James L. Jones, USMC (Ret.) Naperville, Illinois Chamber of Commerce

3/14/08


Thank you for that kind introduction. I would like to talk with you today about one of the great challenges facing this country - as well as the rest of the world. The decisions our country and the rest of the world make in the next few years on energy will be with us for generations to come.

Our national energy policy, such as it is, is not understood by the public, and it's reactive. We also have a stovepipe approach to energy that hinders access to all the supplies we need. It fails to capitalize adequately on promising technologies to get more energy while improving the environment. We need a strategic energy vision that sets us on the road to a comprehensive, integrated policy. That effort should match the commitment of Dwight Eisenhower and subsequent U.S. presidents to the national highway system.

Over the past year, the Institute has taken on a mission that is three-fold:  (1) to build a needed consensus for a national energy policy, (2) to educate the public about critical energy issues, and (3) to begin to convince the next generation of national leaders that the United States cannot afford to be seen as being part of the problem. We must be part of the solution. Leadership demands this.

These are not easy tasks, but through a sustained effort, the engagement of the many and divergent energy stakeholders, and considerable resources, I am confident that American energy security and an internationally responsible leadership role on energy issues is an achievable goal.

When I retired last year after 40 years in the Marine Corps, I wanted to stay engaged in national security - without having to go back to the Pentagon. The energy challenge is broad:  it is a matter of national security; it is an issue that impacts business; and - most importantly - it is an issue that affects our families. American families are feeling their budgets squeezed by higher prices at the pump and larger utility bills.

Energy prices are at or near record levels. But the solutions require a larger focus. We are at a crossroads when it comes to our energy and national security, which are evermore intertwined as we move further into the 21st Century. In many ways, our approach to energy and national security reflects the realities of the last century.

For a while, we had a unipolar 20th Century as the United States became a tremendous military power. The Cold War brought us a bipolar world. The rules of engagement were easy to understand. We had institutions to deal effectively with that threat. We even had a name for it - the Iron Curtain. Then we flirted with a multipolar world late in the 20th Century.

Now on national security and energy, we're in a complex, new century of asymmetrical threats. Some nations pose little military threat to us, but they use energy as a political and economic weapon. Non-state actors, such as African insurgents, disrupt our energy flows. Against an ideology that despises our way of life, we must ensure reliable, diverse, and clean supplies of energy. The economic and political security of families and nations are at stake.

Energy is also an issue that impacts our economy and the environment.  Some people say that to answer the energy challenge, we must choose between developing necessary energy supplies and protecting the environment.  I believe we can - and must - address both.  To do this, we must build up our energy infrastructure to meet tomorrow's needs while also engaging in environmentally responsible energy exploration.  At the end of the day, we're really missing something if we don't see energy as a tremendous opportunity for American leadership in a changing world. Therefore, international energy security is a viable proposition for us to care about from now on. The question is where do we want the world to be on energy in 2030? Experts expect global energy demand is expected to grow 57 percent between now and then.

The mission ahead is clear and compelling.  The United States needs to adopt a comprehensive energy strategy that is understandable, rational, and achievable.  This strategy must ensure our nation has the diverse, affordable, and clean supplies of energy necessary to sustain economic prosperity, create more American jobs, enhance national security, and protect the environment.

Developing the right strategy to a lower carbon future is a huge undertaking. To be successful, we must be open-minded - open to new ideas, new methods, and new technology.  To be open minded also means we must be inclusive and open to the ideas of all energy and environmental stakeholders.

Most importantly, success depends on all participants being willing to put the nation's interests first and foremost.  Energy is a vital national issue.  Government, industry, the scientific community, and each one of us must step back, look at the bigger picture, and do what's in the best interest of the United States.

At the Institute for 21st Century Energy, we believe an affordable, diverse, and secure energy supply is fundamental to our security and the expansion of economic opportunity and prosperity.  We are equally convinced that this energy can be secured while making progress in improving environmental quality and addressing the risk of climate change. The debate is not about energy versus the environment. It's about how to unleash the promise of American technology to get beyond the either/or mindset.

Let me talk for a moment about climate change - a key aspect of energy security.  There are more divergent points of view on the issue of climate than on any other issue I have confronted in my career.  The Institute for 21st Century Energy is not challenging climate change science or the consequences of this phenomenon. The earth is warming and that we must craft common-sense solutions to address it.  We believe that action should be taken in three areas:

Efficiency - We must encourage and require stronger action by individuals, businesses, and governments to use energy more efficiently - in buildings, appliances, consumer products, transportation and power generation.

Technology - We need aggressive technological innovation, and we should implement all mature technology.  Government and business must also invest in new technologies that expand alternative energy and allow us to use traditional sources more cleanly.  The Energy Institute caught a glimpse of the future in January when we hosted an event talking about the next generation of automobiles.  There's exciting research being done on plug-in hybrids, all-electric cars, fuel cell vehicles, and biofuels.  These cars are only a few years, not decades, away from being on the market.  This is but one example of how industry is addressing greenhouse gas emissions and climate change. Among the many great reasons we should be excited about is that oil imports account for about one third of our national trade deficit. We need caution to ensure we clearly think through the implications of well-intentioned policies. For example, corn-based ethanol constitutes 3% of the U.S. gasoline supply, but it has contributed to a 40% rise in food prices. That's why we need to fully develop cellulosic ethanol.

Global Action - We must work towards solutions that include all major economies. Acting alone will not solve the problem and it will put U.S. business at a global disadvantage.  Our companies and workers deserve a level playing field.  It does us no good to pretend that once the United States moves, the rest of the world will rush to follow.  We must work cooperatively with other nations, with the U.S. playing an active role, to foster a common agreement to reach a common goal. Oil companies should view themselves as energy companies and play a broader role in efforts to find alternatives to traditional fuel and power.

A front-page article in the Washington Post last week said recent scientific studies conclude "the world must bring carbon emissions down to near zero to keep temperatures from rising further."  Zero, or near zero, emissions is rather radical.  But the Senate is poised to vote in June on legislation that would reduce U.S. emissions by 70% by 2050.  Senators Clinton and Obama want an 80% cut, and John McCain supports a 60% reduction by mid-century.

When we hear these statistics, we tend to think they don't pertain to us as individuals, or they're something we can't do anything about.  But consider these facts:  40% of carbon dioxide emissions come from oil, and oil provides 98% of our transportation fuel.  When a gallon of gasoline is burned, it produces almost 20 pounds of carbon dioxide.  So traveling to and from this meeting, we put approximately 20 pounds of CO₂ in the air.

The American people are taking notice…and taking action.  Last year alone, we switched over 126 million incandescent light bulbs to energy efficient Compact Fluorescent Lights, and purchased over 300,000 hybrid automobiles.  This proves that good energy policy begins with consumers making personal choices that are good for themselves and their families. These same consequences should expand their passion for energy conservation and alternatives by educating others to include our international leadership.

I said a moment ago that one of our missions is to build a consensus for the adoption of a common-sense national energy policy.  We're doing this in the form of a report that we hope will serve as a blueprint for the 44th President of the United States and his or her Administration.  We will issue this report early this summer in time to influence the political party platforms, and we'll issue copies to all members of Congress and state governors - and to all Chambers of Commerce at home and around the world.

While I can't stand here today and tell you exactly what we will be recommending.  We're still sorting through the issues, and we welcome any ideas or input you may have.  But I can tell you something about the issues we're addressing:

Global demand for energy - The global economy is expected to increase approximately 4% annually, or 160% between now and 2030.  To fuel this growing global economy, world energy consumption is projected to increase by 57%, with the largest projected increase in the developing world, led by explosive economic growth in China and India.

Energy supply and demand - Worldwide energy use is increasing twice as fast as energy production, so we have a big challenge ahead of us. Simply put, energy supplies will fall short of demand, meaning higher prices. We must develop a plan to deal with this gap between demand and supply. We can address this gap through technology, efficiency, expansion of existing sources, and developing alternative forms of energy. We must take advantage of all sources of energy, including the continued use of fossil fuels, for at least the foreseeable future. There is no single solution to providing adequate supplies of energy - we must rely on all possible sources.

Energy and the environment - We cannot have a realistic energy strategy without addressing the environment. We need a purposeful and rational approach, not a hysterical one, to manage the risk of climate change. And it must be global in scope. It is part of our leadership role in the world.

Energy technology - Technology is the key to finding solutions. We must focus on the development and application of clean energy technologies at home and abroad-including nuclear power. And not just alternative sources, but technologies that allow us to continue to tap and use, in an environmentally sound manner, the tremendous reserves of oil, coal, and gas that exist domestically and around the globe. We will include a comprehensive look at the state of our technologies as they relate to all formers of energy sources.

Energy infrastructure - Energy infrastructure is every bit as important as energy supply.  As the demand for energy grows and greater supplies are needed, we must ensure we have an adequate infrastructure to produce, transport, deliver, and store that energy.  In the United States, the existing infrastructure, as extensive as it is, is decaying and not adequate to meet future demands. It takes years to plan and build infrastructure - and we're not making the investment today to provide for the needs of tomorrow.

This is a huge issue and, frankly, we at the Institute have not figured out yet how to tackle it.  Consider the magnitude of infrastructure this country depends upon - 800,000 oil and natural gas wells, over 700 oil refineries, 25,000 wind turbines, 55,000 miles of oil pipelines, and 200,000 miles of power transmission lines. We need a plan to modernize, expand, and protect this country's infrastructure.

Energy security - This term is often used and is just as often misunderstood.  Energy security means ensuring that families, businesses, and the government have reliable access to affordable, abundant, and clean supplies of energy.

Energy security does not mean "energy independence," although this is a popular slogan used by our politicians and it makes a great bumper sticker. "Energy independence" is a fantasy.  We operate in a global economy and an international energy market. Thinking in terms of energy interdependence will lead to sounder and more realistic policies.

Energy issues must be viewed in a global context.  What happens in China, India, Russia, and other growing economies will have a profound impact on us and our energy policies.  At the Institute, we have several international components of our program.  Later this month, for example, we're holding an event with a delegation of Japanese businessmen to discuss climate change, and we've put together an exciting program for an executive-level forum in Beijing this May with the Chinese government. We're also working with organizations in the Gulf region, Europe, and South America.

Energy education - Finally, we must develop and implement strategies to better inform the public and our policymakers about America's energy needs and choices.  We have to change the terms of the energy debate in our country - make it more understandable, broaden and deepen it, and elevate it with the facts. We can no longer base critical policy decisions on supposition, contradiction, and ignorance.

The Institute for 21st Century Energy or the U.S. Chamber of Commerce cannot solve this problem alone. We welcome your ideas or views you may want to share. What are the most important things you believe the country should be doing to make itself energy secure, to strengthen our economy with the affordable fuel and power we must have, and to make a genuine contribution to a cleaner environment?

All I ask and suggest is that in presenting your ideas, you make sure you have considered the trade-offs, the costs, and the feasibility of what it is you are suggesting. We don't see enough of that in Washington or on the campaign trail. We all need to bring more facts, more reality, and more good American common sense to this critical challenge facing our future. I look forward to any input you wish to share during Questions and Answers, or by contacting us through our website - www.energyxxi.org.

If you really want to help us make a comprehensive change, join us in creating a new direction in energy policy. This is not without costs and we need to raise the dollars necessary to keep our word going forward. For our contact details and further information, please see me or Institute staff that are here today - Jonathan Jackson and Marty Coyne.

Let me conclude on an optimistic note. America has an exciting opportunity to lead the world to innovative solutions that would spur economic growth and protect the environment.  We have the opportunity to be the champion of new technologies that foster greater energy efficiency, cleaner use of traditional energy sources, and the development of viable alternatives.  Now is the time for government, industry, the scientific community, and individuals to come together to solve these challenges and for the United States to once again show its greatness. I think Tom Brokaw had it right when he called our World War II heroes the Greatest Generation. By answering the clarion call we face on energy and national security, we can show that we're the next greatest generation.

Thank you very much. With that, I'll answer any questions you may have.

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