Jeff Bingaman United States Senator from New Mexico

What do I propose as the solution?

          I believe that we need to take 5 steps.

          The first step is to establish overall responsibility at those highest levels of our government for such an effort.  Much of what is covered on the previous chart of innovative technologies is funded by the Department of Energy.  But a number of key areas belong to other Departments of government, like the Department of Commerce.  And even the Secretary of Energy and the Secretary of Commerce have a difficult time getting the research funding they need out of the White House budget process, which is run by the Office of Management and Budget.  So, I believe that the President's Science Advisor needs to be given a stronger hand.  One way to provide that enhanced authority would be to direct that the President's Science Advisor hold a concurrent appointment at the Deputy Director-level in the Office of Management and Budget. This would ensure that the same person with responsibility for overall science and technology policy in government has some real authority to ensure that the funds to support science and technology make it into the Federal budget.

          As a second step, the President's Science Advisor, armed with his enhanced authority, should work with the key Departments and the National Academies to come up with a manageable set of energy technology areas that promise to aid us in meeting our energy needs and substantially reducing greenhouse gas emissions in coming decades.  Some of these will be technology areas the Japanese or others have chosen as well. Others will be new to the list. 

          As a third step, in each of the chosen technology areas, a working group of academic, government, laboratory, and industry representatives should be convened and a broad roadmap developed to chart the way forward.  Responsibility for pursuit of the roadmap in each technology area should be assigned to a particular government department or agency. 

          Fourth, to ensure an adequate degree of sustained focus and an adequate level of funding, the President should be required to submit to the Congress with his budget proposal each year a separate document detailing the funds being requested in support of each energy technology area across the agencies of the government.

          And finally, to ensure that the areas being pursued continue to be those that hold the greatest promise, the National Academies should be directed to prepare an updated analysis of energy technology priorities every five years.  We already do something very similar with our Defense policy by requiring a so-called Quadrennial Defense Review, every 4 years.

          MIT has already begun to take the lead in prioritizing promising technologies with its reports on the future of nuclear power, coal, and geothermal energy.  I am looking forward to your completion of a similar report on the future of solar energy.  Your reports have a real impact.  In fact, it is precisely because of the Future of Geothermal Energy Report that we have an Enhanced Geothermal R&D Program at the Department of Energy.
          This graph shows the lack of consistent support for geothermal energy development in recent years. In early 2006, the President proposed a budget for 2007 with zero funding for geothermal energy research.  He did the same in early 2007 for the 2008 budget.  But when the MIT report drew the attention of Congress in 2007 to the importance and promise of research on geothermal energy, Congress responded.  As a result, the funding level went back to $20 million for 2008.  The Department of Energy then took note of the report and Congress's interest and reinitiated its requests for funding for 2009.

But as we have learned from hard experience, it is one thing to set priorities and begin pursuing them.  It is quite another to sustain the effort.  This brings me to the third major policy failing on my earlier list.  Our record for sustaining the effort at critical technology development has been poor.  Once we set the course, why can't we stay on it?

          One obvious problem is that each new administration feels a need to pursue something new.  Instead of sticking with the difficult blocking and tackling required to move the ball down the field, we allow our attention and effort to be deflected, and comfort ourselves with the notion that some Hail Mary pass will nevertheless allow us to score the touchdown.

To this point, our stop-and-start efforts in regard to geothermal development unfortunately have been matched by similar efforts in the development of vehicle technology.

On February 10, 1970, before many of you in this room were born, President Nixon announced the following in a special message to the Congress:

"I am inaugurating a program to marshal both government and private research with the goal of producing an unconventionally powered pollution free automobile within five years."

Seven years later in 1977, President Carter announced his program for "reinventing the car."  15 years after that, in 1993, President Clinton announced his Partnership for a New Generation of Vehicles, and 10 years after that, in 2003, President Bush announced his push for the Freedom Car.

          Identifying the priority is obviously not enough.  It is also necessary to develop a consensus on how to proceed -- a consensus that will survive from one Administration and one Congress to the next. The development of a national strategic plan for energy technology development, together with regular updating of that plan, will go a long way toward avoiding the stop-and-start approach that has plagued us in the past.

The fourth major failing in our science and technology policy happens after we discover or develop new science and engineering at places like MIT.

 We don't have long-term regulatory and tax policies to promote development, manufacture, and widespread use of new technologies.  As Germany has shown in the areas of wind and solar, providing such long term policies can create a booming renewables industry.

          In this country, we have seen a different story play out.  Utility regulation and rate setting have historically been the job of public regulatory commissions at the state level. While some states have enacted progressive policies such as renewable portfolio standards and net metering, many have not.

We have tried for the last 3 Congresses to enact a renewable portfolio standard at the national level but those efforts have met strong resistance from utilities and from the current administration.

          Similarly in the area of tax incentives for increased efficiency and renewable technologies, our record has not been stellar. We have enacted some renewable tax incentives but for budgetary reasons those were enacted for only short periods of time. And often they were allowed to expire before they were renewed.

          As an example, the most significant tax incentive we have enacted to encourage alternative energy development has been the Renewable Energy Production Tax Credit. In the case of wind energy, this credit provides a reimbursement of nearly 2 cents per kilowatt-hour for electricity produced from a wind turbine, for a full 10 years after the turbine is put into service. The problem has been that the periods during which one is required to put the turbine in use to receive the tax credit were relatively short periods.

          This problem is clearly illustrated in this chart of U.S. wind capacity addition per year. In years when the production tax credit was fully available, there was robust development.  In years when the tax credit was scheduled to expire, financial institutions were reluctant to invest in projects that were not certain to be producing before the expiration of the credit.  The result was this boom-and-bust cycle that you see in the chart.  Clearly, a more consistent tax policy would have put us much further along in our development and use of wind power. Government-driven boom-and-bust cycles send the wrong message to entrepreneurs.

          What we need is a way to provide long-term market stability for renewable electricity production. Part of that solution is to provide a long term extension of the tax credits for renewable electricity. I believe that Congress will, next year, with a new Administration in office, finally pass a much longer term extension of these tax credits.

          The fifth and final policy area I will discuss is the need to claim the economic benefits from clean tech manufacturing.

          First we need to acknowledge, at least in theory, that it is possible to meet the energy challenges I have outlined without creating the domestic manufacturing capability and domestic manufacturing jobs that ought to go with that.  To use the current buzzword, we unfortunately could wind up "outsourcing" that manufacturing, particularly through inaction.  Advanced energy storage devices, thin film photovoltaic cells, and highly efficient light emitting diodes will all be needed for clean, efficient energy production and use.  But there is no assurance that these products will be produced in the United States.  In fact, some would argue that unless we adopt substantial changes in the way we do business; it is more likely than not that we will buy these products from abroad.

          In their 1990 book, The Breakthrough Illusion, Professors Richard Florida and Martin Kenney state:

          "Although the commonplace impression that breakthrough innovations create permanent advantage for American companies may once have been true, it is just not the case anymore.  A new reality is upon us: the U.S. makes the breakthroughs, while other countries, especially Japan, provide the follow-through."

          Now, 18 years after that was written, I believe it is truer than ever, and the other countries include many besides Japan.

          Here is a chart that shows what has happened to world production in photovoltaic cells since 1995. It is interesting to observe that until 1998, we were holding our own.  In the last decade, though, while production in other countries has soared, the U.S. photovoltaic industry has remained stagnant.

And to once again point out that this is part of a larger problem of our declining manufacturing base, here is a chart showing the drop-off in U.S. manufacturing jobs over the last 7 years, not just in energy-related technologies, but in all sectors.
          A strategy to revitalize U.S. manufacturing is the topic for another speech.  Such a strategy will require developing a consensus on changes in tax policy, procurement policy, trade policy, and probably health policy and education policy as well.  We have a real opportunity here to grow a high-tech, renewables manufacturing base if we commit to the right policies.  We have the knowledge, the technology, the workforce, and the drive to make it possible. Germany has proven that such a transformation can occur in an advanced economy. Nearly 250,000 renewable energy jobs have been created in Germany, and it is expected that over 400,000 people will be employed by 2020. Imagine what is possible in an economy of our size and capabilities.

          Tackling the policy challenges in the 5 major areas I have discussed is important to everyone here in the room -- as students, researchers, and innovators today, and as leaders in our clean tech and energy industries tomorrow.  If you are wondering, "How does all this relate to students here at MIT?" I would suggest the following.

          Each of the problems I have laid out also presents great opportunity—and I'm told that MIT students know the connection between problems and opportunities better than anyone. You at MIT have a critical role to play in solving our energy problems. Because of your knowledge, your abilities, and your persistence—it is you who will likely emerge as the leaders in meeting this global challenge.

          Reengineering the way the world produces, stores, distributes and uses energy may in fact be the greatest challenge that we as a global community must face together. And to my mind, it is a worthy calling.

          Addressing the energy challenge will require government, industry, scientists, and engineers to work together.  I hope that some of you will come to Washington to help us structure the policies and programs that will facilitate that work.  As it happens, two graduates of this great university work with me and do a wonderful job on the Senate Energy and Nature Resources Committee.  I am proud that they are here today.  Bob Simon is the Director of the Majority Staff, and Alicia Jackson is a AAAS Fellow.  While some of you may choose to make contributions through government service, many others of you will make your mark on our future energy system through direct research and innovation.  As Vannevar Bush, a former MIT Vice-President and a scientific advisor to Presidents Roosevelt and Truman said, "Without scientific progress, no amount of achievement in other directions can ensure our health, prosperity, and security as a nation in the modern world."

          The prospect for all of you to make a global difference is tremendous.  Your enthusiasm and commitment to these issues are very encouraging.  You have my pledge that I am committed to doing all that I can to ensure that you have the resources, support, and policies in place to achieve success.