Archive for April, 2012
Originally posted on the Energy Innovation Tracker – for continuing analysis of the unfolding federal budget process, and for insight into the federal energy innovation budget’s composition since 2009, check out the Tracker’s blog. The Senate Appropriations Committee approved the FY2013 Energy and Water Appropriations bill on Thursday, delineating funds for the Department of Energy, the Army Corps of Engineers, and the Department of the Interior’s Bureau of Reclamation. Overall, the legislation enacts $33.36 billion in appropriations for FY2013, with $27.13 billion allocated to the DOE – a five percent increase from the FY2012 enacted value.
The Senate appropriations bill is divided into defense and non-defense spending. And like the House appropriations proposal, this bill also increases defense program funds at the expense of non-defense programs. Under the bill, the National Nuclear Security Administration receives $11.5 billion in appropriations for securing and modernizing the nation’s nuclear weapons stockpile. This is offset by moderate decreases in key energy innovation offices at the DOE. Specifically, appropriations in the Senate bill for the Office of Energy Efficiency and Renewable Energy are 15 percent lower than the Presidential Request announced two months ago.
Last week, IBM announced that it is bringing on two corporate partners, Asahi Kasei and Central Glass, to collaborate on research for its Battery 500 Project, the goal of which is to develop a lithium-air battery that can power an electric car for 500 miles on a single charge. In comparison, today’s conventional lithium-ion batteries can only take cars roughly 150 miles between plug-ins. Lithium-air batteries, so-named because they use oxygen to drive a chemical reaction, theoretically have a much higher energy density – hence their appeal. The fact that IBM has dedicated time and money to the development of the technology is an indication of its significant potential. Furthermore, the progression of the Battery 500 Project itself is an interesting case study in innovation.
In late 2009, IBM applied for an ARPA-E grant to support its lithium-air battery research, one of 220 battery-related proposals. Ultimately, the agency chose to fund two other lithium-air projects instead, doling out roughly $5 million to the PolyPlus Battery Company and a little more than $1 million to researchers at Missouri University of Science and Technology. IBM chose to continue its work
Last Wednesday (April 18th) I testified at a hearing of the House Technology and Innovation Subcommittee on the spectrum crunch, along with a panel of well-informed people (see webcast here.) When you testify at a Congressional hearing, you prepare some written testimony, you deliver an opening statement, and then the questions start. More than anything, the committee wanted to know if the spectrum crunch is real, and if so, what the consequences will be for innovation and what the government can do to help.
The notion of a capacity crunch in any kind of network scenario is actually a bit subtle. We use networks indirectly, as means to run applications, to get content, and to use services. When network capacity is constrained (which it always is in one way or another) we use the applications that work well, and have little awareness of things we might be doing if capacity were greater. Why would app developers pour resources into developing apps that nobody can use? Developers want to make money and have lots of people using their code, so they simply don’t waste their time on
With the Senate considering postal reform legislation Congress may finally be taking action. The last time this was seriously considered was in the early 2000s when the rise of email, the recession and the Anthrax attacks were a triple whammy hitting USPS revenues. But it could not muster the votes needed. In the succeeding decade the problem has only gotten worse (USPS lost 5.1 $ billion in 2011) and is so bad that Congress may be forced to act. While the Great Recession has played some role, the real cause of USPS’ difficulties is that more and more Americans are switching to email from physical mail delivery. And this trend is only going to increase as more Americans get online and become more comfortable with things like electronic bill payment and electronic delivery of documents (e.g., bills).
When an industry is faced with declining markets and financial losses there are really only three options available to it: raise prices, cut costs, and/or expand revenues.
Raising postal prices significantly is not really an option. The problem with this is that it can quickly accelerate the death spiral. Costs go up so
he House Budget Committee recently passed Paul Ryan’s ‘Pathway to Prosperity’ budget proposal, which aims to dramatically cut discretionary spending as a means of addressing America’s budget deficit. The AAAS R&D Budget and Policy Program crunched the numbers and found that under some simple assumptions and including the impending budget cuts resulting from the 2011 Budget Control Act sequestration, the budget could reduce total R&D investments by up to 12 percent below FY2012 levels. And over the next decade, the budget could cut nondefense R&D by up to 27 percent below the President’s FY2013 request, including a 55 percent cut to programs related to energy. Given these proposed deep cuts, how would clean energy innovation fair?
While the ‘Path to Prosperity’ is more of a budget blueprint and doesn’t specifically say what programs will be cut, we can still provide a top-level understanding of how the intent to reduce these discretionary budget accounts would impact clean energy innovation programs. The proposal suggest total spending targets for national defense; general science, space, and technology; energy; natural resources; agriculture; transportation; health; and veterans benefits and services. This high-level accounting makes predicting the effects of cuts or changes to specific government agencies or programs challenging.
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This week, Greenpeace came out with a report that takes several IT companies – Apple, Amazon, and Microsoft – to task for relying on so-called dirty energy to power their data centers. Even disregarding the fact that the report, How Clean is Your Cloud?, inexplicably puts nuclear power on par with coal power as an unclean energy source, Greenpeace’s analysis ironically misses the forest for the trees. While it is indeed unfortunate that some IT companies and businesses in general may derive their energy from undesirable sources, the underlying issue of real importance is that clean energy is too expensive.
ITIF said as much last year when commenting on the release of a similar Greenpeace study:
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A new report by the Breakthrough Institute and coauthors Mark Muro and Letha Tawney puts in stark terms a looming truth: America’s clean energy policies are at a crossroads. As a result of our policy choices, policy emphasis, and political gridlock, continuing the status quo potentially sets up the clean tech industry for a precipitous decline. But even with a blanket extension of many of the policies currently on the books, the budding clean tech sector faces an uncertain and unsustainable future without significant policy reforms.
The report Beyond Boom & Bust: Putting Clean Tech on a Path to Subsidy Independence takes a critical look at what types of federal investments are being made in clean energy and their future outlook. Their findings are at the same time eye-opening and troubling and raise a number of key areas of discussion for energy and climate advocates and policymakers.
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As the federal debt continues to grow, examples of wasteful government spending rightfully antagonize taxpayers who are fed up with footing the bill for unnecessary expenses. This has been brought to the forefront in recent months because of the GSA’s lavish Las Vegas Conference where over $800,000 was spent on commemorative coins, clowns, and a mind reader. Today, the House Committee on Oversight and Government Reform held a hearing where Members of Congress took turns expressing outrage over GSA’s unchecked spending.
While it appears criminal charges may be filed in this case, the real question now is how do we prevent this from occurring next time? While bad judgment and negligence certainly played a role in some of this, at least part of the problem is that there is still a lack of transparency and accountability in government spending. Even at the hearing today, Members of Congress were unable to get facts about recent spending at conferences held in Palm Springs and Napa Valley.
As I watched the hearing today, I couldn’t help but wonder, why not make more of this data public by default?
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U.S. Navy Secretary Ray Mabus has been strongly criticized for authorizing investments in biofuels, with as much as $32.2 million spent last year on research, development, and deployment in 2011, according to the Energy Innovation Tracker. Opponents are largely missing the point: investments in advanced biofuels increase the Navy’s capabilities and could potentially reduce war fighting costs.
In particular, much derision has been directed at the $12 million procurement of 450,000 gallons of algae (roughly $26.67/gallon) and used cooking oil late last year for use in an advanced biofuel blend. After the algae and cooking oil is mixed with conventional petroleum fuel, the resulting blend will be utilized in an upcoming military exercise at a cost of around $15 per gallon. Critics say that makes it significantly more expensive than regular fuel, which typically costs a few dollars per gallon. As ITIF’s Lean, Mean, and Clean report on energy innovation at the Department of Defense describes, however, the “fully burdened cost of fuel” – accounting for transportation, delivery, security, and infrastructure and hardware maintenance – is as much as ten times higher than its purchase price. Nevertheless, while the cost of the advanced biofuel blend might raise concerns in times of budget austerity, the critique largely misses that investing in advanced biofuels better equips the Navy and increases capabilities, always its top priority.
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No wonder we lost over 3 million manufacturing jobs in the last decade due to loss of U.S. competitiveness, and created no net new jobs in the economy because of it. We lacked any semblance of either concern for manufacturing or a national strategy. Now I know why we lacked a strategy. Anytime a President proposes one, he/she gets nailed by all too clever reporters/bloggers/pundits for being out of touch and in the pocket of special interests!
Latest example is a blog by liberal blogger Matt Yglesias at Slate that didn’t just say President Obama’s focus on manufacturing was ill-advised, it was a “foolish” “obsession”. Maybe it’s Matt that has the obsession…
He said the following: “it should be obvious that the path forward for America is to focus on our strengths in information technology and media, and not compete with the Chinese for manufacturing supremacy.” So, given that the IT in ITIF stands for “Information Technology” it should be pretty clear that there is virtually no organization in DC or the nation more committed to IT innovation. However, we also don’t have on ideological blinders. We understand that IT