Weaning ourselves off our oil addiction

Governor Bill Richardson

I'd like to talk to you about the threats to America's energy security, and our generation's challenge to build a new economy based on clean energy. It's easy to say the US is addicted to oil. Understanding the stranglehold of that addiction-and constructively working to end our "habit"-is hard. 

Oil dependence is America's Achilles' heel, and it's allowed our foreign policy to go weak in the knees. Our oil addiction limits our power to deter Iran's Nuclear Program, to challenge Russia when it behaves badly, to respond effectively to anti-American rhetoric from Venezuela's president, to push for reform in Nigeria, or to build a coalition to stop the genocide in the Sudan. 
And while America's last two wars in the Middle East weren't only about oil, our dependence on oil is too often the unspoken subtext that compels us to act and causes others to view our foreign policy with suspicion. 

Almost 70 percent of the world's oil reserves are concentrated in the Middle East or in OPEC nations. The cartel's ability to control oil prices leaves consumers, investors and policy makers perpetually off-balance: Oil price volatility with highs and lows so divergent that they either stunt the world economy or kill investment in and development of alternative fuels.
As a former Secretary of Energy and as the governor of an oil and gas producing state, I've come to know some of the needs of the energy industry. 

Energy companies and investors base decisions, not on political terms of two, four or eight years, but in generational terms of 30 years or more.  I don't believe the energy industry fears change. 

But to make the billion and trillion dollar energy infrastructure and resource development investments, you don't need a conflicted vision of next year-you need leadership and consistent vision of the next fifty years.

I believe it's time for America to get off of its knees and stand up for a new energy future. We should lead the world in reducing greenhouse gases and in preparing for the post-oil economy of the future. 

Gradually, but deliberately, we can wean ourselves of our oil addiction.  This is not a task government can do alone. Government's role, indeed its obligation, is to provide a clear vision, strategic investment in technology development, incentives to move forward, and, most importantly, legal and regulatory certainty. 

Government investment in new technologies can serve as a sparkplug for energy "invention" but it is the role of the investment community to transform those inventions to marketplace "innovations"-and the role of the business community to move innovations from the business plan stage to true technology diffusion.    

Only when government and industry work together as partners can we successfully link together all these pieces of the energy innovation chain-pushing the nation beyond the tired divisions of "good jobs OR the environment" and moving to "even better jobs AND a clean environment." 

I'd like to lay out a part of my vision for regaining America's energy security-a combined program of business innovation and government investment comparable in scale to the Manhattan Project to split the atom, or the Apollo Project to put a man on the moon. Our goal should be bold: to reduce oil imports by 40 percent AND replace one quarter of liquid fuels with bio-fuels by 2025, and reduce greenhouse gas emissions by 75 percent by 2050.

We must expand the use of alternative and renewable energy sources. We should significantly ramp up federal investments in research and development and dramatically improve its effectiveness, starting with some kind of funding certainty over time to make the government more attractive and reliable to its industry research partners. 

I would also specifically carve out a new program of federal investment in "early-stage technology development" to help bridge the gap between "invention and innovation."  Too often the federal government stops short because it is "commercialization-averse," and venture capitalists don't pick up the ball because they are "risk-averse."  Effectively bridging this "valley of death" is essential to our energy future. 

And in terms of global warming, we must ask everyone-citizens, government and businesses-to do their part to dramatically reduce their emissions. This doesn't just make sense for our air, it's good business. BP estimates it has saved $600 million to $1 billion over the last several years by addressing climate change and methane loss. So, indeed we can afford to change. 

For the Record is an excerpt of Governor Bill Richardson's speech to an energy conference at investment banking firm Bear, Sterns in February 2007. Richardson is the Governor of New Mexico and former U.S. Secretary of Energy.

September/October 2007