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Restoring American Energy Innovation Leadership: Report Card, Challenges, and Opportunities

Monday, February 23, 2015

Energy issues permeate the opportunities and risks facing all nations. The United States demonstrates this duality better than most. After a long period of energy scarcity, and despite continuing excessive reliance on oil imports and exposure to price volatility, the United States has emerged into a new dawn of relative energy abundance and strength. Yet the country has much more to do, both at home and abroad, to sustain its international competitiveness, reinforce its economic security and resiliency, and protect the environment.

In the face of this dual prospect of U.S. abundance and profound challenges, public investments in energy RD&D are crucial. The provision of safe, clean, affordable, and sustainable energy is, by virtually any standard, one of the foremost tests the United States faces—and the current innovation investment and delivery mechanisms are simply not up to the task.

The United States has a historically unmatched record—as the American Energy Innovation Council’s (AEIC) recent case studies show—of successful energy RD&D. America’s national laboratories, which have no peer in the world, have birthed hundreds of technologies that today dominate the global energy market. U.S. RD&D investments have created the world’s best natural gas turbines, the most sophisticated oil-drilling equipment, the world’s most efficient solar cells, advanced glass and lighting, and much more. The costs of this RD&D are tiny compared with the benefits. But today’s investments are simply too small: they will not offer an expanded range of economic, security, and environmental options in the future.


This report is AEIC’s assessment of the changes that have taken place since our original study in 2010. We find that policymakers have a mixed record of progress on our original recommendations. The Department of Energy (DOE) is a better functioning machine now than five years ago, but the scale of energy RD&D is still just one-third of what is necessary for the United States to compete effectively in global energy markets, to diversify away from foreign oil, and to mitigate environmental harms from energy production. The surging growth of both new fossil and new renewable-energy production in the United States, itself stemming from past federal energy innovation investments, has both intensified the need for new energy RD&D support and established a position of strength to undertake it.

We urge Congress to increase federal appropriations for energy RD&D across all low-carbon energy sources, and we support increasing authorizations for DOE energy innovation programs, such as through reauthorization of America COMPETES legislation. We also urge support for large-scale demonstration projects and limited downstream innovation investments, such as through a Clean Energy Deployment Agency (CEDA) or other investment authority, and/or through appropriately targeted tax provisions.

The American Energy Innovation Council (AEIC) is a group of corporate leaders who came together in 2010 as a result of a common concern over America’s insufficient commitment to energy innovation. We speak as executives with broad-based success in innovation, who, in the course of our careers, have been called upon to overcome obstacles, seize opportunities, and make difficult decisions, all in the pursuit of building great American companies. We seek to share that experience as it relates to meeting the clean energy challenge.

AEIC is a project of the Bipartisan Policy Center.


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