“I like to think of it as a $400 million Manhattan Project tucked inside the $800 billion stimulus.”
~Michael Grunwald, author of The New New Deal 

We need to ask ourself about the role of government in helping to solve the problems of the country.  In this case – the Department of Energy has a small agency called ARPA-E modeled after DARPA – the venture capital wing of the Pentagon.  In this case – the Department of Energy has hired some of the world’s best and brightest and has given them a budget to fund next-generation energy projects.  And this wouldn’t have happened without President Obama making this a priority in the economic stimulus he passed in 2009.

Now – some of those deals are going to go bad but the vast majority of them go as planned or better than expectations.  Inevitably – in politics as soon as something goes bad … you have some politician trying to make the failure political.  But the government guarantees bank deposits for banks for the greater good and they guarantee FHA loans for first time home buyers and they guarantee student loans.  The government guarantees a whole host of things but at the end of the day – the programs are structured with an inherent amount of risk – usually very low but always profitable for the government.

Many conservatives are against this type of funding, but without government assistance – America will be dependent on fossil fuels as venture capitalists are often not interested in funding many of these types of projects in full.  And these projects will not only create jobs in America but it will help create new industries and provide new products for consumers.  Conservatives are against it because it offends their ideology of “smaller government”.  I think government can be a source for good, but it will never be if you don’t want it to be.

The Atlantic has the must read interview HERE; an excerpt:

After receiving an unprecedented surge in funding for renewable energy courtesy of the American Recovery and Reinvestment Act, Chu set to work hiring big names from the nation’s top research laboratories, in order to staff a new agency called ARPA-E, modeled after DARPA, the R&D wing of the Pentagon. In just three years, ARPA-E has made more than 180 investments in basic research projects in renewable energy, and that’s in addition to grants issued by the Department of Energy proper, like the one that funded the Ocean Power Technologies project in Oregon.

The stimulus didn’t create vast new armies of government workers at alphabet agencies like the WPA or CCC; ARPA-E was its only new agency, with a staff the size of a major-league baseball roster. But it’s a really cool agency, the kind of place where Q from the James Bond movies would want to work. It actually had its roots in the Bush administration, when Chu served on a National Academy of Sciences panel on American competitiveness that released a report called Rising Above the Gathering Storm; one of its recommendations was an energy research agency modeled on the legendary DARPA at the Pentagon. The idea was to finance out-of-the-box, high-risk experiments, like an early-stage venture capital firm. Congress authorized it, but never gave it money to launch until the stimulus.

Technology Review points us to the political challenges of helping startups like Envia which could cut $5,000 off an electric battery on the 2nd generation Chevy Volts HERE:

Such views could rule out giving money to companies like tiny, 35-person startup Envia Systems, located in Newark, California. Following a $4 million grant from ARPA-E, it says it’s within sight of commercializing a high-capacity battery that would cut electric car battery prices in half.

“Venture capital funding took us half the way there and the ARPA-E funding took us all the way there,” declares CEO Atul Kapadia.

CNET gives us the 5 things they learned at the ARPA-E summit HERE:

• It’s all about the research.
• Entrepreneurs are getting smarter.
• Computing and info tech play a huge role in clean energy.
• Big companies are required.
• Lots of promise, but funding uncertain.

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