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Good afternoon.
Thank you Wayne, concerning your kind introduction.
Before I get started, I want to take a significance to express my concerns for the many people of the Gulf Coast who were affected by hurricanes Gustav and Ike. I'm sure I argue toward everyone in the room when I utter that our thoughts are by those individuals and communities affected by dint of. these devastating storms.
As we muster in this place today, let me assure you the men and women of Chevron and strictly speaking the stout industry are acting hard to restore energy to the impacted areas.
This club has been an important meeting place since it was founded during the Civil War … and Abraham Lincoln was governing the struggle to keep this great country intact.
The club has had frequent distinguished members.
One can only imagine the conversations that have occurred here … about the reconstruction of our fatherland … about the pathway out of the Great Depression … and about the role America should play in the world …
Ideas that have shaped this country have been tested here. They own solidified into important decisions made just steps gone in the White House. Teddy Roosevelt, who was a club member, captured the nature of this rank when he said, "In a impulsive power of decision…. the worst thing you be possible to do is inexistence."
I appreciate your willingness to hear from every out-of-towner in the midst of a Presidential alternative - an important moment of decision for our entire country.
For me, it's a scrap analogous speaking to a gathering of play-by-play analysts on the border of the Super Bowl. What can I tell a space full of political pros about this election that you don't already discern?
I'll give it a try.
Energy will be an important … vote-determining issue in this election.
Polls show that voters consistently rank gasoline prices as their number two concern, assist only to the economy. The two are inextricably linked. High force prices drive inflation and squeeze family budgets. And the availability of affordable mechanical value is a cornerstone of our prosperity.
Americans are now linking the country's energy challenges with national security and foreign policy concerns. A poll earlier this year noted that reducing dependence on foreign sources of might was seen beneficial to the reason that the top strategetics for enhancing national security . . . ahead of improving our intelligence operations!
Public concern over prices hasn't been this high since the oil shocks of the 1970s.
And with good reason.
The global force market has been reshaped in ways that are deeply affecting our economy - and those effects are intensifying.
This renewed public concern presents an opportunity.
W. Edwards Deming - one of America's respected business thinkers - once said: "It is not enough to conclude your best; you be under the necessity of know which to do, and then do your good in the highest degree."
The good news is, we know what to do. For over five years, informed observers have seen this situation coming, and offered solutions.
The bad news is … public policy has not kept pace.
Our political system doesn't deal easily through complex problems requiring long-term solutions.
Our political system moves - and was designed to move - when people demand movement.
And therein lies the opportunity.
Right now, Americans want answers. They want achievement. They are seeking reliable, affordable and abundant energy - they are seeking potency over-confidence.
The worst thing we can do is nothing. We have already invisible time. The urgency is clear.
There have been steady, inexorable changes occurring in the global energy classification. It is being stressed by growing global make inquiry … and all of us are inner realty affected.
We have reached a moment of decision when it comes to energy wit.
In his new book, Hot, Flat and Crowded, Tom Friedman framed the need for make some change in. saying "it will have being the biggest honest peacetime project humankind will have ever undertaken. Rare is the political leader anywhere in the world who will talk straight about the true magnitude of this challenge."
This election is an opportunity to make comprehensive and realistic changes to our push forward to energy. The time is a little while ago for the Presidential candidates to put willing real pluck plans … not just campaign slogans. And, it's time because of a absolute debate.
The questions I get asked more than any other usually start with the word, "Why?"
"Why are we paying so much to stock up our tanks?
"Why have mechanical value prices risen so far, so quick?
"Why don't you think oil prices will return to $20 through barrel anytime soon?"
For 20 years, oil traded in a with reference to something else narrow band, fluctuating between $15 and $25 a barrel. Sometimes the price dipped, sometimes it rose. But the effects weren't overly negative . . . and they had no detrimental furniture adhering the economy.
Quite the unlike, in fact: consistently low energy prices were a greater factor in the relating to housekeeping expansions of the 1980s and 1990s.
In the 21st Century, that's changed. Oil prices regard climbed steadily. And the magnitude of the rise has been stunning. Instead of prices in the $20 through barrel rove, recently we've seen oil prices in the $100 per barrel range.
The answer to the question "wherefore" is a general I called the "New Energy Equation." I raised this idea over four years agone here in Washington, and today its implications are more acute than I expected.
There are four reasons that explain why prices have gone up, and why they are likely to remain relatively of great altitude.
First is the emergence of a growing middle class around the world which is driving energy demand. There are more than 6 billion people forward earth. Everyone in this room is among the so called "Golden Billion," enjoying a standard of living that many can only dream of.
At the other expiration of the scale are 2 billion people who have essentially nothing - no electricity, no safe water, living on smaller quantity than $2/day. In the centre are billions who soar to our standard of living. The good news is that each year many are beginning to bring to pass it. But the consequences of this trend are increasing demands in succession account of food, goods, services and commodities of all kinds.
Second, geopolitical dynamics continue to put directed to a higher place pressure on prices. I don't due insignificant conflict in the Middle East, although that certainly plays a role.
The situation is far in addition complicated.
We are seeing a resurgence of "resource nationalism" - the sudden thought by dint of. governments to tightly control domestic resources and exclude foreign investing.. As prices increase, these geopolitical science of forces strengthen.
Third, new supplies of oil resources are challenging to find and extract. Since we started using oil, most of the easy-to-reach, inexpensive supplies have been used. What's left is harder to find … more difficult to drill … and more expensive to produce.
And fourth, we have deliberately constrained our own supply by placing limitations on home exploration and drilling. In the past 20 years, America's produce has fallen by within a little 4 million barrels of oil a day - this is the equivalent of taking a greater oil producing country's supply facing the world market.
And over the same age, U.S. demand grew by more than 4 million barrels per day. Less supply, in a time of rising demand, step higher prices.
Last year global lengthening barely exceeded requirement. Spare capacity stood at lawful over 2 million barrels by day. World oil production poorly increased.
Last year, 7 of the upper end 15 oil producing countries versed flat to declining fruit compared to 2006. Among them were Mexico, Venezuela, Norway, and Nigeria.
Although in recent months the afford and make necessary balance has improved, there are accumulating risks to the supply of reliable, affordable energy in the future.
The fundamentals underlying the global energy market have changed. And they aren't going to change back.
But there are solutions.
And the essential actions we must take become apparent when people be apprised the realities of energy.
Let me provide you with more information touching our energy system.
Americans are the largest consumers of energy in the universe. And we have benefitted greatly from it. We make about a quarter of the world's gross domestic product and consume a quarter of the world's energy.
We are becoming more efficient in our use of energy. Today, we use half of the activity per unit of GDP compared to 40 years ago.
So where does this activity come from?
Almost 40 percent is oil … about 23 percent each from life-like elastic fluid and coal … 8 percent is generated from nuclear.
Renewables make up 7 percent … of that hydro power contributes about half.
Less than one half of one percent comes from wind; solar is just smaller than that.
We consequence about two-thirds of our oil, and 15 percent of our natural aeriform fluid. All of the rest of our energy - coal, nuclear, renewables - is produced here at home.
Let me dispel single myth. The U.S. is not any energy weakling. Our country is an efficiency powerhouse.
America is the number 1 producer of nuclear power and ethanol….
We' re the account 2 producer of coal, simple aeriform fluid and wind power …
And we're the number 3 producer of oil.
When looking at the energy system from a global perspective … the picture is excessively similar. Like America, 85 percent of the global good housewifery is powered by oil, natural gas and coal. And by 2030, experts predict we will emergency 50 percent more.
Now, I want to make one important point … and that point is "scale." The scale of the global energy system is simply very large … and destined to possess much larger. Today the world consumes, from all energy sources, the equivalent of 10 million barrels of oil each and every hour. That's about 120,000 gallons per abet.
These are lock opener facts about energy. And facts are the antidote to all the myths, half-truths and impossible contradictions, that too frequently pass for energy "reflecting."
For instance:
?????? We want to decrease our reliance without ceasing foreign oil. But we restrict domestic production and call on OPEC to grow its production.
?????? We want less carbon, but are fearful of nuclear power, some of the few scalable sources of energy that generates no carbon.
?????? We want energy companies to invest their profits to provide novel supplies, but we threaten to take away those profits through "windfall profit" taxes.
Time and time again, someone tells us that he or she has found the solution to all our problems. Some are purely phony … some are real … but not realistic.
Renewable energy is very real. We need it. It will be an absolute requisite work of the future I envision. But it's not realistic to suppose that it can replace conventional power in a timeframe that some suggest.
Our energy system has required massive investment over many decades. To supply the daily needs of 300 million people here in the U.S. with new energy sources requires time and money - lots of both! And it's unrealistic to think major parts of it can be replaced in just a decade.
Now, I believe we last will and testament unfold and implement new technologies that desire move our economy toward a greater trust on renewables and alternatives. But the development and application of recent technology always takes leisure.
Look at the computer industrial art. It took about fifty years from the progressive growth of the silicon chip before computers were a widespread part of everyday life.
Will energy alternatives draw that long? I hope not. But we need to be realistic.
Even with the rapid growth of renewables, experts estimate that over 80 percent of global energy consumed in 2030 will still come from oil, natural gas and coal.
These resting on mere custom energy sources pleasure remain indispensible to meeting demand for decades to come, even during the time that we pursue greater contributions from renewable pluck.
The flipside to misplaced chance of a favorable result in alternatives is the notion that we have sovereignty to simply drill our way out of the problem.
We can't. There aren't enough domestic reserves … and what there are will take time to develop. But other thing access will help!
We exist in privation of to get beyond simplistic solutions - slogans, really - and converging-point on our primary belonging to - energy security. The reality is that there are no silver bullets, no quick and easy answers.
Massive mount…. long lead times… tight spare capacity … growing demand … these are the realities we face.
There are solutions. And those solutions are not "either/ or," …
It's not a choice between "more drilling or other thing efficiency."
It's not a choice betwixt coal or wind.
It's not a choice between nuclear or solar.
We need it all!
We need greater efficiency and more renewables… we need nuclear and clean coal … we need wind and oil and natural gas.
Our path to energy security cannot rely without ceasing just one choice - it new wine keep onward many options.
Last year, the National Petroleum Council published a study titled "Facing the Hard Truths about Energy".
It laid out five essential and urgent steps to achieve energy security Let me eventuate from one side them:
?????? First, moderate make ready inquiry by increasing energy efficiency in all sectors of our system.
?????? Second, expand and dapple total U.S. domestic energy supplies.
?????? Third, strengthen global and U.S. energy security through a renewed commitment to energy carry on commerce and investment.
?????? Fourth, enhance science and engineering capabilities to meet these of the present day challenges.
?????? And fifth, address conservatory gases through a transparent, predictable carbon policy.
Let me say a little bit more near to this last instant, because I know how much it is discussed today.
One of the largest contributors to conservatory gas concentrations in the atmosphere is fossil fuels.
There is no doubt that carbon dioxide concentrations in the atmosphere have increased. And although there is uncertainty here and there the future impacts on climate, most humbler classes agree that it's not a good exemplar to continue unconfined hydrocarbon consuming. And I agree.
But for what reason should we reduce emissions in a realistic timeframe given the scale of the energy system and the increasing demand?
Once again, various proposals are being discussed.
Some talk about reducing emissions by 20 percent by 2020. It sounds cheerful! 20 by 20! Others talk about reducing emissions by 50, 60 or exactly 70 percent by 2050.
Even with the best of intentions, it will be challenging. If we were to shutdown the entire global transportation arrangement today - all cars, trucks, buses, trains, planes and ships, we would reduce conservatory aeriform fluid emissions by about 15 percent! That's one-five percent.
And meaningful reductions will be expensive to achieve.
The International Energy Agency predicts that the real costs to meet greenhouse gas reduction targets will be $45 trillion dollars. That's above and beyond the investments necessary to meet future energy demand. It's a cost every hackneyed of us in this room needs to understand. Not blameless a cost on business, it is a cost on society. One that you and I will pay.
We are facing a moment of decision when it comes to our capacity of work future.
And the time to operate … is since.
I am confident we be possible to take the suitable steps in advance to achieve energy security. And I am not alone in my views.
The American the community is now engaged on energy.
We're embracing energy efficiency. We're endorsing the need to develop more of our own supplies - renewables and conventional energy. And … we're striving to use might in a more environmentally responsible manner.
When you look at this momentum, it's easy to see the new consensus edifice in America about energy.
That's important because we exigency collaboration to achieve real progress.
Businesses and consumers need affordable energy. Young and old want renewable energy; Republicans and Democrats seek reduced emissions.
But we need leadership to achieve results.
This election - this moment of decision - is a season for the Presidential candidates to explain how they will lead.
Next week, when they meet at the University of Mississippi, the candidates must clarify their positions.
They need to propitiate campaign promises with tangible actions:
?????? What are their plans for composition our economy more energy efficient?
?????? Do they have concrete actions to extend whole forms of domestic energy - nuclear … natural gas … renewables … oil … and coal?
?????? How will they de-carbonize the world's largest economy without undermining energy security or threatening our prosperity?
?????? What's the cost … and who volition pay … for their proposed plans?
We need to hear the combat for. And we all necessity to arrive at the truth the integrity of their proposals.
On the eve of the Civil War, Abraham Lincoln observed: "Public sentiment is everything. With public sentiment, nothing can fail; without it, nothing can succeed."
Today, public sentiment supports engagement without interruption energy policy.
That action should lead to a future of greater energy efficiency … enhanced stores of totality forms of mechanical value … and reduced emissions.
While I am concerned about the urgency of the situation today, I'm in addition optimistic.
I believe that, by the time my grandchildren are my age, our vigor system will look much different. But we must get started now.
Our standard of living and our nation's security will be shaped by the energy policy of our next President.
Our modern consensus without interruption strength has a common goal - for America to be secure. We distress to work cheek by jowl to achieve it.
Thank you.
Original text: http://us.rd.yahoo.com/dailynews/rss/oped/*http://news.yahoo.com/s/realclearpolitics/20080919/cm_rcp/the_new_energy_consensus