Thank you, Lee, for your kind words of introduction.  It's hard to believe a year has gone by since our last meeting. 

I know this is your final meeting as chairman so I want to publically thank you for the fine work the Council has done under your leadership.  You've made an impact and helped prepare America to face a new energy reality.

I also want to acknowledge Claiborne Deming of Murphy Oil, the National Petroleum Council's incoming chairman.  Thank you, sir, for your willingness to serve.

And I want to thank Marshall for helping to make the Council function effectively.  As I have said before, I appreciate your work.  I see a number of familiar faces here.  It's good to see you again.  I also want to welcome the Council's newly-appointed members who, I am sure, will serve with distinction.

The last time I was here you presented me with a report providing the Council's comprehensive view of the future of global oil and gas to 2030 in the context of the global energy system, with related policy recommendations. 

At the time I said many positive things about it, but did not go so far as to endorse it. 

This was because I had only just received it and - unusual, I know, for a Washington policymaker - I wanted to read it first.

Well, I did read it, and I agree with it.

It is notable not just for its depth of analysis and diversity of participants but for its comprehensive look across industries and across technologies as well as for its proposed solutions which include increased efficiency and the advancement of biofuels and acknowledge the need for a global approach to reducing carbon emissions.

Your recommendations are a good benchmark against which U.S. energy policy developments can be measured.  Likewise, they highlight the need to develop a national consensus on energy priorities that has been hard to achieve, especially with regard to the development of domestic energy resources.

Over the last year I have personally sent copies of the "Hard Truths" report to every member of Congress, every governor, my Cabinet colleagues and my energy colleagues overseas. 

It's an impressive piece of work that adds to our understanding of the global energy future over the next 22 years.  And in terms of world history, 22 years might as well be tomorrow.  In my judgment we have reached a point when the old paradigm is being replaced by a new energy reality. 

Consider the following points:

Fundamentally tight market conditions have caused dramatic increases in the price of oil; a slowing of energy demand in OECD countries has prompted OPEC to call for members states to hold production to 2007 quota levels; a consensus now exists among industrialized nations -- in evidence at the last G-8 Summit -- that effective carbon management as relates to climate change is needed; and, we continually identify new energy risks posed by regional conflicts, acts of sabotage and resource nationalism.

These events, some of which have occurred since your report was issued, come on top of the trends identified in your report. 

We must - as it suggests - diversify our energy supplies, our energy suppliers and our energy supply routes.  This will take investment, education, effort and, above all else, time. 

And there is a degree of urgency involved.  For no matter how fast we may wish to move, there are obstacles to overcome.

World energy demand is only going to grow; according to some estimates by 50 percent by 2030.  To meet that demand require major changes and trillions of dollars in annual investment over decades - $22  trillion in all according to the IEA - around the world, at all stages of the energy cycle. 

Even in the best of circumstances you could not raise that much overnight. 

To increase confidence that it can be raised, we must take steps to insure the global investment climate is such that the necessary capital can be found.  This means we need better information and more transparency.  We're pushing this through our support for the Joint Oil Database Initiative.  But increased transparency alone is not enough.  

We must accelerate the rate of global progress concerning law and economics and property rights.

It is important that investors - both institutional and individual - be confident their investments will be protected after they have been made, rather than confiscated or nationalized.

Time is not our friend.  We cannot open up new areas to drilling tomorrow and see producing wells in operation in 30 days.  As you know better than anyone, it takes time to study the geology and to test and to make decisions about the productive potential of a particular parcel of land.

It takes time to create the physical infrastructure needed to begin operations.  This is why we must, as President Bush has called on Congress to do, open up additional areas in and around the United States to oil and natural gas exploration.  To begin, Congress should follow the President's lead and lift the ban on drilling on the Outer Continental Shelf. 

America is the second largest natural gas producer in the world and the third largest oil producer.  Our industries have pioneered the technologies used in environmentally-responsible drilling.  In my judgment, we can produce oil and gas and protect the environment.  We do not have to choose one or the other. 

It also reminds us that we must raise the nation's level of energy literacy. 

We must move beyond - your report does much in this regard - conventional understandings of energy to a point where the American people better understand what is involved in energy production and consumption.

It is up to us to convince the country and the world of the significance of the challenges and of the realities of the solutions.  One way to do that is by showing examples of our success. 

I believe this Administration has made considerable progress in these areas. I like to say the most abundant source of new energy readily available to us is that which we waste everyday through inefficiency. 

By signing the Energy Independence and Security Act into law, President Bush has set this nation on a course to achieve fuel economy standards of 35 miles per gallon by 2020; an increase of 40 percent that will save billions of gallons of fuel and, again, substantially reduce greenhouse gas emissions.

The greatest opportunity for efficiency gains is in the utility sector. 

A fundamental premise of our approach is that efficiency does not need to come at the expense of profitability.  That's why we're working to expand and accelerate support for the National Action Plan for Energy Efficiency, which recommends a comprehensive set of energy efficiency measures that could save $20 billion annually on consumers' energy bills. 

We're also focusing on our utilities' biggest customers: the industrial plants and manufacturing facilities which are critical to our nation's economic competitiveness.  We've even partnered with Disney on a campaign to encourage kids to turn their electronic toys and computers off when they are not using them. 

We are also mindful that the federal government is the nation's largest energy consumer.  As such, we feel a special responsibility to lead by example through smart and efficient energy management. 

President Bush issued an Executive Order last year directing all federal agencies to cut their energy consumption by 30 percent.  I committed the Energy Department to meet or exceed his mandate through our Transformational Energy Action Management, or TEAM Initiative. 

Through TEAM we expect to realize at least a 20 percent reduction in energy intensity and ensure that new on-site renewable generation accounts for four percent of our electricity production.  Renewable energy plays a big part in our effort.  Just last week I cut the ribbon on a new photovoltaic solar array located on the Department of Energy's roof, one of the largest of its kind in the Washington, D.C. area.

Our investment now in solar power will pay significant dividends over time in the larger energy and environmental picture.  Many of our efforts, including President Bush's Solar America Initiative, are focused on getting solar costs down.  And I think we've seen some success here.  Over the last seven years, installed photovoltaic capacity in the U.S. has grown at a rate of 30 percent per year.

With regard to wind, for the last three years in a row, U.S. wind power generation capacity has experienced the fastest growth in the world.  This is a trend we are proud of and we intend to continue supporting it.

And, in an area I am particularly excited about, the United States has invested well over $1 billion to spur the growth of a robust, sustainable biofuels industry.  Our investments advance our national goal of making cellulosic biofuels cost-competitive with corn ethanol by 2012, and reducing America's gasoline consumption by 20 percent within a decade. 

This has the potential to lower greenhouse gas emissions at the tailpipe by up to 85 percent and thereby significantly reduce carbon emissions from our transportation sector.

We are also working to make it possible to use more coal, mindful of our concerns about climate change.  We founded the Carbon Sequestration Leadership Forum to promote carbon sequestration and storage around the world and are supporting large-scale storage projects in Canada, Algeria and Norway in an attempt to leverage the CSS research. 

We started Regional Carbon Sequestration Partnerships that are at work in 42 States, 4 Canadian Provinces and with over 350 organizations from organizations almost as diverse the membership of the NPC.  

America has also taken a global leadership role in carbon capture and sequestration.  The G-8 leaders recently called for 20 large-scale CCS projects.  DOE currently has seven underway.  We expect to have three more through our restructured FutureGen and Clean Coal Power Initiative programs.  So the U.S. is supporting 10 of the 20 projects called for by the G-8.

And, of course, global concerns about the rise in fossil fuel prices and global climate change are driving renewed interest in the use of commerical nuclear power.  As the only large-scale, cost-effective, fully-developed, readily-replicable, carbon-free system for power generation currently available, nuclear power is very much a part of the future. 

By streamlining the permitting process and through loan guarantees, risk insurance, and the filing of the application to open the Yucca Mountain waste facility as well as the Global Nuclear Energy Partnership we're sparking a global renaissance in commerical nuclear power.

But our work expanding the physical infrastructure of the global energy cycle must not neglect the needs of its intellectual infrastructure.

Our intellectual infrastructure must be replenished. 

A majority of the nation's skilled scientists and engineers and technical workers will soon reach the retirement age.  We do not have replacements for them, certainly not at the levels necessary to make the quantum leap in energy production the trend lines indicate are required.  We must devote time and energy to education to ensure a sufficient number of the world's best and brightest minds have the incentive to choose science or engineering as their career.

President Bush has taken action in this regard through his American Competitiveness Initiative, which he first proposed in 2006 to grow the budget for basic physical science research and fund an expansion of math and science education in the nation's secondary schools. 

If enacted by Congress as the President has proposed, the ACI will ensure that the United States continues to lead the world in opportunity and innovation by providing more than $136 billion over 10 years to increase investments in research and development, strengthen education, and encourage entrepreneurship and innovation.

Taken together all these efforts will, in my judgment, lead us down the road to a prosperous and energy secure future.  So I want to suggest we embark on a mission to educate the public about the facts of this new energy reality.  Your report is a vital initial step in that campaign. 

So my final challenge to you is two-fold: First, the "Hard Truths" report identified a number of topics on which the Council may wish to provide additional insights to inform public policy decision making.

These include: energy infrastructure, energy financing, prospects for U.S. oil and gas shale development, and the impact of climate change on the global energy system.  Therefore, I ask that the Council undertake an effort to identify several high value, high impact topics that could be discussed with the next Energy Secretary. I have greatly appreciated the Council's advice and I believe my successor will as well. 

Second, we must engage in a campaign to elevate energy literacy - to make people better, more effective energy consumers and increase their understanding of what is at stake.  And why we cannot place artificial, political limits on the menu of alternatives that can be employed to make this nation, and the world, more energy secure.  I believe history will judge us harshly if we do. 

If, however, we look to technology, to the very American spirit of invention and discovery, then the possibilities before us are limitless.  And America, as it has always done in its 232-year history, will take up the challenge and, ultimately, prevail.

Thank you.

Location: Fairmont Hotel - Washington, D.C.

Media contact(s): Kristin Brown, (202) 586-4940