Mike Levin Asks Energy Sec. Chris Wright About Cost-Benefit Of Different Types Of Energy Generation

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During a House Appropriations Committee hearing earlier this month, Rep. Mike Levin (D-CA) questioned Energy Secretary Chris Wright about cost-benefit analysis of energy generation types.

Transcript

00:00You're recognized to close.

00:01Thank you, Mr. Chairman.

00:02And since everybody's inviting you, Mr. Secretary,

00:04I have to invite you to the great state of California

00:06and to come out and see the San Onofre Nuclear Generating Station.

00:09Look forward to working with you on that.

00:11I wanted to ask about something that my friend from Indiana,

00:16Congressman Mervan, brought up, which is the hydrogen hubs.

00:19And specifically, I wanted to make sure that you had received a bipartisan letter

00:25that we had sent on April the 7th about our hub in California called Arches.

00:32It's a great project to boost energy security.

00:35Obviously, we want to decarbonize things that are, you know, very tough to do,

00:41like steel and shipping and trucking, great American innovation in a more resilient future.

00:48I would love to get any input that you might have.

00:51I know you said that, you know, you're reviewing all these things.

00:55I know you've got a lot of incoming, but we would be very grateful to have a reply

00:59to that bipartisan letter that we sent about a month ago

01:02and just get a sense of, you know, your thoughts on the hubs and specifically on Arches.

01:09Yes, and again, I'm very cautious about giving answers when I don't really have an answer.

01:16You know, I've assembled a team and a process that's not political,

01:21that's not focused on buzzwords.

01:23It's just a business, technology, business, and end market overview of projects.

01:29You know, we want, if we're going to invest a lot of money,

01:31we want something at the other end that's going to go forward,

01:34that's going to have customers and offtakers and move on with it.

01:38You mentioned that the hydrogen hub there particularly focused on decarbonization,

01:42and that's, you know, greenhouse gas emissions in the United States on a per capita basis

01:47are lower than any year since I was born.

01:50So we have had market forces driving decarbonization.

01:54Wealthier countries in general move to less carbon-intensive energy systems,

01:58and I think this is a positive, and I think you'll see a continuation of that trend.

02:03And so things on decarbonization is more about what's the cost?

02:07What's the dollar per avoided ton of CO2-equivalent emission?

02:13And if that dollar per ton is low and market forces, buyers of those products or users of that

02:21will pay that cost to drive that process, that's great.

02:26That's technology at work and customers coming into a marketplace to drive things forward.

02:30So that's basically the criterion.

02:32Is the technology viable?

02:34What does the engineering show?

02:35What does it look like the end cost might be?

02:37Is there a marketplace of people willing to pay that cost?

02:41That's the, you know, we're letting kind of the marketplace of businesses and people

02:46to decide what's viable and not what's viable, not what we like or what we don't like.

02:51It's just sort of an objective business and technological evaluation.

02:55When do you anticipate we might get a reply?

02:57This summer.

02:58This summer.

02:58I wish it was faster.

03:00You know, in the hundred days, you know, one of the things that slowed me down is getting

03:04people, getting qualified business professionals inside of the house and then develop a independent

03:10thing that every project will go through the same thing and we'll get results out.

03:15But that is now rolling.

03:17People are in there.

03:18And so it's, you know, I wish it had been last month.

03:21But to me, it's more important to get sort of the right answers because we've got a limited

03:25amount of resources, right?

03:26We want to get the greatest bang for the buck for every resource, you know, we deploy.

03:31I share your desire to get the greatest bang for the buck.

03:33I guess I want to unpack or understand a little bit about how you evaluate the cost benefit

03:39of different types of electricity generation.

03:42So before you talked about geothermal being something that was intriguing to you.

03:48I don't want to mischaracterize what you said.

03:50But, you know, relatively low cost and high benefit.

03:54We've talked a lot about nuclear.

03:56Of course, nuclear has a very high levelized cost of energy, new nuclear compared to certain

04:00other sources, but also has, you know, significant benefits, too.

04:04We've got to fix the back end of the fuel cycle, as I will repeatedly say.

04:09Yes.

04:09Can you speak to, you know, how you evaluate other sources of electricity?

04:14You know, we talked a bit about solar.

04:16I'd love to get your thoughts on, you know, I want to figure out how we can best work with

04:20you is what I'm trying to say.

04:22Yes.

04:22Yeah.

04:23So, again, great question as were your previous ones.

04:25So there it's, I think the key thing on electricity, electricity is complicated.

04:29So it's more difficult than other things because everything fits into a big complicated system.

04:34And what matters is the system cost.

04:38Like you use the term levelized cost of electricity.

04:41And I have been for years, you know, a virulent critic of that term.

04:46Good to know.

04:47Because it treats electricity as if it's like your gas tank.

04:50You put a little bit in and you take a little bit out and you put a little bit.

04:53It's just not how electricity works.

04:54At every moment in time, you have to balance supply and demand.

04:59So the most critical design for an electricity grid is at peak demand.

05:05You've got to supply electricity at peak demand or people die.

05:08Texas lost over 200 people by not meeting electricity at peak demand.

05:12They died in our country.

05:13Think of how we'd feel with 250 additional murders.

05:17And so on inauguration day here in PJM, 65 million people, 13 states, 4 a.m. was peak demand

05:25for PJM this year.

05:26And at that time, we got 44 percent of the electricity from gas, 22 percent from coal, 22 percent from

05:34nuclear, 6 percent from hydro, 4 percent from oil.

05:38That tells you the grid was very tight, 2 percent from wind and 0 percent from solar.

05:44So when someone tells me solar, you know, when it produces electricity and you divide by all

05:47the costs, it's cheap.

05:49Well, it's it's what what is it doing when the sun is shining and it's giving electricity?

05:54It just means all the other kit has to reduce its output because all that other kit has

05:58to be there at 4 a.m.

06:00on January 21 or in this case, thousands of people would have died, would have frozen to

06:04death.

06:05So to me, it's about the system cost.

06:07I'm I'm over time, but I would like to invite you to California because there may be some

06:11people with a different point of view and it would be good to hear your interactions

06:15with them.

06:16Would you commit to that?

06:17Oh, absolutely.

06:18I love nothing.

06:20I love nothing more to get.

06:21And in fact, I will be in the Bay Area very end of May visiting Slack, Lawrence Livermore

06:29and Lawrence Berkeley Labs.

06:31Yeah.

06:32And I'll be I'll be there for several days.

06:34I'm biased towards Southern California.

06:36So we got to invite you.

06:36I think I'm briefly going to be at the Reagan Library in Southern California as well, like

06:41at the end of that trip to California.

06:43But yes, passionate about this and I love to engage with people that have different

06:47perspectives as me on energy.

06:49That's how I learn.

06:50Appreciate it.

06:51I'll yield back over time.

06:52Thank you, Congressman.

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