 Okay, we're back. We're live at 3 p.m. on a given Wednesday. I think that Thursday. Orientation is time and space. It is Thursday. I'm Jay Fidel, and this is Energy in America. We're studying Energy in America every two weeks at this time, often with Lou Pulgerisi, but today it's with Pat O'Jarrell. And he is a research analyst for EPRINC, APRINC, which is the Energy Policy Research Organization in Washington that looks into all kinds of macro and international issues around energy, and that's where Pat is from. So, Pat, it's very interesting. The topic we chose today, which I suspect you chose today, is what stands in the way of our transition. And I take it when you say transition, you mean a transition to renewables, to clean energy, and, you know, greenhouse, no greenhouse gases of carbon, and so forth. Everybody has this on their minds. I mean, why are you thinking about this for 15 years and articulating policy about it? But, you know, things get in the way. And this show, this discussion will be about, you know, what the global obstacles that we are experiencing and will experience in terms of transitioning to renewables and clean energy. So you have identified a few. Let's go through them. What is your favorite one? So, yeah, thank you so much, first of all, for inviting me to your show. So today's topic is very interesting, especially, you know, given all this hype around renewables and also recent announcements by governments, including the Biden administration on net zero targets and then their infrastructure renewable and infrastructure plans that goes out to mid-century 2050, 2060. So it's going to be a very interesting to see how we can achieve those energy, you know, clean energy goals. Yeah, let me ask you about the two trillion dollar Biden plan that just been rolling out, rolled out now. And the details are in the newspapers, of course. But I have one question, maybe you can help me with it. How much of the two trillion dollars is energy? So I think the entire, I think that the entire two trillion dollar bill is in one way or another related to energy. And from the news articles I am receiving, receiving $600 billion for transportation, but not all of that is related to energy, of the $600 billion for transportation, $170 billion is for EVs, EV electric vehicle financing projects. So I don't know the whole picture or the detailed numbers, but it's, you know, all aspects of the bill is in one way or another related to President Biden's clean energy goals. Yeah, maybe you can help me with my eyesight also. I have a very strong recollection that this bill, which has been discussed by the Biden administration for the past couple of weeks anyway, or longer, was a three trillion dollar bill. Now, look again, Bingo, and it's a two trillion dollar bill. What happened to a trillion there? To be extremely honest with you, I didn't have an answer to that. Lou might be the better person, but yeah. I'm right though. It came down a trillion dollars in the past few days, am I right? Yeah, I agree. It's very hard to, you know, to achieve or implement, you know, the previously announced goals or stated policies. Just when it comes to real politics, it's just difficult and then that's something I would talk about later today. You know what Everett Thurston used to say, he was a senator years ago, used to say, a trillion here, a trillion there, after a while it adds up to real money. Okay, so yeah, so I have a few slides today. Can I see the first slide? So I wanted to, I first wanted to show you and in the audience what the energy, current energy system is, and then the current energy mix is to, you know, illustrate where we are now. So this graph, this Sankey diagram shows the current world energy system on the left hand side is primary energy supply by fuel type. And then on the left, on the right hand side is final end use by sector. And then if you look at the energy, the left hand side, it's clear that the world energy system is extremely, you know, very, very dependent on fossil fuels, which accounts for about 90% of the global primary energy supply or demand. And then the blue blocks in the middle is electricity. And I can, I'll talk about that later in the show, but it's less than half of the, less than half of the primary energy supply goes to electricity, meaning that there's a lot of, you know, a lot of room to grow electricity in the future power and, you know, electricity, sorry, heat and electricity, both of which constitute the power sector. And then on the right. So this chart, for each thing, it's not a dynamic chart. There's no time feature here. It's right now today. It shows you where the energy is coming from and where it's going. Yeah, it's the current, it's from 2019. And then you'll see in the chart that buildings, transportation and industry are the three, you know, important sectors that use energy evenly. So just, yeah, so if you go to the next chart, we chose the US energy consumption, and it is compared to the rest of the world, more reliant on natural gas and oil and, you know, still fossil fuels. So it's going to be, you know, a difficult challenge for not just the world, but also for the US to decarbonize its economy because the current technologies don't allow a lot of, you know, decarbonization, technologies, carbon capture, sequestration and hydrogen, they are not on the table yet. So if I look at this chart, I see a big green swatch there. Is that oil? What does that mean? That's oil, yeah. And then also, yeah. Go ahead, identify, identify what the sources are. So the green line is oil and it goes, most of it goes to transportation. And then, you know, within the three, among the three main sectors, although they use similar amounts of energy, their sources are very different. For example, buildings in the US came soon as a lot of electricity, whereas industry uses a lot of natural gas. But the US economy is not manufacturing based, so it's, you know, it's, you know, comparatively smaller than the other two. But for China, it's bigger and then the coal consumption that goes into industries way, you know, much larger than that. So, and if you look at transport, you know, although there are a lot of talks about electric vehicles and net zero transportation, electricity, you know, accounts for only a small, very tiny portion of the transport sector. So, so where is, where is renewables on that chart? If you go back to the chart, the renewables are the first one is hydro nuclear and the third one is the renewables. And then if you just compare the width of the lines of the first three, they are, they are much smaller than the, than natural gas, oil, biomass, and coal. Now, this is actually, at first, when you showed this to me, I thought it was the New York City subway map. But it's much more interesting than that, as a matter of fact. Can we go back to the first one? The first one was global, right? The first one is global, yeah. Yeah, let's take a look at that compared. So, there's plenty of oil there. And the coal is huge. That's the gray one. That's the gray one. Yeah, the gray one, half of which comes from China, whose China's economy is extremely dependent on coal, 60, 60% of its energy demand comes from coal and its power sector is extremely dependent on coal. So, and then other, you know, energy fuels are important and then renewables, hydro, renewables are growing solar and wind, but they, you know, the scale of that pales in comparison to the other more traditional energy sources. So, this looks fairly complex. It also, maybe it's just the way the chart is set up, but it suggests that to move these things around to change them is really complex too. It's a chore to change those pieces. So, I get a couple of things here out of your comments so far. Number one is, correct me if I'm wrong, but you need to have government support the change. In other words, these lines on the transition to clean energy, they don't, it's not really a matter of the utilities or the public so much as it is the government showing the way, establishing policy and programs, but also writing checks for tax credits or supports of one kind or another. And correct me if I'm wrong, but if you had the government do little or nothing to support the transition, that would, that would be a problem. The transition could not happen without government because these are always big projects, big numbers, you know, big human activity. I guess one thing I get, the other thing I get is, as I said, is that it's complex and in order to change the chart like that, which is so complex, you may need time and be you need buy it by not only, you know, the government, but by various sectors in the economy, US economy, the global economy, the economy involving all the entrepreneurs, all the investors, all the management, all the workers, they all got to get together on the same page to make this change. Am I right about that? That's absolutely correct. Yeah, I agree with you. So first, politics is extremely important, political support, because the other two challenges, main challenges are costs and technology. Some, you know, some technologies are readily available, but they are not cost effective against the incumbent to current technologies or, you know, it's hard for consumers to adopt those technologies. And second, you know, these, most of the nascent technologies or even for more mature cost competitive renewables, it's hard to scale up because of their technological, you know, issues, intermittency. So technology and cost are the main issues, but without government support, it would be impossible to reach these goals. Even with government support, it's, yeah, it's extremely difficult to reach these goals. But let's talk about technology for a minute, that, you know, if we, if we look back to inverters, for example, on solar installation, it's back 15 years ago, they were primitive. Now they're not so primitive. A lot of them are made in China. It's electronics. And as the, you know, electronic industry, IT grows, develops, gets more sophisticated, manufacturing gets easier, keeper design gets better, may have better technology. However, it seems to me that, that you have to have an awful lot of people adopting the technology, and you have to have integration of the technology. All those wires have to go somewhere. You can't, you have to connect it up. And so would you see, would you see obstacles, that's what we're studying today, to the transition in some aspect of handling new technology, making it, making it to solve a problem instead of just theoretical for the sake of it kind of technology, and connecting it up to, you know, all the, all the other devices that must connect to, is that an obstacle? So yeah, that's an obstacle. So let's go over a list of technologies that need to be adopted at scale. I was reading Bill Gates' new book titled, How to Avoid Climate Disaster. And then he listed the technologies that need to be financed and then scaled in order to reach the, you know, 2050, 2060 mid-century carbon neutral goals. And then those are, they're a lot of them, but they're more than a dozen technologies and fuel sources from, do you want me to list all of, you know, go through the list or? How many, before I answer that, I need to know how many I want to look at. There, there, you know, I just, just to go, you know, just to name a few hydrogens about emissions. Hydrogen technology is important, but, you know, currently we use gray hydrogen that is from natural gas, but it's not, its emissions are not captured and sequestered, but CCUS or, you know, carbon capture and carbon capture utilization or sequestration technology is important for that. And, but there's another option which is green hydrogen, which is also not cost competitive at the moment. And then grid scale electricity storage, there are a lot of talks about battery technology, lithium ion batteries, but, you know, it's, if you look at the EV price, it's still not cost competitive and then you're really dependent on subsidies and it's still a niche market to achieve grid scale electricity storage that is not only cost effective, but also is able to store, you know, electricity for long periods of time. That's a huge task. And some others are zero carbon cement and zero carbon steel. There are sectors that are, you know, relatively easier to obey relatively, you know, you know, cheaper, but there are sectors like industry, manufacturing, and especially cement and steelmaking that are extremely energy intensive, therefore use, you know, coal or natural gas, those sorts of fossil fuels. And it's hard to find an alternative to natural gas and coal and other fossil fuels for those harder to obey industries. And then yeah, I can go through the list, but hold there for a minute though. Yeah. You know, Bill Gates was on 60 minutes, maybe three, four weeks ago, and he was touting his book as you mentioned. But he also has invested and it's speculative, to some extent, a system to infuse carbon that you don't want into concrete. So there's really a lot of concrete being made, you know, that's the metric of development, concrete. And when he's developing a system where you can put the carbon variant inert into the concrete, get rid of it. It's a very interesting idea. But what it raises is just the other thing I wanted to mention to you is, so a lot of this is experimental, really. And, you know, Bill Gates is doing experiment with the concrete. And a lot of the things we have out there, including the elements of electric cars, they're kind of experimental, except they're being practiced on hundreds of millions of people. But isn't that the only way we can get home? Isn't that the only way we can, you know, steer the course, spend the money, even if it is not terribly economic, even if it is, you know, cost you more, what we learn? Because I don't think, I mean, if you agree, I don't think we can develop these sophisticated devices, systems, materials, simply in the back end of a workshop. We have to let them breathe. We have to put them out there, into the community, see what happens, see if they work. And they're never going to be economic to start with. We can only hope that at least some of them will become, over time, economic. And that's the way to change society. Am I right? Yeah, that's right. There are R&D projects supported by DOE and then DOD in energy technologies. And then they, some of them have been extremely very successful in the past. And government direct support to those high risk, high reward technologies was, you know, was the major driver of these technologies success. I agree. But at the same time, it is also important to be able to see their limits. And also understand that they have, they are not cost competitive and many of them will fail eventually. As we've seen from the solar industry before cheap Chinese solar panels were coming in, there were a lot of ambulance hype about solar, about the solar industry. And then the US solar industry was trying everything out from PV to, you know, other, I can't recall some of them right now, but they were in a different technologies. So almost all of them failed. So it's also, I think, important to keep in mind that they are, there are limitations. Yeah, that's how you learn, but you can't pour money into it past a certain point. It's no longer a workable experiment after a certain point. You know, I got something in the email about the cost of a wind turbine. Because the wind turbine involves a lot of steel, they're bigger all the time, arguably the bigger they are, the more efficient they are, but it's an awful lot of steel and all kinds of other materials. And it takes a tremendous amount of effort to manufacture it and, you know, integrate it and fabricate it and deliver it and install it. And this article, I really don't know, I don't have any sense of the credibility of the article, but it stood for the proposition that wind turbines are simply not efficient in terms of cost on the environment. That there's more carbon going in there, more work, more effort, more blast furnaces, steel factories and all that making this thing, that it will ever begin to pay back to the environment. And that it is a modern wind turbine is never going to be efficient from an environmental point of view. Thoughts on that? On that, I, yeah, please send me that article. I, yeah, I, you know, it's, I'm not 100% certain about that, but there, you know, major drawbacks like siding and, you know, the wind turbines take up a lot of space and it's also harmful to vocal birds and, you know, et cetera. What I was going to say is that, so yeah, I agree that. So I think I forgot what I was going to say. We're talking about the economics and we're talking, and you have this list, maybe there are other items on your list we can talk about in terms of obstacles to the transition. Yeah, I'll say, I'm sorry, I just, yeah, remember to your point about steel that goes into wind turbine making wind turbines, you know, these new technologies, EVs and renewables, I'm not against them, you know, I support renewables and clean energy, the clean energy transition. But at the same time, many of these technologies are quite a lot of steel in minerals, including rare earths, which is, you know, which is controlled by a few countries, the sector, for example, is dominated by Chinese processors and also Chinese rare earth miners. So those will be a challenged, you know, political and environmental stakeholders will increasingly realize that there are other challenges, including supply of minerals and rare earths that go into these technologies. Yeah, and you mentioned an interesting point about China and, you know, its control of rare earths and manufacturing processes that are relatively speaking, economic, and that is the whole geopolitical thing, you know, the whole energy technology adventure is really a global one, and we need a lot of collaboration on that. And if for reasons that are entirely political and geopolitical, we get into an argument with someone, and maybe we cut off those minerals of rare earths, we cut off the technology of the maintenance or elements, components of the technology, and all of a sudden, where we thought we were being resilient, we're not so resilient, because there's a barrier created by, call it a failed geopolitical relationship. And so that's an obstacle, isn't it? That is, you know, from the environmental perspective, it probably is not an obstacle, or it might be because it, you know, cheap solar panels, for example, some according to some studies, cheap solar panels from China hindered further growth in U.S. solar innovation. And also, depending on a few countries on these minerals, for example, Congo, the Democratic Republic of Congo controls cobalt, you know, important component of, you know, new energy, sorry, new energy vehicles or electric vehicles. So those, and then the country is also known infamous for, you know, some other issues, human rights and child, etc. So along the down the road, these will be an increasingly, you know, this will be a big challenge. But I think Europe, the U.S., Japan, and other developed countries are more aware of the situation now, and then they are trying to circumvent this challenge by developing domestic industries or cooperating with other industries, other countries trying to less, reduce their dependence on these countries. Good point. So you have some more, you have some more charts. I know there are a couple more charts. Yeah, let's do that. Can I, yeah. So this is related to my earlier point about how hard it is to, you know, reduce reliance on fossil fuels, because, you know, this is a historical chart showing energy consumption of the last 50 years, and the share of renewables and other alternative technologies has grown, nuclear, for example, has grown, but fossil fuel, the absolute values of fossil fuels have never gone down. There was never real energy transition in that period. So, the idea behind energy transition is a switch away from fossil fuels to other zero carbon technologies that will replace the former. But based on the historical past experience, it's proven to be extremely difficult with all the incentives and policies that have been implemented, you know, in the past. So, and I can go to my next slide, which is not related to this one, but this is a chart. This is from Princeton University study showing what needs to be done for the U.S. only to achieve net zero emissions by 2050. And can you summarize this for us a minute? I'm able to read the words. Okay, so it's just to repeat my point, it's a huge challenge, you know, for the first point is that EVs need to increase to 200 million by 2050, for example. And then there are other, you know, challenges or solutions, including carbon capture storage, clean electricity, battery technologies, dear carbon fuels like bioenergy and bioenergy with carbon capture sequestration, which uses bioenergy to capture carbon, you know, bioenergy and then it captures carbon and then the capture carbon is sequestered. It's a combination of two, two approach. So it's going to be for the next three decades, we have to do a lot to invest a lot of money and also do a lot of reforms, political hard decisions to reach these goals, if we ever, you know, reach it. So it's a really, you raised an interesting point right there and that is that it requires political will. I mean, political money requires political will and action requires political will. And it's not just, you know, it's just because we had a bad storm from climate change. It means consistently, relentlessly, you know, doing stuff that requires political will every day, every day. We never lose sight of our goal and our, you know, and we do not let obstacles stop us. And I suggest to you that maybe we have learned over the past 20 years that the world is really not well equipped to do that. Not only the United States, which has its own issues about political will, we know, but the world in general. So we're, I think we're in trouble on this. Have you any thoughts on that? So, yeah, political will is very important. And actually, we're seeing a lot of, you know, commitments pledges from governments across the world around the world to achieve net zero in the next, within the next 30 to 40 years. There are a couple of those in countries that pledged to do so, including the US recently, Japan, Korea, and even China. So China last year pledged to achieve net zero by 2060, not 2050. But these are long term commitments. And not a lot of, you know, not a lot of politicians will be in their current positions by 2050 or 60. So so many things come up and distract us, you know, you can make a list of things that might distract us from relentlessly following the goal. And it's an infinite list. So however aspirational or however moderated current policy makers can be, it's hard to foresee the future. And then it's, there will always be opposition. And then also other factors that will prevent us from, you know, reaching these goals. So one thing you mentioned, I think it's worth talking about is the electric vehicle thing. I think we need 100 million to really make a stab at it. Right now Hawaii has something like 1300 electric vehicles on the road. And it's going, I wouldn't say it's going geometrically, it's not. It's a straight line of increases, not all that fast. And people have been trying talking about it for, you know, since electric vehicles were available. And I'm thinking, if that's the model that is prevalent in the country, where the manufacturer is, although somebody told me, or I saw that General Motors said that by 2035, it doesn't intend to make any more, you know, conventional cars. That would be something. But I think a lot of the automobile industry is not committed to electric vehicles, because people don't necessarily want them. Because they already have the factories to make the conventional cars, they would have to spend any enormous amount of money to retool. And so it's not moving as fast as it might be. Now, if you were president, or if I or if the two of us, we had a, you know, like partnership president presidency, we would figure out ways to make this happen. But I don't think that's happening quickly right now, not only in the US, but elsewhere. And so I don't think we're going to reach 100 million right away. So that was 300 million, actually. Sorry, thank you. Just for the US. That's three times the number of doses or whatever. Yeah. He said he was going to do 100 million doses in 100 days. Let's see him do 300 million cars in 40 years. Yeah. So that's, it's a big challenge. And it's, you know, we're talking about the US, right? And then there is, I mentioned this earlier, but Africa, South Latin America, and Southeast Asia, South Asia, they are going to, you know, be growing. Their populations are going to be growing. Energy consumption is growing. So those are the countries that we have to shift our focus to more because, you know, consumers and policymakers in the US and Europe are already pretty aware of the situation. But, you know, there's a lot of uncertainty around how their policies will play out, but the real challenge will be in those less developed emerging economies. Let me ask you a Charles Dickens question. It's the ghost of Christmas future. Just suppose, hypothetically, that that last chart is what prevails, where we really don't have a transition. I mean, we are sure we have some renewables, yeah, but we're still using oil, we're still using coal. And in these developing countries, which require additional supplies all the time to meet the demands of its population, which is, you know, budgeting, what happens if you have increased demand, but you don't have a change in the essential arithmetic for what the supply is? What happens to the country? What happens to people? What happens to the economy if that happens? So can you repeat that question, sorry? We really don't make a transition. Okay, last chart. We just don't do it. Historical chart, I see. So what happens? What does your economics tell you about this? So from the economic perspective, if you don't meet the goals or Paris Agreement goals economically, you know, it's very hard to tell. It's hard to predict that. So I will probably be able to answer that. Then I'll make it more complicated for you. Okay. Suppose the same thing, but we start running out of oil and gas, or it becomes, you know, just marketplace more expensive. But these economies cannot afford it. So what happens is they cannot afford to get the energy they need, or should have to develop, or even to remain viable. What happens then from an economic point of view, they cannot afford the energy they need to grow or even maintain? Yeah, that's a very good question. That's a very good question, which I don't have answered to. It will be difficult, but also that question reminds me of peak oil demand. That was a big problem in the, you know, a few decades ago when there were embargoes, and then conflicts in the Middle East, but the US was able to improve its technologies. And now it's, you know, exporting oil and gas, and it has a lot of shale gas. So technological improvements will, you know, probably, you know, keep us afloat. But I don't think I have an answer to your hypothetical question, which, you know, seems there's no... Oh, we're not there yet. Probably the whole world can afford to spend It's important to think about those questions earlier, you know, rather than later. Yeah, we should all be alive when the crunch comes. So let me, let me ask you, we're almost out of time here in a couple of minutes, and I wanted to ask you what you would like to leave people with, you know, the conclusion that you reach and that you would urge them to reach about this whole problem of the reality of emerging obstacles, existing and emerging obstacles to a transition to clean energy. What do you want to take away? So just to reiterate my key points, clean energy, the clean energy transition is good, good for the environment, and it's good for the health and well-being of the world, and the inhabitants of the world. But, you know, reaching the Paris Agreement goals and NetEar goals by these governments will be extremely hard. And then the main challenges would be cost, technological technology, and policy slash politics. So those are the main takeaways that I want the audience to get from this show today. Thank you, Vett. And Vett Augerelle from Eprink in Washington, D.C., an economic energy analyst. Thank you so much for joining us. Really appreciate your answering all my questions. And I hope that we see you again on the show in the near term. Thank you so much, Vett. Thank you so much. Thank you for your meeting. Aloha.