These statements provided the basis for an address by U.S. Secretary of Energy Steven Chu at the National Press Club yesterday in a talk titled, "The Energy Race: Our New Sputnik Moment."

It's well worth giving Sec. Chu the floor today. He runs the agency that has instigated much smart grid-related R&D aimed at implementing existing innovations for grid modernization, as well as fostering new innovations that will fuel this country's continued leadership in clean energy, the global space race of the 21st century.

With a new "Republican" majority in the House set to influence national policy beginning in January, this topic is timely. I place the term "Republican" in quotation marks, because the new majority bears little ideological resemblance to the party that once owned environmentalism throughout the 20th century, from Teddy Roosevelt to Richard Nixon. In short, to pretend that grid modernization is the sole province of engineering is a non-starter.

I offer Sec. Chu the floor not as a partisan favor-I'm a lifelong independent-but because he articulates a modern view that government policy can guide private investments that lead to wealth-enhancing innovations. The new House majority has declared itself hostile to a price on carbon, to the federal stimulus grants aimed at grid modernization, to the very existence of the U.S. Environmental Protection Agency, established under President Nixon. And this majority seeks to replace modern rationality with antediluvian views. That is not the stuff of global competitiveness.

Sec. Chu noted that Oct. 4, 1957, marked the Soviet Union's successful launch of Sputnik-the first artificial satellite to orbit the earth-and that a mere month later, President Eisenhower (a Republican) warned that the Soviets had a greater number of scientists and engineers than the U.S. This "long view of a moment of crisis" guided Chu himself into the sciences, where he received various federally financed fellowships on his path to a directorship of the Lawrence Berkeley National Laboratory and a Nobel Prize in physics.

Chu focused on China as his foil for illustrating the risks to American leadership in clean energy innovation. Chinese Premier Wen Jiabao told the World Economic Forum last year that "science and technology are powerful engines of economic growth. We will make China a country of innovation. We'll accelerate the development of a low-carbon economy to gain an advantageous position in international industrial competition."

To do this, the Chinese are copying the U.S. strategy of using government policy to guide the private investment that will play a leading role in R&D, according to Chu. The difference? China is five years into a long-range plan, while the U.S. has no formal energy policy at all.
"America still has the opportunity to lead," Chu said, "to produce the energy we need and to secure economic competitiveness."

Private Role

Apropos of his emphasis on the private sector's role, Chu touted a report titled, "A Business Plan for America's Energy Future," produced by a blue-ribbon set of technology executives under the auspices of the American Energy Innovation Council and released earlier this year.

According to the report, the pharmaceutical industry averages an annual R&D spend of 19 percent of total revenues, the aerospace industry spends 11.5 percent, the computer industry spends 8 percent and the energy sector .03 percent.

"Government must play a role in energy innovation," Chu argued. "The level of risk to investors cannot be borne completely by the private sector."

As to the difficulty of selling R&D in a recession, Chu quoted former Lockheed Martin Corp. Chairman Norman Augustine from the report.

"When faced with major challenges in a time of austerity, the last thing one should underfund is R&D," Augustine wrote. "To do so is equivalent to removing an engine from an overloaded aircraft in order to reduce its weight."

Apart from innovation's contribution to wealth creation, Augustine also noted that disruptions in energy supplies and climate change are likely to become major drivers of war, which introduces its own draconian costs.

Chu cited the recent federal stimulus investments in electric vehicle battery technology, the development of biofuels, investments to reduce the cost of photovoltaic cells by a factor of four (the magic number by which they'd reach "parity," or commercial viability without subsidies) and carbon capture and sequestration-all areas that may contribute to grid modernization.

"We face a choice today," Chu said. "Maintain American leadership or fall behind."

This eloquent plea for American leadership seemed well-timed to the results of the mid-term elections in which anger over the economy largely supplanted reason. Rejection of the Obama Administration's stewardship of its inheritance, a savagely wounded economy, does not equal a mandate for the new Republican majority in the House, by the latter's own acknowledgement.

With cap-and-trade dead and the rescinding of federal stimulus funding on the new House majority's agenda, which approach would you choose, dear reader?

The following story first appeared in Intelligent Utility and was authored by its editor, Phil Carson.