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Peak Oil Aware NY Governor / Lt. Governor?

Bronx, NY (May 30, 2006) - The following remarks were delivered by David A. Paterson upon announcing the Spitzer-Paterson Renewable Energy Plan at the Association for Energy Affordability’s Training Center in The Bronx today:

I want to thank the Attorney General, and I hope, Governor-to-be, Eliot Spitzer for his leadership in environmental protection, which he has demonstrated in bold part over his years of government service as Attorney General, and for his insight on the direction that we will go in the future.

It’s stunning the way that Eliot Spitzer used the arm of state law enforcement to protect not only New York citizens, but citizens all over the country, from what are environmental pollution and the failure to adhere to standards.

I am so pleased to be running with him and to be helping him. I like the way that Eliot describes the new goal of Lieutenant Governor, which really is to say that the Lieutenant Governor is going to do some work.

I also want to thank David Hepinstall and Bobby Kennedy for their years of service, for trying to demonstrate as they do here at the Association for Energy Affordability the ways in which low- and moderate-income people of this state can be given the opportunity to conserve energy, make the process affordable, and to certainly put resources back in the pockets of Americans that, as Bobby has pointed out, are spending twice as much on fuel as they are in countries like China and Germany.

Eliot Spitzer, my friend, and I, outside of our goals, have a little polite competition. We try to find the most obtuse quotations to work into government policy, and I still haven’t been able to match Eliot’s presumption, which I think is very, very applicable to energy policy, in the words of Yogi Berra: If you don’t know where you’re going, you’ll wind up someplace else.

Tell me if this verse sounds familiar: “And then one day, while he was shooting for some food, up from the ground there came a bubbling crude.’’ Those light-hearted lyrics from the CBS 60s comedy series, “The Beverly Hillbillies,” in my opinion poignantly portray the mass availability of oil and gas in American society, in the society at that time.

But the situation comedy that allowed a poor mountaineer to become a Hollywood millionaire may have obfuscated the work of a Shell Oil geologist who was offering a different interpretation at the same time.

In 1956, Dr. King Hubert offered a prediction that United States’ oil production would, in effect, plateau somewhere between 1970 and 1971. This was the culmination of research where the first drilling for oil in this country came in 1859. By 1870, we had a network of oil pipes, starting the first network of delivering of oil as a fuel alternative at that particular time, and the curve went up steadily and steadily until, alarmingly, October of 1970 when we were producing 9.5 million barrels of oil per day. That’s the highest we ever achieved.

Currently, we’re producing about 5.1 million barrels of oil per day. We will go under half of the oil production of 1970, 37 years later, sometime in the middle of next year. Now this is staggering because, in addition to that, the United States Department of Energy - and I don’t know how they got this past Phillip Kooning, Bobby - offered a paper describing the mitigation of oil peak downside, meaning that, after the production of oil slips below half of the peak production, at that point the energy return on energy investment becomes negative.

In other words, it takes as much energy to bring the oil out of the ground as it would to realize energy benefits from the oil that’s actually drilled. So the reality is that in the flourishing 50s, we were getting 30 barrels of oil out of the ground for every barrel invested, and we are now somewhere between five and 10 barrels of oil for every barrel we invest.

So the question is: when is the oil going to run out? The answer is: nobody knows.

There were alarmists in the 70s after the fuel shortage crisis that said that we’d run out of oil in the 80s. There are bloggers on the Internet who say we’re going to run out of oil in the next 10 years. No one really knows. Discoveries in the Yucatan Peninsula, the Gulf of Mexico, and in Credo, Alaska, have certainly extended that period of time.

But then the drilling that took place in the Caspian Sea in 1998 that was supposed to yield 400 billion barrels of oil is now being estimated at 40 billion barrels of oil. So it goes back and forth, how long the oil supplies are going to last.

But what’s more important than that would best be represented by this example: The human body has 21 quarts of blood contained in it. We don’t die at the moment we offer our last drop of blood. What’s more important is when our first drop of blood is spilled, and that’s what Shakespeare taught us in the “Merchant of Venice.” The problem is that if a person loses 20 to 25% of his own blood, it severely impairs the systems of the body, and death will not be long.

This is the problem we are going to have if there is any cutoff of our oil supplies in the immediate future.

Remember the 1970s oil shortage only involved a 5% lessened amount of oil than we actually have now, than we actually had at that particular time. What we’ve got to start concentrating on, as a society, are alternatives to what has been the lifeblood of our economy.

I’m going to say something nice about President Bush this morning, Bobby. President Bush said in his inauguration speech on January 24th of this year that America is addicted to oil. He’s absolutely right.

Oil is involved in so much of our daily lives. Oil and gas are the raw materials that make pesticides and fertilizer. We recognize and have to recognize, before we even get to what our energy policy is, that energy is our new currency.

If you were sitting on the moon, you might have a lot of minerals available to you that exist on the moon, you might have brought along half the oil on planet Earth, and maybe you have a good portion of the money on planet Earth, but the currency standard on the moon would be measured by atmosphere - the person that has the atmosphere can control the other items.

That is what’s happening in our society now. Those who have oil are really able to create labor and to establish wealth based on that standard. The cost of energy is really the cost it takes to produce items. The value of energy is that energy minus the energy that it costs to actually produce it. Oil is our new energy standard.

What Governor Eliot Spitzer is going to do is not to allocate responsibility to himself that he doesn’t have. We are going to have to coalesce, as we have already done, with some of the other states to try to curb our greenhouse gas emissions, to try to increase the pressure on the federal government to have high fuel-efficiency standards for the production of automobiles.

We already have coalesced with seven other states on the eastern seaboard to do that, and that’s what Eliot Spitzer as Governor will do. But more than anything else, Eliot Spitzer will be crying out to this whole country with honesty, getting us to look at the terrible truth of what our energy shortage is right now.

Those from the 50s and a flourishing economy, when we were producing five times as much oil as we were consuming, could probably continue in their bliss. And who can blame them? Noone. But we’ve got to remind our current society of what the energy shortage is, and we can do this. We can find ways out of this. We have tremendous creativity that we see right here in the Association today.

We have entrepreneurship. We have talent. We have ability. We need to focus it, not on a battle for consumption with international companies, but on a battle for what would be sustainability. That would be our goal. Those are our principles, and if it be the will of the voters in November that Eliot Spitzer is elected Governor of the State of New York, we pray that we’ll never stray from that.

The Spitzer administration’s policy on energy can be summed up in four words: conserve today, renew tomorrow.

We have got to stop throwing good energy after bad. We will use conservation for immediate results, and we’ll hope that we can find alternative sources of energy for long-term and future positive results. These are not new ideas. They’re not dramatic. They don’t even cost that much, but they are effective.

And the most effective and immediate way to establish some kind of impact on our environment is through conservation. Conservation doesn’t mean privatization. It doesn’t mean austerity. It just means doing more with less, not just doing with less.

We’re asking New York businesses to raise profits by reducing their utility costs, not by reducing their businesses. We’re asking the families in New York to lower their utility bills, not to lower their expectation of a lifestyle. Conservation is good business sense, because if it saves energy; it saves money. Because energy is the new currency.

The major corporations of this country have already figured this out. They know the benefits of energy conservations. General Electric is planning on increasing its efficiency standard by 30% by the year 2012. Now, for the last decade, the chemical giant DuPont has actually saved $2 billion by lowering its energy use by 7% and simultaneously increasing its production by 30%.

Even BP oil has saved $650 million simply by reducing its energy bills. New York will implement what the major corporations of this country have already learned: that if energy is the new currency, then conservation is the new big business.

We have got to recognize that if companies can save millions, and in some cases billions, of dollars through energy savings, then New York’s families can help husband their resources from expense.

Last year, the American homeowner spent $1,500 paying utility bills. We can reduce those amounts from 10 to 90%. Yes, it’s true, 90%, just from making some manageable alterations to the house.

Over the past two years, even shorter than two years, New York’s home heating costs have increased by 49%, so rather than paying more for the same amount of oil, we’ve got to use less oil.

The Spitzer administration is proposing two conservation programs. First, we will establish an energy independent revolving loan fund, whereby loans will be made to New York’s families and businesses to retrofit their homes to save money and lower the environmental impact.

These loans, which will be made on a one-time basis, can be paid back, we estimate, over a period of five to seven years, through the energy savings that are remitted to the customer.

The program will certainly improve the value of the homes. It will reduce the energy drain. It will decrease the pressure on our electric energy grid, and will have a positive effect on our environmental impact.

The program, which will involve incremental low-interest payments over 10 years, will have the majority of the loan paid by the energy savings. Once the loan is paid, the homeowner will receive all future benefits.

We can make this program available as well for businesses. Businesses create two-thirds of the jobs in New York State. They’re job producers, and if we can help them to pay the utility bills, we can put them on a better economic footing.

We are going to consult in order to establish this program with financial experts, investment bankers, construction companies, and not-for-profits, in order to have a mechanism that guarantees maximum efficiency. In the short term, it will yield New York a staggering multiple result quotient.

That is, it will save money for homeowners, it will produce construction, as well as manufacturing jobs, and it will increase our environmental impact in a positive way.

Our second program involves conservation in homes.

We wish to fulfill the dreams of advocates, who are with us today, who have been struggling to try to give the New York consumer a way of saving money through conservation.

We will hope that the community alternative associations, the community action associations, the not-for-profits, and weatherization organizations such as the one that we visit today, will have the resources to establish conservation.

If we can weatherize the home, make improvements to the roof, improve the doors through the infrared lights that demonstrate and can identify where energy is escaping the facility, if we can improve the heating and cooling systems, we can certainly establish what would be an energy cost-demand savings and possibly impact the environment.

This will be a great resource to low-income New Yorkers who have, to this point, not been given the opportunity to receive this kind of weatherization, even though organizations such as the one we’re visiting today have tried so hard.

We also want to give a reward to those New Yorkers, both upstate and down, who have been applying the weatherization and also have been on the list to get it but up to this point, have not.

Comptroller Alan Hevesi estimates that we can increase the percentage of fuel that powers our facilities in this state that is renewable from 20 to 25% by the year 2013. This is an ambitious prediction, but Comptroller Hevesi says we can meet the 2013 deadline and create 43,000 jobs in the process.

This would allow people to work close to where they live, to use the skills they learned growing up, to not only help improve the environment, but to create jobs and opportunities for them.

We are going to use some weatherization techniques that at first probably don’t sound very meaningful, $26 for the thermostat adjuster, and $17 for showerheads and sink and faucet aerators that will reduce the water consumption by 5%, which is the amount of water consumption that’s lost just from leaking. They don’t sound like the greatest amounts, that they’re going to make the greatest changes, but we’re in a society and a culture now where every little bit is going to help. And in the end, weatherization can, as we pointed out before, lessen average costs by 25% to the home if we establish it.

We want to make sure that the community action agencies, the not-for-profits and the weatherization organizations, get the proper funding that they will need. So we will use conservation in the short-term. We will implement it to get immediate results, but we want to pursue renewable energy sources as a long-term solution to New York’s energy uses.

Though constituting only 7% of national power usage, renewable energy sources can achieve up to 25% - they are at 20% now - by 2013 if we are able to meet this administration’s goals.

This is the long-term solution that can liberate America from its dependency on foreign oil importation. And we certainly think that this is an avenue that we can go on now because it will decrease greenhouse gas effects, create high-skilled, high-paying jobs around the state. It can stimulate in-state investment and generate huge tax revenues.

There is an ancillary benefit to bringing renewable energy, and it is that every dollar invested in renewable energy can create 40% more jobs than the conventional sources and more widely-used sources of gas and oil.

And this typifies Eliot Spitzer’s view of dealing with crisis: he believes that crisis creates opportunity, and opportunity is enhanced by more jobs and economic development for this state.

We have a 5-point program that I’ll run through very quickly, that I think demonstrates what we can do in a renewable energy area.

First, we want to incentivize the installation of solar panels to what would be large commercial developments, to public housing units, and schools. We want to put not only solar energy but wind-powered facilities on pre-existing ground fields, on industrial operations and, where it is appropriate, on or around the facilities of municipal buildings.

We will be able to accomplish this through what would be public education campaigns, by monetary incentives, and by extending the metering law. By extending the metering law, what we can do is to allow the customer to sell back to the utility unused power that is derived from renewable sources.

As a secondary solution, we want to strengthen the environmental emission standards on the construction and renovation of new buildings. Moreover, we want to create more green buildings here in New York State.

One third of this country’s energy, more than 21.6 million units of energy a day, go to the heating and cooling, the upkeep, and maintenance of these large edifices. If we can exact these standards on what would really be, prior to the granting of certificates of occupancy or the approval for renovations, we can reduce the energy consumption of these buildings by somewhere from 1/5 to 1/3 percent.

The best example that I can think of is the Conde Nast building located at 4 Times Square in Manhattan. It was the first large-scale speculative office building that was built as a greenhouse. By the time they opened their doors, it was 90% occupied, if you’re wondering how the businesses viewed the movement to a green building effect.

As a tertiary solution, we want to create a scrap-and-replace program whereby New York State will make what would be fuel-efficient automobiles available to the New York consumer, particularly low-income residents in the rural counties. New York can take advantage of its precious place in the marketplace by leveraging the purchase of these fuel-efficient vehicles, and then leasing them at low interest rates to low-income New Yorkers who are willing to scrap their poor-efficiency vehicles, which we refer to as gas guzzlers.

We feel that this will increase the mobility of these residents around the state. We are very sure that it will help those companies that provide the technology for the conversion, and we are sure that it will improve the air quality.

Fourthly, we want to specialize in what would be cellulosic ethanol, which you may have read was a suggestion that the New York Times made earlier today in its editorial. Cellulosic fuel is derived from switchgrass - I’ll admit I never knew what switchgrass is, it’s actually prairie grass and I hope we haven’t mowed all of it away because it’s suddenly become a valuable resource here in New York State.

While Governor Pataki is out in Iowa picking corn, he needs to know that he cannot compare the New York economy to that of Brazil, because Brazil creates its ethanol from sugar cane, and it’s eight times more effective than corn, Governor, so you don’t have to go to Iowa.

The fact is that the production of switchgrass, whereby bio-organisms help to separate the glucose from the rest of the elements in switchgrass, becomes very close to the standard that they have in Brazil. And we think that that’s the type of research that we want to undergo here in New York.

Finally, we want to help the research institutions here in New York, those who have already demonstrated, by their research on biofuels, how effective the innovations can actually be. Research institutions like Syracuse or Cornell or at Farmingdale on Long Island, where Attorney General Spitzer spoke yesterday, or at Pace in Manhattan, or at RIT.

Wind and solar power, the technology is there, they are really the wave of the future. So is geothermal policy, but they all are operating from the ability to heat Nitrogen within 100 degrees Celsius and 275 degrees Celsius.

That’s the temperature at which Nitrogen can crack, and can help to conduct fuel. It’s important to know that Nitrogen is not a fuel source; it is a conductor, very much like a battery, but the great thing about Nitrogen is that when you burn it, it becomes water, and when it becomes water it does not pollute the atmosphere. It has a tremendous affect on fuel cells, and so this is a conducting agency that needs to be enhanced, because we’re still having trouble trying to transport Nitrogen because it escapes to containers.

At a university in Buffalo, they have contained Nitrogen at the highest level know, at 3.4%. Let’s give New York’s research institutions the opportunity to beat California. In that drive to help the alternative and renewable fuel sources be able to increase the Nitrogen capability so that we can actually increase what would really be the consumption and the ability to preserve energy.

We were very happy a few weeks ago, to preserve the integrity of New York’s Systems Benefit Charge in the Renewable Portfolio Standard. We feel that these are two of New York’s best renewable energy and conservation programs. We don’t want them diluted; we want them to remain transparent, and we want them to provide the resources so that we can start weatherizing multiple-family houses, which is what we think would be the way to help the New York consumer thrive the best in this era of energy instability.

So the thing that we have to remember is that we’ve got to raise energy consciousness.
All of the alternative fuels and the conservation in the world are not going to help us if we don’t understand the situation that we’re in right now.

We’ve got to understand that energy really drives our economy and to do this, we’ve created a car that goes more miles per gallon, we can’t continue to be transporting fuel 1,500 miles between production and consumption as we’re doing in this country right now.

We’re ahead of Canada, which is 5,000 miles between production and consumption. We’ve got to adjust our lifestyle to what are the emerging energy crises. And it’s important to know that this is why President Bush wants to drill on the oil fields that lie under the Arctic National Wildlife Preserve, because they are looking for new places to drill.

This is why President Bush won’t keep high emissions standards, because he knows that because we’re on the downside of production, that it is harder to get the oil out of the ground, and the companies are polluting the earth even more to get the same amount of oil, and he wants to help them.

Now you know why President Bush and the energy companies are saying every few weeks that they’ve found new oil, they’ve found an old oil field they’re going to dig on. Yes, the oil is there, but the energy it takes to get it out of the field doesn’t make it economically viable.

So you have to understand that the oil companies are adjusting to the fact that there may be a limited supply on this planet. By 1999, they had added a 3rd company. By 2000, Exxon had merged with Mobil, Shell had merged with Penzoil. There are all kinds of mergers - 15 of them - that have taken place in the last nine years.

The oil companies and the administration, while they are telling us, I won’t say it’s dishonest, but it’s inaccurate information, are making the adjustment themselves. And what we’ve got to do as a society is to recognize what energy’s power is over our lives. We’ve got to put it in its proper place, at the highest forms of state and federal policy-making.

Yes, energy drives our economy, but now the driving force of our economy has to be driven by us. We have got to recognize - advocates, legislators, parents, and children - the cost of energy and its application. We need vision in our energy policy. Just as you look at a child and see the woman that she could grow up to be in the future, this is the reason that we send children to school. This is the reason that we put money in the bank.

Vision is preparing to solve a problem that you can’t solve at the time you begin preparing. These are our suggestions for energy policy. These are our solutions. We know we can’t solve the energy problem overnight. We are open to new ideas and opinions.

But the Spitzer/Paterson administration will implement conservation and renewable energy because we know that the current energy policy has failed, and is not sustainable. In addition to doing that, we hope to improve the technology and to create jobs in the process.

There is a glut in public service right now, a feeling in the public that they can’t get honesty from their leaders. We’re not just rolling out an energy strategy today. Eliot Spitzer and I are trying to roll out a new honesty on this subject.

Shakespeare once wrote that honesty is the greatest virtue and can create the greatest legacy, so I will close with this: We would like to be remembered for our successes, but we plan to be memorable for our honesty.

Editorial Notes: At The Oil Drum: New York City, peakguy posted an article quoting this speech extensively. Peakguy cites polls that predict the Spitzer-Paterson ticket will sweep into office "with a huge mandate for change." Paterson's biography on his campaign website begins:
Elected to the N.Y. State Senate in 1985 at the age of 31, State Senate Minority Leader David A. Paterson has overcome obstacles, broken barriers, and demanded change throughout his career representing the 30th State Senate District, which encompasses Harlem, East Harlem, and the Upper West Side. David was born legally blind in St. John's Hospital in Brooklyn in 1954. When it came time for him to go to school, New York City's public schools refused to let him join a class with sighted children. Beginning a lifelong pattern, David found another way to achieve his goal. David's parents established residency in Hempstead so he could attend a regular public school and, as a result, David graduated from Columbia University and Hofstra Law School. After law school, he went to work for the Queens District Attorney's Office, after which he was elected to the State Senate in Harlem. In November 2002, Senator Paterson made history when he was elected Senate Minority Leader, becoming the first non-white legislative leader in New York State history, as well as the first visually-impaired senior member of New York's state government. As Senate Minority Leader, Senator Paterson is also the highest-ranking African-American elected official in New York State.
-BA

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