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Cultivating Bipartisan Support for Biofuel From Germs

Cultivating Bipartisan Support for Biofuel From Germs

People attending a Washington event this week may witness something almost unheard of in political circles: Republicans praising a clean-energy program supported by President Barack Obama.

The Advanced Research Projects Agency - Energy (ARPA-E), originally funded through the 2009 economic stimulus program, is holding its annual summit to showcase its awardees, who collectively have won about $770 million in government money in the past 3 1/2 years. The projects include efforts to develop a "flow battery" to store energy, to improve the efficiency of the electric grid, and to modify an E. coli strain that can produce biofuels.

Where a separate, stimulus-funded $16 billion loan program that backed Solyndra LLC has drawn withering criticism from Republicans, the smaller sums spread over both Democratic and Republican districts have helped ARPA-E -- part of the U.S. Energy Department -- largely avoid the same level of scrutiny, advocates say.

"Small grants to help develop promising new technologies are a far better use of limited government funds than most of the other energy-related funding that was embedded in the 2009 stimulus," said Megan Moskowitz, a spokeswoman for Senator Lisa Murkowski of Alaska, the top Republican on the Senate energy committee.

Republican Speakers

Murkowski is one of several lawmakers scheduled to speak at the summit, which runs today through Feb. 27. Senator Lamar Alexander, a Tennessee Republican who has criticized subsides for wind energy but favors energy-research spending, is also speaking, as are Democratic Senators Ron Wyden of Oregon, the chairman of the Senate Energy and Natural Resources Committee, and Senator Chris Coons of Delaware.

Executives from General Electric Co., Google Inc. and Siemens AG are scheduled to attend. Tesla Motors Inc. Chief Executive Officer Elon Musk and energy investor T. Boone Pickens will also address attendees.

Clean-energy advocates say ARPA-E can show the benefit of using public money to support private efforts, at a time when the partisan rift on clean energy has widened.

"Research is one of few things all parties and sectors agree on in the energy space," Mark Muro, a clean-energy expert at the Brookings Institution in Washington, said in an e-mail. ARPA-E represents "an important meeting point for a lot of stakeholders."

DARPA Model

The agency is modeled after the Defense Advanced Research Projects Agency, or DARPA, which supported early research into the Internet, among other projects.

While Congress authorized the energy version in 2007, the program didn't receive money until the 2009 economic stimulus provided $400 million to be spent over two years.

Like the defense effort, ARPA-E is designed to back high-risk, high-reward projects, through grants and with technical expertise of staff hired from universities and investment firms for as long as three years.

For example, ARPA-E awarded a $6.7 million grant to Ginkgo Bioworks, a Boston company, to research how to use E. coli to turn carbon dioxide into biofuels. The company says the process can may be more efficient than making ethanol, which relies on photosynthesis to grow the crops that then get turned into the fuel.

Cheryl Martin, the agency's deputy director and a former executive at Rohm and Haas Co., a unit of Dow Chemical Co., said in an interview that her mission is to move technologies to use in commercial products.

'Catalytic Funding'

As part of that effort, ARPA-E officials work to develop contacts with larger companies to take over support for the technology efforts, she said.

"Fundamentally what ARPA-E is about is the catalytic funding of energy innovation," Martin said in an interview at ARPA-E's Washington office overlooking the Potomac River. "Our goal is to fund things well and as efficiently as we can across that three years so that then we can have it move on to something else. If it's a 36-month grant, what's going to happen in the 37th month?"

Grants range from $250,000 to $10 million, Andrew Gumbiner, an ARPA-E spokesman, said in an e-mail. As of November, the agency had funded 285 projects led by government agencies, universities and companies, according to its website.

The fact that ARPA-E employees themselves are temporary has helped the agency avoid the bureaucratic stasis that can befuddle research efforts in other branches of the government, said Joshua Freed, vice president for clean energy at The Third Way, a Washington-based group that says it promotes bipartisan public policies.

Innovation Partnership

"It's the little agency that can," Freed said in an interview. "It's a real-world, real-time seminar on why we need a public-private partnership on innovation."

Freed and other ARPA-E supporters also credit Arun Majumdar, ARPA-E's first director who has since left for Google, for selling the program on Capitol Hill.

ARPA-E hasn't been immune to criticism from Congress, and the criticism could intensify as budgets get tighter. Lawmakers including Representative Paul Broun, a Georgia Republican and chairman of the House Science Committee's oversight panel, have said the program shouldn't be funding projects that have already received private money.

Nicolas Loris, who studies energy policy at the Heritage Foundation, a Washington-based group that promotes conservative public policies, said some congressional Republicans think the agency has veered into a role best left to private investors.

Basic Research

"It needs to stick to the model of supporting basic research that the private sector wouldn't be doing," Loris said.

ARPA-E is "quickly becoming a microcosm of the larger problems associated with the entire Department of Energy," Loris wrote in a blog on the Heritage website in June.

Moskowitz, Murkowski's spokeswoman, said in an e-mail that the tight budget would increase scrutiny for all programs, including research funding.

Still, Murkowski "does believe that ARPA-E enjoys relatively broad support," Moskowitz said.

Unlike the loan guarantee program, which spread $16 billion over 26 mostly solar- and wind-energy projects, ARPA-E has handed out much smaller sums to technologies in more than a dozen categories, from smart grids and thermal storage programs to "breakthrough" biofuels.

Energy Storage

For example, Primus Power, an energy-storage company in Hayward, California, used its $2 million ARPA-E grant to change a critical component of its liquid battery design, increasing its efficiency.

"We switched the design thanks to ARPA-E funding," Tom Stepien, Primus Power's chief executive officer, said in an interview.

While Primus has won about $15 million in state and federal grants, and $17 million in private financing, the ARPA-E financing came at a critical time, he said.

"We didn't have extra resources" to switch the design, Stepien said.

Envia Systems, in Newark, California, used its $4 million ARPA-E grant to improve its battery cathode. The technology, which is being tested now by automakers, can double the range of electric-car batteries, Atul Kapadia, the company's CEO, said in an interview.

Dry Well

Envia also received about $11 million in venture capital backing prior to the Energy Department grant. But the venture capital "well had run dry" when it got the money from ARPA-E, he said. Investors were more interested in dot-coms that promised quicker returns, he said.

The Envia-developed technology could be in use in cars by 2015, he said.

Smart Wire Grid in Oakland, California, won a $4.4 million grant to develop a device to control the flow over power lines, which would help intermittent renewable power sources like wind and solar power travel on the grid.

The company is now working with the Tennessee Valley Authority to test the system, Martin said.

"Current flows on path of least resistance," Martin said. "In order to control the grid, you have to have the ability to move the current more pro-actively through the wires."

Grants have also gone to companies or universities in Arizona, Arkansas, Michigan, North Carolina, Ohio and other states.

"They've done it by spreading the wealth," said Matthew Stepp, a senior policy analyst at the Information Technology & Innovation Foundation, a research institute based in Washington. "The network they've built is broad and deep."

Copyright 2013 Bloomberg

Lead image: Funny bacteria, via Shutterstock

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