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Ending the Energy Stalemate A Bipartisan Strategy to Meet America’s Energy Challenges

Ending the Energy Stalemate A Bipartisan Strategy to Meet America’s Energy Challenges. Jason Grumet Global Energy & Climate Change UCLA Conference - Lake Arrowhead October 22, 2006. The Commissioners. Marilyn Brown Interim Director of Oak Ridge National

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Ending the Energy Stalemate A Bipartisan Strategy to Meet America’s Energy Challenges

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  1. Ending the Energy StalemateA Bipartisan Strategy to Meet America’s Energy Challenges Jason Grumet Global Energy & Climate Change UCLA Conference - Lake Arrowhead October 22, 2006

  2. TheCommissioners

  3. Marilyn Brown Interim Director of Oak Ridge National Laboratory’s Engineering Science and Technology Division Ralph Cavanagh Co-Director, Energy Program, Natural Resource Defense Council Archie Dunham Fmr. CEO Conoco-Phillips, (*resigned 2005) Rodney Ellis State Senator, Texas Leo W. Gerard President, United Steelworkers of America Robert E. Grady Managing Partner, Carlyle Venture Partners, F. Henry Habicht CEO, Global Environment & Technology Foundation; fmr. Deputy Administrator U.S. EPA Frank Keating CEO of the American Council of Life Insurers; former governor of Oklahoma Richard A. Meserve President of the Carnegie Institution; fmr. Chairman of the U.S. Nuclear Regulatory Commission Mario Molina Professor, University of California, San Diego; Nobel Laureate Sharon L. Nelson Chief, Consumer Protection Division, Washington Attorney’s General Office; Chair of Consumers Union Richard L. Schmalensee Dean of the MIT Sloan School of Management Linda Stuntz Partner Stuntz, Davis & Saffier fmr Deputy Secretary U.S. DOE (*resigned 2005) Susan Tierney Managing Principal, The Analysis Group; fmr. Assistant Secretary U.S. DOE R. James Woolsey Vice President, Booz, Allen, Hamilton; fmr. Director of Central Intelligence Martin Zimmerman Professor of Business, University of Michigan; Fmr. Group Vice President, Ford Motor Company The Commissioners

  4. Structure of the Commission’s Report • Improving Oil Security • Reducing Risks from Climate Change • Improving Energy Efficiency • Expanding Energy Supplies • Strengthening Energy Supply Infrastructure • Developing Energy Technologies for the Future

  5. Top World Oil Consumers US accounts for 25% of global consumption

  6. Top World Oil Producers U.S the third largest producer, but only has 3% of world’s proved reserves.

  7. US Oil End Use 97% of US transportation is petroleum dependent

  8. Three Steps Toward Oil Security • Improve the reliability and resiliency • of the global oil supply chain. • 2. Dramatically Improve Transportation Efficiency (Fuel Economy). • 3. Diversify Transportation Fuels.

  9. Oil Intensity Per GDP 1970 -2000 • Repeating this success will require displacing @ 8MBD of oil by 2030

  10. Increase Conventional Oil Production • US Potential < 2 MBD 2025 • Must Focus on Global Production • - Confront Statist Tendencies in Oil Rich Nations • - Trade / Investment Reciprocity

  11. Improve Efficiency (2025) Heavy-Duty Trucks Improved Engines & Aerodynamics 1.0 MBD Passenger Vehicles & Delivery Trucks Improved Gasoline Vehicle Technology (32MPG) 2.2 MBD 50% new car sales Advanced Hybrid and diesel (40 MPG) 3.5 MBD Advanced Hybrid/Diesel + 25% plug in Hybrids (50 MPG) 4.6 MBD

  12. Alternatives to Conventional Oil • 4 Part Test: • Ample Domestic Feedstock • Generally Compatible with Existing Infrastructure • Low Carbon • Cost-Competitive with Gasoline • Hydrogen: Fails #2 & #4 / #3?? • Unconventional Oil: Fails #3 / #4? • Coal to Liquids: Fails #3 / #4? • Traditional Ethanol Fails #1 • Cellulosic Biofuels challenge is scale

  13. Oil Security Conclusion • “…Diversity and Diversity Alone.” • Buy Time • Improve Resiliency of Global Supply Chain; • Reduce Oil Intensity of the Global Economy; • Increase U.S. Fuel Economy Requirements; • Land Use / Transportation Planning. • Diversify – low carbon alternatives • Significant Public and Private Investment; • Biofuels and Electricity;

  14. Climate Change • “Technology is the Answer” • The Question is who pays to accelerate technology development and deployment • Must combine a long term market signal and technology incentives

  15. Ecological Considerations • Move Quickly • Volunteerism is not a credible response • Combine gradually increasing market signal & significant technology incentives • Adopt robust program architecture that will evolve and strengthen over time • Recapture ability to effectively engage developing countries

  16. Economic & Political Considerations • Limit premature retirement of otherwise valuable energy infrastructure • Address economic/technology uncertainty through cost cap or “Safety-Valve” • Link future action to international efforts • Engage key political constituencies in designing technology incentives and adaptation funding • Design equitable allowance distribution

  17. Slow, Stop and Reverse Greenhouse Gas Emissions

  18. Climate Change Conclusion Strengthening Science + State Action + Threats to Charismatic Mega Fauna + Fear of 2008 elections = Fluid & Dynamic National Debate in 2007

  19. Thank You For More Information… • Go to www.energycommission.org. • jgrumet@energycommission.org 1250 I St NW Washington, DC 20005 202-637-0400

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