blackouts. the future of us energy policy and lessons learned from the winter 2021 texas power outage and i know they're going to talk about the global crisis as well. i'm going to introduce the panel moderator and they will come onto the stage and she will introduce the panelists. jackie deason's post of the jackie daily show which educates entertains and engages america on all things energy. you really should check out her podcast. wherever you find your podcast you will find the jackie daily show. it airs sundays on the blaze.com radio and on the dial in texas each saturday and as i mentioned the podcasts are weekly which you can find on i heart radio, ouwherever you get your podcast. jackie was previously a senior fellow at the public policy foundation and also served as general counsel to an engineering firm is lysing in energy, national security and environmental cleanup. she served as legal counsel on capitol hill to the chairman of the subcommittee on the constitution and former ranking committee ranking member of the commercial and administrative law subcommittee advising on the oversight of federal agencies . jackie studied economics, spanish and world history marshall university. oxford university university of zaragoza in spain. she is an alumna of vanderbilt university law school where she served as president of the law school federalist society chapter. jackie hasan extensive network from sheet which she draws guests for the jackie daily show including industry leaders representing all parts of theenergy sector , government officials , journalists and political insiders often jackie will know today's most wanted yes and be able to secure the guests with a personal call and i can testify she already knew and had interviewed the speakers we have here today. jackie is from the ohio river valley the shield wednesday. she descends from a long line of energy workers including roughnecks, railroaders, coal miners and nuclear energy specialists. follow jackie at jackie daily post on twitter. let's give a warm welcome to our panel. >>. [music] >> if you'll all take seat. sit this down before i get started. all right, my honor and pleasure to introduce our guest robert bryce. behind me. >> there is. he is go producer of the documentaryjuice which aired here last night . electricity explains the world. robert is a texas state author, podcast or, old producer and public speaker with over three decades his articles have appeared in the wall street enjournal, new york times,national review, field and stream and the austin chronicle . the documentary i mentioned he produced along with tyson kohler released in mid-2020 and is not available on numerous streaming platforms. these published six books, the most recent a question of power: electricity and the wealth of nations and spent 12 yearsas a for the austin chronicle . 2006 through 2010 he was managing editor of the energy tribune at 2010 through 2019 a senior fellow at the manhattan institute. he lives in austin with his wife lauren. who is an art teacher, photographer and master potter. on this side is blue holy from continental resources, vice president of hsd. he is responsible for strategic leadership of corporate hsd and esg programs with corporate policy and regulatory initiatives and these past chairman of f the north dakota petroleum council currently serves as chair of the petroleum alliance of oklahoma, board member of domestic energy producers alliance, counsel for secure america and oklahoma city national memorial museum. i needed oklahoma and he has degrees from oklahoma state and university of. . [applause] >> i guess they'll do. good afternoon. i want to talk about what happened in texas and this is a personal story for me. my wife lauren ishere last february 15 we were blacked out for 45 hours we talked about why that happened . what i'm going to address i'd advise my slide deck a few minutes ago after hearing andrew's comments'with alex epstein and then i'm going to talk about the eu and what has happened in the eu because those cases are very important because they are so similar. okay, so i'm not going to read this slide to you. i'll let you read it. 700 people died, not all of them because of lack of electricity but i want to underscore this point. the grid came this close from a complete meltdown. bill magnus said on february 25 in the emergency board of directors meeting the gridwas about 4 and a half minutes from a completeshutdown . think for just a minute , 26 million texans plunged into darkness when it was snowing sideways and temperatures were falling and you couldn't travel. theroads were impassable . had that happened texas would have had a mass mortality event. it wouldn't have been 700 peopledied, maybe hundreds of thousands of people died . and it would have had ramifications throughout the rest of the country because texas i'm from oklahoma, i'm not yourwriting about texas . texas accounts for about 10 percent of everything in america. population, gdp but for food, fuel, transportation it was a critical state and if the system had gone black getting it restarted after going system black would have been effectively impossible not just four days perhaps four weeks . it would have caused nationwide recession. so let's be clear about the stakes here and about what almost happened because of mismanagement ofthe texas grid . okay, so the key point here, what is the key. after the disaster of all kinds of reports cannot. a lot of academics saying don't blame renewables and those silly republicans down there they're saying renewables were partly to o cost for this. yes, absolutely. 66 billion. these are screen grabs. these are screen grabs from the wind industry lobbies on website. their own numbers say a proximally 63 billion. iadded in and asked to april 20, 2021 . $56 billion n. spent on the wind and solar in the years before the blackouts. why did they spend 66 billion, because they got $22 billion in subsidies. data from bill peacock was done the analysis. what kind of other business would you get into if you had a third of the money you spent in the form of subsidies so what did that mean, you see a massive change ingeneration because of the subsidies . hello. wind energy increases by a about 20 percent. coal declined by 20 percent. net gas stays flat, solar rises a little bit. the other thing that is never mentioned and i do mean never . not in texas, not in new york times, not in these other publications but in the years before the blackouts six gigawatts, 6.2 gigawatts of coal-fired capacity was retired under pressure from the sierra club environmental groups but you don't hear that. that's not discussed because it doesn't fit thenarrative . so what's driving this? d why again did this happen? because of federal subsidies are driving the investment in her cot as well as the rest of the grid in the united states. so simple graphic, the only kind i can make. probably the holiest slide will see all they. this is congressional research service data that i imagined with bp data pointing out on a per unit of energy produced basis, i've denominated it in exit jewels, i can put in gallons of oil equivalent . roughly 1 trillion cubic feet of natural gas. if you don't know your si units you should. but the denominator is the same. the dollars per unit of energy produced basis the solar industry is getting 250 times more enteral tax than the nuclear sector . wind industry something like i haven't done the math lately but those hydrocarbon guys there cashing in when it comes to federal cash credits . the numbers don't supportthat . this is the story and we didn't hear it from professor dressler talking about the subsidies driving solar and wind. i hear it's cheaper. i can't control mygag reflex over there . okay. this is the slide that more than any other explains what happened. this is the slide that art berman created part graciously allowed me to use it . i'm going to walk over here. so what happened? this is january 30 in texas. so the wind was blowing and what happens, wind drives out natural gas it drives out cold. and that's what wind does. when wind is blowing it reducesthe amount of gas on the htsystem . but then look right here. february 15, when my lights went out. what happened? solar and wind disappeared, $66 billion on wind and solar and they went to cancun with ted cruz. gone. disappeared. went on vacation but don't blame us. it's not our fault. it's the gas guys. really the gas guys to almost 0 on january 30 they go to about 50, i don't know, 40,000 megawatts in a span of a few hours. and they're the ones to blame. it's not true. it is just not true another screen grab. exactly 6 months to the day after my lights went out. screen grab from website t. here's february 15. warns of power shortage. four months to the day. wind when we had a hot that day. in austin throughout texas. power demand is at 70,000 megawatts, about what was every 15 when they started load shedding . wind goes tozero . that's not the only one. this is just earlier last month. again, high power demand at 50,000megawatts. wind again to almost 0 . again and again. they're not required to provide power when power is geared. and therein is the rub. and doctor kessler said will just what he was saying is you have to subsidize the thermal generators to come into the market when there needed. so that the wind and solar guys can free ride and that's the right word on the thermal generators. mckenzie, their report. you don't have to believe me one of the most respected energy consultants in the world . their analysis in december, what do they say, the worst of the columns occurred during an extended wind drought. and i heard this, will just build more transitional. it will come to that. but it was over ercot for 12 days. a lot of people say there's gas, there was a lot of gas se run down. the availability of gas prior to the blackouts fell. it did because the wind wasn't blowing and what did they say as the share of wind power rises coal and gas decline managing the grid to maintain supply is important . hello. i'm not a paid consultant but i can agree with that one. but these market deficiencies are the leading contributor to making the ercot is less reliable . they're saying the market is being distorted by federal subsidies. i just showed you that slide but it gets worse.this is data from ercot's website on their additions to the ercot grid between now and the end of next year. that's nearly equal to all the existing solar in california today. the amount of combined cycle gas beingadded is effectively zero .bu these business guys are sharp . they know they can't make money at ercot, they're not th going to build a power plant that will pay back the money. they can't get lending from banks to do it. banks will say how do youmake your return on investment ? holy graph, only kind i can make we could have 72 gigawatts of wind and solar. that's more than the combined capacity of every gas-fired generation in texas. we are preparing for a disaster that's potentially even worse than the one we just narrowly avoided. so what do we know? >> .. if those insurers prevailed and it appears they might because the dallas court of appeals judge ruled that ercot doesn't have sovereign immunity. what are they? are the a state entity or no state unity? i don't think they are a state entity. if they are who's going p to pay all the property and casualty losses? the personal injury losses, , lt the legislature steps in and says we are not paying anything. this is a mess and it's going to get worse. one of the of the key point is the gas grid in electric grids have merged but they're still regulated separately. shows you the slideha about the call on gas. if --as we retired all this coal and gas was assumed over, we have told you your the battery, we're not going to pay you to be the battery that you are the battery. when you don't show up we are going to people complain about you. but the problem is not fixed, not by a long shot. professor tesla is here, too bad. if you hear i wish he was sitting in the front row. it's cheaper. okay fine. my friend lee says there are three things when you're planning new addition to the grid, three things. where are you going to put it? how are you going to connect it? how do you pay for it? he didn't have one word like so many of the academics, these spreadsheet jockeys who produced these elaborate computerelod modules. we have a computer module. okay fine. maybe you ought to lead palo alto, m.i.t. andy cal berkeley and go to small towns in iowa or maybe spend time in rural california because in rural california in shasta which just rejected a big wind project. cherokee county kansas, san bernardino county california the largest county by area in america in 2019 and large-scale renewables if this is in the state of california which has 100% 100 clean and net zero goal by 2045. vermont isis listed. bernie sandf the biggest promoters of renewables in the senate. he ran in 2016 on a platform that said we went 100% renewable. so that's great. you can't build wind turbines in vermont? can't build them in new york. and you can't build them in, california. where you're going to put it, how are you going to connect it? how are you going to pay for it, but it's not just wind. it's solar two again this oh, well, the solar is cheaper. okay, fine. ignore uighur slave labor ignore the fact that the us state department just sanctioned the import of solar panels and poly silicon from xinjiang province. where 40% of the world's poly silicon for solar was being sourced. forget that you can still call your clean energy clean energy even though you got a little slave labor in there. we'll just ignore that. where you going to put it? i just made this slide just a few minutes ago. that tough thing from nbc news. they published that march 6th. i was like, yes. thank you. a big media outlet reporting on what's really happening on the ground in america. you won't read about this in the washington post. actually. they did a pretty good story the other day about a tall grass prairie in texas. you won't read about it in npr. i wrote a piece of colette i published monday. decrying they're terrible coverage of the renewable business. you won't read about the new york times the new york times will not cover the backlash against wind and solar in the state of new york. but the problem with solar the same problem with wind needs big footprints. can all across the country people are saying we don't want your stuff. how are you going to connect it? c3 group in atlanta, i finally got some good data on. high voltage transmission how much is actually being built? that third line we're building about 1700 miles of high voltage transmission, 230 kilovolts and above since 2008. the amount of interstate that is crossing state lines is a less than that far like 250 miles. but even if we grant you that's 1700 miles a year at current rates doubling high voltage transmission to get to 90% renewable electricity will take 140 years. and yet these phds i've just had it. i've had it. oh, well, we'll do it all with wind and solar. okay, fine. oh and we're just gonna double high voltage transmission. okay. well explain it to leave slowly because i'm from tulsa. you got to go slower with blue because he's from sky tube really really slow. how you gonna build it? if you think building pipelines and putting them in the ground is hard tried doing the same thing with electrical infrastructure. that's 150 feet or 200 feet high. state of iowa has passed a law prohibiting the use of imminent domain for high voltage transmission. all across the country rural communities are saying we don't want high voltage transmission across our property our county our town. the grid we have is largely the grid we're going to have so it's not just massive amounts of high voltage transmission. it's cartoonish amounts of land. my daughter mary made this slide for me. i quite like it just because it really pops. two different two different analyzes one by david keith and lee miller at harvard from 2018 botslav schmill. who's a savant on all these issues? meeting existing electricity demand with with wind alone. that's not the objective. nobody's proposing that would require two california's worth of land. to california's, you can't even build a single wind turbine in california and yet these these people are saying oh, yeah, we'll just do it again. we'll put it out there, you know in flyover country. eastern colorado, kansas, you know those trump voters out there. we'll put it out there. really? again, my slide data. i've been collecting since 2015 more than 323 communities from coast to coast from maine to hawaii have rejected a restricted wind projects. in the last eight years. wind industry has never challenged my numbers. they want to act like this doesn't exist. the facts are the facts. w edwards deming said it right and god. we trust everyone else bring data. i'm bringing data. this is the data. all of its sourced all of it with urls you can find it on my website. robert brice.com the renewable rejection database the solar advocates the wind advocates. they don't want to talk about this doesn't fit their narrative. this is the reality. okay, so what is all this doing? it's a piece i published in in forbes a few days ago. it's good for generacs bad for america and generac's own investor presentations. i know we have some ceos from publicly traded companies. you don't publish data on your website or in your public or public reports unless you know that it's true because if you publish false information you go to the hooscow, they're not sec's not very happy about that. what is generac saying about the increasing the declining reliability of the grid? they're pointing to renewables. but it's not just generac. the north american electric reliability corporation in august published their report you can see on that top another screen grab. look at that top line changing resource. mix they said is the most important issue in terms of the decline in reliability. and what else did they say? they said the same thing that would max said. wind droughts solar droughts our grid is increasingly characterized as one that sensitive to extreme widespread would max it was 12 days. this is the north american electric reliability corporation. they're the ones who are responsible for reliability. why would they publish it? why would generac say the same thing? why would nirk say this? because it's true. wind and solar cheaper. that's great. fine. i'll make might accept that except that they're bad for the grid. they're fragilizing our most important. energy network they're fragilizing as john constable says self-poisoning the energy network that all of our other most important networks depend upon it's a dangerous dangerous trend that we're facing in the united states. what happened in europe? to reuters headline wind droughts could talk all day long about russia and ukraine and i can't believe the thuggery. i can't believe the maliciousness the outright murderousness of this guy putin. disgusting but europe drove themselves into the ditch by over investing and renewables under investing in hydrocarbons closing base load power plants and relying to heavily on imports. it's the same thing. i said in front of the senate energy and natural resources committee when i testified in november, this is the danger. not saying i have any special insight, but this has been obvious for a long time. okay, so storage. oh, yeah, right, right. so reuter says we need better storage. okay, fine. let's talk about storage. just talking about new friend rita over here. she said can you talk a little bit about battery? sure i can talk about batteries. again, texas about one tenth of everything in the united states. we generate about four petal hour petawatt hours 4,000 terawatt hours a year in the united states, texas accounts for about 400 terawatt hours. divide that by 365 days you get about 1.1 terawatt hours or 1100 gigawatt hours. a gigafactory produces about 50 gigawatt hours of batteries per year. the math is so simple i can do it. to to produce enough batteries to power, texas for one day. requires the output of a gigafactory for 22 years scale scale scale scale scale scale it's always about scale. oh wind and solar cheaper. okay, great. i heard say that about 15 times. so what is it? they spent too much on a renewables too little on hydrocarbons and nuclear. and now what are they facing? economic ruin i haven't checked the price today the latest price i checked at the other day the ttf trading hub. that's the r henry hub in holland price of gas per million btus. last time i checked 72 dollars. spot price of henry hub. today's what five? less than 5 so what's that 14 times 14 x european europeans are now being forced to pay for natural gas because they didn't drill and they bought this all renewable garbage. have to thank my friend doug sandridge. he's here. i know we talked about this quite a lot. so look at germany, they're held up as this, you know this great model to be followed. so let me give you a little preface and since the days of edison and insole and frank sprague. they've had one idea in common that they have a you create a grid and you only produce enough capacity or you only have enough machinery to meet demand. i mean if you're a farmer you have a car with you know, whatever, you know, even if you have a you know, say you have a nice ferrari or something. well, you leave it sit in the garage except for two sundays a year when you drive it. well the miles per gallon for that ferrari are pretty the cost is pretty high. but what does germany done? they've nearly doubled. they're installed generation capacity note. they didn't close their coal their coal plants and they're going back to coal in a big way. i'll talk about that in a second. they nearly doubled their installed capacity, but they didn't increase the amount of electricity. they're producing. so their capacity factor for their installed generation is declining. and making all of this even more gobsmackingly stupid. is that just a few days ago the german government announced their closing their existing nuclear plants they decided oh, we're not even going to extend the lives of our existing plants. this is after they closed three plants on december 31st. and you can't fix dumb. i mean, i you can't fix dumb. but yet that's what they're doing. after all of this even after the invasion of ukraine just the other day and the who decided the two ministries that decided they were going to close the plants the ministries that are headed by members of the green party. it's madness. swiss the iron law of electricity. i stole this idea from roger pilkey junior. he's a friend of mine. he lives in boulder. his work, i admire quite a lot. he's teachers at the university of colorado. he coined the iron law of climate. he said when forced to choose between economic growth and climate action governments will choose economic growth every time. and so i thought about this a lot and i thought i like this idea of the iron law and after being in, you know traveling around the world india ice and lebanon puerto rico. what did i see people are not going to sit in the dark. they will do whatever they have to do to get the electricity. they need this from 2012 after hurricane sandy. those red gasoline tanks. those are tesla power walls for poor people. beyond coal michael bloomberg has has given 500 million dollars place 500 million dollars to the beyond coal campaign, which is now the beyond natural gas campaign as well. oh, yeah, we're not going beyond coal. the spot price of coal and newcastle trading hub newcastle's the port in australia major trading hub globally for seaborn coal over $400 a ton met cole on the spot market in some places is selling selling for 600 dollars a ton. the iron law of electricity is alive and well and it's going to continue to be alive and well for a long time to come because people are not going to sit in the dark. this little lagniappe. i threw this in here because you know again when it comes to industrial policy in this country and we can talk about it for a long time rare earth elements. we have no industrial policy. china does and they're stealing a march on us in a big way. i know there's a reporter here from denver gazzetti said let's talk about what's you know their plans for to build the nuclear reactors up in kimmer wyoming? okay, we can talk about it. but those projects haven't even gone through the nrc approval process and i'll bet you dollars to donuts. they're going to get rejected because the nrc should be renamed the anti-nuclear regulatory commission. they're not interested in growing nuclear. and just in the last couple weeks. i wrote a piece in forums and published it just a couple days ago. that nrc with two democrats in majority now, there are two seats still open on the nrc. biden hasn't even appointed the additional two seats on the on the on the commission they rescinded. license extensions for two nuclear power plants peach bottom in pennsylvania and turkey point in florida. for serious about co2 series about climate change we have to get dead serious about nuclear and we're not to anti-nuclear net car anticarbon dioxide your pro-blackout i am anti-blackout, especially since 2 am last february 15th. okay, so what are the lessons? beware the fatal trifecta. that's meredith angwin's line. what's the fatal trifecta to over-dependence on renewables over dependence on imports and and over dependence on natural gas? now we have a lot of gas guys here. let me some natural gas. but it suggesting time fuel. what were the lessons from the ercott blackouts the plants that did the best and i showed you that before the colon nuclear plants. they had on-site fuel. so what are a lot of the power companies in the middle part of the country doing now? they're looking at on-site fuel storage. i was in wichita last summer telling the folks at the kansas power pool. they're talking about getting a bunch of wertzilla recip engines. and i would say the word still a vendor was there and the guy from kansas power pool saying well, yeah, we're gonna get we're gonna build some diesel storage and they got from where how much guys 500,000 gallons. it's a lot of diesel. yeah. it is a lot of diesel. because they know having on-site fuel is key on-site fuel is energy security. that's it. i'll stop there. thank you very much. okay. do you have any reaction to what you just heard? i know you had some thoughts about the professors observation that wind and solar were so cheap. maybe robert covered that four year. maybe have something to add. well, actually i was gonna add what he just said i think is interesting when you talk about what has happened in in our country with the regulators and i think a lot of this when we talk about so let me let me go back a little bit. i'm we're with continental resources where an oil and gas producer out of oklahoma, but we also produced in the bakken we know how to produce and very cold weather and and most most everyone in our business knows how to produce in very cold weather. the permian guys aren't just in the permian. that's just where they're located. that's where they're they're at at the time that they all know how to do this. but what is happened is you look at the margins and and from a just in time fuel you can be just in time, but it caught there's costs associated with just in time. and so what happens is we've incentivized government incentivize when in solar and you have state officials who are setting in these utility boards and saying, okay really when a utility comes to me, they're trying to get the lowest cost. electric unit to the customer and that's what they're being elected by and that's that's they take a lot of in and they should by the way, i'm not criticizing them at all. but what they have to do now is include that reliability factor because that is key and what is that cost? i'll tell you right now oklahoma is definitely seeing a cost. we're going through security ization in oklahoma. we it's a four billion dollar up to four billion dollars if you want to know what is a true cost to an oklahoma consumer for for wind and solar when we've been going for 20 almost 20 years. oklahoma is a huge where the second largest wind producer were the second largest wind producer in the country. we we're not afraid of when in fact the oil and gas industries and forever when we want to compete on a level playing field, of course, but we're not afraid of the resource. we're not afraid. we're more energy. that's a great thing for our country our state, you know, just i do need to say right robert mentioned. scott duke, oklahoma and in where that's a no-stage county by the way, they do have a ban on wind turbines in osage county by the osage tribe. it's a it was a great place, but the osage county is where the nellie johnson well was over 100 years ago. we've been producing oil and gas in oklahoma. we know how to do this most of the regulations regulations in this country are coming coming from oklahoma. we're not afraid to be regulated. we're we're drilling oil and gas right now and wells in an areas that have been explored 100 years ago. that's how much the resource they they put wells in areas where we're going horizontally and and stimulating rock and and a huge amount of resource is available for oklahoma men's. we're on a we're on a vast resource of gas. and what we've done is incentivize when and solar and not put a primary if you will a cost on that reliability and that's something that i think we're going to have to see going forward, you know one when you talk about and the wind industry is going to fight that tooth and yes and solar industry is the same they don't want to provide firm power when power is dear. sorry. no. no, i think that's exactly right. i mean, we're already seeing that we're going to the commission because really, you know, we're i work for harold ham and harold is about solutions. i promise you he's working right now. he was working yesterday. he's gonna work on monday for solutions for our country country gas prices oil prices are oil prices. high right now that we we would rather than be lower. we're working to provide more more energy to the consumer. we want we want our economy to run smoothly and we need a lot of energy to do that. we understand that. we're working right now to try to get solutions through our utility sector so that they understand we've got wind and solar being proposed in oklahoma right now. and i can promise you we're reviewing those proposals and saying how how do we have prevent this from happening again right now if you're you're on a fixed income in the state of oklahoma. your utility bills are going to go up around $5 a month. that's real cost to that's that's the cost of global warming when professor destler says, this is cheaper. i can promise you what we're going through is impacting consumers today, and that's where we don't it. it just gets lost and those are real people. i mean you talk about energy poverty energy poverty is in america. it's happening. and we talk about and i think it's right. we want to our esg story is bringing cheap reliable affordable abundant energy around the globe and i think that's something we need to be doing. but we also need to be bringing it to our people. we also need to be providing jobs create manufacturing all those things that that that energy does. we need to be doing it in our case in oklahoma north dakota and the places we operate but across the country and we're we're falling down on that. i can just fell on the securitization issue because i didn't know that oklahoma number being four billion, but rayburn county rayburn country electric co-op, one of the bigger co-ops in texas. they just finalized a securitization deal for their excess electric costs and it's to the tune of 900 million dollars. yeah, so then you have brazos electric i my first slide they declared bankruptcy for 1.8 billion. yeah, so, you know, we don't know in texas how much the total securitization costs are going to be because that's only the electric providers because the gas providers are also the bills that passed the texas legislature also allow the gas providers to secure ties their excess costs as well. so, you know this idea. oh, it's cheaper. it's well, it's cheaper until it ain't right and what we're seeing now is the where it ain't because these these utilities are having to be made whole and they don't they try to avoid rate shock for their for their rate payers. so the securitizing the debt and paying it out over 20 30 years. exactly, right exactly. we're seeing the same thing in oklahoma, and it was up to four billion it may it may it's going to be in the billions. it's going to be billions of costs to consumers in, oklahoma. that they haven't seen yet and they're going through a process so sometime in 2022 their bill is going to go up five dollars for the next 20 years. and what happens if that happens again what happens if another storm comes through and we haven't made, you know a baseline cost a baseline of production of a combined cycle plant that's part of your system. it is a insurance. it's an insurance cost. it's either two billion now, or we can have a little bit higher rates long-term that aren't free from from wind and solar or being subsidized again. we are paying those but we're just not calculating that in the rate that that we're charging consumers. so the consumer is going to pay and that's the that's the problem is but we have to put a factor on the reliability and that's got to be that's got to be a pretty high high factor. the press probably left the impression that what happened in texas was a uniquely texas problem and a one-off event. so people kept talking about unprecedented storm. there's only happens once every 50 years and once every century so they give the impression that it's behind us and we don't need to worry about it now, which i think is a really dangerous way to think about the problem. so the on the first question, is this a problem for everyone in the room and other states not just texas because our grit is self-contained which is unique and second. is this a one-off problem? or are we in fact looking at this happening again? should we expect this to happen again in texas at least? well, i mean certainly it can happen again. i mean just because it's once in a winter 100 years doesn't mean that 100 years doesn't the clock resets every year right? we had a major storm in 2011 in which firk after the storm made a lot of recommendations the regulators didn't follow through and they included some about winterization and understanding what my point about the gas grid and the electric grid merging and that's clearly the case because we've gone now well in my first book was on enron back in 20 years ago. nationally we were burning about five trillion cubic feet a year for in natural gas for power burn for the in the electric sector today. we're close to 12 trillion cubic feet per day our 12 trillion cubic feet per year. so the electric grid has become more and more dependent on gas, but the two systems are still regulated separately the two networks. and so there has to be some rationalization not just in texas, but across the country to recognize this as it's an attribute if we just look at co2, but it's a vulnerability when it comes to high demand periods. yeah, and i'll just add it. i mean i think and alex spoke to it earlier about the true cost of energy and i think that's one of the things that we really need to be paying attention to the true cost of energy if you really want to put wind and solar into the true cost of energy for gas and coal. you've got to put battery storage in that that i don't know. i understand what the professor was talking about from a grid perspective. it doesn't really work like that because you're not you're not meeting in room and go you put a gas. we'll put a solar will do, you know, it's it's a state by state perspective and and by the way those states can pass certain laws that are that impact the overall grid, so it's really a function of making sure state officials are paying paying attention to their own grid and making sure that the reliability within that body and the decision-making process has a has a has a cost a cost associated with it. let me also add one thing too. and i think and gas industry had gotten a bad rap for not necessarily working through, you know, you saw the hot the headlines of the natural gas failed during some of the during that storm and i will tell you i mean the only reason i'm here is because i 1300 direct. coworkers at continental and thousands of individuals that are employees and subcontractors. in fact, we have just a number of reference number when you talk about the oil and gas industry. we as at one company work with over 400 nearly 400 companies that are 10 people or less. so we have a lot of small contractors and i promise you those guys work their -- off 24 hours a day during that during that storm. they were out there. we we had heaters that we were bringing in from states across the across the country. i mean we this is not a lie. we had guys at lowe's buying space heaters and they because they can figure out in a piece of equipment that they keep warm and keep flowing. i mean the ingenuity that went on it's interesting in oklahoma, and i know we have some or may have some you utilities in the room and some co-ops and what has happened and what has happened in the permian. it happened in, oklahoma. is we had a utilities required to shed load and some load shedding occurred? well, what happened was the utilities didn't necessarily know where that load was and the impact that was going to happen. so if you shut a load on a compressor station that we're putting gas into it's directly impacting our ability to put gas into the line. and so that has implications. we've worked through some of those solutions. that's a communication problem, but that's one of the things it occurred you had freezing lines because because they're just shutting down electrical systems not realizing they should probably it's it's critical infrastructure. it's like a hospital because basically you're you're shutting down your system once you shut compression off, right? so that was another solution that we're we worked on there in oklahoma, and i know they've done the same thing in texas. yeah. thank you. just said one other quick thing about what your point blue was that electricity ain't hot dogs. it ain't tortillas. it's not a commodity. it's a critical service and i think one of the key problems in this whole discussion has been that. policymakers and regulators and legislators. they don't understand what the grid is and it's a it's a complex network. it's not you know, we we buy watt hours, but what we need are watts what i was it one thing. i thought desperate got right. we don't care about energy or no. it was chris. i care about energy what we want is power when we have to have that power instantaneous all the time. so that that failure to understand the grid is a complex network that cannot be allowed to fail i think is at the root of a lot of this misunderstanding about what is actually going on and what the what the regulatory response should be. yeah. that's right. so robert if urcott had shut down, why would it have taken so long to restart the audience ask? well, how long do we have? well the main load shedding our power went out for less than two days. but you know, there were other people across the state who were without power for five five days, right? again, i think it goes to the complexities of the network and that the and i can't say this for certain, but i think it's also that the utilities themselves didn't know which all which circuits were the ones that should be kept on and which should be kept or should be allowed to be turned off. i didn't learn until just the other day that one of the hospitals in downtown austin was shut off. well, that's a no-no i mean a real no. no, so i you know, i think this is part of this rto model and where at you know, we have this massive crisis, but the buck doesn't stop anywhere, right? oh, it's a market. we're going to depend on the market. well, that doesn't work for this business. it's not you just can't leave it to the market if we learn nothing else. that's the lesson we have to learn here. and so it's a very it's a huge problem because these rtos around the country. spp my so pjm. kaiso. none of them have a mandate for reliability or resilience. so, how do we fix that? i if i'm if you made me king every state would go back to the public utility commission. they would regulate the utilities in their state full stop. make sure that they put reliability and resilience as job one. yeah. but why is restarting it a matter of weeks instead of days or one day? well part of it is we're going to get down to grid inertia right the issue of since the days of edison and insole the grid is relied on these big spinning pieces of steel. and i moderated a panel in san antonio for i speak a lot of rural co-ops. i spoke to. national rural electric cooperative association and national on monday and it was a co-op event in san antonio in 2017 and bill magnus who's now the former ceo of urcott was on the panel. and lauren and i just come back from australia. i remember where the grid was failing and grid inertia was an issue on the front on the front pages of the newspapers. well, that's the ability of the grid to maintain its momentum right to ride through faults. and so i asked magnus. well, what about all this asynchronous generation you're adding the solar and wind and he said a certain point. i want to just big piece of spinning steel. right, so when you lose some generation you have to synchronize that new generation that failed to the same 60 hertz that's on the the rest of the grid and that may have to be done by one generator at a time. so again, it's an extraordinarily complex network that requires coordination among a lot of different players and when it goes south it can be horrifically difficult to get it restarted. okay. can i have one thing, you know in oklahoma, we around 2005 put a goal of reaching 15% of our capacity and electricity by wind and this is in oklahoma. governor mary fallin pushed this initiative and you know, we're an oil and gas state. we're an energy state. we're not again against win, but what has happened is they have taken that federal subsidy and exploded that that development and it's funny to me and i i used to work for a guy named jim minoff and jim monofa would also often out answer a question and after he was done with his answer he'd say, i don't know what your question was, but that's your answer. so i'm just going to tell you. i don't so what what is funny to me is in the buildback better bill. you have 55 billion dollars is 55 billion dollars for for green initiatives. it was including ratcheting up back up the wind and solar incentive. so when we talk about it being the cheapest reliable energy or unreliable energy if you will it's a they're still getting government subsidies. they're still expanding government services if you want to know our government energy policy in 2015. we began to export oil out of this country in 2015 seven years ago. that's where we are. so where we're we the tail wags the dog from a policy perspective. and and that's a big problem i think going forward is you're still going to see i mean even in the bills that are coming forward. we're in dc a lot talking about what's going on talking about energy policy harold just recently met with senator kerry or i'm sorry secretary kerry. it was really interesting meeting harold did a did an interview with financial times and secretary kerry read that article and called him up and said you said in the financial times article. you can get a hold of me. i'd love to meet so of course harold goes right up to dc and we sit down with him and it was it was a cordial meaning and secretary. kerry was a gentleman they didn't agree on on a lot of stuff but one of the most interesting things you tell one of the most interesting things is, you know, harold says well, we got to get, you know, we got to look at equity be equity in energy and understanding these subsidies that you're giving wind and solar we need to be on a level playing field and he goes harold you have been getting has to be any subsidies for years and harold just kind of looks at me goes. okay, here's this is the one thing i am gonna have have to disagree with you. he goes when i was in north dakota and drilled 17 dry holes. 18 if you really want to talk about it. uneconomic, he goes no one ever gave me a dime. he goes what you're talking about is a manufacturer if you leave nothing from today, please take this when anyone says oil and gas gets a subsidy. this is what they're talking about. it's a manufacturers deduction. it's called an idc anyone else when you guys the titans of industry when you build a building you can expense it. it's an expensing process what they've done in dc is put that something different for oil and gas and they use that number to throw at us as an expense. so that's the subsidy they're referring to and it's it's got to stop it's silly and that's what harold is talking about. look this is silly. we're not you're subsidizing you're giving wind money to produce and you're actually saying that a expense is a subsidy and that's a problem. that's not relying on being honest. that's where he talks a lot about iq versus eq about we've got to have high iq in energy and not be emotionally tied to some of these policies. and so that's what we're doing. that's why i think i mean harold's harold's been committed to meet with this administration and we would love to meet with them. in fact, you know when when our guys pulled up again going off side on the 9,000 9,000 permits. i mean, we we have looked at all of those most of them are in four counties in the us. 9,000 permits most of them in four counties think about that if you had not think about if you were trying to drill all those but they don't talk about that. they don't talk about it. it shows they're willingness or unwillingness if you will to talk to the american energy industry and and work towards solutions, and i think that's where we're going to are going to have to get to towards to really find solutions that's going to going to help all of the country. can i just add one quick point on that btc so you mentioned the buildback better? so the production tax credit for wind i mentioned those in my slide deck and the itc well in the buildback better act there were five-year extensions for the ptc and the itc. so if these forms of energy are cheaper, why do they need subsidies? and the other key number here, is that the production tax credit was going to be put at $25 a megawatt hour 2.5 cents per kilowatt hour 25 dollars a megawatt hour in texas. that's roughly equal to the wholesale price electricity in the state. so, how can how can anyone compete with an entity that is getting a subsidy that is equal to the market price. you can't and that's one reason a key reason why no thermal generation is being built in texas because it's uneconomic and until they address that the ercott the reliability and the reserve capacity in the state is going to continue to decline at the same time. everyone from california is moving to austin and they're also they're also giving tax subsidies within the state as well property tax reductions. you're charging a production tax to oil and gas if you're not getting that in texas on wind. we're not doing it in oklahoma. it's those kinds of inequities where you really on apples to apples that they're you're going to have to look at those kinds of things few in the future. i would propose texas does need to be charging a production tax on wind. i mean that to me that level is the playing field. so a question about getting out of this vulnerable position. we're in in texas same with europe, right? they're vulnerable to russia because they're unable to produce efficiently what they need right this second blue if if boris in the uk and the european leaders decided starting right this second, we're going to reverse course. hit the accelerator on our own production. and everyone we're on board, how long would it take them to ramp up? because we had to talk about in the united states how much time would it take and how many how much money would it take for us producers to bring down gas prices? it's kind of a sim. ar to chin these things don't just happen overnight. yeah, and it's an interesting it's it interesting and complex because you're hearing large oil and gas ceos talk about they're not willing to expand in fact if you look at the market reaction to russia. are the united states policy on russian imports major stocks went down because they were afraid that costs were going to increase in the oil and gas industry that production was going to increase and what has happened is that's a much more broad issue because because you have an administration that has put a an issue on loaning money an issue on we want to end this we're not going to give infrastructure the it just a overall you saw the secretary of energy talk just last week. hey, we want more production and i think it was mitch nearly. well, we haven't seen anything from that. we haven't seen policy changes. we haven't seen there is a full-scale. okay, we were wrong, you know and and the president is to his credit during the state of the union basically said let's defund the police. oh, i was wrong. let's fund the police. i think maybe i'm not saying he's going to do that with energy by the way, but it would take that kind of large-scale adoption of you know, what we're gonna have energy. we're gonna have fossil fuel energy hydrocarbon reliable affordable energy long-term in this country, and we're going to do it cheaply and reliable and i'm going to work with this industry and i encourage investment. i think that kind of that kind of -- played by the president probably by this administration which of course is probably just wishful thinking but it is i'll just add on that. remember the federal energy regulatory commission just passed a rule last few days that any new pipeline project has to pass some climate hurdle, right? so at the same time these biden appointees are under running our nuclear sector, they're undermining our ability to build pipelines, but i think jackie your question is really important and i'm on tuesday on my podcast. i'd benny pizer. he's with the net zero watch in he's based in london actually in liverpool and we talked about this about how how long would it take? for the uk than to i mean they can reverse the fracking ban pretty well right away. but how long is it going to take to get a an ac top drive rig into the shale bearing zones in in the uk? with a good crew with a sand chief with all the you know, the frack spreads and all of the the roustabouts tool pushers and roughnecks the people who know what they're doing. they're gonna have to come from oklahoma, texas, colorado, louisiana, and there's a limited supply and the supply is limited now more than ever because we've laid down so many rigs. so i there's no doubt in my mind the uk all of europe. they're gonna start drilling and they have to to start right -- now. but it's going to be a year's long process because they don't have the human infrastructure or the physical infrastructure. that's going to allow them to do like, you know, the ramping of the production and the permian where you know, the most drilled province in the world and is now probably the hottest oil and gas play in the world still. but you have all that infrastructure ready to go so they can ramp up production pretty quickly, but it's going to be hard. they're gonna be land use conflicts. they're going to be people don't like it and count on the sierra club opposing it. on a side note in world war two there were roughnecks from oklahoma that drilled oil wells in the uk for oil and gas production and that's i mean if you talk about it, you know if you've got a problem give a roughneck and a some duct tape. they're gonna solve it. i mean that that's what our industry does and it's it's there they will solve problems, but just get out of their way. and we can we can do stuff and but you've got to have you got to be incentivized to invest. let me ask you so i mean, what about a continental? i mean, are you able to find enough people to man your cruise? so if we i don't and do they have to pee in a bottle and can they tell you what? yeah, of course. yeah. no, i mean it's if you look at where we are from a rake perspective, you know, we were at 1600 rigs. we're at 600 rigs operating right now a lot of folks that we've lost from this industry are coming back. we're training new people. i will tell you i work on our hsc team safety is something we talk about every day because there's so many new people in our industry and they don't understand that they're learning how to deal with what we're the equipment all of those things. but yeah, it's gonna take it does take some time. it absolutely takes some time and but but investment but i would argue that it's the overall sense of we're not even i mean, we've got folks we've got great young people in this room and you're gonna let me just tell you all on gas is going to be around for a long time. don't be afraid to be oil gas business and harold says it all the time he but how many people are you short i mean rigow truck drivers, you know, rig workers frank, you know, you're there is no question. it is a constraint without a doubt. we are 100 200 300. i i can tell you right now if you wanted to go out it prices are increasing day by day already because the lack of rigs that are available on wages on wages on rig times on on frack crews everything. i mean, it's it's the amount of steel that's available just isn't there. i mean chris knows that more than anyone so absolutely, however, we've been in this position before and we can come out but it's investment into the process. it's investment and it's long term that's the other problem is when you're talking about investing and chris is a great these are not cheap pieces of equipment and and your investors want to go well, you're gonna put these to work long term right and we're not going to get switched like a pipeline. it's not going to it's permit pulled after it's nearly already built, right that would never happen the rule of laws in this country. and what has happened is it is made every energy investor skittish because what how do you how do you rely on that? if i i'm not skittish if i put in an apple apple is going to be fine. do i have to take money out apple and put it on oil and gas. well, i've got to have reasons behind that and there's and and there's a lot of policy that i think will will incentivize that well, even if they weren't skittish what about the esg constraints right capital not flowing to oil and gas producers because people want to divest it's not green. how big a problem is that? yeah, i mean, it's absolutely you're seeing that change a little bit i think with you know, mr. phoenix reversion on hey, by the way, we're going to need oil and gas. it's amazing when you become profitable how how quickly the although but i will tell you. it's also the online gas industry telling us ehg esg story better. we've always had a good esg story talking about what we're doing in not just environmentally, but what we mean, socially and and getting better environmentally as well. we're paying attention to those issues. we're we're communicating them better and i think it's going to really broaden the investment horizon for who's investing in oil and gas in the future. i can just add one quick point on the esg. so i'm from tulsa alliance resource partners is a tulsa-based company. so i'm acquainted with joe kraft. he's a ceo of the company and i had him on my podcast. so i a month or so ago. so there's i think i said the second largest coal producer in the eastern us. well, they're producing about 36 million tons a year. they could easily expand because the market and demand for cola so high. but then he just casually says i said, what about esg? he said we have 14 bankers in our revolving line of credit seven of them have told us they won't be back because of esg. here's a company that's not doing anything illegal, not even immoral or fattening and their bankers are cutting them off. because of esg so this is i think it's a cancer on capitalism and it's an unaccountable cancer that is made by a lot of people who don't have any accountability to shareholders and have any accountability of the general public and the ukraine invade the russia's invasion of ukraine should be an inflection point it should be a point in time where policy makers understand we have to have energy security and energy security depends on having homemade energy home, you know domestic energy and a robust dynamic energy industry. we have that but it's being undermined by this fad. can i add one thing? i just want to say thank you to the institute and thank you to jennifer and your team. i mean, i you and everyone here that are these events matter and your time and your treasure matter and we do this a lot of continental and sometimes it looks like your feels like you're fighting alone and when you can come into rooms like this and and really have these conversations, it's super incredible and helpful. so, thank you so much for having us and and i will say this is the worst beer and i will say this is the worst fear i've ever had, but, but i look forward to it later. 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