“Today’s hearing will provide us an independent snapshot on the loan programs within the Department of Energy that were created in the 2005 and 2007 energy bills.  Mr. Allison has considerable expertise, both within the government and in the private sector.  He has produced a useful review of how the programs are being administered, including his suggestions on how administration might be improved.  We appreciate his willingness to come here and share his findings with us.

“As members of the Committee know, the issues surrounding U.S. ability to compete in the international race to develop and deploy clean energy technology have been a great concern to many of us here on the Committee for many years.  The loan programs, in addition to ARPA-E and other efforts to support domestic deployment of next-generation technologies passed in previous energy bills, are part of a concerted effort to insure the United States does not fall behind in addressing the critical challenges of energy, economic and climate security posed by our current reliance on fossil fuels for both power generation and transportation.  These programs, in particular, recognize that it is not enough to have the innovative research that our national labs and universities conduct. There also needs to be a pathway to turning those ideas and inventions into profitable companies. 

“I believe it’s important to keep this goal in mind as we look at these programs today.  While these programs need to be administered with high standards of professionalism and integrity -- and I believe Mr. Allison’s report indicates that they are – it is also necessary to recognize that there is uncertainty about what technologies will eventually win the day.  If we want to be sure that taxpayers lose no money, then it’s easy enough to just eliminate government support for American efforts to compete in developing and deploying these new technologies.   

“Unfortunately, our efforts to support domestic players in this race through the Loan Guarantee Program have been caught up with many election year issues. My impression is that, overall, the program is doing what it is designed to do – that is, to take on risks that private investors are not willing to take on.  Not that the private sector has not taken on risk – every investment the government has made has followed large, risky investments by the private sector.  Private markets are selecting the winners – at least, the companies they believe will be winners; and the government is stepping in to help these entrepreneurs achieve the scale that’s necessary to give them a chance to compete on the global stage.

“Although the U.S. remains one of the greatest sources of innovation in the world today, it’s not clear we are going to reap the benefits of that innovation, or even retain the advantage we have in that innovation.  In the ever-changing and highly competitive environment of high-technology, the research and development necessarily follows the manufacturing, and before long the next generation of technologies are being developed overseas as well as the manufacturing occurring overseas.  We’ve seen this scenario play out in such industries as televisions and consumer electronics and, in my view, it would be tragic if it happened again in the technology areas important to our energy future.

“I believe that’s the important context for our conversation today.  Both of our witnesses have important insights on how we can best go about advancing the goal of clean energy in the United States, in a way that gives the most value to the taxpayers.  This will never be a risk-free enterprise -- very few things of lasting benefit are -- but I look forward to their thoughts on how we can best balance those risks with potential benefits of fully developing these technologies here at home.”

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For more information, please contact

Bill Wicker at 202.224.5243 or bill_wicker@energy.senate.gov

or Rosemarie Calabro at 202.224.5039 or rosemarie_calabro@energy.senate.gov

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