So, this morning, we’re going to hear from experts on how we balance the country’s energy needs with environmental protections and regulation. And these discussions, as you know, come against the backdrop of a dire climate report issued by federal agencies last week. So, before we begin, I’d like to thank our presenting sponsors for this event, Exelon and Pepco, who you’ll hear from later in the program. And our supporting sponsor, the University of Virginia.
So now I’d like to get started and welcome to the stage acting EPA Administrator Andrew Wheeler, and The Washington Post’s Juliet Eilperin. Thank you.
Building the New EPA: One-on-One with the Acting Administrator
Eilperin: Good morning. I’m Juliet Eilperin, senior national affairs correspondent for The Washington Post, joined by EPA Acting Administrator Andrew Wheeler, who is also the president’s nominee to serve permanently in that position. Thanks so much for joining us.
Wheeler: Absolutely. Good morning.
Eilperin: And I wanted to let our audience know that you can tweet us questions using the hashtag #PostLive and I’ll try to get to some of them later on. Right now, we will head off. As I’m sure many of you know, Mr. Wheeler started his career at EPA as a special assistant in the office of Toxics and Pollution Prevention. Worked there, did two decently long stints, first on Capitol Hill, and then in the private sector, before rejoining the agency as deputy administrator in March. And then assumed helm of the agency in early July.
So, clearly, one of the things that’s been in the news lately is the release of the National Climate Assessment, which several EPA scientists contributed to. And the president, as well as some other cabinet members, have weighed in on the assessment since it’s been released. Most recently with the president telling my colleagues, Josh Dawsey and Phil Rucker, yesterday, you know, commenting at length on climate change, describing himself as among others with high intelligence as being not such believers in climate change and the role that humans play in driving it. And, you know, questioning various aspects of the assessment.
Could you explain how you see this hallmark that the government released and the role that the government plays in that?
Wheeler: Sure. First, I want to recognize the hard work of a lot of federal employees in putting together that assessment, people from 14 different agencies and departments over several years. But I think it’s important to recognize that the majority of that report was written in 2016. And it was at the direction of the previous administration. It’s been going through review over the last two years. I think a lot of the criticism that you’ve seen from the Trump administration on the report the emphasis from the media on the worst-case scenario in the report, which is based on—I believe it’s called the “RCP 8.5,” which is the worst-case scenario. It’s a scenario that the IPCC, the U.N.’s IPCC, is moving away from.
So I think a lot of the worst-case scenario information in that assessment is what’s drawn the error [h] of a lot of people within the administration. But I think it’s also important to note that this report, during the last two years of review, had no political review by this administration. We did not review it. I did not see the report until it was released, for example. And I’ve been reviewing it since it was released last Friday. I haven’t read the entire report yet, but I’ve gone through it. I think there’s a lot of interesting things that we need to follow-up on and ask more questions about.
But there’s certainly a lot of hard work went into it and I want to thank the career employees who spent quite a few years working on this assessment.
Eilperin: So I take you point, there were multiple scenarios, obviously, that were examined in the report, including a lower-case scenario, which still projected, for example, that there would be billions of dollars in impacts from climate change towards the end of the century, whether you’re talking about lost work days, extreme weather, and others. Having now had a chance to look at some of that report, do you see that lower assessment as laying out a realistic projection of what could happen from climate change? And are there implications, at this point, looking at what you’ve seen, what would be the policy implications of, say, what’s projected under a lower-case scenario?
Wheeler: Even the lower-case scenario that was emphasized in the report was the 4.5, I believe. And both of those scenarios downplay innovation and innovation that we’ve seen already in the marketplace. It doesn’t really give credit to the fact that we’ve seen a 14% reduction in CO2 emissions in the United States since 2005. In the first year of the Trump administration, we’ve seen 2.7% reduction in CO2 from 2016 to 2017.
So I have some questions about the assumptions. I want to know more about what they used, and how they looked at some of the assumptions, and how they looked at the interplay of technology and projections for the future. Because, you know, with the 14% reduction that we’ve seen, and the 2.7 in the first year of the Trump administration, I think we really need to take a hard look at where the markets are going, where technology is going, where innovation is going, and what has driven the reduction in CO2, and we need to give credit for that CO2 reduction.
Eilperin: Now, as President Trump and others, including your predecessor, and I think you’ve noted that clearly the U.S. has made, for example, significantly more reductions in greenhouse gas emissions in recent years, compared to other countries, whether you’re talking about major emerging economies, or even some of the developing countries overseas. As we’ve seen, you know, many of them don’t have the natural gas resources or have had the same rapid deployment of renewables.
Now, at the end of this week, the president is headed Buenos Aires where, at the G20, one of the major topics on the agenda will be climate change. There’s obviously a communique that’s being drafted. And from what we’ve seen of early drafts of this communique, it will mark a departure from, for example, earlier statements, some of which the Trump administration has differed with, which embrace the Paris Climate Agreement, talk about the importance of reaching those benchmarks. And instead will lay out the idea that each country should pursue its own path in terms of addressing the issue of climate change.
Could you share with us a little, what is the administration’s thinking and strategy on both specifically this document, which the president will be weighing in on, and, broadly, what needs to happen in terms of an international climate approach, given that we also have the talks coming up in Poland within the next few weeks?
Wheeler: I’m going to have to leave this document, the G20, to the State Department. But if I could just—from the EPA’s perspective, from our perspective, you know, as I said, we reduced our CO2 emissions 14% compared to most of the industrialized countries have a seen a 20% increase in their CO2 emissions. The president campaigned on withdrawing from the Paris Climate Accord. We are withdrawing from the Paris Climate Accord. We’re still participating in the U.N. process. I will have staff in Poland next week for the U.N. Climate Conference. We’re still participating in the process, but we are withdrawing from the Paris Climate Accord.
Eilperin: And how do you hope to shape that process? Given the fact that we’re exiting from Paris, but still participating, what is it that the administration hopes to achieve through that international policy ?
Wheeler: When the president announced we were withdrawing from Paris, he said we’re withdrawing from Paris unless we can renegotiate a better treaty. So we want to remain part of the conversation in the event that the other countries are willing to renegotiate the treaty. At this point, most of the industrialized countries that are signatories of the Paris are not meeting their obligations. We’re actually meeting our Paris reduction obligations, but we are going to withdraw from the treaty.
Eilperin: Understood. So when you took the helm of the EPA in early July, in the wake of Scott Pruitt’s resignation, you obviously sought to strike a different tone. You’ve talked repeatedly about your experience as a career official and recognized what career officials have done. At the same time, we’ve seen a massive staff exodus from the agency since January of 2017. And there have been many officials who have expressed unease with the regulatory rollbacks that the administration is pursing at the agency.
What do you to really kind of set the EPA on the course for the next few years and muster the internal support for some of the work that you’re pursuing?
Wheeler: Sure. I’m not positive that the, quote, “mass exodus” is a result of the administration change.
Eilperin: Well, there was an encouragement for buyouts that was, in fact, led by a push to reduce the agency size .
Wheeler: Right. But we also have 40% of our workforce at EPA is eligible to retire over the next five years. Which, for any organization, is a huge challenge. We are in the final processes of recruiting a new human resources director. We haven’t had a full-time human resources director for quite a few years now. And that is one of the challenges. I met with the leading candidate for that position a couple weeks ago, which I understand it’s unusual for the administrator to meet with a candidate for the human resources position. But I really view the human resources issues as very critical to the agency.
We have some challenges as far as retention. We have challenges as far, as people do retire, making sure that the information that they’ve learned over the years is passed on to new employees. And we have challenges as far as attracting new employees to the agency. I don’t believe that the private sector has quite figured out how to deal with millennials, for example. And I know the federal government hasn’t really focused on that all. Most people who graduate from college today are going to have three or four careers over their lifetime. The EPA historically has been an agency where people go to work at the agency and spend their entire career, 30, 40 years at the agency.
And we have to be more nimble as an organization, going forward. And that’s one of the management challenges that I see and that I’ve talked to our human resources people and the person that we’re recruiting to take over the helm at the agency for human resources .
Eilperin: And at this point, do you see a good strategy in terms of, for example, bringing on the next generation? And do you have a sense of what’s the right size for an agency where the administration, certainly in very budget document they’ve published, have pushed for to shrink, essentially?
Wheeler: Well, the reason I wanted to meet with the human resources candidate before we hire them is, I wanted to make sure that they weren’t blindsided on day one, when I ask them, “Please solve this problem.” I’ve identified the problems and I want to work with the human resources. I’m not a human resources expert, but I have identified that we have these human resources issues at the agency. I’m very concerned about the—I want to leave EPA in a better position than in which I found it, when I eventually do leave the agency.
It’s one of the reasons why I visited all 10 of our region offices. I’ve done all-hands meetings at all of our regional offices. I’ve been to our two largest labs and I intend to go to the rest of our labs around the country over the next year.
Eilperin: When we finish talking, the California Attorney General Xavier Becerra will be taking the stage with my colleague Brady Dennis. And he has, by my count, sued the Environment Protection Agency a dozen times since President Trump has taken office. It’s been on a range of fronts, but one of the areas where he’s been particularly aggressive and pushing back is the administration’s push to freeze fuel efficiency standards for cars and light trucks for six years, starting as of model year 2020.
Why is he wrong when he challenges the legal basis for that proposed rule?
Wheeler: Well, California is only looking at this issue under one policy agenda item, and that is energy efficiency or climate change. And our administration, we have multiple policy initiatives or policy reasons to move forward on the CAFE standard. And one of the overarching ones is the lives saved and trying to get safer cars on the roads.
The Obama administration rushed through their midyear evaluation of the CAFE standard in 2016. They started the process at the end of November of 2016 and they finalized it before January 20th. That included a 30-day notice and comment during that two-and-a-half-month period. They didn’t look at a lot of the data, and there was a lot of data that was missing in their analysis. You know, some of the things that we’ve looked at is the fact that the average age of cars on the roads have increased over the last decade. The average age that people are holding onto their cars is now 12 years. It used to be seven or eight years.
Our proposal will get those older cars off the road. We will encourage people buy newer cars, which are both safer and better for the environment. It’d bring down the price of a new automobile by $2,300 and we project there’d be a thousand lives saved per year. And the difference between our proposal and the Obama administrations proposal is miniscule as far as the CO2 benefits are concerned.
Eilperin: And now, as you’re well familiar, EPA career experts disagreed with that safety analysis that you’re talking about, which was prepared by the Department of Transportation, in certain aspects. Including the fact that they questioned how they analyzed vehicles, miles traveled, under the scenario with people hanging onto cars. Is that to say that you fully embrace the Department of Transportation’s safety analysis that came out in the proposed rule this summer?
Wheeler: Well, we certainly had a robust discussion within the federal agencies before we put forward the proposal. NHTSA, they have the lead on highway safety issues. We’ve taken comment. We’ve received a huge number of comments on our proposal. We’re going through those comments now. And we’re taking a look at the underlying data that we use. We’re looking at other people’s data that they submitted to us. We want to make sure that the final regulation reflects the best available information that we can get.
Eilperin: Got it. You’re getting close to issuing a proposal to redefine a rule known as “Waters of the U.S.,” which affects how developers, farmers, and others dredge and fill waterways, streams, and so forth. Given this is an issue that has bedeviled administrations of both parties for years, how close are you to issuing a proposal ? And could you explain how you think you’re confident this could pass legal muster, given the challenges this rule has had over the years?
Wheeler: Sure. We are very close. I’m not ready to announce anything today. Sorry. But we are very close to an announcement. And, you know, the overarching goal for our new proposal on Waters of the U.S. is I want to make sure that people can stand on their own property and determine for themselves whether or not it’s a federal waterway.
In the past, people have had to hire lawyers or consultants to try to figure out whether or not their property contains a federal waterway. We want to make sure that the definition is clear and concise. We’re following the Clean Water Act. We’re following the Supreme Court cases. And my goal is to make sure that we have something that will stand up in court and provide certainty to the American people so that they can tell for themselves whether or not they have a federal waterway on their property.
Eilperin: You inherited dozens of policy decisions from your predecessor, and two of the most controversial ones are decisions that Scott Pruitt made early on: not to ban chlorpyrifos, a pesticide linked to neurological damage in developing babies, and methyl chloride, a paint stripper solvent that has costs several Americans their lives. Can you share your thoughts on keeping both of those products on the market as they are now, today?
Wheeler: Well, the chlorpyrifos, we are going through our risk analysis, which does take a couple of years to complete. But we’re going forward with that. I’m not sure what the results will be at the end, but we are certainly reviewing that, and we could end up banning that chemical based upon the risk analysis we receive on chlorpyrifos.
On the methyl chloride, we are looking hard at that, and we hope to have a decision shortly. The questions around the methyl chloride are basic consumer-use versus commercial use and Department of Defense use. There’s a number of different uses for the chemical and we’re taking a look at where the accidents have been, whether or not the warnings have been appropriate on the labeling, and a number of different factors. But, hopefully, we’ll have a decision on that shortly.
Eilperin: And specifically—just returning briefly to this issue of the interview that the president gave The Washington Post yesterday—he, in kind of great length, essentially dismissed the findings of the climate assessment. Not just its projections, but the scientific foundations of what that report is based on. And so given that, can you explain what you’re telling your staff, where the EPA stands on it, and what you’re telling the American people on the drivers of climate change and its implications for this country—[OVERLAPPING]
Wheeler: I believe that man does have an impact on the climate, that CO2 has an impact on the climate, and we do take that seriously. As I’ve pointed out, though, we’ve had a 14% reduction in CO2 emissions. And I’ve not had an opportunity to talk to the president specifically about the assessment since it came out on Friday. But from what I’ve seen in the press, his main complaint has been against the projection about the 10% hit on GDP. And that actually is not in the report. In the report they reference an outside study that projects the 10% hit on GDP. And if you take a look at that study, my staff tells me that that study was funded by Tom Steyer, and they only looked at five or six of the economic indicators for GDP, and you typically look at over 20 indicators or sectors.
So I do have questions. I’ve asked my staff to brief me on that aspect of the assessment. I’d like to know a little bit more about that. But from what I’ve seen from the president’s comments, that’s been his biggest complaint, is the projection that it may hit the economy. Again, I don’t think the assessment really took into account the innovation that we’ve seen and the technological advances that we’ve seen in recent years. It basically freezes technology going forward.
Eilperin: And I assume you’re familiar that, by the way, the lower projection, which still includes billions of dollars of damage from climate change, was largely based on an EPA 2017 study, correct?
Eilperin: And so, you know, one thing you mentioned, that you didn’t review the report at all before it came out. Obviously, were you surprised that, for example, the president didn’t, and that, again, top officials, who are setting policy for this administration, didn’t review this report before it came out? Can you shed a little light about why there wasn’t any kind of process through which you were examining, again, the products of 14 different agencies who were assessing where we stand ?
Wheeler: I think if we had intervened and made changes to the report, we would have been accused of manipulating the scientific recommendations of the career staff. But again, the report was mostly written prior to this administration, in 2016. It’s been going through review over the last two years, the peer review, the external-internal peer reviews. I don’t think it would have been really appropriate.
I think the drafting of this report was drafted at the direction of the Obama administration. I don’t know this for a fact, but I wouldn’t be surprised if the Obama administration told the reports authors, “Take a look at the worst-case scenario for this report.” Because, obviously, they did take a look at the worst-case scenario, the 8.5, which, as I noted earlier, the IPCC is moving away from because of uncertainties with that scenario.
So, you know, going forward, I think we need to take a look at the modeling that’s used for the next assessment. I think we need to take a look at maybe more realistic projections on technology and innovation. I don’t think it’s appropriate to freeze technology in 2018—or, in this case, I think it was 2016—and project that there will be no further innovations in technology going forward. I think there will be and there has been.
Eilperin: But since the report has come out, obviously, you said you’ve been going through some of it. Do you have any surprise that, for example, the president hasn’t now sat down on this report? Or is there a plan in the works for the top heads of all these agencies to read this, have a meeting with the president about it? Is there any formal process that will come now that it’s come out, that you can speak to?
Wheeler: I’m not aware of a formal process within the administration. I’m certainly looking at it. I’ve already talked to my staff about it. I’ve asked a number of questions. I’m going to be briefed on it further. Again, the report, of course, just came out on Friday. I have a copy. I’ve been reading through it. I haven’t finished the entire report yet, but I have a number of questions about it, and I’ve started asking those questions.
Eilperin: Before this report came out, have you had any formal briefings, for example, with EPA climate scientists yourself about what research they’re doing currently or their assessment of what’s going on? Apart from this particular assessment, have you had any—[OVERLAPPING]
Wheeler: Not specifically on climate research, but when I visited our labs, like we went down to RTP in North Carolina and Ann Arbor. I’ve been briefed by different scientists on the different work that they’re doing individually.
Eilperin: Got it. And with the Democrats taking control of House majority come January, clearly, one thing that we will be facing is oversight hearings that have not happened in the past. Can you talk about both how you’re preparing for that and how you plan to approach a moment where the House of Representatives is going to be calling you and your staff in connection to a number of key policy decisions that have been made over the last couple of years?
Wheeler: I’m looking forward to the Congressional oversight hearings. We have nothing to hide. Everything we’ve done has been out in the open. I’m happy to go into detail on our ACE proposal, or the forthcoming WOTUS proposal, or our CAFE proposal. I think when the members take a look at the data that we used to reach the decisions, and they examine the laws that we are implementing—you know, my biggest complaint against the Clean Power Plan was the fact that the Obama administration went beyond the Clean Air Act. We’re following the Clean Air Act. We’re following the Supreme Court cases. We have nothing to hide on the oversight.
Eilperin: You’ve talked a lot in this conversation and elsewhere about innovation. And one of the things you’ve obviously talked about is what folks describe as “clean coal.” In other words, more efficient coal plants, which certainly is something that your policies have promoted. Could you talk, as someone who clearly worked for Murray Energy, as a lobbyist for one of the largest U.S. coal companies, what is the role that you see coal playing in the U.S. in the years to come, as well as globally?
Wheeler: Certainly. I will point out that I represented over 20 different energy and environment companies and interests when I was a lobbyist consultant. Coal has not yet peaked worldwide in its usage. It continues to expand in China, India, Indonesia, Asian countries. And one of the criticisms I also had on the Clean Power Plan was it took the U.S. coal industry out of the mix here, which means that we would not longer be developing cleaner coal technologies in the United States.
Under our ACE proposal, we see a future for coal that will allow coal technology to continue to expand here. And that technology can then be exported to other countries. The Clean Power Plan would have basically frozen any innovation in cleaner coal technologies at the 2015 technology levels. I think by encouraging cleaner coal technologies here in the United States, we will be encouraging cleaner coal technologies worldwide, be exported worldwide, and you’ll see a decrease in emissions worldwide because of the U.S. investment in technological advances.
We’re the only country that really invests in cleaner technologies as a whole. And our technologies are exported worldwide.
Eilperin: And when I had shared on Twitter this morning that I was going to do this event, one of the questions that someone tweeted back at me is, “Ask Acting Administrator Wheeler what are three policies, that the administration is championing, that are reducing air pollution in absolute terms, and three policies that are reducing water pollution in absolute terms.” What would you say to that?
Wheeler: Well, we just announced the NOx for heavy-duty trucks. A proposal a couple weeks ago—
Eilperin: Nitrogen oxides.
Eilperin: [OVERLAPPING] smog-forming pollutants.
Wheeler: You know, while we’ve seen NOx reductions decrease by 40% by 2025, a third of NOx emissions will be coming from heavy-duty trucks, and we wanted to make sure that those reductions will help areas around the country reach attainment. We are focused very much on non-attainment areas, trying to make sure that all of the communities around the country can reach attainment of our NOx standards.
I’m not sure I’m going to be able to give three off the top of my head. But on our ACE proposal, it’s going to decrease CO2 emissions by 35% by the time it’s fully implemented. Our CAFE standards, that’s also lives saved, but it’s going to have an impact on pollution as well. Our New Source Review improvements that we’ve done there. You know, New Source—
Eilperin: On the New Source Review, which has obviously come under great scrutiny, there’s been a question of whether this is going to allow some aging plants to operate longer, and, in fact, release more emissions.
Wheeler: But the New Source Review process in the past has actually stopped companies from installing cleaner technologies. By allowing companies to install cleaner technologies, without having to go through the entire New Source Review process, it’s going to reduce pollution on a plant-by-plant basis.
On the water side, we’re working on removing lead from drinking water. We’re updating the Lead and Copper Rule. We hope to have the proposal out early next year. That’ll be the first time that that rule has been updated in over 20 years. We’re working on PFOS and PFOA. We have a national strategy that will be coming out shortly that will help communities reach drinking water standards and protect them on the PFOS and PFOA issues.
We’re moving forward on a lot of regulatory initiatives, a lot of cleanup of areas and assistance to states and local government. President Trump, when he called and asked me to take over the acting administrator role, said, “Continue to clean up the air. Continue to clean up the water. And continue to deregulate to create jobs.” And we’re doing all three.
Eilperin: I just want to delve in a little deeper to what, you know, obviously, former Administrator Pruitt declared a war on lead. And you just alluded to that. As well as the fact that there has been this summit on PFOS, some of these other chemicals. We’re seeing these compounds pop up around the country that are linked to thyroid problems and others. You have huge instances of, for example, schools and communities having to, for example, resort to bottled water. That’s going on.
Clearly, it’s taken a great deal of time to come up with some of these proposals you’re talking about. Can you explain why, for example, with the Lead and Copper Rule, that it’s taken as long as it has? And can you just shed any light on what kind of proposals EPA is preparing on these two really critical drinking water issues, which affect Americans across the country?
Wheeler: Let’s talk about the Lead and Copper Rule for a minute. Again, the last major update was over 20 years ago. The EPA has talked about updating that regulation for at least 10, 15 years. We are moving forward with it. And I will admit, it would have been out by the end of this year, but I slowed it down for one really important reason. When I briefed on it in July, my biggest concern—if you take a look at the lead infrastructure around the country, with the amount of money it will take to replace all the lead pipes, it will take 20 to 30 years to replace all the lead pipes in this country.
I was concerned about how we were prioritizing where we’re replacing the lead pipes. I wanted to make sure that we could figure out a system where we could target the most corrosive lead pipes first. Because I didn’t want the last mile of lead pipes, cleaned up 30 years from now, to be the most corrosive mile. I challenged our staff to go back and figure out a way of prioritizing. And first, we have to catalogue where all the lead pipes are in the country, which has not been done before.
Then we have to figure out, you know, based on some analysis, based on some testing, what are the areas in the country that probably have the worst lead pipes so we can focus on those communities first. I don’t think it should depend on your zip code on whether or not you have clean drinking water, safe drinking water. So I challenged the staff to see if we could accomplish that. They’re working on that. They think they can. We certainly do a much better job now at approaching it so that we can the most-corrosive pipes replaced early in the process instead of later.
If we had just gone forward with recommending lead-pipe replacement, you could’ve seen communities with corrosive pipes waiting 20, 30 years for their pipes to be replaced, and I didn’t want to see that happen.
Eilperin: Other contaminants, such as PFOS, can you give a sense of where you’re headed on that?
Wheeler: PFOS, PFOA, that is a multi-agency effort. It involves five of our offices. We have a draft plan that we hope to circulate through the interagency review process this week, actually, and have something that we can announce in early January, on a strategy to address PFOS and PFOA, and the other compounds.
Eilperin: Unfortunately, that’s all the time we have. Acting Administrator Wheeler, thank you for joining us. I’m now going to hand off our program to Brady Dennis and Attorney General Xavier Becerra. Thank you so much.
Wheeler: Thank you.
The Democrats’ View: The Resistance to the Trump Agenda
Dennis: Good morning everyone. I’m Brady Dennis. I’m a national reporter here at The Washington Post, and we’re pleased to be joined today by the attorney general for the State of California, Xavier Becerra. Thanks for coming.
Becerra: Thank you.
Dennis: I want to remind the audience in the room and those watching online that you can tweet questions for our panelists using the hashtag #PostLive. I’ll try to get to a few of them later on in the session this morning. So to start, AG Becerra, we just heard from the acting administrator of the EPA, Andrew Wheeler, about Trump’s environmental agenda, how he plans to continue to carry that out. It’s no secret that you’ve been among the most active opponents of that agenda. I think I counted and my colleague Juliet referenced about a dozen lawsuits that you’ve filed on methane rules, ozone standards, and we’ll get to some of the others.
Opponents of President Obama’s environmental agenda also sued often, namely Scott Pruitt. Why is your approach different? And tell us why you believe that this administration is particularly unlawful, and how confident are you that California and other states can prevail in court on some of these issues?
Becerra: So, Brady, let me begin by first saying thanks for having me. I’m pleased to be here. I’m not so pleased to be in a cold place. I’ve got accustomed to California again. And that’s not due to climate change; it’s always been that way. California has been great.
I don’t perceive what we’re doing in California as opposing the Trump administration or the EPA. I see it as defending what the EPA was meant to do, is to protect the environment; and if the EPA and its personnel are not going to do that, then we’re going to step up and protect the laws that are in place and do what we can to fulfill the mission of the EPA, which is to protect the health and environment of the United States of America. And so it should not surprise anyone that we’ve had to sue the EPA about 12 times. We’ve sued the administration some couple dozen times, interior, energy, EPA, and others on environmental issues to essentially make sure the federal government fulfills its responsibilities under federal law, which they have not done, and I say that affirmatively because we’ve got court decisions that say they haven’t done their job.
Dennis: And, again, just a little more on why you think that the lawsuits you’ve chosen to file will ultimately succeed?
Becerra: Well, some have already succeeded. It’s interesting to hear the acting administrator take credit for some of the reductions in CO2 and so forth when they’ve been trying to backslide on those requirements that they’ve had, so it’s pretty bold to take credit for losses in court that have required them to continue to move forward and do what they tried to stop doing, and I think what we’re finding is that the courts are siding with California and other states because the process is pretty clear. I mean, whether you’re a five-year-old learning the rules at home and at school, or whether you’re an administrator of a very important federal agency, you’ve got to follow the rules, and when you don’t you get punished, and the courts have been punishing this administration quite a bit.
Dennis: I want to turn to the National Climate Assessment, which has gotten a lot of attention in the last few days and we heard about in the last session. I have a couple of questions on it, but the first I want to ask is just—this report that essentially at its core said that the effects of climate change are intensifying around the country and will continue to do so—what do you make of the administration’s response to it?
Becerra: Well, I think I’ve read more of it than they have, and I haven’t read very much. It’s kind of disturbing when they’re in charge of trying to protect the nation’s environment; and, again, EPA’s job is not just to protect the environment, it’s to protect the health of the American people, and so for them not to read a report that was just issued by their own folks and many other agencies is disturbing because you would think that what drives their policy is the work that’s being done by the experts, the technicians, and if you don’t read it—you know, I know a whole bunch of peers in school who never studied for the test and never did very well, and these guys aren’t studying for the test.
Dennis: We can all see what the administration, what the president himself has said about that report that came out Friday—you can see it on today’s Washington Post front page—but beyond the political arguments around a document like this, around a report like this from the federal government, I wonder, for you, what the 1,700-page report means in a legal sense. How do you expect to use it in court challenges? In what ways do you see it being central to some of the cases perhaps that you have already brought?
Becerra: It’s certainly validation to what so many people including scientists have been saying for the longest time about the consequences of ignoring climate change. It speaks to the courage of the people within agencies who probably feel threatened every day going to work and doing what they’re supposed to yet move forward and issue a report that is a scathing indictment of what this administration has tried to do. And I think it’s, at the end of the day, nothing more than an affirmation of what the facts have shown.
I suspect President Trump considers facts unfriendly, and it’s an unfortunate thing because they can be very stubborn, and in this particular case I think the facts speak dramatically, and they come out of his own shop. And so for him to not read the report, to ignore what it says, it just confirms what, I think, disturbs so many people about the Oval Office.
Dennis: And do you suspect that in cases where rollbacks of environmental regulations and whatnot that this will become a piece of what gets debated about in court, ruled on in court?
Becerra: It’s not just evidence; it’s evidence from the experts within the federal government. I did my studying for the test, and I know that I can use good evidence in court, and so absolutely we’ll use every single piece of that report where we can to continue to do the work for the federal government that it’s unwilling to do.
Dennis: I’d like to turn to one particularly intense fighting between Washington and California—there are many we could choose from—and that’s the battle over fuel efficiency standards for cars and trucks. You could give a background primer if you want to. California has long had a waiver under the Clean Air Act to set its own standards, and under the Obama administration there was an agreement to which cars would reach an average, I think, of 54 miles per gallon by 2025. The Trump administration has proposed to essentially freeze the standards beginning in 2020. You and other states have already sued over that, and I believe you probably expect a ruling in the coming months. How does this mess get resolved? Why is it such a significant issue? Do you see any compromise, any blink from either side?
Becerra: So, Brady, I want to first make something clear. When we go to court it’s not because we’re looking to oppose the Trump administration, it’s because we in California cannot afford to backslide. We have demonstrated that you can be clean when it comes to air and water and be prosperous, and so with 40 million people we have an obligation to continue to crate good-paying jobs that give people a chance for a good quality of life in the State of California. And so we can’t go back to the bad old days where we pollute more. It would cost our businesses and industries billions of dollars if they were to try to descend to the bottom in this race to pollute. And so we’re going to defend everything that we’ve done to make us both number one in clean energy and number one in manufacturing in the United States of America, but we do it in a way that follows the law.
When we stand up to the federal government, I don’t think I’m opposing most of the folks who work in the federal government, or in fact I don’t think I’m standing up against most of the people who work at EPA. We’re standing up to a few people who get to make the final call who are probably not only opposed to what most Americans believe but opposed to what most of the folks in their own agency believe, and clearly this document that just came out proves that they are speaking against their own experts. And so the lawsuits that we have filed, I think, are being validated in court because at the end of the day I think there still is a place for the rule of law, and if you’ve got a law in place the rule is you’ve got to follow it. These folks have done a very poor job of trying to follow the law.
Dennis: On this issue in particular though, I think it has the potential, on many of these, but on this in particular, to affect—you know, an issue in California can affect the whole country if it fractures the auto market, the auto industry. And so from an ordinary-person perspective how does this get resolved? I mean, if California goes its own way and the Trump administration stands to what it has proposed, how does that play out?
Becerra: So we believe we have a very strong case on the clean car standards because these are standards that are federal. We’re not asking the federal government to do something they already aren’t doing; we’re simply asking the federal government not to backslide on what it said it should do. And if you take a look at the record it’s a pretty robust record developed not over just a few weeks or a few months; it was years in the development, and so it’s a very strong record that we have to go in. It’s a record established by our adversaries, the federal government, in court. Compare that to the record they put forward, which was rushed, which uses some really funny science, and I think that there’s a strong chance that the courts are going to make clear that you’ve got to follow the right rules here.
In terms of the waiver that California has had for quite some time, remember, this national standard that’s in place has been in place now for several years. It’s a standard that essentially harmonized up to what California’s standard had been for many years before, and what we in California have done has always led when it comes to the environment. In fact, we were doing environmental work before the Clean Air Act even existed or the EPA existed, and that’s why California was granted waivers way back then more than 40 years ago.
We’ve never had a waiver—and there’s been dozens of waiver that the federal government has given California—never had a waiver overturned, and the authority that California has to move forward to do what it can on the environment has been ratified by Congress, and so when EPA says they want to take away California’s authority to go out there and set standards to make sure that California does what it can to clean air using technology and evidence that’s available to us today, we feel very confident that we have a strong case.
Dennis: And just briefly, to play off some remarks by Administrator Wheeler, you know he made the argument that the Obama administration rushed its review at the end of his term, and I believe he said that, “This administration’s CAFE standards will save lives. It takes into broader considerations than just climate change,” and I’d just be interested in your reaction to that.
Becerra: I don’t know if I can walk you through the logic of that statement other than to say that by allowing cars to burn more dirty or dirtier that people will buy more of them because they’ll replace some of their older vehicles and that these dirtier vehicles will be heavier and so that if you’re in an accident you’re in a heavier vehicle so chances are you’ll survive an accident a little bit better; it just flies in the face of the evidence that shows that today automakers are selling more vehicles than they ever have, and they are cleaner and lighter than they’ve ever been, and they get more gas mileage. A Ford F-150, which is the most popular vehicle in America, today gets more gas mileage than a Ford Taurus of just a few years ago.
And so for the administration to say that they can just put a halt to our progress on the environment and not require that we continue to make progress in reducing emissions is crazy because it goes against their own mandate to continue to use existing science and capabilities, technical capabilities, to continue to improve the conditions of our environment and the health of the American people.
Dennis: California is already experiencing financial damages that both its state leaders, including yourself, and scientists say are driven at least in part by climate change, and I think the number-one example of late are the wild fires that have devastated your state. As attorney general, to what extent do you consider the federal government or the fossil-fuel industries to have some liability or responsibility for this climate change? And is there a plan to sue on that? What would be the legal basis for something like that? I know this has been something that’s been out there in the legal world.
Becerra: There has to be a partnership not just between the state and federal government but between the state and its residents. Everyone has to put their share of work in to make sure that we’re addressing these issues. In California we have standards that require individuals who live in areas where there’s lots of brush to clean brush in and around their property to do what they can to avoid these wildfires which we know are going to occur, but the extremes that we’re seeing now are what’s different. I could be wrong, but I think about a year ago today, if we were sitting here, we would be talking out about these unprecedented wildfires that kill—you know this camp fire killed more people than any other fire in our nation’s history. At one point it was burning so quickly that it was consuming essentially a football field a second, and that’s just dramatic stuff, but a year ago we were probably talking about mudslides, dramatic, consequential mudslides that were occurring because of unprecedented levels of rain.
And so the extremes that we’re experiencing not just in California—hurricanes, tornadoes everywhere else—it’s clear something is going on, and to simply close your eyes to it when you have laws that require you to take this on is what we can’t tolerate because in California we’re not interested in going back to those days when most of your kids in LA Basin couldn’t go out and play during summer because of the heavy-smog alerts that would come out that said it’s too dangerous to send your kids outside.
Dennis: But do you, as an attorney general, face pressure to hold someone or some industry or some government entity in part accountable for the changes that California sees, as there’re other states that are doing the same?
Becerra: That’s my responsibility. My job is to protect the people, the values, and the resources of California, and so if I find someone is getting in the way of our being able to move forward, we’ll take whatever action we need to, including going to court.
Dennis: I think this session is titled something along the lines of “The Resistance to the Trump Agenda,” and so we’ve talked about what you’ve done to this point, and I’m curious. When the energy and environment is concerned, what does that resistance look like going forward? What do you envision among the most important fights you have to come, I mean, in the remainder of at least this term of President Trump’s tenure?
Becerra: So again, Brady, California is going to move forward. We’re not interested in backsliding, and we’ve seen the success that’s come from doing these investments. It has not been cheap. California has more expensive gasoline than any other part of the nation. We have lots of requirements for our industry and businesses to be able to stay in the state. I’ve mentioned how we require residents to do cleanup if they live in areas that have lots of brush. We do a lot of things that require your participation, but we see what we get as a result. We’re going to be about 30 degrees warmer than you are here, and that’s going to be a cold day for some folks in California, and so we enjoy what we have, and we’re willing to not only pay for it but work towards it, and so I don’t see what we’re doing as resisting. We’re just not willing to wait for the caboose to catch up, and we’re not interested in having someone get in our way, and so it’s not that we’re trying to poke fingers; it’s just that we’ve decided that we found the secret sauce.
We create more jobs than any other state in the nation. We graduate more people from college than any other state in the nation. As I said, we’re number one in clean energy; we’re number one in manufacturing; we’re number one in technology; we’re number one in agriculture; we’re number one in tourism; we’re number one in entertainment. Why should we change? We’re going to do what has made us successful because we’ve got a whole bunch of jobs to create for the kids of those 40 million people who live in California. We figured out how to do it and succeed and prosper at the same time, and so it’s not a matter of resisting; it’s a matter of doing what we’re doing, and so long as we’re doing it according to the law, don’t get in our way.
Dennis: President Trump and a few moments ago Administrator Wheeler has spoken often about wanting clean air and wanting clean water, so aside from climate change, which we’ve talked about, you know, the EPA has said it’s refocusing on speeding up cleanup at Superfund sites; it’s said it’s going to take some action on lead in water around the country, other core pollution issues like that. I’m curious how you rate this administration’s track record on environmental justice. It’s no secret that the poorest and most vulnerable people are those that generally suffer the most from pollution, and I just wonder on that issue if you’ve followed that closely.
Becerra: Look, as I said, whether it’s you’re in school and you have to do your homework or now when you’ve got charge of a very important agency, you’ve got to be able to pass the test, and it’s frustrating when someone tries to take credit for things that are occurring because they just happen to be sitting in the seat of that agency. But for their intransigents and their backsliding can you imagine how much more we would have gotten done? And so the fact that they’ve been forced by court rulings to do some of this work to continue to protect the environment, they don’t deserve credit for that, and I hope what they’ll do is they’ll see the light, and I’m hoping that this new Congress will keep them to their task a bit more. Finally, we’re going to have some check and balance and some oversight, I hope, and maybe that’ll get them to work a little faster.
We had to sue the EPA under then-Administrator Pruitt simply to get information that’s available to anyone in this room under the Freedom of Information Act. They would not respond to a Freedom of Information Act from us to make sure—we were trying to check to find out if Administrator Pruitt was divorcing himself from decisions as the EPA administrator that would show a conflict with the work that he had done previous to taking the position as the EPA administrator. We couldn’t get them to reveal the documents for the longest. We had to go to court, and we won, but that’s how much foot-dragging there has been, and so for them to take credit for environmental protection at the EPA, as I said, it’s—we’ll get past this.
Dennis: Just a quick question on executive authority. You mentioned Administrator Pruitt and his work in Oklahoma. A lot of those lawsuits, which he filed with other states, basically argued that the Obama administration had overstepped its legal authority, and that succeeded in some cases. I’m wondering whether you think that was a mistake in some cases, that the Obama administration stretched the legal authority it had because perhaps Congress wouldn’t act. And, second, do you see the same happening under the Trump administration given the circumstances on Capitol Hill? And is that an asset for you as you challenge these rollbacks?
Becerra: So a really quick story because I know we’re almost out of time. When my daughter was playing little league baseball, I had a friend, a neighbor, Danny House . He would always tell his daughter Vanessa , “Vanessa, when you get to the plate”—this is when they’re small and the kids are barely beginning to pitch, so the pitches are all over the place and it’s tough to get a good pitch to hit. But he’d always tell his daughter Vanessa, “Vanessa, when you get up there you be a hitter. Don’t just wait until you get four balls and you get to walk to first base. You be a hitter.” And so I started to tell my daughter Natalia, “Natalia, you be a hitter.”
California is going to be a hitter. EPA should be a hitter when it comes to saving the environment. It is not a time for us to sort of wait and spectate and hope things get better. Consequences of climate change are now upon us, and I think it’s incumbent upon this administration to get its act together and start working on these things and being a hitter as well. This little going to first base after four balls is not going to work when it comes to climate change. We need folks who are going to try to hit for the fences, and so we’re going to do that, and if they’re not willing to do it and by law they should be, we’re going to be out there saying to the judges, “Somebody has got to be a hitter.” We have no time to waste on this, and every year that goes by that we’ve got an administration that denies that things are happening and tries to come up with alternative facts, we’re just going to get up there and be hitters because it’s not just good for 40 million Californians, it’s good for the entire planet.
Dennis: As we wind down here, I want to switch gears just a little bit. You served, I think, 12 terms in Congress, and you were a top Democrat in the House. You worked very closely with Nancy Pelosi. I think that perhaps by the end of the day today she could be chosen as the next Speaker of the House.
Becerra: You have any doubt? [LAUGHTER]
Dennis: I’ll stick to the environment. I don’t cover politics. [LAUGHTER] This will be my one political question of the year. But that her securing that position didn’t come with a lot of tension within the party about its future, who is best fit to lead, which direction it should go. I’d be interested in your reaction, if you think this is the right choice?
Becerra: So this is the beauty of our democracy, is that it’s resilient to a degree, and our institutions can withstand a lot of punishment as we have seen for these last two years. At the end of the day, as Joe Biden I remember would always say, “Don’t compare me to the almighty; compare me to the alternative.” [LAUGHTER] There’s no alternative to Nancy Pelosi that has stepped forward, but even if there were, I have no doubt that Nancy Pelosi would be the next speaker. Why? Because she’s earned it.
There is no one who has done the work the way Nancy has, and she’s going to win because she’s earned it, not because folks are afraid to come forward or anything else. She’s just darn good. She’s going to go down in history as perhaps the best if not one of the best speakers this country has ever seen in the House of Representatives. I say that not just because I’m an observer; I say that because I had a chance to watch her in action. The Affordable Care Act is in place mostly because of Nancy Pelosi, not someone else. There are a number of things. We did actually energy policy in the House. The Senate couldn’t do it. Nancy Pelosi is going to be tenacious, and we need right now someone who is tenacious to lead in the House so we finally see a check and balance against this executive.
Dennis: And how do you think she’ll work with President Trump or against President Trump, whatever the case may be?
Becerra: I could just tell the president get ready because she’s very good. She’s just very—[LAUGHTER] bless them . [LAUGHTER]
Dennis: Seems like a good place to leave it. Unfortunately, that’s all the time we have. Thank you, Attorney General Becerra.
Becerra: Thank you.
Dennis: We’ll now move on to the next portion of the program.
Exelon and Pepco: Powering a Cleaner and Brighter Future
Tierney: I’m Sue Tierney, and I jumped the gun getting on stage just now [LAUGHS].
F: I tried to follow you.
Tierney: As I say, I’m Sue Tierney. I work at Analysis Group in Denver, and it’s my great honor to introduce and participate on a panel today with three senior executives from Exelon Corporation. I’m going to introduce them, and then we’re going to talk about clean energy and reducing carbon emissions from the energy sector.
So, first is Anne Pramaggiore. Anne is the senior executive vice president and CEO of Exelon Utilities, which is the portion of the company that has responsibility for all of Exelon’s local distribution companies in places like Philadelphia, Chicago, and Washington, D.C., among many other places.
Second is Kathleen Barrón. Kathleen is exec senior vice president for government and regulatory affairs and public policy at Exelon. Kathleen is heavily involved in public policy matters for the various Exelon companies and spends a lot of time on wholesale electricity markets.
And then finally, last but not least is Melissa Lavinson. She is senior vice president for governmental and external affairs here at Pepco Holdings, a subsidiary company of Exelon. Melissa works on local issues for the various Pepco companies here in the mid-Atlantic area.
And with that, let me start with a first question, and this one goes to Anne. The first question is, as you think about what states like California and local governments are doing to advance the ball on addressing climate change, what’s the role of the electric utility in that process?
Pramaggiore: Well, Sue, I believe that we have to start thinking about the electric utility industry as being indispensable for delivering the climate change solutions. We heard a lot this morning about the impacts of climate change, the complexity and the vexing nature of that problem. And when I think about the solution sets, they don’t look like a linear equation to me; they look more like a scatterplot in need of an organizing function. And I think the organizing force is going to be policy, but I think the electric utility industry can be the connective tissue that brings that together.
And when we think about the grid as a physical asset—28% of greenhouse emissions come out of the power industry, another 28% are attributable to the transportation sector. If you convert the grid to a clean-power grid and you convert the transportation sector to electric, you go a long way to solving much of the greenhouse gas emission problems.
On the service side, if you think of the utility industry, the utility as a platform, we are the original platform business. You offer services to multitudes of customers and consumers in our country. Around energy efficiency, we’re one of the biggest purveyors of energy efficiency services in the country, at almost $8 million—or $8 billion, excuse me, across the U.S.
You can start to think about the grid as sort of an eBay of connecting energy solutions, innovators, and providers with large groups of customers and really, you know, make headway that way. And finally, I think when you think about putting policy in place that starts to get at these climate change solutions, the utility industry has always been a great balancer, a great equalizer, ensuring that the benefits are equitably distributed and the costs are fairly allocated. And so I think that we’re indispensable, I think we’re central, I think we’re connective tissue.
Tierney: It’s a pretty interesting time to be in this business, for sure.
Pramaggiore: It’s a great time to be in this business.
Tierney: Kathleen, I know that you are a student of politics as well as policy, and some would say that the midterm elections that we’ve just seen threw some potholes in the road with regard to addressing and advocating for lowering carbon emissions. But I know you and I suspect you may be an optimist on this issue, so do you want to talk about that?
Barrón: I think you’re right, Sue. And I have to say, after many years of working on behalf of our company with the environmental community and other utilities, I have never been more optimistic than I am right now. That we are about to find a way to solve this climate challenge.
We talk a lot about the scenarios and what the future looks like if we don’t, but we need to continue to focus on what the policy solutions are. And we think we have a role to play. Our fleet of power plants is the least carbon-intensive of any fleet in the U.S. We offer energy management solutions under our competitive business, through Constellation . And then, Anne and Melissa’s businesses, of course, delivering clean energy solutions to 10 million utility customers across the mid-Atlantic and the Midwest. We have a vested interest in this issue because we have the impacts that we expect to experiences across our infrastructure and what sea level rise and these storms mean to our business. And we also have customers who are saying we need a solution here.
So, turning to the election, I think there were many, many bright spots across the different races that played out. I think we had seven governors who ran on 100% clean energy who won. In Arizona, for example, we had a ballot initiative that focused on a technology solution rather than on a reducing-emissions solution. And you know, in that debate, it was clear to voters that focusing on technology would sort of be more expensive and lead to a doubling of their bills in that case, versus a solution that would use all sources of clean energy to try to drive to the kinds of reductions that we need to get to.
We had a carbon tax initiative in Washington State that didn’t pass; it came closer than it had. But it’s hard to do a carbon tax on a state level. It’s really something that when we have interstate electricity grids, as we have in this country, we should try to look to a regional or a national solution. And that’s why we’re supporting the sort of Republican elder so-called Baker-Shultz Climate Leadership Council carbon dividends plan just yesterday. There was a bipartisan carbon tax and dividend proposal introduced in the House—first time in a long, long time that something like that has been in play. And the model there, where it’s across the whole economy, all the revenues from the tax go back to customers—that’s the kind of solution and innovation and policy that I think we’re going to start to see more and more.
And in the meantime, we do expect to see a continued action at the state level as we’ve had. We’ve been involved in bills in New Jersey and New York and Illinois, where the goal to decarbonize the electricity sector has sort of caught on, and the solutions and doing them in a way that is respectful of what customers can actually afford to pay, has created a winning coalition where we’ve been able to make some progress, and I expect that to continue.
Tierney: Terrific. Melissa, I know you spend a lot of time looking at and working with people who are addressing climate change issues and lowering carbon emissions from the power sector. Could you talk about the things that you see going on in the local level?
Lavinson: Sure. And it’s actually a really exciting time to work at the state and local level right now, because really we’ve seen our states and localities over the past decade, but even more so, I think, in the past several years, really step up and be the leaders in the fight against climate change. So being able to work with state and local leaders to advance policies that really make a difference is really exciting, and I’m really privileged to do it.
And I think if you look at the states in which we’re operating—New Jersey, as Kathleen mentioned, passed a really bold and comprehensive bill earlier this year. The district just took steps yesterday to pass a bold and comprehensive bill. We have activity going on at the regulatory level, in Delaware and in Maryland, to really advance the new energy economy and to really decarbonize electricity. And all of that is just super exciting from a policy perspective, and it’s super exciting as a utility. Because, as Anne said, you know, we really do create that connectivity. And we can really enable that future for our customers, we can enable that future for our communities, and we can really enable that decarbonization that we really need to achieve over the long term to really combat climate change. So, I’m excited and I’m optimistic, as well.
Tierney: That’s great. So, I’m going to ask you to talk about a favorite topic of mine, which is electric vehicles, and what the utility industry can do to play a role in working with setting up a charging infrastructure and other things. Do you want to give us your thoughts?
Pramaggiore: It’s a favorite topic of ours, as well. Yes, we’re very involved in that across our utilities. We have proposals in various jurisdictions right here in D.C. and Baltimore and in Pennsylvania, to support our investment in charging infrastructure, public infrastructure, also home infrastructure, as well. We’ve put together some innovation funds to start to explore public transportation infrastructure. There’s a piece of legislation in New Jersey that is also quite comprehensive around transportation, electrification of the transportation sector, looking at private state-owned fleets and public infrastructure, and putting conversion time tables in place.
Out in Chicago, we are actually partnering with a small electric vehicle company to offer first-mile/last-mile kind of service, ride-sharing service, in one of the neighborhoods in Chicago. And we’re working in Philadelphia and Baltimore to actually electrify the ports there, the forklifts and the cranes. So a lot of activity around electrification going on. Starting point, small scale at this point, but I think we’re going to see the momentum move pretty quickly on that.
Tierney: Thanks. Kathleen, you mentioned a minute ago that there were a lot of voters who took an initiative and elected some pretty clean-energy-economy governors. What does it take, do you think, to get voters actually educated and up the scale further on addressing climate change?
Barrón: Well, I think that’s really the key. I mean, we talked a moment ago about the policy solutions. But we have to be transparent about what the options are and what they’re going to cost for customers. And so we’ve been working internally on a scenario analysis to look at, if you take the IPCC goal of no more than two-degree global average temperature rise, you got to take 80% of emissions out by 2050. And how is that actually going to work? And what are the different pathways that we could use to get there? And so just focusing on the electricity sector, we know that if we stay on the trajectory we’re on, we are going to exhaust our carbon budget in the U.S. by 2034—way before we get to 2050.
And so we have to focus on the severity of the cuts that we’re going to need to make in that sector so that we can us the electricity sector to decarbonize transportation in industrial uses. So doing those types of analyses and being clear about what the options are and what they’re going to cost is something we’re doing internally, not just on the supply side but also, as I said before, on the infrastructure side. What is this going to mean to customers if we have to keep rebuilding the system over and over again with these severe storms?
So, I think companies have a role to play in the education process, and I think many companies are already doing it. I mean, we had a very interesting report released by Google recently, which is, as many of you know, sort of the world’s largest renewable purchaser. Companies have a big role to play in making those procurement decisions, and Google did an evaluation of their renewable purchase decisions and tried to match that up to, you know, to the extent that they add up all the energy they’re going to use and they buy renewable credits to match up to that amount of energy, you know, do those things actually connect to each other? And what they found is it depends on where the data center is.
A data center in Finland—just a quick example—can match up to its actual consumption about 97% of the time, using carbon-free electricity. A data center in North Carolina was about 67%. Just because the fluctuations of those renewable-only purchases do not match up to the needs of the data center, and those needs are filled in by fossil because that’s the way the grid in North Carolina looks relative to the grid in Finland. So they’ve set a different goal. They said, “We want every single hour of consumption to be carbon-free,” and so they’ve revamped their purchasing to make sure they’re taking advantage of all the clean energy sources that are available. Because the reality is, we’re going to need them, and we’re going to need a whole bunch of new ones.
And so we have to find those sources of innovation and new sources of carbon-free power so that we can achieve the kind of cuts that we’re going to need to achieve, and do so in a way that’s fair to our customers.
Tierney: Thanks. In our remaining two minutes, Melissa, why don’t you try to connect the dots between some of these infrastructure investments, including local transportation, that would be switching from fossil fuel to electricity or other clean energy? You want to tell us what’s been happening here?
Lavinson: Sure. And I think that’s really important, that connection between you decarbonize electricity and when you electrify transportation. We have a real opportunity to really transform mobility in this country, make it more accessible, make it cleaner, and make it more equitable. And I think that’s what we’re seeing these proposals do at the state and local level.
Anne mentioned New Jersey, which again is taking a comprehensive look, and not just at personal vehicles, but transit. The district yesterday, as part of the comprehensive clean energy bill, set really bold goals to transform the transportation sector here in the district, to make it all electric over time. And again, it’s focusing on things like transit so that we can really deliver benefits to all customers, and particularly here in the district and all eight wards. Because if you think about it, if you clean up transportation, not only do you get a carbon benefit but you get a local air quality benefit. And so it’s a real win-win, and we think that we have a really big role to play in helping to enable that future.
Again, we’re not going to be the only player, but we need to get started. And I think we’ve seen that states that utilize the utility infrastructure to get started in this transformation of mobility are the ones that are leading, and we really look forward to partnering with our states and our localities to make sure that they are leaders, and that we can really accelerate this transformation.
Tierney: So, Anne, you get to cap it off. What is the one takeaway that you’d like the members of the audience and the viewing public to hear about where this industry is going? Get your Twitter accounts going . [LAUGHTER]
Pramaggiore: So, what I would say in terms of where we have to go, that technology leads but policy rules. And in any transformation of an economic sector, that case holds throughout.
We have the technology to do all of this, largely. It will take investment to get us there, but we can transform the grid to clean resources. We can transform the grid to accept electric mobility. We can transform the grid to accept electrification of the industrial sector. We can do all that. It will take some time. But the policy must be in place to ensure that that moves along, and also to ensure that social equity is maintained.
One of the things that this industry has done very, very well throughout its hundred-year history is just ensured that there was equitable access to these services, at an affordable price, and we’ve got to ensure that that is maintained. And I think that, again, technology leads but policy rules.
Tierney: Thank you. And it’s now my pleasure to turn this back to The Washington Post. Thank you.
Pramaggiore: Thank you.
The Future of Energy: A Look Across Sectors
Casey: Good morning. I’m Libby Casey, the politics and accountability anchor here at The Washington Post and it’s my pleasure to introduce our next panel. Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association. Welcome.
Hopper: Good morning.
Casey: Hal Quinn, president and CEO of the National Mining Association, and Maria Korsnick, president and CEO of the Nuclear Energy Institute. Welcome to each of you. Thank you so much for being here and I’d like to remind our audience here in the room as well as watching online that you can send questions to us. I’ll get them if you use the hashtag on Twitter #PostLive. So let me start just by asking each of you: how much of a threat do you see climate change is right now, both to society as well as progress, and how can your industry be part of the solution? Abigail?
Hopper: Well, it seems odd that we would even have to question whether climate change is happening. Clearly it is and clearly, there’s an urgency about it. I think that’s what sort of has galvanized folks most recently with these recent reports. There is an urgency and a call to action. I have the pleasure of representing the solar industry and we are a cost-effective, equitable, dependable—the panel before talked about an equitable solution to provide carbon-free electricity. And so I think any answer and any solution to climate change that can happen right now has to include renewable energy and certainly solar energy.
Quinn: Yeah, I think this situation presents a real challenge and an opportunity across all sectors of not only the energy industry but our economy as a whole. So in terms of electricity, I think all sectors can continue to step up. First would be using what they use more efficiently. In the coal sector, we have technologies that we can put out today that will decrease emissions by 21% and with more advanced technologies on the horizon, reduce emissions 30 to 35%, just in terms of combustion and then as we test carbon capture, which I think is really going to have to be part of the technology transformation across many sectors for fossil fuels, but also for industry. Because when you look at the numbers, fuel substitution doesn’t get everybody where they need to be according to the reports we see.
Korsnick: Well, I just don’t think we can get to a climate solution without nuclear power. If you look at the recent reports, whether it’s the IGCC report, nature Conservancy recently came out with a report. The last panel talked about a Google paper that was recently released. Union of Concerned Scientists released a report earlier this month and all of it says, “We absolutely need nuclear power as part of the solution.” Not only is it no release of carbon, but it’s no release of other air pollutant emissions. So nuclear is a wonderful 7-24 , they’re around the clock, carbon-free power source.
Casey: I want to hear your perspective on what’s holding your industry back. Like what can government do? Let’s start there, whether it’s in R&D or whether it’s in subsidies or leveling the playing field. We’ll just go down the row and talk about where government—federal government’s role is.
Hopper: Sure. No, that’s a great question. We are in Washington. The federal government can really help sort of across the board for solar energy. So on the R&D, our government has historically invested in R&D and new technologies and not just the technology, but how all the technologies work together, right? How does the grid operate? And so there’s a real opportunity there, regulatory certainty, right? Providing a clear policy framework that doesn’t change every couple of months or every couple of years is important. A rational trade policy is an important part of what would be really helpful to our industry. We’ve been particularly targeted with tariffs and reliable tax policy. It is important, I think, to have a level playing field to keep the government out of the markets in that way and let different technologies compete. But certainty is incredibly valuable.
Quinn: Well, I think the R&D part is very important in terms of looking at what are the technologies that we need to have. There are technologies that are being demonstrated, have been to scale , but we really to scale them commercially so it takes some time, we need some patience. I think renewables, particularly solar, is an interesting model. The cost decrease, that was all driven by a lot of R&D, a lot of learning by doing so you get a conversion factor. That has been a tremendous increase in terms of converting sunlight into power and that’s what we’re talking about here for a lot of these other technologies is getting more power for the fuel you use. So there’s also a need for some type of offtake agreements and/or production credits and things like that, which we saw in the renewable model.
People want to talk on coal and they talk about fossil fuels, you look at China. China, two-thirds of their coal fleet is ultra-super-critical coal, advanced coal. So they’re really replacing their existing infrastructure with higher efficiency and at least in our segment, I think for fossil fuel, that’s the first step for coal. I think for gas as well. I think you’re going to see gas—combined cycles coming online that are 10% more efficient than the last edition. So those are all steps forward.
Korsnick: Yeah, I think innovation in nuclear is a wonderful area right now. Our national labs have been very engaged and the government encouraging. There’s private sector investment, but adding to that private sector investment, real government investment in R&D. You think of nuclear today, you think of large nuclear plants and the nuclear of tomorrow is smaller and small modular reactions and even smaller than small microreactors and I think it’s really going to change the face of nuclear and the partnership that nuclear can have with renewables and that’s really something to look forward to and it’s not that far away. It’s in the next five to seven years I think we’re going to see some real transformative designs that are able to come out. The government can help in encouraging that innovation and also, in paving the way through regulation and reducing some of the regulation.
Casey: And the Trump administration has called for regulatory certainty, but Abby, you pointed out that that’s not been the case for the renewable sector. What would regulatory certainty look like for you and I’d like to hear from the rest of you what specifically you want to see? Is this part of a long-term national energy bill and that legislation getting passed in this divided Congress in Washington, it would be very difficult? So what can the Trump administration do?
Hopper: Well, I think the Trump administration can do a couple of things. You talked about the transformation of the energy sector. I think one of the things we haven’t talked about is storage and the role that storage has to work with any of our fuel sources to help modulate the grid. And so investing in the R&D part of storage and having tax policy. Investment tax credit for storage is the one really clear thing that Congress can do. The Trump administration can continue to invest in these technologies but it can also let the markets work, right? Let the technologies compete. We are obviously not in favor of some of the proposals that have come out to provide subsidies to existing generators. We’ve pushed back hard on that so that’s one thing they can do is stay out of that area. Trade policy is really important I’m sure to all of our industry. So having a trade policy that incents U.S. business and U.S. investment would be an important thing that they could do.
Casey: I want to get back to trade in a moment but let’s talk about what the Trump administration has tried to do for nuclear, for the coal industry in particular. We saw FERC shoot down some of the Trump administration’s agenda. What do you see the role of FERC right now, especially as we just saw the Trump administration’s latest nominee clear the Senate Energy Committee this past week?
Quinn: Well, it’s an important one and notwithstanding the fact that FERC rejected the earlier proposal forwarded by Secretary Perry. At least one thing they identified is there’s a real problem here, there’s an issue here. The so-called “competitive markets” are not competitive. They are being distorted by out-of-market payments so when the rules of the game were created you didn’t see that much pressure from these out-of-market payments, policies, state policies. So now, I think FERC has to focus on, how do you accommodate what the states want, but at the same time, not distort the marketplace. Because frankly, baseload power, whether it’s nuclear or coal and some gasses are really struggling to recover their marginal cost when they’re dealing with other resources that are coming in both the capacity markets and the energy markets with outside support from the state or in some cases, federal sources.
Casey: Maria, do you want to jump in?
Korsnick: Yeah, I think the Trump administration has done an excellent job starting a conversation around resiliency, around fuel security, and so even though, as you’ve said, FERC shot down that early proposal. I think the fact that that conversation has been started and it has now led to more dialogue and discussion within FERC. Fundamentally we do need market changes to be fair and to credit some of the attributes that, quite frankly, nuclear is bringing to the marketplace and right now, the action is in the states for us. You’ve seen success in New York and Illinois and New Jersey and Connecticut where the states do care about this emission-free generation and they value it and they want to keep it. So we’re either going to end up with a patchwork quilt of solutions that are driven by all of the different state requirements, but a more elegant solution would be a national one.
Casey: And we’ll definitely hit on states—concerns that you have about Bernie McNamee and his advancement potentially to the FERC committee. Does that potentially change the outlook of FERC and the perspective of FERC when it’s weighing proposals, such as the Trump administration’s earlier one?
Hopper: Yeah, I would echo Maria’s welcoming of a conversation about resiliency and reliability. I think that’s important and I certainly would echo your desire to have all of the energy attributes valued and credited and monetized. That is a conversation that I think I can speak for all renewables on that one that we’re happy to have. And so regardless of which nominee it is, what I look to FERC is for an independent body, right? One that is not politicized, one that is not sort of beholden to any specific agenda but really has the underpinnings of reliability, resiliency, and cost-effective wholesale market at heart.
Casey: So let’s talk about trade and trade policy, trade wars, and what they are meaning for each of their industries. Hal, let’s start with you. What are some of the goals you’d like to see in terms of trade and abilities to get product to market?
Quinn: Well, we like the idea if the endgame is, “Let’s get down to minimal or no tariffs.” We like that idea. I think there are some concerns we do have with the U.S.-Mexico-Canadian agreement in terms of investor protections that are not quite there that used to be in those agreements and that’s I think a problem and hopefully, not a precedent for future agreements going forward. The issue with China is serious and driven by a lot of very legitimate concerns. We do have concerns about where this ends, particularly less from the coal side and more for our metals and mineral producers here in the United States. Because it’s just like coal, it’s a global market, but it’s very much effective on the commodity price side, and we have materials going for processing in other countries, including China. So there’s a lot of opportunity for retaliation there.
Casey: How involved do you feel like your interests are being represented? How are you able to come to the table and who are you talking to ?
Quinn: We’ve had discussions with the trade representative’s office and with the White House. They understand our points. I just would say personally, when I look at what’s going on, it’s sort of a page out of the playbook we saw back in the Reagan administration. Back then, it was Japan that was really the target. Now, it’s China. Whether it ends up with a favorable solution for the United States at the end of the day, we’ll have to see but the tools we’re playing with are not unknown and it’s not unprecedented.
Korsnick: Yeah, China’s an important market for the nuclear industry as well. Whereas we’re not building as much new nuclear here in the United States, China is building a lot of new nuclear and so that is an important market for us but we also respect what the Trump administration is doing in terms of the challenges that China poses for us. So we’re working closely with them to figure out what work can continue and what work can’t.
Hopper: So hopefully no one is as deeply steeped in the solar tariffs as I had to be for the last year-and-a-half but there was a—for us, it has not just been a China issue, but a worldwide tariff on any panels and modules coming in from anywhere in the world. And the challenge we have is not with the intent, right, to foster and grow domestic manufacturing. No one would argue with that, but the tool being used to try to the incent that is not working. So we have tariffs on our products that are basically just added costs to consumers and it’s not having the desired effect. So projects are being canceled. Investment isn’t happening and there’s not sufficient domestic manufacturing existing or being created to solve that and so that’s our real challenge is that—because the means are not justifying the ends by any means.
Casey: How are you finding avenues for dialogue in conversation to make sure that the administration and that the incoming Congress sees your perspective on this?
Hopper: One of the most amazing things about solar that people don’t know; there are over 250,000 Americans who are working in solar. We visited the top 100 solar districts. Almost half Democratic, half Republican. So this is an issue that really governors, members of Congress, senators care deeply about because they’re jobs in their district. And so to answer your question, that’s the avenue, right? If you are putting taxes, basically, increased costs on our product, jobs are going to be lost in your district, and that certainly gets the attention. And I think there’s an openness to having a dialogue because we are such an economic force.
Casey: And what are you seeing at the statewide level in terms of investment, looking for the role of renewables, seeing how renewables can be part of the portfolio in a place like, obviously, California.
Casey: Talk to us about some developments on the statewide level.
Hopper: Sure, just a couple of weeks ago, right? With all of the governors that were elected. Not all of the governors, but with the governors that were elected across the country, there were I think seven that ran on clean energy platforms. And so it’s a really ripe opportunity for states to act. I would echo, there’s so much action happening on energy policy at the state level. Consumers want it, customers want it, businesses want it, and so governors and legislatures at the state level are mandating clean—renewable portfolio standards, clean energy standards, and I think that will just continue to grow and not just in places like California and Massachusetts, but places like Illinois and Michigan and Minnesota and Nevada. So it is brought both from consumer demand and from lowering prices.
Casey: Maria, you mentioned a couple of states that are on your radar that you see as taking an initiative and both being welcoming to nuclear, as well as perhaps incentivizing it or allowing for the clean energy portfolio that you’re interested in to come in. So tell us more about what’s happening at the statewide level.
Korsnick: Yeah, so New York passed a zero-emission credit. Illinois likewise had a program similar to that. Connecticut was a little bit different. They just had a clean energy market, if you will, that nuclear was able to bid into. New Jersey recently also passed a zero-emission program. And so again, at the state level, there’s a lot of interest. We would be very interested in changing the conversation from renewable portfolio standards to clean energy standards. Don’t pick a technology, pick the outcome. The outcome is clean energy so what is it that we can do to get to clean energy and sort of go in that direction? And some of these states are, in fact, embracing that. As she mentioned, there was a lot of different action in a variety of states.
As we look forward, we see Pennsylvania and Ohio near term on the radar screen in 2019 for conversations there about some of their nuclear power. But it really does. it comes down to when you close nuclear plants, emissions increase. That’s been proven time and time again and the states care about that and the states care about jobs and nuclear offers a lot of jobs in these states and it’s thousands of jobs and the tax base, and when they have a whole picture, they really appreciate and value the generation that they have and they want to keep it.
Casey: Talk to us about the question of NIMBY, Not In My Backyard, and concerns that residents may have about having nuclear power in their backyard, especially after Fukushima.
Korsnick: Yeah, I’ll tell you, we get the most support for our nuclear plants by people that live right next to the nuclear plants because they’re very familiar with them, they appreciate it, they know people that work there, they appreciate the safety standards, et cetera. I’ve been in the nuclear power industry for over 30 years. I’ve operated a plant, I’ve run a plant, I’ve been a chief nuclear officer in charge of five reactors at three sites. I’m fully invested from the inside, if you will, seeing how these plants operate, how they’re run. The United States brought commercial nuclear power to the world and the United States operates clearly the best in the world. We have excellent standards and you can see in the last 15 years, we’ve operated our plants at a greater than 90% capacity factor. You don’t get that way from being lucky. You get that way from being really, really good and we’re great at it.
Casey: What concerns do you have about not seeing the level of federal investment or statewide investment in making sure that everything from facilities are maintained and kept up in a way that doesn’t take private dollars, but also takes government spending. And also, that the R&D is there to keep advancing and developing the technology to continue to work on safety, to continue to work on advancements.
Korsnick: Well, in terms of the reactors that we have right now, that doesn’t require any kind of government investment. Those are invested in by the companies that own them. I ran a plant that actually went into commission in 1969. It’s a plant in upstate New York and if you were to tour that plant today, I would tell you, it’s like a teenager in terms of how well that it comes across. Those plans have been maintained. We’ve replaced pieces and parts throughout the time and you’d never guess that when you toured that plant that had been in operation since 1969, they’re incredibly well-maintained. In terms of the government involvement and investment, there’s new technology. America has wonderful ideas and we put those ideas to work and I think we have some of the most interesting innovative ideas that are happening here in our national labs and some of the private companies.
But there’s a lot of risks to bring those to market. And so what we really need is the government to be able to invest, sort of build that first model, build that first of a kind, so that everybody can understand it, understand how it works, and then let the commercial process take on from there. That’s an example, a small modular reactor that—looking to build at the Idaho National Labs, as an example, so that you then have people that can have an example and they can see one.
Casey: All right, statewide level, where do you see development and advancement? I think a lot of Americans perceive the coal industry as something that the Trump administration is trying to save and assist. When we see reports out of places like West Virginia, a lot of times, it’s about saving jobs and saving an industry.
Quinn: We’re pleased with what the administration has been doing and looking back at some of what we consider regulatory excess of the past administration, particularly on coal and on its markets. When we saw the tail-off in production in demand, it largely coincides with a series of regulations under the last administration that started kicking in in 2011, ’13, then ’15, and we lost 50,000 or more megawatts of coal capacity. So looking back at some of those policies and saying, “Did they overreach?” Not to totally dismiss them or repeal all of them, but look and reshape them is important to us to bring some stability. I think it’s important to our customers, who are looking at what do they need to invest in terms to keep those power plants running and running more efficiently and cleaner. I think the ACE rule has that in mind, which is, “Let’s look plant-by-plant and get the improvements out of performance and then what are some regulatory impediments to the owners investing more in those plants, such as the New Source Review, which a lot of power plants, both gas and coal have stumbled over the years, and it’s actually stifled investment.
Some of the issues on the markets that we talked about before. With nuclear facing , their answer has been the zero-emissions credit, which is really built in to bring them from cash flow negative to zero or more. It’s really kind of a mild offer renewable energy credit. So if we’re going to talk about state initiatives about—let’s value the attributes, let’s look at some of the attributes fossil brings in terms of—its baseload capacity, its resiliency, its reliability as we saw in 2014. At least in the East, 52% of the incremental power that was needed came from coal. Two years, three years before that during the vortex , it was closer to 90%. So those are things that we’ve got to look at. Taking off the optionality when we look at solutions for whether it’s climate or environment and taking out the energy optionality we have with a balanced portfolio has to be thought through very carefully. Because the diversity of the portfolio with nuclear and coal as main baseload , gas, renewables there as well, it’s estimated to save our consumers $114 billion a year.
Casey: Even as you talk about regulations, though, there’s also just market competitiveness and the cheap price of gas influencing how consumers are going to get their energy.
Quinn: Absolutely. Part of the story, though, is with some of these that went on coal that required heavy capital investments so that required owners to make decisions to retrofit or close. In many cases, they were closed. Certainly, natural gas, the differential in natural gas to coal price differential has probably been cut in half, which makes a difference. But what happens with some of these regulations is your power plants, when you reequip them, they’re less efficient. So you have let net power to sell. So that hurts you in the marketplace as well and then you’re competing with some of the out-of-market payments to other sources.
Casey: We’re about out of time, but I want each of us to leave us with one thing you’d really like to see from this new Congress and this White House working together on that would help your industry. Abigail?
Hopper: I would say an easy thing that this new Congress could do is pass an investment tax credit for storage. I think that would help transform our energy market and I think more broadly, sort of a holistic conversation about the energy source and the energy system of the future. We heard on the last panel about the electrification of our vehicles and sort of what kind of infrastructure is needed for where we’re headed. And rather than a 50-state patchwork approach, I would love to see a national energy policy.
Quinn: We’re going to keep our expectations low for the next Congress and then hopefully, we’ll be pleasantly surprised. So if we have some action, I think it would be on the tax side. We’d look to, “Can we get some tax credits for the investments being made?” That reimbursement operating in maintenance costs in some of these plants with these retrofits that we’ve had to make under the regulations and many of them—even EPA admitted when they proposed them weren’t necessarily due to public health threats. They just threw them in for the ride and that cost us a lot of money. That cost the utilities a lot of money. So something along those lines. The conversation that Maria was talking about. I think it started in FERC but I think it needs a wider audience and Congress might be part of it, which is over the grid, its status in terms of resilience, reliability, the value of diversity, both in terms of those attributes, but also in terms of volatility and the cost overall.
Korsnick: Yeah, I think recognizing the attributes that the different generation sources bring through a clean energy policy.
Casey: All right, thank you so much to all of you and I want to thank our audience for being here today. Also, our audience online. I want to remind you that if you’d like to watch clips from this morning’s discussion, you can go onto our website, WashingtonPostlive.com and also learn about upcoming programs. And thank you so much for being here.
F: Thank you.
F: Thank you.