MIT Technology Review published an article this month lauding the success of federal subsidies for renewable power under the ARPA-E program. Reasonable minds can differ on whether and to what extend federal taxpayers should be subsidizing competing energy sources. Regardless, it is helpful to consider the relative standards for “success” regarding renewable power and natural gas.
The MIT article referenced a 238-page assessment published by the Advanced Research Projects Agency – Energy (ARPA-E). In publishing its self-assessment, ARPA-E, of course, will be presenting the rosiest picture possible to continue its existence. Fair enough. Let’s take a look at how ARPA-E measured its asserted success.
Image courtesy of Wikimedia Commons.
“The fair critique of the agency is it hasn’t yet produced any breakout commercial success stories, or a technology that’s radically transformed the energy landscape. But the report stressed that the agency couldn’t be expected to have achieved all its stated missions at this early stage,” MIT observed.
The ARPA-E report highlighted three key facts by which it claimed success: outside funding, peer-reviewed research, and patent approvals.
“Among the signs of success highlighted by the congressionally mandated report: 25 percent of the teams raised additional funding, about half published their research in peer-reviewed journals, and around 13 percent of the projects earned patents,” MIT reported.
If 25 percent of the teams raised additional funding, that means 75 percent could not persuade any outside entities to invest in their projects. Given the plethora of environmental activist groups and green-centric donors like Tom Steyer, it is strikingly unsuccessful that three-fourths of all teams couldn’t raise a dime of outside investment. Even among the small number of teams that raised some outside funding, the outside funding is remarkably small. In short, taxpayers have invested over $1 billion in projects for which few or no private-sector green entrepreneurs will invest their own money.
Half the teams could not publish any of their research in peer-reviewed journals. Being published in a peer-reviewed journal should not be too difficult for a generously funded government research program. Yet half couldn’t meet this standard. Even getting research published does not indicate that a particular energy proposal will achieve commercial success. It merely means that the research was academically interesting. Half couldn’t meet that standard.
A little more than 1 in 10 teams obtained a patent. That means nearly 9 in 10 did not obtain a patent. Obtaining a patent is not difficult to do. It merely entails presenting an idea for commercial exclusivity that nobody else has claimed. The patent office does not render judgment on the scientific or commercial feasibility of the ideas contained in a patent; it merely affirms that nobody else has applied to exclusively market such an idea. Some patents result in commercial success. Usually, however, nobody else has applied to patent a particular idea because it has little or no promise. Measuring success by obtaining patents entails no indication of scientific or commercial promise. It merely means nobody else to date has considered the idea worth pursuing.
Individually and cumulatively, the three means by which ARPA-E claims success have no correlation with the way investors measure success. They merely show that the teams have engaged in a minimal amount of work that to date has done essentially nothing to bring energy ideas to market.
By contrast, there is no federal ARPA-E program to subsidize natural gas research for natural gas power. Despite this, natural gas has increased its market share of American power generation from 21 percent in 2008 to 36 percent in 2016. The economic and environmental impacts of this are lower electricity prices, lower power plant emissions, and lower full-spectrum environmental impacts.
Arguments can be made that policymakers should invest federal tax dollars in renewable power research. Reasonable minds can debate this. But by any objective measure of success, unsubsidized natural gas power is running economic and environmental circles around subsidized renewable power.