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	<title> - THE FUTURE OF ARPA-E</title>
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	[House Hearing, 116 Congress]
	[From the U.S. Government Publishing Office]


	THE FUTURE OF ARPA-E

	=======================================================================

	HEARING

	BEFORE THE

	SUBCOMMITTEE ON ENERGY

	COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
	HOUSE OF REPRESENTATIVES

	ONE HUNDRED SIXTEENTH CONGRESS

	FIRST SESSION

	__________

	FEBRUARY 26, 2019

	__________

	Serial No. 116-2

	__________

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


	[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


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


	__________


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

	-----------------------------------------------------------------------------------
	For sale by the Superintendent of Documents, U.S. Government Publishing Office,
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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
	------

	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

	----------


	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.
	[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	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:]
	[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

	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:]
	[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	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:]
	[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	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:]
	[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	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:]
	[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	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:]
	[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	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:]
	[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	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 CO<INF>2</INF> 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 CO<INF>2</INF> 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 CO<INF>2</INF>
	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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	Additional Material for the Record
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