Good morning. It’s good to be with you.

In these times of price spikes, global uncertainty and conflicting opinions on the state of the world’s oil reserves, the country needs your collective expertise to help develop a long-term strategy to insure America’s energy security and economic prosperity and to meet the challenges posed by developing economies…particularly those in Asia.

Many of you are new to the Council. I want to extend a special welcome to you and I want to thank those of you who have agreed to serve for another term on the Council.

I’d like to talk with you briefly about the future of U.S. energy supply and security. The American people are concerned, and rightfully so, about recent and rapid increases in the price of gasoline. They are looking to us for leadership and the President is providing it through his recently announced Advanced Energy and American Competitiveness Initiatives. They are also looking to us to maintain a secure supply of affordable energy, something I hope the National Petroleum Council’s forthcoming Global Oil and Natural Gas Study will help us do.

Last October I asked you to conduct a study on global oil and natural gas supplies. At that time I asked you to provide a perspective on the future of supply and whether incremental oil supply can be brought on-line, on-time and at a reasonable price to meet future demand without jeopardizing economic growth. I also asked you to recommend oil supply and demand-side strategies that the United States could pursue to ensure greater economic stability and prosperity.

These are weighty issues. Beyond the temporary disruptions in supply and demand is a real shift in the dynamic between the developed economies of the West and Japan and the oil-producing world. The Wall Street Journal dealt with this issue in some detail on its front page last week, a story I suspect many of you read with interest.

In sum, the Journal concluded that top crude producing nations realize they now have more leverage over consumer nations for two reasons: the accelerating industrialization of developing economies like China and India has turned them into reliable customers; and, because they are quote… "keeping a tighter grip in their spigots".

Over the past year, I’ve traveled to the Middle East, Russia and Central Asia and have had the chance to see and hear firsthand how the rest of world sees the supply/demand equation worldwide and where we are headed. In Washington, I’ve met with the Energy Ministers from Canada and Mexico, our two largest suppliers of crude oil, and with Saudi Oil Minister Ali Al-Naimi, Qatari Energy Minister Abdullah Bin Hamad al-Attiyah and Nigerian Oil Minister and OPEC President Edmund Daukoru, among others.

In April, I traveled to Doha in Qatar for the annual International Energy Forum where I had the opportunity to conduct bilateral meetings with my counterparts from Saudi Arabia, Algeria, Kuwait, the United Arab Emirates, Qatar and Nigeria. In March I traveled to the G-8 Energy Ministers meeting in Moscow and made stops along the way in Pakistan, Kazakhstan and Hungary.

The common theme in all our discussion was the challenges we face due to increased demand for crude oil worldwide. As I said, these are weighty issues and the finding of your study on global oil and natural gas has important implications.

And, as you may know, the President has asked me to go to Iraq, where I will meet with the Iraqi oil and electricity ministers to discuss ways Washington can provide additional support to the Iraqi government to increase oil and electricity supplies. The President has pledged the combined resources of the U.S. government to facilitate a stable oil production environment.

I’ve had and expect to continue to have many opportunities for dialogue with government officials in all of the relevant spots around the world. The study you are in the process of pulling together will, I hope, provide those of us who make and implement policy with a clearer understanding of the challenges presented by increased global demand for crude oil and the strategies we should consider for meeting these challenges head on.

As part of the effort to insure the collection and availability of reliable data on global oil production, demand and inventories, the United States is encouraging the free flow of information through endeavors such as the Joint Oil Data Initiative, or JODI -- a major effort of the International Energy Forum Secretariat to promote greater transparency and integrity of hydrocarbon data.

During my visit last November to Saudi Arabia I participated in the launch of a JODI database in Riyadh. The U.S. is one of nearly 100 countries participating in JODI to increase the availability of reliable data.

Ninety percent of the world’s untapped conventional oil reserves are controlled by governments or state-owned oil companies, many of which are in politically unstable regions of the world. If, as some have suggested, the West is running out of sources of easy-to-pump crude, we must begin to plan now for ways to deal with this eventuality. And, even if we are not, the planning process is still worthwhile because it will help us identify ways to increase U.S. energy security.

Either way, we must identify competitive, affordable alternative sources of power for our homes, our businesses and our vehicles that will allow us to extend the existing supply of easy-to-obtain oil that much further.

To further enhance U.S. energy security the President, in his most recent State of the Union address, announced the creation of the Advanced Energy Initiative to significantly increase our national investment in alternative fuel and clean energy technologies. In its first year, the AEI calls for a 22 percent increase in funding for these vital efforts. This is in addition to the $10 billion that this Administration has already devoted to clean energy research since 2001.

Specifically, we will accelerate our research into technologies that hold great potential for ultra-clean and secure energy options such as commercially competitive cellulosic ethanol, advanced hybrid vehicle technologies, hydrogen fuel cells, solar and wind energy and cutting-edge technologies to burn coal for electricity production with near-zero emissions.

Over time, we expect this basic and applied research to fundamentally transform the way we producer and use energy in this country and to reduce our dependence on foreign energy sources.

As a complement to that, the President has also put forward the American Competitiveness Initiative to significantly increase federal funding for basic science research, particularly in the physical sciences.

As part of the ACI, the President has committed to doubling the federal government’s budget for basic science programs over the next ten years, including an increase of a half a billion dollars next year for the Department of Energy’s Office of Science as well as additional funding for the National Science Foundation and the Department of Commerce’s National Institute on Standards and Technology.

The ACI also contemplates an increase of $380 million to improve the quality of math, science and technical education. It is important, if we are to remain the leader of the global economy, for the United States to reinvest in the education of the next generation of scientists, engineers and researchers to whom we will look to produce the technology breakthroughs upon which the AEI depends.

It is important that we get support, particularly for the Competitiveness Initiative, at the CEO level. Robert Stevens, the chairman, president and CEO of Lockheed Martin addressed the need for the ACI quite well when he wrote, "Individual business leaders must do their part. Most Americans would probably be surprised to learn that more S&P 500 CEO’s got degrees in engineering than any other field. The more executives, university administrators and academics who shine the spotlight on the stakes of the tech challenge, the more we can galvanize action to meet it."

The challenges before us are daunting but there is no reason that America will not meet them successfully… as we have done now for 230 years. I want to thank you for your service on the N.P.C., I want to thank you for your attention today, and I want to thank you for your willingness to assist us in meeting America’s future energy needs.

Location:
Willard Intercontinental Hotel - Washington, DC

Media contact(s):
Craig Stevens, (202) 586-4940