Thanks, Jane, for the introduction.
I interpret "nuanced remarks" to be a reference to the fact this is a public meeting, and I will be very nuanced in that sense. We'll try to spell out some of the issues, of course, that we -- we are dealing with looking forward to the 2015 agenda.
As Jane mentioned, my colleague, Melanie Kenderdine, who's sitting there, and I contributed to this very fine book in its second edition and on energy security. And Jan Kalicki and Dave Goldwyn, the people who pulled that together, they were always very calm and -- and not pushy at all in terms of meeting deadlines.
I'll talk on four things briefly, because we have, I think, about 15 minutes, and then we'll open it up to Q&A.
But I want to say that the chapter that we wrote in this book was called "Energy Technology and Security," or something approximating that, and it was laid out in a way that I would make some brief comments on.
Its central construct was to lay out what we called energy security challenges then to talk about policy responses to those challenges and then finally, what our representative technology pathways are to address those policy approaches to challenges.
So for example, if one looks at the first challenge in terms of concentration of natural resources and all the implications, then, for example, some of those policy responses to that are fairly obvious: increased domestic oil, check, reduced demand for oil, check, provide alternatives to oil -- I don't have to keep saying "check" every time -- alternative vehicles and drive trains. We are seeing EVs, for example, coming in faster than hybrids did in their -- in the comparable time period, et cetera.
On natural gas, again, domestic gas, exports, working towards, at least, a global market.
A third area put it in terms of concentration of natural resources, were critical elements. You've seen just recently, very recently, how quotas had been lifted on that, because frankly, the attempt to control that market has, in some sense, backfired, both in terms of development of alternatives and, in DOE's case, the establishment of an innovation hub, specifically around the issue of addressing critical elements. So you can see the technologies attached to those are pretty obvious.
What I want to say is I think that's the way, A, we're trying to think about these issues. And B, I think we are making tremendous progress, actually across the board.
And C, as a broader issue -- and this is now part of getting to the issues of 2015 -- as we continue a very, very strong focus on technology development and specifically on the cost reduction of the technologies that we need to meet -- our environmental, our climate and our energy security challenges.
So my first point is that -- I think you all know -- we have, obviously, very robust technology programs at the department. What I want to emphasize is I believe they are central to having the policy developments that we are looking for, because when the costs come down of those technologies, Jane's former colleagues can have a much easier job in terms of addressing the policy issues, be they on the climate or on the energy security side.
I'll just mention, without going into detail now, that the other three overarching security challenges that we used in this chapter where -- climate change as a security issue in addition to being an environmental issue, the potential challenges around nuclear power development, nuclear fuel-cycle development and nonproliferation, and finally, issues around energy infrastructure and supply chains.
In the remainder of my remarks today, I will not go into -- unless there are questions -- the nuclear power and -- and nonproliferation issues, but I will address climate. I will say more about our energy security agenda for 2015, and then on the energy infrastructure side. I'll tell you where we stand on what's called the Quadrennial Energy Review and where we are heading in terms of recommendations for energy infrastructure, resilience and other challenges that we face.
So let me first turn in my limited remarks to climate and give you an update and look forward to 2015 in terms of addressing and implementing the president's Climate Action Plan, the plan that was issued in June of 2013.
That plan has three pillars. One is mitigation, second is adaptation, and third is the international dimension that we need, particularly on the road to Paris.
Mitigation -- well, again, that goes back to a theme I've already touched upon. A big part of that is the technology agenda.
One of our programs, ARPA-E, was created in 2009, and we think it's been very successful. We will be strongly moving forward again with ARPA-E, and today, actually, I'm pleased to we will be announcing the third so-called open solicitation. We want to put out $125 million for new, novel technology ideas across the entire spectrum as long as the technology is, quote, "clean," that is, advances a low-emissions agenda.
These open solicitations -- you might ask, why aren't they done all the time? Well, for one thing, because they generate a lot of applications.
The first -- the first round, the 2009 had well over 3,000 initial submissions for what ended up to be 35 awards. So you could understand, these are a challenge. However, we believe they are crucial in really opening up the aperture to all the good ideas that that may come in.
If you look at the 2009 open solicitation, for example, there was some very innovative work on wind turbines using jet engine-inspired designs. Just a few days ago, one of the initial awards -- perhaps the largest of the initial awards – which happens to be at MIT, where I was at the time – was a novel technology called liquid metal batteries. What they announcement a few days ago was the commercialization of these batteries as utility-scale storage devices. And so that's an example of a brand-new technology that came out in this kind of open solicitation.
In 2012, similarly, an example was sensing and computer hardware that could be in a backpack-sized device that you could walk in and rapidly generate indoor physical and thermal maps of a built structure. So again, a really interesting idea that probably would not have been brought out in the more targeted solicitations that we do.
So we think this is exciting in terms of really generating new technology ideas going forward. But let me also say that this will be a big year for our loan program.
I hope some of you have noticed the change in tone of what's been written on the loan program. For a while, it was Solyndra, Solyndra, Solyndra. Well, it turns out there's $30 billion in play in the loan program. The overall default rate has been 2 percent. Solyndra represents almost two thirds of the default rate in that one project.
But it has paid off in major ways -- utility scale, photovoltaics, CSP, we could go on and on. But what I want to emphasize now is that we have just recently completed our full suite of call for proposals for an additional $40 billion of loan guarantee.
That's $4 billion roughly in renewables and efficiency -- these are set by statute -- $8 billion for fossil technologies that lower emissions, roughly $12 billion for advanced nuclear technologies, and roughly $16 billion for new vehicle technologies, which probably will see more auto suppliers, as opposed to integrated manufacturers, coming forward.
So we already have proposals in for many of those, renewables and fossil. We see strong portfolios -- since you want to make it very clear that we plan to continue to be very forward-leaning, very aggressive in terms of now the deployment side through our loan guarantee program.
A different kind of mitigation push comes from setting efficiency standards. And I want to say that once again, with two hours to spare before New Year's, we met our goal of actually 10 efficiency standards in 2014, double the amount in half the time relative to the previous two years.
We're going to keep running through the tape in this Administration with this, because the cumulative impacts of these through 2030 are projected to be three gigatons of CO2 reduction and nearly a half a trillion dollars of consumer energy savings by the accumulation of these many efficiency standards. So, that's another area where you can expect to see very, very strong focus in this -- in this coming year.
On adaptation, I'll come back to that a little bit when I discuss the Quadrennial Energy Review.
Let me just say a word about international cooperation. And again, we can come back to this more in the questions. But obviously, the joint announcement by Presidents Obama and Xi in Beijing really changed a lot of the discussion in terms of international collaboration.
This year, we will be working hard with the Chinese in terms of moving forward on the joint commitments for the Department of Energy -- and again, it goes back to technology. We agreed to expand in scope -- for example, adding a strong energy water nexus focus -- and to expand in scale our direct technology cooperation with the Chinese, including a commitment to move forward jointly.
And we will invite other international partners to really push the edge in terms of understanding carbon dioxide sequestration in a new and much expanded approach to instrumentation, to understanding all the issues one needs to know about deep CO2 sequestration to allow, for example, the appropriate regulatory basis to be laid.
So that's just an example of a very important area in international collaboration. The other one, I'll mention. It's quite fresh.
Yesterday, we had so-called high-level economic dialogue with Mexico. And that, in turn, followed a trilateral in December with Mexico and Canada in terms of -- in terms of energy. It's been a very, very, very positive discussion.
One of the things for going forward, I see my colleague, Adam Sieminski, out there from EIA. Adam is leading one of the agreed-to trusts in a trilateral context, actually, which is data and energy infrastructure mapping integration. Right now, we don't have very good data that comes across the three countries, and sometimes, when we do have the data, it doesn't agree.
So getting data integration, I think -- we think, is a very important foundational step. That's an example of a focus. But we will also have a very strong focus on infrastructure development, integrated infrastructure development. And with Mexico, for example, that will probably have have a particularly strong focus on electricity integration.
There's more than I think most of us might have realized already in terms of electricity going back and forth across the border with a seasonal -- a seasonal footprint. As the case with Canada, for example, where we import so much hydro -- but that's an example of going forward.
And Mexico will be hosting in March the Energy and Climate Partnership with the Americas, a multilateral context for the Western Hemisphere. And we think this is very important, both for, again, our relationships with Mexico and the United States, but also looking at what is very clearly in Latin America a lot of progressive movement on the climate front on the way to Paris.
And of course, I have said at the beginning that the Mexican energy reform is really extremely ambitious. A lot of the focus in the discussion publicly tends to be in the hydrocarbon sector, but I do want to emphasize that reform is equally ambitious in the electricity sector in Mexico. And to the extent to which those market structures and regulatory structures become much more in sync with those in the United States, for example, collaboration and energy integration will just be so much easier.
So that's that's a few of the areas on the road to Paris that we will be looking at in items of climate.
In terms of energy security, and I think I probably don't have too much time, let me say that a major focus for this year will be continuing a discussion, set of activities, developed under the G7-context umbrella.
It's a G7 activity in partnership with the European Commission. I'll just focus on one piece of it, a very important piece. The issues that were clearly put on the table with the Ukraine situation looking at European -- and particularly European energy security.
But the first point to make is when we say it's European energy security, we really mean it's the collective energy security of allies and friends. And so even if some of us may be tempted to have a complacent view of energy security in the United States because of our production, the fact is we have a serious interest in the broader energy security issue with our allies and friends. It has huge geopolitical implications for us, and so that's a discussion that we are very, very deep into.
Part of it was presenting an updated view of energy security. It's not just about diversity of oil supply or natural gas supply. It involves many issues, including market structures -- and we could go on and on substitution possible, et cetera.
But what we tackled so far were the difficult issues of things like helping Ukraine face the winter, et cetera. And that will continue, but this year, frankly, a harder issue we are due to report onto the G7 Leader Summit, and that is a real intermediate to long-term plan for integrated collective energy security. And that gets into some very fundamental policy issues in different countries, but that will be a big agenda item for this year.
Finally, let me just say a few words on the Quadrennial Energy Review. Probably first, I have to say a few words about the Quadrennial Energy Review. Some of you are familiar, and some of you are not.
This is an Administration-wide effort that is looking to weave together all of the equities and threads of an energy policy across the government. This first year, we have taken the first of the quadrennial -- quadrennial to us is one plus one plus one plus one. And in the first one, we are focusing on energy infrastructure -- transmission, storage and distribution of energy. That's already a pretty big -- it's a pretty big bite, to be honest, but clearly at least somewhat restricted.
The Department of Energy, through the Energy Policy and Systems Analysis Office, which I referred earlier to Melanie, which she heads, is really the executive secretariat for this government-wide effort. It's a major analytical effort.
Let me just say a few of the things: We are looking to February as the time for getting out this first installment. It will have a lot of information about the situation of energy infrastructure in our country and also in the North American context, but it will also move on to make recommendations about what are some of the issues we have to address.
I'm not going to go into this in great detail, but let me tell you about four areas that will be very much a part of the agenda in the QER and for implementing in the rest of 2015 and beyond.
One is, first of all you might say narrowly, but our Petroleum Reserve really needs modernization, certainly in a variety of physical elements. And partly because of the changed production profile in the United States, the different geography of producing oil and gas has led to a number of distribution issues that we partially uncovered by doing a test sale from the Petroleum Reserve earlier this year. We will be laying out the program that one needs to address the Petroleum Reserve and the distributional capabilities of the Petroleum Reserve.
Another big area will be the smart grid, by which I just mean in general the electricity delivery system, and particularly its integration with information technology, et cetera. Obviously, many reasons to drive that. For example, large-scale remote renewables integration into our system, but then again, on the other side of the T and D system, distributed generation capabilities, and how we manage all of these in a reliable, resilient, and robust system is clearly a major focus. We'll have some recommendations there.
Another is related to the adaptation question that I skipped over on the Climate Action Plan, again, resilience, recovery, safety of energy structure. A lot of that will involve states working with states and private sector, and we will be, again, moving that forward.
It also includes addressing the infrastructure problems that were pointed out in the Administration's methane strategy, the methane emissions as a climate challenge, but of course, also methane missions on the distribution side as a safety challenge, because we have seen, unfortunately, some of the problems there with literally hundred year-old pipe in some of our cities and major challenges. So we will be making some recommendations there.
And finally -- then I'll end -- is in doing this Quadrennial Energy Review, what has come into much sharper focus for us, at least, is the question of not just the energy infrastructure, per se -- the pipes and wires that move electricity or fuels -- but also what we might term the "shared infrastructures," the infrastructures that move many, many commodities, including energy.
The poster child, of course, of that in the -- in the press now for quite a while has been railroads and the enormous increase by moving oil by rail. But again, I'm sure many in this room are quite aware of the enormous congestion in moving a whole variety of commodities.
Right now, we have issues of coal in the upper Midwest because of railroad congestion. So that's one big example, and also a case where we had data issues, inadequate data, frankly, for understanding these flows and what they mean for policymakers.
But I have to admit, I've learned a lot about other shared infrastructures. I'll just mention one other one -- inland waterways, that are in terrible, terrible shape and enormously important in moving lots of commodities.
So we will be also recommending a variety of approaches to address these shared infrastructures, which are important for energy but are important for how our whole economy works coming together.
So that gives you, hopefully, a flavor. These are some of the big-ticket items that we will have in the energy and climate realm for 2015.
Thank you.