 Well, I can tell you This is a not only an enormous honor. It is really a treat for all of you to have former Secretary of State George Schultz here with us and He was not only Secretary of State during The Reagan administration. He was the Secretary of Treasury during the Ford administration Secretary of Labor during the Nixon administration and also the director of the office of management and budget So four cabinet positions. I don't think there's anyone out there who have had four cabinet positions. So you're unique in Many ways. So let me start off by asking mr. Secretary What got you interested in energy? Well, I'm secretary of labor back in 1969 and President Nixon Had me chair a task force on the oil import program President Eisenhower had thought That if we imported more than 20% of the oil we used we were asking for trouble in national security terms And we were bumping up against it. That was the reason for this task force And we had a great staff And produced a really good report which was published and the president patted me on the head and said, thank you for a nice report There were congressional hearings Nothing was done We said in our report The vulnerability to oil supplies is from the Italy so we should minimize our imports from there We said we should have some sort of reserve a storage for an insurance policy in case that is cut off We said the quota system Provides all the rents to Saudi Arabia. We should have a tariff system. So at least if we're going to have this we get the money And we said our task force has been in business now for about six months and we know more about this subject Than anybody else in the government Energy is a strategic resource There should be some place in the government that's keeping track of this permanently So knows what's going on So all these things seem perfectly obvious to us But nothing was done So then a couple of years later. I'm secretary of the Treasury and here comes the Arab oil block hot Almost what we predicted And it was a wild event Christmas lights were discouraged gas stations were closed on weekends a lot of electricity was produced by oil in those days It was a traumatic event And I remember and there was no energy department. So the Treasury Department became the energy department in effect And People would came to me and they said well here are some ideas about alternative forms of energy and so and they said it's sensible But there was no real content But let's work on those But then the price of oil went down And everything stopped The same thing happened when we had the Iranian Revolution in 1979 that cut down oil surprise prices went up people started Looking and then the prices went back down and everything stopped So I was alarmed by that because I thought we should be pushing on then I'm secretary of state in the mid 1980s By this time people are more engaged in energy energy issues and There were a lot of scientists who thought that the ozone layer was depleting We had a science group in them OMB in the State Department and we work with the EPA very closely to track this and We became convinced and President Reagan became convinced that scientists who were worried were right There were quite a few other scientists perfectly respectable people who didn't think so On the other hand they all agreed that if it happened it would be a catastrophe So we did something that you don't do today In American politics today if somebody disagrees with you you try to destroy them in Those days we went about it differently president Reagan put his armor on them and said you disagree with us Respect you, but you do agree that if it happens it's a catastrophe so why don't we take out an insurance policy and That's an appealing idea that didn't get him on our side, but it got him off our back and Out of this came what's called the Montreal protocol That dealt with this issue and I think has becoming something that dealing more with climate change issues as well But the insurance policy concept is a concept to have in mind Because it's sometimes a way to get people who don't agree with you to say okay. I'll buy that At any rate in retrospect, I think it's pretty well agreed The scientists who were worried were right and the Montreal protocol came along just in time Well, I see very similar similar situation today there At least as I would put it provocatively any sane person can see that the climate is getting warmer but there are people who somehow or other don't think so and It seems to me we should say to them, you know the consequences can be severe and once they happen you can't turn them around It's not like you can decide to turn it off again So let's take out an insurance policy What would that insurance policy be? Personally, I think it would consist of a revenue neutral carbon tax So you put a price on carbon I'd like to make it revenue neutral so there's no fiscal drag connected with it And so it doesn't come through to the general public as a kind of grab bag for funding Whatever it is you want to fund That's the problem in California right now The money from cap and trade is being used to fund things and some people don't like those things So they say they're against the program because they're against those things So a revenue to carbon tax But the other thing that's essential is To maintain the pace at least maintain maybe speak it up if we can of the R&D in the energy area and We have I think this is something we really have to have our eye on and fight for because it's since to drop out And we have a much stronger position today than we've ever had Because we've had say 10 15 years of Fairly significant effort where a large number of very good scientists and engineers have been working on this And you can point to results. It hasn't been an empty gesture It's gotten concrete usable results that have mattered. I have solar panels on my home here on the Stanford campus I've had them for quite a while so the belongs just paid for them and I drive an electric car around The solar panels produce more electricity than my car uses So guess what my cost of fuel is? Zero What's not to like? The electric car is coming in the runes friends over here in the science and engineering and I chair the MIT energy advisory panel They all tell me the battery for the car type batteries are going to get better fast They're going to be lighter smaller less expensive with more charge So I say the electric car is here and it can be here without any subsidy. It'll be competitive And that's a huge advance in anybody's I look for the day and people are working on it. They're all modest and say well, we're not there yet When we learn how to do large-scale storage of electricity If you can do that and people are around the edges of it There's a guy to have my team named Sadaway Who has what he calls a flow type of battery? I don't know what that is Yeah, what the liquid metal battery liquid man. Well, he knows Anyway, he's now got a factory and this is not your large scale, but it's bigger scale And you can do things with a stationary device that are harder Not as hard as it's a word having to move So if you can get to that all of a sudden you take the intermittency problem away from solar and wind and you turn it into base load electricity That's a breakthrough So that will that will happen. I'm convinced and there are all kinds of other things. So I think One of the big tasks today in our politics is to do everything we can to see that the funding for his old outfit and The funding for the centers of excellence is maintained We had a program That we started over at Hoover and We got Susan Hockville when she was chairman of MIT was my friend and And she got me to chair the MIT energy advisory panel So we had a deal where Susan brought I think 12 MIT scientists here And we got about the same number from here and we had one from Berkeley and one from Livermore And we spent two days talking about game changers And then we had a return visit We went to MIT and we didn't sort of further talk about it We brought our act to Washington And I was fascinated because John Boehner was speaker of the House And he set us up with the Republicans on the House Energy Committee. You're supposed to be the bad guys And so I took a little delegation including some scientists Selling them Energy R&D was an absolute piece of cake. There's no problem They're all for it But as soon as somebody says well now the government's got a great idea or one of these wanted the government go into business You lose everybody So I said to Ernie Moniz who was chairman of the Secretary of Energy at the time Ernie just focus on the R&D Keep the government's hands out of the business. That's if it's a good idea and profitable Commercial companies will come along don't worry But I think it's very saleable But you're gonna sell it And we have more tools to sell it than ever before because we can point to all these things that have come out of it Actually fracking is came right out of federally supported energy R&D So it's pretty it's been going on and it's been very productive. So that's my challenge The fracking thing when it goes back to Department of Energy in 1982 when you were in the government Secretary of State the funding for horizontal drilling and hydraulic fracturing the combination of the two Started then then the private sector picked it up. That's right So mr. Secretary, let me ask you about You always tell us That when you make decisions about energy you got to keep the balance between economic development National security and the environment because if you ignore one these are not sustainable in the long run Could you connect the dots for us on? National security on one side and Climate change on the other How do they relate to each other? well Obviously you got to do things for national security. They're just for national security But if you talk to for Jim Mattis for instance, he for three years was at Hoover He is a giant He's now secretary of the fence and he will tell you and he's told me that Climate change produces security issues and So the better job we can do on it the less we have to cope with for example The demography of the world is changing rapidly people don't seem to realize it, but it is And a lot of places that have the most fertility are places where It's going to become harder and harder to live because of water shortages because of hot weather and so on So it's going to be a lot of migration And migration is going to be accompanied by conflict And we got to figure out how to deal with that Europeans are struggling with that issue. We struggle with here, but it's a big issue So I think there is a connection in the military Military is probably one of the more at least in my experience when I was in Washington in the Department of Energy the Department of Defense was probably my closest partner in In partnering on energy technologies Given what they do They're the biggest user of energy Single user of energy, but the climate change was certainly very much part of their The thinking as to part of the strategy is including climate change in that We have a lot of international so can you raise your hands international students? So this is a very international crowd um Given what we have seen let's say in fracking where North America is Energy independent Other parts of the world the oil price is Not fully determined by OPEC now because we control some of the supply. Oh, I think OPEC is over it's in there their technique was to Cut down on supply raise the price and cause scarcities But we're able to surge now And they reduce their supply and other supply comes in So they lose market share and they won't get it back So they have to think about this in wholly different ways, right? And if you your electrifying transportation You know the the gas industry is talking about peak demand now not peak supply In which case and if you're producing electricity locally, which is always local Did the geopolitics of so maybe you could tell us about what do you think about how the geopolitics of energy? Will evolve moving forward Well, here's one example Right now we have a lot of concern about Russia the old Soviet Union. I remember during the Cold War We had a good relationship with Saudi Arabia And we persuaded them to pump a lot of oil so the price Sustained period was low. I think it was probably below the cost of producing it in the Soviet Union So the Soviets had no foreign exchange And I can remember one rather poignant moment when President Reagan said to Mikhail Gorbachev Why aren't you buying more grain? And Gorbachev said we don't have any money So there was a direct connection now Russia is being aggressive with Poland with the Baltic States not alone Ukraine and Somebody's got to put a stop sign up One of the things we've been advocating I've been advocating and we had a number of the Baltic States ambassadors in The talk about it is We now can produce oil We can produce gas more and more we have LNG capacity So we ought to put the Baltic States in a position where they don't have to rely on Russian oil and gas because It's pretty clear that mr. Putin will pull a trigger and he doesn't mind Having a freeze to death in the middle of winter cut off your gas supplies So they don't have to be in that position That's the way you now has an LNG receiving ship in its harbor. That's getting its LNG from Norway So that can work and we ought to be pushing on that. That's in the geopolitical sense But if you if you look at Asia for example, which is where the major growth in both Population as well as the economy so the energy demand is going to you know Go up significantly If you look at the big two China and India in terms of transportation fuel most in China most of the fuel consumption is in long-haul trucking and That's going to be hard to electrify so their demand for oil will be there and Given what we are seeing now In the rest of the world, how does that play out? India has no oil and gas a very little oil and gas Which is why they're going big time into Renewables electricity and trying to electrify. They're saying that they're not going to sell any gasoline cars after 2030 Which is a big deal So how does this? Keep everything is cross How does this play out in Asia then? Well, I was in Beijing about ten years ago. I was there and I had a meeting with Zhu Rongji, who is a fabulous guy Chinese economic minister And I went from my hotel to his office If there had been no traffic or anything I could have made in about five minutes, but it took me about three quarters of an hour So I told him most of that three quarters an hour. I was sitting in my car stopped at lights or in traffic And while I was doing that the car is idling I Have a car back at Stanford that when it stopped it when it stops it stops does nightl So if you could you do something about your environment problem get different kind of cars make a big difference Well China has thought about it a lot And they're going to elect your cars and they're trying to figure out how to do it and so on it it's a it's a problem to figure out how you would go about it, but The key is improvements in batteries and that seems to be very much in the cards And then of course you have to produce the electricity And figure out how to do that. I might say right here at Stanford. There's a power plant If you haven't visited you ought to take this class over and visit it. Oh, they went there yesterday Monday Monday, it's a fabulous and it shows you can do it There it is. It's producing all this electricity It's not like it's an outrageous Thing but you can do it. There are a lot of things you can do if you just go about it Well, we're gonna open it up for questions, but before maybe you guys can think about some of the questions But off energy talking about Asia How should we deal with North Korea? I think that's in everyone's mind Well everybody says You've got to work with China and that's perfectly obvious China could bring North Korea to heel But China worries Suppose we get this under control then what? Is there gonna be a unified Korea? I think it'll be US troops there. What's gonna happen? And we should be ready to engage with China On the future of Korea as we would see it as we would work with them to help bring it about That hasn't happened. I think that's a dialogue that has to happen. I Think it's also true that as Japan and South Korea and Taiwan Get more and more worried about this thing while they Have their fingers crossed and count us to provide a nuclear umbrella They're gonna more and more think maybe we better have a nuclear weapon ourselves And they can produce one like that. They have all this material from their power plants that they can turn into Fissile material and make they could have a nuclear weapon very quickly That's really gonna get China's attention So I think we work with them but Somehow I think we just have to work for a dialogue of some sort with North Korea and have a proposition that that has Appeal to them But also, but you don't get anywhere in bargaining unless you have a hard Position to bargain from And we're We're getting there, but we're not quite there yet. The reality is That the North Koreans have a whole string of artillery in caves aimed at Seoul and If you bomb the areas where they are you wouldn't get them because they're in caves they come out to shoot so Somehow if you're going to have a military operation you have to take care of that as well as the main problems And I don't know I Have to assume our military has thought about that a lot and what they can do about it I don't have any idea, but if it's going to be military you've got to do that But any use of military Is going to be really terribly damaging at human terms. I have Worried about nuclear weapons for a long time in the Reagan period. We had big ambitions for big reductions and we actually did the number of nuclear weapons in the world today is About a third what it was at the time we had our meeting with Reykjavik and with Gorbachev and Reykjavik So they've been big reductions, but it's now starting to proliferate and people have forgotten What a nuclear weapon can do I? Remember you ever hear of the Chernobyl incident accident power pop big accident Well, I was fascinated that the first meeting I had with Mikhail Gorbachev after that accident I found he had asked the same question I had I Asked an expert. Okay. We see this devastation What would it have been like if a nuclear weapon had been there? Answer much more devastating So that puts in your gut a realization of These weapons are not usable and if they get used The amount of human life the amount of devastation If in modern nuclear weapons were dropped in the Bay Area it would incinerate everything gone It's that powerful much more powerful than Hiroshima or Nagasaki so There's that risk and people are playing fast and loose with nuclear weapons they Now the Soviets are building. I've been told small nuclear weapons and we're I read that we're gonna have a program like that Sorry, there's no such thing as a small nuclear weapon. It's a nuclear weapon And it has all those consequences that you have to worry about We've had a program we We had a wonderful physicist named Sid Drell who died recently. He's a fantastic guy It was over at Hoover And I can remember when I was Secretary of State Jim Timby and Paul Nitzie who were two of my advisors they kept quoting this guy named Sid Drell as we worked on reducing nuclear weapons So when I came back to campus, I called him up and we had lunch and we clicked and we saw each other a lot And we held a conference on the 20th anniversary of the Reykjavik meeting between Gorbachev and Reagan Out of it came an article in the Wall Street Journal That Henry Kissinger, Bill Perry and Sam Nunn joined on Sam was Legendary former chairman of the Senate Armed Services Committee bill had been secretary of defense and Henry been secretary of state I've been secretary of state Sid and It was a global not a global impact And so we began to get things under control, but now it's spun in the other direction And I'm very worried about it very worried about it Well, I was I just thank goodness Jim Mattis is there. That's all I can say And and Secretary Tillerson Well, let's let's open it up for questions If you have any questions, you just maybe you can say a name and with school you're from and then and this is your time Yes The microphone All right, hello, I'm Avery I'm studying civil and environmental engineering and I was wondering with your ample experience In the energy sector Do you feel hopeful now in the sort of environment that we're in for a renewable energy powered Future and as grad students at this time in our lives How do you think we should channel our efforts to best achieve that? I Think now we're probably in the best position. We've ever been on energy Because we know how to produce what amounts to ample supplies of gas and oil We understand the energy picture better than we have before We have in our mind as the run mentioned we see that you've got to be careful about the environment You've got to be careful about national security got to be after all that the economy runs on energy So we have to have these things in our mind but We're better able to do it now than ever if we just will use the tools So we just have to keep the R&D going. It's an essential part of this And then we have to be sensible in the ways we use it move more toward gas for a while This idea it's the cruelest thing you can do to a coal miner To encourage them to think that there's going to be jobs there in the future. There isn't Best thing you can do with a coal miners to help them get switched into some other occupation That's much more realistic So I think we have the tools in our hands if we will use them effectively But you got to use them. They don't just happen automatically So I think it's a very important thing after an energy is key That's what our economy runs on our military runs on it our environmental effected by it So everything is here in energy. It's really important But we're in a better position that we've ever been to handle this well In fact the coal museum in Kentucky started putting solar panels On their roofs because it's cheaper To produce electricity that way. I think that's a sign of optimism well, it's a sign also that Ordinary people they understand what's going on It's only some of the people who are up in the abstract world that don't quite get it Yes Hi, I'm Karthik from the School of Engineering So despite the developing nations pushing for renewable energy countries like India and lower. I can't Sorry Despite the fact that developing countries are pushing for renewable energy Countries like India and China are still continuing to build coal plants So is there anything America can do to incentivize developing countries to switch faster to renewable energy? Renewable energies or did you say nuclear? Renewable. They're building coal-fired power plants in China and India. How can the developed countries incentivize? the developing countries To not build coal plants, but to move towards renewables Well, I think The R&D has a lot to do with it Because 20 years ago If you said let's go to renewables people would think you're crazy Because they weren't invented or they were invented, but they weren't anything like they are now right now Solar energy is it's competitive. It's a good deal And so is wind And as I said earlier if we can somehow throw our R&D breakthrough into large-scale storage That's a real big-time winner so you persuade people by Having something there that's concrete and does the job in a cost-efficient way And they can see that and I think I've talked quite a lot to people in the government of China about it They get it. Mr. Modi gets it in India. It's right. It's hard to implement, but still they understand it You know just to add to that I just got back from China and they are blocking their stopping Either the operation or the construction of around hundred odd odd coal-fired power plants in China Because they feel that this is going to be stranded assets in the future So I don't think you need to incentivize them. I think they're pretty incentivized to go in the right direction They've got double the wind capacity Than the United States So I think they and as you said well, they're building nuclear power also that's right, and I am alarmed that we are letting go of that I think we should be maintaining our posture and At least there's some going on but it's basically going down and We should be also be trying to lead the way into small nuclear reactors And after all Mr. Rickover did it and Rickover did it in the Navy the power submarines and aircraft carriers and so on We should be able to figure out how to do that. The reason we can't just use a Navy reactor is it has weapons great Uranium so you have to figure out how to do it, but if you had small nuclear reactors They would be buried They would be their fuel would last for a long time. It wouldn't have to refuel all the time And they're small enough so that they would They wouldn't require a huge grid around them. They'd be localized, which would be an advantage Because I think one of the things we have to worry about an energy is the vulnerability of the grid to cyber attack and so on Everybody realizes that so the more we can have distributed energy The better off we're going to be So I would hope we could keep working on that Couple of my people have worked for me and over at Hoover published a little book on this subject And I'm amazed at the reaction to that book. I mean it's breaking It's actually a bestseller and they go to Washington. They get a big Reception lots of interest. So I think this is something to keep working at not just renewables because there's no No effluent from the nuclear power plant. I Think in Korea. We are seeing the cost of nuclear to come down Koreans are making Probably world-class nuclear plants right now United States the cost as we build more the cost is going up Which is in the wrong direction? Normally the cost comes down as you build more There's I was president of an engineering construction company called Bechtel for a while and we built nuclear power plants You know, they have walls like this. They have rebar like that And the regulatory agencies come along and you get them halfway built. They say no change it around It's wild, but I understand now you can get a license to go from first concrete to turbine roll so you you have an open field on the construction process So the regulatory apparatus is something that needs to be worked on the National Regulatory Commission or nuclear nuclear regulatory Commission is where really the challenge Get that right. Yeah, obviously you have to regulate you got it, but You have to regulate carefully and having in mind your impact you have on the construction process and On the uncertainty you create which holds up financing and so on. So all these things are a factor All right, you had your hand up My name is Tyler. I'm from the School of Business You may mention of both the military now saying that climate change could actually pose a national security threat You also brought up the topic of being able to help the Eastern European countries Against fighting against sort of the monopoly of Russian natural natural gas How would you how would you like to see the government policy to balance both? future climate change but also fighting the more immediate national security threats that we see from places like Russia and Both from from China either by helping get their support against North Korea or by Building a coalition against them in the Eastern Asian area by supplying natural gas to some of these countries like Japan and elsewhere Given the shale revolution we really do have that ability to supply other countries with the oil and gas But that also goes against a lot of the climate change issues that we are also fighting We had Tension with the Soviet Union and they had deployed Intermediate-range nuclear missiles That could hit from their territory could hit European targets hit Japan hit China But not us because they were intermediate range And the diplomatic ploy was to say would we risk retaliation By their intercontinental missiles by using our intercontinental missiles to counter their intermediate range So we developed a program with NATO where we would have a bargaining with the Soviet Union and trying to reach some Agreement on the use of intermediate missiles and if we couldn't come to agreement We would deploy our own intermediate-range missiles in Europe President Reagan understood they were not only bargaining with the Soviet Union we're bargaining with our European friends because when you put a Nuclear weapons someplace. That's a target So you don't you're not anxious to have that kind of a target. But anyway, this was what we worked at and we worked hard On a negotiating process that everybody could see that we were really negotiating a good faith And in the end it was clear we weren't going to get anywhere and so first we deployed cruise missiles nuclear-tipped cruise missiles in Britain Margaret Thatcher helped with that The same in Italy and reality helped us there So cruise missiles are cruise missiles, but that's not the same as a ballistic missile We deployed ballistic missiles in Germany and it was a giant event The Soviets withdrew from negotiations They drummed up war talk It was a very tense atmosphere Our NATO alliance held very well together everybody's support of the Germans It was helmet called finest hour. He Managed it politically in Germany and we deployed the missiles So we had thought they could hit Moscow being having the Germans able to destroy Moscow was an allergic thing so we had President Megan made a sort of a high-level speech. I made a more operational speech Trying to calm things down and over time things softened and by August of 1974 I was able to go to the president say mr. President at Four different capitals in Europe a Soviet diplomat has come up to one of ours and said virtually the same thing Which he think boils down to if Gromyko the foreign minister is invited to Washington When he comes to the General Assembly in September, he will accept In other words, the Soviets blinked. I Said you want to think this over because President Jimmy Carter canceled these Gromyko meetings when they invaded Afghanistan and they're still there He said I don't have to think it over. Let's get him here So we got Gromyko and came to Washington that was kind of fun because Nancy Reagan was my pal And she always fixed me up with a Hollywood starlet at White House dinners. I got to dance with Ginger Rogers and stuff like that So I went to Nancy and I said The deal is Gromyko is going to come in and we're going to have a meeting in the Oval Office President may want to have a little sidebar one-on-one But then we all walk down the colonnade to the mansion, which is your home And there's some stand-around time, and then they'll be a working lunch So how about you being there for the stand-around time be a nice gesture of hospitality? She's okay. I'll do that And so we walked down there and Gromyko's a smart diplomat He sees Nancy. He knows she's influential. So he makes a beeline for her And before long he says to her Does your husband want peace? And Nancy could bristle at you. Of course my husband wants peace And he says well, I'll end every night before he goes to sleep whispering his ear. Peace He's a little taller than she was so she put her hands on his shoulder pulled him down where he had to bend his knee And she said I whispered in your ear. Peace. I said I said Nancy you just won the Cold War But then after the election I had my meeting for the Gromyko and Geneva and we got the arms controls started again and the whole thing was now on a different track and I believe that the deployment of those purging missiles in Germany with the turning point in the Cold War Now I think that we have to have some purging moments certainly with Russia a purging moment Says stop Maybe in the Ukraine. We don't give lethal weapons to the Ukrainians. They have their feet on the ground We should I think we should do that But anyway some stop and then get ourselves around to working more constructively with Russia There's a lot to be gained by that And with China I don't want to go too much on my own experience My own experience was very good with China dealt with Deng Xiaoping Wuxi Chen was my counterpart And we worked out an agenda and we worked through it. We had Good working and I said to Wuxi Chen once I said whenever I come here You put me up in the state guest house the meetings are all in the Great Hall And I go back and forth on the road and I've read China is a big country, but as far as I'm concerned It's two buildings in a row So he took me on a one-week trip around China. We had more fun But one of the things we did We went to Shenzhen and in Shenzhen, I don't know still there, but there's a big amount of acreage Maybe a couple of acres. That's a miniaturization of China. You can walk around China And you get a sense of it and then there are some buildings up above And it turns out these buildings are each one has a different Chinese chef And you think Chinese food's all the same. No, it isn't There are different kinds of chefs. They take different things. There's diversity in China It's a lesson I'll ever forget but Anyway, I think China can be worked with It was relatively easy and I'll tell you a story that Two stories about Xi Before he was president, but he was identified as the president we have we have a track to with China and Henry Kissinger Basically, he's with I help him with it And she gave us a dinner When we were there and I sat next to him at the dinner and I knew he was going to go to Washington so I said Why don't you stop in San Francisco on your way to Washington Chinese American mayor there? He's doing a great job and be well-received. We have China down And he said well, he said I can't do it because I've already agreed to stop in Los Angeles But he said if I came there what I'd really want to do is come to Stanford Because there's something going on around there that I would like to find out more about And you can't really find out about by reading you got to go and talk to people interact. I thought that Was a very interesting statement on his part. They understood something about the creativity going on around here and how you learn about it Then another occasion There was something called the sunny land summit. This was a I don't know three or four years ago when the old bed and Obama was in office At sunny lands is an estate in Southern California That the Annenberg family had They've made it into a place for big public gatherings And she sent word She said I'm I want to come a day early and I want to bring my wife So that's a statement. I want to come I want to get to know you Want to become friends. I want to be able to have candid conversations Where we can trust each other and they're gonna go blurry to the press about something other we can really explore So that's a very good sign My wife who's good at protocol gets a SOS from the State Department. She go down to Orange County and help out So she goes down there. There is no high federal official there to meet the incoming president of China. Nobody The first lady sends word she can't come at all because of the birthday one of her children Which turned out to be the following week So Charlotte sends an SOS to Jerry Brown our governor and Jerry comes So at least somebody is there to meet the next day the Chinese she cools its heels and Charlotte entertains the first lady. I said, what is she like? Oh, she's a beautiful woman She's stylish. She's fun. She's interested in everything She's got an operatic quality voice. They have to keep her stage appearances down or she'd be more popular than her husband But I'm winner. This is a winner. This is a winning couple and you know in the World of Diplomacy you got to get to know people and understand them and listen to them So you can develop a trusting relationship. We can have candid conversations and get down to the essence of things And I always say and these things trust is the coin of the realm and that's He was saying I want to have a relationship of trust And he got turned down It's not only a missed opportunity. It's a sign of disrespect So we've got to change this around And I don't know what happened down in Mirago, but at least he was received and his wife was received and But it doesn't look to me like it's followed up on the way. I would hope but I I don't I'm not a person who says you can't get along with the Chinese. You can I've done it and I see all this evidence that she Will reach out and work And I hope they will I told you Matt, she ought to go to China gym He was he was here for three years And I know him very well and you know him. He's a wonderful guy. He's really able He works hard reads a lot And If you ask him his opinion, he tells you exactly what his opinion was right between the eyes. There's no ambiguity about it So he's good So I think you have to work at these things that you had a big range of things and people If if you will work with people on a trusting relationship with most people They will Yes Hi My name is high ma'am in the material science and engineering department and I wanted to ask you why In your opinion, the united states has resisted Developing nuclear energy in comparison to other countries in europe and asia Thank you Why we have insisted on it Why we have resisted developing Well, we have what what I think is called a one two three agreement And we'll help people with nuclear power plants if they agree on certain restrictions on what they do with the spent fuel And that's important because the spent fuel can be turned into a nuclear weapon so I think it's important for us to maintain a posture in the nuclear power area so that we can continue to surround the development of nuclear power plants With the kind of atmosphere that prevents them from leading to a nuclear weapon So that's our only resistance But the fact is now We don't we don't produce that stuff to sell The koreans Do it The other countries do it and we're dropping out and I think it's a mistake As I said earlier, I think we should back in it one of them And the united states has always been the innovator. We started all this And I think there's a lot of promise in the small nuclear reactor field And we should be pushing on it and if we could develop that as As a technology that was useful it would have a huge impact everybody would want to Because then you would think of what you would manufacture it Your construction cost would be minimal It would put an entirely different economics on the whole thing And you still have the climate advantages And you have as I said earlier a little bit more insurance against what can be done against the grid Yeah, you had your hand up up there Yes, ma'am Can you explain more about revenue neutral carbon tax and why is it a better option? Speak a little like Can you explain about revenue neutral carbon tax? Really neutral carbon tax and why is it a better option? As compared to cap and trade or maybe Well, I think it's better than cap and trade Because it has a price out there That is constant The cap and trade the price goes up and down all the time. You don't quite know So I think just putting a price out there and let people compete against that price is a better way of going about it I I helped Jerry get this thing passed. I wrote a letter for him To support the cap and trade here in california But that was the only option on the table that carbon tax was not on the table So And if you make a revenue neutral, you don't have any drag on the economy because of the tax And I even got one of the tax haters convinced of it because it's really not a tax if it's revenue neutral Because it doesn't take any money out of the economy and So that's why I advocated and people get a check For the carbon dividend This is your carbon dividend. What's not to like? No, it's not to like. But suddenly you've got politics on your side Okay, zan, uh, my name is kabeer. Abiyose. I'm a incoming student in the department of mechanical engineering Uh, I understand why one might prefer a revenue neutral carbon tax from a political perspective but There's a potentially persuasive argument that you know that money could be used whether to You know help people that are adversely affected by emissions They don't contribute Or to continue to invest in other technologies that can help decrease our amount of emissions So my question to you is If by some stroke of magic you were able to control how revenue from a carbon tax was spent What activities would you prioritize? Well, first of all I think If an activity is justifiable for you to spend money on it Money can be appropriated for that purpose We've had For quite some time now pretty good funding for energy r&d And that's just because people think this is the worthwhile thing to do So things should stand on our feet that way and not to be dependent on a flow of money from the carbon tax So I would think it just you just appropriate it One of the problems as I said earlier with the cap and trade in California is That Jerry uses it to fund his high-speed rate project Which is not very popular So a lot of people send them against cap and trade because I'm against the high-speed rail But if you separate the things you're better positioned you argue for the Carbon tax with the cap and trade on its merits without having to argue all these other things Yep question over here Thank you. My name is Charles, and I'm actually from China from the University where you met with Zhu Rongjian He was the dean in our university and so I've got a question is so from the From the perspective of scientific research, we've got many r&d progressing and we've got many new technology that can be applied but there is also a tendency currently that a Consider a considerable proportion of people in the society that don't trust science Don't trust new technology say there are there are people in the United States don't believe in global warming There are people in mainland china boycotting genetic modified food and there are people in Taiwan who claims to shut down all the nuclear power plants So what should the government's role be in this problem? And what should they do do they go with the scientist and risk To lose the next election or do they go with the people and do nothing protecting the achievement by scientists? It's a good question. Trust in science. Well, you you identify a major general problem And that's resistance to change I started my academic career teaching at MIT So MIT is full of engineers who think if you solve an engineering problem, that's it. It's done And I wanted to know it's not done. That's a start and I've developed a little book of readings and cases and one of the readings was about the introduction of continued same firing into the united states navy There was a young Lieutenant named sims Who discovered a different way of firing ships roll? And the way they were firing at the time was There was a certain point in the role of the ship when the aiming was just right and you fired What sims does he developed a way of constructing the platform from the cannon So that the ship is rolling it can be fired continuously Obviously huge improvement, right? No, it's obvious And this was tried out and experimented with and so on improved it out But the bureaucracy in the navy was they liked the old way and so they resisted In fact, they were going to court-martial him And so he wrote to president roosevelt who was interested in the navy And that got people's attention But then world war one broke out and they immediately adopted it because you know, this is serious now So it was an example of resistance to change Which is very deep in society And you have to think all the time If you have something new How are you going to get it accepted? and That takes some doing And you start by realizing the chapa problem. You don't just Think it's all going to go away But I think the steps you've taken for talking about energy and climate are number one you have something that works And it's less expensive And that's the reality that you start with And then there's a need and people start thinking yeah, there's a need And here's a way of meeting it And so you don't get impatient with people. You try to draw them into it And but I think if you take for instance solar energy That's been an interplay Gradually our scientists and engineers have figured out How to do it better and better So that the solar panels Give you more electricity for less cost And so they're now very competitive So people see that But also they have to get convinced this is a good deal And so more and more people are selling that point And you get a certain kind of Satisfaction, I look at the solar panels on my house and I kind of like it It's not that they dress it up and make it look better, but I think it's kind of I feel as though well, I'm doing my bit So I think you're unright to say this is a problem And but at the same time I think Our experience is full of examples of how Some major change has taken place So we need to study that process And see how to bring it about We'll take the last question over there You had your hand up for a while Hello, sir. I am Ayush from the department of electrical engineering So I have this question like Our performance The world's performance in an energy plan depends hugely on how the developing countries will perform in that respect But the developing countries have More often complain that the us and the developing and the developed world Expects a lot from them without helping them technically and providing the sufficient cooperation So is that criticism true and why is it so if it's Yeah, I think what he's saying is that the developed countries You know they have a criticism that the or the developing countries like china, india and others have a criticism that The developed countries are expecting too much of them where they have to grow their economy and whereas The developed nations like OECD countries Have most of the co2 came from them and so how do we If I understand you right, how do we resolve this or is this a accurate criticism that has been I think it's a fair point On the part of the developing countries And it needs to be recognized and there is I think in the un agreements provision of Some funds that go from the development developing countries to kind of recognize that point and help Bring about the kinds of changes that are involved But it obviously isn't going to solve the whole problem, but at least it recognizes the problem But underneath it all I think everybody have to recognize that we all have this problem And we got to get into the habit of saying if there's a problem, let's work together to solve the problem and We're not doing a very good job of that in the united states these days, but We used to do a lot better. I can remember People were talking about tax reform now like it's In 1986 We wrote about a huge tax reform Piece of legislation that passed the senate 97 to 3 So those are the days when we could say all right the point is to solve the problem not to break political points Actually the legislation was introduced in both in the house by Gephardt who was the democratic leader and in the senate by bill bradley. He was a democrat and Somebody asked president reagan if he bothered him two democrats introduced his legislature. He had proposed it He said it passed That's the point So I think that we have to get ourselves in a problem-solving frame of mind and recognize The point you are making and I think to a certain extent some money helps to do that But at the same time the real Point is to develop ways of dealing with the problem that work that are inexpensive And we're gradually doing that and so if there's one message I could leave today is that energy r&d We now see over a period of time has worked That has produced new different things that Give us clean energy at less cost more secure energy So it has worked So let's keep doing what has worked We'll be better off and everybody will be better off and share the results broadly There's an interesting program the state department has it and I was not aware of until you came over As they get a guy like a run And they say go to country x and find counterparts And let's develop a kind of scientific Back and forth and maybe some of them can come here. We can go there and share ideas You but you did that in fact it was very interesting. I was They asked me where where do you want to go? I said I'll go wherever you want me to go So they send me to the Baltics and Poland given in talking about Baltics um, and I was hosted out there by The ambassadors the u.s ambassadors out there And all of them said that I'm so glad you're here Because all we get now are You know, it's not that we don't like but we only get military people u.s Military people you're the only non military person who's actually come here and spend some time because they They want to build relationships which are not just military But more civilian on the scientific side. So they were extremely happy Yeah, but what you were doing was a big contribution to their security the security, right? In many ways more than the military So on that high note Thank you so much. Mr. Secretary for coming and spending an hour with with all this incoming graduate students Out here who are interested in energy I think this is as you just heard While you are focusing on your masters and phd and material science or some or economics or gsb There's a broader view out here that you can get in stanford and I think while you're here as students Make the most of this time and get this broader view while you're here. So thank you. Let's thank mr. Secretary