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Well, thank you, John. I was actually planning to make a long presentation, but I will, in
real time, convert it to a short presentation. (Laughter.) And it really is a pleasure to
be here at CSIS. I also -- as John said, it's no joke, asking the driver coming over, why
aren't we stopping here at K Street? But it's really a pleasure now to be here in your inaugural
-- I guess, officially at least, inaugural week to make some remarks.
The -- it's actually an exciting time to be back at DOE. The -- you know, the president,
in June, had these two policy speeches, the first in Berlin, where he revisited the Prague
nuclear security agenda and then, of course, at Georgetown with the climate action plan
discussion, and as you -- this audience knows, both of those are important elements -- very
important elements of the DOE's agenda. So it's kind of -- getting kind of exciting,
and I might say, it also aligns, of course, as we also know, with the CSIS agenda, and
that's why I think this is a really great place to come and make a set of remarks, you
know, somewhat stimulated by the anniversary of the -- you know, the 40th anniversary of
the Arab oil embargo, which clearly led to so many profound changes in how we view the
energy world, how we address energy problems, and of course, within a few years, to the
Department of Energy being born to help address those problems.
So today, I think in my now short presentation, I'll make a few remarks about some of the
obvious changes since 1973, but then I want to move on to talk about at least how we are
thinking about, what are today's energy-related security challenges? What are some of the
policy directions we pursue for those? And in particular, I'll say a little bit, at least,
about some of the technology pathways to follow those policy directions and what we are doing
and plan to do at the Department of Energy. So in 1973 -- I think there are, regrettably,
too many of us in this room who remember 1973, and a few who are fortunately younger than
that. But clearly geopolitically obviously no EU -- there was a Soviet Union, no European
Union. Iran was a close ally, we might remember.
In 1973 we had maybe cooling but not terribly chilly relations with Venezuela, et cetera.
I mean, really a huge difference when we think back to that -- to that time. President Nixon
had just come back from China, another watershed event -- visiting China -- with a GDP of just
about a hundred billion dollars at that time.
Here at home, American households spent almost 20 percent more of their income on energy
at that time than we do today. Energy, it's a real changing dynamic. Obviously in the
technology world, renewables were -- other than hydro -- largely, essentially nonexistent.
And globalization was not really, I think, a word in the -- in the dictionary at that
time.
So the -- obviously we all understand that there were all of these differences. There
were responses, like the Department of Energy, like a petroleum reserve, CAFE standards in
'75 -- the first round, so quite a few actions taken. But today the world, and really the
conditions and the way I think we, at least, should be thinking about energy security issues
are really quite different. And that's really what I want to -- what I want to focus.
Actually, another -- just one other comment I'll make is -- or maybe two, in terms of
this change -- it's also the case that -- and partly in result to, frankly, one might argue,
an overplayed hand at that time in terms of the embargos, a great diversification of supply
in oil, starting with the North Sea and Alaska but then, you know, Mexico, Brazil, Canada,
Africa, the U.S. Gulf of Mexico as a new -- really a new place to produce.
Also at that time kind of energy security world, we were running out of natural gas,
had essentially a ban on generation. That then led to the 1980s, huge focus on coal,
on building up coal. So we kind of forget that this coal build-up was really very, very
coupled to these security concerns, something that we're struggling with, but something
frankly we have to keep in our contexts now as we engage in the international debate on
climate change. A lot of other countries are also focusing on coal, with, perhaps, not
dissimilar conditions that we had then.
So let's kind of move up to the -- to where we are today. And obviously the rise in domestic
oil and gas production is a well-known part of that story. I think it's not maybe focused
on enough that just last year, I think, we had the greatest increase in oil production
in our history -- a million barrels a day increase. And that, driven to a very, very
large extent, but the Bakken and Eagle Ford plays.
So again, very, very, very, very different situations, today we have, again, much diversified
energy supply -- besides oil, gas, nuclear, wind, solar, other renewables, biofuels -- 10
percent of the supply -- and now the issue is blend wall challenges as opposed to -- as
opposed to building up this alternative -- clearly, huge increase on the demand -- huge advance
on the demand side. Vehicles -- 11 miles per gallon 1973, 25 now -- 24.9, on the way to
50-plus in 2025. Two percent per year energy intensity decline, which means improvement,
et cetera, et cetera.
So again, that's a lot of the -- a lot of the background for the change. Let me now
move into, again, what I would put forward as four energy security -- energy-related
security challenges for the -- for the path ahead and maybe I can figure out how this
works. (Audio interference.) I mean, the geopolitics of natural resources and supply demand balance,
you know, does remain an important security concern.
I think one of the -- one of the -- certainly it would be a misconception to think that
because of our increased domestic production here, that somehow we have become free of
this question of the -- of the global -- the global oil market and the global oil price
and the global oil price volatility, which can be there. In fact, one can argue whether
today's prices are -- are high -- are structural or not, but we are certainly in a situation
where there are substantial, let's call it, unplanned outages in terms of -- in terms
of current oil supply, maybe a little bit tight on the -- on the reserve production
capacity. And as we know, again, we are not -- we are not independent of that -- of that
global price.
So we still -- so we still need to address the -- this issue of the global oil markets,
and clearly we have a number of policy options and technology directions to address this.
Number one -- well, already mentioned; I won't spend a lot of time on it -- is the -- is
the issue of increasing domestic production, and that's something that, again, we all know
is going on quite strongly right now.
But I want to emphasize is that a key political and policy objective has to be continuing
reduction in our oil dependence. So even as we produce more oil we still need to be focused
on reducing our oil dependence. That has three principal thrusts:
Efficient vehicles -- and we've already mentioned the 2025 CAFE standard goal. And again, we
are already seeing today the impacts of this move in that -- in that direction with increased
-- increased efficiency.
Secondly, alternative fuels, and there we continue to push on the technology pathway
towards the next-generation biofuels. As an example, we believe that our Energy Efficiency
and Renewable Energy Office projects, from basic research actually in our Office of Science
to support for pilot and beyond pilot-scale biorefineries, we believe the technology in
place today is on a path -- with scale up, et cetera -- to below $2, and maybe $2.15
per gallon -- per gallon of cellulosic ethanol perhaps towards the end of this decade.
Now, that's $2.15 not gallon of gasoline equivalent. So with the energy density, you know, we still
have a ways to go. But we're kind of -- we're getting into the ballpark, is the point, of
being able to provide biofuels at a reasonably competitive cost.
Clearly there's a lot of discussion about natural gas vehicles, and I think one of the
important sets of announcements recently is the fact that we will be seeing production
and sales of bi-fuel gasoline and natural gas vehicles. As a reminder, we have not had
that in the United States, largely because of an unintended consequence of policy. That's
changing. That's what the world does in terms of natural gas, principally bi-fuel vehicles,
and this could open up that pathway substantially.
Finally, I'd just comment that -- so, again, efficiency, alternative fuels, classification
of vehicles remains something that we are strongly committed to, and, frankly, pretty
bullish about. Here is a picture, if you can read it. Those blue bars are reduction in
vehicle battery costs. Let's call it, say, $500 per kilowatt hour of storage today, about
a factor of 2 reduction in a relatively short time. The green curve on the right is the
deployment. I would just note that this rate of increase is substantially higher than the
analogous curve we would have shown over a decade ago for hybrid vehicles. First half
of this year, 50,000. So this year, that total deployed number of 2012 of 75,000 or so, that's
probably going to go up by at least a hundred thousand in this year and continuing to increase.
Now, that cost obviously is still way too high for pure electric vehicles to have large
market penetration, but with another reduction of about a factor of two, certainly for plug-in
hybrids, this will be very, very interesting. But of course, today we also have examples
of business models like the Tesla. The Tesla clearly is not at that scale yet in terms
of -- terms of deployment. But the Tesla is actually an example of something that more
closely resembles the classic disruptive technology theory. The business model is not competing
in the -- what you might call the commodity market but having a business model in which
the appeal is for extremely high-performance vehicles.
In fact, the Tesla, as I think many of you know, was named, consumer reports and others,
as essentially the best or one of the very best cars it ever tested, not electric vehicles,
but cars as a tremendous high-performance vehicle. And they did have a DOE loan of about
a half a billion dollars. It's paid back early. Premium to the taxpayer. Next year they will
start an export strategy with the Tesla.
So again, we think that these technologies are not as far out as people think in terms
of becoming material. I will return to this point with some other slides of this nature
with the theme that businesses are paying attention, and when they're paying attention,
you should figure interesting is happening.
So OK, so number one is, again, on this resource issue. And I will just add that we focused
here on oil and the continuing need to reduce oil dependence now that we are 40 years past
that embargo. But I will also add a second issue in terms of resource concentration and
supply and demand. Is that of energy-critical materials? Rare earths are those that have
been most often discussed, and we know a couple years ago, there was a real issue with China's
-- China controlling the supply and creating a little excitement in the -- in the market.
There are other energy-critical materials. Just this week I think Energy Daily, for example,
had a story on lithium-7, an isotope that turns out to be used in nuclear reactors.
But this is a -- so this is an -- this is kind of new on the screen.
We have again responded as a department. We have established what's called an innovation
hub, roughly $25 million a year at our Ames laboratory in Iowa. And it will -- it is researching
not the issue of so much of producing these energy-critical materials but more focusing
on, what are technologies for effective recycling and reuse of these materials, and very importantly,
what are substitutions? Where can we can find earth-abundant materials to functionally replace
these earth -- these energy-critical materials in energy technologies, like -- such as renewables,
wind turbines, et cetera?
So that's really the first of these challenges, that associated with natural resource distribution.
A second challenge that we would put into this category is in fact climate change and
associated natural disasters and humanitarian crises that can result from climate stresses.
The -- I will be relatively brief again in trying to leave enough time for questions,
but I just say that I think very -- in fact, my first day on the job, I believe, at DOE,
I was quoted as saying that I'm not here to debate what's not debatable, in particular,
and what I consider not debatable is the need to respond prudently to the risks of climate
change. That does not answer the debate about what you do about it, how much you do, how
fast you do it, et cetera.
Now, for the United States, of course, President Obama put forward, as I mentioned earlier,
in June the Climate Action Plan. Climate Action Plan, for those of you who have -- who have
not looked at it in detail -- (inaudible) -- that, so fundamentally start cutting down
on greenhouse gas emissions. And, of course, in the United States, we are in fact at our
lowest level of emissions in about two decades. The -- almost two decades.
The -- but the plan, given the realities that we are not likely to see anything like comprehensive
legislation, at least in the near term, the plan is based upon existing authorities and
executive action across the administration. Department of Energy clearly has a lot there.
But I'm going to say before moving on from that point that in my opinion -- and this
is a personal opinion -- going back to this not debating what's not debatable -- I believe
frankly we have turned the corner on that issue. Is it -- is it uniform, a hundred percent
consensus? Of course not. But I believe that we are, including in our Congress, really
past the issue of whether we need to respond, and then we are now -- and then we will be
focusing on the challenge of what is it that we -- that we can and will do ultimately in
legislation, even as we carry out President Obama's very aggressive Climate Action Plan
in these next -- in these next several years.
So in the -- in the -- in the mitigation, clearly efficiency is a major focus. And I
will say here for the Department of Energy, in addition to advancing technology, we have
with OMB and OIRA -- we came together -- unfortunately, with a little bit of an interruption -- in
what was called lapsed appropriations, but much more aggressively moving out our efficiency
standards, our rulemaking on a whole set of technologies. And we intend to -- as we -- in
particular as OMB gets its -- you know, it's now, of course, fully staffed up, but getting
back into the -- into their activities, that we will intend to pick up that pace once again
of pursuing a whole set of efficiency standards -- we have said publicly on our next notice
of proposed rulemaking we are targeting for next month on a very important issue of electric
motors. A second issue clearly is decarbonizing power
generation. And let me again show a few of those slides. Actually, first, on efficiency,
this is the story on LEDs. I think it is. I can't see that far but -- (laughs) -- the
-- same general story as before. The blue bar's cost's falling really fast. In fact,
when we did this like a month ago on our website, the 60-watt incandescent replacement LED was
pegged at about $15. Last week, Walmart announced they're selling LEDs from nine something to
11 something. And when you figure that the lifecycle -- which is 25,000 hours projected
-- the lifecycle energy cost savings is somewhere in the $125, $135 range for U.S. retail prices,
this is a tremendous lifecycle bargain, and the initial capital cost barrier is really
coming down dramatically. Again, not surprisingly, deployment shooting up very, very dramatically.
If we turn to renewables, this is the story on onshore wind. There was that little -- that
rise associated with market conditions, but fundamentally, once again, very, very rapid
drop. And the increase is such that last year, the largest capacity addition in the United
States was, in fact, wind. And finally, photovoltaics -- once again,
same story. Dramatic cost reduction, the -- now this -- one can argue over this 75 cents per-watt
cost, whether that's a true market cost, given overcapacity in the market and Chinese production,
but doesn't change the story. This is dramatic cost reduction, again, dramatic deployment
increases.
And earlier, as I said, one indication -- without taking sides in the argument, but one indication
that this is, quote, "revolution now" is -- many of you have probably followed -- in California,
in Arizona, in Colorado, in many states there is now a real tension between utility business
models with current rate structures, solar, rooftop solar systems, and net metering, because
as we decrease demand -- I mean, electricity demand is basically flat, and now we have
generators on rooftops, net metering coming in, a tariff structure that as we all know
does not reflect the physical realities of delivering electricity to homes. These things
are coming into a clash and really challenging business models. That, to me, is a pretty
good definition of these are technologies whose time is really -- is really here and
now.
So that's -- again, so that's some of what we are doing with regard to the mitigation.
But the second -- the second pillar of the president's plan was adaptation or climate
preparedness. And so this is, on the one hand, an acknowledgement that we do -- we are seeing
the consequences already of global warming. We need to be prepared to respond even more
-- even more strongly. And certainly if one goes back to the Copenhagen Accord -- which
many of you would like to forget about, but the Copenhagen Accord of 2009 -- it was there
already that the issue of adaptation and linkage to the international -- to international scene
and especially the less-developed countries was put into place. And in fact the third
pillar of the president's plan is precisely that of international leadership, international
cooperation, and these things come together quite strongly.
I will return to this -- to this briefly in terms of resilient energy infrastructure in
a few minutes, because I'm trying to end -- (chuckles) -- soon.
Third challenge: nuclear. The -- in principle the global expansion of nuclear power has,
as we know, especially in this building, in CSIS, we know, has potential implications
for nonproliferation.
As I mentioned, the president has made nuclear security a major -- a -- as well as climate,
a major focus. I'll just note five elements of the 2010 Nuclear Posture Review as key
objectives: preventing nuclear proliferation, nuclear terrorism; secondly, reducing the
role of U.S. nuclear weapons in U.S. national security strategy; third, maintaining deterrence
and stability at reduced nuclear force levels; four, strengthening regional deterrence and
reassuring U.S. allies and partners; and fifth, sustaining a safe, secure and effective nuclear
arsenal.
Now that's a much broader agenda in security than we are here to discuss today, but there
is a linkage in the all things nuclear world to nuclear power, nuclear fuel cycles and
nuclear materials, and there the president has also said -- and I'll quote -- "When we
enhance nuclear security, we're in a stronger position to harness safe, clean nuclear energy,
and when we develop new safer approaches to nuclear energy, we reduce the risk of nuclear
terrorism and proliferation."
So this linked agenda is another one that we are very, very focused on, and I'll just
mention two points.
One is, nuclear waste disposal remains a challenge and is important in this context. For example,
our inability to manage nuclear waste right now precludes certain policy options, such
as so-called fuel leasing with other countries, which could be a very, very strong position.
So nuclear waste disposal is really critical in the context that we are talking about today,
energy and security.
The administration's position is that we believe that we will really make progress only when
we have a real consent-based approach, as recommended by the Blue Ribbon Commission
on America's Nuclear Future, which I had the pleasure of serving on under Brent Scowcroft
and Lee Hamilton's chairmanship a few years ago. So we are advancing that agenda. Key
elements are, again, consent-based and a parallel track of consolidated storage of nuclear fuel
even as we pursue geological repositories. And one thing, I think, of interest in this
context is the blue-ribbon commission recommended, and we are in the middle of -- (audio break) -- commercial spent fuel.
And this can have, we believe, potentially important implications on both sides of that
discussion, both commercial and defense waste. And then, of course, we are also pursuing
-- pursuing nuclear technologies, and in the interest of time, I'll just say for example
we think small modular reactors are an interesting possibility. We have made one award for moving
a technology to licensing, and we are -- again, there was a lapse in appropriations, called
the shutdown, but we will relatively soon be anticipating making awards from our second
solicitation for small modular reactors. And finally, in terms of the fourth challenge,
which we think needs to be looked at much more today, is that of energy infrastructure
and the vulnerability of energy infrastructure. That vulnerability has many facets. We've
already talked about one, and that is the vulnerability to extreme weather, which can
be climate-associated. Hurricane Sandy is the -- is the most recent major lesson we
received on that. Secondly, cyber. And I'll just say here that
for example we have created a new cybercouncil at the department that spans across four different
offices as we believe this is an area of increasing focus. You all know that our energy infrastructures
are coming under increasing and more sophisticated cyberattacks. We have to stay ahead of that
and working with industry. Third is the risk of physical attacks on our
isolated and often unprotected energy infrastructure. There is, regrettably, an uptick in that,
as well. And fourth, there is the question of the interdependencies of our different
infrastructures. Once again, Hurricane Sandy brought that out in spades, particularly -- particularly
with the interdependency of the electricity and the transportation fuels delivery infrastructures
creating, frankly, quite a mess for several weeks.
So in this regard at the department we are -- I would say we have two major thrusts.
Part of it is on the technical side, and the most prominent of which is looking at our
significant efforts and increasing efforts on 21st century grid development to make sure
resilience of that grid is as important a criterion in what we do as is the economic
benefit of that grid buildout. And we have projects -- I'll just mention
one, for example, in New Jersey, where our labs are designing a micro -- or mini-grid,
a 50(-megawatt) to 80-megawatt microgrid -- if that's micro in your lexicon -- that would
use distributed energy to protect a major transportation corridor even if something
Sandy-like happens again, while also providing new service opportunities for consumers in
that region. And the second direction that we are pursuing
is putting together an integrated resilient strategy that addresses those four drivers
I mentioned earlier and includes an emergency response capability.
Some of you know we have responsibilities under a presidential directive and working
under FEMA to respond to emergencies involving the energy infrastructure, ESF-12, or something
like that. And we are looking to do that. The only point I'll make here -- and again,
it's relevant in the CSIS context, is we have had historically at the Department of Energy
a major emergency response capability in the nuclear arena for nuclear materials, nuclear
devices, et cetera, drawing upon the technical capacity that we have in the department and
our laboratories.
Now the issue is to do a similar thing, we're at a much earlier stage, building up -- based
upon our technical capacity in the energy arena and energy infrastructure area -- building
up a similar response capability but addressing it in a more complex way because, in contrast
to nuclear devices and nuclear materials, this obviously -- the energy sector in principally
in the private sector, and that poses additional challenges in terms of how we can exercise
authorities with them, provide them waivers for acting together in an emergency.
So I will end basically there, again repeating that we think the -- I mean, the energy security
landscape is certainly no less interesting than it was in 1973. It is somewhat different.
The natural resource concentration issues are different, including energy critical materials.
Climate is a real threat multiplier, potentially, in -- particularly in unstable societies.
It's a security issue as well as a -- as well as an environmental issue.
The nuclear issues we need to work at home in terms of things like waste management as
well as working internationally. And -- but I won't go into this, but CSIS has done a
major study in terms of the way in which our U.S. role in international nuclear commerce
is critical for our nonproliferation aims. And fourth, we need to work in a coherent
way to increase resilience of our energy infrastructure.
So as I said, it's an exciting time to be at the Department of Energy. And thank you
for your attention.
I'm going to call inaudible. I think it would be better for you to stand at the podium and answer
because it's harder for people to see if you're sitting down. And besides, you know how to
do all that anyway.
No, no, no. I'm going to rely on you to call on people.
Do you want me to do that?
Yes.
Let me then ask the first question.
I don't want the responsibility. (Laughter.)
I will do that. OK, I'll ask the first question and then just indicate if you -- and I'll
try to keep track sequence.
All right, let me ask you about the blessing but the curse of cheap gas. I mean, we've
had this -- and I said that intentionally rather provocatively. We -- it is a wonderful
blessing for America to have this gas revolution. Fracking has fundamentally transformed the
energy landscape and it is so abundant that the price is very low.
Now, of course, that has a capacity of undermining nuclear energy in America with very long and
very high capital costs. It makes renewables far less cost effective, at least up front,
and it requires longer-term subsidies. No secretary of energy is going to advocate higher
prices, but I would like to ask you to help us think --
And I don't.
And you don't. (Laughter.) So let's make sure the record is clear.
Let that be noted.
Noted. But help us think through, what is the portfolio that we ought to have in 15
years? How do we want to think about that given the enormous impact that this fracking
revolution is having on today's energy economics?
So -- well, again, I think we all agree on the premise, that it's having an enormous
impact on the -- on the energy sector. The -- several points: One is, first of all if
I start kind of looking inward at the Department of Energy, a key objective of ours is to support
the research, development demonstration and deployment of technologies that draw upon
all of our energy sources as to make them -- with the objective -- you know, some of
the innovators hate this -- but the fundamental objective of lowering costs so that they will
be competitive in a -- in what I -- what we firmly believe will be a low-carbon -- a low-carbon
future.
The -- so fundamentally, it's -- you know, the basis is we've got to have marketplace
competition. Secondly, we should also remember, marketplace sounds like a universal word,
but the marketplaces in different places are very, very different, and that includes for
gas. So it's going to -- you know, it's not like we have a one-size-fits-all electricity
distribution mix in different parts of the country, certainly not in different parts
of the -- of the world.
Third, I think we have to examine the policy instruments that would help to maintain what
is, after all, a very important issue: diversity of sources. Now, that has -- that takes many,
many turns, but I mentioned one earlier in the context of the -- this issue arising with
PV and net metering, et cetera, that -- I don't have the answers certainly, but we all
recognize that, you know, we have tariff structures -- (audio interference) --
I think we need to address that, and I would say that we are still at the early stages
of a major effort called the Quadrennial Energy Review, which was spelled out in the president's
climate action plan, where we are pulling together -- we, DOE as kind of the executive
secretary, White House leadership -- to convene agencies across the government to get integrated
approaches especially focusing initially on energy infrastructure as an enabler for that
set of diverse fuel sources.
OK, friends, let's -- we can open it up for a few questions. We -- let's start right down
here and then we'll come back. We've got three lined up. Do we have a microphone please?
Hi, I'm Bob Hershey. I'm a consultant. What technology --
And an MIT graduate.
Yes I am. (Laughter.) What technologies appear promising for things like energy efficiency?
Well, I -- one of course we already mentioned, was the -- was the -- LEDs, I think, are just
going to have a tremendous deployment profile. And not only, I might add, they're, Bob, not
only in the United States, but globally, and globally meaning including in less-developed
countries. The reason there being that that's a good way of lowering the demand -- the supply
requirements. So I think there's a lot of interest in that also in our international
financing institutions. That certainly is one -- is one area.
On the -- so if I go to the vehicle side, the -- clearly, electric -- well, electric
vehicles are a form of efficiency per se. In fact, on our website, we have something
called e-gallon, which is not the capital cost but the operating cost of an EV is roughly
a dollar -- just over a dollar national average on a gallon of gasoline equivalent. And that's
essentially connected to the cost of electricity and to the -- and to the inherent efficiency
of the -- of the vehicles.
In the institutional commercial side, we still have an enormous way to go in terms of combined
heat and power. For example, in hybrid systems, we have a $8 billion loan guarantee program
that we will be issuing a final request for proposals, which will be focused on fossil
-- exclusively focused on fossil fuel technologies that lower emissions. Fossil fuel technology
that lower emissions not exclusively, but has a huge overlap with the -- with the efficiency
objectives. So that's some of what we're doing.
In the fifth row right back here. And we'll -- go ahead please.
I'm a Japanese and I'm from, you know, Tokyo Electric Power Company. I have a -- would
you please comment on exporting shale gas, because since after -- since Fukushima accident,
we have -- suffering from very expensive price of natural gas. So if you permit us --
You've always suffered from the high price of natural gas.
Yeah. But please touch on shale gas exporting. Thank you.
Well, OK. On the shale gas exports, obviously I can't discuss things that are under consideration
for licenses, but our approach is -- that was set, certainly before I was at DOE last
year in 2012. We work -- first of all, we work through the licenses in the order in
which they met certain submission dates. That order has been posted for a long time. We
will continue to go -- to go through that. The -- each of these dockets has got, you
know, like 200,000 things -- comments to go through. The -- we've issued four such licenses
to non-free-trade agreement countries. The last one, in fact, was Cove Point in Maryland,
and their provisional contracts were for export to Japan and to -- and to India. So we are
trying to do that expeditiously. In each case, we make -- we are -- we are charged to make
a public interest evaluation, and that public interest includes both domestic and international
considerations. OK, guys -- unfortunately, the secretary is
going to have to leave, but I gave you -- We can -- we can do two more.
Charlie Ebinger from Brookings, Mr. Secretary. With our -- so much of our unconventional
oil and gas in remote locations, and while recognizing that your department doesn't have
sole responsibility, do you think there's anything we can do to accelerate the development
of pipelines to move our oil and gas to market and to avoid some of the excessive flaring,
like we see in the Bakken? That is a really important issue -- an important
one, and I will have a terrific answer. This Quadrennial Energy Review -- (laughter) -- over
the next -- over the next year, will be focusing on infrastructure issues, and that will be
part of it. But clearly, the -- I was -- I think most in this room know that the -- our
pipeline infrastructure is not lined up right now with the physical realities of production
and demand. So we will -- we're going to be looking at
that. And as you said -- I mean, we -- at least the Department of Energy, certainly,
have very limited, you know, authorities for that, but that's, I think, one of the advantages,
hopefully, of this quadrennial energy review process is it's -- it's not just the Department
of Energy; it's convening all the relevant departments there.
So let's check back in -- check back in a year. (Laughs.)
Get a short question -- get one more in -- stand up there at the microphone in.
Amitai Bin-Nun; I'm a fellow in the office of Senator Chris *** of Delaware. I wanted
to link this conversation to another conversation that's coming out of DOE about National Labs
reform. What the role of the National Labs in pushing new technology portfolios to market,
and are there any considerations of how that role may be adjusted in the future?
So tomorrow, we are having the inaugural meeting of what's called the lab policy council that
I've established, which includes four of the lab directors representing the system, and
one of the three major items is technology transfer from the laboratories. I think the
-- certainly, we've had a number of successes in this vein. But I think -- you know, I've
said quite clearly that as a system -- as a laboratory system, we probably have punched
a little bit below our weight in terms of -- in terms of -- in terms of all the technology
we have and getting it out. So we are -- we are addressing that. We are, first of all,
looking for -- still searching for a new technology transfer coordinator who would be the point
person for this. We are looking a lot -- and I know Senator
*** is very interested in the whole issue of financing mechanisms -- whether it's a
lab or not, financing mechanisms, and, in fact -- so we built up a group in that arena.
Part of the energy policy systems analysis office, part of our loan office and part of
our senior adviser team. In fact, in August, led by John MacWilliams,
who is a senior adviser in our -- in our director's office, we did a -- we put out an administration-wide
guide to federal energy financing approaches for efficiency and renewables, basically.
So this is a general area that we are interested in. I don't have the answers yet, but I will
just make one speculation. I think that for many of our labs, particularly those that,
frankly, were intentionally chosen to be in more isolated areas, I think the issue is
to not zero in only on the internal operations of the laboratory, but figure out how to couple
it to state and regional so-called innovation ecosystems. I think that's what we need to
do to move it out, but that's going to be a focus for the next year.
OK, a very short question, and then that's the benediction.
Hi, my name is Yusuf Babonli (ph), Azerbaijani State Telegraph Agency. My question is about
Azerbaijan. Do you know Azerbaijan is a non-OPEC exporter of gas and -- oil and gas and emerging
contributor to the European security? What is your stance -- should the U.S government
spend as much time on Azerbaijan and the Caspian basin as it did for the Persian Gulf in the
last four decades? Thank you. (Laughter.) Over your time limit.
Well -- was that a leading question? (Laughter.) The -- well, look, I'm not going to comment
on relative attention, but certainly, the Caspian remains a very important issue. We
all know that, in fact, there's still a lot of dynamics to be resolved in terms of how
gas from the Caspian will move to Europe, and we will be following this with great interest.
(Laughter.) Aren't we lucky to have a secretary this good?
Thank you, Ernie.