Transcript: The Hydrogen Economy

 THE CNA CORPORATION
 
ENERGY CONFERENCE
 
“BE ENERGY SMART:  ARE YOU DOING YOUR PART?”
 
 
SPEAKER:
 
JEREMY RIFKIN,
PRESIDENT, FOUNDATION OF ECONOMIC TRENDS
 
MONDAY, MAY 22
6:00 P.M.
 
ARLINGTON, VIRGINIA
 
 
Transcript by:
Federal News Service
Washington, D.C.
 
STEVE WEHRENBERG:  Ladies and gentlemen, if you could find your seats
we’ll begin.
 
Good evening.  Good evening, everyone.  Good evening and welcome to this third
in our ongoing conversation about energy.  I always feel an urge to begin with, hi, my
name is Steve Wehrenberg and I’m a gas-aholic.  It has been 500 miles since my last fill
up.  That is only because my hybrid finally showed up, though, so.  By day I work for the
Coast Guard.  My avocation, however, is as director of the Energy Consensus, a non-
profit aimed at making sure that our policymakers and the people who influence our
policy makers are fully educated about the issues and the opportunities surrounding
energy.
 
As is my habit, I will thank our co-hosts.  With us this evening is Terry Pudas,
director of the office of force transformation, office of the secretary of Defense.  He is the
gentleman who is writing most of the checks I believe – (laughter, applause).  Unable to
be here this evening but well represented by members of his staff is Terry’s command in
arms, the Honorable Ken Krieg, undersecretary of Defense for Acquisition, Technology
and Logistics.  He feels that energy is an important issue.  I wonder why.
 
A couple of quick administrative announcements:  I send out a short survey after
each session.  The objective of the survey is to use your feedback to improve this series to
make it as useful as possible to you.  I had tepid responses this past time, tepid in number,
although quite passionate in content, but tepid in number.  I would appreciate it if you
would vote on the direction that we should move in here.  We don’t actually know what
to do more of or to stop doing if you don’t tell us.  So I will ask that you attend to that
survey when you get it.  If you don’t get a survey by the end of the week, please send e-
mail to energy@cna.org and ask why.  If your e-mail is anything near correct on the sign-
in sheet, we should be able to find you.  Just for the record, our most recent survey
indicated that our post-session support was improving. 
 
Last, our website is finally up and operating.  You may have seen the indication
of the website when you came in the room.  It is hosted by the Cebrowski Institute at the
Naval Postgraduate School.  You will find it here.  You will also find it in the invitation
that you can grab on your way out, and you will see it on the invitation that you get in
your e-mail to the next session on the 20th of June, where we will feature Mathew
Simmons, investment banker and author of “Twilight in the Desert.”
 
And now the microphone will work, or not – and now as they say, on with the
show.  Our conversant tonight is Mr. Jeremy Rifkin, well known social critic and the
president of the foundation of economic trends.  He teaches in the advanced management
and education – or executive education programs at the Wharton School, University of
Pennsylvania, and frequently serves as a consultant to heads of state, political parties, and
Fortune 500 companies around the world.
 
Many of his ideas have been adopted by governments and industries around the
world over the past quarter century.  In the spirit of full disclosure, I feel I have to add
that many of his ideas have been vigorously challenged as well.  We think that is a good
thing.  I think part of the challenge may have come from the fact that Mr. Rifkin is
sometimes perceived as the bearer of bad news.  Well, we are used to that here so that
shouldn’t be a big problem.
 
Mr. Rifkin has authored 17 books on scientific, technological, economic, and
political trends.  Some of his popular and thought-provoking works – some of his popular
and thought-provoking works include his most recent “European Dream,” “The End of
Work,” in 2004, “The Age of Access” in 2000.  Of most relevance to our endeavor here
is his 2002 book, “The Hydrogen Economy,” subtitled, “The Creation of the Worldwide
Energy Web and the Redistribution of Power on Earth,” fairly ambitious subtitle.  Each
of his books has been translated into multiple languages, and he frequently publishes in
newspapers around the world.
 
After Mr. Rifkin speaks, we will have some time for questions.  We have
volunteers who will be stationed around the hall with mikes, so please wait until you get
one before asking your question.  Please welcome Mr. Jeremy Rifkin.  (Applause.)  We
are working on this.
 
JEREMY RIFKIN:  Oh, really.  Maybe I don’t need it.
 
Good evening, everybody – nice to be here with you.  Thanks for coming tonight.
 
I would like to start with a little story, a little anecdote.  I was in Berlin a month
ago with the new chancellor, Angela Merkel.  And she had asked me to come in and have
a debate with their leading German economist on how to grow the German economy,
obviously a very important issue now in Germany.  And at an early part of the discussion,
I turned to the chancellor and I said – I asked this question:  How do you grow the
Germany economy, how do you grow the European Union economy, how do you grow
the U.S. economy at the last stages of an energy era?  Fair question.
 
We have got $70 a barrel on oil in the world markets.  When I wrote “The
Hydrogen Economy” in 2002, I was a bit of an alarmist.  I projected that we would have
oil closing in at $50 a barrel by today, and I was told, are you insane.  Now we are at $70. 
Goldman Sachs says get prepared for $100 a barrel.  The International Monetary Fund
says the prices are never going down again.  We are not going back to $20 a barrel.  We
are in uncharted territory here.  
 
The great economic revolutions in history, the really big ones, they occur when
two things happen: first a basic change in the way we organize the energy of the planet
and secondly a basic change in the way we communicate with each other to organize the
new energy regime.  The coming together of new energy regimes and new
communications regimes as their command-and-control mechanisms, those
convergences, those are the pivotal points in history; they change the human equation
forever.
 
Let me give you an example:  Iraq, ancient Iraq – the Samarians.  The Samarians
were the first to successfully adapt agriculture with very sophisticated irrigation and
hydraulics.  Stored grain became the primary energy mover the first time in human
history.  It was complicated.  They had to determine when to sow, when to reap, how
much to store and distribute; they had to keep accounts.  It required a new form of
communication to organize it, cuneiform, writing -- the coming together of writing and
agriculture, communication energy – 10,000-year multiplier effect – the agricultural age.
 
Is it possible to turn off – this air conditioning is from the whole hotel, isn’t it? 
Are you all able to hear me okay?  Can you hear me without this microphone?  
 
In the early modern era, Gutenberg reinvents the printing press.  It was pretty
clear the Chinese already had it and they had moveable type.  Germany has very good
engineers, by the way.  So Gutenberg reinvents the printing press.  For two centuries, the
print press – great communication revolution – had no economic mission – it was an
orphan – it had a social mission:  The ability to mass produce Bibles in the vernacular
created a great schism in Christianity, the reformation – Protestant reformation, social
upheaval across the continent.  But the economic mission of the print press didn’t become
clear until James Watt patented that steam engine that brought in the American
Revolution.  For the first time in history, the first time, we went underneath the seams of
the planet – we found coal.  Remember up to that point in time we worked on –
completely on – flows – solar flow – the winds, tides, animal power, human power,
slaves.
 
So we went down into the seams of the planet.  We dug up the burial ground of
the Jurassic age, and that coal became the prime mover with steam.  It was organized –
with print.  Try to imagine organizing the first industrial revolution with a codex of
logistics communications.  We could not have organized the first industrial revolution. 
The telegraph and telephone preceded by just a handful of years the introduction of the
Daimler and Benz internal combustion engine and oil.  It became the communication
modality for the second industrial revolution.  
 
Now, why I do I say all of this stuff?  We had a very sophisticated communication
revolution in the last 20 years, personal computers, the Internet, brought to us by –
DARPA – the public isn’t really aware of where the Internet came from.
 
MR. :  Al Gore.  (Scattered laughter.)
 
MR. RIFKIN:  But it’s quite interesting, one of the great communications of the
revolution, communications:  ARPANET – DARPA– Pentagon, perhaps one of the great
legacies. 
 
So we had a great communication revolution.  We had the personal computers,
connected with the Internet, satellite, wireless, Wi-Fi communications.  We outted the
central nervous system of a billion  people so we can connect with each other at the speed
of light.  This is absolutely phenomenal.  What if we had said 30 years ago in this hotel
that in 30 years from now, a billion could produce and disseminate information to each
other at the speed of light?
 
How extraordinary.  If you go back just two centuries ago – your great, great,
great, great grandparents – the average number of people that would have come across –
in their lifetime was about 250, in the villages and hamlets of New York.  Their stored
knowledge was transmitted with the stain glass windows on the Cathedrals.  We have
really developed a very sophisticated way of engaging the energy and communication
exchange to a vast number of people –it’s amazing.   
 
So we had this decentralized, distributed, flat communication and IT revolution –
through the 1990s – a dramatic increase in IT productivity.  We changed the cognitive
development of our children in ways that we don’t even understand that.  We have
changed the sociology of our cultures.  But I think there is a deeper mission here.  I think
when the anthropologists look back at this particular period of history it will be clear that
this communication revolution is a distributed, decentralized revolution, and it is the
command and control mechanisms of the new energy regime.  On the horizon hydrogen –
basic element of the universe – the stuff of the stars, the lightest element in existence, and
when you use it for energy, you only get two byproducts:  pure water and heat.
 
Our astronauts have been have been powering their spaceships for 30 years in
outer space with high-tech, state-of-the art fuel cells.  I should say I would like to do a
mea culpa, right here, especially with the folks here in the Pentagon tonight.  I was one of
the naysayers in NASA.  I said, for 25 years, tell us what you have contributed here on
earth.  And I had to do a mea culpa.  They had asked me to come to do an address at their
annual – at the annual convention that was in Florida about four years ago, and I said, I
need to apologize because your legacy will be written with one technology.  You brought
back the ancient fuel cell; you turned it into a high-tech medium, and you showed us the
way out of the fossil fuel era.
 
The good news about hydrogen:  it’s ubiquitous and it gets us off carbon.  The
bad news about hydrogen, excuse me is that it is not free floating; you have got to extract
it from another compound; it’s a carrier of energy.  And so this is where we get into some
real issues as to where we want to head with this revolution.  We can extract hydrogen
from fossil fuels.  We will get into this in a moment, but then that doesn’t bring us into a
new energy era.  We can use nuclear power and uranium, but that doesn’t bring us into a
new energy era.  We can use renewable energy that does bring us into an ear but it is
fraught with problems.  We will get back to this.
 
The coming together of communication and energy, how does it work?  A fuel
cell is analogous to a personal computer.  When you get a personal computer, you
generate your own information.  You become the producer and the distributor, and you
can distribute to a billion people if you so choose.  With a fuel cell powered by hydrogen,
extracted from renewable energies, it’s analogous to a personal computer; you become
your own producer of energy; you become your own utility; you become your own power
plant.  You have to imagine in 25 years from now, not 50, millions and millions and
millions of fuel cells powered by hydrogen, extracted from renewable energies.
 
Someone said to me the other day, well, how can we possibly imagine millions of
fuel cells, portable fuel cells – every home, factory, office; every car, bus, truck a power
plant?  They asked the CEO of IMB in the 1950s how many computers do you think the
world market can use.  And they confidently predicted four on the world market.  Would
anyone have suspected 30 years ago – and ask you here at the Pentagon when you were
playing with ARPANET that this technology that you created would allow 25 percent of
the human race to communicate completely flat and distributed.  You have got to back up
and see how we are too close to this.
 
So how is a fuel cell analogous?  You and I generate power with our fuel cell –
home, factor, office, car, bus, truck, industrial technology part – we are going to have
more power than we might need at any given time of the day because we are all utilities. 
What do we do with the surplus?  We may want to send electricity back to the grid.  If the
price of the electricity on the grid at any given time of day near peak load is higher, then
the price it costs me to generate my hydrogen with renewable energy – I’m making
money; I’m in the power plant.
 
So what we are going to do this:  We are going to take the exact same software –
it’s identical – the same hardware, we are going to use the same architecture that we
created in Silicon Valley to establish this communication and IT revolution.  It’s
identical.  And we are going to reconfigure the power grid of North America, the power
grid of Europe, the power grid of the world in the next 25 years so the grid, the power
grid is distributed, intelligent, decentralized, so that when you and I generate more
hydrogen than we need and we want to send that electricity back, we can do it peer-to-
peer, just like information on the grid.  This is grid technology taken to power.
 
As you know, we now have grid technology that allows us to take all of the little
computers and with the appropriate software connect them so that we can share that
information power and have power amassed than central computers.  Within 30 years
from now, we should be saying the same thing about energy and power and cell –
distributive, flat, decentralized, and grid technology.
 
The coming together of distributive communication and the use of distributive
generation of hydrogen is a third industrial revolution.  It should be as powerful in its
impact on civilization as the coming together of print, as the command and control for
coal, rail, and steam, and that gave us a whole century-multiplier effect in the 19th
century.  And the coming together of distributive communication, decentralized hydrogen
should have as big an impact on society as the joining together of electricity, the
telegraph and telephone with the internal combustion engine, oil, and the highway
culture.
 
And like the other two industrial revolutions, it is going to change the human
equation in ways we can’t even begin to understand tonight.  This is flat power.  This is
power to the people.  Remember, when we went from human energy, slave energy, surf
energy, and animals, and the winds and the tide, and we went to coal and steam and print,
it allowed us to go from city-states to nation-states because we could compress time and
space, engage in quicker exchange with each other, and force the old institutions into the
dustpan of history.  We went from city-states to nation-states; we went from feudal social
relationships to a market economy; we went from monarchy to democracy.  So try to
imagine a flat, distributive, decentralized energy revolution – literally, not figuratively
power to the people.
 
It is going to have to change our other institutions in ways that we can’t begin to
fathom tonight.  Not quickly, but my mid-century we should see some very, very
significant changes in the way we organize light, and by the 22nd century – not very long
from now – our children today will be alive in the 22nd century, we are going to see a real
change.
 
Let me back up for a moment.  When anthropologists look back at us from the
point of view of the 22nd century, they will say these were the oil people; you were the oil
people; that is us; that is how we will be defined.  We are the oil people.  Our whole
culture is based on fossil fuels.  We grow our food and petrochemical fertilizers and
pesticides.  And by the way, 17 percent of the energy used in America goes to
agriculture.  People are worried about a gallon of gas; they ought to be worried about a
loaf of bread; it may not be a commodity in short time.
 
So we grow our food and petrochemical fertilizers and pesticides.  Our
pharmaceutical products are primarily petrochemical based.  Our clothes are
petrochemical synthetics.  Our plastic, our building materials – petrochemical.  Our
power, our transport, our heat, our light – we are the oil people.  We have created an
entire infrastructure of this planet around fossil fuels.  And if you go to Shanghai and
Houston and Chicago, and the great cities, those are fossil-fuel cities because up until the
modern era and the coal culture, we only had one city with over a million people.  That
was ancient Rome and the only way they were able to do it is by billeting a million-and-
a-half slaves as the energy source for that city.
 
Rome collapsed because its energy regime collapsed, parenthetically if I may add. 
They so overtaxed the soil and denuded the soil to keep trying to grow the food in order
to feed the slaves, feed the army, and feed an aristocratic class.  Finally, well before the
hordes were at the front gates, they had denuded their agriculture and forestry.  I would
remind you, the next time you are in Rome and you go the Pantheon and you take a look
at that beautiful building, there were a million-and-a-half people living in a great empire
in the fourth century, and by the seventh century, there were 70,000 people living in
rubble.
 
The next great city:  London, the first coal and steam culture to reach a million. 
Now over half the population of the world is urbanized.  We have great cities with 20, 25
million people.  This is all the result of a fossil-fuel age where we could use stored sun to
greatly concentrate energy vertically.  The Sears Tower in Chicago uses more energy in
24 hours than half the city of Washington, D.C. – yeah – a little less than that – 40
percent of the city.
 
So where does this leave us?  The key question I think that is facing us is how do
we deal with the critical questions at the end of the oil era?  And I am going to list three:
global warming, third-world debt, and the increasing political instability in the oil-
producing countries of the Persian Gulf and now other parts of the world.  These are
critical questions.  These are not geo-political questions; these go beyond that; these are
biosphere questions.
 
Let me deal with global warming first.  Global warming is the dark side and down
side of the fossil-fuel age.  Some of you may have suffered through a book I wrote a
quarter of a century ago called “Entropy” when you were students.  How many are
engineers here?  Any of you have to suffer through that?  As you know, which the
economists don’t know, you cannot defeat the second law of thermodynamics.
 
At the Wharton School for years – they are tired of hearing me saying this – I say
to other professors, talk to the engineers; they actually understand economics; you don’t. 
The reason is that economic – classical economic theory is based on Newton’s
mechanists.  And the great scientist/philosopher, Alfred North Whitehead once said to his
students at the beginning of the 20th century, all Newton’s mechanics can tell you, my
young students, is how fast something is going and where it is located.  But the laws of
thermodynamics as the engineers know – tell us how energy gets used and used up, and
you always pay the price; you never break even; you always lose.  When do you pay the
bill?  It’s called CO2.  That is the bill.
 
So we dug up the burial grounds of the Jurassic age.  We enjoyed – at least 20
percent of the human race enjoyed tremendous benefits, but now we have so much
carbon dioxide in the atmosphere, we just can’t get enough heat off of the planet; it’s as
simple and profound as that.
 
I want to share one statistic with you.  In 35 years of living in Washington, D.C., I
have become insensitive to statistics, as I’m sure many of you have.  And even in the
global warming and climate issue, we start saying I can’t hear another statistic.  But this
one I want to share with you because I guarantee you’ll never forget it.
 
In November in the Journal of Science, the premier scientific journal in the world,
an article was published.  It was the single most devastating piece of information ever
published in the history of the Homo sapien species.  Now, how can I say something that
bold?  By the way, it was ignored – a little article in The New York Times.
 
And what the article said was this:  If we want to understand the magnitude of
what is happening here on this planet at human hands, scientists in the Antarctic were
digging under the ice into the landmass to get a clean, pristine picture of the geological
record, and what they published was astounding.  The concentration of global warming
gases in the atmosphere of this planet we live on, earth, today, is greater than at any time
in the last 650,000 years.  I don’t think we have grasped what is going on here.  I think
we grasp it as an abstract policy issue, as a public debate, but I don’t think we grasp the
emotional content of what is happening here.
 
If we had measured human accomplishments today in terms of sheer impact, we
probably would have to conclude that global warming may turn out to be our greatest
accomplishment, be it a negative one.  We are affecting in some ways we don’t even
begin to understand the chemistry of this planet -- global warming/oil connection.
 
Third-world debt oil connection, transparent but never talked about in public
debate – we never anticipated OPEC.  In the 1950s, something very interesting happened. 
The newly liberated decolonized countries of the third world, in Africa, Asia, South
America – their young leaders went to the London School of Economics and all of our –
Wharton and all of the other economic institutions to be educated.  And we told them you
need oil to modernize your economy and be a player.  It made total sense at the time.  In
hindsight we would never have foreseen the circumstances because does anyone in this
room know what oil was selling for in the world markets in January of 1973?  Three
dollars a barrel, $3; you are right on target.
 
Then OPEC hit with the oil embargo.  Within 12 weeks, oil went up to 12 a barrel
and it has never gone back down, and here is the untold story of the last 30 years.  Our
young kids go to these World Economic Forums, the activists at Davos, and Genoa, and
Seattle, and Washington, and they say, we (retired ?) our third-world debt, amen.  But if
you don’t know where the debt came from, it’s going to come back in six months.  It
doesn’t do any good just to retire.
 
For 30 years, third-world countries have been borrowing money from the IMF
and the World Bank to try to pay for modernizing economy and infrastructure based on
oil.  They can’t keep up to the price.  So today 83 cents out of every dollar borrowed in
the third world is paying off the debt; they are not getting the oil.  So if we think we’re
being hit at $70 a barrels, what do you think is happening in the 89 poorest countries in
the world tonight?  And the prices aren’t going down; they are going up.  
 
One last point on this:  You know, we talk about the divide and there has always
been a divide between the have and the have-nots, the rich and the poor – actually not
true.  Some of you who majored in anthropology and the university, do they still keep
that course on the docket?  You know, for 98 percent of our existence we were hunters
and gatherers, the great Paleolithic period in history.  That is what we were designed for. 
There was no big divide between rich and poor; there wasn’t any divide because when
you were nomadic and you were hunters and gatherers, there was no way to store surplus.  
 
Surplus started with pottery.  So the next time you are in the museum and you say
I can’t see another pots; I have had three hours of pots; enough pots, that is the key
invention, because with pots you can store grain, and then the question is who controls
the grain and who distributes it.
 
But even if you go back to the Neolithic revolution in agriculture, and you trace
up into antiquity, even early modern Europe, the first industrial rage, the divides were
bad but not like tonight.  Here we are at the last stages of an energy era, and the energy
era is elite.  So we have created a world that is elite.  It is not about ideology.  Coal – I
don’t have to say this to the military.  You know how important that fossil fuels have
been in the geopolitics of nation-states in the last 150 years.  It’s the critical factor.
 
Coal, oil, and gas, and uranium are not found equally distributed like solar flow,
wind, the sun, hydro, geothermo, and biomass; they are only found in pockets.  They
require, fossil fuels and uranium, a tremendous amount of capital investment and military
investment to secure them, to organize them, to process them, and to distribute them
through the goal and through the line.  So you end up with a world that is centralized and
elite and top-down.  Energy regimes tell us on how societies are organized.
 
So how does it look tonight at the end of the fossil fuel era -- when I mean the
end, the next-half century?  Today the 356 richest people on the face of the earth – you
could put them in this room.  Their combined wealth now equals the annual income of 40
percent of the human race.  That is 356 families.  The three richest families, Bill Gates,
Warren Buffet, and the Waltons of Wal-Mart, three families’ combined wealth equals the
annual income of the 940 million poorest people living on the planet.  We just absolutely
don’t have a precedent for this divide at the end of an energy era, not in all of history.
 
Third-world debt oil connection; global warming oil connection; Persian Gulf oil
connection – the fact is that is where a lot of the oil is.  We have American troops in Iraq. 
We have problems throughout the Persian Gulf.  We have regimes that are politically
unstable.  We are not sure where the cards are going to fall the next few years.  No matter
where you stand on the pro or con on the Gulf War, I’m sure everyone here can agree that
we have some political instability problems in the Middle East.  But we also have it in
Nigeria.  And then there is questions about Mexico and Venezuela and everywhere there
is oil.  
 
And so the business leaders – I work primarily with CEOs of major companies –
they are worried about instability.  In a world where the price is going up and everybody
wants the oil and the gas and the coal and the uranium, how do you figure out how to
secure it, and is there any way to be politically secure in a world where the fossil fuel
deposits are in very unstable regions?  There isn’t a military in the world that can secure
the whole oil landmass of the planet.
 
So global warming oil connection; third-world debt oil connection; Persian Gulf
and other oil-producing countries oil connection – this should be enough to handle we
have got one more problem we didn’t anticipate.  The conventional wisdom as expressed
by the International Energy Agency, the U.S. Department of Energy up until recently,
and the U.S. geological survey is this – and it has changed in the last year or two.  The
conventional wisdom – I’ll ask you.  Does anybody here have a thought of when oil
peaks on the conventional wisdom?  Let me say for the folks who aren’t well versed in
geology – peak is when half of your oil in the world is used up.  It is the classic Hubbert
bell curve.  When you get to the top of that curve and half of your oil in the world is used
up, that is the end because the prices are unaffordable.  Anybody here have a sense of
what the optimistic scenario is on when oil peaks?  This is the optimist scenario.
 
Audience. :  2040
 
MR. RIFKIN:  You are almost right on target.  The conventional wisdom is at a 2-
percent growth rate, which was a projection that it now seems pretty conservative – at a
2-growth rate, we peak in 2037.
 
Now, I just came back from Germany and I was in a meeting this weekend with
some of the leading petro geologists in the world, world class, the big ones, about a dozen
of them, Dr. Campbell from the U.K. – a lot of major folks.    They have going back and
looking at the reserve figures with new computer studies and they are saying we may
have gotten these numbers wrong.
 
According to the new studies, they think we may peak as early as what?  Anybody
know?  Last year.  It depends – but most of them are saying somewhere around 2010 to
2020.  The North Sea peaked last year.  Mexico – I was with Mr. Munioz at Pemex at the
APEC convention.  We did a plenary session together, and at that session, the head of
Pemex.  They are the fourth-largest producer of oil in the world.  He turned to me and
right in the middle of my talk, and he said, Jeremy, I have something to say.  Pemex
knows that oil peaks in 2010 in Mexico and he had never announced this and you should
have – you would have heard a pin drop.  And one business leader said, well, what does
this mean for Mexico?  That is a fourth of the revenue.  Russia peaks probably around
2010.
 
The reason is the reserve figures are not reliable as many of your know here. 
Every year – if you really want to put yourself to sleep, read the Gas & Oil Journal each
month, and once a year, they come out with something that I’m not sure whether one
should – it’s a humorous – I don’t know why they don’t come out with on April 1st
because every year they put out the reserve figures on oil, and it turns out the OPEC
countries have the same reserve figures every single year.  Now the only thing wrong
with that is that we know that we are consuming three barrels for every barrel we
discover so we kind of wondering after all of these years how they can have the same
reserve figures.  Now, of course, if they raise their reserve figures, it means they can put
more output out, and they can keep their economies moving.
 
So about 12 of the best geologists in the world have begun to question these
figures including President Bush’s chief energy analyst, and there was an article on the
front cover of The New York Times Magazine about this last year.  He was with Aramco. 
He says, I don’t know if the Saudis even have all of this oil.  We don’t know.
 
Now, if you read chapter two in my book, “The Hydrogen Economy,” it is boring;
admit it.  I kept going back into the minutia to try to find out who was right, the
pessimists or the optimists, and I got too involved, too involved.  And then I finally
figured out after months of trying to figure out who is right, first I’ll never know;
secondly it doesn’t make a damned bit of difference.  They are only arguing about 20
years here.
 
So if the pessimists are right, 2010 to 2020, maybe sooner; if the optimists are
right 2035, 2040.  But from the point of view of planning, this is a small, almost
irrelevantly small window.  To begin to re-imagine how we would turn energy regimes
and create a new infrastructure for civilization, it is such a small window.  That is why
we can’t make any mistakes in terms of the direction we take because we will lose
precious time.
 
What they all agree on, pessimists and optimists is when we do peak, two-thirds
of all of the remaining oil is where?  The Persian Gulf.  If we think the Persian Gulf is a
hot spot tonight, what is it going to be like in two, three, five, 10 years from now. 
Everyone wants that oil:  China, India, the EU, Japan, U.S., developing countries.  Can
you imagine what it is going to be like if we don’t have some exit strategy in place
quickly?  Desperate times.
 
So the energy companies are aware of this.  They are diversifying their portfolio. 
They are moving to natural gas.  Natural gas burns lighter; less CO2 emissions.  The
problem is natural gas dovetails the same shadowed outline as oil.  So even the Electric
Power Research Institute, which is the umbrella of the utilities industry made this very,
very pressing observation because the power companies – I work with most of the – a lot
of the major power companies.  They are putting in 260 natural gas power plants.  But
EPRI says we can’t hold the line on price now, and those plants are going to amortize
over 25 years.
 
Natural gas is a transition but it doesn’t buy very much time.  There are plenty of
other fossil fuels.  We are not running out of fossil fuels.  There is – somebody want to
tell me the other fossil fuels?  Coal, there is plenty of that, and what else?  Oil tar sands in
Canada and Alberta, and – and heavy oil in Venezuela.  You know, most people are not
aware that Canada is the largest producer of energy to the United States, and Syncrude,
Suncor, and Chevron are out there in the tar sands of Alberta and they are competitive at
$12 a barrel right now in world markets.  There is plenty of tar sand.  There is plenty of
heavy oil in Venezuela.  There is coal all over the world; there is plenty of it.  The
problem is it’s dirty.  It emits a lot more CO2.  We would have to go back and re-look at
the global-warming climate studies of own National Academy of Science, the U.N., and
everybody else, because we never factored in that we would have to make an exit strategy
from crude quicker.  So we just don’t know what the results are yet; we can’t tell.
 
But how desperate might we be that we be willing to go to these dirtier fuels to
get a few more years at the expense of the biosphere, our children, our children, our
grandchildren, our fellow creatures, the earth we live in.  I believe that we are in the
sunset of the fossil fuel era.  It began to carrying coal to Newcastle hundreds of years
ago.  It is winding down in the Persian Gulf.  I believe that the door is open to a new
energy horizon, and the good news is we have been heading to hydrogen for a long time. 
This is the good news.  We have been de-carbonizing our energy for 200 years.  Wood
was primary energy; it’s dirty.  We went to coal and coal is actually cleaner than wood;
burns better on CO2.  Then we went from coal to oil and oil burns bad, but not as bad on
CO2 as coal.  Then we went to natural gas and it’s a little cleaner.  Once we move to
renewables stored by hydrogen, we are off the carbon cycle.
 
I am of the school that says the Kyoto accords – too little.  In fact, if you really
look closely, it’s almost – I don’t want to use an appropriate word.  It is almost a
skeleton; it’s worth almost nothing.  You have got to get off carbon to have a shot at re-
healing the planet.  And we are not sure where we are and it’s uncharted territory.
 
So hydrogen, where do we get it from because it’s a carrier; it’s not a primary
energy.  We can get hydrogen from natural gas.  Now, most of the hydrogen today, we
should just leave that machine alone I think because it’s scaring the hell out of me. I’m
too old to get that jumpy.  It keeps me awake.  I haven’t had a senior moment yet, but it
may happen so stay with me.
 
Most of the hydrogen today comes from natural gas.  We steam out the hydrogen,
but natural gas only gives us a few years.  We could use coal; there is a lot of it.  And the
coal industry says, trust us; clean coal.  If you give us enough time and you give us
enough research and you give us enough money, first build the power plants and let us
move online with them, but if you give us enough time, once these plants are on line, we
will try to figure out a way to sequester the CO2 under ground.  We will grab the
hydrogen.
 
Now, some of you older folks, is this déjà vu or something of you?  This is just
what we said about nuclear in the ’50s.  The industries said give us enough – put the
power plants on, but give us enough time; give us enough money, and eventually we will
figure out a way to transfer the nuclear waste and bury it.  Sixty year in, we still don’t
know how to safely transport the waste, and our Western governors – this isn’t ideology –
Republicans and Democrats, the governors say we don’t want the waste coming across
our state.  We built the Yucca flats; we tried our best; we put a couple of billion into
Yucca flats, in an underground burial chamber.  We tried – we said that the best
engineering – it will be fail-safe, no-release radioactive activity for 10,000 years, which is
the whole history of civilization.  The problem is it’s leaking already – so they are little
off.  
 
So I have a science and tech team made up of some of the best scientists in the
world,   and what they say to me is – and of course nothing is certain.  I’m just saying
that is best.  And what the scientists are saying, how do we make it economically
feasible, is the quest of this.  But even if we did, the question in their mind – because it’s
a question – how could bury this volume of CO2 underground forever assuming there is
enough storage capacity – with never a leak.  This makes the nuclear problem  pale in
consideration.  The problem is when you have massive CO2 underground and it does
begin to leak, in that short time period, that is really a catastrophe.
 
We could use nuclear power; there is a tremendous amount of interest now here in
Washington, a buzz about nuclear power.  I will give you my sense of it.  The power
companies I work with are never going to build a nuclear power plant again unless it’s
completely regulated in terms of subsidies from American taxpayers.  The consumers
stopped it– because what stopped nuclear power was not just the activists; it was the
deregulation of the market.
 
When nuclear power was regulated and controlled, it was subsidized; we could it
with the tax dollar.  And everyone in this room knows what I’m saying.  Everyone is
nodding.  I hope you’re not  sleeping.  The point about it is if you have we have a robust
discussion about this, we have to say are you willing to subsidized power and utility
companies, or on your tax going to do this.  My suspicion is this is under consideration. 
That is why I was anxious to come here and talk to you at the Pentagon tonight.
 
On 9/11, I was in Zurich.  I had just flown over the Atlantic.  I was on a
conference call with one of the big five American power companies.  And about 20
minutes into the call, a senior executive said, Mr. Rifkin, we have to get off of the call –
two planes have run into the World Trade Center in New York.  So I called my wife.  We
live down in Washington.  I said get in the basement.  Then I thought about it, like you
did.  We are all trying to sort this out in the next couple of weeks, just try to figure out
what happened here.  And it kind of hit me as I’m sure it hit you, especially in the
military, these first attacks were symbolic: the World Trade Center, the Pentagon, very
symbolic.  But when they get serious, what do they go after?  The power structures.  The
infrastructures.  We are seeing it with al Qaeda.  We are seeing it with the terrorists going
after the oil pipelines in the Persian Gulf, but when they are really serious, it’s the nuclear
power facilities.  
 
What does it take to go after a nuclear power facility, the nuclear rods in the
storage yard – not a big 747 plane.  Come up there with an SUV, six or seven in the car,
hand-held missile, over the horizon.  How epidemic is this discussion?  Does anybody
know what happened in Australia just before the turn of the year?  Just in the nick of
time, the Australian government arrested 18 Islamic extremist terrorists before they were
planning to destroy the only nuclear power plant in Australia.  They had it all mapped
out.  
 
So when I hear people say we want to re-nuclearize America – would cost $2
trillion – parenthetically we can’t do it; we are broke: consumer debt, government debt, a
dollar against the euro, but assume you could – why would we want hundreds and
thousands of nuclear power plants and uranium in transit all over the world as a soft
target in the age of terrorism.  And according to the studies that have been done, there is
only enough uranium for 30 to 40 years.  It peaks about the same time as oil does.  How
many knew that?
 
Audience:  It’s not true.
 
MR. RIFKIN:  We will get into it later if you think it isn’t.  But the studies from
the Atomic Energy Commission, which I would be glad to share with you afterwards, and
if you give me your cards, I’ll share the most recent study that came out in 2004.  But the
point is this:  It doesn’t seem to make a lot of sense to me to have uranium in transit and
have nuclear power plants all over the world.  That is one opinion.
 
So there is another way to get the hydrogen.  We could use renewable energy:
solar, wind, geothermal, hydro, and biomass.  And let me put biomass over here for just a
moment because it’s a unique renewable.  We could take wind, solar, geothermal, and
hydro, and generate electricity.  Now, as you know, at this point in time you can’t store
electricity in any major way.  But the battery technology, lithium technology may get
there, but it’s not there yet for storage.  You have to have hydrogen storage. 
 
So we take solar, wind, geothermal, and hydro, generate electricity, and electricity
flows right down the line.  But when there is good times and there is surplus electricity
and it’s cheap and that at peak load, you can electrolyze water – remember high school
chemistry?  You’re not sure?  The anode and the cathode and you split – you didn’t go to
that class – the anode and the cathode, you put it in the water; you grab the hydrogen,
then you extort energy. 
 
With biomass, agricultural waste, forest waste, garbage, solid waste, waste water,
you can grab the hydrogen direct.  The problem is thermodynamically you’re generating
power twice, first to get the electricity, then to electrolyze the water – with biomass, not a
problem.  But you can’t have renewable energy without hydrogen.  This is something
environmentalists, many that I know, failed to understand for a long time.  They thought,
well, why are we talking about hydrogen.  We know President Bush is talking about it, so
maybe we shouldn’t be talking about it.  (Laughter.)  But you cannot have – I will get to
President Bush in a minute.
 
But you cannot have renewable energy without hydrogen.  Does anybody know
why?  
 
Audience:  Storage.
 
MR. RIFKIN:  Storage.  The wind isn’t always blowing.  The sun isn’t always
shining, and the water tables are low and it’s not always going over the damn.  These are
intermittent energies.  So that if we want to go to renewable energy society – biomass,
you can store a little bit with the hydrogen – but if you want to go to renewable energy
society, the kind that the baby boomers in this room have dreamed about for your
children, you have to have a way to store the energy.  This is very important.
 
There was a case study in Brazil in 2001.  Does anybody know what happened to
the electricity in Brazil in 2001?  
 
Audience:  Big blackouts because of droughts.
 
MR. RIFKIN:  You have got it.  The Amazon was in drought.  These are the
projections on the global warming studies – more droughts in the Southern Hemisphere. 
There was a drought in the Amazon.  And, see, Brazil is unique.  Ninety percent – over
90 percent of its entire electricity is renewable; it’s hydro.  It is the only major industrial
power that is renewable.  Well, water wasn’t there; they didn’t have the hydro; and as you
said, electricity kept going off around the country.  It was a serious blow to the economy.
 
So, at a certain point when a certain percentage of your electricity was
benchmarked into renewable, say, 10 percent of your grid; 20 percent of your grid; 25
percent of the grid, you had better have a way to store that electricity in the form – that –
renewables in the form of hydrogen or else you rely on the winds and caprices of nature.
 
And this is very interesting; it’s a more subtle point:  We have to have this storage
capacity – and this is what I tell the environmentalists.  We have to have this storage
capacity because we have to wean ourselves off of stored sun.  The issue is we have
created 6 billion human beings on this planet with huge urbanized, vertically organized
societies based on stored sun.  We went from flow to stored sun.  To wean ourselves off
so it isn’t cold turkey to the addiction, we have to find a way to shift the renewables to
store them so that we can maintain a semblance of the same quality like we have as we
began to create a more distributive world where population may start in the long run to
ease off.  Do you follow me?  But you can’t do a cold turkey on this.
 
While it is more expensive, remember that fuel cells are 2.5 times more efficient
than the internal combustion engine, and you can co-generate the heat back a the end of
the line.  So two bell curves:  The bell curve for oil and gas is going up on world markets. 
It is never going back down, down, down.  The indirect costs are going up.  And I am
going to be with one of the major reinsurers in two weeks from now – they have to put
out in Germany, they had to put out a huge amount of money on Katrina – Katrina and
Rita:  Real-time global warming.
 
Now, you can say all of these events are serendipitous: the ice melts on the
mountain rages, the doubling of intensity of hurricanes in the Gulf as projected in the
general science, the ice melts in Greenland, the droughts in the Southern Hemisphere, and
it’s getting worse and worse.  I’m really to suspend disbelief and say it could all be an
accident of some short-term path in history.  But the evidence over the last 25 years – it’s
mounting – suggests that we are in for a hell of a time – climate change period here.
 
And this is the best guess of the best scientists in the world.  I know there is one
or two that had doubts at our own National Academy of Science.  I happen to trust our
scientific community.  I think they have done the best job they can to figure out this is –
what is happening at this point in history, and I think it is real.
 
So where does this take us: global warming indirect costs.  And when you begin
to measure all of the indirect costs of fossil fuels, the costs begin to be almost
insurmountable, and that is seawater rise, more radical weather patterns in the urban
areas, and most of the population of a planet, as you know in military and logistics is on
coastal areas, highly urbanized – species crossing biological boundaries, for which there
is not good immunity in other ecological habitats.  It goes on and on.  But when you
begin to measure the entropy bill, the price, the indirect costs, it’s serious; it’s very
serious.  And then there is the military costs of securing the geopolitics of oil.  That is a
pretty big cost.  
 
The direct and indirect costs of renewable technologies and fuel cell technologies
is going down.  Moore’s law has begun to set it.  It’s quite interesting to watch Moore’s
law unfold.  We first saw it in software, in telecom and IT, then we saw it in biotech. 
And that is where – the technology moves at such a quick pace, it reaches a door, a
threshold where you begin to start to see a new flow where you can double your
knowledge base and active costs every 18 months, saw it in software, saw it in IT, saw it
in biotech – beginning to see it now at the front door in renewables and hydrogen.  That
is good news.
 
So the direct and indirect costs are going down.  Economies of scales set in when
early adapters, Department of Defense, begin to play the critical role here – we will get
back to that – early adapters, the cost goes down.  Yes, the first car costs a million dollars
with all of the platinum – not if you put 100,000 cars online; not if you put 100,000
online, and 2.5 times more efficient, as I said, the internal combustion engine.  But even
as you see the curve for gas going up, the curve for renewables and hydrogen going
down, you begin to see the market opportunities, but this will not happen simply because
the invisible hand is there.
 
I teach in the oldest business school in the world, I like to think the best, but I
have to say the invisible hand is limited.  To actually engage in this kind of change of an
energy regime and an infrastructure for the whole planet in less than 50 years, we have to
have a full partnership, public, private, government, industry, and civil society at every
level to be able to marshal the resources of the world in that short of window to make a
shift into a new energy regime.
 
Let me give a timetable because some people say, well, isn’t hydrogen a hundred
years away?  Portable fuel cell cartridges will be on the market – eight Japanese
companies in 12 to 18 months.  They already have it; you can Google it up: Toshiba,
Hitachi, Canon, and this is where the kids in the world will first be acquainted with fuel
cell cartridges.  It started in outer space, the Pentagon and with NASA.
 
Now next year, a little methane fuel cell cartridges – the hydrogen comes form
methane from natural gas, but we certainly could have it from renewables easily.  You
are going to be able to power up – tell your kids when you go home tonight – you’re
going to be able to power up your MP3 player, your cell phone, your laptop, and you are
going to get more power than you would by having to recharge in the sockets, and you
throw away the cartridges.
 
The only reason there is a delay – does anybody know why there is a delay on
getting on the market – I would pretty curious – that is a pretty esoteric.
 
MR. : Safety concerns on aircraft.
 
MR. RIFKIN:  Totally right.  It’s the airlines.  The airlines are saying we’re not
sure, and the United Nations is already trying to solve the hurdles for this.  Once it is
cleared with the airlines it is a go.  It’s a go.  So that is in the next 12 to 18 months, not a
hundred years away.  Japan has is ahead on the portable front, although Samsung is
coming in pretty strong in Korea, but Japan has got eight companies.
 
Stationary fuel cells, early adopters – many of the companies I worked with in the
manufacturing and service-oriented industries are concerned about brownouts and
blackouts.  We have got an old power grid.  It is disgracefully old and falling apart.  Does
anybody believe we won’t see another power blackout like we saw a couple of years ago? 
I don’t think so.  
 
So the companies I work with, some are putting up backup generation.  Now, it
doesn’t have to be fuel cell, but some are putting in hydrogen because it’s state of the art
so they can go right off grid and never miss a dime on the production.  The next time
you’re in the Munich Airport – I was there twice in the last week – two years ago we
inaugurated a state-of-the-art fuel-cell hydrogen generator.  I was there with Vinda AG,
great German company.  It is backed up.  They will never have to worry about going off
line.
 
In Times Square, you notice when the power blackout hit New York – in Times
Square, there was a building that could have stayed lit but the regulations in New York
City wouldn’t allow it, on Times Square, Ellis Real Estate, state-of-the-art skyscraper.  It
had its façade and its basic power with fuel – hydrogen fuel cell back up with natural gas,
but when there is a blackout – I didn’t know this – the city regulations say you can’t use
the natural gas.  But if you went to Central Park, the only place in the city – it was lit
because the auxiliary police have it lit with hydrogen – never lost a moment.
 
The automobile.  Anybody here from the auto industry?  Anybody from K Street
make it here tonight – auto industry?  The auto industry spent a couple of billion dollars
on fuel-cell cars.  Many of my friends in the environmental community – I have deep
roots there, as you know – said this is a trick; these auto companies are really the devil. 
They are talking about this hydrogen future a hundred years from now to deflect attention
from CAFE standards, fuel efficiency, conservation.  
 
Now, let me say I don’t think it was a trick, but I have to acknowledge – and I’m
sure the car companies will – it wasn’t a serious effort until the last four years.  And what
has turned this around – one state turned this around.  What is the state?  
 
AUDIENCE:  California.
 
MR. RIFKIN:  California is running the show.  This is – I’m here, we’re here
tonight because of California because the state legislature in a revolt said we are going to
pass a law signed by Gray Davis – if you want to sell a car in the State of California in
2009 you near-zero emissions.  That is fuel cells.  That is fuel cells.
 
So General Motors had a company – I believe sued California.  I believe the
White House joined that suit.  Correct me if I’m wrong, but then they dropped – you
can’t lose California – the fifth-largest economy in the world, but it’s the largest
automobile market.  So what is happening is the cars are in a race against each other, but
it’s a race where it’s a cat-and-mouse race.  Nobody wants to be second in the market and
no one wants to be the first test and be Napster-Bertelsmann.  Are you with me? 
Everybody understand what I’m saying. Napster-Bertelsmann failed.  They tested the
waters.  Everyone else learned and all of the rest came in with their same models that
Napster-Bertelsmann had.
 
The car companies – I’m going to give a suggestion in where – I think Toyota
might be first out, but I love the GM car.  Do we have anyone here from GM?  I love the
GM car.  Has anybody seen the Hy-wire car?  I didn’t – you have seen it.  Well, you
wouldn’t expect GM – they are pretty stodgy and their money is not good right now; they
are a little bit of trouble.  But you wouldn’t expect an old company like GM to
reconceptualize the car.  They did it.  I think it is a sweet car.  They have
reconceptualized this technology in a way that Toyota and Honda did not do.  That
doesn’t mean they will be first out.
 
The Hy-wire, it looks a little bit like a Spiderman car.  It’s very beautiful, very
sleek test car, and they now have an operational car testing on the road.  All of the car
companies are testing in buses and cars on the roads around the world.  But this car was a
reconceptualization of the machine.  It was designed to be a dual-purpose machine.  You
use it for transport, and when you’re not using it for transport, what do you use it for?
 
Audience:  Generating power.  
 
MR. RIFKIN:  Power.  Power.  And I’m sure I’m not saying anything the military
doesn’t know here because I – we’ll get into this later.  I’m sure the Pentagon is
experimenting way beyond a lot of other folks on this technology.  It’s absolutely
essential.
 
But you take the four wheels in the chassis in this car and – let me back up –
beautifully designed car – more legroom than an internal combustion engine.  Who do
you think did the design?  Which country is the best in design?
 
Audience:  Italy.
 
MR. RIFKIN:  Italy.  Who do you think did the engineering?  The Germans in
Kast Am Main (ph).  Who do you think did the software?  The Swedes and the Italians. 
The U.S. could have – absolutely would have been the best.  It’s an Opal.  And you buy
four wheels in a chassis; you take it home or you lease it.  Then it’s modular.  You can
snap on a SUV, snap on a convertible, snap on a Sudan – completely modular.  It has an
acceleration like an internal combustion engine – 250-mile range, not bad – no steering
wheel.  None.  No breaks.  No pedal.  No engine.  Joystick – a dot-com car with a first-
generation that is in the distributive communication – your kids.
 
My wife said to me confidently – because I’m over 60 – she is trying to get me off
my clutch car.  She says I’m too old now – back to the automatic.  Everyone of you who
have kids, your kids will be able to figure out how to run this car in five minutes.  But it
has a day job and a night job.  When you’re not using it, you plug it back to the grid.  If
the price of electricity on the grid is higher than the price of the hydrogen, you’re a power
force and a utility, and you’re selling back to the grid.  But this is where the
communication revolution converges with the energy revolution.
 
We decentralize and distribute the power grid – the technology is already
available – so that it’s smart and distributed so I can send my surplus whether it’s in my
car, my stationary fuel cell back to the grid, peer-to-peer.  From ARPANET to distributed
grid technology; from fuel cells in NASA and the Pentagon and outer space to power to
the people – quite interesting to see the development of this.  Someone should write the
history.
 
All right.  Who is going to control all of this?  Top-down?  Bottom-up?  Well, it
has some real interesting analogies to the Internet and the computer and software
revolution.  Many of the early pioneers in the Internet revolution – my friend Nick
Negroponte and others said information likes to run free – this is what ARPANET shows: 
Information likes to run free.
 
Well, we will all hook up.  Nobody owns the Internet.  We will let information
run free.  Microsoft said we like this; good idea; but we would sure like you to use the
window, use the window.  The content companies like Disney and others aid we like this
idea but we sure want you to make sure that you pay for copyright.  So what has
happened here?  When Bill Gates goes to bed at night, I’m sure on one eye he is sitting
there – one eye is open because he’s thinking about Google.  And what is he thinking
about on the other eye?  What is the other company?
 
Audience:  Apple.  
 
MR. RIFKIN:  He is thinking about Apple now too, you are right.  He is thinking
about Linux.  It’s open-source.  One activist in Scandinavia says we’re going to share it. 
And now whole countries, the European Union, whole industries, IBM, companies all
over the world are using Linux.  It is counterintuitive we say at Wharton because it’s
open-source, and all of our ways of modeling economics is that would never work.  We
said it can’t work.  It' works.  Open-source.  How do you beat free?  
 
Then there is the question of your children?  How many of you have children
under the ages of 18?  I am glad to see this.  You know, when I ask this question in
Europe, nobody is reproducing.  I get no hands up.  (Laughter.)  This may be our hidden
strength.  Go into your child’s room and ask them what – this is a tough one.  See if they
will let you in, and go and ask them what you’re doing on the screen.  They are all file
sharing.  We are calling it cheating; they call it file sharing.
 
Now, if you were going to be on the big companies with deep lobbying in
Washington with very heavy legislation to ensure copyright with encryption versus
millions and millions and millions of your little kids who have nothing evidently to do
after school, and to figure out new software to get this free and flat, who do you think is
going to win?
 
There is room for everyone here.  There is room for the big energy companies.  I
was with Lord Oxburgh two days ago, former chairman of Shell, and we pretty well
agreed on almost all of this down the line.  And there is room for Shell; there is room for
BP.  In fact, I congratulate them.  They are two energy companies that have gotten this. 
The scenario units are on target.  They have got huge renewable divisions.  They are
moving on hydrogen.  There are figures on peak oil.  There are figures on renewables. 
They are almost pretty close to (mine in the book ?).  We didn’t have any disagreements
on our public discussion in Germany yet.
 
Now, having said that, Exxon is way behind.  They still think it’s about fossil
fuels.  They are tight.  Chevron is starting to move more to the Dutch-Shell-BP lines. So
they are not all together on this.  But as much as I applaud BP and Dutch Shell, they are
doing a lot but they are doing almost nothing.  But compared to Exxon they are doing a
lot, you follow me?  But they are not doing much.  It’s not just PR, but it’s not serious
yet.
 
There is room for the energy company’s deep pockets.  There is room for the auto
companies that are going to build the automobiles.  There is room for the technical
companies to build the fuel cells.  There is room for the companies to build a renewable
technologies.  There is room for the power companies to run the grids.  But I’ll give you
my best bet as to what I think is going to happen here:  This is going to go region to
region, community-community like Wi-Fi and the Internet.
 
I saw the future in Zaragoza, Spain, five weeks ago.  How many have spent any
time in Aragon, Spain?  All right, Zaragoza – third-wealthiest economic region in Spain. 
This is the 22nd century I saw five weeks ago.  I was invited in by the government to take
a look at this and to do a briefing there.  You come in on the plane and everyone is
looking out the window.  I thought, uh-oh; what is going on?  They are looking at wind
turbines all across the Pyrenees, beautifully spaced, aesthetically pleasing, outside of the
migratory bird patterns as far as your eye can see, you’re seeing them.
 
We travel by car with the minister, economic minister into this technology park
nestled in a beautiful valley – agriculture, the Pyrenees surrounding it.  And in this
technology park, which we come to, it looks like the 22nd century: glass buildings with
the diagonal tops right out of the science-fiction movies.  There are six up right now I
believe, 40 more under construction for the next four years.
 
And everywhere you see, renewable energy.  The whole region is 100-percent
renewable.  They don’t have to rely on one more deposit of natural gas through Russia or
any more oil from the Persian Gulf or their electricity.  They are getting hydro from the
mountains.  And the best places, by the way, are the mountains because you have hydro
and forest for biomass, you have got wind, and then in the valleys you have biomass from
agricultural waste, and you have solar from the sun.
 
So they are 100-percent renewable right now in this electricity, and this year they
are putting in hydrogen for electrolyses because they have more electricity than they need
– they want to store.  Why.  It turns out this little region is a logistics center – where are
my logistics people here tonight?  This will interest you.  It’s a logistic center for Spain. 
Everything goes across this region to Bilbao, Barcelona, and Madrid – 7th-largest
economic power in the world, Spain – it’s – (a movie ?).  So this is centrally located.
 
At lunch we brought 50 CEOs together, including the CEO of GM.  They have
the GM factory.  They have the largest GM production facility in the world there
producing – (inaudible).  Why did we do this?  In the evening, we brought 1,200 senior
executives from logistics companies across Europe.  They all go through their DHL,
Federal Express and regular transport.
 
Here is the idea:  100-percent electricity renewable.  They have got more than
they need.  They need to store it not just for the grid, but they are going to then say to the
car companies, maybe the General Motors plant, maybe us, we condition the trucks, we
are going to put hydrogen in.  We don’t have to rely on another gallon of gas from the
Middle East.  And we are 250 miles from Bilbao, Barcelona, and Madrid, so we don’t
have to refuel until to the end of the line.  And then we set up the logistics quarter.
 
And this last week I was with the prime minister of Slovenia and we had dinner. 
Now, this is interesting, you logistics people.  This is called the fifth corridor and this is a
very fine corridor, and it goes from Spain and Bilbao all the way through Italy into
Slovenia and then the Central Eastern European countries.  There is discussion all across
that corridor as the well as the North-South corridor about how you begin region to
region to begin to develop self-sufficiency.  You don’t need the national champions, the
big energy companies.  You don’t even need to wait for Brussels or Washington for that
matter because the businesses I work with, they are starting with the technology parts.
 
I’m going to be Basque country in two weeks where the three major technology
parks are there for Basque country and they are bringing in France and Portugal because
the technology parts are saying we can’t afford to wait for politics and government and
unpredictability.  We have to be energy efficient and self sufficient, and we want to not
only have it for electricity but for transport, you follow, because then we’re competitive,
and people will want to locate here with their businesses.
 
And what I believe you are going to start to see like Wi-Fi, big technology parks
across the world in key areas, they locate where there is heavy renewables, where they
got the bounty, they back it up with hydrogen storage, they use it both for power and for
transport, and then they hook up region to region to share it.  I believe this is the way it is
starting to unfold as I have seen it.  It is quite fascinating to watch it.  It has nothing more
to do than the bottom line and they can’t wait for policies from above.
 
The biggest beneficiaries of this revolution will be the third world.  The reason
the people are powerless is literal.  All of the fancy analysis of why the third world is
poor – people are powerless – literally they don’t have power.  That is why they are
powerless.  If you know about an energy regime and how it is distributed, you will know
who are the possessed and the dispossessed, always.  And I don’t have to tell you in the
military here.  It has always been geopolitics. It has always been around energy at least
since the coal era and then oil and gas, and two world wars.
 
So we talk about connecting the central nervous system of the human race, we
talk about the global village, we talk about the globalization of commerce – wake up call: 
Tonight over half of the human beings living on this planet tonight have never made a
single telephone call.  One-third of our fellow human beings tonight have no electricity. 
Now, imagine waking up in America and Europe and no electricity at all.  That is the way
one out of three people on the planet live.
 
So it isn’t just the possessed and the disposed; it’s the connected and the
unconnected.  The reason globalization has failed – and this is what I tell my business
leaders that come through our programs, I say to them you have failed because your
energy regime is too elite to be able to be deep enough to have real trade that involves 70
or 80 percent of the human race.  You can write nice books about 3 billion new
capitalists, but unless they have energy they can’t be a player.
 
The U.N. did a study in South Africa.  For every hundred families that get
electricity, 20 new businesses – it makes sense because then if you have electricity, you
can produce local and sell global, and we have weak globalization from the bottom-up.  It
is the best thing that could happen to business.  As my dad used to say as a businessman,
you have to give a little to get a little.  If you we want deep trade and we want to engage a
majority of the human race in trade, we have got to make sure that all of us have
distributed power so that we can actually produce and exchange with each other, then we
have real sustainable growth for the planet.
 
Last, I want to talk a little bit about politics.  I hope I don’t ruffle any feathers.  In
2002 I was serving as an advisor to Romano Prodi when he was president of the
European Commission, the governing body of the EU.  He is now prime minister of Italy. 
I still advice him informally, unpaid, labor of love.  I presented him with a strategic
memorandum of how the European Union could make a long-term exit strategy from
Persian Gulf oil because they are much more reliant than we are in the states.  We have
got Canada and we have got Mexico and we think we have Venezuela – we are not sure. 
But Europe is really stuck on Russian natural gas, as you know, and Persian Gulf oil.
 
So I have developed a long strategy.  He and I met when he was here to see
President Bush in 2002 on his yearly visit.  He gave the green light.  A year later, 2
billion Euro R&D program, technology platform in Brussels to begin the process of
weaning us off.
 
But Mr. Prodi – and this is very important to understand here at the Pentagon and
here in Washington.  Mr. Prodi was clear as to why he had to do this.  Because of Kyoto,
22 percent of the electricity and 12 percent of the energy of the EU has to be renewable
on their benchmark by 2010 or they can’t make their target for Kyoto.  They have to
double it by 2020.  When you get that much electricity that is renewable, 22 percent, you
have better way to store it.  This was just pragmatic.  You better have a way to store it
because the wind is always blowing, the sun isn’t always shining, the water is not always
over the dam.
 
Secondly, he was mindful of history.  The Brits became the great world power in
the 19th century because they were the first to harness steam power with their coal
reserves.  America became the great world power in the 20th century – we were the first
to harness the internal combustion with our oil wells.
 
Mr. Prodi realized 450 million people, 25 member states, first transnational space,
but it needed to go to the next stage of the integration of Europe.  First, there was the
steel and coal – coal steel community brought together some of Europe, then Maastricht
made it a political union, that treaty, then the Euro made it an economic union.  Then the
12, 10 new countries made it a geographic stage.  And the last stage is you have to
integrate the infrastructure: transportation, power, communication, but you have to have
an energy regime that is new energy, otherwise if you stay in the old energy, you can’t
engage in commerce and trade and really grow the economy sustainably.
 
So Mr. Prodi wasn’t doing this in any more reason than he had thought it out and
said this is practically what we need to do.  Is it moving as fast as we like?  No.  Are they
bogged down between black hydrogen and green hydrogen?  Yes.  A month ago I was
with Chancellor Merkel.  Among other things, I introduced this concept of a third
industrial revolution for Germany, a grand idea for the grand coalition.  Two weeks ago
they integrated the major theme into the energy policy statement for the Christian
Democratic Party.  We will keep our fingers crossed.
 
Here in America, it’s California.  It isn’t the Democrats and Republicans in
Washington.  This is California.  And I think – I’m betting – and the Department of
Defense to some extent.  We will talk about this in a moment.  California is moving this
because they are benchmarking renewables like Europe.  And now New York and other
states are looking to benchmark renewables like California.  I think it’s going to go
region to region, and I think it is going to be spurred by state governments as it is being
spurred by regions in Europe.  And I think technology parks and early adopters in
industry are going to see the need to be self-sufficient because they don’t want the
unpredictability of the price of oil and gas.
 
Finally, when President Bush announced that we would hydrogen, the first
hydrogen economy – that was in his State of the Union address shortly after we
announced this in Brussels – remember, three months later he said we are going to
hydrogen.
 
The problem, if I may say so, is that when he introduced the legislation to
Congress, his hydrogen was somewhat different than what we had in mind, and that is, it
was for coal, for a new generation of clean coal, to get the hydrogen – sequester CO2,
and a new generation of nuclear power that could electrolyze water.  I think this is the
wrong track.  We could argue endlessly about whether we can sequester coal and make
safe nuclear power plants, but in the final analysis – and this is the lesson we have to
learn from ARPANET.  Why did the military set up ARPANET?  What was the reason
behind it?
 
Audience:  Communications in a nuclear war.
 
MR. RIFKIN:  And flush this out for everyone else, the two of you.  Go ahead.
 
Audience:  It was a reliable communications network that would survive a nuclear
exchange.
 
MR. RIFKIN:  And why was it reliable in a nuclear exchange?
 
Audience:  Because it was flat.  It had lots of different nodes and different paths
to go.
 
Audience:  And the Internet and the protocol routing – any single node that would
be lost, it would reroute to some other node.
 
MR. RIFKIN:  In business we are trying to introduce our companies to moving
from markets to networks.  It is very difficult because they say we love networks, we
want networks, we are into networks, and then I ask them what is a network – we don’t
have any clue, but we want more of them – (laughter) – because there is logic is not flat,
decentralized nodes.  They know it’s the future but they don’t know how to adjust to it.
 
But ARPANET developed this so it was distributed, flat, decentralized so that you
wouldn’t have to risk the same kind of devastation as if it was centralized.  What I am
suggesting to you – if for no other reason we have to move to renewable energies because
they are distributed by the sun across the planet, and be able to store them with hydrogen
– hydrogen is a universal medium like digital technology.  It allows you to store all of
those sources and then use them in a universal way.
 
Now, it seems to me that if we want a peaceful planet and a sustainable economy,
and we want to live in a world that is more predictable and not less predictable, the more
flat, the more distributed, the more decentralized, the better off we will be.  That means
we have to find our way to renewables and storage of hydrogen.
 
I will end by saying this is very difficult.  The technology is still a long way to be
proven.  There is all sorts of engineering problems, thermodynamic problems, regulatory
problems.  It is one big giant disruptive technology revolution and it’s a complete mess. 
So what?  We could have said the same thing if we were in this room at the beginning of
the steam and coal revolution.  How would we ever lay rails across the continent in 500
years?  We did it 50.  And we could have said the same thing when the internal
combustion engine came in and the telegraph and telephone – how will we lay electricity
lines across continents and build an interstate highway?  We did it in 50 years.
 
I’m confident in my own mind that is the beginning of a process.  It’s early.  But
if we could go from ARPANET to connecting 25 percent of the human race in that
amount of time, why can’t we have the same distributive grid technology for a renewable
in a hydrogen future?
 
Last, last thought:  I think it’s also about legacy for all of you here from the DOD. 
I was looking around at the age breakdown here.  No offense, but we have got the 40 to
60 group here.  But this is very important.  When we bring in senior executives in our
advance management program, they have been selected.  They are CIO, they are
executive vice president, they are training them to be CEO.  They come in around 40 and
then we have a second group that comes in around 50; they have been selected.  The
interesting thing I have noticed after all of the years there is a little cruelty built into this:
sabbatical because when you have a sabbatical for five weeks, you begin to actually
rethink your life.
 
So a lot of these men and women, they are in their 40s or early 50s and I see
identity crisis every time.  It’s not part of the curriculum, by the way.  But they begin to
see, well this is it; I now know what I am going to be; my future is clear.  I am going to
be the CIO of a Fortune 100 company; that is it; that is it.  And some of them talk about
privately, you know, staying up at night, sweat under the neck, looking at the ceiling, and
their wives, their husbands saying is it me?  No.  They really are having a crisis.
 
And the crisis gets worse at 50.  I’ll share you some good news:  When you get
over 60 you can’t remember any of this stuff.  (Laughter.)  But it’s a deadly serious thing
because some repress this all together.  But the ones that go through this – I have seen
this time and again – the ones that can go through this process, when they come back,
they come back in a new way because their first 20 years they are trying to see I want to
get ahead for my family, use my skills, show what I can do.  The next 20 years – and I
stay in touch with some of them – they ask what can I leave behind?  What is my legacy?
Why am I at the DOD?  I have got to be able to believe that I’m doing something that
really makes a difference in the long run, not in the short run because in the short run I’m
putting out fires; in the long run what is the legacy?
 
I believe there is an opportunity here at the Department of Defense, and I know
that you are heavily engaged and will share this with me in a few minutes in hydrogen
research.  I know that is going on.  And I know there is renewable technology research. 
This is the place that gave us ARPANET.  This is the place that helped give us the
technology for fuel cells, along with NASA.  This should be the place that helps us usher
in a flat, distributed new energy era.  This is the best legacy you could leave on your
watch here at the Pentagon, and that is to give an opportunity for our children and
grandchildren to try to re-heal this biosphere.  We don’t know how serious it is, but we
know it’s serious.
 
And the legacy would help us allow the third world to have electricity so all of us
could chare on this planet, and reduce the geo-political tensions in the Persian Gulf.  I
have met a lot of people in the military over the years.  They are the ones who least like
war because they have been there.  That is what people don’t understand.  And there is
some way to distribute energy across the world so we don’t have the geo-politics of war
because the biosphere policies of trade, we would be better off.
 
If you can help make the roadmap, focus this on a third industrial revolution, help
create the technology from all of your various branches and departments, the best legacy
you will leave for future generations, it will help us really secure a peaceful world in the
21st century and a sustainable planet.  It has been a privilege being here tonight.  Thanks.
 
(Applause.)
 
MR. WEHRENBERG:  Mr. Rifkin, I thank you very much.  And I think we have
about three days for questions.  (Laughter.)  The first –
 
Q:  Dr. Rifkin, I’m Rod Adams.
 
And for those of you who don’t recognize Navy symbology, these are submarine
dolphins.  And I have an awful lot in common with you and your philosophies, although I
would like to suggest that lumping uranium and thorium in together with fossil fuels is a
misunderstanding of history.  The basic act of fission, or the understanding that heavy
metals can split apart and create vast quantities of energy was only discovered in 1939.  
 
And having served on submarines and powered around the globe, including the
North Pole, and other places with small, distributed nuclear power plants that produce
zero emissions and can be sealed inside a tube of steel full of people, I do not understand
why you have a philosophy or a feeling of nuclear power that is completely different
from that potential vision of small, distributed nuclear power plants supplying all kinds of
places, including Antarctica, Greenland, South Africa.
 
MR. RIFKIN:  I think what divides us here is – here is my belief on uranium
nuclear power: one, we don’t know how to get rid of the waste safely yet, and it has been
60 years in.  That is a deal breaker for me.  Two, I think it’s going to be too expensive. 
The power companies I work with are not going to do this unless the public says we will
pay for it.  But three, I think it is a security risk.  We don’t want Iran to have uranium,
correct?
 
Q:  Why not?  
 
MR. RIFKIN:  Well, check with the White House.  The White House doesn’t
want uranium there, so there is a difference of opinion.  But what I’m saying is that there
is a discussion about who should and who shouldn’t have uranium in transit.  That is a
big issue.
 
But finally there is another issue because – you appreciate the decentralized, flat
nature of the ARPANET revolution that gave us the Internet.  When you were on that
submarine, you see very small – it seems very small, it seems very autonomous, and it
seems flat.  But it isn’t because the costs that went in to providing that submarine is
beyond the reach of communities around the world.  It is not flat and distributed in terms
of costs because uranium and all of the materials that go into this require a hell of a lot of
capital investment up front.  It is not flat in the sense of power to the people and
distributed.  It’s not like the renewable technology you can put on a rooftop, if you can
have a fuel cell in community, or in your transport.
 
So in this sense I will respectfully disagree with you only on this one area because
I think we probably share maybe some of the other parts of this on hydrogen future, but I
want to see a technology revolution that isn’t so costly that by its very nature it has to be
centralized in who uses it.
 
Q:  Toshiba and Galena, Alaska, disagree with you.
 
MR. RIFKIN:  A lot of people disagree with me.  My wife disagrees with me half
of the time.  And I respectfully say that.  There are legitimate arguments.  As I said, I
don’t agree with them.  I have a point of view.  I certainly understand that there are
arguments – there are some weighty arguments.  I just don’t agree with them.
 
Q:  I am Chris Ratliff (ph) with the Strategic Studies Group in Newport.  
 
In the hydrogen economy, do you see a place still for some application of
hydrocarbon fuels?  And the reason I ask is my understanding of hydrogen and its energy
per unit volume doesn’t make it very suitable for ships and aircraft.  So even in a vision
of a hydrogen-based economy I still see some things, military application of ships and
aircraft, on high energy liquid, hydrocarbon fuels perhaps from renewable sources.
 
MR. RIFKIN:  This is something that we talked about in Germany the other day,
the question of aircraft.  And this is a tough one because if we really begin to see oil
moving up in price very, very quickly before we can get another infrastructure that can
take some of that burden away, I would be curious to see how the airline industry is going
to make it.  I mean, when I see what is happening now, and I project $100 or $150 a
barrel or more, I just don’t – I wonder how they are going to make it, all right.  And then
of course the military – the question of the cost are enormous and far-reaching.
 
The biggest problem with – fossil fuels aren’t going away anytime soon.  I’m
talking about a step-by-step journey on parallel tracks.  And I think that is we should
steward the fossil fuels.  And this Lord Oxburgh, former chairman of Shell, and I agreed
on completely:  And that is that use the fossil fuels for what we absolutely need them for
because they is no alternative.  We need them on pharmaceutical stills and we don’t have
the genomics revolution kicked in yet significantly to take up the slack.  We need them
for lubricants.  We need them for some building materials and plastics.
 
So we should be using the fossil fuels for what we really need them for, but not
for power and heat, transport.  We should use them very carefully with very tough CAFE
standards, fuel efficiency, move to hybrids, all of that, and then deep pocket a long-term
infrastructure shift to renewables and hydrogen.  I hope we can have enough technology
in place so we can open up new business.
 
For example, as you know in the cutting edge with hydrogen, they are moving
being electrolysis.  There are scientists working with being able to capture hydrogen
directly in the electrons directly from sunlight.  We don’t know.  But I would say what
we have to do is move on all tracks at once to get us out of fossil fuel and in nuclear
technologies.  I think they are too centralized, too costly, and I think that they are not
technologies I see in the 22nd and 23rd century.  I don’t think they fit the flat world.
 
But the answer to that question on aviation is really significant.  I was with a
maritime industry – the producers.  Now, this doesn’t affect you folks, but we were – I
was with the commercial maritime industry at their annual meeting.  And on the small
boats – this is really interesting.  Any of you know Catalina Yachts?  This is just
amazing.  For all of you folks that are ocean-oriented here, Catalina Yachts has set up a
deal with a company – I think it is called Hobb Three (ph).  I have to remember.  And
they can be completely renewable at see with never docking on these yachts.
 
What they have done now is, you know, some boats now you have solar right on
the boats for some of the electricity needs, and there is wind turbines now on boats right
now.  So you have solar collectors, you have wind turbines on the boats.  And of course
they have technology on the boats now that let you desalinize the water so you have fresh
water.
 
Well, now what they have done with this boat is they put electrolyzers on there so
they generate electricity with solar, right, and even wind – you see where I am going –
solar and wind, and then they take the water they purify and they use electrolysis to take
some of that electricity.  They grab hydrogen and they have storage.  They don’t have to
dock.
 
Now, you can’t do that with a submarine – I don’t know if you can or not.  Now, I
will turn it back to you.  You need to help me.  What is going on at DOD with some of
this technology?  What kind of ways are you extracting hydrogen?  What are you doing
that you can share with me publicly tonight on transport?  Because I know there is lots of
things that I have Googled on the – that the military is doing on here that is public. 
Anybody want to talk about where directions are going.
 
Q:  Well, AIP is a dual cell – well, you probably know more about it than I do it.
 
Q:  My name is Jim Core.  I’m on the Navy staff.
 
But I’m familiar, very rudimentally familiar with AIP technology, which is
development of hydrogen fuel cells in a metal matrix, which is used to propel and turn
the submarines.  And that technology is very successful.  It is not widespread in the
United States, but it’s spreading globally quickly.
 
MR. RIFKIN:  Well, I have seen on the research we have done on our office on
submarines a little bit, but the DOD is not doing that here?  Germany.  Those German
engineers are good.  That is why Germany is the number-one exporting – you know, next
time we lament poor old Germany on the rocks with its 82 million people because we
kind of tend to keep them up while all of our business people – little Germany with 82
million people because of its engineering prowess is the number-one exporting nation of
200 countries on this planet, six-times the ability of China – a little 82-million-people
nation – great on engineering.
 
Q:  Eddie Simes  – atomic energy projects.  
 
There is a possibility that – you know, everyone is looking at “The Hydrogen
Economy” and I had an opportunity to read that.  It’s a terrific book.  I really enjoyed it. 
But there is a very good possibility that breaking the hydrogen cycle and still weaning
away from the hydrogen cycle, we are not doing that; we are just sort of trailing along.  A
more radical approach – it is possible to use the biosphere, nitrogen, which is in the
atmosphere, and it’s all over the world – politically you can’t take it from us; it’s in the
atmosphere.  Ideally that would be the way to tie up a flat distribution because everybody
would have access to it. 
 
Now, how can you use nitrogen in a way that could gain you access to electricity? 
The free electron is really what you want because I can power my TVs, radios,
computers, all of my machines for manufacturing.  So electricity is the ultimate end
game.  But how do you gain – you have to change the technological path, and liquid
nitrogen will allow you to break the hydrogen barrier and still provide you with the
renewable energy capabilities with zero emissions.  And it also ties in real nice with the
nuke guys.
 
MR. RIFKIN:  That is interesting.  I think that anything that sets us in the
direction of renewable technology that is flat and distributed I am for.  I think eventually
– but, you know, maybe nitrogen is the way.  I think hydrogen is so ubiquitous; it’s such
a universal carrier; it makes sense.  But I don’t know; this may be a new area of
exploration that could be very fertile ground.
 
Q:  This is very fertile ground because if you take – first of all, if you take a
Google search of the area that I’m looking in, there is, like, a hundred thousand articles
that are being published every month.  It is almost impossible for one person to actually
keep track of that.  It is virtually impossible.  But it also takes advantage of new
technology that just cropped up within the past 10 years with high-temperature super-
conductivity.  That has a new technology that has come on board, and they are
overlooking the real potential there.  Anyway, thank you very much.
 
MR. RIFKIN:  Yes.
 
Q:  Hello, again, Jeremy.  Jan Lundberg with Culture Change.  I am quite along
the same lines of thinking regarding decentralization.  I guess I am a little more low tech. 
You seem to be advocating a continuation of the consumer technology regardless of
population size, assuming the same or even larger.  So have you quantified how much
resources, especially plastic from petroleum, for example, could float how many
consumers for how long, forgetting about entropy and forgetting about possible starvation
from petro collapse.  You alluded to these things in the beginning but how does it all
come together in an equation?
 
MR. RIFKIN:  We had an interesting discussion about this in this meeting in
Germany with some very, very good scientists around the world, geologists and others,
and there was some speculation on demographics.  And of course we know we have built
this whole 6-billion-human world on a fossil-fuel culture; that is incontrovertible.  And
then the question was if that is over, and we are going to solar flow, how many people
can we maintain on this planet in the future?  And of course nobody knows.
 
But I saw some of the best minds in the world saying that eventually we probably
could move back to 2 billion.  The question is how do you do that?  Let’s assume that we
do that.  But I am of the school that it is very important to do it carefully and wean over
two centuries changes of this magnitude.  You know, if you think as a parent, think as a
responsible human being, you don’t want to just go to the end of one line and the chaos. 
It is important to be thoughtful and careful and steadfast.
 
So to me – it doesn’t behoove me to say how many people can we populate now. 
I suspect that there is a certain limit to the human race populating this planet, right.  I
think we will agree to that.  It seems to be getting a little crowded already, and our fellow
creatures seem to be getting edged out of their bio-tats and bio-habitats and diversity. 
But I don’t know the numbers.
 
What I would say is that as we move off fossil fuels and as we move off of
uranium and fossil fuels, we have to have a way with renewables to have storage in place
so we can wean ourself carefully into a more sustainable future.  We have to have that
storage capacity for renewables; we can’t just rely on the flow.  If we just rely on the
flow, we will have chaos because the world will not be able to manage itself, the human
population on just flow right now.
 
Do we want to have a more sustainable future?  Yes.  Are we perhaps using too
much of the earth’s bounty for one species, our species?  I believe so.  How do we get
there though so that we can become more sustainable and lower population?  We need it
to be done carefully so we maintain a decent quality of life and we maintain some
opportunities for our children, but not at the expense of our fellow creatures.  This is a
very difficult process, and anybody that says to you they have the easy answer to this
doesn’t know what they are talking about.  This is extremely challenging.
 
Q:  Don Auerbach with the Agricultural Research Service of the U.S. Department
of Agriculture.  What would you like to see in the way of government policy that would
help us move in the direction that you would like to see us be moving?
 
MR. RIFKIN:  Well, let me talk about agriculture because we’re doing some of
this – I still advise the European Union.  We are looking at this question of biomass.  So
let’s deal just with agriculture.  We are looking at biomass – forest waste, agricultural
waste, perhaps energy crops, organic waste, waste water.  I think this is a real comer
because you can get the hydrogen direct; you don’t have to go through electrolysis, all
right; it’s one component to the mix.
 
Then the question is – forest waste, that is easy; you get it right from the waste. 
Solid waste, waste water, it’s going to be landfills anyway.  I was with one of the two
largest waste management companies in the world with their division heads and CEO
three weeks ago.  I said you are the Saudi Arabia of waste, and you are just generating a
small amount of electricity from landfills.  Can you imagine a waste company that
controls under contract massive waste, the biggest cities in the world, and agricultural
waste and forestry waste and they are not getting hydrogen from it?  They are going to
start.
 
Now, what I would suggest is when we get to agriculture we have to be careful
here.  Some crops thermodynamically are not as good as others.  Now, we’re into ethanol
now.  There is a lot of politics behind it.  But frankly, all of you engineers, if you take a
look at the thermodynamics of corn, it’s not so good.  It requires a high-energy input per
output.  Sugar beets – a winner, total winner, because with sugar beets, 80 percent of the
crop is waste.  Right away you just grab it all and you can still have the sugar beet.  And
it’s possible that we can develop, as the president said, the grasses, the cellulose or
hydrogen.
 
But the question is how do we use our agricultural land?  You know, I mean, is it
going to be for energy or food.  We have to create a balance here.  Now this is something
that is going to be difficult to digest, too. with some folks.  But there is a way to do that,
but we have to deal with the food-feed issue because if we want to feed people and we
want to create some of our arable land for energy, to do both, we have to take a look at
how much land is being used for feed grain.  And right now about a third of the arable
land in the world is feed grain for animals, not food grain for people.
 
So over a period of two or three generations, we have to convince each other
because you can’t legislate it to eat down on the food change.  And the feed crops, they
moved over to energy-based crops, so we can still maintain the food crops to feed a
population (that is 49 billion ?).  Now, you cannot force someone to move down the food
chain.  This has to be something that is cast down as a lifestyle commitment and a
responsibility to future generations, and I don’t believe you could do it under three
generations, do you, three generations to pass on a change in diet.
 
But that would free up land if we had the right crops that had a good
thermodynamic output to input, and then in the EU of course there is a law now, a little
bit of a law that allows for subsidies for energy crops.  And of course we have got that
here now with ethanol.
 
So I’m a believer in using the waste first, agriculture waste, forestry waste,
organize waste.  I believe that some crops are better than others like sugar beet.  I think
that it is possible, as the president says to take a look a look at grasses that have good
cellulose for hydrogen – try a combination.
 
Anybody else?  Yes.
 
Q:  Hi.  I am Maggy Cossal from AT&L.  And I would like to brag a little bit
about some of the work we are doing in the DOD at the very basic research level.  We are
looking at – a number of different programs are looking at nano-structured materials for
photovoltaics, (on beyond ?)  gratzel (ph) cells, some fulering-vased (ph) organic
materials, and some inorganic, organic hybrids.  And this bringing together both of these
ideas of future energy sources and this new area of science, nano-science.
 
MR. RIFKIN: Yeah, I think there is a lot of possibilities there.  At the cutting
edge of this technology of course they are talking about nano for storage, absolutely. 
Anybody wants to get the last, last word if it’s quick?  Yes.
 
Q:  Thank you for your nice talk.  I’m Nick Drang (ph) from the Naval Research
Lab.  And I work in both hydrogen storage materials and also hydrogen storage
distribution, and also some of the syn fuel, synthetic fuel, hydro-carbon base.
 
And I believe that full analysis we have some publication if you are interested. 
We did some analysis for about the hydrogen economy for the DOD.  And we realized
that is not feasible because there is many problems associated with hydrogen.  One of
them is storage, also safety problem.  My analysis is that we probably have to depend on
hydro-carbon based fuel for the next century or so.  And at the Naval Research Lab, we
developed some of the very cutting-edge technology right now, although we have no
funding for it. 
 
But we could – last year we were asking the – (inaudible) – for about $40 million
to support our project and we believe that we within a decade or so we capable to reduce
the amount of CO2 back to the pre-industrial level concentration.  We also can use CO2
to synthesize hydrogen carbon, so in that way we have zero CO2 production.  So that is
my take on it.
 
MR. RIFKIN:  Well, I have to respectfully but completely disagree with your
analysis, but, you know, I would love to see the studies.  I have spent 25 years myself
looking at this, and I, you know, I have talked to a lot of folks.  There are people who
believe we can go with fossil fuels for the next century, hydrogen won’t work.  But I
have to say that if I were a betting person, I believe we’re going to get of carbon in this
century; we are going to have to.
 
I don’t think you can find a zero-emission-carbon-based energy culture on this
planet and I don’t know if any scientists I work with anywhere in the world that I work
with that says you can.  I am just giving you my opinion.  You gave me yours; I am
giving you mine.
 
I would like to see us move out of carbon-based energy.  I would like us to move
into renewables.  I would like to see how we can store with hydrogen.  There may be
other opportunities out there too.  But I want to free us out of the old thinking, and I think
if we get in the new thinking, we are going to open up many more doors that we haven’t
even thought about.
 
And the job now for R&D is open up doors for us.  You know, we use this tired
old phrase at Wharton, think out of the envelope, which none of us do.  We need DOD to
help move us into door after door with these cutting-edge approaches so that we can
move into a sustainable energy era: renewables, hydrogen, and the third industrial
revolution.  We are waiting so we hope you lead us into this.  Thank you.  Good night.
 
(Applause.)
 
DR. WEHRENBERG:  Thank you very much, Mr. Rifkin.  You really have given
us a lot to ponder.  
 
I will remind everybody, our next session is June 20th, the same place, featuring
Matt Simmons, and we think we have some exciting folks to discuss the potential of
biomass on July 17 as well.  Thank all of you for coming.  I would ask you recycle your
badges on the way out and you can grab your announcement for the next session at the
same time.  And please visit our website at the Cebrowski Institute.   (END) 

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