GreenGov Workshop on Renewable Energy Purchasing and Deployment

Executive Brandt: Good afternoon Thank you all so much for being here and welcome to the White House I’m Kate Brandt I am the Federal Environmental Executive This is actually day four for me on the job, so this was very fortunate timing I’m very glad to be able to spend this piece of my first week with all of you And, looking out across the audience, I’m really glad to see so many of our leaders here from their noble energy community Both are federal agencies who I know firsthand, every day, are working to achieve the president’s sustainability and climate goals, and as well as our private sector partners, who, without your hard work and your innovation, we wouldn’t be building the clean energy economy that we’re building today So, thank you for all that you do I’m also very excited to have with us here Ray Mabus, Secretary of the Navy, who is a true leader within the federal government on clean energy And he will be talking with us today about the Navy’s energy program as well as what we’re doing to implement the president’s presidential memorandum and the president’s climate action plan So, when President Obama first signed Executive Order 13514, on October 5th, 2009, he declared the Federal Government must lead by example And I’m very happy to say that thanks to the work of many of those in this room today, and many others, we are making very steady progress towards achieving that goal We are increasing our renewable energy, both through onsite generation and through renewable energy certificates We are seeing new and innovative models for deploying renewables through power purchase agreements, through energy performance contracts, and through the use of local and federal incentives for clean energy As an administration, we remain focused on continuing this progress that we have made, and displaying that this federal leadership in clean energy, and using that to continue to drive down the price of renewables even further Many of these goals really support the president’s efforts to mitigate climate, and to make change through our federal action And today, we’ll hear about many of those efforts that are already underway The December Presidential Memorandum, that I mentioned a moment ago, committed us to a really exciting and very ambitious goal, which is that by 2020, 20 percent of the federal government’s energy will come from renewable resources And we had, I was just speaking with our panelist that we’ll see earlier from the Army about a very exciting announcement that I know the Army made that continues to contribute to that goal They’re groundbreaking, in Fort Huachuca, Arizona, of an 18 megawatt facility And I understand Secretary Mabus may have some other news for us very soon And as DOD has done, we really encourage all of our agencies to explore every avenue that we have for deploying renewables, whether that’s on federal lands, on our buildings, and on our installations across the country And, one thing that the presidential memorandum focuses on also is exploring opportunities on contaminated lands and on brownfields, as other interesting places to look for opportunities for renewables You also may have heard about the Capital Solar Challenge, which is a piece of our 20 percent goal And we are asking agencies throughout the national capital region here to identify opportunities where they may be able to deploy solar on federal buildings, on our military installations, and on publicly assisted housing The president asked that all of our agencies work with the Department of Energy to identify these opportunities and really try to get this goal done And as you may know, thanks to the very strong local support we do have here in Washington, we have some of the best opportunities for solar in the country And what this really means is that federal agencies that are committed to getting this done may actually be able to save money on their utility bills while they’re reducing their greenhouse gas footprint Just a final word: you may have heard the exciting announcement in our portfolio on Friday that the president made out in California, which is that, in addition to the $2.7 billion that we have already have in the pipeline towards the president’s performance contracting goal from 2011, the president has committed us to an additional $2 billion, which means that by the end of the administration, we will have $4 billion in performance contracting And a note on that, especially even our topic today: we’re really urging our agencies to contemplate opportunities to incorporate renewables into those performance contracts towards our other goal So now, without further ado, it is my distinct honor and privilege to introduce our keynote speaker, Secretary Ray Mabus, who I have to also confess is my favorite former boss (laughter) Executive Brandt: As a Secretary of the Navy, Secretary Mabus has truly embodied what it means for the federal government to lead by example in the adoption of alternative energy In 2009, Secretary Mabus established a landmark

goal that by 2020, half of the Navy’s energy would come from alternative sources And in 2012, during the State of the Union Address, the president highlighted the Navy’s commitment to meet 1 gigawatt of their power from renewable sources by 2020 And as you may know, that was met by an additional commitment across the Department of Defense to three gigawatts of renewable energy Under Secretary Mabus’ leadership, the Department of Navy has already made enormous progress in deploying renewables on Navy and Marine Corps installations They have done several exciting projects, including 14 megawatts of solar in China Lake, California, 1.9 megawatts in a waste energy project in Albany, Georgia, and 3.2 megawatts of landfill gas in Del Mar, California So, it is my distinct pleasure to welcome Secretary Mabus Thank you (applause) Secretary Mabus: Kate Brandt, thank you so much, and, you know, I’m still vaguely unhappy that Kate started in the federal government as a Special Assistant in Navy, not long after I started, and, very quickly became an expert on energy and very quickly demonstrated how good she was And so, I moved her into my office as my adviser on energy And, she kept doing amazing work And a lot of the goals and a lot of the things that we’ve actually done up to this point were as a result of her innovation, her work And then, the White House called her (laughter) Secretary Mabus: And she promised she would come back They said it was for six months And she didn’t (laughter) to the Department of Energy, and now she’s here 0:06:53.500,1193:02:47.295 Secretary Mabus: You know, first she went as a Federal Energy Executive But, you know, you’re still Navy — (laughter) Secretary Mabus: –And if you ever change your mind, we still have a spot for you I want to talk to you for a little while today about energy and power, and about how it impacts our national security And, as you would suspect, from a maritime service, I’m going to talk about it, in part, from a maritime perspective 90 percent of the world’s trade travels by sea today And in this day of cell phones and internet and things, more than 90 percent of all data goes under the sea Eight out of every 10 people on Earth live within 40 miles of an ocean And the future of the 21st Century is a maritime century, whether you’re looking at it from an economic standpoint, from a climate standpoint, from a security standpoint, and the thing that the Navy and Marine Corps bring, and we’re unique in being able to do this, is we bring presence Not being in the right place just at the right time, but being in the right place all the time Regardless of what happens, regardless of what crisis or emergency comes up, regardless of what situation our leadership has to deal with, regardless of what the president is facing, we’re there to guild the national leadership options And, because, for seven decades, we have guaranteed freedom of the seas, we’ve guaranteed freedom of navigation, we’ve guaranteed peaceful transit for all those involved in peaceful commerce And it’s unique in history that a Navy has been as dominant as ours, has done it for everybody, and not just for ships flying its own flag Presence is very persistent We can stay for a long, long time We don’t take up one inch of anybody else’s soil when we are present My favorite recruiting poster for the Navy is a picture of a carrier strike group, with their aircraft arrayed overhead, and it says, “Sometimes, we follow the storm to the shore

Sometimes, we are the storm.” And, that encompasses a broad range of missions that we have, everything from high in combat to irregular operations to partnership building around the world, to humanitarian assistance and disaster relief, we’re there And as secretary, I’m responsible for both the Navy and the Marine Corps And I’ve tried to focus on the four things that make that presence possible Our work in a building that is obsessed with acronyms and things that rhyme or are alliterative, so it’s the four P’s: people, platforms, power, partnerships And I want to talk about the third of those, power, energy I have been, as Kate said, I’ve been talking about this and trying to act on this for almost the entire time I’ve been secretary Next week marks five years since I became Secretary of the Navy And, it was about three months after I became secretary that we came up with these energy goals, and we started working to meet them Part of the reason that we did it is some of my history as Ambassador to Saudi Arabia, and seeing the impact that fossil fuels could have, and seeing how nobody, nobody controls the price of oil and gas around the world It is a true worldwide commodity But, mainly, it’s because it’s a vulnerability for us, as a military service, how we get fuel and how we use fuel And, I’ve been a little bit interested in the fact that some people say, “Well, why is the Navy leading in this? Why is the Navy out front? Why is the Navy worrying about energy power?” Well, it’s in our DNA We went from sail to coal in the middle We went from coal to oil at the beginning 0:12:30.867,1193:02:47.295 of the 19th Century of the 20th Century We pioneered the use of nuclear for transportation, in the middle of the 20th Century And every single time we did that, every single time, there were naysayers, including some of the predecessors as secretary, who would say “You’re trading one form of energy that you know works, and in the case of wind, it’s free, for something that you don’t know if it works.” Coal, which costs money, or, when we move from coal to oil, we’ve got all of these investments in coaling stations around the world You’re just going to walk away from those? And nuclear, that’s clearly never going to, you can never make that small enough or safe enough to put in a submarine, to use just on a daily basis for transportation Every single time, every single time, those naysayers were wrong They were on the wrong side of history And they’re going to be wrong again, and, in fact, are in the process of being proved wrong right now The former Saudi Oil Minister, Zaki Yamani, had one of my favorite quotes of all times He said, “The Stone Age didn’t end because we ran out of stones It ended because we invented something better It ended because there was a new idea.” And it’s the same thing happening here with alternative energy The other thing, oil is a global commodity, as I mentioned Every time the price of oil goes up a dollar a barrel, it costs the Navy and Marine Corps $30 million, in additional, unbudgeted fuel cost DOD is the largest single user of fossil fuels on the planet We spend about $15 billion a year across the DOD on fuel In fiscal 2011 and 2012, the last years we’ve got complete numbers for, because of price spikes, $3 billion in unbudgeted fuel price increases came

in during those two years And even at DOD, it’s tough to find $3 billion There are only a couple of places you can go One is operations and training, so you can steam less, you can fly less, you can train less The other, if the bill just gets too big, you buy fewer platforms Neither one of those seems like a good idea There ought to be a different way to do this And this oil is a global commodity Oil is traded a lot of times on rumor, speculation Anytime something happenings, Syria, Libya, Ukraine, oil traders put a security premium on the trades of oil And so, that’s one reason that we’re doing it, to eliminate this vulnerability, to eliminate the price vulnerability But it’s also energy can and is being used as a weapon You don’t have to look any further than today’s headlines to see that 40 percent of the natural gas, a third of the oil used by Europe, and half the natural gas used by Ukraine comes from one source, it comes from Russia So, it’s a geostrategic thing It is a matter of security, because even if we produce every drop of oil and gas that we need in the U.S for the U.S., we can’t control the price So that’s a vulnerability We can’t change our engines to use natural gas on board ship, for example, or one our airplanes That would be phenomenally expensive to change out those engines now But, past that, we also can’t guarantee the supply of our allies and our friends around the world, even if we can guarantee our own supply from home And so, the crises that will come up because of this are things that we will have to deal with, if we don’t find an alternative, if we don’t find a more stably-priced alternative and if we don’t find an alternative that can be, for us, made here at home, that avoids some of the global price spikes So that’s why, as Kate said, 2009, I came out with energy goals for the Navy And the biggest one is that by no later than 2020, at least half of all our energy, both afloat and ashore, will come from non-fossil fuel sources We’re going to meet that, that goal We’re already a good ways down that road at sea, where, we’re already beginning to steam and to fly On the 50/50 mix of (inaudible) gas and biofuels are Marine decent in biofuels One of the things that the president directed in the spring of 2011 was, he directed that the Department of Agriculture and Department of Energy and the Department of the Navy to come up with a nationwide biofuel industry, geographically dispersed and cost-competitive And what, we brought two things to that endeavor One is we brought a market, because we’re big enough, we can create a market, or we can certainly help create a market The other thing was we brought something called the Defense Production Act, that said, that says, it was passed in 1950, it says that if there is something needed for the national defense that is not produced or not produced at scale, that we can invest in companies to get it up to scale, and then get out Using that, working with energy, working with agriculture, we now have four companies, four biofuel companies committed to producing 160 million gallons of biofuel a year, starting in 2016, at less than $3.50 a gallon

All four of these use different feed stocks I don’t particularly care what the technology is The technology is there, though And the technology is always going to be changing But, ashore prices for things like solar and wind are plummeting It’s already very competitive most places, and particularly places where we have bases, Hawaii, Diego Garcia, Japan, Southern California We are a seagoing service But we also have 117,000 buildings, three and a half million acres of land And, I was proud of the Army for their announcement in Arizona I was just out at Yuma And they do have a bit of sun in Yuma We start putting solar panels in Yuma in 2009 But, Army’s going us one better in terms of a solar field there I actually think that sort of competition is wonderful competition It pushes us, it pushes the different services to compete And I’m happy to compete on that and I think that the services are better for it, and I think that America is better for it And I also think it’s going to end up exactly like Army, Navy football — (laughter) Secretary Mabus: –12 years in a row, but who’s counting? (laughter) Secretary Mabus: But the, the one giggle was, that Kate mentioned, that the president talked about in his 2011 State of the Union, is 1 gigawatt of shore-based energy And we’re doing everything from wind, solar, geothermal, hydrothermal wave And we’re doing it in all sorts of different ways: power purchase agreements, we’re doing offtake contracts, we’re being test beds for various technologies And, we’re doing this all because it will make us a better military It will make us more secure Nobody, when they think, I think, nobody, when they first think of United States Marines, think of ardent environmentalists Marines tend to blow things up But they have embraced this more than any other service, because one of the things they know is it saves lives And it makes them better fighters At the height of the fighting in Afghanistan, 3rd Battalion, Fifth Marines in Sangin, took in a bunch of different alternative energy sources One of them were solar blankets that, about so big, that they could use to power their radios, GPSs It saved 700 pound of batteries for one company of Marines And, we were losing Marine, killed or wounded, for every 50 convoys of fuel we brought into that conflict That’s way too high a price to pay The technology has moved, and Marines twice a year have something they called EXFOB, Experimental Forward Operating Base, that they reach out to the private sector and say, “What have you got? What you got that we can use?” And, now, these things are becoming a part of just the normal Marine kit In fact, when I was at Yuma, one of the questions I got in an all-hands call was, “Sir, we had all these alternative things in theater, in Afghanistan When are we going to get them here? We like them We think that this is the future.” And so, that’s what we’re working on, and we have made a lot of progress We’ve got a long history of working with other government agencies and working with the private sector to figure out how we can do this, how we can make this change in energy, how we can make the change in culture that it’s going to require

And I do think that it, it has some great side effects It does have an effect on climate change It does help the environment and make us better stewards It’s not the main reason we’re doing it We’re doing it to be better fighters But it’s certainly a nice benefit, and it’s going to have an impact on us, because climate change is having an impact already on the mission of the Navy and Marine Corps You only have to look at the melting of the ice in the Arctic, the opening up the Northwest Passage, the beginnings of concern over minerals and resources in the Arctic, to know that that’s going to be a place that we’re going to have to assume some responsibilities and have to have as our focus And finally, I get asked sometimes, not as much as I used to, but, “Why, in these days of fiscal austerity, should we invest in things like alternative energy? Why shouldn’t we use our money in different ways?” And my response is, “We can’t afford not to do it now, because if the price of oil and gas keeps spiking, we’re going to buy fewer ships, we’re going to buy fewer empire We’re not going to train as much.” We won’t have the things we need to do the job we have to do if we don’t make those investments today Apologies to my friends at Army One of the things that I’m always reminded of is what the head of a Pacific Navy, one of our allies, partners, said to me He said that, “Soldiers tend to look at maps and boundaries Sailors and Marines look to the open sea, look to the open horizon They don’t see boundaries They don’t see limitations They see the future.” That’s what we’re doing in energy, looking to those open horizons, looking to the future And the sailors and Marines will be there at the leading edge of that future So, from the Navy, Semper Fortis, forever courageous, and the Marines, Semper Fidelis, forever faithful Thank you all very much (applause) Secretary Mabus: If anybody’s got a question, I’ll, I think I’ve got time for a couple Male Speaker: Do you ever get a question about (inaudible)? Secretary Mabus: I didn’t realize I was quite that convincing (laughter) Female Speaker: Questions? There we go All right, I have a tradition, first question, an all-hands call gets a coin, so — (laughter) Male Speaker: Oh Female Speaker: See, should I ask him that? Caroline Danceleau: Oh, thank you Well, then, hopefully you’ll like this question, because I like this coin So, Caroline Danceleau with the State Department And we’re doing a lot of different things following in your great footsteps I was wondering about, what types of challenges you’re having deploying energy, renewable energy overseas? I think we have a lot of the same challenges with overseas impanation So, I was wondering, what you’re doing to sort of help or push that process along Secretary Mabus: Well, you’re right Sometimes there’s legal requirements and this sort of thing Sometimes for us, they’re operational things It’s really hard to put a wind farm near where you’re landing aircraft But, one of the things we have found, in some of the places that I’ve mentioned, Japan, Diego Garcia, Spain, where we’re putting four destroyers, is that their governments are becoming increasingly concerned about their vulnerability on fossil fuels And, we haven’t hit nearly as much resistance as we anticipate And in fact, one of the first questions I get asked now as I travel, is, is about energy and is

about what the Navy is doing, because we’re beginning to sign partnerships around the world on things like biofuels, because we’re going to deploy the great green fleet in 2016 We’ve demonstrated it And that’s a carrier strike group, that’s, all the ships, carries nuclear all the other ships are sailing on, a 50/50 blend of biofuel and diesel, the aircraft are flying on a 50/50 blend of gas and biofuels And we’re just making nothing normal But we’ve got to have a place to buy biofuels when we’re at sea, when we’re deploying this thing I’ve signed agreements now with Australia, with Italy We’ve got some in the works with several more countries to do that And, I, I want to do a shout-out to both Secretary Clinton and Secretary Kerry for their work in this, because, Secretary Kerry recently has just been talking about this, and working on this, and saying it is a matter of not just national security, but global security, and that makes it a lot easier, when you talk to these governments So, I think, in a lot of cases, a place like Japan, where electricity is so expensive, we’re pushing an open door there And, even in the U.S., places like Hawaii, where they’re paying 40, 50 cents per kilowatt hour, there’s a lot of eagerness to do this Thanks And by the way, I have now traveled to 112 separate countries as secretary My next new country, I’ll pass Secretary Clinton (laughter) Secretary Mabus: 835,000 air miles (laughter) Secretary Mabus: And those are different countries That counts Afghanistan as one I’ve been there 12 times That’s why I’m tired and that’s why I’m permanently jet-lagged (laughter) David McGowan: Good afternoon, sir, David McGowan I’m a consultant to Ms. Simpson and to the Department of Energy on the Renewables Taskforce Staff As you’re here, I’ll go straight and ask you, in terms of when we’re looking for renewables such as solar on our bases, what’s your perspective on the energy security aspects of providing that to the base? Secretary Mabus: Help me out a little bit here, in what sense? David McGowan: Well, as we follow the mission of driving for renewables and let’s say we put a 20 megawatt solar at Miramar, or something like that, and we’re asked for provide an energy security component of that We’re displacing some of the traditional utility brim power, and integrating that within the base’s grid And, each of us try to get a definition of what, for the military, is energy security by having solar or geothermal or wind on the base And I’m wondering if you’ve thought through that aspect of it as you will Secretary Mabus: Yeah, one of the main things that we’re working on there is microgrids, is having the ability to pull ourselves off the grid in case something happens to the grid, because we’ve still got to do our military jobs, and to try to cluster our bases You mentioned Miramar We’ve got an awful lot of bases very close to each other, Marine and Navy in Southern California, for example the same thing in Hawaii, the same thing in Florida, the same thing in Virginia, and to cluster those bases using different forms of alternative energy So, if you’ve got a solar ray at 29 palms, for example, our Marine base is producing more power than you can use Can we get it to San Diego in the off-peak hours? Can we use wind from San Diego for some of the other bases? How can we do that? How can we integrate that? And so we are doing a lot of work on those microgrids and on the energy security part And California has been a pretty good state to work with, because they have their own alternative goals that we can help them reach And so, we’ve been working with the power companies there, that we’re not working to cross purposes with them We’re actually going to help them, I think, make their goals And so, in terms of the energy security, if you’re on our base, that’s sort of almost unnatural If you’re providing power through a power purchaser or something, and you’ve done it near the base,

then we’re going to work on that, in terms of how do we, how can we separate it out from the grid? How can we do a microgrid? How can we guarantee the supply of that if something happens to the larger grid? One more Male Speaker: Sir Commander, retired Navy Waste heat in the last presidential memorandum, was classified as renewable energy, thermal energy What’s, does the Navy does yet have a position, as a way to jumpstart conservation, as a renewable source? And it could be in the RPS for utilities, like in Ohio and some other places as well Has the Navy got a policy yet? Secretary Mabus: Well, I think the Navy policy is just what I said We’re pretty neutral on the source, if you can show it works We’ve got, we’ve got, I think, basically three requirements: one is it would be a drop in fuel if you’re going to use it for ships or aircraft or even for generators on bases We can’t change our engines Second, that it not take any land out of food production And, third, that it be cost-competitive with whatever it’s replacing And so far, we’ve found all sorts of technologies that meet those three requirements And, for any one specific one, if it meets those three requirements, we’re, then I guess we have a position for it But we don’t tend to say this is what we’re looking for We just, this is the type of energy we’re looking for, here are the requirements for whatever technology you’ve got, we’re happy to take a look at it And as technology changes, I mean we’re on the third generation of biofuels right now, for example Once again, thank you all for having me, and thank you all for what you’re doing I mean, the partnership that we have with the agencies, and particularly Army, the partnerships that we have with industry, and we can do any of this without those partnerships And, the thought, the innovation, the creativity that comes from the outside, from outside Navy and Marine Corps, from outside military, into this, is what’s driving a whole lot of it Now, we’ve shown in the military that once we adopt things, that it tends to spread pretty rapidly in and out GPS, flat screen TVs, three pretty good examples of that And so I think that, this collaborative working together, both inside the federal government, and with the private sector, is what’s going to make this such a resounding success, as it’s already beginning to be But thank you all