abby phillip, a money and the top men are coming after them because they see them as a threat to their ability -- the taliban are coming after them politics reporter. we will be talking about fund because they see them as a threat to their ability to operate. is this someone in the ministry raising numbers filed with the of the interior who will sec from both presidential campaigns. we finish up the program talking champion of that? there has to be someone in the afghan system who will deal with about the g-20 meeting in mexico this. are you aware of this, mr. last week. president obama and vladimir sedney? putin >> i would like to answer your thing about transition at the start. we want to thank everybody who those measurements are there. there are measurements through has participated in this edition all the states of transition. of." to answer your imax -- unasked question about has any place ."washington journal completed -- no. none of the district -- [captioning performed by national captioning institute] provinces have completed all [captions copyright national cable satellite corp. 2012] four status of transition. some are in stage three, some have entered stage four, but

none have completed transition. on a question about alp versus >> colorado governor john hickenlooper talks about oil troop numbers, the troop numbers are correct. extraction. and epa administrator carol the money, however, is in the design. browner's remarks on energy weeper dissipate -- anticipate international contributions -- policy. we anticipate international colorado governor john contributions. there is a chain of command that hickenlooper says his state has runs from the police chain of command and those alp forces are been unable to find a single instance of contaminated groundwater from fracking. responsible to the district's this is about 30 minutes. chief of police. there is already training, funding, and equipment that >> it is not a great honor for comes down to the minutes -- ministry of the interior. >> are you confident that me to introduce governor john hickenlooper of colorado. afghans sufficiently value this program and cannot siphon off this funding?

he ran for denver mayor in 2003. >> there are two questions. he was elected governor of we are confident because we colorado in 2010 and began his first term in january of 2011. control the funding. that funding, right now, does prior to becoming mayor, he was one of the founders of not go anywhere else. post 2014, the alp program has colorado's very first brew pubs. he was named one of the five been controversial in afghanistan. greatest big city mayors by time the program has proven its magazine. effectiveness and is getting more and more support from top levels there. as that continues over the next two years, i think we are on track for that. [applause] but it is certainly no secret that a number of high-ranking >> i should have gone the other afghans have been critical of the program. way. we will need more success to >> good afternoon. build that support my goal is to speak briefly and create a framework, a context bureaucratically. for the discussion today. yes, in the ministry of i will leave as much time as interior, there is a structure

possible for questions and that governs the alp. answers. we have a lot of mentors and i might tell one or two jokes. that process, so we're building that capacity. we are on track to complete it my son is about to turn 10. by 2014. it is one thing we will have that review process on. this is his first joke as >> thank you. will now go to mr. critz. someone in a family who cares >> thank you, mr. chairman. about public service. you mentioned something i heard he came up and asked why do last year and the year before, the concern for attrition and the lack of and ceo -- nco's. farts smell? we were shocked and expressed the secretary mentioned that disbelief. attrition has gone from around he said it was a public service for the hearing impaired. 4.5% a year ago to 3.4% a month only at the atlantic would i ago. gear try such a highbrow beginning. ranging down to 0.5%. first i want to thank the atlantic. for comparison purposes, the the issues around energy are u.s. military, what is our attrition rate? >> congressman, i do not know some of the most pressing that we have not just in this the answer to that question.

country, but the world. i can tell you this about the afghan attrition. we know that people's standards of living are tied into an we had a goal of 1.4% per month. sickly with their energy. the afghan army is about at that we need to measure all of the goal now. it has been declining. costs and consequences of our attrition has been declining for different energy choices. several months. police are at that goal. it is critical. in fact, they are slightly below the goal. i just came from colorado and i they are meeting the goal and was dealing with a couple of exceeding it now. wildfires. the army is not quite there yet, but it has been onyx -- steady improvement for several months. often, when we look at energy, >> good. we have to recognize that we may the police force was what i was not have all of the facts or going to ask about next. information about climate change or the consequences of our can you explain, when you say that there is an issue with energy decisions. we need to be constantly mean? what you committed to fact based >> there is a shortage. decisions and always trying to bring that decision making we're about 17,000 short in the process closer to reality. army and 11,000 short and the oftentimes, it is not. police. i started out as an exploration >> 17,000.

how many do we have? geologist and then ended up in the beer business. >> that is a good question. i will ask my colleagues. i have gone from one flue to another. >> we are short of some #? >> yes. -- one fluid to another. i do not know it off the top of my head. two real issues. what we are seeing now is the one is cultural. they have not been an army with dramatic transformation and the professional noncommissioned acceleration of how rapidly we armies -- noncommissioned have to make a decisions. officers before. we're trying to train the senior leadership to value noncommissioned officers. things are changing more that is the barack thing going rapidly and it takes longer to on. next is filling in their ranks. make these decisions. the public is aware of this. they have standards, they have i had a drink with an old friend of mine. to be able to read -- that is one shortfall we are working on. if these guys to recognize in the ranks, they are -- if they it was found that energy issues are a high-profile soldier, they were an important issue more course and to ean nco frequently than gas prices or

the federal budget deficit. this just came out last week. pass that. it is a work in progress, it is a fresh polls. filling the slots. >> i've heard that issue in credibility is critically important. years past. i was in afghanistan two years all these facts are presented, ago and last year. i'm curious, with the growing who is saying and arguing for amount of force, has remained one side or another is crucial constant percentage of lack of anzio -- nco's. toward how the public is going to make these decisions. there is a lot of anxiety out there about hydraulic has increased exponentially, or are we seeing a sharp decline? we all know you have to have the fracturing and the technology soldiers on the -- the ground. for extraction of natural gas. you approach chaos at some point oftentimes, that anxiety is not if you do not have the amount of people you need. directly connected to facts. as we transition here, i'm it has been said that anxiety is trying to find out -- do we have a handmaiden of creativity. supports needed to that is more true now than ever. we have the opportunity -- as this 350,000 level, or, as was president obama talks about all discussed at the chicago summit the time -- to be the poster in may, are we looking at the child of "all of the above." 230,000 number. where are we going with this? ve the nco's we

we are one of the top two states our solar. need, because that is the area of focus. we have a lot of days of we will provide that for the record -- the general sunshine and we have cool temperatures, which increases population. my guess is that it has remained the efficiency. congress -- constant, slowly improving. we have been growing force. we are one of the top three states for natural gas. we're adding requirements, which we have been doing. we need have the nco's we have always been one of the top geothermal states. to man and lead the 320,000 we have really pushed or try to force. >> two additional points. accelerate our transition into the greener energies as opposed the first, as steve stated, the to more traditional hydrocarbon reason we do not have a enough be's is that, in order to based. we are one of the top four states in terms of cleaner coal. effected, you need 10 to 15 years of experience. this is an army that has less than five. they will grow into that. we are going to meet our

renewable energy standards this second, filling them to the process general townshend described -- because we will year, by the end of this calendar year. that is 8 years before have reached the numerical goals of 350,000 by the end of the scheduled. one night last year, we had 56% summer, that would give the afghan security forces two of our total energy loads or years, from october 2012 to the that period of time that was all end of 2014, to refine their -- all wind. quality, to build the corps. will the process be finished? i want to spend a little time nope. talking about natural gas because there is a lot of . conflict and a fair amount of but they will have the beginnings of what they need in misinformation. terms of numbers and quality by i found a speech from 1970's 2014. seven where present carter was the next two years will be. talking about how rapidly -- when will see the greatest progress in the junior officers. about a speech from 1977 where -- will be the period when will see the greatest progress in junior officers. president carter was talking about how rapidly we were >> for terrysedney, general -- running out of gas. when i was an exploration

secretary sedney, general geologist and we had giant fields -- this innovation townsend, thank you so much for technology has created an abundance of natural gas that your service. looking back at our involvement in south vietnam, one issue that no one could imagine 15 years ago. complicated the effort with the the president has come out and army of south vietnam was that talked about a 100 year supply we give them our doctrine. given acceleration and consumption. we passed the clean air-clean that was difficult to support after we left vietnam. jobs act in 2010, which allows i was in afghanistan in us to decommission some of our november, and it took me out to older coal plants and supplied see a training exercise for artillery. it was with artillery. them with natural gas. having served in mechanized infantry in the united states it is difficult -- you have to marine corps, i am thinking, why on earth have we procure for them artillery instead of mortars? when i pressed the figure out how you build in the gaps when the wind goes down and representative, they said that there is no sign. karzai -- karzai had insisted. natural gas is 1000 times better

than that. karzai -- karzai had insisted. the governor's role is to be agnostic. we are constantly saying, how can we get cleaner coal? i'll do we get to the point where we can get out all of the climate gases from burning coal. a lot of my friends say that is impossible. natural gas is an abundant fuel source. that was impossible 15 years ago. the ability of natural gas to cycle up and cycle down rapidly during the intermittent availability of wind and solar makes it the perfect tool because it can cycle up and down with less energy. it also releases fewer emissions when it is sidling up and down.

the way we got the clean air- cleaning jobs act passed is because we told companies they should go into longer-term contracts like the utilities. ultimately, as we look at transitions, kenny green future -- any green future requires dramatic advances in energy storage. we are behind in terms of our capacity for storage. it is why natural gas becomes a

suitable transition effort. three times as much of our energy is consumed in mobility as it is in heating our homes and offices. north america is the only continent where we do not have vehicles coming out of the assembly line that can use natural gas. people honestly believe that natural gas cars and trucks are more likely to burst into flames during a crash. you cannot get more flammable than gasoline. just as we talk about all the other issues around the variable energy. points, we also want to make sure that people see that we are going to have to have some

transition. the governor of oklahoma and i have 13 states who have signed up to create a five-year purchasing model with the idea of getting enough of those vehicles to go to the general motors and ford and toyota. it will be well over 10,000 vehicles a year. if you are willing to bring those cars awful the assembly line and convert them to natural gas vehicles, we saved $10,000. compressed natural gas is about a dollar a gallon. in the last year, it has gone

up to $2 less expensive. once we get these 13 states with all of these vehicles, we will have a realistic opportunity to start without a lot of subsidies and without a lot of grants and have the ability to look at compressed natural gas vehicles. a lot of the issues around anxiety and fear regarding compressed natural gas has to do with the reality around extraction. hydraulic fracturing has been a big deal. when i was a geologist, we did fracking in 1982. i was involved with 50 or 60 wells. there are tens of thousands of wells in colorado that have used hydraulic fracturing to increase their productivity.

we cannot find anything pointing to the actual process of fracturing contaminating the ground water. when they drill the well, they put a casing around it. we found some degradation that allows complications. i am a huge believer in the new york times. i was reading the new york times and read the article on hydraulic fracturing and i said, that is not true. this is completely out of context and it is a distortion. i thought i did a fact based way of resolving the distortions and lay out how the article was off

base. my wife looked at me -- she used to write for the new yorker. she did not make the grade for the atlantic. she will probably see this. she looked at me and she said, i trust you, my husband. but this is the new york times. i think i will stick with them. at this point, this country has a chance in the next 10 years of being energy independence. natural-gas is twice as clean and releases 1/2 of the harmful emissions of coal. it is less expensive. it creates american jobs. and we do not have to give billions of jobs to foreign dictatorships like venezuela. i went out and i talked to the ceo of halliburton, who was in

town. i said, you are losing the battle. this is one of those places where there has got to be a compromise. we need to harness the benefits of this innovation. i said, you have to be more transparent with your fracking. they said, we have invested tens of millions of dollars with special formulas for our fracturing. it took about five months and my staff said you are wasting your time. you are not getting anywhere. we were working between the environmental defense fund, which is a hard line, hard an environmental group. we were also working with halliburton and other service companies. we had the chief operating officer of halliburton and the regional head both claiming

victory. we had a transparent set of regulations that helped protect their trade secrets. the environmental defense fund said the public would be sufficiently informed so they would not have anxiety about what is going down this whole -- hole. how do we make sure we have she does give methane -- you did give -- fugitive methane. what are the potential benefits? what are the real facts so that we can get through the bitterness and really resolve this? that will be the most crucial issue. i spent 15 years in the

restaurant business. i tell my fellow electric co- elected officials that everybody should spend a few years -- i tell my fellow elected officials that everybody should spend a few years running a high-volume restaurants. the real truth is that you run a restaurant or any small business and you learn that there is no margin or no profit in having enemies. you will do whatever it takes to recognize that that relationship has to grow. resolving some of these issues around energy, we can begin to see that we can be agnostic and we can analyze the costs and benefits of all of the energy forms and do that in a way that pulls us together rather than

breaking us apart. the world stage of economic competition has never been more intense. it will get more intense down the road. if we do not make those efforts, we will be gradually get left behind. how is my time? did i leave enough? oh, i still have time for questions. [laughter] >> governor, thank you for your informative story. i am a great believer in narratives. i am a social anthropologist. i was pulled into energy by my former boss who was asked in 2004 if he were elected president, what would you do? he said he would eliminate our dependence on oil. i said we need to make

children's books for adults. the story is so complex and we were and energy in illiterate nation back then. we are a little better. i get the feeling that our public servants need to learn how to tell the narrative so that the public can understand it. i talked to tim geithner last week and i raise it with him. he was quite dismissive. it is hard. you do not hire people to come in and figure out how to do it. i do not know if you saw the video about the alan alda flame competition. he got a simple answer. he organized a competition with stony brook university in new york in 2008.

they had 800 scientists and 6011 year-old its value -- 6000 11 year-old the body weight the results. they ended up spending a week barricaded in his basement. it is bloody hard and we have to recognize how hard it is and hire people to help us get these stories across. otherwise, we get all kinds of push back. the navy has changed how they think, feel, and behave about energy. the narrative really matters. you might get people in to figure out how to tell it to children. >> they are on it. the point is well taken. i went to a liberal arts school. at one time, i wanted to be a writer.

i took some creative writing classes. there are a lot of wesleyan graduates out there in public service. the professor said, everything has been said, but not everything has been said superbly. and even if they have, everything must be said freshly again and again. it should be said in a simple enough way that children can really grasp it. the visual images. there is so much distrust and fear of government now throughout this country. we have a 60,000 acre fire in colorado. by the time it is done, it will have burnt up 200 homes. there is a lot of conspiracy. people feel it was set. it was not. we tell them it was lightning.

forestry experts have established that lightning was because. we have had public information meetings with people who have lost homes. they said, somebody set that fire. somebody did this to me. that is bad instincts to be able to blame someone. -- that instinct to try to blame someone. we found the tree that was hit by the lightning. they said, you have a picture? i would like to see it. the next day, i had these beautiful pictures and the whole truck was split and you could see the scorch marks. it was covered nationally. suddenly, all of these people felt a lot safer that they were getting real information.

the challenge is how do we create credibility. the atlantic has as much credibility as any media source that is why i flew all the way here. what else? >> good afternoon, governor. from one wesleyan graduate to another. our members have that all of the above approach to energy. the technical, structural aspect of all of those systems out there. on the issue of factoring, i interpret it -- interpreted your comments to be perceived in that way. had he seen news reports linking earthquake activity to fracking operations? any comment on that? >> it is conceivable that if you push enough fluid into certain

places where there are faults, it could help lubricate the two plates. friction keeps them from sliding and that is what creates an earthquake. there are some places where this might have happened. those are few places. we should be able to predict and ascertain where that is going to happen and work around it. before you ever start fracking, you should be able to tell if you seen these faults. if you push this list forward, it is 90% water and the last half percentage is chemicals. it goes down the well pipe and out through these local polls. people say, this is going to go up into the groundwater and

pushed through. the amount of water we can push out is a fraction of what is down in these wells. having that go down and lubricate to a fault is quite unlikely. it is something we should be able to work around. all of the issues around hydraulic fracturing -- it is like any industrial process. the real problem is that in the past, after they trucked fracturing -- when you push all of this fluid down the well, when you take the pressure off, much of it comes back up. the better companies are trying to figure out how to recycle that fluid.

they are care less just like they are with diesel fuel. that just fuels people's anxiety and creates mistrust and alarm. part of colorado's goal is that we want to be one of the most pro-business states. we want to have the highest environmental and business standards. we are going to double the fines. if you want to convince the public that this is a state industrial price us -- process, eliminate the carelessness. some businesses are more likely to scream and say, we do not want to pay the high wind. they will scream and say, give us another chance. we are trying to build up a tolerance. anything else? what a room full of cautious souls.

>> governor, i work for the natural gas supply association. i appreciate your comments. >> i saw five or six of you in the room so i know -- i knew i was going into the line and's den. -- lion's >> i was wondering what your reaction was to the federal government coming out with their policy position or regulations on hydraulic fracturing on federal lands when the states already doing that? do you think that is necessary? what are your thoughts? >> largely because of anxiety,

sometimes creativity takes the form of additional regulation. there is enough anxiety out there. certain constituencies have pushed to increase dramatically the regulations are around fracturing. at the state level, we have been aggressive to say, what is the compromise that protects people's right to know, but at the same time allows business to ghost will word and try to reduce the amount of oil we imports -- business to go forward and try to reduce the amount of oil we import from foreign countries. ? .

how do we modify the regulations so that they are the least burdensome as possible. president obama has the best cabinet in terms of these issues. lisa jackson of the epa has a master's from princeton. ken salazar understands the importance of our extraction industries. what he said to me last week -- i think if we get the states to take sufficient regulation, there would not be anxiety that the federal government has to step in. salazar has his own staff that he has to work with. if i can get several states that have a lot of experience to agree to have high standards of

safety and protection that would sell sign -- that would satisfy kenneth salazar, he is willing to say, then we will. try to have the same form be filled out by the states and the bureau of land management so that you are not creating red tape? you hit send and the form goes to two different places. everybody has signed off on it. we try to make it as pain less as possible -- as painless as possible. ultimately, that should be the goal. we can compete successfully with china and india and emerging economies, but we have to protect our land and water at

the highest levels and we have to be more effective on being able to get energy from all different sources. we have to have metal and all kinds of different things that come out of the earth. thank you for your attention. [applause] >> at the conference hosted by atlantic magazine, a special panel says there should be a special tax credit to go to utility companies that use wind power. this is about one hour. >> i am steve clemons, the editor at large of the atlantic. we are going to focus on the next generation and energy exploration. we have martin klepper of the

energy infrastructure projects. then we have willett kempton from the university of delaware. , who knowssullivan more about the dollars and cents of this than anybody i have ever met. he is out there looking at what works and what does not. i come at this as a layperson. i do have some images -- images of the wind part of this. when i discussed this, i wonder why i am discussing this? is there a viable energy option in here? what is the difference between something that south good --

sounds good and feels good and having an energy policy? ted turner wanted to put wind on all of the wind firms in buffalo. but the -- all of the wind farms in buffalo. but there was an absence of a national infrastructure grid. let me open the discussion. i will start with michael. your firm, which has invested heavily across the energy spectrum, has about 20% of the wind energy market in the united states. are we discussing this because that -- it is politically correct to do so? >> the first and primary reason

we got into wind and solar was [unintelligible]. then a former vice president gave a speech at the oscars and wind energy got a lot of attention. in the beginning it was always our fiduciary responsibility to our shareholders. in the last few years, we have utilities scaling solar. we continue to invest in it. it is a good product for our customers. in 8 or 10 states in this country, it is prudent for them to buy it.

as you go away from those states there is a different economic equation for the user. solar energy is largely an economic choice. >> you are quoted as saying in 2013 there would be no wind centers built in the united states if the federal government would not get its act together on the tax incentives. could you explain that? >> you have a dynamic -- a dynamic where, if wind energy is measured by price, there are declines in the equipment because of a beria's forces at play.

we have brought when pricing with the federal subsidy back down to the 3 cents range. on the left and right close, it is much higher because of poor regimes. we are in a dynamic because that subsidy will go away. there is a 2.2 cent tax credit after 10 years. you know the difference of play -- of pain with pretax dollars with pre-tax dollars. what customer do you know would buy a lot to pay double the price? i do not think there is that

much political correctness in this country. >> you were the project finance lawyer of the year. you are range project financing for sports teams, are renounce. on evenings and -- in evenings and weekends, you are doing renewable energy. are there similarities in this energy sector and what you have done with large projects? how did you get into this? coming back to my core question, which is to kick the tires of how serious wind is as a way to have energy options.

>> in 2011, we were involved in almost $10 billion in renewable energy financing. the perks from sports are a lot more fun. not as many people are interested in looking at a bunch of wind turbines. that is where the biggest capital investment is. that is where i feel you can make the biggest difference for our country. as michael has said, they have invested almost $20 billion. the industry has invested close to $100 billion in wind. they would not have done that it was not economic and if utilities would not be buying that power. the loan guarantee program has gotten a little bit of publicity.

the federal government helped finance $20 billion in renewables. those projects will help scale up the energy industry. the price of energy has gone up. because of wind power has been reduced significantly. that is a way to help our country become more energy independent. when the obama administration -- >> when the obama administration came in three years ago, we had 5% of the solar production capacity of the world.

-- china had 5% of solar production capacity in the world. now it has 70%. it does not look like the obama administration has made much headway. the united states has lost the battle on solar. the numbers do not look good. >> i would say we did not lose the battle. the largest solar projects in the world are being built in the united states. there are 350 projects currently in development. those projects will help prove the viability of low-cost solar. some of the largest solar thermal projects in the world are being built in the united states now. when you talk about the pv

industry in china, you are talking about manufacturing. you are not talking about insulation or equipment. as the price of solar comes down, the u.s. manufacturing capacity will increase as well. >> you tried to deal with one of the big problems of wind, which is availability. you have linked a lot of offshore sites. perhaps you can tell us a little bit about that. tell us what the weakness has been in the ability to get large-scale wind energy production. >> i think it is a matter of ramp up rather than weakness with the ability to move. >> it was mentioned that 4% is -- 4% of production is wind.

there are tax incentives and other policies. there is an optimistic forecast. when is moving quickly under a current policy environment. which, as you know, may change. wind is considered to be weak or unable to become a large part of generation because it fluctuates with the speed of women entering the turbine. that is a bit exaggerated. i was on sabbatical, which does not mean vacation. it means you are working with different people. they are running 60% or 70%. it is certainly possible to do a

lot more. people think of stories as the main solution. the projects we did, that you referred to, steve, is that we looked at the atlantic offshore area rather than one location. one location fluctuates a lot. we modeled a long distance transmission high-voltage direct current going to florida. this is not something you practically built in one shot. we had a 11 sides along that route. in four years of data, wind fluctuated around 30% to 40% capacity.

not all over the place. it is just one direction. it is meteorological reorganized so that the way these storms move is the way the transmission lines move. you did not leave a lot of stories. you need to combine a lot of transition with a lot of storage. >> this sounds like a large degree of a infrastructure investment. i did not know the model and have heard from ted turner. when you talk about grits, you talk about investment. it brings me to some of the money back states are investing in infrastructure. what do you think from your own perspective -- what would be the

motivation for the government to invest? >> a loaded question. >> which infrastructure, you have to look at the company, which is why, why in alaska. ? most people look at the u.s. electrical grid do not see it every day. each stage often has its own policy. georgia does not talk to alabama, florida does not -- does not talk to michigan. when you have a transition and try to coordinate all of those things -- there are over 500 utilities in the united states. we cannot get 535 people

selected. you imagine getting 500 utilities to agree? when you want to start doing investment and infrastructure, it is a regional discussion. when it makes a lot of sense. -- wind makes a lot of sense. the all of the above discussion the governor was talking about earlier. you get into what we call the largest discussion. we have a lot of orange groves down where i am from. many of you pay tax dollars a gallon in the high school -- in the supermarket. if you are from this area, think what bars jews would cost if you had to grow the oranges here --

think about what orange juice would cost if you had to grow the oranges here. you have to bring the infrastructure. you get into the 48 different countries the logistics, the construction. the technology is known. everybody knows what it is going to cost. moving electricity around the country is not the same as moving oil and gas. the physics and engineering behind it are different. it is not like the interstate highway system where we have a shared infrastructure almost all of the state that are paid for in a political and local way.

the infrastructure-electrical grid is quite different. it was built decades ago. now we are building rural firms and rural -- royal farms and rural solar facilities. they have not been built in the city centers. now we are trying to bring that power back in. there are two lane farm roads. traffic is not going to handle it. the traffic pease, the engineering, the physics are quite complex. >> the administration supported giving ferc jurisdiction to help

solve the problem. there were provisions that gave ferc specific authorizations to overcome the barriers that existed. there is no question that transmission is a critical piece to build that renewable energy capacity in the country. some states have done better than others internally. the state of california has done a pretty good job. the state of texas has done a good job to recognize the need for that policy. we need to go back and look at the policy that would help open the grid. offshore wind, which is put italy significant, has to be

transmitted. >> is there much public awareness? it reminds me of one year ago. they were discussing the targets of generating 20% locally distributed energy by 2020. it was a huge shift. one of the guys who works for the non must -- elon musk said that if you look at the counties in california, they have wildly different attitudes toward solar. it reminded me that the world bank publishes a study comparing countries. they go through line by line.

it has an uplifting effect on countries that are laggers. i am wondering why they massachusetts -- there might not be a benefit in publishing the different environments so that there can be a public deal. >> when we figure those things out, we keep this for the goodness of our shareholders. we look at states inside the federal contracts of the regulatory regime. one of the most confusing thing is to most folks -- and we see it from people will come from europe and asia -- they misunderstand the federal-state dynamic and the way electricity is regulated. there is a great ferc tool out there and very few people want

to see that tool used. they did not want to be the first people to do these grand plans. that takes a lot of effort. when you get into those business decisions, they are complex. from our point of view, we look at went and solar to a certain did -- a certain extent. we look at where the customer demand is. customer demand is policy at the state level. our ps programs that the state level will drive that. next year, everybody has to sit on their hands and wait to see what happens with federal policy. you might see some small --

electricity prices were there. state level rps demands may drive some wind demand. it will be less than what we have seen in the last five or 10 years. >> the public does not know this, but you are working on the engineering of wind and you have been working with bull will -- with google. do you think there are things the u.s. government needs to do more robustly? what would that be? coming back to what mike talked about, perhaps there are some benefits for your center. >> i agree. i think state regulations for

renewables are important and they are independent of price. the price issue is not quite as straightforward as the 3 cents or 6 cents. we are looking at prices today. that is based on natural gas prices today. some people think today's natural gas prices will stay the same. public utility commissions and utilities want a diverse portfolio. they do not want all one fuel. when itve been bowl -- b is a perfect hedge against fuel increases. the true cost of when our solar

is never going to increase. addressing your question about the automobile storage, our university of delaware has done a good deal of research to look at electric cars as a storage source for the grid. we are getting ready to roll out a commercial program with several industrial partners, probably in default. the idea is to use the -- probably in the fall. there are fluctuations in the employee's services market and in the wind access, where you absorber. that is called de gaulle -- vehicle grid technology.

>> i see tire investing in everything and developing everything. china is really going to become greener. it will have highly sophisticated natural gas facilities and it will be putting in place horrible coal plants. they will obviously have solar. i get the sense from the three of you that you are largely optimistic about u.s. investment in infrastructure and the interesting place this will grow. i do not get the sense for -- sense from you that this is a need for demand, for action. an energy earthquake happening, if you will. i do not get that sense in talking about wind.

it is stable and sound and it will be incremental. i am wondering if i have the right impression. >> in china, a third of the wind power is connected to the grid. >> wind from nowhere. >> it meets the five-year plan. then you have another dynamic. in our country, we have a million megawatts in solar capacity. about 4% of the energy next year i did this year's big deals. -- big build.

we have a giant infrastructure that we have built and paid for over many decades. theirs is getting created to catch up and meet demands. the dynamic you are describing is 15 or 16 year-old teenager that meets a lot of calories to become a pretty dull -- a great adulteresses the adult already -- a great of dalton versus the adults are ready in the economy -- there are two different dynamics. if you look at capital flows, our country is a regulated energy industry. both from a profit and environmental point of view. i think you get into their dynamic and i would argue is more like that. i have not built any clients in china, i am speculating. it is probably more like this country in 75 years ago.

you get your permit. away you go. build your highway. in this country, anything that is billions of dollars is not a one lunch meeting. i would argue that they have a a simpler regulatory regime for construction decisions. you are feeling that when you visit. >> yes. i was on the panel with a tiny solar developer last year and he was asked how long it took to convert his 50 megawatt solar project. he said, one day. it took one day to get the land permit, air permit, a construction permit, and the financing. when you think about the two years or five years it takes in the u.s. to be able to get all of the entities involved to just approved putting that shovel in

the ground to start construction, you realize why we are at a cost disadvantage. that time bring it takes in the u.s. costs money. it is high risk development money. it is consultants. it is a lot of people spending a lot of time doing all the kinds of reports said working with all of the different government entities that are involved in each of those decisions and getting them to work together to be able to come out with the same decision to move the project forward. for every project moving forward, you have a couple that do not. there are costs of the dead project and the money that is spent on the project that did not get the approval. so, we are in a different stage of maturity in developing these assets. going back to your question, i felt like there was tremendous momentum behind renewals two years ago. i think a combination of

negative press from solyndra, the elimination of the ptc's, end the gridlock has resulted in a different mindset about the future for renewals right now. i do not think the basic economics have gotten worse. they have gotten better. the opportunities are greater than they were a few years ago. it is just that the overall mindset of the public has changed. >> interesting. >> yes, just to give the audience a sense of what we are talking about in terms of up- front investment, and to give some represented numbers for an offshore wind farm, you have development and you might spend 20 or $30 million. if you are succeful to build a 500 megawatt plant, you're looking at a billion $0.50. -- 1,000,000,000.5 at -- $1.5

billion. >> not if they work for me. [laughter] >> kate wind -- cape wind has been through the permitting process. they are trying to permit a wind farm in nantucket. it is all of the principal's money. >> the successful man sold his gas plants to a large firm -- >> he is almost $50 million into permitting. >> if you want to do an offshore oil platform in the gulf, it is two years. that permitting time has a definite affect on the viability of projects. are things on fire? not from a technology perspective. as i mentioned, i have spent six

months in europe and i was in denmark and i interacted with people in germany and the u.k. that area is very much on fire in win technology. the universities are doing work. they're looking a completely different kinds of generators and wind machines. part of it is related to liability and the other is to lower the cost -- lower the cost. some of that is going on in this country. there are some very innovative designs in the u.s. you do not have the same kind of national support for that as we see in thnorthern europe. >> you have given me the perfect question. the new america foundation wrote a report and when we saw that they get -- the data, we title that the green trade deficit.

when you book get lots of -- when you look at lots of different ways to get clean jobs and r&d dollars, three- quarters of the dollar goes to scandinavia or china. part of germany. have you seen the u.s. parenti base of this -- u.s. r &d basis begin to incentivize more of this? or is it something -- is the idea of green jobs something that scandinavia -- >> they are ahead. there has definitely been a big confusion over the last three years or so. the department of energy has been the one that has been doing the applied project. they have just -- at $50 million

worth of grants which require 50 percent and industry caught share -- cost share. that really brings activity. half of those do not come up with anything productive. it means the others are getting done which may not have gotten done without the seating from the federal government. i would like to see the national science foundation do more in these in the -- in these engineering problems. the doe has been the primary funder of pushing the wind industry technology for. >> will work with universities. the u.s. to the to business, there is very little are in deep. -- r &d. we spend about $400 billion a year on electricity. all of us together. at $3.50 at the pump, we spend about $350 billion buying

gasoline for our cars. they give you a context of what we are talking about. r &d aggregate by all of the companies that generate electricity is very small. i would be shocked if it is even a billion dollars. i do not know the number but it is very small. the government investment is another small number. where the capital is flowing in the last few years because of alternative energy and high fossil fuel prices and the excitement around green energy that you spoke of its private equity and private capital. that is something i did not see 30 years ago. what you see today is billions of dollars every year - and a combined signal from public policy makers. when you talk about leadership, i like to think that we are in only the first inning of this

alternative energy or non- traditional energy game. u.s. earlier -- a lot of runs have been scored by a lot of folks. whether that is storage or wind or other renewable energies or tracking -- fracking, these are all game changers. three or five years ago, i got folks wanting to get into wind and solar. today, the topic is how to get into oil and gas. that is where the mainstream media is going. that is where the capital is going. you need a combination of all of the above. that is necessary. wind is 4%. can it be higher? kennedy 20%? not without a drastic change in the infrastructure or some economic game changer.

at the same time, where those policies go, we will have 48 different states and a couple hundred utilities making those decisions in the coming decade. there is no silver bullet. there is a lot of capital flowing in the form of venture capital and private equity that is driving what is happening whether it is vehicle transportation or fuels we use in automobiles or electric generation. >> i was going to second the comment about private equity. we work with silicon valley private equity firms. a huge number of them have also been investing significantly in clean tech. they have been in a smart card technologies, solar, looking at other kinds of fuel storage battery companies for electric vehicles. tesla and others have been beneficiaries. i think that has made a

difference. the goal is to have the u.s. become the leader in clean energy the same way we were in internet technology. whether it is margaret or the newest most efficient solar modules, we want to be the world leaders because it is a world market. >> i may come back to on that. i promised to move on. raise your hand and we will move right here. we will move the microphone to you. identify yourself, please. we have c-span here today. stand. >> hello. green contention's radio. i want to ask the national in -- i went that technologies in the universities are astounding. what these people have come up with would just blow your mind. i really applaud the

universities. what is the role of government specifically? if you could have a magic wand -- if there is one thing you want government to do that will really boost the energy market for alternative fuels, what would it be? a price on carbon? something else? what is -- what with the one piece of legislation be? >> what is the silver bullet? two themes. >> i was kind of hoping he went to marty first. [laughter] >> certainty. you might think it is a cop out answer but i will explain. when you sit in our shoes and you are trying to make decisions that our financial commitments that are billions of dollars and

decades-long and you do not know what the rules will be a year from now, many of you think none of us have certainty. many of us do not. that is the complex reason why some of us get more than minimum wage and others -- you have to make complicated decisions. when i come back to it, there is no silver bullet other than something that is free or getting four dollar oil again. that will not happen. i look at certainty of rules and regulation and planning and i emphasize where government gets their direction so that policy makers are making stable decisions that are balanced, whether you are from the left or right. and investing in capital and venture capital or private shareholder capital will make

prudent decisions. the law of unintended consequences might kick in but in this kind of forum -- i with the uncertainty. that is a broad term. >> excellent. >> two policies. take the extra cost of electricity production and included in the price either through what consumers say or through new pirate -- new power plants. if i am making bread and i am competing with someone else and i got to steal the floor, i would have the cheapest bread. if i am producing electricity and burning coal, and impose a cost of 10 cents to 15 cents per

kilowatt hour. that is on the health of the people in my area. i do not pay for that. they pay for that. the buyer of the energy does not pay for it. if that externality were incorporated in the price, we would have a big shift in what kind of generation -- star with this before you get to car been. you will still burn natural gas and you will have some wind and solar. you not have any new coal. >> what is the second thing? >> rd. rd.

our economic competitors are doing this. it does not make sense for us to under fun technologies which we know are going to grow over the next couple of decades. we know that these are going to grow a lot over the next decade worldwide. we do not want to be sitting out of the game and not producing that stuff, not coming up with new technologies in the u.s.. >> first is on the supply side, i think we ought to have a federal bolt -- federal renewable standard. we need to create demand in the next five years for renewable to offset the advantages that fossil fuels have had. it would be much more affected it with -- if it was a federal policy. on the supply side, i would like to see the cost of finance go

down. one of the best ways to lower the cost of finance is to open access to investing in renewable to individuals. the way to do that is for congress to changeable laws to allow partnerships to raise huge amounts of capital for oil and gas to be available to individuals to invest in renewable energy projects and for real estate investment trusts, which raise billions of dollars for hospitals and hotels, to also be able to be used to raise capital. if you did both of those, you would greatly enhance the access to capital, lower the cost of capital, that is another way to make us more competitive with the rest of the world in terms of our renewable energy projects. >> a tweet -- i wonder if i will learn

anything new with this thing. i had no idea of individuals could not invest. other questions? right here in the back. >> sunshine press. given the presentation earlier the utilities are not investing much in research and development, whether there is something about the american economic structure that needs to be fixed to advance the future of energy, we've -- our oil imports are financed by the navy. this mix between the public and private sector and the academic sector and energy, i wonder if that needs to be fixed some house so that we do not have

this -- for example, the checkerboard of different utilities that cannot agree on how to do business. there are some things that its teams are better done in the private sector. we need to play with this? >> interesting question. >> i did not understand. >> he was asking -- i apologize for butchering your question. i think what he is asking is if you have large scale hit in -- hit in costs. he was wondering if there was any work to undo that. when people talk about energy independence or

diversification, they are trying to diminish those costs. i think he is asking if there are other things that might be done to bolster and upgrade renewals in the ecosystem. this documentary that came out on the natural gas boom is fascinating. i did not realize we were going to make a lot of people upset. there was a phenomenon in the the lesser lots of hel developed parts of the u.s. are getting huge windfalls because of the natural gas that is now reachable. it raises questions about whether you need to -- if you are going to change the share of energy sources and production in the country, might you would just some of those?

[unintelligible] >> there is plenty of capital out there. there is a giant deal where there is too much because interest rates are too low. i am not saying is just supply and demand of capital. i will consider in this to electricity. i am not an expert on one the companies do globally outside of north america in the electoral -- outside of north america. in the electric sector, if you can bring back certainty, the capital will flow. there are subsidies in the u.s. also in electricity. one is the protection tax credit for wind. -- production tax credit for

wind. people think all subsidies must leave. maybe. maybe we have gotten to that point. at the same time, it is a relatively new industry. the wheat industry is 10 years old. in the scheme of things, we're talking about an industry that is over 100 years old. it has made giant steps. now we went to transition from a less carbon-dependent infrastructure inside that sector and you cannot do that on a dime and shift into this with that industry and suddenly have an alternative other than natural gas, which is just less of an issue than cold. it may be the fuel that makes sense today. it is a cheap resources. as you try to correct -- blanda and that diversity and the comfort you get from solar and wind, you'll have to have a subsidy to get customers to buy it. right now, it is not standing by

itself. >> part of the question was about whether the electrical utility should invest in r&d. they do. we have gotten commitments from the electric producers or distributors over the last few years. we try to spend that money wisely. systemically, you know, it is more likely going to be the wind generator -- turban manufacturers that will invest in the r&d. they're the ones to benefit from advances in technology. that does not mean you could not have a way for electric utilities to invest. a few states have a social benefits charge where ratepayers go into r&d.

i do not think that is a good idea for 50 states. there are a few states that can do that pretty well. california and new york. they provide an alternative reality to washington. in the invest in technology that washington has not figured out. i do not think most state governments can make wise are in the decisions. we tend to get better decisions like that coming from doe and those federal agencies. >> it is possible to do in some states are doing it. [inaudible] >> i am with the woodrow wilson

center. this question speaks to mr. kempton's silver bullet with the buzz phrase internalizing externalities'. you said address the public health issue. i was curious as to what sort of metrics you might be able to propose. is it investment in government- off. public health report? i was curious if you had a way of evaluating that cost. >> put your hand up. he is doing a thesis on this trying to figure out what external costs are.

one -- public health studies where you take the cost of emphysema and they lost work the, premature death, yo cdc metrics, you calculate the cost of generation that reduces pollution and then you back that into a cost per kilowatt hour that is transferred from the generator out to people in the surrounding areas. that is a metric for doing that. it is that the question you're asking? how to measure that? >> it is good discussion about how to take the outside elements that we see and create what sounds like a tax, but we will not call that that. this raises issues about japan. i wrote about the energy cliff that japan is facing right now where is invested in 54 large

scale nuclear reactors. all of them were shut down until two were restarted. in part because of the hot summer. in part because of iran's sanctions and the way in which oil flows in and the fact that the saudis may talk a lot about this capacity. the real point is that japan is sitting in an energy nightmare. i wrote a piece with the former head of the national energy agency, looking at japan's to assist. i got about a thousand pieces of hate mail directed at him. i was just reporting. for not taking into account the other larger cost and externalities'. you also saw embedded in these letters in naive belief that renewal bulls were a quick and ready answer for japan. this goes back to other bits of the infrastructure.

i just want to talk that out. it is a boiling issue in the japanese politics right now. we may not suffer the kind of shocked that japan did after the damage -- >> it does not have to be a tax. the state commission's decisions of what new generators to build. they compare multiple types and they go into talks. .hey're often required they approve building new plants. arizona has said cost includes everything. it is not just your electric bill, it is also your blue cross blue shield bill. let us minimize the cost to the citizens of arizona. the lore has a similar law -- delaware has a similar law. no new taxes or anything. this is just which power plants

you pay. >> any other comment? >> we are not talking about solar but disturb its solar. that helps solve infrastructure problem because you do not have to do with the transition. if you could put a couple hundred thousand solar modules on residences in the district of columbia, you could greatly offset the need for future power plants as well as transmissions. if you did that across the country, you would see how quickly you could eliminate the need for an awful lot of the problems reducing fuel costs. >> around the wind industry, from a public policy point of view, we need to transition to wherever the next up is out there. it is not ready for it today. as we have committed to do, we will work with both sides. any support we can get today

would be wonderful. we need to get the word out that the wind tax credit puts next year in jeopardy because all this global manufacturers cannot just art and stop all those factories. even if we had a one-year extension, the 2013 bill would be minimal. it had supplied but it will not be there with the equipment. there is a lot of uncertainty for a lot of things going on in this sector. as far as the specific topic we started with, this is an important public policy decision. >> thank you. quick comment? >> ptc is very important. we have to look to r&d and build up the technology. >> ladies and gentlemen, please thank our guests.

thank you for a wonderful discussion. [applause] >> also at that conference, former epa administrator, carol browner, said the obama administrator has advanced its climate change attended agenda e opposition from congress. this is 20 minutes. >> hello. good to see a. i do not know how much you heard at the last discussion -- >> a lot. i will probably be redundant. >> that is fine. we are joined now by carol browner, a distinguished senior and former head of the epa. she was a director of the white house office of climate change policy. i started the other question facetiously.

i want to ask why we are talking about wheind. is there a real business, a neat? a fundamental logic that is driving those directions? i thought we had a fantastic discussion on the nuts and bolts of what is happening across the renewable sector and in addition to win. in this administration came in and talked a lot about clean jobs come clean energy. klein a change responsibilities globally. -- climate change responsibilities globally. are we not really getting to the reality of some of those things the president outlined? >> i think the administration has an awful lot to be proud of.

i think that while legislation did not become possible, the administration did not sit by and twiddle its thumbs. it looked at the tools available under existing law thato move forward. for example, the agreement on a national program, the first-ever greenhouse gas initiative, it triggers the recent proposal on new coal-fired power plants. i think similarly, the mercury role is an interesting rule when you look at the reality in terms of the likely closure of the older power plants. what that means in terms of greenhouse gas emissions. finally, i said the department of energy's work on appliance. when you look at all of those and when they are implemented, the actual achievement in greenhouse gas emissions will be

quite significant. you are dependent -- depending on his analysis, that will bring you close to the early iterations. there was more and more time given, more and more opportunity for people to use alternatives in terms of achieving reductions. i think the administration has a lot to be proud of when it comes to climate change and reducing greenhouse gas emissions. they also have a lot to be proud of in terms of pushing opportunities for new technology. it is very popular right now in the political rhetoric to suggest that all regulations are bad. nothing good comes our regulations. as a former regulator, i can tell you that a state committee and a healthy environment for our children -- this creates business opportunities. every time you say that something is not good and something should not be used, that is an opportunity --

whether it is a decision made by congress in 1992 banned the use of chlorofluorocarbons and the reality that created opportunities for the car proposal that is currently being finalized by the administration which would take feel efficiency up into the low 50's. that will create business opportunities because you are going to have to look in new technology and there will be a guaranteed market for those new technologies. >> let me ask a question. >> at the we are fading in and out. are we on for the camera? yes? >> i took a quick stroll through center for american progress report. it is very clear that there is a dissatisfaction with what has been achieved.

>> i think the great disappointment is the fact that we were not able to get legislation. i can go through all the reasons why i think that did not have been. we had a lengthy debate between some of our top senators about how to structure health care deal. unfortunately, senator kennedy passed away. you're talking about wind when i came in. in addition to the tax credit which needs to get sorted out, something like a big global portfolio standard and a clean energy standard would be a huge risk to the renewable energy sector. maybe we could not find its on

a larger bill like waxman- marquee. i guess it is 29 states close to the district of columbia -- why not have a guaranteed so we these technologies utilize. >> you have been dismayed in public by the partisan gridlock over a number of issues. we cannot get a comprehensive energy strategy in the current climate. do we just need to stop working on it? do we need to go home and come back? >> i am an optimist. anyone who spent as much time as i have in washington -- i think it is a product of two things.

the money and politics, the amount of time that members have to spend raising money, the amount of time presidential candidates -- i think that 247 news cycle -- is very hard to create a narrative with the american people. i was thinking back to when i was at epa many years ago. we proposed a very controversial air quality standards for find paula -- particles. it took about 8 months. in that time, there really was a conversation, a narrative that the creative. all the major outlets reported on it regularly. not everyone agreed with us. that is much harder to do.

i now go to bed reading the "new york times." and then i read it again at night. all i have done is elidia. i think that changes the discourse in this country. at the end of the day, -- when did clean energy become a dirty word? what is wrong with clean energy? and you can believe what you want about our existing energy choices. why can you not believe there is an opportunity for clean energy? we know that air pollution is bad. we know that is bad for our children. it can exacerbate asthma attacks and other respiratory illnesses. why would we not be for investing in a new technology that would be good for our children and for our competitiveness in the global market? >> at want to go to the audience in a minute. i wanted to go to the fact that

there was another climate change conference. it would be interesting to note what you would think about it. i am one who does believe that the investment in the united states in the building with clean energy -- a lot of these energies can create recurring returns and that is a smart strategy. can a nation in as much debt as we are with the dismal economic performance we have and with so many actors in our society scrambling to hold onto what they have been bold enough to make those kind of investments? you have seen how hard it is. i am just wondering -- i know you are an optimist but when you think about trying to achieve these big goals whether it is doable. >> we have done it before.

it is important to remember we play an important role in the leadership of the world. i think this is a moment of opportunity. in the same way that we have supported industries throughout our history, why don't we support the industry of clean energy today? if you think about the oil industry, we began supporting it in 1917. we did that because we wanted to grow our car industry. to do that, we needed the fuel. in the 40's, we supported the nuclear industry because we wanted it to grow. i was proud to be a part of the first group when i was at the white house for a nuclear power

plant in georgia. why are we not supporting the industry's up-to-date and creating jobs? infrastructure has long been a place where in difficult times, presidents have turned to create opportunity. i think this president has tried, for the recovery act and other retina sums, but or former government does require the cooperation of a congress. it feels like there is a tremendous opportunity sitting right there for us to invest in our infrastructure. we were responsible for funding sewer plants, funding drinking water. there are lots of opportunities. we have an aging infrastructure in this country. we could be investing in that and creating jobs. >> thank you. letty open the floor. -- let me open the floor. someone will bring you a microphone.

>> thank you. i am a recent graduate of johns hopkins university in their master's program in our mental science. -- in in viral science. -- environmental science. [unintelligible] if we keep building roads, shopping centers, office buildings, what is our future if we keep destroying the environment? we are witnessing the sixth greatest extension on the planet, which is basically caused by us. where does renewal energy fit into that equation? >> does building in danger the environment and how does renewal or energy help? >> the way to think about growth is to pick about it in a sustainable manner.

it is not as if we are not going to -- how do you grow sustainably? there are many good examples of how to do that. i would just turn to florida where when i was secretary of the environment for the state of florida, we looked at the very last permit for disney world. they wanted to build the final theme park and animal kingdom. one of the things that was happened was wetlands would be impacted. we were able to minimize the wetlands impact. for those that were impacted, there had to be mitigation. that -- rather than get the engineers to build us a new web tland, we worked with disney and the nature conservancy to restore enwetlands.

we took this area that starts in orlando and goes out to the keys and restored the headwaters. ecological functions had been taken out. we returned to a functioning part of the ecosystem. there is lots of opportunity for restoration. when we think about growth, we should think about it in a sustainable manner. we will not stop growing. i have good friends in the environment committee. some of them are for no growth. i do not think that is the answer. the answer is how to do it in a sustainable manner >> thank you. right here in the front. >> thank you. i was up with mit and i was talking with a professor who was

supporting an interesting idea. i see a lot of what you are saying. why don't we just help these people? why don't we finance technologies that will help them? what has been talked about is why not just raise the price of fuel as a tax and then distribute that tax throughout the registered voters? that way, whoever uses energy would use more of it and will wind up with less money. those that use less of it will wind up with some income. you would start seeing a change of behavior working in tandem with the changing technology as opposed to all the money going to changing technology but no behavior of change. >> i think that the congress is

very unlikely to embrace an idea like that. yet all of the republicans signed a pledge against ideas of that sort. having said that, is simple economics. push pull. when you talk about using tax credits and creating financial terms that encourage investment in new technologies, that is one part of the answer. the second is to create the opportunity in demand for those technologies. something like renewable portfolio standard would be a hugely important in terms of creating. the change in behavior. i think it is important to know that many of the renewal portfolios standards include

efficiency. one of the things utilities can do is incentivize efficiency. we have a long history of utilities not doing that because the way it was regulated. i think that is changing. certainly, one of the things we are finding is that the more access to information that people have about their energies, the more likely they are to use less energy. you have the companies out there that are really moving into this space, whether it is a power plant in virginia providing consumers about comparisons with neighbors or -- i think the hottest selling item in an apple store is a new thermostat. if you have not checked it out, it is cool. i want to buy one.

>> 9 terms of revenue but numbers. we talked about christmas gifts. it is cool. rather than fighting with your spouse or children over setting the thermostat when they leave, it learns to work patterns. he knows when you are coming and going. it will adjust your thermostat depending on your patterns of use. >> let me ask a quick reaction. how much do you think cheap massive natural gas in the u.s. is undermining serious policy around renewable energy development? this is the thing i hear a lot

about. the various factors have changed the equation from selling drugs to others -- -- solyndra to others. the u.s. might now be a superpower again in energy. do you think that has inhibited investment? >> not at all. i think the thing that could come -- that could come to pass. what is inhibiting it is a production tax credit and the uncertainty around it. secondly, the natural cef's. those are be dramatic in terms of supporting the roby industry. -- supporting the rigell or energy.

>> what tons of outcomes would you find encouraging? >> 20 years ago, there was so much enthusiasm and a global commitment to these issues. the world is such a different place today. i think we cannot reasonably expect the same kind of -- if you look back, it does not feel so bold but at the time it certainly seemed bowl. i would hope that there were certain measurable concrete steps that the world will commit itself to. it may not be as big as perhaps they once could have been. nevertheless, they are measurable and concrete, i think that would be good. >> thank you. any final thoughts about the renewal energy sector? >> many of you are much longer

students of washington dan i am. i am encouraged that there appears to be an ongoing dialogue in the senate around the clean energy proposal. maybe i am being overly optimistic but i hope that as people move into their reelection mode and senators and house members -- that they recognize that energy is not a democrat or republican issue. >> ladies and gentlemen, carol browner. >> also at that conference, a senior official at the energy department's advanced research agency described efforts to harness the power of certain organisms to produce fuel. biofuels. this is just under one hour. >> we are going to be talking

about biofuels in this segment. let me introduce the members of my panel. a deputy director for technology at the energy department's advanced research project. he is also a successful entrepreneur, the policy adviser and numerous institutions, and has worked with more than 100 scientific papers. next we have the head of while refineries at dupont. the part responsible for second- generation biofuels programs. chemical engineer by training.

then we have the founder and president of an agricultural biotech company focused on the efficiency of conversion to energy. he is the author of many research papers. i wanted to get the ball rolling by asking each member to give us a brief sort of overview of where the biofuel sector stands. i want to say the context -- what i feel should be the context is widespread skepticism in the rest of the world about the contribution biofuels can make to this program. you probably have noted that biofuels do not get a good rap. i want to ask questions. i want you to invite each member

-- i want to invite each member of the panel to give their take on it. can biofuels address a problem? highlight any sort of technological developments that will change the way we perceive the role of biofuels. >> if we take a broad view of biofuels and do not restrict ourselves in what we mean, i think it is inevitable that biofuels play an incredibly important role in the coming years. for the simple reason that energy densities are some much higher than they are from virtually any other storage media.

the best batteries we have our 200 watt per kg. fuels', 13,001 hours per kilogram. the enormous energy densities available from liquid fuels mean they will stay part of the puzzle going forward. the name of the game is to take solar photons and a store those in a way we can use them to enable transportation. if we are going to use carbon based liquid fuels, you have to make -- carbon-carbon bonds. i think if you add all those pieces up, while fuel stay an important part of all whole energy puzzle for a very long time. >> thanks. >> biofuels is already very

important. we all know that in the u.s., it is 10% of gasoline supply. it represents a tremendous reduction in oral -- oil. it is part of the economy. >> it already does. what can we look forward to? i do not think there is any single technology. i think it is a continuation -- we will see our ongoing efficiency improvement in productivity improvement along the line of what we are seeing through many years of development and petroleum. the second, we will see a host of new technology is that will allow this sector to make use and give the benefit to more rural economies and communities out there. for their benefit us.

i do not think that a single technology will do that. i think it will be technologies involved in farming, harvesting, plants, biology, supply chains. any tool business is a supply chain business. as we see in conventional efficiency today versus a few years ago, we will see that into new technology. >> we will see technical -- >> we will see technologies in thatrent fields -- fuels' can bring a renewable energy to the market in a way that is more consistent with the infrastructure that is there. >> there is different technology that can come into play to make biofuels more important. >> there is a buzz about butanol. explain to people how you actually make the you know.

-- butanol. >> we welcome butanol. this -- there developing technologies to produce it the same way they produce ethanol. commercialized by retrofitting ethanol assets. what does butanol do? it is efficiency of compliance. it does -- it allows fuel blenders to produce a fuel that has twice the amount renewable energy in the same gallon of fuel. to do that in a way that has the same oxygen. as you are driving along the road, your car will see a 16% butanol blend.

they will have the same oxygen n and it will run the same. while at the same time, the ethanol producer can deliver more renewable energy to the same tank. all of the uses associated with that get pushed out. >> so butanol replaces ethanol in this -- >> it allows them to make a field that simply works better all the way from the beginning from the change easier to make in it a blend for butanol than it is for ethanol. >> what is your take on with this segment stands? >> you have to put it in context. the current ethanol industry

started growing in 2003, less than 1 billion gallons up to 15 billion gallons today. it is competing against this huge capital infrastructure of the current liquid fuels market. the industry that started in the early 2000's largely at that time was bucket chemistry. trying to push an additive at the time. it does relate, a long way. it is setting a foundation for what i think will bring more technology and more efficient feels. it is going to play a bigger part of the infrastructure in the future. >> i am not an expert but i have tried to do a little reading for

this session. one of the things i found was the controversy in technical circles about what you might call the energy equation. some people who are skeptical argue that it requires more energy to make biofuels than they deliver. i would be interested in hearing you respond to that accusation. >> i think if you more broadly told the economic community, it is not that controversial. i also think you have to keep in mind that there is a distribution throughout the industry. you have these reports that come out that say this facility has a terrible energy balance. it is not representative of the industry.

it does not have an aerobic digestion or use natural gas. there are all kinds of issues. it may not be on local access. the industry is composed of roughly 200 different facilities. in the 20008-two dozen 9 period when it was very hard to make money in the industry, there was a real thinning out of bed facilities. >> what do you mean by facility? >> a processing facility. >> like a refinery. >> exactly. but because of that, a lot of the facilities that were not efficient or productive were

largely acquired by groups that had more technology and could build the infrastructure to make them more efficient. the industry today is considerably better than it was five years ago. >> the question is really only good for corn grain. >> ok. there is still the question of how that balance compares with competing fuels. if youake an optimistic view about the energy equation, biofuels, a net positive, you still have to compare them. are they not at a disadvantage? >> compare them to what other technologies? they are a disadvantage to fossil fuels. we are talking apples and oranges. >> i went to give people a sense peacoat it depends where you are. -- i want to give people a

sense -- >> it depends where you are. >> the magnitude is not at the margin. >> i really think there is a disadvantage. if you make corn ethanol, you use a certain amount of fossil fuel. if all i used fossil fuel, i still use more energy -- i still produce more energy than i consume. that difference is very large. these facilities will be absolutely 100% positive in that different. i think that is completely overstated. >> just walk us through the factor. what is the difference that technology makes as opposed to

traditional -- the less sophisticated ways of generating energy been been >> it is not necessarily about sophistication. corn ethanol plants are sophisticated today operated very well in a very disciplined manner. they bring really top notch science to play, including great enzymes that we sell. >> i did not mean any disrespect to the industry. >> the difference is the feed stock that you start from. as opposed to starch or sugar. that gives a number of benefit. it gives the benefit that there is less apparent competition with food and feed. there is less of that -- you can make benefit of some of the residue that farmers cannot use.

in some settings, it is something that needs to be removed for yields. it also allows a number of rural communities, for instance in particular, the south to participate in biofuels and benefit from it, to have plants in rural communities. they typically buy all of their materials locally. i think it allows other communities in the midwest to benefit from biofuels. >> bouquet. did you have something to add -- ok. did you have something to add? >> i think we have to zoom back the lens a little bit.

remember, the name of the game no matter how you do this is to convert solar photons into energy for transportation. there are approaches to biofuels that do not involve focus and this is as well. there is a whole range of technologies that are being explored. it is not monolithic. >> name one that you think is particularly exciting. something that you are watching that you think might have real potential. >> certainly, we are exploring the use of non-photosynthetic organisms. are at their organisms that can scale? can you do them at cost? i do not know the answers to some of these questions. >> it is a very active area of research. i want to come back to something that you said at the beginning that i would be

interested to hear. i wonder if you were saying that as it were -- betting on biofuels is a bet on the failure of what many ppeople might regard as a leading alternative, electric vehicles powered by nuclear power. if climate change is the thing that we are most worried about, if that is the impending catastrophe, we have a proven technology to replace a great deal of our fossil fuel-based energy production. provided factory technology comes along fast enough, if that happens, the liquid fuel constraint it goes away. you were saying at the beginning that we have to have liquid fuels because we are so far away

from an effective micro storage technology. we cannot get the transportation sector of of liquid fuels. i want to ask you to elucidate that constraint. is that out of the scope of electric cars? >> they are coming on. i am absolutely not betting on the failure of the electric fication of the transportation sector. the vast majority of people use their cars less than 50 miles per day. there are a number of challenges. besides just the battery technology. there is charging infrastructure and all sorts of issues. it seems to me a stretch to

imagine that we can achieve the energy density that we do in liquid fuels with batteries. right now we are at 200 watt per kg. 13 and a half thousand isn't a big, big belt the. -- 13,500 is a big delta. you are not going to electrify flight anytime soon. i think it is a false choice to imagine that it is liquid fuels or electrification. >> any thoughts on that? >> i upgrade. i agree. we will continue to rely on petroleum. there will be multiple solutions. electricity will play a role in that.

i think there will be a time line that will be more conducive to buy feels that electrical. we are not betting on something at all. we have a sizable and growing business. we absolutely count on a selected vehicles and the use of that electricity to grow them then we are not in the business of spreading our bets and figuring out where we are going to lose its. i think it will play a role. biofuels can come quicker and in bigger scale using existing infrastructure. therefore, it is more important in the coming years that electric. >> i am guessing that you agree. >> i do. i think electrification will really complement existing biofuels and the future. if you look at how many electric

cars are coming on today, it is at the tens of thousands scale. this year, almost half of the u.s. domestic produced cars were flex fuels. there are millions of them out there. if you were to go down an electrification route, it would be a long time. >> to go back on something you said a moment ago. it was interesting and obviously correct that the biofuels having to compete against this energy delivery infrastructure but in a way it is the cost of making biofuels and interesting option. cuts both ways. that is why this promise of liquid fuel precisely because of that huge sunk cost and liquid fuel distribution.

>> yes. >> let me ask you about policy. maybe this is another way of reframing a question i have already put. biofuels are heavily subsidized in the u.s. and heavily supported as a part of this alternative energy drive. how is one to think about it or judge value for money? governmentose the moved away from a pattern of peace male subsidy, support, and regulation and it adopted a uniform tax regime or you tax climate change at the pump, on the lexus of the bill, and that provided a level playing field.

could biofuels fly in that regime? >> yes. if we continue to change policy, and policy stability is very important, if we continue to change policy, we will end up with nothing. wouldn't it be better -- it would cause uncertainty and that uncertainty would make companies like ourselves and others shy away from this challenge. i agree with you. there could be ways that one could envision policies that would be theoretically perfect or simply better. i think the likelihood of a change in policy will slow down progress quite a bit. >> on the other question, just suppose for the sake of argument that we have a carbon tax regime

that provided in effect the same level of subsidy to every unit of carbon abatement, carbon fuels would be competitive in that regime. >> yes, definitely. >> item going to open this up to questions -- i am going to open this up to questions from the audience in just a minute. i have one other question and this might go to the issue of where this technological frontier lies. one of the issues of biofuels it is it requires land. a lot of people argue that the more important scarcity in the world is land for food productions. with food prices rising in developing countries, it seems an odd decision to set aside land for the production of biofuel feed stock.

how do you respond to that argument? >> the solution and the answer is one of productivity. the u.s. farmer is an extremely productive, the most productive in the world if we compare their productivity of yield per acre to other farmers in the world. largely this is because of techniques and the quality of seeds, the access to genetic and modified techniques. it is a matter of productivity. with increased productivity and the development of plants, in your sense plants, that can thrive, i think this issue of the use of land is fairly small. and quite manageable. and not what wills tand in teh

way of a large scale deployment. >> which would be presumably we need more of this, we need more of this. >> even in that case, there are millions of acres available that are not being cultivated right now. low productivity that can easily be more productive. >> i think some of those criticisms are a little misplaced. if you look at the studies that have promoted this idea, there are a few of these issues. if you look at the data that exists out there, fao data on world cerreal production, we use a lot less land than we did 50 years ago. in fact, you could say if we

produce all these more biofuels, aren't those two things correlated? it is the increased productivity on that land within farming. it has allowed more land to be taken out of production. there is quite a ways to go where you can bring back land in. i think the point about this question is how we do it responsibly and how we manage land use. it is a question that should be specific to everything. urbanization is probably the biggest driver of change. may be concerns about or rules about how we use land and how we bring it into production or take it out of production would be -- >> do not require the use of -- we are working with dupont large project to look at the giant

kelp farmed in the ocean as a feedstock for by officials as well. very high productivity, no land, no water than they >> where does that stand? >> if we look at commercialization of biofuels, new biofuels, that is not one we would look at the immediately. i think there is opportunity there but it is further out. crop residue, energy grasses that will come to commercial first. >> one last point on this overall policy setting. now i am trying to be more constructive. i hear what you are saying about the difficulty of planning these very farsighted investment strategies when the regulatory environment is in a constant state of flux. it must drive you guys nuts.

is there a better approach to this? are you pleading no more change for the time being? would you recommend a different approach? >> it has not been in a constant state of flux. the renewable fuels standard from 2007 has been there for so many years. >> but that is only part of the regime. >> but it is an important part. it is a part that has worked. when that law came out, the u.s. was not the leader in the world in biofuels. since that law, the u.s. is in conventional ethanol and also the development of the second generation of biofuels. it has really started the development of these new technologies. i do not think it has been a

constant turmoil. funded by private capital, we have some 14 or so billion gallons of capacity. my concern is more about not having the patience to let this thing continue to play out which i think is on track to success. companies that have experience and a track record of commercialization think about commercializing technology like our own, companies like bp, agrivida, that are in this are in this for success and know can do this. we have to now let this play out. private industry has made a tremendous investment and can commercialize this and will. we have to have the leadership to stick the course. >> michael, is that your take on

this? you are an entrepreneur in this business. how on earth do you frame these choices in an area where, all right, i accept what jan has said, but this tremendous uncertainty about the regime going forward. >> sure, there is some uncertainty and we would hope that the current legislation stays in place. we think it is critical for the industry. if we want to move toward renewable fuel infrastructure, this is something that we have to support. if we want to use every last drop of oil in the ground, maybe it is not something that we are interested in. i think there is still a really active debate going on at least in the media about climate change and what is driving these things. if you do not believe in climate

change, i think most people especially today believe in jobs, and agriculture is america's great manufacturing industry. and a lot of jobs and potential, keeping money in the united states instead of sending it overseas would be a good thing. for all those reasons, even if you are not in the climate change camp, it is a good reason to support this going forward. i do agree that newer technologies are coming and will make biofuels much more competitive in the future. >> ok. all right then that now to questions in the audience. tell us who you are. >> this is related to biofuels but a slight tangent. could you talk a little bit

about the work being done in turning waste into energy? significant investments have been made in some pretty interesting technologies in that area which would give us the land that is being used by landfills, give us that land back. could you talk about that, turning waste into energy? >> this is an area that has been explored. we are not investing actively in that right now. really what it comes down to is all forms of waste. there are some other challenges and a lot of contaminants that are problematic. it is potentially a very interesting source. we are not investing in a at the

moment. >> is this something that you are looking at? >> if you consider agricultural residue waste, then yes, that is our sweet spot. but we do think the kinds of things we're doing at agrivida could really improve the productivity per acre 50% to 100% using the residue that is normally left on the ground and in some cases groups are starting to remove it, burn it, or landfill it. >> that would be a huge increase. even if this is not your business, you are an intelligent observer of these technologies. what do you make of the prospect for using waste?

is that worth exploring? are you skeptical? >> i think it is totally worth exploring. instead of recycling everything, if you could convert it into renewable energy, that would make more productive material. i think groups should invest in it and look at it but is not something that we are actively working on. >> what about dupont? >> we are going to -- we know a lot about corn through our premier business. that technology can be applied to municipal solid waste later on. in my view, that is a very inappropriate thing to do. when you drive by landfills,

they are large and it would be good to do something useful for them. it is more of a solution to the landfill than the energy problem. in the big picture, they are not very big with not big enough supplies for raw materials. since they are there any way, it is something -- >> that is very interesting. we will take a question down here at the front. thank you very much. >> i am with the naval postgraduate school. where do you stand on algae? [laughter] ha >> i do not have a position myself. >> we have spent some time looking at it. we are looking really at next

generation, photosynthetic organisms that produce fuel molecules rather than growing algae as a source of biomass. at this point, there would have to be tremendous advances in reactors before that technology can likely be economically viable. as long as -- right now, you have to grow the organisms over an area and i have not seen any models that show that being close to economically viable. until it is possible to harvest photons over an area and grow organisms in volume, it is a pretty tough plot to see how you can make this a viable. >> ok. right here. >> i would like to follow up on the municipal question and get

your take on that in regards to waste water to energy. we have a source in the bay area. other materials down in orange county are creating hydrogen fueling stations. is that an area that you are interested in? >> if you look at municipal waste, it is a relatively small opportunity. i think most of the energy content in those municipal wastes are still in cellulose spending you have the same problems that you do with landfills. with municipal solid-waste.

you still have to find a way to do the constructive -- you have the added problems of contaminants that make it difficult to do things. >> i am interested in this line of questioning. i think you alluded to this yourself a moment ago. the idea that there are environmental benefits associated with these innovations. they are unlikely to make a significant contribution to the energy problem because they are not at sufficient scale, but that does not necessarily rule out those innovations on other grounds. >> absolutely. >> let's get another question. >> the american security project. you talked a lot about ethanol and car transportation, service

transportation, but you have not talked about jet fuel. my question is regarding what is happening on drop and replacements for jet fuel. i know the department of defense is doing a lot of work to promote some sort of biofuel jet fuel. when is this going to be a possible replacement? this is important because unlike cars with batteries, there is no alternative to an energy-dense liquid fuel with jet fuel. thank you. >> do you have anything on your agenda? >> i was going to say that there are a number of companies pursuing that opportunity. it is not in our realm. i do know that groups are looking at a. there has been this whole discussion around the navy buying by you feels at a higher

cost. >> how significant is this in terms of scale and our energy problem, finding an alternative to jet fuel? >> it is 10%. it is a very significant problem. there is no alternative for some fraction -- vehicle transportation electrified. i do not think air transportation is going to be electrified anytime soon. if you are talking about dropping replacement, there is really no such thing as a fuel molecule. we have a number of our performers who are pursuing those things that could go into that sort of process for exactly that reason, that there is no alternative. there is a big need whether you

are talking about commercial transportation or the military. >> first, to commetn on the waste of energy. the technology already exists and is used in denmark, sweden, and austria. 60% of heating. a very large fraction of that energy androm heating. sweden is the highest percentage of recycling. my question goes to eric and jan. on electric fuels and these future technologies, what do you see for the potential for

synthetic biology and creating organisms to do some of these molecules that we are talking about? is there a risk looking back at previous e u-u.s. ovwer gm that there is a government aspect that needs to be looked at? >> i think the potential is enormous. there is no doubt that the potential is enormous. the things that we can do today in a number of organisms that we have worked with in the past allowing the construction of complex molecules is absolutely extraordinary. i would say that for the production of fuel, even more important is this idea of metabolic engineering. it is one thing being able to make a molecule. it is another making it at $70 a barrel.

it is an extraordinarily important component. with regards to the control of genetically modified organisms, that is obviously something that has to be addressed. i think the concerns are widely held the organisms are deployed. if they are fully contained, it is much less of an issue then if they were genetically modified photosynthetic organisms that are going to grow on several thousand acres. i do not think there is a simple answer to your question. i would tell you that our performers that are preparing genetically modified organisms worry a lot more about organisms competing. they are inevitably unfit for the wild organisms but an important issue that needs to be addressed.

>> if you challenge a scientist, they will be able to make just about any molecule with a microorganism. the challenge is to do a cost effectively, very low cost, and fit it in a supply chain that works. that is why in collaboration, we work on butanol. today, we have a molecule that we can make with the same carbon yield as ethanol. that stuff works. it is attractive. it is not very, very challenging like making a jet fuel or something, microbiological e. on another hand, it is a molecule halfway between ethanol and gasoline. it is a molecule that works very well in the value chain. i think you have to pick these

targets pragmatically and pick them so they work well with the infrastructure and work well as a field. you do not want to put yourself in front of a target that maybe practically almost invisible in the coming years to achieve. >> any other questions from the floor? yeah? >> hi. you guys painted a pretty rosy picture of biofuels and their progress, but the technology supposed to be here now in significant volume has not materialized and the epa keeps rolling back the number that is going to be produced. what is the problem with it? why are we finding its such a tough challenge? what are the hopes of resolving this challenges? >> i do not think there is a particular problem.

the visionary piece of legislation laid out and attainable vision that has a great impact on the rural economies of this country and the energy independence and gets terrific climate benefits. like many visionary things, it might have been optimistic. companies like the ones i mentioned before, dupont, bp, companies that have a track record of developing these difficult new technologies and commercializing them, they knew this would take longer. the law also foresaw this and there are building tools for which the epa manage and can bring this back. in the meantime, a number of projects, large-scale and commercial, are in construction. they are very close to construction. it is not a problem as much as

-- if you look at the technology that was developed and commercialized, this really goes at a high-speed. we have developed new micro organisms and processes. we are putting these at large scale and we have large test facilities. we are now rolling this out. i think this is very realistic and happening. we are optimistic that it is going to be realized. >> do you want to follow up? please. >> what is the more realistic time line for these fields showing up in significant volumes? >> 2014. i think after that, we will see a quick run-up in capacity. >> you look like you have

something to add. >> i think it is considerably more difficult than what people had anticipated. you see that in the difference of what is being produced versus what is being project it. there are a number of facilities being built. if you get into specifics of the things that are challenging for real growth, these facilities are not like other biofuels facilities. they are highly technologically en abled and cost a lot more than that. a typical facility, maybe $1 or $2 per gallon -- the first facilities are quite a bit higher than that the ending $7 to $10. >> the first facilities were quite a bit higher. >> that is true.

there is a number of things that groups are working on to get the costs down to make it a compelling investment opportunity to enable the kind of growth that you saw in the corn ethanol industry when it really got going between 2003 and 20008-2009. >> i think the sting in the question was this technology was oversold. would that be an unfair criticism? biofuels letting us down relative to the initial expectations? >> if you look at the rfs and the total volumes by fuel that it called for, it is very largely met. all of that is met. the only place where there was optimism was on celluloses.

>> let me come back to the issue of the policy-setting. not so much about biofuels now, but our wider energy strategy. the key to solving this problem is obviously innovation. there seems to be a big strategic policy question for innovators. do you do it by directly supporting innovators through subsidizing r & d? or do you do it by creating profit opportunities for particular technologies? i know what you are going to say. "you have to do both." a balance has to be struck. i hear the criticism, that the u.s. has made a mistake putting too much of its money into supporting production rather

than backing earlier stage r and d that might solve these problems. what is your take on that? >> you know, again, you have to be careful. you are almost again talking apples and oranges. i think you have to remember that the sorts of things we are talking about have very long time lines and take a long time to make it to market. no doubt there has to be more investment in early stage technology to create an array of possibilities for the marketplace to make decisions later down the road. i think closer to market, we need price signals to help industry before they become fully mature. >> in your view, the balance is right. >> i have no comment. [laughter]

>> what do you guys think about that? then we have to finish. >> indeed we have to do both. we still have some of our own money at play. i think that is important. those are fairly small grants and fairly small funds that the government uses to sponsor certain types of research and development. i think that is a very appropriate role for government and low-cost. at the same time, regimes like the rfs, struck jurors for stability in markets and predictability -- in the end what you do as a private company, i know your question was not about ethanol, but you

really have to take a basket of risks and you start to knock them out. the technology risk we have for ourselves put to rest we are comfortable with that. we now have to do the supply chain risk. you really want that basket of risks to be low enough to invest. the regulatory uncertainty is a part of that. what the rfs does is create certainty for that market. >> do you have anything to add? >> it really depends on what the specific sector is and how close is to market. if you are early, you need much more funding and support. if things start getting traction with in the marketplace, you need better infrastructure for it deployment. that is where you went private

funding coming in to take over and the government stepping back. >> we are out of time. please join me in thanking this panel. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> deputy energy secretary daniel poneman defended money spent on renewable energy projects and called on congress to extend renewable energy tax credits the expiring at the end of the year. he spoke at the conference hosted by "the atlantic." this is 30 minutes. >> now it is my pleasure to introduce our final keynote address of the afternoon. we have with us today daniel poneman, deputy secretary of energy of the united states. he was nominated to be deputy

secretary of energy in april 2009 and was confirmed by the senate in may 2009. he also serves as chief operating officer of the department. he served as special assistant to the president and senior director for non-proliferation and export controls of the national security council. he also served as principal of a group for eight years and is a member of the council on foreign relations and has been published widely on national-security issues. received distinguished writing on american diplomacy. please join me in welcoming deputy secretary daniel poneman. [applause] thank you. >> thank you for the kind introduction. i was delighted to have anything

to do with "the atlantic." i am a student of history. it is pretty high bar to measure up when you think of your predecessors. so, i will not aspire to their literary elegance but i will try to offer commentary on things that are as important to our era as the issues that eliminated the magazine in those years in the middle of the last entry back in 1857. energy. a no more important issue than we can think about in terms of what is going to shape our future than energy. i am talking in terms of our prosperity, our environment, and our security. while there is no silver

bullet, i think it is clear already come and the president has made clear, the one thing we need to do to succeed in this moment is to diversify our approach. we have committed carnation and are passed to end all of the above strategy and then we are pursuing it with great vigor and you have seen a great deal of progress over the last several years. we see a oil production at levels not reached in nearly a decade. we see our oil imports have declined under 50% for the first time in many years, and our oil products exports have gone from deficit to surplus for the first time since 1949. the other changes we have seen are also extremely impressive in terms of natural gas where our production has led us to the number one place in the world in terms of global production of

natural gas. in the area of nuclear energy, we have seen the first commercial nuclear power plant licensed in three decades down in georgia. we have made important headway in addressing one of the critical issues that has been a serious concern for anybody interested in these issues, and that is what to do on the back end of the fuel cycle. the president asked to assemble a blue ribbon panel led by a very distinguished americans such as a former congressman and a retired lieutenant-general. they put together a commission that has come up with a very sad of responsible recommendations on how to deal with the critical issue of the fuel coming out of nuclear reactors. i would also like to thank the members of congress and others who are taking a very hard look at that steady and trying to

figure ways that the congress can take those recommendations and implement them in the form of legislation. energy efficiency is obviously a critical priority for all laws. at the secretary often says, energy efficiency is the fruit that is lying on the ground and then we can save enormous amounts of money came -- lying on the ground. we can save enormous amounts of money. in fact, we can look back at the satisfaction in recent years to see the real progress we have made when you take into account the cooperation between the department of energy and hud, over a million homes that have been weatherized. you can look at the better buildings n negative. we have 1.6 billion square feet under rules that have committed to reducing their energy usage by 20% by the year 2020. every day helping americans

save energy and money in bank because of the largest investment in history in clean energy, we have nearly doubled the amount of energy generated from alternative sources. last year, at the united states reclaim the mantle as the leading investor in clean energy around the world. i am going to focus my remarks on that last area. the president has said it very clearly. we have to out-educate and out- and evade the rest of the world when it comes to clean energy. this is not an area that we can afford to leave behind. according to the international energy agency, over 80 nations have clean energy policies and it is a competitive world out there with countries such as

china, germany, italy, and many others. the good news is that the investments that we began under the recovery act are already making returns, not only keeping america competitive, but also creating opportunities for new industries and jobs for american workers. for instance, the recovery act -- 20,000 projects under written including the world's largest photovoltaic farm, one of the world's largest wind farms, and many other projects. my colleague was just here a few minutes ago. one of the real legacies of this administration is a project that has already done an incredible job of seeking to break to technologies in a wide area of

biofuels, critical materials, and more. what is very important to remember is that it is a seedbed of technology investments but it also invests private capital. we are trying to coax capital in off the sidelines. the 11 projects last year funded to the tune of about $40 million of secured $200 million in private capital to take those technologies forward, including companies such as general compression which is developing field-free storage technology to enable low-cost gri stored ridge and help make renewable power fully dispatchable. the company received a small grant to test its technology. they received over $12 million in additional funding from existing and new investors.

there is also a company which in partnership with our national laboratory received a $4 million and has now received $17 million. they have developed a rechargeable lithium ion battery which nearly twice the energy density. that is not enough. we are looking beyond specific investments to how to transform our energy economy through mechanisms that will create the right kind of incentives. in that respect,i noted the president's call in his state of the union address to double our share of clean electricity by 80%. we can pass into law the clean energy standard that the president has called for. we need to create a healthy ecosystem with the forces of supply and demand can meet in

the marketplace to help drive transformation. 29 states have already adopted renewable portfolio standards. this is already supported significant expansion of clean energy resources. our own administration has done an analysis showing that a clean standard could increase current projections of non-hydrogen renewable generation by more than 40% by 2025. with the greatest increases in wind and biomass. it is very important to remember that when it comes to a clean energy standard, we are not picking winners or losers. we are putting in place a mechanism that will provide a market draw for thos eforms of energy that will create jobs and make us more internationally competitive. in addition, the president has

called on congress to extend the production tax credit and to expand the advanced energy manufacturing credit to support american-made clean energy manufacturing in towns and cities across the country. from personal experience, this is working in the field. i went out to iow ato a wind factory a few years ago that were shut downa s a maytag factor, and the buildinhg was abuzz of cable people all of whom were out of a job. one of the four men came to me and said you cannot let this production tax credits lapse. this is what was going to let them lead in a international competition by creating a market here at home and abroad for innovative clean energy technologies. we will unleash the capabilities

of our entrepreneurs and assure that america leads the world in clean energy. i would like to pause for a minute because it is not just about managing demand. we have to make sure that we have a modern electrical grid to support all of this. in the integration of intermittent sources of energy such as wind and solar, the variability in what is going into the grid, you have to manage debt load so there are not in balance is. there are challenges very difficult to manage when you have multiple sources of intermittent energy. the water may be rushing for hydro when the wind is not blowing and vice versa. when you look at the other end, we are looking at the prospect of electrical vehicles being deployed in large numbers that

can both charge and draw fro mthe grid. you are going to have people -- i visited a place down in it really empowers consumers. it has led to a variability in low-usage. it will not do to have sclerotic grid systems to support all of the changes happening on both ends of the grid. investments that we have made under the recovery act, $4 billion of investments, are critically important. much has gone into a better sensory technology being applied to the transmission lines themselves, with all of the we arends of pmu's deploying across the country, we are allowing a better sense of self awareness in the grid, so critical challenges being faced, for example, a massive clap --

blackout, the type that occurred in two dozen 3, can be avoided. where i live, i have to, power company to tell them the light is off. we have to do much better than that and bring a 21st century grid into being to meet our 20th-century energy technology. the other thing we have to consider, as you are increasingly looking at critz supported by dated technologies and computer-driven systems, is that each of these things that are empowering grades -- its could be a security challenge. we have to make sure that the cyber-security challenges are adequately met. as a may have seen a few weeks ago, with strong leadership from howard schmidt at the white house, we ran a series of tests of british security -- grid

security that help identify where utilities were strong. this helped calibrate how we can improve our security so that we can have a grid as reliable as the needs to place upon it. it is a challenging time, an exciting time. nothing is forgone here. the tests lie before us. when you go and the country -- in the country, you see battery being built in kansas city which can power electric vehicles or a new joint strike fighter. when you go to arkansas and c companies that are being environmentally responsible, fluids,ing fracking using clean technology to take advantage of this prodigious new

resource that has tremendous opportunities. when you visit our national labs and see people figuring out lower compression calculations for diesel carburetors to improve emissions and thousands of innovations the side -- is an incredibly exciting time. this is a sputnik moment. just as in in 1957, the 100th anniversary of the atlantic's founding, the united states rose to the challenge. this time, the united states is rising to the challenge. this is something involving people all across this country. it is something that involves our scientists, that engages our industries, that takes advantage of the unique resource that is available in our national laboratories, and we are not doing this in isolation. we are doing it in a competitive world where the stakes are high,

and we can choose at this critical moment in our history either to lead or to follow. we can choose, at this critical moment in our history, to roll up our sleeves and do what americans have done for generations, which is come up with the most ingenious ideas and translate them into innovations, then into products, then into marketshare, then into global leadership -- or weekend retreat. for me, i know it is an easy choice. i know what has led americans to growth. it is not by shrinking from challenges, but by embracing them. just as the founders of the " atlantic" embraced challenges, just as president kennedy called for a moonshot, to send a man to noon and returning to earth, secretary chu has called for a son shot to bring energy solar

cost to the grid. is there -- it will be a reward that will be felt by our children, neighbors, and generations to come, but only if we embrace the task with enthusiasm, fire, and termination. i know that we can. -- and determination. i know that we can. thank you. [applause] i can take some questions if people have -- speak up. yes, sir. i do not know if they are handing around microphones. >> talking about utility skill development -- what about homeowners? we have not talked about homeowners. you talked about palm springs in 1998, when california went

totally blacked -- it was 105 degrees, still 93 degrees at 1:00 in the morning. i am not seeing any development towards having home builders make more efficient houses and put panels on those homes that would spur a r&d and production of panels. where are we going in that direction? >> there is a lot being done at the level of the homeowner. first of all, before you -- we have the weather is asian program that has had over 1 million homes. -- the weather is asian -- itweatherization program that has had 1 million homes. you end up with greater efficiency for refrigeration and air cooling, driving down costs and driving up profits, providing more choice at lower- cost. that is putting money into their pockets.

everybody knows that the most productive investment we can have in our national growth is putting more consumption into the economy, so that works that way. there are also things that we can do in terms of making sure that modest investments that are still significant to a homeowner have a easier way of getting advertising. if somebody might shrink from putting out 2000, 3000 -- $2,000 or $3,000 for a new furnace, if you can do things that will help people, just as you might normally have a termite inspection, have a home energy inspection, you can demonstrate the savings that would be available, where you can -- your money in a short period of time at a rate of pennies per month. there are a wide variety of things. we're doing a lot in the area of

solar, not just in rooftops. it is important to think not only of conventional ways of tax credits that might be available for rooftop solar and -- in a conventional sense, but also things done to take advantage of the fact that, in large cities, you have miles and miles of flat roof tops that are unused. for example, the challenge that people have read about in the newspaper of long transmission lines be needed to get solar energy from open expenses of desert worth miles and miles of mirrors over to population areas. you get rid of transmission issues, problems of disturbing the local environments by trans -- working with hundreds of these groups. it allows rooftop solar to reach a ground-based. secondly, it provides the scale that is critical for solar to

drive the market cost per unit down. there is a whole host of things from micro to macro that will and upbringing benefit to the homeowner. it is happening. those are just a few of the examples. we have been working closely with shaun donovan at hud in terms of these questions, mortgages, refinancing, so forth. i was just down an arkansas talking to home builders about these programs they may benefit from. it is always better to see more faster, but it is happening. we would encourage any further ideas you have about how to do it better. we would be open to that. there's someone next to you. >> i am aat the engineering and

research foundation. in real life, i am a high-school teacher of science. i would love to think that we have a sputnik moment right now, that there is a crumb basketball flying over our country and scaring everybody into doing what we should be doing. but i do not know if i believe that is true. the engineer of the future is going into eighth grade today. what are we investing in our future? the person who will man the windfarms is going to fifth grade today. what are we doing? at the national science foundation, at the department of energy, at the education department, what is our role with this extremely tiny pot of money compared to local educational money? what is -- where is our bully pulpit? where is our leverage point?

you said educate how to innovate. what are we doing? what can we be doing is maybe a better question. >> a great question. thank you for what you in your real life, in addition to your fellowships -- what you do in your real life, in addition to your fellowships. there was a cabinet meeting a few weeks ago. the president said he will focus on education and energy in the next six months. we have got to make stem and egypt -- stem education, science, technology, engineering, and math, exciting in a way it was not what i was a kid. i see anecdotally -- i think this is happening. there are things we can do with our power. there are things as easy as the

solar decathlon. you have seen the looks on these kids' faces. we have to be appropriately modest and humble about what we can do at the federal level, given the vast enterprise. but we should not hide our light under a bushel. we should do the things that we can. in the programs the president has proposed in terms of student loans, what we have done -- the department of energy, as you all know, we used to watch magic school bus when my kids were little. i used to wonder, why did it say sponsored by the department of energy? now i'm understand. with people like you returning to your communities, i think that is one important stream of activities. secondly, there are different things that motivate different people. you know, we could have a long conversation that would

probably empty room about what really happened with sputnik and what it meant, what it should of meant, what it ended up really mean? . it does not matter. what matters is that it drove the u.s. conduct. what you see today, whether you are animated by whatever set of objectives -- if you want this country to be competitive, this is the place to invest. if you want to improve our energy security, this is the place to invest. if you want to see your neighbors get good jobs, this is the place to invest. we are not alone. if you require a competition to get your juices flowing, look at china, look a germany. they are doing it too. this is not something that one person is talking is ever going to be able to effectuate. secretary chu has shown great leadership, but the metal is being picked up all across the country. the best part of my job is when i go to different states, different cities. this is a conversation awakening

across the country. can i tell you the most popular sessions i go to? they are the colleges. these are standing room only. they're talking to each other, forming energy clubs. who knows what the next innovation will come that will be a breakthrough? it could come from one of these kids. you have to keep at it, recognize, do not sugarcoat it. it is a huge challenge, but we do not have to shrink from it either. >> i think we will have to and. -- end. >> i this went to europe. there was a -- there were

[inaudible] you say something about competition. what do we do? >> the question, for those who could not hear, was what can we do to get more women, more diversity into the energy field. i met with the deputy foreign minister of poland to talk about energy. she is a woman. she is deeply committed to getting more women in energy. one of secretary chu's flagship initiatives is the clean energy initiatives. one of these key initiatives is women in energy. like anything else, i would to be the same answer. let's not kurt -- curse the

darkness, but like a camel. we have got a long way to go. thank you. [applause] >> tomorrow, a lack at the obama of political campaign, and a look with david axelrod. they will talk about operation vote, the efforts to target key voters in a battleground states. bill also talk about day-to-day political operations, and we will take a look inside chicago headquarters. tomorrow at 6:00 27:30 eastern on c-span. -- 6:00 27:30 on c-span. >> how you approach book interviews and news interviews differently? >> book interviews is collecting history. in june for news time is gathering contemporary information. >> how difficult is it not to

get caught up in the campaign of -- high of one campaign or another? >> i tried to give people as full an understanding of what is happening in this campaign. it is not that difficult to put your biases to the side. >> how has social media changed your line of work in terms of reporting and betting information? >> twitter is now in primary news source for anybody who covers politics and anybody who pays attention to politics. twitter did not exist for many years ago for all practical purposes. >> perdue university students interview the "washington post" reporter on the newspaper business, what is newsworthy, and the rise of social media. sunday at 8:00 on c-span. >> defense department officials told lawmakers that the u.s. military is on track to hand over power to afghan security forces by the end of 2014. major general stephen thousand

says -- stephen townsend says they are working on training for officers. comments during these armed services hearings. this is one hour and 15 minutes. [inaudible] >> biya receive testimony about resources and strategies -- we will receive testimony about resources and strategist from u.s. and nato forces. the department of defense is represented by david sedney, debra -- deputy secretary of defense for central asia pakistan, and afghanistan.

thank you for your presentation and your service to our country. we look forward to your testimony on plans for training and equipping the afghan national security force, and details about the projected size -- projected size of the force in the near and long term for . many of us just returned from a congressional trip to afghanistan. we traveled to several provinces and met with local leaders, including chiefs of police and a number of provinces. we also had the opportunity to talk to military commanders on the ground, who provided their impression of the level of support that would be needed to create a self-sustaining ansf. it is my hope witnesses today can provide for the context on important issues. i recognize that members of the other subcommittees will join us. in pursuant to these rules, i will recognize these after all

oversight subcommittee members have had the chance to question witnesses. we have today with us our ranking member mr. andrews. i would like to turn it over to him for the opening statement he may have. >> thank you, mr. chairman. i appreciate the witnesses for their services to the country. i want the record to show i'll never fill mr. cooper's shares. make sure to tell him that. thank you for calling the hearing. a pivotal aspect of our country's aspect -- strategy is for afghans to provide their own security. a pivotal aspect of that goal is the training of the security forces and with all stands. no reflection on today's witnesses, but one reason why it is so timely to call this meeting is that, to two administrations, we have had a long history of unfounded and inaccurate optimism on these questions. i know that the two witnesses are dedicated to telling the facts as they see them. i know the committee is dedicated to hearing the facts

as they are. chairman, thank you for this opportunity. >> thank you, mr. andrews. we appreciate your leadership on this issue also. i would like to ask unanimous consent that non-subcommittee members be allowed to purchase bit after a subcommittee hearings have is paid. without objection, they will be recognized at the appropriate time for five minutes. with that, we will begin with their witnesses. we begin with the deputy assistant secretary of defense for afghanistan, pakistan, and central asia. the floor is yours. >> thank you very much, mr. chairman. thank you, ranking member -- acting ranking member. thank you for the opportunity to be here today. the subject, as the two of you have introduced it, we add the administration believe is

exactly on point as a key to success. the key to success in afghanistan is the key of the -- the success of the afghan national security forces. our fundamental objectives have been consistent since president obama announced them in december of 2009. our goal remains to deny state havens to al qaeda, and to deny the taliban the ability to overthrow the afghan government. thanks to more than 10 years, particularly over the last two years, the dedication and sacrifices of our forces, coalition rtners, and the afghan partners and people, we've taken enormous strides toward these objectives. to that and, u.s., afghan, and coalition forces continue to work together to drive down the taliban in their strongholds and build up the capacity of afghan security forces and the afghan government. our efforts remain on track to enable the afghans themselves to

assume the lead for security nationwide by the end of 2014. as we continue to shift more areas to afghan security, and, by the end of this september pull out the final 23,000 surge troops which were returned home at that time, that is all made possible by the improvements in the afghan national security forces. american and coalition forces that remain on the ground after september will facilitate the continued transition of security to the afghan national army and afghan national police, in accordance with general allen's campaign plan. as he said, as i mentioned, the key to the success is the increasing capability and confidence of the afghan security forces and the afghan people in the security forces. the afghan national army and national police are both on

schedule to meet their role for sized by or before october of this year. additionally, i would point out that afghan security forces but is paid in over 90% of all operations, and are in the lead for 40% of these missions. that rate of growth is on an upward trend. as general allen stated to the house and senate in march, the forces are better than we thought they would be, important, and better they thought they would be -- could be. this improved capacity is allowing afghan security forces to assume security leavitt -- the security lead defectively. with transitions already underway, 50% of the opposite -- population lives in areas where the security forces are in the league. that will climb to 75% with trench three of transition, which will be put in place. transe 3 contains a number of

contested areas where the tub and is active. this will test the afghan security forces. the season we are in this year will be the most significant challenge for the afghan security forces that they are -- but they are more in the lead than ever before. the time for this test is more. we, and a coalition partners, have forces to ensure their success. the insurgency maintains the ability to carry out complex tax. the recent attack on kabul, another in a base -- but those were largely technical and operational failures. in response to the attacks, particularly in cobble, showed the increasing prominence of afghan security forces. in kabul, security forces carried out the action of taking down the forces that attack. we have seen two major

achievements in the last six weeks that have sent a strong signal to the afghan people, to the taliban people, and countries in the region. first, a strategic partnership agreement that president obama and present cars i signed in may -- president karzai signed, that showed that the united states and afghanistan are guaranteed to a strategic partnership that extends 10 years until 2024. secondly, the nato summit in chicago earlier this month was a great success and demonstrated the continued dedication of over 50 nato and other partner countries to support and stability and security in afghanistan. in chicago, i -- members and partners reaffirmed their commitment to complete transition by the end of 2014,

and also, very importantly, to continue engaging in afghanistan after 2014. as nato secretary general said, nato partners will not leave the task undone. will not let afghanistan slip back into the hands of militants, which the vast majority of the afghan people reject. we will finish the job to create a secure afghanistan, secure from our share security. our goal is to ensure that afghanistan is never again a base from which attacks are launched on the united states, our allies and partners. our partners acknowledge that shared goal. of a point to two recent u.s.- afghan bilateral arrangements -- the detentions and special operations memorandums of understanding. they preceded the strategic partnership agreement.

those are critical to demonstrating u.s. commitment to afghan sovereignty. they rely on the increased capacity of afghan national security forces. quite express the successes in progress, i also want to very directly acknowledge that we have serious challenges still ahead. limited government's capacity and corruption continue to plague afghanistan. they limit the affected governments that will be necessary for full transition. additionally, as stated by general allan in his testimony and testimony by other witnesses in this administration, teledyne-led insurgency continues -- taliban-led insurgency continues from safe- haven in pakistan. " we have had indisputable successes, as i am sure all of you aware -- are aware, we continue to press pakistan is on the need for them to take action against the taliban and affiliated groups operating out of pakistan and carry out

attacks on coalition and afghan forces in afghanistan. will continue to work with our allies and partners and our international partners to address these issues. we will keep congress informed of our progress. as i close, i would like to thank the house armed services committee and the subcommittee for the opportunity to appear before you today, for your continued support for our men and women in uniform, and for your support to the afghan security forces. without your commitment to funding and resource and the forces, we could not have achieved the progress of the last three years. i look forward to your questions, your insights. fenty. >> fenty so much for your testimony. we now look forward -- and thank you so much for your testimony. when i look forward to the testimony of major general townsend. >> chairman wittman, congressman andrews, members of the subcommittee -- thank you for this opportunity to appear

before you and discuss how the national security forces are doing. our bottom line is that we are on track to achieve our nation's strategic objectives in afghanistan. is stable and efficient force are major parts of our strategy. to echo what mr. sedney said, the national forces are on track to assume the lead in security by 2014. we remain focused on building a cable nasf of 250,000 that remains a mechanism for defeating insurgency. they have met or exceeded this year's recruiting goals, with the expected combined goal of 195,000 by the end of the summer. the police have reached their goal of one or 75,000 by october. to be sure, the nasf faces

challenges, like literacy, attrition, and shortages of officers. we have provided literacy programs to approximately 90,000 force members each day. this make the force one of the most literate elements of afghan society. attrition continues to be an issue. although attrition will not keep nasf from meeting their goals, it continues to hamper their long-term development. the security ministries continue to implement policies to combat attrition. they are working. attrition has gone down over the last several months. one example is that they recently approved stricter, -- time lines for dropping awol personnel. continue tof nco's be a problem. they are recruiting from their ranks to fill these positions.

the nasf are taking the lead in training their own forces. afghan instructors are providing basic and advanced skills training in afghan-led training centers every day. operation of lake, the nasf is making steady process. the joint command is currently 6% of army units and 62% of the police -- 60% of army units and 62% of police. from january to april, the extent of the afghan-lead operations increased to 59%. in some regions, afghan forces conduct more independent operation then partner ought -- partner operations. the special operations forces continue to grow and increase their operational proficiency. for example, operations led by

them increase from 44% in january 2 to 4% in april. as -- to 54% in april. they will continue to face charges on the battlefield, but the one not face the challenges alone. to support the nasf in transition, we are shifting to a security force assistance model. that puts afghans in a lead, rowland has our forces increasingly assuming a training and transitional period during this period, we will still fight along at an partners when needed, but we will shift into a support role as afghans move to the front. ansf's operational challenges include logistics, opera billy, and confidence, among others. in my own opinion, the greatest

challenge is one of confidence. our agreement to stand with them beyond 2014 has been a tremendous boost to their confidence. the will of their force will strengthen as their leadership strengthens and our capabilities improved, and as they continue to move to the front. circling back to the bottom line, we have at -- we assess that our security strategies, our security transition is on track to have a sufficient and sustainable ansf assume full responsibility for security in afghanistan by the end of 2014. finally, thank you all for the work that youtubers -- on behalf of our servicemen and servicewomen, insuring their safety as they continue in afghanistan. i stand ready to answer your questions. >> we appreciate your testimony. we begin now questioning. allen to begin with mr. sedney.

you said we are in tranche 2 now. you expressed concern about more difficult areas being put into the end. there is a real position now. if you do not achieve the desired results in this transition, whether it is tranche 3, 4, or 5, are the contingency plans? other alternative schedules and goals are not met, in transition does not take place in moving these more challenging areas within afghanistan? can you take perspective on what you believe to be contingency samaras and alternate schedules? >> thank you very much to you and your colleagues for making the trip to afghanistan to speak directly with our commanders,

troops, and afghan partners. in terms of plans for how we are going to evaluate the success of transition, how we might adjust existing campaign plans, the process we have in place is one where, at the end of this fighting season, including after the remainder of u.s. troop forces are returned home at the end of september, general allen and his staff will review what happened over this year. as i said in my testimony, this is going to be a test this summer for afghan security force. it will be in the lead as never before. we will have to evaluate that. at the same time, the third transition will be started, including in some very difficult areas. general allen will have this summer's experience to evaluate that.

he will do that, and he will submit a report evaluating what he believes are the future requirements. rather than developing a host of contingency plans, we are focusing on making what we are doing now successful. we have the review process in place whereby we can advise if there are changes necessary. he will recommend this changes up the chain of command to general madison and the secretary and president. that is the process. you have been in afghanistan more recently than i have. that will not be the case in five days. i'll back out there myself looking at that. as general allan says in his testimony, we are finding that the afghans, rather than doing less well, are doing better than expected. there are some cases where they are not doing as well as we or

they expected, and that is where we are capable of giving them the help they need, but we're also seeing places where there are doing better than expected. we're seeing some very aggressive, i think terry positive things. afghans are pushing to do even more than i think we are ready to. that is a judgment of commanders in the field every day, whether people are willing to do things, -- if we are stretched too far, that is dangerous. if we are not stretch far enough, that can hurt us in a caution our goals. -- in accomplishing our goals. in terms of the issue of the composition of the afghan security forces, secretary panetta, in his formal meetings with the afghan interior defense ministers in april, formed a group where we meet to discuss strategic-level issues related to afghan security forces. they agreed on a six-month

review process to examine performance of afghan security forces, a body weight was conditions might be needed. -- evaluate what transitions might be needed. we look forward to be a new -- being able to come back as the review process is are completed. >> thank you. major-general thousand, we know the majority -- major general townsend, we know the majority of problems in data stability. as we begin to draw down forces to 16,000 by the end of 2013, is that transition going to take place in a way that makes sure that support elements are in place to make sure that special operator scan have what they need as they pursue these operations? the concern is, if it is not strategic in the week drawdown is structured, those special

operators may not have within need and may find themselves on an island. -- may not have what they need and may find themselves on an island. are we taking into account strategically what we need? are we making -- >> yes, sir. as you might expect, we are planning for various contingencies through now until the end of 2014, and even beyond 2014. what we call our enduring presence. plans have not firmed up yet, but the military stability operations and after and local police are a high priority. absolutely, i can assure you that the plan will allow for the proper support of those bands of special operations and

also the general purpose forces on the front where those fights are at. the support they need will be there for them. this is something that is part of our endurance -- and during plpresents plan. we anticipate that after 2014. in our enduring presence footprint, the roby support to those forces. >> thank you. i will move to mr. anders. >> i think the witnesses for your testimony. mr. secretary, you indicated that afghan security forces part is paid in 90% of operations and are in the lead of 40%. what is the difference vitrine being in the lead and participate ing? >> i will call on my colleague here. he is a lot more adept at describing operations.

one of the key things i look at when i look at reports from the uniformed colleagues, when the issue comes to leading, are they planning the operation? not just leaving it in carrying it out, but do they have the capacity to plan, do they execute according to plan? to the have the capabilities to review and see what went wrong, what went right, what to do next time better? >> general, what would that look like? >> i will use a very kind of simple analogy of a patrol. a patrol its emission. they need to gather and plan that mission. when afghans are in the lead, they are planning the mission. we are hopping and advising. a short while ago, every nation in afghanistan would have been planned by an american, a sergeant or officer. when that patrol rolls out the gate, who is leading that

patrol? who is in front, in a command position? a short while ago, that would have been an american. increasingly, and the latest reports -- there in the mid to high 50 range, half of those patrols are now led by an afghan leader with an american leader tagging along behind watchg the afghan leader patrol the operation. the force that is on the patrol , a recent report said 61% of the troops on a mission these days are afghans. that was not the case when i was there a little over one year ago. on the objective, who is giving the orders? who is patrolling the soldiers as they move about the objective? in more than half the cases now, that is an afghan. that is the difference between

aiding and leading. >> can add one thing? >> i want to get the next question. >> what is the difference between a unit that is independent and effective? >> effective with an advisor is a matter of degree. if your effective with an adviser, you are getting a lot of advice. if your independent with an advisor, you are getting less advice. the big difference is who is generating the operation. if an afghan commander is saying, we need to do an operation tomorrow, giving orders to an afghan subcommander, then they are generating the call idea of the operation. that is the difference of being independent. >> is it possible for an afghan unit to be not in the lead but the independent with an advisor? or is that oxymoron a -- is that

oxymoronic? >> i have not thought about this question -- >> if they are in the lead of an operation, are they by definition independent? >> they may just be effected. >> are there any units in the lead to not hit the top two categories? >> gs there are. >> are you concerned that americans and be under the command of the outfit that is not at least effective? >> certainly not. they are partnered and on the battlefield, but there is an american leader in charge of american troops. >> do we have any rates of the attrition numbers among afghan security numbers? are they up, are they down? >> we have data which would be happy to provide to committee. we have some nice graphs. the answer is that attrition is down in the afghan national army and -- and the afghan

national police. i would be happy to pass the wraps up to you if you would like. >> if you would consent to put them in the record. >> ok. >> what is the bottom line now? >> in the case of the afghan national police, a year ago attrition was ranging from 1.4% to 4.6%. in the last six months, it has ranged from 3.4% to 0.5%. >> what is the main reason for attrition? >> i'll defer a little bit of this to my colleague here, attrition are people who enter and leave before the contracts are up. the most common reason is family reasons. people have family problems at home and feel they cannot -- >> my time is about to expire.

i would be interested in the killed in action rates for afghan forces. i hope it is 0 -- what is happening with their killed in action rates? are they going up, down, or staying the same? >> i do not know which way are trending, but i do know that the army loses about twice the casualties that we do. the police have about four the casualty rate we do. >> i offer no glee to that statistic. i just want to know what it was. >> this is very helpful. i appreciate your testimony. >> thank you, mr. chairman. when it general allan was making his statement his statement, he said we need a better way of measuring progress across the continuum, from effected to

independent with advisers, either on a district by district basis or -- in other words, you said that, after the first two, 50% of the population lives in areas patrolled by afghans. i am not sure that was accurate. it may be addressed misunderstood it. some of the metrics you are using to show yourselves -- we need those, too. rob and i were here last week. -- in afghanistan last week. we had a presentation by the afghan commander about operations. it was as professional as anything we would get anywhere else from a person in uniform. it was very impressive.

maybe the interpreter knew what to do -- i suspect he was being interpreted correctly. i can out of that meeting very impressed. with this guy and the fact he will be in charge pretty san -- soon. major general thousand, the numbers we have seen for 2014, the numbers of security forces verses the money that will be needed year after year to fund those -- the money to pay that is, in your estimate, but the afghan community will need to come up with to fund the forces. the forces themselves are not in force numbers. my question is, what are we doing?