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PCAST eyes a $10-billion boost for energy innovation

energy.per.cap.II.JPGThe administration of Barack Obama should work with Congress to identify an additional $10 billion in annual energy funding as part of a broader effort to “forge a more coordinated and robust federal energy policy,” according to a new report from the president’s Council of Advisors on Science and Technology.

The council recommended various detailed changes to the federal energy research programme while urging the government to adopt a strategic planning process, the core of which would be a “Quadrennial Energy Review.” Modelled on the Quadrennial Defense Review, the QER would represent an opportunity to assess a plethora policies and programmes (including existing energy incentives and subsidies, which should be cataloged in their own right) in order to develop a more cogent vision and implement a more systematic plan to advance clean energy research, development and deployment. PCAST recommended that the Energy Department do a trial run next year and then help the White House gear up for the first full quadrennial review in 2015.

In theory, assuming the administration in charge does a meaningful strategic assessment rather than a perfunctory review, all of this sounds good. Paralleling the quadrennial review, Congress could develop its own four-year authorization legislation for energy spending in order to help ensure that appropriations align with the government priorities. But the first challenge will be finding an extra $10 billion dollars in annual appropriations, which would bring the total to roughly $16 billion annually. In addition to an ongoing budget crunch, the newly elected Republican majority in the House of Representatives ran on a platform of reigning in government spending.

“We will have our work cut out for us in terms of identifying that level of resources,” says Bob Simon, staff director at the Senate Energy and Natural Resources Committee under Chairman Jeff Bingaman of New Mexico.

And if creativity doesn’t work on Capitol Hill, the report points out that the administration could work with industry to create new administrative fees that would provide a reliable source of revenue independent of the congressional appropriations process. Ernie Moniz, co-chair of the report and director of the Massachusetts Institute of Technology’s Energy Initiative, noted that a fee that increased gasoline prices by just 2 cents per gallon – well within the noise of regular price fluctuations – would raise about $8 billion annually.

PCAST is not the first group to suggest that energy R&D spending needs to increase in the United States. The American Energy Innovation Council – an organization representing industry, academia and advocacy groups – has also recommended that the United States boost energy spending to $16 billion annually. This may not be surprising given that both Moniz and fellow PCAST member Maxine Savitz, a former executive at Honeywell, were involved in both reports (in addition to co-chairing the PCAST report with Moniz, Savitz chaired the AEIC report). Last year the Brookings Institution recommended ramping federal spending up to $20-$30 billion.

The PCAST report also singles out the DOE’s Advanced Research Projects Agency-Energy for particular praise, recommending that many of the procedures designed to streamline the bureaucratic processes at ARPA-E be expanded within the Department. The DOE should emphasize competitive R&D programmes moving forward and institute private-sector practices “to the maximum degree possible” when it comes to advancing industrial partnerships and energy demonstration projects, according to the report.

Moniz cites the huge demand for ARPA-E research funding as evidence that the current research infrastructure could handle a significant cash infusion. “There appears to be a lot of capacity to use this funding very very effectively,” he says.


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