George Shultz on plug-in hybrids; Sen. Lieberman urges US-China R&D including PHEVs
- Here's George Shultz, former U.S. Secretary of State, now at the Hoover
Institution at Stanford, said on the PBS Charlie Rose show that aired Dec.
Charlie Rose: I want to move to this question for foreign policy. Should it
be a tentative American foreign policy to reduce dramatically our
dependence on Middle Eastern oil?
George Shultz: Yes.
Rose: And how do we do that?
Shultz: You do it basically by figuring out alternative ways to do the
things that are done with the oil now. I think it's okay to try to get more
oil in the U.S., and more gas in the U.S. and Canada and so forth, but I
think the basic thrust has to be on using less of it. There are all sorts
of ways to do it.
Rose: Energy conservation.
Shultz: Alternative ways of getting the job done that you want to have
done. I'll give you an example. Hybrid cars are catching on. Why? Because
they use less oil. And it's high-priced now, so the people are doing that.
But I think the real payoff will come when you have a battery that can go
in the hybrid car that is chargeable and which can carry that car for, say,
40 miles. So you have what you might call a plug-in hybrid.
And you could get in your car and drive for, say, 40 miles -- and most
trips are less than that. You're back at your house after 40 miles. So if
you had that, look at the amount of gas that you wouldn't be consuming when
(Rose changes the topic...)
China-U.S. Energy Policies: A Choice of Cooperation or CollisionRemarks by
Senator Joseph I. Lieberman
quick annotated news story on the event can be found at:
transcript of speech and following discussion at Council on Foreign
Relations ( the full document has many other high-level questioners)
[Rush Transcript; Federal News Service, Inc.]
Speaker: Joseph Lieberman
U.S. Senate (D-CT)
Presider: William F. Martin
Chairman, Washington Policy and Analysis, Inc.; former deputy
secretary of energy
November 30, 2005
Washington, District of Columbia
Council on Foreign Relations
SEN. JOSEPH LIEBERMAN: (In progress.) This morning in about an
hour, the president will be speaking at the Naval Academy in Annapolis to
define our strategy for victory in the war against terrorism, and
particularly in the war in Iraq. But I want to argue to you today what I
would guess most of you in the room believe; that notwithstanding the
change in our own world on September 11th, the answer we would have given
on September 10th is still largely correct and certainly still true, that
appropriately managing our relationships with an emerging, complicated
China booming economy, growing investments in their military strength,
different values than we have in some senses and yet remarkably similar
circumstances in other senses that that remains and must remain a
critical priority of American foreign policy.
Today I want to discuss what I believe is one of the biggest sources
of potential friction between the U.S. and the PRC, and that is our global
competition for oil. The U.S. and China are now the worlds number one and
two consumers of oil respectively, with Chinas need growing as rapidly as
its economy is. This could lead to Sino-American confrontations over
oil that could in the years ahead threaten our national security and
global security unless each of our nations two great nations develop
and employ new technologies that will reduce our dependence on oil.
And let me point out here that though our economic circumstances are
different, and painting with a broad brush if you will allow me to do that,
there is a very comparable reality here that both countries face, which is
that each of our energy systems depends on a form of energy oil that
neither nation has naturally in abundance. And in fact, in some senses the
pressure on the Chinese will be even greater in the years ahead because
their economy is growing so rapidly. And Ill get to some numbers on
that. Well, Ill say it right now. In the next 20 years, estimates show
that the Chinese demand for oil will double as their economy
grows. Estimates also are that they will need to obtain two-thirds of that
from outside of the PRC itself.
So what I want to say today is that it is time for the U.S. and
China not only to recognize the similarity of our oil dependency status and
the direction competition may take us, but to begin to talk more directly
about this growing global competition for oil so that we can each develop
national policies and cooperative international policies, even joint
research and development projects, to cut our dependency on oil before the
competition becomes truly hostile.
The U.S.-China energy engagement that I foresee could be in one
sense the 21st century version of what arms control negotiations with the
Soviet Union were in the last century, but we got to start those
discussions before the race for oil becomes as hot and dangerous as the
nuclear arms race between the U.S. and the Soviet Union did in the last
And Id point out what I think is a fortuitous difference in these
two races, if you will. With arms control, we were focused on reducing
dangers by destroying weapons systems. Here, we have a chance to reduce
dangers by separately and jointly building new energy and transportation
systems based on alternative fuels and new technologies to power our vehicles.
Let me quote from Bob Zoellick, the deputy secretary of State, who
recently told the National Committee on U.S.-China Relations and I
quote: Picture the wide range of global challenges we face in the years
ahead terrorism and extremists exploiting Islam, the proliferation of
weapons of mass destruction, poverty, disease and then ask whether it
would be easier or harder to handle those problems if the U.S. and China
were cooperating or were at odds. End of quote.
Well, thats a question that answers itself and should lead us in
the direction of exploring each and every cooperative opportunity with
China that we can.
Then Zoellick went on, relevant to the point Im trying to make this
morning, to talk about how Chinas drive and I quote him here to lock
up energy supplies end of quote could put it on a collision course
with the United States and other nations. Absolutely right. Thats
exactly my point. And let me give you a few examples of what I would call
early but clear signs of an aggressive, nationalistic understandably
nationalistic Chinese international energy policy.
The U.S. can and should make concrete proposals for joint projects
with China, which would break both nations or help break both nations
dependence on foreign oil. As the worlds two biggest consumers of oil,
again, it makes sense for us to work together on this. But in the
meantime, the U.S. has a responsibility to take our own steps to get our
appetite for oil under control because our national security, not to
mention our economic well-being and environmental health, require that we
I cite briefly a recent report by the International Energy Agency,
which says that global demand for oil, now about 85 million barrels a day,
will increase by more than 50 percent to over 130 million barrels a day
between now and 2030 if nothing is done. Chinas oil consumption surpassed
Japans in 2003. Its now at 6.5 million barrels a day. By 2025, that
demand, as I said before, is projected to more than double, to 14.2 million
barrels a day.
If we do nothing, United States demand for oil by that same year,
2025, will increase 8.7 million barrels a day, a 40 percent increase,
almost double, to about 28 million barrels a day.
As the authors of the IAEA report say, and here I quote, We are
ending up with 95 percent of the world relying for its economic well-being
on decisions made by five or six countries in the Middle East, end of
quote. And that means practically that we could be one terrorist attack or
political upheaval or a rogue leaders anti-American decision away from an
overnight price spike for oil that would send the global economy tumbling
but also send the industrialized world scrambling for oil, with the U.S.
and China leading the scramble.
The fact is that history tells us that wars have been fought over
such competitions for natural resources. In fact, as you all know, exactly
such a competition is one of the factors that led to Pearl Harbor and World
War II. So for the good of our nation and global stability, weve got to
lead America into a new energy age by transforming, particularly our
transportation system because it is there that we consume 70 percent of our
demand for oil. And it is these facts that recently led 10 United States
senators of which Im proud to be one, five Republicans and five Democrats
not just bipartisan, but from every ideological point on the spectrum and
every region of the country who recently introduced what we call the
Vehicle and Fuel Choices for American Security Act of 2005. This is going
to put us on a path to energy diversity and greater strength, energy
independence by reducing our demand for oil to power our vehicles.
Let me just give you a sense of the range of my colleagues. Im
proud to say Sam Brownback of Kansas was my main co-sponsor, Even Bayh,
Jeff Sessions, Ken Salazar, Norm Coleman, Dave Pryor, Lindsey Graham, Bill
Nelson, Dick Lugar and Barack Obama. Now, thats a very broad group of
people. Its a bold program, which Ill describe in a moment, but the door
that brought us all together was not just economic concern, but concern
about the way in which our oil dependence can no matter how strong we are
militarily compromise our national security.
Very briefly, the bill starts by making it our national policy to
cut our oil consumption by 10 million barrels a day, progressively to that
total and I think we can even go higher in 25 years. It will this
goal will be reached by the diversification of our energy sources and the
use of new technologies. The fact is that gasoline is not the only
portable source of energy stored energy. Tons of agricultural materials
and agricultural waste materials like corn, of course, sugarcane and
switchgrass can be used to create billions of barrels of new fuels on
acres on millions of acres of both active and otherwise idle cropland.
And this is not a fantasy, a pipedream. Its a vision and a
goal. And my most tangible evidence here is Brazil. The worlds fifth
largest nation gets 80 percent of its transportation fuel from
sugarcane. In a few years, American farmers could be measuring production
in barrels of energy as well as bushels of food.
Let me talk about the new technologies which are out there. Theyre
not exotic, including not just the hybrids for which there are waiting
lines at most car dealerships in this country today, but the use of
alternative fuels in hybrid electric plug-ins. Electricity, a sector that
relies on oil to fuel just 2 percent of its output, can further lower our
oil dependence if we use it to power our cars. When I first heard about
this, it sounded impractical. I was about to use the unsenatorial term,
flaky. But you know, were all plugging in our cell phones and our
blackberries every night, and we can get to the point where were plugging
in our cars as well at a time of day when the demand on the electricity
grid is lower. And again, most of the electric power is not produced by oil.
To create the market for this new era of vehicles and reduction of
our consumption of oil, this legislation requires that by 2012, 10 percent
of all vehicles sold in the U.S. be hybrid, hybrid-electric plug-in or
alternative fuel and biofuel vehicles. That number will rise by 10 percent
a year until, by 2016, we require that 50 percent of all vehicles sold in
United States be these energy alternative vehicles.
We also require that about a quarter of the total federal fleet
purchases be advanced diesels, hybrids or plug-in hybrids by 2016, 10 years
from now. In fact, that 75 percent be those or biofuels. This can lead to
some really exciting options that are practical. Plug-in hybrid vehicles
that Ive talked about would be able to use their batteries exclusively for
the first 30 miles of a trip. While Americans drive about 2.2 million
excuse me 2.2 trillion miles a year, the vast majority of those trips are
less than 10 miles. That means a plug-in hybrid would use just about zero
gallons of gasoline or other combustible fuel for the vast majority of car
trips that are made.
Passage of this legislation, I believe, would go a long way toward
providing the U.S. not only with greater energy diversity and independence,
but for all the reasons Ive said with greater national security.
As we establish our own credibility and commitment to energy
diversity, I think it is critically important that we set up an
accelerated, cooperative technology research and development program with
China. We still have time. As a recent report of the Congressional
Research Service noted, and I quote, Because China does not have an
expansive oil infrastructure, it may have less vested interest in
maintaining an oil-based economy, particularly if there are viable
alternatives, end quote. But this window of opportunity thats going to
close before long if we dont take advantage of it.
I propose that we expand the U.S.-China Policy Dialogue, established
last year with a Memorandum of Understanding between our two nations, to
specifically create joint programs for the kinds of new vehicles and new
fuels that Ive talked about. For instance, as we work to turn our idle
cropland into fuels, why not share that knowledge and capability with the
Chinese, and why not ask that they do the same for some of the steps that
they are beginning to take for energy diversity and independence. Lets
also work with them on alternative automobile technologies, while we have a
window of time, before millions and millions of additional Chinese drivers
hit the roads with gas-guzzling, gas-only vehicles.
Thank you very much. (Applause.)
WILLIAM MARTIN: Thank you, Senator. I think I agree with every
sentence you had in there, especially Bob Zoellicks. When Bob said
something about an aggressive nationalistic policy to lock up oil, well,
you know, most of the world thinks thats what were doing. And it was so
strikingly clear that Ive heard that overseas, and it didnt refer to
China, it referred to the United States.
LIEBERMAN: Sure. Right. Again, I agree with just about everything
youve said. In other words, these are stepping back and looking at
this, these are two nations that are acting, quite understandably, in their
national interest. I would say that probably we havent done quite as well
as your vision of the Chinese vision of us would be. But it does make a
point. I mean, we have an oil-dependent country. We have limited
resources of oil left. And in any case, even if we depend on our own oil,
we are we pay prices set in the global market. So these are two nations
now following quite similar international oil acquisition policies out of
And what Im essentially saying this morning just to say it
quickly one more time if we let it go, this could end up in real military
conflict, not just economic conflict. So thats why I said at one point
these aggressive policies, from a Chinese point of view, are quite
understandable and logical, these policies to lock up energy, just as ours
are at this point. But thats why weve both got to stop it and say that
there is an alternative. And we got to break out of that mental box. And
the alternative is these alternative fuels and new technologies, like
hybrids and hybrid plug-ins.
Bud McFarlane is here. And remind me the name of the commission
the National (chuckles) you and I both! Are we having a shared senior
moment here, Bud? (Laughs; laughter.)
MR. McFarlane: The National Energy Commission.
LIEBERMAN: The National Energy Commission, I guess, came up with
but Bud is part of a group called Set America Free. Quite an interesting
a remarkable group. Jim Woolsey, Bud, Frank Gaffney, George Shultz. You
can go on and on a lot of people in this room. Democrats, Republicans,
but united particularly because theyre national security experts and
hawks. And, you know, theyve cited this as a problem weve got to break
out of for our own national security interests. As I said, thats what
motivated the senators, the 10 who have joined.
BUD MCFARLANE: Senator, I wanted to commend you and Senator
Brownback and your cosponsors for having put in the bill last week.
I just wanted to offer that one of the selling points that is
perhaps useful to you is if we did what youre recommending, in terms of
climate change it would go well beyond Kyoto standards in reducing
I wanted to ask you, as a political judgment, what is your prognosis
about the bill? Do you think it will get through? And if it does, do you
think the president will sign it?
LIEBERMAN: Im hopeful, because this was very unusual to start with
these 10 senators. You get a sense of the range ideologically,
geographically, not to mention in terms of bipartisanship. So it speaks to
a growing concern. Its even more significant in some ways because it
follows the passage of energy legislation during the summer. And, you
know, we have a theres a sort of cyclical quality to legislating. You
build up over years. Its been a long time since we had an energy bill
just passed, and yet were back at it again. Why? Because of Hurricane
Katrina and the enormous energy price spikes that occurred the
three-dollars-plus a gallon for gasoline. Youve got Pete Domenici,
chairman of the Energy Commission Committee; Jeff Bingaman, looking at a
second energy bill right after the first one because of these new realities
that were facing. Its going to be a tough winter for a lot of people who
heat with oil and gas, but particularly oil.
So we think weve got an opportunity to make this happen sooner than
normally would be the case. And right now weve asked the Energy Committee
Senators Domenici and Bingaman to hold a hearing on this, maybe
December, but certainly after the first of the year, and then bring this
And if not, were committed to attaching it as an amendment to
something moving through the Senate sometime early next year. We think
its really that critical. And, you know, obviously I dont know what the
president would do, whether hed sign it, but I dont see anything in this
that would inherently stop him from doing that, particularly in light of
the sense of new reality and new crisis that were facing.
And I you know, again, I take heart from the fact that weve got
Brownback, Sessions, Lugar, et cetera, Coleman, with us on this bill. Its
a good bunch of Republicans.
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Felix Kramer fkramer@...
Founder California Cars Initiative
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