Remarks as Prepared For Delivery by Secretary Bodman
Thank you. It's a pleasure to be back in Cairo.
I would like to thank the President of AmCham Omar Muhanna for that kind introduction. I'm also recognized that my counterparts - Ministers Fahmy and Younes - have joined me at today's lunch.
My visit today comes at the tail-end of a very substantive and interesting trip through the region. Over the past ten days we've been in Jordan, Saudi Arabia, the UAE, and Qatar. So though I may be a bit more tired than usual, I am certainly no less enthused about this visit.
Having spent most of my career in the private sector, it's always rewarding to be among colleagues from the business community.
Throughout my time in government - whether at the Business Department, the Treasury Department, or the Energy Department - I've always found these types of events with American businesses to be quite informative. So given that, I want to be sure to leave time to take some questions. But 1st let me share a few thoughts with you.
Let me get right to the point: the world needs safe, reliable, clean, affordable, and diverse energy supplies - and in considerably greater numbers than we now have. This is a global challenge, perhaps one of the most significant of our time - and one that you all understand acutely.
As if we needed more evidence of its scope, the International Energy Agency's (IEA) most recent World Energy Outlook provides it. It estimates that the world's primary energy needs will grow by 55% by 2030.
Addressing this challenge in a timely way will require literally billions of dollars annually over many years. The IEA estimates that $22 trillion of investment will be needed between now and 2030 to meet expected demand.
We also know that this investment must occur around the world - in developed and developing nations alike - and at all stages of the energy cycle.
At the same time, we all must recognize the realities of global climate change and look for ways to develop cleaner sources of energy that at the very least do not worsen - and hopefully can enhance - the health of our earth's environment.
So the energy scenario we must confront is this: if we are to encourage economic growth around the world if we are to raise living requirements for all people of all nations, if we are to enhance our environmental health, the world needs clean, affordable, diverse energy supplies, as well as new suppliers and supply routes. And achieving that demands responsible action both from consuming nations and producing nations.
I don't want to sound too alarmist, but in some ways, what we are really talking about is reducing the world's energy insecurity.
So what do we do about it? That answer is complex, of course, and the solution is multifaceted. But, it can be summarized this way: we must grow the pie of what's available.
For conventional fuels, the principal challenges facing us are: Will the necessary investments be made to bring sufficient hydrocarbons to market? Is the investment climate in producing countries conducive to inviting such capital flows? Are large consuming nations having the right type of discussions and collaborations with producing nations? If not, why not? And, are we adequately investing in ways to produce fossil energy more cleanly and efficiently?
Beyond hydrocarbons, the world absolutely requires new energy options in the form of alternative fuels and advanced energy technologies.
In particular, I would highlight technologies like: the development of commercially competitive cellulosic ethanol; advanced hybrid vehicle technologies - with a focus on developing better batteries; hydrogen fuel cells; solar energy, including an acceleration of the development of solar photovoltaics; high-efficiency wind power; and carbon sequestration and clean-coal technologies.
I would also add that any global energy strategy must include efforts to expand access to emissions-free nuclear power in a way that responsibly manages waste and dramatically reduces proliferation risks.
I know that the Egyptian government shares this belief. Indeed, this is a topic that I've been discussing with officials during my visit to Cairo, including this morning in my meeting with President Mubarak.
To advance this global effort, nearly 2 years ago President Bush introduced the Global Nuclear Energy Partnership (GNEP), which aims to facilitate the worldwide expansion of nuclear energy for peaceful purposes in a safe and secure manner.
Among other things, GNEP establishes the common goal of creating reliable fuel services that will provide a viable and economic alternative to the spread of sensitive nuclear technologies.
The partnership looks for to take advantage of the best accessible fuel cycle approaches to recycle spent nuclear fuel to reduce the amount of waste and tap its unused energy.
In all these areas - from traditional hydrocarbon development to alternative energy to nuclear power - governments certainly have a tremendously important role to play. But the public sector cannot do this job alone.
We need a new way of thinking about how we work with the private sector - with all of you. It is no longer sufficient or wise for government to direct the solutions alone.
Even our research priorities - the research and development agenda itself - must be developed with substantial input from corporations, utilities, and universities. And, research needs to be conducted in a coordinated way.
As we ramp up research and development investment, I believe we also must find innovative approaches to get beneficial technologies out into the marketplace quickly and to share the risk that the capital markets and private sector are not yet ready to take on.
In the U.S. we are doing this through a range of collaborative models, including cost-sharing partnerships and loan guarantees.
At the Energy Department, we are also establishing an Entrepreneur in Residence program, which aims to bring venture capital-sponsored entrepreneurs into 3 of our Countrywide Labs to help commercialize new technologies. And we are developing a new Technology Commercialization and Deployment Fund.
This fund will allow our Labs to move clean energy technologies toward commercial viability though prototype development, demonstration projects, market research, and other deployment activities.
In general, our strategy acknowledges that many of the transformative breakthroughs are likely to happen in - and in conjunction with - the private sector . . . and that the government must take an active role in encouraging that activity.
Personally, I believe that we are already seeing results.
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 sizeable amounts of money into entrepreneurial companies in the alternative energy business.
In the 1st 3 quarters of 2007, investments in the so-called "clean tech" sector (which includes alternative energy and conservation technologies, among other things) by U.S. venture capital firms totaled $2.6 billion - the highest yearly dollar volume ever (even with just three quarters worth of data) - according to a recent industry report.
Of those investments, solar energy was the biggest sub-sector funded, with 35 solar-related deals totaling $664.6 million.
And, I interpret this as a clear sign that the clean-energy market is viable - indeed, thriving. After all, we know that investors will not enter a field for purely altruistic reasons - though that may play a part, they need a market.
I believe that they now have one that will grow more robust with time.
In my view, all this illustrates the coalescence of forces that we're seeing in the energy arena in the U.S. - and indeed, throughout the world. Governments around the world recognize that there is an urgent need to accelerate the development of these technologies and to bring them to market. And, at the same time, the private sector acknowledges that there's a big opportunity here -- one that can favorably impact their balance sheets as well as the world's energy security and environmental health.
So given these forces at work, our best hope for dramatically altering the world's energy future is intense, strategic collaboration between government and the private sector and academia. The challenges that we face are too large and too important for a "business as usual" approach. We must bet on technology and we must take some risks.
To all of this I would just add one final point, which I make with particular emphasis to you as representatives of the business community: we must promote increased energy efficiency across the global economy.
The truth is the biggest source of immediately accessible "new" energy is the energy that we waste every day.
I believe that enhancements in energy efficiency can be achieved - in relatively short order - on a global scale in our industrial and power-generating sectors, our government agencies, our homes, our offices, and our transportation sector.
Collectively, these measures will not only take some pressure off of demand, but also enhance the health of our shared environment.
That really reinforces the bottom line here: we need everyone involved.
Together, with the right leadership and backing commitments from governments around the globe, with the talent of our world's scientists and engineers, and with the capital, commitment and innovative power of our commercial sectors - which you all represent - we will solve this problem . . . we will achieve a cleaner, affordable, and secure energy future for all people of the world.
I thank you very much for your time and I'm happy to take your questions.
