Graph of the Day: R and D Spending in the Energy Sector – and Chevron’s Irony Deficiency
February 8, 2011
If anyone thinks the Oil industry is working to discover the solution to our energy problems, this graph should set them straight.
The American Energy Innovation Council is the source of the Graph, and has posted a polished video about the problem.
More from The Washington Post:
“..when the president says he’s committed to green energy, that’s fine. But the U.S. isn’t giving alternative energy companies the green light. We’re giving off something more like a ruddish-yellow light, as if to say: Go ahead if you’d like, but proceed at your own caution.
Ask Eric Spiegel, CEO of Siemens USA, who told me his company is held back by the United States’ reluctance to pass a carbon tax or make permanent the solar tax credit. “If you don’t do anything on carbon and you don’t have renewable energy standards or investment tax credit, every utility company would go out tomorrow and build coal,” he said.
Ask J. Bryan Ashley, chief marketing officer at Suniva, a celebrated solar cell manufacturer out of Georgia, who told me his company exports 80 percent of its products partly because there’s so little demand for solar at home. “More people would manufacture [solar products] here if demand was here,” Ashley told me. “We need a renewable energy standard to create a market in the United States. If demand is overseas, then I’ll move factories to other parts of the world. That’s just good business.”
Joshua Freed, director of Third Way’s clean-energy program, e-mails to say that however bad innovation may be in the private sector as a whole, it’s even worse in the energy sector:
In the U.S., the private sector barely invests in any energy research. Where U.S. industries, as a whole, spend an average of 2.6%of their revenue on R&D, the energy industry invests a paltry 0.23% of revenue on any kind of research — clean or conventional. This includes funding for expensive research into conventional fuels, such as ultra-deep water drilling and new oil refining techniques.
This stands in stark contrast with the hyper-competitive pharmaceutical industry, where new drugs supplant old ones every year. Pharmaceutical companies spend 19% of revenues, or about $39 billion each year on R&D. Even the American automakers still invest $17.5 billion in R&D.
The crux of the problem is illustrated ironically by the ad that popped up on the Washington Post page where this news item originated.