 So, the title of our conversation around the subject, which will be the last panel of the day. There will be two shorter, quick segments after this, but this is the last full-fledged conversation. It's entitled, The Visible Hand, Government's Role in Powering the Future. And to moderate this discussion, we have David Bielow, who's the Environment and Energy Editor at Scientific American. Thanks, David, and it's all yours. The green light is the lamp. You're welcome. So I'll assume that you can hear me. We are here to talk about the government. There's been a real kind of whipsaw effect throughout the day here. Government is the enemy. Government is the worst thing that ever happened, and government is the solution. Just to build off what the gentleman from Deutsche Bank said about Brazilian sugar came, I believe there were something like 30 years of government subsidies to make that globally competitive, just as a point of contention. So we have a great panel today. On my left is Steve Kuhnen, who's the Undersecretary for Science at the U.S. Department of Energy, previously served at the oil major you all know and love, BP as their Chief Scientist. To his left is Michael Levi, Director of the Program on Energy Security and Climate Change at the Council on Foreign Relations. His latest book, I believe, is called On Nuclear Terrorism. We're not going to talk about that today, sadly. And on his left is Lisa Marganelli, Director of the Energy Policy Initiative here at the New America Foundation and author of the excellent book Oil on the Brain. It is not a neuroscience title. So without further ado, given the fact that the U.S., to keep things U.S. centric, it's something like 83% of its energy from fossil fuels. Now we've got this great shale gas revolution. And we heard Bruce Everett this morning. Do we need anything else? And if we do, what is government's role? I'll start here and move down the line. So let me just say, by a bit of an advertisement, I come off having spent roughly eight months thinking seriously about what does the Department of Energy do in energy. And we put out a report about two weeks ago with the Secretary, John Holdren and myself, called the Quadrennial Technology Review. It's about 170 pages and it's up on the web, energy.gov.qtr, and everything I'll say in the next hour or so. You can find in much more detail in that document, so I would urge you to read it. What can we do? I think it starts the government's role with a clear framing and understanding of what problem are we trying to solve? Are you trying to solve dependence on fossil fuels? Trying to solve greenhouse gases? Are you trying to solve the multiple problems that stem from oil? You're trying to solve U.S. competitiveness. They're all different. They have different responses to different technology moves. So I think, first of all, a clear framing and understanding of what it is we're trying to do. So what are we trying to do? We are spending a lot of money on... Well, we are spending a lot and a little. I mean, the energy research budget of the Department of Energy is $3 billion. And I can tell you, having sat in the private sector, that's not chicken feed, but it's not an outrageous amount either. So more money, of course, would help. But what we are trying to do, I think, is deal with the oil problem, which has dimensions of balance of payments, price volatility, jobs, physical insecurity, and greenhouse gases. And again, they're all different dimensions of the problem. Second, trying to deal with U.S. competitiveness, restore energy technology manufacturing to this country. And the third, deal with environmental problems, most problematically greenhouse gases, but also water is a big deal as we think about producing energy. As to exactly what we'll do, I'll stop talking for a minute, but there's a lot more to say and turn it over to some of my co-pandals. Mike's going to tell us exactly what to do. Exactly what to do. Look, I think Steve lays out some of the basic areas that U.S. energy policy needs to focus on. The market can do all sorts of fantastic things, but it can't do everything. And there are two basic areas that stand out as exceptions. One is environment, we're large in climate change in particular. And the other I would take back to the relationship between energy and particularly high and volatile oil prices in the U.S. economy. Because I think a lot of the security problems actually stem from that, and you can reduce a lot of them to that at its root. U.S. freedom of action is constrained because of the economic consequences of doing particular things in the world, so on and so forth. I'm not going to lay out in detail what the U.S. government should do on these things, but let me just give a sort of way that I like to think about this, and we were talking about this a bit before. I mean, you have to start by asking what the problems are that you're trying to solve, and this is environment, economic vulnerability, and so on. Then you have to actually stop yourself and ask whether these are really energy problems. So for example, we have a jobs problem right now that a lot of people seem to have decided as an energy problem, and they look for energy solutions. If it's not actually an energy problem, and it's a separate problem to do with other things in the economy, then you shouldn't be steering your energy policy toward trying to fix it. And the third piece is, once you've identified problems, you have to ask yourself whether there are decent solutions, policy solutions available. Not every problem has a solution. Some problems do have solutions, others don't. I think once you've answered those three questions, you let yourself focus on the right set of measures and increase your odds of getting them right. So it seems like, though, that we have a pretty good sense of what the policy options that would be right would be. If we do have an environmental problem, we would like to put a price on carbon. That also seems to be utterly infeasible for political reasons. So how do we surmount that particular challenge? So I think you go after the problems that you can get consensus on and thereby make some progress on the carbon problem. So transportation, the oil problem, hits all three dimensions, namely energy security, U.S. competitiveness, and greenhouse gases. And if you can get political consensus on the oil problem, we'll talk about what to do about it in a minute, then I think you can make progress on those things. And what about the impact on kind of everyday consumers? I know this is a big... Well, you know, it's interesting that $3 billion that we spend on energy research at the DOE. That's two days' worth of gasoline in the United States. That's what consumers put out for two days' worth of gasoline. And this year, we'll be spending $500 billion on gasoline alone. And then we've got diesel and fuel oils and other things. So we've got this massive outflow of money, and that really complicates the politics of the oil. And it also kind of reveals something that's come up again and again today that I just think is so interesting is we're very concerned about price, but part of the reason we're so concerned about price is we don't have any energy policy. We have a policy that runs on price, and that's not a philosophy. We don't have a guide to making decisions other than price. So what we do is we subsidize the oil on the one side, and we subsidize fuels, and we throw subsidies at ethanol, and we throw a lot of things on the supply side, including deals with Azerbaijan, and all sorts of complicated things that can't be exactly quantified in dollars. We throw them into the supply side, and then we say, well, these electric cars, they're not competing. And we haven't, would they ever have had a choice because we're so concerned with price, and we're so concerned with tinkering with price, and then at the same time, we create this sort of playing field where it's very hard for the new technologies to come in. And so in some ways, what I kind of take away from this day so far, probably gonna get educated during the rest of this discussion, is that we're kind of starting to get towards the point of coming up with a philosophy, an actual philosophy of energy, and it's gonna take a lot of sifting. And right now, it sort of boils down to drill, baby drill, and put a carbon tax on. And neither of those are viable practically, sorry. Neither of those are really viable practically. I think a carbon price is practical, but the problem is, is that when American consumers are spending $500 billion a year, or $1.5 billion a day, and they're having a very hard time cutting back, they cannot imagine a carbon price. And so if you have to have a price of fuel that's gonna cause them pain, no one's ever gonna support it. Well, is a high oil price a good thing in that it incentivizes people to drive less and reduce our oil demand? Or is it a bad thing because it's wrecking the economy, et cetera, et cetera? Well, a high market price for oil and absent whatever you wanna add on top of it in taxes is a bad thing. I mean, it creates incentives to make it a less bad thing, but you have to put it in that framework, right? If you would frankly, everything else being equal, you'd much rather it be cheaper. Now you need to worry about a couple other things. There are externalities from a low price of well, it means we don't prepare for higher prices. So prices are volatile, we get into trouble. It means that we don't properly deal with climate change. And that's where government can step in to change the prices or to create other incentives. I think we like to focus on prices because they are in theory, the economically optimal way of adjusting things. They may not be the most politically feasible. So you need to look, I think in those two parts, people tend to mash them together. I mean, to come back to Lisa's point, if government is taking the steps to make, let's say, gasoline more expensive by charging more for it, it also has additional resources to help people who are vulnerable deal with the additional cost. So it's not only the magnitude of the price, but it's volatility, of course, that plays havoc. And that volatility will is inescapable as long as we rely on a liquid hydrocarbon that's fungible with oil. If we produce more domestically, which is feasible, it's not a solution to the problem. We can't produce enough to swing the global market and whatever we produce is gonna get set at the global price anyway. So you hear a lot of political discussion about energy independence, nonsense, okay? Absolute nonsense. The example I like to use is the United Kingdom in the year 2000. There were fuel riots that year. Michael, I don't know if you were there then or not. We intersected, okay, before my time too. But anyway, at that time, the price went up of petrol and diesel got all the truckers upset and so on. But in fact, the UK was a net exporter of oil at the time. And so becoming energy independent does not make us price independent. The way we will get to be price independent, absent government intervention, and we don't have the money to do it in the government, is by going to a vehicle fuel that's not fungible with oil. And that means not ethanol, not advanced gasoline like biofuels, but either natural gas or hydrogen or electricity. And of course, I have my opinions about those, but this is not the, well. Please share it. Okay, so. Thank you, never thought you'd ask. Look, I think if you project out 20 or 30 years, probably the price of all three of those alternatives is within the uncertainty of your projections. But as we've thought through it in the Department of Energy, electricity from the grid has a clear advantage in two senses. One is you can do it progressively. You can march down from internal combustion engine to hybrid to plug-in hybrid to all electric vehicles, at a pace determined by how fast batteries get better. The second is the infrastructure integrates gracefully. We've got the ability to plug-in at home already, and put some charging stations out if you want, though they don't have much impact. And you can do it gradually. A volt when you plug it in a Chevy Volt is about the same as a hairdryer. And so it's not a great stress on the grid to start with. And so we think the natural path will be progressive electrification driven by the grid. But given the, I'm sorry, go ahead, Mike. No, no, let me pick up quickly on this volatility point. Is I agree with Steve that the value of domestic production is often overstated in protecting countries and consumers from volatility, but it's not zero, right? There are certain elements, and it's not all that close to zero, right? There's certain elements of volatility that hurt you regardless of where you buy oil from because you transfer money from people who tend to spend it to people who don't, let's say oil companies. And there are certain elements, for example, balance of payments, where having more domestic production, buying things from yourself, means that you are more insulated. So it depends on which, in terms of trade as well. And the sort of economic shock from having to buy more expensive stuff from abroad while the value of the stuff you're selling doesn't go up actually is a real thing. So I think you need to separate those pieces. The other thing I just wanted to sort of observe, we've been talking about, it's interesting because we've been talking about very high level policies right now. It's incentive to use less oil, to use different fuels and so on. And that's one market failure, right? We don't have the right incentives to use these things. But there's another big market failure, which is that even if in the long run, those incentives are there, the right capacity to innovate, to develop technologies, to commercialize those technologies isn't there. This is what Steve spends all this time trying to fix. But those aren't, they're an even if you have the right carbon price or the right price for gasoline and so on, it doesn't mean that the technologies would materialize. So that's another market failure we need to be figuring out how to solve. Lisa, I think you were gonna say something. Oh, well, I'm very curious about what you're saying about basically thinking defensively about non-fungible fuels. So, because this is actually, I hadn't actually heard that sort of argument against biofuels, which is what I take it to be. And that there would be, if security is really an issue for us, then this is the way is forward is through electrification and natural gas. Yeah, so if you could produce biofuels at less than the market price, you'd be a fool to sell them at anything. Oh, I understand that. Conversely, okay. So we think that there's a role for biofuels, but it's in the diesel like biofuels to do the greenhouse gas thing for the heavy duty sector, as opposed to the passenger cars where we can see demand going down. So you're sort of talking then about a much more active government role in determining who gets what kind of car or how the market starts to behave. Well, the first thing that we did was to crank up the cafe standards. And you can actually get a long way with a conventional internal combustion engine pay a couple thousand more per car and get the mileage up significantly. One of the other things just by the buy because we measure fuel economy in miles per gallon as opposed to the sensible gallons per mile, the first few miles per gallon matter the most. And so going from 30 to 50 miles a gallon saves as much as going from 50 to 150 miles a gallon. So I think you can get a long way just with conventional engines and ordinary oil. So, but I wonder what the political reaction will be of people as they say, well, in some ways we do have a segmented market because a lot of states kind of prohibit cars with diesel engines and it's kind of been pushed over more towards trucks. But I wonder, I guess what I've been kind of fretting about as I think about this issue of coming up with an energy policy is we have had this kind of, not a real discussion about this for years and years. And we have all these different people now jockeying in the political arena, looking for attention and also looking for money from the government and we're kind of coming out of this phase. And it seems to me that people are becoming somewhat suspicious of green energy and there may be sort of limits to political tolerance for some of what people want. And there's also the government hostility that has been sort of noted. There's this alternate that's like sort of deep interest in government and deep hostility. And I wonder how that's gonna work out. Are people gonna be okay with this change in the cars if it's not completely transparent to them? Let me pick up on that quickly. I sympathize with it but at the same time I think that the public policy incentives and individual incentives might be more aligned than we're onto here. If I'm an individual and I'm facing a world where I don't seem to be able to figure out whether gas is gonna cost $2 or $5 in a year, I'm going to be interested, more interested, in the vehicle whose cost of operation is the least sensitive to the price of gasoline. Now, I'm not gonna start with the assumption the American people know that something they can do with biofuels is going to be more sensitive than something they can do with electricity. But that's an information gap that you can attempt to solve. I think if people knew that they could sort of get out of this business of worrying about what the price of gas will be next year, demand for electrification might increase substantially. So there may be some alignment. You know, there are, when we think about technology change and I assume this came up earlier in the day but I'll give you my own spin on it, there are certain structural factors about energy that just make it extraordinarily slow to change. It's got to do with the long life and high capital cost of assets. It's got to do with the need to interoperability of various parts of the system. It's got to do with the fact that fuels and electrons are commodities with thin margins inducing technological conservatism. So the folks who run the energy system, whether it's the oil companies, the cars, the power companies and so on, they're not dumb. They're just trying to optimize the investment on the capital. Well, when you look at energy transitions of the past, you know, according to Vaslav Smil, the preeminent thinker on this, it's 50 plus years, right? Is there anything that government can do to speed energy transitions? That seems to be what government is undertaking to do. How are you going to do it? Or how should government do it? Government can do anything it wants as long as it's got the political and financial capital and we don't have much of either of these days, right? To do that. I think it is in the end. Subsidies are going away. Subsidies are going away, yeah, yeah, of course. What can government do? I think we set the regulatory framework. We try to push the standards, commensurate with the technology toward the goals we want, whether it's reduction in oil use or greenhouse gases or whatever. And then the second is we fund pre-competitive research. Government does that very well. We convene players, the Department of Energy has a big role in convening different parts of the power sector, the whole biofuels chain. We also set the agenda. When the Department of Energy says hydrogen, everybody marches in that direction, we say batteries that direction, say nuclear, et cetera, et cetera. So we have an agenda setting capability. We've seen that. We can argue whether it's been exercised promiscuously or not. I believe it was called flings earlier in the day. Very good, all right. And then we do, and we need to do them, but I think with greater care, we do big demos. And whether it's a billion dollars for a CCS planter, a couple hundred million for a small modular reactor, I mean, we do those as well. And the Department of Energy engages in all three of those kinds of activities. Is that enough? I would say that we need to, one of the things that's happening is we're getting these newer, much more efficient cars into the system, partly through CAFE. Everything that's coming out now is much more efficient than it used to be, especially if it's in the sort of subcompact and smaller size, very efficient. And we're obviously moving in that direction. And the interesting thing when you look at the electric cars that are coming into the market and you talk to people who are using them, for one thing they sound like Woody Allen characters because I was at a conference and there were two guys walking behind me talking very intensely about range anxiety, which I'd just, I'd never heard it outside the use of technicians. But basically these things are becoming quite a bit more mainstream, even to the people who are designing plug-in Priuses. And we're ending up with kind of an upper tier of efficiency for U.S. drivers who have a lot more money at their disposal. And then we have a lot of people in, I would say the working class or the lower middle class who are driving the least efficient cars in the market. Many of them are old SUVs which sell at a very, very low price if you're buying a car for cash or if you are dependent upon really expensive credit. And so we're sort of moving to this system of two tiers where one tier gets to choose what kind of car and what kind of mileage they're getting and the other tier is sort of at a drift in the credit markets going for whatever car is available and then trying to drive that car further and further to the jobs that are available. And in interviewing people about this, I mean this, this just, it's distressing. You know, when Paul Sankey was up here and he was talking about the pain that's gonna cause people to change their behavior, what he's actually talking about is a lot of upset. He's talking about people who can't pay their bills. He's talking about people whose cars break and they can no longer make it to work. He's talking about, especially at that lower, the lower end, just a big mush. And I think what has to happen is that the government needs to take kind of a proactive role in getting people out of these old cars. We need like a cash for clunkers or a credit for Priuses or something. Not necessarily Priuses, it could be actually, it could easily be any kind of higher, more efficient car. We have that, essentially. I mean, we have the rebates for electric vehicles. I'm not saying they're within reach, but I'm saying that is the attempt that the government has made. I mean, it takes us to another set of innovations that we need, we talk about innovation in terms of technology. We also need innovation in the financial space. Innovation has become a four-letter word in the financial space, but it's hugely important here whether it is innovation in financing for energy-efficient homes or innovation in financing for people to get different vehicles that allow them to actually make intelligent decisions rather than focusing too much on the upfront costs and too little on the costs behind it. We can talk about innovation for, financial innovation for technological innovation, but that's another story. The problem, of course, is that our recent experience with government subsidies for consumer credit has not been entirely positive, and so whether it is, it may be technically possible to imagine schemes that would be effective. It is not necessarily realistic either to imagine they would be accepted by the public or that they would be implemented the way that you or I would write them down a piece of paper and publish in a nice energy journal. So two comments, Michael. I don't know much about finance, I'm just a physicist guy, but I do know that if the total lifecycle cost of a technology is bigger than the alternative, no amount of financing is going to make that different. And currently, we all like that. The second is one should not underestimate the slowness of the transition that you mentioned quoted Smilin. Hybrid vehicles went on sale in the U.S. About a decade ago, there are a million and a half of them on the road currently out of 240 million light duty vehicles. Hybrids are currently 3% of light duty sales, sales, which is just the new vehicles. So it's gonna take a really long time unless there is some external government push. That doesn't solve the tier problem that Lisa is talking about. I think that there is room though to do, I think what you're referring to is that, in part, the price of gasoline because it's volatile here is perceived to be lower. And so we don't have the kind of push into the marketplace for electric vehicles that they have in Europe or in China where there's a different sort of government push. And we need to figure out what that push is gonna be if we think these are important. And there's probably, there's a lot of different ways to do that, but we're not doing that. And I think what I'm saying is when we do that, we need to make the middle class part of it. What we've done is we've sort of focused on early adopters so far and people with a fair amount of cash on hand. I just wanted to make a small point on that. I think we need to be clear about the distinction between electric vehicles and more efficient internal combustion engines. There are plenty of internal combustion engine-based vehicles that would be economically smarter for people to buy but which they don't buy because of capital constraints. I should also make clear, I mean, my sense, nevermind the broader government is not to push electric vehicles. The goal, the problem is to reduce the exposure to oil volatility and all the baggage that comes along with oil. And if you can get there with more efficient internal combustion engines, let's do it. Yeah, so why not focus on standards more, which have throughout history kind of delivered more return than kind of the quote unquote breakthrough technologies. If you look at California, if you look at cafe standards that you mentioned, standards are where it's at if you want to reduce volatility. We have done a lot, we're focusing mostly on transportation. We have done a lot on standards and we go up to 50-some-odd miles a gallon by 2022, which that's what's proposed. That's pretty good. Do you think we need to do more? Anybody? Is that enough? I mean, does that really solve the problem? You need to- Well, firstly, go ahead. Well, firstly, which is the problem? There are multiple problems. It's not one solution for all of them. We've been talking about transportation here, so we're mostly talking about oil consumption, which hits multiple problems, but certainly for the climate problem is only a slice of it. Could you do more with fuel efficiency standards in the long term? Yes, I think this administration's been quite aggressive on fuel efficiency standards. There's also a point of diminishing returns with fuel efficiency standards. On two sides, this rebound effect where people use vehicles more doesn't get rid of the impact, but it can hit it, particularly in industrial applications where people are already looking at their numbers. And on the flip side, just because you set the standards doesn't mean people will have the technology to deliver properly on it, so you still need to help make sure that that's there. We, the government, need to keep pushing the pre-competitive technology. In the vehicles, it's lightweighting, it's more efficient simulation of internal combustion engines, and then it's the batteries, which has already, of course, been mentioned today, and the advanced biofuels for diesel. So this last point about simulation is also really important. It's a reminder that, even though we talk a lot about energy innovation, there's only so far you can push innovation in one sector out in front of innovation across the board in technology. We've heard about, I mean, people have been talking today about what we've learned from biotechnology that can be applied to dealing with energy problems. We've talked about computing as it applies to energy technology. That doesn't mean that you should just sort of be extremely broad and never focus on anything energy specific, but moving your bets from one pile to another doesn't necessarily get you where you want to go in the long term. You need that broader environment where there are innovations to borrow from all sorts of other places. I think another role for government is in looking out for problems that lie ahead, and one of the issues with electric vehicles in particular is rare earth metals like neodymium, which now come mostly from China. We have a mine here in the US, and they're going back online to produce them, but they're certainly never gonna be up at sort of world domination levels. And figuring out in some ways the life cycle of the ingredients of the cars is gonna be increasingly a task for government to coordinate, whether we do it in a Japanese sort of style where the government coordinates industry, or whether we do it in sort of more our own fashion where you convene government, I mean where you convene industry to figure out what they're gonna do. There's really no excuse for some of these components to be heading off to the scrap heap. So we do have an extensive program to look at replacements, minimize use, and then recycle ultimately for those metals. So the four letter word in energy has been brought up a couple of times now by you, Lisa, that's China, earlier today the point was made that perhaps national competition doesn't matter, yet when we talk about oil or EVs or whatever else, it's always kind of pitched in the realm of competition with China or competition with let's say Asian battery makers. Does national competition matter and if so, why? Well, there are, if you compare US and China again, structural differences, they're building their infrastructure new, cost of labor regulations, cost of capital, willingness of the government to get more tightly coupled with the private sector there. These are all things that tip the playing field in one direction or actually in the Chinese direction. If we want to remain a competitive economy, nevermind whether it's energy or anything else, we probably need to re-examine how we do things in this country. I think when you look at, let's say, the US-China relationship, part of it is win-win, I think that's what people were suggesting, and part of it is win-lose, and you have to distinguish between those and focus on correcting the win-lose pieces and intensifying the win-win. So look at the solar market. People like to talk about the solar market a lot and about how solar panel manufacturing is not happening here, it's happening in China. What happens in China primarily, at least for now, with ultrapure silicon that's made elsewhere, including, in particular, in the United States? Now, if you don't have cheap solar panels to sell because of the cheap assembly, you may not have the same market for the ultrapure silicon. So you can imagine a win-win sort of thing where different countries specialize in things that they're better at and together they all gain. You can also find situations where because of subsidies or tariffs or non-tariff barriers and so on, or because government is unwilling to properly partner with the private sector to develop technologies, that there is a win-lose where one side simply gains market share at the expense of the other and something that the other is quite capable and principle of doing. And the United States needs to make sure that it doesn't lose out on those and that part of that is a good trade policy. It's not about fighting these fights alone because not the United States alone that is concerned with some of the policies that China adopts. India, for example, has local content requirements for its solar industry, primarily to protect itself from China, not from the United States. So we need to do that together with others and we need, again, to take a broad view from our own standpoint. It's not just about getting the right energy technology firm started, it's about having good science, technology, education, things like this. So when innovations happen wherever they happen, firms can set themselves up in the United States to take advantage of it. But before... I would add that, yeah. I got to open it up to the audience at some point. Before I do that, I want to make sure that we talk about something besides cars. We're here in D.C. and, obviously, the talk of the past couple of weeks in energy has been Cylindra. We've heard a lot of talk about productive failures and their importance in energy development. Could Cylindra be viewed as a productive failure? I think, as they say, time will tell whether Cylindra was a productive failure. Cylindra is really typical of something that happens and it is in relationship to this discussion about China that it happens, is that rather than trying to do what we do well, we try to do what the Chinese do well, which is subsidize the heck out of things. And that works really well in China because they're essentially, they need to create the equivalent of jobs for the population of Australia every year. And they have a lot of incentives that don't exactly have to do with money, that have to do with keeping stability by generating those jobs. So people, we also talk about batteries. Shouldn't we be subsidizing a battery industry? Well, no, because everybody subsidizes batteries because it's a subsidized industry. That's their commodity. The thing is is that we could change our own standards here, make it so that the things need to be created here and so that there's technology. One of the things that scares me about Cylindra is we as taxpayers put $535 billion into it. Million, I'm sorry, I'm sorry. Thankfully it was million. Million, thank goodness, yes. So it was these millions of dollars. And then it goes bankrupt and who gets to buy that? Now from what I understand is the DOE actually took the, got some of the rights to the intellectual property and I don't know, that was just a rumor. But what has happened traditionally in California, for example, is we funded through the 80s and early 90s, we put tremendous funds into our wind and solar industry and then we didn't sort of have firm political buy-in and we had this sort of subsidy structure that then toppled and the place that the companies went bankrupt and then their technology was bought by people outside the U.S. And so we essentially, we as taxpayers had funded great businesses for Denmark. And that's kind of the scary thing about Cylindra is, did we just do that? But please. So several comments about Cylindra. So I'm not a political type, as I've mentioned already. But it seems to me curious that when Congress writes a law that says the government should extend loan guarantees and take greater risk than the private sector, sometimes things are not gonna work out and you have to understand that. The political system seems to have difficulty understanding that. Cylindra was not a particularly productive failure in my opinion, it was a business failure, not a technology failure. The technologies work and find just happens to be the wrong technology for the current market conditions, which were not the market conditions when the deal was done. And the last was the government perhaps went out on a limb but a billion dollars of private sector money went out on the limb with us. And so it was not as though this was a particularly contentious call in terms of the private sector putting money in. And I think this repeatedly quoted email from Larry Summers captured things quite well. Government is a crappy VC, but the problem is that VCs are fairly crappy VCs in this space as well. The second part is mine, the first part is his. That's right. Look, VCs are really good at doing certain things. They're good at doing things that involve three to five year commitments of a certain amount of money, which is generally smaller than the amount of money involved in most energy things. Timelines are shorter and so they don't necessarily, we get all sorts of innovations. They may not solve the social problems that we're interested in solving. And it's worth taking the long view and going back into history, once upon a time VC didn't exist either. If you go back to World War II in the immediate aftermath of World War II, if you had the kinds of things that VCs do today, you would turn to the government to fund them. VC was essentially a failed financial model for almost 30 years until an obscure change in Department of Labor regulations on pension investments basically allowed it to explode. Maybe there are financial innovations out there that will allow investors to put money into the kinds of technological risks that we need to deliver on energy solutions. There may also be a role for government to make those new financing approaches happen. And I know there are a lot of lawmakers looking at different ways to do that. So there's the potential for innovation there, but just because a lot of private investors are pouring in money, particularly in Silicon Valley, does not necessarily mean that they're making good bets or that what they are supporting will give us what we want. And how does that play into our competition with China? We just have a different model, right? We have a model that says you start small with risk finance and then you grow up and then the big company buys you and integrates it into what it does. That's roughly how we do things. It's not totally clear that that quite works in the energy space because not everything can actually start small. So the Chinese model has a ton of money in these big state-owned enterprises. Frankly, it doesn't feel all that different from what Bell Labs used to be able to do once upon a time or IBM when they had big in-house research departments. But it's not clear that within the Chinese model you have that competitive discipline that you need to actually take that large scale of patient capital and turn it into something useful on a consistent basis. I think people are gonna be looking for the right blend of government and private in order to solve some of these problems. But they have so much capital. You know, it's not just about money. I wanna talk about Chinese innovation in a different dimension and high performance computing. Last November, I visited the Institute for Computing Technology in Beijing. This is a Chinese Academy of Sciences operation, a palatial building right next to Tsinghua University, a thousand of the best Chinese graduate students, 500 professional staff who see their job as to spin out companies. And they spun out Lenovo, and they spun out Don Ng, and they're spinning out many others. The faculty sit on the boards of these companies and they take an equity return from those companies to continue to fund the operation. It's a completely different organization. It's like a university tech transfer operation on steroids, if you like. And it's a different way of doing things that doesn't require massive subsidies, but looks pretty effective, actually. And I wanna make sure we have some time for questions from the audience. If there are any, if there aren't, I'm gonna let Lisa jump in right there. Real quick, so right now we're talking about things like sort of dealing with externalities, climate being a classic. And that's really a public good. And one of the challenges for investors is that they can't capture a share of that market. And that's a good that sort of everyone enjoys. And that's traditionally been the role of government. That's a classic role for government to take. But in recessionary times, it's one we can't afford to do. So are we really thinking about sort of a two phase energy policy where in poor times, we sort of have one tack and when we're fat and sassy, assuming that ever happens again, we have another that's more oriented toward the public good? It's certainly a lot easier to talk about public goods in fat times. One of the features of the climate problem is that the time scales are pretty long. It's gonna take decades for the CO2 to build up, et cetera. So at least in the US, I think we've got some time where I get more worried is in the developing world, which is building the infrastructure and locking in. So I don't know if that helps, but there are different aspects of this. Do it now or do it later problem. I think that part of also what's happening is that the sort of the default energy policy we were gonna have was a carbon policy. And before that, actually a lot of energy policy was kind of done behind closed doors by some very high level sort of wonks. There was a whole early, the first Bush administration had a sort of an unspoken energy policy that they put in place. And a lot of this didn't used to be kind of exposed to the light of day. And what's happening is with the internet and the information is that information and energy policy are getting very intertwined and people are having opinions before. Well, it's just it's becoming something that gets batted about a lot more. The very idea of people chanting drill baby drill and getting other people to chant drill baby drill would have I think been unthinkable 20 years ago. So what we're looking at is that this sort of matrix of the internet and real political involvement is kind of overlaying with this trying to articulate an energy policy. It's pick up on, it's Twitter's fault. No, it's our fault. But I'm like, I'm like, I'm like everything else. I also think you framed it well. We have a habit of revisiting our strategy for various 30 year problems every time there's a three year change in how the political system is functioning. And there's been at least five articles in the last week trying to understand what happened to climate change in US policy with all sorts of elaborate theories to do with climate gait and sort of cold winters and whatever. Well, nothing else has passed Congress in the last three years either. There's nothing special about climate policy right now. So I think we gotta be careful to yes, to adapt to big trends but not to try and rewrite strategy every time something changes for a few years. The first hand I saw was right here. I guess one of the questions we're talking about this issue of national energy policy is that if you look at the US and you travel outside of the northeast corridor and the Pacific coast, you start to get different views. And part of the reason is because a number of the regions and states in the US are net energy exporters and they have the attitude of exporters. If you want a local non-US view of that, go to Alberta. So I think one of the challenges with an energy policy and industry comments is how do, one, can you have one when you have this kind of split? But secondly, how do you accommodate the fact that there are areas of the US, I mean I was triggered by your comment, drill baby drill, what would happen to Texas, and Oklahoma, and Louisiana and all these if you don't? So. This is gonna be our last question because we're running out of time and I would sum it up as government is broken and can we ever fix it? Do you want me to take it? Okay, so what I would say is yes, we do actually have two very different realities in the US and what's happening with the natural gas boom, the especially the shale gas boom is that it's taking places like upstate New York and challenging them to whether or not they wanna have drilling equipment on their land and people in upstate New York are seeing this as a property rights issue because they never did what Oklahoma did and they never acted like Texas did. In Texas, if somebody comes on your land and says I'm gonna drill, you say okay, I kind of figured you did, but send me the check, exactly. If they say anything. If you're lucky enough to own the mineral rights. Right, well yeah. That's the issue in Texas. It is in New York. So Don, I think the way you square the circle, this is Steve talking, not the administration. And I'll talk about oil, not gas because there are different situations. I think you adopt the Norway strategy and that is that you produce like crazy, sell it either domestically on the open market, do it responsibly of course, find that to be sound and at the same time reduce your dependence through efficiency, electrification, whatever. That probably satisfies both constituencies, hits the jobs in economic issue and at the same time addresses climate economic vulnerability and so on. I think the only thing it doesn't address is what do we do in 50 years? Most people don't make 50 year decisions in politics. Look, there are a couple different theories of how you do it. The one that has been tried is you collect a lot of money through your policy and you hand it out to the people who are going to be hurt in the long term to make them happy in the short term. That was roughly the design of some of the climate policy that was attempted earlier. I think this administration didn't quite work. There are other ways of trying to handle things but fundamentally you probably can't help with winners and losers over the very long term but you can help with transitions. Those other ways are gonna have to wait for a hallway conversation because we're out of time. I want you to join me in thanking our excellent panelists. Thank you. I'm a little disappointed there were no fisticuffs but I appreciate the liveliness.