What is the role that you have as a climate policy ambassador, adviser to
creating energy policy here in the US? Well, I'm not I'm not creating energy
policy in the US that has been created, although I'm
contributing to the discussion obviously in ways because of the international
impact, global components of this. This is not the climate crisis is not a
bilateral or one nation event. Everybody in the world is engaged in
this and impacted by 20 countries. The 20 largest economies in the world
are responsible for about 76 percent of all the greenhouse gas emissions.
So we have to get, you know, internationally.
People have got to come to the table. But the president has arrived at policy
through the internal deliberations led last year, two years ago.
Gina McCarthy was the head of the domestic.
And they pulled together what we call our reduction target.
And the question, because President Biden is saying we need more oil now.
But at the same time doesn't want oil in the future.
And that feels confusing when you're at Axion, developing shale in the US.
I understand it can sound confusing, confusing.
The demand is there globally and people are demanding that we keep our economies
moving. You can't suddenly just shut off your
economy and shut off the heat and shut off the lights.
You have to keep things going. But at the same time, you can stay
focused on reducing the emissions that are the byproduct of providing that
energy that keeps your economy moving. And so now Germany, for instance, right
now, Germany has lost its gas from Russia, but they've cut it off.
They said that's enough of that. We're not going to be held.
Prisoners of the petro dictators decision weaponized our energy.
So Germany has now deployed 50 percent of their energy is coming from
renewables and they're heading towards 80 percent of it coming from it.
So what's there's a shift taking place in the marketplace.
That shift will continue at the same time.
Germany, for example, is still going to need, say, LNG from the US and LNG.
Yes. Mother country.
Absolutely. But that doesn't that go again?
Because. No, because we are in transition and the
transition by 2030, we need to hit a target of at least 45 percent reduction
in the United States of our greenhouse gas emissions.
The president has set a goal of 50 to 52 percent reduction by 2030.
So we have time now. Companies are only just really,
you know, getting the bit in their butts, if you will, there.
They're starting to move and every company is starting to move.
They're reducing their own emissions. They're looking at ways to to have a
clean supply chain. There are a lot of people now, including
oil and gas companies, who are moving to find ways to produce their product
energy, which has come up, let's say, gas in particular.
But by capturing the emissions that come from that gas.
So I guess the question becomes, how are the conversations involving, say, with
China? You have a geopolitical backdrop that's
very challenging. You have a trade war that continues.
It gets a little smirking, but true. No, I'm.
I'm smiling about it because it's a problem.
So how do you have conversations with your counterparts when there's this
backdrop that's really hard? What's gotten harder than it was a month
ago, for example? It's gotten a lot harder than it was
last year or the year before. And that's a shame because this is not a
bilateral issue. Not it's not it.
You know, China has as much need to have us be successful in dealing with climate
as we do. And it's a global issue where China is
30 percent of all the emissions on the planet.
We're about 10 and going down. And and
so the fact is that if China and the United States can't find a way to move
forward and cooperate on this, it's going to be a much harder race for
everybody else. Can you cooperate with China on climate
and not on other stuff? Well, I believe you can,
but it's difficult. What's gotten harder about the
conversations in the last six months? Well, I think I think,
you know, we believe that there are certain things that we think
China needs to do. And China believes that certain things
they think we need to do and the dialogue has been
interrupted because of certain events that happen, like, you know, the
shutdown over Taiwan and now the balloons that have traversed us.
It's a difficult atmosphere and we have to find a way to be able to communicate
to each other, find out where we can. Cooperate and be able to manage some of
the very difficult issues that do exist. But there are a lot of working climate
is the biggest single, most important place we should be able to find some
cooperation because we have to literally life and death.
Depends on the United States and China being able to find a way for where it
isn't. Wind is.
Its solar is. LNG is a decarbonization.
Like what in that can you guys agree on? We did agree in Glasgow and we
reaffirmed it in Sharm el Sheikh at the cop meetings that we would cooperate on
methane, trying to reduce the methane levels.
We would cooperate on their transition and our transition from fossil fuels,
unabated fossil fuel to renewables. And we agreed that we would deal with
deforestation together. So we have the basis of an understanding
of where we agreed to work on that work has been interrupted as a consequence of
the tensions that exist today. My hope is President Xi will see the
virtue of China, the US cooperating here to begin to open up the possibilities
that we might even open the door to other conversations from other folks
that deal with some of the other issues and their big issues.
Nobody should pretend they're not. Having said no, I don't think we are.
So if we do on a short term level basis, if we go into recession this year, if
central banks take too much NIKKEI growth, if companies profits fall off,
their top line gets crimped, does that delay the energy transition for you?
How do you see it? Well, I like I hear chit chat about
recession. No recession.
I think we're wasting a lot of energy to do that.
I think we have good sound economic policies in place now.
The Fed has made its decisions. Our unemployment is at a record low of
6, 65 years or so. And I think my sense is that it's
critical for us to stay focused on the climate challenge.
Why? Because it's not going to be affected by
that, by the Fed directly. The climate crisis presents us with real
challenges of not funding death. It will.
And for companies to want to spend, if they make a billion dollars versus 3
billion, that's going to affect how they're going to wind up spending it,
etc.. So from that and cost of capital wise
right now, a billion dollars would sound good for the climate side because we
have a Congress that is not ready to put money into this effort.
And the way that we did, with the exception of the IRS, which is an
extraordinary historic piece of legislation that will have a profound
effect on what happens here in the United States and therefore around the
world to deal with the private capital, to follow it at their cost of capital
goes up. That's going to hurt their ability to do
that. If the cost of capital goes up, that
could slow down the capacity to make the transition.
No question about it. How do you fix that?
How do you fix that? I think that more government help.
Is that is that gonna be the thing? No.
I think that the Fed will balance, in my judgment, and is gonna look very
carefully at how we proceed there. With respect to interest rates and the
speed of and where the inflation is at that moment in time, unemployment is
already at a low enough rate that it's very hard to see how that's going to
have an impact here. But the climate crisis is a crisis unto
itself. We're finding the money for Ukraine.
We are doing what we need to do, which is appropriate, which is very important
for the United States to be true to its promises.
And the stakes are very high in terms of the future potentials of war in various
places. So that's important.
But we have to find the money equally for the climate crisis because it's
moving every day without any sort of relaxation or any slowing down.
At the moment, it's speeding up. And so we have to find the money to be
able to put into that. At the same time, it feels like and this
is a hot topic here among oil people. This is perfectly epitomized by what's
happening in Alaska with Willow. Everyone's waiting to see whether
President Biden is going to prove CAC project in Willow, Alaska.
Should he be an unfair question, but should he?
I mean, this is people wanted their environmentalist don't, but the people
do kind of go needs the oil. The world needs the oil.
But it is also Alaska. And maybe you want to drill there and
say what the first priority is before we get into the subject of opening one area
one. That's that's not going to be
determinative here. What we need to do is have the
permitting reform that is going to prevent that.
A lot more decisions about where our options are.
As to what we do. And if we don't have permitting reform
and accelerate the capacity to be able to do it, we need to do to meet the
climate crisis. We won't win the battle.
You can't take 10 years to make a decision whether or not to deploy a
solar field or a wind farm or whatever it's going to be.
We've got to be able to cite things faster.
We have to move faster. And it's very important for our
democracy to prove that we have that ability to work and function because,
you know, we've seen extraordinary events happening all around the world as
a result of the amount of warming of the planet that's already taken place.
So if you look at the flooding or you look at that extreme heat, 10 million
people die every year from the extreme heat, 10 million people plus die from
the. The lack of quality air as a result of
the particulates that come from the burning of fossil fuels that are in the
atmosphere. So we have a responsibility to make sure
that we're dealing with that broader, larger security issue.
And one or two decisions here and there about a paper about opening up an area.
Those are not going to be determinative in this.
What's going to be determinative is whether or not we've laid the
groundwork. And we have fully funded the ability to
be able to capture emissions, reduce emissions and transition to a clean
energy economy. Last question to this point, I'm asking
all the guests this, what's going to drive?
What's going to power up your car in 10 years?
And that could be like the light switch from your home that's going to power
Evey. What's going to what's going to make it
run? Well, I believe in the United States,
the automobile industry has made a decision and they are going electric.
And the automobile industry has made clear that by 2030, 50 percent of their
vehicles will be electric, that they're selling.
And by 2035, they will only sell electric vehicles as new vehicles.
They will be therefore, it will be necessary to have sufficient power that
is being created electrification in order to be able to power those
vehicles. And that's fully within the capacity of
the United States of America. The the electric utilities understand
this. They're preparing for it.
But we still need the siting ability for transmission lines and other things so
we can fully power that transformation. It's absolutely critical.
And I think it's very exciting. It's going to create a lot of jobs.
The president has focused on jobs and on the economy.
And this is going to be the largest economic transformation we've had since
the original industrial revolution. I think it's exciting and I think we
should look forward to it, an American capacity within it because of the
Inflation Reduction Act. The United States has an extraordinary
opportunity here to be leading.