One of the recommendations of the National Academies' October 2005 report on
U.S. competitiveness, "Rising Above the Gathering Storm,"
was the creation, within the Department of Energy, of an organization
modeled after the Defense Advanced Research Projects Agency (DARPA).
This organization would be called the Advanced Research Projects Agency-Energy
(ARPA-E) and would sponsor out-of-the-box, transformational R&D
that would help the nation meet its long-term energy challenges. On
March 9 a House Science Committee hearing explored a number of issues
surrounding the ARPA-E proposal, including how its role and circumstances
would differ from those of DARPA, what exactly its mission should be,
and how it might be funded.
Several pieces of legislation have been introduced that would create
an ARPA-E, including the PACE-Energy Act (S. 2197) sponsored by Sens.
Pete Domenici (R-NM), Jeff Bingaman (D-NM), Lamar Alexander (R-TN) and
Barbara Mikulski (D-MD), the Advanced Research Projects Energy Act (S.
2196), sponsored by Senators Hillary Rodham Clinton (D-NY), Harry Reid
(D-NV), and Jeff Bingaman (D-NM), and a House bill providing for the
establishment of ARPA-E (H.R. 4435), sponsored by House Science Committee
Ranking Minority Member Bart Gordon (D-TN). However, the White House
did not request funds for such an agency in its FY 2007 budget submission.
Science Committee Chair Sherwood Boehlert (R-NY) and Energy Subcommittee
Chair Judy Biggert (R-IL) declared themselves open-minded but skeptical
about the ARPA-E proposal. Boehlert questioned the need for an organization
that would support more R&D when plenty of useful energy technologies
are "just sitting on the shelf," and argued that the largest
barrier to adoption of new energy technologies is not supply but demand.
"Until the government is willing to institute policies to stimulate
demand" - an area which is not under Science Committee jurisdiction
- "it's going to be very hard for new technologies to enter or
dominate the market," he stated. "It is not clear what problems
we are trying to solve" with the new agency, Biggert added: lack
of private-sector investment in basic research; lack of federal funding
for innovative, high-risk research; failure to effectively transfer
new energy technologies to the marketplace; or some combination of these.
Both warned that new funding was unlikely, and the organization would
probably be funded by shifting money from other research, possibly from
DOE's Office of Science. Ranking Member Gordon urged the committee to
follow the lead of the Senate, where he said two-thirds of Senators
have signed onto legislation establishing an ARPA-E, and come together
in a bipartisan way to support the recommendations of the National Academies
Steven Chu of Lawrence Berkeley National Laboratory, a Nobel Prize
winner and a member of the National Academies' panel that produced the
"Gathering Storm" report, described energy as "the single
most important problem" that science and technology will need to
solve in the coming decades. He explained that the committee envisioned
ARPA-E as a small, nimble entity that would support breakthrough, not
incremental, research without constraints to fund existing programs,
and would bridge the gap between basic research and industrial development.
The committee hoped that a new entity would create a "freshness,
excitement, and sense of mission" and attract the best scientific
minds. ARPA-E's purpose, he said, would not be to get products to the
marketplace, but to transform the energy -marketplace itself. The report
called for funding of $300 million in the first year and $1 billion
annually for the next five or six years. "It is critical,"
Chu added, that its funding "not jeopardize" funding for basic
research in the Office of Science.
Most of the witnesses supported the ARPA-E idea. Frank Fernandez of
F.L. Fernandez, Inc. explained that DARPA was originally created to
be small and flexible and "work across and around" risk-averse,
parochial organizational "stovepipes." He thought that ARPA-E
could be useful to address similar organizational problems within DOE.
However, he noted that DARPA's creation and evolution were "not
without a lot of problems" and urged Congress to give ARPA-E the
money, flexibility, authority, and time to become effective. Melanie
Kenderdine of the Gas Technology Institute applauded the concept as
"a welcome effort" to alter the nation's energy production,
distribution and consumption "by accelerating research in game-changing
technologies," but she commented that it was "unclear what
type of research" ARPA-E would fund. She cautioned that the agency
would need new money; that shifting funds from existing programs and
inadequate funding could "set it up for failure."
David Mowery of the University of California at Berkeley declared that
the ARPA-E proposal "overlooks some critical features" of
energy R&D. "First and most important," he said, are policies
that address the demand side. He noted the government serves as the
primary customer for DARPA and creates demand, while ARPA-E would be
serving a broad and diverse marketplace. Energy R&D should be complemented,
he said, by federal policies that would encourage more widespread adoption
of new energy technologies. He suggested a combination of policy incentives
such as fuel economy standards and a carbon tax. In-Q-Tel's Catherine
Cotell added that the barriers to bringing a product to market "comes
down to money," and to whether companies believe they will make
a profit. She recommended seeking investors' perspectives to inform
ARPA-E's funding decisions.
"I know most of you support...the establishment" of an ARPA-E,
Boehlert said, but Congress is "faced with setting priorities."
With new funding unlikely, he asked the witnesses whether they would
support ARPA-E if the money came from the Office of Science. The response
was resoundingly negative. Chu pointed out that the Academy report's
top research funding recommendation was to increase federal funding
for basic research, and Fernandez commented, "insufficiently funding
two activities instead of sufficiently funding one is the worst of all
management decisions." Kenderdine proposed exploring innovative
funding options such as a trust fund.
Choosing between funding for ARPA-E and funding for the Office of Science
is "the wrong question," said Gordon. The right question,
he said, was whether the nation should invest in energy independence,
or other priorities such as "Star Wars" or reducing the capital
gains tax. A number of committee members indicated support for the idea
of ARPA-E, but also praised existing DOE energy R&D programs and
asked how the new agency would differ from them. Chu responded that
the existing programs have already identified paths forward and tend
to focus on incremental advances, while ARPA-E would seek to use emerging
basic research in areas such as nanotechnology to develop "totally
new" technologies. Rep. Gil Gutknecht (R-MN) called ARPA-E "an
idea whose time has come," and Gordon said, "it's time to
stop talking about subtleties and get on with action."