Remarks to the Consumer Energy Alliance’s Energy Day

*** As Prepared for Delivery ***

"Thank you for that kind introduction. I'd like to thank the Consumer Energy Alliance for inviting me to speak today about America's energy future. It's a pleasure to talk to a group that truly understands the importance of affordable and abundant energy in maintaining a healthy economy.

"Energy policy is the base of the strength of our economy, environment and national security. Abundant and affordable energy is what makes the modern lifestyle we all enjoy possible. It's simple enough ¬- everything we do requires energy and the more of that energy we can produce here at home the better off we'll be. But quite a few Americans have long had a love-hate relationship with energy. We love cheap gas but hate drilling for oil. We love the idea of clean, renewable energy, but we don't want turbines or solar panels in our backyards. Unfortunately, the perfect solution doesn't exist. It's time we had an honest discussion about our energy needs and how much we're willing to pay to meet them.

"Last summer, we saw energy prices go through the roof because of high demand and limited supplies. Four-dollar-a-gallon gas put the squeeze on all of us, but it was especially tough on working families who had no choice but to make cuts elsewhere in the family budget. At the time, there was a lot of talk about the need to produce more energy here at home to keep prices down.

"Since then oil prices have dropped, but the challenge of guaranteeing access to abundant and affordable energy remains a top priority for the nation. I promise you, energy prices will rise again as soon as the economy recovers. World demand for energy is expected to grow by as much as 50 percent over the next two decades. If we do nothing to increase our access to energy, prices will simply follow rising demand and we will once again be paying $80 or more to fill up our cars. Such a future is inexcusable. We simply must find a better way to power our factories, fuel our cars and heat our homes.

"Our reliance on foreign oil has nearly doubled over the past two decades. Production of oil here at home, however, has continued to fall - even while demand for energy has steadily risen with population growth and prosperity. Dependence on foreign energy has put both our economic and national security at risk. We remain vulnerable to volatility in the Middle East and prisoners to the whims of OPEC. Simply put, our current energy policy doesn't make sense. We must stop looking to others for the energy we need. A nation that consumes 20 percent of the world's oil should be aggressively developing new energy resources within its borders.

"It's not that we don't have the resources here at home. The northern part of my home state of Alaska alone holds more than 50 billion barrels of oil ¬- two and a half times the nation's total proven reserves. No, what we lack is the political will to enact a truly balanced energy policy. One that creates jobs, revitalizes the economy and improves our nation's energy security, and does it with environmental balance. It's a tall order but I believe it's one we can accomplish if we just follow a little common sense.

"First, we need to improve our energy efficiency and conservation. Enhanced energy efficiency can help buy us time to develop new technologies and expand our transmission infrastructure so that we can make increased use of renewables feasible.

"Second, we need to make a major investment in developing renewable energy and transformative technologies. Americans have always been leaders in innovation and I believe that we can find solutions to our energy needs and the challenges presented by global climate change.

"Third, we need to increase production of all forms of energy, including renewables and conventional fossil fuels, as we bridge the gap between the clean energy future we want and the reliable and affordable energy we expect. I'm not saying we can drill our way to energy independence, but an energy policy based only on efficiency and renewables is similarly unrealistic.

"There are also environmental benefits to meeting more of our energy needs with domestic production. We can do it in this country, responsibly and under the watchful eye of federal regulators, or we can buy it from someplace else that doesn't have the same strict environmental protections.

"We all care about the environment and we all want cleaner energy. It's a goal I believe we should be working toward every day. We need to be honest, though, about what it's going to take to transform our energy system. The fact is solar and wind power currently make up less than 2 percent of our energy supply. Even if we double the amount of electricity we generate with wind and solar, and then double it again, it still won't be enough to meet our energy needs. Simply put, there are no near-term alternatives to oil, gas, coal and nuclear.

"We didn't become dependent on oil overnight and we won't transform the economy in weeks, months or even years. Fossil fuels met 85 percent of our primary energy needs in 2007. The EIA projects that percentage will decline slowly - to 79 percent by 2030. It's going to take decades and massive new investment to develop and expand our use of renewables, devise cleaner ways to use coal, and figure out how to safely capture and store carbon dioxide so that it doesn't contribute to global climate change.

"The good news is we've already begun to take steps to improve our energy security and reduce emissions. The Senate Energy and Natural Resources Committee is currently working on a comprehensive energy bill that will enhance efficiency, boost investment in renewable energy development, increase domestic energy production and improve the nation's aging electrical grid.

"Sen. Jeff Bingaman, chairman of the committee, has been a good partner in the drafting of this new energy bill and I've made a commitment to work with him to develop legislation that can win wide support. The chairman has said he wants to report a bill out of committee before the start of the Memorial Day recess - that's nine days from now. Considering the complexity and controversial nature of some of the issues were dealing with, I think that's a very aggressive schedule. I won't say it's impossible, but good legislation takes time and I see no benefit in rushing bad legislation to the floor.

"The new administration has talked quite a bit about the importance of producing more conventional energy while the country transitions to alternatives. So far, though, the administration's actions have not matched its rhetoric. I for one am judging the administration on what it does, not on what it says. And, so far, I'm concerned about the direction we're headed.

"As we move forward, it's important that we base our national energy policy on reality - not wishful thinking. The truth is we can improve our energy security and reduce our emissions without harming the economy or the environment - but that requires a balanced approach. We need to base our decisions on sound science, national security and a strong focus on our economic future.

"Thank you."

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