A High-Risk, Low Reward Strategy Could Lose the Future

by Jessie Daniels | June 17th, 2011 | |Subscribe

On Wednesday, the House Appropriations Committee voted to cut the President’s 2012 Department of Energy (DoE) budget request by $5.9 billion.  One particular victim was the Advanced Research Projects Agency-Energy – better known by its acronym “ARPA-E” – which supports and sustains many high-risk, high reward projects that the private sector cannot or will not fund on its own.  It is modeled after the Defense Advanced Research Projects Agency (DARPA), the agency that helped develop things like the precursor to the Internet, GPS, and predator drones.  Yet the House proposal includes only $100 million for ARPA-E, $450 million less than the President’s request and nearly $80 million less than current funding.

Unfortunately, ARPA-E may now also become known as the acronym for “A Reckless and Paltry Approach Endangers” when it comes to our national security.Established by the Bush administration but first funded by the Obama administration, ARPA-E has made solid progress in its infancy, in particular paving the way for private companies to invest in important innovation.  So far, six of ARPA-E’s clean energy projects have attracted more than $100 million in private capital investment and the projects are slowly but surely starting to make an impact.  In April, the agency announced a preliminary agreement to test an important new energy storage technology; the company that is likely to be the first candidate used a $750,000 grant from ARPA-E to advance its technology enough to raise $12 million privately.

Funding cuts, however, would leave the agency in a precarious position to carry out its mission and jeopardize its future potential.  As Dan Reicher, the Executive Director of Stanford’s Steyer-Taylor Center for Energy Policy and Finance, testified before the House Natural Resources Committee earlier this month, “without adequate federal funding…the institutional promise of ARPA-E will not be realized.”

Why must the institutional promise of ARPA-E be realized?  Because not doing so carries enormous national security implications.  For example, take the issue of rare earth elements (REE).  REEs are used in a wide variety of products across the world ranging from laptops to guided missiles.  China, however, controls at least 96 percent of the global supply and this month took further steps to tighten government controls over the industry by creating a rare earth monopoly in the Inner Mongolia region.

ARPA-E, meanwhile, is taking steps to ease America’s dependence on REEs, directing some of its new grant for clean energy research toward rare earth alternatives.  But if further research and development on this front is disrupted because of insufficient funding, it could have far-reaching costs beyond the energy sector.  Continued REE dependence could make “the U.S. economy vulnerable to shortages, tariffs and disruptions that might be spurred by diplomatic tensions” while “China could very well use its rare earths supply to control U.S. defense production.”

Underfunding ARPA-E is a high-risk, low reward strategy that will hinder innovation and increase our vulnerability.  This is not what it takes to “Win the Future.”  Imagine if the same attitude had existed with respect to DARPA – and the advancements that would have been stifled or lost as a result.  ARPA-E has the same potential as DARPA. It would be a shame if the only risk we took going forward was with our long-term security.

The views expressed in this article are those of the author and do not necessarily represent the views of Partnership for a Secure America.


  1. Peter John wrote,

    Idiots! We are going to run out of energy soon. We should be spending ten times what we are spending now.

    Comment on June 22, 2011 @ 6:35 am

  2. Jordan wrote,

    The economic crisis broken out make all world people faced with life and work crisis .

    Comment on September 22, 2011 @ 8:36 pm

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All blog posts are independently produced by their authors and do not necessarily reflect the policies or positions of PSA. Across the Aisle serves as a bipartisan forum for productive discussion of national security and foreign affairs topics.