- THE FUTURE OF ARPA-E

[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]

THE FUTURE OF ARPA-E

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HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTEENTH CONGRESS

FIRST SESSION

__________

FEBRUARY 26, 2019

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Serial No. 116-2

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Printed for the use of the Committee on Science, Space, and Technology

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Available via the World Wide Web: http://science.house.gov

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U.S. GOVERNMENT PUBLISHING OFFICE
35-232 PDF WASHINGTON : 2019

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COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

HON. EDDIE BERNICE JOHNSON, Texas, Chairwoman
ZOE LOFGREN, California FRANK D. LUCAS, Oklahoma,
DANIEL LIPINSKI, Illinois Ranking Member
SUZANNE BONAMICI, Oregon MO BROOKS, Alabama
AMI BERA, California, BILL POSEY, Florida
Vice Chair RANDY WEBER, Texas
CONOR LAMB, Pennsylvania BRIAN BABIN, Texas
LIZZIE FLETCHER, Texas ANDY BIGGS, Arizona
HALEY STEVENS, Michigan ROGER MARSHALL, Kansas
KENDRA HORN, Oklahoma NEAL DUNN, Florida
MIKIE SHERRILL, New Jersey RALPH NORMAN, South Carolina
BRAD SHERMAN, California MICHAEL CLOUD, Texas
STEVE COHEN, Tennessee TROY BALDERSON, Ohio
JERRY McNERNEY, California PETE OLSON, Texas
ED PERLMUTTER, Colorado ANTHONY GONZALEZ, Ohio
PAUL TONKO, New York MICHAEL WALTZ, Florida
BILL FOSTER, Illinois JIM BAIRD, Indiana
DON BEYER, Virginia VACANCY
CHARLIE CRIST, Florida VACANCY
SEAN CASTEN, Illinois
KATIE HILL, California
BEN McADAMS, Utah
JENNIFER WEXTON, Virginia
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Subcommittee on Energy

HON. CONOR LAMB, Pennsylvania, Chairman
DANIEL LIPINKSI, Illinois RANDY WEBER, Texas, Ranking Member
LIZZIE FLETCHER, Texas ANDY BIGGS, Arizona
HALEY STEVENS, Michigan NEAL DUNN, Florida
KENDRA HORN, Oklahoma RALPH NORMAN, South Carolina
JERRY McNERNEY, California MICHAEL CLOUD, Texas
BILL FOSTER, Illinois
SEAN CASTEN, Illinois

C O N T E N T S

February 26, 2019

Page
Witnesses........................................................ 2

Hearing Charter.................................................. 3

Opening Statements

Statement by Representative Conor Lamb, Chairman, Subcommittee on
Energy, U.S. House of Representatives.......................... 8
Written Statement............................................ 10

Statement by Representative Randy Weber, Ranking Member,
Subcommittee on Energy, U.S. House of Representatives.......... 11
Written Statement............................................ 13

Statement by Representative Eddie Bernice Johnson, Chairwoman,
Committee on Science, Space, and Technology, U.S. House of
Representatives................................................ 15
Written Statement............................................ 16

Statement by Representative Frank Lucas, Ranking Member,
Committee on Science, Space, and Technology, U.S. House of
Representatives................................................ 20
Written Statement............................................ 22

Witnesses:

Dr. Arun Majumdar, Jay Precourt Provostial Chair Professor,
Stanford University, and Faculty Member of the Department of
Mechanical Engineering
Oral Statement............................................... 25
Written Statement............................................ 27

Dr. Ellen D. Williams, Distinguished University Professor,
Department of Physics at the University of Maryland
Oral Statement............................................... 32
Written Statement............................................ 34

Dr. John Wall, Retired Chief Technical Officer, Cummins, Inc.
Oral Statement............................................... 37
Written Statement............................................ 39

Dr. Saul Griffith, Founder and CEO, Otherlab
Oral Statement............................................... 46
Written Statement............................................ 48

Mr. Mark P. Mills, Senior fellow at the Manhattan Institute, and
Faculty Fellow at Northwestern University's McCormick School of
Engineering and Applied Science
Oral Statement............................................... 57
Written Statement............................................ 59

Discussion....................................................... 63

Appendix I: Additional Material for the Record

Report submitted by Dr. John Wall, Retired Chief Technical
Officer of Cummins, Inc........................................ 84

THE FUTURE OF ARPA-E

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TUESDAY, FEBRUARY 26, 2019

House of Representatives,
Subcommittee on Energy,
Committee on Science, Space, and Technology,
Washington, D.C.

The Subcommittee met, pursuant to notice, at 10:04 a.m., in
room 2318 of the Rayburn House Office Building, Hon. Conor Lamb
[Chairman of the Subcommittee] presiding.
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Chairman Lamb. This hearing will come to order. Without
objection, the Chair is authorized to declare a recess at any
time.
Good morning, everybody. Welcome to today's hearing, which
is entitled, ``The Future of ARPA-E.'' I'd like to thank our
panel of expert witnesses for appearing with us today.
In my district, and in many around the country, the topic
of today's hearing, which is energy and energy research, means
cutting-edge science, but it also means jobs that support
entire families. We must make sure that the United States
remains a leader in this industry, and I look forward to
working with Members from both parties to do that.
And in fact, today, we are here to discuss a great
bipartisan success, which is the future of the Advanced
Research Projects Agency-Energy, or ARPA-E. I think it's
helpful for us to look at how this program was started. Almost
15 years ago, a bipartisan group of Members from the House and
Senate were worried that the United States' competitiveness in
science and technology might be falling behind, so they did a
smart thing, which is they commissioned a report from the
National Academies to suggest how the Federal Government could
continue to maintain leadership in these areas. The report was
called, ``Rising Above the Gathering Storm: Energizing and
Employing America for a Brighter Economic Future,'' and it did
show that we were quickly losing our scientific and
technological advantages.
One of the major recommendations was the creation of a new
program within DOE (Department of Energy), which became ARPA-E.
It was modeled on DARPA (Defense Advanced Research Projects
Agency) from the Department of Defense, which has been
essential to revolutionary technologies like GPS (global
positioning system) and the internet. So we created ARPA-E with
that same program in mind. We did something that people may
think we in Washington don't know how to do, which is to
double-down on a government success, but that's what we're
doing and that's what we're trying to do here again today. We
need to encourage innovation and paradigm-shifting discoveries
in all sectors of our economy but especially energy. The United
States has consistently demonstrated throughout its history
that our greatest resource is its people and ability to
innovate and lead, and we view that ARPA-E is a critical
component of spurring that type of innovation.
Congress first authorized this program in 2007, and I've
been told that it was largely due to the hard work of one
person, who we are lucky enough to have in the room today,
which was the Chairman of this very Committee at the time, Bart
Gordon, who is sitting back and to my left. Chairman Gordon,
thank you very much for your efforts and for being with us here
today. Since then, ARPA-E projects have led to 71 new
companies, 109 projects partnered with other government
agencies, and 136 projects that have garnered more than $2.6
billion in private-sector funding. And as we're going to talk
about today, that is more than the government has spent on
ARPA-E in that time.
Among these projects is one that I'm very proud of. It's
located in my district at the historic Westinghouse Corporation
in Cranberry Township. And what this project aims to do is to
innovate in the nuclear power industry by continuing to provide
carbon-free, reliable electricity through a microreactor made
of advanced materials that can be modeled and component samples
can be fabricated and tested with the ultimate goal of reducing
the cost and making these plants more available worldwide. I'm
very pleased with the progress of this project, but I know it's
expensive and difficult and they might not be able to pursue it
without the help of a program like ARPA-E.
So now I look forward to the testimony of our witnesses,
the opening statements of other Members to learn what else we
can do to improve this great program.
[The prepared statement of Chairman Lamb follows:]
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Chairman Lamb. The Chair now recognizes Mr. Weber for an
opening statement.
Mr. Weber. Thank you, Mr. Chairman. Thank you all for all
being here today.
Today, we are going to hear from our panel of experts on
the status of the Department of Energy's Advanced Research
Projects Agency-Energy (ARPA-E) and discuss how Congress can
effectively evaluate and reform this fundamental science
program.
Created in 2007, as noted by the Chairman, DOE's ARPA-E
program was modeled after the Department of Defense's DARPA
program. The agency was intended to provide finite R&D funding
for innovative projects that could have disruptive impact on
critical American economic, environmental, national security,
and energy-sector challenges. Specifically, ARPA-E was tasked
by Congress to reduce reliance on foreign sources of energy and
energy-related emissions, and to improve energy efficiency in
all economic sectors.
ARPA-E was intended to be unique among DOE's applied
research programs. The agency aims to achieve its goals by
funding the highest-risk, highest-reward fundamental science,
the transformative research that industry will not pursue.
But today, it's unclear if ARPA-E remains true to this
inspiring mission. While there are examples of truly
groundbreaking research like the project exploring unique
fusion reactor designs, there are also a large number of
programs that actually overlap with DOE's applied energy
offices. For example, today, ARPA-E has funding announcements
or active programs supporting research in wind energy
technologies, advanced nuclear technology, and energy storage
systems for the electric grid, all areas of research that
receive--already receive funding through other DOE programs.
Industry already has an interest in developing incremental
improvements to today's energy technology. We cannot afford to
spend limited Federal resources on duplicative, late-stage
programs that compete with private-sector investment. Instead,
we should refocus the ARPA-E program on its original purpose,
taking fundamental science discoveries and applying them to our
biggest technology challenges. This approach could provide
solutions across the Department's diverse mission space,
including areas like nuclear waste management and national
security. With the agency's unique expertise, I believe that
this program is capable of supporting a new generation of
scientific breakthroughs. But that won't happen without real
reforms to prevent duplication and refocus ARPA-E on the
greatest technology challenges.
We also can't just assume that big increases in spending
will magically appear in the budget. If ARPA-E's budget is
increased, we will inevitably have to make tough choices and
cut spending elsewhere in the Department.
In preparation for this hearing, I thought about what
breakthrough energy technologies look like, and I was reminded
of how hydraulic fracturing and horizontal drilling
revolutionized the global energy market. Research at our
national labs laid the groundwork, and American industry picked
up and harnessed those discoveries to change the world. We need
to focus agencies like ARPA-E on applying DOE's basic science
discoveries. With this approach, I believe that American
industry can capitalize on that research and revolutionize the
energy industry once again.
I want to thank the Chairman for holding this hearing today
and the witnesses for coming in to provide their testimony, and
I'm looking forward to a productive discussion about ARPA-E's
future today.
Mr. Chairman, I yield back.
[The prepared statement of Mr. Weber follows:]
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Chairman Lamb. Thank you. The Chair now recognizes
Chairwoman Johnson for an opening statement.
Chairwoman Johnson. Thank you very much and good morning,
and good morning to our witnesses.
Thank you, Chairman Lamb, for holding this timely hearing
to review the impressive performance of ARPA-E to date and to
explore new ways that this vital program might accelerate
America's transition to a clean energy future.
About 12 years ago, since this agency was first authorized
by this Committee, and 10 years since it was finally funded
thanks to the American Recovery and Reinvestment Act, ARPA-E
now plays a critical role in maintaining America's economic
competitiveness by advancing high-risk concepts that previously
lacked Federal or private-sector support that could have
significant impacts on the ways we produce and use energy.
Thus far, 71 ARPA-E projects have led to the formation of
new companies, 109 have partnered with other government
agencies for further development, and 136 have attracted over
$2.6 billion in private-sector follow-up funding.
This clear record of accomplishment is why I was proud to
introduce the ARPA-E Reauthorization Act in 2017 in the last
Congress, which had 39 cosponsors including 11 Republicans.
That bill was endorsed by an incredibly broad coalition of
stakeholders, including the U.S. Chamber of Commerce, the
National Association of Manufacturers, the American Council on
Renewable Energy, the American Petroleum Institute, the Nuclear
Energy Institute, the Alliance to Save Energy, the Bipartisan
Policy Center, and the Energy Sciences Coalition, just to name
a few. And I think we can do better this year.
I was also very proud to cosponsor the ARPA-E Act of 2018
introduced by then-Vice Chairman Lucas, and I look forward to
continuing to work with him and my colleagues on both sides of
the aisle to enable this agency to be as effective as it can be
in achieving its mission.
Before I'll--before I close, I'll note that over the last
few years this program has been the subject of several
overwhelmingly positive assessments by widely respected,
bipartisan and nonpartisan institutions like the National
Academies, the American Energy Innovation Council, and most
recently by the Breakthrough Energy. And in Secretary Perry's
own address to ARPA-E Energy Innovation Summit last March, he
said, and I quote, ``ARPA-E is one of the reasons DOE has had
and is having such a profound impact on American lives.'' I
couldn't have said it better myself. So I certainly hope that
in its next budget request, this Administration will reconsider
its previous and fortunately doomed proposals to eliminate
ARPA-E altogether.
I thank you again for holding this hearing, and I look
forward to the dialog with the excellent panel of witnesses and
thank them for being here. I yield back.
[The prepared statement of Chairwoman Johnson follows:]
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Chairman Lamb. Thank you, Chairwoman Johnson.
The Chair now recognizes Ranking Member Lucas for an
opening statement.
Mr. Lucas. Thank you, Chairman Lamb. And I would like to
congratulate you on your new position as Chairman of the Energy
Subcommittee, and thank you for holding this hearing today. And
I also appreciate your acknowledging the former Chairman Gordon
in attendance with us today. I've had the privilege of serving
with five of the previous Chairmen whose portraits are on this
wall, and I look forward to the inevitable day when we have the
first lady portrait hanging, which is now inevitable, too. That
will be a good day.
That said, ARPA-E was created to help the U.S. energy
sector maintain its competitive edge in developing advanced
energy solutions. The program was established to jumpstart
technologies that were too-early stage to attract private-
sector investment but could have a significant impact on the
energy market. In order to accomplish this, ARPA-E was given a
unique management structure, with the flexibility to start and
stop research projects based on performance. Program managers
have expedited hiring and firing authority to make sure that
ARPA-E staff can adequately select and support.
Today, ARPA-E supports fundamental research over a wide
range of cutting-edge energy technology areas, including
bioenergy, battery technology development, and advanced
nuclear. But despite some fascinating areas of research, ARPA-E
is not without controversy. For example, many ARPA-E programs
have significant overlap with programs' goals of DOE's applied
energy research programs. We'll hear testimony today supporting
big increases in spending for ARPA-E. But with $6 billion in
annual spending already devoted to applied research elsewhere
in DOE, ARPA-E, and any increased spending for it, is redundant
if it's not refocused on more innovative research.
Now, that brings us to the second problem. We've heard
concerns over the years that ARPA-E isn't meeting its intended
goal--to fund the kind of technologies that are so pioneering
they would never attract private-sector investment but instead,
providing funding to big companies with access to capital
markets or funding research that's already succeeding in the
private sector.
ARPA-E is a program that can and has had tremendous impact
on the development of new energy technologies, but we must
address these concerns and refocus the agency on funding the
most innovative research. That's why I, too, introduced a bill
to reform ARPA-E in the last Congress, which passed the House
in a--with bipartisan support. This legislation expanded the
mission of ARPA-E to include the full DOE mission and empowered
the agency to promote science- and technology-driven solutions
to DOE's broader goals.
My bill also included important direction to prevent the
duplication of research across DOE and ensure that the limited
taxpayer dollars are spent on the most transformative
technologies, not in competition with the private sector.
I hope that we can work together to include those reforms
in any reauthorization of ARPA-E this Congress.
It is our job to be good stewards of the taxpayers'
resources of course, and with the right mission goals and
commonsense conservative management, I believe ARPA-E's
innovative approach can build on the basic science and early-
stage research at the Department. We can help fast-track new
technologies that will grow our economy, stabilize our
environment, and maintain U.S. leadership in science and
technology around the world.
I want to thank our witnesses for being here today, and I
look forward to a productive discussion this morning.
I yield back, Mr. Chairman.
[The prepared statement of Mr. Lucas follows:]
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Chairman Lamb. If there are Members who wish to submit
additional opening statements, your statements will be added to
the record at this point.
At this time I would like to introduce our witnesses.
First, Dr. Arun Majumdar is the Jay Precourt Provostial Chair
Professor at Stanford University and a faculty member of the
Department of Mechanical Engineering. Dr. Majumdar was the
Founding Director of ARPA-E from 2009 to 2012. During his time
at the Department of Energy, he also served as Undersecretary
for Energy. His current research explores chemical processes
and clean-energy technology, next-generation materials science,
and efforts to improve the efficiency of the electrical grid.
Dr. Ellen D. Williams is a Distinguished University
Professor in the Department of Physics at the University of
Maryland (UMD). Dr. Williams was the Director of ARPA-E from
2014 through the end of the Obama Administration. Prior to
joining DOE, she served as Chief Scientist to BP and founded
the UMD Materials Research Science and Engineering Center. Her
research currently focuses on surface physics and
nanotechnology.
Dr. John Wall, now retired, served as the Chief Technology
Officer for Cummins Inc. from 2000 to 2015 where he oversaw the
company's worldwide commercial engine emissions-reduction
activities. He does not, contrary to popular opinion, play
point guard for the Washington Wizards. Dr. Wall served on the
Committee on Evaluation for the 2017 National Academies' Review
of ARPA-E. He currently serves as a Technical Advisor for DOE's
Joint Bioenergy Institute and as an Advisor for Cyclotron Road,
an energy technology incubator at the Lawrence Berkeley
National Laboratory.
Dr. Saul Griffith is the Founder and CEO of Otherlab, a
privately held research and development lab that develops clean
energy, robotics and automation, and engineered textiles, among
other technology areas. In its 10 years of existence,
Otherlab's been the recipient of multiple ARPA-E awards. Over
the course of his career, Dr. Griffith has founded several
successful companies and named a MacArthur Fellow in 2007.
Mr. Mark Mills is a Senior Fellow at the Manhattan
Institute and a Faculty Fellow at Northwestern University's
McCormick School of Engineering and Applied Science where he
codirects an Institute on Manufacturing Science and Innovation.
He is also a strategic partner with Cottonwood Venture
Partners, an energy tech venture fund, and an Advisory Board
Member of Notre Dame University's Reilly Center for Science,
Technology, and Values.
As our witnesses know, you will each have 5 minutes for
your spoken testimony. Your written testimony will be included
in the record for the hearing. When you have all completed your
spoken testimony, we will begin with questions. Each Member
will have 5 minutes to question the panelists. We will start
with Dr. Arun Majumdar.

TESTIMONY OF DR. ARUN MAJUMDAR,

JAY PRECOURT PROVOSTIAL CHAIR PROFESSOR,

STANFORD UNIVERSITY

Dr. Majumdar. I want to thank--extend my thanks to Mr.
Chairman, the Ranking Member, and all the Members of this
Committee.
Between 2009 and 2012, I had the honor of serving as the
Founding Director of ARPA-E where I recruited the first team
and helped create ARPA-E's DNA that involved multiple elements:
A laser focus on the mission of ARPA-E that Congress laid out
recruiting top talent in science and engineering; using the
special hiring authority that Congress provided; creating a
culture internally of an open debate and discussion to unleash
this talent to fund research on the most profound breakthrough
technologies; creating a model internally of operational
efficiency, active program management, and financial integrity;
and finally, an exemplar of engaging stakeholders via the ARPA-
E Energy Innovation Summit, as well as creating a model of
partnership with Congress.
Because of these elements, due to the remarkable breadth of
new research that ARPA-E funded, it certainly caught the
attention of many thought leaders in the United States. In 2012
at the summit, the Founder, Chairman, and CEO of FedEx, Mr.
Fred Smith, said, quote, ``Pound for pound, dollar for dollar,
activity for activity, it is hard to find a thing the United
States has done that is more effective than ARPA-E.'' Bill
Gates and his colleagues had very similar comments as well.
Given all this, I'm going to address two questions in my
opening remarks. No. 1, what is the key to ARPA-E's success
that needs to be preserved? No. 2, what else can ARPA-E do to
make the United States even more successful and globally
competitive?
As you know, ARPA-E is modeled after DARPA that has an
illustrious 60-year history. Like DARPA, ARPA-E defines the
cutting edge of science and engineering research for
breakthrough technologies that will form the foundation of
entirely new industries that do not exist today and make the
U.S. industries more competitive in the world. But to achieve
this, it is critical to have the most talented people within
ARPA-E at the cutting edge of research in science and
engineering. It takes one to be at the cutting edge to
recognize what is cutting edge, so in many ways ARPA-E is all
about the people.
As the Director, I spend a large fraction of my time
recruiting talent. None of these recruits needed a job. They
joined ARPA-E to serve the Nation and be part of something
special. After 3 to 4 years, they went back to the private
sector or academia with an ARPA-E record as a badge of honor.
During the time of ARPA-E, they conceived some of the most
impactful and research programs that bridge two or three
different fields of science and engineering to create something
completely new that no one in the world had ever imagined.
So my message is the following: It is very important to
preserve the special hiring authority that Congress has
bestowed on ARPA-E to ensure that the leadership in ARPA-E uses
this authority to recruit top talent. It is also important that
ARPA-E maintain its independence within the Department of
Energy and the Director report directly to the Secretary of
Energy.
Finally, one of the best things about the ARPA-E model is
that the program directors stay for 3 to 4 years and then they
are required to leave. This time constraint puts a level of
urgency to make a difference, and this urgency is very
important to create the internal efficiency within ARPA-E. This
needs to be preserved as well.
Now, my second question. What else can ARPA-E do to make
the United States more successful? I have two recommendations.
In the last 10 years, a lot has changed in the global energy
landscape. As was pointed out, there were three game-changers
that have happened: Unconventional oil and gas revolution due
to fracking, electrification of transportation via lithium-ion
batteries, and carbon-free electricity generation from wind and
solar.
While these are necessary, these are certainly not
sufficient to help address the ARPA-E mission. Fossil fuels
still comprise 80 percent of the global energy use. The scale
is simply enormous. Reducing greenhouse gases--gas emissions,
which is part of ARPA-E's mission, is a billion-ton-scale
problem, and to go from a lab-scale concept, proof of concept
that ARPA-E funds to the billion-ton-scale solution is a long
and arduous process.
So the two important recommendations, it is important for
Congress to be patient in its expectations of commercial impact
from ARPA-E-funded research. Expectation of short-term success
will produce increment thinking within ARPA-E, and that will
defeat the whole purpose of ARPA-E, which should be going for
the home runs.
Second, it is also very important to look at the gaps
beyond ARPA-E funding and to see what has worked in the past to
see if you could create private-public partnerships to enable
some of these proof of concepts that has been proven in the
labs and universities and national labs to go eventually make
this journey to the private sector.
Thank you for your time, and I appreciate the opportunity.
[The prepared statement of Dr. Majumdar follows:]
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Chairman Lamb. Dr. Williams.

TESTIMONY OF DR. ELLEN WILLIAMS,

DISTINGUISHED UNIVERSITY PROFESSOR,

UNIVERSITY OF MARYLAND

Dr. Williams. Thank you, Chairman Lamb, Ranking Member
Weber, and other Members of the Committee. I truly appreciate
the opportunity to appear before you today to testify on the
future of ARPA-E. I was the second Director of ARPA-E, and I
benefited from the innovations and the activity that Professor
Majumdar has just described to you.
I would like to say that ARPA-E is an innovation agency,
and one set of words you never hear in ARPA-E is, ``because
that's the way we've always done it before.'' ARPA-E uses
innovation in its thinking, in its development, and in its
planning.
As Director of ARPA-E, I frequently consulted the agency's
founding authorization, which I consider to be just brilliant.
It recognizes the importance of technological innovation in the
world's evolving energy systems and the implications for the
United States of the international competition in advanced
energy technologies. A goal called out in the authorization is
for the U.S. to remain a leader in advanced energy technologies
and, based on our capabilities, we should certainly be able to
do so.
However, even though the United States has been a world
leader in basic research for most of the last century, our
country has been notably less successful in transferring the
benefits of its basic research successes into domestic
manufacturing and the economic benefits that follow. ARPA-E is
tasked to address that problem by translating cutting-edge
discoveries into technical innovations. To do this, ARPA-E has
developed a transformative research management model in which
brilliant innovators, like Saul, are supported and mentored to
advance both the technical performance and the commercial
potential of their innovations. This process is essential for
drawing value from early cutting-edge technologies that the
private sector will not support because they are considered too
risky.
We've heard about ARPA-E's measures of successes, and we've
heard that there have been many recommendations to increase the
level of fundings for ARPA-E. I believe you'll hear some of the
stories of actual technologies and the teams that make them
successful from Dr. Griffith and Professor Majumdar, and I
would also be happy to provide more examples. I would say that
each year ARPA-E has far more opportunities flowing from the
ingenuity of America's scientists, engineers than it has the
ability to support. Many experienced observers such as the
American Innovation Council have called for substantial
increases in the agency's budget. I agree with that assessment,
and I agree that it needs to be addressed in an innovative and
creative fashion, not just more of the same but really
addressing new challenges in new ways.
In creating strategies for growth at ARPA-E, as we thought
about mechanisms for increasing the budget and using the budget
effectively, we looked for opportunities to yield even greater
impacts per dollar for the U.S. economy and identified three
approaches. The first approach is to address the problem that
at present even the most successful ARPA-E projects are still
often judged too high-risk by potential investors. As a result,
they struggle to obtain early investments or may be
undercapitalized compared with their international competitors.
ARPA-E could give such companies a faster start with
expanded programs for innovative scaling and advanced
manufacturing processes suitable for domestic manufacturing.
These would not be incremental improvements. These would be
looking for game-changing improvements in how we do
manufacturing and how we bring technology to commercialization.
The programs would support the most competitive projects to
move from the stage of successful prototype to pilot-scale
demonstrations. The expanded effort would work collaboratively
in terms of drawing funding and increased investment
opportunities in the United States and prevent innovative U.S.
companies from being stranded or frozen out of markets by
international competitors who can move more quickly.
The second approach is to expand investment in the earliest
stage, most innovation, and thus highest-risk technologies.
These represent the pipeline of innovation for the future.
ARPA-E's OPEN program funding opportunity announcements, which
allow proposals at all areas of technologies, are an important
discovery mechanism and have given rise to exciting new
technologies such as slips, incredibly low-friction surfaces,
sky cooling materials that spontaneously cool by sending heat
into outer space, and Foro technology, which uses laser power
for drilling in hard rock.
Finally, ARPA-E can expand its core focus programs to
include more larger-scale technologies and integrate
performance demonstrations and prototype the pilot funding to
optimize handoff to commercial development. The vision of the
future of ARPA-E requires changes, but that's important for--
that's appropriate for an innovation agency, and it's already
enabled by the flexibility built into its authorization. An
expanded budget for ARPA-E will enable more early-stage
cutting-edge technologies to be moved more quickly and more
effectively to handoff for private-sector commercialization in
the United States, boosting U.S. competitiveness and economic
growth.
Thank you again for this opportunity to speak.
[The prepared statement of Dr. Williams follows:]
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Chairman Lamb. Thank you, Dr. Williams. Dr. Wall.

TESTIMONY OF DR. JOHN WALL,

RETIRED CTO, CUMMINS,

MEMBER OF THE COMMITTEE ON EVALUATION FOR

THE 2017 NATIONAL ACADEMIES REVIEW OF ARPA-E

Dr. Wall. Chair Lamb, Ranking Member Weber, Chair Johnson,
and Ranking Member Lucas, and other distinguished Members of
the Subcommittee, thank you for the opportunity to testify
about ARPA-E. My testimony today is guided by my career working
on energy and environmental technologies at Chevron and
Cummins, a Fortune 200 engine and power system manufacturer,
and as a member of the National Academy of Engineering on a
recent National Academies study to assess the first 6 years of
ARPA-E.
I'd like to make three main points today. ARPA-E plays a
vital role in U.S. energy innovation beyond what industry can
do for itself. ARPA-E's unique use of experienced practitioners
as program managers is important for its success, and ARPA-E is
critical for U.S. global competitiveness.
First, ARPA-E plays a unique and vital role in U.S. energy
innovation beyond what energy--what industry can do for itself.
Innovation in the industry happens--in energy happens across a
broad spectrum from novel, unproven hypotheses to integration
into products that are then bought and used by customers.
Innovation only has value if it makes it all the way into use.
Required investments grow through this progression from
thousands to millions to hundreds of millions of dollars. De-
risking of novel concepts is a very important element of this
development process to allow for rational business investment
and product development and productionized manufacturing.
A manufacturing company is not equipped to do all the
research required for breakthrough and disruptive innovation
internally. In fact, they may not even recognize it when it's
happening. But they can embrace it, scale it up, and bring it
to market once it's validated. For example, this year, Cummins
is celebrating its 100th year in the diesel engine business and
also is introducing its first all-electric powertrain. While
Cummins was innovating in the diesel engine space, those
electric powertrain technologies were being developed and
validated independently by innovators with unique skills that
Cummins simply did not possess. But they've now been brought
into the company for integration into a new product line. ARPA-
E facilitates technology development and transfer like this
with culture and talent specifically aimed at identifying
promising concepts in critical energy areas and nurturing them
to success.
The National Academies found that one of ARPA-E's strengths
is its focus on funding high-risk potentially transformative
technologies, and ARPA-E has funded research that no other
funder was supporting at the time, technologies which are now
beginning to enter the commercial market.
But it's not just about funding. ARPA-E attracts
experienced practitioners into relatively short-term government
service with the specialized skills to evaluate new technology
concepts and to manage them forward. Empowered program managers
are a unique and critical component of ARPA-E's success.
They're accorded wide latitude in identifying research themes,
creating new programs, supervising projects, identifying
commercial opportunities, and, when necessary, terminating
projects through very active program management. So this is not
casting our bread onto water. It's cultivating fish.
My final point is that ARPA-E is critical to U.S. global
competitiveness. Energy is a multitrillion dollar industry. It
provides jobs and security for our citizens. It is undergoing a
global transformation from traditional energy sources to new
generation, power, and storage technologies. And other
governments get it.
Consider Cummins' experience in China. Cummins entered the
Chinese engine market very successfully based on world-class
emission technology that far exceeded indigenous capability and
later moved on to a hybrid powertrain partnership with China
government's support. That support was abruptly terminated as
China realized that the rest of the world was ahead in that
domain, too, and shifted to a focus on battery electric vehicle
(EV) powertrains with a strategic intent to lead the world in
EV production.
As I was reflecting on this, I looked up the current China
5-year plan. Here's some of what I found: Ensure innovation in
science and technology takes a leading role; encourage public
startups and innovations; develop strategic emerging
industries; build a modern energy system. Make no mistake about
it, we are in a race without a finish line, and it is a global
race.
ARPA-E's unique mission, structure, active program
management, and drive from innovation into commercialization
are critical for American technology leadership, for American
business leadership, and for American jobs, especially high-
tech jobs. That's worth a billion-dollar investment in ARPA-E
and secure year-over-year funding.
I ask that my full testimony and the executive summary of
the National Academies' 2017 report and assessment of ARPA-E be
submitted to the record, and I encourage the Committee and
Subcommittee and staff to read the full report. Thank you very
much. I look forward to your questions.
[The prepared statement of Dr. Wall follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Chairman Lamb. Thank you, Dr. Wall. And I can assure you we
will. Dr. Griffith, please.

TESTIMONY OF DR. SAUL GRIFFITH,

FOUNDER AND CEO, OTHERLAB

Dr. Griffith. Good morning, and thanks, everyone, for
giving me the opportunity to talk about my favorite topic:
Energy innovation.
I moved to the United States in 1998 to do my Ph.D. at MIT,
and, after completing that, I moved to Silicon Valley in 2004
to be at the heart of the technology industry in this country.
We created Otherlab. It's a small independent research lab
created to make technologies that are commercialize-able, and
we commercialize them by spinning companies out of Otherlab
that grow themselves into stand-alone, viable entities.
I guess I'm here to give case studies of successful ARPA-E
projects. I just founded a company, a wind energy company
called Makani Power in 2006. The idea was to build wings the
size of 747s and fly them on a string about a mile above the
ground and flying in circles at 200 miles per hour and
generating electricity from them.
In 2009, we got ARPA-E funding, $3 million, and I can say
with certainty that Makani Power would not have existed were it
not for that investment. Makani Power then got acquired by
Google, and under Google X, about $100 million more was
invested in the company. They are now generating net positive
power and just this year have announced a partnership with
Shell, one of the world's largest energy companies, to do
offshore deployments of what is fundamentally a
transformational new energy technology.
In 2012, we started another company called Sunfolding. The
sun moves across the sky. Sunfolding is a very simple idea. How
do you track the solar panels as they--as the sun moves across
the sky? You get about 25 percent more energy by doing so.
Traditionally, this is done with complicated machines and
expensive little electric motors, gearboxes, and mechanical
components. We had a radical idea to move those with plastic
bags. That turns out is a crazy idea but it works. We got three
different rounds of funding from ARPA-E to make that technology
work. There was no--we tried to get investment in that
technology prior to ARPA-E funding. Nobody would believe that
it was going to work. That is so successful that we are now
producing 10 or 20 megawatts a week of these trackers. We are
manufacturing in six States across the United States. We are
employing 25 people. We'll be doing a C round of funding for
that company this year, and it looks like it may be the next
success story in the solar industry.
Other examples, we started--there was a MOVE program,
Methane Opportunities for Vehicular Energy. In 2012 ARPA-E
wanted----
Chairman Lamb. Don't worry about that.
Dr. Griffith. I'm in Washington. I worry about those
things.
ARPA-E wanted to support the natural gas industry with
technologies to run vehicles on natural gas that would make
them lower carbon per mile. One of the problems, however, with
natural gas vehicles is the big spherical tank that doesn't fit
very well in the back of the truck or in the trunk of the
vehicle, so they wanted to make what's called a conformable gas
tank, make a gas tank that can fit in the nooks and the
crannies of the vehicle so that you can get more natural gas in
there and make the cars go faster. We used some arcane
mathematics to come up with a new idea and basically imagined
that instead of one big tank we made a giant intestine of a
tank. This reduced the cost of making tanks by about 20
percent, the weight by about 20 percent, increased the range of
those tanks by 30 to 40 percent.
That technology has been licensed into the natural gas
industry and is being commercialized with--in partnership with
Westport. That technology was then further developed with
funding from many different automotives, so we got about $10
million in development revenue from the major automotives to
also develop the same technology for hydrogen vehicles, and
that hydrogen technology has now been licensed to Linamar, a
major OEM (original equipment manufacturer), and is going to
market in that industry.
Another radical idea we had was to make clothing that could
change its shape in response to temperature, the idea being if
it gets cooler, the clothing gets warmer. If it gets warmer,
the clothing gets cooler. I did that in partnership with a
colleague from MIT who had originally come to work on
Sunfolding as our material science, but the one point to
emphasize here is that ARPA-E is funding a community of people.
When they get funded on one project, then they often go on to
work on other energy technologies. And the community is
fundamental to the value of ARPA-E.
We have been able to use that ARPA-E funding to develop
entirely new manufacturing processes, knitting and weaving
processes to create this textile. We've secured so far about
$2.5 million in venture funding. That company will probably be
deploying that technology in real products, bedding and
clothing, next year and will be doing another fundraise this
year.
We did another program called the Super Sankey. This was
not focused so much on making an energy technology but rather
how do we understand the U.S. energy economy in the greatest
possible detail? So we pored over all existing government
sources of data and some nongovernment sources of data to build
the most comprehensive flow diagram of all the nuanced
relationships in the U.S. energy economy, and this tool is now
online. And in fact in their last--ARPA-E's last OPEN FOA
(funding opportunity announcement), they suggested that teams
use this tool to understand the potential impact of their
technologies on the U.S. energy economy. It also highlighted
that there are great opportunities for re-examining how we
gather data about the U.S. energy economy and how we report it
in order to support how we transition to a new energy economy.
[The prepared statement of Dr. Griffith follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Chairman Lamb. All right. Thank you, Dr. Griffith. We'll
stop you there at the end of the 5 minutes and move on to Mr.
Mills.

TESTIMONY OF MARK MILLS,

SENIOR FELLOW, MANHATTAN INSTITUTE

Mr. Mills. Good morning. Thank you, Mr. Chairman and
Members of the Committee, for the opportunity to testify here.
I'm honored and in fact humbled to join such an esteemed team
of witnesses and join in enthusiasms for ARPA-E. It's one of
the rare opportunities for true bipartisan enthusiasm.
In that context, I'd like to use my minute--5 minutes to
frame the ARPA-E transformational mission by talking about the
energy scale challenge. Traditional metrics are really
inadequate for visualizing the magnitude of the global oil,
coal, and natural gas production. Other witnesses have pointed
out that 85 percent of the world's energy comes from
hydrocarbons, but if they were all in the form of oil and laid
out in physical barrels that would form a row stretching from
Washington D.C. to Los Angeles, and that row would grow in
height by a Washington Monument every single week.
Then as the world's poorest 4 billion increase their energy
use of just 15 percent of the per capita level that we enjoy in
the West, the world's demand for energy will increase by the
equivalent of adding the United States' worth of demand. And in
the developed countries, we can consider the applications in
the future of just two fast-growing sectors. Every billion
dollars spent in commercial aircraft or billion dollars spent
on data centers each leads to about $2 billion in energy
purchases over a decade. And the world currently spends over
$100 billion a year building and supplying the market's new
airplanes and data centers.
Meanwhile, we do know something about the cost of policies
to impact this enormous market. Over the past 2 decades the
world has spent more than $2 trillion on non-hydrocarbon
energy, but hydrocarbon use rose nearly 150 percent over that
time. And hydrocarbon's share of global energy supply decreased
by barely a few percentage points.
This scale challenge of course commonly elicits the
aspirational proposition that we should embrace the spirit of
the Apollo program. The problem with this analogy is that it's
a category error. Transforming the energy economy is not like
putting a dozen people on the moon a handful of times. It's
like putting all of humanity on the moon permanently. But in
the decades since the Apollo program, we've seen another and
bigger tech revolution that's inspired a similar trope. This is
of course the computing and communications revolution, often
short-formed as Moore's law. The International Monetary Fund,
to just pick on one example, has asserted that, and I quote,
``Smartphone substitutions seemed no more imminent in the early
2000's than large-scale energy substitution seems today,'' end
quote.
But the Moore's law in transformation of how energy is
produced or stored isn't just unlikely. It can't happen with
the physics that we know today. If photovoltaics (PVs) scaled
like computing, a postage-stamp-sized solar array could power
the Empire State Building. Similarly, if batteries scaled like
computing, a book-sized battery that costs 3 cents would fly an
A380 to Asia. Only in comic books does the physics of energy
production work like that.
Of course, wind turbines, solar cells, batteries, all those
will improve. So, too, will drilling rigs and combustion
turbines and of course software will bring very important and
even dramatic efficiency gains. But there's no possibility that
more Federal funding will lead to digital-like disruptive
tenfold gains in these old technologies. All are approaching
their physics limits.
The relevance of ARPA-E is that its out-of-the-box mission
can only come from new phenomenologies and that leads
eventually then to radically new technologies, all of which can
only come from basic research.
Now, to state the obvious, internet didn't emerge from
improving the rotary phone; the transistor didn't come from
subsidizing vacuum tubes; and the car didn't come from studying
railroads. Policies in pursuit of an energy revolution require
a focus on basic science. One example in an area which is
seeing a deficit of research support where I think magic can
yet happen is in the basic materials sciences.
Let me conclude by summarizing three things Congress could
do in order to fulfill the mission originally envisioned for
ARPA-E. All three are found in fact in the original Gathering
Storm report. First, ARPA-E should ensure a very clear focus on
basic science. A vital role for ARPA-E is in filling the often
ignored gap between the foundational science discovery,
invalidating whether that radical discovery is in fact useful.
This is quite different from the often-cited gap between
innovation and commercialization.
Second, the Congress should I think put ARPA-E's role under
the Undersecretary of Science, as originally envisioned, to
both signal a commitment to basic research and insulate it from
the--what I would call contamination of near-term outcomes.
Finally, ARPA-E's budget, I agree, should increase, but I
would also stipulate as a caveat that we should adhere to the
Academies' original recommendation, finding those funds but
reallocating from those Federal programs that are already doing
what I would call de facto private-sector development.
Finally, I think Congress should follow the Academies'
proposal to continue to review the performance of ARPA-E but in
particular this time with an independent committee that is not
dominated but includes Federal representatives so that the
private markets that understand basic science transitions
participate. I have no doubt that scientists will yet unveil
what Bill Gates calls an energy miracle. That's the word Bill
Gates used, but that won't come from spending more money on
yesterday's technologies.
Thank you.
[The prepared statement of Mr. Mills follows:]
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Chairman Lamb. Thank you, Mr. Mills. At this point we will
begin our first round of questions, and I will recognize myself
for 5 minutes.
First, I want to talk about how we track the success of
ARPA-E over time. And I think, Dr. Majumdar and Dr. Williams,
you both kind of addressed this in your testimony. I'll start
with Dr. Majumdar. What do you think about the idea of this
metric of the amount spent by the Federal Government on ARPA-E
versus the follow-on private funding that has resulted from it?
Recognizing those two don't match up exactly because the
private funding only attracted to a small percentage of what
was funded in the first place, but do you consider that to be a
decent measure of progress for ARPA-E?
Dr. Majumdar. Well, thank you, Mr. Chairman. I think this
is a really important question. I was asked this question,
believe it or not, in my confirmation hearing for being the
ARPA-E Director by Senator Murkowski, and we spent a lot of
time thinking about it. The question is how do you define
success? And one can think of success as a full commercial
scale like the internet today. And just taking the example of
internet, the research and computer networks started in 1968.
It took 25-plus years to really get full commercial impact of
the internet. And during that time, it was funded by DARPA to
really improve and finetune that.
So looking at ARPA-E's technology, ARPA-E's funding mostly
proof-of-concept ideas. To take proof of concept and go--to go
all the way to commercial scale is, as I've mentioned, is a
long process. It takes 15 to 20 years. So the only thing we can
really say post-ARPA-E right now is, what are the signs or
metrics of future success that we should be looking for? And I
think there are many of them. There's not one single--there's
no silver bullet in this one. I think one should be looking at
is there intellectual property creation that has happened? Is
there follow-on private-sector investments in--on ARPA-E-
related projects that are showing some signs of success?
Chairman Lamb. And I agree with you there, not to cut you
off, but time is limited, so thank you.
And, Dr. Williams, you specifically cited that figure of
the follow-on private investment, so I know it's tough because
of the timescale that you all are talking about. Something
could take 15, 20 years to commercialize. But do you still
think us tracking that comparison over time is a useful measure
of success even if it's not the only one?
Dr. Williams. I absolutely believe it is a useful measure
of success. It's an early-stage measure, as Professor Majumdar
says. It's something we can measure, and it is indicative of
future success. As time goes on, you will see our ability to
measure more metrics such as jobs creation and manufacturing,
but that's a longer-term process. And the scale problem that we
heard about is acute. This will not happen overnight. And the
cumulative impact of these types of investments and these early
metrics are very, very useful for predicting that.
Chairman Lamb. Great. Thank you very much.
Dr. Wall, go ahead.
Dr. Wall. Just a quick comment and a watch-out. I think as
we discovered as we were doing our Academies study, that
there's an inherent tension between the 3-year funding cycle in
ARPA-E, people wanting to see success, and the longer-term
nature of the investment. So the watch-out here is that, as we
want ARPA-E to be really focusing on long-term benefits, that
we don't put so much pressure on showing early success that we
wind up shortening the cycle and then turning it into some of
the issues that have been raised about the--starting to look
like short-term--more short-term research.
Chairman Lamb. Absolutely. Thank you.
Mr. Mills, I just wanted to ask one question of you before
I close. I take your point about the tension between the basic
science research and some of the other proposed ideas for ARPA-
E. I guess one concern that I have is that this isn't happening
in the vacuum of the United States. We have foreign
competitors, especially China, who will really stop at nothing
to dominate certain industries. They're very open about that
actually. And there was the great example from Dr. Wall about
what happened with electric vehicles. So they have no
hesitation about putting a lot of money into the
commercialization of existing technologies. Given that
competition that we face, do you think there's still a role for
the commercialization funding as a way of accelerating what
might otherwise happen through the private market to keep us
competitive?
Mr. Mills. The short answer is yes, there is a role, but
this is always a challenge that you have in Congress is the--
where you lie on the spectrum of the nature of that role. I'll
give as one example when I--as you know, I worked in the
Science Office in the Reagan White House, which dates me as not
being young anymore. The--Congress and the White House was
lobbied heavily then to mount a program that countered the
Japanese program mounted by MIDI for next-generation computing.
We were told then that the Japanese were going to take over the
computing business and leapfrog IBM, which dominated world
markets then.
The approach of the Science Office then was that we
didn't--we liked to support the commercialization of next-
generation technologies, but the President did not believe that
anyone in government actually knew specifically what to
commercialize. And that was the same year, by the way, that
Steve Jobs took Apple public, and it was not one of the
companies that was on the radar of changing the computing
world.
So I think this is the tension but also the temptation is
to fund what we think will be the revolution against the huge
funding by our competitors, then Japan, today China.
Chairman Lamb. Thank you very much. That's a helpful
example.
And I now recognize Mr. Weber for 5 minutes.
Mr. Weber. So actually I'm going to yield to Mr. Norman for
5 minutes.
Mr. Norman. Thank you, Congressman Weber. I appreciate you
yielding.
And, Mr. Mills, this will be directed to you. I'm from the
private sector. We look at results, not intentions. We look at
results. And let me just read some of the numbers. As of
February 2018, the program has invested approximately $1.8
billion in R&D, which funded over 660 projects through more
than 44 programs. And in your testimony you mentioned the need
for audits. Do you think these audits would be useful in
highlighting duplicative programs overlapping so that we can
track where the dollars are yielding results?
Mr. Mills. Well, thank you for that question. I--I'm deeply
conflicted in this area because I have written about and in an
early life I was a research scientist. I'm extremely
enthusiastic about the prospect for government giving more
money to scientists. At the same time, I work in the private
sector, and I'm very sensitive to results outcomes.
My proposal for an audit is really focused on two things,
not just looking for duplication, which I--there's some merit
in duplication. I mean, as--you know, we do this in the private
sector, as you know. You might have two teams trying to solve
problems orthogonally. But there can be too much duplication.
What I would like ARPA-E to focus on is avoiding doing work
that doesn't adhere to its mission. There are missions for
basic development, but the underlying transformational science
mission I think there's a potential looking at some of the
programs as adrift toward doing things that are in fact the
missions of other agencies in the Department of Energy but that
are really not transformational.
So the other part I would like to add just briefly is that
the--holding ARPA-E to a utility function that can be
specifically measured like dollars and patents is a natural
tendency, but I think it's a mistake. I think it's useful, but
it will not measure transformations, and that's the--I think
it's not trivial. There's no easy measurement. I think the
witnesses have pointed this out. And I think if you were in a
confirmation hearing, you would be forced to say what's my
measure? I understand that.
I think there would be merit to forming a committee as part
of ARPA-E's future look to come up with an additional creative
answer to that question. What else could we use that would help
us understand that what ARPA-E's funding has the potential to
be transformational, not simply evolutionary to making a PV
cell better? That's important, but that would be a private-
sector mission in my view.
Mr. Norman. Do you think it would be beneficial to put it
under the Department of Energy?
Mr. Mills. The--ARPA-E or the----
Mr. Norman. Correct.
Mr. Mills. Well, I think it's got a good home. I think the
challenge is a version of being insulated from the near-term.
If you report to the Secretary, it's better status, I
understand that, but the Secretary is driven by the budget and
near-term mission. One would hope that you create an entity
that has some of the insulation that an SEC (U.S. Securities
and Exchange Commission) might have. Some of the agencies that
can operate on 5-year cycles or the chairman or the head of it
isn't turfed out for failing on a budget metric but rather they
have a different mission. The SEC doesn't have a budget
mission, for example. It has a broader social and regulatory
mission. In my view, ARPA-E is more in that category than it is
in the traditional research category.
Mr. Norman. Dr. Griffith, did you want to say something?
Dr. Griffith. Absolutely. Your concern I believe was that
ARPA-E's funding may be duplicative of other agencies.
Mr. Norman. Not--I don't know that. I'm saying why not put
a measure in place that could see for the benefit of the
program to see if----
Dr. Griffith. I might respectfully suggest that it's not
terribly relevant. We applied for--I have now created and
commercialized technologies that would not have existed without
ARPA-E. We tried to have those things funded through the other
agencies of the Department of Energy, and they were non-
receptive because in general those agencies are more
prescriptive about what they're looking for. So ARPA-E's beauty
is that it is--has very wide view, purview on what is
transformational, and so it can pick and choose. And I think it
is doing a very good job.
So I think it almost by necessity needs to be duplicative
in the sense that there's solar here and there's solar there
because the transformative is in the details and in the--in how
ARPA-E is--has a wider mandate to fund a broader array of
entities. For example, ARPA-E can fund a small startup company
like mine that doesn't look like a national lab, doesn't look
like MIT or Stanford, and don't believe that they are the only
places that ideas in this country come from. In fact, in nature
they just showed that small teams operating independently are
the biggest force for transformational R&D in the world. That
looks like small companies like mine that quite frankly aren't
allowed to access a lot of the underfunding within the DOE. So
ARPA-E is really the only option.
Mr. Norman. Thank you for your testimony.
Chairman Lamb. The Chair now recognizes Mr. Lipinski for 5
minutes.
Mr. Lipinski. Thank you, Mr. Chairman. Thank you for
holding this really important hearing. It's great that Chairman
Gordon is here. I remember working--I think I'm the only one up
here who was here when we established ARPA-E. I wish that there
were more chairs that were filled here because there's a lot of
talk right now about climate change and what should be done.
There's a lot of talk in politics, social media about some
other vague, big, broad ideas, but this right here, ARPA-E may
be--this may be the most important thing we do on climate
change this year if we put more funding into ARPA-E.
I was just talking to Bob Inglis, who used to sit on this
Committee. He's been dedicated over the last 10 years to
getting a carbon fee put in place. It's something I support.
But here is something I think we should all be able definitely
to support is more funding for ARPA-E. It was envisioned to be
funded at $1 billion annually, not $1 trillion, $1 billion
annually. Fiscal year 2019 it's at $366 million.
So I wanted to ask, what do you think would be the
difference if we could get that funding for Fiscal Year 2020 up
to $1 billion? What difference would that make in really
advancing these green energy technologies? So, Dr. Majumdar, do
you want to begin?
Dr. Majumdar. Thank you, Mr. Congressman. I think--first of
all, I appreciate your support of ARPA-E right from the
beginning. I think the billion-dollar budget, there's a lot of
discussion on that going on. And if you look at internally
within ARPA-E what fraction of these amazing ideas that come in
as proposals to programs, what fraction gets funded? In a
regular program that is announced in a funding option
announcement and if you go through the whole screening process,
it's only about 10 percent or 15 percent of the actual
proposals get funded. The next 10 to 20 percent are equally
good ideas; we just run out of funding.
If you look at OPEN funding option announcement, and
there's a lot of, you know, discussion on the rest of the
Department of Energy. There's no one in the Department of
Energy that actually has an OPEN funding option announcement,
open for any ideas. And in those OPEN FOAs, the rate of success
for proposals is less than 5 percent. And so there's a
tremendous appetite for innovation in the United States that is
not being funded. In fact, at the Energy Innovation Summit, on
the recommendation of former Chairman Gordon and others, we
actually invited the people we could not fund because we wanted
them to get funded as well from other sources because these
were really, really good ideas.
So there's a tremendous opportunity to raise and build the
ecosystem and the community, the energy innovation community to
be much larger, as is needed to address the major challenges
that we have. I also----
Mr. Lipinski. Let me move on to Dr. Griffith. I'm sorry; I
have a limited amount of time here. I know Dr. Griffith had his
hand up.
Dr. Griffith. I existed the coalface or maybe I should say
I existed the solar cell of this issue. I haven't had to really
place a job ad to hire people for the last decade. I have
volumes, probably 10 of the best and brightest young Americans
who've been trained by the best universities in the world
volunteer themselves to me every week. We want to work on
energy technologies. We want to work on climate change. We want
to come and work for you. We have our own ideas.
Without a doubt there is at least tenfold the good ideas
that are currently being funded under ARPA-E existing in the
minds of your young people. And you want to get the money as
directly as possible to the 25-year-olds, not their professors.
Their professors are working on last year's technology. You got
to get it to the grad students who are imagining next year.
ARPA-E can do that.
I would argue that it should have funding that looks more
like DARPA, $3 billion a year as a budget.
Mr. Lipinski. I don't have much time, but Mr. Mills raised
an interesting argument there that we need transformational not
evolutionary. I think Dr. Williams wanted to respond on that. I
just want to see what your thoughts were on that.
Dr. Williams. Yes, so very much the case that ARPA-E does
not want to do evolutionary research and does not fund
evolutionary research. Every project is selected for its
potential to be a game-changer, to move outside of the normal
boundaries of industry roadmaps or long-term planning and
things are already mapped out and being done by the Department
of Energy.
So, as an example of something that is transformational
that ARPA-E is working on right now, even though it is a
project within the broad sphere of wind, it is a project to
transform how we think about designing and developing wind
technologies, using machine learning and engineering technology
to develop better methods of designing and deploying and
manufacturing wind turbines. So that--if that succeeds, it will
be a completely transformational approach in an old technology.
And that's the type of projects that ARPA-E can do more of and
should do more of.
Mr. Lipinski. I see my time is up, so I yield back.
Chairman Lamb. And I now recognize Mr. Weber for 5 minutes.
Mr. Weber. Thank you, Mr. Chairman. Excuse me. Very
interesting.
Mr. Mills, in your prepared testimony--well, you said a
couple things about patents, for example. And I like that
because not all patents yield results. I'm reminded, Thomas
Davenport had a patent on the electric motor in 1837 and it
went absolutely nowhere, and so while it was transformative, it
wasn't practical.
You also say that transforming the energy economy is not
like putting a dozen people on the moon a handful of times.
It's like putting all of humanity on the moon permanently. And,
quite frankly, I've got some friends that I wouldn't mind doing
that with. And let me just say that, get that out of the way.
But to do the latter would require science and engineering that
doesn't exist today is what you said in your statement. And
we're talking about raising the funding to $3 billion, which
would necessitate that we cut from somewhere else. We have to
find that money. So I don't know that it is practical. Could
you expand on this comment and detail the science and
engineering capabilities that would be required for success in
a non-carbon energy economy moonshot today? I'm--I like to hear
you elaborate on that.
Mr. Mills. Well I--you know, I--first, if I might, as I--
it's part of the elaboration, I--I'm in agreement with probably
99 percent of what's said in this hearing by other witnesses.
It's one of these areas that's a challenge because the debates
that are important are in the 1 percent of disagreements, which
where--it's where the transformations happen. And my concern is
in the implementation and as it relates to vision to your point
that it won't be a single magical thing.
I mean, the magical thing we need to change the world's
energy economy would be the equivalent of the discovery of
fission or, to use a materials science example, if one were
able to engineer a meta-material that could--that was strong
enough and functioned--and it was lightweight that was a shield
against x-rays and gamma rays, you could make what engineers
thought you could do in 1950, a nuclear-powered car. I mean,
you'd make a little pellet-sized reactor, and this is--this
would be magical.
It's not crazy to think of those things. It's certainly not
possible with anything we know today. That kind of
transformation would certainly be the equivalent of the
discovery of petroleum or the photovoltaic effect. Some things
can't be done, and my point really was that you can't make a
photovoltaic cell more efficient than the photons that arrive
at Earth and converting them at some--you can't convert 100
percent efficiency, so we know what the boundaries are.
So when one looks at a proposal, one can know without
knowing anything about its merits first whether it can be
transformational. If you change the cost of something by 20
percent or 30 percent, in business that's meaningful. It's not
necessarily transformational to the world because you're
chasing other things that are changing by 20 or 30 percent.
The market that solar, wind, and biofuels and batteries
compete against is the hydrocarbon market. It gets better all
the time, too, to the benefit of everybody on the planet.
So I think your point of patents is a particularly
important one. Patents are a metric, and they're important. I
have a few patents for my early career. They were fairly
foundational ideas. One wasn't. Some are pretty sloppy patents.
The patent office can be overwhelmed, as we all know if we've
been applicants. But they're an important measure. They're
useful. But they don't necessarily measure foundational change
unless you look at--as you know, not to get into the weeds--
prior art. If there's no prior art, it might be foundational.
That'd be one mechanism, for example, to sort of fine-tune the
ARPA-E mission is if we get a patent, is it a derivative, an
incremental patent or is it actually foundational with no prior
art?
Mr. Weber. Well, thank you for that. I do need to move on
to a second question for all the witnesses. I'm running a
little bit out of time here. We've heard a lot today about the
need to significantly increase ARPA-E's budget as quickly as
possible, but in Congress, as I mentioned, we're going to have
to find that money somewhere. We're called to be good stewards.
And I'm not sure than any of our constituents--my constituents
would be on board with an increase of close to $700 million.
That's hard to justify back home in spending at the Department
of Energy. So providing this kind of funding increase for ARPA-
E is almost, as I said earlier, going to require cutting
somewhere.
So let me put you all in the driver's seat for a minute.
Where would you cut, Dr. Majumdar? I'll start with you.
Dr. Majumdar. Well, that's a really difficult question to
answer, Mr. Congressman.
Mr. Weber. Tell me about it.
Dr. Majumdar. I think this is a discussion between you and
Secretary Perry and the current team out there, the Under
Secretaries and others----
Mr. Weber. So you've not--I'm sorry to cut you off but I'm
really short on time. You've not thought through this, don't
have an exact--example? Dr. Williams, I'll give you the same
question.
Dr. Williams. Well, of course one thing that can be done
and is being done increasingly at the States' level is more
leveraging. And there are a variety of interesting new
financial mechanisms for increasing leveraging and the output
benefits of what we get from ARPA-E and from other programs and
government. So I would strongly encourage that as one mechanism
for getting more bang for bucks out of the Federal funds that
we do supply.
Mr. Weber. Dr. Wall?
Dr. Wall. Yes, I think I'd go down the same path. First of
all, I'm not sure that I would close the budget debate just
within energy considering the importance of energy for our
future but to look at the entire budget, which gives you a
little more flexibility.
But I think as we look at growing the ARPA-E budget, we
ought to be also looking at other things that they could be
doing, models--other models that could be added. Dr. Majumdar
raised a parallel to SEMATECH (semiconductor manufacturing
technology), which involves--brings in more industrial partners
who can participate in a way that's a little bit different than
the model that we have now. So I'd also look at changing the
operating model with this incremental funding at the same time.
Mr. Weber. OK. Well, I appreciate that. I got to go on. Dr.
Griffith, finally, be brief, please.
Dr. Griffith. To tie it to your moonshot question of the
previous--what does a moonshot look like, if America plays its
card right and completely electrifies its economy, it will only
need half of the primary energy it needs today to supply the
economy as it is. If it does that, it will be the leader of the
world economy, and it will more than pay for itself. If you had
to just very callously look at--I would look at other poorly
spent budgets within the Department of Energy and the
Department of Defense, their research budgets.
Mr. Weber. OK. Let me stop there because I'm way over my
time, and I appreciate you all's indulgence. Thank you, Mr.
Chairman.
Chairman Lamb. I now recognize Ms. Stevens for 5 minutes.
Ms. Stevens. Thank you, Mr. Chairman, for this important
and necessary hearing, and thank you to our expert witnesses
for joining us today.
As a former Obama Administration official who worked in the
advanced manufacturing space, I couldn't think of a more timely
hearing in part because just the other week, as my colleagues
and I pondered on the House floor what should be our moonshot
vision for innovation for the quarter-21st century, for the
mid-21st century--we find ourselves in the room with the sign
that says where there is no vision, the people will perish.
So the burden of American greatness and our industrial
might must be how we define these moonshot visions, not
debating the merits of funding them, but seizing hold of the
opportunities to invest and win the future. We are still in the
race for our innovation and what we saw in the mid-20th century
as we were racing to get to the moon. We are competing against
the likes of China and Western Europe, and so we know we need
to continue to invest.
I now today represent Michigan's 11th District, the suburbs
of Detroit, the most robust automotive supply chain in the
country. We are the recipients of $35 million from ARPA-E
projects largely going into electrification, electric vehicle
battery development. And we've heard other questions from this
great panel. We've heard other questions on exercising what the
ARPA-E funding does for this work.
I'd like to just take it a layer deeper because the
headline that I find quite alarming among many alarming
headlines is that China is leading the charge for lithium-ion
mega factories, China is leading the charge for battery
electrification, that China now has over 70 OEMs in the battery
efficiency space. Where are we? So what does it mean if we fail
to invest or don't increase our budget? Dr. Williams, I'd like
to start with you particularly on the automotive industry,
please.
Dr. Williams. Yes. Well, it's a pleasure to hear from you.
I grew up in the suburbs of Detroit, and I also experienced the
health and the dynamism of the automotive industry there.
In terms of electric vehicles, we do face very stiff
international competition. I would say that much of the growth
that we are seeing now on lithium-ion battery and battery
development is using old technologies and driving down cost by
better manufacturing techniques. ARPA-E has invested lightly in
electric vehicle batteries only in areas where we think we can
make a transformative change in the actual battery chemistry
and the future--and allow us to have future batteries that will
be better than the ones that we are seeing developed in China.
Coming out of that research we're seeing many innovative
exciting new battery chemistries, and I can't emphasize to this
Committee too much the peril that we face. We do phenomenal
basic research in the United States. We train great graduate
students. We send them out to do great research. ARPA-E tries
hard to take some of those exciting new ideas and move them
forward to prototypes. If those prototypes reach a certain
stage of development and readiness and that next stage of
investment is not there, they fall dead. We lose that
investment. Other companies, countries will know about what
we've done, and they will take it forward. We have to make sure
that we are able to support our young innovators to not just do
the innovation but to actually deliver the benefits that come
from it. And EV batteries is one area where we absolutely need
to maintain that primacy.
Ms. Stevens. Yes, thank you so much. Dr. Majumdar, this
reminds me of your testimony and where you talked about the
return on the investment and the lifecycle of the investment,
and I was wondering if you could just shed a little bit more
light on where Dr. Williams left off, around the continuity of
funding and ensuring that we don't allow new technologies to
fall into the valley of death, what this means for industries
like our great automotive industry, which, by the way, has said
they want to see zero emissions. They want to embrace
electrification. They are looking and waiting for us to
continue these partnerships, to continue to invest if not but
for the government to lay the foundation, to set the table.
That's the conversation we're having here. So if you don't
mind.
Dr. Majumdar. Sure. Thank you, Congresswoman. I think the
automotive industry, as you pointed out, is trying to pivot.
This is a time of extreme importance because this is a once-in-
a-century colossal change that is happening to an industry that
has grown in a certain way and they're trying to pivot. We are
very proud of course in the United States of the Gigafactory
that is going to make batteries. In China there are two and now
I'm hearing the third Gigafactory being built.
So the question that comes at--the fundamental question
that Dr. Williams raised is that how do you go from a proof of
concept to a proof of system to a proof of--in a pilot
demonstration so that it gets into the Gigafactory? And I think
this is where in my written testimony I propose that look back
at what DARPA did. When there was a challenge to the
semiconductor manufacturing industry, DARPA said, OK, you have
your competitors, Texas Instruments, Intel, and others. Let's
just come together to create something called a SEMATECH to
nurture some of the DARPA-funded fundamental research in
breakthrough technologies that led them--then they were
nurtured by the industry and then they took those technologies
and they competed in the marketplace with products and
services. So I think that's a model----
Ms. Stevens. Yes.
Dr. Majumdar [continuing]. That's--the semiconductor
industry is not the same as the energy industry. So we should
look at these opportunities, the things that have been done in
the past and see what are the lessons learned that could be
adapted to the energy field and see what we can do in the
private and public sector together.
Ms. Stevens. Thank you so much. I cede back.
Chairman Lamb. Thank you. And the Chair now recognizes Mr.
Foster for 5 minutes.
Mr. Foster. Thank you. And I guess I'd like to start off by
just seconding all the praise that's been showered on ARPA-E
for its achievements to date and my gratitude to Bart Gordon
for his role in initiating this.
And I'd also like to emphasize that this is complementary
to the role that national labs play. An example of that would
be, since we're talking about batteries, the JCESR (Joint
Center for Energy Storage Research) program where one of the
main deliverables is computer models of battery chemistries
that will be developed and maintained by a large team of people
that has to stay around more than 3 years. So it's not a one-
shot thing. This will be a national resource, and I think the
labs are appropriate stewards for this.
But there's a real need for something like ARPA-E to fill
gaps in the private-sector research and development. You know,
you can sort of analyze this as why, if this is such a great
idea, isn't the private sector doing it? And the reasons that
occur when you ask venture capitalists, they said, well, this
is too long-term, that the payoff will be outside the patent
window, and it's a real reason for ARPA-E to exist.
The second is the low probability of success. Now, you're
placing some bets that are unlikely to pay off. They'll be
transformative if they do, and that's not an attractive
investment to a VC (venture capital) firm that has to show the
fund is making money after some small span of years.
The third reason that I'd like to look into a little bit is
the lack of patentable intellectual property. Very often you
have a great idea, and this is wonderful, it will be
transformative if it works, but it's not really patentable. And
so very often venture capitalists won't invest in that. And I
was wondering how you handle the issue of patentable IP
(intellectual property) both in the selection of projects to
decide to get behind and also when you contemplate follow-on
funding and the probability of handing off to the private
sector where patentable IP will be important. You know, either
Dr. Williams or Dr. Griffith.
Dr. Williams. So I'll start. I would say that ARPA-E's
commercialization activities strongly encourage its teams to
develop patentable IP. We don't initially select on the basis
of whether or not they're--they have patents or patentable IP.
As they move forward, there are certainly different models for
companies. Many--there are many types of technologies which, if
they can't be patented, are kept as company and proprietary
secrets. ARPA-E supports our project teams in developing such
technologies and respects when they need to develop that
proprietary technologies and move it forward without risk of
exposure. I hope that's helpful.
Mr. Foster. Yes. Dr. Griffith?
Dr. Griffith. Writing and obtaining patents is really easy,
and you can do it all day. It's expensive, so you want to do it
as little as possible when you're starting new technology
companies. I think it's a very bad predictor of success, but
it's one of the--it's easily measurable, so we use it, but it's
not at all good. In the global marketplace today and because of
the dysfunctionalities of the whole patent process, your really
only advantage now is to speak to market. And inasmuch--what do
patents exist for? Maybe to help you get financing, but apart
from that, it's all about speed of execution, so it's the wrong
thing to measure.
Mr. Foster. So how much of this has to do with what I view
frankly as a sort of assault on the patent system that's
happened in the last several years, led actually by Congress.
The sort of systematic weakening of patentholder rights and
various forms that have been passed?
Dr. Griffith. I think it's more fundamental and structural
than that. The patent system has existed long enough that it
easily gamed.
Mr. Foster. In what sense?
Dr. Griffith. The large corporations can play it very
easily. They can afford to. Small companies that are doing the
really innovative thing can't. And you can have large
corporations basically outmaneuver you. And so I think that is
one example of a structural problem. We evolved through
lobbying the patent system toward advantaging large companies
because they could afford to, and small companies who do the
innovation are disadvantaged in the patent-playing field.
Mr. Foster. Well, also, when they try to enforce those
patents, they're characterized as trolls and so on.
Dr. Griffith. Yes.
Mr. Foster. Yes, Dr. Mills? Or Mr. Mills.
Mr. Mills. Mr. Mills. Yes, I was one of the ones that quit
graduate school, but I wasn't as successful as Bill Gates when
he quit graduate school. It's a very good point----
Mr. Foster. He quit undergrad if I remember properly but--
--
Mr. Mills. That's right. The patent issue is interesting,
and I agree with Dr. Griffith that it can be gained and often
is. And I'm worried about the attack on the patents because
it's not just the Constitution; it has real merit. But I would
point out, as an active venture capitalist, that patents are
only one measure of what you would make in investment.
Frequently, such speed to market is critical, but there are
many things one does in the technology business. And I know I--
I know you know this is truth, that are what you call process
knowledge and domain knowledge that you deliberately don't
patent because once you patent them, you've told people how to
do it. And it's remarkable how much of innovation lies in that
area and how little relies on the patents. So I just--just for
the record, I think--and that's a hard one to measure. That's
measuring the team, which is a challenge for ARPA-E, and it's a
challenge for venture capitalists.
Mr. Foster. OK. And let's--we've had a lot of sort of
discussion of transformative high-payoff research. But, you
know, Dr. Griffith's examples he gave, many of them seemed
incremental, a 20 percent decrease in the tank for compressed
air or a change in the actuator mechanism for solar tracking,
which it's a potentially good idea that will take over that
segment of the market, but will not really transform the
economics of solar power. And I was just wondering what is the
payoff that you're shooting for something that will transform a
very small sector and make an incremental improvement? Yes, Dr.
Williams?
Dr. Williams. So I would say that I wouldn't measure
incremental in the sense of 20-percent or 10-percent impact on
the energy. It's--incremental I consider to be a fundamental--
the idea of how the technology transforms the approach. So
something like the pointing mechanism based on a completely
different technical approach, that's a technical innovation,
and it is far from incremental. It really transforms the
mechanism.
And what we see in an innovation system is that small--what
are initially small projects like that combined together to
create a whole learning curve, which ultimately grows and
blossoms and creates much bigger impacts overall.
And so this comes down to some of Dr. Majumdar's comments
about the need for patience. The innovation----
Chairman Lamb. And that's helpful. We'll probably have to
stop you there, Dr. Williams, because we're past time, and
we'll go to Mr. Casten for 5 minutes.
Mr. Casten. Thank you very much. Thank you all for coming.
I have to frame this by saying that this is a bit of an
unfair question for Dr. Majumdar and Dr. Williams, but bear
with me. I think a lot of this conversation is about metrics,
and I think we really need metrics. I'm a chemical engineer and
a biochemist by training. I'm an entrepreneur by career, and a
couple months ago I decided to get a new job. I mentioned that
because early on in my career we did work on biofuels and fuel
cells, and it was before ARPA-E existed. I actually had
colleagues who were able to get money from DARPA, and I'm
thankful that my colleagues here created ARPA-E to follow that
example because you guys really have done a lot of neat stuff,
and I thank you for that. And it was urgent and necessary.
In the private sector, if you're any good on the
entrepreneurial side you look at the total cost, the total
benefit, and then you figure out how to structure your business
to get as much of the benefit and as little of the cost. In
this new job I have, we tend to think about offloading cost to
the private sector as being fiscally irresponsible, and I don't
think that's always the case.
If I'm doing the math right, ARPA-E has invested $1.8
billion, $2.6 billion of follow-on. That's pretty successful.
Relative to the challenge we face in the climate, respectfully,
it's a fart in the whirlwind. And so if we're going to get to a
point where you have the resources to take on the challenge
that we have as a society, we need to somehow get people
thinking about what you do as being closer to the way that the
venture capital world works, where they celebrate the unicorns,
they maybe focus on the portfolio returns and do their best not
to talk about the failures. Witness Solyndra. We've kind of
done the opposite on the political side where we talk about the
failures, we don't talk about the portfolio, and the unicorns
go on to be privatized, and we don't talk about them too much.
How do we get metrics that you all can manage to, and be
rewarded for, that can build the political will so the people
can recognize the value that we are creating here and not have
it come out buried in the last freshman commenter in a science
hearing about the net gain? And what are your thoughts on what
those metrics might be?
Dr. Majumdar. Thank you, Mr. Congressman. I think this is a
very fundamental question and it has come up many times before.
I think you have to look at metrics over time scale. I have
been funded by DARPA in my research career several times. I was
not involved in the internet, but what we talk about for DARPA
is internet, GPS, and things like that, right? It is the
unicorns. So I think long-term you will get to see some of the
ARPA-E technologies--you know, you have talked about the
return--you know, the follow-on funding. Well, this is just the
start of the follow-on funding. There will be many more later
on as these technologies mature and come--become products and
services.
So I think it's important, as I mentioned in my written
comments, it's important to be patient with these. But in terms
of the metrics, I would look at a portfolio of metrics, not
just one because I think if you fix--if someone gets fixated on
one metric, you could be misled as to the true impact on the
future.
Mr. Casten. OK. One follow-on with the bit of time I got
left. Last Congress, my colleague Congressman Lujan introduced
the Impact for Energy Act, which would have established a
nonprofit foundation at DOE with the private sector to raise
funds to support the commercialization and development of
innovative energy technologies. I'm working with Congressman
Lujan to--on a similar bill that would bring it forward.
Dr. Majumdar and others who can comment, if I'm following,
the NIH (National Institutes of Health) has raised about $1
billion in total funds and supported 550 projects alongside NIH
to do this on the biomedical side. Do you believe that such a
nonprofit foundation at DOE, similar to NIH, could help further
facilitate private follow-on dollars to leverage what we're
talking about here, and give you whether or not we can improve
the kind of funding that's necessary to make sure that there's
other sources that can?
Dr. Majumdar. Mr. Congressman, I think we should look at
all the great examples of the past and the lessons learned from
that. I think the NIH foundation is one of them. I think
SEMATECH is another, and there are several other private-public
partnerships that have nurtured technologies through research
from the government-funded stage, which is early stage, the
proof of concept to the later stages.
The medical--the healthcare industry is quite different
from the energy industry. The semiconductor industry is
different from the energy industry as well. So I think we
should take a look at all of these and really figure out what
applies, how can they be adapted to the energy industry and see
if you could create public-private partnerships like the
SEMATECH, like the NIH foundation, but may be adapted to the
energy sector. So I think that's what I would suggest Congress
consider.
Mr. Casten. Thank you, and I yield back.
Chairman Lamb. Thank you. And I recognize Mr. McNerney for
5 minutes.
Mr. McNerney. Well, I thank the Chair, and I thank the
witnesses. And I apologize for missing your testimony this
morning, but ARPA-E is a great program, and I'm a big
supporter. I want to see it continue.
Dr. Williams, could you say if there exists a gap between
the cutting-edge technology that ARPA-E helps foster and the
DOE loan program that commercializes technology? Is there a gap
there?
Dr. Williams. Yes, there certainly is a gap. The projects
coming out of ARPA-E are generally at the earlier stage,
prototypes, just getting ready to put up their first
manufacturing. At the loan program level, basically the
projects that will be supported under loans have to be fully
established with manufacturing and have customers already in
line. So there is a big gap between those two programs.
Mr. McNerney. So there's room for public-private consortia
to help fill that valley of death?
Dr. Williams. Absolutely.
Mr. McNerney. OK. Well, thank you. I'm not sure which one
of you would want to answer this next question, but while ARPA-
E does a lot with carbon capture and sequestration, I'm also
interested in carbon renewal and solar reflection technology
development because I feel it's pretty clear to me we're going
to blow past the 2-degree milestone even if we were to
eliminate carbon emissions today, so we need to develop that
technology. Can you discuss what opportunities and challenges
might exist with ARPA-E in developing that kind of technology?
Dr. Williams. Yes. So ARPA-E has investigated a lot of
different areas for carbon removal. I think in addition to what
one might normally think of as standard approaches such as
taking CO2 from a fossil generation plant, putting
it through some other chemical process to turn it into a
different useful product, that's one typical approach.
There are other very different and more creative approaches
as well. One is learning to breed--use plant breeding to create
plants that actually capture CO2 and store it
permanently in the soil. That's a completely different form of
carbon capture with tremendous benefits to the agricultural
community, to the rangeland community, and to forestry. If we
can select and breed plants that actually take CO2
out of the air, put it in the soil, it improves the soil----
Mr. McNerney. So ARPA-E is a good--OK. What about the
albedo modification technology? Is ARPA-E a place to do that
kind of research?
Dr. Williams. ARPA-E is not specifically invested in that,
although we've had some interesting projects, as I mentioned
earlier, in technologies that are able to take waste heat and
transform it into light that gets sent out into outer space,
and that's a little different than albedo modification, though.
Mr. McNerney. Yes, Dr. Griffith?
Dr. Griffith. I think when you're talking about carbon
removal, you have to think about what material flows humanity
has that are as big as our carbon emissions problem in tonnage
and basically the only materials that we move in the same
quantities are cement and food. So the big opportunities are in
putting the carbon into cement or putting it back into the soil
or putting it into wood products. And I think there is enormous
opportunity for fundamental materials science and applied
materials science in those domains, and it would be a very high
value.
Mr. McNerney. Thank you. So what types of programs would
ARPA-E expand into if the appropriations were expanded, whoever
cares to answer that? What areas are ripe for ARPA-E to move
into?
Dr. Majumdar. Well, I think there are plenty of them. If
you're really looking at the carbon emissions challenge, how
about, you know, really looking at very low cost--at 1/10 the
cost of lithium-ion batteries to store electricity for the
grid, new ways of fission and fusion reactors that will enable
carbon-free electricity, producing hydrogen lower than the cost
that you can produce from shale gas. If you could do that,
that'll be transformative for the oil and gas and the
agricultural industry. Reimagining how to make concrete and
steel with very low-carbon emissions, so you--I can go on and
on. Decarbonizing the food industry and the agriculture sector
and helping and using agriculture, as Dr. Williams pointed out,
to store carbon in the soil. And there are several others you
can go on.
What we're really talking about is a remake of a large
fraction of our economy that is tens of trillions of dollars,
and that's the global competition. This is the electricity, the
automobiles, the steel, concrete, oil, gas, food, agriculture,
et cetera. This is why other countries like China, as Dr. Wall
and others are pointing out, are looking at this opportunity of
the world transitioning to a new energy economy, and this is
why it is so important to invest in ARPA-E right now because
this time of the pivot is where the transitions happen, and we
need to be at this game right now.
Mr. McNerney. Thank you. I'm glad I asked that question. I
yield back.
Chairman Lamb. Thank you. And I recognize now Mr. Beyer for
5 minutes.
Mr. Beyer. Mr. Chairman, thank you very much. I'm sure this
has already been done because I'm a late arrival, but I'd like
to recognize the presence of my friend, the former Chairman of
the Science, Space, and Technology Committee, Mr. Gordon, and
just say that he's better looking in person than his portrait
here on the wall.
Dr. Williams, you know, the President requested $3.5
billion for DARPA, and Congress appropriated roughly $2.5
billion for DARPA. And the President requested $0 for ARPA-E.
Congress did $336 million. And I noticed that in your
leadership, it got to $1 billion over that 5-year period. Do
you have a sense of where it should be right now in terms of
its return on investment and is good for our society? Is $1
billion the right target number for us in Congress looking to
appropriate?
Dr. Williams. I think $1 billion is a good target. I would
say that rationally one could grow that--grow to that $1
billion over a period of several years, probably 5 or a little
bit more years to grow to that level of $1 billion. In that
growth I expect ARPA-E would innovate, develop new approaches,
demonstrate new ways of leveraging, and overall provide a whole
new set of metrics and understanding about what can be
delivered. So I'd say that going to $1 billion and then
assessing and evaluating the success of that project would be a
really excellent target for the House.
Mr. Beyer. Dr. Griffith?
Dr. Griffith. You have a really strong bench in this
company--country in terms of the talent, and they're sitting on
the bench unfortunately and not playing the energy game.
They're running software to sell ads.
Mr. Beyer. Yes.
Dr. Griffith. You know, to use DARPA as an example, it
funded robotics for many, many, many years. Every single
robotics company out there right now has DARPA talent funded by
DARPA in the DNA of all these companies that are doing all of
the big radical transformations in robotics. I think you can
easily justify a DARPA-sized budget for ARPA-E to do the same
for energy. So I think $1 billion is low. It's not nearly
aligned with the scale of the energy transformation challenge,
and I think you have enough people and there are enough ideas
and things worth working on that it would be money well spent.
Mr. Beyer. Yes, one of the things that we heard in this
Committee in years past was that the percentage of excellent-
rated projects submitted to the National Science Foundation
(NSF) and to NIH continues to decline. We're down in the 10
percent ratio, which would argue that we could allocate much
more money there that would still be very well spent. Dr.
Majumdar?
Dr. Majumdar. So given the discussion on the budget, I
mean, I just want to point out--and the comparison to DARPA. So
one can ask what was DARPA's budget when it started off? So
1962 was the first appropriated budget for DARPA. It was
started in 1958, but the first appropriated was 1962. And that
was $246 million in 1962 dollars. And today, if you do the
prorating for that, in today's dollars it's about $2 billion.
So if you are to take this energy transition seriously as DARPA
took in response to the Sputnik threat, I think that this is
the level.
And so what we're asking is the budget to be in the order
of $1 billion, to grow, as Dr. Williams pointed out, to--you
know, within a few years, not to put it suddenly, $1 billion
from $300 million in 1 year would be difficult for it to
handle. But if you could do that, I think that the agency can
then grow, bring in the talent, create new programs, create
these public-private partnerships, and then be at the level of
the DARPA impact that it ought to have.
Mr. Beyer. And, Doctor, you were head of ARPA-E when you
invented the internet, too, right? I'm just kidding.
But Dr. Majumdar, in your testimony you talked about the
transformation that's happening. There have been a number of
interesting articles in the last couple of days about the need
to go to negative net carbon. Is there a better player in the
U.S. economy to help us move to net negative than ARPA-E? Dr.
Griffith?
Dr. Griffith. If DARPA wants to get involved, that would be
good. But both, yes.
Mr. Beyer. And carbon capture, how plausible is removing
carbon for the air or from the ocean?
Dr. Griffith. I think you need to place realistic
expectations on it. It's very, very difficult. When you remove
carbon from the ground and you combine it with oxygen, that's
what happens when you burn it. It expands in volume a lot. So
we can't stuff the carbon dioxide back into the hole it came
from because it's bigger than what came out. And a freespace
floating molecule of carbon dioxide is very hard to capture.
And thermodynamically, it's highly uncertain that's possible. I
think what you should really focus the mind on is a complete
commitment to electrification by nuclear, wind, solar, and
renewables, and the electrification of heat that has to be
done. Otherwise, we're going to be natural gassing our way
through heat forever. And then focus on the materials side of
the economy where there are opportunities to do limited carbon
sinking, which is concrete and cement, wooden, paper, and pulp
industry, agriculture.
Mr. Beyer. Great. Thank you. Mr. Chair, I yield back.
Chairman Lamb. Thank you. That ends our round of
questioning. I did want to--and the Members that have to leave
don't need to stay for this, but I did want to just give the--
first of all, thank the witnesses again for coming all this way
and for the information. There were a number of you throughout
the hearing that I could tell really wanted to jump in on a
certain topic, and we appreciate that. So we could start in
reverse order with Mr. Mills and just ask you to keep it short,
but if there was sort of one small thing that you wanted to
mention that you didn't get out--and don't feel obliged to take
me up on this, but if there's one short thought, we'll just go
down the row. Thank you.
Mr. Mills. Well, I do feel obliged. I'm sure all of the--my
colleagues do. I'd like to just point out that you heard a
common theme, which would be the materials science domains that
are extraordinarily important here, and they're very difficult
to justify on a venture-capital basis. And they're--but they do
hold the potential for magic, but they will require much more
basic science, support for chemists and mechanical engineers,
Saul said physicists, doing things that are very, very
challenging. The NIH may not--it's not NIH but the NSF may not
do, a good role. I'd love to see the budget to go up. I'd like
the DARPA-level budget, but my caveat, I'd like to take it
away, the hard task that you all have from programs that are
short-term focused in other areas of DOE.
Dr. Griffith. Contradicting my colleague, Mr. Mills, and
even contradicting Mr. Gates, you don't need a miracle
technology to go--to decarbonize the U.S. economy. Everything
we know today, everything that's on the table, we just need a
huge commitment to it. I think you should look at--ARPA-E isn't
perfect, but it's better than all the other agencies. I think
the fact that, like DARPA, it can look all over the U.S.
economy for the best ideas is--speaks to its benefit. We need
more research money, R&D money that looks like that. And I
think you really need to understand that at the end of the day
you--that this type of funding is about building your team,
building your bench. DARPA's investment, investing in
communities of people to become the intellectual communities
that form the foundation of AI, the foundation of computing,
the foundation of the internet, the foundation of robotics. And
you need consistent, long-term funding at much, much higher
levels than you have today if you want to have the world-class
bench in energy technology.
Dr. Wall. So being the big industry guy, I will take a
little different approach to my remarks here because I feel
like--you know, I may have a cleaner--a clearer picture of the
global competition and business once the technologies are
developed, who manufactures it, who sells it, who has the jobs,
who makes the money. And I worry a little bit when we get into
this discussion about taking money from one part of the
energy--our energy investment and putting it into another or
being focused internally on the United States, we lose the fact
that China is not the least bit confused about this.
I've spent time over the last 20 or 30 years in Japan, in
Western Europe, in India, in China, and so I'm keenly aware of
what it's like to compete in those markets. And also, as I
mentioned in my testimony, a specific example of what happened
in China where they've decided they want to dominate in EV.
They're not having a debate about whether or not they should be
working on basic research.
I do think that one of the things that we could be doing
with ARPA-E is looking at the enabling technologies that might
be required to make some--to bring some of these into
production. So advanced manufacturing, advanced materials hand-
in-hand with new concepts for new energy. But if the United
States starts focusing on do we put a dollar here or a dollar
there and taking it away from other energy investments, then I
think we could be making a big mistake in setting ourselves
back behind the competition who's not the least bit confused
about this.
Dr. Williams. And I'll just add a last comment, which is
that energy is a very big problem, it's a very old field, but
we have at our command is advances in understanding that allow
us to approach these old problems in completely new ways. And
we really need to be open to out-of-the-box thinking, thinking
very hard about the fact that each new innovation that comes to
us in the past 20 years, vast improvements in our ability to
design and create materials are now making a huge impact in
what we can do with energy systems.
Moving forward, we're seeing advances in biology, the
ability to understand and manipulate organisms. Those will be
important in energy as well. We're seeing advances in
information technology, in artificial intelligence, in machine
learning. All of those things are going to be applied to energy
and create new opportunities, and we need to have the ability
and the flexibility to look at those in new ways about how they
applied energy, and we will continue to expand and find new
opportunities to make a big difference.
Dr. Majumdar. I just want to double down on what Dr. Wall
just said. Since I was not only the Director of ARPA-E, I was
also the Under Secretary for Energy with all the applied
programs reporting to me, and I looked at the budgets as well.
One thing I would say is that it's--one has to think about it
the right way. Any technology, whether it's lithium-ion
batteries or semiconductor chips, there's a learning curve.
That means the more you do, the cheaper it gets, the more--the
better it performs.
And ARPA-E's role, as opposed to the applied energy's role,
are two different roles. The applied energy takes today's
lithium-ion batteries and makes it better and better and better
and better and better, and that's very important. And that's
going down an existing learning curve that's extremely
important. ARPA-E's role is to create entirely new learning
curves that do not exist today, but if they're successful,
they'll be disruptive to the--today's lithium-ion batteries so
that the competition comes from within the United States as
opposed to coming from outside the United States. And this is
the hedging that has been created through the applied programs
and ARPA-E.
And I think one has to look at the whole discretionary
budget and not just the budget of the Department of Energy to
see how do we want to compete in this time of pivoting of a
colossal change in the whole energy industry globally? And I
think you need to do both, because if you don't do, I think
it'll be a mistake for the United States.
Chairman Lamb. Excellent. Thank you again to all the
witnesses, especially for keeping it brief here at the end. We
really appreciate it.
The record will remain open for 2 weeks for additional
statements from the Members and for any additional quick
questions the Committee may ask of the witnesses.
The witnesses are now excused and the hearing is now
adjourned. Thank you.
[Whereupon, at 11:51 a.m., the Subcommittee was adjourned.]

Appendix I

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