 Okay, I'd like to welcome everybody to our fifth annual Silicon Valley Energy Summit, and I'd like to thank everybody who's here. As you notice, we're starting exactly on time, and the goal is to have the train running exactly on time as much as possible, but we're going to try to keep it that way. We will find that the room is going to fill up more. Some people don't come at the last moment. We believe that the number of registrants exceeds the number of spaces at these tables, so we're counting on... We have a little overbooking issue here, just like the airlines, and we will be prepared to compress as additional people come in. What I'd like to do is start out is what I view as a sort of context for many elements of this conference, and that's what energy efficiency has been for the U.S. economy. Many of us think about the impacts of solar and wind and other renewables, which are important new technologies, but today I'd like to spend the first 15 minutes or so, 20 minutes, talking about energy efficiency. This is going to actually be drawn from a book that we have an advanced copy of the book here. There's only a couple of these in existence, but any of you are interested in this, there's a little card on the table out there, Hoover Press is publishing it, and they've been kind enough to offer for our conference only a 40% discount on the book, including for the electronic format, so you can get the book normal price electronically for $7 and 40% off, so it's going to be a cheap book, and I don't want you to think you're going to get pay with what it's worth. So let's talk about energy efficiency. Why do you care about energy efficiency? It's really three things, the economy, the environment, and security, and in the beginning of the book, Secretary George Schultz, who's here, who's written the foreword, asked three questions, said, what's the cleanest form of energy you can use? Well, the energy you don't need at all. What's the most secure form of energy? The energy you don't use at all. And what's the cheapest form of energy? The energy you don't need at all, so it's a three-way play for the economy. That's in the micro level, and at the macro level, I want to convince you that this has been true for the United States as a whole, and if you look worldwide, which I'm not going to give data for, you see roughly these same patterns. But first, we recognize there's a lot of barriers to energy efficiency, there's a lot of reasons we don't get as much energy efficiency as we'd like to get. There's market failures, some institutional barriers, some behavioral issues, so there's good news and bad news about that. The bad news is we're not getting as much energy efficiency as we think we should be able to get. The good news is when we go become the barriers, we'll get more energy efficiency, so it means there's head room left. But even with the, that's what we didn't get. What I want to talk about is what we did get. And I like to say it's a cup half full, except that's not right. It's a cup that you'll see is on 95% full, not, not. So let's start by reminding us things that you all know, but put it in context. First, we have an ongoing lighting revolution. First thing, we have the compact fluorescence. Use about a quarter as much electricity as the, as the incandescent. And you see I have a tie on here. I call this my obsolete light bulbs tie. Has all lots of obsolete incandescent. But the fluorescent, compact fluorescence, use about a quarter as much electricity, but they had problems. I mean, it's not the greatest quality of light. Til we came out with the LEDs. And you get a CRE LED from other makers, beautiful quality light, dimmable, uses about a fifth as much electricity as incandescent. And then I don't know how many of you, how many of you have kids here? Not here, but have kids. Yeah, I don't, some of you have kids here, but I used to tell my kids, you know, turn off the lights when you leave the room. Well, now we don't have to do that ourselves because we have equipment that turns them off for us in the light bulbs. In place of, if you look back at the old days where the whole building, the whole floor of the building, commercial building was lit or none was lit. Now light, each office goes on and off and if you leave it and nobody has to yell at you to turn it off because they turned it off themselves, quantitatively, you can ask the significance of this for the various uses of light. And for the different things between street lights and track lighting and light bulbs, we reduce the use of energy per unit of light by between 48% and 83%. Tremendously large change. Buildings, well, just to flash on a few things in buildings. Buildings are now better insulated. California, we have title 24 building codes. We have continuously adjustable pool pumps instead of just on and off. We have appliances that are energy star rated and we have energy star certification of new homes. That collectively, we all see that, we know that's going on. Commercial sets, we have at Stanford, the biggest, they call it the Stanford energy system innovations. Doesn't generate any electricity whatsoever, it's an energy efficiency play for California where we offer for a district heating and cooling for the whole Stanford campus that uses electricity for heating and cooling and heat exchangers in the building. So we greatly reduce the use of energy. Up in the right is that the dashboard that internal to Microsoft that they use to monitor the building performances of all the buildings on their campus. So they can find where there's the highest value for fixing things. We can have retrofits of buildings and this is some data from the Empire State Building Retrofit, which to me is a little surprising we think about big building retrofit as not being economically attractive. That they expect to pay for itself and it's looked like they're really on track within five years to pay for all of the retrofits. You think about it as being the whole building but actually two thirds of their effect was in tennis spaces, which required new contract structures and new shared performance agreements. So we have those throughout the economy, new legal ways of operating. And then we have the spectacular success of the US Green Building Council. Look if you build a high tech building around here and it's only lead gold you have to apologize a little bit. That is anything that's not lead certified now of the new high tech building just doesn't happen. So we've seen that in the commercial space. In automobiles if you look at this data the horizontal vertical line is the energy crisis in 73. We see that in up to 73 the miles per gallon of automobiles was declining year after year of all cars on the road. 1973 the average car got 12 and a half miles per gallon. We brought in cafe standards and we've increased the efficiency roughly doubled so far with the new standards will roughly double again. And you can think about the difference here's a 73 Chevy Impala, 2014 Chevy Impala, same interior room. The front and the back end are slightly different. One's aerodynamic and the other's turbulent flow. One's big, the other's small, big change. Air traffic, these are data for commercial and domestic airlines. The energy use per seat mile is down by a factor of two since the energy crisis in 1970. Down by a factor of two and why is that? Well, the boring tree line illustrates it. You see the winglets at the bad timing, okay, bad timing, okay. My doctor's office saying you've got a schedule for a colonoscopy. You know what, I don't think I've got to take that call now. So the dream line, you see the curved wings, the winglets, the better engines, the lighter materials, that's the two-to-one difference. But the fuel use per passenger mile is down by a factor of four. What's the other factor of four? Well, it's yield management, it's dynamic pricing, it's stochastic forecasting, it's optimization procedure, it's operation, totally behavioral systems analysis, another factor of two. So factor of four, reduction in energy use per passenger mile. We have labeling on now refrigerators and cars. Energy star labeling that helps people understand what the energy cost is going to be. What this has all done is if you look at the cumulative data, the consumption trends in the four sectors of the economy from the top to the bottom, industrial, transportation, residential, and commercial. In 1973, with that vertical line where we had the shot across the bow of the energy problem, the trends flattened. And you see that in each one of the sectors, those trends turned down. And the consequences of those have been tremendous for the US economy. You've all heard the advertisements that said, we've seen the new energy power in the world. American Petroleum Institute brings this, it said, oil and gas fracking for this. Because of that, we have security in our nation and energy. We're not importing much energy at all. Well, if you look at the data, if you look at that red line, that's what would have been the energy use if you had the existing trends of energy efficiency before the crisis. Half of a percent per year on the economy, you would have followed that red line. We've actually followed the blue line. So the gray area is the energy reduction because of all of those turn downs that I've shown in the energy consumption results. And so that took 80 quads off the imports of the energy from what it would have been, 80 quadrillion BTUs. On the supply side, we've had more nuclear power, and we're going to debate that at lunch. We've had more renewables. Most of the more renewables was direct combustion of wood and hydropower. That yellow line is the effect of everything on the supply side. Nuclear wind, solar, geothermal, fracking for natural gas and additional oil production. So that's about 22 quads. So between the 80 quads on the demand side and 22 quads on the supply side, that's why we now have energy security. We're soon to become a net exporter of energy. So I say, yeah, fracking for oil and gas mattered. That in a glass of milk gives you a good, healthy breakfast if you remember that advertisement. Mostly energy efficiency, carbon dioxide, the global climate change. We've decarbonized the economy since the oil crisis by 61%. That is the carbon dioxide per dollar of GDP, just for inflation, is down to 39% of what it was before, as illustrated by this graph over time, where we start at 1 in 1973 and go down to 39% in 2013. So what caused that? The first was the pre-existing trends of changing energy intensity before the crisis. The green was the downturns, that was the rest of the energy intensity. So the green plus the blue is the energy intensity changes in the US economy. So what about wind and solar and geothermal and nuclear power and fracking for natural gas? That's there, it's the thickness of that black line. It's the effect of all of those on decarbonizing the economy. Of that black line, 60% of it's nuclear power. 40% of it is wind plus solar plus geothermal plus fracking for natural gas. So yes, it's true that natural gas and wind and solar and renewables has helped decarbonize it, but not nearly as much as energy efficiency is. So that's the theme of the book that goes through it a lot of intensity. So in the last couple of minutes, I want to ask a question, why did this happen? Who did it? Well, as an economist, I sometimes like nice, clean, one line answers, there ain't none. There's no silver bullets. There's no silver buckshot. There's silver bullet shot in here. Corporations, much more, if you look through this, most of the energy efficiency action was what happened in the private sector. Energy efficient innovations, research and development, investments and operations, you see like in the airlines there, energy efficient products being offered for sale, buildings and vehicles becoming more energy efficient. But the government was setting at the same time regulation standards, labeling, information, tax credits, direct payments, R&D support. So that worked as a team together, the private sector and the government. NGOs were out there creating new regulatory model, non-governmental organizations. Pressure on government, creating options for the private sector. Utilities were providing information, nudges and centers for energy efficiency. We have PG&E and Silicon Valley Power and Palo Alto Utilities at least here, as well as some of the new clean energy initiatives people are here. They've been all part of this. Research organizations and universities creating ideas, R&D, technologies and knowledge and individuals, attitudes and awareness changes purchasing. Now you pay attention to energy in ways that we didn't before the oil crisis. So when you try to separate this out as I've done and I've tried to in the book, in short, you can't because they all work together where in a real sense the whole was much greater than the sum of the parts. Each individual thing you look at, you say, that's not very significant. And the collection of it was great. It's sort of like a rainstorm in Dallas and Texas right now or Paris. Each raindrop didn't make any difference but the total amount of it is a flood or river. So in short, it's the type of people who are in this room. You probably all have been part of some element of this whole system you've seen and that's what I view as the context for a conference like this. It's that we've had this remarkable amount of energy efficiency, giving us security for the economy, giving us good economic performance, giving us decarbonization economy and we met the heroes and they are us. Now I apologize to Pogo because that's not exactly the way Pogo is at it. But you get the idea that if you look around, we're all part of this action that has fundamentally transformed the use of energy in the U.S. This has happened more aggressively in the U.S. than in other countries. But at a smaller scale, this has happened around the world. So the final thing, this is my shameful commercial argument, you can get the card out on the table to get this book. This is a black and white version, just advanced copy, but you can pre-order it and come on August 1st. So let me end at that point because I'm out of time and I want to introduce the really important hero here. I want to bring up the introducer to new secretary, George Schultz. We've got to. My job is to make an introduction. But Jim, your remarks stimulate me to tell a couple of stories and make a point. I noticed an oil chart in your book. It is by you, isn't it? Yeah, the inflection point is 1973. So let me make some points about that. In 1969, I'm secretary of labor and the president makes me chairman of a task force on the oil import program. President Eisenhower had thought that if we imported more than 20% of the oil we use, we're asking for trouble in national security terms. And we're beginning to bump up against that. That's why the task force. And we recommended what we thought are some blindingly obvious things. That is, the threat was not military. It was the turmoil in the Middle East involving the Israelis and the Arabs. And that could disrupt our supply of oil from there. So we should keep down our imports from that region. We said we ought to have some petroleum reserved as a little bit of an insurance policy. We said we should change the quota system to a tariff system so we get the rents rather than somebody else. We said we knew more about this subject than anybody else in the government. There should be somebody in the government paying attention. It's a strategic asset. And the report was published. The president thanked me, said, nice report. There were congressional hearings. Nothing happened. Zero. 1973, I'm secretary of the Treasury. That's your inflection point, Jim. And here comes the oil boycott. More or less what we predicted. Wasn't hard to predict that. All hell breaks loose. A lot of electricity was produced from oil in those days. Christmas lights discouraged. Gas stations closed on weekends so you couldn't drive. Prices high. It made a big impact on people in their daily lives. And that's what caused things to change. It was big-time impact. So where are we now? Well, there are a lot of analyses, and you can see certain things in the climate arena. But things are starting to happen that people notice. Our crab season is short in San Francisco. Hey, come on, how did that happen? Lucy Shapiro, brilliant biologist here at Stanford, says tropical diseases are coming north. And we're not very much aware of it. So take a look at the news any day. Mosquitoes, Zika, what is it? This is beginning to affect people's lives in a way that they notice. So I think we're going to see a change as a result of that. It's the kind of thing that comes along with strategic analysis, but isn't the same thing. OK, so that's my point. Now, my job here is to introduce the chairman of the California Energy Commission, Robert Weissenbiller, who's sitting over here. We're lucky to have him here. Let me give your credentials. If somebody's going to have that kind of important post, we'd like the person to have a good education, right? So let's take a look at that. He got his bachelor degree, Bachelor of Science in Chemistry from Providence College. Then he went to someplace called Berkeley, University of California. And he got a doctorate in chemistry and a master's in energy and resources. So the little box labeled education put a check mark on him. Then it would be nice if somebody who's doing things in the government has messed around in the private sector a little bit. So he sees a little bit of what that's all about, and he has. He's been part of a couple of companies, a co-founder, so he has a little entrepreneurial spirit in him. That's good. So we have that, so check off that box. Then he's not only now the chair of the California Energy Commission. He was first appointed by Governor Brown way back in 2011, and then reappointed. So he's had government experience. He had a little government experience before that, too. So check off that box. So we have a man who is eminently qualified to be the chairman of the California Energy Commission. So we're lucky as a state to have him in that post. And we're really lucky to have him as our opening speaker. You are our opening speaker, Jim. Excuse me. As our opening speaker from outside. Robert Bison Miller.