Peter Davidson walked nervously toward a U.S. Senate conference room in Washington, D.C. A lanky man with graying, wavy hair and thick-rimmed glasses, he was still studying the notes he had prepared when he stepped inside to face a dozen members of the Senate Committee on Energy and Natural Resources.
"My name is Peter Davidson," he said as he slid into a black leather chair and pulled a microphone close. "I recently joined the Department of Energy as executive director of the Loan Programs Office…one of the largest clean energy and transportation portfolios in the world."
Though few outside Washington know it, the Energy Department's eight-year-old Loan Programs Office is at the center of the nation's highly political battle over clean energy. The program backs innovative energy projects that can't get private financing because their technology is too new and risky.
Davidson, a former investment banker and entrepreneur, is charged with bringing the 180-person office back to life. Two years earlier it had been rocked by controversy when Solyndra, the solar company that took $527 million in loans, went bankrupt. Although the loss represented a small fraction of the program's $34.4 billion loan portfolio, the office became one of the most maligned and disliked federal programs. Congressional Republicans used it as a cudgel against Obama's clean energy programs. Lawmakers tried several times to block future spending by the office—to no avail.
Davidson was the first member of the loan office to appear before the Senate in more than a year, and the program's first permanent head in 18 months. His nervousness—and excitement—at the July 18 hearing on clean energy initiatives underscored the challenge he faces. If he can relaunch the program, dozens of high-risk but big-payoff technologies could get off the ground, hastening the clean energy transformation and helping to rein in global warming emissions. If he can't, those projects might never see the light of day.
"I think Peter would need to be a little crazy not to be apprehensive" going into it, said Ed Hatcher, a longtime friend and P.R. consultant who helped Davidson prepare for the hearing.
Now that the Solyndra scandal has died down, President Obama is eyeing the remaining $50 billion that Congress appropriated years ago to help achieve his far-reaching plan for global warming. Most of that money—$42 billion—is earmarked for nuclear power and advanced car technologies, with a small amount for renewable energy and energy efficiency. Two nuclear projects are already slated to get funding. Davidson's first task is to funnel the other $8 billion into technologies that can reduce emissions from extracting and burning fossil fuels. Some say it's a controversial move that could lead to complaints that the office is pandering to clean-energy opponents.
The initiative is "really a key part of what [Obama] is trying to do" on climate change, Davidson said in an interview near his home in Brooklyn, N.Y.
Today, after nearly five months on his first federal job, Davidson, who is known for his cool temperament and genial nature, said he's "energized" by his new vocation.
"We can't be defensive," he said about the loan program. "We've got to be very excited about what he have to offer."
'The Only Game in Town' for Big Clean Energy
Davidson, 54, has virtually no previous experience dealing with Washington politics and scandals, but he's a pro at raising and investing money in big-ticket ventures. For nearly three decades, the Harvard Business School graduate worked in finance in New York, first as an investment banker at Morgan Stanley and then as entrepreneur. He founded and managed six companies, including the Spanish-language media conglomerate, Latin Communications Group.
When it comes to debt finance, "I just really respect it and understand it," he said.
Davidson left the private sector in 2009 and spent two years at New York's state economic development agency. He then joined the Port Authority of New York and New Jersey as the senior advisor for energy and economic development. That job sparked his passion for clean energy and led to his appointment at the Energy Department.
"That was exactly the time when he really started talking about this issue a lot—about how the opportunity is out there for sustainable energy companies to make a positive contribution both to the environment and the economy," his friend, Hatcher, recalled.
At the Port Authority, Davidson tried but struggled to help a New York developer find private financing for a large waste-to-energy facility. He saw that banks would be more likely to invest in the first-of-its-kind project if the developer had a federal loan guarantee. If the company defaulted on its bank loan, the government would cover the losses.