Counterpoint to Heritage Foundation’s Attack on U.S. Energy Innovation System

On 04.26.11, In News, By Staff

Last week, the Heritage Foundation released a proposal that would nearly dismantle the Department of Energy in the name of budget deficit reduction. The proposal includes numerous inaccuracies and inconsistencies to justify eliminating programs vital to U.S. energy innovation, economic competitiveness, and national security.

In response, Americans for Energy Leadership joined the Information Technology & Innovation Foundation and the Breakthrough Institute to publish a detailed counterpoint that documents the fundamental inaccuracies of the Heritage proposal.

Download: “Counterpoint: Heritage Foundation Backgrounder” [PDF]
By Matthew Stepp, Alex Trembath, Daniel Goldfarb, Jesse Jenkins, and Devon Swezey

The Heritage proposal calls for: (1) fully eliminating the Office of Energy Efficiency and Renewable Energy, slashing the $3.2 billion budget, and eliminating proposed advanced nuclear energy technology programs from the Office of Nuclear Energy; (2) eliminating the Innovative Technology Loan Guarantee Program and reducing other applied programs like the Office of Nuclear Energy; (3) cutting $1.59 billion from the Office of Science, including the elimination of two of the four Energy Innovation Hubs, elimination of the 46 Energy Frontier Research Centers (EFRCs), elimination of the Workforce Development for Teachers and Scientists Program, and a broad range of other cuts to basic energy sciences; (4) eliminating the power marketing administrations; and (5) cutting the administration’s FY2012 budget request for ARPA-E from $650 million to $300 million.

As the counterpoint memo documents, the justification for this extreme proposal contains numerous inaccuracies and inconsistencies, such as:

  • Heritage cites several ventures as evidence of independent private sector efforts to develop next generation energy technologies that in fact each received public support.
  • The report wrongly suggests that DOE budget expenditures are prime targets for substantial deficit reduction.
  • The report uses out-of-context figures to exaggerate the relative magnitude of DOE’s budget.
  • The report is inconsistent in its support and understanding of the DOE’s role in enhancing energy security.
  • The report assumes a zero-sum competition between government and private investors rather than acknowledging the long and successful history of public-private partnerships.
  • Selective and prejudicial history is applied to suggest that government research has little to no commercial aim or value.
  • The report relies on the unfounded assumption that the private sector is, and should be, largely responsible for energy research, commerce, and infrastructure.
  • Heritage acknowledges the role of government in advancing a national interest not met by the private sector, yet claims that the government is not equipped to do so.
  • Heritage is inconsistent in applying their support or opposition to federal programs supporting clean energy innovation.
  • Heritage wrongly suggests that the private sector invests sufficiently in energy innovation.

For more, download the counterpoint here.

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Obama: Invest in Energy Technology to Solve Long-term Challenges

On 04.25.11, In News, By Staff

On Saturday, President Obama posted his weekly national address, this time focused on rising oil prices and long-term solutions.  He made a strong call for federal investment in clean energy technology as the most important long-term solution and criticized recent budget proposals that would slash these investments [read transcript]:

Instead of subsidizing yesterday’s energy sources, we need to invest in tomorrow’s. We need to invest in clean, renewable energy. In the long term, that’s the answer. That’s the key to helping families at the pump and reducing our dependence on foreign oil. We can see that promise already. Thanks to an historic agreement we secured with all the major auto companies, we’re raising the fuel economy of cars and trucks in America, using hybrid technology and other advances. As a result, if you buy a new car in the next few years, the better gas mileage is going to save you about $3,000 at the pump.

But we need to do more. We need to harness the potential I’ve seen at promising start-ups and innovative clean energy companies across America. And that’s at the heart of a debate we’re having right now in Washington about the budget.

Both Democrats and Republicans believe we need to reduce the deficit. That’s where we agree. The question we’re debating is how we do it. I’ve proposed a balanced approach that cuts spending while still investing in things like education and clean energy that are so critical to creating jobs and opportunities for the middle class. It’s a simple idea: we need to live within our means while at the same time investing in our future.

That’s why I disagree so strongly with a proposal in Congress that cuts our investments in clean energy by 70 percent. Yes, we have to get rid of wasteful spending – and make no mistake, we’re going through every line of the budget scouring for savings. But we can do that without sacrificing our future. We can do that while still investing in the technologies that will create jobs and allow the United States to lead the world in new industries. That’s how we’ll not only reduce the deficit, but also lower our dependence on foreign oil, grow the economy, and leave for our children a safer planet. And that’s what our mission has to be.

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Ryan Budget: Big Cuts for Energy Technology Investment

On 04.07.11, In News, By Staff

Representative Paul Ryan’s budget proposal [PDF] would cut approximately 85% of federal investments in energy technology research and deployment within three years, from around $7 billion in 2010 to $1 billion in 2014, while retaining billions in subsidies for the oil and gas industry.  As the New York Times reports:

Under the Republican plan, overall discretionary funding for energy programs would fall to about $1 billion per year. President Obama’s 2012 budget, meanwhile, would provide about $8 billion to support clean energy research and deployment.

…Cuts proposed in a short-term spending bill provide further clues as to which specific energy programs are likely to face calls for long-term elimination. The House-passed bill reduces research and development financing for electric car battery technology and charging infrastructure and eliminates loan guarantees meant to encourage clean energy manufacturing.

Production and investment tax credits for wind and solar power, which will lapse in several years, are also probable targets for elimination.

Other energy incentives may go unchallenged, however. Questioned on Fox News on Sunday by Chris Wallace on whether multibillion-dollar subsidies for oil and gas companies would also be eliminated, Mr. Ryan did not give a direct answer.

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Why Recycling is an Energy Policy

On 04.06.11, In Opinion, By McKenna Morrigan

Recycling Saves Energy - poster from NCDENR</ins>More than three-quarters of all Americans recycle, and on the East and West Coasts, nearly 90% do. But although virtually everyone agrees that recycling is good for the environment, most people do not think of recycling as a solution for one of today’s biggest problems – energy dependence on climate-disrupting fossil fuels. A closer look reveals that recycling can play a serious role in reducing energy use and increasing efficiency.

Recycling delivers a host of environmental benefits, including conserving scarce natural resources, keeping dangerous and toxic chemicals out of landfills where they can leach into the groundwater, and reducing methane emissions from landfills. In spite of these benefits, recycling has always had its detractors. In a notorious 1996 New York Times Magazine article, staff writer John Tierney argued that recycling programs wasted more resources than they saved. That turns out to be a spurious argument, but it is closer to true if the only averted costs considered are those associated with collecting garbage and hauling it to landfills (although, it seems fair to mention that no one has ever criticized garbage collection for not paying for itself). But averted disposal costs are only a tiny slice of the savings generated from recycling. The big savings come in the form of energy.

Energy is used throughout the entire lifecycle of consumer products, from extracting and processing the raw materials used, manufacturing the products themselves, distributing those products to retailers, and of course, collecting and processing or disposing of products once consumers no longer find them useful. Those first two phases—extracting/processing raw materials and manufacturing—are by far the most energy intensive, and that is where recycling can deliver big reductions.

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China Buries Obama’s and House Plan for Cleantech Competitiveness

On 04.05.11, In News, By Staff

As the House GOP leadership proposes a plan to curtail long-term federal investment in strategic research, technology, and innovation, China’s new Five-Year Plan intends to increase the nation’s R&D investment as a percentage of GDP from 1.8% to 2.2% by 2015, an increase of over 22%, while raising its commitment to clean energy technology deployment and manufacturing.

According to Joshua Freed, director of the energy program at the centrist think tank Third Way, the new House budget proposal “protects existing regulated markets and guts innovation — particularly applied research and development that are parts of the valley of death for too many companies — while pulling the rug out from under clean energy deployment”

A new BusinessWeek article, “China Buries Obama’s ‘Sputnik’ Goal for Clean-Energy Use,” notes the following:

“They intend to leapfrog the U.S. in these technologies,” Will Coleman, a partner at Menlo Park, California-based Mohr Davidow Ventures, told the Senate Energy Committee on March 17. “If we don’t move forward urgently, I’m concerned that we will not only cede the current opportunity, but we’ll lose the knowledge and the experience necessary to compete.”

…After the Soviet Union in 1957 launched the beach ball- sized Sputnik, the first man-made satellite, President Dwight Eisenhower set up the National Aeronautics and Space Administration to energize the space program and take the lead from the Soviets. President John F. Kennedy set the goal of landing a man on the moon, and by 1965 NASA’s annual budget reached the equivalent of $37 billion in 2011 dollars.

China will invest about twice that in clean-energy projects each year for a decade in a 5 trillion-yuan program aimed at steering the economy away from fossil fuels, under a five-year plan announced last month. CDB loans are expanding the manufacturing base, driving down the cost of the renewable- energy equipment it exports.

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White House Releases Updated Energy R&D Strategy

On 04.05.11, In News, By Staff

Last week, President Obama delivered a major speech on energy policy at Georgetown University and announced the release of the White House’s new “Blueprint for a Secure Energy Future.”

In terms of promoting clean energy innovation through research and development (R&D), the contents of the White House report are included below.  President Obama defended these investments in his speech by noting:

So a clean energy standard will help drive private investment in innovation. But I want to make this point: Government funding will still be critical. Over the past two years, the historic investments my administration has made in clean and renewable energy research and technology have helped private sector companies grow and hire hundreds of thousands of new workers.

I’ve visited gleaming new solar arrays that are among the largest in the world. I’ve tested an electric vehicle fresh off the assembly line. I mean, I didn’t really test it — I was able to drive like five feet before Secret Service said to stop. (Laughter.) I’ve toured factories that used to be shuttered, where they’re now building advanced wind blades that are as long as 747s, and they’re building the towers that support them. And I’ve seen the scientists that are searching for the next big breakthrough in energy. None of this would have happened without government support.

I understand we’ve got a tight fiscal situation, so it’s fair to ask how do we pay for government’s investment in energy. And as we debate our national priorities and our budget in Congress, we’re going to have to make some tough choices. We’re going to have to cut what we don’t need to invest in what we do need.

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