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McCain proposes another energy gimmick, Part 1 — pointless battery prize. Is this another $300M to ExxonMobil?

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"McCain proposes another energy gimmick, Part 1 — pointless battery prize. Is this another $300M to ExxonMobil?"

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Conservative presidential hopeful John McCain has offered yet more proof he doesn’t understand energy — and more opportunity for the media to salivate over his faux “maverick-ness”:

John McCain hopes to solve the country’s energy crisis with cold hard cash.

The Republican presidential nominee-in-waiting is proposing a $300 million government prize to whomever can develop an automobile battery that far surpasses existing technology….

McCain said such a device should deliver power at 30 percent of current costs and have “the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars.”

This idea is almost as bad and almost as cynical as the gas tax holiday (see “Gas tax holiday is cynical and indefensible“).

POINTLESS: First off, every energy and car company on the planet knows they’ll get rich by improving batteries. The world is probably spending $1 billion a year in this quest. This $300 million prize is a pointless gimmick, just a cynical move to get some good PR.

NOT HOW TECHNOLOGY WORKS: You don’t just invent a battery that has the “cost … to leapfrog the commercially available plug-in hybrids or electric cars.” That requires mass production, hundreds of thousands if not millions of batteries produced a year, to get the economies of scale and the benefits of the manufacturing learning curve. When you “invent” the batttery, you do a spreadsheet on what mass production costs would be. It would be a bureaucratic nightmare to try to figure out who would win this. Does the money go to the most plausible spreadsheet?

HASN’T EXXONMOBIL ALREADY SOLVED THIS PROBLEM?

I keep seeing this ad on TV that says ExxonMobil has made a “real breakthrough” in lithium-ion batteries that pretty much solves the problem. You can watch their video here.

So is this battery prize idea just another way for McCain shuffle more money to the oil companies without actually lowing energy costs for consumers, like the gas tax holiday and the offshore drilling flip-flop? (see “EIA bombshell: Offshore drilling “would not have a significant impact on domestic crude oil and natural gas production or prices before 2030″³.)

Actually, McCain’s speech has another proposed solution to our energy problem that is fundamentally flawed, which I will discuss in the second part. See if you can identify it here.

We deserve more serious ideas from Senator McCain — and more serious coverage from Big Media.

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18 Responses to McCain proposes another energy gimmick, Part 1 — pointless battery prize. Is this another $300M to ExxonMobil?

  1. drivin98 says:

    I wouldn’t worry a whole lot about it. First, he has to win the election and that’s pretty damn unlikely.

    As fas as the separator film for lithium ion batteries (I didn’t see it at the link you posted but I assume that’s what you’re talking about. Also, I can’t believe you made me go to the Exxon website. Now I have to shower.) there are several companies working on the same basic technology but that’s really not a significant breakthrough by any stretch.

    I really didn’t mind these proposals so much though I doubt they’d have much affect. They were a lot better than the “clean coal” and nuclear crap he was talking about last week.

  2. Ken says:

    Has anyone seen the battery under development by
    Dr.Cui; Looks like if this battery is developed it should
    win the prize for sure!

    http://gm-volt.com/2007/12/21/gm-voltcom-interview-with-dr-cui-inventor-of-silicon-nanowire-lithium-ion-battery-breakthrough/

  3. Why is McCain suggesting this $300 million (corporate welfare) earmark now?

  4. red says:

    I’d like to hear your thoughts on energy/environment prizes like the Automotive X PRIZE (http://www.progressiveautoxprize.org/) and Biofuels PRIZE (http://www.gablepr.com/pdfs/PDFs_ClientNews/Prize-Capital-and-XPrize-Foundation-Plan-Biofuels-Prize.pdf).

    Do you think the use of prizes can work in areas that “need a helping hand”, and that McCain has just picked an innappropriate topic? If that’s the case, what kind of innovation prize or prizes would you propose? Or, do you think that prizes aren’t an effective way to encourage innovation?

    Prizes seem to work well in the commercial space industry, but I’m not sure if that success will translate to the energy or environment industries. Maybe McCain should have picked more numerous, smaller prizes that entrepreneurs and student groups can have a chance at. Maybe he should have picked an industry with known enthusiasm for prizes – i.e. picking environment or energy prizes with a space angle. Perhaps they could be prizes for environmental smallsats, or demonstration of Earth monitoring instruments on suborbital rockets (for direct measurements, testing space-bound hardware, or calibration of operational satellites via concurrent measurements).

    Also, any comments on McCain’s push today for flex-fuel cars (which Obama has also pushed for)? Would you mandate flex-fuel cars (supporting gas/ethanol, or gas/methanol/ethanol)?

  5. Joe,
    Whatever the content of the actual proposal, making batteries an issue of national priority is a good idea. They are in fact a national security issue.

    I am hoping that Obama starts to talk about what I would call (Renewable) Electron Economy issues. His support for biofuels/corn ethanol is troubling and shows that he may not have serious science and climate analysts close to him.

  6. Joe says:

    Michael — I actually think that the venture capital community and the major energy and car companies have sufficient incentive to improve battery technology. What we need is an aggressive government efforts to pull plug-ins into the market.

    Red — Prizes are over-rated as a strategy for getting technology improvements in mature industries with lots of competition. The space prize worked, but that was an area where the U.S. federal government had a near-monopoly for decades, and little foreign competition. We have lots of automobile companies — and lots of other major industries that would make a lot of money from a better battery.

  7. Paul K says:

    The prize is to inspire the young Teslas and Edisons.

  8. red says:

    Paul K: “young Teslas” … are you talking about the physicist or the plug-in sports car company?

    Joe: I agree that competitive, well-developed industries probably aren’t the best place for innovation prizes. The Ansari X prize and follow-on prizes like the Google Lunar prize and the various NASA Centennial Challenges are all in fields like manned spaceflight and cheap space access where the government has been the main or only player, but where the government hasn’t made much progress for various reasons, including political and bureaucratic ones. These prizes have been ambitious, but don’t require an industrial base. They’ve benefited from small entrepreneurial companies that see a market in the prize, school teams going for the glory of winning and the education gained in the process of trying, and garage hobbyists and (sometimes) wealthy sponsors that want the media exposure or the fun of a sport-like event.

    We don’t know the details of McCain’s proposal (or of Obama’s cellulosic ethanol prize proposal), but a $300M prize strikes me as requiring a big innovation that’s out of reach of entrepreneurs and academic departments. It’s advantage or disadvantage compared to a research grant or contract might come down to a sliver of a supply and demand chart. I have a hard time being against such a prize to better ensure that the innovation happens, as long as the winning of it is worth the money to the taxpayer. At least the government won’t have to pay if the innovation doesn’t happen. However, I’d be more inclined to look for areas that aren’t being addressed, and that are sized to competitors that would be interested in the adventure of going after the victory and not just a balance sheet.

    The Automotive X prize race with 100 MPGe non-concept cars is obviously in a competitive, well-developed industry, but it’s focused on a goal that’s been neglected by the automotive industry. Events (i.e. gas prices) may be putting them more in the spotlight than they might have expected a couple years ago, and big auto companies might go after similar if less dramatic goals finally. They have about 80 or 90 teams, mostly hobbyists and small companies, but including Tata Motors, all going after $10M. I’d expect some sort of useful innovation to come out of all of that effort even if the money isn’t won.

    The NASA/CAFE General Aviation Challenge includes a $50,000 “Green Prize” this year. Again it’s an area that’s been a bit neglected by industry.

    The X PRIZE Foundation “Energy and Environment Prize Suite” includes various proposals, including a sustainable biofuels prize from non-food sources, an aviation fuel prize, solar, carbon, water, housing, etc … funding willing of course. They’re also looking into oceanographic prizes with environmental overtones with, perhaps, the Woods Hole Oceanographic Institute.

    It seems to me that these more numerous, smaller prizes focused on fun and interesting goals have a better shot than big industrial prizes at solving specific neglected problems, whether in energy, environment, space, pharmaceuticals, or whatever. At the same time they can get the competitors, the interested public, and perhaps investors interested in and educated in the newly demonstrated field. By no means are they the central players in the big issues of the day, but as long as they compliment rather than replace the main effort I think they can make a worthy contribution.

  9. Paul K says:

    red,
    Tesla the man, but if I had the $$, I’d sure look good in the machine. You do understand Joe’s main complaint against prizes is that McCain proposed them.

  10. John Hollenberg says:

    > You do understand Joe’s main complaint against prizes is that McCain proposed them.

    Ridiculous comment.

  11. Joe says:

    Paul — You are getting tedious here.

    Do you actually think McCain’s proposal is a sensible one? If so, PLEASE explain to me how anybody could possibly adjudicate who is the winner BEFORE mass production? [There is obviously no point in giving a prize to somebody after mass production has occurred.]

  12. Paul K says:

    McCain’s proposal is sensible enough. At best, it moves us closer to replacing fossil fuel. At worst, it costs us nothing. I don’t understand your opposition to it. From the remarks you linked to it is clear McCain is looking to unleash some good old American ingenuity.

    Innovation often comes from outside large entrenched organizations. Electronics and computing are examples of the innovative capacity of small shops and individuals. The power steering used in most of today’s non rack and pinion cars was invented shortly before WWII by a lone inventor unaffiliated with the auto industry.

    Determining if anyone meets the required size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars is not so difficult and certainly doesn’t need to wait for mass production. Size, capacity and power are easily observed. Cost of production is generally calculated before production begins.

  13. red says:

    Here’s an amusing clip from Politico.com on Obama’s response to the prize proposal:

    http://link.brightcove.com/services/player/bcpid1155201977?bctid=1628434148

    Rather than criticize the whole prize concept as a gimmick, it would have been a lot better, and more in keeping with the “new ideas” aura he cultivates, if Obama had come up with a better set of energy prize ideas rather than proposing a retro “energy Apollo” without complimentary prizes. Remember, the real Apollo program, although it had its virtues, was shut down because it was considered too expensive. Although it’s budget is considerably less than 1% of the Federal budget, NASA’s current attempt to rebuild Apollo is still expensive compared to the private spaceflight efforts now being built, and is also expensive compared to NASA’s own environmental science satellites. If Obama wants analogies from the space community for his energy policy, he should look to commercial space and robotic space rather than Apollo.

    The odd thing is that Obama’s own energy policy includes prizes:

    “Deploy Cellulosic Ethanol: Obama will invest federal resources, including tax incentives, cash prizes and government contracts into developing the most promising technologies with the goal of getting the first two billion gallons of cellulosic ethanol into the system by 2013. ”

    The Progressive Automotive X PRIZE released a press statement commending the McCain prize proposal, while encouraging a more diverse set of efforts:

    http://www.progressiveautoxprize.org/auto/press-release/progressive-insurance-automotive-x-prize-releases-statement-in-response-to-senato

    Note that the AXP also contains rules to make sure that the vehicles that win that prize (100 MPGe cars) have some prospect of manufacturability if not won by one of the bigger teams like Tata Motors. Hopefully some such rules can be worked into McCain’s proposal if it’s implemented.

  14. red says:

    It looks like this discussion has stopped, but I’ll add a bit more in case of interest from someone stumbling on it later. This is a cut and paste excerpt from an article at Cosmic Log on the X PRIZE Foundation getting a $7 million prize development fund from BT (http://cosmiclog.msnbc.msn.com/archive/2008/06/26/1170649.aspx) at MSNBC:

    Then there’s the $10 million Progressive Automotive X Prize, which would reward the development of commercially viable vehicles that get the equivalent of 100 miles per gallon. “We have over 90 teams that have signed letters of intent from 12 countries so far,” Diamandis said. The next steps include finalizing the rules and selecting the cities where the X Prize races will take place in 2009 and 2010.

    Diamandis said he was gratified to hear about GOP presumptive presidential candidate John McCain’s proposal for a $300 million, federally funded prize for breakthroughs in battery technology – and he only wishes his likely Democratic opponent, Barack Obama, was more savvy about the prize paradigm.

    “We have been working and will continue to work with both campaigns to educate them about the potential for incentive prizes to produce breakthroughs far beyond what government programs can do,” he said.

    The only drawback he sees in McCain’s plan is that it focuses solely on one potential solution (battery storage capacity for electric vehicles and hybrids) to the exclusion of others (such as biofuels).

    “One of the key attributes of an X Prize is not to choose the solution, but to identify the problem,” he said. “What we really need are super-efficient cars. Whether that’s done with batteries or better engines is to be determined.”

  15. S Smith says:

    One of the X-prizes (a meer 20 million) resulted in the first spacecraft by a private company capable of taking three people into space (look up SpaceShipOne).
    Of course this will work. Many of the great firsts in technology were spurred by prizes like this and fortunately it allows clever individuals to compete with big industry. Heck I think I may go for it my self! The day of the lone inventor or a small team of cutting edge experts is now and they could score big on this one. BTW I am a Chemist. I drive a Honda Insight and get up to 70 mpg now.

  16. red says:

    S Smith: If you’re a Chemist, you might also want to check out Innocentive. They offer prizes (typically smaller than the X PRIZEs or government prize proposals, and often funded by anomymous companies or foundations) for various technical achievements. One of their categories is Chemistry. Of interest to this site, they also have a “Clean Tech and Renewable Energy” prize category.

    I personally wouldn’t do this kind of thing as a job (who knows if you’ll win), but it could be fun, educational, and maybe lucrative as a personal or small team hobby.

    Speaking of battery prizes, there’s already a $1.75 Million “Wearable Power Prize”. It’s intended to reduce the amount of battery weight carried by soldiers, but I’m sure there would be commercial uses, too. It’s too late to register for that one, though.

  17. Sterling925 says:

    To All: I agree with Joe. Prizes are gimmicks that won’t solve anything that Toyota and Honda aren’t already on top of. That said, it doesn’t hurt to incentivize innovation.

    But to achieve really great and effective results requires leadership willing to commit resources and motivation. When Kennedy kicked off the lunar program there was great incentive after the USSR beat us into orbit. Innovation to solve energy/climate problem will require tremendous motivation and a collective sense of urgency.

    I’m not seeing a general sense of urgency or public motivation. More than 50% of the American people believe, “Drill Here! Drill Now!” is all that is required. And big oil already knows how to do that. I could use a couple mil’ though. Maybe I’ll enter a contest.

  18. john says:

    its soooooooooooo goooooD according to my point of veiw