Remarks for Energy Secretary Samuel Bodman
It is good to be here with all of you. Over the past year I have spent a lot of time talking with foreign energy ministers, leaders in industry, members of Congress, state and local officials and ordinary citizens about the President's plan to enhance energy security. It's been a real education.
I've come to the conclusion that energy policy is like the weather: everyone has an opinion on it. but expects someone else to do something about it. And when it says "United States Secretary of Energy" on your business card, like it does on mine, the person they expect to do something about it is me.
I suppose that's true. But it's not my job alone - and it's not the government's job alone. There are limits to what government can do and should do.
Government should, for example, provide the funding needed for basic research and, in some instances create incentives to push along the most promising technologies to commercialization. And it must provide the right policy environment to encourage investments in all parts of the energy supply chain and stimulate new R&D in the private sector.
It is these ideas that underlie the goals of the President's energy policy, that America should diversify its energy portfolio, both supply and suppliers; that America should utilize emerging technologies to their full potential and maximize our economy's energy efficiency; and that the private sector should, as a general rule, lead in these efforts - with the government in a supporting role.
For example, the President's American Competitiveness Initiative increases support for basic physical science research. His Advanced Energy Initiative is a focused plan to accelerate public investment in promising clean energy technologies. It seeks to leverage development already underway of new energy and efficiency technologies and get them to market faster and in a cost-effective way.
Sometimes though, government can and should take the lead. The President's "20 in 10" plan utilizes a new alternative fuels standard and reforms the auto efficiency standards to reduce the projected demand for gasoline by 20 percent in the next ten years. The President's Executive Order on energy efficiency calls on the federal government to lead by example by achieving government-wide efficiency increases and energy savings. This is an area in which I expect my Department to live up to its name.
The President's Executive Order directs a systems-wide approach to energy consumption in the federal complex - and I am committed to having the Department of Energy play a lead role, not only in support of other agencies in their effort to achieve greater efficiencies, but in having our Department implement new technologies and policies that will make it a model for the entire government and the private sector.
Ultimately, however the transition to a more energy efficient economy will largely happen as a result of changes in the private sector. The marketplace can move faster than government, can accommodate and absorb breakthroughs in technology more quickly and, overall, has better access to information. The government must support private initiatives, maintain a stable legal and regulatory environment and bring people together.
We all have to work together; and there is ample opportunity for us to do so. For example, today I am announcing that, over the next five years, we are making $40 million in funding available to support the work of Energy Efficient Housing Partnership Teams under our Building America Program.
Teams selected by the Department will conduct research and actually implement energy-saving construction practices in new residential homes. Building America homes already constructed use between 40 and 70 percent less energy than their predecessors. This latest grant allows the Department to support private activities already underway and facilitate interaction between the different parts of the home design and construction fields. We're helping them pool their knowledge in a systems-wide way and, by investing in this now - especially the research component - we're helping to enable considerable savings in the future.
All of this is explained in greater detail on the departmental Web site at www.buildingamerica.gov. Our goal is to enable the private sector to produce cost-effective, Net Zero Energy Homes that will produce as much energy as they use each and every year by 2020.
In another example of government and private industry working together, just yesterday I joined with former Michigan Gov. John Engler, now the president of the National Association of Manufacturers, to sign a Memorandum of Understanding committing our two organizations to work together to increase energy efficiency at NAM members' manufacturing plants.
This new partnership expands our efforts to improve the energy efficiency of America's most energy intensive sector - the manufacturing sector. I am fond of saying that the cheapest and most available source of new energy is the energy we waste. That's why we at DOE are always looking for ways to promote greater energy savings. In fact, the Department has already helped America's manufacturers uncover greater efficiencies in their energy use.
In just one year the DOE Energy Saving Teams visited some 200 of the nation's most energy-intensive manufacturing facilities to conduct Energy Savings Assessments. Working with plant personnel, our teams identified opportunities to save energy typically amounting to between five and 15 percent of a plant's total energy use. This translates into the opportunity to save, on average, about $2.5 million per plant annually.
These savings have a significant impact on the overall U.S. economy. They also make an impact on important issues like climate change. Our teams identified opportunities to save over 50 trillion Btus of natural gas - roughly equivalent to the natural gas used in 700,000 American homes. While this sounds like a lot of energy, and it certainly is meaningful, it only represents 0.1% of our nation's annual energy usage. We have much more to do.
The energy used by the American industrial sector surpasses the energy consumed by the entire Japanese economy, meaning the potential for energy savings in this sector alone is tremendous. To put it another way, the projected savings in reduced energy consumption and reduced carbon emissions would be equal to that produced by the State of California in one year. That is significant.
The MOU calls for joint marketing and outreach efforts to reach a greater number of manufacturers - especially small- and medium-sized plants - and establish systems technology improvements capable of delivering and sustaining energy savings over the long term.
We are working together because we have mutually compatible goals. Both the Department and NAM want to move the U.S. toward reducing the energy intensity of our economy by 25 percent by 2017. NAM and its over 11,000 members recognize that improving energy efficiency is good not only for America's energy security; it's good for the bottom line.
It may be helpful to think of this MOU between DOE and NAM as a document that generates a technology deployment: The Department has developed energy saving technologies and, through the MOU, will deploy them to NAM members who can then utilize DOE tools and technologies to improve their energy management.
Industrial efficiency is important. Everything the U.S. can do to increase industrial energy efficiency or divert consumption and production from petroleum-based feedstocks helps enhance energy security. This is another opportunity for the private sector to take the lead.
Last Friday I went down to Loudon, Tennessee for a ribbon-cutting of a new plant that uses corn syrup instead of petroleum feed stocks in its production process. The plant manufactures a chemical called Bio-PDO that can be used in cosmetics, liquid detergents and industrial applications like anti-freeze. The chairman of DuPont told me this development is as significant as the discovery of nylon. From an energy perspective, it's important because the process to make it uses biomass, so it consumes 40 percent less energy versus a petroleum-based equivalent while reducing greenhouse emissions by 20 percent.
As a chemical engineer by training, I understand the complexities involved in the development of the process. It is another significant albeit incremental improvement in our energy security, one that will save the energy equivalent of 15 million gallons of gasoline annually, enough to fuel 27,000 cars for an entire year - but that's just 0.01% of our motor fuels usage.
As energy efficiency improves, companies increase productivity, reduce costs and ultimately enhance their competitive position in today's global marketplace. Our intensive effort to find and achieve savings in the industrial economy provides another opportunity for American technology and skills to lead the world.
Helping developing nations pursue greater energy efficiency will also yield benefits to the U.S. and to the rest of the world. That is why DOE is working to share what we've learned with countries like China and India - two nations whose demand for energy and rate of emissions are increasing in large part due to their rapidly growing manufacturing sectors.
And our efforts are not confined to the industrial sector. The Department is also encouraging energy-efficient changes in the home.
Each fall the Department, in cooperation with the Environmental Protection Agency and the Department of Housing and Urban Development, encourages consumers to change out old incandescent bulbs for new compact fluorescent lamps that have earned the Energy Star seal of approval. In Wisconsin, for example, CFL sales are approaching 1 million annually during the Change a Light campaign. As of 2006, 20 percent of Wisconsin households are using at least one CFL in their lighting fixtures.
The "Change a Light, Change the World" campaign is now in its seventh year and has helped change the energy habits of consumers around the country while saving billions of kilowatt-hours.
We've also been implementing productivity enhancements to the appliance efficiency program. I am proud to say we have met 100 percent of our targets since we committed to a new schedule for them in January 2006. And the Department is hard at work on 9 standards rulemakings affecting 18 products.
By this time next year we will have initiated another 4 rulemakings, affecting at least 5 additional products. This represents a pace substantially more aggressive than at any prior time in our history.
We've also taken internal measures to improve and accelerate the standards-setting process - and I think there are opportunities to greatly expedite the process. In February, we asked Congress for the authority to streamline the rulemaking process and allow DOE to go to a Direct Final Rule for certain products when a clear consensus for a standard exists among manufacturers, efficiency advocates, the government, and other stakeholders. This process could reduce the time required to reach a completed standard by as much as one-third.
All around us we see examples of improvements in energy efficiency - or the potential for improvements -- in areas where the private sector and the government work together. For example, the cost-shared research we conducted with Cree, Inc. - a manufacturer of semiconductors that enhance the value of LED solid-state lighting -- produced a high powered white light LED that set a new record for brightness and efficacy. As you may know, solid state lighting technologies could potentially double the efficiency of today's general lighting systems.
Treating energy efficiency as a resource should bring considerable economic resources to the growing energy efficiency products and services industry. It certainly would help us reduce the projected growth in demand for electricity and natural gas. That in turn would help reduce the number of new power plants from what currently think we will need and, overall, would help Americans save billions of dollars annually on their energy bills. And so, by working together, I think we need to find as many ways as we can to get more with less.
Location: Washington, DC - National Press Club
Media contact(s): Julie Ruggiero, (202) 586-4940