Energy

Semisubmersible_oil_drilling_rig

Adding Energy Innovation to the FAIR Act

In March Senators Lisa Murkowski (R-AK) and Mary Landrieu (D-LA) introduced S. 1273, the Fixing America’s Inequities with Revenues (FAIR) Act of 2013.The bill received attention again last week, when it was reexamined during a Senate Energy and Natural Resources Committee hearing. The FAIR Act, recommends allocating a set share of 27.5 percent of total federal offshore drilling revenues to coastal states with productive drilling leases up to 200 nautical miles off their coastlines.Under the FAIR Act, states that set up funds for alternative and renewable energy, energy efficiency, or conservation would be eligible to receive an additional 10 percent of revenues, which offers states an opportunity to strengthen investments in innovation.

Unfortunately, the bill as presented is weak – it does not include any measures to directly support clean energy innovation with drilling revenue. ITIF argued in its recent report, Drilling for Clean Energy Innovation, that raising revenue from fossil fuel drilling is a direct and bipartisan way to support clean energy innovation and mitigate climate change. While the FAIR Act provides a unique incentive for states to invest in energy programs, there is little guarantee that … Read the rest

Photo Credit: Jim Hatter (2009), Wikimedia Commons

Adding Energy Innovation to the FAIR Act

In March Senators Lisa Murkowski (R-AK) and Mary Landrieu (D-LA) introduced S. 1273, the Fixing America’s Inequities with Revenues (FAIR) Act of 2013.The bill received attention again last week, when it was reexamined during a Senate Energy and Natural Resources Committee hearing. The FAIR Act, recommends allocating a set share of 27.5 percent of total federal offshore drilling revenues to coastal states with productive drilling leases up to 200 nautical miles off their coastlines.Under the FAIR Act, states that set up funds for alternative and renewable energy, energy efficiency, or conservation would be eligible to receive an additional 10 percent of revenues, which offers states an opportunity to strengthen investments in innovation.

Unfortunately, the bill as presented is weak – it does not include any measures to directly support clean energy innovation with drilling revenue. ITIF argued in its recent report, Drilling for Clean Energy Innovation, that raising revenue from fossil fuel drilling is a direct and bipartisan way to support clean energy innovation and mitigate climate change. While the FAIR Act provides a unique incentive for states to invest in energy programs, there is little guarantee that … Read the rest

Photo of a solar panel

Is There a Global Anti-Dumping Solution?

Free trade is only successful if all sides are operating on a relatively level, market-based playing field. Unfortunately, in the last few years many nations, particularly developing ones, have dramatically ramped up their mercantilist policies designed to unfairly gain advantages in global trade. The use of these mercantilist policies hurts not only the aggrieved nations, but also, in certain cases, the aggressor. One tool in the mercantilist tool box is “dumping”: the practice of selling exports below the cost of production, often by relying on steep government subsidies. However, to date the system of addressing dumping claims has not been as effective as it should be.  All too often by the time cases are brought to and adjudicated by the World Trade Organization (WTO) the damage has been done and many domestic firms put out of business.

We see this with the current conflict between the European Union (EU) and the United States with China over unfair Chinese trade policies in the solar industry.  The chief issue for U.S. and EU policymakers concerns China’s use of mercantilist practices, especially selling below cost through large government subsidies, to promote Chinese solar … Read the rest

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European Carbon Market: Good Branding, Poor Substance

By Roger Pielke Jr, a Professor of Environmental Studies at the University of Colorado. Originally published at the Lowy Institute for International Policy Interpreter Blog

Last week, in a surprise to many, the European parliament defeated a proposal to postpone the auctioning of emissions permits, a move that would have propped up prices in the bloc’s carbon market, known as the EU Emissions Trading Scheme or ETS. The market reaction was quick and brutal, with the price of carbon allowances falling by more than 30%. The political reaction was similar — the Wall Street Journal wrote that the vote was the ‘equivalent of the pope renouncing celibacy‘.

Such proclamations are not limited to those opposed to action on climate. In London, a carbon industry insider explained that ‘We have reached the stage where the EU ETS has ceased to be an effective environmental policy.’ However, the fact that the ETS has fallen short of expectations has much more to do with unrealistic expectations than it does with a surprising decision by the European parliament. After all, the price of EU emissions allowances was €4.50 before the

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Budget jar

President Obama’s Budget Promotes Innovation but More Work Needs to be Done

Innovation is one of America’s most prized assets. If our country is going to successfully compete on the global stage over the course of the next several decades, we must develop the new technologies, businesses and industries that will allow us to keep pace. President Obama’s just-released budget for 2014 contains several key components that further this goal.

ITIF applauds the President’s $1 billion request to create a series of manufacturing innovation institutes that will help propel advanced manufacturing and rejuvenate a sector of our economy that has been hit especially hard over the past decade. The National Network for Manufacturing Innovation will create 15 advanced manufacturing centers across the country that will spur research, development and deployment of next generation technologies, products and processes. As ITIF has shown, improving manufacturing innovation is central to enhancing American competitiveness and furthering economic development and business creation.

On energy innovation, the President’s budget request continues to push for greater public investment in the development of new clean energy technologies. The budget proposes boosting clean energy research to nearly $5 billion, a 15 percent increase compared to the FY2013 Continuing Resolution (CR) … Read the rest

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Ernest Moniz’ Confirmation Hearing Underscores Importance of Innovation

MIT physics professor Dr. Ernest Moniz has yet to receive Senate confirmation to serve as the nation’s next Energy Secretary, let alone begin his tenure. This hasn’t stopped speculation about what a Moniz-led Department of Energy (DOE) might look like. National Journal quotes one Brookings Institution scholar as saying “I think it will be a very different agency than it was in the first term. Ernie knows climate change, but also unconventional oil and gas and coal and nuclear. He will push the president towards a more balanced policy.” But if Dr. Moniz’ comments during his confirmation hearing yesterday are any indication of what would come from a department under his leadership, clean energy innovation has a good chance of remaining a top priority for the DOE.

Although the hearing covered a host of topics, ranging from cybersecurity to nuclear waste cleanup, the importance of public investment in research and development emerged as a topic of discussion at several points. Moniz’ opening statement actually started with a strong defense of a continued DOE role in research: “More than a hundred Nobel Prizes have resulted from DOE-associated research. DOE operates an … Read the rest

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Fear Not, Australia Cabinet Merger is Actually Better For Climate Change Mitigation

Last week, the Australian government announced the merger of two cabinet-level departments, the Department of Climate Change and Energy Efficiency and the Department of Industry, Innovation, Science, Research and Tertiary Education. Unfortunately, moving the stand-alone department on climate change has raised concerns that Australia is taking the climate change challenge less seriously. But the merger is actually a welcome sign of growing international recognition that innovation policy and climate change mitigation are inescapably linked and it should further mitigation efforts, not hinder them.

On the one hand, Australian Prime Minister Julia Gillard describes the creation of the new Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education as “inevitable, natural, logical.” On the other hand, the leader of the Australian Greens, an opposition party, criticizes the move as a “retreat on addressing global warming.” But the Gillard government has already demonstrated a firm commitment to combating climate change with the recent creation of entities like the Climate Commission, an independent source of information about the science of climate change, and the Climate Change Authority, which provides expert advice to the Australian government on climate change mitigation … Read the rest

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Talking Energy Innovation with ARPA-E’s Cheryl Martin, Part 3: Linking States to Federal Energy Research

I recently sat down with Dr. Cheryl Martin, the Deputy Director of ARPA-E, the federal government’s premier program for investing in high-risk, high-reward energy research and development. The interview covered a lot of ground and touched on different aspects of America’s energy innovation ecosystem, so it’s being published as a multi-part series, lightly edited, and broken up into cohesive topics.

In part 1 of the interview, Dr. Martin took a deep-dive into the lessons ARPA-E has learned in its few short years of existence. In part 2, we covered ARPA-E’s efforts to link research and emerging technologies to the marketplace. In particular, Dr. Martin discussed the independent path ARPA-E is traveling by building relationships with potential end-users of emerging energy technologies, like companies, the Department of Defense, and utilities such as Duke Energy.

But one potential partner often not discussed at length in national energy policy discussions is states. States are in many ways more active in the clean energy space than the federal government, in particular on technology deployment policies. Over 20 states have created clean energy trust funds supported by dedicated revenue streams like public benefit charges. … Read the rest

arpa-e-bloomberg

Talking Energy Innovation with ARPA-E’s Cheryl Martin, Part 2: Linking Research to Market

I recently sat down with Dr. Cheryl Martin, the Deputy Director of ARPA-E, the federal government’s premier program for investing in high-risk, high-reward energy research and development. The interview covered a lot of ground and touched on different aspects of America’s energy innovation ecosystem, so it’s being published as a multi-part series, lightly edited, and broken up into cohesive topics. In part 1 of the interview, Dr. Martin took a deep-dive into the lessons ARPA-E has learned in its few short years of existence.

In part 2, we cover a pervasive issue in innovation policy: linking research and emerging technologies to market. In particular, a major concern of ARPA-E is that doesn’t have a dedicated end-user that’s going to procure emerging technologies, like DARPA has at the Department of Defense (DOD). DARPA is ARPA-E’s kindred spirit and many opine that until it gains a large-scale early adopter, its impact won’t reach that of its defense brethren because it won’t be able to bridge the technology “valleys-of-death” that plague many new innovations from reaching commercial scale.

Of course, ARPA-E’s agency home — the Department of Energy — doesn’t procure energy technologies … Read the rest

Congress Passes Full-Year FY2013 Continuing Resolution

This year’s budget process has been complicated by a number of factors: confusion surrounding the sequestration cuts, the absence of the President’s FY2014 budget proposal, an expiring Continuing Resolution (CR), and Congress reviewing budget proposals for FY2014 and appropriations bills for FY2013 at the same time. While the FY2014 budget is yet to be decided, last week the House approved the Senate’s version of the Full-Year Consolidated and Further Continuing Resolution Act of 2013, which funds the federal government for the remainder of the 2013 fiscal year. Since the current Continuing Resolution is set to expire on March 27, the bill, which now heads to President Obama’s desk to be signed into public law, avoids a government shutdown by a matter of days.

As shown in the figure, the new CR is not very different from the old CR in terms of investments in energy innovation. The previous CR was based on FY2012 funding levels, and the new CR lowers investments in energy R&D by less than one percent from FY2012 levels.

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The table below shows the recent appropriations legislative history in relationship to FY2012 funding levels. The new … Read the rest