ARPA-E: A "$400 million Manhattan Project tucked inside the $800 billion stimulus”?

President Obama’s critics on the editorial board of the Wall Street Journal, in continuing an old complaint alleging stark deficiencies in the Obama record, recently listed ‘more subsidies for green energy’ alongside ‘more government spending disguised as ‘investment’’ and ‘more regulation.’

But concerning the new Advanced Research Projects Agency–Energy, or ARPA–E, that Secretary of Energy Steven Chu started during the Obama administration, consider a recent statement from Linda Stuntz. She’s a former deputy secretary of energy in George H. W. Bush’s administration and now represents former governor Mitt Romney. The opening paragraph of the Physics Today article ‘Romney, Obama surrogates spell out candidates’ energy policies ’ quotes her as follows: ‘Energy R&D should be done at a very basic level through something like ARPA–E, which has done a terrific job. It’s an apolitical funding mechanism, and it looks outside the box for basic R&D that wouldn’t otherwise be supported.’

Energy R&D and green energy R&D may not be identical, but it’s worth reporting that Ross Andersen of the Atlantic has interviewed writer Michael Grunwald and produced the article ‘The ‘silent green revolution’ underway at the Department of Energy .’ The piece amounts to an aggressive, confident defense of ARPA–E, including an energetic defense of the Solyndra effort that has drawn much derision.

Andersen reports that ARPA–E, which is designed to resemble the Pentagon’s nimble Defense Advanced Research Projects Agency, has made more than 180 ‘investments in basic research projects in renewable energy.’ In a characterization that might draw attention from those who emphasize that government agencies and businesses are hugely dissimilar entities, he asserts that ARPA–E has made itself into the world’s ‘biggest, greenest venture capital firm.’

He calls Grunwald a ‘veteran reporter’ for Time and mentions The New New Deal , Grunwald’s new book that, Andersen says, ‘details the history of the much-maligned American Recovery and Reinvestment Act'—the stimulus that enabled Chu to invent ARPA–E.

Here are highlights quoted from Grunwald in Andersen’s quite lengthy online Atlantic interview piece:

* Everything you think you know about the stimulus is wrong. It was not a pathetic failure. ... There were unprecedented investments in wind, solar, and other renewables; energy efficiency in every imaginable form; a smarter grid; cleaner coal; advanced biofuels; electric vehicles; the factories to build all that green stuff in the U.S., and yes, clean energy research. That money has really launched a silent green revolution.

* [ARPA–E] actually had its roots in the Bush administration. ... I like to think of it as a $400 million Manhattan Project tucked inside the $800 billion stimulus.

* As you may know I’m a biofuels skeptic. I wrote a Time cover story titled ‘The Clean Energy Scam’ that sounded the first big warning that farm-based biofuels—not just corn ethanol but palm oil, soy biodiesel, and anything else that used arable land—were ecological disasters in the making. ... But the stimulus included massive investments in second-generation biofuels made from farm waste, municipal trash, and other feedstocks that don’t need farmland.

* [In new fuels] most of the projects are going to fail, but a few success stories could transform the entire energy economy.

* [Solyndra] wasn’t a scandal. It was a loan that went bad, something that happens to any lender. ... It was an incredibly innovative company with an entirely new approach to solar, and it attracted $1 billion in private capital. The Bush administration selected it from among 143 applicants for the program’s first loan; it didn’t quite get completed before Bush left office, but it was at the top of the pile when Obama took over, and Republican investigators found nothing in the 300,000 pages of documents they subpoenaed to suggest there was anything hinky or political about the decision to award the loan. ... [I]t was inevitable that some of these loans would fail; as one White House official pointed out to me, some students who get Pell Grants end up drunks on the street.

* The stimulus isn’t really picking winners and losers in the traditional sense; it’s picking the game of clean energy, and financing thousands of different entrepreneurial and technological approaches to the problem, so that the market can pick the winners and losers. For example, the stimulus created a domestic advanced battery industry for electric vehicles from scratch, financing 30 different factories, a classic case of industrial policy. ... But we’ve been stuck in an imaginary debate about crony capitalism and waste.

* [Benefits from ARPA–E] should start to trickle out over the next few years. ... If Obama is reelected, he should have some fun breakthroughs to celebrate in his second term. And I suspect that if Romney wins, he’ll be only too happy to take credit for the celebrations on his watch.

Steven T. Corneliussen, a media analyst for the American Institute of Physics, monitors three national newspapers, the weeklies Nature and Science, and occasionally other publications. He has published op-eds in the Washington Post and other newspapers, has written for NASA’s history program, and is a science writer at a particle-accelerator laboratory.