Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Hello and welcome to another episode of the Odd Lots Podcast.
Speaker 2: I'm Joe wysn't.
Speaker 3: Thal and I'm Tracy Alloway.
Speaker 2: Tracy obviously, new administration coming in. One of the stories
Speaker 2: that we covered a lot with this administration was there
Speaker 2: has been a lot happening in the energy world.
Speaker 3: Yes, so obviously clean energy was a big part of
Speaker 3: things like the IRA, but we also had the Department
Speaker 3: of Energy's Loan Program's office, headed by Jiggershaw, who we've
Speaker 3: had on the podcast a number of times deploying billions
Speaker 3: of dollars across new clean energy. And the question that
Speaker 3: everyone is asking now is how much of that is
Speaker 3: durable in the face of a new administration which has
Speaker 3: said various, let's just say, unflattering things maybe about Biden's
Speaker 3: clean energy tendencies.
Speaker 2: No, there's so much like we've probably I mean, if
Speaker 2: we went back and looked at all of the episodes
Speaker 2: we've done and categorized them over the last four years,
Speaker 2: because we've done lots of episodes about the specific technologies.
Speaker 2: We've done episodes on nuclear, We've done numerous episodes on
Speaker 2: oil and the use of the Strategic Petroleum Reserve, and
Speaker 2: we've done episodes on geothermal and then the return of
Speaker 2: load growth in the in America between data centers and
Speaker 2: economic growth, et cetera. We've probably done more energy episodes
Speaker 2: than any other topic, or at least close, and we're
Speaker 2: at a cross road. It's probably in multiple ways. The
Speaker 2: changing the administration is the obvious one, but then there
Speaker 2: are really just big questions about what's working and what's
Speaker 2: the future of natural gas and how you know, Like
Speaker 2: there are just so many ongoing energy questions that feel
Speaker 2: very unresolved to me.
Speaker 3: Yes, and we have another four years to look forward
Speaker 3: to to ask more questions.
Speaker 2: And then another four years after that. But I am
Speaker 2: pleased to say.
Speaker 3: It's energy questions forever.
Speaker 2: I mean, it's because this is the human question, right, No,
Speaker 2: for real, Like if we could get a little philosophical here,
Speaker 2: it's energy questions forever, because human progress is the story
Speaker 2: of getting more energy out of input. I forget the name.
Speaker 4: Do you know that guy?
Speaker 2: I can't think of his name. There's like this energy historian.
Speaker 3: I thought you were going to say a philosopher.
Speaker 4: He almost is.
Speaker 2: He's I'm like blanking on his name.
Speaker 3: People will remember a historian.
Speaker 2: No, not Jurgen. He goes back deeper and he has
Speaker 2: these books where he literally like calculates the amount of
Speaker 2: human calories that someone would have had to expend five
Speaker 2: thousand years ago to grow a plant or you know,
Speaker 2: fight hunt an animal, and how many calories are expended
Speaker 2: in that process versut how many calories you get out
Speaker 2: of the animal that you hunt or whatever, and does
Speaker 2: the subtraction and human progress is essentially the history of
Speaker 2: expanding the gap between how much energy you put in
Speaker 2: and how much energy you get out. So it really
Speaker 2: will be energy questions forever.
Speaker 3: Okay, now that we've set the scene, we've gone all
Speaker 3: the way in prehistory to set the scene for a
Speaker 3: discussion about the next four years and the previous four years,
Speaker 3: I should say as well.
Speaker 2: Well in the meantime, in a slightly shorter scale, we
Speaker 2: do have absolutely the perfect guest. Today. We are going
Speaker 2: to be speaking with Energy Secretary Jennifer Granholm about everything
Speaker 2: that's happened in the last four years and the political
Speaker 2: durability questions and what she's done with the DOE during
Speaker 2: her tenures. So Secretary Granholm, thank you so much for
Speaker 2: coming on out lots.
Speaker 5: Yeah, I love it. Thanks so much for having me absolutely.
Speaker 2: You know, I want to start with sort of a
Speaker 2: big picture question and maybe something that's been on my
Speaker 2: mind for a while. Actually, we saw an incredible boom
Speaker 2: under this administration in domestic oil production, also domestic guess production,
Speaker 2: and I don't think it got a ton of attention
Speaker 2: for various reasons, but also one of the reasons was
Speaker 2: it didn't seem like it was something that at least
Speaker 2: on the trail that the administration bragged about during the
Speaker 2: election season. Is this something when you look back on
Speaker 2: the last four years, and we'll get into some of
Speaker 2: the new energy investments in the long term, is this
Speaker 2: something that you are proud of, or that Democratic administration
Speaker 2: should be proud of the success of our domestic hydrocarbons.
Speaker 6: Well, we certainly have achieved energy dominance, that is for
Speaker 6: sure under this administration. And much of that was due
Speaker 6: to the fact, of course that there was the invasion
Speaker 6: of Ukraine and it pulled a lot of Russian oil
Speaker 6: off the global market, and so that really compelled us
Speaker 6: to step up. And part of that stepping up was
Speaker 6: releasing from the Strategic Petroleum Reserve enough to stabilize markets.
Speaker 5: And so as a result.
Speaker 6: Of that and the price signal that was set, the
Speaker 6: demand signal that was set, I think we were able
Speaker 6: to do that. And that's why gasoline today is hovering
Speaker 6: just a little above three dollars a gallon, is because
Speaker 6: there is supply on the market. But all of that
Speaker 6: is true at the same time, as we were expanding
Speaker 6: the energy pie significantly and saw obviously a huge investment
Speaker 6: in both the manufacturing of products to bring us clean
Speaker 6: energy as well as the deployment and the generation of
Speaker 6: that energy.
Speaker 3: Well, let's talk about that clean energy expansion then, and
Speaker 3: I realized, you know, a lot of things have happened
Speaker 3: over the past four years. US oil production has boomed,
Speaker 3: as Joe just pointed out, but the Department of Energy,
Speaker 3: the DOE itself has changed in terms of its role
Speaker 3: in you know, not just energy security, but also in
Speaker 3: the broader US economy. When you look at the DOE
Speaker 3: now at the tail end of twenty twenty four versus
Speaker 3: the DOE that you took over, what are the key differences?
Speaker 3: How has it evolved?
Speaker 6: It is such a great, such a great story because
Speaker 6: the DEOE historically has been a research and development agency
Speaker 6: with also a large focus on national security through our
Speaker 6: nuclear deterrent and so we have seventeen national labs, and
Speaker 6: we were focused on early stage research, maybe some small
Speaker 6: scale demonstration, but really focused on the earlier side of
Speaker 6: these technologies in addition to our nuclear weapons responsibilities. So
Speaker 6: when we came in, we said, look, there is a
Speaker 6: huge role here, an important role for deployment and for
Speaker 6: focusing on the building out and the reshoring of manufacturing
Speaker 6: of the products that would get us to that deployment.
Speaker 6: So we reorganized the entire department. We added a whole
Speaker 6: new vertical.
Speaker 5: That was focused on deployment.
Speaker 6: It was called it is called the Undersecretary for Infrastructure,
Speaker 6: Clean Energy, Infrastructure. Recruited from the private sector, David Crane
Speaker 6: to come in and head that up, and he brought
Speaker 6: in a number of other people from both the finance
Speaker 6: industry as well as the clean energy industry so that
Speaker 6: we could match both our great research portfolio with marketing
Speaker 6: making sure that these products would be successful in the marketplace.
Speaker 6: And you know, when the Inflation Reduction Act was passed
Speaker 6: and the bypart is an infrastructure law, the Department of
Speaker 6: Energy got sixty new programs that we were to execute
Speaker 6: on over one hundred billion dollars, and so that reorganization
Speaker 6: of the department has enabled us to get that funding
Speaker 6: out the door. I'm proud to say that as we're
Speaker 6: speaking right now, ninety nine percent of the programs that
Speaker 6: we were given have issued at least one round of funding.
Speaker 6: And the reason why not all rounds of funding have
Speaker 6: been issues because they're multi year commitments, multi year funding
Speaker 6: opportunity announcements. So really we've really reorganized and the result
Speaker 6: and the proof is not just inside of Dewey but
Speaker 6: really across the country. And I hope we get a
Speaker 6: chance to talk about that incredible manufacturing boom that's happened
Speaker 6: as a result of the Inflation Reduction Act in energy.
Speaker 2: I definitely want to talk about that. By the time
Speaker 2: this episode comes out, this question may not even be
Speaker 2: Germane anymore, but we are recording this on December twentieth,
Speaker 2: and last night the House failed to pass a bill
Speaker 2: that would have kept the government open. Just from your
Speaker 2: perspective right now, if the government shuts down, what does
Speaker 2: that mean for various things that have where the money
Speaker 2: has not been sent out the door. What happens to
Speaker 2: those plans?
Speaker 6: Yeah, I mean some of that depends on how long
Speaker 6: the shutdown is for. And we are able to manage
Speaker 6: our Loan Program Office and our Deployment Arm through a shutdown,
Speaker 6: through some bits of a shutdown. We are proceeding ahead,
Speaker 6: and our teams are proceeding ahead. We're preparing for a lapse,
Speaker 6: but we think we have the ability to get the
Speaker 6: rest of the loan portfolio commitments that are teed up
Speaker 6: out the door.
Speaker 3: Maybe we can talk about the DIA bill of the
Speaker 3: loans more broadly, because you know, regardless of what happens
Speaker 3: with the shutdown, there is the new administration coming in.
Speaker 3: Both Joe and I were at the Deploy twenty twenty
Speaker 3: four event in DC recently, and you gave a great
Speaker 3: speech there, but I got to say, like it felt
Speaker 3: a little bit like a therapy session for people that
Speaker 3: were there. Like the message was very much don't panic,
Speaker 3: keep calm and carry on. I think you even flashed
Speaker 3: that old wartime poster up. Yeah, And there is like
Speaker 3: a sense of uneas or uncertainty about how much of
Speaker 3: all of this is going to continue into the new administration. Like,
Speaker 3: give us a sense of your gut feeling about it.
Speaker 3: At the moment and what you're doing to ensure that
Speaker 3: some of this work will continue.
Speaker 6: As I mentioned, we're really focused on getting the remaining
Speaker 6: funds out the door that we can in this year
Speaker 6: and up to January twentieth. So that's one way is
Speaker 6: once you have those commitments and obligations and contracts signed,
Speaker 6: it's much.
Speaker 5: More difficult to undo.
Speaker 6: But also, as I mentioned at deploy twenty four, really,
Speaker 6: perhaps I don't think I'm being irrationally exuberant, but I
Speaker 6: do think that the Inflation Reduction Act and the fact
Speaker 6: that there are for example, eighteen House Republicans who sent
Speaker 6: a letter saying, please don't touch the Inflation Reduction Act
Speaker 6: because it's benefiting their districts and their states. The fact
Speaker 6: that eighty five percent of the funding is going to
Speaker 6: read states and red districts gives me some hope that
Speaker 6: those members of Congresses are not going to want to
Speaker 6: undo the opportunities now now that their citizens have to
Speaker 6: build these products of the future and future facing jobs.
Speaker 6: I mean, it is astonishing that five over now five
Speaker 6: hundred million, half a trillion dollars has been invested in
Speaker 6: this clean energy economy in the United States since the
Speaker 6: passage of the Bipartisan Infrastructure Law and the Inflation Reduction
Speaker 6: Act that is astonishing. And for every one dollar of
Speaker 6: public money, there are six dollars of private money. So
Speaker 6: the private sector is going to have something to say
Speaker 6: about this as well, and they don't want to obviously
Speaker 6: see this undone we've made. And honestly, just from a
Speaker 6: if you step back from a policy point of view,
Speaker 6: Democrats and Republicans agree that we should be reshoring these
Speaker 6: manufacturing jobs that were lost because of poor trade deals
Speaker 6: or trade deals that were unenforced. We should be getting
Speaker 6: those back. Why would we be ceding the territory to
Speaker 6: China or any other country. And so the fact that
Speaker 6: that's happening, the fact that over nine hundred, almost nine
Speaker 6: hundred and fifty factories have been announced across this country
Speaker 6: is astonishing, and they're happening in all these communities that
Speaker 6: have been often left behind in the past, and so
Speaker 6: I think it would be political malpractice to undo that.
Speaker 6: So I have great optimism that it will continue. Plus,
Speaker 6: the margins in the House are so narrow that eighteen
Speaker 6: Republicans that and again and that was a couple that
Speaker 6: was a month or more ago signed a letter saying
Speaker 6: don't undo this. I think it's very unlikely to be undone. Now,
Speaker 6: will there be components of things that are you know
Speaker 6: that folks have been talking about. You know, will they
Speaker 6: try to block additional funding for EV chargers for example?
Speaker 6: You know, perhaps perhaps some of that around the edges.
Speaker 6: But I don't think the manufacturing side, and the supply
Speaker 6: chains and the critical minerals that are being incentivized to
Speaker 6: be produced inside the United States, I don't think that's
Speaker 6: going to go away.
Speaker 2: Just to push back on this a second, I think
Speaker 2: you have trade deals in the past that have hollowed
Speaker 2: out certain manufacturing capacity in the US, which many people.
Speaker 4: Might agree with.
Speaker 2: On the other hand, if others would say, well, if
Speaker 2: the actual imperative for a lot of this stuff is
Speaker 2: climate specifically, why not import more from the lowest cost,
Speaker 2: largest scale producer of climate tech cheap solar, cheap batteries.
Speaker 2: We put a pretty big tariffs on ev tech in
Speaker 2: the US. We want to bring solar back. From a
Speaker 2: job standpoint, I get it, But reconcile that with the
Speaker 2: sort of urgency that the administration has talked about with climate.
Speaker 6: Well, I think we can achieve that urgency and we
Speaker 6: can build at home. But let's just say this, it
Speaker 6: would be really foolish to trade our reliance upon oil
Speaker 6: from Opec for a reliance upon technology from China. If
Speaker 6: we want to be energy secure, if we want to
Speaker 6: be strong as a nation, A nation that doesn't manufacture
Speaker 6: the means for its own energy security is a weak nation.
Speaker 6: And we are not going to be a weak nation.
Speaker 6: This is why we have You know, other countries have
Speaker 6: engaged in industrial strategy, industrial policy, and we have not,
Speaker 6: and our failure to do so had left us without
Speaker 6: a manufacturing sector. And part of that is for our
Speaker 6: national defense as well, and so just letting it go
Speaker 6: overseas is a terrible strategy for national security and for
Speaker 6: energy security. And so I think that I totally understand.
Speaker 5: We want these products to be.
Speaker 6: Cheap, we want them to be less expensive, affordable for
Speaker 6: our people, and we continue to drive down that cost.
Speaker 6: It's the United States and our technology, our research and
Speaker 6: development that has brought down the price of batteries by
Speaker 6: eighty five percent, now, I mean, and the same with
Speaker 6: solar technologies. And it's true that China came in and
Speaker 6: had a strategy to bigfoot US and to take that
Speaker 6: technology and to develop that technology and deploy it in China,
Speaker 6: and we're saying no more. We're not going to sit
Speaker 6: by and watch that happen. We are going to get
Speaker 6: in the game. We're going to fight. And so I'm
Speaker 6: excited that that's actually happening. As the former governor of Michigan,
Speaker 6: who was governor during the time of the auto bankruptcies
Speaker 6: and before, and who saw so many factories leaving our
Speaker 6: state and the devastation that's left behind from communities that
Speaker 6: saw those factories leave, I'm telling you this is a
Speaker 6: whole new ballgame. It's like we are repairing the mistakes
Speaker 6: of the past. We are bringing it back came providing
Speaker 6: opportunity for folks here as well as creating the products
Speaker 6: that we can stamp made in America and export around
Speaker 6: the world.
Speaker 3: I have a sort of DC process question. You're sort
Speaker 3: of pointing out that there might be some areas of
Speaker 3: overlap in terms of interests of the outgoing and the
Speaker 3: incoming administrations. For instance, Trump seems to like nuclear energy
Speaker 3: and Chris Wright certainly seems to like geothermal. When this
Speaker 3: transition is actually happening, like during this time period, how
Speaker 3: much dialogue. Is there between you and you know your
Speaker 3: incoming successor and how do you sort of like hash
Speaker 3: out the new priorities or is there like a handoff
Speaker 3: note that you leave for your successor how does it
Speaker 3: all work, what's the comms actually like?
Speaker 6: Well, so, actually he and I have been trading phone calls,
Speaker 6: and I fully expect I'll be sitting down with him.
Speaker 6: Of course, it's going to be a new administration and
Speaker 6: they are going to have different priorities, but they also
Speaker 6: have a landing team, transition leaders will who are making
Speaker 6: who are going to be advising the incoming secretary who
Speaker 6: hasn't had the experience that Doe, but his landing team
Speaker 6: all have been part of Doe in various ways in
Speaker 6: the past, so there's a great familiarity there. So those
Speaker 6: conversations are happening even as we speak. Right now, their
Speaker 6: landing team is interviewing our various offices around the department
Speaker 6: to see what has changed, what they want to keep, etc.
Speaker 6: To your point, though, I just think it is critical
Speaker 6: that people understand the bipartisan support for so many of
Speaker 6: these technologies. You mentioned geothermal, you mentioned nuclear. We've been
Speaker 6: hugely bullish on both of those, but there's also the
Speaker 6: support for critical minerals and critical materials that build the
Speaker 6: batteries that's happening through our Manufacturing and Energy Supply Chain's office.
Speaker 6: There's bipartisan support for you know, hydroelectric power, for water power,
Speaker 6: you know, there's bipartisan support for hydrogen. And we're working
Speaker 6: on all of those. And truly, so many of the
Speaker 6: Republicans have said that they support an all of the
Speaker 6: above strategy. And if it's all of the above and
Speaker 6: we build out this clean energy, this energy pie, you
Speaker 6: can't ignore the clean side. And many of those in
Speaker 6: Congress who have been all of the above understand that fully.
Speaker 2: When you think about the scale of the energy challenge
Speaker 2: or planning, and you know, these are multi year, multi
Speaker 2: decade ideas and nothing, you know, these dials shipped very slowly.
Speaker 2: I'm curious when you think about the US political system
Speaker 2: and the fact that who has power can change, certainly
Speaker 2: every four years and actually every two years in many cases,
Speaker 2: does this impair us when you look at you know,
Speaker 2: you talked about industrial strategy around the world, and obviously
Speaker 2: China comes to mind. I'm curious about how you sort
Speaker 2: of reconcile what I see as a time duration mismatch
Speaker 2: between the scale of these challenges versus the reality of
Speaker 2: the political clock.
Speaker 6: Well, there's no doubt that the climate imperative is upon us.
Speaker 6: I mean we see every year all of these records
Speaker 6: being broken, so we have a sense of we should
Speaker 6: all have a sense of urgency about that. Some don't
Speaker 6: see that as big of a challenge, but they do
Speaker 6: see the global competition as a huge challenge to be surmounted,
Speaker 6: and they don't want to miss out on the twenty
Speaker 6: three trillion dollar global market that these clean energy products represent.
Speaker 6: If we're not building them, someone else is going to
Speaker 6: be building them, and why would we see the territory
Speaker 6: So one way or the other, there's a sense of urgency.
Speaker 6: What there's the urgency bumps up against is old process
Speaker 6: and old mindsets.
Speaker 5: In some areas.
Speaker 6: You know, one example I think of it, if we
Speaker 6: had had the opportunity to have another term, I would
Speaker 6: definitely have been pushing further on supporting the grid and
Speaker 6: upgrading the grid. The grid is you know, seventy percent
Speaker 6: of the grid is over twenty five years old, a
Speaker 6: lot of it.
Speaker 5: Built on wooden poles.
Speaker 6: We've got all these extreme weather events we need a
Speaker 6: resilient grid, and we don't have enough funding, and we
Speaker 6: don't even think about it, honestly, in the way that
Speaker 6: we should. We don't think about a national grid, you know,
Speaker 6: because it's been pocketed in these silos all across the
Speaker 6: country and there's so much state by state you know,
Speaker 6: impact on that. But we should be thinking about it
Speaker 6: like we do our national highway system. Honestly, We've got
Speaker 6: a Highway Trust Fund, you've got state and federal participation.
Speaker 6: That's how we should be looking at our energy grid
Speaker 6: if we were to move this forward. And then the
Speaker 6: other thing I would really focus on is the fact
Speaker 6: that there's so much queued up in the interconnection cues.
Speaker 6: You know, we've got three point seven tarowatts of power
Speaker 6: que up, of clean power queued up. We need to overbuild,
Speaker 6: and that blockage is a huge problem that I hope
Speaker 6: the next administration addresses as well.
Speaker 3: Wait, say more about the grid, because I wanted to
Speaker 3: ask you about this. To some extent, it doesn't matter
Speaker 3: how much clean energy we generate if we don't have
Speaker 3: the grid that's like actually able to handle that in
Speaker 3: an efficient way. What would you do if you were
Speaker 3: going to mount you know some sort of project. Would
Speaker 3: you try to be as ambitious as a national grid
Speaker 3: of some sort or would you have to kind of
Speaker 3: be more realistic and tinker at the edges.
Speaker 6: Yeah, I think you have to have both national as
Speaker 6: well as local components, like you do your federal highway system.
Speaker 6: And we have been in the process over the past
Speaker 6: four years of planning out what are those national interest
Speaker 6: electric corridors and where can we better make sure that
Speaker 6: the grid there's a handshake between one region and another.
Speaker 6: So for example, you know, if you've got lots of
Speaker 6: wind being generated in low population centers of the country,
Speaker 6: but you don't have a grid to be able to
Speaker 6: connect that to where population centers are, you're missing You're
Speaker 6: missing the boat. And of course you want to make
Speaker 6: sure that those communities are compensated for giving you know,
Speaker 6: that power over and that's what's happening in many places,
Speaker 6: but we need more of it. We have a dearth
Speaker 6: of connection between regions and that needs to be invested in.
Speaker 6: And I will say, you know, one of the great
Speaker 6: things about working with our labs is that they are
Speaker 6: always coming up with innovative solutions for how to get
Speaker 6: around For example, NIMBI problems of transmission not in my
Speaker 6: backyard problems. And so a lot of technology now that's
Speaker 6: available to reconductor existing lines, so you can put twice
Speaker 6: the power on existing transmission lines that you don't have,
Speaker 6: so you don't have to get repermitted, et cetera. There's
Speaker 6: new technologies about moving power, grid enhancing technologies, and you know,
Speaker 6: dynamic line rating can move power much more efficiently. Those
Speaker 6: technologies can also really add a lot of generation capacity
Speaker 6: to the grid, like about one hundred gigawatts of that
Speaker 6: just by enhancing technologies on the existing grid.
Speaker 2: You know, you said something earlier in the conversation that
Speaker 2: stuck with me and I wanted to go back to
Speaker 2: it before I forget. You said it doesn't make sense
Speaker 2: for the US to trade dependence on energy from OPEC
Speaker 2: for technology from China, which intuitively makes sense to me.
Speaker 2: On the other hand, the US is not really so
Speaker 2: OPEC dependent anymore, and as we talked about in the beginning,
Speaker 2: the US is just an extraordinary amount of carbon resources
Speaker 2: here in the US, both between oil and gas, and
Speaker 2: there's more and more of it being produced all the time.
Speaker 2: Is there a sense from a sort of macro standpoint
Speaker 2: in the US that the transition from carbons to more
Speaker 2: electrified renewables, et cetera. Are we playing to our strengths
Speaker 2: here or are we leaning against some of our natural
Speaker 2: endowments that we have in the US.
Speaker 6: Well, I think we've got endowments on both the molecule
Speaker 6: side as well as the electron side. And we you know,
Speaker 6: we've got, for example, these hydrogen hubs that we have
Speaker 6: announced one in the Gulf Coast. A lot of the
Speaker 6: oil and gas majors are very interested in clean hydrogen.
Speaker 6: They would derive it from natural gas, so it would
Speaker 6: be called blue hydrogen, but they would agree to sequester
Speaker 6: the CO two and make sure.
Speaker 5: There's no methane leaks along the way.
Speaker 6: So you know what I say, the trading opek, what
Speaker 6: I really is that we don't want to rely on
Speaker 6: anyone else for our own energy, whether it is from
Speaker 6: molecules or from electrons, and we don't you know, we
Speaker 6: want to be able to supply cleaner techno, cleaner fuels,
Speaker 6: whether it is you know, whether it's fossil fuels or
Speaker 6: electricity to the world. We want us to be able
Speaker 6: to export and in order to do that, we have
Speaker 6: got to build up our capacity. I will say this
Speaker 6: though the Department of Energy does not regulate how much
Speaker 6: the oil and gas companies drill.
Speaker 5: That's not in our purview.
Speaker 6: And because there has been such an increase, there was
Speaker 6: such an increase in drilling and improved techniques to be
Speaker 6: able to drill both oil and gas, we saw this
Speaker 6: great increase in production and export. But we also know
Speaker 6: that at some point a number of international entities and
Speaker 6: modelers are saying that we're going to reach peak oil
Speaker 6: peak gas.
Speaker 2: So we have to say a demand or supply.
Speaker 6: Yeah, well, I mean demand and therefore supply will follow, right,
Speaker 6: So I think it's really important to.
Speaker 5: Have a long view. Of course, our goal is.
Speaker 6: To get to net zero by twenty fifty, but it
Speaker 6: is net zero, so that suggests that there will be
Speaker 6: some fossil fuels, but there will be also technologies to
Speaker 6: reduce the greenhouse gas emissions, which is one of the
Speaker 6: reasons why the Department of Energy, in our labs, we've
Speaker 6: been focused on what are those carbon management strategies that
Speaker 6: will enable us to get to net zero. You know,
Speaker 6: we have this other big, hairy, audacious goal, which is
Speaker 6: to have a one hundred percent clean electric grid by
Speaker 6: twenty thirty five, and we're on track to get there,
Speaker 6: will be eighty percent clean, we at least per the
Speaker 6: modelers by twenty thirty and on our way to that
Speaker 6: last twenty percent, which is the hard hard to decarbonize portions.
Speaker 6: But nonetheless, we feel that you have to do both.
Speaker 6: You've got to you've got to make sure the world
Speaker 6: is supplied, make sure prices don't go up on the
Speaker 6: fossil side, while we use technologies that reduce greenhouse gas
Speaker 6: emissions and we use technologies that generate.
Speaker 3: Clean So on the topic of America being hashtag blessed
Speaker 3: when it comes to hydrocarbons, I mean, one of the
Speaker 3: things that did happen this year is President Biden stopped
Speaker 3: licensing new LNG export terminals. And I haven't been following
Speaker 3: that decision all that closely, but I think at a
Speaker 3: minimum you could say that it became a pretty big
Speaker 3: political controversy and one that is still kind of being
Speaker 3: hashed out. So you guys just released a report looking
Speaker 3: at the impact of LNG exports from the US. I
Speaker 3: guess my question is, like, looking back, is there anything
Speaker 3: that you would have done differently or looking back at
Speaker 3: the sort of cost benefit analysis of making that a
Speaker 3: whole big thing. Was it worth it.
Speaker 6: Well, let me just say, first of all, yes, it
Speaker 6: was because we needed to do this study because we
Speaker 6: do authorize new LNG terminals. But this study was a
Speaker 6: pause on new terminals, and we have already authorized so
Speaker 6: much export of LNG. We've authorized forty eight billion cubic
Speaker 6: feet per day of LNG. We're only exporting, as the
Speaker 6: largest exporter in the world, about thirteen billion cubic feet
Speaker 6: per day. So that gap in between thirteen and forty
Speaker 6: eight is all stuff that's either being built or hasn't
Speaker 6: even begun being built, hasn't even reached a final investment decision.
Speaker 6: That forty eight billion cubic feet per day that's been
Speaker 6: authorized is a massive amount. And so this pause to
Speaker 6: do the study about whether more energy should be authorized
Speaker 6: did not impact any of the buildout of existing authorizations,
Speaker 6: and it didn't stop any exports from happening. It simply
Speaker 6: did not touch that at all. There was fear that
Speaker 6: it would do that, but it absolutely did not do that.
Speaker 6: So it is important for us as a nation to
Speaker 6: determine what's in the public interest in terms of the
Speaker 6: export of natural gas that's required under the Natural Gas Act.
Speaker 6: So what are the factors that you look at to
Speaker 6: determine whether it's in the national interest of public interest,
Speaker 6: and so taking a look at what are the impacts
Speaker 6: at home? If you're exporting a lot of your liquefied
Speaker 6: natural gas, that means you're taking away from the natural
Speaker 6: gas that's used at home. Forty eight billion cubic feet
Speaker 6: is basically about half of what we produce for all
Speaker 6: natural gas for use in the United States. So what's
Speaker 6: the impact on pricing for folks at home? That's one
Speaker 6: of the factors.
Speaker 5: We looked at.
Speaker 6: What is the impact on greenhouse gas emissions around the
Speaker 6: world by exporting that? What is being displaced by that?
Speaker 6: Those are the things that the study looked at. The
Speaker 6: study was done by scientists and researchers at our national Labs,
Speaker 6: and it came out found out that there are impacts,
Speaker 6: and the question is going forward, how the data from
Speaker 6: the study will be used by the next administration and beyond.
Speaker 2: On that point, obviously, GUS is a global market, and
Speaker 2: you know in the end there are certain things if
Speaker 2: there's demand for it, or if you you know, years
Speaker 2: down the road, there's demand for it, that that's probably
Speaker 2: up to private sector actors to decide whether they want
Speaker 2: to make the investments in those terminals. And if there's
Speaker 2: not demand for it, then there's not. But when you
Speaker 2: think about the sort of carbon impacts, the price impacts,
Speaker 2: you lay it out in the study, perhaps up to
Speaker 2: one hundred dollars a year extra for an American family
Speaker 2: by the year twenty fifty. So somewhat modest on the
Speaker 2: carbon impacts. However, does it change the dial I mean,
Speaker 2: like when you think about these things, when you think
Speaker 2: about the fact that there's a global market, and so
Speaker 2: if someone if a country is not going to get
Speaker 2: their gas from the US, they'll get it elsewhere. And
Speaker 2: of course it's very important that the US was in
Speaker 2: a position to step up for energy exports, especially when
Speaker 2: the war in Ukraine happened. I'm just trying to think
Speaker 2: about the concern of further expansion of our export capacity
Speaker 2: if in fact that's what the world wants for the
Speaker 2: global market.
Speaker 6: So, first of all, just to underscore that forty eight
Speaker 6: billion cubic feet day that is almost meeting what demand
Speaker 6: is going to be by twenty fifty. It's just a
Speaker 6: huge amount of If it's all built out now, it
Speaker 6: may not all be built out to your point. You know,
Speaker 6: the companies themselves have to get a final investment decision,
Speaker 6: and if the demand is not projected to be there
Speaker 6: for that, maybe that won't all be built out. But
Speaker 6: it is true the US has an advantage in producing
Speaker 6: clean gas. Cutter is trying to rival us. But we
Speaker 6: would like to see the furtherance of a whole methane
Speaker 6: mitigation and monitoring regime that we do with our allies
Speaker 6: so that we can reduce the greenhouse gas emissions, especially
Speaker 6: particularly methane emissions from LNG and at the point of
Speaker 6: combustion reducing the CO two emissions as well. So there's
Speaker 6: work to be done on that to create a you know,
Speaker 6: an environment where we are producing the cleanest gas and
Speaker 6: it's being used in the cleanest way, and the US
Speaker 6: is going to be in that in that role, and
Speaker 6: in fact, the oil and gas majors very much want
Speaker 6: to see us to continue to have an effort globally
Speaker 6: and to be leading an effort to reduce methane emissions
Speaker 6: globally so.
Speaker 5: That their product is the product of choice.
Speaker 3: So the other thing that's happened in the past four
Speaker 3: years is we've had the rise of generative AI and
Speaker 3: booming demand for data centers, which obviously use a lot
Speaker 3: of energy. How has that impacted your role at the DOE.
Speaker 3: Is it an opportunity for you to maybe push clean
Speaker 3: energy a little more if you're dealing with tech companies
Speaker 3: that have made clean energy commitments.
Speaker 6: Yeah, this is such a great question and so important.
Speaker 6: We recently today actually in fact, our Lawrence Berkeley National
Speaker 6: Laboratory released a report talking about the increase in demand
Speaker 6: based upon data centers alone on the grid, and we
Speaker 6: are going to have to add lots of gigawatts to
Speaker 6: be able to meet that. And so the conversations that
Speaker 6: we've been having and the White House is convened the
Speaker 6: hyperscalers as they for. We want the data centers to
Speaker 6: be built in the United States for national security reasons,
Speaker 6: particularly AI, the learning model data centers. We want the
Speaker 6: hyperscalers to bring their own power, meaning that we don't
Speaker 6: want the energy suck from these data centers to be
Speaker 6: socialized across the rate base. Everyday citizens shouldn't have to
Speaker 6: pay for that, and we want it to be clean.
Speaker 6: And they've all committed, they've committed to their shareholders and
Speaker 6: their strategic plans to use clean power. And so as
Speaker 6: a result, I mean, you're seeing some very interesting announcements
Speaker 6: where you've got hyper scalers teamed up with for example,
Speaker 6: small module or reactor companies, or nuclear companies, or geothermal
Speaker 6: companies like Fervo, who I know you talked to at
Speaker 6: the Deploy twenty four conference, or companies or hyper scalers
Speaker 6: that have really wanted to build out solar plus storage
Speaker 6: sent to their sites or at least do power purchase
Speaker 6: agreements that allow them to power to purchase clean power
Speaker 6: for their data centers. So it's going to this new demand,
Speaker 6: to your point, is going to be built out. It's
Speaker 6: probably going to be built out largely with clean energy.
Speaker 6: And you know, and the good news is we can
Speaker 6: do this.
Speaker 5: We can do this.
Speaker 6: I mean, this year alone, we will have added sixty
Speaker 6: gigawats thirty Hoover Damsworth of clean power to the US
Speaker 6: electric grid. And these data centers, you know, if there's
Speaker 6: fifty of them, they may if they're gigawat data centers,
Speaker 6: that may be you know, fifty gigawatts. That's you know,
Speaker 6: probably the outs the high mark of what they would
Speaker 6: be building out in the United States. For sure, that
Speaker 6: seems ambitious. But if we're adding sixty gigawats this year alone,
Speaker 6: without them bringing their own power, because they're just starting
Speaker 6: to cite these facilities, we can do this and it's exciting.
Speaker 4: I know.
Speaker 2: We just have like a minute left, So I'm going
Speaker 2: to ask you a huge question, and you could truncate
Speaker 2: as much as you want. When you came into the office,
Speaker 2: the DIE is largely known in large part for a
Speaker 2: nuclear waste storage and you've talked about the dramatic changes
Speaker 2: in terms of the mission of deployment and so forth.
Speaker 2: For someone coming into running a new organization of any
Speaker 2: sort that has to do some major mission change. What's
Speaker 2: been the biggest lesson or surprise to you about what
Speaker 2: that takes.
Speaker 6: Well, let me just say, I don't know if it's
Speaker 6: a surprise, because I heard before I got here that
Speaker 6: this was true. But we have the most amazing team
Speaker 6: of people at the Department of Energy, the folks who
Speaker 6: have been working here for years and the new ones
Speaker 6: that we've hired about one thousand new people for this
Speaker 6: new mission of deployment that we have. You know, I'm
Speaker 6: so proud to be to be leaving to my successor
Speaker 6: a department that is full of unbelievable smart professionals. Forty
Speaker 6: thousand scientists at our national labs, people who understand both
Speaker 6: communities as well as technologies as well as the market.
Speaker 6: It's really it's an amazing place, the Department of Energy.
Speaker 6: This has been the best job I have ever had
Speaker 6: because of the team and the brilliance of the team here.
Speaker 6: So it is I feel wistful leaving, but I am
Speaker 6: I'm proud that we're leaving such a great legacy.
Speaker 2: Secretary Jennifer Grenholm, thank you so much for coming on
Speaker 2: our books.
Speaker 4: You bet, thanks so much, Tracy.
Speaker 2: I thought that was a great conversation. Before we go
Speaker 2: any further. The energy historian I always talk about in
Speaker 2: the beginning, that was a Vaklovsmill, who is a famous
Speaker 2: book Energy and Civilization, a history like these are the
Speaker 2: big questions of the world.
Speaker 3: No, I need to read that. Yeah, that looks really good. Yes, okay,
Speaker 3: so a conversation about big questions. I do think to
Speaker 3: your point you asked this question, but it is kind
Speaker 3: of funny that every four years the US can completely
Speaker 3: redefine its major political priorities in this way, and to
Speaker 3: some extent, start from scratch. That said, as the Secretary
Speaker 3: was pointing out, there are some areas of overlap, so
Speaker 3: nuclear and geothermal would be one of them. With geothermal,
Speaker 3: I sometimes wonder, like how much Republicans like it just
Speaker 3: because it's guys with like giant drills doing like cool stuff.
Speaker 2: Well, you know what I was. I was joking about
Speaker 2: this with a friend. But if the best thing that
Speaker 2: would happen for the geothermal industry, would for its durability,
Speaker 2: would be for Democrats to start attacking it and see,
Speaker 2: this is just shale trying to reinvent itself, Like that
Speaker 2: would be a really good thing if it became really like,
Speaker 2: how do you ensure it's uh, you know, get the
Speaker 2: environmentalists to say, oh, this is just the shale bros
Speaker 2: trying to maintain, you know, trying to reinvent themselves in
Speaker 2: some new clean way. That would probably ensure a lot
Speaker 2: of bipartisan support for it.
Speaker 6: Yeah.
Speaker 3: I think that's a great strategy. Okay, Look, but there
Speaker 3: is also there's this tension that the Secretary was getting at,
Speaker 3: which is this idea that like, Okay, on the one hand,
Speaker 3: maybe the incoming administration. They are not the biggest clean
Speaker 3: energy fans, let's just put it that way. But on
Speaker 3: the other hand, they are very keen to boost US
Speaker 3: domestic manufacturing. They're very keen to compete against places like China,
Speaker 3: and if a lot of Chinese manufacturing dominance is coming
Speaker 3: from things like evs or solar panels, it seems like
Speaker 3: it can be an administrative priority.
Speaker 2: Your characterization of the new administration, i'd say is mostly right,
Speaker 2: But people forget that Elon is a big solar bro. Yeah,
Speaker 2: he's a First of all, he's an EV magnet.
Speaker 3: Well, he's got a loan from the loan programs.
Speaker 4: He did that too.
Speaker 2: But he's also very bullish. He doesn't actually talk about
Speaker 2: it very much, and so who knows exactly what that
Speaker 2: means in terms of how it translates into policy. He's
Speaker 2: talked a lot about how bullish on solar So I
Speaker 2: think there's just a lot of questions. And then on
Speaker 2: the sort of more nuts and bolts political durability setting aside,
Speaker 2: where the Venn diagram overlaps in terms of priorities. As
Speaker 2: the Secretary said, there's just a lot of investments in
Speaker 2: red districts or red states, and it'll be a very
Speaker 2: interesting question to see how much appetite there is for
Speaker 2: reversing some of these things.
Speaker 4: Yeah.
Speaker 3: Absolutely, Shall we leave it there?
Speaker 2: Let's leave it there.
Speaker 3: This has been another episode of the Authoughts podcast. I'm
Speaker 3: Tracy Alloway. You can follow me at Tracy Alloway and.
Speaker 2: I'm Joe Wisenthal. You can follow me at the Stalwart.
Speaker 2: You can follow our guest secretary Jennifer Granholmes. She's at
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Speaker 2: armand dash O Bennett at dashbot in Calebrooks at Calebrooks.
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