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Keynote Speaker
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John Doggett delivered the keynote |
John Doggett
Senior Lecturer, McCombs School of Business,
University of Texas at Austin
"My friends, my message is very simple: we either believe in America, or we give up." - John Doggett, keynote speaker at Basin Electric's annual meeting, Nov. 4, 2009
Highlighting the start of the annual meeting was John Doggett, senior lecturer at the McCombs School of Business, University of Texas at Austin. He believes that a cap-and-trade system for managing carbon dioxide emissions is not feasible. “I am completely opposed to the introduction of a cap-and-trade system in the United States. It simply won’t work,” he said. “There is no way to monitor and audit emissions on a 24-hour basis without creating a police state.”
2009 annual meeting speech excerpts
“... If you believe in cap-and-trade, it’s because you do not believe in the inventive, creative entrepreneurial spirit of the American people. You believe that a government program would do a better job of coming up with ways to clean the environment than Americans who say, 'I want to try to come up with some better technology.'"
Europe's cap-and-trade doesn't work
Doggett said a cap-and-trade system didn’t work in Europe. “Energy prices skyrocketed and many energy intensive businesses in Europe closed their doors,” he said. “What the Europeans somehow didn’t factor into their plan was the fact that these businesses just didn’t die, they were moved to China, India and other countries that were excited to have economic growth and
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If China doesn’t commit to reducing carbon emissions, Doggett said there’s nothing we can do in the West that will have much impact on reducing global warming. “Because if you haven’t figured it out
by now, there are more Chinese than Americans and Europeans combined. And their economy is growing at a rapid rate while ours are stagnant at best.”
Doggett said that technologies can be and are being developed to capture carbon emissions. “We must develop new technologies that will allow the economies of the world to grow so that more and more people can have jobs that will raise them out of poverty while at the same time reducing the negative impact that we have on the environment,” he said.
Doggett said scientists all over the world are developing new technologies that turn pond scum (algae) into oil, ocean waves and the tides into electricity, and the temperature differential between the surface and depths of the ocean and the earth into a constant source of carbon-free energy.
“My message is simple,” Doggett said. “Politicians must not be allowed to wreck our economy just because they don’t have faith in the creative abilities of Americans,” he said. “Let me be clear: government does have a role in this. That role is to provide tax credits and research grants that speed the process of innovation. I believe in the carrot, not the stick. I believe in America’s creative genius, not in a government-mandated cap-and-trade dictatorship.”
Fossil-free Fridays ... How do you like them apples?
“Fifty percent of all the energy in this country is generated by coal, so if we’re going to have a tee shirt that tells the truth, it should be every other day is a fossil-free day. How do you like them apples?” {Doggett was referencing a tee shirt shown by CEO/General Manager Ron Harper depicting "Fossil Free Fridays" - a tongue-in-cheek proposal to shut down all coal-fired generation in the U.S. every Friday)
A great story to tell
“I’ve got to tell you guys, you’ve {Basin Electric} got a lot to be proud of and instead of being on the defensive. … I mean, how can people responsible for half of the energy in the U.S. be on the defensive about anything? I don’t understand that. You have a great story to tell. I went up to the {Great Plains Synfuels Plant} gasification plant: blown away by it.
“… I’m going to share some things with you that are going to give you a sense that we are, indeed, in a climate of change. It’s not just climate change of greenhouse gases or global warming.”
Implications of America winning the Cold War
…“It’s hard to remember now, something called the Cold War where it’s us against the Communists. There was a time on this planet where 40 percent of all humans lived in countries governed by Communists. And it was a war; they called it cold, but a lot of my friends in Vietnam died in that Cold War and a lot of my parents’ friends died in Korea in that Cold War. But, we told the world that our way of life was superior to the Communists. We said that again and again, and we put our money and our troops and blood behind that . Fortunately, CNN and Hollywood helped because they were able to show people what it looked like to live in America and they showed a vision that was very attractive.
“I remember talking to some folks who were living in Poland. They talked about being in Poland when the Soviets were running it. Soviets had absolutely no concern about the environment. … they would spend zero on the environment; and they talked about coming out in the morning and having not to dust away the snow from their car, but the coal ash from their car, sometimes a couple of inches a day. …
“But we told the world we had a better way and then -- one day -- we won the war. If you remember … the celebration of 20 years of the fall of the Berlin Wall is happening next week. If you remember that time, it was a time of incredible joy. And then … on Christmas Day for a regime that did not believe in God, on Christmas Day, the Soviet Union ceased to exist in 1991. And we had gotten what we wanted to, the only minor problem was, winning the Cold War resulted in everybody, virtually everybody saying: 'what we take for granted here is really cool and we want it." So what I’m going to share with you is the implications of that and what it means for the debate on climate change, on health care, on competition, on everything we do as Americans because it’s really important that you understand it. Because -- once you understand it -- and you share that with your Congressional delegation, I think the conversation is going to change significantly.”
Four countries will become the economic drivers of the 21st century
“We’re in the midst of strategic change and a lot of Americans aren’t aware why it is. So: let’s talk about it. In 2001, as the Internet bubble was collapsing, as the stock market was collapsing, kind of sounds familiar? Right? As people were saying, 'I can’t afford to retire,' Goldman Sachs said, “Four countries were going to be the economic drivers of the 21st century,’ … And they said those four countries are going to be Brazil, Russia, India and China.”
'You've got to go where the market is'
“Every month in India and China, somewhere between 17 to 25 million people sign up for cell phone service for the first time, every single month of the year. If you are a cell phone manufacturer, guess where you have to be doing business? If you’re not there, you’re worse than square, you’re out of business. That’s capitalism. You got to go where the market is, so when we have a conversation about American companies taking jobs overseas, … there’s nothing nasty about dealing with reality.
“The reality is that half our power comes from coal. You don’t like it; we’re going to turn the lights off every other day.
"The reality is if you’re in the cell phone business or if you’re in the PC business, there’s no market like this because as big as this 600 almost 700 million cell phone subscribers are, we’re talking about countries with two and a half billion people. So let’s give it 600 million. That means that 1.9 billion Indians and Chinese don’t have cell phones. In Finland the penetration is 101 percent, they have more than one cell phone. That means that’s still a massive market and if you’re going to play in this game, if you’re going to build cell phones, you have to be there.
“This {photo} is a picture I took in Shanghai couple of years ago. This is Pudong. Pudong means the new side of the river. The river is the Huangpu River. The old side is old colonial era style building and when this was built up, the Chinese Government said we want Pudong to be become financial capitol of the world to supplant Wall Street and the city of London and at the time people said ‘nobody can touch Wall Street.’ We’re not saying that right now. But the people said 'no, that is not going to happen.' What’s important is the vision, but what’s even more important is this --please fasten your seat belts: {photos} at the top Pudong 1990, at the bottom, Pudong 1999. This was done in nine years. How long has it taken you … to get a permit to build a generation plant? We are dealing with economies that are growing at a rate that we’ve never seen and {they} are building things, which are first class, I will tell you: these are first-class buildings.
America is no longer the largest polluter in the world
“The good news is: we’re no longer No. 1 in something that we don’t want to be No. 1 in. We’re no longer the largest polluter in the world, which really irritates the Europeans. They like to say, ‘you Americans, you know: you screw everything up.’ I said, ‘Talk to the Chinese.’ In 2008 the Chinese passed us as the largest polluters…. According to the International Energy Agency (IEA) by 2010 -- next year -- the Chinese will be the largest consumer of energy in the world. But … IEA says that around the next 25 to 30 years they will build more new generating capacity, distribution and transmission capacity -- new -- than we have in the United States today. New! And they say it’s going to cost them about $3.8 trillion to do that. If you know any people who are in the business of making products for the electrical grid, guess what, there’s one place they should be selling.”
“But for us as entrepreneurs, for people who say we believe in capitalism, when you have countries that have to spend trillions of dollars to be able to continue to grow their economy, if we can’t figure out a way to sell them products and services that they need, then we should be ashamed of ourselves.
“Another way to look at what’s going on, … In 2005 China was using a third less energy than us. By 2010, they will be using more than we are. Think about how hard it is to build power plants here. This is the Chinese experience in building power plants. …. "In 2006 they added more than 100,000 megawatts. Now … what does that mean? It meant they were bringing on line two new coal-fired plants a week, two a week. They slowed down some, now it’s only one new coal-fired plant a week. How long has it taken you, Ron (Harper), to bring your plant on line and you got people saying we shouldn’t do that. … Well, guess what? Their new plants are more efficient than their old plants, and they are cleaner than their old plants, but they are not as clean as anything that I saw here at Basin and they do not have a Sierra Club. They have people that hate air pollution, but they do not have people who say we’re going to shut down coal. As we say in Texas, 'that dog ain’t hunting. '
Be aggressive in protecting your power source: coal
“And so, my second message for you is this: you have to be aggressive in protecting your power source, coal, right now and investing in ways to make coal cleaner for a very simple reason, the Chinese are going to continue to grow their economy with coal as the number one energy source and they’re not going to agree to do any of the things that people are trying to make us do. And so if we want to see how it is to compete with both our hands tied behind our back and our legs strapped together, we can try to do that.
“But Goldman {Sachs} was right, and I’m sharing it with you: we’re dealing with competitors who have bought into the American way of life and capitalism and the free market and they’re not going to have those constraints. And if we want to compete, we’re going to have to compete in the way the game is played: by innovating, because China is a coal capitol. We’re at 50 percent, they are at 80 percent. … They use more coal than the United States, Europe and Japan combined and it’s going to continue. But the Chinese have a real air pollution problem and they are starting to deal with it by investing a lot of different technologies including ultra-critical and super critical coal plants, which are the most efficient coal plants in the world and they are, by the next year, going to be the leading manufacturer or constructor of these new coal plant technologies in the world….”
“But there’s a price and with that price comes opportunity. We have a conversation about climate change and that conversation in this country is all about us and maybe the Europeans. I showed you slides with data from the CIA that says 40 percent of all the people on the planet live in Brazil, Russia, India and China. Forget Russia and Brazil, 40 percent of all the people in the world live in two countries, India and China.
"And so what they do is really important and if we’re going to have a conversation about the climate or about cap-and-trade or carbon tax, about doing something about greenhouse gases or global warming, that conversation has to include them because people in China hate dirty air -- it's the second largest source of protest in that country. The first one is {the Chinese} government taking land and not paying people properly for it.…
China's dirty air doesn't stay in China
“My wife went back for Chinese New Year a couple of years ago which is late January-early February. Talked to her friends from high school and college, and she said every one of her friends who had children said every one of their kids had respiratory problems because of the dirty air, 100 percent. …
"The Chinese Government is learning that if they are going to continue to grow their economy -- as they grow their economy -- and as more and more people become members of the middle class, like the United States, middle class people don’t like this stuff and they are speaking out. … But here’s what’s really important for us to understand in this conversation about climate change. This air, this dirty air, does not stay in China. This is a picture of the western part of the United States with a quote from the Wall Street Journal a couple of years ago. On some days almost a third of the air over LA and San Francisco can be traced to directly to Asia. With it comes up to three quarters of the black carbon particulate pollution that reaches the West Coast. That was two years ago.
“What does this picture look like, if Goldman (Sachs) is right and the Chinese economy is four times this large and the Indian is 10 times this large and we have not engaged them in the conversation about what to do about the climate? We can bankrupt Basin (Electric) and it won’t make a beans bit of difference -- and that’s not part of the conversation. It has to be part of the conversation. ...
“Now, what do we know? There’s going to be this meeting in December in Copenhagen. We’ve told the Chinese and the Indians that they need to sign on (climate proposals), and they said, ‘No, nix, not going to do it; we’ll consider signing in a decade, but we have growth to deal with and, anyway, you guys are responsible for screwing everything up. It’s not us, so we’re going to do what we want to do because although we are now the largest polluters in the world, we’re responsible for 25 percent of all greenhouse gases, just those two countries and on a per capita basis, on a person basis, we’re still much cleaner than you are.’ ...
6.8 billion people have had an impact
With the projected growth rate of CO2 from the Peoples Republic of China, Doggett said we can have this legislation and it can make us carbon neutral, but if the Chinese don’t play it makes no difference except it’s just bankrupted company after company. “We need to have this conversation.”
“Now, some people say, ’do you believe in global warming?’ I said, ‘Well, do I believe the Ice Age came and went. Yeah -- climate change happens as part of God’s great plan for this earth and the universe, but when the Ice Age came and went, it wasn’t because we were driving Hummers.’ On the other hand, Ron {Harper} talked about stewardship. In 1820 there were a billion people on the planet. Today. there are 6.8 billion people on the planet. Nobody who is intelligent can say that the addition of 5.8 billion people, plus the Industrial Age, plus hydrocarbons, plus all the things we do has had no impact. We’ve had an impact. …
There is no 'government money' -- it's all our money
“I’m opposed to cap-and-trade for a number of reasons. One, because when people say it’s not a tax, they are lying. It’s like saying, 'it’s the government’s money.' There is no government money: it’s all our money and the only question is which government gets it from us. You can’t have any money that government has had unless something happens and that is economic activity that’s profitable. If everybody loses money; there’s nothing to tax. So, it is a tax … and it’s based on the assumption that the only way to get Americans to do things that are creative is they take a big stick and say, 'we’re going to beat your head in.' That is not the American way, we've seen that tried.
"The Soviets tried that. The built something called the Berlin Wall. It didn’t work and it won’t work and I’m pretty hard minded about it. I called the people that believe cap-and-trade is the solution, the 21st century Luddites. Remember the Luddites? They were folks in Britain who were opposed to the Industrial Revolution, and so they went in and they broke up weaving mills.
If you believe in cap and trade, it’s because you do not believe in the inventive, creative entrepreneurial spirit of the American people. You believe that a government program would do a better job of coming up with ways to clean the environment than Americans who say, I want to try to come up with some better technology.
"Reality is: the data shows that it doesn’t work. And, where is the data? The data comes from Europe. You look at what the EU {European Union} did when they started cap-and- trade: (a) they realized it was very difficult to cover all companies, so they only covered 10,000 largest ones, which meant that was only 45 percent of the emissions. Even so, in Germany, trying to comply with cap-and-trade in Europe raised the price electricity by 25 percent in just two years. That’s the European experience and some of the largest, most efficient high-tech companies that use a lot of energy found that it could no longer make ends meet in Europe and so where did they go? China, India, Vietnam -- countries that have said, 'we’re not signing anything.'
“This climate change cap-and-trade system the Europeans passed was supposed to reduce green house gas emissions. By 2007 they measured and they said, 'green house gas emissions have gone up by 1.1 percent.' Now, we have a choice, we can talk politics -- or we can talk facts. If we talk politics, then this is, of course, what we need to do. That’s what Sen. Boxer says from the state I used to live in {California}. ...
What Europeans experienced did not work
"Or, we can talk facts and look at what the Europeans experienced. What the Europeans experienced is that it did not work because most humans, wherever they are, if you give them a choice between inventive and creative, or saying 'if you don’t do it, I’m going to beat the crap out of you,' -- guess what happens? It’s kind of hard to be creative when somebody is threatening you, especially when we have legislation where it’s already been stated that if we get cap and trade we’re going to use 25 percent of the money to do what, reduce the deficit, or as Speaker Pelosi said, ‘If I really get my wish, we’ll use all the money from cap-and- trade to pay for nationalizing health care.’ Well, paying on the deficit is important, and making sure that people when they get sick can be taken care of is important, but {referring to Speaker Pelosi} don’t do that and, at the same time, claim you’re doing something about the environment.
“You can’t do both, and that’s what’s going on. So, Ron {Harper}: don’t be bashful. (This) doesn’t make any sense. Get a new tee shirt {that says} 'Every other day: blackout day, no energy day, be in the dark day" -- brought to you by your Congress, And, if people start to understand, don’t be shy. If they start to understand what they’re {Congress} talking about, if they start to understand that what they {Congress} are talking about is cutting off half of our energy or increasing energy prices by 25-30-40-50 percent, they’ll say, "This doesn’t make any sense.'”
We have to believe in us
“When we had to invent a nuclear bomb to save us from the Nazi’s and the Japanese, we didn’t use a stick. And when JFK said 'we're going to send a man to the moon in a decade,' we didn’t use cap-and-trade. We said 'we’re going to free the American spirit, we’re going to free the America’s sense of entrepreneurship and invention.' We’re going to say: here’s a goal. Let’s go after this goal. Here are the rewards if we make that goal, Now, get after it. If we used cap-and-trade, we’d still be waiting -- or speaking German. ...
“We have to believe in us, and we have to get our legislators to believe in us. And, we have to celebrate who we are and what we do if we’re going to have any chance of solving this problem. The good news that stuff is happening in spite of what’s going on in Washington, DC -- that’s going to result in some solutions. One of them is what you’re doing right now, you got a great story to tell, I’ll tell you, most Americans have no idea that you have this plant (the Great Plains Synfuels Plant) up there. We need to change that, it’s a great story to tell.
“But here’s what I want to say: There are solutions, but we are having competition. The Chinese have decided that they have to clean their air and their water and, in doing that, they have decided they want to be world-class in wind energy. They’re going to pass us this year, but that’s not enough for them. They’re building wind farms that are larger than anything anybody has ever seen in the world, but that’s not enough for them. … Their target as of July of this year is 30,000 megawatts from wind for next year. This is one of their targets for wind, and they’re building turbines faster than they can build transmission lines, but again, they can build transmission line a lot faster than us because they don’t have permitting issues.
'We either believe in America, or we give up'
“But, why is this important? … Earlier this week, Chinese wind companies and banks signed a contract to build a $1.5 billion wind park in Texas, financed by Chinese with wind turbines produced by a Chinese company that’s been in the wind turbine business for one year. My friends, my message is very simple. We either believe in America or we give up. Either we believe in what we told the world or give up. We either compete because we are capitalists, because we’re entrepreneurs, because we believe in innovation and we think we compete better than anybody else or we give up, and I’m not ready to give up.”
About John Doggett
John Doggett jointed the faculty of the University of Texas at Austin (UT) as an Adjunct Assistant Professor of Management in 1989. He became a Senior Lecturer in 2000. His research and teaching interests include global competition, entrepreneurship, sustainability and energy with a focus on China and India. He is also a Senior Research Fellow at UT’s IC² Institute and Co-Founder of UT’s International Idea to Product Competition™. From 2000 to 2001, he served as the Director of the McCombs Executive MBA program at DFW.
Doggett led MBAs on business trips to China for the past five years and will lead MBAs to India and China in 2010. Since 1999, Doggett has spent part of each summer teaching workshops on global competition and entrepreneurship to students in one or more of the following countries: Austria, China (Hong Kong), Japan, Korea, Malaysia, Mexico, Singapore, Taiwan and Thailand.
Doggett has received teaching awards from students in UT’s full time MBA (1998, 2004 & 2008), Executive MBA (2009), Evening MBA (2007), the DFW MBA (2004) and Executive Engineering Management Master’s Programs (2002). He was also selected by Business 2.0 as one of the top professors at McCombs and one of the nine people to know if you want to start a business in Austin.
Doggett has extensive experience consulting in Asia, Europe and the US with companies of all sizes, including Fortune 500 firms. He is a member of the board of directors of Affinegy, Inc. (an Austin software company) and Lehr, Inc., (a Los Angeles manufacturer of propane powered lawn and garden equipment).
Doggett is working on a book with Professor Orlando Kelm and his wife called “Chinese Working with Americans” and a second book on global competition and energy called “Don’t Blink.”
From 1996-1998, Doggett was also the host of the John Doggett Show on KVET-AM. During this time he was selected as one of the 100 most influential talk show hosts by Talkers Magazine. In 1994, Doggett became a co-founder and Chief Operating Officer of a Spanish Language Sports Televion programming company. His firm signed a three-year exclusive contract with the National Football League and aired programs in 45 cities in the US, Northern Mexico and the Caribbean. In 1983 Doggett created an international management consulting firm that helped clients in 25 countries develop market-based economic development programs over the next ten years. From 1981 to 1983, Doggett was a management consultant with McKinsey & Company in the United States and Scandinavia. From 1975 to 1979, Doggett was Director of the Legal Services Department of the State Bar of California. From 1972 to 1974, he was a legal services litigator. Doggett is admitted to the practice of law in Connecticut, California and the District of Columbia.
Doggett received his MBA from Harvard, his law degree from Yale and his B.A. from Claremont Men’s College. He is married to Haiping Tang, the Dell, Inc. planner for all exclusive design laptop products for Best Buy world wide.
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