I've been asked to

give a very broad overview of what's going on in energy and that would be more like 20 hours than 20 minutes.
So me take as read all of the remarkable things going on in the conventional technologies that you
already know a lot about and particularly the fossil fuels and say a bit about some other things happening
that you might find less familiar and more interesting.

First of all let me use, as a brief theme, what to do about the oil problem and I have a break out session
on this later. But if you go to oilendgame.com you can download free, an independent pier reviewed study we
did with co-sponsorship by the office of the secretary of defense and the chief of naval research. It came out 14 months ago
and it's addressed to business and military leaders. In fact it's built around competitive strategy business cases for cars,
trucks, planes, oil, and military and it describes how to eliminate U.S. use of oil by sometime in the 2040's
and rejuvenate the economy, all led by business for profit. The thesis is really arrestingly simple and so far
nobody has argued with analysis. Rather than seeing U.S. oil use and oil imports continue to climb as they've done
since 1950, more or less, we can turn them around with redoubled efficiency of using oil at an average cost of twelve
dollars per saved barrels, that's in year 2000 dollars, and we can turn those curves steeply downward then by replacing
the other half of the oil with a combination of save natural-gas and advanced bio fuels costing an average of
$18 a barrel. 12 and 18 averages to 15. That's cheaper than the forecast price of $26 a barrel by
seventy billion dollars a year, twenty years from now, assuming as we do that all externalities' are worth
zero. I know zero is the wrong number by the way but it's a conservatively low number.

One of further option is to

turn the same natural gas into hydrogen which is more efficiently usable. I showed for illustration here in
gray a 10% slice of hydrogen, two of which would be sufficient to displace in the 20-30's the equivalent of all oil imports
and once you embark on that sort of substitution you are inexorably headed off oil altogether sometime in the 2040's
and we know that major substitutions and savings can happen because that's what happened back here when we last
paid attention. In the eight years from 1977 to 85, GDP grew 27%, oil use fell 17% oil
imports fell 50%. Oil imports from the Persian Gulf fell 87 percent and they would have been gone in one more year
if we had kept that up. So at that point we were cutting oil intensity of the economy by over 5% year, saving the equivalent of a
gulf every two and a half years. In fact, because the U.S. and others saved so much oil so fast it cut OPECS exports in half
and broke their pricing power for a decade because we turned out to be the Saudi Arabia mega barrels. We have more market
power than they do. Ours is on the demand side and we can save oil faster than they can conveniently sell more oil. We could
rerun that old play again a lot better with the newer technologies now available. The most important ones are
transport which uses 70 percent of the oil. But it turns out the efficiency of cars and heavy trucks and airplanes
can be roughly tripled with very attractive economics basically by improving platform physics, making the
vehicles light, with low drag, low rolling resistance and advance propulsion. So these are for illustration for
carbon fiber concept cars running back to 1991. Some of them have very interesting properties. For example, this diesel
hybrid carbon concept car from Opel can do 155 miles an hour and 94 miles per gallon, although not
simultaneously. And the surprise is that the ultra lighting that ends up saving have the
fuel does not add costs because it's paid for by simpler auto making and by a smaller propulsion system. I'll
say more about that the break out session but basically the whole ultra light design space is free. Therefore it's
possible to cut 53 percent of the weight out a standard, midsize SUV

that can take five adults in comfort and two cubic meters of cargo and haul a half tone up 44 percent grade and
do zero to sixty in eight point two seconds. The fuel cell version would get 114 miles a gallon equivalent.
Gasoline hybrid version with risk for acceleration would get 66 miles a gallon or 320 miles per gallon of
gasoline if you ran it on E85, 85 percent ethanol and yet despite the light weight of the car it
would actually be safer. The simulations say you could run it into a wall at 35 miles an hour with no damage to the passenger
compartment or you could run it head-on into a steel SUV twice it's weight doing 30 miles an hour and still be protected
from serious injury. That's because these material can absorb 6-12 times as much crash energy per kilo as steel and do some
where smoothly. The hybrid version of the complete virtual design of would have an extra
sticker prices of two and a half thousands bucks compared to the 18 1/2 mile a gallon steel version now on the market and that's a two year
paybacks at today's gasoline price.

The manufacturing I'll get into more in the break out but what might be interesting for you is the packaging.
When you have a car that weighs half as much as usual and has low drag and good tires, it takes only 1/3 the
normal power to make it go. So it can cruise on the highway on the same power to the wheels that a normal SUV uses
on a hot day to run the air conditioner. Therefore the hydrogen tanks for a 530 KM driving range,
normal range, you have three times smaller. Small enough to package well so there's plenty of room for people and cargo.
You don't need any breakthrough in storage technology and the fuel cell also gets three times smaller so it can
tolerate a three times higher price per kilowatt. So if you had an 80% experience curve, you would need 32 times less
cumulative production volume to reach that price point. That's a whole lot years. Therefore, whichever automakers go first
in ultra lighting will win the fuel cell race.

The materials, by the way to make this stuff out of are also making rapid progress.

A little firm called Fiber Forge has developed a digital device like an ink jet printer that can, under
CAD drawing control, deposited carbon and or other fibers in whatever positions, layers and orientations
you want mixed with thermoplastic to make, in this case, a carbon nylon plywood and this is from of one square
meter piece and since it's thermoplastic, if you then warm it up with heat lamps and put it in a press and squeeze it with a hot dye, you
end up getting the net shape you want. So here is a backpack frame which is rigid axially but very flexible this
way and this way just because of the orientation of the fibers. So it's easy this way to make parts who's strengths and
stiffness are tailored in directions to match the load paths.

And those materials, in a mature process at volume, a very attractive economically for auto making. Basically
you can get 80+% of the performance of handling up aerospace composites at a 1/5 the costs and with one minute cycle
times. If you use fancier materials, in this case a every extensive, high-temperature, ultra tough resin called
Peak with carbon fiber.

You can tell that plastics have changed since the graduate. You can get some quite remarkable
mechanical properties if you need them, for example, for a helmet.

What's happening on renewables. Well first of all costs continue to drop in execrably. There are some
wind farms up in the U.S. selling power at 2.9 cents a kilowatt hour. There are some going and in the last year or two
at 1 1/2 cents a kilowatt hour. That's including a production tax credit with a levelized value of .84 cents a kilowatt hour. Floatable
text, I just put, for illustration and I can see that Mr. Gates has eaten the label I put on it. Don't you love bugs.

Now this is a line for a floatable tank concentrator that's been invented recently in Australia. It starts
off at about seven cents a kilowatt hour and goes down below two at gigawatt volume because it's extremely simple.
Made of light weight molded plastic floating on a pond and rather than making a strong to withstand wind force,
the inventor, Phil Collins, simply set it up so that if the wind gets really strong and it's in danger of breaking, it
simply submerges under water and comes back up when the wind stops blowing. Much simpler approach but
whether it's through that or quantum dots. A lot of folks think that we are headed toward nickel power from floatable
ticks some time in this decade. Everything else is getting cheaper to and it's interesting that these cost
comparisons do not count the conclusions in our economists book of the year, smallest profitable, three years ago
which you can find at smallestprofitable.org. Namely there are 200 odd hidden economic benefits of making electrical
resources the right size. These come from financial economic, electrical engineering and elsewhere and together they
typically increase the economic value of decentralized generators by about a factor 10 which is enough to
flip practically any investment decision. It doesn't show in these graphs. It doesn't show in what I'm about to