Episode Transcript
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Speaker 1 (00:00):
The Michael Barry Show. But I do think it's important
to hear from folks with different perspectives, lots of experience,
who are well respected in their field. John Berger is
one of those folks. He came highly recommended from a
from a number of folks. He co founded Conentango Capital Management,
(00:21):
a venture fund which focused on early stage energy technologies,
and everything John Berger has worked on is things that
I pooh poo all day long. And I think it's
only fair to talk to folks and ask why are
you so high on solar? Why are you so high
on renewables, and just have him share his perspective. John
Burger is our guest. Welcome, Thanks Michael.
Speaker 2 (00:43):
Great to be here.
Speaker 1 (00:45):
That was kind of a backhanded introduction. I don't know
if you caught all that. I don't want to deny that.
And the reason was I didn't want you to get
all fed I told you this the first time I
met you. I didn't want you to get all fired
up over solar and me sit here going hm hmm,
and people at home go, you hate soldier, Michael, Why
are you lying?
Speaker 2 (01:01):
All right?
Speaker 1 (01:02):
So you were recommended to me as a guy who
has forgotten more about energy overall than most people will
ever know. I mean, I suppose we could put mister
Simmons into that category or rich Kinder. But let's start
with something that everyone cares about, and that is the grid.
You've been an advisor to FIRK, the Federal Energy Regulation
(01:23):
Regulatory Committee, You've been around this a long time. You've
looked at alternate ways to monetize alternate energy sources. Where
are we on the Texas grid right now? Because my
fear as a Republican is going this is going to
bite Republicans on the rear and lead to a switch
and power in the state. But where are we in
grid bandwidth now? And where do we need to be?
Speaker 2 (01:45):
Well, you know, we had a trying summer in twenty
twenty three and then last year and twenty twenty four
is actually pretty benign, really benign maybe from a power
plant producer's perspective, to benign in terms of the cash
flow that would go to these plants. And so you know,
why is it that we've been able to dodge some
of these bullets as a demand from you know, data
(02:08):
centers and restoring and energy terminals and a bunch of
you know, just economic growth why have we been able
to dodge them these bullets And the answer is surprising,
is you know, solar in batteries, batteries in particular, I
think we're over to twelve gigawatt hours now and climbing
higher in storage. And that's been key and instrumental between
(02:28):
solar and storage to really solve problems, say for instance,
in last summer and as a great example of that
in August. So when you look at these technologies and
talk about them, look at them as technologies. You know,
I always say a solar panel never voted for either
a Democrat or a Republican, and it's just technology, and
(02:48):
that's what we need to be looking at, as well
as looking at and embracing our history with all the
fuels that I think are going to be needed for
a long time, specifically natural gas, and then looking ahead
to new technologies. Like you're a fan of Michael with nuclear,
I'm less enthusiastic, So I'll put that up there. Much
less enthusiastic about nuclear. I think it's fine to work ahead,
(03:09):
but we've got to understand that they're the problems of
cost and planning and getting these plants online has not
been solved yet, and those are really big problems. So
it's something.
Speaker 1 (03:22):
John Berger is our guest. You might have known him
from Sonova or a number of other energy plays he's
been the leader of over the years. Coming up, it's
the excitement of O Sean the Michael Barry Show. Everything
you need and most everything you want. John Berger is
our guest. He is a committed energy buff in the
(03:43):
monetization and policy side of how we power things, a
subject I find of great interest because you know, we
can talk a lot about political issues, but energy is
probably the greatest issue we spend the least amount of
time on, and we I think of it only in
terms of what we pay for gas at the pump,
But it's so much more than that. It's so much
(04:05):
more than just what we pay in our electric bill.
Now start adding what you pay for gas, your electric
bill at your office, your company's electric bill, manufacturing, the
cost of airlines, the cost of a ticket to get
here and there, the cost of heating and cooling your home.
All of these things affect your quality of life in
(04:29):
a massive, massive way. So, John, we were talking about
the electric grid. You've been very involved with renewables. I
am less bullish on renewables, but make the pitch, give
me the two to three minutes on why you think
renewables are important and the sort of standard criticism you
(04:50):
get of prioritizing those, and how you would defend that.
Speaker 2 (04:56):
Certainly. So I think first and foremost, let's set aside
the pricing of carbon. You know that that is a
you know, gluten. We can get into that argument about
whether it is or isn't and whether you know we
should or how we should ration carbon or not. And
so let's set that aside. Let's just look at these
uh solar, By the way, solar and wind have very
(05:18):
little uncommon I just want to make that point. One's
rotating machinery, one solid state.
Speaker 1 (05:23):
No, they had a lot in common. You are right,
you are right, grant you that, you're grant you.
Speaker 2 (05:30):
But I just want to make that point because that
that that that has a material difference. And let me
let me make this. One you can put on your
office building or your home, and one you can't, okay,
and that changes everything. And just like a battery, I'm
talking to you on a phone that has a lithium
ion battery and it's the same technology that Tesla puts,
you know, Elon puts in the in the power walls.
(05:52):
So this is solid state technology, and it's again technology
that's getting cheaper and better, and we need to embrace it.
Just like electric vehicles I heard you talking about. You know,
will it replace the internal combustion engine or not? I
don't know. But what I do know is is that
the Tesla I drive is essentially a big iPhone on wheels.
The way to think about it, there's not much to
(06:14):
it in terms of cost structure. So we're seeing this
cost structure come down. And what we want to do
is and I want to think an issue with something
you said Houston being the energy capital of the country.
Now I'm going to say it's the energy capital of
the world. And to do that, we must embrace everything.
We must embrace oil, we must embrace natural gas, we
(06:35):
must embrace. Yes, advancement in nuclear technology, we can get there.
But solar and software and storage batteries of all types,
we need to embrace all that because we're going to
need all of it. It's not just us, but it's
the entire world. And so when you look at solar
and storage, whether it's in front of the meter, which
means by the utilities and the big power lines or
(06:57):
on your house, which we call behind the meter, it
is providing local power that a gas plant, a combined
cycle gas plant, one at scale, can't do. Now my
personal opinion, a combined cycle gas plant can do a
whole lot better job, even at these prices where gas
plants have gone to over the last three years, than
(07:18):
a solar farm. Okay, And so I think that the
point here is is that all this has a place
in the mix. And what I've said over and over
for over a decade is if you had to generalize
it and say, what does the future look like? I
think the future looks like centralized gas and decentralized solar
and batteries, because that makes the grid, whatever the grid
(07:40):
is in the local area in this case Urkot in
Texas we're talking about, look more like the Internet, where
you have instead of just one way Soviet style command
control powers going down in place and you just have
loads at the endpoints of the system. Now you've got
all these small generators and big generators, you know, think
data centers, and think the iPhone that I'm talking to
you on, and it's all going in two directions. It's
(08:02):
a network and that's what's exciting about what we see
as the future. And so when you strip away to
politics here and just look at this, it's say this
makes sense. This makes sense together, it's not one of
the others together. And I'll make this point about Texas
in particular Governor Abbott and the governor's perform Governor Perry
(08:22):
and Governor Bush. I'll be very proud yet again, Texas
is showing not just the country but the world and
having leadership about having capitalism in the power markets. And
what I mean by that is what we don't realize
often as folks from Houston and Dallas, is that we're
unique in the entire country. We're we're even unique to
(08:44):
the folks that live in Austin and San Antoni, and
that we have steparated the customer facing so think you know,
rely on energy Champions and so forth, from the actual
polls and wires, which is center point, from the actual generation,
which is you know, think NRG, Calpine and Constellation and
so forth. And that gives us a competitive marketplace that
(09:07):
embraces new technologies and lets them say, okay, let consumers
choose what they want. If they want panels on their home,
they can get panels in their home. They want to
drive an EV, they can drive an EV. If they don't,
that's fine too. We are leading the country on that.
And I really say that the biggest thing that we
have going for again Texas is leading, as Governor Avans
should be very proud, is is that we're showing the
(09:29):
way about how to solve the power problem that we
are now talking about with almost on a daily basis
and in common conversation. The only way forward is to
open it up, get consumer's choice and embrace capitalism.
Speaker 1 (09:44):
John, you talked about the Texas approach and things we've done. Well,
I want to get a little more granular on what
you said, because the devil's in the details here. You said,
if folks want to drive an EV, well, the Biden
administration gave us seven five hundred dollars tax credit if
you bought an EV. That is an alter that's altering
(10:06):
the marketplace. Secondly, if you said if you want to
if you want solar, okay, fine, but there have been
some very aggressive tax credits on solar and in fact,
the solar folks who send out these blast spam emails
the number one thing they push is not great energy,
stable energy, sustainable energy. It's tax credit, tax credit, tax credit.
(10:27):
So to me, when you are leading with tax credit
as your as what you're going with, it looks like
the Trump administration is going to pull away out of
the budget out of this this the one big bill,
the ev tax credit. But you're not just saying everyone
can choose. You are attempting to guide the consumer's choice
with a subsidy.
Speaker 2 (10:49):
Well, that that's a fact. Now what's also a fact is,
again out of Houston Dallas, the rest of the country
operates the power industry or power industry as a Soviet
stylesist them and so that is massively subsidized as well. Okay,
and so what my view is drain this one, you know,
deregulations of you know, a four letter word. I understand that.
(11:11):
But you can call it consumer choice updating regulate the
regulatory landscape and the rules that govern the US power
industry to make it look like more like Europe. I mean,
for god's sake, I hate to say this, but you know,
the French are more capitalistic in their power industry than
we are outside Houston Dallas. And that's got to change,
and so when you embrace that and you take out
the subsidy that is the Soviet style system in power,
(11:34):
then I think we need to take a harder look
at all these credits and so forth and just and
get rid of them. And that's that seems to me
like a fair trade. If we can get everything on
a level playing field, then let the market work. Now
the separate question is mentioned earlier. How do we price carbon?
If we want to ration it, we want to tax it,
how do we do that? I personally don't like the
(11:56):
way that this country is alighted on tax credits and
subsidies to do that. I like a cap and trade
system and so forth, But that's a secondary question.
Speaker 1 (12:07):
Hold with me. John Berger is our guest.
Speaker 2 (12:09):
More coming up, Michael Berry.
Speaker 1 (12:20):
Policy and practice should not be run by the government.
It should be within constraints regulated by the government. And
there are some places where you need regulation. I mean,
most everybody understands you want to give some sort of guardrails.
Questions where would those guardrails be. John Berger is our guest.
(12:41):
He's been a policy advisor to the FERK, but he's
also been on the capitalist side, the private sector side
of how you make money, and it's important to understand
that it's the guys who are trying to make money
who are going to drive policy and who are going
to drive energy in practice as it should be in
(13:02):
every industry. John Berger mentioned a moment ago that deregulation
is a four letter word. It's a nasty thing, is
a bad thing, it's a bad reputation. And I will
give you why. I think that is being the headquartered
town of Enron and having had a lot of friends
that worked at Enron, and many of you probably did
(13:22):
as well, and friends that did nothing wrong. They were
part of a company that was doing some things wrong
and doing some things very right. Some really smart. They
really were the smartest guys in the room. I do
believe that they just had some ethical lapses. There was
a deregulation of the energy market in California, and I
think this is, more than anything else, what makes people
(13:45):
hate deregulation. So as this fire, this wildfire burned in California,
just as we saw recently in Palisades, there was audio
that later was turned over to regulators of energy traders
and they say, burn, baby, burn, that's a beautiful thing.
Listen to this.
Speaker 2 (14:07):
If you d forty five to one hundred, burn a
baby burn, that's a beautiful thing.
Speaker 1 (14:17):
So this was reducing output, driving up prices, and Run
was getting rich off of it. So the audio files
that were handed over to regulators letter said he just
f's California. One in Run employee says that he steals
money from California to the tune of about a million.
(14:38):
That's a million a day. Will you rephrase that? Asks
a second employee. Okay, he he arbitrages the California market
to the tune of a million bucks or two a day,
So it's pretty nasty. The Inrun worker is heard in
the tape saying if you took down the steamer, how
(14:59):
long would it take to get it back up? Oh,
it's not something you want to just be turning off
and on every hour. Let's put it that way. Well,
why don't you just go ahead and shut her down?
Well this was later used as by utility regulators as
they were manipulating the market. It looks bad, and one
(15:22):
of the employees at Enron is caught on tape saying
they're effing taking all the money back from you guys,
all the money you guys stole from those poor grandmothers
in California. Response, Yeah, Grandma Millie Man, Now she wants
her EF and money back for all the power you've
charged right up, jammed right up her ass for efing
(15:44):
two hundred and fifty dollars a megawatte hour. It's bad.
It's very bad. In fact, the RUN lawyer who made
the submission made the statement that this doesn't prove anything
other than the fact that quote people at RUN sometimes
talked like Barnica, Bill the sailor what a line. John Berger,
as our guest, how much did that particular incident that
(16:08):
was seared into the nation's mind because Enron became the
picture of grotesque greed affect our ability to have a
deregulated within within reason energy market.
Speaker 2 (16:23):
Well, I think people think about that, and Michael, you know,
quite a bit. But I'm gonna take a different tact
on that completely and say that that's not the reason
deregulation failed. There was a big trend in deregulation across
the economy, trucking, airlines, gas, natural gas, a lot of
different areas started in the late seventies and really took
(16:44):
hold in the eighties and finished up in the nineties,
and power was a part of that deregulation movement. Okay,
the problem is unlike was take telecommunications, fantastic analogy and
example you had in the nineteen nineties. We you know,
I'm going to date myself here, but remember the formation
of the Internet and cellular technology was just coming to
(17:06):
the four for average person, and yet fiber optics. So
the point is you had a lot of new technologies,
distributed technologies. When you look at the Internet and cellular capability, telephany,
and and you look at power, what did you have Nothing?
There was no technology change. And so when you look
at the big failures in the case of the power industry,
(17:27):
it wasn't just in RN We had a lot of
other bankruptcies too around town. It was you look at
the telecom side, there were no you know, there were
scandals there. Remember WorldCom moobile crossing. Again, I'm dating myself,
But why didn't that stop telecommunication deregulating? Why didn't it?
I mean those are certainly in some cases more manipulated
(17:49):
and so forth than in run supposedly. So the reason
was the technology won and we didn't have technology changes
in power. We just got ahead of ourselves. We've got policy,
got ahead of the technology. Well, now we've got the
other the opposite situation. We've got solar, it's cheap, we've
got batteries, we've got software. We've advanced solid state technologies
(18:12):
like silicon based chips and software and batteries. Right, we
didn't even have lithium ion back then. It was in
very small quantities. We had it very expensive. But now
we have all this. Now we're behind on the regulatory side.
Now we need to open up the market and allow
these technologies to do things that maybe the vast majority
(18:33):
of us can't think about doing, creating new business models
at lower cost for consumers that we couldn't do. This
is why capitalism works and government does not. You don't
turn an industry over to a government. I don't care
what industry it is, and power is not immune. It's
not different. It is an industry that ought to be driven,
as you said, by for profit companies with rules with guardrails.
(18:58):
So we've got to update the regulation. We got to
make sure that people are protected with distributed technologies like solar.
Now you talked about going door to door. We need
to update these regulatory structures so that consumers are protected,
but we've got to do the work and then we've
got to get out of the way and let the
market do the work. And so when you look at
the difference here is heeblic communications had the technologies back
(19:20):
in the nineties. Power didn't, and now power has the technologies,
and I think that would be a world of difference.
Imagine you have your own power plant in your house,
whether it's your car or a solar or batteries or
a generator on your home, and now you can shut
that power off from the grid and just use your
own so you don't get jammed with bills. That is
(19:41):
the beauty of the market that we have here in
Houston and Dallas, and the rest of the country out
of take note and do like what Texas has done.
Speaker 1 (19:49):
I do think there has been a great deal of
resentment at the consumer level that the ev folks, the
solar folks, and I know you don't want to be
lumped in with them, wind folks, the alternative energy folks
that when they came in and tried to penetrate the
market and first really got a lot of political influence,
(20:12):
especially during the Obama administration, there was this idea that
you had to trash the carbon based technologies that had
been with us for a long time, and you know,
you sort of say down with coal and up with electric.
I don't think you can have one without the other.
And I think there were a lot of people who
(20:32):
resented that, whether that be the coal industry or coal miners,
or the consumer who had his car turned off during
the Obama administration every time he stops at a red light.
I think those sorts of things really pissed people off
and affected how people think about these sorts of John
Burger's our guests, coming up of all the issues that
(20:55):
get the least public attention in the political realm, how
much regular should there be or not, deregulation over regulation
or not deregulation over regulation, guiding technology here, or they're
even allowing innovation or subsidizing innovation, How the consumer choices
(21:18):
will be made in the economics of all of that.
Subsidies certainly make a difference, whether they be on the
front end of the back end. John Berger is our guest.
He spent a career in this field, most recently at Sonova. John,
I got an email, let me see if I can
find it. Again. Let me ask you a question while
(21:41):
I'm finding this email. Can you skate backwards? Did you
have a roller skate as a kid? Found it?
Speaker 2 (21:49):
I was never very good at it.
Speaker 1 (21:51):
I couldn't. I couldn't skate backwards. My brother could bothers
me to this day. All right, Roger writes, this energy
fella today was earn it, but kind of a zealot.
I had wanted to ask him about brownouts that Texas
has been firting with these past few years, specifically due
to over reliance on wind energy. How producing solar panels
(22:12):
and batteries and wind turbines hurts the environment during mining, production,
disposal nuclear natural gas. We will never run out, and
they're clean and reliable. Relying on these sources is not
Soviet style. It works in no brownouts. Your response, John burder.
Speaker 2 (22:29):
I comment on the Soviet style with the regulatory structure
of the power industry and was not specific at whatsoever
to fuel type or technology generally.
Speaker 1 (22:37):
Would you fight this guy?
Speaker 2 (22:41):
Well, I don't know. If he's bigger than me, I
may not.
Speaker 1 (22:44):
It's like behind door two. If the process is right,
you don't know. If it's showcase showdown, you don't know
what you're.
Speaker 2 (22:49):
Going to get. Yeah, No, I prefer to talk to
things out to really make an understanding rather than fight. Yeah. Look,
I think that there's some good points here that you
made right before the commercial break, which was, you know,
people are upset about being forced into certain things such
as you know, maybe certain technologies and transportation and so
(23:12):
forth in state like California. And I sympathize with that,
I really do. And so again my position is is that,
you know, if there's always pros and cons to everything,
I mean, I don't think natural gas and oil is evil.
I certainly don't. I think that, Yeah, there's some problems,
but it's it's also something that when you look at
(23:32):
natural gas, it's it's cleaner than coal. That's a fact,
right in any way you look at it. So that's
a positive. And and yeah, there's going to be some
chemicals that you use to make batteries and solar panels
and such, and those can be you know, toxic and
how do you manage those quite effectively? And look at
permitting you're running the transmission line, or building the solar farm,
(23:55):
or building the natural gas plant, those all have the
same issues where we just I you know, are you know,
just wrapped around ourselves, and we can't get anything done
no matter what it is. And so there's there's about
how do you level the playing field and then let
the market work. That's my point. And if he wants
to buy all the natural gas power, my god, I
(24:16):
think you ought to be able to do that, and
I fully support that. I think solar is cheaper. I
can I can point to that and batteries and and
that combination is really reliable. But I also would say that,
you know, I use natural gas as a good portion
of my energy system, and I'm not bashful about that,
and I'm not afraid of that, and I'm not ashamed
of it. And so it's all it's all the above
(24:36):
that the market works. For instance, let's look at this
reconciliation field, the tax credits, whether you want them to
go to zero or you want to phase out, which
is probably more of what the businesses want, like exon
and so forth. Is like, we need to have policy stability.
That's what businesses want. So that's what we need to
look towards. So how do what do you do with
those tax credits? But make it a level playing field,
(24:57):
for God's sakes, and the proposal in the House does
not do that. You know, what's what really calls me
about that is the credits indirectly and directly are structured
to go to the monopolies. Those aren't for profit companies,
those are in many cases literally government, the city, the
city governments, the federal government with TVA and so forth,
(25:18):
and so the federal and these government entities, these monopolies
get the tax credits that the homeowners pay for, and
the homeowners don't get a task credit. That's not right,
that's not American, that's not a little playing field. That's
tilting the field more to the Soviet style participants in
that industry. So that's you know, my arguments about how
(25:38):
do you get out of the way and let the
consumer make the choices and let the market work.
Speaker 1 (25:45):
I think that's the real question, isn't it the extent
to which the consumer is driving? You know? I am
a big believer in free market economics, going back to
the simplest but maybe perhaps most profile own economist on
the subject being Adam Smith, but from Freedman to soul
(26:07):
on On through a continuous line, the idea that the
consumer will make the best decision because they will review
it long before yelp, and they will buy what's good
and reject what's bad, which brings me if you could
in a minute or less, because I'm short on time.
Why are you down on nuclear? John Berger is our guest.
Speaker 2 (26:28):
I'm down on nuclear because it's the most subsidized thing
that we have in power generation period, not even close.
And when you look at why is that is you
can say that there is a crazy fear of a
nuclear meltdown, and when you look at the science, I'm
an engineer right from texting them, graduated texting them, grew
up there and Brian.
Speaker 1 (26:48):
I notice you don't mention the Harvard because that would
be a black mark against you. A good move.
Speaker 2 (26:55):
Yes, yeah, I know what to emphasize here, but I
will say this, I don't go to the Harvard football games.
To go to and in football games, so hopefully we're
going to do well this year. But you know, when
you look at nuclear, the problem with nuclear is is
that while it's an irrational fear, and you look at
it from an engineering perspective, is my point. I totally
(27:18):
agree with that. The science is pretty clear, the math
is pretty clear on that, and I think You've made
that point on an earlier show weeks ago. But the
problem is is that that's not what the market perceives, and
you can't get insurance from a private sector. There's no
company on this earth, including Apple, that can afford that insurance,
and so the government has to do it. And there's
(27:38):
no place in this country that the citizens that live
in that state want that particular piece of property to
not be used by mankind for ten thousand years as
a waste disposal site. This is why Yucka Mountain decades later,
still is in operational for nuclear waste. So there's problems
(27:59):
here that we're not solving, that we're not thinking about.
And it's very costly. I mean, just look at the
latest nuclear power plant that the selling the company did
and they're always like, yeah, but we'll you know, we
just get cut from regulations. We'll do a better job
next time, and then the next time and the next time.
And it's it's South Texas back in the eighties, spark
the you know, the big part of power to the regulation.
Speaker 1 (28:20):
Because Johnathan, I've got a question a minute, right. I
wanted to get to this because a lot of people
ask I'm gonna let you take it to the break
and thank you for being our guests. You've got till
the end of this of the segments about a minute.
How do you deal with battery disposal? You talked a
lot about batteries. It's a big issue.
Speaker 2 (28:37):
Recycle. That material can be recycled, and that's part of it,
and that should be part of the regulation with batteries.
Speaker 1 (28:44):
John Berger, thank you.
Speaker 2 (28:45):
And that's fixable.
Speaker 1 (28:47):
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(29:56):
we take all the credit for ourselves. God bless the
memory of Rush Limbaugh. Long live Elvis, be a simple
man like Leonard Skinnard told you, and God bless America. Finally,
if you know a veteran suffering from PTSD, call Camp
Hope at eight seven seven seven one seven PTSD and
(30:21):
a combat veteran will answer the phone to provide free counseling.
The Michael Barry Show. But I do think it's important
to hear from folks with different perspectives, lots of experience,
who are well respected in their field. John Berger is
one of those folks. He came highly recommended from a
from a number of folks. He co founded Conentango Capital Management,
(00:21):
a venture fund which focused on early stage energy technologies,
and everything John Berger has worked on is things that
I pooh poo all day long. And I think it's
only fair to talk to folks and ask why are
you so high on solar? Why are you so high
on renewables, and just have him share his perspective. John
Burger is our guest. Welcome, Thanks Michael.
Speaker 2 (00:43):
Great to be here.
Speaker 1 (00:45):
That was kind of a backhanded introduction. I don't know
if you caught all that. I don't want to deny that.
And the reason was I didn't want you to get
all fed I told you this the first time I
met you. I didn't want you to get all fired
up over solar and me sit here going hm hmm,
and people at home go, you hate soldier, Michael, Why
are you lying?
Speaker 2 (01:01):
All right?
Speaker 1 (01:02):
So you were recommended to me as a guy who
has forgotten more about energy overall than most people will
ever know. I mean, I suppose we could put mister
Simmons into that category or rich Kinder. But let's start
with something that everyone cares about, and that is the grid.
You've been an advisor to FIRK, the Federal Energy Regulation
(01:23):
Regulatory Committee, You've been around this a long time. You've
looked at alternate ways to monetize alternate energy sources. Where
are we on the Texas grid right now? Because my
fear as a Republican is going this is going to
bite Republicans on the rear and lead to a switch
and power in the state. But where are we in
grid bandwidth now? And where do we need to be?
Speaker 2 (01:45):
Well, you know, we had a trying summer in twenty
twenty three and then last year and twenty twenty four
is actually pretty benign, really benign maybe from a power
plant producer's perspective, to benign in terms of the cash
flow that would go to these plants. And so you know,
why is it that we've been able to dodge some
of these bullets as a demand from you know, data
(02:08):
centers and restoring and energy terminals and a bunch of
you know, just economic growth why have we been able
to dodge them these bullets And the answer is surprising,
is you know, solar in batteries, batteries in particular, I
think we're over to twelve gigawatt hours now and climbing
higher in storage. And that's been key and instrumental between
(02:28):
solar and storage to really solve problems, say for instance,
in last summer and as a great example of that
in August. So when you look at these technologies and
talk about them, look at them as technologies. You know,
I always say a solar panel never voted for either
a Democrat or a Republican, and it's just technology, and
(02:48):
that's what we need to be looking at, as well
as looking at and embracing our history with all the
fuels that I think are going to be needed for
a long time, specifically natural gas, and then looking ahead
to new technologies. Like you're a fan of Michael with nuclear,
I'm less enthusiastic, So I'll put that up there. Much
less enthusiastic about nuclear. I think it's fine to work ahead,
(03:09):
but we've got to understand that they're the problems of
cost and planning and getting these plants online has not
been solved yet, and those are really big problems. So
it's something.
Speaker 1 (03:22):
John Berger is our guest. You might have known him
from Sonova or a number of other energy plays he's
been the leader of over the years. Coming up, it's
the excitement of O Sean the Michael Barry Show. Everything
you need and most everything you want. John Berger is
our guest. He is a committed energy buff in the
(03:43):
monetization and policy side of how we power things, a
subject I find of great interest because you know, we
can talk a lot about political issues, but energy is
probably the greatest issue we spend the least amount of
time on, and we I think of it only in
terms of what we pay for gas at the pump,
But it's so much more than that. It's so much
(04:05):
more than just what we pay in our electric bill.
Now start adding what you pay for gas, your electric
bill at your office, your company's electric bill, manufacturing, the
cost of airlines, the cost of a ticket to get
here and there, the cost of heating and cooling your home.
All of these things affect your quality of life in
(04:29):
a massive, massive way. So, John, we were talking about
the electric grid. You've been very involved with renewables. I
am less bullish on renewables, but make the pitch, give
me the two to three minutes on why you think
renewables are important and the sort of standard criticism you
(04:50):
get of prioritizing those, and how you would defend that.
Speaker 2 (04:56):
Certainly. So I think first and foremost, let's set aside
the pricing of carbon. You know that that is a
you know, gluten. We can get into that argument about
whether it is or isn't and whether you know we
should or how we should ration carbon or not. And
so let's set that aside. Let's just look at these
uh solar, By the way, solar and wind have very
(05:18):
little uncommon I just want to make that point. One's
rotating machinery, one solid state.
Speaker 1 (05:23):
No, they had a lot in common. You are right,
you are right, grant you that, you're grant you.
Speaker 2 (05:30):
But I just want to make that point because that
that that that has a material difference. And let me
let me make this. One you can put on your
office building or your home, and one you can't, okay,
and that changes everything. And just like a battery, I'm
talking to you on a phone that has a lithium
ion battery and it's the same technology that Tesla puts,
you know, Elon puts in the in the power walls.
(05:52):
So this is solid state technology, and it's again technology
that's getting cheaper and better, and we need to embrace it.
Just like electric vehicles I heard you talking about. You know,
will it replace the internal combustion engine or not? I
don't know. But what I do know is is that
the Tesla I drive is essentially a big iPhone on wheels.
The way to think about it, there's not much to
(06:14):
it in terms of cost structure. So we're seeing this
cost structure come down. And what we want to do
is and I want to think an issue with something
you said Houston being the energy capital of the country.
Now I'm going to say it's the energy capital of
the world. And to do that, we must embrace everything.
We must embrace oil, we must embrace natural gas, we
(06:35):
must embrace. Yes, advancement in nuclear technology, we can get there.
But solar and software and storage batteries of all types,
we need to embrace all that because we're going to
need all of it. It's not just us, but it's
the entire world. And so when you look at solar
and storage, whether it's in front of the meter, which
means by the utilities and the big power lines or
(06:57):
on your house, which we call behind the meter, it
is providing local power that a gas plant, a combined
cycle gas plant, one at scale, can't do. Now my
personal opinion, a combined cycle gas plant can do a
whole lot better job, even at these prices where gas
plants have gone to over the last three years, than
(07:18):
a solar farm. Okay, And so I think that the
point here is is that all this has a place
in the mix. And what I've said over and over
for over a decade is if you had to generalize
it and say, what does the future look like? I
think the future looks like centralized gas and decentralized solar
and batteries, because that makes the grid, whatever the grid
(07:40):
is in the local area in this case Urkot in
Texas we're talking about, look more like the Internet, where
you have instead of just one way Soviet style command
control powers going down in place and you just have
loads at the endpoints of the system. Now you've got
all these small generators and big generators, you know, think
data centers, and think the iPhone that I'm talking to
you on, and it's all going in two directions. It's
(08:02):
a network and that's what's exciting about what we see
as the future. And so when you strip away to
politics here and just look at this, it's say this
makes sense. This makes sense together, it's not one of
the others together. And I'll make this point about Texas
in particular Governor Abbott and the governor's perform Governor Perry
(08:22):
and Governor Bush. I'll be very proud yet again, Texas
is showing not just the country but the world and
having leadership about having capitalism in the power markets. And
what I mean by that is what we don't realize
often as folks from Houston and Dallas, is that we're
unique in the entire country. We're we're even unique to
(08:44):
the folks that live in Austin and San Antoni, and
that we have steparated the customer facing so think you know,
rely on energy Champions and so forth, from the actual
polls and wires, which is center point, from the actual generation,
which is you know, think NRG, Calpine and Constellation and
so forth. And that gives us a competitive marketplace that
(09:07):
embraces new technologies and lets them say, okay, let consumers
choose what they want. If they want panels on their home,
they can get panels in their home. They want to
drive an EV, they can drive an EV. If they don't,
that's fine too. We are leading the country on that.
And I really say that the biggest thing that we
have going for again Texas is leading, as Governor Avans
should be very proud, is is that we're showing the
(09:29):
way about how to solve the power problem that we
are now talking about with almost on a daily basis
and in common conversation. The only way forward is to
open it up, get consumer's choice and embrace capitalism.
Speaker 1 (09:44):
John, you talked about the Texas approach and things we've done. Well,
I want to get a little more granular on what
you said, because the devil's in the details here. You said,
if folks want to drive an EV, well, the Biden
administration gave us seven five hundred dollars tax credit if
you bought an EV. That is an alter that's altering
(10:06):
the marketplace. Secondly, if you said if you want to
if you want solar, okay, fine, but there have been
some very aggressive tax credits on solar and in fact,
the solar folks who send out these blast spam emails
the number one thing they push is not great energy,
stable energy, sustainable energy. It's tax credit, tax credit, tax credit.
(10:27):
So to me, when you are leading with tax credit
as your as what you're going with, it looks like
the Trump administration is going to pull away out of
the budget out of this this the one big bill,
the ev tax credit. But you're not just saying everyone
can choose. You are attempting to guide the consumer's choice
with a subsidy.
Speaker 2 (10:49):
Well, that that's a fact. Now what's also a fact is,
again out of Houston Dallas, the rest of the country
operates the power industry or power industry as a Soviet
stylesist them and so that is massively subsidized as well. Okay,
and so what my view is drain this one, you know,
deregulations of you know, a four letter word. I understand that.
(11:11):
But you can call it consumer choice updating regulate the
regulatory landscape and the rules that govern the US power
industry to make it look like more like Europe. I mean,
for god's sake, I hate to say this, but you know,
the French are more capitalistic in their power industry than
we are outside Houston Dallas. And that's got to change,
and so when you embrace that and you take out
the subsidy that is the Soviet style system in power,
(11:34):
then I think we need to take a harder look
at all these credits and so forth and just and
get rid of them. And that's that seems to me
like a fair trade. If we can get everything on
a level playing field, then let the market work. Now
the separate question is mentioned earlier. How do we price carbon?
If we want to ration it, we want to tax it,
how do we do that? I personally don't like the
(11:56):
way that this country is alighted on tax credits and
subsidies to do that. I like a cap and trade
system and so forth, But that's a secondary question.
Speaker 1 (12:07):
Hold with me. John Berger is our guest.
Speaker 2 (12:09):
More coming up, Michael Berry.
Speaker 1 (12:20):
Policy and practice should not be run by the government.
It should be within constraints regulated by the government. And
there are some places where you need regulation. I mean,
most everybody understands you want to give some sort of guardrails.
Questions where would those guardrails be. John Berger is our guest.
(12:41):
He's been a policy advisor to the FERK, but he's
also been on the capitalist side, the private sector side
of how you make money, and it's important to understand
that it's the guys who are trying to make money
who are going to drive policy and who are going
to drive energy in practice as it should be in
(13:02):
every industry. John Berger mentioned a moment ago that deregulation
is a four letter word. It's a nasty thing, is
a bad thing, it's a bad reputation. And I will
give you why. I think that is being the headquartered
town of Enron and having had a lot of friends
that worked at Enron, and many of you probably did
(13:22):
as well, and friends that did nothing wrong. They were
part of a company that was doing some things wrong
and doing some things very right. Some really smart. They
really were the smartest guys in the room. I do
believe that they just had some ethical lapses. There was
a deregulation of the energy market in California, and I
think this is, more than anything else, what makes people
(13:45):
hate deregulation. So as this fire, this wildfire burned in California,
just as we saw recently in Palisades, there was audio
that later was turned over to regulators of energy traders
and they say, burn, baby, burn, that's a beautiful thing.
Listen to this.
Speaker 2 (14:07):
If you d forty five to one hundred, burn a
baby burn, that's a beautiful thing.
Speaker 1 (14:17):
So this was reducing output, driving up prices, and Run
was getting rich off of it. So the audio files
that were handed over to regulators letter said he just
f's California. One in Run employee says that he steals
money from California to the tune of about a million.
(14:38):
That's a million a day. Will you rephrase that? Asks
a second employee. Okay, he he arbitrages the California market
to the tune of a million bucks or two a day,
So it's pretty nasty. The Inrun worker is heard in
the tape saying if you took down the steamer, how
(14:59):
long would it take to get it back up? Oh,
it's not something you want to just be turning off
and on every hour. Let's put it that way. Well,
why don't you just go ahead and shut her down?
Well this was later used as by utility regulators as
they were manipulating the market. It looks bad, and one
(15:22):
of the employees at Enron is caught on tape saying
they're effing taking all the money back from you guys,
all the money you guys stole from those poor grandmothers
in California. Response, Yeah, Grandma Millie Man, Now she wants
her EF and money back for all the power you've
charged right up, jammed right up her ass for efing
(15:44):
two hundred and fifty dollars a megawatte hour. It's bad.
It's very bad. In fact, the RUN lawyer who made
the submission made the statement that this doesn't prove anything
other than the fact that quote people at RUN sometimes
talked like Barnica, Bill the sailor what a line. John Berger,
as our guest, how much did that particular incident that
(16:08):
was seared into the nation's mind because Enron became the
picture of grotesque greed affect our ability to have a
deregulated within within reason energy market.
Speaker 2 (16:23):
Well, I think people think about that, and Michael, you know,
quite a bit. But I'm gonna take a different tact
on that completely and say that that's not the reason
deregulation failed. There was a big trend in deregulation across
the economy, trucking, airlines, gas, natural gas, a lot of
different areas started in the late seventies and really took
(16:44):
hold in the eighties and finished up in the nineties,
and power was a part of that deregulation movement. Okay,
the problem is unlike was take telecommunications, fantastic analogy and
example you had in the nineteen nineties. We you know,
I'm going to date myself here, but remember the formation
of the Internet and cellular technology was just coming to
(17:06):
the four for average person, and yet fiber optics. So
the point is you had a lot of new technologies,
distributed technologies. When you look at the Internet and cellular capability, telephany,
and and you look at power, what did you have Nothing?
There was no technology change. And so when you look
at the big failures in the case of the power industry,
(17:27):
it wasn't just in RN We had a lot of
other bankruptcies too around town. It was you look at
the telecom side, there were no you know, there were
scandals there. Remember WorldCom moobile crossing. Again, I'm dating myself,
But why didn't that stop telecommunication deregulating? Why didn't it?
I mean those are certainly in some cases more manipulated
(17:49):
and so forth than in run supposedly. So the reason
was the technology won and we didn't have technology changes
in power. We just got ahead of ourselves. We've got policy,
got ahead of the technology. Well, now we've got the
other the opposite situation. We've got solar, it's cheap, we've
got batteries, we've got software. We've advanced solid state technologies
(18:12):
like silicon based chips and software and batteries. Right, we
didn't even have lithium ion back then. It was in
very small quantities. We had it very expensive. But now
we have all this. Now we're behind on the regulatory side.
Now we need to open up the market and allow
these technologies to do things that maybe the vast majority
(18:33):
of us can't think about doing, creating new business models
at lower cost for consumers that we couldn't do. This
is why capitalism works and government does not. You don't
turn an industry over to a government. I don't care
what industry it is, and power is not immune. It's
not different. It is an industry that ought to be driven,
as you said, by for profit companies with rules with guardrails.
(18:58):
So we've got to update the regulation. We got to
make sure that people are protected with distributed technologies like solar.
Now you talked about going door to door. We need
to update these regulatory structures so that consumers are protected,
but we've got to do the work and then we've
got to get out of the way and let the
market do the work. And so when you look at
the difference here is heeblic communications had the technologies back
(19:20):
in the nineties. Power didn't, and now power has the technologies,
and I think that would be a world of difference.
Imagine you have your own power plant in your house,
whether it's your car or a solar or batteries or
a generator on your home, and now you can shut
that power off from the grid and just use your
own so you don't get jammed with bills. That is
(19:41):
the beauty of the market that we have here in
Houston and Dallas, and the rest of the country out
of take note and do like what Texas has done.
Speaker 1 (19:49):
I do think there has been a great deal of
resentment at the consumer level that the ev folks, the
solar folks, and I know you don't want to be
lumped in with them, wind folks, the alternative energy folks
that when they came in and tried to penetrate the
market and first really got a lot of political influence,
(20:12):
especially during the Obama administration, there was this idea that
you had to trash the carbon based technologies that had
been with us for a long time, and you know,
you sort of say down with coal and up with electric.
I don't think you can have one without the other.
And I think there were a lot of people who
(20:32):
resented that, whether that be the coal industry or coal miners,
or the consumer who had his car turned off during
the Obama administration every time he stops at a red light.
I think those sorts of things really pissed people off
and affected how people think about these sorts of John
Burger's our guests, coming up of all the issues that
(20:55):
get the least public attention in the political realm, how
much regular should there be or not, deregulation over regulation
or not deregulation over regulation, guiding technology here, or they're
even allowing innovation or subsidizing innovation, How the consumer choices
(21:18):
will be made in the economics of all of that.
Subsidies certainly make a difference, whether they be on the
front end of the back end. John Berger is our guest.
He spent a career in this field, most recently at Sonova. John,
I got an email, let me see if I can
find it. Again. Let me ask you a question while
(21:41):
I'm finding this email. Can you skate backwards? Did you
have a roller skate as a kid? Found it?
Speaker 2 (21:49):
I was never very good at it.
Speaker 1 (21:51):
I couldn't. I couldn't skate backwards. My brother could bothers
me to this day. All right, Roger writes, this energy
fella today was earn it, but kind of a zealot.
I had wanted to ask him about brownouts that Texas
has been firting with these past few years, specifically due
to over reliance on wind energy. How producing solar panels
(22:12):
and batteries and wind turbines hurts the environment during mining, production,
disposal nuclear natural gas. We will never run out, and
they're clean and reliable. Relying on these sources is not
Soviet style. It works in no brownouts. Your response, John burder.
Speaker 2 (22:29):
I comment on the Soviet style with the regulatory structure
of the power industry and was not specific at whatsoever
to fuel type or technology generally.
Speaker 1 (22:37):
Would you fight this guy?
Speaker 2 (22:41):
Well, I don't know. If he's bigger than me, I
may not.
Speaker 1 (22:44):
It's like behind door two. If the process is right,
you don't know. If it's showcase showdown, you don't know
what you're.
Speaker 2 (22:49):
Going to get. Yeah, No, I prefer to talk to
things out to really make an understanding rather than fight. Yeah. Look,
I think that there's some good points here that you
made right before the commercial break, which was, you know,
people are upset about being forced into certain things such
as you know, maybe certain technologies and transportation and so
(23:12):
forth in state like California. And I sympathize with that,
I really do. And so again my position is is that,
you know, if there's always pros and cons to everything,
I mean, I don't think natural gas and oil is evil.
I certainly don't. I think that, Yeah, there's some problems,
but it's it's also something that when you look at
(23:32):
natural gas, it's it's cleaner than coal. That's a fact,
right in any way you look at it. So that's
a positive. And and yeah, there's going to be some
chemicals that you use to make batteries and solar panels
and such, and those can be you know, toxic and
how do you manage those quite effectively? And look at
permitting you're running the transmission line, or building the solar farm,
(23:55):
or building the natural gas plant, those all have the
same issues where we just I you know, are you know,
just wrapped around ourselves, and we can't get anything done
no matter what it is. And so there's there's about
how do you level the playing field and then let
the market work. That's my point. And if he wants
to buy all the natural gas power, my god, I
(24:16):
think you ought to be able to do that, and
I fully support that. I think solar is cheaper. I
can I can point to that and batteries and and
that combination is really reliable. But I also would say that,
you know, I use natural gas as a good portion
of my energy system, and I'm not bashful about that,
and I'm not afraid of that, and I'm not ashamed
of it. And so it's all it's all the above
(24:36):
that the market works. For instance, let's look at this
reconciliation field, the tax credits, whether you want them to
go to zero or you want to phase out, which
is probably more of what the businesses want, like exon
and so forth. Is like, we need to have policy stability.
That's what businesses want. So that's what we need to
look towards. So how do what do you do with
those tax credits? But make it a level playing field,
(24:57):
for God's sakes, and the proposal in the House does
not do that. You know, what's what really calls me
about that is the credits indirectly and directly are structured
to go to the monopolies. Those aren't for profit companies,
those are in many cases literally government, the city, the
city governments, the federal government with TVA and so forth,
(25:18):
and so the federal and these government entities, these monopolies
get the tax credits that the homeowners pay for, and
the homeowners don't get a task credit. That's not right,
that's not American, that's not a little playing field. That's
tilting the field more to the Soviet style participants in
that industry. So that's you know, my arguments about how
(25:38):
do you get out of the way and let the
consumer make the choices and let the market work.
Speaker 1 (25:45):
I think that's the real question, isn't it the extent
to which the consumer is driving? You know? I am
a big believer in free market economics, going back to
the simplest but maybe perhaps most profile own economist on
the subject being Adam Smith, but from Freedman to soul
(26:07):
on On through a continuous line, the idea that the
consumer will make the best decision because they will review
it long before yelp, and they will buy what's good
and reject what's bad, which brings me if you could
in a minute or less, because I'm short on time.
Why are you down on nuclear? John Berger is our guest.
Speaker 2 (26:28):
I'm down on nuclear because it's the most subsidized thing
that we have in power generation period, not even close.
And when you look at why is that is you
can say that there is a crazy fear of a
nuclear meltdown, and when you look at the science, I'm
an engineer right from texting them, graduated texting them, grew
up there and Brian.
Speaker 1 (26:48):
I notice you don't mention the Harvard because that would
be a black mark against you. A good move.
Speaker 2 (26:55):
Yes, yeah, I know what to emphasize here, but I
will say this, I don't go to the Harvard football games.
To go to and in football games, so hopefully we're
going to do well this year. But you know, when
you look at nuclear, the problem with nuclear is is
that while it's an irrational fear, and you look at
it from an engineering perspective, is my point. I totally
(27:18):
agree with that. The science is pretty clear, the math
is pretty clear on that, and I think You've made
that point on an earlier show weeks ago. But the
problem is is that that's not what the market perceives, and
you can't get insurance from a private sector. There's no
company on this earth, including Apple, that can afford that insurance,
and so the government has to do it. And there's
(27:38):
no place in this country that the citizens that live
in that state want that particular piece of property to
not be used by mankind for ten thousand years as
a waste disposal site. This is why Yucka Mountain decades later,
still is in operational for nuclear waste. So there's problems
(27:59):
here that we're not solving, that we're not thinking about.
And it's very costly. I mean, just look at the
latest nuclear power plant that the selling the company did
and they're always like, yeah, but we'll you know, we
just get cut from regulations. We'll do a better job
next time, and then the next time and the next time.
And it's it's South Texas back in the eighties, spark
the you know, the big part of power to the regulation.
Speaker 1 (28:20):
Because Johnathan, I've got a question a minute, right. I
wanted to get to this because a lot of people
ask I'm gonna let you take it to the break
and thank you for being our guests. You've got till
the end of this of the segments about a minute.
How do you deal with battery disposal? You talked a
lot about batteries. It's a big issue.
Speaker 2 (28:37):
Recycle. That material can be recycled, and that's part of it,
and that should be part of the regulation with batteries.
Speaker 1 (28:44):
John Berger, thank you.
Speaker 2 (28:45):
And that's fixable.
Speaker 1 (28:47):
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(29:08):
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is produced by Ramon Roeblis, the King of Ding. Executive
producer is Chad Knakanishi. Jim Mudd is the creative director.
(29:33):
Voices Jingles, Tomfoolery and Shenanigans are provided by Chance McLean.
Director of Research is Sandy Peterson. Emily Bull is our
assistant listener and superfan contributions are appreciated and often incorporated
into our production. Where possible, we give credit, where not,
(29:56):
we take all the credit for ourselves. God bless the
memory of Rush Limbaugh. Long live Elvis, be a simple
man like Leonard Skinnard told you, and God bless America. Finally,
if you know a veteran suffering from PTSD, call Camp
Hope at eight seven seven seven one seven PTSD and
(30:21):
a combat veteran will answer the phone to provide free counseling.
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