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+
+ - THE FUTURE OF ARPA-E
+
+[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,
+http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
+U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).E-mail,
+[email protected].
+
+ 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 CO2 from a fossil generation plant, putting
+it through some other chemical process to turn it into a
+different useful product, that's one typical approach.
+ There are other very different and more creative approaches
+as well. One is learning to breed--use plant breeding to create
+plants that actually capture CO2 and store it
+permanently in the soil. That's a completely different form of
+carbon capture with tremendous benefits to the agricultural
+community, to the rangeland community, and to forestry. If we
+can select and breed plants that actually take CO2
+out of the air, put it in the soil, it improves the soil----
+ Mr. McNerney. So ARPA-E is a good--OK. What about the
+albedo modification technology? Is ARPA-E a place to do that
+kind of research?
+ Dr. Williams. ARPA-E is not specifically invested in that,
+although we've had some interesting projects, as I mentioned
+earlier, in technologies that are able to take waste heat and
+transform it into light that gets sent out into outer space,
+and that's a little different than albedo modification, though.
+ Mr. McNerney. Yes, Dr. Griffith?
+ Dr. Griffith. I think when you're talking about carbon
+removal, you have to think about what material flows humanity
+has that are as big as our carbon emissions problem in tonnage
+and basically the only materials that we move in the same
+quantities are cement and food. So the big opportunities are in
+putting the carbon into cement or putting it back into the soil
+or putting it into wood products. And I think there is enormous
+opportunity for fundamental materials science and applied
+materials science in those domains, and it would be a very high
+value.
+ Mr. McNerney. Thank you. So what types of programs would
+ARPA-E expand into if the appropriations were expanded, whoever
+cares to answer that? What areas are ripe for ARPA-E to move
+into?
+ Dr. Majumdar. Well, I think there are plenty of them. If
+you're really looking at the carbon emissions challenge, how
+about, you know, really looking at very low cost--at 1/10 the
+cost of lithium-ion batteries to store electricity for the
+grid, new ways of fission and fusion reactors that will enable
+carbon-free electricity, producing hydrogen lower than the cost
+that you can produce from shale gas. If you could do that,
+that'll be transformative for the oil and gas and the
+agricultural industry. Reimagining how to make concrete and
+steel with very low-carbon emissions, so you--I can go on and
+on. Decarbonizing the food industry and the agriculture sector
+and helping and using agriculture, as Dr. Williams pointed out,
+to store carbon in the soil. And there are several others you
+can go on.
+ What we're really talking about is a remake of a large
+fraction of our economy that is tens of trillions of dollars,
+and that's the global competition. This is the electricity, the
+automobiles, the steel, concrete, oil, gas, food, agriculture,
+et cetera. This is why other countries like China, as Dr. Wall
+and others are pointing out, are looking at this opportunity of
+the world transitioning to a new energy economy, and this is
+why it is so important to invest in ARPA-E right now because
+this time of the pivot is where the transitions happen, and we
+need to be at this game right now.
+ Mr. McNerney. Thank you. I'm glad I asked that question. I
+yield back.
+ Chairman Lamb. Thank you. And I recognize now Mr. Beyer for
+5 minutes.
+ Mr. Beyer. Mr. Chairman, thank you very much. I'm sure this
+has already been done because I'm a late arrival, but I'd like
+to recognize the presence of my friend, the former Chairman of
+the Science, Space, and Technology Committee, Mr. Gordon, and
+just say that he's better looking in person than his portrait
+here on the wall.
+ Dr. Williams, you know, the President requested $3.5
+billion for DARPA, and Congress appropriated roughly $2.5
+billion for DARPA. And the President requested $0 for ARPA-E.
+Congress did $336 million. And I noticed that in your
+leadership, it got to $1 billion over that 5-year period. Do
+you have a sense of where it should be right now in terms of
+its return on investment and is good for our society? Is $1
+billion the right target number for us in Congress looking to
+appropriate?
+ Dr. Williams. I think $1 billion is a good target. I would
+say that rationally one could grow that--grow to that $1
+billion over a period of several years, probably 5 or a little
+bit more years to grow to that level of $1 billion. In that
+growth I expect ARPA-E would innovate, develop new approaches,
+demonstrate new ways of leveraging, and overall provide a whole
+new set of metrics and understanding about what can be
+delivered. So I'd say that going to $1 billion and then
+assessing and evaluating the success of that project would be a
+really excellent target for the House.
+ Mr. Beyer. Dr. Griffith?
+ Dr. Griffith. You have a really strong bench in this
+company--country in terms of the talent, and they're sitting on
+the bench unfortunately and not playing the energy game.
+They're running software to sell ads.
+ Mr. Beyer. Yes.
+ Dr. Griffith. You know, to use DARPA as an example, it
+funded robotics for many, many, many years. Every single
+robotics company out there right now has DARPA talent funded by
+DARPA in the DNA of all these companies that are doing all of
+the big radical transformations in robotics. I think you can
+easily justify a DARPA-sized budget for ARPA-E to do the same
+for energy. So I think $1 billion is low. It's not nearly
+aligned with the scale of the energy transformation challenge,
+and I think you have enough people and there are enough ideas
+and things worth working on that it would be money well spent.
+ Mr. Beyer. Yes, one of the things that we heard in this
+Committee in years past was that the percentage of excellent-
+rated projects submitted to the National Science Foundation
+(NSF) and to NIH continues to decline. We're down in the 10
+percent ratio, which would argue that we could allocate much
+more money there that would still be very well spent. Dr.
+Majumdar?
+ Dr. Majumdar. So given the discussion on the budget, I
+mean, I just want to point out--and the comparison to DARPA. So
+one can ask what was DARPA's budget when it started off? So
+1962 was the first appropriated budget for DARPA. It was
+started in 1958, but the first appropriated was 1962. And that
+was $246 million in 1962 dollars. And today, if you do the
+prorating for that, in today's dollars it's about $2 billion.
+So if you are to take this energy transition seriously as DARPA
+took in response to the Sputnik threat, I think that this is
+the level.
+ And so what we're asking is the budget to be in the order
+of $1 billion, to grow, as Dr. Williams pointed out, to--you
+know, within a few years, not to put it suddenly, $1 billion
+from $300 million in 1 year would be difficult for it to
+handle. But if you could do that, I think that the agency can
+then grow, bring in the talent, create new programs, create
+these public-private partnerships, and then be at the level of
+the DARPA impact that it ought to have.
+ Mr. Beyer. And, Doctor, you were head of ARPA-E when you
+invented the internet, too, right? I'm just kidding.
+ But Dr. Majumdar, in your testimony you talked about the
+transformation that's happening. There have been a number of
+interesting articles in the last couple of days about the need
+to go to negative net carbon. Is there a better player in the
+U.S. economy to help us move to net negative than ARPA-E? Dr.
+Griffith?
+ Dr. Griffith. If DARPA wants to get involved, that would be
+good. But both, yes.
+ Mr. Beyer. And carbon capture, how plausible is removing
+carbon for the air or from the ocean?
+ Dr. Griffith. I think you need to place realistic
+expectations on it. It's very, very difficult. When you remove
+carbon from the ground and you combine it with oxygen, that's
+what happens when you burn it. It expands in volume a lot. So
+we can't stuff the carbon dioxide back into the hole it came
+from because it's bigger than what came out. And a freespace
+floating molecule of carbon dioxide is very hard to capture.
+And thermodynamically, it's highly uncertain that's possible. I
+think what you should really focus the mind on is a complete
+commitment to electrification by nuclear, wind, solar, and
+renewables, and the electrification of heat that has to be
+done. Otherwise, we're going to be natural gassing our way
+through heat forever. And then focus on the materials side of
+the economy where there are opportunities to do limited carbon
+sinking, which is concrete and cement, wooden, paper, and pulp
+industry, agriculture.
+ Mr. Beyer. Great. Thank you. Mr. Chair, I yield back.
+ Chairman Lamb. Thank you. That ends our round of
+questioning. I did want to--and the Members that have to leave
+don't need to stay for this, but I did want to just give the--
+first of all, thank the witnesses again for coming all this way
+and for the information. There were a number of you throughout
+the hearing that I could tell really wanted to jump in on a
+certain topic, and we appreciate that. So we could start in
+reverse order with Mr. Mills and just ask you to keep it short,
+but if there was sort of one small thing that you wanted to
+mention that you didn't get out--and don't feel obliged to take
+me up on this, but if there's one short thought, we'll just go
+down the row. Thank you.
+ Mr. Mills. Well, I do feel obliged. I'm sure all of the--my
+colleagues do. I'd like to just point out that you heard a
+common theme, which would be the materials science domains that
+are extraordinarily important here, and they're very difficult
+to justify on a venture-capital basis. And they're--but they do
+hold the potential for magic, but they will require much more
+basic science, support for chemists and mechanical engineers,
+Saul said physicists, doing things that are very, very
+challenging. The NIH may not--it's not NIH but the NSF may not
+do, a good role. I'd love to see the budget to go up. I'd like
+the DARPA-level budget, but my caveat, I'd like to take it
+away, the hard task that you all have from programs that are
+short-term focused in other areas of DOE.
+ Dr. Griffith. Contradicting my colleague, Mr. Mills, and
+even contradicting Mr. Gates, you don't need a miracle
+technology to go--to decarbonize the U.S. economy. Everything
+we know today, everything that's on the table, we just need a
+huge commitment to it. I think you should look at--ARPA-E isn't
+perfect, but it's better than all the other agencies. I think
+the fact that, like DARPA, it can look all over the U.S.
+economy for the best ideas is--speaks to its benefit. We need
+more research money, R&D money that looks like that. And I
+think you really need to understand that at the end of the day
+you--that this type of funding is about building your team,
+building your bench. DARPA's investment, investing in
+communities of people to become the intellectual communities
+that form the foundation of AI, the foundation of computing,
+the foundation of the internet, the foundation of robotics. And
+you need consistent, long-term funding at much, much higher
+levels than you have today if you want to have the world-class
+bench in energy technology.
+ Dr. Wall. So being the big industry guy, I will take a
+little different approach to my remarks here because I feel
+like--you know, I may have a cleaner--a clearer picture of the
+global competition and business once the technologies are
+developed, who manufactures it, who sells it, who has the jobs,
+who makes the money. And I worry a little bit when we get into
+this discussion about taking money from one part of the
+energy--our energy investment and putting it into another or
+being focused internally on the United States, we lose the fact
+that China is not the least bit confused about this.
+ I've spent time over the last 20 or 30 years in Japan, in
+Western Europe, in India, in China, and so I'm keenly aware of
+what it's like to compete in those markets. And also, as I
+mentioned in my testimony, a specific example of what happened
+in China where they've decided they want to dominate in EV.
+They're not having a debate about whether or not they should be
+working on basic research.
+ I do think that one of the things that we could be doing
+with ARPA-E is looking at the enabling technologies that might
+be required to make some--to bring some of these into
+production. So advanced manufacturing, advanced materials hand-
+in-hand with new concepts for new energy. But if the United
+States starts focusing on do we put a dollar here or a dollar
+there and taking it away from other energy investments, then I
+think we could be making a big mistake in setting ourselves
+back behind the competition who's not the least bit confused
+about this.
+ Dr. Williams. And I'll just add a last comment, which is
+that energy is a very big problem, it's a very old field, but
+we have at our command is advances in understanding that allow
+us to approach these old problems in completely new ways. And
+we really need to be open to out-of-the-box thinking, thinking
+very hard about the fact that each new innovation that comes to
+us in the past 20 years, vast improvements in our ability to
+design and create materials are now making a huge impact in
+what we can do with energy systems.
+ Moving forward, we're seeing advances in biology, the
+ability to understand and manipulate organisms. Those will be
+important in energy as well. We're seeing advances in
+information technology, in artificial intelligence, in machine
+learning. All of those things are going to be applied to energy
+and create new opportunities, and we need to have the ability
+and the flexibility to look at those in new ways about how they
+applied energy, and we will continue to expand and find new
+opportunities to make a big difference.
+ Dr. Majumdar. I just want to double down on what Dr. Wall
+just said. Since I was not only the Director of ARPA-E, I was
+also the Under Secretary for Energy with all the applied
+programs reporting to me, and I looked at the budgets as well.
+One thing I would say is that it's--one has to think about it
+the right way. Any technology, whether it's lithium-ion
+batteries or semiconductor chips, there's a learning curve.
+That means the more you do, the cheaper it gets, the more--the
+better it performs.
+ And ARPA-E's role, as opposed to the applied energy's role,
+are two different roles. The applied energy takes today's
+lithium-ion batteries and makes it better and better and better
+and better and better, and that's very important. And that's
+going down an existing learning curve that's extremely
+important. ARPA-E's role is to create entirely new learning
+curves that do not exist today, but if they're successful,
+they'll be disruptive to the--today's lithium-ion batteries so
+that the competition comes from within the United States as
+opposed to coming from outside the United States. And this is
+the hedging that has been created through the applied programs
+and ARPA-E.
+ And I think one has to look at the whole discretionary
+budget and not just the budget of the Department of Energy to
+see how do we want to compete in this time of pivoting of a
+colossal change in the whole energy industry globally? And I
+think you need to do both, because if you don't do, I think
+it'll be a mistake for the United States.
+ Chairman Lamb. Excellent. Thank you again to all the
+witnesses, especially for keeping it brief here at the end. We
+really appreciate it.
+ The record will remain open for 2 weeks for additional
+statements from the Members and for any additional quick
+questions the Committee may ask of the witnesses.
+ The witnesses are now excused and the hearing is now
+adjourned. Thank you.
+ [Whereupon, at 11:51 a.m., the Subcommittee was adjourned.]
+
+ Appendix I
+
+ ----------
+
+
+ Additional Material for the Record
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+