Dr. Ernest Moniz, Under Secretary of Energy, spoke at Fusion Power Associates 20-Year Anniversary Meeting and Symposium, October 19 in Washington, DC.

Introducing him, FPA president Steve Dean noted that, prior to becoming Under Secretary of Energy in 1997, Dr. Moniz was Professor of Physics and head of the Department of Physics at MIT, where his primary scientific interest was theoretical nuclear physics. Earlier in the Clinton administration, Dean noted, Dr. Moniz also served for a time as Associate Director for Science at the White House Office of Science and Technology Policy, "where he got to know many of our problems at that time." As Under Secretary of Energy, Dr. Moniz oversees the Department's research and development portfolio, including the fusion program. Dean said, "Under his urging the whole idea of developing roadmaps emerged at the Department, which has been very well received on the Hill and within the administration."

Dr. Moniz describe the energy and science contexts within which fusion is viewed at the Department. He said, "First of all, We don't see any conflict, clearly, between the science and energy goals of our (fusion) program. Quite the contrary, they fit together. The energy goal being some decades away I think just reinforces the very important need for this science and enabling technology focus today. Secondly, as we look to the energy future, I think we must always remember that it's not just about technology; it's about the conditions that will influence the marketplace realities. And it's never too early, I believe, to be actively engaged in those discussions -- those discussions shaping the arguments in ways that ultimately would address, frankly, some of the environmental and energy security advantages that fusion may offer down the road. The budget increase, while apparently not up to (the) desires (of some), is a very important statement that a lot of people are very happy with the way the fusion community has taken leadership, has reshaped the program, in ways that hold great scientific and energy promise."

Moniz said, "In the years ahead, it's very clear the energy sector in general, will be (in) a dynamic period -- again, particularly in the electricity sector as the forces of supply, deregulation, and environmental protection come together, hopefully synergistically, but perhaps in some collision. On the energy demand side, energy demand will grow dramatically, perhaps quadrupling by the end of the next century. World electricity consumption will probably double in the next two decades. Annual growth in the industrialized countries alone will probably be one and a half percent, considerably more in the developing world. By 2015, predictions in this country alone, the United States, project the need for a new 250 gigawatts of electric power generating capacity. So it's a lot of demand side requirements, and, of course, a major issue over this 15- year period, and, of course, in the many decade time period as well, that is of direct interest in this (fusion) program."

He said, "The question of where this energy will come from, of course, is one of the very important responsibilities at the Department. Again, on the energy supply side, EIA projects, again, in the same time period, 20 percent more oil consumption, 60 percent of which will be imported -- a much higher ratio than that at the time of the oil shocks. We'll consume 33 percent more natural gas than today, perhaps even more if natural gas emerges as an important transition fuel. Coal, of course, while abundant and remaining the dominant supplier of electricity, poses environmental challenges -- sulfur, carbon dioxide, etcetera. Hydro, of course, today provides an abundant and cheap power source for major parts of the United States, but it's a capped resource. It's not going to grow in any substantial way. Nuclear energy is the second largest source of U.S. electricity. But, again, as you know, (there are) many challenges. License renewals coming up over the next decade suggest that we will see a substantial decrease in the amount of nuclear energy available in this 15-year time period. So issues of energy security, although not dominating the discussion over the last decade as much as they did two decades ago, are actually a very important and critical concern of government. And, of course, environmental issues are increasingly constraining new energy supply and utilization choices. Now, renewables, of course, offer a way to address both concerns -- energy security and environmental issues. And at DOE, obviously, that remains a very important part of our portfolio. But, then again, we also know that over a foreseeable timeframe, while we can see renewables growing substantially, they are unlikely to acquire a very significant percentage of our total electricity demands. So the issues of supply, of electricity in particular, and energy more generally, will be with us I think for a very, very long time, and will be shaped, to a large degree, by a whole set of externalities to which I wish to turn. In fact, this will be one of my themes in the end. I'll just say it right now. This idea of how not only the technology develops, but how externalities that affect technology introductions occur, is a very important issue and one that I believe even this community, with its very long time horizon, needs to pay attention to. Turning to that issue, for example, deregulation and privatization of electricity supply systems is taking place in many corners of the globe. In the U.S., in fact, we're going through two kinds of restructuring -- restructuring of the industry players in the market in response to and in anticipation of competition, as well as restructuring of the legal and regulatory rules of the game. In fact, if you all pay attention to this, you see in the newspapers very routinely the announcement these days of mergers and acquisitions of electricity, natural gas, and telecommunications companies, the shedding of generation assets, and new ventures in non-energy businesses."

Moniz said, "One story is that earlier this year the annual best performing utility award was given. I think the metric was a fairly simple one. It's basically the increase in the stock price over a five-year period. With that metric it was very interesting. The prize was won by a utility in Montana. This utility had sold all of its generating assets and laid fiber optic cable around the northwest. Now, this may seem somehow irrelevant to this, but these externalities are, in fact, very real. For example, today, those kinds of externalities provide an environment that is very discouraging to any large upfront capital investment in energy supply. This is a very relevant issue as one looks way down the road in terms of fusion. How the market is shaped is going to be very important for how technology is actually introduced. Deregulation, restructuring, is very important from the social point of view with benefits -- economic benefits -- but also benefits that are harder to predict along the lines of what has historically been the surprising new services and technologies introduced through deregulation. You all know about it in the context of telecommunications. But less well known, for example, airline deregulation, very much led directly to the development of companies like Federal Express, which revolutionized the way industry carries on much of its commerce. So as electricity is deregulated, we can expect, in still unknown ways, to find brand-new ways of serving the public. So this development is very important. But, again, it shapes the whole electricity environment in ways that very much influence new technology choices."

Moniz continued, "Another major externality already alluded to, which will shape electricity sector technology introduction, of course, is environmental constraints. That's environmental constraints at all length scales -- smog and particulates in urban environments, acid rain regionally, gas emission in terms of global concerns. The manner in which these imperatives, particularly the global warming imperative, will be implemented is still unclear today. Even in the absence today of formal binding international implementation mechanisms, we are seeing many businesses beginning to factor greenhouse gas emission considerations into their business plans because it's a good business decision. It serves customers' desires. This is a profoundly important development, and it promises to benefit various renewable energy technologies and nuclear technologies, though perhaps fission in the nearer term and fusion in the long run. And, again, regulatory choices are made all along the pathway. For example, our regulatory regime, based upon all source considerations, would have a major impact in terms of what technologies are introduced. These choices are being made all the time, and one of the messages that I want to give is recognizing that even though the time horizon for fusion as a major energy source is decades away, this debate is continuous and is critical as to how technology introduction is shaped in the future. So what I'm really doing is calling for your attention not only to the technology development but to be engaged in that debate that shapes the energy sector day by day, year by year, and decade by decade. In fact, in a whole different context, a way in which you see the dramatic impact of this kind of regulatory regime today. It is clear that things like combined heat and power technologies, potentially are applicable but, of course, today would be more associated with other technologies. These technologies exist. We can today have combined heat and power systems which are net 80 to 90 percent efficient. Why do we see so little? It is (because) the regulatory regime has acted, in fact, to impede introduction of such systems. So, again, these choices have huge impacts on what technology is actually introduced."

Moniz commented, "So with that as a background, it is very clear that, as we look down the road, what technologies will be selected by the marketplace, or marketplace-conditioned by these externalities, is very unknown. This, of course, leads at the Department to a need to maintain a very broad portfolio of technologies."

Moniz said, "As you all know, in 1997, the President's Committee of Advisors on Science and Technology, PCAST, put out I think a very good and very influential report looking at energy technologies. It suggested strongly an enhanced national R&D effort in response to what they deemed an inadequate national energy R&D investment strategy in relation to the challenge -- the challenge of addressing economics, energy security, and environmental challenges, as I said, at all length scales. In fact, PCAST recommended an increase over a five-year period of a billion dollars in the annual budget for applied energy technology R&D, with the largest near-term investment in their recommendation going to energy efficiency as the place where, on a decade time scale, one could imagine the largest impact, but also strongly arguing for increases in nuclear fission and nuclear fusion R&D. They recommended very strongly that we develop a portfolio approach to managing the energy R&D activities. That portfolio approach implies a breadth of investment, but it also implies analysis in terms of where are the major opportunities, the major gaps, the major balance between time scales for reward, the major balance between relatively incremental approaches, and some of the high-risk approaches that can have enormous benefit down the road. We have been pursuing exactly this approach."

Moniz said, "Well, in this discussion, obviously we should turn now to fusion and, reinforcing the earlier themes, given the unpredictability of what the externalities will be, the role of atmospheric emissions, for example, in how it constrains the marketplace. Given the uncertainty, there is no doubt, in our view, that within the fusion energy sciences program, which is a strong science program, we also must keep in view the issue of the long- term potentiality in terms of a major source, particularly of large base load electricity. You all know that the transition of the program from a goal-driven energy program to a research program focused on fusion's scientific and technological foundations, has been occurring. The program has largely completed that transition, and now has an increased breadth of concepts under investigation, and a greater emphasis on innovative concepts that may lead to more affordable development paths. We have the National Spherical Torus Experiment, the Innovative Concepts Grants Competition, increased funding for exploratory experiments -- 14, I believe, are now underway at universities and national labs. The DIII-D, NSTX, CMOD, national facilities, with experiments selected on the basis of scientific value through a merit-based process, Princeton becoming a national resource for the broader fusion community, and working with universities and other labs to coordinate programs in various areas. As part of the new structural orientation, the Department also assumes stewardship, I think very explicitly, for the field of plasma science, initiated the plasma science junior faculty development program, and, in partnership with NSF, a basic plasma science and engineering program. The substance of this transition has largely been the work of the fusion community, both through the formal Advisory Committee process and through various workshops, such as the one held at Snowmass that Chairman Sensenbrenner referred to. This has led to a much wider consensus of the program goals and objectives than existed earlier, and to a much better integration of different aspects of the program -- for example, the integration being discussed recently in the roadmapping process involving both MFE and IFE portions of the program. You also know that this has not been a painless process. Significant efforts have been terminated. But I believe, reinforcing what Chairman Sensenbrenner said, that the net result is now a program much better aligned with a number of realities -- congressional realities, funding realities, the energy picture realities, and the science realities. And as a result, the program genuinely is gathering more support. The very welcome increase in the budget to $250 million I believe is a strong statement that the program -- and I'm echoing what the Chairman said -- the program has gained the confidence of everybody I think in this town in terms of facing a difficult challenge, and in three years I think bringing along a community with a coherent view and one that is, in fact, quite attractive."