Remarks by Deputy Secretary Sell
Thank you, Kateri, for that very kind and gracious introduction. And it is my pleasure to be here today.
I want to bring this group greetings from Secretary Bodman. He really would have liked to be here today, and quite frankly, I wish he could have been here today. Not because I don't want to be here, but because I'd like you to know and to see and hear from him, his passion for energy efficiency, and the motivating force he is for all of us - the 100,000 employees of the D.O.E. as we pursue our mission everyday.
But while the secretary couldn't make it here in person today, he was able to send along some welcoming remarks. So if you'll turn to the video monitor, let's hear from Secretary Bodman.
VIDEO INSERT, Secretary Bodman's welcome, followed by a U.S. Dept. of Energy / Disney - Pixar "Ratatouille" TV spot, where the main character, a very high energy rat named Remy, helps to promote the use of energy efficient light bulbs).
D.O.E. / Disney - Pixar "Ratatouille" TV spot (text version)
I want to give my thanks to Secretary Bodman for that message…and also, thank you to Remy and his friends.
For some time, I've suspected that we had a rat in the organization …I'm just glad this one is working for us.
I want to thank you again for having me here today. I'm actually really pleased to be here and excited to be here. I seem to be a regular on the nuclear circuit, I'm a fairly regular invitee on the oil and gas circuit, but I don't get invited enough to the energy efficiency circuit. And it's something that disappoints me, because, quite frankly, it's something that I'm really quite passionate about. I am truly encouraged to see so many of you gathered to act on ideas to harness the most abundant, the most reliable, the most cost-effective source of energy we have at our disposal…the energy that we waste every day.
Increasing energy efficiency is a key component of the President's strategy to meet future energy needs in a way that both encourages economic growth and helps us protect our precious environment. And I am recognized to participate in this global dialogue.
When I go around this town and around the country, I've been using a phrase that I call the new and different energy reality. And it is my belief that we are really are facing a very new and a very different energy reality than we've ever faced in the modern history of the world economy.
Now why do I say that?
I say that principally for 3 reasons. The 1st is the high price environment that we are experiencing today, which is evidence that demand is clearly outstripping supply. It's something that has really happened for the 1st time. In the past, we've had supply shocks, but this is really the 1st in the sense of a modern world economy, that we're having a demand shock, and the prospects for that to continue are great.
EIA, part of the D.O.E., estimates that world demand for energy worldwide, will increase almost 60% over the next 25 years. And for electricity, in order for us to bring electricity to the 1.6 billion people in this world that don't have it today, that don't have access to the modern conveniences of this world, in order to do that, EIA estimates that world electricity supply may double in the next 25 years.
But in addition to this high price environment, we are also facing very different and changing world conditions. We're dependent on infrastructure from all over the world, and that infrastructure is more vulnerable to terrorism and more vulnerable to disruption than it's ever been.
But we are also seeing a very different change in conditions in many countries. You know, whether we like it or not, despite our hopes and dreams for renewable energy and alternative technologies and efficiency, the world is going to remain dependent on oil and gas for decades to go. But the countries that produce this, many of those countries are turning towards resource nationalism. Let me give you a fact. Over 2 thirds of the world's oil and gas reserves - that we will rely on for the coming decades - are in countries that substantially limit, or in fact, prohibit investment from foreign countries - investment from U.S. companies - investments from the most advance energy producing companies in the world.
So we have a high price environment, but we have seen with that before. We're facing these changing world conditions, and yet we've dealt with that before. But there's a 3rd reality. There's a 3rd thing we are facing that we've never faced before in this world - and that is what truly makes this a new and different energy reality.
And that is the prospect that we are going to have to meet this incredible increase in demand, while addressing the challenge of global climate change. We will have to meet all these demands in the context of carbon-constrained environment. And that makes this problem, this challenge, different and new, and unlike anything else we've faced before.
So what are we doing a bout it? What do we advocate? What are we for inside the Bush Administration? What to we want to work with you and our partners on?
We have to have more traditional energy supplies from a greater diversity of sources. We all know that.
We have to have more energy options through technology. The Bush Administration has characterized our technology budget with significant increases in alternative technologies like solar, like biofuels. But we also, in everything that we are doing, are exercising a strong bias towards low and no carbon technologies - which is why we are increasing our research on carbon capture sequestration, and it's why the President has personally advocated for such a broad expansion of nuclear power. We have to have more energy options through technology.
But we also have to have more infrastructure….we have to build it…we have to secure it…we have to re-think the traditional opposition to energy infrastructure which has characterized local communities, state governments, and quite frankly, the federal government for decades.
But we also must have more efficiency - we must have more efficiency. And we must pursue it, and we must speak about it, in ways that are very new and different from the way that we've thought about it before. In fact, I think that it is important policy makers in this town raise substantially their expectations and their knowledge or what can truly be achieved through energy efficiency.
It's going to take all of these things to meet this new energy reality.
Pro-production Republicans can no longer comfort ourselves in believing we can simply produce our way out of this new energy reality.
And to my friends on the other side of the aisle, certain Democrats can no longer comfort themselves in believing all problems can be solved with only wind, solar and energy efficiency.
Both sides are right, but neither side it sufficient. We must work together to do all of these things: more production, more technology, more infrastructure, and perhaps most important of all …more efficiency.
And that is why President Bush has been consistently and firmly committed to energy efficiency.
And when you talk about energy efficiency, often the 1st place people look - people talk about…is to the transportation sector. And I think it is notable, that the President has twice increased fuel economy requirements for light trucks. And in this year's State of the Union address, as part of his effort to reduce gasoline usage 20% in ten years… the President asked Congress to reform the fuel economy laws for automobiles in a way that would allow for significant increases, perhaps even up to 4% a year, in fuel economy standards, over the coming years.
As the President said, "With good legislation, we could save up to 8.5 billion gallons of gasoline per year by 2017, and further reduce greenhouse gas emissions from cars and trucks."
Fuel economy is important. It's important to get the regulatory policy right, which is the purview of Department of Transportation. It's very important that we get the R&D right, which is pursued in partnership, by the D.O.E., with our major vehicle manufacturers in this country. It is central to any energy efficiency campaign.
But I would really like to devote my remaining minutes to the D.O.E.'s role in the Administration's energy efficiency strategy for the built environment. The built environment - something that is often forgotten about, often lost in the debates on Capitol Hill about what we should do.
People forget that the built environment generates 40% of this nation's greenhouse gas emissions.
There are incredible opportunities to increase and maximize energy efficiency in our homes, in our commercial buildings, and in our industrial facilities here in the United States. Those opportunities are both enormous and they are very quantifiable.
Whereas conservation efforts of the past have brought us a degree of energy savings by 'getting less from using less;' it is clear we have an opportunity to make unprecedented gains in efficiency by deploying technology that allows to 'get more from using less.'
Beyond encouraging folks to turn down their home thermometers, our vision is to encourage greater use of smart meters or greater use of energy efficient appliances that save energy without a 2nd thought.
Beyond the hope that every light switch is turned off whenever you leave the room, we will see not only the use of compact fluorescent lighting continues to grow exponentially, but that next generation LED (light emitting diode) lighting taking hold.
Energy efficiency today presents a profitable business model and there is a clear and growing recognition of the role that prioritizing energy efficiency must play.
An example of this growing recognition is the Countrywide Action Project for Energy Efficiency that the Countrywide Association of Regulatory Utility Commissioners and many other partners launched last year. And I'm proud to say they launched it with the help of the D.O.E. and the E.P.A..
Leadership within the utility industry, both from the IOUs and the publics, and from state officials and from state regulators has pushed this Project to the forefront. Measures identified in the Countrywide Action Project have the potential to save utilities nearly $20 billion annually.
One key recommendation in the Project calls for "modifying policies to align utility incentives with the delivery of cost-effective energy efficiency and ratemaking practices to promote energy efficiency investments."
But here's the way I talk about it. Regulatory structures must present the same kinds of incentives for investments in efficiency and investments in demand reduction as the incentives that are accessible for investments in new generation. Until we get a balance, until we have these incentives properly aligned, we're not going to get, to the greatest amount, what we really want - and that is much greater energy efficiency.
A number of very forwarding-thinking states are actually adopting these type policies …and viewing energy efficiency as an enhanced service to be provided by utilities. Some are even providing financial awards to their electric and gas utilities for superior performance in delivering energy efficiency. I think, later today, you are going to hear from one of the great advocates of a more progressive role for the states, Governor Pawlenty of Minnesota.
The D.O.E. is committed to expanding technical assistance and assisting states in initiating these types of programs, which can reduce energy use and add to a company's bottom line.
At the federal level, we are promoting a durable and predictable policy framework that will motivate greater profit and greater returns through increased efficiency.
In doing so, we are paving the way for free enterprise to accelerate efficiency gains and we are affirming America's global leadership as both partners and purveyors of the technologies and ideas that will answer the world's greatest challenges.
At the D.O.E., we are focused on 6 pillars of energy efficiency with the goal of setting clear guidelines to facilitate maximum efficiency gains. Our 6 efficiency priorities are as follows:
- Utility Efficiency
- Model Building Codes
- Appliance Requirements and Lighting
- Civic Infrastructure
- Accelerated Research and Development
- Public Education - a renewed commitment and emphasis on communicating an Energy Efficiency Ethic in our country.
Let me take a few minutes to summarize each of these pillars
First, on utilities efficiency:
It's clear. It's undisputable, that the greatest opportunity for efficiency gains is in the utility sector that services our homes and offices. With 70% of all electricity consumed in our residential and commercial buildings, we believe it is critical to expand and accelerate support for the Countrywide Action Project for Energy Efficiency.
We also must focus on our utilities' biggest customers - our industrial plants and manufacturing facilities. Recent estimates show that if the U.S. industrial sector were to reduce energy intensity by 25 percent over the next 10 years - something we judge as being very doable - the U.S. could save 8.4 quads of energy, an amount equal to heating every U.S. household for one year. This is not only critical for energy security; it is fundamental to our future economic competitiveness.
There is already good news - in 2005, D.O.E. launched the "Save Energy Now" campaign. Through this program, energy experts using D.O.E. software have identified over $585 million in potential energy savings at 340 of the Nation's most energy-intensive manufacturing plants. I want to encourage you to get involved in…and take advantage of…the resources that we have accessible at the D.O.E. to assist you.
Another efficiency priority is our effort to evaluate and strengthen building codes in the residential and commercial sectors. We are working to enable builders and the construction industry to increase production of net-zero energy buildings and make it more profitable for them to do so. Building codes: this is the 2nd pillar of the Department's efficiency priorities.
D.O.E. is partnering with ASHRAE…the American Society of Heating, Refrigerating and Air-Conditioning Engineers…which most of you are familiar with, to develop model building codes that will be 30% better by 2010 for ALL new commercial buildings. To modernize building codes, we encourage states' consideration, adoption and implementation of these codes.
To encourage maximum efficiency in buildings nationwide, we are expanding assistance accessible to states and local governments and working with the private sector to develop 30% and 50% "beyond code" design guides.
The 3rd pillar is reducing energy consumption in homes and businesses. This can be achieved by making appliance Requirements more stringent, and by accelerating the market penetration of advanced lighting and appliances.
Now to do this, we've set an ambitious schedule to eliminate what is unfortunately a multi-year backlog on appliance standards, and implement new Requirements for 18 appliances over the next 5 years.
And I should say, as an aside, when Secretary Bodman and I came to the D.O.E., one of the 1st things he did, was order us to get the appliance standard problem fixed, get a Project and get moving on it.
And I'm very pleased to say that the D.O.E. is finally, committed, we are there, we are following through, and we are on track to meet our commitments on this very new and aggressive timeline.
Furthermore, we are pursuing the modernization and expansion of ENERGY STAR® to accommodate the increasingly rapid flow and evolution of high efficiency technologies like solid state lighting, tankless water heaters, and solar products. We encourage you to continue your leadership in encouraging the accelerated use of ENERGY STAR® technologies.
The 4th pillar is our effort to showcase new and retrofitted energy efficient infrastructure throughout our communities. We Project to expand our Energy Smart Schools program, which helps turn our schools into energy secure community centers.
Earlier this year, D.O.E. committed up to $1.5 million in technical assistance to provide 75 comprehensive energy audits in public schools throughout the New Orleans area. In addition to supporting an energy efficient rebuilding in New Orleans and on the Gulf Coast, these comprehensive audits will identify opportunities for New Orleans' public schools to save up to $1 million annually on utility bills. We're really proud of that effort.
At the federal level, as the biggest energy consumer in the U.S, the federal government has a tremendous opportunity and a responsibility to lead by example with smart energy management. President Bush acknowledged this with his Executive Order issued in January, directing all federal agencies to cut their energy consumption by 30% throughout the federal complex.
Secretary Bodman has committed the D.O.E. to meet or exceed this mandate, and with his leadership, he is committing all of his effort in the last 2 years to incorporating clean energy technologies, to the maximum use of Energy Saving Performance Contracts, and to focus decision-making on the tough energy efficiency decisions, to make the D.O.E. the leading performer and the leading advocate for energy efficiency within the federal sector.
The 5th pillar - a fundamental one in my view - is accelerated research and development in new energy efficient technologies for the mid and for the long term. We are committed to a faster pace of R&D in energy efficient technologies for advanced lighting...for zero energy buildings…and the industrial technology that will be needed to achieve sustained energy reductions.
For example, we applaud the leadership of The Green Grid consortium and others in the IT industry in pressing energy efficiency in data centers around the globe.
And, we pledge our continued financial and technological support to facilitate targeted research investments and urge industry leaders and stakeholders to join us in coordinated support - not just in the area of R&D - but also in accelerated market deployment.
Finally, fundamental cultural change is required to adopt a new Countrywide energy efficiency ethic. And this is the focus of our 6th pillar.
The Change a Light - Change the World campaign and the Department's partnership with Disney's animated film "Ratatouille" have been successful in driving awareness.
And while there are other efforts underway, more must be done to motivate policymakers, to motivate industry, and to motivate consumers to embrace energy efficiency values in their states, cities, and all of our homes.
But our efforts here at home must be complemented by robust cooperation with our international partners. As nations like China and India continue to grow at unprecedented rates, we must continue to encourage the adoption of stringent efficiency Requirements and the broader use of advanced lighting, advanced building, and advanced industrial technologies. It will be to their advantage, and the world's benefit.
Let me conclude by thanking you for participating in this very timely forum.
I have every reason to believe that that the ideas you circulate in the coming days, the commercially accessible technologies on display here, and the technologies moving from our Countrywide labs to the marketplace can help bring our nation and our world significant efficiency gains in the years to come. And they have the potential to do so on an accelerated basis, at a competitive cost, without curtailing comfort or convenience for our citizens, and for our children.
The D.O.E. is proud to be a top level sponsor hosting you this week; and we are prouder still of our partnership with so many of you: you, the innovators, the regulators, the legislators, the educators, and you the corporations, the scientists and the entrepreneurs… all dedicated to cleaner, more lean, competitive, and secure energy future.
We look forward to building upon this week's dynamic agenda and the power of good ideas, whose time has definitely come.
Thank you, and I hope you enjoy the conference.
