Yesterday morning the President’s Council of Advisors on Science and Technology (PCAST) released its “Report to the President on Accelerating the Pace of Change in Energy Technologies Through an Integrated Federal Energy Policy.” This report, requested by President Obama, issues recommendations for the Administration and the Department of Energy on how to “transform the energy system” over the next two decades through “leadership in energy technology innovation.”
Informed by a working group of PCAST members and energy experts, this report makes recommendations that are, in large, both feasible and ambitious. Based on our reading of the report and the summaries presented by co-chairs Maxine Savitz and Ernest J. Moniz at the release event, we particularly applaud PCAST in calling for the coordination of federal energy policies and for its recommendation that the US Federal government spend $16 Billion annually on energy RD&D.
Some of the key recommendations of this report are to:
- Establish an interagency Quadrennial Energy Review (QER) led by the Office of the President (OOP)
- Based on the QER, realign federal energy subsidies and incentives and align DOE processes and organization to meet energy objectives
- Enhance energy technology innovation and technology by exercising the Federal Government’s purchasing power
- Increase annual energy research, development, demonstration, and deployment (RDD&D) funding to about $16B, with $10-16B of that generated through “new revenue streams”
- Direct $12B of the new RD&D money to outside the DOE-national lab sphere and focus on funding DOE competitive programs such as ARPA-e
- Initiate a multidisciplinary social science research program
While we approve of the goals and objectives of this report, we have significant concerns about the feasibility and implementation of both the QER and the RDD&D fund.
The QER is not a new idea. Rather, it is a timescale change. The Section 7321 of US Code (Title 42, 84, VIII, 7321) already legally obligates the President to produce and submit to Congress a biennial National Energy Policy Plan. The comprehensive plan is to be developed with the participation of “consumers, small businesses, and a wide range of other interests, including those of individual citizens who have no financial interest in the energy industry.” The last plan produced was the Bush Administration’s controversial 2001 report, Reliable, Affordable, and Environmentally Sound Energy for America’s Future.
While changing the timescale from two years to four years will decrease the time burden on the DOE and the OOP, it will not fundamentally change the fact that the energy review process will still depend upon annual Congressional appropriations for funding as well as continued OOP compliance. In order to ensure the success of the QER, the relevant legislation must both fund the entire four year process outright and include provisions compelling Congress and of Executive branch to act upon the results and recommendations of the QER.
Raising $16 Billion for energy RDD&D will require finding significant new funds. While the program could and will likely be funded in part through Congressional appropriations, this is neither the preferred nor the most stable long-term funding stream. Rather, the report calls for generating the funds through “new revenue streams”—government speak for taxes. Likely to take the form of new energy taxes on transmission, production, generation, and/or consumption, in the current fiscal and political environment new taxes are going to be an extremely hard sell.
To raise these funds, the government must work to build a base of support for energy RDD&D at the national and local levels and must sell the long-term advantages of innovative energy technologies to all energy and energy policy stakeholders. Support will need to come from voters, local governments, industry and business, regulatory authorities, public utilities, the finance and venture capital sector, academia, and think tanks. Before a new energy technology tax can be passed and this critical energy technology development process begun, the OOP and DOE must take the helm and begin this necessary, but difficult dialogue.
Both the full PCAST report and executive summary can be accessed here: http://www.whitehouse.gov/administration/eop/ostp/pcast/docsreports.