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Amid Oil Leak, Business Leaders Urge Energy Sector Investment, Research

June 10, 2010 at 12:00 AM EDT
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President Obama met Thursday with families of workers killed in the Gulf rig explosion, but he also met with business leaders to discuss energy issues facing the U.S. Judy Woodruff speaks with two of those executives, venture capitalist John Doerr and Chad Holliday, chairman of the board of directors of Bank of America.

JUDY WOODRUFF: Well, joining us now are two business executives who met with the president this afternoon, John Doerr, a venture capitalist known for his investments in Silicon Valley and companies like Google, Amazon and Sun Microsystems. He’s a partner with the firm of Kleiner Perkins Caufield & Byers. And Chad Holliday, former chair and CEO of DuPont, he is now chairman of the board of directors of Bank of America.

And, for the record, the bank is an underwriter of the “NewsHour.”

Both guests are members of the American Energy Innovation Council.

And we thank you both for being with us.

CHAD HOLLIDAY, former Chair & CEO, DuPont: Thank you.

JUDY WOODRUFF: Chad Holliday, I’m going to start with you.

Just tell us the main things that you talked to the president about what you think are needed and why.

CHAD HOLLIDAY: This council of seven business leaders have worked for the last six months, to put together what we think is a commonsense plan to give our nation energy leadership.

And it’s built around more R&D. Our businesses, John’s businesses…

JUDY WOODRUFF: Research and development.

CHAD HOLLIDAY: Research and development just is — is — John and I have talked and all of our members have. We’re used to using innovation in our research and development to make a difference in our businesses.

We are investing in a very, very low rate, almost nothing, in the energy industry, compared to what we see in other industries, as our report describes, and we’re simply saying, we need to increase that significantly, from about $5 billion today to about $16 billion per year, and then use it very smartly. And that’s what we described for the president.

JUDY WOODRUFF: And, John Doerr, why is this a responsibility of the government, and not the private sector?

JOHN DOERR, venture capitalist: Well, government historically has funded the basic research that have made the country, America, a leader, a worldwide leader, in, for example, the biotechnology industry or the Internet industry.

The government today funds $30 billion a year of health care research through the National Institutes of Health. By contrast, we’re only funding $5 billion a year in energy research. And — and we’re, sadly, buying more potato chips per year, as a country, than we are investing in our energy future.

JUDY WOODRUFF: How does — Chad Holliday, how does this oil spill in the Gulf change the argument you’re making to the president?

CHAD HOLLIDAY: Of course, we started this work well before we knew anything about an oil spill.

I think it just shows the vulnerability and the cost of our current energy system. So, we talk about this need for R&D, but no one ever had priced in the price of oil, the current costs that we’re having to pay that your — your previous clip showed.

So, I think that makes people much more aware. I think people are more aware of exactly what it means to drill in those deep waters, and so we can look at some of the alternatives we’re proposing and, I think, in a different light.

JUDY WOODRUFF: John Doerr, what did the president say in response to that?

JOHN DOERR: Well, we had very productive meetings with the president and his team, as we have with leaders of Congress. And — and our recommendations were met with enthusiasm.

He — he made it very clear that this is a — the top priority in his administration, that is, transitioning America to a clean-energy economy, generating jobs, and — and — and to stop sending a billion dollars a day overseas to buy oil from countries that sometimes have got a bullseye painted on America’s back.

So, this is very much on his — his mind, and he — he doesn’t want an energy system that is as frail and unreliable as we are experiencing today with the Deepwater Horizon disaster.

JUDY WOODRUFF: So, Chad Holliday, did the president commit to the $16 billion that you’re asking for? Because this is a time when there are a lot of competing claims…

CHAD HOLLIDAY: I’m not the best one to answer that question.

CHAD HOLLIDAY: But what I would say, it was a very constructive discussion, just as John said. He probed us very heavily into each one of our recommendations. He was going to read our report.

And we came away very pleased. He’s got to weight that with his other priorities, but he seemed genuinely interested. And as he described his direction for us, and then we gave our recommendations, even he recognized there was a very good alignment.

JUDY WOODRUFF: And yet, again, this is — and this — one hears this from other sectors — we are in a time of recession. The country has lost, what is it, eight million jobs. The deficit is on a lot of people’s minds. Given all that, were you still able to make the same argument?

CHAD HOLLIDAY: Well, it’s a more difficult time, for sure. But we must make choices. We must be able to reprioritize where necessary. And so it’s a very difficult time for the economy. It’s a difficult time for people.

But we think, if we don’t start now with research and development in this area, it’s just delaying the future needs that we have to have. And, so, from my view as a citizen, this would be a good investment, and we ought to make that choice.

JUDY WOODRUFF: How do you answer that question, John Doerr, about competing claims, the fact that we here in a recession, jobs, deficit, and the rest of it?

JOHN DOERR: Well, today, we are in a worldwide race for the next great global industry. And I believe, and my partners believe, the president and members of Congress believe that is the new clean-energy technologies.

You know, Judy, if you look at the top 30 companies around the world in new clean energy — that’s the top 10 in wind, the top 10 in solar, and the top 10 in advanced batteries, the sort that would power our electric vehicles — only four of those 30 are American companies.

If I compare that to the Internet, it’s — it’s as if, gosh, Microsoft and Apple and Google and Intel and Yahoo! were all companies headquartered in Europe or Asia, and only Amazon was a company here in the United States.

So, we have got to make choices, make decisions now about whether we want to be making our own energy future with American jobs, or if we want to be buying that future from China and other countries around the world.

JUDY WOODRUFF: Chad Holliday, I know some of the — the funding options that your recommendations include, fees on offshore oil and gas production, fees on imported oil, increasing the gas tax, these are all things one presumes would be vigorously opposed by the oil and gas industry and anybody who’s counting on that industry for jobs or income.

CHAD HOLLIDAY: So, I think we could look at fees like described in the report. We didn’t recommend a particular fee. We could also do the reallocation of other resources.

But I think these are investments for the future. They will ultimately mean lower energy costs. There will be more jobs for us. And so I see this very different, as an investment, and not a cost. And so I think people should look at it that way.

JUDY WOODRUFF: John Doerr, as I understand it, you — your council, your group, has not taken a position on energy policy options, at least some of them that are being debated right now, and in particular putting a price on carbon emissions, carbon pollution.

How can you influence this debate if you don’t take a position on that?

JOHN DOERR: Well, our council has said that it — it makes sense to us to pay for this increased R&D by some form of price on carbon pollution from the energy system.

Now, we also say that’s — that’s not the only way that we could do it. It could come from general funds. But the thinking of our group is, not only must we fund the R&D, but we have got find a way to get private capital to make this transition.

You know, Judy, more money funds — flows through the private capital markets in a day than through all the world’s governments in a year. So, there’s no question that this job, this transition, this move of America and the world to a clean energy future is not going to be done by our governments. It’s going to be done by our entrepreneurs, by our investors, and — and by our business leaders.

And — and I think that’s why our recommendations today were met with real interest and enthusiasm.

JUDY WOODRUFF: If the arguments are so compelling, Chad Holliday, why is it so difficult to get energy legislation passed in Washington, which a lot of people say isn’t needed?

CHAD HOLLIDAY: Well, we met with over 30 members of Congress today, and we got a very good reception there. And, so, people are working very hard on this now.

And — and, speaking for John, I think, and myself, we came away very optimistic today that this could be a very productive summer.

JUDY WOODRUFF: John Doerr, what would you add to that? What — because the — the informed guessing, I guess you would say, is that we’re not going to see energy legislation passed this year.

JOHN DOERR: Well, I — I disagree with the informed guessers.

I’m — I’m quite optimistic that, when presented with an opportunity to create a lot of new jobs, and have America be competitive, in a way that stops borrowing money from China to buy oil from the Middle East, and then burn it throughout our country in ways that are damaging to the — the environment, that Americans are going to choose and our leaders will choose to try to find a way to do that.

And — and we believe, I believe that one thing is very, very clear. We have got to get going on this innovation, on this research and development and deployment, and — and — and that we will.

JUDY WOODRUFF: We will leave it there.

John Doerr, Chad Holliday, gentlemen, thank you both.