 Okay, Wednesday at 3 p.m. Energy in America. We are so happy to have Lou Plurici of e-prink He's the CEO of e-prink on the line with us from Washington, DC There are so many things happening these days. We want to catch up with you about all of them, Lou Welcome back to the show. I'm happy to be here, Jack So first let's talk about, you know, the biggest thing that happened this week in Washington Namely, the State of the Union message and I'd like to hear your thoughts about how it affects it involves It teaches us anything about energy Well, let me say you know one thing I You know, I think these State of the Union speeches are very much a political theater I mean they're an attempt for the president who commands the whole room. He gets this coverage and the Democrats in this case have to do a counter message Generally by the time you give your counter message everyone's turned the TV off and go on to watch Netflix or something So if you're the party in power, you have a lot of leverage. I do think you know, here's one thing I don't think anyone Noticed that the speech okay, but sort of an energy to America the president did not mention the word cold one time So he may have changed his mind about cold. Don't you think? Well, I just think you know that coal is You know, they sort of done their thing on coal and it's that turns out that Yeah, he I think many of his constituencies appreciate that you know, he He showed some attention to the dilemma they were facing and all the problems, but In the end Then the national Power sector in the US is going to be moving in the direction of natural gas and more of a normal We might see some Moderation of the decline in coal use in the utility sector and who knows we may be able to prevent the complete retreat of Nuclear power. I don't also like to point out that this morning Ernie Moniz who was secretary of energy under President Obama and Dan you're getting the famous energy guru the head of you know, the vice chairman of IHS CIRA I mean IHS market author of the prize He and Moniz issued a report partly funded by Bill Gates Basically saying the US cannot move to a fully renewable power sector by 2040 or even 25th So let me ask you this could could the US do more about moving to renewables if there were a comprehensive bill a package In Congress not that they have time for such a thing right now because they seem to be you know Distracted by many other issues and not not even but but assuming assuming they had the political will Assuming they wanted to meet that date Assuming there, you know, they had good advice and so forth on how to do it with a combination of sources and all that including LNG Could they could they do it and I suppose my second part is is there anything pending? Did the president say anything about anything that would be pending on energy in Congress? President all in addition to never mentioning the word cold. He never mentioned the word climate The board remember those two things you didn't mention U.S. It is true that we could do more with a national policy My own my own view is that doing more would be largely in the area of research and development I believe a lot of the subsidy a lot of the demonstration facilities a lot of these so-called renewable portfolio standards are both costly and Not not giving you much bang for the buck We need and I think this is sense with Gates is talking about in the work he had Ernie Moniz and Daniel you're gonna do is that we need breakthroughs right we need Fundamental changes in the cost of the technology As you recall a few weeks ago We showed a slide or picture of the growth in electricity prices in the nation Oh since over since months of 2010 and the growth of electricity prices in California and California which has a very aggressive renewable program somewhat like Hawaii But they have a different kind of alternative sources to gain from And we can't hear Lucy and right now we're gonna take a short break We'll come back and try to connect better with him. This is energy in America. I'm J. Fidel. That's Lucy and Plurisi We'll be right back Hey, loha. My name is Andrew Lanning. I'm the host of security matters Hawaii airing every Wednesday here on think tech Hawaii live from the studios. I'll bring you guests I'll bring you information about the things in security that matter to keeping you safe Your co-workers safe your family safe to keep our community safe We want to teach you about those things in our industry that you know may be a little outside of your experience So please join me because security matters Allah Hi, I'm Rusty Komori host of beyond the lines on think tech Hawaii My show is based on my book also titled beyond the lines and it's about creating a superior culture of excellence Leadership and finding greatness. I interview guests who are successful in business sports and life Which is sure to inspire you in finding your greatness Join me every Monday as we go beyond the lines at 11 a.m. Aloha I'm J. Fidel of think tech our flagship energy show among the six energy shows We have is Hawaii the state of clean energy it plays every Wednesday at 4 p.m Come around and see us learn about energy keep current on energy on think tech Hawaii dot com Aloha and welcome to at the crossroads. I'm your host Keisha King. You can catch me every Wednesday Alive at five. I'll see you there Hey, loha. My name is Andrew Lanning. I'm the host of security matters Hawaii airing every Wednesday here on think tech Hawaii live from the studios. I'll bring you guests I'll bring you information About the things in security that matter to keeping you safe your co-workers safe your family safe to keep our community safe We want to teach you about those things in our industry that you know May be a little outside of your experience. So please join me because security matters. Aloha Okay, we're back with Lou Pooley. We see the CEO of e-brink in Washington, DC Talking about energy in America and specifically what legislation might be helpful useful in order to reach A goal I'm not saying what year but a goal and say 2030 2040 That would help us, you know achieve Renewables in in a larger percentage Who's to say a hundred percent or what but what what what is your thought about the legislation? What did you thought about this administration? Are they doing anything and could they do more? So of course you could always do more the question is what the cost-effective strategy is going forward What are the major research? Achievements you need to do and I once again I had to refer to the breakthrough study that was issued this morning by You know energy futures group One thing that people don't like but which is an enormous source of power and A carbon-free power is nuclear power, right? This is not an issue for Hawaii because the scale is too small, but for the continental United States I think you know monies You pointed out that look you need nuclear power the environmentalists who resist this we have new technologies and nuclear power that can deal with waste management and Nuclear power produces a lot of energy at zero carbon emissions It tends to be expensive, but it's not as expensive as some of the renewable alternatives so the future of a lesser carbon emitting power sector a lesser power emitting energy use in North America requires more gas more nuclear power and Probably you know more carbon-efficient automobiles and That will allow more electric vehicles to you know right now most electric vehicles in California are coal-fired People don't want to say that but that's what decayed this and then I think the other dilemma the other dilemma that politicians and when you headed academics and all the well-meaning union of unconcerned scientists is what does this stuff cost and unless the sort of community of researchers and the potent of a more Carbon-free environment Can present to the American people a strategy which is cost-effective And if they can do it in a way without lying to them telling them it's free We're not going to get along. It's very expensive and there's a priorities question I'm going to spend the money on universal health care Or one energy and they're both big big bills and which which is more important and what what's the timing? This is this is an issue We should follow you and me Lou as we go forward because I think it'll be it'll be on the on the radar all the time But let's move south for a moment. Let's move to Mexico City You were there at a conference just a week ago, and I'd like to find out what happened because we're actually on the way To Caracas So you can tell us about what's going on in energy in Venezuela. So let's let's make a stop in Mexico City on the way to Venezuela So I I participated in the energy Mexico 2019 which was both petroleum and the power sector in Mexico And there's two or three kind of issues now first over door He is a Populist as you know, he has Opened the state mansion to as a museum. He doesn't live there anymore He has turned the Mexican plane airplane, you know, the state airplane Put it out to be sold to travels coach class when traveling around Mexico in fact one of our Researchers in Mexico City showed me a photo of a girlfriend Who took selfies with overdore in the coach cabin going from Mexico City to Veracruz. So He's extremely popular but I would say the the new Regulators and the chief of this administration at very little you know genuine deep knowledge about energy and The Mexicans are going to have to Deal with or under come to understanding in the next couple of years What do they do about? Cheap gas from the United States because right now The US produces lots of natural gas some gas from Texas is actually you have to pay to take it away Mexicans are using this gas to replace fuel oil and clean up their environment Air quality Mexico City is very high. It's very nice and the new energy model of the last administration which allows for private development of Mexican Oil and gas reserves is generating a lot of revenue and one of the one of the mission missions of President over door and low as we call him is To address these problems of poverty in Mexico And you know how we discussed before on Mexico is a modern industrial economy It's not a major exporter of of energy. It is an energy user So it's going to be very interesting How and low addresses these problems? Because he moved into office With a very populist message that Pemex would do more and and so one of the things we're trying to do Is engage with the right people down there and say okay, what does the research show? What if the condition show what's really the right strategy for you guys? You're a trip down there and you're reporting on this and and and the development of Mexico as a Closer to a first world country Maybe it is a first world country already it shows that what happens below our border Is very important perhaps more important now that it has been and what happens below Mexico is also important Perhaps more important than it has ever been and we have we have a huge Degradation in the in the quality of life and the economy and for that matter oil exports from Venezuela And I would really like to get your thoughts on what is happening with oil in Venezuela And how that's likely to play out vis-à-vis the the United States and for that matter other countries who who import oil from Venezuela right, so as you know the the Under the Venezuelan Constitution The head of the National Assembly Guaidó right has assumed the presidency of Mexico and one of the issues here is how to What reaction should Mexico's trading partners The International Diplomatic to be how should they address this ongoing crisis in Mexico? And one of the things that is happening with these new set of sanctions by the administration is the United States was one of the first countries to recognize The new assembly president as the interim president of Mexico And I think we have a couple of pictures to show here And maybe we could put the for the first one there to show you what what's going on with Mexico and the crisis in Mexico Okay, let's put that Yeah, okay, we can start with this picture. I think this picture is very interesting because You could take a look at who recognizes Guaidó as the interim president right in the beginning was just the u.s. And it's you Latin American countries this is pretty recent and you can see now that Canada the USA almost all of Latin America and Most of the European Union I recognize them oddly enough Mexico is still kind of calling for new elections are on the sideline And so what you have here is a really interesting Diplomatic outcome because you have a series, you know have Maduro who is a kind of terrible Terrible dictator of also mismanaging the whole national economy in poverty wants the richest country in Venezuela and He's supported by a real cast of pariah characters Russia China probably North Korea Cuba And on the other side all the world's major democracies are recognizing the Guaidó so One of the things the US has done and what's are getting a lot of cooperation is They have essentially going to be winding down by the summertime all US company operations in the Mexican oil and gas fields, right? But there's a little known thing people I don't think I've understood the u.s. immediately is I mean, I think not immediately within the next two months will be banning the export of something called diluent in diluent is a very light petroleum product and That light petroleum product is essential We're blending into the very heavy crude in Venezuela for its export market and a third part of it is that The sanctions the U.S. imposed on Venezuelan US is one of the is probably the main purchaser of Venezuelan crude oil Because we use it heavy crude oil and not very specific to get a refiner's But then it was the way ones will be Forbidden to continue to export this to us, but any funds from that sale will Be put into escrow and the administration is looking for ways to let the new Interim president get access to it. This particular picture doesn't provide a full View of the rapid decline in I feel we lost part of the picture there But true, but I can just tell you now that from August of 16 to today Mexican on the Venezuelan production is down six to seven hundred thousand barrels a day and So much of the Venezuelan production is been committed to repayment of loans to Russia and China and it's going to be very interesting to see Particularly how China deals with this because it is clear that their major Markets throughout Venezuela and throughout the rest of the world Looks to China and say look these guys are bad actors You're probably gonna You know take a little debt restructuring here. You've already done you're probably going to take a lot more But do you really want to be seen backing this thug who was impoverishing the Venezuelan? Well, but for now They're friendly with him and for now they're happy to have his oil. Yeah, and for now Go ahead. They have to reach they have to restructure many of their loans to Venezuela and Whatever they were getting I see two to three years ago. That's been cut back dramatically So the what the Venezuelans are continuing to repay the Chinese But they're kind of like a deadbeat renter. They're just paying them a little bit. Everybody. They're not repaying the loans in any In any substantial way So I'm wondering what you know how this is going to affect world oil markets Maybe it's already affected world oil markets. What percentage of world oil comes from Venezuela? Where does it go and how does it affect the the price at the pump for example? Yeah, so right now we think that See the world oil market and world oil suppliers produce about a hundred million barrels a day One quarter of the world's production is produced by three countries today Canada the US and Mexico worth about a trillion dollars a year and It's a net exporter to the world market and as a result of the shale Revolution improvement even in Mexico under the previous administration the continued expansion in Canada of some of the heavy oil even though there's been some setbacks that This North American production platform is a net exporter of oil and gas to the world market Venezuela represents about 1% of world production and Because so much is declined and With oncoming production in some other parts of the world our particular view is this is going to have no effect We're not going to even notice it at the pump and most of the prep So if you were going to put petroleum sanctions on Venezuela now's the time to do it Okay, now what would it take what would it take for that chart to reverse itself Lou the chart was down to was six or seven hundred thousand barrels a day So what would it take to go way up into the millions? to restore Venezuela's Production platform let's say it's going to be at least ten years. Oh, wow Now you can get some improvements early on but to get back to the You know the heyday years are How like on days of the 70s early 80s It's going to be at least ten years and it may take much longer and restoration of the Venezuelan economy It's going to be an enormous task for the entire world. I just think the amount of damage Chavez and Madura has done to the Venezuelan Infrastructure to the national economy to the people of Venezuela. There's been such a huge brain drain It's going to be a Herculean path. It's going to take quite an effort Oh, that's so tragic because it was it was really getting to be a very advanced country In the direction of Mexico as you described it and it was a middle class there There was a certain level of democracy there. And this is a huge step backward Is in the 1970s Venezuela was the richest country in Latin America Yeah So is it is it too simple for me to say that if Maduro stays in power The oil production numbers will stay down But if they were a no-state They will continue to crater because in the absence of getting access to diluent this very light sweet petroleum product Venezuela is in a very serious position. They will not be able to There are capacity to produce crude oil and actually prepare it for export to world markets It is going to decline dramatically. So However serious the situation now it's going to get much worse much quicker And so the question is as you know the Venezuelan Military uses Maybe several thousand Cuban Assistance intelligence officers to maintain control. They've lost one general as defected but and I think as the I think the thinking is as the funds get kid up cut off and the corruption opportunities decline At some point the military will turn against Maduro Might not be the general but it's usually the colonel that do this Yeah, and the people in the streets We had a show yesterday from some Venezuelan people who could speak to this the people in the streets all favor Guaidó and The likelihood is if you if you put it to a vote or if you if you let the people decide They would they would favor Guaidó right away immediately and Maduro would be out of a job So let me offer you one piece of advice, you know I know you go to these conferences you go to conferences about oil and gas Everywhere in the world. We follow your tracks I think we should have a map on the wall of all the cities In the past year, maybe you have a map like that Would you please at least until we speak further would you not go to any conferences in caracas? All right, stay out of Venezuela I haven't been to Venezuela for over 15 years, and I'm not planning to go there Thank you, Lou. It's great to catch up with you. I look forward to our next discussion two weeks hence Aloha and happy Valentine's Day Thank you