October 18th, 2013


Former U.S. Secretary of State

Former Director, Central Intelligence

Forty years after the 1973 OPEC oil embargo disrupted American life, two statesmen who lived through the crisis looked at petro-politics in the age of climate change.
George Shultz was Secretary of Labor under the Nixon Administration when he was assigned to a task force assessing the country’s oil dependency. Even then, in 1969, Shultz said they had determined the U.S. needed to use less oil from the Middle East. But the plan was never carried out.
“I learned a lesson: It’s very hard to get anything to happen just on the basis of your analysis of something, even when it seems perfectly obvious,” Shultz said.
The task force helped Shultz to understand environmental issues, which would come in useful when he later headed the Environmental Protection Agency as Director of the Office of Management and Budget.
“You would much rather breathe the air in any American city than breathe it in Beijing – thank you, EPA,” Shultz said.
During the oil shock, Shultz was Secretary of Treasury under the Nixon administration and the de facto Secretary of Energy, he said.
“When the crisis passed, everything stopped,” said Shultz, who was later appointed Secretary of State under the Reagan administration. “It’s hard to keep the momentum going without a crisis.”
He described the Montreal Protocol, an international agreement designed to protect the ozone layer, as the only environmental treaty that’s really worked.
“Focus on things you can do, rather than objectives you can obtain, and you’re likely to get further,” he said.
Woolsey agreed: “Crises are not enough. Whether they’re potential crises or existing crises, people will ignore them after a little bit of time.”
As former director of the CIA, Woolsey reflected on energy issues from a national defense perspective. In order to get things accomplished, it’s effective to start with the famous line, “follow the money,” he said.
“You are not going to make a major change, such as getting the United States out of the business of producing electricity by burning oil, unless there’s something that is technologically and financially better,” Woolsey said.
And if we try to operate without following the money, we will lose, he said.
Oil production is booming in the U.S. today, but the change that would make the most difference in terms of energy would be creating different fuel choices, like Brazil and Israel, Woolsey said.
“Let’s have a level playing field, so all forms of energy compete on an equal basis,” Shultz agreed, recommending a revenue-neutral carbon tax to create fair competition.
Following a montage of U.S. presidents since Nixon speaking about energy issues, Woolsey discussed the fracking boom and the potential for methanol to change the energy game.
The speakers then discussed the environmental impacts of burning fossil fuels.
“If you don’t like the science, use your eyes – a new ocean has been created in the Arctic,” Shultz said. “That hasn’t happened since the last Ice Age. Something’s going on.”
When Shultz was asked what it would take for the Republican party to get on board with his ideas, he responded, “let me point out to you that it was a Republican president that created the EPA; it was a Republican president that did the Montreal Protocol; it was a Republican president that did the cap-and-trade system that dealt with acid rain.”
“We’re the party that has done something,” Shultz said. “They were never done on a partisan basis…a fundamental thing wrong with our country these days is that everything has to be done on a basis where you blame the other guy for something-or-other and I’m sick of it, frankly.”
Shultz said that in terms of energy security, we are very vulnerable in this country because our grid is so vulnerable.
“We have not done anything useful to protect it…really, ever,” Woolsey said after reflecting on a recent attack to the grid in San Jose.
“For the 3,500 America utilities, they spend less each year on research and development than the American dog food industry,” Woolsey heard from the deputy director of ARPA-E.
The speakers discussed how climate change is presenting new challenges, such as unstable sources of freshwater in South America.
“Mexico, if they are successful in the kind of energy reform they’re talking about, is going to wind up having a very strong economy,” Shultz said. “We are worrying about the wrong border…the border we should be worrying about is Mexico’s southern border.”
Shultz and Woolsey discussed up-and-coming alternative energies and addressed audience questions about how to communicate to Congress and move away from oil.
“The way to get something done is to reach out to people and include people,” Shultz said.
- Danielle Torrent
Photos by Astra Brinkmann
The Commonwealth Club of California
October 18, 2013