Fostering innovation seen as better R&D tool than mandates, funding

Facilitating innovation sooner would be a more effective step than simply imposing mandates or increasing funding in breaking an apparent US energy and climate research and development logjam, speakers suggested during a Mar. 27 discussion at the Brookings Institution.

Facilitating innovation sooner would be a more effective step than simply imposing mandates or increasing funding in breaking an apparent US energy and climate research and development logjam, speakers suggested during a Mar. 27 discussion at the Brookings Institution.

“More money for this R&D will not be sufficient. Neither will more regulations. Fresh approaches will be required to generate the innovation to get the job done,” said Massachusetts Institute of Technology Prof. John Deutch whose federal service included several US Department of Energy positions from 1977 to 1980.

“Energy has an important distinction between R&D and innovation because it requires a stable investment policy environment that recognizes its enormous scale as well as new ideas and cost-effective implementation,” Deutch said.

Another speaker, Ellen D. Williams, who directed DOE’s Advanced Research Projects Agency-Energy (ARPA-E) during the Obama administration and was BP PLC’s chief scientist during 2010-14, said, “We know we have innovation opportunities but aren’t making the best use of them. We need to find near-term social needs that will let people buy into them.”

New capabilities are emerging that can facilitate innovations in existing energy systems, such as finding and stopping leaks more quickly in natural gas pipelines, Williams said. Government needs to do its early-stage research better so more of it can be handed over to the private sector for commercialization, Williams said.

“We need to accelerate innovative development to drive down costs,” Williams said. She was skeptical of the idea in the Trump administration’s initial fiscal 2018 budget proposal that the private sector can frame energy and climate R&D better than the federal government. “Over the past 8 years, ARPA-E funded $1 billion of investment, which produced another $1.8 billion once its R&D results moved into the private sector,” she said.

Serious impediments

The US has had 25 years of multibillion-dollar incentives driving US energy policies that have not produced adequate results, said Nautilus Data Technologies Chief Executive Office James L. Connaughton, who chaired the White House Council on Environmental Quality when George W. Bush was president. “The technologies are there, but there are serious impediments to innovating them efficiently,” he said.

“When it comes to development, you’re more likely to be successful if you can innovate into a lower-cost technology with fewer environmental impacts,” Connaughton said. “One major problem is that when scientists are ready to deploy, the private sector generally isn’t there yet.”

This could create diplomatic problems if the US is content to enjoy the benefits of using more domestically produced natural gas produced from hydraulic fracturing and horizontal drilling without tacking carbon capture and storage challenges more aggressively, Connaughton warned.

“It may not be what gets Wall Street and large investment trusts excited, but we need to find ways to move these climate technologies forward. Otherwise, we’ll be no better than China or India,” Connaughton said. “We have to match capital that’s sitting on the financial market’s sidelines with these projects.”

Deutch said the US has an advantage because it has a general economy pushed more by innovations than pulled by markets. “The main question is what this country is willing to do to regain its energy technology leadership,” he said.

Contact Nick Snow at nicks@pennwell.com.

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