Remarks on Energy in Pottstown, Pennsylvania

Thank you all. Please be seated. Thanks for the warm welcome. If I talk too long, it's going to be even warmer. [Laughter] I really appreciate the chance to come to the Limerick Generating Station. I'm glad to see it in action. More importantly, I was glad to see the people working here, glad to meet them, glad to get to know them. I appreciate their strong dedication to safety. I appreciate their dedication to the consumers you serve.

This plant serves 2 million homes in the area, and it does so in a way that does not require us to pollute the air. It's a perfect example of how we can grow our economy and protect our environment at the same time. And so thanks for receiving me. I'm honored to be here.

I thank John Rowe for introducing me, and thanks for coming over from Chicago. Appreciate you being here. I want to thank Chris Crane. I want to thank Ron DeGregorio. Thank you for having me, Ron. I want to thank the mayor, Sharon Valentine-Thomas, of the Borough of Pottstown. Thanks for coming, Madam Mayor. I appreciate you being here. I want to thank all the folks from the local government—sorry about clogging the neighborhoods coming through, but thanks. [Laughter] Appreciate you letting me come by.

I want to talk about how the United States of America can continue to be the economic leader of the world. First of all, I think it's important that we're the economic leader of the world, because when you're the leader, it helps the folks who live in your country. See, it matters if we're on the cutting edge of change. It matters to people working every day in America if we're creating strong economic growth.

Today, we are creating strong economic growth. I mean, this economy of ours is moving forward with a full head of steam— fifth year in a row of uninterrupted growth. Our economy grew faster than any other major industrialized nation in the world. We added 5.2 million new jobs since August of 2003. The national unemployment rate is 4.7 percent. Productivity is high, and that's important. A productive society will yield a higher standard of living for our people. Hourly compensation grew at an annual rate of 5.7 percent in the first quarter of this year. Our workers are taking bigger—home bigger paychecks. The standard of living is on the rise. After-tax income is up. Things are good.

And the fundamental question is, can you keep them that way, see? And there's a lot of competition in the world that creates some uncertainty and anxiety amongst our people. And the temptation for some is to say, "Well, we can't compete anymore so let's protect ourselves and let's withdraw; let's become isolationists." I think that would be a wrong approach by our country. See, we ought not to fear the future; we ought to shape the future. We ought to be confident in our ability to be able to compete and to remain the most innovative country in the world.

And so here are some ideas. First, if we want to be the economic leader in the world so our people can prosper, we need to keep taxes low. We need to be able to be a society that says, you get to earn more of that which you earn.

As you might recall, we went through a pretty tough time in this country over the past 5 years. We had a recession, corporate scandals, a stock market correction, a attack on our country. We went to war to defend ourselves; we've had high energy prices; and we had natural disasters. And yet this economy of ours is strong. And I believe the reason why is, is because of the tax cuts we passed in Washington, DC.

We believe that if you have more money in your pocket to save, spend, or invest, the economy grows. And so one way to make sure that we're the economic leader in the world is to make sure the tax cuts we passed are permanent. Now, people say, "Well, if you make the tax cuts permanent, you can't balance the budget." Well, let me talk a little bit about how Washington works. I've been there long enough to be able to give you an accurate report. [Laughter]

Don't believe it when they say they're going to raise your taxes to balance the budget. They're going to raise your taxes and figure out new ways to spend the money. The best way to balance the budget is to keep progrowth economic policies in place. And, by the way, last year, because our economy was growing, we generated $100 billion more for the Treasury than we thought. And this year, because of the economy growing strong, we're generating better rates than we did last year.

And so the best way to balance the budget is to keep growing the economy so we collect more tax revenues and be wise about spending your money. See, in Washington, everything sounds good there; every program sounds fantastic. But Government, in order to be wise about spending your money, has got to learn to set priorities. And my priority is this: So long as we have a soldier in harm's way, he or she will have what it takes to achieve victory and secure America.

We're on our way to cutting the deficit in half by 2009. Congress is now debating a supplemental bill. It's money to help fund our troops in Iraq, as well as helping the victims in Katrina. And I've made it very clear that I intend to participate with them in keeping the spending down. And if they exceed the $92.2 billion request, plus monies for avian flu, I'm going to veto the bill. See, that's one way you keep fiscal discipline in Washington, DC.

We'll be competitive if we keep taxes low and be wise about how we spend your money. We'll be competitive, by the way, if we're smart about improving education for our people. See, this is a global economy, whether people like it or not. And the jobs of the 21st century will be either here in America or wherever the workforce is trained to fill those jobs. And therefore, it's important for us to make sure we educate our children early and emphasize math and science so our kids have got the skills necessary to fill those jobs.

We changed how we view public education in Washington. We passed the No Child Left Behind Act, see. It basically said, we're going to make sure we fulfill our commitment to Title I students, but we're starting to ask some questions—questions that I'm sure are asked at this plant: Are you meeting objectives, for example? If you set a goal, are you meeting those goals? And so we set some goals: How about every child learning to read at grade level by the third grade? That didn't seem like an unrealistic goal to me. As a matter of fact, it was a necessary goal.

And then we said to the States, you measure. We're going to get you some money, but you measure to show us whether or not we're meeting the goal. And if you're not meeting the goal, figure out why. See, you can't solve a problem unless you diagnose the problem. And so the No Child Left Behind Act basically says, we're going to diagnose problems early and solve them, before it's too late. This business about shuffling kids through the school—through our schools, based upon age, didn't work. It wasn't fair. It wasn't right. And so the No Child Left Behind Act says, we're going to measure early, and we're going to help children who have fallen behind in reading early, and then we're going to extend that to math.

See, one of the interesting things is because we measure, we know that we're doing fine in math in the eighth grade. But children get to high school—relative to other countries, we're not doing fine in math. And we better do something about it now if we want to be the economic leader of the world.

So we've got a plan to, one, make sure the same standards applied to reading for early grades are applied to math. If we measure in the eighth grade or ninth grade and you're falling behind, you're going to get extra help.

Secondly, advanced placement programs work. I bet I'm looking at some folks out here who took AP when they were in high school. AP means high standards. But we don't have enough teachers around the country to teach AP, so we've got a plan to train 70,000 Advanced Placement teachers to keep raising those standards.

We want to have 30,000 adjunct professors in our classrooms in high school and junior—sometimes it's not cool to be involved with science—and yet it is cool. And we need people who are on the frontlines of science explaining that. I went to a school in Maryland the other day, and there was a NASA scientist there, explaining to junior high kids why the sciences matter and why it's fun to be in science.

We're going to make sure our Pell grants—which, by the way, have expanded by a million kids since I've been the President—continue to have incentives in there for children to take rigorous academics coming out of high school and the first 2 years of college, and then if they maintain a 3.0 average or are taking math, science, or critical language, there's an additional $4,000 on top of their Pell grant. In other words, this is an effort to make sure that we have a workforce that can compete in a global economy so we remain the economic leader of the world.

I want to talk about energy, see. If we don't get it right in energy, we can have the most educated workforce in the world, but we're not going to be able to compete. We can have the lowest taxes in the world, the least regulations, the fewest lawsuits, but if we haven't done something about our energy situation, we're not going to be able to compete in the world.

And so that's why I've come to this important powerplant, to talk about how the United States can have a diversified energy policy that makes us less dependent on foreign sources of oil and more dependent on renewable sources of energy.

Now, one of the things I want to start off by telling the—telling you all, and I hope others are listening, is that over the past 30 years, our economy has grown three times faster than our energy consumption. Isn't that interesting statistics? In other words, we're becoming more technologically advanced. And during that same period of time, we created more than 55 million jobs while cutting air pollution by 50 percent.

So what I believe the American people should understand is that we can put policies in place that encourage economic growth so you've got a better standard of living and, at the same time, become less dependent on energy from overseas and protect the environment.

So what do we need to do? Well, the first thing we got to do is understand that we've got to change our driving habits over time. You've seen the price of gasoline going up. One of the reasons why your price of gasoline is going up is because demand for oil is increasing in places like India and China, and the supply for oil is not meeting that demand. And the key ingredient for gasoline is crude oil. So when the Chinese economy is growing or the Indian economy is growing, and that demand is going up, so is your price at the pump.

One way to make sure the price at the pump doesn't go up as global demand increases for hydrocarbons is to figure out how to drive our cars with different kinds of fuels, such as ethanol. One of the really interesting developments that's taking place now in America is the use of corn-based ethanol—pretty cool deal, isn't it, for the President to be able to say, you know, we're growing a lot of corn—[laughter]— and we're less dependent on foreign sources of oil. It's coming—particularly in the Midwest right now, there's a lot of ethanol pumps and plants being developed there to manufacture ethanol from corn.

We've got to do more, though, if we're going to become less dependent on foreign sources of oil, when it comes to ethanol. And so we're spending a lot of your money to develop technologies that will enable us to be able to manufacture ethanol from wood chips or switchgrass. Somebody said, "What is switchgrass?" I said, "Well, it's grass that looks like a switch that grows in dry country." In other words, there's all kinds of opportunities to manufacture ethanol, and we're exploring ways to do so. America has always been on the leading edge of technology and research and development, and here's an area where we've got to stay on the leading edge of change.

Another way to help reduce our use of gasoline is through hybrid vehicles. They're coming; they're coming on the market. As a matter of fact, the energy bill I signed actually will pay you—give you a tax credit if you buy a hybrid. We're trying to stimulate demand through the Tax Code. It makes sense. But there's going to be an additional breakthrough—or additional breakthroughs—when it comes to hybrid vehicles, starting with the development of a battery that will enable you to drive your first 40 miles on electricity. And the Federal Government is very much involved in this research. We're spending your money, again, on research to help fund breakthroughs for battery technologies that will enable you to drive a plug-in hybrid battery.

And, oh, by the way, on ethanol, just one thing I forgot to tell you is that there are 5 million flex-fuel vehicles on the road today. Flex-fuel means you can either have gasoline or ethanol or a combination of the two. You've probably got one and you don't even know it. The technology—the barrier to change is not the automobile; it is the ability to make the fuel in quantities—economic quantities so we can get them to you at the pump.

And same with hybrid batteries; they're coming. Hybrid, plug-in hybrid vehicles with new batteries, they're coming your way. And one of the reasons why is because the Government has entered into research partnerships with the private sector to accelerate these technologies, all aimed at making us less dependent on oil.

A third way to help this country remain an economic leader when it comes to the cars you drive is hydrogen. We spend about a—over a billion dollars of research to bring hydrogen to the marketplace. One fellow reminded me, wisely, it costs—it takes quite a bit of power to make hydrogen. An interesting way to make hydrogen on an economic basis would be through nuclear power, see. But we're spending money and time and effort, all aimed at making sure that the automobiles of the future will require less crude oil. And we're close to some significant breakthroughs.

It's going to take time to move away from the hydrocarbon economy to the hydrogen economy, and in the meantime, it seems like it makes sense to me to do something about the refinery capacity of the United States. Like, if you're worried about the price of gasoline—you don't like it when your price got over $3—and I don't blame you—you might want to ask the question, how come the Government isn't working hard to expand refinery capacity so that there's more gasoline? If you have more gasoline on the market relative to demand, guess what—it takes the pressure off price.

We haven't built a new refinery in the United States since the 1970s. The regulatory burden is a lot. You're kind of used to that here in this industry. And so we got to cut through all that business. If we're serious about helping our consumers and getting more gasoline to the market, we got to have regulatory relief. I suggested to Congress that we put new refineries on abandoned military facilities. It seemed to make sense to me. And so we need to be wise about these policies so that we can say to the American people, we're on our way out of the hydrocarbon era. But in the meantime, let's be thoughtful of the consumers here in the United States.

We're also going to need a lot of electricity in the future. Electricity demand is projected to increase by nearly 50 percent over the next 25 years. That's a lot. And we better be wise about how we implement a strategy to meet that demand; otherwise, we're not going to be the economic leader; otherwise, our people aren't going to be having the good jobs that we want them to have; otherwise, your children and my children, our grandchildren are not going to have the bright, hopeful America that we want for them.

Now, one of the things that people have got to understand is that we get our—we generate our electricity from four sources: coal—it's about 50 percent; nuclear power—about 20 percent; natural gas—18 percent; and then other renewable sources like hydroelectric, solar, and wind power. And that's the mix; that's the energy mix.

Coal is by far the most abundant and affordable energy resource. We got about 240 years at current rates of consumption. It's a valuable asset for the United States. The problem is, coal isn't—when you burn it, it isn't clean. It doesn't meet our standards. It's not—it doesn't enable us to say, you can grow your economy and, at the same time, protect the environment like we want.

And so we're developing clean coal technology. We're spending over $2 billion in a 10-year period to be able to say to the American people that we're using the money wisely to determine whether or not we can have zero-emissions coal-fired powerplants. It's in our interests that we do that. It makes sense. About 2012, under the FutureGen Initiative, we think we will build the first powerplant to run on coal and remove virtually all pollutants.

Natural gas is an important commodity. By the way, we can explore for natural gas in environmentally friendly ways. And we ought to be exploring for natural gas in the ANWR, as well as off the gulf coast of the United States.

Here's another interesting way to help make sure there's enough natural gas for this economy to grow—by the way, natural gas, as you know, is not just used for power. It's used for fertilizers, a variety of uses. You can liquefy natural gas; you can put it in a ship, and you can send it long distances and still have an economic product. And there are places in this world where there's a lot of natural gas—a lot. And they're building liquefied production facilities. And they put them on these ships—but we don't have any places to off-load it in the United States. We got some, but not enough.

If we're really interested in diversifying our energy sources and making sure the American people have got enough energy to watch this economy grow, we have got to have LNG sites to offload the gas from abroad. And so what we've done is, I signed a new bill, energy bill, that clarifies Federal authority to license new sites, that reduces the bureaucratic obstacles to opening up the terminals and streamlines the development. It's in your interest that we enable liquefied natural gas to come into our country so that we can help take the burden off some of the pricing pressures that we're inevitably going to feel with demand going up and not enough electricity supply.

Thirdly, about 6 percent of the continental U.S. is highly suitable for the construction of wind turbines. And this is a really interesting opportunity for the country—they ought to put one big one in Washington, DC. [Laughter] They say—the experts tell me that this area alone has the potential to supply up to 20 percent of our Nation's electricity. I think that's an interesting opportunity. I don't know if it's true or not, but it's certainly worth trying to find out, in order to make sure this country has got a bright future. And so we got $44 million for wind energy research. And the goal is to expand the use and lower the cost of wind turbine technology.

In other words, we're constantly researching and looking. I don't know if you know this or not, but the Federal Government does spend money on research in a variety of fronts, and it should. And I intend to double the basic—the budget for basic research over the next 10 years. The iPod—like, I like to ride my mountain bike and plug in the iPod. The technology for the iPod came as a result of Federal research. The Internet came about because of defense money research.

So we're spending money on research. The reason I keep repeating that is not only is it going to help us diversify our energy sources and make us competitive in the world, but it also helps make sure America is always on the leading edge of technological change.

Solar energy—the dream in solar energy is to develop technology so that someday your house is like a little generating plant, and if you don't use the power, you feed it back into the grid. It's possible, but it's not going to be possible if we don't spend money on research and development. So we're spending $150 million to combine Government money with private research money in solar technologies to see if we can't help foster technologies that will be able to capture the sun, feed it into your house, generate enough electricity, and if you've got a little excess, feed it back into the grid. I think that's a pretty interesting idea, and it's certainly one worth exploring.

Finally, I want to talk about nuclear power—a subject you all are very familiar with. It is a really important way to meet our goals, which is to have abundant, affordable, clean, and safe sources of energy. The important thing for the American people to understand is this concept: One, nuclear power is abundant and affordable. In other words, you have nuclear powerplants, you can say, we've got an abundant amount of electricity. And once you get the plant up and running, the operating costs of these plants are significantly lower than other forms of electricity plants, which means the energy is affordable.

As I mentioned, nuclear power—it's the second leading source of electricity here. We have 100 nuclear powerplants that operate in 31 States. Now, we haven't built one in a long period of time.

People in our country are rightly concerned about greenhouse gases and the environment, and I can understand why; I am too. As a matter of fact, I try to tell people, let's quit the debate about whether greenhouse gases are caused by mankind or by natural causes; let's just focus on technologies that deal with the issue. Nuclear power will help us deal with the issue of greenhouse gases. Without nuclear energy, carbon dioxide emissions would have been 28 percent greater in the electricity industry in 2004. Without nuclear power, we would have had an additional 700 million tons a year of carbon dioxide, and that's nearly equal to the annual emissions from 136 million passenger cars. Nuclear power helps us protect the environment.

And nuclear power is safe. It is safe because of advances in science and engineering and plant design. It is safe because the workers and managers of our nuclear powerplants are incredibly skilled people who know what they're doing.

For the sake of economic security and national security, the United States of America must aggressively move forward with the construction of nuclear power-plants. Other nations are. Interestingly enough, France has built 58 plants since the 1970s and now gets 78 percent of its electricity from nuclear power. I think that's an interesting statistic, isn't it? The United States hasn't ordered a plant since the 1970s, and yet France has not only ordered them, they built 58 plants. And 78 percent of their electricity comes from nuclear power. They don't have to worry about natural gas coming from somewhere else. They worry about it, but they don't have to worry about it to the extent that we do.

China has 9 nuclear plants in operation, and they got—plan to build 40 more over the next two decades. They understand that in order to be an aggressive nation, an economic nation that is flourishing so their people can benefit, they better do something about their sources of electricity. They see it. India—I just came from India—they're going to build some nuclear powerplants.

To maintain our economic leadership, we got to do it again. And so here's the strategy. First, in the energy bill I signed in 2005, there are loan guarantees, production tax credits, Federal risk insurance for the builders of new plants. In other words, we said, this is an industry that hadn't got much going since the seventies. It's an overregulated industry. It's highly risky because of the regulations to try to build a plant. People don't know this, but you get yourself a design for a nuclear powerplant; you start spending money for plans and engineering plans and everything; you get building; and all of the sudden, somebody can shut you down. And that makes it awfully difficult to take risk, if a lawsuit can cause you to spend enormous sums of money and have no productive use of the money spent.

And so we got together with the Congress and said, "Well, how—what can we do to create incentives to show the industry that we're serious about moving forward?" Well, one is loan guarantees, and that gives investors confidence that this Government is committed to the construction of nuclear powerplants. Secondly is production tax credits, and those credits will reward investments in the latest advanced nuclear power generation.

In other words, there's incentives—loan guarantee is an incentive, tax credits are incentives, Federal risk insurance. What the Federal risk insurance says—is offered for the first six new powerplant—nuclear powerplants. And the insurance helps protect builders of the plants against lawsuits or bureaucratic obstacles and other delays beyond their control. We have got what's called the Nuclear Power 2010 Initiative, which is a $1.1 billion partnership between the Federal Government and the industry to facilitate new plant orders. In other words, I have said, we need more nuclear powerplants, and here's a strategy to get them going, see. Here's a way to say to the industry, we're serious about this.

This time last year, only two companies were seeking to build nuclear powerplants. Now 16 companies have expressed an interest in new construction, and they're considering as many as 25 new plants, trying to get these plants—construction started by the end of this decade. I want it to be said that this generation of folks had the foresight necessary to diversify our—or to continue to diversify electricity supply and recognize that nuclear power is safe, and we did something about it. We just didn't mark our time. We actually did something about it so a generation of Americans coming up will be able to have a better America.

I understand the issue of waste, and we've got to do something about it. We've got to be wise about nuclear waste. I'm a believer that Yucca Mountain is a scientifically sound place to send the waste, and I would hope that the United States Congress would recognize that as well.

I also recognize that we can do something on a reprocessing front. And so I got our administration to commit to the Global Nuclear Energy Partnership. I think you'll find this interesting; at least I did. Under the partnership, America is going to work with nations that have already got an advanced civilian nuclear energy program, such as France and Japan and Russia, and we're going to use new technologies that effectively and safely recycle spent nuclear fuel. In other words, we're coming together to say, how can we do a better job of reprocessing and recycling fuel?

And the reason that's important, at least for our fellow citizens to understand, is it will reduce the amount of the toxicity of the fuel and reduce the amount we have to store. To me, it's a smart way to combine with others to reduce storage requirements for nuclear waste by up to 90 percent. It's a good way to work with other nations that are spending money on research and development as well. It's a way to, kind of, leverage up an investment. We're going to—I've asked Congress to spend $250 million on this partnership. I hope they follow through with it. It is a necessary expenditure of money to make sure that the nuclear power industry can move forward with confidence, and the American people move forward with confidence as well.

And so here are some ideas—not only ideas; this is what we're doing; this has gone from idea to action. What I'm telling you is, is that I understand the need to get off oil. I understand the need to work on renewable sources of energy. And I'm pleased to report we're working with Congress to do it. We're spending your money on research and development to find interesting technologies. You know, I hope that when my grandchildren and some of your children start taking their driver's test, they'll be cranking up a hydrogen-powered automobile, with hydrogen produced from electricity generated from plants such as these.

We have a duty to think about the problems this country is going to face. Listen, this economy is good, and I want to keep it that way; but I also want to make sure it's good 10 years from now. And I want to make sure that this global economy, this world that is becoming more connected, is one that doesn't cause us to fear and to neglect our duties, but that we put policies in place that enable us to remain confident, that we're an entrepreneurial society, that we're well-educated people, that we're willing to work hard to raise our families and put bread on the table. And we've got to make sure we have a good energy policy to do that.

I want to thank you for giving me the chance to come and share with you today what the country is doing right now. I want to thank you very much for showing what is possible. I appreciate your hard work here.

May God bless you all.