By Joseph A.

Stanislaw

Clean Over Green

Striking a New Energy Balance as
We Build a Bridge to a Low-Carbon Future

Deloitte Center for Energy Solutions

Contents

The greening of everything: A healthy pause 2

Striking the right balance 7

The clean development race 9

A place for natural gas – Missing in action 12

Clean energy: The way forward 16

About the author 18

1
The greening of everything:
A healthy pause

Even with the world gathered in Copenhagen this month for the UN climate summit, it is now clear that the all-consuming
global obsession with anything green has subsided. This is a good thing. We can now move from breathless anticipation of a
green dawn, to the more sober work of systematically and thoughtfully building toward a low-carbon future.

Figure 1. A new balance: green encompassing market values

Long-term goal Economic growth,

of carbon-free energy security,
energy "fair" market
Carbon-free future
at any cost

The last two years: Emerging trend:

shifting priorities clean development

Source: The JAStanislaw Group LLC, 2009

During the past two years, green trumped all. Other values—such as economic growth, energy security, and a fair market—
were given short shrift. In fact, green was often misunderstood, because green encompasses these other values. But politics of
various sorts, especially a schism between the traditional and the new energy business sectors, has clouded this fact.

The emerging paradigm, by contrast, is more balanced. It is built on the pursuit of energy that is clean, and not only renewable
green sources. Implicit in this is the idea that oil, natural gas, and coal have the potential to be clean as well—and that the
principal goal of policymakers should be to establish a level playing field so that we can identify the cleanest fuels that can be
produced at the lowest cost. Clean will also embrace the idea of reducing energy use through efficiency and other technologies.

Clean Over Green Striking a New Energy Balance as We Build a Bridge to a Low-Carbon Future 2
 Underlying this shift from green to clean is the sense that we are in the midst of creating a new development model that allows
us to simultaneously promote economic growth—globally and equitably—while also fighting climate change. Efforts like those
being undertaken in Copenhagen are not just anti-pollution crusades, but attempts to design a pro-clean-growth economic
model with global appeal—a clean development path to the future.

As a result, fossil fuels, previously cast as the black sheep in the new era, are easing their way back into the conversation as the
essential bridge to a cleaner age. There is a growing understanding that this bridge to the future will be longer than has been
widely acknowledged. And there is a realization that the pylons of this bridge—oil, natural gas, and coal—are at risk.

Figure 2. A new race − clean development

Promotes
Devloping economic
clean growth
fossil fuels Increasing Increases
efficiencies energy
New energy of use security
technologies
Addresses
climate change
problem

Contrary to conventional wisdom:

If not addressed, climate change and energy security will limit economic growth.

Source: The JAStanislaw Group LLC, 2009

“Fossil fuels, previously cast as the black sheep in the new

era, are easing their way back into the conversation as the
essential bridge to a cleaner age.”

3
This risk became evident in the aftermath of the summer of 2008, when oil prices, having peaked, plummeted precipitously.
This volatility—combined with the destruction of oil and natural gas demand during the economic crisis—subverted the
investment logic that had been driving the rush into alternative energy forms. The makings of the next energy crisis were at
hand. When the price of oil began falling, the returns on new investments in wind, solar, biofuels—and also in oil, natural
gas, and other energy forms—were no longer so appealing.

Figure 3. Bridge to the future

The green (clean) future:
Sustainable, affordable
low-carbon energy;
more with less

New
technologies
Renewables
Today
Efficient
end use
Clean coal

Clean oil

Clean gas

Source: The JAStanislaw Group LLC, 2009

It is now the task of policymakers to create a framework that reduces the unpredictability of the markets and encourages
long-term investments. At the heart of this system should be a price for carbon. If the stark imbalances in supply and
demand—in oil, natural gas, and photovoltaics—persist, the makings of the next energy crisis could be at hand. Prices for
oil, natural gas, and photovoltaics could spike and then collapse. If so, another roller coaster ride would begin, affecting
investments not just in oil and gas, but in new and renewables as well—and undermining our battle with climate change,
to boot.

Clean Over Green Striking a New Energy Balance as We Build a Bridge to a Low-Carbon Future 4
 “It is now the task of policymakers to create a framework
that reduces the unpredictability of the markets and
encourages long-term investments. At the heart of this
system should be a price for carbon.”
But there is still time to correct course. And the signs of a shift in the conversation are evident in many ways, some striking and
others more subtle.

In late October, the Pew Research Center released a survey that showed that only 57 percent of Americans now think there is
“solid evidence the earth is warming”—a drop of 14 percent since April 2008, and an even sharper fall from 2006 and 2007
readings of 77 percent. The decline cuts across parties, but is most pronounced among politically crucial independents. This fall
should be cause for concern, but it does not necessarily reflect a more benighted public—just one that has more immediate
existential concerns. It also might indicate that the public became skeptical about climate change because, despite the
overheated rhetoric, they did not see politicians taking concrete actions.

Figure 4. The great recession of 2008-2009: a future crisis in the making

Next economic dip

reduces energy demand

Oil/gas prices collapse

Alternative energies Demand and price

no longer competitive continue to spike and dip
Investment ceases
for traditional and
renewable energies

Source: The JAStanislaw Group LLC, 2009

5
Investors, meanwhile, are taking a more careful look at green technologies in the midst of a punishing market, with green
energy equities having suffered more than the average stock.

A more nuanced sign comes in the rhetoric of the Obama Administration, whose members now speak more often about
“clean energy” than about new and renewable forms of energy. President Obama himself is balancing green cheerleading
with a nod to traditional fuels. In a speech in late October, he emphasized the need to make “the best use of resources we
have in abundance, everything from figuring out how to use the fossil fuels that inevitably we are going to be using for
several decades, things like coal and oil and natural gas; figuring out how we use those as cleanly and efficiently as possible;
creating safe nuclear power.”

What precipitated this shift away in the balance from all-green to clean?

Certainly, the economic crisis has slowed the headlong rush, as Americans come to realize that transitioning too abruptly to
a cleaner energy era would hit their pocketbooks. With unemployment levels at generational highs, matched by skyrocketing
public deficits and debts, doing anything to raise household energy costs is anathema. The fall in the price of oil, from its
dizzying peak of $147.27 in summer 2008, has done its part by denting the economics of new-fuel technologies, just as it
damaged the economics of new oil and natural gas production.

Meanwhile, it is becoming ever more clear that retrofitting the nation’s infrastructure to fully take advantage of alternative
energy forms will not just be expensive, it will take time for new technologies to penetrate the market—possibly as much as
a generation. This will require a holistic approach to bridging our way to a low-carbon future—an approach that relies on
sustained efforts at conservation and efficiency; the aggressive pursuit of new and renewables; a role for clean oil, clean gas,
and clean coal; and a rethinking of economic development.

Likewise, the intense focus on green technologies has led to much closer scrutiny of the claims about them. In some cases, it has
become evident that the cure is worse than the disease. First-generation biofuels are a prime example of the often Janus-faced
nature of alternatives: the grain it takes to fill one SUV with ethanol, for instance, could feed a hungry person for a year. This
skepticism will accelerate the drive to the next generation of technologies that mitigate the drawbacks of their predecessors,
such as biofuels based on enzyme processes and algae.

Figure 5. Great technologies − accelerating the drive to the next-generation technology

Ethanol was well intended, but...

Fill one SUV's tank Enzyme processes

Feed a hungry
person for one year

Algae farming

First-generation biofuel Next-generation biofuels

Source: The JAStanislaw Group LLC, 2009

Clean Over Green Striking a New Energy Balance as We Build a Bridge to a Low-Carbon Future 6
Striking the right balance

This is not to say that the debate has swung to any pre-“Inconvenient Truth” extreme, just that it is now more
balanced—and making a healthy transition from green to clean. Many of the movements in political will and public
opinion that have been consolidated will likely be maintained by continued aggressive action by policymakers (lest the
public become apathetic and disillusioned, as they appeared to have done with climate change). These include:

• An intense focus on energy efficiency, and an understanding that efficiency is not about deprivation. Conservation was
about doing less with less; efficiency, by contrast, is about doing more with less. “Negawatts”—energy saved from
efficiency efforts—cost 1 to 5 cents per Kw hour, a small fraction of the cost of producing energy. The Elithis office tower
in Dijon, France, is characteristic of efficiency efforts: While built at the same cost as a traditional construction, its use of
new technologies means it uses just 1/20th of the energy that the average office space consumes per square foot.

• A consensus that if we fail to address climate change and energy security, we will be limiting economic growth. This is
a fundamental reversal of the conventional wisdom that had prevailed until now—that by addressing climate change
and energy security we would reduce economic growth.

• A recognition that moving to a clean energy world represents the largest economic opportunity of the 21st century.
The Chinese market alone for clean technology is expected to reach $1 trillion annually.

• The empowerment of individuals as key actors in the move to cleaner energy, as households switch to fluorescent
lights and hybrid cars, and individuals track their carbon footprints. Initiatives like the cash-for-clunkers program,
energy-efficient mortgages, and interest-free loans to finance energy efficiency upgrades are maintaining the focus on
individuals as prime movers.

• Rising corporate awareness that going clean can reduce costs, increase customer loyalty, and fatten the bottom line.

These tectonic shifts are evidenced in the breadth of the political moves made by the Obama Administration, which have
met with very little resistance. President Obama made fuel efficiency the subject of a presidential directive during his first
week in office and subsequently the EPA raised CAFE targets to 35.6 MPG. The Recovery Act in February allocated more
than $70 billion to energy and environment projects, making it not only the biggest energy bill the country has ever seen,
but also what the President often calls “the largest single boost in scientific research in history.”

And, Obama’s 2010 budget established an ambitious series of energy goals. It aims to: 1) create five million green jobs
by investing $150 billion in renewable energy efforts over the next 10 years; 2) double alternative energy production,
to cover 10 percent of electricity needs by 2012, and to 25 percent by 2025; 3) update and expand the nation’s energy
infrastructure, focusing specifically on building an electricity grid that can better integrate renewable energy; 4) promote
energy efficiency by, among other measures, retrofitting buildings and upgrading public transport systems; and 5) invest
heavily in energy R&D, with $8.8 billion in the stimulus bill alone, including $800 million for clean coal, $1.5 billion for
industrial carbon capture, $800 million for biomass, and $400 million for geothermal.

7
Figure 6. Green to clean − the right balance: the priorities reset

20W incandescent 20W fluorescent

Conservation = Doing less with less Failure to address climate

Efficiency = Doing more with less change and economic security
will limit economic growth

Clean energy technology is Individuals are prime Advantages to business world

the largest economic opportunity movers of clean energy - Cost reduction
of the 21st century - Customer loyalty
- Increased profits

Source: The JAStanislaw Group LLC, 2009

Speaking at MIT on October 23, Obama waxed optimistic about what all these funds were doing. “The Recovery Act
includes $80 billion to put tens of thousands of Americans to work developing new battery technologies for hybrid
vehicles; modernizing the electric grid; making our homes and businesses more energy efficient; doubling our capacity to
generate renewable electricity. These are creating private sector jobs weatherizing homes; manufacturing cars and trucks;
upgrading to smart electric meters; installing solar panels; assembling wind turbines; building new facilities and factories
and laboratories all across America.”

The bills in Congress echo the Administration’s approach. However, they still emphasize green over clean, and fail to give
proper due to the role that cleaner oil, cleaner gas, and cleaner coal can play as we move toward a low-carbon future.

Clean Over Green Striking a New Energy Balance as We Build a Bridge to a Low-Carbon Future 8
The clean development race

The rush into the new energy era, of course, is a global technology race. But it goes beyond technology to a race for
clean development. Never before have so many entrepreneurs and so much capital been focused on the world of
energy. Even in the midst of the plunge in equities, approximately $155 billion was invested in 2008 in renewable energy
companies and projects worldwide.

“The rush into the new energy era is a global technology

race. But it goes beyond technology to a race for clean
development.”
In particular, the “market and might” of China, India, Brazil, and the other new-energy tigers—some with their more
centralized economies, their vast R&D budgets, and their sway in the climate debate—is placing unprecedented pressure
on the U.S. in the clean-development race.

The scale of what is happening in China says it all. Almost 40 percent of its $586 billion stimulus package is going to
green projects. One result of this is that by 2030, China is expected to reduce its oil imports by up to 30 to 40 percent,
its coal demand by 40 percent, and greenhouse gas emissions by 50 percent. This is not just speculative, but part of a
sustained trend. China has consistently improved the “carbon efficiency” of its economy over the past 15 years, reducing
carbon dioxide and other greenhouse gases by 4.9 percent (per unit of GDP) annually on average over the past 15 years—
compared with just 1.7 percent in the U.S. and 2.7 percent in Germany. Said U.S. Commerce Secretary Gary Locke when
he visited in July: “China has already adopted the most aggressive energy efficiency program in the entire world.”

Figure 7. The clean development race − a global technology race

The Energy Enterpreneurs

Denmark
Germany

United States
China
Maghreb Qatar
Countries Saudi UAE
Arabia India

In 2008 $155 billion was invested for

renewable energy worldwide.

The race for clean development inspires and requires transformational thinking.

Source: The JAStanislaw Group LLC, 2009

9
Meanwhile, China has been building up its hydro, nuclear, solar and wind capacity as it aims to increase renewable energy
consumption to 10 percent by 2010 and 15 percent by 2020. More than 600 Chinese solar-cell companies now manufacture
an astonishing 44 percent of the world's total cells for solar-powered devices. One in every 10 Chinese households uses a
solar thermal water heater. And China has the largest wind turbine fleet in Asia, ranked fourth in the world.

These feats and ambitions, of course, are not limited to China. South Korea has committed to investing two percent of
GDP each year in clean energy, for a total of $80 billion over five years. Pakistan is the global leader in efficient natural gas
vehicles, followed by Argentina, Brazil, and Iran.

“The ‘market and might’ of China, India, Brazil, and other

new-energy tigers is placing unprecedented pressure on the
U.S. in the clean-development race.”
The transformation in the developed world is almost as compelling. Take Denmark. Buffeted by the oil shocks of the 1970s,
it went on an efficiency and renewables drive that allowed its economy to grow by 70 percent from 1980-2008, while
keeping energy use flat—all while creating high-paying jobs and becoming a world leader in wind, insulation, and efficiency
technologies. Its transformation since the 1990s has been even more remarkable, as its economy grew 45 percent while
energy use declined 30 percent. Denmark aims to increase its use of renewable energy to 20 percent of its overall energy
mix by the end of 2011, up from 15 percent today; in 2025, it will not have increased its energy use in 50 years. Germany
and Spain have made similar leaps through wind and solar initiatives that were prompted primarily by the quest for jobs.
Germany—whose reliance on renewable energy for electricity grew from 6.3 percent in 2000 to about 15 percent in
2008—aims to reach 27 percent by 2020 and has created 250,000 new green jobs in less than 10 years. Within the next
decade, green jobs will be a more important source of employment for Germany than the auto industry. The list goes on.

The race for clean development inspires and requires transformational thinking. Game-changing ideas of a mind-boggling
scale emerge out of nowhere. The Desertec Industrial Initiative, launched in July, is a $400 billion effort to transform the
Sahara desert into the Saudi Arabia of renewable energy. This dream—conjured by the EU, private European companies, and
the World Bank—will take time. It will be tested with a 100 MW demonstration project to see if the concept can survive the
Sahara’s extreme conditions, and then will have to clear further technical and regulatory challenges. If it does, Desertec could
be a poster child for transformative thinking. By covering a fraction of the desert with advanced solar cells, the project would
provide 17 percent of Europe’s electricity needs by 2050 via a super grid of high-voltage cables. (Incredibly, over just six
hours the world's deserts receive more energy than mankind consumes in a year.) Desertec also includes wind farms, which,
together with its solar power, will help feed the energy needs of North African countries as well.

Clean Over Green Striking a New Energy Balance as We Build a Bridge to a Low-Carbon Future 10
 Even the titans of oil in the Middle East “see the light”—the one powered by alternatives. They are muscling their way to
the forefront of efforts to innovate in the new and renewables space, and to create cleaner fossil fuels. It is of some signifi-
cance that the new International Renewable Energy Agency will be headquartered in the United Arab Emirates, in Masdar,
the world’s first carbon-neutral city. The agency, with 136 member states, will provide policy advice and assist in capacity
building and technology transfer. Meanwhile, Saudi Arabia has proposed a billion-dollar fund to promote research into
making fossil fuels more environmentally friendly, including CO2 removal, and has promoted the International Energy Forum
to bring together producers, consumers, and the oil companies that extract, refine, and sell oil.

“Even the titans of oil in the Middle East ‘see the light’—the
one powered by alternatives. They are muscling their way to
the forefront of efforts to innovate in the new and
renewables space, and to create cleaner fossil fuels.”

11
A place for natural gas—missing in action

But, while the alternative energy push continues, a course correction is needed: Natural gas, in particular, as well as oil
and coal, should be given their due as the indispensable fuels of the coming decades. There is a commonly held view that
we cannot transition to a carbon-neutral world without them.

The reasons for this are clear, compelling, and multiple.

First, too much of the world’s infrastructure is built for fossil fuels and it will take decades to retrofit it for new and
renewable sources of energy. Take America’s 211,000 miles of high-voltage power lines: Transforming this grid so it can
take full advantage of renewable energy sources would cost $13 billion annually over 10 years. By contrast, the stimulus
allocated $6 billion to the grid over two years—China’s stimulus bill allotted $75 billion for the same purpose.

Second, fossil fuels both are in abundance and have the potential to be sources of relatively clean energy. Take natural
gas, which provides 22 percent of America’s electricity. Not only is it the cleanest of the fossil fuels, the industry has
reduced emissions by 36 percent since 1980. And, remarkably, America’s reserves of natural gas have doubled over the
past two years, thanks specifically to dramatic advances in technology used to produce shale gas. The U.S. now has a
100-year supply of natural gas at current consumption levels. Meanwhile, LNG capacity also is increasing.

Congress and the Administration should consider redoubling their commitment to creating a level playing field in which
all fuels—traditional and new—are encouraged to become cleaner (while also factoring in their cost). Incentives should
be provided to remove carbon from oil and gas, as well as from coal; the best way to do this is to put a price on carbon.
If policymakers allow the current market conditions to persist by disadvantaging natural gas (and oil), thus upending
the balance in supply and demand, they could be laying the groundwork for another possible energy crisis with serious
ramifications for the broader economy. A similar dysfunction exists in Europe, where take-or-pay contracts are distorting
the natural gas market.

Figure 8. A place for natural gas: missing in action

Current U.S. energy legislation supports clean coal, but largely ignores natural gas...

This ignores the following facts:

− Gas provides 22% of America's electricity
− Gas is the cleanest of the fossil fuels
− U.S. gas industry has reduced emissions by 36% since 1980
− U.S. has the third-largest gas reserves in the world (100-year supply, at current demand levels in the U.S.)
− Technology of extracting shale gas has increased dramatically the U.S. reserve levels

...but, meeting enviromental challenges is the key to unlocking the new U.S. potential.

Source: The JAStanislaw Group LLC, 2009

Clean Over Green Striking a New Energy Balance as We Build a Bridge to a Low-Carbon Future 12
 “Natural gas, oil and coal should be given their due as the
indispensable fuels of the coming decades. There is a
commonly held view that we cannot transition to a
carbon-neutral world without them.”
But the oil and natural gas markets face challenges beyond the policy front. Both are suffering from a collapse in demand.
Globally, oil demand has fallen over 2 million barrels a day within the past two years. Both oil and natural gas markets
have witnessed and continue to witness oversupply. With natural gas, the long hoped-for increase in LNG has happened;
but unfortunately it is happening exactly at the moment when demand has collapsed. Every spare LNG cargo has very low
marginal cost and thus continues to be sent into already oversupplied markets, depressing spot prices. These spare cargoes
are not going to Asia, but to North America and Europe, aggravating already severe imbalances in demand and challenging
the take-or-pay contracts in European markets in particular. One key to correcting the market imbalances might be Asian
demand, which is expected to continue to rise and could thus absorb these spare cargoes. What is not clear is what this
will do to prices in Europe and North America. Meanwhile, shale gas supplies in the U.S. also are on the rise despite the
oversupplied market, as many producers are compelled to produce—if they do not, they will lose their licenses to drill.

So, until the economic crisis is behind us and demand recovers, the market will remain in distress, thereby subverting the
positive role natural gas should be playing in the drive to a clean energy future.

Third, the energy nationalism of resource-rich countries is challenging the global oil markets. This reality is captured in a
simple statistic: In 1978, the major international oil companies controlled production from 70 percent of oil and gas reserves;
today, they control production from about 10 percent, with the balance in the hands of national or state-dominated oil
companies. In the race for global resources, Western companies are at a clear disadvantage in these closed markets—despite
the fact that the international oil majors are more efficient at producing oil. If a Chinese company wants an oil project in
Nigeria, Beijing can deploy massive foreign aid as a carrot; the U.S. and Europe cannot do the same.

This dynamic is putting at risk the world’s ability to increase supplies, at exactly the time when we will need the increased
supplies—particularly to meet the ravenous appetites of China, India, and others. The time, therefore, has come for resource-
rich countries to rethink how they can maintain control of their resources, while optimizing production by accessing the
technology of the private sector, thus creating a win-win-win for themselves, the companies, and consumers.

13
The insatiable thirst for energy in emerging markets, and the already large demand in the Figure 9. Energy demand - the future is strong
developed world, are reasons that—even as new and renewable energy forms have been
coming on line—demand for fossil fuels continues to grow. Daily global consumption of oil Daily global oil consumption increase from 2000 to 2007:
rose by 9.4 million barrels per day from 2000 to 2007; 85 percent of this growth is due to 9.4 million barrels per day
demand in emerging markets. (More new cars will be sold this year in China than in the U.S.)
Oil demand then collapsed by 1.5 million barrels in 2008 (the U.S. accounted for 1.3 million
of this fall) and even further in 2009 because of the economic crisis. Natural gas demand fell Developed
more precipitously in 2009, by an estimated 2-3 percent in the U.S. and by a similar, if not countries
greater, percent in Europe. But appetites for some traditional fuels also are growing, even in 15%
the developed world. In the EU, despite the aggressive push by Brussels towards alternatives,
over the mid-term natural gas is expected to be the fastest-growing energy source and will
remain so for years to come. This dependency is compounded by persistent concerns about
the security of Europe’s natural gas supplies. Also, unlike in the U.S., natural gas figures Emerging markets
prominently in the EU’s clean-energy campaign. China, India, and others
85%
The message in all this for the United States is that—while we pursue the long game
of greater independence through efficiency and renewable fuels—we should seriously
consider taking full advantage of our existing national assets.
The economic crisis interrupted this trend, but resource-
But given their indispensable role, these traditional fuels have been given short shrift in rich countries must position themselves for a resumption
the American conversation. Until now, the Obama Administration has treated oil and gas in demand growth.
almost like second-class citizens (or worse), invoking them only in the context of increasing
their taxes and reducing their subsidies. Natural gas, the cleanest of the fossil fuels, could Source: The JAStanislaw Group LLC, 2009
be given a greater role in the Obama Administration’s game plan. More broadly, the
definition of “clean energy” could include clean coal; natural gas as it is, as well as even
cleaner natural gas; and clean oil. Clean means clean. Period. The technology race to drive
carbon out of coal could be broadened to drive it out of oil and gas, too. Some companies
are, in fact, working on demonstration projects to remove carbon from natural gas.

Simply put, it will likely be very difficult for the U.S. to cross the bridge to a low-carbon
and a clean-development future without mobilizing the American oil and gas industries.
To accelerate this process, all energy forms, including fossil fuels, should be allowed to
compete within a framework set by the government. Whatever fuels meet the policy
demands, and can adjust to the carbon costs, should be able to play the game.

Clean Over Green Striking a New Energy Balance as We Build a Bridge to a Low-Carbon Future 14
 Another consideration: the oil and gas industries generate hundreds of thousands of highly skilled, high-paying jobs.
These are skills and positions that, once lost, are unlikely to return. This neglect also is evident in our commitment to
educating the engineers skilled in traditional fuel technologies. Today, there are just 2,000 students being trained in
petroleum engineering sciences in western Europe and North America combined. By contrast, a single institute in Moscow
alone is home to 8,000 such students—and Russia has five similar institutes. The old West is forfeiting future leadership in
this industry.

“The President should show his cards on nuclear energy, the

proven carbon-free energy source that produces 21 percent
of America’s electricity. How does it figure in his vision of
America’s energy future?”
In a similar vein, the President should show his cards on nuclear energy, the proven carbon-free energy source that produces
21 percent of America’s electricity. How does it figure in his vision of America’s energy future? He should not keep this
industry, which must make investments with a 50-year or longer horizon, in limbo for much longer—especially since no new
U.S. reactor will go online until 2016 at the very earliest, marking a hiatus of almost 40 years since the last reactor.

15
Clean energy: The way forward

“From China to India, from Japan to Germany, nations everywhere are racing to develop new ways to produce and use
energy,” President Obama likes to tell audiences. “The nation that wins this competition will be the nation that leads the
global economy. I am convinced of that. And I want America to be that nation.”

In order for America to be that nation, it should consider making use of all of its energy resources. This will demand a
series of changes in how we think about energy.

First, the world simply cannot be held hostage by the volatility in oil prices, which subvert well-functioning markets and
destroy long-term investment. Instead of being whipsawed, policymakers could seize the day by establishing a predictable
price for carbon, thus unleashing greater efforts at conservation, efficiency, and demand reduction. Such a policy-driven
market could clearly lead us to a cleaner future.

Second, the current schism between the old and new energy industries—wherein the green evangelists mock the tradi-
tional fuels, and the oil and gas crowd return the favor—should end. This transformation also could be led by policy-
makers who make it known—through transparent rules—that there is no silver bullet in our common effort to build a
low-carbon future. All energy forms—provided they can meet standards for being clean and cost-effective—should be
able to compete for market share and funding.

Figure 10. The new mantra - clean energy

Economic
Development

Climate Change
Relief

Public
Policymakers
Private
sector

Private and Public, and Private/Public together:

Realigning clean development

Source: The JAStanislaw Group LLC, 2009

Clean Over Green Striking a New Energy Balance as We Build a Bridge to a Low-Carbon Future 16
 Third, the marginalization of natural gas, which the U.S. has in increasing abundance, should be an area of focused
attention. This relatively clean fuel is desperately sought after by nearly every country, yet somehow the U.S. considers it
a lesser fuel. Natural gas could be treated equally with other fuels in the bills being debated in Congress. But in so doing,
the natural gas industry will likely be required to meet all the environmental challenges and objectives, in appropriate and
comprehensive ways.

Fourth, the oil, gas and coal industries could do their part by committing to developing carbon-neutral technology. At
the top of their goals could be to produce ever-cleaner oil, natural gas, and coal. Within a generation, we could well
be talking about “clean oil,” clean natural gas,” and “clean coal”. This can happen within an enlightened and fair policy
framework.

“Clean energy” can become the new mantra, serving as a touchstone in the race for a clean model of economic develop-
ment and for efforts to combat climate change. This is an opportunity of a lifetime: There will probably be more money
spent in the energy sector in a broad sense in the next 50 years than has been invested in the past 100 years, if not in the
history of mankind. Channeling these investments well, into an era of clean energy, is the challenge that policymakers, the
private sector, and the public all face united and together.

17
About the author

Dr. Joseph A. Stanislaw is founder of the advisory firm The JAStanislaw Group, LLC,
specializing in strategic thinking, sustainability, and environmentally sound investment in
energy and technology. He is an independent senior advisor to Deloitte’s Energy & Resources
Group. As an energy industry leader, advisor, strategist and commentator, Dr. Stanislaw
advises on future trends in the global energy market. Dr. Stanislaw serves on several boards
in the energy and clean technology space. He is a member of the Council on Foreign
Relations.

Dr. Joseph A. Stanislaw Dr. Stanislaw was one of three founders of Cambridge Energy Research Associates in 1983
Independent Senior Advisor and served as managing director for all non-U.S. activity until 1997, when he was named
Energy & Resources president and chief executive officer. He is an adjunct professor in the Nicholas School of
Deloitte LLP the Environment and Earth Sciences at Duke University, where he is a Member of the Board
+1 703 251 1726 of Advisors for the Nicholas Institute for Environmental Policy Solutions. Dr. Stanislaw was a
jstanislaw@deloitte.com Research Fellow of Clare Hall and lecturer in Economics at Cambridge University, where he
was also a member of the Energy Research Group in the University’s Cavendish Laboratory.
He was a senior economist at the Organization of Economic Cooperation and Development’s
International Energy Agency in Paris.

Dr. Stanislaw is co-author of The Commanding Heights: The Battle for the World Economy.
Now in the second edition, the book has been translated into 13 languages and made into
a six-hour documentary on PBS. He is also the author or co-author of numerous reports and
published papers on the geopolitics and economics of future energy supply and demand,
including Energy in Flux: The 21st Century’s Greatest Challenge, and he is featured in the
public television documentary, Oil ShockWave.

Dr. Stanislaw received a B.A., cum laude, from Harvard College, a Ph.D. in Economics from the
University of Edinburgh, and was awarded an M.A. from the University of Cambridge. He is
one of only several people to have been awarded an Honorary Doctorate and Professorship
from Gubkin Russian State University of Oil and Gas in Moscow.

Dr. Stanislaw may be contacted at jas@thejastanislawgroup.com.

Clean Over Green Striking a New Energy Balance as We Build a Bridge to a Low-Carbon Future 18
About the Deloitte Center for Energy Solutions
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December 2009