Washington, DC -- Secretary Steven Chu testified today before the Senate Subcommittee on Energy and Water Development on current energy policies and future energy goals.
His opening statement is below:
Chairman Dorgan, Ranking Member Bennett, and Members of the Committee, thank you for the opportunity to appear before you to discuss our nation's energy policy.
We are driven to change our energy habits by several serious challenges. America is highly dependent on oil. Our climate is changing as a result of our carbon emissions. In order to mitigate the considerable risks of climate change, the world must transition to a sustainable energy future, which will require nothing short of a new industrial revolution. America's future jobs and prosperity may well depend on whether we lead or follow in this transformation.
The leaders in China now recognize that if the world continues on its current path, climate change will be devastating to China and to the rest of the world. They acknowledge that China's growth in carbon emissions is environmentally unsustainable and are working hard to lessen their emissions growth. They also see the economic opportunity that clean energy represents. China is investing $44 billion by 2012 and $88 billion by 2020 in Ultra High Voltage transmission lines. These lines will allow China to transmit power from huge wind and solar farms far from its cities. While every country's transmission needs are different, this is a clear sign of China's commitment to developing renewable energy. They also currently have 20 nuclear power plants under construction and more construction starts are expected soon. China largely missed out on the IT revolution, but it is playing to win in the clean energy race. For the sake of our economy, our security, and our environment, America must develop decisive policies that will allow us not only to compete in this clean energy race, but to become the leader in providing clean energy technology to the world.
The American Recovery and Reinvestment Act made a down payment on our clean energy future, while creating jobs and putting Americans back to work. For example, we are on track to double our renewable energy generation capacity by 2012.
But for the longer term, we will need a comprehensive energy and climate policy. Before becoming Energy Secretary, I was a member, along with three Assistant Secretaries now serving in the Department of Energy, of the National Academies committee that issued a comprehensive and authoritative report, America's Energy Future. That report stated: "The United States has never implemented a truly comprehensive set of national policies for obtaining and using energy to meet national goals for sustainability, economic prosperity, security, and environmental quality."
America's competitiveness is inseparable from our energy policy. With the right policies and a sustained national commitment, we can mobilize America to lead the world in the transition to a sustainable energy future and guarantee prosperity for ourselves, our children and our grandchildren. What will be required is non-partisan leadership and collaboration between Congress and the Administration.
In addition to the America's Energy Future report, several studies have examined the feasibility of achieving President Obama's 2020 and 2050 greenhouse gas reduction targets, including analyses by the Environmental Protection Agency (EPA) and the Energy Information Administration (EIA) of comprehensive energy and climate legislation. These studies concluded that aggressive deployment and evolutionary advances in technology will help us achieve our goals at an affordable cost. With a robust R&D effort and the right policy signals, I believe we will be able to achieve our goals even more economically.
As we have seen many times in history - for example with catalytic converters, the Acid Rain Program, the phase-out of chlorofluorocarbons, and appliance efficiencies - once a problem is taken away from the lobbyists and given to the scientists, engineers, and American businesses it can often be solved much more quickly and cheaply than anticipated. For example, while compliance costs for EPA's acid rain program were originally estimated in 1990 to be $750 per ton of sulfur emitted, by 1996 the cost was $70 per ton of sulfur.
Let me be clear, however, that our success is not inevitable. We need a policy framework that emphasizes two priorities: policies that will accelerate innovation and policies that will drive private sector investment in clean energy. We must harness America's entrepreneurial spirit and leverage private sector imagination and ingenuity to transform the way we produce and use energy. Part of those policies must promote the research and development of key technologies needed in the coming decades without crowding out private investment. As stated in America's Energy Future: "Actions taken between now and 2020 to develop and demonstrate the viability of several key technologies will, to a large extent, determine the nation's energy options for many decades to come."
Here are a few of the steps we need to take:
All of these efforts will be vital to our energy future, but even these steps will not be enough in the end. To truly drive the changes we need - and create the jobs of the future - we need a policy that matches the scale of this problem and that will guide investments over a generation: we need to put a long-term cap on carbon that ratchets down over time. Only a cap on carbon will give industry the direction and certainty it needs.
For example, suppose you operate a utility company and have an old coal plant that is near the end of its life. A new coal plant will cost billions of dollars. If you knew there would be a cost to emitting carbon, you would have to think hard about whether the next plant should run on coal that captures the carbon emissions, or gas, or nuclear power or wind or solar energy. Eventually, there will be a cost, but if you didn't know when, you would try to limp along with the old coal plant until you knew what the costs would be and how they would be structured.
Providing certainty will drive investment and job creation today as well as the changes we need in our energy mix over the long term.
Finally, I want to mention that, as we continue our examination of energy and climate policy options, independent and impartial data and analysis, particularly from the Energy Information Administration, will become increasingly important. EIA provides vital information about where we are and where we are going, and, if we are to make sound, data-driven decisions, we must make sure EIA has the tools it needs to do this work.
Thank you again for the opportunity to testify and for holding this hearing. America still has the opportunity to lead the world in the new industrial revolution that we need but only if we make wise choices today.