A warm welcome back to Decouple. Today I'm joined by Robert Bryce, who has a long and illustrious resume here but I'll just go through a little bit of it and then get him to do it he does to his guests the famous self introduction, which we've ripped off here at Decouple. So Robert is, of course, the host of the power hungry podcast. I think we have a lot of overlap in terms of our listenership, author of six books, most recently question of power, electricity in the Wealth of Nations documentary filmmaker, I guess I'm not sure if you're the producer, director, or just the star of juice, how electricity explains the world. And lastly, Robert, your generous mentor to myself and many other I think young and up and coming. People getting interested in questions around energy. So a warm welcome. Thank you for coming on.
Always happy to be with you, Chris.
You know, I've gotten a lot of your kudos out of the way your bone a few days. Give us a little more about yourself, Robert, for those listeners that missed your your earlier episode.
Sure, happy to do so. Well, first glad to be back on the on Decouple with you, you know, I've been pleased to see how successful you've been and the push you're making in Canada. My name is Robert Bryce, on live in Austin, Texas. First things first, happily married. The same woman, Lauren, and I've been married now 36 years. This year, we have three great kids, Mary, Michael, and Jacob. And they're all thriving and healthy and out of the house, which is a wonderful thing. The Empty Nest is a beautiful thing. Let me just say that as a proud father. I've written six books, I am a writer, I'm a producer and podcaster. And I count myself lucky to be able to read write and speak about the energy and power systems energy and power networks, because these are the world's biggest and most important industries and every other industry in the world depends on them and deeply concerned about the direction that both we're going here in the US and Canada and around the world where we have a lot of bad policy. And so there's plenty to plenty to write and talk about.
Robert everage, introduce yourself a few times. And I like that you all start with the most important things first, family man and father. So I brought you on today to talk about, you know, big buzz going on in the US. I've been very busy up here in Canada and not paying as much attention as I'd like to to the so called inflation Reduction Act. And I know you've been writing about it, thinking about it deeply and so excited to bring you on to to get your sense of it. It's you know, it's being hyped, as you know, one of the greatest pieces of climate legislation to date. And there's a kind of bizarre consensus, I guess you've written about this, but Exxon Mobil and NRDC both endorsing this. Why don't you give us a broad strokes overview of of the bill, and you know, what's going on? Well, I think
the first thing, Chris is just how the parliamentary process here in the United States and how it's being perverted in this the rush to pass this legislation, or the Democrats, there's a 5050 deadlock between the Republicans in this and the Democrats in the Senate. And so they're using a parliamentary measure called reconciliation to force this measure through and then they're Kamala Harris is casting the deciding vote as the vice president and president of the Senate. So, yes, the hype around it is remarkable in that it's this these claims that this is the most far reaching climate bill ever in the United States. And that this, I just finished writing a piece that Paul Krugman in the New York Times was taught, what did he call it? The I think the headline was, did Democrats just save civilization? I mean, you know, so the hype is just, it's, it's, it's truly been extraordinary. But it's, yeah, here it is, did the Democrats just save civilization, expert on energy and environment are giddy over what has been accomplished, and the world is a more hopeful place than it was just a few weeks ago and on and on? You know, this is part and parcel of this kind of the spin that's being put around this bill. But the thing that to meet with the big picture, to me, that's the one of the key takeaways is that the US is pushing a lot of these these measures inside this $370 billion energy package, which is also contains prescription drugs and some Medicare reforms and some other things $700 billion or so and spending, but it's being rushed through in this reconciliation process. And none of the key elements in the bill are being debated. I mean, and this is the punch line to in terms of the kind of where's the money going 370 billion energy and climate related spending. By my calculations. Now, I've been looking at the Congressional Budget Office report I was told you before he started, I was looking at it last night. There's 69 different provisions in this bill 69 different line items hydrogen CCS, you know climate justice EVs lalala. But $127 billion is being will is going to be given to the wind and solar sectors which to me is just you insane because of what is we see happening in Europe and in Australia and in Britain. You know, in California, this excessive subsidization of wind and solar are distorting electricity markets, and they're hurting consumers. And this is just more of the same, and yet it's being played, you know, played as this great break through it. To me. It's just another example, unfortunately, of the swamp and how the NGO industrial corporate congressional media complex is pushing through what I think is just bad policy.
Is there. Is there any merit to going through some of the background on this? I mean, there was the build back better bill, there's this figure, Senator Manchin, which Americans in the audience will be well aware of, but our international listeners may not. Is that is that a story worth exploring at all?
Well, sure. So Joe Manchin is Senator Joe Manchin, from West Virginia as a Democrat, and he has been the key vote in a lot of the negotiations. And about three or four weeks ago, he that he broke off negotiations with the Senate Majority Leader, Chuck Schumer and said, No, this isn't going to work for me. And so there was I mean, he was pilloried in the press and you know, called, uh, you know, that this is, you know, you've single handedly doomed humanity and all this other hyperbole. Well, then, a couple of weeks pass had mentioned changes his mind. And so suddenly the bill is back in play, and then everything moves forward, and it gets passed through the Senate. That mansion is interesting for a lot of reasons in that, you know, he's from West Virginia, which is a conservative state, and it's a key swing state, and it's been a Republican state. And Trump did well there because he came out in favor of coal, West Virginia. So low income state, heavily hydrocarbon dependent dependent coal and natural gas in particular, and so mentioned, is trying to thread the needle here, I think. But I think, in addition, that he was under extraordinary pressure from the Democrats to get in line, and he did, and so they are able to push the bill hasn't become law yet, and it hasn't passed the House or signed into law by the President. But right now, it looks like it's going to become law. And as I said, it's just more massive subsidies. As I mentioned, the 120 $7 billion figure, if you add that on top of the existing subsidies for wind and solar, the total federal handouts for wind and solar could could more than double and will total nearly $240 billion by 2031. In a decade, they're going to get a quarter trillion dollars.
So you know, you've talked about this hyperpolarization, which I think is nothing new, this 5050 split in the Senate. But we are seeing you again, these bizarre consensus is between folks like Exxon Mobil and the NRDC, you know, it sounds like there's a little something for everybody, as you're mentioning, you know, the hydro folks, carbon capture folks, obviously, the wind and solar folks, you know, I have seen groups like the good energy collective X energy TerraPower also endorsing this bill, what's in there for nuclear?
Well, there is, there's $30 billion in, in zero emission, the production credit for nuclear, so that if I were gonna say, there's something good in this bill, that would be the one line item that I think is good, but, you know, I'm like you, Chris, I've become kind of really pretty much a nuclear absolutist, that if we're serious about any of this, we have to go all in on nuclear, just full stop and wasting and giving these, you know, essentially just more pork barrel spending to solar and wind it when they're already getting over $100 billion between now and 2031. And giving them yet more. And in some, and by some analyses, subsidies for these, these tax credits for solar and wind could be permanent in that they will stay in place until US emissions from the electric sector go or 75% below 2005 levels. I mean, it's an extraordinarily high hurdle. So there are a few provisions that I think are good, but I think overall, this is just I mean, it's just more pork barrel spending. And it's being, you know, cloaked in this climate saving kind of rhetoric that it's just it's none of that is true. I mean, it the other backdrop, and the point that I was going to make earlier is it's just so remarkable to me to see this kind of hype and hyperbole around this bill, when Europe is rushing back to coal as quickly as they possibly can. And so are the Chinese and so are the Indians and coal demand is going to set another record this year, it's going to set another record next year. I mean, it's just a truly, I don't know what the right word is the disconnect between the reality and the rhetoric.
Yeah, I mean, the failure to learn lessons, I think, is, is pretty astounding here. Or even
just paying attention to or just paying attention to Current Affairs. I mean, you know, what is happening? What's happening today, let's look around and say just take stock of where the world is today. And then say, Well, how should we be reacting to this and instead of, you know, making of what I think would be much more rational decisions around the future of decarbonisation, which you and I will know cannot happen without large scale nuclear. It's just more of the same, you know, the the entrenched lobbies are getting yet more favors and that that to me is deeply depressing. Well, deeply discouraging. I won't say depressing,
getting back to the stated purpose of the bill, the inflation Reduction Act. I mean, there's obviously a few drivers of inflation, we've had record COVID spending, you know, it's a bit of an energy determinist or absolute as myself, you know, the rising price of energy, you know, as it's been referred to by a number of people, the secret ingredient, everything is certainly driving up prices quite a bit. You know, what do you see as as the major drivers of inflation, and this bill's promise here is inflation reduction?
Well, let me let me let me just and let me just just one other quick point here, Chris, because I want to talk about the inflation part, because I think it's important. But the other part of the spin on this bill has been in the democratic, the Democrats press release said, Well, this will allow the US to reduce its emissions by 40%. By 2030 40% reduction in greenhouse gas emissions, well, it's just not going to happen. And yet, this was dutifully reported by the New York Times that this puts us on to the US on track. Well, it would require cutting 1.2 billion tons of co2 out of the US admission stack and do it in seven and a half years, that's nearly equal to all of the emission, it's equal to more than half of the emissions attributable to oil consumption in the United States. I mean, it's almost equal to all industrial emissions in the United States. I mean, this is just a massive reduction. And yet the spin around this has been a while everyone just says, oh, you know, we use damn calculator. I mean, this is clearly not going to happen. And yet, this is just kind of the accepted wisdom, and repeated without any context or any any skepticism by the New York Times, I just find it unconscionable the way the media has been reporting this. Okay, so I had to get that other way. But the inflation issue, I mean, this is your this is a global issue. And you and I, you know, we attract coal prices, I'm trading economics.com. Right? Cold today in the New Castle marker is at $370 a tonne? Well, at the beginning of 2020 was $50. So we everybody's focused on oil prices. Yes, they've gone up, you know, the so they were around 30. And now Brent is trading at what 90 or 100. So that's a tripling gas was at you know what, $2 at Henry Hub, and now it's at eight. So that's a quadrupling? Well, the coal prices have quintupled. I mean, so, you know, where's the coverage of that. And so these, these, the energy costs reverberate throughout the entire economy, but then you have the other supply chain issues, and particularly around food, and this is going to be a very big issue. And you and I both interviewed Doomberg. I mean, that's very worrisome, because and that is directly related to the energy inputs. So we're seeing inflation across the board due to excessive government spending due to supply chain issues due to shortages of energy due or insufficient supplies of energy would during times of high demand. So all these things are working together, and they're going to have a big and negative impact on low and middle income consumers in low and middle income countries.
You know, no economist, but I've also heard that trade imbalances, you know, fueling inflation as well. And, you know, the dominant subsidies are going to the wind and solar industry, which, you know, whose whose supply chains and production is predominantly overseas. I mean, I guess I am wondering, to sort of try and steal man this, do you have an objection to subsidizing certain sectors of the of the power generation? Sector? If the subsidies were going more towards nuclear? Is that something that you would end up supporting? You know, especially if that supply chain was local? So it's not an opposition to government intervention in this manner?
No, no. And I think in the US, as you and I have talked about, and we've, you know, had many guests and Mark Nelson in common and others that you know, what the electricity sector is not like the other parts of the energy business. This is a critically important network, and that cannot be allowed to fail. So we need robust government involvement and oversight to assure that the system works, and that it's low cost, because it's the basis of everything. So as you know, nuclear energy does not thrive, when just simply left to the market, it needs strong governmental support, both in the regulatory part of it and the handling the waste and the fuels in the in the supply chains. So, therein lies the conundrum, right? Well, you have to have strong governments to have strong nuclear entities, right. And so that's one of our big challenges. And I say our invoking the people we hear, but I'm not. There is a very important role for government when it comes to electricity and managing the network and that cannot be replaced by the private sector. We've seen that over and over again, here in Texas in California. You leave this market to the capital So they are going to plunder the consumer. That's just the way it works.
I mean, yeah, nuclear is often sort of pilloried as as requiring that government support but, you know, wind and solar are being talked about, you know, as historically cheap. One wonders, you know why they still require such subsidy? Can you talk a little bit about, you know, the history of the production tax credit, understand, it's, you know, was meant to expire many, many times over. Warren Buffett's famously said, you know, we get a tax credit, if we build a lot of wind farms, that's the only reason to build them. They don't make sense without the tax credit. Tell us a little bit more. You know, you've written about this for God, I think over a decade. So listen,
yeah, well, sure. So the production tax credit is the tax federal tax credit that has been given to the wind industry, it's been extended 13 times, and expired at the beginning of this year, and is about to well, and then if mentioned, Schumer passes, then it will be renewed and extended for the 14th time and potentially making it making it permanent. But it was always viewed as this temporary subsidy in order to get this nascent industry off the ground. And the same with solar. But now we're told over and over again, that, Oh, well, wind and solar are cheaper, and therefore, you know, they're going to dominate in the market will if they're cheaper than Damn, well prove it. You don't need my federal tax dollars to make your business work. And so what we've seen is that this migration, or this evolution of these tax credits go from, well, this was a startup thing, and now, it's the favored tax avoidance strategy being used by some of the biggest corporations in America MidAmerican Energy, a subsidiary of Berkshire Hathaway, you mentioned before Warren Buffett as the CEO of Berkshire. In 2014. He said the only reason to build wind turbines is to get the tax credits. Without them, they don't make any sense. And so you see in Iowa, Mid American energy, pushing wind and solar and even suing counties like Madison County, Iowa to force the county to take wind turbines they don't want. So the whole system the whole way these tax credits have evolved, has become totally perverted and answered the they're fueling what I believe is this big businesses assault on rural America. to it, Ben, there is an assault in which there are some cases suing to force these communities to take these projects they don't want, because they are being motivated to get yet more and more tax credits. One more point NextEra Energy, the world's biggest producer of renewable energy, formerly known as Florida Power, and light has over $4 billion in tax credit carryforwards on their financial statements. This is a 200, nearly a $200 billion market cap company, they won't be paying any corporate income taxes for years to come. Because they have been so effective at subsidy mining, and using this cloak of climate change in order to garner all these tax credits to build wind and solar. It's just a truly remarkable story.
Could you get any more cynical, Robert?
You know, I don't think it's even cynicism. Chris. I just think it's like, I've been a reporter my whole career, I've never had a real job. And I, you know, I think I'm getting I'm starting to get where I kind of understand things, right. It's like, I'm not an idiot anymore, right? You know, when you start out as a reporter, you look back and you think, Well, I don't know anything. And but now having watched this industry and being more familiar with business, and my first book was on Enron 20 years ago, and understanding how to read financial statements. I'm just trying to be as clear eyed as I can about this. And what we're seeing is that climate tourism and corporatism have merged. And it's been, it's been incredibly profitable for a very few entities. But that profit is being extracted both from rural communities that don't want these massive projects and from the federal, from the Federal taxpayer as well.
So I saw a great piece, I think you did a guest contribution to grid brief actually, just today. That's Emmet Penney. So yeah, it really excellent daily as your
friend, Emmet Penney, who I always get a kick out, I think he's, he's a remarkable Well, I'm gonna say, kid, that's not the diminutive. I don't mean it that way. But I just think that he's doing doing a remarkable, remarkable job. And he asked me to write that piece. And that was sure you know, happy to
do. So. I mean, just everyone who's listening, you got to go and subscribe to that. It's a daily newsletter. Really, if you want to keep your fingers on the pulse of energy, it's a great way to do so. Nice little short tidbits. But you did a piece on Generac, which is a generator and a home generator company, I guess, maybe talk about that in the broader context of the state of of the US grid right now.
The piece that I wrote for grid brief was called what's good for Generac is bad for America. And I do a fair amount of public speaking and so I create a you know, I used to not use PowerPoint, and now I use it because I realized you talking about numbers and systems, you need visual information to help the bring the audience along. So I've used this slide many times. And I just thought, Well, hell, I can write you know, four or 500 words just on this slide and this and that's the that's the message what's good for Generac is bad for America. Generac is a publicly traded company. They're based in Wisconsin. They are the they provide about three quarters of all the home standby generators in America. And their business, excuse me is just booming in since 2019, their revenues have doubled. Their stock price has quintupled. Because home because homeowners all across America are buying home standby generators, because they're looking at the grid and experiencing more blackouts. So they're spending 1020 30 $40,000 to get generators hooked up to their homes. Friend of mine in Houston, she had a system was $12,000. Last, I would think I spoke to her in January, she said she wasn't expecting to get delivery for a year. And she's spending 12 grand I mean, you know, this is just indicative of how it you know, Texas and where does Generac see their most, you know, their biggest opportunities, Texas and California? Well, hello, yeah, of course,
when you have such an unstable grid, you know, where people are voting with their feet to, you know, not quite defect, but certainly to have an insurance policy? And do you have any sense of you know, what that total spending is, I mean, for that, that stock price to have gone through the roof, be interesting to know what their sales are, and what that would look like if it was actually invested in in a, in a more intelligent manner into a actual functional collective grid or, you know, civilizational life support structure, as they call it.
And that's the critical point is that consumers wouldn't be, I'm not gonna say they're wasting their money they're spending, they're investing it in their infrastructure in their home. But they wouldn't be doing that if the grid were as robust and reliable as it should be. Right. And, and, you know, you looking at Gen X on investor presentations, they're saying we see a very fertile market here for years to come, because our penetration rates are so low relative to now, you know, compared to what they could be. But they had sold last year, just in terms of, well, what are the numbers? This year, they're projecting revenue of over $5 billion, right, which is double what it was just three, just three years ago. So they're doing a land office business. I mean, but I think this is part of what is Nigeria vacation. We're seeing this all around the world. And, you know, Europe is going to I think going to see some of this is there blackouts there that people are going to get their own small generators, and they're going to run them on liquid hydrocarbons or natural gas, I think it's going to be more likely it's going to be diesel, gasoline fuel oil. For the smaller Jim sets, you know, of, you know, I've got a six kilowatt system, you know, a standby generator, it's not connected to my house. But you know, those kinds of generators are going to be there. They're proliferating all over the world, but particularly in California, something like 10,000 new permits a year in the bay area alone. So this is a booming business, because all around the world grids are faltering, because of lack of investment, and also because of high cost hydrocarbons.
Do you see an end to this insight? I mean, one would think you wouldn't have to look further than than Europe right now, to understand the error of our ways. You know, we've both had Meredith Angwin on several times, the fatal Trifecta kind of grid, maybe define what that is really quickly. For our listeners. And me, do you see some rationality coming back at some point are the kind of path dependencies too great, the patronage relationships too strong?
Well, I'll make one other quick point about hydrocarbon pricing. There was a Raymond James is investing investment bank here in the US, it recently put out a report on the cost of hydrocarbons, and pointed out that on a per million Btus basis, or per joule basis, that oil is actually now getting close to or even cheaper than natural gas delivered into the European market. So you have gas on the TTF marker, which is the Dutch trading hub. Here in the US, we'd price it at Henry Hub generally, but the TTF hub where it's selling for six or seven times what it is in the US. So at 50 or $60 per million Btus. That's what three or $400 a barrel of oil equivalent. So the point that Raymond James was making was that consumers are going to some of them are going to switch back to oil to produce power, which is something we haven't seen at scale globally since the 1973. Oil Embargo. You know, after that first oil shock, there was a massive move away from oil for power generation, that time the US was producing almost 20% of its electricity from oil. Well, then the shot price shot up and then we said well, no Carter came in well, let's build more coal plants because he didn't want to that oil dependency, but I just wanted to make that quick point. But as far as you know, what gets this gets us back on track. Chris, I think we're in for a couple a few hard years. I think globally I'm you know, I'm not an economist, but I'm really paying attention to it like you I'm doing a lot of reporting talking to people what do you see what's happening? These these disruptions that because partly because of the Russian invasion of Ukraine, partly because of now Nancy Pelosi is I think foolish move to go to Taiwan. Now, why are you doing this now, you know that China is potentially going to, you know, we face potential conflict in around Taiwan, you know, we're just in some really perilous times. And to get the supply chains back in order to either we're going to have to repress demand, suppress demand through an economic slowdown, or we're going to have to, you know, just work out these problems, and or we're gonna have to work out these problems over the years, because it took us years to get in the ditch, it's going to take us a long time to get out. Yeah, I
mean, on the Taiwan front, we had Angelica Wong on God, it must have been a year ago now. And that was in the context of, you know, this losing referendum to restart. Like, she just, I think get started a reactor that's been sitting idle, I think it's never been fueled. But she was talking about, you know, China has no need to invade Taiwan, with the dependence on imported fossil fuels and LNG, you know, a simple kind of energy blockade would be enough to sort of bring Taiwan to its knees it was, was interesting on that front. But it's funny how energy kind of underlies will obviously write so much of geopolitics, and so much of what we're facing right now. Yeah, well,
but I mean, if they did a bit of blockades and act of war, so you know, that that, you know, you could say Justin energy? Well, what else is there? But yeah, any kind of blockade like that would be is an act of war? And then is the US gonna get pulled into that? Man? I mean, it's a scary situation.
I mean, I thought it would have been a much better play for Putin to, you know, not launch a war of aggression. But if he really wanted to put pressure on NATO countries, particularly Europe, simply to do what what he's doing now with pipeline politics, you know, I'm not sure that the invasion was was necessary in terms of that enormous lever that he held over over Europe. And maybe maybe China's learned from, you know, some of the difficulty that Russia has had in Ukraine, who knows? Who knows? I'm speculating.
Yeah, I don't know. But I mean, you know, Russia's hold over Europe is right now is it's not, I don't want to overstate it, but it is near total, I mean, you know, in that their ability to, oh, we're going to turn the gas on, we're going to turn the gas off, oh, you want a little more, okay. Well, beg are saying nicely, or, you know, please or, you know, whatever it is, and then Putin can make as much money off of diminished flows of hydrocarbons as he was after supplying it in in full and full volume. So, you know, Putin is still I think, I think the thing was, it's disastrous move for him over the long term. But he still has a lot of cards to play. And a nice Alhaji, a friend of mine was on the podcast on the power hungry podcast a couple of weeks ago, and he was just saying, Putin are going to starve Europe as much as he can, and then, you know, try and force them to come to some accommodation, because it could be a very hard winter for several European countries.
Shifting back to renewables, certainly, I think, you know, they're as a producer with very low marginal costs. They're also benefiting from high prices, the projects that have been built, and are also harvesting subsidies and other forms of kind of rentier capitalism that you've outlined. But in terms of, you know, new projects, and I mean, the US is going to be embarking on a lot of new projects with these production tax credit subsidies. You know, we've seen skyrocketing prices in terms of some of the, you know, basic commodities that are used to build wind and solar. And, you know, I think that's led to European Wind companies now moving to China, where they can source labor and commodities, much cheaper polysilicon prices rising by 300%, earlier this year. I mean, yeah, I mean, how do you view that, and I'm interested in the sort of, again, this sort of trade deficit side of this, and the inflation bit of the puzzle, with with so much of the supply chain being overseas, you know, the impact on the US economy of further basing its its energy future and intermittent renewables?
Well, you make a key point here, and the I don't know that you said China, but it is all about the Chinese. Well, you did say China, but it is all about Chinese supply chains. And now, just in the last few days, you've seen the Chinese government tell John Kerry, you know, we're not so interested in your climate discussions anymore Buzz off. I mean, I think they said it somewhat differently in diplomatic language. But that was it right, that we're suspending any discussions about climate change? This is not our first priority. But when you look at polysilicon you mentioned which is the key ingredient, and of course, of course in solar panels, 70% something like that comes from the, from the PRC, and of that something about half of that comes from the shinjang province where the Chinese government, according to the US government is committing genocide against the Uyghur Muslim minority, and using that same Uighur Muslim minority as slave labor to produce solar panels. Well, so my question of course, will how much? How much solar, how much slave labor can you have in your solar panels and still call at clean energy, I think the answer is zero. But the again, this isn't none of this is being discussed in the mansion, Schumer bill, this is like the entirety of the renewable industry doesn't want to talk about this. But it's not just the poly silicon Chris, remember this is goes on to neodymium iron boron magnets. So China has a stranglehold, I would say that's the right word. When it comes to the processing of rare earth elements, neodymium praseodymium, Dysprosium. atrium, these all these other lanthanides on the on the periodic table, are absolutely essential for electric vehicles for wind turbines. And this is the other part of this entire discussion that's not being, you know, not getting the kind of recognition that it deserves. The mentioned Schumer bill attempts to make some headway on this, but I think it's going to be incremental in that it's going to take a very long time. And I do mean years or even decades for the US to ramp up if it can mining, processing and fabric and sintering of the these mag the mining and refining of the elements that are needed, but also turning them into usable products, including the permanent magnets needed for EVs and wind turbines.
What's the state of I believe there was tariffs or a ban or an attempt to, you know, by the US to respond to the slave labor within the solar supply chain. I've heard some some rumblings I haven't again, been paying attention as much as they should to what's happening in the US. But what's what's the state of those measures?
Yeah, that was those tariffs were were put in place last year, if memory serves, and it was because the the domestic solar business in the US was looking abroad and saying, well, the Chinese are dumping their solar panels and routing them through other South South Asia countries in order to circumvent some of these trade laws. And so there were tariffs were put on Vietnam solar panels from several countries, including Vietnam, and I think Thailand, and then suddenly those you know, just those were all done away with the Biden administration said, Oh, nevermind, we were okay. Effectively with China dumping solar panels into the, into the US market. So, you know, all of these things. What worries me most about the Biden administration now, Chris, and I say, this is a nonpartisan, I'm not a Republican, I'm not a Democrat, I'm disgusted. But I don't see any kind of rationality or any kind of sensibility about what their goals are. Right, as a friend of mine said, they have a lot of tactics, but no strategy, you know, and so it's just that you see it in the mansion, Schumer Bill 69 different line items that give a lollipop to every special interest, every energy related special interest in in, in the energy business got some little favor in that bill.
I mean, I think the US has as a pattern of sort of selective interest in human rights within within certain countries of geopolitical interest. But it certainly is interesting, seeing that hand weakened, you know, the Khashoggi murder, resulting in some real revulsion internationally, and the US putting some pressure on Saudi Arabia, now begging Saudi Arabia to
murder, murder and dismemberment number just murder and dismemberment.
Anyway, I think the US is certainly losing its influence and its ability to, you know, leverage human rights issues, again, selectively, but but on those countries because of that, you know, something that, again, Emmet Penney talked about recently, and being, you know, pretty cynical myself, particularly around politics and seeing a lot of the special interest driving it. And I think the bill illustrates that quite well. But he said, you know, the reason for a current energy mix that that fatal trifecta that Meredith Angwin mentioned, so, so eloquently, the overland renewables, just in time, natural gas and dependence on on imports, Emmet talked about the patronage relationships responsible for that. And he said, you know, the renewables industry has an excellent patronage relationship with the Democratic Party. The gas industry, good patronage relationship with the Republicans and wind and solar plus gas also have an excellent patronage relationship amongst themselves. I mean, it seems like something's got to change, there has to be a new, special interest that arises. Otherwise, these ones are going to going to dominate and really, really steer steer policy. And you know, from your own writing, it's become pretty clear what kind of NTA arrangement we have here. So maybe speak about those special interests and in terms of the kind of backroom politics, if you see any kind of mechanism for restoring some sanity here.
Yes. I'm hopeful I am. But I am also very cognizant of the power of these lobbies, and the the these are some of the biggest corporations, not just in the United States, but in the world who want to make sure that these tax credits continued to flow. Right. And there has been this kind of handholding relationship between the renewable business and the gas industry and the gas industry, even marketing itself saying we're the perfect complement to renewables. Right. And so they're, you know, how to even discuss it, I think is the is the difficult part, because I'm not a Washington insider, but I can read the language in the bill and the CBO report to see, well, how is it that all of this, how is it manifesting itself, in the actual line items in the legislation and the line items that are showing up in the things that the Congressional Budget Office are saying are going to cost taxpayers money, and that's the proof in the pudding is that these industries, these these, this, this professional lobby, the the, as I say, the the NGO, corporate industrial congressional media complex, are incredibly powerful, and they have the art the ears of policymakers and their policymakers, staff, and that they are able to then engineer these pieces, you know, like, we just one little taste, you know, we just one little taste just for us, because it's for the good of the country. And that's always, and it's for the good of the climate, but we just need a little taste. And dude, you know, it's gonna be good for everybody. And that's what we've, that's what's happened. And, but I will say, let me just add this. I'm not sound like a homer here. And I know you're a Canadian, but for all of these problems, I think I still think the US is incredibly enviable position visa vie the rest of the world. Because and you talked about currencies, or we mentioned it briefly, look around the world, which currencies are the strongest now? Well, the dollar and the ruble, which to me are indicative of Well, where are the countries that are producing hydrocarbons that are producing energy that you can sell? Well, the US and Russia, right, and the pound is now near Earth? I mean, the Euro is now nearing parity with the dollar. I mean, you know, the British pound is sinking. I mean, all of these currencies are falling, because they're having to buy energy and dollars. And it's indicating, I think, you know, just where the power is, and in the world, and that power comes from those molecules that you can you can use directly or you can turn into electrons.
Yeah. I mean, getting back to the special interests, when one can see the appeal of, you know, populist politicians talking about draining the swamp, but again, I just have such a hard time seeing a mechanism for for change to occur here.
Yeah, I agree. But I'm, you know, I'm optimistic as Molly, Ivan said, optimistic to the point of idiocy, you know, Peter Zions new book, and I've been working through it, I've listened to see him on several podcasts. He's an American God, geopolitical guy. And he comes to the same point, you know, that there, he's his book, because his new book is called the end of the world is just the beginning. And he talks about demographics and all the problems that are facing Europe and China. And you know, but he goes around the world and says, Well, compared to the rest of them us is in a pretty good position because of favourable demographics, because we don't have any enemies at or near our shores. Although I kind of get worried about you Canadians, you get pretty rowdy. But the US comparatively due to demographics, etc, is still in a pretty good position.
Right, and also being a massive energy powerhouse now.
Right, a massive energy producer. Yeah.
In terms of, you know, getting back to the bill once more, and the kind of polarized response to it the 5050 vote with the Vice President casting the deciding vote, what are what are Republican objections? And do you feel that they're, they're sensible, are grounded in a better understanding of the energy crisis that we're in? Where is it just simply, you know, opposing the Democrats? And
I think a lot of it, I think it's a lot of the latter you that they want to, they don't want to give Biden any kind of a win right now, especially with the midterm elections coming up in November. So they don't want to give the Democrats anything to crow about right. And so that's certainly part of it. But I think there is also substantive objections to this. And in talking with some people I know in Washington, the the parliamentary problems the way this is being pushed through, I think is just bad for our, for our democratic process. Because when you think about it, what are the you know, we've talked already about the fragility of our electric grid. Well, where's why hasn't there been a hearing on with the effect that these massive subsidies for solar and wind will have on the fragility of the grid, we're already seeing the grid being Fragilize because of this push for more wind and solar, we're already seeing the affordability problems due to this influx of wind and solar, but yet there's no discussion of this and so that to me, is just bad policymaking bad government. And that part of it to me bothers me deeply because we're supposed to have a process and instead of a process now we're getting this jam through thing like well, you don't like it well, you know, sorry, Up yours. We're going to make it happen. We don't care what you think. And that's, that's dangerous.
Yeah, I think perhaps, you know, the kind of turning point will be more of these more of these blackout events. I mean, you suffered through the Texas blackout, California is getting plagued with, I guess more mini blackouts there. You know, the miso or miso, I forget how it's pronounced for casting some real difficulties. And, you know, what's, what's interesting is even Gavin Newsom, the, you know, pretty famously Anti-nuclear Governor of California, I think he had an op ed in the LA Times, basically trying to seed public opinion for the arguments as to why to save Diablo Canyon, I can't help seeing that, as you know, if this guy's got presidential ambitions if he leaves California as a total disaster, with with blackouts, that's not going to do well for him politically. Right. So I mean, yeah, I guess talk about maybe some of your own experience going through the blackouts, you know, Texas's response to that, you know, it's much easier to save a nuclear plant to get grid stability, or to maintain it, you know, by the threads that it's hanging in California than it is to build new nuclear. But in terms of the Texan response and responses more broadly, you know, what is Texas investing in after after the blackout experience? Have they learned their lesson at all?
Well, let me just make one quick comment on Gavin Newsom, if you don't mind on the nuclear part of this, there are one of the other reasons that I'm optimistic is not only are some American companies like new scale, just got approval from the Nuclear Regulatory Commission here in the US for their design for a light water reactor. So that's a very positive move now, whether new scale will be there, and their design was 50 megawatts electric, I think, or 70 megawatts electric. And their plan is to build multiples as small modular reactors in one place. But they've had a devil of a time getting through the regulatory process over a decade and approximately a billion dollars. But now there's appears that they're through it and that they can move to commercial deployment, which is very positive. So there are some positive noises on nuclear in the US that I think are worth noting. And the US could help lead this worldwide Renaissance I think and nuclear. But as to Newsom, yes, I mean, I think it's already clear he's throwing his hat in the in the in the ring for running for president for 2024. And why wouldn't he you know, California has the most electoral college votes of any state in the country. He's incredibly handsome. I saw him once in person, I thought, Pam, you're beautiful. I mean, I looked at him. I thought, Am I gay? I mean, I think no, I mean, it was just like, he's like, right, I mean, he's, you know, movie star handsome, right. And I don't think he has any particular political bent except to, you know, promote Gavin Newsom, but his but his about face or his some, you know, somewhat tepid support for keeping Diablo Canyon open is telling. But I think it's also practical politics, he's looking at the California grid and saying, and seeing how fragile it is, and recognizing, oh, if we unplug, the One Power plant that's providing roughly 10% of the electricity in a state that already is having, you know, is in the grid is in meltdown, maybe that's not such a good idea. So maybe this is just that some rationality is creeping in despite decades of democratic anti nuclear dogma.
Right. And more specifically, again, in regards to Texas, what has been the response to those to those blackouts in terms of future electricity planning?
Good, thanks for your, you know, getting on the sidetracks here, you got to keep me focused here. Keefer,
my questions are always horribly conflated and all mixing about five into them. So it's not your fault. But Texas
is interesting in that, you know, I'm from Oklahoma, so I'm not bragging on Texas. And, um, you know, but I've lived here now 37 years, and the grid here has been is being overwhelmed by Weather-dependent renewables, and it's pricing out the thermal generators. Now. I will say, you know, despite all the warnings, we haven't had blackouts yet this summer. And we've come close a couple of times. But we're not building dispatchable generation and the, you know, the and further, the grid has become far too reliant on gas. And because it's reliant on gas, and when not gas prices are going up, prices are going up. And we're seeing that not just in Texas, but of course, in California or in New York, all across the country. Because the gas and electric sectors, the gas and electric grids have merged, but they're still they're still regulated separately. So that that point is is one of the reasons why Meredith, Meredith, this fatal trifecta is so important. This Just In Time, delivery of gas is a strategic vulnerability in the system. So but But back to ERCOT. In Texas, you know, the managers, the Public Utility Commission, they're doing what they can to try and promulgate new rules that are going to make the grid more stable incent new investment, but they cannot stop all this federal subsidies, the federal subsidies that are that are leading developers to only build more wind and solar because that's where the money is.
Just Just briefly because it's of interest to me, you know, with the Henry Hub price quadrupling in the last two years, you know, this, this this price of gas with Ontario, you know, not having a fracking industry and being a major importer now from the US and the impacts it's going to have on our electricity planning, you know, the impacts on replacing a 3.1 Mega, three 3.1 gigawatt nuclear complex at Pickering with gas. I'm just, I'm trying to answer that question. You know, and I know forecasting is notoriously difficult, but where do you see natural gas prices, settling in the States over the next decade say?
Well, now, if I knew the answer to that, Chris, I don't the Decouple podcast I don't your house, I don't most of your block. I don't half of Toronto. But I think the you know, the without being cute, I think what is the IS is already clear is that because the US has become a major LNG exporter that US gas prices are rising toward the global marker, right. And there is I'm saying there's a global there really isn't a global marker. But there are a couple of markers. One is the TTF trading hub in Holland, which is on onshore, but the jKm marker with JK Japan Korea marker for LNG into the Asian market, so the more gas gets exported out of the US, the higher the domestic price in the US will be because there's such an arbitrage play for the shippers to move the US gas to other markets. So I think that's one of the macro trends. But the then the US then becomes one of the key swing producers in terms of the global price or global availability of gas. So, you know, where will those prices go? I think we're, I think that we're the we're going to be will have higher lows. I think that that's clear that the the low price of gas will be higher than it has been in the past. Second, that a US drillers are much more disciplined now in their production of gas and oil than they were before because the at the height of the shale revolution or during the shale revolution, they burned through about $300 billion in in cash that just was vaporized and consumers in the US benefited and some that were around the world because they overproduced and under delivered on profitability. But now they've not they're not going to do that again. So there's going to be much more discipline in the US in terms of gas production, which I think is the other reason why we will have higher lows in terms of price. But if you're gonna ask me to name a price, you know, I can't do that. But But I think that the we're seeing that is clear trend, and I'm gonna summarize it is that natural, like natural gas molecule, methane is becoming much more of an international commodity than it ever was before. And that's because the US has has US companies have spent so much on on LNG export.
I mean, are there a bunch of new LNG terminals getting getting built? I know there was a fire at one that had interesting impacts on both domestic and international prices. But um, you know, now that I got you I'm kind of eager to deep dive a bit of this natural gas Stop it
Yeah. Well, the Freeport LNG terminal. There's been a lot of speculation about what happened there and why that plant when I was at the Russians did, again, there's a lot of a lot of suspicion around what happened. And I you know, I'll just leave it at that there's nothing that can has been proved or even alleged, you know, except behind closed doors, but you saw when that plant went offline, the price of gas in Europe will spike or I'm sorry, the price of gas in the US went down, the price of gas in Europe went up. So this is the there are some new LNG terminals that have been approved. There was just one the other day it's hard for me to keep track of them. But yes, we have the US is now the biggest LNG exporter in the world. And so you know, who would have thunk it? I mean, when I wrote my third book, gusher of lies. It was now what 14 years ago, everyone agreed the US was going to be a major LNG exporter. And in a matter of, you know, less than a decade exactly the flip the script.
There's a bit of a schizophrenic policy, I think, towards fossil fuels in the US right now with the vagrants in power. So what are the steel trap
mind for the obvious they're a doctor?
I mean, it looks a little bit because the reason I bring it up is because the inflation Reduction Act, I think, part of what, you know, mansions, cooperation involved was, you know, increasing licensing for offshore drilling, I believe. So, to what extent is that is that sort of schizophrenia shifting? Well,
I mean, leave the inflation Reduction Act to the side it's this schizophrenia in the Biden administration about berating the oil and gas companies for the profits they're making while at the same time begging them to drill more are telling them they should drill more, or that they, you know, suppressing domestic production. And that's in fact what the Biden administration has done by limiting the number of leases that they're going to offer. And then going on bended knee to Riyadh to talk to Mohammed bin Salman or to the Iranians are to the Venezuelans. I mean, you know, are you kidding me? I mean, it's like you read it, I'm reading it in the onion. I mean, after decades of all of the, you know, American policy on energy has been around this objection to foreign oil. And now we have the president of the United States going to these foreign countries, including the narco Maduro in Venezuela, which is the there's no way that I mean, PenaVega, the national oil company of Venezuela, is there in shambles. You're going to the Iranians, the Iranians support Hezbollah, Hezbollah, was responsible for the bombing of the Marine barracks in Beirut in 1982, the largest loss of more of us marine life, US Marines, since Iwo Jima in World War Two, and we're asking the Iranian I mean, what are you doing, man? I mean, it just is schizophrenia doesn't do it proper justice. I mean, it just does it. Again, a lot of tactics, but no strategy.
Right, right. Well, Robert, would kind of come in towards the end of the interview, and sorry to go off there. But I mean, no, no, listen, I mean, I've got so much I want to pick your brain about. But it's
truly remarkable about this kind of lack of understanding of what energy security means, and how you're going to try and achieve it. And particularly for the low and middle income consumers. Low high cost, energy is the enemy of the poor. It's the enemy of the poor, always everywhere. And yet there's the Democratic Party, which claims itself to be or styles itself to be the party of the working class and what they're doing to sticking it to the poor and the middle class. I just don't I find it just disgusting, frankly.
Are you at liberty to talk about any of your upcoming projects?
Sure. Sure. We're, thanks. I'm working on a new documentary. It's called burning down the grid. I thought I'd made my first and last documentary when I made juice. So electricity explains the world. But after experiencing the blackout here in Texas, and seeing what has happened with the grid more broadly in the United States, and the future of our generation portfolio, decided I had to make another documentary. So we're working on it, you can in fact, our website is live now burning down the grid.com. You can find it there. And then I'm just, you know, grinding away on. Oh, actually, I've watched The Tick Tock channel, Have I mentioned that I'm gonna be the king. Now. I'm on tick tock. I did a piece on fact, just yesterday, I've had 2000 views already on tick tock, who knew about the closure of the New York nuclear plants. So I'm working with my daughter, Mary, who I dearly love, she's in Los Angeles, and she's helping me, you know, get my game on my tic toc game on. So that's been fun. Because to me, it's just, uh, you know, I've done a lot of produce a lot of content of different kinds, the podcast and writing and, and do a lot of speaking, but the idea of being able to produce, here's my argument, and I want to do it in about a minute, and that just trying to make that happen is fun. You know, it's a good challenge. It's a new challenge. Why do you care about this? Well, you should care about it. Because this, this and this 60 seconds, and then see you.
Yeah, no, I mean, part of me despairs at, you know how short attention spans are. And, you know, the ways in which it's hard to develop complex arguments, but at the same time, I mean, with Twitter and Tiktok, it forces you to be brief to get to the point. And it's almost like, you know, writing a haiku. And there's a certain beauty to that to
meet the audience where they are. And, you know, I just turned 62 last month and so, Tik Tok represents a whole other demographic that I might not otherwise, you know, you look at your statistics and who your audience is, and mine skews toward people who are, you know, look kinda like me, and they live in the United States. And so, if I can reach you know, beyond that, even just as a lark, well, why wouldn't I, you know, to try and do something else to I don't want to sound too pompous here but broaden the reach to try and reach a new audience to try and force myself because it is hard to do something in a different medium that is, but that allows me the, the possibility of expanding the conversation or affecting a few opinions. I think that's exciting. Yeah,
no, I long ago gave up on trying to keep up with your pace of content creation. But I gotta say, it's really admirable. This is clearly a passion project for you, you know, up to 130 in the morning, last night, going over some of these, some of the paperwork related to the bill and just banging out the podcast and now now, there and it's impressive, Robert,
it's because it's so important and I think it's the same motivation that you have that this is not this. These are the most important issues in our society. And we have to we are called Our purpose is to make sure that we're doing what we can to put the light on them because They they they're so important
right well given all your time constraints I appreciate you making time for Decouple today
always happy to do it Chris thanks take care Robert
