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FYI Number 46: May 8, 2007

ARPA-E Gains Momentum

Momentum is increasing on Capitol Hill to establish an "Advanced Research Projects Agency - Energy." Senate passage of the America COMPETES Act moved this proposal forward, as did a recent hearing of the House Science and Technology Committee on an ARPA-E bill. The Bush Administration, however, has raised questions about this proposal in letters to key Members of Congress.

The 2005 NAS report, "Rising Above the Gathering Storm," recommended the establishment of ARPA-E as follows: "The director of ARPA-E would report to the [DOE] under secretary for science and would be charged with sponsoring specific research and development programs to meet the nation’s long-term energy challenges. The new agency would support creative 'out-of-the-box' transformational generic energy research that industry by itself cannot or will not support and in which risk may be high but success would provide dramatic benefits for the nation. This would accelerate the process by which knowledge obtained through research is transformed to create jobs and address environmental, energy, and security issues. ARPA-E would be based on the historically successful DARPA model and would be designed as a lean and agile organization with a great deal of independence that can start and stop targeted programs on the basis of performance and do so in a timely manner. The agency would itself perform no research or transitional effort but would fund such work conducted by universities, startups, established firms, and others. Its staff would turn over approximately every 4 years. Although the agency would be focused on specific energy issues, it is expected that its work (like that of DARPA or NIH) will have important spinoff benefits, including aiding in the education of the next generation of researchers. Funding for ARPA-E would start at $300 million the first year and increase to $1 billion per year over 5-6 years, at which point the program’s effectiveness would be evaluated and any appropriate actions taken."

The House passed federal R&D authorization legislation last fall that included a provision for a detailed NAS study on the ARPA-E recommendation. This provision listed five questions that the study should address, such as "To what extent is the Defense Advanced Research Projects Agency an appropriate model for an energy research agency, given that the Federal Government would not be the primary customer for its technology and where cost is an important concern?" H.R. 6203 died in the last Congress when the Senate failed to act on it.

On April 24, the Senate passed S. 761, the America COMPETES Act (see http://www.aip.org/fyi/2007/044.html.) Section 2005 of this bill states: "The [Energy] Secretary shall establish an Advanced Research Projects Authority-Energy to overcome the long-term and high-risk technological barriers in the development of energy technologies." The bill provides as examples of energy technology: "(A) fossil energy; (B) carbon sequestration; (C) nuclear energy; (D) renewable energy; (E) energy distribution; or (F) energy efficiency technology." Technical staff are to be employed "as are necessary," program metrics developed, an advisory board appointed, and reviews to be made by the National Academy of Sciences in 2010 and 2012. Regarding funding, the bill includes this standard language: "There are authorized to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2008 through 2011."

The following day, the Subcommittee on Energy and Environment of the House Committee on Science and Technology held a hearing on the ARPA-E proposal. Chairman Bart Gordon (D-TN) has introduced a bill, H.R. 364, which would establish ARPA-E, and is based on his similar bill from the last Congress. This agency would be within DOE, and would have the goal "to reduce the amount of energy the United States imports from foreign sources by 20 percent over the next ten years." It would do so by "(1) promoting revolutionary changes in the critical technologies that would promote energy independence; (2) turning cutting-edge science and engineering into technologies for energy and environmental application; and (3) accelerating innovation in energy and the environment for both traditional and alternative energy sources and in energy efficiency mechanisms to decrease the Nation's reliance on foreign energy sources." The bill authorizes a fund to award competitive grants, cooperative agreements or contracts to academic institutions, companies, or consortia that may include federally funded research and development centers. The bill establishes goals and broad criteria for funding decisions. $300 million is authorized for this fund in 2008, increasing to $915 million in 2013, with provisions specifying how this money will be recouped. Provisions are also made for external advice and program evaluation.

At the subcommittee hearing, Gordon explained that he based H.R. 364 on The Gathering Storm report, adding that the revolving fund approach the bill takes would make it somewhat easier to procure future federal dollars. Ranking Member Bob Inglis (R-SC) shared the overall technology vision and goals of Gordon, and spoke of the challenge of technology transfer, but expressed concern that the new agency might divert money from other DOE programs. The four witnesses supported the concept of an ARPA-E, but contended that the proposed funding level was, in the words of one witness, "way off scale," with another saying "we're not going to get there on the cheap." The witnesses also warned that ARPA-E would not be the single answer to America's energy problems, with cautions that its director and DOE's acceptance of the idea would be critical to the agency's success. Indicative of the real difficulties in establishing such an agency are the problems that have occurred at the Homeland Security Advanced Research Project Agency, which one witness described as not being successful. Additional information on this hearing, including the witness statements, can be viewed at http://www.science.house.gov/publications/hearings_markups_details.aspx?NewsID=1778

In letters sent to Gordon, Science Committee Ranking Member Ralph Hall (R-TX), Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) and Ranking Member Pete Domenici (R-NM), Energy Secretary Samuel Bodman and OSTP Director John Marburger outlined their support for the ARPA-E conceptual goals, but also had concerns. "We write to offer our views and concerns on this issue, and to convey our interest in working with you to develop legislation which would allow the objectives of the legislation to be successfully and meaningfully integrated into the Department of Energy's (DOE) plans and operations," said Bodman and Marburger. But then they add, "At the same time that we support the conceptual goals of ARPA-E, we continue to have serious concerns about its potential implementation and its impact on ongoing DOE basic research efforts. Specifically, the Administration is strongly opposed to the creation of new bureaucracy at DOE that would drain resources from priority basic research efforts." The Administration also has "serious doubts about the applicability of the national defense model to the energy sector." In addition, Marburger and Bodman state that the new agency "not result in the establishment of an additional layer of bureaucracy or hinder the ongoing support for advanced research now underway in these offices. Similarly, we also urge that this legislation not shift DOE's current balance of efforts along the spectrum of research and development."

H.R. 364 now moves to the full House Science and Technology Committee. With the sponsorship of Chairman Gordon, and with the signal from subcommittee Ranking Member Inglis in his opening statement that "I hope that ARPA-E can be part of that process," the full House should receive this bill from the committee in the not-too-distant future.

Richard M. Jones
Media and Government Relations Division
American Institute of Physics
fyi@aip.org
301-209-3095

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