Under Secretary of Commerce For International Trade Francisco SÁnchez
Silicon Valley Clean Energy Summit 2011
Friday, June 24, 2011
As prepared for delivery
Thank you, Heather, for that kind introduction. I’m delighted to be here today.
I just returned from the Paris Air Show…
As Under Secretary for International Trade, I have the privilege of leading the International Trade Administration as we implement President Obama’s National Export Initiative with its goal of doubling U.S. exports by the end of 2014, and supporting millions of jobs.
At ITA, we’re committed to partnering with all U.S. companies that seek our assistance as they sell their goods and services overseas. However, we also recognize the realities of a rapidly changing global economy are creating opportunities in high growth sectors and markets. We’re focusing our efforts on these types of industries and markets that are providing enormous opportunities for U.S. businesses.
Renewable Energy and Energy Efficiency is certainly one such sector that we expect to continue to provide these opportunities. If we’re to meet President Obama’s ambitious goal of doubling exports, businesses in Renewable Energy and Energy Efficiency will have to lead the way.
You represent America’s great strength – the enduring ability to innovate – creating new technologies and the businesses and jobs of the future.
Our Energy Challenges and Opportunities-Obama Administration Progress
As we’ve been painfully reminded at the pump this year, America faces enormous energy challenges because of our reliance on largely foreign sources of fossil fuels from politically volatile countries.
And while we’ve recently felt some relief as gas prices have fallen a bit, we can’t rest in our pursuit of securing our energy future. As President Obama said in March “We cannot keep going from shock to trance on the issue of energy security, rushing to propose action when gas prices rise, then hitting the snooze button when they fall again.”
This is why this Administration has developed a Blueprint for a Secure Energy Future. If you haven’t already, I encourage you to check it out at whitehouse.gov/energy. This blueprint focuses on three things.
First, Develop and Secure America’s Energy Supplies. This includes expanding safe and responsible domestic oil and gas production as well as leading the world towards safer, cleaner, and more secure energy supplies.
Second, Provide Consumers with Choices to Reduce Costs and Save Energy. This includes creating more efficient cars, trucks, homes and buildings.
Third, Innovate Our Way to a Clean Energy Future. A global race is underway to develop and manufacture clean energy technologies, and countries like China are playing to win. To rise to this challenge we need to tap into the greatest resource we have: American ingenuity.
That’s why in his State of the Union, President Obama proposed the ambitious standard for America: by 2035 we will generate 80 percent of our electricity from a diverse set of sources including wind, solar, biomass, hydropower, nuclear, efficient natural gas, and clean coal.
I believe that this blueprint provides us a clear way forward for our security, our economy, and our environment.
The Administration has already made great progress in many of these areas.
The Administration established new fuel economy standards for cars and trucks that will raise average fuel economy to 35.5 miles per gallon for model year vehicles 2012-2016, saving 1.8 billion barrels of oil and reducing fuel costs for average consumers by $3,000.
The President has set a goal of putting 1 million advanced vehicles on the road by 2015, making the U.S. the first to reach this milestone.
In the last year, the Department of Interior approved the first nine commercial-scale solar energy projects for construction on public lands, including the world’s largest solar power plant.
When completed, these projects will produce enough energy to power 1.2 million homes. Moving forward, the Department of Interior is committed to issuing permits for 10,000 megawatts of renewable power on our public lands and in our offshore waters by the end of 2012.
Through the Recovery Act, we invested more than $90 billion in clean energy to promote everything from advanced wind turbines and solar panels to new battery technologies and the modernization of our electricity grid. This is the largest clean energy investment in our nation’s history. These critical investments have put the United States on a path to double clean energy generation from 2008 levels by 2012.
Developing a smart grid is a top priority of the Administration, and the Departments of Commerce and Energy are cooperating closely to make this a reality.
The Recovery Act provided $11 billion in funds to create a 21st century electricity grid, which will bring renewable energy to consumers around the country and give Americans greater control over their energy usage.
Over time, a smart grid will become the foundation of an energy network where electricity is generated by a wide menu of sources and where some customers consume energy while others return it back into the grid.
Designing, building, and installing smart grid technology can also be a major job creator. Recovery Act smart grid investments alone are projected to directly create 43,000 jobs and support another 61,000 in the private sector.
Another 30,000 jobs will come from a smart grid workforce program backed by $100 million in Department of Energy funding and an additional $95 million from community colleges, universities, utilities, and manufacturers.
The potential of adopting a smart grid is immense, but so are the challenges. There is the difficulty of ensuring the array of smart grid hardware and software is compatible, a challenge the Commerce Department's National Institute of Standards and Technology or NIST is working with industry to solve.
NIST has collected input from 600 organizations and 1,600 individual members, some of whom are probably in this audience.
NIST recently rolled out Version 1.0 of the Interoperability Framework, which identified, prioritized, and addressed new requirements for smart grid interoperability and security.
This was done with unprecedented speed. NIST developed in just 18 months – this pace is unheard of— what similar efforts in other sectors took multiple years to accomplish.
These smart grid standards initiatives are a start. Many more standards and protocols need to be developed. But it’s critical that we get it right – not just domestically but internationally as well.
If smart grid standards develop in a piecemeal manner, countries may not easily benefit from the innovations developed in another country. Or technologies developed today may be rendered obsolete as countries with large market potential later decide on different standards.
So it is incumbent that all those engaged in developing U.S. smart grid standards are also actively engaged on the international scene.
But I have a feeling this audience already has a pretty good idea of the value of energy efficiency and the smart grid – after all, Silicon Valley companies are some of our nation’s leading innovators in these growing sectors.
International leaders from companies and foreign governments flock to Silicon Valley to witness the strength and growth of U.S. innovation. And Silicon Valley companies understand the value of these technologies to consumers in the Unites States and around the world.
International Clean Energy and Energy Efficiency Competition
To ensure America’s renewable energy and energy efficiency industries are globally competitive, Commerce’s International Trade Administration, the organization I lead, is working with partners around the world to promote U.S. products and services in markets where investment is ramping up.
Too often foreign governments have provided more effective support for the commercialization process. As a result, while the innovation happens in the United States, the benefits often are reaped by foreign companies and workers.
As I outlined this Administration is taking bold steps to make sure that we’re serving as a full partner to U.S. companies that are driving our economy forward. These actions also include the President’s National Export Initiative.
The National Export Initiative is focused on (1) improving trade advocacy and export promotion efforts; (2) increasing access to credit, especially for small and midsize businesses; (3) removing barriers to the sale of U.S. goods and services abroad; (4) robustly enforcing trade rules; and (5) pursuing policies at the global level to promote strong, sustainable, and balanced growth . For more information on the export related resources of the federal government you can visit export.gov. And I really encourage you to use the resources available in my bureau, the International Trade Administration, as many companies here have done successfully. Companies like SolFocus, who landed a multi-million dollar deal with their solar technology in Australia as part of our gold key service (describe gold key). Companies like Sylvan Source, who brought their innovative water technologies to showcase with me on a trade mission to Saudi Arabia where billions of dollars are being invested in energy and infrastructure projects. Trade missions and gold key services are just two of the many ways we can help you get your products out there.
The largest potential market for clean energy technologies lies outside the United States. Global investment in clean energy reached $243 billion in 2010 and will likely be much higher this year. Countries in every corner of the globe are investing in clean energy, and many are creating incentives that will drive investment and development.
To meet the energy demands of the 9 billion people expected to be on the earth in 2050, the world will need to add 2,000 megawatt of power every single week.
While in the short to medium term the majority of that additional demand is likely to be met with traditional fossil fuel and gas, there is a growing demand for both renewable energy and energy efficiency.
Put simply, our companies cannot export from the United States what they do no manufacture in the United States. Even service-oriented activities require a domestic market that supports continued innovation and opportunities to develop expertise.
As the U.S. market for renewable energy and energy efficiency grows – often as a result of state policy and national policy developments and incentives– more and more companies are investing in manufacturing facilities, which will ultimately position them to not just meet demands in the United States but overseas as well.
To compete abroad requires an even playing field. However, as more and more countries turn to renewable energy to create jobs and economic growth for their citizens, address climate change, and promote energy security, many countries have also instituted trade barriers that seek to incentivize only local production—with the effect of forcing foreign investment and limiting imports.
In several overseas markets, the prevalence of local content requirements and burdensome certification requirements are perfect examples. These policies limit the ability of U.S. companies to export to particular markets while ultimately limiting the technology and product options available to foreign buyers.
With clean energy, it should not be about one-country out-doing another or this sub-sector dominating another; it should be about growing the total market around the world. We should seek to open new markets and create new opportunities, and the only way to do this is to work together.
The Renewable Energy and Energy Efficiency Export Initiative
While the National Export Initiative will benefit companies across all sectors and markets, we are focusing our efforts.
To that end in December, Secretary Locke announced the Renewable Energy and Energy Efficiency Export Initiative – an effort of eight U.S. Government agencies – led by the Departments of Commerce and Energy – to focus our resources on meeting the exporting needs of your industry.
Under the NEI, the Renewable Energy and Energy Efficiency Export Initiative will help meet the President’s overall export goals, while also focusing on the specific needs of the renewable energy and energy efficiency industries.
Financing is a significant barrier– which is why the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency have teamed up to produce new financing products specific to this sector.
To cite one example, the Overseas Private Investment Corporation will offer a new subordinated debt product geared towards energy efficiency improvements. The financing will cover 100 percent of the project’s cost and can be paid back with cost-savings from the efficiency improvements.
Under the Renewable Energy and Energy Efficiency Export Initiative, we’ll also be working to enhance market access for U.S. companies. Over the course of the Initiative, the Department of Commerce will lead two or three trade policy missions every year to key potential markets. Secretary Locke’s first trade mission focused on clean energy; he took 30 companies to China and Indonesia last summer.
In the past three years, ITA organized some 600 activities in clean energy and energy efficiency, including 90 trade shows and events in a single year. More than a quarter of our trade missions last year included a clean energy focus.
In FY10, we accomplished over 1,437 “green” export successes—meaning business deals – in clean energy and environmental products and services worth over $5.5 billion – again more than 25% or our total successes.
We have begun the process of better targeting markets for these trade missions based on a systematic study of future export potential for the renewable energy sector.
To further promote a reduction in market access barriers, the U.S. Trade Representative, Ron Kirk, and his office created a new trade policy subcommittee on renewable energy and energy efficiency to target those specific barriers that hinder the export ability of U.S. companies in the sector.
We recently launched a new online exporters guide and website, specifically designed for U.S. companies in the renewable energy and energy efficiency sectors. You can find it at export.gov/REEE. This website combines information and services from all agencies in one place for easy reference.
Finally, we’re also building public and private partnerships to enter the clean energy markets of the future. For example, under ITA’s Market Development Cooperator Program, we’re working closely with the Brazil-U.S. Business Council and Trade Roots, to support their green energy trade mission to São Paulo and Rio this August which will showcase the world class solutions offered by U.S. companies to reduce energy consumption in one of the world’s fastest growing markets.
So as we seek to double our nation’s exports, we’re also working side by side with other Departments and initiatives across the Administration to deliver the economy and jobs of the future. Success in your industry is critical if we’re going to win the future as a country.
There are still far too many folks struggling as we recover from the recession, but if we’re going to build a stronger American economy we’ll need to compete across the globe on the cutting edge of your industry. I’m confident that we’ll succeed, and I look forward to continuing to be an advocate for your businesses as we continue to work together. An on that note, before I leave I want to introduce you to my local staff on the ground, who can assist you in setting up gold key services, participating in trade missions, and helping you export abroad. Shanon Fraser – please stand up…
The International Trade Administration, U.S. Department of Commerce, manages this global trade site to provide access to ITA information on promoting trade and investment, strengthening the competitiveness of U.S. industry, and ensuring fair trade and compliance with trade laws and agreements. External links to other Internet sites should not be construed as an endorsement of the views or privacy policies contained therein. This site contains PDF documents. A PDF reader is available from Adobe Systems Incorporated.