Remarks at the Southeast Industrial Energy Efficiency Summit

Assistant Secretary Alexander Karsner's remarks to the Southeast Industrial Energy Efficiency Summit at Oak Ridge National Laboratory in Oak Ridge, Tennessee

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June 5, 2008

The polar caps are melting. There's a time limit on the exercise. It's not theoretical; it's quantifiable. And so, our solutions shouldn't be theoretical. They also should lean in the zone of quantifiability.

We can displace the sources we seek with new and better technology in a for-profit manner if we enable ourselves to connect with the right policy. And I'm not talking about command and control policy or excess regulation. I'm talking about empowerment of free enterprise to introduce new technologies and retrofits on a scale that is consequential and relevant to the challenges that we have.

And if we think climate change isn't sufficient as a challenge, certainly global geo-political security as we jump from 600 billion dollars a year to 700 billion dollars a year in the amount of money that we export to the five leading nations of the world who send us our petroleum addiction and are hostile to our way of life. Interrupting that cash-flow supply chain is certainly at least as urgent to our economic security, to our national security, to our viability in the long term. And it's in our interest. We don't have to look at this as a defensive thing. It's something we ought to be leaning into with pride.

One of the reports that was written was called The National Petroleum Council's Report: The Hard Truths about Energy. I like to quote this one. It's one of my favorites because the Petroleum Council has been around for a long time, and this one was chaired by none other than Lee Raymond. And Lee Raymond chairing this report at the Petroleum Council had different conclusions for the first time because these reports of being chronically very similar: you drill more, you get more energy, supply catches up with demand, and everything's okay. This is the first time National Petroleum Council said something completely different. That the risks have never been greater to conventional energy production and those risks are escalating and will continue to escalate, that we have an obligation to maximize every molecule of energy from every source including renewable and alternative sources, that we need a carbon policy predictability to offer price signals in the market place for acceleration, and that we had to focus on efficiency as a resource that could be quantified and prioritized and realized across the board.

Not something meritorious to do. Pat us on the head. We turned off the lights. We used a little less energy in the plant this year and curbed production. A resource. Something that we can quantify and monetize as value. The avoided energy rather than the energy consumed. That's where we have to go. Qualify it, capture it, monetize it, and have policy that puts it on an equal basis with the supply side and I'm hopeful that your efforts will inform us on that.

I'm going to salute, in great detail, the leadership of Doug and his colleagues that are here—Jim Quinn and Sandy Glatt—who have really been the arms and legs for Save Energy Now. A really front-loaded effort to engage the private sector and say what can government do to provide the tools and best practices and engagement to ensure good decision making is being made in the private sector and be as helpful as possible.

But the Industrial Program, which at one time was thought to be a corporate giveaway, is now increasingly being understood to be indispensible to bringing us together. I found it unbelievable when people were saying, "Oh they've done enough; they've invented enough; they've got enough R&D 100 Awards; they've helped out enough factories with audits. All the rest of those companies and utilities, they're big boys, they don't need the Industrial Program anymore." And then I looked at the numbers and said, "Let me get this again: 33% of all of our energy use comes from the industrial sector. Any one factory can be as much as a city in terms of consumption. The industrial sector in this country uses more energy than the second leading economy on earth, Japan, and we're ready to vacate the field and say we're done? Every man for himself, every CEO for himself, every company for himself?"

So we rearranged the thinking in a way that was most obvious to a CEO, like Sam Bodman, and it was embraced by the President. That the advanced energy initiative—the things we talked about that change the way we power our homes and offices—included and prioritized efficiency, that it was part-and-parcel of that initiative, and that it had to be the highest priority because almost nothing else matters in modifying and deploying technology if the first thing we're not doing is understanding the characteristics of energy and how we save it through intelligent technology deployment, financing, and practices.

So we funded these industrial assessments centers across 26 universities, got the young people engaged and thinking it through, we funded and leaned into a whole new sector: the data and IT center sector. Oak Ridge has the most efficient, high performance supercomputing IT center in the world, as measured by Lawrence Berkley National Laboratory. And so we reached out to the fastest growing source of energy use, the IT sector, a sector that most states, most regions are trying desperately to attract, that's growing like a wild fire—it's growing here from three megawatts to more than twenty in three short years because high performance computing takes energy. What is high performance computing, but an amplification of the intellectual capital of the nation to problem solve? So it's indispensible. It's the Achilles Heel of where we operate. Interruptions not tolerated. So what do we have to do to be more efficient and use that as a positive canary in a coal mine to lead the way for legacy industries? Doug brought that aboard.

The Industrial Programs reinvigorated its mission and helped us think smarter about how to engage with more agility with all of you all, and we're not done yet. I'm just using that as an example. That's just the start. We're on "receive" mode. We want to understand your dilemmas and figure out how to integrate it into our national portfolio and program effectively to deploy these technologies profitably in a way, in a timeframe, and a scale that's consequential.

Our energy environment is changing in ways that are going to force us to rethink the way we live, but we can do that without curtailing comfort or convenience. We can do that without curtailing our children's capacity to inherit the American dream. But we can only do that with foresight and vision and a proactive approach because, inevitably, we will do these things. But we don't want to do them reactively, because we have to, and our backs are against it and it's too late. We want to do it because this is what we inherited.

Folks with foresight, who came to this country—whether long time ago in old British frigates or whether in the bottom of a boat from Eastern Europe like my grandparents—they came here with foresight and vision. And it was in their DNA—the optimism that they could make a difference. I'll tell you something more, the same founding fathers that talked to us about "pursuit of happiness" as a national creed penned from the same quill that "a penny saved is a penny earned." It hasn't changed. A Btu saved is a Btu earned. A kilowatt hour saved is a kilowatt hour earned. Resourcefulness is the nation that we built. There was nothing about waste in the pioneers that moved west. We can reconnect with the folks that we are.

But we in government can't do it by someone saying, "Well, if Washington would just act." Washington can't act without informed, good citizens telling us the correct policies to connect sufficiency of technology with unconstrained capital. That's the environment we live in. I understand that's why you all are here. So I have a very, very specific ask: we need your partnership. We need this Southeast Industrial Collaborative on Energy Efficiency to work. However much you might be a skeptic, however much you might be an optimist, however much you're currently implementing things, whether you think this is a six year pay back that justifies, whether your CEO won't allow it for more than 24 months: we need you in this collaborative to work together with Doug and his team, with the leadership that they are exercising to galvanize communities around this country, to inform intelligent policy at the right levels of jurisdiction so that we can deploy these technologies. And we can do it. There's nothing standing in the way but our own lack of optimism about coming together and getting it done.

We also need policy that's durable and predictable and out of the hands of Congress and vacillations and keeps everybody from saying, "Why isn't Washington acting?" because we just know what we want: technology neutral, and long-term and carbon weighted and accounting for the externality of security—so our security, our environment, technology neutral, long term. Anything else that they're talking about—cap and trade taxes, whatever—those are manifestations of those characteristics. We are headed there. We are going to price our energy appropriately. That's important.

That's important for you to count on if you say it's not there enough—that it's only technology. You need to anticipate. It will be there, but the price signals alone will not be sufficient to scale solutions in a timeframe that's consequential. And so items like loans guarantees and the expansion of government's balance sheet capacity are the things you need to engage to say, "That's fine, I've got the right price now. That's fine. I'm induced to act. But I would act quicker, and so would other countries and other citizens, if we had this." And the "this" is what you have to help Doug and our team talk about on a forum basis because I guarantee he will be briefing the next Secretary, the next Assistant Secretary, and likely the next President on what needs to happen for that 33% of the economy where the nearest term gain can be had to affect these great challenges. The problems aren't going away; they're getting larger.

It's my privilege to have an opportunity today to compliment him, to embarrass him a little bit in front of his colleagues. I will read you this plaque. "In recognition of his outstanding service in the development of new a public private partnership with the Council on Competitiveness," they're responsible for high performance supercomputing, "with enhanced security innovation and sustainability, leadership and dedication, resulted in renewed engagement of partners who are critical to the department's technology development and deployment goals addressing the great challenges of security and climate change. This partnership plays a significant role in advancing the nation's clean energy agenda for the next decade." I say it and the plaque says it, we are truly grateful for your service.