Many policy experts say some of government’s biggest energy investment payoffs have come in the small stuff, such as testing the use of magnesium alloys to make lightweight car batteries more efficient or developing ballasts that make compact fluorescent bulbs more efficient.
Still others say that the nearly $40 billion paid out by the federal government so far to subsidize corn-based ethanol is a success story; ethanol has displaced more than half a million barrels a day of petroleum. But that benefit must be weighed against whether ethanol has driven up corn prices, along with evidence that it may be worse than oil from a greenhouse gas perspective.
Energy innovation is simply different from innovation in other industries, argue Edward Steinfeld and Jason Lee of the Massachusetts Institute of Technology. In electronics and information technology, they note in an unpublished article, the end products are cheap, consumers buy new ones every few months or years, and much of the value is captured by the front-end designer rather than the manufacturer. (Think Apple.)