0:00:00.225,0:00:02.487
America's public energy conversation

0:00:02.487,0:00:04.710
boils down to this question:

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Would you rather die of A) oil wars,

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or B) climate change,

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or C) nuclear holocaust,

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or D) all of the above?

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Oh, I missed one: or E) none of the above?

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That's the one we're not normally offered.

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What if we could make energy do our work

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without working our undoing?

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Could we have fuel without fear?

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Could we reinvent fire?

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You see, fire made us human;

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fossil fuels made us modern.

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But now we need a new fire

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that makes us safe, secure, healthy and durable.

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Let's see how.

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Four-fifths of the world's energy

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still comes from burning each year

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four cubic miles of the rotted remains

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of primeval swamp goo.

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Those fossil fuels

0:00:53.067,0:00:56.144
have built our civilization.

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They've created our wealth.

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They've enriched the lives of billions.

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But they also have rising costs

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to our security, economy, health and environment

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that are starting to erode, if not outweigh their benefits.

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So we need a new fire.

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And switching from the old fire to the new fire

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means changing two big stories about oil and electricity,

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each of which puts two-fifths of the fossil carbon in the air.

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But they're really quite distinct.

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Less than one percent of our electricity is made from oil --

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although almost half is made from coal.

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Their uses are quite concentrated.

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Three-fourths of our oil fuel is transportation.

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Three-fourths of our electricity powers buildings.

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And the rest of both runs factories.

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So very efficient vehicles, buildings and factories

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save oil and coal,

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and also natural gas that can displace both of them.

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But today's energy system is not just inefficient,

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it is also disconnected,

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aging, dirty and insecure.

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So it needs refurbishment.

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By 2050 though, it could become efficient,

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connected and distributed

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with elegantly frugal

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autos, factories and buildings

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all relying on a modern, secure

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and resilient electricity system.

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We can eliminate our addiction to oil and coal by 2050

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and use one-third less natural gas

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while switching to efficient use

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and renewable supply.

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This could cost, by 2050,

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five trillion dollars less in net present value,

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that is expressed as a lump sum today,

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than business as usual --

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assuming that carbon emissions

0:02:45.133,0:02:48.198
and all other hidden or external costs are worth zero --

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a conservatively low estimate.

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Yet this cheaper energy system

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could support 158 percent bigger U.S. economy

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all without needing oil or coal,

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or for that matter nuclear energy.

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Moreover, this transition needs no new inventions

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and no acts of Congress

0:03:08.985,0:03:13.467
and no new federal taxes, mandate subsidies or laws

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and running Washington gridlock.

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Let me say that again.

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I'm going to tell you how to get the United States

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completely off oil and coal, five trillion dollars cheaper

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with no act of Congress

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led by business for profit.

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In other words, we're going to use our most effective institutions --

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private enterprise co-evolving with civil society

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and sped by military innovation

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to go around our least effective institutions.

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And whether you care most

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about profits and jobs and competitive advantage

0:03:45.798,0:03:48.208
or national security, or environmental stewardship

0:03:48.208,0:03:50.369
and climate protection and public health,

0:03:50.369,0:03:54.652
reinventing fire makes sense and makes money.

0:03:54.652,0:03:58.098
General Eisenhower reputedly said

0:03:58.098,0:04:00.718
that enlarging the boundaries of a tough problem

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makes it soluble by encompassing more options and more synergies.

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So in reinventing fire,

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we integrated all four sectors that use energy --

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transportation, buildings, industry and electricity --

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and we integrated four kinds of innovation,

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not just technology and policy,

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but also design and business strategy.

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Those combinations yield

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very much more than the sum of the parts,

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especially in creating deeply disruptive business opportunities.

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Oil costs our economy two billion dollars a day,

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plus another four billion dollars a day

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in hidden economic and military costs,

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raising its total cost to over a sixth of GDP.

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Our mobility fuel goes three-fifths to automobiles.

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So let's start by making autos oil free.

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Two-thirds of the energy it takes to move a typical car

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is caused by its weight.

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And every unit of energy you save at the wheels,

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by taking out weight or drag,

0:04:59.818,0:05:01.848
saves seven units in the tank,

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because you don't have to waste six units

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getting the energy to the wheels.

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Unfortunately, over the past quarter century,

0:05:09.218,0:05:11.933
epidemic obesity has made our two-ton steel cars

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gain weight twice as fast as we have.

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But today, ultralight, ultrastrong materials,

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like carbon fiber composites,

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can make dramatic weight savings snowball

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and can make cars simpler and cheaper to build.

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Lighter and more slippery autos

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need less force to move them,

0:05:32.895,0:05:35.169
so their engines get smaller.

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Indeed, that sort of vehicle fitness

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then makes electric propulsion affordable

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because the batteries or fuel cells

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also get smaller and lighter and cheaper.

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So sticker prices will ultimately fall to about the same as today,

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while the driving cost, even from the start,

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is very much lower.

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So these innovations together can transform automakers

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from wringing tiny savings

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out of Victorian engine and seal-stamping technologies

0:06:06.908,0:06:09.646
to the steeply falling costs

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of three linked innovations that strongly reenforce each other --

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namely ultralight materials, making them into structures

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and electric propulsion.

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The sales can grow and the prices fall even faster

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with temporary feebates,

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that is rebates for efficient new autos

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paid for by fees on inefficient ones.

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And just in the first two years

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the biggest of Europe's five feebate programs

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has tripled the speed of improving automotive efficiency.

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The resulting shift to electric autos

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is going to be as game-changing

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as shifting from typewriters to the gains in computers.

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Of course, computers and electronics

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are now America's biggest industry,

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while typewriter makers have vanished.

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So vehicle fitness

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opens a new automotive competitive strategy

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that can double the oil savings over the next 40 years,

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but then also make electrification affordable,

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and that displaces the rest of the oil.

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America could lead this next automotive revolution.

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Currently the leader is Germany.

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Last year, Volkswagen announced

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that by next year they'll be producing

0:07:25.131,0:07:28.000
this carbon fiber plugin hybrid

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getting 230 miles a gallon.

0:07:30.408,0:07:32.923
Also last year, BMW announced

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this carbon fiber electric car,

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they said that its carbon fiber is paid for

0:07:37.167,0:07:39.221
by needing fewer batteries.

0:07:39.221,0:07:41.752
And they said, "We do not intend to be a typewriter maker."

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Audi claimed it's going to beat them both by a year.

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Seven years ago, an even faster and cheaper

0:07:48.500,0:07:51.092
American manufacturing technology

0:07:51.092,0:07:58.536
was used to make this little carbon fiber test part,

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which doubles as a carbon cap.

0:08:00.875,0:08:02.438
(Laughter)

0:08:02.438,0:08:05.500
In one minute -- and you can tell from the sound

0:08:05.500,0:08:08.333
how immensely stiff and strong it is.

0:08:08.333,0:08:11.825
Don't worry about dropping it, it's tougher than titanium.

0:08:11.825,0:08:14.048
Tom Friedman actually whacked it as hard as he could with a sledgehammer

0:08:14.048,0:08:15.587
without even scuffing it.

0:08:15.587,0:08:17.702
But such manufacturing techniques

0:08:17.702,0:08:20.925
can scale to automotive speed and cost

0:08:20.925,0:08:22.379
with aerospace performance.

0:08:22.379,0:08:25.900
They can save four-fifths of the capital needed to make autos.

0:08:25.900,0:08:27.062
They can save lives

0:08:27.062,0:08:28.354
because this stuff can absorb

0:08:28.354,0:08:31.618
up to 12 times as much crash energy per pound as steel.

0:08:31.618,0:08:33.367
If we made all of our autos this way,

0:08:33.367,0:08:36.290
it would save oil equivalent to finding

0:08:36.290,0:08:39.122
one and a half Saudi Arabias, or half an OPEC,

0:08:39.122,0:08:43.554
by drilling in the Detroit formation, a very prospective play.

0:08:43.554,0:08:46.254
And all those mega-barrels under Detroit

0:08:46.254,0:08:48.767
cost an average of 18 bucks a barrel.

0:08:48.767,0:08:50.613
They are all-American, carbon-free

0:08:50.613,0:08:52.933
and inexhaustible.

0:08:52.933,0:08:55.687
The same physics and the same business logic

0:08:55.687,0:08:57.233
also apply to big vehicles.

0:08:57.233,0:08:59.925
In the five years ending with 2010,

0:08:59.925,0:09:04.500
Walmart saved 60 percent of the fuel per ton-mile

0:09:04.500,0:09:05.900
in its giant fleet of heavy trucks

0:09:05.900,0:09:07.300
through better logistics and design.

0:09:07.300,0:09:10.315
But just the technological savings in heavy trucks

0:09:10.315,0:09:12.200
can get to two-thirds.

0:09:12.200,0:09:15.487
And combined with triple to quintuple efficiency airplanes,

0:09:15.487,0:09:17.208
now on the drawing board,

0:09:17.208,0:09:19.454
can save close to a trillion dollars.

0:09:19.454,0:09:23.823
Also today's military revolution in energy efficiency

0:09:23.823,0:09:26.800
is going to speed up all of these civilian advances

0:09:26.800,0:09:29.329
in much the same way that military R&D

0:09:29.329,0:09:32.523
has given us the Internet, the Global Positioning System

0:09:32.523,0:09:35.592
and the jet engine and microchip industries.

0:09:35.592,0:09:39.115
As we design and build vehicles better,

0:09:39.115,0:09:41.215
we can also use them smarter

0:09:41.215,0:09:43.462
by harnessing four powerful techniques

0:09:43.462,0:09:45.454
for eliminating needless driving.

0:09:45.454,0:09:48.246
Instead of just seeing the travel grow,

0:09:48.246,0:09:50.900
we can use innovative pricing,

0:09:50.900,0:09:54.854
charging for road infrastructure by the mile, not by the gallon.

0:09:54.854,0:09:58.100
We can use some smart IT to enhance transit

0:09:58.100,0:10:01.641
and enable car sharing and ride sharing.

0:10:01.641,0:10:05.900
We can allow smart and lucrative growth models

0:10:05.900,0:10:10.077
that help people already be near where they want to be,

0:10:10.077,0:10:11.590
so they don't need to go somewhere else.

0:10:11.590,0:10:13.700
And we can use smart IT

0:10:13.700,0:10:16.236
to make traffic free-flowing.

0:10:16.252,0:10:19.067
Together, those things can give us the same or better access

0:10:19.067,0:10:23.567
with 46 to 84 percent less driving,

0:10:23.567,0:10:26.205
saving another 0.4 trillion dollars,

0:10:26.205,0:10:31.200
plus 0.3 trillion dollars from using trucks more productively.

0:10:31.200,0:10:33.905
So 40 years hence, when you add it all up,

0:10:33.905,0:10:36.913
a far more mobile U.S. economy

0:10:36.913,0:10:38.992
can use no oil.

0:10:38.992,0:10:42.500
Saving or displacing barrels for 25 bucks

0:10:42.500,0:10:43.900
rather than buying them for over a hundred,

0:10:43.900,0:10:47.675
adds up to a $4 trillion net saving

0:10:47.675,0:10:50.682
counting all the hidden costs at zero.

0:10:50.682,0:10:53.600
So to get mobility without oil,

0:10:53.600,0:10:55.700
to phase out the oil,

0:10:55.700,0:10:59.131
we can get efficient and then switch fuels.

0:10:59.131,0:11:03.475
Those 125 to 240 mile-per-gallon-equivalent autos

0:11:03.475,0:11:07.318
can use any mixture of hydrogen fuel cells,

0:11:07.318,0:11:10.429
electricity and advanced biofuels.

0:11:10.429,0:11:14.082
The trucks and planes can realistically use

0:11:14.082,0:11:16.902
hydrogen or advanced biofuels.

0:11:16.902,0:11:18.967
The trucks could even use natural gas.

0:11:18.967,0:11:20.967
But no vehicles will need oil.

0:11:20.967,0:11:24.052
And the most biofuel we might need,

0:11:24.052,0:11:25.795
just three million barrels a day,

0:11:25.795,0:11:27.433
can be made two-thirds from waste

0:11:27.433,0:11:29.267
without displacing any cropland

0:11:29.267,0:11:32.300
and without harming soil or climate.

0:11:32.300,0:11:34.315
Our team speeds up these kinds of oil savings

0:11:34.315,0:11:37.267
by what we call "institutional acupuncture."

0:11:37.267,0:11:38.667
We figure out where the business logic

0:11:38.667,0:11:41.136
is congested and not flowing properly,

0:11:41.136,0:11:42.948
we stick little needles in it to get it flowing,

0:11:42.948,0:11:45.441
working with partners like Ford and Walmart and the Pentagon.

0:11:45.441,0:11:48.902
And the long transition is already well under way.

0:11:48.902,0:11:53.205
In fact, three years ago mainstream analysts were starting to see peak oil,

0:11:53.205,0:11:56.152
not in supply, but in demand.

0:11:56.152,0:12:01.264
And Deutsche Bank even said world oil use could peak around 2016.

0:12:01.264,0:12:05.925
In other words, oil is getting uncompetitive even at low prices

0:12:05.925,0:12:10.018
before it becomes unavailable even at high prices.

0:12:10.018,0:12:12.944
But the electrified vehicles

0:12:12.944,0:12:15.721
don't need to burden the electricity grid.

0:12:15.721,0:12:19.156
Rather, when smart autos exchange electricity and information

0:12:19.156,0:12:21.582
through smart buildings with smart grids,

0:12:21.582,0:12:24.898
they're adding to the grid valuable flexibility and storage

0:12:24.898,0:12:26.748
that help the grid integrate

0:12:26.748,0:12:29.595
varying solar and wind power.

0:12:29.595,0:12:31.271
So the electrified autos

0:12:31.271,0:12:33.895
make the auto and electricity problems

0:12:33.895,0:12:36.133
easier to solve together than separately.

0:12:36.133,0:12:37.964
And they also converge the oil story

0:12:37.964,0:12:40.548
with our second big story,

0:12:40.548,0:12:44.308
saving electricity and then making it differently.

0:12:44.308,0:12:47.290
And those twin revolutions in electricity

0:12:47.290,0:12:50.344
will bring to that sector

0:12:50.344,0:12:53.129
more numerous and profound and diverse disruptions

0:12:53.129,0:12:54.490
than any other sector,

0:12:54.490,0:12:58.705
because we've got 21st century technology and speed colliding head-on

0:12:58.705,0:13:03.400
with 20th and 19th century institutions, rules and cultures.

0:13:03.400,0:13:06.475
Changing how we make electricity gets easier

0:13:06.475,0:13:08.990
if we need less of it.

0:13:08.990,0:13:10.652
Most of it now is wasted

0:13:10.652,0:13:12.633
and the technologies for saving it

0:13:12.633,0:13:15.587
keep improving faster than we're installing them.

0:13:15.587,0:13:18.033
So the unbought efficiency resource

0:13:18.033,0:13:20.933
keeps getting ever bigger and cheaper.

0:13:20.933,0:13:23.995
But as efficiency in buildings and industry

0:13:23.995,0:13:25.967
starts to grow faster than the economy,

0:13:25.967,0:13:30.390
America's electricity use could actually shrink,

0:13:30.390,0:13:33.987
even with the little extra use required

0:13:33.987,0:13:35.967
for those efficient electrified autos.

0:13:35.967,0:13:40.795
And we can do this just by reasonably accelerating existing trends.

0:13:40.795,0:13:43.133
Over the next 40 years, buildings,

0:13:43.133,0:13:45.341
which use three-quarters of the electricity,

0:13:45.341,0:13:49.175
can triple or quadruple their energy productivity,

0:13:49.175,0:13:53.100
saving 1.4 trillion dollars, net present value,

0:13:53.100,0:13:56.700
with a 33 percent internal rate of return

0:13:56.700,0:13:58.371
or in English,

0:13:58.371,0:14:01.567
the savings are worth four times what they cost.

0:14:01.567,0:14:03.805
And industry can accelerate too,

0:14:03.805,0:14:05.521
doubling its energy productivity

0:14:05.521,0:14:08.469
with a 21 percent internal rate of return.

0:14:08.469,0:14:10.508
The key is a disruptive innovation

0:14:10.508,0:14:13.331
that we call integrative design

0:14:13.331,0:14:16.259
that often makes very big energy savings

0:14:16.259,0:14:18.736
cost less than small or no savings.

0:14:18.736,0:14:21.364
That is, it can give you expanding returns,

0:14:21.364,0:14:23.218
not diminishing returns.

0:14:23.218,0:14:26.964
That is how our 2010 retrofit

0:14:26.964,0:14:30.167
is saving over two-fifths of the energy in the Empire State Building --

0:14:30.167,0:14:34.321
remanufacturing those six and a half thousand windows on site

0:14:34.321,0:14:38.633
into super windows that pass light, but reflect heat.

0:14:38.633,0:14:41.818
plus better lights and office equipment and such

0:14:41.818,0:14:45.433
cut the maximum cooling load by a third.

0:14:45.433,0:14:50.500
And then renovating smaller chillers instead of adding bigger ones

0:14:50.500,0:14:52.023
saved 17 million dollars of

0:14:52.023,0:14:55.400
capital cost, which helped pay for the other improvements

0:14:55.400,0:14:59.444
and reduce the payback to just three years.

0:14:59.444,0:15:01.667
Integrative design can also increase

0:15:01.667,0:15:03.875
energy savings in industry.

0:15:03.875,0:15:05.867
Dow's billion-dollar efficiency investment

0:15:05.867,0:15:09.167
has already returned nine billion dollars.

0:15:09.167,0:15:12.113
But industry as a whole has another half-trillion dollars

0:15:12.113,0:15:14.308
of energy still to save.

0:15:14.308,0:15:18.867
For example, three-fifths of the world's electricity runs motors.

0:15:18.867,0:15:20.936
Half of that runs pumps and fans.

0:15:20.936,0:15:23.810
And those can all be made more efficient,

0:15:23.810,0:15:25.525
and the motors that turn them

0:15:25.525,0:15:29.175
can have their system efficiency roughly doubled

0:15:29.175,0:15:33.090
by integrating 35 improvements, paying back in about a year.

0:15:33.090,0:15:36.318
But first we ought to be capturing bigger, cheaper savings

0:15:36.318,0:15:38.967
that are normally ignored and are not in the textbooks.

0:15:38.967,0:15:42.121
For example, pumps, the biggest use of motors,

0:15:42.121,0:15:43.938
move liquid through pipes.

0:15:43.938,0:15:45.738
But a standard industrial pumping loop

0:15:45.738,0:15:50.115
was redesigned to use at least 86 percent less energy,

0:15:50.115,0:15:52.054
not by getting better pumps,

0:15:52.054,0:15:55.436
but just by replacing long, thin, crooked pipes

0:15:55.436,0:15:58.052
with fat, short, straight pipes.

0:15:58.052,0:16:01.267
This is not about new technology,

0:16:01.267,0:16:03.244
it's just rearranging our metal furniture.

0:16:03.244,0:16:05.598
Of course, it also shrinks the pumping equipment

0:16:05.598,0:16:07.313
and its capital costs.

0:16:07.313,0:16:09.933
So what do such savings mean

0:16:09.933,0:16:13.615
for the electricity that is three-fifths used in motors?

0:16:13.615,0:16:16.715
Well, from the coal burned at the power plant

0:16:16.715,0:16:19.836
through all these compounding losses,

0:16:19.836,0:16:22.659
only a tenth of the fuel energy

0:16:22.659,0:16:25.659
actually ends up coming out the pipe as flow.

0:16:25.659,0:16:29.333
But now let's turn those compounding losses around backwards,

0:16:29.333,0:16:34.964
and every unit of flow or friction that we save in the pipe

0:16:34.964,0:16:39.108
saves 10 units of fuel cost, pollution

0:16:39.108,0:16:41.715
and what Hunter Lovins calls "global weirding"

0:16:41.731,0:16:43.133
back at the power plant.

0:16:43.133,0:16:44.825
And of course, as you go back upstream,

0:16:44.825,0:16:48.125
the components get smaller and therefore cheaper.

0:16:48.125,0:16:52.705
Our team has lately found such snowballing energy savings

0:16:52.705,0:16:55.938
in more than 30 billion dollars worth of industrial redesigns --

0:16:55.938,0:16:58.667
everything from data centers and chip fabs

0:16:58.667,0:17:00.859
to mines and refineries.

0:17:00.859,0:17:02.300
Typically our retrofit designs

0:17:02.300,0:17:05.254
save about 30 to 60 percent of the energy

0:17:05.254,0:17:07.200
and pay back in a few years,

0:17:07.200,0:17:11.354
while the new facility designs save 40 to 90-odd percent

0:17:11.369,0:17:13.800
with generally lower capital cost.

0:17:13.800,0:17:16.864
Now needing less electricity

0:17:16.864,0:17:19.179
would ease and speed

0:17:19.179,0:17:22.341
the shift to new sources of electricity, chiefly renewables.

0:17:22.341,0:17:26.825
China leads their explosive growth and their plummeting cost.

0:17:26.825,0:17:30.246
In fact, these solar power module costs

0:17:30.246,0:17:32.625
have just fallen off the bottom of the chart.

0:17:32.625,0:17:35.695
And Germany now has more solar workers

0:17:35.695,0:17:38.333
than America has steel workers.

0:17:38.333,0:17:40.179
Already in about 20 states

0:17:40.179,0:17:42.533
private installers will come

0:17:42.533,0:17:46.018
put those cheap solar cells on your roof with no money down

0:17:46.018,0:17:47.887
and beat your utility bill.

0:17:47.887,0:17:50.079
Such unregulated products

0:17:50.079,0:17:52.933
could ultimately add up to a virtual utility

0:17:52.933,0:17:55.887
that bypasses your electric company

0:17:55.887,0:17:59.718
just as your cellphone bypassed your wireline phone company.

0:17:59.718,0:18:03.136
And this sort of thing gives utility executives the heebee-jeebees

0:18:03.136,0:18:05.359
and it gives venture capitalists sweet dreams.

0:18:05.359,0:18:08.452
Renewables are no longer a fringe activity.

0:18:08.452,0:18:10.929
For each of the past four years

0:18:10.929,0:18:13.767
half of the world's new generating capacity

0:18:13.767,0:18:15.364
has been renewable,

0:18:15.364,0:18:17.056
mainly lately in developing countries.

0:18:17.056,0:18:21.348
In 2010, renewables other than big hydro,

0:18:21.348,0:18:23.679
particularly wind and solar cells,

0:18:23.679,0:18:28.671
got 151 billion dollars of private investment,

0:18:28.671,0:18:31.256
and they actually surpassed the total installed capacity

0:18:31.256,0:18:32.941
of nuclear power in the world

0:18:32.941,0:18:36.400
by adding 60 billion watts in that one year.

0:18:36.400,0:18:40.100
That happens to be the same amount of solar cell capacity

0:18:40.100,0:18:42.915
that the world can now make every year --

0:18:42.915,0:18:46.262
a number that goes up 60 or 70 percent a year.

0:18:46.262,0:18:51.795
In contrast, the net additions of nuclear capacity and coal capacity

0:18:51.795,0:18:55.364
and the orders behind those keep fading

0:18:55.364,0:18:57.900
because they cost too much and they have too much financial risk.

0:18:57.900,0:18:59.300
In fact in this country,

0:18:59.300,0:19:01.415
no new nuclear power plant

0:19:01.415,0:19:03.933
has been able to raise any private construction capital,

0:19:03.933,0:19:08.348
despite seven years of 100-plus percent subsidies.

0:19:08.348,0:19:12.352
So how else could we replace the coal-fired power plants?

0:19:12.352,0:19:16.121
Well efficiency and gas can displace them all

0:19:16.121,0:19:18.805
at just below their operating cost

0:19:18.805,0:19:22.559
and, combined with renewables, can displace them more than 23 times

0:19:22.559,0:19:24.633
at less than their replacement cost.

0:19:24.633,0:19:26.641
But we only need to replace them once.

0:19:26.641,0:19:29.329
We're often told though

0:19:29.329,0:19:31.710
that only coal and nuclear plants can keep the lights on,

0:19:31.710,0:19:32.995
because they're 24/7,

0:19:32.995,0:19:35.818
whereas wind and solar power are variable,

0:19:35.818,0:19:38.833
and hence supposedly unreliable.

0:19:38.833,0:19:42.218
Actually no generator is 24/7. They all break.

0:19:42.218,0:19:44.333
And when a big plant goes down,

0:19:44.333,0:19:47.125
you lose a thousand megawatts in milliseconds,

0:19:47.125,0:19:50.618
often for weeks or months, often without warning.

0:19:50.618,0:19:52.615
That is exactly why we've designed the grid

0:19:52.615,0:19:56.885
to back up failed plants with working plants.

0:19:56.885,0:19:58.615
And in exactly the same way,

0:19:58.615,0:20:03.646
the grid can handle wind and solar power's

0:20:03.646,0:20:06.195
forecastable variations.

0:20:06.195,0:20:09.502
Hourly simulations

0:20:09.502,0:20:13.269
show that largely or wholly renewable grids

0:20:13.269,0:20:15.046
can deliver highly reliable power

0:20:15.046,0:20:16.675
when they're forecasted,

0:20:16.675,0:20:18.729
integrated and diversified

0:20:18.729,0:20:20.782
by both type and location.

0:20:20.782,0:20:25.005
And that's true both for continental areas like the U.S. or Europe

0:20:25.005,0:20:29.490
and for smaller areas embedded within a larger grid.

0:20:29.490,0:20:31.129
That is how, for example,

0:20:31.129,0:20:33.513
four German states in 2010

0:20:33.513,0:20:36.110
were 43 to 52 percent wind powered.

0:20:36.125,0:20:39.767
Portugal was 45 percent renewable powered,

0:20:39.767,0:20:42.092
Denmark 36.

0:20:42.092,0:20:45.377
And it's how all of Europe can shift

0:20:45.377,0:20:46.662
to renewable electricity.

0:20:46.662,0:20:51.387
In America, our aging, dirty and insecure power system

0:20:51.387,0:20:54.271
has to be replaced anyway by 2050.

0:20:54.271,0:20:55.898
And whatever we replace it with

0:20:55.898,0:20:57.336
is going to cost about the same,

0:20:57.336,0:21:00.046
about six trillion dollars at present value --

0:21:00.046,0:21:02.254
whether we buy more of what we've got

0:21:02.254,0:21:04.367
or new nuclear and so-called clean coal,

0:21:04.367,0:21:07.998
or renewables that are more or less centralized.

0:21:07.998,0:21:11.267
But those four futures at the same cost

0:21:11.267,0:21:13.336
differ profoundly in their risks,

0:21:13.336,0:21:15.867
around national security,

0:21:15.867,0:21:19.405
fuel, water, finance, technology,

0:21:19.405,0:21:20.936
climate and health.

0:21:20.936,0:21:23.771
For example, our over-centralized grid

0:21:23.771,0:21:27.702
is very vulnerable to cascading

0:21:27.702,0:21:30.429
and potentially economy-shattering blackouts

0:21:30.429,0:21:33.867
caused by bad space weather or other natural disasters

0:21:33.867,0:21:35.813
or a terrorist attack.

0:21:35.813,0:21:38.544
But that blackout risk disappears,

0:21:38.544,0:21:40.521
and all of the other risks are best managed,

0:21:40.536,0:21:42.790
with distributed renewables

0:21:42.790,0:21:47.067
organized into local micro-grids that normally interconnect,

0:21:47.067,0:21:48.875
but can stand alone at need.

0:21:48.875,0:21:50.913
That is, they can disconnect fractally

0:21:50.913,0:21:53.767
and then reconnect seamlessly.

0:21:53.767,0:21:57.044
That approach is exactly what the Pentagon is adopting

0:21:57.044,0:21:58.359
for its own power supply.

0:21:58.359,0:22:01.625
They think they need that; how about the rest of us that they're defending?

0:22:01.625,0:22:03.310
We want our stuff to work too.

0:22:03.325,0:22:06.895
At about the same cost as business as usual,

0:22:06.895,0:22:08.900
this would maximize national security,

0:22:08.900,0:22:12.902
customer choice, entrepreneurial opportunity

0:22:12.902,0:22:14.525
and innovation.

0:22:14.525,0:22:20.200
Together, efficient use and diverse dispersed renewable supply

0:22:20.200,0:22:23.123
are starting to transform the whole electricity sector.

0:22:23.123,0:22:24.754
Traditionally utilities build

0:22:24.754,0:22:26.923
a lot of giant coal and nuclear plants

0:22:26.923,0:22:28.869
and a bunch of big gas plants

0:22:28.869,0:22:29.938
and maybe a little bit of efficiency renewables.

0:22:29.938,0:22:32.467
And those utilities were rewarded,

0:22:32.467,0:22:34.921
as they still are in 34 states,

0:22:34.921,0:22:38.387
for selling you more electricity.

0:22:38.387,0:22:41.185
However, especially where regulators

0:22:41.185,0:22:44.738
are now instead rewarding cutting your bills,

0:22:44.738,0:22:48.521
the investments are shifting radically

0:22:48.521,0:22:51.052
toward efficiency, demand response, cogeneration,

0:22:51.052,0:22:54.421
renewables and ways to knit them all together reliably

0:22:54.421,0:22:55.844
with less transmission

0:22:55.844,0:22:58.698
and little or no bulk electricity storage.

0:22:58.698,0:23:01.525
So our energy future is not fate, but choice,

0:23:01.525,0:23:04.271
and that choice is very flexible.

0:23:04.271,0:23:05.871
In 1976, for example,

0:23:05.871,0:23:07.679
government and industry insisted

0:23:07.695,0:23:10.279
that the amount of energy needed to make a dollar of GDP

0:23:10.279,0:23:12.062
could never go down.

0:23:12.062,0:23:15.692
And I heretically suggested it could go down several-fold.

0:23:15.692,0:23:17.941
Well that's what's actually happened so far.

0:23:17.956,0:23:19.271
It's fallen by half.

0:23:19.271,0:23:21.762
But with today's much better technologies,

0:23:21.762,0:23:24.671
more mature delivery channels and integrative design,

0:23:24.671,0:23:28.571
we can do far more and even cheaper.

0:23:28.571,0:23:31.079
So to solve the energy problem,

0:23:31.079,0:23:33.000
we just needed to enlarge it.

0:23:33.000,0:23:36.200
And the results may at first seem incredible,

0:23:36.200,0:23:37.977
but as Marshall McLuhan said,

0:23:37.977,0:23:40.729
"Only puny secrets need protection.

0:23:40.729,0:23:46.813
Big discoveries are protected by public incredulity."

0:23:46.813,0:23:50.295
Now combine the electricity and oil revolutions,

0:23:50.295,0:23:51.979
both driven by modern efficiency,

0:23:51.979,0:23:55.521
and you get the really big story: reinventing fire,

0:23:55.521,0:24:00.652
where business enabled and sped by smart policies in mindful markets

0:24:00.652,0:24:05.182
can lead the United States completely off oil and coal by 2050,

0:24:05.182,0:24:07.502
saving 5 trillion dollars,

0:24:07.502,0:24:10.095
growing the economy 2.6-fold,

0:24:10.095,0:24:11.738
strengthening out national security,

0:24:11.738,0:24:14.723
oh, and by the way, by getting rid of the oil and coal,

0:24:14.723,0:24:19.233
reducing the fossil carbon emissions by 82 to 86 percent.

0:24:19.233,0:24:22.567
Now if you like any of those outcomes,

0:24:22.567,0:24:24.759
you can support reinventing fire

0:24:24.759,0:24:26.621
without needing to like all of them

0:24:26.621,0:24:30.044
and without needing to agree about which of them is most important.

0:24:30.044,0:24:33.121
So focusing on outcomes, not motives,

0:24:33.121,0:24:35.677
can turn gridlock and conflict

0:24:35.677,0:24:39.979
into a unifying solution to America's energy challenge.

0:24:39.979,0:24:43.036
This also turns out to be the best way

0:24:43.036,0:24:45.536
to cope with global challenges --

0:24:45.536,0:24:48.115
climate change, nuclear proliferation,

0:24:48.115,0:24:50.546
energy insecurity, energy poverty --

0:24:50.546,0:24:54.192
all of which make us less safe.

0:24:54.192,0:24:57.879
Now our team at RMI helps smart companies

0:24:57.879,0:25:00.948
to get unstuck and speed this journey

0:25:00.948,0:25:04.010
via six sectoral initiatives, with some more hatching.

0:25:04.010,0:25:06.967
Of course there's still a lot of old thinking out there too.

0:25:06.967,0:25:10.144
Former oil man Maurice Strong said,

0:25:10.144,0:25:12.090
"Not all the fossils are in the fuel."

0:25:12.090,0:25:16.395
But as Edgar Woolard, who used to chair Dupont, reminds us,

0:25:16.395,0:25:20.541
"Companies hampered by old thinking won't be a problem

0:25:20.541,0:25:26.121
because," he said," they simply won't be around long-term."

0:25:26.121,0:25:28.985
I've described not just a once-in-a-civilization

0:25:28.985,0:25:30.592
business opportunity,

0:25:30.592,0:25:33.015
but one of the most profound transitions

0:25:33.015,0:25:35.531
in the history of our species.

0:25:35.531,0:25:38.954
We humans are inventing a new fire,

0:25:38.954,0:25:40.698
not dug from below,

0:25:40.698,0:25:43.605
but flowing from above;

0:25:43.605,0:25:46.536
not scarce, but bountiful;

0:25:46.536,0:25:48.236
not local, but everywhere;

0:25:48.236,0:25:50.867
not transient, but permanent;

0:25:50.867,0:25:53.767
not costly, but free.

0:25:53.767,0:25:57.167
And but for a little transitional tail of natural gas

0:25:57.167,0:26:00.729
and a bit of biofuel grown in ways that sustain and endure,

0:26:00.729,0:26:04.438
this new fire is flameless.

0:26:04.438,0:26:08.502
Efficiently used, it really can do our work

0:26:08.502,0:26:11.356
without working our undoing.

0:26:11.356,0:26:16.238
Each of you owns a piece of that $5 trillion prize.

0:26:16.238,0:26:18.492
And our new book "Reinventing Fire"

0:26:18.492,0:26:20.877
describes how you can capture it.

0:26:20.877,0:26:23.146
So with the conversation just begun

0:26:23.146,0:26:25.031
at ReinventingFire.com,

0:26:25.031,0:26:27.162
let me invite you each

0:26:27.162,0:26:31.000
to engage with us and with each other, with everyone around you,

0:26:31.000,0:26:33.792
to help make the world richer, fairer,

0:26:33.792,0:26:36.400
cooler and safer

0:26:36.400,0:26:39.208
by together reinventing fire.

0:26:39.208,0:26:41.067
Thank you.

0:26:41.067,0:26:42.467
(Applause)