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THE FRONTIER LINE
Hosts Wayne Aston and David Murray explore the critical global pillars of infrastructure development and energy production, from traditional methods to future-forward advancements. The Frontier Line covers the latest industry news, energy innovations, and sustainability trends that are shaping the future. Through expert interviews with industry leaders in renewable energy, utility-scale battery storage, and waste-to-energy technologies, the podcast provides insights into the evolving landscape of energy efficiency and sustainable infrastructure. By focusing on the intersection of innovation and the politics of energy, The Frontier Line highlights transformative ideas and technologies poised to deliver cost-efficient, resilient, and sustainable solutions for global industries.
THE FRONTIER LINE
BlackRock & Mubadala in the Headlines in September 2024
Unlock the future of technology and sustainability with insights from BlackRock and Microsoft's trailblazing $30 billion initiative. Learn how these industry titans aim to revolutionize AI infrastructure while tackling the surging energy demands that accompany this explosive growth. Discover why this ambitious venture is not just about smart investments—it's a landmark moment poised to position AI as one of humanity's most transformative forces.
Explore the hidden environmental costs of AI advancements and uncover innovative strategies that promise to balance progress with sustainability. We’ve all heard about the energy consumption of AI-driven systems, but did you know about the surprising water usage tied to AI communications? Inspired by the "Cradle to Cradle" philosophy, we emphasize creative solutions that reduce ecological impacts without stalling technological innovation.
Venture into the world of energy policy with a focus on carbon capture technology and the legislative hurdles impacting the solar industry. Wyoming's pioneering efforts in clean coal technologies and California's surprising shifts in solar regulation spotlight the delicate dance between regulatory frameworks and sustainable energy development. With discussions on federal regulations and the importance of a mixed energy strategy, we aim to highlight practical solutions that harmonize environmental goals with economic resilience.
Welcome back to the studio, dave. Hello Wayne, how are you? I'm well Good to see you again. Likewise, likewise, thank you. I'm excited about today's subject, especially on the heels of the last episode talking about our Tier 5 data center concept.
Speaker 2:That's right, and I mean this just goes right into what we talked about. Yeah, and the moves being made by the biggest entities out there. Yeah, that's right.
Speaker 1:So a little background for the listeners. Just oh man, I think it was yesterday I received an email from one of the heads of one of the largest investment banks on earth and we've been having ongoing conversations about, you know, pulling some equity or some debt facilities together to develop these advanced data centers and power plants and the things we're doing on the Valley Forge Impact Parks. And he drops this article and he says looks like right on track.
Speaker 2:And I'm like hell, yes, we are right on track.
Speaker 1:So I'm thinking for the listeners, just to share the joy, I'm just going to read it. It's like a two minute article. It's a great article From Fundfire, but if you don't mind, maybe I'll kick it off with reading the article we go from there.
Speaker 2:Well, I would do that Absolutely. Don't mind, maybe I'll kick it off with reading the article. We go from there. Well, I would do that, absolutely, doing our but, yeah, keeping everybody you know everybody out there kind of up to, you know kind of we're, we're paying attention to all this, you know, on a on a daily, hourly basis, and so it's fun to be able to share what we're seeing. Yeah, that's right.
Speaker 1:So the headline of this article BlackRock Microsoft plan $30 billion fund for AI infrastructure Goes on to say BlackRock is working with tech giant Microsoft on a more than $30 billion artificial intelligence investment fund that would build data centers and help boost energy infrastructure as demand for AI increases. The Financial Times reports the so-called Global AI Investment Partnership plans to raise up to $30 billion in equity investments and leverage to support as much as $70 billion in additional debt financing. So $100 billion is what they're bringing together total. Most of the investments in the infrastructure project will be made in the US, the Wall Street Journal reports.
Speaker 2:I like that too. We like that a lot. We like that a lot.
Speaker 1:BlackRock is launching the new fund one of Wall Street's largest investment vehicles ever With its new infrastructure investment unit, global Infrastructure Partners, or GIP, which the giant asset manager acquired for $12.5 billion earlier this year. Microsoft and MGX, a new investment company backed by Abu Dhabi's sovereign wealth fund Mubadala, are general partners in the fund. Chipmaker NVIDIA has been drafted in to advise on factory designs and integration. The FT reports AI requires far more energy than previous technological innovations. Existing energy infrastructure is already strained and is expected to face severe capacity bottlenecks in the coming years.
Speaker 2:The FT reports We've heard that we have heard that we might have said that once or twice. We're banging that alarm every day.
Speaker 1:Quote from Larry Fink. We're providing the vehicle in which the AI hyperscalers can use their capital elsewhere, and we have the pension funds and insurance companies invest in the infrastructure and enjoy the long-term returns that are perfect for their retirement plans. Blackrock CEO, larry Fink, said in an interview with the journal we don't believe raising the money will be a difficult task. Fink told Bloomberg, microsoft agreed earlier this year to back $10 billion in renewable electricity projects built by Canada's Brookfield Asset Management. That's another name that we're very familiar with. Won't go into those details. Microsoft has committed to ensure that 100% of its energy consumption is matched by zero carbon energy purchases by 2030, per the FFT. Hell of an article right there, yeah.
Speaker 2:And I just love it. Apparently, they've been listening to the show.
Speaker 1:Thank you. It's a pretty new show, but it's moving fast, it's like wildfire.
Speaker 1:Folks are getting the message here. How exciting to have that type of validation. As we've been planning on this now for the last year and a half, it's actually a fairly new advancement for us. But to understand that from a telepathy, the collective hive mind in the industry is kind of thinking in the same terms and recognizing some of the same issues. You know I wanted to underscore in the article how they talk about. You know, the new energy demand will never, will never be met unless we take these extreme investment measures right. Amen, that's.
Speaker 2:That's exactly the what we're thinking about it right and you know, I mean they're, they're like like black rock. I mean they're like BlackRock, I mean they're going. Okay, where's the smart money? How do we get returns? They see, it's not just a we should do it just because we need to do it, because and it's a great investment, because it's an investment in the future, the future infrastructure, definitely of this country and, I think, broader beyond that but it's in order for us, for our country and all the states, to compete and take advantage of what is coming. I think you see all the big money going. Well, we want to participate in that growth, but we also see it coming because it's coming and we want to be at the forefront and we want to invest in it. We want to own this. I mean, we want to own this. That we know. We want to own the pickaxes, if you will. Uh, we want to. You know the gold rush is coming. Yeah, um, and another one, right? I mean, it's been various ones and this one is substantial. Um, it could be, depending upon who you ask.
Speaker 2:If you ask people in the AI space, you ask me, I would say and I know it's a bold statement and there are probably those that would disagree with me. I think AI might end up being the biggest disruption to planet Earth, to people, to humanity ever, and I know that's saying a lot because of the Industrial Revolution ever, and I know that's saying a lot because of the Industrial Revolution, all these things. It's so substantial, good and probably there's probably lots of bad that we don't fully know yet, but it's disruptive and it's going to impact every facet of our lives. And so, understanding that it's not something we're going to put back in the bottle, it's not something you're going to legislate out of existence, it is here, it's not going away, and I think the investment is okay.
Speaker 2:Well, how do we invest smartly in the future and build these things out? And it's great to see. It's great to see it's validation. We've been talking about this, we've been saying this is why we're doing what we're doing. And when you have big groups coming and going, oh, they're starting to play the same, they're starting to see the same thing. It's very validating, don't you think?
Speaker 1:Absolutely, absolutely. I also love to see that the Sovereign Wealth Fund of Abu Dhabi ising this. So we've also been having conversations centered around foreign investment. Yes, okay, so for the listeners, we talked about Invictus Sovereign. We talked about the funds we're raising. We talked about structuring offerings to accommodate international investors. We've already contemplated this three years now in building this out, and I think it's fun that the article underscores that the focus is to have most of these data centers built in the US. This is foreign investment coming into US projects. That's all consistent with everything we've forecasted and everything that we're doing. All consistent with everything we've forecasted and everything that we're doing. So all of our plans, like multiple layers of the plan just in that one short article just hit many major points that one underscore and they know.
Speaker 2:I mean they understand this is where it's happening. I mean we are leading the world right now, currently in AI. There are moves to try and catch up, but we really are. It's, you know, once again, it's American innovation. It's not exclusively American innovation, but it's it has been. You know, there've been a lot of people, a lot of groups, a lot of you know, scientists and academics playing the space for a long time, but it's the innovation that's kind of come forth out of what's created.
Speaker 2:Openai obviously was kind of the breakthrough company that I was aware of for a long time I mean you were, if you're in the space but it wasn't broadly known. Well, now everybody you know, I think most people have heard about chat and they understand, at least on some level, what that means. It's an American company and it's huge in the space and there are others too and we are leading that charge and we have an opportunity to be able to stay ahead of that and that's a big deal. This industry I mean we can talk about what it means nationally this industry single-handedly could help maybe write some of our financial, national financial woes, because we're going to have so much growth in these sectors.
Speaker 2:There's also a lot of people out there right now saying giant bubble, you know it's going to go away and you know we're spending hundreds of millions of dollars, we're not seeing any value. And then, but I don't think that's the smart money and that's bold of me to say I think there are a lot of people on the other side saying, no, this will be a thing. We're building infrastructure out right now and when it's there, it's just going to go. We understand that infrastructure. This is what this is about. In order to build that infrastructure, you have to solve some of these fundamental issues. Yeah, agreed.
Speaker 1:And it's going to take money.
Speaker 2:Yeah, lots of money. Some influence some money. Smart plans.
Speaker 1:Yeah, that's right If it's not self-evident. I just wanted to let the listeners know that this episode represents Dave and my commitment, dave's commitment, my commitment to be delivering quality and reliable information in a relatively real-time fashion on the topics that are important to us Data centers, energy transmission, infrastructure, capitalization, all the things we've been talking about. And so now this episode. We've kicked this off with a big headline and we wanted to take the time to just share some more of these real-time news events that are happening, that are impacting us or underscoring the value of what needs to be done here. Dave and I consume a lot of information every day. I feel like I'm devoting hours every day sifting through lots of the sci-fi, novelist fluff that you know is in the news to find the real nuggets of valuable information, actionable information. This this happened to be one of them. That just was like a breadcrumb that said yes, just keep going, you're on the right track.
Speaker 2:OK, well, and I mean the source again, repeat to get it from and repeat to get it from. I mean, we saw the headline, but then to have it delivered to you by somebody who is a very considerable individual in wealth management and for one of the largest banks out there to say, hey, you guys, hey, wayne, you should pay attention to this, can you believe? This is what you're saying? That's awesome. I mean it feels good because, like, yeah, we're, you know we're, we get it and that's great, and they understand that what we're doing and what we're talking about, and that it's like, oh, yeah, you're going to want to see this. That felt, you know. That's where it's really good. It means that we are. I feel like we're on the right path and we're talking about the things that we feel like we're really at the bleeding edge of this and it's an exciting space to talk about.
Speaker 1:I love entering an arena where you're making history and it doesn't have to just be us. I consider that we're in the same boat as the folks at BlackRock and Mahbub Dala, and we're all pushing the same boulder up the same hill. That's what's so cool to me is like, on a global level, yeah, to be focused with these quality firms and companies and and brilliant people. It just helps us make a little bit, makes us look a little bit smarter.
Speaker 1:I think maybe you know that we're on to something here. There have been aftershock reports of this $100 billion raise of debt and equity from Microsoft and BlackRock. You've brought up other headlines you know touching on that article so there have been multiple articles that have come out since. You know touching on that article, so there've been multiple articles that have come out since. What's another headline that that caught your eye here in the last 12?
Speaker 2:hours. I might've mentioned it by the time we did our last episode, but it really cause I sent it to you because I was like I and it was just a shocking thing, and this goes to the the amount of I mean, that was one of them and that was the power consumption and what it meant in terms of water, oh yeah, and water usage. I always like when articles, or when you know an author of an article tries to take a not esoteric kind of a thing and say, okay, what does it really mean? Like, what does it mean to me? Is it like how do I, how do I explain this to you in a way that you can understand Right? And so they sort of did that and I kind of took it one step further and like what does that mean?
Speaker 2:Here Again, here in Utah, I think most people 7-Eleven Maverick, basically one of your largest giant cups you're going to get at one of your convenience stores. That's what we're talking about any time. That's how much water is getting used in Washington State. Any time anybody writes an email using AI. We talk about and this is where I think this is an interesting thing and this is where we talk about headlines. Where it plays in is that everybody wants to talk about the energy, like, oh yeah, we want to be sustainable, but when you're doing your emails, are you recognizing the amount of power and the amount of consumption of natural resources that takes? You have to then recognize like, okay, well, if I want to do this, maybe I'm going to be less critical because I'm also engaging in this, but I want to see a fix and I think everybody does so how do you move it along? I mean, that's what we look at, but you realize how big of a deal this is when you're saying it's 49 ounces of water to do an email.
Speaker 1:Okay, that's a pretty crazy number Changes your perspective on pushing the button on the email.
Speaker 2:I mean, if you're a person that's like you know, and you're like, okay, I've got to turn off my faucet while I'm brushing my teeth because I can save the water, I'm like, but don't think anything about what you do in the email and I'm not saying you should not do your emails. I'm on the other side of that saying, well, how do we fix this? Yeah, how do we make it more efficient? How do we make it better? Because we tend to go into a restrictive and you know this is going to go off into a little bit of site. We tend to say, well, let's just restrict it, let's do less of it.
Speaker 1:I'm saying no let is mostly in the restrictions in their restriction space.
Speaker 2:And you know, going back to the book that you and I both read, uh, you know, uh, it's cradle, cradle that, um, the you know they brought up the notion of well, abundance is a good thing. Let's it's a design problem. Let's figure out how to do what we want to do, but let's figure out how to do it so it's less impactful. That's kind of where we find ourselves like, no, I, I want people to. I think people using ai is great. I think people using ai for all these things and becoming more fish. But when you hear how much water is being used, like, okay, we can do that better. Yeah, yeah, right, and that's what I. So this is where the headlines become. You know, you take esoteric headlines. You're like what is it? What does it do to me? So when I read that headline, I'm like, okay, that's really good because we're we're on a pathway right now to try and contribute to helping solve those things so that water usage isn't maybe so directly tied to cooling a data center. And we know there are technologies out there, we know there are things coming online, we know there are different kinds of design tactics you can use in order to solve some of these things. It just takes the effort to go do it. It's a design problem, yeah, and I think that's that's. So that's what I got from that headline and it is. It is a crazy headline If you want to go read about it and and it's also, I mean it breaks down the States. I think they tried it in four different States and you get all the way down. So that was one of the headlines I saw that just kind of blew me away. But you know, when it takes something and it makes it real for you, then you go, oh, okay, and I mean I've seen things like that too to do a search on Google years ago, like how much is it? What's your footprint. So for all the people who are out there saying, okay, don't do this. But then you are just, you're not even thinking you're doing all these searches. Well, that's also contributing. So maybe realize what you do in its entirety and then how you know how, how can you just make things better and not into individuals.
Speaker 2:From an individual level, it's hard to make a change. We're going at this. Going we can make change in infrastructure and I think we can contribute to bigger solutions and that's what we're choosing to do, that's how we're choosing to solve the problem. It's like, how do we do this, how do we do these things better? And we think we know how. I mean, you think, from a developer's point of view, I'm going to ask you. So when you look at development, I mean you've come in and it's like, hey, we're both these things, but you're all. But also you have an opportunity. You've been kind of your mindset's been like how do we, how do we make we don't have to do it the way it's been done. Yeah, right, yeah, how do you?
Speaker 1:What.
Speaker 2:When you hear that, I mean what motivates you.
Speaker 1:Like, do you what sits with you when you see an opportunity to make something better, what goes through your mind? Well, I've always really been addicted to doing things that have never been done before.
Speaker 1:That's a whole different story. Well, I just love it. When someone says, ah, you can't do that, Friends of the show will say that's ego talking, but to me it's more about pioneering. There's so much opportunity in pioneering there's. There's so much opportunity in pioneering value for people and and just this whole notion that you know, if I can create something better for myself, it means I'm creating something better, you know, for my team, for my family, for their families, and that's that's exciting to me. That's a, that's a really altruistic kind of default setting that I, that I have, and so I'm always looking for the better mousetrap, I'm always looking at how to make it more efficient or, you know, bigger, faster, stronger. It's always been just part of the way I'd naturally run, Do you?
Speaker 2:I mean we've talked about again this, but we'll bring it up again. I think energy is at the root of like, in all of our efficiencies. Like, energy has helped us, propel us forward. You know whether it was harnessing way back when you know, water, energy from water to do certain things better.
Speaker 2:We've, obviously. I mean we can look anywhere we look. I mean we can look anywhere we look. We can say, well, it's because we had energy into this thing that allowed us to do this better or quicker or better, which has propelled I would argue some might argue with me humanity forward. Yeah, to us that if we help solve energy, we're solving a fundamental thing that has all these spidering effects everywhere. We have to solve energy. We have to solve how we also communicate.
Speaker 2:This is the data center. Part of it is that AI will be that infrastructure. So you've got to solve energy and AI infrastructure at the same time. But you've got to solve energy and infrastructure and ai infrastructure at the same time. But you've got to solve energy first, you've got to solve how. And if you do that well, then that's where. Well, what's then possible? Because now we've created an infrastructure where you've got enough energy, yeah, to be able to do whatever it is you need to do, and I think america has benefited in the in the past from having a pretty robust infrastructure. Absolutely, I think we're slipping. I think we're falling behind.
Speaker 1:Well, we've acknowledged that it's going to be crisis. I mean, we've talked about energy crisis in the 80s, but we're going to have a serious crisis 80s but we're going to have a serious crisis like a real-time, impacting households. Crisis inside the US because of the unwillingness to kind of advance some of these commodity-level, utility-scale systems along, and there's a lot of factors but government oversight, government legislators, some of these myopic legislators have really contributed to this and it brings up an article I'm going to share with you. I won't read the whole article, but I'm going to share the headline and I'm going to key in on a couple things to underscore the point that we're talking about here. Let's be good.
Speaker 2:We didn't even plan to get around to that and I'm glad it kind of worked around to that.
Speaker 1:Well, I was actually really surprised to see this headline, because this is taking a few steps backwards from what we've been talking about and I'm shocked to see it. So this article came out in PV Magazine. This also came out yesterday. The headline is End of the Line for a US Solar Giant.
Speaker 2:I'm stunned actually, Okay.
Speaker 1:It identifies SunPower, one of the largest, oldest and most influential solar businesses in the United States, has closed its doors. Wow, residential solar installers in the US have struggled as interest rates have risen and cash generation has emerged as an issue. Now the article goes on to talk about what's gone on in California. It's talking about how SunPower's stock first they went into bankruptcy delisted from the NASDAQ and it walks through the demise of SunPower.
Speaker 2:I didn't really read. I saw the headline and I read it, so we'll read a little bit about. Was it a? Was a bad business decisions, or was this? Or was it kind of a multi? What are the? What's the?
Speaker 1:I'm gonna. I don't think it was bad business decisions. I'll tell you if it was market volatility. So whenever any entrepreneurs out there, business startup, business owners, if you've ever done a SWOT analysis or a pest analysis, that's a risk assessment. You're analyzing all the potential problems and it's often to discuss political risk, geographical risk, investment risk, market risk, all the things.
Speaker 1:To me, this article underscores political risk and market risk, because what they talk about here is, it says, in late 2022, the California Public Utilities Commission approved its net energy metering 3.0, the NEM 3.0 regime. And this is the straw that broke the camel's back for sun power. The new regulatory scheme cut the rate utilities are required to pay to solar customers for electricity they export to the grid by 80 percent. So you've got these door to door sales guys. They've gone out, they've sold hundreds of thousands of home rooftop solar systems to customers and part of that thing is, hey, if you don't use the power these panels produce, you can sell it back to the grid and there's a bump there. Well then California comes in and they cut that rate by 80%. It just hobbled the whole economy solar economy.
Speaker 2:Was that being driven by the utility? I don't know. The utility's going, hey, we're not paying. I'm curious because then it's like, does the utility come in and then buy all the solar, buy some Like?
Speaker 1:hey, thank you very much.
Speaker 2:I'll just pick your business up now. Thank you, we appreciate it. Now we don't have to pay the middleman. I don't, I'm just, I don't know, I'm speculating, I'm curious about, I'm curious, so so they, they pass a thing basically crushes this one company it totally crushes sun power.
Speaker 1:It's interesting that the article underscores that california represents about half of the us residential solar market. Okay, that by late 20 by late 2023, rooftop solar installations had fallen 80 percent and driving more than 17 000 layoffs 22 percent of the solar industry dead overnight because of legislation, and we could call it whatever we're going to call it. Yeah, you read in between the lines yeah, I'm curious.
Speaker 2:No, I'm actually curious. I mean, that's, that's like okay, so why? Why would you do that to, uh, the company? I mean I, you know why, and I guess so they, so they, basically we're going to cut the rates that you're getting paid, so and so.
Speaker 1:Then it just made it just in pencil anymore yeah, yes, and when you couple that with with the burgeoning interest rates on mortgages, right, and inflation, all of it starts to really not pencil. We've been dealing with mortgage rates in excess of 8% with this administration, which I continue to refer to as a clown show, because from a macro perspective it has been a clown show. All the levers have been moved in these wrong directions trying to solve climate change, trying to solve this renewables commitment. You're right, like it's this prosaic way of approaching things, and we've talked about the mandates and certain things. This is just one example unexpected, because I thought California was all about the solar. So how do you legislate something that crushes the industry like this?
Speaker 2:I don't know. Now I have more questions I'm like. Now I want to hear from I don't know did they quote the CEO or anybody in the company saying, hey, this is what we think happened, and where they were saying anything like that? I'm curious, and this is where I want to dig into this, because it doesn't make sense to me. Why would you like one single thing, it seems like, was the straw. It was like, okay, we can't do this, or was it a series of bad choices or not the best choices and, as you said, market factors all conspiring and this was just, yeah, straw, but this was like totally the bullet to the head.
Speaker 1:One quote here from Tristan Rayner at PV Magazine was, he says, with the switch to NEM 3.0 led to a temporary boom among customers looking to secure legacy NEM 2.0 rates and then a bust in California and he quotes with loans expensive and incentives removed, californian residential PV has been devastated. So it's like the left hand and the right hand not working together. It's a macro conversation, right for all intensive purposes. You know, put it. You would think that, putting with the reduction in the cost of solar panels and solar systems, that's been like chips, that's been like cell phones, it's like it's become affordable over the last 20 years to now, you could, you could put that on your roof and I could actually, you know, enjoy a reduced rate of power, right and of all places in California. You'd think that that would be something that they would continue to support from a legislative perspective. So we're going to have to do some more research on that one.
Speaker 2:Well, that's an interesting. Oh, it's really that's going to be an interesting one to watch. Obviously, we have our connections in the industry and those will be interesting conversations to have what they're saying and what they're hearing and how you solve it. I mean it is surprising. How does that happen when you have the backbone of a major part of the solar industry in the country? Go see it. I mean, is it an opportunity for someone else to come in and do it right? Or it sounds like they've made it impossible for it to pencil.
Speaker 1:In California, the public rate commission It'd be interesting to dig into SunPower's leverage profile and understand what their operating overhead or bottom line look like compared with other door-to-door solar providers. And maybe did that have an impact on it not being able to pencil or putting them into bankruptcy that that's probable or likely, I I hate to say because I don't know. I'm definitely going to dig into that headline.
Speaker 2:I mean it's, yeah, it's, I mean you're talking about with sun power.
Speaker 1:You know they had. They had 65 million of debt according to the article um that you know and and looking for more, more leverage. So we've talked about debt, consumer debt versus production debt. I imagine that was probably all production debt to get you panels and go and sell the program and make this happen, but heavily contingent private sector on government regulation and incentives Right Again. So this works because of government incentives. Take the incentives away, it doesn't work anymore.
Speaker 2:It doesn't work anymore, which is we've talked about that on a few things.
Speaker 1:Yes, we have it's.
Speaker 2:a public-private partnership. Do you incent? At what level do you incent? Is it a good idea? Is it a bad idea? What do you set yourself up for? Are you favoring one over the other?
Speaker 2:We've talked about yes. Yes, you are, but it's based upon certain principles and premises. And maybe you do, but you take, you take one. You take one leg out of three legs. Yeah, it falls over. Yeah, so you know, we've seen them. I mean I've. We've seen it here. I think in some small level.
Speaker 2:I've seen it personally, like on the water. You know there used to be a lot of there used, so these would be offered both locally and then there were federal incentives. The local incentives were like look, it's cheaper for us to incent you to stop using less water than it is for us to go build infrastructure, because we've got to build infrastructure to keep up with, say, water delivery, right, to go put in water-efficient systems, then have to go build millions and millions and millions and millions and millions and millions. You know tens of or hundreds of millions of dollars in infrastructure in order to accommodate more demand. And some would say they should be doing it's kind of a both approach, right? Well, those have pretty much gone away.
Speaker 2:I mean, you used to be able to get water incentives and it was a couple of 300 bucks. You know, you get a toilet, you get a different faucet, you get a different sprinkling system, you get all these things. It's like well as a consumer, like well, I will go spend money at you know a Lowe's or Home Depot or Ace or wherever, and to the economy because I'm going to get back. But it's also serving a good. I don't see them as much. I haven't seen them as much, and I'm sure there's a reason why I just know what it is. I just know that there's a while there. I was paying attention to it and there were a lot available, and the last time I went to look was just like three or four months ago. Actually, I was looking for my parents.
Speaker 2:They had put something in and we couldn't get anything anymore, I'm not surprised they weren't funding those programs anymore and I think they like. In that case, it does work. The whole purpose of it is to minimize the amount of impact you have as a consumer, and it all makes sense Other than that, here in Utah you've got to go build more infrastructure, you've got to build more reservoirs or what have you, so I get it in the power. How do you fix a power problem? There's lots of ways. You build more power, you get people to use less, you bring on renewables, so it helps supplement. I mean there's a multi-pronged approach, but now you take out solar and now I'm curious how much power was going back to the california grid.
Speaker 1:Yeah, does that? It'd be?
Speaker 2:it'd be fascinating what does that mean?
Speaker 1:what is that modeling on on what sun power's contribution to the grid look like?
Speaker 2:yeah, and what does that mean? Does that mean that anybody who's currently there it's grandfathered in or some power just as an entity? They go away, but if I have their solar panels, I'm still paying them off.
Speaker 1:Or big questions and in hindsight, a big takeaway for all of us and the friends of the show is, if we're going to be developing power and transmission, if we're developing decentralized power, we'd better be really understanding legally. We better invest our time and money and energy into the legalities of the legislation. What are the sunsets of it? Is it a forever legislation or is it something that ends next year? Is it something they can just change their minds on and go the other direction? Ends next year? Is it something they can just change their minds on and go the other direction? Because when people are building billion dollar businesses to meet the needs and then can be, I mean that to me that's. We talk about grid fragility, talk about political fragility, like just to me this seems like at the whims of lawmakers, the whole thing shifts.
Speaker 2:Well yeah, it is, and sometimes buoyed by public opinion, which may or may not be. The public opinion is public opinion.
Speaker 1:Depends upon what side you're on.
Speaker 2:You might say, okay, you're completely wrong or yeah, you're, I will. I will speak to the our space in particular. Um, you know, I, I there have been some comments locally about, uh, you know, just in general, development along in utah and you know, and I always like to go into the comment sections and read and see where people's sentiments lie, and you know, and there's a lot of like, oh well, you know, developers make this, that the other and all developers it's like yeah, but these projects you can't possibly pencil or tackle if you don't have the right kind of alignment and support from a county, municipality, a state. Yeah, why 100? As a developer? Why would we? They say, well, you're going to make money, okay, okay, sure, but like on one of our projects, why would we spend, let's just say, nine figures building out a piece of infrastructure that everybody's going to take advantage of, that we're going to have to pay for and we might not ever see the return? Matter of fact, I can tell you we're never going to see the return enough in order to cover the cost of that. And that's fine to say to me.
Speaker 2:Actually make money on it, yeah, but we understand, it's a critical piece of infrastructure that has to be built. Well, that's what we're talking about. And it's taking time, like you can't. It's neat to say, oh, developers, there's this amorphous, everyone's just going to make money, but you can't, so you're not going to build that. But you realize the community needs it. Yeah, you realize that a project like, oh my gosh, this project would actually work if this thing, and then if we can work to help build that fantastic, we'll solve a problem not only for us but for others in the future. And that's where I think those things you know there's just not necessarily enough awareness of, like, the scope of a project and the value. It's just assumed that, oh, somebody's making money and somebody's getting screwed.
Speaker 1:Well, there's a. There's a. You know, I think my deepest disdain around that general attitude of developers is there's a. There's a gross misunderstanding of the risk tolerance that a developer has to develop, and you've got to effectively push through to develop anything meaningful. For example, just because we get permitted to build something does not give us a blanket immunity to the vicissitudes of the markets. The capital markets can change, the housing markets can change Power. All of these things can turn on a dime, and if we're 100 million deep into building something that we got permitted from the city on, the city's not bailing us out, no. So the question is to all these loud opinion makers who's taking that risk? Yeah and oh, is that risk not commensurate to the amount of money that we might make if? If we're successful in pulling that off? Right, and I'd say yes, I I say that risk and reward are a direct correlation.
Speaker 2:Yes, and as a developer, we take risk that people just can never fathom, in most instances Significant risk, significant risk and sometimes, and in many cases, significant risk to do things that, yes, we will benefit from, but in this case, everybody after us and a whole community could benefit from. But in this case, everybody after us and every and a whole community could benefit from, and we, and that's the whole point is that it's it's not just us, but someone's got to actually go do it. Yeah, yeah, which is great, I'm happy to lead the charge, but, understanding the nuances, that it's not to your point. It's not just an easy oh, oh well, they're going to make this. No, you've got to make this work and, as a result, you're not going to get certain things done unless you get community involvement. We're going to have a broad-based audience here, but we're sitting right now in downtown Salt Lake City.
Speaker 2:Downtown Salt Lake City has changed over the years, why? Well, there have been some considerable investments made. That downtown wouldn't be the downtown of today. And what's happening today, even with the pandemic, if not, I will say for, say, the LDS Church coming in and investing over a billion dollars in a mall and doing other things. I mean, they obviously have a stake down here, but you see the scale of what it took to actually put in the capital in order to make this happen. The city wasn't going to do that.
Speaker 2:Currently, there's a big debate going on about an entertainment district with the owner of the Utah Jazz, what they're going to do, and it's created quite a debate right now on about an entertainment district with the owner of the Utah Jazz and what they're going to do, and it's created quite it's kind of it's a debate right now and it's you've got, you know, the billionaire coming in and saying I want to do this, but realizing that it's a huge risk, oh yeah, and in order to do this the right way, you've got to get everybody in board. And you know there are all these sides saying, well, he just wants you, yeah, but if you understood the other side of this, you'd understand that this is the whole thing's a giant risk. And in order for maybe you know there's some reasonable concerns on both sides, but you realize that it's not you don't just change the complexion of a city and improve a city or invest in major infrastructure projects without doing it. It's gotta be, it's gotta be the collective.
Speaker 2:Yeah, you know, at one time the gateway was a giant project, absolutely, and that goes back to the nineties, of you know, having some foresight to say we've got to expand downtown and we've got to do these things. Well, that set us up for, you know, the gateway led to other things and obviously it was a showpiece during the Olympics and there were lots of things, and so all these little things contribute but you don't have a robust downtown. Some would say maybe too robust. I would say I just didn't change without having some of these big investments come in.
Speaker 1:Well, the other interesting thing, Dave. Most people in Utah may be aware, but the Gateway went through bankruptcy.
Speaker 1:It has changed hands several times. Yeah, a couple times, yeah. So the guys that developed that did not come out of this owning it. Later, 20 years later, they've been recycled, and then the next owner's recycled, and the next owner's recycled. Until now we've got someone new trying to apply new programming to it. So to your point of risk, yeah, just because you got permitted, just because you got financed, just because you built the damn thing does not mean it's going to work to the vicissitudes of the market. Right period.
Speaker 2:Always going to be a risk as a developer, that's right um, but you know, but you would see the value and I mean I, I go back and again, I think I've seen both sides argued you go back to the delta center, yeah, and the original delta center. I mean, yeah, you know, back in larry miller days and this is before, and what the? I mean I can see as a, as a lifetime, lifelong resident of Salt Lake City, utah, of what the jazz meant to the state and to the city and just all the businesses it impacted.
Speaker 2:Everything that it did. I'm sure somebody could put a number on it, but the numbers far, far, far exceeds anything that was ever spent on tax incentives or anything else, because it really did change the profile of the city and I would argue that it changed it for the better, absolutely Changed the whole state in fact, and so I understand why. But it was a huge risk and it still took some city support and all these things to make it happen and it still was not a done deal. This was not a okay, we're all on the, we're just doing so well, right now it was still always a risk, even with that support. But the community and that's a great example like the community benefited and we should all like go. Yeah, the community benefited huge. You don't even have to be a jazz fan to understand the value that the jazz brought to utah at large, oh yeah yeah, absolutely we're.
Speaker 1:We're getting close, we're edging up on time, but I gotta drop this, this last headline on you, because this was also a really fun one and I can cover it in a minute or two, all right, okay, we're going to wyoming and we love to talk about way we do in wyoming yes, governor gordon, why so the headline gordon?
Speaker 1:Wyoming can make carbon capture work if feds would get out of the way. Now this is from the Cowboy State Daily. This article came out on the 17th, so two days ago, so you know you ought to read part of it. I will so. In Gillette, wyoming, campbell County, commissioner Jim Ford believes capturing and storing carbon dioxide emissions would be commercially applied in just a few years if politicians would just get out of the way and let industry do it. If it's just up to the engineers and the operations folks, it could be ready in a couple of years. He said you start getting the politicians involved. It's going to take longer. Now they're talking about the Integrated Test Center, the ITC, in Gillette, which he describes as the best location in America for testing large-scale carbon capture and usage. The reason I love this article so much was because they've won big awards like the carbon x prize for testing and demonstrating here at the itc. But they're they've applied this technology to the dry fork station coal-fired power plant 10 miles north of gillette. Okay, and what they're doing is they're using technology to dramatically reduce the emissions of a coal-fired plant.
Speaker 1:We've talked about CCTs, clean coal technologies. So when I step back and I read this article, I evaluate the pernicious effects of media on the legislators who are holding this. We got to be renewable. We got to be renewable now. It's the only path. It's myopic and stupid, but you have legislators that believe that and you have communities that believe it. Look, supporting Wyoming. If you can have a coal-fired plant that doesn't produce emissions or produces emissions that are on acceptable standard with other types of energy, then why not do that? Why not keep it? Why is there such this driving commitment to renewables? We've talked about it. It's our official position.
Speaker 2:And we're committed to it. The irony though, the more you get in the way of this stuff, the slower all of this happens. Yeah, if you could do this, if you can do this better, okay. Then somebody said, well, you're going to stick with coal longer? No, you're going to, because those are still expensive to put these things on. You're going to say, great, now, coal and a plant that has been producing let's all agree, producing some nasty shit, historically speaking, that yeah, we don't necessarily want our and our, our kids to grow up around it. If and that's a good thing, so let's fix that. But if we can continue to use that plant and, as we talk about the grid and and, instead of having to shut something down and bring it online and we're talking about decades long decisions, yes yes, decades upon decades.
Speaker 2:So then, all of a sudden, now we've got a, now we have a power source that can be clean, while all of these other things because there's plenty of market demand Correct, and because there is absolutely market demand, it's good business sense, there's all the things to actually build these other things out. But now the problem becomes you lessen the enormity of the power grid problem because you're saying, okay, we've got these things, let's continue to use those. Someone said, well, yeah, but you're still using non-renewable. Okay, but it's going to be a process because the world is moving to renewables, why Prices will come down Eventually. It is an inexpensive way and there's a lot of cost up front, but the downside is not downside the the end, after you get through those costs, it's a really good upside because then it really pencils and it's great. It's great for everybody and it works.
Speaker 2:But why not use these things that you have? To your point yeah, it, and I think what it's going to do is it's going to delay everything so we will get to renewables slower. Yes, um, if, if we take things offline and then are forced to go and do other solutions that we don't want, because you're going to run into what again we've picked in California because it's like, oh, we want to be completely renewable, but they can't solve their problems without actually pulling energy from other states that are not from renewable sources. Why? Because they can't solve it. So maybe you could solve it. If you say, okay, we need a mix, again it comes back to the what is the mix you need, instead of saying, oh, we just we're going to not face this. If we can do this, if we could actually solve this and it sounds like they're solving it, great, and you can make it clean. Use that for as long as it's financially feasible right.
Speaker 1:Listen, yes, yes, listen to this quote from Governor Gordon. Bless his heart. Gordon says weaving through the federal bureaucracy on carbon capture is no easy task, especially when trying to navigate the mixed messaging coming from President Joe Biden's administration and the Environmental Protection Agency. Gordon said the regulations being put into place at the federal level on coal and carbon emissions will correspondingly inhibit the development of carbon capture technology into the future. To your point, dave.
Speaker 1:On one hand the epa has generally supported carbon capture projects, but on the other, the biden administration has been very anti-coal, passing a rule earlier this year that would end coal production in the Powder River Basin by 2041. In my mind, they intentionally created that gap. Gordon says those are fighting words to make the accusation that they've intentionally created the gap, but I think it would be easier to swallow this to say left hand right, not supporting the macro plan. Uh, and and these attitudes will change. There'll be new rules with the new administration in in just a few months from now. So it the political environments that impact the legislation of things locally is a huge risk to anyone trying to develop, develop the the spectrum of energy and transmission, because these are decade-long.
Speaker 2:These are decades-long things. That's right and and and you need serious people saying, okay, how are we going to solve this on the macro level? And you really need to be it's a weird thing, it's almost it needs to be above politics yeah, both sides, yes, it really does. And get into that area where you can have sober conversations about what it really takes, and I think that's where the politics just drops away and you get into the smart people in the room saying how do we solve this, like legitimately, how do we solve this the best possible way with the least amount of impact? This, like legitimately, how do we solve this the best possible way with the least amount of impact? And while keeping these things, while keeping the market free, yeah, as free as possible, yeah, and keeping it open, and letting private industry do what private industry does best yeah, how do you incentivize them appropriately? And but those, those, those are what I would hope for that those conversations are happening. There's no, there's no group.
Speaker 2:That's as far as I know, I mean it's not happening.
Speaker 1:My final thought is if we were only trying to tackle moving to renewables, that'd be one conversation. That'd be an insurmountable problem over decades and decades. But add AI and data centers to this mix, it's just a fantasy All the energy has to be a solution right now.
Speaker 2:All the solutions.
Speaker 1:All together, all together.
Speaker 2:And I think if I were charged at all, I'd say, okay, yes, we've had industries that have probably been very dirty and I would argue that they probably haven't done themselves some favors in the past. But you can move them to be very, very yes. Yes, and I think I think you can incentivize them appropriately to get there, to where OK, let's use that, let's not kick them offline. You're talking about jobs and families and things and infrastructure costs.
Speaker 2:And it's not easy just to just to set up a power station. I mean, this is a that in and of itself could be a 5 to 10-year project, so why take that out as a possibility? When we need to grow, Then let's figure out how to connect the oh, I don't know two petawatts of renewable energy that's sitting out there.
Speaker 2:Let's solve that problem, because then all of a sudden, we have a really, really renewable mix of energy in America and I think everybody's going to be happy about that, while not killing off the industries until they naturally convert and progress.
Speaker 1:You think about what we're doing in Guernsey, with the rail and all the infrastructure and Wyoming being such a major coal producer. The impacts of going anti-coal are far-reaching and will deeply impact communities that have been built on coal and rail. And so, yeah, it's got to be and-and.
Speaker 2:And it's transitioning, we know. I mean, like there are more jobs now in renewable and those might be similar jobs that you can transfer. This doesn't happen overnight, that's all, and so you can move from one industry to another. But again, this doesn't happen overnight, that's all, it's just it. And so you can move from one industry to another, but again, these things don't happen overnight. So if you kill off an industry too quickly, you're going to have problems before letting another industry sort of come up in its place. And I mean it is, I mean it just is. It's why we talk about it a lot, absolutely.
Speaker 1:Well, thanks, we covered a lot.
Speaker 2:We did, that was awesome, that was fun, that was fun. We'll do it again. We'll talk some headlines and things as we go forward. We'll play with the mix and see how things go.
Speaker 1:Thanks, guys, for joining us on the Frontier Line, on the Frontier Line, Until next time.
