It is a pleasure to be here to talk with you about what we are doing to improve our nation’s energy security.

I want to hear from you and I look forward to taking your questions but, before we get to that I want to extend my thanks to Amarillo College, West Texas A&M University and the Amarillo Chamber of Commerce for setting up this event.

And, even though he was unable to be with us today, I want to thank your congressman, Mac Thornberry, a good friend of the Department of Energy, for his leadership and his efforts to make America a better place.

I am happy to report to you that our economy is strong and, by almost every indication, getting stronger. 138,000 new jobs were created in April, part of the 2 million generated in the last 12 months.  Unemployment is at 4.7 percent, lower than the average for the 1960s, the 1970s, the 1980s and the 1990s.

The U.S. Gross Domestic Product grew by a healthy 4.8 percent annual rate in the first quarter of 2006 and by 3.5 percent for all of 2005. That is the fastest rate of growth of any major industrialized nation.

Other economic indicators like industrial productivity and consumer confidence also continue to post strong gains. The agreement to extend some of the President’s key tax cuts should keep the economy robust and growing for some time to come.

As we are all keenly aware however, the one sour note in this symphony of good news is the rising cost of gasoline and its effect on family budgets.

This problem did not develop overnight but has been years in the making.  Let me explain why.

Energy fuels the global economy. The demand for oil increases as emerging economies like China and India, as well as our own, continue to grow.

And this… because this means standards of living are rising and people are emerging from poverty… is a good thing.

However, increased demand measured against current supplies drives up the price of crude oil. Political unrest in the world’s oil producing regions that could affect supplies also impacts prices.

Twenty-two percent of U.S. oil production in the Gulf of Mexico has yet to recover from last year’s hurricanes. U.S. refinery capacity remains at less than peak… three refineries are operating at reduced levels of production and others are conducting necessary maintenance that was delayed in the aftermath of Rita and Katrina.

These factors, together with the transition from winter gasoline to summer blends and the phase out of the additive MTBE in favor of ethanol, have combined to tighten the gasoline supply.

As we all learned in Economics 101, tight supply coupled with expansions in demand equal an increase in price.

But the President understands, and I understand, that the realities of economics are of little comfort to families dependent on their cars.  The increase in the price of gasoline has hurt us all.

Energy security is foremost in our minds. The President has proposed a four-point plan to increase our energy security and confront rising prices that begins with making sure consumers are being treated fairly.

He has directed the Department of Justice to work with the Federal Trade Commission and the Department of Energy to conduct inquiries into cheating or illegal manipulation related to current gasoline prices. 

And he wants Congress to rescind certain tax incentives given to the oil industry in last year’s energy bill because the current record price of crude oil is enough of an incentive to explore for and produce new sources of oil.

For our part, the Department of Energy has established a hotline to report possible gouging or price fixing at 1-800-244-3301 and at gaswatch.doe.gov on the Web. 

Second, the President is working to promote greater energy efficiency by asking Congress to make all hybrids and clean diesel vehicles sold this year eligible for federal tax credits by expanding the 2005 Energy Policy Act tax credit. 

He has also asked for the authority to reform the system for setting passenger vehicle fuel economy standards as we have done for SUVs and light trucks.

Third, we are working to boost oil and gas supplies by temporarily deferring deposits to the Strategic Petroleum Reserve to leave more oil on the market.

And the President has asked the EPA administrator to use his authority to grant waivers to relieve local or regional gasoline supply constraints, if needed, and to convene a task force of governors to examine our nation’s system of boutique fuels.            

And we are again asking Congress to authorize environmentally-responsible oil exploration in the frozen Arctic National Wildlife Reserve.

Fourth, and this is where we begin to look to the long-term, is the Advanced Energy Initiative… which the President announced in the State of the Union, and which will help make America more fuel efficient and more energy secure in the years and decades to come.

The AEI calls for a total investment of over $2.1 billion, a 22 percent increase, to accelerate research into energy technologies that hold the greatest promise to transform the way we power our cars, our homes and our businesses.   

We will be investing in the development of cellulosic ethanol, new hybrid battery technologies, hydrogen fuel cell powered cars, solar and wind energy, emissions-free nuclear power and clean coal.

By developing new homegrown transportation fuels, advanced batteries to help hybrids go further, and hydrogen fuel cell vehicles, we can over time significantly reduce our need for imported oil. 

Meeting our goal of making cellulosic ethanol cost competitive by 2012 alone has the potential to eventually displace as much as 30 percent of the nation’s current petroleum use. 

By advancing solar and wind technologies and investing in new nuclear energy power production we can reduce our reliance on fossil fuels to produce electricity. 

New clean coal technology will allow us to utilize America’s greatest energy resource in a new way that results in near-zero emissions and protects our environment. 

We are doing all this by focusing federal R&D spending on key areas -- like biofuels and solar energy -- where we are on the verge of technology breakthroughs that can dramatically improve America’s energy security and keep us on track to meet the President's goal of an 18 percent reduction in greenhouse gas intensity by 2012.

It will be easier to do all this if America can remain the world’s economic and scientific leader.  The U.S. must continue lead the world in research and development of new technologies for the 21st century, particularly in the physical sciences, and compete effectively with other countries to remain at the forefront of innovation. 

That effort begins with the American Competitiveness Initiative, which the President also announced in the State of the Union.

The ACI is a commitment to the future of innovation. It is an increased investment that begins with the Fiscal Year 2007 budget request for a combined $10.66 billion for science research at the Department of Energy’s Office of Science, the National Science Foundation, and the Department of Commerce’s National Institute of Standards and Technology.

This will allow the Department of Energy, for example, to support about 2,600 additional researchers at places like our national labs, the crown jewels of the U.S. scientific community. 

The DOE Office of Science is already the United States’ largest single source of funding for physical science research. We are asking Congress for $4.1 billion for the coming fiscal year… a 14 percent increase in funding and first step toward doubling the budget over 10 years.

These funds will be used to support innovations in high-speed computing, nanotechnology, biotechnology, material science research and to discover the cheap, clean energy sources of the future.

I am old enough to remember the last time America believed its scientific and technological leadership was seriously threatened. It was 1957 and the Soviets had just put Sputnik into orbit.

America responded then by making a serious commitment to the physical sciences that put man on the moon and, incidentally, put me through graduate school. 

We could wait for a new, 21st century Sputnik from China or India or somewhere else to spur us to action. But I don’t think that would be wise. Neither does the President. The time to act is now.

We have the ability to shape our destiny, to use the resources at hand, particularly the power of the American mind, to create a future that is brighter, more productive and more energy secure then the present. I believe we can do and, because this is America, I believe we will do it.

Location:
Amarillo College - Amarillo, Texas

Media contact(s):
Craig Stevens, (202) 586-4940