Energy Myths and Realities, Remarks
Energy Myths and Realities
Institute for 21st Century Energy Launch Event
U.S. Chamber of Commerce
Remarks by Thomas J. Donohue
President and CEO, U.S. Chamber of Commerce
June 12, 2007
Let me begin by thanking the National Chamber Foundation for hosting this event. As usual, their staff has done an outstanding job. Although this event marks the official launch of our new Institute for 21st Century Energy, it's already been engaged in a number of activities. We have assembled a top-notch staff led by Gen. Jim Jones, we've held extensive meetings with a wide range of energy stakeholders, we've talked with reporters, and we've been busy researching and writing our first publication, which you have at your places.
In a few minutes, Gen. Jones is going to outline the mission of the Institute, its program of work in the coming months, and its underlying principles. Before he does that, I'd like to take a minute to talk broadly about the energy challenges facing this country and why the Chamber decided to start the Institute.
Energy-Where We Stand Today
We're here today because we understand that an affordable, diverse supply of energy is critical to the health and growth of U.S. businesses, to our domestic economy, to our national security, and to our global competitiveness.
Yet despite the unquestioned importance of energy, our nation has no real energy strategy. Instead, Washington, D.C., the states, and local governments have created a patchwork quilt of conflicting and overlapping laws and regulations.
Such policies are sometimes well-intentioned, but all too often they are based on ignorance, complacency, fear, and even hypocrisy. We should ask ourselves: Why haven't we, as a country, been able to unite behind a comprehensive energy strategy?
The truth is this: the three major energy stakeholders-the public, policymakers, and businesses-either lack an understanding about energy's essentiality or are fragmented in their approach to solutions.
For example, few Americans seem to have focused on where our fuel and power really come from, or the fact that our energy supply must continue to grow. They don't understand that the rest of the world is now competing with us for energy, or that we have put our nation at risk by locking away the vast resources of our own nation.
I suspect that as long as people can get electricity by flipping a switch and gasoline by squeezing the handle on the pump, they won't focus on the fact that our energy infrastructure is in dire need of expansion. And when they do focus, it is usually to fight a needed project that might end up somewhere in the vicinity of their own backyard.
As for policymakers, I used to wonder whether their decisions were being driven by stupidity or hypocrisy. I finally decided it was both! How many times have you heard politicians call for "energy independence," and turn around and vote against greater domestic energy development?
Take a look at what's going on up on Capitol Hill right now a serious-and seriously misguided-effort to undo the best features of the Energy Policy Act of 2005.
The Chamber, along with many of you here today, worked for many years to pass that bill. It was a responsible, bipartisan bill to speed up the permitting for domestic energy production and the expansion of our power grid. It would invest in new technologies, spur development of our vast oil shale resources, and help the nation make further strides in energy efficiency. Yet rather than implementing these good ideas, Congress is preparing legislation that would scale them back.
Furthermore, the House has already voted for a gasoline price gouging bill that is pure politics. It's an exercise in chest-thumping that won't produce a single new gallon of gas or lower the price at the pump one bit.
Meanwhile, the Senate is considering a federally mandated renewable portfolio standard. Utilities would be required to generate at least 15% of electricity from non-hydro-renewables by 2020, or else purchase credits from the federal government or other companies. The problem is we don't have the technology and infrastructure to meet those goals at this time.
What's wrong with this picture? The same politicians who complain about high energy prices, and who bemoan our reliance on foreign oil, are the ones preventing us from increasing domestic supplies-which could drive down prices and reduce that reliance.
Six Fundamental Realities
So, we need two things: a fact-based awareness of our energy challenges and a national consensus on energy and related matters involving all stakeholders-business, environmental groups, energy producers and users, and others. The time has come for the people and the politicians of our country to understand and recognize some fundamental realities about energy.
First-without a growing and diverse supply of affordable energy, our nation will not be able to grow, compete, or lead in a changing world.
Second-the United States faces enormous competitive pressures across the globe for energy resources. While our domestic demand will grow by one-third between now and 2030, global demand will expand by as much as 70%!
A third reality-we have tremendous untapped resources at home. In fact, neither our country nor the world is anywhere close to running out of coal, oil, or gas. Many would be surprised to learn that this nation does not import most of its energy. Two-thirds of it comes from domestic sources. That's because we use the biggest share of our energy to produce electricity. Most of that power comes from coal, nuclear, domestic natural gas, and hydroelectric power-not imported oil.
And by the way, the two nations that account for the largest shares of our petroleum imports are Canada and Mexico. They make up 30% of our imports; the Middle East, 17%.
The fourth reality is that diversifying our energy supply, investing in alternative sources and fuels, and achieving greater efficiency all make good sense and must be a part of any comprehensive strategy.
But here's the part of the equation many people don't want to hear. Even if we vigorously pursue all these avenues-and we should-it's not going to change the fact that our nation, and the world, must still rely on traditional sources such as oil, gas, and coal for decades to come. These fossil fuels meet 86% of our energy needs today-and objective experts agree it will be the same in the year 2030.
Which brings us to a fifth reality facing us today. Like it or not, it is impossible to have a conversation about energy today without also talking about climate change.
As we know, fossil fuels emit the carbon dioxide believed to contribute to global warming. Figuring out how to use these fuels-while, at the same time, finding ways to limit CO2 emissions-will be one of the most difficult and contentious policy challenges of our time.
Yet however one chooses to assess the risk of climate change-whether you think it is an imminent disaster about to happen or a longer-term risk that can be addressed over time-it is impossible to deny that climate change is a global challenge requiring a global approach.
Within a year, China will surpass the United States as the number one emitter of greenhouse gases. India and other large, developing nations are catching up too.
So as the scientific inquiry continues, and it must, we must work to ensure that responses to climate change are global and flexible. They should embrace both technology and greater efficiency. And they must allow this country to acquire and use the affordable energy we need to compete and create and sustain American jobs.
The sixth and final reality I'd mention is that energy infrastructure is as important as the energy resources themselves. I'm talking about the refineries, pipelines, power plants, transmission lines, and the roads and sea lanes that carry our fuel.
What We Must Do
So these are some of the challenges confronting us:
- a complacent public that lacks an appreciation of the importance of energy;
- a Congress that's not serious about implementing practical, consistent, and effective solutions; and
- stakeholders with competing interests who have failed to come together behind a united strategy that would benefit everybody.
Given this environment, what should the Chamber and the business community do? Two things.
First, we must fight to keep the policy situation from getting worse. That's why Bruce Josten, Bill Kovacs, and their troops are in the trenches with many of you every day, trying to stop Congressional proposals that would turn the clock back on energy. Together, we have re-engaged the Alliance for Energy and Economy Growth in this fight. We take these efforts very seriously.
But at the same time, we must chart a course going forward that:
- Reframes the energy debate in our country;
- Educates the public and policymakers;
- And that moves us away from the complacency and contradiction we are seeing today, towards a comprehensive energy approach that secures the fuel and power we need for a growing, competitive economy.
That's why we have formed the Institute for 21st Century Energy. I'll let General Jim Jones outline the Institute's goals and early program of work. But let me underscore just how serious we are about this effort. We are in it for the long-haul. It will be well-led, well-staffed, and well-funded. It will have its own dedicated resources as well as access to the all of the Chamber's policy, lobbying, communications, and grassroots assets.
One question I have been asked is, what's different about this effort from the many other groups and coalitions around town? The Chamber got that same question 9 years ago when we formed the Institute for Legal Reform. We got the same question 2 years ago when we formed our Capital Markets Commission.
It's a fair question. There were and are other groups dedicated to those issues. We welcome them-and we welcome them in energy, too. In both legal reform and capital markets, it's fair to say the Chamber played a strong galvanizing role that expanded and magnified the important work already underway.
With the Chamber assets and a powerful brand, plus a leader of the stature of General Jones, we believe we can make a fundamental difference in energy as well-reframing the debate, advancing the issues, bringing stakeholders together-and then putting the lobbying and grassroots muscle behind a plan to get something done.
But in order to succeed, we need your support, your ideas, and whenever you believe it is warranted, your criticism. As you listen to and participate in today's program, I hope you will also be thinking how you, your company, or your organization can become engaged in the Institute's activities.
We all have a stake in its success-and we want its success to be broadly shared.
Introduction of General Jones
With that, let me now introduce Gen. Jim Jones. Before stepping down from active duty after 40 years of service earlier this year, General Jones was the Supreme Allied Commander of Europe, where he oversaw NATO's military forces in that part of the world.
He was also Commander of the United States European Command during that time. Before that, he served as Commandant of the United States Marine Corps.
General Jones brings a fresh approach to the energy challenge. He spent years working to elevate energy security to become part of NATO's core mission. He brings to the table a truly international perspective, having protected energy facilities and supply chain routes as far away as Africa, the Persian Gulf, and the Caspian Sea.
As head of a 26-nation alliance, the General was masterful at building consensus, a skill that will serve him and the Chamber well as we strive to bring unity and cohesion to the energy challenge.
In addition, he knows how Washington works. He enjoys very strong relationships with corporate and political leaders. He's extremely well respected throughout the world, and possesses unquestionable leadership skills.
We are very pleased to have him leading this critical effort for the Chamber and our country.