Thursday, September 23, 2010

General Electric gets Specific

It's troubling enough that America is mismanaging energy. But things are far worse in other parts of the world, mainly among the poorest nations. Cheap, available energy is a key element for lifting nations out of poverty. Without cheap and abundant energy, the poor will burn every piece of wood that can be found. Deforestation is the result.

Despite having enormous oil wealth, Nigeria has an extreme poverty problem. About half its population of 155 million live in homes without electricity. Almost as many as still waiting for indoor plumbing.

Cheap energy changes everything for the better. But even though Nigeria has the oil wealth to pay the bills, the country remains a poverty-stricken backwater. What's the answer? The same as here in the US -- better and more responsive government.

GE CEO Says U.S. Is Falling Behind in Energy

General Electric Co. Chief Executive Jeff Immelt said the lack of a U.S. energy policy and the "stupid" current structure of the industry are causing the nation to fall behind in new energy fields.

In sharply worded comments at an energy event in Washington on Thursday, Mr. Immelt praised China's energy policy and criticized the U.S.'s stalled energy reforms.

"The rest of the world is moving 10 times faster than we are," said Mr. Immelt in a speech at the Gridwise Global Forum. "That is going to mean fewer jobs, less energy security and a lot of other things."

The head of the Fairfield, Conn., conglomerate said China is moving faster to develop clean technologies such as nuclear power, electric vehicles and wind power than the U.S. He also said China has the right mix of a big local market, innovation in technology, a low-cost supply chain and national policy support. The country's State Grid utility, he said, is larger than nearly all U.S. utilities combined.

"This [the U.S.] is a great country," he said. "But, you know, we have to have an energy policy. This is just stupid what we have today."

Power generation, including wind and gas turbines, generators and nuclear energy, is a big business for GE, which also sells products aimed at making energy use more efficient.

Mr. Immelt criticized the current energy regulatory system in the U.S.—split between federal and state authorities—as "a relic of 1860 or something" and said "it has fundamentally no basis in the modern world." He said countries such as Canada, Australia and China have much simpler regulatory structures for energy and are moving more quickly.

The U.S. must decide, he said, if it is serious about updating the 100-year-old "antiquated grid" and whether the much-talked-about "smart grid" is "a hobby shop or a real business."

Mr. Immelt repeatedly talked about the nuclear power industry and how the U.S. has failed to maintain and expand its nuclear industry. "There should be a nuclear renaissance in this country," he said. "The nuclear industry is here because government supported it in the United States. This notion that government is not a catalyst in this industry has no basis in fact."

He joked that the U.S. nuclear industry's "most important output these days is press releases." He said most Americans probably don't realize the U.S. is building only one nuclear power plant, and at a slow pace, while the rest of the world is building nearly 50.

Mr. Immelt also said most Americans don't realize how slowly the U.S. is moving on electric vehicles, clean coal plants and other technologies. "That's kind of the state of play," he said.

Circumstances outside Americans' control could easily send oil back to $150 a barrel, the CEO said. "We would have done nothing in the last three years to prepare ourselves for this."

Mr. Immelt said GE in the past aimed to produce only the "quality, expensive, high end" products to sell around the world, but that strategy is changing in nearly every product, from wind turbines to health scanners for sale in rural and urban areas of both emerging and developed markets.

"Now, I want to occupy every corner of an industry. I want to have the value product all the way up to the high-end product," he said. "We don't want to give any space to a competitor" from places like China and India.

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