FOR IMMEDIATE RELEASE
May 11, 2007
MAYOR BLOOMBERG DELIVERS KEYNOTE ADDRESS AT THE GREATER HOUSTON PARTNERSHIP LUNCHEON
New York City Mayor Michael R. Bloomberg today delivered a keynote address about energy policy at the Greater Houston Partnership Luncheon in Houston, Texas. In his remarks, the Mayor outlined the steps New York City is taking now for a greener, greater future and the three major challenges facing us today: producing more power more cleanly, using that power more efficiently, and creating new, sustainable energy sources.
To meet these challenges, the Mayor proposed setting benchmarks to encourage incremental energy progress now, creating profit motives for reducing greenhouse gas emissions including a market-driven cap-and-trade system for carbon, using performance standards and accountability to pay utilities based on how they generate energy instead of just how much energy they generate, and restructuring energy regulations to make companies’ investments in producing their own electricity economically feasible by letting them sell more excess power back to a utility.
Mayor Bloomberg voiced support for new wind farms and nuclear plants, expanded access to natural gas sites and potential new oil fields, and additional natural gas pipelines and liquefied natural gas projects.
The Mayor also called on the Federal government to match the example of other large countries that are phasing out the incandescent light bulb, increase automobile fuel standards for the first time since 1985, expand incentives to purchase hybrid cars, and replace the current set of ethanol corn subsidies and sugar import taxes which are driven by political concerns with an approach that uses incentives to direct investment to cheaper and cleaner non-fossil fuels.
New York City’s PlaNYC is available online at www.nyc.gov/2030. The transcript of Mayor Bloomberg’s speech today follows:
“Thank you Larry. That was such a nice introduction. My mother would recognize it instantly – probably nobody else. And I am flattered that you’ve all come to see me. There’s another Mayor in town from New York, whose here on a fundraising trip, and somebody said, ‘One mayor from New York is enough at the same time.’ I actually was worried because the most famous visitor coming to Houston is Lucy. For those of you that don’t know, Lucy is the oldest human skeleton, they found someplace. When we talked to Mayor White, he said ‘Well, we got to see, maybe Lucy would take all the visitors away and nobody would show up,’ but thank you Bill for having me.
“Now that I’ve ruined my chance of ever getting invited back, let me say what a pleasure it is to be in Houston – a city that really is like New York in many ways. (And I’m not just talking about the two ruggedly handsome mayors.) Seriously, if you think about it, we are both cities and centers ports and global commerce. In fact, Houston and New York together are home to more Fortune 500 companies than any other two cities in the nation.
“We’re both leaders in health care and research, both have a dynamic and growing cultural community, both our cities have been deeply affected by large-scale tragedies. The people of Houston really did step up in the wake of Hurricane Katrina. I know it hasn’t been easy, but your commitment to helping fellow Americans really does reflect the compassion and warm hospitality that really has always been the hallmark of Texas, and it’s something that New Yorkers really understands after the tragedy of 9/11. I have used Bill, what you told me about what Houston was doing in speeches as a role model of what great a city with great leadership can do in meeting their responsibilities to America, and you really do deserve a great debt of thanks from this country – all of you in Houston. I hope that New York, when we get the opportunity to help others, behave as well.
“New York, as Larry said when I came into office a few months after 9/11, was a city where people were predicting that we would not recover from 9/11 – that nobody would want to live in the City, that companies were going to flee or at least move half of their employees out. I’m happy to report that those people were wrong. New York came back. It came back stronger and safer than ever. Today, crime in New York City is at a 40-year low, unemployment is at its lowest level ever, we’ve turned a $4 and $5 billion-a-year deficits that our City government had when I first came into office into a $4 or $5 billion surpluses each year and I think another sign of the recovery in New York City is that at the site of the World Trade Center, the Freedom Tower is going up, and we are building an appropriate memorial to those that we lost and the attack on freedom loving people and America. People from all 50 states and from around the world have contributed to the memorial, and since I’ve been given the unenviable task of raising $350 million of private money to pay for it, I’d be remiss if I didn’t encourage everyone here if you are interested in making a contribution. It’s something that will give you some satisfaction and it’s a great way to tell our children and grandchildren what happened when some people found our freedoms so threatening that they took 3,000 lives. Actually I did make a very successful fundraising call here this morning for it before I came over here, so I’m on a roll.
“New York has come a long way over the last five years. And the problems we face today in many senses are problems of success. I think that describes the situation here in Houston as well. Both our cities are looking ahead and planning for an even stronger future. Mayor White’s impressive sustainability agenda, along with the ten-year Strategic Plan devised by the Partnership, will help lead the way for Houston.
“Similarly, in New York, we’re launching an effort to shape our city’s growth between now and the year 2030. Our PlaNYC, as we call it, is designed to address the sustainability problems that we have today and to accommodate the roughly 1 million more people that we expect to be living in New York City by the year 2030 with an infrastructure that is old and can’t even handle the demand today. Our plan is an effort to capture the benefits of growth while avoiding the negative effects that it brings – the strain of the infrastructure, traffic congestion and air pollution. At the center of this challenge lies an issue that is hugely important to New York and to cities around the nation, but none – I think in all fairness – more so than Houston, and of course I’m talking about energy. And I though that I’d like to address that a little bit today.
“While being the chairman of the Greater Houston Partnership, John Hofmeister has a day job, as you all know, as CEO of Shell Oil. But Shell is no longer just an oil company; it’s an energy company now. And savvy CEOs like John have been doing what smart executives all do: anticipating the direction of the market and getting ahead of the curve. And today, there’s no question where the market is heading – toward cheaper, more sustainable energy. Across this country, scientists and engineers and investors are leading a slow-motion energy revolution that will allow us to avoid twin catastrophes: The economic contractions that could come with a volatile and finite supply of oil, and the intensifying environmental threats that could come with continued global warming.
“There’s been so much hype about this energy revolution that you would think that any day now, we’ll all be driving hydrogen-powered cars to our solar-powered houses. But I guess we all realize that it takes a long time to turn a supertanker around. We’re just beginning that process, but that doesn’t mean we shouldn’t hold ourselves accountable for making steady progress. Right now, too much of the energy debate in Washington is focused on goals for the year 2050 or 2070 even. I don’t know about you, but I’m not expecting to be here in 2050 – and perhaps most of Congress won’t be there either. Whether that’s good or bad, I’ll leave that up to you.
“I’ve always thought seriously that legislators that make promises to achieve something in the far-off distant future, but refuse to take steps now that would allow us to begin the progress are really very hypocritical – that’s not leadership, it’s not what this country needs. It’s passing the buck! And I think unfortunately, for Washington today, it’s what we call politics as usual.
“What we need to do is to interject some old-fashioned American values and common-sense, practical thinking into our energy policy. That means a willingness to face up to our responsibilities, and hold ourselves accountable for making incremental progress. By doing that, I believe we can meet the three major challenges that we face in energy: One, produce more power, more cleanly; two, use it more efficiently; and three, create new, sustainable sources.
“Without keeping all of you here until dinner, just let me briefly touch on each of those three, and how cities like New York and Houston are leading the way on these challenges – and what we need the federal government to do.
“As Mayor White said, in this day and age, it is the mayors of this country that are really facing the substantive issues. Mayors don’t have the luxury of being on both sides of every issue. Mayors have to make decisions and you see it on the streets within hours right after that. It’s the mayors that have to balance the budget. We don’t print our own money. It’s the mayors that have to provide service, and it’s the mayors that talk to the press every day and have to answer the questions of why this worked and why that did not work.
“In New York, we are pursuing every option to produce more clean power. We have begun working with the local utilities and private energy developers to expand the amount of clean energy that is generated and distributed, and our plan for 2030 includes new incentives for the production of renewable energy. We’re also committed to protecting existing clean energy sources, including the nuclear plant that helps power parts of our city and suburbs. This is a good example of people not facing reality.
“There are a lot of people who want to shut down the nuclear plant, but they have never offered any realistic alternatives – even as they at the same time want to fight global warming. You just can’t have it both ways! Another example in New York, we have those who favor wind farms – as long as they’re not built off the coast of New York’s Long Island. You’ve heard of NIMBY – ‘Not in my backyard?’ This is what you call, ‘Not near my beach house.’ (If wind farms are good enough for Texas, they’re good enough for New York. Plain and simple.)
“No solution is easy or free – or perfect. But we have to make the hard choices. That means siting new wind farms – and nuclear power plants in this country. And if we’re really serious about producing more clean energy, we have to deal also with the big three: coal, oil, and natural gas, which account still for 86% of our nation’s energy use.
“The question is: how do we produce more natural gas and cleaner coal and oil? In New York, we’re working with the state and federal governments to push for more natural gas pipelines and liquefied natural gas projects. The federal government I think should be doing more to examine environmentally friendly ways to expand access to new natural gas sites, just as it should be doing the same with potential new oil fields.
“And for those who adamantly oppose drilling off our coasts, they should remember that while Hurricane Katrina – a terrible tragedy for New Orleans and for the whole Gulf Coast – it damaged production, but it is also true that there were no spills or environmental harm caused on the outer continental shelf. Technology has come a long way from the 1970s, and we have to recognize that. Yes, we should have the toughest protections to keep drilling and production as safe as is humanly possible, But let’s be honest about it, we as a society are not willing to walk away from our current addiction to oil and natural gas until economical alternatives are available – so drill we must! And I would argue, better that we produce it here – creating jobs for Americans – than buy it from volatile nations overseas.
“At the same time, the federal government should also be doing more to encourage greater investment in new technologies that may significantly reduce emissions from both oil and coal. And the biggest steps the federal government can take is to unleash the most powerful tool that we have in the fight against global warming: creating a profit motive to produce cleaner energy.
“Ten northeastern states – New York included – are helping to lead the way, by agreeing to create a market-driven cap-and-trade system for our power plants. This type of system was controversial when it was created to reduce acid rain – but the truth of the matter is, it did work. The market for carbon is more complicated, and we’re learning from the early experiences in Europe. But we can’t allow Europe’s difficulties – or China’s inaction – to be an excuse for us to do nothing. The best way, I’ve always thought, to convince other countries to act is to show them that it’s possible to strengthen their economies while at the same controlling carbon emissions – not to sit back and say that we aren’t going to do anything until they do their share.
“Producing more clean power is the first step, but using it more efficiently is the second thing I want to talk about and it is just as important. In New York City, efficiencies are the keys to achieving our goal of cutting carbon emissions by a little more than 1% a year between now and the year 2030. To begin, we took a small but essential step – one that I know Houston is taking as well: conducting a citywide inventory of carbon emissions. This data collected-collection will help our cities sharpen the strategies we use to reduce our carbon consumption and I hope more cities will join us in taking this “carbon challenge,” just as more private companies are doing.
“In fact, this week, I attended an announcement with Rupert Murdoch, the owner of Newscorp, which is the parent company of Fox News and the New York Post. After taking a carbon inventory, his companies have committed to a major sustainability initiative that will dramatically reduce their carbon initiatives. Now I think it’s safe to say that no has ever called Rupert Murdoch a tree-hugger – so the question is, why is he doing this? And I think the answer’s simple: He cares about the world he’s going to leave to his children, and he recognizes that ‘going green’ is really about using energy more efficiently, which saves money and drives up profits.
“And that’s the fundamental truth about this issue: you can make more green by being green. And I believe it won’t be long before that idea has become a standard business practice. The technology is here, the savings are real, and the tipping point is getting closer. You no longer read stories in the paper that global warming isn’t taking place. You no longer read stories from some of the op-ed writers saying, oh, global warming isn’t important after all; ski owners will suffer but golf course owners will do better. No, today everybody understands this is something that’s happening and it is very dangerous. And now the debate has shifted: what to do about it. That’s going in the right direction. And to help speed the transition, more and more cities – including Houston and New York – are offering financial incentives to encourage more green buildings and appliances.
“Of course, city government needs to lead by example, and this year, we opened headquarters- or, a new headquarters for our Office of Emergency Management, which is our first entirely green city government building. And for all city buildings, we’ve set a goal of achieving a 30% reduction in energy use over the next ten years – and we’re backing that up- that goal up with a real financial commitment: we’re going to direct 10% of city government’s energy bill to investments that will allow us to achieve major energy savings. Many of our citywide strategies have a lot in common with Mayor White’s efforts here in Houston: ‘Greening’ the building code, offering incentives for buildings to upgrade their efficiencies, and taking a small but powerful step: changing our light bulbs.
“Let me just tell you about light bulbs. Incandescent light bulbs waste 95% of the electricity that they use. A compact fluorescent bulb, which does cost a little more initially, uses far less energy – and lasts about eight times longer. And that produces significant savings from lower electricity bills and fewer replacement bills. To reap those savings, we are beginning, in New York, to replace incandescent bulbs with CFLs, as they’re called, all through our City Hall. And, I’m happy to say, I’ve also done the same thing in my home. In fact, if all of New York City households- just listen to this, if all New York City households replaced just one- one standard bulb with a CFL, the energy savings in New York would be enough to power three Empire State Buildings. It is really quite amazing. And over the 9-year lifetime of that one bulb replacement, each household would save upwards of $100. It’s no wonder that the Government of Australia is phasing out the traditional incandescent bulb by the year 2010, Canada has promised to do it by the year 2012, and the manufacturers are beginning to lead the way. I think it won’t be very long before you won’t be able to buy an incandescent light bulb, you’ll have to buy the others. But I think it’s time for our government here in the United States to get on board. This is something that has to be done at the national level.
“Once again, the technology is there, the savings are real, and the tipping point is coming. If Australia can do it in five years, we can too. And if we do, Americans would save 120 million tons of CO2 emissions every year and $14 billion in energy cost every year. It’s a very simply thing and we would save so much energy that we could avoid building dozens of conventionally coal-fired power plants that are currently on the drawing boards, thereby really saving our air.
“There is an even bigger step the federal government can take to improve energy efficiency and fight pollution and global warming, and it would be an enormous- have an enormously positive impact on both New York and Houston, and that is raising automobile fuel standards. Both of our cities have more than our share of traffic problems – and that helps explain why we have some of the worst air quality in the nation, and why this group has passed a resolution supporting California’s Low-Emission Vehicle Standards, and you are to be congratulated for doing that.
“In New York, our childhood asthma rates are twice the national average. We’re doing everything we can to change that, but the fact is, we need more help from Washington. You should know that in 1975, Congress passed a law requiring fuel efficiency standards to double over 10 years, with incremental targets that automobile manufacturers were required to meet. That was the responsible approach – and it worked! However, since 1985, we’ve done nothing – even as technology has moved at lightening speed. Between 1975 and 1985, the average automobile in this country went from a fuel efficiency of 12 miles a gallon to 24 miles a gallon; since then, nothing. Today- between 1985 and today, it has stayed at 24 miles a gallon. If the same incremental gains had been adopted for the two decades, think of where we would be today, at that rate. We’d all be saving money at the pump, our air quality would be better, and Detroit would be in a stronger competitive position. It is time for us to start making progress again.
“Now, there are various bills before Congress that would raise fuel standards by modest amounts each year, while also offering incentives to automobile manufacturers to upgrade their plants to improve efficiency, which will help protect and create jobs here in America. Some environmentalists will say it’s not enough, some in Detroit will say the sky is falling and there are some anti-government critics who will say global warming is a leftist plot to raise our taxes.
“To the environmentalists, I say, look, we’ve got to start someplace. To those worried about Detroit, I guess I say, things can’t get worse for the ‘big three,’ we’ve got to do something to protect them. And to the ‘free market’ absolutionists- absolutists, they should look at their children tonight as they tuck them into bed and think about what’s going into their lungs! We just have to do something, we are killing ourselves. And I hope Congress will take action to both increase fuel efficiency standards and expand incentives to purchase hybrids, just as we are doing in New York. We’re trying to eliminate the sales tax on hybrid automobiles.
“Improving our energy efficiency also requires us to re-think the relationship between government and utilities – and the relevant analogy that I want to leave with you is welfare reform. In New York, we used to pay welfare providers by the number of cases they handled. But over the last five years, we’ve moved to a system that is entirely performance based. Today, welfare providers don’t get paid in full unless their clients get jobs and keep them. The result is that the welfare rolls in New York City are at their lowest levels since LBJ began the Great Society.
“But with energy, New York and most other states are still paying utilities based on how much power is delivered and consumed. As a result – like the welfare providers of old – the utilities just have no incentive to reduce their workload. And just as we have ended ‘Welfare as we know it,’ I think that by using performance standards and insisting on accountability, we can do the same thing with energy. And that’s why our plan for 2030, and Mayor White’s sustainability agenda, both include efforts to align profits with efficiency. California has proved that it can be done successfully, and now it’s up to the rest of us to do it.
“Finally, the third challenge: how can governments be a catalyst for private investment in clean energy sources? We can begin by taking a lesson from Governor George W. Bush, who signed a law, when he was governor here, creating a market for wind energy, which has made Texas the largest producer of wind energy in the United States. And I also applaud Mayor White’s bold plan to tap into that market to supply one-third of the energy needs for Houston City operations by next year.
“In New York we’re working to encourage not only more wind and solar power, but also greater use of one of our most abundant natural resources: water. A pilot project in the waters around Manhattan is currently underway to discover the feasibility of river turbines that would capitalize on the strong currents that surround New York City. And we’re also beginning to install clean-energy producing micro-turbines and fuel cells in city buildings and facilities.
“These local efforts – but particularly the efforts by the private sector – need stronger federal support. That means greater investment in alternate-fuel demonstration projects, flexible fuel vehicles, bio-refineries, and particularly research and development. Right now, we’re spending just one-third of what we were spending on energy R&D in the 1970s. Think about that. We have a bigger problem than ever before, more people recognize it, and yet Congress diverts money to pork barrel projects instead to something that will protect this country and save our health.
“It also means re-examining tariffs and subsidies that are nothing more than political giveaways. For instance, Congress is currently subsidizing corn-based ethanol at 50 cents a gallon – even though oil remains at more than $60 a barrel. And Congress is taxing sugar-based ethanol imports at more than 50 cents a gallon – even though ethanol made from sugar is far more efficient than ethanol made from corn.
“I want to applaud George W. Bush, President George W. Bush, for recently forming an alliance with Brazil that will promote ethanol trade. But the fact of the matter remains: Politically-driven policies are costing taxpayers billions while providing only marginal carbon reductions. We must design policies that do more to improve our energy security and fight climate change.
“I think one of the most promising approaches has been proposed by Governor Schwarzenegger: using a cap-and-trade system to reduce the carbon content of fuel by 1% each year between 2010 and 2020. This approach would re-direct subsidies away from inefficient corn-ethanol producers and begin directing investment to the most efficient producers – whether they’re creating energy from corn or sugar or woodchips; grass, wind, water, or natural light.
“Here, I am with the free marketers. The free market is far better at distributing resources than the federal government, because Congress plays favorites. Wherever possible, we should let the free market work its magic. And in some cases, that does simply require the government to get out of the way.
“For instance, let’s say a company wants to build a solar installation to power its factories. When the company is closed on the weekends, it generates excess power. Selling power- selling that power to the local utility would make the project economical. There’s only one minor problem: states, including New York, have laws that severely limit the amount of surplus power companies can sell to utilities. That kind of regulation is discouraging the development of clean power sources and it just has no basis in reality, you can’t justify something like that. We have to begin investing in our energy grid so that we can address the safety and reliability concerns that prompted these regulations and that are shutting out private investment in clean energy sources.
“Through all of these steps and others I think we can tackle the greatest scientific and engineering challenge in history: creating alternative sources that are commercially viable, and competitively priced. It will take nothing less than a revolution to succeed, and make no mistake: we can win only by making slow, steady advancement.
“And the charge cannot be led by government or the private sector alone. But only by-through a partnership, in which government commits the resources to R&D and clears away the barriers for the private sector to jump in. We have seen this type of partnership launch revolutions before – the Internet, the greatest technological transformation of the 20th century, and of course, the incredible launch that this city led: the Apollo Space Mission.
“The space race that was not just about putting a man on the moon – it was about strengthening our national security – and pride. And the race for clean energy is also wrapped up in matters of national security – but even more is at stake – the future of our economy and our environment. Today, American CEOs and entrepreneurs know that this is a race we can win, if the federal government is ready to make the commitment. The question that we have to decide is: Do we have the confidence not only to set as bold a goal as the Apollo project, but the commitment to start making real progress today.
“When I outlined our plan for the future, I told New Yorkers that we have a responsibility to face up to our challenges now, rather than let them grow worse and then handing them off to our children. I’m glad to see that the City of Houston is on the same page.
“Not all of our solutions will be the same – because each of us has to tailor our plans around our own local circumstances. But at the same time, our goals of creating truly sustainable cities also require stronger federal leadership. And that means we need Congress to do less dreaming about the year 2050 and to take more action in 2007.
“Cities can help push Congress along – and no city has a greater opportunity, I think, than Houston. And as all of you work through these issues, we hope that you will consider us in New York a friend and a partner.
“And if the Astros and Yankees meet in the World Series this year, may the team with the oldest native Texan win.
“Thank you – and, have a great Mother’s Day.”
Stu Loeser/John Gallagher (212) 788-2958