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America's public energy conversation

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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

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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

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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

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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

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or national security, or environmental stewardship

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and climate protection and public health,

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reinventing fire makes sense and makes money.

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General Eisenhower reputedly said

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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,

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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,

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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,

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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

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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

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this carbon fiber plugin hybrid

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getting 230 miles a gallon.

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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

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by needing fewer batteries.

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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

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American manufacturing technology

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was used to make this little carbon fiber test part,

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which doubles as a carbon cap.

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(Laughter)

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In one minute -- and you can tell from the sound

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how immensely stiff and strong it is.

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Don't worry about dropping it, it's tougher than titanium.

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Tom Friedman actually whacked it as hard as he could with a sledgehammer

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without even scuffing it.

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But such manufacturing techniques

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can scale to automotive speed and cost

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with aerospace performance.

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They can save four-fifths of the capital needed to make autos.

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They can save lives

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because this stuff can absorb

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up to 12 times as much crash energy per pound as steel.

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If we made all of our autos this way,

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it would save oil equivalent to finding

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one and a half Saudi Arabias, or half an OPEC,

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by drilling in the Detroit formation, a very prospective play.

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And all those mega-barrels under Detroit

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cost an average of 18 bucks a barrel.

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They are all-American, carbon-free

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and inexhaustible.

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The same physics and the same business logic

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also apply to big vehicles.

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In the five years ending with 2010,

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Walmart saved 60 percent of the fuel per ton-mile

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in its giant fleet of heavy trucks

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through better logistics and design.

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But just the technological savings in heavy trucks

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can get to two-thirds.

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And combined with triple to quintuple efficiency airplanes,

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now on the drawing board,

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can save close to a trillion dollars.

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Also today's military revolution in energy efficiency

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is going to speed up all of these civilian advances

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in much the same way that military R&D

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has given us the Internet, the Global Positioning System

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and the jet engine and microchip industries.

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As we design and build vehicles better,

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we can also use them smarter

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by harnessing four powerful techniques

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for eliminating needless driving.

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Instead of just seeing the travel grow,

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we can use innovative pricing,

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charging for road infrastructure by the mile, not by the gallon.

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We can use some smart IT to enhance transit

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and enable car sharing and ride sharing.

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We can allow smart and lucrative growth models

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that help people already be near where they want to be,

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so they don't need to go somewhere else.

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And we can use smart IT

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to make traffic free-flowing.

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Together, those things can give us the same or better access

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with 46 to 84 percent less driving,

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saving another 0.4 trillion dollars,

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plus 0.3 trillion dollars from using trucks more productively.

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So 40 years hence, when you add it all up,

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a far more mobile U.S. economy

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can use no oil.

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Saving or displacing barrels for 25 bucks

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rather than buying them for over a hundred,

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adds up to a $4 trillion net saving

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counting all the hidden costs at zero.

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So to get mobility without oil,

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to phase out the oil,

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we can get efficient and then switch fuels.

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Those 125 to 240 mile-per-gallon-equivalent autos

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can use any mixture of hydrogen fuel cells,

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electricity and advanced biofuels.

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The trucks and planes can realistically use

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hydrogen or advanced biofuels.

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The trucks could even use natural gas.

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But no vehicles will need oil.

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And the most biofuel we might need,

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just three million barrels a day,

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can be made two-thirds from waste

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without displacing any cropland

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and without harming soil or climate.

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Our team speeds up these kinds of oil savings

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by what we call "institutional acupuncture."

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We figure out where the business logic

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is congested and not flowing properly,

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we stick little needles in it to get it flowing,

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working with partners like Ford and Walmart and the Pentagon.

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And the long transition is already well under way.

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In fact, three years ago mainstream analysts were starting to see peak oil,

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not in supply, but in demand.

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And Deutsche Bank even said world oil use could peak around 2016.

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In other words, oil is getting uncompetitive even at low prices

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before it becomes unavailable even at high prices.

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But the electrified vehicles

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don't need to burden the electricity grid.

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Rather, when smart autos exchange electricity and information

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through smart buildings with smart grids,

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they're adding to the grid valuable flexibility and storage

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that help the grid integrate

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varying solar and wind power.

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So the electrified autos

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make the auto and electricity problems

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easier to solve together than separately.

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And they also converge the oil story

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with our second big story,

270
00:12:40,548 --> 00:12:44,308
saving electricity and then making it differently.

271
00:12:44,308 --> 00:12:47,290
And those twin revolutions in electricity

272
00:12:47,290 --> 00:12:50,344
will bring to that sector

273
00:12:50,344 --> 00:12:53,129
more numerous and profound and diverse disruptions

274
00:12:53,129 --> 00:12:54,490
than any other sector,

275
00:12:54,490 --> 00:12:58,705
because we've got 21st century technology and speed colliding head-on

276
00:12:58,705 --> 00:13:03,400
with 20th and 19th century institutions, rules and cultures.

277
00:13:03,400 --> 00:13:06,475
Changing how we make electricity gets easier

278
00:13:06,475 --> 00:13:08,990
if we need less of it.

279
00:13:08,990 --> 00:13:10,652
Most of it now is wasted

280
00:13:10,652 --> 00:13:12,633
and the technologies for saving it

281
00:13:12,633 --> 00:13:15,587
keep improving faster than we're installing them.

282
00:13:15,587 --> 00:13:18,033
So the unbought efficiency resource

283
00:13:18,033 --> 00:13:20,933
keeps getting ever bigger and cheaper.

284
00:13:20,933 --> 00:13:23,995
But as efficiency in buildings and industry

285
00:13:23,995 --> 00:13:25,967
starts to grow faster than the economy,

286
00:13:25,967 --> 00:13:30,390
America's electricity use could actually shrink,

287
00:13:30,390 --> 00:13:33,987
even with the little extra use required

288
00:13:33,987 --> 00:13:35,967
for those efficient electrified autos.

289
00:13:35,967 --> 00:13:40,795
And we can do this just by reasonably accelerating existing trends.

290
00:13:40,795 --> 00:13:43,133
Over the next 40 years, buildings,

291
00:13:43,133 --> 00:13:45,341
which use three-quarters of the electricity,

292
00:13:45,341 --> 00:13:49,175
can triple or quadruple their energy productivity,

293
00:13:49,175 --> 00:13:53,100
saving 1.4 trillion dollars, net present value,

294
00:13:53,100 --> 00:13:56,700
with a 33 percent internal rate of return

295
00:13:56,700 --> 00:13:58,371
or in English,

296
00:13:58,371 --> 00:14:01,567
the savings are worth four times what they cost.

297
00:14:01,567 --> 00:14:03,805
And industry can accelerate too,

298
00:14:03,805 --> 00:14:05,521
doubling its energy productivity

299
00:14:05,521 --> 00:14:08,469
with a 21 percent internal rate of return.

300
00:14:08,469 --> 00:14:10,508
The key is a disruptive innovation

301
00:14:10,508 --> 00:14:13,331
that we call integrative design

302
00:14:13,331 --> 00:14:16,259
that often makes very big energy savings

303
00:14:16,259 --> 00:14:18,736
cost less than small or no savings.

304
00:14:18,736 --> 00:14:21,364
That is, it can give you expanding returns,

305
00:14:21,364 --> 00:14:23,218
not diminishing returns.

306
00:14:23,218 --> 00:14:26,964
That is how our 2010 retrofit

307
00:14:26,964 --> 00:14:30,167
is saving over two-fifths of the energy in the Empire State Building --

308
00:14:30,167 --> 00:14:34,321
remanufacturing those six and a half thousand windows on site

309
00:14:34,321 --> 00:14:38,633
into super windows that pass light, but reflect heat.

310
00:14:38,633 --> 00:14:41,818
plus better lights and office equipment and such

311
00:14:41,818 --> 00:14:45,433
cut the maximum cooling load by a third.

312
00:14:45,433 --> 00:14:50,500
And then renovating smaller chillers instead of adding bigger ones

313
00:14:50,500 --> 00:14:52,023
saved 17 million dollars of

314
00:14:52,023 --> 00:14:55,400
capital cost, which helped pay for the other improvements

315
00:14:55,400 --> 00:14:59,444
and reduce the payback to just three years.

316
00:14:59,444 --> 00:15:01,667
Integrative design can also increase

317
00:15:01,667 --> 00:15:03,875
energy savings in industry.

318
00:15:03,875 --> 00:15:05,867
Dow's billion-dollar efficiency investment

319
00:15:05,867 --> 00:15:09,167
has already returned nine billion dollars.

320
00:15:09,167 --> 00:15:12,113
But industry as a whole has another half-trillion dollars

321
00:15:12,113 --> 00:15:14,308
of energy still to save.

322
00:15:14,308 --> 00:15:18,867
For example, three-fifths of the world's electricity runs motors.

323
00:15:18,867 --> 00:15:20,936
Half of that runs pumps and fans.

324
00:15:20,936 --> 00:15:23,810
And those can all be made more efficient,

325
00:15:23,810 --> 00:15:25,525
and the motors that turn them

326
00:15:25,525 --> 00:15:29,175
can have their system efficiency roughly doubled

327
00:15:29,175 --> 00:15:33,090
by integrating 35 improvements, paying back in about a year.

328
00:15:33,090 --> 00:15:36,318
But first we ought to be capturing bigger, cheaper savings

329
00:15:36,318 --> 00:15:38,967
that are normally ignored and are not in the textbooks.

330
00:15:38,967 --> 00:15:42,121
For example, pumps, the biggest use of motors,

331
00:15:42,121 --> 00:15:43,938
move liquid through pipes.

332
00:15:43,938 --> 00:15:45,738
But a standard industrial pumping loop

333
00:15:45,738 --> 00:15:50,115
was redesigned to use at least 86 percent less energy,

334
00:15:50,115 --> 00:15:52,054
not by getting better pumps,

335
00:15:52,054 --> 00:15:55,436
but just by replacing long, thin, crooked pipes

336
00:15:55,436 --> 00:15:58,052
with fat, short, straight pipes.

337
00:15:58,052 --> 00:16:01,267
This is not about new technology,

338
00:16:01,267 --> 00:16:03,244
it's just rearranging our metal furniture.

339
00:16:03,244 --> 00:16:05,598
Of course, it also shrinks the pumping equipment

340
00:16:05,598 --> 00:16:07,313
and its capital costs.

341
00:16:07,313 --> 00:16:09,933
So what do such savings mean

342
00:16:09,933 --> 00:16:13,615
for the electricity that is three-fifths used in motors?

343
00:16:13,615 --> 00:16:16,715
Well, from the coal burned at the power plant

344
00:16:16,715 --> 00:16:19,836
through all these compounding losses,

345
00:16:19,836 --> 00:16:22,659
only a tenth of the fuel energy

346
00:16:22,659 --> 00:16:25,659
actually ends up coming out the pipe as flow.

347
00:16:25,659 --> 00:16:29,333
But now let's turn those compounding losses around backwards,

348
00:16:29,333 --> 00:16:34,964
and every unit of flow or friction that we save in the pipe

349
00:16:34,964 --> 00:16:39,108
saves 10 units of fuel cost, pollution

350
00:16:39,108 --> 00:16:41,715
and what Hunter Lovins calls "global weirding"

351
00:16:41,731 --> 00:16:43,133
back at the power plant.

352
00:16:43,133 --> 00:16:44,825
And of course, as you go back upstream,

353
00:16:44,825 --> 00:16:48,125
the components get smaller and therefore cheaper.

354
00:16:48,125 --> 00:16:52,705
Our team has lately found such snowballing energy savings

355
00:16:52,705 --> 00:16:55,938
in more than 30 billion dollars worth of industrial redesigns --

356
00:16:55,938 --> 00:16:58,667
everything from data centers and chip fabs

357
00:16:58,667 --> 00:17:00,859
to mines and refineries.

358
00:17:00,859 --> 00:17:02,300
Typically our retrofit designs

359
00:17:02,300 --> 00:17:05,254
save about 30 to 60 percent of the energy

360
00:17:05,254 --> 00:17:07,200
and pay back in a few years,

361
00:17:07,200 --> 00:17:11,354
while the new facility designs save 40 to 90-odd percent

362
00:17:11,369 --> 00:17:13,800
with generally lower capital cost.

363
00:17:13,800 --> 00:17:16,864
Now needing less electricity

364
00:17:16,864 --> 00:17:19,179
would ease and speed

365
00:17:19,179 --> 00:17:22,341
the shift to new sources of electricity, chiefly renewables.

366
00:17:22,341 --> 00:17:26,825
China leads their explosive growth and their plummeting cost.

367
00:17:26,825 --> 00:17:30,246
In fact, these solar power module costs

368
00:17:30,246 --> 00:17:32,625
have just fallen off the bottom of the chart.

369
00:17:32,625 --> 00:17:35,695
And Germany now has more solar workers

370
00:17:35,695 --> 00:17:38,333
than America has steel workers.

371
00:17:38,333 --> 00:17:40,179
Already in about 20 states

372
00:17:40,179 --> 00:17:42,533
private installers will come

373
00:17:42,533 --> 00:17:46,018
put those cheap solar cells on your roof with no money down

374
00:17:46,018 --> 00:17:47,887
and beat your utility bill.

375
00:17:47,887 --> 00:17:50,079
Such unregulated products

376
00:17:50,079 --> 00:17:52,933
could ultimately add up to a virtual utility

377
00:17:52,933 --> 00:17:55,887
that bypasses your electric company

378
00:17:55,887 --> 00:17:59,718
just as your cellphone bypassed your wireline phone company.

379
00:17:59,718 --> 00:18:03,136
And this sort of thing gives utility executives the heebee-jeebees

380
00:18:03,136 --> 00:18:05,359
and it gives venture capitalists sweet dreams.

381
00:18:05,359 --> 00:18:08,452
Renewables are no longer a fringe activity.

382
00:18:08,452 --> 00:18:10,929
For each of the past four years

383
00:18:10,929 --> 00:18:13,767
half of the world's new generating capacity

384
00:18:13,767 --> 00:18:15,364
has been renewable,

385
00:18:15,364 --> 00:18:17,056
mainly lately in developing countries.

386
00:18:17,056 --> 00:18:21,348
In 2010, renewables other than big hydro,

387
00:18:21,348 --> 00:18:23,679
particularly wind and solar cells,

388
00:18:23,679 --> 00:18:28,671
got 151 billion dollars of private investment,

389
00:18:28,671 --> 00:18:31,256
and they actually surpassed the total installed capacity

390
00:18:31,256 --> 00:18:32,941
of nuclear power in the world

391
00:18:32,941 --> 00:18:36,400
by adding 60 billion watts in that one year.

392
00:18:36,400 --> 00:18:40,100
That happens to be the same amount of solar cell capacity

393
00:18:40,100 --> 00:18:42,915
that the world can now make every year --

394
00:18:42,915 --> 00:18:46,262
a number that goes up 60 or 70 percent a year.

395
00:18:46,262 --> 00:18:51,795
In contrast, the net additions of nuclear capacity and coal capacity

396
00:18:51,795 --> 00:18:55,364
and the orders behind those keep fading

397
00:18:55,364 --> 00:18:57,900
because they cost too much and they have too much financial risk.

398
00:18:57,900 --> 00:18:59,300
In fact in this country,

399
00:18:59,300 --> 00:19:01,415
no new nuclear power plant

400
00:19:01,415 --> 00:19:03,933
has been able to raise any private construction capital,

401
00:19:03,933 --> 00:19:08,348
despite seven years of 100-plus percent subsidies.

402
00:19:08,348 --> 00:19:12,352
So how else could we replace the coal-fired power plants?

403
00:19:12,352 --> 00:19:16,121
Well efficiency and gas can displace them all

404
00:19:16,121 --> 00:19:18,805
at just below their operating cost

405
00:19:18,805 --> 00:19:22,559
and, combined with renewables, can displace them more than 23 times

406
00:19:22,559 --> 00:19:24,633
at less than their replacement cost.

407
00:19:24,633 --> 00:19:26,641
But we only need to replace them once.

408
00:19:26,641 --> 00:19:29,329
We're often told though

409
00:19:29,329 --> 00:19:31,710
that only coal and nuclear plants can keep the lights on,

410
00:19:31,710 --> 00:19:32,995
because they're 24/7,

411
00:19:32,995 --> 00:19:35,818
whereas wind and solar power are variable,

412
00:19:35,818 --> 00:19:38,833
and hence supposedly unreliable.

413
00:19:38,833 --> 00:19:42,218
Actually no generator is 24/7. They all break.

414
00:19:42,218 --> 00:19:44,333
And when a big plant goes down,

415
00:19:44,333 --> 00:19:47,125
you lose a thousand megawatts in milliseconds,

416
00:19:47,125 --> 00:19:50,618
often for weeks or months, often without warning.

417
00:19:50,618 --> 00:19:52,615
That is exactly why we've designed the grid

418
00:19:52,615 --> 00:19:56,885
to back up failed plants with working plants.

419
00:19:56,885 --> 00:19:58,615
And in exactly the same way,

420
00:19:58,615 --> 00:20:03,646
the grid can handle wind and solar power's

421
00:20:03,646 --> 00:20:06,195
forecastable variations.

422
00:20:06,195 --> 00:20:09,502
Hourly simulations

423
00:20:09,502 --> 00:20:13,269
show that largely or wholly renewable grids

424
00:20:13,269 --> 00:20:15,046
can deliver highly reliable power

425
00:20:15,046 --> 00:20:16,675
when they're forecasted,

426
00:20:16,675 --> 00:20:18,729
integrated and diversified

427
00:20:18,729 --> 00:20:20,782
by both type and location.

428
00:20:20,782 --> 00:20:25,005
And that's true both for continental areas like the U.S. or Europe

429
00:20:25,005 --> 00:20:29,490
and for smaller areas embedded within a larger grid.

430
00:20:29,490 --> 00:20:31,129
That is how, for example,

431
00:20:31,129 --> 00:20:33,513
four German states in 2010

432
00:20:33,513 --> 00:20:36,110
were 43 to 52 percent wind powered.

433
00:20:36,125 --> 00:20:39,767
Portugal was 45 percent renewable powered,

434
00:20:39,767 --> 00:20:42,092
Denmark 36.

435
00:20:42,092 --> 00:20:45,377
And it's how all of Europe can shift

436
00:20:45,377 --> 00:20:46,662
to renewable electricity.

437
00:20:46,662 --> 00:20:51,387
In America, our aging, dirty and insecure power system

438
00:20:51,387 --> 00:20:54,271
has to be replaced anyway by 2050.

439
00:20:54,271 --> 00:20:55,898
And whatever we replace it with

440
00:20:55,898 --> 00:20:57,336
is going to cost about the same,

441
00:20:57,336 --> 00:21:00,046
about six trillion dollars at present value --

442
00:21:00,046 --> 00:21:02,254
whether we buy more of what we've got

443
00:21:02,254 --> 00:21:04,367
or new nuclear and so-called clean coal,

444
00:21:04,367 --> 00:21:07,998
or renewables that are more or less centralized.

445
00:21:07,998 --> 00:21:11,267
But those four futures at the same cost

446
00:21:11,267 --> 00:21:13,336
differ profoundly in their risks,

447
00:21:13,336 --> 00:21:15,867
around national security,

448
00:21:15,867 --> 00:21:19,405
fuel, water, finance, technology,

449
00:21:19,405 --> 00:21:20,936
climate and health.

450
00:21:20,936 --> 00:21:23,771
For example, our over-centralized grid

451
00:21:23,771 --> 00:21:27,702
is very vulnerable to cascading

452
00:21:27,702 --> 00:21:30,429
and potentially economy-shattering blackouts

453
00:21:30,429 --> 00:21:33,867
caused by bad space weather or other natural disasters

454
00:21:33,867 --> 00:21:35,813
or a terrorist attack.

455
00:21:35,813 --> 00:21:38,544
But that blackout risk disappears,

456
00:21:38,544 --> 00:21:40,521
and all of the other risks are best managed,

457
00:21:40,536 --> 00:21:42,790
with distributed renewables

458
00:21:42,790 --> 00:21:47,067
organized into local micro-grids that normally interconnect,

459
00:21:47,067 --> 00:21:48,875
but can stand alone at need.

460
00:21:48,875 --> 00:21:50,913
That is, they can disconnect fractally

461
00:21:50,913 --> 00:21:53,767
and then reconnect seamlessly.

462
00:21:53,767 --> 00:21:57,044
That approach is exactly what the Pentagon is adopting

463
00:21:57,044 --> 00:21:58,359
for its own power supply.

464
00:21:58,359 --> 00:22:01,625
They think they need that; how about the rest of us that they're defending?

465
00:22:01,625 --> 00:22:03,310
We want our stuff to work too.

466
00:22:03,325 --> 00:22:06,895
At about the same cost as business as usual,

467
00:22:06,895 --> 00:22:08,900
this would maximize national security,

468
00:22:08,900 --> 00:22:12,902
customer choice, entrepreneurial opportunity

469
00:22:12,902 --> 00:22:14,525
and innovation.

470
00:22:14,525 --> 00:22:20,200
Together, efficient use and diverse dispersed renewable supply

471
00:22:20,200 --> 00:22:23,123
are starting to transform the whole electricity sector.

472
00:22:23,123 --> 00:22:24,754
Traditionally utilities build

473
00:22:24,754 --> 00:22:26,923
a lot of giant coal and nuclear plants

474
00:22:26,923 --> 00:22:28,869
and a bunch of big gas plants

475
00:22:28,869 --> 00:22:29,938
and maybe a little bit of efficiency renewables.

476
00:22:29,938 --> 00:22:32,467
And those utilities were rewarded,

477
00:22:32,467 --> 00:22:34,921
as they still are in 34 states,

478
00:22:34,921 --> 00:22:38,387
for selling you more electricity.

479
00:22:38,387 --> 00:22:41,185
However, especially where regulators

480
00:22:41,185 --> 00:22:44,738
are now instead rewarding cutting your bills,

481
00:22:44,738 --> 00:22:48,521
the investments are shifting radically

482
00:22:48,521 --> 00:22:51,052
toward efficiency, demand response, cogeneration,

483
00:22:51,052 --> 00:22:54,421
renewables and ways to knit them all together reliably

484
00:22:54,421 --> 00:22:55,844
with less transmission

485
00:22:55,844 --> 00:22:58,698
and little or no bulk electricity storage.

486
00:22:58,698 --> 00:23:01,525
So our energy future is not fate, but choice,

487
00:23:01,525 --> 00:23:04,271
and that choice is very flexible.

488
00:23:04,271 --> 00:23:05,871
In 1976, for example,

489
00:23:05,871 --> 00:23:07,679
government and industry insisted

490
00:23:07,695 --> 00:23:10,279
that the amount of energy needed to make a dollar of GDP

491
00:23:10,279 --> 00:23:12,062
could never go down.

492
00:23:12,062 --> 00:23:15,692
And I heretically suggested it could go down several-fold.

493
00:23:15,692 --> 00:23:17,941
Well that's what's actually happened so far.

494
00:23:17,956 --> 00:23:19,271
It's fallen by half.

495
00:23:19,271 --> 00:23:21,762
But with today's much better technologies,

496
00:23:21,762 --> 00:23:24,671
more mature delivery channels and integrative design,

497
00:23:24,671 --> 00:23:28,571
we can do far more and even cheaper.

498
00:23:28,571 --> 00:23:31,079
So to solve the energy problem,

499
00:23:31,079 --> 00:23:33,000
we just needed to enlarge it.

500
00:23:33,000 --> 00:23:36,200
And the results may at first seem incredible,

501
00:23:36,200 --> 00:23:37,977
but as Marshall McLuhan said,

502
00:23:37,977 --> 00:23:40,729
"Only puny secrets need protection.

503
00:23:40,729 --> 00:23:46,813
Big discoveries are protected by public incredulity."

504
00:23:46,813 --> 00:23:50,295
Now combine the electricity and oil revolutions,

505
00:23:50,295 --> 00:23:51,979
both driven by modern efficiency,

506
00:23:51,979 --> 00:23:55,521
and you get the really big story: reinventing fire,

507
00:23:55,521 --> 00:24:00,652
where business enabled and sped by smart policies in mindful markets

508
00:24:00,652 --> 00:24:05,182
can lead the United States completely off oil and coal by 2050,

509
00:24:05,182 --> 00:24:07,502
saving 5 trillion dollars,

510
00:24:07,502 --> 00:24:10,095
growing the economy 2.6-fold,

511
00:24:10,095 --> 00:24:11,738
strengthening out national security,

512
00:24:11,738 --> 00:24:14,723
oh, and by the way, by getting rid of the oil and coal,

513
00:24:14,723 --> 00:24:19,233
reducing the fossil carbon emissions by 82 to 86 percent.

514
00:24:19,233 --> 00:24:22,567
Now if you like any of those outcomes,

515
00:24:22,567 --> 00:24:24,759
you can support reinventing fire

516
00:24:24,759 --> 00:24:26,621
without needing to like all of them

517
00:24:26,621 --> 00:24:30,044
and without needing to agree about which of them is most important.

518
00:24:30,044 --> 00:24:33,121
So focusing on outcomes, not motives,

519
00:24:33,121 --> 00:24:35,677
can turn gridlock and conflict

520
00:24:35,677 --> 00:24:39,979
into a unifying solution to America's energy challenge.

521
00:24:39,979 --> 00:24:43,036
This also turns out to be the best way

522
00:24:43,036 --> 00:24:45,536
to cope with global challenges --

523
00:24:45,536 --> 00:24:48,115
climate change, nuclear proliferation,

524
00:24:48,115 --> 00:24:50,546
energy insecurity, energy poverty --

525
00:24:50,546 --> 00:24:54,192
all of which make us less safe.

526
00:24:54,192 --> 00:24:57,879
Now our team at RMI helps smart companies

527
00:24:57,879 --> 00:25:00,948
to get unstuck and speed this journey

528
00:25:00,948 --> 00:25:04,010
via six sectoral initiatives, with some more hatching.

529
00:25:04,010 --> 00:25:06,967
Of course there's still a lot of old thinking out there too.

530
00:25:06,967 --> 00:25:10,144
Former oil man Maurice Strong said,

531
00:25:10,144 --> 00:25:12,090
"Not all the fossils are in the fuel."

532
00:25:12,090 --> 00:25:16,395
But as Edgar Woolard, who used to chair Dupont, reminds us,

533
00:25:16,395 --> 00:25:20,541
"Companies hampered by old thinking won't be a problem

534
00:25:20,541 --> 00:25:26,121
because," he said," they simply won't be around long-term."

535
00:25:26,121 --> 00:25:28,985
I've described not just a once-in-a-civilization

536
00:25:28,985 --> 00:25:30,592
business opportunity,

537
00:25:30,592 --> 00:25:33,015
but one of the most profound transitions

538
00:25:33,015 --> 00:25:35,531
in the history of our species.

539
00:25:35,531 --> 00:25:38,954
We humans are inventing a new fire,

540
00:25:38,954 --> 00:25:40,698
not dug from below,

541
00:25:40,698 --> 00:25:43,605
but flowing from above;

542
00:25:43,605 --> 00:25:46,536
not scarce, but bountiful;

543
00:25:46,536 --> 00:25:48,236
not local, but everywhere;

544
00:25:48,236 --> 00:25:50,867
not transient, but permanent;

545
00:25:50,867 --> 00:25:53,767
not costly, but free.

546
00:25:53,767 --> 00:25:57,167
And but for a little transitional tail of natural gas

547
00:25:57,167 --> 00:26:00,729
and a bit of biofuel grown in ways that sustain and endure,

548
00:26:00,729 --> 00:26:04,438
this new fire is flameless.

549
00:26:04,438 --> 00:26:08,502
Efficiently used, it really can do our work

550
00:26:08,502 --> 00:26:11,356
without working our undoing.

551
00:26:11,356 --> 00:26:16,238
Each of you owns a piece of that $5 trillion prize.

552
00:26:16,238 --> 00:26:18,492
And our new book "Reinventing Fire"

553
00:26:18,492 --> 00:26:20,877
describes how you can capture it.

554
00:26:20,877 --> 00:26:23,146
So with the conversation just begun

555
00:26:23,146 --> 00:26:25,031
at ReinventingFire.com,

556
00:26:25,031 --> 00:26:27,162
let me invite you each

557
00:26:27,162 --> 00:26:31,000
to engage with us and with each other, with everyone around you,

558
00:26:31,000 --> 00:26:33,792
to help make the world richer, fairer,

559
00:26:33,792 --> 00:26:36,400
cooler and safer

560
00:26:36,400 --> 00:26:39,208
by together reinventing fire.

561
00:26:39,208 --> 00:26:41,067
Thank you.

562
00:26:41,067 --> 00:26:42,467
(Applause)