Phase II of Renewable Energy in America

National Policy Conference

November 28-29

Cannon Caucus Room, Washington, DC

American Council On Renewable Energy (ACORE)

<Applause>. Thank you and it is an honor and a privilege for me to once again join ACORE in trying to contribute to this policy forum.  It is an absolutely critical aspect along with the other wonderful activities that ACORE does in moving the new energy economy forward.  Given my background of 35 years serving in national security in the uniform of a sailor, I want to just spend a brief amount of time just bring my hands with you over the problem, because while this is about solutions and I will get there very quickly, I think that making the catalyst for change so compelling by letting people know exactly how daunting the challenge is is a necessary process.  We are addicted to oil in this country. We have tremendous competition globally for easy oil. The competition is going to continue.  It will get tougher, more expensive and that is the baseline, if you will, for a lot of potential conflicts.  We've had conflicts over, as my good friend Jim Wollsey [ph?] said, over salt in the past, whales in the past.   That continues. We've had conflicts over water.  That will continue. And certainly we are going to have a lot of conflicts over this precious commodity that has brought us to where we are today in the oil age. We need to recognize that our dependence as a nation on oil has dimensions of threat to our national security that hit all of the major pillars.  Militarily it was mentioned this morning, one of the externalities is the tremendous cost that this nation has paid over the past four decades and is paying today in blood and treasure to protect the lifeblood of the world's economy that flows out of oil producing countries, especially in the Persian Gulf. That is a tremendous cost and that is not going to get less if we continue our business as usual path on our dependence on oil.  Politically, we give up a tremendous amount of diplomatic leverage, because we lose moral authority in forms in which people either explicitly or implicitly understand, yes the United States, 25 percent of the world's oil consumed every year by that nation, and they sit on three percent or less of the world's reserves, tremendous undercut of our moral authority.  Our dealings across the table, Iran for example on the nuclear issue and around our side of the table hopefully and sometimes on the side of the table our partners and allies, that undercuts our ability to convince them that we are serious about any diplomatic initiative.  In our own hemisphere, one of my favorite guys, President Hugo Chavez, on a regular basis, insults by extension the people of the United States by insulting our elected leaders and this is not a sustainable situation. So we've already ceded a tremendous amount of political leverage.  Lastly, economically, and this is really making itself felt by family pocketbooks and by our national economy, the drag of increasing oil costs.  Every single minute, every minute of every day, we send at $90 a barrel, $800,000 out of our economy to pay for oil.  It rolls up throughout a year and it now exceeds a total of one third, more than one third of our national trade deficit, just simply because we have to pay for this oil addiction that we have.  So how do we address this problem, this challenge? It is a challenge that must be addressed not simply from the context of what is our energy security?  What is the way to lessen our dependence on oil, especially imported oil? It has to do though certainly or address them in some way, but it also has to take into consideration what is the effect of any solution set on the environment, on local, regional and global environment?  That is the sweet spot of renewable energies, because with renewable energy, nationally and internationally we can increase energy security for developing countries and for the most developed country in the world by clean, green power.  We can reduce the carbon footprint of human activity by using renewable energy, and we can lessen our dependence on oil regardless of the source, whether it is from Alaska, Mexico, Venezuela or the Persian Gulf, this fungible commodity with divergent supply and demand curves can be addressed by renewable every.  This is the compelling message of what we have to say, what all of us need to say to each other, to our friends, to our colleagues about why we believe in renewable energy, because it addresses every facet of these very, very daunting and growing problems.  I've heard a lot of great thoughts today. We all have, and I am picking up some ways of going about the solution set. First of all, the solution begins by recognizing that we have a problem. And I just want to read briefly from a report that was produced earlier this year by the Senate for Naval Analysis and it is available on line called, "National Security and the Threat of Climate Change."  "Climate change, national security and energy dependence are a related set of global challenges.  As President Bush noted in his 2007 State of the Union speech, dependence on foreign oil leaves us more vulnerable to hostile regimes and terrorists and clean domestic energy alternatives help us confront the serious challenge of global climate change.   Because the issues are linked, solutions to one affect the other. Technologies that improve energy efficiency also reduce carbon intensity and carbon emissions."  So this is another, if you will sweet spot for renewable energy of doing all of those things in a very, very powerful way. What we need to do is scale it up and we need to recognize the barriers to scaling it up as quickly as it needs to be scaled up. The size of the solution set needs to meet the size of the challenge. And as someone said this morning, this is a very, very large mountain, but it is one that we have the capacity to climb.  Let me just, I was in the Christmas spirit writing a letter to Santa Claus and I've got my wish list here for Santa Claus, all of the things that I want to have happen before Christmas hopefully in the form of an Energy Bill and certainly in 2008.  But, one of the things is, last time I checked we have a government of the people, by the people and for the people.  This isn't a Washington problem. It isn't a Sacramento problem for John and his colleagues.  It isn't a Detroit problem.  It is a problem for every single one of us and we need to be part of the solution.  We need to speak out about the challenge and about the solution, the tremendous solution power that working together to scale up renewable energies can provide.  So, we need to exercise our roles and our duties and our responsibilities as citizens in speaking out to our fellow citizens and we need to hear this message echo loud and clear in these halls right now.  This Energy Bill, not next year, not after the inauguration of a new Administration and the installation of a new Congress in 2009, starting right now, because the problem is not getting smaller.  It is getting larger on a daily basis.  So some of the things on my Christmas wish list, at the federal government level, in the Energy Bill we need to have tough CAFÉ standards, tough corporate average fuel economy standards.  Thirty five miles per gallon by 2018 is in my view absolutely minimal and it's a start. And when you start thinking about things like plug in hybrids that operate on internal combustion engines, powered by flex-fuel that is a tremendous step. That will make 35 miles per gallon look very, very modest indeed.  We need tough CAFE, because Detroit has the capacity to meet this challenge as they have in the past. They need to mandate to light the fire under them to do it.  We need a renewable electric standard or RPS at the national level. The states get it.  Why can't the rest of the Union and why can't we have a national renewable portfolio standard in this Energy Bill?  We need to have incentives for bio fuels. We need to do that for several reasons; certainly most compellingly to replace a key sector of our energy demand and that is in our transportation.  You need liquids for the most part right now to do it. That will shift to electric, but we need to get going on our bio fuel scale up as a matter of priority.  We need to reduce oil subsidies, oil and gas subsidies.  That is business as usual.  If we really are addicted, why the hell do we want to go out there in search of new dealers to deal us this substance that may have been great in the past, but is doing us harm now and will do us greater harm in the future. We need to eliminate those subsidies.  It doesn't have to be draconian or right on top but it does have to start. At the state level, oh by the way, in this Energy Bill, it ought not to be for one year or two years.  We do need to have policy stability to provide the street and those investors, many of them represented here, with the kind of confidence that they need to put real money against real problems and realize real opportunities.  At the state level, follow the lead states.  At all of the state capitols and in the state legislatures, we need to look to states like California and others that have the right kind of laws, the right kind of vision and modify them as necessary to suit the unique challenges and assets of a particular state, but let's get on with that even as we invoke the federal government to try to get a national standard as well. Feed-in tariffs were mentioned by several folks this morning.   I think that that has to become a standard of best practice for the states. For those in the business in this room and there are many and those of your colleagues, we need to lead government.  We need to say yep it would b e great to have policy stability. Yes it would be great to have subsidies and yes it would be great to have lead-in tariffs, et cetera, et cetera.  But if we look at the physics, at the economics of the situation, we know which way this world is going in terms of energy and renewable energy is a huge part of our future.  Let's invest in it.  Let's continue to guide and encourage government to work that, but let's get on with it.  Let's take that risk and let's invest in it. We need to leverage where possible the infrastructure, recognizing that wherever you can come to market with a technology or a business that can fall in on an existing part of the infrastructure, whether that's a gasoline or diesel distribution system or electric grid or whatever, that is a good thing.  Our thinking should not be limited to that, but we should where possible, leverage the infrastructure that exists and look for partnerships with those folks who have a vested interest in the ownership and the good outcomes of that infrastructure.  Okay, we are going to change partisanship into partnerships and going forward, we recognize that this is our challenge and our opportunity. We need to change our mindset and the mindset of everybody that is a citizen and a consumer and an elected official in this Congress from the why we can't litany to this is how we will do it. Thank you very much. <Applause>.