An Energy Innovation Agenda for the Trump Administration

Democrats and Republicans are girding for battle over energy policy. The two parties are far apart on most issues, like the future of the Clean Power Plan and federal restrictions on oil and gas drilling. But with the Presidential election in the rearview mirror, Donald Trump and the 115^th Congress have a chance to embrace a mainstream energy agenda with support from both sides of the aisle and deliver on campaign promises to create manufacturing jobs and boost exports.

Innovation is central to this agenda. Today the Information Technology and Innovation Foundation (ITIF) published a report that I wrote with my colleagues Teryn Norris, Colin McCormick, and David Hart, laying out a blueprint for how to accelerate energy innovation.

We believe this is a perspective that will resonate with the new administration. In fact, President-elect Trump’s choice for Secretary of State, Exxon CEO Rex Tillerson, has forcefully made the case for why energy innovation “will be vital in the decades ahead.” And former Texas Governor Rick Perry, tapped as Secretary of Energy, has remarked, “Energy innovation, it’s the quickest way to make our anemic economy very powerful.” This thesis has broad support among leaders in the private sector. Just yesterday, a group of wealthy investors led by Bill Gates unveiled Breakthrough Energy Ventures, a fund in excess of $1 billion to invest in early-stage clean energy technology companies.

But it will take enabling public policies to unleash private sector investment in energy innovation. In our report, we urge the federal government to:

Reform a sprawling set of institutions to increase the commercial impact of federal energy research, development, and demonstration (RD&D) and maximize taxpayer return on investment. These reforms should draw inspiration from experiences in other sectors, including life sciences, semiconductors, electronics, and agriculture, where breakthrough technologies have been successfully commercialized. We distill these lessons into five principles for institutional change that should be applied to key federal agencies, especially the U.S. Department of Energy (DOE):

1. Connect basic science with technology priorities;
2. Reorient the national labs to pursue commercially relevant RD&D;
3. Encourage more private investment in energy innovation;
4. Support demonstration projects; and
5. Complement “supply-push” policies with “demand-pull” policies.

These reforms will help focus federal energy-innovation resources on urgent and coherent needs. We put forward six candidates for these “Technology Missions”:

1. Nuclear power;
2. Solar energy;
3. Energy storage;
4. Carbon capture, utilization, and storage;
5. Advanced cooling and thermal energy storage; and
6. Smart energy management and connected vehicles.

To fund all of this, we recommend that the United States double its funding for energy RD&D, consistent with the Mission Innovation commitment that it and nineteen other major economies have made. Leading lawmakers on both sides of the aisle have expressed their support for boosting scientific research, so expanding doubling the budget for energy innovation to roughly $13 billion—a rounding error in the federal budget—is politically tractable. And we also offer avenues to supplement Congressional appropriations, for example by restructuring the Strategic Petroleum Reserve.

In promoting energy innovation, we argue that “President-elect Trump has an opportunity to make good on his campaign promises to create well-paid advanced-manufacturing jobs, protect the environment, embrace a diverse energy mix that includes fossil fuels, and boost the flagging U.S. trade balance.” His administration and the next Congress should seize it.

Read the full ITIF report here.