 Well, good morning. So it's great to be back. It's Stanford. I'm always sort of thrilled to be associated with one of the world's great universities and to speak in front of faculty and students where the admissions committee would have never let me have a place. So it's particularly thrilling to sort of share my thoughts, be outside the box a little bit. I'm not quite sure what my title meant either, Sally. People kept calling going, you have to have a title for the talk. You have to have a title for the talk. So it's sort of what came to my head because it's what I work on every day, trying to devise something that is radical and have some degree of inflection possibility and some potential to be transformative, not just to our energy systems and to the health of the planet, but to communities and to people. I have these double hats where I work on natural resources as a conservationist, which used to sort of just be a passionate hobby. Now it's quite integral to my work and my professional acumen as an energy developer or an energy technologist. I view these things as completely symbiotic, mutually reinforcing, things that have to both be taken in equal measure of importance to understand the greater problems that we're trying to solve. At the end of the day, we say that nature doesn't really need us, people. So all this talk about saving the earth is a little bit excess hubris on our part. It's really about saving ourselves. The earth will be fine. The question is, what is the longevity of our species and what is the quality of interaction we have for our humanity and for our communities? And so energy is not just sort of a part time thing that we watch the ups and downs of the price of a barrel to see how secure we are or how much tailpipe emissions we can measure out the back door. Energy is actually the life blood of what creates affluence and prosperity and lifts up people in society to give them the opportunities to interact and to be our best selves. So that's what I mean by crude code and capital. If I break it down, crude is not just sort of a barrel. It's not only oil and gas and the things that we like to measure our society's wealth by. Crude itself can be any of the raw natural resources, not just the mining and the metal and the extractives and the things that are on the commodity exchanges but as or more importantly now than ever the things that we don't measure, the things that are insufficiently accounted for, the natural capital of our fisheries and our forest and our mangroves that would have been so useful had the port of Houston not paved them over in the wake of these storms. Lots of that's going on here at Stanford so it's useful for me to talk about it when I refer to the natural capital project and the idea that we can break the tyranny of accounting systems and think and design beyond them in ways that we not only account for what the true gold and value is for us as a species, for the habitats that we seek to nourish and protect us but that we can begin to value them in such a way that we integrate that value into our economy and monetize them in exchanges so that we understand natural capital has all the value of the extractive commodities that we have so efficiently began to deplete from our ecosystems. That's what I'm talking about when I'm talking about crude. Code similarly is not just the useful exiting undergraduate into the high value paying jobs of Silicon Valley at exorbitant prices so that they can become software engineers at Google with lots of massages and sushi bars, that's not code. Code is actually everything that is going on in the technological revolution on the back of those bits and bytes, including artificial intelligence and machine learning that is outpacing the way our education systems are scaling opportunity for most of the country. That's what code is. It's the technological innovation that we in Silicon Valley are blessed in almost a seemingly endless Florentine era at the epicenter of innovation to consider systems normal but that doesn't actually proliferate or translate across most of the country. And so the people most responsible for code here in Silicon Valley or in Boston or in Austin or in other highly educated centers of innovation all too often look at the people in this country and elsewhere that are responsible for natural resources and they say dismissive things. You dinosaurs can't drill your way out of this and then the son of a Greek goat herder shows up with something like hydrofracking and sort of proves them wrong that actually you can drill your way out at least for a time, at least at a measurable cost. We're not sure whether that cost is worthwhile or not but yeah, we can turn drilling into a manufacturing process on a completely reliable basis and understand how much yield we'll get from the Permian basin and break the back of OPEC in ways that we couldn't have conceived of when the president of the United States said we're addicted to oil. We can actually devise cures for that and mitigate what the effects of Saudi Aramco are on the world, that doesn't necessarily mean we've solved all of our problems. And then those in Houston and the headquarters of those great institutions look over here in the Silicon Valley and Klingtec and all the kids at garages and all the activity in Sand Hill Road and everything that's going on at Google and X Labs and they say oh, solar, Klingtec that's the technology of the future and it always will be. That's the great inside joke if you're from the oil and gas belt and they don't understand for a minute the stochastic nature of the inexorable evolution and progress of technology and however lumpy it may be however they predict the price points too high at any given snapshot in time the inevitable inexorable progress continues until ultimately we hit these points of inflection and I've got to see it. I've got to see it not just now one of these last GCEP convenings I was here at the very first of the GCEP convenings and back then as a young presidential appointee arriving immediately after hurricanes Katrina and Rita had devastated and basically removed and evacuated a major United States city full of culture and history at that point when all of our rigs were knocked off our platforms and our oil price went in a 12 month span from $25 to $147 for a record price and before there was a financing crisis there was an energy crisis where people had to choose between filling their tanks or paying their gas bills or paying for food and grocery at that point in time when addiction to oil meant most somebody informed me I could come to Silicon Valley and get them to translate white papers into business plans that if only the U.S. government could play an inductive role and begin to catalyze entrepreneurship where it marries university scholarship in such a way that people could possess license and take risk we could scale to unprecedented heights the amount of capital formation necessary to have a consequential impact in a time frame that was relevant and that's what we did sort of 13-14 years ago and that's why there are more in the department of energy officials today associated with Stanford University of qualified competence and importance like Lynn who you just heard Arun Majumdar, Steve Choo, Cathy Zoe the list goes on folks are here because Washington is positively boring by contrast we went from an era of immense bipartisan arguably non-partisan problem solving the seriousness of rolling up the sleeves and saying what does it take to get things done passing monumental legislation and statues with both a Republican Congress and then a Democratic Congress for months comprehensive omnibus energy legislation and people say oh there's no such thing as national energy policy yes there is in the United States it's called statute when you pass laws comprehensive laws one upon another it forms things and that's how we got the title 17 loan guarantee program with 80 billion dollars for clean energy that avoids sequesters or reduces carbon building efficiency reform what people thought was the phase out of incandescent lighting but actually turned out to be a revolution in LED lighting there's no such thing as a commercial building built today that doesn't start with LED lighting you can go across Palo Alto here and you can see that Tesla's plug-in vehicles are the Camry's of Palo Alto I mean they're so frequent around right and I can tell you there wasn't a single one on the road ten years ago in fact in that first trip out here I had the privilege of the CEO of Tesla giving me the first ride in the first Tesla and I sat there and looked at the graphite block roadster and I thought if I get into this sort of lithium battery tied together miniature machine refitted lotus is it going to blow up sure enough it stalled out a few blocks from the factory I sort of looked at the Martin Hamburger and I said I don't know there's a lot of press back there do you want me to walk or hitchhike or how do you play it and later on I ended up being part of an investment in Tesla but we've changed we've imagined what the future could look like with electrified drive trains and alternative vehicles and light weighting and carbon materials science dominating the way that we address our addiction oil and at the same time simultaneously they changed in the land that I grew up in in Texas and they said not only can we get this on a reliable basis we can do it in an increasingly environmentally sensitive manner in fact we have no choice if we don't pay attention to seismicity if we don't pay attention to water consumption if we don't pay attention to community development the industry will end so there's an existential threat out in natural resource land and it's not coming purely from the obsolescence of what's going on in tech land and there's a real need out in tech land to understand what the transition looks like as we move to peak demand of natural resource extraction and that's really what we're facing a multi-decadal transition that requires comparable non-partisan leadership that goes after not just majority one majority plus one of your own party but a two-thirds majority of both parties in ways that create durable sustainable predictable signals to the marketplace and to the technologist to keep innovating that's crude and code when they work at their best to reinforce one another and find themselves in symbiosis rather than in competition but what about capital oh capital for years and years people say oh if I just had an innovative source of capital if I could just conform capital to my invention then the world would be that much better instead of sort of saying how do I create a business model that conforms to capital systems and the truth is we need innovation in capital systems as much as we need the innovation in the technologies in the nanotech the biotech and the clean tech itself and what does that innovation look like it's not sort of tweaking the financial products of a fiat currency from Bretton Woods right we have so much different forms of capital evolving in the 21st century that we have to take very seriously for the intrinsic nature of what capital actually is we have virtual capital what is that it's bitcoin they laugh at it bitcoins just a product it rides on the blockchain the blockchain is the most consequential development and evolution of interaction it bits and bytes since the creation of the world wide web bit bitcoin may be the first or the last of the virtual currencies but it sets a demonstration and a mark for how peer to peer trusted exchange can and will likely continue to evolve outside the jurisdiction of governments and with very little choice by governments of that inevitable trend and since technology is never actually benign since technology will either be incredibly disruptive as we have experienced in the best most beneficial way in clean tech or it will fortify and calcify the status quo as we are seeing in the lockdown and the use of it by autocracies to monitor people's homes in the way that brave new world contemplated since it's never benign we have to be on top of it we have to have technology employed and harnessed in the service of humanity and so clean tech nanotech biotech infotech will all amount to not if we do not concentrate ourselves by design on humanity how do we take these technologies to serve society's interest and not lose sight that the goal is not merely lessening tailpipe emissions or capturing carbon at the flu the goal has to be the equitable just servicing of our society to better the nature of our interactions amongst each other as we elongate our species and our habitats survival here that's a bigger thing than saying it's all solved in the era of abundance we have enough oil, we have enough gas we're humming on technology boy the real estate prices are good everybody's prospering that is insufficient in a place when we talk about a tragedy of the commons and what is that tragedy well there's the classic economic version we all know the story of the Boston commons and nobody having ownership I view it as perverse market incentives misaligned policy and insufficiently or inappropriately applied technology perverse market incentives well, you know the car I've got is worth more than $100,000 I never as a kid thought I would be in such a car there's no market incentives out there between subsidized interest rates and low payments that would induce me to be in it but that's not enough that it's fun and it's got torque and it's the first time since I'm 16 years old I enjoy driving around, it's not enough the taxpayer should give me an extra $7500 for the privilege of driving it at a time that people in East Palo Alto can't get $7500 together for bus fare for a year of commuting to their place of work that they inevitably have to leave their towns to find incredibly misaligned and perverse in that and we have to be corrective in our policy prescriptions so that we don't find ourselves in Palo Alto juicing our Teslas with photovoltaic panels that we can buy at Home Depot sipping electrons with our Nest thermostats that we control on our iPhones and barely paying anything to leave the gunk and debris of the depreciated grid to those who can't afford access to the solutions that are inevitably increasingly differentiated and vulcanized by economic choice we have got to be attentive to designing the utility of tomorrow and reimagining the society we want to have this is not actually beyond our reach it is a compelling obligation and imperative for places like Stanford to think ahead because we have the opportunity to think in such an integral and social conscious way and we have done it before like a century ago something happened we even graphically associate great ideas with a light bulb used to be an incandescent light bulb since we are getting rid of incandescence we don't think of it that way anymore but it used to be when you had a good idea you would put a light bulb over your head oh what a good idea and that idea was so big and so powerful that we could turn night in today that we could allow people to read after they came in from the fields of a long day's labor it was so powerful that we as a society made a declaration everybody must have it it has to be uniform it has to be universally accessible it has to be affordable it has to be reliable and we made a social compact with ourselves we even created government agencies to ensure the funding and the extension of the very last mile to the very last outhouse that everybody should have lumens at night because they were part of our society that was our original social compact with energy and now we've done the right thing we've induced all of these new points of light through the internet of things and machine learning and electrification of drive trains and autonomous vehicles and soon autonomous vehicles that can fly we've done all these things and we'll continue to do them for the right reasons for the beneficence on society and our environment but will we take care and integrate with comparable precision and with comparable priority the need to have universal and uniform access to all so that we ensure that the opportunity that derives from those new technologies is shared in an equitable way that lifts us all up for the society we want to form those are the core questions that we have for the tragedy of the commons it's not sufficient to say boy we've got low and steady price natural gas as far as the eye can see I grew up with that $2 natural gas we used to have $30 30 year contracts on natural gas when we'd build a power plant in the 1980s and so we're back so we're back and then we went through the cycle we're using natural gas for a power plant was like using Hennessy XO to wash your socks it was just nuts why would you it's so precious hold on to every last drop of it and then all of a sudden we're back and no time's good again one thing that we know for sure when we basillate between national security and not distress from our reliance on hydrocarbons that even in an era of abundance we do not remove ourselves from the era and the endemic and intrinsic nature of volatility associated with those sources of energy so we have to wean ourselves from it in a way that lifts us all up and that's what we mean by a radical remedy of the commons we mean trying to find the symbiosis between our humanity and our communities and our natural surroundings and understanding the actual value of all the natural resources whether we're burning them or whether we're trading them or whether we're conserving them so that those trees that Lenore rightfully says is the best technology that's not going to be surpassed we're not going to have a better oxygen making carbon consuming machine than a tree so how do we have more of them that's radical remedies at Emerson we try to think of it very simply what are the most differentiated solutions to the highest value problems that accelerate the pace of maximum impact that's our sort of very simple spectrum on things if you want to reduce it it is how do you think differently and deploy as quickly as possible to scale in the most impactful way that's what we do well there's lots of things that are differentiated you know electric skateboards are differentiated you can see them all up and down the streets of Palo Alto but they're not a very high value problem I love solar panels and the revolution that came about that but they're commoditized like you know Keds tennis shoes in Chinese factory number 17 now so high value problem but very low differentiation we've got to focus on in these halls of Stanford and I think you're seeing it on the poster boards outside the differentiated solutions to the highest value problems there's always been the hallmark of this university as Jim Sweeney once reminded me and so trying to understand gas densification whether it's carbon molecules or methane molecules how do we compress and store and transport gases that's a huge thing if we were only addressing flaring that would be an enormous thing do we have to build an LNG facility to send these mobile bombs into ports all around the world you know sipping a straw in the abundance of shale to get to a usable economy for natural gas or is there a way to end flaring all together with densification and porosity of nano level materials and absorptive materials metal organic frameworks what else can we think of what else can we imagine in the way that we imagined electric cars are cars that drove themselves out of Silicon Valley said that that's nuts it'll never happen 120 months ago so that's where I want I think I should leave the challenge for today think holistically try to bring all of these disparate elements of our energy economy together without accepting that something is more superior and something is more subordinate because it wasn't originated here or because we own the idea first think holistically about how to bring the parts of this country together in the Rust Belt and in Appalachia and in the oil patch with the brilliant centers of innovation in Boston and Austin and Silicon Valley because our national leaders aren't and we have to here, political obsolescence has set in so much dysfunction at the highest levels of erstwhile leadership that they have rendered themselves no longer a part of the rational conversation for problem solving in this country at this time that's tragic but that's where we are individuals unfortunately as we're finding out from our fellow Americans living without water for days people whose children served in our military and risked their lives going hungry in the United States of America individuals aren't positioned in a catches catch can way every man for himself to advance these things so somewhere in between political obsolescence of a nation state and overcoming to a degree the mythology of rugged individualism solving everything we have got to form the collaborative communities that have contagion in problem solving and figured out shared ideas and shared solutions to patch us back together I was a shock when I came back to America to be honest with you after 12 years abroad and people explained to me that these were the red states and these were the blue states it was the simply the most shocking notion for a kid who was at the Berlin Wall chipping away at it after 40 years of cold war and the receding existential threat of nuclear weapons for somebody to come back to me after going abroad to make a new world order and say oh, which state are you from the red ones or the blue ones because one of them is not the good guys I had no idea I was sending postcards from Texas with iron horses of mines and going hey of well heads this is what we do in Texas Cadillacs with big horns Eric and you know what are you doing in California surfboards everything else to come back and know that we were divided by the basis of where we were from is one of the greatest misfortunes perpetrated on us now being exploited by our erstwhile leadership here in Stanford here with this technology with this subject matter with this track record with the analog of experience that we have we have an incredible opportunity to create that kind of foolish thinking we can take green and let it cover over everything about red and blue we can take innovation and make problem solving superior to scapegoating and division but only if we connect the dots beyond the tailpipe beyond the flu beyond the electrons beyond the nano and material science and understand it's a question of our humanity and our dignity to build out of our communities so those are the radical remedies of the comments and you are the folks to make the radical remedies and I'm so privileged to be amongst you and share with you a little bit about our insight and to work with you in the days, months and years ahead to make it real thank you for having me did you want me to take some questions I didn't hear you say anything about income redistribution because the incandescent light bulb as far as I know wasn't sponsored by the government it was made available and people bought it because they had the money to buy it and what's your point you are asking for a revolution or change but you didn't talk about income redistribution to make all these wonderful things we are doing here affordable to people who have no training who have no money who are not voting for us I think I understand your question but if I'm answering it the wrong way feel free to correct me there's two angles to that there's a supply side and a demand side relative to the pricing that affects low income people on the supply side there used to be a very strong argument by the incandescent light bulb producers that we're only two cents and your LED light bulb is three bucks and they'd go we can never leave incandescence because it's three bucks okay and the government had a lot of different obligations how do we take the price of LEDs down to a comparable price but also how do we regulate the standard so that we induce the market on a fair and equitable basis to compete that price downward so when we came up with a lighting standard everybody said you've gone Marxist you're phasing out incandescent light bulbs and by and large by the way this was many of the same folks that are against that standard today voted for it okay and by God I'm going to have my incandescent I'm going to cook an egg on that thing you're not going to take that heat away from me baby and this is not just for lighting we saw this with 1.6 flush toilets same argument boy it cost a third of the cost to have a four gallon flush toilet than a 1.6 so I'm going to Canada by God I'll get two flushes in 1.6 efficient flush toilet people are married to inefficient and backward technology the government actually has an obligation at some level to say if it can be produced if it is available if it is good for society that we should share in it creating that standard actually induces a market and the prices collapse and so today where we had no LED lighting on the shelves at Home Depot today it's dominated by LED lighting that is cost competitive for over people aren't having to climb their ladders to go change them because they last for 20 years at a pop so the cost efficiency of that device came directly from government rule set defining a market government research driving the price down and having the insight and ability to project forward and say it is better for our citizens as a whole to have a new standard than to say every man for himself for two sin imported 98% inefficient 100 year old technology to persist okay now I believe that now if you still say but there's a delta it's still unfair that some people have more disposable income and other people have less disposable income what do I do about that I point to the California AB 32 and I say well California has today the world's most efficacious policy for pricing carbon and not simply because it works and there's a mechanism for what you would call redistribution I would call a useful taxation on environmental degradation and insecurity okay but in that there is a carve out of up to 35% that that funding is meant to directly go to the communities that are marked as lower income and distress okay so we do have mechanisms they're new and they're insufficiently tried but I think California as the laboratory right now in the United States and in the world of efficacious climate policy has it incumbent to get the implementation right and to prove out the question that you're asking can we get it right and make it equitable so choice exist so it's very very nice talk thank you very much focusing all towards the humanity of who we are I really appreciate it I guess we're probably all concerned about government research funds coming in government standards and of course California is pushing the way do you have some general ideas or advice right now going through the federal government seems awkward to say the least about where we can go to make more of a difference here as a university or individuals in those areas we go through California of government because it is allowing us liable to do it or have any other thoughts about that and this is specifically asking about government R&D government R&D but also government standards things that we can do because we have to through government institutions to like you say make these changes that we need to make because they may not it's a good question I will tell you and as you can tell from my last answer I'm very sacramento centric in my thinking these days functionally I like to go where things are getting done and where there's a willingness by people to listen in an exchange of ideas however difficult or intransigent their positions may be that they're ultimately focused on problem solving and constructiveness rather than deconstruction so most of what I am concerned with in DC these days is playing defense on things like the endangerment finding and the antiquities act and the attack on efficiency standards etc. I don't like defense I think the best defense is a good offense and the best offense today is sacramento and what we've seen under the leadership of Kevin de Leon the president of the senate is incredible insight foresight and the capacity to galvanize you know the republican head of the caucus Chad May lost his job over creating a bipartisan agreement for cap and trade so along the lines of the massive amount of money that is inevitably going through that system senator Henry Stern has moved to set up a california r&d facility modeled on arpae california can't do it all and there's a really good argument that it shouldn't but it is a beacon for better ideas that are being integrated on a nonpartisan basis I would argue now I'm sure there's many in the republican party that say it's completely partisan we just want there to be nothing going on but if you actually want something to go on there's a conversation to be had in DC the thing that gives me the greatest confidence about r&d is that there is a remainder of the legislative craftsmen whether they're democrats or republicans that people would call the establishment which I guess means experienced and wise there's a remainder of them sufficient to enhance and protect our national laboratories and ultimately the budgets even as those less informed about the value of correlating that r&d are trying to erode them the good thing is the management is so abysmal in the executive branch that they don't actually know where all the switches and buttons are and so it feels like those in the know will probably outlast them I wonder if you have any quick thoughts on economic aid that can be provided to the people of Puerto Rico or other equivalent areas that are suffering from a destruction of their infrastructure and the like I keep thinking distributed generation and LED water purification but how does something like that get put out? what is the most resilient, intelligent, affordable, accessible, clean source of energy that could be durable if you put a speck around it does it exist yes how do we get it there we've got the problem getting it to East Palo Alto because of a landlord agency problem when we're totally geared to credit markets and single family Caucasian homeowners and affluent suburbs in America so it's the same sort of impediment of a distribution problem in the maturity of the system you know in oil there are a whole company set up a Greco worldwide is set up for nothing but helping for immediate distributed energy power solutions at the mind mouth or in a crisis or in a blackout so who's there first the guys who have institutionally stood themselves up now there are lots of these companies that have been innovative over time particularly for the Department of Defense and others to containerize boxed quick deployment in fact Depender Sluja from Skoll actually has a brilliant company like this that works on a hybridized basis and quickly deploys it was meant for telecom in India etc but what are the mechanisms for these new emergent companies being galvanized through US agencies in a coherent systematic way for what the new grid should be what they're going to end up doing which will be unfortunate if they follow the law and the law being the Stafford Act which basically says you can only build back to the specification it was before so let's take all the tax money we have and design for 1954 with rickety wooden poles because that's what we're legally bound to do I mean really dumb stuff so so first thing is to pull back the Stafford Act in the way that we pull back the Jones Act and say blue sky what should happen here and the reality is there should be a grid in San Juan and distributed microgrids everywhere else erected as fast as possible with the cleanest possible spec at the lowest possible price that market actors can bring to bear and so President Clinton has been convening on this David Crane the former CEO of NRG Richard Branson I've met with lots of people to discuss this very question and we know exactly what the design should be the question is what is the legal impediments to supporting that design the opportunity to go forward meanwhile while we sit and argue we have American citizens without water and energy it's absolutely dumb founding Andy good morning and thank you for the heartening reminder of our state's leadership if we look back at fuel efficiency for vehicles renewable portfolio standards for generation of electricity in our state a question if we look at a carbon calculator for a first world human being aviation is maybe a third bucket there what's the probability that the state of California can create a market for human passenger aviation aircraft and radically drive the efficiency down for those as well that's a great question and the answer is completely tied and correlated to what class what weight what application of that aircraft I mean I was just as weak looking at the race to flying taxis if you want so how do we take a drone and size it into an SUV and carry five to seven passengers and have them right of way over the highways with electric recharging and autonomous flight patterns right is that fanciful count on it you'll see it in the next five years and was that a far gone conclusion we used to have helicopter delivery from SFO to downtown but we had a decibel problem we can crack the decibel problem we can crack the efficiency problem we can crack the fuel problem but only in a certain size class so now if you've got a new size class of flight what does that mean to mid flight to beach craft and all the other sort of mid operators and unfortunately the larger problem that you're probably talking about which is Boeing and Airbus and transcontinental aircraft is the most difficult most intractable and in all probability the last one to solve so it's also the one that behooves us to invest the most in material science and engineering and of course the gains there have been enormous as we now have transcontinental aircraft with a further reach than a 747 flying on two engines and the efficiency in those planes are incredible but the things that I see in material science a day when we can easily project airplanes having no windows and gaining 10% efficiency because you can touch the wall of it and see precisely what you want from any view outside up down whatever with ocular indifference that is your eye could not detect whether it were a window or whether it's a wall because of the precision in granularity and the evaporation of pixelation we're so far beyond that so the question is time and cost in the efficiency to make those things a fuel as possible my prediction is that they'll be the last to get off of fuels as the most intractable problem and I don't have a great solution I mean we saw the green hornet flying around and lots of biofuels sort of solutions but for my bet it's as much material science as you can put into the big ones and to electrify the small ones and have a lot more localized fleet movement thank you guys good luck today thank you