Speaker 1: Welcome to zero. I am Akshadarrati. This week, America's reset.
Speaker 1: Donald Trump is backed and possibly with the biggest mandate
Speaker 1: he's ever had that will have huge implications for climate
Speaker 1: and energy not just in the US but around the world.
Speaker 1: So this week I wanted to talk to someone who
Speaker 1: has been on the front lines of climate policy making,
Speaker 1: someone who's a Democrat and was lucky to be re elected.
Speaker 1: Congressman Rocanna represents California's seventeenth district, which includes Silicon Valley.
Speaker 1: Over the years, he's been a vocal advocate for climate policy,
Speaker 1: and he's also a member of the Select Committee on
Speaker 1: the Strategic Competition between the United States and the Chinese
Speaker 1: Communist Party. That means he has a big job to
Speaker 1: help secure America's future leadership in technology. In my conversation,
Speaker 1: I asked him about the consequences of Trump's election and what,
Speaker 1: if anything, can Democrats do to keep climate and clean
Speaker 1: energy at the top of the agenda. Later I also
Speaker 1: talked to Jason Bordoff from the Center on Global Energy
Speaker 1: Policy at Columbia University. We talked about how a Trump
Speaker 1: administration is likely to shape our climate and energy future,
Speaker 1: and it's not simply just drill, Baby, drill. Welcome to
Speaker 1: the show, Representative Kannor. It's a huge day today with
Speaker 1: the election, and when this episode goes out, the country
Speaker 1: will still be sorting through the many reasons Donald Trump
Speaker 1: was elected as president and the many issues that voters
Speaker 1: were responding to. But just days before the election, you
Speaker 1: wrote an op ed for Rolling Stone arguing that the
Speaker 1: polls were underestimating the importance of climate change to the
Speaker 1: average American. You said, climate change really is a kitchen
Speaker 1: table issue. But now there is in the old office
Speaker 1: who many people would call a climate denier coming in January.
Speaker 1: So how do you understand what just happened in the
Speaker 1: election in terms of where were to see the significance
Speaker 1: of climate change.
Speaker 2: It's important that we take away the right lesson from
Speaker 2: the election result. Obviously it was devastating for many of
Speaker 2: us who care about climate and progressive values, but it
Speaker 2: was in the context of people being unhappy about inflation,
Speaker 2: unhappy about the cost of living, unhappy about the situation
Speaker 2: on the border. Incumbent part parties have lost around the world,
Speaker 2: and in retrospect, having a president with forty percent approval
Speaker 2: rating made it very, very hard for whoever was running.
Speaker 2: But that doesn't mean that voters, particularly younger voters, aren't
Speaker 2: going to care about climate. I think there is an
Speaker 2: extraordinary opportunity to organize and mobilize around it with Trump
Speaker 2: coming to power, and to be prepared to run on
Speaker 2: that agenda in twenty twenty six and in twenty twenty eight.
Speaker 2: We need to make it clear that the world needs
Speaker 2: to invest in solar, which is the cheapest form of
Speaker 2: energy right now three cents to a kilowatt hour compared
Speaker 2: to natural gas at six cents and oil at seventh sense,
Speaker 2: that we need a climate resiliency infrastructure, and we've got
Speaker 2: to keep making the case. The one point I'll make
Speaker 2: is the Civil Rights Act in America was introduced in
Speaker 2: nineteen sixty four. I understand what the climate emergency time
Speaker 2: is of the essence, but progress takes time, and my
Speaker 2: message to the climate activist is let's keep going.
Speaker 1: But when you listed the things that people voted on,
Speaker 1: you said, there's immigration, there's inflation, there is the anti
Speaker 1: incumbency factor, but it does say that even today climate
Speaker 1: is not yet a kitchen table issue. How do you
Speaker 1: make it one?
Speaker 2: Well, it is an issue for many young Americans, for sure,
Speaker 2: and it's a kitchen table issue in terms of the
Speaker 2: people who are dealing with the awful costs of hurricanes
Speaker 2: and storms. But it's not as alien as people going
Speaker 2: into a grocery store and seeing that the price of
Speaker 2: groceries has gone up, people seeing that they can't afford
Speaker 2: a house until you have your basic needs met. Very
Speaker 2: hard to think broadly about the issues of what's good
Speaker 2: for the climate and the planet. So first we've got
Speaker 2: to make sure that we're talking about the day to
Speaker 2: day economic lives of people. And then we've got to
Speaker 2: continue to make the case that climate disasters are hurting
Speaker 2: the economy of America and having a negative impact on
Speaker 2: their kids and their lives. But it's very hard to
Speaker 2: make that central when people are not being able to
Speaker 2: pay the bills.
Speaker 1: Now, President Joe Biden's climate legacy is notable. We saw
Speaker 1: historic climate legislation get passed under his administration. But I
Speaker 1: do want to ask you what happens to the legacy now,
Speaker 1: And I think we should take it piece by peace,
Speaker 1: because there were three big piece of legislation that were passed.
Speaker 1: Let's start with the Inflation Reduction Act. What do you
Speaker 1: think stays, and what do you think goes.
Speaker 2: I believe that many of the tax credits will stay,
Speaker 2: and the reason is those are crediting jobs in red states.
Speaker 2: I mean, is Governor Kemp going to advocate not to
Speaker 2: have his state is getting a lot of those battery
Speaker 2: factories and those solar plants. I had actually been critical
Speaker 2: of the administration saying why aren't we getting them in
Speaker 2: more Union states? Why aren't we getting them more in Michigan, Wisconsin, Pennsylvania.
Speaker 2: But one advantage of having them disproportionately in the red
Speaker 2: states is it's going to be harder to take those away.
Speaker 2: Is Elon Musk really going to say to Donald Trump guests,
Speaker 2: let's take away the tax credit for electric vehicles or
Speaker 2: impose the two hundred thousand vehicle cap again, I don't
Speaker 2: think so. So I am confident hopeful that a lot
Speaker 2: of that will stay. I am concerned that he's going
Speaker 2: to start drilling in anwar. He's going to start grilling
Speaker 2: everywhere that we're going to have more efforts at subsidies
Speaker 2: for fossil fuel companies, and that to me is the
Speaker 2: bigger danger.
Speaker 1: Do you think he will also chip at the bypart
Speaker 1: as an Infrastructure Deal or the Chips Act.
Speaker 2: You know the Chips Act. I helped write the Chips
Speaker 2: in SIZAC, which Senator Schumer, and it's originated by a
Speaker 2: guy named Pete Crouch in the Trump administration. It was
Speaker 2: an idea that the Trump administration under POMPEII and started.
Speaker 2: So it would be short sighted, very short sighted for
Speaker 2: him to say America doesn't need to have industrial policy
Speaker 2: to make sure semiconductors are here and there. Many people
Speaker 2: in his administration would say we need that given the
Speaker 2: rise of China, that we need a self reliance. So
Speaker 2: he may tinker with it, but I would be surprised
Speaker 2: if he repeals it. And even Johnson, who talked about
Speaker 2: repealing it, walk that statement back. Same thing with the
Speaker 2: Infrastructure Bill. I mean, he's talked about infrastructure so many times.
Speaker 2: We got it done. But my hope is, if anything,
Speaker 2: he'd expand it. I don't think he's going to repeal that.
Speaker 2: There may be efforts to repeal parts of the IRA
Speaker 2: that are dealing with subsidies and satims for solar and wind,
Speaker 2: but I'm hopeful we'll be able to block that. I
Speaker 2: do think where he's going to try to really make
Speaker 2: a difference is on the EPA and taking away a
Speaker 2: lot of the rules that the EPA put on clean water,
Speaker 2: on p fast contamination, on other areas regulation.
Speaker 1: Let's come to oil production, because it is something you
Speaker 1: have been vocal about. You have criticized big ol companies
Speaker 1: for holding back climent action. But the fact is the
Speaker 1: US produces more oil than any other country in history.
Speaker 1: The US produces fifty percent more oil today than Saudi Arabia,
Speaker 1: and a lot of that increase, by the way, has
Speaker 1: come under the Biden administration. But of course Trump has
Speaker 1: come to the fore saying he wants more oil to come. Drill, baby, drill.
Speaker 1: None of this looks good for America's energy transition. What
Speaker 1: do you think it will take to move the US
Speaker 1: away from fossil fuels.
Speaker 2: Well, the economics should dictate US diversifying. I mean, it's
Speaker 2: like I said, three cents a killowt hour on solar,
Speaker 2: whereas it's six or seven sets of killoot hour on
Speaker 2: oil and natural gas. And we're foolish to not be
Speaker 2: investing in the energy supplies of the future. We're foolish
Speaker 2: not to be investing in energy supplies that are better
Speaker 2: for our national security than a dependence on a product
Speaker 2: that also improves the geopolitical situation of Russia, Iran and Venezuela.
Speaker 2: So I think what we have to do is make
Speaker 2: the argument that we are the party of the energy
Speaker 2: of the future guests. We have to have this transition
Speaker 2: in a way that makes sense. That you need oil
Speaker 2: and natural gas until there's an abundance of nuclear and
Speaker 2: solar and wind and geothermal. But the investments we need
Speaker 2: to be making are in the new things, just like
Speaker 2: we need iPhones and laptops, not old desktops or typewriters.
Speaker 2: Why are we investing in the old infrastructure as opposed
Speaker 2: to the new. One of the areas I have been
Speaker 2: focused on is getting rid of fossil fuel subsidies. Obviously
Speaker 2: that's going to be hard in a Trump administration, but
Speaker 2: we have to remain focused on that so that when
Speaker 2: we do get a democratic president, that can be part
Speaker 2: of the agenda. In the first one hundred days.
Speaker 1: As we record this, Republicans are likely to take control
Speaker 1: of this and it as well as the presidency, but
Speaker 1: the houses still upprograbs. No matter what happens, Democrats like
Speaker 1: you are going to have to work closely with Republicans
Speaker 1: to get anything done. Where do you see opportunities to
Speaker 1: work with Republicans on climate?
Speaker 2: There are not many on climate. There are other areas
Speaker 2: where I'm more optimistic. I would hope, at the very
Speaker 2: least to get some recognition of climate change as existing.
Speaker 2: I would hope that we could help maybe bring manufacturing
Speaker 2: back to America. I have a Modernization of Steel Act
Speaker 2: that would actually bring new steel plants to America that
Speaker 2: are direct reduction iron based on a hydrogen And one
Speaker 2: way we could focus on climate is we can reindustrialize
Speaker 2: America in a better, less carbon emittive way. And maybe
Speaker 2: we could get the some Republicans on board with that,
Speaker 2: not because they care about the carbon emissions, but because
Speaker 2: they care about the new manufacturing.
Speaker 1: And if you can the carbon equation out, what other
Speaker 1: types of solutions that are green technologies that may reduce
Speaker 1: emissions but aren't primarily being targeted for that that you
Speaker 1: could try and convince Republicans to join. You.
Speaker 2: Look, I think the Republican Party and its current form
Speaker 2: is very, very hostile to a lot of policies on climate.
Speaker 2: Maybe you could get some Republicans to care about clean air,
Speaker 2: clean water, having standards on p fast in terms of
Speaker 2: particles per million, or making sure that there's not too
Speaker 2: much prefat in products. Maybe we could have some preservation
Speaker 2: of open land. Maybe we can talk about the importance
Speaker 2: of replacing lead pipes so that we could have clean
Speaker 2: drinking water. But it's always a push with Republicans on
Speaker 2: the environment.
Speaker 1: In my recent conversation with billionaire and Silicon Valley veteran
Speaker 1: Vinod Coslar, who I assume you know, we talked about
Speaker 1: the possibility that Elon Musk could become Trump's climate champion.
Speaker 1: Is this something that you have thought about? Is this
Speaker 1: something that you've talked to Elon about? Is there any
Speaker 1: room for that to be somebody in the sphere of
Speaker 1: influence of Trump who would tell him why acting on
Speaker 1: climate is important.
Speaker 2: Well, we know thy have good ideas. I know, but
Speaker 2: for many years, and I know Ilon. I congratulated him
Speaker 2: last night, and I think it's worth my talking to
Speaker 2: Ilon about that. I mean, his focus right now with
Speaker 2: so much about getting bureaucracy out of the way of
Speaker 2: what he considers builders and entrepreneurs. But I think if
Speaker 2: he were to focus also on a climate agenda as
Speaker 2: part of the rebuild maybe he could break through because
Speaker 2: Donald Trump obviously has a lot of respect for him,
Speaker 2: and so it's a good idea, and it'll be one
Speaker 2: of the topics I'll discuss with the a lot when
Speaker 2: we meet.
Speaker 1: Now. Looking outside America, President Trump has long made it
Speaker 1: clear that he wants the US to leave the Paris Agreement.
Speaker 1: He withdrew once before in twenty seventeen, but because of
Speaker 1: a delay that was baked in, the exit was only
Speaker 1: completed in November of twenty twenty, and soon after President
Speaker 1: Biden saw to it that the US rejoined. This time,
Speaker 1: that withdrawal will happen faster and could likely have bigger consequences.
Speaker 1: The exit time is only one year, and some conservatives
Speaker 1: are pushing Trump to go further and pull the US
Speaker 1: out of the climate treaty itself, which could be nigh
Speaker 1: impossible to join given how divided Congress is. So what
Speaker 1: do you think happens to global climate diplomacy If the
Speaker 1: world's biggest economy and the second largest emitter walks out
Speaker 1: for good.
Speaker 2: We can't wellk out. We need to resist that, just
Speaker 2: like we resist walking out of NATO. And the argument
Speaker 2: I will make to my Republican colleagues, people like Senator Rubio,
Speaker 2: who drafted legislation to make it very hard for Trump
Speaker 2: to pull out of NATO, is that pulling out of
Speaker 2: these climate agreements is seating American leadership to China, which
Speaker 2: is a huge emitter, ceating American leadership to other nations,
Speaker 2: and that that's not in the interest of America to
Speaker 2: lead the world. If you want America to lead in ai,
Speaker 2: if you want America to lead in crypto, if you
Speaker 2: want America to lead in biotech, then why wouldn't you
Speaker 2: want America to lead in climate. It's a matter of
Speaker 2: our leadership around the world. And I'm hopeful that that
Speaker 2: argument will carry the day, so that even if Trump
Speaker 2: engages in a lot of rhetoric about withdrawal, that he's
Speaker 2: unable to do.
Speaker 1: So, and on China, you might be able to get
Speaker 1: bipartisan agreement. The Inflation Reduction Act was an important piece
Speaker 1: of legislation, and you had Senator Manchin explicitly say that
Speaker 1: he the key decided vote, supported it because he saw
Speaker 1: that that would help the US become more competitive against China.
Speaker 1: Now President Trump is perhaps more adversarial in his position
Speaker 1: on China, with wanting to have bigger tariffs. But how
Speaker 1: do you think the US can continue to compete with
Speaker 1: China on green technologies under a Trump administration.
Speaker 2: Well, a lot of it's going to come from my district,
Speaker 2: the private sector. When the private sector sees that the
Speaker 2: cost of producing renewable energy is going down, they see
Speaker 2: that the cost of battery storage is going down, that
Speaker 2: there could be enormous innovation in a huge market, nine
Speaker 2: trillion dollar market in energy. And yes, the government can
Speaker 2: help make that easier. But if the government is making
Speaker 2: it a bit harder, that may slow things down, but
Speaker 2: it's not going to stop the entrepreneurs for innovating. It's
Speaker 2: not going to stop many members of Congress from continuing
Speaker 2: to build these relationships around the world. And so I
Speaker 2: would say that we have to continue to move forward
Speaker 2: as states, the cities. This is the private sector because
Speaker 2: the federal government, while critical, is not the only game
Speaker 2: in town, and it's not the only thing that defines America.
Speaker 1: One of the things that has made your district and
Speaker 1: the state of California, but also so many other states
Speaker 1: in the US so good at innovating, is because they
Speaker 1: have attracted immigrants. But the issue that Trump campaigned on
Speaker 1: and the line he has taken on immigration seems to
Speaker 1: be pretty detrimental. Do you think the US will continue
Speaker 1: to attract the level of talent that enable this kind
Speaker 1: of innovation if Trump follows through on deportation or other
Speaker 1: radical policies that he has talked about in his campaign
Speaker 1: in the election.
Speaker 2: How extremely is I remember his last term, it slowed
Speaker 2: down immigration. Now partly that was because of COVID, but
Speaker 2: partly because it was the town he took. Now, the
Speaker 2: United States is a global race for talent. I mean,
Speaker 2: we want talented people to help innovate and create companies. Here.
Speaker 2: Trump had said on All In podcasts that he was
Speaker 2: open to reforming that process of founders and entrepreneurs and
Speaker 2: scientists and technology leaders. We'll see what he does, but
Speaker 2: he would really be kneecapping America if he does not
Speaker 2: allow us to succeed in the global race for talent.
Speaker 2: If you're a football team or a basketball team and
Speaker 2: you've got a great center or a great quarterback who
Speaker 2: happens to be from Japan, you obviously will do everything
Speaker 2: to sign them. Well, the same thing is true if
Speaker 2: you want to be a great company.
Speaker 1: And taking climate change is easier if countries cooperate. But
Speaker 1: Trump's narrative is one of competition. We talked a little
Speaker 1: bit about the US competition with China over green technologies,
Speaker 1: but under an America First agenda, European countries could also
Speaker 1: be seen as company editors. How do you think European
Speaker 1: allies are likely to respond to from on trade, on climate,
Speaker 1: on tariffs, things that are likely to play in this
Speaker 1: incoming press.
Speaker 2: I think they're thinking, how do we survive it, how
Speaker 2: do we get caught time where Democrats come back into
Speaker 2: power in Europe at least, But I think they're going
Speaker 2: to try to do things to mitigate the damage. The
Speaker 2: hope that a lot of this is populist rhetoric, that
Speaker 2: cooler heads will prevail, that we don't ignite a trade war.
Speaker 2: Notice trumpthing mentioned many tariffs in his speech last night,
Speaker 2: that we don't pull out a NATO, that we're still
Speaker 2: engaged in the world, and the Europeans need to hear
Speaker 2: from us from a diverse group of leaders, as the
Speaker 2: countries elsewhere in India and in the Middle East, about
Speaker 2: our commitment to staying engaged and recognizing that again the
Speaker 2: country is divided and the president doesn't speak for everyone.
Speaker 1: Now we are speaking just days before the start of
Speaker 1: COP twenty nine and Baku Azerbaijan. Trump doesn't control the
Speaker 1: White House yet. The US delegation is going to go
Speaker 1: under President Biden's instructions. But there's a risk that whatever
Speaker 1: happens at KOP will be irrelevant if Trump pulls out
Speaker 1: of the Paris Agreement. How do you think Trump's selection
Speaker 1: affects the discussions that will happen at COP twenty nine.
Speaker 2: I think the reality is that people are going to
Speaker 2: be looking for American leadership and reassurance. They're going to say,
Speaker 2: what is the consequences of this? Who is going to
Speaker 2: be pulling out of what treaties? What is Trump going
Speaker 2: to do to hurt climate? But there we have to
Speaker 2: reassure them that there's still a lot of climate activities
Speaker 2: people who care about the climate there. It would be
Speaker 2: important in my view, for the Trump administration to send
Speaker 2: someone there, and maybe as an initial matter, I can
Speaker 2: talk to Elon or others about the importance of US
Speaker 2: having representation there from the incoming new administration. But the
Speaker 2: key for surviving four years of Trump on climate is
Speaker 2: two progued. One is to make the argument to people
Speaker 2: in the Trump administration who may be sympathetic from a
Speaker 2: perspective of just American leadership and American innovation. And secondly,
Speaker 2: to make the case to the world in America still
Speaker 2: remains the technological leader in so many climate areas, and
Speaker 2: so many people like Bill Gates, like John Dorr, like
Speaker 2: the No North COASTLA like Elon Musk, remain committed to
Speaker 2: solving the climate problem and they shouldn't write off the
Speaker 2: entire country because of who our president is, who got
Speaker 2: elected with fifty one fifty two percent of the vote
Speaker 2: and forty eight percent descent.
Speaker 1: Well, last time around, when Trump was elected, Paris Agreement
Speaker 1: had just been signed, The climate agenda was in ascendency.
Speaker 1: People were recognizing that, Okay, the US might have pulled out,
Speaker 1: but rest of the world is committed. Then around twenty twenty,
Speaker 1: when Joe Biden was elected, there was a backlash against Trump,
Speaker 1: but also there's clear recognition that climate is front of
Speaker 1: the agenda. ESG investing, environmental social governance investing was in
Speaker 1: the ascendancy, and investors and financial authorities were getting involved
Speaker 1: in climate action. This time around, all of that is
Speaker 1: going in the opposite direction. It's not just the US.
Speaker 1: There are other elections around the world where climate hasn't
Speaker 1: been the top priority or has been a anti climate vote.
Speaker 1: Same thing with the ESG in the US, there's been
Speaker 1: political backlash against ESG investing. So the agenda globally has
Speaker 1: been in a very challenging spot. And so when you
Speaker 1: think about non federal actors or state actors or local
Speaker 1: governments or entrepreneurs wanting to take the baton while Trump
Speaker 1: is not caring about climate, they just have a much
Speaker 1: harder job, don't they.
Speaker 2: They do. But there's also a new generation that it's
Speaker 2: coming into positions of responsibility, a new generation coming in
Speaker 2: the Wall Street, into Silicon Valley, into nonprofits and businesses,
Speaker 2: and they care about climate, they care about having purpose
Speaker 2: in their jobs, they care about their future, their kids' future.
Speaker 2: And I'm waiting for that next generation to lead. Now.
Speaker 2: Will Donald Trump set back the climate agenda of the
Speaker 2: nation in the world for four years? Yes? Is he
Speaker 2: gonna make it harder? Yes, there's there's no sugarcoating that.
Speaker 2: But does that mean that the climate movement and the
Speaker 2: next generations who get it can't still help make progress
Speaker 2: on this incredibly existential issue. Absolutely not. I think their
Speaker 2: work must continue and in some ways they will break through,
Speaker 2: and you also may see a reaction in the polls
Speaker 2: and with the public against Trump. So right now, Trump's
Speaker 2: winning on all the immigration issues, but remember when he
Speaker 2: was in power, Democrats for winning because his policies were
Speaker 2: so draconian. If he institutes draconian policies that take us
Speaker 2: backwards with no appreciation of solar and winded batteries, there
Speaker 2: may become a reassessment in America saying, you know, Trump's
Speaker 2: gone too far, and it may give Democrats an advantage.
Speaker 2: These things have a way of being a pendulum, and
Speaker 2: I don't think that Trump's going into a a neanderous
Speaker 2: view of climate is going to be sustainable with the
Speaker 2: American public.
Speaker 1: Thank you, Representative Connor, thank.
Speaker 2: You for your leadership and voice.
Speaker 1: After the break, I speak to Jason Bordof, founding director
Speaker 1: of the Center on Global Energy Policy at Columbia University,
Speaker 1: about energy and tariffs under Trump. Jason, your job these
Speaker 1: is to think about energy policy at Columbia University, but
Speaker 1: before that you were in the Obama administration thinking about energy,
Speaker 1: climate and national security. So let's get into the meat
Speaker 1: of it. I've been speaking with Congressman Rocanna, who says
Speaker 1: that yes, under Trump, they're likely to be some amount
Speaker 1: of climate action that'll continue, things like tax credit under
Speaker 1: the Inflation Reduction Act. But unfortunately, he thinks working with
Speaker 1: Republicans on climate is just going to be very hard.
Speaker 1: Do you see any common ground?
Speaker 3: Yeah, and look, I do think there are at least
Speaker 3: some in the Republican Party thinking about climate change, although
Speaker 3: perhaps not with the same urgency or in the same way.
Speaker 3: It's also true that the business community is as well.
Speaker 3: And so take for example, the dramatic increase in electricity
Speaker 3: demand that we're going to see in the United States
Speaker 3: because of how energy intensive this historic and transformational new
Speaker 3: technology of artificial intelligence is, along with potentially electrifying other
Speaker 3: parts of the economy like vehicles and other things. So
Speaker 3: in order, this is not a first and foremost about
Speaker 3: climate change. This is about being competitive in a critically
Speaker 3: important technology for the twenty perst century AI. The US
Speaker 3: has a leadership role in that right now, and to
Speaker 3: maintain that leadership role for US companies like Meta and
Speaker 3: Microsoft and Google and Amazon, we need to really quickly
Speaker 3: help them meet their demand for more electricity and do
Speaker 3: it in a way that hopefully holds the existing set
Speaker 3: of consumers and businesses in the United States harmless and
Speaker 3: doesn't spread that cost among everyone because there'll be a
Speaker 3: backlash otherwise if we do so. If you say remove
Speaker 3: carbon from the equation, I guess you can just build
Speaker 3: coal plants or turn them back on old coal plants
Speaker 3: that are forty years old in this country. I don't
Speaker 3: think that's going to happen, even hypothetically if a Republican
Speaker 3: administration wanted to do that. That's not where these companies are.
Speaker 3: That's not where they see the world going. They know
Speaker 3: the political pendulum is going to swing in four years
Speaker 3: or eight years and that's not going to be viable.
Speaker 3: And they also do value the credibility the position they
Speaker 3: have as leaders in the energy transition. So will it
Speaker 3: change how the EPA regulates emissions and is that going
Speaker 3: to have an impact on how we think about the
Speaker 3: role of the decline of coal plants or maybe the
Speaker 3: role of natural gas in this transition. Sure, but these
Speaker 3: are still renewables are very cheap. You see these companies
Speaker 3: doing huge deals for nuclear power, and there actually is
Speaker 3: bipartisan agreement on both sides of the Aisle that nuclear
Speaker 3: is an important technology to move forward on. It's easy,
Speaker 3: It's actually easy to imagine for me that Republicans and
Speaker 3: Democrats might work together to say, what would it look
Speaker 3: like to dramatically shorten the timeframe to get new nuclear
Speaker 3: online in this country? Not for some because we need
Speaker 3: zero carbon electrons on the grid, and for others because
Speaker 3: we need a more electricity to meet the needs of
Speaker 3: critical technologies like AI, for which they are national security
Speaker 3: and economic reasons. That seems more likely to me than
Speaker 3: the idea that we would restart coal in this country
Speaker 3: for or the electricity that AI needs, partly because I'm
Speaker 3: not sure the policy environment will go in that direction,
Speaker 3: but also because that's what the that's not what the
Speaker 3: firms want to do.
Speaker 1: Okay, Now, let's come to the energy equation. The US
Speaker 1: producers today fifty percent more oil than Saudi Arabia, and
Speaker 1: Trump wants to increase that production with his drill Baby,
Speaker 1: drill monthra. So what do you think happens to clean
Speaker 1: energy as a result, Because government has limited bandwidth, even
Speaker 1: as the demand for clean energy may be growing, if
Speaker 1: the focus is on supporting fossil fuels, doesn't clean energy
Speaker 1: just suffer.
Speaker 3: I think the risk to the outlook for clean energy
Speaker 3: is less from what may be done to purportedly try
Speaker 3: to help support domestic oil and gas production, and more
Speaker 3: by what happens to policies targeted at supporting clean energy production.
Speaker 3: So if we pull back tax incentives in the IRA,
Speaker 3: if we pull back regulati tory tools and regulation that
Speaker 3: was implemented by the EPA for emissions from power plants
Speaker 3: and cars, you know, all of that has the potential
Speaker 3: to raise the cost or slow down the pace of deployment.
Speaker 3: If we take away tools like the Loan Program Office
Speaker 3: of the Department of Energy, which can lower the cost
Speaker 3: of capital to invest in clean energy projects, all of
Speaker 3: those would have a more significant impact, I think when
Speaker 3: you look at what might be done to unleash, if
Speaker 3: that's the right word, oil and gas production in the US,
Speaker 3: and as you said, it's been growing for many years
Speaker 3: since the show Revolution started, regardless of which party was
Speaker 3: in the White House. You know, there are a couple
Speaker 3: of constraints on that. So one or just market constraints.
Speaker 3: The more you produce, the more prices fall, and there's
Speaker 3: a sort of self correcting mechanism that the industry itself applies.
Speaker 3: Most of the production growth we've seen in the share
Speaker 3: revolution has been on private land, not on public land.
Speaker 3: And the big debates that happen, say in the permitting
Speaker 3: reform bill that is currently being proposed in Washington, you know,
Speaker 3: things like that affect the auctions and the leasing for
Speaker 3: new areas of the Federal offshore. Well, that may affect
Speaker 3: production a decade from now, It doesn't have an effect
Speaker 3: production in the near term. So some of the changes
Speaker 3: that would be made may have effects further out, less
Speaker 3: so in the near term. But even then, you know,
Speaker 3: you can go back and look at a chart with
Speaker 3: the acreage put up, the acreage allowed to be bid
Speaker 3: on by the Obama administration, the Trump administration, and the
Speaker 3: Biden administration, and under Trump, you see it goes through
Speaker 3: the roof right, much much more of the Federal offshore
Speaker 3: was open to the oil and gas industry, and they said,
Speaker 3: please bid on this and buy this from us so
Speaker 3: you can produce oil and gas. The amount that was
Speaker 3: actually bid by the industry didn't change hugely. It changed
Speaker 3: based on market conditions. The amount that is currently being
Speaker 3: proposed in the Permitting Reform bill. But there's a lot
Speaker 3: of controversy and disagreement about actually it didn't matter how
Speaker 3: much was posed. The amount actually bid on by the
Speaker 3: industry has always been less than what the Mansion Barroso
Speaker 3: Permitting reform bill would require because market conditions themselves are
Speaker 3: a constraint here. And I think I'm not saying it'll
Speaker 3: have zero impact, but I think that will probably be
Speaker 3: true here. It is worth remembering that even when George W.
Speaker 3: Bush was in office, you know, he was the one
Speaker 3: who stood up in a State of the Union and said, now,
Speaker 3: of course this was before the show Revolution. But even
Speaker 3: with the US being the largest producer in the world
Speaker 3: fifty percent more than Saudi, as you said, although less
Speaker 3: remember Saudi's voluntarily withholding barrels from the market to try
Speaker 3: to get the price up, they could be producing more
Speaker 3: and if the market needs that, they will. It's still
Speaker 3: a global market, so regardless of how much we're producing,
Speaker 3: if something happens in the Middle East or anywhere else,
Speaker 3: the price of the pump goes up for everyone, regardless
Speaker 3: of how much we produce. And the best thing we
Speaker 3: can do to enhance the resilience of our economy to
Speaker 3: inevitable oil price shocks is to use less oil in
Speaker 3: the first place. There have Republican administrations have recognized that
Speaker 3: in the past. I don't know if a Trump administration will,
Speaker 3: but it should.
Speaker 1: And it's not just sold production. The US is also
Speaker 1: the world's largest exporter of liquefied natural gas today. What
Speaker 1: do you think happens to the role of gas in
Speaker 1: the energy transition as a result of Trump coming to power,
Speaker 1: Do we start talking about gas as a bridge fuel again?
Speaker 3: Well, we may start to talk about it that way
Speaker 3: that you know, it doesn't mean it's true. But the
Speaker 3: question of what happens to the role of gas globally,
Speaker 3: you know, is viewed differently in emerging and developing economies,
Speaker 3: as you know very well, than it is in developed
Speaker 3: economies like the US and Europe. I suspect a Trump administration,
Speaker 3: based on what it said, would move very quickly to
Speaker 3: remove the temporary ban presumably temporary ban that the Biden
Speaker 3: administration had put on the approval of new export permits
Speaker 3: to export natural gas from the United States. But again,
Speaker 3: kind of the same with oil in terms of the
Speaker 3: market is going to determine a lot of this. There
Speaker 3: is a quite significant question about whether that will have
Speaker 3: any impact at all or much of an impact on
Speaker 3: what happens to the global gas market and how much
Speaker 3: gas export capacity the US builds. Even with the pause
Speaker 3: that the Biden administration put in place where they said,
Speaker 3: we're not going to give any new permits to export
Speaker 3: natural gas until we do some study of the economic
Speaker 3: and environmental implications of that. We were already roughly doubling
Speaker 3: export capacity over the next several years in this country.
Speaker 3: And if you look at the projections in the latest
Speaker 3: World Energy Outlook by the IA, they view a world
Speaker 3: that by the end of the decade is kind of
Speaker 3: a wash in natural gas. Maybe things tighten up a
Speaker 3: decade down the road after that. So the question is
Speaker 3: how much more gas does the world really need and
Speaker 3: who's going to step up to invest in multi billion
Speaker 3: dollar projects to export more gas? If everybody who wants
Speaker 3: a permit can have a permit, I think you know,
Speaker 3: I'm not saying the answer to that will be zero.
Speaker 3: There may be a couple of projects that move forward,
Speaker 3: but I don't think it's a huge number, just given
Speaker 3: the market reality of what's happening in the world, how
Speaker 3: much gas is coming online, and also the outlook for
Speaker 3: gas demand as you see more competition from other fuels,
Speaker 3: including zero carbon fuels.
Speaker 1: Trump has also been pushing tariffs in a big way,
Speaker 1: and economists have warned against the kind of broad tariffs
Speaker 1: that he has proposed, but he's dead set on them.
Speaker 1: Say you were to advise Trump on tariffs, what kind
Speaker 1: of tariffs would you be okay with? And what would
Speaker 1: you not be okay with?
Speaker 3: Yeah, I mean, I think it's notable that a lot
Speaker 3: of the analysts and the large banks and such, when
Speaker 3: they look at the outlook for oil prices, they had
Speaker 3: projected lower oil prices under a Trump administration, not because
Speaker 3: production in the US would be dramatically higher, but because
Speaker 3: of concerns about what the tariff policy would do to
Speaker 3: the outlook for US economic growth. And I share a
Speaker 3: concern that very aggressive and across the board use of
Speaker 3: tariffs could be detrimental to the US economy and to
Speaker 3: consumers and businesses that they're purportedly aimed to help. I
Speaker 3: think it's fair as the Biden administration, as both sides
Speaker 3: of the aisle actually have started to do. As Jake
Speaker 3: Sullivan said at the Brookings Institution a year or two ago,
Speaker 3: it is appropriate to rethink some of the assumptions about
Speaker 3: global economic integration, whether other countries would play by the rules.
Speaker 3: We assumed that they would, China in particular, and maybe
Speaker 3: at just course if that's not playing out the way
Speaker 3: we thought. And so when you look at tariffs that
Speaker 3: were put in place on imported goods from China like
Speaker 3: electric vehicles and other things, there are actually several rationales
Speaker 3: given for that. One is there's more carbon intensity and
Speaker 3: production there, so you can think about a carbon border
Speaker 3: adjustment as one tool, and the Europeans are doing that.
Speaker 3: Maybe to work with the Europeans on something like that.
Speaker 3: There may be national security considerations we want to think
Speaker 3: hard about that. I think they're probably different for advanced
Speaker 3: semiconductors with sensitive military applications than they are for a
Speaker 3: cheap manufactured product like a solar panel. So not all
Speaker 3: clean energy should be thought of the same way, and
Speaker 3: we want leadership. There are economic reasons why we want
Speaker 3: industries to be located here. Tariffs, if they're well targeted,
Speaker 3: if they're designed carefully, they can play a role in
Speaker 3: offsetting some of the unfair practices that where we're not
Speaker 3: on a level playing field with others, particularly in China
Speaker 3: and the rules of the WTO. I think both sides
Speaker 3: of the all frankly, have been too quick to dismiss
Speaker 3: and throw out I understand why people are concerned the
Speaker 3: WTO is not fit for purpose for how fast the
Speaker 3: world is moving anymore. But there is a rules based
Speaker 3: trading system, and it's designed to handle things like unfair
Speaker 3: subsidization of certain industries, and we want to not lose
Speaker 3: sight of those tools, even if new tools are probably
Speaker 3: needed as well.
Speaker 1: Thank you Jason, Thanks Ocsha, it's great to talk with you.
Speaker 1: Thank you for listening to Zero. And now for the
Speaker 1: sound of the week, that's the sound of oil drilling.
Speaker 1: Expect lots more of it to happen. If you liked
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