July 01, 2010

Gen. Clark says renewable energy the ‘peace’ fuel of the future

As a four-star general who served as NATO Supreme Allied Commander from 1997 to 2000, Gen. Wesley Clark has been in a unique position to see how vital energy independence is.

“Is there any doubt about what America's dependence on foreign oil has meant?” said Clark at the 2010 Renewable Energy Action Summit held in Bismarck, N.D.

He said Secretary of State Baker “was real clear” that the 1990 war with Kuwait was about protecting foreign oil supplies.

“In 2002 in the run-up to the second war with Iraq, we were a lot hedgier. Couldn't get anybody to admit the war was about oil,” Clark said. “But the truth was, it was about oil. And today Iraq is sitting on the world's greatest, undiscovered and undeveloped reserves of hydrocarbons. It is there, protected by Saddam all these years and that was what these last few years have been all about.”

As co-chair of Growth Energy, Clark is involved in all kinds of renewables:, including ethanol with Poet in South Dakota, wind, solar - while still working on boards that deal with oil.

He ran for U.S. president in 2004, then became a businessman.

U.S. Sen. Byron Dorgan, who organizes the summit each year, said the U.S. needs to develop domestic energy strategies that are a mix of renewables - wind, biomass, biofuels, solar - along with drilling domestically.

“The new, big thing here is the Bakken shale (an oil formation in western North Dakota) for sure, but it's not the only new thing. I'm a big fan of doing it all,” Dorgan said at the summit.

He said he expects an energy bill with a renewable energy and carbon credit component to be out of the Senate by the end of summer.

“We need a renewable fuel standard, higher blends for ethanol, and new technology in renewables applied to it,” Dorgan added.

Clark said there is no way the U.S. will survive without developing ethanol, biodiesel and other domestic, renewable energies.

“We cannot move forward as a nation paying $300 billion a year out of our economy to other countries to support our energy consumption,” Clark said. “Can't do it - won't be able to make it. That is more than the health bill; that's your children's education.”

Clark said before the late 1960s, the U.S. actually used to export oil, not import oil.

He began in the energy business by studying nuclear engineering and Middle Eastern policy at West Point.

“I came back from Vietnam and I was teaching economics at West Point. Suddenly it occurred to all of us up there that we were no longer an oil exporting nation.”

Clark said America used to be the “land of cheap energy. We dominated the world's oil markets.”

In fact, during World War II, while Hitler was trying to invade Russia and capture their oil fields in order to fight the rest of the war, the U.S. continued to supply oil to the rest of the world.

But in 1969 and 1970, the tables turned, Clark said. OPEC was created and the U.S. began to import oil.

“By 1972, we had our first oil crisis and oil prices had risen considerably,” Clark said, adding he wrote one of the first papers on the oil crisis in 1973 at the Pentagon.

“It was clear even then that if we weren't independent in a source of energy in America, it would affect us in some adverse way,” Clark said. “I went so far as to suggest that someday we might end up seeing U.S. military forces deployed to the Persian Gulf to protect access to critical energy supplies.”

He said it was “an absolutely blasphemous suggestion in 1973.”

“These colonels told me, ‘Captain, you can't write that in that paper ... They are going to accuse of us of wanting to start a war over energy,” Clark said.

Today America's counter-terrorism effort is really all about oil, he added.

“Do you have any doubt that somehow there is a connection with the vast transfer of wealth that occurred because America shifts dollars overseas to bring oil over here,” he said, adding that it's the same thing as paying $1,000 for every man, woman, and child in America so oil can be imported from other countries.

The money actually funds the terrorists who are against “American interests and values in the world.”

Clark said the problem now is Dorgan and other people who want renewable energy and energy independence have not been able to capture the public attention.

For example, the production tax credits and incentives for wind haven't been stable and consistent enough for investors to want to continue investing in it.

“Wind wasn't investable,” Clark said. “If you were looking to make money, you wouldn't look at it.”

Last summer, he talked to a friend in Arkansas, to try to get him to invest in a company that had “a billion dollars worth of wind, waiting to be developed in the Upper Midwest.”

Clark told him the wind farm would be leveraged at 50 percent but $500 million more was needed. His friend told him that they didn't want to spread their money into anything that relies on government policy.

But oil and gas is all about government policy, Clark said.

“It does illustrate the difficulty of moving beyond conventional hydrocarbons and investing into new fields of energy in this country,” he said.

There is a lot of innovation in America and a lot of people have ideas about renewable energy.

“What is it about the American character that gets us moving? We are the world's greatest innovators. We have more great ideas and entrepreneurial energy than any other place in the world,” Clark said.

But the public has to demand it. Congress did not extend the production tax credit for wind energy industry and the industry collapsed, at least temporarily, he said.

“You've got to create the demand for innovation,” he said.

Many of the technologies that emerged in the 20th century were the result of government-financed research by the military that led to commercial applications, according to Clark.

“We developed the laser, the transister, and integrated circuits to carry airborne jammers and penetrate Soviet Union air space,” he said. “We spent hundreds of millions to start companies then commercialized the industry. The internet started from military investments.”

Unfortunately, since 2000, U.S. financial institutions and investors began focusing on real estate and credit default swaps.

“In wind and solar business, the whole financial structure has been distorted on what is a reasonable profit and rate of return,” he said.

Wall Street says the “green” technology is great to invest in, but what they are really doing is taking our money and investing it abroad, he continued.

“We got dozens of great entrepreneurs that can't get funds because the demand is not there,” he said.

Clark said ....