Washington (Platts)--27Apr2009

President Barack Obama on Monday pledged broad support of US scientific
research, including development of new energy technologies, and formally
announced a new, $400 million Department of Energy program that will support
cutting-edge energy research.

"The nation that leads the world in 21st century clean energy will be the
nation that leads in the 21st century global economy. American can and must be
that nation," Obama told an annual meeting of the National Academy of Sciences
in Washington. He was joined by Energy Secretary Steven Chu and the White
House science adviser, John Holdren, among others.

The Advanced Research Projects Agency-Energy will be directly overseen by
Chu's office, and will be aimed at funding "high-risk, high-reward" research.
The program was created by the America COMPETES Act in 2007, but was not
funded until Obama provided $400 million for it in his economic recovery
package.

ARPA-E will be modeled on the Pentagon's Defense Advanced Research
Projects Agency, which has been behind such innovations as stealth aircraft
technology and the Internet.

The White House announced Monday that DOE's first solicitation will focus
on proposals that have a solid research and development plan for a new or
transformational idea.

"Under this announcement, ARPA-E will fund energy technology projects
that (1) translate scientific discoveries and cutting-edge innovations into
technical innovation and (2) accelerate transformational technological
advances in areas that industry is not likely to undertake independently
because of high technical or financial risk," according to the White House.

Chu has said it could take months to set up the ARPA-E office at DOE, and
it is unclear when the department would release this solicitation.

Obama also lamented the fall in investment the US had made over the past
25 years in basic research, and said he would set a goal of devoting more than
3% of US GDP to research and development, including energy research.

"We will not just meet, but we will exceed the level achieved at the
height of the space race, through policies that invest in basic and applied
research, create new incentives for private innovation, promote breakthroughs
in energy and medicine, and improve education in math and science," Obama
said.

The administration intends to spend $150 billion over the next ten years
on energy efficiency and renewable energy research, and double funding for
DOE's Office of Science, according to Obama.

The White House increased DOE science office funding from $4 billion in
fiscal 2008 to $4.8 billion in the fiscal 2009 budget, and also included $1.6
billion for the office in the economic stimulus package.

To help increase the number of energy scientists and engineers in the US,
Obama also announced that DOE and the National Science Foundation would
jointly launch a program to promote education in clean-energy fields, called
RE-ENERGYSE.

The program would support outreach to young people, and research for
undergraduates, as well as for women and minorities. It would also promote
research collaboration between academic institutions and companies, among
other things.

Obama compared the focus needed in a quest for alternative, clean energy
to that of the space race, when the Soviet Union's launch of the Sputnik
satellite galvanized the US to fund space exploration and inspired students to
pursue careers in science and engineering.

"The fact is, there will be no single Sputnik moment for this
generation's challenge to break our dependence on fossil fuels," Obama said.
"That is why I have set as a goal for our nation that we will reduce our
carbon pollution by more than 80% by 2050. And that is why I am pursuing, in
concert with Congress, the policies that will help us meet this goal."

Those policies include tax credits and loan guarantees to promote
renewable energy, as well as funding for more energy research. They also
include a controversial proposal to cap carbon dioxide emissions and create a
market to trade the rights to those emissions.

The White House on Monday also said it would be supporting 46 Energy
Frontier Research Centers through DOE with $777 million. Those centers would
receive about $2 million to $5 million per year for about five years, to
support energy research at universities, national laboratories, companies and
non-profits.
--Derek Sands, derek_sands@platts.com