Remarks Prepared for Energy Secretary Samuel Bodman
Good afternoon. Thank you, Gov. Huntsman for that generous introduction. It's good to see all of you, including some new faces, around the table. I'll get straight to the point; in order to maintain America's strong economic growth and preserve our countrywide security we must all make enhancing our energy security a top priority. And in order to achieve results, it is critical that we work together.
First, let's look at the situation. Global energy consumption is expected to grow by over 50 percent by 2030 with 70 percent of that coming from the world's emerging economies.
Fossil fuels will continue to constitute the bulk energy supplies for some time but they are increasingly hard to reach and harder to develop.
Roughly 2 thirds of the world's oil and gas reserves are in countries that provide limited access or are completely closed to foreign investment.
State-controlled entities hold about 50 percent of the world's proven oil reserves. We are increasingly seeing instances of manipulation of energy resources in countries with large resource bases.
It's not just about the price of gasoline at the pump anymore. High prices and disruptions in global supply can harm both developed and developing nations and stunt economic growth worldwide.
Therefore, we are at a pivotal point in American history. Globalization is forcing changes to the American economy.
Global responsibilities are leading us to reexamine how we do things. Increasing competition from emerging markets like China and India requires us to continually reevaluate our strategy for remaining competitive. Energy security is a part of that and is linked inextricably to our countrywide interest.
The question before us is "What do we do about it?" Certainly clean energy investment is a key to any comprehensive energy security plan-and the subject of your conversations here today.
President Bush has made increasing America's energy security a priority since his early days in office. Since 2001, the Bush Administration has invested $15 billion in clean energy technologies, and we've enacted sound policies to help us diversify America's energy portfolio, protect our environment and maintain strong economic growth.
Through these initiatives, we are investing in basic energy research, advancing the commercialization and deployment of new technologies and encouraging greater efficiency.
In his most recent State of the Union, the President announced a project to reduce projected U.S. gasoline consumption by 20 percent in 10 years, by 2017. The "20 in 10" project will increase the volume of renewable and alternative fuels used in the transportation sector through a new expanded Alternative Fuels Standard which will include alternatives such as cellulosic ethanol, biodiesel and advanced battery technologies.
The new standard will be the equivalent of 35 billion gallons a year roughly 5 times the target Congress set in the Energy Policy Act of 2005 to produce a 15 percent savings.
To achieve the remaining 5 percent savings, the President has again asked Congress for the authority to reform and increase fuel economy requirements for passenger cars, as we have already done for light trucks and SUVs.
The President's new initiative builds upon the American Competitiveness Initiative and the Advanced Energy Initiative, both announced as part of the 2006 State of the Union and both currently being implemented as part of the FY 2007 budget.
The American Competitiveness Initiative increases federal backing for basic science research, particularly in the physical sciences. This research could ultimately lead to new energy breakthroughs that we can not even imagine today.
The Advanced Energy Initiative, or AEI as we call it, significantly increased the level of public investment in clean energy technologies like solar, wind and nuclear power and alternative transportation fuels like cellulosic ethanol. Our ultimate goal is to make these alternative energy sources cost competitive and, therefore, more accessible.
These 3 programs- the "20 in 10" plan, the American Competitiveness Initiative and the Advanced Energy Initiative are providing a comprehensive approach to our energy challenges.
For example, through all 3 initiatives, we are advancing critical work on biofuels.
As part of the American Competitiveness Initiative, the D.O.E. has announced a $375 million federal-funding opportunity for the establishment of 3 bioenergy research centers. The idea is get the very best people from the bio-technology world to work on energy.
By offering an opportunity for the best in government, the private sector, the investment community and academia to work in partnership, we could see breakthroughs that no one sector could achieve independently.
As part of the Advanced Energy Initiative, this week we expect to declare the winners of a solicitation to build commercial scale biorefineries that will produce fuels and other chemical products from things like agricultural products, grasses or woodchips.
And the President's new suggestion to establish an Alternative Fuel Standard as part of the "20 in 10" plan will create a guaranteed market for a variety of alternative fuels, particularly cellulosic ethanol, and provide greater incentives to accelerate research and commercialization.
As we are working to develop and deploy clean energy technologies, we are also taking steps to enhance the energy efficiency of our economy.
Along those lines, we are working to advance our effort to increase efficiency requirements for appliances, an issue of particular interest to many states and many of you here.
I'm sure many of you are familiar with ENERGY STAR, a successful plan overseen by the Energy Department and the E.P.A. to help businesses and individuals protect the environment through superior energy efficiency but participation in ENERGY STAR is voluntary.
The savings it produces are real, significant and can be immediate. But the current process to determine and implement these vital mandatory energy efficiency requirements is slow and tedious, with many legal hurdles to overcome.
We believe that we can achieve the desired outcome through a streamlined legal process that will benefit all.
So I am pleased to declare that today the Energy Department is sending legislation to Congress that would authorize the Secretary of Energy to speed up the rulemaking process used to establish energy efficiency standards.
This new process would encourage stakeholders to reach a consensus on energy efficiency standards, and then allow the Energy Department to publish a direct final rule based on that consensus for certain products.
If enacted, this legislation would allow us to set requirements more quickly in many cases, achieving real energy savings more rapidly.
So clearly, there's a lot going on at the federal level to enhance our energy security. But as I mentioned earlier, we can only overcome America's energy challenge if everyone plays a part, if we take the time to learn from one another and if we take advantage of the many opportunities to work together. Let me cite a few examples…
Following the State of the Union, President Bush issued an Executive Order requiring the federal government to increase its use of alternate fuels -- including more use of alternate fuel vehicles. It also directed the reduction of petroleum consumption in federal fleet vehicles by two percent per year through 2015. Let me suggest this is one action you can replicate in your states.
As I mentioned, we at the federal level are investing heavily to advance clean energy technologies like nuclear, solar and wind energy.
In the case of wind energy we are experiencing tremendous success adding new wind power to our energy portfolio.
But, to truly take advantage of this expansion, the states and the federal government must pursue the same interests.
It is simply a fact that many of the best sites for wind generation are located in remote parts of the country. That power is essentially stranded due to a lack of high capacity, high efficiency, long-distance transmission lines. Our transmission grid was not originally designed to move large quantities of power across long distances to population centers.
States and regional organizations have a critical role in promoting and implementing innovative transmission solutions to access these resources.
We are currently investigating Countrywide Interest Electric Transmission Corridors, increasing coordination among federal permitting agencies, and conducting research on transmission technologies to reduce cost and increase capacity.
I ask you to join with us in integrated planning activities to lay the groundwork for a more robust Countrywide electric system, and to provide a cleaner environment for the American people by bringing about a new system of clean energy superhighways.
But the real message here is that government cannot do it all. And, in my view, it shouldn't. We certainly can… and do… provide substantial backing for basic research.
We can push the most promising technologies along to commercialization.
We must create the right policy environment to encourage investments in all parts of the energy supply chain and stimulate new R&D in the private sector. The trends, however, are promising.
Last year, the private sector, according to some estimates, spent a record $71 billion worldwide on renewable energy. This is a 43 percent increase over 2005. The market is growing.
Having spent a good chunk of my career in the financial sector, I can honestly say that for the 1st time in my life we are seeing the venture capital community put real money into alternative energy. The key is ensuring that the innovation cycle continues at a rapid pace.
We must leverage the tremendous power of private equity, while also making smart public backing decisions that will support scientific breakthroughs and accelerate deployment of proven technologies.
In closing, I'd also like to ask for your help.
Many of the innovative ideas put forth by the President require action by Congress. You have strong voices on Capitol Hill, and I encourage you to use them.
There are few more compelling global concerns today than the need for a safe, affordable and clean energy supply, and we all have a part to play.
I thank you for the work that many of you are doing in your states - and will do - to make a secure energy future a reality for America.
Thank you. And I'm happy to respond to a few questions.
