Opening Statement

Full Committee Hearing on PACE-Energy Legislation

February 15, 2006

The subject of our hearing today is the “Protecting America’s Competitive Edge Act through Energy Act,” also known as,  “the PACE-Energy Act.”  PACE-Energy is one of a package of three bills that together will implement the twenty recommendations of the recent National Academy of Sciences (NAS) report, Rising Above the Gathering Storm. 

The Gathering Storm report describes an issue of national urgency. It sounds the alarm that our global competitiveness will continue to erode if we do not take action.  

There are already troubling signs that the United States is losing its relative advantage in science and high-tech fields. For example, In Industry:

•  The share of leading-edge semiconductor manufacturing capacity owned or partly owned by U.S. companies today is half what it was as recently as 2001.

• Of 120 new chemical plants being built around the world with price tags of $1 billion or more, only one will be in the U.S. while 50 will be in China.

In Education:

• In 1999, 68 percent of 8th grade students received instruction from a mathematics teacher who did not hold a degree in math or science

• In 2000, 93 percent of students in grades 5 through 9 were taught physical science by a teacher lacking a major or certification in the physical sciences.

For more perspective on our performance in science and math education, consider what Jeffrey Immelt, Chairman and CEO, General Electric said recently on the topic:

“If you want good manufacturing jobs, one thing you could do is graduate more engineers.  We had more sports exercise majors graduate than electrical engineering grads last year.  If you want to be the massage capital of the world, you’re on your way.”

The Gathering Storm report was written by a committee chaired by Norm Augustine, the former chairman of Lockheed Martin.  Mr. Augustine’s committee included twenty individuals from the highest levels of industry, universities, and government.  The committee included three Nobel laureates, presidents of leading U.S. universities, and the chief executive officers of multinational corporations. 

The charge to Mr. Augustine and his committee was to develop a list of specific policy recommendations to bolster U.S. Competitiveness.  The Committee produced an impressive report, and a list of twenty recommendations, after an intense ten weeks of effort. 

Their recommendations all address a central problem.  That is, we are not doing enough to harness, and develop, our national brainpower.   The report recommends significant increases in our investments in science and mathematics education at all levels – kindergarten through high school, college, and graduate school. 

We are going to put those recommendations into action through our PACE legislation.  Here’s some of what our legislation will accomplish.

PACE-Energy also calls for the creation of a new authority within the Department of Energy, the Advanced Research Programs Authority – Energy, or, “ARPA-E.”  ARPA-E will drive innovation in energy technologies by supporting high-risk but potentially high-pay-off research.  I would like ARPA-E to provide the kind of successes that we have seen emerge from the Laboratory Directed Research and Development funds, called “LDRD.”   
We need to take U.S. competitiveness seriously.  We need to take action to support our standard of living, and ensure we continue to grow and prosper.  If we do not, we can expect other nations to rival our global competitiveness – and one day to surpass us.
I am looking forward to learning more about these issues from our witnesses. I’ll turn now to the ranking member, Senator Bingaman, for his opening statement.

Rising Above The Gathering Storm:
Energizing and Employing America for a
Brighter Economic Future

 
Testimony Regarding S. 2197, Protecting America’s Competitive Edge – Energy

Statement of

Charles M. Vest
President Emeritus, Massachusetts Institute of Technology

And

Member, Committee on Prospering in the Global Economy of the 21st Century
 Committee on Science, Engineering, and Public Policy
Division on Policy and Global Affairs
National Academy of Sciences, National Academy of Engineering, Institute of Medicine

before the

 Committee on Energy and Natural Resources
 U.S. Senate

February 14, 2006

Chairman Domenici, Ranking Member Bingaman, Members of the Committee.

I am Charles Vest, former president of MIT.  I was privileged to serve under Norman Augustine as a member of the National Academy of Sciences, National Academy of Engineering, and Institute of Medicine’s committee on Prospering in the Global Economy of the 21st Century that produced the report Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.  I also am the past vice chair of the Council on Competitiveness that developed the National Innovation Initiative, and am a member of the President’s Council of Advisors on Science and Technology.  In 2003, I chaired the Secretary of Energy Advisory Board’s Task Force on the Future of Science Programs at the Department of Energy.

INTRODUCTION

It is an honor to contribute to your discussion today of S. 2197, the Protecting America’s Competitive Edge through Energy Act of 2006, (the PACE-Energy Act) part of a comprehensive package of legislation you have introduced to help ensure continued American leadership and prosperity in the rapidly evolving global, knowledge-based economy of this new century.

Above all, on behalf of our committee, thank you for your leadership.

America today leads the world in science and technology, and I believe that we are the most innovative nation on the planet.  Our economy, which is strong, builds on two great national assets – a strong base of science and technology and a free-market economy. 

So why should we be worried about the future?

We must be deeply worried about the future, because we have come to take our leadership and lifestyle for granted, and continuing to do so will lead in only one direction – down.  Our nation must not only innovate and compete globally, but we must do it in such a manner that we can maintain our American standard of living.  This is a Herculean task that will not be achieved without a concerted effort – the kind of concerted effort that can be driven by the PACE legislation.

What does competing in a knowledge-based economy require?  It requires that we educate a workforce and leadership that can create and perform the well-paying jobs of the future.  It requires that new knowledge be continually generated and moved into the marketplace fast and effectively.  This is what we mean by innovation.  The knowledge that is required to produce new products, services, and jobs will in large measure be technical, spawned by basic research in science, mathematics and engineering.

Our future economy, security, health, and quality of life depend upon our aggressiveness in investing now in American education and research, and in maintaining and enhancing a policy and tax environment that will allow innovation and entrepreneurial activity to flourish in American and in our industries’ operations throughout the world. 
We must see globalization as an opportunity as well as a challenge.  But our leadership and economic strength are not a birthright. We must earn them day in and day out.  The recommendations of the Augustine Committee, the National Innovation Initiative, and indeed several other recent reports, including those by the President’s Council of Advisors on Science and Technology and the Secretary of Energy Advisory Board, all point in the same direction.  The PACE bills and the American Competitiveness Initiative begin the urgent task of building a sound base for our future and that of our children and grandchildren.

The National Academies’ recommendations outlined a bold, comprehensive and strategic program for the nation.  Our committee is pleased that so many of our recommendations are reflected in the PACE legislation and that the President’s American Competitiveness Initiative is so consistent with them.  We further hope that our analysis of the issues facing the country, which draws upon and consolidates the work of many other dedicated groups, is helpful to you and you colleagues.

The PACE legislation package is harmonious with our recommendations for educating a new workforce and leadership in science and engineering.  This critical challenge spans from K-12 through doctoral and post-doctoral education.  We are particularly pleased that the PACE Acts include major programs across agencies to provide scholarships for students who study science, engineering, or mathematics and concurrently earn certification and commit to teaching.  We believe that the bills’ programs to strengthen skills of teachers through masters programs, workshops, and training for effective Advance Placement and International Baccalaureate instruction are excellent.  I will not dwell on the bulk of these programs, because they are contained in
S. 2198 the PACE-Education Act, which will be the object of a subsequent hearing.  However, I will note that our committee’s primary hope is that such programs will be put in place quickly and effectively.

In my view it is especially appropriate that the legislative effort to protect America’s competitive edge be spearheaded in the Energy and Natural Resources Committee because energy, innovation, and U.S. competitiveness are intimately intertwined.  The following are among the reasons this is true:

1. Supplying this nation, and indeed the world, with safe, clean, affordable, secure, and sustainable energy is a prerequisite for prosperity, and is in large measure a technological challenge.

2. The Department of Energy currently is responsible for 40 percent of the federal investment in physical science as well as 14 percent of the federal basic research investments in mathematics and computing, environmental sciences, and engineering.

3. Producing and distributing electricity, heat, and transportation while protecting our environment is arguably our most urgent challenge, and it certainly is the one to inspire, create, and draw upon a new generation of scientists, engineers, and innovators.

4. If America grasps commanding leadership in new, clean and economical energy technologies, there will be vast new markets for our energy technology industries in the rapidly developing areas of the world such as China and India.

EDUCATION AND TEACHER ENHANCEMENT

PACE-Energy (S.2197) authorizes three specific roles for the department of Energy associated with improving STEM education in primary and secondary schools, and with inspiring and assisting young men and women to pursue college education in science and engineering.

The first is the establishment of Summer Institutes at the DOE national laboratories to provide teacher training.  They would emphasize K-8 education and would be of at least two weeks duration.  This is certainly the type of program that we recommended in Rising Above the Gathering Storm.  The DOE lab facilities and their scientists and engineers certainly could create inspirational and useful programs for K-8 teachers.

The second authorizes DOE National Labs to provide assistance and support to STEM specialty schools and that each Lab establish a Center of Excellence at one public school in its geographic vicinity.  This is precisely the kind of action that our committee encouraged.

Third, PACE-Energy provides for the establishment of an internship program at the National Labs, with a $50 million annual budget beginning in FY2007.  Our committee believes that such inquiry-based learning can be very effective in inspiring and educating middle school and high-school students.  The Labs are a natural venue for such programs.

I personally believe that through these three activities, the DOE can and should play an effective role in improving aspects of STEM education in our nation.  I would recommend that as such programs are implemented, as I hope they will be, the Department will establish coherence of purpose and execution across the participating laboratories, and identify and promulgate best practices.

RESEARCH

Federal support for basic research in the physical sciences and engineering has been essentially flat in real dollars for more than thirty years.  During that time, the budgets for biomedical research have appropriately grown approximately four-fold.  That four-fold investment will pay immense benefits to improved health as well as basic understanding of living systems.  It has already done so, and also has stimulated an entire new industry of biotechnology.  The levels of discovery and innovation in life science and medicine are astounding.  Today there are nearly 100 biotech companies in Cambridge, Massachusetts, where I live.  They are a direct result of the farsighted federal investment in biomedical research and education, as are the many pharmaceutical research facilities that have located there.

But the nation faces other challenges including, first and foremost, energy and environment, but also the creation of new services, technologies, and manufacturing techniques that will enable us to be secure and economically vibrant in a world of knowledge-based economies and globalized production and markets.  The Augustine Committee has concluded that meeting these challenges requires a substantially increased and sustained federal investment in long-term, basic research in the physical sciences, engineering, mathematics, and computer science.  Specifically, we recommended that these budgets be doubled over a period of seven years.

We therefore are very pleased that S. 2197 authorizes such a doubling of the budget of the DOE Office of Science by increasing it by 10 percent annually through 2013.  We are confident that such an investment can pay dividends of extraordinary importance to the nation.

In our deliberations, we concluded that it would be wise to create 200 early career research grants of $500,000 each annually, payable over five years.  It frequently takes far too long for our bright young men and women to establish appropriately independent research programs.  This is very inefficient, because it drains their time and attention away from the actual conduct of research and teaching during what often are their most creative years.  S. 2197 authorizes 65 such early career grants per year for five years to be administered by DOE, and S. 2198 directs similar programs in several other agencies.  We applaud this.

ARPA-E

S. 2197 establishes the Advanced Research Projects Authority – Energy (ARPA-E).  This is a direct reflection of a recommendation made by the Augustine Committee.  ARPA-E is the only major new organization recommended by our committee, so I would like to explain our intent.

We intend ARPA-E to provide a new field of opportunity to the Department of Energy as it works in new and reinvigorated ways to develop new technologies to supply this nation, and indeed the world, with safe, clean, affordable, secure, and sustainable energy.  We simply must supply and utilize energy and transportation in new ways that will not degrade our environment.  If we do not do this, there will be no future prosperity.  We must derive new knowledge and technology from basic science and engineering research and reduce them to practice, and we must start now.

I wish to make a blunt statement that is based on my experience as an educator and an observer of the science and engineering communities.  On the whole, in recent decades, many of our best minds were not attracted into the science and technology of energy.  We in universities allowed energy to slip into academic backwaters, and neither our energy companies, nor our national laboratories, nor the entrepreneurial community have applied enough intellectual and financial muscle to it.  We have grown complacent in the face of a monumental challenge.  Of course there are counter examples, and I apologize if I am trampling on the toes of those few who have indeed dedicated their careers to these issues, but on the whole, I believe my characterization is accurate. 

Today, however, the larger scientific and engineering communities are awakening to challenge of our looming energy crisis.  But we must take concerted action and make the investments necessary to enlist our most talented researchers and innovators to address it.  Our committee, therefore, conceived ARPA-E as an organization reporting to the DOE Under Secretary for Science that can achieve four objectives:

1. Bring a freshness, excitement, and sense of mission to energy research that will attract many of our best and brightest minds – those of experienced scientists and engineers, and, especially, those of students and young researchers, including those in the entrepreneurial world.

2. Focus on creative, out-of-the-box, potentially transformational research that industry cannot or will not support.

3. Utilize an ARPA-like organization that is flat, nimble, and sparse, yet capable of setting goals and making decisions that will allow it to sustain for long periods of time those projects whose promise is real, and to phase out programs that do not prove to be productive or as promising as anticipated.

4. Create a new tool to bridge the troubling gaps between basic energy research, development, and industrial innovation.  It can serve as a model for how to improve science and technology transfer in other areas that are essential to our future prosperity.

Our committee did not believe it appropriate for us to specify the organization and mission of ARPA-E in great detail.  We believe that must be worked out by the Secretary of Energy and the Under Secretary for Science in rapid, but intense, consultation with experts from the scientific and engineering communities.  Defense visionaries who realized that the military had to reach out to new communities for the technologies that would be required to counter the rapidly changing threats of the post Sputnik era established the original ARPA in the DOD.  It was enormously successful.  We believe that ARPA will provide the right general framework on which to design ARPA-E.  It is a proven model.

CLOSING COMMENTS

I would like to briefly address two arguments that have been directed by some against the recommendations of the Augustine Committee.

First, some have stated that America’s current lead in science, engineering, and innovation is so great that there is no urgency to addressing these matters.  Our committee believes that this proposition is both incorrect and dangerous.

We are indeed on the pinnacle of science and technology R&D, but almost every trend is moving in the wrong direction.  In just the last few years the U.S. has become a net importer of high-technology products, has invested more new money in foreign stock funds than in domestic portfolios, has seen its share of leading-edge semiconductor manufacturing cut in half, has dropped to 12th in the world in the number of broadband connections per 100 inhabitants, has dropped from number 1 to number 5 in Internet use and infrastructure, has had basically flat investment in physical science and engineering research, has less than one third of its 4th and 8th grade students performing proficiently in mathematics, has its 15-year olds ranking 24th out of 40 countries in assessments of applying mathematical principles to practical problems, has two thirds of its children learning science and mathematics from teachers who neither majored nor were certified in the subjects, and has only 15 percent of its university students studying natural science or engineering versus 38 percent in South Korea and 50 percent in China.

In my view there is a commanding urgency to these problems.  Complacency is our enemy, not our refuge.

Second, some critics have stated that there is no current shortage of engineers and scientists, so there no reason to increase their numbers.  Our committee believes that in a knowledge age we need more, not fewer, people who can generate and use new knowledge. 

The need for more future engineers, scientists, mathematicians, and computer scientists is because these men and women will be the innovators who create new products, services, and jobs.  Innovation is the key to productivity, which in turn is the key to a strong economy.  Supplying and distributing energy, feeding the planet, building new industries around bio-based materials, continuing trends toward sophisticated service-based economies, keeping us secure, advancing medicine, developing new ways of learning, and responding to pandemics all require a technically competent workforce and scientifically astute leaders in business and government.  Even today, over half of the CEOs of Fortune 500 companies have engineering backgrounds, and engineers and scientists dominantly create the newer entrepreneurial companies.  The financial services industry is based on mathematics and information technology.  Shipping companies and even retail businesses find the profit margins necessary for survival only through application of complex logistical science.

The argument that we have plenty of engineers and scientists is based on looking in the rearview mirror.  The more people with sound engineering and scientific knowledge, the more connections among them, and the stronger the knowledge generation of long-term basic research to nourish them, the better will be our chances of prospering in the 21st century.

Chairman Domenici, Ranking Member Bingaman, and Members of the Committee, thank you for the opportunity to address PACE-Energy from the perspective of the National Academies report Rising Above the Gathering Storm.  It is a privilege to work together to enable our nation to prosper in the 21st century.

I would be glad to respond to any questions.