I know that both Gene and Sally referred to the very hot day a year ago at the climate announcement at Georgetown. But I think probably they probably forgot to mention that the senior White House staff were the only ones in the shade. Neither he nor us was disappointed with the opportunity.
Even though some of you probably heard me say this before, but since Gene talked about my previous experience, I haven’t tired of repeating the Samuel Johnson line that my return to DOE is like“second marriage, the triumph of hope over experience.” But in fact, I am very hopeful and what we do is the reason that I’m hopeful.
In my statement to Al Kamen last year, I know that Sally was surprised when I was asked who was the Cabinet member I would most like to hang out with, and I said Sally Jewell. But it was not for us to be in a place like the Mayflower Hotel, but it was for us to be in the outdoors that we both love so much.
I want to emphasize two words today in the context of the climate action plan and what we’re doing for climate. And those words are, and they will come up in a number of contexts, ambition and flexibility. And those, I think, are two very important words to use.
I’m not going to talk about the science of climate, that would be preaching to the choir. Although I will say, as Gene mentioned my science background, that I said on my first day that I’m not here to debate what’s not debatable. And that remains our position as we work to engage, in a legitimate discussion, about how, what, when, scope and scale. We don’t all agree on that in this town. But I think that we are making progress, especially because of the commitment of the President to move forward administratively as effectively as we can. Because as he says, we can’t wait, while of course still hoping that we will ultimately have a wider approach that can be more encompassing.
In terms of impacts, I would just note Mother Nature’s irony that if we want to keep putting greenhouse gasses into the air, our energy infrastructure will be at risk. For example, a few weeks ago, I toured the Louisiana Gulf region and you could see tremendous ecosystem challenges that have arisen and are now amplified by warming and rising sea levels, but also how the energy infrastructure, while supplying hydrocarbons, is so at risk. When they have risk in that region, that propagates because of the energy infrastructure throughout the country because of fuel reliability, etcetera. This year, the office of Karen (Wayland) is leading our work on the Quadrennial Energy Review that will be looking this year at all of the energy infrastructure challenges that we will be facing not just today, but in the decades ahead, including the effects of climate change.
Now, going back to ambitious and flexible. Well first of all, as Gene mentioned, in many ways, the piece of the climate action plan that catches the most attention is the EPA rules on power plants and once again, ambitious and flexible, as you’ve all seen. And that’s a very important theme to reach the goals of that CO2 reduction.
Now at the DOE, a major part of our responsibility is to help advance the technologies through a variety of means- standard setting, R&D, demonstration, deployment - to allow aggressive and ambitious goals be met, particularly through cost reduction of low carbon technologies. Clearly the more we can do that, the more we can succeed in that, the more that we will be able to see policy shifts, that will allow timely and aggressive response to climate risk.
One of the things we do, as already mentioned, is set efficiency standards. And we actually have an announcement. Today, we released a new energy efficiency standard covering furnace fans. Just by itself, just this one rule will lead to 34 million metric tons of CO2 avoidance and save $9 billion off electricity bills over the next 15 years.
But, of course with efficiency standards, it’s the cumulative effect of the many, many standards that add up. I think it’s pretty remarkable that a just looking at the efficiency standards for appliances and electronics that this Administration has done, and will do, and we have picked up the pace. Gene said bureaucracy, I think that we have reached a really good partnership with OMB and OIRA. There was a huge back log, we cleaned that out. And it’s really a great partnership. We have a schedule that we are sticking to month by month to work through this.
The cumulative impact of just the rules and standards that we believe we are going to have over this Administration will, over the same cumulative period of 2030, we are talking about 3 gigatons of CO2 and almost half a trillion dollars in energy savings. So you know microwaves, stand-by power, furnace fans somehow they don’t get everybody’s juices flowing but you gotta add them all up. This is a very, very big deal.
A second thing, CAFE Standards another place we were stagnant for so long. Now we have very impressive standards for light duty vehicles, but also for trucks. Once again, our job is to enable companies to reach that. So in fact, just a few weeks ago, I was at the Ford Dearborn test track, just outside Detroit. We had done a lot of work with Ford, including an ATVM loan guarantee that allowed them to more aggressively retool factories to incorporate the technologies for achieving higher efficiency. For example the F-150 is the biggest selling vehicle in the United States. Aluminum will leave the production model seven hundred pounds lighter.
By the way, we are open for business. We have another $16 billion of loan guarantee authority in the vehicles program. We’re out there talking to auto suppliers, let’s get going with the retooling of the new manufacturing capacity for energy efficiency. So there is a lot going on.
Similarly with trucks, we have a Supertruck initiative pushing 60% in energy efficiency. I’ve already sat in the cab of one of those Supertrucks. It’s not going to be the production model next year. But I would say within the next five or six years you are going to see these technologies coming together. And it’s a whole bunch of technologies. Part of it was working with our laboratory system to do the supercomputer model for incredible aerodynamic progress, and the other things like heat recovery within the truck.
So that’s the flavor of the kind of thing we are doing to reinforce the ambitious goals to reduce CO2 emissions, for efficiency gains. But it’s also flexible in the sense that we do support the President’s all-of-the-above strategy. The flexibility is that we start with low carbon solutions, that’s the condition. Then we make the investments across the board for any low carbon fuels, any technologies competitive in the low carbon marketplace. We need the flexibility for different regions in our country and different countries in the world to choose a low carbon solution most appropriate to that area.
So that certainly includes renewables, Sally mentioned projects moving forward on public lands. I’ll just say that in the U.S. for example, wind has now passed 4% of electricity production, not capacity, production. That’s now that’s a real contribution. That’s in the game in a serious way. And of course you also know that solar is going up extremely rapidly. We’ve met up about 6 gigawatts this year or so. And of course, the story there is cost reduction. And the same story goes for LEDs, a factor of 10 in the reduction in cost in just a few years. And now we are over 40 million fixtures and it is literally going up exponentially.
Just recently now, I’ll mention in my travelogue, being in Detroit. They are one of the major cities now moving to outdoor lighting using LEDs, saving them a lot of money. It’s interesting so many spillover affects help us with low carbon technologies. Law enforcement is completely behind the LED emergence for reasons of public safety.
I just mentioned again in terms of utilities scale, let’s say PV, in what’s already out there. But, there our Loan Guarantee Program back in 2009, when debt financing wasn’t available, we got the first five projects rolling, they’re all going great, And since then we’re talking like ten more right now under construction, completely private funded. So that’s the kind of thing that we need to do to help make that market, give it a push, and then have the private sector take over.
I’m just going to end with a few words on international engagement. In fact, let me say, moving into international engagement, which is obviously crucial for our climate goals. In fact, this next year, is an absolutely critical period on the road to Paris. I’ll come back to that.
Let me also note that last week, we published a report, the Water Energy Nexus Report. That’s an area that will require lots of multiagency collaboration, the Department of Interior being among those. But let me say that this is an area of great interest in terms of climate, but also one, for that reason actually, which has incredible resonance internationally. Every time we mention the energy-water nexus, countries from just about every continent say we would love to collaborate on that. They’re all very concerned. And in fact, at the Clean Energy Ministerial, with over 20 countries that we co-hosted in Korea recently, that became a new work stream for those countries around the energy-water nexus.
Again, ambitious and flexible become critical. You’ve heard Todd Stern talk about that. That’s the approach we need to do heading to Paris. But we have a lot of work to do before Paris, including the week after next, the Strategic and Economic Dialogue in Beijing with Secretaries Kerry and Lew who lead that for the United States. We will be there because of the major energy and climate focus. And, again, this is a very active discussion with China and you all know the importance of China. I just want to emphasize again, that ambition and flexibility will be key guidelines for our dialogues.
And with that, I was hoping to leave some time for questions. Again, thank you for helping get across all of these important messages.