2010 deloitte energy conference changing the great game...

2010 Deloitte Energy Conference Changing the Great Game: Climate, Customers and Capital

Deloitte Center for Energy Solutions

Conference Report June 7-8, 2010, Washington, D.C.

ContentsContents

2 Our Featured Guest Speakers and Panelists

3 Conference Overview

6 Changing the Game

7 Global Energy Perspectives

8 U.S. Energy Landscape

9 Energy Technology

10 Climate Change Legislation

12 The Future of Natural Gas

13 Transportation of the Future

14 Summary of Breakout Sessions

Mark Your Calendars:2011 Deloitte Energy ConferenceMay 19–20, 2011, Washington, D.C.

If you have questions or need additional copies, please contact [email protected].

12010 Deloitte Energy Conference – Changing the Great Game: Climate, Customers and Capital

Dear Energy Industry Colleague,

Thank you to those who attended the Deloitte Energy Conference held in Washington, D.C., on June 7-8, 2010. This year’s speakers addressed the theme “Changing the Great Game: Climate, Customers and Capital.” The dialogue was brisk as speakers explored the intrinsic relationships among economic growth, energy security and clean development. Throughout the day, speakers presented strategies for making energy more accessible, effi cient, clean and secure and shared their opinions about the policy decisions that could either speed or hinder execution of these strategies. The discussions spanned markets, legislation, public opinion — and, particularly, technology — as speakers emphasized that while we have the technologies to get started on the clean development path, much more investment will be needed if we are to keep pace with the world’s growing population and its accompanying demand for clean energy. The audience, too, played an active role, contributing insights and posing challenging questions. Throughout the Conference, discussions were vigorous and thought-provoking. They covered a wide range of topics in a short amount of time, making it very challenging to take notes. For that reason, we are pleased to provide you with this report of our speakers’ views and presentations.

Speakers at this year’s Conference provided an international cross-section of the world’s energy industry. One of the themes presented is that when dealing with climate change, we are dealing with energy security. Conference attendees heard from the Chairman of the Intergovernmental Panel on Climate Change, who outlined measures needed for the world to move toward a low-carbon development pathway. Attendees also heard from a Commissioner on the Federal Energy Regulatory Commission and the CEO of one of the nation’s largest electric companies, who concurred that a three-pronged approach — encompassing markets, infrastructure, and rule of law — is critical if the U.S is to achieve economic growth and energy security. Representatives from large, global power companies as well as from technology upstarts followed suit, sharing their companies’ achievements in developing clean technologies while underscoring the necessity for policies that help overcome the challenges of deployment.

Notably, the subject of U.S. energy policy and the challenges of making long-term investment decisions without a cohesive national energy framework surfaced in nearly every discussion. Several speakers touched upon the importance of putting a price on carbon, while others, including representatives from the National Petrochemical & Refi ners Association and the U.S. Chamber of Commerce, expressed concern that the current climate change bills before Congress could create inequities that would be economically damaging for certain industry sectors.

The fi nal two sessions of the day focused on the future of natural gas and transportation of the future. These sessions gave attendees insight into the transformative changes that are brewing within markets and entire industries as enterprising businesses make their moves in the “great game” by addressing climate change, satisfying customers and attracting capital.

We hope you will fi nd this report from the 2010 Deloitte Energy Conference a convenient and useful reference. Please feel free to pass it along to your colleagues. Additional copies are, of course, available upon request. We look forward to seeing you in Washington, D.C., for the next Deloitte Energy Conference on May 19-20, 2011. As always, we welcome your suggestions for themes, topics and speakers.

Gregory E. Aliff Vice Chairman — U.S. Energy & Resources LeaderDeloitte LLP

2010 Deloitte Energy Conference

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Eric Ackerman, Director, Alternative Regulation, Edison Electric Institute

Jimmy Addison, Senior Vice President and CFO, SCANA

Paul Afonso, Partner, Brown Rudnick LLP

Pauline Ahern, Principal, AUS Consultants

Lee Burrows, Partner, VantagePoint Venture Partners

James L. Connaughton, Executive Vice President, Corporate Affairs, Public & Environmental Policy, Constellation Energy

Maureen Coveney, Director, Information Technology & Business Intelligence, San Onofre Nuclear Generating Station Portfolio, Southern California Edison

The Honorable Robert E. Curry, Jr., Commissioner, Public Service Commission of the State of New York

Joel Eisenberg, Program Manager, Low-income Weatherization and State Energy Program Research, Oak Ridge National Lab

Darren Gale, Vice President, Babcock & Wilcox Nuclear Energy, Inc.

Fiji George, Director, Climate Strategies, El Paso Corporation

John W. Gibson, Jr., Director, Parker Drilling, Valerus Compression, and Orocobre, Ltd.

Karen A. Harbert, President and CEO, U.S. Chamber of Commerce’s Institute for 21st Century Energy

Richard Herzog, Partner, Harkins Cunningham LLP

Patricia House, Co-Founder, Vice Chairman and Senior Vice President of Strategy, C3

Mary Ludford, Vice President, Smart Grid/Smart Meter, PECO Energy

Brant Meleski, Managing Director, Bank of America Merrill Lynch

Philip Mezey, Senior Vice President and COO, Itron North America

Scott Molony, Senior Accountant, Federal Energy Regulatory Commission

Dr. Rajendra K. Pachauri, Director General of The Energy and Resources Institute and Chairman of Intergovernmental Panel on Climate Change

Mark J. Penn, Worldwide President & CEO, Burson Marsteller; President, Penn Schoen Berland

David Rager, General Manager, Greater Cincinnati Water Works

David E. Rodgers, Director of Strategic Planning and Analysis, Offi ce of Energy Effi ciency and Renewable Energy, U.S. Department of Energy

John W. Rowe, Chairman and CEO, Exelon Corporation

Dr. Benjamin Schlesinger, President, Benjamin Schlesinger and Associates, LLC

Gregory Scott, Executive Vice President and General Counsel, National Petrochemical & Refi ners Association

Suvi Sharma, President, Solaria Corporation

John Shelk, President and CEO, Electric Power Supply Association

Andrew K. Soto, Senior Managing Counsel, Regulatory Affairs, American Gas Association

The Honorable Marc Spitzer, Commissioner, Federal Energy Regulatory Commission

Dr. Joseph A. Stanislaw, Independent Senior Advisor, Energy & Sustainability, Deloitte LLP

Luke Stuart, Principle Managing Director and Founder, The Global Carbon Bank

Susan Swan, Vice President, Smart Grid Development, Consumers Energy

Thomas Theisen, Head of Research & Development, RWE AG

Susan Tomasky, President, AEP Transmission, American Electric Power Company, Inc.

Michael D. Ware, Managing Director, Good Energies, Inc.

Jason Wolf, Vice President, North America, Better Place

Barry K. Worthington, Executive Director, United States Energy Association

Bryan P. Wright, Vice President, CAO, and Controller, Constellation Energy Group, Inc.

Cliff Zwahlen, Exploitation Manager, Southern Division, Devon Energy

Our Featured Guest Speakers and Panelists


The 2010 Deloitte Energy Conference, Changing the Great Game: Climate, Customers and Capital, examined the opportunities that are emerging in the race toward clean energy development and the various business strategies that energy companies are employing to get ahead in this “great game.” The discussions spanned the close relationship between climate change and energy security, global energy perspectives, the complexity of the U.S. energy landscape, climate change legislation and its implications on long-term investment decisions, emerging energy technologies, the globalization of natural gas markets, and the feasibility of electrifying the transportation sector. The discussion underscored the need for “clean” energy technologies, as opposed to solely “green” ones. It also emphasized the importance of creating an inviting investment climate for developing these technologies, particularly in the U.S., as well as thoughtful policies that can help overcome the challenges of deployment. The remainder of this report explores who is currently winning the great game, why it is inextricably linked to job creation, and how companies — and entire countries — can step into the winners circle by addressing climate change, satisfying customers and attracting capital.

Major ThemesChanging the Great GameThe clean development race is on, and the size of the prize in this “great game” is staggering: jobs, energy security, environmental sustainability, and national stability in the midst of fi erce competition for resources — elements that some could interpret as survival itself. While climate change has gripped the world’s attention in recent years, speakers emphasized that the “great game” involves a whole lot more. It’s about the race to clean development, which encompasses climate change, energy security, clean water, poverty reduction, economic growth and other aspects of a sustainable future. Speakers also asserted that winning the great game will require participants to direct their capital beyond “green” energy, to include “clean” energy, meaning the need for nuclear and fossil fuels in environmentally sensitive ways. Once thought to be a certain means of curtailing economic growth, addressing the dual challenges of climate change and energy security has emerged as an elixir for economic vitality. To this end, Dr. Joseph A. Stanislaw, Independent Senior Advisor, Energy & Sustainability, Deloitte LLP, suggested that the title of the conference can now be thought of as an equation: climate + customers + capital = energy and jobs.

Global Energy PerspectivesWhen dealing with climate change, we are dealing with energy security. This sentiment pervaded the discussion on global energy perspectives, which featured fi ndings of the Fourth Assessment Report from the Intergovernmental Panel on Climate Change (IPCC). Dr. Rajendra Pachauri, Chairman of the IPCC, emphasized that while climate change poses enormous economic challenges, it also creates enormous economic opportunities. In discussing the various stabilization scenarios outlined in the report, Dr. Pachauri stressed that all of them can be achieved by deployment of a portfolio of technologies that are currently available or expected to be commercialized in coming decades — assuming that investment fl ows, technology transfer, and incentives are in place for technology development. He also stressed that the move towards a low-carbon development pathway will require a large shift in investment patterns, as well as: an adequate set of conditions such as an effective carbon price signal; regulations, standards, taxes and charges; and changes in lifestyle. With world population poised to top nine billion by 2050, Dr. Pachauri and others concurred that the world simply cannot sustain so many people at its current levels of consumption.1 Effi ciency and clean development, therefore, are no longer just options for achieving socioeconomic stability; they are prerequisites for it.

1 United Nations Population Division

Conference Overview

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U.S. Energy LandscapeWith a crisscrossing patchwork of state, regional and federal regulations of greenhouse gas emissions (GHG) and pollutants of all sorts, speakers expressed concern about the growing complexity of the U.S. energy landscape. Furthermore, the oil spill in the Gulf of Mexico has strained the compact of trust between citizens and their energy suppliers, raising questions about whether a political overreaction could hamper future investment. Is there a way to sort it all out? Speakers underscored their stalwart belief in a balanced approach to formulating energy policy in the U.S. Described as a “three-legged stool,” this approach hinges upon effective markets, sound infrastructure, and a consistent rule of law. Accordingly, speakers called for greater investment in renewables, nuclear, and clean coal (i.e., infrastructure); a rule of law that refl ects the real costs in the marketplace; and orderly markets with clear price signals to keep industry participants hunting for the most cost-effective solutions.

Energy TechnologyOnce the favorite in the clean technology race, the U.S. has recently ceded its leadership position to China, according to some pundits. This has led some to question whether or not the U.S. is awake when it comes to investing in the technologies needed to promote energy security and create jobs. As one speaker explained, the crux of the matter is not a lack of technological progress but instead an abundance of technological choices, with no clear direction at the national level on how to evaluate them. Speakers further outlined a number of new advances, such as modular nuclear reactors, smart meters, and intelligent charging poles for electric vehicles. Even though cutting-edge technologies such as these exist, the industry faces a number of deployment challenges related to the complexity and uncertainty of the U.S. energy regulatory landscape. Speakers stressed that utilities in particular must balance the near-term needs of stakeholders with the support of regulators and the vision of the utilities’ engineers. Without a federal framework that helps set national energy priorities, it is diffi cult for companies to determine where to focus their capital as well as their ingenuity.

Climate Change LegislationInitially eclipsed by the protracted health care debate and recently overshadowed by the Gulf oil spill, U.S. Congressional momentum toward passage of climate change legislation appears to have stalled. While some welcome this delay, the majority of speakers at the Conference see it as a setback for an industry that desperately needs a federal framework to help guide long-term investment decisions. Notably, speakers pointed out that poll after poll indicates that energy is a top concern for Americans but climate change often comes in near the bottom. As one speaker declared, “What people really want are jobs.” To this end, speakers suggested that any climate change legislation should foster development of clean energy technology but “avoid picking winners and losers.” They further explained that striking this balance will require effi cient markets that incorporate a realistic price for carbon. It will also entail creating a welcoming investment environment so the U.S can compete with other nations for capital.


The Future of Natural GasUnlike its coal and oil brethren, there is a common belief that natural gas has historically been underrated and underpriced. But has the time fi nally come for natural gas to have its day? Many believe that the answer is yes. Speakers explained that several factors have converged to make the future of natural gas brighter than ever, despite the current dearth of demand. Natural gas emits about half the CO2 as coal. It is also easy to turn gas-fi red generators on and off as a counterbalance to intermittent, renewable energy supplies. These factors, coupled with the abundance of North American shale gas, make natural gas an increasingly attractive supply choice for electricity generation. Meanwhile, a more robust liquefi ed natural gas (LNG) infrastructure is connecting natural gas markets around the world, providing opportunities for arbitrage and putting pressure on contract structures that have traditionally favored powerful oligarchic suppliers. Speakers suggested that these changes, along with weak demand, could destabilize gas markets and depress prices over the short term. However, those with a long-range view see natural gas emerging to take its place alongside renewables, clean coal and nuclear in transitioning to the clean energy economy.

Transportation of the FutureHow do you know when an industry is on the cusp of a transformation? As one speaker explained, three conditions must be in place: 1) a transformational technology that can be deployed in a cost-effective way to break down barriers; 2) a sizeable market; and 3) considerable demand pull. Some believe that electric vehicles, equipped with breakthrough battery technologies, now meet all of these criteria, bringing the auto industry to the brink of an outright revolution. But are consumers really ready to put the pedal to the metal when it comes to charging up their rides? A growing number of companies, ranging from upstarts to major automakers, believe so — the most forward-thinking of which are refusing to wait for consumers in the most lucrative auto market in the world, the U.S., to get used to the idea. Major pilot projects are now being rolled out in Denmark, Japan and Israel, among others. Speakers noted that the key to success in electrifying the transportation sector is educating people about the signifi cant economic benefi ts the transition can offer.

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Changing the Great Game

The “great game” has not only started but it is also already changing. Once associated primarily with developing “green energy,” the great game has expanded to encompass many things related to sustainability, including energy security, economic growth, fair markets, poverty reduction, and clean water — as well as carbon constraint. Furthermore, it is built on the pursuit of cost-effective energy that is “clean,” and not just limited to renewables. This includes nuclear, natural gas and coal when used in environmentally sensitive ways.

As Dr. Joseph A. Stanislaw, Independent Senior Advisor, Energy & Sustainability, Deloitte LLP explained: “Rather than being in a green energy race, we are in a global clean technology race to develop clean energy in a way that serves the economy, workers, the environment, and national security.”

The challenges of addressing climate change, and the risks of not doing so, have been well publicized. Lesser attention has been paid, however, to the world’s ballooning global population. As Stanislaw and others emphasized, resource competition is already relentless, so what is going to happen when the population tops nine billion as it is poised to do by the year 2050? An awareness is dawning in both developed and emerging nations that the world simply will not be able to sustain so many people at its current rates of consumption.

Of course, any time there is a challenge of this magnitude, there is a corresponding opportunity: The winner in the “great game” stands to reap economic growth, energy security and national stability. This fact has not been lost on China, which is now the leader in the clean development race. Stanislaw noted that much of China’s success can be attributed to its ability to commercialize technologies that were developed in the U.S. in the 1970s and 1980s; its commitment to creating an inviting investment climate; and its clear national goal of achieving manufacturing dominance of renewable energy components and of reaping the resulting economic and employment rewards.

Dr. Stanislaw noted that the clean development race is technologically not unlike the race to the moon between the U.S. and the Soviet Union in the 1960s, except for the outcome so far: The U.S., once a favorite, is now in the middle of the pack. He further asserted that in order for the U.S. to reclaim its leadership position, it will need to ramp up R&D investment, which is currently on the decline. America will also need to articulate a clear national energy framework that guides companies in their decision-making regarding the ‘three Cs’ of sustainability: climate (national security and energy security), customers, and capital. How companies and governments balance these components will determine whether they are able to claim the great game’s highly coveted prize: clean energy and economic growth.

“Th e Great Game is on, and it’s about a new economic development path. Th e race on the path to clean development has already begun.”

– Dr. Joseph A. Stanislaw, Independent Senior Advisor, Energy & Sustainability, Deloitte LLP


Global Energy Perspectives

The Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) featured a simple statement: Warming of the climate system is unequivocal. The report further observes that global average sea levels are rising, having already increased by 17cm in the 20th century; the frequency of heavy precipitation events is increasing; and the incidents of heat waves and droughts have become more numerous. At the same time, the world’s population is growing rapidly, particularly in developing countries. The United Nations projects that by 2050 there will be approximately nine billion people on the planet — a three-fold increase from just 50 years ago.

In highlighting these trends, Dr. Pachauri emphasized that the “great game” is not a future contest with some far off prize; we’re already in the middle of it and the future viability of entire nations could be at stake. Furthermore, attaining security and sustainability in an overcrowded world will require the whole global community to rethink how it produces and uses energy, from here on out.

The Fourth Assessment Report outlines several stabilization scenarios for reducing CO2 emissions. While the feasibility of any climate change strategy will depend largely on future technology development, Dr. Pachauri stressed that we cannot use lack of technology as an excuse for inaction. He asserted that all of the stabilization levels outlined in the report can be achieved by deployment of a portfolio of technologies that are either currently

available or expected to be commercialized in the coming decades. Today, what the world needs is a set of policies and pricing systems that create the conditions that allow societies to move toward the most effi cient use of energy. This also assumes that investment fl ows, technology transfer and incentives are in place for ongoing technology development. Dr. Pachauri and others concurred that while the technologies exist to get started on the path to clean development today, existing technologies will be insuffi cient for driving the large-scale reductions in GHG emissions that will be required over the long term.

Dr. Pachauri noted, as did several other speakers, that effi ciency will give us the largest gains. As detailed in the Fourth Assessment Report, initial estimates from the International Energy Agency and the World Bank suggest that returning global energy-related CO2 emissions to 2005 levels by 2030 would require a large shift in investment patterns. However, the net additional investment required would range from negligible to 5-10 percent, due to improved end-use effi ciency.

Dr. Pachauri further stressed that we are on the verge of a totally different energy production and consumption pattern for the future that will address both energy security and climate change. This pattern will be based on new standards for energy effi ciency, development of clean energy sources, and also changes in lifestyle such as greater use of public transport, more prevalent use of high-effi ciency lighting, and shifts in dietary standards.

Many nations around the world have already recognized the inevitability of this pattern, having launched clean-growth strategies. The success that countries such as Brazil, China and Korea are having along this path suggests that clean development not only has the capacity to generate carbon-free megawatts but also jobs — which some perceive to be the most powerful output of all.

“We cannot put forward the excuse of saying, ‘We don’t have the technologies to get started.’ We do have them.”

– Dr. Rajendra K. Pachauri, Director General of The Energy and Resources Institute and Chairman of Intergovernmental Panel on Climate Change

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“Smart Grid can’t be pushed on people, as in ‘eat your spinach.’ The challenge will be for the private sector to communicate the benefi ts and the potential it has for lowering their costs. “

– The Honorable Marc Spitzer, Commissioner, Federal Energy Regulatory Commission

“Whether it is cap and trade, a carbon tax, or EPA regulation, we need an explicit or implicit price on carbon to keep us hunting for the low-cost solutions to climate change.”

– John W. Rowe, Chairman and CEO, Exelon Corporation

Over two dozen states have passed renewable portfolio standards. Congress has provided tax credits for wind, solar and other renewable options. New nuclear plants, along with other clean energy options, have access to federal loan guarantees, and the DoE is investing billions of dollars in clean coal projects. John Rowe, CEO of Exelon, cited these facts to illustrate an important point: Despite the current lack of federal climate change legislation, governments, regulators and industry leaders are taking action to address it. The situation becomes even more complicated — and expensive — when one considers that the Environmental Protection Agency (EPA) has the authority to regulate seven pollutants from carbon-intensive electric generating sources, in addition to CO2.

Throughout the Conference, participants expressed concern about the growing complexity of the U.S. energy landscape as it is becoming increasingly diffi cult for companies to plan a course of action through an expanding mélange of state, regional and federal regulations. Accordingly, Rowe and others called for federal carbon legislation that would supersede local and state responses and provide the stable framework necessary to keep the industry hunting for low-cost solutions. Rowe further argued that any federal response to climate change must be integrated with other air pollution concerns that are regulated under existing law if we are to succeed at simplifying the U.S. energy landscape and containing costs for the consumer.

The economics of addressing climate change and achieving energy security pervaded the discussion on all fronts. On the generation side, speakers asserted that we cannot economically solve our problems by simply decreeing politically popular options, such as clean coal, nuclear, wind or solar, as the fuel sources of choice, because they are all expensive. Similarly, on the transmission and distribution side, speakers cautioned that prodding the public through policy to adopt cutting-edge technologies, such as smart grid, could create a backlash if consumers do not fully understand the benefi ts.

To guide policymaking amid this complex environment, The Honorable Marc Spitzer, Commissioner, Federal Energy Regulatory Commission (FERC), espoused a “three-legged stool” approach, which Rowe and others endorsed. Spitzer believes that the three legs of this stool — effective markets, sound infrastructure, and a consistent rule of law — are key to enabling the FERC and the private sector to collectively fulfi ll their mission of providing reliable, economic energy to the citizens of the United States.

Commissioner Spitzer further highlighted the positions and actions the FERC has taken to strengthen the three legs of this stool. Regarding markets, Commissioner Spitzer stressed that the FERC’s commitment to wholesale energy markets and Regional Transmission Organizations (RTOs) remains strong and it is bi-partisan. On the infrastructure side, he noted a growing need for transmission build due to the increasing emphasis on renewables, which are often located a far distance from major load centers. He additionally maintained that the authority by Congress to grant enhanced Return on Equity (ROE) for electric transmission has been a positive development, and that relatively speaking, these investments have still been a bargain. Regarding the third leg, rule of law, Commissioner Spitzer discussed the activities of the FERC compliance division, noting that the “absence of teeth” has been remedied.

In applying the three-legged stool concept to the challenges of climate change and energy security, speakers called for greater investment in renewables, nuclear, and clean coal (i.e., infrastructure); a rule of law that incorporates the real costs into the marketplace; and orderly markets with clear price signals to keep industry participants searching for the most cost-effective solutions. As Rowe aptly concluded, “The market isn’t always perfect, but a market under a rule of law that includes the right choices corrects a lot of its own mistakes. It keeps hunting for the low-cost solutions a lot faster and a lot more wisely than we mere mortals do.”

U.S. Energy Landscape


“We will see innovations on existing technologies. New functionalities have to be used in a smart way: We’re not going to reinvent the wheel.”

– Thomas Theisen, Head of Research & Development, RWE AG

“Effi ciency — not simply on the consumption end, but also on the production and distribution end, is a critical part of addressing the nation’s energy future.”

– Susan Tomasky, President, AEP Transmission, American Electric Power Company, Inc.

Speakers unanimously concurred that without the continuing development of clean technologies, the world cannot win the “great game” of mitigating climate change, achieving energy security and fueling economic growth. China and others have embraced this concept, spurring technological development through incentives, a commitment to R&D, and the creation of a welcoming investment climate. Some asserted that the U.S. government has not been as focused. As a consequence, American industry is increasingly being viewed in the eyes of the world as a “sleeping giant” in the clean development race.

Representatives from major U.S. companies countered this assertion by stressing that American industry is certainly awake and it is out of bed, but there is a dilemma. As Susan Tomasky, President, AEP Transmission, American Electric Power Company, put it, “It’s like we are standing in front of an overstuffed wardrobe trying to fi gure out what to put on.” Other speakers agreed with Tomasky, suggesting that the heart of the matter is not a lack of American ingenuity, but a plethora of technology choices without a clear national framework for how to evaluate them.

Speakers emphasized that companies within the energy industry are keenly aware of the need to upgrade aging infrastructure, reduce carbon emissions, improve effi ciency in transmission and distribution, and enable demand response and better load balancing with new smart grid technologies. To these ends, both upstarts and established players are making good progress. For instance, Darren Gale, Vice President, Babcock & Wilcox

Nuclear Energy, presented an advanced modular nuclear reactor design that can accelerate the construction of nuclear plants, and Thomas Theisen, Head of Research & Development, RWE AG, presented an intelligent charging pole for electric vehicles that RWE developed in conjunction with Daimler and Renault. This pole is able to identify the customer, which allows utilities not only to address the car’s needs but also to take into account the actual situation of the distribution network.

Despite these advances, speakers noted a number of challenges around deploying and integrating energy technologies in a way that meets the needs of customers for cost-effective electricity service. Indeed, the question of cost becomes extremely complex for regulated entities. Speakers stressed that utilities can only support technologies where regulators and policymakers support cost recovery through customer rates — a situation that often forces them to make a case for a particular technology on a state-by-state basis. As a consequence, they often have a number of technologies up in the air at any given time.

Speakers emphasized that the current energy landscape is not conducive to making sound investment choices. As one speaker observed, policymakers want the industry to refi ne its technology choices so consumers only pay for the ones that are certain to work. But making these choices in a fragmented regulatory environment is a thorny proposition. To simplify matters, speakers underscored the importance of putting a price on carbon through a national energy framework. This would allow them to better assess both the technological choices they have today, as well as the ones that are in development.

Speakers concluded by stressing the need for realistic expectations when it comes to the speed with which technology can be deployed. Even if the U.S. government implements a carbon framework soon, it would still take some time for the industry to sort through its “overstuffed wardrobe” and make its selections for stepping out into the everyday lives of customers.

Energy Technology

“I believe that market forces are the strongest of all. One of the major things that will make people rise up and ask for change is the impact on consumers’ pocketbooks.”

– Darren Gale, Vice President, Babcock & Wilcox Nuclear Energy, Inc.

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Throughout the Conference, a majority of speakers called for a clear U.S. national energy policy that includes a federal framework for reducing GHG emissions. If a growing number of industry leaders say climate change legislation is sorely needed, then why don’t we have it? As one speaker explained, one of the main reasons is the way that energy policy is actually enacted and administered in the U.S: There are 26 Congressional committees and 13 federal agencies that have some responsibility for energy policy at the federal level. Consequently, most policymakers examine the issues through their own narrow lenses as opposed to looking at them from a broader, national perspective.

Against this backdrop, speakers noted that it is somewhat remarkable that the Waxman-Markey Bill passed the House in 2009, although they concurred that the prospects for it — or the more recent Kerry-Lieberman Bill — becoming law in 2010 have become rather thin. Part of the problem is the fragile state of the economy, which has left legislators and industry leaders debating whether the climate change bills will hurt the employment picture in their own backyards. Speakers pointed out that poll after poll shows that jobs and energy are top concerns for Americans but climate change often comes in near the bottom. As one speaker remarked, “You have a skeptical public that is worried about one thing: jobs. This is why you see climate change and energy legislation being sold as a jobs bill.”

Weighing in on the “jobs” debate, some speakers expressed concerns that the currently proposed bills will create an unlevel playing fi eld by placing an undue fi nancial burden on carbon-intensive sectors such as refi ning, manufacturing and transportation. They further argued that this would raise the price of energy for consumers and cause jobs to migrate to developing countries that do not regulate GHG emissions, or certain other pollutants for that matter.

Others took a different view, seeing climate change legislation as absolutely critical for accelerating the development of clean energy technology, which some see as the ultimate engine for improving the nation’s employment environment. Indeed, the importance of accelerating the development of clean energy technology — through legislation or other means — pervaded the entire conference. When queried on how the government and the private sector could better work together to accomplish this objective, speakers agreed that the U.S. should avoid public policy that picks winners and losers. Some also argued in favor of policies that support commercialization of technologies in the most effi cient manner possible to encourage competition — a critical ingredient for lowering costs for consumers.

“America is not the only destination for capital any longer, so we have to have a very inviting investment climate right here and now — and frankly, we don’t.”

– Karen A. Harbert, President and CEO, U.S. Chamber of Commerce’s Institute for 21st Century Energy

“Over the last 30 years, information technology has enabled transformational breakthroughs in manufacturing, supply chain, and human resources management, as well as the front-offi ce business processes of sales, marketing and service. Today we have the opportunity to apply the same focus and capabilities to address the critical issues of energy and resource management. Organizations can now maximize profi tability and cash fl ow by optimizing their enterprise energy and resource strategy.”

– Patricia House, Co-Founder, Vice Chairman and Senior Vice President of Strategy, C3

Climate Change Legislation


“We’re very confi dent that we can develop the technology for Carbon Capture and Storage, but less confi dent that we can develop the legal and liability framework to make it viable.”

– Barry K. Worthington, Executive Director, United States Energy Association

“We think that straight talk, instead of faith-based legislating — the belief that if you mandate it, it will come — is needed.”

– Gregory Scott, Executive Vice President and General Counsel, National Petrochemical & Refi ners Association

While thoughts on what should or should not be included in domestic energy policy varied, all of the speakers recognized that the “great game” is a global one and that America is fi ercely competing for capital. Accordingly, some speakers asserted that the most important thing our government needs to do with regard to energy policy is to create a predictable investment climate so that business leaders, Boards of Directors and investors can make informed, long-term capital decisions. All types of energy projects — whether wind, solar, nuclear or conventional — have long horizons. The prospect of the business model changing one, fi ve or ten years into a project is anathema to investors. This fact left some to conclude that any climate change legislation, if it is to be successful, will need to take into account the sustainability of our investment environment, as well as our natural one.

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“Never make a bet against gas supply; you will lose — at least in the long-term.” – Dr. Benjamin Schlesinger, President, Benjamin Schlesinger and Associates, LLC

The Future of Natural Gas

2Galway BSA 2010, from UNECE LNG Report, Chapter 1 (draft).

Natural gas has a serious demand problem. As Dr. Benjamin Schlesinger, President, Benjamin Schlesinger and Associates, explained, the electric industry has built 300GW of natural-gas-fi red generation capacity in the U.S. over the last 20 years, but much of it is not being used. At present, natural-gas-fi red generation sets the margin in most power markets due to an overhang of potentially abundant supply, and shifting market dynamics. The stage has now been set, however, for this situation to change.

Often seen as a byproduct, or even a nuisance, related to other fossil fuel production, natural gas is fi nally coming into its own. Several factors are converging to drive this trend. Among them is the fact that North America has an abundance of supply in the form of shale gas that can be accessed via unconventional hydraulic fracturing techniques. Until recently, gas produced from conventional wells was viewed as being the low-cost option, while shale gas was seen as an abundant but high-cost U.S. resource. That perception has now reversed. Shale gas, to the surprise of some, is proving to be much cheaper to develop than conventional gas.

Natural gas also has characteristics that make it more environmentally friendly in the combustion process than other fossil fuels. Emitting about half the CO2 of coal, it is becoming an increasingly attractive option for electricity generation in a carbon-constrained world. Gas-fi red generators can also be turned off and on quickly, providing an essential counterbalance to intermittent renewable energy sources.

Bearing these factors in mind, Dr. Schlesinger pointed out that the future of the natural gas business and the accompanying market dynamics are likely to be much different than they are today. It is now necessary to look broadly at the natural gas business, since formerly isolated markets are now linked by a robust global LNG infrastructure. Both LNG and pipeline competition are emerging across four global markets: North America, which is almost entirely self-suffi cient; Europe, which imports from Russia, Algeria, and West Africa as well as consumes domestic production from Norway and the Netherlands; the Former Soviet Union, which mostly exports to Europe; and Industrial Asia, which depends heavily on imported LNG. In fact, global LNG supplies are projected to increase 38 percent by 2012.2 Much of this gas was originally aimed at U.S. markets, but it will now go elsewhere due to the profusion of North American shale gas. According to Dr. Schlesinger, the abundance of unconventional gas is destabilizing world gas markets. One result is a likely contract crisis in Western Europe, where traditional long-term take-or-pay contracts may not be able to withstand the coming spot-price onslaught driven by shale gas and LNG. Dr. Schlesinger further asserted that movements in Asian markets may take place as well, probably led by China’s LNG imports.

Dr. Schlesinger concluded by reminding the audience that uncertainty remains high since gas prices will ultimately be driven by fundamentals such as world economic growth, shale extraction technology, global LNG, and carbon policy. While natural gas producers may remain challenged by a demand defi cit in the near-term, many industry leaders still envision an expanding global role for the fuel over the coming decades. What is kindling such optimism? As the cleanest burning of the fossil fuels, natural gas is well-positioned to light the way for the energy industry as it seeks to transition to a low-carbon business model.


“Th e conditions are right, meaning that for the fi rst time we can power an electric mile cheaper than a gasoline mile. What that’s going to cause over the next few years is an inevitable transition to electric transportation.”

– Jason Wolf, Vice President, North America, Better Place

Transportation of the Future

While sounding futuristic, electric vehicles are nothing new. In fact, the “electric carriage” was invented in Scotland nearly 50 years before the fi rst gasoline automobile was invented in Germany around 1885. Is the world now preparing to “go back to the future” by transitioning to electric vehicles as its preferred mode of transport? Some people believe so.

Jason Wolf, Vice President, North America, Better Place, asserted that the transportation sector is on the cusp of a transformation. But how does he, or anyone, really know? According to Wolf, the transportation sector is now displaying the three telltale signs that are indicative of impending change in any industry: 1) a transformational technology that has become cost-effective and can be deployed in a way that breaks down barriers; 2) a sizeable market; and 3) considerable demand pull. He further explained that in the transportation sector, this translates into the capacity to store and use energy in batteries in a cost-effective way; the combined market mass of two of the largest industries in the world—energy and transportation; and a desire to move away from oil-based transportation, driven largely by concerns about energy security and climate change.

Major automakers have indeed noticed these signs. Renault and Nissan have begun to produce electric vehicles en mass, while General Motors, Toyota, and Ford have projects in the works. The automobile industry is also witnessing a spate of joint ventures and partnerships, such as the recent deal between Toyota and Tesla, whereby newcomers are joining with established players to move the industry forward.

But a change of this magnitude cannot occur without consumer backing, and this is where Wolf’s company, Better Place, and others like it are stepping in. Companies such as Better Place are providing a network of charge spots and battery switch stations that extend the range of the vehicles and optimize the driving experience. Better Place and others are also involved in developing software and networking technologies that monitor charging status, connect the vehicle to the energy grid, and complete the loop by providing a load-balance capability. Several large-scale pilot projects are being rolled out in Denmark, Japan and Israel, among other nations. Wolf further noted that Israel, with its understandably strong motivation to achieve energy independence, is on course to delink itself from foreign oil by 2020 via a nationwide transition to electric vehicles.

Wolf further contended that the transition to electric vehicles is not merely feasible; it is also inevitable due in part to the huge economic benefi ts it offers consumers. It is now possible to power an electric mile cheaper than a gasoline mile — a proposition that will be enticing to even the most reticent consumers as an antidote for rising prices at the pump.

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Summary of Breakout Sessions

Cliff Zwahlen, Exploitation Manager, Southern Division, Devon Energy

John W. Gibson, Jr., Director, Parker Drilling, Valerus Compression, and Orocobre, Ltd.

Oil & Gas SectorImplications of Gulf Events Until recently, the deepwater Gulf has been viewed as a critical bright spot in the U.S. oil production picture, and prior to the oil spill, deepwater output was expected to continue to grow. While the ultimate effects of the spill on future deepwater Gulf production cannot be projected, imagining a U.S. energy future without this resource base is diffi cult. Speakers emphasized that deepwater Gulf oil output is vitally important to U.S. energy security — perhaps just as vital as unconventional resources. The deepwater Gulf holds 19 percent of U.S. proved crude reserves, 17 percent of U.S. proved condensate reserves, and fi ve percent of U.S. proved NGL reserves.3

The implications of the spill will touch the industry at large, affecting regulations around safety and crisis preparedness and the availability of leases for future drilling. Speakers also suggested that the current U.S. moratorium on deepwater drilling will likely cause drilling rigs to be relocated from the deepwater Gulf to other geographies where deepwater drilling is still permitted — likely resulting in a signifi cant number of job losses in the U.S. Indeed, redeployment of rigs, tightened drilling safety regulations, and longer permitting timeframes will result in slowed activity that could defer more than 350,000 barrels per day of oil equivalent of deepwater Gulf production by 2015 and 2016.

Potential Rise in Global Demand for Unconventional ResourcesWhat is unconventional production? It is defi ned by the oil and gas industry as extraction that is more diffi cult (than conventional) and economically challenged. Unconventional resources include oil shales, oil sands, and gas shales. Speakers explained that the moratorium on deepwater drilling in the Gulf has now focused the spotlight even more heavily on the future of unconventional resources, but producing these resources is very energy intensive. For instance, oil sands production often requires using steam generated by natural gas. Thus, the oil price at which those resources are economically viable depends greatly on natural gas prices.

While unconventional oil and gas are prolifi c resources, they come with their own set of environmental challenges. For example, producing heavy oil also generates a lot of solids and drilling wastes that must be properly removed, while oil sands production requires companies to manage mine tailings and land reclamation. For producers, the keys to lowering disposal and remediation costs are effi ciency and economies of scale. Producing a barrel of bitumen also generates considerably more GHGs than producing a barrel of conventional oil does — another environmental challenge that must be addressed. Meanwhile, multistage fracs are common for gas shales and require a tremendous amount of water, a much guarded resource. To reuse the water, operators must control salinity and remove hydrocarbons, solids, and scale-forming components. Speakers stressed that the better producers are at self-regulating their sourcing, use, and disposal of water in unconventional resource production, the less likely governments are to impose increasingly strict water use regulations.

3“Gulf of Mexico Fact Sheet,” U.S. Energy Information Administration, http://www.eia.doe.gov/oog/special/gulf/gulf_fact_sheet.html


Power SectorTop Issues Facing Power Producers Emphasizing how quickly the energy landscape is changing, John Shelk, President and CEO of the Electric Power Supply Association, stressed the critical nature of competitive markets in promoting the discipline, fl exibility and innovation needed to choose the right path ahead for addressing climate change and energy security. He further outlined two main challenges facing power producers today: climate change legislation, and the fi nancial reform bill.

Regarding climate change legislation, Shelk favors a national, economy-wide, market-based approach to addressing climate change. In formulating this approach, he maintained that power producers must help policymakers to understand the complex, hybrid regulatory structure within which they operate so that any proposed legislation preserves fair competition. Regarding the second topic, Shelk expressed concern that proposed Financial Reform might have the unintended consequence of inhibiting the fl ow of capital to the industry. The danger, he explained, lies in treating power producers, who engage in swaps and other hedging mechanisms as a matter of course, the same as companies in the banking industry who engaged in much more risky transactions. To this end, he suggested that any proposed legislation should contain a very clear, unambiguous exemption for the power sector’s unique risk management practices.

Financing New NuclearSpeakers noted that between 30 and 40 U.S. power generators are at least considering building new nuclear at this point in time. This renewed interest in nuclear is primarily due to the need to meet increasing demand while simultaneously reducing carbon output. Plus, a majority of Americans, as well as a number of environmental interests, now view nuclear as the most viable alternative for addressing climate change on a large scale.

In fi nancing these enormously expensive ventures, speakers called for greater investor education, since those holding the capital often do not fully understand nuclear’s long-term benefi ts and its unique ability to provide zero-emission baseload generation. They also noted the importance of cost containment and risk management during these long-range construction projects. They concurred that these objectives can be accomplished via a number of mechanisms, including strong state regulatory constructs; partnering with experienced builders and operators from around the world; and a fl eet approach to construction, which promotes standardization and transferring lessons learned from one plant to the next.

Regulated Utilities SectorDevelopments in Regulatory Accounting and Reporting Late last year the FERC Strategic Plan (2009-2014) was released with two primary goals: 1) ensure that rates and terms and conditions are just, reasonable, and not unduly discriminatory or preferential; and 2) promote the development of safe, reliable, and effi cient energy infrastructure that serves the public interest.

To achieve these goals, Scott Molony, senior accountant for the FERC, described the increased emphasis on compliance versus penalty and eliminating the “gotcha mentality.” Since the 2005 FERC Policy Statement on Enforcement was released, a compliance culture has been encouraged among regulated entities, and increased self-reporting and cooperation have been the desired outcomes. There is now a focus on providing resources like the Compliance Guidance Toolkit, which includes information ranging from the formal (e.g., Commission Declaratory Order) to the informal (e.g., discussions and meetings with staff). Calls for increased transparency have resulted in a number of reports and policy statements so that companies can educate themselves on what to expect and what the enforcement process entails.

Jimmy Addison, Senior Vice President and CFO, SCANA

James L. Connaughton, Executive Vice President, Corporate Affairs, Public & Environmental Policy, Constellation Energy

Brant Meleski, Managing Director, Bank of America Merrill Lynch

John Shelk, President and CEO, Electric Power Supply Association

16

Tomorrow’s Cost of CapitalWith the economy slowly coming out of the recession precipitated by the recent mortgage crisis, Eric Ackerman, Director of Alternative Regulation at Edison Electric Institute, asked, “What is the next crisis that will leave us wondering, ‘Why didn’t we see this coming?’” The answer may very well be access to capital by regulated utilities. As utilities enter into a new cycle of capital spend, actual returns are lagging far behind allowed return on investment, thus constraining cash fl ows. Consequently, credit ratings for the utilities are trending down, leading to commensurate downward pressure on stock prices.

While lower stock prices may not be ideal, it is far from a disaster. So how will the “access to capital” crisis potentially be triggered? Speakers postulated that rising infl ation rates may be the tripwire. If infl ation surges, based on increasing oil demand, defi cit spending, the cost of debt and the cost of equity will rise precipitously, cutting off weaker utilities from the capital markets as credit ratings trend down. Such a decrease in access to capital will be detrimental to reliability and service quality due to reduced spending on infrastructure. Although there has been a long-term decline in credit quality, speakers emphasized that it is cost-effective to rebuild credit ratings, and that the industry may need to look at alternative regulatory policies to turn the trend around. Accordingly, speakers suggested that the questions now may be, “Have we seen this coming and did we respond prudently with policies to avert it?”

Carbon Markets: Managing Risks and Identifying OpportunitiesMuch uncertainty remains concerning whether or not federal climate legislation will be enacted in the immediate future, and if so, what form it will take. Nonetheless, speakers asserted that GHG emissions will increasingly be regulated in one form or another, whether through state legislatures or via the EPA and the Clean Air Act. Within this environment, companies are being challenged to get carbon reporting and monitoring processes in place. Speakers stressed that taking an enterprise view as well as having strong controls will be key success factors in coping with the demands of impending carbon regulation.

In preparation for the likely advent of carbon markets, speakers emphasized that quantifying one’s carbon footprint is the starting place — even though many companies have yet to do this. Working from this platform, they suggested that companies may wish to consider taking several actions for managing risks and identifying opportunities. These include looking at whether or not the company is a covered entity under the current federal proposals; examining potential liability under regional programs; acquiring offset credits in advance; directly investing in offset projects since developers are looking for fi nancing now; and examining the potential impacts of carbon price volatility on future business scenarios.

Overall, speakers insisted that companies must get into “compliance mode” now and that complacency should be avoided. As one panelist noted, it took his company fi ve years of counting to determine its carbon footprint. Doing nothing, he explained, will come back to hurt you.

Pauline Ahern, Principal, AUS Consultants

Fiji George, Director, Climate Strategies, El Paso Corporation

Andrew K. Soto, Senior Managing Counsel, Regulatory Affairs, American Gas Association

Luke Stuart, Principle Managing Director and Founder, The Global Carbon Bank

Richard Herzog, Partner, Harkins Cunningham LLP

Eric Ackerman, Director, Alternative Regulation, Edison Electric Institute


Smart Grid: Balancing Value and RiskHow does one defi ne “smart grid”? Speakers noted that the concept originated with Automated Meter Reading back in the 1990s but has since evolved into a multifaceted, two-way communications system that spans every aspect of electricity distribution and consumption. As such, one speaker noted, “It brings you into a whole new world of thinking about how you manage the grid.”

Speakers explained that “smart grid” today offers a growing value proposition as it has the potential to assist with operational effi ciency, customer service, revenue protection and improvement, fi nancial risk management, demand management, grid automation (reliability), and access to alternative energy supplies.

At present, companies are increasingly seeing commonalities in their smart grid efforts and are working together to identify and mitigate cyber security risks, overcome regulatory hurdles, promote stakeholder change management, and implement program management processes. The speakers commented that each of their companies — to borrow a term used several times in the plenary conference sessions — also employ a “three-legged stool” approach to smart grid development and deployment. This approach is based on climate, reliability, and economy. They further stressed that success of their efforts hinges upon engaging customers and understanding how to fulfi ll their needs. As one speaker noted, smart meters are the foundation for the business case for smart grid, and customers are the vehicle for making it successful. To this end, speakers concurred that companies will need to build a communications infrastructure as they move forward in order to deliver the fl exibility that is increasingly needed and expected by end-users.

The Honorable Robert E. Curry, Jr., Commissioner, Public Service Commission of the State of New York

Philip Mezey, Senior Vice President and COO, Itron North America

Mary Ludford, Vice President, Smart Grid/Smart Meter, PECO Energy

Susan Swan, Vice President, Smart Grid Development, Consumers Energy

Maureen Coveney, Director, Information Technology & Business Intelligence, San Onofre Nuclear Generating Station Portfolio, Southern California Edison

“America needs a renewed focus on innovation: Americans have an unbridled belief in technology as the solution to any problem, and the areas of energy technology and biotechnology are now sitting there for a President to seize.”

– Mark Penn, Worldwide President & CEO, Burson Marsteller; President, Penn Schoen Berland

Consumer Perspectives on Energy Burgeoning public anger over the current Gulf oil spill could create a political blowout that rivals the current geologic one, according to Mark Penn, CEO of the survey fi rm Penn Schoen Berland.

Penn, an adviser to former politicians such as President Bill Clinton and Prime Minister Tony Blair, explained that the spill is quickly galvanizing public dissatisfaction with the status quo in Washington. As a result, voters are likely to alter their patterns.

He also explained that the crisis in the Gulf is a truly singular experience in modern American history. “Rarely,” he said, “have we encountered a problem we could not solve in a few days with technology. But there is no silver technological bullet that will instantly fi x the current situation in the Gulf.” Penn further warned that America’s propensity for becoming frustrated with problems that drag on means that the Gulf spill has the potential for a complete destabilization and subsequent reformulation of America’s relationship with energy — which means that for industry players and elected offi cials alike, the upheaval in the Gulf could mean similar upheaval for them.

Penn suggested that politicians use the spill as a chance to take a leadership stance on energy and the environment, explaining that the public has been profoundly jolted by the spill and is likely to rally around such a message.

18

Lee Burrows, Partner, VantagePoint Venture Partners

Suvi Sharma, President, Solaria Corporation

Michael D. Ware, Managing Director, Good Energies, Inc.

Paul Afonso, Partner, Brown Rudnick LLP

Emerging Energy TechnologiesMany people both within and outside the energy industry believe that emerging energy technologies have the potential to become a powerful engine for economic growth and energy security. Much of the discussion focused on whether or not “clean tech” can live up to this promise. Panelists overwhelmingly concurred that the answer is yes, but it will require shifts in policy and regulation as well as changes in how we think about energy distribution and consumption. For instance, one speaker mentioned that, as in the case of distributed generation, utilities must get used to the idea that electrons can fl ow both ways on the grid. Others noted that some of the greatest clean tech opportunities lie in technologies that improve effi ciency, such as smart grid’s potential to reduce the huge amount of energy that is lost during transmission and distribution.

They also emphasized the need for “triangulation” among regulators, clean energy producers, and utilities since they are all part of an integrated system. Furthermore, speakers stressed that clean tech companies and investors have to be engaged in shaping policy. Speakers also pointed out that in developing clean technologies, companies must focus on sustainability not only from an environmental standpoint but also from an economic one. This requires driving costs out of manufacturing and deployment as well as continuously growing their customer bases. This is an issue that Germany, the pioneer in solar development, is facing as it encounters fi erce competition from China, whose companies have both improved on the technology and lowered production costs.

Notably, speakers explained that much of the potential to create jobs, which is an extremely hot topic in the U.S., lies in the extended ecosystem that emerging energy technologies create. For instance, while manufacturing is likely to remain offshore where costs are less, clean tech providers are creating jobs in the U.S. related to assembling, installing, and maintaining their products. Overall, speakers explained that clean tech providers must do a better job of communicating the value, scalability and usability of their products. This will be critical to accelerating adoption and to fulfi lling the potential these technologies have for fueling economic development.


David Rager, General Manager, Greater Cincinnati Water Works

David E. Rodgers, Director of Strategic Planning and Analysis, Offi ce of Energy Effi ciency and Renewable Energy, U.S. Department of Energy

Joel Eisenberg, Program Manager, Low-income Weatherization and State Energy Program Research, Oak Ridge National Lab

Energy and Resource Management When thinking “Energy Conference,” one immediately focuses on the big picture of power and utilities or oil and gas. Yet there is one area that sometimes gets overlooked — the consumers of energy, those at the ‘pointy edge of the stick’.

Speakers observed that energy effi ciency is one of the biggest contributions consumers can make to the energy landscape. Ironically, however, consumers themselves are often one of the biggest barriers to energy effi ciency and conservation since they tend to under-invest in it. The onslaught of new technologies and designs are now helping to reverse that tendency by automatically building in better effi ciency and changing consumer habits. Speakers pointed to consumers’ wide-scale acceptance of Energy Star appliances as an example. Speakers further suggested four possible ways to accelerate the adoption of energy-effi cient products and behaviors:

• Build on what people already care about (i.e., the importance of style);

• Capitalize on moments of opportunity for consumer change (i.e., get products to people when they need them);

• Fuel intimate conversations on the topic (i.e., make energy effi ciency part of everyday conversation to tap people’s emotions);

• Facilitate purposeful choices (i.e., help consumers visualize the impact of their choices).

Another important area of effi ciency and conservation, which requires consumer cooperation, is water usage. While water may not be thought of as being closely related to energy, water generates energy for a major portion of the United States’ west coast population and continues to become increasingly important for other areas — so much so that one speaker asserted that there will ultimately be a population shift as people consider affordable access to water supplies in planning their moves. Speakers further noted that they are already seeing access to water as a condition for citing and permitting of power plants.

September 22, 2010Utility Industry Book/Tax Diff erences – Minneapolis, MNFor more information, please contact [email protected]

September 23, 2010Accounting for Income Taxes: Rate-Regulated Utilities – Minneapolis, MNFor more information, please contact [email protected]

September 30 – October 1, 2010Deloitte Alternative Energy Seminar – Dallas, TXFor more information, please contact [email protected]

November 18, 2010Deloitte Oil & Gas Conference – Houston, TXFor more information, please contact [email protected]

November 30, 2010Deloitte Energy Accounting, Financial Reporting and Tax Update – Chicago, ILFor more information, please contact [email protected]

December 1, 2010Deloitte Energy Transacting: Accounting and Valuation – Chicago, ILFor more information, please contact [email protected]

December 1, 2010Deloitte Enterprise Risk Management: Trends and Leading Practices forPower & Utilities Companies – Chicago, ILFor more information, please contact [email protected]

May 19 – 20, 2011Deloitte Energy Conference – Washington, DCFor more information or to obtain a synopsis of the 2009 Deloitte Energy Conference, please contact [email protected]

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About the Deloitte Center for Energy SolutionsThe Deloitte Center for Energy Solutions provides a forum for innovation, thought leadership, groundbreaking research, and industry collaboration to help companies solve the most complex energy challenges.

Through the Center, Deloitte’s Energy & Resources Group leads the debate on critical topics on the minds of executives—from legislative and regulatory policy, to operational effi ciency, to sustainable and profi table growth. We provide comprehensive solutions through a global network of specialists and thought leaders.

With locations in Houston and Washington, D.C., the Deloitte Center for Energy Solutions offers interaction through seminars, roundtables and other forms of engagement, where established and growing companies can come together to learn, discuss and debate.

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