2nd German American Energy Conference (March 22, 2010)

2nd German American Energy Conference
The Impact of Obama’s Energy Policy on the Development of the
Sustainable Technologies Market in the USA
Berlin, March 22, 2010
Ambassador Philip D. Murphy

Minister Brüderle,
Dr. Ammon,
Dr. Wansleben,
Dr. Schnappauf,
Herr Jung,
Botschafter Morningstar,

Bei den ersten Deutsch-Amerikanischen Energietagen letztes Jahr herrschte großer Optimismus.   Ein neuer amerikanischer Präsident hatte gerade sein Amt angetreten.   Ein amerikanischer Präsident, der klar sagte, wie wichtig seiner Regierung das globale Klima ist.   Der ebenso klar sagte, dass man die Wirtschaftskrise nicht als Entschuldigung nehmen könne, um Investitionen in saubere, erneuerbare Energien zu verzögern.   Grundlegende Elemente der Energieagenda von Präsident Obama sind in das Konjunkturgesetz (American Recovery and Reinvestment Act of 2009) eingeflossen. 

Diese Konferenz bietet eine gute Gelegenheit, den Fortschritt zu messen – und es hat wirkliche Fortschritte gegeben.   Es gibt Personen, die meinen, dass unser neuer Präsident bei dem einen oder anderen Problem nicht schnell genug handelt.   Aber wir sind wirklich ein ganzes Stück vorangekommen.

[There was great optimism last year at the first meeting of the German American Energy Conference.   A new American President had just been inaugurated – an American President who was unequivocal about the importance his administration would attach to global climate change; and an American President who was also unequivocal about his conviction that the economic downturn could not be used as an excuse to slow investment in clean, renewable energy.   Key elements of President Obama’s energy agenda were built into the American Recovery and Reinvestment Act of 2009. 

This conference is an excellent way to measure the progress that has been made – and progress has been made.  Despite what some may say who believe that our new President has not moved fast enough on this and other challenges, we have come a long way. ]

The reason we have indeed come so far, so fast is because of the strong commitment of our President.  President Obama is convinced that the United States must build a clean energy economy if it hopes to remain at the forefront.  He believes that to truly transform our economy, we must make clean, renewable energy profitable.  With his leadership, we are determined to create a sustainable clean energy economy.  Now that the health reform legislation has been passed, I believe we can expect that Congress will now be able to focus more attention but allow me to document some of the progress that has been made.

We have renewed American leadership in international climate negotiations and the development of clean, renewable energy.   The International Renewable Energy Agency, also known as IRENA, was established last January to lead a global  effort to develop renewable energy  share technology between the developed and developing worlds.  In June, the United States became a member.  With more than 140 nations as signatories, IRENA will help ensure maximum use of  global resources, especially to respond  to the needs of the developing world.  Germany, which to its credit, was a driving force behind IRENA’s establishment, will host IRENA’s innovation and technology center in Bonn. We thank Germany for its strong leadership in this area.

Then last December in Copenhagen, for the first time in history, the world’s major economies came together and embraced their responsibility to take action to confront the global threat of climate change.  They joined an international effort to provide financing to help developing countries, particularly the poorest and most vulnerable, adapt to climate change.  That was a meaningful and unprecedented step forward in international climate negotiations.  The Copenhagen Accord is a critically important first step.  It helps to ensure a level international playing field where all major emitters – including China and India – take the necessary steps to move to a clean energy economy.  It is important that we build on that momentum.

President Obama also went to Copenhagen with an ambitious target to reduce U.S. emissions.    Our  goal of reducing  reduce carbon emissions by more than 80 percent by 2050 will be achieved by addressing supply and demand by implementing  new renewable energy technologies and improving  existing technologies.

A lasting lesson from the recent economic crisis is that business as usual is not sustainable.   Clean, renewable sources of energy will be one of the growth industries of the 21st century.   The jobs of tomorrow will be jobs in that sector.   The energy components of the Recovery Act represent the largest single investment in clean energy in American history.  The Obama Administration is taking steps to create and support a thriving clean energy industry – an industry, for example, that makes solar panels, builds wind turbines, and produces cutting-edge batteries for fuel-efficient cars and trucks.  Every state in the country is starting to take advantage of these opportunities and this effort is transforming the way Americans live and work.  Americans are starting to get out of their cars and take public transportation.  Light rail and high speed rail systems are being built all over the country.  New and innovative renewable energy systems are replacing our old reliance on fossil fuel.  For example, thanks in part to a Recovery Act grant, A123 Systems is building a new plant in Michigan that will increase the company’s manufacturing capacity to supply 24,000 plug-in hybrid electric vehicles with battery systems.

We are also making large investments in biofuels research, so that more Americans can start filling up their cars and trucks with cleaner, American-grown fuels 

Our energy and climate policies focus on using incentives and regulations to stimulate domestic demand for clean energy and providing robust support for clean energy technology manufacturing and innovation.  The United States continues to rely on foreign manufactured clean technology products.  Several recent reports document that Asia’s “clean technology tigers” – China, Japan, and South Korea – are moving ahead of both the United States and Germany in clean technology manufacturing.  We are aware that while we are moving fast, countries like China are moving even faster and are very aggressive about keeping clean energy jobs in their own countries.   The United States cannot afford to spin its wheels while the rest of the world speeds ahead.  

We need to address the barriers to the widespread commercialization of clean energy technologies in our economies.  These include high capital costs; a lack of enabling infrastructure, such as transmission lines and storage for solar and wind power; historically low levels of publicly funded R&D; low levels of privately funded R&D due to intellectual property concerns and spillover risks; and low to nonexistent competitive product differentiation in the energy sector.  Emerging technologies compete with well established incumbent technologies primarily on the basis of price alone.  As a result, the energy industry has remained one of the least innovative industries.  Several dominant core technologies are over a century old. 

Public sector investments in new technologies have traditionally played a pivotal role in
supporting emerging industries and catalyzing further private sector investment.  The U.S. Defense Department’s procurement of microchips in the 1950s facilitated the technology’s market penetration and dramatically reduced its cost. Today’s vibrant information technology sector exists in large part because of early and sustained public investments in R&D, computer science, infrastructure, and the procurement of new technologies. Government investment was also crucial for the development of agriculture, railroads, radios, the Internet, aerospace, and pharmaceuticals.  Public investments have spurred the creation of clean technologies in past decades. Prior U.S.
investments resulted in the invention of nuclear, wind, and solar energy technologies.

In the energy sector, there are many technologies at hand to begin a transition to a low-carbon economy but, over the long term, we will need new breakthroughs to make the steep reductions in greenhouse gas emissions we need and to be competitive in the global energy sector.   The Recovery Act gave the Department of Energy significant new research funding.   In the past year, it launched a broad research strategy which includes three new approaches to marshal the nation’s brightest minds to accelerate energy innovation: 
• First, Energy Frontier Research Centers are multi-year, multi-investigator scientific collaborations focused on overcoming known hurdles in basic science. 
• The Advanced Research Projects Agency-Energy or ARPA-E uses an entrepreneurial funding model to explore potentially transformative technologies, the boldest and best ideas, that are too risky for industry to fund..   
• And finally, Innovation Hubs.  The Hubs are modeled after MIT’s Radiation Laboratory, which developed radar during World War II, and Bell Laboratories, which invented and developed the transistor.   The Hubs establish teams to work on priority technology challenges so that ideas can be quickly commercialized.  These larger, integrated teams can accomplish more – and faster – than researchers working separately. 

In the near and medium term, however, energy efficiency is one of the lowest cost options for reducing US carbon emissions.   It is as Steven Chu, our Nobel Prize winning Secretary of Energy, says the low-hanging fruit in the energy equation.   In the area of transportation, carbon composite materials are being use to build lighter aircraft to reduce fuel consumption.   Similar advances are being implemented in the automobile industry.

The energy used to power and heat buildings accounts for 40% of energy use in the United States.   Increased deployment of energy efficient technologies in buildings could reduce energy use significantly.  The greatest gains can obviously be realized in new construction.  Energy savings of up to 80% are possible. 

Our new Embassy on Pariser Platz was designed with several green features.  Through the use of sustainable building materials, resource-saving automation and sensor technology, efficient heating and cooling systems, and the rooftop gardens, we have a green footprint.  The Embassy and all five Consulates participate in the State Department’s League of Green Embassies program which has grown to 46 Embassies worldwide in just two years..  Accordingly at Mission Germany, we have formed a “Green Team.”   Its members come from all Embassy departments and include our management and technical staff.    One suggestion they came up with to reduce fuel consumption in transportation modes was the introduction of official government bikes for employee use to get to and from official meetings.  I have instituted group runs through the Tiergarten and wouldn’t mind cycling to work from Dahlem if my security detail agrees – and if springtime ever comes to Berlin.  

We even have a team of junior “green” Ambassadors.  Just last week, my wife Tammy and I hosted a reception for several young German alumni of State Department exchange programs.  They were chosen because of their environmental consciousness, their concern about the consequences of climate change and their willingness to take a proactive role in offsetting those effects.

That is a very brief overview of our accomplishments in the past year in the area of climate change and the transformation of the energy economy.  It is clear that we have much further to go.  

As I said earlier, we also need to move ahead with the process of implementing the Copenhagen Accord.  That progress will facilitate negotiations required to reach a new treaty as we prepare for the COP in Cancun, Mexico at the end of this year.

Also on the agenda for the coming year in the United States is comprehensive energy and climate legislation.  The Obama administration is focused on building areas of agreement to support a bipartisan energy and climate bill.   Earlier this month, the President met with congressional Republican leaders.  Senators Kerry, Lieberman, and Graham are currently crafting a climate and energy proposal that would mandate a  25 percent cut in  U.S. electricity demand by 2025 to be met with a combination of efficiency, renewable energy, nuclear power and fossil fuel generation that utilizes carbon dioxide capture and storage technology.

In a recent energy industry meeting White House economic adviser Lawrence Summers stressed President Barack Obama's commitment to passage of comprehensive energy legislation.   He said – and anything Larry Summers says, I accord the highest respect – "If ever there was an issue where we should move from either/or to both/and, I would suggest it is with energy.”  Unquote.

In the United States, within a few short years, we will double our wind and solar renewables by 2012.  Political will is also a renewable resource, as my good friend Al Gore said in his Nobel Lecture in December 2007. 

Die Vereinigten Staaten und Deutschland sind führend auf dem Gebiet der energiesparenden Technologien und erneuerbaren Energien.   Um erfolgreich eine Weltwirtschaft aufzubauen, die auf sauberer Energie basiert, müssen wir die Last der Tagespolitik überwinden.   Wir dürfen uns nicht auf die Bereiche konzentrieren, bei denen wir unterschiedlicher Meinung sind, sondern auf die großen Bereiche, wo wir uns einig sind.   Diese jährliche Konferenz bietet eine wunderbare Gelegenheit, um unseren gemeinsamen politischen Willen zu demonstrieren.   Wir müssen bei den vielen Initiativen und Projekten, an denen wir gemeinsam arbeiten, den Schwung aufrechterhalten.   Wir müssen auch neue Initiativen und Projekte anstoßen, um diese große Herausforderung unserer Zeit zu bewältigen.  

Vielen Dank für Ihre Aufmerksamkeit. 

[The U.S. and Germany are leaders in the fields of energy efficiency technologies and renewable energy.  To be successful in building a clean energy global economy, we must overcome the weight of our own politics and focus not on areas of disagreement, but broad areas of agreement.  This annual conference is a wonderful way to demonstrate our shared political will, to keep up the momentum on shared initiatives and projects, and to jumpstart new ones to meet this great challenge of our time.  

Thank you for your attention.]