The Point Man for Bush's Green Push

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Cellulosic is what Bush—and Karsner—hope will make up the difference. Cellulosic ethanol is made by breaking down the cellulose in plants or wood chips and generating the sugars needed to produce the alcohol-based, clean-burning fuel. Several companies are developing the process, but it's not yet commercially viable.

Looking for Concrete Proposals

Karsner is focused on action, not doubts. He's aggressively reaching out to industry leaders for their input and help. At an alternative energy conference in February, sponsored by the investment bank Piper Jaffray (PJC), he looked at home mingling with industry leaders and CEOs making presentations to attract investor money. Ten of them spoke at a roundtable discussion with Karsner in a cramped room after his speech. Cracking open a can of Red Bull, Karsner made brief remarks to the eager group and opened the floor to their questions. There were plenty: Gregory Yurek, CEO of American Superconductor (AMSC) wanted to know when the electric grid—the infrastructure connecting power sources to homes and businesses—would be expanded and upgraded to accommodate more alternative energies. Anton Milner, CEO of Q-Cells, a German solar energy company, says there needs to be national legislation to standardize electricity distribution, which is now controlled at state and local levels. "If the market is here, we will come," says Milner.

Karsner responds to each inquiry with a firm answer, though not always one that pleases his audience. "Tell me what we can knock down—let's look at the top 10 priorities," he says. "I have 23 months, and I'm concerned with deliverables." He says he recognizes his role but wants industry to come to him with specific proposals. "Letterhead is free," says Karsner. "Give me something to put on it."

There are certainly some inconsistencies in the strategy. Karsner and the Administration pledge their allegiance to the private sector and free-market capitalism, but their very involvement changes the dynamics of the energy market. By putting their money behind initiatives such as cellulosic ethanol, Karsner and other government officials are making a bet. They may be right. But they also could be wrong. David Hamilton, director of Global Warming Energy Programs for the environmental group Sierra Club argues that the Energy Dept. remains focused on "pet project" areas like ethanol, hydrogen, and clean coal, but he says there's less attention to wind power and solar energy, considered superior technologies by some scientists.

In addition, while Karsner and the Administration tout their support of free trade, they refuse to let in biofuels from other countries without substantial tariffs. Brazil, for example, produces ethanol from sugar that could be used to meet Bush's green goal. But the U.S. imposes heavy fees on imports that render the fuel uneconomical.

Cautious Optimism from Environmentalists

Nevertheless, many CEOs in the alternative energy community speak favorably of Karsner, citing his willingness to get their input, even if they have reservations about the Bush Administration or the government process as a whole. "The folks before Andy were far more insular to the government than responsive to the needs of the renewable energy industry," says Jigar Shah, CEO of solar energy company SunEdison. "He created a group that's far more responsive to the industry and their needs, and isn't afraid to ask, 'What do you need to develop the market?'"

Environmentalists certainly haven't given up on critiquing the Bush Administration. But the Energy Dept. and Karsner are gaining more acceptance in some circles. "Karsner gives people a sense of enthusiasm," says Hamilton, of the Sierra Club. "He comes from the business, so I think he believes in it and has better intentions than those who have been derailed by politics in the past. So we're willing to be surprised and impressed."

Whether Karsner can help Bush build a greener image and achieve his energy goals remains to be seen. What's clear is that Karsner will need plenty of Red Bull to get through the next 23 months.

Herbst is a reporter for BusinessWeek.com in New York.