The challenge: Build the world's most fuel-efficient production car - one that gets maybe 250 miles per gallon and causes little or no pollution. The payoff: prize money from the group that awarded $10 million for the world's first private spaceflight two years ago.
When the X-Prize Foundation unveils its new high-mileage car contest later this year, it will join a small but growing number of competitive prizes for energy development. Instead of watching President Bush and Congress wrangle for months to just get Detroit to boost fuel efficiency by a few miles per gallon, why not offer fat cash prizes to the private sector for breakthrough technologies? Proponents say it's a cheaper and faster way to unhook America from its oil dependency.
"Ford's Model T got 25 miles per gallon, and today a Ford Explorer gets 18 miles per gallon," says Peter Diamandis, X-Prize Foundation chairman. "We believe the time is ripe for a fundamental change in what we drive - and we believe an X-Prize in this area can drive a substantial change."
Several of the prize ideas are coming from the federal government. For example:
• The Department of Energy (DOE) is authorized to award up to $10 million in incentives for next-generation technology that could turn wood and other fiber into ethanol.
• The DOE was also authorized by last fall's energy legislation to offer a $5 million "Freedom Prize" for tangible methods to cut US dependence on imported oil.
One drawback is that no money has yet been appropriated for either prize. But interest appears to be catching on. In hearings April 27, Congress weighed a proposal for a new "H-Prize," which would dangle $100 million in awards to speed up development of hydrogen-powered cars.
"There's been a rediscovery of prize competitions in the private sector, and now it looks like government is starting to follow," says Thomas Kalil, senior fellow at the Center for American Progress, a Washington think tank.
Such contests aren't new. In 1795, Nicholas Appert won 12,000 francs and Napoleon's gratitude for a canning system that fed his army unspoiled food. Charles Lindbergh flew across the Atlantic solo to win a $25,000 prize in 1927.
And the results have sometimes been impressive. Within a year after Lindbergh's feat, the number of aircraft in the US had quadrupled and the number of pilots tripled, says Mr. Diamandis.
Modest government interest has been growing of late. US agencies procure new technology mostly through contracts with universities and companies. Taxpayers typically pay, whether or not companies or researchers actually succeed.
But government interest in prizes began to grow after 1996, when the $10 million Ansari X-Prize was announced for a privately financed craft to fly into space.
Interest in the space prize spurred Mr. Kalil, then deputy assistant to President Clinton for technology and economic policy, to organize a National Academy of Engineering investigation into inducement prizes. The study found key advantages, including contests' ability to attract a broader spectrum of ideas and participants, cut costs and bureaucratic barriers, shift risk for achieving results to contestants, leverage financial resources, and inspire the public. In its final report, the academy recommended that "Congress encourage federal agencies to experiment more extensively with inducement prize contests."
On Friday, the National Aeronautics and Space Administration announced a new $2.5 million contest - to be administered by the X-Prize Foundation - called the "Lunar Lander Challenge." Winners of the contest must develop a lander that can take off, hover, travel 100 meters, land - and then take off again and return to the starting point.
Back on Earth, former Rep. Robert Shamansky wants to propose a national contest for a high-mileage car.
During his first tour in the US Congress in 1982, when the nation was still reeling from the second oil shock, the Ohio Democrat sponsored a bill to award $150 million to the developer of a car that got at least 80 miles per gallon. His bill foundered after he lost his reelection bid. Now, running in Ohio's 12th District, he hopes to revive the plan.
The idea may have been ahead of its time, Mr. Shamansky says in a phone interview. But "we have to be less dependent on oil - period. The contest idea was good then - and it's good now."
Pulling off such contests also requires a bit of P.T. Barnum showmanship to motivate the right people.
"There are countless failures you don't hear about," says Diamandis of the X-Prize Foundation. "It's all about creating the dynamic to attract the maverick thinker.... It's not about the gizmo - it's about the human being."
That means inspiring the likes of Felix Kramer, a California Internet entrepreneur who hopes to partner with a big auto company to create a high-mileage car. That's what his CalCars team did in September 2004, when it developed the prototype of a Toyota Prius with an electric cord, which users could plug in to charge a beefed-up battery. The extra reliance on electric power gives the "Prius-plus" better than 80 miles per gallon.
"Whatever this competition does, it has to somehow get Detroit involved," Mr. Kramer says. "A big golden carrot should help do that."