Multiple media cover the release today of recommendations from an impressive group of CEOs — the American Energy Innovation Council (www.americanenergyinnovation.org).  Like the CEO and retired military-led Securing America’s Future Energy report of 2008, this group of disinterested CEOs recommend robust funding for and innovative new institutions to manage our energy research, deveopment, demonstration and deployment agenda.

While the WaPo and WSJ ran good pieces about the release of the AEIC’s recommendations, let’s go with the strong coverage by John Broder in today’s NYT.  Under the headline, “A Call to Triple U.S. Spending on Energy Research,” Broder lays out the substantive and political aspects of the recommendations quite well.

“The United States is badly lagging in basic research on new forms of energy, deepening the nation’s dependence on dirty fuels and crippling its international competitiveness, a diverse group of business executives warn in a study to be released Thursday. 

“The group, which includes Bill Gates, the co-founder of Microsoft; Jeffrey R. Immelt, chief executive of General Electric; and John Doerr, a top venture capitalist, urges the government to more than triple spending on energy research and development, to $16 billion a year. And it recommends creation of a national energy board to guide investment decisions toward radical advances in energy technology.”  Other executives in the AEIC are ”Norman R. Augustine, the former chairman of Lockheed Martin; Ursula M. Burns, chief executive of Xerox; Charles O. Holliday, former chief executive of DuPont; and Theodore M. Solso, chairman of Cummins.”

The Energy Strategy Board is the first of five recommendations made by the AEIC.  They also support DOE Secretary Chu’s energy innovation hubs and the Advanced Research Program Agency – Energy, or ARPA-E authorized by the America COMPETES Act in 2005 — but note that both of those institutions are woefully underfunded.  Innovation centers — consortia of universities, labs and private sector partners geared to tackle key issues in applied research — are currently funded at only $25 million.  Five or ten-fold increases would be appropriate, in AEIC’s view.  And ARPA-E, which received $700 million over the last two years for cutting edge, high risk, high reward research, was able to fund only 37 of the 37,000 projects seeking funds.  AEIC believes that entity should be getting at least $1 billion per year.  The group also recommends a new institution, the National Energy Challenge Program (NECP), that would report to the Energy Strategy Board and would run private-public partnerships to deploy commercial-scale, first-of-a-kind clean energy systems.  The AEIC urges devoting $20 billion over ten years as the federal investment in the NECP — an amount that would be matched by private sector partners on a per project basis.

Back to Broder:

“Mr. Gates said in an interview that drastic changes were needed in the way the United States produced and consumed energy to assure its security and to begin to address climate change. He endorsed the administration’s goal of reducing greenhouse gas emissions by 80 percent by 2050, but said that was not possible with today’s technology or politics.

“Among all the swirl of different ideas of how to raise the money and how to regulate carbon,” he said, “there is no way either in this country or internationally you’re going to come close to meeting an 80 percent reduction unless you have an immense breakthrough.”

“He said that the only way to find such disruptive new technology was to pour large sums of money at the problem, with the clear understanding that any number of ventures would fail before the eureka moment arrived.

“Mr. Gates and his fellow executives are stepping forward at what may prove a pivotal moment in American energy policy. Oil continues to spew from a crippled well in the Gulf of Mexico, the Obama administration is pushing for a new approach to energy and climate policy and the Senate is about to embark on a debate on a set of conflicting proposals that pit not only Republicans against Democrats but different regions of the country against each other.

There is no assurance that this latest effort will produce new ideas or bear fruit.”

That’s true, but it’s equally true that Gates and his colleagues do command attention and respect.  Both before and after the roll-out, the executives met with key congressional leaders and President Obama to explain their vision.

A powerful argument is the relative paucity of energy R&D compared to other investments:

“The group notes that the federal government spends less than $5 billion a year on energy research and development, not counting one-time stimulus projects. About $30 billion is spent annually on health research and more than $80 billion on military R.& D. They advocate a jump in spending on basic energy research because the private sector cannot provide that level of capital for unproven technologies, but do not say where the new money can be found.”

“When our company shifted our attention to clean energy, we found the innovation cupboard was close to bare,” said John Doerr, of the Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers. “My partners and I found the best fuel cells, the best energy storage and the best wind technology were all born outside of the United States.”

Mr. Gates said the group had not yet identified any potential breakthrough technologies, but was looking at advances in known energy sources — nuclear power, solar and wind — as well as in technology to store electricity and capture carbon dioxide emissions from fossil fuel plants.”

On a day when Senate Majority Leader Reid was soliciting energy policy ideas from his committee chairs, the AEIC provides a ready-made energy innovation title for immediate consideration.  Let’s hope the aura of innovation extends to the legislative process as well.

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