Coronavirus Report: The Hill's Steve Clemons interviews Ernest Moniz

The Hill's Steve Clemons interviews former Energy Secretary Ernest MonizErnest Jeffrey MonizOVERNIGHT ENERGY: Dems press Trump consumer safety nominee on chemical issues | Lawmakers weigh how to help struggling energy industry | 180 Democrats ask House leadership for clean energy assistance Lawmakers weigh how to help struggling energy industry The Hill's Coronavirus Report: Surgeon General stresses need to invest much more in public health infrastructure, during and after COVID-19; Fauci hopeful vaccine could be deployed in December MORE.

 

Steve Clemons asks former U.S. Secretary of Energy and Energy Futures Initiative founder and president Ernest Moniz about his recent op-ed in The Hill proposing a new “Energy Jobs Coalition” as part of a recovery plan from this coronavirus pandemic. Clemons noted that when Moniz wrote his piece, unemployment claims were at 10 million and they are now at 36 million. 

Secretary Ernest Moniz:  You're right, Steve. And in fact, it might be worth just noting that in the clean energy sector, specifically, with the new job numbers, what we've seen is a reduction of about a sixth in the clean energy jobs in the country, frankly wiping out by a factor of two all of the job increases of the last three years. So, this is obviously a very, very serious situation. And we are seeing throughout the economy not only liquidity problems, but solvency problems. All of that means our recovery is really got to get focused on creating lots of new jobs. Well, over the last five years, the job creation in the energy sector, as we wrote in The Hill, has really outpaced the economy by a factor of two in terms of job creation. We also need to really move along, in fact, pick up the pace on accelerating the transition of the energy economy to low-carbon. And so let's put those two things together. As we climb out of this economic hole, let's put resources into not only meeting immediate needs, but in terms of creating the kinds of clean energy jobs that will have such high leverage in adding to the total job numbers, while moving us on the direction that we want to go anyway in terms of clean energy.

 

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Clemons: You may recall that the last time I had dinner with you was at the ‘Kalorama Conversation’ at the home of the French ambassador. Daniel Yergin was there — a great energy expert. Dan Yergin said that night that a collapse in demand for oil was going to change the entire energy picture, and I'll never forget that. And we talked briefly about what those dynamics would do to the economics for the fossil fuel industry and what that would do for the renewables. Can you share with us, now that we've seen such a collapse of demand for oil and gas, does that hurt or harm the renewable energies picture? 

Moniz: Well, first of all, in terms of the oil sector itself, Steve, I think it's worth noting that demand, of course, will start coming back once the economy is reopened. But I agree with Dan Yergin that frankly, we're going to see, I think, some permanent structural changes in that industry. And those structural changes were being called for before the virus because of the structure of the American oil industry, which was not exactly managing a great cash flow.  And so, as we come back, it's the same theme I just mentioned. Not all of those jobs, frankly, are going to be there, so we need to think ahead. For example, we should be building a very strong carbon capture and sequestration program to make sure carbon is not going into the atmosphere. But if you think about those jobs, putting large amounts of carbon dioxide underground, it's the same skill set as in the oil industry. So that's a good example as to how a coherent view of how that sector revolves can actually be good from the job perspective as well. Now, from the renewables side, I think it's mixed and I think the school is out in terms of how it will turn out. On the one hand, it's clear that things like collapse in fossil fuel prices historically have diminished the enthusiasm for some of the transition, whether it's to wind and solar or electric vehicles, for example. But on the other hand, I think that the reliability of those renewable sources really has to be in people's mind as we have seen this extreme volatility in the fossil fuel industry, specifically in the oil industry. So I think in the end there's a little bit of near-term uncertainty. But in the longer term, I feel very, very bullish that we will continue the low carbon transition. We will continue to see not only renewables but carbon capture and sequestration and nuclear power and low carbon fuels, maybe hydrogen — on which I'm also very bullish — all coming together for a low carbon system that in fact will be effective in supporting a strong jobs base.

 

Clemons: Mr. Secretary, when we have talked previously and also in the opening of this show today, we talked about the Tennessee Valley Authority. You look back at the 1930s at the CCC, the Works Progress Administration. From what you've seen thus far, and you talk to folks on both sides of the aisle, do you find there's an appetite to be thinking big along those terms so that the ideas you're suggesting actually have fertile ground when it comes to some of the stimulus packages that are being conceived? 

Moniz: Well, I think, frankly, the threads have not all yet come together into a beautiful tapestry, but I think there is certainly a lot of interest. In the Congress — in fact, my colleagues from EFI did a hearing, a quasi hearing, a video briefing, really, with members from both sides of the aisle present, in the House. So, I think the Congress is grappling with this. But as you know, just yesterday, the chair of the Fed made the point that we are going to have to need substantial more work from Congress in terms of putting some funds into the economy. And as we discussed earlier, I certainly think that this direction in clean energy does have historical precedent, as you said, in the Depression, for example, where fundamentally things like big hydropower and getting electricity to every house in America were part of that. In the Economic Recovery Act of 2009, we again had some very, very important foundational work done in moving the energy economy forward with new infrastructure, new, big solar farms and the like. And now I think we need the same thing, and I think Congress will be coming to this in a at least reasonably bipartisan way. 

 

Clemons:  If you were to focus in on the two or three most obvious and biggest initiatives that could be done in the energy place so that lay people could understand how to prioritize them, what would be at the top of your list in terms of having a program like this? 

Moniz: Well, one obvious area is energy efficiency. I mentioned earlier that we've lost about a sixth of clear energy jobs in total over March and April. Well, about two-thirds of that job loss was in energy efficiency, because we sometimes forget that a large part of energy efficiency are construction projects that go on in residences and buildings. Well, right now, we could be really making a big push there — maybe not so much in residences quite yet, while we still have at least a large part of the population at home, but businesses, small, medium-sized businesses, public buildings. These are all buildings where even during the virus, we have large parts of the day where there are no or very few people around. And so construction projects could go forward — efficiency projects. That's an example of a big push that would have permanent benefits and could be done and put people to work at the same time. Now, another area that I did already mention for which there is bipartisan support: I believe that in addition to renewables, carbon capture and sequestration, as I said, is going to be very, very important. There's a lot we could do right now. The Congress, in a bipartisan way, has provided some tax credits, major tax credits, for projects that start before 2024. I would put a note in that the IRS needs to finish providing the guidance for the use of those tax credits. But that's a clear manifestation of an important low-carbon direction, one that can be pursued in many places right now and, as I stated earlier, would have a very salutary effect in terms of jobs for those in the oil industry who are suffering major dislocations. 

 

Clemons:  Where is the science of carbon capture and sequestration now? Is the science there and is this now a dependable solution?

Moniz:  In terms of capturing the carbon dioxide that's being emitted from power plants or from industrial facilities — now, over the last several years, there have been in the United States and elsewhere many large-scale projects. Large-scale means typically a million tons of CO2 or more per year. Now, the costs have come down as that's happened. We need more cost reduction. But again, that will come as the area scales up and perhaps new technologies for capture also evolve. On the sequestration side, I think we know a lot about the geology. We have vast capacity for storing carbon dioxide deep underground. We do, however, need to catch up in terms of regulatory procedures, liability issues being resolved, many of these at the state level. So, there's still a lot of work to do, but frankly, there's no doubt that we couldn't move out right now. We have big projects going on in Texas and Illinois. We are working to try to promote some projects going forward soon in California. In fact, one of the studies we did, Steve, at the Energy Futures Initiative we published this last year on California's pathways to meet its low carbon goals — we pointed out that by 2030, getting some carbon capture and sequestration going is practically essential for them to meet the 40 percent economywide emissions reduction goal that is on the books. It's a law in California. So, really getting moving on that quickly is, again, another great opportunity, I think right now, as we dig out of this virus-induced economic hole, and meet our carbon requirements, which is going to be another, after all, major threat to society if we don’t. 

 

Clemons: In our last couple of minutes, I want to ask you kind of a political question. I interviewed your successor, Rick PerryRick PerryTrump, Biden set for high-stakes showdown President Trump faces Herculean task in first debate Energy secretary questions consensus that humans cause climate change MORE, former governor of Texas, when he was secretary of Energy — and the governor took pride in the level of emissions reductions in Texas. And I asked him, kind of facetiously, “Are you allowed to say that publicly?” Because in his administration, there is an aversion to using the words "climate change." There's a skepticism towards science about this. ... What kind of appetite across both sides of the aisle are you finding for EFI’s work and proposals like an Energy Jobs Coalition?

Moniz: I believe there is. Certainly, we've been getting very good receptions with our framework, which we call the Green Real Deal moving forward. But I also want to remind you, Steve, it's not only the EFI. When when I was secretary at the Department of Energy, with my colleagues, not only at DOE but across the government, we produced what was called the Quadrennial Energy Review, two volumes looking at energy infrastructure needs, and specifically, electricity needs. Those were very, very well received. That was a Republican-controlled Congress and yet twenty plus of the recommendations in the Quadrennial Energy Review were put partially or totally into law — not just discussed in the committee, but put into law. So I think, the idea of — while the "climate change" words are sometimes de-emphasized if you like in the discussions, the solutions to climate change, I think, have great support on both sides of the aisle. Especially when we continue — what was the Obama administration mantra? The president many, many times used the words ‘all of the above,’ meaning that it's renewables and storage. But it's also things like carbon capture and nuclear power and advanced bio fuels. Many, many options for going to low carbon while completely serving the needs of our energy economy, and doing so economically, and, I keep emphasizing, with very, very strong contributions to building the employment base in this country.