Speaker 1: With Laurent segel And from London and Gerard Reed from Berlin.
Speaker 2: This is redefining.
Speaker 3: Energy today on really if any energy. This is a
Speaker 3: super special show for the end of the summer. Jow,
Speaker 3: what are we going to talk about.
Speaker 2: We're going to talk about the seven deadly sins of
Speaker 2: the energy world.
Speaker 3: And in order to do so, we need to bring
Speaker 3: our blue flame thinker, our friend colleague from Canada, Michael Barnard.
Speaker 1: Welcome, Welcome, I'm so glad to be here.
Speaker 3: As always, I know coined the term seventh scene. It's
Speaker 3: a Pope Gregory or something in the sixth century. But
Speaker 3: we have decided and I don't know who, because we're
Speaker 3: kind of a changing during the summer, and that just
Speaker 3: popped up, the seventh scenes of the energy transition.
Speaker 2: It must have been me, because I'm the creative one,
Speaker 2: just that, you know, So it must.
Speaker 3: Have been me, that's sure. It was not me.
Speaker 1: I certainly remember it being Girardi who was pushing, okay,
Speaker 1: happily receiving.
Speaker 2: Yeah, okay, great question for it was somebody else that
Speaker 2: came up with the idea, but it was very good.
Speaker 3: The seven Sins are Michael.
Speaker 1: I'd just like to say, assertions that I have personal
Speaker 1: and extensive experience with all of them are completely true.
Speaker 1: The list is greed, bluttony, sloth, cry lust, wrap and envy.
Speaker 3: Okay, I know you were educated in the seminar, but
Speaker 3: how does it translate for investment?
Speaker 1: For investment, what we have to think about is the
Speaker 1: sins are the things which we're really subject to, which
Speaker 1: aren't good for us or good for others around us.
Speaker 1: And so in the energy world, as we consider the
Speaker 1: exemplars of sloth or greed, what we have to say
Speaker 1: is if the analogy fits, then it's going to be
Speaker 1: hobbling your investments.
Speaker 2: Well, said Michael, Well said, we told you so.
Speaker 3: What are they? Please? Number one, number two, number three.
Speaker 1: As we go through these. For greed, we have carbon capture,
Speaker 1: sequestration and direct air capture, avarice and pipelines. For gluttony,
Speaker 1: nothing fits gluttony better than hydrogen the calorie bomb energy carrier.
Speaker 1: For slough, it's nuclear and small modular reactors. And then
Speaker 1: there's pride. This is fusion Kubri's with a torus. It's
Speaker 1: very interesting research, but it has nothing to do with
Speaker 1: the energy transition or decarbonization. For lust, biofuels everywhere at
Speaker 1: the drop in sirensaw. It's a nice idea that we
Speaker 1: don't have to replace the engines or the vehicles. But
Speaker 1: while we need biofuels for the really hard to decarbonize segments,
Speaker 1: we're just going to electrify everything else. Then there's wrap.
Speaker 1: This one leans into the United States right now, canceling
Speaker 1: offshore wind its reprise of rage against the turbines, and
Speaker 1: then finally envy the greenhole costplay of the past five
Speaker 1: years of ESG reporting. As somebody said, I've got a
Speaker 1: guy in the sub basement who fills in those forms
Speaker 1: for us. That's the list.
Speaker 2: Well, it's a why don't we start with greed, which
Speaker 2: you know, I think i'd better describe at subsidy mining
Speaker 2: in a lab coat. You might call it cobbon capture
Speaker 2: and direct our air capture, but for me it's subsidy mining.
Speaker 3: No, No, it's regulatory capture, not carbon because they capture
Speaker 3: most sipsids than CO two.
Speaker 1: I have to say the entire climb work scandal where
Speaker 1: they can't actually get it to work and it's such
Speaker 1: a tiny amount of expected targets. What they found is
Speaker 1: they're actually going to be capturing and sequestering less CO
Speaker 1: two than it's costing to capture and sequester the CEO
Speaker 1: two in terms of emissions. It's just a dead act.
Speaker 1: While four hundred and twenty parts per million is really
Speaker 1: problematic from a global warming perspective, it's really also engineering problematic.
Speaker 1: It's trying to strain a drop of urine out of
Speaker 1: an Olympic sized swimming pool. It just have to accept
Speaker 1: that that's going to be hard.
Speaker 2: Mike, I want to add on to this, and I'd
Speaker 2: like to hear you Todd on it. I mean, here
Speaker 2: we are during this podcast, and Germany is bringing in
Speaker 2: carbon capture regulations.
Speaker 1: We will need some carbon capture. It will pencil out
Speaker 1: in some places, like where there is a industrial source
Speaker 1: of purish carbon of CO two at reasonable pressures that
Speaker 1: can just be put into a sequestration site which is
Speaker 1: effectively underneath that site. That's probably going to be a
Speaker 1: cheap way to do it. If we think of electrified cement,
Speaker 1: for example, or using the sublime process, the electrochemical process,
Speaker 1: which produces a fairly pure stream of CO two, and
Speaker 1: it's beside the ocean, and there's a pipeline leading to
Speaker 1: offshore seaquestration that actually pencils out in terms of being
Speaker 1: fairly low cost, low carbon cement. And unless you have
Speaker 1: a sequestration site directly under the facility or your seashore
Speaker 1: and you can put it in a pipeline off, sure,
Speaker 1: it just gets more and more expensive and less and
Speaker 1: less likely.
Speaker 3: And at the end of the day, it just costs,
Speaker 3: except when you do the enhance soil recovery, which has
Speaker 3: been going pretty good. Oxy is the big specialist of that.
Speaker 3: But otherwise it's just basically you as the taxpayer, to
Speaker 3: capture the carbon and that's pretty much it. Well it's not.
Speaker 2: I love that, but I don't know. It needs to
Speaker 2: bring us to the next one, which has glut me.
Speaker 2: I just love it. Three killer?
Speaker 3: What ours to make?
Speaker 2: One killer?
Speaker 3: What hour?
Speaker 2: And I know you two guys love this topic.
Speaker 3: Yeah, it's hydrogen. There's a lot of technical conversation around hydrogen.
Speaker 3: And I'm not a technical guy. I'm a trader. So
Speaker 3: what I do know and I have checked on CHGPT
Speaker 3: and so on, is basically one dollar per kilo hydrogen
Speaker 3: equal fifty dollars per barrel of oil in terms of
Speaker 3: energy content. You can go and say no, no, it's
Speaker 3: not fifty, it's forty eight point nine, but I make
Speaker 3: it fifty because that's easier. So you've got those guys
Speaker 3: they say, oh, that's great, We've got hydrogen at eight
Speaker 3: dollar pokiro. I say, okay, fine, so eight del parkidro.
Speaker 3: You're trying to set a bil of oil at four
Speaker 3: hundred upper barrel. The market price is sixty. Just ten
Speaker 3: mew is going to pay the three forty of difference,
Speaker 3: and they're like, ugh, it's just too expensive. Period.
Speaker 1: It is once again regulatory capture. The nice thing about
Speaker 1: hydrogen is while a lot of people invested in the
Speaker 1: narrative about hydrogen, it was based upon fallacious assumptions that
Speaker 1: green hydrogen would be cheap. If hydrogen could be delivered
Speaker 1: at a buck a kilogram, that would work out. But
Speaker 1: what happened was in the twenty tens people said how
Speaker 1: cheap does hydrogen have to be in order to be used?
Speaker 1: And then they invented a bunch of ways to make
Speaker 1: it beem like it could get there. They were invested
Speaker 1: in the one dollar per kilogram of hydrogen and instead
Speaker 1: of saying, well, we can't get there, it's never going
Speaker 1: to get there, which I luckily did the math and
Speaker 1: figured out then they wouldn't have actually spent the last
Speaker 1: five or ten years trying to make hydrogen into something
Speaker 1: and it's not an energy carrier.
Speaker 2: Well said Weldside Michael and Laurand I've got a bit
Speaker 2: of numbers which are funny.
Speaker 3: You know. In Australia they had booked two years ago
Speaker 3: five gigawat for electoralizers, out of which they will get zero,
Speaker 3: and now those five gigawatts in moving to AI. And
Speaker 3: that said, they add project in Australia, Gladstone, fortesqu In Germany,
Speaker 3: arcel Or Metal canceled, in On cancel. In the US,
Speaker 3: bp X all cancel their Indorgent project, air Products canceled
Speaker 3: and the CEO to be fired, Tison Hope, Newserra, all
Speaker 3: projects abandoned, repsol. It goes on and on and on
Speaker 3: and on. Whatever the money throw at it, people just
Speaker 3: won't do it. So for me, you know, it's dead.
Speaker 1: And we can see that with the major industrial players
Speaker 1: that we're supposed to be the demand areas. Astilantis walked
Speaker 1: away from its hydrogen sprinter vans. It's now saying battery
Speaker 1: electric for the entire range. Airbus walked away from its
Speaker 1: hydrogen aviation efforts. What we're seeing is that everybody who's
Speaker 1: been attempting to make hydrogen work as an energy carrier
Speaker 1: on the demand side is discovering it doesn't. There are
Speaker 1: probably as many hydrogen bus fleets that are not being
Speaker 1: used as being in case. Another case point in Lower
Speaker 1: Saxon Ees passenger train organization famously ignored the neighboring province's
Speaker 1: assessment that hydrogen trains would be three times as much
Speaker 1: as battery plus overhead hybrid systems and bought fourteen hydrogen
Speaker 1: trains through Alstom. Well, only four of them are in
Speaker 1: operation now Alstam can't get new fuel cells from Cummings
Speaker 1: who took over the hydrogen fuel cell manufacture.
Speaker 2: Great guys.
Speaker 4: So then I want to talk about slothes and actually
Speaker 4: it's one of my favorite topics because it's always in
Speaker 4: time and always in budget, and that of course is nuclear.
Speaker 4: So where do we start that, guys? I want to
Speaker 4: start with twenty twenty nine, the first SMR is meant
Speaker 4: to be online. What do you think will it be
Speaker 4: on in twenty twenty nine or be twenty thirty nine
Speaker 4: or forty nine? Will it be on budget or not.
Speaker 1: Well, pick the project you're referring to, So which one
Speaker 1: the one in an Ontario, Ontario? Yeah, yeah, the one
Speaker 1: in Ontario. Well, SMRs are interesting. The premise of small
Speaker 1: modular reactors is that the problem with nuclear was big reactors,
Speaker 1: and that's why they went over budget and stuff. And instead,
Speaker 1: what we're going to do is build small modular reactors
Speaker 1: as much as factories as possible and kind of churn
Speaker 1: them out like crackerback jack boxes. But it's been very
Speaker 1: funny to watch. Small modular reactors were in many cases
Speaker 1: positive to be twenty to seventy megawatts in capacity, and
Speaker 1: all of those have fallen by the wayside. Now a
Speaker 1: small mode modular reactor is three hundred megawatts, and three
Speaker 1: hundred megawats is a hard to call particularly small. It's
Speaker 1: a third the size of the typical gigawatts scale one B.
Speaker 1: At three hundred megawatts, it's a multi billion dollar construction
Speaker 1: project regardless, it's not something you manufacture and deliver. And three,
Speaker 1: A big part of the small modular reactors theory was
Speaker 1: Right's law. Every time you double production of something in
Speaker 1: a manufer a manufactured object. For more complex objects like
Speaker 1: fuel cells, it might be ten percent. For silver panels
Speaker 1: and batteries it's about twenty percent. Well, when you get
Speaker 1: to the three hundred megawatt nuclear reactor, you're just not
Speaker 1: going to be doing that many of them. A. It's
Speaker 1: more of a custom engineering project. B. So you're not
Speaker 1: getting the economies of the experience curve. And you're just
Speaker 1: not going to do that many. So you're just not
Speaker 1: getting the doublings very much. So it loses out time
Speaker 1: and time again.
Speaker 2: Still announce of the question though, twenty twenty nine, do
Speaker 2: they do it? It's a Canadian project? Are you going
Speaker 2: to back your fellow countryman?
Speaker 3: It's true.
Speaker 1: I have been to that site, Bruce Nuclear, and I
Speaker 1: will say that it is a wonderful jobs program for
Speaker 1: the twelve thousand person that the nuclear site is in.
Speaker 1: It is not going to be benefiting Ontario's electrical generation.
Speaker 1: If it's in up and running by twenty thirty five,
Speaker 1: I'll be surprised.
Speaker 2: Oh they haven't.
Speaker 3: I love it. I love it.
Speaker 1: Laurn Yeah, give me a number, Yeah, give me a year.
Speaker 3: They don't have construction yet, Getachi. They will put it out.
Speaker 3: I really wonder about the cost because the aiding cost
Speaker 3: of new nuclear is already two hundred up and make
Speaker 3: it what hour, and those guys might be even more
Speaker 3: expensive three hundred four hundred. If somebody is willing to
Speaker 3: pay five times market price, that's good. Now, what I'm
Speaker 3: fascinated is not that g Tachi or horse Hoys. And
Speaker 3: by the way, these are mostly submarine design which have
Speaker 3: been kind of reshuffled. It's all those startups news Keros,
Speaker 3: x Nergy, Terrestrial Lead called Oaklo Ultra safe Nuclear. Okay,
Speaker 3: so I guess the others are not allow multics no no, no, no, no, no on.
Speaker 3: And I see Breakthrough, Open Ai, Amazon throwing a lot
Speaker 3: of money at those guys. That's fascinating.
Speaker 1: The US venture capital industry has become a great way
Speaker 1: for people to get rich without having to deliver anything.
Speaker 1: If you can get funding, the Wall Street guys make money.
Speaker 1: The venture capitalists maybe they make money. It doesn't seem
Speaker 1: to matter that much. But if you can get a
Speaker 1: big VC like Breakthrough to put five hundred million dollars
Speaker 1: into your fund, you can coast three years on that
Speaker 1: without delivering anything.
Speaker 2: That leads us to pride. And the way I would
Speaker 2: describe pride is we will bottle the Sun. We will
Speaker 2: go back to the source of all energy.
Speaker 3: What's that fusion.
Speaker 1: I'm gonna say I agree with that premise. We are
Speaker 1: going to bottle the song. We're going to work off
Speaker 1: fusion energy. But we're going to position the fusion energy
Speaker 1: at a safe distance from anything about ninety three million miles,
Speaker 1: and we're gonna make sure it's gravitational pull keeps us
Speaker 1: at a safe distance in kind of the Goldilock zone
Speaker 1: for our planet, so that enough energy hits to warm
Speaker 1: us out of glaciation, but not bake us like mercury.
Speaker 1: We're going to capture that fusion energy. I think that's
Speaker 1: what we'll do. But yes, we are. We are going
Speaker 1: to depend on fusion energy.
Speaker 3: No, but again, I mean here, if I look at
Speaker 3: those startups Elion Energy five hundred million dollar rays backed
Speaker 3: by some altan common Well Fusion two billion, General Fusion Vancouver,
Speaker 3: twenty million, Tokamac Energy, ox Watsch one hundred and seventy
Speaker 3: two million, zap Energy three hundred and thirty million, Renaissance Fusion,
Speaker 3: microfusion THAE Technology one point two. I mean, this is
Speaker 3: absolutely phenomenal and disgrace is the EE Project in front,
Speaker 3: which is what is it like thirty years late, twenty
Speaker 3: times of a budget.
Speaker 1: I think it's up to eighty billion, and I looked
Speaker 1: into it a couple of years ago. Because here's its
Speaker 1: target for success for twenty forty. The target for success
Speaker 1: is to maintain fusion for five minutes with thermal net
Speaker 1: energy delivery. But the thermal net energy delivery, if you
Speaker 1: actually bolted a generation device onto that, it would actually
Speaker 1: get down to the amount of energy required to run
Speaker 1: the process is equivalent to the amount of electricity you
Speaker 1: get back out of it. So that's their target for
Speaker 1: sustained fusion five minutes with no electricity net delivered. All
Speaker 1: these breakthroughs you hear about fusion and look into them,
Speaker 1: nobody's actually doing fusion yet. We've just gotten to the
Speaker 1: point where really hard, weird engineer problems are being exposed.
Speaker 1: We're so far from doing that. I also like to
Speaker 1: say there is a place for fusion energy we will
Speaker 1: require in spaceships past the orbit of Jupiter sometime in
Speaker 1: the next two hundred years. I'm glad that research departments
Speaker 1: are investigating it and that money is being spent on research,
Speaker 1: but it has nothing, nothing to do with the energy transition.
Speaker 5: Great, well, let's not brings us on to last And
Speaker 5: what we really want to talk about here is what
Speaker 5: we describe is that drop in fantasies for every engine biofuels.
Speaker 3: So where do we start. Guys, that all biofuels started
Speaker 3: twenty five years ago. First you have two big biofuels.
Speaker 3: You've got a sugar based channel which is in Brazil
Speaker 3: and relatively cheap. But that you get corn based channel,
Speaker 3: which is an absolute disaster. Half of the acreage for
Speaker 3: corn in the US going to biofuels. And of course
Speaker 3: it was designed at a moment where the US was
Speaker 3: importing a lot of oil and they were peak oil
Speaker 3: and they thought oil would go to three hundred. And
Speaker 3: of course big a grow was there and so we'll
Speaker 3: get a solution with com based eight and ol. And
Speaker 3: that created a constituency. Plus, as you know, the first
Speaker 3: round of the US election is in Iowa. So I
Speaker 3: was big on the biofuels and that systems fossilized itself.
Speaker 3: Now in Europe, I think at some points they say okay,
Speaker 3: stop the blending. And still today it's designed for a
Speaker 3: baryl of oil at one hundred and fifty upper barrel
Speaker 3: and because as much cheaper, but basically you have to
Speaker 3: force it into the system through blending mandates.
Speaker 1: Michael I am actually a strong advocate of biofuels for
Speaker 1: SATH and maritime fuels without getting into that subject deeply,
Speaker 1: but I just have to say that some of the
Speaker 1: first generation biofuel stuff has led to a lot of
Speaker 1: negative press, which doesn't hold up when we start looking
Speaker 1: at second generation biofuels. In third generation biofuels, we're now
Speaker 1: the plant where we can do or crap. We can
Speaker 1: take the corn husks and the corn stalks and feed
Speaker 1: them into the biofuel processing and get ethanol out of
Speaker 1: there or methanol, and we can feed the corn into
Speaker 1: the food system. It turns an agricultural waste into a
Speaker 1: valuable product. Similarly, we can take the corn stalks and
Speaker 1: put them through biodigestors and create biomethane for manufacturing of
Speaker 1: methanol or long duration energy storage and a couple of
Speaker 1: other things. We've got uses there. I think that demonization
Speaker 1: of biofuels as an agricultural food displacer don't stand up
Speaker 1: to scrutiny. I think Europe is far too precious on
Speaker 1: the subject. It's just calories, whether they're consumed by animals,
Speaker 1: humans or motors, and we need calories of some sort,
Speaker 1: and we need liquid fuels with some sort of future.
Speaker 1: But imagining that we're going to run our trains on
Speaker 1: them or trucks or cars, well that's nonsense. All ground
Speaker 1: transportate and electrified direct here with batteries.
Speaker 2: So, Michael, I certainly agree with you, and I'm not
Speaker 2: going to add anything at that, but I will what
Speaker 2: I do really want to talk about is rats, and
Speaker 2: in particular, I really want to talk about the rat
Speaker 2: of mister Trump. So what's he got to do with
Speaker 2: our space? It's what we call the culture war at sea?
Speaker 3: Oh sure, wind, And we just had a series of
Speaker 3: ban news for those Osteda who really were because of
Speaker 3: yourpen developer in the US. They took five out of
Speaker 3: the thirty gigawad of project and that cancelation in New
Speaker 3: Jersey which caused them a lot, and now they are
Speaker 3: a revolution project which is eighty percent completed, has been
Speaker 3: stopped and they're trying to raise money. But the delusion
Speaker 3: is going to be phenomenon. So I'm just going to
Speaker 3: say one thing equinor instead very good, Lauren, could happen?
Speaker 3: Could happen?
Speaker 1: I'm going to lean into something else. I'm going to
Speaker 1: blame golfers. Basically, a lot of the rage against wind
Speaker 1: turbines comes down to golfers being pissed off at missing
Speaker 1: a potts or something goes on with golfers anyway. A
Speaker 1: lot of Trump's anger about wind turbines are that he
Speaker 1: was building another golf course in Scotland and at the
Speaker 1: same time, a long way offshore there was supposed to
Speaker 1: be a wind farm going in and some golfers would
Speaker 1: be exposed on the tee to somewhere in the horizon
Speaker 1: a wind turbine blade or two. And this turned into
Speaker 1: a fourteen years of Trump thinking wind turbines of the
Speaker 1: devil's pitchforks and fighting against them constantly. Trump doesn't care
Speaker 1: what he says is true or not. He cares if
Speaker 1: it'll get hit a wedge that he's trying to communicate
Speaker 1: to for votes or for gain at the moment when
Speaker 1: he says something. So when he's attacking wind energy, he's
Speaker 1: feeding into the anti wind ragtag band of Zelitz in
Speaker 1: the United States and telling them what they want to hear.
Speaker 1: And he's also telling the people who were worded in
Speaker 1: the fossil fuel industry about displacement by renewables what they'd
Speaker 1: like to hear, except that the fossil fuel industry doesn't
Speaker 1: want wind and solar to go away either. Many cases,
Speaker 1: they're invested in them and they need electricity for operations
Speaker 1: of their facilities, and they want cheap electricity and wind
Speaker 1: and solar to provide that. So Trump is irrational on
Speaker 1: the subject, but he's feeding into the irrational leading in
Speaker 1: the United States.
Speaker 2: There's another view which I'd maybe like to talk about
Speaker 2: on offshore wind, which is just the economics of it.
Speaker 2: If I look at the United States, I go, oh,
Speaker 2: why do you even need it?
Speaker 3: To see?
Speaker 2: The United States? North America gets so much low cost
Speaker 2: electricity as it is, whether it's some gas, wind or solar, Yeah,
Speaker 2: why do it? So that's my set of thinking on that.
Speaker 2: And by the way, sorry, if I was Trump as well,
Speaker 2: it's the easiest fight to pick is offshore wind because
Speaker 2: this and all the players are farm so it's a
Speaker 2: win wind from in every way. Right.
Speaker 1: It's not true though, so geev Veranova has the wind
Speaker 1: farm and operation at offshore. Second, early Gerard you're forgetting
Speaker 1: that the United States is finding impossible to build transmission.
Speaker 1: They've got all that lovely wind in the prairies, but
Speaker 1: they can't get it to the coastlines. It's much easier
Speaker 1: to put a submarine of HVDC cable from thirty kilometers
Speaker 1: off shore into New York than it is to get
Speaker 1: one from Iowa to New York.
Speaker 2: And that's a fair point. So you could also just say, well,
Speaker 2: let's just put an undersea cables right along the east
Speaker 2: coast and move electricity up right. But the US, you
Speaker 2: know as well as I do, it's just very difficult
Speaker 2: to get anything done because it's all state level policies
Speaker 2: and you've got state interests, you know, not aligned with
Speaker 2: the state beside, and it's just really complex.
Speaker 1: After talking to Jigar Shah a couple of years ago
Speaker 1: on a new into his role with the Department of
Speaker 1: Loan's Office for the US Department of Energy, my takeaway
Speaker 1: there was the United States has devolved the ability to
Speaker 1: say no down to the county level and off an
Speaker 1: the individual. Yeah, and transmission is a victim of that.
Speaker 3: If I compare the Norse, where you have shallow waters,
Speaker 3: you have an exiting oil supply chain. And this is
Speaker 3: an energy poor region, but it's not hesitated around the NORSEEA.
Speaker 3: And as Jarr says, they've got so much options in
Speaker 3: the US that whatever push was extremely political and the
Speaker 3: moment the politics change. And I think that the Europen
Speaker 3: developers who went to the Nazi did not fathom the
Speaker 3: difference in the mindset. So they went there, It's okay,
Speaker 3: there's you know, have the contract and we're going to
Speaker 3: do this, and and they just thought that because people
Speaker 3: spoke English, they thought the same way. They didn't think
Speaker 3: the same way. So off showing the US. Our heart
Speaker 3: is bleeding for hosted, but it's lost for our generation.
Speaker 2: Let's move to the last one. Envy And actually, really
Speaker 2: this is my pet hate, which is ESG park tecking.
Speaker 2: And what you've seen in the last few years really
Speaker 2: is companies box ticking and chasing ratings and enables and
Speaker 2: telling the world that they're better than their competitors and
Speaker 2: their peers. And actually what you realize is, you know,
Speaker 2: it's that real world decarbonization. I don't think so has
Speaker 2: it really improved the way brisinesses are governed? Know? Has
Speaker 2: it really had a positive impact on society questionable.
Speaker 1: My exemplar for this was when Exxon Mobile scored high
Speaker 1: on ESG rankings and Tesla didn't. There's a lot to
Speaker 1: say about where Tesla has gone and where a Musk
Speaker 1: has gone. Labor practices weren't great, but this is the
Speaker 1: leading driver of electrification of transportation in the world that
Speaker 1: created the industry as much as anything else. Tesla also
Speaker 1: does battery storage and it also does solar at residential, commercial,
Speaker 1: and utility scale. It is a very virtuous company by
Speaker 1: most standards, and when it fails the ESG ranking, there's
Speaker 1: probably something wrong with the ESG ranking.
Speaker 3: What as you reminder that at the beginning the guy
Speaker 3: who said that was the sea of gencore, you know
Speaker 3: es the guy ticking boxes in the sub basement. But
Speaker 3: yet created such a bureaucracy. It's absolutely insane, the bugs created.
Speaker 3: Of course, the European Commission has put some lows and
Speaker 3: lows and lows, and it's it's totally out of control.
Speaker 3: But anyway, I would say it should be e WP. Okay,
Speaker 3: we need electrician, welders and plumbers, not the ESG specialist.
Speaker 3: Were you electricians?
Speaker 2: Well, there's a popus I like it.
Speaker 1: I will say that right now, there's a lot of
Speaker 1: indicators that now that were past the ESG bubble, real
Speaker 1: consideration for the right doing the right stuff is still
Speaker 1: proceeding because ESG was well intentioned. One of the exemplars
Speaker 1: is that despite Trump being in office and saying drobaby drill, well,
Speaker 1: Wall Street has cut funding for fossil fuels investments twenty
Speaker 1: five percent. There are many many billions less flowing into
Speaker 1: the fossil fuel industry from investors than there were a
Speaker 1: year ago. You know, that's a very good sign. And
Speaker 1: I would say that right now there's a lot of
Speaker 1: green hushing going around. A lot of corporations are doing
Speaker 1: very good things in terms of decarbonizing their operations. It's
Speaker 1: just not being touted because it's not the time to
Speaker 1: tout that. They know the needle's going to swing on this.
Speaker 1: They know they need to do it, and they know
Speaker 1: that they are at risk globally regardless of what the
Speaker 1: United States does. Big corporations have to operate around the world,
Speaker 1: and if the United States is this retrograde pool of
Speaker 1: polluted smoke and carbon dioxide emissions, that doesn't mean much.
Speaker 1: If they also have to operate in China, Indonesia, Australia
Speaker 1: and Europe.
Speaker 2: Michael, what I'd like to add, as well as going
Speaker 2: back to just me putting my economist out on is
Speaker 2: what is ESG? What was it about? Well, the E
Speaker 2: is environmental and the S s societal, And there's no
Speaker 2: doubt what we can say is that we have what's
Speaker 2: called externalities, which is that you know, economic life as
Speaker 2: we know it can have a negative impact on societies
Speaker 2: and environment. So being able to actually measure that and
Speaker 2: show that to investors makes a lot of sense to me.
Speaker 2: And again, you know what we tend to do is
Speaker 2: governments tend to often tax, you know, they tax pollution
Speaker 2: and stuff like that. That's how we generally deal with it.
Speaker 2: But giving that visibility is very import But the G
Speaker 2: is very interesting for me because and you gave the
Speaker 2: example of Tesla and Exon, Well, Tesla did very bad
Speaker 2: on the G. Why because that you could argue that
Speaker 2: the corporate governmance is not good based on the way
Speaker 2: they're rated. On the other hand, I say, well, why
Speaker 2: would you invest in a badly government business in the
Speaker 2: first place? Because for me, governments is also about management
Speaker 2: and leadership. Why would you do this It's a key
Speaker 2: task of a fund manager is to invest in good businesses.
Speaker 2: But somehow this G got completely mixed up in and
Speaker 2: around good governments. It was mixed up in and around
Speaker 2: and moved really in towards diversity and a whole four
Speaker 2: pile of other areas that are actually not to do
Speaker 2: with good governments and leadership of business. And I think
Speaker 2: the G is the thing that's disappearing the E and
Speaker 2: the s. Most people across the word will say, listen, yeah,
Speaker 2: we do have to take care of.
Speaker 3: The E and es. Yeah. And look, the G has
Speaker 3: been totally trampled by a Silicon valley. Now there's a
Speaker 3: god founders, and you know, they have ten votes per share,
Speaker 3: and they had such a success over the past fifteen
Speaker 3: years in terms of wealth creation that nobody cares about
Speaker 3: governance anymore as long as the stock's going up.
Speaker 1: What I will say is in the United States, there
Speaker 1: was a shareholders only governance model for a couple of
Speaker 1: decades in the eighties through the twenty tents, and that
Speaker 1: is starting to shift away. And they've got b corps
Speaker 1: and other types of corps which allow fiduciary responsibility by
Speaker 1: the board and corporation not just to be the shareholders,
Speaker 1: but to multiple stakeholders, including employees, including societies they live
Speaker 1: in and stuff. And so we are seeing a broadening
Speaker 1: of that stuff, and we're seeing that the shareholder only
Speaker 1: rights the United States are going away. There's a revolution
Speaker 1: going on there. So the United States is moving more
Speaker 1: towards what more, what Europe is doing, and that's positive,
Speaker 1: I think, and greet Todd.
Speaker 3: Okay, Jack, can you summarize the seven scenes of energy
Speaker 3: transition before we wrap it up? I can, indeed, just
Speaker 3: to summarize greed, which is questionable, carbon capture technologies, bluttony
Speaker 3: for us as hydrogen sloth is particular, small modular reactors,
Speaker 3: but nuclear I could say in general, just because they
Speaker 3: have not been able to deliver on time around budget
Speaker 3: over the last twenty years. Pride is all about taking
Speaker 3: that energy from the sun, and I think we're all
Speaker 3: clear in our heads that the best way to do
Speaker 3: this is with solar panels as opposed to fusion, which yeah,
Speaker 3: it's great to invest in science, but don't budget on miracles.
Speaker 3: Is the way we would conclude on that lust is
Speaker 3: that we're going to have biofuels everywhere. We do believe
Speaker 3: biofields are very, very important, but the whole thing is
Speaker 3: let's keep them for the heart to electrify edges, not
Speaker 3: as a universal fix.
Speaker 2: And then we got rats, and the rat really is
Speaker 2: what's going on offshore wind. And then the final one
Speaker 2: is envy, which is ESG box ticking, which I think
Speaker 2: we all hope changes in the next few years. In fact,
Speaker 2: I think we're all agreeing it's already is changing. Right
Speaker 2: as you said, Michael, we definitely have a real revolution
Speaker 2: in the whole area of governance and what's going on there.
Speaker 3: Okay, guys, was a pleasure looking to you.
Speaker 2: Have a good evening, enjoy the rest of summer.
Speaker 1: Ear Will you take care.
Speaker 2: Thank you for listening to Redefining Energy. Don't forget to
Speaker 2: rate the show and subscribe on Apple, Podcast, Spotify, or
Speaker 2: the platform of your choice.