(25 minutes)

U.S. Rep. Pete Visclosky speech
Senator Lugar/Purdue University
Energy Summit

It is a special pleasure to be here today. I want to thank President Martin Jischke and Purdue University for inviting a Notre Dame man to speak. And I am of course delighted to join with my good friend Senator Lugar, someone whom we in Indiana are very proud of.

I also want to commend Governor Daniels for his leadership on the energy front. He is linking Indiana's economic future with our potential to be in the forefront of an energy revolution. I think that's exactly where we ought to be, and my hat is off to him.

You've already heard today from our country's most respected voice on foreign affairs. No one is more qualified than Senator Lugar to discuss the implications of America's energy dependence – and what it means for our security and our economic future.

And when Senator Lugar raises concerns about the distortions that energy has on our foreign policy – and when Senator Lugar says that energy has become an albatross around the neck of America's national security – then I think we can all agree that it's time we move the subject of America's energy independence to the very top of the national agenda.

Clearly, our nation has an energy problem. The President has said we are addicted to oil – something not to be taken lightly given his roots in the industry.

In 1985, when I first came to Congress, the United States imported 4.3 million barrels of petroleum each day – about 27 percent of our total consumption. Today, we import nearly three times that much and imported oil is now nearly 60 percent of our domestic consumption. It accounts for a third of our trade deficit. We now spend $200,000 each minute on foreign oil imports.

In the past two decades, our total consumption of fossil fuels is up by about 30 percent. And the best estimates are that consumption will grow by another 30 percent over the next two decades. With each passing month, it becomes clearer that oil is not going to retreat from its $75-a-barrel range anytime soon, if ever. Credible analysts are telling us to expect $100-a-barrel oil in the next few years.

But, while prices at the gas pumps may be getting most of the attention now, this is about much more than just oil – which generates only 3 percent of our electric power. Rather, this is about our entire mix of energy sources – and how to go about changing that mix over the long term in order to increase our economic and national security.

Whether the price of one commodity goes up or down over the next few years, the fact is that we are dealing mostly with finite sources of energy – along with a growing world economy that is consuming more and more of those sources. The costs of maintaining our current mix is not going to drop over the long term. This is a problem that is not going to go away on its own.

But the issue is not just about supply. Even if we were able to secure lasting and affordable sources of the fuels we use today, we'll end up choking on the waste. The scientific community is generally in accord that global warming is a reality, and that catastrophic climate change is likely if the world continues to increase its reliance on fossil fuels. I'm convinced of the threat and I believe most Americans are convinced, as well.

Global warming has changed the debate. We are no longer talking only about the environmental degradation of major cities – but now the health of the entire planet is at risk. You can't walk away from greenhouse gases – the way we now think of escaping urban pollution for the fresh air of the distant countryside. There is no escape from the consequences of carbon dioxide emissions.

These are the key challenges – securing more energy, securing cleaner energy – so that we can provide for the continued growth of our economy without destroying our environment. So what do we do?

On this I'm in Senator Lugar's camp. I don't believe that we can wait for market forces to produce solutions on their own. There is simply too much at stake – both from an economic and a security perspective. We have to be the ones who say we will not saddle the next generation with this albatross.

I also reject the notion that changing the way we use energy has to be a painful thing for our economy, our communities, our businesses or our people. But it will take focus, discipline and a willingness to change.

I am here, in my capacity as an appropriator, to firmly support the principle that innovation, technology and research and development should be at the very core of our national efforts to secure our energy future. I believe we can invent and invest our way out of this problem.

Government should help lead the way. It ought to support innovation and investment, and to set the course for a new energy future. And we can begin to do this through a series of initiatives over the short, medium and long term.

With regard to the short term, let's face it, there is nothing we can do to bring gasoline prices down next week. But that doesn't mean we can't begin to have an impact in the near-term. For instance, we can raise the fuel efficiency standards for vehicles – the CAFE standards. As the representative of the congressional district that produces more steel than any state in the country, I have always opposed raising those standards. But I'm also aware that, amid our growing energy problem, the average fuel economy for cars sold in the U.S. is almost exactly where it was in 1982.

Given this lack of progress, I think it's time we start looking toward solutions that benefit the nation as a whole. Raising the CAFE standards will go a long way toward reducing gasoline consumption. The technology exists to meet higher standards. And I'm convinced that Indiana's steel industry can become part of the solution as the auto industry searches for lighter and stronger metals to increase the fuel efficiency of their fleets without sacrificing safety.

On another front, I think we ought to take immediate steps to use the federal government's enormous purchasing power to build markets for next generation vehicles – hybrids, hybrid plug-ins and flex-fuel vehicles, for instance. With flex-fuel and E-85 vehicles, the problem has always been the "chicken and the egg." That is: Getting the cars to market is tough when you don't have the fuel supply and distribution, which in turn doesn't move forward because the cars that use the new fuels are not yet on the road.

Converting all the cars, trucks and non-tactical military vehicles in the federal fleet to flexible fuel and hybrid engines will not only save enormous quantities of gasoline, but it will also help to build the markets for production and distribution of renewable fuels. We ought to be doing this.

The same goes for public buildings and government installations. They can be retrofitted for energy efficiency with new technologies, which will have the effect of creating the markets and the labor skills for energy efficient technologies.

In order to begin building these markets, I have pushed in the Energy and Water Appropriations Subcommittee an increase in funding for E-85 infrastructure development. I have also worked with Senator Lugar to secure federal money to help build an ethanol plant in Jasper County – on which construction is now under way.

I believe in the future of biofuels. I think we can convert much of our liquid fuel base from oil to biomass. And I believe that Indiana farmers and Indiana businesses are going to play a major role in America's biofuel future. With this we start to get into the medium and longer term solutions – areas where the federal government can be of even greater help in advancing innovation. Unfortunately, what I see from my vantage point worries me.

I think Washington is coming up way short on research and development. We are achieving false economies and making poor choices that are locking us into today's technologies and not allowing us to invest for the future. For example, it may look like we're doing something on alternative energy sources.

But I can tell you that federal support for the development of solar power is so paltry that what we're really doing is pushing commercialization of current technologies rather than developing them for the longer term – 15 to 20 years down the road. The administration has cancelled the geothermal technology program. And it's commitment to the bio-based purchasing program in the 2002 Farm Bill is way behind schedule. My point is that these are not the choices you make in a crisis. We have to take bold action. But sometimes I get the feeling that what we're really doing is waiting around for something good to happen.

Even the Department of Energy, which was created during the energy crises of the 1970s, spends only 10 percent of its budget on energy research and development. And lest you believe that the federal government can't really be effective in making things happen, let me say this:

If you look at this country's use of oil over the past 50 years, it closely tracks the growth in our GDP. In other words, year after year, as the economy grew, oil consumption grew right along with it.

Except for one eight-year period – 1977 to 1985. During that time, the economy grew by 3 percent a year while energy use in this country dropped by 2 percent a year. Petroleum consumption dropped by as much as 20 percent during this time – by more than 3 million barrels a day.

Why did this happen? I would argue that the single largest factor was the federal commitment to research and development that we undertook in the late 1970s. For renewable fuels and increasing the efficiency of fossil fuels, support was four times what it is today. For nuclear energy technologies, support was four times what it is today. And for energy conservation it was twice the amount that we spend today. I think we can and we must break the cycle again. We can grow the economy while kicking the oil habit. At the same time we must deal with the greenhouse gas problem and the other environmental problems caused by our current fuel mix.

But we've got to set some goals – and we've got to meet them. For one, I'd like to see us vastly improve our “energy intensity” rate – that is, the amount of energy we use for each dollar of GDP. Back in the early 1980s, that figure dropped by 20 percent over five years.

Since then, it has continued to drop, but at a much slower annual rate. If we could get this rate of improvement back to where it was in the early 1980s – and keep it there – we could make enormous progress toward energy independence. Additionally, I would note that our energy use per capita has increased since 1985 – to the point where it is now back to 1980 levels.

Our target should be to hold the line on further increases, and then to start reducing per capita energy consumption while continuing to improve our standard of living. We can also set more aggressive targets for reducing our greenhouse gas emissions. Doing so will help steer us away from relying on petroleum for our transportation needs and toward the more efficient use of energy.

I'd also like to see us establish a 20 year goal of robust energy independence. And by that I mean we get ourselves to a point where no single source or supplier of energy, foreign or domestic, can threaten the health of our economy or our national security. This would mean that no single sector will rely primarily on just one or two sources. We would be more diversified, and we could more easily shift our reliance as supplies and market conditions require. For motor vehicles, this would mean a range of fuel options beyond gasoline – and in some models the ability to switch from one fuel source to another. For electricity generation, it means fulfilling the potential of renewable sources and finding new ways to get more and cleaner BTUs out of the sources we have now.

I am convinced that these targets can be met through expanded research and technological innovation. And, at the same time, we will see the economic benefits that a technological revolution will bring – just as federal investments in DARPA and the early internet paved the way for the wonders of the information age that followed.

Energy efficiency through innovation and conservation can be our greatest resource. And it is just waiting to be tapped. Because of energy efficiency gains since 1973, the U.S. now saves more energy each year than we use from any one source – oil, gas, coal, nuclear, you name it. We can quicken that pace with the right investments.

As an example, the National Academy of Sciences says an investment of $500 million over the next ten years in solid state lighting technology will result in $50 billion in energy savings. That's a 100-fold return. It's an investment I believe we ought to be making, and I've had some success in putting us on this path.

Another example -- A recent study for the Pentagon found that investing $180 billion over the next decade to eliminate our oil dependence could save $70 billion each year. That's two-and-a-half years to recoup the investment. Again, it's one we ought to be making.

Indiana and its industries can benefit from these investments – and we can be part of the energy efficiency revolution. Developing E-85 fuel sources is only a beginning. Because you can't put alcohol through pipelines, the production and distribution infrastructure for E-85 is going to have to be built near where the crops are grown. This can open up enormous opportunities for not just farmers but for other businesses, as well.

Let me focus specifically on two areas where I think we ought to be putting a great deal of emphasis in our search for long term solutions to our energy challenges. I happen to believe very strongly in the potential for coal. The coal in the ground right next door in Illinois contains more energy than all of the oil under Saudi Arabia. And that's just Illinois. We've got a good deal of coal in Indiana. And it's abundant in other parts of the country, as well.

Now, as you know, burning coal dirties the air, exacerbates our greenhouse gas problem and bears the lion's share of the blame for global warming. Even if we stopped burning coal in this country, China is bringing new coal-fired plants on line at the rate of one every 10 days. Already we are starting to detect Chinese emissions on our west coast.

So we have to find a way to make coal cleaner. The technologies already exist to convert coal to diesel fuel, as well as to isolate and retain the carbon dioxide that is released from power plants. The problem is that there are presently few places to put the sequestered CO-2. One of them is to send it to soda pop bottlers – but that keeps the gas sequestered only until someone burps. We've got to do better than that. Here again, I think the federal government can be doing more than it does now.

There is a promising initiative under the DOE's FutureGen project to develop the technology for permanently sequestering greenhouse gases underground. But this is moving slowly. There is only one demonstration project under way. Certainly, this effort can be moved up the priority list.

On another front, the government's Clean Coal Initiative, which supports a new generation of energy processes that sharply reduce air emissions and other pollutants from coal-burning power plants, is underfunded by $165 million. The bottom line is that there are good places to put more money and where more money will make a real difference in the development of these promising technologies. Coal can play an important role in our energy independence, but we have to do more to make this happen.

Now, Let me turn to nuclear power. I cannot envision an energy future without nuclear playing a significant role. Over the past several decades there have been enormous safety and performance improvements. It is domestically produced energy. And it doesn't have the greenhouse gas problem that fossil fuels pose. But nuclear is at a crossroads. Our current fleet of reactors, which together provide about 20 percent of the nation's electric power, is well into the second half of its expected lifespan. Then there's the waste issue. How to deal with it. Where to put it. It would be helpful if the federal government could move forward and solve these issues. That would be a confidence builder for the industry. I have been active in efforts to increase funding for Yucca Mountain in Nevada, so that we can proceed to open the long-planned repository there. And I have to say that I am frustrated with the bureaucratic and funding delays that have pushed the scheduled opening of the site from 2010 to 2017. The nation must have a permanent high-level radioactive waste repository. We have to resolve this issue if nuclear power is to play an important role in our future energy independence.

Likewise, we must also look beyond the waste storage issue and to new technologies that can help us improve the viability of nuclear power in the decades ahead. I believe there is a lot of promise in finding ways to recycle spent nuclear fuel into fresh fuel for use in new and existing light water reactors. In doing so we can minimize the amount of waste that needs permanent storage while controlling the costs and dealing with the concerns of those who worry about interim storage issues associated with the Yucca Mountain delays.

I have been working with my chairman Dave Hobson and the other members of my Subcommittee to secure funds for the Department of Energy to develop spent fuel recycling – and I'm happy to say that there appears to be some progress on this. DOE now appears to be moving toward helping industry develop a commercially viable approach that includes a plan for storing some significant amounts of spent fuel to supply the recycling facility – and to do it in a way that can get the technology to market without an expensive demonstration project as previously envisioned by the agency. Commercial entities have shown an interest in doing this, so all the more reason to "get going."

This is another area where I was frustrated that the government had not been stepping up to its responsibilities in terms of the advanced research and development that the private sector can't do it on its own. Hopefully, at least in the area of nuclear power, this is now changing. We need to ensure that critical technologies are going to be there for us 10, 15 and 20 years down the road.

Overall, I don't want to see us fumble our way through the next dozen years of increasing energy instability and rising prices, with worsening consequences for our economy, our security, our environment and the American people. It shouldn't take a major, crippling incident for us to act.

We already have a good deal of the know-how. The technologies to transform our energy future are well within our reach. We can invent and invest our way out of this predicament – before it gets intolerable.

We cannot wait 25 years and then decide what kind of energy system we want to have. The planning and investments have to begin today.

And we can benefit from our investments. New technologies. New industries. New jobs. Home grown in America and right here in Indiana. We can lead the way to a cleaner, more energy efficient world. And I'll bet we can make a profit doing it.

Franklin Roosevelt called it "bold, persistent experimentation." It's the American way. It's the Indiana way.

Thank you.



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