[Episode #0] – The Launch

Justin Ritchie: One of the exciting things that we've been working on at the Extraenvironmentalist for about the last six months now has been an idea. that Seth and I have had for quite some time and that's making a podcast network that is much bigger than just the regular, you know, once a month or once whenever it comes out Extraenvironmentalist podcast into a reality and into something that pulls in all of the important threads of these various topics that we've covered on our show at at different times into the kinds of formats that can get the kinds of attention that they deserve

Seth Moser-Katz: That's right. Justin and I have many, many ideas, and the fact that there's only two of us is kind of a limiting thing And so we wanted to go and investigate a lot of different ideas. We wanted to let these Extraenvironmentalist notions permeate through lots of different avenues. And we thought the best way to do this was to create a non-for-profit podcast network of our very own.

Justin Ritchie: So the first of what will soon be quite a few of our partner shows is on the topic that pulls in to so many of our Extraenvironmentalist episodes on energy transition. And we're extremely happy to have Chris Nelder. uh fantastic accomplished energy analyst and writer and journalist on energy transition hosting this first show on our network the energy transition show is its name And Chris is with us today to talk a little bit about the ideas of the energy transition show that he'll be hosting.

Seth Moser-Katz: Chris, are you out there?

Chris Nelder: I am here.

Justin Ritchie: Yeah, well thanks for joining us, Chris, and thanks for being the pioneer to host this first show on the network. And I just wanted to start out by asking what leads you to want to do a show on energy transition in the first place

Chris Nelder: Uh well I I felt like the energy transition subject itself really needed a dedicated vehicle to cover it. There's Certainly plenty of podcasts out there that talk about energy or that talk about transition in one fashion or another, but I really felt like there needed to be a show that was just simply dedicated to that subject. because it's a very complicated subject unto itself and it has a lot of unique challenges to it, a lot of interesting technical problems involved in it. It touches on a lot of different topics, not only energy, but also economics and particularly macroeconomics. And it touches on policy and it touches on a lot of things. So I I really felt like there was a need for a show that would really just focus on that subject and elaborate on it and dig into some of those important technical questions. It's gonna be a pretty geeky show, but I think there are just enough energy geeks out there that'll be interested in it.

Seth Moser-Katz: Yeah, and I know a few of those energy geeks personally. Could you talk us through some of the themes of the maybe the first few shows? I'm excited to hear what but they might be.

Chris Nelder: Yeah, the very first show is gonna be about the so-called war on coal, and we're gonna talk about coal on the grid. and what the challenges are within the coal sector. In the subsequent episodes, we're going to talk about the German Energiewende, the energy transition that Germany is doing. We talk about oil and gas in a couple of episodes and we talk about some of the technical challenges involved in grid power markets. as well as the sort of changes that are going on within the market, the grid power markets themselves, restructuring the markets. what sorts of changes are needed to support renewables, what sort of percentages we might be able to hope that renewables can get to in terms of grid power. And as time goes on, we'll be tackling some of the other subjects too about how we get into ultimately replacing petroleum, which is a a really difficult challenge. It's much harder than grid power. And we'll get into some of the macroeconomic questions as well as some of the really particularly thorny problems in grid power where Getting renewables onto the grid requires not only changes in the markets, but it requires technical changes in the ways that the grid is operated. And that can get real wonky real fast But hopefully we'll keep it accessible enough that people who are maybe casual observers, not quite full-blown energy geeks, will still be able to get into it.

Justin Ritchie: Yeah, and a lot of the vision that has compelled Seth and myself to work on the Extraenvironmentalist for quite some time has been that of just being disappointed with media in general. in wanting to produce media now that the means of production for media are much more accessible than they were in the past where you had to be on a major network in order to produce a show and just because of the economics of setting up a you know giant broadcast station and all the redundancies required for that were so high. it limited the kind of scope and reach of what you could cover in a show. And so I think the exciting thing now is that making a a podcast is Still not free or cheap, but it's certainly more accessible. And so we can do a show that has the kind of detailed focus that you're going to bring on energy transition. Chris, with your show because it's all about furthering education. And so that leads me to ask about kind of philosophical influences you have in in journalism or or in media and how that fits into your long-term vision for the show.

Chris Nelder: Mm, that's a great question. You know, I've always been the kind of person that really likes to dig into a subject and really likes a thorough explanation. You know, I'm I'm very dissatisfied with sort of surface level explanations of things or just very quick sort of sound bite approaches to especially these kinds of really complicated problems. And that's oftentimes what you get. You I mean, you know, you tune into the news or or a CNBC broadcast or something like that. And you're going to get just a very brief, very surface explanation of what's going on and maybe in the oil markets. You know, why are oil prices higher? Why are they low? Or Who's overproducing and then that's it. Like there's no context. It doesn't explain to you, well, this is actually a really complicated subject involving supply and demand and production cost and consumer price tolerance and you know, reserves and production and all that kind of stuff. And so I think listeners and readers and and watchers are are just not well served by the mainstream media on these really complicated subjects. So I really wanted to be able to have a chance to really dig into those things and explore them in their full complexity. And also I tend to prefer pundits and presenters and writers who explore things in depth. You know, I like long-form journalism. I really loathe the three hundred word hot take that now seems to just totally dominate journalism because it doesn't tell you anything.

Justin Ritchie: So you're not gonna be the buzzfeed of energy transition.

Chris Nelder: We are not gonna be the buzzfeed of energy transition We're not going to be the fast money of energy transition. Fast is not what it's all about. Short is not what it's all about. These are complicated subjects. And if you really want to understand them, you gotta take the time to really explore the subject and to put it in the proper context.

Seth Moser-Katz: I really like the idea of you leading us through this, you know, energy transition that we're in as we're moving through the end of the fossil fuel era in the twenty first century. I kinda like the idea of of your calm voice guiding us through this. So we are have been trying to aim for uh a shorter show on the Extraenvironmentalist. Our shows often go, you know, two hours in length. And in your show, Chris, we want to aim for a little bit of a shorter length of show, a more of an energy bite-sized show, something that people can get in and get out of with relatively little time investment. Can you tell us a little bit about the format of your show? Like what can people expect as far as segments, as far as interviews? What kind of elements are we gonna see?

Chris Nelder: Well, I'll have one interview typically per show and that interview will go about a half an hour. I'm not gonna be too worried about exactly how long it goes, you know, the conversation will follow its own course, hopefully, and take about as long as it takes. I'll offer some commentary on the topic of the week. There'll also be a little segment of news and topically appropriate song clips that people might enjoy

Justin Ritchie: Yeah, very cool. So let's just dive in here to a little bit of a sketch of some of the topics of of those first shows and about energy in general. And talk about the narrative of energy transition and in the world today in in twenty fifteen we're talking here you know, in mid September of twenty fifteen and it's looking like in the global macro picture that China's growth rate is slowing down there They're hitting uh bit of a trend change that's different from the rapid growth that's really been part of China's economy since the mid nineties. And all of the countries like Brazil and you know the so-called emerging market economies are also facing some trouble. in their economic growth rates and that's causing a huge impact on commodity markets. So could you talk about what energy transition means in that kind of global macro context?

Chris Nelder: Yeah, it's a really fascinating and and super important thing. And and I think actually the whole demand trend being much weaker than expected is something that, you know, mainstream pundits have only recently begun to really appreciate. It was August twenty fourteen when I started noticing that China's demand for oil in particular had started to taper off. I mean it was still growing, but at a much slower rate than it had before At the time, the only thing anybody was talking about was the supply side stuff. Nobody was really looking at demand and everybody was assuming that China's demand in particular was going to keep surging forward as it had been for for quite some time. But the problem is that China has been the world's marginal buyer of pretty much every commodity. And when they started slowing down it would have serious implications for global commodity markets and really for all commodities. And I started tweeting about that in August of 2014 and I don't remember getting much in the way of response. But sure enough, it was right around that time that the oil price slowly started to decline and then it really started to fall. in September and around that time most pundits were pointing at OPEC and accusing them of a production increase. Which in fact they hadn't done. OPEC's production stayed pretty much flat year over year, while the US, in fact, and Canada were still producing more and more every month. So the oil glut that really started to develop in Q4 of 2014 was really driven by weak Chinese demand, and that's something that most pundits were just not even recognizing at that point. It was still all about a sort of an OPEC versus the US narrative. And then when OPEC finally met in November and decided not to cut production to support prices, then the OPEC versus the US narrative got even stronger and still nobody was looking at demand. So now what we have is a situation where we've had a full year of price declines. Across the board in commodities, all fuels, metals, industrial metals, precious metals, soft commodities, even grains, which have all now fallen down to the 2009 recessionary lows. And that's not something that happens when you have a healthy global economy. And of course, commodities are always a forward indicator. They're a leading indicator of of the health of the global economy. So noticing that happening back in early August of 2015, I started sending out a lot of tweets again, which didn't get much response. saying people look at this giant divergence between equity markets and commodities and look at the levels that the commodities are now at. It's now at the 2009 lows. we should normally expect this gap to close. And so that either has to happen by commodity prices coming back up. And I don't see how that can happen when demand is so weak across the board. Or it'll happen with equity markets falling. And of course it was four to five weeks later that that we had various stock market crashes all around the world and the stock market continues to be very weak. So that was absolutely as I expected. So the risk now, and I think people are now beginning to finally appreciate the weakness in China. You know, I mean they've they've had a year to catch on to the story, but of course nobody pays attention to anything except price and especially equity prices. So what we have now is some indication that the weak economy in China and Brazil and s and the other major emerging markets is telling us that there really is a strong deflationary trend here that's starting to pull the global economy down. And from a energy transition standpoint, that can be It's really a good news, bad news story. I mean, on the one hand, if the world is indeed falling into this deflationary vortex, it'll mean that we'll we'll burn less fossil fuels than we expected. And at the same time, as wind and solar are now becoming cheaper than fossil fuels, it would likely mean that the share of renewables will actually grow faster than expected because on a percentage basis, you know, fossil fuels are falling. So that could be a good thing, but it would also mean that fossil fuel prices are going to stay cheaper than anyone expected. So that there's now a risk that if that deflationary trend becomes sort of priced in, if everybody's expecting deflation to remain in place, and it turns out to be less severe than it's expected, we could actually see fossil fuel use creep back up, right when people expect it to keep falling. Which could actually result in tighter supply and demand balances in the future and price spikes. So that's a real risk And it could also mean that the build-out of renewables and efficiency that we're all expecting is a part of this ongoing energy transition that's been underway for at least a decade now. would actually proceed more slowly than expected because all kinds of economic activity are slowing down. So it it may mean that in the future Capital formation is harder to do. Projects are harder to get organized. It's harder to get various funders involved in backing these projects. And finally, it could also mean that it becomes increasingly difficult to to fund the kinds of adaptation and and mitigation measures. that we've been counting on to address the problem of climate change. And so it could actually leave the world more exposed to some of the more ugly default pathways in climate change scenarios.

Seth Moser-Katz: That's a whole lot of information, Chris. Don't get me started. Don't get me started. Oh man. So what you're telling us is that we shouldn't go out and buy a new F-250 pickup truck is basically what I'm hearing you say. I'm also interested to hear more about the uh in renewables take that you were mentioning there. The coming on of the renewable market to try to help mitigate some of this fossil fuel overload almost, it doesn't sound like it's going to happen as much as we had hoped for.

Chris Nelder: I don't think it will. I really don't. And in fact People who have been reading my stuff or the stuff of people sort of in my corner of the intellectual world for the last decade would not be surprised to hear any of this because it's been sort of part of our scenarios for a long time. that as fossil fuels started to deplete and got harder to produce, that the price would go up and that that would actually act as a break on the global economy. and that ultimately that would turn into a deflationary undertow. And that's, in my view, exactly what's happened. And in fact, it would have been far more evident over the past decade but for the financial crash in two thousand eight, which in my view was absolutely related to the rising cost of fossil fuels and all other commodities, which Of course, the price of those commodities is all related to the fundamental cost of the fossil fuels needed to produce them. And it also means that that deflationary force would have been taking the world economy down much more than it did. But in two thousand eight, with the global financial meltdown, the world turned to quantitative easing. You know, we turned to all sorts of financial games. not just QE, but really all sorts of data games that are being played to sort of hide the fact that global economic growth has been weak. And so we've managed to pump up the stock market without materially improving the welfare of your average rank and file worker. Wages have been stagnant. We've had a lot of full-time jobs turn into part-time jobs. We've had a general decline really in overall wealth. except for the very top of the one percent. So in my view, all of those things that we did to try to recover from the financial meltdown in two thousand eight uh basically served to paper over what was already a weak trend in economic activity worldwide, really, except for China and the emerging markets. And now that they've actually started to slow down too, it's starting to raise its ugly head again. So You know, this concept of the deflationary vortex has been on our minds for years, years. And I think that we're actually potentially gonna start to see it exposed now.

Justin Ritchie: Yeah we did our first show on the deflationary vortex idea back in in twenty twelve and we've done a few shows on it since then and those underlying dynamics were definitely possible for quite some time and it's just taken years and years to actually see it play out. So One of the consequences of a world where commodity prices are low and we have now in the middle of September of twenty fifteen we're at forty-five dollars a barrel for WTI oil. What does that mean for, you know, Saudi America hopes, for US production, for you know, us overtaking Saudi Arabia as the world's oil-producing leader here in the next few years?

Chris Nelder: Well, I mean, you know, first of all, the the very phrase Saudi America sort of tells it all, doesn't it? I mean US shale production was always overhyped. And it was always driven by debt, large amounts of debt, a lot of which is now turned into junk bond debt. And I think it was necessary to tell this whole story, to create this whole narrative of Saudi America, basically in order to keep the debt coming, in order to sustain the production. It was necessary to create this whole hallucination of US energy independence in order to get investors excited and keep that money rolling in so that these th this debt fueled drilling would continue. And you know, I mean, all you had to do was take a minute and think about it and go, well, okay, let's say the US does become the number one producer of oil in the world. So what? What does that actually mean? Nobody ever showed that the US would be able to completely eliminate its oil imports. We were always going to be a net importer of oil. So does being the world's top producer mean anything except maybe allowing you to beat your chest and say we're number one? Uh no. The United States does love beating its chest. I mean, let's be real. Yes, we do. We we love to get out the big foam finger and say we're number one. And what does it mean to say that we're on track to become energy independent if you actually dig into the models that were put forward to say that we could become energy independent? The way those models actually work is that they add up all the BTU of all different forms of energy that we import and we export, to the point at which we become a net exporter on a BTU basis. we could say that we're energy independent. Well what does that mean? It doesn't mean anything. I mean it sort of implies that ultimately it would help with our trade balance, maybe But that's about it. We're still going to be importing a lot of energy from other countries, mainly in the form of oil. And we're still going to be exporting a lot of energy to other countries, mainly in the form of coal. under those energy independence, quote unquote scenarios. And neither of those is a good thing. We would still be dependent on OPEC for example, to supply that net imported oil that we still need. And we would still be exporting that coal to China, which is really a horrible thing from a climate standpoint. So these talking points of energy independence, Saudi America, the shale gale and so on, all of this was just propaganda. I mean, it is important and significant that the US managed to apply a new combination of old technologies that have been around for a long time and figure out how to crack the code to produce oil and gas from shale. But it turns out that it's very expensive to do that. Turns out that nobody was able to do it on a cash flow basis, and it required them accumulating a great deal of debt to keep it going. And when oil prices crashed starting in Q4 of 2014, there were a lot of people, myself included, who thought that US production would taper off pretty quickly. because of that, because it wouldn't be possible to sustain drilling rates and eventually the rapid decline rates of of the shale wells would overtake the lower rate of new wells being drilled. That didn't really happen as expected right away, primarily because all of these producers were able to go back out to the capital markets and raise another load of fresh debt or issue equity or what have you. How are they able to do that? Like who were they able to convince that that was gonna be a good idea? Banks, private investors, all sorts of people. That was always a possibility that I had considered. I just didn't think that the capital markets would have the kind of appetite that they did. And part of that I think was because a lot of them had a lot of money riding on it already. And to them it was better to sort of double down on that and say, okay, we'll we'll give you another six months or nine months extension to ride out this period of low oil prices and then when oil prices come back up everybody'll be back in the black and we'll be fine again. But in fact that hasn't happened. And so I think that if oil prices remain anywhere near current levels for, you know, the rest of twenty fifteen, This is going to end in tears for a lot of lenders. It really is. There's going there's already been significant losses taken. There's already been a number of small companies go bankrupt. There's already been a great deal of trade going on in terms of especially the majors, but also some of the smaller companies selling off assets. in order to raise capital, in order to support the dividends that they must continue to pay out if they want to keep their investors happy. You know, if you just look at the mere production levels of US oil It looks like, hey, everything's fine. I mean, yeah, you know, it's dropped a little bit since April, but they're producing a lot more than everybody thought, and it's gonna be fine. Well, it's not fine. What's been swept under the rug here is a massive load of debt and the quality of that debt has gotten worse and worse and a lot of it's been downgraded to junk. And more of that will happen yet. There was a report recently, I remember an article by Ed Crooks in the Financial Times in particular, showing that US listed independent oil and gas companies spent thirty-two billion dollars more in the first half of twenty fifteen than they brought in. That's a a thirty-two billion dollar loss for the first six months of the year. And, you know, that compares to a $37.7 billion loss for the whole of 2014. And so You know, as Ed rightly points out, this will lead to a rise in bankruptcies and more restructurings in the U.S. shale oil industry. So until these guys get to the point where they can actually cover their capital expenditure from their cash flow. And nobody knows when that would be or at what level. I think we should just be really, really skeptical still. about this whole Saudi America narrative. And and I think if they do get to that point ever, it would be at a considerably lower level of production than than they're at now.

Justin Ritchie: Yeah, and people like yourself have been very skeptical of this whole idea of the US as major shale oil producer for quite some time. I know there must be a little bit of a temptation to have a bit of a victory lap or at least say, hey, you know, I I've seen these dynamics coming because in the world of resources, you have to have so much fixed capital installed in order to make your production process happen And so it's a lot easier to just keep doing what you're doing as opposed to halting immediately. And so that leads to these kind of Wile E. Coyote moments where you run off the cliff edge and you keep running. And you know, as soon as you look down below your feet, it's just nothing but a canyon floor beneath and you start falling. But you might keep running for quite some time over nowhere. And the International Energy Agency's September oil market report just came out And they're projecting that oil is going to take nearly a half a million barrel a day cut in twenty sixteen from non OPEC supply, the biggest decline in more than two decades. And this is gonna be led by lower output in the US, Russia, and the North Sea. So does fifty dollar oil necessarily mean that we have more oil in the world, that we have an oil glut, or that we're actually gonna see declining production overall globally? It's difficult to forecast either way, but what are some of your thoughts on the dynamics?

Chris Nelder: Yeah, well First of all, when I saw that report from IEA I thought, yeah, that's kind of typical, having the courage to run out and shoot the wounded. It well, first of all, let's look at the EIA's data, the US Energy Information Administration's data. So they just recently in August changed their methodology for estimating US production. And now they're doing it on the basis of a state level survey that's giving them much more accurate data than their previous estimates. And that showed that US production got to 9.6 million barrels a day in April, so a new peak basically since the last peak in 1970, below that level, but still kind of a new peak. And so since that 9.6 in April, their latest monthly data is for June, which is 9.3. So US production fell 300,000 barrels a day in two months. I mean that's really significant. That's a steep fall. It'll be very interesting to see what the August and September and October data show when it comes out. You know, that data lags by a couple months, so it'll probably be December before we see the October data. But it's clear that US production is already falling. And if IEA is projecting a 500,000 barrel a day decline in two thousand fifteen. Well, the US has already done three hundred thousand barrels a day of that since April. So not not a particularly bold call on their part. And also if you look back at IEA's forecasts from a year ago or from Q four. of 2014, they were not predicting this kind of decline. So oil prices at fifty dollars a barrel. This is really a difficult question. If you just look at inventories and prices, okay, you could say, yeah, fifty dollars a barrel tells you there's an oil glut, and of course the easy thing to do, which most pundits do is they just talk about the stocks. You know, they just say, oh, well, inventories are up this week or inventories are down or inventories are up more than we thought they were going to be last week. But those are very short-term metrics and they're not really important. They don't really tell you very much about the trajectory of oil prices. They don't tell you very much about how much of a glut you really have. John Kemp of Reuters actually did a really interesting piece this week about the way that refineries actually operate and how many days of supply they can keep on hand at any one time and it's not very much. So you know, stocks, or rather inventories as they're often called, fifty dollars a barrel, does that tell you that you have an oil glut? Not necessarily, because if you look at other metrics, for example, spare production capacity, you might get a totally different point of view. You know, the global oil production spare capacity now is down to about two percent, and almost all of that is in Saudi Arabia And one could legitimately question how much of that production that Saudi Arabia actually has can actually be brought online in a quick period of time. So in the past, when you get down below that 2% level, you tend to get price spikes So if you just look at the fifty dollars a barrel and you think that that's an indicator of whether or not there's an oil glut You could be wrong because below 2%, you are now essentially maxed out on global oil production Everybody in the world right now is pumping just about full out in order to maintain their incomes, even when it doesn't really make sense for some producers to keep pumping at those low prices. Even if it causes them to lose money in terms of profitability, because they just have to have the income. So we've also got a rising risk of a price spike building. And if you look at how much CapEx has been slashed around the world over the past year, about $200 billion, I've heard, which would have resulted in future production, you know, say ten years down the line from now. Then you've also got a rising risk of future shortages and price spikes due to supply-demand imbalances in the future. You know, you could easily if demand were to pick back up again and we do not in fact slip into this global deflationary vortex, we could easily find ourselves a couple of years down the line, and it may not even be that far in the future. It could be three years, it could be less. where supply actually falls short of demand and we get another big price spike. So I'm very skeptical about calling this an oil glut I think what we have right now is prices that are far below where they need to be to sustain future oil production. And that's really a function of the trade. It's a function of the narrative. It's a function of Producers trying to protect their incomes at all costs. It's not really an accurate reflection of what, you know, sort of the econ 101 supply-demand balance would show you

Seth Moser-Katz: A lot of what you're describing, Chris, sounds a lot like the two thousand seven housing bubble with everyone trying to get as much packed into these funds where they would lump mortgages together and and just make as much money as they could out of this failing industry. Is this gonna be another too big to fail kind of situation with oil companies and and these financial banks just failing left and right? Are we gonna see another 2007 going on?

Chris Nelder: Uh well I don't know. I mean I I think that's an interesting analogy just sort of in the sense of I don't know, human mentality perhaps or behavior. I don't think the analogy really holds in terms of the characteristics of the market. Oil is very much a global market and it's financed globally. It would be very difficult to generate a real analog to the mortgage-backed security bubble. in the US on a global oil market. However, I do think that there have been a lot of finance there's been a lot of lenders that have taken on a lot more risk in being exposed to oil and gas than they probably should have over the last few years. I do think they will be forced to take some losses if oil prices remain low. I doubt that there would actually be any sort of a bailout for them. And a lot of people would have argued and and did argue that there never should have been a bailout for the banks either in 2007, 2008. So perhaps the global financial institutions in two thousand seven, two thousand eight, the problem wasn't just that they were exposed to these mortgage backed securities. It was all the leverage and it was just leverage on top of leverage on top of leverage. It wasn't just the mortgage-backed securities, it was the credit default swaps, it was all these derivative instruments that created so much leverage that everything in fact was all connected and everything was in fact too big to fail. I don't think we have that same kind of leverage and interconnectedness in the oil markets. I think it's it's really a very different beast. And so For example, all the small US shale gas and oil producers could go bankrupt tomorrow and just stop producing. And it would result in uh maybe a two or uh ultimately a three million barrel a day decline in global production And that would create a price spike, but then the global oil markets would adapt and we'd go back to paying four dollars and fifty cents a gallon here in California. So I don't see it as being that sort of a too big to fail kind of a problem

Justin Ritchie: Yeah, I think the interesting part about all of these major agency forecasts, whether it's the Energy Information Administration, US or the International Energy Agency. There's never been a situation where there's so many precarious drillers that have to rely on credit dynamics and so all of these production forecasts into the next year they could end up being turned on their head because as a lot of these producers are defaulting and going under, it's not like these dynamics are included in the model at all. And so production could decline a lot faster if that is what ends up happening. But we've been talking a lot about oil for the last few minutes, just to close out and to give our listeners a bit more of a taste of the range of energy issues that you're going to cover. Is there anything else you want to touch on related to energy transition, renewables, grid power, anything like that?

Chris Nelder: Oh yeah, absolutely. Energy transition is a very broad subject, as I said in the opening. And there's just so many different dynamics of it that are playing out in different ways and it's really very different from country to country. So in the United States we have a rather famous collapse of the uh coal industry And we also have a very significant phase out of coal that's been underway for years now, really. There's a variety of reasons for that, which I explore in in the first episode of the show. But carbon emissions is really only the latest of a long string of those reasons. And I think on a more enduring way The real risk to the coal industry in the United States is the rise of renewables because they're basically just getting to the point where they can price out coal. So that's super interesting for the US, just all the dynamics of how that's happening. That's also beginning to happen worldwide. If you go back four or five years ago, for example, countries like India were planning, you know, these multi-gigawatt massive coal-fired power plants. Those did not materialize. There was just simply too much capital that needed to be raised to get those plans off the ground. What did materialize is a lot of small solar systems being built up. And that's continuing to accelerate. And that's just looking at coal power on the grid. Look at Africa, for example, another subject that we touch on in in a later episode of the podcast. A lot of what's really going on there is not grid power at all, but it's people who never had any grid power swapping out a nasty expensive polluting kerosene lantern that they use for light at night for a little solar lantern, which pays for itself in a matter of weeks. Fascinating what's going on in various African countries like that. And we're talking millions of units. This is not a small transition. and the impact that it can have on a very poor population of such a small thing, you know, just swapping out a kerosene lantern with a solar lantern. can be huge. It can be huge in terms of the long-term education levels that people are able to achieve, what their long-term earning potential can be, what their long-term health effects will be. Just fascinating. If you take a look at, for example, energy transitions that are being formally planned and executed, like the Energiewende in Germany, all sorts of really interesting issues there. Not only How did they create that plan in the first place and why? And guess what? It had nothing to do with carbon emissions. But how did they plan it? How did they execute it? of the things that they did to support more wind and solar on their grid, which of those techniques or measures that they took? were successful and which ones might have been done differently or better. And if you look now at what they're doing to maintain their grid and to keep it reliable as renewables get to a higher and higher percentage. Really interesting set of problems there, where in some cases they've totally blown the skeptics out of the water that said that, for example, that Germany's grid could never support twenty percent renewables. But it's also resulted in a kind of a new set of market strategies that are evolving as time goes on as the negotiation between the grid power industry and the grid operators and the German government and the people. continues in dialogue for them to figure out how they're going to get to the next step, how they're going to get to 50% of their grid power from renewables. I mean these are not easily answered questions. There's no script to follow. There's no established plan. Nobody's really sure how it's going to work. And so one of my objectives with the podcast was to really dig into those difficult questions that nobody knows the answer to and explore these different strategies that are being floated and and in some cases tested. So lots of interesting stuff going on in that area. And then of course in petroleum, how do we get off of liquid fueled vehicles and start moving toward renewably powered electricity and there's just a whole host of interesting problems there. And it's not just about electric vehicles, although that could be a big part of it in the long term. ultimately I think it'll probably have a lot to do with switching to rail, which is something I've been saying for years. And then just in terms of Efficiency, for example, that's a really big part of executing an energy transition. You know, the first step, and everyone has recognized this for a very long time. is to reduce the total amount of energy that you need to generate. And then figure out how you can produce that part that's left using as much renewable power as possible. So if you get into the question of of how do you support More efficiency measures, how do you generate the capital to do that? How do you test it? How do you make sure it works? There's a whole interesting set of questions involved with that. So, yeah, lots of interesting subjects. I will touch on oil and gas from time to time because it is a part of the whole picture But that's not really gonna be the focus. The focus is about energy transition and how do we get it done and who's got the good ideas and let's test them out and let's see what's working and what isn't.

Justin Ritchie: Yeah, well, Chris, you've got a release schedule coming up here where the first full episode of the Energy Transition Show will be out on the twenty-third of September and you've got weekly shows lined up for quite a few weeks after that. So listeners to the Extraenvironmentalist Podcast will be able to find those in our regular podcast feed, at least the first few. But you'll also have your own podcast feed that is going to be at energytransitionshow.com and on Twitter at transition show is the handle. Anything else you want to say to our listeners today about how they can find the show.

Chris Nelder: No, that'll do it. I just hope that the people will check it out and geek out and tell their friends and send us their feedback, tell us what they like, what they don't like, and what sort of questions they're interested in having us explore in the future.

Justin Ritchie: Yeah, I think I would argue and make a strong case that there's never been a more interesting time in global energy systems. And that's not just because I'm totally a nerd in that area. It's because there's a lot of just fascinating dynamics going on like the ones we've touched on in our conversation today about oil markets, producers, shale oil. everything involved with grid power and transition in various countries. So never a better time to have the kind of focus that you do on energy transition show in covering all these things in a detailed way

Seth Moser-Katz: I couldn't agree more, Justin. We are very excited to have Chris and his amazing energy show coming online to the Extraenvironmentalist Network. And we hope that everyone checks it out and sees what quality stuff Chris is gonna put out there.

Chris Nelder: And I wanted to say that I'm very grateful to you guys for putting the idea out there in the first place and sponsoring it and producing it and making it all happen because I no doubt would have not done the show without you. So thank you.

Justin Ritchie: All right. Well we'll look forward to hearing from you over the next few weeks on Energy Transition Show I have no doubt that from time to time we'll check in with you on the Extraenvironmentalist podcast as well. Thanks so much, Chris.