Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Kayley, these stories all collide somehow when we talk about
Speaker 2: energy prices and you introduce the idea of data center,
Speaker 2: which many believe is driving electric bills higher, and it
Speaker 2: started a conversation about a closed circuit around these facilities.
Speaker 2: And here's a new take on this. You probably heard
Speaker 2: about the next Era story. It was out first thing
Speaker 2: this morning, Extra teaming up with Brookfield to build one
Speaker 2: hundred billion dollar data center campus. In this case, though,
Speaker 2: it's going to be run by a nuclear facility in Kentucky.
Speaker 2: They're basically relighting a nuclear plant powered by uranium that
Speaker 2: will be home to a data center campus.
Speaker 3: Yeah, so this is a generating plant that is coming
Speaker 3: with it. It all feeds into this rate free or
Speaker 3: protection notion we've heard so much from the President about.
Speaker 3: He was just at the EPA last week announcing an
Speaker 3: expansion of that ratepayer protection pedge. He pledged he essentially
Speaker 3: wants these data centers to be bringing their own power,
Speaker 3: to be insulating everyday consumers from the higher utility costs
Speaker 3: that could come with them.
Speaker 2: This is down your Paduca, the Paduca gaseous diffusion plant
Speaker 2: and the Secretary of Energy is there right now because
Speaker 2: the administration is very much supporting this effort, and we're
Speaker 2: glad to have Chris write with us. Mister Secretary, welcome
Speaker 2: back to Bloomberg TV and Radio. It's good to see you,
Speaker 2: and it looks like the weather's nice to day in Kentucky.
Speaker 2: This plant made uranium for the US during the Cold War,
Speaker 2: privately funded. So I'm curious what is the extent of
Speaker 2: government involvement and exposure here other than simply transferring the site.
Speaker 2: Is that why you're in Kentucky?
Speaker 1: Yeah, I'm here. You summarized it.
Speaker 4: Well, we're here just to celebrate. The Department of Energy
Speaker 4: is leasing these federal lands to multiple private companies to
Speaker 4: build some new nuclear technologies, as you spoke about, also
Speaker 4: to build two gigawatts of new natural gas power generation
Speaker 4: that'll serve both a one point two gigawatt data center
Speaker 4: that'll be built here that's the majority of that one
Speaker 4: hundred billion dollars, but also to add eight hundred megawatts
Speaker 4: of additional power onto the grid here, which will benefit
Speaker 4: all of the surrounding states. This is sort of a
Speaker 4: cornerstone move of the Trump rate payer protection pledge, driving
Speaker 4: prices down and industry and job creation up.
Speaker 3: As I'm sure you're well aware of, mister Secretary. There
Speaker 3: is a live conversation happening in and around financial markets
Speaker 3: right now as to whether there is over investment happening
Speaker 3: in data centers, that too much is being poured into
Speaker 3: the infrastructure. And I wonder if it does turn out
Speaker 3: that we have a surplus of these if you expect
Speaker 3: the power that is being generated by them as part
Speaker 3: of these large projects is going to stick that that
Speaker 3: won't ultimately leave the grid if we see some kind
Speaker 3: of data center collapse, No.
Speaker 1: It definitely won't leave the grid.
Speaker 4: In fact, it's one of the great things data center
Speaker 4: development is doing is it's funding and underwriting the development
Speaker 4: of so much new power generation capacity. Look, I think
Speaker 4: the upside for artificial intelligence is tremendous. But if there
Speaker 4: did turn out to be over investment in surplus of
Speaker 4: artificial intelligence, we would love to have the extra power
Speaker 4: that'll allow reshoring manufacturing in the US and continual downward
Speaker 4: pressure on electricity prices.
Speaker 2: Hmm, interesting, mister Secretary. Of the Nimby issue is one
Speaker 2: I'm sure you're familiar with, and I wonder if what
Speaker 2: you're announcing today in Kentucky is an answer to it.
Speaker 2: This is sort of the ultimate form of a closed
Speaker 2: circuit data center from what it sounds like. Would that
Speaker 2: include water as well? Will you have your own water
Speaker 2: supply for this campus?
Speaker 4: Absolutely, But as you know, a modern data center uses
Speaker 4: precious little water, these closed loop cooling systems. You know,
Speaker 4: you build a giant data center and it uses as
Speaker 4: much water as a McDonald's. So we do have water
Speaker 4: supply here. We are building new power generation. But you're right,
Speaker 4: using federal lands that was already an industrial site during
Speaker 4: the early part of the Cold War and repurposing it
Speaker 4: for a data center. Tremendous community support to have that
Speaker 4: development going on here, and we are doing this at
Speaker 4: multiple locations across the Department of Energy, taking old industrial sites,
Speaker 4: bringing development to communities that are hungry for these investments,
Speaker 4: for these tax dollars and for these job opportunities.
Speaker 3: Well yeah, how much opportunity is there, mister Secretary, to
Speaker 3: tap federal lands further? Where should we be looking for
Speaker 3: the projects of the future.
Speaker 1: There's a lot of them, you know.
Speaker 4: We have seventeen national labs and then additional federal sites.
Speaker 4: So we announced a big one in Portsmouth, Ohio.
Speaker 1: We have this one in Paducah. You'll hear about one
Speaker 1: in South Carolina.
Speaker 4: You're going to hear about one out in Washington State
Speaker 4: and Idaho. So we have a lot of federal lands
Speaker 4: and there's a lot of interest to develop, and again
Speaker 4: not just data centers and power production, but right here
Speaker 4: in Paduca in Kentucky, we're going to have a new
Speaker 4: company called General Matter is developing modern uranium enrichment. I
Speaker 4: sense you a more modern way to do what the
Speaker 4: giant buildings down here we're built to do to fuel
Speaker 4: the commercial reactors that are coming in the nuclear renaissance.
Speaker 4: So a lot of new technology and industrial development across
Speaker 4: our country.
Speaker 2: Well, we don't see those buildings behind you right now,
Speaker 2: mister secretary. If you're watching Bloomberg TV right now or
Speaker 2: with us on YouTube, you see Chris right in front
Speaker 2: of a beautiful open field with some trees. What's the timeline?
Speaker 2: How long will it take for you to get this
Speaker 2: site up and running and actually producing electrons to create
Speaker 2: whatever this data center will be cranking on.
Speaker 4: So the data center should be under construction in the
Speaker 4: next six months. There actually is construction already underway. You
Speaker 4: can't see it because it's off to my right in
Speaker 4: your camera. There's already one hundred acres under intense development
Speaker 4: right now to build new uranium enrichment capabilities, and then
Speaker 4: the power generation and data center will come on in
Speaker 4: phases over the next four years. But simply a large
Speaker 4: commercial development already started here in Paducah, Kentucky. And this
Speaker 4: is again what the Trump Administration's about. Let's build additional
Speaker 4: energy generation to put downward pressure on prices. And with
Speaker 4: that additional power we're going to generate. Let's bring American jobs,
Speaker 4: American industrial might, and lead artificial intelligence right here in
Speaker 4: the United States of America.
Speaker 3: Well, of course, utility prices are one thing. Prices at
Speaker 3: the pump, mister Secretary, are another, and we have seen
Speaker 3: those climbing back above four dollars a gallon, as we're
Speaker 3: seeing oil prices today once again spiking. Is the President's
Speaker 3: threatening to hit around hard once again. How high realistically
Speaker 3: should we expect prices to go if there is no
Speaker 3: immediate reopening of the straight of hor moves in the
Speaker 3: near term, if the diplomatic process is indeed not going
Speaker 3: to be successful, and we see a return to military action.
Speaker 4: Well, if there's military action, it's relatively brief. We are
Speaker 4: using the United States military today to escort out oil
Speaker 4: and natural gas out of the Strait of Horror moves
Speaker 4: that actually has gone remarkably well. Little reported in the news,
Speaker 4: and probably that's because we don't talk about it too much,
Speaker 4: but we are restoring supplies of global oil and refined
Speaker 4: products to the world out of that region independently.
Speaker 3: How much supply, sir, do you have to do you
Speaker 3: have an updated number for us in terms of how
Speaker 3: much is actually getting through the Strait.
Speaker 4: So a seven day trailing average right now out of
Speaker 4: the Arabian Gulf region is thirteen million barrels a day,
Speaker 4: about half of that flowing through the Strait and half
Speaker 4: of that through bypass pipelines.
Speaker 1: So we're about two thirds.
Speaker 4: Of the delivery of oil out of the Arabian Gulf
Speaker 4: region as we were before the conflict started.
Speaker 2: That's really great information, mister Secretary, And I wonder your
Speaker 2: thoughts on what is now the involvement of hoothy rebels
Speaker 2: from Yemen creating a potential second choke point. As we've
Speaker 2: discussed in the Red Sea, this is something that Saudi
Speaker 2: Arabia had already tried to pipeline around with regard to
Speaker 2: the Strait of four Moves. Is there a bypass to
Speaker 2: the bypass? As Javier Blass put that, that you're talking
Speaker 2: to Saudi Arabia about where additional pipe could be installed
Speaker 2: to get around this second choke point.
Speaker 4: There is a bypass to the bypass called the Suez Canal,
Speaker 4: so you can go across to the Red Sea and
Speaker 4: instead of going south down to the band Al Mandeb,
Speaker 4: you can go through the Suez Canal. That is happening
Speaker 4: as we speak. There's both oil tanker capacity through the
Speaker 4: Suez and there is a pipeline that follows the same route,
Speaker 4: both of which will be employed to divert more oil
Speaker 4: that way.
Speaker 1: Well.
Speaker 3: Of course, as we consider the supply of oil, we
Speaker 3: also have to factor in the reserves that the US
Speaker 3: has and that the rest of the world has been
Speaker 3: tapping into over the last several months as this conflict
Speaker 3: has been ongoing. Mister Secretary, we know the spr is
Speaker 3: at the lowest level in four decades more than that,
Speaker 3: and I wonder how much lower realistically it can be
Speaker 3: allowed to go. Where the operational floor is and what
Speaker 3: the plan is if we reach it.
Speaker 4: Oh, we are a long way from the operational floor.
Speaker 4: I've heard some people that don't understand. Not you, but
Speaker 4: I've heard people who don't understand how the SPR works, saying, Oh,
Speaker 4: it can't go below x amount of barrels.
Speaker 1: That's just not true.
Speaker 4: They seem to misunderstand that it's just oil in these
Speaker 4: caverns and otherwise it's air. All of these caverns are
Speaker 4: full of a combination of water and oil, and they
Speaker 4: are always on percent full. We just use the water
Speaker 4: to displace the oil out of these caverns. But with
Speaker 4: the planned sales we have, which will run into this fall,
Speaker 4: we'll still have meaningful supply over two hundred million barrels
Speaker 4: of oil in our spr at the end of those releases.
Speaker 4: And what's great about the releases we're doing through the
Speaker 4: Trump administration is we're not selling these barrels.
Speaker 1: We're trading them. At the end of the day.
Speaker 4: These releases will add more than forty million barrels a
Speaker 4: day to the storage in the SPR after the conflict
Speaker 4: than we had before the conflict started. These are additive,
Speaker 4: not subtractive.
Speaker 2: We're looking at four dollars and nine cents a gallon
Speaker 2: on average nationally today, Mister Secretary, is it even possible
Speaker 2: to forecast where we will be by the end of
Speaker 2: summer by Labor Day?
Speaker 1: It's not possible to forecast.
Speaker 4: But look, all I can say is gasoline prices today
Speaker 4: are a dollar a gallon cheaper than they were four
Speaker 4: years ago in the Biden administration that was just about
Speaker 4: a war on fossil fuels and selling fear. Here we
Speaker 4: are ending Iran's nuclear ambitions, ending a forty seven, Well,
Speaker 4: we still have gasoline prices.
Speaker 1: That didn't interrupt the flow of oil.
Speaker 4: It was just the fear of the interruption of the
Speaker 4: flow of oil. The Biden administration feared that Russia would
Speaker 4: slow their exports of oil or refined diesel, and the
Speaker 4: Russians did not reduce their exports, just fear and bad management.
Speaker 4: They drained the spr and they sold those barrels and
Speaker 4: didn't replace them. So misunderstanding energy and selling fear has
Speaker 4: not been effective. That Trump administrations about being honest, about
Speaker 4: being fact based, about solving our geopolitical problems and balancing.
Speaker 1: Our energy markets.
Speaker 4: I'm confident we will see gasoline prices continue their long
Speaker 4: term trend downward later this year, and of course we
Speaker 4: are working every day at a lower prices for the
Speaker 4: American consumers.
Speaker 3: Well, you mentioned there, mister Secretary. Finally, the question of
Speaker 3: Russian diesel, which now is not being exported because so
Speaker 3: many refineries have been targeted by Ukrainian drone strikes. I
Speaker 3: understand that for most gas that consumers are seeing at
Speaker 3: the pump, it may be one thing, and you may
Speaker 3: expect prices to go lower. But is the same to
Speaker 3: be said for diesel, which also powers a lot of
Speaker 3: our economy.
Speaker 4: Now you're right, Ukraine's tax on Russian refineries have reduced
Speaker 4: the supply of diesel globally.
Speaker 1: It's reflected in prices.
Speaker 4: The best offset we have to that is the American
Speaker 4: refining complex.
Speaker 1: We are refining.
Speaker 4: Today more diesel, more gasoline, more jet fuel than ever
Speaker 4: in American history. America has been the savior for world
Speaker 4: energy markets during this crisis.
Speaker 1: And will continue to do so.
Speaker 4: But yes, of course, we want to see diesel prices
Speaker 4: come down, increasing the throughput from the American refineries. Something
Speaker 4: the EPA and the Trump administration is working with our
Speaker 4: refiners to just again move towards more common sense regulations
Speaker 4: and how refineries operate.
Speaker 1: That's allowing increased output.
Speaker 4: But to truly get diesel prices down low again, that'll
Speaker 4: that'll take another year or so of President Trump's leadership,
Speaker 4: but the trajectory will be downward, downward, with diesel prices, downward,
Speaker 4: with gasoline prices.
Speaker 3: All Right, we'll leave it there, mister Secretary, thank you
Speaker 3: so much for joining us. The Energy Secretary Chris Wright
Speaker 3: joining us live from Kentucky at the site of again,
Speaker 3: a one hundred billion dollar data center project being spearheaded
Speaker 3: by next Era and Brookfield