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moderator: pleased to be here with secretarysteven chu to talk about earth day and all of the both economic and environmental benefitsof what we’ve been able to accomplish here with the department of energy. with that,i will turn it over to the secretary and then we’ll start to take questions, both fromfolks that submitted them ahead of time via facebook, twitter and on – and by email,and then as well from an online audience that are live and our in-studio audience here today. with that, secretary chu. secretary steven chu: thank you, jen (sp).and thanks for everyone here who’s come and also for those participating in our earthday live chat. earth day is a reminder that
we can’t take the environment for granted.i want to open and close my brief remarks with two images. the first image was takenby bill anders on apollo mission – the first one that actually circled the moon, and it’sknown as earthrise, taken 1968, christmas eve. and when anders took the photograph,he said: we’ve come all this way to explore the moon and the most important thing is we’vediscovered the earth. now, since that time, we’ve discovered somethingelse, that the climate of the earth is changing and it looks more and more convincing thathuman activity has played a significant role in that change. the predictions of climatescientists present us with both a challenge and an opportunity, but they’re not in conflict.the challenge, of course, is how do you transition
to a sustainable world and still grow theworld’s economy. but to say that transition to a sustainable world and growing economiesare in conflict is really a false choice. it’s – and we don’t have to make that– we don’t have to make that choice. the thing is that we do know eventually, soonerrather than later, that the world will need clean energy. but clean energy prices arecoming down so rapidly that they are going to reach price parity with all forms of energywithin one or two decades. and the greater energy efficiencies that we are developinghere in the united states, developing economical, clean energy sources, i think, will be a cornerstoneto american prosperity. but having said that, and talking about allthe opportunities, i will also say that the
main reason i got into this job and to myprevious job was not in the economic opportunities and future prosperity, but it is also forme a deeply moral issue that we do take care of the environment. and deeply rooted in allcultures is the notion of generational responsibility. parents work hard so that their children canhave a better life than they did, but as a world society we are now faced with anotherchoice. as citizens of the world, what are we willingto invest our money to protect children that perhaps live halfway around the globe? andone of the cruelest ironies of climate change is that the change would affect those whoare most innocent. these are people in the poorest countries that have not been emittingcarbon and these are people yet to be born.
so let me first mention a few of the thingsthat we have been doing in the obama administration over the last three and a half years. forexample, the united states has nearly doubled renewable energy generation since 2008. there’sa 1603 program that’s supported more than 30,000 renewable projects nationwide, andexpected to have the capacity to power about 4 million homes with clean energy. we havea loan program that supports nearly 20 renewable energy projects. and these projects are goingto power more than a million households per year. and it’s the equivalent of decreasingthe annual emissions by more than 1 million vehicles. the departments of energy, housing and urbandevelopment have supported energy efficiency
upgrades for more than a million homes. throughthe president’s better buildings challenges, 60 major companies, universities, hospitalsand retailers have committed to upgrading efficiency in commercial space of a combined1.6 billion square feet of commercial and industrial space. finally, the obama administration has proposedthe toughest fuel economy standards for passenger vehicles in u.s. history. and those standardswill reduce oil consumption by 2.2 million barrels a day, and keep more than 6 billiontons of greenhouse gas emissions from polluting the air we breathe. so these are just someof the steps we’ve taken. we can do more, and we will be pushing to do more.
but now i want to end my remarks with a fairlylong quote from the astronomer carl sagan. i don’t consider it beneath my dignity tobe quoting someone, because i remember what picasso said, another quote. he declared:good artists borrow. great artists steal. so before i read the quote i want to put apicture in your mind of where this picture came from. it’s – it has to do with voyager1, which was taking pictures of the planets going further and further out. and as thisspacecraft began to leave our solar system, carl sagan convinced the nasa engineers toturn the camera back towards earth and to take a picture – a last, fleeting picturebefore it left the solar system, of earth. and earth appears as a very faint, pale bluedot of light in a rainbow of scattered light
from the camera lens, barely discernible. and this is a condensed version of what carlsagan wrote about this picture: look again at that dot. that’s here. that’s home.that’s us. on it, everyone you love, everyone you know, everyone you’ve ever heard of,every human being who ever was lived their lives. every hunter and forager, every heroand coward, every young couple in love, every mother and father, hopeful child, inventorand explorer, every saint and sinner in the history of our species lived there on a moteof dust, suspended in a sunbeam. the earth is a very small stage in a vastcosmic arena. our posturings, our imagined self-importance are challenged by this pointof – this point of pale light. our planet
is a lonely speck. in all this vastness thereis no hint that help will come from elsewhere to save us from ourselves. the earth is theonly world known so far to harbor life. there is nowhere else, not – at least not in thenear future, to which our species could migrate. like it or not, for the moment, earth is wherewe make our stand. there is perhaps no better demonstration of the folly of human conceitsthan this distant image of our tiny world. to me, it underscores our responsibility todeal more kindly with one another, to preserve and cherish the pale blue dot – the onlyhome we’ve ever known. so that’s the earth day message. i hopeyou all remember it. and with that, i’ll be happy to take your questions.
moderator: all right. well, i think we’llstart with one of our questions submitted via twitter. steve (sp) asks – you know,after having spoken, you know, very eloquently about what we’re looking to protect, heasks: what can we do to encourage other americans to get behind clean energy? he says he’sinstalling pv at his home now, and is looking for how we may bring this message to the broadercommunity. sec. chu: well, i think the short answer isthat this is really important. and it’s not only the pv, which is a great thing, butit’s also energy efficiency. so one of the first messages is think of your own home andplug up the air leaks, think of more insulation, better doors and windows or just sealing thedoors and windows would mean a big effort.
and none of that – those small things willsave the person money and the homeowner a lot of money. and so you can save money bysaving energy. that will have an incredible impact. moderator: wonderful. i guess we want to takea question from one of the audience members here with us today. go ahead. q: secretary chu, i know the – sorry – secretarychu, the department of energy has approved a number of appliance standards – efficiencystandards since you became secretary. i was wondering if you know how much energy thesewill save in the future, and whether you think
the program can continue to make similar successgoing forward. sec. chu: well, first, we hope the programwill not only continue to make more standards with similar success, we want to up the activityof this department. i’ve asked – we asked that we – about two and a half, three yearsago that this is some of the best money invested by the department because you really, trulysave money by these standards. and so i’ve asked to double the budget one year and thendouble it again the next year so we could hire more people. i can’t tell you exactly – i don’t haveit on the tips of my fingers – how much has been saved, but let me give you just acouple of examples. refrigerator standards
started in california in the middle ’70s,and then federal standards – there was a series of three california refrigerator standardsfollowed by three federal standards. the lifecycle costs – that is the cost ofowning the refrigerator and the cost of the energy – has gone down remarkably, so thatin today’s refrigerators compared to the 1975 refrigerators, even though the refrigerators’gotten – they have more features, they are frost free, all these other things – aresaving people who buy refrigerators anywhere from 800 (dollars) to $1,500 over the lifecycleof that refrigerator, 17 years. now, that’s a profound savings. what we’vediscovered also is that the assumption that appliance standards would actually increasethe price of the unit is not true. it had
no effect. and if it had any effect, it actuallydrove down the first price. so remarkably, and in fact working with a number of my colleaguesat berkeley lab on a paper that we are submitted to science journal, it says: remarkably, (weview that ?) refrigerators, washing machines, room air conditioners, central air conditioners,the same thing. after standards appeared, the cost of ownership went way down and thefirst price also declined faster than before standards. we don’t fully understand whythat is, but in fact that data appears to show this, which is remarkable. moderator: great. you know, kind of continuingon the conservation and the efficiency side of things, jess (sp) from twitter had a coupleof questions on some of the policies that
we can do that will impact the adoption ofconservation and clean energy. she asks: what is preventing regulatory reform toward conservation– or, to reward conservation, rather. and then, why do low prices consistently beatout long-term solutions? sec. chu: well, first in terms of energy efficiency,if you consider building codes, residential and commercial buildings, that is not a purviewof the federal government. that’s a purview of the states. and some states take that veryseriously because they know that better, for example, insulation standards, better buildingcodes actually save the owners a lot of money. it’s estimated that for homes in an average– you know, it varies, of course, but the payback period of added insulation is somewherebetween one and two years, depending where
you are – a very, very modest increase.and this is not only the material, this is actually the labor – just to put in moreinsulation has a profound effect that you pay back in just a couple of years. so we know how important those standards are,but it’s something that the states deal with. and so there are certain states, forexample, that have no residential insulation standards. they have them in – fascinatingly,one of these states has, you know, like minus-20 temperatures in the wintertime. so there’snot much we can do there, but we can push on all these things and get the states torecognize how much cost savings they can actually have, and their citizens can have – youknow, that this is money in their wallet.
they can go out and spend it on anything elsethey want. moderator: and why – what do you think aresome of the barriers that we’ve already seen? why hasn’t that happened more broadly? sec. chu: well, there’s a couple of things.first, there’s not a wide appreciation that energy savings do actually save money andthey save it very quickly. i think there’s another barrier, especially in retrofitting,where you need some investment money. and so we are looking at programs to develop (thatsays ?) how can a homeowner borrow 5 (thousand dollars) or $10,000 to do these retrofitsbecause many homeowners don’t want to do it themselves – they don’t want to crawlup in the attic and put a layer or two of
insulation. but – so they would have tohire professionals. so we’re looking at programs where we canactually get reasonable, low-cost loans so that you pay back the loan with interest andit still saves money. the payment of the loan will be less than the money you save fromyour utility bills. and then it’s simply inertia. you just never get around to doingthings. and that’s something i think one can do by having sort of the neighborhoodof neighbors talk to other neighbors and say, you know, i did this and guess what happened?i’m saving, you know, $200 a month. the most we actually saw was we moved intoa house in stanford – it was an old, elegant – it was duplex and we only had half thehouse, couldn’t afford a whole house in
stanford. and it was – it was uninsulated.the roof was not insulated – it was built in 1906. so we blew in this much insulationinto the attic. there was no air conditioning in the home, so in the summer it was much,much cooler. the winter, 200 (dollars), $250 per month decrease in the gas bill. it wasamazing. and so one year it was paid for, and the house was more comfortable. moderator: that’s great. one of our online members just sent in a question.this comes from alex (sp). what rule – role do universities play in solving energy challenges,and how does the government support this? sec. chu: oh, universities can play a hugerole. first, i think the students (in ?) universities
in many, many campuses are the leaders. andthey actually nudge the faculty and the university administrators to take sustainability muchmore seriously. there are energy clubs being formed all overthe country in universities. these are clubs that are a clutch in – of people in thebusiness side of things, who are in business schools or want to go into business, and they’relinked with engineers and scientists, so – because you want to actually couple the technicalsolutions to business models. so that is growing very rapidly. many people see this as an excitingjob opportunity. and finally, there’s these growing competitionswithin a university. one dorm might challenge another dorm, who could decrease the energybill of that dormitory more – (inaudible)
– and then i think winners get a pizza partyor something like that. but – (inaudible) – have an opportunity to show incredibleleadership and really show that saving energy saves money. moderator: great. i think we can take anotherquestion from our in-person audience. right there in the back. and if you can just identifyyourself beforehand, would be great. q: sure. i’m shamar bibbins from green forall. and i actually have a quick comment. so green for all, we’ve been paying attentionto the national standards for home performance. and we were really pleased to see that – therecent announcement that the criminal background history as a prerequisite for criteria wasremoved. and so we just want to – just wanted
to say thank you and applaud doe’s workfor the great work that you all are always doing to remove employment barriers for themost vulnerable communities. so i just wanted to applaud the efforts that doe is doing inthat area. sec. chu: all right. thank you. moderator: you know, kind of moving into adifferent area, you know, we’ve talked a lot about energy efficiency and energy savings– you know, now kind of the energy security part of this. we have had a couple questionscome in, including one from operation fitter (ph) – free, rather, on twitter. how is@energy and @departmentofdefense (sic; @deptofdefense) working together to make u.s. less dependenton foreign oil?
sec. chu: all right, there’s a few things.first let me tell you what the department of energy’s doing. we are helping oil companiesmanufacture more energy-efficient cars: lighter-weight materials, things of that nature. we have a very aggressive program on the electrificationof vehicles, mainly batteries but also motors, because we feel that if you can begin to sella car somewhere between 20(,000 dollars) and $25,000 – let’s say a plug-in hybrid cango its first 30 or 40 miles is on electricity, and the rest is on fuel – that that carwith that price would pay for itself in a couple of years. if you drive a car that getsabout 33, 35 miles to a gallon, your expected fuel bill per year is about $1,400. if youplug in and pay 10 cents per kilowatt-hour
in electricity for a vehicle like this, yourelectricity bill is $250, ok? and you get a great experience. you can driveby a gasoline station smiling. (laughter.) so – (chuckles) – that experience is priceless.and if it’s 20(,000 dollars), $25,000, this can compete favorably with a car that costs18,000 (dollars), $17,000 that’s gasoline-powered. so great strides are being made in batteries.and the research we’ve been supporting batteries – it’s remarkable. in the last coupleof years there’s been real breakthroughs. biofuels, working on next-generation biofuelsthat can give us cost-effective biofuels, ideally drop-in substitutes that make good,sustainable sense. so we’re working on that. natural gas – because natural gas is a newresource of energy, we think that natural-gas
vehicles could play a role. the biggest andmost obvious role is long-haul trucking. long-haul trucking uses 20 percent of our transportationenergy. and with a long-haul truck outfitted with liquid nitrogen tanks, these trucks go100,000 miles a year or up. and even the retrofitting of this truck, or when you buy a truck andput these natural-gas tanks on them, the engine’s still the same. the payback period is about four years, butwe think it’ll go to two very quickly because as there’s more vendors who are going tosell natural-gas-adopted trucks, the price of that will go down. so that’s very exciting,and there are companies now installing liquid natural gas filling stations along major truckroutes. the plan is to put up 150, 200 of
these stations. and that will get at leasthalf the market. research probably going to see if personalvehicles can be adopted to natural gas and flex-fuel cars – so that again, the first(15 ?) miles you drive on natural gas, and – (inaudible) – you – so you don’thave range anxiety. you can fill it up at home, and the rest of the time you can – youcan use conventional liquid fuel. so these are a glimpse of some of the thingswe are doing to get off of oil. in the meantime, we’re also looking at other things, workingwith the defense department on the economy of their vehicles – big program to ensurethat – you know, it’s only recently that they have really focused on the fact thatthe mileage economy of a – of a military
vehicle matters a lot; that in convoys offuel when – (inaudible) – people lose their lives because those convoys of tankertrucks are attacked. there’s – so there’s major efforts there. also major efforts onmaking the military more energy-efficient; also a very big deal. moderator: wonderful. you know, one of thethings that you mentioned is natural gas. and i know there’s a lot of churn out thereon natural gas. one of the questions we got from d.w. via email – he asks: why are chemicalsneeded for fracking? why can’t this work be done with clean water pressure alone? thenwe wouldn’t have to be worried about the groundwater being affected, other than problemswith water pressure in individual wells. this
is very important for where this is alreadybeing used, but also in new areas such as north carolina where this is being proposednow. sec. chu: ok, that’s a great question. first,most of the content is water. here are the essential ingredients. it’s water for thehydraulic pressure. the water can go through this shale rock easier if it had a lubricant.now for better or worse, the first lubricant they had was the one they happened to haveon hand, which is diesel fuel. the good news is you don’t need to use diesel fuel. thereare other materials that work just as well and cost the same or less than diesel fuel. and so as you go forward in fracking, it wouldmake good sense to say, hey, don’t use diesel
fuel – because diesel fuel has a few noxiousthings in it. the fuel itself’s not so good, but it’s got trace amounts of benzene init, things like that. so you need a lubricant. there are much more environmentally, i wouldsay, better lubricants than diesel fuel. you need an antibacterial agent. you don’twant little microbes to gunk up the works. that antibacterial agent – (inaudible) – whenyou’re flowing through these underground rocks you have to be very careful about. thegood news is that there are a number of companies who are finding out – as you pass this fluidjust between, you know, ultraviolet lamps, that kills enough of the bacteria – youdon’t need anything, ok. so there – again, there – and there are much more benign antibacterialagents than what’s being used. and so there
is now – we’re undergoing a rapid conversionto these more benign antibacterial agents. and then finally there’s something – onceyou crack the rock, you got to keep it open. sand’s ok. so – (chuckles) – i think,you know, in our subcommittee we recommended that – whether it’s a state or federalagency, that you just declare all the ingredients of what you’re using, even the proportions.this is not a state secret. this is – there’s no – it’s not like a coca-cola formulathat – everybody knows what the ingredients are. and that will also help a lot. but – sothose are the reasons why you add things other than water. moderator: sure. and as someone who has lookedat this from the technical side, do you feel
like natural gas fracking can be done safely?or are there still more that we can do to help improve it? sec. chu: well, there’s of course more wecan do. i think one of the things that the companies that do fracking should do is, theyshould establish a baseline in the water tables before they do anything. that would also protectthe companies as well as establish whether something has been done. and many of the companiessay, yeah, that makes good sense. what you – more you can do – as i said,you go to – (inaudible) – microbial agents or just ultraviolet light, better frackinglubricants. most of it’s sound drilling practice. if you’re going through a watertable, you have to put in what’s called
a casing. you drill, and then you put a steelcasing. and then you backfill in the little gap between the hole you drilled and the steelcasing with cement. and then you actually use sonic or ultrasonic to test whether thecement actually went up and filled all the cracks. that is the sound drilling practiceused in the industry today; the so-called cement logging should be done. in a critical water table, you would wanta double seal. just in case the first steel pipe or – and concrete fail, you want adouble seal. deep water drilling, it’s mandatory to have double seals through the whole thing.and so in a critical water table, that – also a good drilling practice. so there are a numberof things like that which are not that expensive
and could really help. and again, the moreresponsible companies do these things, and it’s just that you’ve got to get everybodyto do it moderator: great. i think we can take – righthere up front. q: thank you. my name is elena (sp). moderator: sorry, wait for the mic. great. q: thank you. my name is elena dimitresk (sp),and i’m from the georgetown university energy club, so thank you for mentioning that. myquestion has to do with renewable energy and natural gas. so given the shale gas revolutionthat’s taking place in the united states, do you see that impacting renewable energy,and in which way? thank you.
sec. chu: well, yes and no. first, the priceof natural gas currently is (anomalously low ?). we had a very, very mild winter. but theprice is so low that it’s actually – the producers of natural gas, if they can takethat rig and go somewhere else and it’s – (inaudible) – to look for natural gaswhere there’s more liquid content or shale oil, which is actually done by fracking, they’removing, because at $2 a million btu, you can’t produce it economically. so people expect that the price will go up.and you know – now, if it stabilizes somewhere between four (dollars) and $6, even at $4it’s economically recoverable, and not only economically recoverable; it would actuallydraw increased investment. but four (dollars)
and $6 would be very, very low, because sometimesthe natural gas prices peak up to $12. and so – and higher, yes. so even there at thoselow prices, you know, the fuel bills – the residential, the heating bills – would bestill very, very low. so we think that this is – so if you acceptthat as the price where it might stabilize at, you know, then the question is how willrenewables react to that? ok, the bar is now a little bit higher in the sense that youcan now expect the costs of generating electricity with natural-gas burners – and they’revery efficient these days – will be lower. so the estimate is somewhere like 5 ⽠(cents),6 cents per kilowatt-hour for a new natural gas plant with $4, million btu.
now if you compare that with wind today – ifyou could borrow money at the same price to install wind turbines as natural gas, windis right now 7 (cents), 7 ⽠cents kilowatt-hour, not too far. but the price is going down.solar’s more expensive; it’s 14 (cents), 15 cents. but the price of solar has comedown threefold. the price of solar will come down at least another twofold, maybe more,within the next decade. everybody who’s in the business expects this. so now you all of a sudden (seen ?) solarand wind really reaching parity with natural gas at, let’s say, $4 a million btu – becauseonce you get in the 6 cents, 6 ⽠cents price range, you’re there. and you also want adiverse – (inaudible) – of supply; you
don’t want to be all natural gas. so that’sthe good news. you know, could it delay reaching parity by a year or five? yes. but there’sno fundamental law of physics that doesn’t say solar can be as cheap as any form of newenergy. and i think the technology push there is especially stunning. and there’s allsorts of things coming down the pike that we see. moderator: great. just got – you know, we’vehit natural gas; we hit renewables, efficiency. we just got a question in via twitter fromtom (sp), who asks: do we still need nuclear power? if so, can we build more power plantswithout increasing the risk of more nuclear weapons?
sec. chu: another good question. i think inthis century we will need a diversity of energy supplies. nuclear power is clean; they haverisks, as we see. there are three risks. one is, we still have to get an actual policyon what to do with the spent fuel. we need – safety is a concern. and then the nonproliferationissue is a concern. natural gas actually has put a damp on that– damper on that, because natural gas is considerably less money currently than nuclearpower. but again, the utility – if you talk to the utility company and say we don’twant to put all our eggs in one basket, we can’t. so right now nuclear power is about20 percent. different regions react differently. if you go to the northeast, if you go to california,washington, oregon, i don’t think they’re
going to be installing new nuclear power plants.you go to other places in the united states, they say we’re comfortable with it. in terms of proliferation risk, i think thereare issues we – that we can work with and deal with. our – my major concern is actuallynot in the united states. our nuclear power plants are very well-guarded after 9/11. weare very, very careful. we don’t have enrichment, which then creates a stream of plutonium andplutonium oxide, so that’s not an issue. and – but i do have concerns with othercountries that may have not had a 9/11 experience and they perhaps don’t guard their nuclearfacilities as tightly as we would like. so this is an ongoing discussion. the departmentof energy turns out to play a major role in
this to try to convince countries to takenuclear terrorism very seriously. and we’re making good progress on that. but, you know, i said nuclear power in thiscentury. i’m hoping near the tail end of this renewable energies and energy storagewill be so inexpensive that you can really transition. but that’s something yet tobe shown that, again, great progress in batteries, but you need – you need energy storage aswell as in renewable. sometimes the sun doesn’t shine and the wind doesn’t blow. so that’sanother fact that we have to deal with. moderator: ok. you’ve spoken numerous timesabout the importance of science, technology education, you know, what’s called stemeducation. elizabeth posted on your facebook
page asking what is doe doing to ensure theagency has a robust pipeline of scientists and engineers to fill vacancies left by retiringbaby boomers? are those things tied or is there something else that we need to be doingon it? sec. chu: we are doing as much as we can toreach people. most of our education thus far in the department of energy has been in thesupport of research where you support a professor or even people in the national labs have – graduatestudents and post-docs and you train them. there’s specific programs where you’dsupport areas which we think there’s a national need and a dearth of competent engineers. we have historically supported nuclear engineers,but we also see a much larger need in, for
example, electrical engineers who work onpower electronics. power electronics are the electronics needed to convert dc to ac, acto dc, to step up voltage to actually all the things the electronics – you know, youplug you in your computer and all the electronics that take your ac power and turn it into somethingthat powers your computer. those power electronics are a very, very big deal. right now about20 percent of our energy goes through power electronics. in 20 years, 80 percent willgo through power electronics. remarkably if you’re a company in the unitedstates and want to hire a power engineer, you can’t find enough qualified power engineers.they have to go to europe or asia. so if anyone out there is an engineering student, listento me; you can get a job. (laughter.) but
-- so we are trying to fund at an undergraduateand it’s – at an undergraduate, master’s level. i don’t think you really need a bignumber of phds in power electronics. it’s at this practicing level, at master’s levelwhich there is a big need. moderator: great. any other questions? sure,right here. q: yes. hi, i’m leila surratt with centerfor clean air policy. and you’ve spoken about the energy efficiency programs in theresidential building sector as well in vehicles, but industrial sources are a major – sec. chu: mm-hmm. q: -- another major source of greenhouse gasemissions and energy use. and i’m wondering
if you could talk about some of the programsdoe is -- and policies doe’s pursuing to encourage energy efficiency in the industrialsector. and also, it’s more complicated because there are so many different industrialprocesses and many different reasons why businesses may not pursue those types of projects. sec. chu: well, ok, so we also – just toset the record straight, you omitted commercial buildings; we have programs in commercialbuildings. but your question’s a good one. what about the industrial sector? in certainindustries that are heavily energy intensive, plastics industries for example, your feedstockis some form of carbon, typically oil or natural gas. and then you’re taking that carbon– and natural gas is now the preferred feedstock
because of the price difference – and you’remaking it into a plastic, which is, you know, a different form of the carbon – very energyintensive. the companies are very motivated to make their– those industrial processes as energy efficient as possible. so if you look at a major plasticscompany like dow, they went up and down the chain to figure out how to make it as energyefficient as possible so much so that they’re now thinking this is a new line of businessto help other companies. but it’s a funny new line of business because you don’t wantto help other companies too much – (chuckles) – to be competitive. but a certain – butin another line of business like ibm, which did a very similar thing, they looked at allthat they were doing and decided that it could
– would be a legitimate line of businessto go into this so-called company consulting mode. so there are a number of companies thatare doing that. again, because of these barriers, it’s notthe cost barrier, because if you can make a conversion in a heavily energy intensivearea and the payback period is short. and by payback period short, you mean that itgets to be competitive with the money the company could invest in a new line of business,ok? this has less risk, so ideally you wouldn’t expect – if you’re investing in a newline of business or new product line, you might want a 30 percent return on your investmentor 50 percent because it is high risk. if you go to energy efficiency, the risk is alot lower and so you might ask for something
lower than that, maybe 15 percent return onyour capital. and so there are now businesses in the process of doing that. meanwhile, the department of energy is lookingat research and development we can help companies in terms of making – sponsor a few projectsthat make cement, which is a very carbon-intensive process, much more efficient and have muchless carbon emissions, in fact looking for substitutes for the traditional portland cementtype of process. other energy-intensive things, steel and things like that is similar. we – we’re looking at seeing how you canactually make those more efficient –processing of metals, titanium – a very good example.if you want to make aircraft caliber titanium,
you actually have to take the ore, melt it,refine it, melt it, refine it again, melt it and – you have to do this three times– huge energy costs. and we’re looking at how you can take it and, like aluminum,have an electro process that in one fell swoop gets very high purity. this would decreasethe energy investment five to 10 fold. and it would bring the cost of titanium remarkably– it’ll make it plunge by at least a factor of five because a lot of that is energy cost. so there are very specific manufacturing thingsthat we will look at, but they’re – more globally, we also encourage these other businesseswho in fact, figured out they can save a lot of money. you know, hey, go over – you know,tell other companies this. if you’re in
competition with a company, well, doesn’thave to be in your line of business – (chuckles) – it could be in some other line of business,ok. moderator: great. well, i think we have timefor probably one more question. so we’ve now, you know, spoken at length about a numberof the different technologies that are out there, some about what the administrationhas been doing to approach this and to help move this forward. so tony asks on your facebookpage: dr. chu, i heard you speak after your appointment to this position. it was so verypositive and inspiring. does it seem like things that are not moving along as quicklyas you would have liked? and what are the difficulties in getting policies that matchthe goals?
sec. chu: well, some things are not movingas quickly as i would like and some things are moving just fine. i think the startingof arpa-e, this new branch of funding for innovative research, has been up and runningsince the beginning of the administration. it’s flowering, got a lot of support – bipartisan,nonpartisan support. if you get someone like fred smith, who is the ceo of fedex who’spolitically conservative, he would get up at the – he got up at the arpa-e summitand said, you know, pound-for-pound, dollar for dollar, arpa-e is the best governmentprogram i’ve ever seen in my life. so, you know, that’s a nice statement. (laughter.)and so there is a – and similar from the ceo of wal-mart and others.
so across the political chain, whether you’rea democrat or a republican, conservative or liberal, it doesn’t really matter. there’sa recognition that this has been very successful. a similar sort of program in our so-calledsunshot program with renewable energy, energy efficiency. we’ve got a person – first,the head of arpa-e was a personal friend of mine from berkeley, a member of the nationalacademy in his middle 40s, still in his 40s. he was willing to come here to washington.he had a family in high school, so he had to leave his family behind to come and workin washington for a bunch of years. and under his leadership and the people in this organizationtruly stellar. another person, another friend happens tobe from berkeley, but i – we also have friends
from stanford and mit – (laughter) – andother places hitting up sunshot – another member of the national academy of engineeringkind of commuting, if you will, an incredible team of people where some of the people – theseare now career people who have been hired into this program, and they’re remarkable.they have been pursued and are being pursued by a lot of people in the commercial worldand that – or, you know, this guy is a full professor at berkeley; a full professor atmit has come to work in arpa-e as a program manager for a couple years. and so the peoplethat we’ve gotten are truly remarkable. and it shows in the way they make decisionson what programs to develop, what programs to fund.
and it’s been said, and i actually agreewith this, that many of the program managers now are as good or better than the peoplethey fund. and that’s very important. i actually spent the first nine years of mylife in that situation. in bell lab – i worked at bell laboratories. who are the managersat bell laboratories? well, they are the scientists. and they get promoted up and they were thebest scientists. virtually everyone wanted to be a department head or a laboratory directorbecause they controlled budget. you know, a department head of a university doesn’tcontrol budget, neither does the dean, neither does the president. at bell laboratories,you control budget. you can invest in what you believe in. you couldn’t invest in yourself– that’s not your job – (chuckles) – because
you were also an active researcher. and so we had in the management the very bestscientists making funding decisions and that a profound impact on what got funded. andit – you didn’t need peer review because when i was a department head, someone wouldcome up with a bright idea and we’d talk about it. i said, ok, let’s go to the board,and we’ll start haggling the idea. sometimes they agreed, sometimes they didn’t agree.if i didn’t agree, the person would come back and say, well, look, maybe i didn’texplain it right, blah-blah-blah. other times they would – we would agree the idea wasn’tso good – (chuckles) – and the person would say, ok, got it. thanks for helpingme – (chuckles) – not go down this line.
and so my dream would be that we’d get programmanagers who are people in the department of energy who are like this. there are a numberof them. and even if can only keep them for three or five years, 10 years max, becausethey’d become so valuable and they’re so recognized that all of a sudden universitiesor companies are trying to poach them as they are doing now. that’s ok. if you have someonefor three to five years and then they go somewhere else, that’s great because then you canbring in another set. and so things are happening. other things not happening not quite so fast.i’d stick my neck out and say in this congress i don’t think we’re going to have a comprehensiveenergy and climate bill. (chuckles.) moderator: fair point. (laughter.)
sec. chu: you know, so just stick my neckout and say it ain’t going to happen in this congress. but eventually we will. wewill have to and so will the world. and sooner rather than later, but it is very important. moderator: great. well, secretary chu, thankyou so much. thank you to our in-person audience. thank you to our online audience for participating.the video of this will be posted online later today. and please join us at energy.gov tocontinue the conversation. thank you all, and happy earth day. sec. chu: ok. thank you. (applause.) (end)
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