The U.S. government spends less on energy innovation "than the pet food industry invests in its own products."
Barack Obama on Friday, July 11th, 2008 in the campaign's energy plan.
This dog won't hunt
That's the claim Democratic nominee Obama makes in his "Plan to Make America a Global Energy Leader," to explain why he wants to increase the amount the government spends on energy innovation.
"At present, the federal government spends over $3 billion per year on all energy innovation efforts," the Obama plan states. "While this may seem like a significant sum, it is much less than what we spent in the late 1970s when adjusted for inflation, and is less than the pet food industry invests in its own products."
A June 2008 Harvard study confirms that the part about the 1970s is true. In inflation-adjusted dollars, the government was spending more than $6 billion a year on energy research and development in the late 1970s, which is more than double what it's spending this year.
But that second claim? The pet food one? The Obama campaign declined to explain what the Illinois senator meant, exactly, by "invests in its own products." Instead, it referred Politifact to an August 2007 article by University of California (Berkeley) Professor Daniel M. Kammen, which makes precisely the same point Obama did: "The federal government spends less on energy research and development than the U.S. pet food industry spends on its products in the United States," Kammen wrote.
The article, on global warming, contains no footnotes to support the pet food assertion, doesn't expand upon it beyond that one sentence, and Kammen did not respond to several requests for comment.
That forces us to take the Obama statement as any voter would: at face value. In his article, Kammen refers to pet food industry spending, which it could be argued, refers to everything the industry spends on its products, from raw materials to packaging to advertising.
But Obama uses the word "invests" – and given the parallel construction of his argument – it reads to us like a comparison between federal government energy research and pet food industry research, (i.e. the development of new products.)
For its part, the Pet Food Institute, the trade association for the industry, says that it doesn't keep such figures, leaving us to wonder where Kammen got them.
But a 2006 study by consulting firm Booz Allen Hamilton, which examined the 1,000 companies across all industries that spend the most on research and development, found that on average those companies spent 3.8 percent of their gross sales on R&D.;
Given that the pet food industry as a whole grosses about $15 billion a year in sales, it's inconceivable that the industry spends more on new product research than the $3-billion the government spends on energy R&D.; That would be 20 percent of gross sales. As a result, we find Obama's claim to be False.
Published: Friday, July 11th, 2008 at 12:00 a.m.
Sources:Obama campaign, BARACK OBAMA'S PLAN TO MAKE AMERICA A GLOBAL ENERGY LEADER
E-mailed responses to questions provided by Obama campaign spokesman Tommy Vietor, July 8, 2008.
Harvard's John K. Kennedy School of Government, DOE FY09 Budget Request for Energy Research, Development & Demonstration, by Laura Diaz Anadon, Kely Sims Gallagher and Matthew Bunn, Harvard's John K. Kennedy School of Government, June, 2008
Strategy+Business magazine, Winter 2007, Customer Connection: The Global Innovation 1000 by Barry Jaruzelski and Kevin Dehoff
Interview with Kurt Gallagher, spokesman for the Pet Food Institute, July 10, 2008. ClimateBiz.com, "From Carbon Markets to the (Conveniently) Forgotten Four Billion," By Daniel Kammen, August 6, 2007
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