WEBVTT 00:00:00.225 --> 00:00:02.133 America's public energy conversation 00:00:02.133 --> 00:00:04.233 boils down to this question: 00:00:04.233 --> 00:00:07.767 Would you rather die of A.) oil wars, 00:00:07.767 --> 00:00:10.700 or B.) climate change, 00:00:10.700 --> 00:00:12.100 or C.) nuclear holocaust, 00:00:12.100 --> 00:00:15.400 or D.) all of the above? 00:00:15.400 --> 00:00:18.200 Oh, I missed one: or E.) none of the above? 00:00:18.200 --> 00:00:20.500 That's the one we're not normally offered. 00:00:20.500 --> 00:00:21.900 What if we could make energy do our work 00:00:21.900 --> 00:00:23.300 without working out undoing? 00:00:23.300 --> 00:00:27.000 Could we have fuel without fear? 00:00:27.000 --> 00:00:28.900 Could we reinvent fire? 00:00:28.900 --> 00:00:30.300 You see, fire made us human; 00:00:30.300 --> 00:00:33.200 fossil fuels made us modern. 00:00:33.200 --> 00:00:33.900 But now we need a new fire 00:00:33.900 --> 00:00:37.685 that makes us safe, secure, healthy and durable. 00:00:37.685 --> 00:00:40.174 Let's see how. 00:00:40.174 --> 00:00:43.060 Four-fifths of the world's energy 00:00:43.060 --> 00:00:44.833 still comes from burning each year 00:00:44.833 --> 00:00:48.333 four cubic miles of the rotted remains 00:00:48.333 --> 00:00:50.933 of primeval swamp goo. 00:00:50.933 --> 00:00:53.067 Those fossil fuels 00:00:53.067 --> 00:00:54.467 have built our civilization. 00:00:54.467 --> 00:00:55.700 They've created our wealth. 00:00:55.700 --> 00:00:57.100 They've enriched the lives of billions. 00:00:57.100 --> 00:01:01.367 But they also have rising costs 00:01:01.367 --> 00:01:06.833 to our security, economy, health and environment 00:01:06.833 --> 00:01:07.533 that are starting to erode, if not outweigh their benefits. 00:01:07.533 --> 00:01:10.667 So we need a new fire. 00:01:10.667 --> 00:01:15.000 And switching from the old fire to the new fire 00:01:15.000 --> 00:01:19.267 means changing two big stories about oil and electricity, 00:01:19.267 --> 00:01:24.067 each of which puts two-fifths of the fossil carbon in the air. 00:01:24.067 --> 00:01:25.467 But they're really quite distinct. 00:01:25.467 --> 00:01:27.833 Less than one percent of our electricity is made from oil -- 00:01:27.833 --> 00:01:31.767 although almost half is made from coal. 00:01:31.767 --> 00:01:35.000 Their uses are quite concentrated. 00:01:35.000 --> 00:01:37.033 Three-fourths of our oil fuel is transportation. 00:01:37.033 --> 00:01:40.100 Three-fourths of our electricity powers buildings. 00:01:40.100 --> 00:01:42.433 And the rest of both runs factories. 00:01:42.433 --> 00:01:46.700 So very efficient vehicles, buildings and factories 00:01:46.700 --> 00:01:48.100 save oil and coal, 00:01:48.100 --> 00:01:51.700 and also natural gas that can displace both of them. 00:01:51.700 --> 00:01:53.800 But today's energy system is not just inefficient, 00:01:53.800 --> 00:01:56.700 it is also disconnected, 00:01:56.700 --> 00:01:58.100 aging, dirty and insecure. 00:01:58.100 --> 00:02:01.700 So it needs refurbishment. 00:02:01.700 --> 00:02:05.467 By 2050 though, it could become efficient, 00:02:05.467 --> 00:02:09.467 connected and distributed 00:02:09.467 --> 00:02:10.867 with elegantly frugal 00:02:10.867 --> 00:02:13.600 autos, factories and buildings 00:02:13.600 --> 00:02:15.967 all relying on a modern, secure 00:02:15.967 --> 00:02:19.167 and resilient electricity system. 00:02:19.167 --> 00:02:23.067 We can eliminate our addiction to oil and coal by 2050 00:02:23.067 --> 00:02:24.867 and use one-third less natural gas 00:02:24.867 --> 00:02:29.367 while switching to efficient use 00:02:29.367 --> 00:02:30.767 and renewable supply. 00:02:30.767 --> 00:02:34.900 This could cost, by 2050, 00:02:34.900 --> 00:02:38.167 five trillion dollars less in net present value, 00:02:38.167 --> 00:02:42.133 that is expressed as a lump sum today, 00:02:42.133 --> 00:02:42.833 than business as usual -- 00:02:42.833 --> 00:02:44.233 assuming that carbon emissions 00:02:44.233 --> 00:02:46.767 and all other hidden or external costs are worth zero -- 00:02:46.767 --> 00:02:48.167 a conservatively low estimate. 00:02:48.167 --> 00:02:54.033 Yet this cheaper energy system 00:02:54.033 --> 00:02:57.867 could support 158 percent bigger U.S. economy 00:02:57.867 --> 00:02:59.267 all without needing oil or coal, 00:02:59.267 --> 00:03:02.700 or for that matter nuclear energy. 00:03:02.700 --> 00:03:05.600 Moreover, this transition needs no new inventions 00:03:05.600 --> 00:03:07.200 and no acts of Congress 00:03:07.200 --> 00:03:13.467 and no new federal taxes, mandate subsidies or laws 00:03:13.467 --> 00:03:16.633 and running Washington gridlock. 00:03:16.633 --> 00:03:17.333 Let me say that again. 00:03:17.333 --> 00:03:18.733 I'm going to tell you how to get the United States 00:03:18.733 --> 00:03:22.367 completely off oil and coal, five trillion dollars cheaper 00:03:22.367 --> 00:03:23.767 with no act of Congress 00:03:23.767 --> 00:03:26.700 led by business for profit. 00:03:26.700 --> 00:03:30.200 In other words, we're going to use our most effective institutions -- 00:03:30.200 --> 00:03:34.167 private enterprise co-evolving with civil society 00:03:34.167 --> 00:03:37.233 and sped by military innovation 00:03:37.233 --> 00:03:40.033 to go around our least effective institutions. 00:03:40.033 --> 00:03:42.367 And whether you care most 00:03:42.367 --> 00:03:43.767 about profits and jobs and competitive advantage 00:03:43.767 --> 00:03:48.100 or national security, or environmental stewardship 00:03:48.100 --> 00:03:50.200 and climate protection and public health, 00:03:50.200 --> 00:03:53.067 reinventing fire makes sense and makes money. 00:03:53.067 --> 00:03:55.467 General Eisenhower reputedly said 00:03:55.467 --> 00:03:59.933 that enlarging the boundaries of a tough problem 00:03:59.933 --> 00:04:04.933 makes it soluble by encompassing more options and more synergies. 00:04:04.933 --> 00:04:05.633 So in reinventing fire, 00:04:05.633 --> 00:04:08.600 we integrated all four sectors that use energy -- 00:04:08.600 --> 00:04:12.700 transportation, buildings, industry and electricity -- 00:04:12.700 --> 00:04:16.200 and we integrated four kinds of innovation, 00:04:16.200 --> 00:04:18.933 not just technology and policy, 00:04:18.933 --> 00:04:21.033 but also design and business strategy. 00:04:21.033 --> 00:04:23.633 Those combinations yield 00:04:23.633 --> 00:04:25.800 very much more than the sum of the parts, 00:04:25.800 --> 00:04:27.900 especially in creating deeply disruptive business opportunities. 00:04:27.900 --> 00:04:34.133 Oil costs our economy two billion dollars a day, 00:04:34.133 --> 00:04:37.900 plus another four billion dollars a day 00:04:37.900 --> 00:04:39.300 in hidden economic and military costs, 00:04:39.300 --> 00:04:43.800 raising its total cost to over a sixth of GDP. 00:04:43.800 --> 00:04:46.867 Our mobility fuel goes three-fifths to automobiles. 00:04:46.867 --> 00:04:49.067 So let's start by making autos oil free. 00:04:49.067 --> 00:04:52.400 Two-thirds of the energy it takes to move a typical car 00:04:52.400 --> 00:04:54.433 is caused by its weight. 00:04:54.433 --> 00:04:57.833 And every unit of energy you save at the wheels, 00:04:57.833 --> 00:04:59.233 by taking out weight or drag, 00:04:59.233 --> 00:05:00.633 saves seven units in the tank, 00:05:00.633 --> 00:05:03.533 because you don't have to waste six units 00:05:03.533 --> 00:05:05.633 getting the energy to the wheels. 00:05:05.633 --> 00:05:08.433 Unfortunately, of the past quarter century, 00:05:08.433 --> 00:05:11.933 epidemic obesity has made our two-ton steel cars 00:05:11.933 --> 00:05:14.033 gain weight twice as fast as we have. 00:05:14.033 --> 00:05:18.733 But today, ultralight, ultrastrong materials, 00:05:18.733 --> 00:05:20.133 like carbon fiber composites, 00:05:20.133 --> 00:05:24.367 can make dramatic weight-saving snowball 00:05:24.367 --> 00:05:26.467 and can make cars simpler and cheaper to build. 00:05:26.467 --> 00:05:30.033 Lighter and more slippery autos 00:05:30.033 --> 00:05:32.233 need less force to move them, 00:05:32.233 --> 00:05:34.800 so their engines get smaller. 00:05:34.800 --> 00:05:38.000 Indeed, that sort of vehicle fitness 00:05:38.000 --> 00:05:41.167 then makes electric propulsion affordable 00:05:41.167 --> 00:05:44.300 because the batteries fuel cells 00:05:44.300 --> 00:05:47.900 also get smaller and lighter and cheaper. 00:05:47.900 --> 00:05:51.800 So sticker prices will ultimately fall to about the same as today, 00:05:51.800 --> 00:05:54.967 while the driving cost, even from the start, 00:05:54.967 --> 00:05:57.900 is very much lower. 00:05:57.900 --> 00:06:00.000 So these innovations together can transform automakers 00:06:00.000 --> 00:06:02.900 from wringing tiny savings 00:06:02.900 --> 00:06:05.000 out of Victorian engine and seal-stamping technologies 00:06:05.000 --> 00:06:08.600 to the steeply falling costs 00:06:08.600 --> 00:06:14.300 of three linked innovations that strongly reenforce each other -- 00:06:14.300 --> 00:06:18.100 namely ultralight materials, making them into structures 00:06:18.100 --> 00:06:21.000 and electric propulsion. 00:06:21.000 --> 00:06:25.700 The sales can grow and the prices fall even faster 00:06:25.700 --> 00:06:27.100 with temporary feebates, 00:06:27.100 --> 00:06:29.200 that is rebates for efficient new autos 00:06:29.200 --> 00:06:32.900 paid for by fees on inefficient ones. 00:06:32.900 --> 00:06:34.300 And just in the first two years 00:06:34.300 --> 00:06:37.933 the biggest of Europe's five feebate programs 00:06:37.933 --> 00:06:40.733 has tripled the speed of improving automotive efficiency. 00:06:40.733 --> 00:06:45.700 The resulting shift to electric autos 00:06:45.700 --> 00:06:47.833 is going to be as game-changing 00:06:47.833 --> 00:06:52.200 as shifting from typewriters to the gains in computers. 00:06:52.200 --> 00:06:54.300 Of course, computers and electronics 00:06:54.300 --> 00:06:56.600 are now America's biggest industry, 00:06:56.600 --> 00:06:58.000 while typewriter makers have vanished. 00:06:58.000 --> 00:06:59.767 So vehicle fitness 00:06:59.767 --> 00:07:02.567 opens a new automotive competitive strategy 00:07:02.567 --> 00:07:06.867 that can double the oil savings over the next 40 years, 00:07:06.867 --> 00:07:10.067 but then also make electrication affordable, 00:07:10.067 --> 00:07:12.867 and that displaces the rest of the oil. 00:07:12.867 --> 00:07:17.700 America could lead this next automotive revolution. 00:07:17.700 --> 00:07:20.400 Currently the leader is Germany. 00:07:20.400 --> 00:07:21.800 Last year, Volkswagen announced 00:07:21.800 --> 00:07:23.900 that by next year they'll be producing 00:07:23.900 --> 00:07:24.400 this carbon fiber plugin hybrid 00:07:24.400 --> 00:07:30.100 getting 230 miles a gallon. 00:07:30.100 --> 00:07:32.000 Also last year, BMW announced 00:07:32.000 --> 00:07:34.100 this carbon fiber electric car, 00:07:34.100 --> 00:07:37.167 they said that its carbon fiber is paid for 00:07:37.167 --> 00:07:39.667 by needing fewer batteries. 00:07:39.667 --> 00:07:41.767 And they said, "We do not intend to be a typewriter maker." 00:07:41.767 --> 00:07:43.767 Audi claimed it's going to beat them both by a year. 00:07:43.767 --> 00:07:48.500 Seven years ago, an even faster and cheaper 00:07:48.500 --> 00:07:49.200 American manufacturing technology 00:07:49.200 --> 00:07:56.167 was used to make this little carbon fiber test part, 00:07:56.167 --> 00:07:59.767 which doubles as a carbon cap. 00:07:59.767 --> 00:08:02.700 (Laughter) 00:08:02.700 --> 00:08:05.500 In one minute -- and you can tell from the sound 00:08:05.500 --> 00:08:08.333 how immensely still and strong it is. 00:08:08.333 --> 00:08:09.733 Don't worry about dropping it, it's tougher than titanium. 00:08:09.733 --> 00:08:14.633 Tom Friedman actually whacked it as hard as he could with a sledgehammer 00:08:14.633 --> 00:08:16.033 without even scuffing it. 00:08:16.033 --> 00:08:16.733 But such manufacturing techniques 00:08:16.733 --> 00:08:17.433 can scale to automotive speed and cost 00:08:17.433 --> 00:08:21.133 with aerospace performance. 00:08:21.133 --> 00:08:25.900 They can save four-fifths of the capital needed to make autos. 00:08:25.900 --> 00:08:26.600 They can save lives 00:08:26.600 --> 00:08:28.000 because this stuff can absorb 00:08:28.000 --> 00:08:30.433 up to 12 times as much crash energy per pound as steel. 00:08:30.433 --> 00:08:33.367 If we made all of our autos this way, 00:08:33.367 --> 00:08:34.767 it would save oil equivalent to finding 00:08:34.767 --> 00:08:38.153 one and a half Saudi Arabias, or half an OPEC, 00:08:38.153 --> 00:08:42.400 by drilling in the Detroit formation, a very prospective play. 00:08:42.400 --> 00:08:43.100 And all those mega-barrels under Detroit 00:08:43.100 --> 00:08:48.767 cost an average of 18 bucks a barrel. 00:08:48.767 --> 00:08:50.167 They are all-American, carbon-free 00:08:50.167 --> 00:08:52.933 and inexhaustible. 00:08:52.933 --> 00:08:54.333 The same physics and the same business logic 00:08:54.333 --> 00:08:57.233 also apply to big vehicles. 00:08:57.233 --> 00:08:58.633 In the five years ending with 2010, 00:08:58.633 --> 00:09:04.500 Walmart saved 60 percent of the fuel-per-ton-mile 00:09:04.500 --> 00:09:05.900 in its giant fleet of heavy trucks 00:09:05.900 --> 00:09:07.300 through better logistics and design. 00:09:07.300 --> 00:09:10.100 But just the technological savings in heavy trucks 00:09:10.100 --> 00:09:12.200 can get two-thirds. 00:09:12.200 --> 00:09:15.133 And combined with triple to quintuple efficiency airplanes, 00:09:15.133 --> 00:09:17.700 now on the drawing board, 00:09:17.700 --> 00:09:19.100 can save close to a trillion dollars. 00:09:19.100 --> 00:09:23.900 Also today's military revolution in energy efficiency 00:09:23.900 --> 00:09:26.000 is going to speed up all of these civilian advances 00:09:26.000 --> 00:09:29.067 in much the same way that military R&D 00:09:29.067 --> 00:09:32.000 has given us the internet, the Global Positioning System 00:09:32.000 --> 00:09:35.100 and the jet engine and microchip industries. 00:09:35.100 --> 00:09:37.900 As we design and build vehicles better, 00:09:37.900 --> 00:09:40.800 we can also use them smarter 00:09:40.800 --> 00:09:42.200 by harnessing four powerful techniques 00:09:42.200 --> 00:09:45.100 for eliminating needless driving. 00:09:45.100 --> 00:09:47.200 Instead of just seeing the travel grow, 00:09:47.200 --> 00:09:50.900 we can use innovative pricing, 00:09:50.900 --> 00:09:52.300 charging for road infrastructure by the mile, not by the gallon. 00:09:52.300 --> 00:09:58.100 We can use some smart I.T. to enhance transit 00:09:58.100 --> 00:10:00.533 and enable car sharing and ride sharing. 00:10:00.533 --> 00:10:05.900 We can allow smart and lucrative growth models 00:10:05.900 --> 00:10:09.400 that help people already be near where they want to be, 00:10:09.400 --> 00:10:11.267 so they don't need to go somewhere else. 00:10:11.267 --> 00:10:13.700 And we can use smart I.T. 00:10:13.700 --> 00:10:15.067 to make traffic free-flowing. 00:10:15.067 --> 00:10:19.067 Together, those things can give us the same or better access 00:10:19.067 --> 00:10:23.567 with 46 to 84 percent less driving, 00:10:23.567 --> 00:10:25.667 saving another 0.4 trillion dollars, 00:10:25.667 --> 00:10:31.200 plus 0.3 trillion dollars from using trucks more productively. 00:10:31.200 --> 00:10:33.567 So 40 years hence, when you add it all up, 00:10:33.567 --> 00:10:34.267 a far more mobile U.S. economy 00:10:34.267 --> 00:10:37.900 can use no oil. 00:10:37.900 --> 00:10:42.500 Saving or displacing barrels for 25 bucks 00:10:42.500 --> 00:10:43.900 rather than buying them for over a hundred, 00:10:43.900 --> 00:10:47.167 adds up to over a trillion-dollar net saving 00:10:47.167 --> 00:10:49.267 counting all the hidden costs at zero. 00:10:49.267 --> 00:10:53.600 So to get mobility without oil, 00:10:53.600 --> 00:10:55.700 to phase out the oil, 00:10:55.700 --> 00:10:58.300 we can get it efficient and then switch fuels. 00:10:58.300 --> 00:11:02.367 Those 125 to 240 mile per gallon equivalent autos 00:11:02.367 --> 00:11:06.333 can use any mixture of hydrogen fuel cells, 00:11:06.333 --> 00:11:09.767 electricity and advanced biofuels. 00:11:09.767 --> 00:11:11.867 The trucks and planes can realistically use 00:11:11.867 --> 00:11:15.333 hydrogen or advanced biofuels. 00:11:15.333 --> 00:11:18.967 The trucks could even use natural gas. 00:11:18.967 --> 00:11:20.367 But no vehicles will need oil. 00:11:20.367 --> 00:11:22.467 And the most biofuel we might need, 00:11:22.467 --> 00:11:25.333 just three million barrels a day, 00:11:25.333 --> 00:11:27.433 can be made two-thirds from waste 00:11:27.433 --> 00:11:29.267 without displacing any cropland 00:11:29.267 --> 00:11:32.300 and without harming soil or climate. 00:11:32.300 --> 00:11:33.700 Our team speeds up these kinds of oil savings 00:11:33.700 --> 00:11:37.267 by what we call "institutional acupuncture." 00:11:37.267 --> 00:11:38.667 We figure out where the business logic 00:11:38.667 --> 00:11:39.367 is congested and not flowing properly, 00:11:39.367 --> 00:11:42.533 we stick little needles in it to get it flowing, 00:11:42.533 --> 00:11:43.933 working with partners like Ford and Walmart and the Pentagon. 00:11:43.933 --> 00:11:47.533 And the long transition is already well under way. 00:11:47.533 --> 00:11:51.867 In fact, three years ago mainstream analysts were starting to see peak oil, 00:11:51.867 --> 00:11:53.267 not in supply, but in demand. 00:11:53.267 --> 00:11:59.633 And Deutsche Bank even world oil use could peak around 2016. 00:11:59.633 --> 00:12:03.233 In other words, oil is getting uncompetitive even at low prices 00:12:03.233 --> 00:12:08.233 before it becomes unavailable even at high prices. 00:12:08.233 --> 00:12:11.867 But the electrified vehicles 00:12:11.867 --> 00:12:13.267 don't need to burden the electricity grid. 00:12:13.267 --> 00:12:18.233 Rather, when smart autos exchange electricity and information 00:12:18.233 --> 00:12:21.167 through smart buildings with smart grids, 00:12:21.167 --> 00:12:23.267 they're adding to the grid valuable flexibility and storage 00:12:23.267 --> 00:12:26.133 that help the grid integrate 00:12:26.133 --> 00:12:27.533 varying solar and wind power. 00:12:27.533 --> 00:12:31.133 So the electrified autos 00:12:31.133 --> 00:12:31.833 make the auto and electricity problems 00:12:31.833 --> 00:12:36.133 easier to solve together than separately. 00:12:36.133 --> 00:12:37.533 And they also converge the oil story 00:12:37.533 --> 00:12:38.933 with our second big story, 00:12:38.933 --> 00:12:43.200 saving electricity and then making it differently. 00:12:43.200 --> 00:12:46.367 And those twin revolutions in electricity 00:12:46.367 --> 00:12:49.667 will bring to that sector 00:12:49.667 --> 00:12:51.067 more numerous and profound and diverse disruptions 00:12:51.067 --> 00:12:52.467 than any other sector, 00:12:52.467 --> 00:12:56.767 because we've got 21st century technology and speed colliding head-on 00:12:56.767 --> 00:13:03.400 with 20th and 19th century institutions, rules and cultures. 00:13:03.400 --> 00:13:05.767 Changing how we make electricity gets easier 00:13:05.767 --> 00:13:06.467 if we need less of it. 00:13:06.467 --> 00:13:09.267 Most of it now is wasted 00:13:09.267 --> 00:13:12.633 and the technologies for saving it 00:13:12.633 --> 00:13:14.033 keep improving faster than we're installing them. 00:13:14.033 --> 00:13:18.033 So the unbought efficiency resource 00:13:18.033 --> 00:13:20.933 keeps getting ever bigger and cheaper. 00:13:20.933 --> 00:13:22.333 But as efficiency in buildings and industry 00:13:22.333 --> 00:13:25.967 starts to grow faster than the economy, 00:13:25.967 --> 00:13:28.067 Americans' electricity use could actually shrink, 00:13:28.067 --> 00:13:33.033 even with the little extra use required 00:13:33.033 --> 00:13:35.967 for the efficient electrified autos. 00:13:35.967 --> 00:13:39.333 And we can do this just by reasonably accelerating existing trends. 00:13:39.333 --> 00:13:43.133 Over the next 40 years, buildings, 00:13:43.133 --> 00:13:43.833 which use three-quarters of the electricity, 00:13:43.833 --> 00:13:47.867 can triple or quadruple their energy productivity, 00:13:47.867 --> 00:13:53.100 saving 1.4 trillion dollars, net present value, 00:13:53.100 --> 00:13:56.700 with a 33 percent internal rate of return 00:13:56.700 --> 00:13:59.233 or in English, 00:13:59.233 --> 00:14:01.167 the savings are worth four times of what they cost. 00:14:01.167 --> 00:14:01.867 And industry can accelerate too, 00:14:01.867 --> 00:14:03.267 doubling its energy productivity 00:14:03.267 --> 00:14:07.900 with a 21 percent internal rate of return. 00:14:07.900 --> 00:14:08.600 The key is a disruptive innovation 00:14:08.600 --> 00:14:10.000 that we call integrative design 00:14:10.000 --> 00:14:14.967 that often makes very big energy savings 00:14:14.967 --> 00:14:18.567 cost less than small or no savings. 00:14:18.567 --> 00:14:20.533 That is, it can give you expanding returns, 00:14:20.533 --> 00:14:21.233 not diminishing returns. 00:14:21.233 --> 00:14:25.533 That is how our 2010 retrofit 00:14:25.533 --> 00:14:29.167 is saving over two-fifths of the energy in the Empire State Building -- 00:14:29.167 --> 00:14:33.367 remanufacturing those six and a half thousand windows on site 00:14:33.367 --> 00:14:38.233 into super windows that pass light, but reflect heat. 00:14:38.233 --> 00:14:41.033 plus better lights and office equipment and such 00:14:41.033 --> 00:14:45.433 cut the maximum cooling load by a third. 00:14:45.433 --> 00:14:50.500 And then renovating smaller chillers instead of adding bigger ones 00:14:50.500 --> 00:14:51.900 saved 17 million dollars -- 00:14:51.900 --> 00:14:54.000 a capital cost which helped pay for the other improvements 00:14:54.000 --> 00:14:56.967 and reduce the payback to just three years. 00:14:56.967 --> 00:15:00.867 Integrative design can also increase 00:15:00.867 --> 00:15:01.567 energy savings in industry. 00:15:01.567 --> 00:15:05.867 Dow's billion-dollar efficiency investment 00:15:05.867 --> 00:15:08.367 has already returned nine billion dollars. 00:15:08.367 --> 00:15:10.467 But industry as a whole has another half-trillion dollars 00:15:10.467 --> 00:15:13.400 of energy still to save. 00:15:13.400 --> 00:15:18.867 For example, three-fifths of the world's electricity runs motors. 00:15:18.867 --> 00:15:19.567 Half of that runs pumps and fans. 00:15:19.567 --> 00:15:23.933 And those can all be made more efficient, 00:15:23.933 --> 00:15:24.633 and the motors that turn them 00:15:24.633 --> 00:15:28.267 can have their system efficiency roughly doubled 00:15:28.267 --> 00:15:30.367 by integrating 35 improvements, paying back in about a year. 00:15:30.367 --> 00:15:35.333 But first we ought to be capturing bigger, cheaper savings 00:15:35.333 --> 00:15:38.967 that are normally ignored and that are not in the textbooks. 00:15:38.967 --> 00:15:40.367 For example, pumps, the biggest use of motors, 00:15:40.367 --> 00:15:43.200 move liquid through pipes. 00:15:43.200 --> 00:15:44.600 But a standard industrial pumping loop 00:15:44.600 --> 00:15:49.300 was redesigned to use at least 86 percent less energy, 00:15:49.300 --> 00:15:50.700 not by getting better pumps, 00:15:50.700 --> 00:15:55.267 but just by replacing long, thin, crooked pipes 00:15:55.267 --> 00:15:56.667 with fat, short, straight pipes. 00:15:56.667 --> 00:16:00.267 This is not about new technology, 00:16:00.267 --> 00:16:01.667 it's just rearranging our metal furniture. 00:16:01.667 --> 00:16:04.567 Of course, it also shrinks the pumping equipment 00:16:04.567 --> 00:16:05.267 and its capital costs. 00:16:05.267 --> 00:16:08.533 So what do such savings mean 00:16:08.533 --> 00:16:12.800 for the electricity that is three-fifths used in motors? 00:16:12.800 --> 00:16:15.900 Well, from the coal burned at the power plant 00:16:15.900 --> 00:16:19.067 through all these compounding losses, 00:16:19.067 --> 00:16:21.167 only a tenth of the fuel energy 00:16:21.167 --> 00:16:24.767 actually ends up coming out the pipe as flow. 00:16:24.767 --> 00:16:29.333 But now let's turn those compounding losses around backwards, 00:16:29.333 --> 00:16:34.333 and every unit of flow or friction that we save in the pipe 00:16:34.333 --> 00:16:37.400 saves 10 units of fuel cost, pollution 00:16:37.400 --> 00:16:39.500 and what Hunter Lovins calls "global weirding" 00:16:39.500 --> 00:16:42.533 back at the power plant. 00:16:42.533 --> 00:16:43.933 And of course, as you go back upstream, 00:16:43.933 --> 00:16:47.233 the components get smaller and therefore cheaper. 00:16:47.233 --> 00:16:50.767 Our team has lately found such snowballing energy savings 00:16:50.767 --> 00:16:55.000 in more than 30 billion dollars-worth of industrial redisigns -- 00:16:55.000 --> 00:16:58.667 everything from data centers and chip fabs 00:16:58.667 --> 00:16:59.367 to mines and refineries. 00:16:59.367 --> 00:17:02.300 Typically are retrofit designs 00:17:02.300 --> 00:17:03.700 save about 30 to 60 percent of the energy 00:17:03.700 --> 00:17:04.400 and pay back in a few years, 00:17:04.400 --> 00:17:09.400 while the new facility designs save 40 to 90-odd percent 00:17:09.400 --> 00:17:13.000 with generally lower capital cost. 00:17:13.000 --> 00:17:16.233 Now needing less electricity 00:17:16.233 --> 00:17:16.933 would ease and speed 00:17:16.933 --> 00:17:22.033 the shift to new sources of electricity, chiefly renewables. 00:17:22.033 --> 00:17:25.533 China leads their explosive growth and their plummeting cost. 00:17:25.533 --> 00:17:29.400 In fact, these solar powered module costs 00:17:29.400 --> 00:17:32.533 have just fallen off the bottom of the chart. 00:17:32.533 --> 00:17:34.633 And Germany now has more solar workers 00:17:34.633 --> 00:17:37.533 than America has steel workers. 00:17:37.533 --> 00:17:38.933 Already in about 20 states 00:17:38.933 --> 00:17:42.533 private installers will come 00:17:42.533 --> 00:17:44.633 put those cheap solar cells on your roof with no money down 00:17:44.633 --> 00:17:45.333 and beat your utility bill. 00:17:45.333 --> 00:17:48.833 Such unregulated products 00:17:48.833 --> 00:17:50.233 could ultimately add up to a virtual utility 00:17:50.233 --> 00:17:53.733 that bypasses your electric company 00:17:53.733 --> 00:17:58.933 just as your cellphone bypassed your wireline phone company. 00:17:58.933 --> 00:18:01.167 And this sort of thing gives utility executives the heebee-jeebees 00:18:01.167 --> 00:18:02.567 and it gives venture capitalists sweet dreams.. 00:18:02.567 --> 00:18:06.667 Renewables are no longer a fringe activity. 00:18:06.667 --> 00:18:10.067 For each of the past four years 00:18:10.067 --> 00:18:12.167 half of the world's new generating capacity 00:18:12.167 --> 00:18:14.933 has been renewable, 00:18:14.933 --> 00:18:16.333 mainly lately in developing countries. 00:18:16.333 --> 00:18:19.933 In 2010, renewables other than big hydro, 00:18:19.933 --> 00:18:22.833 particularly wind and solar cells, 00:18:22.833 --> 00:18:26.933 got 151 billion dollars of private investment, 00:18:26.933 --> 00:18:30.533 and they actually surpassed the total installed capacity 00:18:30.533 --> 00:18:31.233 of nuclear power in the world 00:18:31.233 --> 00:18:36.400 by adding 60 billion watts in that one year. 00:18:36.400 --> 00:18:38.500 That happens to be the same amount of solar cell capacity 00:18:38.500 --> 00:18:42.100 that the world can now make every year -- 00:18:42.100 --> 00:18:44.200 a number that goes up 60 or 70 percent a year. 00:18:44.200 --> 00:18:49.133 In contrast, the net additions of nuclear capacity and coal capacity 00:18:49.133 --> 00:18:53.333 and the orders behind those keep fading 00:18:53.333 --> 00:18:57.900 because they cost too much and they have too much financial risk. 00:18:57.900 --> 00:18:59.300 In fact in this country, 00:18:59.300 --> 00:19:00.000 no new nuclear power plant 00:19:00.000 --> 00:19:03.933 has been able to raise any private construction capital, 00:19:03.933 --> 00:19:05.333 despite seven years of 100-plus percent subsidies. 00:19:05.333 --> 00:19:10.367 So how else could we replace the coal-fired power plants? 00:19:10.367 --> 00:19:13.967 Well efficiency and gas can displace them all 00:19:13.967 --> 00:19:18.267 at just below their operating cost 00:19:18.267 --> 00:19:21.067 and, combined with renewables, can displace more than 23 times 00:19:21.067 --> 00:19:24.633 at less than their replacement cost. 00:19:24.633 --> 00:19:25.333 But we only need to replace them once. 00:19:25.333 --> 00:19:28.067 We're often told though 00:19:28.067 --> 00:19:30.833 that only coal and nuclear plants can keep the lights on, 00:19:30.833 --> 00:19:32.233 because they're 24/7, 00:19:32.233 --> 00:19:32.733 whereas wind and solar power are variable, 00:19:32.733 --> 00:19:38.833 and hence supposedly unreliable. 00:19:38.833 --> 00:19:40.233 Actually no generator is 24/7. They all break. 00:19:40.233 --> 00:19:44.333 And when a big plant goes down, 00:19:44.333 --> 00:19:46.433 you lose a thousand megawatts in milliseconds, 00:19:46.433 --> 00:19:49.633 often for weeks or months, often without warning. 00:19:49.633 --> 00:19:51.600 That is exactly why we've designed the grid 00:19:51.600 --> 00:19:55.900 to back up failed plants with working plants. 00:19:55.900 --> 00:19:57.300 And in exactly the same way, 00:19:57.300 --> 00:20:01.600 the grid can handle wind and solar power's 00:20:01.600 --> 00:20:05.933 forecastable variations. 00:20:05.933 --> 00:20:07.933 Hourly simulations 00:20:07.933 --> 00:20:11.900 show that largely, or wholly, renewable grids 00:20:11.900 --> 00:20:13.300 can deliver highly reliable power 00:20:13.300 --> 00:20:16.567 when they're forecasted, 00:20:16.567 --> 00:20:17.267 integrated and diversified 00:20:17.267 --> 00:20:18.667 by both type and location. 00:20:18.667 --> 00:20:23.667 And that's true both for continental areas like the U.S. or Europe 00:20:23.667 --> 00:20:27.967 and for smaller areas embedded within a larger grid. 00:20:27.967 --> 00:20:30.667 That is how, for example, 00:20:30.667 --> 00:20:32.067 four German states in 2010 00:20:32.067 --> 00:20:35.233 were 43 to 52 percent wind powered. 00:20:35.233 --> 00:20:39.767 Portugal was 45 percent renewable powered, 00:20:39.767 --> 00:20:41.000 Denmark 36. 00:20:41.000 --> 00:20:43.100 And it's how all of Europe can shift 00:20:43.100 --> 00:20:45.433 to renewable electricity. 00:20:45.433 --> 00:20:49.633 In America, our aging, dirty and insecure power system 00:20:49.633 --> 00:20:50.333 has to be replaced anyway by 2050. 00:20:50.333 --> 00:20:55.067 And whatever we replace it with 00:20:55.067 --> 00:20:55.767 is going to cost about the same, 00:20:55.767 --> 00:20:59.000 about six trillion dollars at present value -- 00:20:59.000 --> 00:21:01.100 whether we buy more of what we've got 00:21:01.100 --> 00:21:04.367 or new nuclear and so-called clean coal, 00:21:04.367 --> 00:21:05.767 or renewables that are more or less centralized. 00:21:05.767 --> 00:21:11.267 But those four futures at the same cost 00:21:11.267 --> 00:21:11.967 differ profoundly in their risks, 00:21:11.967 --> 00:21:15.867 around national security, 00:21:15.867 --> 00:21:17.267 fuel, water, finance, technology, 00:21:17.267 --> 00:21:18.667 climate and health. 00:21:18.667 --> 00:21:22.233 For example, our over-centralized grid 00:21:22.233 --> 00:21:25.933 is very vulnerable to cascading 00:21:25.933 --> 00:21:29.567 and potential economy-shattering blackouts 00:21:29.567 --> 00:21:33.867 caused by bad space weather other natural disasters 00:21:33.867 --> 00:21:34.567 or a terrorist attack. 00:21:34.567 --> 00:21:35.967 But that blackout risk disappears, 00:21:35.967 --> 00:21:39.567 and all of the other risks are best managed, 00:21:39.567 --> 00:21:40.967 with distributed renewables 00:21:40.967 --> 00:21:47.067 organized into local micro-grids that normally interconnect, 00:21:47.067 --> 00:21:47.767 but can stand alone at need. 00:21:47.767 --> 00:21:48.467 That is, they can disconnect fractally 00:21:48.467 --> 00:21:53.767 and then reconnect seamlessly. 00:21:53.767 --> 00:21:55.167 That approach is exactly what the Pentagon is adopting 00:21:55.167 --> 00:21:55.867 for its own power supply. 00:21:55.867 --> 00:22:00.133 They think they need that; how about the rest of us that they're defending? 00:22:00.133 --> 00:22:00.833 We want our stuff to work too. 00:22:00.833 --> 00:22:05.233 At about the same cost as business as usual, 00:22:05.233 --> 00:22:08.100 this would maximize national security, 00:22:08.100 --> 00:22:11.733 customer choice, entrepreneurial opportunity 00:22:11.733 --> 00:22:12.433 and innovation. 00:22:12.433 --> 00:22:20.200 Together, efficient use and diverse dispersed renewable supply 00:22:20.200 --> 00:22:21.600 are starting to transform the whole electricity sector. 00:22:21.600 --> 00:22:24.400 Traditionally utilities build 00:22:24.400 --> 00:22:25.800 a lot of giant coal and nuclear plants 00:22:25.800 --> 00:22:26.500 and a bunch of big gas plants 00:22:26.500 --> 00:22:28.733 and maybe a little bit of efficiency renewables. 00:22:28.733 --> 00:22:32.467 And those utilities were rewarded, 00:22:32.467 --> 00:22:33.167 as they still are in 34 states, 00:22:33.167 --> 00:22:36.233 for selling you more electricity. 00:22:36.233 --> 00:22:40.600 However, especially where regulators 00:22:40.600 --> 00:22:42.000 are not instead rewarding cutting your bills, 00:22:42.000 --> 00:22:46.967 the investments are shifting radically 00:22:46.967 --> 00:22:49.867 toward efficiency, demand response, cogeneration, 00:22:49.867 --> 00:22:52.667 renewables and ways to knit them all together reliably 00:22:52.667 --> 00:22:54.867 with less transmission 00:22:54.867 --> 00:22:55.567 and little or no bulk electricity storage. 00:22:55.567 --> 00:23:00.833 So our energy future is not fate, but choice, 00:23:00.833 --> 00:23:01.533 and that choice is very flexible. 00:23:01.533 --> 00:23:05.133 In 1976, for example, 00:23:05.133 --> 00:23:05.833 government and industry insisted 00:23:05.833 --> 00:23:09.433 that the amount of energy needed to make a dollar of GDP 00:23:09.433 --> 00:23:11.800 could never go down. 00:23:11.800 --> 00:23:13.200 And I heretically suggested it could go down several-fold. 00:23:13.200 --> 00:23:16.833 Well that's what's actually happened so far. 00:23:16.833 --> 00:23:17.533 It's fallen by half. 00:23:17.533 --> 00:23:20.900 But with today's much better technologies, 00:23:20.900 --> 00:23:24.533 more mature delivery channels and integrative design, 00:23:24.533 --> 00:23:26.633 we can do far more and even cheaper. 00:23:26.633 --> 00:23:30.433 So to solve the energy problem, 00:23:30.433 --> 00:23:33.000 we just needed to enlarge it. 00:23:33.000 --> 00:23:34.400 And the results may at first seem incredible, 00:23:34.400 --> 00:23:34.900 but as Marshall McLuhan said, 00:23:34.900 --> 00:23:40.067 "Only puny secrets need protection. 00:23:40.067 --> 00:23:44.367 Big discoveries are protected by public incredulity." 00:23:44.367 --> 00:23:49.233 Now combine the electricity and oil revolutions, 00:23:49.233 --> 00:23:49.933 both driven by modern efficiency, 00:23:49.933 --> 00:23:53.013 and you get the really big story, reinventing fire, 00:23:53.029 --> 00:23:58.682 where business enabled and sped by smart policies in mindful markets 00:23:58.682 --> 00:24:03.444 can lead the United States completely off oil and coal by 2050, 00:24:03.444 --> 00:24:06.533 saving 5 trillion dollars, 00:24:06.533 --> 00:24:08.618 growing the economy 2.6-fold, 00:24:08.618 --> 00:24:11.200 strengthening out national security, 00:24:11.200 --> 00:24:12.600 oh, and by the way, by getting rid of the oil and coal, 00:24:12.600 --> 00:24:16.833 reducing the fossil carbon emissions by 82 to 86 percent. 00:24:16.833 --> 00:24:21.167 Now if you like any of those outcomes, 00:24:21.167 --> 00:24:21.867 you can support reinventing fire 00:24:21.867 --> 00:24:25.467 without needing to like all of them 00:24:25.467 --> 00:24:26.167 and without needing to agree about which of them is most important. 00:24:26.167 --> 00:24:31.767 So focusing on outcomes, not motives, 00:24:31.767 --> 00:24:35.400 can turn gridlock and conflict 00:24:35.400 --> 00:24:39.333 into a unifying solution to America's energy challenge. 00:24:39.333 --> 00:24:41.467 This also turns out to be the best way 00:24:41.467 --> 00:24:42.867 to cope with global challenges -- 00:24:42.867 --> 00:24:46.500 climate change, nuclear proliferation, 00:24:46.500 --> 00:24:50.100 energy insecurity, energy poverty -- 00:24:50.100 --> 00:24:52.900 all of which make us less safe. 00:24:52.900 --> 00:24:55.633 Now our team at RMI helps smart companies 00:24:55.633 --> 00:24:57.033 to get unstuck and speed this journey 00:24:57.033 --> 00:25:02.733 by six central initiatives, with some more hatching. 00:25:02.733 --> 00:25:06.967 Of course there's still a lot of old thinking out there too. 00:25:06.967 --> 00:25:07.667 Former oil man Maurice Strong said, 00:25:07.667 --> 00:25:08.367 "Not all the fossils are in the fuel." 00:25:08.367 --> 00:25:13.333 But as Edgar Woolard, who used to chair Dupont, reminds us, 00:25:13.333 --> 00:25:19.033 "Companies hampered by old thinking won't be a problem 00:25:19.033 --> 00:25:23.367 because," he said," they simply won't be around long-term." 00:25:23.367 --> 00:25:27.200 I've described not just a once-in-a-civilization 00:25:27.200 --> 00:25:30.100 business opportunity, 00:25:30.100 --> 00:25:32.200 but one of the most profound transitions 00:25:32.200 --> 00:25:35.900 in the history of our species. 00:25:35.900 --> 00:25:36.600 We humans are inventing a new fire, 00:25:36.600 --> 00:25:39.667 not dug from below, 00:25:39.667 --> 00:25:41.067 but flowing from above; 00:25:41.067 --> 00:25:45.367 not scarce, but bountiful; 00:25:45.367 --> 00:25:46.067 not local, but everywhere; 00:25:46.067 --> 00:25:49.667 not transient, but permanent; 00:25:49.667 --> 00:25:51.767 not costly, but free. 00:25:51.767 --> 00:25:55.367 And but for a little transitional tale of natural gas 00:25:55.367 --> 00:25:59.667 and a bit of biofuel grown in ways that sustain and endure, 00:25:59.667 --> 00:26:02.100 this new fire is flameless. 00:26:02.100 --> 00:26:06.533 Efficiently used, it really can do our work 00:26:06.533 --> 00:26:08.633 without working our undoing. 00:26:08.633 --> 00:26:16.500 Each of you owns a piece of that five trillion-dollar prize. 00:26:16.500 --> 00:26:17.200 And our new book "Reinventing Fire" 00:26:17.200 --> 00:26:18.600 describes how you can capture it. 00:26:18.600 --> 00:26:21.500 So with the conversation just begun 00:26:21.500 --> 00:26:22.900 at ReinventingFire.com, 00:26:22.900 --> 00:26:26.500 let me invite you each 00:26:26.500 --> 00:26:28.600 to engage with us and with each other, with everyone around you, 00:26:28.600 --> 00:26:31.500 to help make the world richer, fairer, 00:26:31.500 --> 00:26:32.200 cooler and safer 00:26:32.200 --> 00:26:37.200 by together reinventing fire. 00:26:37.200 --> 00:26:41.067 Thank you. 00:26:41.067 --> 00:26:42.467 (Applause)