“Tackling Future Energy Challenges” Remarks by U.S. Deputy Secretary of Energy Daniel B. Poneman at National Taiwan University Tuesday, December 13, 2

U.S. Deputy Secretary of Energy Daniel B. Poneman delivers a speech at National Taiwan University on December 13, 2011. (Photo: AIT Images)
OT-1120E | Date: 12/13/2011

(As Prepared for Delivery)

Good afternoon. I’m honored to be here today at National Taiwan University, one of the world’s leading universities. Director Stanton, thank you for the introduction and for your leadership at the American Institute in Taiwan. AIT continues to play a central role promoting strong commercial, cultural and economic relations between the people of the United States and the people of Taiwan.

I am pleased to have the opportunity to discuss with you today some of the major challenges and opportunities in the 21st century energy sector and describe some of the ways that the United States and Taiwan are meeting the challenges and seizing the opportunities.

Before I move to the discussion of energy issues specifically, however, I’d like to take a moment to briefly discuss the United States’ approach to the region and our broader bilateral partnership with Taiwan.

As you heard President Obama describe in detail during his trip last month to the Asia-Pacific region, the United States is working to rebalance America’s foreign policy toward Asia. This region boasts almost half of the world’s population, is home to key drivers of the global economy, and is increasingly central to international efforts to address the world’s most pressing challenges, from climate change to nuclear nonproliferation.

This multifaceted effort to strengthen the U.S. presence in the region involves issue areas ranging from trade to security, from democracy to education. It relies upon strong bilateral relationships, as well as upon enduring and effective multilateral institutions.

And while the United States does not have formal diplomatic relations with Taiwan, we continue to enjoy close, cooperative, and broad-ranging unofficial ties that have played an important role in promoting peace, security, and prosperity in the region.

U.S.-Taiwan Relationship

In fact, the United States and Taiwan share a long history of friendship and cooperation based on common values and a shared belief in democracy.

Today, Taiwan is one of our most important economic and security partners in the region. Last year alone, bilateral trade between the U.S. and Taiwan approached $62 billion in U.S. dollars, making Taiwan America’s 9th largest trading partner.

The United States and Taiwan face a number of shared energy and climate challenges. By taking steps now to meet those challenges, however, both the United States and Taiwan will be well-positioned to capitalize on the tremendous economic opportunities in energy in the years and decades ahead.

Both the United States and Taiwan depend heavily on fossil fuels, and in both cases, our reliance on energy imports puts our economic prosperity, our energy security, and our environment at risk.

Both the United States and Taiwan are part of the global energy market, where the demand for limited energy resources continues to grow.

Both the United States and Taiwan seek to reduce carbon pollution from greenhouse gas emissions.

Both the United States and Taiwan are working to learn the lessons of the tragedy at the Fukushima Daiichi nuclear plant to assure that our domestic nuclear facilities are safe and secure.

And both Taiwan and the United States understand the importance of diversifying our energy resources, reducing energy waste, and developing clean energy and green industries for our global economic competitiveness, for our national security, and for the environment.

Leadership promoting the clean energy economy in the United States and Taiwan will help our companies and our people to seize the economic opportunity of the global clean energy market and to benefit from the jobs and industries that go with it.

By working individually, cooperatively, and through multilateral fora like the Asia-Pacific Economic Cooperation – or APEC – we can help to usher in this clean energy future for our economies. As the premier regional economic institution within the Asia-Pacific region, APEC is playing a central role in advancing economic integration and expanding trade between its member economies, while fostering broader growth in the region.

APEC is a significant collaboration mechanism for the United States, for Taiwan, and for many of its member economies, often serving as the central means for clean energy cooperation among APEC’s 21 members. The open markets in APEC member economies and across the Pacific offer unprecedented opportunities for investment, trade, and access to cutting-edge technologies.

The United States is on track to meet President Obama’s goal of doubling America’s global exports by the end of 2014, and exports of clean energy products and services are an important element of this broader effort. American companies are at the forefront of clean energy innovation. And for other countries and economies that are looking to advance their domestic clean energy agendas, U.S. companies can offer cutting-edge energy products and technologies, as well as tremendous clean energy expertise to guide those efforts.

Science and Technology Cooperation

As the United States and Taiwan are working together to meet our energy challenges and grow our economies, science and technology cooperation continues to play a central role in our broader partnership.

Science and technology cooperation has long been one of the cornerstones of our relationship, with U.S. national laboratories partnering with Taiwan to conduct a broad range of collaborative projects over the past 17 years. This scientific cooperation spans multiple U.S. federal partners, including the Department of Energy, the Department of Commerce, the National Science Foundation, and the United States’ Environmental Protection Agency.

In fact, the U.S. EPA and Taiwan’s Environmental Protection Administration have conducted more than 160 joint research and collaboration projects, averaging more than $500,000 each year. And currently, Taiwan scientists and engineers are working with experts from Brookhaven National Laboratory in New York on developing and applying advanced modeling systems that will help to evaluate energy technologies and policies to reduce greenhouse gas emissions.

Clean Energy in Taiwan

So it is clear that the United States and Taiwan face many common energy challenges. But it is also clear that each of our economies and energy sectors is unique, so I want to take a moment to talk through some of the steps we are each taking to address these challenges and to capitalize on the opportunities.

Over the last 20 years, Taiwan’s economy has grown rapidly, transforming the island into a high-tech, energy-intensive society. Taiwan’s manufacturing prowess, technical innovation and economic liberalization have helped its economy achieve dramatic gains, including nearly 11 percent growth last year.

Energy demand has grown almost lockstep with the overall economy, providing authorities with the same challenges and opportunities that developed economies are facing everywhere. Over this same 20-year period, Taiwan has averaged more than 5 percent growth in energy demand annually. The area’s installed generation capacity, which has also continued to grow year after year, has not quite been able to keep pace, averaging slightly smaller increases. As a result, if major new energy installations are not built over the next five or ten years, the balance between supply and demand could fall to dangerous levels for Taiwan’s economy.

The Taiwan Authorities recognize the need to act swiftly and aggressively to meet these demand challenges, which is why Taiwan has laid out a two-fold strategy to create a green energy economy on the island.

First, increase energy conservation. This includes launching ambitious energy efficiency programs focused on promoting energy-efficient technologies and more sustainable practices in homes, businesses and industry.

Second, deploy more low-carbon energy resources. Whether it’s solar or wind energy or safe and secure nuclear power, adding more low-carbon generation capacity will help Taiwan to achieve long-term energy supply stability, while minimizing carbon emissions and supporting sustainable economic growth into the future.

The area is taking these challenges seriously – investing billions of dollars worth of green energy technology research and development programs and energy efficiency initiatives. For example, the Taiwan National Science Council and the Ministry of Economic Affairs’ Bureau of Energy have invested more than $2 billion in green energy technology research and development through the Industrial Technology Research Institute and its Green Energy and Environment Research Laboratories.

In both energy-efficient and clean renewable technologies, Taiwan is, in fact, a global leader in its own right. The area is the second in the world in terms of solar cell output, and it is only the second economy in the world to begin upgrading all of its traffic lights with LED bulbs, which will deliver dramatic energy and cost savings.

Taiwan is also playing an active role in APEC’s energy initiatives.

It is about to take the baton from the United States as chair of the APEC Expert Group on New and Renewable Energy Technologies, which focuses on wind, solar power, and biofuels.

The economy’s support for the Knowledge Sharing Platform of the Energy Smart Communities Initiative that was launched by Secretary Chu and Japanese Prime Minister Kan in November 2010 is also making an important contribution to the global energy conversation. The Energy Smart Communities Initiative focuses on building partnerships between member economies to develop sustainable communities, to deploy smart grid technologies, and to build energy-efficient homes and businesses. Taiwan has taken a leadership role promoting the initiative and is in the process of putting the finishing touches on a website that will enable the sharing of best practices among APEC members.

In addition, Taiwan has also sponsored an ongoing education initiative around liquefied natural gas that focuses on sharing information about how to more effectively communicate the benefits of LNG facilities.

United States’ Investments in Clean Energy

In the United States as well, we are taking aggressive action to remain at the forefront of technology innovation in the growing global clean energy market.

That includes, first and foremost, continued public and private sector investments in innovation and research and development to help unleash America’s unique ingenuity and creativity to develop clean energy solutions for our nation and for the world. Let me give you one example.

Earlier this year, the Department of Energy launched what we call the “SunShot Initiative,” which aims to reduce the costs of installed photovoltaic solar panels by 75 percent by the end of the decade. If we are successful in meeting the technical challenges associated with the deployment of rooftop solar energy systems, this clean, renewable energy technology could become cost-competitive with electricity from fossil fuels without subsidy. By bringing together our scientists and engineers with industry and the private sector, we are tackling this challenge head-on.

In the energy efficiency arena as well, we have sponsored research to develop more efficient building materials, including lighting technologies, windows, cool roofs, and energy management tools. Our scientists and engineers are also working to design more fuel-efficient vehicles through innovations such as lighter-weight materials and improved internal combustion engines. And because there are a vast number of efficiency and conservation technologies already on the market today, we are also focused on building public-private partnerships that can help provide up-front financing to support cost-effective efficiency upgrades.

That’s why President Obama has launched the Better Buildings Challenge – an initiative that challenges our nation’s CEOs, university and hospital presidents, mayors, governors, and others to commit to reducing the energy use of their commercial buildings by 20 percent over the next decade. Just last month, in fact, President Obama gathered with dozens of industry and public sector leaders to announce commitments to upgrade 1.6 billion square feet of building space, which comes out to nearly 150 million square meters nationally.

The United States is also working with manufacturers to improve the efficiency of the appliances and equipment consumers buy every day. Minimum efficiency standards and labeling programs that easily identify the most efficient products on the market are helping families and businesses to reduce energy waste and save money on their electricity bills every month.

In the transportation sector as well, it is important to note that the United States has taken a number of aggressive steps to reduce our dependence on foreign oil, including doubling the minimum efficiency standards for vehicles. Championed by President Obama, the new fuel efficiency standards represent the single most significant step that America has ever taken to reduce its dependence on oil.

In addition, the Department of Energy is investing in ongoing research and development to achieve new innovations in advanced vehicle technologies like electric vehicles and biofuels.

Finally, the U.S. has launched a number of programs to deploy current generation clean energy technologies – from solar and wind energy to nuclear energy and the smart grid.

A series of tax grant programs for renewable technologies has been particularly successful in moving capital off the sidelines given the tight credit markets. To date, the program has led to the deployment of more than 20,000 renewable energy projects nationwide.

And last year, President Obama announced the offer of a loan guarantee to the Vogtle nuclear plant in Georgia, which is the first U.S. nuclear power plant to break ground in nearly three decades. The United States is also continuing to benefit from our existing reactor fleet. For example, the U.S. Nuclear Regulatory Commission has renewed operating licenses for 9 U.S. reactors since the accident at Fukushima.

Nuclear Cooperation

When it comes to nuclear energy, the United States and Taiwan have cooperated for more than fifty years, exemplifying our strong science and technology partnership.

Much of our work has been coordinated through the U.S. State Department-led Joint Standing Committee on Civil Nuclear Cooperation. For example, during the Committee’s annual meeting in Taipei late last month, we decided to explore new opportunities for collaboration at the Nuclear and Modeling Simulation Engineering Innovation Hub at Oak Ridge National Laboratory in Tennessee.

We are also working together closely to launch an education and training program in nuclear science and technology. The recently launched partnership between Taiwan’s National Tsing-Hua University and the U.S. Department of Energy’s Sandia and Idaho National Laboratories will include workshops, internships, hands-on experiences for students and staff, as well as collaboration to develop training curricula and to identify ways that we can better leverage existing facilities, equipment, and expertise for practical training exercises.

And we are continuing to work closely on nuclear emergency preparedness and response mechanisms – a top priority for both the United States and Taiwan.

DOE and the Taiwan Atomic Energy Council have already taken concrete steps to strengthen our cooperation on nuclear emergency management and assistance issues, which will support our response capabilities in the chance of any nuclear or radiological event.

Under an agreement signed earlier this year by the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States, the U.S. and Taiwan are already taking steps to strengthen our cooperation on nuclear emergency preparedness issues. The planned activities under the agreement will enhance capabilities to protect health, the environment and property from the consequences of a radiological incident or event worldwide.

Nuclear Safety

In the aftermath of Fukushima, we are all taking steps to apply the lessons learned to our domestic nuclear industries and to make an assessment on the role of nuclear power in our energy future.

In the United States, we have taken a deliberate, cautious approach. We will closely and conservatively assess the risks to our nuclear facilities, and we will take swift and effective action to address those risks. That is why President Obama asked the NRC to evaluate the safety of each and every one of our entire fleet of 104 operating reactors, and to develop recommendations on improvements where needed.

But as President Obama also made clear shortly after the accident, the United States continues to believe that nuclear power has an important role to play as part of a diverse low-carbon energy portfolio.

To its credit, following Fukushima, Taiwan immediately carried out comprehensive safety inspections of the area’s three existing nuclear facilities. They have completed a first assessment phase of measures and mechanisms instituted to make sure the nuclear generating units are able to withstand earthquakes, landslides and tsunamis. And we were pleased to see earlier this year that the People’s Republic of China and Taiwan reached an agreement on increased information sharing on nuclear safety.

In the international arena as well, the United States has long been a supporter of Taiwan’s participation in international organizations such as the International Atomic Energy Agency, including its participation in technical meetings on nuclear safety and security.

Nuclear Security

But as important as nuclear safety is, we must be equally vigilant when it comes to nuclear security, in order to minimize the threat that nuclear weapons or dangerous technologies or materials may fall into the wrong hands.

That is why we welcome Taiwan’s improvements in its nonproliferation and export controls in recent years, as a responsible member of the international nuclear community. And we look forward to continuing to work with our partners in Taiwan to strengthen security around nuclear materials.

Working closely with the U.S. National Nuclear Security Administration, Taiwan has also been leading efforts to strengthen nuclear security at its shipping ports to better detect and prevent nuclear smuggling. Earlier this year, we were able to announce a major milestone in our Megaports partnership with Taiwan – that is, that after five years of effort, we completed the installation of radiation detection equipment at Kaohsiung Harbor.

The Megaports program at Kaohsiung Harbor consists of three separate, but related elements: first, installing radiation detection equipment; second, providing training to Taiwanese officials on how to operate and maintain the system; and third, educating terminal operators on nuclear materials and their potential dangers.

We very much appreciate the leadership shown by the American Institute in Taiwan, Taiwan’s Ministry of Finance, and the Directorate General of Customs in completing this important project.

Looking Ahead

What I hope has been clear throughout this discussion is that there are urgent energy and environmental challenges facing the United States and Taiwan, and that working collaboratively with one another and through important multilateral organizations, we are taking actions to advance the technology innovations we will need to address them.

But this is not something we can do on our own.

We need the leadership of the private sector to develop these technologies and to deploy them at scale. We need the support of our people to reduce energy waste and adopt sustainable practices in their daily lives. And we need the next generation of leaders in Taiwan and the United States – students like you all here today – to take up this mantle of responsibility and help to solve these global challenges.

For the economies that make these investments and lead in clean energy innovations, there will be tremendous economic opportunity.

Just as we have in the past, the United States will continue to work closely with Taiwan to confront our energy and climate challenges, because we have a responsibility to our children and future generations to leave them a world that is cleaner and more prosperous than we found it.

As America moves to strengthen its position as a Pacific power, our enduring and wide-ranging relationship with Taiwan will continue to play an important role in advancing economic prosperity and enhancing security in the region. The multiple dimensions of our relationship and the strong ties and friendship between our people will continue for many years to come.

Again, thank you for the opportunity to speak here today and I look forward to answering your questions.