Transcript
Pascal-Emmanuel Gobry: Hello everyone and welcome to the Low Production Values sphere podcast, which is shot from my terrorist hideout in Pakistan. And today I have an excellent guest. ah It's my good and old friend Josiah Neely, who works for ah the R Street Institute now, which is a think tank who's Material, I read very often and cite very often on PolicySphere. They do a lot of very good work there. um And Josiah's beat in particular is energy, energy regulation. You did a lot of stuff on that at the state level historically, but you're an expert on all things.
Pascal-Emmanuel Gobry: energy and regulation. And of course, energy has been identified as like one of the big priorities of the Trump administration, the new Trump administration. ah You know, all of the tech guys are excited because it turns out that in order to create AI, you need 500 new nuclear plants. So that has changed the sort of political and economic calculus because now all of Silicon Valley wants some change on this issue. So a lot of very fascinating issues.
Pascal-Emmanuel Gobry: Uh, we were texting before, uh, before you came on and I said, Oh, you know, uh, is there anything in particular we should cover? And you said the Trump EOs. And I replied, well, I mean, I i read the Trump EOs. They don't really seem that interesting. I mean, it seems like he just, he repealed a bunch of Biden stuff. And then he said, Oh, we're going to review energy regulations, which in Washington.
Pascal-Emmanuel Gobry: Washington speak, that means nothing. And because they're expecting to do all of the energy stuff in the bigger conciliation bill, which is going to come up in March.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: Am I wrong or i is that?
Josiah Neeley: Well, they did do all that. I mean, they did repeal a bunch of stuff, not just Biden stuff, but ah stuff that went back.
Pascal-Emmanuel Gobry: I guess the Biden stuff is a lot of stuff, right?
Josiah Neeley: Biden stuff is a lot of stuff. You know, the probably in terms of numbers, the biggest thing that they did was repeal the so -called Biden EV mandate.
Josiah Neeley: um Because the Biden EPA had, ah they had set fuel mileage standards for 50 % of all car sales in 2030 to be electric vehicles.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: And you know right now, I think last year it was 11%. So that's not nothing, but to get from 11 % to 50 % in six years, ah that's ah to that's a big...
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: guy Yeah.
Pascal-Emmanuel Gobry: that's that's That's a very good point. I i' completely forgotten about the EV mandate. It's because it was so crazy that it's, you know, sometimes something is so crazy that your brain just doesn't register it.
Josiah Neeley: Yeah.
Josiah Neeley: Yeah. I mean, it was clear to me, ah yeah sometimes you have a mandate and there's a question of like, okay, well, what's the impact going to be? And for this one, it was clear.
Josiah Neeley: like it's gonna it was gonna ah go away one way or the other you know just because it was the the target was so unrealistic um that eventually so like even if even if ah Kamala had won I predict that at some point they would have had to find a way to back off of it because yeah well yeah we get by the cars for China but that's
Pascal-Emmanuel Gobry: They would just have bought the cars from China.
Pascal-Emmanuel Gobry: you there you know the the The American camera manufacturers would have gone bankrupt and they would just have bought the cars from China.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: That's fine.
Josiah Neeley: Well, yeah, but the, I mean, the, other with the problem is, uh, there would be no, you know, even if you bought the cars from China, there's no place to charge them because another of administration's initiatives was they were going to build out a huge charging infrastructure and they spent, uh, $7 billion dollars and got nine charging stations.
Pascal-Emmanuel Gobry: right right right right right right
Josiah Neeley: And, uh, you know, the charging stations didn't even always work actually. So. That was a problem, you know, the California.
Pascal-Emmanuel Gobry: All right, let's, and okay, so let's, let's sort of pause a little and rewind.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: Uh, so first of all, the EV mandate, first of all, the the process bit of it was extraordinary because. ah you would think that and in order to say, we're going to, you know, we're going to ban gasoline cars, and everybody's going to drive electric vehicles, like maybe that's good policy, but you would think you would need an act of Congress to do that, except they didn't get an act of Congress. Instead, they published an EPA regulation that didn't actually said it was an EV mandate. It just increased gas mileage standards to such a level that de facto only electric vehicles qualified. is i Am I understanding that correctly?
Josiah Neeley: Right. So there's there's an existing regulatory system,
Pascal-Emmanuel Gobry: which which Which is like a mockery of any form of like legislative and administrative process.
Josiah Neeley: not what it's supposed to be.
Pascal-Emmanuel Gobry: like That's not what EPA regulations
Josiah Neeley: Yeah. Yeah. So yeah there's fuel mileage standards, so which are determined by the average ah sales, right?
Josiah Neeley: so if you So if the standard is that the cars need to be 25 miles, get 25 miles to the gallon, Okay, well, you could, in theory, have half of your cars be 40 miles to gallon and half of the cars you sell are 15 miles to the gallon. I think the math works out there, right? I'm a lawyer, so you know numbers are not the best. but it doesn't like the standard doesn't It's not a minimum, it's an average, right? so one And if you sell an electric vehicle, of course, like ah because it doesn't use gasoline at all, you know that allows you to sell a certain number of other cars. So they set it basically so high that the only way to meet it was if half the cars were electric. That's that's kind of how they how they did it and run around that. Legally questionable.
Josiah Neeley: you know I mean, maybe the courts would have bailed them out and said that they couldn't do that.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: that's That's one possibility. They could have been a ah ah back down. But um yeah, so like that that's a but you know that's a big thing. I think that's estimated at like, you know the the cost is something like, it's close to a trillion dollars.
Josiah Neeley: It's like $870 billion dollars right was the estimated impact. just from that one rule.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: ah And there's other stuff ah that they did. um They are pausing. So Biden passed a piece of legislation called the Inflation Reduction Act.
Josiah Neeley: ah or yeah And it's doubly confusing because it doesn't really have anything to do with inflation.
Pascal-Emmanuel Gobry: Yes, I've heard of this one.
Josiah Neeley: you know ah its all yeah It's called the Inflation Reduction Act.
Pascal-Emmanuel Gobry: That's crazy. That's crazy. I mean, that' that's that's the first time this has ever happened.
Josiah Neeley: Oh, no, I know. But, uh, so people, I think in general, like people kind of are embarrassed about that. So they just call it, they're like, well, we can't call it the inflation reduction act because that's confusing to people.
Josiah Neeley: So we'll call it the IRA, which also a little confusing because, you know, right.
Pascal-Emmanuel Gobry: Right, right. Because it's a terrorist group.
Josiah Neeley: I mean, and maybe, maybe the Biden, you know, as a proud Irish American, maybe that's what they told him. Like we're going to give $800 billion to fund the IRA. He's like, all right, let's do it.
Josiah Neeley: um
Pascal-Emmanuel Gobry: We could go on a whole sidebar about how ah Sinn Féin in Ireland has, which which was the political wing of the IRA, ah has become this totally like woke left party that supports like trans kids and all that stuff, which is a fascinating phenomenon, and but has nothing to do with the topic and their discussion.
Josiah Neeley: yes
Josiah Neeley: yeah
Pascal-Emmanuel Gobry: So I'm going to just, but it's just very funny. So I'm just going to close the parentheses.
Josiah Neeley: right
Josiah Neeley: Yeah, right, right. um But so so there's a lot of money in in that, you know, that was handed out, some of it like through the tax code, but like money.
Josiah Neeley: um Some of it is like even for good stuff.
Pascal-Emmanuel Gobry: Yeah, I mean, so joking aside, the IRA was like a laundry list of like handouts.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: And I'm, you know, i' i I'm not knocking it like it's, you know, it's Washington.
Josiah Neeley: right
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: It's the way politics has been practiced since the dawn of man, certainly since the dawn of democracy. you know, okay. ah But ah yeah, it was it was kind of a Christmas tree.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: and And, and Christmas tree bills, you know, very often, like the there's some good stuff, and then there's some not so good stuff. And there's stuff where you're like, what?
Josiah Neeley: Right, right. And so one of the things that was in the e the EO on energy that Trump put out is, you know, we're just going to stop paying out the money from the IRA, right? um Which is, you know, as I understand it, this is ah something that presence used to be able to do.
Josiah Neeley: It's called a condiment and then, right.
Pascal-Emmanuel Gobry: Right. Right. There's a whole constitutional controversy about it.
Josiah Neeley: And then in the seventies, you know, Richard Nixon was involved in a coverup of bugging the, uh, the DNC.
Josiah Neeley: And so, okay.
Pascal-Emmanuel Gobry: Nixon did nothing wrong, okay?
Josiah Neeley: All right. Yeah, yeah, yeah. Well, he resigned that, you know, maybe that was his, that was his mistake.
Pascal-Emmanuel Gobry: Yes, yes.
Josiah Neeley: But, um, Anyway, as a result of that, they're like, well, we don't want people bugging their politics. We don't want ah the government, the president having the his political opponents bugged, right?
Josiah Neeley: That would be bad.
Pascal-Emmanuel Gobry: Right, right.
Josiah Neeley: So luckily that has never happened since. but
Pascal-Emmanuel Gobry: Right. So so just just just to clarify for people who are listening who may may or may not know about this, ah basically, so you know in the American constitutional system, Congress passes a budget which appropriates money ah that the executive branch then spends.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: And ah the president can't spend more than what Congress has appropriated.
Josiah Neeley: What?
Pascal-Emmanuel Gobry: The question is, can he spend less?
Josiah Neeley: What he could. Yeah, Right.
Pascal-Emmanuel Gobry: and And until Nixon, the people were like, yeah. And then and then after, I don't know if they passed the law or if it was just, yes. Okay, so they passed the law, ah but it's a constitutional issue. So um maybe the law is not the final and saying, no, no, the the president has to spend exactly the amount that that Congress appropriates. i i I'm correct.
Josiah Neeley: That is, yes. that So that's what the law says is that,
Pascal-Emmanuel Gobry: Right. And then Trump just said, well, no, actually I'm i'm not going to do it.
Josiah Neeley: right. So that's going to be that's going to be a legal fight. And and I think you know this um this is indicative.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: There's a there's a couple of things that are in this EA that are like that where they There's a clear um strategy of we're going to be bold and kind of push the limits to see where they are.
Josiah Neeley: right it In previous administrations, and Trump won, they didn't do that.
Pascal-Emmanuel Gobry: Yeah.
Josiah Neeley: you know Normally you come in and you want to like hedge your actions in such a way to maximize the chance that ah it won't get invalidated by the courts for the most part, right?
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: That's what you try and do. And so you end up kind of tinkering around the edges. And in this case, the, and this is not just true of energy, obviously, it's true in other areas. I think like the birthright citizenship, other things that are outside my, my kin.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: Uh, but they clearly had the philosophy of, okay, you know, We think we can do more. We think that a lot of these, even if there's a rule on the books that says you can't do X, maybe that rule is unconstitutional.
Josiah Neeley: It exceeds presidential authority. Maybe we can get a court, you know, offer a different interpretation. Let's see. Let's see. Right. We don't know that it's going to work, but let's, let's see.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: So that's kind of the attitude ah that they are going for. um And yeah I think just like it as ah as an example, in the last administration, there's a thing called the social cost of carbon, right?
Josiah Neeley: Which is when they're doing the social cost of carbon.
Pascal-Emmanuel Gobry: The social cost of carbon.
Josiah Neeley: Yeah, it sounds very boring.
Pascal-Emmanuel Gobry: but That sounds extremely rigorous and scientific. Go on.
Josiah Neeley: Yeah, right. So it's basically it's supposed to be an a an estimate of like, how much damage is done by a given amount of greenhouse gas emissions and you use it when you're doing your cost -benefit analysis, you know which is something that we all love to do. And in the Trump one, they're like, okay, well, we're going to tweak this. We'll use like a different discount rate. you know we'll do so like They tweaked various things about the calculation to make the number lower.
Josiah Neeley: This time, they just said, you know what? We're just going to get rid of it. And in fact, we're going to look at, say, coming out with a new rule that says the federal government doesn't have the authority to regulate greenhouse gases at all, right?
Josiah Neeley: So that's just kind of like a corral.
Pascal-Emmanuel Gobry: Oh, wow. So that's that's in one of the EOs that was signed this week. There is a kind of blanket statement that says the US federal government does not have the authority to regulate green half gases.
Josiah Neeley: So there's an existing rule um that has to be it's called the endangerment finding that has to be repealed. ah And so it basically says EPA look at repealing this rule.
Josiah Neeley: It doesn't actually repeal it because it's for complicated technical reasons. It's got to be a multi -stop process. But that seems to be what they're what they're looking at, you know. And that's another thing where, you know, ah that's an Obama era rule.
Pascal-Emmanuel Gobry: Wow.
Josiah Neeley: There is a Supreme Court case. Um, suggesting that they had, they had to do something like that rule, but you know, their court had a different membership then.
Josiah Neeley: And I think if you look at votes now, I think they could probably get away with, with getting rid of it. Uh, but we'll find out, right. Um, that's, you know,
Pascal-Emmanuel Gobry: Right. That's interesting. So going back to the IRA, just, just, just sidebar, because you reminded me of this and now I find it very interesting.
Josiah Neeley: yeah.
Pascal-Emmanuel Gobry: What was the deal with the charging station? Because you had all these tweets. Is it like, you know, they spent a billion dollars to get to charging stations in West Virginia and whatever.
Josiah Neeley: Right.
Josiah Neeley: Yeah. Yeah.
Pascal-Emmanuel Gobry: Like what, what, what was that?
Josiah Neeley: Right. Yeah. ah As it turns out, the government is kind of incompetent at a lot of things, right? So there's some things.
Pascal-Emmanuel Gobry: No, I fully accept that, but like the mechanics of like how the incompetence happens is, I think, interesting and important.
Josiah Neeley: Yeah.
Josiah Neeley: Right.
Josiah Neeley: Right. Yes.
Pascal-Emmanuel Gobry: like what What precisely was the blockage?
Josiah Neeley: yeah Absolutely.
Josiah Neeley: Yeah. So you talk to people, they, there's several things that they cite. One is, um, they have to, uh, coordinate with a bunch of different people. So they're saying, okay, we're going to build a charging station.
Josiah Neeley: Uh, we're going to put it on a, let's say we want to locate it at an existing gas station, which makes sense. Right. Cause people, you know, okay.
Pascal-Emmanuel Gobry: that
Josiah Neeley: So we're going to do that.
Pascal-Emmanuel Gobry: That's where they are in Europe.
Josiah Neeley: Right. Okay. Well, we're going to do that, but, uh, the, company that's building the charging station is different from the company that's operating in the gas station. And the gas station company is maybe renting from someone else who owns the land.
Josiah Neeley: now to me And so they say, well, this is complicated. Working it out takes a long time. Now, to me, this is something that in the private sector, I don't even know.
Pascal-Emmanuel Gobry: Yeah, this is not complicated.
Josiah Neeley: Yeah, but for the Department of Transportation, it turns out, you know, this is something that's very much beyond anything that they've ever had to deal with before. And so they're just not that good at it.
Pascal-Emmanuel Gobry: oh my
Josiah Neeley: And dealing with like, local utilities to get like hookups, other things like that, right. So if you would think, well, how hard it, you know, how hard can it really be if you've got a bunch of money, and you're the government, you know, so you are theory it, like in one
Pascal-Emmanuel Gobry: Right, right.
Josiah Neeley: point of view, it should be easier because you're exempt from a bunch of stuff and you can just kind of...
Pascal-Emmanuel Gobry: Right. I mean, this this is so, you know, because usually when people say, oh, the government is incompetent, blah, blah, blah. um You know, and you look into why something wasn't done or something was late or something was over budget. There's usually a reason.
Josiah Neeley: right
Pascal-Emmanuel Gobry: You know, the reason is that there's a powerful interest group that this offends, ah or there is a preexisting piece of legislation, which is either important or politically untouchable that makes it impossible.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: Or at the local level, there sometimes there's sometimes just straight up corruption.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: Not usually at the national level in in and advanced democracies, although sometimes you wonder, but
Josiah Neeley: Sure, yeah.
Pascal-Emmanuel Gobry: that aside. But, you know, when you find out that actually no, it really is that, you know, the the bureaucrats are just like extremely lazy and stupid.
Josiah Neeley: Yes. Right. Yes. Yeah. Yeah.
Pascal-Emmanuel Gobry: and do And just don't do their work because then like the first thing they did the roadblock they go, Oh,
Josiah Neeley: and get Yeah. So it's time for my break.
Pascal-Emmanuel Gobry: And then they go home for the day, and then the next day they talk about having a meeting about it the week after that, and then and then it just never happens. like That's actually not the majority of cases when what when when things don't happen.
Josiah Neeley: Right. Right.
Pascal-Emmanuel Gobry: ah So if that ah if that's literally what this is, like i mean you know i mean i mean give Elon the flamethrower. like
Josiah Neeley: Well, yes, right. Exactly. Well, and the funny thing is, ah you know, the government had spent all this money to build, ah you know, nine stations or whatever.
Josiah Neeley: Actually, Tesla already has its own network.
Pascal-Emmanuel Gobry: Right. Yes. Yes. They have a huge...
Josiah Neeley: eond absolutely party did it Yes, yeah.
Pascal-Emmanuel Gobry: Yes.
Josiah Neeley: um Elon actually already did it.
Pascal-Emmanuel Gobry: And like you could you i mean I hate like the Euro smug, ooh, in Europe, blah, blah, blah, we do it, bla bla blah, blah, blah, blah, blah, blah. But like if you if you stop at a gas station anywhere in Europe, there's there's the gas thing there, and there's the electric charging thing there.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: I refuse to use electric cars. I mean i don't refuse.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: i just I just don't like them. um But like when we stop for gas, we see that the charging stations, they're there.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: They're operated by private companies, ah which presumably like you know they figure out how to rent a piece of property from the person that owns it.
Pascal-Emmanuel Gobry: They they they manage they manage that ah that feat of you know nuclear physics or heart surgery, and and it's fine.
Josiah Neeley: Yeah,
Josiah Neeley: yeah so it doesn't seem ah like ah it should be a huge deal, but it is and it wasn't just with that. I mean, ah parallel to this, the government also had a big program to build out ah broadband 5G for rural areas.
Pascal-Emmanuel Gobry: Yes.
Josiah Neeley: And they they weren't able to accomplish that either.
Pascal-Emmanuel Gobry: yeah Yes, yes, yes.
Josiah Neeley: So I think it is, you know um ah famously in Obamacare, you know the the big ah point that they were unable to overcome was not passing the law or redesigning everything, it was building a website.
Josiah Neeley: So I don't know, um it it does seem like
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: With more competent people, it could have been done.
Pascal-Emmanuel Gobry: Yeah, no, it turns out to be the case ah that that that competence really matters.
Josiah Neeley: Right.
Josiah Neeley: Well.
Pascal-Emmanuel Gobry: ah But, you know, healthcare is actually a good ah a good example of the the Obamacare website, you're right, that was just straight up incompetence.
Pascal-Emmanuel Gobry: But the um in general, the reason why everything in health care is crap is because you have very powerful interest groups that make it crap, especially doctors and providers.
Josiah Neeley: right
Pascal-Emmanuel Gobry: um Anyway, OK, so any any anything else in the Trump EOs on energy in the first week that sort of popped out at you?
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: So there's the EV mandate, that's huge.
Josiah Neeley: Yes.
Pascal-Emmanuel Gobry: There's the greenhouse gas thing, which apparently, you know, will get litigated or whatever.
Josiah Neeley: Yes.
Pascal-Emmanuel Gobry: But there's, there's at least a statement or a stake in the ground that says, we're just not going to do anything about greenhouse gas.
Josiah Neeley: right yeah
Pascal-Emmanuel Gobry: You got some missions. Which, I mean, I admire the gumption. I'm actually a lib on climate change. I think it's real, and I think it's bad.
Pascal-Emmanuel Gobry: And I think we should do something. We'll talk more about what we should do about it. Because obviously, the answer is not communism, it turns out.
Josiah Neeley: That's right.
Pascal-Emmanuel Gobry: But I just admire the gesture.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: It's like, nope. We're just not going to do it. that so like Are we going to regulate air? No, it's air.
Josiah Neeley: Yeah. Well, we're still, they they still do regulate the air for other stuff, but, you know.
Pascal-Emmanuel Gobry: yeah I'm sure they do. I'm sure they do. it um
Josiah Neeley: Yeah. ah Well, maybe they'll look at that. Yeah.
Pascal-Emmanuel Gobry: ah Anyway, so and anything else in the Trump EOs that sort of jumped out at you and points out that, you know, I was an idiot because I read them and I was like, there's nothing interesting in there.
Pascal-Emmanuel Gobry: And like you found two bombshells.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: But that's why I talked to subject matter but experts.
Josiah Neeley: That's right. Yeah. I mean, there are, um, we need to listen to the experts.
Pascal-Emmanuel Gobry: Because we need to listen to the experts.
Josiah Neeley: So that's right. It could be nine experts. Uh, and, um, uh, I mean, there's, there's some other things in there that I would say are maybe lower impact.
Josiah Neeley: There's like, uh, restrictions on offshore wind, um, which, uh, you know, it was not what I would do, but offshore wind is tends to be so expensive in general that.
Josiah Neeley: I think in the areas where it was restricted, I don't know that it's going to have a huge impact. the The other big thing is, and this is I think kind of feeding into like maybe a broader agenda, is there's a.
Pascal-Emmanuel Gobry: ah ah So offshore wind is, ah to me, the funniest form of energy.
Josiah Neeley: Yeah.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: ah I assume it's complete BS because all wind is BS, but the that's not the funny part. ah The funny part is that, of course, the the people who hated the most are also the people who favored the most because it, you know, who who favors clean energy, it's like it's rich liberals, and who owns seafront property whose view is ruined by offshore wind, it's rich liberals.
Josiah Neeley: Right. A lot of people. Yeah.
Pascal-Emmanuel Gobry: And so ah it it's always hilarious, because you always have somebody who wants to build an offshore wind farm, like outside Martha's Vineyard or outside Malibu.
Josiah Neeley: Right. Right.
Pascal-Emmanuel Gobry: And like it gets, you know, sued into oblivion by like these, you know, carrying members of the Sierra Club and like big democratic donors were like, how dare you?
Pascal-Emmanuel Gobry: How dare you ruin the view of my of my beachfront?
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: Offshore wind, you know, not sure about the energy, definitely 10 out of 10 in the humor.
Josiah Neeley: Right, right, right. um So, yeah, i like, I don't, I don't expect that to actually be a big impact, just because in addition to ah provoking, you know, ah the sorts of humorous situations that you talk about, ah it tends to be also pretty expensive, you know, so I don't think it's not
Pascal-Emmanuel Gobry: yeah
Josiah Neeley: I mean, as compare like ah as compared to onshore wind in a lot of places or whatever. So um so I don't think it's going to have a huge impact.
Pascal-Emmanuel Gobry: right
Josiah Neeley: you know ah the the The whale thing is kind of funny because people get people have like very...
Pascal-Emmanuel Gobry: Did you say whale?
Josiah Neeley: Whales? Yeah.
Pascal-Emmanuel Gobry: Oh yes, they kill whales. Yes, that's true.
Josiah Neeley: Well, they make them sad. you know this is the this is um
Pascal-Emmanuel Gobry: but i should I shouldn't laugh because whales are, of course, like extremely beautiful and and complex animals.
Josiah Neeley: Yeah, but they don't have rockets.
Pascal-Emmanuel Gobry: They have brains in the size of this room, and ah which is which is's a small room because this is a terrorist hideout in the and the mountains of the Hindu Kush.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: But ah you know brain it turns out that there is a correlation between brain brain size and IQ, and I'm not saying this because
Josiah Neeley: Right, yes.
Pascal-Emmanuel Gobry: you know But, uh, so whales are probably like extremely intelligent animals that we should, like, I, I'm a, I'm a conservationist.
Pascal-Emmanuel Gobry: Um, I'm a conservationist. He said, uh, no, but like, okay, though, explain the thing with the windmills and the waves because it's absolutely real and it, and it, and it's freaky.
Josiah Neeley: oh It is. Well, I mean, supposedly it the like vibrations and sounds ah from the turbines can affect like ah the mood or the of the whales or whatever.
Josiah Neeley: I don't i don't know.
Pascal-Emmanuel Gobry: But like they end up they they end up like beaching themselves, right? They and they end up essentially committing suicide.
Josiah Neeley: I mean, way else committed committing suicide. yay Yeah, I think yeah I'm sure.
Pascal-Emmanuel Gobry: No, like i'm not I'm not joking. like They end up beached on beaches in New Jersey. like i i i read I'm sounding like a crazy person. ah you know I read it on the internet, damn it.
Pascal-Emmanuel Gobry: That means it's true. ah But no, I actually you know i i had i did even better than read about it on the internet. I spoke to a guy.
Josiah Neeley: You spoke to a guy.
Pascal-Emmanuel Gobry: who told me that he knew a guy.
Josiah Neeley: All right. All right. Was he a marine biologist?
Pascal-Emmanuel Gobry: ah So that joking aside, I spoke to a friend who's doing of extremely, you know he's a very serious person, very successful person ah with lots of fancy degrees and he has you know family roots and in New Jersey and he told me that this is absolutely real.
Josiah Neeley: Right, so I'm yeah, I'm I think there probably were beached whales before as well So I don't know if someone someone should do a study to see what kind of effect ah You know, it's like it is the beached whale rate.
Pascal-Emmanuel Gobry: we We should study the depression part patterns of whales.
Josiah Neeley: but there were You know, Elon, during the during the campaign, ah during one of his speeches, he was talking about how for SpaceX, when their rockets ah land in the ocean, they had to do a study on the effects of the landings on whales, and I think also seals, where they had to like,
Pascal-Emmanuel Gobry: Yes.
Pascal-Emmanuel Gobry: Yes.
Pascal-Emmanuel Gobry: Yeah, yeah, yeah.
Josiah Neeley: but
Pascal-Emmanuel Gobry: They had to put headphones on seals. and
Josiah Neeley: Yes, you could do a combined study, you know.
Pascal-Emmanuel Gobry: Right. i mean the The whole thing is like a cost and benefit calculation.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: like if you're if If you tell me you're going to give the seals and the whales depression because you're building rockets to Mars, I'm like, okay.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: If you tell me you're going to give the whales depression because there's more virtual signaling points in building windmills than there is in operating a gas plant or a nuclear plant, I'm going to tell you to take a long walk out for a short beer.
Pascal-Emmanuel Gobry: ah and So anyway, what?
Josiah Neeley: That's how you get to the natural wind.
Pascal-Emmanuel Gobry: what
Josiah Neeley: Taking a long walk up a short pier is how you get to the
Pascal-Emmanuel Gobry: Yes, it's ah exactly. yeah go Go to the windmill but walk there um with with concrete shoes. All right, so explain Texas to me.
Josiah Neeley: Okay. Well, ah it's hard to explain Texas, but Texas, I guess the way you might explain Texas is Texas is to the rest of ah the United States as the United States is to, uh, other parts of the world, Europe or Canada or whatever. Um, so it's just, it's, uh, you know, it's, it's just like a ah big bold state founded by people, uh, who.
Josiah Neeley: came here because they were bankrupt in other places and wanted a new life. and
Pascal-Emmanuel Gobry: Okay, so when I said explain Texas to me, I didn't mean like, explain the state of Texas to me. But like, okay, so I'm gonna tell you what I know, which is I'm sure is is sort of very, um they're very, very broad and and partial.
Josiah Neeley: okay hi
Josiah Neeley: You're French, Pascal, so I don't know.
Pascal-Emmanuel Gobry: You and I have hung out in Texas.
Josiah Neeley: Yes, that's true. That's true.
Pascal-Emmanuel Gobry: We haven't shot guns in Texas yet, but we shall.
Josiah Neeley: We haven't wished that before.
Pascal-Emmanuel Gobry: ah ah But I've definitely shot guns in multiple US states.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: um anyway ah So Texas, as as I understand, has this unique energy model where it's basically like a free for all. And to my mind, ah to my French mind, to my sort of DC policy wonk mind, ah that that's like saying you can divide by zero. Because like if there's one thing where you need some sort of regulation,
Josiah Neeley: yeah
Pascal-Emmanuel Gobry: Because you have – it's infrastructure, right? ah It's energy. And so my understanding is that they basically like kept their grid totally isolated, so there's no ah interstate commerce thing, and so they can basically opt out of federal law.
Josiah Neeley: Yeah. Yeah.
Pascal-Emmanuel Gobry: And so like I read this headline, it's like, Oh, Texas built more solar than the rest of the US and also natural gas and also and i and like, I understand there's a lot of cheap
Josiah Neeley: We got a lot of, we like.
Pascal-Emmanuel Gobry: ah power in Texas, which you know if you have a competitive marketplace, prices go down, okay, fine.
Josiah Neeley: Right.
Josiah Neeley: right
Pascal-Emmanuel Gobry: ah Every once in a while, the power seems to go out for a month, which is you know suboptimal.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: ah so i'm I'm just extremely curious because i I am a conservative, I am a pro free market guy. you know if If you show me that a a market that I previously thought had to be regulated turns out to work fine when it's unregulated, like I'm happy I want to know about that, but I want to actually know I'm not a libertarian, so I don't have, you know, I have to put my fingers in the wounds of the resurrected ah free market and energy before I believe.
Josiah Neeley: Yeah. yeah
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: ah So explain Texas to me.
Josiah Neeley: Okay. All right. So I guess there's a couple of things. One, I think we should, ah you know, I'm a free market guy and I'm a Texas booster, but we do have to be ah honest and realistic in that when people talk about free market in energy, there's still quite a lot of regulation in, of the electricity system, right? So the difference is.
Josiah Neeley: A lot of places in, a lot of play I don't know if this is true in France, but in a lot of places in the United States, if you move into your home or business, right, and you want to get electricity service, there's just a look yo local utility that does that, right?
Josiah Neeley: So you can't shop around, you have one a company that you can get your electricity service from, and then that company is what's called Vertically Integrated, which means it owns
Pascal-Emmanuel Gobry: yeah
Josiah Neeley: the local distribution system, it owns the transmission lines, it owns power plants, right?
Pascal-Emmanuel Gobry: Right, right.
Josiah Neeley: Okay, so there's still a lot of places in the US that are like that.
Pascal-Emmanuel Gobry: Which is what it used to be like in France and then the EU, meaning Germany, in order to destroy the French energy grid because they were in the process of destroying their own energy grid and and and they didn't want the French industry to be more competitive so they had to destroy our energy grid first.
Josiah Neeley: Yeah.
Josiah Neeley: Right. Right.
Pascal-Emmanuel Gobry: ah forced a breakup between ah provision and transmission. and i mean we we can We can talk about it if you want. It is it is absolutely insane. ah they they just just literally They're destroying like the most wonderful energy system in the world.
Josiah Neeley: Yeah.
Josiah Neeley: Nope.
Pascal-Emmanuel Gobry: um and My bills are twice higher now than they were five years ago, um but ah thanks to the free market.
Josiah Neeley: Which is the French one?
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: ah But anyway, so, okay, so in most places in the US, you have a vertically integrated monopoly, which is also regulated.
Josiah Neeley: Right.
Josiah Neeley: Yes. yeah and so ah Because you have a monopoly, everything about the operations of that monopoly, including what rates they can charge, other things like that, has to be approved by some government body, usually a public utilities commission.
Josiah Neeley: right and um that's That's the way it used to be.
Pascal-Emmanuel Gobry: Which, by the way, is totally fair because if you have a government monopoly, the the the price system doesn't convey information.
Josiah Neeley: Yeah, if you didn't have that.
Pascal-Emmanuel Gobry: and so it doesn't have you know the The reason why price controls are bad is because the price in a free market, the price system conveys information about supply and demand, which is which is how you be a you get things to be efficient.
Josiah Neeley: Yeah.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: But in a regulated market, prices don't convey that sort of information. so that you don't You don't destroy something by changing the prices.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: I just said something about Medicare. ah
Josiah Neeley: Yeah. Yeah. Um, yes, right. Yeah. You need it because, you know, otherwise the monopoly, since you don't have a choice, they could basically charge whatever they want and you're kind of with it, unless they go back to burning logs on the fire, you know, or, or whatever.
Pascal-Emmanuel Gobry: Yes, yes. Right.
Josiah Neeley: Um, so that's the way it used to be everywhere in the U S now, the system has gotten a lot more complicated. And not just Texas, there are I think ah about 13, 14 states that are what is called restructured. And so that means that you as an end user consumer do have a choice of who your provider is. And it also means that there's competition in the generation market. So instead of having a utility that owns all the power plants, uh,
Josiah Neeley: different companies can build power plants, and then they sell the power onto the grid ah that everybody else uses. um and texas yeah so Texas is not not unique unique in that. We we go further than any other state in that, I would say, because other states, even the ones that have ah retail choice, they have all sorts of different backstops and other things and, you know, ah ways in which the monopoly still kind of encroaches into the system that you don't have in Texas.
Josiah Neeley: um Our system is, ah you know, it's not perfect. ah But actually, I think we do have a pretty cheap, reliable system here. So I definitely, you know, I'm a fan of it.
Josiah Neeley: I'm a booster of it. Um, yeah.
Pascal-Emmanuel Gobry: Okay, so, ah i sorry, i'm just i just want I just want to make sure I understand. So during the 90s, which was, you know, during the heydays of neoliberalism, there was this theory about, you know, how to improve those sort of – natural monopoly public services, energy being the the biggest one, telecommunications, ah trains.
Josiah Neeley: Right. Yeah. Yes.
Pascal-Emmanuel Gobry: um And the idea was exactly you're you're going to separate the infrastructure layer from the service layer.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: And then we're going to have competition at the service layer. And, uh,
Josiah Neeley: Everybody wins.
Pascal-Emmanuel Gobry: And everybody wins.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: ah bubble It turns out it didn't really work that way because for a bunch of complicated reasons, ah because you know sometimes you do have you do still have local monopolies.
Pascal-Emmanuel Gobry: So for example, when the Brits did this with their rail system, they essentially like created like regional monopolies and so they ended up with like the ah a sort of like socialist scare story where privatization led to higher prices and more service quality because you just had these local monopolies that that fleeced their customers. and And meanwhile, the rolling stock got worse because the the the company or government utility or whatever that run the infrastructure was no longer getting the money from the tickets. And so the underlying infrastructure got worse.
Pascal-Emmanuel Gobry: um And so you can take many examples. So in France, there they did this, which doesn't work at all because the the grid and the provision are just like intertwined like this.
Josiah Neeley: Mm -hmm
Pascal-Emmanuel Gobry: ah And so basically what happens is that EDF, which is the traditional government utility, ah is mandated to sell its power at a discount below cost to its competitors so that they can sell them off to the public.
Josiah Neeley: Yeah
Pascal-Emmanuel Gobry: ah And so it it it it's just a disaster. So is is basically, it's just very tricky to implement in practice. They're doing this for trains in France, which again is a disaster because like Amtrak, there's like three or four profitable lines that basically like subsidize the rest of the of the network.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: And ah the train utility like made a bunch of money on those lines. and And that subsidized the rest of the network, which is worth subsidizing for sort of public common good reasons. um And now, of course, you have Deutsche Ban and Trent and Talia, blah, blah, blah, offering five -star train service from Paris to Lyon, which is the equivalent of like New York to Washington.
Pascal-Emmanuel Gobry: Uh, and, and basically like cutting into the company's profits. So, you know, within 10 years, the French train system is, which now is still the envy of the world is going to be garbage. Um, so is that, is that basically the Texas model?
Josiah Neeley: about the about the trains uh i would say so i agree with you that it's important it can be tricky and it's important to so the cop yeah the cop
Pascal-Emmanuel Gobry: okay
Pascal-Emmanuel Gobry: yeah I guess my question is how, at at what at what level does the competition happen? Is it just the service is it just the the consumer end point or is it the grid? The grid is the grid, yes.
Josiah Neeley: Yes. Uh, so the, the inter, all right. So transmission and yeah.
Pascal-Emmanuel Gobry: Feel free to talk to me like I'm a sixth grader.
Josiah Neeley: yeah So if you think about, yes, yes.
Pascal-Emmanuel Gobry: No, I'm serious.
Josiah Neeley: Um, all right. Uh, shut up, sit down, do your homework. Um, the, uh,
Pascal-Emmanuel Gobry: That's very good advice.
Josiah Neeley: Yes, that that is a good advice. Yeah. Um, so if you think about, if you break up the grid into like three components, right? So you have the power plants, they make the power.
Pascal-Emmanuel Gobry: Yes.
Josiah Neeley: Then you have transmission that moves the power from one place to the other.
Pascal-Emmanuel Gobry: yeah
Josiah Neeley: And then you have the distribution system, uh, which is the, you know, actually delivering the power to your house once it gets to you and you've got, yeah.
Pascal-Emmanuel Gobry: Okay.
Josiah Neeley: Um, the, in In Texas, the distribution and the transmission system are still basically monopoly regulation.
Pascal-Emmanuel Gobry: Okay, okay.
Josiah Neeley: And the generation is where you have competition.
Pascal-Emmanuel Gobry: Okay, all right.
Josiah Neeley: And ah one thing that we did, ah which is different from a lot of other states in in you know in the US, is we made like a hard break.
Josiah Neeley: right So in a lot of other places, Even if they have competition in generation, they'll say, well, the distribution company can also own generation and participate in that market.
Josiah Neeley: And I think what we found is that creates a bunch of problems. I think like what you're talking about there where you're, where the utility is forced to sell power to someone else below cost, but you know, just severing it out.
Pascal-Emmanuel Gobry: Yeah.
Josiah Neeley: So it's like, they're not competing with each other anymore. They're doing totally separate things.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: Um, that we found, you know, is a good way to avoid those sorts of, uh, those sorts of problems. Right.
Pascal-Emmanuel Gobry: Okay. Got it. Okay. Got it. That, that was very clear. Okay. So let's say I'm, um, I want to build a solar farm in Texas.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: ah Very easy for me to get a permit.
Josiah Neeley: Yes.
Pascal-Emmanuel Gobry: Plenty of land where there's lots of sun.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: ah Sounds like a very good business proposition. Okay, I build my solar farm.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: um
Pascal-Emmanuel Gobry: what So I sell it into the grid.
Josiah Neeley: Yes.
Pascal-Emmanuel Gobry: There's ah there is a distribution monopoly company. ah What prevents that company from saying, look, I'm i'm just you know i'm just going to pay you like the the lowest possible price. I'm not gonna i'm not gonna i'm not going to pay you ah because i because I have a monopoly customer.
Josiah Neeley: Mm hmm. Yeah.
Pascal-Emmanuel Gobry: How do I make a profit, i guess I guess is my question. How does the price, how does the price because again, the the point of competition is that it reduces prices, right?
Josiah Neeley: As.
Josiah Neeley: Right. Right.
Pascal-Emmanuel Gobry: But if you have a monopoly buyer, you you you don't reduce price because there's, or potentially you don't reduce price because there's innovation in the marketplace or whatever.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: You reduce price just because you force people to sell you at a price where they basically don't make any money.
Josiah Neeley: Yeah. Okay. So yeah okay so there's there's um there's kind of two stages for this, right wholesale and retail.
Pascal-Emmanuel Gobry: or Or they sell you at a price which just doesn't reflect economic realities, it just reflects monopoly.
Josiah Neeley: okay So at the grid level, ah basically they hold what the way that the prices are set is they hold an auction.
Pascal-Emmanuel Gobry: Yeah.
Josiah Neeley: So they say the grid operator um says, OK, we need this much. you know Let's say we need 70 gigawatts of electricity.
Josiah Neeley: who Who can provide it to us? And all the different plants will say, I can do it at 2 cents a kilowatt.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: I can do it at 1 .5 cents a kilowatt, blah, blah, blah, blah.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: And they basically say, yes, they do yeah it's a reverse auction.
Pascal-Emmanuel Gobry: Right. There's an option.
Josiah Neeley: and ah they So so that's how that's how the wholesale prices are set. And then an individual provider right says, okay, this is this is how much money, ah this is how much electricity I need.
Josiah Neeley: They buy it off the grid at that price and then selling it ah to the end user or customer. They have some sort of contract.
Pascal-Emmanuel Gobry: Okay.
Josiah Neeley: Usually it's for like a set. yeah Usually they have like a fixed rate, you know, that you're doing or something else like that, uh, to, to have, cause an individual like, you know, granny or person with a family or whatever, uh, they don't want to be following, you know, the wholesale market prices, which can like up and down, you know, they want something that's, you know, they don't have to think about.
Pascal-Emmanuel Gobry: Okay. Okay.
Pascal-Emmanuel Gobry: Right. Yes. Yes. Yeah. Yeah. And there's like lots of stuff about hedging and all of that.
Josiah Neeley: Yeah.
Josiah Neeley: Correct.
Pascal-Emmanuel Gobry: Uh,
Josiah Neeley: Yes. Yeah.
Pascal-Emmanuel Gobry: Okay, so that's great. ah
Pascal-Emmanuel Gobry: Why is it that when it snows in Texas, which I agree is not often, but that's happened.
Josiah Neeley: Yes.
Pascal-Emmanuel Gobry: Why is it that when it snows, all the power goes out?
Josiah Neeley: Right. Well, ah so one thing.
Pascal-Emmanuel Gobry: With this wonderful free market where he had dozens of providers, you've got the guy with his solar farm, the guy with his gas plant, the guy with his windmills, all competing to provide
Josiah Neeley: Right.
Josiah Neeley: Yeah. Right. So Mo the electric grid in most places, it's designed, it's, it's designed around the peak, you know, so
Pascal-Emmanuel Gobry: Yes.
Josiah Neeley: ah Because we don't store electricity on any large scale, I mean, there's some there's some ways to do it. You can do it with like hydro or so to some extent batteries.
Josiah Neeley: But for the most part, power has to be generated basically while it's used.
Pascal-Emmanuel Gobry: yes
Josiah Neeley: So that means that the time of day and even the time of year when you use the most power, a lot of the grid and thinking gets ah goes into making sure that you can get as much juice out of the system at that moment, right?
Josiah Neeley: Which for Texas, it's typically afternoons and the in the in the heat of summer, right?
Pascal-Emmanuel Gobry: Yeah.
Josiah Neeley: That's when you want that's when you need the most power.
Pascal-Emmanuel Gobry: Yeah.
Josiah Neeley: So are our power plants, our grid, everything was designed for that. And the problem is, The way you build a power plant to optimize for summer weather is different than how you would optimize something for winter weather, right?
Josiah Neeley: Because, you know, you want power plants, they generate a lot of heat and you don't want them to overheat.
Pascal-Emmanuel Gobry: Okay.
Josiah Neeley: So you want heat to be able to dissipate when it's really hot. But if it's cold, you need to be able to like keep heat in or or, you know, ah have stuff to like protect you from the elements, that actually can make harder in the summer.
Pascal-Emmanuel Gobry: ah
Josiah Neeley: ah
Pascal-Emmanuel Gobry: so hey i remember but but but but but but but
Josiah Neeley: yeah know
Pascal-Emmanuel Gobry: Okay.
Josiah Neeley: yeah
Pascal-Emmanuel Gobry: ah so okay you you you You design your grid for the peak. Okay. I recently learned that France still has and always had coal -fired power plants, but only for the peak, right?
Pascal-Emmanuel Gobry: Because that's that's the one downside of nuclear, which is it gives you this all the time.
Josiah Neeley: right
Josiah Neeley: It's very, yes, yeah.
Pascal-Emmanuel Gobry: And so we have like five coal fire power plants that we turn on like twice ah twice a year because like the one thing about coal is like you turn it on like this and it just provides energy right away because literally you just shovel thing into the fire and it gives you energy.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: um So okay, ah but why, you know, country A, ah same power plant, same grid, blah, blah, blah, very cold.
Josiah Neeley: yeah
Josiah Neeley: Yeah. Yes.
Pascal-Emmanuel Gobry: There's peaks of energy consumption because people are heating their homes.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: Country B, same grades and blah, blah, blah. Very hot country. There's peaks of energy because everybody's using air conditioning. like it's the It's the same idea. like youre you know When you have extremes of temperature, people use more electricity.
Josiah Neeley: Yeah.
Josiah Neeley: Correct. Yeah.
Pascal-Emmanuel Gobry: but you're still it's still you know The electricity doesn't know that it's going into an AC unit versus a heater.
Josiah Neeley: Electricity.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: i mean or
Josiah Neeley: Yeah, but.
Pascal-Emmanuel Gobry: Again, very sixth grade level ah ah ah question. um
Josiah Neeley: ah Well, here maybe this is an analogy. Okay, so if you want to put like, um, you know i i I had to refill ah the windshield wiper fluid on my car recently.
Josiah Neeley: right and you know I don't know, but if you go in to buy windshield wiper fluid, you find that there's like two different types.
Pascal-Emmanuel Gobry: Yeah.
Josiah Neeley: right There's a cold weather type and there's a warm weather type right for you know if it's freezing out or if it's not.
Pascal-Emmanuel Gobry: Okay.
Josiah Neeley: and I don't know a lot about the chemical processes used to make this, but Apparently, there's you know ah windshield wiper fluid, its performance depends on what the weather is, right?
Pascal-Emmanuel Gobry: Okay.
Josiah Neeley: You want to do freezing, you want so you want to have some anti -freeze in there so that when you put the windshield wiper fluid, it doesn't create a code of ice on the front of your car.
Pascal-Emmanuel Gobry: Okay.
Pascal-Emmanuel Gobry: Okay, okay.
Josiah Neeley: that antifreeze doesn't is going to make it perform less well when it's not freezing. okay yeah so Similarly with a power plant, you wind turbine, gas plants, whatever, you're going to if you build the plant power plant to optimize the amount of juice that you're going to get out of that power plant, it's gonna you're going to want to know what what are the weather conditions going to be like.
Pascal-Emmanuel Gobry: Okay.
Pascal-Emmanuel Gobry: Okay.
Josiah Neeley: To protect yourself from the cold, you're making the plant more ah inefficient in warm water and vice versa, okay?
Pascal-Emmanuel Gobry: okay okay okay so you if it you does if you Okay, so it's the plant.
Josiah Neeley: Yes, right.
Pascal-Emmanuel Gobry: It's not the grid, it's the plant. So if you build a gas plant in a hot country, you're going to design it and in such a way that it produces more energy in warm weather, but if it snows, it shuts down.
Josiah Neeley: Yeah.
Josiah Neeley: Right, right.
Pascal-Emmanuel Gobry: And and vice versa, if you if you're building a gas -fired plant in Norway, um which you might, you're going to like weatherize it or something.
Josiah Neeley: Correct. Yes. Yeah. yeah
Pascal-Emmanuel Gobry: ah And the downside of that is that if there's ever a heat wave in Norway, that the the okay, that that's fascinating.
Josiah Neeley: Yes.
Pascal-Emmanuel Gobry: um you You can say hello to my co -host, whose name is Vesta.
Josiah Neeley: And it's not totally.
Josiah Neeley: Hello. Vesta, yes.
Pascal-Emmanuel Gobry: And and she she like she likes to ah she likes to join sometimes.
Josiah Neeley: I assume she does not have kids if her name is Vesta.
Pascal-Emmanuel Gobry: Yes, yes.
Pascal-Emmanuel Gobry: What?
Josiah Neeley: but The dog, if it's named Vesta, I assume the dog is not does not have kids.
Pascal-Emmanuel Gobry: Yeah.
Josiah Neeley: It's not a mother.
Pascal-Emmanuel Gobry: ah No, she's too young to be a mother.
Josiah Neeley: Okay, all right.
Pascal-Emmanuel Gobry: um Although the boys are starting to show interest, she's at she's at that age.
Josiah Neeley: Uh -oh.
Pascal-Emmanuel Gobry: um ah But no, she doesn't she doesn't have ah she doesn't have kids yet. i'm i'm i'm I'm lobbying to be able to breed her, but my wife says no.
Pascal-Emmanuel Gobry: and um
Josiah Neeley: well
Pascal-Emmanuel Gobry: To breed a dog, I found out because this is France, ah if you want to breed your dog and sell the puppies legally, there's like a million forms you have to fill.
Pascal-Emmanuel Gobry: um
Josiah Neeley: Right. I'm sure.
Pascal-Emmanuel Gobry: ah And, you know, i i if if i would if I was to breed her, I wouldn't keep all of the puppies. I would just keep one or two. and And I would prefer not to kill the other ones because, you know, I mean, I grew up on a farm.
Josiah Neeley: ah And eat the rest.
Pascal-Emmanuel Gobry: I'm not i'm not squeamish, but I would prefer not to. So we're probably not going to breed her.
Josiah Neeley: Right. Yeah. I mean, I, just well, I don't, I don't know. Can you get, yeah you are you allowed to give the puppies away or sell them to other people or? Do you base?
Pascal-Emmanuel Gobry: Well, I mean, it's always like, I mean, you know, if I put an ad on Facebook and says, and say, you know, here are some Labrador puppies for 200 or whatever, and like, you know, am I gonna get arrested?
Josiah Neeley: Wait.
Pascal-Emmanuel Gobry: Probably not, but I'm an idiot, i .e. a responsible citizen.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: So I like to stay within the law. Also, she's a, she's a yes, she's a pure breed, isn't she? Isn't she? ah Yes, because we we believe in racial purity around here, at least for dogs.
Josiah Neeley: yeah
Josiah Neeley: ah
Pascal-Emmanuel Gobry: And so, ah you know, In order to get the paper, if we were going to breed her ah in order to get the paperwork that shows that blah, blah, blah, blah, blah, blah, which would you know increase tremendously the value of the...
Josiah Neeley: We should probably go.
Pascal-Emmanuel Gobry: um she's ah She's just a great dog and I would and i would like to own you know one of her children. but theyre the If you think about the details in the log and the logistics, you you realize that it gets a lot complicated. Again, if we were living on the farm, I i would i would i would just breed her and like, drown.
Pascal-Emmanuel Gobry: it's Because that I mean, that's that's the way our grandparents did it.
Josiah Neeley: Yes, that's right.
Pascal-Emmanuel Gobry: ah Let's be let's be honest for a second.
Josiah Neeley: yeah
Pascal-Emmanuel Gobry: ah But you know, I'm a lib and so and so I would i would prefer not to do it that way. ah All right. ah All right.
Pascal-Emmanuel Gobry: So I think I understand Texas now.
Josiah Neeley: Okay, great.
Pascal-Emmanuel Gobry: ah What?
Pascal-Emmanuel Gobry: What's the benefit of this approach? is it so There's a lot more diversity of of power generation. that's you can You can think of it as a good in itself because it sort of creates resiliency, it creates you know innovation.
Josiah Neeley: yes
Josiah Neeley: Yes.
Pascal-Emmanuel Gobry: You have solar entrepreneurs over there and wind entrepreneurs over there and gas entrepreneurs over there. and that like that' intrinsically a good thing.
Josiah Neeley: yeah Yeah.
Pascal-Emmanuel Gobry: Okay. ah Do you have ah lower prices?
Josiah Neeley: So traditionally, we have had lower prices. I think we still ah have below average prices um you know than the rest of the nation. And I think when I've looked at um the research, the science on it, it does look like it does ah competition has saved us quite a bit of money to consumers over the 30 years or whatever. So that ah is definitely a big advantage. And the other big advantage I think that has come from this is
Josiah Neeley: One thing that tends to happen when you have a monopoly is they get kind of set in their ways a little bit. You know, they know what works for them and that can be fine if you're in a industry or area that's not changing that much, right?
Pascal-Emmanuel Gobry: Yeah.
Josiah Neeley: But with ah energy, with electricity, There's so much potential for change now, uh, that having a more competitive system allows for people to take more advantage of that. And I think, you know, you're seeing that now, like for a long time, electricity use in the United States and most parts of the United States was either flat or declining because
Josiah Neeley: and ah like our all of our devices and everything, we're getting a lot more energy efficient. And ah we didn't have we were kind of de -industrializing, the US was a little bit, so we weren't making as much stuff.
Josiah Neeley: And population was still growing, but not at a huge clip. So for all those reasons, like you basically the demand next year was gonna be about the same as this year and the same year after that.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: And now, between ah AI data centers, crypto, EVs a little bit, and ah reindustrialization, the projections are that demand is is going to go way up.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: And that's fine, but you need a more nimble system to deal with that because you got to be able to build a bunch of stuff, you got to be able to
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: to hook it up and, you know, accommodate it at all.
Pascal-Emmanuel Gobry: Right, right, right.
Josiah Neeley: And so I think a system with some competition in it is going to better handle that than some other places where you talk to people and so in other parts of the country, you know, about like data centers or whatever, and they're kind of scared of it because it's like, well, we can't have more demand, you know, we can't have like new factories.
Josiah Neeley: If the factories reopen, like how are we going to power them? um That's not, I think, that's, I don't think that's the question that a successful country is going to be.
Pascal-Emmanuel Gobry: Okay, so basically if you want to build a factor a factory or data center, you have to do it in Texas or France and nowhere else.
Josiah Neeley: Yes.
Pascal-Emmanuel Gobry: Uh, that's the, yeah. Uh, all right. Well, excellent segue to, cause. Okay. We're going to have a huge demand, increase in demand for the reasons you cite. So I have, uh, two words, uh, on my notes and we can take them in turn. Um, if you can, if you want to do one in particular before the other, that's up to you. I have nuclear and Nepa.
Josiah Neeley: right
Pascal-Emmanuel Gobry: So which one do you want to do first?
Josiah Neeley: um Right Well, let's talk about let's talk about Nipah about permitting Nipah, yeah, I mean it's all right.
Pascal-Emmanuel Gobry: Oh, I'm sorry, Nipah.
Josiah Neeley: You're French one of the things about
Pascal-Emmanuel Gobry: <unk>ba
Josiah Neeley: Being a foreigner is, you're allowed to pronounce words however you want, and we just assume it's part of the accent, you know? So, you don't have to worry about that.
Pascal-Emmanuel Gobry: ah ah All right, so, um all right, so NEPA, let's let's go.
Josiah Neeley: Okay.
Pascal-Emmanuel Gobry: So, ah framing this, ah basically, so i I forget what the ah exact words thing, but it's like National Environment Something Act, and it's,
Pascal-Emmanuel Gobry: It regulates what you can build in a bunch of domains, including energy. in One of the beat big biggest problems with ah NEPA is it allows a bunch of people to sue, to either petition ah the government, the EPA, blah, blah, blah, or to outright sue.
Pascal-Emmanuel Gobry: If they have any reason to believe that any given project is going to damage the environment. And the problem with that is that of course there's, you know, lots and lots of.
Pascal-Emmanuel Gobry: and NGOs, interest groups, and so on and so forth, whose full -time job is to do NEPA lawsuits and to essentially stop projects.
Pascal-Emmanuel Gobry: And so projects have to go through like five, 10, 20 years of red tape before they can get built.
Josiah Neeley: Yeah I Think that's yeah that that is that that that is basically right, you know, we had a the period in the United States, especially after in the decades after World War II, where we just built a lot of stuff, right?
Pascal-Emmanuel Gobry: Okay. Is that is that is that a fair summary?
Josiah Neeley: Most of our infrastructure, eight it like a lot of it dates from that period, and a lot of that, I think, was really good.
Pascal-Emmanuel Gobry: Yes. Yes.
Josiah Neeley: But there were some issues that, um you know in retrospect, I think they caused kind of a backlash. Even things like urban renewal, slum slum clearance, you know this is the it's all part of the same mindset.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: so the
Pascal-Emmanuel Gobry: Robert Moses.
Josiah Neeley: Robert Moses, yeah. um So in the early 1970s, one of the things they did is they said, okay, before you issue permits for some sort of new building project, you have to ah do an environmental impact analysis. So you basically have to say,
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: What is the impact of this going to be? What are the alternatives? How can we minimize impact? And interestingly, this is it's it's not ah itself a substantive requirement right in that it you can do if you do the impact analysis, it's not like you necessarily have to reach a certain result in order to be able to do the ah project.
Josiah Neeley: So you could be like, yeah, we've decided
Pascal-Emmanuel Gobry: So legally, you can say, yeah, it's totally going to kill this butted owl.
Josiah Neeley: Right. Well,
Pascal-Emmanuel Gobry: Screw this butted owl. But I'm just going to build it anyway.
Josiah Neeley: yeah, i mean endangered species is a separate thing, but yes, basically. ah And at the time oh when this first started, it was thinking, okay, you know, it's not like you're going to do these reports.
Josiah Neeley: It'll take a little while, but it won't, it won't take a huge amount of time. However,
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: As you noted, what happens is if if you do the report and then someone an environmental group or someone can sue you and say, hey, you didn't consider this, or you didn't properly do that.
Pascal-Emmanuel Gobry: a
Josiah Neeley: And ah so as a result, over time, in order to protect themselves from the lawsuit, we're preparing these reports. The reports get longer and longer.
Josiah Neeley: And the time it takes to make them gets longer and longer, which slows down all the projects, which is the point because with a lot of these groups, their goal is not to win necessarily.
Pascal-Emmanuel Gobry: Yes.
Josiah Neeley: It's to delay, you know, cause they believe delay is life.
Pascal-Emmanuel Gobry: Yes.
Josiah Neeley: And oftentimes it is. Um, that's a Lord.
Pascal-Emmanuel Gobry: well and so the the the i mean The problem with delays is that ah anybody who's done a discounted cash flow analysis,
Josiah Neeley: Right. Right.
Pascal-Emmanuel Gobry: ah you know the further back you move the the the moment when the money from your investment starts coming in,
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: The higher the discount rate, because every you have to apply a discount rate to the cash flows, and ah the the further back in time it is, the higher the discount rate. And so the lower your ROI is, and so projects become economic, and so it becomes rational to just not not do it.
Josiah Neeley: Yes, so a lot of projects, you know, I think we Don't see a lot of the some of the negative effects of nipa because there are a lot of projects that people don't even consider anymore Because they just know Like this is this like it's not worth it to wait 10 years, you know in order to figure all this out, right?
Pascal-Emmanuel Gobry: Yeah.
Pascal-Emmanuel Gobry: yeah
Josiah Neeley: and then of course yet even the people who are Dumb enough to actually try and go forward with the project oftentimes, you know after 10 years they they kick themselves Right.
Pascal-Emmanuel Gobry: Their investors pull out.
Josiah Neeley: Yeah um So that's, that's a big problem. Uh, and it's, it's getting progressively worse over time. It did get a little bit better under the Trump one administration.
Josiah Neeley: The times came down a little bit, but then they started going back up under ah Biden.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: And so this is, I think, this is a rare instance of what you still call like a bipartisan issue where there are, uh,
Pascal-Emmanuel Gobry: Yeah, there's, there's like some pro growth Democrats that are
Josiah Neeley: Right. Well, and it, yeah, they're pro -growth Democrats. And then the other thing is, uh, it was one thing when, in terms of energy, when the projects involved were like fossil fuel related, uh, you know, people were like, well, who cares?
Pascal-Emmanuel Gobry: Mm hmm.
Josiah Neeley: But now, because there are a lot of clean energy projects, wind, solar, whatever, they also are facing NEPA problems.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: And so people who before were not that sympathetic, Now we're starting to think, well, maybe actually NEPA is a problem if if you like me we see we're going to you know do this build all this renewable energy to save the planet.
Josiah Neeley: But actually, it takes 10 years to build a transmission line.
Pascal-Emmanuel Gobry: Right. I mean, we've got to build all that offshore wind because you know ah out out right outside of Barack Obama's house on Martha's Vineyard, um and in the white section of Martha's Vineyard where where he lives.
Josiah Neeley: You've got to build an offshoot. Right.
Josiah Neeley: The NEPA, the environmental impact
Josiah Neeley: the white section, yeah. ah The, yeah, I'm sure the environmental.
Pascal-Emmanuel Gobry: but that's that's not That's not a joke. there's there's There's a black section in Martha's Vineyard, and that's where he decided not to live.
Josiah Neeley: I was there. Okay, I'm not, I'm not, I've never been to Martha's Vineyard. So I don't know about the racial demographics of it. But um
Pascal-Emmanuel Gobry: that's that That's like a very revealing thing about the kind of person that Barack Obama is, which is ah he's he's he's not he's you know he he doesn't identify with actually with the African -American community in the US.
Josiah Neeley: but
Josiah Neeley: Uh -huh.
Pascal-Emmanuel Gobry: He has high melanin in his skin, but he's he doesn't actually think of himself as like a black person. he's He thinks of himself as a white liberal who grew up in Hawaii.
Pascal-Emmanuel Gobry: Anyway, so he so Barack Obama lives in the white section of Martha's Vineyard and we should deregulate so that we can build like a huge curtain of very tall windmills like right outside.
Josiah Neeley: Yeah, right. Yes. Yes, that's right. That's right, yeah.
Josiah Neeley: Um, so yeah, so I mean, that's a problem and is you right now.
Pascal-Emmanuel Gobry: That's the most pressing issue in in energy.
Josiah Neeley: Uh, president Trump, if you're listening and I know you are, um, uh, we got it. We got to deal with something actually JD, JD is listening. He can, he can still talk about it.
Josiah Neeley: but el
Pascal-Emmanuel Gobry: i i mean i I assume if you're in the West Wing, you don't have time to listen to podcasts, but there' there i mean there're you know there's probably like people who know people in the West Wing who are listening.
Josiah Neeley: Yeah. Well, i i um I will say I do know that JD, at least ah during the transition, he did have time to listen to podcasts and he was listening to ah some of them.
Josiah Neeley: So, you know i don't know, I don't know.
Pascal-Emmanuel Gobry: Okay.
Josiah Neeley: Now that he's vice president, you know, I'm sure his like the days of the vice president.
Pascal-Emmanuel Gobry: I mean, if you're if you're vice president, you're basically unemployed, right? you're that's the That's what the job is, right?
Josiah Neeley: hey yeah
Josiah Neeley: um yeah
Pascal-Emmanuel Gobry: ah So he's he's basically, i you know, I take it back. He's probably like listening. That's probably all he does.
Josiah Neeley: yes that's right
Pascal-Emmanuel Gobry: That's probably all he does.
Josiah Neeley: yeah yeah forum
Pascal-Emmanuel Gobry: It's like, come play with the kids. No, I'm doing, you know, national security briefing.
Josiah Neeley: Right right trying to get good at Diablo or whatever Yes,
Pascal-Emmanuel Gobry: Yeah, he's he's playing online games with Elon.
Josiah Neeley: that's right, yeah
Pascal-Emmanuel Gobry: ah
Josiah Neeley: Okay. So anyway, so, uh, uh, you know, I, I hope.
Pascal-Emmanuel Gobry: Right, so ah jokes about Barack Obama and JD Vance, done.
Josiah Neeley: Wow. Yeah.
Pascal-Emmanuel Gobry: ah Yes, yes.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: Petting the dog in progress.
Josiah Neeley: they
Pascal-Emmanuel Gobry: so how how what So I guess two questions. So you had a bunch of NEPA reform bills, ah especially during the lame duck.
Josiah Neeley: yeah Right.
Pascal-Emmanuel Gobry: ah around around trying to sort of figure out workarounds.
Josiah Neeley: Yes.
Pascal-Emmanuel Gobry: So I guess two questions like what's the dream scenario, the dream reform, like a straight repeal or something and like what's the most likely thing that's going to happen?
Josiah Neeley: Yeah, I think, um, I don't think, uh, just getting rid of NEPA is, you know, in in the cards, I would say. Um, but I do think one of the things that they need to look at is who has standing to bring some of these lawsuits, right?
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: And working like on the litigation piece of what exactly.
Pascal-Emmanuel Gobry: So it's explain the standing issue more more more precisely because it's a huge deal.
Josiah Neeley: Yeah. I mean, if you're. I mean, if, if like, let's say that, uh, the government wants to build a highway through your house, right?
Josiah Neeley: Or three, you know, then you could say, okay, you as the, no yeah.
Pascal-Emmanuel Gobry: Yes.
Pascal-Emmanuel Gobry: I hope they do.
Josiah Neeley: have
Pascal-Emmanuel Gobry: It's really ugly.
Josiah Neeley: yeah Um, right.
Pascal-Emmanuel Gobry: Also, they have to pay me like a ton of money.
Josiah Neeley: Right. Um, you as a landowner, clearly you're affected by that. So you would have standing to challenge it. Okay. But, uh,
Pascal-Emmanuel Gobry: right
Josiah Neeley: The standing in ah these cases, because we're dealing with environmental stuff, you know the the frog, ah or the trees, or whoever, ah they don't have standing.
Josiah Neeley: But people, these environmental groups, they can have standing basically on behalf of it.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: It's like, i like look right I like looking at the
Pascal-Emmanuel Gobry: Because they commune with the trees, right? but Unlike capitalists who hate trees.
Josiah Neeley: hate trees Well, capitalists love trees because they can cut them down. but
Josiah Neeley: i mean
Pascal-Emmanuel Gobry: By the way, I mean, i'm sure you I'm sure you know this, but like this is a true fact that logging like increases the total and amount of because people plant more than they anyway.
Josiah Neeley: correct
Pascal-Emmanuel Gobry: ah Yeah, so basically, if you're, you know, people who are directly affected by a project can sue to stop or amend it or whatever.
Josiah Neeley: i mean
Josiah Neeley: right
Pascal-Emmanuel Gobry: Okay, that fair enough. That's America.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: Everybody's got a right to their day in court, but like some environmental NGO in New York or or San Francisco can sue to stop a project in Nebraska just because just because they don't like it and and they're green. and and and and they feel like it. And again, like, as you say in theory, okay, you know, somebody's got to be there to speak for for the trees, but in practice, because you have a million of these NGOs who are funded and whose full -time job is to look for these lawsuits to to do, it just means that, you know, whenever whenever you try to build something, you get 11 lawsuits. So the issue issue that's that's the standing issue.
Josiah Neeley: Yeah. And then there's also a question of, you know, what do they have the right to challenge? As I mentioned, in terms of like these impact statements, you know, it's so it's like completeness, like you, okay, you were going to build a highway, but you didn't consider the alternative of having a footpath, you know, or gondolas or,
Josiah Neeley: whatever. And so just having some stricter standards for that, um, I think would be useful. One thing that people have, some of the reforms have proposed like time limits, like the report has to be done within a certain amount of time or whatever.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: But if you don't limit the, um, ability to sue, you know, or you you don't create standards for what they can sue on. that's not going to help you because then they'll just like, they'll do a rush job, but then they're guaranteed ah to get found deficient in court because they weren't able to like cover everything.
Pascal-Emmanuel Gobry: Right, right, right, right.
Josiah Neeley: And so the court will say, well, go back and do it again. You're not actually saving any time.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: ah So that, you know, and then ah exemptions, right? i You know, there's systems for like, you can be exempt from some of the requirements. um I think in the executive order and they maybe expanded some of that, like for what it, what is exempt from some of the stuff.
Josiah Neeley: So that's probably the, this, those are the sort of avenues where I think you'll probably see some action, uh, hopefully to try and get the, get the, the time to a more reasonable amount.
Pascal-Emmanuel Gobry: Okay. Okay. Great. Uh, let's do nuclear.
Josiah Neeley: Yes. It's speaking of reasonable timelines, you know?
Pascal-Emmanuel Gobry: as yeah ah ah
Pascal-Emmanuel Gobry: So so we were we were saying, oh, if you want to build a factory someplace, you know, you should do it either in France or Texas. I believe that last year, like you only had two places in the world that put online ah new nuclear plants and though they were literally France and Texas.
Pascal-Emmanuel Gobry: I read something like that. Or was it North Carolina?
Josiah Neeley: So there are
Pascal-Emmanuel Gobry: But basically there's been like, ah me I mean, maybe excluding China or something, but certainly in the rich world, you had like two places that are doing new nuclear and it's France and the US.
Josiah Neeley: Yeah, so there's there's a there's a number of new nuclear projects that are going on in the US.
Pascal-Emmanuel Gobry: yeah
Josiah Neeley: I think the the thing that happened in Texas um was a micro reactor, which is you know kind of ah where there's a lot of energy is now of...
Josiah Neeley: and instead like Yes, now a small...
Pascal-Emmanuel Gobry: So like the small reactors. Okay, so let let let's go back.
Josiah Neeley: Yes.
Pascal-Emmanuel Gobry: the why Why haven't we built any new nuclear for the past 50 years?
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: ah In France, the answer is because we haven't needed any, but that's not the answer in the US.
Josiah Neeley: Right. Yeah. Uh, okay. So there's, there's two, there's two issues or challenges for nuclear building new nuclear and, uh, they're related. So, you know, people kind of, uh, debate over to what extent they're, they're. The real, the real problem. So.
Josiah Neeley: The first one is regulatory, right? So the process of getting a new nuclear plant up online and licensed and everything.
Josiah Neeley: I mean, you you know, we we thought NEPA was bad, but NEPA is a walk in ah in the park compared towards the Nuclear Regulatory Commission and and all of that.
Pascal-Emmanuel Gobry: Yes.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: So that's a huge problem, you know, just getting it
Pascal-Emmanuel Gobry: Right. Right.
Josiah Neeley: uh, you know, the designed, approved, all the safety stuff or whatever. Uh, the second one, the second question issue is economic, right?
Josiah Neeley: So nuclear plants, they're very costly, right?
Pascal-Emmanuel Gobry: Yes.
Josiah Neeley: Huge capital expenditure upfront. And then once you've made that capital expenditure in order for it to pencil out, you have to like make the money back slowly over 40, 50 years.
Josiah Neeley: And it's hard to predict electricity prices that far out.
Pascal-Emmanuel Gobry: yeah
Josiah Neeley: You know, that there tend to be swings and nuclear has had a lot of trouble competing, you know, first with natural gas and.
Pascal-Emmanuel Gobry: right
Pascal-Emmanuel Gobry: right
Pascal-Emmanuel Gobry: If only there was an an entity that could borrow at very low interest rates.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: ah and and and had an interest in in like ensuring ah you know infrastructure and like public goods. I'm just throwing it out there.
Josiah Neeley: Yeah. I mean, I guess you know even from the even from the standpoint of a ah you know public entity, if you if you're if you're a public entit and entity and you have a choice between spending money to build a nuclear plant or spending it to build a gas plant, it's not immediately obvious why you would prefer the nuclear plant.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: are some You know, uh, there's some advantages that nuclear has over gas, right? It's carbon free. All right. So if that's something that's important to you.
Pascal-Emmanuel Gobry: It's carbon free. it ah yeah well Speaking of difficulty predicting prices, you know you're not hostage to the vagaries of the global commodities markets.
Josiah Neeley: No. Right. But then, yeah, it doesn't require a fuel, you know, so the way that gas does, or even, ah you know, coal, you got to source the coal from somewhere.
Pascal-Emmanuel Gobry: Yes.
Josiah Neeley: um So there are, you know, there's advantages to it, but there's also a drawback.
Pascal-Emmanuel Gobry: Yeah, but I mean, there's, you know, the people shared this, ah ah this clip of Nick Clegg, you know who Nick Clegg is.
Josiah Neeley: I do, yes, I remember him, Mr.
Pascal-Emmanuel Gobry: So, yes. um
Josiah Neeley: liberal.
Pascal-Emmanuel Gobry: ah He was interviewed when he became deputy prime minister of the UK and like they were talking about energy. He says, why don't you build nuclear? And he says, oh, there's no point in one common line until 10 years. And of course, now we're 10 years later. And some people are re -sharing that clip going like, oh.
Pascal-Emmanuel Gobry: a
Josiah Neeley: and Right, right.
Pascal-Emmanuel Gobry: We would have, literally we would have it now. And of course now Nick Clegg, you know, is no longer in office. He made a bunch of money at Facebook. And so, you know, uh, from, from a, uh, I, by the way, I, you know, I actually really like and respect Nick k Clegg as a person.
Josiah Neeley: but Who's laughing now?
Pascal-Emmanuel Gobry: He's the, you know, he, he's a center left guy, but he's, he's like a wonderful guy personally.
Josiah Neeley: yeah
Pascal-Emmanuel Gobry: But like, he did the rational thing as a politician, right?
Josiah Neeley: Right. Yeah. So I mean, so those are, those are, I think that the two, uh, the two big challenges that you face. The one thing is, um, you know, regulatory, it takes a huge amount of time to build it. And then the other one is just in terms of the economics for, for right now, nuclear doesn't seem to be all that competitive with other, with other energy sources. Right. Um, and even a lot of existing nuclear plants have had trouble.
Josiah Neeley: remaining online because they're competing with the lower cost natural gas.
Josiah Neeley: ah for
Pascal-Emmanuel Gobry: Interesting.
Josiah Neeley: um so the And some of the some of the price, of course, feeds back into the regulatory process because regulation costs, you know there's a there's like there's a dollar value cost to regulation having to go through that whole process of permitting.
Pascal-Emmanuel Gobry: Right, right, right, right, right. i mean the the the the the problem slash positive nuclear is that it costs a lot of money upfront, but it it costs very little money to to run.
Pascal-Emmanuel Gobry: like ah Again, i don't I don't mean to like bash you over the head with with French stuff, but like the French electricity is famously cheap, ah and you know it just which is why the Germans you know literally, like everybody else buys a Belgian
Josiah Neeley: Yeah. and no right yeah
Pascal-Emmanuel Gobry: Italy. ah it's there's There's a website that tracks life, sort of energy consumption, net, and like you go every morning. and like Basically, like people when people wake up, you've got France that's bright green because it's exporting energy. and like Literally, all of the countries around it are red because they're all importing the energy from France. like when when When people get up in Germany, all of a sudden, and
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: um so um Okay, so nuclear, you know, ah very very high upfront costs. My point earlier about, you know, government borrowing at low interest rate. I mean, I wasn't joking, like this is how the railroads in the US were built. Like the the the the ah libertarians say, oh, you know, we build the railways through private enterprise. All of those companies had state guarantees, like they they They, you know, bribed politicians and the politicians passed laws, issuing passed laws, backing, you know, giving a guarantee by the state of Virginia or whatever.
Josiah Neeley: Right.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: to a specific company to build a railway. and like this is you know Minus the bribery, which you know as it was the 19th century, that's a totally legitimate use of you know of government money, of the ah borrowing capacity of government at lower interest rates than private sector actors because it is.
Pascal-Emmanuel Gobry: like It is a 10 -year, 20, 30 -year process.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: It's infrastructure. I mean, you know if you think about all of the other things that the U .S. government borrows money to to buy, you know that's certainly like that's certainly the least objectionable.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: ah thing. so ah So I guess that's that's just a ah sidebar or an aspect of like my broader question, which is what's you know why are we talking so much about nuclear now? OK, because there's going to be all this new demand. Are we going to see new nuclear? Is it just going to be small modular reactors because there's like a legal loophole to get around the NRC or the NRC? Or is it going to be even big?
Pascal-Emmanuel Gobry: Nuclear reactors or what?
Josiah Neeley: i So ah there are some people who have ah been trying for to build you know bigger, old nuclear reactors.
Josiah Neeley: um And also bring back online some of the mo currently mothballed reactors, you know, Three Mile Island.
Pascal-Emmanuel Gobry: Yes. Yes.
Josiah Neeley: They are bringing back on one of their units to provide power for Microsoft data centers, I think is the
Pascal-Emmanuel Gobry: Yes.
Josiah Neeley: plan.
Pascal-Emmanuel Gobry: Yeah.
Josiah Neeley: But most of the excitement I think is with smaller reactors awesome because youre part of it is regulatory.
Pascal-Emmanuel Gobry: yeah
Josiah Neeley: um There's a piece of it legislation passed called the Advanced Act and it's supposed to help provide a more streamlined regulatory approval process for smaller reactors.
Josiah Neeley: But then the other thing you know Traditionally, ah nuclear power is a rare industry where building nuclear power plants has gotten more expensive over time. Normally with the technology,
Josiah Neeley: When it starts out, it's very expensive. And then as it scales up and evolves, it gets cheaper to make on a per unit basis.
Pascal-Emmanuel Gobry: Right, right, right.
Josiah Neeley: And that hasn't been the true true for nuclear plants because they have mostly just all been, each one has to kind of be designed from scratch for the big light water reactors.
Pascal-Emmanuel Gobry: Yeah.
Josiah Neeley: So they're they're kind of, they're artisanal nuclear power plants and The hope with the smaller reactors is that you can mass produce them, right?
Pascal-Emmanuel Gobry: Right, you can mass produce.
Josiah Neeley: And build a lot of parts, you know, assembly line fashion or whatever, and that that you'll tap into that ah cost curve and it will actually come down. So will that actually work?
Josiah Neeley: I have no idea. um I'm not that kind of expert, you know, ah but I think it's an interesting thing to to let people try.
Pascal-Emmanuel Gobry: All right, that's that's ah that's a sort of tepid endorsement.
Josiah Neeley: So that's,
Josiah Neeley: Yes, right. well yeah this is happeningy i mean I don't want to undersell the ah the challenges I think that the field faces, but I also don't want to undersell like the potential for innovation.
Pascal-Emmanuel Gobry: ah
Josiah Neeley: you know it was not It was not that long ago, ah relatively speaking, when everybody just assumed that natural gas was an inherently high cost.
Pascal-Emmanuel Gobry: Right. Yes.
Josiah Neeley: product and then you had fracking and suddenly we had you know tons and tons of gas all over the place.
Pascal-Emmanuel Gobry: Yes.
Josiah Neeley: right and so that's That sort of thing can happen.
Pascal-Emmanuel Gobry: yes
Josiah Neeley: You know you can't necessarily predict it and that could you could easily see something like that happening with these smaller reactors with nuclear as well or not. you know the other thing yeah yeah Sometimes you're in a hype cycle and and it pays off.
Pascal-Emmanuel Gobry: but Yes.
Josiah Neeley: Sometimes you're in a hype cycle and it doesn't pay off. so
Pascal-Emmanuel Gobry: Right. Yeah. All right. ah All right. Well, we're getting close to our limit. So I'm going to ask you the final question, which is a the question we ask every guest, which is recommend a book. It can be any book, fiction, nonfiction, that's outside your area of expertise.
Josiah Neeley: that's outside, oh, well that's great. Anything can be outside my area of of expertise. um I'm reading the, um so I'm currently reading the the Stalin, those you know there's that massive doorstop series of ah ah Stalin biographies by Stephen Kotkin, I think is how you say his name.
Pascal-Emmanuel Gobry: Right.
Pascal-Emmanuel Gobry: Right. Yes. Yeah.
Josiah Neeley: um Yes.
Pascal-Emmanuel Gobry: Kotkin.
Josiah Neeley: And, uh, you know, I'm a big fan of that period of history in general, but I, I, I sort of.
Pascal-Emmanuel Gobry: I didn't like the the the Kotkin -Stalin biography. i I gave up ah sometime in the 30s.
Josiah Neeley: Okay. but Well, I'm, I'm still, I'm still in the, I'm still in the twenties. So maybe, uh, maybe I'll, maybe I'll get there.
Pascal-Emmanuel Gobry: No, but okay, so what what what what what do you like about it?
Josiah Neeley: Yeah, so the first thing I will say is, even though it's a Stalin biography, I've noticed this, this is also true of like the Robert Caro LBJ biographies or whatever. Part of the reason why they get to be so long is because they'll take these like long 100 page detours, you know, to talk about other subjects where he's talking about, you know, the
Pascal-Emmanuel Gobry: that That's such a letdown.
Josiah Neeley: and
Pascal-Emmanuel Gobry: like I was expecting that the LBJ biography was like, oh, and ah on on the morning of May 27, he had eggs. He had two eggs.
Josiah Neeley: Right. yeah hey Yeah.
Pascal-Emmanuel Gobry: They were overdone.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: He had coffee. He put cream in it.
Josiah Neeley: Great.
Pascal-Emmanuel Gobry: Oh, that's so disappointing. Okay. so
Josiah Neeley: Yeah. so So there's long sections where like, even though it's ah especially early on when Stalin is not doing that much, you know, there's a lot of stuff that's not about him.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: But, um you know, I think it it was it was one thing that I took away from it, which kind of crystallized some of my early reading is the extent to which early 20th century ah Russian politics is really dominated by the peasantry.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: And especially by the fact that like the peasantry is this huge untapped right -wing resource that not like right forces are willing to like ally with you know, so you have you have um Like this natural constituency for like a monarchist, you know ah like reactionary Yeah, well, yeah, so might call it that Of course Right, yes, yeah
Pascal-Emmanuel Gobry: Yes. Yes.
Pascal-Emmanuel Gobry: Yes.
Pascal-Emmanuel Gobry: last year
Pascal-Emmanuel Gobry: Well, so the the they yeah you're you're you're thinking about the movement of the Black Hundreds. This was a movement known as the Black Hundreds and they dressed in black shirts and they had marches with like flags.
Pascal-Emmanuel Gobry: They had like this whole aesthetic and it was this idea of like, you know, mobilizing the people as one under the charismatic leadership of the Tsar.
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: It was it was very proto -fascist and the Tsarist regime entourage sort of like
Josiah Neeley: Yeah. Right.
Pascal-Emmanuel Gobry: you know they thought they
Josiah Neeley: Yeah.
Pascal-Emmanuel Gobry: very much in the way that sort of traditional right wingers felt about about Hitler in Germany, about Mussolini in Italy, they thought they were sort of cringe, working class populists.
Josiah Neeley: Right. Yes. and even
Pascal-Emmanuel Gobry: And they were like, get away from me. And ah so in that sense, yeah, no, you're absolutely right.
Josiah Neeley: Yeah. And even during the Civil War, the whites, you know, they, they, and until the very end, you know, they could, they, they didn't want to do any land reform for the peasants.
Pascal-Emmanuel Gobry: Right.
Josiah Neeley: They didn't want to recognize any like ah regional autonomy. And they even were kind of, uh, tepid about like tapping into like Monica's sentiment of like, we'll bring back the Czar or something like that.
Josiah Neeley: You know, cause they were getting a lot of money, I guess, from England.
Pascal-Emmanuel Gobry: Yeah.
Josiah Neeley: But, um,
Pascal-Emmanuel Gobry: ah For other countries, yes.
Josiah Neeley: And, of course, the English are very anti -monarchist, as we know. um But, yeah yeah, so I mean, that's that's one thing. There's other, there are other things ah that I thought, you know, we're were very insightful in terms of like that that period.
Josiah Neeley: And I think it also has like larger lessons for, you know, all the time.
Pascal-Emmanuel Gobry: Yeah, I mean, i so i I sort of agree with you with your assessment, like it's a very good overview of the period is a in which it takes place, but I didn't get much of a stance of a sense of Stalin demand from reading it.
Josiah Neeley: Yeah.
Josiah Neeley: Yeah Yeah, shes say yeah, yeah
Pascal-Emmanuel Gobry: And and so i I sort of, you know, And that's also you know maybe why I sort of gave it up when I did, which is like we were approaching World War II and I'm like, I already know what goes on in World War II. If it's just going to be like one paragraph telling me, oh, Stalin went to this meeting and then this meeting, and then the other paragraph explaining to me that you know this is why it's important that Germany wanted to invade Poland, like I already know that. so
Josiah Neeley: Yes, yeah, yeah.
Pascal-Emmanuel Gobry: but No, so so i so I actually agree with you. like yeah like the the the early the Stalin's early life is a very interesting – there's a lot of stuff where you get a sense of the sort of pre -revolutionary Russia.
Pascal-Emmanuel Gobry: yeah
Josiah Neeley: Right, yes, yeah.
Pascal-Emmanuel Gobry: and like this stuff about like the Caucasus, which was like the oil boom town of the late 19th century.
Josiah Neeley: Yeah, right.
Pascal-Emmanuel Gobry: And like and be because it was a boom town, the living and working conditions where for the workers were just absolutely horrid and like they didn't have any infrastructures.
Pascal-Emmanuel Gobry: The streets were mud and people lived in shanty towns.
Josiah Neeley: Yeah, yeah.
Pascal-Emmanuel Gobry: in mud, and so it was horrible. And so he's like, Oh, well, I understand why, you know, why communism was popular.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: ah But at the same time, you know, it's like, well, you know, like, it, it was actually like tremendous economic growth, like, that was, that was actually what created that it was less the sort of traditional sort of, you know, feudal
Josiah Neeley: Right.
Josiah Neeley: It was very, yeah.
Pascal-Emmanuel Gobry: ah system. It was more the sort of dislo dislocations of like 19th century sort of hyper -tablism.
Josiah Neeley: Right. right
Pascal-Emmanuel Gobry: All right.
Josiah Neeley: Right.
Pascal-Emmanuel Gobry: ah Well, thank you very much ah for your time, ah Josiah. um I will put up your Twitter X and and everything else.
Pascal-Emmanuel Gobry: No, ah seriously, I had a lot of fun. This was extremely interesting, you know, energy As, as the president has said is like going to be one of the massive priorities of his administration.
Pascal-Emmanuel Gobry: You are one of the top experts in the country that I read almost certainly every week. I was going to almost every day.
Josiah Neeley: Thank you for having me.
Pascal-Emmanuel Gobry: Um, so this was a fascinating conversation. Thank you very much for your time.
Pascal-Emmanuel Gobry: Have a good day. Bye.
