 We're back. We're pleased. I'm Jay Fiedel. This is Think Tech Hawaii. It's Energy in America, and today we're doing leadership and energy with our old friend Jeff Kissell, who is here, I guess, on business from his digs on the mainland, where he is a trustee of the Energy Policy Research Foundation, EPRINC, and joins us every now and then by Skype from that vantage. Welcome to the show, Jeff. It is so nice to be back here in Hawaii. Aloha, Jay. So we know we could, so many things we could talk about because you have two vanishes, you know, you were here as an executive in an energy company for many years, well, I guess. And also now you're involved in energy policy in Washington, D.C., and in business in general. You have a fantastic vantage from both sides of the pond, so to speak. Well, it's a lot of work to get that vantage point. It's like climbing the mountain to get the view. I don't know whether it's worth the price or not, but we've got the view. So we can talk about so many things, but what we settled on after discussing so many of them today is leadership, okay? I suppose the first part of it is trying to determine what we need to lead, okay? And we have, you know, sort of a wild horse in the way of energy, renewable energy going on for the past several years. A horse that doesn't always know the right path. A horse that needs to be bridled and marshaled and taught and trained and incentivized one way or the other, both on the mainland and in Hawaii. Can you take a moment, chef? I know you can do this. And give us a kind of status report of how clean energy is doing in this country and in Hawaii. Clean energy is suffering in Hawaii. It is actually suffering in the continental U.S. because of a lack of leadership and lack of political will in administering public policy. Hawaii, like it has been for many, many years, is kind of a microcosm of what's going on everywhere else. And it's kind of the face of things to come if we aren't careful. You know, Hawaii led the nation for many years and things like health care, education, we led it and voter turnout, if you recall. You couldn't get into a poll in the 1960s and 1970s without an appointment. Well, that's changed here. And unfortunately, it's not changed for the better in all cases. I'm still optimistic and I still love Hawaii and I think that the leadership in Hawaii is trying to do the right thing, but the circumstances have changed. We've had volatility in the energy sector now for half a century. That's a lot of volatility for a very long time. We had the oil shock in the 1970s. We had the oil collapse in the 1980s. We had carbon introduced as a factor in energy production. It changed the landscape of electricity and other kinds of production of energy on the continental U.S. and the world. We had nuclear, come, go, come and gone or export it. And so those things are tough to contend with. They're even tougher to contend with when you're sitting out here in the middle of the ocean, 2,500 miles from the nearest populated center in the world. Well, it's a transformational experience. There's so many options and possibilities out there, so many things, so many points we don't know. We have to invent and follow and create all by ourselves. This makes it hard. And if you allow the consensus management model, which in some ways is good, in some ways is not so good, to make these determinations, it's very difficult to get to where you think you want to go. So it's more difficult. We're isolated. It's transformational. And we have a goal, but we're not sure what follows. I want to make a point that I made to you on one of our programs where I was talking to you from Washington, D.C. Hawaii in abandoning a diversified fuels strategy. Letting go of LNG, letting go of distributed solar generation and wind generation has put itself back on the oil standard. Oil now is the only bridge we've got to an energy future. Why do you say that? I mean, how does that work? It's the only fuel that's in use in Hawaii today on a large scale. There are no competing sources of energy, electrical or transportation. Even though everybody thinks that we've got a big renewable sector, we've cut that off. We've cut that off with net metering and other restrictions on Oahu. We've cut it off by saying we're not going to use any other fuel, no coal, no LNG. The wind is under restraint. Geothermal is under restraint. We've cut everything off. The only unlimited source of energy for Hawaii today is oil. We have made that our bridge to the energy future by default. I don't think it's by design because I don't know of anyone in state, city government or business that really wants oil to be the Hawaii bridge to the energy future. If you look forward on that notion, that oil has by default been made into a bridge. Where does it go from here? We have this aspiration goal of reaching 100% by 2045. 2045 is not that far away. 2045 is around the corner. And the bridge is running right by 2045. It's not stopping there. This is the bridge to nowhere. Because what's happening is oil is getting worldwide. Oil is getting cheaper and cheaper and cheaper relative to other energy sources. That is a trend where unless we have enlightened leadership and enlightened support, educated support from our community, that trend will continue and we will be left perfectly okay. The lights will still be on. But we'll be burning oil in our generators and we'll have big central station generators instead of a reasonably well diversified source of energy. Then if something happens to disrupt the oil supply, as we talked about a couple of weeks ago, we've made ourselves highly vulnerable to the point where lives could be lost here. Yes, absolutely. Now compare that with the mainland. Last couple of years. How's the mainland been doing? Is there a parallel process, a parallel, you know, set of circumstances on the mainland? Continental US is doing a very effective job of killing off a lot of its solar and small scale wind and other small companies. The difference between the Continental US and Hawaii is the Continental US has a very diversified set of energy alternatives. Hydroelectric power, obviously still cold. Cold is a very widely used source of energy even though it's not popular. Natural gas. And then for transportation fuels, there's plenty of oil. Today, you are not limited in the oil sector by what you can find because we can find more than we can use. It's just the cost of production. Yeah, like this, the shale. It's shale. It's all kinds of other things that are making oil available today. North America, Canada, the United States and Mexico are virtually energy independent. And in some cases, they're net exporters of oil. Yeah. So it's not the Middle East that we're dependent on. It's not the Middle East. It's not South America. Venezuela used to be a big source of imported oil. They still are but it's all for logistical reasons. And it's keeping costs low. It has nothing to do with the availability of the resource itself. Dwelling on the mainland for a minute. I mean, how is the Trump administration likely to impact what you're talking about the set of circumstances on the mainland? Well, whether you have a political affinity for the president in his way of thinking or not, it is impactful. They're changing things. Sure. Now, whether they'll get it done, if you look at their record on healthcare and thus far on tax, it's anybody's guess and I'm not a policy wonka. I can't tell you what they're going to do. Though we have headwinds that are being made worse by the Trump administration in their desire to redevelop coal as a resource in their desire to develop more and more fossil fuel resources domestically the pipeline, for example, then I must tell you my colors are flying from the mast on that. I'm an advocate of the pipeline. It's a cleaner, safer and better way to move energy than any other that we have. Fewer people will be injured and killed with a pipeline running underground than a train or trucks running on the surface. But regardless of how you feel about it, the Trump administration is putting headwinds in the way of renewable energy. They're cutting off one of the more important ways we can diversify our energy sources. Now Angela Merkel did something interesting in Germany. Angela Merkel said no more nuclear power in Germany. So she financed her companies to go build the nuclear reactors in Poland so they can ship the electricity back across the board. Perfect. And that's a liberal and enlightened and progressive administration. They're bowing to the practicalities. And the reason I want to talk about leadership is because it's really difficult to get and expect political leadership in this current environment. I'm not suggesting it's impossible. But the days when John Kennedy would stand up there and say we are going to the moon and the country united behind him and a space industry developed and emerged, that's gone. It's different today. Yes, you have Elon Musk. Yes, you have Bezos and Amazon. You've got a lot of different things going on, but they're not the product of political leadership. It's a different kind of consensus building that's going on in the United States and probably worldwide. And that we have to recognize that in Hawaii and we have to work within it. John Burns led this state in developing its educational resources, its health care resources. The people who have followed him have done a great job by and large because the quality of life here is marvelous. And the current administration is enlightened. But political leadership is not something in high demand by the public anymore. This is really good. And I want to take a short break and come back. I'm going to talk about how you get leadership, how the public can speak on leadership, and how it can help us in energy and otherwise. That's Jeff Kissel. He's a trustee of the Energy Policy Research Foundation in Washington and in other various things he does. We'll be right back after this short break. Okay, welcome back to Think Tech. I'm here with Jeff Kissel. He's a trustee of the Energy Policy Research Foundation in Washington. He run our Energy in America show and he appears every now and now and then on Energy in America by Skype for the mainland. But today he's present in Honolulu. We're very happy to see him. We're talking about leadership and energy. And we just started, you know, the essence of that conversation just before the break. So, I mean, clearly we need we need leadership and energy because it's something new. It's transformational. It's difficult. It's complex. It's technological. It draws on and that there are special interests that would like perhaps not to see the diversification of renewable energy. So my question to you is, and it's national and local, my question is how in the 21st century now, not George Washington or Jefferson or Madison, but right now, do we achieve the kind of leadership we need to take us forward in this very complex environment? Well, we're seeing a trend beginning to emerge that is not from the political leadership. It's from the institutional leaders, the social leaders and the business leaders. Bill Gates with the Gates Foundation. Elon Musk with his innovative transportation solutions and other things. Jeff Bezos, who is his partner or competitor in space travel. These things are emerging there. It's a different kind of leadership that's emerging and we see a lot of community leadership here in Hawaii that is really important to pay attention to. The Co-op on Kauai, for an example, has not curtailed the production of solar energy into the grid. They take it all. They've got an old and less sophisticated system than almost any place in the United States. The issue of how do you do this is difficult to understand, but it's easy to execute. Everybody here needs to realize that they've got to become a soldier in the Army for diversified energy. And they've got to do things that allow us to broaden our energy alternatives, whether it's installing a solar water heater on your roof to take care of your hot watering needs, even if you can't put PV on the roof to sell into the grid, to using less energy, to moving to more energy-efficient offices and homes. Those are the things we've got to kind of think about as individuals because the government is just, it's changed in the last two or three generations. It's not the kind of government that led us through the Second World War that led us into the modern industrial age. It's a different government today. I'm not suggesting it's right or wrong. I'm suggesting it's different. We got to respond to it different. Yeah, absolutely. But how does the citizen, how can the citizen, let's assume the citizen agrees with you and me, and let's assume the citizen is well informed about renewable energy, about the technology, you know about about the effect of renewable energy on the society, on the community. And of course he can do energy efficiency at home, but Query, what else? I mean, does he have an obligation? Will it be beneficial for him to get involved in the political process and try to achieve some outcomes there? I think you and your colleagues in broadcasting are doing quite a lot for that. I think the individuals have got to pay attention to the things that they can affect most closely. Personal behavior, learning what is really accurate and what is myth about energy and energy solutions, and then educating the next generation, investing in education, in my opinion, will do more for energy in the long term than anything else we can do. And teaching our children how to do math, how to understand the physics. You know, I love Teslas. I think they're great cars. I also like Rolex watches. A Timex will tell the time. A Honda will get you where you're going as efficiently as a Tesla will. Sure. In Hawaii, unless you have a source of renewable energy to charge your electric car, your electric car is running on oil. Sure it is. You know, 87% or 82% of the fuel. You have to change the generation system in general in order to change the result. But you know, something you said, and I'd like to visit that for a moment, you were talking about these tech executives. And you can see that because you've been essentially what I would consider a tech executive yourself. And so you can see sort of across the street how they conduct themselves, how they relate to the community and to government. And you suggest something that I've been thinking about for a while, namely this. That when you have government in the one corner and you have industry in the other corner, there's relative power there. Government is a certain amount of power. And industry is a certain amount of power. I remember one Harvard Business School professor was out here, gave a talk at the Pacific Club. And one of the things she said that stuck in my brain was that if you have the metric of how much money government is pushing around the world as against how much money industry is pushing around the world, industry is much more influential because there's much more money being pushed around the world by industry than government. And in the 21st century that you described, way different than the time of the Constitution, way different than the Second World War, what you have is a group, an industry group of managers who may be better equipped to handle the development of energy in these transformational times. So I suggest to you that inherent in what you said, Jeff, is executives of important energy companies should be leading, they should be leading the day in energy development. What do you think? It would be nice if that could be accomplished overnight. It can't. Because in order to operate a business you need access to capital. In our system the people who control the capital will only give you that capital if you provide them with a return. And that's a very short term kind of a business model. Now the people who have overcome the capital need, Bezos, Musk, Gates, it's to some extent Buffett. Those guys have the luxury to go out and do these things. America has millions and millions and millions of small and medium-sized businesses. They can't do it because the people who control the capital that they need to earn their returns are not going to look that far down the road. Well-intentioned or not. It's all about funding, isn't it? It's all about having the capital. Money is power. Well, money and then influence in government. Government rights the regulations. Government had effectively written coal out of existence until President Trump was elected. Now whether coal will have a comeback or not is still uncertain. But they certainly got a lifeline when the administration changed because the regulations, the trend in the regulations changed. And government has a huge effect on things. You know incentives and disincentives, tax policy, all these things. I don't know people don't realize it has a huge effect on the conduct of the community. So for example if I taxed a gallon of gas for your car way high you'd be thinking more about an electric car. If I gave you a tax credit for buying an electric car that was real attractive you'd be thinking more about that. If I gave you a program for rooftop solar that was irresistible you would go there. But we're not doing that. We're not doing that and I'm not suggesting that that's the only solution. I ride the subway in New York City because it can't get around on the streets anymore because there are too many people with electric and conventional cars up there. But that's how I make a choice and I'm typical. I'm an average person making an average choice. There are hundreds and hundreds of other people on those same subways with me because it's crowded down there. Right? And it has nothing to do with the regulations on the subsidy for the the cars. So what we need to do is get people educated so that they can make the better choice. They can take two alternatives, examine them, and choose the better one for a lot of reasons. It doesn't have to agree with my philosophy either. You know some people are rooting for the Yankees and some people are rooting for the Dodgers. You know sometimes multiple choices are all good. Yeah, that's exactly right. Just side on the path. I think the worst result is inaction especially when you're trying to achieve a specific result. Right. Now our court system and I don't I don't want to take this off the topic too far. Our court system is far from perfect. But generally speaking 12 jurors come out nine times out of ten with the right decision. It's not that you can't criticize the court system and make it better. The energy system in Hawaii needs to be adjusted so that we don't shock this economy the next time a crisis occurs because there will be a crisis and there will be a next time. So we have to be resilient for sure. We have to diversify. Yeah, diversification is the magic word. But in terms of leadership there's three things we touched on here. Number one is government and that the citizen perhaps he has some influence I hope with government. That formula has changed that whole paradigm has changed in recent years but still the citizen at least theoretically has an obligation to participate and has some influence. That's one thing. Secondly business with large capital concentrations and senior executives who have some influence over their business and perhaps by interaction over other businesses they can and should participate. And thirdly as you mentioned and as everybody says we've got to educate the kids in school we got to educate the public right now so that they participate. So it's a three-way thing as far as I can see. But how would you roll that out? How would you make all that come together so it works and now? Well now is the problem. We have to either decide we're going to diversify our energy sources or decide that we're going to abandon virtually all of our strategies and stay on oil because we need money in this economy. We can't live in this economy paying a high price for energy a high price for health care and a high price for the basics of life. In order to do that we need to either make a commitment do what they've done on kawaii it's right here in this state provide for a diversified energy strategy based on renewables or decide we're not going to do that and just do the cheapest next alternative. We're not going to change the carbon balance of the United of the earth. No, we're much too small for that. We have no influence on it. So fine you want cheap electricity bring in the coal from Australia and other places burn it and and you know do it lawfully but make the cheapest electricity you possibly can. Don't worry about a thing. Well I don't agree with that philosophy. I think that's that's very short-sighted. We've got to move in the direction that protects us from the extreme shock. The only way I know to do that is diversify and understand the cost of diversification. Well it takes a little three though I think. And it just strikes me that in order to do that we have to make legal changes so the legal community has to be on board the courts the the PUC and the guys who write the statutes in the legislature. And the guys who administer them who issue the building permits there are thousands of applications for really good renewable and and non petroleum based energy solutions sitting stacked up in building departments all over this state and unfortunately others. We need to clear that log jam. That's really important. It's a matter of changing the way the community thinks and changing the priorities so everybody sees the need for diversification the need for renewables the need for resilience and I don't think we have that now. The public is not refined on its view either here or on the mainland. They got to realize that there's not much more we can do to the car. There's not much more we can do to it so we need to get out of it. Yeah. And and we need to get away from these high consumption inefficient methods of using energy for everything we're doing. Industry has done that for the last 30 years. Factories today operate on about a fifth as much energy to do the same amount of work as they used to do. And we can't cars put out one tenth as much pollution as they used to. They're they're much more efficient. The next phase is to get out of the next phase is to get on to a way of life where either you're living and working in a closer proximity or you're using some kind of conveyance that gets you where you're going in a much more efficient way than we're doing in a car. Well what I get out of all of this is we have to make these decisions collectively in order to do that at the base of it we have to have community consciousness over these basic principles you've articulated. That's right and it takes an educated population to do that a very sophisticated and educated population. Well we're working to that chef. Well congratulations on your part in doing it you're doing a great job. And yours. Thank you so much for coming around. Good to see you. Thank you. So Steve the energy policy research foundation. Thanks to you. Aloha.