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U.S. Deputy Secretary of Energy Daniel Poneman
Remarks As Prepared for Delivery at TERI
Monday, July 18, 2011
New Delhi, India
Good morning. Thank you, Mr. Desai for the introduction. And thank you to TERI for hosting me this afternoon.
I want to acknowledge the leadership TERI is already showing in advancing energy research and in fostering a constructive dialogue on issues that are critical to the people of India and to the world. We are grateful for your commitment and dedication, and for the work that you do every day.
Before I begin my remarks today, I want to take a moment on behalf of the American people to offer our profound condolences to the victims of the terrorist attacks in Mumbai last week. We are all of us one world and one people and we will stand by the Indian people in these times of trial.
Our two nations – the world’s two largest democracies – have a long and distinguished history. We share broad and deep ties of culture and friendship that bind us together on issues ranging from economic growth to regional security to energy transformation. These ties are increasingly reinforced by ties of growing mutual interest.
I have been following relations between the United States and India for 35 years. There have certainly been challenging times and challenging issues we have faced during that time. I am gratified to say, though, that in all the years I have been watching this relationship, I have never seen a moment of greater promise and greater convergence of interests.
We are two nations, both of which are committed to sustainable development, both of which are committed to assuring a clean and prosperous future for all of our people. And we both face many of the same challenges to developing our energy future.
For example, both the United States and India rely heavily on fossil fuels, such as coal, to power our economies. When it comes to greenhouse gas emissions, coal is a very problematic energy resource, but there are opportunities where we can work together to develop new clean coal technologies.
There are also tremendous opportunities in terms of infrastructure yet to be built here in India. In some respects, the United States is an older country with a larger stock of existing buildings. So when we talk about energy efficiency, our efforts are often focused on building retrofits.
A striking fact that I first heard from Dr. Ahluwalia is that over the next 20 years, India’s population is expected to grow by nearly 300 million people. That is like adding a brand new country with a population nearly the size of the United States today. This will require new, broad infrastructure investments, and I think you’ll find that it’s much easier to build clean and smart the first time than having to retrofit later.
This offers a great opportunity, but also a great responsibility, to build a new low-carbon future for our children.
It’s critical to recognize that this clean energy future is not a ze ro sum game. It is possible to develop new, clean forms of energy that help reduce our carbon footprint while increasing our prosperity.
As President Obama has said time and again, “The countries that lead the clean energy revolution will lead the world.”
This doesn’t pit nation against nation, but rather is a challenge between the past and the future. As students at an institution like TERI, I know that you all are part of this revolution, part of this broader ambition, part of the open aspirations of all people to build a cleaner, prosperous future.
The clean energy revolution will offer the opportunity to expand markets, to create new industries and new jobs in the clean energy sector, to enhance our security, and to combat the worst effects of climate change.
We are already seeing tremendous growth in this industry. According to a recent analysis by Bloomberg New Energy Finance, last year investors pumped a record $211 billion into renewable energy worldwide -- a 540 percent rise since 2004.
This is not a national phenomenon, but rather a global phenomenon. In fact, governments, industries, and entrepreneurs around the world – from Asia to Europe, the Americas to the Middle East –are moving aggressively to invest in clean energy technologies that can meet this growing demand.
That means that in order to maintain our leadership – both of us, individually and collectively – in a global economy, we must invest in clean energy innovation and development.
The U.S. is Working to Build a Clean Energy Future
President Obama has recognized both the responsibility and the opportunity before us, which is why he acted swiftly once in office, taking bold steps to advance clean energy in the United States.
This included $90 billion of clean energy investments under the Recovery Act to lay the foundation for our low-carbon future.
It included a strong emphasis on energy efficiency. As Secretary Chu likes to say, energy efficiency is not just low-hanging fruit, it’s fruit that is lying on the ground.
It included a commitment to double the amount of electricity Americans obtain from clean energy sources – from 40 percent to 80 percent of our power generation.
It included new efforts to modernize the electrical grid, as well as a commitment to develop advanced vehicle technologies that reduce our dependence on oil. And it included a deep commitment to pursue cutting-edge breakthroughs in science and technology.
Together, these steps will provide the framework for growing America’s green economy in the years ahead, so I want to take a few minutes to go through each of these in a little more detail.
U.S. Energy Efficiency Efforts
For the next few decades, we believe energy efficiency and conservation present many of our best opportunities to create jobs, save consumers and businesses money, and cut carbon pollution.
These energy efficiency opportunities apply across nearly every sector of the economy. They can help reduce the energy we need to power our homes, our businesses, our factories, and our vehicles. For example, buildings alone account for 40 percent of America’s energy use and greenhouse gas emissions.
As part of this effort, the United States is pursuing a wide range of energy efficiency technologies, including efficient building systems, appliances, vehicles, and industrial equipment, as well as building codes, financing tools, standards, and policy incentives that can promote investments in efficiency.
Our government at the federal level is also working closely with cities, states, and local governments to provide support and guidance as they develop their own efficiency programs and local building codes.
One of the most effective tools that we have to achieve economy-wide improvements in energy efficiency – especially in the absence of comprehensive climate legislation in the U.S. – is the implementation of appliance efficiency standards.
Appliance standards lay out ground rules for manufacturers who sell products in the U.S. They set minimum efficiency levels for different product types, removing the worst performing products from the market.
Time and again, we have seen these standards spur innovation in the marketplace – encouraging manufacturers to develop new products and new techniques that deliver energy savings at lower costs for the consumer. This is an example of what my mother called “doing good and doing well,” because as production costs fall, businesses do better, too.
And at the same time, families and businesses pay less every month on their energy bills, which cycles money back into the broader economy.
This really is a win-win-win for the manufacturer, the consumer, and the environment. Together that adds up to a big win for all of us.
In vehicles as well, efficiency standards are helping to reduce the amount of oil and gasoline we use, saving consumers money and strengthening America’s energy security.
For example, as a result of the historic fuel efficiency standards President Obama helped negotiate, passenger vehicles sold in the U.S. will be required to get 35.5 miles per gallon – that’s about 15 kilometers per liter. And as a result of just these standards, we will be able to save approximately 1.8 billion barrels of oil over the next five years.
U.S. Clean Energy Efforts
While efficiency is important, it’s only one part of the equation. On the supply side as well, we must develop and deploy clean sources of energy.
We are pursuing new ways to harness energy from the sun, the wind, and the soil. With support from the federal government, projects to supply communities with clean, renewable energy are being launched in every corner of our country.
In fact, through the Recovery Act, we are supporting thousands of new renewable energy projects. For example, through our renewable energy tax grant program, the U.S. government has already helped to support more than 15,000 projects. Together, these projects are providing enough electricity to power 3 million American homes.
The Department is also offering financing to support major renewable energy construction projects through our loan guarantee program. To date, we have supported more than 20 large-scale renewable energy projects that will generate enough electricity to power 1.2 million American homes and avoid carbon emissions equivalent to taking 1.5 million vehicles off the road each year.
Recognizing that coal is likely to comprise a major source of electricity generation for the foreseeable future, Secretary Chu has challenged us to advance carbon capture and storage technology to the point where widespread, affordable deployment is possible within 10 years. This is a big challenge, but one that we believe is achievable.
Another area that has been a real game-changer in the United States is shale gas. This is an area where the U.S. Department of Energy invested $169 million – a fairly modest amount, as these things go. These investments in the late 1970s and early 1980s facilitated the dramatic rise in shale gas development.
But our focus now must be on assuring that these resources can be accessed in a safe, environmentally responsible way that maintains public confidence in the technology. To advance the responsible development of this resource, President Obama asked Secretary Chu to work with states, environmentalists, industry, and other federal agencies to review safety protocols and best practices for shale gas development.
We are also working to restart America’s domestic nuclear industry with a new generation of safe, clean nuclear power plants that can deliver electricity without increasing carbon emissions. As part of this effort, we have offered $8 billion in loan guarantees to the first nuclear power plant to be built in the United States in more than 30 years.
But here too – as with other forms of energy – we can only pursue an expansion in nuclear energy if we do it safely. In the wake of the nuclear accident at the Fukushima Daiichi Plant in Japan, President Obama asked the Nuclear Regulatory Commission to conduct a comprehensive review of all 104 of America’s nuclear power reactors and develop important lessons learned for nuclear safety.
And internationally, President Obama has called for a new international framework for civil nuclear cooperation, so that countries can access the peaceful benefits of nuclear energy while minimizing the risk of the spread of nuclear weapons. This is part of his larger vision of a world without nuclear weapons.
Each of these efforts – from clean coal to nuclear, renewables to natural gas – will play an important role in helping the country to reach President Obama’s bold but achievable goal of doubling U.S. electricity from clean energy sources by 2035.
Now, as we look to integrate this new suite of electricity resources, we must make sure we have the infrastructure to handle this transition. In the United States, we have an older electricity system, so we have a lot to do – from upgrading the meters to installing better sensors and grid monitoring devices, and in some cases, to expanding transmission capacity.
A smart, modernized grid will improve the reliability of the electricity system, empower consumers to save money, and enable the increased integration of renewable energy resources.
Under the Recovery Act, the U.S. government has invested nearly $11 billion to begin upgrading the nation’s electrical grid and to begin implementing smart grid technologies nationwide.
Finally, we are working to transform our transportation sector to cut our excessive dependence on oil and revitalize our auto manufacturing industry.
With approximately $12 billion invested in advanced vehicle technologies, the Department of Energy is helping to make our transportation system more efficient – developing plug-in hybrids and all-electric vehicles and deploying new, clean biofuels.
Earlier this month, the Department announced that we would be supporting the development of America’s first commercial-scale cellulosic ethanol plant in Iowa – we call it Project LIBERTY. This pioneering project will generate 200 jobs during construction. Once operational, it will produce up to 25 million gallons of next-generation ethanol each year, made from corncobs, leaves and husks provided by local farmers.
Science and Technology
Both the United States and India have many technologies in hand today to begin a transition to a low-carbon economy. But, over the long-term, we will need breakthroughs and better technologies, and we are going to need to find new ways to work together to achieve the necessary reductions in greenhouse gas emissions.
Under Secretary Chu’s leadership, we have put science and technology at the core of our mission. From solving the deepest mysteries of basic science, to bringing together groups of researchers in order to tackle some of our greatest challenges, to looking across the private sector for transformative energy technologies, the Department is pursuing a broad-based clean energy research strategy to achieve energy breakthroughs.
Opportunities for Cooperation
What has become clear to me in our deepening cooperation with India is that all of you here also understand the urgent need to transition to a clean energy future. As it looks to meet its own increased energy demands, the people I’ve worked with here in India understand that clean energy resources and energy efficiency hold the key to the future wealth and prosperity of the nation.
The tremendous growth India will experience over the next generation provides the people of this great nation with a unique opportunity to shape the future for their children and their children’s children.
If India chooses the clean energy path, the country has the potential to leapfrog past developed countries and today’s energy framework to establish a cleaner, more sustainable, more efficient, energy infrastructure for the future.
As the two of the world’s largest economies, the United States and India have a special role to play in solving the energy and climate challenge. By bringing our best minds together and putting the full force of our vast technological and scientific capabilities to bear on this problem, we can gear up innovation to find the answers we need.
There is no question in my mind that we can do more together than either of us can do alone.
That is why the leadership President Obama and Prime Minister Singh have shown – setting a high bar for cooperation for all of us – is so important. Last year, they joined together to launch the Partnership to Advance Clean Energy – or PACE – a whole-of-government effort intended to accelerate clean energy research, development, and deployment.
The overarching objective of the PACE initiative is to accelerate the transition to high performing, low emissions and energy-secure economies. The program includes both research and development collaboration, along with deployment, investment, and financing initiatives.
In addition to work by the Department of Energy, the PACE program relies on the commitment and dedication of numerous agencies and ministries in both countries. We are grateful for their continued support and participation.
Under the PACE initiative, the Department of Energy is joining with the Indian Planning Commission to launch a $100 million U.S.-India Joint Clean Energy Research and Development Center, including $25 million from the Department of Energy. The Center will bring together consortia of U.S. and Indian scientists and engineers to research breakthrough technologies in building efficiency; second-generation biofuels; and solar energy.
This represents the most integrated joint clean energy undertaking we have done with any country, ever, including the Department’s first-ever joint funding solicitation with a foreign government. Applications are due by mid-August, and we expect to announce selections in November.
It is also important to note that the United States and India have been cooperating on a range of nuclear energy and nuclear security issues.
Both of our countries understand the real threat posed by nuclear terrorism. In April 2010, Prime Minister Singh came to Washington, D.C. to join President Obama and other world leaders at the Nuclear Security Summit. We were gratified by his commitment to launch a Global Center for Nuclear Energy Partnership to protect against the threat of nuclear terrorism. We look forward to continuing to work with our Indian counterparts to advance this important goal.
India also plans to significantly increase nuclear energy’s share within the country’s overall energy portfolio. The country has signed agreements with numerous nuclear supplier countries, including the U.S., to reach this goal. We are consulting closely with the Indian government on the other remaining steps required for both our countries to realize the full benefits of civil nuclear cooperation.
And in particular, as India takes steps this year to ratify the Convention on Supplementary Compensation – or the CSC, we encourage our Indian partners to engage with the International Atomic Energy Agency to ensure that its liability regime conforms fully with the requirements of the CSC.
By strengthening our clean energy partnership, we can bring new technologies to market and grow demand for clean energy technologies -- creating new export opportunities for our companies and promoting economic growth in both the United States and India.
As we partner with India bilaterally on key initiatives, we also appreciate the strong role the country is playing in the international arena. India’s leadership role in the Clean Energy Ministerial and their active participation has given great momentum to global clean energy cooperation.
India has agreed to host the 4th Clean Energy Ministerial in 2013 – a major undertaking that we very much appreciate. India is a key participant in Ministerial initiatives for global market transformation in a wide range of areas such as appliance efficiency, buildings and industrial efficiency, and smart grid technologies.
In energy efficiency alone, there is tremendous potential for India to achieve dramatic energy savings that will reduce costs, avoid the need for additional energy generation, and help to grow the economy.
According to a recent analysis by DOE’s Lawrence Berkeley National Lab, implementing cost-effective energy efficiency measures in the country could achieve a 10 percent reduction in energy use in the country, saving enough energy to power more than 20 million urban Indian homes. In addition, the study estimates that these efficiency investments would increase India’s GDP by a cumulative $500 billion over eight years through a combination of consumer savings and new economic activity.
We’ve come a long way, but there is more work ahead of us as we seek to build a clean, sustainable and prosperous future for ourselves, our children, and our children’s children.
Our partners in the private sector have an indispensable role to play in this transformation, as it is ultimately the private industry that will drive this revolution and bring it to scale. So we need to keep working with companies from both of our countries to continue to drive investments, spur innovation, manufacture new technologies, and provide the markets for our clean energy future.
As we move forward together, we will continue to expand our cooperation to promote a secure and stable world, to advance technology and innovation, to expand mutual prosperity and global economic growth, to support sustainable development, and to lead the global community in achieving a clean energy future.
This is the challenge of a generation. This is our time and our drama. And in that drama, together, India and the United States can prevail and lead the way to a cleaner, more prosperous future for all.
Thank you, and now I’m happy to take a few questions.