Remarks of Senator Hillary Rodham Clinton to the Cleantech Venture Forum VIII
Good morning.
I want to thank Keith Raab and Nicholas Parker for their outstanding work in establishing the Cleantech Venture Network. Keith and Nicholas introduced the "cleantech" concept back in 2002, and as yesterday's Wall Street Journal reports, they have helped develop it as a viable investment category. So I want to thank them for spurring private sector support for clean technologies and for sustainable economic development.
I also want to thank all of the sponsors for today's forum. Your support is vital to the development and promotion of clean technologies.
And I want especially to recognize Chuck McDermott of RockPort Capital Partners for encouraging me to participate in this important event.
I'm here to talk about what we need to do to get America on track for a smarter, more secure and cleaner energy future. There are a lot of specific policy proposals out there to discuss, but I believe any solution has two broad parts - and the Cleantech Venture Network has them both. First, get out of the can't-do, status quo mentality that has put us in energy gridlock. Second, change behavior - and put our investment dollars where our best prospects for change are. And that is where Cleantech is leading the way.
The Cleantech Venture Network reports that investment in clean technology has been rising for five straight quarters and now ranks seventh among investment areas in North America. And by the way, one in every ten dollars that Cleantech tracks is invested by a company that participates in Cleantech programs. Outside this room, there is no question that our failure to make better energy choices is sapping our pocketbooks, limiting our competitiveness, threatening our environment and even our national security. Hurricanes Katrina and Rita made that brutally clear.
We have a short-term problem - helping people pay their bills and keeping the economy moving in the face of dramatically higher energy costs.
And we have a long-term problem. Massive economic development in China, India, and elsewhere means that the competition for oil and other natural resources is exploding and driving prices higher. The Department of Energy predicts that China's oil consumption will nearly double and its net imports quadruple in the next twenty years. Loosening environmental standards or opening up a new oil field or two is not going to offset this seismic shift in energy demand.
Our dependence on foreign oil threatens our economy and hamstrings our national security. Imported oil accounts for about one-third of our trade deficit, with much of that money going to regimes we would never choose to subsidize. To help secure the flow of oil from the Middle East, we spend $50 billion each year to deploy U.S. forces in the Persian Gulf and to supply military assistance to countries in the region. And that doesn't include the lives and dollars we are spending in Iraq.
And, if all that weren't enough, our dependence on oil is hastening the threat posed by global climate change. Energy production and use in transportation and electricity generation account for more than three quarters of U.S. greenhouse gas emissions.
So, I think it's clear - we have to do what America has always done when faced with a big challenge - roll up our sleeves and dedicate this country to finding a solution. The country that put a man on the moon can be the country to find new lower cost and cleaner forms of energy. Our nation needs it. Our planet needs it.
And, as FDR said, we have four words for it: We can do it.
We are a nation of innovation. And we can achieve the goal of less dependence on foreign oil.
The results will not just fuel our cars, they will fuel our economy and stimulate potentially millions of new jobs. The energy revolution can be as big and important as the industrial revolution and the explosion of the information age. And I believe that with the right investments and incentives, America can lead that revolution.
The smartest American businesses - like those represented here today -- are already taking the lead on energy technology and efficiency - and turning a profit. In my state, corporations like Corning and IBM are world leaders in saving energy and saving money - and it shows in their bottom lines. In just one year, 2003, IBM cut its energy consumption 7 percent - and saved $38 million. If the demand for efficiency and alternative energy is strong, it will be met. General Electric Chairman Jeffrey Immelt says he expects clean energy technology to be a major profit center for his company in the years ahead. And Ford recently announced that they would increase their hybrid production capacity to 250,000 by 2010. Finally, New York is a hub for the fuel cell industry, thanks to the work of companies like Plug Power, General Motors, Delphi and Kodak.
The American people want out from under the burden of foreign oil dependence. More than 90 percent of Americans want cleaner, higher mileage cars to drive - and they want the government to help make that happen. More than 85 percent want more investment in solar, wind and other forms of renewable energy. They want America to lead the way, not lag behind.
I see leadership in what you are doing through Cleantech. I see leadership in New York State and other states, where entrepreneurs representing the whole spectrum of renewables are developing cutting edge technologies to fuel our energy future. And New York State's formidable Renewable Portfolio Standard will help support their efforts - which studies have shown could create as many as 43,000 jobs.
In New York, I also worked with a variety of private sector leaders along with Roger Altman to create New Jobs for New York. This initiative has brought together investors and dozens of innovative renewable energy companies from New York to meet and highlight the strength and potential of this emerging industry.
Just one concrete example: Last April, I joined executives from General Motors Corp. to showcase the first fuel cell-powered truck to the U.S. Army at the GM research facility outside of Rochester, NY, where the vehicle's two fuel cell power modules were made - as a result of the military, Congress and private manufacturers working together.
Quite a few of us in Congress have worked to bridge the gap and put forward proposals for a better energy future. We passed, albeit not as much as we would have wanted, a 10 percent renewable energy standard in the Senate, but the White House rejected it. We've expanded research on hydrogen fuel cells, one of the positive things to come out of the last energy bill. I pushed to provide access to funding to retrofit old diesel equipment with filters that reduce harmful emissions - filters whose guts are made at a state-of-the-art Corning plant in upstate New York.
Senate Democrats have put forward a comprehensive plan to build real energy security for America and reduce our dependence on foreign oil. Senate Democrats have a plan to protect consumers from price gouging, to provide them relief, and to make us more energy independent. We know America can do better.
But our Senate Democratic plans to implement a federal renewable portfolio standard, or to set a national oil savings target, have consistently been thwarted by the White House and Republicans in Congress.
After 9-11, the Administration squandered an opportunity to put forward a truly comprehensive, forward-looking energy policy to start us down the road to greater energy independence.
Instead, the Administration pushed a policy that got a few things right, but largely ignored the tough issues while handing out favors to oil companies and other established energy players.
Now Katrina and Rita have exposed the Administration's policy for what it isusing an umbrella to fend off a hurricane.
From our strained refinery capacity to the months-long waiting lists for new hybrid cars, and solar panels, the core problem is clear: Our nation has suffered from a failure of investment and imagination- in both the public and private sectors - for a strategic energy future.
The energy market we have is broken. At the heart of the crude oil market is a cartel run by a handful of countries, and a global supply chain run by a handful of companies. The market is certainly working well for the oil companies. In 2004, the world's 10 largest oil companies had combined profits of $100 billion. In 2005, those profits are headed even higher.
The truth is the current policies in Washington are clearly inadequate for the long-term crisis we face. And the marketplace, as currently structured, is unlikely to produce the investments in new technologies that we and the rest of the world need.
So, we need to be bigger and bolder to change things. I want a plan to ensure that we re-invest the tremendous drain that higher energy prices are exacting on middle class families and the economy in a better energy future. I don't believe that consumers should pay for that with taxes for energy or that we can just let the current marketplace go at its own pace.
The strategy I propose would ask the oil companies that have experienced these amazing profits to either reinvest them in our energy future to reduce our dependence on oil or to contribute to a Strategic Energy Fund that provide incentives for companies and consumers who want to be part of our energy solution.
I believe that we need to assess the oil companies an alternative energy development fee to be put into the new Strategic Energy Fund. We should design the fee so it is taken solely out of unanticipated profits from the sky high oil prices and ensure that it is not passed on to consumers. It could generate as much as $20 billion a year to help retool our economy and deploy new energy strategies.
We used to make polluters pay for their clean-up through Superfund.
And now we need for the oil companies to share the burden of lifting America up and out of the looming energy crisis.
How would this work? We need to devise a bipartisan mechanism to make sure that energy companies are contributing their share to America's energy future. I suggest the following fundamental principles:
Reform our energy taxes so that large oil companies who reap huge benefits over the next two years will pay a portion of their profits to fund new tax incentives for those consumers and companies who do want to invest in America's energy future. Companies that choose to invest these profits in refining capacity, efficiency and alternative energy would not be required to pay into the fund.
It's not about new energy taxes on consumers - it's about redirecting the hidden "tax" that middle class Americans are already paying to OPEC and the oil companies in the form of higher prices and harnessing it to secure our energy future. Such a measure should be temporary, lasting just long enough to kick-start the alternative energy market that we all know is out there.
Now is the perfect time for oil companies, flush with cash, to transform themselves into energy companies, investing in technologies that will produce profits and increase America's energy independence. British Petroleum and Shell are already taking encouraging steps in this direction. But our country, and our country's companies, as the world's largest energy consumer and emitter of greenhouse gases, should lead the way.
This is how we can turn the current dismal situation into a "can do" for America. The Strategic Energy Fund would help consumers cope with spiraling energy costs; promote adoption of existing clean energy and conservation technologies; and stimulate research and investment by the private sector to ground the next generation of energy technologies.
In the short term, however, millions of consumers are going to need help paying their energy bills this winter. The wellhead price of natural gas has tripled in twelve months. Families in the Northeast and Midwest who depend on oil to heat their homes can expect to spend 30-40 percent more on heating this winter. Families in the West and South who depend on electricity for heat can expect to pay 28-49 percent more.
We're asking Americans to believe the can-do voices telling us that there is a better energy future ahead. Americans also need to believe that help is there for them when they need it, right now and through this winter - including a rebate or tax help, generated by the Fund, to help middle-class families with the high costs of heating.
In addition, we need immediate action to help the most vulnerable. Congressional Republicans have not cooperated thus far to fund the Low Income Heating Assistance Program at the level President Bush authorized in his energy bill--$5.1 billion. The needs this winter are desperate and funding for this critical program has simply not kept pace with demand. Between 1981 and 2002, the number of LIHEAP-eligible households increased by 66%, LIHEAP funds increased 44%, and the percentage of eligible households served by LIHEAP declined from 36% to 13%. Without this assistance, millions of seniors and low-income families will face impossible choices between putting food on the table, buying needed medicine or paying their heating bills. America can do better, and I will continue to push for funding for this lifeline program.
But the underlying problem is that our homes and businesses just aren't as energy efficient as they could and should be. President Bush says he wants Americans to conserve energy. Conservationsimply using less energyis important. But being more energy efficientgetting more using less energyis far more important. We have an opportunity to make a historic push for energy efficiency in the coming years, and we ought to do it.
Unbelievably, at a time when we should be doing everything we can to promote and conserve energy efficiency, the Administration is trying to shut down the DOE offices that implement our efficiency programs. We need to do the exact opposite. Our DOE efficiency programs can't do it all, but they can do a lot more than we have asked them to.
One example is a very successful but little-known program that subsidizes energy efficiency improvements in the homes of low-income families. This program has provided weatherization services to more than 5.3 million low-income families, and has reduced heating bills by 31% on average. That's the good news. The bad news is that there are nearly 25 million other homes that remain eligible for this program.
We need a concerted push to make our homes and businesses more energy efficient. I'm calling on the Administration to put its money where its mouth is, and provide $500 million for the weatherization program and $90 million for a national campaign to promote energy efficiency.
Americans need help figuring out how they can use energy more efficiently, and the President ought to push to fund that program and engage the private sector. Just to give one simple example, why don't we ask the oil companies to post signs at their gas stations encouraging people to keep their tires inflated properly? Most drivers don't take this simple step, which can increase fuel economy by more than 3% on average. Government, the private sector, and non-governmental organizations could mount an effective campaign to promote greater energy efficiency, and we ought to approach this task with urgency.
Americans also deserve to know that the prices they pay for gas and oil are fair - and that the money they spend on energy is going back into investments in the future of energy. We need to make sure that the FTC investigation into price gouging is tough and comprehensive. The Administration was reluctant to start it, and I think we're going to need to keep the pressure on them to make sure it's done well. But even if the FTC found evidence of price gouging, there's nothing the Justice Department could do about it, because it's not a federal crime. It should be.
It is time to take the mystery out of gas pricing. I've co-sponsored legislation seeking more transparency in the oil and gas markets to make it harder for the oil companies to rip consumers off. Let's understand what the mark-up on gasoline is and who is getting it. By adding more information to the marketplace, we can make it more competitive.
Taking care of our people right now is important. But the central challenge we face - and the key reason we need a Strategic Energy Fund - is to put research and development of alternative energy sources into high gear. Let me start with three priorities - putting more efficient cars on the road, getting existing alternative technologies we already know are accepted and affordable in the market, and jump-starting our technology research to regain our world leadership.
First we have to address transportation, which accounts for 70 percent of our oil consumption and 79 percent of the growth in consumption in the U.S. between 1985 and 2003.
Going further on a tank of gas and putting something other than gasoline in the tank are the keys to reducing U.S. oil dependence.
And while this fact may be clear for all to see, we have been at a political impasse for 20 years about how to solve the problem, and the results are lose-lose. The fuel efficiency of the American car and light truck fleet is at its lowest level in 20 years. We all want to keep our automakers and good-paying auto industry jobs. We all want hybrids, clean diesels and the next generation of fuel-efficient cars to be built here in the U.S. And we know that our domestic manufacturers are saddled with enormous legacy health care and pension costs that make it difficult for them to invest in retooling their plants.
It's time for the Bush Administration to show some leadership. The Clinton Administration pulled the auto makers together in the Partnership for a New Generation of Vehicles to work out a coordinated strategy for both near term and long term increases in fuel economy. We made some progress, but much of that work remains undone. That's why I have called on the President to invite auto industry manufacturers, suppliers and unions to a summit at the White House. He ought to find out what they need to make real progress on energy-efficient vehicles and pledge to provide it. The ideas are out there, such as offering automakers relief on legacy health care and pension costs in exchange for a commitment to produce more efficient cars, boosting research, and providing training for workers.
The stalemate politics of the CAFÉ debate aren't working for anyone.
While we search for ways to create better incentives for our domestic manufacturers to produce more efficient cars, there is one obvious step we can take on the consumer side of the equation: Double the current tax credits for advanced technology vehicles, such as hybrid and clean diesel cars and trucks.
This won't just help consumersit will let manufacturers know that the market is going to be there, so they can invest with confidence.
Washington can also show leadership through its own purchasing. Let's set the goal that, by 2010, the government is out of the business of buying old-fashioned vehicles¸ and is replacing its fleet from the Army to the GSA with fuel efficient cars and trucks.
Getting more miles to the gallon is the most important thing we can do to reduce our oil dependence. But we can also replace gasoline and diesel fuel with ethanol and biodiesel. Once just the province of the Midwest, this industry is expanding and branching out in new directions. Ethanol and biodiesel are already beginning to transform our rural economy. A serious commitment to these alternative fuels could help drive our energy independence and lead to a renaissance in rural America.
Near Fulton, NY, entrepreneurs are planning to convert an idle brewery into an integrated biofuels facility that will produce both ethanol and biodiesel. When it comes on line, it will be the biggest ethanol plant in the NE, producing 100 million gallons a year of ethanol, and 5 million gallons a year of biodiesel. The plant will begin by making ethanol from corn, but plans to switch to make cellulosic ethanol from nearby sources of fast-growing hardwood trees. This is exactly the kind of project that we need to support, and the President should provide funding for biofuels programs in the energy bill he signed into law.
As we expand our biofuel production capacity, we also need more "flexible fuel" vehicles that can burn 85% ethanol blends. We have about 5 million of these cars on the road now, but we could easily have more. The cost of the technology per vehicle is low--$100 or less. The potential benefits are enormous, particularly when combined with hybrid technology. A 50 mile-per-gallon hybrid that burns E85 is effectively getting more than 300 miles for every gallon of petroleum-derived gasoline in the tank. So I'm challenging the auto industry to accelerate deployment of flexible fuel technology in new cars so that within 5 years all new cars are "flexible fuel vehicles."
Before I leave transportation, I want to mention one other clean transportation issue--the importance of implementing the ultra-low sulfur diesel rule. Cummins and other engine manufacturers have invested billions in research and development of the next generation of clean diesel engines. I was very proud to say that some of these new engines will be produced by New Yorkers in Cummins' plant in Jamestown, NY. I had the pleasure of visiting the Jamestown plant this summer to celebrate the 750,000th engine rolled off the line. But the clean engines that Cummins has prepared to produce can't work without the low sulfur fuel that the refineries are supposed to require next year fall. EPA has already delayed implementation once, under pressure from refineries and their oil company owners. It's not fair, and they shouldn't do it again. If big oil companies won't step up to the plate, they need to get out of the way and let innovative companies thrive.
We also have a natural gas crisis on our hands. The quickest way to deal with this crisis is to reduce demand for natural gas through increased efficiency. It also means that we should strive to have new electricity generation come from other sources, such as clean coal and renewables. We should shift to more energy efficient power generation equipment, household appliances, industrial motors, and air conditioning systems in new and existing buildings. If every American home replaced its incandescent light bulbs with compact fluorescent ones, which use one third the electricity and last ten times as long, the electricity we use for lighting would be cut in half. Even with the higher cost of the efficient light bulbs, consumers would save 25-40% per year.
We should also maximize other sources of heat and power, such as recapturing landfill methane, and using geothermal. The City of Auburn, NY converted their city hall - a historic building - to geothermal. The cost savings enabled them to install air conditioning and still lower their heating and cooling bills.
We can do much more to use wind and solar energy. In New York, we're building the biggest wind farm in the northeast, a 300 megawatt project. Germany generates 12,000 megawatts of electricity with wind, about twice the US total. Denmark already gets 18% of its electricity from wind. Because of engineering advances, some recent long term wind contracts were signed at 3 cents per kilowatt hour, cheaper than nuclear, coal, and even natural gas at today's high prices. If we doubled our capacity for wind each year for 7 years, wind would produce 650,000 megawatts of power making it the dominant leading source of electricity. The investment required would be roughly $90 billion dollars a year, less than half what Americans spend a year on gasoline. We can do this; keep in mind wind generating capacity is already growing 30% a year.
Solar cells installed in buildings also have tremendous potential for growth. Today we generate 32 megawatts of electricity with solar installations, less than half of Japan's total. My husband's library installed over 300 solar cells, cutting its utility requirements by one third. Today there is a 2-3 months back log on orders for solar cells in the US. Currently, solar power is more costly than wind or coal but the price drops 20% each time capacity is doubled. Sales are already growing at 30% per year. We could easily double that, making solar as cheap as wind in no time. Moreover, once a home or business pays off its investment in the cells, the power is essentially free for the remaining life of the structures. And in sunny areas where solar cells can produce more power than the homes or businesses require in certain months, most local utilities will take the access and credit it against the consumer's utility bills.
Clearly, we need more incentives to quickly increase the use of wind and solar power; they will cut costs, increase our energy independence and our national security and reduce the consequences of global warming.
There is truly great potential to be harnessed. And we may just be able to maximize these technologies in ways we never thought possible. For example, in the wake of the devastating destruction of Hurricane Katrina, we may be able to use these technologies to truly make New Orleans, and other cities along the Gulf, America's first green cities.
But to do any of this, we need more certainty for investors. The year-by-year extensions of the production tax credit don't create the incentives that we need. Instead we need a renewable portfolio standard to require that 20 percent of the nation's production comes from renewable resources by the year 2020.
Beyond tax incentives that spur use of existing technology, the US needs to take back our leadership in cutting-edge energy technology - by funding serious public-sector research. We know investment in public-sector research works - it's what brought us the Manhattan and Apollo Projects and the Information Age, from the Internet to Google and beyond.
The National Academy of Sciences has recommended that Congress establish within the U.S. Department of Energy an organization called the Advanced Research Project Agency -- Energy (ARPA-E) that reports to the undersecretary for science and sponsors "out-of-the-box" energy research to meet the nation's long-term energy challenges. The Academy has outlined a sensible plan to create this agency, ramp up its funding up over five years, and then evaluate its effectiveness. Congress ought to take this idea and implement it immediately.
But obviously government can't do it alone. The private sector needs to pick up where government research leaves off. That's exactly what the venture capital firms here today are all about. But I think we need an even bigger push from our largest securities and banking firms to place the highest priority on accelerating these technologies. This is the moment to raise tens of billions of dollars in new funds dedicated to doing so. Investor interest in energy could not be higher, and special tax incentives or government guarantees are not needed. We need Wall Street's leadership to seize this opportunity. I know many of those leaders and believe they are ready to do this.
This is a nation of innovation when we set our minds to it. We have been the leaders in the development of virtually every major technology from the telephone and electric light bulb to the PC and new miracle drugs. We can be the leaders in the energy revolution.
We can do this. Americans don't duck challenge. What if, when President Roosevelt realized how much equipment and supplies it was going to take to win World War II in Europe and the Pacific, he had said, let's try to get by with the absolute minimum, let's send less equipment and invite the American people to conserve?
Of course, that alone would never have won the war. But Roosevelt convinced Americans that we were all in it together. And the industrial buildup he began not only won the war, but lifted the Great Depression and laid the foundations for a generation of prosperity that followed.
We have the chance, today, to change our energy future. We can become the world's major supplier of new energy technologies, not just the world's major consumer of oil. And that will create thousands of new, high-tech jobs - the kind of jobs that make America's economy the envy of the world. You know this - you are already doing it. We have the know-how, we have the resources, all we need is the will, to create an energy future that is better for business, better for the planet, and has "made in America" written all over it.
Thank you.
http://clinton.senate.gov/news/statements/details.cfm?id=247652&&
