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Trump really wants to kill ARPA-E; federal agency says that’s folly

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Enlarge/ The Advanced Research Projects Agency-Energy annual summit opens. Megan Geuss

WASHINGTON, DC—Ten years ago, a bipartisan group of lawmakers created ARPA-E, or the Advanced Research Projects Agency for Energy. Today, the agency may be living on borrowed time. Or maybe not.

The Trump administration has, for two years in a row, recommended that ARPA-E be defunded and mothballed. But last year, a Republican-led Congress actually voted to increase the agency's budget from its 2016 levels.

But until Congress passes a new budget, the fate of ARPA-E is uncertain. In the face of that uncertainty, the agency's annual summit still convened in Washington, DC, this week, and its leaders addressed the crowd of scientists and entrepreneurs with words that seemed to be more for administration higher-ups than for the choir to whom they preached.

The Trump administration has argued for ARPA-E's elimination on the grounds that the US federal government doesn't need another grant program, and, if the technology is sufficiently economic, private industry will fund its development without government dollars.

But ARPA-E Deputy Director Chris Fall and Norm Augustine, a co-chair on the American Energy Innovation Council and one of the leaders behind ARPA-E's inception, dispute that characterization. Instead they say the agency, with its relatively modest $309 million budget, serves a purpose distinct from traditional grant funding and private research and development funding. (By comparison, the Defense Advanced Research Projects Agency, or DARPA, received nearly $3 billion in 2017.)

"You’re hard-pressed to find anyone who complains about the existence of DARPA," Fall said in a keynote address on Tuesday morning. Fall argued that ARPA-E's mission is that of its similarly named kin. "We’re supposed to act as the special forces for science and technology."

For now, the agency is adopting a "keep calm and carry on" attitude. "We are at a crossroads," Fall said, "but until we’re told to do something different, we need to keep thinking about the future."

Can ARPA-E funding be replaced by more traditional grants?

In a conversation with Ars after the keynote speech, Fall said that the agency can always find areas for growth—it had to be faster and nimbler. But the deputy director also defended his agency’s practices, saying that ARPA-E is better equipped to spark new technology development, unlike grant programs. “I’m talking about the agency being able to move quickly to capitalize on opportunity… we’re supposed to anticipate technology, go for the really far-out stuff,” and “teach others what’s important,” Fall said. "For those big [Department of Energy] programs, it takes a long time to turn that battleship."

Indeed, ARPA-E has funded hundreds of the riskiest, newest energy-related technologies in its 10 years. Ars has written about many of them: a new zinc anode, a high-temperature liquid metal pump, light-weight vehicle concepts.

Currently, ARPA-E checks in with its grant recipients every four months to make sure they're on track, and it can and will rescind funding if it looks like a project isn't working out. As Fall said in his keynote, "We do fail from time to time, appropriately." Going forward, Fall said, ARPA-E must "look harder at the programs that aren’t performing and take those dollars and do something else with them."

Additionally, five percent of ARPA-E's budget is spent on bringing technologies to market or finding a suitable "new home" for them, whether it's in a grant program for more mature technologies at a national lab or adopted by the military.

Ultimately, Fall argued that the difference between traditional government grant programs and ARPA-E is that the latter "tries to develop programs to fit problems and not fit problems into some artificially constrained programs."

When Ars asked Fall about criticism that ARPA-E's funding might be politically motivated or lean too heavily "green," the deputy director responded diplomatically.

"It’s fair for anyone to criticize. It’s fair," He said. At the same time, he seemed open to compromise: the Trump administration could just redirect ARPA-E instead of killing it. "It’s entirely appropriate for a new administration to choose technology innovations they think is important," Fall said, adding that ARPA-E isn't just about renewable energy—a good chunk of its funding is dedicated to cybersecurity, infrastructure, and fossil fuels.

Can ARPA-E funding be replaced by private industry money?

Another perspective on ARPA-E's existence came from Augustine, who worked to kickstart ARPA-E.

Augustine opened his own keynote on Tuesday morning with a reminder that both government and industry need to look past what customers and shareholders want: "Henry Ford used to say, if you asked people at that time [of the first cars] what they wanted, most of them would have said that they wanted a faster horse."

Augustine argued that a quick-turnaround profit mandate has put the leaders of most companies at odds with long-term, early-stage research investment. "Eighty percent of the CEOs in America have said that they would cut their R&D program if necessary [to hit internal goals]," Augustine said. He added that shareholders used to hold their stock for eight years on average, whereas now shareholders tend to hold stock for about four months, so there are fewer long-term investors who will be patient with technology development.

Augustine said that even when research is successful, energy projects in particular face a "second valley of death." That is, ideas can languish in a first valley of death when the process of taking an idea to a proven technology in a lab is doable but too expensive. But that second valley comes later for energy projects, because moving from a lab-proven technology "to a proven, full-scale, economically viable pursuit is extraordinarily costly and very time-consuming." ARPA-E funding, often in conjunction with private investment, can help overcome that second valley, Augustine argued.

Abdicating responsibility to develop critical energy technologies like battery storage to the private sector would be a mistake, Augustine argued. "The most damaging [problem for] the kind of work that ARPA-E does is turbulence in funding," Augustine said. "You simply can’t grow flowers by pulling up their roots occasionally to see if they’re growing."

In a brief Q&A period after his keynote, the energy co-chair was asked what kind of message he would send to Energy Secretary Rick Perry, who will address the audience Wednesday afternoon. "The economy… of this country depends on research and education," Augustine said. "And both research and education have a payoff period that is very long."

“I hope you stay around the full tour," Augustine joked.

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