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George Shultz on plug-in hybrids; Sen. Lieberman urges US-China R&D including PHEVs

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  • Felix Kramer
    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. 22, 2005:
    Message 1 of 1 , Jan 2, 2006
      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.
      22, 2005:

      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
      you traveled.

      (Rose changes the topic...)

      China-U.S. Energy Policies: A Choice of Cooperation or Collision—Remarks 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
      Washington, DC

      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 world’s number one and
      two consumers of oil respectively, with China’s 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 I’ll get to some numbers on
      that. Well, I’ll 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 I’d 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, that’s 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 I’m trying to make this
      morning, to talk about how China’s 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. That’s
      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 world’s 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
      do that.

      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. China’s oil consumption surpassed
      Japan’s in 2003. It’s 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 leader’s 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, we’ve 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 I’m 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. I’m
      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, that’s a very broad group of
      people. It’s a bold program, which I’ll 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. It’s a vision and a
      goal. And my most tangible evidence here is Brazil. The world’s 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. They’re
      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, we’re all plugging in our cell phones and our
      blackberries every night, and we can get to the point where we’re 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 I’ve 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 I’ve 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 that’s going to
      close before long if we don’t 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 I’ve 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. Let’s
      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 Zoellick’s. When Bob said
      something about an aggressive nationalistic policy to lock up oil, well,
      you know, most of the world thinks that’s what we’re doing. And it was so
      strikingly clear that I’ve heard that overseas, and it didn’t refer to
      China, it referred to the United States.

      LIEBERMAN: Sure. Right. Again, I agree with just about everything
      you’ve 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 haven’t 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 I’m 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 that’s 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 that’s why we’ve 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 they’re national security experts and
      hawks. And, you know, they’ve cited this as a problem we’ve got to break
      out of for our own national security interests. As I said, that’s 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 you’re recommending, in terms of
      climate change it would go well beyond Kyoto standards in reducing
      greenhouse gases.

      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: I’m 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. It’s even more significant in some ways because it
      follows the passage of energy legislation during the summer. And, you
      know, we have a — there’s a sort of cyclical quality to legislating. You
      build up over years. It’s been a long time since we had an energy bill —
      just passed, and yet we’re 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. You’ve 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 we’re facing. It’s going to be a tough winter for a lot of people who
      heat with oil and gas, but particularly oil.

      So we think we’ve got an opportunity to make this happen sooner than
      normally would be the case. And right now we’ve 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
      bill out.
      And if not, we’re committed to attaching it as an amendment to
      something moving through the Senate sometime early next year. We think
      it’s really that critical. And, you know, obviously I don’t know what the
      president would do, whether he’d sign it, but I don’t 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 we’re facing.

      And I — you know, again, I take heart from the fact that we’ve got
      Brownback, Sessions, Lugar, et cetera, Coleman, with us on this bill. It’s
      a good bunch of Republicans.


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      Felix Kramer fkramer@...
      Founder California Cars Initiative
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