Jigar Shah on the Pathway to Clean, Cheap, and Abundant Energy

26:24I mean, this is the guy who led the movement to kill the XL pipeline. Right. And so even he's saying, like, we sort of need to build. Right. And so now the question really becomes, how do we build and how do we do it in a way that's equitable that make sure that we're paying people a fair wage and all these other things. And what we're looking at doing is figuring out how we actually check to make sure that things that we really care about are checked. We don't want to just gloss over things and just say, whatever, we should just lower our standards. We're just saying that we might be applying the standards in an incorrect way for certain projects.

27:06because certain projects really don't have the level of toxicity within air pollution issues or local impacts or other things. And certain projects maintain those things, like green chemical plants or some of these other things. And so we just need to be more appropriate in the way in which we implement those rules. So that's one piece of it. The other piece of it is we need to do things differently. For a long time, for 20 years, we have not had load growth in this country. So we basically sell the same number of terawatt hours today that we did in 2003. So there was a good reason that no one really paid much attention to this stuff.

27:48There just wasn't the need for it. There was no need for it, right? But now everyone is like, oh my God, we got to grow again? That's a lot, right? But the beauty is we actually have solutions to all of it. The crazy thing is, like on the grid, there are all these things called grid-enhancing technologies. I'll give you an example. The grid basically is operated by slide roll. And so people say, this thing basically has 3 ,000 megawatts of capacity. That's actually not true. What's true is that the capacity changes based on the temperature outside. So there's less capacity when it's like 102 degrees outside, way more capacity when it's 45 degrees.

28:29So you can put in dynamic load ratings. Guess who does that? Everybody but the United States. And we invented it. So the UK has fully deployed it. Belgium has fully deployed it. All these other, Brazil, India. Everyone's doing this stuff except for us. So this is what I was saying. We have all these entrepreneurs who invented all this stuff, and we didn't deploy it here. We let them go overseas to deploy it there. Wait, why? It seems like a slam dunk. Why? Why not? What's the impediment? So PPL was on a podcast the other day, which is Pennsylvania Power and Light. And they were saying, basically, they had this thing where they had to solve it, so they put in dynamic load ratings.

29:07It was only$900 ,000 to do it, but it saved$50 million of upgrades. And they were like, we make money to deploy dollars. This was a terrible decision for our shareholders. We did it because there was no other way for us to upgrade that line, and we had a customer that really needed it. And so to upgrade the entire United States of America with grid-enhancing technologies to unlock 30 % more transmission capacity would cost a total of$3 billion. Let's do it. Right? But you have all these competing interests of people who are like, but Jigger, I was going to spend$23 billion to upgrade the transmission grid.

29:47That was going to be rate-based for my shareholders. Why would I want the$3 billion? But you know what? All of that is evaporating away today because they're all just saying, we can't keep up with load growth, so we'll do the$3 billion and we'll invest even more money because a lot of our stuff's 50 years old. So we kind of have to like replace it anyway. And so all of these traditional like loggerheads that we've been at for 20 years is really going away because people know that we need both. I'm going to take a cue from a member of the audience and ask like, how much interest do you see from the utilities themselves when it comes to your loan program?

30:24Are they knocking at your door or is there still a lot of reticence? So when the Inflation Reduction Act first passed, we got this energy refurbishment sort of program. And I reached out to them all and they said, Jigar, we can raise money ourself. We don't need to use your program. We're never going to use your program. Then I was able to recruit Leslie Rich, who's the most feared stock analyst on Wall Street, for the electric utility industry from J.P. Morgan to come run the program. And suddenly I've got like$58 billion worth of loan applications in the loan programs office. So, you know, people really do matter.

30:58And so she's been able to convince them. She's like, well, you know, you kind of are at a soft rate cap. You can't keep raising rates 10 % a year and continue to, like, have a social license in your state. Like, you should actually figure out how to reduce rates for rate payers. And so the arguments are, like, you know, filtering through. People are having these conversations. I do think that for sure in 2019, people were not serious about the fact that we might have load growth again. Even when the Inflation Reduction Act passed, it's not clear to me that people really had internalized it. Today, no matter where I go, people are actually actively interested in learning about how they should do things differently within the utility sector in all three areas, right?

31:44So generation, transmission distribution, and what we call virtual power plants, which is actually flexing demand with the same level of dexterity that we currently only flex supply. I definitely want to talk about virtual power plants. But since you mentioned electricity rates just then, I mean, both Joe and I live in New York. We are the slaves of Con Edison in some respect. And every year, it seems Con Edison will announce a rate hike. And a lot of that goes into not necessarily the price of electricity, but the distribution costs. And I think that's been a trend for a few years where actual load demand or consumption of electricity has been pretty stable, but distribution costs have gone up and up.

32:27Can you explain what's happening with that dynamic and how the DOE can help with that aspect of it? Yeah. So let me start from first principles, and then I'll answer your question directly. So in 2000, the National Academy of Sciences said the most important machine in the whole world was the electric utility grid of the 20th century. And so they got this award for the best engineering marvel of the 20th century. This engineering marvel has cost us over a trillion dollars to build over time. And we use it 40 % of the time. So if you're a private sector company, which some of these utilities are, and you have a machine that you built that costs a trillion dollars, and you only use it 40 % of the time, you'd be like, usually we're trying to maximize the operational capacity utilization of this machine.

33:22We spent a trillion dollars on it. We should use it more, right? So the reason they don't use it more is when air conditioning came in in the 1970s, then you had this peak, right? So whenever you have a hot day, you have this peak. And so they built the transmission distribution grid to handle air conditioning. They built a bunch of natural gas peaker plants to be able to power that air conditioning. And so the peak to trough utilization has gone bigger, right? So now you're using 100 units of energy at the top, and you're using 25 units of energy at the bottom, right? And so what they have said to homeowners or condo owners or renters is you can do whatever you want with your demand and we will make sure that the lights work.

34:09That's really expensive. So every time you buy something, whether it's a hairdryer or an espresso machine or whatever it is, they have to upgrade the service to make sure that if all of you turn it on at the same time or some reasonable amount of you, turn at the same time, then you can be accommodated. The other way for them to do that is to say, there are some loads that you just don't care about. Like your water heater. You don't really care whether your water heater turns on right after you finish taking a shower or whether it turns on six hours later when there's excess capacity in the grid.

34:43And a lot of rural electric co-ops have controlled those water heaters for 30 years, so it's not new technology. But if you flatten the load and you shift. The reason this is coming back in a big way right now is because of electric vehicles. Most people who have electric vehicles, they plug in their car when they come home from work or school or whatever and they leave it plugged in for 13 hours, but it's only charging for three of those 13 hours. People don't really care which three hours they're charging as long as it's charged by the time they wake up in the morning. And so people are like, oh, we can actually accommodate a lot more electric vehicles if we do managed charging.

35:26And so once you open that door, well, now you've got to allow water heaters and thermostats and all sorts of other stuff that you have an app for on your phone to be able to do managed charging. And so the old paradigm was that Con Ed just upgraded the distribution circuit every time you found some cool new thing that you wanted to buy. And now we're saying, ah, that's kind of getting expensive. You should actually do managed, you know, charging.

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37:25Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time? Do that with the all-new Adobe Acrobat Studio. Learn more at adobe.com slash do that with Acrobat. So we're about halfway done with our time with you here. And I want to get into some of the specific source of generation. We should talk a little wind and nuclear and all that. But before we do, there's this critique of the way infrastructure in the U.S. has developed these days, particularly under the Biden administration. And the critique is basically, OK, we have this mission to decarbonize the grid, add capacity, all that.

38:02But that the administration adds all these other requirements, social requirements. Oh, the companies have to provide child care and they have to do this or that. all these other things that maybe didn't make it into the bill and maybe other progressive or liberal interests like want to squeeze it in somehow to how we build out. And they're like, we're never going to accomplish these goals of decarbonization. If the company's building this or that also have to satisfy X, Y, and Z, you know, sort of liberal wishlist, progressive dreams of whatever it is. Do you see that in your day to day, that this is an impediment that things that are not directly related to building and electrification get in the way of new construction?

38:44No. So in general, I'd say that we have statutory requirements, right? So for our office, you have to pay Davis Bacon wages for construction. You have to use this thing called the Cargo Preference Act. But other than that, there are no other requirements of my office. And so we don't impose any other requirements onto our applicants. Now, that being said, remember, we haven't done this in 40 years, right? It's not like the United States of America has been building manufacturing facilities, brand new manufacturing facilities for 40 years. We haven't. And so yesterday, I was in Georgetown, Texas.

39:21One of our companies, CellLink, is building their facility up there. They make these extraordinary wire harnesses for electric vehicles that are like 95 % less weight. Which is amazing. But, you know, the thing is, and you would think wire harnesses are things that, you know, you can only make in low-wage countries around the world, but they have this innovative process and so they can make it here in Georgetown, Texas. We asked them to put together a meeting, right, for, you know, workforce. They have to hire about 1 ,000 people. And so, you know, how are you going to do that? Where are you going to go?

39:52Et cetera, et cetera. There were a lot of people who came. And, you know, we facilitated a conversation. There's no mandate there. I wasn't suggesting that they had to hire a good mix of this group or that group or whatever it is. It's more like, let's have a conversation. It was very clear to me that most of the people in that room were so appreciative of selling, creating 1 ,000 jobs in that community, but had never had the chance to provide CellLink any feedback about how they might recruit better. Now, that's not because CellLink's a bad company. CellLink's a startup company that probably almost went bankrupt like three times.

40:30And thank their lucky stars that they got the capital when they needed to to actually get to this point. And now they're building a factory. They're like the American dream. So I'm not surprised that the number one thing that he's working on is not figuring out those workforce issues. The number one thing he's working on is making sure that the Chinese don't steal his technology and that he's continuing to succeed on this stuff. And so he came up after me. His name is Kevin Coakley, and he's great. And he said, you know, Jigar, this was super helpful. I want to do right by these folks in the community.

41:02I want to actually meet all these people, et cetera, et cetera. And so it was a good conversation. I didn't force him to hit some sort of metric or do this thing or whatever else. But, you know, in general, what I find is all of the people participating in the loan programs office are, you know, Americans who are quite proud of their country. They want to do right by their workers. They want to do it right by the communities they're in, et cetera. But it's not surprising to me that they're not experts in that part of building a company. They're experts in their technology. And so we do facilitate good conversations.

41:35I'll give you one more story. So there's one company that we provide a conditional commitment to. I'll try to keep the details sparse so they're outing them. They are going into a state that has an extraordinary shortage of construction workers. and they said, look, Jigar, I'm just not going to be pro-union that's not going to happen, fine so I said, well, but you should sign a project labor agreement they're like, Jigar, that sounds like a union term and so I was like, well, it kind of is a union term so you should sign a project labor agreement and what that does is it mandates and requires the union to do a couple things one is start training workers for you right now six months, eight months before you actually need them But two, if there's actually too much work and not enough workers, you get first in line.

42:25Now, if you end up doing an RFP and you pick a non-union contractor, that's fine. They would still pull from this union hall or not or whatever. Union workers do a lot of non-union contractor work. He's like, Jigger, I never understood that. They never taught me that at Harvard Business School. I don't know how any of this stuff works. And so he was appreciative. It wasn't like he was union, anti-union, pro-union. He was like, I'm probably not inclined to go union. But I do need workers that are trained to actually start working on my job site as soon as I'm ready. And this is going to make it easier for me to meet my schedule and my cost.

43:04Yeah, I'll do that. So you sort of suggested that some of these executives, maybe they just hadn't thought about it before or weren't experts in it because they were focused on other things like competing with China. But just to press on this point, because I think it's kind of timely at the moment, especially given the UAW strikes. But one of the arguments that you hear is if you attach a lot of expensive conditions to the labor force within the US, that makes it uncompetitive compared to places like China or Mexico, where the cost of labor is not only cheaper, but also not unionized and is probably not providing things like child care.

43:40How do you think about the competitive aspect of that? As I said before, the loan programs office requires Davis Bacon wages for construction. In general, that hasn't been a problem. In general, when you construct something, you want the folks who have the most training doing your construction, as you know, firsthand. It helps. And so that really isn't something that we fight over. They're like, yeah, that makes sense. So we want the highest quality workforce so that when we build this building, it'll last for 30 years and it'll be done properly. So that isn't really a problem. There's no requirement for folks to go union for the operating jobs.

44:16We're not requiring that. That being said, we're saying to people that these are, particularly in the manufacturing space, again, which we haven't done really in 40 years, these are craftsmen. They're actually the more they work at that place, the better they get at that job. They become more productive and they provide a lot of insight I think when you hear Elon Musk talk a lot about this at Tesla, they've sort of onshore-ed almost everything that it takes to make a car, right? So they don't really import from 1 ,000 different suppliers. They do stuff here. And what they say is actually the folks who work on the line actually bring a lot of the best innovations to the table, right?

44:58They're like, oh, this could be done smarter. This could be done better. This could be stuff. So in general, I feel like we're having these false arguments because this is something that, I don't know, it finds like certain tribes want one thing, certain tribes want something else. So it's a great fault line to create. But I think we all agree that you want workers who actually want to be there. You don't want turnover. You don't want 10 % of your workforce leaving every month. And, you know, you want, you know, folks to believe that they can, you know, feed their families and, you know, support a community and all that stuff on that.

45:31So I don't think we're arguing over those things. And we're also not saying that 100 percent of everything that America consumes, we consume a lot, is going to be made in the United States of America. Right. And so I think the administration has gone to China, gone to things, saying we're not decoupling. So it's really, but there's a lot of these high value innovations that we've invented out of the Department of Energy. And instead of licensing them to other countries, which is basically what we did for 40 years, we're saying, why don't we tie it to the American workforce and make them here? Nuclear power.

46:04Two questions. What is the role, in your view, in terms of meeting all this demand of nuclear growth in the U.S.? And is the reason we haven't had much nuclear expansion in the U.S. because a bunch of people, there's like some combination of anti-nuclear hippies and people who watch The Simpsons too much?

46:28I challenge the premise of your question. No, I'm just asking, is that the reason or not? Am I wrong? I'm not necessarily assuming that, but I believe a lot of people blame them. There's a lot of stuff going on. Let me try to unpack it for you. So basically, nuclear power really had its heyday sort of in the 60s and the 70s. That's when we built a lot of our nuclear power plants. In the 70s, it was already the case that nuclear power plants were becoming more and more expensive. You had the Nuclear Regulatory Commission. You had a lot more regulation. And so, you know, so you were already getting people less interested in doing nuclear power by the time you got to the late 70s.

47:07Then you had Three Mile Island, right? You can imagine, like, that sort of scared people. And so no one died. Everyone's fine. Like, you know, nuclear is one of the safest technologies in the world. But, you know, it scared people. We basically didn't approve any new nuclear plants after that. We finished the Byron Nuclear Power Plant, which I grew up next to in Illinois in 1984. And then we finished Watts Bar recently. And so we've had a couple of nuclear plants come online. Vogel Unit 3 just came online. Vogel Unit 4 should come online at the end of the year, early next year in Georgia. So I think that in general, the nuclear power fleet that we have now was largely built in the 1970s, right?

47:46Nuclear power is one of those things where the frustration that I have, and I was on the board of Greenpeace for six years, is that they don't actually try to do it better. right? It's always someone else's fault. It's like nuclear power is just so damn complicated. It's so hard to build. This solar and wind stuff is so easy. Like we build complicated stuff all the time. We build like oil refineries. We build like, there's like a lot of semiconductor fabs or no picnic, right? So it's not like we don't know how to build complicated stuff, right? But what I find is, is that in nuclear power, it's always something like, well, if the federal government would just do it.

48:27We should just get the Department of Defense to just do it, right? You know, like, okay, but like, that hasn't really worked for you since the 1970s. So let's not try that, because that's not working. So I think a lot of what we've done is right size the nuclear energy industry by saying, look, you know, these 10 to 15 billion dollar nuclear plants, it's not something that utilities want to build, right? Like, in fact, if you look at, Like the last 40 or 50 years of utility bankruptcies, like half of them were because of nuclear plants. So, you know, I can imagine like a CEO of a utility company is like, I don't know, I don't want to do a nuclear plant.

49:07I like my job, maybe not. Exactly, right? And so now we have this thing called small modular reactors, which are neither small nor modular, but like that's fine. But they basically cost$2 to$4 billion, right? And in$2 to$4 billion, utilities know how to do$2 to$4 billion projects, and they can find bonding for that and insurance for that. There's EPC contractors that have a balance sheet that's large enough to wrap a$2 billion to$4 billion project, etc. So we now have a size that we actually can handle. When you look at Vogel 3 and 4, Vogel 4 was 30 % cheaper than Vogel 3, right? Because the same workforce was working in the same reactor and they did it better the second time around, which you can imagine.

49:46So the way that these small modular reactors work is that you build four in one place. You build 300 megawatt reactors, you build four of them in one place and so you have 1200 megawatts the first one's probably going to come in closer to 4 billion the second one's 30 % cheaper the third one's 20 % cheaper the fourth one's 10 % cheaper and so now you get to a place where it can be cost effective folks can handle it it's bite sized, you can end at any time if you don't want to build the third one or the fourth one and so you're starting to see a formula that people are getting excited about not only are people getting excited about it they're getting excited about US designs because there's Korean designs and Russian designs and Chinese designs.

50:23And so, you know, our good friends in Canada chose a U.S. design, the G Itachi BWX300. So they're building four of them at Darlington. The folks at Synthos in Poland also chose the design. There's a lot of lessons learned. We're following those lessons learned. So I could go on and on and on in an entire podcast about this, but I would say that in general, I don't think it's the fault of the environmental groups or the fault of the Nuclear Regulatory Commission, which everyone likes to blame, or the Simpsons. I think it's the fault of the nuclear energy industry to not say, look, modern finance works this way.

50:59Modern utility CEOs work this way. Modern public service commissions work this way. Let's create a product that actually works within the framework that we have in the United States of America. And they've now done that. So I think we now have a product that people can get excited about. And you saw the governor of Texas announced that he was directing the public service commission to figure that out here. and you've seen announcements from Duke Energy and announcements from Dominion and announcements from the Tennessee Valley Authority. So you're starting to see utilities say, this is actually a really interesting approach.

51:30And so we'll see if it works, but I think that there's an approach now that's fit for purpose. Setting Three-Eyed Fish aside and other Simpsons references, I mean, can you talk a little bit more about how you see it developing? What are the hurdles to actually getting some of these smaller plants set up. Can you walk us through what the process would be and how you would imagine it unfolding? So one of the challenges with the nuclear power industry is that there's no nuclear power industry. So you have like the Nuclear Energy Institute, right? And they're made up of a bunch of utility companies that basically own nuclear power plants.

52:06But like if you ask the CEO of like Entergy or, you know, Duke or Dominion and say, are you a nuclear power person? They're like, no, we own nuclear power plants. We own renewable energy power plants. We own coal plants. We own natural gas plants. And so you can imagine they're not necessarily the driving force behind new nuclear. So then you've got a bunch of other companies you've heard of, like New Scale, Oak Globe, Giottoche, Holtec, TerraPower, X Energy. right but they're also not the nuclear power industry they are nuclear power designers so that's like saying i have an architect and that architect designed a beautiful house yes they've designed a beautiful nuclear power plant and it works and you know when i say it works like they've spent a lot of money at a supercomputer and told me that it works right so like it's not like they've actually built one of these things before so now you've got that so then the question becomes like who is the industry, right?

53:04And so in the case of the G-Atachi BWRX 300, right? G-Atachi is only a design firm. GE does not make any of it. They don't, like, all they do is design it, right? And then they'll probably take it through the Nuclear Regulatory Commission. BWXT is the company that actually has been hired to make it. And they are in the nuclear submarine and nuclear navy business. And so they make a lot of parts for the military. And so they have some knowledge of how to do this, right? And so that's great. And so they're going to do parts of it. And then we have to now find an EPC contractor that wants to do this.

53:41Remember, the ones who worked on Vogel went bankrupt, right? So it's not for the faint of heart for them to decide to get into the nuclear energy industry. But we're, you know, like aspirational, ambitious folks, right? And think about it from a national security lens, right? I mean, once a country chooses a nuclear power plant, let's say from Russia, they're tied to Russia for 80 years. You can imagine the national security complex with the United States would rather that country pick a U.S. design and tie them to the United States for 80 years. So there's a lot riding on figuring this out. So a couple things.

54:18One is that if you're a supply chain provider for nuclear, so you're making a forge or whatever it is, you can imagine ramping this whole thing up for one nuclear reactor is not your idea of awesome. So you're like, well, where are the 10 reactors going to come from, right? So after I do this one, where's the next one going to come from? So in some ways, when I say that Duke has put nuclear into their integrated resource plan and Dominion, the governor has been talking about it, and then you've got the Tennessee Valley Authority where Jeff Liash has talked about putting four reactors at Clinch River, and then you've got the governor of Texas directing the Public Service Commission to do this stuff.

54:54well, now you've got a critical mass of people that are saying we should do this. And then the question becomes, what do you need to go from, this would be really awesome to do in our state, to here's an order for the nuclear reactor. And so we wrote a liftoff report at the Loan Programs Office and the Department of Energy was led by Vanessa Chan at the Office of Technology Transitions and the Office of Clean Energy Demonstrations, which runs the Advanced Reactor Deployment Program. and and these are very cool by the way i don't normally say this about government publications but these ones are i was gonna say the exact same thing they're all really worth reading very readable and really good entry points and just understanding some of these technologies so well done on that thank you thank you we like kept it down to like 30 pages or so and then like it's uh it was uh it was a really an extraordinary effort and then the woman who was the lead off of their Julie Kozaraki is on a speaking circuit.

55:52She's going to all these places and figuring out how to get this person to move one inch this direction and this person to move one inch this direction. And so there's a lot of facilitation and technical assistance that we're providing in this process, but the roadmap is there told to us by the industry in that nuclear liftoff report. So I don't know whether we're going to get there, but those are some of the tenets, right? Is you You need a design that multiple people pick. You need to at least build 10, hopefully 20 of them, right? You need to make sure that the supply chain gets built out. You need to have a trained workforce, right, which we have 13 ,000 people now that have been trained out of the Vogel nuclear plant.

56:31You know, you need all these pieces in order to attempt this. I just thought of a question, and I've been meaning, I've been wanting for like two years to do a whole episode on this, and it just never happened, so now I'm going to ask you this, to answer this in literally one minute. I read the ISM manufacturing report every month, and there's this section on things that are in short supply. And as the supply chain has healed over time, that list gets shorter and shorter. But the most persistent thing that is in short supply for manufacturers is just electrical components. And they complain about that, and it's been this issue.

57:03What is going on there? Do you know what the source of this bottleneck is and what is driving it? Well, I don't know that I know for certain what the source of the bottleneck is. but I would say that in general when you look at manufacturing companies the dynamic with manufacturing is if you build it they will come so I build a factory and you buy one piece and then the next week you buy one piece and then you're going to buy a piece and then you're like I think I'm going to wait two weeks and I'm going to buy something I don't know that's not a reassuring model by which I want to stay ahead of the market I'd like to stay slightly behind the market so that I could charge a higher price, et cetera.

57:46And so for those folks who want us to accelerate investments in the supply chain, they need to make a long-term order. And so for a lot of the electrical contractors or a lot of the utility companies who are wanting transformers or a lot of these other folks. That's the one that they always say is in short-term. But think about it. If you're running an electric utility company, do you not have a predictable track record of how many transformers you install every year? Do you not have an integrated resource plan that says, over the next 10 years, I think we're going to buy this many transformers?

58:19Well, then why wouldn't you just make an order for 10 years worth of transformers this week? You and 10 of your closest friends. And then you build a transformer manufacturing facility in your community. And then they feel confident because they've got orders for the next 10 years. And you feel confident because you've got a local supply of transformers. Instead, I got a bunch of people going, Jigger, we need to fix transformers. And I was like, you should give me an offtake agreement. Oh, I don't know. That seems like a lot of work. And I was like, but there's a formula to how this stuff happens.

58:50It's not like one of those things where it's like, I wish I had an oversupply of the components that I want, and I'm not willing to do anything to actually make that happen. Speaking of bottlenecks, this is kind of a cliched question, but I'd still be curious to get your answer to this. if you could wave a magic wand and make one aspect of the industry or the political landscape or the regulatory landscape go away to make the process of transitioning to cleaner, cheaper energy better, what would it be? Oh, gosh. This is definitely going to get me in trouble. So maybe let me say it this way. I think in general, as I've said before, we have all the technologies we need to not only tackle this problem, but dominate not only, you know, the sector here, but then to export and dominate around the world.

59:46Like whether it's hydrogen or transmission or, you know, whatever it is, solar, wind, all these other things. We have all those technologies. And frankly, we invented them. Everyone's like, oh, China makes solar panels. We invented all that technology, right? Along with Martin Green at the University of New South Wales. And so like, you know, those are the two places where all came from, right? We were forced to license it to them because, you know, like we weren't manufacturing it here. And so one of my big challenges is that as we learn to build again, what we did in the 1970s is basically divorce all politicians from knowledge in this area, right?

1:00:22So all politicians basically have like an airport authority. That's very diplomatically put, by the way. Right? And they have like a sewer authority, an electric utility and a, you know, whatever it is, right? So when you ask them like, hey, how do we lead in this area? They don't know, right? And so they go to the guy who runs the sewer authority or the water authority or the, you know, airport authority. And that person says, I want to do things exactly the same way as my grandfather did in the 1970s. And we should replace everything exactly the same way. I don't want to install new technology.

1:00:54I've already got people who are like trained in the old technology, right? And so why do we do this stuff, right? And And so we need to come back together and commit ourselves to actually taking U.S. technology and deploying it here. And the risk aversion is leading to a lot of increased cost because doing things the same way as the 1970s is crazy expensive. We have stuff that's 90 % cheaper. But what happens is you go to the consultant who you pay and they say, I don't know if that's going to work. I don't know. I know it's been deployed 40 times in China and 50 times in the Middle East and in Europe, but I don't know if it's going to work here.

1:01:35We should do exactly the same thing we did in the 1970s. And so it'd be nice to figure out how to break that knowledge gap so that we're doing stuff here again. One last question. It's an exciting time, and it's fun. It feels like every day or at least every week there's some new announcement. Some of it comes from loan program office funding. like some new battery factory or some new technology or breaking ground on some new geothermal, et cetera. So much winning. We're getting tired of all the winning with all this, but like 2024, like what is, what are we looking for? Are we, is 2024 going to be another year where there's just like tons more in the pipe and we can expect a lot more out of your, of all these announcements?

1:02:20Is there a lot more coming? There is a lot more coming. some of which is predictable, right? You got the Hydrogen Hubs announcement coming out later this year. You've got the GRIP funding for grid resilience coming out here pretty soon. And so some of it's predictable, some of it's not predictable because all the folks who've applied to my office are confidential. But I think that the part that is the most exciting to me is that you're starting, just starting, to get mayors and county commissioners and others going, wait a second, how do we make our town or our county attractive to the next announcement?

1:03:01And so we have, I think, less than 1 % vacancy rate right now in industrial properties. And so if you talk to brokers, they're like, we have no more properties left. I have four applicants who are waiting to pick a site, and that's what's holding them up to actually make an announcement. But then I talked to this guy in Ohio, and he's like, oh, yeah, I have like five sites. We just forgot to like rezone them and we forgot to re-register them this way. And so now he's doing that and that property doesn't actually earn any property taxes right now because it's classified as a brownfield. They like are cleaning it up, putting it back into circulation and like, you know, folks can pick it and then they can like put jobs there and all this other stuff.

1:03:45We just like, it's one of those weird things in the United States where like we have all this extraordinary wealth, right? Wealth of innovation, wealth of engineering talent, applied engineering talent, all this stuff. And we forgot about some of it. It's just there. It's sitting there. And so there's all these pieces that we have to get out. So part of what's going to make next year so successful is not just the announcements around the funding opportunities and that kind of stuff, but also all these micro decisions that are being made by local towns and communities going, wait a second, you're saying that that piece of property that's just been sitting there is actually like an asset?

1:04:25Yeah, it's an asset. Like clean it up. Let's put it back into use. Like they have a rail spur that goes to them. There's actually on the river. People want to like use that so they can transport their goods. They're like, oh man, I thought that was just an eyesore in our town. And so like that to me is super exciting, right? And then we're starting to get a ton of people who are saying, maybe I don't have to go to a four-year college and maybe I can go to Texas State Technical College and do a two-year degree and make six-figure income actually becoming really good at my trade and all this other stuff.

1:04:55And that's bringing pride to people because for a long time, people were like, I like to work with my hands. That was a euphemism for I wasn't a book person. But we actually need a lot of people who want to work with their hands. And so I find that what's most exciting is not the announcements we're making here, but it's leading to a level of confidence in all these other parts of the economy where people are like, maybe we can actually pull this off. Jigar Shah, thank you so much. This is a real thrill. Always love catching up. Great note to end it on. Thank you to everyone, Texas Tribune Fest and appreciate everyone coming up.

1:05:46That was our conversation with Jigar Shah. I'm Joe Weisenthal. You can follow me at The Stalwart. And I'm Tracy Alloway. You can follow me at Tracy Alloway. Follow Jigar at Jigar Shah DC. Follow our producers, Carmen Rodriguez at Carmen Armin and Dashiell Bennett at Dashbot. And a special thanks to Moses Andam. Follow all of the Bloomberg podcasts under the handle at podcasts. And for more Odd Lots content, go to Bloomberg.com slash Odd Lots, where we have a blog, we post transcripts, and we have a newsletter. And if you enjoyed this episode and you want to chat about it with fellow listeners, go to Discord.gg slash Odd Lots.

1:06:24We have an energy room. We have a climate room in there. Lots of fans of Jigger in there. So people will be discussing this one for sure. And if you enjoy Odd Lots, if you want us to do more episodes, for instance, on the future of the nuclear industry or lack thereof, then please leave us a positive review on your favorite podcast platform. Thanks for listening.

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