Apollo's Fire | Rep. Jay Inslee & Bracken Hendricks | Talks at Google

Good afternoon. I'm Michael Terrell. I work on the energy and climate Change team@google.org and it's my great pleasure to welcome Congressman Jay Inslee and Bracken Hendricks here to Google today to talk about their book Apollo's Fire. Congressman Inslee is one of the leading energy and climate change experts in the U.S. congress. He serves on the House Select Committee on Energy Dependence and Global Warming and also on the House Energy and Commerce Committee, which is going to be responsible for drafting global warming legislation. He's been a longtime champion of legislation that supports a transition to a clean energy economy, something that we have a keen interest in here at Google. And he's represented the 1st district of Washington state since 1999 and from 95 to 97 represented the 4th congressional district. Bracken Hendricks is a senior fellow at the center for American Progress, which is a leading think tank in Washington, D.C. he works on global warming solutions, energy independence and economic issues. He was the founding executive director of the Apollo alliance, which is a very unique coalition of environmental, business, labor and community leaders working on energy issues. Before that, he worked in the Clinton administration as a special assistant to Vice President Gore and also at the Department of Commerce's national oceanic and Atmospheric Administration. And with that, I'll turn it over to you guys. And welcome.

Thank you. Thanks a million. Thank you. My name is Jay Inslee. I'm from Bainbridge Island, Washington. I'm absolutely thrilled to be here. I can report that due to your genius, now all of my constituents can go on the Internet and find out every boneheaded thing I've ever said. It's a wonderful, wonderful tool for democracy and I appreciate it. This is I've had a remarkable Bracken Hendricks and I, we co wrote this book. We've been talking to cities around the country. But I'm going to deviate a little bit from what we usually talk about because I've had pretty the last three days have been pretty extraordinary for me because here I am at the very cutting edge of the New World Order, so to speak, that is being created by you and your colleagues here. And three days ago I was at an Old World Order and I've seen how they both contrast and compliment each other. And three days ago I was in Dar es Salaam, India, meeting with the Dalai Lama. And I went there with Speaker Nancy Pelosi, who's doing a great job for us on clean energy. We went there basically to try to talk to India and England about how we're going to eventually get a global warming agreement so that we can move to a clean energy future. But when I met with the Dalai Lama, I didn't think we were going to be talking to the Dalai Lama about global warming and energy issues. But we had lunch with him and one of the things he talked about was the fact that his people of Tibet are threatened not only by Chinese repression, but in fact by global warming, by the fact that all of us are putting gigatons of carbon dioxide in the air. And what he told us is happening in Tibet is that his people are going to be some of the first victims of global warming in the world. Because of course, the Tibetan Plateau is very dry and, and they have difficulty accessing drinking water even now. And it will get much worse. People in India told us that the Ganges river may be dry in 32 years. And we went to the memorial to Mahatma Gandhi, whose ashes were strewn in the Ganges River. And the thought that 32 years from now there may be no Ganges river at certain times of the year is pretty stunning. Now I mention that because, you know, the Dalai Lama is of an ancient tradition, but he recognized that the world threat exists not just in California, not just in Washington, where we're losing our snowpack, not just in Glacier national park where the glaciers will be gone in 50 years. They're going to have to rename it the park formerly known as Glacier. Not just in the Arctic where we had a million square miles the size of six Californias just disappear this summer. Not just yesterday, you said, or the day before yesterday when you saw the breakup in Antarctic ice shelf occurring. Thanks to your great work, you can see that now all of this is happening around the world. So what I found out in the last week is that the world is united in a potential doomsday scenario is probably the wrong language to use. But when you start to look at the sequelae of this, it is truly breathtaking to see what we are up against now. Bracken and I, about a year ago, ask ourselves, and I've been asking myself for years in the Congress, because I've been working for years to try to get the US Congress to adopt a program that will really move on clean energy. And we ask ourselves, why wasn't the United States moving on clean energy? And the conclusion we reached is that people were in fear. They were afraid that we could not solve this problem with technology. So about a year and a half ago, we decided to create a vision statement about what could be possible by using our heads to solve this problem. And we called this book Apollo's Fire that we wrote because it is our belief and I believe it is a well founded belief that two things exist. Number one, it should be America's destiny to create the clean energy technologies upon which the world will depend to solve the problem of global warming and the security problems we face of being addicted to Middle Eastern oil with all of the security problems that caused. And we believe that it is truly America's destiny to do this because frankly we have been the most innovative society in the face of the planet with all due respect to the Egyptians and their pyramids. So we think that this is a destiny of ours, number one. And number two, we believe that we still have in our character and in our intellectual capital and in our Even in Washington D.C. ultimately the same right stuff that we had during the original Apollo project. When Kennedy said we're going to go to the moon in 10 years and for those of us who were alive at the time, he said that in 1961 he said we're going to go to the moon in 10 years. That was an audacious statement. That was gutsy, that was hanging it all out because at that time our missiles were blown up on the launch pad, the Russians were way ahead of us by a factor of throw weight, by two or three. We hadn't even invented Tang yet. So we were way, way behind the curve. But when Kennedy created that vision and that challenge, Americans responded. We believe now and we've written a book that basically says here is a challenge that we are capable of surmounting if we will have the confidence in ourselves that the Googles of the world have demonstrated is well founded and we ought to have the optimism that the Googles of the world understand is well founded. And let me mention my little hometown team of Microsoft too. I don't want to leave out my friends in Redmond that I represent. So this is an optimistic statement that we have written and I want to share with you why I was optimistic when I started writing this book and I am twice as optimistic now. I want to share with you a day of my life in California about four months ago. And this day was emblematic of what I learned as we were writing this book. I came down here to speak to an environmental journalist convention at Stanford and came down here and after our speech we were going to spend some time looking at some of the technologies here. So first thing we did is we went and met a company called Osra. Ostra is in Palo Alto. It is a solar thermal country company, a solar thermal company that has developed a technology of using flat panel mirrors to focus the sun's thermal radiant energy on a pipe. Basically heat up the water, use the hot water, create steam and create electricity. This is a company that is absolutely destroying a preconception that solar energy isn't going to be economically based within the next 10 years. In fact, I remember I was arguing with one of my colleagues. I was trying to get him to sign up with what we call the renewable portfolio standard, have 15% of our energy from clean, renewable standards. And he was from Florida, and I said, come on, I need your help on this. And he says, we can't do renewable energy in Florida. I said, well, how about solar power? And he said, no, we can't do solar power in Florida. And I said, I thought it said the Sunshine State on your license plate. I don't quite understand this. So anyway, I didn't get his vote. And two weeks after that, this company, Austria Energy that I visited right down the road from here signed contracts with PG&E in California and one in Florida for enough power for about 500,000 homes. And they believe they can create electricity that is competitive with coal based electricity within the decade. I think that's a realistic assessment. So that's the first hour that I'm California. Second hour I get in a bus operated by the East Bay Transit Company. It was the first hydrogen fuel cell powered bus that was used in routine usage in the United States. And we drove up to the East Bay area and I got up their ways and they pulled over and they said, okay, Congressman, now it's your turn to drive. And I pointed out, you know, I don't have a license, not such a good idea. I got 40 journalists in the back. So they took me to a parking lot and this, this is a beautiful bus. And they said, oh, we're gonna let you drive in the parking lot. So I can now crow. And I've crowed all over the country about this. I became the first member of the United States Congress in American history to drive a hydrogen fuel cell bus. And I can report to you that it was quiet, it was clean, it had good pickup. I used to be an old truck driver, so I know a little bit about driving and it was a wonderful experience. And I can also report that six months before that they told me that George Bush had been there and visited, seen the bus and they let him sit in the driver's seat, but they didn't let him drive. And I don't know why that was. I don't know if it was a partisan thing or something, but for one reason or another, I got to drive this bus and saw the future. And people think that hydrogen fuel cell, where its first step will be in the central locations where you can have a fleet, you can have a hydrogen filling station. Basically, that's where it's going to work best. So then we left there and we drove to Hayward to a company called Mendel. I believe it's Mendo Biotechnology and named after Gregor Mendel, who did the first genetics work. This company is developing feedstocks for cellulosic ethanol. Not this corn based ethanol that you've heard about, but this next second and third generation of ethanol that can use advanced feedstocks. And they've developed various feedstocks, one of which is called Miscanthus. It's a tall plant, tall grass. And they believe this plant can create ethanol three to five times more per acre than the corn ethanol that we use today. Importantly, using less fertilizer and less water. Now this is a plant. Now they're in test plots all across the Midwest. And if this is successful, this will be a game changer to give us a realistic opportunity for biofuels to actually have a positive energy balance and not have a negative environmental consequence. So that's in the first three hours. The, the fourth hour we drive back to Stanford and we go and I meet a guy named Felix Kramer. And you can read about this guy in the book. This is one of my favorite stories in the book. Felix leads a group called what we call the Cal Car Boys. And they have an organization called Cal Cars. Because he and some others, including a doc at the University of California, Davis, decided, why can't we build a car that will at least be partially electric so that we can maintain the full mileage of the car? And so several years ago, Felix went to Detroit and started talking to the major companies, said, why don't you guys build a plug in hybrid, plug it in at night, drive it, you know, 40 miles. And then after 40 miles, if you have to drive longer, you use the gasoline hybrid engine. And they said, Felix, you're smoking the cheap stuff. You go back to California and live in your hemp fired tent, whatever you do, but don't bother us, can't be done. So Felix went back to Contra Mesa, recruited, using the Internet, some engineers designed a plug in hybrid car, built it in his garage in 3,000ft of electric wire. Later he came out, out of his garage, a converted Toyota Prius that gets about 40 miles, all electric, zero CO2 emissions, and has a range of whatever your range is on your tank right now after 40 miles. Now, the genius of this car is first off, 60% of people's trips a day are less than 40 miles a day of the average American. So most Americans, if they were driving this car, would have zero CO2 emissions. Of course, there's some emissions for the electricity that you use goes into your car at night, but it has two additional beautiful things. Eventually, when you plug your car in at night, the utility company will use your battery as a storage facility and pay you money for the right to store their electricity there at night. And some economists evaluated that may have a value of $2,000. So you'll be able to turn your car at garage potentially into a profit center at night renting your battery. Second thing it has is because it runs on electricity. As the grid becomes cleaner, your car will become greener. As we move off of dirty coal onto solar and wind enhanced geothermal, your car will become greener. Now, there's nothing that gets better over time except a plug in electric car and wine. So this is going to be a real game changer when these hit the road. Now here's a guy that did this in his garage, literally. And talk about a great American story. Because two months ago I go to the Washington D.C. auto show and what's sitting there under a brilliant spotlight. But the General Motor Volt and General Motors now has serious plans to commercially produce a plug in hybrid car, hopefully to be mass produced in 2010, 2011. So here in four hours, I had a glimpse of the future, not just of America, but of the world. And I got a glimpse of the technologies that because we had people who would marry intellectual talent with capital and a little moxie can provide potentially to be the saviors of the world. And that's not. That's a bold statement, but I think it's true. And when they do this, they won't be saving just California or Washington. It'll be saving the Ganges and the Arctic and everything else, because we're all in this together. Now, that is a pretty sweet vision for America's destiny. But there's another kind of green here. And this is another reason we wrote this book. We want Americans to start seeing this as an economic opportunity, as Google does with the investments. And I just talked to Dan Riker, who's leading your efforts here as an economic opportunity rather than just an environmental challenge. Because we believe that once people start to see it as an economic opportunity, we will recognize the profit potential in a new I don't want to use paradigm because you guys might have a fine for that word here. I'm not sure. Some corporations. But let's put it this way, it's going to change the game when we recognize that the ultimate fuel is not below our feet, that the true energy source is not buried beneath the ground where we've been looking for it for 130 years, but it's above our shoulders and between our ears. That is where the true, ultimate, infinite source of energy reposes. And the people, I think, at Google, understand that as well as anyone about the power of intellectual capital. So we want to unleash this now. What's it going to take to get that done? Well, one of the things, not the only thing it takes, but one of the things, is for Washington, D.C. to stop playing the role of the ostrich with our heads in the sand and our tail feathers in the air, doing nothing to exploit these potentials and allowing the oil and gas companies to dominate our policy discussions and in fact, starting to adopt the posture of the American eagle. And we are in the process to do that. And I can report to you there is a grand transition underway. And we talk about the book, about what we need to do from a policy perspective, although it's not primarily a policy. But I can tell you that if you have been frustrated with the glacial pace of change or total inaction under this particular president's administration, the calvary is on the way. We are getting ready to rock and roll, to break loose the private investment that can go into these, into these technologies. We started by passing a CAFE standard improvement for car mileage in November. We passed the America's Best efficiency standards for lighting and air conditioning. We passed a renewable portfolio standard in the House. Couldn't get it past the president or the filibuster. We passed a provision taking back $20 billion from the oil and gas company and undeserved tax breaks and putting it in a clean energy fund. Couldn't get that past a filibuster, but we're going to get those both done next year. And then we're going to pass a cap and trade bill which will cap the amount of carbon dioxide going into the atmosphere. And when we do that, and we charge polluters for putting carbon dioxide into the atmosphere, you are going to see a massive infusion of capital to unleash this intellectual ability that we have. And I'm excited to see that because in the course of writing this book, I have seen it with my own eyes as far as what is possible. So that's kind of why we wrote the book. That's why we're here today. And I'm going to now turn it over to Bracken, and he'll take a shot at this, and we'll have questions a little later.

Great. Thank you guys for coming. And thanks, Jay. It's been a tremendous pleasure working with Jay. My name is Bracken Hendricks. I'm a senior fellow at the center for American Progress in Washington, D.C. before that, I started a project called the Apollo alliance, and it was an effort to bring together a bunch of people who don't usually talk to one another and who don't usually think of themselves as environmentalists around claiming the jobs in a green economy and creating the investment that needs to happen to transition our economy broadly in order to survive the climate crisis that we're facing. We brought together labor unions, clean tech investors, civil rights activists from inner cities, farmers, a whole group of folks who usually feel extremely threatened by environmental regulation. And we started talking about the global warming crisis and the solutions to it and the opportunity to create jobs and to create investment. And if there's one single message that I want to give to you today, it's that solving global warming means investment, that protecting our protecting our environment means economic development. And we need to move away from thinking of the environment as a cost center for businesses or at best, a box to check off, and instead think of it as a new lens to look at both the challenges and the opportunities that we're facing in the coming century. Because I'm telling you, it's going to completely reorder our business models, the sorts of products, the sorts of services that we offer, the way we organize our cities. It's one of the most fundamental economic drivers that we're facing at this present moment. Jay talked briefly about some of the crises of global warming. And, you know, we talk so often about melting polar ice. Maybe we bring it down to talk about starving polar bears adrift on ice floes. But bringing it down to a visceral human level, to actually put a human face on global warming and bring it into real terms is a critical task that we need to look at. We had a wonderful it really opened my mind. There was a moment in the production of this book. We had just written the entire book, and we needed to get the rights for the illustrations. And we had a picture of this house in a town called Shishmaref, Alaska, that had fallen into the ocean, was getting lapped by ocean waves. It was sitting on its side and we needed the rights for the picture and we had a very low resolution copy. So we called this woman named Lucia Nguyoc, who is a Nupiat elder in Shishmaref, Alaska. She's an American citizen, an activist, a community organizer. And we said, listen, we need a better picture for the book. And she said, hold on, It'll take me 10 minutes. I'll send my husband outside with the digital camera and he'll email you a picture of it. And it wasn't until that moment that I realized what we had been writing about in this book was people's neighbors losing their homes. When Jay talks about billions of people, it's estimated that 2 billion people could lose regular access to drinking water with a 3 degree rise in global temperatures. That's a staggering fact. 15 to 35% loss of agricultural productivity in Africa, a continent that is already severely strained in its ability to produce produce its food and agricultural needs because of loss of soil moisture with a changing climate. So we're at this very interesting moment now because we're sitting at a crossroads where the status quo isn't an option. If we continue on the path we're on, we end up with climate crisis. That's a certainty. The largest gathering of scientists ever assembled was the Intergovernmental Panel on Climate Change. And they have come to a 90% certainty that, that human beings are causing global warming and that we have a high degree of probability that there will be a rise of 3 degrees Celsius or higher, which could have very devastating impacts. So staying with the course that we're on is not an option. So then what is the alternate option? And it turns out it's a pretty exciting one. We realized as we were writing this book, we started writing a book about technology, about economics, but we realized we were really writing a book about hope. Because when you pursue the other path, what you're talking about is investing in new transit systems, rebuilding cities to be more livable. You're talking about creating entirely new energy systems that not only distribute solar panels across rooftops, but democratize ownership of the foundation of our economy and provide new sources of revenues for poor communities in inner cities, for agricultural communities that have been struggling for many years. So we start to see this as an opportunity for major, major engines, economic development, and it plays out in communities. We write in the book about a town called Grays harbor in Washington, and they were devastated by the spotted owl controversy and the loss of lumbering jobs overseas, the export of logs, and they saw themselves as anything but friends to the environment. But what they had was a deep water port, excellent rail access, a tremendous access to natural resources all around the region. And they suddenly started using that as an economic development strategy. And they started marketing the port as an opportunity to create a biofuel refinery. And they're able to bring in multiple feedstocks and produce biodiesel. It was one of the largest biodiesel plants in North America. And then all these other businesses started springing up around it, using waste heat, using byproducts, finding synergies, ways to develop new business models around the waste products of Grays Harbor. You go all the way to the other side of the country, to the South Bronx, to the poorest congressional district in the country. And there's a woman named Majora Carter there who is working with local folks who are often coming out of prison, unwed mothers, people who have serious, serious economic hardship that they're facing. And she's building career ladders into the middle class using the green economy. She started out taking a waterfront that was a dumping ground for some of the worst land uses and some of the greatest waste of our society. And she started creating community based jobs as arborists, as horticulturists. She started seeing that there were opportunities for stormwater management, for improving the whole metabolism of the city. Now she's training people to install green roofs that treat rainwater on site, that reduce energy bills by reducing heating and cooling burdens. So there's a climate impact from installing a green roof on this building, but there's also a jobs impact and there's a social equity impact. And these are poor folks in the South Bronx who are now starting to get jobs weatherizing homes, installing solar roofs, and they're calling them green collar jobs. And we're seeing this notion of a green collar job that can run the gamut from high tech engineering in industrial facilities, all the way through to very clean entry level jobs into blue collar professions with real career tracks, to skills and to improvement. So it's been a tremendous opportunity to understand that solving global warming is in fact, one of the greatest opportunities to rebuild our economy. And we need to shift this to become a fundamental lens to, through which we look at our economy. There's a quote that Martin Luther King said which was, darkness cannot drive out darkness, only light can do that. Hate cannot drive out hate, only love can do that. And as we started digging into this question of global warming, we realized very quickly it was not enough to understand the threat of global warming, to understand the perils, because the More you beat people over the head with the dangers of driving an suv, the more they retreat, the more they retreat from engaging with their communities, from engaging with the facts, and from feeling empowered to take on solutions. So what Jay did in the opening was to tell you some of the stories that are in the book. And we realized that the biggest challenge facing America right now, and America is the nation, the indispensable nation that has to act, the United States. The biggest challenge is not one of science. We have plenty of science. The technology is there in the laboratories, it's in the incubators. The startup companies are rallying around new business models. It's not in the economics. We understand what it'll take to commercialize new businesses, to bring these technologies to scale, to shift the incentives so that we're no longer subsidizing waste and pollution, but we're taking those very same dollars and investing them in high, high skill, high wage jobs. The real challenge is one of political will. It's one of trusting that we can actually realize these solutions, that we can actually have a better future by grappling with these challenges, by facing the problem. So that's what we tried to do in this book is. It is a policy book, but we get there by walking through what's possible. And as the information was coming in, as we were writing this book, the science got progressively worse. The ice sheets are melting faster than we thought. The temperature is rising faster than we thought. All of the things that were predicted might be true are becoming certainties that they're true and they're happening more quickly, but just as quickly. The technology was arriving rapidly to solve these very same crises. The business models are emerging. What is missing right now is real serious national leadership. And I think I'll just close by saying that we started with the model of John Kennedy coming to the nation and saying that he went into the well of Congress and said that we would send a man to the moon in a decade and return them safely home again. We marshaled the science and technology resources of the country, the industrial prowess of the country, the political will to get it done. And we did it in just over eight years, we can do this again. It will take public leadership, it will take public policy, and it will take public investment. America has always grown. Its private sector activity has always grown when there have been fundamental investments in basic research and development, fundamental investments in infrastructure, and these are the basic conditions of our prosperity. You know, when Thomas Jefferson made the Louisiana Purchase, he didn't have the money lying around to do it. He saw it as a wise investment in the long term, term future of the country. You can carry that through to the building of the canals, the building of the railroads, the development of the transcontinental highway system, the interstate highway system, and then through to something you all know very much about is the development of the semiconductor industry and the development of the telecommunications revolution. That was all made possible through initial investments that were driven by public sector leadership. Certainly the heavy lifting wasn't done by the public sector, but there's a public sector role in setting the enabling conditions whereby markets can then be freed to actually unleash new technologies and to find the best way forward. We talk in the book about how government sets the road signs, but the market's going to drive. So it's so exciting to be here at Google. We actually write about your solar installation in the book, and we see the solar as. Getting solar energy cheaper than the cost of, of dirty and polluting coal technologies is one of the fundamental challenges that we face. It's one of the fundamental scientific and R and D challenges. It's also one of the fundamental business opportunities. So this really is a book about turning these crises into opportunities, telling the stories about how we can get there, and then teasing out the policies that are going to be necessary when we finally get the political leadership that it's going to take to actually move the needle on this tremendously important issue. So I think we're going to open it up and have some question and answers.

Do you have any comments before we do it? Because I was thinking you're listening to Bracken. I kind of go, well, geez, if this makes so much sense, why isn't it happening already? And if you want to know the answer to that, you might read this book. Because if you want to know what it's like to talk to George Bush about high technology, I'll tell you the story. It's in the book. If you want to know what it's like to try to impress upon Dick Cheney the importance of clean energy, you can read about it in the book. And there are some roadblocks because some people don't understand that if you want to predict the future, invent it. And that idea has not penetrated the White House yet. And that's why I'm optimistic. When we get a change, we're going to have a change in policy here and Congress is going to get ready to rock and roll. And one of the things we haven't talked about that I want to make sure I mention, we talk a lot about the production of clean energy, but we have a thing called the Ten Energy Enlightenments. It's our sort of answer to the Ten Commandments or something. Ours are not quite as earth shaking. We talk about the 10 principles that the clean energy revolution should follow. And there's some decent rules there and one of them is that you're going to have failure on occasion and you've got to get used to that. So we're going to have some failures along the way. Some of these companies are going to fail, but that cannot dissuade us from moving forward. And the second principle is a principle we call the importance of the first fuel. The first clean energy fuel is always not wasting energy. And I want to mention this because, because sometimes we don't in our discussion. But always the cheapest way, always the fastest way to avoid carbon dioxide emissions is not to waste electricity and not to waste energy in the first place. And when our book and our analysis, we believe 30 to 40% of this entire journey to a clean energy future will be based on not wasting energy. And your industry is very important on that. There's a company called Verdeum up in Seattle which is managing. They have a software system to manage computer systems that can save 20 to 30% of the electrical usage in a corporate IT system company called 3 tier that is using IT technology basically to locate renewable sources and how to not waste energy. We think that one of the biggest sort of no brainer things, things to do is to develop an investment in weatherizing our homes because our homes frankly are sieves right now for energy wastage. So we advocate significant policies to help maximize that first fuel. It makes sense. We think the job is going to get done. So I wanted to leave it there and wondering if we can stand for easy questions or general criticism. Yes, sure, if you can speak in the microphone just because it's being.

I like the mic. Wondering if you guys, either or both of you have seen the movie who Killed the Electric car.

We have. And Chelsea Sexton, who's in the movie has been very, very active. This is a good friend and she's helped us. We write about her story in the book and she's very happy as I am about the rebirth of the electricity car eventually. And we look at the plug in hybrid is the first step to the full electrification of the car. And by the way, I am so convinced that the car has to be radically transformed off of fossil fuel. We cannot in the long term in this world have the predominant system of transportation run on gasoline, period. We're going to improve our mileage, but frankly, that is not enough. And I'll tell you why. I was on the streets of Mumbai 3 days ago in India, okay, where we have, you know what, a hundred times more per capita cars. And the Indians now are starting to get them. And if they're going to burn gasoline in their cars, even if they got 50 miles a gallon, it would doom the planet. We have to degasify the car, decarbonize the car. And I think the electrical car is going to be what we're going to have, have in the next decade to two decades. Hydrogen may be farther off. Biofuels, I think, are going to play a portion of this. We talk extensively about the analysis of biofuels. You've heard about the controversy that's going on. So yes, we've seen the movie.

So I want to make, I just want to make a couple of points. There's so many interesting things I could ask like 50 questions. I appreciate you guys being here, so I'll try not to be one of those microphone hog people. One of the things the movie does is it does a wonderful job of showing the sort of vested interests in the status quo. Another point that the movie brings up is that, you know, into the 80s, basically, after we had jacked up our mileage standards with the CAFE standards, the Saudis took a very strategic long term approach by upping their production, lowering the cost of fuel. And that sort of brought us to where we are today and maybe a 20 year, you know, 20 year cycle. So I mean, I see that and I'm wondering what your take is on that. I mean, they could do that again. I mean, if this stuff takes off, clean energy takes off, you know, God forbid they could just be like, okay, well we're just going to, you know, lower the price of production. What's going to prevent them from doing that?

Well, they may try to do that, but two things. One, when we have a cap and trade system, there will be a limitation of the amount of carbon dioxide that can be emitted from the transportation fleet nationwide. So there will be a limit, a number of tons that will be allowed to go into the atmosphere. An enforceable hard concrete cap which legally cannot be penetrated. This is very, very important. You know, some people have argued about we ought to have a carbon tax or a gift gas tax instead of a cap and trade system, but we have to have a hard cap so that regardless of what the Saudis do, if they try to replicate that strategy, we will still have an enforceable cap to limit the amount of CO2 and that cap will come down every year and it will be sector by sector. So there will be a cap for transportation, for cars and trucks. There will be a separate cap for the coal based utility utilities and gas fired utility systems. There will be separate caps for the steel and cement industry. So I don't think that Saudi strategy is going to work like it did in the past. And you know this is going to be real and it's going to demand research going into it. And you know, you saw the attitude in that movie. If those of you have seen the movie, actually it was a pretty good movie. I like the movie. By the way, there's another movie called Fields of Fuel about biofuels you might be interested in. It's coming out in a few months, but I've lost my train of thought. So Bracken, you take over.

I just wanted to say, I guess two quick points on that. The first is that we have a different oil market than we used to have. There is very little slack in the system right now. Small disruptions are causing, causing tremendous reverberations through the market in terms of price spikes and supply. Disruptions will have very global impact. The nature of global demand has changed as well as the developing nations are asking for a greater share of the resources in global markets. There is not a situation where there is as much reserve capacity and ability to manipulate, manipulate the oil markets. However, having said that, your point about vested interest is a very good one. It would be dangerous to paint too rosy a scenario that there aren't folks who will be threatened by this change. A big piece of. One of the big piece of our argument is that this change in fact doesn't have to be threatening. There's tremendous business opportunity. But as good as renewable energy is, as important as it is, we just had a major fight in the energy bill to include a tax package that was really essential for the growth of some of these solar industry technologies. The concentrated solar production tax credit that makes wind much more able to compete in a much greater geographic region of the country. They're relatively small, a couple year extensions to a relatively modest tax credit in the greater scheme of things. And we weren't able to get the political will to get it done by one vote.

One senator sat in his office to allow the filibuster go through.

So we're in a moment where the vested interests, as you called them, are extremely mobilized and they understand their stake in preserving a very particular outcome. And there is a tremendous opportunity for society at large and for businesses that are now getting mobilized. But there isn't the same sort of organization and the same sort of political capacity to, for the renewables industry or for the technology companies that could supply energy efficiency to go in and speak with the same strength as the American petroleum industry. And we need to get to that point and we need to get there.

Quickly like this November hint.

So yeah.

So global warming is bad.

And it's probably happening by all accounts. What is unequivocally happening is we're sending.

Hundreds of billions of dollars a year to Wahhabists who are doing things like Darfur. And if you look at the Brazilian example, they are completely energy independent now when it comes to, to fueling their cars. And they did that with a flex fuel mandate.

Is there any reason we couldn't do.

That if we included methanol, which is much easier to create out of random biomass?

Well, we can do that. And I've actually brought an amendment to have a flex fuel requirement as you suggested. I could not pass it this year. We're going to take another stab at it next year. GM has said we're going to make half of our car's flex fuel. Flex fuel. Basically you burn biofuels or gas interchangeably. It costs like 150 bucks to do that. Every car in America should be flex fuel because in Brazil when you pull up to the pump, you're the boss. I mean, right now we're slaves to the oil and gas industry, right? They tell you what you're going to buy and how much. In Brazil you make. Companies compete for your business between natural gas, biofuels, gasoline and or diesel. We want to be in the driver's seat. If you have a flex fuel car, you get that. So we're going to take another shot, or I am anyway to try to get a flex fuel requirement. And we are capable. Although sugarcane is a little better than our crops, it's a little richer. But we are capable of achieving that same level of independence, I believe. But again, I want to reiterate, I believe Bracken believes. We believe the electrification of the car will be necessary because we're just. Even if we find a biofuel fuels solution here in America, when you look at India and China, the cars they are going to be pumping out, if those cars are burning even biofuels exclusively, we're in deep, deep trouble. But I want to thank you for pointing out the security aspect of this. This is why this, we believe is such a unifying issue in America. This message of clean energy unifies red and blue states. It unifies those who believe, believe in global warming with those who believe that the security threat is the number one issue we're dealing with, because you do the same things virtually to deal with the security threat that you've pointed out as you deal with global warming. And importantly, it is now engaging a unified faith community. A very, very interesting thing is happening politically where the faith community, much of which has sort of, you know, been on the one side of the aisle is, is coming together to demand action on this, of all faiths. And this is very, very heartening, and it's going to help us ultimately make this happen politically. Very important.

You mentioned the money that's flowing to Wahhabists or, you know, flowing to, you know, overseas broadly. It's actually interesting to note that the recent spikes in oil prices account for about 80% of the increase in our trade deficit, about $7 billion. So from just a pure sort of economic trade angle, it's also a devastating impact. One other piece of policy that I think is really important, in addition to the flex fuel mandate, is something you all have pioneered in California is the low carbon fuel standard. And the notion that we treat all fuels equally and evaluate the performance on the basis of carbon will also help make biofuels more sustainable and help make the more sustainable versions of biofuels compete more effectively on a level playing field against more polluting ones. But you're absolutely right. The security issue is central. I've recently read Plug In Hybrids.

Could you hold the microphone up here?

I'm sorry. I recently read a book called Plug in the Cars that Will Save America. And I'm currently reading Al Gore's book, the Assault on Reason. And I also just recently watched a movie called why We Fight about the War in Iraq. And right across all of those, you know, it got me really angry, actually, watching those movies, reading those books the last 60 years or so since President Eisenhower warned us about the military industrial complex. The thread that's gone right across all of that is the tie in between the war machine and our dependence on foreign fuels. And it seems that with all the great ideas that we have around us in your book, which I'll have to read and these other messages is that the momentum of that machine has carried it through several administrations on both sides of the. And they've apparently been powerless to resist the lobbyists and so forth that go with it. So, you know, how will your new initiatives resist that momentum?

Well, several things. First off, I want to give you Some good news in this, and I really do believe this, I have had frustration, my wife Trudy and I, who can testify to this, I've come home every Friday from Washington D.C. cursing the place I worked because it refused to break this gridlock, refused to do common sense things like increase our fuel efficiency standards for 30 years. Our cars get less mileage today than they did in 1984 when Ronald Reagan got rid of the Cafe Standard improvements. Okay, if we had simply continued, if we had simply continued the rate of improvement of our automobile efficiency that we had had during 1977 to 1983, we would be free from Saudi Arabia oil today. If we had simply continue that. So this is one of the great outrages of all time. That's the bad news. But the good news is the ice is breaking on this so rapidly you can't believe it. A year ago, none of us believed that we could break the gridlock on the CAFE standard of this. None of us believe that we could get, get the energy efficiency in the lighting industry that we actually passed and even George Bush had to sign into law. None of us believe we could pass a renewable portfolio standard or take back these tax breaks in the House, which we did. So this is changing very rapidly for two reasons. The American people are now seeing their sons and daughters go into war that they know in some way or another is somehow associated with the, our addiction to Middle Eastern oil. That's not saying it's a one to one correlation, but they know this danger and they're seeing it with their own eyes. And secondly, in the global warming front, they're seeing now with their own eyes and the changes in their gardens when the flowers are blooming at a different time of year. They're seeing the Arctic melt before their eyes. So we should have some optimism about this. But again, this is something that, you know, we need the right people in D.C. frankly, on both sides of the aisle, or any side of the aisle of your predilection. You know, we'll vote for these things. Very important. I believe that's going to happen. Yeah. I wanted to go back to the cap and trade bill for a second two part question. One was are there sectors of, if you look at the whole pie of emissions in the US are there sectors that aren't included in that bill? And then the second part of the question was, just as you see this bill going through Congress, what do you think are the most likely areas that could be compromised or weakened in order to get it passed? Yes, we are excluding your fireplace. So Your fireplace will be safe from government regulation. And there are, I mean, basically about 85% of the economy will be under this cap. But the question is, how low can you get? There is a level in your houses pretty much off limits. You know, as well as a lot of businesses, the critical issues to watch in the cap and trade debate, which is now developing. And frankly, one of the troubles, one of the hard things we're talking about is, you know, whether to do a bill this year with George Bush in office, recognizing the difficulty of dragging that anchor, or whether to wait for a new president and a few members of Congress to take a stab next year. And we're working our way through that. There's sort of three things. Number one, we have to look at the target. What should be the target? The target historically has been to get our CO2 emissions down to 1990 levels by the year 2020. We've had that for the last two years. I and Henry Waxman and others have introduced a bill to do that. But frankly, the science has indicated that is not good enough. The science is now, in the last two years, every single piece of new science is coming in is indicating you've got to be more aggressive than that. So we're thinking about having a more aggressive short term target. It's got to be an 80% reduction by 2050 if we're going to have any hope of really preventing cataclysmic consequences. So that's a. We got to be 80% below. Even with the expansion of India and China and our own economy, we have to reduce global emissions by 80% by the year 2050. That's a tall order. Second, we have to think of how we allocate the permits for this in this allocation system. Industry, as you would not be surprised, wants to be given them for free. But that makes no sense to just give away this public access for free. When they did this in Europe, the utilities made billions of dollars of windfall profits, took the money, the permits and charged their consumers for it. That's what they'll do here too, if we give them away for free. We can't do that. We've got to have an auction just like we auction off spectrum to send electronic messages across this public airwave. That's the same thing we should do. The third issue is whether to have what's called a safety version valve. A lot of the industry wants a provision that if prices go over a certain pounds or dollars per ton of carbon, the whole thing is sort of called off. But you know what when we passed the civil rights law in 1964, we didn't say, if there's a little controversy in Selma, we'll just call the whole thing off. So those are the three issues that will be hotly debated. We need your help.

Just want to talk a little bit about the auction and allocation piece because it's another place where the scale is actually really hard to comprehend. The Congressional Budget Office estimates that the value of the permits in a cap and trade system would be between 50 to $300 billion every year, which is 50 to $300 billion recurring every year once the cap was fully implemented, which is a staggering resource. And there's kind of, there's three ways I think we could fail on dealing with global warming and cap and trade. And one way to succeed. One would be to not do enough or to not actually rein in carbon. The other would be to not deal with the equity impacts and to not deal with minimizing the pain that communities might feel or that changes in pricing and cost, those sort of equity and regressivity issues, we really got to deal with pricing and make sure that that resource is available to take care of that. The third would be to fail to capture the economic opportunity of making sure we're creating these new industries and investing in the deployment of the new technology and the new infrastructure. We really need the resources to make sure that we're doing that and commercializing these new businesses and helping to invest in a green infrastructure. When we get those three pieces right, we can actually succeed and create a green economy that's both prosperous and good for Google. And good for Google.

Good for Google. You spoke about the American petroleum industry and how they're a focused special interest. So then a focused special interest can put a chokehold on innovation that then is a threat to capitalism and democracy and then as a result also can impoverish an economy.

What do you think?

Well, obviously that is correct. And our whole idea here is to try to break open access to the energy for Americans to give them choice. And when Americans have choice, they can can break that stranglehold. And if you look at the fundamental concepts that we are advocating here is American opportunity for their choice as consumers. And everything we've advocated to is to give people multiple fields of decision making. By the way, one of our principles is we don't believe there's any silver bullet. There's no one magical technology that's going to solve this problem. We believe there should be a smorgasbord for two reasons. One, it gives consumers choice and secondly, it spreads the risk of failure because anytime you have an investment or technology or any other investment, you want to spread your risk. So that's the, that's what we're advocating for. By the way, I want to comment your local congresswoman, Anna Eshoo is working on these things as well and she's been very engaged. I went, she was on this trip with, with Nancy Pelosi and she's working hard on this energy stuff too. We appreciate your guys. Congressperson Anna Issue. So one last question, Ian. So I really like the fact that we've sort of been moving the conversation as a whole from on the one hand, we can't afford global warming and we can't afford Middle Eastern oil to we can afford to fix this problem. And I'm wondering at what point we can actually move this conversation easier, even further and say, you know, this is just a net win even in the absence of those issues. And I ask that not only to convince the skeptics, but because there's, you know, like what a new coal fired power plant in China every week or two. And those are. And you know, we have to fix the problems we can here, but at some point that's going to be the critical link, that's going to be the thing that really needs to be fixed.

Yeah.

You want to take that?

Sure. I mean, I think I started out by saying that solving global warming means investment and I think really understanding in a profound way that this is an opportunity to invest in the productive foundation of our economy, that this is the future of competitiveness globally, that this is, it's also the future of our survival. But you don't need to, you don't need to accept that threat in order to embrace this opportunity. And we're seeing it happen very concretely in cities around the country. The spread of green building laws, of efforts to invest in clean energy policy, really makes a difference and it really fits with economic development in a very concrete way in real places. A great example is the state of Pennsylvania where we talked with Governor Ed Rendell, who's using his entire economic development system to build what he feels will improve the competitiveness of Pennsylvania by creating a market for renewable energy. And he's been able to recruit the Spanish wind manufacturer Gamesa to locate manufacturing plants for wind turbines in shuttered steel mills. And we met a third generation steel worker who was working, making windmills in the same factory where his father had rolled steel. And that's just an opportunity for him, for a poor heartland community that is watching jobs only move overseas when you start seeing new companies locate, when you start seeing new investment flows. And they're very, very substantial investment flows. If you combine solar, wind, fuel cells and biofuels, they've increased from about a $40 billion market to about a 200, or they're anticipated in the next about eight years to $225 billion, a fourfold increase above where they were. These are very rapidly growing economic opportunities. It's where the smart VC money is going already, you know, and it's the policies are needed, though, to make sure that we can actually navigate what's often called the valley of death in the private product development world. So we need this mix of smart public policy, unleashing the power of capital to really make this change happen. And we can do that simply by focusing on this opportunity. Without having a price on carbon, without having some of these additional policies, it's going to be a lot harder and it probably won't happen fast enough. Thank you very much.

Thank you. Here's the book. Show them the book. There's the book.