[Music] [Laughter] [Music] welcome back everyone good afternoon good evening wherever you are i'm derek brower the ft's u.s energy editor i'm in new york uh so anybody joining me on this side of the atlantic uh welcome uh one person who is and i am delighted is joining us is the united states secretary of energy jennifer granholm for the conferences last session truly leaving the best to last i think before we begin a note of housekeeping please um any questions that you have for madam secretary please send them in using the box chat box on the right of your screen and second if you want to tweet about this please use the hashtag ft energy tran uh madam secretary welcome um let's begin um if i could i'd like to start with europe because a lot of our audience is there there's an energy crisis underway as you know in europe gas and electricity prices are at historic highs do you blame russia for this um well we're certainly watching it i'll say this i just got back from poland and met with a number of the eastern and central european countries and there was a a deep concern that there was a withholding of supplies and manipulation of the market in order to demonstrate if you will the indispensability of russian gas as germany considers its nordstrom two approvals however i i don't have information to say that that is the case we are watching it very carefully obviously the uh wants to make sure and and it's you know there is a ripple effect in the united states as well we are seeing natural gas prices um shoot up uh also but um so we have we're undergoing a process internally to the federal government just so that you know to look at this issue and to make sure that we're doing all we can both here and uh in europe to ensure that people have the supplies they need do you does that include the possibility of investigating market manipulation by gazprom as the polish government has called for um well i know the polish government was very uh concerned about that as well suffice it to say we're aware of the request we're aware of the um fact that there does seem to be well i say a choke point um and not as much supply but um there are also i understand and it's true in the united states too this ramp up after covid takes a little bit more time than people would like given how quickly winter is emerging and it is projected to be a bit of a colder winter so um there are those issues just uh let me just say that we're looking at it it sounds i mean those are fairly moderate comments it sounds like you're trying to cool some of the rhetoric because some of your uh colleagues in europe are talking about this as an energy war almost another we're in the grip of another energy war do you fear that it could spiral into that i worry about that certainly i mean you don't want to see um energy made into a weapon and i the weaponization of um of energy is a serious problem i'm not saying that that is happening right now i am saying that we understand the concerns and that given the uh enormous jack up in prices there deserves to be special eyes on it and we are looking at it but at the moment we don't have a conclusion on that is there anything you think the u.s can do on the supply side for example to help and i ask because the previous administration as you know talked to freedom gas and so on helping to break europe's dependence uh on russian gas should the u.s or can the u.s send more gas right now most of the cargos that are sold in the spot market seem to be bought by asia right now and the market is sucking them in one direction they're not arriving in europe is there something more that the u.s can do to help relieve europe you know again we have an interagency process looking at this i mean you know as you know and as europe knows i mean we are in a position where we preside over a free market and so we don't own the means of supply and we don't own the ability to direct and so the question is what are the tools at our disposal to make sure that there is supply that's adequate uh both for europe as well as for the united states i will say that our lng supply at this moment is almost to the to the cap of the existing capacity so um it is you'd have to build out even though um new new uh new terminals are authorized they have not been built out yet it would take obviously some time for that to happen um to jack up additional supplies so it is uh it's it's not as obvious as of a solution as one might otherwise think the capacity limits are almost reached let me stay with the international market and ask for oil prices because uh wwti uh west texas intermediate the us benchmark is near 80 uh brent is above 80 levels that some economists say will start to slow the recovery the economic recovery from the pandemic the administration has expressed its alarm about gasoline prices and president biden has talked about them uh do you think opec is doing enough last week they met earlier this week they met and after the us asked for more supply they stuck to their existing plan are they is the opec group of producers opec plus are they doing enough to cool what could be a damaging oil price rally well i think that everybody was hoping that there would be additional supply made available so that prices would not be jacked up and the president president biden has made it clear that he wants americans to have access to affordable and reliable energy obviously at the pump but natural gas too the administration really is committed to doing everything we can to make sure that everybody's paying that americans are paying um fair and affordable gas prices um you know we the tools this is a similar are a similar problem right we do not we are we don't own our own gas supply or oil supply and so the market is what the market is presidents don't control the cost of gasoline and we also are aware that we want to move into a clean energy environment and that we want while this transition occurs we want for people to not bear the cost of that in terms of at the pump from the president even in deciding on how to pay for his big agenda in congress he made it clear that raising gas taxes for example is not on the table he drew a red line for that so he he does not want to raise costs on everyday people for anything and so while we go through this uh transition he wants to incentivize the development of clean technologies and clean fuel supplies um without having have everyday citizens pay for the cost of that and the white house has said that all tools i think gen circus said this earlier this week all tools are on the on the table in terms of trying to deal with this uh price surge does that include um releasing oil from the strategic petroleum reserve for example yep it's a tool for sure and is that a possibility in the next coming in the coming weeks well it's it's a tool that's under consideration um you know there are regularly scheduled sales already set so a regularly scheduled sales set so that might provide some but again it's very much marginal assistance overall given this the scope of the of the problems but nonetheless that is a tool and certainly the president will consider that and uh possibly restricting exports is that also on the table um that's a tool that we have not used um but it is a tool as well and as i say where we have an uh an intergovernmental process that is going on and um you know as jinsaki said all tools are on the table but um you know some some are more readily available than others okay let me turn to the us now and ask about um and we'll stick with oil for a second oil and gas u.s producers share producers as you
know say these price rises are the outcome of policies from the biden administration in particular they cite the moratorium on uh leasing of federal lands for fracking do you think producers are in the u.s should be doing more to increase production right now uh themselves uh let's be clear that um the moratorium was on new leases and there were a whole lot of existing leases that were not even being used that that were available that are available to be able to be taken advantage of you know we want to see supply and demand be at a place where we don't see huge increases in prices so i'll just leave it at that and the president is very concerned about that okay let me turn to congress uh the president has been uh adamant that his sweeping clean energy agenda will go ahead uh these are huge plans as we all know and as we've discussed a lot in this conference and his agenda rests on congress's approval of these plans uh later this uh this month potentially or when the vote comes in the coming weeks you've been following the the uh the machinations in the debate in congress closely of course and are very familiar with what's happening what do you think is likely not what you want to come out of this process but what do you think is likely now to emerge from congress in terms of you know how much of the 3.5 trillion dollar reconciliation package how much of the 1.2 trillion dollar bipartisan infrastructure bill how much of these packages will survive by the time congress is done with them yeah i mean as you're aware the bipartisan infrastructure deal will largely stay intact i predict and i think that um that's um pretty clear it's just a question of the size of the build back better uh the second piece the buildback better agenda um you're aware of course that the president um spoke with members of his party over the past couple of days and told them that they would have to pare down the ambition and so whether the real question is whether they uh pair everything back or whether they put certain categories off to the side and fund others fully um i know that even just as i was coming on to this call i saw senator manchin describing what he thought were his priorities and he has a pretty um big say in how this is shaped so um i do think that you know combined this is still going to be a huge investment in our nation and in you know from my column of the world in the department of energy it is going to be a huge investment in technologies and in projects and in the grid deployment authority that really takes us to the next level and knocks down a lot of the barriers that we have seen in the past so i you know the issue really comes down to quite honestly whether there will be this clean electricity performance program or some version of it that incentivizes utilities to do the build out and has both incentives and penalties and goals and so is it the cepp as we call it or is it something uh that's that's got those elements uh that is part of what the last bit of negotiation is to occur i think there will be um consensus around the investment in tax credits to incentivize the build out of clean energy um we have been um eager to incentivize all kinds of clean energy uh clean broadly defined that includes obviously wind and solar and renewables but it also includes decarbonization of fossil fuels it would include nuclear so we are um you know i i continue to say this is about silver buckshot not a silver bullet to incentivize all of those in the way that this bill does i think will be enormous for america and enormous for the movement forward of these technologies and most importantly from the president's perspective is jobs in this overall sector it's not just one industry it is a sector uh that includes a whole slew of industries that provides jobs for people i'll come to jobs in a sec let me just if i may ask a couple of follow-ups so does the silver buckshot does that include natural gas in the cepp because it seems that that may be a sticking point for senator manchin if the cepp can include natural gas or broadly defined if natural gas can be included in a clean energy package he may approve it would you be happy for natural gas to be in the cepp uh natural gas with carbon capture technology yes um i will say that the senator senator manchin has been a huge advocate as have a number of decarbonization technologies like carbon capture and sequestration and so presumably then if natural gas with carbon capture could be in it coal with carbon capture could also be in it yeah i mean part of the you know decarbonization is decarbonization and so um you know the question for coal has been does it pencil out but the um you know the cepp provides the means to build out that technology and that's what it funds it doesn't fund shareholder profits it funds the build out of these technologies and we want to take these technologies to scale it's not just just the us that is looking at these uh decarbonization strategies so it's um you know we want to prove it out part of the infrastructure bill that was passed includes carbon capture and um clean hydrogen hubs demonstration hubs so you know we want to take it to scale so that we can reduce the cost of it so that it can be one of the pieces of buckshot that's in our goal of clean dispatchable base load power right um and just to be clear so a new new natural gas fire power station with ccs could be part of the utilities program could be okay um let me ask about jobs uh because i know as you said this is very dear to the administration and president biden's agenda for clean energy um nonetheless the the pushback from some people in the traditional fossil fuel jobs is that clean energy jobs are less reliable uh less long-term lower pay um frankly they come with higher risks and some of the skills aren't necessarily transferable in the way that some people claim how do you how important do you think it is first of all for these communities and fossil fuel areas of wyoming and you know non-democrat voting areas of the country frankly to be brought alongside or to brought in be brought in you know along while you you push this energy transition or do you just think that some of these will essentially be casualties of a necessary shift yeah this is a great question and hear me loud and clear the president doesn't want to leave anyone behind and he feels very strongly that these communities in particular he has a whole justice 40 initiative and that justice 40 initiative and the focus on coal and power plant communities and the focus on communities that have been left behind because they have perhaps been located in in the shadows of smoke stacks and have uh disproportionate amounts of asthma et cetera both types of communities just transition communities and uh justice 40 communities are going to be part of our place-based strategy for for targeted focus on investments we have not as we have not really had that before i mean other countries have europe has but we have not really focused uh as much as we should have on these transitioning communities i tell you the reason why i think the president asked me to be secretary of energy is because i was governor of michigan and we had we were in that situation our main product was a is a product that uses fossil fuels with an internal combustion engine and so we saw our industry on its knees through the great recession and a lot of that was the great recession compounded by the fact that we saw a lot of imports um that were much more fuel efficient honestly japanese imports etc and people were expressing a preference and so we had to make a decision and this is why the president is so key on this because during the recovery act they funneled money to michigan to help us diversify into areas that we knew we could be competitive in including car 2.0 which is the electric vehicle and the guts to that vehicle which is the electric vehicle battery so that that experience and now of course michigan um is on the rebound electric vehicles we you know you saw all of i know we're gonna have a cut you want to have a separate conversation about vehicles but i just have to say this is right near and dear to me and the president the point is that the president sees that example and sees what's happening in these coal and power plant communities and says we can offer them an ability to diversify i say this to senator manchin all the time west virginia powered this country for a hundred years on coal they can power our country for the next hundred years but using clean energy and we can figure out what are the technologies that are constant with the tech the experience and the skill set of the workers there so so do they have expertise in subsurface yeah let's look at the hot spots in west virginia for geothermal let's give people the ability to attach carbon capture and sequestration technologies to existing power plants let's make sure we have hydrogen clean hydrogen hubs and that by the way might require the ability to lay pipe underground to move carbon etc so there are tons of skills in this clean energy world that are good skills including i mean the senator mansion would love to put nuclear on top of coal plants like they just did in wyoming terrapower funded by bill gates just put uh or is uh slated to put a coal plant excuse me a nuclear small nuclear reactor adjacent to a coal plant that is a huge opportunity good paying jobs union jobs so there's you know we do not want to leave any community behind we are not going to leave any community behind and we're going to direct investments into those communities okay let me ask about cars um ford and sk innovation recently announced this huge uh 11 billion investment plan to build assembly and battery plants in tennessee and kentucky and there's this big ev rollout that they're planning there um do you see that region of the country is tennessee about to become the kind of eevee the detroit of evs don't say that to me i'm still i mean i am good for tennessee i mean i have my home team you know but honestly i mean there's enough love to go around i mean we want to see these investments in batteries in the united states and the supply chain for those batteries the anode the cathode the separator material the electrolyte those are all separate companies different kinds of investments we want them all in the us and that includes by the way responsible extraction of lithium and cobalt and you know the materials that go into those batteries and we don't do that as much in the united states very few places we end up importing and that's true with processing those materials we don't have a single processing facility in the united states one of the reasons why the president has focused on the battery supply chain to be able to get the whole value chain associated with electric vehicles in the united states and i'm sure tennessee wants it michigan wants it georgia wants it they all want it and you know good let's compete okay um let me ask you a question about infrastructure and energy infrastructure in particular there was obviously a huge focus from the administration on infrastructure full stop period but the energy infrastructure seems to be particularly thorny mata for this energy transition because as you know transmission lines intercost states and and some of the permitting for this is difficult i spoke to an offshore wind developer who talked about starting the permitting process in 2007 and only getting approval for it um last year so uh but there's the problem is not just on clean energy either pipeline uh developers say that they can't get approvals and and we saw the vulnerabilities when the colonial pipeline went down earlier this year of the u.s energy you know consumer to the
vulnerabilities in the energy infrastructure system in the us how does how can you how does the federal government fix this problem speed up this process that this isn't hindering the transition or or even hindering energy security yeah it's a this is a great question i mean the permitting for some of these projects especially on the transmission side uh it is just you know when any type of infrastructure that runs across multiple states is going to be onerous but there are steps that were taken to help clear the obstacles to approval i hear more about it on the transmission side so i mean for one thing here's an example the department of energy already has authority over public highways and other rights of way public lands where we can sight and permit new transmission lines quickly and so if we can use those existing rights of way and create and just put them up in easements that's fantastic earlier in the year i know the department of transportation issued new guidelines on how to leverage these rights of way public rights away for high priority transmission projects and by the way to serve as a model for private partners like railroads to do the same and part of that infrastructure as well is building out the infrastructure for electric vehicles and so you can imagine a combination of perhaps transmission ev build-outs along public rights of way which lessens the resistance uh of course since it is on public land you know congress clearly wants us to uh address these bottlenecks too and so that bipartisan infrastructure deal includes a new grid deployment authority which would let us uh at doe designate corridors of national interests along those existing rights away allowing for uh quicker construction and would allow doe to take a um a position on a proposed transmission line because as you know transition mission lines are not built on spec usually you have to have off take and if we see it as an important one um that we would take a position potentially to do that off take so that they can then uh afford the the build out and the surety that they will be able to have that off take um doe and the ferc the federal energy regulatory commission um they we both have roles in getting projects uh permitted and we meet every other week uh to make sure that we are in sync and aligned uh to be able to move faster you know and then on the oil and gas side you know obviously we need to invest in uh infrastructure that's going to help us build our clean energy economy and while we still you know we obviously will also have pipelines into the future and want to make sure those pipelines are leak-free particularly natural gas pipelines as we're concerned about methane emissions and there will be more on that as you're probably aware but that's over in the epa side of things we also they'll want to continue to build up the infrastructure for the clean side uh and emphasize that as well and i see that i'm bumping up against time i'm so sorry about that uh i may have to jump uh off at this moment uh but i really appreciate the chance to have a conversation thanks for the smart questions madam sexy thank you very much you bet uh that is it from the ft live energy transition summit it's been a provocative uh two days i think um the consensus from my panels and the ones i listened to was that transition energy transition to a cleaner energy future is is well underway and is probably irreversible uh the market is moving in that direction policy now needs to follow more quickly too to support it but there will i think this came up repeatedly there will be dislocations caused by this transition and involved in this transition and these need to be addressed in particular there are gaps in the technology that needs to be filled that was clear from a number of uh panel discussions and there are fossil fuel communities that cannot be left behind and we just heard the secretary of energy in the united states talk about that these are hard questions and um probably need more than what uh greta timbery describes as blah blah blah from politicians and bromides um that's certainly not what we just heard from the secretary of energy uh i was delighted with that conversation um i am i have been intrigued uh to hear in a lot of the panel discussions and i think some of my other moderators at the ft have felt the same way um the view that the fossil fuel supply crisis that is underway now soaring prices for fossil fuels will not um slow this energy transition but will actually accelerate it uh those are my kind of concluding thoughts thank you to everyone who participated uh thank you to the excellent green room and backroom staff who made all this happen uh the planners and so on thank you to our lead sponsors baker hughes chevron ey mitsubishi heavy industries group oliver wyman to our associate sponsors ansys axbow blackstone fuel cell energy lundin energy national grid and warley thanks also to our supporting organizations bioenergy europe international solar alliance euro-electric gas naturally and commodities trading association everyone who's still here do remember you can watch these videos from the conference on demand for the next 90 days at energy.live.ft.com and finally i look forward to seeing everyone i hope in person for a change at the ft energy source live us edition in houston in early april with a date an exact date to be confirmed soon see you there and thank you for being here [Music] [Laughter] [Music]
2021-10-09