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Thursday, August 06, 2009

Shouldn’t Energy Innovation be Worth More than Rush Limbaugh?!

Despite President Obama’s call for an energy revolution, it is up to Congress to provide funding. The Department of Energy’s Advanced Research Projects Agency – Energy (ARPA-e) made a recent call for research proposals into “high-risk, high-payoff transformational energy-related R&D,” for projects that “(1) translate scientific discoveries and cutting-edge inventions into technological innovations and (2) accelerate transformational technological advances in areas that industry by itself is not likely to undertake because of high technical or financial risk.”

Over 3,500 research teams submitted proposals for a slice of the available $150 million. As a result, over 98% of applicants we “discouraged” from submitting a full application.

Sure, some of the applications were “undoubtedly unrealistic, fundamentally flawed, written in crayon, or the like,” as Andrew Revkin aptly noted at Dot Earth. But with 98% of all proposals rejected, there’s got to be another explanation for the high rejection rate as well. Surely at least 5%, 10%, maybe even one third of these proposals are worth further consideration. Remember: this round of project proposals was simply to get into the next round of consideration where ARPA-e program managers would being the real project grant selection process. No, the reason so many proposals were rejected has more to do with the fact that there is simply not nearly enough money to fund all the good, potentially game-changing clean energy ideas out there.

This problem is not unique to this ARPA-e or this round of research proposals. It is a chronic symptom of this country’s (under)commitment to clean energy. For FY 2009, ARPA-E received $15 million, just enough to cover operating expenses, to say nothing about grants for research. The agency did receive $400 million from the stimulus, which is the source for this round of proposals, and may last through a year or two of project grants. Although the stimulus funding is admirable, it is nowhere near the sustained level of energy funding needed to transform our energy system. In 2007, the federal government spent just $4 billion on energy-related R&D, which was just 3 percent of total federal R&D investments and a measly 0.03 percent of GDP.

Here are a few comparisons to help illustrate the scale of money I'm talking about.

  • $150 million: The amount of funding for the recent ARPA-E grants. The State of Wisconsin alone is dedicating $150 million to clean energy projects, albeit for clean energy deployment (not research).
  • $400 million: Amount of funding for ARPA-E in the stimulus. Rush Limbaugh’s extended contract in 2008 was worth $400 million as was former Exxon Chairman Lee Raymond’s retirement package in 2006.
  • $3 billion: That’s how much money the U.S. invests each year in defense-related innovation through DARPA alone. DARPA, the Defense Advanced Research Projects Administration (responsible for funding the invention of the Internet, GPS, among many others) is the highly-regarded inspiration for ARPA-e and provides a good example of what a fully-funded federal innovation agency looks like. (By the way, total annual defense-related R&D spending tops $80 billion annually!)
  • $4 billion: Amount federal government spent on energy research in 2007. Also how much the Navy paid in phone bills that same year.
  • $30 and $84 billion: Amounts Japan and South Korea are spending on energy research and support for new clean energy technologies over the next 5 years.
  • $30 billion is also the amount the U.S. government invests every year in the National Institutes of Health, as we pursue cures to ravaging diseases. That is what a national commitment to research and innovation really looks like. We’ll know that the U.S. is truly serious about clean energy innovation when it invests at least the same order of magnitude in energy R&D as we spend on health care research ever year.
  • $440-660 billion: Amount China is reportedly investing in their clean energy technologies and industries over the next ten years.
Oh, and don’t expect private investments to make up the difference. The Brookings Institute estimated that in 2007 private sector investments in R&D were at only $2.4 billion, and investments have declined since the recent economic meltdown. Individual biotech companies invest more in R&D than the entire energy industry combined. In short, current U.S. investments in energy are pretty much chump change – and it’s time we got serious about remedying that fact.

The federal government, specifically Congress, must provide adequate funding for energy research if we are to take the nation’s mounting energy challenges seriously. $150 million for ARPA-E projects is a start (a small one), but we should increase federal energy innovation spending by at least $15 billion per year to make the scale of commitment necessary to make a difference in our nation’s energy challenges – and even more if we are to compete in the clean energy race with countries like Japan, South Korea and China.

Cross-posted at Breakthrough Generation

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