How Big an Impact Is Lobbying Having on DOE Grants?

Is the Department of Energy awarding grants on the basis of scientific merit and economic feasibility, or coziness with lawmakers?

Sources have told us that the grant process is pretty rigorous and objective. So far, nothing in the process indicates unseemliness. Still, we won't know the full answer for years. Nonetheless, the Boston Globe combed through OpenSecrets, which tracks lobbyists, and found some fun numbers.

A123 Systems received a $249 million grant from the DOE to help it expand production. OpenSecrets showed that it spent around $1 million in lobbying in the past three years.

Boston-Power did not get its request for $100 million in grant money. It spent about $50,000 in the last two years.

The two companies in many ways are similar. Both make lithium-ion batteries and have attracted tens of millions in investment from VCs and others. Both are also well-connected. A123 very visibly lost a contract to supply batteries to the far more experienced LG Chem. (The chemistry of A123's batteries isn't as energy dense as some others either.) However, it inked a deal with Chrysler. Boston-Power has put its batteries into HP notebooks and wants to get into automotive.

Still, there are differences. Namely, Boston-Power has used a lot of its money to expand factory facilities in Asia. That couldn't have gone over well. (A123 actually makes its batteries in China too, but has been talking about manufacturing in the good ol' USA for a while.) The grants were also mostly targeted at automotive battery makers, which explains why Compact Power (which works with LG Chem) and EnerDel got their grants awarded.

And my own search on the OpenSecrets database shows now sudden burst of lobbying activity by EnerDel, Pyrotek or Novolyte. Saft America, which got $95.5 million, spent $150,000 on lobbying in 2005 and $50,000 in 2009. OpenSecrets cautions that lobbying can occur through trade groups etc.

Nonetheless, lobbying likely helps familiarize a name. EnerG2, a six-year old company that raised $8.5 million last year, spent $40,000 in lobbying in 2009. It got a $21 million grant.

It's an issue worth keeping an eye on.