Importance of Natural Resources

COVID-19 Media Briefing: Energy and Environment

Greg Phillips: Good morning, the room is open
and hopefully everybody is in it. Greg Phillips: Thank you everyone for joining
us. Welcome to the latest Duke media briefing
on the COVID-19 pandemic and its effects on society. I’m Gregory Phillips with Duke Communications
and I’ll be moderating this panel. Greg Phillips: We have three Duke scholars
with us today to discuss the pandemics effects on global energy demand and what that means
for the future of the energy industry and the global environment. Greg Phillips: I’ll introduce them in turn
to get the discussion going. And then we’ll open it up to questions. We are recording this briefing and that recording
will be sent to everyone who registered Greg Phillips: Thanks to those reporters who
already submitted questions during the discussion, those of you joining us on zoom can also ask
questions via the Q AMP a window and there’ll be an opportunity to ask questions out loud
in a few minutes. Greg Phillips: So we’ll go ahead and get started. And I’ll introduce our panel. Greg Phillips: With today we have drew shin
del. He is a professor of earth science who researches
how climate emissions and air pollution affects human health and food security. Greg Phillips: And he was the lead author
on the UN’s 2018 Intergovernmental Panel on Climate Change report drew. Good morning. Morning. Greg Phillips: We also have Kate conflict. She is director of the climate and energy
program at dukes Nicholas Institute for Environmental policy solutions. She specializes in the Clean Air Act and has
worked with state governments on climate and energy policy cake. Good morning to you. Greg Phillips: Morning and Brian Murray is
director of the Duke University. Energy Initiative. He specializes in designing economic policies
to address environmental problems with a particular focus on climate change us Greg Phillips: And Professor Murray. Good morning. And I’d like to start with you. What could the drop in energy, energy demand
mean long term for the fossil fuel industry and the push towards renewable energy. Brian Murray: Well, good morning. Greg, and thanks very much. Um, so let’s first Brian Murray: Focus on oil. Brian Murray: Where the daily consumption
has dropped around 30% and prices have plummeted, more than half, and then let’s also for the
purposes of this discussion focused on the US is the world’s largest producer of oil. Brian Murray: So there are two types of oil
production. One is called conventional in the others unconventional
conventional production requires vertically drilling into large seams of oil using essentially
the same methods for the last hundred years. Brian Murray: This is a relatively cheap way
to produce oil and is still the dominant source in places like Saudi Arabia and Russia. Brian Murray: For unconventional oil. We talked about deep sea drilling or oil sands
in places like Alberta in Canada and Canada. Brian Murray: But also importantly for the
United States shale production, which has been enabled in the last 10 to 15 years Brian Murray: By combination of hydraulic
fracturing and horizontal drilling drilling, which has made the US a global leader in oil
production by large unconventional production is more expensive and therefore it’s more
susceptible to demand and price drops like we have seen Brian Murray: Another thing to keep in mind
is there’s different forms of ownership of oil assets globally, a little more than half
of the world’s oil production is produced by state owned enterprises in places like
Saudi or in Brian Murray: Companies like Saudi Aramco
and russneft and about only about 15% is produced by the large multinationals like Exxon Mobil
Shell and BP. Brian Murray: And the rest is produced by
small and mid sized independent producers. So the US position is strong and shale and
heavy independent producers companies like emoji pioneer Devon. Brian Murray: It’s also worth noting that
before the pandemic. These us independent shale producers were
getting squeezed hard by wall street due to a lack of cash flow generation over the last
decade or so. Brian Murray: Okay, so, but that is background. How does the pandemic change things. So we’re now witnessing the largest demand
destruction ever seen Brian Murray: I mentioned earlier about 30%
reduction in daily consumption, oil, and this has caused the oil prices to plummet. Brian Murray: Um, it’s a global market and
this affects the highest cost producers in the world. The most shale in relative terms is a higher
cost producer. Brian Murray: It’s cheaper than how we used
to produce oil in the United States, but compared to other places in the world. It’s a little bit more expensive. So it’s hard to see much bloodshed in the
US oil patch and many other high cost operations throughout the world. Brian Murray: Now, one question you asked
is, well, this accelerate the adoption of renewables and that’s a mixed story. Brian Murray: Which favorable for renewables
in this environment is that investment capitals LOOKING FOR MORE STEADY returns Brian Murray: The volatility of commodity
markets is really spooking them and renewable energy is a good alternative Brian Murray: Especially as the costs and
the reliability of renewable assets like wind and solar and the energy storage that allows
them to be integrated into the grid have improved remarkably over time. Brian Murray: It’s unfavorable on the renewables
front is natural gas is really cheap. And so when we talk about renewables, we often Brian Murray: We’re primarily talking about
electricity production and the other sort of major source of electricity production,
the United States, natural gas units. Brian Murray: So another thing that is somewhat
unfavorable from renewables is that these large multinationals and state enterprises
in the oil. Brian Murray: Sectors that I alluded to earlier,
were they were making big investments in renewables, you know, in the billions of dollars. So what’s going to happen to that. Brian Murray: Well, some are saying they’re
going to continue. So the CEO of BP Bernard Looney, you know,
famously said a couple weeks ago. They’re still well committed Brian Murray: In fact, perhaps even more committed
because of the stability of returns and I talked about, but a real question is with
what cash. Are they going to be able to invest Brian Murray: Now, you asked about renewables
me talking about renewables, but real quickly. Brian Murray: If you can think about electric
vehicles as well as having an impact. Brian Murray: And so whether or not they’re
fueled by renewable energy or or other forms of energy, there’s sort of seen as a de carbon
aging alternative so low gasoline prices are going to make Brian Murray: Make a decision to drive electric
vehicles, a little bit less favorable, but the policy and improvements in quality will
probably drive the market over so that’s that’s my brief summary on your question. Greg Phillips: Gotcha. Thank you. There’s a lot to dig into there and we’re
certainly going to come back to it for right now, I’d like to move on to the professor
company. Greg Phillips: And can you tell us what to
policymakers and the public need to understand about how the pandemic is affecting energy
usage and what that could mean for the future. Kate Konschnik: Yeah, thank you Greg and good
morning, everyone. Thanks for joining us. Kate Konschnik: You know, I think the most
important thing for policymakers and the public to realize is how much we don’t yet understand Kate Konschnik: We’re seeing major divergence
from our normal transportation and energies patterns are, you know, normal being the last
few years similar time accounting for temperature Kate Konschnik: But what we don’t know is
whether those trends will stick whether they’ll deepen or whether they’ll reverse course and
so Kate Konschnik: There’s just a lot of uncertainty,
any of the reporters here who are covering coven know there’s uncertainty generally about
all the medical variables that are just unknown at this point. And so Kate Konschnik: Any of the debates, you’re
seeing about a U shaped recovery or a V shaped recovery. Kate Konschnik: I honestly think we’re looking
more to W shaped recovery at this point or cosine wave, we’re going to have some ups
and downs going forward. Kate Konschnik: All of that has huge implications
for how we use energy and how we use transportation Kate Konschnik: And so, you know, I think,
given this uncertainty, I would suggest three approaches. One is that it’s really important for us to
be tracking the data. Kate Konschnik: We’re seeing at a big level
about a 6% drop off of electricity use in the United States, but when and where electricity
is being used is the bigger story so region to region, our to our we’re seeing different
demand peaks. We’re seeing different Kate Konschnik: Sectors Brian more or less
electricity than usual. And that has huge implications for the resilience
of our grid. Kate Konschnik: For the amount of excess electricity
we need above peak demand going forward. And so it’s something worth watching. Kate Konschnik: It’s also interesting to see. So, too, I would say we need to be tracking
those policies. Kate Konschnik: Tracking those trends and
then forging policies that would deepen the sort of good story, we could maybe glean out
of this the sort of Kate Konschnik: Emissions reducing activities. Well, at the same time figuring out how to
get America back on its feet. I think if you ask a lot of Americans. Kate Konschnik: Them. We’ve dropped you know our CO2 emissions 11%
over last year and they say, I’m trapped in my house and I’m unemployed. So if this is what we need to do to tackle
climate change, no thank you. Kate Konschnik: That is a very real risk going
forward. And I think we need to figure out how to take Kate Konschnik: What we’re learning about
the fact that people maybe don’t need to fly as much that people be 10 do some work by
telecommuting Kate Konschnik: We need to track the data
and make sure that telecommuting actually does result in lower missions. It’s certainly results in lower transportation
emissions, but Kate Konschnik: less clear on the home heating
and air conditioning and maybe more efficient here. Cool. A collective work area. Kate Konschnik: But if we find out that information
that the evidence bears out that it is a mission, reducing to telecommute and we can do that
with certain jobs. Kate Konschnik: And get people back to work,
we should be doing that. And the third thing after tracking data and
then forging policies to Kate Konschnik: Dig deeper and kind of move
further on those mission, we’re producing trends, be that we need to look at our institutions,
both public and private and figure out how to make them more resilient and adaptive Kate Konschnik: Those are becoming buzzwords,
but there’s a lot of really hard work behind those buzzwords and Kate Konschnik: You know, whether it’s a Russian
Saudi oil price war or a pandemic, or severe weather we’re getting hit with a lot of external
shots to our energy system and we need to be more adaptive. So thinking about how to Kate Konschnik: Plan for uncertainty and to
hedge our bets going forward will be really important Greg Phillips: Gotcha. Thank you so much. And again, lots of dig into their that what
they’re going to come back to, but I would like to move on to the professor Chanel Greg Phillips: Now I talked about, you know,
we don’t know what the future holds, but we know that there’s been a sudden drop in demand
and how much of a difference is that dropping energy demand making to air quality and can
it make any kind of a dent in global warming. Drew Shindell: Thank you Greg and good morning
to everybody who’s joined us. Drew Shindell: So they the drop in energy
demand is making a substantial difference to emissions of of all of the, the things
that affect our quality and climate change. Drew Shindell: The, the difference there. Are they interesting thing about this is,
is the air quality responds very, very quickly. Almost all of the things that we breathe in
that are bad for us are bad for plants and such. Drew Shindell: don’t last very long in the
atmosphere. So as we change the emissions over the course
of weeks. Drew Shindell: days, months, any of these
timescales, we see a response, very quickly. And I think most of the public can see that
I know I you know I i go running around Durham, North Carolina, and I can feel the difference
in my breathing. Drew Shindell: So I can only imagine what
it feels like, you know, you live in Delhi or you live in Shanghai right where they think,
huge, huge increases in air quality. Drew Shindell: So these things I think are
very profound. I think they might go to the issues that Professor
contract was just talking about is what people think about going forward. You know, I don’t want to make this trade
off of living. Drew Shindell: In quarantine society for the
sake of Drew Shindell: Climate change. Hey, but I really like this clean air. Isn’t there a way to get back to having a
full economy without having polluted air. Drew Shindell: I think there is a profound
difference. I think we, we will be able to see that in
human health. We are starting to look at things like that
and you know as people breathe less pollution. Drew Shindell: Fewer people go to the hospital. So we’re seeing people go to the hospital
for coven but fewer people go to the hospital for respiratory problems and such related
to air pollution. Drew Shindell: So there’s some really interesting
medical questions going on for the sake of climate. Drew Shindell: The pollution primarily carbon
dioxide last for a very long time in the atmosphere and the climate response is very slow. Drew Shindell: So, at present, we’re seeing
drops as we’ve heard a little bit already on the order of five to 10% in Drew Shindell: CO2 emissions from different
sectors. But so far, those have persisted for on the
order of a couple months when you average across a year. This is going to lead you know if we recover
relatively soon and go back to kind of normal Drew Shindell: This will lead to drops that
are only a few percent in annual emissions which will be virtually unnoticeable in terms
of long term climate. So the real question is, is what happens going
forward. Drew Shindell: Do we decide that hey telecommuting
works and we like having not so many cars clogging up our downtown streets and let’s
make this the new normal. Drew Shindell: Or do we decide that, hey,
the economy is in really bad shape what we have to do is pour money into tried and true
things like propping up fossil fuel industry is and in a traditional way of doing things. Drew Shindell: Right. So I think what we’re really gonna going to
be looking for is how to governments for a spawned post pandemic. Drew Shindell: Do we kind of build back better
and get a new society where we put people to work, doing things that can help the environment
over the long term retrofitting buildings. Drew Shindell: installing solar panels installing
EV chargers, you know, all of these, these 20 million people that just lost jobs. Drew Shindell: In the US, they need something
to do. Do we, do we put them to work in those kinds
of industries or do we go back to the old fashioned way. So I think there’s a lot of interesting things
to think about. Greg Phillips: Absolutely. And thank you very much to all three of our
panelists for those opening answers. We’ve got a lot to dig into here, I would
remind reporters on the call that you can ask questions through the Q AMP a function
in zoom Greg Phillips: And you can also raise your
hand through zoom. If you would like to ask a question. Greg Phillips: And if you are joining us if
you happen to be joining us via cell phone or a phone, you can press star nine to raise
your hand so that we can unmute you to ask a question. Greg Phillips: And while reporters are in
the process of doing that, we already do have a couple of questions. And one question. Question. Dale is a direct follow up to, to what you
were just saying, somebody wanted to know. Greg Phillips: What accounts for the biggest
drop in CO2 emissions as demand drops. Is it through less cars on the road. Is it through air traffic or can we categorize
it as shipping you know vs vs commuting or is that even a distinction we can make. Is there anything you can say about that. Drew Shindell: Yes, thank you. So we just started to compile the initial
data on how much the drop in CO2 emissions can be attributed to all the different sectors. Drew Shindell: And what we see are the largest
percentage drops in things like shipping and and aviation, but those are, in general, smaller
sectors for smaller contributors to global emissions worldwide. So in terms of the total Drew Shindell: You know tons of CO2 coming
out into the world, the largest drops are from industry from the decline in industrial
production and manufacturing Drew Shindell: And from transportation we
primarily motor vehicles at the surface, we’re seeing smaller declines in energy, because
of course there’s no less demand from industry, but more demand. Drew Shindell: From residential says people
are home. So the biggest to right now or industry and
vehicles and so that going, going to the future know we expect industry largely return Drew Shindell: We’re already seeing signs
of that in some places like in China, we are, it’s still a big unknown what will happen
with with transportation and it will go back to the same kind of demand and usage patterns
and commuting patterns that we had in the past. Greg Phillips: Gotcha. Thank you. We also have a question from a reporter in
the chat and I’m not sure who will be best place to answer. Greg Phillips: So this is about nuclear energy,
so I’m going to throw it out there and then see who would like to tackle it so jack Edelman
from Carolina public press asks Greg Phillips: What are your views on the
safety of nuclear power during the pandemic given concerns about staffing levels to transport
spent fuel security at facilities. Greg Phillips: And ensuring there a healthy
staff with the correct expertise during regular operation and the ability to respond to an
emergency. So has the pandemic cause any safety issues
with nuclear energy, and is there anybody on our panel that can can shed any light on
that. Brian Murray: Okay, do you want to take that
one. Kate Konschnik: Ah, thanks. Brian Murray: I mean, I just, you know, I
think. Brian Murray: Utility sector electricity. Yeah. Kate Konschnik: Yeah no absolutely a great
question. So I may think Kate Konschnik: From the outside, we have
not seen any safety concerns, yet I know that this is top priority for the electric utilities
that own nuclear plants. I’ve spoken to two of those companies and Kate Konschnik: That’s the first thing they
want to talk about is the people who are Kate Konschnik: Literally living inside the
nuclear reactors right now and unlikely to see their families for weeks, if not months
because they have to live there and make sure that everything remains within Kate Konschnik: Safe parameters. Beyond that though. I feel like I couldn’t speak to what’s actually
happening inside those reactors or or the transportation of spent fuel question that
you posed. Yeah. Brian Murray: I think you know what I would
add to what Kate said, I think this is actually just the kind of thing. Brian Murray: That utilities are really good
at and have been for a long period of time, which is keeping the electrons flowing. Right. So there’s been Brian Murray: Some criticism of the utilities
in the last few years, whether they’ve been sort of slow to react to social desires for Brian Murray: More renewable energy or something
like that. But in terms of keeping plants running. They’re really good at this. And they’ve had pandemic plans in place. Brian Murray: For a long period of time. And they were just executing on this as they
hit plan. They didn’t know what kind of pandemic, it
might be, but they knew that they would likely be in situations where they were going to
have to as Kate alluded to. Brian Murray: Have some of their staff essentially
living at the facility in order to to keep things flowing. You know, people have said that Brian Murray: The only thing that stands between
us and the stone ages these days is electric power system and reliable Wi Fi. And so I think they have taken this Brian Murray: role very seriously and they
have formed admirably in terms of keeping the system running it will be interesting
to see in the in the summer as Brian Murray: As you know that the demands
for electricity change as we get, you know, hotter in the Northern Hemisphere. Brian Murray: You know how that will be met,
but it’s also going to change the daily profile of electricity use because because as people
stay at home. It’s kind of shifts when our peak load is
delivered today. Greg Phillips: Thank you both very much for
that. And we actually have a follow up question
related to energy in the summer. Greg Phillips: If, as it seems to be the case. Many people will be continuing to telecommute
and work at home for the summer. Greg Phillips: Giving them that likely to
prompt, an increase in home energy usage as people are calling their homes is, would that Greg Phillips: Cause a greater spike in energy
demand them. For example, if work workplaces were being
called as maybe they will continue to be, and it would that create a spike in demand
that could be problematic for energy suppliers. Brian Murray: Actually, I, I see it the other
way around. I mean, normally under normal circumstances,
you see these big spikes. Brian Murray: In the afternoon it like in
the summer when air conditioning kicks on you see these big spikes in the afternoon
as people move their sort of Brian Murray: From their sort of controlled
work environment where it’s more of a steady flow to their homes were there AC kicks in. Brian Murray: And if people are going to be
working at home throughout the day. I think it’ll be less spiking there. Well, obviously it’s going to be a shift and
load from Brian Murray: commercial, industrial facilities
to residential facilities, but I think it’s going to actually even things out. I cater drew may have a different perspective
on that but Kate Konschnik: Yeah. Well, I think we have some data already just
based on Florida and the Energy Information Administration, just put up an interesting
data set on this showing that Kate Konschnik: You know what, Brian was alluding
to, we have through total electricity use. And then we have demand given points of the
day. Kate Konschnik: And as I think I had mentioned
earlier, you know, we sort of Kate Konschnik: You know, normal time see
the spikes in the morning when people. A lot of people are getting ready for work
or school and then when they get home at the end of the day, that can be exacerbated in
the summer in the late afternoon is Brian is Kate Konschnik: Noting but we’re already seeing
in Florida and the shift to residential electricity residential electricity demand is already
more than half of electricity demand in Florida, which is quite high higher than the national
average. Kate Konschnik: And the temperature is required
people to start air conditioning their homes, we are not seeing overall electricity demand
go down in Florida, as we’ve seen in other parts of the country. And we’re not seeing the spikes. Kate Konschnik: So it’s looking like there
is sustained increased across the day electricity use in in the residential buildings. Kate Konschnik: Which could, you know, sort
of show where the rest of the country as temperatures rise is heading. Kate Konschnik: I’m certainly it’s exacerbated
in Florida, because they don’t have a lot of heavy industry and they have big residential
footprint, but Kate Konschnik: We could see an increase,
certainly as Brian said a shift from commercial spaces to residential spaces being air conditioned
in the summer, and in some parts of the country, particularly where we have a big residential
print that could Kate Konschnik: Go against this general trend
of a drop in electricity usage. Greg Phillips: Don’t you thank you both very
much for that a professorship now we have a question in the Q AMP. A that Greg Phillips: I believe is directed to you. And the question is from Justine my Kalman
thank you very much for the question. And it’s what sectors, I’m not seeing a drop
in CO2 emissions are emissions growing in any areas. Drew Shindell: Oh, thank you. I think that’s a good question. So our CO2 emission, the growing anywhere
and you know we just Drew Shindell: Fall to follow up on on what
we’re talking about, you know, I think that that may be the case locally, say, but we’re
just hearing residential and usage of electricity in Florida is is not decreasing Drew Shindell: And the global scale, we are
not seeing increases in any Drew Shindell: individual sectors, but residential
is again the sort of odd man out amongst the others, and that the other show some pretty
substantial declines and residential shows only a very modest Drew Shindell: downward trend and so some
places, you know, air conditioning is not so prevalent, it’ll be a little bit different
than the US but in terms of worldwide so far. Drew Shindell: I would say residential is
nearly flat and electricity use our power generation, more broadly, Drew Shindell: Which is the bulk of that is
electricity is is only modestly down. So again, we think we’re seeing a drop in
demand from industrial Drew Shindell: And office facilities and an
increase in in residential demand which was keeping the overall power generation sector
very modestly changed. So again, not increasing but power and residential
we’ve seen very modest decline so far. Greg Phillips: Gotcha. Thank you very much a follow up question for
you, Professor shutdown, not necessarily related to exactly to that last question, but, um,
obviously most governments across the world for years now have acknowledged the need to
do something drastic to address climate change. Greg Phillips: How and how much of an opportunity,
does the current situation in terms of changing our trajectory as it relates to energy or
CO2 production and global warming is there an opportunity embedded in the current struggle. Drew Shindell: Yes, that’s a, that’s a great
question. Greg, so thank you. Um, I would say there is is a great deal of
opportunity because one of, one of the things we’ve seen I Drew Shindell: Let me, let me start, start
again a little bit. Oh, we’ve we’ve seen difficulties, very, very
pronounced difficulty in getting action. Drew Shindell: Put into place around the world,
both because the public perceives this as kind of a diffuse and future threat, rather
than something that’s here and now in tangible Drew Shindell: And we’ve seen difficulty in
getting the initial capital that is needed, sometimes to invest in things like charging
infrastructure. Drew Shindell: Which is necessary to have
the infrastructure before people switch to electric vehicles and you know it’s this kind
of traditional chicken and egg problem what we’re seeing with this pandemic. Drew Shindell: Is people can really see the
air around them cleaner. They’re, they’re seeing that when we make
a change, we can have an immediate impact on the environment and a profound impact on
the environment and Drew Shindell: Obviously we don’t want to
deal with climate change by everybody up at home, but I think that there’s a chance that
the public will to have Drew Shindell: To live in a clean environment,
you know, is enhanced because they’re seeing, seeing what can happen when we get rid of
pollution. Drew Shindell: At the same time, we’re also
seeing that all of these arguments about, well, we can’t really enforce afford to Drew Shindell: All the initial investments
for electric vehicles charging infrastructure and putting solar panels on all the people’s
homes and, you know, even if all these things pay for themselves over a few years. Drew Shindell: We don’t have the money to
spend. Well, it turns out, when we want to spend
money. We do have plenty of money to spend, and we
can come up with trillions of dollars. Drew Shindell: When we decide that we you
know we need to do that. And so, given how many millions of people
are out of work and how much work. There is to be done, that are Drew Shindell: Fairly non specialized low
skilled jobs that that can be given out to millions and millions of people that would
aid the energy transition to a to a low carbon green economy. Drew Shindell: There’s a real opportunity
there for us to speed this transition right as as part of the response to the pandemic
and I think we’re seeing a profound Drew Shindell: Push to do that in Europe,
we’re seeing that and coming up in some of the planning in the States. We’re not currently seeing that Drew Shindell: In the administration, we’re
seeing talk of that in Congress and and it’s unclear. You know how this will go, but certainly at Drew Shindell: At the state level. I think there’s there’s an awful lot of room. Drew Shindell: For what we’re talking about
in the community sometime is building back better and putting people back to work and
using the stimulus money to get the economy going while preserving these things that we
see, we really have the power to change like cleaning up our environment. Greg Phillips: Gotcha. Thank you. Um, Brian Murray: If I can. I’d like to add some things that I think drew
make some really good points there. I wanted, I wanted to add a couple of other
sort of dimensions to that. Brian Murray: One is you need to keep in mind
that if we’re focusing on say energy decarbonisation you know Brian Murray: We start out with the energy
system that we have right now, which is, you know, sort of, largely a private enterprise. And so if you think back to Brian Murray: The last great recession and
the last decade or 2008 2009 there was a lot of momentum in the United States and other
countries for serious action on climate change. Brian Murray: There was going to be a cap
on a missions 80% by mid century and, you know, frankly, the economic crisis really
kind of through cold water on that from a political standpoint. Brian Murray: A lot of those more aggressive
actions sort of took a backseat. As we address some other serious problems
in society. And so there’s some concern by people who
work in the SEC in this space that Brian Murray: This could repeat itself again. Okay. Brian Murray: But there’s a couple of other
reasons for optimism. One is that we’re actually 12 years later. So a lot of the technologies that were national
at the time, or well accepted right now so I alluded to in my comments earlier. Brian Murray: About the cost of renewables
and they have come down until now they operate on on par with fossil energy and a lot of
sectors, so that’s that’s there that toothpaste is not going to go back in the tube. Brian Murray: And that’s and that’s there. The other thing to keep in mind is that during
some of our most Brian Murray: significant economic disruptions
of the last hundred years, meaning the Great Depression in the early 20th century and the
and the Great Recession last period. Brian Murray: We saw tremendous technological
innovation actually come out. I mean, there was a lot of destruction that
went on in the economy and and often when the capital was redeployed it came into sort
of novel ways and so Brian Murray: In the last recession we saw
you know things like you know Uber and Airbnb. You know, like the gig economy sort of came
out of there and there was a lot of innovation. Brian Murray: And so I think there’s still
ample room for a lot of innovation in the energy sector in our decarbonisation movement
right now that could come out of it, it’s gonna be hard to forecast what that might
look like. But that could, you know, that’s just, I think
that’s just another perspective. Kate Konschnik: Now, and I, I was, it’s a
great question and I loved hearing the answers. And I feel like we could talk just about this
question all day. Kate Konschnik: I just when I was talking
about through the three things that I was thinking about coming into this. And the third being that we need more Kate Konschnik: Adapt regulation and sort
of thinking about systems that are more resilient. I do think there are some lessons to be learned
here. They’re the clear Kate Konschnik: Connections between coven
and the stay at home orders in the economic downturn. Kate Konschnik: And and climate, but there’s
also just parallel lessons to be learned that, you know, we were sort of reacting to a lot
of these crises we get behind the eight ball and ends up, it’s more expensive than had
we laid the groundwork and Kate Konschnik: Then watching for this and
Ben more vigilant and had gotten ahead of it. And I think that there’s some no regrets policies
that we could be thinking about in Kate Konschnik: The climate space, the energy
space about, you know, when we’re building that next megawatt, why not build the next
wave of megawatt that’s good for air quality. Kate Konschnik: If we’re going to have catastrophic
climate change, this would be something that could help forestall that and and it puts
people back to work. So starting to think about Kate Konschnik: The we plan for that next
pandemic that next crisis that we we can’t define or predict right now. And I think that’s sort of future proofing
and and thinking about systems that will be able to withstand any of these shocks would
be a good way to go. Greg Phillips: Absolutely. Thank you. All three of you for weighing in on that question
we have, we have a follow up question for a point that Professor Chanel made Greg Phillips: Can you point to a few examples
of states or countries that are creating green jobs to both the boost the economy and help
the environment, as you mentioned a few moments ago. Drew Shindell: Sorry, was to me, my sound
cut out for a moment. I apologize. Greg Phillips: Yeah, not a problem at all
the follow up question was asking if you can point to any examples of states or countries
that have created or creating green jobs to boost the economy and help the environment,
as you mentioned a few moments ago. Drew Shindell: So I am I am aware, only at
this stage of discussions of how to do that, for example, that within the European Union,
as part of their green. Green Deal. I believe they call it without like ours,
but without the Drew Shindell: Be made me the panelists will
know something about that. But you know what I am seeing our policies
that relate to Drew Shindell: Coming back and are changing,
changing lifestyles, in a way that is is environmental mentally friendly and one of the thing we
have jobs program, but trying to get social distancing Drew Shindell: And allowing restaurants to
open and allowing people to move safely around big cities is we’re seeing the reclamation
of of street space and Drew Shindell: Sidewalks from restaurants
and street space for pedestrians and bicycles so that people can can stay far apart and
and get around on their own without taking public transportation, which can be very crowded
and taking space that had been dedicated to automobiles and that’s a changin Drew Shindell: Gentlemen, Paris and London
and little bit in in New York and and in the United States. And so we’re seeing some of this idea of changing Drew Shindell: Society in a way that both
deals with the new reality of social distancing and keep some of the environment by in particular,
reducing exposure to Drew Shindell: Air pollution from motor vehicles
so I be interested to know if either of my colleagues here have seen things more specifically
related to jobs. Brian Murray: I guess I would kind of I would
look at it in, you know, maybe less of the Brian Murray: Sort of top down policy set
at a national level that have been, you know, allocating money to create bringing jobs and
thinking more about the sort of the connection between policies that have been put in place
and Brian Murray: The jobs that have sort of followed
as a result. And so we look at over the last decade to
15 years there have been Brian Murray: You know, sort of decarbonisation
policies put in state at replace it state level and even at the national level in the
United States. And what that has meant is that there has
been a need for the development of technology. Brian Murray: Green targets in ways that employ
people. So for instance, State of California has very
aggressive Brian Murray: Carbon targets for the state. And it also on coincidentally is sort of the
leading state in terms of green tech development unemployment. Brian Murray: At Duke, a lot of our students
who come through here and study energy Brian Murray: In the, in the old days, used
to maybe go work in the oil and gas sector utility sector, they still are often working
in the utility sector and some are still working on like aspirin. Many are working in in the renewable space
in the energy efficiency space. Brian Murray: Demands to produce lower carbon
energy. So, job creation that way has been kind of
a consequence of top down action. I’m in through the policy process, more so
than through the budget allocation process to create new jobs new sectors. Greg Phillips: Don’t you think very much a
fresh coach, Nick, just wanted to give you a chance to weigh in on that. If you add anything additional Kate Konschnik: Know I let my my two colleagues
answer that. Greg Phillips: Gotcha. Thank you very much. Well, we have more question in the Q AMP. A so I will move on to those. And I’ll remind everybody on the call that
you can submit a question through the Q AMP a function in zoom or you can raise Greg Phillips: Your hand so we can unmute
you. So you can ask a question. We have a question here in the chat from Matthew
Diaz CEO and he asks. Greg Phillips: As businesses, especially heavy
industry start to reopen, is there a chance we’ll see worse, the usual emissions for a
time, if it requires utilities to use sources with faster response times Greg Phillips: Crushing data or I’m not sure
which panelists. We’ve Best place to answer that. But if anybody has any perspective and please
weigh in. Drew Shindell: On well i can i can begin and
maybe others can chime in as needed. I don’t see necessarily faster response times
being the the Drew Shindell: And, you know, it tends to
be spread out over time. And as these industries resume, which they
already are in places like China, they don’t have as many orders, but they are they are
up and running again. So we’re seeing that demand increased Drew Shindell: Patterns of the band, you know,
throughout long periods of time, and I don’t believe requires a much of a change in the
energy mix. But this kind of rush to build back the economy. Drew Shindell: At all costs. The one way it could lead to even worse emissions
than we had before, is by the kind of things that we’re seeing a little bit in the United
States at the federal level is saying the economy. Drew Shindell: is paramount and trumps everything
else. And so therefore we should even roll back
environmental regulations. Drew Shindell: And the EPA making announcements
about not bothering to enforce regulations, if companies can make a claim that whatever
there, they need to waive them for the sake of covert recovery. Drew Shindell: So I think there is a chance
that we we go the opposite direction we’ve been talking about all the opportunities presented
to kind of build back up better and more environmentally friendly economy, there is the chance that
that we build back a less environmentally Drew Shindell: If we kind of take the the
opportunity to make profound changes and we said in the other direction and say that,
well, the most change most profound changes we need to to make or to roll back regulations. Greg Phillips: Torture. Thank you very much. Um, Kate Konschnik: What one thing I just wanted
to add, I completely agree with everything professors and all, said I, I, but on the
faster response times. I think it’s worth noting that some of the Kate Konschnik: To turn on and get ready to
meet demand our coal units. Kate Konschnik: And and they are already being
pretty hammered by this downturn and by, I think the really low natural gas prices even
lower than seeing in previous years, so Kate Konschnik: Coal use was I think it made
up about a quarter of our generation. This time last year and it’s about 15 or 16%
this year so pretty steep drop Kate Konschnik: And so if there were some
sort of roaring back that required quick response times and I agree with Professor schindel
that’s not really the nature of industrial Kate Konschnik: Something to turn on their
ships are pretty standard. They tend to be pretty Kate Konschnik: Steady load. But if we on top of the the hammering that
coal is already getting if there was some increased recognition of the value of Fast
Start or black start resources or quick start resources in the market. Kate Konschnik: The most cold. The most carbon intensive electric generating
facilities would be hurt by that. Brian Murray: Don’t you Brian Murray: Don’t know yet. I think I would only add to the fact that
I think it’s important to recognize Brian Murray: The role. The electric power generation plays in US
emissions and how that’s changed over time. And there’s been about a 20% drop Brian Murray: In greenhouse gas emissions
from the electric power sector. And so it’s a smaller source and transportation
and industrial uses now. Brian Murray: And as both my colleagues suggested. This is a relatively small part of the emissions
profile of the electric utility sector. So it’s likely to be swamped by Brian Murray: What else is going on in the
electric utility sector as well as the emissions that are in the other segments as we as we
ramp up the transportation as we alluded to earlier will be coming back as well. Greg Phillips: Don’t you thank you all three
of you for your own. So then we have another question around the
blunt one not sure who the best place to tackle it is this has has been predicted in some
places a death. Now for fracking in the US. Greg Phillips: About this, I guess, you know,
we’re talking about the drop in energy, man. The current situation of is really the pandemic. Brian Murray: I guess I’ll take I’ll take
that on. Brian Murray: It, you know. So we think about fracking. Brian Murray: You know, so I referred to shell
resources earlier in in my comments on the oil and sector, and then I didn’t really talk
so much about natural gas but but actually probably Brian Murray: It’s had a more important effect
in the natural gas sector so hydraulic fracturing combined with horizontal drilling has really
been the breakthrough that is made these resources acceptable in the oil market. Brian Murray: The combination. So, you know, it’s been argued more dead sounds
actually light lighter than it actually is. Brian Murray: A big move of the of the Russians
and the Saudis in the last several months has actually been to depress prices to put
pressure on us shale producers because us shale producers have really Brian Murray: Taken over the market in many
ways over the last five years, in particular, again, as I mentioned earlier, the US is now
the largest producer of oil globally. And so much of the US production comes from
shale it if you push the prices down. You, you really run Brian Murray: A strong possibility of large
bankruptcies saying us shale sector and that’s our that’s already started one of the largest
us shale producers is teetering on the edge of bankruptcy right now. Brian Murray: And this is having a tremendous
amount of pressure on them as well as the pressure from the investment community from
Wall Street, who has Brian Murray: After a decade of less than
satisfactory returns on shale investment volume has gone up the prices have gone down so much
to make it less profitable. Brian Murray: All of these things are combining
to put a tremendous amount of pressure on hydraulic fracturing in the US. Is it the death knell, I don’t think so. I don’t think it’s going to lead to the elimination
of hydraulic fracturing. Brian Murray: Have a significant impact on
the volume that comes out of it, at least for several years. Greg Phillips: Gotcha. Thank you very much. We have another question in the Q AMP. A from again from jack Aguila Carolina public
press Greg Phillips: Any thoughts on deregulating
electricity markets for power in states such as North Carolina, would this potentially
open the door to more competition from solar and wind and so Kate Konschnik: I can take a shot at that
is the question related to cove it or just sort of generally talking about electricity
deregulation. Greg Phillips: Um, well, I mean that that’s
the only context. I have with the question, so I’m reading between
the lines. I guess the My sense is, does this provide
an opportunity to deregulate electricity markets to allow for competition from solar or wind
or is that something that states should be considering Kate Konschnik: Yeah, so before before coven
19 hit our shores and Kate Konschnik: This was an active debate
in both of the Carolinas. So, we’ve had in both state legislatures in
the last couple of years study bills working their way through that would require the utility
Commission’s to be studying the idea of our major investor owned utilities to enter competitive. Kate Konschnik: Or to create their own in
the in the region there is precedent for trying to create one in the region. The, the Carolinas had put together a proposal
for the Federal Energy Regulatory Commission back in 2000 and it had that provisionally
approved. Kate Konschnik: There was concerns at the
federal level that it was not big enough and that Duke Energy at the time might have too
much influence too much market power because of it being geographically limited Kate Konschnik: And and then the California
Energy crisis happened and the Carolinas lost their appetite for this type of arrangement,
and here we are 20 years later, having, having the conversation again whether it would increase
a Kate Konschnik: Competition for renewables
penetration of renewables in our service territory is really an open question. So we’ve had in North Carolina some pretty
aggressive avoided cost rates. Kate Konschnik: For requiring due to purchase
small renewable energy production. And so that’s why we’ve got the number two. Most installed solar of any state in the United
States after only California Kate Konschnik: A couple of years ago and
the legislature sort of pulled that back a little bit, but then required competitive
procurement of solar that program has subscribed very quickly. Kate Konschnik: There are some concerns with
producers and Duke about interconnection how long it takes. And how much it costs, but we are seeing some
of that through competition on the margins. I think the big questions for the Carol. Kate Konschnik: I think there are a lot of
big energy consumers in the southeast, who would like to be able to go to market and
buy renewables directly and not have to go through an investor owned utility. And so I think they see this Kate Konschnik: Deregulation or participation
in a wholesale market as a way of getting more renewables and on their terms and on
their contract lanes. So I think it could be a win for a lot of
the big consumers. Kate Konschnik: There’s a very big question,
though, about what it does for all the other consumers, those of us who don’t go and purchase
our own utility scale solar farm or all the power from it. Kate Konschnik: And given that some of the
competitive markets that neighbor us like PJs that the concerns that you know the Kate Konschnik: The political food fights
that have been happening there, particularly in the required capacity markets about what
kinds of resources get to play in that market and whether you’re a state subsidizes clean
energy in some way, whether that price needs to be Kate Konschnik: Whether you’re not allowed
to you consider those subsidies, when you’re thinking about the cost when you’re bidding
competitively. There’s a very real question about whether
renewables are being shut out of those markets and so Kate Konschnik: I think it’s an open question. But I think that’s why there is a big push
and I think even Duke and at least one of the Carolinas has agreed that a study might
make sense. Greg Phillips: Gotcha. Thank you very much for that we haven’t had
any more questions in the Q AMP. A. So we’re going to move towards wrapping
this up. One thing. Greg Phillips: That I would like to ask you
all before we end this this briefing, is that, obviously, you know, this is a pandemic is
a huge moment it’s changing everything but within Greg Phillips: Your areas of research. I’m wondering if Greg Phillips: What the first thing is that
you would like to see happen as a result of the situation that we’re in. Obviously there are lots of things that could
happen. Lots of things that need to happen. Greg Phillips: But, um, what’s the first thing
that you would like to see whether it’s policymakers, or whether it’s an industry or the population
as a whole. One thing that you would like to see happen
as soon as possible, as a result of this current moment. Kate Konschnik: I’ll go first. Since I’m on camera. Still, I Kate Konschnik: I would like to see that if
there is another stimulus package coming out of Capitol Hill and based on what just came
out on the House side. Kate Konschnik: My wishful thinking may not
come to fruition, but I would like to see real investment in clean Transportation. Transportation clean energy infrastructure
and think Kate Konschnik: If we are going to be infusing
a lot of capital into the economy to get it started. Again, we should be investing in the technologies
of tomorrow and in technologies that are good for the environment and good for the economy. Brian Murray: What I think Katie answer captures
a lot of my initial instincts as well. I think if I’m going to talk about a specific
policy action that could be taken as one that probably should have been taken a long time
ago. Brian Murray: Which is to put a price on carbon
and and putting a price on carbon will drive a lot of these low carbon investments that
will provide the proper price signal. But now that we are as fiscally constrained
as Brian Murray: imaginable. I mean, just last month we increase the US
deficit, a half a trillion dollars in terms of how much we spent versus how much we brought
in. Brian Murray: So we’ll be looking for revenue
sources in this. There’s been wide agreement amongst economists
and other experts out there. Brian Murray: That a price on carbon. It doesn’t have to be the only thing and shouldn’t
be the only thing that we do, but it would be important elements. Brian Murray: Of any approach to decarbonize
our economy would be to have price signal and then also the revenue generating source
that will be needed to get us out of this fiscal next Drew Shindell: Well I, I would just say that
as far as policies, I, I think my colleagues have have Drew Shindell: Elaborate elaborated on to
excellent one. So I will go to a different area and say that
what I would really like is is a general kind of public Drew Shindell: Citizens view as a lesson from
this and then the lesson would be that when Drew Shindell: Scientists spend a lot of time
and effort really studying a problem and coming up with some information to tell society about
risk that something is coming and Drew Shindell: It will be cheaper to plan
for it and deal with it before it gets bad rather than waiting for it to happen, which
is what we’ve been saying for with climate change for decades now. Drew Shindell: That people will say, Hey,
you know, we probably should have listened to the scientist about co bit and maybe we
should start listening to them in general when they’re, when they’re telling us Drew Shindell: How to avoid these kinds of
risks. So we have, you know, very fast disaster like
coven which goes from nothing to changing the world, and a couple of months and then
we have a very slow moving Drew Shindell: Disaster of climate change,
but if if we don’t sort of get our heads around the reality that science has very clear on
this. And it needs to be a priority to deal with
it before it’s even more disastrous than it is now. Drew Shindell: Then, you know, I think we’ll
all come out with with much worse catastrophic consequences and we’re seeing with Kobe. So I hope that that can become part of the
general discussion in America. Greg Phillips: Thank you, Professor Chanel,
and thank you to all of our panelists for Greg Phillips: Those thoughtful responses,
we’re going to wrap it up there with no more questions in the Q AMP. A. So thank you everybody who joined us on
the call. Thanks again to our panelists Roshan del K
conch Nick and Brian Murray. Greg Phillips: Thanks again to reporters joining
us next briefing is scheduled for May 20 if you’d like to be included on the advisory
for that event, please email [email protected] In the meantime, thank you everybody. And please stay well. Have a great day. Kate Konschnik: Thank you.

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