250 General Science, Space & Technology:Eliminate the Advanced Research Projects Agency–Energy Program
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2016284
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2017285
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2018286
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2019289
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2020296
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2021302
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2022309
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2023317
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2024323
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2025329
-
2016-20201440
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2016-20253020
Sources
Savings are expressed as budget authority and were calculated by using the FY 2014 enacted spending levels as found in page 123 of House of Representatives, 113th Congress, 2nd Session, “Energy and Water Development Appropriations Bill, 2015.” The FY 2014 enacted spending was increased at the same rate as discretionary spending for 2016–2025, according to the CBO’s most recent August 2014 baseline spending projections.
×Technical Notes on Scoring
CBO Baseline
Unless otherwise noted, calculations for savings for each recommendation relies on the most recent Congressional Budget Office baseline, as found in “An Update to the Budget and Economic Outlook: 2014 to 2024,” published August 27, 2014, has been used.
Savings “Totals”
While totals for the five and 10 year savings are provided by section and for the complete set of recommendations, there are two reasons they should not be viewed as representing total savings for The Budget Book.
First, as noted in the introduction, The Heritage Foundation would recommend that the savings realized in the Function 050 Defense section would stay within the Department of Defense to strengthen the nation’s defense capabilities.
Second, the numbers cannot be deemed to represent the realized savings if every single recommendation were adopted because policy changes made in one program can impact spending levels in other programs. Thus, the numbers in the table do not reflect any potential interactions between the various policy changes affecting spending or savings.
×Heritage Recommendation:
Eliminate the Advanced Research Projects Agency–Energy (ARPA-E) program. This proposal saves $284 million in 2016, and $3 billion over 10 years.
Rationale:
The Advanced Research Projects Agency–Energy (ARPA-E) is another energy program designed to fund high-risk, high-reward projects on which the private sector would not embark on its own. ARPA-E also has the goal of reducing energy imports, increasing energy efficiency, and reducing energy-related emissions, including greenhouse gases.
The problem is that ARPA-E does not always seem to follow its own clear guideline: The federal government has awarded several ARPA-E grants to companies and projects that are neither high-risk nor something that private industry cannot support. These problems with ARPA-E were recently identified by the Government Accountability Office (GAO), the Department of Energy’s Inspector General (DOE IG), and the House Science, Space, and Technology Committee staff. Of the 44 small and medium-size companies that received an ARPA-E award, the GAO found that 18 had previously received private-sector investment for a similar technology. The GAO found that 12 of those 18 companies planned to use ARPA-E funding to either advance or accelerate prior-funded work.
High-risk, high-reward programs are not necessary, especially when there is a bias to fund technologies that have already received funding to make the program appear successful. Congress should restructure the DOE to conduct the basic research that the private sector would not undertake and create a system that allows the private sector, using private funds, to tap into that research and commercialize it. Federal labs should allow basic research to reach the market organically.
Contributing Expert
Nicolas (Nick) Loris, an economist, focuses on energy, environmental and regulatory issues as the Herbert and Joyce Morgan fellow at The Heritage Foundation.
Nicolas (Nick) LorisHerbert and Joyce Morgan Fellow
Heritage Experts
Jack Spencer oversees Heritage Foundation research on a wide range of domestic economic issues as director of the Roe Institute for Economic Policy Studies. Those topics include federal spending, taxes, energy and environment, regulation and retirement savings.
Jack SpencerVice President for the Institute for Economic Freedom and Opportunity
Katie Tubb is a Research Associate and Coordinator in the Thomas A. Roe Institute for Economic Policy Studies
Katie TubbResearch Associate and Coordinator
Additional Reading
- Nicolas Loris, “Department of Energy Budget Cuts: Time to End the Hidden Green Stimulus,” Heritage Foundation Backgrounder No. 2668, March 23, 2012.
- Matthew Stepp, Sean Pool, Jack Spencer and Nicolas Loris, “Turning the Page: Reimagining the National Labs in the 21st Century Innovation Economy,” The Information Technology & Innovation Foundation, June 19, 2013.