WEBVTT - Will Trump’s Bill Trigger a ‘Big, Beautiful’ Energy Crunch? 0:00:02.720 --> 0:00:08.959 Bloomberg Audio Studios, Podcasts, radio news. This is not the 0:00:09.039 --> 0:00:12.240 death of the US renewable energy industry in the United States, 0:00:12.240 --> 0:00:13.680 but it is a major setback. 0:00:22.840 --> 0:00:25.680 I'm Stephanie Flanders, head of Government and Economics at Bloomberg. 0:00:25.920 --> 0:00:29.040 Welcome to Trumponomics, the podcast that looks at the economic 0:00:29.080 --> 0:00:32.559 world of Donald Trump. Now he's already shaped the global economy, 0:00:32.920 --> 0:00:35.800 and what on earth is going to happen next? This 0:00:35.960 --> 0:00:40.600 week we're talking about the big Beautiful assault on renewable energy. 0:00:41.200 --> 0:00:44.440 Will the Republican megabill pass last week bring on a 0:00:44.479 --> 0:00:47.800 new American energy crisis? What could be the impact on 0:00:47.880 --> 0:00:52.320 electricity bills, the broader economy, and America's leadership in the 0:00:52.400 --> 0:00:56.240 race for artificial intelligence. We're recording this on Tuesday, the 0:00:56.280 --> 0:00:58.880 eighth of July. And of all the elements of the 0:00:58.920 --> 0:01:01.760 one Big Beautiful Bill, as Donald Trump called it, that 0:01:01.800 --> 0:01:05.360 he signed going into the July fourth holiday, one I 0:01:05.440 --> 0:01:07.640 find particularly hard to get my head round is the 0:01:07.680 --> 0:01:10.360 decision to get rid of tax credits for clean energy. 0:01:10.840 --> 0:01:13.280 As a result of that, wind and solar projects will 0:01:13.319 --> 0:01:15.759 cost more and more likely there will be a lot 0:01:15.800 --> 0:01:18.320 fewer built. In fact, in an analysis this week, a 0:01:18.400 --> 0:01:22.240 climate policy think tank called Energy Innovation forecast that the 0:01:22.240 --> 0:01:24.760 bill would put an end to three hundred gigawatts of 0:01:24.800 --> 0:01:27.920 wind and solar projects that would have otherwise come online 0:01:27.959 --> 0:01:30.240 in the next fifteen years. That's the equivalent of about 0:01:30.319 --> 0:01:33.880 three hundred nuclear reactors. Now, obviously that set back the 0:01:33.920 --> 0:01:38.000 fight against climate change and the decarbonization of the US economy. 0:01:38.680 --> 0:01:40.080 And that may not be much of a worry for 0:01:40.120 --> 0:01:42.160 the supporters of the big bill, but there could be 0:01:42.240 --> 0:01:46.880 more concern about another very likely consequence, higher electricity prices. 0:01:47.440 --> 0:01:50.400 That matters for voters facing rising utility bills, but it 0:01:50.440 --> 0:01:54.200 also matters for tech firms chasing the next breakthroughs in AI. 0:01:55.120 --> 0:01:58.040 The country that reigns supreme in AI will rule the world. 0:01:58.160 --> 0:02:00.800 Everyone seems to think that these days, including Donald Trump. 0:02:01.080 --> 0:02:02.760 In fact, you might remember on the day after his 0:02:02.800 --> 0:02:06.480 inauguration he announced the creation of Stargate, a project to 0:02:06.560 --> 0:02:08.880 expand AI infrastructure in the US. 0:02:09.160 --> 0:02:12.840 But to announce the largest AI infrastructure project by far 0:02:12.960 --> 0:02:18.000 in history. And it's all taking place right here in America. 0:02:18.639 --> 0:02:21.440 As you know, there's great competition for AI. 0:02:21.000 --> 0:02:24.320 And projects like Stargate need electricity, lots of it, And 0:02:24.360 --> 0:02:26.960 in fact, that's part of the reason electricity demand in 0:02:27.000 --> 0:02:29.840 the US is rising faster now than it has at 0:02:29.919 --> 0:02:32.919 anytime in the last twenty years. The tax credits in 0:02:32.960 --> 0:02:35.800 the Inflation Reduction Act on the President Biden helped the 0:02:35.880 --> 0:02:38.720 US keep up with that rising demand in theory by 0:02:38.720 --> 0:02:42.760 making clean power sources cheaper. Investments in wind, solar, and 0:02:42.800 --> 0:02:46.160 battery storage had spiked in the years after the IRA 0:02:46.400 --> 0:02:49.600 was passed, But now the Big Bill has changed all 0:02:49.639 --> 0:02:52.959 that and a lot of people including me, scratching their 0:02:52.960 --> 0:02:56.240 heads wondering what the plan is now. And this week 0:02:56.280 --> 0:02:58.760 I'm delighted to say I'm in the Washington Studio with 0:02:58.880 --> 0:03:01.600 two guests who have a good perspective on this topic 0:03:01.639 --> 0:03:03.800 and can help me think through the consequences for the 0:03:03.919 --> 0:03:07.280 US economy. First up, Ethan Zindler, the head of Country 0:03:07.280 --> 0:03:10.280 and Policy Research at Bloomberg NEF. That's the part of 0:03:10.280 --> 0:03:14.240 Bloomberg Research that's focused on the energy transition. And we 0:03:14.240 --> 0:03:17.640 should say that before joining US, Ethan served as Climate 0:03:17.680 --> 0:03:20.840 Counselor to the US Treasury Secretary of Janet Yellen from 0:03:21.000 --> 0:03:24.120 July twenty twenty three to January twenty five, so he 0:03:24.280 --> 0:03:28.120 was across a lot of policy efforts then, including helping 0:03:28.160 --> 0:03:30.920 to write and implement the Inflation Reduction Act. 0:03:31.240 --> 0:03:32.880 Welcome Ethan, thanks for having. 0:03:32.720 --> 0:03:35.640 Me and also with us Emily Bernbaut, who's a Bloomberg 0:03:35.720 --> 0:03:39.440 reporter here in DC who covers corporate lobbying and influence. 0:03:39.520 --> 0:03:41.720 Thank you so much for being on Trumpenomics. Emily. 0:03:41.920 --> 0:03:42.320 Thank you. 0:03:46.240 --> 0:03:49.840 So people will have heard quite a lot about that bill, 0:03:50.280 --> 0:03:55.440 but it's probably useful to just take stock of how 0:03:55.560 --> 0:03:59.560 that turned the tables for the renewable industry. What are 0:03:59.560 --> 0:04:02.960 the species measures that are going to be painful for 0:04:03.200 --> 0:04:04.960 that part of the US energy industry. 0:04:05.800 --> 0:04:08.440 There was a lot of last minute wrangling over the 0:04:08.520 --> 0:04:12.920 details of what this bill will do to the clean 0:04:13.040 --> 0:04:18.040 energy industry. The top line is that it's very bad. 0:04:18.560 --> 0:04:21.680 It's not as bad as it could have been. What 0:04:21.920 --> 0:04:25.760 ended up in the bill was pretty aggressive timelines for 0:04:26.080 --> 0:04:30.440 phasing out tax credits. But elements of the bill would 0:04:31.000 --> 0:04:35.200 encourage companies to begin construction over the next year, and 0:04:35.279 --> 0:04:38.120 if they're able to do so, it's likelier that they'll 0:04:38.160 --> 0:04:41.000 be able to get some of these important tax credits. 0:04:41.520 --> 0:04:46.880 But overall, they're going to have to begin construction very quickly, 0:04:47.560 --> 0:04:50.640 and these tax credits are going away on a more 0:04:50.640 --> 0:04:54.159 aggressive timeline than had initially been anticipated. 0:04:54.440 --> 0:04:56.000 Yeah, And that was what was interesting, because when it 0:04:56.040 --> 0:04:57.840 went from the House to the Senate, there was some 0:04:57.920 --> 0:05:03.320 expectation that the Senate would want to extend the time 0:05:03.400 --> 0:05:06.120 frame a little bit. The investments that drawer have been announced, 0:05:06.440 --> 0:05:09.000 give them a bit more time to get up and running. 0:05:09.000 --> 0:05:11.160 But if anything, the bills seemed to get worse. 0:05:12.000 --> 0:05:15.800 Yes, and at the last minute there was something that 0:05:15.839 --> 0:05:18.560 would have dealt a huge blow to the industry, which 0:05:18.640 --> 0:05:21.839 was this excise tax. There was basically panic in the 0:05:21.880 --> 0:05:25.520 industry and among moderate Republicans who said this excise tax 0:05:25.800 --> 0:05:30.720 would so dramatically increase costs for solar and wind projects, 0:05:31.520 --> 0:05:35.080 it would effectively make it untenable for a lot of 0:05:35.120 --> 0:05:38.440 these projects to move forward or begin construction. So right 0:05:38.520 --> 0:05:41.240 before the Senate passed it, they removed the excise tax, 0:05:41.240 --> 0:05:44.119 which is a huge relief, but they still are dealing 0:05:44.160 --> 0:05:45.880 with pretty aggressive phase outs. 0:05:46.240 --> 0:05:50.200 Ethan, you were saying just before we started that even 0:05:50.240 --> 0:05:53.239 though parts of the renewables industry was kind of breathing 0:05:53.240 --> 0:05:55.080 a sigh of relief or having at least dodged that 0:05:55.120 --> 0:05:58.919 particular bullet, not having this extra tax that the administration 0:05:59.000 --> 0:06:01.919 has already of vindicated that it's not done with the 0:06:01.920 --> 0:06:05.159 renewable industry. Yet what happened earlier this week. 0:06:05.279 --> 0:06:07.120 Yeah, things have kind of gone from bad to worse, 0:06:07.240 --> 0:06:10.719 even within the last less than twenty four hours. Basically, 0:06:10.760 --> 0:06:14.320 there's been some real questions about whether projects could qualify 0:06:14.440 --> 0:06:18.160 so long as they were quote unquote under construction, and 0:06:18.200 --> 0:06:22.880 the irs historically is to find under construction fairly liberally. 0:06:23.520 --> 0:06:27.200 And yesterday the White House issue to executive order basically 0:06:27.279 --> 0:06:30.159 saying that they are ordering the Treasury Department within the 0:06:30.200 --> 0:06:33.600 next forty five days to rewrite that rule, and if 0:06:33.600 --> 0:06:35.560 they do that in such a way, they can make 0:06:35.560 --> 0:06:39.760 it very challenging for projects to qualify. It is not 0:06:39.800 --> 0:06:42.120 even beyond the realm of the possible that they would 0:06:42.160 --> 0:06:46.039 write something that is essentially retroactive and effectively make it 0:06:46.120 --> 0:06:48.520 much more challenging for projects to actually be able to 0:06:48.600 --> 0:06:51.600 qualify for the credit. So, from our perspective at Bloomberg 0:06:51.880 --> 0:06:54.440 f we're trying to go back and sharpen our pencils 0:06:54.480 --> 0:06:56.160 and try and think about how much stuff is going 0:06:56.160 --> 0:06:57.560 to get built. But I think the one thing that's 0:06:57.560 --> 0:07:00.160 pretty clear as of this morning is that many who 0:07:00.200 --> 0:07:02.240 are in the wind and solar and storage industry are 0:07:02.279 --> 0:07:04.920 probably scrambling to get as much stuff as they can 0:07:05.440 --> 0:07:08.920 essentially under construction at this very moment, while they are 0:07:08.960 --> 0:07:12.120 concurrently probably lobbying the Treasury Department about what this new 0:07:12.160 --> 0:07:13.440 regulation is going to look like. 0:07:13.840 --> 0:07:15.280 I'm going to come back to you on some of 0:07:15.320 --> 0:07:18.920 the dynamics on the hill, But Ethan, let's just step back, 0:07:19.080 --> 0:07:21.400 and I know that's what Bloomerginny f likes doing. They 0:07:21.440 --> 0:07:24.440 tend to do the twenty five year horizons consider to 0:07:24.480 --> 0:07:28.920 be quite short term. But if you do take that 0:07:29.000 --> 0:07:31.800 kind of longer term, you know what has been happening 0:07:32.000 --> 0:07:37.280 to energy demand and electricity demand within that in recent years? 0:07:37.640 --> 0:07:40.160 And what was you know, until this bill, what was 0:07:40.200 --> 0:07:41.600 that basic plan for meeting it? 0:07:42.000 --> 0:07:45.480 Yeah, So the United States, like other wealthy developed countries, 0:07:45.720 --> 0:07:48.720 has been able to grow its economy without growing demand 0:07:48.760 --> 0:07:52.119 for electricity. Really for twenty years, essentially, we've had flat 0:07:52.160 --> 0:07:56.320 demand overall, largely because of energy efficiency improvements and new 0:07:56.320 --> 0:08:00.280 technologies and the desire to save costs. The last couple 0:08:00.320 --> 0:08:02.800 of years that started to change, and we think that's 0:08:02.840 --> 0:08:05.600 going to continue to change going forward. The number one 0:08:05.680 --> 0:08:08.240 driver in the short run has been AI and the 0:08:08.280 --> 0:08:11.560 demand from new data centers. We also think electric vehicles, 0:08:11.600 --> 0:08:13.160 as you look further out, are going to start to 0:08:13.200 --> 0:08:16.120 play a much bigger role as well. In the US, 0:08:16.400 --> 0:08:18.720 we think we're going to see demand for electricity double 0:08:18.760 --> 0:08:21.440 from about forty one hundred tarawad hours at the moment 0:08:21.920 --> 0:08:24.080 up over six thousand by the time you get to 0:08:24.120 --> 0:08:27.680 twenty fifty overall, and by twenty thirty five, we think 0:08:27.720 --> 0:08:30.679 that about eight percent of capacity in the United States 0:08:31.040 --> 0:08:34.320 is going to go specifically to powering data centers, which 0:08:34.360 --> 0:08:38.240 is a really considerable portion overall. One other quick just 0:08:38.280 --> 0:08:40.400 note in terms of trends, is that really over the 0:08:40.480 --> 0:08:42.920 last ten years or fifteen years or so, the US 0:08:42.960 --> 0:08:47.960 has really been rapidly decarbonizing our power generation sector. We 0:08:48.040 --> 0:08:50.600 went from about half our power coming from coal to 0:08:50.679 --> 0:08:52.880 well under twenty percent as the last year, could be 0:08:52.880 --> 0:08:56.559 even under fifteen percent this year depending on conditions. And meanwhile, 0:08:56.559 --> 0:08:59.200 renewables have grown from almost nothing to about twenty percent 0:08:59.280 --> 0:09:02.360 of generation. Nuclear is about twenty percent, so we're about 0:09:02.400 --> 0:09:05.080 forty percent zero carbon here, and the natural gas is 0:09:05.080 --> 0:09:06.960 a huge part of the story, which is a lot 0:09:07.040 --> 0:09:10.800 cleaner than coal overall. So the general trend has been 0:09:10.840 --> 0:09:13.680 towards cleaner sources of energy going forward. And if you 0:09:13.720 --> 0:09:15.640 look at what's gotten built in the last several years 0:09:15.679 --> 0:09:17.480 and what would get built in the next several years 0:09:17.480 --> 0:09:21.240 in terms of purely cost, it's renewables. The vast majority 0:09:21.240 --> 0:09:23.920 of new stuff that's due to come online is renewables, 0:09:24.240 --> 0:09:26.360 and so that is why it's so questionable that you 0:09:26.400 --> 0:09:29.160 would go out of your way to essentially raise the 0:09:29.160 --> 0:09:32.319 cost of those technologies, which is effectively what Congress is 0:09:32.360 --> 0:09:33.000 now done. 0:09:33.400 --> 0:09:35.239 Those of us who kind of looked on the outside 0:09:35.360 --> 0:09:39.720 and seen the US go from being a net consumer 0:09:39.760 --> 0:09:43.679 of energy or oil, I should say to an exporter, 0:09:44.400 --> 0:09:46.920 have been very familiar with a rather different story, which 0:09:46.960 --> 0:09:51.600 is America had this fracking revolution which was not environmentally friendly, 0:09:51.800 --> 0:09:55.520 but did bring an enormous amount of gas online, which 0:09:55.520 --> 0:09:58.760 has brought down the price of energy for US consumers. 0:09:58.800 --> 0:10:01.400 So I guess the story that you might tell against 0:10:01.480 --> 0:10:03.240 your story at least be sort of well, hang on 0:10:03.280 --> 0:10:05.760 a minute, it's fracking that has made this a kind 0:10:05.800 --> 0:10:10.040 of golden era for US energy prices, and the renewables 0:10:10.200 --> 0:10:13.280 is not completely reliable and is more is a sort 0:10:13.280 --> 0:10:15.200 of side show to that basic story. 0:10:15.440 --> 0:10:17.840 So yeah, really good points. I mean, certainly, we have 0:10:17.960 --> 0:10:20.760 the lowest price natural gas in the world in terms 0:10:20.760 --> 0:10:23.360 of production, and that has allowed a lot of manufacturing 0:10:23.360 --> 0:10:26.240 to be very competitive in the United States. I would 0:10:26.240 --> 0:10:29.240 note though, that first of all, that renewables plus storage 0:10:29.280 --> 0:10:31.720 gets you maybe not to twenty four hours of generation, 0:10:31.800 --> 0:10:34.320 but can get you enough production of electricity into the 0:10:34.360 --> 0:10:36.720 sort of key hours of the evening. And we're starting 0:10:36.760 --> 0:10:39.760 to see solar plus storage be very cost competitive in 0:10:39.840 --> 0:10:42.400 many markets around the world. Not all markets in the 0:10:42.520 --> 0:10:45.160 United States, but a bunch of markets. But then just 0:10:45.320 --> 0:10:48.040 purely speaking practically in the United States in terms of 0:10:48.080 --> 0:10:50.360 what we're going to build over the next five years, 0:10:50.640 --> 0:10:53.240 You're absolutely right that gas is cheap, and gas is 0:10:53.320 --> 0:10:55.800 cost competitive in a number of markets in the United States. 0:10:55.960 --> 0:10:58.520 The problem is you just cannot get your hands on 0:10:58.600 --> 0:11:01.640 a combined cycle gas at the moment for a number 0:11:01.640 --> 0:11:04.480 of years, anywhere from three to seven depending on who 0:11:04.520 --> 0:11:07.079 you asked. So in terms of what our next mega 0:11:07.120 --> 0:11:09.480 out of capacity is going to be, it basically has 0:11:09.559 --> 0:11:12.600 to be renewables because there isn't really any other sources, 0:11:13.160 --> 0:11:15.640 and if we have rising demand from AI, that means 0:11:15.640 --> 0:11:18.439 it's going to probably come from renewables. And again, if 0:11:18.440 --> 0:11:21.600 you take away essentially what has been a long standing 0:11:21.640 --> 0:11:25.080 tax credit and subsidy to the clean energy industry that 0:11:25.200 --> 0:11:29.040 is effectively socialized a discounted electricity production price in the 0:11:29.120 --> 0:11:31.679 United States, you're just simply going to concentrate it on 0:11:31.760 --> 0:11:33.959 certain markets. So the next place where you're going to 0:11:33.960 --> 0:11:36.640 build wind or solar project, potentially you're going to have 0:11:36.640 --> 0:11:39.480 to sign a higher price contract in order for the 0:11:39.559 --> 0:11:42.440 developer to make the return that they need without the 0:11:42.480 --> 0:11:43.080 tax credit. 0:11:43.360 --> 0:11:46.600 But if they're the only short term viable source of 0:11:46.600 --> 0:11:50.360 additional energy, then it surely must be cost effective to build. 0:11:50.679 --> 0:11:52.440 I mean, here's the question, and I think we're going 0:11:52.440 --> 0:11:54.240 to find this out over the next couple of years, 0:11:54.360 --> 0:11:57.760 is what's the breaking point for consumers? So, yes, you 0:11:57.880 --> 0:12:01.040 can pass on some form of higher electricity prices. But 0:12:01.240 --> 0:12:03.559 if you're a developer of a large scale data center, 0:12:03.600 --> 0:12:07.320 you're not necessarily entirely wedded to the United States. Just 0:12:07.360 --> 0:12:09.839 because the most AI has been built not that far 0:12:09.880 --> 0:12:12.760 from here, maybe thirty miles from here, just outside of Washington, 0:12:13.320 --> 0:12:15.840 doesn't mean that every next AI data center has to 0:12:15.880 --> 0:12:19.520 be here. To some large degree, AI is some the servers, 0:12:19.559 --> 0:12:21.600 not all To be clear, there's different types of servers 0:12:21.600 --> 0:12:24.679 and that's not my area of expertise, but some can 0:12:24.720 --> 0:12:27.400 really be anywhere in the world, and so they will 0:12:27.480 --> 0:12:32.079 go where the price of electricity is most affordable and reliable, 0:12:32.160 --> 0:12:35.760 and there are other options. Brazil is about seventy eighty 0:12:35.800 --> 0:12:39.560 percent hydropower, low cost. They've been trying very much to 0:12:39.600 --> 0:12:43.800 market Brazil as an AI place. Gulf States have enormous 0:12:43.840 --> 0:12:46.680 amounts of sun, very cheap solar. They don't put big 0:12:46.720 --> 0:12:50.079 tariffs sun solar equipment like we do, can build batteries 0:12:50.120 --> 0:12:52.000 to go along with it. They are certainly trying to 0:12:52.040 --> 0:12:55.080 market themselves as hubs for AI as well. So no 0:12:55.200 --> 0:12:58.320 foregone conclusion that the United States will be the one 0:12:58.320 --> 0:13:00.920 and only place where we build all this new capacity. 0:13:01.760 --> 0:13:05.440 But as far as you're concerned, the only way that 0:13:05.679 --> 0:13:08.199 this energy that we were expecting to come online, or 0:13:08.240 --> 0:13:10.240 electricity that we were expecting to come online in the 0:13:10.320 --> 0:13:13.920 US to meet this demand will actually come online is 0:13:13.960 --> 0:13:15.040 through higher prices. 0:13:15.480 --> 0:13:17.400 I mean, it seems inevitable. And I think one of 0:13:17.440 --> 0:13:19.520 the questions we're just trying to parse out, given the 0:13:19.600 --> 0:13:22.839 incredible complexity of what Congress has just done, is how 0:13:22.840 --> 0:13:25.920 many projects could still qualify for the tax credit if 0:13:25.920 --> 0:13:29.160 they get under construction basically yesterday, and how many of 0:13:29.160 --> 0:13:31.679 them will not And those that don't obviously are going 0:13:31.720 --> 0:13:33.880 to have to figure out some way to get compensated 0:13:33.920 --> 0:13:36.520 correctly so that they can earn the return that they want. 0:13:37.040 --> 0:13:39.040 The best guess at the moment is that if you 0:13:39.120 --> 0:13:42.280 get under construction sometime in this calendar year, you'll probably 0:13:42.320 --> 0:13:45.440 be okay. But the White House just created an additional 0:13:45.520 --> 0:13:47.280 uncertainty with this executive order. 0:13:47.559 --> 0:13:51.079 One I saw is that the future clean energy products 0:13:51.360 --> 0:13:54.920 that don't have these tax credits will cost fifty percent 0:13:55.000 --> 0:13:56.679 more to get built. Do you think that's in the 0:13:56.760 --> 0:13:57.440 right ball part? 0:13:58.120 --> 0:13:59.760 That feels a little on the high side of me, 0:13:59.840 --> 0:14:03.040 But we need to do the analysis ourselves. I think historically, 0:14:03.280 --> 0:14:05.640 if you look around the world, the history of clean 0:14:05.720 --> 0:14:07.840 energy is you have a number of countries that have 0:14:07.880 --> 0:14:10.240 put in place very generous supports in the form of 0:14:10.240 --> 0:14:12.440 feed in tariffs like we've seen in countries in Europe 0:14:12.440 --> 0:14:16.240 and elsewhere, and when they disappear, it's terrible news for 0:14:16.280 --> 0:14:18.839 the industry. But we also find that the industry is 0:14:18.880 --> 0:14:22.640 incredibly innovative about finding ways to reduce costs the US 0:14:22.760 --> 0:14:26.080 is really not a low cost market when it comes 0:14:26.120 --> 0:14:29.320 to putting solar on people's views in particular, but also 0:14:29.400 --> 0:14:33.080 large scale projects. So there's definitely some room for cost reduction, 0:14:33.160 --> 0:14:35.640 I think for the industry overall. But there's no question 0:14:35.760 --> 0:14:37.480 this is going to boost costs. In the case of 0:14:37.520 --> 0:14:40.680 a typical solar project, the tax credit is thirty percent 0:14:40.680 --> 0:14:43.640 of CAPECK. So a billion dollar project, three hundred million 0:14:43.720 --> 0:14:47.160 right off the top was basically disappearing because of tax credits. 0:14:47.520 --> 0:14:48.840 That has to be dealt with somehow. 0:14:49.320 --> 0:14:51.920 And I've seen the Energy Innovation Thing Tank from what 0:14:51.920 --> 0:14:53.880 you're saying, suggests that maybe it'd be a little bit 0:14:53.880 --> 0:14:56.040 on the high side, but their estimate of the impact 0:14:56.120 --> 0:14:59.600 on bills would be that the average energy bill by 0:14:59.680 --> 0:15:03.080 twenty thirty five could be nearly five hundred dollars higher 0:15:03.080 --> 0:15:07.760 in Michigan, similar maybe more in Maryland, and six or 0:15:07.800 --> 0:15:10.240 seven hundred eight hundred dollars higher in Texas than it 0:15:10.240 --> 0:15:11.640 would have been if the credits had remained. 0:15:11.720 --> 0:15:13.280 Yeah, I can't, I won't. I guess I want to 0:15:13.280 --> 0:15:15.840 dispute that we haven't done that analysis ourselves. I've seen 0:15:15.840 --> 0:15:18.520 different numbers from other research firms as well. There's no question, 0:15:18.600 --> 0:15:22.160 particularly in a market like Texas, which is really deregulated 0:15:22.160 --> 0:15:24.560 and where pricing can get passed along directly to large 0:15:24.560 --> 0:15:27.040 scale consumers, there's no question this is going to have 0:15:27.120 --> 0:15:30.320 a real impact ultimately. I think the interesting question is 0:15:30.320 --> 0:15:32.200 what about businesses. I mean, we talk a lot about 0:15:32.240 --> 0:15:34.600 retail consumers, and eventually they are the ones who get hit, 0:15:34.840 --> 0:15:37.880 but more immediately and often cases it's wholesale purchases of 0:15:37.920 --> 0:15:40.360 electricity that feel the effects. And that is one of 0:15:40.400 --> 0:15:43.520 the puzzling things why in this debate where the utility 0:15:43.600 --> 0:15:45.840 is not more engaged in this, because ultimately they're the 0:15:45.880 --> 0:15:47.440 ones who are going to get bigger bills that they're 0:15:47.480 --> 0:15:49.960 going to have to pass along to their consumers. Or 0:15:50.000 --> 0:15:52.000 where were the manufacturers who are going to have to 0:15:52.000 --> 0:15:54.640 pay higher prices for electricity than they would if you're 0:15:54.680 --> 0:15:58.760 in the say Ercot market or PJM. I'm puzzled as 0:15:58.760 --> 0:16:01.320 to why there wasn't a more engage conversation around this, 0:16:01.800 --> 0:16:02.240 And you're. 0:16:02.120 --> 0:16:04.360 Really my mind, even because I was thinking about your title, 0:16:04.400 --> 0:16:06.640 Emily and the fact that you are a reporter focusing 0:16:06.680 --> 0:16:09.520 on corporate lobbying and influence. You know, people have focused 0:16:09.560 --> 0:16:12.880 on the impact and the influence of the fossil fuel 0:16:12.920 --> 0:16:15.880 lobby in driving part of this bill. And we know 0:16:15.960 --> 0:16:19.200 that there's some parts of that industry that have been 0:16:19.240 --> 0:16:21.640 big donors to Donald Trump. But there were awful lot 0:16:21.680 --> 0:16:23.520 of people on the other side of the argument, including 0:16:23.520 --> 0:16:28.120 as Ethan mentions, there's the utilities and sectors that would 0:16:28.160 --> 0:16:30.840 really be hurt by this, not to mention the tech 0:16:30.920 --> 0:16:34.560 firms who are lobbying to get more cheap electricity. So 0:16:35.240 --> 0:16:38.040 why is it those voices just weren't heard in the 0:16:38.080 --> 0:16:38.840 last few weeks. 0:16:39.480 --> 0:16:45.440 Ultimately, the reason this bill goes so aggressively against clean 0:16:45.600 --> 0:16:51.200 energy is because of House Speaker Mike Johnson's math issue, 0:16:51.520 --> 0:16:54.480 which was that he could only stand to lose a 0:16:54.680 --> 0:16:59.480 very small number of Republican votes, and so that made 0:16:59.880 --> 0:17:03.600 the House Freedom Caucus, the group of hardline conservatives in 0:17:03.640 --> 0:17:07.800 the House, that made them very powerful in this conversation, 0:17:08.560 --> 0:17:11.560 and a lot of them, for the most part, really 0:17:11.640 --> 0:17:15.760 leaned towards the oil and gas industry. So thinking about 0:17:15.840 --> 0:17:20.440 Chip roy from Texas, he was one of the most 0:17:20.440 --> 0:17:23.560 consistent voices saying we really need to phase out these 0:17:23.560 --> 0:17:29.119 subsidies very quickly. He was in communication very closely with 0:17:29.480 --> 0:17:34.720 a conservative activist named Alex Epstein who actually shaped a 0:17:34.760 --> 0:17:38.520 lot of this debate behind the scenes, and basically Alex 0:17:38.560 --> 0:17:44.479 Epstein's arguments are in favor of natural gas. He says 0:17:44.600 --> 0:17:49.240 that solar and wind are unreliable sources of energy. You know, 0:17:49.280 --> 0:17:52.160 I'll let you debunk some of what he has to say, 0:17:52.200 --> 0:17:57.159 but essentially that the subsidies artificially lowered the cost of 0:17:57.520 --> 0:18:01.480 electricity and we're creating lee And so there is a 0:18:01.520 --> 0:18:05.440 lot of arguments behind the scenes against the clean energy 0:18:05.760 --> 0:18:09.280 industry and ultimately I think oil and gas just really 0:18:09.359 --> 0:18:10.760 won in this bill. 0:18:10.960 --> 0:18:12.400 To be clear, they're subsidized too. 0:18:12.640 --> 0:18:15.240 Yeah, say, I was going to say, there's a hell 0:18:15.240 --> 0:18:17.600 of a lot of subsidy on that side, but somehow 0:18:18.040 --> 0:18:21.800 they need subs tody, but the clean energy doesn't. I mean, 0:18:22.200 --> 0:18:24.159 even Texas is a surprise, right. I Mean that was 0:18:24.200 --> 0:18:26.920 one of the things that we said after Donald Trump 0:18:27.000 --> 0:18:29.240 won the election, and there was obviously this question mark 0:18:29.280 --> 0:18:31.440 about where would he go on And there was some 0:18:31.480 --> 0:18:34.400 pushback initially on the idea that he would completely repeal 0:18:34.400 --> 0:18:38.680 the IRA the Biden era tax credits, in part because 0:18:38.720 --> 0:18:42.080 of the support from the tech industry, but also because 0:18:42.119 --> 0:18:46.000 it was noticed that partly because it's easier to build 0:18:46.040 --> 0:18:49.040 stuff in the red states, that there were a lot 0:18:49.040 --> 0:18:53.480 of Republican states that had actually benefited enormously from the RA, 0:18:53.680 --> 0:18:57.600 including Texas. I think most of its new electricity supply 0:18:57.680 --> 0:19:01.080 had come from renewables in the last couple of years. 0:19:01.400 --> 0:19:04.240 So it's interesting that the representat different Texas just doesn't 0:19:04.240 --> 0:19:06.480 seem to factor that in. 0:19:07.280 --> 0:19:11.280 Yeah, it just became such a political talking point, calling 0:19:11.280 --> 0:19:16.440 the IRA the green new Scam, making it democrat led 0:19:16.680 --> 0:19:23.200 project essentially that Republicans had to completely nix and create 0:19:23.240 --> 0:19:26.840 their own path forward when it comes to energy, And 0:19:27.080 --> 0:19:30.679 an interesting element of the bill is that it's a 0:19:30.680 --> 0:19:34.400 lot less aggressive when it comes to nuclear energy, which 0:19:34.480 --> 0:19:37.159 is an area that I know that tech companies have 0:19:37.240 --> 0:19:41.000 been investing a lot into. Obviously, that's a lot slower 0:19:41.080 --> 0:19:44.960 moving and it doesn't address the immediate energy needs of 0:19:45.240 --> 0:19:49.640 data centers. But the nuclear energy industry came out with 0:19:49.760 --> 0:19:53.240 far less battle scars than some other parts of the industry. 0:19:53.280 --> 0:19:55.680 And that's a part of this conversation too, is sort 0:19:55.680 --> 0:19:57.959 of like weighing things in favor of certain kinds of 0:19:58.040 --> 0:19:59.120 energy over others. 0:19:59.400 --> 0:20:04.400 That was again much conversation about the political fallout from 0:20:04.480 --> 0:20:07.000 this bill. You know, over the last few weeks people 0:20:07.000 --> 0:20:10.560 have wondered whether the Republicans are really kind of ready 0:20:10.600 --> 0:20:14.280 for what happens in their constituencies when the impact of 0:20:14.359 --> 0:20:17.439 Medicaid cuts and others come through. But you would think 0:20:17.680 --> 0:20:20.560 if there's a short term big increase in energy prices 0:20:21.240 --> 0:20:25.520 that hits people's utility bills, they're electricity bills, is there 0:20:25.560 --> 0:20:28.040 not a fear on the hill the finger will be 0:20:28.080 --> 0:20:30.760 pointed to this bill when it comes to that. I mean, 0:20:30.760 --> 0:20:32.919 it's cost of living is such a big element of 0:20:32.960 --> 0:20:36.960 the Trump pledge, the promise if you like to voters, 0:20:37.359 --> 0:20:39.800 do they just think they'll be able to blame other stuff? Yeah? 0:20:39.840 --> 0:20:41.560 I think part of the sleight of hand is that 0:20:41.640 --> 0:20:44.920 tax cuts are coming in more immediately than some of 0:20:45.000 --> 0:20:50.120 the spending cuts, So meaning in the more immediate term, 0:20:50.240 --> 0:20:54.919 some people are going to see their taxes decrease, whereas 0:20:55.160 --> 0:20:59.520 some of the potential added cost to electricity bills or 0:21:00.200 --> 0:21:04.600 some of the loss of Medicaid coverage comes farther down 0:21:04.680 --> 0:21:07.920 the line. So it is a lot about timelines as well. 0:21:08.160 --> 0:21:11.840 They've written it in a way that at least Republicans 0:21:11.880 --> 0:21:15.640 hope that people don't see the more negative effects until 0:21:15.640 --> 0:21:17.480 after the midterms in twenty twenty eight. 0:21:17.560 --> 0:21:19.120