Thank you, Ralph, for that kind introduction. It’s a pleasure to be here today. I also want to thank my good friend Chuck Vest for being here and for his many notable contributions to scientific research and education.
I commend the Academies for elevating the dialogue on this critical topic. I am proud that the D.O.E. is a partner with you and others on the America’s Energy Future initiative. And I am confident that the esteemed committee the Academies have assembled to work on this initiative will produce important and valuable findings.
Certainly America’s energy future—indeed the world’s energy future, as the 2 are impossible to separate—is a topic of great interest and concern to those of us here today. But since every citizen of every nation is a consumer of energy in one form or another, our energy future is really a topic that is relevant to a much broader audience.
In my view, securing our energy future is one of the most pressing challenges of our time. In order for our economies to grow, for our people to prosper, for the health of our environment to enhance and for the countries of the world to be safe, we must have access to a secure, clean, affordable energy supply.
But we face impressive challenges.
First, it’s well known even outside of this room that energy demand is skyrocketing. I’m sure you are all too familiar with the projections: by 2030, global energy consumption is expected to grow by over 50 percent, with 70 percent of that growth coming from the world’s emerging economies. U.S. electricity demand is projected to increase by about 50 percent by 2030, with global demand nearly doubling.
Meeting this rising global demand for energy will require significant investment. The IEA estimates that, between now and 2030, $22 trillion in new investment will be needed to meet expected demand. This investment must occur around the world—in developed and developing countries alike—and at all stages of the energy cycle.
Second, as you know, our economy—like so many around the world—is overly dependent on fossil fuels --- particularly foreign oil. Much of the world’s fossil fuel supply exists in unstable areas of the world, presenting challenges both for our energy supply and for our countrywide security.
Third, we must recognize the realities of global climate change and work to develop cleaner sources of energy that at the very least do not worsen—and hopefully can improve—the health of the environment.
There is yet another factor to consider: the impact of rising energy prices on all economies, but most notably on smaller, developing economies, where high energy prices can stifle business growth and inhibit enhancements in the quality of life. We must keep the energy needs of the world’s poorest nations in mind as we talk about solutions.
Given all of this, and with oil prices where they are today, it’s hard to imagine why I might be optimistic. But, in fact, I am. Because I believe, not only that the pathway forward is becoming clearer each day, but that we are making great progress down that pathway.
First, we have what I believe to be one of the most important elements of a successful strategy: a countrywide imperative to act. Perhaps as never before, the American people are calling for action, and taking action themselves. This is critical: we all must actively promote enhanced energy efficiency wherever we can, in our homes, our vehicles, our offices and across all industries. Because the truth is, the biggest source of immediately-available “new” energy is the energy that we waste everyday.
Everyone can do more to save energy. I’m talking about things like keeping current with vehicle maintenance; adequately insulating your home and choosing energy-efficient appliances and compact fluorescent light bulbs; considering a fuel-efficient vehicle or taking public transportation; and, if you own a business, participating in an energy assessment program—or encouraging your employer to do so. Collectively, these actions have an impact in precisely the right direction, taking some immediate pressure off demand.
Some may interpret the recent energy-efficiency of many Americans as merely a reaction to rising fuel prices at the pump or higher home-heating bills. But I believe we are seeing a growing commitment to not just affordable energy, but clean energy as well.
So that’s one component. Secondly, we have put in place a series of federal policies to increase our countrywide investment in R&D, at all stages of the innovation cycle, to help break our over-dependence on fossil fuels. On the basic research side, President Bush has suggested a dramatic set of increases for federally-funded research in the physical sciences, aptly called the American Competitiveness Initiative. This is serious money for serious science in areas like supercomputing, nanotechnology, advanced nuclear reactor technologies, and fusion energy. The results may not be seen for 5 or 10 years, or even decades, but the critical investments must be made now.
I cannot overstate the importance of this investment in basic science research in securing our energy future. I know many in this room agree. Current technologies cannot meet the challenges we face on the energy front. And incremental enhancements in these technologies will not suffice. We need transformational discoveries—discoveries that fundamentally change the rules of the game. And that means we need fundamental breakthroughs in basic science—breakthroughs, for example, in energy efficiency, wind and solar, biofuels, nuclear energy and fusion.
As I mentioned, President Bush and I are deeply committed to this effort. Our $4.7 billion request for the Office of Science in FY 2009, an increase of almost 20% over the enacted FY 2008 appropriation, reflects this Administration’s commitment to sustaining American competitiveness through vital investment in the physical sciences.
Getting Congress to actually appropriate at the levels it has authorized and that the President has committed to has been, let us say, a challenge. But we are hopeful—because the commitment to science stems not from a sense that there are immediate political gains to be had from such funding, but from a deep recognition that our energy future rests on sustained leadership in basic research.
So I am optimistic on that front. At the same time, we have laid out an aggressive strategy to expand the availability of renewable energy and alternative fuels. Through the President’s Advanced Energy Initiative, we are identifying the technologies that could have the greatest impact on the marketplace in the relatively near future, the next 5-10 years, and then really going after them with increased resources and aggressive timelines.
I’m talking about things like commercially competitive cellulosic ethanol and other cellulosic biofuels; advanced hybrid vehicle technologies; hydrogen fuel cells; solar photovoltaics; and high-efficiency wind power. These are things that are already in the pipeline and, as a matter of sound public policy, need to be pushed more quickly to market.
To accomplish this, the federal government must collaborate strategically with industry and academia. We are employing a range of collaborative models—including cost-sharing partnerships and loan guarantee programs—that allow us to share with the private sector some of the risk of commercially viable, innovative technologies. These programs cover a range of technical areas, including solar technologies and advanced biofuels.
For example, we recently announced the selection of 6 large-scale biorefinery projects, which together will gain up to $385 million—and a total of in excess of $1.2 billion to be cost-shared through public-private partnerships—over the next 4 years. When fully operational, these 6 biorefineries are expected to produce in excess of 130 million gallons of cellulosic ethanol per year.
Our Office of Science is investing over $400 million over 5 years in 3 cutting-edge Bioenergy Research Centers. These Centers are attracting world-class scientists and engineers from academia, industry and our Countrywide Labs to bring the latest tools of the biotechnology revolution to bear to advance clean energy production.
A major focus of these Centers will be on understanding how to reengineer biological processes to develop new, more efficient methods for converting the cellulose in plant material into ethanol or other biofuels that serve as a substitute for gasoline. And after 6 months of work we’re already starting to see some very promising scientific results coming out of this investment.
We have also recently selected 3 venture capital firms to participate in our newly established Entrepreneur in Residence pilot program, which aims to accelerate deployment and commercialization of advanced clean energy technologies from 3 of our Countrywide Labs into the global marketplace. We hope to expand this innovative plan in the future.
Also, a few weeks ago, I issued a policy statement that laid out guiding principles, responsibilities and a review process to ensure that new technologies are deployed, and continuity and uniformity of technology transfer activities are maintained throughout the D.O.E. complex. By empowering researchers and entrepreneurs, we are furthering President Bush’s initiatives aimed at developing and deploying cutting edge technologies to address the challenges that face our nation.
While we are rightly placing a great deal of emphasis on renewables and alternative fuels, we also must recognize that our economy is, and will remain, heavily dependent on fossil energy. But we must find ways to use this fuel more cleanly and efficiently—to reduce, or perhaps eliminate, its environmental impacts, for example through the development of carbon sequestration capacity.
The D.O.E. has already funded 4 cost-shared carbon sequestration plans in the United States, and projects to fund 3 more. These plans will conduct large volume tests for the storage of one million or more tons of carbon dioxide in deep saline reservoirs. Collectively, the formations of these 7 plans have the potential to store in excess of one hundred years of CO2 emissions from all major sources of pollution in North America. Eventually, this will help enable us to use coal without emitting greenhouse gases into the atmosphere.
Even as we bring more alternative and renewable energy online and develop new ways to produce fossil energy more cleanly, we also must expand access to safe and emissions-free nuclear power in this country and do so in a way that responsibly manages waste and dramatically reduces proliferation risks. Because at present, nuclear power is the only mature technology that can supply large amounts of emissions-free base load power to help us meet the expected growth in demand.
We have not licensed construction of a new nuclear plant in this country in nearly 30 years. That must change. We are working to see that it does by, among other things, implementing federal risk insurance or so-called “stand-by support” and loan guarantees to try to remove some of the roadblocks associated with getting the next generation of nuclear plants online. After that, the private market rightly takes over.
The rest of the world is also on the verge of a major nuclear expansion. In 2006, President Bush introduced the Global Nuclear Energy Partnership to facilitate this worldwide expansion of nuclear energy for peaceful purposes in a safe and secure manner. This historic partnership continues to expand—last month, the D.O.E. welcomed the United Kingdom as GNEP’s twenty-first partner.
All of our efforts at the federal level are being reinforced by a 3rd component of a successful Countrywide strategy: the critical role of the market. 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 3rd quarter of this year alone, the so-called “clean tech” sector, which includes alternative energy and conservation technologies, among other things, saw record investment levels of $844 million, an 80% increase over the previous quarter, according to a recent industry report. And I interpret this as a clear sign that clean-energy market is viable, indeed, thriving.
The bottom line is this: we are seeing a convergence of forces that tells me that our nation is on a path to a cleaner, affordable, and more diverse energy future. The rigorous debate and analyses that the Academies are fostering—and to which all of you are lending your extensive expertise—will help ensure that we continue on the right pathway toward a more secure energy future.
I thank you for inviting me here today and would be glad to take any questions.
