Remarks at Cleantech Forum XVI

Assistant Secretary Alexander Karsner's complete remarks to Cleantech Forum XVI in San Francisco, California.

February 27, 2008

See a short video excerpt of this speech on the Cleantech Network, LLC Web site, and the text version for this video.

Thank you everybody. I'm very excited and happy to be here. Nick and Keith and John and Lauren and all the people at Cleantech—thank you for having me back a third time. I hear that that's an unusual honor and I'm truly pleased to be here. It's a little bit like visiting the home team. It's not that I get all easy questions or that I have all the answers for this crowd, but it is certainly, as was pointed out, the very people I intended to connect with the very first days in office to enable the aspirations and the mission of the Office of Energy Efficiency and Renewable Energy. So, thank you for having me back.

It's also just special to be in this area where so much creativity occurs. Where so much imagination turns into invested business plans and manifest results. I like to call it The Creative Coast. I get juiced when I'm here. I take home a lot of inspiration. My team does. That's part of the reason why we dwell out here so often amongst you so that we can fire up our own engines and selfishly take back good ideas and try and make those penetrate into what might otherwise be very stale hallways back in D.C.

There's a lot that I could say that's the usual pitch: policy, technology, capital markets, this is how the pipeline works. But again, we're with the home team. You already obviously get the big picture or you wouldn't be here. You wouldn't be putting your money where your mouth is, you wouldn't be having the discussions that you've had. You've had a very well-populated agenda, talked a lot about technology, talked a lot about the capital that needed to meet the technology and tinged all through it was a discussion about policy and I'm going to try to focus a great deal more on that policy piece of things because there has been so much movement in the last 24 months, and there's going to be much more movement in the next 24 months.

You are seeing a shifting landscape. We are a long, long, long way from the apex, from the crescendo of the rising tide that you are currently riding on for what is bound to be the biggest profit opportunity for many, many generations. So, today really what I want to do is say first, thank you. Thank you for everything that you have done to enable the agenda that we put in motion. Second, I'm going to have a protracted half-hour elevator pitch filled with lots and lots of ask. Things that we would like to happen from this community. New ways that we want to work with you. And I generally want to update you on all the exciting advances that I see taking place, not just in the halls in Washington, but in industrial towns that revitalized, in rural communities that are transforming, and places that had fed the IT sector around the nation that are turning themselves to clean tech. And, in the global negotiations for climate change that we have been so pleased to play an enlarged role in.

The prerequisite to the conversation is that leadership is required. Not just standing by on the sidelines and saying what will the new presidential candidates do, what are my politicians doing for me in Washington. Your proactive leadership is required. The profit opportunity is there but the endgame is not your IPO. The endgame is something much, much larger.

And so I always try to start these talks by framing the problem, by underlining the urgency so that we can figure out ways to work together to relate with one another to begin problem solving together. It's pretty easy to do. There are so many reports that are already out in the street about how to do it. You can read Hewlett, you can read Pew, you can read the Nobel-winning IPCC report, you can read Alliance Bernstein or MacKenzie. They proliferate every day. I try to read every bit of them that I can, but they all point to the same hard truth, that we have a limited amount of time to problem solve our competitiveness challenge, our energy security challenge, our global climate change challenge. The fulcrum point, as Mark so eloquently pointed out.

They all come to this, and in fact one of my favorite reports that I like to cite the most is from the National Petroleum Council that puts out a report every few years on the state of energy in the United States and globally. And theirs, in fact, is called "The Hard Truths," and if you haven't been exposed to the Hard Truths Report by the National Petroleum Council, I would encourage you to get a copy. Past copies of this report—in past years, they come out infrequently, but when they do, they say that we should drill more, open up more spaces, we will find a solution. And what distinguished this report is, from the National Petroleum Council , that wasn't the byline. The byline was that we had to prioritize, quantify and realize efficiency in new ways. Another important point they made was that the conventional sources of energy where they dwell were becoming harder to access and would become increasingly so over time and the demand would continue to outstrip supply by anybody's calculation over the next 30 years. The final point that they made that you would find very interesting on the Creative Coast is that predictable carbon policy was fundamental to driving new energy realities. The report was chaired by none other than the former chairman of Exxon-Mobil Corporation, Lee Raymond, great apostle of the climate change discussion and so you can see so that you can see across the spectrum of everybody's input we are increasingly growing in the same direction at the same rate to a common destination yet unmapped and we're only beginning the journey.

But time—time—has to be the driver. In fact, what we know from your early activities and the growth of venture capital, and what we see from the amount of transactions growing—about 500% over the last five years—is that capital is not the constraint. We know that the technologies are becoming increasingly more efficient and moving down the cost curve and are penetrating markets faster. Nowhere near their potential, but the technology that you all have been discussing, that we are so proud of to fund, is also not the constraint. The constraint is the durable, predictable policy with longevity that provides the connectivity between the technology and the capital markets to scale consistently, continuously in a reliable way with measurable metrics until we begin to hit these great challenges of energy security, and climate change, and economic competitiveness.

People that you know who have probably spoken to you often on recent occasions—John Doerr, Tom Friedman, Jim Woolsey, good friends—were recently in Washington this last weekend for the National Governor's Association Conference. They spoke to the NGA and I had lunch and dinner with several of the governors afterwards and they commented on these speakers. Funny, here, you know, of course we know who those names are. One of the governors, I won't name them, said that they kept talking about this guy John Doo-er and I had no idea who they were talking about. And then finally, when I didn't want to correct the governor, I said that his name is John Doerr. I thought to myself, when people mispronounce my name, you know, it's rarely with such flattery. So John is a doer. But John's speech was all about green. And Woolsey's speech was all about red, white, and blue and security... you've heard it. And Tom's speech was about his new book, "Red White and Blue is the New Green," and melded these together a little bit on competitiveness. So they each took an element of the problem through which all of these technologies are meant to address.

I want to relate and bring it all together for you a little bit in kind of a personal way, if you will indulge me for a moment, because at the end of the day life is personal, where the sum of our own experiences, these are the things that bring us here as entrepreneurs. And mine is a tour of these events, if you will. I remember when I first got to the Pearl River Delta in 1991 as a graduate student at Hong Kong University. A fellow student grabbed me and said, "Do you want to go over to Shenzhen?" I had no idea where Shenzhen was. He said, "Do you want to go over to Shenzhen? Because Deng Xiao Ping is coming to speak with his great tour of the south and he's going to declare it a special economic zone." And I thought, well, you know, sure why not, you speak Cantonese, let's go. And so we went and I got this great historical moment to see one of the emperors, if you will, speak and declare Shenzhen a special economic zone and imagine the day when foreign exchange certificates wouldn't be needed and there would be free exchange and flow across this artificial border with Hong Kong. And it was a dirty little place with a train station and the obligatory rotating restaurant on top of a hotel and it was an interesting day trip and I thought, could they really pull that off?

And six years later, the morning after I watched the Union Jack get lowered over Victoria Harbor and columns of the Red Army march onto the streets of Hong Kong where I had never seen armies before, I thought I'd better take one more trip on the Kowloon-Canton railway and go see sleepy Shenzhen one more time, as my last impression and it wasn't a small little place anymore. It was the second largest port in Asia in volume, having surpassed Singapore in only six years, with its own airline, with a downtown, with a population that was bigger than the Dallas-Fort Worth metroplex. In six years. We have never seen or witnessed this type of industrialization, urbanization, growth rate, and competitiveness in our lifetimes. And we have got to be ready and geared for it not just for our competitive economic position in the world, but to assure that it is happening on the back of cleaner technologies for the sake of global stability.

Second story I'd like to share with you if you would indulge me. After all those years in Asia, I had promised my wife, my fiancée at the time, that once we got married, we would take a little time off. So we did take a little time off, and we went around South America and we did a great place down in Patagonia—if you haven't been there, I would encourage it, it was like Yosemite on steroids. It was called Torres del Pain Park Nacional. Maybe some of you have been there. There's a grand circuit you can do around Torres del Pain and it takes about 7 days and when you get to the top of the mountain, every day you're pumping it and pumping it waiting to sit at the top of the mountain so you can have a spectacular view of the world's largest land-based glacier, the Grey Glacier. And we got to the top of the ridge after six days of pumping it around this beautiful, beautiful scenery and at the top of the ridge, the glacier couldn't justify the postcard. It was evaporated. That was a decade ago. It was going away. Now that's an anecdotal story, a little bit like when someone say, the weather's gone hot, the weather's gone cold, must be global warming. It's anecdotal, but the science is not. The facts are clear. Our world is warming, we are part of it. We have a compelling and immediate need to problem solve.

The third story, if you will allow me—once more a little bit personal—following on the trek that got me here, was when I began a business in London and investing in North Africa and other emerging markets in power generation and wind power and we had 26 employees in our Casablanca office. And in Casablanca one young lady came to interview. And she was dressed a bit differently—very, very modern, because she had just come from Oklahoma. Norman, Oklahoma. Khadesia had won a Fulbright scholarship and she could barely interview with me, because of what she felt was the opportunity horizon of being in obviously an Arabic-Francophile culture. Working on 21st century technology in an all-English high-tech office space, she could barely contain her excitement to tell me about what it felt like the first time she arrived, looked around, didn't need a man's permission, got into a convertible and just drove all the way to Kansas. I said you're hired.

Khadesia was brilliant. Is brilliant. Six, eight months into our relationship, Khadesia started asking me if we could just pay her in cash. And I said, Khadesia, I've got rules, you've got the Social Security, you've got the unions, you know why? She said, my brothers control my bank account and they're draining it. They're giving money to crazy things, to fundamentalist guys, so that they can buy soccer balls and give them away on the beaches. And I kind of related to that. Like most towns of the French empire, Casablanca has this beautiful cornice that goes along the beach that I would take every day to work, and it was increasingly blocked by these mobs of young kids getting toys and soccer balls. And I never knew why until Khadesia explained to me that she wasn't getting any of her income.

I want to relate it back to you because it was the War on Terror that was going on before the towers fell. Before this country knew the name Osama bin Laden. We can't win a global security war with fundamentalists without getting into the hearts and minds and villages and enabling solar panels to offer first light for literacy for people who work all day or refrigerants to cool vaccines for people who will never be on the grid or the capacity to create more Khadesias and Fulbright scholars who want modernity in their world and values that they can share with us for a better life for them and their families. Your technology, our technology is intimately connected to that mission. It is not just about green and climate change, it's not just about money, it's also about security. It is all of these things.

It is about the destiny of our country in the 21st century. You have heard me talk many times about what needed to be done in the form of policy for connectivity and I'm so proud to tell you what has been done. It's hard to get media space in between an election and the war in Iraq and Britney's meltdown, but there's a lot to report to you that will affect your business plans and your prospects.

In December, we were honored to have the president come over to the Department of Energy acknowledging the work that had been done to advance legislation that was larger in size and in scope and in timetable than anything that has ever been tabled before in this country—Apollo-like mandates and metrics for more than a decade to decrease our dependence on gasoline by 20%. For the first time ever since CAFE and vehicular efficiency standards were brought into being, we raised them by more than 40%. We wanted all alternatives, all the things that you all are working on for clean, domestic, secure and affordable traits to be integrated into our fuel system. It became a biofuels mandate exclusively, but those biofuels, more than 60% have to be from cellulosic waste strings, all of them have to be environmentally consistent and reduce greenhouse gases. We have never had this kind of mandate before and those who were against it will not stop battling it as we seek to implement it. And that is playing itself out in the press.

We need your help to foster the good technologies and the change that we seek because the agents of the incumbency are strong and they are well funded and it will take the power of good ideas whose time has come. Importantly about this legislation is that it arrived on the President's desk less than a year after he called for it in the State of the Union with what we called the "20 in 10" plan. Now that may not seem like much, but by contrast, the Energy Policy Act of 2005 took a decade to complete. To do something like this with bipartisan support, all of the leadership coming together is an acknowledgment that this no longer belongs with political factionalism. It was bipartisan, it was historic, it's a major step forward and it's an example for other countries to follow.

Some of the highlights that I just alluded to, some of the others, don't get as much press time. But I think they're quite as important. We spent a lot of time on bipartisan drafting for 70% increases in the efficiency of lighting—fundamentally, a phase-out of Edison's incandescent lightbulb. We don't make headlines, but you'll see that at a store near you, as the ENERGY STAR brand begins appearing on solid state LED lighting and diffusing within the next three to four years in ways we never thought possible. New appliance standards for washers, dryers, refrigerators, may seem mundane until you integrate it into a vision for zero-energy homes and offices and transform the built environment and reduce the carbon footprint in ways we didn't think possible, but now we are statutorily mandating into existence.

Permanent authorization is something you all should become familiar with called Energy Savings Performance Contracts, or ESCOs. These are the units, businesses that have an opportunity to help the federal government with procurement, the highest ever procurement requirements for efficiency and renewables—an increase of 30% that the federal government cannot possibly meet on its own without the private sector. So we are forcing them to interact with you and with different lifecycle cost assessments to uptake new technology to be in compliance with the law, to aggregate contracts and assure long-term purchasing. If you're not familiar with Energy Savings Performance Contracts and requirements I encourage you to meet with our commercialization team and learn more.

That's the domestic story.

The international story is something different. Again, there's not a lot people will recognize in a news broadcast. It's very difficult for a lot folks to get over the fact we never joined Kyoto. But Kyoto is getting close to expiration. Those who love it, those who understand the deficiencies of it, everybody understands, we are moving beyond it. And that's what the Bali Roadmap was about, and I was so honored to be in Bali and represent this administration, represent this government. In fact, as we for the first time in more than a decade got into consensus with all the other nations of the world, China and Korea and Australia, Japan, the European Union, and definitively decided on a timetable on measurement and verification on the core principles of mitigation and adaptation and tech transfer and finance that would constitute a post-2012 global framework to be agreed by Copenhagen in 2009. That's a very, very short window. And there's a lot of work to be done. And we'll be distracted by lots of things, like elections. But we've got to stay on target, on task, in good faith and have an enabling regulatory environment with the appropriate principles ensured so that every nation—major economies and major emerging economies sign on.

The atmosphere, if it could talk, would not discriminate by national boundaries as to what is choking it. It's no good to have an accord that is only half complete. Just as it's no good to build a dam that only goes halfway across a river. All the nations of the world have a stake and have to participate and so there are some key principles that have to go forward in a dialogue on an accelerated basis. And we have been pleased to host the recent rounds of what we call the Major Economies Meetings. This is a subset that feeds in to the UNF triple-C Process. The Major Economies Meetings aren't a competing process, they are an accelerant to the master process by convening the key economies, the 15 largest contributors that constitute 80% of the world's emissions. More than 80% of the world's economic output and getting them around the table and speaking with frequency that an annual big bang can't achieve. We get these countries together and first we table the facts: we've never been up a mountain this large before. So presuming that a universal non-diversified solution for a diverse global economy and that there's only a single path up the mountain despite the variation in socio-economic systems that are left to implement it may not be the appropriate means. That no one country has all the answers. That every nation has to decide for itself the appropriate mix of tools and technologies to achieve measurable and verifiable results that are environmentally effective and economically sustainable. We can't afford to have a discussion about carbon constraints in isolation of the discussion that you are having here about technology diffusion at rate and at scale. We have fundamentally turned the page on the era of problem identification and moved into a new era of problem solving that each and every one of you has a role in. You cannot leave this to bumper sticker diplomacy. The discussion must be about what will be the policy framework that enables you to succeed.

The president also announced during the State of the Union, as he did at the beginning of the Major Economies Process, that we would also need to assemble a new global clean tech fund and we're working together with our colleagues at the Department of Treasury to enable that reality and that, too, will offer you enormous opportunity.

What we're here to talk about today to bring it on down from global and national conversations is really what we've tried to do with commercialization at the Department of Energy. We really want to expose to you what our thinking has been about the government's efforts to redefine and reinvent a user-friendly nexus to you so that we reunite science and commerce, so that we remarry innovation and entrepreneurship in a way that is consequential.

A couple of years ago, when I went through my confirmation in Congress, I had a single primary policy objective, and I expressed it throughout my testimony, and that was to accelerate the commercialization of clean energy technologies. That's what we've tried to do from the beginning. I hope you found us to be a little bit successful. But there's a reason for it and it's not just the prosperity of this community. It's just a simple truism. If your federal government invests in and invents a new technology, but that technology fails to reach the marketplace, then the return on investment to our citizenry, to our nation, to our planet, is zero. A big fat federal goose egg. Nada, zilch, zip.

We've had that inertia for quite a long time. So much so that many of you have avoided interactions with the federal government. And we knew that the answers to accelerating commercialization were fundamentally not going to be found in Washington. And that's why we recruited a team that could speak your language. From outside the Beltway. Folks that you've come to know like Brad Barton and Michael Bruce and Drew Bond and Paul Dickerson and Craig Cornelius, Jacques Beaudry-Losique. People that were qualified to talk to you about net present value and IRR and ROE and EBITDA and the things that would be meaningful to scaling. Since day one, we've been trying to listen and I'm pleased to report we've got results from execution. The first step of bringing on a team like that and disrupting things inside a bureaucracy like the Department of Energy represents a challenge to the 30 year institutional history of the agency. Bringing commercialization in the front office where it could expose itself to Sam Bodman, to myself, to the president, was something new. But we have to create this window on free enterprise that informs what we do on a policy basis and offer that connectivity if we ever really want to see the results.

You all know and have talked about for years, and our people sometimes have talked about for years, without understanding the Commercialization Valley of Death. This big, mythical gulf, not mythical in the sense that it doesn't in fact exist, but in the sense that it becomes a barrier in our minds. We felt very strongly that your government had to begin building the bridges over the Valley of Death and there are at least three bridges that I want to focus on that many of you hopefully have experienced.

The first is an informational bridge. How much of what we were doing is actually getting out? And when we first came in we asked ourselves, we asked you all, how much are you working with our labs, what's your interaction? And many of you said, "What labs?" Houston, we have a problem. We knew then that we needed to bring in venture capital firms, and so we went to our program managers and we said, "What are the eight to ten most promising technologies that you have?" And we invited in many of you, many of the venture capital companies, last August into Washington to have a behind the curtain look at what the work is that they were doing. We showcased at least 70 technologies and we spoke in your language—not in white papers, not in research theses. We exposed the information and we are going to continue doing that on quarterly increments.

The next bridge we had to tackle was a capital bridge. And so we created something called the Technology Commercialization and Deployment Fund. You told us that a research report wasn't going to be enough for you to commit funding. So we set up a funding mechanism at three of our labs, NREL, Oakridge National Lab and Sandia, they're all represented here, that would bridge the gap between research funding and traditional equity funding. Matching seed capital—a carrot, if you will—to the labs to reach out to you with real money. And each of the last two years we've put aside at least $7 million for this—$7.2 million, to be exact, is allocated this year and there's a solicitation that is still open and out in the street and we welcome your participation in it.

The third and arguably the most important bridge is the talent bridge. And that's really related to the big announcements that we have to make today. We really just took a page out of your playbook and created the Department of Energy's first ever Entrepreneur in Residence program. You told us that in order to fund a business you needed technology that works, a market that you could sell into and most importantly, an entrepreneur who could execute it. That entrepreneur is really the lynchpin because an outstanding entrepreneur identifies the winning technologies, builds the market for the technologies that they've isolated. The DOE's EIR program is going to work alongside research scientists at three of our labs—again, NREL, Oakridge and Sandia—representing our whole complex to identify the promising technologies, build the business cases for commercializing innovations and ultimately spinning out new companies at a far faster rate. You're in the business of identifying excellence in entrepreneurship. The federal government is not. The EIR Program is a relationship with venture capital firms. We've outsourced identifying entrepreneurial talent to you—the people who can do it best.

So partnering with venture capital firms has another advantage for us. The EIR comes into the lab already with the VC capital at his back. And so rather than us have the need to stomp up and down Sandhill Road to raise capital, after identifying this technology, he can just make, he or she, can make a phone call home, and this is just going to grease the skids and accelerate commercialization. The program represents the most fundamental shift we have experienced as a federal government in the way DOE conducts business and we hope that it proliferates across all of our national laboratories and so much of that interest has already been expressed.

It is important to note that as we build this out, we have done something else unique. We have created a standardized, streamlined, simplified equity share license agreement. I won't go into the acronym and call it an ESLA, we were going to call it a TESLA, technology equity share license agreement, but it was already taken. The ESL—the equity share license agreement—is because we listened to you and you said this is too hard. It's painful to deal with the federal government. It takes us three to four years to extract this stuff out the lab even if we're inclined, even if we find it. I said, "What's the best thing?" and somebody said, "Why can't you just be like Stanford?" So we went to Stanford, we nicked the agreement. We penciled out Stanford, we put in the Department of Energy, we met the statutory things, we sold it to general counsel finally and now we are equipping each of these embedded venture capitalists with a standard equity share licensing agreement to avoid the upfront costs of licensing and payments in the form of cash that might be good for GE and GM, but are very hard for bootstrap entrepreneurs looking to proliferate a good idea.

I want to point out that the equity share licensing agreement is not just for the embedded VCs that are in the Entrepreneur in Residence program. It is for anybody. And you can download it and you can take it to any national laboratory for a simplified engagement and relationship and if you have a hard time, we want to hear about it.

Now, the announcement that we have to make today is intimately related to that. I came here in October and I announced the solicitation for the first round of these EIRs. And the response was so great that many of our other laboratories came to the table: LBNL, Dr. Steve Chu, Pacific Northwest National Lab, and Argonne, and so many others that want to participate in a new round. So we want to see what these best-in-breed first rounders do so that we can improve it in a hurry and get out another solicitation before the end of the administration. So stay tuned if you're one who expressed interest and are looking for more opportunities.

I have the great privilege of recognizing these folks who are amongst you today and so I'd appreciate it if you would recognize them as I call them out. The first winner that will be going to Oakridge National Laboratory, represented by Steve Vasallo, is Foundation Capital. Steve, can you stand up?

Here you are. Thanks, Steve. Foundation actually coined the term Entrepreneur in Residence in 1994 and they were recently ranked the number 4 global venture capital firm based on their returns.

The second winner that will be working with Sandia National Labs is represented by Paul Thurk, Arch Capital. Paul, can you please stand up.

Thanks. Arch spun out of Argonne's National Laboratory in 1986 so they have a very unique perspective and experience on our national labs, and they've even gone so far to recruit an entrepreneur with a high level security Q clearance so that they could expose themselves to the full array of what's available.

And the final winner that will be going to our lab in Golden, Colorado and the National Renewable Energy Laboratory is Kleiner Perkins Caulfield and Byers, represented by Ray Lane.

Ray, could you please stand up? Thanks. And of course everybody knows K.P.'s long history of working with EIRs, and their stellar investment track record, and their strong leadership here and abroad on the clean tech space. Could you join me one more time in recognizing these pioneers of our entrepreneur in residence program?

There's just a couple more things I want to get on because they're of great benefit to you, and I apologize because I'm cutting into the next fella. But the EIRs are meant to work on the technology transfer where the nexus hits government on the front end of the venture capitalist dilemma of beginning to profit on clean tech.

We also have to pay careful attention to what's going on on the other book end, on the backend. What do you do when you have the technology and need a pathway for market penetration and need to scale it? As I said, the IPO is not the end game. The larger picture is the endgame. How do we achieve these global and national aspirations without scaling?

It's not enough when a presidential candidate or when a politician tells you they like these technologies. They see the jobs. It's not enough to say that disruptive technology is good and essential. We all know that. What we need is disruptive thinking and organizational and institutional means and mechanisms to scale these technologies. That is what is so, so important as you begin to weigh in to the national discussion. Government has to cultivate the conditions for these technologies to thrive at unprecedented rates. And so we need disruptive policy and we need disruptive administrative and management practices that begin to overcome the inherent incrementalism and the erratic execution of our bureaucracy, which was built and postured for a Cold War and not for the challenges of the 21st century.

Traditional federal agencies simply lack the flexibility and skill sets to effectively manage complex financial transactions with the risk profiles of cleantech and renewables. Rapid commercialization of clean energy technologies requires sophisticated capital management which is largely unavailable by design in the federal workforce. We have to mitigate the risk facing investors in mass procurement of cleantech, in production and distribution of clean energy, to increase the amount and rate of private capital deployed in a timeframe that's consequential.

And that's why we are so intensively now looking at ways for the federal government to avail its balance sheet to help enable unfettered access to capital formation on a continuous and consistent and escalating basis.

As the climate change debate heats up into the halls of congress, largely on dated themes, you all need to be involved. Because we're beyond bumper stickers. It's time to look under the hood and understand the best thought through partisan pieces of legislation and legislative proposals that will have the most poignant, simple, direct, and immediate impacts on your technology or your company's performance, your profitability, your bottom line, and your return horizons.

There's a lot out there right now. If you aren't familiar with Title 17 of the Energy Policy Act, that gave authority to the federal government for loan guarantees that could fund up to 80% of commercialization of any project, any technology, any manufacturing facility, any widget that avoids, sequesters, or reduces greenhouse gas emissions—fundamentally everything you work on in this room—80%! If you're not familiar with those provisions, you need to be. This is the community that has to access and avail those funds.

What funds? Oh, it's not just in statute. The appropriations have been made in law, and it's not a trivial amount. $38.5 billion—billion!—has been set aside for the next 24 months for any technology that avoids, sequesters, or reduces greenhouse gas emissions. And ladies and gentlemen, it's collecting dust. Your money, appropriated, in statute, for your projects—you have got to weigh in on the appropriate organizational and institutional means of delivering that money more easily to the marketplace to diffuse these technologies at scale.

And ladies and gentlemen, it's collecting dust. Your money, appropriated, in statute, for your projects—you have got to weigh in on the appropriate organizational and institutional means of delivering that money more easily to the marketplace to diffuse these technologies at scale. Let me give you an example: The Department of Energy. Nuclear weapons stewardship for the United States of America, environmental cleanup, linear accelerators, super colliders, artificial retinas, everything we do—25 billion dollars. And yet we've got a bank account untapped of 38.5 waiting for you all to claim it if the federal government can devise the right means to deliver it. You all need to weigh in. And weigh in with Michael and Drew and Brad and so many of the people who've had a hand in bringing that about.

The last topic, and I'm sorry to have gone on so long, but I want touch on this because every time I come here to Silicon Valley or to the Bay Area, someone grabs me by the shoulder and says,"Yeah, these commercialization things you and your team are doing, Karsner, they're terrific, but it's transient management. What about transition and continuity?" And so I wanted to have a word about that. Because we have 327 days before we all turn into pumpkins I want to assure you that we are squarely focused on ensuring that our successors are more successful than we could have possibly dreamed. That the baton will be handed off in a smooth way and at pace irrespective of whether it is a Republican or Democratic administration that succeeds us. We are working very hard and you will hear announcements of names very soon to match the positions that we have built in—in the front office, non-political, senior executive commercialization directors that will be there waiting for the new executive in my office and for the Secretary and will come out of industry. These are limited-term appointments. These are not for regular federal employees, but for people from industry with venture capital skills and project finance skills and legal skills and commercial framework skills, and they will be there to help the transition. And I also want to point out that we have had the career civil servants rise to the task in an unprecedented way. So that if you know one of my successors, Dan Reicher, who may be here, the people who worked and excelled for Dan and the Clinton Administration, and work and excel for me, have found themselves elevated to new senior posts and seamlessly integrated to remove the political equation from our office.

George Schultz, a man in this area, a big enthusiast for this technology, said—if you haven't read his intro to Amory Lovin's book I would encourage it—George Schultz told me, "Andy, there's no such thing as a lame duck. It's a media construct." He's been through multiple administrations. I said, "Well, what do you mean?" He said, "It's when everybody looks the other way. The media has got to justify getting on the campaign buses. They've got other news to make. They're not watching. And your administrative authority doesn't go away and your executive responsibilities don't go away. And the rest of your agenda speeds up so give it more intensity and focus." And we intend to do that. Bring us the problems and we will continue to engage you and pass it on smoothly.

I want to close with just a few more personal remarks. Many of you have heard me finish up talking before from the perspective of the military brat that I was growing up on multiple bases in different parts of the world, and sometimes I talk about what it felt like from the eyes of a boy who would wait for the correspondence of a father deployed far away in a distant land and the way we would wait in those days, without Skype and voice-over IP and emails that may make these things faster today, but instead we would wait for a cassette that was all bound up in a plastic garbage bag with duct tape and we'd pop it in, knowing it was recorded six weeks earlier, just to hear that same message over and over again, "I'm okay. I'll be home soon."

There's a lot of families waiting for people to be home soon and even though they can communicate with them more frequently these days, the brave people that are in harm's way have a link to you that I don't think is thought through often enough. And as we welcome them home I want to talk about what I see as our role collectively in assuring them of America's place in the world being on the rise. Your mission and your aspirations of eroding the negative attributes and alleviating the dependency of a carbon-based, fossil fuel economy are absolutely convergent and inseparable from their mission. The success of your investments, your companies, your leadership and the execution of this mission draws our nation, draws our citizens, draws nations of the world closer together. Inevitably, the scaling and the acceleration that you seek from energy transformation is also affected.

Today I'm wrapping up my remarks with actually where I started my journey out here yesterday morning, in my kitchen fumbling for coffee with the voice of another child, my daughter, my oldest daughter, Caroline. And she asked me some of the most painful and poignant questions in the most simple ways. And she said, "Why are you leaving again? How long have you had this job?" She's five and a half years old, she can't remember when I started, but she remembers me leaving a lot. My schedule is really onerous, as probably many of yours are. And in most ways, the service that I commit is very slight compared to the sacrifice that I just referred to, the families that wait with anxiety and worry, pumping military equipment through the Hindu Kush, etc. This is just a fraction of what people really do to serve. But that is small comfort for a young girl in Snow White pajamas, wanting to know why papa's leaving again. There aren't always good and useful answers. But owing her an answer as I do, I've begun to craft a letter that I can share with her at a time that it will make more sense to both of us. And it's unfinished, and so my remarks with you today are going to be unfinished. If you'll bear with me, I'd like to share a little bit of it:

"My sweet Caroline, when the world began to understand why the grand glaciers melt away faster and was shocked by the falling of the Twin Towers, we moved to America to search for the people who would imagine and create and implement solutions to the greatest challenges you and I will face in our lifetime. And we arrived during a period of great conflict and controversy and division and trepidation and then suddenly our family found itself with the high honor and privilege of working for the President. And from the most powerful podiums on Earth, and the most watched occasions we have, we for the first time, unambiguously, and with crystal clarity, distilled and defined our problems—our addiction to oil, the serious challenge of global climate change. We raised our national investments in clean energy research to unprecedented levels. We put historic, Apollo-like mandates that were enforceable with teeth of law for the first time to make cars much more efficient, to phase out incandescent light bulbs, to change the built environment, to offer predictability in policy and pathways for technology with milestones and with metrics and we brought divided political factions together to recognize the proper role and the limitations of our free enterprise system. We tried to put in place a foundation and a bridge to the imperfections and empower the very people that we came to America to find who would innovate and invest in a world that you deserve."

The letter's not finished. You are those people. Our work is not finished. This is just the end of the beginning. So let me say thank you for helping me communicate these powerful things to my children and to yours and to families everywhere around the world that are awaiting our leadership, America's leadership. Thanks for all you've done and thanks for writing the rest of the story. Thank you.