* Tenure marred by controversy over loans to failed Solyndra
* Obama to craft new team to address energy, climate
* Physicist not well schooled in Washington rough and tumble
(Adds dropped word in second paragraph, corrects Reicher's
title to former Google executive in paragraph six)
By Ayesha Rascoe and Nichola Groom
WASHINGTON/LOS ANGELES, Feb 1 U.S. Energy
Secretary Steven Chu, the Nobel Prize winner who shepherded an
effort to help spur a clean energy U.S. economy, will step down
after a tenure rocked by the failures of some costly government
Chu's departure, which was announced Friday and follows
similar moves by the Environmental Protection Agency
administrator and the interior secretary, will allow President
Barack Obama to craft a fresh team to address climate change.
Obama has said responding to the threat of climate change
will be a priority during his second term, giving the issue a
prominent place in his inaugural address last month.
After legislation setting up a program to cap greenhouse gas
emissions failed to get through Congress, the administration
pushed ahead with regulating carbon through the EPA. Lawmakers
are still divided over climate change and analysts expect Obama
will continue to use federal agencies to target emissions.
Chu's successor will likely operate under a much more
constrained budget, but could play a key role as the department
develops energy efficiency standards, funds research into clean
energy innovations and helps oversee the shale oil and gas boom.
Potential contenders for the energy post are said to include
Christine Gregoire, former governor of Washington; Bill Ritter,
former governor of Colorado; and Dan Reicher, a Stanford
professor and former Google climate change executive who worked
in the Energy Department during the Clinton administration.
Analysts have said Obama likely will pick a successor with
business expertise or political clout to fend off congressional
critics of the department's spending on clean energy.
For the last two years, Chu had been at the center of
Republican-led probes of his management of the $37 billion his
department received for clean energy development from the 2009
When Chu took the energy post that year, he was supposed to
put a new focus on clean energy. "Drill baby drill" was out, the
Toyota Prius - or even better, the Chevy Volt - and solar roof
panels were in.
Chu got to play Santa Claus to the clean energy sector with
the stimulus funds. But hard times followed when one of the
recipients, solar-panel maker Solyndra, filed for bankruptcy in
2011 after receiving a $535 million loan guarantee.
Chu defended his record to the end, fighting off charges
that his department doled out funds to political allies.
"We should be judged not by the money we direct to a
particular state or district, company, university or national
lab, but by the character of our decisions," he said in his
Chu said he may remain in his post past the end of February
to help in the transition to his successor.
Unlike his predecessors, who included former politicians and
businessmen, Chu was a self proclaimed nerd and energy
efficiency fanatic who does not own a car, cycles to work and
walks many flights of stairs to his office.
Instead of focusing on fossil fuels, Chu made clear his
focus was on fuels of the future. In a famous early misstep, Chu
even said OPEC was not his domain, then backtracked.
Chu's scientific pedigree was often touted as an asset by
the administration. The White House tapped Chu to help figure
out how to cap BP's ruptured Macondo well during the 2010 Gulf
oil spill, crediting him with helping to devise the ultimate
solution for capping the well.
Detractors complained that the bookish physicist's awkward
style made it hard for him to push a compelling message
promoting renewable or alternative fuels.
Under his watch, big increases in U.S. wind and solar power
development were overshadowed by new methods to get at
old-fashioned energy sources: crude oil and natural gas.
Kevin Book, managing director at Washington energy research
firm ClearView Energy Partners LLC, said the shale natural gas
boom in particular upended Chu's agenda.
"Secretary Chu came to Washington to transform America's
energy infrastructure and he's going to leave Washington where
natural gas has transformed the viability of everything he cared
about," said Book.
That oil and gas bonanza has helped to put the country on
track to its long-sought after goal of energy self sufficiency,
but environmental groups have raised concerns about continued
reliance on carbon-releasing fuels.
BAD BET ON SOLYNDRA
The fallout from Solyndra, a "bad bet" that was once a crown
jewel of the Obama's renewable energy policy, engulfed Chu in a
Solyndra was supposed to be a success story in the White
House's effort to promote green energy and create jobs.
But, after the federal loan aid and visits from President
Obama and Vice President Joe Biden, Solyndra filed for
bankruptcy in September 2011. The Republican-led House of
Representatives probe into the government's aid to Solyndra then
kicked into high gear.
"The fact that he was not extremely well versed in how to
handle folks on Capitol Hill probably created a more adversarial
atmosphere than there needed to be," said Salo Zelermyer, an
attorney with Washington law firm Bracewell & Giuliani who
served as senior counsel at the Energy Department during the
The department's advanced battery grant program has also
experienced some high profile setbacks, with battery maker A123
also filing for bankruptcy.
Despite the negative optics, though, analysts have said it
would be unrealistic to expect such a large portfolio of
projects to be without failures.
The full impact of the department's efforts is not yet
clear, but Chu helped place the nation on a path to compete in
the global clean energy market, said Joshua Freed, director of
clean energy program at the think-tank Third Way.
"The secretary was brought in because he had an
understanding and vision for how to innovate," Freed said. "He
actually did that quite well."
Martin Lagod, managing director and co-founder of venture
capital firm Firelake Capital Management, said Chu's most
important legacy was ARPA-e, the DOE entity that promotes
high-impact energy technologies not yet ready for prime-time.
"It is a beautiful program and frankly should be funded
bigger and better. ... It's a great catalyst for creative and
innovative thinking. A good role for government is to help spur
and fund basic research and to me this is a very good example of
it in the DOE," said Lagod.
(Additional reporting by Jeff Mason, Roberta Rampton and
Timothy Gardner; Editing by Ros Krasny and Doina Chiacu)