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DOE Recovery Act Funds status, 9/30/11. Credit: recovery.gov

Two things out of the box: First, remember, permissum lector caveo (translation: What the hell does Peter know, anyway?). Second, the opinions expressed below are totally my own and should be blamed on no one else.

Thus forewarned … Nature has what strikes me as a very disturbing article out regarding the interesting ways funds from the American Recovery Reinvestment Act—you know, the ones earmarked to provide a sharp stimulus to direct and indirect hiring and spending in the science–technology sector—are being used for obviously non-stimulus purposes.

The story, “Stimulus-Response,” carries this summary one-liner: ”The United States’ 2009 financial stimulus bill has provided research with breathing space, rather than the sharp shot in the arm that many anticipated.”

(FYI, just so readers know where I am coming from, my personal point of view is that these types of stimulus programs can be excellent tools to quickly strengthen aggregate demand in the economy, especially during periods when borrowing rates are nearly zero, as long as the funding 1) is substantial in total size; 2) gets into the private economy; and 3) gets into economy quickly.)

Story author Colin Macilwain, seems like he is playing it overly safe or is unable to be able to make up his mind about what’s going on. On one hand, he correctly acknowledges that “the stimulus package as a whole was designed to create jobs and ease the pain of the recession, and at first the administration pledged to get this money distributed and spent as quickly as possible.” [emphasis added]

But from there onwards, the piece is a series of vignettes – focused on ARRA monies available at NIH, NSF and DOE’s Office of Science (collectively $15.1 billion) – about how interesting it is that researchers and institutions have unexpectedly used much of the money to buy “breathing space” for what already exists. For example, there’s this,

From the beginning, however, the funding pulse didn’t have quite the anticipated effects. Duke University in Durham, N.C., for example, expected a hiring rush after it attracted $210 million in ARRA funds, making it one of the ten most successful universities in the country in this regard, says Jim Siedow, Duke’s vice-provost for research. But staffing barely budged. “We gave a party that nobody came to,” he says. “A lot of people used the money to keep the people they already had.”

In the next paragraph, Macilwain reports

[D]espite the early political pressure to get the money out of the door quickly, agencies have allowed funds to be released gradually, to avoid waste.

Macilwain does suggest that whatever claims of job creation reported under ARRA funding are suspect because they rely on self-reported data and may reflect the continuation of previously existing jobs.

Finally, a chart accompanying the story says that NIH, NSF and the Office of Science have only spent 55 percent of their ARRA allocations. (In fact, DOE, alone, has left unspent $15 billion of ARRA money.)

Macilwain is overly generous when he describes what’s going on as a “stretching out and morphing.” He and Nature may not want to say it, but this pretty clearly indicates some enormous failures in the ARRA.

Let me be clear here: The criticism isn’t that the monies won’t eventually be helpful to R&D — they will be. My criticism is that the monies, now, can’t be helpful in the ways that would have been the most helpful and with the greatest impact for science and the nation.

The most glaring failure is that the administration and these agencies have not spent the ARRA money fast enough. As I have written before, I think that DOE Secretary Steven Chu was exactly right when in February 2009, just two days after the ARRA legislation was signed, he announced “a sweeping reorganization of the DOE’s dispersal of direct loans, loan guarantees and funding contained in the new recovery legislation. The goal of the restructuring is to expedite disbursement of money to begin investments in a new energy economy that will put Americans back to work and create millions of new jobs.” Chu also went on to promise to disperse 70 percent of the investment by the end of 2010.

But, the DOE didn’t come close to that dispersement goal in 2010 and it looks like it won’t make it by the end of 2011 either. As the chart above indicates, the agency reports this week that it has only spent 56 percent of its ARRA funds. With unemployment around 10 percent, leaving $15 billion on the table is an administrative shame and embarrassment.

A couple of important distinctions and economic points must be made here in regard to the concept of “spending” in this context. ARRA money that is held by a principle investigator or an institution but unspent is far different than DOE, NSF or NIH unspent monies. Dispersed money is in the economy and is arguably stimulating, well, something. Undispersed money is not in the economy and stimulates nothing because it is “funny money” that doesn’t really exist until the checks are sent and cashed. It’s not like DOE has the undispersed $15 billion in a bank account somewhere.

Put even another way, by definition, as soon as either funder or fundee starts to play the game of “stretching out and morphing” nondispersed stimulus funds, the funds cease to be able to stimulate anything.

In its defense, the DOE would probably point to the approximate 45,000 jobs it claims to have created via the ARRA, but as noted above, that number would hold more weight if it was verified and actually represented all new jobs.

What went wrong? My guess is a couple of factors have created failures at the policy level. The first factor is that it appears that the agencies have been overly preoccupied with accountability. Regardless of the Solyndra situation (which still looks to me to be about malfeasance and not accountability), DOE and the others should have figured out a way to issue all ARRA funding shortly after it was allocated. (All of the DOE funding has been allocated for over a year.) Unemployment has been and still is a much bigger problem in theory and in fact than the possible misuse of ARRA money.

The second factor is that long-standing agency habits are really, really hard to break. I spent much of two decades trying to change and redesign/reengineer government operations. Getting a large bureaucracy to implement something like a large novel stimulus funding effort is very difficult, but it can be done.

Along these lines, one mystery is what happened to Matt Rogers? Chu selected Rogers, who had been working on energy issues at the well known McKinsey & Co. consultancy, to be the DOE ramrod for whatever changes were needed in the agency to expedite the grants, loans and loan guarantees, and he was given the title Senior Advisor to the Secretary of Energy for Recovery Act Implementation.

Rogers, however, was never very visible to those of us on the outside. On occasion, he would be tasked with making some public appearances. But, while other federal agencies were quick to spend their ARRA money, as I have reported on many times, DOE was slow to spend from the start.

I suspect that Rogers was the right man for in the wrong job. I don’t doubt he had expertise in energy market strategic planning, but I don’t think he had any systems management expertise or track record in this field. It didn’t help that Rogers engaged in the allocation-versus-spending word games or criticism of us writers who nagged about the DOE’s sluggish dispersements. Cocky, premature and inaccurate videos about job creation were also a mistake.

Rogers claimed in September 2010 that DOE jobs would peak during that quarter at 45,000 and hold that level for the next six quarters. In fact, as is apparent in the above graph, (self-reported) jobs numbers didn’t reach or surpass 45,000 until the first quarter of 2011 and appear to be heading downwards already. I, for one, am not surprised that Rogers has quietly returned to his post at McKinsey & Co.

For researchers, keeping a steady flow of funds is never easy. Likewise postdocs and post-postdocs are looking for new opportunities, and lab suppliers are struggling to crawl out of the recession. So, I get that people have to resort to “stretching and morphing” when times are particularly tough. But there is still more than $15 billion unspent. Let’s focus on acknowledging and fixing the ARRA funding bottle necks instead of making up terms that paper-over how dysfunctional things are.

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Energy secretary, Steven Chu, and ARPA-E director, Arun Majumdar. Majumdar recently announced the next Energy Innovation Summit will be Feb. 27-29, 2012. Credit: ARPA-E

The lead story in today’s ARPA-E e-Newsletter is an announcement for the 2012 rendering of the ARPA-E Energy Innovation Summit. Among the keynote speakers is Bill Gates.

Really? What does Gates know about disruptive energy technology? Just because Gates sees himself as the go-to guy for public health, education and Other World Problems, what street cred does he really have beyond his big bucks?

My colleague, Peter Wray, points out that “[Gates] knows something about how to exploit an opportunity, which is actually a pretty rare business talent,” but that Gates tends to stick to a “conventional wisdom” position, which is diametrically opposed to ARPA-E’s mission.

All three keynote speakers have run successful, very large businesses, but not energy businesses and not even high tech (non-software) businesses. Are disruptive energy technologies mature enough to bring in the Big Business guys for their advice? I’m not convinced.

From the e-Newsletter:

ARPA-E’s Director, Dr. Arun Majumdar recently announced that the third annual ARPA-E Energy Innovation Summit will be held from February 27 - 29, 2012 at the Gaylord Convention Center just outside Washington, D.C. Now in its third year, the Summit is designed to unite key players from all sectors of the nation’s energy innovation community to share ideas for developing and deploying the next generation of clean energy technologies. Last year’s annual ARPA-E Energy Innovation Summit attracted more than 90 speakers and 2,000 attendees from 49 states and 20 countries.

Program highlights Include:

Keynote Addresses by:
• Dr. Steven Chu, Secretary of Energy
• Dr. Arun Majumdar, ARPA-E Director
• Mr. Bill Gates, Founder and Chairman of Microsoft
• Mr. Fred Smith, Chairman, President and CEO of FedEx
• Mr. Lee Scott, Chairman, BDT Capital; Former CEO, Wal-Mart

Expanded Technology Showcase featuring:
• More than 150 exhibits from ARPA-E-funded projects and applicants
• New ARPA-E programs of other energy technologies
• A wide range of other exciting new topics and areas

A unique opportunity for the entire energy ecosystem - researchers, entrepreneurs, investors, top corporate executives, and government officials - to build lasting partnerships.

Many more speakers will be added in the coming months. Check the Summit website for the latest news and to register.

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DOE artist concept of enhanced geothermal system. Source: EERE/DOE.

The Department of Energy just announced that it has $70 million to spend on proposals for technology advancements that can accelerate geothermal energy development. The new monies come will be available through a new competitive funding initiative that falls under its Geothermal Technologies Program. The new funding would be spread out over three years.

In a news release, DOE says it hopes the effort will “reduce the upfront cost of geothermal energy systems, expand their use and enable the United States to tap the huge potential of this renewable energy resource.”

Although no specific cost-reduction targets are mentioned, DOE does say that its ultimate goal is to have geothermal systems make “economically competitive” contributions to the U.S. energy supply. The agency highlights a U.S. Geological Survey report that new geothermal resources could add up to 30 gigawatts of renewable energy to the U.S. and adds that “enhanced geothermal systems — through the development of engineered reservoirs and other methods — have the potential for an even greater impact.” Elsewhere, DOE mentions that “enhanced” geothermal systems may up that number to 100 gigawatts

In the release, DOE Secretary Steven Chu says, ”The United States remains a global leader in geothermal energy development, and we can leverage our experience to develop more energy here at home while increasing our competitiveness in the global clean energy economy.”

DOE specifically mentions that it wants research proposals in six technical areas:

• Advanced Exploratory Drilling: To reduce the cost of exploratory drilling through advanced drilling bits, innovative and temperature hardened rock reduction technologies and casing-while-drilling systems.
• Advanced Well Completion: To reduce cost of completing geothermal wells through novel hole openers, effective measurement and/or logging while drilling, leaner casing designs and pressure and corrosion-resistant casing.
• Tools to Isolate Fracture Zones within a Well: To control the injection and production of water in geothermal systems by developing packers, tubular materials, valves, and/or non-mechanical diverters, etc. that are drillable, retrievable, or degradable and capable of operating with under specific pressures, wellbore diameters and temperatures.
• Observation Tools and Data Collection System for Reservoir Stimulation: To monitor and optimize reservoir creation through new observation tools, including individual components for high precision seismic monitoring, fluid flow, downhole pressure measurement and other monitoring devices to support reservoir stimulation activities; and innovative data collection systems and/or techniques combined with advanced technology to provide superior monitoring capabilities for low-amplitude events associated with geothermal exploration, development and operational activities.
• Geophysical Exploration Technologies: To develop remote sensing and to improve data processing and advanced seismic surveying technologies to better locate hidden resources.
• Geochemistry and Rock-Fluid Interactions: To enhance characterization of geothermal resources and predicting reservoir temperatures via improved geothermometers and geochemical tools to assist in discovering blind systems, fluid-rock interaction research to improve reservoir creation and reservoir sustainability, improved nderstanding of permeability using chemical signatures and improved rocessing of different geochemical signatures.

In particular, the agency says it is looking for partnerships among industry, national laboratories and academia.

Details about the technical areas, eligibility requirements and application instructions can be found here.

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Credit: DOE

The next few days should be fun for materials scientists and engineers. Tomorrow (May 25) begins the start of a three-day meeting where participants in the DOE’s 46 Energy Frontier Research Centers will begin the initial reporting-out (at least to the public) about what kind progress they have been able to make. There is a PDF brochure about all of the projects here.

These shouldn’t be expected to be anything close to final reports; most of the EFRCs are five-year projects begun in 2009, so they are only about one-third of the way through their work. It’s probably better to think about what will be reported as a combination of status report and dog-and-pony-show. I don’t intend this latter description to be taken as a negative. Political realities being what they are, the DOE and the Obama administration (not to mention the research teams, themselves) need to show how the monies for these projects are being spent, and what some of the eventual payoffs might be.

Unlike ARPA-E, the EFRCs are less applications- and deployment-oriented, and more aimed at basic science and discovery. The idea was to form “dream teams” of researchers who focus on fundamental breakthroughs needed for a new generation of “production, conversion, storage, transmission and waste mitigation.”

Put another way, without advances in basic science, applied technology and engineering would soon be tapped out. At the beginning, five major challenges were described:

• How do we control material processes at the level of electrons?
• How do we design and perfect atom- and energy-efficient synthesis of revolutionary new forms of matter with tailored properties?
• How can we master energy and information on the nanoscale to create new technologies with capabilities rivaling those of living things?
• How do remarkable properties of matter emerge from complex correlations of the atomic or electronic constituents, and how do we control these properties?
• How do we characterize and control matter away – especially very far away – from equilibrium?

One thing EFRCs have in common with ARPA-E projects is that there is considerable risk involved, at least in the sense that not every project is going to hit the jackpot. The EFRCs involve some highly theoretical and esoteric fields of study, so some educated guesswork had to be employed by DOE after it received over $1 billion in proposals (but only had the funding for about one-third). In this case, it’s better to think of the DOE as a venture capitalist who put together a large portfolio of promising investments knowing that there will be an enormous payoff even if only a few elements of the portfolio pan out.

I am sure we will be hearing much more in the next few days, but the DOE is teasing us with developments in four intriguing (and, coincidentally, materials-intensive) areas:

Microscopic Battery Charging — Lead institution: University of Maryland

“This research team has built the world’s smallest lithium battery inside an advanced microscope, and for the first time has been able to watch how its structure changes while it’s being charged. Understanding these changes may enable new design and production of batteries that perform better and last longer.”

Safer Materials for Nuclear Reactors — Lead institution: Los Alamos National Laboratory

“Using a combination of modeling tools, the research team is looking at improving the safety of our nuclear reactors and has discovered possible ’self-healing’ mechanisms for nuclear reactor materials.”

Controlling How Light Interacts with Materials — Lead institution: California Institute of Technology

“Using computer simulation, the research team found that small glass spheres could affect the absorption of sunlight by solar cells by helping to collect and retain light. The small glass spheres could enable efficient coupling of sunlight to ultrathin semiconductor layers, significantly increasing solar cell efficiency and cost-effectiveness.”

Improved LED’s for Homes and Businesses — Lead institution: University of California, Santa Barbara

“A new understanding of the mysterious drop-off in efficiency when LEDs are subjected to strong electric current could eventually help remove barriers to widespread use of low-energy solid-state lighting for homes and industry, greatly reducing power usage.”

In a 2009 interview I did with John Hemminger, who chairs the DOE’s Basic Energy Sciences Advisory Committee, he spoke optimistically about the prospect for EFRC success. ”We’ve developed capabilities to do certain materials engineering at an atomistic, nanometer-scale level combined with revolutionary computational abilities to predict materials properties in advanced of making them. We are at the dawn of a new age called control science, where we can say, ‘these are the properties we need,’ we can predict what the materials need to be like, and we have a way to make them,” he said. “Fundamental understanding of complex materials is essential to crating new energy strategies,” he said.

I also think the EFRCs have a far less discussed benefit: They also represent, to a large extent, investments in promising early-career scientists, and I give credit to DOE Secretary Steven Chu for noting in a news release that, ”In just two years, these research centers have inspired a new generation of talented young Americans to dedicate their careers to meeting our nation’s energy challenges.”

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