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Speaker 1: It's going to be extremely humid, disrespectfully humid tomorrow. So

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Speaker 1: here's what's happening about. One nineteen in Hillsborough, one fifteen

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Speaker 1: in Corsic, fifteen in Waxahatchet one sixteen and four and

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Speaker 1: Taro one O eight and Debt in one O seven

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Speaker 1: and can So you get the idea dangerous.

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Speaker 2: I'm West Kosova today on the Big Take. You think

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Speaker 2: it's hot, now, well, imagine if the AC went out.

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Speaker 3: The unrelenting temperature straining the power grid as the state

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Speaker 3: set a June record for energy demand, the historic heat

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Speaker 3: buckling roads from the Lone Star State to Louisiana, the.

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Speaker 2: Crippling US heat wave that's smothering Texas and spreading across

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Speaker 2: the South means millions of miserable people seeking relief are

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Speaker 2: doing what you'd expect. They're cranking up the air conditioning,

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Speaker 2: and that is pushing America's aging, over tax power grid

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Speaker 2: to the max. With concerns about rolling blackouts or just

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Speaker 2: playing shutdowns.

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Speaker 4: To say it's a lot of work as a massive understatement,

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Speaker 4: but there is an urgency to deal with this because

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Speaker 4: we do have this very real climate threat and we're

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Speaker 4: racing against the clock.

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Speaker 2: Noreen Malick reports on the power industry for Bloomberg. She's

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Speaker 2: here to tell us about why our grid is still

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Speaker 2: so fragile and what can be done to future proof

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Speaker 2: the system for a world where extreme weather shocks are

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Speaker 2: becoming more frequent, and not just in summer, by the way,

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Speaker 2: these problems are just as bad in winter, and maybe worse. Noreen,

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Speaker 2: you have been writing a lot of stories lately about

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Speaker 2: this unbelievable heat wave across the South and especially in Texas.

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Speaker 2: Obviously it's making a whole lot of people miserable, but

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Speaker 2: it's putting a huge strain on the energy grid and

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Speaker 2: the ability just to keep up with the demands that

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Speaker 2: everybody has.

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Speaker 4: Yeah, so Texas is an outlier in the US because

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Speaker 4: demand is growing so fast. In Texas, it's one of

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Speaker 4: the fastest, if not the fastest, outright. What that means is,

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Speaker 4: over the last several years, they've had a population boom

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Speaker 4: with people moving in from California and other states, and

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Speaker 4: then you've had businesses expanding. On top of that, you've

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Speaker 4: had strong economic growth, and then you've also had bitcoin miners,

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Speaker 4: which are heavy power users, come in. In the last

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Speaker 4: couple of years. So you've set up this base demand

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Speaker 4: for power is growing, and then on top of that,

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Speaker 4: every time you add heat, it like multiplies how much

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Speaker 4: demand because they're all cranking up their air conditioners.

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Speaker 5: And something you may not know.

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Speaker 4: About Texas is that they use a lot of AC

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Speaker 4: compared to the rest of the country. Like one megawatt,

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Speaker 4: which is a unit of how you measure electricity, can

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Speaker 4: provide power for typically two hundred homes in Texas and

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Speaker 4: the rest of the country that's closer to like eight hundred.

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Speaker 2: Homes, and that's all because of air conditioning.

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Speaker 4: Well, it's just Texas homes are bigger. Somebody wants described

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Speaker 4: to me.

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Speaker 5: There's a lot of.

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Speaker 4: Big foyers and big homes there.

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Speaker 5: They all use a lot of electricity. But it's also

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Speaker 5: swimming pools.

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Speaker 4: And then of course gadgets and evs are coming online,

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Speaker 4: but that's more newer on the EV side.

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Speaker 2: And the heat in Texas, even for Texas in the summertime,

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Speaker 2: is pretty extreme.

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Speaker 4: Yeah, So anytime you have any type of weather driven demand,

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Speaker 4: the amount of electricity or energy.

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Speaker 5: Used escalates very quickly.

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Speaker 4: And if you're talking about ninety to eight degrees versus

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Speaker 4: one hundred and two degrees. That may seem like four

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Speaker 4: degrees is not that much, but when it comes to

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Speaker 4: air conditioning demand, the increase is way bigger.

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Speaker 2: So Norne just to give people an idea of what

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Speaker 2: it means when there's so much demand put on the

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Speaker 2: energy grid. What's happened to energy prices in Texas?

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Speaker 4: Yeah, so electricity prices are extremely volatile. Just in the

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Speaker 4: first fifteen days of June, we've seen prices go from

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Speaker 4: like forty dollars per mega wadd hour you know, normal demand,

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Speaker 4: to forty five hundred dollars when it was an extremely

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Speaker 4: hot day for several hours.

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Speaker 2: From forty one dollars to over four thousand dollars in

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Speaker 2: one day.

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Speaker 4: Yeah, I mean, it's not impossible to see that type

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Speaker 4: of swing within a day, but then also across days.

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Speaker 4: So the way power is priced, it's priced on a

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Speaker 4: five minute basis, hourly basis, so there's a lot of

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Speaker 4: way to splice it. So the average for the day

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Speaker 4: was not four thousand, It was probably a few hundred dollars,

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Speaker 4: But then there are certain hours around six seven PM

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Speaker 4: where it was four thousand dollars per mega wad hour.

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Speaker 2: And the reason why energy prices for natural gas, which

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Speaker 2: is what the grid mostly operates on, are so high

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Speaker 2: is I guess it's sort of akin to uber surge pricing.

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Speaker 2: When everybody is looking for an uber the prices go up,

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Speaker 2: and if everybody wants your energy, you get to charge

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Speaker 2: more for it because there's no other place to go.

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Speaker 4: Natural gas is the number one driver, and then you

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Speaker 4: also have wind and solar. But what happens is exactly

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Speaker 4: what you're saying. When you have those high demand periods,

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Speaker 4: the price of electricity is set by the most expensive unit.

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Speaker 4: So let's say on an average day, like if you're

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Speaker 4: thinking about uber, everyone's driving like a Honda or a

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Speaker 4: camera that's pretty fuel efficient. But let's say during rush hour,

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Speaker 4: in a thunderstorm or a heat wave. I guess in

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Speaker 4: Texas you have to bring out the Lamborghinis and Ferraris.

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Speaker 4: Those are not fuel efficient, but everyone gets paid the

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Speaker 4: price of the Ferrari in a Lamborghini, even if it's

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Speaker 4: just some of the megawatts used.

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Speaker 2: So when it surges like that, how much more does

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Speaker 2: it cost? In total?

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Speaker 4: It can cost billions of dollars over the course of

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Speaker 4: days because you're pricing this every five minutes, every hour.

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Speaker 5: Yeah, it quickly adds up.

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Speaker 4: It takes time to filter out to customers depending on

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Speaker 4: how they get builled. Texas households may have locked in

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Speaker 4: a six month power rate, so that sets their price,

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Speaker 4: say like ten cents per kill awot hour. Some power

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Speaker 4: retailers will have fine prints. Well, if there is a

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Speaker 4: rally in gas or power prices in real time, we

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Speaker 4: will push on those costs to.

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Speaker 5: You right away.

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Speaker 4: For others, there's a lag. Customers will eventually pay for

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Speaker 4: all of this, It just depends on how soon.

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Speaker 2: And so Texas has been taken all kinds of measures

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Speaker 2: to try to cut energy usage, asking people not to

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Speaker 2: use as much. Is that realistic?

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Speaker 4: So the Electric Reliability Council of Texas or ORCOTT, which

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Speaker 4: is what the state grid operator is called, has been

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Speaker 4: more proactive and they have been putting out weather watches

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Speaker 4: like this is the first summer they started putting out

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Speaker 4: a weather watch to warn people of tight conditions, asking

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Speaker 4: consumers to make cuts where it was safe to turn

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Speaker 4: up their thermost to help keep the grid stable and

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Speaker 4: avoid a shortage.

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Speaker 2: Another thing you report, which I thought was interesting, you

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Speaker 2: mentioned bitcoin miners which have moved into Texas and they

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Speaker 2: use a ton of energy running those big hot supercomputers.

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Speaker 2: They have slowed down in kind of stopped operations sometime.

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Speaker 4: Yeah, so bitcoin mining is really interesting because these are

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Speaker 4: basically computing centers. They look like data centers from the outside,

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Speaker 4: but obviously very sophisticated machines on the inside, but they

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Speaker 4: have the capability to turn on and off really quickly.

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Speaker 4: There's about two thousand megawatts of bitcoin mining in Texas.

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Speaker 5: That's the equivalent of like, let's say, two.

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Speaker 4: Large nuclear plants, and so they see high power prices

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Speaker 4: in the thousand dollars range, it makes sense to shut

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Speaker 4: down and not operate because they're not using that much.

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Speaker 4: But at the same time, not only are they saving money,

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Speaker 4: but some of that is actually participating in a grid

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Speaker 4: program where they get paid to curtail. And that's when Urkot,

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Speaker 4: the grid operator, tells them, hey, can you like ramp

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Speaker 4: down a little bit or a lot so that we

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Speaker 4: can reduce stress on the grid and send that power

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Speaker 4: to somebody else.

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Speaker 2: We're talking about natural gas power, but you know, Texas

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Speaker 2: has a lost sun, Texas has a lot of wind.

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Speaker 2: How much can those forms of renewable energy we talk

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Speaker 2: about all the time help out.

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Speaker 4: In the current heat wave, actually solar is doing really well.

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Speaker 4: It's maxing out. It's considered to have a summer capacity

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Speaker 4: of like more than twelve thousand megawatts, so when the

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Speaker 4: sun is shining mid morning to like when the sun sets,

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Speaker 4: it's operating pretty much close to max capacity. And that's

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Speaker 4: been a real benefit for the grid. If you think

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Speaker 4: about twelve thousand megawatts versus like record demand, which was

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Speaker 4: eighty thousand megawatts last year a little more than that,

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Speaker 4: that's a significant chunk. And then wind has actually been

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Speaker 4: low in the middle of the afternoon. That has actually

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Speaker 4: been one of the reasons that supply is really tight

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Speaker 4: and ARCOT they now have so much demand growth that

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Speaker 4: they actually need renewables to kick in to keep the

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Speaker 4: lights on. A regulator recently told me that RKOT is

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Speaker 4: beholden to the breath of God. That basically means if

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Speaker 4: the wind picks up and it's supposed to get stronger,

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Speaker 4: then that gives more bandwidth for URKOTT to like operate

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Speaker 4: the grids safely and not really worry.

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Speaker 2: And of course sun just goes down every day, so

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Speaker 2: at night you're never going to have that solar power.

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Speaker 5: That's actually the riskiest part of the day.

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Speaker 4: Historically, you know, the grids have always been set up

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Speaker 4: to deal with peak summer demand the hottest hour of

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Speaker 4: the day, and that was usually like five or six pm.

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Speaker 4: But now since we have solar, the risk has actually

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Speaker 4: shifted to late afternoon when the sun is starting to set,

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Speaker 4: or the evening hours when there is no sun, and

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Speaker 4: that's really when you need everything else to like ramp

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Speaker 4: up quickly or be strong, and so that risk can

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Speaker 4: actually be at like seven, eight or nine pm.

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Speaker 2: Noreen, We're talking all about Texas just because so big

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Speaker 2: and so hot, but it's also hot across the South,

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Speaker 2: and Texas is a bit of an outlier because they

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Speaker 2: run their own power grid. What are other states experiencing

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Speaker 2: right now and how are they dealing with it?

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Speaker 4: Yeah, so Texas is unique because not only do they

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Speaker 4: run their own power grid, but they have very few

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Speaker 4: links to other grids, so they have to kind of

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Speaker 4: be self sufficient. But the nearby grids are also facing stress.

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Speaker 4: The one directly to the east and it kind of

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Speaker 4: like has a slice of Texas and goes all the

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Speaker 4: way to the Great Lakes is the Miso grid. The

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Speaker 4: mid Continent Independent System Operator. They have actually put out

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Speaker 4: an alert for operating the grid conservatively in their southern region,

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Speaker 4: which includes Mississippi, Arkansas, Louisiana, these different grids. When they

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Speaker 4: see a heat event coming, they will tell any power

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Speaker 4: plant or operator of transmission lines or other infrastructure to

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Speaker 4: cancel all maintenance so that basically everything is lined up

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Speaker 4: and ready to go. And so that's like a first

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Speaker 4: call to arms.

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Speaker 2: So the storage problem, which is one of the reasons

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Speaker 2: why we have these big spikes in energy prices because

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Speaker 2: there's no buffer, is something that other states are starting

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Speaker 2: to look at. You write about New York, which I

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Speaker 2: guess is testing out this giant battery.

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Speaker 4: New York's largest battery is about seven point five megawatts

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Speaker 4: and it's a four hour battery. If you ran that

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Speaker 4: battery out for four hours at full capacity, that would

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Speaker 4: be enough to charge one point five million phones. It

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Speaker 4: makes a difference in extreme weather events, but it's the

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Speaker 4: tip of the iceberg.

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Speaker 2: And I guess that's a really big point that you

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Speaker 2: also write about, which is that the US Department of

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Speaker 2: Energy says the US is far behind in building what

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Speaker 2: we need to keep up with increasing demand.

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Speaker 4: Yes, so the energy transition is not going as fast

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Speaker 4: as it needs to be. The Energy Department has estimated

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Speaker 4: that about thirty to fifty gigawatts of clean energy is

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Speaker 4: built a year, and that pace needs to quicken to

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Speaker 4: ninety gigawatts. There's a lot of people in finance, in developers,

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Speaker 4: venture capital, policy makers on a state federal level trying

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Speaker 4: to find a way to make it easier to connect

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Speaker 4: these projects so that they could be connected faster. It's

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Speaker 4: going to take some time to figure this out, and

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Speaker 4: the concern is can you put all these pieces together,

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Speaker 4: get through all the red tape To say it's a

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Speaker 4: lot of work as a massive understatement, but there is

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Speaker 4: an urgency to deal with this because we do have

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Speaker 4: this very real climate threat and we're racing against the clock.

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Speaker 2: After the break, even with the heat, the power industry

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Speaker 2: is racing for winter.

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Speaker 6: A snowstorm and brutal cold hit an unprepared energy system

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Speaker 6: and left nearly five million customers in Texas, North Dakota, Arkansas, Louisiana,

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Speaker 6: and Mississippi in the dark. Power companies in affected states

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Speaker 6: had to resort to rolling power to save their networks

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Speaker 6: from collapsing, leaving households and businesses without power and.

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Speaker 2: Heat norhen here we are sitting in the middle of

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Speaker 2: the summer talking about heat. But one really interesting thing

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Speaker 2: you write is that the heat is only part of

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Speaker 2: the problem, and maybe not even the biggest. It's when

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Speaker 2: winter comes. It seems a long way off, but it's

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Speaker 2: the cold that often puts the biggest stress on the

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Speaker 2: energy grid.

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Speaker 4: Yeah, and actually, how this summer plays out is going

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Speaker 4: to directly determine what happens next winter. And what I

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Speaker 4: mean by that is the summer months are when you

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Speaker 4: refill all the natural gas inventories. You know, the last

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Speaker 4: couple of summers, demand has been super high for natural

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Speaker 4: gas being burned by power generators, and so that limited

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Speaker 4: the amount of inventories that were there ahead of winter.

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Speaker 4: So if we're burning through that gas now, there's going

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Speaker 4: to be less ready and stuff piles for next winter.

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Speaker 2: And I want to ask you about one big storm

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Speaker 2: that you write about which served as the kind of

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Speaker 2: moment where the energy industry realized they needed to do something,

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Speaker 2: and that was winter Storm Elliot in December twenty twenty two.

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Speaker 4: Winter Storm Elliott was a really big wake up call

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Speaker 4: because most of the attention at the time was focused

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Speaker 4: on like Kentexas survive this after the winter storm Uri

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Speaker 4: like two years ago, and what happened was the greatest

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Speaker 4: risks emerged on the East coast. Elliott was a fast

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Speaker 4: moving winter storm that moved across from like the northwest,

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Speaker 4: across the central US and it hit the East coast

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Speaker 4: on December twenty third. And the storm moved so quickly

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Speaker 4: it caused temperatures on the PJAM grid, which stands for

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Speaker 4: historically Pennsylvania, New Jersey and Maryland. It was the cornerstone

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Speaker 4: of what is now the largest US power grid, which

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Speaker 4: stretches basically from New Jersey to the northern edge of

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Speaker 4: North Carolina and out to like Illinois. It serves more

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Speaker 4: than sixty five million Americans. The storm caused temperatures to

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Speaker 4: fall by twenty nine degrees in twelve hours. That was

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Speaker 4: the fastest drop in temperature in history for that grid.

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Speaker 4: If you had a slower moving storm and you knew

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Speaker 4: it was going to get cold, you would have power

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Speaker 4: plants that would have time to find fuel or to

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Speaker 4: make preparations.

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Speaker 5: This was so fast moving.

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Speaker 4: It was at the start of a three day holiday weekend,

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Speaker 4: when you know people are already on vacation, and so

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Speaker 4: there were not enough people around. Trading floors at natural

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Speaker 4: gas desks were closed. This is typical every weekend and

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Speaker 4: every long weekend, but when you have an extreme weather

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Speaker 4: come in, it creates a scramble.

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Speaker 2: And so what happened to all those people who were

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Speaker 2: supposed to be on the receiving end of all that

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Speaker 2: gas powered electricity.

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Speaker 4: What was difficult about this storm is that the failures

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Speaker 4: were really widespread. In terms of the causes, the gas

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Speaker 4: industry was probably the best indicator that there was trouble

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Speaker 4: to come, because gas prices are really reactive to weather events.

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Speaker 4: They tend to look at a forecast two weeks out

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Speaker 4: in advance, and then if that forecast is reaffirmed every

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Speaker 4: day and is still as intense by the time you

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Speaker 4: were five days, three days or the next day out,

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Speaker 4: gas prices just like go off the charts. And so

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Speaker 4: what happened in the US and in Pjam gas prices

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Speaker 4: started rallying ahead of time. So that was a good

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Speaker 4: sign and that thing that there could be trouble or

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Speaker 4: that there were tight gas supplies. It was on the

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Speaker 4: morning of December twenty third, it was still fifty degrees

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Speaker 4: in places like Pennsylvania. But you saw power generators start

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Speaker 4: to drop off the grid, and one of the concerns

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Speaker 4: we heard was that the rally and gas prices was

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Speaker 4: higher than power prices, and so if they decided to

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Speaker 4: run on December twenty third, they would have been operating

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Speaker 4: at a loss by the time temperatures dropped, especially on

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Speaker 4: December twenty fourth, that's when you actually started to see

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Speaker 4: significant drops in gas production. The Appalachian regions, which is

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Speaker 4: the Marcellus and Utica shale drops significantly. Utica fell by

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Speaker 4: about half and Pennsylvania fell by about twenty percent. Anytime

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Speaker 4: you see gas production falling off, so there's less gas

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Speaker 4: going onto pipelines, and there is high demand on the

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Speaker 4: other side, which is homes, businesses, and power plants tapping

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Speaker 4: those pipelines more, it creates a pressure imbalance.

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Speaker 2: Describe what you mean by pressure issues for people like

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Speaker 2: me who don't understand the technical aspects of delivering gas

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Speaker 2: through a pipeline to a power plant.

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Speaker 4: When you're expecting a cold weather event, pipeline operators will

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Speaker 4: do something called line pack. That's when they basically increase

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Speaker 4: how much gas is being pumped into a pipeline system,

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Speaker 4: and then you want to make sure that it evens

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Speaker 4: out like over like long distances. But if you can

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Speaker 4: pump these molecules and they're more condensed, you have higher pressure.

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Speaker 4: The idea is you use the pipelines as a storage system,

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Speaker 4: so when demand comes online, you are ready instantaneously to

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Speaker 4: tap that. Utilities we heard were taking a lot of

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Speaker 4: gas off the system because homeowners and businesses were turning

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Speaker 4: up their heaters. That means that they're taking off gas

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Speaker 4: at a faster rate than it can be put on,

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Speaker 4: and so that changes the difference in pressure, and that

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Speaker 4: can create instability.

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Speaker 5: It's like if you're in a traffic jam.

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Speaker 4: If suddenly you have a car that starts and stops

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Speaker 4: in the middle, it creates like this halted flow of traffic.

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Speaker 4: But if everyone just drives at ten miles per hour,

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Speaker 4: you'll all just suddenly keep moving in a flow and

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Speaker 4: the exits will keep flowing out if there's no other

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Speaker 4: acts on the end.

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Speaker 2: And so the danger is if there isn't enough gas

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Speaker 2: coming through, then you lose that pressure. So they have

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Speaker 2: to keep up a constant supply.

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Speaker 4: Yeah, if the pressure gets too low, you cannot run

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Speaker 4: power plants at some level that happened during winter Storm

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Speaker 4: Ury in Texas. There was a sudden drop in gas.

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Speaker 4: They couldn't maintain the pressure and power plants had to

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Speaker 4: shut down, and that contributed to the blockouts.

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Speaker 2: And in this winter storm Elliott in December, you right

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Speaker 2: that there is this scramble to try to find gas

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Speaker 2: to keep it flowing into the plant to keep up

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Speaker 2: this pressure.

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Speaker 4: So there was a mad scramble because the gas industry

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Speaker 4: operates on a different schedule from the power industry. When

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Speaker 4: you're thinking about buying power for the next day and

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Speaker 4: the day ahead market, your day starts at midnight and

359
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Speaker 4: is it you know, for the full twenty four hour

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Speaker 4: it's for that one day, But the gas day starts

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Speaker 4: at ten am. So on Friday, December twenty third, if

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Speaker 4: you had a problem at like nine am that you

363
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Speaker 4: suddenly needed gas, you actually had to have that secured

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Speaker 4: on Wednesday because that would have fallen into that day

365
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Speaker 4: ahead schedule for a gas So that is a fundamental

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Speaker 4: issue that exists every day and is a problem every weekend.

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Speaker 4: But you know, when you don't have a high demand day,

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Speaker 4: you know there's ways around it. There's enough spare supply

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Speaker 4: to like tap into. The other problem is this is

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Speaker 4: a three day weekend. The gas industry basically shuts down

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Speaker 4: every Friday. There are always traders and like some folks

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Speaker 4: around that can help you fill in for a last

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Speaker 4: minute fuel, but for the most part, people are out

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Speaker 4: for the weekend. And then on top of that, this

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Speaker 4: was a holiday weekend, so they were on vacation for real,

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Speaker 4: but also like for three days.

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Speaker 5: So if you were.

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Speaker 4: Trying to buy gas for like Christmas, which is on Monday,

379
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Speaker 4: you had to know what that demand was going to

380
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Speaker 4: be on Friday. When you have a fast moving storm,

381
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Speaker 4: it's always hard to predict what actually is going to

382
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Speaker 4: show up. Usually demand on a holiday weekend is week

383
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Speaker 4: The fact that demand came in really strong was another

384
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Speaker 4: surprising factor, and that added to the scramble.

385
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Speaker 2: So this is obviously a pretty extreme example, but I

386
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Speaker 2: think a lot of people listening to this will be

387
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Speaker 2: pretty surprised to hear just how it kind of catches

388
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Speaker 2: catch can it can be to keep all of our

389
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Speaker 2: lights on how common an occurrence is this.

390
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Speaker 4: I've covered gas for a long time and then covered power,

391
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Speaker 4: and I remember gas every weekend were like, our price

392
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Speaker 4: is going crazy. It's an issue every weekend and every

393
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Speaker 4: long weekend. A power generator executive testified at the Federal

394
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Speaker 4: Energy Regulatory Commission at a mid June meeting saying, the

395
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Speaker 4: Intercontinental Exchange, which is where you buy a lot of

396
00:21:56,200 --> 00:21:59,399
Speaker 4: your spot gas purchases if you were a power plant,

397
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Speaker 4: is telling folks that for the upcoming July fourth holiday,

398
00:22:03,480 --> 00:22:06,679
Speaker 4: you have to buy your gas on Friday. The point

399
00:22:06,720 --> 00:22:09,960
Speaker 4: that this executive was making was that if there was

400
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Speaker 4: an extreme weather event, then that would create another big

401
00:22:14,280 --> 00:22:19,720
Speaker 4: round of uncertainty and another scramble if things got severe.

402
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Speaker 2: When we come back, what can we do to bulk

403
00:22:21,960 --> 00:22:33,639
Speaker 2: up the grid and avert all these troubles. What are

404
00:22:33,680 --> 00:22:38,000
Speaker 2: the companies actually doing to try to fix this boom

405
00:22:38,080 --> 00:22:41,760
Speaker 2: in bus cycle that seems to happen with great regularity.

406
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Speaker 4: So the boom in bus cycle is kind of like

407
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Speaker 4: subdued or you can ride the waves like on a

408
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Speaker 4: normal day on extreme weather events. There have been a

409
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Speaker 4: lot of efforts in the last decade. This is not

410
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Speaker 4: a new issue to increase coordination communication with the gas

411
00:22:58,840 --> 00:23:03,840
Speaker 4: industry the power industry because power is considered a public

412
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Speaker 4: good and you need to keep the lights on to

413
00:23:06,880 --> 00:23:11,240
Speaker 4: keep the economy running. There are standards that power generators

414
00:23:11,400 --> 00:23:15,440
Speaker 4: utilities have to follow to ensure that they can operate

415
00:23:15,760 --> 00:23:19,640
Speaker 4: throughout the year and especially during cold weather events. Now

416
00:23:19,680 --> 00:23:22,040
Speaker 4: there's a lot of criticism that those standards don't go

417
00:23:22,160 --> 00:23:26,600
Speaker 4: far enough, but the gas industry does not fall under

418
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Speaker 4: that realm of oversight, and there have been calls that

419
00:23:30,359 --> 00:23:34,800
Speaker 4: the gas industry needs to have weatherization standards and needs

420
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Speaker 4: to communicate more, disclose more information with the power industry.

421
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Speaker 2: You've talked about PGM and how they've faced some of

422
00:23:42,880 --> 00:23:45,760
Speaker 2: these problems. What does the company say about this.

423
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Speaker 4: PJM is technically a corporation, but it's considered a quasi

424
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Speaker 4: government agency appointed by the federal government to run this

425
00:23:56,680 --> 00:24:01,359
Speaker 4: thirteenth state grid. They have said that the large number

426
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Speaker 4: of outages driven by natural gas plants was unacceptable and

427
00:24:06,560 --> 00:24:10,080
Speaker 4: that a large portion of them were because of equipment

428
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Speaker 4: outages versus gas availability.

429
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Speaker 2: NARIM, is there a concern that we're going to start

430
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Speaker 2: to see more and more of this happening across the country.

431
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Speaker 5: That's certainly the fear.

432
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Speaker 4: I spoke to Mark Christi, who is a commissioner on

433
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Speaker 4: the Federal Energy Regulatory Commission, which is the agency that

434
00:24:27,480 --> 00:24:32,520
Speaker 4: oversees the power industry. He's been warning about these reliability

435
00:24:32,560 --> 00:24:37,080
Speaker 4: concerns and concerns related to the gas deliverability issues for

436
00:24:37,280 --> 00:24:39,560
Speaker 4: over a year now, but then when we spoke with

437
00:24:39,640 --> 00:24:44,439
Speaker 4: him recently, he said that these concerns are accelerating because

438
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Speaker 4: you can't save power like in a barrel of oil.

439
00:24:47,320 --> 00:24:50,040
Speaker 4: The power grid has to be balanced every minute of

440
00:24:50,080 --> 00:24:50,520
Speaker 4: the day.

441
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Speaker 5: It's very specific.

442
00:24:52,520 --> 00:24:56,159
Speaker 4: If you lose that balance too much for too many minutes,

443
00:24:56,200 --> 00:24:58,879
Speaker 4: the grid is subject to failure. That's what almost happened

444
00:24:58,920 --> 00:25:02,639
Speaker 4: in Texas in twenty two. Anyone what winter Storm Elliott was.

445
00:25:02,720 --> 00:25:05,760
Speaker 4: It was a warning that you cannot say that you

446
00:25:05,920 --> 00:25:08,760
Speaker 4: have a lot of extra power plants on the grid

447
00:25:08,800 --> 00:25:12,040
Speaker 4: and you'll be okay. They are now taking another look

448
00:25:12,119 --> 00:25:15,159
Speaker 4: and saying we need to see what actually shows up

449
00:25:15,200 --> 00:25:17,920
Speaker 4: in these extreme weather events, whether it's in the summer

450
00:25:18,040 --> 00:25:18,520
Speaker 4: or winter.

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00:25:21,480 --> 00:25:25,359
Speaker 2: Maurine is a power industry looking beyond natural gas to

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00:25:25,880 --> 00:25:27,240
Speaker 2: get past some of these problems.

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00:25:27,840 --> 00:25:31,800
Speaker 4: Yes, the power industry is definitely looking beyond gas, but

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00:25:31,920 --> 00:25:36,760
Speaker 4: that is a complicated answer because there is no obvious

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00:25:36,800 --> 00:25:40,400
Speaker 4: replacement to natural gas. Natural gas right now is needed

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00:25:40,640 --> 00:25:43,640
Speaker 4: to provide a lot of the power on the grid.

457
00:25:43,680 --> 00:25:46,040
Speaker 4: But as we go forward, as we have more renewables

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00:25:46,080 --> 00:25:48,280
Speaker 4: hook up to the grid, gas isn't going to be

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00:25:48,400 --> 00:25:51,200
Speaker 4: used as much every hour of the day, but you're

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00:25:51,240 --> 00:25:53,520
Speaker 4: going to need it more and more to step in

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00:25:53,880 --> 00:25:58,000
Speaker 4: dependably on those most critical hours when the sunset and

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00:25:58,080 --> 00:26:01,040
Speaker 4: all that solar goes offline, or when there's a low

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00:26:01,080 --> 00:26:05,160
Speaker 4: wind day. There isn't enough battery storage to make up

464
00:26:05,200 --> 00:26:07,720
Speaker 4: for all of that, and you still need to actually

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00:26:07,880 --> 00:26:09,280
Speaker 4: like produce.

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00:26:08,920 --> 00:26:10,240
Speaker 5: Power to store in batteries.

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00:26:10,720 --> 00:26:13,480
Speaker 4: So the benefit we saw from gas in the last

468
00:26:13,520 --> 00:26:17,760
Speaker 4: decade is it was easy to replace coal. It was

469
00:26:17,800 --> 00:26:21,240
Speaker 4: an easy answer. One megawat from a gas power plant

470
00:26:21,440 --> 00:26:24,800
Speaker 4: was enough to replace one megawat from coal, and doing

471
00:26:24,880 --> 00:26:28,359
Speaker 4: so it helped cut costs for consumers because you were

472
00:26:28,359 --> 00:26:31,879
Speaker 4: tapping this cheap shale gas. But it also had a

473
00:26:31,920 --> 00:26:35,960
Speaker 4: lot of environmental benefit because it burns cleaner than coal.

474
00:26:36,280 --> 00:26:39,520
Speaker 4: We're now at a stage where, given the climate crisis,

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00:26:39,720 --> 00:26:42,879
Speaker 4: gas isn't clean enough, and so there are technologies that

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00:26:42,920 --> 00:26:45,879
Speaker 4: are being considered, like carbon capture or shifting off of

477
00:26:45,960 --> 00:26:49,480
Speaker 4: natural gas. There is a lot of energy, part of

478
00:26:49,520 --> 00:26:52,920
Speaker 4: my pun being put into trying to solve this problem

479
00:26:52,960 --> 00:26:54,919
Speaker 4: of what does the grid of the future look like.

480
00:26:55,400 --> 00:26:58,720
Speaker 4: But there is a really hard engineering problem. How do

481
00:26:58,800 --> 00:27:01,679
Speaker 4: you keep this system like a physics problem? How do

482
00:27:01,680 --> 00:27:04,320
Speaker 4: you keep this system running and keep the lights on.

483
00:27:04,680 --> 00:27:07,320
Speaker 4: There's a saying that the power industry likes to use.

484
00:27:07,600 --> 00:27:10,320
Speaker 4: Gas may only be seven percent of the economy, but

485
00:27:10,359 --> 00:27:13,960
Speaker 4: it's the first seven percent the entire economy relies on it.

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Speaker 2: Noreen, thanks so much for talking with me today.

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Speaker 5: Thank you, it was great.

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Speaker 2: Thanks for listening to us here at The Big Take.

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00:27:22,800 --> 00:27:26,080
Speaker 2: It's a daily podcast from Bloomberg and iHeartRadio. For more

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00:27:26,080 --> 00:27:30,119
Speaker 2: shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or

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00:27:30,160 --> 00:27:32,840
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00:27:32,920 --> 00:27:36,240
Speaker 2: Email us questions or comments to Big Take at Bloomberg

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00:27:36,280 --> 00:27:39,439
Speaker 2: dot net. The supervising producer of The Big Take is

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00:27:39,520 --> 00:27:43,760
Speaker 2: Vicky Ergalina. Our senior producer is Katherine Fink. Our producers

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00:27:43,800 --> 00:27:48,399
Speaker 2: are Mow Barrow and Michael Falero. Phil de Garcia is

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00:27:48,440 --> 00:27:52,280
Speaker 2: our engineer. Our original music was composed by Leo Sidrin.

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Speaker 2: I'm Weskasova. We'll be back tomorrow with another Big Take.

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Speaker 3: Don't don't talk There