The U.S. Department of Energy, though its subsidiary, ARPA-E, (that is, the Advanced Research Projects Agency–Energy), announced last week that it will be funneling $130 million into 66 different “transformational energy technology projects through its OPEN 2012 Program.  According to the agency’s press release,

“ ARPA-E seeks out transformational, breakthrough technologies that show fundamental technical promise but are too early for private-sector investment. These projects have the potential to produce game-changing breakthroughs in energy technology, form the foundation for entirely new industries, and have large commercial impacts.”

A fine objective, based on a sound conclusion: a great many green technologies are brilliant money losers.

As I wrote in my recent post, “Fading Greenery”, the US is poised to become the world’s top producer of oil by 2020, due to the development of new shale oil and gas extraction technologies.  Government subsidies to the oil industry in the United States are generous, and well-liked.  President Obama’s efforts to end them have been rebuffed.

Whether oil companies should be subsidized is another matter entirely, but it certainly appears that oil will remain a dominant energy solution due to already widespread use, still abundant resources and favor among politicians.  Green energy solutions may chip away at oil here and there–solar panels will improve and lower in price, wind turbine technology will improve, and so on.  But for any kind of real green tech revolution to occur there may have to be some kind of government support.  Unfortunately, we have already learned that this can be quite dangerous for a politicians career (Obama/Solyndra).  Even the election-immune Chinese government has run into some financial trouble in its attempts to bolster the growth of it’s own alternative energy sector, though it will likely pull out of them if it can continue to grow demand at home and parry probes from European and American companies seeking tariffs on Chinese imports.

Among the technologies the OPEN 2012 Program says it will evaluate are “advanced fuels, advanced vehicle design and materials, building efficiency, carbon capture, grid modernization, renewable power, and energy storage.”

Approximately 47% of the projects were led by universities, 29% by small businesses, 15% by large businesses 7.5% by national labs and a meager 1.5% by non-profits.

The good news for capitalists is that businesses, large or small comprised 34% of applicants, which is not too shabby.  That universities comprise almost have of all project awarded funds should not surprise, though it might say something of the importance of higher education to anyone who wants to work in cutting edge technology research and development.

The real question here is whether we should consider investment in green energy technologies a “public good”–a good that government must provide in the absence of interest from the private sector.