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Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg P and L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Joining

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Speaker 1: us now as the president and the chief executive of

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Speaker 1: Edison International, the twenty billion dollar electric utility based in California,

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Speaker 1: Pedro Pizzaro, Pedro, thank you very much for being with us.

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Speaker 1: You've spoken about what the roads in California are going

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Speaker 1: to look like by twenty thirty. I understand somewhere in

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Speaker 1: the order of maybe seven million electric vehicles, that includes

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Speaker 1: automobiles as well as trucks. Where's the electricity going to

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Speaker 1: come from in order to charge the batteries for those vehicles. Well,

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Speaker 1: we view this as part of a broader perspective for

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Speaker 1: how California gets its greenhouse gas reductions by we see

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Speaker 1: the electricity coming from a resource stack that will be

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Speaker 1: carbon free, so that means a lot of renewables. Uh.

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Speaker 1: We think that will require a lot of storage to

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Speaker 1: be able to balance intermittency of renewables. But the key

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Speaker 1: thing is that we view that as relying on a

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Speaker 1: modern grid that's able to connect those resources, those sources

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Speaker 1: that are cleaned with us, as like transportation and space

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Speaker 1: and water heating. That will help California achieve its goals

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Speaker 1: in the lowest possible, lowest possible cost. So can you

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Speaker 1: give us just a sense of your role in this

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Speaker 1: goal of reducing emissions in California by by what's your

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Speaker 1: what's your role? Sure, actually several roles. Starts with having

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Speaker 1: a strong and modern grid. So you know, our main

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Speaker 1: business is running our wire system that provides power to

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Speaker 1: fifteen million residents across fifty thousand square miles. That's one role.

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Speaker 1: We have a role us a procure of energy. We

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Speaker 1: we don't make very much of our own energy. We

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Speaker 1: buy it from the market, and so as we let

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Speaker 1: out contracts, we expect those contracts to go to an

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Speaker 1: increasingly clean set of resources. Today we are STACK is

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Speaker 1: about renewables and carbon free. We see that again doubling

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Speaker 1: to eight carbon free. We still play a role in

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Speaker 1: contracts for storage, and we also own some storage ourselves,

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Speaker 1: and so the deploying storage. Today we have commitments for

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Speaker 1: around five d megawatts of storage. We believe that the

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Speaker 1: status a whole will need closer to ten thousand megawatts

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Speaker 1: of storage. What big problem is that consumers just aren't

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Speaker 1: buying electric vehicles that quickly, and they still love their SUVs.

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Speaker 1: I mean, it's like you can't change people's taste. Yeah,

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Speaker 1: well this is happening though, and it's it's uh. I

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Speaker 1: think we're the early part of the s curve here,

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Speaker 1: the growth curve. When you look about four or five

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Speaker 1: years ago, I think in California about one percent of

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Speaker 1: vehicle new vehicle sales had some sort of plug attached

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Speaker 1: ship last year was closed to five percent. We have

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Speaker 1: around three hundred and many thousand electric vehicles in the

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Speaker 1: state right now. It's early days, but it's early days.

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Speaker 1: With the market that's growing, we're seeing more charging infrastructure deployed.

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Speaker 1: That's another one of our roles, you know, reading the

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Speaker 1: grid for that. And importantly, we see auto manufacturers gearing

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Speaker 1: up for this more and more announcements of electric vehicles,

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Speaker 1: not just to serve California. I mean, we're we play

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Speaker 1: a leading role, but we're only one of a lot

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Speaker 1: of leading roles out there in China now has the

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Speaker 1: largest leading role along with the EU. So this is

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Speaker 1: a global, UH global initiative that's taking place here. And

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Speaker 1: from a US perspective, you know, I view support for

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Speaker 1: electric vehicles as being critical to our economy and to

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Speaker 1: helping us participate in that infrastructure plan. Do you foresee

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Speaker 1: edited international purchasing residential energy storage companies? UM, We typically

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Speaker 1: don't comment an m n A, but I'd say our

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Speaker 1: main focus continues to be on actually investing in that

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Speaker 1: core grid. So you never say it never about anything,

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Speaker 1: but it's not our focus right now. Our focus is

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Speaker 1: been on investing in THEE grad. We have purchased some

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Speaker 1: storage for our own use tied to our grade as well.

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Speaker 1: And then outside of the utility, we have Edison Energy

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Speaker 1: which provides services to large commercial and industrial customers, and

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Speaker 1: they were helping helping those customers purchasing own storage as well.

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Speaker 1: I'm wondering, you know, as you talk about California's plan

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Speaker 1: to reduce emissions by I've struck by President Trump's approach

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Speaker 1: to reducing emissions and that there actually has been a

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Speaker 1: pretty significant attempt to roll back emission standards from former

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Speaker 1: President Obama's era. How does this complicate your goal and

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Speaker 1: how does it complicate sort of the overarching UH sort

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Speaker 1: of target reducing emissions. I think the bottom line is

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Speaker 1: that there is not that much impact that California will feel.

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Speaker 1: There's some impact, but there's not that much impact in

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Speaker 1: this sense. UM. The rollback of the Clean Power Plan

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Speaker 1: at ep A, well, when you look at how California

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Speaker 1: was going to fulfill, it's part of that. California is

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Speaker 1: doing that already anyway. It's you know, increasing a target

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Speaker 1: for renewables, setting the law for the fort greenhouse gas reduction.

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Speaker 1: None of that is changing in this state, and I

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Speaker 1: think that's similar in other states that are pursuing their

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Speaker 1: own greenhouse gas reduction pathways. There are touch points, right

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Speaker 1: and UH. One touch point is the fact that e

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Speaker 1: p A has allowed the you know, UH waiver for

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Speaker 1: California in terms of vehicle emission standards. You've seen you

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Speaker 1: know commentary over the last week, and the e p

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Speaker 1: A at the federal level UH talking about a potential

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Speaker 1: rollback of that or you know, changes to that. UM.

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Speaker 1: Barry Nichols is the chair of their Resources board, I

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Speaker 1: think is at the conference also She was quoted, you know,

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Speaker 1: in the various papers this morning as talking about that

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Speaker 1: and the fact that California may sue to protect it's

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Speaker 1: right to have its standard, but also acknowledging that look,

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Speaker 1: you know, folks will negotiate, they'll talk, and ultimately, I

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Speaker 1: think you know, we'll get this result in large part

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Speaker 1: because electric vehicles are such a big part of the

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Speaker 1: strategies for the automakers, and that's an important infrastructure play

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Speaker 1: that our economy should not us. You mentioned how you're

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Speaker 1: going to need what about ten gigawatts of battery storage

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Speaker 1: by in order to meet all of these needs. Do

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Speaker 1: you foresee any big changes in battery storage technology by then? Oh? Absolutely, um.

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Speaker 1: With lithium ion dominating the market today, we've already seen

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Speaker 1: dramatic cost reductions. I think you know, battery soult costs

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Speaker 1: went down by about two thirds between Continued improvements are

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Speaker 1: expected as remote move ahead, but there will be other

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Speaker 1: chemistries to One of the fun things I get to

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Speaker 1: do outside of Edison is that I'm on the board

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Speaker 1: of ARGON National Lab. Argon has been the hub for

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Speaker 1: de DE Department of Energies research on battery storage, and

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Speaker 1: so they're pursuing a number of other chemistries there, and

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Speaker 1: there's a lot of confidence, uh you know, not only there,

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Speaker 1: but across the market that will see more types of chemistry,

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Speaker 1: more types of battery that will bring greater capacities, more usability,

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Speaker 1: lower issues, and ultimately lower costs for concerners. Which companies

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Speaker 1: are at the forefront of this, because I think everyone

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Speaker 1: thinks of Elon Musk is being sort of a secret

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Speaker 1: battery whiz and that that's really where his power is

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Speaker 1: going to come from. But are there other kind of

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Speaker 1: people in the industry or companies that really have been

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Speaker 1: pioneers here. Well, look, there's a lot of focus across

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Speaker 1: our economy and the worldwide economy, and I don't want

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Speaker 1: going through a whole litany of names of companies. Was

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Speaker 1: certainly a purchased Tesla batteries, but we've done work with

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Speaker 1: a number of other companies, both on the manufacturing site

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Speaker 1: for the battery sales, as well as folks who are

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Speaker 1: deploying storage and for example, companies that are contracting with

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Speaker 1: ind use consumers, aggregating those batteries and then presenting that

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Speaker 1: as a package to our utility so we can then

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Speaker 1: procure the use for that. So You're seeing a lot

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Speaker 1: of focus both in the US, in Asia, in Europe,

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Speaker 1: across multiple folks investing. So you're not going to answer,

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Speaker 1: which comes from a very toughful way. Now to endorse

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Speaker 1: any companies well, good logo, producing comissions by in you know,

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Speaker 1: fifteen years, twelve years, the todd the clock is ticking.

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Speaker 1: Thank you so much for being with us. Bizarro, President,

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Speaker 1: chief executive officer of Edison International, which is based in California.

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Speaker 1: But he is here at the Bloomberg Future of Energy

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Speaker 1: Global Summit. He has a tall task and many roles

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Speaker 1: playing with respect to this Californian goal. There's sort of

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Speaker 1: a philosophical conundrum in investing today. On one hand, investment

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Speaker 1: manators need to make money for their clients. On the

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Speaker 1: other hand, there's a growing movement to feel good about

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Speaker 1: where people are putting their money. Here to talk about

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Speaker 1: how one major organization is dealing with that is in Finucan,

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Speaker 1: vice chairman of the Bank of America organization which we

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Speaker 1: all know. Uh so and thanks so much for being here.

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Speaker 1: I want to start with that sort of how do

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Speaker 1: you make sure that you are getting good returns and

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Speaker 1: investing responsibly for the bank while also supporting initiatives that

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Speaker 1: you think lead to a more sustainable, sustainable future from

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Speaker 1: an energy perspective, Thanks Lisa. So it's uh, it's evolved

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Speaker 1: over time. That doesn't just begin on day one. As

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Speaker 1: you know, a good idea becomes a viable idea when

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Speaker 1: you can get the returns. So what we've been able

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Speaker 1: to do is to approach uh, new products, create new

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Speaker 1: products that are similar to the products that are clients

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Speaker 1: would have known from the past. So municipal bonds, green bonds,

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Speaker 1: a green bond. You can underwrite a green bond, our

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Speaker 1: issue a green bond. The kind of return you're going

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Speaker 1: to get on it is probably north of what you

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Speaker 1: get on a municipal but not much better. But if

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Speaker 1: that's what you were going to invest in the in

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Speaker 1: the first place, you can also get the return of

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Speaker 1: environmental hit that you would not have been able to

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Speaker 1: get otherwise. So you're talking about reducing greenhouse gas emissions,

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Speaker 1: energy effici and see water storage or whatever. Likewise, we've

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Speaker 1: been able to do the same thing with tax equity,

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Speaker 1: which actually came out of some of the work we

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Speaker 1: did early on years ago with community development. But applying

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Speaker 1: tax equity where you can UM through tax credits and

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Speaker 1: investments make a better return than say the municipals and

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Speaker 1: so on and so on. So UM we've seen more

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Speaker 1: recently a UM interest in UH the private capital markets,

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Speaker 1: and that's that's where, of course you're gonna make bigger money.

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Speaker 1: So when private equity gets involved and they are focused

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Speaker 1: on the sustainable development goals and then they're looking to

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Speaker 1: get their kinds of returns, that usually takes different tranches

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Speaker 1: of UH financing. It's not just one thing, but on

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Speaker 1: a blended basis, you can get good return, you can

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Speaker 1: de risk, and you can do some good. Just to

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Speaker 1: mention that your native of Newton UM, you know UH

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Speaker 1: Bloomberg Radio Home is one of those six one Boston

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Speaker 1: Report and thirty Metro West and the South Shore. So

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Speaker 1: I want to give you the opportunity to maybe draw

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Speaker 1: some connections between the demand for technology of the future

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Speaker 1: Boston in the Boston area known for biotechnology that no

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Speaker 1: one really knew was going to exist in the future,

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Speaker 1: but that public private partnership and the money that came

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Speaker 1: from the private sector is something that helped build it

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Speaker 1: into a world class industry. Do you think that this

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Speaker 1: is what's happening now with these commitments to sustainable and

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Speaker 1: renewable energy. I do I think this is an evolution.

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Speaker 1: It seems to happen in many industries. I mean that

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Speaker 1: you could say the same of tech in Silicon Valley,

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Speaker 1: you could say it a biotech in in the Boston area.

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Speaker 1: You could say it more generally. In terms of UM

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Speaker 1: environmental efforts, you have to have the early money. That's

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Speaker 1: kind of UM first loss money, if you will, and

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Speaker 1: and that the willingness to dig in. So in the

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Speaker 1: early days, much of what we were doing environmentally was philanthropic,

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Speaker 1: but there was clearly a business there. I mean, a

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Speaker 1: very practical business is energy efficiency in the real estate space.

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Speaker 1: What what developer doesn't want to be able to have, uh,

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Speaker 1: spend less money on energy use. But if you can

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Speaker 1: think about that upfront rather than doing it on a

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Speaker 1: retroactive basis, is going to help. So it's you know,

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Speaker 1: first you walk, then you run, and then you start

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Speaker 1: making money. I'm wondering, you know, when you were talking

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Speaker 1: about the tax credits being somehow embedded into some of

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Speaker 1: these financial instruments to get people into sustainable investing, how

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Speaker 1: much UH does the lack of interest by the current

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Speaker 1: presidential administration kind of impact sort of the sort of

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Speaker 1: investing landscape here, because there has been a pullback from

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Speaker 1: underwriting sort of mason efforts to get the grid to

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Speaker 1: be more sustainable. Well, the pullback is actually in the

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Speaker 1: tax reform, so UM, I think we can work our

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Speaker 1: way through that. I think we've gotten sophisticated enough about that.

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Speaker 1: On the other hand, the business community hasn't pulled back

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Speaker 1: at all. We haven't and I can't think of any

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Speaker 1: big company that committed in two thousand and fifty, in

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Speaker 1: December of two thousand and fifteen to the COP twenty

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Speaker 1: one that's actually pulled back. Because for us, we see business.

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Speaker 1: We also have UM an employee base that expects us

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Speaker 1: to do that, and frankly, we have an investor base

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Speaker 1: that expects us to do that. I can't tell you

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Speaker 1: how many conversations we have. And I have these conversations.

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Speaker 1: I meet with about fifty institutional investors a year and uh,

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Speaker 1: three years ago, no one asked about E s G

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Speaker 1: and now everybody does. And and when I say E

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Speaker 1: s G, they're mostly focused on E. So how do

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Speaker 1: you make sure that you're measuring the E accurately, because

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Speaker 1: when you talk about green bonds, I know that some

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Speaker 1: people have complained that there are a lot of arbitrary

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Speaker 1: standards for what counts as green. So how do you

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Speaker 1: how do you evaluate that and how do you judge

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Speaker 1: what's getting less and less arbitrary begin there. Uh, you

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Speaker 1: need to have results, so you need to reduce something,

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Speaker 1: so you need to reduce the greenhouse gas emissions or

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Speaker 1: improve your water storage, so you have to have definable outcomes.

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Speaker 1: The um issue with green bonds is it takes a

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Speaker 1: little more to do because you have to calibrate all

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Speaker 1: of that, you have to have a report at the

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Speaker 1: end of it. So I think that's really the complaint,

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Speaker 1: not so much that it's not definable, but that it

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Speaker 1: takes a little work to do to do the work.

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Speaker 1: Um and I would say so going back to the government,

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Speaker 1: uh uh, regardless of what this administration is is saying,

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Speaker 1: the reality is is that we're not living administration to administration.

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Speaker 1: We're trying to look at this in the long term.

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Speaker 1: We're talking about this to the end of this century

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Speaker 1: and how much money is needed, and we're seeing opportunity.

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Speaker 1: I mean, we committed a hundred and twenty billion dollars

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Speaker 1: in two thousand and thirteen. We thought that we would

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Speaker 1: make that goal in two thousand and five, and five

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Speaker 1: years in we're well, we're beyond halfway mark and and

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Speaker 1: with momentum, so the first few year was much slower

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Speaker 1: than this past year. This past year we did just

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Speaker 1: like I think, six billion dollars in UM green bonds alone,

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Speaker 1: so underwriting them, underwriting them and with the number one

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Speaker 1: underwriter of green bonds, number one on UM tax equity

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Speaker 1: UM financial firm. And we're very focused on this, I

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Speaker 1: mean energy efficiencies probably first, to my surprise, wind is

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Speaker 1: next than solar. So catalytic finance initiative part of this.

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Speaker 1: Just give us the low down on on what it

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Speaker 1: is and what you look for the future. Yeah, I

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Speaker 1: think we have to come up with a better name

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Speaker 1: for that. That's sort of a mouthful, but we have it.

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Speaker 1: We're gonna have a contest after right, Okay, But what

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Speaker 1: it is is UM. When there are projects that are

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Speaker 1: harder to finance by one company or one one client

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Speaker 1: or one bank, it is a way of getting other

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Speaker 1: financial institutions involved. So we made a billion dollar commitment

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Speaker 1: rather whether to d risk or invest wouldn't either way. Uh.

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Speaker 1: And we've got seven other financial firms of different types

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Speaker 1: and also nonprofits, and together various tranches of financing have

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Speaker 1: been able to do a wind farm in the North Sea,

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Speaker 1: solar panels homes in Spain, and conservation land in Africa.

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Speaker 1: Thank you very much, Thinking is a vice chair of

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Speaker 1: Bank of America. Nuclear Fusion. We're going to be focusing

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Speaker 1: on this now. We're not gonna be talking about the sun.

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Speaker 1: We're gonna be talking about how perhaps we can create uh,

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Speaker 1: fossil fuel free energy in a cheap, efficient way here

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Speaker 1: on Earth. Joining us now, Chris Maori, chief executive officer

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Speaker 1: of General Fusion, which is based in Vancouver, but is

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Speaker 1: joining us here at the Bloomberg New Energy Finance Future

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Speaker 1: of Energy Global Summit. Chris, Before we get into the

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Speaker 1: nitty gritty of the financing and the potential, what is

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Speaker 1: nuclear fusion? At least it's great to be here this morning. UH.

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Speaker 1: Fusion is the opposite of nuclear power. In nuclear power,

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Speaker 1: you think about splitting heavy atoms like uranium. Fusion is

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Speaker 1: all about putting together the lightest atoms. And for us,

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Speaker 1: we put together to hydrogen atoms and make helium and

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Speaker 1: that is an incredibly powerful reaction. It's the most powerful

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Speaker 1: reaction that we know of, and it's also incredibly clean.

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Speaker 1: The fuel for fusion, for our version of fusion, comes

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Speaker 1: from water. It comes from the hydrogen out of water.

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Speaker 1: So there's basically an unlimited supply of this fuel that's

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Speaker 1: available to everybody everywhere. If if Lisa were to go

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Speaker 1: to UH British Columbia to Vancouver and you were to

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Speaker 1: show her your plan sima injector, can you describe what

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Speaker 1: would it look like and what does it do? So plasma,

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Speaker 1: let me start by just saying that that plasma. You

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Speaker 1: can think of plasma as lightning. When when you look

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Speaker 1: up in the sky during a thunderstorm you see a

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Speaker 1: flash of light, that light is actually plasma. It is

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Speaker 1: electricity UH that has gone through the air in the

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Speaker 1: atmosphere and heated that up so much that it stripped

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Speaker 1: all the electrons off the protons of those atoms and

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Speaker 1: made it glow. And that is that's really what plasma is.

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Speaker 1: And when you look at the sun, that's what you

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Speaker 1: see that the sun is a burning ball of high

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Speaker 1: temperature plasma. And so our plasma injector, which is is

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Speaker 1: like the fuel injector of a diesel engine. Uh, it

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Speaker 1: basically creates the starting point for fusion process. It creates

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Speaker 1: this plasma. So it's a it's a machine that's uh

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Speaker 1: six or seven feet in diameter, about fifteen feet long,

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Speaker 1: where we put an incredible amount of electricity through just

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Speaker 1: us a very very little bit of hydrogen gas a

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Speaker 1: couple of grams and heat that up to about five

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Speaker 1: million degrees and that's kind of the starting point of

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Speaker 1: view will to creating fusion here on Earth. Okay, So

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Speaker 1: to heat something up to five million degrees sounds like

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Speaker 1: it takes a bit of energy itself. How do you

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Speaker 1: how do you source that energy to create this energy? Well,

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Speaker 1: in the fusion plant, you have recirculating energy, right, So, uh,

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Speaker 1: the good news about fusion, it just makes an incredible

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Speaker 1: When the fusion reaction happens, it makes an incredible amount

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Speaker 1: of energy, and so you recirculate some of that back

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Speaker 1: to start the next reaction. Again. Our machine is really

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Speaker 1: analogous to a diesel engine. It's a pulse process that

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Speaker 1: in the power plant will happen once a second. So

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Speaker 1: basically you'll create a plasma injected into our machine and

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Speaker 1: compress it actually pretty much just the way a diesel

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Speaker 1: engine works too. You reach fusion conditions, which is when

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Speaker 1: you heat up this plasma to over fifty million degrees

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Speaker 1: and at that pressure and temperature, the helium, the hydrogen

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Speaker 1: atoms actually burn and fuse together into helium and release

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Speaker 1: an unbelievable amount of energy. And uh so you just

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Speaker 1: recirculate some of that to create new new plasma, but

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Speaker 1: there's plenty of left over to make clean electricity. Point

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Speaker 1: you're looking perhaps to build an even bigger plasma injector. Correct, Well,

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Speaker 1: what we're doing a plasma injector again going back to

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Speaker 1: my analogy of a diesel engine, and plasma injector is

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Speaker 1: just one part of the overall engine. And so what

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Speaker 1: General Fusion has done for the last fifteen years is

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Speaker 1: really develop all the systems of our fusion engine, if

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Speaker 1: you will. And what we're getting ready to do now,

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Speaker 1: which is really exciting, is to really build a demonstration

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Speaker 1: fusion plant, okay, and the purpose of this is to

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Speaker 1: actually prove that we have the capability to make electricity

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Speaker 1: out of fusion energy. It's not going to be a

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Speaker 1: functioning power plant in the sense of putting megawatts on

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Speaker 1: the grid because actually the back end of our power

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Speaker 1: plant is something that's completely conventional. We don't need to

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Speaker 1: prove that. We're really kind of proving out on an

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Speaker 1: integrated basis the fusion island, which is that the set

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Speaker 1: of equipment that makes this plasma, compresses it, burns it,

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Speaker 1: and turns it into electricity. That's the goal, and this

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Speaker 1: will be done at scale. So, uh, Jeff Bezos, the

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Speaker 1: founder of Amazon is an investor, is backing general fusion.

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Speaker 1: Can you walk us through what has to happen for

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Speaker 1: this to be adopted on some kind of mass scale

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Speaker 1: and also how does it compare and cost to other

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Speaker 1: types of energy generators. So one of the exciting things

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Speaker 1: about fusion, at least I can certainly speak to General Fusion,

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Speaker 1: is that when you evaluate the projected cost of electricity,

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Speaker 1: it's extremely competitive, uh, competitive with the future forecast of

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Speaker 1: wind and solar. And of course it's available twenty seven.

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Speaker 1: You know what we talked about it as on demand

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Speaker 1: or flexible energy, right, and so whereas renewable, you need

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Speaker 1: to complement it with something, whether it's energy storage or

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Speaker 1: some form of flexible on demand energy. UM in this case,

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Speaker 1: it's something that in itself is very economically competitive and

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Speaker 1: that that's a key piece of this thing. So for us,

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Speaker 1: we are at the last stage of commercialization, so building

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Speaker 1: this demonstration plant. When it's up and running in the

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Speaker 1: next several years um, and it works the way we

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Speaker 1: hope it works, we'll be ready for commercial deploy at

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Speaker 1: the next step will be a commercial reference plant that

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Speaker 1: will actually put clean electrons on the grid. Thank you

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Speaker 1: very much for joining us and sharing this a new

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Speaker 1: technology with us. Chris Malory is the chief executive of

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Speaker 1: a General Fusion talking about the private sector bet on

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Speaker 1: using fusion technology to create electrics. Much appreciative this time

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Speaker 1: to take a look at small and MidCap shares, and

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Speaker 1: of course Dave Wilson Bluebirk, Sex editor, columnist and blogger

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Speaker 1: at M Live go On at the Bluebird joins us.

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Speaker 1: Now risk on in small caps give us the details please,

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Speaker 1: Well it sure looks that way, Lisa. I mean you

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Speaker 1: see the Russell two thousand at the moment higher by

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Speaker 1: one point seven percent, basically keeping pace with the S

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Speaker 1: and P five hundred, which is up. I don't know

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Speaker 1: about one at the moment. The Russell's biggest game by

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Speaker 1: far belongs to Veraphone Systems, whose ticker is pay p

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Speaker 1: a Y. The provider of credit card readers is up

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Speaker 1: fifty two after accepting a buyout offer from a group

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Speaker 1: led by private equity firm Francisco Partners that deals value

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Speaker 1: at three point four billion dollars will assume debt. Spectrum

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Speaker 1: Pharmaceuticals sp p I is gained twenty t five. The

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Speaker 1: drug developer gave a positive update on research into a

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Speaker 1: proposed lung cancer treatment, and a keen group took her

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Speaker 1: f r a C has gained nine and a half percent.

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Speaker 1: The provider of fracking services was raised to the equivalent

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Speaker 1: by from holding RBC Capital Markets. The Russell steepest drop

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Speaker 1: belongs to v t V Therapeutics took her v t VT.

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Speaker 1: The drug developer has plunged seventy three and a half

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Speaker 1: percent after it proposed Alzheimer's medicine failed in the final

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Speaker 1: stage study and selected biosciences to her s c LB

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Speaker 1: has fallen about eleven and a half percent. The company

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Speaker 1: released mid stage data on the treatment for gout, and

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Speaker 1: analysts express concerned about the results on a conference call.

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Speaker 1: Thank you very much, Dave Wilson Bloomberg Stocks comm is.

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Speaker 1: Send David email at d Wilson at Bloomberg dot net

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Speaker 1: and sign up for his daily free email newsletter Sanctions

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Speaker 1: against Russia. They have at least taken their toll on.

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Speaker 1: One proposed deal is having to do with Glencore, the

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Speaker 1: world's largest commodities trader, and here to tell us more.

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Speaker 1: As Tom Wilson are mining and commodities reporter for Bloomberg News,

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Speaker 1: he joins us from London. Tom tell people exactly what

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Speaker 1: was proposed between Glencore and an aluminum company that they

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Speaker 1: were going to have a share swap with, but that

432
00:25:20,520 --> 00:25:26,760
Speaker 1: doesn't look to be happening anytime soon exactly. So glen Call,

433
00:25:26,760 --> 00:25:29,800
Speaker 1: the world's biggest commodity company, has a long history with

434
00:25:30,960 --> 00:25:34,399
Speaker 1: like Derri Pasca, the sanctioned billionaire, and with one of

435
00:25:34,400 --> 00:25:36,720
Speaker 1: his companies, in particular Russell, So it hold an eight

436
00:25:36,720 --> 00:25:40,560
Speaker 1: point seven five percent steak in that business that it's

437
00:25:40,560 --> 00:25:43,760
Speaker 1: had sent about two thousand and seven. Now, Derri Pasca

438
00:25:43,800 --> 00:25:46,119
Speaker 1: back in the autumn, he decided he wanted to list

439
00:25:46,320 --> 00:25:49,199
Speaker 1: a holding company called M Plus in London, and in

440
00:25:49,280 --> 00:25:51,680
Speaker 1: order to do that, he approached his good friend Ivan

441
00:25:51,680 --> 00:25:54,560
Speaker 1: Glazeberger glenc call and Outer Golenko would step into the

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00:25:54,600 --> 00:25:58,119
Speaker 1: cornerstone investor by swapping its steak in Russell for a

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00:25:58,200 --> 00:26:02,000
Speaker 1: steak in the newly created listed entity n Plus. UM

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00:26:02,000 --> 00:26:04,359
Speaker 1: glen Core agreed that deal was going to happen by

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00:26:04,359 --> 00:26:08,119
Speaker 1: the end of April, and now, following the sanctions against Dera, Pasco,

446
00:26:08,240 --> 00:26:11,639
Speaker 1: Russell and N Plus last week, Glencre confirmed this morning

447
00:26:11,840 --> 00:26:15,399
Speaker 1: UM that that is suspended. You know, one thing that

448
00:26:15,400 --> 00:26:17,879
Speaker 1: I'm struck by, Tom, is that there's been a broad

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00:26:17,880 --> 00:26:22,119
Speaker 1: based withdrawal from frankly everything having to do with Russia,

450
00:26:22,160 --> 00:26:25,440
Speaker 1: but Russel has been singularly punished since it's oligarch head

451
00:26:26,000 --> 00:26:28,880
Speaker 1: was among those sanctions, and I'm wondering, you know, can

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00:26:28,920 --> 00:26:31,480
Speaker 1: you talk about the effect of the sanctions on the

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00:26:31,480 --> 00:26:35,199
Speaker 1: supply chain of aluminum, for example, which is the specialty

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00:26:35,359 --> 00:26:38,399
Speaker 1: of Russel, or some of the other commodities that Russia

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00:26:38,440 --> 00:26:42,399
Speaker 1: supplies to Europe and the rest of the world. The

456
00:26:42,440 --> 00:26:45,000
Speaker 1: main focus here at the moment really is on on

457
00:26:44,680 --> 00:26:48,320
Speaker 1: and on aluminum or aluminiums as we call it in London.

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00:26:50,800 --> 00:26:54,520
Speaker 1: Russia is the world biggest producer of aluminium outside of China,

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00:26:55,000 --> 00:26:57,239
Speaker 1: so I had a huge market share and the way

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00:26:57,240 --> 00:27:00,040
Speaker 1: in which these sanctions work. They're basically designed to to

461
00:27:00,160 --> 00:27:02,520
Speaker 1: be cut roust out off from the US financial system,

462
00:27:02,800 --> 00:27:05,040
Speaker 1: but the implications are far more reaching, and really it

463
00:27:05,080 --> 00:27:07,639
Speaker 1: means that you can no longer as a US business,

464
00:27:07,680 --> 00:27:10,520
Speaker 1: and ultimately probably is now as a European business, as

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00:27:10,600 --> 00:27:13,800
Speaker 1: as the budiness will ultimately follow the direction of U

466
00:27:13,840 --> 00:27:17,359
Speaker 1: S sanctions. You can no longer buy any aluminium from

467
00:27:17,440 --> 00:27:20,040
Speaker 1: RUTA whatsoever. So that's the scene that's really sent the

468
00:27:20,040 --> 00:27:23,000
Speaker 1: aluminium market into a bit of a spin. Aluminium seen

469
00:27:23,040 --> 00:27:25,800
Speaker 1: the biggest two day gain in more than six years.

470
00:27:26,400 --> 00:27:29,399
Speaker 1: UM Russell lost half of its value on Monday and

471
00:27:29,560 --> 00:27:32,680
Speaker 1: was down another nine percent in trading today in Hong Kong.

472
00:27:33,240 --> 00:27:36,359
Speaker 1: On the flip side, UM, anybody that doesn't have Russian

473
00:27:36,520 --> 00:27:42,040
Speaker 1: Russian aluminium, so the Chinese aluminium producers are up. Equally

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00:27:42,080 --> 00:27:47,959
Speaker 1: anybody with exposure to US aliminium producers, particularly following Trump's

475
00:27:48,160 --> 00:27:51,320
Speaker 1: new tarifts on steel and aluminium. If you already have

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00:27:51,359 --> 00:27:53,720
Speaker 1: aluminium inside the US, people are willing to pay the

477
00:27:53,840 --> 00:27:58,480
Speaker 1: tree them for it. M The rest of the Russian

478
00:27:58,520 --> 00:28:02,240
Speaker 1: economy is dominated by fast or fuel, particularly oil and

479
00:28:02,320 --> 00:28:05,320
Speaker 1: natural gas. What effect I've sanctions had on those businesses,

480
00:28:06,800 --> 00:28:11,440
Speaker 1: So no or no immediate lasting sanctions. I mean, we've

481
00:28:11,440 --> 00:28:14,520
Speaker 1: seen we've seen the ruble slipping value against almost every

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00:28:14,560 --> 00:28:18,040
Speaker 1: other currency in the last eight hours, and certainly in

483
00:28:18,160 --> 00:28:20,480
Speaker 1: London speaking to invest here, there is a lot of

484
00:28:20,520 --> 00:28:25,040
Speaker 1: kind of wider alarm and contagious effects at the moment.

485
00:28:25,119 --> 00:28:29,120
Speaker 1: So people are concerned, um that about almost they're doing

486
00:28:29,240 --> 00:28:32,639
Speaker 1: any Russian business, because if they're not on the tanking

487
00:28:32,760 --> 00:28:35,040
Speaker 1: list today, what's to say they might not appear on

488
00:28:35,119 --> 00:28:37,320
Speaker 1: that list in due course. I think some of some

489
00:28:37,440 --> 00:28:39,560
Speaker 1: of that concern will probably ease off in the next

490
00:28:39,600 --> 00:28:42,800
Speaker 1: few days, but it is certainly becoming a more and

491
00:28:42,920 --> 00:28:46,880
Speaker 1: more whisky jurisdiction to do business with the kind of

492
00:28:46,880 --> 00:28:50,360
Speaker 1: specter of an ever expanding U S sanctioned program in

493
00:28:50,400 --> 00:28:53,920
Speaker 1: the background. So, Tom, when you talk to experts in

494
00:28:54,000 --> 00:28:57,880
Speaker 1: the aluminium how is that fields, I'm wondering, is there

495
00:28:57,920 --> 00:29:01,480
Speaker 1: any sense that there's some kind of inside it's surprised

496
00:29:01,720 --> 00:29:05,560
Speaker 1: for aluminum prices if say, the sanctions are lifted, or

497
00:29:05,640 --> 00:29:08,400
Speaker 1: as people sort of pass the details and get the

498
00:29:08,440 --> 00:29:11,320
Speaker 1: sense that this is more necessarily break the supply chains

499
00:29:11,360 --> 00:29:14,360
Speaker 1: that much. I think I think we have to expect

500
00:29:14,720 --> 00:29:17,520
Speaker 1: some of that price really to come off in the

501
00:29:17,560 --> 00:29:20,440
Speaker 1: next few weeks. But I mean, no one is really

502
00:29:20,440 --> 00:29:23,840
Speaker 1: talking about these sanctions being lifted anytime soon. Um, so

503
00:29:24,080 --> 00:29:26,320
Speaker 1: be the potential consequences that we need to be aware

504
00:29:26,360 --> 00:29:30,360
Speaker 1: of is in the past, when Russian businessmen have been

505
00:29:30,360 --> 00:29:32,960
Speaker 1: sanctioned by by the U S or other foreign regimes,

506
00:29:33,200 --> 00:29:36,000
Speaker 1: the Russian government has stepped in to provide some solutions

507
00:29:36,080 --> 00:29:39,880
Speaker 1: or support. So I would guess at the Kremlin will

508
00:29:39,920 --> 00:29:43,240
Speaker 1: be thinking now about creative solutions that it can potentially

509
00:29:43,280 --> 00:29:46,160
Speaker 1: offer to Russo to say part of that business, you know,

510
00:29:46,240 --> 00:29:49,720
Speaker 1: can they can they repackage some of the aluminium production

511
00:29:49,800 --> 00:29:51,960
Speaker 1: units under a different entity? Is there are ways to

512
00:29:52,200 --> 00:29:55,280
Speaker 1: circumvent sanctions there? But I also think that if you

513
00:29:55,280 --> 00:29:58,680
Speaker 1: look at the breadth of the sanctions effort against Aripaska,

514
00:29:58,880 --> 00:30:01,800
Speaker 1: eight of his businesses were targeted to Yeah, this isn't

515
00:30:01,840 --> 00:30:03,680
Speaker 1: simply a warning to him. This is very much a

516
00:30:03,720 --> 00:30:06,880
Speaker 1: blocking action. They are saying to their no, your your

517
00:30:06,920 --> 00:30:10,440
Speaker 1: businesses are no longer welcoming to you, no longer able

518
00:30:10,480 --> 00:30:13,160
Speaker 1: to trade. Tem Wilson, thank you so much, Minding and

519
00:30:13,200 --> 00:30:15,800
Speaker 1: Commodities reporter for Bloomberg News. Unfortunately, we're going to have

520
00:30:15,840 --> 00:30:21,800
Speaker 1: to leave it there. Thanks for listening to the Bloomberg

521
00:30:21,800 --> 00:30:24,480
Speaker 1: P and L podcast. You can subscribe and listen to

522
00:30:24,480 --> 00:30:29,040
Speaker 1: interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer.

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00:30:29,440 --> 00:30:33,000
Speaker 1: I'm pim Fox. I'm on Twitter at pim Fox. I'm

524
00:30:33,040 --> 00:30:36,320
Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast.

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00:30:36,360 --> 00:30:39,000
Speaker 1: You can always catch us worldwide on Bloomberg Radio