[Senate Hearing 112-188]
[From the U.S. Government Publishing Office]
[ERRATA]
S. Hrg. 112-188
QUADRENNIAL ENERGY REVIEW ACT
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
TO
RECEIVE TESTIMONY ON THE DEPARTMENT OF ENERGY'S QUADRENNIAL TECHNOLOGY
REVIEW (QTR) AND TWO BILLS PENDING BEFORE THE COMMITTEE: S. 1703--
QUADRENNIAL ENERGY REVIEW ACT OF 2011, AND S. 1807--ENERGY RESEARCH AND
DEVELOPMENT COORDINATION ACT OF 2011
__________
NOVEMBER 15, 2011
Printed for the use of the
Committee on Energy and Natural Resources
U.S. GOVERNMENT PRINTING OFFICE
73-106 WASHINGTON : 2012
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[ERRATA]
S. Hrg. 112-188
The referenced hearing held before the Senate Committee on
Energy and Natural Resourses was inadvertently printed without
the Questions and Answers for Ernest J. Moniz. In which
follows:
Responses of Ernest J. Moniz to Questions From Senator Murkowski
Question 1. One of the most vigorous debates on energy policy is
the extent of the subsidies we should offer, and what areas we should
target with those subsidies. To the extent that the government finds
funding to allocate to energy, where do you believe we should focus our
efforts? Where do you believe we can have the greatest impact--basic
research, commercialization, or some combination of those activities?
Answer. The innovation system spans invention (research and
discovery, knowledge creation, prototype generation); translation
(creation of a commercial product or process); adoption (technology
deployment and initial use); and diffusion (increasing adoption and use
at scale).
The need for energy technology innovation is considerable for our
economy, for our security, and for environmental stewardship,
especially for mitigating the risks of climate change. However, energy
technology innovation has lagged well behind that seen in other
sectors; that is, while the level of activity is at unparalleled levels
at the invention and translation stages, the scale-up and widespread
deployment of clean energy technologies has been modest. If this
adoption and diffusion is to be accelerated, government will need to
play a role across the entire innovation chain.
The government role in filling the innovation pipeline through R&D
is generally accepted because of the difficulty for individual firms to
capture the benefits of early stage research. Because of the
particularly strong role of the government at this stage, the highest
priority is to continue and indeed expand this government role. The
PCAST report offered a benchmark for research, development,
demonstration and deployment (RDD&D) funding that would entail an
increase of about $10B per year. This could be implemented through
direct appropriations (a major challenge given the overall budget
constraints) or through a Congressionally-approved small charge on
energy production, delivery and/or use. The majority of this funding
should be directed to RD&D. Public-private partnerships with strong
industry involvement, some with a regional base, should be employed,
especially at the demonstration phase.
The Department of Energy has introduced several new approaches to
R&D funding: energy frontier research centers, ARPA-E, and energy
innovation hubs. These are very promising approaches and DOE energy R&D
funding should increasingly be directed towards programs carried out in
this manner, whether ARPA-E, Basic Energy Science, or the applied
energy programs.
Acceleration of energy technology innovation is more challenging at
the adoption and diffusion stages in respect to the government role,
since this is taking the government more into the marketplace. The most
direct approach for the government is to internalize public policy
objectives through economic incentives, for example, a price on carbon
dioxide emissions for mitigating climate change risks or on oil
consumption for relieving oil dependence. The political barriers to
such steps are, by observation, considerable. We are likely to require
``second-best'' approaches (renewable portfolio and CAFE standards,
market share mandates, loan guarantees,.). There are a myriad of such
policy instruments and PCAST recommended the QER in large part to sort
these out based on strong analysis and substantial input from the
Congress and the private sector. The hope is that the QER process can
lead to a nonpartisan framework for working across multiple agencies
and multiple Congressional committees to stimulate market adoption and
diffusion of clean energy technologies. Ideally the process would also
led to multi-year Congressional authorizations that would provide
increased private sector confidence in the stability of the policy and
budgetary framework.
The support for the QER coming from this committee's leadership is
both appreciated and important.
Question 2. We regularly hear--often from people at the Department
of Energy--that the U.S. is in a ``clean energy race'' with nations
like China and Germany. How can we compare what's happening in those
countries, in terms of technology development and industry growth, to
find out if we're actually in a ``race'', let alone winning or losing
it? Does the QTR offer a chance for us to set a baseline by which we
can compare ourselves to other nations? And how can we go about
developing the data to make those comparisons?
Answer. The QTR provides a roadmap for DOE energy technology R&D.
As such, it does not explicitly make comparisons with technology
development in other countries, nor does it dwell on deployment
mechanisms (this is deferred to the QER).
However, the opportunities for capturing the economic
competitiveness advantages from the continuing American leadership in
research is important and should be one factor in setting the R&D
priorities. To do this, a sophisticated understanding of the innovation
system and technology status in countries such as China and Germany is
needed. As one example, China has jumped to the fore in PV module
production, offering cost-competitive products internationally and
providing tremendous price pressure on firms in the US and elsewhere
(including some Chinese PV firms, a number of which are also going out
of business). One part of the Chinese success was a focus on all parts
of the supply chain, including development of low cost capability for
providing production line equipment. Understanding and analysis of such
developments has not progressed adequately, and yet could provide
useful information for our own government policies and help guide
productive investment of US taxpayer dollars in RDD&D. There is
currently no mechanism for supporting serious studies of this type at
the DOE, a situation that led PCAST to recommend implementation of a
social science/economics research program. The program could clarify
issues such as consumer needs and preferences, market structures, and
the like. An institution analogous to the National Bureau of Economic
Research (or possibly even a supplement to it) could provide an
interesting model for developing the research base.