Trump’s plan to cut basic energy research finds an unlikely opponent: oil executives

Source: By Steven Mufson, Washington Post • Posted: Friday, June 9, 2017

A group of business leaders has sent a letter to the top Democrats and Republicans on the Appropriations committees urging them to maintain basic research funding, especially in energy, that President Trump has proposed to slash or eliminate.

The letter signed by 14 senior figures from the business world — including trade group leaders and current or former executives in technology, finance, utilities, oil exploration, and military and civilian aerospace — said Congress should “invest in America’s economic and energy future by funding vital programs in energy research and development at the Department of Energy.”

Trump has proposed massive cuts in those areas, including a 36.5 percent reduction in nuclear research, 58 percent in fossil fuel technology, and a 35 percent overall cut in science and energy innovation. Trump has also proposed the elimination of the $306 million-a-year Advanced Research Projects Agency – Energy.

“Programs like ARPA-E provide a blueprint for smart federal investments in high risk, high reward technologies that boost our competitiveness by keeping America at the forefront of global energy technology research,” the business leaders countered in their letter.

The letter was organized by the Bipartisan Policy Center and the American Energy Innovation Council. It is likely just the opening salvo in what promises to be a tough battle for the administration. ARPA-E and other research projects scattered around the country have considerable support in Congress. Energy budget hearings in House are expected to begin next week and in the Senate on June 21.

The Trump administration, however, has said that research and development can be done by the private sector without federal assistance.

“The whole ARPA-E program is exactly right,” said Chad Holliday, a former chief executive at DuPont and now chairman of Shell. “Funding early-stage things that are not getting funded somewhere else.”

Holliday stressed “the importance of research, particularly about energy with the energy transition around the world.” He said that “companies alone will not be able to do this in a robust enough way. Research and partnering with the private sector is so important, and it is a small amount of money in the grand scheme of things.”

Norman Augustine, a former chief executive of Lockheed Martin, said that energy research was linked to climate change and that there was “a huge time issue.” He also said that “it’s energy that drives the economy of this nation, and that means jobs. When you undermine research on energy, you undermine jobs and our standard of living.”

Augustine, an aeronautical engineer, recalled giving testimony in which he discussed the difficulty of making heavy airplanes fly. “Never once did we go about it by getting rid of the engine,” he said.

Paul Bledsoe, an energy consultant who helped assemble the business leaders, said that the innovations that have emerged from government programs include improved combustion engines, three dimensional imaging, advanced seismology and horizontal drilling that has helped unlock vast domestic supplies of oil and natural gas.

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Government-funded research has also contributed to improvements in solar energy, a field in which job growth is 18 times the pace of the overall economy.

He noted that a 2016 DOE study found that research and development investments totaling $12 billion between 1976 and 2012 at the Office of Energy Efficiency and Renewable Energy, or EERE, yielded net economic benefits to the United States of $230 billion (in inflation-adjusted dollars) with an annual return on investment of 20 percent.

In 2007, President George W. Bush signed into law the bill authorizing ARPA-E’s creation. In 2009, under President Obama, Congress appropriated $400 million for the agency. Since 2009, ARPA-E has funded more than 400 energy technology projects, including work on a 1 megawatt silicon carbide transistor the size of a fingernail, microbes that use hydrogen and carbon dioxide to make liquid transportation fuel, and a compressed-air energy-storage system.

The letter was sent to chairman of the Senate Appropriations Committee, Thad Cochran (R-Miss.), the committee’s ranking Democrat, Sen. Patrick J. Leahy (Vt.), the chairman of the House Appropriations Committee, Rodney Frelinghuysen (R-N.J.) and the committee’s ranking Democrat, Rep. Nita M. Lowey (N.Y.)

Besides Holliday and Augustine, the letter’s signatories were: Christopher M. Crane, chief executive of Exelon; Bruce Culpepper, president of Shell Oil in the United States; John Doerr, a partner at Kleiner Perkins Caufield & Byers; Thomas J. Donohue, president of the U.S. Chamber of Commerce; Timothy L. Dove, chief executive of Pioneer Natural Resources; Anthony F. Earley Jr., chairman of the board of PG&E; Tom Fanning, chief executive of Southern Co.; Michael Graff, chief executive of American Air Liquide Holdings; David Holt, president of the Consumer Energy Alliance; Maria G. Korsnick, chief executive of the Nuclear Energy Institute; Dave McCurdy, president of the American Gas Association; and Michael Skelly, president of Clean Line Energy, an electricity transmission firm.