Rep. Bill Foster on the Importance of Business and Technology Knowledge in Congress

"Rep. Bill Foster (D-Ill) says that he finds it useful in Congress to have knowledge of business and technology, noting that this helps him pinpoint trends," writes Forbes contributor Murphy..

   Rep. Bill Foster, D-Ill., leaves the Capitol on Wednesday, May 18, 2022. (Bill Clark/CQ-Roll Call, ... [+] Inc via Getty Images) 
  CQ-Roll Call, Inc via Getty Images
On May 18, 2022, Rep. Bill Foster, D-Ill., leaves the Capitol. (Bill Clark/CQ-Roll Call, ...)

Rep. Bill Foster (D-Ill.) has been in Congress for over a decade and is the only current lawmaker with a PhD in physics. "I feel occasionally useful in Congress because I have some background in business and technology," says the 66-year-old representative, who represents parts of five counties located 30 miles west of Chicago, which are part of the state's 11th congressional district.

He is on the House Financial Services Committee and the Committee on Science, Space and Technology. On the latter, he heads a task force about artificial intelligence and describes himself as “a scientist, businessman, and son of a civil rights lawyer.” His background has contributed to his varied career: both of his parents worked

In an interview with Forbes, Foster discussed electric vehicles, energy policy, and rare earth mining. He also reminisced about his teenage days as a business owner-turned-physicist. His pragmatic philosophy: “When there's a technology that is at the threshold of being commercially viable and because of the benefits to the country in developing that technology, it's worth for federal taxpayers to put some money into it. And Congress has to act like a very wise venture capitalist in this situation."

The following paragraphs, which are excerpts of Foster’s responses, have been edited and condensed for clarity.

At the age of 19, Foster started a lighting company with his brother. After a few years, he returned to his "first love" - science. He received a PhD from Harvard and went on to work at Fermilab, a national laboratory that deals with high-energy particle physics. When he decided to run for office, Foster sold his share in the business.

At the tender age of 19, John started his own business

My little brother and I started this company in our basement with $500 from my parents. The company now manufactures about 70% of the theater lighting equipment in the United States, and exports about a third of what it produces. We had the bright idea of using the newly invented microprocessor to control theater lights, which had not been done previously. After selling it indirectly through an established player, since no one was going to buy their theater lighting controller from a 20-year-old and an 18-year-old, we had a breakthrough when we got a big contract to do the control system for Disneyland's Main Street Electrical Parade. After running the company for about most of a decade, I then returned to my first love: science.

The scientific advances that have been made

After I finished my PhD, I spent most of my career at Fermilab. My work during my first ten years involved building the scientific apparatus to analyze the collisions and data from those collisions. During the next ten years, I worked on particle accelerators. The team that I was a part of discovered top quarks, which are the heaviest known form of matter, and we helped invent a permanent magnet-based antiproton recycler ring.

In his research on “nominally” rare earth strontium ferrite permanent magnets, Foster expressed fears that the United States is overly reliant on foreign sources of rare earth elements. These elements are crucial to many modern technologies, including green energy like wind turbines and electric vehicles.

The U.S. must have sufficient rare earth elements

There's not really a shortage of rare earths, it's just that the cheapest way to extract them is in one place. If you're the second-cheapest place to extract them, you lose market share quickly. That is one of the reasons why the Western world may have gotten itself into trouble by relying on supply chains from countries we don't trust these days. When faced with this question: How much are we willing to interfere with free market functioning in order to secure our supply chains? Europe has done something very reasonable by getting heavily dependent on natural gas from Russia, which was and still is a low cost producer.

The free market didn't properly quantify the risk of a real estate collapse in all areas of the country. If you're talking about government regulation, it's important to acknowledge that there are times when the free market doesn't price risks adequately and needs government intervention, like capital requirements for banks to ensure that the system can survive them. You need to keep around inventory or production capacity that will not be paid for by the free market if you think it's important to maintain a supply of toilet paper or baby food.

The recycling of rare earth materials

The market value for things like rare earth permanent magnets will be high enough that there will be a huge commercial incentive to recycle, the same way we do with catalytic converters today. Over the next 30 years, a large amount of rare earths will be extracted from the earth. At that point, it is cheaper to recycle than to mine new material.

We must make sure that we rightsize the mining operations. It is tricky, because there will be money to be made by controlling those resources in a transient way, but if you capture the market by polluting your country heavily, you will have to deal with the same situation as the U.S. has with coal and mining tailings. We want to avoid underbidding other countries by lowering our environmental regulations, but that also means it will be very difficult to capture the market if one country is willing to pollute its land in order to do so. We have no choice but understand those trade-offs and make sure that whatever decisions we make as a country consider how much we are going to have to do something rather than just rely on free market forces entirely for allocation.

As co-chair of the Congressional Inventions Caucus and member of the House Committee on Science, Space and Technology, Foster has been eager to watch the transition to electric vehicles. He credits the Obama administration with betting on clean energy – and wants Congress to continue investing in technology of tomorrow.

Rising gas prices

A lot of people are suffering from the very high gas prices right now and all of the secondary effects it has on our economy. What we should focus on is increasing the supply on a temporary basis and reducing demand on a temporary basis. If you drop the federal tax on gasoline, that's not going to change the refining capacity. The problem is more people want to drive right now than we have refining capacity in this country. There's not enough refining capacity, and someone will have to decide not to drive.

My guess is that most of the extra cash will just show up as a price increase if you do that, which is why we're discussing a windfall tax. My hope is that if we do go with something like a windfall tax, it will be an avoidable tax for the petroleum companies if they speed up the transition of their business to renewable. The current difficulty is that increasing capacity will be a stranded investment because of the rate at which electric cars are being adopted in the United States. Within ten or twenty years, most of our current refining capacity won't have any use. So companies are correctly wary about increasing capacity now knowing it's going to be a stranded asset.

The future of electric vehicles

The crossover between the price of an electric vehicle and a gasoline or diesel powered vehicle has occurred much quicker than expected. In Illinois, for example, it is cheaper to buy an electric truck than a gas truck. While the electric truck costs more when you initially purchase it, after factoring in the difference in gas prices versus electricity price, it actually saves money by buying the electric truck during month one.

Congress has to watch out for the ultimate need for charging capacity from our garage. As battery technology advances, you'll see ranges going up and up. Soon, you'll reach the point where you rarely need a charging station and almost everyone will do most of their driving by recharging at home. So we have to be careful not to over-invest in stations that are not in the right places. If cars can drive 500 miles, which is close, then you will really only need a charging station at hotels where you can recharge your car overnight

We have to make sure that the government's investments are the right ones, not so much for today's technology but for tomorrow's. It is like what Wayne Gretzky said: You have to skate where the puck will be, not where it has been. That is true technologically. My background in business and technology gives me some insight into where the puck is going; I feel occasionally useful in Congress because of that.

President Trump's plan to increase oil production in the U.S. is a way to achieve energy independence, which would reduce America's reliance on foreign countries for

Research is the most important thing. Many of the electric cars that are on the road use cathodes that were developed in Argonne National Lab. A lot of the basic chemistry for batteries, semiconductors, and other elements in electric cars were created with federal funding or under federal contracts to companies that didn't yet see a market for them.

We should spend some money to bridge the valley of death. This is when you have a technology that is at the threshold of being commercially viable and because of its benefits to the country, it's worth investing in by the federal government. In this case, Congress must act like a very wise venture capitalist.

About ten years ago, the Obama administration made two significant bets with taxpayer money. One of them was on a not unreasonable idea for cheap solar cells from a company called Solyndra, which ended up bankrupting and costing about $300 million in federal funds. At the same time we also bet about $400 million on the startup Tesla to build their first car factory. It was risky at the time, but that investment has paid off enormously for our government. If you look at how much money we've recouped from our investment in Tesla, it's like half a trillion dollars. The capital gains tax collected from Elon Musk this year will easily cover that loss and more; it works like venture capital investments do - most of them don't pay off, but a handful change the world.