The Department of Energy was a rather different place to run when Spencer Abraham was U.S. Energy Secretary back between 2001 and 2005, appointed by George W. Bush. There wasn’t a stimulus package that allocated tens of billions of dollars for clean power, the DOE loan guarantee program and ARPA-E hadn’t yet been adequately funded, and venture capitalists hadn’t yet started focusing on greentech. Abraham admits to me in an interview this week that he’s a little envious of the current DOE Secretary Steven Chu’s budget (Abraham actually appointed Chu as the head of Berkeley Lab at the time).
But now Abraham is solidly in the private sector, as the CEO and Chairman of The Abraham Group, which advises energy-related companies on policy matters and even fund raising. He also sits on the boards of lithium ion battery company International Battery, and carbon software company C3, and is the non-executive Chairman of nuclear power company Areva. Here’s 10 questions with Abraham on his thoughts on the future of energy innovation, nuclear power in the U.S., the energy moves of the current administration:
1). Why did you choose to join International Battery’s board, as opposed to all of the other lithium ion battery makers out there?
A). Well, I have a relationship with the Chairman of the Board, which dates back quite a long time, so I have some confidence in him and the teams that he builds. I also have familiarity with their investors. I know them to be people who are willing to make the type of commitments you need for these type of startups. So those were two attractive propositions from my point of view.
2). International Battery is selling batteries for electric cars, among other applications. Are you bullish on electric cars?
A). They are certainly part of the future. I always tell people to never lose sight of the fact that if you’re going to move in this direction, you’re going to need a lot of electricity and therefore even if you reduce the consumption of petroleum products, you’ll be increasing the consumption of electricity. That’s not a bad thing per se as long as people are prepared to meet the challenge.
3). You’ve joined the board of other energy tech startups like carbon software company C3. How big of a role do you think energy technology startups will play when it comes to solving our energy problems?
A). It’s an exciting area and with any period of development like this, you’re going to have some successes and I’m trying to identify companies I thought have great models and great ideas. We saw this happen for information technology and we’re going to see it in a decade ahead with cleantech. The areas I’ve looked at are ones that I think are particularly promising. I am a strong believer in energy efficiency, and I’m a conservative, so conservation is an important thing to me.
I’m excited to see this all going on. When I was energy secretary, this was just getting started, and it wasn’t at the level that we see today. On one hand I regret that we didn’t have all this activity in the level that it is today. On the hand, I’m kind of excited to take a more direct role in the private sector.
4). When you look at the moves by Steven Chu and the DOE, do you think the DOE and the Energy Secretary’s role has changed?
A). Well, Steven Chu was my appointee to head the Berkeley Lab when I was secretary and he is a very talented and intelligent individual. And I wish him all the best in this job. I’m envious of some of the budget increases that he’s been able to enjoy. It would have been nice to have some of those research dollars when I was there. But each era had its own priorities and I’m sure he’ll do his best to take advantage of the focus on clean energy and new energy technologies.
5). So you think he’s doing a good job?
A). I certainly agree with a lot of the things that they are doing. I don’t agree with every policy position, and there are areas where I might have taken it in a different direction, but the focus on cleantech initiatives, and some of the loan guarantee programs they have up and running, I applaud them for their efforts to do those things and I think it will have a very positive impact.
6). What about outside of cleantech, and specifically pulling back on the subsidies for oil and gas. Is your thinking along the same lines as the current administration?
A). I think that’s a political tactic to try to shift some of the focus from the high gasoline prices. This happens every time gas prices spike, politicians run for cover and they point fingers to find scape goats. It’s political theater and should be understood as such.
If you burden oil companies with billions of dollars of additional tax there are a few things that are going to happen: 1). The gas costs are going to be passed along to people that are already paying too much for gas, 2). Some will result in cut backs of operations of oil companies, which means that less oil development and lost jobs; 3).Some of it will be felt on the lines of the oil companies, and we always act like that will come out of the hide of corporate leaders, but the truth is the shareholders in oil companies are pension funds and others whose members are average Americans.
I don’t think it will pass. The President and people who are pushing for it are just getting nervous because of the high price of gasoline. And rather than say the truth, which is that there is not a whole lot that governments can do in the short run, they want to claim they are doing something. And that’s why they are having the hearings and so on. But the truth is that it is political theater.
7). In terms of the Obama administration, what would you like to see him do for energy policy for the remainder of the term or next term? What are the most important things?
A). I stick to my proposal for how we should proceed with energy development. I think we’re going to need a lot of it. I would hope that this administration would do a little more education in its approach to our energy challenges. Instead of acting like overnight we could transition to a green energy world, acknowledge that it will take decades to make significant changes. And we still need oil, gas and nuclear and so on going forward.
Second, I would urge them to not to take actions which make it very difficult and expensive to access the shale gas that the U.S. now enjoys. The amount of reserves we have right now is formidable and by tapping into them we’ll be able to avoid having to import natural gas. We have so much that the price will be low and it will help consumers and it will help industries that need it as a feedstock. That is all good for the U.S. It will decrease, rather than increase, our dependency on foreign energy. And if we are ever going to get electric cars going, we need more power generation and natural gas will be part of the solution.
8). As the non-exective chairman of Areva, what are your thought on nuclear energy industry in the U.S.?
A). I think everybody’s going to take a deep breath before they address power plants in the U.S. But as far as the rest of the world, as far as I can tell, projects are moving forward. What we outta understand is that we need to learn from this. We can’t say we’re going to bury our head in the sand. We have to say OK, we’ve learned some additional things that need to be addressed for nuclear plants.
The other thing we need to understand is that there is a whole generation of safer nuclear power plants, that we could be building right now. All this has demonstrated the greater need for the next generation of nuclear power plants, and a safe path way for nuclear wate for American power plants. The answer should be let’s build safer nuclear plants and do it soon.
9). When you look back at your time as Secretary, was there an indication that natural gas would become such an important part of the U.S. energy equation?
A). First of all, it was not foreseen even when I left office in 2005. We were still concerned that we were probably going to have to import natural gas. Happily things have changed, and I do believe it affects the landscape because if we don’t derail it – and now there are people who want to derail it – it means lower cost of natural gas, which helps consumers use it for home heating etc, and it helps the cost of power, which is particularly important if we go toward electric vehicles. And it effects our manufacturing sector because chemical plants and ammonia plants can be built in the US. When the price of gas was so much higher they were moving offshore. All of that is good for our economy.
10). Do you as part of the Abraham Group make investments, and have you thought about doing so?
A). We’re not an investment firm, but we have a number of clients in this space. We have helped them develop strategies for seeking private investment. It would be great to be more involved with that. Our firm has thought about it, but we haven’t come up with the right strategy to get into that work. But we’ve given consideration to that. It’s very exciting and I would love to have more of a role.
Image courtesy of The Abraham Group.