Jun 10, 2010 08:15 America/Denver

Group urges scale-up in investment, systemic reforms to create jobs, address national security, solve environmental challenges Call for action in meetings with White House and Congressional leaders

WASHINGTON, June 10 /PRNewswire/ — A group of America’s top business executives today released a plan to make America a global leader in energy technology innovation, and in meetings at the White House and with Congressional leaders called for urgent action to begin the national transition to clean, affordable, and secure supplies of energy.

The American Energy Innovation Council (AEIC) — whose members include Bill Gates, chairman and former chief executive of Microsoft; Norm Augustine, former chairman of Lockheed Martin; Ursula Burns, chairman and chief executive of Xerox; John Doerr, partner at Kleiner Perkins; Chad Holliday, chairman of Bank of America and former CEO of DuPont; Jeff Immelt, chief executive of GE; and Tim Solso, chairman and chief executive of Cummins — said in its report, “A Business Plan for America’s Energy Future,” that reforming and strengthening U.S. investment in energy innovation is the most critical element to securing America’s future.

The full report and supporting documents and other materials can be found at www.americanenergyinnovation.org.

“The world faces many challenges, but none more important than taking immediate and decisive action to develop new, inexpensive clean-energy sources that avoid the negative effects of climate change,” Gates said in releasing the report today. “Low-cost clean energy is the single most important way to lift poor countries out of poverty and create more stable societies. The whole world would benefit from this, and the United States can and should lead the way. The time for action is now.”

“We must reinvent our energy future,” said Chad Holliday, who serves as AEIC chairman. “A giant leap in energy technology investments and reform of our current system can make America a global leader in what will be the largest new market of the 21st Century. We have seen huge dividends from similar American investments before — in information technology, defense technology, and medical technology. But up until now, energy investments have gotten short shrift. That has to change if we are to control our energy future. This has to be at the top of America’s agenda.”

The American Energy Innovation Council plan contains five recommendations:

1: Create an independent National Energy Strategy Board

The United States does not have a coherent national energy strategy. Without such a strategy, there is no way to assess the effectiveness of existing energy policies, nor is there a logical framework for the development of new energy technologies. The result of this neglect is reflected in our nation’s history — with oil-driven recessions, environmental degradation, trade deficits, national security problems, and increasing CO2 emissions.

In order to seriously address our energy future, the AEIC recommends the creation of a Congressionally mandated Energy Strategy Board charged with (1) developing and monitoring a National Energy Plan for Congress and the executive branch, and (2) oversight of a New Energy Challenge Program (see recommendation #5).

“Instead of a series of fractured challenges and solutions, we should manage the future of our energy system as an integrated whole, and build a pipeline of technologies that will solve the serious problems our world is facing,” said Ursula Burns, chief executive of Xerox. “These recommendations are the beginning of such a solution. I urge Congress and the President to act on them.”

2: Increase annual investments in clean energy RD&D by $11 billion, to $16 billion per year

The AEIC members recommend that sizable, sustained increases in spending on research, development and deployment (RD&D) of clean energy technologies are necessary to maintain our competitive edge and keep our economy strong. Government investments of $16 billion per year – an increase of $11 billion over current annual investments of about $5 billion – is the minimum level required. For comparison, the U.S. government currently spends approximately $30 billion each year on health research and more than $80 billion on defense research and development. The public investment called for by AEIC would bring U.S. energy investment in line with those of our trading partners and competitors.

John Doerr, partner at Kleiner Perkins, said, “When our company shifted our attention to clean energy, we found the innovation cupboard was close to bare. America has simply neglected to support serious energy innovation. My partners and I found the best fuel cells, the best energy storage, and the best wind technologies were all born outside of the United States. Other countries are investing huge amounts in these fields. Without innovation, we cannot build great energy companies. We need to restock the cupboard, or be left behind.”

3: Create Centers of Excellence in Energy Innovation

In the healthcare, information technology, and defense fields, critical technologies have achieved large-scale market success through multi-disciplinary collaboration among institutions in the private and public sectors. Technology innovation requires expensive equipment, well-trained scientists, multi-year time horizons, and flexibility in allocating funds. This can be done most efficiently and effectively if the institutions engaged in innovation are located in close proximity to each other, share operational objectives, and are accountable to each other for results.

The AEIC recommends the creation of centers of excellence in energy innovation, structured along the lines described above. These centers can drive down the cost of technologies and accelerate their deployment. To function effectively and deliver real results, each of these centers will require annual funding in the range of $150 million to $250 million as a part of the $16 billion total.

Tim Solso, CEO of Cummins said, “Creating regional centers of excellence is central to incubating innovation across different fields and institutions. These can be our new hubs of invention. Our company has found that we win in the market by using our technical innovation to meet public standards while also developing products that meet the needs of our customers. The entire American economy can benefit from similar investments in innovation to help address our energy challenges.”

4: Fund ARPA-E at $1 billion per year

The creation of ARPA-E has been a significant development for energy innovation. ARPA-E is challenging innovators to come up with truly novel ideas and “game changers.” The program has high potential for long-term success, but only if it is given the autonomy, budget, clear signals of support, and ability to implement needed projects. It will need long-horizon funds on a scale commensurate with its goals, and a life extension beyond the current federal stimulus. AEIC recommend that a $1 billion annual commitment would be a wise investment as a part of the $16 billion total.

“Ultimately, energy innovation is a matter of national security, and must be treated that way by Congress and the Administration,” said Norm Augustine, former chairman of Lockheed Martin and former Undersecretary of the Army. “This is true because disruptions in the supply of energy and environmental change are among the most likely causes of future military conflicts. DARPA was a huge success in creating high payoff returns on investments in military technologies. ARPA-E — its energy equivalent — can have a similar transformative impact on energy technology, but it must receive adequate funding.”

5: Establish a New Energy Challenge Program for large-scale demonstration projects

America’s energy innovation system lacks a mechanism to turn large-scale ideas or prototypes into commercial-scale facilities. AEIC recommends the creation of a program to fund, build, and accelerate the commercialization of advanced energy technologies.

This program should be structured as a joint venture between the federal government and the energy industry, and would operate as an independent corporation outside of the federal government. It would focus on the transition from pre-commercial, large-scale energy systems to integrated, full-size system tests. The program should be co-funded by the public and private sectors at an initial level of $20 billion over 10 years, with a single federal appropriation.

The Need for Complementary Policies

The AEIC plan also notes “the need for complementary energy policies to drive market adoption of new technologies. A vigorous demand signal will increase the intensity of research, add large private-sector commitments, reduce barriers between the lab and market, and ensure technologies perform better and cost less over time. The United States will not succeed in this field without policies to ensure there are vibrant markets for clean energy technologies. Those policies may include some combination of a price or a cap on CO2, a clean energy or renewable energy portfolio requirement, or technology performance standards. The effect of such policies should be to create a large, sustained market for new energy technology. Our nation cannot succeed without it.”

The report states that increased investment for energy innovation is such a high national priority that it should be undertaken even in the midst of tight federal budgets. The group also notes that options for generating new revenue for energy innovation investment from the energy sector include reductions in subsidies for fossil fuels, license fees for offshore oil and natural gas production, creating an oil import fee, increasing the gas tax or putting a price on carbon emissions. The report does not specifically advocate any of these approaches.

“The U.S. is falling behind because we don’t have the markets or the will – our policies are shortsighted and our markets aren’t set up to reward energy innovation. We have the power to transform our energy future and address many of our economic, energy security and climate challenges with the right policy clarity and robust market demand. You have to do both to drive innovation and compete,” said Jeff Immelt, CEO of GE.

“I am convinced that the right technologies and the right policies we can solve our energy and climate challenges,” said Bill Gates. “But we need a much more serious commitment to do so.”

AEIC Chair Chad Holliday said, “During my time at DuPont, when science linked CFC use and ozone depletion, we knew the world had to change the model. DuPont used this challenge to invent entire new businesses. The United States can do the same to meet our energy and climate challenges. But we must begin investing at a much larger scale now.”

American Energy Innovation Council

Video: http://www.prnewswire.com/news-releases/american-business-leaders-call-for-revolution-in-energy-technology-innovation-96017184.html

Source: The American Energy Innovation Council

CONTACT: Paul Bledsoe, +1-202-204-2403, Jim Luetkemeyer,
+1-202-480-9121

Web Site: http://www.americanenergyinnovation.org/

5.04.2010

Guest Post by Jack Lundee – follower of all things green and progressive.

Emission reduction, green spaces, and renewable energy are some of the most talked about topics of the 21^st century. With the recent passing of Earth Day, and the undying rally for improved green efforts worldwide, some industry giants are making a large footprint.

Oddly enough, it isn’t the work of highly regarded green organizations (i.e. – Greenpeace and Global Green USA) that’s capturing everybody’s attention, but surprisingly enough extremely large technology companies, like Google for instance. Recently, Google stated that it had invested $38.8 million in two North Dakota wind farms [1]. – “On Friday we made our first direct investment in a utility-scale renewable energy project — two wind farms that generate 169.5 megawatts of power, enough to power more than 55,000 homes.” Rick Needeham, (Google’s Green Business Operations Manager), wrote within that Google is greatly interested in discovering new opportunities to invest in renewable energy projects that really ”push the envelope.”

It wasn’t enough for Google to be the world’s biggest search and advertising company; it’s evident that they truly do want to power the globe. Although, this isn’t the first time that Google has made a large investment in green energy. Back in 2007, Google dove into clean-tech fray, clearly stating that it would spend hundreds of millions of dollars to create alternative energy sources that are cheaper than coal, which as we know it is the world’s dominant fuel source and pollutant. They included that their effort RECTC (Renewable Energy Cheaper Than Coal), would consist of wind power technologies, solar power, and more.

It’s sometimes tough to make the connection between search and alternative energy, but with Google at the forefront of campaigns like this, it certainly makes me feel a bit more comfortable. With enough energy to power nearly 55,000 homes, Google is making a tremendous impact on sustainability for our planet. Non-profits and other similar collaborative units have been doing their part in supporting green initiatives since the beginning of the movement. For instance, Niranjan Shah and Globetrotters Engineering Corporation work closely with the USGBC (US Green Building Council) to improve building standards and provide LEED based architecture. Although, it’s the unpredictable, long tail efforts of cash cows like Google that are helping substantially. Much like the individual, businesses must play their roles in promoting sustainability.

Google entered into green technology development in startup companies and its own consumer energy tracking tools, although, they hadn’t quite moved into actual working energy fabrication. This could infer future investments by Google, perhaps leading to the acquisition of their own wind powered turbine that would facilitate their own business needs.

Industry News:

Backlash: Senate may tighten Buy American rules for renewables, limit EPA authority

The Senate has seen action on two key proposals in the areas of clean energy and climate change.

American Renewable Energy Jobs Act

On March 2, 2010, U.S. Senators Charles E. Schumer (D-NY), Bob Casey (D-PA), Sherrod Brown (D-OH) and Jon Tester (D-MT) requested that stimulus spending on a renewable energy program stop until rules are in place to ensure that the grantees of federal funding for these projects spend that money on domestic construction materials. The senators opined that some three-quarters of the $2 billion spent on wind energy through the stimulus went to foreign companies.

“A critical Recovery Act priority is investment in the domestic renewable and clean energy industry, not investment in foreign manufacturers,” the senators wrote in a letter to Treasury Secretary Timothy Geithner. The letter requested a moratorium on the distribution of section 1603 grant funding and award of any further grants until an amendment to the stimulus package passes. Section 1603 of the Recovery Act allocates 30 percent cash grants for energy property in lieu of federal tax credits.

The following day, the senators introduced legislation, called the American Renewable Energy Jobs Act, requiring that stimulus funds be given only to those clean energy projects that rely on materials manufactured in the United States and/or create a majority of jobs in the country.

The bill would amend the American Recovery and Reinvestment Act, which released $800 billion designed to jumpstart the U.S. economy. The new amendment would require the U.S. Departments of Energy and the Treasury to award stimulus grant funds only to clean energy projects that create or preserve jobs in the United States.

“Buy American” legislation intended to benefit the U.S. economy and employment through the use of U.S. government funds has been in place for decades with respect to U.S. government contracts.

Because it is largely impossible for high technology or complex manufactured goods to be made exclusively in the United States, the Recovery Act’s original limitation on construction projects was expanded to permit the acquisition of steel and manufactured goods from the United States’ trading partners—which do not currently include China.

The Recovery Act’s “Buy American” provision did not apply to Section 1603 projects and was directed to construction and construction materials used on public works. The American Renewable Energy Jobs Act proposes to expand the “Buy American” provision to include restrictions on all U.S. trading partners, and to extend the provision to private enterprises.

Senator Schumer has raised similar objections in the past. Last fall he protested that a $1.5 billion Texas wind power project would create 3,000 jobs in China but only 300 in the United States. The developers of the wind project responded by planning a wind turbine factory in the United States, which is projected to create 1,000 new jobs.

The Department of Energy, which administers the clean energy stimulus program, stated that suspending the clean energy grants program now would require immediate layoffs at U.S. manufacturing plants.

In related news, the DOE awarded another $100 million in grants under its ARPA-E program this week, which represents the third round in the $400 million initiative to accelerate innovative projects that could transform U.S. energy policy.

The Treasury has not commented on the proposed legislation, but has previously released responses to frequently asked questions that explicitly state that “Buy American” provisions do not apply to section 1603 grants.

EPA’s Greenhouse Gas Regulatory Authority

In an interesting development regarding climate change, Senator Jay Rockefeller (D-WV) introduced legislation on March 4, 2010, to place a two-year moratorium on the Environmental Protection Agency’s (EPA’s) authority to regulate carbon dioxide emissions from stationary sources such as factories and refineries. Rockefeller’s bill is one of several recent congressional efforts to limit the EPA’s efforts to address climate change under the Clean Air Act (CAA).

Congressional efforts to curb the EPA’s authority to regulate such emissions stem from the EPA’s endangerment finding in December 2009, which stated that greenhouse gases endanger public health and the environment.

The finding followed the 2007 Supreme Court of the United States decision that greenhouse gases satisfied the CAA definition of air pollutants. Upon issuance of the endangerment finding, the EPA found that it had the authority to finalize greenhouse gas emissions regulations under the CAA.

The finding effectively indicates that the EPA will pursue a significant amount of new regulation affecting emissions from numerous industrial sources under the provisions of the CAA.

In September 2009, the EPA also pushed forward with addressing climate change under its CAA authority by issuing final, mandatory greenhouse gas reporting rules and releasing proposed rules that would require certain stationary sources to obtain CAA construction and operating permits under the EPA’s New Source Review.

“This legislation…[will give] Congress the time it needs to address an issue as complicated and expansive as our energy future. Congress, not the EPA, must be the ideal decision-maker on such a challenging issue,” Rockefeller said. President Obama has repeatedly stated that Congress is the preferred authority to set mandatory, U.S.-wide limits on greenhouse gas emissions, but the EPA is poised to move forward with regulation in the absence of legislation passing this year.

While Republicans have made similar efforts to curb the EPA’s regulations on climate change, Rockefeller’s effort is significant because it may highlight growing dissent among Democrats over the prospect of EPA’s efforts to address climate change without explicit congressional approval or legislation addressing greenhouse gas regulation.

Holly Roth is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, D.C. office. She provides legal representation, litigation and advice with respect to a broad range of federal, state and local government contract, subcontract and related regulatory compliance issues. Ms. Roth can be reached at +1 202 756 8396 or hroth@mwe.com.

Brandon H. Barnes is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, D.C., office. He focuses his practice on environmental law. Mr. Barnes can be reached at +1 202 756 8130 or bbarnes@mwe.com.