 Okay, we're back. We're live. I'm Jay Fidel. It's the 3 o'clock block here on a given Wednesday, Energy Wednesday. We have a number of energy shows on Wednesday. And today I'm delighted, as always, to be in touch with Lou Pulirisi. He's the CEO of E-PRINC, an energy think tank in Washington, D.C., with a global view. Welcome back to the show, Lou. Nice to always see you. And it's an hour earlier this time for us. Of course, it doesn't change in Honolulu, but it does here. Yeah, the time doesn't change, and the seasons don't change either. That can really get on your nerves. Anyway, we've had an interesting week. The president, number 45, he came through here, spent one day jamming traffic in every direction, went on to Asia, and did a whole bunch of things in Asia that were reported back and then returned here for refueling yesterday, and I presume he's back in Washington now after that trip is over, having to deal with whatever's going on with him in Congress. But anyway, you know, I would like to talk with you today about the trip and about the global implications of what he said and did on the trip as far as the U.S. is concerned about the economy and about our diplomatic position in the world. So what are your impressions of the trip, the countries he visited, the conversations he had in Asia? So I think if you think of the visit in a kind of strategic context, I think the main purpose of his visit, although with Trump, he always gets sidelined with whatever comes up, and a lot of the trade issues did get featured. But I think his fundamental purpose of the trip was to reinforce his view and that there is no daylight between the U.S. and Japan on the strategic threat of North Korea. I mean, and that there is a strong cooperative effort with South Korea, both to kind of confront long-term Chinese power in the region, but also help push a resolution and or bolster the defense against any threat from North Korea. However, you know, these are kind of strategic concerns and we can talk to we can talk about them. I have some views about them, but I thought was interesting is that many of your listeners might not know some of the more concrete things that came out of the visit, particularly with Japan on the energy side. And in the visit with Japan, there was a sort of general agreement and an outline of four areas that will be managed by Vice President Pence and the minister of economics, trade and industry are called media in Japan, Minister Seiko. And these two gentlemen after the meeting with President Trump and Prime Minister Abe agreed to do four things cooperatively that I think for us in the energy sector, so to speak, found very, very interesting. The first was they were going to engage in a very extensive cooperation on high efficiency coal-fired technology and power plants, so high efficiency coal, with even some opportunity of exports of coal from the US. The second item they agreed to work on together is a systematic program to build out the Asian LNG market to expand opportunities for demand, to look at measures that they could undertake together, the US and Japan, the US to supply higher volumes of natural gas in the region, for the Asian consumers, particularly outside of the traditional big consumers of Japan, Taiwan and South Korea. But you know, Vietnam, Indonesia, the archipelago countries, the Philippines, Thailand, Malaysia, what could they do India and China, by the way? What could they do with their power production and infrastructure to improve local air pollution? This was a big feature. They didn't talk about climate so much, but they did talk about cleaning up the environment with more use of natural gas. It's a very complicated problem, but it is something that both countries agreed they would pursue together. We might get into some of the specifics. A third area is nuclear power. As you know, the Japanese had this terrible accident with Fukushima. More sound analysis shows us that Fukushima was really not a nuclear problem. It was a problem of devastation from a tidal wave. The actual radiation exposure from Fukushima is not substantial. I mean, you can't really see anybody who's had a lethal dose. All of the deaths from Fukushima really were from the national calamity of the tragedy of the tidal wave. It was caused by an earthquake, not climate, like many people in Washington did. Then the fourth area, which is very interesting, was the cooperative measures between the US and Japan to build out energy infrastructure in Asia, including transportation, which isn't, if you think about it, a counterweight to China's one road, one belt that they have been offering other countries. I would like to point out one thing that people don't talk about. If you've read the press reports this week, in India, the local air pollution, I'm not talking about climate. I'm just talking about particulates or smog, which, you know, a combination of what people used to think was smog, I mean, smoke and fog, you know, smog, which is mostly particulate from automobiles and power plants and bad management of their whole airship has made it impossible. Some airlines like United announced that it was not flying to Delhi for a few days because it's too dangerous to land. In terms of the aircraft experience or the breathing experience? It's because of the visibility. Interesting. It's too risky. And breathing is also bad. Many people have been required to stay indoors. They've banned all kinds of industrial and transportation activities. So I might emphasize again that if you go to the climate talks, people keep talking about the massive advances that are happening in India and China. And, you know, from just here at the ground level, if you can't clean the air up in your capital city, you're not a leader in anything having to do with the environment. People need to get that out of their heads. I mean, I just think that it's a ridiculous notion that, you know, you can maybe be really good at making solar panels. There's a lot more to cleaning the atmosphere up than making solar panels. You're heard it here on ThinkTech. Well, you know, some things you've mentioned. These things are part of the and we can go to more detail some of them. Some things you mentioned really, you know, get me to think about the general purposes of his trip. I mean, on the one hand, I thought going forward in an expectation that he would try to sell things on the trip. I thought, for example, he would want to sell weapons on the trip. And indeed, he did. He sold hundreds of millions of dollars, did I say millions, hundreds of billions of dollars of weapons to North Korea in order to deal with the North Korean issue. And so that was good for the balance of payments. That was good for business. That was good for, you know, the defense suppliers from the US. The other thing that he, you know, and this clicks on what you were saying is building out infrastructure, energy infrastructure around Asia. That's also business. And that helps the balance of payments as well. I think it's important to point out there that that initiative has quite a bit in it for the Japanese. Because the Japanese bring to the table, actually, they bring a quite, Japan hasn't, it's hard for people to understand this, but Japan has given their history and the war. They have growing influence and respect in some parts of South Asia. And it's, and you can see it when you, when you attend meetings and things. They earn a very advanced economy. They have modern advanced technology. They have a huge amount of experience, even to the point of these floating storage, regas units and combined power plants that can be moved in. So I think it was a clever marriage, both for the US and Japan because the US as a major exporter of natural gas over the next few years. And by the way, we are now a major exporter of crude oil. A lot of it going to Asia. We're exporting over a million and a half barrels a day of crude oil to the world market. This has a strategic effect in Asia. Well, I recall you and I had a discussion just a few weeks ago about a conference that you had attended in Japan for LNG and that you suspected or you had reason to believe that the US and this administration was in favor of making deals with and through Japan to develop LNG as a market for American LNG at this conference. And I guess that's all coming true, isn't it? He was... It is coming true. It's a long road ahead. There's a lot of hard work. They're going to have to engage the international financial institutions like the International Finance Corporation of the World Bank, the World Bank, the Asian Development Bank, all these institutions, the overseas, the US Overseas, Private Investment Corporation, XIN Bank, the Trade Development Assistance, all these things, many of which were quite, let's say, many of these which were treated quite negatively during the campaign are now emerging as instruments of trade policy. I think what's really interesting, too, is his continuing focus on coal, clean coal, as you will, but he's pandering to the coal interests in this country, both in the south and in the west. And I guess he's talking coal in this trip to Asia. And the whole notion of coal really inconsistent with the environmental perception of things and the renewables perception of things. We have a local boy, Manny Menendez used to be in business development in the city and county of Honolulu, who is in China doing clean coal. And he's acting as a consultant and a partner in various deals around China to develop clean coal. And I guess, you know, Trump was was focusing on that because he likes coal in general. But but is that going to take traction? Because the Chinese are probably going to move off coal, aren't they? The Chinese are looking for renewables. Here's another thing. The Chinese have committed to reducing their greenhouse gas emissions by 2030. They're going to be cash, they're gonna begin to come down. And actually, today, there's some reports they think they can do it earlier than 2030. The US, which was recently pill read at the bond conference actually had even though world emissions rose in 2016 or 70 the last year they measured it. The US emissions continue to decline ours declined by about 2%. And in the US, of course, cheap natural gas. There might be some things the administration can do to prevent a huge collapse in the coal industry. But it's not likely to see a major growth. I just I would predict it will not grow substantially. It's ready to climb may be somewhat lower. And as long as natural gas remains cheap. I think it's a highly competitive. Now, in Asia, India and China are continuing to build coal plant. In addition, not so much Asia, but Africa, we have still in the world, we have 7.5 billion people in the world. We have 1.5 or 1.3 depends who use numbers years of people living on the planet who have no access to electricity. And these people cannot be they will not be served by wind power or solar power, which is both intermittent and unpredictable, right? They're going to have to have some kind of baseload, reliable, cheap power. Are you are you going to say that after we find out this technology, where you're going to have solar and a battery all connected in a in a very efficient little package, you can put on your roof in the third world? I'll be the first person to eat my words. But you know, they've been working on this battery since 1900. Watch for developments from Hawaii, Lou. Anyway, what I you know what I know, just remember, inexhaustible doesn't mean inexpensive. Truly, that's true. You heard it. You heard that also on ThinkTech. Been saying that for a while. But but let me let me let me go to the question of renewables, you know, when when, you know, the press reported on all his various statements, initiatives and suggestions. While he was in Asia, you didn't hear much about how the United States was going to be involved in renewables in Asia, or to incentivize develop trade in renewables. Matter of fact, what we have here now is a tariff against or, you know, solar panels and the like coming from China. So where where is he these days in terms of international dealings and policies and, you know, diplomatic connections on renewables going either way? You know, I think internationally, the best, and this came out in the bond conference a bit, but the best strategy between the US and the major powers in Asia and Europe is for combined research. We're not going to provide a production tax credit so China can put in more renewables again. And neither was Obama. So that's forget about that. It's very interesting in the tax bill, by the way, they right now, you know, we have a very big issue in the US. We have something called the production tax credit for the for the building of windmill, right? Wind valve. And when you use that the way that production tax credit works is it's, I think 2.3 cents a megawatt hour, something like that, whatever. And in the tax bill, they decide one of the writers of the text said, let's lower that from 2.3 cents to 1.5 cents, which by the way, over 10 years is worth $10 billion. Just that. So you can see how massive that subsidy is. And one of the distortions on the subsidy with wind, because everyone keeps saying it's very competitive. Of course, it's competitive that the government builds it, and then pays you to run it. But that's really not a long term strategy. And so what happens is when these independent systems operator, regional, you know, operators who combine power across big regions, when they when you bid for power, and you bid into the grid, you can bid a negative number. And so one of the issues we talked about this last week, I don't think it's going away is if you have a lot of renewables that are heavily subsidized something we call variable renewable energy, which is both unpredictable and intermittent. And you don't have a good system that addresses any potential problems to the grid, or to the resiliency of base power, you have, you know, you have a real kind of policy issue on how to fix that problem. Yeah, I'm yeah. And we talk about that in Hawaii all the time. Let me let me take a short break, Lou. We come back. I'd like to track on one thing you mentioned. That's that's the bond talks in Germany. And I'd like to see how that compares and maybe supports or conflicts with statements made in in his trip to Asia. And I'd like to also ask you when we come back, you know how the US looks these days, and given those statements and given the discussions in bond, that's Lou Cuirisi. He's the CEO of E prank and energy policy. Think Tank in Washington joins us by Skype will be right back after this break. This is think tech Hawaii raising public awareness. Sounds like scuba divers are the four man's astronaut. We believe that to be true. We say forget the moment. 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On behalf of the community enriched by think tech Hawaii's 30 plus weekly shows Mahalo for your generosity. Okay, we're back with Lou Puyriese. He's the CEO of E prank, which is an energy policy research organization in Washington DC joins us by Skype today and talking about some of the international experiences we've had in energy, including remarks and deals and suggestions that Trump made when he was in Asia. But also we've had some talk, you know, about the conference in Bonn, Germany. And so this all goes to the question of how the world sees us these days. I mean, I'm sure they're not particularly happy in Asia about our backing out of the TPP. They're not particularly happy in Europe about our failure to go along with the Paris Accord. And so people get a different impression, you know, perhaps they think we're dropping our position in global affairs and hegemony all around in not only in Asia, but in Europe. And I guess I'd like to know from you Lou, I mean, what happened in Bonn that might that might contribute to our perception of their feeling about the United States position in world energy. So one of the things that Trump administration did in Bob is they hosted a panel discussion on fossil fuels and on the importance of fossil fuels. Now you can imagine with the kind of, let's say, green tinge to all the participants at Bob. Sure. What a horrifying event this was for everybody. And to host the panel. Such a horrifying event. We actually created the panel. This was an expression of national policy. It created this panel. And they, you know, so the whole thing is it's pro-renewable. And then we held a panel, the US officials on and I've got it was led by White House guy, David Banks, who came from Edison Electric Institute as a system to the president and I think special assistant to the president, National Economic Council. And I think Trig Talley from the State Department, I have my notes here, so excuse me. And I think that the what was interesting about it is that I think one of the US, the US delegation wanted to show that even in any kind of scheme to go to 2%, I mean to 2 degrees, to halt at 2 degrees, whatever the number is now, that there's going to be a heavy reliance on fossil fuels and that we should have a lot of research and interaction to figure how to use them efficiently. Or how to use them in a more benign way of research. And I think, you know, it's interesting everybody going to beat up on these guys, a group of protesters came in and sang a song and stopped their feet. But no one talked about the fact that Germany, which has, you know, a holier than now environmental patina on everything they do, as they began to shut down their nuclear power plants, which, you know, Angela Merkel has decided to do. The evidence is now coming forward that German electricity prices have risen to, you know, near Hawaii levels and their emissions have continued to increase and their use of coal has shot up to the and by the way, in Germany, they do this long wall mining. It's very close to the surface and it's lignite. It's a really junk coal. Okay. It's dirty. It's hard as low BTU value. And this is now so important in Germany to use more of this coal that they're moving a whole village. They bought everyone's house and they're going to re position everybody in a new village they've created in the rural valley so that they can dig up this coal. So it's easy to pick on the U. S. I get that because we, you know, we probably say a lot of things we shouldn't say, but it really is important at some point to compare performance. And as I said earlier, the U. S. Emissions in the last year have declined by 2%. Yes, it's not as much as people would like. But what do you attribute that to? I think our emissions are declining for two reasons. One is we're getting very efficient. Efficiency, our demographics, we're not growing as fast as we used to. The way we're growing is not quite requiring a massive increase in new power production. And cheap natural gas continues to drive up coal. All those features are driving down our emission. But you know, I mean, the U. S. Is whether we're driving them down fast enough. So, yes, it could be there's an irony there, you know, with Germany. And interesting what happens if you give up nuclear, then you know you wind up using more coal. But what I get out of this is that the U. S. Reputation, it's a matter of perception in the eye of the beholder, has diminished. It's diminished over energy, it's diminished over foreign policy in general. It's diminished over our world leadership in so many ways. I think, you know, I think you have to be careful to not see that from either a narrow climate lands or Eurocentric lands. For example, I would say in the Middle East, the, you know, the Sunni Shiite issue, which the U. S. has now really reinforced its relationship with Saudi Arabia and the Gulf States. And it's become a lot, you know, more of a counterweight against our the rapid decline in ISIS territory. I don't think if you went and talked to the Saudis or the Jordanians or the Israelis or all the Gulf Emirates that you would get that view. They are very much welcome. But it aside whether it's good policy or not for a second, I'm just saying, they very much welcome trans leadership in this thing. And they believe it was sort of that Obama went overboard trying to be even-handed when they felt, you know, the, you know, whether it wasn't a moral equivalency. Both sides have a lot of answers to on this issue. So I would say in the Middle East that's, that's not the case. That's interesting. I think what Prime Minister Abe, yeah, Trump presents him with lots of challenges. But I think he's, you know, Abe's an old line LDP politician. He's consolidated his power in Japan enormously now. And I think he feels he can deal with Trump. And that Trump will, you know, will step in and be an important, close and essential ally in confronting both China and North Korea. So I would say, yeah, in Europe, look, I have a friend who's at the Oxford Institute of Energy Study. And, you know, his view is if you're a politician in Europe and you just raise the question, you say, for example, well, maybe we should just examine our climate policy to see if we can do it more efficiently. Forget it. You're not going to get elected. If you just say that there should be any review of climate policy, or that maybe we should weigh some costs and some benefits, or that we should be nervous that our electricity prices are getting due high. If you say that you're, you're dead, you're out. And so I think for Trump, he doesn't really care what these people think of him. He thinks they're wrong. That seems, that seems clear. I mean, you know, one last point I'd like to cover with you. I do think here's what, to sort of make your point, there used to be something called the major economies forum. And that was when the EU, Canada, China would get together periodically or on the sides. And the US delegation said that they wanted to start this up with looking at more advanced clean technologies, strategies. But I think, I think what the Europeans have said is that we already have that forum with China, the EU and Canada. So you don't really need to create leadership in that forum. You could just come to our forum. But so yeah, there is a problem on how to engage these folks. And that's part of the problem for pulling out of the Paris Accord. On the other hand, the Paris Accord, as agreed to, was going to have no effect on temperature, according to the IPC. So you had to believe that the Paris Accord was going to lead to something more stringent. And there is a view among some analysts that well, you know, this is a kind of nice shindig. We get to go around the world and do all this stuff. But we're not really doing anything serious. I think it's somewhere in between. I think the biggest payoff is going to be from research and development, not from these emission controls. Well, thank you, Lou. I mean, we're at a time. Gee, this is such an interesting conversation. I would like to plan to continue it two weeks hence. And whatever happens, whatever else happens in the interim with this administration or with energy in the world, you know, we named the show Energy in America. Maybe we should call it something about energy in America and beyond America. I promise you we'll have something interesting in two weeks. I know you will. Thank you so much, Lou Pugirisi, the CEO of Eprig, a think tank in Energy in Washington. Aloha. We'll see you soon. Take care. Thanks.