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Office of the Press Secretary

For Immediate Release June 3, 1999
                           PRESS BRIEFING BY

                           The Briefing Room

1:20 P.M. EDT

MR. TOIV: Good afternoon, everybody. As you all know, the President has signed -- maybe you don't know that he signed it already, but he has and we will distribute it shortly -- an executive order mandating additional energy savings, energy conservation, in the federal government. And we have that and related announcements to make, and here to talk about it is the President's Coordinator for Climate Change here in the White House, Todd Stern. And he's going to brief you on that.

Also here to answer questions are Randall Yim, who is Deputy Under Secretary of Defense for Installations; and Dan Reicher, who is Assistant Secretary of Energy for Energy Efficiency and Renewable Energy. And here's Todd.

MR. STERN: Hi. The President has two related announcements today on energy efficiency and climate change which he is going to be making in the Rose Garden following the Cabinet meeting that's starting in a few minutes. The first is that he is issuing a new executive order on energy efficiency in federal buildings. The order will essentially do three things -- first it sets tough new goals for energy efficiency and greenhouse gas reductions in federal facilities between now and 2010. By meeting these goals we can save taxpayers something in the order of $750 million a year, and reduce 2.4 million metric tons of greenhouse gases, which is roughly equivalent to about 1.7 million cars being taken off the road.

Second, the order directs agencies to use a variety of cost-effective tools and strategies to improve their energy use and reduce greenhouse gases.

And third, it puts in place a number of means and steps to enhance agency accountability. These include agency scorecards -- the Deputy Director of OMB, for management, is going to have an oversight role, together with DOE. The President and his Management Council is going to be involved in monitoring progress. There are going to be energy management teams in each of the agencies, and the like.

The President's also going to be announcing, as a kind of prime example of what can be done in this regard if you use the right tools, the largest ever -- what's called energy saving performance contract, which DOD is going to be awarding later this month. It's a contract to upgrade energy performance at something over 800 buildings at five military installations in the Washington, D.C., area. And this is projected to save over $200 million during the life of that contract, and to reduce greenhouse gases by about 25 percent.

And this is a particularly interesting kind of mechanism because it allows agencies to do these upgrades at no cost at all to the agency, no up-front cost. The contractor pays all the up-front costs, and then in turn gets paid out of energy cost reductions. So it's a very good deal for the federal government; and part of the mission of this order is to direct agencies to do a lot more of this kind of thing.

The President, as you all know, is a firm believer in technology and in the capacity for this country to make significant improvements in energy and reductions in greenhouse gases in a very cost-effective manner -- and a firm believer in the notion the federal government should be out front as a leader. These actions today are designed to underscore those commitments.

So I'll stop there and take any questions.

Q It's been probably a couple of years since the President lamented the fact that they still have what he called incandescent bulbs in the White House. Do you think we're going to get them, finally, here?

MR. STERN: There have been -- I don't know what the number of bulbs changed is in the White House. I know there's been a fair number. I understand that the energy savings in the White House to date is something in the order of $180,000 annually; so the White House has made significant improvements. But you're quite right; there's more to do and the White House and the Executive Office of the President is covered by this executive order and we will be making further improvements.

Q How would you rate current chances for passage of the global climate change treaty?

MR. STERN: In the Senate, you mean?

Q In the Senate as well as global.

MR. STERN: Well, the -- we are not, as the President's made clear, intending to submit the treaty for Senate ratification until we have a greater level, meaningful level of participation from developing countries, which we don't have yet.

The negotiations are going forward on a number of fronts. Indeed, there's an international meeting going on this week and next week, at a sort of middle level, in Bonn. And that meeting is focusing on a number of the outstanding issues, which -- where there needs to be more flesh put on the bones of what was agreed to in Kyoto -- for example, international emissions trading, compliance, other of the market-based mechanisms that were part of the treaty. So those discussions are going forward at a fairly intense pace diplomatically.

The Buenos Aires meeting last year in November set the time frame for those kinds of discussions to conclude in a two-year period, so that would be -- these big international meetings are referred to as conferences of the parties, so that was -- last year was number -- the Buenos Aires meeting was number four, and so that the idea was to finish most of these issues by what's referred to as COP 6, which would be the end of 2000, early 2001.

The developing country piece is the toughest nut, and there, we have a lot of work to do. There was progress made at Buenos Aires -- Argentina, Kazakhstan both announced for the first time, first among any developing countries, that they were prepared to take on an emissions reduction target in the manner that industrialized countries have done. But -- I think that's a very good start, but there's a lot of other countries to go. We're working hard at it, but it's going to take some time.

Q Have the recent tensions with China, has that complicated things? I mean, they're obviously a big factor in that, aren't they?

MR. STERN: I don't think specifically. There's a long way to go yet, I think, with respect to bringing the Chinese on board with respect to taking the kind of action that we'd like to see them take with regard to greenhouse gases.

We have had a number of discussions at all kinds of different levels with the Chinese over the last year, and to the extent that recent developments tend to postpone dialogue, that's obviously not helpful. But we were not in any kind of imminent breakthrough point with the Chinese when this came on, so I don't think there's going to be that kind of a direct impact.

Q Explain on the executive order -- I understand it creates a new reduction target of 35 percent compared to '85 levels by 2010. What aspects of the executive order would take effect in the next year while this administration is still in office?

MR. STERN: Well, all of them, really, because you can't simply wait until right before 2010 to meet a goal like that. We have reduced right now I think in the order of 17 percent so far below the 1985 levels, which that's a base period that originally came out of the Energy Policy Act.

So action's got to be going on in a very concerted way year by year in order to sustain a trajectory that can get to 35 percent, so this is a here and now, today and tomorrow executive order; there's no delay contemplated.

Q A lot of environmentalists say that despite what regular progress has been made, the government need to invoke tougher measures in order to get down to the Kyoto limits. Does the administration have any plans to further any legislation between now and the end of this term?

MR. STERN: A couple of answers to that. First of all, we have made it very clear that we are not putting in place a plan to meet the Kyoto target before we get the Kyoto protocol ratified. And that has always been our position and it's certainly a position that our friends on Capitol Hill justifiably feel strongly about.

At the same time, there's a whole lot that we're doing with respect to our domestic agenda, generally on actions that are very much in line with the kinds of energy efficiency and renewable energy activities that have been going on for years and long before Kyoto. I mean, our budget for our renewables and energy efficiency in the FY'99 cycle was increased by 25 percent over the previous year. We have a big increase that we have asked for this year. And again, that goes across a gamut of solar and biomass and energy efficiency and the Partnership for a New Generation of Vehicles and the Partnership for Advanced Technologies in Housing and a whole slew of activities in that regard.

We are very interested -- there's actually a fair amount of activity on the Hill right now, Senators Chafee and Lieberman and Mack have legislation, the idea behind which we are very supportive of, to give companies credit that they can bank, in effect, against the day when there would be an ultimate greenhouse gas regime, so that if they take action early, they take action now and they reduce their emissions, they can in effect put that in the bank and, when the day comes, when there's an emissions trading system, they would have credits that they could actually get money for. We think that's a great idea.

Senator Lugar has legislation to try to aggressively push forward on the bioenergy front, bioenergy and products that can be made from bioenergy, which we think is an area of enormous potential, which we have sunk a lot of our own money into, and are intending to do more on. And we have a tax package that goes to housing, cars, major appliances, and renewable energy, including bioenergy. That's a $3.6 billion package over five years, which, I would anticipate, would be introduced pretty soon on the Hill.

Q While the administration's been very clear in saying that they're not going to -- that it's not going to implement the Kyoto pact without Senate ratification, this order does, in effect, commit the executive branch to meeting the Kyoto pact, correct?

MR. STERN: No, I wouldn't say that.

Q This 30 percent below 1991.

MR. STERN: Well, yes, but let's go back, a little history. The new order sets a goal of 35 percent energy efficiency reduction below '85 by 2010, but that's -- this supersedes an order from 1994 which set a goal of 30 percent. So --

Q What's the original goal?

MR. STERN: Thirty, yes. So Kyoto was not a glimmer in anybody's eye yet, in 1994, when the federal government was actively engaged in trying to promote just exactly the same kinds of --

Q But it's a de facto executive branch meeting the Kyoto --

MR. STERN: My point is completely independent of the Kyoto treaty. We were doing this and we will continue to do this. If we did this, would we as a federal government be below the level that the country as a whole is supposed to meet in Kyoto? Yes, absolutely, we would be.

Q Credits to trade? (Laughter.)

MR. STERN: The only way to make money.

Q Just in general, if the administration sees the wisdom of using taxes to act on teen smoking why doesn't it see the same wisdom in terms of gasoline prices? What is it, fundamentally, about the Untied States that it can't support the kind of tax structure on gasoline products that -- in terms of portion and pricing that the other industrialized countries can do?

MR. STERN: Well, at the cosmic level of that question, I'll pass. (Laughter.) Why the United States -- the public is not more supportive. But, look, there are different ways to go about trying to achieve reductions. What the President laid out in his program at the end of 1997 was a multipart plan that starts with a lot of these kinds of win-win activities -- R&D and so forth, that we're talking about now, but which leads toward, at the period more toward 2008, to a national system of putting a cap on the amount of greenhouse gases that can be emitted, and then a trading system very much along the lines -- at a larger level, but very much along the lines of what we've done on acid rain and sulphur dioxide, which has worked extraordinarily well, produced reductions beyond what we needed at a lower cost than was projected.

So there's different way to skin the cat. We think that going the route of emissions trading is a better way to go, I think both from a substantive standpoint and certainly given political realities with respect to the general resistance to taxes.

Q This is $219 million savings over the life --


Q How much is the Pentagon spending total on energy? Out of how much per year?

UNDER SECRETARY YIM: We spend over $6 billion a year --

Q Yes, for these five facilities --

UNDER SECRETARY YIM: I cannot break it down specifically just to these five facilities on that. The parameters of this contract -- it's an 18-year contract; we don't have up-front costs on it. The private sector capital investment that we anticipate is about $70 million -- $69 million-$70 million . We're going to capture that in the first three years of the contract, so that we can reap the savings more quickly -- we're frontloading this. We anticipate about $219 million savings over the life of the contract. So it is very much in our favor.

Q So you have to know how much you're spending right now in order to calculate the savings?

UNDER SECRETARY YIM: I'm sorry, I just don't have it right off the top of my head. I'm sure I can get it to you.

Q Was this contract competitively bid?

UNDER SECRETARY YIM: Yes, it was. We had the Defense Energy Support Center use a competitive process to have companies come in, audit about these 800-plus buildings that we have, take a look at that so that it was an intelligent bid. And we were confident then as a result of the process that the savings that we're going to capture are real.

Q How many other companies tried to bid --

UNDER SECRETARY YIM: I'm not sure how many people responded -- three total.

THE PRESS: Thank you.

END 1:45 P.M. EDT