1 00:00:00,120 --> 00:00:03,760 Speaker 1: Hi everyone. So prolonged frigid temperatures this past weekend caused 2 00:00:03,760 --> 00:00:06,480 Speaker 1: electricity demand and the Texas Power Grid or URCOT to 3 00:00:06,559 --> 00:00:08,920 Speaker 1: explode and tripped more than a third of the state's 4 00:00:08,960 --> 00:00:12,480 Speaker 1: generation offline. This scent power prices careening towards the nine 5 00:00:12,480 --> 00:00:15,319 Speaker 1: thousand dollar per meguat our market price cap. Of course, 6 00:00:15,600 --> 00:00:17,920 Speaker 1: any plant that manas to stay online hit the jackpot. 7 00:00:18,320 --> 00:00:21,120 Speaker 1: Real time power sales on February seventeenth totaled nearly ten 8 00:00:21,120 --> 00:00:23,520 Speaker 1: billion dollars, but many were not able to stay online. 9 00:00:23,680 --> 00:00:26,480 Speaker 1: The extreme cold resulted in more than thirty thousand megawats 10 00:00:26,480 --> 00:00:29,360 Speaker 1: of power plant outages in a situation where demand outstrips 11 00:00:29,360 --> 00:00:31,520 Speaker 1: supply by thirty percent, and as most of us will 12 00:00:31,560 --> 00:00:34,680 Speaker 1: know by now, this resulted in millions of Texans without power, heat, 13 00:00:34,720 --> 00:00:36,320 Speaker 1: and clean water. We have to note that our hearts 14 00:00:36,320 --> 00:00:38,839 Speaker 1: go out to our friends, family, colleagues, and everyone impacted 15 00:00:38,840 --> 00:00:40,559 Speaker 1: by the storm, and we really hope things get back 16 00:00:40,560 --> 00:00:42,800 Speaker 1: online as soon as possible. This week on the show, 17 00:00:42,960 --> 00:00:46,080 Speaker 1: we've got Anastasia Dialinas, head of US Oil Research, and 18 00:00:46,200 --> 00:00:48,800 Speaker 1: Nick Steckler, head of North American Power Research for BENF. 19 00:00:48,880 --> 00:00:50,720 Speaker 1: They're going to tell us about how the state's power, 20 00:00:50,800 --> 00:00:52,839 Speaker 1: oil and gas sectors all went down at once, and 21 00:00:52,880 --> 00:00:55,080 Speaker 1: what Texas might consider to build back and build back 22 00:00:55,120 --> 00:00:57,840 Speaker 1: better being if users can find ongoing covers the US power, 23 00:00:57,960 --> 00:00:59,960 Speaker 1: oil and gas markets on bef dot com, the benif 24 00:01:00,000 --> 00:01:02,240 Speaker 1: bobile app, and the Bloomberg terminal. As a reminder, be 25 00:01:02,480 --> 00:01:04,520 Speaker 1: to not provide investment or strategy advice, and you can 26 00:01:04,560 --> 00:01:06,040 Speaker 1: hear the full disclaimer at the end of the show. 27 00:01:06,280 --> 00:01:08,280 Speaker 1: I'm Mark Taylor and you're listening to Switch on the 28 00:01:08,319 --> 00:01:19,360 Speaker 1: BP podcast. Hi Nick, Hyanna, Hey, Hi make thanks for 29 00:01:19,440 --> 00:01:21,720 Speaker 1: joining us today. So the first thing I guess we 30 00:01:21,840 --> 00:01:24,679 Speaker 1: should jump into really with this topic is how did 31 00:01:24,760 --> 00:01:27,000 Speaker 1: we get here. One of the first things to specify 32 00:01:27,360 --> 00:01:30,440 Speaker 1: comparing it to other blackouts is that it actually wasn't 33 00:01:30,520 --> 00:01:32,840 Speaker 1: the grid itself as much that failed, but more the 34 00:01:32,920 --> 00:01:36,960 Speaker 1: power supply. So if we break down the electricity chain 35 00:01:37,280 --> 00:01:41,679 Speaker 1: as generators, big power lines, smaller power lines, and then 36 00:01:42,200 --> 00:01:46,759 Speaker 1: customers and their meters and things, it's really a short 37 00:01:46,840 --> 00:01:50,120 Speaker 1: fall on the power generation side that's being experienced right now, 38 00:01:50,240 --> 00:01:54,120 Speaker 1: and it's one that we really have rarely ever seen before. 39 00:01:54,320 --> 00:01:58,240 Speaker 1: So the size of this capacity shortfall in Texas, the 40 00:01:58,320 --> 00:02:01,240 Speaker 1: number of generators that are out of customers that have 41 00:02:01,280 --> 00:02:06,040 Speaker 1: been cut off as a result is enormous. So how 42 00:02:06,080 --> 00:02:10,639 Speaker 1: did this capacity shortfall happen? The timeline of events breaks 43 00:02:10,680 --> 00:02:14,160 Speaker 1: down like this. Texas was starting to see very unseasonably 44 00:02:14,240 --> 00:02:18,120 Speaker 1: cold weather going into Valentine's Day weekend, so February twelve, 45 00:02:19,240 --> 00:02:24,480 Speaker 1: by Valentine's Day, the electric demand in Texas was already 46 00:02:25,320 --> 00:02:29,960 Speaker 1: at the extreme planning scenario, so not that what they 47 00:02:30,000 --> 00:02:36,160 Speaker 1: were expecting, but already there percentile extreme case by Valentine's Day, 48 00:02:36,680 --> 00:02:39,919 Speaker 1: and then by the next day, by President's Day, for 49 00:02:41,120 --> 00:02:44,920 Speaker 1: demand was set to blow past that and hit summer levels. 50 00:02:45,480 --> 00:02:49,400 Speaker 1: And to to emphasize how critical that is, Texas is 51 00:02:49,520 --> 00:02:53,760 Speaker 1: a summer peaking system, so winter is usually pretty relaxed 52 00:02:53,800 --> 00:02:57,760 Speaker 1: in Texas. Generators generally their business model, especially if they're 53 00:02:57,760 --> 00:03:00,800 Speaker 1: peaking generators, is to really gear for the summer. They 54 00:03:00,840 --> 00:03:02,240 Speaker 1: make a lot of their money in the summer because 55 00:03:02,240 --> 00:03:04,720 Speaker 1: demand is highest in the summer. It's about higher in 56 00:03:04,760 --> 00:03:08,120 Speaker 1: the summer. But this time we saw summer level demand 57 00:03:08,280 --> 00:03:13,360 Speaker 1: just pop up in Texas and the grid operator going 58 00:03:13,440 --> 00:03:17,840 Speaker 1: into that weekend under forecast demand by about and that 59 00:03:18,040 --> 00:03:23,840 Speaker 1: led to a sizeable similar capacity shortfall and a lot 60 00:03:23,880 --> 00:03:25,840 Speaker 1: of customers having to be shut off as a result. 61 00:03:26,200 --> 00:03:29,799 Speaker 1: The second thing, which is also very important, which is 62 00:03:30,040 --> 00:03:32,399 Speaker 1: once we account for the fact that plants weren't really 63 00:03:32,600 --> 00:03:34,960 Speaker 1: ready for this. They weren't expecting this, They weren't expecting 64 00:03:35,040 --> 00:03:38,680 Speaker 1: such a rare storm to occur. That storm came through 65 00:03:39,080 --> 00:03:42,240 Speaker 1: and knocked a lot of plants offline with his physical force, 66 00:03:42,440 --> 00:03:44,720 Speaker 1: with the cold and with the ice. So it's really 67 00:03:44,760 --> 00:03:47,200 Speaker 1: two parts. Plants weren't ready for just the sheer amount 68 00:03:47,200 --> 00:03:50,400 Speaker 1: of demand, but then once it hit the ones that 69 00:03:50,480 --> 00:03:53,200 Speaker 1: were online. The plants that were online got hit and 70 00:03:53,280 --> 00:03:56,520 Speaker 1: taken out in record numbers. A couple of things. What 71 00:03:56,560 --> 00:03:58,480 Speaker 1: does it mean to get ready for summer demand? What 72 00:03:58,560 --> 00:04:01,720 Speaker 1: are they doing right now? Typic to prepped for for summer. 73 00:04:02,000 --> 00:04:05,840 Speaker 1: So normally ahead of the summer you'll see plants getting ready, 74 00:04:06,320 --> 00:04:10,720 Speaker 1: you know, staffing, reviewing equipment, making sure that their failure 75 00:04:10,800 --> 00:04:13,640 Speaker 1: rate is going to be really low, generally so they 76 00:04:13,680 --> 00:04:16,120 Speaker 1: can capture price spikes, because that is when they make 77 00:04:16,160 --> 00:04:19,479 Speaker 1: the most of their money. Some plants that don't see 78 00:04:19,520 --> 00:04:22,920 Speaker 1: a big revenue opportunity in the winter will just sometimes 79 00:04:23,400 --> 00:04:26,480 Speaker 1: shut down for for the time being and wait till summer, 80 00:04:26,839 --> 00:04:28,920 Speaker 1: and so they rely on the guidance from the grid 81 00:04:28,960 --> 00:04:32,159 Speaker 1: operator to be ready to go. And in this case, 82 00:04:32,200 --> 00:04:35,279 Speaker 1: the grid operator was expecting about fifty eight giga wats 83 00:04:35,320 --> 00:04:38,200 Speaker 1: of demand for the winter as peak, and we ended 84 00:04:38,240 --> 00:04:42,279 Speaker 1: up seeing about seventy five gigawatts of demand that customers wanted. 85 00:04:42,760 --> 00:04:46,000 Speaker 1: I say wanted because thus customers never actually got to 86 00:04:46,080 --> 00:04:48,400 Speaker 1: pull that much demand because they caught kurt tailed. But 87 00:04:48,520 --> 00:04:52,440 Speaker 1: that's where it was headed going into February. Can you 88 00:04:52,480 --> 00:04:54,200 Speaker 1: explain that a little bit, that concept a little bit 89 00:04:54,240 --> 00:04:56,320 Speaker 1: for people that might not be familiar. They got curtailed. 90 00:04:56,360 --> 00:04:59,000 Speaker 1: What does that mean? Yeah, So the instruction from the 91 00:04:59,040 --> 00:05:03,480 Speaker 1: grid operators called ARCOTT is to all the utilities, the 92 00:05:03,640 --> 00:05:07,400 Speaker 1: different electric utilities in Texas to shut off different parts 93 00:05:07,440 --> 00:05:11,279 Speaker 1: of their regional grids. And that's to conserve energy. Because 94 00:05:11,560 --> 00:05:13,840 Speaker 1: there was no way that ARCOT had enough capacity to 95 00:05:13,920 --> 00:05:16,640 Speaker 1: be able to meet all seventy five gigawatts of of 96 00:05:16,760 --> 00:05:21,360 Speaker 1: demand in the market. So as a matter of conservation 97 00:05:21,520 --> 00:05:23,680 Speaker 1: and keeping the grid afloat, they had to tell the 98 00:05:23,720 --> 00:05:27,240 Speaker 1: regional utilities, hey, go go flip off some of your 99 00:05:27,600 --> 00:05:31,400 Speaker 1: different substations and pull customers offline. Okay, so some of 100 00:05:31,440 --> 00:05:33,520 Speaker 1: them got curtailed, but you also said that some couldn't 101 00:05:33,560 --> 00:05:35,280 Speaker 1: turn on at all. Why is that? You know? I 102 00:05:35,520 --> 00:05:38,040 Speaker 1: heard on another podcast this morning that you know, plants 103 00:05:38,080 --> 00:05:40,719 Speaker 1: in North Dakota, South Dakota they run in the winter, 104 00:05:40,880 --> 00:05:43,160 Speaker 1: gas plants. Why couldn't the ones in Texas? Why did they? 105 00:05:43,600 --> 00:05:45,880 Speaker 1: I guess you said they froze. Looking at the data 106 00:05:46,040 --> 00:05:48,400 Speaker 1: on outages, which is still coming in, right, we're still 107 00:05:48,440 --> 00:05:52,000 Speaker 1: in the middle of this as of today. But plants 108 00:05:52,160 --> 00:05:56,960 Speaker 1: across all different types, so all generation technologies cold nuclear, 109 00:05:57,160 --> 00:06:00,960 Speaker 1: natural gas, wind have seen issues with freeze. So ice 110 00:06:01,560 --> 00:06:06,240 Speaker 1: accumulating components locking up probably the biggest issue we've seen 111 00:06:06,320 --> 00:06:08,960 Speaker 1: so far. It makes sense. The biggest issue, because natural 112 00:06:09,040 --> 00:06:11,600 Speaker 1: gas is the largest share of their cup power mix, 113 00:06:12,000 --> 00:06:15,640 Speaker 1: is that that plants can't get fuel natural gas plants 114 00:06:16,320 --> 00:06:19,680 Speaker 1: not getting fuel is probably the largest source of outage. 115 00:06:20,080 --> 00:06:23,360 Speaker 1: I mean, the freeze not only affects plants and the 116 00:06:23,480 --> 00:06:26,839 Speaker 1: machinery at the power plants themselves, but also is definitely 117 00:06:26,920 --> 00:06:31,520 Speaker 1: hitting the oil fields. Texas is home to about of 118 00:06:32,000 --> 00:06:35,560 Speaker 1: US natural gas and about half of oil production. Right, 119 00:06:35,640 --> 00:06:37,960 Speaker 1: It's a huge state when it comes to supply of 120 00:06:38,000 --> 00:06:41,160 Speaker 1: oil and gas. But even some of the biggest oil 121 00:06:41,200 --> 00:06:43,520 Speaker 1: fields like the Permian out in West Texas got snow 122 00:06:43,560 --> 00:06:47,640 Speaker 1: and ice and freezing cold temperatures. And again, just like 123 00:06:47,839 --> 00:06:51,480 Speaker 1: with power gin, cold temperatures are certainly not unique to 124 00:06:51,720 --> 00:06:54,040 Speaker 1: oil and gas production. North Dakota gets them all the time, 125 00:06:54,160 --> 00:06:56,000 Speaker 1: but you need to be ready for them. And the 126 00:06:56,080 --> 00:06:58,960 Speaker 1: things that can happen in oil and gas production is 127 00:06:59,080 --> 00:07:02,000 Speaker 1: that first all reservoirs not only have oil and gas 128 00:07:02,080 --> 00:07:03,920 Speaker 1: in them, but a good amount of water. That water 129 00:07:04,040 --> 00:07:06,400 Speaker 1: has to be extracted with the oil and gas and 130 00:07:06,480 --> 00:07:09,600 Speaker 1: then processed and separated from the gas stream and the 131 00:07:09,640 --> 00:07:13,680 Speaker 1: oil stream that can then flow onto customers. If it's freezing, 132 00:07:14,040 --> 00:07:16,240 Speaker 1: that water can freeze in the pipes and freezing the 133 00:07:16,320 --> 00:07:19,640 Speaker 1: valves if they're not insulated and weatherized, and that is 134 00:07:19,680 --> 00:07:22,040 Speaker 1: exactly what was happening, and so suddenly they couldn't extract 135 00:07:22,080 --> 00:07:24,880 Speaker 1: as much oil and gas. Liquids are freezing in the 136 00:07:24,960 --> 00:07:27,240 Speaker 1: pipelines because a lot of pipelines, especially out in the 137 00:07:27,320 --> 00:07:29,680 Speaker 1: fields in West Texas, are above ground because they're not 138 00:07:29,760 --> 00:07:32,280 Speaker 1: used to being cold as opposed to in other parts 139 00:07:32,320 --> 00:07:33,840 Speaker 1: of the country where they'll bury them to keep them 140 00:07:33,880 --> 00:07:36,320 Speaker 1: a bit warmer. So a lot of the oil and 141 00:07:36,360 --> 00:07:39,960 Speaker 1: gas infrastructure was also freezing up and having a lot 142 00:07:40,040 --> 00:07:42,760 Speaker 1: of issues due to the cold weather, and that meant 143 00:07:42,840 --> 00:07:45,520 Speaker 1: that a lot of producers had to shut in well 144 00:07:45,640 --> 00:07:48,880 Speaker 1: shut in production, and production has dropped off considerably. We've 145 00:07:48,920 --> 00:07:52,440 Speaker 1: heard reports of up to you know, of some of 146 00:07:52,480 --> 00:07:55,560 Speaker 1: the production out in Permian might be shut in occidental. 147 00:07:55,680 --> 00:07:57,840 Speaker 1: Some other companies have announced that they've had to shut 148 00:07:57,920 --> 00:08:00,640 Speaker 1: significant parts of their operations as well. So let's pause 149 00:08:00,680 --> 00:08:02,160 Speaker 1: there for a second. And you know, we said to 150 00:08:02,200 --> 00:08:04,080 Speaker 1: the top we're going to talk about building back better. 151 00:08:04,320 --> 00:08:07,360 Speaker 1: So one issue I guess we've uncovered is supply what 152 00:08:07,440 --> 00:08:09,480 Speaker 1: would it mean to build back better here, bury the 153 00:08:09,560 --> 00:08:12,000 Speaker 1: pipes or how else would they weatherize them? And would 154 00:08:12,000 --> 00:08:13,600 Speaker 1: it be worth it? So I think one of the 155 00:08:13,680 --> 00:08:16,000 Speaker 1: big questions here is just how do you solve this, 156 00:08:16,080 --> 00:08:18,120 Speaker 1: Like what's the what's the answer to this problem to 157 00:08:18,160 --> 00:08:20,560 Speaker 1: make sure it doesn't happen again. And one of the 158 00:08:20,640 --> 00:08:24,240 Speaker 1: things that I think both regulators, policy makers, oil and 159 00:08:24,280 --> 00:08:27,240 Speaker 1: gas companies themselves, power companies will have to determine is 160 00:08:27,760 --> 00:08:30,480 Speaker 1: what's the likelihood of this type of event to happen again, 161 00:08:30,640 --> 00:08:34,000 Speaker 1: Like what's the necessity to build back better or to 162 00:08:34,080 --> 00:08:37,280 Speaker 1: significantly change the infrastructure. Because there are things that can 163 00:08:37,320 --> 00:08:39,400 Speaker 1: be done from the oil and gas perspective, you could 164 00:08:39,720 --> 00:08:43,640 Speaker 1: insulate pipes, bury them, weatherize equipment. All of that is 165 00:08:43,679 --> 00:08:46,040 Speaker 1: fairly costly. It has a lot of capital expense. You 166 00:08:46,080 --> 00:08:48,439 Speaker 1: think about pipelines especially, I mean some of them are small, 167 00:08:48,840 --> 00:08:51,640 Speaker 1: but some can go hundreds thousands of miles right, So 168 00:08:51,920 --> 00:08:55,120 Speaker 1: to instigate reform at that level is going to be 169 00:08:55,240 --> 00:08:58,640 Speaker 1: a huge investment in infrastructure. Um. And this is oil 170 00:08:58,640 --> 00:09:01,360 Speaker 1: and gas infrastructure that's trying to cut back on capital 171 00:09:01,480 --> 00:09:04,319 Speaker 1: cost not grow them. In general, you know, there's a 172 00:09:04,360 --> 00:09:08,040 Speaker 1: lot of hesitancy to even invest in new pipelines updated 173 00:09:08,080 --> 00:09:10,400 Speaker 1: pipelines anyways. So whether or not you want to put 174 00:09:10,400 --> 00:09:13,040 Speaker 1: all that money into investing in this infrastructure if this 175 00:09:13,200 --> 00:09:15,959 Speaker 1: is a once in a hundred year storm, um, it's 176 00:09:16,000 --> 00:09:19,520 Speaker 1: unclear if that will be worthwhile. But there are maybe 177 00:09:19,720 --> 00:09:22,000 Speaker 1: things on the especially on the oil and gas side, 178 00:09:22,040 --> 00:09:24,199 Speaker 1: that you could do that could help at least alleviate it. 179 00:09:24,320 --> 00:09:26,760 Speaker 1: Like one thing is Nick mentioned is there's a lot 180 00:09:26,800 --> 00:09:29,240 Speaker 1: of policies and emergency measures being called in on the 181 00:09:29,280 --> 00:09:33,200 Speaker 1: gas side to prioritize different customer bases. So like if 182 00:09:33,240 --> 00:09:35,559 Speaker 1: you think about US natural gas, sure it goes to 183 00:09:35,640 --> 00:09:38,679 Speaker 1: power homes for heating, it goes to electricity generation. But 184 00:09:38,800 --> 00:09:41,360 Speaker 1: we also have sizeable markets for exports, both pipelines to 185 00:09:41,440 --> 00:09:44,719 Speaker 1: Mexico export via l n G terminals. A lot of 186 00:09:44,800 --> 00:09:48,800 Speaker 1: industrial facilities utilized natural gas. Texas exports a lot of 187 00:09:48,800 --> 00:09:51,880 Speaker 1: it out of state. Two places like California, the governor 188 00:09:52,040 --> 00:09:54,080 Speaker 1: and the others have tried to put in emergency measures 189 00:09:54,120 --> 00:09:57,079 Speaker 1: saying please like industrial facilities have kind of stopped running 190 00:09:57,120 --> 00:10:00,200 Speaker 1: for the most part. We've had oil refineries. A lot 191 00:10:00,200 --> 00:10:02,480 Speaker 1: of X and refineries have shut down and are returning 192 00:10:02,520 --> 00:10:05,280 Speaker 1: any gas in power that they would normally use to 193 00:10:05,360 --> 00:10:07,839 Speaker 1: the grid to try and help increase that supply. A 194 00:10:07,880 --> 00:10:10,520 Speaker 1: lot of the l G terminals have stopped exports and 195 00:10:10,640 --> 00:10:14,160 Speaker 1: any gas that they usually would receive is therefore available 196 00:10:14,200 --> 00:10:16,880 Speaker 1: to the grid. Does that help if the pipes are frozen? Well, 197 00:10:16,960 --> 00:10:19,040 Speaker 1: so there's two things right, Like the pipes out in 198 00:10:19,080 --> 00:10:21,760 Speaker 1: the oil fields are probably frozen and having trouble getting 199 00:10:21,760 --> 00:10:25,160 Speaker 1: gas back to supply. There's underground storage across the state. 200 00:10:25,320 --> 00:10:28,560 Speaker 1: There are major pipelines that are underground and better protected. 201 00:10:29,040 --> 00:10:32,560 Speaker 1: So there is some flexibility within the system where gas 202 00:10:32,679 --> 00:10:34,760 Speaker 1: can move. And that is that I think the question 203 00:10:34,840 --> 00:10:37,120 Speaker 1: if any gas that is available should be prioritized to 204 00:10:37,200 --> 00:10:40,160 Speaker 1: the customers that needed essentially, so if we're talking about 205 00:10:40,200 --> 00:10:43,520 Speaker 1: frozen gas lines, you know, getting too gas plants, it's 206 00:10:43,559 --> 00:10:47,520 Speaker 1: not necessarily like at the plant itself, but it's somewhere 207 00:10:47,600 --> 00:10:50,319 Speaker 1: along the miles and miles of pipeline that's blocking the 208 00:10:50,360 --> 00:10:52,480 Speaker 1: gas room getting to that plant most likely. Yeah, on 209 00:10:52,679 --> 00:10:55,240 Speaker 1: natural gas. Another key thing to remember too is that 210 00:10:55,480 --> 00:10:58,680 Speaker 1: the water vapor is only present in the gas until 211 00:10:58,760 --> 00:11:01,920 Speaker 1: it's processed. Once natural gas is processed at a processing plant, 212 00:11:01,960 --> 00:11:04,079 Speaker 1: which is usually pretty close to the oil field itself, 213 00:11:04,679 --> 00:11:07,720 Speaker 1: then it becomes almost pure methane or pipeline spec methane 214 00:11:08,320 --> 00:11:11,320 Speaker 1: that is not going to freeze as easily at current temperatures. Right. 215 00:11:11,400 --> 00:11:14,559 Speaker 1: The trouble is when it's still towards the wellhead mixed 216 00:11:14,600 --> 00:11:16,920 Speaker 1: with water, that water vapor freezes and then you have 217 00:11:17,280 --> 00:11:19,079 Speaker 1: sort of a slushy mix trying to flow through this 218 00:11:19,160 --> 00:11:21,400 Speaker 1: pipe of sort of froze some of your frozen water. 219 00:11:21,520 --> 00:11:24,439 Speaker 1: And some natural gas oil pipelines have also seen some 220 00:11:24,559 --> 00:11:27,920 Speaker 1: freezing issues where the oil thickens or starts to freeze, 221 00:11:28,080 --> 00:11:30,079 Speaker 1: and so therefore some a lot of oil pipelines have 222 00:11:30,120 --> 00:11:33,040 Speaker 1: stopped flowing. But on the natural gas side. Once you're 223 00:11:33,040 --> 00:11:35,120 Speaker 1: talking about pipelines kind of closer to the city center 224 00:11:35,240 --> 00:11:38,000 Speaker 1: near the demand markets, those are probably able to flow 225 00:11:38,040 --> 00:11:40,079 Speaker 1: any gas that is in them, but it's probably just 226 00:11:40,160 --> 00:11:42,880 Speaker 1: not reaching that far because of the freezing at the 227 00:11:42,960 --> 00:11:46,199 Speaker 1: source exactly, And any any gas that does get there, 228 00:11:46,240 --> 00:11:48,360 Speaker 1: you want to make sure it's available for home heating 229 00:11:48,440 --> 00:11:51,160 Speaker 1: and power gen and sort of the two prioritized uses 230 00:11:51,240 --> 00:11:54,199 Speaker 1: for it. And I like your point that investors and 231 00:11:54,280 --> 00:11:57,640 Speaker 1: regulators are going to have to decide whether this is 232 00:11:58,240 --> 00:11:59,880 Speaker 1: going to in the future going to be a likely 233 00:12:00,720 --> 00:12:03,800 Speaker 1: enough occurrence to invest in these things. Texas an interesting 234 00:12:03,800 --> 00:12:06,239 Speaker 1: situation on the power side because it's such a deregulated 235 00:12:06,280 --> 00:12:09,640 Speaker 1: power market relative to the other regions that if things 236 00:12:09,720 --> 00:12:13,760 Speaker 1: proceed as normal and regulators don't step in and start 237 00:12:13,840 --> 00:12:16,280 Speaker 1: to require any of this stuff, the way the market 238 00:12:16,880 --> 00:12:20,640 Speaker 1: bakes in this probability is through power presses. So power 239 00:12:20,720 --> 00:12:23,040 Speaker 1: presses are at their cap right now, but basically nine 240 00:12:23,080 --> 00:12:26,400 Speaker 1: thousand dollars for the last few days. Generators that are 241 00:12:26,440 --> 00:12:29,520 Speaker 1: able to survive this are making years worth of revenue 242 00:12:30,040 --> 00:12:33,640 Speaker 1: in just these few days. And if the market stays 243 00:12:33,880 --> 00:12:36,280 Speaker 1: as is, you know, if something there's no major overall 244 00:12:36,320 --> 00:12:39,760 Speaker 1: of the market going forward, Investors the only these power 245 00:12:39,840 --> 00:12:43,720 Speaker 1: plants will say, maybe it's worth paying five percent more 246 00:12:44,640 --> 00:12:48,760 Speaker 1: for our Win turbine kit to have a heater that 247 00:12:49,000 --> 00:12:53,240 Speaker 1: can heat the blades and help us capture those price 248 00:12:53,280 --> 00:12:55,959 Speaker 1: spikes when they happen. What's it going to be once 249 00:12:56,000 --> 00:12:57,719 Speaker 1: every ten years? I don't I don't know, but that's 250 00:12:57,760 --> 00:12:59,640 Speaker 1: the math that there the probability that they're going to 251 00:12:59,679 --> 00:13:02,480 Speaker 1: be looking at. We could also see, of course, regulators 252 00:13:02,520 --> 00:13:05,319 Speaker 1: come in and just mandate something in PGM. In the 253 00:13:05,520 --> 00:13:09,920 Speaker 1: mid Atlantic, in the Northeast US power markets, gas power 254 00:13:10,000 --> 00:13:13,520 Speaker 1: plants are mandated for reliability purposes to have oil tanks 255 00:13:13,559 --> 00:13:16,079 Speaker 1: on site so one to five days of oil, and 256 00:13:16,240 --> 00:13:17,960 Speaker 1: also the gas ruins have to be able to burn 257 00:13:18,040 --> 00:13:22,880 Speaker 1: that oil. So there's there's also regulatory measures that could 258 00:13:22,920 --> 00:13:25,439 Speaker 1: require plans to do those types of things. But investors, 259 00:13:25,720 --> 00:13:27,480 Speaker 1: like I said, might also just choose to do it 260 00:13:27,880 --> 00:13:30,200 Speaker 1: in arcot to be able to be available during these 261 00:13:30,240 --> 00:13:33,280 Speaker 1: times and capitalize on really expensive power. And let's not 262 00:13:33,360 --> 00:13:36,679 Speaker 1: forget this is Texas, right, It's pride itself on not 263 00:13:36,880 --> 00:13:39,000 Speaker 1: too much regulation. Has there been a hint of which 264 00:13:39,040 --> 00:13:42,040 Speaker 1: way it's likely to go? In investor driven or regulation driven. 265 00:13:42,160 --> 00:13:43,760 Speaker 1: There's a lot of debate about it. There's a lot 266 00:13:43,760 --> 00:13:46,199 Speaker 1: of philosophical debate about the markets, and there there was 267 00:13:46,280 --> 00:13:50,599 Speaker 1: even before this event. But we're still really dissecting what 268 00:13:50,800 --> 00:13:54,160 Speaker 1: exactly happened. Orcott really hasn't released all that much information. 269 00:13:54,280 --> 00:13:57,160 Speaker 1: I think they're busy taking care of get just getting 270 00:13:57,200 --> 00:14:01,120 Speaker 1: people power as soon as possible, but it soon after. 271 00:14:01,240 --> 00:14:03,440 Speaker 1: I think there will be a really really good debate 272 00:14:03,520 --> 00:14:07,959 Speaker 1: about planning for this this winter going into it, and 273 00:14:08,040 --> 00:14:10,760 Speaker 1: then the physical effects of the storm on the power plants, 274 00:14:10,800 --> 00:14:14,000 Speaker 1: and and which plants better. Right now, it's not obvious 275 00:14:14,080 --> 00:14:18,960 Speaker 1: that one one particular plant was really guilty of failing 276 00:14:19,040 --> 00:14:26,280 Speaker 1: more than any other. So we've talked about supply, We've 277 00:14:26,280 --> 00:14:29,240 Speaker 1: talked about power plants and making those a bit more resilient, 278 00:14:29,600 --> 00:14:33,480 Speaker 1: and the decision whether to regulate or invest in resiliency. 279 00:14:33,600 --> 00:14:36,840 Speaker 1: We should probably talk a minute about Texas as an island. 280 00:14:37,120 --> 00:14:39,520 Speaker 1: You know, they probably could have solved this if they 281 00:14:39,560 --> 00:14:42,960 Speaker 1: were connected to another source of power, another market. Is 282 00:14:43,000 --> 00:14:45,320 Speaker 1: that is that fair to say? It is? There's very 283 00:14:45,400 --> 00:14:49,400 Speaker 1: little electrical connection to the neighboring grids. Is a priority 284 00:14:49,480 --> 00:14:53,360 Speaker 1: of the Biden administration to harden the transmission, the US 285 00:14:53,400 --> 00:15:00,400 Speaker 1: Transmission Network improve electrical resiliency. Texas has kept did that 286 00:15:00,520 --> 00:15:03,800 Speaker 1: way for you know, as long as they could. They 287 00:15:04,920 --> 00:15:08,880 Speaker 1: benefit from not having to be regulated by the federal 288 00:15:09,240 --> 00:15:13,800 Speaker 1: the Federal regulator FIRK, because they don't exchange much power 289 00:15:13,920 --> 00:15:18,080 Speaker 1: with with their neighbors and so we could see more interconnection. 290 00:15:18,160 --> 00:15:21,120 Speaker 1: It definitely would have helped to be more interconnected with 291 00:15:21,720 --> 00:15:23,920 Speaker 1: with the neighboring regions. It would have just been more 292 00:15:23,960 --> 00:15:28,560 Speaker 1: supply that was available into the market when basically of 293 00:15:28,600 --> 00:15:31,880 Speaker 1: the fleet was offline and they were had this this 294 00:15:32,200 --> 00:15:35,880 Speaker 1: unprecedented capacity short falls. At the same time, like I said, 295 00:15:36,160 --> 00:15:39,640 Speaker 1: they might be reluctant to make those connections because of 296 00:15:39,720 --> 00:15:43,800 Speaker 1: the because of the regulatory implications. And there's a parallel 297 00:15:43,880 --> 00:15:46,760 Speaker 1: here to what happened in California last summer. There were 298 00:15:47,160 --> 00:15:50,440 Speaker 1: impacts across the whole region. It wasn't just Texas. The 299 00:15:50,480 --> 00:15:53,520 Speaker 1: reason we're talking about Texas today is because it was 300 00:15:54,080 --> 00:15:59,160 Speaker 1: impacted the worse and the severity of the cutoffs was 301 00:15:59,360 --> 00:16:01,640 Speaker 1: so extreme, and most of the millions of people that 302 00:16:01,640 --> 00:16:04,840 Speaker 1: are without power are in Texas, but throughout the Midwest. 303 00:16:04,920 --> 00:16:07,520 Speaker 1: This storm really took its holl and last summer when 304 00:16:07,520 --> 00:16:10,040 Speaker 1: we were talking about California. It was a similar story. 305 00:16:10,120 --> 00:16:12,680 Speaker 1: California was was hit really badly by the heat wave, 306 00:16:13,000 --> 00:16:16,160 Speaker 1: but so were its neighbors, and so the connections between 307 00:16:16,720 --> 00:16:20,560 Speaker 1: regions were a bit a little bit contentious because when 308 00:16:20,640 --> 00:16:24,000 Speaker 1: one region suffering, they're not necessarily gonna be pushing power 309 00:16:24,120 --> 00:16:26,360 Speaker 1: to to the other. It's hard to predict what the 310 00:16:26,400 --> 00:16:29,440 Speaker 1: interconnections would really do. But I think in general there's 311 00:16:30,280 --> 00:16:33,800 Speaker 1: a push to improve infrastructure and and build a more 312 00:16:34,080 --> 00:16:38,720 Speaker 1: robust power I don't anticipate there'll be many regulatory changes 313 00:16:38,760 --> 00:16:41,000 Speaker 1: on I haven't heard of much talk around regulatory changes 314 00:16:41,040 --> 00:16:42,600 Speaker 1: on the gas side. So the things I could see 315 00:16:42,640 --> 00:16:46,800 Speaker 1: happening would be requiring more winterization of gas infrastructure, and 316 00:16:46,880 --> 00:16:49,520 Speaker 1: the other one would be some type of more formalized 317 00:16:49,520 --> 00:16:54,440 Speaker 1: prioritization of important customers if there is a shortage of gas. Right, 318 00:16:54,480 --> 00:16:57,680 Speaker 1: But that's difficult because especially if you look at Texas 319 00:16:57,880 --> 00:17:00,640 Speaker 1: and US gas markets in general. At sports are sort 320 00:17:00,640 --> 00:17:03,160 Speaker 1: of a major story nowadays in a major port of revenue, 321 00:17:03,360 --> 00:17:05,600 Speaker 1: and it's winter, and so to say that to try 322 00:17:05,680 --> 00:17:08,119 Speaker 1: and be increasing our exports of things like l en 323 00:17:08,200 --> 00:17:11,639 Speaker 1: G and then to suddenly tell all the customers that 324 00:17:11,680 --> 00:17:14,240 Speaker 1: are trying to buy it. Well, actually, there's also this 325 00:17:14,320 --> 00:17:15,920 Speaker 1: big risk that in the middle of winter, when it 326 00:17:16,000 --> 00:17:18,720 Speaker 1: might be cold in Asia and Europe, we might actually 327 00:17:18,720 --> 00:17:20,840 Speaker 1: cut off that supply because we have cold here in 328 00:17:20,880 --> 00:17:24,399 Speaker 1: the US. That's not a great story to customers, especially 329 00:17:24,400 --> 00:17:27,000 Speaker 1: when there's already questions around the emissions associated with us 330 00:17:27,119 --> 00:17:29,720 Speaker 1: L energy and you know, the cost and everything else. 331 00:17:29,800 --> 00:17:32,160 Speaker 1: So I anticipate there would be a lot of pushback 332 00:17:32,359 --> 00:17:36,480 Speaker 1: in terms of formally mandating sort of stay within the 333 00:17:36,560 --> 00:17:39,800 Speaker 1: state or prioritization of state actors outside of a free 334 00:17:39,840 --> 00:17:43,119 Speaker 1: market sort of system um and better controls in place. 335 00:17:43,800 --> 00:17:45,960 Speaker 1: You can also question, you know, Texas and all the 336 00:17:46,040 --> 00:17:48,920 Speaker 1: storage that is in Texas is still a major supply 337 00:17:49,000 --> 00:17:50,920 Speaker 1: to other parts of the country even right and a 338 00:17:51,000 --> 00:17:52,440 Speaker 1: lot of the country is having a lot of cold 339 00:17:52,480 --> 00:17:55,439 Speaker 1: weather as well. So this isn't just sort of Texas 340 00:17:55,480 --> 00:17:57,280 Speaker 1: as an island and you can treat it as such. 341 00:17:57,480 --> 00:17:59,800 Speaker 1: You have to remember that there are other customers at 342 00:17:59,800 --> 00:18:01,080 Speaker 1: the other or end of that who are also being 343 00:18:01,119 --> 00:18:03,800 Speaker 1: cut off from supplies. It sounds like you're saying that 344 00:18:03,920 --> 00:18:08,239 Speaker 1: the producers don't need regulators to tell them that they 345 00:18:08,320 --> 00:18:11,080 Speaker 1: just missed an opportunity to sell a lot more gas. Yeah, 346 00:18:11,119 --> 00:18:12,720 Speaker 1: I think that would be right. But whether or not 347 00:18:12,800 --> 00:18:15,719 Speaker 1: they'll invest in winterization is another question too, because as 348 00:18:15,720 --> 00:18:18,280 Speaker 1: I mentioned, a lot of producers are really really focused 349 00:18:18,359 --> 00:18:22,760 Speaker 1: on cutting capital expenditure right now. Investing in new production 350 00:18:22,960 --> 00:18:26,680 Speaker 1: is not a priority. Certainly investing in new infrastructure is 351 00:18:26,720 --> 00:18:29,560 Speaker 1: probably not a priority. Their prioritization is debt reduction. Their 352 00:18:29,560 --> 00:18:34,800 Speaker 1: prioritization is increasing cash flow, increasing dividends shareholders, And so 353 00:18:35,880 --> 00:18:39,080 Speaker 1: to try and fit in, you know, increased expenditure on 354 00:18:39,200 --> 00:18:43,000 Speaker 1: winterization might be also tough because they're trying to balance 355 00:18:43,040 --> 00:18:45,680 Speaker 1: out whether or not they grow production five percent or 356 00:18:45,720 --> 00:18:49,040 Speaker 1: two percent, let alone, you know, don't invest in new production, 357 00:18:49,200 --> 00:18:52,320 Speaker 1: don't invest in new drilling, and instead invest in winter 358 00:18:52,400 --> 00:18:54,639 Speaker 1: rizing existing pieces. So again that comes back to do 359 00:18:54,760 --> 00:18:56,159 Speaker 1: we think this is a fluke event or is it 360 00:18:56,200 --> 00:18:58,600 Speaker 1: going to happen every winter? That will I think be 361 00:18:58,680 --> 00:19:01,639 Speaker 1: the deciding factor there. There's so many parallels on the 362 00:19:01,720 --> 00:19:05,479 Speaker 1: power side because the market has embraced these price spikes 363 00:19:05,520 --> 00:19:07,920 Speaker 1: as the signal to investors, and when they miss them, 364 00:19:07,960 --> 00:19:10,080 Speaker 1: they say, these are the steps that I need to 365 00:19:10,119 --> 00:19:11,760 Speaker 1: take to be able to be there and capture that 366 00:19:12,320 --> 00:19:15,360 Speaker 1: that price spike. Next time. But the question going forward 367 00:19:15,359 --> 00:19:17,920 Speaker 1: on the power side is just because so many people 368 00:19:18,000 --> 00:19:22,760 Speaker 1: were adversely impacted and reliability is really so important for 369 00:19:23,280 --> 00:19:26,680 Speaker 1: power that consumers and investors are like, I don't know 370 00:19:26,720 --> 00:19:28,879 Speaker 1: if they're going to be able to tolerate this volatility 371 00:19:29,480 --> 00:19:31,840 Speaker 1: going forward. So do you think there will be a 372 00:19:32,160 --> 00:19:34,560 Speaker 1: policy intervention or do you think the market will figure 373 00:19:34,600 --> 00:19:37,080 Speaker 1: it out itself on the power side, It's really hard 374 00:19:37,160 --> 00:19:42,159 Speaker 1: to predict. Texas is the only market like this in 375 00:19:42,200 --> 00:19:45,760 Speaker 1: the United States. The other or regional energy markets have 376 00:19:46,040 --> 00:19:48,840 Speaker 1: have opted for a capacity market mechanism where they do 377 00:19:49,119 --> 00:19:53,280 Speaker 1: pay plants just to be there and be around and 378 00:19:53,359 --> 00:19:55,200 Speaker 1: do all the accounting to make sure that there's enough 379 00:19:55,840 --> 00:19:59,600 Speaker 1: megawatts on that it's you know, Super Bowl Sunday, that 380 00:20:00,040 --> 00:20:03,240 Speaker 1: major day where everybody's going to be pulling power, and 381 00:20:03,560 --> 00:20:07,520 Speaker 1: and Texas really just leaves it to the to the price, 382 00:20:07,720 --> 00:20:10,639 Speaker 1: the price opportunity for power plants to make money. So 383 00:20:11,160 --> 00:20:14,400 Speaker 1: it seems like the standard way forward, if they weren't 384 00:20:14,440 --> 00:20:17,000 Speaker 1: to change their market design, would be for our cot 385 00:20:17,600 --> 00:20:21,000 Speaker 1: next time around, say okay, we need to in our 386 00:20:21,119 --> 00:20:24,399 Speaker 1: long term planning signal that there should be more power 387 00:20:25,080 --> 00:20:30,160 Speaker 1: in the winter and potentially juice up the one tool 388 00:20:30,240 --> 00:20:34,040 Speaker 1: that they have, which is their scarcity adder, which adds 389 00:20:34,200 --> 00:20:36,879 Speaker 1: a little bit of actually quite a lot of of 390 00:20:37,040 --> 00:20:40,960 Speaker 1: potency to real time energy prices. But but that's really it. 391 00:20:41,240 --> 00:20:44,639 Speaker 1: So it would still be investors just betting that that 392 00:20:44,760 --> 00:20:46,600 Speaker 1: there might be a scarcity in the winter and that 393 00:20:46,720 --> 00:20:49,639 Speaker 1: they could make more money during those periods selling energy 394 00:20:49,960 --> 00:20:52,320 Speaker 1: as opposed to getting a direct payment for being around 395 00:20:52,359 --> 00:20:55,080 Speaker 1: and being available throughout the year. In the end, the 396 00:20:55,200 --> 00:20:58,359 Speaker 1: retail consumer pays for all of this, I guess right 397 00:20:58,720 --> 00:21:01,240 Speaker 1: under that model, right, So it's just gonna be end 398 00:21:01,320 --> 00:21:03,960 Speaker 1: up being a bunch of angry Texans with high, very 399 00:21:04,040 --> 00:21:06,679 Speaker 1: high electricity bills. The actual math could be a bit 400 00:21:06,760 --> 00:21:10,160 Speaker 1: hard for consumers to do. But what regulators and economists 401 00:21:10,200 --> 00:21:11,840 Speaker 1: are gonna do is they're gonna look at the average 402 00:21:11,880 --> 00:21:14,840 Speaker 1: price of power over time in Texas, which has been 403 00:21:14,920 --> 00:21:17,280 Speaker 1: quite cheap in a lot of years because of competition 404 00:21:17,359 --> 00:21:20,119 Speaker 1: because of this, right, because because of competition, because of 405 00:21:20,200 --> 00:21:23,400 Speaker 1: cheap natural gas. But then you also have to count 406 00:21:23,440 --> 00:21:25,880 Speaker 1: for these periods and these massive blow ups. And that's 407 00:21:25,880 --> 00:21:28,359 Speaker 1: why I say, I don't know, We'll see when we 408 00:21:28,440 --> 00:21:31,880 Speaker 1: average it out which region has cheaper power. If let's 409 00:21:31,880 --> 00:21:34,359 Speaker 1: say they work out to be roughly the same. I 410 00:21:34,400 --> 00:21:37,080 Speaker 1: don't know if consumers would want to opt for this 411 00:21:37,840 --> 00:21:41,080 Speaker 1: more volatile model. And then of course we need to 412 00:21:41,119 --> 00:21:42,840 Speaker 1: look at the number of hours and the number of 413 00:21:43,200 --> 00:21:46,680 Speaker 1: customers that were without power and compare that, because I 414 00:21:46,800 --> 00:21:52,360 Speaker 1: know this period is definitely way beyond what's what's considered acceptable. Nick, 415 00:21:52,400 --> 00:21:54,520 Speaker 1: I have a question, what's the role if we think 416 00:21:54,760 --> 00:21:57,480 Speaker 1: forward sort of longer term, what's the role of batteries 417 00:21:57,520 --> 00:21:59,480 Speaker 1: and electric vehicles, Like are they going to potentially be 418 00:21:59,600 --> 00:22:01,679 Speaker 1: a saving grace in a situation like this? I mean, 419 00:22:01,720 --> 00:22:03,760 Speaker 1: I know there's a lot of stories of Texans at 420 00:22:03,800 --> 00:22:05,720 Speaker 1: the moment going into their cars, turning on the engine 421 00:22:05,720 --> 00:22:07,840 Speaker 1: and using that as a way to stay warm, heat 422 00:22:07,920 --> 00:22:10,280 Speaker 1: up during when their house doesn't have power. Like if 423 00:22:10,320 --> 00:22:12,600 Speaker 1: everybody has electric vehicles, can they suddenly just charge your 424 00:22:12,640 --> 00:22:15,119 Speaker 1: house off their car. Well, batteries perform better in a 425 00:22:15,200 --> 00:22:17,040 Speaker 1: situation like this, And if there were more batteries in 426 00:22:17,080 --> 00:22:19,399 Speaker 1: the grid, would that have helped or no? Yeah, it 427 00:22:19,840 --> 00:22:22,760 Speaker 1: begs the question what other technologies might have helped? And 428 00:22:22,840 --> 00:22:24,639 Speaker 1: then in the mediate term I listed some of the 429 00:22:24,720 --> 00:22:28,480 Speaker 1: possible solutions. Natural gas plants could have oil on site, 430 00:22:29,160 --> 00:22:33,040 Speaker 1: consumers could definitely have more generation capacity at their homes. 431 00:22:33,680 --> 00:22:37,359 Speaker 1: Home gen SAIDs batteries. Of course, potentially solar paired with 432 00:22:37,440 --> 00:22:40,639 Speaker 1: batteries is going to be a rush for for consumers 433 00:22:40,720 --> 00:22:43,480 Speaker 1: to you know, outfit their homes to be better equipped. 434 00:22:43,880 --> 00:22:45,560 Speaker 1: But in the longer term, when we look at the 435 00:22:45,680 --> 00:22:49,920 Speaker 1: large scale fleet of generators, given that every single type 436 00:22:49,960 --> 00:22:53,960 Speaker 1: of generator had had problems, I think it's kind of 437 00:22:54,000 --> 00:22:56,879 Speaker 1: a win for the alternative technologies as we look to 438 00:22:57,680 --> 00:23:00,720 Speaker 1: move to higher and higher pennetrations of clean energy on 439 00:23:00,760 --> 00:23:03,240 Speaker 1: the grid. Let's say, let's take Biden's plan of getting 440 00:23:03,280 --> 00:23:05,720 Speaker 1: a hundred percent clean to achieve that you need to 441 00:23:05,760 --> 00:23:10,280 Speaker 1: replace natural gas, and this looks more like a mark 442 00:23:10,560 --> 00:23:15,159 Speaker 1: on natural gases record than anything else, which means natural 443 00:23:15,200 --> 00:23:17,919 Speaker 1: gas is usually a fairly reliable feel. It's seen as 444 00:23:18,000 --> 00:23:21,600 Speaker 1: the backup. It's there when when the wind isn't blowing. 445 00:23:21,760 --> 00:23:25,119 Speaker 1: It's to be clear, no wind and natural gas are 446 00:23:25,160 --> 00:23:27,639 Speaker 1: going to be very important for quite a while on 447 00:23:27,760 --> 00:23:31,560 Speaker 1: the grid. But in getting to the high penetrations that 448 00:23:31,920 --> 00:23:35,040 Speaker 1: a lot of policymakers want, this might be an indicator 449 00:23:35,119 --> 00:23:37,399 Speaker 1: that we really do need some other technology that might 450 00:23:37,440 --> 00:23:41,440 Speaker 1: be available, and I think people might look to more 451 00:23:41,480 --> 00:23:44,560 Speaker 1: battery storage, of course, but will it have enough duration. 452 00:23:45,160 --> 00:23:48,600 Speaker 1: We're not sure yet. We're not sure if lithium ion 453 00:23:48,680 --> 00:23:52,600 Speaker 1: batteries could ride through multiple days like this. Maybe it's 454 00:23:52,640 --> 00:23:55,560 Speaker 1: a wind for small scale nuclear, for advanced nuclear reactors 455 00:23:55,560 --> 00:23:58,320 Speaker 1: which have been getting slaughtered by cheap natural gas. No, 456 00:23:58,680 --> 00:24:00,919 Speaker 1: you know, there's been R and D spending, but nobody 457 00:24:00,960 --> 00:24:02,360 Speaker 1: wants to really take a bet on one of those 458 00:24:02,359 --> 00:24:05,600 Speaker 1: because there's so much more expensive. Well, small scale nuclear 459 00:24:05,640 --> 00:24:08,160 Speaker 1: could have really raked it in during this period if 460 00:24:08,200 --> 00:24:10,560 Speaker 1: it was available, and and it would have been a 461 00:24:10,560 --> 00:24:13,919 Speaker 1: win for them over natural gas and potentially other technologies 462 00:24:13,920 --> 00:24:15,960 Speaker 1: as well. So can you close this out with really, 463 00:24:16,000 --> 00:24:18,240 Speaker 1: just when do you think Texans will get power again? Yeah, 464 00:24:18,359 --> 00:24:21,119 Speaker 1: so we've been talking about the long term implications of 465 00:24:21,200 --> 00:24:23,040 Speaker 1: the power mix, but the truth is the situation is 466 00:24:23,040 --> 00:24:27,240 Speaker 1: still really dire right now, and the grid operators bringing 467 00:24:27,320 --> 00:24:29,920 Speaker 1: plants back online to have the capacity to be able 468 00:24:29,960 --> 00:24:32,640 Speaker 1: to supply customers, and once those plants are ready, they're 469 00:24:32,680 --> 00:24:37,440 Speaker 1: reconnecting customers. They are still right now, it's Thursday, and 470 00:24:37,600 --> 00:24:42,040 Speaker 1: they are in the worst form of cutoffs. So the 471 00:24:42,119 --> 00:24:45,280 Speaker 1: most extreme conservation measures those This is going to extend 472 00:24:45,359 --> 00:24:49,600 Speaker 1: until Friday, and at that point we could start to 473 00:24:49,640 --> 00:24:52,520 Speaker 1: see if the generation capacity is ready, we could start 474 00:24:52,560 --> 00:24:56,200 Speaker 1: to see more of the Texas power grid connecting back 475 00:24:56,280 --> 00:24:59,080 Speaker 1: up to customers and people getting power. But that this 476 00:24:59,240 --> 00:25:02,359 Speaker 1: weekend it feels like the most stoptimistic scenario for everyone 477 00:25:02,840 --> 00:25:04,800 Speaker 1: having power back. I hope they get it back as 478 00:25:04,840 --> 00:25:07,520 Speaker 1: soon as they possibly can. Nick Anna, thanks for joining 479 00:25:07,560 --> 00:25:18,440 Speaker 1: us today. Thank you, thank you. Today's episode of Switched 480 00:25:18,520 --> 00:25:20,960 Speaker 1: On was edited by Rex Warner with gray Stoke Media. 481 00:25:21,200 --> 00:25:24,040 Speaker 1: Bloomberginni App is a service provided by Bloomberg Finance LP 482 00:25:24,160 --> 00:25:27,080 Speaker 1: and its affiliates. This recording does not constitute, nor should 483 00:25:27,119 --> 00:25:30,440 Speaker 1: it be construed as investment advice, investment recommendations, or a 484 00:25:30,520 --> 00:25:33,960 Speaker 1: recommendation as to an investment or other strategy. Bloomberginni App 485 00:25:34,000 --> 00:25:36,639 Speaker 1: should not be considered as information sufficient upon which to 486 00:25:36,720 --> 00:25:40,320 Speaker 1: base an investment decision. 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