Earlier this week, the Senate Energy and Natural Resources Committee held a hearing on the government’s role in energy innovation, with Norm Augustine as the star witness.
Mr. Augustine is the former Chairman and CEO of Lockheed Martin. His testimony was on behalf of the American Energy Innovation Council, whose members also include Ursula Burns, Chair and CEO of Xerox, John Doerr of Kleiner Perkins, Bill Gates, Chairman of Microsoft, Chad Holliday, Chairman of Bank of America, and Jeff Immelt, Chair and CEO of GE. Some of his testimony is worth simply quoting:
“America’s investment in energy innovation from the public and private sectors together is less than one-half of one percent of the nation’s energy bill. This fraction is eclipsed by the innovation investment in most other sectors, particularly those in the high-tech arena. Meanwhile, we send one billion dollars abroad each day to pay our energy bill to foreign producers.
“The energy dilemma seems to be exactly the sort of issue which governments are designed to help solve, at least in democracies with free enterprise markets. That is, this is a case wherein there is an important benefit to be had by the citizenry as a whole but private resources cannot, or will not, provide that benefit because of financial risk, extensive delays in receiving returns, small or even negative returns and the possibility that the returns will not even accrue to the investor or performer. The latter is particularly true in the pursuit of basic research.
“The members of the American Energy Innovation Council are aware of the intense fiscal problems facing the nation—and you as its leaders. But we are also aware that in our own business responsibilities that during difficult times it may be necessary and appropriate to increase spending in some areas while at the same time making overall reductions. There is an important distinction to be made between investment and spending for consumption.”
What will the Congress do with this advice? Time will tell. It is useful to note what the Committee’s Ranking Republican, Senator Lisa Murkowski of Alaska, said at the hearing on the funding issue:
“For years now, I’ve suggested that a portion of the revenues from increased domestic energy production should be devoted to energy innovation. That’s a key part of my ANWR legislation, which would raise an estimated $150 billion for the federal treasury at today’s oil prices. Even a fraction of those revenues could go a long way towards developing the resources and technologies that we will rely on in the future.”