Remarks to the US-EU Business Technology Roundtable

Chief Operating Officer Paul Dickerson's remarks at American Chamber of Commerce in Madrid, Spain.

June 25, 2007

Let me first thank the Ambassador Aguirre for his and the Embassy's support of these programs. Ambassador, we are lucky to have you posted in such an important country.

I would like to offer a special thanks to Jaime Malet, Chair of the American Chamber of Commerce here in Spain, for hosting us this week.

I'd also like to express my thanks to one of the tireless advocates for US-Latino and US-Spanish relations, who is here in the audience with us today, Mr. Raul Romero. Without people like him, making sure we have international exchanges of ideas, this kind of event simply wouldn't happen.

And so I am grateful to Ambassador Aguirre and Jaime and Raul and to all the others in this room who seek to cross borders and break down barriers in order to solve big problems.

Already today, we've heard some out-of-the-box thinking about energy. We've talked about whether we're running out of fossil fuels. We've talked about what might replace them. We have talked about innovation and about where and how and why it is happening today.

Alternative energy is not just an interesting idea. It is a multinational, multi-billion dollar industry built entirely on the promise of real-world innovation.

Innovation that is as effective and profitable as it is revolutionary. Innovation that cleans our air, powers our economies and aids our security.

The challenges we face are not unknown: climate change, limited fossil fuels, unstable energy markets.

The industrialized world needs a diverse energy supply, and we need to use that energy in clean and responsible ways.

These are challenges we all have a stake in meeting—and we are setting big goals to do just that.

The EU set a strong example this spring by committing to cut greenhouse gases by 20% by 2020 while replacing 20% of your energy requirements with renewable sources.

These commitments were echoed at the recent G-8 summit in Germany, where G-8 leaders reaffirmed their commitments to work towards the reduction and elimination of tariffs on environmental technologies. Where they agreed to accelerate the development and deployment of clean energy technologies, and where they set-out a long-term vision to substantially reduce greenhouse gas emissions.

These commitments from the international community excite me because they are backed by more than words.

Today, in Europe I see more than promises of next generation energy. I see conservation, energy security, and innovation in action. In Spain, I see many success stories. One company is developing two innovative power plants, using sun-tracking mirrors and a central thermal tower.

The first of these will go online soon, and when it does, it will be the first commercial solar power tower facility in the world. This, ladies and gentlemen, is private sector innovation in action.

In Germany, I see the biodiesel boom. Germany currently sells home-grown biodiesel at 1,500 fueling stations across the country, and the average distance between these pumps is just 30 kilometers. You can buy a car in Germany today and never fill it with a drop of gasoline.

Each country in Europe is pursuing its own strategy, based on its own unique advantages.

And we are starting to see the fruits of this labor pay off today as new alternatives come online.

Now, changing our energy infrastructure takes time, innovation, and real political leadership. And there are challenges.

We know that the EU is wrestling with some of the same issues we are—profitability, taxation, import tariffs. But through conferences like these, we are making progress together.

I am here today to learn more about how the international community can work together to build the energy economy of the next century.

As the recent G8 meeting made clear, my country shares with the EU a commitment to a healthier, more efficient, and safer planet. We believe that alternative fuels and energy efficiency are the key to energy security in the 21st century, and we are committed to working with our neighbors across the ocean to advance that mission.

President Bush is clear when it comes to America's energy situation. He describes it as an oil addiction, and he has committed his administration to breaking that habit. Energy security is at the absolute top of the President's agenda, a point he made clearly in this year's State of the Union address, his most important domestic policy speech of the year.

For too long, he said, our nation has been dependent on foreign oil. And this dependence leaves us more vulnerable to hostile regimes, and to terrorists. It's in our vital interest to diversify America's energy supply—and the way forward is through technology.

Today, I am happy to report that we are making real progress. We have turned the corner on renewable fuels in America, turning locally made biodiesel and ethanol from a promise into a product.

Over 6 billion gallons of ethanol were produced in the United States last year, and we have an additional 5 billion gallons of refining capacity under construction. This effort means 500 million fewer barrels of oil that we have to import from the Middle East.

Yet, our President is not satisfied. In his State of the Union speech, he also set a huge goal for my country, not unlike your own goal. He expects the U.S. to reduce its gasoline use by 20% in 10 years—"20 in 10," he calls it.

There are some cynics who say it is an impossible goal, particularly for America, with our big cars and wide open spaces.

But, friends, we know that the cynics are wrong. We know because we see amazing progress around the world. We see the tremendous strides being made in the sugar cane fields of Brazil. We see the political and technological commitments of Europe, and we see a biofuels industry emerging in virtually every industrialized nation on the planet.

In the U.S., President Bush has backed-up his goal with the biggest commitment our country has ever made to developing, using, and importing alternative fuels. It boils down to a two-step plan.

Step one? Use less.

The president has asked Washington policymakers and the automotive industry to find a way to improve fuel economy for our cars and trucks.

The goal is to reduce demand by 5%—or 8.5 billion gallons per year—by 2017.

Step one is not a problem that the U.S. will solve by itself, nor will our success remain only ours to enjoy. Instead, we are building on the innovations in design and manufacture that have come from Asia and Europe, as well as the U.S. We are already seeing the automotive industry respond to this challenge with a new wave of hybrids, high-efficiency diesel engines, and electric cars, all of which will be available to global markets. Like the broader energy challenge, it is a global solution.

Step two is even bigger.

Step two is to replace the equivalent of 35 billion gallons of gasoline each year with renewable fuels. The President has challenged America's farmers and entrepreneurs to find ways to replace oil imports with renewable fuels we can grow at home. And where we can't grow enough energy, we will look to others to supply us with exports where they can.

The issue of imported energy, and energy technology, is one which the United States is keenly aware of, and one that I know resounds in Europe. We have wrestled with the same issues—how do we keep our own alternative energy industry vibrant on one hand, yet increase consumer acceptance through lower prices on the other?

Without both, our plans—your plans—will fail. But we won't fail.

We won't fail because the industrialized economies of the world have become innovation economies. And ultimately, technology is the key to achieving these dual goals of using less and using alternatives.

The innovations need to cross borders. We impose billions and billions of dollars of tariffs on each other globally. And friends, they are slowing us all down. It is time to remove those barriers.

Like you, we believe that a policy of free and fair trade will promote innovation and enhance the energy security of all countries willing to participate on an even playing field.

In the end, we think the President's "20 in 10" goal is not only achievable—it is critical to both the U.S. and global economies, and to the environmental legacy we pass down to our children and grandchildren.

Here is how we are approaching it. First, we built a team. Sometimes in Washington, we can lose sight of the resources we already have. So last year we put all the smart people from a broad array of Federal agencies in one room, took inventory, and divvied up the work.

Soon, we will be releasing a National Biofuels Action Plan that will outline the specific, ambitious, but achievable steps each agency will undertake to make "20 in 10" a reality.

Second, we are putting our resources to work with the people who can use them best—the private sector.

The hundreds of millions of dollars we are committing to biofuels development will not go just to academics or pilot program think tanks. Those funds will go right out into our communities where the real work gets done. Communities like Austin, Texas, where it is hard to find a gas station that isn't selling biodiesel. Or to the "Ethanol Corridor," a stretch in the American heartland where you can travel for 1,500 kilometers while filling up on ethanol at over 1,000 gas stations along the way.

And we are looking at specific problems as well. My office recently announced nearly $600 million dollars to help fund cellulosic ethanol plants in the US. We realize that the role of government is to nurture innovation, and not to dictate solutions. So we are making hundreds and hundreds of small investments, each designed to keep the white hot flame of alternative energy burning.

And, friends, it is paying off. A few years ago, we saw the cost of the enzymes used to make ethanol were too high. So we invested $30 million with a biotech company—and they cut costs by 90%.

Those kinds of savings are important because ultimately—whether it is the United States or the EU—the business of alternative energy has to be competitive if we are going to succeed in the long-term.

And, so far, the signs are good. Some of the smartest investors in the world are investing in energy innovation. The truth is, if you come up with a good idea, the markets will fund it—faster, more efficiently, and smarter than any government could.

We are looking for a big change. The world has built its economy on an engine driven by fossil fuels. And it is going to take everyone—the private sector, the government, and consumers—to move towards a more sustainable solution.

Just as no single company could develop the technology to send a man to the moon, so too can no single company, or even country, tackle this problem by itself. Each of us need to lend our support. It is not going to be easy, and we won't always agree. But everyone in this room knows that long-term, we must move towards a more sustainable energy economy.

It's inevitable. Whether it is next year, next decade, or 100 years from now, the earth will eventually demand new forms of energy and smarter ways of using it. And yet, in a free market, it can be difficult to make this monumental shift. Yet, if the economic alternative is always oil, then the difference between $35 and $70 a barrel is the difference between doing something and doing nothing.

And we can't afford to do nothing. And so free countries are doing what they must to ensure their futures. Each of us, in our own way, will have to determine how to support our own alternative energy industry. And we will have to learn how to relate to each other in this new economy.

There are no magic answers. There is no single, correct approach to subsidies, research investment, tariffs, carbon credits or technology transfers. Every country has its own market dynamics, and its own real challenges.

But the good news is that this diversity of approaches makes success more likely. In a world where we so often find ourselves in ideological conflict, renewable energy creates a bridge.

The U.S., and indeed the world's, addiction to oil covers more than ideological boundaries—it blankets the globe. And puts every aspect of our daily lives at risk.

In times of conflict, our dependency on a handful of players for our energy needs gives a weapon to those who would do us harm. I believe that the emerging global energy economy will be an unprecedented success story.

By working together, we should hope, indeed we should expect, that 10 years from today the world will look back on this as the time when the US and the EU pulled together to fundamentally change how we deal with our energy needs. By learning to take sun, soil, smarts, and sweat, and make our energy out of the earth, rather than take it, we are setting the stage for a future of wealth, security, and prosperity.

Ladies and gentlemen, that's a big dream. But it is one I am proud to say we are all working towards together.

Thank you.