You Get What You Pay For: The Decline of US Energy Innovation
Posted September 11, 2008
Today's Washington Post has a great op-ed written by Susan Hockfield about the urgent need for federal investment in energy research and development. Hockfield asserts that the best way out of our energy and economic crises is by shifting to clean, affordable, low-carbon energy production. But the only way to arrive at that transformative technology, she writes, is through a national commitment to research.
You Can't Fund Innovation on Less Than 1 Percent of Revenue
As the president of MIT, Hockfield knows a good deal about the critical link between government support and technological innovation. But she writes:
Federal funding for energy research has dwindled to irrelevance. In 1980, 10 percent of federal research dollars went to energy. Today, the share is 2 percent. Research investment by U.S. energy companies has mirrored this drop. In 2004, it stood at $1.2 billion in today's dollars...insufficient for any industry that depends on innovation. Pharmaceutical companies invest 18 percent of revenue in R&D. Semiconductor firms invest 16 percent. Energy companies invest less than one-quarter of 1 percent.
You can't ignite a technological revolution with money like that. Nor can America keep its place as the world's leading innovator.
This country has let its guard down. We have been resting on our laurels of past excellence in engineering advances in the energy sector.
GE: Using the Same Old Dirty Coal Tech 25 Years Later
What does this mean on the ground? Here is an example from just one company.
During that past 25 years, spending on medical research sky rocketed nearly 300 percent. As a result of these investments in the health care field, GE has created 7 generations of innovation in its medical equipment--things like MRIs and CT scans.
Over that same 25 years, GE is still selling the same basic coal-fired power plants they were making a quarter-century ago.
The one exception is in its clean power area: thanks to a growing market in Europe, GE is now in its third generation wind turbine. But without consistent government incentives--like the renewable energy production tax credit that Congress repeatedly fails to extend--GE hasn't made the research investments that would make its turbines keep pace with the leaders in the field, none of which are American-owned companies.
Congress Can Make This Better This Right Now
This week, Congress is once again caught up in a debate about whether in the year 2025 America will put a little bit more oil onto the global warming from the Outer Continental Shelf.
Instead, our representatives should invest in making America the leading energy innovator of the 21st century. If they don't, China will be happy to take our place.
At the very least, Congress must reauthorize the renewable energy tax credit. That would give the GE wind program and the gifted minds at MIT a boost we could all benefit from.
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