Energy Secretary Calls ‘Downward’ Trend in Energy Budget ‘Alarming’

By Nicholas Ballasy | December 2, 2010 | 4:01 AM EST

Secretary of Energy Steven Chu

( - Energy Secretary Steven Chu said the “downward” budget trend for research and development at the Department of Energy is “alarming.”

When it comes to energy research and development (R&D), Chu said the government allocates 0.14 percent of its total budget, $5.1 billion, to that end. Chu made his remarks in a speech at the National Press Club on Monday.

“Now, the total science and energy budget in the department is $12 billion and the trend is even more alarming,” said Chu. “Peaking in 1979, it has been, with a few bumps and wiggles, going downhill ever since then and although the stimulus funding provided a huge down payment of additional R&D, the question is, post-stimulus, are we going to return to this downward trend or are we going to do something about it?”

Chu also said China is leading the United States in manufacturing, adding that “America still has opportunity to lead but time is running out.”

“The first airplane was discovered in America, the first transistor, the first integrated circuits, optical and satellite communications, GPS, the Internet, all came from the United states,” he said, “all did wonderful things in terms of wealth creation for the United States and so I say that today this leadership is at risk.”

With the assistance of PowerPoint slides, Chu cited statistics to illustrate Communist China’s leadership in the manufacturing of “high tech” goods.

“We are no longer leaders in manufacturing, but more startling, we are no longer the leaders in high technology manufacturing,” said Chu. “In terms of global high-tech exports of our country, we hit a peak in 1998, capturing about 25 percent of the market, and since that time it’s been declining steadily.

“So, now it’s about 13 [or] 12 percent of the world market,” he said. “Europe remained roughly constant during this time. Meanwhile, China from 1995 to – this graph goes up to 2008 – went from about 6 percent to 20 percent of the world market of high tech manufactured goods.

Chu explained why he thinks China has been able to out-produce the United States.

“In nurturing innovation, China decided to use government policies to guide the private sector into playing the leading role in R&D and it’s the government policies acting as a slight rudder to guide the much greater investments in the private sector,” he said.

“The difference is they [China] decided to do this and they launched on a long term plan to do this and the first five year plan followed with soon to be another five year plan.”