Who Will Spur the Next Energy Revolution? Not Private Industry
Some say the government can no longer afford to invest in energy research, but we say it can’t afford not to
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.
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.
