For other versions of this document, see http://wikileaks.org/wiki/CRS-RL34497
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Prepared for Members and Committees of Congress
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In August 2007, Congress authorized the establishment of the Advanced Research Projects
Agency - Energy (ARPA-E) within the Department of Energy (DOE) as part of the America
COMPETES Act (P.L. 110-69). Modeled on the Defense Advanced Research Projects Agency
(DARPA), ARPA-E would support transformational energy technology research projects with the
goal of enhancing the nation's economic and energy security.
Proponents of ARPA-E contend that additional science and technology would help respond to the
nation's need for clean, affordable, and reliable energy. Opponents question whether ARPA-E is
necessary to develop new technologies, when existing energy technologies are not fully utilized
due to insufficient policies to encourage their implementation. ARPA-E proponents counter that
ARPA-E is needed to catalyze the energy marketplace by accelerating research that will bridge
the gap between basic research and industrial product development.
The Bush Administration questions whether the DARPA model can be used for the energy sector
and is concerned that it might redirect funds away from current DOE research activities,
particularly the DOE Office of Science. Instead, the President's FY2009 budget requests funding
for six new technology transfer collaborations. ARPA-E proponents doubt that DOE can achieve
ARPA-E's goals with its existing structure and personnel, as opposed to the ARPA-E's innovative
R&D management design.
Congress authorized $300 million for ARPA-E in FY2008 and "such sums as are necessary" for
FY2009 and FY2010. Congress subsequently appropriated no funds for FY2008. The
Administration requested no funds for ARPA-E in FY2009. Congress is currently debating
whether to fund ARPA-E in FY2009, and if so, the amount that should be appropriated. The
House Committee on Appropriations draft FY2009 Energy and Water Development
appropriations report would provide $15 million for ARPA-E, while the Senate Committee on
Appropriations bill and report (S. 3258; S.Rept. 110-416) does not include any funding.
Several bills propose methods of funding ARPA-E directly through a revenue source other than
direct appropriations. Some experts have testified that funding ARPA-E through a mechanism that
differs from the usual single-year appropriations process would enhance its ability to conduct
risky research without being subject to the annual appropriations cycle, political and financial
pressures, and resource fluctuations that might stifle innovation. Three climate change bills (S.
2191, S. 3036, H.R. 6186) propose long-term funding for ARPA-E as part of a cap-and-trade
program. Two energy bills (H.R. 6067, H.R. 6709) propose exchanging Strategic Petroleum
Reserve (SPR) crude and direct SPR funds from a prior sale, with some of the resulting funding
directed to fund ARPA-E. Two other energy bills (H.R. 6670, H.R. 6817) would use Outer
Continental Shelf oil and gas lease revenues to fund ARPA-E.
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Overview of ARPA-E Design.......................................................................................................... 1
Management.............................................................................................................................. 1
Funding and Outcome Evaluation............................................................................................. 3
Legislative Origins and Policy Debates Prior to ARPA-E Authorization........................................ 3
Legislative Origins in the 109th and 110th Congress.................................................................. 4
Policy Debates........................................................................................................................... 5
Is ARPA-E Needed?............................................................................................................ 7
How Much Funding Should ARPA-E Receive? ................................................................. 8
Will ARPA-E Work? ........................................................................................................... 9
Bush Administration Response to ARPA-E Authorization.............................................................. 9
Ongoing Congressional Debate Over ARPA-E Funding............................................................... 10
Author Contact Information .......................................................................................................... 12
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I n August 2007, Congress authorized the establishment of the Advanced Research Projects
Agency - Energy (ARPA-E).1 Modeled on the Defense Advanced Research Projects Agency
(DARPA) in the Department of Defense (DOD), ARPA-E would be a new organization within
the Department of Energy (DOE). It would support transformational energy technology research
projects with the goal of enhancing the nation's economic and energy security. Congress
authorized $300 million for ARPA-E in FY2008 and "such sums as are necessary" for FY2009
and FY2010. Ultimately, Congress appropriated no funds for FY2008. The Administration
requested no funds in FY2009. Congress is currently debating whether to fund ARPA-E in
FY2009.
As outlined in the America COMPETES Act (P.L. 110-69, §5012), the goal of ARPA-E would be
to enhance the economic and energy security of the United States through the development of
technologies that reduce energy imports, reduce energy-related greenhouse gas emissions, and
improve energy efficiency in all economic sectors. In addition, ARPA-E would aim to ensure that
the United States is a technical leader in developing and deploying advanced energy technologies.
According to the act, ARPA-E would achieve this goal by identifying and promoting
revolutionary advances in fundamental sciences and translating scientific discoveries and cutting-
edge inventions into technological innovations. ARPA-E would focus its efforts on accelerating
transformational technological advances in areas that industry, by itself, is not likely to undertake
due to technical and financial uncertainty. As stated in §5012, the agency's programs would
accelerate novel early-stage energy research with possible technology applications; the
development of techniques, processes, and technologies and related testing and evaluation;
research and development (R&D) of manufacturing processes for novel energy technologies; and
coordination with nongovernmental entities to demonstrate technologies and research
applications to facilitate technology transfer.
To achieve these goals, ARPA-E would make awards to academic institutions, companies,
research foundations, and trade and industry research collaborations as well as consortia of these
organizations that could additionally include federally funded research and development centers
(FFRDCs). According to the act, the criteria for selecting projects would include novelty,
scientific and technical merit, the demonstrated capability of the applicant to successfully carry
out the proposed project, future commercial applications of the project, and the feasibility of
partnering with one or more commercial entities, as well as additional criteria established by the
director of ARPA-E.
The management of ARPA-E, as described in the act, is modeled on that of DARPA (see Box 1
below). DARPA has a well-known history of catalyzing innovative technologies such as the
Saturn rocket engine used for moon flights, the pilotless Predator planes used in Iraq and
1
America COMPETES Act (P.L. 110-69), §5012. For more information, see CRS Report RL34328, America
COMPETES Act: Programs, Funding, and Selected Issues, by Deborah D. Stine, and CRS Report RL34396, The
America COMPETES Act and the FY2009 Budget, by Deborah D. Stine.
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Afghanistan, computer-aided design, global positioning satellites, the computer mouse, and the
Internet. DARPA seeks to sponsor revolutionary, high-payoff research that "bridges the gap
between fundamental discoveries and their military use."2 According to its director, "DARPA will
take a chance on an idea with no data. We'll put up the money to go get the data and see if the
idea holds. That is the highest-risk type of research you can have."3
The act states that ARPA-E would be managed by a presidentially appointed director, who would
report to the Secretary of Energy. The director would approve all new programs, develop funding
criteria, establish technical milestones to assess program success, and terminate programs not
achieving their goals. The director would have the authority to appoint 70 to 120 scientific,
engineering, and professional personnel without regard to civil service laws and to determine
their compensation. The director would be responsible for ensuring that ARPA-E activities are
coordinated with, and do not duplicate, DOE and other federal programs and laboratory activities;
the program managers would establish R&D goals and select projects based on merit.
Both the director and the program managers would be permitted to seek advice on the overall
direction of ARPA-E and specific program tasks from a new ARPA-E advisory committee or
existing DOE federal advisory committees. Additional sources of advice provided for in the act
include the President's Council of Advisors on Science and Technology (PCAST), professional
organizations, and disciplinary societies.4
2
Testimony of Dr. Anthony Tether, Director, Defense Advanced Research Projects Agency, in U.S. Congress, House
Committee on Science, The Future of Computer Science Research in the United States, hearing, 109th Cong., 1st sess.,
May 12, 2005, H.Hrg. 109-14 (Washington, DC: GPO, 2005) at http://science.house.gov/commdocs/hearings/full05/
may12/tether.pdf.
3
Anthony Tether as quoted in Stephen Barr, "The Idea Factory That Spawned the Internet Turns 50," Washington Post,
April 7, 2008.
4
For a description of these organizations, see CRS Report RL34454, Science and Technology Policymaking: A Primer,
by Deborah D. Stine.
federal R&D. For example, an "advanced civilian technology agency" was proposed in the 100th
The DARPA model has frequently been proposed as a structure for improving the management of
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technology investments for the subsequent three fiscal years.
roadmaps are to describe the strategic vision ARPA-E would use to determine its future
strategic vision roadmaps to Congress no later than October 1, 2008, and October 1, 2011. The
previous year, as part of the annual budget request to Congress. The director would also submit
The ARPA-E director would submit an annual report, describing projects supported in the
No funds may be used for construction of new buildings or facilities until August 2012.
technology transfer. At least 2.5% must be used for technology transfer and outreach activities.
nongovernmental entities for technology demonstration and research applications to facilitate
Should funds be appropriated for ARPA-E, no more than 50% may be used for coordination with
Academy of Sciences (NAS) is to evaluate how well ARPA-E is achieving its goals and mission.
distinct from the rest of DOE's budget. After ARPA-E has operated for four years, the National
for FY2009 and FY2010. ARPA-E's budget request and appropriations are to be separate and
Treasury, with $300 million of funding authorized for FY2008 and "such sums as are necessary"
The act authorizes an Energy Transformation Acceleration Fund in the Department of the
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.tnavelerri
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a si ti ,hguoht ,APRAD roF .noisnetxe elpmis a sa nees eb yam siht ,dlrow edistuo eht ot ,dna reganam margorp emas
eht htiw spahrep ,aera lacinhcet emas eht ni detrats si tcejorp rehtona taht eb yam tI .dne eht si tcejorp hcae fo dne
ehT .spets desucof fo seires a sa ylno tub ,semit regnol hcum revo desserdda eb yam segnellahc lacigolonhcet rojaM
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a no "derih" era )evitartsinimda ,gnitcartnoc ,lacinhcet( lennosrep gnitroppus yrasseceN .sevitcepsrep dna gnikniht
hserf erussa ot detator dna sraey 5-3 rof dengissa era ffats lacinhceT .sretneC tnempoleveD dna hcraeseR dednuF
yllaredeF dna seirotarobal tnemnrevog ,seitisrevinu ,yrtsudni morf noitatneserper htiw sreenigne dna stsitneics
ssalc-dlrow morf nward si ffats lacinhcet ehT .slaog rieht fo tiusrup ni stolaez gnileehweerf neeb syawla evah sreganaM
margorP APRAD tseb ehT .lairuenerpertne dna gnidnatstuo yllacinhcet eb ot detceles era sreganam margorP :ffatS
.sreganam margorp s'APRAD gnilbane sa boj rieht sweiv tnemeganaM
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morf modeerf dna ymonotua laitnatsbus htiw noitazinagro talf dna ,elbixelf ,llams a si APRAD :tnemeganaM
:yrotsih raey-05 sti revo selpicnirp tnemeganam gniwollof eht deniatniam sah
ti ,APRAD ot gnidroccA ?ledom tnemeganam D&R laredef lausu-sa-ssenisub lacipyt eht morf reffid APRAD seod woH
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and 101st Congresses.5 In 1992, an NAS report recommended that the government consider a
civilian technology corporation or a civilian technology agency in limited areas including energy
research.6 In 1993, the Progressive Policy Institute made a similar proposal.7 In 1992, presidential
candidate Bill Clinton and Senator Al Gore proposed the creation of a civilian advanced research
agency to support research on renewable technologies and renewable fuels.8
From 1977-2000, DOE had an Advanced Energy Projects (AEP) division to "explore the
feasibility of novel, energy-related concepts that evolve from advances in basic research," and
"high-risk, exploratory concepts which do not readily fit into an existing DOE program area but
which could lead to applications that span scientific or technical disciplines."9 In 1995, DOE
placed AEP's activities were under a new Computational and Technology Research program. This
reorganization was formally stated in DOE's 1997 budget request. Funding for the program was
reduced in FY1998 and FY1999, and the AEP program was terminated in FY2000.10
The Homeland Security Act of 2002 (P.L. 107-296) established a Homeland Security Advanced
Research Projects Agency (HSARPA) in the Department of Homeland Security.11 According to
the act, HSARPA is to "(A) support basic and applied homeland security research to promote
revolutionary changes in technologies that would promote homeland security; (B) advance the
development, testing and evaluation, and deployment of critical homeland security technologies;
and (C) accelerate the prototyping and deployment of technologies that would address homeland
security vulnerabilities."
Against this historical backdrop, in October 2005, a committee of the NAS recommended the
establishment of ARPA-E in its report Rising Above the Gathering Storm.12 In November 2005,
during the 109th Congress, the House Minority Leader released an innovation agenda that
proposed to create a new DARPA-like initiative within DOE.13 In 2007, this same concept was
5
Proposals during the 101st Congress, 2nd session, included S. 1978, H.R. 3833, H.R. 4715, and S. 2765. These are
discussed in U.S. Congress, Office of Technology Assessment, Making Things Better: Competing in Manufacturing,
OTA-ITE-443 (Washington, DC: GPO), February 1990.
6
National Academy of Sciences, National Academy of Engineering, and Institute of Medicine, The Government Role
in Civilian Technology: Building a New Alliance (Washington, DC: National Academy Press, 1992).
7
Will Marshall and Martin Schram, Mandate for Change (New York: Berkeley Books, 1993).
8
Bill Clinton and Al Gore, Putting People First: How We Can All Change America (New York: Random House,
1992).
9
Department of Energy, "Advanced Energy Projects: FY 1995 Research Summaries," DOE/ER-0660T, September
1995 at http://www.sc.doe.gov/bes/archives/summaries/Advanced_Energy_Projects_Summary_Book_FY1995.pdf.
Sarah Adee, "Power Up," IEEE Spectrum, September 2007 at http://spectrum.ieee.org/sep07/5484.
10
A history of this organization is at http://www.sc.doe.gov/bes/BES_history.html.
11
For more information on HSARPA, see CRS Report RL34356, The DHS Directorate of Science and Technology:
Key Issues for Congress, by Dana A. Shea and Daniel Morgan.
12
The National Academies, Rising Above the Gathering Storm: Energizing and Employing America for a Brighter
Economic Future (Washington, DC: National Academy Press, 2007), p. 154. This report was initially released in pre-
publication form in October 2005.
13
U.S. Congress, Office of Congresswoman Nancy Pelosi, "Pelosi: Unveils Innovation Agenda, Part of Vision for a
Stronger America," press release, November 15, 2005, at http://www.house.gov/pelosi/press/releases/Nov05/
innovation.html.
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part of an updated "Innovation Agenda" proposed by the Speaker of the House at the beginning of
the 110th Congress.14
In the January 2006 State of the Union address, President Bush announced the American
Competitiveness Initiative (ACI), the Administration's response to the concerns about U.S.
competitiveness that were similar to those expressed in the America COMPETES Act. Instead of
endorsing the ARPA-E concept, however, the Administration proposed an Advanced Energy
Initiative (AEI). The Administration has continued its support for the ACI and the AEI into the
110th Congress.15
Although some analysts questioned whether ARPA-E was the best policy option to respond to the
nation's energy challenges,16 the proposal recommended in the NAS report became the basis for
congressional hearings and debates in the 109th and 110th Congresses and eventually served as the
outline for ARPA-E as authorized in the America COMPETES Act. (See Box 2 below)
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:seitivitca EOD tnerruc morf ti hsiugnitsid dluow taht sevitcejbo ruof
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gnuoy dna stneduts fo esoht ,yllaicepse ,dna ,sreenigne dna stsitneics decneirepxe fo esoht--sdnim tsethgirb
.dlrow lairuenerpertne eht ni esoht gnidulcni ,srehcraeser
.troppus ton lliw ro tonnac yrtsudni taht hcraeser lanoitamrofsnart yllaitnetop ,xob-eht-fo-tuo ,evitaerc no sucoF .2
snoisiced gnikam dna slaog gnittes fo elbapac tey ,esraps dna ,elbmin ,talf si taht noitazinagro ekil-APRA na ezilitU .3
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In the 109th Congress, the Senate Committee on Energy and Natural Resources and the House
Committee on Science held hearings on ARPA-E.17 The chairman of the House Committee on
14
U.S. Congress, Speaker Nancy Pelosi, The Innovation Agenda: 110th Congress at http://www.speaker.gov/
issues?id=0016, April 27, 2007.
15
U.S. President (G.W. Bush), American Competitiveness Initiative, Domestic Policy Council/Office of Science and
Technology Policy, February 2006, at http://www.ostp.gov/pdf/acibooklet.pdf; Advanced Energy Initiative, National
Economic Council, February 2006 at http://www.whitehouse.gov/stateoftheunion/2006/energy/energy_booklet.pdf; and
"Advanced Energy Initiative 2008" at http://www.ostp.gov/pdf/fy08_aei_one_pager.pdf and "Energy Security for the
21st Century" at http://www.whitehouse.gov/infocus/energy/.
16
See for example, David Goldston, "Misspent Energy," Nature, 447:130, May 10, 2007 at http://www.nature.com/
nature/journal/v447/n7141/pdf/447130a.pdf.
17
U.S. Congress, Senate Committee on Energy and Natural Resources, "PACE Energy Act," hearing, 109th Cong., 2nd
(continued...)
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Science stated that he was an "open-minded skeptic" regarding ARPA-E, and pointed out that the
recommendation for its establishment was based on four assumptions that he considered
questionable:
· The problem with the energy market is that the supply of new technologies is
insufficient;
· The supply of new technologies is constrained because of a lack of fundamental
research;
· A sensible way to promote more fundamental research is to apply the DARPA
model to a civilian energy sector; and
· Implementing the DARPA model is the best way to improve energy research,
given tight federal budgets.18
In the 110th Congress, the House Committee on Science and Technology held a similar hearing. In
his opening statement, the committee chairman stated that, among several policy goals and
objectives, DARPA has succeeded largely because it continued to foster a culture of innovation.
The key for ARPA-E success, he said, is that it be a similarly nimble organization with minimal
administrative layers and the ability to quickly start and stop research programs. According to the
chair, "Investment in ARPA-E must be seen as the first step in boosting energy research and
development to a level that addresses the scale of our challenge, and the true cost of doing
transformational research."19
The Administration formally opposed the authorization of ARPA-E during the 110th Congress:
The Administration supports the conceptual goal of ARPA-E "to overcome the long-term
and high-risk technological barriers in the development of energy technologies." However,
the Administration continues to strongly object to this provision due to serious doubts about
the applicability of the national defense model to the energy sector and because a new
bureaucracy at the DOE would drain resources from priority basic research efforts. The
Administration believes that the goal of developing novel advanced energy technologies
should be addressed by giving the Secretary of Energy the flexibility to empower and reward
programs within existing DOE offices to fund unique, crosscutting, and high-risk research.20
The following sections discuss several key questions debated during the House Science and
Technology and Senate Committee on Energy and Natural Resources hearings held regarding
(...continued)
session, February 15, 2006 (Washington, DC: GPO, 2006) at http://www.gpoaccess.gov/chearings/index.html; U.S.
Congress, House Committee on Science, "Should Congress Establish `ARPA-E,' The Advanced Research Projects
Agency - Energy?," hearing, 109th Congress, 2nd session, March 9, 2006 (Washington: GPO, 2006) at
http://www.gpoaccess.gov/chearings/index.html.
18
U.S. Congress, House Committee on Science, "Should Congress Establish `ARPA-E,' The Advanced Research
Projects Agency - Energy?," hearings, 109th Congress, 2nd session, March 9, 2006 (Washington, DC: GPO, 2006) at
http://www.gpoaccess.gov/chearings/index.html.
19
U.S. Congress, House Committee on Science and Technology Committee, "Establishing the Advanced Research
Projects Agency-Energy (ARPA-E)," hearing, 110th Cong., 1st session, April 26, 2007, at http://www.gpoaccess.gov/
chearings/index.html.
20
U.S. President (George W. Bush), "S. 761--America Creating Opportunities to Meaningfully Promote Excellence in
Technology, Education, and Science Act," Statement of Administration Policy, April 23, 2007 at
http://www.whitehouse.gov/omb/legislative/sap/110-1/s761sap-s.pdf.
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ARPA-E in the 109th and 110th Congress.21 This analysis incorporates issues discussed in hearing
charters, Members' statements and questions, and the statements and responses of those providing
expert testimony.
Is ARPA-E needed when the federal government and industry already invest a great deal in
energy R&D? A related question is whether In-Q-Tel,22 the Central Intelligence Agency (CIA)
venture capital firm that provides funding to identify, develop, and deliver technologies of interest
to the intelligence community, is a better model for the energy marketplace than DARPA. (See
Box 3 below.)
Proponents state that ARPA-E will address organizational problems at DOE by being small and
flexible, unlike existing DOE organizations, which they believe are risk-averse and do not
sufficiently interact with each other to reach the nation's energy goals. In addition, proponents
argue that ARPA-E should focus on breakthrough research, using emerging basic research in
areas such as nanotechnology to develop totally new technologies, as opposed to existing
programs that have already identified paths forward and tend to focus on incremental advances.
Further, unlike current programs, ARPA-E is designed to bridge the gap between basic research
and industrial development--not to get products to the marketplace, but to transform the
marketplace by accelerating research.
In response to the claim that ARPA-E will be more flexible and less risk-adverse, critics point out
that the new organization will still be within DOE, so there is no guarantee that DOE
management will let it take more risks than existing programs. In response to the claims that
ARPA-E would bridge the gap between basic research and industrial development and that
existing applied programs tend to focus on incremental advances, some critics argue that
reforming DOE's existing programs would be better than creating a new organization.
Advocates for ARPA-E indicated that candidate energy technologies are not yet at a stage where
venture capital investment, such as occurs with In-Q-Tel, would provide the best return. At some
point, however, ARPA-E research may lead to technologies appropriate for venture capital. At
that stage, it might be appropriate to incorporate a venture capital component into ARPA-E's
design. Just as DARPA has evolved over 50 years, ARPA-E may need to evolve as well, some
witnesses said.
21
U.S. Congress, Senate Committee on Energy and Natural Resources, "PACE Energy Act," hearing, 109th Cong., 2nd
session, February 15, 2006 (Washington, DC: GPO, 2006) at http://www.gpoaccess.gov/chearings/index.html; U.S.
Congress, House Committee on Science, "Should Congress Establish `ARPA-E,' The Advanced Research Projects
Agency - Energy?," hearings, 109th Congress, 2nd session, March 9, 2006 (Washington: GPO, 2006) at
http://www.gpoaccess.gov/chearings/index.html; U.S. Congress, House Committee on Science and Technology
Committee, "Establishing the Advanced Research Projects Agency-Energy (ARPA-E)," hearing, 110th Cong., 1st
session, April 26, 2007 (Washington, DC: GPO, 2007) at http://www.gpoaccess.gov/chearings/index.html.
22
For more information on In-Q-Tel, see http://www.inqtel.org/.
http://www.darpa.mil/body/budg.html.
DARPA's FY2008 budget is $3.0 billion. Its FY2009 request is $3.3 billion. For more information, see 23
comparable to DARPA--about $3 billion per year.23
return. Some suggested that if it is to be successful, ARPA-E needs to be funded at a level
energy industries' annual revenues, a level they believed was insufficient relative to the potential
concern that the proposed $300 million in FY2008 was less than 0.02% of the transportation and
sufficient to support the research necessary for ARPA-E to reach its goals. Some noted with
One issue discussed in hearings was whether the level of authorized funding for ARPA-E is
effectiveness would be evaluated and appropriate actions taken, according to the report.
increase gradually over five or six years to $1 billion per year. At that point, the program's
The NAS report proposed that funding for ARPA-E start at $300 million the first year and
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".AIC eht ot ygolonhcet wen fo yreviled eht gnitatilicaf erutnev evitavonni dna lairuenerpertne s'AIC eht sa
eunitnoc dluohs leT-Q-nI .ksir eht shgiewtuo AIC eht ot egatnavda laitnetop s'leT-Q-nI" taht dnuof lenap SNEB ehT
.tcartnoc a gnimrof erofeb
detaulave yletelpmoc si niamod melborp ycnegA eht teem ot ygolonhcet desoporp eht fo ytiliba eht sa llew
sa sutats laicnanif dna erutcurts s'ynapmoc eht otni noitagitsevni htped-nI :tcirts erom si ssecorp ecnegilid euD ·
dna ;deb-tset laitnetop a sa ycnegA eht dna ecneirepxe detaler-ygolonhcet
,latipac lautcelletni htiw seinapmoc oiloftrop sedivorp leT-Q-nI ,si taht ;seinapmoc oiloftrop sti ni "yenom
trams" si tnemtsevnI :hsac dnoyeb seinapmoc oiloftrop eht ot eulav edivorp ot ylekil erom era stnemtsevnI ·
;)epytotorp ro tcudorp tset ,tnemssessa ytilibisaef .g.e( ecivres ro tcudorp a ni tluser syawla slaeD ·
;tessa ro
ytiuqe no nruter no tsomerof ton ,snoitulos ]ygolonhcet noitamrofni[ TI gniniatbo no noitisoporp eulav sti secalP ·
leT-Q-nI sa ,mrif latipac erutnev a naht "rotarelecca ygolonhcet" a sa debircsed retteb si ,setats SNEB ,leT
-Q-nI .mrif latipac erutnev etavirp a dna ledom leT-Q-nI eht neewteb secnereffid eht debircsed osla lenap SNEB ehT
.selcihev tnemtsevni/lautcartnoc laicremmoc retfa deledom erutcurts laed elbixelf a saH ·
dna ;AIC eht htiw detaicossa gnieb fo tehcac eht saH ·
;stcejorp deifissalcnu ni ylno segagnE ·
;seicilop lennosrep ecivres livic yb detcirtser ton sI ·
;yenom "raey on" ,.e.i ,stnemercni raey-itlum ni sdnuf etagilbo naC ·
;stnemeriuqer )RAF( snoitalugeR noitisiuqcA laredeF eht htiw ylpmoc ot deriuqer ton sI ·
;stniartsnoc citarcuaerub rewef saH ·
;stnemtsevni ytiuqe ekam naC ·
leT-Q-nI .ledom D&R
laredef lausu-sa-ssenisub lacipyt eht morf ti etaitnereffid taht scitsiretcarahc gniwollof eht sah leT-Q-nI taht dnuof tI
.ledom leT-Q-nI eht fo sisylana na detcudnoc )SNEB( ytiruceS lanoitaN rof sevitucexE ssenisuB eht fo lenap a ,1002 nI
syeK ngiseD tnemeganaM leT-Q-nI .3 xoB
¢ ¢
¢ ¢
Some of those testifying did not believe ARPA-E should be funded due to budget constraints.
ARPA-E, they argued, would be funded by shifting resources from DOE's Office of Science.
Increasing funding for the DOE Office of Science is also a goal of the America COMPETES Act.
Some hearing witnesses expressed concern that dilution of DOE Office of Science resources
might influence DOE's acceptance of ARPA-E, and hinder its success. Supporters of ARPA-E
agreed that funding for the DOE Office of Science is the highest priority and testified that funding
for ARPA-E should not be redirected from that office.
Some witnesses expressed concerns that a risk-tolerant agency like ARPA-E could not survive if
it was subject to the annual appropriations cycle, political and financial pressures, and resource
fluctuations that might stifle innovation. To overcome this potential challenge, some testifying
proposed dedicated funding (see below).
Some critics believe that what is preventing the United States from reaching its energy goals is
not federal funding for innovative, high-risk research, but rather a lack of private-sector
investment in basic research, failure to effectively transfer new energy technologies to the
marketplace, or some combination of these. They point out the lack of a captive customer: energy
has a broad and diverse public and private market, while DARPA has DOD as its single primary
customer, guaranteeing a solid base of demand. ARPA-E proponents indicated that ARPA-E is
needed for "translational research." This type of research identifies the most pressing market
needs, selects and funds the most promising scientific approaches to enable breakthrough
products, and brings the best candidates of those products to the brink of production.
£
Although President Bush signed the America COMPETES Act into law because it shares the
goals of the ACI, he did not support ARPA-E. A White House fact sheet stated that "The bill
creates over 30 new programs that are mostly duplicative or counterproductive--including a new
Department of Energy agency to fund late-stage technology development more appropriately left
to the private sector."24 After final passage of the act, Raymond Orbach, DOE Under Secretary for
Science, stated that although the goal of the newly authorized agency is "laudable," its structure
needs to be developed.25 Dr. John H. Marburger, director of the White House Office of Science
and Technology Policy, testified that the FY2009 budget does not request funding for ARPA-E
because "the Administration believes very strongly that the basic research programs at the DOE
Office of Science are a higher leverage investment and in greater need of funding than new DOE
programs."26
24
U.S. President (G.W. Bush), "America COMPETES Act of 2007," Fact Sheet, August 9, 2007, at
http://www.whitehouse.gov/news/releases/2007/08/20070809-6.html.
25
American Institute of Physics, "Ray Orbach on FY2008 Funding Bill: `The Clock is Ticking,'" newsletter, FYI
Number 97, September 21, 2007, at http://www.aip.org/fyi/2007/097.html.
26
Testimony of Dr. John Marburger, III, Director, White House Office of Science and Technology Policy, House
Committee on Science and Technology, Funding for the America COMPETES Act in the FY2009 Administration
Budget Request, hearing, 110th Congress, 2nd session, February 14, 2008 at http://democrats.science.house.gov/Media/
(continued...)
¢ ¢
Rather than create ARPA-E, the Secretary of Energy has issued a new policy on technology
transfer that espouses goals similar to that of ARPA-E.27 As a result of this policy, DOE will now
pool funds from the Office of Science and other programs to fund six new collaborations that
integrate basic and applied research. According to DOE, funding for these collaborations will be
based on congressional language that requires DOE to set aside 0.9% of its applied energy
research and development budget for technology transfer.28 For FY2009, DOE has also proposed
$100 million for a new Office of Science program, Energy Frontier Research Centers (EFRCs)
"to accelerate the rate of scientific breakthroughs needed to create advanced energy technologies
for the 21st century...[and to] pursue the fundamental understanding necessary to meet the global
need for abundant, clean, and economical energy."29
An issue for Congress is whether to fund ARPA-E in FY2009, and if so, how much and how long.
The America COMPETES Act authorized $300 million for FY2008, and "such sums as
necessary" for FY2009 and FY2010. Some have proposed providing an advance appropriation
supporting ARPA-E for several years, rather than the usual one-year appropriation. Another
option is to identify a dedicated revenue source for ARPA-E. Some of the funding sources that
have been proposed are
· repeal of oil industry tax and other incentives;30
· gasoline tax;31
· oil company profit tax;32
· federal oil and gas royalties;33
(...continued)
File/Commdocs/hearings/2008/Full/14feb/Marburger_Testimony.pdf.
27
See the press release at http://www.doe.gov/print/5977.htm and the policy statement at http://www.doe.gov/media/
Policy_Statement_on_Technology_Transfer.pdf. The technology transfer policy states "This Policy Statement builds
upon the stimulus provided by the technology transfer provisions contained in the Energy Policy Act of 2005 and other
recent legislative actions such as the `America COMPETES Act' that seek to improve the transfer of energy
technologies from the Department's Facilities to products and applications that address public and private needs."
28
This may be a reference to Section 1001 of the Energy Policy Act (P.L. 109-58): "TECHNOLOGY
COMMERCIALIZATION FUND.--The Secretary shall establish an Energy Technology Commercialization Fund,
using 0.9 percent of the amount made available to the Department for applied energy research, development,
demonstration, and commercial application for each fiscal year, to be used to provide matching funds with private
partners to promote promising energy technologies for commercial purposes."
29
For more information, see Department of Energy, Energy Frontier Research Centers, webpage at
http://www.sc.doe.gov/bes/EFRC.html.
30
House Committee on Science and Technology, "Chairman Gordon Presses Establishment of ARPA-E as a Key to
Clean Energy Independence," press release, May 9, 2008, at http://science.house.gov/press/
PRArticle.aspx?NewsID=2189.
31
For more information on the federal excise tax on gasoline, see CRS Report RL30304, The Federal Excise Tax on
Gasoline and the Highway Trust Fund: A Short History, by Pamela J. Jackson.
32
For more information on use of oil company profits, see CRS Report RL34044, The Use of Profit by the Five Major
Oil Companies, by Robert Pirog.
¢ ¢
· climate change cap-and-trade program;34 and
· Strategic Petroleum Reserve funds.35
An analogous situation might be research supported through the Ultra-Deepwater and
Unconventional Natural Gas and Other Petroleum Resources Program,36 authorized by the
Energy Policy Act of 2005 (P.L. 109-58), which receives funding of $50 million per year derived
from royalties, rents, and bonuses from federal onshore and offshore oil and gas leases.37 Based
on past experience, however, all of these proposals would face challenges in Congress.
Several bills propose methods of funding ARPA-E directly through a revenue source other than
direct appropriations. Three climate change bills (S. 2191, S. 3036, H.R. 6186) would provide
long-term funding for ARPA-E as part of a cap-and-trade program.38 Two energy bills (H.R. 6067,
H.R. 6709) propose exchanging Strategic Petroleum Reserve crude and direct SPR funds from a
prior sale, with some of the resulting funding ($100 million) directed to fund ARPA-E until those
funds are expended.39 Both bills would designate $50 million of those funds for university-based
research projects, and $10 million for program direction expenses. Two other energy bills would
use Outer Continental Shelf oil and gas lease revenues. One (H.R. 6670) would use 25% of these
revenues to fund ARPA-E and a number of other activities without further appropriation or fiscal
year limitation. Another (H.R. 6817) would use 50% of these revenues for the first 10 years or a
maximum of $40 billion (whichever comes first) to fund ARPA-E and other energy R&D within
18 months of enactment.
Appropriations for ARPA-E would be in the Energy and Water Development appropriations bill.
Due to budget constraints, Congress may need to decide whether funding for existing DOE
energy R&D activities, the proposed technology transfer collaborations and Energy Research
Frontier Centers, or ARPA-E is more important. An alternative is to reform existing DOE
programs by incorporating some ARPA-E or In-Q-Tel type aspects.
(...continued)
33
Testimony of Melanie Kenderdine, Vice President, Gas Technology Institute in U.S. Congress, House Committee on
Science, "Should Congress Establish ARPA-E, The Advanced Research Projects Agency - Energy?," hearings, 109th
Congress, 2nd session, March 9, 2006, H.Hrg. 109-39 (Washington: GPO, 2006) at http://science.house.gov/commdocs/
hearings/full06/March%209/Kenderdine.pdf. For an example of oil and gas royalties, see CRS Report RS22567,
Royalty Relief for U.S. Deepwater Oil and Gas Leases, by Marc Humphries.
34
Testimony of Melanie Kenderdine, Vice President, Gas Technology Institute in U.S. Congress, House Committee on
Science, "Should Congress Establish ARPA-E, The Advanced Research Projects Agency - Energy?," hearings, 109th
Congress, 2nd session, March 9, 2006, H.Hrg. 109-39 (Washington: GPO, 2006) at http://science.house.gov/commdocs/
hearings/full06/March%209/Kenderdine.pdf. For more information on cap-and-trade programs, see CRS Report
RL33846, Greenhouse Gas Reduction: Cap-and-Trade Bills in the 110th Congress, by Larry Parker, Brent D.
Yacobucci, and Jonathan L. Ramseur.
35
For more information on the strategic petroleum reserve, see CRS Report RL33341, The Strategic Petroleum
Reserve: History, Perspectives, and Issues, by Robert Bamberger.
36
For more information, see http://www.fossil.energy.gov/programs/oilgas/ultra_and_unconventional/index.html.
37
For more information, see CRS Report RL33493, Outer Continental Shelf: Debate Over Oil and Gas Leasing and
Revenue Sharing, by Marc Humphries.
38
For more information on these bills, see CRS Report RL33846, Greenhouse Gas Reduction: Cap-and-Trade Bills in
the 110th Congress, by Larry Parker, Brent D. Yacobucci, and Jonathan L. Ramseur.
39
For more information on this bill, see CRS Report RL33341, The Strategic Petroleum Reserve: History,
Perspectives, and Issues, by Robert Bamberger.
¢ ¢
The House Committee on Appropriations draft FY2009 Energy and Water Development
appropriations report40 would provide $15 million for ARPA-E, while the Senate Committee on
Appropriations bill and report (S. 3258; S.Rept. 110-416) does not include any funding. CRS
Report RL34417, Energy and Water Development: FY2009 Appropriations, coordinated by Carl
E. Behrens, provides updates on the status of FY2009 appropriations discussions in this area.
Deborah D. Stine
Specialist in Science and Technology Policy
dstine@crs.loc.gov, 7-8431
40
House Committee on Appropriations information is based on the draft bill and report as provided on the
Congressional Quarterly website as of August 1, 2008.
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For other versions of this document, see http://wikileaks.org/wiki/CRS-RL34497