A Lack of Energy
A Bush visit doesn't change the fact that spending on alternative fuels is down
GOLDEN, COLO.--Even in the roller-coaster world of cutting-edge energy research, it was a speedy reversal of fortune. Thirty-two staffers at the National Renewable Energy Laboratory, laid off two weeks earlier because of budget cuts, got their jobs back last week--just in time for a visit by President Bush touting a new drive to break the nation of its oil habit.
Despite the hoopla of the president's whirlwind tour, and his promises of more federal dollars in the future, the nation's premier center for research into wind, solar, and ethanol energy labors under a shrunken budget at a time when consumers are facing record-high prices for fossil fuels. Regardless of the last-minute move that allowed NREL to hire back its fired workers, the center's funding is down 11 percent from last year, and Bush's proposed budget would not even restore the lab to 2005 levels.
Administration officials maintain that the numbers don't tell the whole story and Bush's plan would actually devote more dollars to research next year--particularly in key areas. But the federal government's long-wavering commitment to alternative energy was something even the president was forced to acknowledge at the lab nestled in the Rocky Mountain foothills just west of Denver. "I recognize that there has been some interesting, let me say, mixed signals, when it comes to funding," he told the scientists. "My message to those who work here is ... we appreciate what you're doing. And we expect you to keep doing it, and we want to help you keep doing it."
Taking a cut. With already high gasoline prices spiking upward with every global political disturbance or weather front, Americans might be grateful for progress on alternatives to the fuel that now dominates transportation. And with electricity and heating prices high because of increasing dependence on natural gas, consumers would welcome a greater contribution from wind and solar energy, which provide less than 1 percent of the electricity the United States consumes. But Washington cheerleading aside, the federal renewable energy program remains relatively small and has been nibbled down further by budget cuts and spending diverted to congressional pet projects.
Larry Kazmerski, the ebullient director of NREL's National Center for Photovoltaics, who has been at the lab since its inception in the 1970s, is hopeful. "We are so optimistic and so happy" to see Bush's proposed $148 million budget for solar energy next year, he says. It would be a 78.5 percent hike, the program's biggest single-year jump. However, there is much ground to regain, since solar funding in every year of the Bush administration has fallen short of President Clinton's last budget. Adjusted for inflation, Bush's new proposal still amounts to less than half the funds spent on solar when a cardigan-wearing President Carter was waging the "moral equivalent of war" on fossil energy.
"The big thing about this technology is, it works," says Kazmerski, whose boosterism is evident in the sun-decorated ties and scarves he hands out. Yet solar has been too expensive to make inroads in the United States. NREL scientists work on bringing down the cost by using solar concentration techniques and by whittling down the amount of semiconductor material needed into thin film. NREL's film is now used in military backpack generators. And the highly efficient triple-junction concentrator solar cells developed at NREL are used in almost all satellites, such as those that beam TV signals across the globe. But Kazmerski says commercialization has been set back years by inconsistent support. "Give it a chance,"he says. "This is our chance to take back leadership in this industry."
He laments that the lag time from lab to market has stretched significantly since the 1950s, when researchers at the venerable Bell Laboratories took only two years to develop the first silicon solar cell. Although Bush noted that two thirds of U.S. research and development is done by the private sector, that is decidedly not the case with alternative energy today.
"There is very little of what I'd call robust corporate R&D in this business,"says NREL Director Dan Arvizu. The capital costs are too great and the risks are too high, especially when any company investing knows it will be fighting to earn a return head to head against Big Oil. "To a large degree, the national labs are very much the equivalent of that corporate R&D in these somewhat nascent industries,"says Arvizu. "Our mission is to develop the technology options, to reduce the risk, so that the private sector and, to a large degree, the investment community can mobilize capital."
To that end, NREL has partnered with both fledgling entrepreneurial companies and big corporate players. The lab is in the midst of a four-year, $38 million biomass project with chemical giant DuPont and other companies. Their goal is to develop a biotechnology package for producing ethanol out of cornstalks, now waste plowed back into the field after harvest. "There was a time when we'd do an entire project like this ourselves, but we have moved away from that model," says Bill Frey, global business director for bio-based materials at DuPont. "We do what we do best, and where there are people with world-class capabilities, let's work with them in partnership."
Cooked corn. Biomass researchers like DuPont can take advantage of the one-of-a-kind ethanol refinery at NREL, which allows detailed testing at each step of the process. "It's really a glorified brewery," says process engineer Andy Aden, who opens a jar of fermented cornstalks, already giving off the sweet smell of success--the sugar produced as the mash is converted into alcohol fuel. Other work with corporate partners Genencor and Novozyme brought down the cost of one part of the process from between $3 and $5 to 25 cents a gallon. But Frey notes that there are still major technical challenges. What can the government do to help? "Funding, funding, funding," he says. "Would it move faster if we spent more? The answer is yes."
But NREL spent recent weeks cutting back its research ambitions for the year, because Congress not only kept renewable energy funding flat but chomped into the allocation further with a record $170 million in congressionally directed projects that send money to home districts. These "earmarks" consumed more than 50 percent of the federal dollars for biomass research, 33 percent for wind energy, and 27 percent for hydrogen, an American Association for the Advancement of Science analysis shows. The $2.5 million devoted to a hydrogen bus system in Senate Minority Leader Harry Reid's home state of Nevada (even though hydrogen buses are not yet available commercially), for example, takes away from money that would have been spent on competitively bid, peer-reviewed projects to bring hydrogen transport closer to reality.
Bush has vowed to reverse the trend by increasing renewable energy funding 22 percent in his proposed budget, to $771 million. Still, that amounts to less than 1 percent of the $55 billion the federal government spends annually on research, nearly half of which is devoted to healthcare. "Yet healthcare disappears the second the electricity goes out," says one NREL scientist.
This story appears in the March 6, 2006 print edition of U.S. News & World Report.