The Power Plant

Business Leaders Say U.S. Commitment to Energy Research Still Insufficient

The government is spending far too little money on energy research, putting at risk the long-term goals of reducing carbon emissions and alleviating energy poverty, some of the country’s top business leaders found in a new report.

The American Energy Innovation Council, a group of six executives that includes the Microsoft co-founder Bill Gates and the General Electric chief Jeffrey R. Immelt, urged Congress and the White House to make expanded energy research a strategic national priority.

The leaders pointed out that the United States had fallen behind a slew of other countries in the percentage of economic output being spent on energy research, among them China, Japan, France and South Korea. Their report urged leaders of both political parties to start increasing funds to ultimately triple today’s level of research spending, about $5 billion a year.

“Growing and consistent appropriations for energy innovation should be a top U.S. priority over the next decade,” the business leaders recommended in their report. “The budget numbers over the last five years are a major failure in U.S. energy policy.”

At stake, Mr. Gates said in an interview, are not just long-term goals like reducing emissions of greenhouse gases, but also American leadership in industries of the future, including advanced nuclear reactors and coal-burning power plants that could capture and bury their emissions.

“Our universities, our national labs are the best in the world,” Mr. Gates said, but he added that a chronic funding shortfall was holding back the pace of their work.

The report did credit the Obama administration and Congress with some gains, including a one-time injection of funds in the economic stimulus bill of 2009. But subsequent budgets have essentially dropped back to prior levels, and spending on American energy research remains far below the high point it reached just after the energy crises of the 1970s.

In the past, the report found, investments in energy innovation have paid major dividends. Mr. Gates cited the example of hydraulic fracturing to unlock gas and oil in shale deposits, a technique developed in part with federal research money that has led to a newfound abundance of oil and gas, lowering prices for consumers.

Similar innovation is needed in low-emission sources of energy, the report found, if the goal of limiting global warming is to be met while making energy more available to poor people around the world. Experts involved in writing the report said the needed breakthroughs included safer types of nuclear reactors, cheaper methods of capturing carbon dioxide emissions at power plants and improved batteries that can store large amounts of energy.

The new report is an update on similar recommendations the same business leaders made five years ago. While the report found that the picture remained generally bleak, it did cite some progress.

For instance, Congress established the Advanced Research Projects Agency-Energy, or ARPA-E, modeled on the Pentagon research agency that helped create the Internet. And the Energy Department has funded a string of energy innovation hubs across the country.

 “There’s some very promising things that are in these centers, but the pace is absolutely limited by the modest funding level,” Mr. Gates said. “Those should be funded at a much higher level.”

The report pointed out that funding for ARPA-E was less than $300 million per year, and urged that it be raised closer to $1 billion. The entire federal appropriation for energy research is less than Americans spend every year buying potato and tortilla chips, the report noted.

The recommendations in the report are similar to those made by other groups in recent years. But with the federal budget under pressure, the idea of a major push on energy research has gained little traction in Washington.

The business leaders hope to change that as the 2016 presidential race gets under way, urging both parties to embrace ambitious research plans.

Aside from Mr. Gates and Mr. Immelt, the American Energy Innovation Council comprises Norman R. Augustine, a former chairman and chief executive of Lockheed Martin; John Doerr, the Silicon Valley venture capitalist; Chad Holliday, a former chairman and chief executive of DuPont who soon will become chairman of Shell; and Tom Linebarger, chairman and chief executive of Cummins.

In pushing their case in Washington, the leaders are likely to encounter reluctance on the right to increase government spending, as well as some philosophical objections to expanding the government’s role in the energy market. On the left, they may encounter wariness from environmentalists who, while not opposing new research, do not want that push to detract from rapid deployment of current clean-energy technologies, like wind andsolar power.

“I am 100 percent for more research, since who could possibly oppose that?” said Joseph J. Romm, who helped manage federal energy research in the Bill Clinton administration and later founded a widely read blog on climate change. “But it is only a small part of the answer, and certainly not the most important.”

He added that aggressive deployment of existing technologies and a price on emissions of carbon dioxide would go a long way to reduce emissions, and that the latter would help unlock more private innovation.

In conclusion, the report noted, “A step-change in the U.S. commitment to federal energy innovation is critical. America’s current energy abundance is in part the product of many years of past energy innovation investments. Future generations should have a rich suite of options to choose from, or they may be swamped by the list of challenges described in this document. Any serious business leader would recognize that the country needs to take advantage of its current strength and act now to create a clean energy future. Only by investing in ingenuity and restlessness will the United States preserve its global leadership and ensure its future prosperity.”

The complete report can be downloaded here.

 

 

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