US needs to improve its energy innovation process, speakers suggest

The US will need to improve its energy innovation process if it expects to reach the Trump administration’s goal of achieving global energy dominance, speakers agreed at a Jan. 17 Bipartisan Policy Center event. The key will be finding ways to more effectively commercialize innovative research under way at the US Department of Energy’s National Energy Technology Laboratories, they said.

“DOE has long enjoyed bipartisan support on Capitol Hill for research at our national labs and their relationships with the private sector,” US Energy Sec. Rick Perry said in his opening remarks. “Thanks to their research, we’ve become world leaders in oil and natural gas production. Thanks to this research, we’ve also led the world in reducing energy-related carbon emissions, cutting them by 14% between 2005 and 2017.

“Thanks to this research, the combined emissions of six key pollutants fell by an astounding 73% between 1970 and 2017, even as our economy was growing. Thanks to this research, emissions of sulfur dioxide plummeted by 88%; nitrogen oxide from the electric power industry by 76% between 1997, when it peaked, and 2017,” he said.

Continued investment has set the stage for battery technology improvements, Perry said. “On that score, I’m pleased to report that DOE is launching a new lithium battery recycling prize, including cash awards of up to $5.5 million over the next 3 years.”

The goal is to recycle critical materials from lithium-based battery technology that’s widely used across the US society, he said. “We aim to reduce our dependence on foreign sources of this material by encouraging entrepreneurs to recapture up to 90% of America’s lithium-based technology.”

‘Go forward powerfully’

“As always, my message is very clear. Innovation works. At DOE, we look forward to working with this Congress to build upon innovation for generations to come. Now is the time to go forward powerfully. Now is not the time to trim our sails. It’s the time to tell people what we can do, not what we can’t do,” Perry said.

Royal Dutch Shell PLC Chairman Chad Holliday, who was one of five panelists in a discussion following Perry’s remarks, said, “I think the technology is out there if we could just get it used. If you go back in time, we’ve had a number of energy transitions that have involved major changes in systems. I tried to count them, and they’re in the high single digits. But every one of them has occurred because there was a better energy system people went to. There was a lower cost, higher quality, and more convenience.”

Holliday said he expects the next energy transition to occur for the same reason. “The question is do we have an energy system out there today that really is enough to pull things over. What I find our labs doing is as cutting-edge as you could find. We in Shell have to decide if we’re going to put our major research in our labs in Houston, our labs in Amsterdam, or our labs in India. We’re putting more and more in Houston because we think this country’s system is better. But we probably could do so much more.”

Asked what the federal government could do to keep Shell’s R&D emphasis in the US, Holliday said: “I think the original recommendations of this group was significant funding that would establish a predictable time frame, and then encouraging the private sector to provide matching funds. The way you get in the game is to bring your expertise, your knowledge, and your own labs to partner with ours. I think that’s the answer.”

A second panelist, Jay Faison, founder of ClearPath, a Washington energy solutions developer, said, “We have a lot of natural advantages, but if we’re talking about international competition, I would focus on China in particular. A recent cover story in The Economist talked about how the Chinese are increasing their advantages. If you look at what they’re spending in federal R&D numbers or in state-owned enterprises, they’re out-spending us.”

China’s advantages

The Chinese also have lower human capital costs, and their goals under their 5-year energy plan are tight, specific, and spread out over several technologies,” Faison said. “They also don’t have the distinctions between basic and applied technologies that we do. For example, where we have a bias toward basic research—and sometimes our technologies get caught in this thing called the Valley of Death where companies like A123 Batteries get right to the stage of commercialization, hit a wall, and China comes and buys it right out of bankruptcy, and commercializes it—the Chinese use a goal-oriented approach instead of one that’s limited to basic research.”

Wanda M. Austin, a former chief executive at Aerospace Corp. who now is the University of Southern California’s interim president, said, “We’ve seen that this is a case where necessity will drive us to the next best thing. One of the things I’ve seen, having had a foot at the late stage, as you call it, and the first move, has been how we get from the wonderful, amazing things we see in our 17 national laboratories to what actually is affordable, scalable, and something that is commercially accessible. We have to think about that transition.”

This does not happen by accident, Austin said. “It happens because you create paths through which you partner, understand what’s going to come out of the research effort, and figure how you can add value for users, how it can be commercialized, and how it can be scaled.” Asked what she does at USC to get more ideas from the R&D space into commercial markets, she said: “We talk about making great things happen. But this has to be a sustained effort. It can’t be this year we think we’ll work in one area of energy, and then 18 months later we say we’ll do something completely different. We’re jumping from one horse to another. This has to be a stable line of investment.”

Southern Co. Chief Executive Thomas A. Fanning said, “It’s very clear to me that when we make statements like low-to-no carbon by 2050 that it’s part of an overall context that’s hung on the idea of clean, safe, reliable, affordable energy. All of that must work. When you think of the miracle of what directional drilling and hydraulic fracturing has done for the release of previously unavailable gas resources, the next question is what the imperatives are within the energy space. Things like storage—micro-storage in the form of batteries, even possibly using the Earth as a battery, pump storage, are big ideas which would let us get storage at scale.

“My sense is that lithium ion is a good technology, but it will only take us so far. We need real material science advances to push that idea,” Fanning said. “Another is the idea that we’ll still need to do something with the carbon atom. We have [carbon capture and sequestration], which heretofore has been a tough thing. At the end of the day, how these technologies manifest themselves will depend on taking something that’s out of the money and putting it in the money.”

Contact Nick Snow at [email protected].