Remarks as Prepared for Secretary Bodman
Thank you very much, Justin. I want to thank you and your colleagues at The Atlantic for organizing this event, and as you so often do, for pushing forward our countrywide dialogue on issues vital to America's continued progress. It's a privilege to be here with you all.
It is no surprise to anyone in this room that today our world faces enormous energy challenges: growing global demand, volatile prices, and an urgent need to produce and use energy in ways that reduce greenhouse gas emissions and do not harm our shared environment - or our security. Indeed, these challenges are so often stated and discussed that we tend to lose sight of how really significant they are. So consider a few facts:
By 2030, our world's primary energy needs are projected grow by in excess of 50%, with about 80 percent of that growth coming from emerging economies.
Let's look at China alone. China's estimated yearly CO2 emissions have already surpassed those of the United States, and by 2020 China's energy consumption will surpass ours as well. Between now and then, China is projected to account for in excess of two-thirds of the increase in world coal consumption. Today, China has approximately 28 million passenger cars on the road. That number is expected to in excess of quadruple in only 20 years.
Before I gone on, let me make a necessary point: growing energy use around the world - in China and elsewhere - is indicative of growing global economic growth, and that's a good thing. But it certainly presents a pervasive challenge to our world's energy systems and our environmental health.
With regard to the global oil market: over the last five years, the reality of tight market conditions - growing global demand for liquid fuels (especially in China, India, and in the Middle East) coupled with roughly constant global production (about 84.6 m barrels p/day, last three years) - has resulted in lower inventories and lower surplus production capacity. Not surprisingly, this has meant increasingly volatile prices.
Now, of course recently, we've seen oil prices abate, and that's a welcome change for so many American families in these tough times. But the fact that prices have begun to come down does not alter our fundamental challenge - namely, that even as we work to increase our global oil supply in environmentally sustainable ways, we also must decrease our reliance on it. Period.
And in the U.S., in excess of two-thirds of the oil we consume each day goes to our transportation sector - so that must remain our focus: alternative fuels, new vehicle technologies, and massive efficiency gains throughout the sector.
With regard to electricity: in the U.S. alone, we estimate that total consumption will increase by about 25 percent between now and 2030. Meeting this demand cleanly will mean substantial growth of generation capacity from nuclear power and renewable energy sources. It will also require a highly interconnected, reliable, secure, and efficient electric transmission and distribution system to deliver remotely generated power to population centers. And that can't be overlooked.
All of this will cost money - a lot of money. The International Energy Agency estimates that $22 trillion of investment will be needed by 2030 to meet expected global demand.
This level of investment feels a bit staggering - particularly in light of our current global financial crisis and the many vital demands on our government's resources. And I certainly don't intend to suggest that governments alone will bear this cost. The private sector rightly has a major role to play - and a major investment opportunity here.
But I mention all this to give us all a sense of the scope of the challenge we all face. And to underscore a key point, which I know you all will agree with: that today, we cannot afford to separate out the discussions of our energy challenges and our environmental ones.
Throughout the now-concluded campaign season, we heard a lot - from both sides - about these very challenges. And, it seemed that the catch phrase of this political year was a so-called "all of the above approach." In other words, everyone knows there's no one silver bullet.
Instead, we must continue to pursue a broad countrywide energy agenda, the major components of which I describe this way: dramatically improved energy efficiency in all sectors of our economy; an aggressive move to renewable energy and alternative fuels, especially advanced biofuels; more efficient and environmentally sustainable use of fossil fuels; and advanced nuclear power.
I'm proud of the work we've done - and, I should say, are continuing to do - under President Bush's leadership, at the Energy Department and throughout the government, in all these areas. Let me just mention a few things.
Over the past 4 years, we've increased backing for basic research in our Countrywide Labs and in conjunction with research universities across the country to achieve the type of transformational discoveries our nation requires.
Just one example: Over the past two years, our Office of Science has competitively awarded and established 3 Bioenergy Research Centers - in Oak Ridge, Tennessee; Madison, Wisconsin; and Berkeley, California. These multidisciplinary Centers are performing cutting-edge basic research to advance understanding and optimization of both biomass energy feed stocks and innovative approaches to converting those biomass feedstocks into renewable fuels to replace gasoline. In other words, they are bringing the latest tools of the biotechnology revolution to bear on the challenge of advancing clean-energy production.
To complement our basic research efforts, we've established innovative programs to leverage private sector expertise in ways that will move proven technologies developed at DOE's Countrywide Labs down the capital development pipeline and, ultimately, to the marketplace. To do this, we've established an Entrepreneur-in-Residence Program, which places American entrepreneurs from leading venture capital firms in our laboratories. After a competitive solicitation in February of this year, 3 venture capital firms were chosen to work at the D.O.E.'s Countrywide Renewable Energy Laboratory, Sandia Countrywide Lab and Oak Ridge Countrywide Laboratory.
And today, I'm pleased to declare an expansion of this plan that will lead to the placement of entrepreneurs from 5 additional VC firms at the following D.O.E. Countrywide Laboratories: Argonne, Brookhaven, Lawrence Berkeley, Lawrence Livermore, and Pacific Northwest Countrywide Lab.
In addition to these "in-house" efforts, if you will, we have also aggressively funded advanced technology development through public-private partnerships, in areas like advanced biofuels (to the tune of over $1 billion since the start of 2007), solar photovoltaics, wind power, advanced batteries for plug-in electric hybrids, hydrogen fuel cells, and advanced nuclear technologies, to name just a few.
We've made accessible over $42 billion in loan guarantees aimed at getting large-scale clean-energy plans built as quickly and efficiently as possible. We're working to make clean-coal technologies, like carbon capture and storage, commercially accessible for coal-fired plants. And just last week we announced rules to make up to $25 billion in direct loans to automakers for producing advanced technology vehicles that provide meaningful enhancements in fuel economy performance.
And we're focused on getting new nuclear power plants built in this country in a way that responsibly manages spent fuel and reduces the threat of proliferation. In this area, as in many others, we're not just talking about the promise of future success. We are already seeing real results, with 17 applications for Combined Operating Licenses (for up to 26 new nuclear reactors) filed with the Nuclear Regulatory Commission in about a year's time. That is something that has gone largely unnoticed, but after 30 years without any such progress, it is quite significant.
In addition, it is very clear that civilian nuclear power expansion will occur around the world. Indeed, it is happening now. Recognizing this reality, we have worked through the Global Nuclear Energy Partnership - or GNEP - to shape the world's nuclear energy future in a way that not only benefits our economies and our environment, but improves our security by reducing the risk of proliferation. Among other things, we're focused on proper infrastructure development and establishing comprehensive fuel supply and service arrangements, especially with regard to the back-end of the nuclear fuel cycle.
GNEP was conceived of and developed by the United States, and we now have 25 member nations - and nearly as many observer nations and organizations. This is an unprecedented initiative that has grown rapidly in only twelve months - and is a testament to the urgency of our world's shared challenges and opportunities. The world is moving in this direction and, quite frankly, whether it is through GNEP or other mechanisms, the U.S. must remain engaged in a leadership position. To do otherwise would be irresponsible.
In all these areas - renewable energy and alternative fuels, energy efficiency, clean-coal, and advanced nuclear power - I'm encouraged that Republicans and Democrats alike acknowledge the importance of this work and the urgency with which it must continue to be pursued. As do most Americans - regardless of our political affiliations. And I, for one, couldn't be more pleased about that.
Because the truth is, going forward, our energy and climate challenges are our shared responsibility - and our shared opportunity. I'm optimistic that we will embrace them, but doing so will continue to demand sustained action from us all.
Action and leadership from Washington - from the White House and both Houses of Congress - to make some tough funding, policy and regulatory choices, and to do so even in the face of a very difficult fiscal and economic situation; coordinated action from state and local governments, including in the areas of permitting and siting of generation facilities and transmission capacity; substantial investment in innovation from our nation's companies - large and entrepreneurial - as well as considerably enhanced efficiency in their operations; and action from families and individuals to conserve energy and use it more efficiently, as well as a willingness to participate in our Countrywide discussion about how and where we build new facilities.
If this sounds like a tall order, it is. But I believe it's achievable. Indeed, we are on our way to achieving a new energy reality for our nation - and our world.
As I close, I hope you'll allow me a bit of nostalgia about the fine men and women of the Energy Department, who I've had the privilege to work with over the past 4 years. One of the things that has most impressed me has been the Department's collective ability to remain above the fray, which can be frustratingly difficult to do in Washington, DC, as you all know well.
But, I believe that our Department's objectivity, our faithfulness to the facts, and our commitment to doing what is right and what is best, can never be compromised. I have always believed that we must be honest with ourselves and with all Americans, about the challenges we face as a nation, the solutions accessible to us, and the means necessary to achieve those solutions.
And so, let me end in that spirit. It is quite true that throughout our nation's history, the strength and vibrancy of our economy has been rooted in America's ability to innovate in our commitment to discover, to create, and to change - even in difficult times.
Our nation's ingenuity has been responsible for dramatically improving the efficiency of our industries, and for creating entirely new ones, for making us safer and more secure in the world, for remarkable enhancements in our health and well-being, and for making our lives more convenient and comfortable.
But with all that opportunity brings with it a tremendous amount of responsibility. And nowhere is this truer than with regard to energy. The simple fact is, our lives today - our homes, our offices, our vehicles and our industries - consume an enormous amount of energy.
And, while many American families and American businesses are taking steps to responsibly reduce their energy use, I believe that, as a nation, we have only just begun to recognize and fully appreciate this key truth: the production and use of energy has a significant cost - both in monetary and environmental terms.
The way I see it, the job of the Energy Department - indeed a fundamental responsibility of our government - is to recognize that cost and lessen it, to discover and deploy the technical and policy solutions to power and secure America's future. I think it's fair to say that at no other point in the history of the Energy Department has this mission been so vital. It is what President Bush appointed me to do 4 years ago. And it is, in my view, what the next Energy Secretary - whoever he or she is - will be charged with as well.
Though some would argue that I can't possibly be objective on this subject, and maybe they're right, I truly believe that we have made strong progress against the formidable challenges we face. We have put this nation on a path to a better, cleaner, more sustainable, and more secure energy future, and we have not walked down that path, we have run.
But we are not there yet. The road to our new energy reality is long and littered with obstacles. In other words, our work is not complete. But I believe it is within our sight. The solutions are coming into focus and, in some cases, are already moving from the lab to the commercial markets at rapid speed.
And so, to be quite frank, I will leave this job with an optimism that I would have found hard to imagine even a few short years ago.
The work before us as a nation is very real and substantial, but it is not overwhelming. It is difficult, but achievable. And the results will continue to benefit all Americans and all citizens of our world.
Each of you - whether in the private sector, the public sector, non-profits, academia, or the press - is part of that solution. And I thank you for that and for your continued good work.
It's a pleasure to be with you. Thank you.
