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Federation of Indian Chambers of Commerce & Industry (FICCI)

March 20, 2007 - 11:37am

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Thank you Geoff (Pyatt) for that introduction.  I'd like to thank FICCI for hosting this event and thank its leadership for their kind words.

I'm very pleased to be here in India - and to be with all of you today.

Since his very first days in office, President Bush has considered growing and strengthening the United States' bilateral relationship with India to be a top priority.  The shared commitment of President Bush and Prime Minister Singh to building our relationship was evidenced by the historic strategic partnership initiatives announced during the President's visit here in March of last year.

Having now served at three federal departments over the past six years, I can attest to the growing strength of our partnership.  At the Commerce Department, the Treasury Department, and now as Energy Secretary, I've had the good fortune of working with members of your government and representatives of the Indian private sector - including FICCI.  And over time, I've seen the relationship between our two great democracies change and expand.

Even before my time in government, I've watched India with close interest.  In the private sector, I did business here starting from the late 1980's.  At Cabot Corporation, I was involved in dramatically expanding our operations here - most significantly at a plant located outside of Mumbai.  What we recognized then was both the enormous potential of the Indian economy and the tremendous talent and promise of the Indian people.

In my mind, that really goes to the heart of why the relationship between our two nations is so critically important and why the people of the United States have such deep respect for the people of India.  In a nutshell: this nation is a place of seemingly limitless potential.

We all know the dramatic story: India has achieved remarkable economic growth and development in a very short period of time.  And it has done so on its own terms . . . and despite very real challenges related to population growth, poverty, infrastructure and, of course, the legacy of India's journey to independence.

India has blossomed economically because of the strong commitment of the current - and previous - governments to pushing this great democracy forward, but especially, because of the sheer talent, hard-work and entrepreneurial spirit of the Indian people.

We cannot forget this point and I could not make it to a more appropriate audience:  It is people who innovate, people who grow businesses, people who lift their fellow citizens out of poverty, and people who ultimately demand change and progress from their governments in a democracy.

The recognition of this fundamental power of our fellow citizens is a strong bond that unites the United States and India.  As democracies, we are committed in principle to the same essential values.  We believe in the rights of the individual, in tolerance, in equality, and above all, in freedom.  We aim for a better future for all our people.  And our success in this endeavor has always been a function of our ability to put those principles into practice.

I say all this at the outset because it is my sincere view that we share far too much in common to let any differences sideline our relationship.  And, even more than that, because I believe that this foundation of a shared system of government and a shared ethos of entrepreneurialism and hard-work compels us to forge a strong, lasting, and healthy relationship.  We should use what we have in common to address those challenges that we also share.

And, to be sure, there are challenges.  One such challenge is providing clean, reliable and safe energy to our citizens.

Here is the crux of the issue: whether or not we have access to a secure, clean, affordable supply of energy is directly related to whether or not our economies will grow and our people will prosper . . . whether or not our industries will operate efficiently . . . whether or not our earth's environment will worsen or improve . . . and perhaps most importantly, whether or not our people will be safe and secure.  Energy security is inextricably linked to our national interest.  And this is as true for the United States as it is for India - and all nations of the world.

As I said earlier, the economic growth that India has experienced in recent years is nothing short of remarkable.  But I ask you to consider this: What could it be in the future?  Think of what India - or the United States or any other nation - could achieve if growth were not constrained by high energy prices, by inadequate infrastructure, by an over-reliance on polluting fossil fuels, or, all too often, by discouraging investment climates.

For the United States and for India, the scale and scope of this challenge only promises to grow more pressing over time as traditional sources of energy become more stretched and demand continues to grow.  And such a reality demands that we act now.

I believe - as does President Bush - that India and the United States will be strong partners in a global effort to increase the world's energy security.  It is time for all nations of the world community to embrace a new paradigm of energy security - one that acknowledges:

  • First, that the current level of energy insecurity in the world poses an unacceptable risk to our economies and security;
  • Second, that the environmental challenges posed by fossil energy use must be confronted directly;
  • Third, that free, open and competitive markets for energy trade and investment are essential to increasing energy security;
  • Fourth, that innovation is critical to solving our energy challenges;
  • And fifth, that the international nature of this problem requires coordinated action on a global scale.

Countries that embrace these ideas will necessarily choose the path of responsible action.  And I would suggest that these nations - like India - will also work with us to advance five major global goals.  I see these goals as cooperative in nature.  In some ways, the U.S. and India are already putting them into practice.  In other areas, we need to do much more.

  1. First, we must diversify the available supply of conventional fuels and expand production.
    Globally, we need expanded supply from existing sources of energy.  But as importantly, we need more producers supplying global and regional markets.  Diversification of supply will help to defuse the risks of supply disruptions from any one source.  If there is anything that I've learned in my two years in this job, it is that we all have to diversify our supplies of energy.

    In my view, this area offers several key opportunities for expanded cooperation.  I would highlight in particular the development of India's domestic oil and natural gas reserves - including off-shore sites - as well as coal-bed methane and, especially, clean coal technologies.  The United States and India share a heavy reliance on coal for electricity generation.  And so I'm extremely pleased that India is a partner in the FutureGEN project.  An international partnership, FutureGEN will work to create a near zero-emissions coal-fired plant that will produce hydrogen and sequester CO2 underground.  The potential benefits for both our economies - and our environment - are clearly significant.

    On this subject, let me also say this: in order to increase global access to conventional fuels, we need stable regulatory frameworks, open investment climates, adherence to the rule of law, and market-based pricing of energy resources.  I would argue that India cannot continue to fuel its economy without heavy investment in energy diversification and infrastructure . . .  and this includes foreign investment.  This is one area where, in my view, we are not living up to the potential of our relationship.

  2. The second goal is related to the first: we must diversify our energy portfolios by expanding the use of alternative and renewable sources.

    Diversification toward alternatives could greatly relieve pressure on markets for conventional sources over time, while also addressing environmental concerns.  There are myriad technologies that we could talk about in this area - from solar and wind energy, to hydrogen and biofuels - but the key is increasing both their availability and cost-competitiveness. This is the core of President Bush's Advanced Energy Initiative, which focuses on accelerating the commercialization of promising technologies.

    A major component of any clean energy strategy must be nuclear power.  And so let me address this issue directly.  I strongly believe - as does President Bush - that the civil nuclear agreement currently under negotiation is good for India, is good for the United States, is good for our mutual energy security, and is good for the global nonproliferation system.

    In my view this should not be viewed as a threat, in any way to India's sovereignty or its nuclear program.  The opposite is true . it is a major opportunity.  In fact, I believe that in this respect, India and the United States need each other, and let me explain why .

    India is a world-class designer, developer and builder of new nuclear technology.  The talent and creativity of your scientific community is unsurpassed.  India's achievements are truly remarkable given that it has pursued these advances independent of the larger international nuclear community.  Therefore, it is clear that the United States has much to learn and much to gain from greater cooperation with India.  And it is clear that the rest of the world will also benefit from India's active engagement in advancing new nuclear technology and on international nonproliferation efforts.

    At the same time, the U.S. is home to the world's most powerful economy, and home to some of the world's most advanced industries.  We too have made great advances in technology, safety and security that can greatly benefit India in this arena.

    But in order for our nations to fully realize the mutual benefits of this relationship, we must continue the negotiations on the civil nuclear agreement and push forward with the necessary next steps.

    Of course, we are already working together on very long-term solutions to energy security as well.  India, the United States, and our international partners - who together represent more than half of the world's population - will soon begin construction on the International Thermonuclear Experimental Reactor, or ITER.  This project seeks to validate fusion's potential to generate electrical power . . . and to obtain the necessary data needed to design and operate a demonstration fusion-based electric generating station.  India brings both financial and scientific resources - and more than 20 years of fusion research - to ITER.  The United States is proud to call India a partner in this global scientific endeavor to unlock a clean and virtually limitless source of energy.

  3. The third goal: we must promote increased energy efficiency and conservation measures.

    The biggest source of immediately available "new" energy is the energy that we waste every day.  I believe that improvements in energy efficiency can be achieved - in relatively short order - on a global scale.  I'm pleased that the U.S. Department of Energy and USAID have been working closely with the Indian government to develop and deploy energy-efficient technologies and practices.  And I make this request directly to the businesspeople in the room today: let's continue look for ways to improve the efficiency of India's industrial and power-generating sectors . . . to not only lessen demand, but also improve the health of our shared environment.

  4. Progress on expanding our use of alternatives and increasing global energy efficiency will move us toward a fourth goal: we must take steps to improve our earth's environment to reduce pollution and the emissions intensity of the global economy.

    The release of the UN's IPCC (Intergovernmental Panel on Climate Change) report last month confirms that human activity is contributing to changes in our earth's climate. There is no question that this is a serious challenge.  And so, the focus must continue to be on developing and deploying solutions that are technically and economically sound.  This is a global issue that requires a global response . . .  and the United States has been and remains committed to doing our part.  Since President Bush took office we have invested approximately $29 billion in international partnerships, climate science and the development of clean energy technologies.  President Bush's "20 in 10" plan could also stop the growth of CO2 emissions from cars, trucks and SUVs within 10 years.

  5. The final goal: we must maintain the global energy supply system and protect critical energy infrastructure to ensure a more resilient, secure and less volatile market.

    Delivering energy resources is as important as gaining access to them - and the governments of the world are uniquely positioned to achieve this goal in a coordinated way.  All nations should take steps to protect and modernize critical energy infrastructure, safeguard sea lanes, and facilitate multiple delivery routes.  And, the world must be prepared to address any severe supply disruption by maintaining adequate strategic reserves and using them in a coordinated fashion.  I'm pleased that India is developing its own strategic crude oil reserve, and I hope that effort will move forward with great urgency.  I also expect that we will continue to work together to coordinate our response in the event of a global crisis.

Agreement on these five goals will define a new community of countries committed to a peaceful, secure and environmentally responsible energy future.  And I sincerely believe that India can and will be a leader among this group.  Together, we should call upon all countries - producing and consuming nations alike - to join us in embracing them without delay.  Nations that dismiss these principles and objectives do so at the expense of the prosperity and security of their own people - and the world's energy security.

Let me just make one final point to all of you:  There is a central theme running through these five goals.  And that is: the absolute necessity of substantial and sustained investment in innovation on a global scale.

In this effort, the role of government is necessary - even critical - but it is not sufficient because the real breakthroughs are likely to happen in the private sector.  The key to unlocking our energy future is ensuring that the innovation cycle continues at a rapid pace.  And to do that, we need everyone involved.  India is remarkably well-positioned to contribute to this massive global challenge, with its extraordinarily talented pool of scientists and engineers and its many strong partnerships with top universities here in India and in the United States.  India's participation in ITER, which I described earlier, is a perfect example of this.

The bottom line is:  It is not enough to stand on the sidelines and wait for someone else to rise to the challenge.  Without sustained global investments in the private sector and policies that support - not discourage - breakthrough technologies, we will not solve this problem.

And we must solve it.  We cannot let energy become a variable, a risk, a question mark in the world's economic and security equation.  The United States and India are two sovereign, proud democracies.  As such, we have a shared interest in fueling even greater economic growth and development for our people.  But we can only do that if we work together to ensure a diverse, clean, reliable and affordable global energy supply.  And I look forward to the results of our partnership.

Thank you.

Location: New Delhi, India

Media contact(s): Anne Womack Kolton, (202) 586-4940

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