was facing in terms of—I wasn't close enough to him to say, Lindsey, why are you doing this? So it was not like that. Very different than today, I might add. [Laughter] This is, like, a total stranger. Who is this guy?

Chu: In any case, in those days, I think you needed sixty percent to do anything in the Senate. Anyone could raise their hand say they wanted to filibuster. And in those days, you didn't even have to show up to filibuster. You'd just raise your hand and say it. I wish we could go back to that for Supreme Court confirmations, but never mind. [Laughter] There were a few things that that was very good at.

Q: Yes, yes. Interesting. But once that legislation failed, how did that change the energy policy, from your perspective?

Chu: I think after that, and especially after the House and then the Senate two years later, there was a realization that you're not going to get any legislation on putting a price on carbon. That was out. By the time the House was over, that was out. What you could do on the edges in terms of research and things like that, you could get Republican support for research, because that would lead to innovation, which would lead to technical things, and prosperity, and things like that. But not on the regulatory side.

Chu: There was another thing that was started in the first year among a few of us. Peter [R.] Orszag, me—I'm just remembering [phonetic]. There were two or three others—who paid attention to something that most people didn't realize at the time—this was in 2009—which is called the social cost of carbon. And what the social cost of carbon is, is it tries to put a price on, if you're going to pollute, it's going to have some adverse effects on society that are going to be sprouting [phonetic] in different places. What would be the cost to society if there is carbon pollution, which leads to climate change? It's a very hard number to pin down, because it's crystal ball stuff. Then, how do you evaluate this?

Chu: At the time, it was thirty or forty dollars a ton. I personally thought it was too low, and so I was part of a nerdy little group to actually look at how economists and others tried to make this evaluation of what the social cost would be. Now, why is this important? It actually weighs in to regulations, like efficiency regulations. The Department of Energy did the energy-efficiency regulatory part of the government. Whenever we put in a regulation, we had to prove that that regulation would be cost neutral or save money. It couldn't be viewed as an additional financial burden on the American public. But having even a modest social cost of carbon means you can go a little bit more aggressively into energy efficiency. But energy efficiency is the floor. You can't sell appliances, you can't sell this, you can't sell that, unless it has a certain efficiency. I worked with EPA, Lisa [P.] Jackson and I, on Energy Star, which was a market pull. What I was saying is, Energy Star actually—more and more consumers were looking at Energy Star refrigerators, appliances, and make some decisions based on that. It's voluntary.

Chu: My quibble with Energy Star is, it didn't keep up. And eighty-five percent of the TVs were Energy Star compliant. Well, what good is that? This is like everybody getting As at Princeton [University] and Stanford [University]. [Laughter] You want it to be a badge of honor. I thought one quarter of them could be Energy Star, but it shouldn't be a half, and it shouldn't ever be two-thirds. And then there was an “Energy Superstar” they wanted to start, which was modeled after the Japanese program.

Chu: We began to do policy things that are largely invisible, that would begin to shape what was going on, and hopefully in a longer term, so it would outlast me, it would outlast the Obama administration, to really keep track of what's right [phonetic]. Another thing that I thought was very interesting was, when we were negotiating with the automobile—this is '09. The bottom had fallen out. I wasn't in charge of bailing out GM [General Motors Company] and Chrysler, but I was with Ford. And discussions, again, with the financial people—Treasury, Larry Summers, and others—about how hard we should press them, and what we should do. I said, “Now's the time to press,” number one.

Chu: I got a call from Carol Browner, who said, “What do we do about electrical vehicles?” Because you can argue that most of the electricity is generated by fossil fuel. I said, “Look. It's going to be a decade or two before it really takes off. And if we're not much cleaner by then, we're going to be in big trouble. Give them incentive. Give them as much as you can possibly give them in mileage standards. Not based on something about what the state of affairs is”—where, at that time, still the majority of electricity was coal, followed by natural gas.

Chu: They gave them a huge plus up, which gave the automobile manufacturers an incentive to invest in electrical vehicles, for two reasons. They might have thought that it might be something in the future, but they could also get credits for their fleet average. If they get a hundred miles a gallon on an electric vehicle, they can sell more pickup trucks. In hindsight, it turns out—I don't know if you know this—but Tesla has been making a profit. Do you know where a large fraction of the profit comes from?

Q: No.

Chu: They're selling their electric vehicle credits to other automobile manufacturers.

Q: Oh, I see. [Laughter]

Chu: Which is good, because I want Tesla to succeed. So this is an invisible policy, which had a profound effect. I said, “No, give them as much—and this is why.” And Carol said, “Yes, that makes a lot of sense.

Q: Could I ask you about that? That's a wonderful anecdote. It's a great story. When she called, is this something that you just came up with as you were talking on the phone, or is it something that you required a little bit of, like, “Let me look into this?”

Chu: No, no. Right on the phone. Look, I was living energy as secretary of energy, climate change, things like that. I had an appreciation for what incentivizes people and companies. You don't learn that in physics classes. That's an intuition.

Q: It also sounds like you were trained as an economist of energy, as well. Not formally, but implicitly, to be able to talk a little bit about the way in which incentivizing electrical car production in the future should be played out. So this raises a broader question that I had. I had two questions; one about that nerdy little group that you described [laughs] and where it came from, because it's part of that story about invisible places that policy gets made. Maybe I'll go to that first, and then I'll pose my next one.

Chu: Again, most people—John [Y.] Hung may have been part of that group. I'm trying to remember. But Peter Orszag was the organizer. And then there were other economists who were pretty conservative, and they used these models for assessing things. They're all look-back models, which is one of the things that—if you look at all projections of economists using these models, they're look-back models. But if you're at an inflection point where technology is about to change, they break down. So that was one of the things.

Chu: Again, it's still hard. It's still being debated. What is the social cost? It's still about thirty or forty dollars a ton. How you do that is also—it's not purely quantitative because of forward-looking risks. There's always discount rates, and if you discount at five percent, compounded yearly, you make no allowances for something that's going to happen a hundred years from today. It's gone. [There is] big debate in the economic world about what the discount rate should be, whether you stake a standard discount rate or a standard investment, that we've seen over even long-term investments—long term would be twenty, thirty, forty years. No one makes an investment for a hundred years.

Chu: Nick [Nicholas H.] Stern thought that he had an anomalously low discount rate by most economists' standards, of half a percent, or something like that. From the mainstream economists, he was soundly booed, because that made no sense. The mainstream economists said, “No, no, no, there's nothing that can be discounted that slowly.” Another person—I'll remember his name, maybe. He died recently, a couple years ago—who said Stern was right for the wrong reasons. There should be two levels of discount. One is a normal one, and one is a very long-term thing. But the other thing that—and this is what Nick Stern argued—that if you go into [phonetic] really bad things, a hundred years from now, you can't really do a discount rate.

Chu: I was following the literature at that time. I was reading the papers. So I guess, in that sense, yes, I was becoming an economist. And what are the uncertainties? You can't—it's not like physics. You can crunch numbers and find an answer, and there's no equation. I still think that society has never had to deal with something that the worst effects would not even be a hundred years from today, it would be two hundred or three hundred years from today. It takes about a hundred years to even reach the equilibrium of the damage we've already done. It's like you're light skinned, expose yourself to get tanned all the time, and get sunburned a couple times, and then forty years later, you're getting skin cancer. Or thirty or forty years later, you have heart disease, stroke, or lung cancer from smoking. You're building up damage over a long period of time.

Chu: The time scale of the climate damage is at least fifty years, because the oceans are cold, and the top water mixing and the bottom water mixing is slow. So until the surface of the earth warms up, you're not going to see the full effect of the greenhouse gas. This was not appreciated by the public. I spent a lot of time when I was secretary of energy, before I was secretary of energy, and after I was secretary of energy, trying to get the public to understand that this is not rocket science. If you have a glass of water, and you've got a couple ice cubes in it, the glass stays cool until the ice cubes melt, even though heat is going in. You've got a cold ocean. Anyone who has scuba dived or snorkeled knows you go ten feet under, and suddenly it gets cold. You go down two kilometers, and it's a few degrees above freezing, all year. So these are things that just— [groans]. It's very, very risky.

Chu: In this little nerdy group, we talked about these things. We talked about the models and what they were using. I had a—within the Department of Energy, there's a part of it, it's this [unclear] Energy Information Agency [read: Energy Information Administration; EIA]. It was set up during the oil crisis of the '70s to keep track of fossil fuels and what's going on in the United States and the world economically, how much is being—it's just a database. Then more recently, I think maybe with [James “Jimmy” E.] Carter [Jr.], maybe before or after, they started to start to dabble in renewable energies as well as fossil energies. So it was this huge economic analysis of forecasting what was going on.

Chu: I remember when fracking [hydraulic fracturing] was just turning on, the head of the EIA said, “Well, we think the price of natural gas, it's down really low, but within half a year it's going to go up, and it's just going to climb back up.” I said, “No, it's not going to do that.” And he said, “Well, how do you know it's not going to do that?” I said, “Because all you have to do is—forget about the models. The models are looking backward.” What I can tell you is, instead of on one pad, it's horizontal drilling and fracturing. They're not getting one well. They're getting two wells, five wells, six wells. They're getting better at keeping the stuff open with the proppants. The technology is improving dramatically. Because you sink the first couple wells, and then they deplete much more quickly than normal natural gas, but the technology is getting better so fast, it's going to stay low for a while.

Chu: The next year, they came down, and said, “This year, it's going up, or the next year.” I just went up and said, “No, no, no, no, no. You're not listening to me.” [Laughter] The year after that, he says [laughs] [unclear]. I said, “Good.” I said, “Why don't you go and find out where the technology is today and where it's heading?” Because that, in large part, will help you make a better economic forecast.

Q: Did you find that there were—

Chu: But they're not—

Q: I was going to ask, did you find that there were places in the administration, during your time there, where the technical expertise that you have in addressing these kinds of issues got traction, and there were other times, as the example you just gave, where people are just not listening?

Chu: I think in something that's clearly very technical, it got a lot of traction. An example is when Fukushima [Daiichi nuclear power plant accident, Fukushima Prefecture, Japan, March 11, 2011] happened. The president wanted to know, what did John [P.] Holdren and I think? We were two physicists who know about nuclear. We did not have to think about it, or debate, or anything. We said, “Wait a minute. Don't panic. Let's figure out what's going on.” People in the White House wanted to know, should we order an evacuation? And both of us said—we had a long consultation, going in [unclear] and huddling with teams, and we said, “No, don't do that. Because evacuations can be very dangerous. Let's figure it out.”

Chu: Then, with the resources of the Department of Energy, you can start airlifting things, and sniffers, and try to help the Japanese figure out where the clouds were, where the pollutants were, and things like that. It was very helpful. Then, also, again, because I'm particularly nerdy, there are all these things about radioactive plumes going up and carrying the short-lived isotopes, like iodine, going over across the Pacific [Ocean], landing in the United States, on the West Coast and Hawaii—already, Hawaii and Alaska were picking up some of this stuff, because you could pick it up from very low. I looked at this and said, “No. Come on.” On average, these things take x number of days to get over there, and most of the iodine would have decayed. So you have to remember, iodine has a short half-life. So here's a cabinet member telling some people, “Wait a minute. What are you doing?” [Laughter]

Chu: Really scary, and this was a bad thing for the Department of Energy. As we were making decisions, and projections of plumes, and where it would be going, it turned out it wasn't ending up—early data I was looking at said—again, I would look at the data myself. It was looking like it wasn't going where they were thinking it was going, and we're picking up—there was just within—Fukushima is on the coast, but there was a little valley going up. So I called up the guys at [Lawrence] Livermore [National Laboratory], who were doing the modeling of the wind and how it would spread. And I said, “What model are you using? What's going on here? You seem to be missing what's going on.”

Chu: They said, “Oh, it's validated here, or there. We use this to validate plumes when we're doing—even in underground testing in Nevada, you have a little bit of radioactivity that squirts out, very small amounts, and above-ground testing, and these are models that have been validated a long time.” And I said, “That's great. The topography of Nevada is very different than Japan. Did you put in the topography of Japan in your models?” “Uh, no, sir.” “I think that would be a wise thing to do.” [Laughter] It's got a lot of mountains and hills and valleys. You validated it on a flat place in Nevada? Give me a break.

Chu: Then I said, “Oh, by the way, the same models we're evaluating, in case you had, let's say, a nuclear dirty bomb event in a city.” And I said, “You'd better go back, and you might want to start looking at those things, as well, because, like, in San Francisco [California], there are nanoclimates in San Francisco.” If you know San Francisco, you know that in the early evening, there's a cold finger that goes across the Golden Gate Bridge and goes directly into Berkeley, and leaves North Oakland alone. So North Oakland can be five degrees warmer than Berkeley, or six degrees warmer. I said, “There are all these nano- and microclimates that you want to be aware of. And you can use historical data.” I'm saying, “Come on, guys. This is embarrassing.” [Laughter]

Q: Another place where this probably showed up is in the Deepwater Horizon [oil spill, Gulf of Mexico, April 20, 2010]. Could you describe a little bit about your own—both personal, but also the Department of Energy's engagement with that? And that happens at a particular time in the legislative discussion about energy policy.

Chu: Right. That was, I think, in mid to late April of 2010. There's the Macondo [Prospect] blowout. The thing explodes. Deepwater then drifts, and sinks a day or two later. A huge disaster. Lots of uncertain information as to what's going on. After a week or so, I made a crazy suggestion, because in this—it's a mile deep from the surface of the Gulf of Mexico to where the wellhead was, and then another mile and a half. When the thing blew up, there was an explosion, and Deepwater Horizon then drifted off to maybe four or five degrees [phonetic], sank, and the drill head snapped. No one knew what this set of valves was. It's about two and a half stories tall, called the blowout prevention platform. Nobody knew what was happening. All you could see was underground pictures of oil and gas coming out pretty fast. And what was the state of the valves? They had very little instrumentation on that.

Chu: So I said, “Maybe you could use gamma rays to”—it's just like X-rays, where X-rays can penetrate, and you can look at your teeth. Gamma rays have deeper penetrating energies. Cobalt 60 was a great gamma ray source, because it was used in hospitals already. So it could go through this much steel, a couple inches of steel. So you take a dental X-ray, except you use gamma rays, and you expose them on one side and look in the back end. There's this huge platform with these valves coming in. And the valves come in, and there's another thing that comes in the back of it and locks it in place. There's pneumatics that push it here, and then it locks in place.

Chu: There was no readout of how much the valves had closed. It was poorly designed, to say the least, because you could have a low pressure—you could have just a visual readout. So they were sending ROVs [remotely operated underwater vehicles] down there, squirting hydraulics day after day after day. The guys at BP [plc], they, kind of, laughed at that: “Oh, God, this guy, Chu. He's from Berkeley Lab. That's where the Hulk got his dose of X-rays and became the Hulk. So he's got gamma rays on the brain.”

Chu: A day or two later, they said, “You know, he may be right. There may be a way of doing this, of using gamma rays.” I didn't tell the president. Maybe my chief of staff did. I'm not sure. But somehow, word got back to the president. So after a cabinet meeting in late April or early May, I forget when it was exactly, he goes up to me after the meeting and says, “Chu, go down there and help them stop the leak.” I said, “Okay.” [Laughter] So I go back, and I say, Well, how am I going to do this?

Chu: My answer was not as a bureaucrat. My answer was as a practicing scientist. The last thing one wanted was some commission that could go and study the damn thing. You wanted to stop the leak. So I said, “Okay, if I can assemble a half dozen really smart, out-of-the-box thinkers, and go down there, and help them, maybe with the diagnostics.” I didn't know, really, what to do. So I thought about it, talked to a few other people, assembled a list of people that I wanted to call and enlist them. Then, I think the next day, I called them. And I said, “We've got this national emergency. I'm not sure how we can help, but I'm looking for really crazy, out-of-the-box thinkers. I'm not looking for petroleum engineers.” BP had access to a lot of engineers. “I'm looking for crazies who are out-of-the-box thinkers and are quick learners.” And that was my list.

Chu: Dick [Richard L.] Garwin was one of them. Someone recommended Garwin. [I] said, “Yes, I know.” He was described by Enrico Fermi as the smartest man Fermi ever met. That's pretty high praise. And so I—“Yes, but he's eighty. Does he still have all his marbles? Is he still clicking? I'm not interested in some famous guy. I'm interested in someone who's”—and he said, “No, no, no. He's still very sharp.” So I called up him. I asked [Arunava] Arun Majumdar, the head of ARPA-E and a friend of mine. I asked a couple of people. Every one of them said yes. I called them up personally, and every one of them said yes, or they said, “Let me check. I have to get someone to take over my teaching,” or, “I have to ask my wife if it's okay.” Da, da, da. But I said [phonetic], “Fine. Call me back today.” Oh, by the way—they called me back and said, “Okay, I'm in.” And I said, “Great. First meeting tomorrow, 8:00 a.m., Houston [Texas].” And they all showed up.

Chu: We started by thinking of diagnostics. Then a week or two later, there was something called a top kill. Oil was gushing out. I don't know if you remember this. A pipe had gone—Deepwater drifted off and sank. This big pipe had kinked, and out of this broken pipe, oil and gas was gushing out. And so what they thought is, there's subsidiary lines in this—think of this—two-and-a-half-story column, massive set of valves. There are other lines on the side of it that were independently controlled. There was only one pressure gauge in the whole thing, and it was erratic, so we didn't know what was going on. So we said, “What is the state of the blowout prevention platform? Is there any way of, let's say, injecting material on the top to actually overcome the oil and gas coming out?” So that was the strategy.

Chu: Once you could hook up these lines, which were still operational, to something on the surface, then you have a little loop, and you could put pressure gauges in it, where you actually have pressure management. So I said, “Great. You're going to try throwing stuff down”—“stuff” as in junk, little foam pieces of rubber; actually, one of them was golf balls; pieces of plastic; mud; everything. One by one, there was a game plan. I said, “Great. But every time before you do the next test, if it doesn't work, if it doesn't stop, use the remotely controlled valves and measure the pressure across each section. It will take ten minutes. You can shut off this valve, measure the pressure, shut off this valve—isolate each in turn.”

Chu: After the first attempt, it didn't work. It's like two in the morning in the control room. It didn't work, and they went to the next one. I threw a temper tantrum. I said, “Wait a minute. You guys promised me you would make these measurements, and you didn't. And you're going to make these measurements, or I'm going to get on the phone.” Admiral [Thad W.] Allen was also there. He backed me up.

Chu: None of it worked. But the pressure managements were the first thing that gave insight into what was happening in the valves. It was very clear most of them had not closed at all completely, and things like that. They came back the next day and said, “Okay. We've analyzed the pressure. We think the well is damaged. We think the valves are this.” The well is damaged, meaning, in the explosion two and a half miles deep, there was enough explosive force that, in the steel casing that goes down there—you drill a hole, you sink a steel casing, you backfill with cement. Underwater, you have to have double casings. If the explosion was bad enough, it would have either pushed out the poppet valves, the pressure release, so it doesn't fracture the whole casing, or else it would just fracture the whole casing.

Chu: If the well is damaged, and you could seal up on top, that would be bad news, because then the pressure from the reservoir would actually leak out through the casing. It's underground, remember. One mile deep starts the ground, one and a half miles deep is where the well head is, where the pressure is. It would leak up, and it would go to the surface. Then, all of a sudden, the pressure in the well equals the pressure one mile deep. That would be very bad news. So having the well be damaged was—it meant you could never seal the well on top. So how do you stop it if the well is damaged? You go on the bottom, and you drill an intersecting well. And then at the place where it's into the reservoir, you put in stuff, and as the stuff rises, the weight of the stuff you put in, what's called drilling mud, then has a density such that it's the force, and that stops flow off [phonetic]. But that would take two and a half months.

Chu: So they said, “The well is damaged.” And I said, “No, I've been thinking about it too.” This is no committee, no nothing. It was just a couple of us. And I said, “No, I don't think so. I'm not convinced. It could be either way. This is why.” They said, “Okay.” They come back the next day and said, “I think you're right. There's no convincing evidence that it's damaged or not.”

Chu: There were many, many instances like this, where after [unclear] [laughs], and they would give me all the data, and our little team, all the data. In the end, it turns out being head of the Department of Energy was really good, because there came a thing where, again, the well could be damaged or it couldn't be. But if it wasn't damaged, you could maybe put something on top of it and seal it. But you first had to get rid of the broken pipe and all this other stuff. So what happened is, they figured out a way of getting little hydraulic things—you know, the flange that the pipe was—we're talking about, like, two meters in diameter. Everything was big. It's not like a little kitchen pipe. They unbolted it, which is great, because it means you could take it off, and you could actually seal it with something hard. Because other than that, you would have to put something that wasn't loose fitting, and it wasn't—

Chu: Once you got this thing off, you say, “Oh, my gosh, we can get the thing off. We can design another ceiling cap.” It's a mini blowout-prevention platform instead of a bunch more valves. They were quickly designing this within BP, and a company that they also hired. After that failed attempt, I told Admiral Allen, “From here on in, BP is not to make a move unless we approve of it.”

Chu: My little team said, “You don't want to do this, Steve, because if you do that, you're going to assume some of the responsibility.” I said, “I don't care. If something goes wrong, I'll for sure get fired, but based on the best evidence at the time, I'm okay with that.” Bureaucrats actually don't think that way. [Laughter] Hide behind a committee. And I didn't have a committee. We never took a vote, by the way. We just discussed things. In the end, I said, “Don't worry about it. It's on me.” But they're smart people, and I just wanted to listen to what was going on. It was a back-and-forth, and there were arguments. Not emotional arguments; more intellectual arguments on what was going on.

Chu: Anyway, going back to this. I said, “Great.” They gave us the blueprints, so I looked at them, and I said, “Okay. We're going to get the guys at the weapons labs to see, is this designed well enough?” This was around July fourth. I remember that, because I called up the director of Los Alamos [National Laboratory] and said, “Look. I've got a job for you. I wanted you guys to—we've got this new design. We've got the thing off. We know what the pressure is at the bottom of the well—at least what it was initially. We want to know whether this was designed properly, and what are the risks, and what's going on.” And he says, “Well, sir, you know what day it is today.” I said, “No, what day is it?” He says, “Well, it's the Fourth of July.” So I said, “Oh, okay. They're probably at picnics. Well, wait until six o'clock, and then give them a call.” [Laughter]

Chu: For the next three days, which they were probably pulling all-nighters, they went over the design with a fine-tooth comb and came back with two recommendations. First, it was under-designed. Given the pressure of what we knew the well had, you take the known pressure, and you don't have to multiply it by a huge—you just, worst case, [unclear] if the pressure is still there. It was designed according to American Petroleum Institute standards. I was also talking to other oil companies, and they were saying, “No, no. You've got to use thicker steel, because they're designed to yield strength.” Let me tell you, when steel begins to yield, it's like an aneurysm. It doesn't lead to any good [Laughs]. It plasticly deforms, and then it could rupture later. This is a big deal, because it's a blight on the entire oil industry. It's like when a nuclear accident happens. It affects the entire nuclear industry. So if this wasn't good enough—affecting the entire oil industry.

Chu: I said, “Fine. You've got to do this, this, and that.” Huge debate about pressure gauges. They wanted one pressure gauge, and I said, “No, no, no. Five. Here's where I want them.” “No, no, no. One.” So we had a knock down, drag out with the CEO of BP, who finally said, “Okay, look. Give him three.” [Laughter] “Give me two, three pressure gauges. Not one, just a compromise.”

Chu: The other thing, which is even more serious, was, the blowout prevention platform is vertical. Remember, I said the ship went off and sank. It stretched the drilling pipe from vertical to forty-five degrees. Now, this is square of two longer, like a rubber band. When it was being stretched like this big rubber band, the platform tilted two degrees in bedrock, and then there's a swivel head, which is a gigantic, one-and-a-half or two meters, elastomeric joint, that was pulled over to hit the stop another six degrees, and it was stuck in that position. And then the thing sank.

Chu: The guys at Los Alamos said, “You know what? You don't want to put this thing on top of this, because two degrees plus six degrees, that's eight degrees, and it weighs enough that it could rip off the elastomer. If it rips off the elastomer, I'm sorry. You're never going to seal the well. You're going to have to wait for the relief well.” So, “Thank you very much. Go back to BP. Here are the calculations on that. Here are the calculations on yield strength.” They got to me a day later, and they were very impressed. They said, “These are really good calculations.” And they said, “You're right. You're right about both.”

Chu: [Laughter] And so [unclear] we started doing the calculations, and I said, “Yes, it's too risky. This elastomer—the weight could have tipped it.” [Unclear] you can think of a way—and they figured this one out—how to straighten it. So what they did is, they have this two degrees plus six degrees, and they put these little hydraulic things, lots of them, with the ROVs, these submersibles, remote, and they put it in, and you pneumatically pump, pump, pump, and they straightened out so it went to the middle. And now it's only two degrees. And the calculations say, two degrees, you're safe. At eight degrees, you're not safe. Okay?

Chu: Again, this is an example of, “Boy, they actually needed us.” We prevented them from doing a few tragic things, and also the fact that you could look at sealing the well. There were lots of nail-biting adventures when we did finally seal it, arguments here and there. Again, one of them had to be adjudicated by Bob [Robert W.] Dudley, the new CEO, who is a great guy. It was a very bonding experience, actually, between Dudley and me, because some of his other senior VPs [vice presidents] were against some of the things.

Chu: I met him years later, four years later, at an Oslo [Norway] energy conference [Oslo Energy Forum]. He said, “Yes, remember that time when the hurricane was coming, and we didn't have enough data to know whether the well was damaged or not? And what are you going to do? Do you open up the valve and let it leak, because all the ships had to clear out, or do you keep it sealed?” There, my group of advisors were at a fifty-fifty split. They just said, “No. Under no circumstances. It's too risky. The well still could be damaged. Let it.” I, and I think one or two others, said, “It's worth the risk.” So I said, “Okay. We'll keep it sealed. I think we'll keep it sealed.” It was nail biting.

Chu: It was fun. I spent half my time in Houston, and half I would come back. Some of the cabinet members would look at me, and some people at the Department of Energy said, “Steve, this is incredibly stressful. What's going on? You look happy.” I said, “Yes, I am happy. I'm solving a technical problem. This is what I love to do.”

Q: There are so few, I would guess, such satisfying technical problems as Department of Energy secretary, right? It's a pretty amazing story.

Chu: There were really good—I mean, in choosing what to invest in, it was really fun, because I hired such good people. But they would want my advice. So they'd say, “We're thinking of financing this, this, and this.” And we would sit down and have these critiques for an hour or two. The career people were just aghast. They had never had a secretary of energy who was willing to sit down, and listen, and brainstorm. Because I was an active scientist. And I love learning about stuff, so they loved that, too. It was a great job. I loved the job.

Q: Can I ask you just one last question about the impact of that Deepwater Horizon oil spill on drilling policy, other issues? Was there a ripple effect from these kinds of crises, or was it just technical, solve the problem, and then move on?

Chu: Yes, great question. I think the hope was that you learn from this, to have blowout prevention platforms with only one pressure gauge is ludicrous; that you could easily design things on the low-pressure side, so when valves go in and something goes across, that you cut out in the metal, that you can just see optically how—because it's a wedge thing, so it will tell you exactly how much the valve is closed. So there could be things that weren't designed into this.

Chu: It was astounding. I toured—I think it was the manufacturer, bought this company called Cameron [International Corporation]. And I toured, so I learned about blowout prevention platforms and everything. Who is the—then-head of Exxon Mobil, who then became secretary of state [Rex W. Tillerson]. He goes into my office and tries to convince me that BP is an anomaly, it's a very risky company, Exxon does things in a much more responsible way, blah, blah, blah, blah, blah. And so I said, “You're probably right. From what I've learned, BP did a lot of things in a very risky way, not according to industry standards.”

Chu: Not regulation, but practice. Like, remember this double well liner? Usually what happens is, you have these stops where there's casings, so that if there's an oil leak in between the two steel tubes, it would stop in these stops. Because there was a great concern, in the well, that maybe the oil and gas was leaking around in the annulus, the space between the two concentric rings. I learned that industry standards in deep wells underwater, you actually have these stops. It costs more money, but you need to do this. They didn't. They took the cheapest route possible.

Chu: So there are many, many things that regulations—here's an opportunity to increase the regulations, make the blowout prevention platforms more reliable, things of that nature. There was a National Academy of Engineering report that detailed—after all this dust had settled, it detailed many of the recommendations. We thought that these were going to sail through, and industry actually stopped most of them, or they got them rolled back over the next ten years. It's now 2020. This was 2010. Well, after eight years, because the reports were coming out a year or two later. Very sad.

Q: Just looking at the time, I think we have about twenty minutes left, so I wanted to—you mentioned Oslo. And maybe you can say a little bit about the US energy policy, particularly climate mitigation policy, in relationship to international relations, working with other nations, the tensions between developing countries and the US, and the role of the Department of Energy in these—in Copenhagen [Denmark], in the UN meeting there [United Nations Climate Change Conference, December]; in Oslo. If you give me a sense of how you navigated those international waters.

Chu: That's where working for President Obama was great, because it was very different than during Bush two. President Obama did feel very strongly about the risks of climate change. It doesn't have to be proven. It's just risky business. And Copenhagen was a bit of a disappointment in the end, because in Copenhagen, the developing countries still said to developed countries, “It's on you. You're the ones who did all the pollution. You're rich. You should take care of it, and you should also give us money so that we can help adapt and mitigate, as well. But we're too poor.” So there was a stalemate. Despite hopes, it didn't lead to anything real in Copenhagen.

Chu: As things continued, things were going—what really happened, I think, is Obama and Xi Jinping actually decided they're not going to have a rerun of this in Paris [France]. Those two said—I mean, there are three major players. There's the EU [European Union], there's US, and China, in terms of the economies of the world. But those are two-thirds, three-quarters of the entire economy of the world, at that time, something like that. And EU was already on board, setting policies in that general direction. But the US was not, and neither was China.

Chu: China has the advantage that a lot of people within the high-ups in the administration are technically trained. They're engineers. Up until Xi Jinping, in the previous—they have these ten-year governments, five-plus-five-year governments. In Jiang Zemin's time, and in Hu Jintao's time—that's twenty years—about seventy-five, eighty percent of the highest-level government leaders were trained as engineers. I wish that the United States could have fifty percent [laughter] or thirty percent trained as engineers and scientists. So in China, it's a very, very different thing. Yes, it's a one-party, now dictator system, where there has not been a lot of discussions about, what are some facts, and what is evidence? You know, you get very quickly beyond that.

Chu: What I think the huge breakthrough was, was to get China to say, “Even though we're a developing country, we should also be much more aggressive and also work towards saying we're going to limit our carbon emissions, we're going to cap it, we're going to bring it down, and we're going to invest heavily in it. And we are not asking for a—” They actually played the game very well, in terms of getting a lot of money into China for energy investments. But they actually said, “No, the developing world has to be a part of this solution. We can't say we're going to do nothing about it and leave it to the developed world, the OECD [Organisation for Economic Co-operation and Development] countries, to do this.” And that was the huge breakthrough.

Q: What was your involvement in those kinds of international conversations, as the secretary?

Chu: This is again more of—I don't negotiate with heads of state, so this is more of—as the head of an agency that has technical chops, what's going on? What are the risks? Again, when you're doing policy, you have to have a view on what could happen five years, ten years, twenty years from today. And how much it's going to cost really depends a lot on where you think technology is going to be, what do you think the cost of cleaner energy is going to be? Because that all is in this grand political compromise.

Chu: I was definitely not of the opinion that we have all the technology we need, [that] all we need is the pollical will, and it will be taken care of. When I hear stuff like that, it's just—no. We heard stuff like that from twenty years ago, that we have all the technology in place, and we only need the political will, and it's just not true. Even today, in order for the United States, which is very rich in solar and wind, relative to the rest of the world, to get above fifty percent renewable, not on a capacity basis but on an as-used basis, is nontrivial. To get to eighty percent is really nontrivial. You need energy on demand, and so either you have energy on demand because of energy storage, or you use fossil fuel, which is a form of energy storage; it's just stored a hundred million years ago. But you can't turn off the lights; you can't turn off the factories. You can't turn off those things. Again, the Department of Energy would say, “Okay, this is what we think is coming down the pipe. This is what the costs are now,” et cetera. So that folds into how you make a plan.

Chu: Believe it or not, it should fold even more into how you should make a plan going into the future. Let me give you an example. I was surprised, personally, of the cost of solar, how quickly it dropped. And I was optimistic. I still think solar and wind will get lower cost by twofold from today. The technological runway is not—I think batteries—I know this because I now do some research in batteries, and I'm also on the board of a battery company—that within five or ten years, we're going to have a battery that—the cost is one thing, but the other major factor is, how fast can you charge? Suppose you had a $25,000 car that could go three hundred miles, but you can charge 150 or 200 miles in five minutes. If you had a battery like that, the whole conception of how electric vehicles get deployed is different.

Chu: Even when I was secretary of energy, I said, “We don't want to use public funds to build charging stations, one or two, in front of the mayor's office, which gets huge political support. This is ribbon cutting, TV time.” And well-meaning people said, “Well, how are you going to do this? You need charging stations. You can either put them in public parking spaces or wherever. You can't put them in company parking places. You can't do them at home.” And I said, “Let's wait. Maybe you can get a fast-charge battery.” They're saying, “When is that going to happen?” I said, “I don't know, but let's not spend hundreds of billions of dollars, or tens, on that.”

Chu: Now I think it's within five—I'm at a company that we have a battery that is 3C charge. That means in a third of an hour, it charges to eighty percent capacity. It's not in mass production yet, but we're shipping out samples. Okay, eighty percent capacity means—and the charging is very nonlinear. It goes like this. So for the first half or two thirds, it's one third of the time. This is just one of several companies. I've been telling people for the last five years, this is the last really big thing. Five minutes, six minutes. I give talks. If the battery lasts longer than a human bladder, the show is over. You've just got to make your battery last longer than the bladder. Because by the time you're discharging yourself, if you're half full in your car, that's okay. Then you can go to a service station model. You can slowly replace the diesel and gasoline pumps with electric chargers. You run a couple megawatts through the service stations. Very, very different.

Chu: So I'm very optimistic. I try and do that [phonetic]. Very optimistic about—I realized years ago that cobalt is just not—it's too expensive. Nickel, maybe, but cobalt—just way too expensive, and the formulation getting down—your cell phone is cobalt oxide. You can do that in a cell phone. Right now, the EV [electric vehicle] batteries are two, three percent cobalt, instead of, like, a hundred percent cobalt. And you've got to get rid of it. So now I'm collaborating, and I said, “Look, we've got to get rid of all that stuff, even nickel. Sulfur. No one's been able to make a commercial sulfur battery.” I said, “Yes, but if you can get it, it's going to change the world.” So this is what I'm going to work on. I'm not going to work on minor things.

Q: Yes, yes. Can I ask you a couple more questions? One about the—you commented on the fact of watching advances roll back in the subsequent administration. And I wondered if you had reflections on the legacy of the work that you did in the administration, in the Department of Energy, and what has endured. What's the groundwork that you were able to lay? And maybe it was in the first two years, or maybe it was in the entire four years, that have enduring implications for energy policy [crosstalk]—

Q: No, it's the entire time. Great question. Policies. Policies are tough, because the EPA, especially, but also in Energy, you see this rollback. And safety things. Safety was [Department of the] Interior, by the way. Oil safety is an Interior policy. You can roll back policies. But once you get a technology that is becoming economically competitive on its own standing, and can stand on its own legs, you don't roll that back. As an example, wind farms and solar farms; it's now a better investment from Wall Street's side than an oil refinery. And so because you can build them on budget, on time, they work, the technology is getting better and better—hey, you can't take that away.

Q: Every time you do something in research that leads to an innovation and leads to lower costs, and that you don't need a subsidy for it, you win. Now, invariably, at the very beginning, you need to subsidize many, many things. So on that point, I'm very comfortable with it. You can't roll back that. The genie is out of the bottle for good. So I feel very good about that. The oil safety regulations—again, it's Interior and EPA, but it's going to oscillate. It's going to go back and forth, depending on which regime is in office.

Q: And then there are these older—something we didn't get a chance to talk about is ethanol. There's the forward-looking energy efficiency. Could you describe a little bit about ethanol politics in your time in office?

Chu: I always viewed it as a farm subsidy. And it was a farm subsidy. The technology for how carbon neutral was it, was getting better and better, but it was like taking a fundamentally non-great idea and making it almost marginally okay, maybe. But not really. Which is very different than sugarcane, which makes a lot of its own fertilizer, and is a perennial, so it's not having to be planted every year, so the plant pops up. So very, very different.

Chu: The hope was that you could go to cellulosic ethanol and use all the waste products of agriculture, the wheat straw, the rice straw. Half the corn stover you have to plow back in the ground for fertilizer reasons, but the other half you take. Wood chips, all this stuff. When I was secretary of energy, we started research into how to break down this very hard, recalcitrant—I mean, the microbes don't like to eat this stuff, because it was designed by nature so the microbes don't eat this stuff. If you're a plant, you don't want microbes to do that.

Chu: Progress has been made. It's still not economically viable. It's harder, because at the time, we were hoping it would be a hundred dollars a barrel, maybe going to $150 a barrel. Right now, I see forty or fifty dollars a barrel for the next couple decades, maybe forever, because demand is actually going to peak and go down. And when the fast-charge batteries come along, it's really going to plunge. So what's left are airplanes and long-haul trucking, and things like that. Again, it's a technology that—we still need an alternative fuel, especially for airplanes. Liquid hydrocarbons is the fuel.

Q: Was it fairly clear to you after the election for the second term that you were not interested in continuing?

Chu: No, I was. My wife wasn't. Sometime after the election—I don't remember whether it was December or something like that, late November, early December—she said, “You know, Steve”—she hated DC, because the only people in DC who wanted to talk to her, wanted to talk to her to get to me. She did make good friends. She's British, and so she made good friends with the ambassador, then-ambassador, to the United States from Great Britain, and his wife, but very few other friends. So she had four grandchildren from a previous marriage living in Stanford [California], growing up, and she would fly back every month to go and visit them for a couple days, go to all their birthdays. She takes grandmothering very, very seriously.

Chu: She said, “Steve, no one's irreplaceable, not even you. [Laughter] I've had enough. I'm going back to California. I hope you join me.” She doesn't claim she said it quite that way. [Laughter]

Q: That's how you heard it.

Chu: That's how I heard it, I claim. After that, I met with the president and said, “Look, I'm sorry. Even though Congress is not on our side now, I still think there's a lot to be done, but I have another boss, and she wants to go back to California. So I've decided I'm [unclear].”

Q: Do you think that the work that you did in the first four years laid the groundwork for things like the later energy legislation? Is that a completely different story, like the Energy Efficiency Improvement Act [of], or do you think of it as, the first four years is its own thing, and then—

Chu: No, it's a continuum of things. I think you go in there, you serve your time, do what you can do when you go in there. And Ernie [Ernest J.] Moniz picked up the ball. But actually, I picked up the ball from Sam Bodman, who was serving in a Republican administration, but there was not much daylight between Sam Bodman and me, either. And so with Sam Bodman—who was trained as a chemical engineer, by the way, before he made a fortune in finance—me, and then Ernie, you had this thing where—and I'm an energy-efficiency fanatic. This is the cheapest, best way to save money.

Chu: I used to give talks all the time and say, “Look, long before I was worried about climate change, I wanted to save energy, because I'm fundamentally cheap. I hate throwing away money. [Laughs] So I don't care if you—why do you want to throw away money? The free market economists would say, these energy-efficiency guys, they don't understand. Are there twenty-dollar bills on the floor waiting to be picked up? No. The free market—” Then I started to joke, “How many free market economists does it take to change a lightbulb?” And the answer is none, because the free market would have taken care of it. You didn't need to change it.

Chu: But in fact, it doesn't. It doesn't. Energy-efficiency standards never will enter into the cost of the product, the first thing. As an example, I gave public talks when I was secretary of energy. Cable TV. There were these set-top boxes that were warm, in those days, really warm. If they were in closed cabinets, it was hot. And I said, “With a hard disk, they would be forty watts. Forty watts, on all the time. Don't think they turn off. When you push the thing to turn it off, they only turn off the display. They leave the entire electronics package on. They leave the hard disk spinning.” I said, “This is ridiculous.” And I said, “They're forty watts. It should be four-tenths of a watt.” How did I get four-tenths of a watt? I looked at all the remote control things where you really turn it off and stand by. All you need to have on was a little light sensor that says when you tell me to turn on, I can turn on.

Chu: Then I said, “We're going to have regulations.” And then the DVD [digital versatile disk] and cable TV lobbyists come into my office and say, “You can't do that. You need these things on all the time, because there's a program,” and things like that. I said, “Wait a minute. See this? Quartz oscillator. The battery lasts two years. You can actually have a quartz oscillator to wake up, and it takes five minutes to program at night, and then turn itself off. Don't tell me you have to leave it on.” Never had they had a secretary of energy that said, “No, no, no, no, no. That's just bullshit.” [Laughter] I didn't use the word “bullshit.” I said, “No, I'm sorry. You don't need this. But I tell you what. I'll be willing to make you a deal. How about four watts instead of four-tenths of a watt?”

Chu: You know what they did? They waited for me to leave, because Ernie Moniz was not that fanatical. He was great, by the way, in the Iran negotiations. But he doesn't like to get in the weeds and stuff like this, and I love getting in the weeds.

Q: Fascinating. I just found myself wondering how your joke about free market economists changing light bulbs went over with Larry Summers.

Chu: Oh, you know, he and I, we crossed swords, but we actually respect each other. I went to his going-away party. He left after a year, year and a half. And he invited me to play golf. Then, I was still playing golf, and I played with him twice. I said, “Larry, we don't always agree, but I enjoyed it.” Because sometimes we'd get in these arguments in the Roosevelt Room, and everybody else would just stand back, and we'd be [laughs] arguing with each other. Because Larry does not like to lose an argument. But they said, “God, you're the only person that he would actually lose to, and he'd have to listen to you. What's going on here?”

Chu: But he said some sensible things, too. So I said at his going away party, I said, “All right. I'm sorry, but even learning more and more about it—I've decided I'm going to learn about economics.” So he said, “Remember the time we first played golf on this course in DC, and we had a caddy.” There's a foursome, and he got a caddy. I was lining up to make a putt. And he said, “You were going to putt, and the caddy says, ‘No, not there. Go this way.' [Unclear] these long, curving putts.” He said, “Do you remember what you did?” And I said, “Sort of.” He said, “You didn't take his advice. You putted exactly where you were lining up. And the ball ended up exactly where he said it was going to end up if you putted going that direction.” And he says, “Listen, there must have been at least a hundred IQ [intelligence quotient] difference between you and him.” So then he said, “You know, you're a smart guy. You think you can learn economics. But sometimes, experience matters.” [Laughter]

Q: Great story.

Chu: It was very funny.

Q: That's great. Well, I think I have exhausted two hours without a break, which I was told I should offer, but I didn't, because it was such a great conversation. I hope you'll forgive me for that. I want to thank you again for this. Anything that we've left off the table, that we haven't touched on, that you feel like it wouldn't be complete unless you mention?

Chu: Oh, I haven't really thought about this. But I think, yes, there's something. I made this quip about how I was the first scientist in a cabinet position. But I was not the only scientist. Ernie was a scientist; he was a scientist. Long ago, he became a director of stuff. And one of the things that I hired back and got to be head of the Office of Science was a friend of mine, William [F.] Brinkman, very distinguished, National Academy [of Sciences], Princeton professor for a long time after Bell Labs. He became vice president of research at Bell Labs. And I said, “Come back and run the Office of Science,” which he did until I left. There's a number of people that said, “I'm here because you're here. If you're leaving, I'm leaving.” So that was [unclear] said, “No, no, no.” A couple of people did stay, but a lot of them did not.

Chu: During this time, he said, “You know, you're different than me.” I said, “Well, how is that?” He said, “Because you're still a practicing scientist.” When I came out, I said, I'm going to start life as a new assistant professor at Stanford—because I had no laboratory, no space, no nothing—and I'm going to do new research. I'm not going to do what I did before I was secretary of energy. And he said, “Because when you hear about a problem, you actually think about solutions to a problem. When I hear about a problem, I'm thinking about, who are the people you can get in contact to who are true experts?” And he said, “There's a difference.”

Chu: That's not to say that I can't get a hold of experts, because as a scientist who has some respect, you can actually get on the phone and call anyone you want, which I did quite often. But there is a difference. So to have—but I'll [unclear] the next scientist. Someone steeped in evaluating information. But it's good to have a few scientists, as well, in the real centers of power, not as an undersecretary, not as an advisor, like the science advisor, head of the OSTP [Office of Science and Technology Policy], because that's an advisory role. When you have budget authority, it's very different.

Chu: As I said before, I wasn't interested in being an advisor. I am an advisor—except with this administration, I'm not. But in previous administrations, I would be called to advise. In the oil crisis, I was called in with two or three other scientists, and we spent a whole morning, ten to one, or ten to twelve thirty, with George W. Bush. I was talking about alternative fuels and things like that. But to have a US government that had at the very highest levels, who have real authority, not just one, but three or four, scientists—it changes the way you look at information. It changes how you evaluate information. And it would be very good. Scientists or engineers, I don't really care. Someone who is in some hardcore quantitative thing, dispassionate and data driven. It can help lift things from, “This is your opinion and that's my opinion,” to, “Hey, let's go out and get the data.”

Chu: I would hope—I don't know if it's ever—and my hat is off to Obama, because I don't do politics. I didn't know him. He chose me. So that was a first. So when I told him my wife was going back to California and I had to [phonetic]—and there were a lot of people in his inner circle who thought I was a bit of a pain in the butt. [Laughs] I said, “Look. I'm the first scientist cabinet member. I know a lot of people are advising you not to do it, but do it again.” And he did.

Q: Yes, yes. That's great.

Chu: I think it served him well.

Q: Hopefully it's also guidance for the next administration.

Chu: I think so. I think if—well, it depends. If [Joseph “Joe” R.] Biden [Jr.] gets elected, I think he will do that.

Q: Great. Well, Secretary Chu

Session 2

Keith A. Wailoo: Sounds like we're recording. Let me just say that today is November 10, 2020. This is Keith [A.] Wailoo. I have the pleasure of interviewing Steven Chu for the Obama Presidency Oral History project. Steven Chu served as US secretary of energy in the [Barack H.] Obama [II] administration from January 2009 to April 2013. This is our second of two interview sessions. In this interview we will not be discussing or disclosing information that would otherwise be classified. Thank you very much for agreeing to do a second interview to delve more into a few other topics. I think we could've easily stopped after the first session, but there are a few more topics that I think we might, as I said, deepen our conversation about—just to very quickly overview them, they are things like your thinking about climate change, a couple more questions having to do with disasters, the BP [Deepwater Horizon oil spill] story, [Upper] Big Branch mining disaster, smart grid. And then the role of a lot of things like gas prices, clean coal, hydraulic fracturing as they impacted the work that you did, Keystone XL pipeline, et cetera.

Q: Those are the kinds of topics that I had in mind, and of course anything else that you would like to add. I thought I would start with the climate change question, in particular the international element. We touched a little bit on the US politics of energy use and climate change, but I was wondering how you saw the possibilities of international climate change agreements based on your involvement in Copenhagen [Accord, international agreement on climate change,], and then really leading towards the Paris [Agreement, international treaty on climate change,], et cetera, your assessment of what was memorable about those meetings in terms of seeking international agreement but also the tensions between developing and developed countries over who's responsible and how to tackle something as big as this. I just wanted to hear your thoughts about—there seem to be lots of grand ideas about what was possible—and your thoughts.

Steven Chu: Regarding Copenhagen, there were grand ideas, and that's the hope. It's not an expectation, certainly hopes. Even before the administration, I was being asked to comment and put in my two cents about what was going on. But during the administration there was a great hope. And as I recall there was a last-minute partial saving [phonetic] when Obama, who was very committed to supporting international agreements, tried to make a deal with China. But in the end, the developing countries felt that they should not be held responsible for taking action at this point. They're poor, they're developing. They wanted the more developed countries, the richer countries, to help them not only mitigate but to adapt. Their view was: “Look, you made the problem [laughs] and you're richer than us, so why don't you help take the lead in solving the problem? But don't ask us to commit to anything until we're [on] a stronger financial footing and we have more developed economies.” And so that was fundamentally the impasse in Copenhagen [Denmark].

Chu: Then there were some of the developed countries, including the United States—there were certain factions of the United States who said, “No, why should we do this?” Especially the richer developing countries, notably China; they'd say, “They're just getting free handouts. Why should we do anything when they don't want to do anything and their carbon emissions are rising much faster than ours?” So that was also part of the pushback not to say, “All right, you're correct. You, the developing countries, are correct. We will do our part.” There were big debates, as I recall, about the size of the funds that would be transferred.

Chu: What happened from there to the lead-up to Paris [France]—the most remarkable thing was, again from my vantage point, the deal that President Obama and President Xi Jinping brokered before the agreement where they agreed that China did have a responsibility. Although it was still officially a developing country, it was willing to say, “No, we're going to do our part. We're going to begin to make pledges first to when we're going to stop the growth of carbon emissions and eventually bring down carbon emissions.” It almost felt like a last-minute deal, meaning that it wasn't until [laughs] a few months, as I recall—you'll know better—but it wasn't a year before that there was any sign that that was going to occur, maybe even six months. Then very rapidly after that there was a rapid discussion with India, if not to make a pledge, at least to say this is an important thing.

Chu: The really crucial thing about Paris was, the developing countries said, “No, we do have a role to play.” That's not to say that they still wanted funds to be transferred over to help them mitigate and also to adapt to the changes. But by Paris time, there was more of a recognition: no matter what, we're all in it together. Especially since the most rapidly growing economies by then were China and India, that it became very important that those countries, in particular, recognized that into the future, they're going to have to play a role and not just stand back and say, “Look, you guys made the mess. Fix it.” The hope at Paris, and after Paris—and everybody knew that there was a goal. The pledges were not going to go near the goal; people recognized that. But it was a start. I think at the time, I'm not sure whether all 192 [read: 196] countries signed on, or all but one or two. But it was an amazing thing, knowing even then that this would have to be revisited. That the countries would have to look at what they could further do in order to get to the goal.

Chu: The goal was ideally one and a half degrees, but certainly below two degrees. Of course, that goal is predicated on climate models as to what that meant in terms of the amount of carbon in the atmosphere, notably CO2 [carbon dioxide]. The hope—by then and during the whole time I was in the Obama administration, I was arguing, as I said before—that one can get China, US, and the EU [European Union] to make a substantial pledge, knowing that it would cost the economies some fraction of money. But there were methods available that can make crude estimates about how much it would cost that country. Because the big thing, especially in the United States, was, “Why should we make a pledge when other countries are allowed to go free?” And, “You're hurting our economy, not their economy, so why should we do this?” It puts us at a disadvantage.

Chu: I felt that one could make border judgments. One could eventually get this passed the World Trade Organization [WTO] to say, Look, if three big players made this pledge, you could make estimates of how much it would cost the economy. Then you make border adjustments prorated on the amount of energy related to what was happening and the cost of the economy. Again, I felt that was good because developing countries didn't have very much access to energy [laughs] in the first place, so it would not cost them much at all. By “developing countries”—let's say in Africa versus China, [it was] very different because it was the major world exporter, by that time, relative to even the US and the EU. So that would be a mechanism.

Chu: Again, as I mentioned, the economists in Obama's administration were very sanguine. They were not thrilled by this. They at that time felt, first, you couldn't get it by the WTO, and they simply were not interested. In fact, many of them, [Timothy F.] Geithner in particular— [Lawrence “Larry” H.] Summers left pretty early, but he was softening while he was leaving. Geithner did not. He was against any strong policies having to do with [the] Treasury [Department] that would help this along. I don't think President Obama realized this, as much as he was really trying to put brakes on this. Specific arguments finally brokered by the chief of staff.

Chu: This is [William “Bill” M.] Daley—when Daley was chief of staff, [he] sided with me on an approval of the loan that Geithner just didn't want to have happen. This was a loan guarantee that would allow developers to put solar panels on box-top offices, warehouses, things like that so that it would help deploy solar through helping guarantee the financing to make it cheaper. Financing is a big part of any renewable development because a large fraction of it is capex [capital expenditures], so the cost of money makes a huge difference in how much gets developed. And so this was a loan that would allow companies to engage with the owners of the rooftops to put solar on the roofs because there's a lot of square footage on warehouses and box tops. You just have to go and land at any US airport, and [laughs] the approach is always a lot of warehouses, because people don't want to live there [laughs]. Anyway, going back to that, many of the financial people were not really actively trying as hard as they could to push those things that really mattered.

Q: Going backwards from what you just said, is it your sense that Geithner was not engaged or interested? Or, was actively concerned?

Chu: Oh, no. He was actively against it. He was actively against it, and he said, “We, Treasury, will not assist in this. We don't believe in these types of subsidies.”

Q: Interesting. Which are crucial to actually fulfilling whatever pledges are being part of the accord.

Chu: Yes. No, he was dead set against it. It was not a matter of he was disinterested in something two or three levels down or running freely.

Q: Is it your sense also that there are other agencies that are crucial partners in the commitments that are necessary to make climate change—this kind of accord work?

Chu: Sure, yes. [Department of the] Interior's a big deal because of several reasons. It's what you do on federal lands, permitting, things of that nature. When people think of permitting, they are thinking immediately of are you allowed to drill for oil and gas; or forestry, are you opening up things for forestry, things like that, lots of federal lands. Something else that probably escapes most people is that part of Interior is wildlife and game, hunters and fishers. The hunters and fishers do not want transmission lines, period. Even though Secretary [Kenneth “Ken” L.] Salazar was very much—why transmission? Because when you have more renewables, transmission becomes a bigger deal. You've got to get it [from] where you're making this stuff to where you're using this stuff. Where you're making this stuff has the asset that it's usually cheaper, more rural areas, lots of land.

Chu: You don't put lots of wind turbines or solar farms in urban areas. It gets too expensive. But you've got to transmit it. There are many paths that go through federal lands, and Wildlife and Game were dead set against it. And so within Interior I remember, because I was put in charge—I demanded to be put in charge [laughs] of trying to lower the time of application until you get an up-down vote as to whether you're allowed to build a transmission line. It was an average of eleven years. Eleven years means that most of the time, you just don't have the gumption and the financial backing to go through lots of—first you propose, then the plan, then the hearings, and the local hearings throughout wherever you want [unclear] to go, and the oppositional politics and lawsuits with that. I wanted it to three years, from eleven years. And so there was the CEA [Council of Economic Advisers], Interior, Army Corps of Engineers, they said, “Okay who's going to be in charge of this?” I said, “I'll be in charge of it.” Salazar said, “Okay fine.” And then, immediately after the meeting, he calls me back up and says, “Well, I'm not so sure you can really be in charge of it [phonetic]. My Wildlife and Game are dead set against it because they know where you're going [laughs].”

Q: Interesting.

Chu: Yes. So even within the government, there are these local constituencies. They want pristine land. When they're shooting deer and ducks and fishing, they don't want to see a power line.

Q: So Treasury, Interior. There must've been also—

Chu: Interior was a mixed bag. Ken Salazar was definitely a pro—worried about climate change, very much that. But he was not willing to be really heavy handed within the inside of the department. He was not willing to really sit on these people. A good bureaucrat tries to win over the constituencies within the department. Eventually, if there's really something between the people at the top and the president and below, what do you eventually do? Well, it depends on how much you want it. And things like that. We see in this administration [laughs] there are no rules and there are no constraints about internal pressure.

Q: One quick question about the constituencies that were shaping your work in energy. What were they like?

Chu: They were in general agreement. I think they had a sense that people were dead set against trying to promote renewable energy within the department. There may be little pockets here and there. How radical you wanted to take, how bold you wanted to do that could be differences. As I said before, there was a resentment of the Office of Science that ARPA-E [Advanced Research Projects Agency–Energy] was getting a lot of attention. It was the new darling of the department. They felt that they were the best and brightest within the Department of Energy, and so why is all the praise going to ARPA-E? What about us? And they resented that, or they did not really want to work with ARPA-E people. The applied side, this is in [Office of] Energy Efficiency and Renewable Energy applied side, EERE, they were much more open to ARPA-E and embracing.

Chu: In order to get all sides to play, what you do is you dangle money in front of them and say [laughs], “I'm going to start a new initiative. The initiative needs both ARPA-E and Office of Science to design it, and design it together, at the get-go, not to have a plan to throw [unclear].” They do their thing and throw it back, and it's kind of like negotiating between the House [of Representatives] and Senate, where one's Republican and one's Democrat. I didn't want that. They started to do that initially, but I started sitting in meetings—no, no, no, no. What eventually happened in the end was, something came out. Not the wholehearted attitude that I really wanted, which was, “Hey, we're all in this together. There's no debate about the eventual goal and about the urgency and the importance of doing this.” But it was a turf battle. Rather than saying, “Hey, let's all march in that direction,” it was a frickin' turf battle.

Q: I had one question, actually, going way back to Copenhagen and the realization of this tension of perspectives between the developing—did you glean that going in, or was there a realization at the meeting itself that that was going to be a line of—?

Chu: There was that already. If you didn't realize that the developing countries had that attitude, it would be total naivete. I think people realized that. But the question was, how hard a stand would they take? Would they just say simply, to use the words of the other, conservative, side, “We want a freebie handout of hundreds of billions of dollars, and we're not going to do anything”? It was, again, the tone of the language. In the end, all the developing countries come together and say, “No, we're done. We are not going to admit we had much to do [phonetic].” In all honesty, they did not have much to do with the problem, except for possibly China. They did not have much to do with the problem. They were the ones who were going to suffer the most going into the future. So they felt the whole thing was unjust.

Q: Did you have a large role to play in the details of things like the pledges, the details of what the targets would be in terms of degrees that one was looking to adjust the climate, et cetera?

Chu: Not really. I was not in the little room saying, “Okay this is what I think we can do with it.” We were used as an asset of where things were going, what was possible—an asset and also information. Again, the economists had an oversize role in this, oversize in the following sense: they said, “Okay, this is where the economy is. This is our dependencies. This is what's going on.” But when you're negotiating a climate accord, you also want to know about what is possible, what is likely, what is going to happen in the future. This was something that I did not realize until I was secretary of energy. If you look at what the economists—within the department, we had the EIA, Energy Information Agency. It's a semiautonomous group of people starting with [James “Jimmy” E.] Carter [Jr.] to keep track of fossil fuel inventories, things like that, and then later broadened to all energy, renewable energy included. Then they had these models of what was going on, what was predicted.

Chu: All the models were what I would call rearview models. There were serious economists, and they would model it but they could not tell—and the rearview model said, “Let's look at what happened in the past and extrapolate to the future [phonetic].” So they were not, by [their] very nature, inclined to—or, they look at trends, but it's harder for them to anticipate that there might be a technological breakthrough, or a breakthrough in how you finance, or a breakthrough in deployment due to investment and overinvestment. So models didn't predict that China would realize that this was a great thing, a great new industry they could dominate and marshal lots of government money to help overinvest in solar, which drove the price down, caused bankruptcies, but really helped deployment of solar.

Q: Is it your sense, in retrospect, that a lot of the opposition from Geithner or the economists was rooted in the particular challenge of the economic recovery and the recession? Or how much of it was just, “We object”—for instance, if we hadn't been in a recession, do you think maybe there might've been a different climate, so to speak, for this kind of accord?

Chu: No. The original Recovery Act [American Recovery and Reinvestment Act of], the first two years, was very aggressive. And they gave Energy a huge part of it, three, four million. We had a huge part planning for and advice about what to do with the US auto industry, and other things. The thing I was talking about, that Geithner [being] dead set against [it] was later in the game, was 2012 or maybe early 2013. We were kind of out of the recession. There was a long, slow recovery, but we were kind of out. It was more the purity of what should the government subsidize or not. The whole school of that was consistent from [William “Bill” J.] Clinton to [George W.] Bush to Obama. If you look at that economic school, there were mostly—we should [be] standing back, and the free market's going to take care of a lot of these things—with some modifications. It was not completely free market. And then everybody reacts to the emergencies. The financial crisis, the realization that the banks were running bizarrely free rein [laughs]. All the things that were put in place during the [Great] Depression years because, again, the financial community went berserk in '28, '29, and they were slowly being peeled back with some help from this school of economists.

Q: Right. Exactly. [Laughter]

Chu: When the bottom fell out in the fall of 2008, then they were forced to reinstall them. But guess what happened? Even beginning with Obama, but certainly with [Donald J.] Trump, it all gets unraveled again. It is true that some of these forces are too big to fail, so the government has to bail them out. But the government doesn't share in their wild profits they make while they're doing this stuff.

Q: This is really, really great stuff. I thought I could go back a little bit, just a tiny bit, to the BP disaster. You mentioned assembling a team of scientists and went into a lot of really excellent detail about the nature of the solution. Is there anything you'd like to say about the particular group of people that you assembled, whether there were some consequential players or key meetings? You mentioned, for instance, having design questions where you reached out to others. But I wonder if you could give us a little more about who some of those scientists were.

Chu: Sure. The core would be people like Dick [Richard L.] Garwin, [Arunava] Arun Majumdar, Tom [Thomas O.] Hunter, for sure. He's very levelheaded. He was the then director, I think, of Sandia [National Laboratories] and then retired, very level-headed person. Garwin, they were all very good. There was Alex [Alexander H.] Slocum at MIT [Massachusetts Institute of Technology], who was a mechanical engineer, professor. His role was be kind of wild and woolly [laughs]. But also very bright. Who were some of the others? There were a few not on the committee but who were camped out at BP headquarters from the [Department of Energy] national labs [laboratories]. In the committee, those are people that I do remember. It was lots of discussion, very free-ranging discussion. There was no real rank in terms of what people were allowed to say.

Chu: Tom was more of a polished bureaucrat, having been a leader of a national lab. For example, when I said, “We're going to ask BP to run anything by us before they do anything else, and we're going to have a good look at it after they screwed up with [unclear].” He said, “You don't want to do this, Steve.” Because he knew that they can put some of the blame on you. He said, “It's okay.” A polished bureaucrat knows about stuff like that [laughs]. Garwin was great in that he was still brilliant, massive [unclear] back of the envelope, by nature more cautious. He was dead set against—when the hurricane was coming by and we still thought there could possibly [be] a damaged well. Remember, we had sealed it by this time. We had the second BOP [blowout preventer] sealing cap on there. We were producing oil. Once you seal it, then you can pump it out.

Chu: But when the hurricane comes, the ships have to leave; the monitoring of the potential leak was—remember, once you seal that on top, the pressure in the well goes up very much. We were still very afraid that if there was a damaged well that it was leaking out of the casings into the bedrock and maybe leaking out. But we had lots of monitoring around, sonar [unclear] increase gas, sound on the thing itself, all those things. All those monitoring things had to be taken off, and it would be for three or four days. Since we did not know the well was not damaged. But it had been operating for several days, maybe a week, and it held. There was no sign of a leak. That was a nail-biting thing. Do you keep the well sealed as the ships pull away, just to make sure?

Chu: Because remember, once you erode to the surface and you don't open the pressure in the well, after a day the geologists are saying, “You've eroded a big enough hole that plastic sandy soils [phonetic] would not close.” So once it's eroded and open, then you can imagine more water gushing out, more erosion. And then you get these pathways to the bottom of the Gulf of Mexico, and then you've got a completely uncontrolled situation until you get the relief well. Which is, again, coming from the side, using the weight of the mud to stop it. So it was nail biting. I remember Garwin saying, “Under no circumstances can you let that well be sealed.” He was sending me emails like that.

Chu: It was evenly split—but it didn't matter, because they said, “Don't worry about it. We've discussed it,” [unclear]. But once you open the well, the tremendous pressure of all this oil and gas gushing out, and then it would be a day or two more to get it back. Whereas if you just close the valves and sealed it, that's great. It's easy. Then you just have to come back, you hook it up, and you open the valves. That was a really nail-biting situation. Our team was arguing and said, “No, I think—” It was a gut call. We said leave it. The CEO of BP also knew full well the hazards of a breached well and an erosion to the [unclear] because that would be just horrible. It would make the five million barrels look like nothing. Discuss it, go round and round and said, “It's a completely gut call.”

Q: Yes, sounds like a really incredible sounding board of experts that—I could imagine that they might be an unruly group with lots of different perspectives, but it sounds like it was not that at all.

Chu: They had very different opinions. They would say, “Why?” But in the end they said, “We don't know whether the well is damaged. It could be. It could not be.” What do you do if there's a thirty percent or forty percent chance the well is damaged and you can get erosion? There's not enough data. There's not enough information for a scientist to say something at that point. It wasn't as though one could say, “Okay, we're going to say keep the well sealed.” It wasn't as though I had half my team of six after me saying, “How could you do this?” And da, da, da, da, da. We went on to the next thing.

Q: Could I pivot to the other disaster? I know this mostly fell under Interior. That is the Upper Big Branch Mine disaster that killed twenty-six miners. But because it intersects with coal, did your agency have any role to play or any engagement with it?

Chu: Very, very little. Not really. It was one of those things that was an Interior thing. Coal dust explosions, methane explosions, these things. This is, sadly, a perennial thing with coal mining that if you're doing coal mining, the dust and the methane could have explosive conditions. [There are] lots of regulations to make sure there's enough ventilation and things like that. Usually what happens when you find accidents like this is that the regs [regulations] typically were not followed. But I had very little to do with that. I had much more to do with Fukushima [Daiichi nuclear power plant accident, Fukushima Prefecture, Japan, March 11, 2011] than the coal thing.

Q: Right, right. So staying with coal for one second, clean coal as a bridge fuel, bridge energy, putting scrubbers on chimneys in order to keep jobs. Was this an important agenda item at Energy? Or could you just talk about the clean coal idea and how it informed the kind of work that you did as energy secretary?

Chu: First, I was very much in favor of supporting research and technology into carbon capture and sequestration. I was very pro “Let's see whether you can sequester carbon dioxide in underground aquifers and other geological formations.” We started a few million-ton-per-year things. You need to try to sequester at a reasonable scale in order to see what was happening. But just so you know, if this really takes off you've got to be doing gigatons per year, thousands of times more. But you can't start by saying, “Oh, we put in ten thousand pounds of CO2 underground and it's fine, therefore we can go to a billion.” So we had a few projects going. I was very supportive of research to capture carbon dioxide. Of course, the people who were really trying to mitigate climate change, the more left positions were, “You can't do that because it's just an excuse to keep polluting.” The idea that your talking about carbon capture gives fossil fuel an extended period to continue business as usual.

Chu: I did not feel that way, because electricity, including coal but also natural gas, is only part of the carbon emissions from using fossil energy. People use heat energy for lots of things: cement, steel, the combing process. [The] cement process itself emits twice as much energy [as] you need for heating. Plastics, petroleum—lots of processed heat. If you look at all those things and say, “Well, we don't have the technologies now to replace steel, concrete, glass”; just go down the list of things. So you don't want to do carbon capture and sequestration [laughs]? You want to give up all this stuff? Because the more radical left would say, “We have all the technology. We don't need coal. We don't even need natural gas.”

Chu: In the end, coal had other issues. They had one issue in [George H. W.] Bush I when they negotiated this SOx [sulfur oxide] -NOx [nitrogen oxide] scrubber deal that anything built—I forget. It was 1980 or before; was grandfathered in, they didn't need scrubbers. They thought by year 2000 most of those old—they're pretty inefficient—they all would have been turned off. And so we don't have to ask utility companies to spend many millions of dollars to modernize an old, inefficient plant that will be turned off within a couple days. That was the reasoning. What they didn't realize is, once this is totally written-off asset, it's like an old jalopy. Usually companies used Band-Aids and kept them going. And unless the maintenance costs exceeded the costs of whatever—it really literally is like keeping an old polluting hazardous jalopy on the road for decades.

Chu: That's not directly in my purview, in the sense that it's an EPA [Environmental Protection Agency] issue. Then the EPA got into it and said, “What about mercury and particulate matter?” There were no regs on mercury and particulate matter. And then they figured out that maybe they can close the old, inefficient coal plants by putting in a standard about mercury. Again, it is forcing the industry to have a hard look: “Do I spend millions of dollars to get a scrubber for mercury or just turn it off?” And that was a big—I don't even know what happened in the end. I think the mercury regs either got softened so it became toothless—but there was huge opposition to the mercury regs. Again, the power company was doing their best to have business as usual.

Chu: Again, in my purview, my view is that in the end the SOx, the NOx, the mercury, the particulate matter will be the death knell of coal. But you still have to deal with natural gas and the carbon dioxide from natural gas. That's still an unanswered question because—now, we all know that coal is becoming very much more inefficient. There's more medical knowledge about the health hazards of coal from SOx, NOx, particulate matter, and mercury. Then we had a four-year thing where those scientific findings were denied [laughs], but I think that's going to come back. Again, more pressure from an immediate health standpoint, not from a climate health standpoint. So I think coal—it's waning. The issue is natural gas because it is our backup battery at the moment, and it will be around for many decades. Whether it's more than four or five, I don't know, but it will be around for at least two more decades for sure, because we don't have cheap standby power.

Q: It is interesting, your comment about how some of these issues, like the plant issues, fall under EPA rather than Energy, even though the outsider might think these are all energy-related questions.

Chu: It's private sector. Energy, for the most part, in the US is a private sector enterprise. The only part that goes in the form of regulations, having to do with stability of transmission of the grid, distribution system, things like that, health, public lands and what you do with the public lands. The BP oil spill was in Interior because Interior is responsible for the coastal waters and what happens out there. In Hurricane Sandy or Tropical Storm Sandy, it was all private enterprise. But the Energy Department has a coordinating role, which turns out to be quite crucial if used in a better way. They used to see their role as just providing energy for the other agencies that had direct authority. But when I was there, regarding, for example, the pipeline, refined products and to get emergency clearance for the Jones Act [Merchant Marine Act of] so you can actually use foreign-flagged tankers to ship refined products up to the New York area. That was led by Energy. That was led by me going to Obama and saying, “I think you want to do this for two weeks,” because of the instability of running out of liquid fuel in a major metropolitan area.

Q: What was that? Could you go into that a little bit more?

Chu: Oh, okay, sure. When Sandy rolled by—in previous hurricanes when I was there, I'd learned that Energy reports what's open, what are the resources. So I said, “No, no. We want to take a more proactive role.” I called in the people who know about pipelines and things. I said, “All right, the pipelines have been damaged. Give me an estimate of how long it would take to repair them.” Because while they are down, you couldn't pump refined products that are typically the—most of refineries in the Houston [Texas] [and] Louisiana area, Texas and Louisiana. And so it was done by pipeline; it's to the New York metropolitan area. They said about two or three days before they run out completely. Already, they started to ration, almost immediately, their emergency vehicles; fire, police, things like that would have priority. Gasoline stations were rapidly running out of gasoline. There was no other supply. They were having “no more gas” signs.

Chu: People were getting very, very worried. What little left was being hoarded and things like that. There were trucks coming in. These are tanker trucks, but it's a very small pittance compared to what you can deliver by pipeline. There's a longtime, 1800s [read: 1920] I think, labor law that said if you're shipping from a US port to a US port, that ship had to be US flagged and it'd have to have a union crew. So it's a longtime law called the Jones Act that was to protect American shipping industry. That is, the companies that build the ships had to have them flagged in the United States. “Flagged” means they're regulated in the United States, rather than your favorite banana republic flag [laughs] that is lightly regulated, and then union crews. It was an outdated law. It's still on the books.

Chu: By this time, there were no US-flagged tankers, and so that left barges. Much, much, much more teeny, little, weeny barges and much slower. Tankers aren't super fast, but at least they can hold a lot of refined products. And so barges with union crews. I said, “This is not going to do it.” I said, “I'm going to ask the president to waive the Jones Act for two weeks—because after about a week, the odds on bet were the pipelines would be repaired and could continue. But before that happens, if fire and police run out of gasoline and diesel, you're in a whole lot of trouble, besides the riots of people running out of gasoline. So I said I'm going to do this. I called up Salazar and [Janet A.] Napolitano. I said, “I'm going to ask the president to do this. This is why.” I said, “I want to line up the ducks,” because if I send a word to the White House they're going to ask [Department of] Homeland Security and [Department of] Transportation. I didn't mean Salazar, I meant Ray [Raymond H.] LaHood at Transportation. They said, “Okay, we'll back you.” It was done.

Chu: In the end, I think they legally assigned some other department. I'm not even sure. It might've been Transportation, but it didn't matter. So the three agencies responsible for that, and me calling them up and saying, “We need to do this.” There was another one actually having to do with EPA, which EPA initiated and that had to do with fueling of boats. Whether you can do an emergency fueling, which were deemed illegal for other local pollution things in harbors, and things like that. Again, you waive this for a week or two so a lot of boats and ships could help in this. But the major thing was, let big oil tankers go to New York. The people against this said, “It's going to piss off the unions, and it's not going to do any good because it'll take a while to get a contract to come through. And by that time the pipelines will be [unclear].” I said, “I don't care. Let's just do it anyway.”

Chu: I also said, “The unions wouldn't dare.” They said, “No, they're already complaining to us,” the people in the White House [phonetic]. I said, “They wouldn't dare complain openly. They're going to lose all credibility in this emergency, when the New York metropolitan area is running out of gasoline and diesel, that they want this hundred-year-old law [laughs] to procure jobs that don't even exist?” They remained silent, number one. It was funny because that was such an obvious call. I said, “I don't care what they're selling you. They're going to have to think about that.” The other thing about the contract, there was a tanker bound for Canada. It had left a day or two before, steaming towards Canada with refined products. It docked in New York and unloaded its cargo in New York with money talk [laughs]. Well, how much is Canada paying you? [Laughter]

Chu: These are things that turn out—crisis averted. We did not run out of petroleum for vehicles. Starting with emergency vehicles then going to trucking, freight. It did not become an issue. The pipelines were recovered. And then the other thing, which was kind of cute, is, one or two days after Sandy occurred, I took a tour to find out what was really going on just to see. So I'm being driven along Met [phonetic]. Some people in Hoboken [New Jersey]—I don't know if you know Hoboken; it's just across the river, and its geography is, there's a little bank and then there's a little valley. When Sandy rolled by, it was a very, very high, like fourteen-foot sea surge. It went over the bank, and all of Hoboken was flooded—in the central part of Hoboken. The sewer backed up. It was a frickin' disaster, smelled like sewage.

Chu: Then what happened was, during this time the electrical stations were out and everything, power's down. But there are some that are on, and I was talking to one substation crew. They said, “The looters already came and tried to steal all the copper,” in the substations. They were digging around. They said, “Luckily they didn't get to the hot wires because they would've been killed.” So in situations like that in the US, you see some of the best most heroic behavior and see the worst behavior. People in Staten Island [New York] died because they refused to go, because of the looting that would occur. So old couples just stayed there. And they'd say, “The last time [we] were evacuated the looters came and they ripped us off. It was a false alarm. So we're staying.” And then they drowned.

Chu: Let me tell you the end of this story. What about the gasoline stations? It turned out that some of the gasoline stations were listed as open that were actually not selling gasoline. But they were open because they still could sell candy, and soda, and things like that. Someone thought that the gasoline stations were open because you can look at credit card transactions and they were still doing business. They assumed doing business was [laughs] selling gasoline. And [laughs] I said, “No, no, no”; the gasoline shortage is much worse than we thought. I turned to a bunch of congressional young people and said, “Look, we've got to figure out—there are going to be ways of trying to figure out, using internet information, which ones are selling gasoline and which ones are not.”

Chu: The other thing I wanted to say is, when the power lines were down—the utility companies were very old fashioned. People would report it, then someone else would report a down line. “I'm out of power.” Then they would have to send a truck out to verify, which took time. I said, “No, no, no. You don't have to do this.” By the way, all the phone lines were clogged because they would have to talk to people. What people did during times when the power lines—that's some people, including my wife when there was a big power outage, she would call up every three or four hours. “When's the power coming on?” Every three or four hours for four days. You need people to answer this. I said, “Why are you doing this? It's out of our control.” She says, “I want to know when it's coming back.”

Chu: I said, “This is silly nonsense.” You can actually get it so that you can have it on a smartphone, and you can actually put in the location of the power line down; “I'm out of power.” Not the location of the power line down; “I'm just out of power.” Then you can, by conglomerating data that you key in on a phone that goes to the SMS [short message service] message, you get rid of the people. If you have enough reports, you can have a very clear verification of this data, and you can actually have a pretty good idea which lines were down or which substations, certainly which substation was down.

Q: You're generating meaningful information.

Chu: Yes. They did not have any of that. So I said, “Look guys, for the next time, let's start putting together a system to do this.” But this was in 2012. I left six months later. If I'd stayed another two years, that would've been another thing. Put in place a system. Because the utility companies were quasi braindead; they're a monopoly; they don't have to compete. So put in place a system using all the smartphone technology and the instant messaging and forget about hiring banks of people and dealing with jammed phone lines.

Q: That leads me to two kinds of questions, one about gas prices and the other about the smart grid. So two different directions. The gas price question is—you described the crisis that comes around in the wake of Sandy, but it seems like gas prices did a lot of bouncing around in the time that you were in office. How did that at all affect the kind of—well, it certainly affects the political debate about energy and energy policy, drilling. But how did that affect the kind of work you did as energy secretary? Then we'll turn to the other topics.

Q: Vaguely, intellectually, I knew about gas prices and politics. In the previous administration, [George W.] Bush—during his administration the gas prices went north of one hundred dollars a barrel, hovering around $110 until the recession. He was very worried about this in his last year in office. I was one of the few experts, spent a couple hours with him in the Roosevelt Room. What do we do about gasoline prices? He's being killed. So I knew it was important. Did not know how—and then I was quoted. Before I was secretary of energy, I gave a talk in the fall of 2008 in Berkeley [California]. It was a question-and-answer period. Someone said, “Well, if you want to do something about climate, you've got to decrease driving. What do you suggest?” I said, “I think prices do matter, and somehow we've got to get the price of gasoline up to European prices, because that will affect how much driving there will be.” That's all I said. But boy, the Republicans reminded me that I said that for the next four and third [phonetic] years [laughs].

Q: I realized that, I think, if you're well to do, and you have a short commute and lots of other things, and gasoline is a small fraction of your expenditures, you can say, “Yes, it's okay to raise the price of gasoline.” When I was secretary of energy, the federal tax on gasoline was 19.3 cents, hadn't been changed since the early '90s. I remember a conversation sitting in Jeff [Jesse F.] Bingaman's office and saying, “Look, if you want to pay for a lot of this research and all this stuff for renewable energies, one-tenth of a cent will get us x billions of dollars. This has done nothing.” Then he told me the history. The last time we raised it was nineteen [unclear], and there was blood on the floor not to go to 19.4. This is now such a hot button issue, no one is going to touch it in 2009, 2010, in 1993. That was that. And then states had to sometimes raise taxes because they had a share in the maintenance of the highway systems.

Q: There was this crazy stuff going around in DC that the Obama administration pushing fuel-efficient cars and trucks. This is going to be a travesty because then there will be less gasoline tax, and our highway system will go to hell. So I said, “Let's say you double the gas mileage [laughs], you save that much. You can make up that by going up a penny [laughs] or even doubling the tax [phonetic].” Suppose it's half, just round numbers. If you drive ten thousand—you've got a gas guzzler at fifteen miles a gallon, driving, you can see how much it'd cost you. You double the gasoline tax to forty cents a gallon. That's nothing compared to what you saved in gasoline. If you double it, you're going to be up to your eyeballs in cash to do all the delayed maintenance.

Q: But I was reminded of what a sensitive thing it is, because what you're doing is every week—let's say you're a typical automobile driver and you're filling up every week. Just pretend. You're sitting there by the pump and you're going ding, ding, ding, and you're watching your dollars go into your gas tank. You're reminded of this every week. Your electricity bill comes every month, and you don't even notice it, but you're right in front of the meter. Cash in your pocket goes to fill her up, and it is the most sensitive tax that we have because of that, because of this constant weekly reminder.

Q: The fluctuations in gas prices, did it actually have an impact on the kinds of policies or the kinds of work that you could do as energy secretary?

Chu: It does, in one sense. I was very gung ho on alternative fuels, recognizing that liquid hydrocarbons will be an essential part of heavy freight transportation, long-haul trucks that have to fuel very fast, and of course airplanes. Even if personal vehicles get electrified for the next tens of years, we're not going to have electric airplanes. [We] could have hybrids, but that's mostly to save on jet fuel. In order to decarbonize that, because you're not going to do carbon capture from a tailpipe or the back of a jet engine, you've got to get an alternative source that was based on the same biofuels. So photosynthesis fixes the carbon, you do [unclear], and you release it. But it's hard. The question is, can you compete with one-hundred-dollar-a-barrel oil or not. That was the question when we started. Some people said, “No it's going to go to $150 a barrel.”

Chu: Then [the] depression hits of course, the economy slows down, and the price tanks. Was certainly accused of doing that on purpose, trying to ruin the oil and gas industry because [laughs]—I even said in one hearing, “You think the secretary of energy has, underneath his desk, a set of dials. He wakes up and says, ‘What am I going to set the gasoline price today?'” It was utter nonsense but made good C-SPAN [Cable-Satellite Public Affairs Network] footage. That the secretary of energy has made the gas and oil prices tank. That's hurting the gas and oil industry. The long and the short of it is, no, we're in a recession. When there's a recession, there's less demand, and when there's less demand the prices tank. It happens all the time. When you're in a bull market and everything's expanding, the prices go up.

Q: Did you have to actually take public stands to explain this from time to time?

Chu: Yes. In hearing after hearing I said, “Look, we're in a recession. When there's a recession, the prices go down. Look at history.” There's a one-to-one correlation between the health of the economy and the demand for oil and gas. Which is, again, another problem because you're going to have decouple the economy from the use of oil and natural gas. That was the major thing. So very much so. But then I'm also worried, at forty or fifty or even sixty dollars a barrel, this really cheap stuff, it's very hard, even today, to get alternative fuel based on photosynthesis, cellulosic ethanol, or higher real replacements for jet fuel and diesel, dropping replacements. It's very hard even with today's technology at one hundred dollars, $150 a barrel. And sixty dollars—it's nearly impossible as we speak now.

Chu: So a lot of the projects, then—you realize, when you're forty, fifty dollars a barrel, they don't have a chance at reaching commercialization with that huge subsidy. A carbon tax of sixty dollars a barrel is going to do nothing for that type of subsidy. What do you do? You continue to push ahead, realizing it's not going to be deployed. Today, with electrification and with other things, I see, I see a plateauing of demand of oil and gas, even when the economy does come back. Whether a plateau is in ten years or twenty years or three years, it's definitely going to plateau, because there will be less; demand because of electrification. As it becomes cheaper, it's cheaper for consumers. So there's where a better technological solution puts less demand on it.

Chu: So then what you have is, you have oil and gas less used for transportation. The oil and gas companies are now considering to themselves, “We have to go upstream to chemicals and plastics. We used to give them ethylene, but we sell [it] to them pennies to the pound. We've got to be in the plastic production business as well because that's where the profits are.” It is interesting because the feedstock of plastics—petroleum was the feedstock for over a hundred years. By 1900 all the natural material stuff—the wood, all that other stuff, rubbers, and things like that—they were all being replaced by hydrocarbon chemistry, where oil was the natural feedstock; and later, more sophisticated chemistry. So gas can be a natural feedstock as well.

Chu: As of four, five years ago, it was fifteen percent of the use of oil and natural gas—that you have multitrillion, roughly $3 trillion for oil for transportation, $3 trillion for oil for plastic. But that $3 trillion was only fifteen percent of the oil. So the money is in the plastics and chemicals. I advised [unclear] and they realized this three or four years ago, “Hey, look at where the trends are going. Look at where electrification is going. We need to be in the plastics industry.” But in the end it's got to be plastics with carbon capture, so the more forward-leaning ones know that even if you're doing chemicals and plastics, you better sequester the carbon.

Q: I'm aware of time here, and I wanted to turn to three other areas. One is the smart grid. What was the idea of the smart grid? Joe [Joseph R.] Biden [Jr.] connected to this somehow, I understand. What did you think of the idea, and can you say more about the smart grid as part of the Recovery Act? How much time you spent on it in Energy, communicating about it, developing and nurturing the idea? And how that played out over the course of time that you were in the administration.

Chu: The smart grid comes in two parts. One is the local, what we call distribution grid system. It goes all the way to smart meters in homes and things like that, to substations and how you distribute the energy, how do you incorporate rooftop solar with utility-scale solar and all this other stuff. The rooftop, especially, is part of the distribution system. Then there's a transmission system. This is over longer distances, high-voltage lines. This is, again, to get renewables [from] where you generate to where you use it. I was pretty gung ho on trying to get out technologies for both systems as part of the Recovery Act. I spent a whole bunch of money on these PMUs, power management units. What they are is, they tell a distribution center—they monitor the voltage and phase of the electricity thirty times a second.

Chu: As you look across the United States in the transmission-distribution system, what you don't want to see is—you have a synchronization that you want the sixty cycle [alternating current frequency] to be very well synchronized all across that. The first sign of trouble is when there begin to be increasing phase delays in something. The PMUs were the thing that could give you the really high data rate, fast time things that something was going wrong. The famous Northeast blackout [of]; a tree fell in Ohio and [it] ended up blacking out for several days. There were several hours of precursor to know that these phase lags were building. This was all reconstructed from the history. I wanted those things out there to eventually get to a point where there could be—so we assisted and gave out money—paid for half of it, maybe all of it—several thousand PMUs in major areas so we could better monitor the transmission system for robustness in the electrical grid system, to prevent blackouts, things like that.

Chu: The smart meters are another thing in principle that could do this. It could tell you which houses are blacked out, which areas, what's going on. The downside is, there was a huge thing about privacy. Mostly they centered around things like if the power company has a smart meter and they know when electricity comes up and shuts down a lot, there's a flag that says you're on vacation. And if you're on vacation, there's a flag that says time to loot [laughs]. But there are ways of getting around that and anonymizing that so it can be protected, so no one in a utility company gets [unclear]. The other thing is, utility companies are very—they don't like to share information. Surprisingly, oil companies don't like to share information, and utility companies don't like to share information. They think there's a competitive edge or something, even if this utility company's responsible for this distribution area and this is for this one.

Chu: You'd think that by the very nature of it these are sanctioned monopolies especially for distribution. For energy power generation, very different story because we're in the process of going to a more open bidding market where utility companies will select who am I going to buy my power through the next day. Next-day purchases, in those areas where bidding was allowed, becoming over ninety percent of the term of electricity. So the vertical integration was going away. All this was happening. The distribution system—very important as you go to more—again, you would want to have a wise thing about that, but you're fighting the secrecy of the utility companies. There were very old-fashioned things that were going on.

Chu: Even in the PMUs they were not sharing information. Finally, year three, I called them all to the White House and chained them. I said, “I gave you free PMUs and you're not even sharing the information. Not sharing the information means we're still susceptible to things like the Northeast blackout. This is crazy. You've got to share the information so you can know if there's an instability building up.” I gave a lot of speeches [laughs] on the distribution and [phonetic] grid system. Because I'm a nerd; I'm a techy nerd, and this is a very important part. It's a crucial part of renewable energy because the renewable energy—you need power, you turn on something. It's way different. Things you're turning on and turning off.

Chu: Another thing that was happening is that the inertia and stability of the grid had to do with big generators that were spinning. As these big generators spin, physics wise, there's an inertia in the generation of the fuel. There's a thing called Lenz's law that says if you want to change the current in these big magnets, the first thing that happens is, there's a back EMF [electromagnetic field] that causes it to—makes it be stable. So the generation of these big things, actually solar has none of that. A lot of the new sources of electricity generation don't have this mechanical inertia that automatically stabilizes the grid. So you need in its place a better monitoring system. The electrical engineers and physicists say that the system no longer has this big inertia; it's become more reactive elements, and so we need more monitoring. We need to be much more careful about this so [as] to nip instabilities in the bud.

Chu: The great thing about the technology is that you can begin to have active control of the lines. Before what you'd do—there's a real one-to-one correspondence between electricity and water flow. In electricity you put some power up here and it all trickles downhill, and depending on what the resistances are, that's how you decide where it goes. Just like with water. You put water up here and depending on the thickness of the pipes and everything it uses, it all trickles downhill. But there are technologies that say you can actually change, actively, the impedance from one link to another link. So imagine there's a hot summer day and there's a chance that this line might get overloaded. You can actually say, “No, no, no.” I can actively radio in and say, “I'm going to increase the impedance of this line because I'm getting the limit of this line,” and you can deliberately route the electricity to go some other way. There are these new technologies that had emerged, not fully deployed and mostly not systematically taken full advantage of yet. And I just said, “You need to do these things.” Because all these new technologies were essential to helping keeping the grid stable. And it's more susceptible to instability when you go to more renewables.

Q: I'm interested in this idea that the smart grid was about, obviously, avoiding problems and disasters, introducing efficiency and stability, and having more information and data. It's interesting how you described the different utilities as not knowing what to do [laughs] with—so I'm interested in the story you told about calling them to the White House. How did that come about, and what was the aftermath?

Chu: This is my version. Actually there was a recent exchange. They started sharing. It's actually amazing. As they started sharing, they began to notice things. For example, a year or two after sharing—and then even after I was secretary of energy I would still get invited to give talks and this or National Academy [of Sciences, Engineering, and Medicine] things. Again, it's a very nerdy, techy thing. As the technologies emerge, what's happening? One of those—I discovered that there was a power outage in a plant somewhere in Florida. It suddenly went down. When something goes down, you can see these phase delays. They watch this. You want these phase delays to damp out. You don't want it to grow into a major oscillation; then the whole thing crashes. They watch this thing go all the way up to southern Canada and the echo coming back down. But if you have the ability to watch these phases and things like that, and you have active control on these; you can do a lot. Now it luckily damped down and everything. But remember, one frickin' branch on a tree in Ohio brings down a power station, blacks the whole Northeast out for a couple days.

Q: Would you say that the system is more stable now?

Chu: I can't say that. All I know is that there is still a lot of delayed maintenance. There is more control. I can call my friends. The last time I talked with one of them, Anjan Bose at University of Washington, was about a year and a half ago. And so a lot of the people that I brought in, they left and they're still trying to work this. The good news is that technology is getting better. The bad news is we're going to need it. Because as you go up in renewables, you've got essentially a more delicate situation.

Q: There are two topics, really, but I wanted to make sure we had a chance to talk about the Keystone pipeline as a point of controversy throughout the administration. Once again, if you could say a little bit more about your agency's role in that affair. I know it's something that Obama—obviously it creates a point of tension between energy producers, environmentalists, Native Americans. It's regionally complicated. What role and place did the Department of Energy, and you in particular, have as this question was unfolding?

Chu: I didn't have a very public role in that, mercifully. It was interesting because that, too, was pure political pageantry in certain respects. As I recall, the resistance to the Keystone pipeline was growing, growing, growing. Then there was a recession, and there was a huge drop in demand [for] oil. And then the question is how long would that recovery be, and when would it be really needed. The delays generated by the opposition and the rounding things like that weren't really hurting the pipeline industry that much, because there was no demand. I did pay attention, looking at the capacity and what was going on. But in the long term, they were hoping that the recession would end, business would be back to normal, and demand will continue to rise.

Chu: Certainly I'd rather see oil and gas move by pipeline, but oil move by pipeline rather than tanker rail. It's much safer. How much we will really need is an economic decision. The verdict is not in now. I think there is still a push to complete it because of various things. I don't know to what extent the older pipelines needed either to be closed down or refurbished, or something like that. Whether it goes through Indian territories and things like that; it's a very hot-button issue. The Indians—most Americans didn't appreciate that it's a mixture of domestic and also international law.

Q: You say mercifully you weren't at the center of this debate.

Chu: Because it's the real need for it I wasn't sure about. There wasn't a pressing need as long as we were in an oil recession. In the end would there be a need? I don't know. My only real view is, how do you wean yourself from oil and natural gas so there won't be more need for more pipelines?

Q: Were you in the position of having to advise the president about exactly this kind of issue?

Chu: I do remember being asked and mentioning that, “Hey, we're in a recession. They don't care if it's not built for five years.” I did look at, as you're using more and more capacity, when you would really need it. But I said, “It's okay to let a delay continue and watch how things are settling out.” Again, I would agree, and maybe not the people on the extreme left would agree with this. I said, “Look, if the market is going to really demand this stuff and you start shipping it by rail, I'd rather have a pipeline. And I'd rather adjust conditions so the market doesn't demand it”—either with carbon taxes or with better technologies and electric vehicles, or all sorts of other things. Because when you do this stuff, it's not really getting to the root of the problem and the root of the issue. It's like trying to keep Blacks from being registered voters [laughs]. This is a holding strategy. It doesn't get at the root of what the Republicans need to do.

Q: Unfortunately though, it works sometimes.

Chu: It works temporarily. A tariff on a country that's selling better stuff for cheaper is a temporary fix.

Q: Last question, policy wise, is about the hydraulic fracturing. I get the sense that there were a lot of these hot-button issues, some of which, as you say, are centrally within the wheelhouse of the Department of Energy, and some of which are peripheral—what you're paying attention to, ethanol, the clean coal, et cetera. How did the fracking stuff—

Chu: Fracking is very interesting. Again, the federal government does regulations on federal lands. So as fracking became a more hot button—by the way, it's Interior. But Obama asked the Department of Energy to make recommendations on what should be considered in the fracking regulations for safety, for other things. The issue was whether fracking would lead to contamination of water aquifers, release of methane, all sorts of stuff like that. So it was an environmental thing, the movie documentaries. I actually saw them. They were [unclear]. Those were actually propaganda pieces. By the way, [it] pissed off Interior to no end that Obama went to Department of Energy; because it was not in our purview. The reason he did was because we could assemble a dispatch of [phonetic] technology people to look at what were the issues.

Chu: You start with safety, environmental safety, health safety, things like that. What are the technologies, and what's going to be happening? We assembled a panel of experts, most of which from the outside but with some inside people. It was going to be cochaired by a fellow by the name of John [M.] Deutch, very distinguished professor at MIT, former head of the CIA [Central Intelligence Agency]; and undersecretary; and Sue [Susan F.] Tierney, who runs a consulting group on energy and who I wanted to be my first deputy secretary. But then they found out they weren't reporting all their income from five years ago, so that became debt. Then John Deutch drove Sue Tierney crazy, and so he became in charge.

Chu: The bottom line is, in the end they looked at the technology, they went and had fact-finding things, looked around, four or five stops in various places in the United States, looking for what were the concerns of the public, things of that nature. So it was not only just purely technical. Because fears are real. Whether the fears are grounded in something might not be, but fears are real. You can't say that these are just irrational people and ignore them. So we made some recommendations that led to and then finally forced—Interior has to enact them by law [unclear]. There's a way to do it safely so that you can allay some of the environmental fears.

Chu: The way opposition politics works is, it's much easier to attack something that hasn't been grandfathered in that is about to start. Fracking was exploding during that time. But then if you looked at it, a lot of things we were looking at, I'm seeing [that] the oil and gas industry should be paying attention to a lot of this stuff for conventional oil and gas drilling as well. It can make it safer. But then there was always this big push. The Democrats, on one hand, tend to want to have more regulations that protect health, safe environment, and the health and safety of people. The Republicans tend to want to have, “No, no, the industry can watch itself; we're good; you won't need any of this stuff. Overregulation plus poorly enforced regulation is a big pain in the butt.” There's always been that tension.

Q: I'm interested in the fact that the president turned to you to assemble this disinterested team. Was this post BP? I'm interested in, by then do you think you had a reputation for being able to provide that kind of unbiased advice?

Chu: Absolutely. I think Obama liked me as a scientist, and I don't tend to lead with the political sensitivity. What he wanted was, “First, tell me what the facts are and what the issues are, then how can we mitigate the risks.” And things of that nature. So yes, he absolutely by this time had me [phonetic] in mind [laughs].

Q: How did the tensions with Interior over that manifest? Presumably you still get along well with Salazar.

Chu: Look, I didn't call him and say, “Gee, Ken, I'm really sorry.” [Laughs] None of that. I said, “Look, we'll do the best we can and make some recommendations.” So I decided I wanted to do it by having a group do it that is partially external to the Department of Energy, to get some unbiased people and people who knew the landscape. Not only the technical landscape, but the political landscape as well, and what was at stake. The Department of Energy was tickled pink and said, “Man this guy really trusts you.”

Q: [Laughter] Were there other instances like that, beyond the BP and the fracking question?

Chu: BP, fracking, shipping. Fukushima, John [P.] Holdren and I played a very active role—not to evacuate. “Just stay calm. Don't go crazy.”

Q: Right, you mentioned the last time there was this question about fallout and—

Chu: And how do you continue the nuclear industry because there would be renewed opposition against nuclear after Fukushima—which there was of course. Was it a bad accident? You bet. But in the end, hundreds of people will have died from premature cancers and things like that. No one really died on the spot from radiation like [in] Chernobyl [nuclear disaster, April]. But hey, we're losing, what, a thousand a day to COVID [-19 Disease]. And it's going to increase. I still think twenty, maybe thirty percent of our energy, as a minimum, has to come from something you can turn on. Take transportation out of the picture. I'm just talking about electricity and heat for manufacturing. You can't just stop these things when the wind isn't blowing, the sun isn't shining.

Chu: So it's either going to come from nuclear—and then you've got to do the safe disposal of spent fuel—or it's going to come from natural gas. I think coal eventually will die—pretty quickly. But you have to capture the carbon, and you have to sequester it safely. The prospect of turning the carbon into something useful, that's economically viable—it's not there. We don't have that. So by far the cheapest is to store it, and to store it underground. There's going to be public opposition to that. Also, there's a cost to capturing carbon. But right now the nuclear is not competitive, because we don't know how to build nuclear power plants on time and budget. And the safety rates are ratcheting up. So that's the situation. It looks like, in the short term, natural gas plus carbon capture and sequestration, and also capture of cement, steel, plastics, and processed heat.

Q: My last question is—you mentioned way back when we first started this conversation today about the coordinating role of the Department of Energy. I was interested in whether that role you think is specific to your tenure at the Department of Energy, or whether it's how the department has unfolded in its relationship to these other agencies.

Chu: I think a lot of that had to do with Obama, who looked at who he had. And who he wanted to tap on that was different. Again, usually it's within the jurisdiction and the turf wars within the agencies. So a lot of it had to do with the president. I can't say, with the current president, what happened to turf wars and everything else, except it was overridden by other issues [laughs]. I was a little surprised at how Energy viewed itself as a source of information, rather than actually taking a more active role in that. So that was very much my strong feeling, that we had the technical expertise. Why weren't we punching up to our weight, let alone—soI would hope that over the long term the Department of Energy would have a more important role to play, rather than a more passive information-gathering role. Again, you go back to the thing that energy is mostly a private sector enterprise. Because of that, it's more regulatory in what the role of the government is.

Q: I do have one last final question—and it builds on this—which is Obama talking about energy as a national security issue. Is that a mindset that filtered into your thinking as well, which is in pretty significant contrast to the idea that energy is just private sector stuff?

Chu: Very much so. There's no daylight there. You just have to think of what happens when you're well out of electricity for a few days or a week. All sorts of bad things do happen. We are so dependent on energy. People don't even like a blackout for one day or disruption in the fuel supplies for a week, all of these things. It's taken for granted. It's just like your health. You're in good health, you take it for granted. You get sick, all of a sudden you realize, “My gosh.” Energy is taken for granted until you don't have access to it, and then it becomes the number one problem. So yes, it's very much a national security issue, and energy security is very much an issue. Resiliency from the oil shocks in the '70s, the petroleum reserves, things like that, energy storage. As batteries get cheaper, people are really beginning to think of battery to weather you through a day of blackouts. When you have a blackout for a couple days, what do you want? You want your refrigerator to work, and you want maybe your TV to work, a few other things. You can't turn on your air conditioner, but if it's hot you can turn on a fan. Having no fan versus a fan is night and day. And so pretty modest energy storage. Either that or you go out and get a natural gas generator, but that's expensive. But these gasoline generators are dangerous.

Q: A lot of what you're describing is incredibly close to home, since I live here in New Jersey, where Hurricane Sandy came through. So thank you very much for arranging for [laughter] tankers to come by in the aftermath. I live in a house that has solar panels and generates [crosstalk]—

Chu: You have batteries?

Q: No.

Chu: They're pretty expensive now, but as they get cheaper, that's one thing that—there is a resiliency in having that little bit of local energy source. You go on sip mode, a few lights, a refrigerator, a TV, and a cell phone charger.

Q: That's right, that's right.

Chu: And computer charger.

Q: That's right, we keep adding to the list. We've gone over the hour and a half, and we've definitely come to the end. But [is there] anything else that you would like to add that we haven't touched on?

Chu: I'll go back to my old plug that Obama was an extraordinary president, in that he chose cabinet members who had nothing to do with—I had nothing to do with politics. I'm hoping that Biden will similarly choose a few people for their knowledge and for things like that, rather than as political allies. There's few agencies, and there's a difference between cabinet and the head of an agency like the NSF [National Science Foundation] or NIH [National Institutes of Health]. There's a huge difference in [Kathleen] Sibelius and the head of the NIH. The cabinet is at a level where it really is much more influential. To have at least a few scientists and engineers at these highest levels is good. It's a resource for the president, and it's different than an advisory role. It's a very different thing. You have your knobs on the budget. That gets the attention of the people.

Q: Were there other scientists or scientific-minded people?

Chu: Yes, there were. [The] head of EPA, she was trained as kind of a scientist. I mean, look, I was a scientist through and through, wore it on my sleeve. There was no mistaking about that [laughs]. At the cabinet level, I think—besides Lisa [P.] Jackson, I don't think there were any others. But she was a very like-minded soul. EPA is another thing. Energy and EPA, [there] definitely should be a scientist in charge. The next one would be HHS [Department of Health and Human Services] because of the NIH and things like that. Interior has NOAA [National Oceanic and Atmospheric Administration], and so Interior also has huge investments in science. But having at least two or three scientists, or even former scientists, would be a huge difference.

Q: [It] could make a huge difference, yes. I've certainly gotten that clear sense from the chat that we've had over the last two sessions. Thank you again, great conversation. I've learned a ton [laughs], and I'm sure the people listening in will benefit from this. I'm a historian, and so having the first-person, on-the-spot insight over how these issues were grappled with and how really crucial problems were solved—you can't ask for a better conversation.

Chu: All right. Thank you very much. I just hope going forward in the country and in the world that we have more technical people in positions of high, direct power. There is a big difference between advisory versus a real seat at the budget table.

Q: I'd say certainly the likelihood is a lot higher this time that we've spoken than last time that we spoke [laughs].

Chu: It was an exhale moment. I'm very sad that we're, in all probability, not going to have a majority or even fifty-fifty in the Senate, so we'll have blocked stasis [phonetic]. And really sadly, Trump still has a tremendous amount of influence, and the Republicans are going to stick to his playbook, I think, for the next two years and see what happens. Very scary. We have almost forty-nine, fifty-one percent. We have a very deeply divided country. That's very, very scary. And also very deeply divided in where you live—whether it's urban or rural. And the middle is vanishing, very sad.

Q: Indeed. Well, thanks again.

Session 1

Session 2

Interview description

The following oral history is the result of a recorded interview with Steven Chu conducted by Keith A. Wailoo on October 14, 2020, and November 10, 2020. This interview is part of the Columbia University: Obama Presidency Oral History.

Readers are asked to bear in mind that they are reading a transcript of the spoken word, rather than written prose. The following transcript has been reviewed, edited, and approved by the narrator.

Narrator Bio

Steven Chu is an American physicist, public servant, and government official. In the Obama administration, Chu served as United States Secretary of Energy from 2009 to 2013. Prior to his service in the Obama administration, Chu directed the Lawrence Berkeley National Laboratory, and in 1997, he received the Nobel Prize in Physics for his contributions to laser cooling and atom trapping. At the time of the interview, Chu was the William R. Kennan, Jr. Professor of Physics at Stanford University and Professor of Molecular and Cellular Physiology at the Stanford University School of Medicine.

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Oral history interview with Steven Chu 2020, by Keith A. Wailoo, Obama Presidency Oral History, Incite @ Columbia University, Columbia University in the City of New York.

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