demonstration and commercialization efforts to regain and/or maintain the scientific, technical, and market leadership of the United States in energy technology. This should include increased R&D particularly in collaboration with developing countries, temporary support for D&C activities where appropriate, and responses to foreign export promotion activities where necessary. DOE Management of Its Energy R&D Programs The necessity of linking fundamental research with applied R&D and with demonstration and commercialization, the increasing complexity of R&D efforts, globalization of R&D and technology markets, heightened global market competition, and other evolving factors in the energy field have several important implications for energy R&D management. The complexity and technical demands of R&D require increased industry/national-lab/university peer review and technical oversight and direction of R&D programs. Linkages require improved coordination. Better communications can enable reduced administrative procedures and management overheads, and can improve coordination by pushing these responsibilities down to the operational level. Efficient use of resources requires careful establishment of R&D targets and timelines, and ongoing measurement of progress. Although DOE has been making some efforts in these areas and some programs are beginning to establish effective models that can be applied more broadly, in general these factors need to be better addressed in DOE energy R&D management. To address these management issues, and above all to increase the efficiency with which public dollars invested in energy R&D yield the results that the national interest requires, the Panel offers the following specific recommendations: • Overall responsibility for the DOE energy R&D portfolio should be assigned to a single person reporting directly to the Secretary of Energy, similarly, a single individual should be given the responsibility and authority for coordination of crosscutting programs between the applied-technology programs, reporting to the single person responsible for the overall R&D portfolio. Industry/national-laboratory/university technical oversight committees should work with DOE to provide overall direction to energy R&D programs, with DOE facilitating and administering the process; • All R&D programs should undergo outside technical peer review every 1 to 2 years, but interim internal process-oriented reviews should be reduced to a minimum. DOE staff technical skills should be strengthened by training, targeted hiring, and by systematically rotating external technical (and managerial) staff through DOE as senior professionals with significant responsibilities for all aspects of program management. • Lead laboratories should be named and laboratories should be treated by DOE as integrated entities, not as collections of projects independently controlled from DOE headquarters. • Industry/laboratory/university partnerships should conduct the energy R&D that is funded by DOE, in most cases. The national laboratories should be encouraged to perform work for clients other than DOE, inside and outside the government, as appropriate, and processes for doing this should be streamlined. • DOE staff procedures for energy technology programs should be reviewed in detail, and staff levels adjusted accordingly. CONCLUDING OBSERVATIONS AND ONE MORE RECOMMENDATION Funding and managing the energy R&D needed to help address the energy challenges and opportunities of the next century are tasks not for the Federal government alone but for all levels of government, for industry, for universities, for the nonprofit sector, and for a wide variety of kinds of partnerships among entities in these different categories. The Panel's charge was to review Federal energy R&D, but we have been attentive to the ways in which the role of the government relates to and interacts with the roles of the other sectors. Our recommendations aim to focus the government's resources on R&D where high potential payoffs for society as a whole justify bigger R&D investments than industry would be likely to make on the basis of its expected private returns, and where modest government investments can effectively complement, leverage, or catalyze work in the private sector. The funding increases we are proposing for Federal energy R&D, in order to better match the combined energy R&D portfolio of the public and private sectors to the energy-related challenges and opportunities facing the nation, appear quite large when expressed as percentage increases in some of the particular DOE programs that would be affected. But the increase in annual spending-amounting altogether to an extra billion dollars in 2003, compared to that in 1997, for R&D on all the applied energy-technology programs together-is equal to less than a fifth of one percent of the sum that U.S. firms and consumers spent on energy in 1996; and it would only bring the Department of Energy's spending on applied energy-technology R&D back to where it was in 1992, in real terms. The potential returns to society from this modest investment are very large. They can be measured in energy costs lower than they would otherwise be, oil imports smaller than they would otherwise be, air cleaner than it would otherwise be, more diverse and more cost-effective options for reducing the risk of global climate change than we would otherwise have, and much more. If this is such a good case, why hasn't it been made and accepted before now? Actually the case has been made often before, by energy experts and by studies like this one. It has not been entirely heeded for a variety of reasons, most of them discussed above and many of them 57-713 99-13 perfectly understandable. But perhaps the most important reason that the government today is not doing all that it should in energy R&D is that the public has been lulled into a sense of complacency by a combination of low energy prices and little sense of the connection between energy and the larger economic, environmental, and security issues that people do care very much about. In a way the low priority given to energy matters is reflected even in the Department of Energy itself, where energy is only a modest part of the Department's array of missions and there is no official responsible for all of the Department's energy activities and those alone. What we have here is thus, in part, an education problem. There needs to be more public discussion and a growing public understanding of why energy itself-and therefore energy R&D is important to the well-being of our nation and the world. In this the scientific and technological community has an obvious role to play, and we hope this report will be seen as a positive contribution to that. But the Federal government, led by the President, also has an important educational role to play, reflected in what is said and in what is done. As the last of the recommendations in this report, which was commissioned by the President, we therefore offer the following: We believe the President should increase his efforts to communicate clearly to the |