Will ARPA-E Receive Funding?

A year after it first received funding, the Advanced Research Projects Agency for Energy (ARPA-E) got high marks from the congressional committee that spearheaded its creation in its “first annual checkup.” In a hearing of the House committee on Science and Technology, the new agency, which is designed to promote the research, development and commercialization off “game-changing” energy technologies, received praise for quickly sorting through 3,700 applications to make 37 awards in its first round of funding. It also fine-tuned its awards process, with the second round of funding going into specific areas of research identified in a series of workshops. Some of the projects that ARPA-E funded have since attracted private support.

The agency’s fate, however, remains unclear. It’s funding so far has come from last year’s stimulus package, not the regular budget, and Congress denied its request for funds for the current fiscal year. [Clarification: Congress did this because the agency already had sufficient funds from the stimulus package to continue operation. The appropriations bill included the following language: “The decision not to provide any additional funding for ARPA-E in fiscal year 2010 beyond the funding already provided does not in any way suggest a lack of commitment to this new program by the Committee.”] The President’s 2011 budget includes nearly $300 million for the agency, but at a time when Congress is facing pressure to cut spending, that money might not make to the final budget.

John Garamendi (D-CA), noted that President Obama wants a freeze on discretionary spending. In order to do that, while also adding new funding for ARPA-E to the budget, Congress will have to cut funding or subsidies elsewhere. Garamandi has his sights set on the oil industry. “We’re spending 10 to 15 billion dollars a year subsidizing an extraordinary industry, the oil industry. We’ve done if for a century. Why in the world are we continuing to do that?”

One concern raised by several of the committee members was whether ARPA-E’s efforts will lead to American jobs. Brian Baird (D-WA), noted that technologies such as advanced batteries, which were invented in the United States, have been “exported” and are now being designed and produced in other countries.

John Denniston, a partner from the venture capital firm Kleiner Perkins Caulfield & Byers who testified before the committee, emphasized that the first step is promoting innovation through ARPA-E–and argued that jobs would follow. “First things first. Let’s get the breakthroughs,” he said. Denniston also warned that putting restrictions on the use of the technologies once they are produced–such as not allowing them to be produced overseas–would hurt entrepreneurs, since it could lead other countries to restrict technology flowing into the United States.