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Get Rockefeller-rich while you fix the world’s problems. A contradictory, impossible task, right? Don’t the great fortunes flow only to the robber barons gracing Barron’s? Well, after spending two days at the conference and hearing heartfelt talks by people like Arianna Huffington and Reid Hoffman (chairman & CEO of LinkedIn), the nagging, cynical part of me began to soften.
I reasoned: if T. Boone Pickens can sell wind turbines, why can’t fantastic wealth spring from the marriage of corporate social responsibility and clever thinking?
Great change, meaning piles of money, could come with great change, the kind our precious planet needs right now to save itself from too much money chasing after too few good ideas. The X Prize Foundation is all about lots of good ideas chasing after money. The prizes reward people for solving problems that seem unsolvable. You know, those little problems like designing a car that gets hundreds of miles per gallon, or that runs on water or air? Or sending a robot to the moon so it can take pictures, send videos back and return to home base, all without the help of any government space program?
How do you innovate in today’s fragile economy? The way you always did, by throwing fear out the window and letting your guard down. Revolution through good-willed incentivized competition. Open collaboration, even with potential competitors.
While the X Prize conference at the U.N. was somewhat of a self help - motivational – business coaching - break down the personal and corporate barriers - how to do better business kind of event, the purely self help and corporate marketing aspects of the conference’s message were thankfully overshadowed by the astounding amount of good will, brains and economic power in the room.
The third wall between the audience and the speakers at the podium on-stage was broken down. Both the audience and the world business leaders invited to the event talked, not as corporate executives at the United Nations, but as members of a school debate team that was practicing in a gymnasium or cafeteria somewhere. Students passionately practicing, not just to beat the other team and win the prize of being the smartest, most eloquent group of students, but practicing just to learn. Riding high on that school bus of life where the real test is to keep cherishing moments of unbridled creativity, to continue hoping that this feeling of humanity working together for a common goal lasts long after the diplomas are given out, prizes are awarded and graduation hats are thrown in the air.
While at the conference, I had the incredible chance to speak with Steve Isakowitz, the Chief Financial Officer of the US Department of Energy. We spoke sitting in the lounge of the delegates dining room, after the panel discussion Steve took part in called Energy and the Environment. The panel included Glenn Renwick, President & CEO of the Progressive Corporation which is working with the X Prize Foundation on The Progressive Automotive X-Prize contest that will award $10 million dollars to whomever builds the most practical, energy efficient car of the future. Also on the panel was Saul Griffith, President and Chief Scientist of Makani Power, maker of ground breaking high altitude wind turbines, and Jack Hidary, President of Freedom Prize, a foundation that set up a four million dollar prize that seeks the best solutions to ending our reliance on oil.
Interview with Steve Isakowitz, Chief Financial Officer of the U.S. Department of Energy.
Paul: Do you know Alex Wilson of Building Green in Vermont?
Steve: I don’t.
Paul: He has a term called Passive Survivability and he looks at green building in terms of security issues as opposed to the environment. He started Environmental Business News. He's been talking about these issues since the 70's. He's very concerned about how buildings deal with extended disaster situations. He really feels that buildings, all buildings should function in prolonged emergency situations and that should be a common building standard. So my question regarding the DOE, is the DOE looking - the DOE has energy efficiency requirements for appliances - is the administration or the DOE doing anything to work with State and local government to incorporate mandatory green building standards into building codes? Because Alex Wilson is trying to do that in various states that he’s active in. He’s trying to get state legislatures for instance to have minimum building code standards to address these issues that he thinks are a security issue.
Steve: We deal with regulatory issues but sort of indirectly. Not as directly as you are pointing out. I mean, I think that the Environmental Protection Agency is more engaged on matters of that. Congress, in terms of the current Waxman-Markey Bill that's going through the Hill right now, has actually called for more aggressive standards to be put in place and I believe it leaves room for the states to actually develop those standards. And they have in fact set deadlines. And if the states don't begin to implement by a certain date then the Department of Energy in fact would step in to begin to develop those kind of standards.
Paul: Okay I'll have to follow that. I know that in the Bill there is so much going on I will need to look at more of the details and look at where it is in the legislative process.
Steve: Yes, they had a date like 2016 for certain standards to be met but you could probably just quickly look that up.
Paul: This is a question relating a little to your background at NASA. There is a California start up called Solaren that wants to launch an array of solar power collectors in space and PG & E said they would buy the power if it happens. Is the DOE and NASA working on anything relating to that or relating to space?
Steve: Currently we do not have anything formal with NASA but we do have a new activity under way that actually President Obama announced two weeks ago at the National Academy of Sciences. It's called the Advanced Research Project Agency for Energy.
It's actually modeled after the Defense Department’s DARPA (Defense Advanced Research Project Agency) and the intent of that is - it's funding where we are looking to tap in to breakthrough areas that potentially can be commercialized. So we’ve actually had a solicitation out on the street now and it had a really overwhelming response in terms of the number of different ideas that are out there. So this would be an area, whether it is space solar power that is certainly not precluded. And I would anticipate frankly that we would probably get some proposals in that area from people who have some ideas, at least some of their early technologies that they might want to have developed. But the problem in space solar power as you may know is economics. Ultimately what has made that difficult to pursue is the cost of launching materials into space. The cost is pretty high. Something like the space shuttle is completely impractical. So until the private industry develops launch systems that can reduce it's costs by maybe a factor of ten, it would probably be cost prohibitive.
Paul: Right. Maybe the X Prize Space Prize initiative that they were talking about this morning might help with that.
Steve: Yes.
Paul: I just met the DOE folks downstairs with the Solar Decathalon.
Steve: Oh okay.
Paul: And, Is there anything like the DOE Solar Decathalon, that’s new that the DOE is planning, that is coming that we don't know about yet? Something fun.
Steve: Yes we are actually planning some things that are new but unfortunately I'm not the one that should be announcing it. So we have some stuff in the coming months, that I think are going to be rather innovative. Some interesting ideas.
Paul: Anything relating to homes or building, like that? Or in other fields?
Steve: In some of the other areas I think you will find but I don't want to say much more.
Paul: Okay that's fair. Actually, the lady from the DOE that I met downstairs said there might be something that might be added to the Solar Decathalon in this fall that's new but she couldn't tell me either! (Both laughing). I'll keep on her! I just read Omnivore’s Dilemma, finally, and Michael Pollan talks a lot about the need for lots of fossil fuel in fertilizer production and also talks about how industrial meat and processed food consumes and wastes so much energy. Is there anything the DOE is doing with the USDA, that’ sort of collaborating to address energy efficiency in farming or cutting back on needs for fossil fuel based fertilizers? Is there any kind of partnership with that?
Steve: Nothing specifically that I am aware of. The things I know that we are working very closely with the USDA has to do with alternative fuels, particularly ethanol. And trying to encourage industry to develop that substitute to reduce our oil dependency.
Paul: Relating to oil dependency, the, the new average fuel economy standards are going up to 35 something miles per gallon by 2016 and I am curious. You hear a lot about China being so much a problem for carbon emissions and problems for the future but their fuel standards are higher than ours now. And also last week Norway proposed that they ban all new, by 2016 that there will be no new oil burning cars. So I am wondering why are we compared to these other countries, are we moving seemingly so slow?
Steve: Well for one we are a much bigger country and we have a lot more cars into production and the infrastructure to support radically new concepts is going to require a significant level of investment. So for example the Department of Energy we have a electrification transportation solicitation that's out there to try to look for demonstrations, where states and localities are looking to demonstrate alternative ways, such as plug in hybrids that might be easier for them to get around. Because after all if you are low on your charge and you want to go on a long distance trip you need somewhere you can plug in. So we are looking to demonstrate those kinds of capabilities whether it's this demonstration. We have an advanced battery manufacturing effort to try to improve the domestic capabilities in this nation with regards to battery manufacturing. We have an automobile loan program where we are looking to get new innovations into the market of new energy efficient cars. We have R & D programs. We have the X Prize - The Automotive X Prize we are trying to demonstrate a car that gets 100 miles per gallon.
Paul: Yes that's amazing.
Steve: So we are working cooperatively with the X Prize on that. So there's a lot of things like that I think that we are beginning to get into the market. I think the President’s goals on CAFE (Corporate average fuel efficiency) are rather aggressive. I think certainly as we get a number of years down the road we can see where we are on that and whether or not we should have more aggressive goals.
Paul: Right, the big concern obviously is that, in the transition, you have to keep the existing economic model functioning so it’s not disruptive.
Steve: Right and it's a time of great turmoil. With the economy. Two of the three auto manufacturers declare bankruptcy. So we have got to sort of bring it in at the appropriate time while trying to pursue innovation all along the way.
Paul: Of course right. With respect to the cars - I know the DOE cut some funding for fuel cell research. Do you see Hydrogen cars not really part of the equation? Is that something the DOE feels? To focus more on hybrids and EV's. (Electric Vehicles)
Steve: Hydrogen could play a role in the much longer term. The problem that we are running into with Hydrogen is, which we have spent money on, is sort of back to my earlier point - there is a tremendous amount of challenges. Storing hydrogen, transporting hydrogen and just making it more practical in the infrastructure that we have currently in place. These are not trivial items to be overcome. I think we still need additional investments in Hydrogen. In fact we still are spending I think nearly a hundred million in Hydrogen and fuel cell related activities. We are looking at hydrogen fuel cells with regards to industrial applications perhaps like forklifts because there’s a real desire to get away from combustion engine with regard to these forklifts that work inside of facilities. There's also a discussion of using maybe hydrogen fuel cells for larger scale applications, for stationary applications. So I think there is an opportunity for us to step up to a Hydrogen economy perhaps long term.
Paul: Right, that makes sense. I know you have to go so I have one quick question. For the average homeowner, consumer New Yorker - what do they need - what is the most important thing they can do to help us get through this transition and become more energy conscious and renewable? Any advice or words?
Steve: Well it's an incredibly exciting time in the area of energy. I think as a nation we can get people more aware of the opportunities. Whether it’s the national security implications of importing oil. Whether it's the economy that is going to get growing again. It's gonna need – to continue to tap into additional supplies of energy. And whether it’s just to be more environmentally conscious on issues like global warming. I think we’re finding a whole new generation of Americans that are more aware of it, what like to call the Gen E - as opposed to Gen X or Gen Y. Americans that are interested in doing that. And I think that there are things that we can do in our everyday lives that can make a difference. That can reduce our carbon footprint. One of the investments we are trying to make in the Department of Energy is the so called smart grid. For us to better move around the electrons into our electrical grid and to provide those black boxes at the homes so people are more aware of what their usage will be
Paul: Energy management
Steve:Yes. I think that this is a longer term but I think we are going to see it in the not to distant future in many of the homes. So I think that is going to be a great opportunity. Until then for those people who are interested in innovating and trying things it's a great way for us to learn before we start to plan things in a large scale and start setting standards.
Paul: Thank you. I really appreciate it.
Click here to see a video of the X Prize Foundation i21 Conference.
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