Dr. Scott Tinker, Switch Energy — Finding the Radical Middle  (#65)

“I think the challenge with the renewables, the solar and wind and batteries is. People said they would be cheaper and they’re not. They are in some places at the plant gate, but not to you and me, as we’ve already discussed. They said they would be reliable and they’re not because you have to have something else to back them up. And they said they would be cleaner. And the definition was very narrow. It was a clean in the sense of CO2 emissions, not the mining.”

— Dr. Scott Tinker

Scott Tinker is a globally renowned geologist, energy expert, and advocate for balanced approaches to energy, environment, and economy.

In this episode, Scott shares his perspectives on the “radical middle,” addressing the complexities of energy systems, climate narratives, and the future of sustainable solutions.

Scott unpacks the challenges of energy poverty, the myths of energy transitions, and the pivotal role of innovation in driving global progress.

In this episode, Scott and I discuss:

  • The concept of the “radical middle” in energy policy.

  • The global realities of energy poverty and its moral implications.

  • The role of hydrocarbons and the challenges of renewable energy scalability.

  • The resurgence of nuclear energy and its potential for global impact.

  • Innovations and investment opportunities in the evolving energy sector.

  • The intersection of policy, markets, and technology in shaping the energy landscape.

Please enjoy!

Listen to the episode on Apple PodcastsSpotifyYouTube, SoundCloud, or on your favourite podcast platform.

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The transcript of this episode is included below.

Note: Transcripts may contain a few typos.

Transcript:

[00:00:00] Jamie: All right, Scott Tinker, welcome to the Resource Insider podcast. Thank you very much for joining us today.

[00:00:10] Scott: Jamie. It’s great to be here with you.

[00:00:12] Jamie: Well, I’m going to try to fit this into an hour, but I have a lot of questions for you and I’ve been preparing for this podcast for a very long time. So, thank you for taking the time out of your very busy schedule to Particularly so close to the holidays. So, we’re a couple of days away from New Year’s. We’re kind of in the little break between Christmas and New Year’s. And I’m appreciating you getting this on the books before the end of the year.

[00:00:36] Scott: Happy to do it very much. And since you haven’t shared the questions, I’m sure we will be very candid as we go forward and spontaneous.

[00:00:44] Jamie: Yeah, I’m sorry. I probably should have sent them through. So. I actually would like to start talking. Sometimes I get criticism for talking too much on these podcasts, so I’ll try to keep it brief, but about how I heard about you. So, I first came across your work or as I’m sure many other people did. After listening to an interview between yourself and Jordan Peterson. And then I followed kind of down that rabbit hole and I saw the presentation, the talk you gave at his conference last year, ARC in London, and I was really excited to listen to that conversation and hear that presentation because I felt like. You had articulated a mindset and a worldview that really closely paralleled my own in a way that I’d been kind of striving to do on this podcast and in the works, we do at resource insider very well. And so, I was excited to hear that. And that’s why I reached out to you. And we’ve had numerous interactions since then, but for viewers at home, I just kind of wanted to give that. That backstory and for people who haven’t seen your work, Scott, can you give us the high-level overview of who you are, what you do and how you got there? And we’ll obviously dig into that in some more detail over the next few minutes.

[00:02:01] Scott: Sure. Yeah. Well, it’s always good to visit with people who agree with us. Thanks for the nice intro. Yeah. I’m a geologist. By training and background and profession was in the oil and gas industry on the research end of it for 17 years. And then left that to join the university of Texas at Austin 25 years ago now. So been doing this a long time. I’m a global explorer, energy explorer. I’ve been in over 60 countries. Jamie had been fortunate to do that and deep into them seeing probably the poorest of the poor and the richest of the rich and everything in between as we’ve looked at energy systems and their environmental impacts and economic impacts around the world. So my career has taken me down lots of places both again, academic service, industry service, some government service and All that comes together in what I lovingly call the radical middle, which is where we actually try to solve real problems, you know, not getting too far out on the edges anywhere, but the practical data driven compromise world of overlap space between those entities and in a sense, the energy, the environment, the economy. So that’s been my passion for most of my career, actually. And it’s where I’m still playing around. And I think we’re making headway.

[00:03:16] Jamie: And what I really like.

[00:03:18] Scott: Hold on just one second. Oh, sorry.

[00:03:23] Jamie: Dangers of working at home during the holidays.

[00:03:24] Scott: I didn’t tell anybody I was on a podcast.

[00:03:27] Jamie: Yeah. Well,

[00:03:28] Scott: I’m on a podcast sweetie.

[00:03:30] Jamie: What I really like about your work was exactly what you mentioned there. It’s sort of finding that balance between energy, the economy and the environment. I think, you know, in your presentations, you have a great sort of graphic that demonstrates that and finding the radical middle. And can you kind of give us an overview of what that means, the radical middle? And I guess what made you start thinking about that earlier in your career?

[00:03:57] Scott: Yeah, I Can briefly define what I mean by that. And it’s that overlap space between challenges in this case, the energy world, the environmental world, and the economic world and how those all relate and what’s that overlap space look like. And again. Every single energy component has an environmental and economic impact, and I think in many ways, vice versa, Jamie. So, as you deal with this, you begin to realize that you can’t address these big challenges unless you’re willing to play with all of those things. I came to it as most things just slowly and through time and trying to understand how to get things done in that world. And it’s not easy space. You know, in that compromise world, that data world, you’re not always going to be dramatic or go viral because you make some wild statement about something. And it’s where I’m wrong oftentimes, or not completely right, let’s say. I like to, I described it to Senator Manchin’s hearing in which I testified a few years ago. The Senate Energy, for those in Canada, the Senate Energy Committee here in the US in Washington as more than, completely factual, but factually complete.

[00:05:19] Jamie: Right

[00:05:19] Scott: And it’s that effort, nobody can be factually complete. There’s too much out there, but it’s the effort to try to be as inclusive of the various components of things as we can be. And that’s what the radical middle is and it’s been radically lonely for a long time, but I think it’s starting to grow and the people that play around in there really are some, in my opinion some of the real leaders in the environment, by the way, or in the economy or in the energy world. And that’s what we’re trying to do there. And I think it’s it’s working, you know, there are a lot of people that are engaging now and willing to engage in that complicated overlap space.

[00:06:01] Jamie: Well, something that was so interesting to me is your talk at the ARC conference the YouTube video got something like two million views now, I think it’s the most viewed the most viewed presentation from that conference. And you mentioned, you know, that was been a lonely space for such a long time, but it would seem that, Maybe the rest of the world starting to catch up to you because probably four or five years ago, I think I would have been pretty surprised to see a talk about energy the economy and the environment be one of the top viewed podcast at a, or rather in videos at a, at an event like that.

[00:06:35] Scott: Yeah, that was a neat event. It was the first of its kind. They’re going to host it again in February in the coming year. And I’ll, I think I’m going to kick off the energy environment piece there. But they had, you know, faith and family. They had education, they had healthcare, they had government and policy. It wasn’t just an energy and environment conference of fun, music and the arts. So, yeah, I. I guess that may be true. Jordan asked me that on his podcast. Why are so many people watching this? Yeah. And I said, I don’t know, Jordan, maybe they’re bored. But it is, it’s that because it touches all of us and we are very much inundated. Particularly with the climate side of the environment, I think of environment broader than that, but let, you know, the climate piece, we’re very much inundated with information and sometimes fear about what’s going to happen to us in a warming world. And I think people want to know more. They think in their gut, Jamie, they get that it’s not a binary, good and bad, clean and dirty believer, denier narrative. Nothing’s that way. People know this. We’re all decently intelligent. So, they want more. And when you try to ravel some of these things in or unravel some of it, I should say, I think it’s more satisfying. They don’t like everything, but it tends to be more satisfying. And like you, people start digging in.

[00:07:59] Jamie: Yeah, well, I kind of came about this in a really roundabout way. So, I mean, as listeners will know, I spent the majority of my career in the mining industry, working on mining projects and in mining companies. And the mining industry has somewhat surprisingly, but though not really, if you’re in it. Found a way to claim a very virtuous role in the energy transition of, you know, we’re fueling the energy transition. We need copper and lithium and nickel and batteries and electrification. And, you know, without mining, there’s no, you know, there’s no renewable energy, et cetera, et cetera. And you know, every mining conference, every event has kind of latched on to that narrative as the driving force behind why you want to own metals and mining and why mining is a relative or a relevant industry. You know, 20 years ago was the rise of China. Now it’s the rise of renewables and electrification. And so, I was really quite in that bandwagon and I was like, okay, great. Like, you electrify everything and people are going to buy a boatload of copper. And, you know, I’ve invested all these companies. I’m going to be rich and it’s going to be great. And as you know, I started a carbon credit company where I’m the chairman. And again, this very much fits into that narrative that there’s going to be a push towards net zero or decarbonization or what have you in that world. And then being much more heavily ensconced in that, especially with carbon credits, I started thinking about, well, why would people buy carbon credits? And what are the actual realities of emissions look like? And what is the realities of energy demand look like? And I was shocked actually at how the narrative of decarbonization that is happening right now is. I would say my words are very disingenuous right in that renewables are growing and electrification is happening, but we’re consuming more oil, more coal, more gas than at any other time in history and the whole energy pie is growing and growing. And the energy transition is really not happening at all. In my view, there is an energy addition happening, right? There’s more wind farms and solar panels and what have you, but it’s not in any way to turn from the growth of fossil fuel consumption. And I kind of think, where am I going with that question? What I’d like to kind of open this conversation with in some ways is helping people kind of have that eye opening moment that I had, which is like, oh my God, this is so much bigger and so much more complex to solve. Then I think the common narrative is letting on and we can’t even begin to think about solving the problem, you know, depending on what that problem is and how it’s identified. Until we actually understand the scope of it. And I don’t think I don’t think even most people who are in the climate industry have any concept of the scope of the problem that they think that they are trying to address. So that’s a very wrong way to sort of open that. But can you start by just giving people an understanding of how big fossil fuels is and how important that is to what’s going on in the world or to our life in the world right now? Yeah, I guess I should say.

[00:11:21] Scott: No, it’s a very, those are good observations. And I think a real framing let me come at it from the perspective of humans. I’ll start that way. And the concept of human flourishing, if you will, I made a couple of feature length films with Harry Lynch. He’s the, Producer, director, I’m just the pretty face, you know, we partnered out there and we made one on energy we released in 2012. So that’s a dozen years ago now and filmed in 9 and 10, a long time. Went to 11 countries and looked at the best energy in the world, pros and cons of that. And it was a very popular film, 50 countries and lots of languages and continues to be shown even all over the world. And then later we got together and said, you know, we left off a big chunk of the world. Those who don’t have much energy or any or are growing into energy. So, we made a second film. The first one was called Switch. And the second one is Switch On. And that film looks at energy poverty. And I think we, again, we were the first probably to put out a film on energy poverty. And it’s since become a very popular topic for good reason, different countries, five different countries. There are people who turns out people who are living in some state of energy poverty represent about 60 percent of the world or more. So, there’s the abject property, the like dirt mud huts, no clothing, food, you know, very just abjectly poor. But then there’s this emerging group of 1 to 2 billion. That’s about a billion people, by the way, another 1 to 2 billion that are starting to come out from that. And another couple billion who let’s call them developing as opposed to developed out your window. And behind me, we are developed. We are rich. So, this huge body of humans, 5 billion people or more that don’t have access to affordable, reliable energy on a daily basis. That’s a moral challenge. It’s a moral question. It’s a reality. So, when you talk about energy addition. And I’ve used that term as well. As these people start to come from a very low per capita consumption level to one that is closer to ours, not even ours, but closer, we need more energy, the world is going to need a tremendous amount of energy to allow for that growth. So, we can’t, when people say energy transition, I think they hear going from what’s today to something different tomorrow, in that case, it would be going from coal oil and maybe even natural gas to solar, wind, electric vehicles, and ironically biofuels, which, which are just low-density hydrocarbons, you know, carbohydrates very interesting irony there. So going from fossil fuels to so called renewable energy, that’s what people think of in a transition, and that’s not what’s happening. And by the way, it’s not what’s going to happen, and I’ll be even a little stronger. It’s not what should happen, and what do I mean by those statements? Solar and wind, if you think about the amount of energy that’s collected in a unit of area, that’s because the sun and the wind are collected. So, we call that surface power density. It’s watts per meter squared. They’re very low density. You don’t get much energy from a square meter of sun or a square meter of wind. Takes a lot of surface to collect enough energy to do useful things for modern society. And that’s fine. The sun and the wind are out there. They’re free, if you will.

[00:15:09] Jamie: Yeah.

[00:15:10] Scott: But we have to, you can’t put the sun in your car. So, you have to collect it and convert it. And you mentioned mining. So, the collection systems, the solar panels, the wind turbines, the chemical batteries, lithium ion today, maybe other kinds of cations and anions in the future are mined. They’re mined from the earth or manufactured into these collection systems, and then they collect that low density energy and turn it into electricity, which does some useful work for us. And it just takes a tremendous amount of stuff to do that. Mine stuff, land stuff, water stuff. It wears out. We dump it back into the earth. And I mean that we don’t recycle and reuse it and we do it again. So, in a Ted talk a couple of years ago, I said, there’s no renewable energy to 1100 students and I had on Kevlar. So, I’m here still alive to talk to you today. The eyes got really big, you know, what the hell did this guy just say? No renewable energy. I’ve learned renewable energy in this case, they’re college students, my whole life. That’s like saying, you know, there’s no gravity or something, but what I meant by that, it comes from the earth. We make it into collection systems. We dump it back when it wears out and do it over and over. So that’s not renewable. That’s just a different form of energy collection. And I think. The challenge with solar, wind and batteries, they have a useful place for sure. And I’ve installed solar. We could talk about that, you know, down an indigenous village in Columbia, but they, you simply can’t get enough earth material and use enough land to collect the amount of energy that this growing, evolving, emerging, developing world is going to need for the future. And even if you could, it wouldn’t be in the right form because, you know, unfortunately physics makes solar and wind intermittent. And that is important. Some people will try to push that aside. Well, we can make up for that with batteries. No, it makes it intermittent. Night happens, clouds happen, non windy times happen. And so, we love energy 24/7, 365. So, I gotta have something else there when that isn’t working as a redundant, expensive backup. So where are we headed instead in this transition? And it’s been happening for centuries now, a couple centuries, is toward denser forms of energy. Things that, the bang for the buck takes less stuff, okay? And so, what are those? Nuclear is probably the leader. Uranium and thorium, radioactive elements used to, when you split them apart, fission, they make a bunch of heat. And that heat boils water, makes steam, turns a turbine, runs a generator, and makes electricity for us to use. And it doesn’t take much uranium and thorium to make a lot of electricity, a lot of heat. So, you’re getting a tremendous bang for the buck there. Not much land, not much earth material, no emissions, and always on. Okay. Well, what’s the problem? Well, there are, there’s problems with everything. There’s pros and cons or trade offs with everything. You know, the problem with nuclear is you’ve got a radioactive waste product, a fission product, not waste, but a fission product or that you have to manage and deal with. And that’s the big challenge. And it’s doable. We are, we’re handling that in reactors around the world today, but it worries some people. Now, another, ironically, maybe in some folks’ heads, another very dense form of energy is natural gas. Methane, CH4, one carbon, four hydrogens, or other kinds of gases. Gas isn’t dense. It is when you, by unit weight, okay? So, when you think about, bang.

[00:18:51] Jamie: Does that mean by the like the amount of energy per unit weight? It’s

[00:18:55] Scott: Correct. Yeah, correct. So, if you think about a an exajoule or a megawatt per unit weight a kilogram or whatever. Natural gas is denser than even oil or coal or wood, and you can’t weigh the sun and you can’t weigh the wind. And that’s why we went to a surface power density. Another Canadian boss, Vaclav Smil came up with that but my unit weight, natural gas is very dense. So, you get a lot of bang for the buck. And that’s why we’ve been transitioning from dung and wood and hay through coal and then liquid hydrocarbons toward natural gas and nuclear. For over a century now, we can try to go back to the sun and the wind. Those were the first forms of energy, by the way, we had windmills, not wind turbines, windmills to lift water and solar energy grew the hay that ran our vehicles, oxen and horses and different things. So those have been around forever. We can try to capture that low density energy, but it is a very minerals and metals and land intensive process, and that some of us might argue isn’t very environmentally green. If you will, it has a place. Don’t get me wrong. I’m not against solar and wind. I’ve not at all. I really am not. They have a role to play, but the transition is not from something to that. It’s toward denser forms of energy, and that would shock some people. Probably maybe some of your listeners. I don’t know. But that’s where it’s headed. And has been headed with growth and different wedges to help supplement that transition and it’s a good, it’s a good change less is more, you know, and that’s true in the energy world. That’s certainly true in the environmental world. Less impact is more.

[00:20:46] Jamie: When you know, when you tell me this all seems very, I don’t want to say obvious, but it all seems very logical to me that it obviously makes sense. And I think, you asked about our listeners, it will be very logical to our listeners as well. On the other hand, you’ve got a group of college students that you talk to regularly. And, you know, they I can see why that would be very surprising for them as it goes against maybe the common narrative that they’ve been inundated with since birth. But I wonder, you know, more importantly, you know, you’ve had the chance to talk to business leaders, but I think more importantly, political leaders and government officials all over the world. Is there a recognition of this sort of physical reality amongst the majority of these people that you talk to? Or or are they kind of living in their bubble of only renewables all the time, no matter what do you find there? Are the higher levels of government that you’ve talked to? You don’t have to obviously mention any names or anything like that, but you can.

[00:21:51] Scott: And you also asked me where do hydrocarbons fit in? And I didn’t even answer that question, but let me write that down. I’ll try to come into that. The political leaders and business leaders. And even the university leaders, it varies by where they are. So, I’ve been in 60 countries, luckily. And you know, in Asia, I think they’re pretty clear eyed on this. They know what it’s going to take for them to grow and it’s going to take a lot of everything. That’s why they’re leaders in solar and wind. They are manufacturing, let me step back. They own the processing of the metals, 80% of the processing, the metals on average, some a 100%, some 50 for the metals in the world, China does brilliant, bought it with belt and roads initiatives and other investment initiatives. So, they process those key metals. They manufacture the solar panels and the wind turbines and send them out to the world. And they, they really control the supply chains for solar, wind, and batteries. And that was a brilliant move. They need to, because they don’t have a lot of hydrocarbons. They’ve been looking for them, but they don’t in their own country have, China doesn’t at least have a lot of hydrocarbons. So, they went down a different road. And that’s a good thing for them. Probably pretty wise. They’re pretty clear eyed about this story. They’re building the most nuclear reactors today, along with Russia, China and Russia, 70% of the world’s nuclear, et cetera, mining the most coal and burning the most coal for affordable, reliable electricity with high environmental impact. So, there’s the trade offs to them. Now, as they come, the Middle East understand this a lot lower population, but they get it. Now they’re betting their game oil and gas. That said, the UAE is now built for nuclear reactors. They’re operating in the Middle East.

[00:23:39] Jamie: I didn’t know that. Interesting.

[00:23:41] Scott: Yes. Yeah. So, they get it.

[00:23:44] Jamie: Over what time period would you say they built those?

[00:23:47] Scott: It took about five or six years.

[00:23:49] Jamie: Yeah, how many nuclear reactors have been built in the U. S. in the last five or six years?

[00:23:55] Scott: Yeah, only one very expensive one on a brownfield, Plant Vogel, Southern Company. It took more than twice as long and twice as much money, and it was on an existing site, but it’s coming. So, I would say the people that are emerging and particularly developing understand this now they’re happy to have Europe and the US continue down this path of buying solar panels and wind turbines and batteries from them and electric cars from them and imploding our own reliable energy industries. Look, when your enemy is in the process of destroying themselves, don’t interrupt

[00:24:36] Jamie: Napoleon, right?

[00:24:38] Scott: Yeah, right. Just let it go. And it’s just shocking to me, New York state just this week passed a law. I was writing an op-ed on the plane last night about basically trying to tax the fossil fuel industry or penalize them 25 billion for climate change.

[00:24:57] Jamie: I see.

[00:24:58] Scott: And it’s incredible.

[00:24:59] Jamie: So, none of the people that actually use fossil fuels, just the people that produce it.

[00:25:04] Scott: Yeah. And so, my op-ed was about making analogies, you know, what if we were to say that anybody who sold burgers and fries or produce burgers and fries and pizza had to pay for obesity in everybody or heart disease. As opposed to the consumers of those things, and you know, just tons of analogies. So now Western Europe and the US, we got caught up in this latest thing. And we tend to get caught up in a lot of things, a lot of fads and trends, as you mentioned earlier. Climate was a, is a very sticky one. So, it captured the imaginations of young people and political leaders. Kind of one political side more than another, let’s say. And they, so they have been using that as a vehicle or a tool to instill policies and, you know, central control for things in a way that, that has been very effective so far. But I think the shine is coming off it, Jamie.

[00:26:07] Jamie: Yeah.

[00:26:08] Scott: People are starting to see their power bills and their gasoline bills and their industries are going away and the companies are running, can’t afford to compete because their electricity is so bloody expensive on and on. So, you ask the question, does every, did the leaders I talked to get it? I think they do, but they’re struggling now to unwind from the decisions and policies they promoted. And instead, a lot of them are doubling down. And by the way, your leader in Canada is doing that.

[00:26:36] Jamie: Our current leader in Canada, I, now, it appears that Canada may be on track to become the 51st state according to what you read on Twitter at the moment, but you know, although I don’t necessarily love that narrative. I do think it’s hilarious that Donald Trump is basically single handedly trolling Justin Trudeau out of office right now, so since he’s done that our minister of finance has quit and like is trying to drag Trudeau down with her so just Trump has basically accomplished in the last 6 weeks more than conservative Canadians have accomplished in the last 10 years. So, I’m kind of grateful for that, if I’m being honest. But you know, you talk about this delusion. I had a couple years ago, right around the time of the, just after Russia invaded Ukraine and Germany was experiencing an energy crisis, I had this, like, surreal experience. I was at an event in Europe and I was chatting with this guy who was effectively a green energy lobbyist in the EU. And he was talking about, oh, you know, how horrible it is that they’re, you know, reliant on Russian gas and, you know, what a terrible situation they find themselves in. And the conclusion he drew from that was that, you know, we just need to get on renewables as fast as possible. And that’s the only way we’re going to solve this problem, which is the exact opposite conclusion that I drew from that scenario, which is Germany and he was primarily focused on Germany is, you know, has more, has put more into renewables than anyone else and put themselves in a situation where they were unbelievably vulnerable. And I think you could draw a very clear line between. Germany’s energy policy and Putin’s confidence in invading the Ukraine. I think you could very easily draw that line. And I have, I’ve joked that, you’re not gonna like this joke, Scott. I’ve joked on here that Angela Merkel is the second worst German chancellor we’ve ever had. It has caused a significant amount of destruction in Europe. But like, there is some truth to that. I mean, I really do think that there’s, you know, this war probably wouldn’t be happening if Germany had more commonsensical energy policy. And that doesn’t even mean fossil fuels. It could have just been nuclear, for God’s sakes. And here we are.

[00:28:55] Scott: Yeah. Energiewende, which is the German word for their new Energy started in 2007, 2006, 2007 timeframe, Angela Merkel, and they decided to reduce their use of things. Coal, oil, natural gas, and nuclear and proceeded with it. The Fukushima Daiichi event happened pre-Ukraine, and that drove them to accelerate their decline in nuclear. And then. They finalized it after Ukraine by closing their last three nuclear power plants and building, or re opening coal plants. When they lost the gas from Russia, which stunned climate scientists. And it should have, they were aghast at that and they should be, you know, why are we building coal instead of nuclear with no emissions? And they accomplished the same dispatchable or in many cases, baseload electricity provision. So, Germany, yes, it’s easy to pick on for Germany, but they continue down these roads in some ways. And that’s the challenge I think is. How do you get more clear eyed about this? The UK has now flipped as you know, and they are starting, they’re now pushing ahead in a Germany, California, like way. Shockingly. And I don’t think this prime minister will last long. And Ed Miliband is really their energy minister. Who’s driving all this. And he’s fairly conflicted on some things too. So, you know, it does get to politics. It does get to conflicts of interest and conflicts of commitment. But Germany policy in some ways this let’s look at the good parts. They added diversity to their portfolio. That’s good. Wind is good. It’s windy in Germany. Now. A lot of the landowners are tired of building turbines everywhere. Solar not good in Germany. It’s If you look at a solar intensity map, it looks like Seattle, Washington or Vancouver, you know, so yeah, not great sun in Germany. So, you’re very inefficient or I should say, the capacity factor is a better, is low on solar in Germany and you don’t get, it doesn’t generate electricity as often as it does in really sunny places like Arizona. Okay. That’s just the reality of. Physics again, or the weather. But some of that’s good. You know, I like diverse portfolios of anything. I think adding some components of solar and wind and electric vehicles in the German mix is a good thing. If you take away coal completely, natural gas, oil completely, and nuclear, it’s not a good thing. All of a sudden, you’re limited in your options again, and they’re. Intermittent. They’re not reliable. So, you’re more dependent on others. California is importing more electricity now from other states, more petrochemical products, you know, more energy, either, either in raw form or as products than others. And. It drives up the price when you start to have these redundant backup systems or rely on others. It gets more expensive, Jamie. And this is where our three E’s, our energy, environment, economy come in. It gets more expensive. And that’s just the reality of it. You can pretend like the sun and the wind. And let me be real clear here. There’s a Lazard number, that’s a company that’s called LCOE Levelized Cost of Energy or Electricity. It’s been quoted a lot by those who want to show that solar and wind are now cheaper than coal and gas in many places. That number is a calculation of the cost of electricity at the plant gate where the electron is generated. Not to you or me. To get it to you or me, 24/7 365, requires this redundant thing or thing sitting over here to be available when night comes or the wind stops blowing. That redundant thing is very expensive. So, when I add that redundant thing into the cheaper thing, it makes it more expensive to the consumer.

[00:32:56] Jamie: Right.

[00:32:57] Scott: So, you see the price of energy in these countries.

[00:32:59] Jamie: Just to dig into that, because that’s something I hadn’t thought about before you actually mentioned it to me. So, you’ve got your wind farm or your solar panels, but you also have to have your coal fire power plant or nat gas plant or whatever in the background sitting there ready for when it’s not sunny or it’s not windy.

[00:33:15] Scott: Correct.

[00:33:15] Jamie: People don’t realize that there’s these redundancies built into this.

[00:33:18] Scott: Correct.

[00:33:19] Jamie: Yeah. Okay.

[00:33:19] Scott: They’re called load following plants in the gas world. The best one for that as natural gas, because natural gas, think of your kitchen. You don’t cook with charcoal in your kitchen because it takes a while to start up and it would make it very smoky, you know, nasty. You don’t cook with oil in your kitchen. You could cook with electricity or natural gas. Natural gas actually comes up faster than electricity. Bam. The heat’s there and you can turn it right off. So natural gas is a great load following power plant, if you will, but when it’s just sitting there idle and then it gets called on and then it’s sitting idle called on that makes that electron very expensive because you got to pay the people to build that plant and have it available with fuel. Yeah, and the other way to back that up is with batteries and you’re hearing a lot today reading a lot about grid scale batteries. And these are giant, and when I say giant, I mean the system, the battery system, not individual cells. But the system of batteries may look like a Walmart. And they’re everywhere. Okay. They’re being built everywhere. Giant lithium-ion batteries in warehouses that are getting charged, hopefully when the wind is blowing and the sun is shining and not needed as much. Hopefully I say, and then they’re there to call on when it’s not windy or sunny. And they back up that intermittency right now, we’re up to about four hours of backup. And that’s gone up from a few minutes to four hours on particular systems of electric backup from.

[00:34:54] Jamie: Is that backup for like the entire United States so it can run or.

[00:34:59] Scott: No, it’s a very strange number, but that’s how they quote it. So, what they, it’s a very strange number.

[00:35:04] Jamie: Yeah. Like what can you run for 4 hours?

[00:35:06] Scott: A very astute question, you know, 4 hours to what, run my phone or like the whole city of Houston, you know, four hours or what, and what they’re quoting is four hours to run whatever component of the grid it is they’re backing up. So, so if and yes, so if you were going to try to back up the whole nation, which you couldn’t do.

[00:35:25] Jamie: Yeah, so those batteries can’t even service the grid they’re currently on, let alone all the grids or the components of the grids.

[00:35:31] Scott: Right.

[00:35:32] Jamie: They’re not yet on.

[00:35:33] Scott: So, they’re servicing some component of the grid and they’re up to about 4 hours of capacity for that. Which is a lot, it helps in certain ways if you had to run all on battery, but hey, you know, there’s a funny term again, another German term dunkelflaute, which means sort of a, I don’t know exactly, but no wind for a longer period of time than you would expect. Although it happens all the time. And Europe just went through one of these at the end of this year, in November and December, a couple of weeks in a row where there’s no wind. And so, they’re having to call on all the backup systems. And there were rolling brownouts and things got very expensive because everybody providing is charging more. It’s a supply and demand basic economics thing. So yes, your observation. When you have an intermittent source, you have to have something there to make it reliable. And that reliability is expensive. It’s different if you have nuclear, cause that runs all the time. It’s literally very high-capacity factors in the 90%+ range, natural gas, coal, they all have times when they’re not running. You have to service the plants or your fuel supply is strained or weather can happen, etc. But we calculate all those things. So that’s one of the great challenges, I think. And again, it’s just kind of a bummer of physics for the solar and wind. I don’t use the word renewable solar and winds. They’re good for some things and not so good for other things. You asked about coal and oil and gas though, a while ago. And how much is there? It’s a finite resource at some level. So, there’s the nature only made so much in the whole tank. We have produced some of that. From the so-called conventional reservoirs. That’s where the oil comes out of the source rock, migrates into nice little potholes in the sandstone or limestone, mostly in other places called conventional reservoirs. And we’ve produced some of that. There’s still more to be found than produced. 15 years ago, actually more now, close to 25 years ago, the first attempts, but about in 2006, 7, 8, George Mitchell finally cracked the code on producing natural gas from shale, the Barnett shale, North Texas, north of in the Fort Worth area, it wasn’t economic, but he was producing it successfully, getting methane to come out and flow out of shale and that’s called unconventional shale. Gas, the gas is the same gas. It’s just unconventional reservoirs. And then along, we did that in the Barnett and the Fayetteville, Haynesville, and the Marcellus. And then in parallel later came oil out of shale, which nobody thought could happen, but the Eagle Ford, the Bakken and the West Texas. So, these are huge. The kitchen, if you will, that’s generating oil and gas, and we’re producing from it now using remarkable combination of technologies. Nothing new. It wasn’t a, it was very much of a multiple decadal thing, moving, horizontal drilling, hydraulic fracturing, which has been around for 60 or 70 years together and neater, better ways to crack into that really tight rock and produce oil and gas. And that’s opened up whole new resources for us.

[00:39:00] Jamie: Yeah. So, for people at home, so conventional is basically tapping into liquid or gaseous reservoirs under the surface. Whereas sort of there’s non conventional is pulling the gas or the weight of the oil out of basically solid rock right for by fracturing hydraulic fracturing of the solid rock. Am I summarizing that well or am I.

[00:39:20] Scott: A little different? So conventional is pulling it out of rock that has holes that are the size of the point of a pin to a pinhead. That’s what those pores look like. Think of going to the beach, it’s sand and you dump your Coke on the beach and it just soaks right in. Okay. Yeah. So, it looks like it’s kind of rocky or sandy, but there’s a lot of holes in it. When you make that sand into a rock, it’s called sandstone. And there’s still 15%. Or space in there. So that’s conventional reservoirs or limestone reefs, little holes, relatively connected that flow when you, they’re under pressure and the subsurface. So, when you drill down and poke a hole in there, the pressure releases those gases and liquids to the surface. Mostly what’s produced. And this is very important. Mostly what’s produced by conventional oil and gas production is water. Okay. Old oceans that were trapped in those sandstones and limestone reefs get buried and trapped old oceans from hundreds of millions of years ago. And that gets produced too. So, oil and gas companies are really water handling companies. They’re handling water.

[00:40:26] Jamie: Yeah.

[00:40:26] Scott: And occasionally they get some oil and gas with it, which they separate out. So that’s kind of, I hope that’s clear. The conventional reservoir scene, conventional reservoirs. Unconventional is also rock, but it’s organic, rich. Silts and muds and clays that are deposited deep in the oceans and organic material rains out of the oceans and gets buried. Oil and gas comes from organics, basically dead plants, not dinosaurs, dead plants that get buried and cooked through time. So, the carbohydrates get cooked and they become hydrocarbons. And in that old organic stuff, we call the lump term for that is shale. Okay. It’s a grab bag term for geologists used for this really fine grain material. And you make that compact that and make it into rock. And you’re right. It’s very dense. You could polish it up and you could probably put it on your kitchen counter and cut steak or cheese on there, you know, like marble or something. So, it’s very dense. The holes in that are so small, Jamie, they’re there, but they’re very small. What do I mean by that? You could fit in the Barnett shale. You could, and we’ve done the work on this. You could fit about a hundred of those holes or up to 200 across the width of one human hair.

[00:41:47] Jamie: Okay. Oh, wow. Okay.

[00:41:49] Scott: Okay. So, they’re nanometers. 50 to a 100 nanometers. A nanometer is a billionth of a meter. A billionth of a meter. A billionth of a meter. Yeah. Okay. So, these are teeny little holes. Sometimes they’re the size of a hydrocarbon molecule, one molecule or a few methane molecules. So, the gas and oil doesn’t flow out of there very well. You’ve got crack that rock in order for to create pathways for the molecules to flow to the well board. That’s what hydraulic fracturing does, or fracking. It puts water. And sand on and some chemicals, not much biocides mostly under pressure and pushes it into the rock under high pressure. And it cracks the rock and creates these pathways to flow back into the well bore and the sand grains that they put in hold the cracks open. So, this, the molecules can continue to flow. Those are called proppants. And so, when you’re down, we didn’t think we could produce oil and gas out of shale before we knew it was there, but there’s no way to get to it. And now there is a way. So, you ask about oil and gas. Here’s the simplest form. There’s something called resource. That’s the total tank. That’s what nature has made in the earth. The resource. And then there’s a technically recoverable reserve. That’s what you can get from that resource with today’s technology. And today’s price, both of those change. So, reserves change, they tend to grow because technology gets better and price dynamics happen. And then there’s something called the reserve and that’s just What we can see today that has been legally defined as some amount of producible oil and gas. Okay, so resource and reserve are different terms, and we have a limited number of shale reserves today. But we haven’t produced much oil and gas relatively out of all those shales yet. The US is leading in this. We’ve probably produced 5 to 10% of the oil and gas with all this drilling. 90% is left behind. So as technology improves. Price dynamics change. We hope to be able to get more from that shale, just like we did in conventional reservoirs. Here’s the kicker. The United States ain’t the only place with shale. It’s the source rock for conventional reservoirs. Guess who else has it? People who have conventional oil and gas, the Middle East, Russia, Latin America, you know, there are plenty of source rocks down in those parts of the world and they are quietly developing them. And they’re going to release them onto the world stage. When it becomes expedient for them to do that. And by expedient, I mean, right now it’s cheaper to produce the conventional oil and gas in Russia and the Middle East and sell it to the world’s market, bigger arbitrage. Yeah. And then as that changes and the United States starts to decline in our show production, voila. So, we have. A lot of oil and gas left in the world. If there’s a demand for it at the right price, long winded answer, but it takes a while to talk through all that.

[00:44:59] Jamie: You know, there’s a bit of a narrative going on that sort of US oil and gas or US like shale has peaked, you know, that we’ve seen the permium kind of reach its peak output or at least its peak growth and that growth is starting to decline. Do you kind of buy into that narrative that we’re near the end of sort of cheap gas or cheap oil and. And that, you know, price demand will come on to, to incentivize prices. Goal will go up to incentivize the supply to come online. Or do you think, you know, we are likely, you know, technical technology will continue to advance at the rate it has and unlock resources that we might not have been able to previously, um, get access to economically.

[00:45:40] Scott: A couple of things to unpack in that, I gave a talk two years ago in Washington, D.C. called Houston, We May Have a Problem. So yes, we have actually seen 7 of the 10 big natural gas, shale gas basins, a rollover or plateau at that time. Only 3 are continuing to go up with today’s technology and today’s price. And that’s the key. We’ve said, we’ve heard for many years. We’ve. Oil is peaked. Oil is peaked. King Hubbard. It hasn’t yet globally. So, technology continues to improve. I just described earlier, there’s a lot of resource still to go after there. So, it’s not a resource issue for the peaking. It’s really more of a technology and demand story. If something better was there to replace oil and or natural gas and whatever uses, then we might’ve seen a peak. And by something better, I mean, it has to be as affordable. And as reliable and efficient as those are, that’s very hard to do. Hydrocarbons are very tough to replace because they’re so dense and so useful in many ways.

[00:46:50] Scott: So, we don’t have that yet. And if it comes along, then you might have seen

[00:46:54] Jamie: Infrastructure as well in place. Say that again. We also have over a hundred years of infrastructure in place designed to take advantage of hydrocarbons as well.

[00:47:02] Scott: In key places. Yeah. Okay. Not everywhere it needs to be, but in key places. So, you asked, would price then adjust? I think we, it will, now the dynamics are very important as supply starts to get strained, price goes up because we still want it and then price drives technology. And more people push into technology, which finds another way to produce the next slug out of shale and price goes back down because we’ve got the supply. So, you see these fascinating technology price dynamics and then competitor technologies. And that’s really the world of energy, isn’t it? It’s all those dynamics playing together. And I think the challenge with the renewables, the solar and wind and batteries is. People said they would be cheaper and they’re not they are in some places at the plant gate, but not to you and me, as we’ve already discussed. They said they would be reliable and they’re not because you have to have something else to back them up. And they said they would be cleaner. And the definition was very narrow. It was a clean in the sense of CO2 emissions, not the mining your industry, you know, and I look, I’m a geologist. I don’t mind mining. Yeah, we, I like mining, but it’s not green, you know, mining has impacts. So, so this is the dynamic that I think these. Policymakers who bought into that whole story or dealing with and trying to kind of deny not more affordable, not more reliable. And it’s really not cleaner. Well, why are we doing it?

[00:48:43] Jamie: You really touch on, I think, what is really one of the central travesties of the climate obsession, which is that every other social and environmental impact has been pushed to the wayside. You know, When I was a kid, we used to care about water quality and air quality and land use and soils and conservation and all these and that’s all been become a secondary or tertiary conversation in service of the climate. Right? And which is why I mean. You’re like you said you’re a geologist. I’m a mining engineer. I’ve worked on a lot of mines. I mean, you look at an oil and gas well, and you look at a mega copper mine, the impact on the earth of those things is wildly different, right? Wildly different. And that’s all been sort of conveniently forgotten that exists as well. And we spent the last almost hour here kind of defining the problem. But. I’d love to talk for a minute about a couple things. Like what’s the solution here? You know, you’ve been in a phenomenal position with your PBS show Energy Switch over the last couple of years to sit down with some of the world’s leading energy experts and business leaders and government leaders and academics and what have you and hear very not conflicting, but sort of debates on different sides of the story. You’ve spent your career in energy. You know, if I were to, you know, appoint Scott Tinker, a sort of master of energy for the world. What approach should we even think be thinking about and how to actually address these problems so that it does kind of hit that radical middle so that it’s economically viable, that it’s environmentally friendly provides us or friendly Ish. It provides us the energy. We need the reliable, safe, et cetera. What should we be thinking about? And part of the reason I asked this is one it’s interesting. And I find like so few interviews actually spend any time talking about viable solutions versus problems or maybe sorry, fairy tale solutions. And two, the listeners of this podcast are primarily investors in commodity sectors. Or working in commodity sectors. And they’re interested because that’s an opportunity. You know, I see today’s energy world as one of the biggest opportunities we’ll ever see for investors of our generation. I think what we’re going to see in energy over the next decade is similar to what we saw in tech. Over the last 20 years, I think there’s going to be a lot of billionaires and millionaires made. And I know there’s a lot of people listening to this who are thinking along those lines as well. So. What do you think the real opportunity is here? And what should be happening? And, you know, people can kind of act with their wallets too. And that’s what I intend to do.

[00:51:32] Scott: Right. Well, I’ll start with a caveat. If you listen to me for investment advice, you’ll be working until you’re older than me. And that’s pretty damn old. So, fair enough. You know, there are components to it, Jamie. There are the, there are markets. There’s the human component, there’s the resource component, the density component, technology components to it, and then the whole governments and economics, components to this, that to say, it’s not simple, you know, it’s solvable, but not simple, and there’s no one size fits all, this is really important. I think Africa is speaking loudly now at these climate conferences called COP or Conference of the Parties that happen annually saying, look, quit telling us we can’t do these things. You did. And we’re going to do it. And I think what you’re going to see in general is that in emerging economies, several billion people, they’re going to go for low, you know, the highly reliable, affordable energy, just like we did, and it’s going to be coal if they’ve got it and then other things coming in there and I can’t blame them. They probably aren’t going to clean it up much either, at least initially until they can afford that allows them to start to grow their economy a bit, build on a base and begin to afford more things. In the emerging economies, you’re seeing more of, you’re still seeing a bunch of coal if they’ve got it, but then also oil for transportation as they get cars. Oil is a remarkable transportation fuel and when it’s distilled, you know, refined gasoline, diesel, jet fuels, whatever. It’s just really dense. A lot of bang for the buck. So, you’re seeing that happen and then natural gas is starting to grow in all the economies in the world as well, because it’s such a versatile fuel, it can use it in transportation. It makes electricity, as we’ve already discussed it’s needed for fertilizers and plastics and the list is endless. What we use methane for and propane and bentane, you know, butane and pentane and everything else. So those are some of the, these are the foundational energies of things. And gas is going to be here for a long time. In the developed world, we have the luxury of being rich. So, we’re starting to transition toward other things. Like nuclear, and it’s been around a while, but I think we’re going to see nuclear come back for sure. And one of the benefits, and I think the positives is, both sides of the aisle seem to agree on that now, the political aisle. Democrats are strongly supporting nuclear, at least in this Biden administration, and I think the Republicans will as well. Young people aren’t scared of nuclear. They weren’t trained to be scared of nuclear. Like I was, they were trained to be scared of climate, you know, so they have a different fear set that they were trained to be scared of. So nuclear is coming, it’s coming back and that’s a good thing. I’m involved with several different components of nuclear companies, different kinds of investments and putting away the waste. What do you do with the waste? That’s a neat area. All the nuclear facilities and services that are needed. That’s a neat area. The nuclear mining of those things is pretty cool. And then the generation itself, a lot going on in nuclear and how it works with other things to make, like you can make hydrogen from methane with nuclear or from water. And then the sun and the wind and batteries have a role to play. I think they’re going to continue to be pushed by governments who won’t back off of their initial thinking quite yet until they’re either voted out of office or finally find some courage, but they’re going to come around. You know, solar and wind are going to be there. You’ve got to put solar and wind and other distributed forms of energy in places that have no infrastructure, like wires or roads or pipelines. First energy is often that a panel, a little pico hydro unit, or, you know, a micro turbine of some kind, wind turbine, that’s what comes first. And then you can grow from there. So, I see a lot of upside in the emerging and developing world. And then. At some scale, where the wind resource is excellent, like in the central United States, or the solar resource is outstanding, like in California, Arizona, New Mexico, parts of Texas, that makes more sense. You can collect it in an efficient way and it would be affordable. The human flourishing part of that says, however, that all the world needs energy. Not as much as we consume per person, but at some minimum level, we’ve got to enough of the energy poverty, or we’re going to see, we’re going to have issues that are going to make everything else look silly by comparison. Revolutions happen when the classes get so disparate. The lower classes say we’ve had enough of this and on a global scale, we don’t can’t afford that to happen and it shouldn’t happen. It’d be morally wrong. So, we’ve got to get energy to everyone. And I spent a lot of time working on energy poverty and in solving those issues and they’re happening. In neat ways. The bottom line on that real quickly is it’s not aid. You can’t go in and say here’s this solar panel, you know, good luck. And then you leave and they don’t even know what to do when a fuse blows or something. It has to be something that the community wants and is willing to learn about and then take care of. On a density sense, what I described is really moving from low density to high density energy. Those are the resources. And that’s a nice thing again, because it takes fewer wells and less fewer mines when you’re using high density forms of energy and the technology side. What drives those? What’s going to get more oil and gas out of shale? What’s going to allow us to technologically accomplish affordable fusion? You know, instead of fission. What’s, how are we going to create hydrogen affordably if we ever can? What’s it going to come from? Water or methane? And what’s the energy source is going to be to split those molecules? Those are very fascinating. Again, what are the competitors? So, I think there’s just the dynamics are a tremendous amount of energy investment space out there. Yeah. It’s going to vary by the economy, the resources, the education levels, the political structure et cetera, et cetera. And that’s just the reality of it. We shouldn’t try to impose some elite kind of global order on these things because we’re not smart enough.

[00:58:18] Jamie: To do the top-down approach and assume we have everything figured out and, you know, it meets the equation and then where we go. Yeah.

[00:58:25] Scott: Yeah, just do this. What governments are good for is investing in high-risk research that industries can’t afford to do. And then that research gets used in different ways for markets to then say, hey, I can use that to go do this, but at the end of the day, if markets don’t do it, we won’t scale it. So, it’s a common, I’m not against government investment, but it needs to be not buying out some failed electric car company, which is what we’re doing in the US over and over before this administration leaves. It needs to be an investing in fundamental research and the understanding the problems. That we will encounter as we go forward that then allows the markets to pick that up and go and develop it in ways that are better for all humans. Right?

[00:59:16] Jamie: Yeah, you know, I have a bit of a pet theory right now that we’re going to see a lot of money flow into energy and commodities more broadly. From two sources for one from government. I think government’s gonna wake up and say, oh, look, you know, China has its, you know, you can touch on earlier belt road policy. They’ve secured basically all the critical mineral infrastructure to process and refine these things. They have secured mineral and energy deposits all over Africa and Latin America. We are way behind and frankly, we’re going to need to mobilize billions, if not trillions of dollars to go actually out and compete on that front. So that’s one. I think that’s going to happen in the Western world.

[01:00:02] Scott: That’s an energy security issue. Yes. I completely agree. We are waking up to the fact That China controls the critical pathways for the forms of energy. We thought we wanted to go towards and it’s not secure. If I move.

[01:00:21] Jamie: It’s genius like it’s, they were thinking a hundred years into the future when, you know, thinking on 4-year terms.

[01:00:27] Scott: And they didn’t have oil and gas, they have coal. So, they’re using coal, but they didn’t have oil and gas. So, they’re doing everything else. And it’s, you know, we talked about this for many years. You could see all this happening and coming, but people wanted to put their head in the security sand, if you will, but we’re waking up now to that and China sent a signal across recently. Like if Europe says, hey, we’re going to put, we’re going to hit you with a border taxes for carbon. That’s one of the schemes China might say. Well, we’re just not going to pay them. What do you mean? Well, we’ll just sell our stuff to India. You know, they have 1.3 billion people, 3 or 4 times the population of Europe and their markets are growing. We’ll just sell our stuff to them. Good luck. They have more control than we do at this point.

[01:01:13] Jamie: Yeah, I know. I mean, we kind of control the financialized assets, but they, like the financialized system, but they control the actual physical assets. And at the end of the day, the physics, I think will win out, you know, it’s.

[01:01:25] Scott: And Russia has 11 times.

[01:01:29] Jamie: Yeah, and now the other component of this, which I think has to happen is that tech people, a lot of people disagree with this, but I think we’re going to see tech companies heavily controlling their supply chain, you know, my career has had two interesting phenomena. So, one, you know, I should have been an electrical engineer or a computer engineer because every dollar that’s been made by any engineer in my entire career has been in the tech industry. But two, a lot of business has seen a It’s been breaking apart and it’s going to, it’s been, we’ve seen a, what’s the word I’m looking for the opposite of consolidation diversification. Whereas if you go back to the sort of 80’s and early 90’s, there were these super conglomerates, right. That like controlled, you know, like. General Electric used to own copper mines, for example, and Exxon used to own copper mines in Brazil and that hasn’t happened for my entire career. But I think we’re going to start seeing that happen again with the Tesla’s and the Microsoft’s and whomever, where all of the wealth has been sucked up to 7 companies who buying out their entire supply chain is now almost a rounding error on their balance sheet. And they’re not going to be. They’re almost price insensitive right to a pound of lithium or uranium or copper or whatever it is that they’re after and you kind of are seeing these corporate corpocracies for me. Like, I don’t know if you saw it and you’re in Texas like SpaceX is building a town now, right? They’re building like the Starship or Starfleet. I can’t remember what it’s called town. And it’s like, there’s going to be a lot of advantages and being at SpaceX where you get to go send your kids to the best schools and the best hospitals and whatnot at their town. Yeah. And how long until this sort of becomes like these old super conglomerates, where they start owning the whole supply chain. And the only way we’re going to be able to compete with the China’s or the Arab countries with the sovereign wealth funds is for some of that tech money to start grabbing those assets as well. That’s kind of been my theory here. And I think we’re starting to see it play out, but does that resonate with you in terms of what you’ve been seeing?

[01:03:30] Scott: Sure. I mean, you’ve got people opening up Three Mile Island for nuclear power again, to run data centers. You know, it, they’re just going right into it. And it took tech to, I think, get the government’s attention that nuclear was a viable source. And they weren’t going to do it on solar and wind. I mean, they might say they’re going to have low emissions. They’re making all these promises. So, to honor those are actually having to go to a low emission source that is reliable and that’s nuclear. And that’s the fundamental base of the supply chain is your source of energy.

[01:04:03] Jamie: Yeah, what do you make of the, I guess, data center boom, right? You know, I’ve read things that like US energy or electricity consumption supposed to go up by like 40% over the next 10 years. These like almost outlandish seeming claims to me. Do you think it’s real that this, that, I mean, the fact that I think Microsoft’s paying something like $50 million a month just to have the option on Three Mile Island. Like the fact that they’re willing to do that speaks to me that this is real, but I’m curious what you’ve seen.

[01:04:35] Scott: Yeah, we suffer a little bit from straight line ism. So, you know, data centers will become more efficient and they’ll figure that out because it’s more efficient to find a way to. To lower your energy demand through various efficiencies in some ways, and to just let that continue to happen at those costs. But yes, I think we’re going to see an increase in electricity demand from data centers as artificial intelligence and all the components of that come into the scene. It will replace some things. AI hopefully will become. Will help us become more efficient as it’s promised to do, and therefore we won’t need as many other things necessarily, as we’ve had in the past. So, maybe AI help solve its own demand problems as it goes forward. And I’m hopeful that will happen. I also think electric vehicles are going to have some role to play, but not at the level that they’re being forecast for a lot of reasons. Not just, not least of which is the environmental impacts of batteries from mine all the way to dump, but even so. The other components, they’re heavy, which makes them more dangerous. They’re dangerous when they get on fire because you can’t put them out. You know, you can’t they’re not reliable in a sense of when it’s cold or really hot. There’s no infrastructure to charge them enough today. And you know, the government didn’t build gasoline stations. Why would the government build charging stations? Let’s let the markets figure that out. So, I think they’re gonna have a role to play, but I don’t think there’ll be demanding on the power grid as much as some would forecast them to be. And so that’s a little bit of a relief on it. And then I think also, Jamie, we’re hopefully going to start to see continued improvements in infrastructure. From the individual home all the way up through where we’re able to do what we do with less energy. And look there’s, you know, Jevons had mid 1800s. There was a, the rebound effect, if you will, of the more efficient you become with something, the more you use of it. And that’s true in every case, but at some level you, you only need so much energy to do something right. To power my home. And if I have really efficient windows and insulation and smarter meters and time of day price, there’s a lot of things that could come in that would make this home do exactly what I needed to do using less energy. And I wouldn’t necessarily buy a bigger home. And there’s a ceiling on that at some level for those of us who have reached that ceiling. Most of us, however, just coming into it. So yes, I think the demands for electricity are going to increase. I think they are going to offset molecules at some level. But we’re never going to electrify everything. We’ve got to have molecules for lots of things. I mean, everything in this room is molecules, but beyond that we have to have a, you know, you need a lot of heat to make basic stuff for human societies, like steel and cement and plastics and fertilizers, a lot of heat, and those are all molecules. It’s tough to make, get that much heat from electricity alone. You can arc nuclear but it’s, so you’re going to be burning natural gas, you’re going to be burning coal or something to get that heat. So, some balance of electricity, electrons and molecules, if you will is coming. Yeah.

[01:08:07] Jamie: Yeah. It’s an interesting time. I, you know, I think of, you know, the last 20 years, everyone seemingly has been focused on building out the digital infrastructure. And now it seems that the physical infrastructure, it’s past the carrying capacity almost to a degree. It’s that these people in tech have kind of woken up and been saying, oh look, like, the real world actually does exist, and it’s not gonna be able to support an infinite amount of cloud storage and GPUs and data centers, et cetera. And there’s this attention coming to the energy and commodity sector that I haven’t seen in my entire career. I, you know, I listen to several tech podcasts and people are talking about uranium and nuclear and natural gas as a way to power data centers. And that whole narrative is very new to me. Outside of, you know, people who work in these industries like you or I, what do you think the, this new , this new administration, the Trump presidency is going to be thinking in terms of energy and, you know, this is a little outside your wheelhouse, but how that fits into you know, manufacturing and all the downstream effects that they’re trying to encourage in the United States right now.

[01:09:18] Scott: Yeah, it’s kind of pretty closely in my wheelhouse, actually. I mean, in a soundbite sense, energy dominance, right? Yeah. And I understand that. I think. I more than think, I have some insights that, that this affordable, reliable is going to be the driver of energy policy in the US for the next four years. What makes energy more affordable and reliable to you at, to the US citizen, to the US company, very focused on the United States, less on global partners. So, with that focus in mind, it points you towards some things, continuing to develop oil and gas and try to get more from what we have, continuing to develop nuclear and both small modular reactors and all the way up to large reactors, potentially pushing hopefully on fusion research to can to bring that, let’s say, economic moment closer to us than we have in the past. The environmental impacts of that are going to be. A part of the consideration, but I don’t think they’re going to dominate it with this particular administration. And I’m not just talking about climate. I think they’re going to try to remove a lot of the.

[01:10:38] Jamie: Bureaucratic hurdles. Is that a good way to put it?

[01:10:40] Scott: Well, that, but more of the environmental hurdles from EPA that. Have been perhaps overburdened some to a point where you can’t build a nuclear power plant, you know, cause you just get to the point where somebody sues you and somebody sues you. They’re going to try to remove a lot of that. Hopefully not go too far because some of those are good and you’ve got to protect our land and air and our water for sure. So, you don’t want industry to run amok, given them, you know, most wouldn’t, but a few bad actors would always. So hopefully they’ll balance that. I think you’re going to see a lot of the constraints attempted to be removed though, from developing affordable, reliable energy. Chris Wright’s a good friend of mine. The new Secretary has been for a long time. He’s also big on energy poverty. He’s done things in Africa. He has his own little foundation. So hopefully the department of energy and others will keep that in mind. We have some of it in the US not just globally.

[01:11:38] Jamie: He was, is, or was the CEO of Liberty, right? Is that right? So,

[01:11:43] Scott: Pinnacle and then Liberty.

[01:11:44] Jamie: Drilling company. Yeah. So, he’s going to come in.

[01:11:46] Scott: It’s not a drilling. It’s a hydraulic fracturing company. So, they have fractured most, a lot of the wells that people drill and, but he’s smart guy, you know, MIT educated and does very thoughtful guy, a good friend. So yeah.

[01:12:01] Jamie: Are you excited about this change in direction as someone that’s spent his career in US energy? It’s.

[01:12:07] Scott: I think so. Yeah, I think so. A little bit. I’m sanguine too, in the sense that four years isn’t a long time. And in fact, two years, usually Senate will flip again because the administration won’t do everything it promised and it doesn’t take much to flip the Senate. So, I’m more excited about maybe course pause from the extremes we were going to everything was based on climate in the last four years and really, and this administration fought oil and despite administration fought oil and gas harder than any prior administration arguing. They say there’s more produced than ever. Well, that’s not because of them. That was because they were You know; the energy industry had a lot of momentum coming from since 2000 and just kept it going. Obama administration didn’t support oil and gas, but they didn’t fight it the same way that this one has. So, I think we need to come out of that trajectory and come back into more balance. What I hope doesn’t happen is we try in four years to go the complete opposite way. And then that causes another set of reactions to look at all this environmental destruction going on, and then the voter gets all worried about it and changes again. I’d like to see that pendulum quit swinging quite so far out, or the amplitude of the wave kind of decreased down toward our radical middle.

[01:13:27] Jamie: Well, you’ve probably done as much or more than anyone to try to moderate that narrative. primarily with the work you’ve done at Switch, right? And the Energy Switch and the various products and education entertainment shows that you’ve done there. How, what can we tell people a little bit about what you’re doing at Switch and your special? And then like, what you’d like the takeaways for people to be from those conversations or what you’re trying to accomplish there.

[01:13:56] Scott: Sure. Yeah, so I’ve been speaking about energy for a long time and back in 08 met a guy named Harry Lynch who interviewed me for a film he was making on the Barnett Shale. Early days of the Barnett. And we hit it off and he said, boy, you know, we should make a film on energy. And we did called Switch, filmed it in 9 and 10 and produced in post produced in 11, released it in 2012. Very popular film. We went to 11 countries and looked at the pros and cons of all forms of energy and they all have them. Environmental pros and cons, economic pros and cons, blah, blah, blah. Just the trade offs, if you will. And that film got very popular, was used a lot by educators. And then we continued a few years later. He’s done some other really neat things outside the energy space. I made our second film on energy poverty and along the way produced Switch Classroom, which is in Canada now too, it’s free resource to teachers. It’s a platform for them to use and grab modules to teach energy education and environmental sciences and other sciences. Teachers love it. A film based, a lot of films that we’ve produced, little short snippets, and the teachers have developed the curriculum. So, they, the kids do great on testing. And it’s, and again, it’s a supplemental free resource. They love that part. So, we’re in K through 12. We’re in the public. We’ve got a case competition that we run in universities around the world called on energy poverty. It just finished its fourth year. We’ve had a well, more than 4,000 students do it in over 50 countries, teams of four that compete to try to pick a country pairing and lift them out of poverty. And they, we have volunteer judges who have mentored and judged those teams and hundreds of those. So, for your listeners, if you want to get involved, it’s a low commitment and hugely impactful to you personally, to watch these young people from all around the world, try to figure this out, nice cast prizes and that kind of thing.

[01:15:55] Jamie: Do any of their recommendations or projects. Do they ever get implemented? Has there ever been a path for that?

[01:16:01] Scott: Yeah, we’re working on that. I’m working with a fairly well healed person in the United States and the natural gas industry and forming an energy core to address energy poverty globally with real money coming in from industry and hopefully government to help go accelerate a lot of different groups around the world who are doing addressing energy poverty and our students. Since then, alumni we formed the switch alumni network of former competitors, and they could be placed as volunteers or interns in with these groups that we would invest in and help accelerate to, you know, take a LPG facility or canisters to replace wood cooking indoors or. Or, you know, solar panels to pump water to do better irrigation, et cetera, Jamie. So, yes, that’s all evolving in real time, but we’re really trying to see how we can grow the impact of that globally. Then there, of course, there’s the public facing piece of Switch, which you mentioned the PBS show we’re filming season 7 of that in February. You were on it, did a great job there. Two guests on every episode and we pick a topic and dive into it. You guys don’t always agree on everything as you didn’t, and you do agree on some things, but that’s the point. We have this civil dialogue in a highly produced studio. You were in it and we reduce it down to 24 minutes and the PBS audience and now major podcasts, Apple, Spotify, all of them. You can listen to these dialogues between smart people and I moderate. I try not to get too involved unless I need to. And you can hear these dialogues about a topic where you realize, oh, wow, this is, there’s more to this than I thought. It’s more complicated than I thought, but they’re having a civil discussion. You know, they don’t have to yell at each other or blame each other or call each other denier. So that PBS show has become very popular. And. And we’re proud of that one. So that’s the switch energy alliance is doing a lot of things like this. I I’m kind of proud of the work and, you know, we run on gifts. It’s a 501(c)(3). So, for those in your audience who want to check us out, let me know and we’re happy to expose you to more.

[01:18:19] Jamie: Yeah, I would say from my perspective, that was, it was a phenomenal experience getting to see all the studio and the team you put together and the producers and directors, et cetera. And of course yourself moderating, you know, very I thought you did a great job sort of moderating and keeping a balanced perspective. So, and I’ve got since gone and watched many of your past episodes as well on PBS. And you really do have. Kind of the who’s who of this space on there talking about very important topics. So, I would highly recommend everybody go and check that out after this.

[01:18:51] Scott: Thank you. Yeah, thanks.

[01:18:53] Jamie: Well Scott I think I’ve kept you. I told you we’re gonna be here for an hour. I think we’re getting closer to two now. Is there anything you’d like to say, or that I haven’t touched on that you think we should talk about before we say goodbye? And I let you get back to your holidays.

[01:19:07] Scott: Yeah. You know, I would say Jamie, first of all, thank you. It’s fun. Always fun to visit with you. You got a great insight. So many things. So, thank you for hosting me. People get frustrated, you know. They say, read and hear these things and they know it’s different. They don’t know how to get involved. I would say get involved. Go, we put a lot of materials on Switch on our website. You can grab my presentation decks, slide decks, and things go speak to a school. You know, 20 kids in a classroom, it’ll make a difference or a scout troop or a church group or civic group volunteer to be a mentor in the Switch case competition. Find a way to start to engage at some local level and help raise the awareness that matters. You know, you might think, ah, 20 kids that matters. They’ll go home and talk to their parents. That teacher will have you back next year. All of a sudden, the multiplier effect is working and hundreds of people become thousands, become millions of people with a voice. Cause there are these, there are a lot of loud voices out there in this space that are not communicating what I would call factually complete information. You know, some little factoids. But not factually complete and we all need to engage in the process at whatever levels we can. To help that dialogue move forward because it’s just too important

[01:20:36] Jamie: And what’s the website people should go to find out more to get involved or volunteer?

[01:20:40] Scott: Yeah switchon.org

[01:20:42] Jamie: And you guys have a Twitter or anything people could follow?

[01:20:44] Scott: Yeah, they have it all. We have it all, but I’m, you know, it’s above my pay grade. There’s Instagram, there’s Facebook, there’s Twitter or X, you know, LinkedIn. I’m personally, I’m only on LinkedIn. So, if your folks want to find me on LinkedIn and that’s my personal one. It’s not a Switch one, but that Switch Energy Alliance at switchon.org has all of it for sure. Yeah.

[01:21:09] Jamie: Well, Scott, thank you very much for taking some time out of your day today.

[01:21:12] Scott: Yeah. You bet, Jamie. Thanks. Keep up the good work.

[01:21:16] Jamie: Thank you. Bye for now.

[01:21:17] Scott: Okay.

Picture of Jamie Keech

Jamie Keech

CIO; Editor

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Nick D'Onofrio

Head of Research

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