The US fossil fuel lobby often accuses the Obama Administration of “picking energy winners and losers” over its support for alternative energy, but a new report from the global consulting firm Deloitte pulls the rug out from under that argument. As it turns out, since 1977 the US oil and gas industry has benefited from scores of key innovations that are based on Energy Department patents.
The Fossil Fuel Energy Winners
The new study, from the Deloitte Center for Energy Solutions, is titled Tracking innovation in oil and gas patents: The role and influence of the US Department of Energy. It’s an attempt to insert some objective facts into the whole “winners and losers” argument championed by US Senator Ted Cruz, the basic line being that the federal government should not support alternative energy development because it should not be in the business of “picking energy winners and losers.”
The Deloitte study frames it a little more gently, like this:
There is an ongoing, often partisan, debate about the efficacy of government investment in the creation of new technologies.
Oil and gas technology incubation has been one important role of the DOE since its inception in 1977. Over the years, DOE’s research focus has evolved from reducing the country’s foreign energy dependence to also include undertaking research into growing domestic energy resources.
It’s a quick read and you can download the whole thing for free, but for those of you on the go here’s the money quote from page 9:
Unsurprisingly, the single largest area for which oil and gas firms used DOE patents was in Wells technologies. This reinforces our finding that oil and gas firms are using DOE patents to improve technologies which are core to their business. This analysis doesn’t prove or disprove the notion that DOE is “ ahead of the curve “ of oil and gas firms. What it does show is that DOE’s innovations are regularly used in areas that go beyond the initial area of DOE’s innovation…
Among the report’s key findings are:
8.6 percent of all patents from major oil and gas firms cite at least one DOE funded patent.
55.8 percent of all DOE patents produced prior to 2006 were cited by at least one oil and gas firm.
DOE patents have staying power, with a median shelf life of 16.5 years.
In 2012–2014, there were six non-oil and gas areas which cited oil and gas patents at least 100 times.
Hold on to your hats, because this is just the first in a series of papers analyzing and quantifying sources innovation in the oil and gas industry from 2006 to 20014. Slaughter anticipates that the figure of 55.8% for DOE-based patents would have been higher if the study encompassed a larger sample set.
What Now, Senator Cruz?
Senator Cruz (R-Texas) isn’t the only Republican to champion the “winners and losers” argument for the fossil fuel industry. It’s actually part of the party’s platform:
…Unlike the current Administration, we will not pick winners and losers in the energy marketplace. Instead, we will let the free market and the public’s preferences determine the industry outcomes. In assessing the various sources of potential energy, Republicans advocate an all-of-the-above diversified approach, taking advantage of all our American God-given resources…
However, we’re picking on Senator Cruz anyways because of the timing. We were tipped to the new Deloitte study yesterday by our friends over at Oil & Gas Journal, and yesterday also happens to be the date of a new round of climate science hearings organized by the Senator.
As may be expected, yesterday’s hearings were something of a disaster. For starters, Cruz’s showcase witness, Princeton physics professor William Happer, was outed as a for-hire climate change denier the day before the hearing, and things went downhill from there as reported by Think Progress under the headline “Ted Cruz Invited A Right-Wing Radio Host To Testify On Climate Science And He Gave This Insane Rant:”
At a Senate subcommittee hearing Tuesday, Mark Steyn, a conservative writer and pundit, dismissed the threat of climate change and said that related concerns about national security were “ridiculous.”
It is unclear why — beyond his extreme views on climate change and politics — Steyn was invited to testify at the hearing called by Sen. Ted Cruz (R-TX), titled “Data or Dogma? Promoting Open Inquiry in the Debate over the Magnitude of Human Impact on Earth’s Climate.” Steyn does not have a background in science. He was trained as a journalist.
Winners, Losers And National Defense
The Deloitte report also notes that support for the fossil fuel industry is just one aspect of the Energy Department’s national security mission. In that context, no offense to whoever wrote the Republican platform but we think it’s probably a little bit true that the duty of federal (and state) policymakers is precisely to pick energy winners — that is, energy that enables a competitive national defense and a healthy environment at home.
Image (screenshot): Via Deloitte Center for Energy Solutions.