Dedication of Miramar Naval Air Station
Molten Carbonate Fuel Cell

Remarks by
Patricia Fry Godley
Assistant Secretary for Fossil Energy
at
San Diego, California
February 20, 1997

Thank you, Mr. (Lee) Camara. Today, we are taking another major step toward a new era in electric power generation. We can now envision a world in which high-tech energy modules like the one you see behind me will be just as commonplace in remote villages of India and China as they are in the urban centers of Los Angeles and New York. And it is quite likely that many of those units will trace their technological roots back to San Diego and the power plant we are dedicating today -- and to another plant dedicated in Santa Clara last June.

Both fuel cells are part of an R&D effort that began several decades ago. We have had our breakthroughs and our setbacks. Because of the determination of people like Lee Camara of M-C Power, Len Marianowski, of the Institute of Gas Technology and formerly with M-C Power, who has, with patience and perseverance, directed the technology development from the beginning, Al Figueroa of San Diego Gas & Electric, which provided much welcome support, and many others, we have real-world results.

I especially want to thank Captain Bryan Rollins, Commander of Miramar Naval Air Station, for providing the site for this first-ever co-generation fuel cell plant. This project took investment, time, cooperation, hard work and vision on the part of many in this room. But it was worth it -- you have succeeded -- and I congratulate you all.

Before I talk further about the significance of this project and other energy research and development, I want to acknowledge several guests in our audience. Paul Holownia, Deputy Director for Diversification of Gas Supplies for the Polish Oil and Gas Company and several of his colleagues are here with us to see this marvelous new technology. Welcome Mr. Holownia. And, Dr. Boris Lubovin, Deputy Head at the Ministry of Atomic Energy of the Russian Federation (MINATOM), a fuel cell expert and co-chair of the Russian-American Fuel Cell Consortium, is also here with us. We welcome you.

Also with us is Brigadier General Charles F. Bolden, Jr., Assistant Wing Commander of the 3rd Marine Aircraft Wing. Welcome General Bolden.

This event illustrates that close cooperation between the private sector and two government agencies -- the Department of Defense and the Department of Energy -- is a productive way to do business. Together, we are using our resources to accomplish national goals efficiently and effectively for the American public we serve. At the same time, the private sector is able to leverage its limited research dollars and to test what we believe will be a revolutionary energy technology.

The reasons the private sector invests in fuel cell technology are clear: The market for fuel cells for electric power and other applications is projected at $1 billion in annual sales by the early 21st century, which is right around the corner. Such a market, analysts say, could create as many as 100,000 jobs.

But a question posed almost daily back in Washington, DC is: Why should the federal government invest in energy research and development? In this project, nearly $20 million. Isn't this a waste of taxpayer dollars? Isn't this corporate welfare? (Kasich definition: When a benefit to a company exceeds its benefit to the public.)

The answer is No. And I'll tell you why. First, energy security is a vital national mission as defined by all Presidential Administrations of the post-Cold War era. President Clinton has continued the commitment of ensuring that U.S. citizens enjoy an abundant, affordable supply of energy.

Since the 1950s, there have been six oil supply disruptions, an average of one every five to ten years, all originating in the Middle East. The cost to the U.S. economy of those price shocks is estimated at $4 trillion. Today, nearly 50 percent of our oil is imported -- and imports will reach 60 percent by 2010, most of it from the Persian Gulf. Another supply disruption in 2005 would cost the U.S. economy hundreds of billions of dollars, according to our estimates.

Investing in Fossil energy R&D is important because 85% of the energy we consume in this country comes from fossil fuels--coal, oil and natural gas. By 2015, analysts predict we will rely on fossil fuels for as much as 88% or more of our energy. Industry, in partnership with The Department of Energy, has achieved some remarkable developments in solar and other renewable energy technologies. But, even with the great promise of these emerging technologies, our nation -- and the world -- will increase their reliance on more affordable fossil fuels.

Increased fossil fuel production and use brings with it increased environmental impact at a time when the world community is increasingly concerned about environmental quality and the impact of human activity today on future generations.

That's why technologies like the fuel cell are so important . . . they offer us a way to use affordable, domestic fossil fuels -- our abundant supplies of natural gas in this prototype plant -- while protecting our environment.

The fact that fuel cells cut carbon emissions in half also makes the case for public investment. This pollution reduction potential is why fuel cells are front-and-center of President Clinton's Global Climate Change Initiative to reduce greenhouse gases. The American people and the world's people want to breath cleaner air. And, advanced technologies like fuel cells will enable us to achieve that goal.

In addition to environmental quality, economic growth is another benefit of advanced energy technologies as they enter the marketplace. Advanced technologies, that contribute new jobs and new businesses, make the difference between a prosperous or a stagnant economy. The United States remains a leader in energy and environmental technologies. However, U.S. companies face increasingly fierce global competition from industries in Japan, Germany, and other nations that receive strong government support for research and development.

The Japanese government has been increasing its federal investment in fuel cell by an average of 20 percent a year for the past five years. The Europeans are considering significantly increasing their fuel cell funding.

Critics of government-funded R&D say support from agencies like the Department of Energy replaces money a company would spend anyway. Cuts in private sector investment in research and development that have followed decreases in federal R&D spending in recent years do not support this contention. If government abandons its role in long-term research and development, industry is not, based on recent trends, going to pick up the tab.

Industry, particularly one company alone, cannot afford to invest in high-risk, long-term research and development. Government support, in cost-shared partnerships like this one, is needed to leverage private sector research funding.

Industry investment in energy is also declining, particularly in the electric power sector. Utility research and development investments have declined 33% in three years, according to a recent study by Congress (GAO), due primarily to increased competition and cost-cutting as a result of de-regulation and competition in the electricity marketplace.

Now, more than ever, federal investment is needed to ensure that fuel cells and other energy technologies are developed. We have a lot at stake . . . and a lot to lose.

If we want to lessen our dependence on potentially unstable supplies of foreign oil -- and to maintain and enhance our leadership in science and technology, reduce the environmental impact of energy use and enhance our standard of living for the next generations . . . we must continue industry-government partnerships like this one to invest in long-term energy research and development.

The future impact and benefits of projects like Miramar are well worth the investment today -- public and private. Without partnerships like this one -- with forward-thinking companies and innovative, passionate people -- we would not be the great nation we are today.

Thank you very much.