Remarks by
Hazel R. O'Leary
Secretary of Energy
to the
Fifth Annual
Clean Coal Technology Conference
in Tampa, FL
January 10, 1997

I wanted to join you today for two reasons.

First, I believe it is altogether fitting to enter the final days of my post in much the same way as I started my very first association with energy -- watching coal head out over the horizon, in pursuit of new opportunities.

As a youngster growing up in Virginia, I sat on the docks at Hampton Roads with my father and watched coal colliers being loaded and bound for European markets.

There was a touch of mystery in what lay over the horizon for those ships. It was from that early lesson that I learned energy was global and it meant jobs at home. In those huge coal piles at the docks, I gained a sense of familiarity. At a young age I sensed the power and strength represented by those storehouses of coal. I saw firsthand the linkage between coal, jobs and economic prosperity.

The interconnection between coal and energy and the advancement of people in every corner of the globe was real to me watching those ships being loaded and disappearing over the horizon to faraway, exotic places.

I gained an appreciation for the people whose hardwork and sweat was responsible for those huge coal piles.

My father was a physician in the Tidewater area. He took care of the longshoremen who helped load that coal. They were his patients and our friends.

So, for this Secretary of Energy, very early on, coal was both life and livelihood.

Today those distant horizons are much closer....the world in many ways made much smaller. The health and prosperity of each of us are now much more dependent upon the actions of all of us. Our economies are global. Economic security and environmental protection are no longer the priorities of individual nations....today, they are universal imperatives.

We live today much more like a single, worldwide community. Our futures interdependent.

We share common horizons for tomorrow. And increasingly, those horizons are being set -- and achieved -- by technology, .in this case, clean coal technology.

I wanted to join you in Tampa because, like the youngster on the docks at Hampton Roads, the horizons I see today for coal offer the same remarkable opportunities.

There is still a touch of mystery in what the 21st century holds, but today we undertake the voyage toward that new world equipped with extraordinary technology.

It is with this new technology that coal can continue, as your conference theme so aptly states, to "power the next millennium."

A Tribute to Clean Coal Pioneers and Partnerships

The second reason I wanted to be here today is to pay tribute to the people whose genius and hardwork made this new technology possible.

"Clean coal technology" is the product of partnerships. Nothing like the TECO project, or the Wabash River project in Terre Haute, Indiana, that I visited in November 1995, or the Pure Air project on the banks of Lake Michigan -- or any of the projects displayed on the posters around this room or in the exhibit hall -- would have been possible had it not been for the determination of farsighted individuals in the private sector, in state agencies, and in the legislative and executive branches of government....individuals in this room today.

You had the determination to shoulder the risks of this new experiment in public-private cooperation.

For the few who may not remember with the origins of the clean coal technology program in this country, let me tell you it was a risk.

It was 1984 when the clean coal experiment began, and it is important to reflect back on the mood of the times. I had completed my first tenure in government during the tumultuous 70s, and was happily at work in the private sector.

I can tell you -- from the perspective of both a public and private official -- government's track record as a partner in new energy programs left a lot to be desired.

Who is this room does not familiary the synthetic fuels program, begun with great fanfare when energy expectations were different? Who does not remember the major international demonstration projects in coal technology -- the Solvent Refined Coal projects with Japan and Germany -- which had been abruptly terminated?

Congress had killed the Clinch River Breeder Reactor. The Great Plains Gasification Project in North Dakota was on the verge of being abandoned even before the first cubic foot of coal gas made it into the pipeline.

One can certainly argue whether any of these "grand initiatives" should have continued...or whether all might have wound up as white elephants. But regardless of whether each was right or wrong, one common thread ran through them all. As a predecessor of mine, Don Hodel, put it at the time, these projects begged the question "Did the federal government have the moral conviction to complete anything it starts?"

It is against that backdrop that people dared to plan a new partnership. It was in that era of broken commitments -- ill will from our friends in Japan over the SRC project, distrust from many in our own private sector. That was the temper and tenor when the Clean Coal Technology Program was launched. And it is a tribute to many of you in this room that in an era of deep skepticism, the U.S. Clean Coal Technology Program not only succeeded but became a model of government-industry partnerships.

The Clean Coal Program "is an example of a federal program that works." "Congress should support similar government-industry ventures to speed technology transfer...." Those aren't my words. Those are the words of the General Accounting Office, the investigative arm of Congress, when it reported on the benefits of government-industry cooperative R&D in 1994.

Why did it work? What made it different from the other "big ticket" initiatives that never got off the drawing boards? Most importantly, what lessons do we take from the clean coal program into the next millennium?

The Environmental Ethic Comes Home

First, Clean Coal was a program that met a clear public need. It responded to an environmental ethic that people in the 1980s began to take in a way that was exceedingly personal.

Our environmental consciousness was born in the earth day movements of the late 60s and early 70s, but it changed dramatically in the 1980s. It deepened. It began to hit home, and it began to hit families in their homes.

Twenty years ago, the environmental movement spoke about the esthetic effects of human activities -- whether our air was clear or dirty, whether our waters ran pure or polluted, whether the landscape around us remained scenic or obstructed.

Sometime in the 1980s, we went to another level. Today there is a new environmental consciousness. We are concerned with the effects of human activities on human health and wellbeing.

It's not just whether the air looks dirty or smells bad but whether it is harmful to us and to our children....whether it carries unseen impurities that can damage our health and our productivity.

In the 1980s, we became concerned about the personal cost of environmental damage, the price we must pay... in monetary and, most importantly, in human terms.

Clean coal technologies succeeded because they responded to that environmental ethic and, at the same time, they made economic sense.

They offered a way for us to improve the quality of our air and to reduce the eyesores of solid wastes without imposing exorbitant new costs on consumers and dragging down the economy.

Clean and affordable energy -- clean coal-- gave us a way to achieve both.

It gave us a vision of the future in which the public would no longer associate the word "dirty" with the word "coal."

It gave us a future in which our most abundant energy resource -- the world's most abundant energy resource -- could continue to fuel economic growth without sacrificing our environment.

Just look at one of the many success stories coming out of the clean coal experiment:

Today, more than one-fourth of all coal-fired capacity in this country -- nearly 250 boilers -- have been outfitted with low-NOx burners demonstrated in the Clean Coal Technology Program. By the year 2000, more than 75% of coal-fired boilers will have this new, lower-cost technology. Emissions are coming down. The air is becoming cleaner. The new technology of coal responded to the new environmental ethic. And the economy is better off for it.

Ratepayers have saved nearly $20 billion in emission compliance costs from low-Nox burners alone. Commercial sales have amounted to almost $1 billion.

Not a bad payback on a $40 million Federal investment....a good lesson for the 21st century as we tackle the problems of CO2, air toxics and particulates.

Industry Picks the Technologies

The Clean Coal program also succeeded because industry was the driver. Government did not pick "winning technologies," it looked to the private sector and picked willing and able partners.

Government programs in the past failed largely because government in its pomposity tried to dictate the portfolio -- so many gasification projects, so many oil shale projects, perhaps even a breeder reactor if anyone would build it.

This time, industry came to the table with its own technology solutions...and with the conviction and resources to invest in their demonstration. The partnerships were partnerships of intellect. And come to the table they did.

Let me tell you a story about the origins of the Clean Coal Program.

The current program, as many of you remember, began in response to the U.S./Canadian transboundary problem of acid rain.

Then-Prime Minister of Canada Brian Mulroney had hammered President Reagan to adopt the recommendations of the U.S./Canadian Envoys on Acid Rain -- the centerpiece being the Clean Coal Program.

But on that day in March of 1987 when Ronald Reagan stunned many inside and outside his administration by agreeing to a new $5 billion public-private initiative, several of his budget-cutters -- who certaintly didn't want to see another big government initiative eat away at other programs -- were quick to tell the Department of Energy "Don't count on seeing any of that money."

Yes, the Federal share would be put on the table, they said, but it would be window-dressing. Industry would never put up the required matching funds. So OMB said that the program would die on the vine.

But they were wrong.

Those career officials at the Department of Energy -- many in this room today -- fashioned a program that put industry in the drivers' seat. That took courage. It was new.

Sure there were safeguards in place. The whole process was set up to run competitively. Performance standards had to be met. But it was a dramatically new way to do business.

And the skeptics were wrong. Industry not only put their dollars on the table side-by-side those of government, they did much better. For every $1 dollar the government invested, industry laid down $2.

The $5 billion program envisioned by the Special Envoys is today nearly a $6 billion program because industry and states upped their contribution. The 50/50 funding split originally envisioned and required by Congress is today 65/35 with the 65 being the contribution of industry and states.

And let's not forget the States. This program succeeded because the Clean Coal partnerships evolved in states like Ohio and Illinois, Indiana, Pennsylvania, Alaska -- and the tireless, grassroots efforts of state officials.

One out of every 3 projects in the clean coal demonstration program (14 out of 40) involves state co-funding. Again, brave, visionary thinking at the state level.

The Clean Coal formula worked because states were part of it from Day One.

It took courage for you in industry and in state agencies to take another chance on the government. And it took courage by many government employees to break from the past and design an effort based on industry's -- not government's -- knowledge of what would work best in the market.

Just as I learned from my father back in Hampton Roads about the personal side of the industry, I fully recognize today that the true strength of the Clean Coal partnership lies with the dedication and devotion of the many individuals behind the dollars and the technology.

It is appropriate that we pay tribute to those individuals....those in this room today, both in government and industry ....and those who are not here who have been such visionaries. I especially want to remember those who played such a key role in forging this program....but who were tragically taken from us before they could see the full results of their labors.

We pledged we would never forget, and so it is appropriate that we remember:

• George Weth -- who was to head the selection panel for Round 4 of the Clean Coal Program but who died in a plane crash in Los Angeles in 1991.

• The nine employees of our Pittsburgh and Morgantown centers: Bill Peters, Bob Evans, Steve Heintz, Tom Arrigoni, Tim Mcilvried, Manville Mayfield, Randy Dellefield, Bill Langan, and Sandy Webb, who were aboard the USAir flight that crashed outside Pittsburgh in 1994.

• Their colleagues from industry who were aboard the same flight: Ed Wiles and Shelly Ziska, who were with the Center for Energy and Economic Development, our co-sponsor for this conference; Todd Johnson from Babcock and Wilcox, Bernie Koch of CONSOL, John Cooper with Allegheny Power, and Daniel Kwasnoski with Bethlehem Steel.

Let us also not forget the loss of my good friend and colleague Ron Brown and the U.S. delegation he was leading in April of last year. Bob Whittaker of Foster Wheeler International, Bob Donovan of ABB, and Claudio Elia of Air and Water Technologies Corporation were part of that delegation because they understood that rebuilding the energy infrastructure of a nation was crucial to restoring a shattered economy.

I believe it is altogether appropriate to remember someone who spent his entire career as an advocate for coal and coal technology -- Jack O'Leary.

When the Department of Energy was first formed -- coalescing from 30 different departments and programs in the Federal government -- Jack was the first deputy secretary. One of the battles he took on early in the game was to preserve federal coal technology research.... specifically the research underway at the government laboratories in Morgantown, West Virginia, and Pittsburgh, Pennsylvania.

There were those at high levels in the department who didn't believe those centers should continue...they didn't have the critical mass. But Jack knew they had the critical expertise.

He knew that to sharpen that expertise, the centers had to be kept open and challenged. He worked with others to turn them from inward-looking researchers to outward-focused technology partners.

Jack went to the mat for the centers. And today many of the technologies in the Clean Coal Program cut their teeth in those laboratories. Equally important, those centers were responsible for the federal stewardship of the program.

Another reason the Clean Coal partnership succeeded was that we preserved and nutured the talents and expertise in the centers. As a result, we have people in government who speak the same language as those in industry.

So it the courage and conviction of individuals -- and their faith in the future -- that we honor today.

Congress' Commitment to Results

There were others acts of courage in those early days of the Clean Coal Program that I also want to acknowledge.

It was the courage of the few in Congress who understood the imperative that government follow through on its commitments.

Congressman Ralph Regula -- here with us today -- was one of the leaders who understood that need. Senator Robert Byrd understood that need. And together, with colleagues from both sides of the aisle, they pushed through full advance funding for the Clean Coal Program.

Mr. Chairman, that was a remarkable act of leadership and vision. But that confidence was well founded.

Perhaps more than any single factor, your action broke with the past and removed the doubts.

Knowing that the government had the dollars up front to back up its word gave industry the confidence to step forward. It sent the signal that government was ready to follow through. This industry and this country owes you and your clean coal colleagues in Congress a great debt of thanks, and I am proud to extend it here today.

Powerful Possibilities

There is a third -- and final -- reason why I am so pleased to join you today. As Thomas Jefferson said, "I like the dreams of the future better than the history of the past."

And that is what I want to leave with you today..."dreams of the future".... visions of the challenges that await us... the grand opportunities and powerful possibilities that lie over the horizon.

I am convinced -- as I prepare to leave what will likely, no certainly, be my final post in government -- that governments and industries throughout the world must find ways to maintain the passion and the courage to invest in the technology of the 21st century.

How do we keep alive the same spirit of innovation that led to your bold investments in clean coal technology?

First, we must continue to think globally. This is from the person who caught heck for daring to think globally and to follow up on it.

Let me tell you something....I'm afraid that in the United States of America, no Secretary of Commerce, no Secretary of Energy, no Secretary of "Gee, I'm so tough I don't give a darn" will ever dare to head a trade mission on behalf of the United States and its industries again.

This is a foolish thing.

We will be left at the gate. A better future does not happen without partnerships between Government and industry and people. You would do well to talk about that.

One of the accomplishments of the last 4 years that I am most proud of are the efforts we made with industry to open doors to new energy technology throughout the world.

However it has to be done -- and I've thought of several models -- maybe industry has to design it and industry has to invite the government to participate-- you need to think about how to get this done.

We are driven by a vision....our view of a secure, affordable energy product that can be instrumental for global peace and prosperity, expanding the middle classes, and yes, seeding democracy in lands where it is now so tenuous.

This is the power of energy.

And to the extent that we can continue to drive toward that imperative, so we empower people, create middle classes, and create economic opportunities for people whose dreams today don't include a thing as simple as a light or a stove that cooks without harming the children and snuffing out life because it makes the air in the simple place they live toxic and unhealthy.

It is a powerful thing that you do for people.

I am proud to have acted on that vision...and I'm proud to have been a part of your vision. And the word that I leave with you today is that your's is good work. This is a strong partnership. Our vision of the 21st century will not happen without coal.

There are some in the room who have been told that you should not work with this government of ours to design the path toward the 21st century. You must be brave enough, you must be charitable enough, to do so. And when you read in the paper that someone has called you a despoiler, trust me it is okay to deal with those people, because we must come together in a vision that treats the world in the reality we find it...that talks about global climate change and cleaning up the air....and does that by decoupling the word "dirty" from "coal."

It is within your grasp. You have the power to do this. You have the power to free so many.

God bless you. I have enjoyed this collaboration. And I look forward to seeing so many of you for the rest of my life.