September 24, 2008

Military, Business Leaders Release Comprehensive Energy Security Plan

WASHINGTON, Sept. 24 /PRNewswire-USNewswire/ -- The Energy Security Leadership Council (ESLC), a project of Securing America's Future Energy (SAFE), today released A National Strategy for Energy Security, a comprehensive plan that offers the public and policymakers specific solutions to the very real threats posed by our nation's dependence on oil. The National Strategy lays out a pathway toward a long-term goal of an electrified transportation system that is no longer dependent on oil, along with the interim policies needed to reach that goal while keeping our economy and our nation strong and secure.

"Our oil dependence has put our nation at unacceptable risk," ESLC Co-Chairman Frederick W. Smith, Chairman, President and CEO of FedEx Corp., said. "The plan we are offering today includes details about exactly how we can reduce that risk. Most important, we must electrify our transportation system to end its complete dependence on oil. But that is not a simple task, which is why we lay out the specific steps needed to reach it. It is also a goal that will take many years to reach, which is why we recommend policies -- including expanded domestic supply of oil and natural gas, reformed and improved fuel economy standards, and increased support for R&D -- that will strengthen our economic and national security while we work toward the long-term goal."

"Our safety and our prosperity are in peril," ESLC Co-Chairman General P.X. Kelley (Ret.), 28th Commandant of the U.S. Marine Corps, said. "Yet too many look for scapegoats or offer half-measures. Blaming someone else is not a solution, and half of a plan is not a plan. The report we are releasing today is the culmination of six months of careful, in-depth examination of our oil dependence and the ways to reduce it. This plan is unique: it is bold, it is comprehensive, it is detailed, and it has the unanimous support of the business and military leaders on the Energy Security Leadership Council."

The Energy Security Leadership Council is a group of business leaders and retired senior military officers who are committed to improving America's energy security. They have received strong praise from lawmakers, particularly for their 2006 Recommendations to the Nation on Reducing U.S. Oil Dependence, which helped to shape the landmark Energy Independence and Security Act of 2007 (EISA).

"I appreciate the leadership of the Energy Security Leadership Council and its dedication to finding ways to reduce our nation's dependence on oil. I worked closely with them to enact bipartisan, balanced and aggressive policies that will significantly improve our nation's energy security for years to come. I look forward to working with them and others in the 111th Congress to build on our successes," said Senator Byron Dorgan (D-ND).

"SAFE and the Energy Security Leadership Council have become an important part of our nation's energy debate. Their commitment and their effectiveness have made them valuable partners in the ongoing effort to pass comprehensive legislation to improve our nation's energy security. I look forward to continuing to work with them as we tackle these vital issues together," Senator John Thune (R-SD) said.

Senator Kent Conrad (D-ND) said, "Those who are serious about energy security have seen in the past the benefits of working with SAFE. The ESLC has offered a set of recommendations that reflect the core elements of a much needed and bipartisan strategy for energy security. As the Congress works next year to craft transformative energy legislation, these recommendations will help shape the legislative debate."

The National Strategy for Energy Security is the natural successor to the 2006 Recommendations. This set of recommendations, however, encompasses an even bolder vision than in 2006, by proposing specific policies in the following areas:

   --  Electrifying the U.S. transportation sector to diversify energy       supplies   --  Accelerating the development and deployment of new energy-related       technology   --  Reducing demand for oil through improved vehicle efficiency   --  Increasing energy access through expanded domestic supply   --  Managing risks and global issues    Members of the Energy Security Leadership Council   --  Frederick W. Smith, Chairman, President and CEO, FedEx Corp.       (co-Chair)   --  General P.X. Kelley, USMC (Ret.), 28th Commandant, U.S. Marine Corps       (co-Chair)   --  General John P. Abizaid, US Army (Ret.), former Combatant Commander,       U.S. Central Command   --  Admiral Dennis Blair, USN (Ret.), former Commander-in-Chief, U.S.       Pacific Command   --  Edgar M. Bronfman, retired Chairman, The Seagram Company Ltd.   --  General Bryan "Doug" Brown, US Army (Ret.), former Commander, U.S.       Special Operations Command   --  Admiral Vern Clark, USN (Ret.), former Chief of Naval Operations   --  Adam M. Goldstein, President and CEO, Royal Caribbean International   --  General John A. Gordon, USAF (Ret.), former Homeland Security Advisor       to the President   --  Maurice R. Greenberg, Chairman and CEO, C.V. Starr & Co., Inc.   --  General John W. Handy, USAF (Ret.), former Commander of U.S.       Transportation and Air Mobility Command   --  Admiral Gregory G. Johnson, USN (Ret.), former Commander, U.S. Naval       Forces, Europe   --  Herbert D. Kelleher, Founder, Southwest Airlines Co.   --  John F. Lehman, former Secretary of the U.S. Navy   --  General Michael E. Ryan, USAF (Ret.), 16th Chief of Staff, U.S. Air       Force   --  Eric S. Schwartz, former Co-CEO Asset Management, Goldman Sachs   --  Jeffrey C. Sprecher, CEO, IntercontinentalExchange | ICE   --  David P. Steiner, CEO, Waste Management, Inc.   --  Michael T. Strianese, President, CEO and Director, L-3 Communications   --  General Charles F. Wald, USAF (Ret.), former Deputy Commander, U.S.       European Command   --  Josh S. Weston, Honorary Chairman, Automatic Data Processing, Inc.    A National Strategy for Energy Security: Summary of Recommendations   1. Diversify Energy Supplies for the Transportation Sector   a. Electrification of the transportation sector  

i. Establish development of advanced battery technology as a top research priority and spend at least $500 million per year toward its development.

ii. Replace existing vehicle tax credits with new tax credits of up to $8,000 per vehicle for the first two million domestically produced highly efficient vehicles.

iii. Federal government should help create a market and exercise leadership by purchasing highly efficient vehicles.

iv. Establish production tax incentives to aid in the retooling of U.S. vehicle manufacturing facilities and to create and maintain a domestic capacity to manufacture advanced batteries.

v. To encourage business participation, extend and modify federal subsidies for hybrid medium-duty vehicles (Classes 3-6) and heavy-duty vehicles (Classes 7-8) to 2012 and remove the cap on the number of eligible vehicles.

vi. Grants to municipalities and tax credits to commercial real estate developers to encourage the installation of public recharging stations.

b. Enhancing the nation's electrical system

i. Continue licensing process for Yucca Mountain while initiating a program of interim storage as an alternative to Yucca Mountain.

ii. Extend the deadline and increase the funding levels for loan guarantees for new nuclear generation.

iii. Significantly increase investment in advanced coal R&D including development of carbon capture and storage (CCS) technology and policy framework.

iv. Increase funding for loan guarantees for advanced coal generation.

v. Reform and extend the Production Tax Credit (PTC) and the Investment Tax Credit (ITC) through December 31, 2013, while providing certain guidance for the transition to a fundamentally improved, next-generation incentives program.

vi. Extend backup federal eminent domain for transmission lines to help expand the use of renewable power and to enhance reliability by moving power from surplus to deficit regions.

vii. Require the Federal Energy Regulatory Commission (FERC) to approve enhanced rates of return on investments to modernize electrical grid system.

viii. Direct states to implement time-of-day pricing for electricity, and grant FERC backstop authority to implement time-of-day pricing if states will not.

ix. Require utilities to install smart meters for all new installations after a specified date.

c. Reforming the biofuels program

i. Shift focus of biofuels deployment by concentrating on R&D and commercialization efforts on next-generation biofuels, fostering competition among fuels derived from differing feedstocks.

ii. Require increasing production of Flexible Fuel Vehicles (FFVs).

iii. Accelerate Department of Energy and Environmental Protection Agency testing and performance validation of unmodified gasoline engines running on intermediate levels, first- and second-generation biofuels blends.

iv. Replace the 45-cents-per-gallon ethanol tax credit with a 'smart subsidy'.

   v. Eliminate tariffs on imported ethanol over a period of three years.   2. Increasing Energy Access: Expanding Domestic Supply  

i. Target federal policy and resources to encourage the expanded use of carbon dioxide for enhanced oil recovery.

ii. Support federal investment in technologies that can limit the adverse environmental impacts of oil shale and coal-to-liquids (CTL) production to ensure long-term viability before undertaking public investment in production.

iii. Increase access to U.S. oil and natural gas reserves on the Outer Continental Shelf (OCS) with sharply increased and expanded environmental protections.

iv. Increase access to U.S. resources in the Arctic and Alaska.

v. Federal support for construction of a natural gas pipeline from Alaska to the continental United States.

vi. Expand federal R&D initiatives studying the opportunities to exploit methane hydrates, including the initiation of small-scale production tests.

3. Accelerating the Development and Deployment of New Energy-Related Technology

i. Annual public investment in energy R&D should be increased by roughly an order of magnitude to approximately $30 billion.

ii. Reform the existing institutions and processes governing federal R&D spending.

iii. Develop a more effective federal R&D investment strategy.

iv. Establish new institutions to provide funding for early-stage R&D and for later-stage deployment and commercialization.

   v. Invest in the next-generation workforce for the energy industry.   4. Reducing Demand For Oil: Improving Efficiency  

i. Aggressively implement fuel-economy standards established in the Energy Independence and Security Act of 2007 (EISA).

ii. Increase allowable weight to 97,000 lbs. gross vehicle weight for tractor-trailer trucks that have a supplementary sixth axle installed but which replicate current stopping distances and do not fundamentally alter current truck architecture. In addition, government should study further the safety impacts of significantly longer and heavier tractor-trailers used in conjunction with slower speed limits.

iii. Require the Federal Aviation Administration (FAA) to implement and fund improvements to commercial air-traffic routing in order to increase safety and decrease fuel consumption.

5. Managing Risks and Global Issues

i. Direct the Department of Energy to develop workable guidelines for the use of the Strategic Petroleum Reserve and evaluate its proper size based on those criteria.

ii. Work with foreign governments to eliminate fuel subsidies.

iii. Promote a robust China-U.S. partnership on carbon capture and storage that focuses on private-sector collaboration and sharing of best practices.

iv. Establish a National Energy Council at the White House to coordinate the development of the nation's energy policy and to advise the president with regard to energy policy.

v. The National Intelligence Council should complete a comprehensive National Intelligence Estimate on energy security that assesses the most vulnerable aspects of the infrastructure critical to delivering global energy supplies and the future stability of major energy suppliers.

vi. Working with the Department of State, the Department of Justice should bolster programs designed to train national police and security forces to defend and secure energy infrastructure in key countries.

vii. As called for in its recent Maritime Strategy, the U.S. Navy should leverage the maritime forces of other countries to provide protection against terrorists and pirates for oil tankers in vulnerable regions.

viii. The Department of Defense should engage NATO and other allies in focused negotiations with the intention of creating an architecture that improves the security of key strategic terrain.

ix. The intelligence community should bolster collection and analysis capabilities on potential strategic conflicts that could disrupt key energy supplies. The Department of State should improve its capacity to intervene diplomatically in conflicts that impact U.S. energy security.

x. The intelligence community should expand the collection of intelligence on national oil companies and their energy reserves in order to allow policymakers to make better decisions about future alliances and the nation's strategic posture on energy suppliers.

Securing America's Future Energy (SAFE) is an action-oriented, nonpartisan organization that aims to reduce America's dependence on oil and improve U.S. energy security to bolster national security and strengthen the economy.

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Robbie Diamond

Securing America's Future Energy

CONTACT: Jonathan Grella of SAFE, +1-202-461-2369

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