With the hubbub over Michael Jackson’s funeral, a rather grisly case of grave-robbery, and interest in the beginning of the G8 meeting in L’Aquila, numerous events occurred in Washington this week with relatively little fanfare. However, this past week featured several developments in the legislative and executive branches of the government which have potentially far-reaching natural security implications.
On the Hill, two events in particular stand out. The House this week voted to reauthorize the federal Small Business Innovation Research Program (SBIR), but with a significant alteration from past years. Since 2003, companies in which a venture capital investor owned a majority stake were not eligible for federal funds; the new reauthorization bill has removed this provision. As Kim Hart explains in the Washington Post, this has caused a significant amount of controversy in the venture capital and start-up worlds, with venture capital firms largely backing the provision, and small businesses weary of it. One might ask, where does this fit into natural security? Quite simply, a number of firms working on developing alternative energy sources, as well as a number of venture capital groups backing them, stand to be affected by this change. For years, one of the major sticking points in funding the development of new energy technologies has been the transition from the innovation phase to the commercialization of a technology – the so-called Valley of Death. At CNAS’ April 29 conference, members of the venture capital community indicated that a reform of SBIR regulations could be one way of finding the funding necessary to commercialize new energy technologies. Whether or not this alteration in the funding guidelines will prove to be the necessary change has yet to be seen, but it’s something worth keeping an eye on.
In the Senate, the Waxman-Markey bill is going to remain in Committee a bit longer than originally thought. While Senate Majority Leader Harry Reid has indicated a desire to pass legislation ahead of the Copenhagen talks in December, the energy bill will now stay in committee until September 28.
Finally, the Commodity Futures Trading Commission (CFTC) will hold a series of hearings over the next two months examining the possibility of increased oversight on speculative trading in commodities, specifically oil, natural gas, and other energy commodities. As the Financial Times reports, the effort is aimed at preventing commodity asset bubbles like last year’s, for which a great deal of the blame has fallen on speculation by traders. The hearings will focus on expanding federal position limits beyond agricultural commodities, expanding Commitment of Traders reports beyond their current designations of “commercial” and “non-commercial” users, and tightening up regulations on hedging exemptions. For a more detailed breakdown, John Kemp provides an excellent analysis in Reuters.
This week’s natural security news wasn’t particularly sensational compared to everything else happening in the world, but it could end up being important far into the future. Of course, for now all three of these issues need further momentum before they become significant – both Waxman-Markey and the SBIR funding amendments could fizzle out in the Senate, and the CFTC hearings could amount to nothing, but they’re all worth keeping an eye on.