The Problem

Innovation in energy technologies is critical to America’s long-term strength and security—but current innovation policies are giving a good cause a bad name.

America lacks a coherent national energy policy, and our innovation efforts are hamstrung by outdated regulations, antiquated institutionsineffective federal innovation policies, and the many ways in which energy markets are distorted by a complicated web of local, regional, national, and international forces—subsidies, regulations, and market manipulations by organizations such as OPEC.

America needs national innovation institutions and policies that are both efficient and effective. Today, we have neither, and because of the high-profile failures of the Obama administration, many Americans now question whether government has any role to play in energy innovation at all.

Our position is simple: Let’s not throw the innovation baby out with the Solyndra bathwater.

We believe energy innovation can make Americans wealthier and more productive, make our energy supplies more abundant, affordable and reliable, protect the environment, and reduce political conflicts around energy extraction, generation, and transmission—if we get innovation right.

Getting innovation right requires a focus on the fundamentals:

  • Reform energy incentives to pay for performance rather than subsidizing failure.
  • Reorganize the nation’s energy research institutions around the innovation mission.
  • Refocus federal innovation programs on strategic energy technologies such as advanced nuclear reactors and carbon capture and sequestration.

Far from considering the Obama administration’s energy policy failures as proof that innovation is impossible, we see them as an indication of the opportunities for reform.

As with many issues, energy innovation suffers from the disproportionate influence of political advocates. That mindset has empowered an uncritical innovation agenda that disregards the limits of government’s competence and authority, wasting precious public resources on well-intentioned efforts that cannot succeed.

A solutions-oriented reform agenda starts with understanding the government’s appropriate role in energy innovation.