Dan [Doctoroff, New York City Deputy Mayor], thanks for the gracious introduction, and Mayors and other distinguished guests, welcome. I'll be deliberately brief in this opening to save all the time we can for what we anticipate will be a robust panel and question/answer session both among ourselves and with this nice audience.

I'll begin with about fifteen minutes of prepared remarks to set the stage for our panel. I’ll also have some up front questions for our panelists and then we’ll move to questions and comments from all of you.

We're here in New York and right in the wake of Mayor Bloomberg's PlaNYC report. So it makes sense and I hope you concur that I focus on New York as an example, and then we'll hear about Toronto and Chicago and Citigroup's worldwide footprint. I'm also going to leave the climate change debate to others. In no way does this reflect the panel's views, to the contrary we believe decisively in the science and that it's time for urgent action now.

First, the briefest words about United Technologies. We’re about $50 billion in revenues and build aircraft jet engines (Pratt & Whitney), helicopters (Sikorsky), elevators (Otis), heating and air conditioning systems (Carrier), fire protection and security systems, aircraft and space systems, and even the space suits for the American space program. Finally, we build hydrogen powered fuel cells and a line of on-site co-gen products of particular interest today.

The common denominator of every single thing we do is to convert energy to useful work, whether elevators or air conditioning or aerospace. So we're highly alert to the energy and conservation agenda.

I have a single point to emphasize in these remarks: we can do more with less, and indeed much more with much less. Let’s start with the fact that 91 percent of the energy coming out of the ground is lost or wasted before it becomes useful work. It does not have to be that way, not remotely. A glaring example is that half of the input energy in central station power plants goes up the stack as waste heat because we can't move heat effectively any distance at all. But how about putting the generation on-site and capturing and using the waste heat there. We do this routinely, and the answer is that energy conversion efficiencies (which means kilowatts or work out relative to Btus in) go from percentages in the low 30s for central station plants to more than 75 percent for generation and heat capture locally.

A second glaring example is not recapturing input energy into vehicles and other accelerated objects when they're braked and stopped. Isaac Newton taught us that the net energy in this acceleration/deceleration cycle is zero, adjusted only for system inefficiencies and losses. A good way to think about this is elevators. New ones recapture the energy on descent that was expended on ascent. The result is that we build Otis elevators today that use 75 percent less electric energy than comparable equipment in speed and load did a decade ago. Said another way, a re-generative commercial building high rise elevator lifts a million pounds a day for an energy cost of a dollar an hour.

The third glaring example is heat transfer instead of heat dissipation and generation. Realize first that air conditioning systems do not cool air in a direct sense like food in a refrigerator. Instead they move heat from one place (inside) to another place (outside). We measure the efficiency of air conditioning systems by Coefficient of Performance (COP). It's the amount of energy required to move another amount of energy (in this case the caloric content of the heat moved). Air conditioning systems worldwide work this way, and the COP is about 4 times. In other words, one unit of input is needed to move four units of energy or heat.

So how about heating hot water by heat transfer. We're learning an amazing statistic from examinations of buildings worldwide just as has been done here for PlaNYC. The numbers vary but about 16 percent of total building energy consumption, whether residential or commercial, is to heat hot water. The old way is direct insertion of heat into the water, just as we did thousands of years ago over the campfire. But it’s also entirely feasible to heat hot water via heat transfer with COPs like air conditioning of about 4 times. So energy can go down by 75 percent, which means about 12-13 percent less energy consumption in total for buildings. Paybacks for systems like this are about three years at current energy prices.

The point of all three examples is that energy conservation in significant amounts is feasible today and reflects the laws of physics. And not only feasible but with attractive financial returns.

New York City's 8 million inhabitants, 950,000 residential and commercial buildings, and about two million cars consume 215 terrawatt hours of total energy annually. That's the last time you'll hear me use that term today since none of us can keep track of the zeros. With your forbearance, I'll convert terrawatt hours into power plant equivalents for New York City energy sources of all kinds. Let’s use a typical large power plant of 700 MW which means the City’s total energy load is about 35 such plants. Or we could say 13 million cars. In any case, it's a lot and significantly more per capita than in many other cities worldwide. Which is why the Mayor has called for the huge goal of a 30 percent reduction in this city's carbon footprint by 2030.

A surprising 79 percent of this total New York City energy load is for buildings, or about 28 power plants. Transportation accounts for virtually all the rest. Inside the 79 percent total for buildings, a little over a quarter of the City’s total load is for each of residential and commercial buildings. Usage by function breaks down to heating (26 percentage points), lighting (17 percentage points), hot water (16 percentage points), appliances (13 percentage points), and air conditioning (7 percentage points).

So where do we start. First is setbacks on heating/cooling/lighting for residential and office space when it's not occupied in off hours during the day for residences and at night for commercial space. Both would save about 5 percent of their current total energy load, or about a power plant for New York City in total.

Another is the hot water heating example earlier. About 4 power plants. Another is re-generative elevators although their total energy load isn't enough to make the power plant savings meaningful. But we could extend the same reasoning to cars which would save at least another two plants. Bear in mind that hybrids do this already by capturing braking energy while re-charging the battery.

Fourth is to move more central station electric generation to small units on-site in buildings, enabling capture and use of the heat there for space cooling/heating and hot water heating. Potentially another 4 power plants.

Together these are 11 plants out of New York's 35 total, or a little over 30 percent. The saving won’t come cheaply with retrofits versus new construction but it’s what a greenfield city would look like, and lots of the gains can be had with attractive returns even on a retrofit basis. And it’s where the Mayor wants us to be.

I skipped the transportation opportunity today to save time for buildings but want to mention in closing fuel cell powered buses. We build them, deriving from our experience since the 1960s in building all the fuel cell power plants for the American space program. Why do we have hydrogen powered fuel cells in space? Because the by-products (and there are only three) are water, heat, and electricity. Astronauts drink the water and the other two by-products heat and power the Shuttle. The same is true for a fuel cell powered bus although the water here ends up vented harmlessly to the atmosphere.

Although there are about 9,000 diesel powered buses in New York, they collectively require only about a percent of the City's energy. Fuel cell buses are about twice as energy efficient as diesel buses but since the total energy today isn’t so much neither are the savings. But diesel buses emit oxides of sulfur and nitrogen and lots of these, plus generate the noise so familiar and unpleasant to all of us. By contrast, fuel cell buses have no emissions, none. No smell, none. No noise beyond conversational speech. By the way, there’s one of our fuel cell buses outside, and I invite you to take a look anytime today. We’re not operating it in the City given the permits and driver training required but it has full power/lighting/air conditioning on and you can examine the fuel cell power plant. Take a look please.

In closing could I remind us that the changes proposed here are based on fundamental physics and nothing more: capturing otherwise waste heat and using it, capturing the energy of acceleration when decelerating, and heating via heat transfer rather than directly over the campfire. The fact that 91 percent of total energy is wasted rather than becoming useful work sizes the opportunity for us, and it is evidently huge.