Remarks on Energy in Wilmington, Delaware

Thank you all. Please be seated. Thanks for coming. Thanks for such a warm welcome here in Delaware. I thank you—for those of you who stayed up for the speech last night, thanks. [Laughter] If you're 60 and over, it's a little late to stay up; I understand. But it's exciting always to go in front of the Congress. And I appreciate the good Senator, Tom Carper, for joining us, and thanks for bringing along Martha, a DuPont alumna, by the way.

And I want to thank Congressman Mike Castle as well, for joining me here in Delaware. And thanks for paying attention last night. [Laughter] I asked Castle if he stayed awake for the whole thing, and he said, "Well, just the first 55 minutes." And I said, "Well"—[laughter].

I'm excited to be here to talk about what I talked—part of what I talked about last night. And I can't think of a better place to talk about innovation, technology change, and a better tomorrow than DuPont. The history of this company—[applause]. I thank Chad Holliday for inviting me here and introducing me to some of your fellow workers who are really putting this country on the leading edge of technological change. And I want to spend a little time talking about this energy initiative.

But first I want to thank all the good folks at DuPont for really leading with your brains. And as the Secretary of Energy, Sam Bodman, told me coming in—he said, when he was a—see, he's, like, a graduate from MIT, which—so he's a smart guy, and I'm the President. But anyway—[laughter]—it's the way it works sometimes, you know. He said, when he went to MIT, they looked at DuPont as a case study on how to make sure science and practical applications came together. And that's what I saw today—I'm going to spend—as I said, I'm going to spend a little time talking about. And so I want to thank—Chad, thank you and the team for inviting me and all the good employees for taking time to come and visit.

I want to thank the Governor. Madam Governor, thank you for coming. I appreciate Governor Minner for joining us. Being a Governor is a great job, and I kind of know what I'm talking about. [Laughter] And I know you agree with me. I know Carper agrees with me, and I know Castle agrees with me as well. [Laughter] And I know Pete du Pont agrees with me, and I'm proud that former Governor Pete du Pont has joined us here today as well. So thank you current Governor and former Governor for joining us.

Speaker, thanks for being here. I'm proud to see you again. Charlie Copeland, thank you for coming as well. For the statehouse folks, I appreciate you serving; for local government, thanks as well.

I'm here to talk about an interesting opportunity for our country. I made the case last night to the American people that we have got to do something about our dependence on oil for two reasons: One, dependence on oil provides an economic and national security risk, a problem that this country better start dealing with in a serious fashion now, before it becomes acute. And second, we've got to be wise stewards of the environment, and dependency on oil makes it harder to be wise stewards of the environment.

And what's interesting about the debate is, it's the confluence of national security and economic security concerns and environmental concerns that come together and can be solved at the same time by technologies. It's really what's begun to evolve here in America. In other words, we can get beyond the post-Kyoto—the pre-Kyoto era with a post-Kyoto strategy, the center of which is new technologies.

Now I said last night—and I want to spend a little time talking about it—that the American people have got to understand that when you're dependent on oil, particularly from overseas, if demand goes up for the product in other countries relative to supply, the price of product is going to go up here. We're in a global economy. And so when the Chinese economy grows or the Indian economy grows— which we want it to do, by the way—when their economy grows, it provides markets for your products. So it's in our interests that we trade. But we've got to understand that when the globe becomes interconnected economically, the demand increases in other countries can cause the price of oil to go up here, and it has an economic effect on our own economy. The more dependent we are on oil from overseas, the more likely it is somebody else's demand is going to affect what you pay at the pump for gasoline.

Secondly, if you're dependent on oil overseas, it means that—and a hostile regime, a regime hostile to the United States produces that oil—you become vulnerable to the activity of a hostile regime. In other words, somebody doesn't like us; they produce the oil; they decide to do something about it; they can affect us. That's— when I talk about the national security risks, that's what I mean. In other words, you don't want your President sitting in the Oval Office worried about the activities of a hostile regime that could have all kinds of impacts on our security, starting with economic security.

Dependence on oil, as well, means that if a terrorist were able to destroy infrastructure somewhere else in the world, it's going to affect what you pay for at the gasoline pump. In other words, as we learned, the terrorists attacked us in brutal ways; they attacked us by flying airplanes into our buildings. But we're also vulnerable to attacks through infrastructure around the world that could cause your price, the price you pay, to go up.

And so we've got to do something about it. In other words, Government has got to be more than just talkers; we got to be problem-solvers. That's what the American people expect us to do. That's why I said last night: It doesn't matter what side of the aisle we sit on; what the American people expect is for people on both sides of the aisle to come together and solve problems. And this is a problem, and I'm going to work with Congress to get it solved.

Now, the good news is, is that we're on the verge of some unbelievable technological breakthroughs. At this company, you've got 2,500 scientists. Some of the smartest people in our country work here, all trying to develop new technologies. This isn't anything new for DuPont, by the way. This is like what you've been doing for a long time, but trying to develop new technologies to help us solve this problem. And that's why I've come here. You're employing the best minds possible to address the problem of economic and national security and environmental issues, because we're dependent on oil. And the American people have got to know that you're making progress.

As an aside, when I talked about the immigration bill last night, I also want you to know, I understand that we need to make sure that when a smart person from overseas wants to come and work in Du-Pont, it's in our interests to allow him or her to do so. We've got to expand what's called H1B visas. I know the Senator and the Congressman understand that. I'm looking forward to working with Congress to do just that. It makes no sense, by the way—I know, I'm getting off topic here— [laughter]—but I feel strongly about what I'm telling you. It makes no sense to say to a young scientist from India, "You can't come to America to help this company develop technologies that help us deal with our problems." So we've got to change that as well, change that mindset in Washington, DC. I know we can work together on that.

So we're spending a lot of money, by the way—your money—on developing—on helping to develop new technologies. I think it's an appropriate use of taxpayers' money, to spend on developing new technologies to help us deal with problems that affect today and the future for your children. We spent about 10 billion so far on the technologies that are—I think are going to help change America and our habits, and we're going to spend more.

Part of my request to Congress is going to be—we want to put $2.7 billion of your money to help concerns and smart people develop new ways of powering our homes and powering our automobiles. And we're making some progress. Let me just share a couple of things that we're doing. One, we're spending a lot of your money on clean coal technology. The reason why is, we've got a lot of coal. If you want to be less dependent on oil from overseas— and by the way, we import about 60 percent of our oil today. In 1985, that was 27 percent of our oil. So we're becoming exponentially more dependent.

And we've got a lot of coal. And the fundamental question is, can we burn that coal to heat your homes in a way that doesn't endanger the environment? And so we're spending a lot of money to do that. It's called clean coal technology. We're spending billions. The dream one day is for us to be able to say, here's a coal-fired plant that has zero emissions. And it's possible; it's likely, as a matter of fact. And so we're spending time—money doing that.

We're also spending money on wind and solar. As a matter of fact, I saw your solar panel expert. And we spent a little time on—here's the dream: The dream is, someday, the technology will be such that you'll be—your house will become a little power generator. And if you use—if you got excess electricity generated by solar, you'll be able to feed it back into your grid. Is that possible? Yes, it's possible. As a matter of fact, the advance in solar technology has been quite dramatic. There's more advance still to be done, which requires your money being spent to help concerns—develop new solar energy.

We got a lot of wind, particularly in Washington. [Laughter] That's what Castle was saying last night after 55 minutes. [Laughter] Wind energy is an interesting alternative.

I strongly believe that if we're that interested in greenhouse gases and renewable fuels, this country has got to be aggressive about establishing a safe nuclear power. If that is—one of our objectives is to be serious about dealing with the environment, there's no cleaner source of energy than nuclear power. And so we're spending money and research to make sure that the next generation powerplant is safe. But also, we're spending money, interestingly enough, on how to process spent fuels better. And believe it or not, actually, we're beginning to permit nuclear powerplants here in America. And that's going to be good for your children. It's going to make us less dependent on natural gas from overseas, and it's going to make us better stewards of the environment.

But the big gains to be made is—for oil, if we're trying to become less dependent on oil for economic and national security reasons, is going to be made in our automobiles and the power we use in our automobiles. That's really where we're going to make significant strides.

Just a couple of things that are happening that are interesting: One, we began a hydrogen initiative that—where a lot of smart folks are beginning to research whether or not we can power automobiles by hydrogen. We think it's possible, but it's not going to be possible until I'm 75, which is probably 15 years from now. Your children may very well likely be driving in automobiles powered by hydrogen, the waste product which is water, by the way. But something has got to happen in the interim. I mean, we can't wait, for economic reasons or national security reasons, for hydrogen to kick in; in other words, it's still a dream.

And so we're pushing two interesting types of technologies: One, battery tech-nologies—lithium ionic batteries. For all you history majors out there, let me put it to you this way—[laughter]—one of these days, you're going to plug your car into your garage, and you're going to be able to drive the first 20 miles on electricity, and your car is not going to have to look like a golf cart. [Laughter] And that technology is coming. And we're spending money to encourage that kind of technology.

American automobile companies, as well as foreign automobile companies competing for market share here in the United States, understand that's where the consumer mentality is evolving. And they're beginning to spend their own money, as well as help from the Federal Government, to develop new batteries. It's going to be an exciting time, really, when you think about it, when you're able to drive the first 20 miles in a plug-in hybrid vehicle without one drop of gasoline, which makes the country less dependent on oil.

Secondly, we're spending a lot of money on different kinds of fuels—ethanol. I don't know if you know, but we're now up to about a little over 5 billion gallons a year of ethanol usage. That's a threefold increase in 5 years' time. But what's interesting about technological advances, as you know better than me, is that as technology becomes more widely used and the markets begin to evolve, that kind of usage is going to accelerate quite dramatically. So the first 5 years may be relatively slow, but the next 5 years is going to be quite dramatic in the amount of ethanol produced.

However, there is a constraint, and that is, the ethanol use today comes from corn, and we've got hog growers and chicken growers that need corn to feed their animals. And therefore, it's going to be kind of a strain, at some point in time, on the capacity for us to have enough ethanol to be able to make us less dependent on oil. So what you're doing at DuPont becomes vital, and that is cellulosic research.

And we spent time with some of your scientists that are very bright people—and not only bright people but optimistic people—about the arrival of the day where we're going to be able to make ethanol, which will power your automobiles, not just from corn but from wood chips or switchgrass or waste from corn itself—from the stalks. There's all kinds of opportunities to make energy to power your automobiles from that which had been discarded as waste in the past. And right here at Du-Pont, you're on the leading edge of change.

I came wondering whether or not cellulosic ethanol was one of these things down the road that may be happening; may not; could end up being science or science fiction. It's going to be science. It's working. As a matter of fact, when I looked at those scientists that you employ here and heard them say: "This is a reality. Mr. President, this is going to be something that we can live by." Really, I got to tell you; I'm incredibly encouraged by what I saw, and you need to be too. And we need to be thankful as a nation for companies like Du-Pont who are spending shareholders' money to make sure this country becomes less dependent on oil and better stewards of the environment.

As I said, I do believe, strongly believe, there's a role for Government: One, spending money directly. I mentioned 2.7 billion for our '08 request from Congress—monies which, by the way, get joint-ventured with initiatives, for example, that take place here in DuPont.

Secondly, I strongly believe that—and by the way, in the farm bill, request in the farm bill, we're going to put 1.6 billion over 10 years to continue this kind of research as well. But I also strongly believe in the research and development tax credit. I believe Tax Code should provide incentives. And one incentive that makes a lot of sense for this country is to incent you to continue to invest your money on research and development. And Congress really needs to make the research and development tax credit permanent. See, it lays out for a year, so it's good for next year and—[applause]. The reason I say that, there's got to be certainty in planning. I mean, your financial people are sitting around saying: "Well, I wonder if they're going to renew it next year?"—which actually does affect investment around the country. And so to the extent that we can make this a permanent part of the Tax Code, it will add certainty to planners, and when you have certainty in planners, it means it's more likely we're going to get better research and more money into the experiments that these good scientists are doing here at DuPont.

And so last night, based upon what I just told you—based upon optimism, new science, progress that we have made—I announced a goal for the country, which is to reduce gasoline consumption by 20 percent over the next 10 years. If we are— when we do that, it will mean that we have reduced the amount of imported oil from the Middle East—or the equivalent of the imported oil from the Middle East by about three-quarters. And that's important. It's really going to be important for your children that this country has become able to—be able to say to the hostile regime: "Leave us alone. You can't affect us. We'll protect ourselves in all kinds of ways from you."

And so I put out a mandatory fuel standard. This is a Government mandate that says we'll be using 35 billion gallons of alternative fuels by 2017. This is a firm statement. You know, I signed an energy bill that had renewable fuel standards of 7 billion gallons. And so this is five times larger than that. I base it on—and this is a practical declaration—and I base it on the fact of how much we've increased ethanol, but I've also based it on the fact that we're going to have breakthroughs in cellulosic ethanol as well.

And to couple that, in order to make sure that we're 20 percent less dependent in 10 years, I also proposed to Congress that we change the fuel efficiency standards in our automobiles. Something that the American people don't know about is that during my administration, we changed the CAFE standard for trucks. And basically, we said, we're going to take the weight of each type of truck and set a fuel standard specific to weight. It's a little hard to explain, except for it has achieved a lot of conservation efficiencies. We need to do the same thing for cars.

If you have an overall fleet CAFE standard, what ends up happening is, is that the bigger cars have lower gas mileages than they could otherwise, and the little cars have high gas mileages, which reduces the safety in the automobiles. And so we believe that if you make—set CAFE standards based upon weight, it will help meet consumer demand and makes better science. As a matter of fact, this is an idea we got from the National Academy of Science.

And so Congress, I'm hopeful, recognizes the great potential in new technologies, that we're able to have a new mandatory fuel standard and new CAFE standards for our automobiles, all aiming to make us less dependent on oil and, thereby, making us more secure nationally and be able to say we're better stewards of the environment.

I said two things last night I want to follow up on: One, I don't know if you know this, but technology for the exploration for hydrocarbons is unbelievably advanced these days. And I'm confident that—I know we're going to need, if we want to be less dependent on foreign oil, we need to be exploring here at home. I mean, there's some unbelievably great deepwater gas potential in the Gulf of Mexico, for example, and we can explore for those hydrocarbons in environmentally friendly ways. And we need to continue to do so. In other words, it's going to take awhile to get to a world where we're much less dependent on foreign oil, and we need to be exploring in environmentally friendly ways, and we can.

And if a terrorist threat—if terrorism is a threat to the supply of our energy supply, then I believe it makes sense to address that terrorist threat by doubling the size of the Strategic Petroleum Reserve, so that rather than 750 million gallons of crude oil in storage, in case there's a disruption based upon a terrorist threat, there's a billion-five. In other words, if we're saying dependence on oil creates a terrorist threat, let's do something about it now. Let's say that if the threat does come, there's enough crude oil in storage to be able to deal with the short-term economic consequences of an attack.

And so that's why I said what I said the other night. It's really a comprehensive plan. I hope I can leave you with the impression that—a couple of things: One, an approach to energy security that's aggressive also is a good approach to environmental quality. And secondly, that such an approach requires a multiplicity of research projects. In other words, it's not going to be one cure to dependence on oil, it's going to be a variety of new technologies that are coming forth to do so.

Today I signed an Executive order that says we're going to commit the Government to the following things, that we're going to purchase more hybrid and flexible-fuel vehicles that run on ethanol, because we own a lot of cars. And therefore, it's one thing to say, this is the goal, it's another thing to actually participate in achieving that goal. And that's what we're going to do.

Secondly, we're going to purchase plug-in hybrid vehicles as soon as they hit the market. I think that will give some surety to those who have invested in new technologies, to know that the Federal Government is going to be a purchaser, when commercially available. In other words, we're not going to waste your taxpayers' money, but we're going to participate in a new market. I don't think you want us buying above market; I think you want us to be wise about how we spend it. [Laughter]

We're going to purchase—increase our purchases of renewable power from new sources. We're going to reduce the gas consumption of the Federal fleet by 20 percent over 10 years. We're going to be joining with America. We set the goal. It doesn't make much sense for the Federal Government to set the goal and then not participate, and we will. And so the Executive order commits this Government to doing what I know is going to happen.

I love being around entrepreneurs and people that dream big dreams. And today I understand some are out there scratching their heads, saying: "You expect me to believe, President, that I'm going to be driving a car, the fuel from which has been derived from switchgrass?" And my answer is, "Yes, I do." That's what I believe. You know why I feel that way? Because the people here at DuPont feel that way. The people here at DuPont have always dreamed big dreams. And if you look at the history, they have followed through. There have been unbelievable new technologies that have come from the minds of the folks who work here.

And the same thing is happening in energy. It's coming; it's coming. And the role of the Federal Government is to set high goals—and in this case, mandatory fuel standards—to say, we're dedicated, committed, and we're going to achieve the goal. And that way, when it's all said and done, when we've done our duty to serving the American people, we can look back and say to this next generation: We tried to leave you a little better world.

And so I want to thank you for giving me a chance to come and talk about that better world. It's on the way. And I'm excited to be a part of it, and I know you are as well.

God bless.