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Remarks as Prepared for Secretary Bodman

Thank you.  It's a pleasure to be back speaking to the members of British-American Business.  I want to thank Peter Hunt for convening this event and for inviting me to be a part of it.

I'm winding up a trip that began in Rome at the World Energy Conference where I and six of my fellow Energy Ministers from around the world shared our views on how to increase the world's energy security.

Then I traveled to Turkmenistan to meet the new President and senior leaders in his government.  As you may know, Turkmenistan has vast oil and gas resources and has the potential to be a significant new supplier for Europe if new export routes can be constructed and new investment made.

My team and I then traveled to Turkey, a country that is a very important energy transit country and has the potential to expand that role as new pipelines extend from East to West to supply Europe with Caspian resources.  Then we ventured west to the border between Turkey and Greece for the ceremonial opening of the first independent pipeline to send Azeri and potentially other Caspian gas to Europe.

At all of my stops I have told these foreign governments that we need to embark on a new era of global cooperation that drives a global diversification of energy supplies, suppliers, supply routes.  I will do the same when I meet with the British government later today.  And now I am here to meet with you to discuss pressing energy security issues and also climate change.

Why do I say pressing?  It's not just because we are experiencing record oil prices.  It is because energy security is inextricably intertwined with a nation's economic and national security.

The bottom line is this: the world needs a safe, reliable, clean, affordable, and diverse energy supply.  This is a global challenge, perhaps one of the most significant of our time.  And, as if we needed more evidence of its scope, the IEA's World Energy Outlook released this month provides it.  It estimates that the world's energy needs will grow by 55% by 2030, with fossil fuels remaining the dominant source of energy.

We know that addressing this challenge in a timely way will require at least $22 trillion between now and 2030 to meet expected demand.  I think the biggest energy challenge we face is the prospect that sufficient investment will not happen.  Is the investment climate in producing countries conducive to inviting such capital flows?  It is the above ground risks more than anything else that are growing and constraining the expansion of supply.

At the same time, we must recognize the realities of global climate change and develop cleaner sources of energy that at the very least do not worsen and hopefully can improve the health of our earth's environment.  And finally, we must continue to look for ways to enhance energy efficiency throughout our economies.

This set of global challenges demands responsible action both from consuming nations and producing nations.  I don't want to sound too alarmist, but in some ways, what we are really talking about is reducing the world's energy insecurity.  And it takes global action.

I would also add that any global energy strategy must include efforts to expand access to emissions-free nuclear power in a way that responsibly manages waste and dramatically reduces proliferation risks.  This is an issue my country and my President feel strongly about and we are expending tremendous effort and resources to realize a nuclear renaissance in the U.S.

Increased nuclear energy in our energy mix will address the twin challenge of energy security and climate change. Nuclear energy has been a significant source of power for the U.K. and we hope that will continue in the future.   I understand the UK is currently in a consultative period on the future of nuclear power for this country.  I hope it will conclude positively.

So what are we doing about climate change?

Since 2001, the U.S. has spent $37 billion on climate change science and clean energy technology, more than any other country in the world.

Our $13 billion investment in climate change science has increased our understanding of the climate system and the influence of human activities on it and to assess the impacts of climate change on the environment.  The U.S. Department of Energy owns five of the world's six fastest computers which, among other things, are being put to use running complex climate modeling exercises that allow us to better predict the consequences of climate change.  And our investments in science have provided us with a greater understanding and ability to more effectively design and execute our policy, regulatory and fiscal responses to climate change.

At the same time the US is investing in the solution.  The U.S. has implemented a broad portfolio of policies, programs and incentives that are directed at hastening the market penetration of more efficient energy technologies and alternate fuels.  We are investing in the long term technology solutions while at the same time leveraging the power of the market to further deploy commercially viable technologies now.  The U.S. has invested nearly $18 billion since 2001 on climate change technology research and development.

As result of these investments, today we have a much better idea of what technologies will be needed, when and to what effect. Our analysis also shows that advanced technologies can substantially reduce the cost of meeting any stabilization goal 60 percent or more. Technology advances will reduce the timeline and cost of mitigation and stabilization. Our 2005 energy law authorizes almost $12 billion annually for market-based incentives and tax credits and establishes new financial programs like loan guarantees and risk insurance to accelerate the market penetration of clean energy technologies.

Through our climate change technology programs, we are challenging our scientists and engineers to accelerate breakthroughs in low-emission solar and wind energy, biofuels, hydrogen, advanced batteries, buildings, grid technologies, nuclear power, fusion energy, and other technologies that have the potential to fundamentally transform the way we produce and consume energy.  We have placed a high priority on clean coal research and solving the challenge of carbon capture and storage.

More recent initiatives include the President's "Twenty in Ten" plan to reduce projected gasoline consumption by 20 percent in ten years through a combination of increased vehicle efficiency and use of alternative fuels which will improve our energy security and reduce greenhouse gas emissions. This aggressive initiative mandates the use of the equivalent of 35 billion gallons of alternative and renewable fuels by 2017.

As part of the President's plan we are making cost-shared investments in three cutting edge Bioenergy Research Centers, on the order of $375 million over five years, as well as a series of small and large-scale biorefinery projects focused on producing ethanol from a wide variety of non-food plant materials. The investment we are making bio-centers is high risk, but we expect they will show us the way to overcome the barriers keeping us from developing wide-scale, cost-effective biofuels from cellulose.

The United States has developed a comprehensive strategy on climate change that is informed by science, emphasizes innovation and technological solutions, and promotes international collaboration.

It is incumbent on all nations serious about climate change to focus on the solutions instead of focusing on continuing to redefine the problem.  That takes action, commitment, and investing in the solutions.  It must be now and it must be a shared effort on the part of all countries around the world.

We need solutions that are internationally accepted, and that means market based options and free trade.  The way to respond to problems in the global marketplace is not to impose tariffs, and create divisive trade wars, but to create a rules based framework that all countries must abide by, including those in the developing world. We must work with China, India and countries here in Europe to be responsible partners, developing and deploying technology that delivers affordable and cleaner energy as well as finding ways to save the existing energy we waste everyday.

This is not going to be a sole venture for governments every effort will depend on innovation and the entrepreneurship of the private sector.  There are plenty of opportunities for businesses, at all levels; to be a part of the solutions to these challenges.

Whether through the development of new technology, the improvement of existing energy related products, or the investment in alternative sources of renewable energy the table is set for market driven solutions and I encourage you to continue that discussion.

The key to securing our energy future and addressing the climate change challenges is to ensure that the innovation cycle continues at a rapid pace.  We must leverage the tremendous power of private equity, while also making smart public funding and regulatory decisions, to unleash the world's best scientists and engineers on this problem.  Without sustained global investment, without a new global commitment, that will support not discourage new sources of energy and breakthrough technologies, we will not solve this problem.

And we must solve it.  The world has united around issues of common cause before.  And I would argue that there are few more compelling global concerns today than the need for a safe, affordable and clean energy supply.

Thank you.

Location: London, England

Media contact(s): Andy Beck, (202) 586-4940