America must stop selling its advanced battery tech to China

Mar 27, 2013

FORTUNE -- Starting about five years ago, the U.S. Department of Energy, coordinating with the Pentagon, significantly ramped up its funding for promising lithium ion batteries -- that technology that today helps power everything from iPads to electric cars to Boeing’s Dreamliner Jets. The goal was to create durable, effective, affordable, and safer energy storage that could bolster our national security, while enhancing America’s competitive advantage, especially through high-tech manufacturing.

So what happened? Unfortunately, this program in which the DOE invested hundreds of millions of dollars, hasn’t yet created a battery that lives up to its promise. On a recent family ski trip, I used my iPhone to capture memories of my kid’s first solo ski run. Apple’s fully charged lithium-ion battery went dead after 30 seconds of video because the weather was simply too cold. For Boeing (ba), America’s largest exporter, the recent grounding of its 787 Dreamliner is directly attributed to -- you guessed it -- lithium ion battery technology.

Despite the DOE’s efforts, America’s competitors seem to be more focused on this crucial technology and have long had a coherent strategy in place. China in particular is relentlessly pursuing and in some cases acquiring vital U.S. government-funded technologies. The Chinese understand what lighter weight, less volatile, dense energy storage means to geopolitical advantage in the 21st century, whether powering satellites, stealth aviation, telecom, transport, or power distribution.

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Consider what battery packs mean to our soldiers and Marines humping a hundred pounds of equipment across the Afghan plains in soaring desert heat, or carrying sensitive electronics through freezing mountain passes. In light of what we have witnessed over a decade of war, how many hundreds of soldiers guarding caravans carrying fuel for diesel generators must run the gauntlet of guerrillas and find themselves injured or killed because our government fails to control, manage, and deploy battery technology that is already designed and developed (with taxpayer funding) explicitly for that purpose?

Perhaps we can just call Beijing and get the technology of the future we need, when we need it most, and accept their terms. But does that meet the threshold of security?

These are the types of questions that are presently being evaluated at the highest levels of the Obama Administration. Recently Obama’s “Committee on Foreign Investment in the U.S.” (or “CFIUS”), approved the transfer of the technology of bankrupt American battery maker A123 to the Chinese, including its large-scale manufacturing assets, 91 registered patents, and other intellectual property mostly funded by the U.S. Department of Energy. A123’s unique and highly differentiated nano-phosphate technology, in which the DOE invested $250 million, should rightfully remain in American care, custody, and control.

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It’s a competitive world out there, getting more so every day. America cannot afford any naiveté by our government officials. They must discern a “wolf in sheep’s clothing” however tempting to look the other way. Our federal officials need to stop predatory competitors from manipulating our free, open, and transparent commercial environment, usurping our government-funded innovation and intellectual property on the cheap, and vacuuming up all public/private investments meant to benefit our citizens and national security.

In his inaugural address, the President proclaimed: “We cannot cede to other nations the technology that will power new jobs and new industries -- we must claim its promise.” For the sake of American jobs, our manufacturing competitiveness, technological innovation and leadership, and above all, America’s national security interests, let’s hope that going forward, the President’s words are matched with deeds.

Andy Karsner was U.S. Assistant Secretary of Energy for Efficiency and Renewable Energy under President George W. Bush and an original funder of battery maker A123’s scale up. He sits on the board of Argonne National Laboratory -- America’s research and development hub for energy storage technology -- and is a Distinguished Fellow at the Council on Competitiveness, and a Visiting fellow at the Hoover Institution at Stanford.

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