Sustainability Videos & Lecture Series

Rob Melnick: Good afternoon. Could everyone take a seat and we can begin. My name is Rob Melnick, I’m the Executive Dean of the Global Institute of Sustainability (GIOS) here at ASU. I want to welcome you on behalf of ASU and on behalf of GIOS, the global institute, and also the Walter Cronkite School. This wonderful facility that we’re in, is theirs, and we appreciate Mark Lodato and our colleagues from Cronkite School helping us put on this special event with American Public Media and the Global Institute of Sustainability.

Tonight, we have a wonderful program that will be introduced to you in just a moment. I just wanted to let you know that the Institute, that this is a part of a series that the Global Institute runs on sustainability, where we bring people to campus from around the country and around the world to talk about prominent issues affecting the future sustainability of our community, of our nation and of our planet.

We’ve had a wonderful time with our colleagues from American Public Media today. I want to introduce one of them in particular to you who will then introduce the program this afternoon. That’s Ben Adair.

Ben is the Editorial Director of American Public Media’s Sustainability and Global Climate Change Initiative. He oversees reporters, producers, and editors to create a unified programming strategy across the APM National Portfolio. Even though I have many other sentences saying how wonderful Ben is, he’s asked me to scratch those in the interest of time. So, Ben, let me ask you to come up here and welcome you [applause].

Ben Adair: Okay, thank you. I just want to say, first of all, thanks to everybody here at Arizona State University. It’s been such a pleasure working with everyone and putting this together. We’re all really, really excited about the event tonight. Specifically, thanks to Rob, Karen Leland, Vanessa Beale, the rest of his team. Thanks for Dean Christopher Callahan and Assistant Dean, Mark Lodato, at the Cronkite School.

Both GIOS and the Cronkite School are home to real innovative programs that are dedicated to the betterment of society and tackling the myriad challenges looming in our future and also today.

Most of you recognize the names up here, sponsoring this event, but there’s one name that is maybe a little less familiar. It’s also associated with this event, and that’s the Gary Comer Global Agenda. A lot of people ask me, "What is the Gary Comer Global Agenda? Who is Gary Comer, and what’s his agenda?"

Gary Comer, for those of you who don’t know, is a businessman. He’s probably best known for starting Land’s End. He was a sailor, and he had an infinitely curious mind.

In 2004, after an Arctic sailing expedition that was far too easy, there was no ice mucking up the routes, he turned his mind to climate change. He assembled some of America’s top climate scientists. He funded them, and this was cutting-edge research, all geared to try to figure out what exactly is going on here; but, doing the work, is not enough.

Gary Comer knew that communicating the size of the challenges, what we know and what we don’t know, possible solutions, communication is what’s going to inform people to make the decisions that will affect their own lives and change the world. That’s something that we, at Marketplace, also happen to believe. It’s a responsibility that we have to our 10 million weekly listeners.

Sustainability means organizing our economic activities to meet society’s present needs without compromising future generations. It’s more than a "buzzword" on some annual report. It’s more than the environment. It’s more than energy and resources. It’s more than green jobs, the green economy or your green thumb. It’s the challenge of or generation, and it’s something that Marketplace and American Public Media have dedicated reporting resources, airtime, and even whole shows too.

That’s been going on for seven years now. So, if you would allow me a couple of "buzzwords," sustainability is the challenge and the opportunity to make all of this, our economy, our political systems, the markets, our communities to look at it all together, roll it up and actually try to figure it out, make it work, maybe even thrive.

So I’m really excited to be introducing these two men who know this territory a bit better than most, David Brancaccio. I’ve been very happy to be working with him over the last six months or so. He’s our Senior Correspondent for Economy 4.0, and I’m sure he’ll say a bit more about that, but I’ll give you the tagline. He’s exploring how to make our economy work better for more people. He’s just back from the Middle East where that very question toppled regimes, caused social unrest and has been really exciting. Those stories are going to appear on Marketplace next week.

John Hofmeister is the Distinguished Sustainability Scholar at Arizona State University’s Global Institute of Sustainability. He’s also the founder and CEO of Citizens for Affordable Energy. He’s the former President of Shell Oil. He’s the author of a book called Why We Hate the Oil Companies: Straight Talk from an Energy Insider.

With that, I’ll turn it over to David.

David Brancaccio: Thanks, Ben, I appreciate that. All right, general knowledge quiz, raise hands! Who knows what the Large Hadron Collider (LHC) is? Very good, the big science project in Switzerland, billions of dollars was going to get to-they’re looking for the ’God particle’, sort of the origins of the universe.

Do you remember what the fear was before it turned on the first time a couple of years ago? Remember what the concern was? Right, that it might form a black hole that would suck in the entire solar system, right?

When you asked scientists about this, they didn’t say there’s no possibility, they said it was a small possibility. So people got worried, I got worried, and they turned it on in September of 2008. You know, and what happens? Lehman Brothers disappears, Freddie Mac disappears, Fannie Mae, gone!

If you take a look, it’s within hours, okay? So that was funny the first time. It broke, do you remember, it broke after they got it fired up the first time. Then they turned it on a second time, November of 2009, late November in Dubai goes bust almost instantly, okay?

So what? Well, it’s operating now at half-power, okay, and they won’t put it back up to full power, they say, until 2014, okay? When you know that financial crises happen about every six or seven years, do the math! Yeah, I know.

So why am I mentioning this? Well, besides demonstrating that I need some remedial work on correlation versus causation, it’s a reminder that very bad things do happen, and that scenarios that seem overly grim, pessimistic, and over-the-top actually can terrifyingly come to fruition.

I’m sitting here with a gentleman who is very worried about just one of those scenarios, about what happens if America stays on its present path regarding energy policy? If we keep doing what we’re doing, Mr. Hofmeister, where do you see us ending up?

John Hofmeister: If we stay on the path we’re on, which looks almost inevitable, because of our inability to agree a way forward, we’ve now had eight presidents who have promised energy independence. They’ve been supported by 19 congresses, since 1973, the first Arab Oil Embargo.

I say we’re headed for an energy abyss, which will test the foundations of our society, could potentially destroy the sense of equanimity that exists in our culture and we will be in gas lines, and we will be living with blackouts like a Third World Country by 2018, certainly by 2020. It’s almost too late to push back that inevitability.

Brancaccio: Someone going into high school now could come out of college into this scenario.

Hofmeister: That’s right, and the economic consequences of that, the social consequences, the civil unrest potential of not having electricity in the heat of summer, not having electricity in the cold of winter, companies laying people off because they can’t have a predictable production schedule, grocery stores throwing out their frozen foods, repeatedly, or stopping carrying frozen foods and remember the gas lines of the 1970s.

We’re not nice to each other in gas lines, and you could just imagine somebody with a sick child, having to get to the emergency room, doesn’t have any gas in their car, they ask if they can get in front of somebody in a gas line and somebody shoots them.

You may say that’s hypothetical, you may say that’ll never happen, but people got shot in the 70s, ladies and gentleman. People got beat up. They got their cars banged on because they were desperate, and the sense of desperation. I mean, Vancouver last night, when people get upset, there’s no control over what might happen. I worry about that.

Brancaccio: And these are the nice Canadians [laughter].

Hofmeister: That’s right

Brancaccio: I, for one, am not that interested in embracing that kind of "Mad Max" future. So I’ll be very interested to hear, in just a moment, who you blame for this, but also in particular ways forward from that abyss, but first let’s talk about you.

I want to know just a touch about your personal journey, John. At the point when most guys have a midlife crisis and buy a red Camaro, you went into the oil industry. You got a job with Shell Oil as president. Tell me about that.

Hofmeister: I spent 25 years of my career, after getting a Political Science Degree, from Kansas State University, in companies that consume energy, big time, or use energy, big time. General Electric for 15 years, Nortel for 5 years, a telecommunications company and Honeywell, right here in the Valley. I used to come over quite often to Garrett Engine. They all use energy.

Then, I got recruited, into Royal Dutch Shell in a global role in the Hague, and for the last three years of my Shell career, I spent as President of US Shell Operations.

Brancaccio: What period was that? Was that a barrel of laughs, that period?

Hofmeister: 2005 to 2008. I got six months into the job, Hurricane Katrina came along, and panic time. If you were along the Gulf Coast with Katrina, you still, all these years later, all you hear are Katrina stories in New Orleans and the whole Gulf Coast. Ike stories, Rita stories. I did all the hurricanes, but also I did the first high gasoline price era. I spent hours and hours testifying in front of Congress trying to explain the high gas prices.

Brancaccio: Was it that nightmare in 2008, that time?

Hofmeister: 2007 and 2008. It was when gas first hit about $3.50 a gallon Congress finally decided, "We need to understand this a little better, let’s call in the oil companies." So I did the New York Times front page, you know, take the oath bit, get your picture in the paper.

What just happened in May with the five CEOs, three of whom were brand new, and two of whom had experience from the last time around, and what I found in testifying in front of Congress was just as much misinformation, disinformation and lack of information, that I was finding all over the country, because I didn’t sit in Houston and bury myself in a bunker with high gas prices. I took 250 Shell managers out to 50 cities across the US to engage real people on what gas prices mean to their life, because I wanted our managers to be sensitive to this, and let’s go out and face the music.

They come to our gas stations every day, some six million people visit Shell stations every day, and they’re angry. They’re upset, they’re disturbed and they don’t know why. So we have an obligation to them, as consumers of our product, to go explain it. I met with 25 governors. I met the mayors of the top ten cities in the country, hundreds and hundreds of elected officials, but most importantly tens of thousands of everyday people.

I became convinced during that period, 2007-2008. This country can’t continue on its present course. So I had to retire at 60. Shell boots you out at 60 if you’re a senior executive. I said, "What are my options?" I have a lot of different options but I decided I want to go into the not-for-profit world as an educator. I think people deserve to know what it is that we are facing as a nation because as an energy expert, somebody who is investing billions and billions of dollars in the future, people need to know that a. we can have a future, we can have a brilliant future, but we need to have an enabling future.

The only way to have an enabling future, in a world that has more energy that it will ever need, in a country that has more energy than it will ever need, is to have a plan. We have no ability, no capacity in this country, to make a plan, a short-term, a medium-term, a long-term plan, a plan that goes 0-10 years, 10-25 years, 25-50 years. That plan can not only take into account the production of energy and the conservation of energy but the environment as well, because the implications on the environment, from whether it’s hydrocarbon, or uranium, or wind, or solar, or biofuels, huge implications from every source of energy that have to be managed.

There’s no such thing as "clean energy." There are environmental implications from every form of energy, land use for solar and wind. I’ve been on solar farms and wind farms that are embarrassing with the land abuse that’s taken place, because in the beginning there haven’t been any standards. You get gully washouts, you get land erosion. Nobody ever talks about the number of birds knocked out of the air, to the death, as they try to migrate through wind farms, but you know how many birds are covered with oil at an oil spill because it’s mandated that you count and report the birds.

Brancaccio: Well, I think that the Audubon Society does complain about, what do they call it, wind generators, something like condor Cuisinarts, you wrote?

Hofmeister:

But the real issue is, to me, lack of information, lack of information in a democracy that only succeeds if people know what is possible, what to vote for, what to vote against, because they know something. So my passion, and it is a passion, and I’m doing it pro bono, is to educate as many people as I can as fast as I can so we can head off the energy abyss. We’ve got to head it off. Our society cannot tolerate what I described earlier, and it’s not too late to head it off.

Brancaccio: How much of this potential abyss is the making of your old industry itself? You accuse the oil and gas industry of being tone deaf, even obnoxious, essentially, in your book, but you do think they’re right on a key point. When the oil companies say, "We gotta drill a lot domestically and quickly."

Hofmeister:

We spent a 100 years building a hydrocarbon economy because we had plenty of hydrocarbons. You don’t suddenly turn that off. You don’t suddenly talk about oil in the past tense, which has been happening lately, where the statement in the State of the Union message this past year, and I’m a registered Democrat, so don’t think this is an oil guy banging on a Democratic president. I voted for President Obama, but when he said, "Why should we invest in the-why should we subsidize the past when we could invest in the future?"

Anybody that thinks oil’s in the past tense should rethink their position. I’m saying it as diplomatically as I can, because we’re not anywhere near peak oil yet. We’re not anywhere near the maximum production and consumption of oil. While we were in a recession, for example, China built and bought 37 million new cars that only use oil. So the demand for oil today is 86 million barrels a day. Before we’re halfway through this decade the demand will be 96 million barrels a day. Where are those 10 million barrels coming from?

China has a plan. China’s plan, and they’ve already been at it for three years, is to subsidize with loans, state-owned oil companies so that they get guaranteed oil supplies which takes new oil away from the global trading market and we’re declining the production of oil in this country by making it very difficult to drill for more oil. The most oil you get from a well is when it’s brand new. Then it goes into decline immediately. So if we don’t keep drilling and we don’t produce our domestic oil, there’s going to be less oil available to import because China is consuming ever more. They’re going from 9 million barrels a day consumption to 15 million barrels a day consumption by 2015. That’s only four years from now.

So you ask about the industry. The industry, like every industry, has self-preservation in mind. What they do is drill for oil and gas. They know there’s plenty of oil and gas. They don’t really think that material alternative energy is commercial yet, although many of the companies, and my former company in particular, has invested billions of dollars in alternative forms of energy, but knowing that, knowing how inefficient and ineffective alternative forms of energy are, you develop an inherent knowledge that says, "Well, we better do more gas, we better do more oil, because that’s what we’re going to live off of," that’s what’s going to lubricate our economy for decades into the future. Our shareholders deserve a return on investment and so we better look out for ourselves.

So, yes, the industry is very self-protective, but no more self-protective than bio fuels industry or wind industry, or solar industry or public utilities looking out for their interest, whether it’s coal or uranium (meaning nuclear) or other forms, natural gas. We have a system that’s predicated on self-interest. Everybody is looking out for themselves.

Brancaccio: But they’re very effective at looking after themselves, when you take a look at how much money that industry has spent on lobbying Washington. I saw one figure, last year, $175 million, and in then someone else added up all the money lobbying by all the environmental groups. It was like $22 million. They’ve got a lot of clout with that self-preservation.

Hofmeister: You bet they do.

Brancaccio: Doesn’t that produce an investment in the status quo rather than turning to alternatives?

Hofmeister: That’s why we need a plan, but we can’t get a plan for three reasons, four reasons, actually. First, the nation is caught in a trap of perverse partisanship, where it’s more about power than it is about the nation. It’s more about getting or keeping power on the basis of party affiliation than it is about what’s good for the nature. Whether it’s the deficit, whether it’s healthcare, whether it’s energy future, the partisanship is supreme.

Number two, we have politicians who gear their priorities according to the nearness of the next election. I call it political time. Political time prompts energy time all the time. Energy time is decades. Political time is two years-four year cycles.

Third, we have allowed US government to grow so big and to be so involved that we now have 13 cabinet level agencies governing energy. We have 26 congressional committees between the House and the Senate, governing energy, and every federal judge appointed for life can decide at his or her bench the energy policy of the nation, based upon a case brought before their bench.

So we have judicial, legislative, and executive branch all managing energy simultaneously. Do they talk to each other, do they cooperate? No, they don’t.

The fourth problem is what you just brought up, the special interest money. We call, what in other countries call corruption, what we do legally. Who makes the law that makes the corruption legal? The fox is in the hen house. The fox designed the hen house because the fox is getting the money from the special interest lobbying groups. It’s called campaign finance and so that campaign finance is money that is declared legal, that comes their way, which is the source of what? The next election.

So with the special interest money, wherever it comes from, individuals, organizations, corporations, you name it, people are going to follow the money and they’re going to do what the money asks them to do. That system is going to take us to the energy abyss.

Brancaccio: Forget the fourth, I’m going to offer a fifth. Maybe also part of the problem here is us. I was hearing a British expert on energy speak and he used a term I hadn’t heard before, "hyperbolic misdiscounting." What the heck does that mean, but it apparently means human beings have a very hard time taking the future seriously. It’s vague, it hasn’t happened, they know it’s kind of coming, but the immediate, especially if there are pressing problems right in front of us, that’s concrete.

We have this amazing capacity. It’s like asking a young person to stop smoking when they’re 16 years old and they’re trying to be cool with their friends. They know about the lung cancer stuff, but it’s when they’re 40 they’re going to get that. They just can’t fully visualize it. Maybe politicians are simply catering to the fact that we all have this disease.

Hofmeister: I call that political time, because it is a very short-term focus, where what really matters is, "What do I do between now and the next election to make sure I get either elected or re-elected?" That’s what drives them. We’re already into the 2012 campaign, deeply into the 2012 campaign. Things are being decided today based upon the bet that either party is making or candidates, potential candidates are making, relative to November 2012. There’s no day after that which is more important than November 2012. That’s what’s driving the nation. When it comes to energy, that doesn’t work!

Energy takes time. When you put a new deepwater platform in place, it’s a 30-year project. When you build a new power plant, it’s a 50-year project, and on and on, so that energy-you know, the energy system that we have, we’ve got 600 coal plants. The average is nearly 40 years old, average age, with plants that are designed for a 50-year design life.

We’ve got 104 nuclear plants. We haven’t built one in 30 years. The average age of nuclear plants is just over 30 years, design life of 40 years, permitting life of 40. So the NRC has improved license extensions for 60 of those 104 plants. So people who now live next to a 40-year-old plant, they’re going to get to live next to a 60-year-old plant. How safe and reliable are 50- to 60-year-old nuclear plants?

Well, we just found out in Fukushima, 50-year-old technology, 50-year-old construction, not a good scene in Northern Japan right now.

Brancaccio: We’re still voting on a nuclear future after what happened in Japan?

Hofmeister: Absolutely, I think we have to have a nuclear as a part of the mix. Why, because uranium is two million times more powerful than the BTUs that you get out of coal, gasoline or diesel, two million times. It’s carbon-free and the waste management is possible. We see how France manages waste. It works.

France is using technology invented in the United States to reprocess waste. There’s no debate in France about the storage and the reprocessing of nuclear waste. In this country, it’s one big food fight over Yucca Mountain in Nevada, where $20-some billion has been spent to build a facility to store waste. It’s an Act of Congress to build that facility. Administratively, the Executive Branch is taking away that opportunity.

I say in my book, you know, Harry Reid never wanted Yucca Mountain. Harry Reid was supporting the candidacy of one of the Democratic candidates who happened to win. The reward is to shut down Yucca Mountain. I think it’s a political bone. It’s now payback time. Nobody has been against Yucca Mountain in the other 49 states, and the way we got to Yucca Mountain was through a congressional act, not an administrative decree taking it away.

What happened to the rule of law? So it’s now being investigated by Congress, as it should be, but here’s the point. Nuclear energy is so powerful that if you manage the risks, how can we not do that? How should-why wouldn’t we-why shouldn’t we expand it? We know so much more now than we did 40 or 50 years ago when we built 100 plants. Why don’t we just reinvest, but we can’t. Even the heads of nuclear businesses are not willing to reinvest because we put so many disablers in place, the most serious of which is a failure to deal with waste. If we don’t deal with waste management for nuclear then we shouldn’t build any more.

Brancaccio: You said that if we managed the risk. I mean, one of the other lessons of Fukushima is the fact that bad things can happen with huge effects when it comes to that technology.

Hofmeister: I submit that bad things can happen with every form of energy from geothermal, from hydrogen to wind, solar, biofuels, coal, oil, natural gas, hydropower. What are we going to do when the those dams that hold back so much water get so silted up that the actual utility of the dam is about gone.

You get some of the old dams built in the 1930s that have a huge silt problem now, and we’re not going to get the level of electricity we would like and water is a precious resource. So every form of energy has implications that have to be managed. Every form of energy has a risk management responsibility.

Brancaccio: I want to hear-I have a solution to all our problems that I want to run past you in a moment, but I want to give you a shot at your fascinating solution about getting over this, addressing this issue of the political system being unable to deal with this long-term issues. It involves almost drawing inspiration from the beloved Federal Reserve.

Hofmeister: Exactly, during the 19-I mean, I just believe in history. I believe in political science and politics and democracy. If you go back and study American History in terms of how this nation managed its monetary system, it basically did not. The Constitution was silent on Central Bank. For the first 100-year history of the nation there was a huge debate and an argument over whether we should or shouldn’t have a Central Bank. Alexander Hamilton versus the others who felt there should be a central bank.

After a century of wrestling this, we were having the second half of the 19th century was chaotic in terms of the rise of industrialization but not enough capital. We celebrated the beginning of the 20th century by the US Treasury declaring bankruptcy.

We don’t teach that in high school. We don’t teach Americans that the US Treasury went bankrupt in 1907. It’s pretty embarrassing. We also don’t teach the fact that after it was bailed out by JP Morgan, and Wall Street financiers with the promise that this will never happen again, it did happen again, in 1912.

So in 1913, in the face of these two crises, two bankruptcies of the Federal Government in less than a decade, Congress finally acted and the White House went along with the Federal Reserve Act.

In the 98 years since 1913, the United States of America has become the world’s largest economy with the world’s most safe currency. There have been human error judgments made by the Fed over the 100 years. Not enough money in the 30s, too much money in the last decade. So they’ve proven that they can make mistakes, but they’ve also proven that they can fix mistakes.

I’m saying, with that kind of independent regulatory authority to manage a monetary system for the good of society with a Board of Governors who happen to know what they’re doing, generally, with not worried about political time, not worried about Democratic or Republican solutions to problems. Why don’t we learn from that?

Given that energy is such an important part of a 21st century US nation, and actually we’re becoming noncompetitive because of expense of energy or scarce energy, man-made, why don’t we look at the solution for the monetary system and apply those principles to the energy system, and create an energy Fed, a Federal energy resources board with an Act of Congress, so that it’s democratic, have a president sign the bill, create a board of governors who know what they’re doing, 14-year terms just like the Fed.

They don’t care about elections, they care about America. They care about society. I believe that technology is a way of remaining democratic because here’s what I fear. We get into the age of energy abyss, we’re going back to 1950. We’re going to find, re-find the solutions, which made the second half of the 20th century so successful for this nation.

We’ll go for coal, we’ll go for oil, we’ll go for gas. We’ll "drill, baby, drill" and go right through the backyard swimming pools of anybody that happens to be in an area that has oil or gas because we will not be tolerant of not having enough energy. Rather than revert to an unsustainable 20th century solution. Let’s have a Fed that has four authorities, a Fed for energy, to manage over a 50-year timeframe, the sources of energy, how much energy from what type of supply, the conservation of energy with the technology. Let’s rule out the internal combustion engine by 2035, replacing it with batteries with hydrogen fuel cells, with mass transit systems.

Let’s get rid of the internal combustion engine. My goodness, it uses 40 percent of all the oil we consume. It’s dirty. It’s only 20 percent efficient.

Third, manage the environmental implications of all those different forms of energy to protect the land, the water, and the air that we need, not just for this generation, but all future generations.

Fourth, make sure we have the infrastructure that moves energy from where it’s produced to where it’s consumed.

With that kind of long range planning, just like the banks under the guidance of the fed can go serve their customers and make money for their shareholders, when they’re not abusing the privilege, which they did in the last decade, the energy companies can go do what they do, take care of their customers and make lots of money for their shareholders, but according to a plan.

Brancaccio: But you think that the energy Fed is democratic? It sounds un-democratic, the way the Fed is often accused of being un-democratic. You appoint people who have, not jobs for life, but what are you giving them? Fourteen years?

Hofmeister: There is certainly a non-democratic element that is created by democratic processes, and if Congress ever is unhappy with the Fed, they can change what the Fed does by an Act of Law. I would submit that with a Federal energy resources board they can do it. If they don’t like what the board’s doing, they can change the law, but let’s have the law first to see how they do.

In the case of the Fed, 2010 July, Financial Regulatory Reform Bill, Dodd Frank, what did it do to the Fed after the disaster of 2008? What did it do to the Fed, it gave it more authority. Congress gave the Fed more authority after the debacle of the financial failure of this-the near financial failure of the country, because in its wisdom it can see that, Lord knows, if you gave the responsibility to the monetary system to Congress, Heaven help us.

That’s what we’re doing with energy. Heaven help us, because Congress is doing nothing and the presidents, the last eight, all talented people have done little or nothing for our energy future.

Brancaccio: The trick is how to pick these grand poobahs of energy. I’m sure some of your old associates in the oil industry would love to nominate their candidates for this particular 14-year thing. That’s something that-that’s the key to this.

Hofmeister: The law should say what the makeup of the Board of Governors should include. As I write about it, yes, people that know about energy. Yes, people that know about technology. Yes, people that know about the environment. Yes, people that know about consumer needs and interests.

So, by diversifying the Board of the Federal Energy Resource, you could have a collection of interests so that all the appropriate sectors of society are represented by a board of experts who know what they’re doing.

Brancaccio: Let me move now by asking you, Mr. Hofmeister, about climate change. You worry about it in the book. You worry about the effects of too much CO2. I mean, one British reviewer had an interesting point about you that you don’t seem worried enough about it. You sort of see it as like other pollution, we want to mitigate it, like garbage or something. What is your feeling and how worried are you about human activity changing the climate?

Hofmeister: I do believe that human activity, in many different forms, is destructive of the biosphere, not just in the energy space, but in the agriculture space, in land use management issues and so forth. So there are many things that man does that jeopardize the future of the biosphere. When it comes to hydrocarbon energy, and its impact on the environment, I have no doubt that there’s impact, but I also believe that there is no quick fix available. We’re going to have to learn to deal with a continuation of hydrocarbons in the energy system, whether in this country or whether in China.

China, by the way, is getting ready to build five million new kilometers of highway. What do you do with five million kilometers of highway? You fill it up with cars and trucks and buses! They’re going to build 40 billion square meters of new space under roof in the next decade. What do you do with 40 billion square meters of new space? You heat it, you light it, you cool it, as the case may be, more energy.

So we could eliminate, totally eliminate hydrocarbons in the United States of America, suffocate and watch the world be destroyed by a country that we don’t control. It’s unlikely that they would agree to a voluntary agreement to be held accountable for hydrocarbon waste reduction through some international agreement if it interfered with their economic development plans.

Brancaccio: The argument is that we would lead by example. It’s going to be hard to lean on the Chinese if we’re drilling every which way, domestically.

Hofmeister: That’s why we need a plan. It all comes back to a plan. We can’t willy-nilly. That’s one of the reasons I’m so pleased to be a part of the Global Institute of Sustainability so that we can discuss these things with people who know what they’re doing, who know something far more than I do about the various technologies available. Quite frankly, what it comes down to in my mind is, we have not yet tried to make hydrocarbons clean.

I think we should try that. I think technology is available. We know that automobiles are 90 percent less polluting today than they were in the 1990s, a 90 percent reduction in what comes out of the tailpipe of a car.

Brancaccio: You also must be having faith in carbon sequestration.

Hofmeister: And carbon sequestration, which we have yet to try, except that we know that in West Texas, carbon dioxide taken from the earth, pumped back into the oil fields, is producing more oil in the oil fields because of the carbon sequestration. So we could do a lot of things with putting carbon into the ground as a liquid, where it turns to crystal. It’s not the gas going in, it’s the liquid going in that turns to crystal and stays there forever.

So why don’t we try that? Why don’t we give it a go instead of just talking about it. Let’s see. Let’s see with coal. I’ve seen sustainable mining. Actually, I spent-I went to Pike County Kentucky and Hazard County Kentucky last November. They’re proud of the restoration, the reclamation of some of their open surface mining because now, you know what, they have flat space.

They had no flat space in Eastern Kentucky or Western West Virginia. It’s all hills.

Brancaccio: Chopping the hills down is a good thing?

Hofmeister: They chop the hills down. They can now put shopping centers there.

Brancaccio: As a bicyclist I can see the point that I wouldn’t have to ride up hills, but are you serious?

Hofmeister: They are very serious about how they reclaim land and clean up their dirty mess, over time, and provide jobs for their citizens with how they’re managing both deep mining and surface mining. They believe that is a valuable commodity, which they’re proud to produce.

I went to a deep mine six miles underground. No human being touched the coal. It’s all done with machinery and equipment. What the human beings were doing was making it safe and making sure that there was no dust, that there was ventilation. So it was all about the engineering of the mine. That’s where the human capacity was applied. Machines did the dirty work. So nobody was perspiring. Nobody was in a terrible physical condition.

Yeah, they were dusty, they were dirty, but there can be ways of doing dirty work in cleaner ways. So when it comes to global warming, climate change, I do believe that if we put our technical talents to work on managing waste, our land, our water and our air could all be cleaned up. The human impact could be massively reduced because just stopping using hydrocarbons is not an option. We may have a dream one day, but today it’s not an option.

There’s 250 million cars on the US highways. Over the next five years, the president is proud of his program to have a million new hybrids, hybrid electrics and battery cars. I’m proud of it too, but that’s a million over 250 million. Who knows how many more cars will be built that are only gasoline or diesel powered, and the rest of the world’s doing the same thing.

So to think that we’re suddenly going to move off of hydrocarbons, ain’t gonna happen!

Brancaccio: I’ve got one more option for you that I want to discuss with you in a second, but just in eight to nine minutes, your questions. So start formulating your questions. I once got quite a lesson in this area, I was-there was a momentous news story going on in Britain. The prime minister had said she was not going to run for office. She was essentially being shoved out.

It was Margaret Thatcher in a party coup. She was going to do a keynote radio interview on the subject. I was wondering what will the interviewer ask for a question? Okay, and what would I ask?

I came up with this very long-winded question that would demonstrate my profound wisdom about the British political system. So I tune in to like, essentially, Morning Edition, the Marketplace Morning Report and "Good Morning America" combined as the show that had that kind of clout.

On comes the prime minister of the country and the question the interviewer asked was, "Ms. Thatcher, what gives?!"

Now, I’m sharing that with you to give you a sense of the model question, which is a question, not a statement and reasonably punchy if you can, so I can get a lot of questions in.

I was talking up at an accredited institution at Cambridge Massachusetts, Brand X. Famous economist there, former Chief Economist of the International Monetary Fund. We were talking about carbon dioxide in the atmosphere and he said-his name was Ken Rogoff. You may have bumped into him. He’s a very smart guy.

He says, "I think most economists would favor having a tax of any sort on polluters."

I asked him, "Carbon tax?" You know, "Carbon tax?!!??"

He said, "Yeah." He said that whenever he would approach a presidential candidate or some other top leader about this their face, the blood would drain from their face. It’s not politically practical, but he said, "We need to raise the money, given the National Debt. We’ve got to tax something. Why not tax something that we want less of," which is his quote.

What about a carbon tax?

Hofmeister: Well, I was part of the United State Climate Action Partnership when I was the President of Shell, one of the founding companies, which was promoting a legislative framework for a cap and trade system. We debated long and hard about carbon tax versus cap and trade.

We came to the conclusion that capping carbon was essentially a good public policy. Cap the amount of carbon that can be put into the atmosphere and then trade credits. People who could figure out how to use less carbon, through technology, or through investment in non-carbon-producing energy sources could use those credits to trade in the open marketplace and have the incentive of making money over the sale of those credits. With the profit made from the sale of those credits, put more money into more carbon reduction.

I’m a believer that market forces are very powerful and that incentives work far better than disincentives. That’s why we’re debating the ethanol incentive today. I mean, the Senate that voted against ethanol incentives. There would be less ethanol if there were not incentives to produce ethanol or other biofuels. There would be-if there weren’t incentives for wind and solar, we wouldn’t be building wind and solar.

So incentives to reduce carbon, to me, are a far better solution than a carbon tax, which has no reward built into it, only punishment.

I sat with Ed Markey, of the famous Waxman-Markey Bill, and I said, "Congressman, I love you, but you’re bill is a disaster. We’d better start talking about Plan B because the Senate is not going to take up the Waxman-Markey Bill and you will have wasted all of this time and energy and you will not have anything but embarrassment for having your name on that bill."

He said, "What’s Plan B?"

I said, "Plan B, unlike your bill, would take 25 years to implement with a five-year gift period at the beginning. What happens in the five-year gift period is all your opposition in Corporate America retires. They go away. The next generation selected by boards of directors to replace the retirees know the law is there."

So there going to run for office to become the CEO on the basis of what are they going to do about capturing carbon credits. They’re going to use their investment plan over many years to change how they do business, and every five years start with a-in the second five-year period make it a 20 percent tax or 20 percent cap reduction. Every five years, another 20 percent.

Over that period of time they completely change the nature in which they do business. At the end of 25 years, you have dramatically reduced carbon and it’s all been paid for by trading credits. Everybody’s a winner, but you’ve created a punitive bill that punishes certain industries for just existing. Everybody’s going to resist that, especially the special interest lobbyists, and that’s what killed it in the Senate.

So he said, "Well, that’s interesting, where were you when we were debating the bill?"

I said, "Right here. You never wanted to talk to me about it."

So they really messed up on the cap and trade, and now cap and trade is considered dead for generations. I’m sad about that because I do believe that we should do with we can with our knowledge, or technology and innovation to get carbon waste out of the atmosphere.

Brancaccio: What I don’t fully understand in listening to you, though, is where does the pressure come to look at alternatives and develop alternatives if you really want to boost domestic production of fossil fuels as much as possible. It’s sort of like, it seems to me, the philosophy of, if we have traffic congestion on a highway, building another lane, what often happens is that more traffic pours into the lane. You don’t actually speed up the traffic. You want more domestic production. So where, then, is the pressure to do what you’re calling for with alternatives?

Hofmeister: The pressure comes from the preferred alternative, which is advanced by the long-term energy plan. For example, if anybody has never driven a car with a hydrogen fuel cell technology as the power source, I suggest they try to do that. Hydrogen fuel cell vehicles are so much more fun to drive. They are so much more efficient. They will, over time, be that much less expensive for the lifetime ownership of a fuel cell vehicle, but it would take 20-25 years to put hydrogen fuel cells in mass quantity into the American system.

Meanwhile, we need more oil. Or, we make oil so unaffordable that we completely damage equality in our society. We end up with "energy haves" and "energy have-nots."

I’m very worried that the current method of pricing energy ever higher is going to create that have/have not society, which is going to splinter this country that has based upon equality for all, but there won’t be equality for all. It will be inequality for those who can’t measure up and who can’t afford.

Also, just like the Chinese are going to build 174 new mass transit systems in the next ten years, what’s our plan for mass transit? Phoenix has a nice system, but it goes just one line. You can go anywhere you want on that one line, but don’t try to go another direction; you can’t get there from here.

Brancaccio: You have some very interesting ideas about land use in general that get to an interesting notion of rethinking growth in general. In other words, maybe we could be-maybe we could still flourish without the kind of growth that requires such a fire hose of energy inputs.

Hofmeister: I think the most inefficient use of energy in our economy is this notion that every person has their own castle with their own roof and their own four walls, their own plot of land, with the requirement that the grid be supplied to them wherever they decide to put their home or their castle or their cabin. It is the most inefficient use of energy that we, as a nation, could have ever have imagined and we’ve done it, and that’s how we live.

When you visit China, when you visit Asia, millions and millions of people live not out, but they live up. The land use management in which anybody can build anywhere they want, based upon how much money they have, and they can build as big as they want and as far out as they want, and they will still get electricity from the grid, yes, that’s a degree of freedom that we once could enjoy, but there were only at one point 50 million of us, 100 million of us, 200 million of us?

We’re on our way to 500 million people and if everybody can live out and about, and we don’t do something about land use management in terms of determining our own destiny, we’re going to collapse. We’re going to need ever more energy that becomes ever dearer.

So I just think there’s a time and a place where we need some national discussion and still maintain our democratic principles to put incentives into living up, and living closer.

I mean, even in France, if you look at France. People said, "Well, don’t look at France. That’s not a good example," but farmers don’t live on their farm. They live in the village and they commute to their farm because they know that it’s safer, it’s more economical to all live together.

If you visit Hong Kong or Shanghai, as I said, people live up, and they’re happy. They like their life. So I just think there’s different ways of managing energy futures to where we can sustain the planet, sustain freedom of choice, freedom of lifestyle, but with some degrees of sustainability-for the future.

Brancaccio: John, why do you stay engaged in this? You know about our political process, the effects of money in our political process. You write about it. You know about human nature. Why not check out of this debate? I mean, really, you’re going to drag this forward? Why would you think so?

Hofmeister: Well, I’ve got a ten-year plan, and then I’ll have another ten-year plan, and I’ll keep doing ten-year plans as I’ve done in the last 40 years, for as many years as I can into the future. It’s about caring deeply about how I got to where I got to, and all the learning and the education that took place, and I’m still learning and being at the Global Institute of Sustainability is a chance to learn even more.

Brancaccio: That’s your nonprofit.

Hofmeister: No, my nonprofit is Citizens for Affordable Energy. The Global Institute is here at Arizona State. My not-for-profit is all about educating grassroots Americans because I think the more people know, the more freedom they have. The more freedom of choice they have.

When they’re locked into a small paradigm, or a very narrow paradigm, then they get very unhappy when things don’t work out right, but the more they know, the more options available. I mean, how many people know that we have ten forms of energy, and we’ll literally run out of any of them. It’s just a question of which ones do we choose to use when, because the earth is bounteous, particularly with wind, solar and tidal movement. A hundred years from now, we may get 90 percent of our electricity from the wind, the sun and the tides.

It’s free! Free source! So we move through stages, but the more people know, the more they know, the more they can do, and so I just have a passion about making things better. Whether that comes from being a parent, or a grandparent, whether it comes from working in companies that I think-you know, remember "GE brings good things to life?!"

Brancaccio: Is that what the [voiced over] line was?

Hofmeister: I was part of that whole ten-year period of "we bring good things to life!"

So, to me, it’s about making things better. That’s what universities do. They make things better and they teach people what they don’t know. So the connection here, to try to bring knowledge, my knowledge is liberal arts, social sciences. That’s the problem that we have the greatest difficulty with in our culture.

We’re good technologists. We’re great innovators, using technology, but try to have a common decent discussion between a Democrat and a Republican, [makes noise/heavy sigh]. I mean, global warming, when I was out doing the 50 city visits. We had physical altercations in town halls over global warming. That’s how little people know, and that’s how intensely they feel about it is, or it isn’t, a problem.

We took a security person with us everywhere we went and that person got a workout on a few occasions.

Brancaccio: Was it global warming or your Shell Oil pedigree?

Hofmeister: No, it was the debate in the audience. It wasn’t with the company. It was between participants in the town hall.

Brancaccio: Well, let’s hope this doesn’t degenerate into a fist-fight. It looks like a very well-bred audience here. I want to take some of your questions. I promised to do so. How are we going to do it? I’ll repeat the question. Is that how we’re going to do it? Are their microphones? Okay, so what you’ve got to do is keep it a question if you can and also tell me your name and affiliation if you wouldn’t mind.

Audience : Hello, my name is Sheridan Bailey. I build solar photovoltaic systems. We’re a contractor. My question is, obviously you are passionate about informing and educating people on this very important issue and you mention the political system. So I’m wondering if you’ve conceived of, or thought about, the forms of political action, or political infrastructure, that would enable-supposing this group were all charged up and said, "Yes, we want to do something," how would we create coordinated political action to achieve those long-term policy agendas?

Hofmeister: That is the whole purpose of Citizens for Affordable Energy. This is a social networking sight. You can Google Citizens For AffordableEnergy.org. The goal of this organization is a mass movement. The mass movement is built around four concepts: more energy from all sources; more environmental protections of land, water, and air; more technology for conservation of energy and more infrastructure to move energy from where it’s produced to where it’s consumed.

It’s the same thing that the Federal Energy Resources Board would do. The idea is, over the course of the next up to ten years, build understanding, knowledge, and awareness, create ambassadors. Ambassadors are local leaders, local articulators. Build out voluntary associations so that in ways in which we, as a people, Democrats and Republicans, right and left, we all need energy, but we’re not going to get the energy that we need on the path that we’re on.

So before we get into a crisis, let’s build the foundation for solutions and to me the solution is ultimately a political solution, created in a democratic way to manage our energy, govern our energy differently than we have till now. That’s the whole sum and purpose of this foundation. Change the way we govern energy, ultimately, on behalf of the American people, not through a party system, but through just massive grassroots support.

What will happen is people running for office will take note, "Wow, everywhere I go people want to talk about this. Maybe I better get behind this." Suddenly, we start seeing candidates for office, running on the basis of fixing the energy future of this country as part of their agenda. Then they get the support of those people. Suddenly, we start to get some people in Congress.

We get presidential candidates who pay attention to this idea and so that is how we go about it, but we start it organically. Social networking is the primary tool. It’s free. It doesn’t cost to be a member. It’s not going to cost to be a member. We can ultimately become a force in society.

Brancaccio: I haven’t fully surrendered my journalism credential at the door here, so I have to ask, where do you get your money for this nonprofit? Chevron, or one of those places [laughter]?

Hofmeister: Our budget is about-it’s less than $300,000 a year, which comes from only two sources, companies that consume energy and individuals that consume energy. It’s a consumer-focused effort. We take no money, by policy, from any company that produces energy, no matter what kind of energy they produce.

I’ve been offered money by energy producers, utilities, solar companies, oil companies, gas companies. I say, "Thank you very much, but we don’t want your money; we can’t use your money, by policy."

So we don’t need a lot of money and, I mean, my friend, T. Boone Pickens, who I admire and agree with his gas plan for the nation, spent $80 million dollars in less than two years on advertising.

I don’t think we need that. I mean, we’re changing the whole Middle East through social networking. I think we can change America through social networking and the $300,000 a year pays for the IT that we need to do that.

Brancaccio: Question? We’ll start there and then you’re queued up, someone over here? Tell us your name.

Audience : Jeff Luth; I’m a communication strategist. I fully appreciate the need to produce more oil and gas as a practical matter, in the near term, while we hopefully go down some other paths as well for alternative energy. My question is, why do we need to continue to subsidize that activity of the incumbent oil and gas process? Thanks.

Hofmeister: I was in-I was asked that question in congressional testimony under oath, as a matter of fact.

Brancaccio: Can you quickly explain how the oil industry subsidized it’s special leases?

Hofmeister: The oil industry gets certain breaks in the tax code to, for example, write down the costs of a dry well in a very accelerated fashion. It also gets different kinds of tax breaks for certain research and development investments where it can write off the costs of that investment.

So there are a number of tax codes. Some say it’s a subsidy. Well, technically, it’s not a subsidy. It’s in the tax code. I testified in front of Congress that-you know, when the price of oil is above a certain point, the tax breaks are meaningless. They’re not going to affect the decisions that would be made running a major multi-billion-dollar business, but they are important to small mom and pop operations who don’t have the billions of in flow and outflow that a big company might have.

So you need to be discrete about how you would change the tax code, but you also have to be sensitive to the fact that if gas prices drop, or if crude oil prices drop, I’ll be knocking on your door because otherwise I’m going to stop drilling. I’m going to lay people off, but with those tax deferrals it keeps me goin’ longer when prices are low.

That’s historically why those things were built into the tax code. So I have no problem in the democratic process. If the democratic process says, "We’re changing the tax code," okay, change the tax code. It may affect how I make decisions in the future, particularly at a low oil price period, which could occur, but that’s one of the products of being in a democracy.

That was a contrary position to some of the other companies, however, so there’s no uniform voice on this. There are different points of view, but in terms of the multi-billion-dollar opportunities that I was looking at in those days, I took on a different opinion than some of the other companies.

Brancaccio: The question over here, and I want to give equal opportunity.

Audience : My name’s Mark Wilhelm, Green Ideas. We’re sustainability consultants. I’m curious about the idea of leveraging the web and leveraging your organization in coordination with GIOS, to essentially develop using a Wiki type of an approach, a 50-year roadmap for energy policy because I agree with you, 100 percent, we’re not going to see it pop out of a political [inaudible] we call our government currently. The concept of being able to develop that, what are your thoughts?

Hofmeister: I think that’s absolutely the right direction and what we’re trying to do is build more involvement by more people because there will come a time in the not-to-distant future where we have to start getting specific about the plans that we would propose in terms of solutions. We’re not there yet. We’re a new organization. We’ve been around just less than three years, and so our membership is today still pretty loose, still trying to find our way, but we have to come to that point, at somewhere down the road. Is it in the next year? Two years? It has to happen, so thank you; I’ve also had others suggest the same thing.

At some point, we’ve got to get more specific, but we want more engagement in order to do that. So we need a bit more maturing, a bit more debating because I don’t propose to have all the answers. Somebody said, "Well, you sit down, and you write the bill and then I can decide if I like that bill or not." Well, I don’t think that’s good enough. I think there needs to be more democracy involved.

Brancaccio: There, I guess, yeah?

Audience : I’m Chris Gardner. I’m a geologist in the water resource industry. My question is, is sustainability possible with the exponential growth of population?

Hofmeister: To me, sustainability is the tent pole holding up a bigger tent called socials responsibility. To me, social responsibility is what government, what faith-based, what corporate, what NGO organizations should be about, social responsibility. Let’s take care of each other. Let’s take care of his earth. Let’s take care-and the tent pole holding up that big tent is sustainability.

I define sustainability, as making decisions and executing those decisions on the basis that things will only get better, only get better. We inherited, in the late 20th century, or the second half of the 20th century, when most of us came of age in this room, a mess, from our predecessors. We should not hand on that same mess to our children and grandchildren.

The only way to make the earth better is for sustainability to be that tent pole that looks after the totality of social responsibility in its broadest sense. So, yeah, I think we can, with a growing population in the world, if we’re at six billion and on our way to eight billion, I don’t think we should tell people how many children they should have, but I think we need to find ways that provide land, water, and air sustainability, which means it keeps getting better.

The earth is a pretty miraculous place, and we don’t have a substitute for it, so we better take good care of it. I think that with technology we should be able to do