Governor Bill Richardson may have abandoned his presidential campaign, but given his experience as the secretary of the Department of Energy and as governor of New Mexico, many believe the country would be well-served to retain the ambitions of his agenda for energy independence and a robust green economy. In the following remarks delivered at the recent GreenXchange Global Marketplace Conference in Los Angeles, Governor Bill Richardson speaks passionately about the disconnect between the federal government’s current global warming policies and the level of commitment it will take for the United States to become a global leader in the resolving this challenge.
Governor Richardson: I’m going to talk to you about the international side of global warming—the fact that America needs to retain, regroup, and re-attain our responsibility and leadership on energy and environmental policy, which, right now, is nonexistent. We’re not players. Not just in energy, but when it comes to geopolitical, national, and strategic environmental energy goals, America’s prestige and influence is literally at rock bottom.
The problem is this: the United States has developed the world’s most vibrant and strongest economy—the world’s economic engine—but in the process we’ve gotten too dependent on cheap, dirty, easy energy. We’re now paying the price for this cheap energy environmentally and in our economy.
Recently, we have flirted with $100-a-barrel oil. But $100 per barrel isn’t flirting; it’s a serious relationship, a bad affair. I say this because, for years, as energy secretary, I used to chase around the OPEC countries. I used to go to Saudi Arabia to meet with al-Maimi, with the Venezuelans, with Kuwait, the objective being to get them to increase production so that the price at the time, which was $22 per barrel, would go down. Interestingly, a coalition of countries that were consumer countries and production countries, were trying to persuade OPEC to increase that protection. Twenty-two dollars a barrel—I remember members of Congress, especially from the other side, wanting my scalp because the price was too high.
Our economy is as energy efficient as Europe’s and Japan’s. Those prices hurt our economy. They hurt small business. They hurt farmers. They hurt low-income people. They hurt the dollar. They hurt our standing in the world.
Let me give you a statistic: one-third of our trade deficit today goes to pay $100-per-barrel oil. One-third. If we re-shift towards a non-fossil fuel economy, that trade deficit can vanish. The point that I will make is that these new renewable energy technology jobs can be created without outsourcing. They can be high-wage jobs for Americans.
All of us know that we’re too dependent on oil. The president was right to call it an addiction, even though he’s done practically nothing in the last seven years...This is what I think of the energy bill that [recently passed through] Congress: It’s pathetic; it’s absurd. Thirty to 35 miles per gallon fuel efficiency? It should be 50, at least. This is a piece of legislation that doesn’t have a strong renewable portfolio standard, doesn’t have incentives that are strong enough for renewable technology and renewable fuels, and it’s hailed, even by the major newspapers, as a major step forward. This addiction that we have as a country costs us dearly. Our oil dependence and our energy policy don’t just undermine our economy, they undermine our respect, our alliances around the world, and our financial strength around the world.
This is what we spend every year on importing oil: $300 billion importing and defending foreign oil every year. That is, defending the routes that proceed to secure our oil. We’ve had two major wars in the Persian Gulf region in the past 20 years. We’re confronted by dictators and hostile governments around the world who derive their power from oil. Our petro dollars are literally translating into terrorism. We not only buy oil directly from Iran, but oil trades in a world market where we are the major players. Oil dollars, if you want to be specific, support Hamas, Hezbollah, al Qaeda. We can’t ignore that fact forever, and we ignore that it at the peril of our people and our own security.
This is our oil dependence today. Sixty-five percent of our oil is imported. We’ve done nothing, literally nothing, to wean ourselves off fossil fuels. We import more than we ever have. And what has happened is a climate crisis that we cannot ignore. Furthermore, our dependence on fossil fuels, as you all know, threatens the planet’s environment. These are scientists saying this: man-made pollution and fossil fuels are threatening the planet, not only because we’ve built our economy on carbon emissions, but also because other nations are developing on the exact same model. Al Gore’s been right for years.
According to scientists, we can only avert catastrophic climate change with an international commitment to reduce production and carbon emissions. Catastrophic climate change poses its own set of human, economic, and ecological challenges. The risk is much too high for us to ignore this. Not only must we re-sign the Kyoto Treaty, but make it substantially stronger.
Sir Nicholas Stern, studying the economics of climate change for the British government in a very thorough scientific report two years ago, indicated that addressing climate change by adopting energy efficiency and new technologies is much more affordable than suffering its impacts. We should heed that very scholarly advice. It’s a path that puts us toward technological innovation and prosperity at home and abroad, and it will restore our place of leadership in the world.
Little energy bills are not going to change the country—weak energy bills as the Congress has. What is needed is an energy revolution. I put forth a proposal that is in a book I wrote called Leading by Example. It talks about what is important in our energy markets. Nothing is going to happen without strong American leadership—foreign policy leadership—with the president taking the lead. I’ve always been a market-oriented Democrat. My state is the sixth-fastest growing economy. What we said to solar, biofuels, biodiesels, wind energy, distributed generation, and fuel cell companies was, “If you come to the state of New Mexico and you pay over the prevailing wage, we’ll give you a tax incentive. You move into a rural area, we’ll give you a tax incentive. Technology start-ups—no taxes whatsoever for the first three years, as long as you set your main facility in our state.”
Our economy has created 85,000 new jobs, many in the energy sector. And you’re looking at a state that is an oil-and-gas state, a red state, a conservative state. As a market-oriented Democrat, I support setting strong standards and letting private markets respond. But don’t tell me there’s a contradiction there. Rules are part of a market economy. The feds set rules on money supply. The FDA regulates which pharmaceuticals enter the marketplace and under what conditions. The Department of Agriculture and state health departments watch our food supply. For 30 years, the Environmental Protection Agency has made the rules and started cleaning up America’s air and water, until this administration reversed that progress.
We need rules, also, that will create a carbon market, gradually reducing the amount of carbon we emit into the atmosphere. My plan that I’ve unveiled sets a target of 80 percent reduction in carbon emissions by the year 2040, with benchmarks of 20 percent by 2020 and 50 percent by 2030. It’s bold and aggressive, but achievable. All I hear from Washington is, “We can’t do this; there’s too much opposition; we need time.” In fuel efficiency standards, Europe today is close to 50, yet we’re oh-so-damaged by going barely to 30 or 35. We need to require automakers to put dramatically more efficient cars on the rod: 50 miles per gallon by 2020, like Europe and Japan. It’s inexcusable that American industry, which has led the world for the past century, is now saying that it can’t achieve what other nations are doing. Our automakers have the technology; they have the skilled people to make this happen. But they lack the political will, which is also absent in Washington.
What we need to do is bring a mandate of renewable energy into marketplace. Many states have that renewable portfolio standard. You have it in California. Governor Schwarzenegger and I, early on in our first year of our first term, got several states to push for energy efficiency standards by 30 percent, and a goal of 20 percent by the year 2020 for several western states. But nationally, my plan calls for 30 percent renewables by 2020. This is doable. This says to utility companies, “You have to build solar, wind, biomass, and distributed generation by that percentage, but we will give you incentives to make that happen.”
This is a huge challenge, but we need to challenge ourselves if we want to make renewables into something more than a boutique response. We need rules that will reduce the fossil carbon content of our liquid fuels by 30 percent by the year 2020, increasing the use of biofuels to power our vehicles. Yes, we need tough, responsible rules. But we also need incentives. We should take the proceeds of the carbon auctions in our cap-and-trade system and use them to support energy efficiency to provide large, instant rebates to car buyers who buy plug-in hybrids or highly efficient vehicles and to help American automakers retool the industry. And I’ve been asked, what is better, a carbon tax or cap and trade? I believe that cap and trade is far superior, because that is a mandate that knows exactly where you’re going to go. The carbon tax, in my opinion, is going to take money out of the economy and is also going to be put right on those that pay the biggest burden of our excesses in fossil fuels, and that’s America’s middle class.
We know we can do this. We know we can make these changes. We’ve made large shifts before. But it’s going to take an Apollo program, a revolution. It’s going to take somebody like John F. Kennedy, when he said we’re going to go the moon in ten years, and then made it happen.
We should have transportation policies. I just came in from the airport, and I’ve discovered something: here in Los Angeles, you have a traffic problem. I say that not because I’m running for mayor but simply because we have not had presidents and federal leadership that says to local communities and cities and states, “Let’s have more energy efficient transportation. Let’s not just have that annual highway pork bill to repair existing potholes and extend lanes; let’s talk about land use policies that make sense and open space. Let’s talk about commuter rail and light rail.” You know, in my own state, from Albuquerque to Santa Fe we put up a commuter rail. It’s 60 miles, and it’s the most popular thing we’ve ever done in a state that only has 2 million people.
This is the future, and the federal government should have joint bonding and funding with cities like Los Angeles to build adequate transportation systems and roads and commuter rail and light rail and electric vehicles. We need to start thinking about the future.
It’s also important that we reduce our oil addiction by 50 percent by the year 2020, virtually eliminating imports except from Mexico and Canada. We’ll slash our carbon emissions and reduce the trends towards catastrophic climate change. We need to create a more sustainable, innovative economy with jobs that cannot be outsourced. These jobs can’t be outsourced—they’re indigenous, high-paying American jobs. Our universities and community colleges can make sure that we foster them. And we’ll guard America’s security and economy for future generations instead of wasting our economic legacy as we have been.
A president has to lead, and there has to be a major effort from the president’s bully pulpit. Today, the White House is silent or vacillating in our energy challenges. You have a compliant Congress that, despite the best efforts of people like Congressman Blumenauer and others, is virtually adopting status quo policies that, in one or two years, will no longer be valid.
We need to have strong voices for change, for investment, for energy security, for climate protection. I believe that we can create a new renewable energy economy, a new retrofitting homes economy, by giving incentives. I don’t mind if the private sector makes money doing the right thing, creating jobs and training people and expanding. This is the key to a new economy.
America needs to lead by example. By adopting these measures at home and implementing them quickly and boldly, we’ll show the world that America is, once again, innovating and leading by example. That’s the essence of a new international energy and security doctrine.
We need to make these changes at home with the support of the American people and the industry. I know there are a lot of innovators here that can make this happen. But what’s needed more than anything is international negotiations aimed at reducing carbon emissions. We need to support strong measures to reduce these emissions, recognizing that rules often drive technological innovation and adoption.
We need to work closely with the developing world. No wonder China and India say that America is not leading. Why should they join the Kyoto Treaty when America produces 25 percent of the world’s pollution but is only five percent of the world’s population? So we need to lead the developing world with us, the World Bank, the European Union, our Asian allies, to help fast-developing countries like China and India bridge the relatively affordable gap between doing it conventionally and doing it right.
New technology is more expensive, at least for now. Why would China and India penalize themselves by paying for carbon-clean coal development? Why would they do so, particularly when the United States hasn’t itself started doing it that way? That’s the flaw in the current policy that exists today. What we need are policies that discourage China from building a conventional coal plant once a week. China is not going to invest in coal gasification or carbon-clean coal until there is leadership from the United States.
We also need to deal with plug-in hybrid vehicles very early. We need to make sure that bankers and our economic allies help the international community invest in this new technology. We should also reduce the indirect subsidies we’re paying into world energy markets by buying and defending oil around the world.
In conclusion, what we need is competition. We need choice. When the consumer can plug the car in instead of filling up at the gas station, these are crucial changes that America needs to make. We will begin sending the hostile and unstable oil markets a much-needed signal that they aren’t the boss of the American economy anymore. Similarly, when we negotiate with allied oil producers and consumers over the next ten years to create a multilateral defense system for the Persian Gulf and other sensitive oil routes, we’ll send the signal that the world has joined the United States in working against the terrorists. We’ll eliminate the economic penalties, uncertainties, and anxieties that oil has created, and we’ll reduce our direct expenditures that subsidize the current system.
Markets do need rules. Rules stimulate innovation. Competition and choice drive markets too. These are very simple concepts. We’ve lost sight of them as we’ve allowed our country to become dangerously, overly dependent on oil and old technology...
...I want to close with this: we have choices in front of us. As a nation, we can continue doing what we’re doing. We can tinker around the edges. We can take things slowly and hope things get better, and then watch Detroit and our economy and our climate suffer. The choice that I’ve given you is different: it’s bold; it’s big; it’s now. I also want to commend you, because there are a lot of individuals here that have been innovative in your own state and your own companies in your own way and in your own homes. So maybe I’m preaching to the converted.
If there’s one message I want to give you, it’s that those of you who are converted should engage more in the policy process. I believe there is going to be a window of opportunity in the next two to three years. But it’s important that we develop concrete policies that don’t just deal with tinkering around the edges, but lead a bold American energy revolution.•••