Speeches and Remarks 2006

Keynote Address by Robert O. Blake, Jr. U.S. Embassy Charge d'Affaires at the Conference on "U.S.-India Energy Efficiency Technology Cooperation" Hotel Maurya Sheraton New Delhi, India May 2, 2006

As prepared for delivery

May 2, 2006

Welcome.  I would first like to recognize Secretary R.V. Shahi of India's Ministry of Power; Director General V. S. Verma, with the Bureau of Energy Efficiency; Gene Eckhart Director of the U.S. National Electrical Manufacturers Association; Graham Pugh of the U.S. Department of Energy; George Deikun, Mission Director of the U.S. Agency for International Development (USAID) in India; and distinguished participants from India and from the United States.  Welcome to U.S.-India Energy Efficiency Technology Cooperation Conference.

I would also like to thank all those, particularly the private sector organizations, who have been involved in planning this conference.  These include the National Electrical Manufacturers Association of America and the Green Business Center of the Confederation of Indian Industry.     

And I would like to thank my colleagues at the U.S. Department of Energy and at India's Ministry of Power for their unstinting efforts in making this event possible. I also want to express appreciation to USAID for their support and leadership which was critical in planning and organizing this superb event.  Finally, I would like to recognize the stellar role of the CII-Green Business Center for its dedicated effort in organizing this event.

I think we will see all of those efforts pay off over the next two days. This conference looks to be an exciting, even groundbreaking, event that will lay important foundation for further U.S.-Indian cooperation on energy efficiency technology.

Ladies and Gentlemen, the last twelve months have marked a period of perhaps the most significant progress ever in Indo-U.S. relations, thanks to the vision and engagement of President Bush and Prime Minister Singh. 

During President Bush's landmark visit to India in March, he and the Prime Minister announced a number of initiatives that collectively demonstrate the unprecedented scope of cooperation between our two great democracies and President Bush's conviction that our partnership with India will be one of our most important in the 21st century.

Energy is one area that has seen dramatic progress in the last year.         

The U.S.-India Energy Dialogue was launched in May 2005 under the leadership of U.S. Energy Secretary Samuel Bodman and Deputy Planning Commissioner Montek Singh Ahluwalia as part of President Bush's call for a transformed Indo-U.S. relationship, premised upon a new strategic alliance based on energy security and energy cooperation. 

The goal of the Dialogue is to promote increased trade and investment in the energy sector by working with the public and private sectors to further identify areas of cooperation and collaboration.

Both India and the United States have shared interests in energy security, sustainable energy development, the deployment of clean energy technologies and stable energy markets and we recognize as mutual interests are best served by working together in a collaborative fashion to ensure stability in global energy markets. 

Much attention has focused on the civil nuclear energy cooperation initiative, which is important, because of its potential to advance energy security, enhance the global nonproliferation regime, further environmental protection, and foster economic and technological development in both of our countries.

But the Energy Dialogue has produced several other initiatives that are critical to the energy security and environmental performance of both countries.   They cover critical areas such cleaner coal use, expanded use of renewable energy, and greater reliance on energy efficiency. 

The U.S. India Energy Dialogue consists of five Working Groups, including for:

• Power and Energy Efficiency, which has organized this conference
• Civil Nuclear Energy
• Oil and Gas
• Coal and
• New Technology and Renewable Energy

The Power and Energy Efficiency Working Group is co-chaired by the Indian Ministry of Power and on the U.S. side by the U.S. Department of Energy and US Agency for International Development (USAID).  This working group has been building on the work of the USAID Mission here in India and the work of the Department of Energy in the United States and the accomplishments of the Indian government and industry. 

The goal of the Power and Energy Efficiency Working Group is to facilitate the exchange of information on technology and regulatory policies and develop areas of cooperation that promote technologies to enhance energy efficiency.  This week's conference is an important step toward achieving this goal. 

In the short-term, there are large-impact and low cost opportunities for cleaner energy in the United States and India, based on expanded reliance on energy efficiency, which can moderate our need for imported oil and natural gas.  Better energy efficiency can help to stem rising costs of electricity and reduce greenhouse gas emissions and pollution.

The way forward

A strategic Indo-U.S. partnership in building the capacity to plan and implement energy efficiency will help advance India's energy security and mitigate the environmental impact of rapid energy growth, especially in light of India's heavy reliance on coal.

The conventional wisdom has been that energy consumption by commercial buildings does not have much impact on energy imports.  But that conclusion was based on a past focus on oil imports.  In fact, India and the United States now face the prospect of sharply increased natural gas imports as well as growing demand for this clean-burning fuel outpaces domestic production. 

Because commercial buildings are significant consumers of natural gas for comfort conditioning as well as for electric power, conservation in the commercial building sector is now becoming an energy security issue, as well as an environmental and economic issue

A related factor is the increasing pressure on power utilities to reduce peak demand.  Because buildings are the dominant electricity consumers in our country, utilities are increasingly looking for ways to flatten peak demand. Efficiency is a key aspect of reducing this demand.

The purpose of this Energy Efficiency Conference is to explore the barriers to implementation of energy efficiency in India and discover ways in which such barriers can be overcome.

This conference also provides an important venue to bring U.S. and Indian companies together and to facilitate private sector partnerships in the area of energy efficiency. Working together, U.S companies and Indian companies can simultaneously make important contributions to improve efficiency in both countries.

I want to identify three key forces at work in the marketplace.  Government works most effectively when it acts with a full appreciation of the realities, priorities, and power of markets. 

The first is that the buildings and industrial sectors still offer enormous opportunity for increasing energy efficiency.  In the United States buildings consume 39% of the total U.S. energy, while industrial production consumes 33%.  So there is great opportunity for change and for business.  Commercial building growth is robust as the U.S. Department of Energy's Energy Information Agency (EIA) estimates commercial square footage will increase by 1.7% per year through 2025, so that commercial energy use is projected to grow at an average annual rate of 2.0% between 2005 and 2025.

Secondly, market reality is that potential returns from energy efficiency are going to become even greater in the future.  As energy prices continue to rise, particularly natural gas prices, the potential economic and environmental gains from energy efficiency measures will rise as well.  Efficiency not only can slow growth in natural gas demand for heating and cooling but also can dampen demand from the electric power sector.

Finally, an emerging market reality is that the marketplace increasingly rewards sustainable products and business practices.  Even when these products and practices do not have short-term economic gains, they are seen as serving longer-term investor interests. 

Companies are adopting sustainable business practices for the goodwill they generate among consumers, and because they reduce liabilities.  These efforts are also supported by investors.   For example, Goldman Sachs has announced policy-promoting activities to reduce carbon intensity.  The firm will invest $1 billion in projects that generate energy from sources other than oil and gas, and will establish a center to study how the free-market system can solve environmental problems. 

Together, the market forces I have outlined give great impetus to the energy efficiency field.  To complement these market forces, we finally have a national energy policy that can support and accelerate forward progress. 

The U.S. Government's top three priorities for energy efficiency are to:

  1) Increase the efficiency of buildings and appliances,
  2) Reduce the energy intensity of industry, and
  3) Lead by example through the government's own actions.

The U.S. Government has a multi-pronged approach to delivering on its mission of making industrial, residential and commercial buildings more energy-efficient, productive and affordable. 

This approach includes:

• Conducting research and development on building components and systems to continually raise the bar on performance;
• Carrying out a mandated role in setting energy efficiency codes and standards for appliances and building components; and
• Partnering with manufacturers, retailers, universities, and others to validate technologies and to introduce them to the marketplace. 

You will hear more about many of these policies and partnerships during the two-day conference.

Since 2001, the U.S. Administration has spent nearly $10 billion to develop cleaner, cheaper, and more reliable alternative energy sources.  The good news is that America is on the verge of breakthroughs in advanced energy technologies that could transform the vital energy sector. 

Another important part of the U.S. Government's approach to energy efficiency is the Federal Energy Management Program (FEMP).  FEMP is designed to demonstrate federal leadership and stimulate market demand for advanced energy technologies.  By implementing energy efficiency practices into federal buildings, including the U.S. Embassy here in Delhi, FEMP increases energy security, reduces energy costs, and diminishes the environmental impact of government.

In addition, the United States Congress recently passed The Energy Policy Act of 2005, signed into law by President Bush on August 8th.  The Act is the first new energy bill in over a decade.  This landmark legislation recognizes that we need more affordable and reliable sources of energy to make sure our economy continues to grow.  It also recognizes that energy is a national security issue, and that we must slow our growing dependence on imported fossil fuels.

This law includes several new regulations on energy efficiency including standards for 14 large appliances and stricter standards for others, tax incentives for energy efficiency improvements in homes, commercial buildings, and public buildings, and tax incentives for purchasing hybrid or alternate fuel vehicles.

The bill also includes new funding and research into cutting edge technologies that will help our nation do more with less energy.  We have invested in portfolios of long-term, R&D, and partnered with industry on applied research that shows substantial energy efficiency gains are possible with today's technologies.  Ultimately, these R&D investments target a bold goal:  net zero energy commercial buildings by 2025.  These buildings will be 60-70 percent more efficient than current ones and will utilize renewable energy to meet their remaining energy requirements.

To further build upon this progress, President Bush outlined an Advanced Energy Initiative in his most recent State of the Union Address to help break America's dependence on foreign sources of energy.

The initiative proposes a 22% increase in clean-energy research at the U.S. Department of Energy, with emphasis on changing the way we Americans power our homes, businesses and automobiles.  In particular, President Bush's initiative proposes ways to speed up research in solar photovoltaics so that they become cost-competitive by 2015 and to expand access to wind energy.

I want to conclude by emphasizing the key role that market forces, especially market-based pricing for energy, play in promoting energy efficiency.  When prices paid for energy do not reflect production costs and supply and demand, that energy is usually allocated or used in less efficient ways, and even wasted. 

Market based prices -- that reflect opportunity costs, costs of production, and supply and demand -- will stimulate development of and investment in energy efficiency technologies as both residential and business consumers recognize and enjoy the monetary benefits of more rational energy use.

Again, I wish you all the best success in your discussions this week and I look forward to hearing the result of this important and groundbreaking event.