Dr. Ernie Moniz - The Switch Interview

- I have a set of adjectives and nouns to describe the energy business. It's a highly capitalized, multi-trillion dollar per year, commodity business, in the sense that when we flip the switch on, we don't see whether it came from a coal plant, or a solar panel. It it a business with incredibly well developed supply chains. It serves every activity in society. It therefor does and always will invite extensive regulation, and very complex politics. That does not start out with a formula for a deft, fast-adapting system. But that's the system we need to innovate within. There is the famous expression with the Saudi oil minister, which I believe has contained in it a lot of wisdom. When he said that the Stone Age did not end for lack of stones, and the oil age will not end for lack of oil. So oil will be here for a long time, particularly because it provides and incomparably convenient transportation fuel, gasoline or diesel. The real problem today, in terms of security, is that we essentially have no choice for our transportation fuel, it's oil. Whereas contrast that to the electricity center, where we have nuclear, coal, gas, wind, solar in the future, geothermal, hydro, and hour by hour choices are made about which fuel is used. In the transportation sector, essentially, you got one. - You got one. - If you have biofuel, if you happen to have electricity with plug-in hybrids eventually, et cetera. Then we have that flexibility, or so-called elasticity. And security is improved, emissions can be improved, if we have clean electricity sources. Well, I think biofuels are certainly going to have a significant place in the transportation market. In most cases we simply have to more away from the fuel food competition. The United States, unfortunately we do have that with using corn. I think that the science and the technology are very, very promising, in terms of using other non-food feed stocks. Technology solution clearly has to be marginal lands, energy biomass that requires little water to produce it, adapted to very, very different regions. It's not gonna be, again, one size fits all. The plants will be very, very different, for different climates. And ultimately, I think the market and the economics are going to determine it. And that's where again, cost reduction, it's as true here in the use of cellulosic mass for biofuels, as it is for solar, as it is for carbon capture and sequestration. Cost, cost, cost. It's a big challenge today, we don't have the batteries at the appropriate cost and weight to compete with the range of our personal auto. On the other hand, we should not ignore the advantages of electrification. First of all, it's a pretty good performance vehicle. It you want torque, get a battery. Secondly, it is clean, in terms of the, quotes, tailpipe emissions. So particularly in cities where range is not important, and pollution can be important, there's an advantage. There's another kind of pollution that we haven't really spoken about very much. Noise. If we could imagine in an urban environment, a significant transformation to electric vehicles, - Oh, yeah. - That would be a different city. - Well, we're sitting here in Cambridge and you can hear the trucks going by. - Right. - You wouldn't, other than the water. - Correct, and then if you really were confident about that, that could change how you design your buildings. Maybe you wouldn't have to have all the windows hermetically sealed, for example. So anyway, I think it'll be a very interesting transition over the next couple of decades, towards a different mix in the vehicle fleet. Well, for the United States, the direct issue, obviously, is oil imports. The issue there is can we reduce our oil dependence substantially. However, I want to caution, that reducing our oil dependence, does not immediately translate into reducing oil imports. The reason we import oil is because we're making economic choices. There is certainly a myth, that somehow if we stopped importing oil, prices would go down, it's quite the contrary. Because nobody is forcing us to buy that oil, it's an economic decision. Now you can say there's a security premium in reducing imports, but I would say the main thing is that we want to maintain something that has happened really quite successfully, which is increase diversity of supply. In the 1970's we did not have diversity of supply. Today, it's remarkable how supply diversity has increased with a global market. The United States is the second largest energy producer in the world. We're third in oil. I think we're second in gas. We're second in coal, we're somewhere there with uranium. And of course we have. - Nuclear. - Lots of renewable, nuclear we have the largest fleet in the world. We are an enormous energy producing country. We are also an enormous energy consuming country, which shows up in our oil imports. We need to somehow find the right mix for us, not one size fits all. - Absolutely. - The stakes are high, we gotta get it right. But we've gotta get it right on the environmental side too. And that's where the clock is ticking, and we don't have time to wait forever to establish our programs. Coal, of course, is a very widely used fuel, particularly for the power sector. With the US, China and India combined, using about 60% of the world's coal. So if we're going forward, particularly with carbon control in the future, we simply have to figure out a way to employ coal. The answer has to be then, for a serious solution, the ability to capture carbon dioxide and sequester it underground. The problem right now is cost. Today, we would probably be adding six, seven, eight cents per kilowatt hour to electricity produced by coal. - And that's on top of what? Just for, in terms of - For a brand new coal plant, a new coal plant that was built, we're probably talking on top of six to seven cents. So let's call it a doubling of the cost at the plant, of the production of electricity. We might or might not be willing to pay that in the United States. But it is very difficult to understand China and India being willing to pay this kind of a premium. Do I believe we could start today, safely injecting millions of tons into an appropriate reservoir? Absolutely. That's a different statement however, to do it for 30, 40, 50 years. And I think those things will just work out as we do it. The other near-term issue is that we really have very little idea as to how to regulate, how to assign liability. The Environmental Protection Agency is in fact working on this. But certainly it cannot be based in my view on the old types of regulatory structures put in place for water injection, for example. - So what does a carbon price mean to the consumer, in terms of their cost of electricity? - Certainly it will never be cheaper to capture and store CO2, than it is to release it to the atmosphere. So the reason we're doing it in fact, is because carbon will have a price and ultimately it has to be cheaper to capture and store it, than to release it and pay a price. If we start really squeezing down on carbon dioxide, over the next few decades, well, that could double, it could eventually triple. And what I believe is. - So, an upward trend? - I think inevitably if we squeeze down on carbon, we squeeze up on the cost, it brings along with it a push towards efficiency, it brings along with it a push towards clean technologies, in a conventional pollution sense. It brings along with it a push towards security. Because after all, the security issues revolve around carbon bearing fuels. Now I think it's very important that any funds associated with that be recycled efficiently to productive uses. - Yeah. - And to address distributional questions, because some, the poor, making it harder. So there's a lot of work to do there. But I think in the end if you take one simple thing, that's the direction that I think that we need to go in. Natural gas clearly has a very, very important role going forward, including in a world in which carbon emissions are restrained, because it has roughly half of the emissions of a coal plant. In fact, when you consider that the efficiency of