In just a decade, America’s energy landscape has been transformed. Wind and solar units have cropped up across the country, quadrupling their output. Our oil production has nearly doubled over the same period, while natural gas has swelled by a third, due in large part to drilling and seismology advances that ushered in the shale revolution.
Who developed those technologies? Researchers at America’s national labs, thanks to decades of federal funding.
Washington has long pushed American industry and workers to outcompete the rest of the world. Without federal investments in energy innovation, we wouldn’t have our current energy boom, and advanced energy wouldn’t be one of the economy’s brightest spots.
Some say the federal government can no longer afford to make these investments. But we say it can’t afford not to. Here’s why: American consumers have already saved billions in energy costs and benefited from millions of new jobs. The right investments now could give us an edge in the fiercely competitive multitrillion-dollar global energy sector.
As we speak, other nations, including China, are investing more than America in cutting-edge technologies. The U.S. ranks as low as 10th in overall innovation, recent studies show. Some look to the private sector to make up the shortfall, but companies are reluctant because they can’t recoup such investments directly or quickly. It’s no coincidence that private energy sector R&D investments are just 0.3 percent of revenues, compared to nearly 20 percent in pharmaceuticals, 10.6 percent in electronics and 7.6 percent in aerospace.
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This is where federal funding has made such a difference. The national labs gave us horizontal drilling, better drill bits, and breakthroughs in modern computing and seismology, allowing the private sector to commercialize shale gas. Advanced gas turbines, the result of research aimed at jet engines, meant that electric utilities could use those new natural gas supplies more efficiently, which in turn lowered costs.
Just last week, the National Renewable Energy Laboratory, U.S. Army Research Lab and others announced a forward leap in battery technology. Replacing lithium with more plentiful magnesium will result in safer electric auto batteries that can produce twice the electricity per unit weight.
For the nation at large, the return on investments from these projects is nothing short of astounding. Federal investments in building efficiency have yielded energy savings of nearly $22 billion — a benefit-to-cost ratio between 20-to-1 and 66-to-1. Likewise, DOE research aimed at reducing coal emissions will create 1.2 million jobs and deliver $111 billion in economic benefits by 2020 — returning $13 for every $1 invested.
No wonder FedEx founder Fred Smith says energy innovation programs are the among the best investments America makes.
Our bottom line is simple: The United States can beat out the rest of the world in the energy sector if we make smart investments in next-generation technology. This is why we joined 10 other leading business and technology CEOs in forming the American Energy Innovation Council. Our experience as top executives has shown us that federal investments are crucial to developing new technologies, which is key to global competitiveness. New jobs aren’t the only thing on the line; sometimes, it’s whole new industries.
Congress is beginning to rediscover this connection. Key energy research programs at the Department of Energy received modest funding increases in the recent budget agreement, far short of the doubling or tripling we need.
But spending every dollar wisely is also a must, which is why we support transformative programs like the Advanced Research Projects Agency-Energy, or ARPA-E, which has already proven successful in squeezing more private sector growth out of every federal dollar. Further reforms should be considered even as funding grows.
The good news is that even more transformative energy technologies are waiting for investment. They include utility-scale electricity storage, materials science, advanced biofuels, next-generation nuclear power, super-efficient batteries for electric vehicles, and many others that can once again revolutionize the world’s energy systems.
The future is ours if we continue to invent it. Innovation is the key to U.S. energy competitiveness, to keeping America’s energy economy humming, and to making sure our best days are ahead.
Norman Augustine is retired chairman and CEO of Lockheed Martin. Chad Holliday is former chairman and CEO of DuPont.
The Bipartisan Policy Center is a Washington, D.C.-based think tank that actively promotes bipartisanship. BPC works to address the key challenges facing the nation through policy solutions that are the product of informed deliberations by former elected and appointed officials, business and labor leaders, and academics and advocates from both ends of the political spectrum. BPC is currently focused on health, energy, national security, the economy, financial regulatory reform, housing, immigration, infrastructure, and governance. Website | Twitter | Facebook