you can easily check it out by just tracking prices. but the truth is, we do@@@@::::d 17.7 million barrels a day of oil here in the united states. it is an international market, not just for the crew, but the products. the rest of us -- get a lot from europe because europeans use a lot of these also their refineries can afford the

transport cost and they can give us the gasoline that they don't need and use. that primarily comes into the northeast. nine times out of 10, when you are looking at price movements -- and i track this. we look at this every single day. you can plot it on a graph. we have it on charts. i would love to share it. you can see that it is the price of crude that is moving it and it goes really in lockstep -- crude goes up 20 cents, gasoline goes up, it goes down 20 cents, gasoline. every once in awhile there will be a major, major events, like the hurricanes in the gulf of mexico, knocked out about 27% of u.s. refinery capacity overnight. and that had an impact on prices. not only crude went up but refining price went up. it went up to draw supplies from around the world to the youth of this market. if the price had not gone up, it really would have been a catastrophe for us. so the market works.

it continually adjust. normally when you look at the price of the pump, here is what you should do. assume about 47 cents, 48 cents is for taxes alone. it depends where you are but that is the average. assume another 50 cents or so to refine it, transported, retail it. that is the entire amount spent. in terms of profits, the profits on every dollar you spend at the pump, averaging about in a bowl. i think the latest estimates, 4 cents, to 5 cents. and that is shared between producers, refiners, and the retailers. so, no, it is a mistake to think it is refineries moving the price. they are having a rough time and they are an industry where it has been hard to compete for a variety of reasons. host: should there be more refineries in the u.s.? guest: if we could get more production going, sure, why not? if we get a significant amount. because of this recession, they are operating about 80%

capacity. there have been times in the past where they were up to 90% or 95%. so, we have a lot of wiggle room and we're not worried about that. host: paul, republican, you are on with rayola dougher from the american petroleum institute. caller: my question is basically that the difference between exploration and drilling. do you have a sharon since -- assurances these areas open for exploration will let you draw along? guest: it is a cooperative process. we can't do it thing without the government. we have 17 major permits you have to get to get a break out there. you have to have environmental impact statements, you have to have everybody looking at it, approving it, monitoring it. that is just the permitting. then you have to meet 90 different sets of regulations. an earlier guest talked about, he was in the business since

1968, volume, volume of regulations, safety by -- devices. it is a well-regulated process. host: spring lake, south carolina, barry, a democrat. caller: i am a little disappointed from obama. whenever he gets elected he runs on one platform and then it seems to be he totally backed up and went into a whole nother direction. i wonder if there are other forces at work that are sitting there pressuring him into doing things he doesn't want to do, because he is doing just everything opposite from what he was going to do to start with. guest: i think he is looking at the big picture. i think he is looking at all the energy american needs. i think he is looking at how long it will take us to replace different types of technology we use.

a lot of folks would love it if we could run all of our b nichols on solar, but we can't. we can't get there overnight. we have opportunities available to us that will bring real jobs, opportunities for america. i have to think he is looking at the broad picture and doing what he can. and we have to look at -- the glass is half full, and move forward to bring the jobs and revenue here. the energy we will need -- we have a choice. we can continue to import, and we can move forward. acting with a moving forward and all directions. moving forward in energy efficiency, investment in renewals. it will just take some time to get to that vision -- that you may have over the energy future. host: the last call for rayola dougher comes from kentucky. bob on independent line. caller: i would like to know

why the congress and the president does not look at the oil companies -- they sell 75% of their product on the market, 25% comes into the country here. i have worked in about 18 foreign countries, 40 something year, 43 years, and every country that i have been in reserves and off for their own use before they sell it. guest: crude, as you know, is a global commodity -- it is bought and sold every day. and if it makes sense to export a barrel somewhere, it will be exported. but i tell you, there are operations, a lot of them are in alaska, gulf of mexico -- we will not ship that to another country. we have refineries in the gulf.

we are processing the crude we are producing their, it makes economic sense to process it there. so, while there is some trade back and forth it is not as large as you think in terms of our producing here and exporting abroad. on c-span2.

>> going to focus hopefully to the extent that we can on the revolutionary steps necessary to achieve that as people, to achieve that as an objective. last week some of you might have read the article in the new york times with a fantastic graphic about the move and countermove some areas of an israeli attack. i remember reading of the way down at the bottom. at the end some of the streets would be once again politically or militarily compromised. i thought back to 1974 when i was in class in college. the retiring as the the same in. i thought somehow i had not grown up or aged.

so i thought they would we would do is go to our panelists. i will call them one at a time. thick and very quickly quickly e themselves and this question of how we achieve energy independence. >> sure. thank you. i am the founder of an organization called gigaton throwdown, a project to encourage thinking. ..

just two small examples. there are many others like them. ls9 and many others and many that they have supported as well and i'm sure he's going to talk about even more radical ideas. but without the kind of thing that there are -- there is a possibility, and that we can scale these technologies up to the scale that's necessary, not necessarily to completely eliminate use of oil, but to give us alternatives so that it no longer becomes that strategic commodity. >> so sunil, to sort of pin it down, you're using the salt analogy, we have -- absolutely have to have more alternatives to break this focus on these single simplistic ways of viewing our systems and so we need to, in a sense, embrace complexity, which is something

that is difficult to do sometimes. >> yeah. that's right. and we need to have, you know, right now, when you produce electricity, there are a number of different ways of doing it. coal, natural gas, hydroelectric, nuclear, etc. when you want to move a car, you want to move a truck, you want to move a tank, an arm, there's only one way to do it. get stuff out of the ground. >> ok. >> gary, i'm going to turn to you next, and your focus on particularly with your experience, having run bp asia the last more than a decade, sort of what's going on globally and what that all means for us, and how there are solutions or revolutionary ideas that come at sort of changing the angle of our perspective. >> thank you, michael. g@ @ @ @ @ @ k),@ @ @ @ @ @ @

comment on where it's going and, in particular, the security of the system. you might ask yourself, why would a group like this say something so provocative, and i think the way to understand it

is to begin by looking at, well, what does the forecast actually say. they've updated this, the 2009 when it came out recently, and in that forecast, primary energy demand growth grows by about 1.5% per year globally. the implication of that is that by 2030, we'll have to have a 40% increase over today's energy provision in order to meet that new demand. the bulk of that demand is going to come in developing asia and in the middle east. the international energy agency projects that it will cost $26 trillion in order to meet that scale. about 50% of that is for power and more than 50% of that in the developing world. so what are the implications of that? well the implications are that we are going to see a

revolutionary shift in the india pattern away from the developed world towards the developing world. requiring, on the order of a trillion dollars a year of annual investment in economies where you have to ask yourself, where is that money going to come from? and how is it going to be mobil highed to produce not just the supply of energy, but the ability to distribute it and get it to places where it's actually needed. this is a mammoth task, and i think it creates, as i said earlier, a revolution in its own rate. -- own right. i'd like to then just leave that point for a moment and step back and say just a few words about the current energy system and i would have to say, you would probably say, well, he would be saying this, wouldn't he, having spent 34 years in the energy industry, but it is a marvel of human achievement. the energy supply system that we have today.

it's literally evolved over periods of hundreds of years, technologically sophisticated, it represents enormous amounts of support by public institutions and intervention by public institutions, and the massive amount of public and private investment. it really does what it's supposed to do. but equally, if not more important, it has co-evolved with the system for consumption. so they form an ecosystem, production and consumption, that has been designed for the purpose of reducing cost, maximizing reliability, maximizing availability, maximum highing the overall convenience of energy. i'd remind the people that service stations didn't just come in this planet on corners convenient for people to use them.

having electricity in our homes is something we take for granted. now, why is this important in the context of a revolution? well, it's important because this system is sophisticated, it's competitive, it's adaptive, and it resists change. it really, really resists change. and it has the capacity to resist change because the costs are so low. now, there is something about it that is vulnerable -- that creates vulnerablebility and this is a global vulnerability and that is that it can only be adaptive to those things that it can sense and that it can price and arguably, neither energy security,ality least not over long wavelengths, for the climate challenge can be priced. but if you look at the forecast from the international energy agency, you see that we have a

long wave length, fundamental shift in the demand pattern that will inherently create security issues. oil, for example, has to go from 85 million barrels a day, roughly today, to over 100. during this time period. and without intervention, the forecast takes carbon in the atmosphere to over a thousand parts per million. so this is the big challenge and this is what the revolution has to be about. how do we deal with the shift in demand, this extraordinary demand, in the context of a system that is deeply resistant to change. gentleman. >> so what i hear you saying, at least partly gary, is two things, first the scale is the revolutionary opportunity from an economic and an economic development perspective and scale at the same time is the barrier, because it's driven price down so far because of the wave of innovations over such a long period of time, so you have scale both for us and against us

in this, and so skip, i'm going to turn touch. a lot of people say the way to reparations dues our dependence on anything is to just use less of this stuff and to be spartans in a technological view, so skip, can you talk to us about energy efficiency and scaling and some of the things that you worry about? >> yeah. there's a conundrum, it's absolutely light. skip laitner, i'm the director of economic policy for an energy efficient economy and we do focus on that critical link between energy productivity and a robust economy and we're finding that scale is the critical issue but the conundrum is we have inexpensive energy, relatively speaking. since 1970, our economy has worked to a great extent and we've been able to bring down the amount of energy we've used per dollar of economic activity by over half. that's been a phenomenal accomplishment. in other words, since 1972 today, energy efficiency has provided about 3/4 of all new

energy-related demands for goods and services, new supply, only about 25%. but we still have essentially a supply side focus, although productivity has been the sleeper. it's been the invisible resource an we have to somehow bring that forward, and it is that incredible productivity gain that has enabled the cost to decline, and that's been an underpinning of our economy and the suggestion of evidence coming forward now, unless we achieve a scale, unless we move to about double the historical rate of efficiency improvement, our economy may not be as robust as in the past, because it has allowed other economic activities to move forward, and in fact, it's a story -- i might take a moment for devices. of i have here, four different things that tell the story. they hall look alike, they're about the same weight, they're all made of roughly the same material. this is a travel lodge toothbrush. not very exciting, it's useful

in a moment. this is a 500 mega bite flash drive. i've been using it for a while, fairly big, fairly fat for its size. this is a 4 gigabyte flash drive and the smallest of these is a 16 gigabyte flash drive much if we continue the current path, we may be tapping into the 500 meg gate conventional perspective with contingency. if we continue with an accelerated like jim and others have been talking about, we may be talking about a 4 gigabyte pattern, but the semiconductor, the new materials and few designs could get us to a 16 gigabyte path called energy productivity, should we choose to develop that resource. and that's the critical issue, taking a step back, identifying that larger opportunity, understanding the science, understanding the materials, understanding the new designs and let me close with this thought. that the president has announced offshore drilling as a possible way forward and there may be in

fact a critical link, but i'm thinking that that might get us about 20 billion barrels of oil. efficiency by 2035 could get us 60 billion barrels of oil equivalent. i'm thinking barrels of oil, kilowatt hours, burr the only way that can come forward is if we make an active choice and choose to develop that resource and not think efficiency as a 1980's technology, we think of as compact fluorescents, but we think critically about new material, new design. >> so one of the things i hear your saying is pelpour in the united states haven't fully grasped yet that innovation cannot be an episodic thing, but a perpetual thing, always moving forward, always driving if a certain direction to enhance these efernses and so forth, and how do we drive innovations with we have huge systems that are so efficient, that innovations within the system produce only marginal returns, versus -- >> exactly. i recall, kenneth bolden,

american economist, perhaps because he's married to a sociologist, images of the future are critical to choice behavior and it's going to have to be purposeful effort in hexone extent way that drives these kinds of changes and all of what we're talking about needs to be underpinned by a huge understanding of the role of energy productivity. >> lisa, you know we live in a world where both market forces and policy forces combine to create for us the environment in which we advance technology, that hour energy system is a complex array of public policies and market forces that shape and guide some of those market outcomes. one of the areas that people talk about is policy revolution, talk about pom sip. >> ok. i'm lisa margonelli, i'm the director of the energy policy initiative at the new america foundation. i come to policy as a reporter, i spent four years hanging out along the oil supply chain and watching how the sort of microeconomies of oil work together. i think one of the things that sticks in my mind when i think

about the task that we have in front of us is that the mckenzie global institute estimated that over the next 40 years, we essentially need to have the productivity growth of the industrial revolution, which means that we node of to have the industrial -- need to have the industrial revolution in triple time. that is a huge whoosh of activity, an enormous opportunity and of course, an enormous upset, the equivalent of the previous industrial revolution. and i think the real question is, how do we get to the power stick that skip talked about. how do we make sure that we're on that path. one ethics that's really a problem in the u.s. at the moment is that the issue of green house gases has become a competitiveness issue. right now, we -- which may seem strange. if you talk about it here, it seems like it's a huge political issue, a lot of people will say we don't know if it's really

happening, there's a lot of con fusion in the u.s. the problem is is that in asia and in europe, policies are already in place, to basically take advantage of this massive remodeling of the global energy system. and when you look at europe's standards for autos, you have to wonder how on earth are u.s. auto companies going to compete 15 years down the read, and when you look at south korea's initiative on the smart grid or europe has the super smart grid and europe is trying to pull together funding towards the smart grid, we're trying to get all the utilities going in the same direction, we have 50 different public utilities cosi and each hundred has a different relationship with their different utilities, we're trying to get everybody facing in the same direction and south korea has this kind of schematic drawn out of how much money they're going to of is a, how much carbon they're going to save, how they're going to

recycle the dollars in to their economy and how they're going to create 50,000 jobs a year, building appliances for the smart grid. and what you see is that in the u.s., we -- because we have to discuss green house gases in this very politicized way, we can't see that we're missing this huge competitive opportunity to get out and get a jump and be in the same place as the rest of the world, and that frankly, i find scary. and we need to start, i think, it's kind of a dirty word, in the u.s., but we need to start thinking about having an industrial policy and we need to start thinking about having an energy policy that's a lot house of representatives systemic, where we look -- where policymakers are willing to take some hard looks at the overall system and say these are some problems we want solved and we need to have markets to solve those problems. >> to two things. i really hear you talking about