Thank you all for having me here today. It is great to be here in Columbus.
I’m an honest person and I have to make a confession right off the bat…although I have great admiration for the Ohio State University, I must confess I’m not a fan. You see I attended Rice University in Houston. Some of you may remember that my beloved Owls traveled here to Columbus many years ago [in 1996] to take on the Buckeyes. The final score was Ohio State, 70; Rice, 7. And we were happy to get the 7. So I am here to seek retribution and I will now turn to my powerpoint presentation complete with 70 really boring slides.
OK now that I have gotten that off my chest…. I know that central Ohio’s success reaches far beyond Buckeye football and the presence of a world class university. You have the Battelle Institute and leading companies which have helped make Columbus an economic foothold for the entire state of Ohio.
I was impressed to learn that Forbes ranked Columbus the #1 most up and coming city in the US last year.
However, a lot has happened in a year’s time and, Ohio has faced its share of challenges in this economic climate -- as have many states and communities around the country.
Ohioans and other Americans are concerned about their jobs, about their family budgets, and about their future.
The Pew Center did a poll in January of this year and asked Americans what were the 20 top issues facing our nation? The economy and jobs took the top slots but you know what took number six? Energy. Yes energy – Americans are very concerned about energy security – from prices at the pump to their monthly electric bill.
We all want to return to a healthy economy as fast as is humanly possible BUT to achieve economic recovery, our economy will depend on a very important ingredient – affordable and reliable energy. Let us not forget that energy was THE key to our nation’s economic growth in the 20th century, propelling to an industrial and economic superpower and it WILL be the key to our economic rebound in the 21st century.
Many of you may be following the debate unfolding in Washington over health care and energy and climate change legislation. I was stunned to read an OPED in today’s Washington Post entitled “Can legislators really read every word of every bill?” The article points out that for a legislator to read the recently passed House climate bill, it would take at least 12 hours. It highlighted a group asking every member of Congress to read every bill before they vote on it, but the Post concludes “their proposal would bring government to a halt.”
We need our Congress to get back to business and name less post offices and start addressing our nation’s problems. I am sure the framers of our constitution would find it rather unsettling that Congress doesn’t have the time to read the actual bill they will be voting on…
Let talk about energy and climate – right now the debate is framed wrong from the get go – energy versus the environment - we don’t have to choose and I guarantee you others won’t make a choice between energy and the environment. It’s false choice.
Our goal at the Institute for 21st Century Energy at the U.S. Chamber of Commerce is to recommend policies that ensure the availability of reliable energy, stimulate economic growth, and emphasize environmental progress. It has been said that a “goal without a plan, is just a wish.” So our efforts have been focused on developing and promoting such a plan.
Why is this so important? Because the United States, and the world as a whole, are going to need a lot more energy.
So let’s burden ourselves with some knowledge.
The demand for energy in the US is projected to increase by as much as 30 percent between now and 2030, and our electricity use will go up by as much as 20 percent. Global demand for energy could increase by 50 percent over that same time period, with 75 percent of that demand coming from the developing world. China has around 30 million cars on the road today and by 2025 they will have 300 million cars.
India’s demand for oil has grown six fold in the last 20 years. 80 percent of the growth in GHGs will come from the developing world.
Electricity demand is going to go up 100% - imagine that. And still 1.6 billion people don’t have access to modern energy services.
When you think about the fact that 2/3 of the world’s oil reserves are increasingly off limits, either geologically or geopolitically and that state-owned oil companies own between 80-90% of the world’s reserves, you know we have got to get our US act together.
The International Energy Agency estimates that we need to invest $26 trillion by 2030 to meet our growing energy needs. Is this capital going to be available and will we have the type of investment environment conducive to getting these massive projects built and delivering the energy we need in a timeframe that is relevant to fueling a 21st century economy?
We are dealing with a new energy reality. If we are to address these energy needs then we need practical solutions and more – not fewer – options.
I submit that the decisions our nation makes about energy over the next few years, will determine our future for the next few decades.
Clearly, we face some significant challenges when it comes to energy. But I believe in these challenges lies real opportunity.
With the entire world calling on the US for leadership, if we were to act smartly on energy and climate we could demonstrate to the world how to create a vibrant economy and preserve the environment.
Unfortunately, the U.S. House of Representatives fell short of this mark when it passed energy and climate change legislation in June.
Instead of seizing this opportunity to put America on solid footing both economically and environmentally, they passed a bill (that was 1500 pages) that is so complicated that it requires 400 new regulations and includes 1,060 new federal mandates.
I am sure for you business owners, more than a thousand new mandates is unappealing to say the least.
First to get a perspective on the bill – its goals are to reduce our GHG emissions by 17 percent by 2020 and 83 percent by 2050. Practically what does that mean? It means we have to take a GIGATON of CO2 out of our atmosphere by 2020. For those of you who left your pocket calculators at home, a gigaton of CO2 is the equivalent of building 130 new nuclear plants instead of coal plants or 127,500 new wind turbines. This is hard to even imagine especially when we haven’t built a new nuclear plant in over 30 years…and we can’t build a wind farm 14 miles off Nantucket - the human eye can only see 16 miles at best.
When the Congressional Budget Office stated it would only cost a postage stamp a day, it was not only wrong but disingenuous. It was a nice sound bite but really didn’t contribute to an honest and transparent debate on the bill.
And people want facts not rhetoric. Gallup did a poll earlier this year which showed that 41 percent of Americans don’t trust the information they are receiving on climate change issues.
So the Energy Institute wanted to do our own analysis of the bill that takes into account not the world as we want it to be, but the world as it is. And most importantly, we wanted this analysis to show how this legislation is going to impact you. Your pocketbooks. Your prices. Your prosperity.
What we found is a cause for real concern.
Our analysis found that the House legislation will reduce economic growth by $1.3 trillion dollars from 2012 through 2030 – which is nearly 50 percent greater than some projections.
We found that the House legislation will have a devastating impact on jobs, costing the American economy nearly one million jobs, including 440,000 manufacturing jobs, double what the US government estimated.
We found that the House bill will increase electricity prices by 36 percent over the next twenty years.
And we found that the House bill will cost the average American household roughly $520 per year.
There is no question that this legislation would hurt at the national level – but it would be particularly disruptive to states like Ohio.
A recent study examined the impact that the House legislation would have on individual states. The news for Ohio was grim.
The legislation would increase electricity prices for Ohio households and businesses by up to 60 percent.
It would shrink the disposable income of Ohio families by as much as $1,400 per year, and could reduce Ohio’s gross state product by as much as $18.9 billion dollars by the year 2030.
Most concerning, it could cost Ohio as many as 108,000 jobs over the next twenty years.
I would suggest to you that your elected officials should be looking at ways to lower energy prices, not increase them; expand your buying power, not shrink it; grow the economy, not contract it; and create jobs, not destroy them.
But the good news is that all of these goals are possible – provided we take a comprehensive and practical approach. At the Energy Institute, we have laid out such a plan to the new President and Congress earlier this year and let me lay out a few of the important components that we believe must be addressed:
First, there must be greater efforts to increase our energy efficiency in our homes and in our businesses. The greatest source of energy available is the energy we waste everyday. The United States uses 50 percent less energy to produce a dollar of GDP than we did thirty years ago but we can do more.
But 40 percent of U.S. energy consumption comes from residential and commercial buildings. So we need the federal government to work with states
to make it profitable for utilities to sell less power and for home builders to invest in energy efficiency measures rather than building that bonus room.
Second, we need to get new clean technologies out of the laboratory and into the marketplace and that means working with the capital markets to attract new financing.
At the Energy Institute, we are encouraging new financing options through a new Clean Energy Bank of the U.S. to accelerate the development of clean energy technologies and projects. And to ensure that taxpayers wouldn’t be on the hook, the bank would be financed through its own operations, rather than by taxpayer dollars.
And after this Clean Energy Bank is up and running, it should take control of the Department of Energy’s Loan Guarantee Program. Why do we think that’s important? Well, one reason lies just sixty miles south of here -- the American Centrifuge Plant in Piketon.
I’m sure many of you are familiar with it. It is owned by an American company trying to deploy American technology that would improve our energy security and our national security – not to mention improve the economic security of a region that desperately needs it.
But instead of getting the support it needs from the federal government, this project has seen its promised loan guarantees bogged down in a ridiculous political and regulatory morass. As a result, hundreds of jobs are at stake. It’s time to take the politics out of this process and put the Loan Guarantee Program under a more permanent and stable financing platform.
Third, we need to double funding for clean energy research and development and increase the use of renewable energy technologies. Up until the stimulus bill we were investing less in clean energy R&D than after the Arab oil embargo of the 1970s.
But government can’t and won’t provide all the breakthroughs so we should give business a permanent go ahead to innovate by making the research and development tax credit permanent. Then, the companies here in Ohio would have additional incentive to create America’s energy future.
Right now solar and wind account for 1.3 percent of our electricity mix, and we need them to play a greater role.
Congress has been turning renewable tax incentives off and on like a light switch every year or two.
This uncertainty makes businesses less likely to make critical long-term investments. We should extend all renewable tax credits once and for all for eight years and then phase them out.
That way business has the predictability it needs and government doesn’t end up endlessly subsidizing technologies that can’t compete in the marketplace.
Fourth, we need to acknowledge the important role that conventional and fossil fuels will continue to play over the next several decades and expand domestic exploration and production of oil and natural gas.
Ninety-six percent of our transportation sector still relies on oil, and that is not going to change overnight.
For 30 years, 85 percent of America’s oil and natural gas resources have been placed off-limits to exploration. If we are truly interested in lessening our dependence on foreign oil, it is unimaginable that we won’t tap our significant reserves here at home and produce more American energy and create good American jobs.
So the Congress and the Administration need to allow for the increased exploration and production on and off our shores. And I want to stress that this oil and natural gas can be accessed in an environmentally responsible way.
Hurricanes Katrina and Rita ripped through areas of dense oil and gas production in the Gulf Coast, and the U.S. Coast Guard determined that there were no significant spills to report.
Coal is obviously very important to the state of Ohio and we need to double down on our research and development efforts to demonstrate the technology that will capture and sequester carbon in order to allow us to use the 250 years of coal we have in the United States. If we don’t I guarantee you other nations will be glad to buy it.
Fifth, nuclear power which is emissions free and affordable only accounts for 20 percent of our electricity. We haven’t built a new plant in 30 years. There are over two dozen applications filed with the NRC to build new reactors.
We need to act with alacrity to support the expansion of nuclear power and reestablish the nuclear industry and its jobs in this country.
Sixth, we need to get a handle on a disturbing and growing plague on our nation. There was a time when new energy projects had to contend with NIMBY sentiments, which you might know as Not In My BackYard. NIMBY is a thing of the past and today, we must contend with what we call BANANA – Build Absolutely Nothing Anywhere Near Anyone.
Energy projects once had to contend with red tape, today they have to contend with green tape – the frequent abuse of environmental and siting regulations in order to delay, disrupt and destroy needed energy projects.
In fact, the U.S. Chamber has just made an inventory of all the energy projects that are being stalled and stopped around the country – right now there are over 400 of them and growing.
We have to restore some sanity to the regulatory process, and streamline and reform laws that are being abused by individuals and groups to bring needless and endless delays to important energy projects.
Last but by no means least, we need to be investing in our intellectual feedstock. As a university town, you can appreciate this. We are graduating fewer and fewer people with technical expertise and engineering and math skills. We will not be a competitive economy in the 21st century without the people to innovate and discover that next technology or new source of energy.
While we worry a lot about importing oil these days, I worry more about importing our intellectual capital in the future. In my view, this could perhaps be one of the largest challenges to our nation over time.
These are just a few examples of the measures being recommended by the Energy Institute. Earlier this year, the Institute unveiled a plan that included more than 80 specific recommendations with timelines for when they should be implemented.
This plan is available at our website at WWW – DOT – ENERGYXXI – DOT ORG. I’d encourage you to take a look.
If the Senate can put together a comprehensive plan that addresses our long-term energy needs, then the U.S. will be on the right path economically and environmentally.
But ultimately, what moves Senate action is the will of the people outside of Washington. And today, I’m asking you – if you aren’t already -- to be involved in this debate. It is going to impact each and every one of you – your home, your business, your future -- so you should have a voice.
I’d encourage you to follow the progress in the Senate as this debate gets under way. Use resources like the Energy Institute’s website to stay abreast of the events in Washington. And tell your Senators, tell your neighbors, tell your Mother and her neighbors that Ohio needs a practical common sense energy bill that will help its economy, not hurt it.
A strong and sound energy policy is still very much a possibility, but it’s going to take the work of the people in this room, and I hope we can count on your support.