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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
US-China Energy Race, Mass Capital Exodus from NZBA & NZAMi, Anthropics Open Letter to Trump, National Security at Stake
welcome back to the show, guys hello everyone, welcome to the frontier lines. Another episode.
Speaker 1:Some great stuff to talk about today. As usual, it's been an interesting conversation, as we've been watching this whole america china race and discussing all of the the tentacles and implications that that has from an energy perspective, and then all of kind of the tentacles and implications that that has from an energy perspective, and then all of kind of the offshoots beyond energy, and so I wanted to kick it off today with an article that Dave's going to bring to the table for us.
Speaker 2:Well, and there are a number of articles on this topic and I think it's particularly relevant because, as President-elect Trump takes office, as President Trump here this next week, depending upon when this airs this has been, I think, one of the most. I mean, there's lots of talked about issues, but this is one of those issues where it just has, as you say, tentacles. It has implications across so many sectors and, you know, for the frontier line, you know we're talking about energy and infrastructure and all the things happening. You can't get around talking about AI, the implications of AI, the implications of energy, everything that we talk about. How do we build our energy infrastructure? Are we staying competitive all the way to. You know, what are we doing with AI?
Speaker 2:All of that gets wrapped up into this conversation around what's next? And what was interesting to me in the last month or so, and just most recently, we've seen the Anthropix CEO come out and basically pen a letter, an open letter, saying, urging actually, trump to win AI versus China, echoing what Sam Altman at OpenAI said about a month ago. And then there have been some independent writers also saying the same thing, so you have two emerging. They're tech giants now. I think they're, I think, emerging meaning like they're not done.
Speaker 1:growing is kind of my point, I agree.
Speaker 2:Yeah, really saying, you know, being what some would call hawkish, and saying we, we have got to double down on this. We've got to secure our and continue to make sure that you know chips, the chips we're manufacturing, aren't going across to China. And then, on the energy front, we're doing all the right things, the data centers. We're doing all the right things to encourage that industry, as we talk about all the time here, to continue to flourish and grow and removing obstacles so that we can stay competitive and I say not stay competitive, we can remain at the top, so we don't lose that competitive race and cede it to China. As you brought up, wayne, as I've talked about China's building energy very fast, absolutely, and underlying a lot of this growth, as we would say, is energy.
Speaker 1:Well, it's interesting too, because whenever we talk about China, they're just playing by a different playbook and a different set of rules entirely, and specifically in the energy space. We're seeing them, you know. Yeah, they're building renewables, they're doing lots of solar over in China, but they're also building a record number of coal-fired plants. So you know, they're not on the same standard that so many folks in the US are trying to kind of box us into. And this is going to be an evolving conversation because I've got some interesting articles where this all ties together. But the whole playing by different rules and the impacts on energy and the way China looks at this and the way we look at this. I'm grateful for, you know, anthropix and Altman and these guys to be helping this administration come in wide-eyed, open-nosed and ready to look at this in an aggressive way to ensure that we stay in that elite status in the poll position.
Speaker 2:That's absolutely right and you know a couple of things. Come up with notes that they you know, they comment, they say you know the you know the restrictions on chips that started under the Trump administration, expanded under the Biden administration, need to stay there. Biden administration need to stay there. Depending upon what side of that argument you're on, or if you're a company who wants to manufacture and open your markets, well then you want to open sales, so that's great. But if you're looking from a stability and a security point of view, that has given us a distinct competitive advantage that has helped us.
Speaker 2:They will go on to say that any of the chips they've seen that have come out of China are subpar, substandard. They're not. They're nowhere close to any of the chips being manufactured. And ultimately, under that entire umbrella is, um, they, they. I mean Mario uh said you know the incoming. I think the quote was uh, the nations that are first to build powerful AI systems will gain a strategic advantage over its development period, end of story. And you don't want a totalitarian regime controlling AI. More voices, more people in it. That has some say in how this goes out, because it is going to be an incredibly powerful tool, probably changing the way all of us do everything. That said, they hedge on that and they say we need to be very careful, and that's why one of the many reasons we need to win this, and that's what's at stake, and if we don't, then China will likely beat us and no one knows where that goes.
Speaker 1:And that's so defamatory. In Department of Defense and AI we've talked about nuclear assets in military nuclear submarines and and how ai can impact and enhance all of those things and some of these new, you know, drone, uh armaments. I mean the. The implications are almost impossible to calculate yeah if we lost the footing right in the front of the ai?
Speaker 2:space. Breakthroughs in medicine, energy, economic development energy, energies, yeah, and as you just said, military preeminence.
Speaker 2:All of those things will benefit at uh from ai and we will be in a place some would say that where we might have ai saying, okay, how do we solve new? How do we something that would have taken years to do? Uh, to spin up a new medication, a new thing to treat that could actually be solved very, perhaps quickly, or at least get that two years or three years of research work out of the way so they could get into development and testing really quickly. That's what we're talking about and those are some of the good things coming out of AI. There will be those out there that say there are lots of bad things coming out of AI. There will be those out there that say there are lots of bad things coming out of AI. You know, in history I would say I would always get hedges, say embrace the industry, figure it out, minimize the issues and go forward, but don't give up that fight, don't give up the position. You know, I think you know the American car industry helped drive this country Similarly. I mean, cars became a staple for this entire planet and we drove that, yeah, and that buoyed a middle class that did a lot of good things. We could also say you know, there will those say, well, yeah, but it did this, it did this. On the whole, though, it advanced our society, and that's what we're looking at right now. Even if you are one of those listening that doesn't think that AI has a lot of benefit. I would urge you to look at that differently and say, okay, maybe so, but I think there's a lot out there that it's already proving out that it's going to help us do better.
Speaker 2:No-transcript. We can not stop. Yeah, now's not the time. Uh, we have to support this industry. We have to stay ahead of our competitors, because they have shown time and time again not the Chinese people per se, we're talking about governments and leadership They've shown a dis, you know. They've shown that they they will stop at nothing to compete, and we we know damn well that you know on on any on any given day corporations in America, infrastructure in America we're constantly under attack. Maybe we're attacking them, maybe not, but we have to play against them, because they play the long game, and there's a reason. They've been around for a long, long, long, long time, and we need to think in those terms about what does the future look like, and I think that's where Altman and Morrow, that's where they're going.
Speaker 1:Was there anything in particular out that article quotes or anything to share with the listeners?
Speaker 2:Yeah, I mean I will. I mean I'll talk, I'll actually read part of the article. You know this is actually part of the letter. This is an open letter and I will. Okay, so this is so I'll. This is starting from line number one from Dario Amadei.
Speaker 2:The CEO of Anthropic Trump can keep America's AI advantage. Legislators on both sides of the aisle recognize that the US must lead the world in artificial intelligence to preserve national security. This gives the incoming Trump administration a chance to establish a historic advantage for the US and the free world. Ai will likely become the most powerful and strategic technology in history by 2027. Ai developed by Frontier Labs will likely be smarter than Nobel Prize winners across most fields of science and engineering. It will be able to use all the senses and interfaces of a human working, virtually text, audio, video, mouse, keyboard control and internet access to complete complex tasks that would have taken people months or years, such as designing new weapons or curing diseases. Imagine a country of geniuses contained in a data center. The nations that are first to build powerful AI systems will gain a strategic advantage over its development. Incoming Trump administration officials can take steps to ensure the US and its allies lead in developing this technology. If they succeed, it could deliver breakthroughs in medicine, energy and economic development. It could also extend American military preeminence. If they fail, another nation most likely China could surpass us economically and militarily. It's imperative that free societies with democratic oversight and the rule of law set the norms by which AI is employed. They won't be able to do so if totalitarian governments pioneer these technologies.
Speaker 2:Export controls, which ban shipments to China of the high-end chips needed to train advanced AI models, have been a valuable tool in slowing China's AI development. These controls began during the first Trump term and expanded under the Biden administration to cover a wider range of chips and chip manufacturing equipment. The controls appear to have been effective. The CEO of one of China's leading AI firms recently said the main obstacle he faces is the embargo on high-end chips. China is trying to work around US controls, including by using shell companies to set up data centers in countries that they can still import advanced US chips. This enables China to train its AI models on state-of-the-art chips and catch up with US competitors. The Trump administration should shut down this avenue of circumvention. One solution is to ensure that data centers in countries that China might use to skirt export controls are allowed to access US-designed AI chips only if they adhere to verifiable security standards and commit not to help China's AI efforts. Ai hardware experts should be tracked. We should also ensure that frontier AI remains under our security umbrella by keeping the largest and most critical AI data centers within the US and its closest partners.
Speaker 2:Skeptics of these restrictions argue that the countries and companies to which these rules apply will simply switch to Chinese AI chips. This argument overlooks that US chips are superior, giving countries an incentive to follow US rules. China's best AI chips, the Huawei Ascend series, are substantially less capable than the leading chip made by US-based NVIDIA. China also must not have the production capacity to keep pace with growing demand. There's not a single noteworthy cluster of Huawei Ascend chips outside China today, suggesting that China is struggling to meet its domestic needs and is in no position to export chips at a meaningful scale Because of America's current restrictions on chip manufacturing equipment. It will likely take China years, if not decades, to catch up in chip quality and quantity.
Speaker 2:I'll just stop there, because they continue to go on, but I think that gives our listeners enough of how direct and serious this letter is. Yeah, and I think he makes a very, very, very solid case for what needs to happen. There will be some that argue about the training of data sets and do we really need, you know, is it really chips? And all these things on the edges of whether or not that's a bit pronounced. But I think, you know, I think it's good.
Speaker 2:That's why, and that's why I wanted to talk about it today, because as we go into this new administration, as we look across all of the issues, and if you look at, you know a lot of media out there they're not talking about this. They're, I mean, it's, you know, most of the media out there under the umbrella of mainstream media. And we're talking. You know I'm going to I'll throw Fox into ABC, nbc, cbs, fox not necessarily Reuters associated presses.
Speaker 2:You know these big organizations that are following, you know, just doing news. They're following the machinations of what's going on on a daily basis. They're not talking about this stuff as much as I would like to see it. Sure, because this is the these, this is the issue that I think is going to be one of those defining issues over the next couple of years of like, where, where, what are we doing? And this is going to relate to everything, wayne, that you and I do on a daily basis and power infrastructure and data centers and infrastructure development and part. All of those things that we're trying to tackle are related.
Speaker 1:Well, I think he's absolutely spot on with the letter as well and grateful that he's taken the urgency and the time and the thoughtfulness to share that with the administration and, kind of, you know, raise his hand and sign up to be consulting, to make sure that this mind is all over the place. When I hear what you just read, my mind goes in a hundred different directions. But you know, we're sitting here watching Los Angeles burn. We're seeing, you know social media and the news are awash in coverage of conspiracies and facts around the failures. And yet you know, china's over here with advanced heavy drones fighting fires on commercial buildings 100 stories high. I mean, they're far, far ahead of us in so many things already that letting ai slip it would be a catastrophe. And that's not even before we get into some of the deeper dialogue on Chinese global relations in Afghanistan, for example, actors who are alliances with China, who this technology would inevitably fall to, and then recognizing how that can really be a danger to us. I mean we have, on good information, reports just this week of confirmed over a thousand active terrorists inside of the US from mostly Afghanistan, and these are from CIA resources that are, you know, confirming. You know some of the things that we've uncovered and pointing to you know New Orleans, pointing to you, know the January 1 incidences that we talked about on the show.
Speaker 1:But imagine if some of these bad actors had any more. I mean, they already have access to weaponry, but imagine if they had access to be able to utilize AI in a way. And everyone, I think, has been scared about AI. And you talk about the Terminator and you talk about some of these sci-fi movies and like ai becoming the predatory kind of entity. I don't see ai becoming its own predatory entity in itself, but bad actors controlling it certainly present a threat. They do. So I think he's, I think he's absolutely spot on with that. Yeah, they do.
Speaker 2:They do, and I think we will continue to see that. And now I mean on the deep fakes, and I mean if we're looking at just on, oh yeah, if you look at the technical connections, meaning like, okay, let's forget about bullets and bombs and fires and structural damage in terms of setting something on fire, blowing something up, but if we start talking about control, command and control systems and control systems of water and electricity, those will lead to those things. You know. Again, having spent a little bit of time talking to people in the, you know who are in the defense industry and who worry about these things and infrastructure, I think it's one of those things that they will tell you keeps them up at night because it's it's not a, it's sort of the not a matter, it's not a and it's not to be a harbinger of bad things to come. It's just they have to prepare. There's like, look, we have to prepare for some of these things. This is what our jobs are, is to prevent some of this stuff. And if people knew how easy it might be to disrupt, then there might be more interest in making sure that we shore some of these things up. And you and I know just in kind of the space we've occupied, that especially. You know, hearing and seeing talking to people in the our industry about how susceptible parts of our grid are, um, and how easy it would be to create chaos all at once. You know, uh, if you wanted to, if you wanted to and I mean it doesn't now I'll take a knock on us as, as you know, kind of as americans, sometimes we react and we get scared really easily. And I don't think social media helps and we see this across all kinds of events and I think I think just media in general sort of exacerbates it.
Speaker 2:You know, we think these things are way bigger and big, problematic than they are. And then some of them are. So I will, I will use an example from a number of years ago. You know kidnappings, you ask anybody back in the day around the Elizabeth smart kidnapping, they, they, every. You know anybody over that time, over about 45 years old, probably thought that kidnappings were a thing that was happening all over the place Fact actually down, sure, but the attention given to them was so, so much.
Speaker 2:And so what we see is we see a nation that, if something bad happens, there's so much energy that goes into focusing on these things. That it just it. We're in constant fight or flight and so sober thinking in reality and like looking at what's really problematic is sometimes hard to do. But now imagine, imagine that you take out a few big cities, you take out and I'm talking about take out, meaning like electricity, yeah and you take out some waterways or you do something to the waterways, where they are now polluted and people are getting sick. Just on the panic that we normally have. Can you imagine the panic that would take place in this country? Oh, overnight, overnight, Absolutely.
Speaker 2:Overnight, and it would be 24-7 in our faces streaming, and the world is coming to an end and that's why I say is that it's not hard to get us panicked.
Speaker 1:Yeah.
Speaker 2:And it's also not at least it doesn't appear to be hard on a bigger scale. If you really want to, if we have an interested party that really wants to wreak havoc, they will. And then they have Some of the stuff we hear about, some of the stuff we don't. So, again, not to be harbingers of like, oh, the world is ending coming, sky is falling, it's just. This is stuff that we just need to be cognizant of and then aware of, and it might be infrastructure, it might be deep fakes, it might be stuff where we now have people being emulated in not so good ways, and all kinds of things, and just all kinds of stuff. And that is AI. Does that mean you put AI back in the box? No, it means you figure out how to solve it, protect ourselves and move forward, and that's what I think underlying that. Going back to the article, that's what he's saying. We need to stay ahead of this.
Speaker 1:Yeah, well, it brings me to another article that I I'd read this morning from hard energy. Um, and I'm going to make a segue here about the race, the great race. There's more than one race happening at the same time. Go figure this. The headline here from hard energy is BY bring your own power, the great AI race for electrons Starting off here.
Speaker 1:Data center developers are scrambling to secure 24-7 power, are calling on US producers to meet demand, as natural gas offers the quickest way to get more electrons into the taps. Quickest way to get more electrons into the taps. Um, what's interesting about this and we're talking about china is we see the desperation of these hyperscalers. We see this frenetic race to find power, and that's signaled by, you know, the, the bigs trying to buy old nuclear technology, the Palisades plant and the Three Mile Island nuclear plants to fire them back up. That's desperation to get power. So what stops a desperate corporate juggernaut from going to I don't know, egypt or some other country, like you just said in this letter, because they can get power there, that's right and set up the data center there? We're reading all about BlackRock funding data centers all over the world, all over the world, all over the world. So the to keep containment on this technology and these chips seems like a very, very high, high, heavy task.
Speaker 1:And and I think I think ironically it's probably not just openly China that that's possibility, but also the desperation of us companiesS companies trying to be I'll just put it in the terms of this article here Google, meta, microsoft, amazon and others embracing, realizing this need to release their own generative AI to compete in the adapt or die space and avoid becoming IBM. They recognize this is a race and there's like five or six major companies Microsoft Azure, you know Google, everyone's got their own, you know Elon's got Grok. I mean, they're all developing their you know AI models and their AI facilities. Right, and there's a race within that does that niche space, yeah, and so what that says to me is it is, it is paramount in order for the U? S to to win this race and protect AI. We've got to be able to do what Trump is signaling, what our Utah legislators are signaling and that is what we've been saying on every episode More of and all of the above expand our energy production.
Speaker 1:We have to meet the demands of these hyperscalers and all of the secondary data center consumers that have data needs that are growing with the daily operations and functionality of everything that we all use businesses and personally, phones, computers, cars, all the things. So again, energy being the foundation to support the ai revolution is a humbling for us to be on the tip of the spear and be in and be positioned uniquely for this transition. To be developing private, private, private, decentralized power yes, very exciting uh indeed, and I will, very exciting, indeed, and I will.
Speaker 2:Your pivot has led to a nice little dovetail. Excellent, two headlines that I saw back to back that I thought that's an interesting juxtaposition and I think underlies a little bit of this, and I mean a point I would like to make. So the first one was UAE launches world's first renewable energy facility for 24-7 power. That's interesting. Yeah, gigawatt, older field with best Combining solar power and advanced battery storage. Okay, yeah, that's the only way. It's the only way. I mean you could do it. I mean you could do it. You could do it some other ways, but they are going there. So you have an area of the world that obviously is steeped in oil and gas saying, well, this is a diminishing resource. Eventually We've got to at some point pivot, and perhaps now is the time, because of costs and all these things, because ultimately it's still going to cost to take you have to pull this stuff out of the ground. Let's get to a point, to where we're set up once we pay for the infrastructure and then it's maintaining. At least that's the grand vision, okay, so here's the juxtaposition. Okay, texas legislature takes aim at renewable energy expansion with proposed regulations. Ah, so what I took away from that and that was basically Texas are proposing more control on renewable installation and rapid growth, and I look at it as like well see, I think that's a bit short sighted as well. I think all of the above you, I think we need to embrace all of it.
Speaker 2:Some would argue around the line saying, well, you know, let's stop incentivizing. Well, we incentivize both the oil and gas industry and renewable industry, so everybody's got their incentives. Generally speaking, I just think it has to be. You know, we've talked about that, you just said it. It's got to be don't put obstacles in front of power production. Right now, communities can have demands. You can talk about air quality.
Speaker 2:On coal, and I think I would like to think most, you know, eight out of 10 people would probably say yeah, if we can move away from coal, probably a good idea. Yes, could we embrace cleaner coal? Great, is it really clean? All of that? Yeah, sure, we'll do it if it's clean. But we also are facing all this demand coming in and you've got to be able to, as we started, as we started out this conversation, if you want to stay ahead on the AI race, you've got to find a way to stay ahead of this Um and just putting our heads in the sand and saying, well, we're just not going to do it is not an answer. No, it never. It's not an answer. It's far for failure. It's the it is that's choosing failure. It's choosing failure. So let's choose success.
Speaker 2:We know we've talked about it on previous episodes we have, for example, we have a lot of renewable energy right now that's not connected to the grid. Right, let's solve transmission and connection and interconnection. Those things will help us actually solve some of these fundamental issues more than just putting an obstacle in the way. Now, if this comes in Texas, if it's coming at the expense of, let's say, well, we're doing these things in renewable while at the same time restricting the growth of other things, I just can't imagine Texas restricting anything. I mean it's the oil and gas industry. They're not restricting the growth of other things. I just can't imagine Texas restricting anything. I mean it's it's the oil and gas industry. They're not restricting anything. And I don't think solar, I don't think solar or wind was getting in the way.
Speaker 2:And you know, you and I have both been big fans of Landman. Yeah, absolutely Huge fans of Landman. Taylor Sheridan, we want to interview you. Just saying, just putting that out there. Anybody in the world, anybody know Taylor. We want to get him on the show. Yep, talk about all the things. But you know, they made a very interesting point, so much so that I actually went and looked it up, and where Billy Bob Thornton's talking about, he's like well, yeah, we're in the middle of nowhere. How are we going to power out here? Sure, the way we're powering our oil bumps is we got solar.
Speaker 1:That's the only way this is working.
Speaker 2:Yeah, you're not going to transmission lines all out in the yeah, well, yeah, we need some form of like this stuff just to help us do what we need to do VRs. Yeah because we can't get line power out here. Well, that's been kind of, if we we can't get line power a lot of places and so and there's been a um, shall we say, non-commitment commitment, non-commitment to get this solved grid and they need yeah we here in the west and here, you know, yeah, which we've been, you know, we, I guess.
Speaker 2:What is it? 10 years ago they authorized a high transmitter. 15 years ago authorized a high transmission line through the central part of utah. Yes, they have yet to build, you know, one foot of it. Yeah, those are some issues, so that's why I thought it was interesting. So you have one part of the world that is also oil and gas who's saying no, no, we're going there because we also recognize this as a diminishing resource and we got to eventually switch over. Even though we're going to have it for a while, we still want this. And then you have another part of the world who's saying no, and you know, I just think that's interesting and I think, I think and I think I don't know if you share I think it's in all of the above, we have to look at all of the modalities of energy and look at the right kind of mixes for the right area.
Speaker 2:And look at the right kind of mixes for the right area, and there's not necessarily one solution for everything. It's, you know, where are you geographically? What can you possibly utilize? What's there naturally? Here in Utah, we have access to natural gas. We have access. I mean, obviously we have a lot of solar capacity or ability here. We also set on a lot of geothermal. So we're, you know we're unique, so take advantage of it. That might not be the same story as if you go up to Montana, yeah, or if you go up to Washington State or you go back to Indiana.
Speaker 1:UAE's got land and sun that we really don't have in the US by comparison, that volume and that scale, yeah, and so it makes sense that makes a lot more sense.
Speaker 2:That makes a lot more sense. I and that scale, yeah, and so it makes sense. That makes a lot more sense. It makes a lot more sense, I still think. I mean it's a lot of solar there's a lot of solar that's a lot.
Speaker 1:Yeah, I still don't love the density. I really feel like you know, solving this comes down to what is the best generation for the bot, what? What is the most dense, efficient and air quality? It's in there. It's in that stack. It's probably the fifth or sixth thing on a stack of ranking priorities. If I could just read a couple of the final paragraphs. Back to this hard energy. Oh, this is okay.
Speaker 1:There's kind of a second segment that continues the flow of this and it's a subtitle Blindsided Utilities. Okay, what? I'm just going to read that. What the seismic wave OpenAI made formed a tsunami of data center power for generative AI. That is now shocking US utilities and natural gas demand forecasts with 10 gigawatt thunderbolt upon thunderbolt. Megan Rouge at Bain Company partner reported in October the late 2022 breakthrough in generative AI and the ensuing data center boom blindsided utilities, just as demand was also rising because of repatriated manufacturing, industrial policy and vehicle electrification.
Speaker 1:Eric Peters, the CEO and CIO of Coinbase Asset Management, wrote this spring that an entrepreneur told him every day I'm surprised by how fast power consumption is growing. Take any application, add AI and you need 7 to 50 times the compute power. Ai is a black hole. It'll suck money out of everything else into its vortex. The arms race between tech industry giants is a 20 on a scale of 1 to 10. And it goes on and on, talking about NVIDIA's new Blackwell chips, comparing that to the Huawei Hopper H100s and the power consumption.
Speaker 1:What's interesting is this and you can jump in here where you like but the other article that I was going to bring to the table today was more on BlackRock. There's such a high focus with BlackRock because they have 11 trillion under management. Anyone saying they don't move the needle in all of these sectors would be wrong. But the headline really caught me. Really caught me. Blackrock exits net Zero Alliance following Wall Street exodus.
Speaker 1:Holy shit guys. Yeah, I didn't expect that, because I see BlackRock as a pretty left kind of, pretty forward kind of. I mean, they're an anomaly in a song. I think they're the biggest right. But to part ways with the biggest climate investor groups is, to me, is shocking. It underscores how politics and this focus on global warming and climate change has impacted policy and how now we're seeing this is another signal to the great transition, because it was all fun and games and we, you know, developing all the sustainable and we're going to fight climate change and all blah blah blah. We've been doing that for 20 years, but now that we've got this new, unprecedented power spike, if you're going to make money in this space and you're going to meet demand in this space, all bets are off that the the whole sustainability regime kind of needs to be reinvented. In exchange for higher efficiency, higher density and more faster.
Speaker 2:Right. I don't have a lot to say to that. I really don't. I mean, it's not inaccurate in my take. From what I understand, we understand to be true and that is, I think it was a. I think so.
Speaker 2:In the last 20 years, I think we've moved the needle there. There there are a lot of jobs and there's a lot more jobs in green now, uh, even probably more so than oil and gas, and we can say you know, we're, they've moved the needle, you know, I think. I think the last number I saw it was like 40% of our energy. Right now the us has come from sustainable sources. Is it minimizing some of the other large impact? Yes. However, it all becomes an issue when you need more, like how do you get there? And then it starts to strip away dreams for all. We'll just do this. Solar was a is a marsh. I mean, obviously we get a ton of energy, but the efficiency of solar is just not there, right? And there will be those in the solar industry saying it's coming, it's coming, it's coming, we're getting better, we're getting better, higher efficient, higher efficient panel.
Speaker 1:We're advancing this. We said posture down.
Speaker 2:Yeah, the efficiency has got to go through the roof though. Yeah, in Get that toward the density To get any density out of it, right yeah. So then you start looking it's like, okay, well, that was a journey and we're there. Does it make sense to use solar Absolutely when it makes sense? Yes, is it the panacea solution to everything right now?
Speaker 1:No yeah.
Speaker 2:I mean I remember Elon even saying, suggesting like one time he said you know, if we build I think it was like 100 miles by 400 miles in the Nevada desert we could power the US and we probably wasn't wrong Like one giant massive project, also a giant massive target.
Speaker 1:But that's a whole different story.
Speaker 2:We'll just take out the entire grid all in one location, talk about centralized, but it is one solution and there are lots of solutions, meaning obviously the UAE is going one way. The more I spend, the more I spend time in the space and we've talked about power density the more I have really come to appreciate where nuclear is going. Yes, where it has been. Yeah, what we've been able to do with it, yes, I grew up in the time where, you know, I think, as probably all of my generation was, we were horrified by what we saw, and we saw all the what could possibly, and it's bad. I mean, it is bad, it goes bad, it goes way bad. Um, and you, I mean you, you know. So I understand that. But then you talk to physicists, you talk to scientists, you read a lot of what they say and they're like why aren't we doing this? This is just a better source of energy, it's clean, we can do it. The density, and I think that's what we're going to see, I think you're going to see maybe this is me going packed around to Black Rock. I think BlackRock's going. I think the power, the green power, is changing now and we don't know where it's going Now. The geothermal is showing huge promise. Now that hydrogen is being part is part of this discussion. Do we really want to go in anymore? And you talk to anybody in the and I say talk anybody. You talk to experts, people who kind of know about, let's say, when they'll tell you it's pre. You know, we're kind of maximized out in some of the areas. We you know there are certain parts of the country that are really good for it and if you're not one of those areas of the country, unless, unless something shifts, it's just it's not sensible to put it anywhere else. Yeah, not for massive scale.
Speaker 2:Oh yeah, talk about batteries. Batteries offer really interesting solution. Um, there's a, there's an environmental costume, there's a costume, but they do seem to be a really good element of this solution, because that has been the knock against solar's like that's great, solar's great when you know. But what do you do with it when you know you can't start it up unless you have a battery backup and you have these batteries, powering batteries. We start to add some of these things in this and then you throw AI, ironically, on top of this to manage the power consumption, which most of the big manufacturers have done and they're starting to introduce AI. So these are really smart systems, managing power, charging at times, at P times times, doing some really good stuff.
Speaker 2:I just think it's changing right now, I think, and we see gas LNG coming back in a big way and you have and, and, with the possibility of like gas into hydrogen, is, is, is a very, very palatable solution for a lot of different groups because it's yeah, you invest in capital right now, you get the gas. It's inexpensive, it's you know, its power density is really good and then, when hydrogen eventually becomes more broadly available, you convert over. And now you convert it over from gas to a very green running engine and something you've already spent capital into. So you don't have to recreate that. You don't have to buy all brand new engines again. Sure, I think that's a practical solution, that's a pragmatic solution, and these are the things just really in the last number of years coming online and I wonder if that's kind of underlying some of BlackRock's sort of thought on this is like the market's changed.
Speaker 1:Well, I want to give more context to this because maybe I jumped way ahead. No, no, no, exactly what you're saying. Just to underscore for the listeners to understand the magnitude of this BlackRock's just a cog in this conversation. The Net Zero Asset Managers Initiative, which is referred to as NZzami um, is an organization and and this is a group of roughly 325 asset managers globally overseeing about 50 trillion dollars. They're all committed to achieving net zero alignment by 2050. Okay, that's, that's the premise of of nzami state street global advisors. Advisors, which is the world's third largest asset manager, said in an email statement just last month that it does currently remains a member of the group. However, vanguard, the second biggest, left the group in 2022 over the past month and now it's January 2025, in the last 30 days, an equivalent coalition for lenders, the Net Zero Banking Alliance, has seen a mass exodus of US members Since early December. Nzba lost Goldman Sachs Group, wells Fargo Co, citigroup Inc, bank of America Corp, morgan Stanley and JPMorgan Chase Co. Leaving All of them, all the business.
Speaker 1:Look when the world bank leaders, when the global bank leaders, leave the sustainability commitment in order that they can meet their investment objectives. And I'm going to just underscore that by meet the growing power to ease the opportunity of power. Like I said, all bets are off. Yeah, I don't think you could find another article that would more strongly reflect the fact that that that what's happened is we've all been going along with the kind of climate change initiatives and we're building our renewables, and now it's a different day, now it's a different game, now it's a meet the energy demand at all costs conversation signaled by all of the largest asset managers and banks.
Speaker 2:Revenue. It is, it is, and I, you know, I'm thinking about the flip side of that. I think they say you know it all costs, which means it's going to cost us. You know it's going to cost us, you know, because we're going to, you know the people on the left would say, well, it's going to destroy. We're going to destroy ourselves in pursuit of saving ourselves, sure, destroy ourselves in pursuit of saving ourselves, sure, and I don't.
Speaker 2:I think that that has to be reconsidered because, ultimately, I and I would love to engage somebody who's really in the space Ultimately, I see sustainability as a less, ultimately less expensive way of doing power. Ultimately, because you're talking about, well, we're using a resource that's just plentiful, yeah, cheap, sure, free, sure. You got to do infrastructure. Yeah, it is not cheap to pull oil out of the ground Right, or extract gas Right, or even geothermal has costs, absolutely. If you could build an infrastructure that can work with what is plentiful and inexpensive, ultimately that's a better business thing, absolutely, and that eventually wins out. But we're not there right now. We've got to get there Right, and I think AI and the embracing of AI and the entire infrastructure that comes with AI is going to help us solve some of those boondoggles and we might get some beautiful technology solutions out of this from these companies who are incentivized to make money, to move the needle, to get away. And I think that's where, if I'm looking at you like UEAA, I think that's kind of where they're hedging, saying, well, ultimately, if we build it, this is actually long-term less expensive for us. Yeah, yeah, you're right, and I just think that's.
Speaker 2:I would encourage the people out there to say, look, ultimately it is really. I mean, if you could build solar panels that were incredibly efficient and and you have free source from the sun all the time, yeah, and you had some batteries that were made of pretty common you know, you know earth products, that and they feel like, yeah, that cycle Right, well, financially, wouldn't you invest in a company that solves that? Like, oh, yeah, well, of course you would. So would BlackRock, so would Dave Morgan, any of them? They all will. We're just not there, right, and those, and that's the great part, america is full of innovators. They're there, that's right. We see them, we talk to them. They have great ideas. These are coming Absolutely, and it's going to be solutions in this space, but ultimately, the renewables is, I think eventually a better financial play. We're in a wild time right now. Where you, it is, it's all things. You just take it all off the table because we have got to build power fast.
Speaker 2:Yeah, we've got to maintain, we've got to keep up with the demand. We've got to build data centers, we've got to make our infrastructure robust and we think you and I think and I think we're not solo on this opinion is we need to small D, decentralized power. We need power to go back to communities so that communities aren't as reliant on some of these bigger influxes or they can maybe more sustain their power where they are. That's right, that's not a high cost to them, that they aren't just being, you know, being led around by utilities that are well in order to, you know, in order to meet Google's needs, we've got to up our rates, whatever. That's not what we see. We see a better opportunity to build power decentralized way and get this stuff online and actually make our grid more robust by decentralization.
Speaker 1:Yeah, yeah, and I agree 100% with everything you just shared. And so my final thought on that is and I want the listeners to be clear that us recognizing these mass exodus away from these organizations, these coalitions, does not signal we don't like renewables or we don't like sustainable anymore. It just says we recognize the need for flexibility. We recognize if we're going to consider national security in this conversation energy security, energy independence then we've got to have access to and be able to invest in all the things in the most flexible and efficient way that we can, and being in a coalition that binds us to certain sustainability regs or or commitments is what they're, they're backing out of.
Speaker 2:So just a point of clarity. Oh no, I don't have a clear. I mean, I think I, I agreed. I mean, I think it's where we are, it's, it's all of the above. Yep, you've said it. Yeah, I've said it.
Speaker 2:Yeah, for however many episodes now we have to approach this not unlike. You know, you have a, you have a, you have a problem you can't solve. It's usually like, well, let's put all the solutions on the table. That's usually the best way to get to it. Yeah, it's harder to get to it when you say, nope, well, why can't I consider those? Because maybe they need to be part of that solution, maybe it's a place somewhere. That's what we're.
Speaker 2:I think that's, you know, underlying this whole thing is there needs to be a lot of thought given to when we, when we take pieces off the table, what that means. We're saying put the pieces on the table, consider it. Yes, I understand where all the motivations are, so do you right, but you have to consider the pieces, especially when you're trying to win. We can call it. It's not a game, folks, we're trying to. This is something that's real. It's really happening today. We need to build that infrastructure. We need to stay ahead of China and this is what it's going to take. That's right. That's right Not to steal your last thought. No, because you had the last thought, but I was agreeing with your last thought that was my final thought.
Speaker 1:I love your final thought. So thank you guys for chiming in. Hopefully you love our final thoughts and you're getting some value out of this episode and can't wait to get you on to the next one. Absolutely, and we'll catch you on the next episode.
Speaker 2:Until next time.
