Witnesses
Arun Majumdar
Director, Advanced Research Projects Agency-Energy, Department of Energy
Gregory Friedman
Inspector General, Department of Energy
Frank Rusco
Director, Energy and Science Issues, Government Accountability Office

 

Subcommittee Members Present
Paul Broun, Chair (R-GA)
Paul Tonko, Ranking Member (D-NY)
Brad Miller (D-NC)
Jerry McNerney (D-CA)

 

Full Committee Members Present
Ralph Hall, Chair (R-TX)
Roscoe Bartlett (R-MD)
Dana Rohrabacher (R-CA)

 

On January 24, 2012, the Subcommittee on Investigations and Oversight of the House Committee on Science, Space and Technology held a hearing entitled “A Review of the Advanced Research Projects Agency-Energy”.  The Advanced Research Projects Agency-Energy (ARPA-E) was formed in 2007 under the America COMPETES Act (P.L. 110-69), but did not receive funding until 2009 under the American Recovery and Reinvestment Act (P.L. 111-5).  The hearing was called to review ARPA-E’s allocation of funds to research projects not funded by the private sector, an issue that was examined in a Department of Energy Inspector General (DOEIG) report from August, 2011 and a Government Accountability Office (GAO) report dated January, 2012.  The DOEIG and GAO reports were called to ensure that ARPA-E is funding projects that are deemed “high risk, high reward” and that encompass the “white space” in research.  The term “white space” refers to an area of research between basic research and market ready products.   A project that is deemed “high risk, high reward” would not be funded by the private sector because of the risk.  Consequently, ARPA-E was formed to ensure that the United States maintains its technological edge in the global market.  A committee majority staff report was compiled before the hearing and details the maority's findings and interpretations of the DOEIG and GAO reports.

 

Chairman Paul Broun (R-GA) opened the hearing by summarizing what ARPA-E was mandated to do.  He stated his interpretation of the GAO and DOEIG report findings, and how he concluded from the findings that ARPA-E had funded projects that the private sector was already funding.  He explained how ARPA-E is crowding out the private sector, investing in too many late stage technology developments, and picking winners and losers instead of letting the marketplace decide.  He closed his opening statement by reiterating that taxpayers should not be paying for “high risk, high reward” research that is already being supported by the private sector. 

 

In his opening remarks, Ranking Member Paul Tonko (D-NY) stated the design of ARPA-E is modeled after the Defense Advanced Research Projects Agency (DARPA), which notably produced the World Wide Web.  He voiced his support of ARPA-E and similar projects while reciting the difference in federal spending for renewable energy technologies in the U.S. ($18.6 billion) and in China ($36.8 billion).  He said he believes the findings of the GAO and DOEIG reports show ARPA-E has done nothing wrong, but “the majority staff wrote the report it wished to receive.”

 

In his testimony Director of ARPA-E Arun Majumdar said the U.S. currently imports 50 percent of its oil from hostile regions and that alternative means of energy need to be developed if we want to improve national security.  He emphasized the importance that alternative energies will play in securing the future, “Our children's and grandchildren's security is at stake, and that secure future is like a stool with three legs: national security, economic security, and environmental security.”  Majumdar made it known that cutting edge alternative energy technologies are in the process of being developed .  Majumdar concluded by stating two of the original mandates for ARPA-E - that a panel of experts chooses the projects to be funded and that if a project is not meeting the goals set forth by ARPA-E than funding is discontinued.

 

In the testimony of Gregory Friedman and the testimony of Frank Rusco, both assured the committee that their reports found ARPA-E to be adequately complying with and accomplishing its goals and mandates.  The GAO report found it impossible to determine if the funding for all ARPA-E projects could have come from the private sector, but they felt comfortable that “most” could not provide full funding.  Additionally, the GAO report outlined that there was no issue with overlapping of federal and private funding. 

 

Broun began the question and answer portion by questioning Majumdar on why ARPA-E funded projects that the private sector was financing separately.  Once again, Majumdar described that the research DOE was funding, although in the same general sector, was “high risk, high reward”.  Majumdar cited the GAO report as evidence that ARPA-E was not overstepping their role with the projects they are funding.  Broun used evidence from a chief executive officer (CEO) of an unnamed company that received ARPA-E funding.  He claimed that the CEO acknowledged they had received funding from ARPA-E along with private funding.  Chairman of the Full Committee Ralph Hall (R-TX) directed his questioning to Majumdar on how ARPA-E fits into DOE.  Majumdar replied that DOE Secretary Steven Chu has announced on several occasions that ARPA-E is one of his top priorities, but that Congress ultimately decides where the funds go.  Hall then asked Friedman if ARPA-E was in good standing.  Friedman replied that of the sampled ARPA-E research projects that they investigated everything appeared to be in good standing.  Representative Brad Miller (D-NC) focused his questioning on the cooperation of ARPA-E with the Inspector General and GAO.  As a former chair of the Subcommittee on Investigations and Oversight, Miller said he found that top agencies looked at similar investigations as unwanted criticism.  Once the witnesses responded that ARPA-E had cooperated with the investigations, Miller praised ARPA-E for being compliant and for their willingness to adapt to suggested changes.  Representative Roscoe Bartlett (R-MD) took his allotted time to warn that our supply of oil is not going to be able to meet the demand and that there will be “geopolitical consequences” in the very near future.  He praised ARPA-E for their work and told Majumdar how he wishes that ARPA-E had been around twenty years ago.

 

Opening statements, witness testimonies, and a webcast of the hearing can be found on the committee web site.