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Speaker 2: The White House Press Secretary Caroline Lovitt, she said she
Speaker 2: saw the reporting from moritters around a March first deadline,
Speaker 2: the idea that this would be bumped back. She says
Speaker 2: it is false that she was just with the President
Speaker 2: in the Oval Office and can confirm that tomorrow, the
Speaker 2: February first deadline that President Trump put into place with
Speaker 2: a statement several weeks ago continues. So I guess that's
Speaker 2: where we stand at this moment. We could hear from
Speaker 2: Donald Trump himself on this later today. He is expected
Speaker 2: to be signing executive orders this afternoon, and we'll be
Speaker 2: traveling from Joint Bass Andrews down to Florida and mar
Speaker 2: A Lago, another opportunity for him to potentially address the cameras.
Speaker 3: Yeah, this is all anecdotal.
Speaker 4: We have no paper on this and there's nothing official,
Speaker 4: so we're just trying to follow the verbal cues here
Speaker 4: from the Press Secretary and reporting that's coming out of
Speaker 4: the White House. If we can bring in our panel here,
Speaker 4: Rick Davis and Genie Shanzano or with us Bloomberg Politics contributors.
Speaker 4: Rick is of course our Republican strategist partner at Stone
Speaker 4: Court Capital, and Genie is our Democratic analyst and political
Speaker 4: science professor at Iona University. Genie, once it's official here,
Speaker 4: I guess we'll assume that this is going to be
Speaker 4: the case. Canada, Mexico twenty five percent, China ten percent.
Speaker 4: There's been talk of off ramps already. Is this just
Speaker 4: the opening salvo here? And these could be pulled back
Speaker 4: if certain conditions are met, or this is the new
Speaker 4: reality for these three countries.
Speaker 5: You know, I don't think we know yet. And I
Speaker 5: thought it was fascinating your conversation with the representative because
Speaker 5: what she said speaks to this directly. She said he
Speaker 5: should come to Congress on such sweeping tariffs, just as
Speaker 5: he should have come to Congress on freezing federal grants
Speaker 5: and loans. And this is something that Donald Trump and
Speaker 5: Russell Vote have talked about. Russell Vote said Donald Trump
Speaker 5: will make impoundment great again. They are trying to ensure
Speaker 5: that the power of the purse, given an Article one
Speaker 5: to Congress, moves to the executive branch, and they are
Speaker 5: trying to do that and trying to challenge the Impoundment
Speaker 5: Act and so be sweeping tariffs which may go into
Speaker 5: effect tomorrow, may go into effect in a month. It
Speaker 5: sounds like this Press secretor is saying tomorrow and this
Speaker 5: federal freeze is setting up not just a fight with
Speaker 5: countries and an impact on our economy directly, but also
Speaker 5: a fight between the executive branch and potentially Congress when
Speaker 5: they wake up and realize that the president is trying
Speaker 5: to get enormous executive power by taking over the power
Speaker 5: of the purse since seventeen eighty nine in the hands
Speaker 5: of Congress. But that's what they promised in Project twenty five,
Speaker 5: that's what russ Vote has talked about, and that's what
Speaker 5: the President has done in his first two weeks. And
Speaker 5: he's continuing down that.
Speaker 2: Road well, and the briefing is continuing as well at
Speaker 2: the White House. Genie, we're still hearing from Caroline Levitt
Speaker 2: on these tariffs. She does reiterate they are incoming tomorrow
Speaker 2: on Canada, citing reasons for that as being both Canada
Speaker 2: and Mexico have allowed an unprecedented invasion of a legal
Speaker 2: fentanyl that is killing American citizens and allowing legal immigrants
Speaker 2: into the country. I guess the question here, Rick, is
Speaker 2: if these tariffs are intended to create a behavioral change
Speaker 2: to make something different be happening at the northern and
Speaker 2: southern borders. Do we have an idea of what the
Speaker 2: metrics are around that what the administration is going to
Speaker 2: decide is good progress for these things to potentially be lifted.
Speaker 6: Yeah.
Speaker 7: I think it's pretty subjective, right. I mean, if they
Speaker 7: see progress that governments are taking, not necessarily on you know,
Speaker 7: sort of quantity, but even you know, measures that these
Speaker 7: governments might put in place sequent to the tariffs, then
Speaker 7: maybe they see the behavioral change being enough to be
Speaker 7: able to relax these tariffs. Original reporting was we might
Speaker 7: see these tariffs going to effect March first. We would
Speaker 7: have had twenty eight days to actually see what kind
Speaker 7: of response the governments in Mexico and Canada would produce,
Speaker 7: and maybe that would be part of the negotiation and say, well,
Speaker 7: you're trying the best you can, maybe reduce the tariffs
Speaker 7: in half. I mean, like, it just seems to me
Speaker 7: that if these are going into effect tomorrow, you know,
Speaker 7: it puts these both these countries in a significant defensive
Speaker 7: crouch and they'll have to wonder do we meet these
Speaker 7: tariffs with retaliation of our own? Do we take the
Speaker 7: suggestion that we actually implement more drastic efforts around the stent,
Speaker 7: the stop of fentanyl and immigration. I would mention that
Speaker 7: immigration statistics are significant lower than they've been for nearly
Speaker 7: half a decade right now. So what's as you say, Kaylee,
Speaker 7: what's the metric that you're going to judge progress from?
Speaker 7: And typically we'd have people from the administration out briefing
Speaker 7: on this, so everybody could be prepared for whatever the
Speaker 7: president announces, but not in this White House. We're going
Speaker 7: to hear it first from the President, probably through a
Speaker 7: tweet and echoed then throughout his administration.
Speaker 4: Genie does the implementation of tariffs, is getting some details
Speaker 4: on this finally actually inform or even accelerate the debate
Speaker 4: around taxes. This is the other component, of course, that
Speaker 4: lawmakers have been dealing with here. How you balance tax
Speaker 4: cuts with potential revenue from tariffs? Could this actually help
Speaker 4: to accelerate the debate on Capitol Hill.
Speaker 5: It certainly could. I mean, I think I would say
Speaker 5: we have to take a wait and see approach on
Speaker 5: if it does. And I think part of our problem
Speaker 5: here is that we simply have not gotten a lot
Speaker 5: of direction from the White House. To Rick's point as
Speaker 5: to what this is going to look like. What we
Speaker 5: can rely on is what Donald Trump did in his
Speaker 5: first term when he imposed much more targeted tariffs. The
Speaker 5: impact on the US economy was dramatic in terms of
Speaker 5: factory jobs, in terms of real median household income, and
Speaker 5: that's what economists have been responded to, but responding to rather,
Speaker 5: you know, I don't think anyone disagrees with Donald Trump
Speaker 5: that tariffs in a targeted manner can be used to
Speaker 5: ensure that there is equanimity in terms of trade, that
Speaker 5: we have a ability to compete fairly with other countries
Speaker 5: in the world. But we have so little information on
Speaker 5: this at this point to go on beyond the fact
Speaker 5: we were told that tariffs are his favorite word and
Speaker 5: that he intends to go a whole hog, if you will,
Speaker 5: in implementing them, and in an economy this strong, that
Speaker 5: is a concerning way forward. And so we don't know
Speaker 5: what happens in the future, but in the past, the
Speaker 5: targeted tariffs had a real impact on people's lives, and
Speaker 5: the American public paid for those, including farmers in the Midwest.
Speaker 2: Well, and we're seeing just news around Terris having a
Speaker 2: real impact in financial markets today. What was dollar weakness
Speaker 2: is turning into a little bit more dollar strength. You're
Speaker 2: seeing movement in the Mexican peso and the looney, the
Speaker 2: Canadian dollar. You're seeing oil coming off the lows as well.
Speaker 2: We're only down about a tenth of a percent here,
Speaker 2: because that's a big factor in this equation with Canada,
Speaker 2: specifically Rick. The vast majority of heavy crude imports that
Speaker 2: the United States brings into the country come from Canada,
Speaker 2: and that's not easily replaceable unless you want to turn
Speaker 2: to Venezuela, which obviously has its own complications. And Donald
Speaker 2: Trump suggested at the White House yesterday that a lot
Speaker 2: of his decision making on whether there would be, say,
Speaker 2: an exemption for oil, will depend on price. How price
Speaker 2: reactive do we think a president who in his first
Speaker 2: turn cared very much about what the stock market was doing,
Speaker 2: for example, do you think Trump will be around these policies,
Speaker 2: whether it's oil prices or the things genies referring to
Speaker 2: prices at the grocery store, things Americans will see, Okay.
Speaker 7: Lee, I mean, we heard a lot about the price
Speaker 7: of eggs all during this campaign, but since they've skyrocketed
Speaker 7: almost doubled in price since the president came into office,
Speaker 7: we haven't heard Donald Trump talk much about his interest
Speaker 7: in egg prices. So look, everything is transactional. I mean,
Speaker 7: one thing we know from the first term of Donald
Speaker 7: Trump is he is a transactional president. When he sets
Speaker 7: out these kinds of tariffs there to elicit a response,
Speaker 7: it's a deal. And if that deal includes, you know,
Speaker 7: watching the price of gasoline at the pump to determine
Speaker 7: whether or not he creates an exemption for Canadian crew
Speaker 7: coming into the United States outside the tariff regime, then
Speaker 7: those are the kinds of things that he's simply.
Speaker 8: Going to do.
Speaker 7: We should expect that. I mean, I would remind people
Speaker 7: that Canada put tariffs on there our own crude coming
Speaker 7: into the United States last year. That hurt some of
Speaker 7: the producers who take Canadian crude and refine it. So
Speaker 7: this little tit for tat crude war has been going
Speaker 7: on for some time, and I wouldn't be surprised if
Speaker 7: it doesn't get caught up in this terraf regame itself.
Speaker 4: The Press Secretary has been talking about the conditions here
Speaker 4: and the causes for these tariffs, Genie pointing to fentanyl
Speaker 4: as a primary cause when it comes to Canada, for instance,
Speaker 4: Mexico has its own obviously situation when it comes to fentanyl,
Speaker 4: but also illegal immigration. I just wonder, if we're looking
Speaker 4: at these two countries differently, is there something Canada can
Speaker 4: do on fentanyl that, for instance, wouldn't trigger a pullback
Speaker 4: of tariffs in Mexico.
Speaker 5: You know, I think there probably is. And you know,
Speaker 5: fentanyl is something that people on all sides of the aisle,
Speaker 5: and rightly so, have been terribly concerned about. President is
Speaker 5: absolutely right to focus on that and if he can
Speaker 5: use targeted tariffs to improve the situation, that is important.
Speaker 5: But the problem is, you know, perhaps those conversations are
Speaker 5: going forward and they're not being reported at this point.
Speaker 5: The problem is what we're hearing about are really really
Speaker 5: massive tariffs against our neighbors. And you know, just to
Speaker 5: use an example, Donald Trump has talked about the fact
Speaker 5: that he is concerned that China is in the Panama
Speaker 5: Canal and people have pushed back on that. Well, what
Speaker 5: we do know is that China is making inroads with
Speaker 5: our allies in this part of the hemisphere where the
Speaker 5: United States reigns and should reign supreme. We have to
Speaker 5: be very careful long term about doing things to disrupt
Speaker 5: our relationships with our allies. And so, yes, we do
Speaker 5: need to get a handle on fetanol. He's right on that.
Speaker 5: But do you need to take a hammer or is
Speaker 5: there sort of a chisel. I don't even know if
Speaker 5: that's the right metaphor guys, or a way to approach
Speaker 5: it that gets you where you want to be with fentanyl,
Speaker 5: but doesn't long term destroy our relationships with our allies
Speaker 5: and in the wash impact our economy unnecessarily, which doesn't
Speaker 5: help any of us.
Speaker 2: All Right, Jeanie Shanzano and Rick Davis, our signature political panel,
Speaker 2: helping us out on this Friday as we grapple with
Speaker 2: the breaking news from the White House. Thank you so
Speaker 2: much again. The White House Press Secretary Caroline Lovitt confirming
Speaker 2: that it is tomorrow, February first, the President intends to
Speaker 2: put in place twenty five percent tariffs.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
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Speaker 4: Where we need to get something more official than just
Speaker 4: the words of the press secretary. But that's what we
Speaker 4: have to go on right now, and we may well
Speaker 4: even more. Donald Trump's going to be signing some executive
Speaker 4: orders and we'll be keeping our eyes on the president
Speaker 4: round three o'clock, i think, is what the plan was
Speaker 4: at this point. Knowing as well, about forty five minutes
Speaker 4: from now he's set to be meeting with Jensen Wong,
Speaker 4: the CEO of Nvidia. Will there be news on export
Speaker 4: controls on this same day that we hear about tariffs,
Speaker 4: Will of course let you know if that's the case.
Speaker 4: That's why we have multiple editions of Balance and Power.
Speaker 4: We need more than one at this point. It's a
Speaker 4: great pleasure to bring in Dan Briget. What a perfect
Speaker 4: time to have the former Energy secretary from of course
Speaker 4: the first Trump administration as we watch crude oil turn
Speaker 4: positive here with what appears to be an exemption. We'll
Speaker 4: let you know if that is made official. But Secretary,
Speaker 4: it's good to see you and thanks for joining us
Speaker 4: here at the table today. How are you looking at
Speaker 4: this as tariffs are detailed now with your eye on
Speaker 4: the energy space.
Speaker 8: Well, I think it's going to be important to see
Speaker 8: the impact obviously on an individual company. So as we
Speaker 8: look at the earnings reports today and we watch what
Speaker 8: the CEOs are talking about, we'll have to evaluate what
Speaker 8: is exactly done by the White House and then what
Speaker 8: will be the exact impact on our company's producers here
Speaker 8: in the United States. But when we think about tariffs,
Speaker 8: so I think the simplistic economic analysis has been a
Speaker 8: tariff as attacks attacks is usually paid by the consumer,
Speaker 8: so prices will go up. It's not quite that simple
Speaker 8: in this case with Canada. We do import about four
Speaker 8: million barrels per day from Canada of heavy crude, and
Speaker 8: many of our refiners in the West and the Midwest
Speaker 8: are dependent upon that crude. But when you think about
Speaker 8: tariffs and who ultimately pays, it really boils down to
Speaker 8: who has options, who has optionality, and then the United
Speaker 8: States for refiners, it is possible. I'm not suggesting it's easy,
Speaker 8: but it is possible for refiners to retool their facilities
Speaker 8: to do sweet crude rather than heavy sour that comes
Speaker 8: out of Canada. If you think, if you put yourself
Speaker 8: in the shoes of Canada, how many markets do you
Speaker 8: have for your crude oil? It's very difficult to get
Speaker 8: that oil to the coast, so Asia and Europe become
Speaker 8: difficult customers. It raises their costs as well. So it
Speaker 8: looks like on the surface, we may have more options
Speaker 8: than they have for the product itself, which means that
Speaker 8: they would low or their prices to maintain access to
Speaker 8: the US market. So the notion that tariffs by definition
Speaker 8: mean higher prices not always the case in economics. And
Speaker 8: I think, as I watch the President, as I look
Speaker 8: at his words and I look at his actions, he's
Speaker 8: a very shrewd negotiator, I think.
Speaker 3: He knows this well.
Speaker 2: So when we consider optionality here in this suggestion that
Speaker 2: you can retool your refining capacity for different products, how
Speaker 2: long would that process actually take? Because if we're saying
Speaker 2: this goes into effect tomorrow, suddenly you're cut off of
Speaker 2: that heavy crud that's not instantly replaceable. What is the
Speaker 2: immediate impact on pricing?
Speaker 8: It's difficult. I mean, you're right that the timetable does matter.
Speaker 8: So in the short run you may see some increase
Speaker 8: in prices, but in the long run, infrastructure gets built,
Speaker 8: production continues as it does today, and prices ultimately come down.
Speaker 8: The question is who pays the tariff, And I think
Speaker 8: that's what we need to focus on over the course
Speaker 8: of the next couple weeks and months, as the President
Speaker 8: determines how to negotiate with Canada, not really over the
Speaker 8: price of oil. I mean, we have to remember what
Speaker 8: this is really about. It's about a border, and it's
Speaker 8: about another product called fentanyl, and that's really what the
Speaker 8: President's interests are here, I suspect, so we have to
Speaker 8: keep in mind what this ultimate negotiation is about.
Speaker 4: I still go back to the original question about incentivizing producers.
Speaker 3: When prices are falling.
Speaker 4: The whole drill, baby, drill construct is you just keep
Speaker 4: producing more. Prices, according to the President, could fall by
Speaker 4: half and then inflation as a whole drops around it.
Speaker 4: But if you're exon, if you're pioneer, if you're marathon,
Speaker 4: how does that work for you.
Speaker 8: Well, you know, demand drives pricing, I mean free markets.
Speaker 8: This is again you know economics one oh one in
Speaker 8: some respect. So that's going to determine the ultimate price
Speaker 8: of oil.
Speaker 3: Even as supplies ballooning under that.
Speaker 8: Even as supplies ballooning. So what's happening is, you know
Speaker 8: what has happened over the last few years is our
Speaker 8: production has gone up, which you would think would reduce
Speaker 8: prices for consumers. You're eliminating a scarcity in the marketplace.
Speaker 8: But if you look at prices for retail products like
Speaker 8: DA solar gasoline, over the course of the last few years,
Speaker 8: i've actually gone up. So why would production go up
Speaker 8: and the prices go up? And the reasoning for that,
Speaker 8: I think is because we've made that production more expensive.
Speaker 8: We've made it harder to drill here, We've made it
Speaker 8: harder through litigation in some cases, through regulation in other cases.
Speaker 8: If the President is correct, what he's going to do
Speaker 8: is to start to reduce some of that, reduce the
Speaker 8: regulatory burden that is now borne by consumers, so you
Speaker 8: can have increased production but also lower prices. That's his goal,
Speaker 8: and I think you can do both in this environment.
Speaker 2: But isn't that they're a factor here that has nothing
Speaker 2: to do with the US, really, and that's Opek when
Speaker 2: we consider ultimately supply and demand dynamics. They've been keeping
Speaker 2: quotas and caps on their production. We've heard the President
Speaker 2: in the last week on multiple occasions say he's going
Speaker 2: to be asking favors of Opek essentially when it comes
Speaker 2: to that production. Do you have any reason to believe
Speaker 2: that they would oblige.
Speaker 3: I can't speak for OPEK, and I don't can the president.
Speaker 8: I think Opek speaks for OPEK, but I do think that. Look,
Speaker 8: Peck's a big player in the marketplace, and as I
Speaker 8: mentioned earlier in the US, in free market economies, demand
Speaker 8: actually sets the price demand in production. Opex a little
Speaker 8: different in that they are a cartel and they can
Speaker 8: snap their fingers and set the price, or they can
Speaker 8: set a production number. They are important players in the marketplace,
Speaker 8: but that being said, they do have to drive their
Speaker 8: own economies and they're heavily dependent upon the price of oil.
Speaker 8: So we'll see what happens over the course of the
Speaker 8: next few weeks.
Speaker 3: How long will it take to feel the impact of
Speaker 3: lifting the ban on LERG exports.
Speaker 8: I think it's going to be fairly immediate. I would
Speaker 8: imagine the US Department of Energy will probably start approving
Speaker 8: some of the pending applications for export authorization very very quickly.
Speaker 8: And I know that there are several projects that were
Speaker 8: somewhat halted by this pause, and I think you'll see
Speaker 8: them speed up construction really quickly. So my expectation would
Speaker 8: be within the next year or two you'll start to
Speaker 8: see again this rise in the exports.
Speaker 3: Of luc building those pipelines in that time.
Speaker 8: Yes, And that's what's really the critical factor here. It's
Speaker 8: getting the product to market. As we just talked about,
Speaker 8: we know how to produce oil here in the United States,
Speaker 8: we know how to produce gas. We can make electrons
Speaker 8: to drive data centers and everything else. Our challenge in
Speaker 8: this country has been getting that product to the actual market,
Speaker 8: putting the electricity to the load through transmission and distribution,
Speaker 8: and getting those gas molecules to the open ocean building pipelines.
Speaker 2: Well, so when we consider it this kind of wider
Speaker 2: energy picture, obviously we all had a bit of a
Speaker 2: reset perhaps or there was a reset in the markets
Speaker 2: on Monday because of deep seek about what kind of
Speaker 2: energy capacity may actually be needed to fuel artificial intelligence,
Speaker 2: whether or not it's less than expected. Have you retooled
Speaker 2: your thinking around that at all? Are you expecting that
Speaker 2: there still is going to be an incredibly pointed increase
Speaker 2: in demand due to all of these data centers and
Speaker 2: the facilitation of this technology.
Speaker 8: Yeah, the demand's coming.
Speaker 3: With or without AI. We are without deep sea Yeah.
Speaker 8: Yeah, with or without deep SEEK, and with or without AI,
Speaker 8: we are short on electrons here in the United States.
Speaker 8: We simply do not generate enough to meet the current demand.
Speaker 8: So as we think about this, the Federal Energy Regulatory Commission,
Speaker 8: for instance, put out a report that I think it's
Speaker 8: twenty thirty maybe it's a little earlier than that. We
Speaker 8: may be about twenty five to thirty gigawatts short on
Speaker 8: electricity today. That's without AI, that's without all of these
Speaker 8: announcements that were just made. If that is true, we
Speaker 8: have to put that in scale. New York City on
Speaker 8: an average day uses about six gigawatts, So we're talking
Speaker 8: about four to five New York City sized grids that
Speaker 8: we have to build between now and twenty thirty five
Speaker 8: years away. That demand is coming, whether we want it
Speaker 8: or not.
Speaker 4: Well, I'm guessing you're not building any new nuke plants
Speaker 4: in that period of time, even if that is a
Speaker 4: long term solution.
Speaker 3: So the answer is gas, right.
Speaker 8: The ANSWER's natural gas.
Speaker 3: That's correct.
Speaker 8: I mean the short run, the answer is going to
Speaker 8: be natural gas. It's going to be all forms of energy,
Speaker 8: to be honest. We need more renewable power, we need
Speaker 8: more natural gas, we need more nuclear we need every
Speaker 8: form of generation that we currently know how to do
Speaker 8: because we need those electrons. But in the long run,
Speaker 8: it's going to be newer technologies, small modular advanced reactors,
Speaker 8: perhaps even fusion energy at some point in our lifetimes.
Speaker 2: Well, and as we consider this whole equation, it's all
Speaker 2: going to be inherited by Chris Wright. Presumably he's pasted
Speaker 2: some hurdles in the Senate. He could be confirmed to
Speaker 2: be the new Secretary of Energy, your old job within
Speaker 2: the day or the days to come. What would your
Speaker 2: advice be to him on navigating the environment we are
Speaker 2: currently And obviously he's very familiar with the energy industry.
Speaker 8: He's very familiar and this is not going to be
Speaker 8: new to him. And that's why I think he's such
Speaker 8: an incredible choice. To be the next secretary of the
Speaker 8: seventeenth US Secretary of Energy. Chris has got a great
Speaker 8: background graduated from MIT. He knows a lot about nuclear power.
Speaker 8: He served on the board with Sam Altman at Oaklow,
Speaker 8: which is a small modular reactor or an advanced reactor
Speaker 8: company based out West. He's also got an incredible history
Speaker 8: in the oil and gas industry as well as how
Speaker 8: many people know this in the wind industry. So he
Speaker 8: knows a lot about energy production and I'm excited about
Speaker 8: his leadership with that department. It's a fantastic place.
Speaker 3: Debria just dropped fusion on us. In our lifetimes? Is
Speaker 3: that in our lifetimes?
Speaker 8: I hope?
Speaker 3: Are you being serious? Or this is blue skytime?
Speaker 8: Then it's a little bit of blue sky, But I
Speaker 8: do happens? I mean, you just think about the possibilities,
Speaker 8: think about the impact of that. You know, we just
Speaker 8: talked about several forms of energy, oil, natural gas, wind production.
Speaker 8: If we can bring the Sun to Earth, and that's
Speaker 8: what fusion energy is. Yeah, we've made all of that obsolete,
Speaker 8: all of it obsolete.
Speaker 3: Can you get that done in the next four years?
Speaker 8: I'll try.
Speaker 3: All right.
Speaker 2: We appreciate you joining us here in our GC studio.
Speaker 2: Dan Briette, the former US Secretary of Energy during the
Speaker 2: first Trump administration, now president and CEO of the Edison
Speaker 2: Electric Institute.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
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Speaker 3: It's a cloudy, foggy, rainy day here at Washington.
Speaker 4: I went back over the Wilson Bridge this morning and
Speaker 4: I could see the boats out in the Potomac as
Speaker 4: they continue a very, very.
Speaker 3: Difficult job trying to find.
Speaker 4: Of people on the American Airlines jet that crashed into
Speaker 4: a black Hawk helicopter just hundreds of feet off the
Speaker 4: ground on final approach two nights ago. We're going to
Speaker 4: talk in a moment with a real expert on this,
Speaker 4: and I'm really glad to say that doctor Allen Deal
Speaker 4: is going to be with us, the former NTSB investigator.
Speaker 4: A lot of us old enough to remember thought of
Speaker 4: the Air Florida crash from the early nineteen eighties when
Speaker 4: this happened in the Potomac Alan Deal was an investigator
Speaker 4: assigned to that crash and is going to be with
Speaker 4: us in just a couple of moments. We do have
Speaker 4: news on the investigation, as you've been hearing on Bloomberg,
Speaker 4: a couple of very important headlines. Number One, the altitude
Speaker 4: of that helicopter, the Blackhawk helicopter, is in question at
Speaker 4: this point, having apparently, and you heard this from the
Speaker 4: President and the Defense Secretary themselves, was likely flying higher
Speaker 4: than it should have been at this point. The UH
Speaker 4: sixty Blackhawk helicopter was using what's known as helicopter Route four.
Speaker 4: And we have another important update here as well. That
Speaker 4: low Altitude Corridor has been closed off now according to
Speaker 4: the FAA, and that is where we start our reporting
Speaker 4: with Bloomberg's Tyler Kendall, who is now on day two
Speaker 4: at Reagan National Airport.
Speaker 9: Tyler, what do you have, well, Joe absolutely critical the
Speaker 9: NTS speed confirming that they have received the so called
Speaker 9: black boxes, the data recording devices from the commercial flight
Speaker 9: That is going to be pivotal in their investigation to
Speaker 9: get that hard data, particularly concerning the speed, the velocity,
Speaker 9: also the elevation of the aircraft at the point of
Speaker 9: the collision. As you mentioned, the elevation really coming to
Speaker 9: focus in this investigation. We know that around DCA there
Speaker 9: is a hard ceiling of about two hundred feet for
Speaker 9: helicopters that are operating in the area. According to flight
Speaker 9: tracking statistics that Bloomberg News is citing, it appears that
Speaker 9: the collision happened at about three hundred and fifty feet,
Speaker 9: so that would be above that ceiling. As you mentioned,
Speaker 9: that is a point that President Trump posted about on
Speaker 9: truth Social earlier today and was originally floated by Defense
Speaker 9: Secretary Pete Heigseth yesterday saying that it appeared to be
Speaker 9: some sort of elevation issue. Now, for the Pentagon's part,
Speaker 9: they say that they are conducting their own investigation into this. Remember,
Speaker 9: the Pentagon says that this was a routine training mission
Speaker 9: and they are not sure at this moment exactly went wrong. Now,
Speaker 9: an Army official brief reporters yesterday saying that these were
Speaker 9: experienced pilots to Joe. Apparently, the lead pilot had about
Speaker 9: one thousand hours of flight training under his belt. That
Speaker 9: is considered to be significant considering that helicopters often aren't
Speaker 9: in the air for too long. Normally about two hours
Speaker 9: at MAX.
Speaker 4: Fascinating, Tyler, I mentioned this corridor that the helicopters have
Speaker 4: been using. It seems the FAA has closed that off. Now,
Speaker 4: what do you know about that? What can you tell
Speaker 4: us anything else about the recovery effort on this second day?
Speaker 9: Right, So that is suspended now indefinitely as the FAA
Speaker 9: works alongside other federal agencies, including the end TSB on
Speaker 9: this investigation. Now, the chief of DC Fire says that
Speaker 9: divers in the Potomac River have accessed all the areas
Speaker 9: accessible to them. That means that we are now moving
Speaker 9: into a second phase of the recovery effort. We are
Speaker 9: expecting divers to start removing courts of the plane today
Speaker 9: in a bid to try to recover additional bodies. As
Speaker 9: we've been reporting here on Bloomberg. Sadly, we are not
Speaker 9: expecting any survivors from this Joe. As we know, there
Speaker 9: were sixty four passengers on that commercial American Airliners aircraft
Speaker 9: and three US service members who are on the US
Speaker 9: Army Blackhawk helicopter.
Speaker 3: Thank you so much, Tyler.
Speaker 4: We'll get back with Tyler Kendall in the second hour
Speaker 4: of Balance of Powers. She continues her reporting from Reagan
Speaker 4: National Airport there in Terminal two with traffic getting back
Speaker 4: to normal. Of course, this day after Doctor Allen Deal,
Speaker 4: as I mentioned, former air safety investigator with the NTSB,
Speaker 4: has actually been there at times like these and the
Speaker 4: daunting task of rebuilding what happened and trying to answer
Speaker 4: so many tough questions with so of course much pressure,
Speaker 4: and in very difficult conditions at this point in an
Speaker 4: icy Potomac River, Doctor Deale, I appreciate your time today.
Speaker 4: I know you've been in high demand these last couple
Speaker 4: of hours, and it's great to have you with us
Speaker 4: here on Bloomberg. I just want to start wide open
Speaker 4: your thoughts right now. So much has been said from
Speaker 4: the investigators yesterday to politicians in Washington. There's a lot
Speaker 4: of armchair quarterbacking going on. What should we be focused
Speaker 4: on at this point in this investigation.
Speaker 6: Yeah, there's an awful lot of investigation to be done.
Speaker 6: As far as I know, they haven't read the Army
Speaker 6: black Box. They have a combined reportedly have a combined
Speaker 6: voice and data recorder on the Blackhawk, and that's probably
Speaker 6: going to be the most critical piece of evidence. If
Speaker 6: the speculation about the l tude deviations and the misidentifying
Speaker 6: for apps of the American Airlines airliner for another airplane
Speaker 6: in the area. All that should be answered by the
Speaker 6: black box aboard the black Hall helicopter. I don't know
Speaker 6: that they actually I think I've read that they have
Speaker 6: that in their possession. I don't think they've read it yet.
Speaker 6: The other issue is going to be whether or not
Speaker 6: they were actually on the so called night vision goggles.
Speaker 6: Those can be difficult to use. I'm not a helicopter pilot.
Speaker 6: I've flown fixed wings out of that airport, and I've
Speaker 6: flown in helicopters with night vision goggles, and they're designed
Speaker 6: for tactical use. You're trying to find enemies that are
Speaker 6: hiding from you, But using them in a urban environment,
Speaker 6: if you will, might not be the best idea. But again,
Speaker 6: this is these are things to be investigated right now.
Speaker 6: All we can do is speculate. I guess about where
Speaker 6: this investorstigation might go. But of course the NTSB is
Speaker 6: going to look at every aspect of the people, the machines,
Speaker 6: and the environment.
Speaker 4: Well, I know there's a lot of speculation going on
Speaker 4: right now, which is not always the friend of the investigator. Uh, doctor,
Speaker 4: can you tell me the process once you get these
Speaker 4: black boxes out of the water, what happens to them?
Speaker 3: How are they treated? And where do they go?
Speaker 6: Well, there's an NTSB lab actually a data recorder and
Speaker 6: voice recorder lab about a mile from the accident site
Speaker 6: in this case, and I believe they'll also be able
Speaker 6: to read the military recorder, which is a much newer
Speaker 6: device than than the American airlines uh uh aircraft had.
Speaker 6: But they they first of all, they download the data.
Speaker 10: Use may uh yeah, and uh.
Speaker 6: Then they when it comes to the voice recorder, they
Speaker 6: of course, you you want people that.
Speaker 10: Knew the deceased to be in the room. Uh.
Speaker 6: There's really not a lot of question as to who's speaking,
Speaker 6: but you want people that knew those people to be present.
Speaker 6: So they'll listen to the voice recorder with people that
Speaker 6: are familiar with the individuals, and that will be that'll
Speaker 6: take some time because they want to get the transcript
Speaker 6: absolutely correct and everybody's got to agree that's actually the
Speaker 6: words that were said. This is why the NTSB takes
Speaker 6: its time releasing this information. The data recorder, of course,
Speaker 6: is all electronic. It's probably going to take days to
Speaker 6: get make sure that it's correct. And of course we've
Speaker 6: got two vehicles here, the helicopter and the airliner. Again,
Speaker 6: a lot of the elbow work in the NTSB lab,
Speaker 6: like I said, which is a mile from the accident site.
Speaker 4: Fascinating if I'm understanding you correctly. Though, the voice recorder,
Speaker 4: knowing that they were about three four hundred feet off
Speaker 4: the ground and this was very very quick in the
Speaker 4: way that it happened, the voice recorder is what's going
Speaker 4: to probably provide more insight than the data.
Speaker 3: Is that fair to say?
Speaker 6: Yeah, what I've said in my books is that the
Speaker 6: data recorder normally tells you what happened. Listening to the
Speaker 6: voice recorder this, you know, even things like the voice
Speaker 6: inflections UH give you a lot of information about what
Speaker 6: might have been going on in the in the heads
Speaker 6: and minds of the of the pilots. I'm an aviation psychologist,
Speaker 6: things like speaking mannerisms, and of course as you as
Speaker 6: we get excited, our voice goes up and pitched. So
Speaker 6: those are the kind of very subtle clues that the
Speaker 6: investigators will be listening to. And of course the other
Speaker 6: thing they'll do, particularly with the helicopter UH, is to
Speaker 6: create an out of cockpit view.
Speaker 10: It's called an ocometric.
Speaker 6: Study, but so you know from each pilot's viewpoint if
Speaker 6: this American airliner was obstructed by structure like the door
Speaker 6: frames and so on. So again, i'll lot of forensic
Speaker 6: work needs to be done, and the NTSB is going
Speaker 6: to be very very careful and very meticulous about examining
Speaker 6: things like this out of cockpit view, voice inflections, and
Speaker 6: of course obviously the electronic data provided by the recorders
Speaker 6: and the radar. So this has all got to be
Speaker 6: correlated and validated before they're going to make any pronouncements.
Speaker 6: So I can speculate, you know, as long as your
Speaker 6: listeners know that this is the only speculation. But the
Speaker 6: process is very arduous and very demanding, and it is
Speaker 6: a team process. The Army will be there, the air
Speaker 6: Traffic controller unions, the pilot unions, everybody works together on this.
Speaker 6: Even though the NTSB is leading the investigation, there's a
Speaker 6: lot of they call them parties to the investigation and
Speaker 6: they all get to review the data and make sure
Speaker 6: it is as advertised.
Speaker 4: Doctor, I've only got about a minute left that I
Speaker 4: want to have to cut you off. But I've never
Speaker 4: talked to an aviation psychologist before. Would wearing night vision
Speaker 4: goggles while flying a Blackhawk helicopter increase the stress load
Speaker 4: on the pilot.
Speaker 10: Particularly in this environment.
Speaker 3: Yes, well that gets right to it.
Speaker 10: Zero field of view and.
Speaker 6: Debt perception is always not always the greatest. So now
Speaker 6: remember that pilot, she's going for her annual check ride,
Speaker 6: which requires her to demonstrate competence in NBG night vision goggles.
Speaker 6: So it may will be that they were forced to
Speaker 6: use those devices to complete her annual check ride.
Speaker 10: I don't know. Of course, the instructor I was more experienced.
Speaker 6: He may have been the one on the radio that
Speaker 6: said we see the American Airline. All of that's got
Speaker 6: to be correlated. Yes, NBGS our challenge, Thank.
Speaker 4: Thank you doctor you got to come back Alan deal
Speaker 4: former NTSB. We bring it right to the source here
Speaker 4: on Balance of Power. Thanks for listening to the Balance
Speaker 4: of Power podcast. Make sure to subscribe if you haven't already,
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Speaker 4: at Noontimeeastern at Bloomberg dot com.