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The Atlas Society Asks Robert Bryce Transcript

The Atlas Society Asks Robert Bryce Transcript

June 4, 2022

Robert Bryce is a Texas-based author, journalist, film producer, public speaker, and host of the Power Hungry Podcast who has spent decades focused on the energy industry. As a longtime skeptic of renewable energy, Bryce discussed his recent book, A Question of Power, and documentary Juice: How Electricity Explains the World, along with his analysis of the 2021 Texas power crisis in this April 27th, 2022 interview with our CEO Jennifer Grossman.  Watch the interview HERE or check out this transcript below. 

The Triumph and Glory of Air Conditioning

JAG: Hello everyone. And welcome to the 101st episode of The Atlas Society Asks. My name is Jennifer Anju Grossman. My friends know me as JAG. I'm the CEO of The Atlas Society. We are the leading nonprofit organization introducing young people to Ayn Rand in fun, creative ways like our graphic novels and animated videos. Today, we are joined by Robert Bryce. Before I even get to introducing him, I want to remind all of you who are watching us on Zoom, on Facebook, on Instagram, on Twitter, or LinkedIn,  to please go ahead and use the comment section to type in your questions. Keep them brief and we will get to as many of them as we can. My guest today, Robert Bryce, knows more about energy policy than anyone I know. He's the host of Power Hungry Podcast, and the producer behind the excellent 2020 documentary, Juice: How Electricity Explains the World, which I was very delighted to have an opportunity to watch at a recent conference.  His books include Power Hungry: The Myths of Green Energy and  The Real Fuels of the Future; A Gusher of Lies: The Dangerous Delusions of Energy Independence;  Smaller, Faster, Lighter, Denser, Cheaper: How Innovation Keeps Proving the Catastrophists Wrong; and, his most recent book, A Question of Power: Electricity and the Wealth of Nations. All of these are also available on Audible. Robert, welcome again. Thanks for joining us.

RB: Thank you, Jennifer. I'm glad to be here.

JAG: So, we are going get to audience questions shortly, but I'm going to preempt one that I have a feeling is going to be asked by many of the people joining us today. That's about the Texas power outage last year. You lived through it, you've written extensively on it. I wonder if you could help explain in a nutshell what happened and what are the implications, should we be taking away in terms of future energy policy?

RB: Sure. Pleased to be with you. The blackouts were caused by, as I explained in a Dallas Morning News article last August, it was an epic government failure. The state government designed a market that is fundamentally flawed. And one of the key flaws is that which allowed the entrance, an addition of a whole bunch of renewable energy that was not dispatchable and in particular wind energy into the state grid. Sixty-six  billion was spent on wind and solar in the years before the outages. And then when the grid was on the verge of collapse at 2:00 AM on February 15th of last year, effectively, all of that investment was worthless. As I joke about it, all that wind and solar went to Cancun with Ted Cruz, it was not of any value. And so the way the grid was designed, the way the market was designed allowed all this asynchronous-generation of renewables that are intermittent weather dependent to be added to the grid, but they weren't able to provide any power when power was needed.

RB: And the other key point that is lost, and there was a ton written after the blackouts and a lot, particularly the New York Times and elsewhere saying, oh, those crazy Texas Republicans they're blaming renewables. Well, the key part of this that is lost is that there were over six gigs, 6,000 megawatts of coal-fired capacity that were retired in the five years prior to the blackouts. So that thermal generation, and that was the coal and nuclear plants that performed the best when the grid was on the verge of collapse. The amount of thermal generation in the state and in particular, coal, fell by about 20% and wind generation increased by 20%. So you add all these factors together and you made the Texas grid become more fragile, and that is partly due to these massive federal subsidies for wind and solar. Those are the drivers of all this wind and solar that's being added to the grid, and it's a warning to other states. And then the fact that Texas had blackouts, widespread blackouts, and that the Texas grid is starting to mimic the grid in California. And that's not a good thing.

JAG: Have they made any changes that would help to prevent this happening again?

RB: Well, the state is trying to, the public utility commission is tweaking some of the regulations, the state legislature passed a bill that gives the public utility commission and ERCOT, the grid operator, somewhat latitude, but still there's nothing that is stopping this massive influx of new solar in part two into the ERCOT grid. And so, I wrote about this recently in Forbes that if the current trends and the current projections are correct by the end of next year, by the end of 2023, Texas will have, or the ERCOT grid will have more wind and solar capacity than it has a natural gas-fired capacity. And all of that means that then the existing thermal generators, the coal, the nuclear and the gas generators are less economic. They don't make as much money because they're being forced out of the market by subsidized wind and solar. So this is a recipe for disaster, and those subsidies cannot be controlled by the state officials. So, the result is the increasing fragile fraternization of the Texas grid. And,  I hope it doesn't, but I fear that this is going to end in tears.

JAG: Hmm. All right. Well, we want to bring some smiles to ward off the tears. So I'm ready for some good news. We celebrated Earth Day last week—in light of that, how's America doing in terms of reductions in air pollution from lead, smog, carbon monoxide and the like?

RB: Well, thanks. And there is a lot of positive news, but if I can just add one little point here about Texas and that just before we get back to, so I don't forget this. What is going on is clear now as well, that in the aftermath of last year's blackouts, consumers are going to take a big hit. So we've seen electric rates throughout the state now being increased. And some of the cooperatives that took big losses are securitizing the debt, Rayburn County Electric, securitized $900 million in losses. That may be just the beginning of that, but rate payers are going to pay the cost because poop rolls downhill in plumbing and in electric grids. 

So, that's the one last point on Texas, but as far as air quality in particular, in America the trends here are very positive. I just looked this up on the EPA website -- you can look under airtrendsandepa.gov -- that since 1990 carbon monoxide in the US is down 73%, lead down 86%, nitrogen dioxide down 61%, ozone particulate matter, sulfur dioxide, effectively. All of these made massive declines, in the matter of sulfur dioxide, 91% decline. So these trends, in terms of criteria, on air pollutants are very positive.

JAG: Hmm. What's driving the improvements?

RB: Well, it's  cleaner vehicles, obviously,  improvements in and reductions systems, both in vehicles and in industry. All of these things together are helping clean up the air. And I mean, these are let's be clear. A lot of this is due to government mandates, but it's been very positive for overall air quality throughout the US.

JAG: Well, speaking of the gas that is going into these new and improved, more fuel efficient vehicles, last week, the American Petroleum Institute, which represents Exxon, Chevron, BP and other major oil companies, endorsed a tax on oil and gas production. What do you make of that?

RB: Well, it's interesting. I haven't really looked at this, but it seems to me that this is an effort by the industry to shield itself, potentially from carbon taxes or some other form of regulation. And I understand it's Exxon had endorsed this before some kind of a carbon tax. And, as I see it, it's an effort by the industry to kind of inoculate itself and say, well, we're for this solution. We put this forward, and this is what we do now, but let's be clear, you know, what may be good for the majors and the super majors is not going to be good for the independents and the small producers, because how are they going to pay this? The end result, whether it's the super majors, the independents, this idea of increasing the cost of energy, that's bad for the poor and the middle class, this is a regressive tax.

RB: Let's call it what it is. And, I'm opposed to high cost energy. Expensive energy is the enemy of the poor. And I live in Austin, Texas, and I meet people here and they say, “Oh, energy's too cheap.” Well, these are people that are living very comfortable lives. And, you know, whether they spend $3 or $5 on a gallon of gas, it doesn't really make a difference to them. But for the tradesmen, for people who I know, who I've been friends with, they're hard working people. They commute a lot. They commute tens, even a hundred, miles a day. Wow. This is a big cost for them. And expensive energy is their enemy. They don't want to pay more at the pump, that does nothing for them. So understand why big oil is making this move. There's a lot of politics behind it, but I'm for cheap energy. Absolutely because it's critical to human flourishing. High cost energy is the enemy of the poor, whether it's liquid fuels, transportation fuels, electricity, all of that high cost is bad for poor and working class people.

JAG: So I have a few more questions, but I want to remind our audience. This is a wonderful opportunity to ask questions of, as I mentioned, someone who knows more about energy and energy policy than anybody I know. And, if you are alarmed by what we've been seeing at the gas pump and concerned about  whether or not the same government agencies that used the crisis of COVID to mandate all kinds of civil liberty-destroying policies, whether they may be using the climate crisis to do the same, please submit your questions and we'll get to 'em. But last week, Robert, also, there was a lot going on in the news when it comes to energy.

RB: Was there ever, oh my gosh.

JAG: Biden administration Climate Czar John Kerry told PBS that, ”Solar and wind are less expensive than coal or oil or gas. They are just less expensive.” So is that statement true? And if renewables are so inexpensive, why does the Biden administration need a hundred billion dollars to subsidize them?

RB: Well, thank you. I mean, that last question is the key one, isn't it right? That these are industries, the solar and wind industries have always been driven by subsidies and they keep making these same claims that are not true. They've never been true. And yet, and now they're being repeated by the climate czar for the Biden administration. I just find it frankly disappointing, and not just disappointing, it’s almost disgusting because it's just not the case, this idea that, oh, well, because we don't have fuel costs and we'll use this levelized cost of energy, which is a fiction in terms of measuring the actual cost of delivered electricity. It doesn't account for let's talk about what the key constraints are. The land use problems, which are widespread from coast to coast, from Maine to Hawaii even. And I've documented this: over 325 communities since 2015 have rejected or restricted wind projects, dozens have rejected or restricted solar projects.

RB: So, and this idea that, oh, well it's cheaper. Well, it's only cheaper if you don't count all of these other costs. And, what we're seeing lately is, in fact, the cost of producing new wind turbines has soared. In the last few months, there have been reports about them, the cost of the components up as much as 40%, but this idea, oh, it's cheaper. Well, it doesn't account for the need for backup generation because the wind doesn't always blow, hello, the sun, doesn't always shine that we know for certain, you have to have an existing electric grid that has thermal generation that can then step into the breach when the wind fails  and the sun doesn't shine, which happens all the time. And there is a lot of spin around this issue of cheaper and I've heard it over and over and it trigger the gag reflex honestly, that it just ignores all these other costs and says, oh, well, it's just that, you know, when you just compare the cost of the electricity itself, well, you can't do that.

RB: You can't do that and have a reliable electric grid. You have to count all these other costs, including the land cost of transmission, the cost of the backup, the cost of the fuel, all of these things that get ignored , including by John Kerry, that I find just fundamentally wrong. And, in fact, dishonest.

Sorry for getting worked up -- I just have heard it so many times, JAG, and it's just so blatantly false and yet it just keeps being repeated. And John Kerry's also speaking up saying, oh, well we need more, more subsidies for wind and solar. Why, if these are so cheap, why can't they make it in the marketplace? They've already had 13 extensions of the production tax credit for the wind business --13 -- and Charles Grassley himself, who is the father of the production tax credit has said, “I never meant this to be permanent” and they want to make it permanent because it's so incredibly lucrative. And these big companies are taking tax subsidies,  NextEra energy, which was just prosecuted for killing bald and golden Eagles. They have $4.6 billion in tax credits on their financial statements, $4.6 billion in tax credit carryforwards. It's a massive amount of money. These companies aren't about climate change. They're about subsidy mining.

JAG: So speaking of the Biden administration, they appear to be giving somewhat mixed signals when it comes to drilling policy.

RB: No kidding.

JAG: Right. Because  they promised no new leases on federal lands, but of late they've been touting new leases to bring down gas prices and yet another one of their climate advisors, Gina McCarthy, last week assured MSNBC viewers that the administration remains absolutely committed to not moving forward with drilling on public lands. So what's going on?

RB: You know, JAG I can't make heads or tails of it. I mean, the story changes almost every day. Here's the reality: the Biden administration and the Democratic Party are worried big time. They are scared witless because they're looking at the November elections and hoping that gasoline prices will fall because this is a populist issue. And they're very concerned about the November elections and, well, they should be because they need a big reality check and I think voters are ready to give it to them. But then, so what has been the reaction of the Biden administration? It's been trying to straddle the fence, oh, we're for lower prices, but we're not for increased production. Well, you can't have it both ways. And one of the first things that the Biden administration did, of course, was cancel the Keystone XL pipeline.

RB: And not only did they cancel it, I talked to people at TC energy who owned the Keystone project. They dug out of the ground the piece of pipe that actually straddled the US-Canada border so that they can't just go back and restart or reconnect it. They pulled that piece of pipe out of the ground. So, that reminded me of the best description I've heard of the Biden administration's energy policy: they have a lot of tactics, but no strategy. I mean, they're doing all this stuff, but there's no strategy for them. And so you have Biden, not only saying, and Gina McCarthy saying, oh, we're not gonna drill more on public lands or that we're gonna add more leases, but then they extend leases, and you know, I've talked to drillers who have leases, but they can't get permits.

RB: They can't get the permit to actually drill on the lease. So they're saying, oh, we're gonna lease more land. But if you don't give the permits, they can't drill and further, and this is the part that I find just, I mean, just beyond, I thought I read it in The Onion, but it was that here's Biden going on asking the narco Nicholas Maduro in Venezuela to produce more oil. Well, Maduro is a thug and a narco and he's asking them to produce more oil. Hello. And then not only that, he's going to the Iranians, the party of Hezbollah asking them to produce more oil. What are you doing, I mean, really, what are you doing? This makes no sense at all. And forgetting, it's not just about 40 years ago, that the Hezbollah bombed the Marine Corps barracks in Beirut and led to the largest loss of life of Marines, US Marines, since Iwo Jima, Hezbollah was in charge of that. That was their job. And yet we're asking the Iranians to produce more oil while we are not producing oil here. I mean, it sounds kind of jingoistic, but I've followed this for a long time. What are you doing, man? I mean, you know we need more domestic production. Domestic production means energy security. That's what Europe is learning now in particular. And so the Biden administration, they're just doing all this stuff, but there's no end goal  that I can ascertain that I can see anywhere in the whole thing.

JAG: Well, I know you're not jingoistic, because of many of the arguments that you advanced in your book, Gusher of Lies. So I'm going to get to that. But, I see even better questions than the ones that I had prepared coming in over the transom here. Jamie on Instagram is asking: are we going to see more fuel shortages with some of our refineries being 30-plus years old and no new ones being built?

RB: I'm not so much worried about the age of the refineries, because what we have seen is the number of refineries in the US has declined, but the existing refineries have expanded. So I don't see the issue of shortages being a result of lack of refining capacity. What I think is clear, and we've already seen some rationing of diesel fuel or at least discussions of rationing of diesel in Europe. I think the issue for the US is the mixture of crudes that those refineries can handle. Our Gulf coast refineries predominantly favor heavy sour crude from overseas, because that's why and how they were set up. But I think what we're going to see is significantly higher prices and that we're going to see higher prices for an extended period because of these issues we've already talked about: not enough domestic production and that decrease in domestic production combined with supply issues, supply chain issues around the world for tubular steel products, as well as Russia going offline, for all the reasons we all know, all of these together are going contribute to higher prices for both oil and natural gas.

JAG: All right, Scott Schiff is asking, do you think a return to nuclear power is needed for Europe to not be as dependent on Russian energy?

RB: Absolutely. And, I interviewed Mark Nelson, who's a brilliant nuclear analyst and we just talked about this yesterday, how do you explain Germany? They’re going to continue to close their nuclear plants even after the invasion of Ukraine; they've decided, oh, no, we're going to go ahead and go forward with the closure of our three reactors that produce something on the order of 40 terawatt hours of electricity per year. But the only way to replace that is either with coal or natural gas. The Belgian government has said, we're going to extend the life of our existing reactors, but as far as I can tell, that's not a done deal; but the British, the UK Prime Minister Boris Johnson has said, they're planning to build eight reactors; France: Macron has said, they're going to embrace SMRs. I guess the shortest answer would be to say,  if sanity prevails, if reason prevails, Europe will embrace nuclear and they should, and I'm adamantly in favor of nuclear energy. If we're going to be serious about decarbonization, we have to be deadly serious about nuclear. We're not serious about nuclear weapons in the United States, but the Europeans in particular have to get on it and get on it right away.

JAG: All right. From YouTube, Patrick Miller is asking Mr. Bryce, given the $66 billion investment in renewable green energy in Texas, what is the actual total cost per kilowatt for that type of energy?

RB: Well, that's a good question. I can't answer that it would be measured in kilowatt hours, or, I mean, the $66 billion was for the capacity that was installed as well as the transmission lines. You know, what proponents would argue is that that's bringing down the cost to the consumer. Well, in some cases, that's true because they're bidding into the market at prices that are less than the thermal generators, but that's maybe good for a little while, but if you put those thermal generators out of business or you prevent new thermal generation from being built, you make the overall grid more fragile, and that's what we've seen. And so now, you know, Generac sales in Texas are skyrocketing. They're skyrocketing in California. We have a grid that's less reliable because we don't have the amount of thermal backup, the amount of thermal generation that's absolutely needed during times of high demand. So efficiency can help some, but you know, we're not going to see our way out of this. We need to continue building new power plants.

JAG: All right. On Twitter, Anthony Bosco asks: should we be concerned that more LNG export terminals decided to build in places like Mexico instead of the United States?

RB: That's interesting. I don't know if they’re being built in Mexico, I'm not familiar with this, whether that's going to be fed with an American natural gas,  I will say that what we're seeing now with the surge in LNG exports from the US, that it's in fact, driving up the price of domestic natural gas, that's clear. And because now American natural gas, like American oil, is effectively being traded at an international benchmark. Now we're not quite there yet, right. We still have the Henry hub benchmark for gas in the US. And I haven't looked at it today. I think it's $5or $6, or maybe it's even higher than that. I haven't looked at it in several days, whereas in Europe, it's $32. So if you're in the LNG business, you can buy American gas, even at $7, liquefy it for $3, $4, $5, ship it across the Atlantic and make a handsome profit. So that's what we're seeing, but you know, the LNG exporters are arbitraging that differential in price. And, some of them are marking up. We're going to make a lot of money doing it.

JAG: All right. Tristan on YouTube. I think we answered your question on nuclear, but I hate for you to lose your spot…

RB: I'll just add one point quickly on nuclear, JAG, in the US, we're building two reactors in the United States, two reactors at Plant Vogtlein Georgia. China is building 46 and the nuclear regulatory commission under the Biden administration, in January, poured out an application for a one-and-a-half megawatt (this is a small reactor, but proposed by Oklo Oklo Power) tossed out their application. That was just a few weeks after the Chinese started operating a high-temperature gas reactor, a helium-cooled gas reactor in Shong province. China is doing the cutting edge of the cutting edge in nuclear. And we're standing here with our teeth in our mouth. I mean, we're the country that invented nuclear energy. We should be leading in this and we're trailing and not trailing by a little bit. We're trailing by miles and with every passing month the lead of China and even Russia is increasing on the United States. This administration is full of, and you mentioned Gina McCarthy, anti-nuclear people at the top level of this administration. 

JAG: All right. From Instagram, Hannah Cummings: is there any truth to oil scarcity? It's been talked about for decades, but we seem to keep finding more sources.

RB: And it's remarkable, isn't it? That the more oil we find, the more oil we find; it seems like it's not possible. But this is one of the things that is so remarkable about the industry, which is that there's the old saw, where do you find oil? Where you already found it. And so where is the hottest oil play in the world today? It's the Permian basin in west Texas. It's ours. I would bet a hundred dollars to anyone right now. There are more oil and gas wells that have been drilled within say a hundred mile radius of Midland, Texas than anywhere else in the world. And it's still the hottest oil play in the world. So, there's no shortage of oil and natural gas where the shortages are occurring. Now there is a lack of capital to drill for that oil and gas, as well as a lack of roughneck, rust-abouts, tool pushers, the people who know how to run the rigs and the sand chiefs and the FRA spreads. Those people are in short supply as is some of the materials that they need. As I mentioned, pipe, you know, basic steel, in some cases, a lot of these things are going up in price and that's affecting the ability of drillers in the United States to drill more wells.

JAG: All right. Well, I mentioned I wanted to get back to this book, you wrote Gusher of Lies back in 2008, and you systematically dismantled the popular concept of energy independence in a way that I hadn't seen done before. I think I had actually mentioned something about energy independence to you at the conference and you corrected me. So since you've written this book, however, America became a net exporter of petroleum products by 2021, The US was the world's largest producer. So I'm wondering if innovations and oil production, as well as the crisis in Ukraine showing the downside of being dependent on energy from countries like Russia, has that changed your calculation at all?

RB: No, it hasn't. And, you know, I've looked at that book. I'm proud of that book. You know, 20% of the book, I debunk the whole corn ethanol scam, but we're still an interdependent country. Yes, we export a lot of crude, but we import a lot of crude. So on net we are a slight net exporter of crude, of oil products, but it's because we're able to bring in a lot from overseas. So what we've seen in the United States is this massive increase in light sweet crude that's west Texas intermediate as a light sweet crude, well, but our refiners are not set up to handle that. They're set up to handle the heavy sour crudes from Nigeria, from Saudi Arabia, from other countries because they make more money. They can make more product handling that type of crude oil.

RB: So we export one type of crude and import a different type. So we are now just as we were, when I wrote Gusher of Lies 14 years ago, or published it 14 years ago, we're still very much in an interdependent world, and that's going to be the case for a long time. Are we better off by producing more oil and gas here? Absolutely, absolutely. But, let's not kid ourselves that we're somehow some— what is it?—autarchy; that we, you know, don't need other countries. And, also, just one last point on this idea of independence. Well, who's dependent on whom? Is the buyer dependent on the seller? Is the seller dependent on the buyer? We are interdependent. I gave you a dollar for an apple; well, you got my dollar, but I got the apple and I'm hungry. I need an apple. So, you know, the interdependence, this is going to change. And I think we're going to see a big shift in supply chains after, particularly after the Russia invasion of Ukraine. But we're still going to be very much interdependent when it comes to energy, and in particular liquid petroleum.

JAG: All right, from Instagram, Isaiah Shar asks: Abolish the need for federal permits, or the EPA—yay or nay?

RB: Well, the federal government has a role and the federal government controls a lot of land and resources offshore and onshore. So I'm not opposed to having the federal government own those resources and getting a royalty from it, because those are our lands. We own them in common as Americans. So someone is, has to be in charge of them, and someone has to collect that royalty check. And so it's worked well for decades. And so I'm not suggesting that the federal government should give those up, but what they need to do is act responsibly and realize that, and this was the other one that was just amazing. I think it was just the last day or so the Biden administration said we're not going to drill in the naval petroleum reserve in Alaska.

RB: Well, wait a minute, those lands were set aside for the purposes of securing American energy. And you're going to say, oh, we're not going to allow that?  It's crazy town. I mean these are our resources. We need to develop them. And we shouldn't be going to the narco crook Maduro and asking him to produce more oil. Not that he could because VESA, and Venezuela is in, I mean, the country is in shambles. And of course we shouldn't be asking the Iranians. They're not our friends. They, you know, the people, I think are pro-American, but their government is crooked and, anti-American.

JAG: So I really want to get into your documentary, Juice: How Electricity Explains the World. First, maybe just tell us a little bit about what prompted you to go on the project and just a bit about the scope, because, sure, it was amazing how many countries you visited and how many different walks of life were incorporated into the narrative.

RB: Sure. Well, thanks. I'm really proud of the film and I need to give a shout out to my colleague, Tyson Culver, who directed it and did just a great job in pulling it together. We did more than 50 interviews and traveled 60,000 miles, and he made a beautiful film, and I was in it, I'm on camera, but I wasn't the one who made it. I mean, actually, physically put it all together. He did; so tremendous credit to him. But the quick backstory is, in 2016, I got a contract to write this book from my longtime publisher, Public Affairs. And I thought, well, I'm going to write a book about electricity. Well, why don't I make a documentary at the same time? How hard can it be? Well, <laugh> foolish idiot.

RB: Well, it's hard. It's really hard. And I wouldn't do it again, trying to write a book, and do a film at the same time. But now that it's done, I'm very proud of them and happy that they're out, the impetus for it was very simple. In 2016, a few months before I got the contract from Public Affairs, I read an article. I believe it was in the New York Times about power shortages in Nigeria. I read the article and I thought, well, what's going on in Nigeria? Because I remembered when I was a kid and it's 40 years ago or more, I saw a piece on 60 Minutes with Morely Safer in Lagos talking about power supply problems in Nigeria. And then I'm reading this article now six years ago and thinking, well, why hasn't anything improved?

RB: Why are some countries like Nigeria, electricity-poor, and others like Japan and the US, electricity-rich? And so that was the question I will  try to answer in the book and in the film. And it's a lot about integrity, about societal integrity, about the countries having a system of laws and people believing in the system that's absolutely key. And if you have that, you can attract the capital. And if you have the capital, you can attract the fuel and you can have a grid that works. And if you don't have that integrity, it doesn't work. And I saw that myself in India, I saw it in Lebanon. I've seen it in Puerto Rico. I mean, you know, where you have weak governments, you have weak electric grids.

The Case for the Deregulated Texas Power Grid

JAG: Well, you focused part of the documentary on the marijuana industry, and how much energy was required to cultivate marijuana was totally surprising. So, tell us a little bit about that and what you kind of hope is the takeaway.RB: Or the toke away if we make the pun here. Well, I'm from Oklahoma. Oklahoma has legalized medical marijuana and the electricity demand for some of the cooperatives in rural Oklahoma has skyrocketed, but, why is that? Because you can produce a lot more weed using grow lights than you can if you're just growing it outside. Right. And so you have much more control. You can produce six crops a year doing it indoors; outdoors, one, or if you're in California, maybe two. But the power density, the power requirements of these indoor pots is very high. And in some cases, hundreds, or even thousands of watts per square meter, you're talking about the same kind of power densities that you're looking at inside a data center, like what's operated by Google or Apple or Amazon.

RB: So they're enormously energy intensive. And it's an industry that has tried to reduce the amount of electricity that is required, but they depend on these sodium high pressure lights. And those are the ones that make the pot plants grow the best. And so they've experimented with other LED lights and higher efficiency lighting, but they're, as one of the pot growers—the black market grower that we interviewed in the film—said, I think I remember exactly who said the LEDs, they just don't have the punch. You use that word so that they just don't make the plants grow and flower as well as the high pressure sodium lights, which require a lot of power. And so, in fact, it's been an issue for law enforcement where,  in some cities, particularly in California, there's a lot of illicit, a lot of organized crime activity in California growing pot. They'll track some of these houses down because of their high power bills.

RB: Or, the growers will steal the power. And that is very common where they'll bypass the meter, especially Chinese and Russian organized crime in California. They will buy a house or rent a house, and then even jackhammer around the meter and bypass the meter so they can get free electricity, but  they'll be found out eventually, or in many cases they're discovered because of either high electric bills  or demand in a in a given neighborhood that's too high for what that neighborhood had been. So, you know, this is one of the ways that they find them, either that, or infrared or FLIR, overhead photography, they're finding some of these is that way as well.

JAG: That's interesting, people finding ways to siphon off electricity, and that as you talked about before the integrity of the system being so vital, where else did you find that to be in, in the world? 

RB: Sure. Well, you know, I'll preface it by repeating what I call the iron law of electricity, which is that people, businesses and countries will do whatever they have to do to get the electricity they need. Well, I saw it in India. I saw it in Lebanon. I saw it in Puerto Rico. I saw it in Louisiana last September where I went and we shot after hurricane Ida. People aren't going to sit in the dark, they're going to do whatever they have to do to get the electricity they need. So we saw in India, a lot of electricity theft in some areas in India, the amount of electricity that's simply stolen is as high as 50%. In Lebanon, we saw where the grid operator EDL is not reliable. 

RB: Everyone who lives in Lebanon pays two electric bills, one to the EDL and the other to the generator mafia. And that's the name for local neighborhood generators who will provide power to their customers when the grid fails and the grid fails all the time. So this is part of the, you know, the way electric grids have developed around the world. And what is clear to me is that people will do what they have to do. They'll pay the generator mafia, they'll buy their own small generator. We saw that in Puerto Rico, we saw it in Louisiana. They're not going to sit in the dark, even if feeding that gasoline into that generator costs them a lot of money. They'll do it because they need power.

JAG: Tell us about what you learned in Iceland.

RB: Well, Iceland is an interesting country. I've been there a couple times. My wife, Lauren, and I went there back in 1985, and, man, has Reykjavik changed, and their tourism business has skyrocketed, but you know, everyone, loves Iceland. And I understand why, but it's a tiny little island in the middle of the north Atlantic with 300,000 people. And it's famous because they have a zero carbon grid. Well, that's because they have a lot of hydro power and they have great geothermal resources. Well, you don't have that in west Texas. You're not going to do that. And out in Odessa and Andrews county, Texas, because there's not enough water and there's no geothermal. So, you know, Iceland is an amazing place, incredibly beautiful, and the people are very friendly. But it's attracted a lot of industry, both for aluminum refining for silicon, poly silicon production, because their electricity is so cheap. And so they've attracted industry from all over the world. But you know, what has happened in Iceland and their electric grid is not really replicable in other places around the world.

JAG: All right. A few more questions coming in online. Instagram, Frederick Cornell asks: Couldn't Texas's power grid have been saved if it was connected to the national grid?

RB: You know, this is one thing that's been brought up a lot and I understand why the suggestion is made. But my short answer is it doesn't make any difference. There are a lot of island grids around the world and they work fine, Iceland being an obvious one. I'm not bragging on Texas. I'm born and raised in Oklahoma. I've lived in Texas a long time, but I'm not here just saying, oh, I love Texas. And, you know, there is an ethos in Texas, we're going to do it the Texas way. And I get that. But there, even if there were interconnections with my ISO in the north or SPP or, you know, the inter-Eastern interconnect, Western interconnect, there's no assurance that those states or those grids had any power to spare and further, Meredith Angwin, who I quite admire has written a great book called Shorting the Grid, which I usually have right in hand. She made an interesting point, which was that if Texas had been interconnected with these other grids, they could have pulled those other grids down because the power demand here was so high.

RB: So this claim that, oh, Texas wouldn’t, we wouldn't have had blackouts, had we only been connected to these other grids? Well, they were having the same crisis that Texas was, and that was due to, effectively, no wind energy being available and massive stress on the gas grid because, part of that stress is due to the fact that we closed so much coal fire capacity. So the idea that, oh, there would've had a different outcome. Well, maybe, but I think probably not.  That's not, to me, that's not the key issue. The key issue is about the design of the market that allowed the grid to fail.

JAG: Maybe a stupid question, but tell us a little bit about why Texas. . . what was the justification or the rationale for Texas wanting to be not connected to the grid?

RB: You know, I don't know all of that history, Jennifer, I have to admit. My first book was on Enron. It was published 20 years ago, and, in the writing of that book, I met a great guy named Jim Wal Zel, who lives in Houston. And he said to me, sometime back then he said, this deregulation hasn't really been good for talking about electricity markets. Hasn't been good for the consumer. Well, it was for a little while when everything was fine, but now we hit a crisis point and we're finding out, no, this wasn't good for the consumer. So, to me, the issue of the isolation of ERCOT from the other RTOs, the other regional transmission organizations in the U.S.is not the most interesting part of the story.

RB: It's rather the way that Texas decided to deregulate its electricity market and follow the mistakes that were made in Britain; Britain did the same thing to deregulate their electricity market and say, oh, we're not going to have an integrated utility. We're going to have one transmission company and one generator company and the rest of it. Well, this was the Enron model. And what are we finding now? Well, in the wake of this disaster, the buck doesn't stop anywhere that this deregulated environment led to a market where, oh, well, the market failed. Well, no, the market failed because you didn't set up the market correctly. And there is no one held responsible. And so now I mentioned that rising electricity prices due to these other factors, securitization, and other factors. But now we're facing a tsunami of litigation, both for property losses and for loss of life. And ERCOT is one of the named defendants. Well, if ERCOT doesn't have sovereign immunity as the courts have already ruled they don't, well, who's gonna pay for all of this, these losses. Again, it's going to be the rate payer.

JAG: Hmm. All right. From Twitter, Iman Farrah asks, what should be the role of a national oil reserve that the administration seems to want to use to manipulate the market price?

RB: Yeah. You're asking about the strategic petroleum reserve. And I think this move to tap the SPR was just a bad move. I mean, are we seeing some high prices? Yes. But this isn't a crisis. We haven't seen the shutdown of the straits of Hormuz which move out of the Persian Gulf. We're not at war. Yes. The Russians are at war and the Ukrainians are at war, but we're not. And, and so this again is the politicization of the energy sector, which in my view is remarkable. When you think about other countries like Venezuela with VESA, or Saudi Arabia with Saudi Aramco or in the United Arab Emirates ADOC, the ABI national oil company. These are symbols of national pride, these national oil companies in those places, the super majors in the oil industry in general are just continually demonized by the Democratic party.

RB: And I'm not a Democrat, I'm not a Republican—I'm disgusted, but this continual demonization of a sector that’s absolutely critical for the American economy, I just don't get it. I mean, I know it's been part of the Democratic playbook for a long time, but they don't have an alternative. There is no oil as Art Berman has put it. Oil is the economy, we cannot do without oil, and these ideas that, oh, we'll just go somewhere else and do something else. We'll all drive Teslas. No, we're not. We can't, we can't afford it. We don't have enough copper. We don't have neodymium, all these other things. And yet, the oil and gas industry continues to be scapegoated as somehow they are responsible for these high prices. They're not.

JAG: All right. So Facebook, Ashley Zan asks,  what's the future of energy production? Is there any viability in wave energy or is nuclear, oil and coal to go forever? I guess I would add to that I just was at a conference last week on abundant technologies, accelerating exponential technologies. And one of the speakers was raising funds for a company that would use the same kind of oil drilling, oil and gas exploration, equipment workers expertise to drill way, way, way down to get to geothermal.

RB: Right? Well, the geothermal has some promise, but remember, it's still a very expensive technology and you have to have a sufficient temperature gradient. In other words, you have to find some really hot water down there, hot rocks to make it worthwhile. So I'm not opposed to geothermal. I just yet to see it work at scale. But the idea that we're going to stumble onto some new technology that hasn't been invented, and John Kerry's already said this, well, we need things that haven't been invented yet. Well, you're going to stake your energy future, the future of our economy on things that haven't been invented yet. And this is one of the fundamental problems that I have, Jennifer, when I look at what's going on now. And, I'm clear, I'm a critic of the Sierra Club, the natural resources, defense council, the NGO, industrial complex, all of these groups, these pressure groups, I don't call 'em environmental groups.

RB: They're not environmentalists. They're standing by while NextEra Energy and these other wind companies are killing our bald and golden eagles and doing so knowingly. And in fact, I would argue intentionally and should have been indicted, under felony violations of the bald and golden eagle protection act. But I digress. There's nothing new under the sun. We've been looking for alternative energy technologies for decades. The ones we have now are the ones we're going to have. So what do we know? What do we know for certain that works and has a small footprint, a very small environmental footprint that doesn't require acres and miles and miles of territory for solar panels and wind turbines. It's nuclear energy. We need to be serious about nuclear. If we're serious about reducing our CO2 emissions, we need to be serious about nuclear power. There's a plethora of different technologies that have been proven to work. We need to get them deployed and commercialized and out into the market and the US should be leading, but I'm afraid we're going to cede that position of leadership to the Canadians, or I don't know, maybe the Europeans, French maybe, but, we're not progressing our nuclear technology sector in the way that we should.

JAG: All right. Instagram again, Marcus asks, should we push for private power companies and transmission networks, or is it better to reform the current system?

RB: Well, what we're seeing, it's a good question. And I think it's exactly the right one to be thinking about now, because let's look at the US grid. We talk about the American grid as though it's one thing. Well, it's not one thing. We have regional transmission organizations like the New York independent system operator. We have ERCOT in Texas. We have CAISO in California, the Southwest Power Pool, Mico, PJM, ISO New England. We have all these different regional transmission organizations. And then we also have three in 300 different electricity providers in America. So we have 900 co-ops, eight or eight or 900 cooperatives, 2000 publicly owned power entities, including—I live in Austin—Austin Energy. So it's a very diffused ownership of the grid that we rely on. And remarkably, the most diffused ownership of any electric system in the world.

RB: But what we're seeing is the grid becomes less reliable. That's a long preface. As we see the grid become less reliable, we're seeing more entities, even individuals buying gen racks that are essentially making their own private grids. So I'm in favor of public power. I'm in favor of public ownership. Cooperatives are part of the living remnants of the New Deal. I think these assets should, in many cases, be owned by the public because they are key to the operation of our economy. But, if the system is failing and the system of governance around it is failing, people are going to create their own private micro grid or whatever it is to assure that they have power, because they're not gonna do without.

JAG: All right. From Twitter, Sky Thinks Right asks, with the problem of resource scarcity still an issue, is this making it difficult for energy companies to maintain and meet demand?

RB: Well, sure. Well, let's talk about resource intensity and resource scarcity. And where is this hitting the energy sector most, most particularly it's electric vehicles in our alternative energy technologies? Yes, there are some rare earth elements used in the refining process, but all of these alternative energy technologies, particularly electric vehicles and offshore and onshore wind turbines are incredibly resource intensive, not just for land, that's part of it, or ocean territory, but also for the electric vehicle, hugely copper intensive, manganese, zinc, spherical, graphite, rare earth elements, offshore wind turbines, the new ones. It will require as much as three tons of rare earth elements. There was a great report that was published by the department of energy two months ago, looking at the issue of permanent magnets, neodymium iron boron magnets; China controls 92% of the global market for these magnets.

RB: And, the U.S. could start now and say, well, we're going to get serious about industrial policy. Well, it won't make a difference for five years, 10 years, maybe 15 years down the road. So when I think about supply chains, and I think about the energy sector, what I'm thinking about and what I've been talking about, I haven't written much about it. I haven't had time, but I’ve talked about it quite a lot, is that we're ceding our supply chain in the face of Russia's invasion of Ukraine to the Chinese. I just don't understand why this is acceptable. And yet, why do you think Elon Musk is so closely tied to China? Because that's where he sources the key products that go into his cars.

JAG: All right. We've got about seven minutes left. Let's see if we can get to a few of these last questions. I’m just really impressed, by the way, audience, by the quality of your questions. Before we close, Robert, just tell us a little bit about where they can find you, follow you, your podcast, all of that. And of course, as I mentioned, all these books are available on Amazon. 

RB: Well, first about the books. Thank you. Thank you. Yes. Thank you. About the books, you don't have to read them. You just have to buy them. So you <laugh>, you don't have to read them. You just have to buy them. And if you buy them on your Kindle, I make a better royalty. So let's get that out of  the way. The Power Hungry Podcast. We release an episode every Tuesday. Sometimes we're releasing more than one episode a week. Having great fun with that. This week I had Lisa Lenos from Wind Action on, talking about the rural backlash to the wind industry. So, I published those episodes on YouTube, on my YouTube channel, Robert Bryce TV, and the podcast goes out on all the regular audio outlets. I'm also on the web@robertbryce.com. So I'm pretty easy to find on Google, but, I will add just one thing.

RB: You didn't ask me this, but I love this stuff. I mean, I live for this, this is my purpose. This is my life, what I do, and I'm passionate about it because it's so important. And what motivates me is that there's so much misinformation and so much spin and propaganda that is coming out. And some of it, unfortunately, from the administration and, you know, we need physics and math, and  that's what I view as my job is to try and make complicated things simple. And so pound the math, pound the physics, and then start over again. So that's basically what I’ve done for the last 10 years of my life. Some days I just keep repeating myself, but I'm having fun with it. So, anyway, yeah. Enough of the commercial. All right.

My Name is Oil

JAG: Okay. So let's maybe do a rapid fire on some of these. Get to as many of 'em as we can. Facebook, James Sinclair. Was there any singular decision that ERCOT made, that did Texas in, or was it at fault for multiple issues that led to grid failure?

RB:  Arguably the worst decision that was made in all of this and ERCOT had to shed load beginning at about 2:00 AM on February 15th, when our lights went out here in Austin for 45 hours, but the biggest, the most problematic decision that was made, and it was, it's not clear why this was made. There still hasn't been a full explanation why the price of electricity was set at $9,000 a megawatt hour, and then was left there for three days. It should not have stayed at that level. It should have been brought back down, but it was set at that and left at that for too long. And that was, of all the mistakes that were made, that was probably the worst one.

JAG: All right. Instagram, Gavin 09. Thoughts on Elon Musk’s solar-powered neighborhood in Austin, have you visited it?

RB: Have not visited it. I've flown over the Gigafactory. I see it, you know, it's out in the Southeast part of town. My short answer on all of that is that's a very big bet, an extraordinarily large bet on the price of a handful of commodities, lithium cobalt, copper, nickel, spherical, graphite, and he's gone very long on all of those commodities. And now they're soaring in price. And in fact, just a few days ago, he tweeted out something saying, we might need, Tesla might need, to get into the lithium mining and refining business. Well, good luck with that. So, the supply chains are the key for Tesla and for everybody else. But, if I had any stones, I'd short Tesla, but I'm not the first one to say that. So I'm not going to short Tesla. 

JAG: All right. Facebook: why do environmentalists praise solar, even though it uses up land that could otherwise be used for farming?

RB: You know, this I'm glad you brought that up because I've documented this. And I think, JAG, we talked about it before we went on the air. There are over 325 communities across the country that have rejected or restricted wind projects in America since 2015. I've documented it all. You can look on my website and at robertbryce.com and look at the renewable rejection database. The problem with wind and solar is they require too much land, but the activist community, the climate activist community, they are just gaga over wind and solar. And I think, frankly, some of it is just they're on the take. And I say that they get money from these companies, these people that are pushing wind and solar. And so that's what I mean. Look at the New York Offshore Wind Alliance, look who their members are.

RB: It includes the Natural Resources Defense Council and the Sierra Club. What are you doing? This is because they're putting offshore wind turbines, that plan is to put them in the middle of the North Atlantic whale habitat, a critically endangered marine mammal. And you're okay with them putting turbines right in the middle of their habitat? They're not environmental groups, they're activist groups. And  they've lost their moral compass when it comes to protection of wildlife and protection of our land and waters. I don't get it, but it's the same with solar. It's just because, oh, well, it's renewable. It must be green. Jesse Abell had it right: Solar and wind may be renewable. They are not green.

JAG: All right, we'll take this one. Last one, Franco Roman on Instagram, resource wars, myth, or potential future?

RB: You know, there have been a number of books that have been written about this, Michael Claire among them. It's true, I think, that one of the reasons why we have invaded Iraq twice was clearly because of the oil issue and Saddam's control. There's just no doubt about it. I don't dismiss the idea out of hand, and given Russia's invasion of Ukraine, you know, I think that it is requiring a lot of strategists to rethink what they thought they knew. And Russia, if it is able to hold on to Eastern parts of Ukraine is going to have control over vast resources in Ukraine that they'll be able to exploit. So, I haven't given that particular issue a tremendous amount of thought, but don't dismiss it out of hand by any means.

JAG: All right. Well, Robert, very impressive. As advertised, the breadth of your knowledge about energy, electricity, and resources is just breathtaking. And, I learned a lot. So thank you for joining us.

RB: Well, that's very kind, thank you. I'm glad to be invited.

JAG: And thanks everyone who watched us, who sent us your spectacular questions. If you enjoyed this video or any of the other work that we produce at The Atlas Society, please consider supporting us with a tax deductible donation and make sure to also sign up for our newsletter. So you'll be the first to know about our future episodes of The Atlas Society Asks. So thanks everyone.

Robert Bryce
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Robert Bryce
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