 So this is going to be informal and off on the on the fly so to speak I'm a moderator and It's a great privilege for me to be serving in this role a room a jumbar was supposed to be that moderator But he has been called away on something else. So I'm a last-minute fill-in I Want to start by asking both of you to make some opening remarks, but let me preface it with some of my own experiences for two minutes and that is When I first joined the government in January 2009 the price of oil is very low We had just going through It entered into a deep recession not in the United States worldwide and the price of oil in Today's dollars might have been $30 about some plunged very low and then it slowly climbed back and for the four and a half years I was there. I was often accused of single-handedly making the price of oil go up to a hundred hundred ten dollars a barrel Now because of you because of me now I have to tell you that part of the office of Secretary of Energy are these dials underneath the desk and every morning I set the dials But at a hundred dollars a barrel things changed mildly then Most recently in the last year and a half or so year the price plunged Now when I was in this hundred dollar barrel time when the price of oil went up the stock market went down Because it was considered a strain for high cost of oil and it affected world politics in a very deep way And now that the price of oil went to nearly 30, but let's say 40 45 dollars a barrel When the price of oil goes down the stocks go down the exact opposite Then when the price of oil went up the stocks went down Okay, so because it's now deemed too low Certainly by the oil and gas industry But also by a number of countries on This is also set something much larger longer time scale oil and gas prices have always been cyclic But there's something else coming along that's not really going to be cyclic and that's the risks we face for carbon pollution and climate change and The most recent news over the last five years is unfortunately been somewhat bad news. I emphasize risks We don't know exactly what's going to happen but But the deepening understanding Looks like averaged over the world or of course be some places which can benefit but average over the world It's either bad very bad or catastrophic. Those are kind of the choices One is landing on in terms of the risks, but we don't know where it's going to happen So so there's this long-term issue many long-term issues Energy is intimately tied with the world economy as well It's in really tied with developing countries getting access to energy all these very complicated things Where you want developing countries to have access to energy, but you want it to be clean and you want it to be inexpensive So with that backdrop, let me ask both of you to just comment briefly at opening remarks We'll have a little bit of Discussion, but I really want to turn it mostly at the last 25 minutes or so to two questions from you and so you can ask These two great men Their views now I have to say I've been a long admirer of both of these fellows so much so That I have ducked my usual tennis shirt and sneakers and got dressed up just for this occasion So All right, though, why don't you start and then followed by George No, the feather shoe has talked about the Variation of price of oil it has profound effects on many different aspects In your national scene I have focused mainly on its effect on national security because this is the thing that I work in the It's a it's a complex issue One of the things we have noted is that in the period when price was a hundred hundred dollars a bill or even higher Russia Was who was a major oil producer and a natural gas producer Russia was had a booming economy and Unfortunately from my point of view you use that booming economy to do some things which we thought were not in our national security interest for example They have their point Substantial resources into completely rebuilding the military system including a whole new Family of nuclear weapons so this is concerned to some they're also you Using the money. I thought To conduct some mischief in the international arena So High price of oil aside from its economic impact for example in the United States and the United States companies Does have a role in national security The biggest issue that we saw From the high price of oil in Europe Was that we saw an increasing dependence on? Russia and therefore Concerns that the European countries would lose some of their Independence because they'd be dependent on Russia for supply and mostly natural gas not a royal and At very very high prices So we see Many many aspects I didn't expect Secretary Schultz to talk about the economic aspects of the high price of oil But there are national security aspects as well and that I'm going to pivot over to George doing What Steve to said Illustrates both the promise and the problem that we face today as I see it The promise comes from his sponsorship of Arpae Arpae Was the promoter of the greatest effort at scientific and engineering advance In energy we've ever had It was also taking place in other countries, too And it's interesting because when government money is serious about some subject That tends to attract private money So in the case of Stanford, I believe and I know at MIT where I Serve as chairman of the advisory committee on their energy initiative The private money is about three to one to the public money, but it wouldn't be there. We're not for the public money and During this period there has been gigantic progress in Solar energy and wind energy Batteries I saw in the paper this morning that Chevy's new bolt Car will get 238 miles electric car 238 miles for a charge When that happens The electric car has arrived All this has really been spurred by this research The problem is also illustrated by what Steve said about the varying price of oil. I Was secretary of the Treasury When we had the first Arab oil boycott in 1973 We had sort of predicted in a report I made to the president, which I might say we had some obvious Recommendations President Eisenhower thought that if we imported more than 20% of the oil we use we're asking for trouble in national security terms So we're kind of bumping up against that so my little group studied that and We said the problem isn't Military problem. The problem is the turmoil in the Middle East and we might lose that oil and We made a number of recommendations among them that we ought to have an energy department or somebody paying attention to this subject because it's a strategic subject and Some it's storage reserve and so on all of these things seem pretty obvious to To us the president patted me on the head said nice report. It was published. There were congressional hearings. Nothing was done So 1973 I'm secretary of the Treasury here comes the Arab boycott more or less what we predicted and Then people put the recommendations we made into effect We didn't create the Department of Energy, but in a sense I was your predecessor because People would come into me With these ideas they had it sounded interesting and I started support them But when the price of oil went down All interest in this R&D went away Then when we had the Iranian Revolution the price of oil went back up again and people started getting interested price fall goes down goes away Now with Steve's intervention we had the long period of high oil and gas prices And those prices produced RPE in sense in a sense they led people to look for alternatives And now the price of oil has gone down again, and I think one of our big Issues in public policy is to be sure that the funding for energy R&D stays there this time and we have much better arguments than we've ever had before because We can point to the experience with it. We've had Six years or so of really major effort and we say look what's happened. This has paid off So it might as well continue it and We can have that battle. We had an interesting little exercise here a few years ago We brought 12 MIT scientists to Stanford. We had a similar number from Stanford. We talked about game changers then we had a Return engagement at MIT then we took our act to Washington And I managed to get the then-speaker of the house John Boehner to set us up with the Republicans on the House Energy Committee These are the bad guys, right? Well, I took a little delegation It was a piece of cake to sell them energy R&D. No problem However the minute somebody said hey, we got a good idea. Let's have the government sponsor this company and you lose everybody So it's a big lesson here stick to R&D. Keep the government out of loans and anything that has to do with Making let private enterprise do that and I think you'll get the energy R&D But this is a big issue for us right now politically I think Ernie Moniz the President Secretary of Energy is doing everything he can to get this baked in the cake And I think that's a very good thing Okay, thank you. I want to ask a question to follow questions, but For those of you don't know it's been mentioned about this ARPA E So that stands for Advanced Research Projects Agency for Energy. It was model after DARPA Rumen Majunder who should have been leading this discussion was the first director of ARPA E I had met him when I was at Lawrence Berkeley National Laboratory when it's director I was very impressed with him and Promoted him to a division director status while I was there and then when I got to Washington I worked on him to come to DC. So and it has Had a very good track record for the first term We I hope it remains very strong as an instrument for research and development and I would agree generally with Secretary Schultz that saying that The main business of government Department of Energy, especially is to fund research and development that can then be picked up by the private sector but Going to these issues of what we do in these low oil prices. I want to quote shake Yamani he was Former Saudi oil minister and he said something to the effect of the Stone Age did not come to an end For lack of stones and the oil age will not come to an end for lack of oil Now I have to say this. That's not why he's the former Saudi oil minister The point he was trying to make is when you transition from stone age to a metal age you go to better solutions and After that transition, we don't look around with very sad faces that all the stones on the ground said stranded assets Okay, so what about oil and gas People will look With very sad faces stranded assets if we don't find better solutions, which means economically better solutions as well even if you fold in The cost of carbon the social cost of carbon, let's say make a number $80 a ton Oil and gas still will be the low cost thing for a lot of things like long-distance transportation We don't have solutions yet and By the way, that's why you Students at Stanford have to come up with these solutions But let's let's go back to that oil and gas exploration Recovery is getting better and better it too is Technically a more advanced and it's able to bring out of the ground oil and natural gas at lower and lower costs And even though our finite our resources are finite. They're better at finding it better extracting it Renewable energy is coming down by a lot electricity Natural gas is cheapest followed by wind and then solar and and So but that's only true at 10 or 20 percent natural wind and solar and When you go to 50 60 percent renewables then the cost of the standby the cost of the trans energy stores to stand by energy on demand sources and battery P-clo shifting and day-night shifting is also part of the cost of renewables So so the good news is renewables is getting very inexpensive But it has to can still continue to to race along for the next couple of decades and so If let me turn to both of you and ask first you George and then bill What what should the United States do in order to keep This intensity going so as you say baked into the system to get up those innovations so we get lower cost alternatives for clean energy and To really make sure we keep our on this ball over the next 50 years 80 years Where we will really have to make a transition. So let me start with Secretary Schultz. I didn't follow by Secretary I think to a certain extent it's about politics So let me give another example in the mid 1980s There were a lot of very good scientists who thought the ozone layer was depleting There were some perfectly respectable people who doubted it They all agreed However, that it happened it would be a catastrophe so That I became involved in that we had a very interesting EPA Director in a group in the State Department. I was Secretary of State at the time who who took this up and I talked about it with President Reagan at length and He decided That we should try to do something about it. So we did something that nobody ever does today in politics Put his arm around the people who disagreed And he said we respect you But you do agree that if it happens It's a catastrophe So what if we take out an insurance policy? Insurance policy is a good concept you take out an insurance policy in your house Not because you expected to burn down, but just in case So that was sold It didn't get the doubters to come with us, but it got them off our back And just as the RPE has helped to stimulate things privately When it became clear that the government's going to do something about this it generated the creative juices in the private Sector and the DuPont company came up with something that you could do That would change the situation not what you aspire to by 2050, but what you do today So we got that getting done all around and It wound up when something called the Montreal Protocol and It worked in retrospect, I Think there would be general agreement that the scientists who were worried were right and The Montreal Protocol came along just in time Now what's the lesson? The lesson is to work with people try to get a common approach to problems Our politics has gone off the rails now If somebody doesn't agree with you you try to vilify them eliminate them make called dumb and So on so you just fight forever nothing ever gets settled I think we've got to get back to the politics of finding common ground and That common ground ought easily to be among other things Continued support the amount of support from the out of the federal budget for energy R&D. You lose it in the rounding here It's not that big But it makes a huge difference And if this R&D effort can continue as it has in the last five years or another five or ten years The energy picture will be revolutionized. I have no doubt about it storage batteries are Becoming more important better I mean, how can you have an electric car go 238 miles? That's a big deal. It takes the rain anxiety out of the picture So that can that'll have a big impact. I Might say I also learned from the very experiences I had That when you're approaching energy policy, you've got to keep in your mind. Oh, it's three things It affects on the economy because energy is the vital to the economy second Impact on national security as bill said and third affects on the environment All three are in play all the time. You have to work at them Constantly now, let me give you an example of something That is good for the environment good for the economy and good for defense security. I Think Steve would know better than I about this, but my impression is that we are increasingly able to store Electricity at scale Batteries small scale, but batteries are getting able to handle larger and larger amounts Think of what that means It means you take the interbitency problem away from solar and wind energy Because you can go into a battery and then be dispersed as you need it It means that everything is going to be cheaper. So it's good for the economy and From a defense standpoint just an example. Our grid is very vulnerable to cyber attack It can get knocked out But if you have some large-scale storage You can knock out the grid, but you keep going until you get things restored So it has a major security element No doubt if you're on a ship You're in an aircraft carrier if you have large-scale storage of energy That's inexpensive. That's a big deal So there are all kinds of things where there's a positive interaction But you got to keep the three things in mind all the time bill. Thank you bill All of the R&D programs to make a big difference in the energy field are by almost by definition Long-term program for five ten years People who are working here at Stanford are working on long-term programs like that The people who are supporting those programs at DARPA and at ARPA-E Understand that and they have conceived long-term programs and they fund long-term programs. So that's the good news The bad news is the funding to do this Allocated long term it's allocated a year at a time The people in ARPA-E and DARPA plans for five years they have five ten-year programs But the funding trickles in a year at a time That's as appropriated by the Congress and So there's a disconnect between the need for long-term Programs and the funding ability to get funding for long-term programs the No matter how diligent and no matter how visionary DARPA is no matter how visionary ARPA-E is or the Secretary of Energy the Secretary of Defense is They have to get the appropriations year by year through the Congress Congress isn't noted for its long-term thinking and And So how do you deal with that disconnect and there has to be some leadership from the top sure When you as Secretary of Defense say we need a new aircraft carrier But how long does it take to build an aircraft carrier? If ten years if you're lucky, okay, so they have to get you gotta get a ten-year commitment Why can't we turn energy r&d into an aircraft carrier? You've done it with a carry out to be able to do it with energy if you could package your r&d programs in such a way that they funded five six seven years at a time That would go a long way to it the way they do with a an aircraft that would go So it's theoretically possible in fact it's never been done that I'm aware of but If you cannot do that then you really count on leadership from the top So it matters a lot When you go to vote this November who use both of president who you vote for president set senator who you vote for Congress From your district the problem is there and guiding on that you won't find much a very Illumination in the discussions in the debates political debates If you listen at the presidential political bait you will not hear much discussion about the importance of r&d and long-term funding So you have to make some kind of a judgment on that But what I'm saying is it's a system is set up the funding system is set up Where the cards are stacked against long-term programs? And so you have to find some force to sort of counteract that negative Issue and the force has to come from leadership from your from the president from the Senators from the congressman of course from the cabinet officers to but then the cabinet officers are selected by the president Although I must say I don't think they're ever selected on the basis of the dedication of long-term funding But that's that's the issue its leadership makes a You cannot there's no substitute for leadership who understands this problem And is willing to go to bat when we go to Congress and fight for the r&d and fight for the long-term funding George you wanted to make a quick comment. Well, I want to suggest a Long-term I want to suggest an aircraft carrier. It's called a revenue-neutral carbon tax You get that into effect I've been advocating this for quite a while But the even the Wall Street Journal this morning had a long section and it had maybe the carbon tax is about to arrive You make it revenue neutral so the revenues from the tax get passed back to individuals in my Thing so it'll be popular every once in a while you get your carbon dividend and It also can be deal with the International free rider problem people often say gee if we do something and they don't do anything anywhere else Not going to do much good for the global warming issue But if you have a carbon tax you can say we're going to apply that tax to any import There's carrying carbon and It goes into the pot that gets distributed and people might in the other country will say Oh, how do I get that money? We say it's simple put in a carbon tax yourself So there's a concept here that maybe have some global implications And if it gets into effect and you pass the results out to individuals, it'll have some political staying power So it's a potential aircraft carrier. I think that's it A perfect solution to the problem we're talking about But it was a perfect solution three years ago and five years ago and seven years ago Also, and for some reason we seemed can't seem to get it off the ground So a question I would ask either to Georgia Steve's what can we do to get some impetus? Some political impetus behind getting a carbon tax really established well, let me This is where The R&D that you people are interested in I assume comes into play Because people say well if you put a tax on it What am I gonna do and The R&D produces the answers of what you're gonna do So there's a synergy here. Yeah, I would go further in same fact. That was it was beautiful segue into my next points of discussion Because even if the government pays for research and development you want Entrepreneurs or companies large companies small companies star companies to pick up those discoveries tournament innovation means that you take a discovery and turn it to something that gets actually out there and Energy in the outsates in most the world is is It's a private enterprise of sorts and so What would induce companies to pick something up, which is the nascent technology where you are in risks and so I would say that a Carbon tax actually creates market demand if you let's say no that over the period of 20 years The price of carbon goes from five or ten dollars to I'll use a number that the CEO of Exxon mobile has been bending about 40 80 dollars a ton of carbon dioxide I became convinced when I was secretary that that alone over this 15 or 20 year period would get the interest of Industry it will give them certainty so they could start planning and it would create a market without artificially Subsidizing this and that then industry says. Oh, this is where we're going. We're gonna have to plan ahead all the Need inventions that come out of universities and RPE companies will then have a market So so I always thought that Having this light touch of an overall guidance would be Very much better and you can get rid of a lot of little regulatory stuff now to answer your question bill What is different? When the last couple of years Rex Tillerson Exxon mobile has come out Total and in fact all the European oil companies have come out very much and said we want Price certainty the carbon trading scheme in Europe that was instituted didn't do the right thing It was too volatile and the price went so low that it didn't induce anybody to change anything it's not about six euros a ton of carbon dioxide and You won't get people to start making investments unless they know where the price will be 10 20 30 years from today so so I think that's something that is growing The same Wall Street Journal page where the articles advocated carbon tax and say might happen. There was a rebuttal article that said Congress right now is not in the mood for a carbon tax But I always thought and maybe I want you both of you to respond to this if you get more and more of the Significant companies in the United States, especially the oil and gas companies to say this is what we want Then it gets it out of the political realm. We can get Republicans and Democrats to say you know and you get rid of a lot of the little cross things and little complicated regulations and By the way make it revenue neutral So so it doesn't go into because they're at least temporarily maybe for a long time There's a mistrust that perhaps the government can't spend the money and more wisely than the private sector So I want you to comment on those things, you know, what what what use I think I think it's it's it's rising whether it's gonna happen this year or five years from now it's not gonna happen this year but five years from now or ten years from now and Would you mention about the border? I? Had a discussion with the financial people when I was secretary and I said we should do this and we can make Board adjustments because once you determine the price of carbon it becomes easy and I was met with oh WTO agreements they wouldn't go for it said we make border tariff adjustments all the time so maybe you can help with your Economic friends to cut try convince people that this is Really within the realm of possibility? Just so I throw that on part of little group that's gradually forming itself and Trying to raise money But we expect some time early next year To make a big pitch for what we're calling the conservative case for a carbon tax And the conservative case says you don't like all these regulations and subsidies fine Put a price out there and let the market sort it out and that's very appealing to a lot of people and To businesses too because they know what the price is And a lot of them as you say are beginning to realize there's going to be a price of carbon so if we make our Investment decisions we're going to make that assumption on our decisions and That will lead us to certain kinds of conclusions So I think the case is strong and I'll continue to make it bill and may and you know over time People didn't believe in airplanes for a while, but gradually they came along As I say, this is a this is a an aircraft carrier. I think the Biggest single factor which could help actually make the carbon tax reality Would be strong and vocal support from the oil and gas industry So you say that's starting develop I think that's that's the way to push push to get that to happen if it happens full scale I think that will reduce quite a few of the arguments against the carbon tax So I that is an encouragement as an encouraging trend I think There's another the sort of an aircraft carrier possibility here, too That works in the Defense Department doesn't seem to work anywhere else that when the Defense Department gives contracts somebody to build an aircraft carrier They allow that defense contractor to spend a certain percentage of his overhead on R&D. It's called independent R&D and That turned out to be a large amount of money and almost all of the companies I know I've spent nearly all that they're entitled to spend it's a long term. They can count on it for a long term to come So that gives a solid long-term R&D base for one aspect of the industry Naming the defense industry for doing that, but there's nothing like that as far as I know in any other Department in government has the energy department ever considered anything like that for their well we The national labs have a budget and they they are allowed to tax themselves and in that tax it can be anywhere from a couple percent all the way I think it's limited to five or six percent and the laboratory director with with consultation with the leadership of national laboratories can decide We're gonna put something in that we believe could be breakthrough. It's seed money. It could be a big deal and This so-called LDRD laboratory directed research thing. It's been Some of the best science I have to say this come out of the national labs actually started with LDRD money and It's something that the labs themselves are able to tax themselves because they think it's so valuable I think the idea of Well in in the wholesale energy market things like that. I think it's the margins are razor-thin and And so I it's like supermarkets Supermarkets are not gonna pay for R&D They buy food from somebody they sell to somebody and And it's razor-thin margins, but I think as you go more into research and development That's something we should think about Georgia you can see I want to point out to a different category of persuasive material that is coming up the Climate is changing and getting warmer. I observe But for something to be really believed Something that hits you Yourself is important. So you want to get Lucy Shapiro to come here and talk She is a biologist She says Zika is the tip of the iceberg As the globe warms Tropical diseases come north And we're not ready for them We need to get ready But when you see the connectivity of a disease that might affect you With what's happening Then you're much more inclined to say well, what can we do about what's happening? so unfortunately unfortunate events like this are gonna happen and When things happen that affect individual people It's not an abstract scientific argument. It's something that's you see yourself and so You want to say what we should be doing something about this And it is it just turned out that the world health authorities and health stories in countries each country and in many countries both concerned about changing climates because they deal with those On a non-political basis of how do you deal with rising stresses and rising potential emergencies like Zika Zika? by the way, I Don't want to alarm you, but you might think well, okay if let's say The three of us here might not be concerned about getting Zika virus because we're you know, not really planning and starting families There could be others who are younger who might not but it actually those people actually are carriers Because most of the time do you have very virtually no symptoms? So Maski will bite you who let's say you're not playing starting a family. They bite someone else You move around and you're the carrier. You're the typhoid Mary So it's very different. So it it's not just People in child-bearing age people are thinking of starting families are trying to start families are the ones that worry They have to be worried about everyone else who could be a carrier a silent carrier because you might have a Virtually no fever no nothing and you're traveling around and you won't and you don't want to put on a mosquito repellent So that is so this is the tip of the iceberg not to alarm any of you, but Let me as promise throw the floor open to Questions from unless you fellas want to make any more comments I want to throw the floor open to questions and Just you know, say your name and What what your question is the question is the audience is allowed to I'm supposed to repeat the question Remind me of a funny scene in the The television show taxi But I'm I can tell you the joke Yes Okay, so the question is what do you see as inter agency cooperation between energy defense state Many other agencies home and security you name it Let me throw it open to both of you the inter agency Interagency cooperation, so how does state work with energy or with the military in forwarding the goals we're talking about for example making clean energy less and less expensive More accessible to not only United States, but to worldwide Well, I think of the Montreal protocol example that I mentioned earlier the State Department led negotiations But we have a science group in the department that worked very closely with the EPA and So we had their input and then we had to get support from around the government and we had A lot of people some objectors. I had a very skillful guy. It was a assistant secretary. His name was John Negra potty And later went on to do bigger things all over that was pretty big But I knew what President Reagan's view was so if we had an interagency problem I said let's refer it to the White House And I knew the answer would come from the White House So we got it done Bill or it goes back to what bills had a lot depends on the top and we had During the first energy crisis in the late 70s. I was the undersecretary defense at that time for research and engineering and My colleague John Dorch was under sector of energy He wanted to promote solar energy. This is back in the late 70s and Solar energy was just a gleam in people's eyes then he wanted to promote solar energy So we agreed that the set of whole new field of silos We were building that we'd build solar arrays to power them We couldn't justify that from a cost point of view We justify from the point of view that advanced the technology of solar energy for the greater good of the whole country Also the Department of Energy in those days Started invest in synthetic fuels It could have been done by the Department of Energy Just been created and then that went to the budgets. So yes, you can do things across across budget like it if the secretaries are Willing to be a little broad minded about what they're trying to promote So we could see that the advancing of our energy futures in this country Was the long term was these are all of the defense department. So we did those things and in my day this continued with especially with EPA defense and state the government US government's biggest consumer of energy by far of the sections is the Defense Department and Their purchasing power actually can create markets and do things that That they were well aware of and wanted to nudge and create market draw So state worked a lot with then secretary Clinton in trying to get policies to to help promote energy access to energy clean energy And drive down costs. So so this actually was continuing and deepening one of the one of the things I should say is that the secretaries and the Deputy Secretary's assistant secretary's all were in favor of this But they have to show leadership because there is a tendency of each agency as you go further down to want to own it And and go like this. And so that's something that really stay pressure from the top to say you Continue to work together Steve of how is important to the defense department Doing the war in Iraq. We had forward operating bases very far away from sources of supply and They all used electricity So they were getting the electricity from diesel generators. So you had to transport the diesel fuel to them Now whatever the cost of diesel fuel was at the port by the time you got out that forward operating base It's almost impossible to measure the cost because if you lost one out of three Tankers on there you had you lost all that fuel you had people kill you lost a truck So the cost people very few tried to estimate the cost of oil out of forward operating base There's hundreds of dollars a bill Many hundreds of dollars a bill back So it was very important for the defense to have alternative sources of electricity So the solar rays which we were in a modest way supported way back in the 1970s Now become very very important. So solar rays being used at the forward operating base or by Soldiers out on patrols made a huge difference in the operation then so the reason then for this trans department cross department support and funding Can be enlightened self-interest really every year there comes to Stanford a group of people we call national security fellows each armed forces one army neighbor Marine Corps Coast Guard and We're discussing issues of Alternative forms of energy one day and guy sitting at the table said it was a Navy guy He said I'm a naval labor Navy aviator. I've flown lots of missions in Afghanistan Every pilot knows you can go down If I go down and he carries it with him pulls this thing out. He says I turn this on My friends know where I am The only problem is that only last 24 hours It pulls another device out. It's a little solar panel thing is I use this to recharge Very simple life-saving I'm a Marine Marines have a thing you put on. It's a big flap in back. It's a solar panel So you've got a lot of equipment. You don't like to carry excess Batteries and so on you can recharge things with that solar panel. So the military are seeing lots of things that are practical and Have an individual impact like that Hey Another questions. Let's see. Let's see first you then you So the question was as developed countries put a more renewable resources what to developing countries whose revenue is strings are coming from Traditional sources of energy what's going to be their economic impact is that okay? Anyone want to take a George want to take a first stab at that Well, you're heavily dependent on all revenues. There's Saudi Arabia and Russia It's a problem As far as I can see and just reading about it Saudi Arabia is seeing this problem They're trying to sell some of Saudi or Amco and they're trying to change their culture and Get some university work there and equip their population to do other things and They make some progress. I used to be in a company called Bechtel. We built a Community there called your bail and It's designed to be a kind of an industrial park and do different things So that you have to face up to the fact that if the main thing you're relying on Goes away or it goes away to a very considerable extent. You better get something else and get going on. I would say that Venezuela is another good example large fraction of the government revenues comes from oil and It it's it it's going to very very hard times Possibly failed nation status Meanwhile, Russia and Saudi Arabia are dipping deeply into cash reserves that they've had They're nowhere close to balancing any budgets and so but it's also I should say Impacts develop countries as well the United States produces. We're either the second or third largest oil producer in the world Even though we still import oil we are we I think we might have passed Russia up until very recently because of the hydraulic fracturing horizontal drilling logical solution of that problem for the country and It's take the times when they have when oil prices are high take the time when they have large supplies of oil and take the Revenues from that the profits from that and invested in diversified industries That's what Saudi Arabia is trying to do right now. There's a huge inertia against doing that though Russia announced many years ago They were going to do that was when the oil was a hundred dollars a barrel There's a wonderful plan, but they didn't do it in fact and so today when the oil is down Whatever it's 30 or 40 dollars a barrel. They're in a bad position their economy has suffered Substantially in the last two years is lower price because they did not use the resources diversified when they had you It's even grand idea, but it comes ever. It's even worse than that because Many developing countries will subsidize the cost of energy kerosene gasoline diesel and If they subsidize it comes out of taxpayer money and so they can't spend that on other things You know healthcare education you name it and when the price of oil plunged many many people in Including those in developing countries said now's our time to shrink the subsidy because when the price was high they couldn't trick the subsidy they'd be unelected immediately and Very few countries had the courage to shrink the subsidy and they're trying to do this, but it's it's it's to go issue, right? because There's a second golden rule in politics and that is to get reelected There's three golden rules. There's Well, okay, and then there's another question over there somewhere. Oh Maybe we can do a question. There was a question. There was a question. Yes somewhere. Yes, okay So I'll try it somewhere very briefly R&D not say it's very important But it needs to be made accessible to countries around the world so that other countries can have access to this and benefit from this and And so the question is is how do we do this? Well, let me start by saying, you know, they're always national security in energy, but it works the other way too and unstable world is Also goes to, you know, if Venezuela becomes a failed nation-state, this is a national security problem So so there are many many Instances where it might actually go in the opposite direction that you want developing countries To be prosperous. You want them to be economically stable Or develop countries to remain stable because it's it's all part of that the question about Making it available. How do you how do you transform it? I I'm gonna I'm gonna turn it over to these two But before you a very quick comment, you know Part of the R&D and part of the business incentive is to try to make some profit And but the question is then how do you also use that to help other countries? And so First you build then George on on you want to have incentive You also want to make the available to other countries. How do you do this? Yeah, I think from a policy point of view. It's desirable. I don't think there's an inhibition to doing it from a policy point of view Making it happen is a lot more difficult. Tech and technology transfer is difficult. Hard to make it actually happen We have One benefit though that comes out of it to the extent that we are successful for example when lowering the cost of solar power Other countries will benefit benefit that almost automatically But the actual tech tell technology transfer needs to be promoted with a lot of energy and a lot of vigor It's not easy to easy to do but and I agree with the premise of the question It's quite desirable to do it Of course the greatest promoter is the marketplace If I'm a company and I'm making Good money from selling something and I see there's a market that markets all over the world Then I go and do it in those markets But here's an example close to home You're standing in for a run my gender today. You said the State Department has a program of Scientific ambassadors I guess should colon So a run is one of those so he goes to Poland and his job is to Get to know people in the scientific community in Poland and Talk with them about their skills and identify who's good and In a way develop the possibility that a Polish scientist might come here and some US scientists might go there and you kind of promote The emergence of more work together in this area. It's a very interesting concept But then another we were talking about Russia earlier Sometime ago a man named Medvedev was president of Russia and he came here He came to the Bay Area Explicitly because he wanted to find out about Stanford and the Silicon Valley and what goes on and he came My wife is chief of protocol for San Francisco in California, so we went to meet him Governor was Arnold Schwarzenegger And Arnold had his own airplane, but he didn't realize that when a head of government comes the airspace is closed So we're meeting the president of Russia and Arnold is circulating up there But anyway, we gave a dinner for him in a place in San Francisco and the Silicon Valley heads of people were all there the next day Medvedev went to Twitter and Our then mayor Gavin Newsom who is always likes to put on any kind of informal Look went with a coat and a tie Medvedev showed up with an open collar and a pair of jeans So he was trying to act like he's in Silicon Valley Then he came down to Stanford and We had a meeting with Ann Arben who manages research at Stanford and he was asking all kinds of questions like Where does a Stanford researcher get money? Well, some of it comes from government NIH grants or wherever Well, how does that to get decided that he gets it? Well, there's a peer review panel Well after the peer review then who decides, you know, he thought Some government top guy would all decide well the peer review decides. Hmm. That's interesting. There's something Well, then suppose somebody gets a good idea and it turns out to be commercially worthwhile How does the person who got the idea? Participate well at such a thing as a patent and There's a certain ownership here and so there's a way it was interesting to see him trying to think through the process Thinking of it in terms of Stanford and then trying to get to know people here He had an interesting we had an interesting aspect. He gave a talk in Dinkinsville big auditorium and It was the audience was just whoever came but place was jammed And there was a question period And he got some pretty searching questions and he didn't get mad or huffy. He answered them So I admired that then His motorcade left from there to go to the airport So we got our car into the motorcade because my wife's chief of protocol duties But we were back in the motorcade and the motorcade pulls up to his plane. It's pretty high Stairs going up to his plane by the time we got We were back in the motorcade by the time we got up to the stairs in his wife were already in the plane Somebody must have told him we were down there because all of a sudden he and his wife reappeared. They came all the way down the steps and They thanked us for our hospitality and Then they said if you come to Moscow, we want to give you a dinner like you gave us My wife is always a little extra twist. We had given them California caviar in California vodka She said I'll come if I get Russian caviar and Russian vodka deal But it was an interesting thing that in coming to the United States he explicitly came here because he wanted to try to get an understanding of what goes on between Researchers at Stanford and Silicon Valley and business and so on Some Russians are thinking about it and I think you have to say in history bill the Russians have a very impressive history of Creativity in their science and engineering group very impressive Well, I can personally vouch for Russian caviar and vodka But maybe I can get Charlotte to introduce me to California caviar But we only have one minute or zero minutes, but I just want to add a little bit to this it right now Let's say wind and solar are and also matters, but let's say wind and solar Countries are introducing it in a novel way. It's novel From ten years ago. It's called a reverse auction And that is let's say Peru or Morocco or Mexico or Abu Dhabi want a Solar farm or wind farm they will ask developers to say you come in Here's not gonna be a subsidy you bid you'll get a guaranteed market You will send a 20-year contract will pay the bill because people need electricity. What do you bid for? and so in the last three or four years these bids for Developers to come in and erect a solar farm a wind farm have been going lower and lower They dropped by half in Solars. It's now four to three cents a kilowatt hour Used to be by in 2010 or 12 it used to be double that Wind is now coming in at three cents a kilowatt hour now who are bidding for these things? They're actually consortiums of groups of people. They're not just finance people For example Siemens was part of the bid for the wind turbine one farm in Morocco and they're a big Innovative wind turbine so they put together so it's a partnership of people in Developed countries who actually want to go in and they said we will do this and we'll take 6% 8% Profit per year that's good enough for us and So this way technology actually gets in into developed countries in a very natural way And so I'm a big fan of reverse auctions because you can actually find out what the cost of solar and wind is Without subsidy because these countries are not giving them free subsidies are not giving free land They're not giving you anything. They're just saying, you know, we'll give you a place We'll guarantee you you can cite a place. We'll charge you for land use But other than that we just want to buy your electricity you you build it you operate We'll buy electricity from you and so it's it's really a very very good way of lowering the cost of energy and also getting the Innovations that coming largely from developed countries into developing countries the developed countries see a huge market in Developing countries that's where the action is going to be because that's where the revenues are going to be spent and new infrastructure I'd like you're coming to an end here. So let me give a little personal example I have a home on the Stanford campus about it for 41 years About six years ago. I put solar panels on the home I've long since paid for the cost of the panels by what I've saved on my electricity bill. I Drive an electric car around here The amount of electricity I use in the car is less than what is produced by the solar panels So I'm driving on sunshine What's the cost of my fuel? Nothing What's not to like? Okay, so we're gonna wrap up, you know there I did on that. Thank you very much