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House Passes FY 2011 DOE Funding Bill With Amendments

Richard M. Jones
Number 94 - July 25, 2011  |  Search FYI  |   FYI Archives  |   Subscribe to FYI

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By a one vote margin, the House of Representatives agreed to increase ARPA-E funding by $79.6 million over the original committee version of the FY 2012 Energy and Water Development Appropriations Bill.  Under this amendment offered by Rep. Adam Schiff (D-CA), ARPA-E funding would be maintained at its current level.

Schiff’s amendment was one of eighteen amendments considered by the House of direct interest to the physics community.  Other amendments would have increased or eliminated ARPA-E funding, reduced spending on DOE’s nuclear energy and weapons programs, reduced or increased funding for the Office of Science, and increased funding for the review of the Yucca Mountain nuclear waste repository.  This FYI will highlight Schiff’s and other amendments related to ARPA-E.  A future FYI will review amendments related to the Office of Science.

Schiff’s amendment was one of several the House considered on ARPA-E.  An amendment offered by Rep. John Garamendi (D-CA) would have reduced the FY 2012 budget for fossil fuels by $450 million and increased ARPA-E by the same amount.  This amendment failed by a vote of 145-276.

Schiff’s amendment, also offered by Rep. Charles Bass (R-NH) and Rep. Marcia Fudge (D-OH), would increase ARPA-E funding by $79,640,000, offsetting it by a reduction of the same amount for DOE’s administration account.  In describing the amendment, Schiff told the House:

“[M]y amendment as offered by my colleagues, Representative Bass and Representative Fudge, would simply restore ARPA-E funding to the fiscal year 2011 level of $179.6 million.

“ARPA-E was created in 2009 to bring the kind of innovative thinking that is well known at DARPA, the Defense Advanced Research Projects Agency, to the energy sector. That includes a focus on high-risk, high-reward R&D and a quick-moving culture made up of experts who stay for just a few years to ensure that new ideas are continually being brought forward. Unlike some government agencies, its philosophy, much like a tech start-up, is to hire the best technical staff and then hire the managers and leadership that can get the best out of them.

“This reinvention of the way that government does business is something that we should be encouraging. A leaner approach adopted from the private sector, with a more agile leadership and the mandate to cut underperforming research avenues, is exactly what the Department of Energy needs. The American Energy Innovation Council, made up of CEOs and chairmen of some of America's biggest companies, including Bill Gates, Norm Augustine and Jeff Immelt, have proposed spending $1 billion a year on ARPA-E, seeing it as a vital part of our energy future. This bill provides just $100 million, so they endorsed a version of this amendment in the Appropriations Committee.
“I recognize that we have a serious deficit problem as a member of the Blue Dog Coalition, and we need to deal with it. But as we make the difficult choices to do that, I don't believe that as we emerge from a recession that we should cut the innovative research that makes America great and has fueled our economic growth for generations.

“Energy is not just an economic issue, of course. It is also a national security issue. Some of our ARPA-E's research may help us cut down on fuel convoys in Afghanistan, and every bit of energy independence protects us from even higher energy prices driven by either instability in the Middle East or skyrocketing demand from China.

“More than 50 universities, venture capital firms and professional societies - the Association of American Universities and the Association of Public and Land-grant Universities - have signed a letter in support of increasing ARPA-E funding. They and I hope that we will provide the funds that ARPA-E needs to continue to do the research that will change our world, not today, but tomorrow and for decades to come.

“This amendment offsets the increase with a cut to the departmental administration account. As many people have noted, the Department of Energy has a serious management problem, and perhaps cutting this account will send a message that a new approach is needed.

“But this invests in our future. Energy is a national security issue, it's an economic imperative, it's a health issue, and it's an environmental issue; and to invest in this kind of cutting-edge research in a reinvention-of-government kind of an agency is exactly the direction we should go. It's a proven approach that has been proven in the Defense Department with DARPA. It can work here in Energy. It's off to a very promising start, developing new battery technologies where we can lead the development of new batteries for electric vehicles for another generation.

“I was very moved by a speech from a CEO of Google about a year ago, and he talked about how the revolution in energy that is just beginning will dwarf the revolution we have just come through in telecommunications because energy is a far bigger sector of our economy. We want to lead that energy revolution. If we do, the benefits to our economic development will be enormous, just as they were in terms of the telecommunications revolution. We don't want to see this leadership go to China, India or any other nation. But if we're serious about it, we need to invest in cutting-edge research. That's exactly what ARPA-E does.   I urge this Congress not to cut back on the Nation's future, but to support the innovative work being done by ARPA-E.”

Rep. Rodney Frelinghuysen (R-NJ) is the chairman of the House Energy and Water Development Appropriations Subcommittee.  Rep. Peter Visclosky (D-IN) is the subcommittee’s Ranking Member.  Both opposed Schiff’s amendment, as they had when Schiff tried to increase ARPA-E’s funding when the bill was considered by the full House Appropriations Committee. Frelinghuysen rose on the House floor to oppose the amendment, saying:  

“My colleague's amendment would add funding to ARPA-E which receives $100 million in our bill. Our bill, which reduces funding to nearly the 2006 levels - may I repeat, 2006 levels - fulfills our top responsibility of reducing government spending while focusing funding on a small set of top priorities.

“In addition to national defense and water infrastructure, our top priorities include research to keep Americans competitive in science, innovation and the development of intellectual property.

“ARPA-E is a relatively new program - today we're discussing only its second regular fiscal year appropriation - that offers industry, university and laboratory grants for high-risk energy innovations. ARPA-E is getting positive early reviews for its strong management and ability to execute on its mission to drive innovation and keep American companies competitive.

“However, I share many of my colleagues' concerns about this program. ARPA-E must not intervene where capital private markets are already acting, and it must not be redundant with other programs at the Department. In fact, ARPA-E is still a young program, and it is prudent to provide a lower level of funding while it is still maturing as a program and demonstrating its ability to address congressional concerns, especially when the bill has so many important priorities competing for scarce funding. This prudent approach is especially warranted when the bill has so many important priorities competing.

“While I support the goal of this new program, I cannot support any additional funding at this time. Further, this amendment makes an unrealistic cut to the Department's salaries and expenses. We cannot cut departmental oversight by 35 percent and expect the efficient use of taxpayer dollars and more oversight and more management responsibilities. For these reasons and many more, I must oppose the gentleman's amendment.”

Next to speak was Rep. Bass, who spoke in support of the amendment:

“A minute or two ago, I was in the [House] Cloakroom and I drew up the Web site for ARPA-E, and it says at the top: ‘Disruptive and innovative approaches to technology.’' What a wonderful thought, that a government agency can be disruptive and innovative at the same time.

“Billions of dollars have been spent on coal, on oil research, on wind and solar, on biomass and conservation and the FreedomCAR. I got involved in the alternative energy business way back in the late seventies when I was a staffer when ERDA [Energy Research and Development Administration] was created. We had a real energy crisis in this Nation as we do today. And yet we're really not anywhere nearly as far along this path as we need to be.

“Now, someone in the Congress, in the Department of Energy, had the good idea of taking all these ideas for research and creating an entity that would be devoted to giving individuals and inventors, people with good ideas, that little spark that they need to turn those ideas into reality.

“The first time they went out for solicitations, they got some 3,500 to 4,000 short, 7-page letters describing ideas. This is a program that leverages a relatively small amount of research dollars into an enormous potential benefit not only to America but to the world.

“But within our boundaries here, we have the objective of lessening our dependence on foreign energy, of cleaning up our environment, of creating jobs and new economies for Americans. Given the fact that we have spent literally billions on the research and development in traditional energy resources, all we are asking to do in this amendment is to get the level up to last year, $71 million over the suggested appropriation of $100 million; $71 million. All that to support an agency that, using their own words, provides a fresh look, a flexible, efficient way to find new ideas to solve very serious problems in America.

“I hope that the Congress will support Mr. Schiff's amendment to add this $71 million to keep this program strong, active, and moving forward because I think it has the potential to do more than any other research program in alternative energy can do today. I urge support of this amendment.”

Raising many of the same points he made when the House Appropriations Committee considered this bill, Rep. Visclosky outlined his opposition to the amendment:

“I rise in opposition to the amendment. I have spoken on a number of occasions this evening about the need to invest in research. In this instance, there is a school of thought that I would not argue, that ARPA-E has shown some promise as a new organizational model at the Department of Energy. But as I have stated, debating this point in the past, I am troubled that the vigor at the Department that has led to ARPA and this new idea, singular, has largely been absent when it comes to addressing the systemic management and communication problems in other existing applied programs.

“The Department had a great idea that I support in creating Energy Frontier Research Centers. That began in 2009, and we now have 46 Energy Frontier Research Centers doing good work. We now have Energy Innovation Hubs. We have a hub for energy-efficient building systems. We have a hub for fuels; a sunlight hub. We have a hub for modeling and simulation. There is a request approved in this bill for a hub for batteries and storage. A hub for critical materials.    The Department of Energy in 2007 had an idea that we should have a Bioenergy Research Center system, and we now have three. We have the Joint Bioenergy Institute in Berkeley, California. We have the Great Lakes Bioenergy Research Center in Madison, Wisconsin. We have the Bioenergy Science Center in Oak Ridge, Tennessee. In 1997, the Department of Energy had an idea. We should have a Joint Genome Institute. It was established, and now we have one in Walnut Creek, California.  We have what has been described to me as the gems of the intellectual power of the United States of America in the various laboratories that I have not even enumerated in my remarks.

“Again, given the allocation we have had, there have been cuts to the underlying accounts in science and EERE [Energy Efficiency and Renewable Energy] that provide funding for many of these research centers. I think before we proceed along the lines established in this amendment, we need to make sure that the Department understands what their allocation of resources are for what they have and what they historically have had to make sure that there is good communication, and to make sure that the promise of ARPA is met as we proceed down this road before again we start making additional significant investments.   So I do understand and appreciate what the gentleman wants to do here. I do support this research to create this knowledge, but it is time to ensure that the Department is managing properly and having proper communication between all of these other centers first. For that reason, I object to the gentleman's amendment.”

A roll call vote was demanded.  The House passed Schiff’s amendment by 1 vote: 214 yes votes to 213 no votes.  There were 180 Democrats and 34 Republicans voting for the amendment, and 8 Democrats and 205 Republicans voting against it.

Later during the House’s consideration of the bill, Rep. Jeff Flake (R-AZ) offered an amendment to prohibit spending on ARPA-E.  Flake stated:

“This amendment would simply prohibit funds from going to the Advanced Research Projects Agency-Energy, or ARPA-E. There is ARPA-Defense, there is ARPA other stuff, there is ARPA-E. This is what we are trying to do is prohibit funding from going to ARPA-E, or energy.

“ARPA-E is currently set to receive about $100 million in this appropriation bill. The most compelling argument given to defund ARPA-E is found on its own Web site, which states that it was established ‘to focus on creative, out-of-the-box transformational energy research that industry by itself cannot or will not support due to its high risk, but where success would provide dramatic benefits.’  It is this kind of, I guess, out-of-the-box thinking that has gotten us into this deficit that we're running, about $1.6 trillion.

“We are broke. We are borrowing 41 cents on every dollar that we spend, yet still we find within our budget reason to find $100 million to fund energy research in private companies that others won't fund because it's too risky.

“Now, we're not talking about products for defense for which there is no commercial application; we're talking about private sector research that could reap a windfall for some private company, and has in a number of other areas. But yet we believe that it's prudent to borrow - because we're borrowing everything here - borrow money from the taxpayer to pick and choose favored companies to receive this research money.  It's not right. We ought to defund it.”

Rising to oppose the amendment was Chairman Frelinghuysen:

“My colleague's amendment would eliminate funding for ARPA-E. The committee's top responsibility, of course, is to reduce government spending, and I appreciate my colleague's amendment and perhaps some of his other amendments for that reason. To that end, our bill reduces spending for energy and water development to near the 2006 level, $100 billion below fiscal year 2011, and a full $5.9 billion below the request.

“I certainly share many of my colleague's concerns about this program. The committee has taken a very close look at it. Right now, ARPA-E must not intervene where private capital markets are already acting, and it must not be redundant with other programs of the Department of Energy.  I oppose the gentleman's amendment.

Ranking Member Visclosky also opposed Flake’s amendment:

“We just had a vote earlier in the Chamber adding $79 million to this program. But setting that particular vote as I have mentioned several times, while I have great trepidation about people at the Department of Energy talking to each other and the Department not having the same vigor, if you would, that they have for ARPA-E, instilling that in other research centers, it does appear that this is a successful program in its infancy. We certainly ought to make sure that it has a chance to show that it can be successful over a limited number of years -- they are talking about 3. My emphasis with them is to distill that same effort across the Department of Energy.  So I would join my chairman in opposing the gentleman's amendment.

Also opposing Flake’s amendment was Rep. Norm Dicks (D-WA), Ranking Minority Members of the full House Appropriations Committee.  Said Dicks:

“I rise in opposition to this amendment, too. The bill would provide $100 million for ARPA-E, which is already $80 million less than FY 2011 funding - and of course we have to take into account the amendment that was just passed - and $450 million below the President's budget request. ARPA-E is a promising new program that can drive innovation to support our scientific competitiveness. As I stated previously in my opening statement, ARPA-E has shown potential as a new organizational model. And I am disappointed that the same vigor that led to its creation has been largely absent when it comes to addressing the systemic and organizational problems in other existing applied programs, which was an element of the justification used for ARPA-E. ARPA-E is modeled on DARPA. And as the ranking member of the Defense Appropriations Subcommittee, DARPA has been one of the great leaders of innovation in the national security area. So again, I'm sorry to say it, but I think we have to defeat the Flake amendment.”

Flake had the final word:

 “But I would just say again here, we're not talking about things in national security or in defense for which there is no commercial application, for which companies that invest in this kind of research would not reap a windfall, the reason for which the profit motive incentivizes companies to invest in these things. Why in the world does government have to be the investor of last resort in what are, quote, transformational energy research for which the industry by itself cannot or will not support due to its high risk? I mean, if it's that high risk, believe me, we shouldn't be taking it.

“If venture capital out there won't do it, we shouldn't be doing it either with money that we're borrowing from venture capitalists and others who have a little better idea than we do. When we go out and support corn ethanol for 30 years, for crying out loud, or some of these other things and we keep doing it and saying, Yeah, it's going to come around one of these days and this is just a promising new area of research, come on. We're $14 trillion in debt. We have negotiations going on right now over at the White House or somewhere else trying to figure a way to raise the debt ceiling to spend more.  Isn't it time that we review programs like this, where we are trying to replace what is not happening in the private sector or trying to outguess the private sector?

“And I just tell you, if we can't cut here, I don't know where we're going to cut, I really don't. The gentleman made the point that we are down to 2006 levels. Great. We ought to go further than that. I mean, 2006, we act as if that was a Great Depression year, ‘Grapes of Wrath’ music playing or something. It wasn't exactly that. We have seen ramping up year after year after year in some of these programs. We are spending more than we ever have.  So I would urge adoption of the amendment.”

A roll call vote was taken, and Flake’s amendment was defeated by a vote of 81to 341.  No Democrat voted for this amendment.

Richard M. Jones
Government Relations Division
American Institute of Physics