Presidential debate:

Romney, Obama campaign surrogates debate energy and climate issues

How will energy and climate issues drive the economic, jobs and national security agendas of the next president? In E&ETV's exclusive video coverage of the MIT Energy Initiative's Presidential Energy Debate, campaign surrogates Joseph Aldy, representing President Obama, and Oren Cass, representing GOP contender Mitt Romney, debate the future of federal energy policy and incentives, unconventional oil and gas, coal, and climate policy. The debate is moderated by Jason Pontin, editor in chief of Technology Review. Debate questioners include Monica Trauzzi, E&ETV's managing editor and host; Bill Loveless, host of Platts Energy Week; and Steve Hargreaves, a senior writer at CNNMoney.com. The debate was filmed Oct. 5 at MIT's Kresge Auditorium.

Transcript

Ernest Moniz: I'd like to welcome you all to MIT. I'm Professor Ernie Moniz, director of the MIT Energy Initiative, who is co-sponsoring this event, along with the student-organized 4,000-strong MIT Energy Club. The -- I also welcome Mayor Davis, City Councillor vanBeuzekom from our host city Cambridge, and I believe I will also welcome our former president, Susan Hockfield, who has played a major role in advancing energy here at MIT.

Now, energy issues clearly drive important challenges in this century, jobs, economic development, energy security, environment, climate, and we do face challenges, but we also face opportunities in the form of domestic energy resources and technologies, and hopefully, well-considered policies, as well. These are clearly going to be important agenda items for the next president of the United States, and we look forward to learning more about these issues tonight as we delve into the candidates' positions on energy issues.

We give special thanks to the presidential campaigns for bringing us such outstanding representatives as tonight's debaters, who I would like to invite on stage.

[Laughter]

Ernest Moniz: Or ask me a question. Right. Here we go.

[Applause]

Ernest Moniz: I would just say -- I'll just say a few words about each. Joe Aldy, representing the Obama campaign, is on the faculty at the Harvard Kennedy School. He's a nonresident fellow at Resources for the Future and a faculty research fellow at the National Bureau for Economic Research. 2009 to 2010, he served as special assistant to the president for energy and environment at the White House. Joe, thank you for coming.

Joseph Aldy: Thank you.

Ernest Moniz: Oren Cass, representing the Romney campaign, serves as its domestic policy director. He's responsible for campaign policy on issues including energy, environment, health care, trade, labor, regulation and technology. He previous worked as a consultant at Bain & Co. in the firm's Boston and New Delhi offices, where he advised companies around the globe. And welcome to you, Mr. Cass.

Finally, I'm just going to turn this over to our moderator, Jason Pontin, editor in chief of Technology Review. He will outline the rules of the debate and introduce the panel. Jason?

Jason Pontin: Thank you, Professor Moniz, and thanks to everyone in the audience for joining us tonight, and a special thanks to professor Aldy and Mr. Cass, as well as to MIT, the MIT Energy Initiative and the MIT Energy Club for hosting this debate tonight.

Let me first ask the audience, be so ever partisan you are, to restrain your partisan cheering. And for those of you who wish to tweet the event, the Twitter hashtag is #MITEI. That's hashtag #MITEI.

Let me first say a few words about the rules of the debate, and I shall try and do a better job than Jim Lehrer in actually --

[Laughter]

Jason Pontin: -- in actually keeping our debaters to their spirit. Each debater gets two minutes for opening statements, which should outline the energy platforms of the candidates. A panelist, a moderator or a student gets to ask a question of the debater. The first debater gets a two-minute to respond to the question, and the second debater gets a one-minute-and-30-second rebuttal. As the moderator, I may ask a brief follow-up question of the debater who was asked the initial question. At the very end, the debaters will have a three-minute closing statement.

So this debate is divided into four rounds of questions. Each round will have a specific policy focus. After the opening statements from the debaters, I will ask the first question, and the same question for both debaters which will focus on energy innovation and appropriate incentives for energy development and deployment. The next three rounds of questions will center around the three preeminent energy challenges and opportunities of the day.

So let me first introduce the panelists who are joining me in answering the questions for the campaign representatives at the debate tonight. Sitting next to me is Steven Hargreaves, a senior writer for CNNMoney.com, where he focuses on the Energy Initiative. Previously, Mr. Hargreaves worked and lived in Bangkok and Istanbul, and has been published in The Village Voice and The Australian Financial Review.

Seated next to him is Bill Loveless, the host of the "Platts Energy Week," an energy news TV program based in Washington, and the editorial director of U.S. energy policy for Platts, the energy and news information division of McGraw-Hill.

And seated directly next to me is Monica Trauzzi, the managing editor of E&ETV and the host of E&ETV. Ms. Trauzzi serves as the moderator of E&ETV's daily interview program OnPoint.

We also have joining us onstage student questioners, as appropriate for an MIT debate. These students will have been selected by the MIT energy club to participate. We have Ryan Cook from MIT, Lindsay Amico with Northeastern University, and Eric Lau, also from MIT.

Finally, for our final round, we will include an MIT Knight Fellow for questioner, Ms. Elana Schor, who is the Capitol Hill reporter for E&E Greenwire. The Knight Science Journalism program at MIT offers a full-year journalism fellowship to students to increase their understanding of science, technology, and engineering, medicine, and the environment.

Right. So we tossed a coin backstage, and the winner of the toss had the option of choosing his placement on the debate, and this choice will determine the order of responses for the panelists' questions. Mr. Aldy was the winner of the coin toss and has elected to give the final closing statement, which means he will also give the first opening statement. Right. So to begin with, we will hear the opening statements from the candidates' representatives. They are limited to two minutes. Mr. Aldy?

Joseph Aldy: Thank you, Jason, and thanks to MIT, one of the world's great universities, where scholars are advancing the energy frontier every day. In fact, MIT is a fantastic example of the importance of public investments in science and technology, where we as a society have reaped phenomenal gains when we see the public sector, academics, and entrepreneurs working together to develop and deploy the next generation of energy technologies.

This week, President Obama continued sharing his specific plan for how to move forward on America's path towards an independent future. The president's approach has focused on an all of the above strategy. The president has supported the development of all of energy resources, oil and gas, coal, nuclear, wind, solar, and biofuels. He's pushed for innovation in all these sectors to ensure that we have the best technologies and the best trained people to develop those resources.

The president's approach, his very much balanced approach, has delivered phenomenal results. We're actually seeing domestic oil production at a 14-year high, and our net imports of oil at a 20-year low. We're on path to halving our net imports by the year 2020. We're now the world's largest producer of natural gas. And the president has made historic investments in clean energy that has improved dramatically our energy efficiency and has doubled our production of power from wind and solar sources.

The president's balanced approach is creating American jobs, strengthening our competitiveness, and building a robust foundation for long-term economic growth. There are more than 600,000 jobs in the biofuels, wind, and solar industries. We're actually seeing employment in the oil and gas sector at a increase of 17 percent since the president took office. And coal mining jobs, despite Republican rhetoric, are at a 15-year high.

The energy sector is flourishing while the president carves a smart and sustainable clean energy future. If you want to go back to the past and pursue an unbalanced approach, one focused almost exclusively on fossil fuels that dismisses our investments in clean energy, that makes us less diverse and less robust as an energy economy, rolls back the achievements we've made in energy efficiency, and rolls back environment safeguards to save lives, you have a choice in the president's opponent. It's very clear this November when one looks at the energy and economic visions for America, there's a clear choice in this election.

Jason Pontin: Thank you, Mr. Aldy. Mr. Cass, please?

Oren Cass: Well, thank you to MIT for hosting us, to the Energy Initiative for organizing this event, and Joe for being here with me tonight. Admittedly, I spent most of this week preparing for a different debate, but I think that, you know, this will still be an excellent discussion about an issue that Governor Romney sees as particularly important to the economic future of this country. Energy independence is the first plank in his plan for a stronger middle class, and his approach to it I think differs, as Joe said, very sharply with the president's.

The irony is that over the past four years we have seen an energy revolution in this country driven by extraordinary breakthroughs. The problem is that it is not the one that President Obama predicted, promoted, or supports. While the president spent about $90 billion of energy stimulus on green energy programs that have not produced results, and I'm sure we'll discuss in a lot more detail what results have or have not been produced there, the private sector was developing new technologies that allow us to access fossil fuel resources that we've never been able to access before, and have made actual energy independence on this continent a reality or a potential reality really for the first time in decades.

And that is something that analysts across the spectrum, from investors to think tanks to people at the Kennedy School all agree is the case. So today, energy policy is economic policy, and the question is, do we embrace the revolution that actually has occurred, that has the potential to create millions of jobs, or do we attempt to stifle it?

Governor Romney has laid out a plan in great detail that embraces not only fossil fuel resources, but any that can be effectively developed through private sector innovation, which is the type of innovation that has always worked in this country, and that is the approach that he thinks will be far more effective than simply continuing to essentially play venture capitalist from within the White House.

Jason Pontin: Thank you very much. The first segment will focus on federal energy policies and initiatives. The federal government's record on incentivizing energy development and transformation is inarguably decidedly mixed. Policies to expedite the siting of liquid natural gas import terminals have left the U.S. with significant over-capacity and stranded assets. The loan guarantees program has resulted in some extremely high profile failures, including Solyndra. And construction of the hydrogen highway has stopped, and electric car subsidies are sluggish in spite of a significant tax incentive for their purchase.

I will ask the same question of both candidates, beginning with Mr. Cass. Sir, what are the energy goals and incentives that your administration would champion to spur innovation in energy?

Oren Cass: Well, Governor Romney is a very strong supporter of investment in research, basic research, applied research, the sort of funding that the government has historically participated in and been very effective in doing so. And the way that we know that something is basic or applied research that's worthy of federal investment is that it is the sort of pre-competitive experimental technology that is unlikely to attract investment in the private sector, and for which the benefits will spread far beyond what any one investor could capture.

What Governor Romney does not support, and which frankly has never been part of American energy policy prior to this administration, is the extraordinary waste of billions of dollars that has gone into, first of all, investing in specific companies that private sector investors do not want to invest in on the premise that somehow a bureaucrat in the Department of Energy has a better idea of what will and will not succeed in the market than an investor in the private sector could.

He does not support the sort of subsidies we have seen extend for decades on end with no end in sight that have frankly disrupted more technological innovation than they have promoted, and created the sort of situation where the wind industry has actually lost 10,000 jobs under this President's administration. I think the wind industry is an interesting example, because the president is now supporting an extension. He would support at least a one-year extension at a cost of $12 billion for a policy that, as I said, has lost 10,000 jobs over the past few years, and according to the industry, not, in fact, brought it to a place where it's been competitive. And we don't know how long he would support it beyond that.

Governor Romney thinks the right place to invest is in research, and for the $90 billion of stimulus money, the government could have fully funded the Kennedy School's analysis of the appropriate research funding that this country needs for more than 20 years.

Jason Pontin: Mr. Aldy, your rebuttal?

Joseph Aldy: So it's clear that the president believes that innovation is critical in providing a strong foundation for economic growth, not just in the energy sector, but more broadly. I think it's important that we actually take a serious look at the successes of innovation in the past in a variety of sectors. If you look at life sciences, you look at agriculture, you look at computers, there was a significant role played by the government working with industry to help develop the technologies and to commercialize them.

Now it's interesting, when we think about the revolution going on now in energy in the United States, and we talk about the fracking revolution with natural gas, we actually had a public/private partnership with DOE in the late 1970s to test out shale gas technologies, the Eastern Shales Gas Project. We then had, for about 20 years, a production tax credit for unconventional gas to create the incentive for the private sector to try to bring these technologies to a stage where they can be competitive. This kind of relationship, where you see both the work at a demonstrate stage and at production, has yielded the phenomenal benefits we're seeing in natural gas now.

So the thing is, when you look at the future, the president thinks it's important for us to say, what are the kinds of technologies that we're going to want, that our children are going to want, that are actually going to create jobs for America, especially good manufacturing jobs, what are the ones that are going to ensure that we have a clean environment to live in, what are the ones that actually provide an opportunity for us to compete with countries around the world when we think about the clean energy future? That's why the president supports the extension of the production tax credit for wind.

I'll tell you why we've been losing jobs recently. It's because of the threat from Congress and in fact the opposition from Governor Romney to the extension of the production tax credit. When you talk to the wind industry, they're concerned they're going to lose up to 37,000 jobs if there's not an extension of this tax credit. We've seen an incredible expansion of wind in the United States over the last three years, more than doubling our power from it, and it's had an important impact on the economic and environmental characteristics of our energy sector. Those are the kinds of innovations we need to advance.

Jason Pontin: A follow-up question for Mr. Cass, please, briefly. Does the Governor support subsidies for any alternative energies?

Oren Cass: The governor has said that he will support subsidies in certain cases early in the stage of the development of a new technology. What he doesn't support is extending these subsidies indefinitely, and I think wind is a very good example, where while the industry will complain that they're losing jobs because of uncertainty, in fact, the entire loss occurred in 2010, immediately after the stimulus program had extended the wind production tax credit for the longest period of time in its history.

So while the industry is now attempting to blame job losses on the expiring of the credit, in fact, the job losses occurred when the credit had been extended, and there's no reason to believe that the I guess indeterminate extension that we're now hearing further support for would suddenly provide certainty where past ones have not.

Jason Pontin: Mr. Aldy, I shall ask you the same question. What are the energy goals and incentives that your administration would champion to spur innovation in energy?

Joseph Aldy: So I think there are a number of areas. Clearly, the president made an investment not just in the Recovery Act, but in the budgets for the Department of Energy, the National Science Foundation, and elsewhere, to really ramp up our investment in sciences. The president thinks that this is important when we look at the foundation long-term of economic growth. There have been challenges working with this Congress in the last few years when one looks at this. And in fact, I think there's a lot of concern that if the Republican Congress were able to get its budget across, you'd see significant cuts in the investments in R&D.

And the president is taking on innovative ways to try to promote this. For example, the president was the first to fund ARPA-E, which is actually patterned on DARPA in the Defense Department, which is a way to actually finance creative thinkers in the Defense Department on tackling a variety of challenges. They're actually the reason why we have the Internet. And saying, you know, this has been successful in the defense context. Let's do this in the energy context.

But it's much more than just investing in the R&D. It's also creating the right incentives in the private sector for people to actually create the markets for these new energy technologies. We have had a chilling effect on investment over the last half dozen years because of uncertainty about long-term energy and environment policy.

The president actually says what we need to do is actually promote clean energy in the power sector. He has said let's go for 80 percent clean energy by the year 2035. The important thing about this proposal is any technology can qualify if you can make yourself clean enough to meet the standard. So natural gas is covered by it, coal ... invest in and deploy advanced technologies are covered by it, as well as wind and solar and other renewables.

I think it's also important when we actually think about the position of Governor Romney on I don't want an indefinite extension of the PTC, and yet he seems completely comfortable with what is an indefinite extension of the subsidies for oil and gas. You know, we're in a world now where we see $100.00 plus oil. It really begs the question why we need to continue to subsidize that production, when there's such incredible gains realized by the oil industry. So there's clearly not a level playing field when you say, you've had a tax credit for a little while but we're going to let that expire because we don't want it to be indefinite, and yet you cast a blind eye on the fact that the oil and gas subsidies continue until someone finally takes action in Congress.

Jason Pontin: Mr. Cass, I imagine you'll want to rebut.

Joseph Aldy: Please.

Oren Cass: I think it was interesting to contrast the description of President Obama's policy, particularly with respect to investments in science, with what he has actually done and what he says he wants to continue doing. ARPA-E is an excellent program. It's a program that Governor Romney specifically supports. It received $400 million in the stimulus, as compared to $90 billion that was spent primarily on supporting technologies already attempting to reach the market. That ratio is very far out of whack.

In fact, the president's entire budget for energy investment over the coming four years would be about $11 billion, less than what he's proposing to spend on a single year extension of the wind subsidy.

I think an interesting thing that Joe mentioned that begins to raise deeper issues about the president's plan is that he frequently cites job creation as the goal. If job creation is the goal for energy policy, and Governor Romney believes it should be, then we should be focusing our energy policy in a direction that creates jobs. Now it is true that jobs are created assembling wind turbines, assembling solar panels, but in fact, the jobs that are destroyed and eliminated elsewhere in the economy every time we do that are significantly larger.

There is no evidence, frankly, that the sorts of investments the president is making in green energy are superior to using the far more economically effective energy technologies we already have available, and as with almost every area of technology we see, the best way to produce those innovations is not, again, through government choosing which technologies are best, but through actually encouraging innovation in the private sector.

Jason Pontin: Very brief follow-up for Mr. Aldy, please. All of the above is a inoffensive campaign slogan, good for all time zones. In the real world of policy making, we must make priorities. What alternative energies does the president prioritize?

Joseph Aldy: Well, I think the president's made clear that he wants to advance clean energies, clean energy technologies. He's made it clear that there are characteristics of that energy. If you're able to bring down the pollution content of coal, then that becomes clean energy. The president has put more than $5 billion, has leveraged more than $10 billion in private sector investment, to advance clean coal technologies. The president believes that natural gas and the efficient plants that we use today and can build in the future can satisfy that. But we need to continue to diversify our energy system by continuing to advance wind and solar.

To be clear about the job creation, it's been estimated by independent analysts, about 250,000 jobs have been created by the $90 billion spent on clean energy, okay? So there's a lot of job creation going on there. It's high quality jobs in the manufacturing sector. It's targeting jobs, when we look at the investments in energy efficiency, whether it's more than the million homes supported in the weatherization program for low income and middle to low income households, the more than million people -- families who actually took advantage of an energy efficiency tax credit for residential investments, that that has actually targeted the toughly hit construction sector over the last few years.

This is actually helping to transform the energy system. It's bringing -- being able to bring down the cost of these energy technologies as people enjoy the benefits of learning by doing. And I think it's creating continued incentives for that. It's hard for me to imagine that we think we've got a level playing field if we just sort of wiped away all these subsidies, given the incredible benefits that the fossil fuels have enjoyed over a long period of time, and the fact that we won't take the subsidies for fossil fuels off the table.

Jason Pontin: Thank you. We will now turn to unconventional natural gas and oil for the second round of the debate. Technology advances have enabled the development and production of large quantities of domestic and unconventional natural gas and oil. This has fundamentally changed the U.S. energy outlook, and in profound ways. Ten years ago, the U.S. embarked on a policy of expedited imports of liquefied natural gas. A decade later, the U.S. is considering substantial exports of natural gas. This dramatic turnaround is due in large part to the shale gas production.

On the oil front, the U.S. is, for the first time in several decades, dramatically reducing its levels of oil imports, enabled in large part by affordable shale and tar sands production. I'm going to turn to Bill Loveless to ask the first question.

Bill Loveless: Thank you, Jason. Mr. Cass, one of the biggest unresolved issues in energy policy today is liquefied natural gas, and whether the U.S. should allow exports of that to other countries. Free trade advocates say yes, we should do that, yet others worry that this is a valuable commodity, that we should worry that exports might increase the price for domestic users, not only consumers, but also industrial manufacturers, such as chemical plants. Would Governor Romney limit exports of U.S. LNG, and would he place any sort of consideration of domestic impact on making those kinds of decisions?

Oren Cass: So this is an issue that Governor Romney continues to study. I think the way that you have described the trade-off is exactly right. There is significant opportunity respect to exporting resources. There's also significant opportunity with respect to using the resources here.

The Department of Energy is actually in the process right now of conducting a study to analyze some of the trade-offs. I believe they've just postponed that until after the election. And so as far as I know, the president doesn't have a position on it either at this point.

I think, you know, two things that I would emphasize with respect to shale gas, and one of -- this returns to an earlier point that Joe made that I think is important, is that the credit that the federal government has attempted to take for these breakthroughs that have occurred in the private sector smack to some degree of what we call you didn't build that-ism, which is an attitude that really anything that occurs in the private sector, we can find a way to credit government for, thanks to something that the government has done at some point.

At the philosophical level, I think that's very dangerous, and with respect to shale gas, I don't think it's borne out by the history. Joe referred to the DOE investments that were made. According to the Associated Press, that investment amounted to approximately $100 million over the course of 30 years, or approximately $3 million a year. Now that's the sort of investments in research, in demonstration, that can come out of a program like ARPA-E and that Governor Romney would support. The entire investment over the -- in the program over the course of the three decades is about a fifth of what we wasted on Solyndra. And so when we're thinking about where we want to target our investments, I think it's important to look at those returns.

The final thing I'll say with respect to the economic opportunity is that both shale gas and tight oil, when used in this country, have the potential to create several million jobs, and that's why Governor Romney thinks we should do everything that we can to open them up. President Obama over the past year has taken actions that, for instance, actually led to a decline in both oil and natural gas production on federal lands, and we feel that that's the wrong way to go.

Jason Pontin: Your rebuttal?

Joseph Aldy: So the president certainly is not opposed to LNG exports. In fact, there's been the approval of the facility in Louisiana that Cheniere is moving forward with. There is already some exports from Alaska that have occurred for some time of LNG. The government process is focused on those projects that would actually export to countries that we don't currently have free trade agreements with. So there's some projects for which there's government review and some that are not.

As Oren noted, there's an ongoing review of those projects. But there's certainly this opportunity, and one where the president thinks it's important to look for opportunities to increase the market for natural gas and take advantage of this. Certainly LNG exports is one area where you could look at that. Certainly we've benefited significantly when we look at the manufacturing sector, where you actually see manufacturers bringing facilities back into the United States to take advantage of low cost natural gas. The president has also supported how we can push out natural gas in the transportation sector as a way to create another market to really take advantage of this resource.

I think it's also important to recognize that when you look at the production in the United States, when you look at the first three years of the Obama administration, there -- the production is 13 percent higher than the last three years of the Bush administration. So there may be a little bit of noise year to year, but it's important to see that we've seen on public lands a significant increase in the production of oil and gas. The president has actually taken a lot of actions to increase the amount of OCS and public lands that are available, pushing to streamline some of permitting process with our onshore public lands, making sure that our use of the resources offshore are safe, and that we reflect the lessons learned from the BP oil spill.

But it's important to recognize that right now almost three-quarters of our leased lands are idle, and we have millions and millions of acres that are not being developed, even though there are thousands of permits to drill that these companies have. We're actually seeing rig counts at a 25 year high. So this idea that the government is somehow stifling the development of our oil and gas resources isn't made -- isn't evidence in our statistics on both the use of our leases and the use of our rigs in the United States.

Jason Pontin: Thank you. Ms. Trauzzi shall ask the next question.

Monica Trauzzi: Mr. Aldy, natural gas is a game-changer for the U.S.'s energy policy. Define what that means to President Obama. What role should it play in the U.S.'s energy profile, and how does the U.S. successfully get to that place?

Joseph Aldy: Right. So natural gas is a game changer for a number of reasons. First, there is significant opportunity for job creation here, and we've seen a significant increase in jobs over the last three and a half years as we've increased our natural gas production in the United States, and as I noted, reached an all-time high.

It's also really important because, as I noted, it's a feed stock in manufacturing, and we had manufacturers that when you looked in 2008 under the last administration, when gas was about five times the current price, we had manufacturers shutting down and thinking they were never going to operate in the United States again. Now they actually see incredible growth opportunities in the United States. So that's more investment, more jobs in the manufacturing sector, good-paying jobs.

He also looks at it as an important fuel to play when we tackle the challenge of climate change. It's a way to actually power our economy in a way that results in much less -- much fewer emissions of carbon. If we're able to reduce our carbon pollution, that will have benefits for generations to come.

So I think because of that, the president thinks it's important that we do what we can to develop this resource and to create the markets for this resource. One, he thinks that a clean energy standard will help create a market for natural gas in the power sector. We've already seen a phenomenal shift in the power markets from coal to natural gas because of the low prices for gas. He thinks it's important to create incentives for gas to be deployed in the transportation sector, and why he thinks it's important then to create incentives for the development of those new vehicles that can take advantage of gas.

And I think it's important as well for us to look, especially for those who live here in New England, the benefits when it comes to heating your homes in the winter, to be able to move off heating oil, where you're subject to the volatility of oil prices in the global oil market, to move to the lower cost natural gas, and thus save money for families here in New England on their home heating bills.

Jason Pontin: Your rebuttal?

Oren Cass: Well, I don't think we have any disagreement on the potential for natural gas. I think the disagreement that we have is around what the appropriate set of policies is to realize that. You know, Joe has spoken a lot about the increase that we have seen. Frankly, I don't know of any policies that the Obama administration has pursued that deserve any credit for that. I know that they have so many different agencies and offices attempting to regulate it, 14 now at the federal level, that they had to create a task force to manage them all.

I know that the decline last year on federal lands was not noise. The decline was 14 percent in oil and 9 percent in natural gas. I know that if we compare leasing and permitting in the first three years of the Obama administration to the last three years of the Bush administration, on-shore leasing is down by 50 percent, on-shore permitting is down by 37 percent, and off-shore, which is more oil than natural gas, but certainly an important part of the equation, leasing is down 66 percent and permitting is down 62 percent. So I think it is difficult to look at that record and say this is somebody who's embracing our resources and taking effective steps to open them up.

What would Governor Romney do? He's put forward a specific set of policies aimed at making this development a reality. One is to let states manage federal lands within their borders. Another problem from the Obama administration is not just with the issuance of permits, but the time it takes. It now takes 307 days on average to get a federal permit to drill on federal lands. It takes approximately two weeks in some of the states, on their state and private lands. And so that's something we'd like to take advantage of, instead of looking for excuses to move more of the control to Washington.

Jason Pontin: Thank you. The next question shall be asked by Mr. Hargreaves.

Steve Hargreaves: Mr. Cass, Governor Romney supports drilling in Alaska's Arctic National Wildlife Refuge. Analysts think that if he wins in November and the Republicans take the Senate, even if it's only by a couple of seats, they will be able to open that refuge. Why is that a good idea?

Oren Cass: It is a good idea because there's an enormous amount of oil there, and we should have that oil in this country. You know, I think it's interesting to go back to 2002, when there was a debate on the issue, and Democrat after Democrat took to the Senate floor to say, this makes no sense. Why are we doing this? This oil won't come online for a decade.

It's a decade later. And we saw, for instance, last summer, that President Obama had to tap the Strategic Petroleum Reserve to release an amount of oil slightly larger, but not significantly, over the course of a month, that we could be having coming from ANWR every single day for a very long period of time. So from the perspective of prices, from the perspective of market stability, and from the perspective of job creation, opening it makes a lot of sense.

There's also a more technical but very important reason to open it, which is that the Trans-Alaska Pipeline requires a certain flow in order to continue operating, and thanks to a refusal to continue developing our oil resources, both on the Northern Slope and offshore in Alaska, our production has declined so far that the pipeline will now potentially struggle with operation at all in the near future.

So the benefits of doing it are more American jobs, lower cost American energy, a better stability of energy supply, and the disadvantages of doing it are, as far as I know, nonexistent, but I'm sure Joe can correct me there.

[Laughter]

Jason Pontin: Mr. Aldy, what are the disadvantages?

Joseph Aldy: Well, I think there's a couple of things that are important to point out here. One, with ANWR, we do have this incredible natural resource. We've made decisions in the past in our country that there are some unique environments that are worth saving, so that our children and grandchildren and future generations can actually take advantage of that rich environment.

I think it's important to recognize, too, the president has pushed forward with prudent development of resources in the Arctic Ocean. We've actually seen Shell begin to drill in the Arctic. The president has actually issued leases -- called for annual lease sales, excuse me, for the Alaskan National Petroleum Reserve. So we recognize that there are energy resources up there, and the question is, why don't we take advantage of these that do not actually despoil this national treasure?

I think it's also important, when one says, well, you know, we wouldn't have to do an SPR release if we just had this oil. You know, the SPR is for those shocks to the energy system. In this case, we were dealing with the fact that Libya's production had gone offline. And I don't think that just saying, if we produced a little bit more, that would have mitigated that, because you know what? We had in the last few years an increase in production in the United States that'd be comparable to what the best estimates are that you'd get from ANWR production.

I think it's also important, when we look at some of the statistics that Oren brought up, some of them don't actually match with what's actually going on on the ground. We actually see that permitting in the OCS has returned to pre-spill levels. Now apparently we want to give this to the states, and yet if you ask the people who actually do the drilling, the International Association for Drilling Contractors said this would be a complete mess, if we had 50 different regulatory regimes to work in.

So there's a smarter way in which we can do this that allows us to take advantage of these resources. You know, there's not a question here of whether or not we're going to develop the resources. The question is whether or not we're going to be prudent about it, and the question is whether or not we're going to be true to our principles about how we actually care about the environment and what we actually leave for our children and grandchildren.

Jason Pontin: Thank you. The next question will be asked by Lindsay Amico, a student from Northeastern University.

Lindsay Amico: Mr. Aldy, how do you define energy independence, and do you feel that the United States will be able to accomplish this task? If so, how will we do so, and how long will it take?

Joseph Aldy: So energy independence I think reflects the fact that for the average family, they don't actually have to worry about the challenges that may occur if something adverse happens in the world oil market, when it comes to filling up the car, for those who actually still use heating oil for actually heating their homes in the winter.

And so there's two sides to this, and I think this is where we see a big difference between the two campaigns. We need to increase our production at home. That means that when there is a price shock around the world, we're actually spending less of our monies to buy oil from foreign sources. We've seen incredible improvement on that here in the last three and a half years, and we're on track to having our net imports by 2020.

But what's also important is recognizing the demand side of this, that energy efficiency can play a really important role here because if it takes -- if it costs you less to take your kids to school, to go to work, to run your errands every month because your car is twice as efficient as it used to be, and under the standards set by the president, that is where we're going to end up, that effectively halves the price of gasoline the average American faces. So if we're in a world of $4.00 gasoline, in a few years when you're filling up your tank and you realize that tank goes twice as far as it used to, that's the same as living in a world of $2.00 gasoline.

So it's recognizing that there are things that you can do where we have control in the U.S.. We can actually increase our production. We're going to do that. But there's still going to be concerns about how we operate in a world oil market. There can still be shocks because of the uncertainties around the world that increase our prices. So it doesn't matter even if we go all the way to zero in terms of our net imports. If we're still operating in a world oil market, we're going to be seeing some risk.

You know, you can look at Norway, for example. They're a net energy exporter, big oil and gas producer. They see their gasoline prices go up when the world price of oil goes up. But we can be -- take more control and make it better for families if we actually reduce the amount of oil they have to consume every time they fill up their car by advancing much more efficient vehicles.

Jason Pontin: Mr. Cass, your rebuttal?

Oren Cass: Well, I think, you know, the definition of energy independence from Governor Romney's perspective is that the economic activity associated with energy production is something that occurs here, so that the wealth that we are seeing experienced in the places that we import from now is instead occurring in our own communities. That is something that is going to be a reality, and can be a reality in fact by 2020, if we look across Canada, the United States, and Mexico combined, if we actually open up our resources.

I think it's very interesting to hear Joe go straight from the need not to develop ANWR to talking about how we are going to open up our energy resources. I certainly think it's important to preserve our natural spaces, but I have a daughter who just turned one month old, and I'm guessing that she will never travel to ANWR, and that if there are some oil rigs there, that will not be a disappointment to her, particularly if it's brought us closer to energy independence.

He talked about drilling offshore in the Arctic, but those permits that Shell purchased took years to come online, and the litigation in fact got so bad that Shell had to preemptively sue and ask a court to declare that additional lawsuits would not be valid in the desperate hope of finally being allowed to start drilling. He noted that we finally started permitting development in the Petroleum Reserve. Well, it's called a Petroleum Reserve. I would hope that we're permitting there.

And so when we open up more resources, we get closer to the goal. Energy efficiency can be a huge part of that equation, but I think you hear in his description of energy efficiency exactly what is wrong with the Obama administration approach. He says, well, we're going to cut the price of gas in half for a family. Frankly, an American family that had that opportunity I think would take it. The reason they don't want to take it is because the cost of that car up front is going to be an extra as much as $5,000.00 or $10,000.00. And so there's sort of a car salesman trick here of telling you about the benefit without telling you the cost. But if we actually have technologies that are going to increase efficiency, the market will actually bring them forward without the government telling you you have to buy them.

Jason Pontin: That last conversation was a good segue to the third round of the debate, which will be about energy prices. In spite of increases in domestic oil production, oil and gasoline prices have remained volatile and generally high, while natural gas prices have decreased dramatically, lowering home heating bills, energy costs for industry, and providing significant cost incentives for shifting from coal to gas-fired power generation. Regulatory action or threats of action, particularly in the environmental area, and statutory changes in requirements such as Dodd-Frank, are affecting the general investment climate and general energy investment in particular. This uncertainty has impacts on energy prices and infrastructure additions.

I will turn to Mr. Hargreaves for a question to Mr. Cass.

Steve Hargreaves: Mr. Cass, are speculators driving up oil prices? The Obama administration seems to think so. They're trying to enact rules on the number of contracts that banks and hedge funds and others that don't actually use crude can hold. Do you agree with enacting such limits?

Oren Cass: They are not driving up energy prices, and I will be interested to hear Joe's response, but in fact, when the White House rolled out those rules, even the president wasn't willing to say there was actually any speculation going on that was actually increasing prices, because it's frankly not a significant phenomenon affecting the market today.

What is determining the price of oil in the market is supply, demand, and in many cases a risk premium. And if we increase supply, we will see a decrease in prices. The other thing that affects energy prices to a significant degree is where we get the energy from. Not all energy is created equally, and energy that we are able to produce in this country, for instance, is significantly cheaper because it doesn't have to be moved as far. And the energy we get from Canada is significantly cheaper, because we are currently their only consumer, and again, it's much closer to be brought through a pipeline than on a ship.

Unfortunately, the Obama administration has blocked the Keystone Pipeline repeatedly, and while that's become a very salient political issue, I think from the perspective of energy prices, it is substantively very important, because it has not only in the short run brought less supply into this country, but it has also led to Canada saying, well, then, we're going to export that oil to Canada -- excuse me, to China, and other nations in Asia. And if Canada actually builds that infrastructure and does that, we will, for the very long term, see a very negative impact on energy prices, and deprive ourselves of what right now is our probably best energy partnership and our best supply of rapidly growing, affordable energy.

Jason Pontin: Mr. Aldy, what is the administration's evidence for speculation?

Joseph Aldy: So I think this is an issue that people have been discussing, certainly for the last five or so years after the run-up in oil prices in 2008. I think what's important is that we actually have more transparency in this market to understand this. To be candid, it's a little complicated, because actually it's an independent agency that issues these rules, the CFTC. So it's not coming out of the White House.

But there are concerns about whether or not there are opportunities for market power or for speculators to impact the prices. So I think transparency can do a lot on this.

But Steve, if you don't mind, there was a lot just said about Keystone that I have to address. Okay. So first, building Keystone would have had no impact on prices this year. We actually have surplus capacity, some of which, from Canada to the U.S., pipelines approved by this administration. This administration has approved enough pipelines to actually go all the way around the world. We actually see, from the Alberta Clipper, the pipeline the president actually approved in 2009 bringing oil from Canada to the United States.

This idea that, oh, Keystone would actually have a big impact today is completely misleading this debate. Moreover, the sponsor of Keystone has come back to the U.S. government. They've brought a new proposal. It's being evaluated now by the U.S. government. It's being evaluated by Nebraska, that also has concerns about this. The State Department plans to make a decision on this in the first quarter of next year.

So it's completely wrong to say, you're paying more for gasoline now because Keystone hasn't been built. It is an incredibly small number of miles relative to what's been built in the United States. The president has gone forward with other pipelines that are actually allowing us to take advantage of the resources in Canada, and we're going to be prudent to figure out if we can actually resolve the environmental concerns, especially those that run through Nebraska, with the new proposal.

So enough of the sort of politics and game-playing, like what we've also seen with the Republicans in Congress wanting to completely short-change the process. It's not having an impact on gasoline prices today.

Oren Cass: May I respond to that briefly?

Jason Pontin: You may briefly respond to it in under 20 seconds.

[Laughter]

Oren Cass: I will just say two things. One is that I did not say that Keystone was important because of the reduction in prices today. I said it was important because if it went --

[Crosstalk]

Oren Cass: I said because of what it meant for our long-term relationship with Canada, where they plan to send their oil, which they have specifically linked to our decision on Keystone, and what that will mean for our availability of energy. And now I'm abusing my extra time, but I just have to say that this idea that Nebraska is continuing to try to find a source is simply incorrect, because last November Reuters reported that Nebraska Governor Dave Heineman signed into law on Tuesday a bill to reroute the Keystone Pipeline away from the sensitive region.

So Canada -- excuse me, Nebraska, its governor, its legislature, has identified a route, was ready to move forward. The pipeline company was ready to move forward. And President Obama, in an election year, was not ready to move forward.

Jason Pontin: Mr. Aldy, I'm going to ask you a follow-up, which you may no doubt abuse to go and respond to that as well.

[Laughter]

Jason Pontin: Do you believe that the president will OK Keystone?

Joseph Aldy: I believe that's a decision he's going to make next year.

Oren Cass: After the election.

Joseph Aldy: No, I mean, he -- they're evaluating the new path. They've got a new proposal from the company.

Jason Pontin: Would you answer the question, please? Do you believe that he will -- he will OK Keystone?

Joseph Aldy: I'm not going to pre-judge the process. He's made it very clear he's going to work through the process. One thing that is important is that for that part that actually runs -- the southern leg -- actually go all the way down from Oklahoma into the Gulf Coast, he's actually approved that and pushed for an expedited processing of that.

So, you know, when you're talking about the jobs here, he's actually moving that forward there that actually has a positive impact, because occasionally we do actually see bottlenecks in the oil system between Oklahoma and the Gulf Coast, and given that we have this significant increase in refining capacity in the Gulf Coast, the construction that's going on there will actually have a benefit in bringing the crude to the refineries.

Jason Pontin: Gentlemen, thank you. I'll ask Mr. Loveless to ask the next question, please.

Bill Loveless: Thank you, Jason. Mr. Aldy, I'd like to return to a topic that you and Mr. Cass touched on a minute ago, and that is what some call energy subsidies for various forms of energy, be it oil, natural gas, renewable energy, coal, nuclear. Many believe such assistance distorts markets and consolidates among Washington lobbyists important decisions on energy markets and energy policy. President Obama's preference has been to support government aid for renewable energy and end it for oil and natural gas. But in a broader attempt to reform the tax code, as many expect will happen sometime in the near future, would he consider ending all subsidies for energy?

Joseph Aldy: Well, I think it's correct to point out the president does support subsidies for renewables. He believes that when you see oil prices this high, we don't need subsidies for the oil companies. When you look at the profits these companies are making, you don't need it. When you look at the independent economic analysis that says, what kind of impact does this have on our production, it's measured in the tens of thousands of barrels. So in a country that now produces more than 6 million barrels a day, the best case analysis suggests maybe the subsidy matters a couple of tens of thousands of barrels. OK?

That is clearly noise. I should note, by the way, as a quick thing, the noise for 2011, while less than 2010 and 2009 in terms of public land production, was still higher than 2006 or 2007 or 2008. OK? We've seen a big increase in our production on public lands in terms of oil and gas.

Now when we actually think about reforming these, I think it's important that's there some who say, let's just have a level playing field. Let's get rid of all the subsidies. Now when you're doing that, you may say, hey, we don't want to pick winners, but you are picking winners. First, those who have benefited by subsidies for an incredibly long time, the incumbents in the fossil fuels that have benefited from subsidies for, in the case of oil, nearly a century, they're winners. They've become established, and they will actually benefit if you got rid of all of these.

The other winners are going to be those who say, I don't really want to compete with the renewables if they have a subsidy. You know, so that may be oil and gas, it may be other sources. But what's important to recognize is that we have losers, because right now, we actually don't see full freight being paid by fossil fuels when they come to market. Okay? They impose costs on Americans. They contribute to premature mortality. They contribute to hundreds of thousands of hospital visits each year. And this idea that we should treat them the same, even though one technology is clean, it actually doesn't impose these health costs, the other one is not, the idea to sort of treat them the same doesn't seem reasonable.

And so that's why the president thinks it's important to continue to support these clean technologies, to actually make them available in the power sector and beyond, because they're not comparable if we just say, let's get rid of all the tax credits.

Jason Pontin: Mr. Cass?

Oren Cass: This actually came up in the debate on Wednesday night, so I will essentially just echo what Governor Romney said, which is first of all that what President Obama likes to call these subsidies for oil and gas are in fact standard accounting treatments that have been in the code in some cases for 100 years, that are generally available to industrial companies in some instances, and that pale in comparison to the amount of spending that we see now in green energy, despite their enormously more important contribution to the economy.

So to just do the math very quickly, we have $2.8 billion in subsidies to oil and gas, if we call them subsidies. We have support for a $12 billion one year subsidy for wind. And yet oil and gas produce about 30 times as much power for the economy as wind does. So when you combine those two factors, we're essentially, in President Obama's case, not only supporting subsidizing wind at 100 times the rate, but at the same time complaining that that makes complete sense and the $2.8 billion doesn't.

All of that said, Governor Romney said on Wednesday night that in the context of fundamental tax reform, he absolutely thinks that that $2.8 billion in subsidies should be on the table. What he does not support is without tax reform, simply for political purposes, finding what sounds like an unpopular provision of the tax code and saying, that's the one that we're going to strip out.

Jason Pontin: Thank you. Ms. Trauzzi, your question, please.

Monica Trauzzi: Mr. Cass, as energy demands rise, what role do you believe coal should play in the U.S.'s energy policy moving forward? And without commercially viable carbon capture and storage, what kind of certainties exist for this industry and also pricing in this sector?

Oren Cass: Governor Romney thinks that coal should play a very important role in our economy. He likes to say that in his administration, coal will not be a four-letter word. And I think that what is so important in the contrast is that while Governor Romney actually says what his position on coal is, President Obama at the same time says he supports coal, and in fact is doing extraordinary things to attempt to shut the industry down.

At one point, the -- President Obama's all of the above section of his energy website did not include coal in its all of the above set of sources. They updated that when someone pointed it out to them, but their YouTube video still didn't, so you could see on the website both an all of the above plan with coal and one without coal.

Vice President Biden in 2008 said no coal plants in America. President Obama in 2008 said his plan would bankrupt anyone who attempts to build a coal plant in America. And the EPA in its most recent round of regulations has in fact said that because of the regulations put in place by the Obama administration, no new coal plant will be built in America.

So when the Obama administration says clean coal, what they are talking about is in fact carbon capture and sequestration, which as you said is not commercially viable. So their definition of support for coal is to only support coal that we have no proof can be used. That is not frankly support for coal.

We absolutely need coal to be clean, but what clean coal used to mean and what it should still mean out of sort of the Orwellian world is coal that actually does not emit conventional pollutants that are harming health and the environment. And we have technology today that can do that. Just recently a plant was opened in Virginia that is extraordinarily clean, and that's why despite using an extraordinary amount of coal in this country, we have seen significant improvement in air standards consistently for decades. So Governor Romney's view is that coal, which can provide very cheap power, which is very important to large swathes of the economy, should be part of the equation, and although this election season clean coal has made it back into the president's language, the reality is that his proposal is to eliminate coal from our portfolio.

Jason Pontin: Mr. Aldy?

Joseph Aldy: So the president made it very clear that he supports clean coal. He's made significant investments in clean coal technology, as I noted earlier, $5 billion, that has importantly leveraged more than $10 billion from the private sector. In fact, Bloomberg said recently that the U.S. is leading the world in terms of the first commercial scale carbon capture and storage facility.

But I think it's important for us to take a look at what's happening to coal and how people are blaming EPA when the so-called war on coal that we hear from the right is not coming from the administration, it's actually coming from natural gas. In fact, when you actually look at the analysis, EPA did not say there'll be no new coal plants because of this regulation. They actually said that because of natural gas prices, we don't foresee any new coal plants coming online. So they actually estimated that there is not this burden on the coal industry because they are going to have challenges with new plants competing with natural gas.

I think it's really important, too, that you noted that, you know, clean coal is not emitting pollutants that harm public health, and yet what I don't understand is Governor Romney opposes the mercury standard. The mercury standard makes incredible sense when you look at the public health, the benefits estimated on the order of 11,000 premature fatalities avoided each year, but when you look at the economic analysis, I mean, the Governor is a Bain guy, you know. He looks at what are the returns on investments and what are the costs on investments. You look at this from the perspective of society, which is what the president should do, is look at the broad interests of everybody, the benefits of that are at least three times the cost.

Now if you actually went to an investor in Bain and said, for every dollar you put in I'm going to give you a $3.00 return, they'd probably think that's a pretty good investment. Now that's what I don't understand, is that when you see something that passes the benefit-cost test so dramatically and saves more than 10,000 lives each year because of the pollutants that come from coal, why doesn't the governor support that?

Jason Pontin: Yes, briefly.

[Laughter]

Oren Cass: So I am also a Bain guy, and I have looked at the analysis, and in fact, what the analysis shows, and keep in mind this is a mercury rule, as Joe described it, is that for approximately $10 billion in cost, the savings from reductions in mercury will be $6 million, with an M. So for every dollar in mercury reduction, we spend $1,600.00 more.

Now I'll keeping getting technical until he cuts me off on this. Why did Joe say in fact the benefits outweigh the costs? He said it because what are called -- of what are called co-benefits. The EPA didn't just look at the benefits from mercury and the costs from the proposal. They said, because this is so expensive, it's going to shut down an enormous number of coal plants, and if we shut down an enormous number of coal plants, we'll take a lot of particulate matter out of the air. If we take a lot of particulate matter out of the air, we will achieve all of these benefits that he's talking about.

There are only two problems with that. One, if that's what they wanted to do, why didn't they regulate the particulate matter? And the answer is that they couldn't, because the EPA already says that particulate matter standards in this country are at a level that is safe for human health. So they use this around the back attempt to shut down coal and take credit for these co-benefits, when in fact the regulation they were putting in place was entirely unjustified under the law that they were using.

The second problem with it is that if you take cost-benefit --

Jason Pontin: Two problems, please.

Oren Cass: What's that?

Jason Pontin: Only two problems, please.

Oren Cass: Yes, I said -- yeah. The second of two problems is that if you're going to define benefits this way and costs this way and look beyond the scope of the rule, we should actually look at all the costs. So for instance, there is no analysis of what the broader cost to the economy of the shutdown of coal plants is going to be. There's no analysis of the cost of the unemployment of the significant number of workers at those plants and in coal mines who are no longer going to have those jobs.

And so if we want to do a let's look at the whole world, you can of course come up with any analysis that you want. If we want to actually follow the law, it's one of the most outrageously unjustified regulations this country has ever seen.

Joseph Aldy: That's shocking.

Jason Pontin: Mr. Cass, at the risk of exhausting the audience, you know as well as I do that when we talk about clean coal, it is not particulates that people are worried about. By some accounts, the older coal plants are twice as dirty in terms of CO2 emissions as the newer natural gas plants. Is reducing carbon emissions from coal a legitimate end of the U.S. government?

Oren Cass: Well, I think that moves into the global warming segment.

Jason Pontin: I -- we are going to talk about that, but I'd like your answer on that in this context.

Oren Cass: Is the question whether reducing carbon is a legitimate goal of the U.S. government?

Jason Pontin: In the context of clean coal.

Oren Cass: No.

Jason Pontin: The next question -- we will be returning to climate change in the next sector.

[Laughter]

Jason Pontin: Trust me.

[Laughter]

Jason Pontin: The next question is to Eric Lau, who is a student at MIT.

Eric Lau: Mr. Aldy, how does the president plan to support university research in future energy technologies other than adjusting funding?

Joseph Aldy: I'm sorry, other than --

Eric Lau: Other than adjusting funding.

Joseph Aldy: Well, I think it's important that we just had a few years ago where the president ramped up ARPA-E. And, you know, there you have an opportunity to actually support a lot of university research. It's one where we're actually still learning what the returns are to that kind of research. So I think part of it is is it'll take advantage of that novel tool as opposed to sort of the traditional approach of funding in which the Congress sort of puts so much money into this energy pot, you know, the nuclear account, this so much into the fossil account, this so much in the energy efficiency renewables account.

So I think that kind of flexibility in -- available through ARPA-E to really go out to potential game changers across the energy system are really important. There are a number of ARPA-E projects actually supporting work going on here at MIT, several of which are looking solar thermal, some of which are looking at storage technologies. I'm sure Ernie can do a better job than I can talking about all those benefits that are going on here.

But I think it's important to say, hey, let's take advantage of that, and then let's also look at what we can do when we do funding of new projects through the U.S. government. So for example, when we look at nuclear, the administration is trying to support small modular reactors. So the idea is to actually bring new technologies into the nuclear marketplace, and to provide research support for that initial demonstration effort.

So, you know, the question then is as we go in to sort of develop new programs that really try to push the frontier on energy technologies, we're going to be seeking out the most effective ways to try to deliver the resources to the best scholars in the world -- many of them are here at MIT, they're in universities around the country, as well as in our national labs around the country -- so that we can really make sure that we have a robust foundation of knowledge that the private sector can then benefit from and bring to commercial reality.

Jason Pontin: Mr. Cass?

Oren Cass: Well, I think we mostly agree on the point about the importance of research funding for energy. I mentioned specifically the Governor supports ARPA-E. I think that there are other thing that get more into almost an education discussion that can be done to address the way that intellectual property moves from universities into the private sector that are also very important. And so the only other thing I would say is that, you know, relatively speaking, Governor Romney would allocate much more of his funding to university work and much less to more commercialized investments that I think President Obama probably would.

Jason Pontin: Thank you very much. I've been following the Twitter debate, and you have all been saying, when is he going to ask a question about climate change? And that is in fact the subject of the last and fourth round of tonight's debate. The U.N.'s climate change conferences in Copenhagen, Cancun, and Durban have produced little in the way of global agreement on a path forward for addressing climate change. Further, almost 70 percent of the increases in global CO2 emissions will be from a very narrow subset of countries and regions: China, the U.S., India, and the Middle East.

Finally, in terms of long-term forecasts, the U.S. has decreased its CO2 emissions in the last five years more than any country in the world, yet I think it's fair to say that we lack a global and national set of policies and treaties to address climate change. So Ms. Trauzzi, you have the first question of the last segment.

Monica Trauzzi: Mr. Cass, with China, Korea, Japan, Australia, the E.U. all moving forward on some form of a climate policy or cap and trade, what specific policy prescription will your candidate employ to reduce emissions? What is your idea of a no regrets climate policy?

Oren Cass: So Governor Romney's position on climate change is very straightforward, which is that the United States taking action unilaterally is not able to effectively address what is a global problem. You cited China as a company that -- or as a country that now has a climate policy --

[Laughter]

Jason Pontin: It's like a company.

Oren Cass: At times. You cited China, which you said has a climate policy. China's increases in coal consumption are extraordinary. In fact, over President Obama's term, for every 1 unit of coal that has been cut in the United States, China has increased its consumption by 10. And so in that context, for the United States to take action to drive up the price of carbon in this country to try to reduce emissions is not going to address what is a global problem. What it is going to do is hurt our economy very seriously, and it's going to drive a lot of industrial activity from the United States to countries that are frankly much less efficient in their use of energy. So the positive benefit is weakened even further in that respect.

When Governor Romney talks about a no regrets policy, what he means is the policies that we can pursue that will move forward, particularly with technological innovation, to find solutions without having negative effects on our economy in the interim. And so we've had a debate already about what the right way to facilitate that technology is. Governor Romney's view is that the private sector can do the best job, that basic research funding is the appropriate role for government, and that more aggressive subsidization and investment by the government can in fact have a counterproductive effect on innovation in the private sector.

In contrast, and I'll let Joe of course answer this question for himself, I think there's a very real question of what President Obama's policy is at this point. Certainly in 2008 he supported a very robust cap and trade program. Since then, his advisors have stepped back from that position. I don't know if he has spoken on it recently. And frankly, it's unclear what steps President Obama is ready to take to back up what is certainly very aspiring rhetoric on the issue.

Jason Pontin: Mr. Aldy?

Joseph Aldy: Global climate change is an incredibly serious challenge. It's a very tough challenge. We're going to need engage countries all around the world if we're going to be successful in tackling this challenge. The president personally worked extensively in 2009, including personally negotiating with the heads of state of China, India, Brazil, and South Africa to actually get them for the first time to put forward their emission goals in the same kind of agreement that the United States does, and we did so on comparable grounds. So that was the first time we'd seen in the nearly two decades of the climate change negotiations where the biggest emerging economies in the developed world were all putting forward their mitigation efforts.

Now going forward, we know it's going to be important because of the rapid growth in emissions that these countries are going to have to take action. Now to stand back and say, we're not going to do anything, we don't want to be a leader, we think that, you know, if we do anything here, it's going to harm our competitive standpoint, it's hard to reconcile that with the fact that you look at the first five months of this year for which we have data on our CO2 emissions, we're actually back to our 1990 levels.

Now we're actually seeing our exports increase. We're not seeing actually -- you know, this is occurring as our electricity rates are coming down. This is being driven in large part because of the increase of both gas and renewables in the power sector. But it's also significant increases -- excuse me, significant reductions in emissions because of the improvements in energy efficiency in the residential sector and in the industrial sector.

Now, you know, what will the president do? He ran on cap and trade in 2008. He pushed very hard in 2009 and 2010. Even though you had five Republican Senators in 2008 put forward and co-sponsor cap and trade legislation, none of them wanted to step forward in 2010. The president then put forward in the beginning of 2011 a Clean Energy Standard, not that much different than actually a bipartisan renewable standard that had passed the Senate, and actually an expansion on what three Republican Senators had supported in 2010, expanded to include natural gas, and again, no one in the Republican Party wants to touch it.

So there's this challenge that one sees, is that whatever the president puts forward, the Republicans know that their position is the opposite of what he's supported. Now he thinks that it's going to be important to advance clean energy technologies and reduce carbon emissions in the power sector, but to be candid, if we're going to make progress on this, we're going to need some kind of work with Congress, and if we don't, the president is going to continue to use the authority he has under the Clean Air Act, which Oren can speak to this I'm sure in follow-up, the governor opposes and would like to withdraw.

Jason Pontin: I'm going to allow Mr. Cass to make a rebuttal, because I am -- for my follow-up question, I wish to ask the same question. I enjoyed your description of what the governor would not do as President. Could you please describe to me what the governor's current view on climate change is, its urgency, and what can be done by the U.S. government to constrain it?

Oren Cass: So what Governor Romney has said about climate change generally is that he believes its occurring, that he believes human activity contributes to it, but that he thinks there's absolutely still a debate around the extent of -- on both of those factors, and the nature of the threat that that poses. And so he certainly supports continued scientific inquiry in that respect.

In terms of the policies that he would pursue, they are the same policies that I just described, which are policies aimed at supporting technological innovation, which he sees as the only solution that has the realistic prospect of bringing the developing world along and actually delivering solutions that the developing world will participate in. And I will yield my final 45 seconds back to Joe on the question of whether or not President Obama supports either cap and trade or any pricing of carbon.

Jason Pontin: That is my role to ask that question, but --

[Laughter]

Jason Pontin: But if you would like to answer that question, Mr. Aldy, you may.

Joseph Aldy: You know, as I noted, every time the president comes up with something -- I mean, if we had -- you know, you go back to the debate in 2008, not much difference between Senator McCain and then Senator Obama on cap and trade. And then there's this policy in the Senate that says, whatever the president's supporting, we're going to oppose, by the Republicans.

You know, so this idea of like, well, is the president going to come out with something new, the president had a policy, it got pushed back. He then said, well, I've seen bipartisan support for something that looks like a Clean Energy Standard. The Republicans called it a Diverse Energy Standard. So then he puts forward -- puts it forward, and it falls on deaf ears again on the Republicans in the Senate.

So this idea of the president has to keep coming forward with something new, I think he wants to see something from the other side that says, we're actually going to work in a good faith effort on this. Continued scientific inquiry isn't going to cut it. It's not sufficient. This is -- you go back to the early 1980s, this is what President Reagan said we ought to do about acid rain, and so we didn't take action, we didn't take action, had a huge scientific effort. It wasn't until -- and I'll applaud this -- a bipartisan effort by a Republican White House in 1990 and a Democratic Congress that we got serious action to tackle acid rain.

And it's that kind of bipartisanship the president would like to try to secure. It's the bipartisanship he thought he was going to get, having moved from the Senate, where you had bipartisan cap and trade bills sponsored in 2008, and then could not find that from any of his former colleagues on the other side of the aisle in 2010.

Jason Pontin: Thank you, sir. Mr. Loveless, you have the next question, please.

Bill Loveless: Thank you, Jason. Mr. Aldy, understanding your view on the politics of climate change the difficulties of reaching bipartisan agreement, I'd like to look at another idea that seems to be gaining some attention again, and that's a tax on carbon emissions. It's something that increasingly it seems conservatives as well as liberals have been talking about recently. It's something that the view is, if this - something like this would target emissions, but leave to the market decisions on which technology and which responses are most appropriate to deal with the issue. A tax would also raise billions of dollars that could be used for -- to reduce the government's deficit or rebate to taxpayers. Would the president in a second term consider a carbon tax?

Joseph Aldy: Well, I mean, the president is quite pragmatic. He knows he's got a challenge in the next term, which is how to deal with our long-term fiscal condition and the need to reform the tax code. He has put forward two approaches to date, as I noted, cap and trade and a Clean Energy Standard. Both of these actually harness the power of markets. They don't say the government's telling you you have to do this, you have to do that. It just creates incentives for individual companies, for clever entrepreneurs, for innovators, to come up with a great new technology and go exploit that and bring it to the market and make money on that, and that's great. It's really harnessing that profit incentive that's important.

As you noted, a carbon tax can deliver similar kind of incentives. As I already noted in the follow-up, the president's already put out two policies, and he hasn't seen anything from the other side. So whether or not he would actually consider it I think is actually a more important question for whether or not the other side of the political aisle would consider it. I mean, we're in a world in which, as was discussed on Wednesday night, even if we had a ten to one ratio of spending cuts to revenue raisers, none of the Republican candidates in the primary, including Governor Romney, said they would support that.

So it really starts to sort of beg the question of why would the Democrats and why would the president start to negotiate with themselves and then bring something forward when you have this kind of intransigence with this? I mean, I think we have a serious debate. We know we have to tackle spending. We know we have to tackle revenues. And so the president will be pragmatic, and if he actually sees a goodwill gesture from the other side, whether it's on a carbon tax, whether it's on other elements of fiscal and tax reform that are consistent with his principles, and it's being fair to the middle class, and if you can do so in a way that also tackles the challenge of climate change, I think he would consider that.

But I'm just speculating on that, but I think it's important to say, hey, is he going to come out and actually propose this? He needs to see a goodwill gesture from the other side, because he hasn't seen it for the last four years.

Jason Pontin: Mr. Cass, would you like to end the speculation and tell us what a goodwill gesture would look like from the other side?

[Laughter]

Oren Cass: Frankly, I'm not sure how we landed in a political debate about budget cuts. I think we ended there because the president isn't willing to say what his policy actually is on a carbon tax or frankly any pricing of carbon. You know, at least Governor Romney is willing to say exactly what he thinks and explain why he thinks that and stand behind it. What we have from President Obama at this point is all of the rhetoric about climate change, wants all the credit from the environmental movement for, as he said back in 2008, stopping the rise of the oceans, and yet not willing to support either cap and trade or any pricing of carbon at this point in time.

Now it's a very interesting argument to say, who knows what President Obama thinks, but he's not willing to put anything forward, particularly as someone running for president. One would hope that someone running for President would be very proud to say what they think, look forward to putting it forward, and attempt to bring people along with them. In fact, Joe started this discussion by talking about the need for the U.S. to show leadership, and so frankly at this point, I don't even know the extent to which we can continue to have a debate about climate change, where one candidate -- and this shouldn't reflect poorly on Joe. I know the challenge of having to answer a question where your candidate doesn't necessarily have a position established yet, although in this case --

[Laughter]

Oren Cass: Although in this case cap and trade used to be the president's position, so I don't know if it's -- if he's no longer supporting it. But again, I think it is incumbent on him, if he is going to embrace the mantle of leader on climate change, and if he's going to embrace the mantle of the reasonable adult in the room on this issue, to at least say, either yes, he is willing to take steps like a carbon tax or cap and trade, or no, he no longer supports those steps.

Jason Pontin: Were Governor Romney the president, knowing as you do the Congressional Democratic Caucus, what would a bipartisan agreement look like around carbon policy?

Oren Cass: Well, I think from Governor Romney's perspective, the right carbon policy is, as we've already said, to focus on innovation, not on the pricing of carbon. I don't know what the Democrats' position is at this point, so I can't tell you if there's a bipartisan space to be made up. You know, the Washington Post actually wrote an editorial last month making this exact point, which is that at this point, it's not clear what the difference between Governor Romney and President Obama is on climate change, with the exception of the question of what they think is the best way to promote technological innovation.

And we'll have a debate all day long about what the right way to promote technological innovation is, and whether it should be private sector led or government led, but again, you know, for someone who embraces the rhetoric and calls for the leadership, it's very difficult to take that seriously if he's not even willing to support the policies that the people focused in that direction believe are absolutely necessary.

Jason Pontin: The next question is Mr. Hargreaves, please.

Steve Hargreaves: Yeah. With the lack of a real clear overall policy limiting greenhouse gases, I'm sure you'll agree that the Obama administration has tried to cut greenhouse gas emissions by using the EPA. Mr. Cass, what three specific climate or environmental regulations being implemented or being pursued by the Obama administration do you feel are most troublesome? In other words, what would you try to roll back on day one?

Oren Cass: Yeah. Well, we've spoken about the Utility MACT, which is the mercury regulation, which Governor Romney has said he opposes. With respect more broadly to EPA regulation of greenhouse gases, that's something that Governor Romney opposes and has said he would attempt to reform or reverse by reforming the Clean Air Act. The Clean Air Act as written authorizes EPA to take very strong action against pollutants, and the question that that poses is what is a pollutant?

Now the Supreme Court ultimately concluded that carbon dioxide did qualify as a pollutant, which created a very interesting problem, because the way that the Act is written, the thresholds for what counts as a polluter that therefore needs to be regulated are so low that an extraordinary number of small businesses would suddenly come under the purview of regulations that are otherwise intended to be focused on power plants and large industrial facilities.

The Obama administration has responded to this by issuing what they call the Tailoring Rule, which says, well, we want to regulate carbon dioxide, but we realize the law isn't actually designed for this, so we're simply only going to implement our regulations with respect to facilities we want to implement them, in this case coal power plants.

Governor Romney thinks that's both an abuse of the Clean Air Act, and that it reflects the fact that any carbon regulation that one might want to pursue absolutely should not come through the Clean Air Act, because it's not tailored for that purpose. So the Clean Air Act is another thing that he thinks more broadly should be reformed to focus on the pollutants that are most important to preserving human health.

And then I think if you look beyond that, you know, there is a broad range of regulatory actions, probably not as directly focused on greenhouse gases, but focused across the spectrum of energy policy that have come not only from the EPA, but Interior, that we've spoken about with respect to the ways that efforts to produce energy in this country have been frustrated, and he would look to roll those back and actually encourage the production of the energy.

Jason Pontin: Your rebuttal, please.

Joseph Aldy: So a few things. First, while Governor Romney may consider the Tailoring Rule an abuse of the Clean Air Act, the Appeals Court in Washington DC does not, and they actually upheld --

Oren Cass: There was no standing.

Jason Pontin: Please, don't speak.

Joseph Aldy: So the thing is, it's actually a smart way to go through the process, to say we're going to go after the largest sources first in a tiered process, and over time, we'll cover all sources.

Now the EPA has also said, wait, we can actually help enable and promote the effort to improve fuel economy, and in fact, what we've seen are two of the landmark regulations where EPA worked with the Department of Transportation in advancing the Joint Fuel Economy Tailpipe CO2 Standards.

Now Governor Romney said he would roll those back. You quoted some numbers I had not seen before on these costs. What I do know is that the analysis shows that the savings to the average household are $8,000.00 from the improvement in fuel economy.

The other thing, when we get back to the MACT standard, and I think this is important, because I find this mind-boggling, that if you actually take action - in this case we call it the Mercury Rule. It actually covers other air toxics as well, many of which are fine particulates, that because they're co-benefits, they don't count, or as Governor Romney wrote in the Columbus Dispatch, they're imaginary, right?

OK. The five-year-old kid with asthma who has to go to the hospital because of this pollution, that's not imaginary. Grandma with chronic bronchitis who dies prematurely, that's not imaginary. So this idea of saying, I'm going to do some kind of strict accounting where I just focus on what's the first word in the title of the rule, I'm not going to look at these co-benefits, and I'm going to call them imaginary, is somehow saying, I don't care about the calculus for the general public. I'm just going to focus on the corporate bottom line. And I think that is wrong, and I think it's actually disingenuous to say he's for reducing pollution to help public health and yet he's opposed to the MACT rule.

Jason Pontin: Thank you. The next question will be from Ryan Cook, a student at MIT. Mr. Cook?

Ryan Cook: Mr. Aldy, one area in energy policy that has enjoyed a rare degree of bipartisan support has been energy efficiency. Additionally, many studies, including the MIT Future of Natural Gas study, argue that efficiency must be a central element to any climate change policy. However, as Recovery Act funding for efficiency programs begins to disappear, we are in danger of losing the momentum that has been built. If reelected, what will Mr. Obama do to ensure that we continue to make progress on energy efficiency?

Joseph Aldy: So the president has taken a number of actions to promote energy efficiency. I noted that to actually make it easier for people to invest in energy efficient windows, insulation, energy efficient water heaters, we had a tax credit where more than a million families, many of them in the middle class, could actually buy this equipment, lower their energy bills going forward.

We actually saw for the low income and low to middle income households more than a million homes were weatherized. That, again, will save the average family in that program $500.00 or more a year in terms of their energy bills.

Going forward, then, the president said, you know, we have authority to actually promote more efficient appliances, and so the Department of Energy started establishing standards for more efficient refrigerators and other household appliances.

Now it's important to recognize these rules have to be designed to satisfy a benefit-cost test. And so in all of those, you actually see a careful analysis of both the proposed rule, a variety of alternatives, and an assessment of the net benefits to society.

So the president has pushed forward on those fronts. As I've already noted, he's pushed forward on vehicles in terms of fuel economy, where by 2025, cars will be twice as efficient as what they were when he came into office. So I think he's trying to take an approach across a wide array of areas using the current authorities that he has, and I think that's actually had an important impact for why we actually see energy consumption on a per unit basis actually down in the industrial sectors, and why we're actually seeing people enjoying lower energy bills.

You know, you can look at the prices, and certainly lower natural gas prices help, but if you actually have to consume less gas to keep a constant temperature in your home in the winter, you're better off by that as well. So I think you're seeing a lot of those kinds of benefits. And something that I find quite surprising, you know, you look at the white paper that the Romney campaign put out, energy efficiency is not in there. The word efficiency is in there once. It's a reference to economic efficiency. Like it's as if you're saying we can deal with this by production on energy, and if -- they only focus really on fossil fuels, or no, we're not going to do energy efficiency. We're going to tie one arm behind our back. And I just don't think, if you're going to be successful in dealing with our challenges, you should take energy efficiency off the table.

Oren Cass: The interesting thing about energy efficiency and government policy related to it is that it is most of the time a solution in search of a problem. And the reason I say that is because there are two scenarios that we have to think about, and I think the CAFE standards are an excellent example.

In one scenario, auto companies investing over the next ten years in technology to save consumers $8,000.00 at the pump will allow them to sell a car less than $8,000.00 more expensive, and that car will be an attractive offering to consumers. In that world, it's not clear why we need CAFE standards.

In the other world, that $8,000.00 savings will be more than overwhelmed by the upfront cost of the car with all of the new technology and research development built in. In that world, we are not doing consumers any favors by telling them they have to buy those cars, and we're not going our economy any favors by focusing investment in that direction.

The same can be said about energy efficiency in a wide range of contexts. Now there are places where there are market failures that need to be addressed, where energy efficiency is relevant. Governor Romney doesn't believe there's no role at all with respect to energy efficiency. But when you hear a policy proposal that say, we need to do this to save somebody money, you should be suspicious, because if it saved them money, they would do it on their own.

And so our policy for energy independence focuses on production, because that's the place where government policy is currently in the way and needs to be fixed, and because the reports, many of which agree on this matter, that we cite in that white paper document, that it is production that will be the key to getting us to that goal.

Jason Pontin: Thank you. The final question of the night is to the Knight Fellow, Elana Schor.

Elana Schor: Mr. Cass, politically speaking, given your description of Governor Romney's position on climate change, he faces a fairly monumental challenge on Capitol Hill, squaring his stated support for reducing emissions with his encouragement of continued debate over the extent of the real risk of climate change. Given that at least the House and perhaps the Senate will be Republican, if elected, how does the Governor plan to show leadership and rally conservatives behind the task of reducing emissions?

Oren Cass: Well, I think, frankly, that that's not where Governor Romney would put his emphasis. You know, I earlier in the discussion, when initially asked about whether that should be a focus for government policy, just said no. You know, advanced technologies with respect to coal and other fossil fuels are absolutely important, as are advanced technologies in the renewable space, and Governor Romney believes that investment should focus across all of them. So in that respect, these are all things that would receive his attention. But with respect to a legislative agenda, moving forward, climate change would not be at the top of it.

Now President Obama has said that climate change would be at the top of his agenda. At least according to The New Yorker he said it was the most important policy he could address in his second term. And yet it's not clear whether he would attempt to take any action forward-looking in that respect, either. It sounds like until conservatives in Congress step up, he's willing to wait.

And so, you know, I think from Governor Romney's perspective, there are a lot of places to make bipartisan progress. I think energy policy is absolutely one of them. You know, offshore drilling is an interesting issue where there's a bipartisan consensus in Virginia, Democrats and Republicans, that we should open off -- open up leases in the Outer Continental Shelf. President Obama blocked that.

I think there is bipartisan consensus more generally for embracing the resources that we have. And particularly given the economic challenges that we face right now, viewing energy policy through that lens and using it as a tool that has the potential of creating millions of jobs if we actually take advantage of the resources that we have, would be a much larger focus for him than pursuing policies that would in many respects have the potential to destroy a significant number of jobs.

Jason Pontin: Mr. Aldy?

Joseph Aldy: So I think it's important, when one looks at how to engage Congress on climate change, you know, I talked about how the president worked hard in 2009, successfully moving a bill through the House, could not find any Republicans willing to work on a bill in the Senate in 2010. And so what the president has decided to do is say two things. One, maybe there's another way to skin the cat, as he said in 2010. He said, let's look at a Clean Energy Standard. The objective here is to push out these new technologies, create incentives to do so, harness market forces so that the business sector has the freedom and flexibility to figure out what are the least cost ways for them to actually do that, and do so in a way that can actually really create on the demand side the incentives to really transform the energy system.

If we could actually move that forward, we can actually resolve this debate about tax credits. We have tax credits now, and we're pushing for tax credits now, because we don't actually have the long-term policies that can actually help create the right kind of demand incentives in the private economy.

Absent that, the president has authority under the Clean Air Act that he has pursued. He's put forward a proposal on new power plants. It's actually quite a reasonable standard. As he noted, and as EPA has noted, given the current forecast with natural gas, it's actually not going to be binding on the sector, but it's the first step.

And if we can't actually get agreement on something that is more effective long term, market-oriented, with Congress, the president will continue to use that authority under the Clean Air Act to try to actually reduce our emissions.

Jason Pontin: So that brings the question and answer portion of the debates to a close. We will now hear the closing statements from both representatives of the candidates. They are limited to three minutes each, please.

Oren Cass: All right. Well, thank you again to everyone for being here, and thank you to Joe. I think it's been a very interesting discussion, and frankly, it's helped me understand a little bit more about who it is I'm interacting with behind that curtain on a daily basis as we do battle on energy policy.

I think it's interesting to look at where we've seen there are significant differences and where we've seen there aren't such big differences. You know, President Obama apparently also supports increased production of oil and natural gas, notwithstanding a record in his first term that beyond clear metrics like declines on federal land, and I take Joe's point that they may be up over 2008, but I would also make the point that policy in this area takes time to go into effect, and seeing a decline that sharp in the context of such large increases elsewhere suggests maybe the administration's priorities are misaligned with the goal of increased production.

Onshore, Governor Romney has proposed allowing states to take an increased role in regulating. Joe says that oil and gas companies would not support that policy. My experience, having spoken with many of them, and having had them positively comment, both of their largest industry organization, on our proposal, makes me think that they would in fact support it.

Offshore, Governor Romney has proposed aggressively expanding leasing. President Obama has offered the least aggressive leasing plan I believe since the current leasing process began.

With respect to climate change, at this point, I'm not sure what our actual policy difference is. Certainly we have a different approach to speaking in aspirational terms about the issue, but we seem to both be focused far more on technological innovation than the sort of pricing of carbon that the president has proposed and supported in the past.

With respect to Keystone, I'm not sure if we have an agreement or not. Governor Romney has said he will definitely approve it. President Obama is just going to wait until after the election, even though the issue has been studied since 2008, and even though the State Department signed off on it in a environmental study that was either 8 or 11 volumes long, I'm not sure which.

Joseph Aldy: You didn't read them?

Oren Cass: I did not read them all. I didn't even get them all.

And so I think ultimately the biggest source of difference, both directly and as it spills into so many of these other areas, is the question of what is the right way to promote innovation. And this is certainly an appropriate place to have had that discussion. Governor Romney supports promoting innovation in the energy sector the way that we've historically promoted innovation throughout our economy in this country, which is government support in the every early stages of research and a reliance on the private sector to commercialize technologies, to bring down their costs, and to ultimately succeed in the market.

President Obama has supported an approach of massive subsidies for chosen industries and massive handouts to specific companies, which in our judgment has not been a success, and which Governor Romney would look to put an end to. And ultimately, we think that Governor Romney's approach is the one that is going to produce the jobs and the economic growth that should really be our top priority at this point.

Jason Pontin: Mr. Cass, thank you. Your closing remarks, Professor Aldy?

Joseph Aldy: Thank you. Oren, thank you. I enjoyed this. We commented beforehand that perhaps there'd be more disagreement here than in a comparable debate four years ago, and I think the audience got their money's worth there.

You know, when I think about this, I actually look in the front row and I see my parents. I think about being a little kid sitting in the back of the station wagon with my brother, not very happy at how long we're waiting to fill up our car, because I'm an old man. This was the mid-1970s, and energy independence was incredibly important.

You know, President Nixon said, we're actually going to push for energy independence by the year 1980. We actually went backwards. Things got worse when one thinks about our energy independence over that period of time.

I think about my five-month-old at home, and I think about the kind of world that I hope he inherits, a world shared with your daughter, since we're both dealing with little ones. And I think, you know, from my perspective, and when I think about what the American public want, it's to look for the kind of balanced approach that the president is pursuing. It's the kind of approach that says, we're going to use every tool we have available. Let's not just sort of focus on fossil fuels. Let's say we can do a lot in the renewables, whether it's for biofuels, it's wind, it's solar.

We need to be creative about how we do this. We need to take advantage of the opportunities through energy efficiency. That's why the president has laid out ambitious goals. And when you look at these goals, evaluate them on the performance to date. Right?

The president says, we're going to cut our net imports in half by the year 2020, which actually, when you drill down in the numbers, quite comparable to what you're going to see when one says, we're energy independent in North America from the Romney campaign, given what they expect the increases will be from Canada and Mexico.

You know, the reason why the president can set that goal, and why it's more aggressive than what he did four years ago, is because of the incredible improvement we've seen both in U.S. production on public and private lands relative to 2008, at levels we haven't seen in nearly 2 decades, the fact that our demand is down as we're advancing energy efficiency, and so that people actually need to spend less to actually heat their homes and fill up their cars. And so if something bad does happen somewhere in the world and the price of oil goes up, it has less of an impact on that family now because they actually have to use less energy for the services they get from their car or from the heater in their home.

I think it's important, too, that the president thinks that this is an incredible opportunity across the board to create jobs. You know, he set a goal that we should actually increase jobs for natural gas on the order of 600,000 because of the great opportunities to actually grow this, this energy source. But there's great opportunities, especially in manufacturing, especially in places like Ohio and Wisconsin and Pennsylvania, when we think about the production of the components that go into our wind farms and our solar facilities.

So we actually ought to look all across the board, take a balanced approach, not a narrow approach that only focuses on fossil fuels, and that will actually be able to deliver a better planet, it'll deliver better jobs, more jobs, and it'll make us more robust and more resilient to any kind of shocks to our energy economy in the future.

Jason Pontin: Gentlemen, thank you very much. May we please give a warm round to Professor Aldy and Mr. Cass?

[Applause]

[Background voices]

Jason Pontin: It is not easy being a surrogate, and they both did outstanding work on behalf of their candidates. I would also like you to give a warm hand to Steve Hargreaves, Bill Loveless, Monica Trauzzi, students Ryan Cook, Eric Lau, Lindsay Amico, and the MIT Knight Fellow Elana Schor for their insightful questions. Thank you very much.

[Applause]

Ernest Moniz: And on behalf of MIT, I would like to repeat Jason's thanks to our questioners, both from the media and from academia. I would also like to say that we found this debate to be one of terrific substance, and we hope that all of you who we thank for coming to learn more about our shared energy future will take from this debate some information that will perhaps help you shape your vote on November the 6th. And whatever you do, do vote, and let's thank everyone again.

[Applause]

[End of Audio]

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