Hydrogen Economy: Renewable Energy & The Future

Ambassador Reno Harnish
Principle Deputy Assistant Secretary, Oceans and International Environmental and Scientific Affairs
Remarks at an International Symposium on Materials Issues in a Hydrogen Economy
Richmond, Virginia
November 13, 2007

Renewable Energy and the Future

It is a great pleasure for me to speak this evening to such a distinguished group of scientists and entrepreneurs. Your deliberations over the course of the week will help to accelerate the development of the hydrogen economy as proposed by the President in 2003.

We hope, similarly, to accelerate sharply the market adoption of clean, alternative, and renewable energy through our deliberations at the ministerial meeting March 4-6, 2008 of the Washington International Renewable Energy Conference, or WIREC.

I will speak about that in about 15 minutes, but first I will outline U.S. renewable energy policy. I will begin with an overview of our domestic program, then concentrate on the foreign policy aspects of renewable energy, including finance, market enabling initiatives, and project-based initiatives.

But before I start, let me apologize in advance for not being a bench scientist or principal investigator. My training was in what Thomas Carlyle calls "the dismal science" - economics. Some of you might be thinking now, "Oh great, he knows the price of everything but the value of nothing."

But seriously, I believe renewable energy will play a key part in U.S. energy and environmental policy, and I value it as an increasingly important energy source worldwide.

Domestic

We first set a good example here at home. The Energy Policy Act of 2005 included over $14.5 billion in tax incentives designed to increase use of renewable fuels from 2005 to 2015.

Then, the Advanced Energy Initiative announced in President Bush's 2006 State of the Union accelerated advanced energy technologies, including the Solar America Initiative, the Biomass/Biofuels Initiative, and the Hydrogen Fuel Initiative. By investing in these and other technologies, AEI will allow us to alter the way we power our homes and automobiles within 20 years.

Of course, you are contributing to these goals with your discussion this week of the hydrogen economy. President Bush announced his $1.2 billion Hydrogen Fuel Initiative in the 2003 State of the Union Address.

The goal was to reverse America's growing dependence on foreign oil by developing the technology needed for commercially viable hydrogen-powered fuel cells -- a way to power cars, trucks, homes, and businesses that produces no pollution and no greenhouse gases.

In addition to his Hydrogen Fuel Initiative, in his 2007 State of the Union Address, the President outlined his Twenty in Ten plan, which aims to reduce U.S. dependence on imported petroleum, promote use of alternative fuels, and improve U.S. energy efficiency and infrastructure.

Twenty in ten will increase the supply of renewable and alternative fuels by setting a mandatory fuels standard to require 35 billion gallons of renewable and alternative fuels in 2017. This is nearly five times the 2012 target now in law. In 2017, this will displace 15 percent of projected annual gasoline use.

We are focused on next generation biofuels technologies such as cellulosic ethanol from switchgrass and other non-food stocks. In addition to U.S. Department of Agriculture funding of $500 million per year, in 2007 the Department of Energy announced nearly $1 billion in funding for biofuels research and development.

As you can see, investment in renewable energy technologies is a very important component of the nearly $3 billion annual investment the United States makes in our climate change technology program.

Foreign and Finance

The President's plan calls for America's global leadership to encourage our friends and allies to consider similar renewable energy policies. And they are. According to a recent study by the United Nations Environment Program, investments in renewable energy reached a record $71 billion in 2006 - a 43 percent increase over 2005. A similar growth trajectory is expected this year.

While the U.S. and E.U. together accounted for more than 70% of this investment in 2006, there is growing activity in the developing world, especially in China, India and Brazil.

Chinese companies, in fact, are the second largest recipients of venture capital in 2006 after the United States. Last year, India was the largest net buyer of renewable energy companies abroad, mostly in European markets. And Brazil is the largest renewable energy market in the world. More than 75% of Brazil's cars are flex-fuel.

Recognizing the global nature and the serious challenge of these issues, the United States works collaboratively with nations across the globe.

Active initiatives and partnerships are identifying solutions by reducing greenhouse gas intensity, creating new investment, building local capacity, and removing barriers to the introduction of cleaner technologies. They are examples of transformational diplomacy in action.

Transformational Diplomacy is the term Secretary of State Condoleeza Rice has used to describe America's foreign policy.

What she means by this is our goal is to, and I quote: "work with our many partners around the world to build and sustain democratic, well-governed states that will respond to the needs of their people -- and conduct themselves responsibly in the international system.

One of the most dynamic ways in which we can achieve our transformational foreign policy vision is through the transformational energy climate in the world today.

President Bush addressed that climate when he spoke in September at the Major Economies meeting on Energy Security and Climate Change. He said: "Energy security and climate change are two of the great challenges of our time...the world's response will help shape the future of the global economy and the condition of our environment for generations to come."

The latter part of this statement is an important point, because energy policy and economic development are inherently linked; energy is a fundamental driver of development. Access to energy and energy services boosts crop production, drives industry, creates jobs, lights schools, and provides power to health facilities.

For less developed countries in particular, energy is a key enabler of growth. But it can be a hindrance to growth if it is not available, or only available at high prices. As we strive to help countries develop, we must help them reduce energy poverty.

We also know that cleaner, more efficient energy benefits the environment. U.S. energy policy seeks to enhance energy conservation and efficiency, and to diversity energy sources and diversify energy fuel types, which is where renewable energy comes in.

Partnerships

I want to briefly describe a number of these initiatives and partnerships to illustrate how we're advancing the use of clean, alternative, and renewable energy and changing the political environment to tackle greenhouse gas emissions by sharing technologies and best practices, and by encouraging more investment in renewable energy around the globe.

Some renewable energy initiatives change the environment for market adoption. The International Energy Agency (IEA) is a premier international source of energy analysis and policy recommendations.

The International Energy Agency offers a range of activities to help encourage the adoption of best practices in energy policy, including renewable energy.

A second initiative I want to mention is The Global Bioenergy Partnership (GBEP). This partnership was launched at Gleneagles in 2005 by the G-8 plus Brazil, China, India, Mexico and South Africa.

The Global Bioenergy Partnership is designed to power a cleaner future by supporting wider, cost-effective biomass and biofuels deployment, particularly in developing countries where biomass use is prevalent.

The United States is actively supporting the Partnership's work, including leading work on developing common methodologies for measuring the greenhouse gas benefits of biofuels.

A third valuable partnership is The Renewable Energy and Energy Efficiency Partnership (REEEP). This is a multi-stakeholder partnership whose goal is to expand the global market for renewable energy and energy-efficiency technologies by structuring policy and regulatory initiatives for clean energy and facilitating financing for energy projects.

To date, Renewable Energy and Energy Efficiency Partnership has funded over 100 projects in 44 countries that address market barriers to clean energy in the developing world and economies in transition.

Finally, in the category of initiatives to change the enabling environment for renewable energy is The International Biofuels Forum (IBF). The International Biofuels Forum is a joint project of Brazil, China, India, South Africa, the United States and the European Commission that was launched in March of 2007 to develop strategies to promote the sustained use and production of biofuels around the globe.

IBF is working closely with Global Bioenergy Partnership to create common standards and codes for bioenergy products, to consolidate and facilitate world trade.

In addition to changing the enabling environment, the U.S. government also pursues project-oriented initiatives focused on reducing greenhouse gas emissions directly. Let me mention four of them.

The first is The Methane to Markets Partnership (M2M). Methane to Markets is an initiative that promotes energy security, improves environmental quality, and reduces greenhouse gas emissions throughout the world.

Capturing and using "waste" methane provides an additional energy source that stimulates economic growth while reducing global emissions of this powerful greenhouse gas.

The United States, led by the State Department, has committed up to $53 million for the first five years of the Partnership. EPA estimates that this Partnership could recover up to 500-billion cubic feet of natural gas (183 million metric tons of carbon dioxide equivalent) annually by 2015.

The second project-oriented initiative is The Asia-Pacific Partnership on Clean Development and Climate (APP). This Partnership brings together seven major Asia-Pacific countries -- Australia, China, India, Japan, Republic of Korea, Canada, and the United States -- in an effort to address increased energy needs and the associated issues of air pollution, energy security, and climate change.

An innovative public-private sector effort, the Asia-Pacific Partnership was established to promote economic development, reduce poverty, and accelerate the development and deployment of cleaner, more efficient technologies.

What makes the approach unique is that Asia-Pacific Partnership activities are identified and supported using an innovative "bottom up" approach. By focusing on concrete knowledge and technology transfer, the 110 individual projects and activities included in the APP Task Force action plans are already yielding concrete results

Together, Asia-Pacific partner countries account for about half of the world's economic output, energy use, and greenhouse gas emissions. The Partnership provides the U.S. a unique opportunity to engage India and China in constructively moving their energy economies toward a more climate friendly direction.

The Asia-Pacific Partnership has created eight task forces to achieve the initiative's goals: One of these task forces works on renewable energy and distributed power generation.

Let me cite four examples where the State Department is currently providing cost-share funding to accelerate renewable energy use in India. We will:

Accelerate the commercialization of a solar photovoltaic(PV) system in 4 Indian states by working with local business and banks;

* Deploy a pilot one mega watt PV power plant with the Tata Group;

* Identify and remove technical barriers to the deployment of renewable energy in three Indian states through a project involving US and Indian regulators and utilities;

* Promote biomass and biogas power generation systems in rural areas of Central India.

* A third initiative: through the Agency for International Development, the U.S. government is collaborating with a number of nations on a number of renewable energy projects - from a wind mapping initiative in Pakistan to rebuilding hydropower facilities in Afghanistan to studies on the expansion of bio-diesel for transportation in the Asia-Pacific region.

Finally, the Overseas Private Investment Corporation (OPIC) issued this summer a Greenhouse Gas/Clean Energy Initiative.

This initiative is a four-part plan to address the issue of greenhouse gas emissions and increase support for clean energy and green technology. OPIC will (1) reduce the direct greenhouse gas emissions associated with projects within the OPIC active portfolio by 20 percent over a ten-year period.

They will also (2) cap transactional emissions, (3) support energy efficiency, renewable and clean technology, and (4) enhance accounting and transparency.

WIREC

In closing, I would like to speak to you about something dear to my heart. In March of 2008, the United States will host in Washington, DC the Washington International Renewable Energy Conference 2008 - WIREC.

WIREC will be the third global ministerial level event on renewable energy and will be an important opportunity for world ministers to show their commitment to renewable energy. The ministers will discuss how renewable energy advances our shared goals for increasing sustainable development and energy security while addressing the global challenge of climate change.

The United States is well positioned to host such an event, as I've mentioned America is a major producer of renewable energies such as biofuels, and we are a principal developer of many renewable energy technologies such as solar, wind energy and battery. The U.S. is also a substantial marketplace for renewable energy industries globally.

WIREC 2008 will provide an opportunity to advance renewable energy even more by bringing world leaders together to raise issues, exchange information, share experiences and best practices, and provide a global platform to highlight and promote strategies for significant development and adoption of renewable energy systems worldwide, including second generation biofuels.

Worldwide, enthusiasm for renewable energy has increased dramatically since the previous international renewable energy conferences - in Beijing, China in 2005 and Bonn, Germany in 2004. Oil prices have reached nearly $95 per barrel and there is an emerging price for carbon. Nations now more fully recognize the imperative to promote widespread adoption of renewable energy.

Together, the countries of the globe are responsible for collectively promoting energy security through long-term solutions that address the challenge of maintaining sufficient, affordable, and reliable energy supplies, while at the same time fostering sustainable global economic growth and environmental stewardship.

Let me repeat that: sustainable economic growth and environmental stewardship.

As Theodore Roosevelt said: "To waste, to destroy our natural resources, to skin and exhaust land instead of using it to enhance its usefulness...will result in undermining in the days of our children the very prosperity which we ought by right to hand down to them amplified and developed."

I believe growing economies and sustainable resources can be complementary, not competing interests. I believe renewable energy is the key to the success of both these interests. And I believe that when we achieve the success of sustainable energy and thriving global economies, we'll have taken a big step toward our foreign policy vision to help citizens of the world "better their own lives, build their own nations, and transform their own futures."

Released on November 26, 2007

ENDS

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