Electronic Design
Image courtesy of Lutz Marl Creative Commons

(Image courtesy of Lutz Marl, Creative Commons).

Trump's Budget Calls to Eliminate ARPA-E

President Trump's proposed budget for next year would gouge funding for an agency that invests in high-risk, high-reward energy projects. Without changes, the budget would eliminate the Advanced Research Projects Agency-Energy or ARPA-E as part of broad cuts to the Department of Energy.

The budget is a proposal and will almost certainly see changes from Congress, but it made headlines for adding billions of new military spending and cutting deep into health and environmental sciences. The move to eliminate ARPA-E is head-scratching because of its bipartisan support and the success of companies started with the agency's help.

Last year, Congress assigned an extra $32 million of funding to ARPA-E, which has funded over 400 energy projects ranging from megawatt silicon carbide transistors to microbes that make transportation fuel from hydrogen and carbon dioxide. It also funds early stage research into data center efficiency, renewables, and the electric grid. 

The measure, which raised the agency's budget to $325 million, passed the Senate in a 70-to-26 vote.

The agency launched in 2007 under President George W. Bush. Two years later, President Obama allocated $400 million in initial funding for the agency, which is modeled on the Defense Advanced Research Projects Agency or Darpa. The defense agency is credited with getting GPS technology and computer networking off the ground.

But Trump's budget request, submitted to Congress last week, argues that “the private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies." It calls for the Department of Energy to receive $28.0 billion in the next fiscal year, which represents a $1.7 billion cut from this year.

The Department of Energy is not seeing budget cuts across the board: the budget would mete out $1.4 billion in new funding to manage nuclear waste and the country's nuclear weapons stockpile. Other cuts would eliminate its Office of Energy Efficiency and Renewable Energy.

The Department of Energy has a brighter outlook than others parts of the government, though. The blueprint calls for taking 31% out of the Environmental Protection Agency's budget, while lopping 17.9% off the Department of Health and Human Services' budget.

Rick Perry, the U.S. Secretary of Energy, said in his confirmation hearing that he supported ARPA-E. But he said little after the proposed cuts came out last week. "The President's budget blueprint outlines a forward looking, mission focused budget for the Department of Energy,” he said in a statement.

“We must always do this while meeting the fiduciary duty we owe the American taxpayer,” he added.

Opponents of the proposed cuts say that agencies like ARPA-E help support economic growth and provide a financial lifeline for early-stage energy companies. Last month, ARPA-E reported that projects funded by the agency had received $1.8 billion in private follow-up funding since 2009. 56 projects have gone on to form companies.

“The Administration’s cuts threaten our nation’s ability to advance cures for disease, maintain our technological leadership, ensure a more prosperous energy future, and train the next generation of scientists and innovators,” the American Association for the Advancement of Science said in statement.

The ARPA-E program has a number of success stories. One is 1366 Technologies, which developed an inexpensive process for fabricating silicon wafers used in solar panels. Founded in 2008, the company has raised $98.45 million in funding. Another is Fluidic Energy, a start-up that developed a rechargeable zinc-air battery for storing large amounts of energy for cellular base stations and solar arrays. It has sold over 100,000 batteries since its 2006 founding.

Far from eliminating the program, some in the business world think that ARPA-E should have more resources. The American Energy Innovation Council, a group of former and current chief executives including Bill Gates and General Electric's Jeffrey Immelt, recommended in a 2015 report that the agency should have closer to $1 billion per year, and no less than $300 million.

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