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BOX 6-3

Another Point of View: ARPA-E

Energy issues are potentially some of the most profound challenges to our future prosperity and security, and science and technology will be critical in addressing them. But not everyone believes that a federal program like the proposed ARPA-E would be an effective mechanism for developing bold new energy technologies. This box summarizes some of the views the committee heard about ARPA-E from those who disagree with its utility.

Some believe that such applied energy research is already well funded by the private sector—by large energy companies and, increasingly, by venture capital firms—and that the federal government should fund only basic research. They argue that there is no shortage of long-term research funding in energy, including that sponsored by the federal government. DOE is the largest individual government supporter of basic research in the physical sciences, providing more than 40% of associated federal funding. DOE provides funding and support to researchers in academe, other government agencies, nonprofit institutions, and industry. The government spends substantial sums annually on research, including $2.8 billion on basic research and on numerous technologies. Given the major investment DOE is already making in energy research, it is argued that if additional federal research is desired in a particular field of energy, it should be accomplished by reallocating and optimizing the use of funds currently being invested.

It is therefore argued that no additional federal involvement in energy research is necessary, and given the concerns about the apparent shortage in scientific and technical talent, any short-term increase in federally directed research might crowd out more productive private-sector research. Furthermore, some believe that industry and venture capital investors will already fund the things that have a reasonable probability of commercial utility (the invisible hand of the free markets at work), and what is not funded by existing sources is not worthy of funding.

Another concern is that an entity like ARPA-E would amount to the government’s attempt to pick winning technologies instead of letting markets decide. Many find that the government has a poor record in that arena. Government, some believe, should focus on basic research rather than on developing commercial technology.

Others are more supportive of DOE research as it exists and are concerned that funding ARPA-E will take money away from traditional science programs funded by DOE’s Office of Science in high-energy physics, fusion energy research, material sciences, and so forth that are of high quality and despite receiving limited funds produce Nobel-prize-quality fundamental research and commercial spinoffs. Some believe that DOE’s model is more productive than DARPA’s in terms of research quality per federal dollar invested.

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