ENERGY POLICY:

DOE's Karsner says business, government partnerships can solve efficiency issues

With several congressional panels scrutinizing the Bush administration's policy on climate change, the White House continues to pursue new technologies in energy efficiency and conservation. During today's E&ETV Event Coverage, Assistant Energy Secretary for Energy Efficiency and Renewable Energy Alexander Karsner talks about the need to improve corporate average fuel economy standards but also shift the focus to newer methods of increasing efficiency and reducing oil consumption. He also discusses the importance of linking businesses and government in order to effectively promote energy efficient technologies.

Transcript

Alexander Karsner: I'm just thrilled to be here. As Bill said, and Giovanni, who runs our small business committee here at the chamber, this is more of a homecoming to me than anything else.

And so, regrettably, when I'm handed sort of these folders with prepared text to talk to any given group on any given day, and I find out this is a group that I had intimate familiarity with, I like to get off of the text and maximize the opportunity of being together with you.

And, for me, maximizing the opportunity of being together is to do as much listening as it is talking. And so I'm going to try to go through these remarks, hopefully somewhat in a rough way and somewhat extemporaneous, and I hope that you'll forgive me and indulge me in that so I can get to what's more important for me, the takeaway.

And we can have a little bit more of a conversation about this very important effort that you have begun here with the chamber. I say it's important because if it is what I have read that it is intended to be, and if the dialogue that you've begun this morning manifests, it can be and it should be an important resource to all of us in the Department of Energy and across government to manifest the mission that is really more than the president's call to arms, call to break our addiction with oil.

But it's also a national mission that cuts across all regions of this nation, cuts across all parties, and cuts across all communities; business and industry and government and labor.

And so it is really a great fortune for me to have the opportunity to be in a position to help implement the President's vision and the call to this national mission, which in many ways is overdue because we all know that the consequences of inaction, in this case, far outweigh any action that we can press forward with aggressively.

And I've been known in the past to say relentlessly. And so, as a businessman coming from that background and measuring the metrics that I am comfortable with and used to and have been in my training, I've come to understand that not all of these things are part of government's culture as government has evolved through its own legacy systems over the last half-century.

Things like time/value of money, things like productivity, things like rate of return on investment are often alien concepts in the federal government, and probably in government at large.

One thing I was just talking to Bill about, one takeaway I hope you all will consider as you progress in your meetings, is ways to tool us up with a greater interchange of culture that can help us, that can find the appropriate nexus between public and private sectors to move the needle and move this mission more aggressively forward.

I told Bill one thought is that we need a greater exchange of DNA. And so one thing that you all might noodle in future sessions that I would ask, is how do we go about that?

I lived abroad for years in Asia and for years in Europe, where I found that these governments were very good at these things, of seconding people from industry to serve in government for limited terms, and to rotate them out with fresh blood and fresh ideas so that there were natural and regular infusions of innovative, state-of-the-art, latest thinking.

And as importantly, there were up to date, verifiable, market-based metrics that undergirded the common mission between the private sector and the government. And these are some of the challenges that we grapple with today in the Department of Energy, and I suspect elsewhere in the federal government.

But these challenges have to be addressed head-on in order for us to move forward at the rate that we need to move forward so that we can manifest the positive results of more than 25 years of investment in the portfolio of new energy and emerging technologies that have been coming out of the national laboratories.

Now traditional thinking, thinking that still affects the way people look at this problem, is to say that there is somewhere holed up in the mountains a secretive government lab, that there are guys with white coats in, that if only they're given enough time and enough money, one day they'll emerge from that laboratory and they'll go, La Voila! The car of the future!

And the whole thing will be solved. We'll be done. It'll look just like Fat Man and Little Boy, and it'll be over, you know? The Manhattan Project realized again. There's others that say this is an Apollo Project.

You know they want to think that there is a single point end-use customer, off taker, in the federal government. That if his budget were appropriate he could buy this off the shelf, put it in the appropriate place, and all the other geopolitical moving parts would follow.

Maybe I'm being facetious, maybe that's a simplification. I actually laud those, of all parties, who want to contribute to problem solving. I guess my point is that we are well past the point of problem identification.

And the problem solving requires American business and American entrepreneurs and American industry to weigh in as never before with the problem-solving tools that you know best, that I think are underemployed in this challenge, and that I hope that your efforts here at the chamber are galvanizing to be that support mechanism that government needs for the appropriate nexus.

What do I mean when I talk about what that nexus looks like? To me, I like to think of it as a three-legged stool; that there is an essential role for private capital and markets, as one leg of that stool; that there is an essential role for public policy that has to be predictable and durable and long-term; and that there is an essential role for the final leg to be emerging technology itself.

And that with any one of these legs missing that stool can't stand. And my fear is that we have been over-dependent and over-reliant on the idea that a singular leg, the technology R&D leg, is the only one necessary.

And that as soon as these inventions break, at a scientific and engineering level, that their implementation or their technology transfer or their penetration in the market, are indeed taken for granted.

And so that is my concern. Generally, I like to think that technology, in its own right, likes to find its way forward for the sake of humanity. And that the role of government is actually to push that curve higher and to bring back that schedule in time so that it happens earlier, more rapidly, and at a greater rate of penetration.

And so that three-legged stool needs those other legs bolstered and stronger. There's no question that this President, historically, will be regarded as the man who invested the most dollars and capital into climate change science, into new research and development and deployment for energy technologies to make a difference. I am confident, by the end of this administration, people will look back and they will say, look at what the growth rates were for these new technologies. Look at that period of transformation in time, in market penetration.

When people stop saying this is the future and started saying this is contemporaneous. This is the now. One of the things that we do is to support the implementation, the commercialization, and the deployment of these technologies.

And we do that actively through partners, through NGOs, through state governments. It gives me great pleasure today to announce that we just recently released 6 million new dollars in partnerships to states to pursue more efficient buildings through techniques and technology. Because we know that using these partners for deployment and commercialization is one of the more effective ways that we can affect and throttle the national energy balance through efficiency practices.

And deploying those technologies, like solid-state lighting, that have been invested in by the taxpayers for more than a quarter of a century, but have yet to substantially begin to be harvested in a way that they can find their way to market and into our homes at the rate that we'd all like to see.

There has been a linear pipeline of technology, emerging technology, in the government's view through our national laboratories, at points of origination, over the last half-century.

And many of it started with those guys in the white coats in the Sangre de Cristo Mountains, on the mathematicians boards, and bringing our best minds and holing them up and saying get started here because there's a war on. There's a national urgent need.

And they responded, and I don't think any of them responded by party. Many of them didn't even respond by nationality.

They responded, they held themselves up and they started with a blank sheet of paper and, start to finish, they gave us the advantages that we needed to be triumphant. Today's situation is not entirely non-analogous. We are a nation at war and we have urgent needs. The surface of our Earth is warming.

Our economic upside and benefit, the excellence of a business strategy that seeks to employ these new emerging technologies at a rapid rate that fulfills a national need, both on the individual level and in the aggregate, is what is called for, for everybody to put their talents on the table, not unlike those folks that were called to do that 50 years ago.

Somehow we got stuck in the trenches of thinking it would always be this bunch of scientists. That at the point of origination we would take that pipeline and we would just keep cramming dollars into that singular pipeline until a product came out the end and was handed through the magical mystery window of markets and found its own way.

And yet the new and emerging technologies, whether they're in power generation or vehicular technologies or efficiency in lighting and appliances, the new technologies, many of them, have their own intrinsic characteristics that beg out new economic paradigms to account for their value, in ways that government can't contemplate.

In ways that science and engineers, who were at the front end of invention and innovation, don't have the skill sets to measure what the long-term value chain looks like. That immediately beckons the people in this room to step up and augment that, to fortify that third leg of the stool in a way that the nation needs at this critical time.

So that we don't have to be warned again that we should be following the price signals and exclusively reactive to what the global situation is, when in fact we have the capacity, we have the will, we have the entrepreneurship and the talent to invent and commercialize and deploy and chip away at our own problems in a way that we can leave our children better to inherit the American dream that you and I have all realized that's brought us here today.

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