The frantic buildout of AI data centers is threatening to overwhelm electric grids, but what if they could be part of the solution? I chat with Jeff Bladen of Verrus, a company designing data centers to be "good grid citizens" from the ground up. We discuss how their novel architecture, combining large-scale batteries with a more efficient internal power network, provides flexibility that helps utilities and allows more compute to be built with less grid impact.

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David Roberts

Greetings, everyone. This is Volts for July 2, 2025, "Can data centers be good grid citizens?" I'm your host, David Roberts. If you have paid attention to the energy news in the last few years, or any news at all, really, you will be familiar with the growing dilemma of data centers. The powers that be have decided that AI is the future and we need an immediate, vast expansion of our computing capacity, so enormous data centers are lining up to connect to grids across the country.

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But data centers are giant power consumers and, at least at the moment, extremely inflexible, which means they impose enormous burdens on the grids to which they are connected. Often, those grids need upgrades, the costs of which generally fall on ordinary ratepayers.

Lots of people are addressing this dilemma from lots of different directions, including new ways to power data centers, new interconnection practices, and special rates for large loads.

One approach is to go after the "inflexible" part. Could data centers be made more flexible so that they can ramp up and down, move on and off the grid as circumstances require? Could they become good grid citizens?

That is what Verrus, a Sidewalk Infrastructure Partners company, is trying to do: develop a flexible data center that can help rather than burden the grid. The company recently partnered with the National Renewable Energy Lab to put a 70MW flexible data center through the paces. You can read the results on NREL's website. Now, Verrus is looking for commercial clients.

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I am excited to talk with Verrus' Head of Energy, Jeff Bladen, about how a flexible data center works, the extent of the flexibility, how much more IT costs, and how these technologies might evolve in the future.

With no further ado, Jeff Bladen, welcome to Volts. Thank you so much for coming.

Jeff Bladen

David, thank you, and it's a pleasure to be here. And I absolutely love the intro, "good grid citizen," it's exactly the way we describe it and certainly in my career dating back to the earliest days designing markets for PJM. It is something that we've been looking for, frankly, across the grid, the ability to have the demand side of the market actually participate and support grid services. It's in some respects the holy grail of the grid for a long time.

David Roberts

This is coming for all large consumers, I think, not just data centers. Eventually, all of industry, I think, is eventually going to face the pressure to be more flexible. But let's, before we jump into the details of the data center you're designing, maybe just say a little bit about, generally speaking, the kinds of pressures and forces facing data centers today. What is the sort of state of play?

Jeff Bladen

It's obviously an extraordinary and transformational time these last two to two and a half years with the emergence of AI and the enormous need to grow our data center capacity to support both training and eventually inference as a key improvement in how the Internet serves all of our day-to-day needs. We're on the precipice of something phenomenal and data centers that really support all of our day-to-day lives are having to grow accordingly. But the strain, as you called out even just in your intro, is real. The power grid hasn't been built out to support anywhere near the growth of the data center capacity that we're talking about.

And it hasn't had to. Mainly because we've had this extraordinary run of gaining efficiency in our electricity consumption over the last 20 years that we've been able to essentially reuse for other growth purposes. There's been plenty of electricity demand growth over the last 20 years, but it's been offset in large part by phenomenal improvements in the efficiency of other parts of our electric economy. Just thinking about lighting as one example, we've all transitioned from incandescent bulbs to LEDs. So, this is a key and extraordinary moment of change for the grid and for the tech world.

David Roberts

I sort of wonder, I mean, right now there's a bunch of data centers jumping on grids anywhere there's room, anywhere there's capacity. They're out looking at the states. But you know, we're seeing more and more sort of grid operators or even legislators in some states kind of saying like, "Whoa, whoa, whoa, hang on, like we need some capacity for ourselves." You know, "The citizens of our state don't necessarily want to take on a bunch more expenses just to accommodate these data centers." So I wonder like, and you know, data centers are now looking around, they're like, "Well, if we can't rely on grids, can we self-generate?"

You know, they're sort of groping for nuclear plants now. They're pretending they're going to build a bunch of nuclear plants really quick. They're like looking around desperately. And I'm sort of just wondering, like, the way things are currently going, are we heading toward a moment where the grid is just going to say "no more"? You know what I mean? Like, is demand for hooking these data centers up going to outstrip the supply of grid available soon? I just wonder if we're coming toward a kind of crisis point.

Jeff Bladen

I think you've hit upon something important, which is to say, it takes a long time to build grid infrastructure, it takes a long time to build power plants, it takes even longer to build high voltage power transmission. But what I think we're finding is that, like in many things, the key to driving innovation is a constraint. And that's actually what we're finding now. And so, the innovation is going to, I think, result in innovation in the way in which we power large customers, but I think even more so, the way in which we more efficiently use our grid.

You know, I like to tell folks that the challenge in front of us isn't how fast we can build the grid — of course, that will be important. But moreover, how are we going to get more out of the grid we have while we're building the grid we need?

David Roberts

People do not appreciate the extent of capacity, slack capacity on the grid today. I think people do not understand just because it's not intuitive. Like, if it's slack capacity, why would we not use it? But it's like, you know, it's like thinking about the auto fleet, kind of the same thing, right? Like, it looks like cars are driving around all the time, but most cars are sitting most of the time.

Jeff Bladen

Indeed, we build our grid to serve everybody's needs at all times. And that means when everybody's using power at the same time, we have to be prepared to meet that need and we have to be prepared to meet it with some room for error. Power plants do go down unexpectedly at times, and so that room for error only adds to the available capacity that's not used nearly as much as it could be. It applies to the transmission network as well. And so, that's really a big chunk of what is driving the Verrus data center business forward.

And you know, in my 25 plus year career in the power industry, the opportunity to be part of this team and to deliver what we're going to be delivering soon is extraordinary. It really is the opportunity to extract far more efficiency out of the grid. But not just the grid. To start with, this new design for data centers actually extracts quite a bit of efficiency out of the data center itself in new and innovative ways.

David Roberts

Right. So, yeah, this, I mean, this is the logic for demand-side stuff in general. Basically, we build the grid to satisfy peaks. So, you can either build more grid to satisfy higher and higher peaks, or you can start moving some demand off the peak. That's sort of the flip side of this and that's what's driving this. And we should say, you haven't said, I haven't said yet, but you were the head of energy for Meta for years, so I take it you have some experience like going out and looking for data centers and looking for places to put data centers. Is that sort of what brought all this to your attention?

Jeff Bladen

You know, it's a real great opportunity to be part of the Verrus data center team and certainly appreciated the chance to support a phenomenal team at Meta for a number of years. My career really has spanned the energy business much more than the technology world though. And that's really in many respects why I'm so excited about being able to be part of what we're delivering at Verrus is that from my time at MISO and PJM, it's certainly been apparent that if we could find a way to activate the demand side of the grid, we would be far more efficient and frankly, more reliable too.

David Roberts

Yeah, yeah. And this is the final question before we get into the actual, the nuts and bolts. But I'm just sort of curious. You've been in the energy side now and a little bit a glimpse into the tech side. One of the things that's on the mind of a lot of energy people as all of this is happening is: Do the people inside these tech companies understand tech? Do they understand the grid and how the grid works and grid constraints, et cetera, in the way that someone like you does, having been in the trenches of MISO, et cetera? What's the level of sort of savvy about the grid in that world?

Jeff Bladen

It's a very well-informed set of organizations. They have deep expertise that they've built on their energy teams. I supported a phenomenal energy team at Meta with lots of folks that came out of the grid world, out of the utility world. They understand the challenges and frankly, it's why they're investing in new ways of approaching these challenges. It's also why they've been investing in clean energy solutions. You're seeing lots of announcements about large technology companies investing in the grid, and I applaud that. What Verrus has the opportunity to do is to really start with a white sheet of paper design that allows us to unlock even more innovation.

And that's really a unique opportunity for a new entrant. It's usually something that comes from new entrants too, frankly.

David Roberts

Yeah, I sort of joke with people. Having been doing this for a long time now, I regularly these days have the experience of just thinking in my head like, "XYZ is a need out there right now. I want someone to come along to my pod and talk to me about it." And it manifests like within days I get an email about it. One of those things is data center flexibility. It's been on my mind a long time. People have been assuming the inflexibility of data centers as they think about this problem. And I have been thinking like, "Why are we assuming that? Why is that a fact of life?"

And so, along you guys come. So very exciting. Let's talk about the data center then. There's not a lot of public information about what you're doing, but I've got this sentence, it's got "a novel grid-aware power flow management system with long-duration battery energy storage systems into a microgrid controlled medium voltage power distribution architecture." So, that is a mouthful. That's three mouthfuls. And I want to talk about all of them in turn. So, as you say, this is a fresh sheet of, you're building a data center out of nothing and you're building it to be flexible.

So, let's start with that first piece, "a novel grid-aware power flow management system." What does that mean?

Jeff Bladen

Well, let me start at the highest level to describe what we're doing. So first and foremost, we are building new data centers. This is not a retrofit to existing data centers. That's important. And, we are going to be building, owning, and operating them ourselves. So we are a service provider to large technology companies. At the most basic level, you can think about us as an outsourced data center capacity solution for big tech companies. They will pay us to lease buildings on our data center campuses. And it's actually a pretty common solution used by tech companies historically as a complement to their self-build sites.

David Roberts

So there are a lot of these third-party owned data centers out there now?

Jeff Bladen

There are, there are, but they generally resemble the self-builds that have historically been put in place by the large technology companies. And the reason for that is, and you alluded to this in one of your descriptions, our grid hasn't really been at a place where we needed to have large customers be as flexible as we're talking about now. And that's because we've had all of this excess capacity that I was describing earlier has come about from a whole bunch of efficiency. So yeah, there are a whole bunch of third-party data center companies out there.

We are stepping into a very well-understood, very well-established business model, but with a new and differentiated product. And so, let me get at what you were asking, which is what is all this jargon and how does it actually, like, work? So, what differentiates us is first, our new design will allow us to unlock maybe as much as 30% more compute capacity inside of a data center campus versus our competitors. And that comes from this medium voltage electrical distribution network that's alluded to in the words you were reading and essentially allows us to move power around more seamlessly within a data center campus. A bit more like a microgrid might.

David Roberts

What are the other ones doing? How else would you run? I mean, you have to distribute power to the servers, to the racks. Something is distributing power. Is this just sort of like sticking in some AI so it's smarter?

Jeff Bladen

No, it's actually more straightforward, and it obviously does have some proprietary elements to it that we have to be careful about. But at its most basic, the way traditional data centers work is that you have a high voltage substation with a utility feed or a couple of utility feeds usually. And that high voltage substation then has low voltage feeds to each of the data halls. And those low voltage feeds are a fairly straightforward and simplistic circuit, much like if you really wanted to boil it down, much like you would find in your basement or garage, which has a bunch of circuit breakers, right?

So, each of those circuits goes back to the high voltage substation. What that means, though, is that within a large data center campus, if one circuit is down, maybe it's down for maintenance, maybe you're replacing servers and upgrading them — there's all kinds of reasons why a circuit might be down. The power on that circuit is essentially unused. It's stranded, in a sense. And so, what we're doing is we're designing a new kind of data center that allows for underutilized power, underused power in certain parts of the data center, to essentially be taken up and used in other parts of the data center.

So, I like to describe it as it's essentially like getting four buildings for the price of three, for our customers. It's a huge benefit.

David Roberts

Is there significance in it being medium voltage rather than low voltage?

Jeff Bladen

It is in the sense that it allows us to efficiently distribute the power to anywhere on the data center campus, to any of the buildings or data halls. Again, very much more like a microgrid would.

David Roberts

Got it. So, you've got power coming into your microgrid and it's controlled and distributed better than traditional?

Jeff Bladen

Better and more efficiently. And so, in super simple terms, our customers will be able to put more servers, AI or traditional cloud servers, in the data center. And then, anytime some part of the data center is using less — which is pretty much all the time, because they're such big campuses with lots of things going on — the power doesn't end up being stranded in the underutilized part of the network.

David Roberts

So, you're making full use of all the power that's coming in, at all times?

Jeff Bladen

Absolutely. That's exactly right. It's also a good thing from the utility standpoint because that actually improves the efficiency of the interconnection. We're getting more use out of the actual interconnect itself.

David Roberts

Right. Okay. And that's different than the power flow management system, or is that both the same thing? You've got "medium voltage power distribution architecture," and "grid aware power flow management system." Are those both referring to the same thing?

Jeff Bladen

They are, in a sense, but there's more to it. So, the second big innovation is that we're also installing utility-scale battery energy storage on our campuses. And what that allows us to do is to first and foremost provide campus-wide backup. So, if there were a disruption in the utility supply of electricity, we have these large batteries available to immediately take up and supply power to the servers on the campus.

David Roberts

Let me ask about this. So, take your 70MW data center that you built for NREL, grid power goes out, you shift to batteries. Like, what is the size of these battery installations? How long can you run your 70MW data center on pure battery power?

Jeff Bladen

On pure battery power, it's about four hours. Although, it depends quite a lot on what's going on at the data center campus. It's probably a bit longer than that.

David Roberts

So, short term outages, basically, you can cover.

Jeff Bladen

It is. But it's important to note that the design that I described earlier, this medium voltage distribution network, actually gives us a huge amount of flexibility to plug any kind of backup technology in and essentially plug it in anywhere on the campus into this network, and then it can supply energy to anywhere else on the campus using that same network. So, we have quite a bit of flexibility in terms of the type of backup we provide. It could be batteries. It could be battery plus some thermal type of generation if the customer needed some longer duration supply.

David Roberts

Yes, I was going to ask about that in a minute. But just on the batteries, this is something else when I encountered it. This is something you come to learn if you study grids long enough; it's just that batteries are magic, they're helpful in all ways everywhere. Like there's scarcely a grid problem you can think of that you could not help solve by just throwing a bunch of batteries at it. So, why aren't data centers already installing big battery banks? That seems like the no-brainer-est of no-brainers for data centers.

It gives them a little bit of flexibility. It vouchsafes their reliability; it just helps in every way. Why are they not doing this? Are they?

Jeff Bladen

I certainly don't want to speak for other data center developers. I think there are probably some that are doing some of this. It really does require, to make full use of them, a different approach to the design of the data center. And that's one of the advantages that we're able to bring with the new white sheet of paper design, is that we can integrate batteries and utilize them more seamlessly and across the entire campus in a way that you can't with a retrofit. Back to the prior description of a legacy data center design, with all of these separate low voltage circuits, you really can't move the backup among the circuits.

David Roberts

Oh, so a backup is attached to a particular circuit?

Jeff Bladen

Yes.

David Roberts

So, you would need, theoretically, if you wanted total backup to have battery installations on every circuit?

Jeff Bladen

It's less efficient; you would need to do quite a bit of retrofitting and re-engineering to the point where you're almost essentially creating something brand new. And the other nice thing about batteries as our primary backup source is that they're actually a lot more reliable than the traditional diesel generators. Diesel generators will have a degree of failure to start. It's not that uncommon for a diesel generator to fail to start.

David Roberts

And I've often wondered, what is like the straightforward cost comparison? Because these backup diesel generators are ubiquitous in data centers. And I've just again so puzzled why they're not using batteries instead. Are batteries just more expensive than cheap diesel backup generators? Is that why they keep using those?

Jeff Bladen

I mean, ultimately, what's important isn't the upfront capital cost, although that plays into it. It's about the total cost of ownership over the life of a 30-year asset, which is what these things are, which is what a data center really is. And ultimately, on a total cost of ownership basis, we are very confident that we are cost competitive with all of the alternatives that someone might look at. And so when they come to us —

David Roberts

You mean on a total data center performance level?

Jeff Bladen

For sure. And so, when we talk to our customers about what it would cost to lease space, lease a building, or the like, we're offering essentially at market prices. We're not asking necessarily for a premium today, although we do think we're delivering a premium product. And so, we think there's real advantages.

David Roberts

So, your idea then is you are selling data centers at comparable costs to other data centers, but with these improved reliability and improved flexibility, basically.

Jeff Bladen

Improved reliability, flexibility, and really importantly, dramatically improved efficiency. Like I said earlier, it's a bit like getting four buildings for the price of three.

David Roberts

And that is because of this power distribution system. This ability to move power between circuits enables you to have sort of a full microgrid, kind of a microgrid network, such that you can plug either generation or storage anywhere on that network and have it serve the whole network, basically.

Jeff Bladen

Yeah, absolutely. And I love that we're nerding out on the energy side of this, by the way, because I'm always stuck in this tech world talking about stuff that I'm only marginally qualified to talk about. But when we talk about the energy side of things, I feel so much more comfortable. But yeah, that's absolutely it. We're getting the most out of the power interconnect in a way that most other data centers simply can't, just because of the physical infrastructure design.

David Roberts

What is the sort of limit on the size of the battery installation? What are the sort of considerations there? Like, from a performance perspective, I sort of suspect that it's just like "more is better," period. But like, presumably, there's some limits of like the efficiency you get with an additional bit of storage. Like, what is the sort of limiting principle on the size of the battery installation?

Jeff Bladen

The key focus for how to size the amount of storage that you put on the data center is really trying to get us to the proverbial five nines of reliability from the power supply. What's not well known is that the data centers at this scale that we're talking about are all connected to the highest voltages of the power grid, and at the highest voltages on the power grid, it's actually extraordinarily reliable. I mean, we're talking about four nines of reliability just by being connected to the grid. And so, what we're looking for is to exceed five nines of reliability by having sufficient battery energy storage on site.

There's also an element of this, and I haven't gotten to it yet, but a big part of what we're doing is we're not just serving the compute customers, we're also serving as a partner to utilities. And so, we want to make sure that we're sizing the batteries so that we can meet the needs of utility partners. What kind of flexibility do they need to drive efficiency and reliability on the grid? Four hours tends to be a sweet spot. The NREL demo that you mentioned earlier, we were partnering with both Xcel Energy and MISO in the design of the testing regimen, such that we were making sure that our flexibility was aimed directly at the flexibility needs of an RTO of a utility that happens to run its own control area. And we proved that out during that demo.

David Roberts

So, to figure out the size of the battery installation, you need to sort of triangulate the data center's needs and the grid's needs. So, like for your 70MW data center that you just built for NREL, what is the battery, what's the size of the battery installation there?

Jeff Bladen

In that case, we're talking about four hours of building-scale, battery energy storage backup.

David Roberts

Do you have any idea what that is on a megawatt?

Jeff Bladen

It's 70MW times four hours. So, it's, you know, you can do the math. It's 280MW hours.

David Roberts

Interesting. And so, one thing I'm really curious about is the role of onsite generation here, if any. So, as you describe, you have basically built a microgrid and in a microgrid, you can just plug generation into it anywhere and serve the whole microgrid. And I'm just kind of wondering if we could walk through, like, what are the considerations for a data center owner contemplating whether to add some generation or not. My intuition is that batteries are doing most of what a data center owner would need unless they want to go fully off grid. Is that right?

So like, what are, like, why would a data center add on site generation? Would they? And if so, why would they?

Jeff Bladen

Well, it's a great question that I think is rightly placed to those that have technology compute workloads that they want to back up. I think it will depend heavily on the kinds of workloads that they're backing up. There are certainly some mission-critical workloads that folks may feel like they need more than four hours of backup. But again, when you look at the likelihood of an outage, you do get to five nines of reliability pretty quickly when you add the amount of backup that we're talking about.

David Roberts

And even if you needed more than that, wouldn't you just add more batteries?

Jeff Bladen

Well, you could add more batteries, or it's actually quite easy for our design to just plug in generators later. Right. There's really nothing that stops us other than reserving some space in the campus for future addition of some kind of thermal generation. Whether it's a fuel-based or a gaseous-based thermal generation, there is nothing that prevents us from adding it later. Again, because we have designed —

David Roberts

Why not solar?

Jeff Bladen

Well, you could add solar as well if you had space for it, if it was efficient to add it. It's usually more efficient to do central stations solar that's grid connected, just from the value of the panels themselves and getting the most out of them, putting them in exactly the right locations with the best solar gain grid connected at the right voltages in the right place. It's generally more efficient from a cost standpoint and an output standpoint to have them have solar grid connected than to put it where you happen to build a data center.

David Roberts

So, do you know, in your experience with data centers, is there any reason for one to want to be fully self-sufficient, to be able to run independently of the grid sort of indefinitely? Because that's what you would get from adding a bunch of generation, basically.

Jeff Bladen

You alluded to this in your opening, and I think it's important to note that one of the key reasons that some are considering this island from the grid approach is simply to get power faster. That is certainly in the equation for some, but that's really the beauty of what we're doing here. You know, we've got an efficiency twofer that gives us the ability to extract a lot more capacity from the data center itself and allows us to go into places on the power grid that utilities can't serve right now because they can't meet a peak need or they have a transmission constraint. And so, we're actually solving that problem as well by partnering with utilities to identify where in the grid they could serve a data center like ours most of the time. But because we're able to be offline during the most extreme periods to solve for both peaking generation and some limited transmission constraints, we can actually solve the speed to power challenge as well.

So, that's really what would drive somebody off the grid: speed to power right now.

David Roberts

Mm, well, let's talk about that a little bit because this is all this goes back to this paper — I think I've referenced it on the podcast before, Tyler Norris, the lead author, it's for the Nicholas Institute over at Duke — but basically just showing that it would not take much flexibility to get a lot more data center capacity online. Like minutes a year of flexibility can get substantially more data center capacity online. So maybe just talk about that. Is that paper part of what kind of sparked this for you? It certainly bolsters the case.

Jeff Bladen

Well, you know, the great thing about the Verrus team and the work that Sidewalk Infrastructure Partners has done is that this is two years in the making. So, I know Tyler and I've talked to them. In fact, they asked me to speak at their conference earlier this year about exactly what we're working on and how it lines up with the report that they issued. But the significance of it is real, that there is this untapped potential for the grid if you can reduce demand by significant amounts dozens of hours of the year. I don't think it's minutes.

It's certainly not a single, single-digit number of hours, but it's, you know, a few hundred hours of the year would be extraordinarily impactful. And that's what we're offering utilities and we've had great success at partnering with a number of utilities so far and exploring and even beginning to focus on where we're going to site our first few data centers.

David Roberts

I could be exaggerating.

Well, one other consideration here, and this is kind of what I keep circling back to, is like when you take that paper into account and you take the needs of the grids into account, really, you just need a few hours of storage attached to your data center to get that amount of flexibility to help grids. But there's one other reason you might want to go further, and this is also something I wanted to ask you about. A lot of these companies, including Meta, Amazon, Google, all of them really, are on record with renewable energy commitments, basically with decarbonization commitments. Lots of those decarbonization commitments were made before all this kicked off really in earnest, before the AI thing kicked off in earnest, before the load growth thing kicked off in earnest, before the new restrictions around grid and energy availability kicked in.

So, one of the things that is on the minds of people like me is just how well are those decarbonization commitments going to hold up in this frantic scrum for power? And so, it seems to me that one of the things that your data center enables is, if the grid cannot provide you clean enough power to satisfy your commitments, you can put some clean power on site and meet those commitments. Is that even a consideration here? How deep are those commitments? How firm are those commitments? Are people really going to make multimillion-dollar CapEx decisions on the basis of those commitments?

Jeff Bladen

Candidly, they have. And so, I think the proof is in what we've seen. Just even recently, Meta made their announcement that they're helping Constellation keep a nuclear power plant online. So, that's exciting news to see. What I think is important to circle back to though, is that the cleanest megawatt is the one we don't use.

David Roberts

Of course.

Jeff Bladen

And it's also important to recognize that, not only are we getting more efficient with this approach to data center design, but the fact that we can build, in theory, fewer data centers with a much more efficient approach like we're taking at, actually dramatically reduces the carbon impact of the data centers themselves. The hidden carbon intensity of data centers and any major construction project, frankly, is the Scope 3 emissions. All the emissions that go into the concrete, that go into the steel that's used, all of those things take energy and take carbon-intense energy in some cases to produce and so, as I said earlier, if we're getting four data halls worth of servers in three, that means one data hall didn't need to get built.

Maybe a whole data center at some point doesn't get built. And so, that allows for a far more carbon-efficient approach to building data centers as well.

David Roberts

Yeah, but don't you think, I mean, this came up before when DeepSeek came out, the Chinese AI came out and it's much less energy intensive. And then a lot of people were saying similar things like, "Oh, look, it looks maybe the AI revolution is not going to take all our power." But you know, then the response is just like, "We're not going to take those efficiencies and just bank them. We're going to just plow them into more data centers." In other words, like, the demand is so high here that any possible efficiencies you get are just going to get swept up in greater demand.

I mean, we're still going to be building data centers as fast as we can for the foreseeable future, right? Even if they're 75% more efficient or whatever, don't you think?

Jeff Bladen

All I know is that a more efficient data center is definitely an improvement over the alternative.

David Roberts

Yeah, well, for sure.

Jeff Bladen

And so, I think suggesting that we might consume efficiency as a result is probably missing the point in that regard. I will say that it's also important to remember that because of the constraints, we're seeing this kind of innovation, right? And this innovation actually maybe does come around or doesn't come around as fast, but for the constraints we're seeing. So, I think there's a number of good things that are coming from this, but really what we're trying to focus on is how can we deliver a better product that's much more efficient in terms of the customer need.

Right? It's the customer getting more for the same price. And how can the grid be better off than it was beforehand? I will tell you that having been in control rooms on hard days, having assets like these, and that's really what we're thinking about these new data centers as is these are grid assets, not grid liabilities. Having them at the disposal of control rooms in places like Carmel, Indiana, or Valley Forge, Pennsylvania, or Folsom, California, would be an extraordinary benefit to running the grid more efficiently and more reliably. It really goes without saying, almost.

David Roberts

I want to ask about the grid benefits, but just to make this point before we move on. The point I was trying to make is, if you're a data center, and you want to be running on clean energy, as a lot of these companies say, and you can't find clean energy, this infrastructure, this power distribution infrastructure that you've created, makes it easier to plug clean generation in directly. If you just want to boost the amount of clean electrons you're using, this data center can help you do that too. It's suited to that goal.

Jeff Bladen

It is suited to that goal quite well. And because of the flexibility we have, we can complement that with shifting some of the consumption from a grid that might be carbon-intensive at times to periods that are less carbon-intensive to the extent that that is a desired outcome of the customer. And most of our customers definitely have these goals.

David Roberts

Right. So, you could bank clean wind power at night in your batteries and then run on that during the day, maybe while the grid is dirtier, etc., so that you could even decarbonize a little bit just with the flexibility.

Jeff Bladen

Yeah, that's exactly right. And it doesn't even need to be moved that much. Obviously, there's quite a bit of solar energy being injected into the grid during the day. So, part of this is also giving the grid operators new tools so that they can manage what is an otherwise intermittent fleet and actually capitalize on the low-cost energy that's coming from wind and solar.

David Roberts

I assume you've been talking to utilities in the process of this. I think listeners can understand intuitively why data centers, as currently constituted, are not good grid citizens, you know what I mean? Anything that needs constant, always-on, extremely high amounts of energy throughout, you know, 24 hours a day, is inflexible and difficult for grids. So this gives them some flexibility, gives them tools. One of the things I'm wondering about is, are there ways for grids or grid operators or grid managers to compensate the data centers for this flexibility? And if so, is that part of your sales pitch here?

That in addition to the benefits, you might also get this secondary income stream of sort of flexibility payments? Is that on the radar?

Jeff Bladen

At some point, it may be on the radar. I think for now, we're focused on ensuring that customers get the services that they're looking for out of data centers. And that looks like more efficiency, higher volume of compute workload for the same megawatts of interconnect, faster availability of power. At some point, it may be a world where we're actually working with the utility to develop new forms of compensation for flexibility. But frankly, there are quite a number of flexibility payment structures out there that have compensated thermal plants in particular for their flexibility for many years. So, it's not new in that regard.

I do want to call out one thing that you said though, and just say, "Look, there's nothing about a data center that makes it a bad grid citizen any more than you or I using our smartphones to live our daily lives makes us bad grid citizens." I think what we're talking about is turning what's today purely a consumed service by you, me, or a data center on our behalf into something that actually turns into a service back to the grid, right? That we're taking what is an obligation to serve and essentially turning it on its head and saying, "We're going to serve the utilities as much as they're going to serve us."

David Roberts

Well, I mean, maybe bad grid citizens, not right, but difficult grid citizens. But like, the size that makes them difficult also, if they can be flexible, makes them extremely powerful assets. Do you know what I mean? This is not a small amount of flexibility. This is not like moving my EV charging from day to night. This is like, this is the ability to move, to ramp down or ramp up, you know, 70MW at a time. And that's like, that is a large, just, it's correspondingly, you know, difficult to supply if it's not flexible.

It is a correspondingly powerful asset if it is flexible.

Jeff Bladen

I couldn't agree more.

David Roberts

In other words, it seems like grids should be very excited about this.

Jeff Bladen

And they are. And that is why when we were standing up the demonstration project at the National Renewable Energy Lab, MISO and Xcel were very excited to support the development of the testing regimen such that we could show that what we were doing, what we were creating the capability to deliver, was actually going to be aimed squarely at meeting the needs of big grid operators. And that's what we showed and we're excited to actually bring it into commercial operations.

David Roberts

And the technological difficulty, is it just like shifting — like once you've built this power distribution architecture, I guess it's easy then to shift what is powering a rack of servers at a given moment, like from the grid to the battery without any interruption in service or glitches or whatever. Is that part of the sort of technological challenge here, how to switch back and forth between power sources?

Jeff Bladen

It is, but it's actually simpler in some respects than depending on a diesel generator firing up and hopefully, switchgear switching over.

David Roberts

Yes, this is true. Batteries are more reliable than diesel generators. This is a good lesson to take out of this.

Jeff Bladen

They are, and the kind of switch gear that you implement for our system, the kind of infrastructure that you implement, is actually designed to be used on a regular basis. That's actually one of the reasons why, in addition to environmental constraints from emissions, traditional data centers aren't able to lean on diesel generation to get off the grid at times. It is not only going to violate emissions permits, which theoretically you could relieve if you didn't care about that sort of thing, but moreover, more importantly, at some level, the infrastructure. Infrastructure just isn't designed to be switched on and off on a regular basis. It's designed for what its purpose is, which is to be a backup, hopefully never, but maybe tested once a month at most.

David Roberts

Right? Yeah. I mean, it's true across applications, across the world, really. Anywhere there's a diesel generator, it seems like a battery would work better. But let me ask you a question. This is not something that Verrus is doing or responsible for, but it's something that I feel like you might have some insight on having worked at Meta and dealt with data centers. I'm sort of wondering — this is something I ask all the hyperscaler tech people when I talk to them — how flexible can the compute load itself get? I get a lot of different answers on this.

You know, if you ask this publicly, what they'll tell you is, "No, it's all crucial. It all needs to be up, you know, five nines all the time. All crucial all the time." But if you do sort of ask them in private, they'll say, "Yeah, we can shift stuff around somewhat." Do you have any insight into that, having worked at Meta, how much compute loads themselves can be ramped up and down or moved back and forth or do you know what I mean, add to the flexibility?

Jeff Bladen

Yeah, I'll just couch my answer in the context of what's sort of out there in the public domain. And that is that it is relatively limited, as you alluded to. And the reason it's relatively limited is that it is somewhat technically complex to move workloads that people are being served. In some cases, you might call them services that are discretionary. But one person's discretionary service is another person's crucial service. I'll add that there are certainly plenty of services that are absolutely mission critical. We have crucial government workloads going on in many of the data centers by the hyperscalers.

And so, there is some amount of flexibility, but it is modest and I don't expect that to change very much. And candidly, to suggest that a tech company's workloads ought to be flexible in that regard is kind of like saying, "Why doesn't everybody subscribe to an air conditioning controls program at their home?" Some people do, some people don't. I think at some level it's a question of why do we have a grid, why do we have power supply? And it's because people are getting real economic utility out of the electricity supply. What we want to try and do, I think, is figure out how to be as efficient as we can in using what we've built.

As we're thinking about what else do we need to build to support continued economic growth?

David Roberts

In some sense, this is one of those things where, when I hear about it, I think, "Well, duh, why didn't we do this a long time ago?" You know what I mean? Like, making the power distribution within your data center more like a microgrid, more sort of controllable and networked, and then adding battery backup just seems obvious on some level. I can't believe everybody's not doing it. But like, does this, does the combination of those two things get you as much flexibility as you think you're going to need? Or is there a tech frontier here? Are there next steps along this line, or are these two tools that you've brought to bear enough to get you the flexibility that you're going to need to get all the data centers you need online?

Jeff Bladen

The short answer is, we already have the solution fully engineered and designed, and we're now in the process of heading towards starting construction on our first couple of hyperscale sites.

David Roberts

Do you have customers yet that you can reveal?

Jeff Bladen

I'm not making any announcements today, but we're excited by what the future is holding. I guess I'll leave it with that. But I think it's important to also say that this is not a science experiment. What we're doing is we're taking well-understood technologies and we're integrating them in somewhat novel ways with a little bit of algorithmic IP sprinkled over the top to actually make it all work together very efficiently and effectively, and in particular to be able to respond very quickly to utility and grid operator calls for flexibility, and even to have that call for flexibility be extended down to our customer servers when they have some of their own flexible compute capabilities that you were suggesting maybe we could have more of.

So all of that together turns into a solution that is relatively straightforward, but it still required a couple of years of design and engineering work to get to the place where we could demonstrate it last month at scale and now get ready to start building it.

David Roberts

So, yeah, I think that's a good note, actually. None of this is particularly, no piece of this is particularly cutting edge. You know, microgrids are well understood. Battery backup is well understood. Shifting loads back and forth is relatively well understood. I guess the new thing here is just applying all this to these data centers. So, you know, obviously you would get benefits if we stopped building inflexible data centers and started building flexible ones, and you'd get sort of incremental benefits building up over time. Is there some hard barrier to retrofitting old ones to be more flexible?

Like, does it just not pencil out? Is that a kind of a fixed thing? Is that ever going to change?

Jeff Bladen

You know, it will depend, I think, on individual circumstances. And I think in general, the innovative design we're bringing forward really lends itself to this kind of solution. Whereas, I think legacy designs are fit for the purpose they were built for. And in some ways, it goes back to the analogy you raised earlier, which is to say that we don't actually need every data center to be flexible any more than we need every car on the road to be a rental car that is used 90% of the time. There are lots of reasons why we need some that are flexible, and then I imagine we will continue to have some that are built for a somewhat different purpose.

In any case, we're excited by the innovative approach. And like I said earlier, we've got this twofer efficiency gain and are gaining dramatic efficiencies inside the data center campus and are able to deliver huge efficiency gains by connecting to parts of the grid that are otherwise underutilized.

David Roberts

Does designing them this way affect in any way the sort of appropriate scale of the thing? Like, does it enable you maybe to build smaller data centers? This is another dynamic around data centers that I'm sort of curious about. On the one hand, you get obvious efficiencies of scale. Like, on the one hand, it seems like the trend is bigger and bigger. You know, you got these 100MW, gigawatt data centers being proposed now. But I sort of wondered, like, especially in a data center like this that is flexible, that has backup, that is sort of like a microgrid, you could see a smaller data center running like that, you know, like integrated into towns or cities.

Like, you know, in downtown Seattle, we have a data center where they use the excess heat, the waste heat, to heat two nearby buildings. And I always thought that, like, "How is that not tons better than spending a bunch of money on heat control technology?" So, I guess my question is, does this affect how big data centers are going to be at all, or is it orthogonal to that question?

Jeff Bladen

I think it's more the latter, that the size of the data center is not really driven by this kind of technology. Although, I will say that as you scale data centers up and up, the need for efficient backup actually increases. And so, our solution probably offers some real benefits at larger scales versus sites that would require gigawatts of diesel generation backup. And so, we're excited by the prospect of delivering all sizes to customers. We'll lease space at a building at a time, so if somebody wants 70MW, they can come to us. If somebody wants multiples of that, they can come to us and they'll be able to get what they need from us and we'll be able to deliver all these benefits to them in any case.

David Roberts

All right, well, interesting stuff. It's not often you get to see sort of like a new industrial category kind of taking shape before your very eyes. It's been very interesting to follow these developments. Lots to come. So, thanks for coming on. Jeff, any final thoughts?

Jeff Bladen

Just really appreciate the chance to talk to you today. I've been a fan of the pod for a long time and many friends have been on this, and so it's nice to finally have a chance to talk to you and share a little bit of what we're working on.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, I chat with fellow energy nerd-turned-ag-reporter Michael Grunwald about agriculture’s climate impact. We explore the folly of biofuels, the promise of meat alternatives, and the central importance of increasing yields. While we can imagine a future of energy abundance, land is a zero-sum game — no one’s making more — so the choices here are uniquely difficult and important.

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Text transcript:

David Roberts

Hey everybody, this is Volts for June 27, 2025, "Reducing the climate impacts of food and farming." I'm your host, David Roberts.

A year ago, when I interviewed energy expert Michael Liebreich, we confessed to our mutual climate blindspot: agriculture. It's unquestionably a big contributor to climate change — and getting bigger — but it's just not something we've been able to muster interest in over the years.

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That very exchange appears in the introduction of journalist Michael Grunwald's new book, We Are Eating the Earth. It is used as an example of the lack of attention given to agriculture in the larger climate world. (Guilty as charged!) Grunwald is a fellow energy nerd, but unlike me, about five years ago he steered into his ignorance about agriculture and fell down a rabbit hole, where he has been researching and writing ever since. (You may have seen his Canary Media columns on the subject.)

Grunwald is an old-school journalist, who's been a reporter at the Washington Post, Time, and Politico Magazine. His first book, 2006's The Swamp, was definitive on the subject of the Florida Everglades and its woes. His second book, 2012's The New New Deal, was about Obama's stimulus bill and remains underrated IMO — it was extremely educational to me at the time and looks prescient in retrospect.

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Eating the Earth is his third book, and I figured since he's gone to the trouble of learning about this stuff and I haven't, I should at least ask him about it. So, I'm going to quiz him on the many things he's learned about these last few years, from indoor farming to gene editing, biofuels to veganism. All right, let's go to the farm.

With no further ado, Mike Grunwald. Welcome to Volts at long last. Thank you for coming.

Michael Grunwald

Thanks so much for having me. I've been a fan for so long.

David Roberts

We have been joking that I have avoided this topic pretty assiduously my entire 20-year career. And, having now read through your book and grappled with this a little bit, I'm not sure I've been persuaded to the contrary. But we can discuss some of the reasons for that as we go.

Michael Grunwald

It's been nice talking to you.

David Roberts

Anywho, bye, bye. So, let's start here. Let's start at the highest possible level. Just give me the sort of — by the way, I've got like 400 questions for you. So, we're going to have to move along here. You're going to have to do the sort of elevator pitch version of all these answers. You know, just obviously, listeners can go read your book if they want the full deal. So, let's start here. Just give me the sort of elevator pitch for why climate types need to pay more attention to agriculture.

Michael Grunwald

Well, food and agriculture is a third of the climate problem, right? And it gets about 2% of climate finance. And I think, you know, about like 0.5% of climate conversation. You know, I'll tell a story of how I got into this because I was, like you, an energy dork. Not quite as, you know, not quite as perhaps a committed energy dork. But actually, I was writing a piece for Politico Magazine about my new green life. I think I beat you to solar panels and an electric car.

David Roberts

I still don't have solar panels. I'm a terrible greenie.

Michael Grunwald

But the point was, "Hey, you know, I'm a climate reporter. I care about the climate, but I'm doing this not because I'm an eco-saint, but because I know enough about this that this is going to save me money." And my feeling was that this was about to go mainstream. So, I had this kind of throwaway line about how, "Look, you know, I don't line-dry my laundry, I don't unplug my computer at night. I still eat meat." But when I went back and looked at that, I was like, "Wait a minute, I don't even know if eating meat is bad for the climate?"

I genuinely had no idea. So, I called this guy, Tim Searchinger, who I knew, and he said, "Yes, duh." But I realized, if I didn't know anything about food and climate, then probably other people didn't. And it's just, you know, even putting climate aside, agriculture is the leading driver of deforestation. It's the leading driver of wetland destruction, water pollution, water shortages. It makes a huge mess. So, it's a big deal.

David Roberts

Yeah, like one of the messages that comes through clearly in your book, which constitutes one of the reasons why I find paying attention to this subject dreary, is you're like, "We shouldn't fall into the trap of thinking, as in energy, that there's good energy, you know, there's clean energy and dirty energy, and the dirty energy is the bad guy and the clean energy is the good guy." It's pretty simple on the energy side, it's not that simple on the ag side. As a matter of fact, a farm is bad, ipso facto, for nature. Any kind. The shift from wilderness to farmed land constitutes the bulk of the environmental damage that farming does and that it doesn't matter what kind of farming you're doing on that land. Farming in and of itself is "a necessary evil," you call it.

So, it's just like levels of bad here that we're basically discussing. Unavoidable, necessary levels of bad.

Michael Grunwald

That's exactly right.

David Roberts

How fun is that, Mike?

Michael Grunwald

Well, that is super fun.

David Roberts

But anyway, so agriculture. So there's the sort of tripartite problem here with agriculture that you go over in the first chapter, which is that the population's growing so we need more food. Climate change is happening, so we need lots fewer GHGs from that more food. And biodiversity is dying, you know, land use is a problem. So we need that more food grown using fewer greenhouse gases on less land, basically. Like that is the tripartite agriculture challenge. And it's like, that's insoluble, Mike. Which is basically the conclusion you come to at the end of the book.

Michael Grunwald

Oh no, I don't think I'm that Debbie Downer. I would say I've concluded that we have not yet begun to solve. But I think I have a lot of promising solutions. And look, I do remind you that, you know, you started writing about this stuff, what, in 2004?

David Roberts

Yeah, that's true. Energy was bleak then, too.

Michael Grunwald

There were no alternatives to fossil fuels, right? There was no solar, no wind. The one alternative, and we'll, I'm sure, talk about this, was biofuels, farm-grown fuels which turn out to be, you know, way worse than gasoline. So, I think this is hard, it is. And you're right, you know, I wouldn't say every farm is bad, look, we gotta eat, but I do say that every farm makes a mess. I do say that every farm is a kind of environmental crime scene. Right. It's like this, it's like an echo of whatever nature was cleared to make room for it.

David Roberts

But this is the problem because I want to emphasize this, because this shapes a lot of what you say for the rest of the book, which is that getting more out of less land with fewer GHGs is incredibly, incredibly difficult. And the main lever you have to pull is yields, which we're going to get to, but sort of like the obsession with yields comes out of this tripartite problem. So this is sort of the background problem of agriculture. We need to make it less land-intensive, less GHG intensive, but we need lots more of it.

And that's like, you know, I don't even know what the right analogy is. It's doing something incredibly difficult. Two, three incredibly difficult things, that we've never really done in earnest, at once.

Michael Grunwald

My bad. I know you hate sports ball, but my basketball analogy is that we need to get more offensive rebounds but also do a better job getting back on transition defense.

David Roberts

I'm sure some listeners out there will know what that means.

Michael Grunwald

It's the "more with less." You're right that I do talk about the supply side. We need to make more food with less land. And we also, on the demand side, need to have less land-intensive diets.

David Roberts

Yeah, yeah. I want to go through all the various and sundry solutions that people have. I'm just going to be tossing them to you for you to take swings at them. But before we get there, I just want to start because the book starts with like 100 pages of accounting of the story of biofuels, basically the story of our assessment of biofuels. And obviously, we don't have time for you to recount that whole story, but sort of the main lesson that comes out of it, the main point of contention in all that fighting was, "What is the role of land use?"

Basically, like land, the question of land. Because you know, people were doing the calculation like, "You grow corn, it absorbs the GHGs, then you burn the corn, it releases them, you grow the corn, it absorbs them again. Oh, it's carbon neutral." But, as scientists came along and started pointing out, "If you're using that corn for fuel, they have to grow the corn to eat somewhere else." Right? So if you're doing this with the land, you're not doing that with the land. It's called opportunity cost. So, just talk a little bit about the role of land use in that fight and why it was, why it took 20 years to get people to pay attention to it.

Michael Grunwald

This was the one thing I knew about this area before I dove into this book. It was because I had traveled to Brazil in 2008 and wrote a piece about how essentially corn ethanol in the United States was tearing down the Amazon. Because through this exact mechanism you just described, if you're going to grow fuel, then somewhere else you're going to need to grow more food. And guess what, it's not going to be a parking lot. It's going to come out of nature and it's going to come out of, you know, these forests that are full of carbon and also absorb the carbon that we're pumping into the atmosphere with our fossil fuels.

So, my line is that it's, you know, it's kind of like if you want to fix the climate while you're deforesting, it's like trying to clean your house while blowing your vacuum cleaner to bits in the living room. You just can't do it.

David Roberts

But this seems obvious and intuitive, right?

Michael Grunwald

Right. It seems incredibly obvious. But essentially, you've, I'm sure, done more, you know, looking at life cycle analyses over the last 20 years than, you know, than you want to admit. And we all have, but up until, you know, this wetlands lawyer who's the kind of star of my story, Tim Searchinger, he's the guy who I first called and asked if meat is bad for the climate. You know, he was just this lawyer and he thought that seemed weird. Why don't these climate analyses take land use into account? Because actually, growing ethanol, you know, the actual production of ethanol, he's looking at these studies, it's worse than producing gasoline.

"You use more energy in producing it. You know, so all of the benefits, the supposed benefits, benefits from corn ethanol were from growing the corn. And Tim just looked at this and said, "Well, wait a minute, when that cornfield was just growing food, it was still soaking up that carbon. So what the heck is going on here?" And it sounds, you know — he was at the Environmental Defense Fund at the time and he got into this huge fight at work where, you know, the chief economist there was kind of like, "Are you saying you're the only person who realized this?"

And he was kind of like, "Well, yeah, I mean, nobody else..."

David Roberts

And the fight is that, I mean, the sort of technical basis for the fight is that it is very difficult to pin down a counterfactual. It's just very difficult to say what would have happened if you didn't do X, right?

Michael Grunwald

It's hard to pin it down exactly.

David Roberts

Right. As your hero says, it's obviously not zero.

Michael Grunwald

And it's obviously a lot. You know, these studies were essentially claiming that if you just stopped growing corn in the United States for food and just instead put it all in our fuel tanks, it would have no effect on global deforestation. And that was obviously preposterous. And I do, as a side note, have to mention, look, my hero, even though he was not a scientist, got a piece published about this in Science. It caused a lot — he created this idea of indirect land use change, which is now any life cycle analysis involving biofuels or really just about anything involving land has to account for indirect land use change (ILUC).

And I do have to point out that the House Republican bill, the Big Beautiful Bill that, you know, is getting rid of most of the clean energy stuff in the Inflation Reduction Act, not only does it extend the credit for biofuels, but it specifically has language that, when you do the analysis, you can't look at indirect land use change.

You know, because it comes out with answers that corn growers and soy growers don't like. And that is what's behind all this.

David Roberts

Yeah, there's a huge industry. I mean, anybody who's been in our area for as long as we have knows that this is a huge industry and it is a political third rail. Like, you can't get rid of this stuff. People pop up occasionally. So, I don't want to spend a ton of time on biofuels. I will just say they're bad. And that's across the board. Like, they're bad for sustainable aviation fuels, they're bad to make synthetic natural gas. Like, the math does not work. It doesn't, basically, for anybody. Like, I think if you're capturing methane gases that were otherwise going to be vented into the atmosphere and doing something with them, fine.

But, like, that's to avoid doing them in the atmosphere. It's not like you're going to get a good economical —

Michael Grunwald

Well, I will say, if you're actually using a waste product to make your biofuel, then it's probably okay. But a lot of those anaerobic digesters that are turning manure into biogas, they're terrible too. In fact, WRI looked at like 20 different ways that you can better manage manure. And 19 of them were cost-effective. And of course, all the money is going into these anaerobic digesters because, you know, farmers get paid for them. And that's the one that isn't cost-effective. They're mostly like craft brewing biofuels. So really, anything that uses land — I mean, I know I'm hopefully a broken record because this is my message, but we are eating the earth and it's agriculture that's eating the earth. And biofuels, it turns out, are only eating about a Texas worth of the earth. While for instance, livestock are eating 50 Texas worth of the earth.

David Roberts

Right, right, right. This is the second part of the message about biofuels: they're bad. If you've heard that they're bad, that's correct, they are bad. What about this new other kind? Also bad. But scale-wise, agriculture, whatever damage biofuels may be doing, agriculture is doing the same damage at a vaster, vaster scale. That's sort of the point of that section of the book. It segues into the larger land use dilemma, which is mostly about agriculture.

Michael Grunwald

Exactly. And this is something we all kind of know, right? When you look out the window of a plane, you see all those squares and circles and it's like, holy shit, there's a lot of agriculture out there.

David Roberts

Yeah, the numbers are bracing. Like our settlements — I forget the exact numbers you use in the book — but like our actual physical settlements, cities that we live in, it's like 2 or 3%.

Michael Grunwald

Yeah, I'd say one is at 1% going towards 2% of the land on Earth, while agriculture is about 40%. So, you know, you and I, we've both done a lot of work on the sort of scourge of urban sprawl and the importance of urban density. But just think, like agricultural sprawl, is 30, 40 times as bad. You know, that's what's eating our forests.

David Roberts

Yes, the land use problem, to a first approximation, is the agricultural problem. So, what I want to do here for like the next 30 minutes or so is do a little bit of a speed round because we've got a lot to get through and not a ton of time. I just want to kind of throw familiar solutions at you and I want you to tell me sort of like how to think about them. Having spent five years of your life immersed in this miserable research, you've learned all this stuff. Tell me, sort of like, what scale, what is the scale of this solution?

How should we think about it?

Michael Grunwald

David, it was fun. It was fun research. It was just the writing —

David Roberts

Did you say it was fun to write a book?

Michael Grunwald

No, it was just the "butt in seat" writing part that was hell. But actually, running around the world, talking to people, you know — I'm sure you see this with energy, right? I mean, before we get into the solutions, I should say it's really exciting because I'm a cynic, I'm a grouch. But it's really cool talking to these, you know, scientists and entrepreneurs who are thinking about this really massive problem and are just like, "Hey, let's try to fix it." And they have these unbelievable —

David Roberts

That's my whole job, Mike. That's the only thing that keeps me sane. So, I'm glad you got jazzed out of it. Okay, so I'm going to start with, I think, probably some easier ones to get to the harder ones later. Let's start with indoor farming. People love the idea of indoor farming because you can precisely control conditions. You eliminate insects, you eliminate any pests, any natural threat, you can improve yields, etc.

Michael Grunwald

Right. Not to mention night. And weather.

David Roberts

Yes, you can grow during winter; you can grow year-round. So, there are a lot of obvious advantages.

Michael Grunwald

It's a great place to start because it's, in many ways, the allure of indoor farming. It sort of highlights all the problems with outdoor farming, including that it eats the earth. It uses so much land. So, what if we could just put it in a skyscraper, like in downtown Newark?

David Roberts

Right. If you're trying to make it more intensive, more out of less land, exactly. Stacking up, going vertical, squeezing it all together, it sounds...?

Michael Grunwald

It's amazing, right? Instead of having a harvest, you know, maybe twice a year, you have it every two weeks. I mean, it's just, it's really remarkable. You don't, you know, you control all your inputs so, you're not creating any pollution, the birds aren't pooping on your crops. It's incredible. The long story short is that it doesn't work on any real scale. A friend of mine started one of the indoor farming companies called Bright Farms. He ended up getting fired because he was always complaining that the ambition wasn't big enough. What he was always saying is, "We're gonna solve the lettuce problem, maybe someday we'll solve the strawberry problem, but we're not gonna solve the food problem.

And of course, his board was like —

David Roberts

Because the food problem is grain, mainly a grain problem. And grains don't really... Like, what they're growing in these vertical farms is mostly leafy greens.

Michael Grunwald

Exactly. The high-end stuff. You can grow weed in a vertical farm and make a lot of money. Strawberries are the most, the highest margin, thing in your grocery store. You can do it with that. But it just, the energy costs too much and it's just like the sun is awesome. So the purely vertical farms...

David Roberts

Is it just that then? The energy costs too much?

Michael Grunwald

That's the sort of short-term problem.

David Roberts

But because one of my questions is like a lot of the technologies I cover here on this pod are only really going to work at scale without subsidies if renewable energy gets lots, lots, lots cheaper. So, a lot of solutions are pending that, basically. And so, I'm wondering, if we got to something like energy abundance, trivially cheap renewable energy, would that solve this problem or are there other things?

Michael Grunwald

It would make it a lot better. But right now, it uses so much energy. I think I remember I was doing back-of-the-envelope math with this one guy who had invested in one of these greenhouse type deals, and we calculated that it would take, I think, 30% of all current renewable energy in the United States to grow America's current tomato crop. And you know, tomatoes are not a big part of — you know, again, we use a couple hundred thousand acres for lettuce in the United States, and we have a couple hundred million acres of crops.

So, it's just really tiny. The real problem is that you can't grow these — at least nobody yet has figured out how to grow the big five: corn, soybeans, wheat, rice. This is a big problem. And I will say that I wrote a piece about this back when Plenty, Bowery, and AeroFarms had billion-dollar valuations. I wrote a column saying that the headline was something like "Vertical farming just isn't going to work." It was in Canary Media and I took a lot of crap, and now all three of those companies have gone bankrupt.

David Roberts

Okay, indoor farming is probably good for some nice boutique high-end crops, but it's not a scale solution. Another thing people are obsessed with in this is food waste. You often hear, "We don't have a supply problem. We grow enough food to feed the world. The problem is distribution. It's not getting to the people who need it, we're wasting enormous amounts of it, etcetera, etcetera." So, how should we think about food waste in the solution set?

Michael Grunwald

So, I'd say two things about it. First, I would say that it's true. It's absurd that we waste a quarter of our food, you know, some say a third. I think it's more like a quarter around the world. In the rich world, it's mostly, you know, we just waste it on our plates or at the restaurant. In the poor world, it's more, you know, we waste it close to the fork, they waste it close to the farm because they don't have good ways to store it.

David Roberts

Infrastructure.

Michael Grunwald

Yeah, they, you know, they can't get it to market. They don't have the right harvesting equipment, the processing equipment. And so, the first thing I always say is, "Yes, it's a huge problem, because when you waste a quarter of our food, that means we're wasting a quarter of the land we use to grow the food and the fertilizer and the water."

David Roberts

A quarter of the Amazon.

Michael Grunwald

Yeah, exactly. So, yes, I'm for getting rid of food waste. Everybody is. It's hard. And that's going to be a theme of a lot of these solutions is that, you know, like, I'm sure we'll talk about eating less meat, which is also really hard, but it's especially hard because we love meat. Nobody loves food waste. And yet it's still hard. I just did a piece for Slate about how there's a lot of data that shows, you know, we're all pissed off because food has gotten more expensive. Right. Yeah, I think we just picked a new president because of it.

Right. "Oh, it's terrible. We're paying too much for groceries."

David Roberts

Subsequently, eggs have risen in price almost every day since.

Michael Grunwald

Right. And now the new guy is unpopular, and that's probably why. Not because of fascism or any of that stuff. Everybody hates, you know, paying more for food. Well, we are not wasting less food. And so, it is just, it's hard. That said, there are a lot of things that I'm excited about. You know, there are these technologies where you can better manage inventories if you're a grocery store.

David Roberts

Yeah, that's kind of what I wondered. Is, like, what's at scale? Because whenever I hear about solutions to food waste, it's always these kind of local, incredibly high touch, like "We're employing people to drive to restaurants and gather this and..." You know, it just doesn't sound like stuff that could scale to any appreciable extent.

Michael Grunwald

I mean, I think some of it, I mean, groceries, again, because they have a purely economic motive and they're better at acting on economic motives. You know, these things like Flashfood, where you get the app and when food is ready to expire, they put it on sale automatically. AI puts it on sale for 50% and you come to the store. That's really moving the needle. And actually, groceries are doing a better job with their waste. And I think, you know, there are these like Apeel Sciences which has these kind of biotech invisible peels that you coat avocados and bananas with so they last longer.

I think that's exciting. And there are policy levers you can use too. I just mentioned expiration dates. Well, most of them are bullshit, and certainly the "best buy" dates. But it's sort of whataboutism, right? This idea like, "We don't need more food, we just need to waste less food." And you also hear, "We all just need to go vegan," or, you know, "We just need to reduce population growth." And what it really, you know, to wildly oversimplify the math, is that we kind of need to do all the things. Even if we reduce — the current US goal and global goal is to reduce food waste in half. Even if we do that, even if we eat 50% less meat in the rich world —

David Roberts

Quit skipping to the meat thing, Mike. We're not at that yet. We're getting to that later.

Michael Grunwald

Even if we get rid of biofuels, we stop using them entirely, we're still going to need to grow our agricultural yields even faster over the next 30 years than we have over the last 60. So, we're going to need a lot more food.

David Roberts

Okay, so food waste is important, but it's just one bit of the buckshot here.

Michael Grunwald

Don't waste food!

David Roberts

So, my understanding is that fertilizer is a huge problem here. It's got a bunch of nitrogen in it, it's polluting water, it's messing with the greenhouse. What about now — like, I'm always reading about cool synthesis and electrochemistry and all these abilities we have now to make new materials. Is there any promising attempt to make benign, more benign fertilizers?

Michael Grunwald

Yes, there are some exciting things. The first thing I would say is that half of all — you know, we just talk about food waste. Half of all fertilizer is wasted too.

David Roberts

Just overused, imprecisely?

Michael Grunwald

Overused. And it's annoying because, you know, food waste just ends up in the landfill and it fills up our landfills, creates a little methane. You know, fertilizer waste, we call it pollution, right? It's either, you know, it's nitrates that end up in the, you know, creating the dead zone in the Gulf of Mexico, or the algal blooms in the Great Lakes, or it's nitrous oxide emissions, which —

David Roberts

And that is because of the nitrogen. It all basically comes back to the nitrogen.

Michael Grunwald

Yeah, you know, I mean, nitrogen fertilizer is literally made out of natural gas. So obviously, if you could think of ways to use less of it, that would be really awesome. And right now, you know, this is going to be really shocking to you, Dave, but in the United States, we mostly rely on voluntary measures from our farmers. And this is probably going to be even more shocking: they're not working all that well.

David Roberts

Is fertilizer just so cheap that there's not that economic incentive? Because, I mean, these are like big corporate operations. You'd think they would be cutting costs. You'd think they would be thinking of ways to use less fertilizer on their own. You wouldn't think they would have to be forced to do so.

Michael Grunwald

You would think that. You know, and they are not, they are not idiots, these guys. They run businesses. And it's not just because Koch Industries is selling them the fertilizer, which, you know, has something to do with the lack of, you know, fertilizer regulation. But the fact is, and this is maybe skipping ahead, also the gains they can make by better yields, they so outweigh the costs of buying a little excess fertilizer that they call it "Insurance N." Like insurance nitrogen. And there are exciting technologies with, you know, some of them through precision agriculture, where your tractor basically tells you where on your field needs fertilizer and just drops it there, as well as some of these, you know, actual alternative fertilizers. Right now, there just isn't that much incentive if there's any danger of losing yields.

David Roberts

Well, let's get back to the alternative fertilizers. Is that a big thing? Like, can you fertilize without nitrogen?

Michael Grunwald

It's starting. So, there's a company called Pivot Bio that's backed by Bill Gates that I'm pretty excited about. And look, there are a lot of arguments over how well this stuff works, and we're not entirely sure, but it's on 5 million acres in the United States. 5 million corn acres.

David Roberts

That's a alternative fertilizer? How did they avoid —?

Michael Grunwald

It's cool. So, and this is one general theme, I think, in a lot of agriculture and probably a lot of society, is that the 20th century was chemistry. All these chemical solutions did really cool stuff, but often had these really toxic unintended consequences. The kind of mess that fertilizer makes being a classic example. I tell a story in the book about Norman Borlaug, the founder, father of the Green Revolution. I talked to this guy who has since died, but he was 93 years old when I interviewed him. And he went to Iowa with Norman Borlaug and sort of the punchline is that Norman Borlaug told him like, "Fertilizer is the Achilles heel of the green revolution and makes such a mess."

The 21st century is going to be biology. And so, Pivot Bio has essentially genetically engineered microbes. The original, the holy grail was, "Oh, can we just re-engineer these crops so that they can kind of fertilize themselves?" And that just hasn't worked really well yet. But what they did was they re-engineered these microbes that naturally fix nitrogen from the air and bring it to the soil and feed plants, but have kind of gone dormant because there's already so much fertilizer in the soil, so much nitrogen in the soils. It basically turns off their sense of smell.

So, they keep fetching nitrogen, even though it's already there. They're no longer lazy.

David Roberts

So they fetch the nitrogen from the atmosphere rather than us putting it in there?

Michael Grunwald

Which is what the whole chemical, you know, the Haber-Bosch process, that converts air, the alchemy of turning air into nitrogen. This is doing it biologically. And right now, they say they replace about 40 pounds of nitrogen per acre, which is about one fifth of the fertilizer on a typical US cornfield. The idea is that, you know, as it works, and there's pretty good evidence that it's working at least a little bit and that it isn't harming yields.

David Roberts

I mean, is there a horizon you can see, where that gets better and better and makes a substantial? I mean, obviously, these things are difficult to predict. Like, I have all the faith in the world in electrons, but I don't know enough about biology to know whether to sort of lay all my money, I'll put all my chips on that. But like, is that a solution to the nitrogen problem, or is that just another one of these sort of like trimming it at the margins things?

Michael Grunwald

No, I think that this is like the idea is that this can really take a big bite out of it over time, as with better gene editing. You know, like, technology is cool.

David Roberts

Well, this segues into my next question, which is about genetic modification. I have some criticisms later of the technocratic approach in this book. But this seems like an area where the technocrats have it right and the hippies are just wrong about this. You know, there's been a lot of objections to GMOs and as far as I have heard, no research whatsoever showing physical health harm. This obviously puts aside the politics and power questions, but the crops themselves have not been shown to hurt.

Michael Grunwald

Not in human health. It's like these are the most studied stuff on earth. And I agree, the hippies are wrong. That said, this is, you know, the technophiles have made a lot of big promises about GMO crops. Most of them have been somewhat disappointing in terms of the spectacular yield increases. They've been overhyped somewhat.

David Roberts

Yeah, what's your level of, I mean, what's the sort of appropriate level of hope to put in gene fiddling?

Michael Grunwald

I think, especially on the crop side, there's pretty good reason for hope. On the gene editing, I mean, this seems really cool. I mean, these, you know, the way they did genetic modifications, it was really kind of haphazard. You're just sort of bombing these crops with, you know, and sort of hoping something weird and cool and Spider Man-y happens and it just didn't work that well. But with gene editing, you can be really precise and you know, you combine it with the artificial intelligence and these supercomputers where — you know, I tell this story, I went to the University of Illinois where they are literally trying to re-engineer photosynthesis.

David Roberts

Yes, and the point of the AI and the computing is just that you can run simulations of these things that would have taken weeks or months. You can do dozens in a day.

Michael Grunwald

Right. And it would have taken tens of thousands of dollars. And you can do it for pennies. Like at the University of Illinois, they have set up this supercomputer that models the 170 steps of photosynthesis because it turns out photosynthesis — it's like it's 3 billion years old, and it does a good job of maintaining life on Earth and everything.

David Roberts

Pretty good record established.

Michael Grunwald

Yeah. So, like, give it — But it turns out to be pretty inefficient.

Like, you know, it takes carbon from the air, but it often grabs oxygen by mistake. And it turns out that it doesn't react that well when the sun, like a cloud, blocks the sun for a bit; photosynthesis turns off and then it's really slow to get started again. So, these guys have sort of figured out, "Well, okay, where's the gene that kind of restarts it? And let's have more of that." Anyway, they're doing stuff. It's going to take a long time, but, you know, you could really be looking at like 20, 40, 50% yield increases.

And, on the fertilizer side, you could be looking at replacing 20, 40, 50% of it. Fertilizer has about as much emissions as aviation.

David Roberts

Interesting.

Michael Grunwald

So, probably a little bit more. So, we're talking about big numbers here.

David Roberts

Yeah, yeah. What about another favorite of the hippies? And by the way, I just, I hope listeners know that I refer to hippies out of love and identification. I am, of course, a hippie myself, deep down, as you well know.

Michael Grunwald

I just did a debate at Berkeley where I was sort of debating a hippie professor who is, you know, pushing some of the agro-ecology regenerative stuff we'll talk about later, but Alice Waters was sitting in the third row just glaring at me the whole time.

David Roberts

Well, okay, so there's a lot of hope being put into trapping carbon in the soil. Soil carbon is a big, hyped thing right now. The idea is basically that you can just change your farming practices in such a way as to lock more carbon into the soil where it will stay stable, and as I understand it, will boost yields, will boost the fertility of the soil also. Am I making that up? Tell me what's going on with soil carbon and how big of a deal I should think of it.

Michael Grunwald

So, on the soil carbon stuff, I try to be very measured about a lot of this stuff. And since so much of it is ideological, and a lot of it, the truth is, you know, both really is somewhere in the middle. Carbon farming is bullshit. A lot of the regenerative practices that you see in Kiss the Ground and Common Ground that are being pushed by General Mills, Archer Daniels Midland, PepsiCo, RFK, Joe Rogan, Michael Pollan, and Al Gore.

David Roberts

You know, when I say, wait, so when we're talking about soil carbon, we're just talking about regenerative — are those basically the same kind of the same thing?

Michael Grunwald

Well, well, the thing is, regenerative is more — you know, they would say the regenerative movement would say, "It's about soil health," and it really does help with soil health. They would also say that it, you know, there are kind of societal benefits as you know, when you're creating these regenerative systems as opposed to extractive systems. There's a lot to be said for all of that. But they also say that it stores a lot of carbon in the soil and that basically you can reverse global warming by essentially taking all that carbon that we've pumped into the sky and just farming differently, and it'll come down in the soil.

And that is just not true.

David Roberts

Okay, well, we're going to get more into regenerative later. We're going to argue about that at the end. I'm saving that for our finale here.

Michael Grunwald

I should say, though, that trees are great stores of carbon. Like planting trees, which is part of this movement, right through agroforestry. That's awesome.

David Roberts

Yeah, Reforesting deforested land is like — who could not love that?

Michael Grunwald

Oh, and we should say, remember my first book, which was when I first met Tim Searchinger, was about the Everglades. Tim gave me the first tip that sent me to the Everglades, where I wrote the book, met my wife, and moved to Florida. But restoring wetlands is, like, that's the best bang for the buck. If you can, like, take wetlands, that's like — we're looking for one billionaire who could put in a few billion dollars and literally reduce 1 or 2% of global emissions by restoring wetlands.

David Roberts

All right, let's get to one of the things that everybody wants to talk about. If I am, as an individual, primarily concerned about climate change, what is the best change I can make to my diet? Like, what three foods should I give up if I'm most concerned about climate change?

Michael Grunwald

Beef and lamb. It's, you know, ruminant meat is really the baddie. That's what I've done with my diet. I've cut out beef and lamb. Like, if you can go vegan, that is awesome. That is the best. Beans and lentils are by far better than chicken and pork, but beef and lamb, the ruminant meats, are so much worse than chicken and pork that it turns out that actually vegetarians, also great, are no better than just cutting out beef and lamb, because vegetarians end up eating more dairy. And cows are really the problem because they are eating the earth.

David Roberts

Yeah, I guess you're dodging beef, but if you go to dairy, you're still supporting the cow agriculture.

Michael Grunwald

Right. And dairy isn't as bad because, you know, cows only produce beef once. While they produce dairy on a, like, shockingly constant basis. If you go to one of these industrial dairies.

David Roberts

So, this is like beef and lamb first, and then there's a big gap.

Michael Grunwald

Yeah, exactly. Less beef is really important. I mean, you know, beef, they provide about 3% of our protein or calories, and they use about half of our land. It's just an incredibly inefficient machine of converting animal feed into food. There are lots of cool things about cows, but —

David Roberts

Is there a name for a diet that avoids cows, lamb, and dairy, but not chicken and fish? You know, just like an anti-cow.

Michael Grunwald

Can we call that the Grunwald diet? I don't know exactly.

David Roberts

Somebody needs to put a diet book out.

Michael Grunwald

I mean, it would be a climavore diet to name check my RIP podcast.

David Roberts

But the reason veganism is best is mainly because of dairy. It's cows —

Michael Grunwald

I mean, plants are —

David Roberts

I mean, they're healthy too.

Michael Grunwald

Plants are great. And plants are healthy. Well, you know, look, Doritos aren't healthy. Right? Or, you know, but in general, eating plants is a lot more efficient than eating the, you know, eating plants that have been laundered through an animal. Right. And that's what dairy and beef is, right? It's, you know, the chickens eat soybeans. The cows eat corn and they turn it into beef. And you know, everybody's, I'm sure we're going to get to fake meat too. And people say like, "Oh, it's processed food." But I like to remind people that what goes on inside a cow's stomach, that is a process. It's like, it's crazy. So.

David Roberts

But if my concern is animal welfare, as I understand it, chickens are the number one problem from that point of view.

Michael Grunwald

That is true.

David Roberts

Just because there are so many, their suffering is so extensive.

Michael Grunwald

And they're treated worse. They're treated, I mean, it's horrible.

David Roberts

The cruelty of the chicken game is truly horrific.

Michael Grunwald

It's funny, I talk a lot in the book about how, yes, a big part of the problem is that we are going to need, particularly in the rich world, to eat a lot less beef, but that means that we're also going to need more efficient beef. And it turns out that you can make beef more efficiently. Chickens are already like the 42 days from, you know, egg to broiler is just, it's just like they grow so fat that they can't stand on their legs. It's horrible. And you really can't do it more efficiently.

They've practically reached their biological limits. While cows, there's, you know, for better or for worse, there's still a lot that can be done.

David Roberts

Just, like with cows, you're tweaking their diet so their gut biome works differently or what's the, what's a more efficient cow?

Michael Grunwald

I went to Brazil where I saw these ranches mostly. They have just millions of acres of degraded land and degraded ranches in Brazil where you'll have like one cow on 10 acres. And I saw these incredibly efficient ranches, some of which, by the way, use a lot of regenerative practices, including no-till and cover crops. They let the cows wander around the crops, which is something that the Michael Pollan types love. But they also do a lot of industrial stuff. They have feedlots and they fertilize their pastures, and they can put, you know, seven cows on one acre.

And so, it's like, you know, when you think, when you're like five, six, seven times more efficient in producing beef, that means you're using 1/5, 1/6, 1/7 as much of the Amazon.

David Roberts

Okay, so important marker there. Beef and lamb, absolute climate villains. Unquestioned, unambiguous.

Michael Grunwald

Yeah, and grass-fed is even worse, by the way. It's like, you know, from a climate perspective, not only because of the land, but because of, as many of your listeners know, the burps and farts are a real problem. And if you just, you know, have grass-fed beef, which spends their entire lives in pasture, it can take like twice as long to reach slaughter weight as it does for a feedlot fed. They only spend a couple of months in the feedlot, but that means they get to slaughter weight a lot quicker. So they don't spend the extra time burping and farting and creating methane emissions.

David Roberts

And this is one area where, and I think there are lots of these in agriculture, where a concern for climate and a concern for, let's say, other environmental and social problems don't necessarily point in the same direction. Like, grass-fed beef might be better for the welfare of the cows. It might be better for the biodiversity of the farm. It might be better on other metrics that you care about, but it will be worse strictly on greenhouse gases. Do you agree with that general point that those are different in a lot of cases?

Michael Grunwald

There are definitely trade-offs, but the environmental trade-offs are not always obvious. And I just do want to point out that the eating of the earth that I bang my spoon on my highchair about is not just a climate problem. Remember, this is like, you know, we're destroying the habitat, you know, these habitats for, you know, this is what's creating the sixth mass extinction. Right. It's not like pesticides in the air. It's agriculture taking over the earth. It really is.

David Roberts

Okay, before I talk about engineered meats, which I do want to talk about, let's talk about some of the other possible large-scale protein substitutes that people toss around. Bugs, seaweed, cultivated microorganisms. Are any of these sort of large-scale alternative proteins going anywhere?

Michael Grunwald

Well, they're all off to a slow start, I would say. But look, I think insects could be a solution — I don't think it's like that's what we're all going to eat when we grow up. But I think it can replace a lot of fish feed. I think it can replace, you know, hopefully someday a lot of animal feed. And remember, we use a lot of land for that. So I think it's promising. I think the idea that — you know, these are mostly efficiency questions and, and there are some really efficient animals, you know, that are very tiny, that grow protein pretty quickly.

David Roberts

This is sort of George Monbiot's — is that how you say his name, actually? I don't know. I don't know that I've ever said his name out loud. But that's his whole thing, right? He wants to just wipe out normal farming and replace it basically with microorganisms that are much more efficient in producing protein for energy input.

Michael Grunwald

He fell in love with a couple of potential solutions that I think are very exciting potential solutions. But I think, you know, we should absolutely be letting a thousand flowers bloom. But I would not shut down agriculture until these other... you know, I think that's one of the things that always kind of irritates me. There's this idea, it's like, "Well, let's first start by having lower yield agriculture because we know there are all these other things we can do that can, you know, help us feed the world without frying the world." And I'm always like, "Why don't we make sure that other stuff works and then, you know, maybe we won't need all this agriculture?"

David Roberts

I'm going to flip that around on you in a minute. But we're not there yet. So, of all these alternative proteins, is there one or a set of them that you think are particularly more promising than others? Is seaweed meaningful?

Michael Grunwald

No, I mean, I think seaweed as a feed additive for, you know, to get the cows to burp and fart less methane, has some promise. I don't think as a food source that's — I haven't seen a lot of excitement. But some of the — and this is getting towards the fake meat stuff generally — I do think biomass fermentation, which is essentially, you put fungi into a, you know, a beer brewery and it just grows into something that is kind of shockingly like meat and shockingly nutritious.

David Roberts

So, what's your take on fake meat then? This is one of these things where, like, very few people have had any direct experience with it, but people love to have takes on it. It's a take attractor. What's your take?

Michael Grunwald

I started working on this book. My first reporting trip, I went to the Good Food Institute conference, basically the fake meat conference in 2019. And so this was a few months after Beyond Meat, which does the plant-based meat. Those burgers, they had just gone public and it is still the biggest popping IPO of the 21st century, really. Their stock went up to $250 a share.

David Roberts

It's been a disappointment, though, as I understand it. Like, the plant-based stuff has not taken off like people were hyping it.

Michael Grunwald

Oh, no. Well, at that, you know, in 2019, I literally thought I was going to accidentally raise a series A round on the drinks line. It was like the exuberance was — and people were literally having arguments with, "Are we going to replace meat in 10 years or 15 years?" It was like that kind of thing. And so it was over the top. And now, yes, like Beyond Meat was at $250 a share. Now it's at $2 a share. I went back to the GFI conference in 2023 and it was all doom and gloom. "This is dead." It's the trough of disillusionment.

David Roberts

This is the plant-based stuff or the engineered stuff because those are very different?

Michael Grunwald

Sort of everything. All of the investors who poured billions of dollars into this stuff have, you know, fled for the hills.

David Roberts

Where did they just ban it?

Michael Grunwald

Well, in my state of Florida, Ron DeSantis banned it. It's banned in Alabama, Mississippi, Montana. That's the lab-grown meat or, you know, the cultivated meat. But I will say, look, plant-based meat went onto the market and, you know, my take on it is that it was way better than the kind of veggie burgers of yore, right? Those like hockey pucks that were just for vegans, but they weren't as good as meat and they were more expensive. And so it was kind of like a play for —

David Roberts

The sausages are good. The breakfast sausages are pretty good.

Michael Grunwald

And I think Just Egg does a really nice job with their egg substitutes.

David Roberts

I haven't tried those.

Michael Grunwald

I think Impossible Burgers are pretty good, as is the Impossible Whopper.

David Roberts

My kid went and had an Impossible Whopper, and he gave it a pretty vigorous thumbs down. I was disappointed.

Michael Grunwald

I think those are fine. Actually chicken, like the plant-based chicken nuggets. There's really no reason to have a chicken nugget anymore. The plant-based chicken nuggets are just as good. I mean, who the hell knows what's in the real chicken nuggets anymore?

David Roberts

Yeah, I know. Because normal chicken nuggets are so distant from meat anyway.

Michael Grunwald

All the stuff that these are just vehicles for sauce, and that's fine. But, I think right now, the sort of use case for these alternatives are just for people who are trying to save the climate. And that's what we learned from Tesla, despite all the other stuff. All of these companies said they were going to be the next Tesla, but Tesla had a really awesome product that people thought was cool, and that has not yet happened with plant-based meat.

David Roberts

And I suspect that they're not going to get there with plant-based meat. I mean, it's obviously like there's nothing wrong with it. I love it, it's great. But, as a scale substitute for meat, I'm very skeptical. Whereas, cultivated meat sounds, I mean, you know, on the one hand, the product sounds meatier but on the other hand, the backstory sounds creepier. So, what's your take on how it's going to play out?

Michael Grunwald

I mean, I think on all of these things again, I'm like, I have a lot of faith in technology, particularly when it's supported by government investment. It is only just starting to happen globally with these alternative proteins. Remember, the first solar panel was what, like 1960, and it didn't become a thing for like 50 years. The first real, even plant-based burger that was designed for meat eaters was, you know, basically 2012. And the first lab-grown meat hasn't really hit the market.

There's been a couple, you know, in Singapore you can get, you know, some like 3% cultivated meat.

David Roberts

Have you tried it?

Michael Grunwald

Oh yeah, I've tried it all, and I've tried the chicken.

David Roberts

How is cultivated meat?

Michael Grunwald

It's fantastic because it's —

David Roberts

Is it really indistinguishable from meat?

Michael Grunwald

Well, at 100%, you know, like I had Upside's chicken and it's better than chicken because the chicken we eat today is bred for growth in six weeks. This was like cells from a heritage chicken, the kind of old fancy chicken and it was delicious. It tasted chickenier than chicken.

David Roberts

Interesting.

Michael Grunwald

I've had lab-grown sushi, I've had lab-grown lox, lab-grown burgers and, you know, I will say the meat, there's something, you know, we've been eating this stuff for 2 million years and there is something in our, you know, that when you have the actual meat that sends that it's like 2 million years of evolution saying "hello." Even when it's blended with plants, which I think, you know, as this stuff hits the market and the first us like Mission Barns, they make cultivated fat, pork fat that they're going to mix into a meatball and that's going to be the first product probably that comes to market.

David Roberts

Oh, interesting.

Michael Grunwald

Hopefully, this year. And I think, you know, and that tastes good. It tastes, you know, even just, just fat, even just with maybe 10% cultivated cells, it's a really good product. And I do think, I'm sure you've seen like the New York Times did a big story about the revolution that died on the way to dinner saying, "This lab-grown stuff is never going to work."

David Roberts

Yeah, we've already been through a hype cycle, maybe even two hype cycles, on this stuff when it barely even exists yet.

Michael Grunwald

Exactly. I'm really, again, I'm really optimistic, and I'm working on a story about this. But behind the scenes, there's amazing progress happening. In fact, the big scientific paper that came out that threw cold water on this stuff, the biggest problem with cultivated meat is essentially the feed. They call it the "media." It's like the glop that the cells grow in. It's what they eat. And to oversimplify, this guy said that these companies would never get it below $6.50, you know, and then in the best, best case scenario, maybe they'll get it to $3 a liter.

Well, they're already below a dollar a liter. And I've heard, and I've talked to some firms that are below 50 cents. So, like technology, you know, it moves fast, things happen. And the people who say like, "Oh, you know, you can't do it." I say even on the plant-based side, like, I don't know, I think like, you know, our species is very bad at changing our behavior. We're very bad at being nice to each other, but we're pretty good at inventing stuff, right?

David Roberts

Yes, a lot there. So, we should talk about the main thing here, the main story, which is the reason people in this area are mad at you, this question of what to do about factory farming, basically about industrial-scale farming. So, there's a lot of sentiment out there that industrial farming is bad in a bunch of ways for climate, also for particulate pollution, also crucially, socially, morally, you know, politically bad in a million ways. So, there's a lot of push towards what's called regenerative farming, which is just kinder to the soils, kinder to the more you switch crops, you leave a field fallow for a year, so it regenerates.

There's lots of different techniques that have come up. There's been a lot of hype about this. You know, like, this is one of those things that journalists love to write stories about: "Meet Bob. Bob squinted out over his field." You know, and Bob's beautiful farm where he knows all the animals and everything. Your basic point, and it's not you, you didn't invent it. The point that you make that other people make too, is "Whatever other benefits regenerative agriculture may have, it produces less yield per acre. And if you produce less yield per acre and you're producing the same amount of food, you are using more acres." So in other words, your critique here is by reducing yield, you are accelerating agricultural sprawl.

You are requiring more land to produce the same amount of food. So, even if regenerative farming is better than factory farming, regenerative farming is not better than the wilderness that the regenerative farm replaced. Right? Wilderness is always best. So, insofar as you're driving more land use, you are shooting yourself in the foot; you're doing worse for the climate.

Michael Grunwald

"You are eating the earth," some might say.

David Roberts

You're eating the earth. And the idea that you are pushing — a lot of other people are — is if you increase the yield, the per acre yield, through these factory farming, sort of intensive, highly technological means, you then spare that land. You need less land, you spare land, you spare wilderness. And so, you come out ahead, basically. Is that a fair summary of the sort of argument there?

Michael Grunwald

Well, you don't automatically spare the land, but you have no chance of sparing it if you've already torn it down, that's for sure. And it's like, you know, the classic example is I read a Washington Post piece about Kernza, which is the regenerative grain that they've started growing in Kansas. And it's awesome. It's perennial. So it's really like nature. It's much more like nature than other, you know, other approaches. And the headline was something like, you know, "A recipe for feeding the world and saving the climate." And you get to literally the 38th paragraph, and they say that they've now increased Kernza yields so that it's almost 30% of wheat's yields.

And it's like, "Well, wait a minute. If you're going to need more than three times as much land to grow the same amount of wheat, then you are not feeding the world or saving the climate."

David Roberts

Back to the land use, back to the opportunity cost of land use.

Michael Grunwald

I agree with all of these problems with factory farms, about how they're bad for animals and people.

David Roberts

They concentrate power, political power.

Michael Grunwald

Too many antibiotics, they lobby against the climate. They're probably a pandemic risk, although not necessarily more of a pandemic risk than other forms of raising animals. They're bad, bad, bad. But the thing that factories do well is manufacture a lot of stuff relatively cheap and relatively efficiently. And that is really agriculture's main job over the next 30 years. You know, what I say is that, you know, and some will say that this is unrealistic too, but, you know, all of this is going to be hard. But, you know, there are $600 billion worth of agricultural subsidies around the world.

You know, $300 billion is literally just money handed to farmers. I think we need to have a little bit more of a bargain where it's like, "Okay, if we're going to keep paying you, you've got to at least... You've got to at least be a little less nasty."

David Roberts

Have you ever tried to wrestle a dollar of subsidy out of the hands of a farmer, Mike? Have you ever?

Michael Grunwald

Exactly, I'm saying you can't. So let's at least try to attach, like, "Okay, we're going to give you your money, but here are a couple of things that we can do that will actually, you know, hopefully work out best." You know, for instance, we talked about wasting less fertilizer, right? Like, maybe we can come up with ways and we'll do the research for you. I want your listeners to understand, like, the extent to which people want to think that they can just transform agriculture, like the Rockefeller Foundation and the like —

Remember, these are the guys who initially bankrolled Norman Borlaug to do the work that led to the Green Revolution. They've put out a white paper where — it's a group of philanthropies, because basically, any philanthropy these days, if you say the word "regenerative," money starts pouring out of their pocket.

David Roberts

What if you said AI, regenerative and AI?

Michael Grunwald

That's VCs. That's VCs. But these guys, you know, they want a $4 trillion transition to agroecological systems. And it's not just like, you know, these are the biggest philanthropies, the United Nations, the World Bank, and then these big agribusinesses because they're like, "Oh shoot, you know, we'll push a dollar any way you want it and we'll get our, you know, like, that's fine." So you have like, you know, General Mills and Archer Daniels Midland and Danone. These guys are big on this. You know, "Fine, that's great. We'll have our farmers grow it regeneratively."

The problem is we're going to need a lot more farms.

David Roberts

Well, if you're telling them to do something that will require them to triple their production, obviously they're not going to complain about it. We're going to subsidize you and also thereby force you to triple the amount of land you have in production.

Michael Grunwald

I understand why people get upset at me about this stuff because, you know, industrial agriculture does suck.

David Roberts

Well, let me just throw this at you. I mean, it seems like at the very least, if the premise of focusing on intensifying yields through factory farming, if the whole premise of that is that it spares land, then at the very least, it seems like before you give these dollars to the farmers, you should require them to spare some land. The idea that it theoretically spares land. I mean, this is the thing about corn. If you look at the history of corn biofuels, like when corn yields improved, they didn't reduce the amount of land they devoted to corn.

They just found new uses for corn. That's what ethanol is. So, like, you know, this is Jevon's paradox, or however the hell you're supposed to say that. You know, this is like, "If you make it more efficient, we're just going to use more of it." You have to build the land sparing in legally, not just as a slogan.

Michael Grunwald

And this is the failure of REDD and REDD+ plus and all these other international efforts to protect forests is that you've got to have produce and protect together. They've got to be conditioned in each other and we will help you produce more. But exactly like you said, if you help a farmer increase his yields, the first thing he's going to do is like, "Great, I'm going to cut down more forest and grow more food and like, you know, and get rich." It has to be tied together and not just for that one farmer, but on a sort of jurisdictional basis. For Brazil, right?

You've got to tell Brazil, "We will give you all this money to work on increasing your yields and protecting your forest, but you've got to have the results." And what I will say is that the first Lula administration was really starting to do this. They were promised, "We'll give you a lot of money and we'll help you increase. You work on your yields, but also you work on protecting forests." And they did a lot of this. The international community did not keep its promises and did not provide the money. That's part of what led to Bolsonaro.

Like, people were pissed. So, I do think there it is — it's going to take a shit ton of money. You know, you can't do this stuff on the cheap. And it is going to require that there's going to have to be carrots as well as sticks.

David Roberts

Let me come at you with a critique from a different direction then, which is the argument here is like, we're not going to be able to persuade people to eat less meat. We're not going to be able to persuade these giants. You know what I mean? There are just immovable barriers.

Michael Grunwald

The argument is that we have to do all the things.

David Roberts

The only thing we can move is yields. But, like, that's a socially constructed fact. The idea that we can't move the meat lever, that this is the only lever that's movable, is socially constructed. And if we put, like, what if we diverted all this R&D money away from factory farming into regenerative practices, which has not gotten nearly the amount of, you know, R&D. Are you certain we couldn't improve the yields of regenerative practices if we really doubled down on it and tried?

Michael Grunwald

And as I said, I've seen areas where regenerative practice — I'm not against regenerative practices. I do think the carbon farming part of it is bullshit. But I'm all for regenerative practices, especially on the grazing side. When I talk about intensive grazing, usually that involves regenerative practices. The regenerative practices seem to increase the stocking rates, and you can make more beef than just — a lot of these conventional ranches, they call it the "Columbus" method. You send the cattle out in the fall and you go discover them in the spring, and that's really inefficient. Now, these regenerative practices require a lot more labor.

They're hard. But, I completely agree. And, I got to push back a little bit on this idea that I'm giving up on meat, I'm giving up on food waste. I'm saying we got to do all the things and the government has to be involved on the research side, on the deployment side, just like it was with energy. Food is probably about 25 years behind energy, but we don't really have 25 years to jerk around like we did on this energy stuff.

David Roberts

Here's yet another angle, a political economy angle. And this will sound familiar from the energy world, which is if you allow agriculture to become an oligarchic business like this, if you allow power to concentrate in a few giant, giant corporations and then your solution to the problems that are thereby created is to restrict the corporations through law and regulation. I think the political economy critique here is like you can't create these powerful, selfish entities and then expect to rein them in like that. That horse is out of the barn. You need to break up the concentrated power here if you want to have any hope of positive reform.

Do you buy that at all?

Michael Grunwald

I mean, this is a long discussion, and I would say it's sort of partly true. But remember, like oil companies, they exist to make a product that's inherently bad, and there's really kind of only one way to do it. You know, it's not like there's a lot they can do. They're just going to fight.

David Roberts

No regenerative drilling?

Michael Grunwald

Now, farming, there's a, you know, farming. You can measure emissions and often the big guys have, you know, they can afford efficiency in many ways and they can afford to do things in often climate friendlier ways than, you know, the guys who are just running a few cows or, you know, just, you know, have a few acres. So, I do think it's not insane to think that. And we've seen some examples. You know, the best example is Denmark. Partly because they've done so much on the energy side, they were suddenly realizing like, "Hey, we're on track for by 2030, agriculture is going to be half our emissions and it's only 1% of our economy."

And believe me, in Denmark, you know, they use more land for agriculture than any other nation except for Bangladesh. So, they are like, the agriculture guys are really powerful there. But they realized they were going to have to come to the table, and they came up with a deal where they're putting tons of money into promoting the kind of plant-based alternatives, but they're also putting tons of money into the kind of things that are going to help these farmers increase their yields and reduce their footprint. And then they are also requiring them to essentially turn about one sixth, a million acres of farmland, back to wetlands. You know, it's unbelievable.

They're going to have a carbon tax on emissions from animals. I mean, this is like, you know, they're doing all the things.

David Roberts

Yeah, they got serious about it.

Michael Grunwald

Yeah, it's Denmark. I know they're the model nation. Right. You know, all that. But like, you know, it's like "you never say never." And I do think, like I always say, that the book is kind of about how we're going to feed the world without frying the world. As if, which makes it sound like it's kind of two different challenges. But honestly, we know how to feed the world and if they have to, they're just going to cut down more trees and make more food. So I think there's like, like getting them to do it without frying the world is really, you know, the incentives, believe it or not, are kind of focused in the right way.

Like, there's, you know, JBS is all about efficiency. Tyson Foods, Archer Daniels Midland, Cargill, these guys, they have actually pretty slim margins and they're happy to work towards approaches that can make more food with less land. And I would add for those big guys in particular, the alternative proteins, that's an option for them to make bigger margins. Even as a lot of these venture-funded startups are having incredible trouble, JBS is still going ahead with a cultivated meat factory in Spain. Cargill has invested in Upside Foods and Wild Type, which is doing cultivated seafood.

Tyson has invested in Believer, which has built a factory in North Carolina to do cultivated chicken. They see this as, you know, whether it's the short-term future or the long-term future, they see it as the future because ultimately they see that animal agriculture, and agriculture in general, can't take over the entire world. Right. And, like we all saw in The Martian, that's going to be a tough place to grow crops.

David Roberts

All right, so we're out of time. But as a sort of final way to wrap this up, I mean, the example of Denmark is poignant, as always.

Michael Grunwald

My sense is we're not quite there, politically.

David Roberts

We're not just a little bit shy of the mark.

Michael Grunwald

I haven't been paying as close attention to politics while I was working on this book, but my sense is that it has not progressed in a really climate-friendly direction.

David Roberts

Well, this is my question. Like, in the US, we seem not only so far from where Denmark is in taking this seriously and putting serious restrictions on these companies. A) They seem more sort of brutally powerful here. I'll never forget when they disciplined Oprah. Remember that? Like, to me, that was so telling. I was like, "My God, there's a force in American life more powerful than Oprah that can bring Oprah to heel. That is power." They seem more powerful here. They seem like they're getting more powerful, not less powerful. They seem like they're getting more corrupt.

The administration is more corrupt and in bed with them. Everything's going in the wrong direction here. So, for the individual, you can make dietary changes; you can give up beef and lamb, that's what you ought to do. You could go further and give up dairy as you ought to do. But that's, you know, I'm somewhat skeptical about the prospect of individual behavioral changes amounting to scaled solutions here as in other areas. So, if I'm engaged in this and I care about the problems of agriculture and the climate challenge of agriculture and I want to go beyond personal behavioral change, what do I do?

Like, on energy, I can tell people a lot of ways to get involved. You know, that's more than individual action but short of federal lobbying. You know what I mean? There's a lot of stuff in the middle I can think of. What is the way to politically organize around this problem? Do you know what I mean? Like, how should people engage in more than individual action?

Michael Grunwald

Well, let me at least make the case since I know your listeners are the energy wonks that I considered myself. I was your people before I took this six-year detour. And so, I guess the first thing I would say is that you should give a shit about this stuff because it really matters. Here's the thing, the next four years are going to suck in the United States for all kinds of climate action, right? But actually, there's a real difference, like with energy, you know, thanks to the Dave Roberts' of the world, and actually, there's probably only one.

So, maybe just thanks to you, we know what to do. We got to electrify the economy and run it on clean electricity. And you know, we're sort of even, you know, Trump aside, we're, you know, we're sort of starting to do it, like not fast enough, but it's happening. And this has been like, this is a story that I used to tell. I started telling it back in my Obama book.

David Roberts

It's happening, just not fast enough.

Michael Grunwald

Exactly. Now, with food, we don't even know what to do.

David Roberts

Right. It's not happening. Because we don't even know what it is.

Michael Grunwald

And a lot of the things we think we know are just not so right. So, it's not like, unlike with energy, Trump isn't going to be repealing all this progress that's been made. Right. This is actually a good time for us to start figuring shit out.

David Roberts

"Can't repeal progress if you don't make any," the guy tapping his head meme.

Michael Grunwald

Exactly, precisely. And this is going to be a good time for us to start to figure out what are these, you know, what are the real solutions, what are the fake solutions? You know, this is stuff that philanthropy, which, you know, if it wasn't just going headlong into just giving money to every hippie who says they're doing, you know, they're going to save the soil. And I should say that there's like, Bezos is funding some good stuff on alternative meats, on reducing emissions from cattle. We really ought to be figuring stuff out and we ought to be thinking at the international level about less crappy global policies that essentially work towards this "produce and protect" approach.

David Roberts

And the one thing we can all take out of this with crystal clarity is that ethanol sucks and should be crushed into the dirt now and for all time.

Michael Grunwald

Can I say one more thing about that? Because actually, ethanol is a perfect example. Remember, a lot of the enviros and a lot of the energy people were all excited about ethanol and all these biofuels because they were trying to solve their energy problems. They were like, "Oh, we'll reduce fossil fuels." The land sector was somebody else's problem. Now, I've spent six years, and the land sector is my problem. It has come to my attention that you energy people, of which I guess I used to be one of them, but when you're talking about burning wood for electricity or running our planes on corn and soy, you are dumping your energy problems on the land sector.

And you shouldn't do that. Like, this is something energy needs to solve its own problems. And then, you energy people should start caring about our land problems too.

David Roberts

There is such a thing as energy abundance possible, and even on the horizon, but there is no such thing as land abundance. Land is intrinsically a scarcity issue. And if you're using it for one thing, you're not using it for something else.

Michael Grunwald

There really is no Planet B.

David Roberts

We're going to get through all the cliches before we're done here. Alright, Mike, thank you for taking six years of your life to wade into this and figure out just how depressing and intractable it is. All kinds of solutions are on the horizon in four years —

Michael Grunwald

None of which you give a shit about.

David Roberts

No, I support them in theory, Mike. It's like, you know what I mean? There are all kinds of good things, things that I support that I don't care about, like oceans. Like, you think the ag people are mad at me. The oceans people really hate me because oceans are definitely super important, and I don't care about them either, really.

Michael Grunwald

Well, I hope your readers at least understand. And it's also fun. The book is fun. It's not dreary like David makes it sound.

David Roberts

All right. It is a rollicking read. All right, thank you, Mike. Thanks for your work, and good luck.

Michael Grunwald

Thanks so much, Dave, and thanks for everything you've done.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, I'm joined by two of California's leading housing champions, Assemblymember Buffy Wicks and Senator Scott Wiener, to discuss their bills to reform the state's notorious environmental review law, CEQA. We explore how a well-intentioned 1970s environmental protection has become a tool for NIMBYs, unions, and even oil companies to delay or kill housing projects — and why the politics have finally shifted enough to make progress possible.

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Text transcript:

A conversation with Asm. Buffy Wicks and Sen. Scott Wiener.

David Roberts

Okay. All right, everyone. Hello, this is Volts for June 25, 2025, the fight to build faster in California. I'm your host, David Roberts. California has become the poster child for the US housing crisis: it is over 3 million units short of housing demand at this point, and that number is growing by about 100,000 a year. It is also in danger of becoming the poster child for larger blue state governance challenges. One reason California is so far short of the housing it needs is that it is difficult, time-consuming, and expensive to build anything there, and one reason for that is the California Environmental Quality Act, or CEQA, signed into law in 1970.

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That law — at least the way that law has been interpreted and expanded since its passage — effectively gives anyone who can afford a lawyer the ability to delay any project they oppose for years. It has been used to block or delay affordable housing, student housing, bike lanes, and high-speed rail, along with lots of plain old apartment buildings.

This year, real CEQA reform is on the table for the first time in many, many years. In the State Assembly, Oakland Assemblymember Buffy Wicks is sponsoring AB609, which would exempt infill housing from CEQA review. In the State Senate, San Francisco's Scott Wiener is sponsoring SB607, which would follow that with a number of additional reforms.

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This topic is, to say the least, controversial among the state's various interest groups. I cannot wait to get into it! I am happy to have Assemblymember Wicks and Senator Wiener here with me today to discuss why this reform is needed, how they have assembled a coalition to support it, and what they hope for California's housing future.

With no further ado, Assembly Member Buffy Wicks, Senator Scott Wiener, welcome to Volts. Thank you so much for coming.

Assembly Member Buffy Wicks

Thanks for having us.

Senator Scott Wiener

Yeah, thank you.

David Roberts

Excited for this. I've been trying to set this up for a while. I know you two are very busy in general, but particularly right now, so I appreciate you taking the time. So, let's start with you, Assemblymember Wicks.

Assembly Member Buffy Wicks

You can just call me Buffy, by the way. Makes it easier.

David Roberts

Thank goodness. So many syllables. Anybody who follows this, anybody who follows California's housing policy, is painfully, and I use the word painfully advisedly, aware of CEQA and has no doubt been involved in many fights over it. But we have listeners outside of California, so maybe let's just start with a couple of minutes on what is the law and how has it come to be what it is?

Assembly Member Buffy Wicks

Yeah, so you know, this law was passed in 1970. It's become a bit of a sacred cow here in California politics. And it was designed really to protect the environment by ensuring that new projects considered environmental impacts and mitigation, which is a very lofty and important goal, especially at that time when we had like orange skies and very, very limited environmental protections. And so, I think the original genesis of it is one that is very noble. You know, it was to stop harmful development. Right. But the statute's breadth and, you know, depth of it has expanded over years and has really allowed it to become essentially, you know, a blunt instrument to stop, in this case, housing production.

But many other things too. Renewable energy projects, public transportation, climate resiliency projects, all kinds of other things. You know, CEQA is required on all projects, even those, you know, aligned with state and local plans. You have to undergo a pretty lengthy environmental review process at the general plan level for individual projects, for special plans. There's a lot of analysis that goes into our projects. And over time, there's been essentially a cottage industry that's formed around CEQA litigation with law firms that specialize in CEQA challenges to stop projects.

David Roberts

And those challenges are tantamount to saying, "You didn't review enough, you didn't review properly, you didn't follow the letter of the CEQA law." That's what those lawsuits are all about.

Assembly Member Buffy Wicks

Yeah, and the result, the effect is that there are years and years and years of delay on many projects. In some projects, you know, you'll have a plot of land that is perfect for development, say it's transit-oriented housing or a place for multifamily housing, and there'll be a lawsuit that's so involved that the developer will finally just throw in the towel and give up. And then that land won't be bought by another developer to develop it out to a project because they know what they're going to face is years and years of lawsuits.

And so, this is the reality of the millions of homes shy where we need to be here in California.

David Roberts

Yes, and it's not just necessarily the lawsuits, it's also just the threat of the lawsuits. Sort of like preemptive defensiveness against the threat of lawsuits. Maybe Senator Wiener — or I guess I'll call you Scott now.

Senator Scott Wiener

Scott is great.

David Roberts

Maybe you could go into a little bit of detail about what are the groups that are filing these CEQA lawsuits and what are they typically using them for?

Senator Scott Wiener

Yeah, so, and I want to just add the last point you made is incredibly important because sometimes the folks who just reflexively defend CEQA, "CEQA can do no wrong. You know, very little needs to be changed about it." What they will point to is, "Oh, only a tiny percentage of projects get sued in court under CEQA. So therefore, there's not a problem." But what you said is absolutely spot on: it's not just about the actual lawsuits. If you know that X opponent of the project has the ability to hire a lawyer or has a lawyer, you're going to be very conservative and err on the side of more and more environmental review to protect yourself from a lawsuit.

So, it really distorts the entire system, even for projects that never end up in court. And what we've seen is, and just to be clear, there's a chunk of CEQA that is absolutely about the environment. You know, when you talk about building some massive warehouse facility in an area that's going to have mega, mega impacts on the community, or putting a big chemical plant somewhere or something that could lead to toxics. But a lot of CEQA has nothing to do with the environment. And so, we see it play out as really all about leverage.

And that's why it's so hard to change CEQA, because everyone who is using the law to exercise leverage to get what they want on a project doesn't want to give that up. So, for example, recently, maybe a year or two ago, the Los Angeles City Council passed an ordinance to phase out oil extraction in LA. That passed, and the oil industry filed a CEQA lawsuit against the city of LA, saying that the city had not engaged in sufficient environmental review — so using CEQA to try to stop the phasing out of oil extraction. We saw recently in Napa, north of San Francisco, where they only have one childcare slot for every 10 children who need it.

There was a proposed childcare center supported by the city, by the county, broad support. There were neighbors who didn't like it because they didn't want a childcare center nearby. They used CEQA and there was a lawsuit. Ultimately, it was resolved, but it might have inflicted a mortal wound on that childcare center in terms of cost and delay. We saw recently a CEQA lawsuit against a food bank in the city of Alameda in the East Bay, a CEQA lawsuit against a Planned Parenthood health care center in San Mateo County. And the list could go on and on and on about CEQA lawsuits that literally have nothing to do with the environment and that are stopping us or slowing down our ability to create things that we need, like childcare centers, like health centers, like food banks, like moving away from fossil fuels.

David Roberts

This wasn't included in your list of anecdotes, but we should say that often, unions, trade unions will file CEQA lawsuits against projects as leverage to push those projects to offer better labor agreements, basically.

Senator Scott Wiener

You see, the building trades that will use to try to get project labor agreements on a project, the hotel workers union has used it to try to have better wages and working conditions for hotel workers. And in a lot of these cases with labor, at times, their goals are goals that I support. I want better wages and working conditions for workers. My view is we should just legislate that as the standards and not do it through CEQA. They're doing it through CEQA because that's the way they can do it. There is another way. My view is, let's just set up good rules and not have every single project be sort of this bespoke, unpredictable process where CEQA can kill a project or delay it.

David Roberts

Right. It seems like a law that is sporadically and inconsistently enforced via lawsuits is not the best way to solve the problem of labor standards.

Assembly Member Buffy Wicks

No, and also, I think another group that obviously, famously uses CEQA are NIMBY groups. Right. And I have in my district, I represent UC Berkeley. UC Berkeley was trying to build housing on People's Park, a park that obviously has historic importance but has become, you know, essentially an open-air drug market. They tried for decades and decades and decades. You know, the local neighborhood group, homeowner groups used CEQA to say that by building housing there, the student noise would have an environmental impact.

David Roberts

Yes, I remember that one. The noise of students being pollution under CEQA.

Assembly Member Buffy Wicks

So, we had to do a bill that passed with flying colors off the floor of both houses to basically say that student noise couldn't be considered an environmental impact. Now, we are building 1,200 units of housing and housing for our unhoused on that land. But it required literally legislation from the state to ensure that.

David Roberts

That's about as close as you're going to get NIMBYs to come to stating their core philosophy, which is just that people basically are pollution.

Assembly Member Buffy Wicks

That was basically the argument. Yeah.

David Roberts

So, before we get into your bills to reform CEQA, maybe we could just talk a little bit about — this is not the first go at reforming CEQA. It's been a problem for a while and there have been these sort of fitful efforts at reform, but they haven't really amounted to anything. Scott, maybe you can talk a little bit about that. These sort of like exemptions here for this and that.

Senator Scott Wiener

To be clear, there has been good work. And actually, Buffy and I have been part of that work. It's happened in two ways. What we've basically done is we have taken categories of projects and said we're either going to just create an exemption, so it's simply exempt from CEQA, or do something called ministerial approval, which means there's no discretion about whether to approve the project or not approve the project. And that means that it's not just exempt from CEQA. It's not considered a "project" for purposes of CEQA. So it's like, literally as if CEQA didn't exist for that project.

And so, we've done that for big categories of housing, whether accessory dwelling units or duplexes or certain apartment buildings, or commercial conversions to apartment buildings, which Buffy did that law. We've also done exemptions for, I authored an exemption for student on-campus student housing. We did one for certain kinds of public transportation and bike and pedestrian projects. There's been a series of these exemptions. And to be clear, exemptions are extremely powerful. It just knocks an entire category out of CEQA. But what that means is that for everything left behind, which is an awful lot of projects, including some kinds of housing or childcare centers or advanced manufacturing or semiconductor plants — the CHIPS Act basically almost entirely skipped over California because it's too hard to set up shop here.

It's been a legislative failure that we've not been able to muster the ability to fix CEQA itself. And so, we get accused of, "Oh, you're Swiss-cheesing CEQA by doing exemptions." The answer is, "Yes, okay, let's fix CEQA itself, which is what we're trying to do with SB 607."

David Roberts

And one other thing I wanted to mention, also before we get into the laws, is this is a dynamic. Because one of the things I want to talk about later, maybe a little bit, is how this has become politically possible. But one of the dynamics that's going on, and Buffy, maybe you could say a little bit about this, is there's been a series of state laws trying to get housing going. Like, this has been a long fight in California trying to get housing going. And at this point now, you've got kind of a weird situation where you've got state laws telling cities they have to do things, and cities basically using CEQA to tie their own hands.

Doesn't seem like a stable legal situation when you have these conflicting laws, basically.

Assembly Member Buffy Wicks

Yeah, we're sort of coming to a head on it, you know, and it again sort of manifests itself in the current housing crisis that we are in. You know, we've done a lot of good work over the past seven, eight years trying to expedite streamlining. And you know, Scott and I have worked a lot on these bills together to require, bring about more accountability, really more enforcement around state law to ensure that our local municipalities are actually adhering to their regional housing allocation numbers — RHNA is what we call it here in California — and putting some teeth on that enforcement.

We're doing a lot towards that end with some of the exemptions that Scott just laid out. Yet, CEQA remains a loophole or a delay that can derail those very same projects. So, that's really the challenge, which is why the reforms around CEQA are so critical. And I would argue, like I view our housing and transit policy as our environmental policy. Right. So, from an environmental point of view, we need infill housing. We should be incentivizing infill housing. We should be incentivizing our public transportation, not making it harder to do those things. You know, not weaponizing things like CEQA to stop that type of housing and that type of transit.

Which is why, you know, Scott and I are working on his bill and my bill and, you know, the reforms that we're doing in this body of work.

David Roberts

Well, talk about 609 then, AB609.

Assembly Member Buffy Wicks

So, AB609 is my baby for the year, my biggest lift. I've got two girls, a four-year-old and an eight-year-old, who I love dearly. And I have AB609, which is like my third child.

David Roberts

Third child, notoriously the most difficult.

Assembly Member Buffy Wicks

Yeah, totally. I mean, my 4 and 8-year-old do give it a run for its money. But essentially, what this bill does is it says, "If this is infill housing that's environmentally friendly" — so we have something here called the Cortese list, which is a list of, you know, industrial lands and others that you can't build on — but if it's environmentally friendly housing and it's infill, so there's already a footprint there; no CEQA, just no CEQA for housing. Whether it's, you know, market rate, missing middle, you know, low income, affordable, whatever it is, no CEQA.

David Roberts

So, this is like a categorical exemption, rather than a —

Assembly Member Buffy Wicks

It's a pretty big, yeah, carve out here on this, and with the idea being that, in fact, we should be bending over backwards to make it easier to build this type of housing. And as mentioned, there's been so many delays. CEQA gets so weaponized for infill housing and often infill housing because it is on a current footprint, which means there are neighbors who object to having housing, multifamily housing in their community, and they use CEQA to stop that housing. So this basically, you know, if we get it passed, which I'm cautiously optimistic, though I choose to live in a constant state of fear and paranoia until it gets signed into law.

It'll be one of the biggest reforms on CEQA, if we're able to get it done this year, that will, fingers crossed, jumpstart the housing that we need. And again, with the idea around — you know, I believe we should have more protections on our open spaces. Part of why we love California so much is that we have this beautiful open space. We should be very mindful of the environmental impacts on that type of housing. But if you're talking about housing on our current footprint, you know, you look at the example on Stevenson Street in San Francisco. It's literally in downtown San Francisco.

It's a massive housing project right next to a BART stop. You know, CEQA lawsuits are, that was on a parking lot, you know, are being used to stop that housing that would then be exempt from that hurdle.

David Roberts

Yes, and we should say, like the housing that gets blocked this way, it doesn't disappear, it just goes out into the hinterland —

Assembly Member Buffy Wicks

That's exactly right.

David Roberts

where it takes much more sensitive land. Is it clear legally what is and isn't infill?

Assembly Member Buffy Wicks

We have definitions of what that is in the bill. And there's, you know, we're using definitions that have been used in other government code, but it has to have parcels on 75% of it. So it's a pretty clear definition of infill that I think we're pretty comfortable with here in California.

David Roberts

And what about people who worry that you've basically like is too broad a brush here that you're going to inadvertently exempt some stuff that needs review? Do you think that the environmental friendliness checklist — whatever, I forgot the name for it — but you think that's enough to sort of vouchsafe environmental quality?

Assembly Member Buffy Wicks

I think so. And I also think, you know, if we're not building projects like 469 Stevenson, which is 500 units of housing on a BART stop, we're going to have to build it somewhere. So to your point, it's going to go out into our open spaces where we're going to then have to build more freeways and more sprawl. And 41% of our greenhouse gas comes out of our exhaust pipes. Right. So those are our choices here. So I think the adverse is the issue, right, that I would fully support this type of housing development versus the alternative in terms of what's better for the environment.

David Roberts

Okay, that's 609. Big exemption for all, basically all infill housing that fits these basic requirements, which is most of it. The other bill is SB607. That's yours, Scott, your baby. This one is a little bit more — it's funny, it's so technical and freighted with everything. But on the other hand, if you actually, like, read what it does, it's incredibly wonky and technical. It does several things. But there's one main thing I want to focus on, which is about how high a hurdle you have to cross to file a lawsuit, basically. Like what it takes to get in the door for a lawsuit.

Right now, the standard is a fair argument. Is there a fair argument that there might be an environmental impact? And I think anybody listening to this will just be like, "Well, I can make up a fair argument for anything." So, there's effectively no barrier at all. If you can get anyone to write down an argument, you can get a lawsuit going, basically. So, it's at this point trivially easy to file these lawsuits. So, what would the bill make the new standard, and what effect would that have?

Senator Scott Wiener

Yeah, there are actually five pieces to the bill, and any one of those pieces, if it were a bill by itself, would be a big bill. So, we make it easier — right now, there is this gotcha provision in CEQA where if there's a CEQA lawsuit after an environmental impact report, they look at the administrative record, which is right now defined so broadly that you can overturn an environmental impact report in court if they neglected to include some tangential email from some employee three times removed who wasn't involved in the decision. So, we narrow the administrative record to be only what the decision maker actually saw, which makes a lot of sense and is very exciting for a lot of cities that get tormented by this.

There's also a provision if you almost qualify for a CEQA exemption but barely miss it. Right now, you have to do an environmental impact report as if the exemption didn't exist. The bill would say, in that case, you only have the impact report would only apply to the piece that you missed, not to everything. So it'd be much narrower. And there are a couple of other things as well. But the piece you're referring to has to do with the legal standard to defend a CEQA decision in court. So right now, when a city, someone comes forward with a project or if it's a public project, the city makes an initial decision, first of all, is this exempt from CEQA entirely?

And if it is exempt, then, boom, you're done. If it's not exempt, then the city has to determine, is there a significant environmental impact or is there no significant environmental impact from this project? If the city decides there is a significant impact, then they have to do an environmental impact report, an EIR. If the city decides that there is not, right at the outset, there's just not a significant environmental impact, then they issue what's called a negative declaration. It's a declaration saying there's no environmental impact, and then that's the end of it. Right now, if you get sued in court, if you do a full environmental impact report and you get sued, the legal standard to defend it is, "Was there substantial evidence? Was there some credible, good evidence supporting the environmental review that the city did?"

And as long as that good, reasonable, credible evidence exists, even if someone disagrees with it, then the city wins, the environmental impact report is upheld. However, if the city issues a negative declaration, in other words, says at the very beginning, we are just determining there's no significant environmental impact, it's almost impossible to defend it in court because the standard is different. It's what you mentioned, a fair argument. Can anyone make a fair argument that there actually was a significant environmental impact? And so, for example, if you, as the city or the proponent of the project, if you have 10 Nobel laureates in the area saying, "There's no environmental impact," and then the opponent finds a community college student who took a semester course in the area who submits a declaration saying, "There is." Then that negative declaration is now overturned in court because someone made a "fair argument."

So, what that means in reality is that cities that will say, "Hey, I don't think there's an environmental impact, we should do a negative declaration." They have to look around, and if they see that there is an opponent out there who might sue, they're going to say, "You know what? We're going to do an environmental impact report, which will take years and a lot of money, because we can't defend this in court, because it's impossible to defend in court." So, what our bill does is it says, "Regardless of what the city's determination was, whether they said that there was no environmental impact, so therefore a negative declaration or an environmental impact report, it's the same standard."

Was there reasonable, credible, "substantial" evidence to support the city's decision? And, like the other changes, it's a significant change in CEQA, and it's a good change.

David Roberts

And so the effect would be that cities would be more inclined to do these negative declarations because suing against them would be much harder?

Senator Scott Wiener

Right. They would still have to have substantial evidence. And I understand that there are environmentalists and other folks who might say, "Well, you're going to, you have some cities that are bad actors and they're just going to say everything is no environmental impact." But if they can't show substantial evidence, if they're just making it up, they're going to lose in court. It's not like it's impossible to defeat that decision. They still have to come forward and show what their evidence is. And if it's bogus, the city's not going to win.

David Roberts

What do you say to people to give them confidence that serious environmental threats, that CEQA is still going to apply, that this is not going to be used to smuggle serious environmental threats, sort of under the wire?

Senator Scott Wiener

I mean, a couple of things. First of all, outside of CEQA, California has very strong environmental laws, like it's protecting clean air and clean water, endangered species. We have really strong statutes. We have strong agencies that issue strong regulations. We have all sorts of regulations they have to comply with. And again, they still will have CEQA, but cities will still have the ability, if they can show that they have evidence, to not go through a full environmental impact report. So, CEQA will still provide protection. It will not be, it'll be much harder to abuse it. But for real environmental harms, people will still be able to use it in addition to all the other laws that California has.

David Roberts

So, you think all these five changes this law would make. The intent is basically to make it more difficult to do these sort of defensive or frivolous lawsuits.

Senator Scott Wiener

Yeah, and I should also mention, we also, of course, have building codes and other just rules that people have to follow. But yes, it will cut down on frivolous lawsuits. But I think we also, beyond that, when we talk about the concept of abundance, which has been a good topic of discussion, and I think there is a lot of work happening around abundance before the word abundance was even coined, just making it easier for people and for government to deliver good things that make people's lives better, whether that's childcare or public transportation or housing or, you know, advanced manufacturing for jobs, et cetera.

We made it so hard that we're strangling ourselves. And so, when we talk about abundance, one of the things that we want is government capacity, the ability of government to deliver good things and to be able to give permits for other people to do that without having to go through an unending process and litigation. And so, part of this, and this is part of the conflict, is having some level of trust in government and public officials to do their jobs and make these decisions. We elect people to do their job, and let's have some level of trust that they're going to do it in the public interest.

And this goes into — there was a great book that came out earlier this year that got overshadowed a little bit by Abundance, and that is Why Nothing Works.

David Roberts

Why Nothing Works, yeah.

Senator Scott Wiener

That was an amazing book and a great history of progressives. How there was a reaction to the sort of centralized, top-down New Deal with some of the abuses by people like Robert Moses, tearing down neighborhoods. And so, the reaction was decentralization, infinite process, so that no one's in charge, no one can make decisions, and everything gets decided in court. And that definitely ended the era of top-down, centralized progressive governance. But it also was the beginning of the housing crisis. It was the beginning of people losing faith in government's ability to do anything. Which gave us the grift of Donald Trump where he said, "Everything is broken, you're being screwed, and I'm going to fix everything."

David Roberts

I'm not sure if you want to get into this or not, but one of the other, the other side of the abundance critique, is that another effect of that situation is to set up this kind of ecosystem of nonprofit groups who sort of are sustained by these dysfunctions or sustained by these lawsuits. They sort of, you know, have built their funding model around stopping things from happening. That's sort of how they show their members or their donors that they're doing things by stopping things.

Senator Scott Wiener

Well, I'll give you an example, and sometimes it's actually really good intentions. So, for example, on this bill, I was talking to a major environmental leader in California, someone who I adore, who I think like is just walks on water, and we partner with them all the time on important environmental legislation. This is someone who is, I think, a little more open-minded about some of these issues. They talked about how CEQA is often used, particularly around clean energy, where they go through an EIR on the clean energy. So, it's clean energy, which we need, and it has to go through an environmental impact report, so it's delayed and it's more expensive. And then they get something called advanced mitigation funding, which they then use, for example, to do habitat restoration somewhere else or something.

And that, if you limit CEQA, it gets harder to do that. My response to that is, we should just, like, have a fee or something that generates those funds.

David Roberts

Doing that via courts is just not the most efficient way to accomplish it.

Senator Scott Wiener

Right. And I said to her, "I want you to have that funding. That funding is important. Let's figure out a different way to do it that doesn't tie up things like clean energy in ways that are not beneficial to climate action."

David Roberts

Right, right. Well, I want to get into a little bit how the politics of this have changed, like why reforms of this scale seem to be possible now when they weren't all that long ago. Buffy, maybe you could talk about the union side of things. Sort of like, you know, as we said earlier, they can get good working conditions with the threat of CEQA lawsuits.

And that's very rational. Like, you know, from the outside point of view, political economy point of view, like, that's a power they have. It makes all the sense in the world for them to try to preserve that power, even though it's not great for the larger public good. So, what are you telling them? What are they telling you? What's their current disposition toward all this?

Assembly Member Buffy Wicks

Sure. So, yeah, I mean, I think the unions are using the tools in their toolbox. Right. CEQA is the tool in their toolbox for leverage. And that's why they use it. That's why everyone uses it. That's why the NIMBYs use it. It's why, you know, I mean, everyone uses the tool that's available to them. And this blunt force instrument, which then the effect of that is, you know, the obvious deficit of housing that we have. And when I talk to the unions, my message is like, "Wage theft is a problem. We have to address wage theft."

Right. We need stronger enforcement. And you look at the construction industry in particular, there's a lot of nefarious actors out there. As some of my friends in the carpenters say, "It's a crime scene in a lot of these places." And I think that is accurate. Right. You know, the wages need to be higher. Like, all those are very valid conversations that need to be addressed. But right now, everyone's using CEQA for that. You know, the California Environmental Quality Act. Right. As labor law, essentially.

David Roberts

And, I'd rather us go through the front door on the labor conversation, say, "Actually, let's pass wage theft protections. Let's think about what a residential wage rate can be," you know, all those different tools in the toolbox that we do with any other type of labor law. We should have that within the confines of labor law.

But why wouldn't they say — and sort of similarly to, like, what they might say to Scott, the environmentalists might say to Scott, like, "Okay, show us that funding, show us that other legislation, and then we'll back off on CEQA." Do you know what I mean?

Assembly Member Buffy Wicks

Yeah, totally. And I think I will also say the unions are not all monolithic on this. I think you've had unions like the carpenters, who I think are way more willing to come to the table and negotiate on what this can look like and what it means. And you have unions who are more, I think, committed to using CEQA in its current status quo, you know, because it's the tool that has worked for them. And I get that. Right. Like, again, if it's the thing that's working for you, you don't want to get it taken away.

But again, the impact is that a lot of the members of those unions can't afford the roof over their head. And so, we have to reimagine how we're doing this here. I would say, just on the question of politics, to me, I'm a Democrat because I believe in government, and I think government can and should deliver for people. And so, as a Democrat, I think it's important that our government is delivering for people. And when you look at the housing crisis in California and the fact that we have almost 200,000 folks experiencing homelessness every single night, and the fact that, you know, we are two-thirds of the state legislature and every statewide office, like, we have to own the fact that, like, we need to fix this.

And the good news is, we are now in positions of power to fix it, and we should do that. That is what we are going to do. But we have to, I think, recognize and granted, it's taken us decades and decades to get to this point, and those were decisions made long before I was in office or Scott was in office. Right. But we have to fix it.

David Roberts

One of the ways that previous efforts at reform have worked around unions is by offering these exemptions to CEQA, they tie them to labor standards, basically. And this is, you know, getting back to the abundance thing. This is what the abundance people call "everything bagel liberalism," which is you have a policy where you're trying to get housing and you attach all these other goals to it, all of which might be laudable in their own right, but you end up with a policy that's sort of unwieldy and nothing gets built. And we should say your exemption for infill housing 609 has no such requirements. It is a plain bagel.

Assembly Member Buffy Wicks

It is a very plain bagel right now. Yes. And I introduced it that way very intentionally because I essentially just wanted to rip off the band-aid and see where everyone came out, you know.

David Roberts

And I'm assuming that unions are upset about it and still opposing, like they haven't changed, they haven't come around on this, basically?

Assembly Member Buffy Wicks

Building trades are opposed to the bill. I am in conversation with the carpenter's union on what that could look like. I'm getting other pressures too, to say, "Okay, well if we're going to give this exemption, then we need to have it have a certain amount be affordable housing." Right. 15% of a project or whatever it is.

David Roberts

Classic bagel topping.

Assembly Member Buffy Wicks

Yes, and so then there's all these other things that come into play, or we have to do mitigation around, you know, environmental mitigations on certain projects, or we have to do this or we have to do that.

So, all that incoming, I sort of introduced the plainest, cleanest version and then sort of seeing, "Okay, who's going to come out of the woodwork with concerns?" Some of which are very valid, some of which we can address, you know. But my response on, you know, like the inclusionary zoning, which is the percent requirement for affordable in a project, is cities can do that already. They have that in their toolbox. This bill does not touch. Should there be a certain amount of inclusionary? Some of my colleagues are going to push very strongly to have inclusionary in the bill, but you have to look at what's feasible.

David Roberts

Let me actually put a marker here because I think that's actually important. City-level inclusionary zoning codes are not affected by this.

Assembly Member Buffy Wicks

Exactly.

David Roberts

They can all still do all the toppings on the bagel they want at the local level.

Assembly Member Buffy Wicks

Exactly right. They can still have height requirements.

David Roberts

You're not prohibiting that.

Assembly Member Buffy Wicks

Right. This doesn't touch zoning. This doesn't touch height. This doesn't touch, you know, inclusionary. Cities can still do that. What this bill does is it says, "CEQA no longer applies to these projects." Which, by the way, CEQA has already been done on the general plan. When the cities are putting together their planning, they're saying, "We're going to have a zone for this amount of housing here. And this is what it's going to look like. This is what's going to be available to be built out." They do CEQA on that on the general plan. They do CEQA on the special plans.

So, it's already been done. It's just saying, "You don't have to do CEQA on this specific project."

David Roberts

Right. Me, this is just my naivete, but why aren't unions swayed by the prospect of lots more construction work, lots more building? It seems like ipso facto, that would be a good thing for the trades.

Assembly Member Buffy Wicks

Yeah, I mean, I think it's a good question. You know, it's what they've used successfully to fight for the things that they believe in, which again, I share those values. But it means that everyone's then fighting, using CEQA to stop the housing that they don't want in their neighborhood or whatever. And so, because it's such a blunt force instrument, there needs to be reforms around it. But it's just the tool that has been useful for them. I mean, it's how they're getting their project labor agreements done. It's how they're able to get the projects they need.

So, I understand the desire, but I think we have to go about labor law in a different way than utilizing CEQA for that process.

David Roberts

Scott, maybe you can flesh out a little bit more how the politics of this have changed. Why is this proving possible now? I don't want us to get over our skis here. It's not written, not done, and signed yet. But like, why is it seemingly — why is it possible now when it wasn't even quite recently?

Senator Scott Wiener

The politics have shifted dramatically, first around housing, but then around other needs as well. I was elected in 2016. Buffy was elected two years later in 2018. And right before I was elected is when there started to be some work happening in the legislature around housing to say "We can't just let cities do whatever they want" because it became a race to the bottom and it gave us this massive housing deficit. I want to be clear. I think it's important not to demonize cities. And I don't just say that because I'm a former local elected official.

I think that there are cities that try really hard, and cities that don't. There are a lot of local elected officials that get it, but feel paralyzed and they don't know what to do. So, around a decade ago is when the work really started to say, "Let's rebalance this, not to get rid of local control, but to have stronger statewide standards to make sure we're meeting our needs, like, around housing." It was hard at first, but I think one of the reasons why the politics shifted is because the housing disaster that had been playing out in places like San Francisco, Berkeley, Santa Monica, and some other places for years or decades started spreading everywhere.

And to the point where even in the Inland Empire and Central Valley, which historically have been the most affordable parts of the state, people were getting priced out. And so, for our colleagues and others, they started seeing firsthand what happens when you don't build enough housing in terms of homelessness, working-class families being pushed out. And so, it really built momentum. We also assembled an amazing coalition, yes, of housing advocates, but also of environmentalists like AARP and Habitat for Humanity, the UC Students Association. Buffy played an instrumental role in working with the carpenter's union to come in an incredibly positive way.

And that was a game changer. They brought other unions with them, like the laborers, operating engineers. So, we built this coalition and then as we started passing more housing laws, we started focusing on other things and said, "Hey, let's make it easier to do this, that or the other thing as well." And you know, we have more and more colleagues that just totally get it. We also have big city mayors that have been supportive. Governor Newsom has been an incredible ally on this work around CEQA, around housing. He's been just terrific. So, it's been just a growing movement and it's working.

David Roberts

I mean, obviously, local city governments are not a monolith either. But are they coming around on this, or do they still largely want this tool in their toolbox?

Senator Scott Wiener

On CEQA, they have — on my CEQA bill, one of our co-sponsors and probably the lead co-sponsor of the bill is the RCRC, the Rural Counties of California. They're one of the lead local government groups. They represent all the rural counties, which is most counties in California. And we have the support from all of the local government groups, the League of Cities, the Association of Counties, because they understand cities and counties, how CEQA ties them up in a knot. And in another bill that I'm doing this year, Senate Bill 79 that upzones for more density around high-quality public transportation, where we have a lot of local government opposition, we now have the city of San Diego supporting it.

We're actively working with another large city that shall remain nameless. And various small — Santa Monica, West Hollywood, Culver City have all endorsed the bill and a whole bunch of city council members around the state. So, we're seeing a shift at the local level too.

Assembly Member Buffy Wicks

And I think what you'll see, I have cities in my district who have been really good pro-housing cities. So, I definitely think it's, you know, cities sometimes take a bad rap and there are definitely bad actors, but there's good actors out there. But also what happens, and I know Scott hears this sometimes too, when you go around California, you have some city council members who are like, "Yes, please keep doing what you're doing because it sort of takes the control out of their hands so that they're not at the tip of the spear at their Tuesday city council meetings, right?" They can kind of say like, "Oh, the state's making us do it." You know, the big bad state.

David Roberts

I can imagine, having experienced local control up close for several years running, that having a little bit less local control might sound appealing to you.

Senator Scott Wiener

In San Francisco, I tell our local elected officials, "Feel free to use me as —" You know, they want to make me, some people in San Francisco make me the boogeyman. San Francisco is going through a big upzoning pursuant to its required, it's a required upzoning. And Mayor Lurie, our new mayor, is doing a great job advocating for it. There was a big hearing on it yesterday and there were all these NIMBYs who came out and they were like, "This is Scott Wiener's upzoning." And I am happy to absorb that. Happy to absorb it.

David Roberts

That is hilarious. I mean, it's true. Well, I did have one other question about opinion on this. I'm sort of wondering specifically — this is slightly orthogonal to the secret thing, but I'm just curious — among people, I think, who are empirically educated on housing issues, let's say the connection between homelessness and lack of housing is obvious and straightforward. But my impression, generally speaking of the general public, I don't know if they make that leap. You know, there's a lot of weird folk theories about what causes homelessness. So I'm just wondering, like, is that argument starting to land?

Is the public starting to make that connection? We need more homes because we've got all these homeless people?

Assembly Member Buffy Wicks

I think so. I mean, I'd love to know what Scott thinks, but people are starting to connect the dots. I think it's because, and especially in the Bay Area, where we've been at the tip of the spear of the crisis for so long now, that people understand the reason why we have such a crisis of homelessness is because it is too damn expensive to live in California. And it's too expensive because it is too hard to build anything in California. And so, I do think there's a through line there. You also have folks who, you know, are older, who have been in their house for 30 or 40 years, raised their kids, and their kids have gone off to college and now they're coming back and they want to live here and they can't live here anymore and they're going to go somewhere else.

And so, you have folks who maybe would tend to be a little bit more in kind of the NIMBY camp who are saying, "Well, wait a second, I want my kids to come back here." And they can't afford the rent because there are not enough homes. And so, I think the issue has changed a lot over the last, I don't know, 10 or so years because the crisis has metastasized to such a level that it's requiring us to take this kind of political change.

Senator Scott Wiener

Yeah, I totally agree. On homelessness, I think people do get it. Although, you have the debate: is homelessness a housing issue or a mental health issue? And that's a toxic debate. And it is largely a housing issue. And of course, there's a mental health component to it. But I think for me, in my conversations with my constituents, it's about homelessness. But it's also like Buffy said, I had an older couple that came up to me about five years ago at a community meeting to say, "You know what, we always hated your housing work and really didn't want more density in our neighborhood. But now our kids are moving to Chicago with our grandkids and you were right."

For people who will say, "My kid has had three teachers this school year because the teachers keep moving away." Or they just say, "My neighbors, I don't have any working-class neighbors anymore. It's only rich tech people who can afford here." No offense to rich tech people, but it's good to have a mix of different kinds of people and so people see it in different ways that really make it come home for them.

David Roberts

Another, I think, instinctive opinion people have, definitely this is on the left. You hear a lot of this from progressive groups, which is that there's something about housing where the normal laws of supply and demand don't really hold and that when you just require more housing absent other controls, you get gentrification, basically. Like, gentrification is the big — and I should say to steel man this a little bit, like in a situation of severe shortage, it kind of is true that any time you make a decently dense area, a lot of people want to live there and the prices do go up.

So, like, you know, empirically, people see that happen. It's not crazy to think that.

Senator Scott Wiener

This is an issue that I've been dealing with for a long time, actually. My initial entry into true YIMBY politics, I had been doing the work, but my first real public thing was when I published a piece online 10 years ago called "Supply and demand apply to housing. Even in San Francisco." And it sort of went a little viral. So, yeah, you know, it's frustrating because we spent 50 years digging ourselves into a hole, not building very much housing and creating this absolutely massive housing shortage.

And then, we hit a tipping point. And so now, we're starting to dig our way out of it. People have this perception, because we've been talking about this for a while, that an enormous amount of housing is getting built and we're still not building nearly enough housing. It's going to take quite some time to dig ourselves out of the hole. But when you have a massive shortage, that explodes the cost of housing and then you build that first or second tranche to dig out of it, that housing is going to be expensive because you still, you're not going to solve the shortage overnight.

And I also try to remind people, yes, the housing that was built a year ago, you call it luxury housing. Well, it's just expensive. But guess what, the flat that was built in 1942 is also super expensive. And one of the best examples that I really like to talk about is that in 2015, there was a ballot measure in San Francisco to put a moratorium on new housing in the Mission District in San Francisco. Their argument was that housing causes gentrification and that over the last 15 years leading up to then, 8,000 Latino families had left the Mission, which was true.

There was enormous gentrification happening in the Mission. Well, guess what? When you look at actual housing construction, the Mission was one of the lowest production neighborhoods in the city. Almost no new housing had been built for the 15 years leading up to 2015 in the Mission. And people were still being pushed out. So, when you don't build housing, that's what pushes people out. But when people see new housing going up and it looks expensive, they get the opposite perception.

David Roberts

Yes, and one other thing, I don't know why this jumped into my mind, but I read one of these letters in opposition to your Transit-Oriented Development Bill. And of course, Volts listeners will, by the time they hear this podcast, have already heard about Washington's Transit-Oriented Development Bill. So they're very trained up in all those issues. But I read one of these letters in response to your Transit-Oriented Development Bill that was trying to make the argument that somehow building more apartments near the transit stops would reduce transit ridership. I don't remember the causal...

It's one of the craziest paragraphs I've ever read. Some of the arguments you run into from people who are just kind of going off their feelings on this stuff are really, really crazy.

Senator Scott Wiener

Well, what that argument is, is that if you are building anything other than 100% subsidized low-income housing near transit, wealthier people are not going to ride transit. Low-income people are more likely. And yes, low-income people might be more likely to ride. But first of all, as we can see in San Francisco, a lot of middle-class and upper-income people do ride transit. If you provide good transit and people can walk to it, they'll ride it. But second, the idea that that is somehow worse than having it surrounded by single-family homes where only like 10 people are able to actually walk to the transit station is just absurd.

David Roberts

And those people are wealthy too, because no one else can afford those single-family homes.

Senator Scott Wiener

It's called overthinking a problem.

Assembly Member Buffy Wicks

You also hear from the left the idea of, "Well, I support housing, but only 100% affordable because that's what the need is." And I'm like, "Yes, we need 100% affordable housing, but we're not going to subsidize our way out of this problem." We need a missing middle market rate and an "all of the above strategy," like a yes to 100% affordable, but also the missing middle market rate. Because I have teachers in my district in Oakland, you know, they make too much to qualify for subsidized housing, but they can't afford the current market rate. And so the realtors tell them, "Drive until you qualify, drive east, you know, two hours, buy a house there, spend all that time commuting because you want to teach in the district in which you grew up." And that's the choice they have to make.

David Roberts

So, before we get past this, actually, Buffy, maybe you could talk about where these bills, 607, 609, are in the legislative process, because there's some significance to this. We were discussing whether the governor was going to support these, and it seems he has. So, may you explain, like, what's happening with the bills?

Assembly Member Buffy Wicks

He announced in May during what's called the "May Revise," when he's going over his budget goals, that he wanted both these bills in the budget to be voted on imminently.

David Roberts

So that just means they become part of this larger bill?

Assembly Member Buffy Wicks

Exactly. Like, we'll have a housing, what's called, budget trailer bill. So, these would live in that. The nice thing about putting them in the budget is that they go into effect immediately and they have a higher likelihood of success. You know, the governor's basically blessed these bills. So, we're in negotiations now. Separately, we have, you know, I have the bill that's still a policy bill that is sitting over in the Senate. I got it off the floor of the assembly, I think, 67 to 0, which was pretty shocking, actually. Talk about the politics changing on this, which I think, again, just goes to show that there's a real desire to actually kind of fix the problem here.

But, you know, fingers crossed, we got these in the budget here soon and off to the governor's desk.

David Roberts

That means they don't go through the typical committee process, too. Because it's often these committees where these things die.

Assembly Member Buffy Wicks

We have, you know, mine has gone through Scott and my bill has a little bit of a different place where they are right now. But they've gone through committees in their original houses. So mine went through natural resources and housing. Scott's, yours went through... Remind me, again, the committee.

Senator Scott Wiener

It was environmental quality and local government.

Assembly Member Buffy Wicks

Yeah, so they have gone through some committee review process, and then the governor made the announcement that he wanted to see them in the budget. So, we've been, you know, we're both, you know, negotiating on our bills, trying to get them in good places so they can end up in the governor's budget.

David Roberts

And if they're in the budget, the likelihood of passage is high.

Assembly Member Buffy Wicks

Very, very high. Exactly.

David Roberts

You got it. You've got to pass the budget.

Assembly Member Buffy Wicks

That's exactly right.

David Roberts

Okay, so that seems like a good sign, too, that Newsom's on board. So, I'm sort of curious, you know, Scott, you're talking about this coalition that's sort of been building over years and kind of building success upon success. It's very cool to see, really, that happening across the country in the YIMBY movement. I've sort of been wondering, kind of whether layering the abundance thing on top of the YIMBY thing is like, "Do we want that chocolate on our peanut butter? We're doing so well already." Maybe, don't mess with success. I don't know how you feel about it.

Senator Scott Wiener

No. To me, YIMBYism is a subset of abundance. It's one form of abundance, and it was maybe the more original, high prominence version of it. But abundance is taking YIMBYism and just applying it to a bunch of other areas and also talking about government capacity. So to me, the two dovetail beautifully, and I think it's important to have both.

David Roberts

So, this coalition that's been growing now, and as you say, you're moving from these sort of, in some sense, from kind of what, some pretty piecemeal sort of very focused reforms to bigger, bigger things, structural things, CEQA being the obvious example, the sort of like, underlying structural thing that was affecting everything else. I'm curious if you have Scott or Buffy, sort of like, other targets in mind. There's the, of course, the notorious Prop 13, which is, of course, the ultimate structural, you know, problem for California, as far as I've heard. There's no way to get at that.

But, I just wonder if you have other targets after CEQA, these sort of big things that you're trying to think about moving.

Assembly Member Buffy Wicks

You know, I did a select committee on permitting reform last year.

David Roberts

Oh, yeah.

Assembly Member Buffy Wicks

And, you know, it was a bipartisan group. It was bicameral, even though I guess it wasn't supposed to be. I got in trouble for that, but I invited Scott along to be a part of it.

Senator Scott Wiener

Thank you.

Assembly Member Buffy Wicks

Yeah, and we had hearings across the state. We did, I don't know, about 150 stakeholder interviews. And we looked at housing permitting issues, but also renewable energy. You know, I was down in Palm Springs and we did a hearing. We, you know, this is one example, a transmission line 12 years in the making, 11,000 page EIR, 70 permits through 28 agencies for one transmission line.

David Roberts

Good Lord.

Assembly Member Buffy Wicks

You know, and I remember a part of the panel was the solar industry. And I said, "Why are you guys even operating in California?" And they're like, "We don't know. You know, like, Texas is building twice the amount of solar as we are here." You know, so, renewable energy, climate resiliency, we have to do a lot. We're going to compete with and have to contend with sea level rise. And so, even just building the resources for that and addressing that, fire mitigation, and all the forest work that we need to do, all of that stuff requires CEQA and many other permits.

It's not just CEQA, by the way. There's a whole permitting regime on any of these things that take years and years and years. And so, it's really a larger scale issue that we have to fundamentally address. You can't just go in, Elon Musk DOGE, and take a chainsaw and, like, whatever, all high on ketamine, trying to fix the problem. Like, it's like you have to literally, like, you know, have so many different nuanced conversations and understand the processes and how you can stitch together a better process for this to actually serve your constituents and build the modern California that we need.

David Roberts

Yeah, you'd like your deregulation to be thoughtful, just like your regulation.

Assembly Member Buffy Wicks

Right, exactly. And with environmental goals in mind. I mean, I view this as the right environmental policy to actually do the CEQA reforms that we're talking about. You know, it's not antithetical to it. It's to serve that interest of having the environment work for us in a way that is how we live in California in the year 2025 and beyond.

David Roberts

All right, well, just so I don't miss any, are there other bills up right now that are of interest on the housing front? Scott, you mentioned SB79, which would be the Transit-Oriented Development. Are there other big pieces currently floating around?

Senator Scott Wiener

That's the big housing one for me. We're also doing a bunch of work trying to expand and make permanent a big CEQA exemption we gave to light rail, rapid bus service, bike, and pedestrian. We tried to do a permit streamlining bill on heat pumps this year. It faltered, but we're likely going to try again next year. And then, I have a bill to try to expedite permitting on rail and public transportation projects that have to get a million permits from different jurisdictions and utilities and get tripped up, such as high-speed rail, to try to expedite that permitting process so that it doesn't get gummed up.

Assembly Member Buffy Wicks

And I've got a bill to make it easier to do solar on fallowed ag land that no longer has water to resource agricultural needs, which is complicated, but we're working on that to see if we can expedite some more solar. And then, you know, coming out of that select committee, we put together a 22 bill package called the Fast Track Housing Package that includes 609 and 607, but also a bunch of other things like, you know, a universal application that cities have to use for housing projects and things like that to make it easier.

Senator Scott Wiener

And speaking of that work, I actually am late for a very, very big coalition meeting on one of those housing bills.

Assembly Member Buffy Wicks

Good luck, Scott.

David Roberts

Well, we'll wrap it up. I really appreciate you two coming on. I really appreciate this work and I appreciate all the work you've done on housing in California. It's so needed and so important right now. So, thanks for taking the time, you guys.

Senator Scott Wiener

Thank you.

Assembly Member Buffy Wicks

Thanks, David.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, Rep. Mike Levin and I discuss the “Big Beautiful Bill” that raises energy bills, kills 830,000 jobs, and gifts China the next industrial revolution. We unpack the fossil-fuel cash behind the carnage, the paradox of red districts cutting their own subsidies, and the optimistic playbook — centered on transmission and real climate economics — for the next Democratic majority.

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Text transcript:

David Roberts

Hey, hey, hey, everyone. This is Volts for June 20, 2025, "Representative Mike Levin reflects on the Republican budget bill." I'm your host, David Roberts. When I was in DC for the Canary Media event a few weeks ago, I had a chance to stop by the Rayburn House Office Building and chat with Representative Mike Levin, who represents California's 49th district.

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Levin is a key figure in the Democratic caucus, often seen in the company of previous Volts guest Sean Casten, with whom he forms a kind of dynamic clean-energy duo. Together they are authors and sponsors of the Clean Electricity and Transmission Acceleration Act, which is the House Democrats’ comprehensive answer to the problem of permitting and building long-distance transmission. (I talked with them about the bill on the pod, early last year.)

They are hoping to reintroduce the bill next session when permitting negotiations start up again in earnest.

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In the meantime, Levin is understandably disappointed by the dismal state of the Republican budget bill, and the cowardice of the many House Republicans who know full well that the bill will hurt their districts and voted for it anyway. We talked over that bill, the grim state of energy politics, and some reasons for optimism looking forward.

Mike Levin

Honored to have you here.

David Roberts

Awesome. Yeah, so I mean, I want to talk about the bill. I mean, in a sense, being in the minority in the House of Republicans is a thankless life, even relative to other democracies, really. The conventional wisdom going into this is: Johnson's got a one-vote majority, there's lots of IRA money flooding into red districts. There will be lots of people who want things, and because there's a one-vote majority, any one of them could sink the thing. So, Johnson will have to — either it'll be very, very difficult to do anything or he'll have to make a bunch of compromises.

That theory of the case turned out to be dramatically wrong. The bill was a total sledgehammer with very little nuance, and they all voted for it. So, I guess my first question is just, what was wrong about the political theory of the case? What did the conventional wisdom get wrong? What did everybody miss?

Mike Levin

Well, I think a lot of what I understood about politics before 2016 has been challenged, and even more so now than ever, because even with Trump 1.0, you did have a modicum of independence of certain members of the House and Senate Republican Conference. And now you have such a fealty among the rank and file members. Whether it's fear or whether it's a natural embrace of the policies, we can debate that — probably some of both. But just like you, I felt that the conventional rules, when you see what $320 billion go out the door and $250 billion of it go to the red districts, you would connect the dots and say, "Surely these members are self-interested enough where they're going to recognize the tremendous damage that gutting the bill would do, gutting the IRA would do."

And that ultimately wasn't enough of an impetus compared to the fear of not being seen as sufficiently loyal to Trump. And so, I would say that there was nothing incorrect in the analysis of the impact of the bill impacted the IRA on the red districts, on the red states, on the normal course of business that members of Congress want to do right by their constituents and their communities. But at the end of the day, they decided not to draw that line. And it's interesting to me, you know, the political oxygen on their side was around Medicaid to a certain degree and SALT.

And I think about, you know, those members that were open-minded and interested in working with us to at least improve the wind down of IRA, the Garbarinos and the Ciscomanis and the rest of them. At the end of the day, they decided to go with Trump, consequences be damned. And I know this has been discussed a lot in the context of Juan's district and Juan is a friend of mine, but he has the Lucid Motors plant out there in Casa Grande, Arizona, and that's a big job creator and a really important EV company and just didn't seem to move the needle enough in his mind to overcome the fear of voting against Trump. And I try not to be too judgmental of my colleagues. You know, I think that in the Senate there are some that are good friends.

John Curtis is a good friend of mine. I was just in touch with him the other day. He wrote, I thought, a very good op-ed in one of the Utah papers. But even in that op-ed, there was no red line. There was no statement to the effect of "I will not vote for the Big Ugly Bill." Big Beautiful, they call it. I say Big Ugly Bill. They will not vote for it unless these more, you know, draconian aspects are removed. Unless it, you know, doesn't kneecap the IRA provisions.

David Roberts

Well, a couple of House guys did say red line. Like a couple of them said the words "red line" in the newspaper and still voted for it. Who was it? One of them, maybe it was even Garbarino said "The EV tax credit is a red line for me," one of them was literally quoted.

Mike Levin

They said "red line?" So interesting. Yeah, we didn't know what happened, decided to be somewhere else.

David Roberts

But the one complication to that theory is that they were, for instance, going to put a provision in there to sell off national parks. And Ryan Zinke stepped forward and said, "I will not vote for this bill unless you take that out." And they took it out. So the dynamics seem to still exist. It seemed like the power was there if they wanted to exercise it.

Mike Levin

I actually give a great deal of credit to folks like Joe Neguse because during that 22-hour rules committee hearing, the knowledge and awareness of that provision were highlighted by Joe and I think there were a lot of members. Frankly, the way the bill was rolled out was disgraceful. But you know, in the dark of night, they are trying to read provision after provision. The Rules Committee gets in at one in the morning and they're trying to do all their homework all at once as they're hearing from members, as they're ultimately listening to members' amendments.

And you know, I give them great credit for highlighting that. I think that's one of the reasons it got fixed. I tried to go in there with an amendment to say "Nothing in this bill will raise your energy costs." Because the President ran — all those House and Senate Republicans ran on the idea last November, the idea that they're going to lower costs and this bill does the opposite of that. So I thought what I had was a fairly benign amendment. Virginia Fox disagreed. But at the end of the day, we do know from all independent analysis that this will raise energy costs substantially.

I think the number is $415 a month by 2035. And then there's a tremendous missed opportunity economically for districts all across this country. 830,000 jobs, a trillion dollars in lost private investment. I think there's something like $522 billion in money to be invested right now, today, that is on hold because of what the Republicans are doing. 62,000 jobs that aren't going to be filled today because of what the Republicans are doing. That's real-world consequences.

David Roberts

And killing the manufacturing tax credit. It's just, this is inexplicable to me. It is an explicit, repeated goal of the administration to stoke domestic manufacturing. It is what they say they want.

Mike Levin

I was shocked by how broad it was across the board. You know, we were hearing, I remember a few days before, phase out in 2031. Transferability, construction not going to impact certain sectors the same way. And it just didn't go down that way. And the way I think things happened is you had a group of people who are completely focused on Medicaid. So they took out FMAP and per capita caps, which were the two big ways they wanted to make even worse cuts to Medicaid. And they focused instead on what they call "work requirements" — it's more onerous than that. And then you had a lot of people that were focused on SALT. And I was in that bipartisan caucus working on trying to increase the SALT cap.

And actually, where they came out was not inconsistent with what I thought was reasonable, which was a forty thousand and a half million dollar income limit. Very consistent with our bipartisan discussions over the last number of years. But they put all their eggs in those two baskets. And that meant that at the end of the day, the House Freedom Caucus had to be able to extract something in return. And they went after the clean energy tax credits as something they could extract in return. They say the "green new scam" tax credits. So they needed a win and Mike Johnson needed a win to sell to the far right.

The clean energy tax credits became the scapegoat.

David Roberts

Yeah, I mean, I guess the lesson is not so much how this or that provision or this or that technology fares over there. It's just that in general, they don't care about that subject as much as we perhaps thought they did.

Mike Levin

They certainly don't care, insofar as wanting to do anything productive. But they do want to show that they're pushing back against what their base perceives as being some sort of, you know, outrageous agenda, when at the end of the day all we're asking for is to be able to accelerate the transition to a cleaner future, a more sustainable future, a more cost-effective future. And that's, I think, the huge disconnect there. The members, a lot of them know based on where the jobs, where the factories, where the economic development is occurring, they know that they're dead wrong when they go out there and say these things.

But it's catnip for their base, and it's sad. And you know, at the end of the day, I look at it as somebody who grew up in an area with smog alerts all the time, dealing with air pollution in Southern California, knowing that when the state took steps, we moved things in the right direction. My kids can now run around the track more than I used to without their lungs burning. I think all this is good; decarbonization, electrification is good, necessary, and important. And it's going to happen regardless of what my Republican friends do over the next couple of years here. Things are moving in that direction.

It's just a matter of whether we are going to make the smart investments so that America leads, or are we going to be using technologies that are developed in India, China, Europe in the coming decades? We're on the precipice of losing this industrial revolution, which I think would be an absolute travesty and totally preventable because we've got such great intellectual capital and all the rest right here.

David Roberts

I guess the disturbing thing is that, you know, they're voting in some way or another to kill jobs in their own district, to make the air dirtier in their own district. And they have to believe that those tangible consequences are not as bad as what they would say on Fox News about them. You know what I mean? That what the Fox News universe is more real to them in some sense politically than the real world.

Mike Levin

It's the Fox News universe, and it's also the fossil fuel industry. During the campaign, this has been discussed a lot, but Trump was at a meeting with all the oil executives and he said, "Give me a billion dollars for the campaign and you can do whatever the hell you want." Of all the promises that he's broken, that promise, he's more or less kept because the fossil fuel industry gave about 550 million to him and to other Republican campaigns. In turn, he really has done whatever the hell they wanted to do. We're now five months into this administration and it's already been the most anti-environment administration that I've seen.

And I'm deeply concerned. He's surpassing only himself, by the way, in being the least environmental president.

David Roberts

It's funny, you know, as you say, they're going after the energy stuff to get revenue, basically to say, "Hey, we're getting all the revenue we can to the Freedom Caucus people" except for they lowered royalty rates so that revenue and they killed the methane fee. So, we can do without that revenue. Medicaid is one thing.

Mike Levin

So, I thought Elon's arguments, by the time this airs, maybe there'll be plenty more developments between Elon and President Trump. But one of Elon's arguments straight through has been, "You can go ahead and end subsidies for electrification, just end it for the fossil fuel world as well." We've been subsidizing fossil fuels for well over a century and we subsidize every gallon of fuel that we buy. We subsidize every time industry extracts — I mean, this is constant subsidization. When I started in Congress, I had a very simple question for the Congressional Research Service. How many billions of dollars is it a year?

And they couldn't tell me with a straight answer, but they told me probably more than $20 billion a year. Realistically, more than that. What we're talking about for the clean energy industry is really a drop in the bucket for the initial capital expenditure that you need to build out the infrastructure to lower costs over time. This isn't rocket science. I know that it can be done cost-effectively because it's been done around the world cost-effectively. A number of us are going to try to go to COP later this year, COP30. We were just meeting with experts from Europe, from Asia, and from the international climate community.

And what they were saying is that today, China manufactures between 70 to 80% of EVs, 70% of wind turbines, 70 to 80% of solar panels. Again, the question for us is whether we want to destroy any opportunity that we have to compete with them, that we had to compete with the rest of the world. I think that President Biden's administration and the idea that you want to shift the manufacturing of clean energy to this country was the right thing to do. A shift in industrial policy was a big, bold initiative, but we were able to do it with the IIJA, the Infrastructure Law, with the IRA.

And in the case of those two laws, I'm proud of what the work product was. And we were so irresponsible to just have the thing funded with red ink. We actually tried to raise the revenues for those efforts. This I've seen a lot in my seven years doing this and a lot before, you know, evaluating, analyzing a lot of policy. And this is the most irresponsible and reckless bill that I think I've ever seen.

David Roberts

Well, it's funny. A lot of the House Republicans who voted for it now subsequently have been quoted in the newspaper saying, basically, "This bill is terrible. I sure hope the Senate fixes it."

Mike Levin

Which is a really lousy way to approach the job.

David Roberts

Well, your own colleague Sean said when I interviewed him a month ago, I'll never forget it, "Nothing gets better in the Senate." That's kind of haunted me ever since.

Mike Levin

Things change in the Senate, but they don't often get better. I will say I'm hopeful that you do have people like John Curtis, and if John is listening, "Man, stand up for what you know to be right. Stand up for all those jobs in Utah. Stand up for a clean environment." Because he's a reasonable and thoughtful person. There are others as well.

David Roberts

Well, Tillis. Tillis is up about the credits. I mean, there's probably like five or six who have said something or other. But, you know, I interviewed Martin Heinrich last week at our event and I was asking about the same thing, and, you know, he's like, "Well, you know, the House members had power and they elected not to use it. You know, the members of the Senate have power, too, but I genuinely don't know if they're going to..." Like, again, we're sort of the same thing. Like, do the laws of politics still apply?

Mike Levin

The basic theory of the case has changed substantially under Trump, but I think Trump is an anomaly. I don't think that the basic fundamentals of members of Congress voting in their own economic interests, or the district's economic interests — maybe some are voting in their own personal economic interests, that's another story. But voting in the interests of their districts, that has held. And that has been, I think, by and large, a good thing for this country for decades. In every nascent industry, our investment in research and development, deployment of every new industrial revolution over the last 250 years, has worked out quite well for this country.

And this would be the first time that this country decides from the top on down — now it's one party making this decision — that we're going to let other countries eat our lunch. And that, to me, would be such a travesty. Of all the dumb things that this administration is doing, that might be the dumbest of them all, that and gutting funding for basic science and research.

David Roberts

Yeah, I talked to a friend whose theory is that the US oil and gas industry has sort of come to terms with the fact that they're on the way out globally, and their strategy now is just to wall off the US and sell as much in the US as they can until the very end. So, keep heat pumps out. So, are you, I mean, I don't know how much influence the House has, House members have over the Senate, but I don't know if you are pushing Senators to make particular changes.

Obviously, like, on the broad strokes, it's bad. It's going to be bad, but there are changes. There are changes in the fiat language, the timing, and the construction date, all that. Are there particular things that you are trying to push senators to change?

Mike Levin

Well, I don't know the internal machinations that my colleagues in the Senate are having. But, you know, they have the same interests, those like John Curtis that know the impact of these policies, they know the different levers and what might be possible. So, I don't want to get in front of any of those discussions. But I will say that it's all about predictability. It's all about the reassurance to the people developing those projects that if they actually expend the capital and start the planning and preparation, they can get shovels in the ground and have that predictable rate of return.

And the tax credits are a big part of that. Also, the transferability of those credits.

David Roberts

Why did they kill that? It seems like sadism. Like, I don't understand what the...

Mike Levin

I think that the Freedom Caucus said, "We want to just end all of it as soon as possible. End it yesterday. Anybody that's thinking about doing one of these projects, kill it in its tracks." It's so wrongheaded and backwards because it benefits their district. As I've said, 70, 80% of that money is going to the red districts. But in some ways, we're sort of in a post-truth Congress right now. And again, I think that this is an anomaly. I have to be able to go to bed at night thinking that it's an anomaly, that we're going to come back to some semblance of common sense and where truth, facts, and evidence actually matter for our institution.

This is a great institution. People come from all over the country. They vote and they voice the interests of their constituents. Then they turn right around, go back, and they listen to those constituents. One would hope that facts, evidence, what we're seeing and hearing from our constituents, still is worth something.

David Roberts

Well, another part of conventional political wisdom is that members of Congress are jealous of their own power and prerogatives. And it just looks to me, and the American people, that the whole institution is just, well, being worn down.

Mike Levin

Yeah, I mean, this is super personal to me as a member of the Appropriations Committee. The big reason I fought to want to be on the Appropriations Committee, which took me six years to get there, is fundamental to the Congress is the power of the purse, the ability for us to not only authorize programs but then appropriate the funds. And that's so important to our districts, it's so important to our constituents that we're able to fully fund the priorities that we have. And I'm on the Energy and Water Subcommittee. So, I have jurisdiction over things like the Department of Energy, the Nuclear Regulatory Commission, the Bureau of Reclamation, the Army Corps of Engineers, all these different agencies.

And we sweat the details over making sure that the funding actually gets to where it needs to go. And I have now seen for the first time in recent history, and I've asked people who've been here a long time, like Marcy Kaptur is the ranking member of that subcommittee, who's been in Congress since the late 80s, longest serving woman in the history of Congress, and she has never seen anything like this either, which is a total abdication of the Appropriations Committee and the majority members of the committee to defer to the Office of Management and Budget and the President to do whatever they want to do, to cut whatever programs, cut whatever funding.

David Roberts

Defer to Elon Musk, who doesn't even have a — who isn't even anything.

Mike Levin

We see how well that worked out. But no, you're absolutely right.

David Roberts

But, you heard members of Congress were complimenting Elon Musk for going in illegally, basically hacking parts of budgets. And I was like, "But that's your job, you're complimenting him for stealing your job."

Mike Levin

Correct. And you know, if we wanted to look at a reasonable way to go about this, the Clinton administration in its first two years had the "Reinventing Government" initiative. That was a reasonable way, in consultation with the Congress, to figure out a path forward to reduce government spending or reduce waste, fraud, and abuse, which we all, I hope, want to reduce waste, fraud, and abuse in this institution. This was a "ready, fire, aim" approach where you put a bunch of 20-somethings in. And I saw it from a couple of angles. One, the National Nuclear Safety Administration going in and firing the people with the expertise built over decades of how to safely handle the nation's nuclear weapons.

David Roberts

Can you imagine, as a 22-year-old, having the — whatever that is — to say, "I think I get this better than you guys."

Mike Levin

It's at 22, you don't know any better. But the reality is, even my Republican friends realized how stupid that was and they went back channel to the Office of Legislative Affairs and said, "Hey, you got to hire these people back." Now, of course, they couldn't find their records, the personnel records, or their emails or their phones to be able to figure out how to contact them. The other is with the VA. It is insane to see what they're doing going after VA and you can really go down every single agency to see what this administration has done.

They canceled scores of contracts, and the 20-something engineer was just quoted as saying, "Well, I wouldn't actually recommend that you follow my code." It's like he brings up the episode of The Office when Steve Carell sees the GPS is going to drive him into the lake. So, he drives into the lake. He said, "Well, the GPS made me do it." So, this young man didn't actually think anybody was going to follow this code, but then they did. Then, they cut all the programs arbitrarily. And of course, the AI had a hallucination into saying programs that were $35,000 were $35 million. It's insane.

David Roberts

Yeah, it's hard to know what's going on. Let me ask you about a couple of energy-specific things. So, one of the big X factors that has entered the energy world recently is AI, the need for data centers, just the need for lots more electricity really quickly. And that's kind of shaken everybody up. It's brought a new voice in that wants new electricity that isn't "greens" or, but I mean, it's companies with big money to bring to the table. One of the things Elon said in his tweets before, he said all the rest of it and the rest of it got all the attention.

But the interesting original thing he said was that if you are killing solar, there's no power source that can grow fast enough to meet AI demand than solar. And I think, like Republicans, have it in their head that there's some essential intrinsic mismatch between solar and wind and data centers. So the one doesn't apply to the latter. So, do you feel like your colleagues have a good understanding of that dynamic? Just the fact that if you want fast power — nuclear's slow, gas is, the gas supply chain is choked out to 2030.

Mike Levin

Coal's not going to get us there.

David Roberts

Like, if you want it fast, it's wind and solar, or virtual power plants, or something like that. Do they get that?

Mike Levin

No, the short answer is no. So, we had every month the Library of Congress, assuming the Library of Congress hasn't been taken over by new people, we do a monthly dinner. And one of the speakers was Eric Schmidt, who wrote a book called Genesis about AI. And he brought up this whole data center point and he made a similar point that you're making. But the Republicans in the room, somebody had asked a question, you know, if we had to undermine our climate goals in order to meet the demand for AI, and you know, Schmidt's answer was, basically, you shouldn't have to undermine your climate goals, but that the trade-off would in fact be worth it because AI will in fact solve the climate crisis in his view.

So, I thought it was a very interesting discussion, but the basic premise that is fed by the American Petroleum Institute, lots of other people, that the only way forward is with good old all-American dirty fossil fuels and all this other stuff is a pipe dream and you're never going to be able to achieve any sort of scale. And the reality is that it's just not so. If you look at any of the independent analyses out there, I lean a lot on Jesse Jenkins' work at Princeton or any of the work out of Stanford and the Doerr School. We desperately need to dramatically increase the amount of wind, solar, and everything else too, by the way.

Maybe not coal, but we need lots and lots of electricity to meet these new demands for things like AI and decentralized finance, which are increasingly becoming a big part of our world. And we also need a major upgrade to our transmission infrastructure.

David Roberts

Yeah, I was going to ask about that too. It is part of the same, kind of, part of the same discussion. And it seems like somehow the Republican Party has found its way into opposing new transmission. How?

Mike Levin

I don't get it.

David Roberts

What's the dynamic there? Do they think that they're defending fossil fuels by doing that?

Mike Levin

Yeah, if you see a transmission line as a threat to your fossil fuel job, that creates a false dichotomy. But that seed has been planted by the fossil fuel executives and by the industry and by the lobbyists, frankly. I think the other dynamic that I worry about, Ezra Klein, Derek Thompson wrote a great book, Abundance. I've read it, I thought it was excellent, and I marked it up. And one of the passages I marked up basically is that we cannot undermine the solutions that we need for climate, that we have to build lots of stuff.

But any trade-off, and a trade-off is very difficult — I'm paraphrasing here — any trade-off here is very difficult, but a trade-off that undermines our progress on climate is not a trade-off worth making. And so their point is, we need to build more transmission and that we have to do it as quickly as we can. But also, and I spoke with them, I said, "My concern is that Republicans will embrace that lexicon and use abundance as an excuse to build a fossil fuel infrastructure."

David Roberts

You're not the only one worried about that.

Mike Levin

It's just the same. I worry when I hear about we need transmission modernization and it's under the guise of permitting reform that we're going to do lots of stuff for the oil and gas industry and maybe throw a bone to transmission when the real problem is transmission. The other premise I reject is that you have to fundamentally undermine decades of bedrock environmental law in order to build transmission. I think we need to streamline, modernize, you can call it all of that. But my experience tells me that there are other factors at play, too. When we've gone and built clean energy projects, there are a whole host of things, everything from your local statutes on the books, your local community opposition, your state interconnection policy.

So, it used to take years and years to get a simple project through in the state of California, but it wasn't because of CEQA or NEPA, often. It was because of the antiquated interconnection queue. So, I was part of a group way back when to try to improve that. But then, I had this crazy idea to run for Congress. So, I'm not boots on the ground there anymore, but for me, that's as big of an issue.

David Roberts

So you don't think the provision in the bill where you just pay, just pay to get past the whole thing, you don't think that's the reform we need?

Mike Levin

You can call it what it is. Well, it's the reform if you just want to, you know, run afoul of our environment and build whatever you want, wherever you want, consequences be damned. And yeah, it'll lead to building stuff, but it'll also lead to a whole lot of problems with public health and safety. And there's got to be a balance.

David Roberts

Did you support the bill in the previous session? People differ about why it didn't make it over the finish line, but the permitting sort of agreement. Were you on board with that?

Mike Levin

If the finished product had come to the House, I would have voted for the compromise. There were certainly parts of it I didn't like, but the transmission provisions that they finally landed on, and you know, we were involved to the extent we could be involved over on this side, I thought were quite good, quite constructed. You know, obviously Barrasso could not come to an agreement with Manchin and the whole thing died just before Senator Manchin left. I hope that we can pick up the pieces of that and move in a constructive way. But that doesn't mean giving away the farm to the fossil fuel industry so we can get, you know, one or two things on transmission.

David Roberts

Well, I think the sort of abundance of take on this is that if you just make everything easier, clean will win.

Mike Levin

Yeah. Okay, well, stop subsidizing fossil fuels. Fossil fuels already have it easier. Right. All we've asked — so I've been here seven years — all I've ever wanted is to level the playing field. To the extent you give clean and renewable a subsidy or a tax credit or whatever it may be, it's still going to be less than what we give to that conventional energy. And that hasn't changed. And in fact, now it's worse than it's ever been. There's no acknowledgment of that, by the way, from many of my Republican colleagues. You know, it's really, it's become so politicized and so polarized and a lot of it has to do with the right-wing media ecosystem as well.

David Roberts

Yeah, I sort of assumed they would demonize EVs eventually, but it was weird how it went down. It was weird to have Elon in there in the middle of their sort of coalition. So, it's kind of scrambled the dynamics a little bit. But it seems like they've gotten there now where they've more or less aligned against EVs.

Mike Levin

"Well, I always refer — so years ago, my neighbor, he replaced a Hummer with a Tesla. And he told me, and he's a very conservative guy. I wouldn't say he's MAGA because I wouldn't criticize him like that. But a very Republican, very conservative guy. And he said, "I just want you to know I got this car because it's fast and it's cool." And I said, "That's huge!" Because I've been following EVs in my lifetime, the EV won. In college, I wrote my senior thesis on the Partnership for the New Generation of Vehicles, which was the Gore effort to try to get the big three to build an 80 mile per gallon car.

And so, I've been at this for a while, thinking about this, and we've been behind for decades. We've been behind. The Prius obviously was a huge advance for hybrid technology and Tesla made a huge leap. But if you look at where we are competitively right now, certainly GM and Ford are not where they need to be. The Ultium platform's out there, but it has significant challenges in both market adoption. And the conversion to NACS charging is really important too. Tesla's won out on that. So in California, the train left the station, right?

David Roberts

They just yanked your waiver.

Mike Levin

Well, let's talk about that. Do you have time for a prop? I have to show you something. Okay, your audience can't see this, but this is a picture of Governor Ronald Reagan and members of the California state legislature from 1967. This is President Reagan or Governor Reagan, then Governor Reagan, creating the California Air Resources Board. It was 1967, preceding the federal Clean Air Act by three years. And then Nixon was president, Reagan was Governor. We wanted a waiver in California because we had massive problems with smog that required us to go further than the federal standards set in the Clean Air Act.

And what you had in the decades since is, you had Republican governors, Schwarzenegger being, I think, most notable. They passed AB 32, the biggest state initiative maybe ever for climate. You had Democratic governors like Brown, Newsom, or Davis, all of them committed to this goal that California was going to clean up its act. And what we did was an incredible success story. You had 35 air districts deal with stationary source pollution, and then you had CARB set very aggressive standards to deal with mobile source pollution. And it worked. When I was in high school and I ran around the track, one lap after I start, my lungs would burn.

Two laps, the lungs would really burn. The point being is that we had smog alerts all the time. You had people with all kinds of respiratory conditions and cancers. Every year, you get the report card from the American Lung Association, and we were really struggling and we're still in non-attainment today. But absent what CARB has done and what the air districts have done, it would have been a complete disaster. And I think we ultimately here in Washington DC should learn from that example, not try to kneecap California. And if you really care about California, you care about our future, you care about children, you care about the type of state, the type of country that they're going to grow up in, you should care that we're not going to just allow polluters to run roughshod so they can make a few extra bucks.

David Roberts

Did you see what the Commerce Committee did? I think today or yesterday in the Senate, they are — I didn't read enough about it to get into the details, but basically, they are trying now to kneecap CAFE standards overall, not even for California, across the board, CAFE standards. So, let me ask you about the car companies because everybody demonizes the oil and gas companies for good reason. But what is up with the car companies? To me, rationally, the global shift to EVs, it's happening. It's obvious. China's ahead, we're behind. And every little bit that we protect ourselves from competition, we just enable ourselves to fall further behind.

And killing CAFE standards and killing the waiver, it all seems designed to shelter an industry that's falling farther and farther behind. Why aren't they better? Why don't they want, you know what I mean? Why are they still like...? Obama saved their bacon. And they turned around and stabbed him in the back. Not a couple of years later, they just over and over again take the worst route. Do you have any analysis of the car companies, why they're so short-sighted?

Mike Levin

Yeah, it's not so homogeneous. I think you have startup companies like Lucid, like Rivian. You know, Lucid of course is backed by the Saudis, but you know, Rivian is Orange County based and production out in Arizona, I think, along with Lucid. But you know, you have a lot of really interesting and innovative companies out there. I think that the legacy automakers are slow to adapt. Whenever I've heard Mary Barra at GM, I think she's trying to operate in good faith and understand where to skate to where the puck is going to be. And if there is a market pull, California being the largest market in the United States, there's a market pull towards EVs, towards plug-in hybrids, whatever it may be, then they're going to follow that direction.

And by and large, they are trying. I thought that I have an old Chevy Volt, which was that original Obama —

David Roberts

I have a Bolt, the full electric one.

Mike Levin

And you know, now you've got the Equinox and the Blazer, and you know there'll be scores more of these vehicles. For, if nothing else, for the California market, we still have roughly 1 in 40 car sales going electric. And we'll see what Governor Newsom decides to do with regard to picking up, if in fact, the EV tax credits are gutted, which is what the Republicans want to do. To what extent would California pick up the slack? And you know, I know Newsom originally said "the whole thing," but that's going to be tough given the budget deficit that we're running in California.

David Roberts

He says a lot of things. Well, this is the demand pull thing. Like, we just also bought an Ioniq. We're now a dual EV household. And my Ioniq was built in Georgia. Built in Buddy Carter's district.

Mike Levin

Yeah.

David Roberts

Do they — they don't seem to get — but I just wonder, like behind the scenes, do they get that it's not just manufacturing subsidies that are going to... You need demand. The demand pulls the other side of the, you know, the consumer side subsidies, the demand pull is what's bringing all that manufacturing to their districts. Do they understand that?

Mike Levin

I think they... Well, I can't speak for everyone, but I think that, you know, Buddy Carter understands that the EV tax credit and the incentives that Kia/Hyundai were given in order to build that plant in Georgia were very important for his district and for his state. Buddy's my friend, so I'm not going to criticize. But I think at the end of the day, everybody has to make that final analysis, that cost-benefit analysis of the benefits to their district, economic and otherwise, versus the costs. And, I had a very cynical political science professor who once said, "The only thing members of Congress care about" — this is way back when I was a student — "is getting elected and reelected."

"Not the most important, not the main thing, the only thing." I don't think that's true. All these years later, I probably wouldn't be so adamant that we decarbonize if that were the case. I would be more willing to just let sleeping dogs lie. But we've incurred millions and millions of dollars in independent expenditure from the fossil fuel industry against me over the years, and we keep on trucking because at the end of the day, I think that clean air, clean water, and the future of our country, and for me, for my kids, your kids, grandkids, everybody, it's so critically important that we just can't give up the fight.

And trying to frame it in economic terms so that the average person can understand, I think, is critically important. And it doesn't always show up on polls. So, if you talk about climate in terms of, you know, the rising sea levels or extreme weather events, that's not going to do as well on polls. But if you talk about it in terms of the economy, I think that's encompassed in our overall importance that we give to the economy. And people knowing that this bill is going to raise their energy prices is pretty bad. It's bad. Just like it's going to take away health care from millions of Americans or take food out of the mouths of people who really need it.

Raising your energy bills at a time when 80 million Americans can't afford their energy bills now is a really bad look.

David Roberts

And while you're also raising the price of all their consumer goods with tariffs.

Mike Levin

Yep.

David Roberts

I want to ask you something, since you're from California. This is a subject that is very near and dear to my heart and a lot of my listeners, but it doesn't get a lot of national attention, which is the overlap between decarbonization and sort of urban land use density, multimodal transportation, etcetera, all this. This is a very hot thing in California. They rarely talk about it at the national level. And insofar as there's anything in this bill, it just nukes everything. All the money that was going to anything other than highways, basically, is getting nuked.

So, like, Republicans are just, I think, aligned more or less officially against density, against all that stuff. But how do you see that connection? Because it's a very heated point of contention in California. There are multiple bills. They just passed a TOD bill and the CEQA reform bill is somewhere getting along. But a) do you also see that connection? Are you interested in those issues?

Mike Levin

Oh, absolutely.

David Roberts

And do you see any dawning awareness, even on the Dem side in Congress, that that's an important piece of the decarbonization puzzle?

Mike Levin

Well, first, shout out to my friend, Buffy Wicks, who is doing a fine job.

David Roberts

Trying to get her on the pod.

Mike Levin

I can help with that. But, you know, the way I see it, it's a red state versus blue state thing, and the blue state Republicans are not willing to stand up and advocate for policies they know will be important for our states. I don't see it as much more complicated than that. So, we're all products of our experience, and in the case of lawmakers, we're products, hopefully, of going back to our districts and listening to a lot of people and doing events and understanding and moving pieces. And for me, that means a major effort around multimodal transportation.

I have the second busiest rail corridor in the United States, connecting San Diego and LA. It's constantly at risk of falling into the ocean. We have, you know, constant discussions around YIMBYism and around Transit Oriented Development. I personally want to see a lot more of our, you know, vacant parking lots that are adjacent to transit become decent, affordable housing units for people.

David Roberts

We just did parking reform in Washington.

Mike Levin

There you go. There you go. I think it can happen. You know, you have to have forethought at the local level and at the state level, and then hope that the feds don't, you know, undermine the effort. But you're right. When we were developing the IIJA, the infrastructure bill, there was a whole lot of effort that we as Californians, because we, you know, we're 42 strong as the Democrats, the California Democratic delegation. So we had lots of discussions with, you know, then Chairman Peter DeFazio and with our friends who were on the TNI committee and with the Biden administration.

I think that resulted in some really good policies and necessary funding. It got politicized. The administration, the Trump administration 2.0, thinks anything the Biden folks did was wrong just by virtue of them having done it. And this is an order of magnitude worse than I experienced during Trump 1.0, where there were still people in Trump 1.0 that acknowledged that things that Obama had done, that the administration had done, made sense. And there is now this blanket rejection, to a degree maybe unprecedented in American history, of a prior — they're literally going after the prior administration saying that they were signing the auto pen.

Right. So, there is just this reflexive disdain for anything that the Biden folks may have done. "Oh, they brought $321 billion of investment, of which 80% went to the red districts. Well, it must be bad because Biden did it."

David Roberts

Or, if you just make a Democrat sad, that in and of itself is a policy.

Mike Levin

It makes me sad when they cut their nose to spite their face. This hurts all of America. Again, you know, 30 years from now we're using Chinese and Indian technology that should have and could have been developed here, but for the fact that we gutted funding for the universities for the research, development, deployment, and gutted all the funding that would have jump-started clean energy.

David Roberts

Well, speaking of clean energy and speaking of oil and gas, their influence, there's been a lot of discussion lately. You know, wind and solar have grown so fast and the whole clean energy industry has grown so fast. My sort of analogy is it's like one of those kids that grows up to be 7ft tall. For the first 12 years of their life, they're just kind of gawky because their limbs are too long. It's almost like they've gotten so big so fast and not quite coordinated yet. What's your sense? Are they throwing their weight around?

Do you know what I mean? Are they exercising the influence that they could or do? Do you think they need to be better organized, better led, better lobby? Like, are they getting stuff out of Congress commensurate with their size and importance?

Mike Levin

Well, I think there's a lot of catch-up that needs to be played for the clean energy industry to try to make up for decades of activity from the fossil fuel industry. It's going to take time and it's going to take a lot of effort, and it really is a nascent industry in a lot of ways. I first knew that I wanted to be in the clean energy industry when I read a book by Ron Pernick and Clint Wilder. And I bring that up because I just saw Clint last week. It's called The Clean Tech Revolution.

And I read it when I graduated from law school in 2005. Here we are 20 years later and we really did see a clean tech revolution in a lot of ways. I was a very minuscule part of it. Along with my friend Sean Casten, we ran, we were the first two to run on that as our actual background. Even though the consultants told us, "Don't run on clean energy, don't do it, say you're a small business person, say anything other than clean energy." But not only did we run, but we won on the topic. And then we got here and we were put in place on that select committee for climate that Speaker Pelosi assembled.

And then, we made a big impact with the biggest climate bill ever, the IRA. And it would have been bigger still, but for Joe Manchin and a handful of others narrowing its scope. I bring all that up because we've done enormously well in 20 years. When I first got to Congress, we were told, "You can't get a climate bill across." And they were still looking at what had happened with Waxman-Markey and with the BTU back in the 90s. So they were saying, "You can't do it. It's impossible." Just like in California. I remember being told, "You want to do a 33% renewable portfolio standard. That's insane. You can't do that!"

But, you know, it's iterative. We build on the progress, we learn from the mistakes, we improve the communication, and we move forward.

David Roberts

I think just you and Sean coming into the House delegation probably raised the average energy literacy of the caucus quite a bit in and of itself. But do you think, like, relative to when you entered Congress, do you feel like the Democratic caucus is more energy literate?

Mike Levin

I think they were more literate than you think before. I think there were a whole lot of people around here who knew quite a lot. I look at my friend Jerry McNerney, for example. He's now in the state legislature. It's tough because there are very few people like you that want to cover what we do. And so, in the general consciousness, a lot of that work gets done, but it doesn't get covered. So, I would say there are very smart people now, but I also would say there are very smart people then, some of whom I knew and some of whom I did not.

But obviously, overall, the effort did not succeed the way that people were hoping until the IRA finally broke through and succeeded. And to a lesser extent, the Infrastructure Law had all sorts of important provisions as well. But you needed the stars to align. You needed a president, you needed a House and a Senate, all of whom were fully invested in tackling this challenge. I give enormous credit to Speaker Pelosi for believing in people like me and Sean, empowering us, putting us on important committees, and, you know, giving us an opportunity to be successful relatively early in our congressional careers.

David Roberts

Well, if Dems retake the house in 2026?

Mike Levin

I like this question.

David Roberts

What if I say "when"?

Mike Levin

Even better. I'm knocking on this table right here.

David Roberts

When Dems retake the House in 2026, it'll still be a divided Congress. What can be done? And are you making plans, thinking about it?

Mike Levin

Well, I think that scenario would offer an opportunity to work on an actual transmission deal, not some giveaway permitting deal.

David Roberts

So, bring permitting reform back. Bipartisan permitting.

Mike Levin

Yeah, I don't think this Congress is the right time to move forward on a deal that's 90% tilted towards the fossil fuel industry. And I think that's probably what it would take to get to "Yes," in this environment. I could be wrong. I'm not a closed-minded person. I try not to be. But I think in this environment.

David Roberts

Well, the recent evidence is —

Mike Levin

Overwhelmingly, everything that we work so hard to achieve on climate energy policy is being gutted left and right. It's a wholesale giveaway of our public lands and pay-to-play. I mean, it's just terrible. So, I don't think right now is very ripe for a deal. But, I do think if we took the House, we would have the leverage necessary to get that 90/10 deal back to a 50/50 reasonable deal. And I think that's a deal we should take because I saw what happened when we had the trifecta. I saw what happened with Manchin-Barrasso.

There is a deal to be had, and I'm one of those pragmatic enough. If Donald Trump signs it into law and wants to take a victory lap, go for it.

David Roberts

Well, let me try to bait you into saying something controversial then. Speaking of the abundance people, one of their critiques is that the groups, the interest groups on the left, are pulling the caucus farther left than the public. And one of the ways this played out was a lot of the left environmental groups oppose that permitting deal and presumably would oppose a similar permitting deal. Would you think the left green groups have become unproductive in their purity tests and whatnot? I mean, do you agree with that critique that they are not — that they're dragging you away from bipartisan deals?

Mike Levin

I would say two things. First of all, the people that you just referenced, who are talking about a lot of these things, are themselves interest groups with their own agendas, their own boards of directors, and funding sources.

David Roberts

No one thinks they're an interest group.

Mike Levin

The other is, I don't think you can just paint that broad brush over "the groups." So, I think that you've got very pragmatic groups that are focused on results and you know, want to make sure that we have good outcomes. You have others that want to impede progress. And I'm interested in partnering with anybody that wants to actually get results that we can be proud of down the road. I hope that would incorporate some of those people that you just referenced to criticize the traditional environmental groups.

But, I'm not going to just be one to advocate for a deal, to say, "we got a deal." That actually increases emissions rather than reduces them. The Manchin-Barrasso bill, before we saw the transmission part of it, I saw it as a way to dramatically increase emissions from things like LNG exports, to dramatically increase oil and gas pipelines. And until I saw the transmission piece was actually there in a way that made sense to me. It was very surprising, to be honest with you, because I think right before seeing the thing, I said, "Well, I don't know if there's anything I could support that is going to come from this.

Then, I saw the finished product and it was better than I expected, and it was maybe worse than Barrasso expected. We couldn't get it across the line, unfortunately. But, we've got to be aiming for a deal that we can be proud of, not just one to say we did it.

David Roberts

Yeah, I mean, if you talk to people who actually struggle with NEPA a lot, one of the things they say that would help a lot is just a lot more state capacity, a lot more people to do those reviews, and somehow that never... Well, like, the Barrassos of the world are never like, "Let's hire a lot more government bureaucrats to hurry this process up."

Mike Levin

Now, it's the opposite. They want to, you know, end the agencies as we know them and replace everybody with AI and, you know, just consequences be damned. But you're absolutely right. Look, if we had, as a strong national agenda item, "Build transmission that we need for the next two centuries," we made that a top national priority. We put a "whole of government" — as we used to like to say, "a whole of government" effort into that. A Manhattan Project for all of us to be focused on. We get it done. We get it done. But there is a massive impediment, and the impediment is the fossil fuel industry and the $550 million.

That's so — I loved Ezra Klein's book. I think the world of him as a journalist. I listened to his podcast just like I listen to yours. I think that I'd like a part two about how we get around the money in politics and also how we get around things like, you know, when it comes to building transmission out, the interconnection, the local community challenges, you know, the NIMBYism, all that stuff. Because that's just as important, in my view, as NEPA or CEQA.

David Roberts

Yeah, I feel like one of the things that both books left out is that a lot of these rules, regulations, and bureaucratic cruft is not just stuff in the abstract. It is that they're under constant, withering attack by giants... you know, so if there's any crack in the law, if there's any loophole, if there's any room, it's going to get exploited. So that's how that stuff gets built over. It's a defensive thing. It's not just because they want to. Well, final question. And this is a broader thing so maybe you want to get into this, maybe you don't.

But one of the things that is, I don't think, actually, Ezra is necessarily taking this tack, but a lot of the people who have glommed on to the abundance thing, your Ritchie Torres and people like that, are saying, "Part of the Dems' road back into power and popularity is moderating on social issues." Basically, they're like, "We need to talk about government, talk about doing good things and basically back down a little, quiet down a little on all these cultural issues" that for some reason they think Democrats have prioritized. I always ask, "Why do you think we're talking about trans girls in high school sports?" Do you think Democrats dreamed that up and put that in the newspaper every day?

You think they're the ones who centered that? Like why do you think you're talking about this? But anyway, do you agree with that critique that a greater focus on government competence should be coupled with backing off somewhat on social issues?

Mike Levin

I think the reality is that the emphasis on social issues is as much a product of the media as it is anybody in Congress deciding actively to talk about those things. There are exceptions. I have colleagues that will talk about social issues all day. I'm not one of those. I'm focused on our economy, I'm focused on our environment. I'm focused on economic development, on winning the future. That's where my personal focus is. And talking a lot about the importance of caring for our veterans and things like that. The reality is that I don't like the fact that climate, energy, environment has sort of been put in that same bucket you should not talk about. So, because I see —

David Roberts

Or, is it that it's a cultural issue? As to whether you like critters or not is...

Mike Levin

Correct. So, we get one planet. Unless Elon figures out or Jeff Bezos figures out this Mars thing. We've got to do all we can to take care of it. And we know from the overwhelming scientific consensus what we need to do. And we've got to be up to the challenge. Our government right now is not up to the challenge. Our government right now is not even willing to acknowledge or accept basic science, whether it's on climate or on anything else for that matter. And that does a tremendous disservice to the entire world. The excuse that my friends on the other side have made, "Well, if China doesn't do it or India doesn't do it, then why should we be forced to do it?"

First of all, we need to lead by example. But second of all, if we continue down the path we're on, China, India, other countries will eat our lunch when it comes to clean energy.

David Roberts

Yeah, they're doing it. Out there doing it now. For years, it was like, "Why should we do it when China isn't?" And now, China just raced past us.

Mike Levin

70 to 80% of electric vehicles, of wind turbines, of solar panels are being manufactured in China. So, I think everybody needs to get their head out of their politics for a second and focus on actually having a livable economy for the next hundred years in this country and trying to actually win this huge industrial revolution that's still up for grabs. If we only have the foresight to embrace that change.

David Roberts

You think we could still catch up? You don't think China's lapped us to the point that it's... Because it feels like part of what the Republican Party is doing is like, "Well, China beat us on this stuff. Let's not do this stuff, let's do something else." You know what I mean? All the talk about the threat of China and "We got to stand up to China" and China beats us on this and they're like, "Well..."

Mike Levin

I am still a perhaps naive optimist in the capacity of this country that has done so well over the last 250 years to keep that spirit of innovation, of creativity. I still think we've got the best universities in the world. I still think we've got the best scientists in the world. I still think we've got the best entrepreneurs in the world. Part of that is also because we welcome people from all over the world because of freedom and opportunity here in this country. And we're losing our way in that regard, too. Those things are directly interrelated. So long as we maintain that "If you have a great idea, you want to start a business" or, you know, "You're that next brilliant Nobel laureate. You want to come to the United States of America because this is where it's at."

So long as that's the case, I think we can continue to lead. I'm not saying we're going to take over overnight. What Trump is doing, it's going to take four years to break a lot of stuff. It could take decades to build it back. But we do have an opportunity, I think, in 2027.

David Roberts

To "Build it back better" you might say.

Mike Levin

Well, I'm not going there. I'm not going there. But what I will say is, find areas of opportunity in the second and final two years of the second Trump term. God willing, we have a divided — we have the opportunity to actually have gavels again and have agency again. Hopefully, Hakeem Jeffries, the Speaker, reconstitutes the Select Committee on Climate and we're able to move the needle and then best position the opportunity for post-2028 and whatever happens there, hopefully with a competent, reasonable person in the White House who gets it, who understands that we've got to own the future. It's not only in our economic self-interest, it's in our national security self-interest as well.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

Washington state just passed one of the strongest transit-oriented development bills in the nation, and in this episode, I talk with Rep. Julia Reed and Alex Brennan from Futurewise about how they got it done. We discuss why building more housing near transit is so important, what this landmark legislation entails for density and affordability, and how it positions Washington as a leader in pro-housing reform.

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David Roberts

All right, all right, all right. Hello, everyone. This is Volts for June 18, 2025, "A win for transit-oriented development in Washington state." I'm your host, David Roberts. We need significantly more housing almost everywhere in the US, but nowhere cries out for increased housing density more than the areas around transit stops. Proximity to transit is the key enabler of car-free living and where it is possible to live without a car, we should be putting in lots of housing to allow people to do so.

What's more, when a transit stop becomes a node of dense housing, an entire ecosystem of businesses and services grows up around it. It becomes a dynamic hub.

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The notion of using transit stops as anchors for urban micro-communities, known as transit-oriented development, or TOD, dates back decades in the urbanist world. But the recent success of the YIMBY movement has put real legislative reform on the table for the first time in ages.

And here, once again, I find myself bragging about my home state of Washington, where the legislature recently passed one of the strongest TOD bills in the country.

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To talk through that bill and TOD generally, I have two excellent guests. The first is Representative Julia Reed, a key sponsor of and advocate for the legislation. The second is Alex Brennan, who runs Futurewise, a Washington state advocacy organization that was instrumental in pushing the bill across the finish line.

We are going to talk about why TOD is important, what's in the bill, how it passed, how it compares to bills in other states, and the next steps in the housing fight.

All right, with no further ado, Representative Julia Reed and Alex Brennan, welcome to Volts. Thank you for coming.

Representative Julia Reed

Thanks for having us.

Alex Brennan

Yeah, thanks for having us.

David Roberts

Alex, I want to start with you just very quickly. So, you know, for those of us who have followed urbanism, urban issues, etc., for years, the term transit-oriented development is very familiar. TOD is something that has been discussed in this world for a long time. But I suspect lots of people listening are not particularly tuned into those issues and not familiar with the nomenclature, not familiar with the idea. So, maybe just by way of starting off here, maybe just give us like the 2-minute elevator pitch for what is TOD? Why is it important? Why is it an important focus of reform?

Alex Brennan

So, transit-oriented development is, at its core, just allowing development near transit. And why is that a good thing? You alluded to a lot of this in the introduction. Being near transit is something that is really valuable to a lot of people. It means that you're going to be able to get places you need to go. It means that you're going to be able to not have to drive a car as much, which is going to have impacts on your quality of life, on your cost of living, and on the environment, and on your greenhouse gas emissions.

Typically, when we talk about transit-oriented development, we're talking about an area that is a short, easy walk to a high-capacity or frequent transit stop. Different people can define that in different ways, but typically that's between a quarter mile and a half mile, sometimes even three-quarters of a mile from a station. Typically, you're allowing the sort of denser development within that walkshed. The types of transit that you're thinking about are light rail, commuter rail, bus rapid transit, sometimes other types of transportation like a ferry terminal.

David Roberts

Maybe, it's worth saying here that generally, these reforms are not talking about just your average bus stop. Right. Because there are like dozens and dozens of those all around any city with a bus system. And basically, if you did a half mile around every one of those, you would just be basically upzoning everything everywhere.

Alex Brennan

It would just be the whole thing.

Representative Julia Reed

Yes, actually, the original transit-oriented development bill did apply to just regular buses.

Alex Brennan

Yes, that is true.

Representative Julia Reed

But we ran into some trouble both with people saying, "That's too many places." It was both people that were like — there were a bunch of concerns. I mean, cities in our area, in Washington state, especially in the areas where there is the most transit, don't generally operate their own transit systems. So there was sort of a hue and cry from the cities about, "Well, what if Metro moves the bus stop and we've already built up all this zoning and then there is no transit to be oriented around?" And then on the other side, you kind of had an endless barrage of people trying to get their bus stop included, because it was initially buses that come every 10 minutes.

And then someone was like, "What if it was buses that came every 12 minutes? Because then this bus stop could get included." And then someone else would say, "What about buses that come every 17 minutes on weekends and every nine minutes on weekdays?" And then, just in general, there wasn't enough political support to include regular bus stops. It just became too complicated both to fight the opponents and include all the proponents. So, we narrowed that to bus rapid transit stops, which are a particular kind of bus mode.

David Roberts

Interesting. Very interesting background. So, one other part I wanted to say by way of general background too, and maybe, Alex, you're about to get into this, but like you were talking about the merits of living close to transit, the merits for people living in these places. But also, I just always want to say that, like cities need tax revenue, they need development. If you're a city, you're growing or you're dying, and these transit hubs serve as like development triggers. They are little like, they're literally like planting seeds in your city around which development grows. So just like, you know, so often when you're on the Internet, these things are framed as like do-gooders imposing these things on cities, the poor, innocent cities that are fighting back.

But like, transit-oriented development is good for cities and city budgets.

Alex Brennan

And one other point on that, I think, is really important. In Washington state, certainly in a lot of other places, we're investing billions of dollars in building out a transit system. And when we allow development to happen around those stations, then we're taking advantage of those investments and for the building up the tax base, all the benefits I was mentioning for the people there. But so often, we spend all of this money building these systems and then we don't let people be near them to actually be able to use them. And it's, you know, and it ends up being a big kind of inefficient use of all of that.

David Roberts

As a resident of North Seattle, let me just strongly endorse all those comments. We've just spent billions of dollars putting light rail stops in Northern Seattle. And like, there's one that's less than a mile from my house and one whole side of it is just a sleepy, dumpy little single-family neighborhood. Every time I see that, it just drives me insane. The amount of economic potential being wasted just in that square mile is maddening to me. But actually, this bill I think would literally upzone that area near me. So, I'm personally excited about this.

So, Representative Reed, let's talk then about this bill. This is HB 1491. There are kind of three big things about this bill I want to hit. It's the upzoning it requires, it's the affordable housing it requires, and it's the way it pays for the affordable housing. Those, as I understand it, are kind of the three big things about this bill. So first, let's just start with the upzoning. What are the sort of details here?

Representative Julia Reed

Yeah, so this bill uses a form of density called floor area ratio.

David Roberts

Yes, please explain that. I've stumbled across that term a hundred times now.

Representative Julia Reed

It's okay. I really worked hard on, "How are we going to explain this to legislators? Do we have diagrams?" So, basically, the idea of floor area ratio is it's a division problem between the number of floors you have in a building and the amount of developable land you have on a plot. So, if you have a one-story building that takes up the entire area of the plot, all of the land that is possible to be developed on that plot, that's a floor area ratio of one. You could also have a two-story building that takes up half of the land on the plot or a six-story building that takes up a third of the land on the plot.

Does that sort of make sense?

David Roberts

And those are all a FAR of one?

Representative Julia Reed

Yes. So, those are all different types of FARs. So, that's one of the things that people ask a lot about is like, "Well, how many floors specifically does this allow?" And the answer is, "It kind of depends." And we did that on purpose because every plot and lot is going to be a little bit different, and the way that it makes sense to develop that land is going to be a little bit different. So, instead of telling developers, like "Every plot in the TOD zone can have up to a six-story building," you can kind of choose the level of density and development that you want to apply in each area.

David Roberts

So just to clarify, a one-story building covering 100% of the lot is a FAR of one, right? So, does that mean a two-story building covering 100% of the lot would be a FAR of two just because it's two divided by one?

Alex Brennan

Yeah, exactly.

David Roberts

So, let's talk about the FARs that this bill allows.

Representative Julia Reed

Yeah, so within this bill, it has different FAR levels depending on whether you are close to a light rail station or a bus rapid transit station. So, if you are near a light rail station or a rail station, you have to allow a FAR of 3.5 on average. So again, that could be a 3.5-story building — I don't know what you do with that half story that covers a hundred percent of the lot. It could be a six, seven-story building that covers half of a lot. You know, in theory, you could go up and up and up, but there's physics that are going to limit exactly how many floors you can have on a lot.

David Roberts

And so, as you're going up and up, you're shrinking your footprint on the lot to stay within your FAR. So, if you wanted more than six stories, you would be building an extremely narrow building at that point.

Representative Julia Reed

Yeah, exactly. And this, I should say, this is setting a floor that cities are allowed to permit. So, a city has to permit at least 3.5 FAR within a rail station area. So that's within half a mile of a light rail or heavy rail stop or commuter rail stop essentially. Or a density of at least 2.5 FAR within a bus station area, which is within a quarter mile of a stop on bus rapid transit. There are provisions in the bill that allow cities to average that FAR. So, like if within a half mile of the station doesn't really make sense, maybe a city wants to say, "Okay, we're going to actually allow much higher FARs in this area, like on this block and we're going to allow lower FARs on this block. But, across that half-mile around the station area, it's going to be an average of at least 3.5 FAR."

David Roberts

And that's the minimum. And so, 3.5, a FAR of 3.5, is approximately six stories.

Representative Julia Reed

Yeah, we're talking six-story, eight-story buildings. And this bill is really focused on building that really large-scale building that you see around transit. So, if you went to like the Capitol Hill light rail station, I know it happened many years after we actually opened the light rail station, but eventually we did build those like taller, denser buildings right on top of the station. That's what we're talking about here.

David Roberts

Of course, we say a six-story building is some giant, hulking building. But of course, if you go up to like Vancouver. Yeah, we go outside of Vancouver at their rail stops. Yeah, they're building skyscrapers around there.

Representative Julia Reed

So, this is a floor, not a ceiling. So, we could be doing more and then also with a 2.5 FAR. Cities are allowed to exempt some bus rapid transit stops, up to 25% of the stops, from this TOD. But if they do that, then the FAR in the remaining areas, the remaining bus stops, has to be higher. It has to be a 3.0 FAR.

David Roberts

Ah, I see.

Representative Julia Reed

So, it's between a 2.5 and 3.5 FAR, depending on the mode of transit that the area is surrounding.

David Roberts

So, for approximate purposes, this is around four stories within a quarter mile of bus stops. Around six stories within a half mile of rail transit stops.

Representative Julia Reed

Yeah, exactly. And if you do a building that is all affordable, so to people earning an income below 30% of AMI, or what we think of as accessible housing, for example, which is people earning an income below 80% AMI — so that's your kind of teacher, firefighter cohort. If the whole building is tagged as being affordable for one of those groups, you can get an additional 1.5 FAR.

David Roberts

Interesting. So, you can build up even higher.

Representative Julia Reed

Yeah, and you're also, I mean, this is kind of moot because we did end up passing the parking reform bill for the state, but there's no parking minimums allowed within the TOD zones under the bill.

David Roberts

Yeah, I was going to say, it seems like we already did this with parking reform, but honestly, if you have to kill parking minimums twice, you can kill them as many times as you want. And I'm going to cheer every time.

Representative Julia Reed

At the start of the session, we were very unsure if parking reform was going to pass. My first year, I was the prime sponsor of the statewide parking reform bill and it was a rough crash to a fiery landing. So, I think we wanted to be sure, in case we can't do statewide reform, we want to continue to chip away at these places where we can do parking reform.

David Roberts

So, in these walksheds around transit stops, parking minimums have been doubly killed. I know that, like in the course of hashing out legislation, you make compromises that are opportunistic, etc. But like, is there any logic to — well, like for instance, half a mile around rail, quarter mile around bus transit. Is there a logic there?

Representative Julia Reed

There is a logic there. Whether or not it's a logic I personally agree with is a different conversation. But the kind of logic is that rail stops are fixed. They tend to be in areas where cities are already planning for a large amount of density and half a mile felt like a reasonable amount of walking space. The argument was that bus stops tend to be more in neighborhoods. They're not necessarily in the kind of places that cities typically think of as high-density corridors. Some of the bus rapid transit stop examples, some of the cities brought up, were in quite rural parts of their city or like places in between where two cities meet sort of in that unincorporated county area.

And so, there was a thinking that a more gentle form of density would be more appropriate around a bus stop.

David Roberts

But you know, like, if I'm a developer, I'm not going to go build a six-story building next to a rural bus stop. Just because you enable these things with zoning doesn't mean people have to go do them or will do them, against all economic sense.

Representative Julia Reed

Yes, again, I agree with you. But as one vote out of 98 in a legislative body, I have to convince a lot of people who have varying levels of attention and interest in this topic.

David Roberts

Fair enough. Fair enough.

Representative Julia Reed

It's sort of one of the challenges in this is like getting legislators of all stripes, Republicans, Democrats, to say, "The market can drive here" is a very tough sell because, you know, we're sort of here to try to ensure that the markets are well regulated and operating effectively. And sometimes, I think it's funny that only in housing density conversations are progressive Democrats very committed to supply-side theory. So sometimes, you find yourselves in these really weird, roundabout conversations.

David Roberts

Well, let me ask a couple of questions about this upzoning then. So, like when I think of Washington state, I don't necessarily think of it as a particularly transit-rich state. So, I'm sort of curious. Has anyone done the math on, like, what is the total, like how big of a deal is this? What is the total amount of land that's going to get upzoned? How much transit do we really have in this state?

Representative Julia Reed

Futurewise actually did do a study on that last year when we were doing the build. Do you want to talk about that, Alex?

Yeah. So, this was from last year. We were trying to answer that exact question. How much total added residential capacity would this bill create? And it's a lot. We looked at all the station areas, the amount of the current zoning compared to what these new minimums would be, and it added up to 1.8 billion square feet of additional residential capacity.

David Roberts

That must mostly be around bus rapid transit. Because, are there a bunch of light rail systems in our state that I'm not aware of? Like, it's Seattle and who else?

Alex Brennan

Well, I mean, it is mostly in the — actually, I should even caveat this. We only did this analysis for the Seattle metro area. We didn't do the other parts of the state that have bus rapid transit. So, this is just in the Seattle metro. There's more in other parts of the state and a lot of it is bus rapid transit. But, you know, we included not just the light rail stations that are already built, but the ones that are going to come online. We have the second biggest light rail system expansion plan in the country in the Seattle metro area after Los Angeles.

And so, there are a growing number of stations and station areas, and I think a half-mile radius around all of the rail stations, plus the commuter rail stations, which I think people sometimes don't think about as much.

David Roberts

But it's fair to say that the bulk of the effect of this legislation is going to be felt in the Seattle metro area.

Representative Julia Reed

Yeah, kind of in the Puget Sound area. But I think one of the things that was really interesting about the Futurewise study for me was how much this unlocks and development on the east side of Lake Washington. And not just in residential, but like this also applies to — it's residential and mixed-use development. Right. So that's more spaces for childcare centers, more spaces for small businesses.

David Roberts

Oh, wait, wait. You're jumping ahead to one of my future questions.

Representative Julia Reed

Oh, sorry, I will get there. But it's also more housing for people and not just for tech workers, but for all the people that make those businesses run, like the bus drivers, the cafeteria workers, the custodial staff. There are a lot of people who I think, when we think of Eastside technology hubs, worker housing, we think of the folks on sort of the highest end of the spectrum. And I hope this will help them too. But there are a lot of people who work at those companies and support those companies who want to live near transit on the Eastside.

And there's a ton of opportunity to unlock there. And like Alex said, that study didn't even include what we could potentially unlock in Vancouver and Spokane and eventually probably the Bellingham area. I know they're looking into bus rapid transit. And also, you know, it's not just King County, but Snohomish County also has a fair amount of bus rapid transit as well. And there's some opportunities in Pierce County too. So, I would say kind of all across the sort of Puget Sound corridor and then in the major urban areas, south and north and east.

David Roberts

Yes, this gets to a question. This is, I guess, a political question for you, Representative Reed. Which is, you know, there's a lot of fighting over transit. There's a lot of resistance to transit. And now, is it the case that if I go add a bus rapid transit stop, I am also automatically upzoning the area around it?

Representative Julia Reed

Yes.

David Roberts

And if so, do you worry that that's going to increase the already substantial resistance to new transit stops? You know, like this makes accepting a transit stop in your area a bigger deal, I guess I would say.

Representative Julia Reed

Yeah, I think we looked at that as this is a risk that we're willing to take. When we're planning a transit system, it's a long-term plan. You're investing a lot of money into it and there's a lot of demand for transit and a need to kind of meet transit goals that are connected to climate goals that are connected to budget issues that are just connected to what residents themselves are demanding. So, you know, will this, could this potentially like add some of the fuel to a fire? Yeah, but like those folks that are going to oppose transit stops in their neighborhood are going to do it whether or not, like they'll assume that the transit stop is going to lead to more housing and you know, more of "those" people moving in. Insert, you know, whoever "those" people are for whichever community you're in.

And so, you know, and if not moving in there, it's going to be easier for them to get here. I mean, look at all the fights that were had — not to pick on Bellevue, but all the fights that were had with the Kempers and, or, sorry, the Freemans over like bringing light rail to Bellevue Square.

David Roberts

Yes, when you say this opens up a bunch of new opportunities for the east side, that's the first thing I thought of was like, "Have you checked with the wealthy residents of the east side about that?"

Representative Julia Reed

They came to meet with me. Don't worry. Actually, I will say this bill — we had a lot of collaboration from Eastside cities on this. So, I had several meetings and tours. We had a lot of support from Kirkland and did a lot of work with Bellevue. We really worked hard to try to get the cities to a place where at least they could sort of have enthusiastic neutrality about this. And I think that was reflected in some of the give and take we had on the bill.

Alex Brennan

The politics around transit in East King County, I think, has really changed a lot from a decade or more ago when there were those fights about extending light rail in ways that you wouldn't expect. There can actually be more support sometimes in those cities.

Representative Julia Reed

Yeah, people are excited about light rail and bus rapid transit and what it is going to mean for their communities. And you know, I find that if you kind of paint the picture for them, they're like, "Oh yeah, this is something that we want. This is something our businesses support, our cities support." At least on paper. And then it's kind of getting down to like, okay, what are the actual, like, nitty-gritty pieces of this?

David Roberts

Right. Well, this gets to the next question then, which you hinted at a little bit before, which is one of my main questions about all this, which is, you know, you're trying to paint a picture for them and when you're doing that, you're painting a picture of density, the kind of density that you and I like. Right. There's like, there's open spaces, there's parks, there's green space. There's mixed-use communities with shops sprinkled in. People are walking around. You know, we're painting a picture of a nice little European city. But I think like if I live in Seattle — I was just talking with Alex about this before we started recording.

If I live in Seattle, like, well, I do live in Seattle. Up in North Seattle, up on very north, very north Greenwood. And this is one of those areas where Seattle is zoned for density. But it's just a strip. It's just a big stroad with density along either side of the stroad. And then immediately beyond that, you have single-family homes. So you have density. But like, it's not nice. It's not something I would want to paint a picture of. There's nowhere for any of these people to walk. Like, they have access to bus stops.

Yes, but like, it's not nice density. Two questions. One is like, is there anything in the bill that says anything about what kind of density we're going to get here, or is it just more housing? You know what I mean? Like, is there any requirement that you include walkability or shops or mixed use or green space or any of the other parts of density that make density nice?

Representative Julia Reed

Yeah, the bill does apply to an FAR for housing and mixed-use development. I think anytime you're doing statewide housing legislation like this, there is that challenge around how do you guarantee the most positive outcomes given that this is going to apply to very different types of cities and communities. Also, you have to keep in mind that any requirement you layer on is going to cause developers, urbanists, and other folks to point out that meeting that requirement is increasing the cost of building this housing, which could decrease the likelihood the housing gets built at all.

We'll get to that in a minute because we had a lot of rounds on this, on the bill. So, there aren't kind of like specifically like, "Okay, every one of these has to be a courtyard apartment with this much green space." But the idea is that this density is part of your comprehensive plan. So, that's kind of what this is connected to is that in your comprehensive plan, you must plan for this. And then within that kind of broader work of the comprehensive plan is where cities are supposed to be doing that work of thinking about like, "How do we not just meet the requirements but actually like build the kind of community we want and plan for the kind of communities we want?"

David Roberts

I mean, this is my worry about, like, you know, you mentioned this before, but like when you think of this as new housing for "those" people, you know, like you're just going to build it as a bunch of warehouses, right? I'm worried about whether cities are going to do this well. I guess, I mean, it's only partially under your control.

Representative Julia Reed

I mean, that is a worry that I have too. And I think you kind of lightly alluded to this, but I think we have a severe lack of vision within the city of Seattle from both the executive and the city council about creating a city that works and is centered around people and building a city that puts people ahead of parking and ahead of punishment and ahead of other challenges. You can see this in kind of all of the sort of Sturm and Drang on the Seattle Comprehensive Plan. I regret that my city is not showing a level of leadership and vision on this issue that I would like them to see.

Now that being said, you know, I'm a state representative so I can pass statewide laws that provide a kind of container within which this work can happen. But I'm not a member of the city council. I no longer work in the mayor's office. I can't guarantee you that your city is going to create this kind of planning. But that's where organizations like Futurewise are really important as well because they are trying to hold cities accountable to this work. And we are also going to be creating, as part of this bill, the Department of Commerce is required to create model code that cities can adopt just like they have model code for House Bill 1110, the Middle Housing Bill.

And so, in that model code work too, there may be opportunities to kind of bring out more about the quality of the neighborhood and the housing, not just the sheer amount.

David Roberts

Interesting. So, the other pieces are affordability requirements. I'll briefly set the scene. Right. There's a long-standing fight in the urbanist world where I guess what you would call progressives or lefties want to say, "If you're going to build, you are required to include some affordable housing, meet certain environmental standards, use urban labor, etc.," all these sort of requirements they want to put on the zoning. This is called inclusionary zoning. It's sort of, "Yes, you can build density, but we have a lot to say about exactly how you build density."

That's the left. And then you have the sort of kind of more center-left YIMBYs who say, "When you put all these requirements on new building, you make new building more expensive and you get less of it, which is what's happening." So this is a long-standing, very vicious, very heated, endless fight in the urbanism world. And this bill actually includes the first interesting, you know, sort of innovative way of cutting through that Gordian knot that I've heard. So I want to talk about it. So maybe just start, Representative Reed, with what are the affordable housing requirements in this?

Representative Julia Reed

It's a very complicated issue. And, you know, I very much enjoyed when this bill passed, being feted by the very people who, the year before, were calling me a climate arsonist for including affordability measures. It was a lovely lesson on legislative life.

David Roberts

Yes. Can't take anything too seriously.

Representative Julia Reed

No, you just have to keep it moving. Stay focused on the goal. So, basically, what this bill says is that for buildings that are constructed in a station area where it is newly up-zoned for housing. So, this is not all of the land in the station area because some of that land has already been up-zoned to or above this level. So, it is not everywhere.

David Roberts

Oh, so if I have a, like a four-story building that's in one of these areas already when the upzoning happens, these affordability requirements do not retroactively apply to me. So, it's only new building.

Representative Julia Reed

Correct. And if a city has already up-zoned the area around transit and there's just not a building there, but like it's already been up-zoned to and above the level, let's say they're like, "Oh, we already allow 4.0 FAR around our light rail stops." Those buildings aren't required to implement the affordability requirements either. It's new construction in newly up-zoned areas.

David Roberts

Got it.

Representative Julia Reed

So, in those areas, at least 10% of the units, if they're rental housing, have to be affordable to families making 60% AMI or below. Or, at least 20% of the units have to be affordable to households earning 80% AMI or below.

David Roberts

That's Area Median Income.

Representative Julia Reed

Area Median Income. So, just to put that in context, if you have a building with 10 units, that's one unit that's affordable. If you have a building with 200 units, that's 20 units that are affordable.

David Roberts

And when we say you have to offer an affordable unit, that just means for that unit, you're capping the rent at a lower level.

Representative Julia Reed

Yes, at least for 50 years. And so, this was a huge area of contention with the bill. I strongly believe that it is important that people of all income levels be able to take advantage of the transit utopia that we are trying to build. I'm unapologetic about that. I think that yes, that does slightly increase the cost of building, but we're talking about building in the most profitable, most desirable, most in-demand property areas in the entire state of Washington. So, there is room to accommodate a modest amount of affordability to ensure at least some people can either remain in areas that are going to be up zoned or can come to those areas for the first time.

And I think that's especially important because of where we put our transit stops, often on these busy corridors, and because of where we have already pushed low-income people. And there is an element of race to this as well. So, low-income communities and communities of color are closer and closer to these busy, noisy corridors where we also often have transit that we're talking about upzoning. I see that as being different than middle housing, which is really actually about helping more low-income people come into neighborhoods that they have been excluded from because of exclusionary zoning practices.

So, I'm very unapologetic and always have been about having this inclusion exclusionary zoning level. But I've always been flexible about how we do it. I try to be outcomes-oriented in this, about like, how do we guarantee that some of the units built in these new areas are going to be affordable.

David Roberts

But do you concede the premise though that it is possible for inclusionary zoning requirements to slow building?

Representative Julia Reed

It's possible. I will say again, the balance of that is this is a very high-demand building area. So it's possible. I mean, if a developer wants to build in Yelm where they don't have inclusionary zoning requirements, then they're welcome to do so. But I think that it is possible. But I also think that that's what you do in policymaking. We make trade-offs like that all the time. Like, having a minimum wage means it's going to slow down hiring, but we should still have a minimum wage. You know, requiring hospitals to provide emergency care to anyone who comes in the door is going to increase the cost of providing hospital care.

But, I still think we should make sure that emergency departments are open to everyone. So, yeah, inclusionary zoning requirements can slow down production and add some of the cost. But, it can also mean that the neighborhoods we're building are actually the neighborhoods we want. And, I think if we dial those dials appropriately, we can ensure that we're getting there.

David Roberts

Let's talk about our clever solution here.

Representative Julia Reed

Yes, so developers get a lot out of this too. They're not just required to do inclusionary zoning. First of all, let's remind ourselves: developers are getting an upzone, which means there's a ton of areas in these TOD zones where currently, you can only build single-family housing. So, you can't build businesses, you can't build mixed-use, you can't build any type of multifamily housing. So, developers are getting a significant upzone. That's, I think, the first thing that they're getting. They're also going to be getting, in this deal for areas that have this mandatory inclusionary zoning, an extended tax exemption for their building.

So, this is actually work — I want to give credit to the city of Shoreline. They successfully piloted this in their city.

David Roberts

Oh, interesting. I was going to ask, who came up with this?

Representative Julia Reed

Yeah, so it was actually the city of Shoreline. They have a higher inclusionary zoning requirement than what's in the bill they require. I think it's 20%. Well, anyway, it's higher than what we have in the bill. And they came up with this idea that instead of, I believe, it's 12 years that you typically get a multifamily tax exemption. If you're a developer, we're going to give you 20 years. So, you're going to get a longer tax exemption if you build buildings that are in these areas.

David Roberts

So, that means you pay no property tax on that building for 20 years.

Representative Julia Reed

Correct.

David Roberts

That seems like, what do I know? But that seems like a pretty big subsidy to me.

Representative Julia Reed

It's a pretty big deal.

David Roberts

Who did the calculation that that equals the value?

Representative Julia Reed

It's something that developers sat in my office and said, "Like, this is our number one priority." And then we were like, oh, but I think they did that expecting we wouldn't give it to them. And then when we gave it to them, they were like, "Oh, no, we want to veto this whole bill." So, I thought that was kind of funny. And then, in addition, I would note Senator Bateman added this in the Senate version that any property that's claiming this 20-year MFTE, the city also has to provide a 50% reduction for impact fees. So, impact fees we haven't talked about yet.

Typically, when you're building a development in a new city, a city will assess an impact fee to the developer. This is supposed to kind of address the impact that having all these new people move to the neighborhood is going to have on sewers, water, or schools. Now, there is a lively debate about whether or not those impact fees are actually connected to any kind of data.

David Roberts

Yes, and they definitely do slow down development. They definitely do deter development.

Representative Julia Reed

And cities that don't want to have density, but lawmakers who want to look like they're, at least in theory, in favor of density, frequently do things where they say, "Well, we're going to allow upzoning, but we're going to put a huge impact fee on every development." That's going to make it impossible. So then they can say like, "Well, actually we changed the lots. It's the developer's fault that they're not doing it."

David Roberts

Right. So, this is a 20-year tax exemption from property taxes and a 50% reduction in impact fees.

Representative Julia Reed

Yes, if they are providing the affordable units.

David Roberts

Right. I mean, that seems, as you say, they're in your office saying that that's what they wanted. I have a couple of questions about this. One is, do we know from Shoreline's experience whether this is enough to pull developers in? Because part of what I'm wondering is, like, everyone, I've been sort of traumatized recently watching federal policy flail around wildly from one direction to another. So, like, part of what comes to mind is just like, this is a 20-year commitment. Are developers going to trust that this policy is going to stay in place for 20 years? Do you know what I mean?

Representative Julia Reed

Yeah, I mean, I think that's always part of the risk when you're dealing with public policy. There can be changes. I like to say that, you know, they can take my word to the bank. So, as long as I'm still here in 20 years, we can be sure of that. I think that in Shoreline's experience, it did spur development in their areas. So, they had higher inclusionary zoning levels. They combined that with a tax exemption and incentive for developers to build despite those additional costs from the inclusionary zoning, and they saw greater development. I think I also saw a study that similar work had happened in Los Angeles, for example.

So, there's definitely places where this is happening and where we know that it's going to work. And yeah, I mean, I think in my office, we also have developers saying, "Well, it's impossible, it will never pencil." But there's no pro forma to show that. There's no, like, data to back that. And I asked them, you know, again, to be outcomes-oriented. I was like, "If you have a better idea or if you have a suggestion about how we should dial the inclusionary zoning, like, I'm all ears." Like, I'm not saying it has to be this or it has to be that, but you got to come to the table with something.

And there just wasn't a willingness to really engage, even though, as I said, developers are getting like 80% of what they wanted, 90% of what they wanted in this bill. So, it's a little frustrating to feel like you're getting a lot of what you wanted. You're not getting a hundred percent of what you wanted. But I'm not getting 100% of what I wanted. Like, no one's getting 100% of what they wanted. That's not how this policymaking works. And to sort of just continue to kind of fold your arms and say, "Well, we're not going to play ball unless we get 100% of what we want" means that you're going to have policy happen to you, not with you.

David Roberts

They're used to just winning. They're used to just being able to fend this stuff off.

Representative Julia Reed

Well, it's a new day in Olympia.

David Roberts

It's a new day. Alright, okay. So, these are the three big pieces of the bill I wanted to go over. It increases the density around transit stations. It requires 10% affordable units. And somewhat innovatively, basically the community is paying for those affordable units rather than the developer, via a 20-year tax exemption.

Representative Julia Reed

The state is paying.

David Roberts

The state is paying, taxpayers ultimately. So, a couple of other little bells and whistles I wanted to mention before we move on. One, I think we touched on this earlier. It also eliminates off-street parking requirements. A double shot to the head of the —

Representative Julia Reed

Which is just requirements, not eliminating parking.

David Roberts

They can, of course. I said it 50 times: you can still build parking. It's not illegal. Another thing that I think is really cool, multifamily units that have at least three bedrooms are not counted toward the FAR limits. So, this means you can stick a bunch of family-size units in your building without triggering these FAR requirements. Basically, trying to induce developers to build more family-sized units, which I just think is great because every city needs more of those. This is something that I feel like Vancouver has done a really good job on. You know, you go walk around downtown Vancouver, there's schools, there's elementary school kids or kids everywhere.

There's lots of family units there. But, like those, they are hard to find in a lot of other cities.

Representative Julia Reed

So yeah, there's kind of a bias in our area where it's like, "Oh well, single people live in apartments and families live in houses." You know, that's not the reality. Speaking as someone who's 38, like that's not the reality for me and a lot of my peers.

David Roberts

I mean, I would have loved to live in a big flat with my family if I could have ever found one that I could afford. One other bell and whistle, which I thought was really cool, they say you have to allow increased density if you're using all mass timber. I'm sort of curious who stuck that one in. You know, we love mass timber around here.

Representative Julia Reed

That's a great question. I don't actually remember who put in the mass timber piece. Alex, do you remember?

Alex Brennan

I don't remember that either. It's been in there for a while. I mean, I think part of the conversation about the types of buildings we're getting, there's a lot of interest in having more flexibility in — we have a lot of this sort of very standard height, kind of mid-rise buildings. And people wanted an option for slightly taller, more slender buildings with more green space on the lot. And our building code isn't very set up to do that. And so, mass timber is a way to build at that height and to help kind of take advantage of the flexibility that the floor area ratio offers.

David Roberts

Excellent. Love it. The other thing is, this bill exempts cities under 15,000 people. Again, this is true in the parking bill too. I'm assuming there's no substantive rationale for that other than just like a bunch of rural people are upset.

Representative Julia Reed

Oh, never, never make assumptions, Dave. That's what I call the Sumner exemption. The city of Sumner, which has a commuter rail stop, had some very strong feelings about how — but a very small kind of footprint — had some sort of very strong feelings about how much of their city would be impacted by this. And sometimes in legislating, you make compromises in order to bring people on board and bring legislators on board. And that seemed like a fairly small one. So there's a very limited number of cities that are impacted by that because the cities that are impacted by TOD to begin with are mostly large cities.

David Roberts

Right. So, whatever, whoever that developer was who was so keen to go build a skyscraper in Sumner...

Representative Julia Reed

To build a skyscraper next to the Sounder commuter rail stop in Sumner, it's just, it's going to have to wait until the trailer bill.

David Roberts

All right, let me ask about enforcement. I generally love this idea that I think has really taken root in the YIMBY world. It makes more sense to move the level of legislating up to the state level because at the local level, you just have disproportionate representation of certain populations, let's say, getting in your way and protesting everything. So, I think there's a good argument to be made that doing things at the state level is not only more effective, it's also more democratic, in a way. You are representing the needs of more people. But when you have a state mandate and you have a bunch of sort of smaller mid-sized cities that are vaguely resentful about it, I feel like you're going to have a lot of efforts to wiggle out of this in various ways or find loopholes. So, what is the mechanism of enforcement?

Alex Brennan

Well, we're one of the mechanisms of enforcement. One of the things Futurewise does is we bring legal appeals when cities and counties don't follow state land use law, you know, and then the courts make sure that those folks come into line. I think the other piece though is that this is just going to go into effect. I guess there's some work to do to figure out exactly the process — Representative Reed might know more about how commerce is going to do this — but with the Middle Housing Bill that we passed a few years ago, if you don't adopt your own zoning code to implement the state requirements, then there's a model state code that just goes into effect that you can permit under.

And I assume that we'll have something like that will happen for this legislation too.

David Roberts

Got it. Okay. Before I leave the bill behind, my last question, Representative Reed, is — and probably worth the whole pod too — but I'm curious a little bit about, you know, when I talk about the parking reform, the sort of sentiment was like, "This was impossible not very long ago." Things have changed quickly and made this possible. I assume that something similar is true of this, that this is a result of big shifts in opinion and power and coalitions, et cetera. So maybe just talk a little bit about, how did you assemble a coalition to get this across the finish line when it was so, so difficult not even very long ago?

Representative Julia Reed

Yeah, I mean, part of this is that housing is a problem now in every community. And it's the number one thing that legislators hear about in most cases. And that's not just Democrats, it's also Republican legislators. So right away, you have a cross-cutting issue that is very important to many different groups of people and that legislators are hearing about. So that automatically kind of increases interest. Futurewise was a huge foundational partner for this. And honestly, the people that every time I was like, "I'm going to give up, this is too hard," kind of kept me going and kept me pushing along.

So, shout out to Alex and your team for their incredible work and research.

David Roberts

Dealing with NIMBYs is life-draining. I can attest to that. So, kudos to you.

Representative Julia Reed

There are a lot of ways to have your life force drained in the legislature. Labor was a really important component of this. This is about building housing for working people and increasing their access to housing and their ability to live near housing.

David Roberts

And so they're on board, they were a force in favor?

Representative Julia Reed

Yeah, they were very supportive. The labor council came and testified this year, especially at all of our committee hearings. They were there at the bill signing. So, I really appreciated the support of organized labor. I would say cities themselves, even though, like, cities are not known to be the most excited about statewide zoning preemption.

David Roberts

That came up in the parking pod, too. What is the organization of cities?

Representative Julia Reed

The Association of Washington Cities.

David Roberts

This was our sole opponent, was this organization of cities, is that true here too?

Representative Julia Reed

And the Association of Washington Cities, we could have a whole other podcast about my thoughts and opinions on them. While the Association of Washington Cities was not supportive of this bill, individual cities who are actually the ones that are impacted by transit-oriented development largely were supportive, or at least we were able to work with them to get to neutral. So, I had a lot of meetings, I went on tours. I really dialed into who are the city proponents and what makes them support this. And then for the opponents, who are the opponents that have, like, real substantive issues that we could try to speak to in the bill, and who are the opponents that are just, you know, never going to be down for any of this.

And so, you know, really working with the cities because legislators listen to their city councils, they listen to their mayors, they listen to their residents. So it was important, especially for suburban legislators, it was important that their cities at least feel heard in this process. So that was an important part of the coalition building. And we were able to work in their changes. The realtors and the business community, again, that was a community where even though if you ask the Washington Association of Realtors, they'll tell you transit-oriented development is one of their top priorities, they were opposed to this bill because they don't like the inclusionary zoning aspects.

And even though, again, they're getting a lot of what they asked for.

David Roberts

Come on.

Representative Julia Reed

It's the same with NAOP, which is like the commercial developer lobbying group. Even though they were getting 85, 90% of what they asked for, they continued right up until that bill was on the governor's desk to push for a veto, the inclusionary zoning requirement.

David Roberts

I mean, this is so obviously better than the status quo.

Representative Julia Reed

But, and I think that being said, sometimes with folks that are like that, where they're just never going to come around, I just try to listen as much as I can to what they need, incorporate as much as I can, and then just keep pushing forward. And, you know, the door's always open, the table's always open. I want everyone to be a part of this conversation. But if you don't want to work collaboratively and fairly, then, you know, we go forward. Like, the work doesn't stop just because some people want to take their toys and go home.

David Roberts

But it's fair to say. And this makes me happy, so I'm suspicious of it. But it's fair to say then that really the motive force for this was housing people. Like the housing people now are organized enough that they are making actual bills happen. This is not some bank shot where you, like, sold it under other cover. It really is a housing thing.

Representative Julia Reed

Yeah, and I think similar to rent stabilization, similar to the Middle Housing Bill, you also have this growing cohort of legislators coming in. You know, my cohort, the cohort that just came in this year, who are people in their 30s and 40s who are directly connected to generations of folks who are trying to buy homes or rent homes, trying to build families and lives here and who are more impacted by the way the housing market is now, as opposed to some of my colleagues who maybe bought their houses in the 90s.

David Roberts

This is such a generation gap on housing specifically; there is such a generation gap.

Representative Julia Reed

And I think the newer folks coming in are more open to different ways of living that are not just like every family in a single-family home in a picket fence neighborhood. And that's been great. I don't want to run down all my colleagues, all of my older colleagues, because we had many supporters, many housing folks, been working on this for a long time. But I think it's both like the constant pressure on legislators to figure out housing solutions that feel big and impactful to constituents and then the kind of growing number of legislators for whom these kind of housing solutions — like, for me, doing this kind of work is the whole reason I decided to run for the legislature.

It's the whole reason that I wanted to come in because I didn't feel like there were enough people in the legislature from my age group and generation — again, I'm 38 — that understand what it's like out there for us and are acting with an urgency to address that issue.

David Roberts

It's funny, the Republican woman in Montana who sponsored a ton of Montana's recent very progressive housing legislation is, I think, 28, like one of the youngest legislators ever in Montana. I think that's definitely no coincidence.

Representative Julia Reed

Yeah, and Republicans care about this issue, too. I mean, I got some Republican votes for this bill out of committee, not on the floor. But then, I tend to be one of the more outspoken members of the caucus. I'm not heavily endeared to the Republican leadership.

David Roberts

They don't want to give you a victory.

Representative Julia Reed

Yeah, they're not so excited about all the dunking that I do on them on Bluesky.

David Roberts

But on the substance, behind the scenes, some of them get it.

Representative Julia Reed

Behind the scenes, I definitely had Republican partners and allies and people who, you know, wanted to be involved in the bill, who had reasonable requests. And you know, I think that's great. I want to work with my Republican colleagues if they have a similar goal as I do on these issues. And so, you know, it wasn't a full-throated "rah rah," but definitely a lot of support behind the scenes. Sometimes it's not even the yes vote you need so much as the like, "Can you just get everybody to chill out a little bit and not make like 50 speeches against the bill?" So this bill eats up a ton of time. Time is always something we're managing in part-time legislatures where we only meet...

David Roberts

Tell me if this resonates: Is another thing you want from your Republican colleagues just like, "Don't go yelling to Fox News. Don't draw the eye of Sauron." Because then, they'll make the whole country full of conservatives hate it.

Representative Julia Reed

I don't want to be written off in the Daily Mail.

David Roberts

If they're just quiet about it, you know, just don't draw a ton of attention. That's maybe their best contribution.

Representative Julia Reed

We like low-drama legislating. That's what this is for.

David Roberts

Alex, I didn't leave a ton of time for this, but I am curious to hear from you. You know, this is like the YIMBY movement has just gone from 0 to 60 in an incredibly short span of time. They're fanning out across the nation, winning all kinds of victories. So, maybe give us a little sense of how this TOD bill in Washington compares to TOD bills either passed or sort of on the table in other states. How well are we doing here?

Alex Brennan

Yeah, I mean, I think the exciting thing is that Washington state is really setting the bar on TOD.

David Roberts

You think this is the best state bill on TOD that's passed anywhere?

Alex Brennan

Yes, yes, I do. And I think it's a credit to Representative Reed's leadership on this and all of the work that she was just describing to make a really impactful, big deal policy happen and that this is something that the rest of the country is going to be looking at. When we look around at other states and what they're doing, a lot of places are trying to do something similar, which is great.

David Roberts

And these are all basically along the basic model of allowing more density around transit stops. Like, they're all versions of that, basically?

Alex Brennan

Yeah, so there are two states that have done something kind of similar, Colorado and Massachusetts. And I think that the big difference is in the amount of density that we're seeing. In Washington state, we're using this wonky metric, floor area ratio. The other states use units per acre. So we tried to do kind of an estimate of how the floor area ratio translated into units per acre so that we could compare these a little bit better. And based on those estimates, we're getting a lot more density than those previous policies that were passed in those states. We estimate it's about 175 homes per acre for the rail stations and about 125 for the bus rapid transit stations.

That compares to, you know, in Massachusetts, we're talking about 15 homes per acre as the minimum around transit.

David Roberts

Wait, on the far side of reform, because, like, what was it before?

Alex Brennan

Yeah, well, so like, a typical single-family neighborhood is maybe five units per acre. So, you're getting an increase.

David Roberts

Yeah, I guess.

Alex Brennan

But it's, you know —

Representative Julia Reed

Hey, those patriots need their space, Dave.

Alex Brennan

And obviously, these are the floors, right? So, I think they're spurring, hopefully, folks, other opportunities to organize around doing more. And then in Colorado, it's 40 units per acre.

David Roberts

So, we're winning — I mean, that's not a small margin. Then, we're quite a bit ahead of the other competitors here.

Alex Brennan

Yeah, it's a big amount more. And I think there were criticisms during the advocacy process. One of the things that we had to do was convince people that this really was a big deal, because I think particularly with the floor area ratio, people hear 3.5 and they think, "Well, that's like three and a half stories. That doesn't sound that big." And they go to Vancouver, B.C., and they see these tall skyscrapers and they think, "Why can't we do that?" So, doing some of this comparison research and the analysis of the overall total capacity we were adding was really important to emphasize, "No, this is a big deal."

David Roberts

You could say, if I just throw this in here as a political economy note, that legislation that appears like no big deal to the casual observer, but is a big deal to the people who know, care, and understand, is really like the ideal political sweet spot for getting your legislation through.

Alex Brennan

Yeah, for sure. But at the same time, we did have a problem where we needed the advocates to keep showing up, and so we had to show that this was a big deal. And it was worth investing time in. So, it's sort of a fine balance. You don't want to energize the other side too much, but you want to make sure that your people are energized, that this is going to be worth putting all the time and energy into. And the other comparison that I think is helpful on this front, California has been working on passing a similar type of policy for a number of years.

David Roberts

They just did?

Alex Brennan

It just passed the Senate and still has to pass the House and get signed by the Governor. But, I've heard from folks in California that they thought the Senate was their biggest hurdle.

David Roberts

That's what I hear too.

Alex Brennan

Fingers crossed that they're able to get their policy across the finish line this year, too. But that is similarly my understanding: around rail stations, a range of 60 to 120 units per acre; bus stations, 60 to 100 units per acre. I hope we can be some motivation to them, too, to bump up some of those density levels as well.

David Roberts

So you said Colorado, Massachusetts, California, anywhere else of note?

Alex Brennan

These are the states that are doing the most specifically connected to transit. I think there's a lot of other places that are doing other types of housing reform that'll make it easier to build apartment buildings. There's a bunch of states that have passed laws that legalize apartments in commercial areas. So, like, you know, allowing, making it legal so that a shopping mall could start building apartments on top of the stores, things like that. That's also going to cover a lot of places. And so, you know, we've seen reforms like that in Montana, Texas, Connecticut, Arizona to different extents. There's some other policies happening in New Hampshire, in Hawaii.

We're seeing city-level changes in New York City, which obviously is bigger than most states in the country. So, there's a lot of places where we're seeing exciting progress kind of on related but slightly different fronts.

David Roberts

Speaking of related but slightly different fronts, I guess now Washington has done middle density. They've sort of enabled a bunch of middle density. They have now killed parking minimums for the most part. We've legalized transit-oriented development now. Is there an obvious next — and Representative Reed, please feel free to hop in here too — is there an obvious next target?

Representative Julia Reed

It is a topic of strong debate. Go ahead, Alex.

Alex Brennan

Well, I mean, I think there's a couple of places that we're kind of digging into. I mean, one thing, a lot of stuff happened this last legislative session and so we're in a good position of getting to think now about what's next. I think some of the stuff that you guys were talking about earlier in terms of how do we not just have the density but create great neighborhoods?

David Roberts

Yes, this is what I'm trying to lead to. Is there a clear, state-level lever that you can pull that affects the quality of the density? I'm not really sure what it would be.

Representative Julia Reed

I'm really interested in that question.

Alex Brennan

Well, no, I mean, I think it's something we're trying to figure out. I think that typically that's where we've done more work at the local level and really thinking about the local context. And so, I think as we've tried to scale up to the state level so that we can have this bigger statewide impact, it's a little harder to figure out how do you scale up those things into state legislation? The one thing that we got a little bit of with the TOD bill this year that I think we're really interested in more of is state investment in the infrastructure for those neighborhoods.

So, bicycle and pedestrian improvements, utility improvements, public space placemaking investments, those kinds of things. And so, I think that's one area for sure.

Representative Julia Reed

Yeah, I think that's an area of big interest. There is a fund that's created within this bill related to capital improvements for cities in TOD zones. And we'd like to see that grow to be a larger investment that cities can tap into. That's obviously something cities are very interested in as well. So, I think that that is an area that we're going to continue to look at. We had some significant budget challenges this year, so there wasn't really a big pool of money we could tap into. But I think that's something where we want to kind of see that continue to grow, especially as the law begins to take effect and these TOD zones and planning zones come online.

David Roberts

I mean, a lot of the objections, a lot of the resistance to bills like this, you get people who live in one of these proposed areas who look around and say, "Well, like, there's a transit stop, yeah, but otherwise we're not really set up for this. We're not really set up for car-free living."

Representative Julia Reed

Yeah, and it's a little bit of a chicken and egg problem, right? Like, cities haven't invested in sidewalks in a particular area because they're not expecting a lot of housing to be in that space. You know, water tables, drainage, sewage, that always comes up a lot. So, some of it is if we never plan for the housing there, we will never have the investment to support the infrastructure. But of course, if you're a city and you're worried about kind of being caught in that crunch, it's obviously a topic of big concern. And I think there's a way that, like the state and cities, can try to partner better on that.

David Roberts

Interesting, interesting stuff. What a great problem to have. Like, we did the big things.

Representative Julia Reed

Yeah, I mean, I think a lot of what we're working on now is implementation. You know, anytime you put a bill together, you're like, "This is how I think this bill is going to play out in real life."

David Roberts

Exactly.

Representative Julia Reed

But as I used to work on the executive side before I switched over or I joined the legislature, and I know having implemented or tried to implement many pieces of legislation, there are always challenges that are unforeseen. So, we're excited about that. I'm excited about kind of the bigger question that you raised too, about enforcement. You know, do we need — I love our folks at Futurewise, they do such incredible work. But do we need a state housing office? Do we need to kind of break some of this housing work and enforcement out of the Department of Commerce?

How do we create more teeth and enforcement for these housing laws? So, there's a lot of work to be done on the enforcement implementation piece now that we've gotten some of these big hits on the books. And then also, kind of dialing those things, like as we start to see middle housing and eventually TOD take hold, is 3.5 FAR too low? You know, once you establish the principle, it's a lot easier to do a bill. Say, "Oh, we're just going to bump the FAR up 0.5."

David Roberts

Yes, we'll get those skyscrapers eventually.

Representative Julia Reed

Yeah, skyscrapers and center one day. But, you know, or maybe not. Maybe it's like, "Oh, that was too much. We gotta, we gotta scale back." So, I'm excited to be a part of those implementation conversations and that legislation going forward.

David Roberts

Awesome. And Alex, that's probably next for Futurewise too. I guess it's just trying to make sure this all goes off well.

Alex Brennan

You know, it's always going to be an iterative process. And I think one of the lessons we've learned is passing the bill is just the first step and seeing things through to actually homes on the ground, neighborhoods for people is the work. And so there's always more to do. But I think this is a huge step to make all of that possible.

David Roberts

Amen. Thank you both. This has been super fascinating, and I really can't wait to see what you come up with next. I can't wait for the next session. What a weird — having these positive feelings about politics is so unnatural. It feels so unnatural to me. What is this feeling? So, thank you. Thank you both for coming on and walking through those.

Representative Julia Reed

Yeah, it was great to be here with you. Thanks for having me.

Alex Brennan

Thanks for having us.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

David’s Notes

1. 🎤 Fewer mailbags, more WTFIH episodes
When I first proposed mailbag episodes, I envisioned answering fun, casual questions like “what’s the best Star Wars movie?” or “what’s your favorite city to visit?” Instead, insofar as people are asking questions, they’re asking thorny, difficult energy questions. But if I’m going to put in the time to research a good answer to a thorny, difficult question, I’m going to make a pod out of it, not put it in a mailbag. I barely have time to research the pods I do make!

The “what the F is happening?” episodes seem more useful and more popular so I’m dialing back the mailbags to free up more space for those and other experiments like them. Mailbags aren’t completely disappearing; you’ll still see one pop up from time to time.

Keep using this thread to ask questions, suggest episode topics, and connect with each other. Great questions might make it into a WTFIH episode, or I may just answer them directly in thread. And for anything outside my wheelhouse, odds are that someone in the Volts community has you covered.

📌 A reminder that paid subscribers can listen to full episodes of bonus content via the Substack website/app or by sending them to their preferred podcast player using these instructions.

2. I haven’t done a transmission episode in a while, but it remains true that we need lots more of it. See this report confirming its incredible benefits for ratepayers:

3. 🔫 The “build in red states so the IRA won’t be repealed” thesis has not proved out, to say the least.

I’ve asked several insider types why. The brutal truth seems simply to be that Republicans care more about keeping Trump happy by giving him his tax cuts than they do about anything else. They care a little bit about Medicare and Medicaid, they might fiddle with those cuts. They might join some Dems in raising a stink about the level of SALT deduction. But energy tax credits just aren’t a particularly high priority for anyone in the GOP. (One weird trick, etc.)

4. ✅ Community comment of the month: Eduardo makes a worthwhile point underneath our episode about CCAs, about PG&E’s ability to process information from smart meters:

The ability of utilities to gather and process distribution-level data is a subject of intense interest to this podcast — see this recent episode, and this one, and this one.

Monthly Thread — How It Works

This is your monthly opportunity to share! Use the comments section in this community thread to:

• CLIMATE JOBS & OPPORTUNITIES: Share climate jobs/opportunities

• SHARE WORK, ASK FOR HELP, FIND COLLABORATORS: Share your climate-related work, ask for help, or find collaborators

• CLIMATE EVENTS & MEETUPS: Share climate-related events and meetups

• EVERYTHING ELSE: Discuss David’s Notes or anything else climate-related

• QUESTIONS: Ask a question to the community or for an upcoming bonus episode (anyone can ask a question but bonus episodes are a paid-sub-only perk). Don’t be afraid to answer one another’s questions!

🚨 To keep organized, please only “REPLY” directly under one of Sam’s headline comments. Anything inappropriate, spammy, etc may be deleted. Be nice! Check out our Community Guidelines.

On June 4, at a Canary Media event in Washington, DC, I sat down with Senator Martin Heinrich to dissect the GOP’s so-called “Big Beautiful Bill” — a sledgehammer aimed at the Inflation Reduction Act, public-lands protections, and US science. We talk about the handful of Republican votes that could still save key tax credits, why bipartisan permitting reform isn’t dead yet, and how the bill’s self-inflicted grid squeeze would jack up energy prices right when AI is poised to spike demand.

(PDF transcript)
(Active transcript)

Text transcript:

David Roberts

Hello, my lovelies. This is Volts for June 13, 2025, "Senator Martin Heinrich on the fight over clean energy in the Senate." I'm your host, David Roberts. On June 4, Canary Media held an event in Washington, D.C. that featured several fascinating panels and interviews. (I enjoyed seeing many of you there!) Among them was my interview with Martin Heinrich, the senior senator from New Mexico.

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Heinrich is the ranking member of the Senate Energy and Natural Resources Committee and a leader in the Democratic Caucus on energy issues, so he will be a key figure in Senate negotiations over the Republicans', ahem, "Big Beautiful Bill."

That legislation would decimate energy provisions that Heinrich spent a great deal of time working on, and kneecap clean energy industries that have seen robust growth in his state. Unsurprisingly, he is not a fan.

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We discussed several unworkable provisions in the bill, how it could improve in the Senate, whether his Republican colleagues will have more courage than their counterparts in the House, and the possibility of bipartisan permitting reform, among other things. Enjoy.

David Roberts

Senator Heinrich, thank you for coming. Welcome. I appreciate it. I thought I'd start with, obviously, everybody's thinking about the Big Beautiful Bill — sorry, I've been training to say that with a straight face all week. Conventional wisdom going into this process was the Inflation Reduction Act is dumping a bunch of money into red districts, a bunch of money into red House districts. Mike Johnson has a one-vote majority. Things are very tight. That means every Republican representative has the power to sink the thing, basically. So, I think the conventional wisdom was, "He's going to have to make some big compromises to get this thing through. It's going to be a really delicate process."

No, it was not a scalpel. It was a sledgehammer. Wiped the whole thing out and they all voted for it. Did you expect that and how do you account for it?

Senator Martin Heinrich

Well, I think, under a historical perspective, that's not what would have happened. With a different Republican president, that's not what would have happened. So, what none of us could quite account for when we were putting the Inflation Reduction Act together, is a second Trump presidency where literally the party becomes sort of cultish. You know, the fealty to this president is just like nothing I've ever seen. Right. So, that's hard to plan for. The second thing is, House Republicans just folded. They did not use their power. And we did see what happens when some House Republicans did use their power.

You look at what Ryan Zinke and a few other Republican House members did on the public lands provisions where they were trying to sell off our public lands to pay for portions of the bill. They said, "We're not going to vote for the bill until you take that out." Well, you know what they did? They took it out. So we had all those folks sign a letter and none of them meant it. I mean, that's the reality. They weren't willing to use their political power to say, "I'm not going to vote for the bill until you fix this, this, and this."

David Roberts

Yeah, well, speaking of selling off public lands, Senator Mike Lee has said publicly that he wants to bring that back in. Is that plausible? Like, I no longer have any baseline sense of what's plausible or not anymore. You know what I mean? So, like, is that a thing that could happen?

Senator Martin Heinrich

So, I've spent my entire — I started out as an Outfitter-Guide working on public land. So, this has been part of my life, for all of my adult life. And I really cut my teeth fighting back on a previous effort to sell off our public lands. Would Mike Lee very much like to do that? Sure. The question is going to be, and it's going to be interesting to see what happens here, is we saw what happened in the House: you're inserting risk into an already wobbly kind of legislative effort. You never know when the wheels are going to come off on one of these things.

So, the question is, what do the other Republican senators think about that effort? And given the unpopularity of that kind of approach in a lot of the Intermountain West, where we have Republican senators in places like Wyoming, Montana, Idaho, and other places that understand how unpopular this is and how much risk it's going to create, I don't know if they do it or not.

David Roberts

Can you give us a sense of, like, how many senators is the margin here? Like, how many would have to really make the jump to kill this thing or at least force changes in it?

Senator Martin Heinrich

To force changes, like, if you can put a group of three together, you can probably force changes. Because no one's banking on Ron Johnson being a yes. Like, he seems to have carved out a pretty solid position for himself. You know, Rand Paul, you never quite know where he's going to land. So, you want to build a very solid whip count. And so, I honestly don't think it takes a lot of Republicans to force some changes. And for the sake of this overall industry and all the jobs that we've created and the hundreds of billions of dollars of factory investments, I hope they will use the power that they have because there are a handful of folks that could solve the timeline problems that could clean up the foreign entity of concern and make it functional instead of a mountain of red tape.

There are a lot of things that — setting aside the bigger issues of taking health care away from well over 10 million people — we could fix a lot of the IRA issues and preserve a lot of jobs, and mitigate rising electricity prices if they would use that power.

David Roberts

Well, you said that maybe selling off public lands outright would be a step too far. Another thing in the House bill is an extensive amount of fossil fuel leasing, leasing of public lands. And they sort of go beyond. You know, it's always just like they look around at whatever's around. They're like, "How can we get more extreme than that?" So now they're mandating that we lease public land to fossil fuels, plus opening the Arctic National Wildlife Refuge up, etcetera, etcetera. Public lands in general just become sort of open season. What's the valence of that issue, do you think?

Senator Martin Heinrich

Meanwhile, if you're in the oil and gas industry, you're probably thinking, "Stop helping!" Oil is $65 a barrel. Production, Saudis are increasing production. This cuts both ways for them. It's like, "Yeah, sure, thanks. You're reducing royalties. But by the way, the market is being flooded right now." So, it's kind of a mixed bag for that entire sector right now. And because they made a deal with Trump during the election, they're kind of biting their tongue.

David Roberts

Yeah, I saw someone make a similar point that the tariff on steel is going to jack up fossil fuel drilling.

Senator Martin Heinrich

It is very hard to produce a barrel of oil below $65. You can do that in the Permian Basin. But there are a lot of places where they start shutting off rigs when you get to that price point.

David Roberts

So, the purported drive behind all this is to find revenue. That's, I guess, what surprised me is it turned out that finding revenue to pay for tax cuts for rich people turned out to be number one through five on the priority list. And everything else got bumped, except they want to reduce royalty rates for the leasing of public land. That revenue — you know, Medicaid, one thing — but that revenue they can sacrifice.

Senator Martin Heinrich

That's what pays for our public schools in New Mexico. So, that change alone in my state is likely to cost the state of New Mexico close to $2 billion over the course of the next 10 years. And that will come at the cost of our school kids.

David Roberts

Yikes. So, I was going to say your committee, the Energy Committee, would be the committee where leasing of public lands is discussed and hashed over. But something you mentioned a few minutes ago backstage that hadn't even really occurred to me is that they might not do the committee process.

Senator Martin Heinrich

They might go directly to the floor with a substitute for the House bill.

David Roberts

And this would just be like calling the bluff of all the senators saying, "This or nothing." "Jump or you're dead," or "Jump or Trump will..."

Senator Martin Heinrich

"We all jump together."

David Roberts

What do you think are the chances of that?

Senator Martin Heinrich

I try not to handicap — like, I'm not in that mindset. So, I'm not a good person to predict how they will handle the procedural issues.

David Roberts

And if they did, I mean, this is of course, everybody's just guessing about this. But if they did today, right now, with the bill as is, do you think it gets to 51? Do you think that your colleagues, your Republican colleagues, will use the power in the way that the House Republicans didn't?

Senator Martin Heinrich

I think that's an open question. I think there are a number of Republican senators who recognize that there are big equities here that could be really problematic. I mean, when you have, you take just one example, West Virginia, you've got major factories, companies like Form Energy and others that set up shop there to take advantage of those incentives and to plan for the next 10 years of the future of our economy in storage and clean steel and other things. Are the two senators from West Virginia going to stomach those? You know, they went to those groundbreakings and ribbon cuttings and, you know, it's up to them.

They could force this change. Will they? I haven't seen a lot of profiles in courage, but if they decide to do it, they have the power to change this bill. There's no question about that.

David Roberts

Well, another thing that your committee would deal with, if your committee dealt with something, would be the rescission of all these DOE — I think this is one of the things that really hurts this crowd, all these grants, all this money that was going out the door, some of it they're just pulling back. Some of it they're trying to yank that's already out the door. So, like, what's the — is that legal? What is the legal status?

Senator Martin Heinrich

No. First off, just to clarify, it's not legal, but this is an administration that is willing to break the law and then pay the consequences later if they're held to account by a court. So, they're going to test the bounds of all of this. I have a great deal of sadness around all of this because we are the country that we are because we invested so methodically, over time, in science. And whether you care about NIH or, in my case, NNSA and DOE, we are where we are because of those investments that we've made.

And we are chasing the smartest scientists out of this country right now. The Chinese are recruiting them, the Europeans are recruiting them, and a lot of the people that DOGE got rid of — I'm all for, like, if you can make something more effective or more efficient, we should do that. You don't take the people who just got promoted because they don't have some sort of tenure yet. You fire the highest performing people in the agencies. That's nuts. And that is not how you run a good private sector operation. So it saddens me to see the impact there because I literally moved to New Mexico right out of college because I love the fact that it had two national labs and an active private sector and things like semiconductors.

And I thought, this is a place where a science person can go and have a future.

David Roberts

Yeah, and the funny thing is that the current Republican coalition has this sort of odd split between the MAGA types and these tech guys who have joined more recently with a much more like, "Let's go to Mars, humans will overcome" — that sort of attitude. And they're just standing by watching silently as the American scientific establishment is razed to the ground. They're not making a peep.

Senator Martin Heinrich

And it's unilateral disarmament with respect to the real competition with China because, like, you look at the stuff that they're yanking the money that is designed to make our manufacturing sector make the same kind of changes that our energy sector has already made. That's a competitive issue. There's so much dissonance, cognitive dissonance in all of this. Like, if you don't like China controlling the battery supply chain, maybe you should build batteries in the United States. So, don't get rid of the incentives to build batteries in the United States.

David Roberts

You can't build them here, but you also can't buy the ones that China's making. What's the remainder there? Let's talk a little bit about permitting on two scores. One is there was a lot of discussion of permitting last session. There's a lot of dispute about who exactly is responsible for that not making it over the line. But it was a relatively sophisticated agreement of people with different perspectives. What the Republicans have done left on their own devices is come up with, "Hey, what if people can just pay to bypass environmental review?" Which like, is that as ridiculous as it looks on the surface? Is that a plausible kind of reform?

Will that do good? Is that on your list of good permitting reforms?

Senator Martin Heinrich

No, it's not. You shouldn't do permitting reform and budget reconciliation. You're not supposed to take something that is policy and masquerade it as a budget item so that you can include it in budget reconciliation. The biggest reason for that is we need long-term certainty in the permitting process. So personally, I believe that the Democratic Party needs to be the party that says, "The United States of America can build big things again." So how do you create the certainty where you can do that and do it on a timeframe that actually makes sense? I spent 17 years shepherding one transmission project through the federal, you know, morass.

David Roberts

Did it ever happen?

Senator Martin Heinrich

Two NEPAs. Yeah, SunZia, it's being built right now. Three and a half gigawatts of clean power coming onto the grid right now. But 17 years is not a reasonable timeframe. So, I am very proud of the permitting reform that the Energy and Natural Resources Committee did last Congress. I was deeply involved in those negotiations and we got most of the committee. Yeah, we lost Josh Hawley and we lost Bernie Sanders, but the people in between voted for this. We should pick that up, dust it off, and pass it because we have a coalition and that's a bird in the hand that would actually make a meaningful difference instead of throwing for the sort of dogmatic end zone and saying, "We're going to destroy NEPA completely" or "We're going to let people do pay to play as part of the permitting process."

David Roberts

Yeah, do you anticipate that happening? Like, when this bill is done and off the plate, do you think permitting reform is going to be on the agenda?

Senator Martin Heinrich

I think it will largely be determined as part of the process where we scrub the bill with the Parliamentarian. So, the question is, does it survive what people on the Hill call the "Byrd bath,"after late Senator Byrd? And this is clearly, in my view, this looks an awful lot like policy masquerading as budget. So, if it comes out, that's the most likely place where it comes out.

David Roberts

Well, I want to get back to permitting form, but they have defied the Senate Parliamentarian once now. So, is that just a thing now? Like, I think Thom Tillis has said, he or Thune said he wouldn't overrule the parliamentarian. But, like, I don't know how seriously to take that.

Senator Martin Heinrich

Well, I mean, one data point does not give you a trend. We're going to find out if that was an anomaly or a trend, and if it's a trend — I mean, I try to impress upon my colleagues on the Republican side who get very exercised about certain members in my party. I'm like, "Think through all of this stuff and think through, like, when AOC is in the White House, what's she gonna do?" Like, when you start ignoring the Congress and saying, "You can just take the money from this project and put it in this project instead," even though that's not what our laws say, how are those Air Force bases in Texas going to fare under a President you don't like?

So, we've got to get some guardrails back on all of this where Congress is doing its job. And there are real delineations of power between the administration and Congress.

David Roberts

I think this is part of what freaks a lot of people out. It doesn't seem like giving the President dictatorial powers is the kind of thing you do if you anticipate the other party ever being in that chair again. You know what I mean? But back to permitting reform, never mind democracy, back to permitting reform. I think the sort of conventional wisdom is that the Republicans — this was in the last round — want it to be easier for oil and gas. The Democrats want it to be easier basically for transmission, mainly, and clean energy.

Republicans don't like the transmission part. A lot of Democrats don't like the oil and gas part. We're going to do them together. But now, they have the votes, theoretically, to just bully their way through with their own permitting bill. Do you think there is enough support for the transmission side of things on the Republican side?

Senator Martin Heinrich

There is, and look, the transmission pieces of that largely lived in that Energy and Natural Resources effort. They don't live in the Environment Public Works Committee. That's where a lot of the NEPA stuff would happen. But in terms of having a balanced product, we came up with something that satisfied both sides. John Barrasso is from Wyoming, a conservative Republican, cares about oil and gas production, and he championed that effort. And I, on the other side, have spent my life trying to make transmission work. We came up with something that both sides could agree creates a lot more certainty in the process and a faster path to either yes or no.

I mean, there are lots of times when the answer needs to be no, but you need to get there in a year or two, not in 12. So, I think this is actually doable. And if you want to make some changes to NEPA, you have a chair and ranking member in EPW in the Environment Public Works Committee that work well together too. So, take a crack at that as well. If you put it in reconciliation, it's really a roll of the dice and how long will it last? And in permitting, we want the solutions to be in law and we want them to be durable.

David Roberts

The people on the clean energy side who were advocating in favor of this previous permitting reform effort, there's a lot of division on the left, I'm sure you're aware, but the people who are for it, their basic point was, "If you make everything easier, clean energy wins."

Is that your take? Is that your take?

Senator Martin Heinrich

That's 100% my take.

David Roberts

Is that the Republicans take, like do they know that?

Senator Martin Heinrich

I think they're selective about their data sets. So, I'm not sure that they have quite realized that. Because if you ask them about energy storage, they're like, "Well, it doesn't even work yet." I'm like, "Well, in New Mexico, 15% of our generation mix is storage. Like, what do you mean it doesn't work?" But you never get everything you want in a legislative vehicle. But you can get what you need. And we will continue to make progress. When 95% of what's in line to go on the grid is clean, we're winning. We just need to win faster.

David Roberts

Win faster. You know, the process, as you say, it's not clear what the process is going to be. There's usually sort of a vote-a-rama towards the end of things where people throw out amendments. I'm just curious if there are particular — I mean, maybe you don't want to show your hand exactly what sort of amendments you have in your back pocket, but are there areas... You know, as you said backstage, like, mostly this is just about accountability. It's just about making people vote against things in public so they're on record for it.

Like what, what sort of things would you like to bring up and force your Republican colleagues to vote against?

Senator Martin Heinrich

Well, as you said, there's an awful lot of benefits in specific red states and districts. So, you know, highlighting where people are on those things, if you've got a battery factory, like those are the kind of places where I think we really need to press that accountability. There's no doubt that some of that is going to be determined by what comes out in the Parliamentarian's process and then what's left. And then you have to focus on what's left.

David Roberts

Can you just talk briefly for people who have not been following this debate? Obviously, there's little to no prospect of restoring the tax credits fully, the wind and solar tax credits, or restoring the tech-neutral tax credit. But there are perhaps opportunities to undo a little bit of the damage that was done to them. Can you just go through a few of the sort of specifics?

Senator Martin Heinrich

Yeah, I think the two areas where, if Republican senators choose to lean in, they can see substantial improvements to the predictability of the next few years is one, that the language is all over the map about how to wind up the IRA tax credits. And you never, like, you never want to deal with a situation where you're making a decision about whether you get the credit or don't get it based on when the project goes into service. You need to be able to plan based on when you start building the project.

David Roberts

For the obvious reason that you can't control when your project goes into service, it's dependent on a bunch of factors beyond your control.

Senator Martin Heinrich

Exactly. So, bankability is a problem. They could choose to fix those issues, and that would make a giant difference. I also think the foreign entities of concern language that the House put in is just a big red tape mess and no one can figure out how to comply with it. So, come up with something that actually says, "Okay, there's a real issue here, and we're going to respect that, but we're going to have language that the rules of the road are clear to actual project developers."

David Roberts

Yeah, and as you say, it's a little odd to go so overboard to prohibit anything coming in from China, but then also to kill the domestic manufacturing credit. Like, where do they, where else are they going to come from? Where do they think they're going to come from?

Senator Martin Heinrich

Intellectual consistency is not a strong suit right now in the...

David Roberts

Yeah, well. So, I don't know if they like what's been said privately, but, like, Capito's on the record wanting hydrogen hubs back. Hoeven wants the geothermal thing restored. I think Tillis has been on about the messy FEOC language. So, like, people are taking stands. And I would think intuitively you wouldn't stick your head out and do that if you weren't going to follow it on, because otherwise you'll look like a jerk. But then a bunch of House Republicans just did that. So maybe they will do that. But are you hearing other people more quietly behind the scenes?

Senator Martin Heinrich

There's a constellation of roughly seven or eight senators who are worried about a number of these provisions. All they need to do is get together and agree we're going to support one another and demand some changes, and changes will be made. So, if it doesn't happen, it will be a choice by their choice not to exercise the leverage that they have.

David Roberts

Before we turn to some audience questions, I want to ask a little bit broader political question. So, the political theory of the case with the Inflation Reduction Act, and I think this is also true of the Infrastructure Act and CHIPS too, is if we flood red districts and states with new investment, new factories, new jobs, new opportunities, we will make this irreversible. Basically. Like, this will give it political resiliency. This was sort of like the premise of the Biden administration. And like this, the House vote really seems to cast that whole theory of the case into question.

But if tangible benefits to your district don't sway you, what's left? Like, what does? What world are we living in? What are the political physics of this new world? What sways people anymore?

Senator Martin Heinrich

I mean, I think we'll learn what the political physics are when we see what the impact of these actions is in the next election, which I think will be substantial. I think the problem here is the timeline was too short. And then you have the sort of cultish issue around Donald Trump where he's able to change people's minds in a way that previous presidents were not. And so those things combined in a way that really broke down. I think if we had five years of factories, you know, being ingrained in those communities, it would sway a lot more House members.

David Roberts

Yeah, and I guess sort of the other half of that is, it's a little disturbing that it didn't move more Republicans, but it's also a little disturbing — and this I've heard from people in the Biden administration — they are disturbed that in their view, they didn't get much credit from the left for it either. In their view, they didn't get credit from anybody for anything. It seems like the space whereby a Democratic administration can be successful is just shrinking and shrinking and shrinking. The passage is getting narrower and narrower. You have enemies on all sides. You have no friends. Am I overdoing this?

Senator Martin Heinrich

It's a choice to tell that story. And I don't think we told that story effectively. Now, I mean, I will tell you that my closing ad was built all around the ability to build big clean energy projects, and it was full of IBEW workers and laborers. And, you know, the reality is that I performed very well in my state, higher than, you know, there was a delta between the Senate race and the presidential race. And it was partly because a lot of center-right, skilled tradespeople could see themselves as part of the team in those ads.

And that was not the story that got told by either the Biden or Harris campaigns effectively. I mean, those got caught up in other issues. And so, we didn't tell that story. And if we had told that story on a national scale, I think people would recognize just how much the world has changed as a result of the Inflation Reduction Act.

David Roberts

Okay, final question before audience questions. This is a question that I've asked every public official I've spoken to since the election. Out in Democrat land, I think there's a sentiment that Trump came in and just started steamrolling and has met weirdly little resistance. There was weirdly little — where are the heroes? Where are the people standing up? Where is everybody? You know what I mean? Like, everybody's looking around like, "I thought you were going to stand up to this." So, I think people on the left are like, "Where's the fight?"

So, do you think that's a fair critique? A and B, where is the fight?

Senator Martin Heinrich

I understand the need for that because this is an administration that is behaving in ways that we have not seen in modern American history. I also recognize that you have to look at the tools and the math that you have, and right now, we don't have the math. If you want to constrain this administration, get busy. The biggest opportunity we have to do that is going to be the midterm elections. We will slow things down and we will filibuster and we will do lots of things in the meantime. But right now, you have a situation where they have effective control of both houses of Congress.

They have the White House, and more often than not, they have a friendly Supreme Court and a friendly court electorate, except for the very extreme, clearly outside the box, extralegal things that they have done. And in those cases, the courts have been constraining them and the system is working. But I think it is not going to be any magic person in the House or the Senate. It's going to take all of us, and it's going to be the most powerful thing that is changing our ability to slow them down or change outcomes is actually the things that are going on in red states, in red districts where people who normally would be seen as absolutely friendly are questioning what these Republicans are doing.

So, when you start laying off veterans by the thousands at the VA, and then you go home and you hear about it, that's the stuff that is actually creating the space for us to begin to govern again and begin to limit the impact of this excessive administration.

David Roberts

All right, well, let's take some questions. Do we have a roving mic? Hands up if you have questions.

Audience Question 1

Hi. First of all, thank you guys so much for this talk. It's been really amazing and very informational. I want to push you on the last question. You know, we have a lot of industry, we have NGOs, a lot of maybe former DOE employees in the crowd. And I want to ask what we can do to make your job easier. I mean, is it money? Is it media? Is it new reports or new research? What can we do to help get legislation passed while not being in government?

Senator Martin Heinrich

I think one, it's really helpful when groups are pragmatic and support what is never going to be perfect. Like, this is not a game of the perfect. It requires compromise to get real, durable things done in Congress, no matter who's in charge. And so, being the adult in the room who's willing to take some arrows because things are never going to be perfect, that's an important dynamic. I think in the midst of this current situation where we have the Trump administration really running roughshod over many of our norms and our democratic institutions, I think the most powerful thing that people can do is tell their own stories.

So, when somebody gets online and says, "You know, I spent this many years in the Marine Corps and then I went to work for the Veterans Administration, and I got let go after my promotion because I didn't have a year's worth of service," that resonates with people. And it tends to find its way in front of my colleagues who have sort of stopped listening to the phone calls, the letters, and the emails. It gets in their feed because it's algorithmically based. And the same is true of people's jobs. Like when you attack somebody's job, what they did with Empire Wind, I thought that was absolutely unacceptable.

You take a project that was fully permitted, and you try to do something outside the law to then threaten 2,000 union jobs. Like when those folks get online and say, "This is what they did to me and this is what it meant for my kids and my family," that stuff resonates. And I think we need to urge people, if you've been impacted by some of these extreme abuses of power, tell your story. When I go to the floor, I don't talk about what I think. I oftentimes read from the letters. I tell people's story from my state.

Audience Question 2

I just want to say thank you so much for your plain speak. You started off talking about a brain drain, and I just want to know if you see a road back from that, because that is real, and I don't know how long those consequences will last. So, I'd love you to talk about that.

Senator Martin Heinrich

It is real, and it will take time. The sooner we can start, the better. I mean, we need to change the discourse in this country to one again, where we can argue about our opinions, but facts should be facts. And the way we've allowed the social and other media to be so fractured that people are able to consume the narrative of what's going on in this country through a soda straw instead of having some common understanding of what we are as a nation is really caustic to our ability to lead and to compete with our near-peer competitors.

So, we need different leadership. Elections matter. And then, we are going to have to, like, day by day, show that we value those things. We value how we compensate you, how we talk about you. We have to stop with this dumbing-down approach to the world. It is not in the interest of a great nation to do that.

David Roberts

Yeah, and I'll just add something. I saw on social media a couple of days ago, a letter from a guy who'd been let go from the NIH and had tweeted about it and then followed up saying, "Less than two hours after my tweet, I got a letter from the Chinese authorities with an offer to move my lab to the city of my choice with full funding for 20 years."

Senator Martin Heinrich

And if you don't think that the science that we do has value, I think they understand the true economic value of our scientists and our engineers.

Audience Question 3

Thanks so much for a great conversation. I have a question that's related to a very public departure from the administration last Friday. Elon Musk is no longer leading the DOGE effort.

David Roberts

Let me just clarify. Unclear, maybe.

Audience Question 3

Well, whether he is or isn't, he made some pretty controversial statements about OB3. And my question to you is, are his comments helpful to the Senate, or are they a head-fake?

Senator Martin Heinrich

I have no idea at this point. I mean, we've all been through this with Elon where like, "Oh, he's an interesting guy. He's pro-science, he's into electric cars. Well, we kind of like him." And then he swings and becomes the person we've seen for the last couple of years, and now he's swinging back. So, I try not to obsess about anything that he tweets. I try to pay attention to, you know, what he does. I don't know how it's going to play out. It probably pushes the two factions of Republicans a little further from each other, which is not a terrible dynamic to be able to slow things down and dig deeper into this thing and make people understand that 13 million people are going to lose their healthcare, and kids in a lot of states are not going to have money for their schools and the actual implications of this stuff.

But it could change tomorrow too, as we've seen happen again and again.

David Roberts

And just a quick follow-up, because I meant to ask you about this earlier and we forgot to talk about it. But one thing Elon tweeted about is AI. So maybe just say a quick word about what your colleagues are missing about AI in this bill, just real quickly.

Senator Martin Heinrich

This bill is a direct pathway to much more expensive electricity costs, higher electricity bills, and the inability for us to compete effectively with our competitors on artificial intelligence. The short version of this is simply that the energy they want to build, whether you want to build small modular reactors, or stick a combined cycle natural gas generator on the grid, or old school AP last generation nuclear reactor, all that stuff, great, that takes time. And so all this stuff that is fast and cheap and that we can do immediately is the stuff they're killing in this bill. 95% of the stuff in the queue, over 90% of it is renewables and around 95% of it is clean if you throw nuclear into that bucket. But the stuff that we can build, we've already built on the nuclear side.

It's going to be a few years before the next reactor comes along. If you order a combined cycle natural gas turbine yesterday, you're going to get it in 2030. So, are we going to starve the entire grid at the time of the largest increase in demand since the air conditioner became commonplace? That's what this bill is going to do. And the impact of that, you know, I've warned my colleagues, the impact is going to be prices are going to go up for electricity everywhere, and we're going to make darn sure people understand why that happened.

David Roberts

All right, on that note, thank you, Senator Heinrich.

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, I'm digging into the surprisingly overlooked world of electric motors with Ankit Somani of Conifer, a startup aiming to revolutionize these unsung workhorses of the energy system. We explore their ambitious approach to making motors lighter, more efficient, and cheaper to build, all while ditching problematic rare-earth magnets.

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David Roberts

All right, hello everyone. This is Volts for June 11, 2025, "Making electric motors better." I'm your host, David Robert. Here on Volts, we have covered all sorts of electrical devices and technologies, from solar panels to batteries, appliances, and EVs. But there is one technology at the very heart of the electricity system that receives strangely little attention from those of us in the clean energy space.

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I'm talking about the humble motor. Electric motors are found everywhere from scooters and leaf blowers to HVAC equipment, water pumps, cars, and planes. Something like 50 percent of the world's electricity flows through them. And if we're going to complete the energy transition, then everything that now runs on a fossil-fueled engine will eventually have to run on an electric motor.

Yet, I have given motors scarcely a passing thought over the years and have seen very little discussion of the subject in clean energy circles. It's been nagging me for the last year or two, and I've been waiting for the right opportunity, so I was pleased when the folks from Conifer got in touch.

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Conifer, which just received its first $20 million in seed funding, is designing electric motors and drivetrains that are lighter, more efficient, more cheaply manufactured, and made without rare-earth magnets. Or so they say! I'm going to talk with co-founder Ankit Somani today about how to improve motors and what the future holds for them.

All right then, with no further ado, Ankit Somani, welcome to Volts. Thank you so much for coming.

Ankit Somani

Thank you, David. It's great to be here.

David Roberts

Let's talk about how you ended up here. So, you're what they call a serial entrepreneur. You've had your hands in a lot of different clean energy businesses over the years. So, you look around for your next big thing. Why motors? Why motors and powertrains? What's the logic that brought you here?

Ankit Somani

You know, just like for most folks, my career has been long and windy as well. I actually first came to the US in about, I think, 2007, right in the middle of the financial crisis to do a master's in data center cooling. Yeah, as you can imagine, it's a hot topic now.

David Roberts

Very prescient. Yeah, well, it was a good call.

Ankit Somani

So, it was a long time ago, but had a really good program around that and then spent years in Oracle and Google designing different cooling and electrical equipment for data centers. It was a very focused R&D team, so had an early background around motors and different aspects of it back then. But then forgot all about it for the longest time. So, the first startup I did that was in conversational AI, a very different space. We had a good opportunity to scale and then eventually sell that company. And then I reconnected with an old friend of mine from undergraduate who has been living and breathing motors since third year college.

So, he did his PhD in electric motors, had recently designed electric powertrains for Apple's secret car project, and then for Lucid. So, lots of deep background there. And we started chatting about the problems across the board in motors all the way from how we choose the supply chain for it, what sort of manufacturing processes exist today, what are challenges from a design and performance standpoint. And the biggest takeaway we had was if we really want to see a lot more electrification and physical automation — you know, we are sort of stuck in the 5 to 10% penetration in that world — and if you really want to see something which goes way above 50% penetration, then you have to think about the electric engine from the ground up.

I use the word engine because, just like fuel tanks, a battery is an energy store. But you got to take that and convert it into a spinning wheel or a spinning fan on the other side. So, everything in the middle is the engine itself. And you have to think about it ground up across all of these three areas. We had a few innovations in mind and one thing led to another, and here we are.

David Roberts

I suspect lots of listeners are roughly like me in this area, which is floundering in near total ignorance of physical engineering. So, you'll have to be patient with me as we walk through this. But a motor is part of a powertrain, which consists of the motor, there's an inverter, a gearbox, and some sort of control software. If you add all those up together, is that sort of the equivalent of a fossil-fueled engine? Like, a fossil-fueled engine has all those bits in it?

Ankit Somani

That's exactly right. You described it perfectly.

David Roberts

So, powertrain is like the electric equivalent of an engine, basically.

Ankit Somani

Correct.

David Roberts

And you are at Conifer, working on motors, but also, as I understand it, working on inverters, gearboxes, and control software. The whole package.

Ankit Somani

That's right, yeah. We are a verticalized electric powertrain company and not only on each of these three or four aspects that you mentioned, which is motor, inverter, gearbox, control software, but also we have experts internally reinventing the manufacturing process and automating it.

David Roberts

So, is it your experience... like, am I right, that this is an odd sort of lacuna? You know, there's so much activity around clean energy these days. So much excitement, so many startups, you know, it's buzzing. I'm not wrong, right, that it's a little weird that the heart of all this, the engine that drives trains at the heart of all this, have had very little attention paid to them by all this wave of entrepreneurs? Like, is there activity in this area that I've just been missing or am I right that like, it's been neglected?

Ankit Somani

No, you're absolutely right. And that was actually an observation we also had when you arrived about two and a half years ago, where if you look at the battery world in the last 15 years, there's been so much investment, so much good talent that has gone in there, so much focus. And around the world, like all the way from battery chemistry to the anode to the cathode to recycling, the whole process. Every different aspect of it. So, batteries got maybe a thousand times more venture capital and maybe a million times more attention.

An electric motor, the humble electric motor that has served us for over 100 years, people had forgotten about it. They thought, "Hey, we think it's a one and done problem," but there's so much to it that was worth solving.

David Roberts

So, as I understand it, and tell me if I'm right about this, Conifer has sort of three big innovations that I would like to walk through one at a time. The first is you're making an axial flux motor rather than a radial flux motor. We'll get to what that means. The second is you are using iron-based magnets rather than rare-earth-based magnets, which has big supply chain implications that we'll get to. And the third is these innovations in the manufacturing process, basically making it easier and cheaper to manufacture these things. Are those roughly the big three?

Is that roughly the menu here?

Ankit Somani

Yeah, that's very close to it. And within the actual flux itself, we have reinvented the core stator itself, which essentially enables all these three things and makes it possible.

David Roberts

Got it. Okay, so let's start with — I spent a couple of nights ago, several hours falling down a YouTube rabbit hole about radial versus axial flux motors. Turns out there's a lot of material out there, a lot of strong feelings, oddly strong feelings about these engineering decisions. So, if I can just describe this very basically and tell me if this is correct, there are two basic parts to the electric motor. There's the stator, which is the static component that contains the copper coils. And then there's the rotor, which is the moving component. That basically is moving magnets past the copper coils, and that's what generates the electricity, is moving magnets past electric coils.

So, in a radial flux motor, the stator, the static bit, is like a cylindrical tube, and the rotor is inserted into that tube. It's like a little cylinder inside a bigger cylinder. That's what radial means. That has to do with the angle of the magnetic field toward the magnets — but I don't know that we need to really get into that. Axial flux is, rather than a tube inserted in another tube, it's like two discs next to each other. Like, think of dinner plates or something right next to each other. One is the stator containing the coils, one is the rotor containing the magnets, and the one spins next to the other one.

That's an axial flux motor. Is that roughly correct?

Ankit Somani

Very good. I feel like within two days itself, you almost became an expert across all of these things. By the way, I'll add a fun fact. Nikola Tesla's first patent on electric motors — this is back in the late 1800s — that was for an axial flux motor.

David Roberts

Interesting.

Ankit Somani

And even though 90, 95% or even higher motors in the world today are radial flux motors, that's where both manufacturability and innovations were over the last century.

David Roberts

Yeah, can we explain that a little bit better? Why did radial, like, as you say, something like 95% of the electric motors around us today, are radial flux motors? Is there an easy-to-understand reason why they came to be so dominant?

Ankit Somani

Yeah, actually, when electric motors first started, they didn't even necessarily have magnets in them. So, your rotor was excited. You basically created an artificial magnet by rotors also having copper coils and current going through them. The connection itself is much simpler when you do that in a radial flux configuration. So, it's easier to get started that way. And then, as you know, these things are always incremental. People build on top of each other. A once forgotten architecture, now with the right permanent magnets or the right coil winding, actually has much better advantages than the typical radial flux motor.

David Roberts

Yeah, yeah. As I understand it, you get a bunch of advantages from going axial flux instead of radial flux. But as I understand it, the thing that's tricky about it is just that it's a little bit more precise and a little bit more difficult to manufacture. That's why there's not been a larger move in that direction. And you guys presumably are tackling that problem. Tell us quickly then, what are the advantages of axial flux over radial flux?

Ankit Somani

In an axial flux motor, or actually any motor, the way you determine how much force that motor is able to generate, which in motor parlance, is called torque. Torque is essentially force over a distance. In a radial flux motor, what happens is your cylinder, as you were talking about, that is inserted, the spinning cylinder, which is inserted in the static cylinder. That's at a much lower radius. And so the force that you have to produce is a lot more so that your torque is still similar because your distance is small, because it's a small cylinder. Small radius cylinder.

David Roberts

So, it's just as simple as, like the spinning part on an axial flux motor is larger, it has a larger radius, and thus it's sort of, you know, swinging around a larger perimeter.

Ankit Somani

Yeah. Think of it as the force generating part, which is where the magnet is in, is right next to it. It's called the air gap in that parlance. But where the magnet is right next to the stator coils itself, that's much further out in an axial flux system. So now, if you can make it further out, but also at the same time generate a higher magnetic field as well as spin it faster, then you can generate a lot more torque as well as power from the same amount of material compared to a radial flux system.

David Roberts

So, the basic and perhaps most key advantage here is that you can make them smaller. You can get more torque out of the same amount of material or alternatively, an equal amount of torque out of a smaller motor.

Ankit Somani

Correct. And the term that's used very often is power or torque density, which technically is power produced over a volume of space that you occupy. But even as power over weight, like kilograms or pounds, even that can be much higher in an axial flux system.

David Roberts

And as you said, you guys did not invent axial flux motors. They've been around for centuries, and they're even around a lot today. How is your sort of torque per volume relative to other axial flux motors? Like, are you pushing the boundaries on that particular metric?

Ankit Somani

Yeah, absolutely. So, there were changes we made in the stator itself, which allowed us to compact a lot more electrical conductors in the same space.

David Roberts

Coils, right? Those are the copper coils, right?

Ankit Somani

That's right. And that's the principle of electromagnetism that a motor is based on, because a current-carrying conductor produces a magnetic field around it. So now, in layman's terms, if you can have a lot more conductor in the same space, while effectively being able to cool them because they run hot as well.

David Roberts

Yes, this is something I ran into as a problem. The heat, dissipating that heat. So, you've crammed in more copper coils and figured out some way to disperse the heat from them.

Ankit Somani

That's right. And cramming it in doing two different things. One, it generates a much stronger magnetic field, but at the same time, cramming it in a way such that the manufacturing process in fact becomes much simpler than a typical radial flux system. So not only have we made axial flux feasible, more feasible rather at scale, but it has become a tenth simpler than a typical radial flux system in terms of winding that coil.

David Roberts

And here, you're just referring literally to the physical manufacturing process of getting the coils into the stator and completing the stator. That process, you've made it easier.

Ankit Somani

That's right. Making the coil, making sure it's in the right place in the stator, and making sure we can do it with the least amount of, or least complicated, manufacturing process that we have invented.

David Roberts

Right. So, you can make these smaller. You can get the same amount of torque out of a smaller motor. So that, I think, explains your business plan, which is starting basically with small motors. The second innovation is in the magnets. Typical electric motors use magnets that are made out of rare earths — neodymium. Did I say that right?

Ankit Somani

Yes, you got it.

David Roberts

Neodymium is the main one, I think. And there are, I think, a couple of others involved. And of course, listeners to Volts know that China completely dominates the mining and even more particularly the processing of rare-earth minerals. So insofar as all electric devices require motors and all electric motors require rare-earths, China has, you know, power over not just our electrical grid. I mean, they have some trade power over, you know, our lawnmowers and cars and everything else that has an engine in it. So there are economic and national security reasons to move away from rare-earths.

Long story short. So, how did you do this? Because my understanding is that the reason you use rare-earth magnets is that they are particularly potent, powerful. You're replacing them with ferrite, which is, as I understand it, basically iron. So, how are you compensating for that loss of power?

Ankit Somani

Yeah, by the way, ferrite magnets are 86% rust. So, it is literally, literally ferrous oxide, 86% rust. And these are the same magnets that you would find in your, you know, the kitchen fridge, stickies that you have which stick well on your kitchen fridge. Those are the ferrite magnets. It's the same. So, there are two key challenges that had to be solved. First, as I was talking about earlier, if you can generate higher magnetic flux from your coils, which we talked about from our state of technology, we can. Then, you can pair it with a weaker magnet.

So, that is the first innovation, and that helps from a torque standpoint. Now, very simply, like the way you think about power. In a typical world, it's force times velocity, and in the motor world, it tends to be torque times how fast you can spin it. So, if you have to increase power density now, if you've gotten torque to a good point, now you have to spin the motor faster to be able to do that. So, one of the challenges you have with ferrite material is it's like ceramic material. You know, if you've ever had something ceramic and it has fallen, slipped out of your hands, you see it breaking very quickly.

David Roberts

Yeah. Brittle.

Ankit Somani

It's the same problem with ferrite magnets. So, we figured out how to structurally save it. When you spin it at much, much higher speeds, structurally strengthen it.

David Roberts

So, it literally just holds together at higher speeds.

Ankit Somani

It holds together much better at higher speeds. Make sure the integrity is good. So, it was partly because we had a better stator and partly because we figured out structural challenges from a ferrite standpoint. That's what allows us to use a weaker magnet. It's not just a weaker magnet, by the way, it's much, much more cost-effective, like, compared to rare-earth magnets —

David Roberts

I mean, iron is, you know, abundant, let's say. Not expensive.

Ankit Somani

It's less than half the cost of copper itself per pound. It's that cheap.

David Roberts

And very easy to get anywhere. You don't need a foreign supply chain. So, by getting more out of your coils and by spinning faster, you've basically compensated for moving from a stronger magnet to a weaker one. And so, this is allowing you to use much cheaper magnets and magnets that don't require foreign supply chains, basically.

Ankit Somani

That's right.

David Roberts

Before we get to the manufacturing part, let's just talk about what you're going to do with this new motor you've got. What is the sort of first step on the business plan?

Ankit Somani

You know, one statistic that blew our minds when we started looking into it more deeply is that there are 1 billion small gas engines that exist in the world.

David Roberts

I know. And they're the dirtiest per weight per unit. The dirtiest fossil fuel technologies. Almost these little like scooters and leaf blowers and all those little things.

Ankit Somani

Exactly. In fact, California has a very interesting acronym for it. It's called SORE. They're literally SORE, small off-road gas engines. And you know, you're right, they're dirty in terms of SOx and NOx emissions. While the world focused on cars and trucks, we sort of forgot about making these better. And just for reference, by the way, when I say 1 billion gas engines, there are about 1.4 billion cars. So it's roughly in the same order of magnitude that exists in the world. And so that's the market we want to target because it's often forgotten but extremely important from an electrification standpoint.

David Roberts

So, where are those motors? Like, those billion motors presumably are clustered in a few big product categories. Where are they?

Ankit Somani

There's so many different applications. I'll name a few. There are two-wheelers, small delivery vehicles, three-wheelers. You have all sorts of power tools and equipment. If you've used a pressure washer, you would see it in that. If you use a commercial lawnmower, you'll see it in that. You have agricultural equipment. Almost all agricultural equipment have that. It's really spread across many, many different applications. The thing we wanted to solve is with a few different SKUs, can you address most of these applications? Because then you can create something standardized. Like let's say you go to a place that sells you gas engines, you can say, "Oh, I need a Honda 5 horsepower gas engine," and they'll give you a standardized unit that comes out.

So, what's the equivalent of that that we can produce, which people can just deploy?

David Roberts

So, that engine can go in a number of different applications. And so, similarly, you're trying to make a motor that can sort of work into all these different applications.

Ankit Somani

Absolutely. And this is a big part of our story, but it's only part of our story. There's a whole set of stationary applications which are, you know, we were talking about data centers earlier, but all sorts of fans, pumps, all the physical industrial automation.

David Roberts

Talk about things people don't think about. We're surrounded by those, and they're practically invisible.

Ankit Somani

There's a reason why 50% of the world's energy goes through these motors. They are everywhere.

David Roberts

Yeah. When I started reading about water pumps, I was like, "Wow, that is wild." You really are surrounded by those. And so, we have electric motors now; you can get an electric leaf blower. So, does your little motor outperform whatever little motors are in today's leaf blowers? What are those motors in today's leaf blowers? What's wrong with the sort of, you know, like why aren't they spreading faster? What's wrong with today's small electric motors?

Ankit Somani

Very good question. So, there are two or three factors that really will matter for us to go from, as we were talking about earlier, the 10% or so electrification to 50, 60, 70% electrification. First is, do they do the job in a way that consumers like, which means low noise. If you think about leaf blowers, I don't want to carry something 10, 20 pounds in my hand all the time. Are they light? At the end of the day, are they cheap enough? Because the next set of consumers, they don't think about being green, they just think about whether it is affordable, reliable, and more cost-effective.

That's what they care about. So, it's those factors that you need to push on. And now, with rare-earth material coming more into the spotlight, you need to solve for supply chain issues. One of the biggest things we see recently is customers coming to us and saying, "Hey, we are not able to get enough of them." And it's like long lead times associated with it because there are some critical parts coming from very supply chain constrained global places. So, it's across all of these factors that you can make an improvement.

David Roberts

One of the things you boast about your stator is that it's much lighter, like your whole motor is lighter than existing motors. How is that? Where are you saving the mass?

Ankit Somani

So, a very common material that is used in electric motors is called silicon steel. And we have eliminated 95% of silicon steel from our stator itself. We also use 20% less copper at the same time. By the way, the reduction in steel is not just in the actual material itself, but the way steel is put into these motors. There's a lot of scrap material generated and we are again, we've innovated on that. In our case, the amount of scrap that is generated is very, very low. So, it's also a much simpler process.

David Roberts

Did you substitute some material in particular for the steel?

Ankit Somani

No. So, there's no switch in bait. There's no, "Oh, we're not talking about some fancy material that we are using that others don't." It is simply the right manufacturing process coupled with the right design. And then that allows us to also use other simpler materials like the rare-earth-free magnets, which are iron magnets on top of it. So, we need to take inspiration from how IC engines were made, where there were simple materials, simple processes made across the world. That's how electric motors and electric engines need to be. Not like complicated materials or complicated processes.

It needs to be as simple as IC engines for it to be prolific.

David Roberts

So, your first two products, just to get back to the business plan here real quickly, the first two products are a motor that is sort of freestanding and can go in pumps and stuff like that. And then what I found very interesting is this in-wheel motor that you're making. Well, I guess, that is technically a drivetrain because in the wheel you have the motor and the gearbox and everything. So, talk a little bit about your innovations outside the motor in the inverter and gearbox and control software and stuff like that. Like, are you also pushing ahead on those?

Ankit Somani

Yeah, absolutely. So, our core product, the product that we started with, is an in-wheel solution. And our vision there is, you actually should not be putting motors in the chassis itself as much as possible.

David Roberts

And that's up to what size, you know, what's the limit on that? You mean even like cars, big trucks?

Ankit Somani

I absolutely believe that cars and trucks are going in the direction of not requiring motors inside the chassis. It'll be all in the wheels.

David Roberts

And this is something like I read a very sort of excitable, futuristic, etc. book about electric vehicles way back in like, I don't know, it was like 2007 or something. And one of the things that the engineers were most excited about were these in-wheel motors. Because that just frees up the design space. Like, design-wise, it's incredible. It just completely opens a blank slate everywhere else. Right. Like, you can put any platform, any structure, any kind of vehicle. Like, if you have the motor in the wheel, you can build anything on top of those.

Like, you know, the sky's the limit.

Ankit Somani

Yeah, exactly. And imagine, as simple as, "I'm going to take this wheel, I'm going to connect this with this chassis, and boom, I have a new kind of platform that I can work with versus custom designing for each vehicle." And you're absolutely right, it's been the dream for electric vehicle makers for the longest time to have a solution like that. So, we are big believers, very long on that. And that required innovation. Not just in the motor, which is very compact for us, and we have this modularity element to like, we can have a single motor or a tandem motor or three motors, like in the same packaging very easily.

David Roberts

Right. Because the axial flux motors, as I said earlier, are like discs next to each other. So, it's really just like stacking discs.

Ankit Somani

The world thinks of them as pancake motors. That is the form factor. And so now we have connected that with a special gearbox that we made internally, which is also very pancakey. And together with both of them, the system just disappears inside the wheel and so nothing sort of juts out and delivers amazing power density. So that's on the gearbox itself, the changes that we had to make.

David Roberts

And I'm just curious, this in-wheel motor, like, because when I think about wheels, there's just, you know, there's a lot of different kinds of wheels, there's a lot of different kinds of vehicles, a lot of different sizes, a lot of different, you know, weights on top of them, etc. Sort of how agnostic is this in-wheel motor? Is it the same basic thing that goes in all these different kinds of wheels or do you have to do like a different design per wheel category? You know what I mean?

Ankit Somani

Yeah, this was a key decision for us and a key value proposition of what we are doing. So, typically, what happens is there have been these products that have existed in the market called hub motors. Now, hub motors live inside the wheel as well, but they tend to spin with the wheel. And every time you change the size or shape of the wheel, you have to basically use a different kind of hub motor. So, that's your least scalable option. What we are doing is something that is in-wheel but is decoupled from the wheel. So, you can basically take the same motor and gearbox and you can put it on a 12-inch wheel, on a 10-inch wheel, on a 16-inch wheel and you can deliver different performance.

So, we are able to get to a wide variety of applications with just two or three SKUs on the motor and gearbox side.

David Roberts

Interesting. So, I'm assuming that the motor that's going to work, you know, across a two-wheeler, a three-wheeler, is not also going to work in a car. Like, presumably, you do have a bigger version of this.

Ankit Somani

That's right.

David Roberts

But are you currently able to make one that could run an actual car or are you working up to that?

Ankit Somani

Yeah, we have some interesting small car customers as well. So, we obviously have to focus in one area and that's a way from a business standpoint we just need to be more focused. But, we have got an interest and have checked out feasibility across a bunch of different applications. And you're right, it's not going to be the same motor across all of it. But within 1 horsepower to 30 horsepower, you can just live with 3 SKUs instead of 30 different SKUs.

David Roberts

I remember reading this book, now how much it got my sort of imagination going. But you know, you can just imagine like you just buy four of these tires with motors in them and you literally can like anyone can design an EV in their garage. You know what I mean? Like this moves most of the complexity into this modular format where everything else is just like Legos, you know. I just feel like it's going to open up an incredible amount of innovation once these things are ubiquitous, you know, once these things are out there.

Ankit Somani

Funny you said that there is. Since we publicly came out a month and a half ago, at least 10% of people who are reaching out are exactly those folks who are making things in their garage. They're making very interesting three-wheel, four-wheel, six-wheel concepts.

David Roberts

Yeah.

Ankit Somani

And so many of them want to upgrade it with just, "Hey, all I need is a wheel. I already have a 72-volt battery pack. I'm going to make it run."

David Roberts

Awesome. Okay, well, let's talk about the manufacturing bit. So, one of the things I read in your materials is that conventional manufacturing is tooled, heavily tooled, and you are working toward a no-tool, software-driven process. But I don't really know what that means. What does that mean? Tooled and not tooled?

Ankit Somani

Very good question. So, typically, how people have done manufacturing is they make a line, a manufacturing line, and they say, "Well, this manufacturing line, let's say, has 100,000 units per year capacity," and they invest in a bunch of machines that are tailor-built for the kind of product you're going to make on that line. So, let's say you're making a 20 horsepower motor. There's a bunch of machines on that line which are "tools" as well that are tailored to that size of the motor that you're building.

David Roberts

And cannot be used to make a 40-horsepower motor.

Ankit Somani

Exactly. They cannot be used. So, what happens in a setup like that is almost never day one, you'll see that capacity. You'd start with, let's say, 10% capacity that's being used or demand that matches that capacity. And then slowly you'll grow. And not only your ROI for the investment that you put in is going to take much longer, you also have these tools that are specific to that motor that also break down and there's less fungibility around it.

David Roberts

Fewer manufacturers of those tools, presumably fewer people who can fix them, etcetera.

Ankit Somani

Correct. Super long lead time. Because it's almost like they're artisan products. These are not large-scale products. There are like 10 people in the world or, five companies in the world who do that and they are in demand, then you are lowest in the run. So our vision was we focused right now on 1 to 30 horsepower motors. And our vision was if we can make a manufacturing process such that on the same line, the exact same line, we can make a 1 horsepower motor, 10 horsepower motor, 30 horsepower across the board without changing the tooling based on the size of the motor that we are building, then that opens up the possibility of when you make an investment in a line you can make across multiple applications, you can have your capacity utilization much higher, which means your ROI for the line is much higher, number one.

And number two, when you go from one geography where you had a manufacturing line to another geography, it's almost the same line that you can replicate versus, "Oh, this other geography needs this other kind of motor. So, I need to think about this from scratch."

So, it allows for this repeatable, automated setup that you can take from one territory to another territory and use the local supply chain of that area to be able to bring up manufacturing.

David Roberts

I see. And so, if your line is cranking out 10 horsepower engines and you want to crank out some 30 horsepower engines, you don't have to replace tools, you just fiddle with software, basically.

Ankit Somani

That's right, yeah.

David Roberts

And I sort of wonder, like, this seems obvious, right? Like why wouldn't you do it this way? So why haven't people done it this way? Like why are people building custom tools? If it is possible to build a tool that's agnostic to size, why haven't people been doing that?

Ankit Somani

I find that the best business ideas in the world are ones that seem very obvious on the surface but have lots of complexity behind the scenes. And that's basically, David, what we have here. So, the whole manufacturing process, the design of the stator and the rest of the motor, the way we integrate different parts together, the way we test them, and the testing infrastructure we built around it, all of these areas under one roof have been working towards making sure that such a line can exist. At the end of the day, we are a manufacturing company, so we got to get that right.

And that's often the biggest challenge for hardware companies. So, the team has been just focused on making that as simple as possible by making changes from a design and process standpoint.

David Roberts

And so, you have one of these, you've built one of these, you have a line now that can crank out anywhere from 1 to 30 horsepower engines or, sorry, motors.

Ankit Somani

Yeah, we have a line in place already. The line is doing smaller volume right now because we are still making sure that it can produce at a sufficient scale, getting the integrity and the veracity of it right. And we're going to be scaling up manufacturing. Part of what we are going to do with the funding is scale up manufacturing. That's where a lot of our focus is. Because we have a lot of demand, we need to get supply to the right point.

David Roberts

Yeah. And when you say a lot of demand, is there a particular, as we say, these small motors are in all sorts of things. Is there a particular product category that is banging down your door that is most hungry for these and most ready to go with them?

Ankit Somani

Yeah. On the small mobility front, we find two-wheelers, small delivery vehicles, as well as AG equipment. We see a lot of interest in that space. And then stationary products, we see fans and pumps. There's a lot of interest in that space. And what we are seeing more recently is around industrial automation as well. But certainly the first two.

David Roberts

How much can 30 horsepower do? Like, what is that? You're not going to get a car out of that. That's sort of like a tractor, you know. How big is 30 horsepower?

Ankit Somani

You'd be surprised. With four wheels of 30 horsepower, you can actually get a decent small size car.

David Roberts

Really.

Ankit Somani

It's not going to be a super powerful car, but one that is fairly affordable and right-sized for most folks that I find myself, you know, hanging out with, especially as a city car. But that's not necessarily the focus. If you look at a 20 horsepower or a 30 horsepower engine for that matter, you can easily run, you know, a decent size, or rather a small size tractor on it. You can run lawnmowers on it. You can run a lot of industrial automation, you know, food processing plant conveyor belts, pumps.

David Roberts

So, you're covering the bulk of the, you think, the motor market with 1 to 30. Like, that hits most of the market?

Ankit Somani

That's where most of the commercial volume is. So, there are residential customers as well. But, and that tends to be super high volume as a product. So, think about, you know, the split AC unit that you may have inside your house that's lower than 1 horsepower, where the volumes are super high, but it's a different class of products. And then you have much bigger than 30, 40, 50 horsepower, but their volumes tend to be much lower. It just tends to be a bigger unit.

David Roberts

Right? Yeah. So, is there any plan to build like a, you know, whatever, 30 to 60 horsepower line? Are you just going to be content with the low end of the market for the time being?

Ankit Somani

Now, we are a powertrain-focused company. We will continue to work across all sizes of powertrains, but we got to have the crawl, walk, run. Where we have sufficient demand, as I said, we have to make sure our manufacturing line continues to perform at scale. Customers are happy with that and then we can expand in both directions on the smaller as well as the bigger end.

David Roberts

So if I was going to build modern luxury car, you know, like a Tesla in the sort of Tesla market segment and I wanted comparable performance, what is that horsepower in those motors, in those wheels?

Ankit Somani

Yeah, and Tesla produces many different cars, but think somewhere between 200 to 500 horsepower, and 400-500 horsepower is like a really luxury PLAID type car. And I think 200 horsepower is a sweet spot for a lot of the medium-duty cars that you would find out there.

David Roberts

So, when I say a 200 horsepower car, does that mean four 50 horsepower motors? Like, they're additive.

Ankit Somani

Exactly. And one of the things, you know, we talked about rare-earth free magnets, but our architecture is such that you could swap out the ferrite-based magnets or the iron-based magnets with rare-earth magnets and significantly boost performance in the same system. So it's kind of rare-earth agnostic, where with ferrite we are able to beat power density in the application classes that we are targeting. But with rare-earth, it could be a lot more and we can easily use that to address the higher end of the market.

David Roberts

Oh, so you think when these things do end up in real full size cars, they're probably going to be using the rare earth magnets?

Ankit Somani

Yeah, I think for trucks it's possible it may continue to use ferrite magnets. But my guess is with cars, the kind of performance expectation people have for the larger cars, it may still need — It doesn't have to be rare-earth magnets, it just needs to be stronger magnets than just purely ferrite magnets that are available today. And there are lots of chemistries that people are working on already. For us, that would be a drop-in replacement.

David Roberts

Ah, so chemistries that avoid the rare-earth, avoid the supply chain struggles.

Ankit Somani

That's right.

David Roberts

And this is like, you know, I feel like I asked this once already, but I keep going back to it, which is like the whole world is electrifying. Certainly, the biggest country in the world by population is the fastest electrifying country. And everybody, everywhere you look, is hurtling toward all sorts of cool electrical innovations and electrical widgets, you know, and electrical systems and wires and just like the whole thing. And yet here, 50% of the world's electricity goes through these motors. And like somehow you're the only company who's like taking a go at making them better.

It seems crazy. Like, surely there are people in your wake. Surely this product category is going to get more active soon, don't you think?

Ankit Somani

Yep. The stationary world, which is where, you know, the statistic of 50% of the world's energy is passing through it, which is all the way from, you know, commercial HVAC to food processing plants, to pumping to residential applications. There have been lots of incremental innovations that have happened over the past, even like the last 20, 30 years. One of the biggest challenges that happens when new innovations appear is they tend to be lab projects and the manufacturability has not been 100% solved or that becomes an afterthought. And in some cases, technologies are mature, but they are still very heavily dependent on rare-earth.

So, while they have pushed things forward, there is a high dependency. So, it's not that we're not claiming we are the only electric motor innovation out there. And in fact, I don't want that to be the case because if the entire world needs to move forward, it can't be dependent on just one innovation alone. There needs to be many different innovations for different sorts of applications. It's just that we have focused on material design, which is performance and manufacturing process together because we think the combo is needed to make something significantly forward.

David Roberts

Yeah, the manufacturability thing is really key. Over the years, I've come to pay a lot more attention to that, you know, because like if you're looking into lithium-ion batteries and you're trying to explain why they have such a lock on that category, it's partially chemistry, but mostly it's just they've manufactured the hell out of them for a lot of years and gotten really good at it. Like that alone is blocking a lot of other products out of that category. Just the manufacturing has been honed so well. So, I have come to take that a lot more seriously.

One more question about the limits of these things. You know, there's a lot of debate about electrifying larger transport. You know, there's a lot of debate about how far electricity can go or whether you're going to eventually need some sort of combustible fuel, you know, in ships, airplanes, etc. You know, and most of that discussion has focused on the battery side of things. Like, can you get enough energy and power density into a battery to run a plane? But it occurs to me that like the motors are the other half of that story.

Like they're the, you know, like they're the yin to the batteries' yang. Are there improvements in electric motors, do you think, on the horizon sufficient that they could move up and start moving bigger things like planes?

Ankit Somani

Yep.

David Roberts

Are these going to help crack, you know, if you can make motors good enough, are they going to help crack some of these hard to decarbonize sectors?

Ankit Somani

Yeah, absolutely. And you know, hidden within your question are two aspects: when you say bigger, sometimes that just means more kilowatts, like can you make megawatt size motors or can you make tens of megawatt size motors? Like there's that. And then there is the power density part of it. Because imagine a plane, well, you don't want to carry a lot more load. Every kilogram extra that the motor has is a kilogram of load that you are not able to carry in some sense. So I think both of those elements, I see a lot of innovations that I see in the market.

But the fundamental problem there, I think, right now, is less the innovation. It's the state of that market where there isn't enough things in production. And if you are a component manufacturer and you're supplying to a company where not enough things have gone into production, then you're sort of beholden by when the market will arrive, when will a consumer adopt. First, that company needs to be in business and then you need to be in business. And that's the reason why we had the opportunity, in fact, to make for a bunch of eVTOL companies, make a high-density motor, and we believe in that.

But just the market right now is not there. And so, just as a competent manufacturer.

David Roberts

There's just not enough demand to sort of justify scaled manufacturing, basically.

Ankit Somani

That's right.

David Roberts

It's kind of a chicken and egg thing there, though. But I guess you need some policy.

Ankit Somani

I'll also say that personally, I'm not an electrification purist per se, so I'll explain what that means.

David Roberts

Oh, I know this is a long-running debate here on Volts.

Ankit Somani

It's okay to think of hybrid as an option to begin with when you start using what's possible, what is at some level of scale. And scale is important for reducing cost also because just because you manufacture something, but your ticket on that eVTOL is going to cost you $2,000 to go from San Jose to San Francisco. Nobody's going to pay that. So, what is the right combination even from a hybrid standpoint? That, by the way, applies equally to cars where there's a certain class of cars, where hybrid makes a ton of sense for the market. It's okay to start there and then use that to seed to do something bigger and better and just completely electric when that opportunity exists.

David Roberts

Yeah, I guess I would just say I'm a big believer in the power of human ingenuity. And I just sort of think that once we start down this, like we're going to be learning along the way, learning and learning, getting a little better and then we'll do more and then we'll learn more and like, you know, I think eventually on some glorious time horizon we're going to get to all electric. Of course, the big question is when. But as you say, there's like plenty of room to get started. So just to review, the sort of innovations here are going to axial flux from radial flux, switching out the magnets, using iron, cheap, abundant iron-based magnets rather than rare-earth magnets, and manufacturing agnosticism, I guess you would say, or software-driven manufacturing process.

Are there, if we look in the future, fundamental advances still to be had in this space? Or is this one of those things where like electric motors have been around long enough that we're sort of like squeezing out efficiencies at the margins? Do you know what I mean? Like are there big advances still to be had?

Ankit Somani

Well, three years ago, people didn't think so, and then the team here was able to put together some innovation to be able to get some major changes. So, I'm absolutely a believer that advances in this space will continue to come. Part of what we want to do is, you know, the top 10 universities in the world, even in the US, they didn't even have an electric motors focused program. So, if we start showing to the world that "Hey, businesses in this area are possible, they can be big, they can exist, and advances are needed." Hopefully, there's more focus, just like the battery world.

Hopefully, there's more talent that comes around it, and that leads to more ideas. So, I would hate to say this is the last, last big innovation. I would love to see a lot more happen here. Ultimately, it's just about at the simplest level, it's the highest amount of magnetic flux that you can generate with the least amount of material. And the simplest way to place that material in the right spot that can help you use different kinds of magnet chemistries on top of it to be able to meet application-specific demands. So, I think there's a lot of opportunity in this space, and hopefully, we continue to out-innovate ourselves if possible.

David Roberts

All right, sounds good. Well, this is really cool. One of the fun things about this job is just, I discover whole new areas of interesting people doing interesting work that I didn't even know existed. So this is very, very fascinating. Just to dive into the motor question and now it's like, you know, now I'm like motor-pilled. I look around, I'm seeing them everywhere I look. I'm like, "Oh yeah, there's another one." So thanks for walking us through this and thanks for your work on this.

Ankit Somani

Thank you so much. David, thanks for the opportunity to talk with you and share something with your listeners today.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, I talk with Taylor Krause, who went from working on hydrogen policy at RMI to finding a quantum physicist husband and unexpected fame on Netflix's Love Is Blind. We unpack her surreal journey from clean-energy wonk to popular influencer and how she's navigating using her newfound influence.

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Text transcript:

David Roberts

Greetings and salutations, everyone, this is Volts for June 6, 2025, "A journey from clean-energy wonkery to influencer fame." I'm your host, David Roberts. A wonk with an advanced degree in policy working for a clean-energy think tank is a familiar character to Volts listeners.

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A wonk with an advanced degree in policy working for a clean-energy think tank who then goes on to feature on a reality TV dating show wherein she meets a man who falls for her and proposes to her without ever having laid eyes on her, and she says yes, and they go on to get married, becoming a popular influencer couple … is, I’m guessing, a much less familiar character to Volts listeners.

Yet that is the experience of Taylor Krause, who went from hydrogen policy work at RMI to the show Love Is Blind, in what sounds like a modern fairy tale but is, as millions of people apparently knew well before me, very real.

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I heard about this and thought to myself, "What a wild experience. I’d like to talk to her about it!" So, I did. Enjoy.

With no further ado, Taylor Krause, welcome to Volts. Thank you so much for coming.

Taylor Krause

I'm so excited to be here.

David Roberts

This is very, very exciting for me. It's a slightly different thing than I usually do, so I want to kind of take things chronologically. So, how did you end up at RMI?

Taylor Krause

I ended up at RMI. I was at a multi-client firm called Boundary Stone Partners that specialized in clean energy clientele, and I did my master's capstone in hydrogen, and then RMI just got this really big grant to hire a hydrogen manager, and so I was recruited.

David Roberts

And your degree, you got a master's specifically in hydrogen, like science policy. What does the master's in hydrogen look like?

Taylor Krause

I went to Johns Hopkins for their energy policy program, which I did at night, and then worked full time, pretty much as a lobbyist is the best way to describe my job, and then wanted to specialize in a certain clean energy technology. I had also worked in the nonprofit sector at Citizens' Climate Lobby for about five years before that. So, I kind of mixed my specialty in federal affairs, clean hydrogen, and nonprofit advocacy working at RMI, which is a think tank. It didn't. A think tank is kind of a meta thing. Right?

David Roberts

Yes, yes, I'm very familiar with RMI.

Taylor Krause

I'm sure you've heard from a lot of people at RMI.

David Roberts

Yes. So, when did you get bitten by the hydrogen bug? When did that start?

Taylor Krause

So, it's really funny because what happened was a very realistic story. I had to do a capstone for my master's and I wanted to make sure that I was doing something that wasn't just a long paper that I wrote, and then I never looked at it again. I think a lot of people in science can attest to that experience. And so, I asked my boss at the time what would be a prudent topic area to do my capstone in. And he said, "You know, everyone's talking about hydrogen and there's a lot of money going into it, but we have no idea what it is."

And so, I was like, "Great!" And so that's kind of how I got into the hydrogen topic area. Obviously, it was a very, or still is, a pretty exciting clean energy topic. It's very novel. It's kind of the Wild West compared to a lot of other clean energy technologies out there.

David Roberts

Ongoing wild swings in policy on that score. I just heard that the Republicans are thinking about revoking — which is the hydrogen tax credit, is it 45V?

Taylor Krause

45V, yes.

David Roberts

Yeah, yeah. I think they're thinking about revoking that entirely now. We'll see. Here's a question before we get into the other stuff. Do you remain as excited about hydrogen today as you were when you first got into it?

Taylor Krause

I would say I still remain really excited about the potential for hydrogen. I think everyone that's in the industry has joked that the clean hydrogen economy has been coming for the past 10 years, or the past 50 years.

David Roberts

Really, a century if you go back to the very beginning, it's like Jules Verne or whatever was the first person to describe it.

Taylor Krause

Yeah, I think that hydrogen as a clean energy technology, whether or not it has a supportive policy environment, remains to be seen. But as a technology itself, and in terms of, like, other companies that I think will survive, it still is an exciting opportunity.

David Roberts

So, you were at RMI for several years. This is in the sort of late 2010s, early 2020s. And you were young, single, dating and kind of getting sick of it and getting ready to leave, as I understand it, reading your story. And I'm just curious — as someone who's aged out of that world a long time ago — I'm just sort of curious, like, you know, if you're sort of attracted to, you know, if you go in for the nerdy types, which, you know, sort of spoiler alert that comes up later, it seems like those types are thick on the ground in D.C. and, you know, like, you're young and attractive and gainfully employed. What is —

Taylor Krause

Yeah, what the heck?

David Roberts

What's going wrong with modern dating? I'm just sort of curious, like, what's off with the vibe? Why were you so dissatisfied?

Taylor Krause

You know, D.C., in particular, because the show is based in different cities. Every city has a limiting reagent. And I do feel like — sorry, that's my chemistry background coming out. D.C., as a city, most people that move to D.C. want to change the world or, like, have that kind of internal story at some point. I know I did. And so, not trying to stick this against anyone, but I think that lends itself to a kind of personality type. And the demographic of D.C. doesn't lend itself to the best numbers. But I think, moreover, it's a transient city. And you're working a lot. I think a lot of your personality is tied up in how much you work.

David Roberts

Yeah, the culture of work there is crazy.

Taylor Krause

So, there's a couple of factors of confluence at play where it's like, maybe there was a good pool of guys, but maybe I just wasn't meeting them because I was, you know, working, or they were working and traveling, or we were just not in the same space to meet each other.

David Roberts

Yeah, yeah. So then you're thinking about leaving, and this crazy idea comes across your radar. How did it come across your radar for the first time? Was this something that you thought of, or did this something that someone else came to you?

Taylor Krause

Well, so they recruit heavily in the city that they're going to. I think anyone in the ages of, like, 23 to, like, 40 knows that this is happening. And so, by the fourth or fifth friend that brought me that, they're like, "There are applications for this. You should apply." I was like, "I don't know if I should be offended that you guys think that I should date blind."

David Roberts

Well, let's back up a little bit. Let's just talk about what we're talking about here. So, this is the show Love Is Blind. It's a reality show. I'm going to proceed as if my audience is full of people like me who don't know much about anything about this. So, pardon me if I ask a lot of dumb, naive questions about it. So, this show, Love Is Blind, the premise is they get a group of guys and a group of women, and they go on "dates" where they're talking with one another, but they never see one another.

Basically, that's the premise. And they were doing it in D.C. They were doing a D.C. season in whatever, 2023. And so, a bunch of people asked you, said you should apply.

Taylor Krause

Yeah. And shot my shot.

David Roberts

And so, what is that? Do you like, film a little thing like an audition? What is it?

Taylor Krause

Oh my God. I hope that they never release whatever audition tape that was. You basically — I filled out a very long, comprehensive questionnaire and I was like, "Oh my God, this took me two hours." And you basically submit all the things that you're looking for in a life partner and your interests, and you do a personality test, and you submit pictures of like people you've dated. So they make sure that like there's people that aren't out there, like that you don't end up meeting someone else on it. So it is a very comprehensive thing.

It's not like a Google form where you fill out 10 things and whatever. Like, they are trying to find regular but impressive people to meet other regular but impressive people that align a lot more on these internal personality life goal things rather than the physical things that kind of cloud, I think, our modern dating.

David Roberts

So, you fill all this out and then what? They call you and say, "Hey, you're on."

Taylor Krause

No, they kind of do, they flirt with you for months. It makes sense because you're also at the same time going through background checks. You're going through —

David Roberts

Yeah, I wondered how much of that stuff they do. Do they do like a psych?

Taylor Krause

They do a psych eval.

David Roberts

'Cause it's a high-pressure situation, you know.

Taylor Krause

Yeah, it's not for someone who is probably in a fragile state. Definitely not. They're also looking to make sure that you have more than one compatible person on the other side. But they're only picking 15 men, 15 women. So that lends itself to, I think, quite a bit of Tetris where, until the day before you go on set, you don't know if you're going to be in that group of people. You also had to take off time from work and, in D.C., that's not... That's why I think a lot of people were actually kind of annoyed that the demographic of people were mostly folks in the private sector or nonprofit sector rather than, you know, the "Special Assistant of blah, blah, blah."

Well, I don't know a lot of offices that would allow that to happen.

David Roberts

Take a few weeks off for a dating show — I don't know if the government has policies for that. So when it is confirmed that you're doing this thing, by that point, had you worked yourself up into being excited about it and really wanting to do it, or were you more scared, having been through some of the early — you know what I mean? Like, at that point where you just, like, fully committed?

Taylor Krause

I think I was just open to it happening and I didn't really want to get my hopes up and I didn't really think that I would get picked. I just kind of was like, my name's in the hat. If this doesn't work out, I'm actually moving out of D.C. I'm moving back to San Diego. And had, like, kind of one foot out of the city. So I was just ready for the next chapter. And then when it ended up getting the green light, I was like, "Okay, let's do this thing."

David Roberts

Do they. Is this the type of thing where they take you all and you go out to some remote location and you're sort of like quarantine there for a set period of time? You can't call out that kind of thing?

Taylor Krause

Correct. You are treated very well. Obviously, there's a demanding schedule and you don't have a cell phone, which I loved.

David Roberts

How long was the sort of quarantine?

Taylor Krause

Three weeks.

David Roberts

Three weeks. Oh, faster than —

Taylor Krause

But the whole process is six weeks. So halfway through, depending on if you're still in the show, you will. Because obviously, if you don't make it, for those that don't know, you basically, for the first 10 days, are in what are called pods, where you are talking to a viable, like, mate. I'm so scientific about this. You're dating through a wall and you get engaged or you don't get engaged, or you decide that the process isn't for you and you could leave, or you continue on and then you go on to a trip. We went to Mexico, which is basically like your honeymoon, where you get to spend time with this person on vacation, which lends itself to, like, you know, a very romantic, whimsical kind of experience.

And then you come back to what we call the real world, which was basically apartments that you and your person, like, cohabitate. Ours were in Ballston, so it wasn't actually like in D.C., but maybe that was more economical. And then you continue on meeting, like, friends and family, and then you're planning a wedding at the same time, which is nuts to say now, like, but it ended up working out, like, obviously super well for my husband and me.

David Roberts

What a crazy thing. Like, did you think going in, "I literally might come out of this married?" Did that seem like a realistic possibility?

Taylor Krause

You know, I went in — to be perfectly honest, and I've said this across the board — I went in thinking, "I'm going to learn a lot about myself in this experience," and "I'm probably going to have a more open mind about dating and find my person because of the things I learned in this experience." I did not think that Netflix would go through thousands of men to find a compatible great guy for me. I was like, there's a 1%, 0.01% chance that this is going to work out for me. But there were, you know, there were girls that went in, they had wedding dresses on hold.

And I was like, "Oh my God, what have I gotten myself into?" But luckily, I mean, my husband said no to the experience twice.

David Roberts

Oh, they tried to recruit him too.

Taylor Krause

Well, they don't have a problem recruiting women. They have difficulty getting guys to do it. So, I feel very confident that they were recruiting him for me.

David Roberts

Oh, like they wanted to be sure that someone in that pool was fit for you on paper, basically.

Taylor Krause

Yes, basically.

David Roberts

And I'm sort of curious, you know, you studied science in school and sort of science-minded people who love science tend to be sort of, you know, rational, left-brained types and you're thrust into a situation where A) you're making a lot of sort of instinctual rapid judgments and B) just also like emotionally very heightened, intense situations. Did you expect the level of sort of emotional involvement? Did it end up being more intense than you expected? Like, I wouldn't have any idea what to expect going in.

Taylor Krause

It was very emotionally intense, and obviously, I didn't think that I would get as far as I did. I honestly thought I'd go do this crazy thing for a couple of days and then be done. But it really did challenge you to sit with yourself and trust yourself. Because I feel like when we are dating, it's not just a solo choice a lot of the time. You are depending upon what your friends think, what your family thinks, what, you know, unfortunately for this generation of "What's their social media like?" or things like that that like shouldn't matter but they play a factor into it.

And so, for me, it was highly emotional and it was really fast. Like, to your point of being a more rational, scientifically logical person, you're like, "I'm feeling all of these things, but this just is nuts. Like, this does not make sense." But they do kind of structure it in a way that you are asking all these questions and getting to know this person in a way that accelerates the timeline of how you would have met them in the real world, where you're talking about finances, kids, and where to live.

David Roberts

Do they tell you what to talk about? How structured are these pod conversations?

Taylor Krause

You are not told what to talk about at all, but they do give you a structure of, like, "Today's theme is this." You can go in and talk about your favorite amusement parks all day if you'd rather do that and not take it seriously. But you'll probably be asked to leave if you aren't taking it seriously and you're not getting to know the person. And that's kind of a recipe for disaster. But you are given some structure and you can kind of follow it the way that you want to follow it. And, yeah, we have these journals that they provide, like, those questions and certain topics to touch on that we have in.

You'll see in the show, and it has our name on it and stuff. And, yeah, so there is some guidance, but there are no prescriptive rules.

David Roberts

So, it's like today's theme is whatever, family or religion, finances. You can see how that could strip away a lot of the extraneous stuff and get really intense really quickly. So, you meet this guy, "meet this guy" Garrett, who — I'm curious. On normal reality shows, there's some sort of process whereby people get eliminated, voted off the show, some counsel, something rejected, something. How do people get booted off Love Is Blind? Is there some sort of vote? Is this something the producers decide?

Taylor Krause

Oh, they should add that. That would make it — I'm just kidding. It's just the way that you're matched with each other. So on day one, you go on 15 dates because there are 15 other people on the other side. And then it's kind of like fraternity/sorority recruitment, where you rank each other and then they have an algorithm. My husband is a quantum physicist, and so he was like, "I need to know the algorithm," which is so funny. We met with the creator of the show afterward, and he's like, "The way that you guys would ask similar questions each day when I would talk to you guys and tell you what was going to go on for the day was just, you guys are both like, type A and clearly science people." So funny.

David Roberts

How does this work?

Taylor Krause

How does this work? And if you don't have a viable match, which kind of becomes clear, people start to break up and they don't continue on. As fewer people are there, stakes and emotions get higher because you are living with the other people that you are supposedly dating the person that you'd like to marry.

David Roberts

So does it come up a situation where, like, two of the women are after the same guy or vice versa? Or does everybody sort of pair off pretty early?

Taylor Krause

No, there are some triangles that happen, and it makes great television. I was not in a triangle.

David Roberts

Oh, lucky you.

Taylor Krause

I got very lucky.

David Roberts

So, you start talking to Garrett. You guys hit it off. You both have a science background. When did you get to see him? How does that process — you sort of checked his box. And then, what happens?

Taylor Krause

Then, they basically have you guys do what's called a reveal. So, you actually get engaged, not seeing each other.

David Roberts

So, you said "yes" to marrying Garrett, without ever having laid eyes on him, and vice versa.

Taylor Krause

Yes, I don't recommend doing that.

David Roberts

It is very crazy to me.

Taylor Krause

It's not sensical whatsoever. I do believe that I went into some metaverse and I called it, I kept calling it the simulation. Because, I mean, when you're going through it, I also had just a lot of these weird — I'm not a woo-woo person, I can't even tell you what my astrology sign is. But there's different, I don't know, different moments of when I felt like the universe, in a lot of ways, was telling me that this was something to keep going for. And there wasn't a reason to say "no" other than the logistical, logical, like, situation. But after nine days of talking through a wall, you see your fiance for the first time, which is an overstimulating experience.

David Roberts

I bet. Good God. Especially on camera.

Taylor Krause

Oh, yeah, there's like, 70 cameras watching you have this super awkward encounter and, like, your first kiss. And where do I, "Is he taller than me?" Or, like, "Do I smell good?" Like, just certain things that — I think awkward is actually really honest.

David Roberts

How could that conceivably not be awkward? I can't imagine that not being awkward for any human being.

Taylor Krause

I think, if it's not awkward, it might be a little dishonest, to be perfectly honest. Like, you might just be continuing on to be on television, which I don't knock against anyone. It's an experience that does not lend itself to always being a successful outcome. And it's a once-in-a-lifetime opportunity. And, like, how you want to spend it just really depends on the person.

David Roberts

So, I'm curious, is it built into the show, the marriage proposal thing, like, he couldn't just say, "I like you. Let's date more." Like, what's required by the show?

Taylor Krause

Yeah, there's no requirement. There's plenty of people that say, "This isn't for me, and I think we should just meet in the real world." Like, that happens pretty much every season.

David Roberts

So a marriage proposal is not, like, routine or built in, then?

Taylor Krause

No, it is. It's routine. It's part of the process. Like all the couples that continue on to the honeymoon and through the show, sometimes some people don't get engaged. They kind of just come back because there are those love triangles that happen. But for the most part, the people that continue on through the experiment, as it's referred to, are required to get engaged. I don't know if that's — I don't think they've ever had anyone that's continued in a way that they haven't been engaged. But I could be wrong.

David Roberts

And so, then the wedding and all that is all that. Also on camera, followed part of the show.

Taylor Krause

Yep.

David Roberts

And it's all wrapped up in one season. Like, if I went and watched this whole season, I would see that whole arc from you meeting to getting married at the end.

Taylor Krause

Yeah, you'd go to my wedding.

David Roberts

Well, I'm curious. Since you're not allowed to call out or communicate with the outside world while this is going on, you kind of disappear into this black hole and pop out with a husband. What did your parents think? What did your friends think? I mean, your friends must have been like, "I told you so."

Taylor Krause

I mean, they kind of know that if they don't hear from me by a certain amount of time, I got engaged.

David Roberts

Oh, right.

Taylor Krause

And so, all of my friends, I think after they met Garrett, they were just like, "Oh, wow. Yeah, this person's very compatible for you. I get why. This is still really insane. We trust you. We think you, of all of our friends, like, you would be the person that we would trust to do this and, like, have a good head on their shoulders about it." And I was like, "I mean, uh, okay." But my parents — my dad was not cool with it at first. He kind of freaked out.

David Roberts

Are your parents immigrants?

Taylor Krause

My mom is from Hong Kong.

David Roberts

So, this whole thing must have just been like Mars to her.

Taylor Krause

You know, she's very chill and she's been in the States since she was really young. So, she's very Americanized and very open-minded. She kind of basically got my dad on board, which was interesting because now they love Garrett and they think it's a wonderful blessing and a cool story and are very supportive now. But obviously, when it was happening, they were just like, "Absolutely not. What are you doing? We let you, we thought you would go do this thing and it would be fun. And now this has gone too far."

David Roberts

Well, you present them with this handsome outdoorsman, quantum physicist. You know, what are they going to do? What are they going to say?

Taylor Krause

They don't care. They were like, "No, no, no." I think it's also, you know, it speaks back to what building relationships, especially a marriage, can be to some families and like how participatory you are in something like a wedding. It really deconstructed the meaning of a lot of different things, which I really appreciated about the experience. Like, a wedding is about the two people that are getting married and it should be — you know, we eventually would like to do a bigger one, like ceremoniously like to bring our families together.

David Roberts

Did you do like a runoff elope by yourself kind of thing?

Taylor Krause

No, we did a big, on the show, you'll see at the end, they basically have the people who make it to the final stages. You've been planning your wedding this entire time, which Netflix completely pays for and was a beautiful, wonderful event for us. There's some couples that go and one person says "no." Both people say no. So they pent it up where you show up to the altar and you're saying yes or no. But Garrett and I knew. I was like, "I'm not getting in a dress in front of my family if I'm saying no or you're saying no."

David Roberts

What a crazy thing. So you haven't had a chance then to sort of like do, do the big family quasi — cause my wife and I kind of did the same thing. We got married on one coast and a bunch of our family couldn't make it. So we just got married again a week later on the other coast.

Taylor Krause

So, ah, you're onto something.

David Roberts

Everybody else could come.

Taylor Krause

Yeah. So we did our wedding here in Virginia, which was really fun. I mean, thinking it was 80 person wedding, it's obviously like all televised and probably the wildest wedding that most people will ever go to. So it was a cool experience.

David Roberts

Yeah. It must be super schmancy, right? With Netflix money, right?

Taylor Krause

It was great! I mean, and so we would love to do one back in California when it makes sense. Like, we just bought a home in D.C. and weddings are very expensive. And obviously, the show came out about six months ago, and so we have kind of just been thrown through a whirlwind, and I've never met anyone that's, like, planned a wedding and said, "Wow, this is really easy." So we're just waiting.

David Roberts

Well, I mean, you have all the time in the world now. You can do it at your leisure now. Last question about the mechanics of reality TV, which I've always sort of wondered, like, you are not seeing dailies or whatever. So, one of the things you hear about reality TV is, they're filming all of you for just dozens and dozens and dozens of hours. And so, once you have all that raw footage, you can edit it together in a number of different ways. And I know that, like, on reality TV, they need characters, you know, they need drama, they need whatever, so they can edit.

They edit certain people to make them into a character, basically. And some people come out of this complaining, some people don't. But I'm just sort of curious, like, did you know how you and Garrett were being portrayed, or did you just find out with everybody else when you saw the finished show? Like, did you? Were you completely throwing yourself on the mercy of the producers the whole time?

Taylor Krause

Yeah, I mean, you basically sign away all of your rights to the narrative. For me, I knew that I like the person I am. I know who I am. I'm always going to act, I think, out of integrity, and if I mess up, I will take full accountability. And for myself, I just did my best. And I knew that at the end of it — I sat there for a year because you get married and then you're in hiding for a year. Yeah, it's crazy that whatever ends up happening, if I get a bad edit, then the people who know and love me know who I am, and that's all that matters.

But to your point, like, yeah, you hear these horror stories, like, "This was edited this way, and they could twist my words and take things out of context." So, when the show came out, I was like, "Oh, okay, that wasn't so bad."

David Roberts

Maybe not even bad, but did anything sort of strike you about like, did you feel like watching the show "Yes, that's recognizably me?" You know, they sort of, got it pretty well right. Or was it just sort of, like, odd to see yourself? You know, there's a certain sort of out-of-body experience to all this. Like, seeing yourself as a character. Like, did the character you were on the show, did that approximate how you think of yourself?

Taylor Krause

I think, yeah. I mean, I genuinely thought I was going to be considered very boring and that no one would really care about me because I was so — you're surrounded by all of these relationships that are going through a rollercoaster of drama. And I was like, "Oh, my God, babe, we are so boring. Like, no one's gonna —"

David Roberts

Well, honestly, like, in the context of reality TV, a normal, psychologically healthy person is a little bit of a novelty. You know what I mean? Like a person who's just normal. Like, they do look for dramatic personalities. So, like, I can imagine there being a novelty to it. Like, "Gosh, she's just like a normal, nice person." You know, how odd.

Taylor Krause

A lot of my friends were like, "It felt like hanging out with you. It didn't feel as though we were watching someone on television. It felt like you were just being yourself." And I'm glad that that came through. You know, the other thing too, about the experience that I really learned about myself is that I am a bit more soft-spoken. When you're in the experience, a lot of the way that you have dialogue is by people just talking over each other, and that's just not my vibe at all. And I'm a bit more concise and to the point about certain things, which I just thought that maybe they wanted something more dramatic and ranty and crazy.

David Roberts

If I ended up in a situation like that, I would feel pressured to sort of, like, be more dramatic, you know, be a character.

Taylor Krause

Be a character, exactly. By the end of it, I was just like, or midway through, you really have to just be yourself because there's so much going on and I was filming at night while working full time and planning a wedding. So, yeah, I don't recommend doing that, but it was a blast. I met my person through it, I learned a lot about myself. I'm glad that I ended up being the fan favorite.

David Roberts

Do you have a good explanation for yourself in your head why you and Garrett ended up being such fan favorites? Is it just because you're, like, nice, intelligent people and got along?

Taylor Krause

It's funny, I was just talking with the Netflix PR team, talking about wanting to do this podcast. "Oh, just a reminder, like I'm doing this podcast, it's probably going to get nerdy." And they're like, "We love it and we need more nerdy people on cast." And I got a lot of feedback from people in STEM fields or policy fields that were so excited to see representation and from climate people. Like, people don't really know what a climate job is.

David Roberts

You know, maybe this will be what the reality TV producers of the world will take away from this. We need more nerds. We need more nerds on TV.

Taylor Krause

Yeah.

David Roberts

Well, speaking of the green thing, like, this is one of the main questions I wanted to ask you. You know, you went into a public-minded career, you care about climate, obviously, which is why you ended up in the profession you ended up in. And here you are going into this situation where millions of people will be paying attention to you, which might not ever happen again. No one understands how these things work. You know, it could well be a one-off thing. Did you think consciously going in about trying to convey some sort of green messages, like trying to work that in?

Did you ever talk to the producers, like, you know, like, "How nerdy am I allowed to get here?" Like, "Am I allowed to go on and on about climate change?" How did you think about or did you think about how much message to work into all this?

Taylor Krause

Yeah, I don't know if I thought too hard about messaging because, again, they have thousands of hours of footage and what they pick and choose is not up to me. But obviously, being someone from a clean-energy field, I went to school for it, I've volunteered for it, I've worked in it for almost a decade. It's pretty fundamental to me as a person. So being able to talk about that and convey that to a potential life partner was incredibly important to me. And so I knew that I would be talking about it. And if you didn't believe that climate change was real and we should do something about it, then you're not my person.

David Roberts

Yeah, I guess that came up with Garrett early on.

Taylor Krause

It came up with all my people early on.

David Roberts

Were there any — I'm just so curious —were there any, like, deniers? Were there any guys who failed that particular test?

Taylor Krause

No, I was — maybe they're lying to me, I don't know. But I was delighted that every single time I talked about my profession and climate change being important to me, everybody across the board agreed. But there are 15 people, so I don't know if that's a correct sample size.

David Roberts

Did you dare to? I'm always, like, one of the sort of recurring jokes on this pod is like, people who know a lot about this stuff completely lose their ability to gauge how much other people know. You know what I mean? Like, what the background level of knowledge among normal people is like. Did you ever get all the way into like, hydrogen and why it matters, or was this all just like, oh, it's like climatey stuff. How geeky did you get?

Taylor Krause

I got pretty geeky with at least the two. Which one is Garrett? And then the other person I was dating because it was my — I have a hydrogen tattoo on my wrist and it's the topic that I said 45V more than my own name last year. So, it was really important.

David Roberts

Did 45V, like if the words "45V" were actually spoken on the final broadcast show that would just be like the most thrilling thing for me in all of history.

Taylor Krause

It did not make it, but hydrogen did. Hydrogen did make it.

David Roberts

Oh, that's awesome.

Taylor Krause

Hydrogen did make it. I mean, my husband probably explained to me what a quantum computer is, and I can't convey that, so that's okay if he can't tell me about how the hydrogen tax credit should be structured.

David Roberts

What does he do? I mean, what is a quantum physicist? Is he in, like a lab somewhere?

Taylor Krause

So, he used to be an actual — he used to work in a lab, but now he works for a private company. He manages a bunch of technical people and engineers in building a quantum computer.

David Roberts

Interesting. Yeah, I just had the Governor of Illinois on a few weeks ago and he's very excited about quantum computing, although he didn't seem to totally understand what it was either. Nor did I when we discussed it.

Taylor Krause

You can have my husband on.

David Roberts

So, at some point, maybe I'm going to have Garrett on, and we could figure out what the hell quantum computing is once and for all. So, you are now a year out of this. Two years.

Taylor Krause

Year and a half.

David Roberts

A year and a half out of this, I guess probably the actual, like, "Love Is Blind" related hubbub, has died down somewhat?

Taylor Krause

I mean, every season, I think that will come out after you do. I think, reflect back on the people that get married and are successful from it. And so, that does come up. But yes, my time, the most relevant I will ever be, has passed.

David Roberts

Your peak cultural relevance.

Taylor Krause

I'm good. I did it. I don't know how people that are actually famous do it.

David Roberts

So you are leaving RMI now?

Taylor Krause

I have left RMI. Yes.

David Roberts

You left RMI. What was the thinking behind that? And what are you doing now? Like, what are your plans?

Taylor Krause

Yes. So, at RMI, my job was being on the federal policy team. And so, for everyone that doesn't know...

David Roberts

I almost appended to the question "and how much does Trump have to do with these answers?"

Taylor Krause

I think there was kind of a nexus and a confluence of factors that happened for me where, like, we had a big election. Obviously, it changed what my day-to-day looked like dramatically. And for content creation from being on a reality television show, I had zero clue. I had no idea what the opportunities were from it. I didn't realize that I had this, this really creative, fun side of me that enjoyed creating content. Like, I've always kind of been more of a behind-the-scenes lobbyist person that's been, you know, generating influence in a different way. And so, making more of a salary doing content creation versus working at a nonprofit became very clear very quickly. And I really loved doing it. I mean, I'd love to hear your tips on, like, content creation, but I'm very new to this space.

David Roberts

Well, I meant to ask, like, before you went on this show, did you ever, prior to that, have any sort of, like, thoughts or aspirations, like, "I want to become a content creator. I want to become an influencer. I want to be better known. I want more attention." Like, was any of that in your brain before this actual opportunity came up?

Taylor Krause

No, I thought I'd like to go be the Director of Federal Affairs at some hydrogen startup. Like genuinely. And so, being able to talk about sustainability in a different way, because obviously the federal avenue to do that is very fraught. The opportunity to have an impact in that way very much changed.

David Roberts

It's all grinding, defensive, depressing work for the foreseeable future.

Taylor Krause

Yes, and so, being able to work with other companies and create content about things that I care about and think are impactful or creative or fun, I'm very lucky to have that opportunity. When I told my colleagues that I think I want to make the transition into doing this full time, when the Institute and most people working in climate and clean energy are tightening their belts and being very diligent, I was like, "I don't want to take the space of someone else that I know can give, like, 200% when I'm interested in maybe making a pivot." So, it just kind of became pretty clear after six months under that administration that I wanted to take content creation full time.

David Roberts

Totally understandable instinct there. So, like, now you're an influencer. What does that mean exactly? What is, like...

Taylor Krause

It's a great question.

David Roberts

You have this now, attention. You have this fan base. You have a lot of people who know who you are and care what you think and have developed this parasocial fondness for you through this experience, and you can take that and use that attention for good, is what you're saying. What does that mean, though, concretely? Companies that are selling sustainable goods come to you and you...

Taylor Krause

Yeah, so to be fully transparent, I'm dependent upon income from different companies that want me to basically put together endorsements for their product. And I'm still in the process of creating what is my brand, because I'm just my brand. And what does that mean? And what is, like, the clear messaging of that? And, like, obviously, climate and clean energy was such a core tenant of mine. Being able to promote sustainable things is something that I'm prioritizing. I can't endorse it. I don't think I've gotten a deal yet for a hydrogen car or something.

Which shouldn't be used for light-duty vehicles anyway.

David Roberts

It'd be like a hydrogen reduction steel furnace.

Taylor Krause

Just, everyone should have an electrolyzer in their home.

David Roberts

Sponsored by an electrolyzer company. That's some influencing I'd like to see.

Taylor Krause

That'd be great if I could pivot into. It's been mostly things that are, you know, for example, Subaru, which is a great. They are the first zero-waste automaker and they're generally just a leader in the conservation space for automakers. I just did a partnership with them where they had an Earth Day campaign with the Arbor Day Foundation. And there's, for example, another company that, that's my favorite, which is Ritual, which is a supplements company that is woman-founded and they basically have done like a full analysis of their Scope 1 to 3 emissions and trying to decarbonize their supply chain with actual tangible targets and clear roadmaps, which is much more granular than I think an average influencer probably is getting.

And there's other things like a hair care company called Kitsch that reduces plastic by using shampoo bars and different accessories from recycled plastics. So like there's very — it's very new to me what sustainability is and being wary of greenwashing.

David Roberts

Yeah. Do you have help? You're sort of like you are your own brand, your own company. Now you are Taylor Krause Inc. Do you have employees to help you sort of like filter through this stuff? Because I'm sure everyone's coming at you.

Taylor Krause

I did my due diligence. I had a lot of agencies coming at you that they'll bring you different partnerships for a certain amount of money and they take a commission. But I, the type A person that I am, I interviewed probably a dozen different agencies and then I took my top two and I had them basically compete against each other for a certain amount of time and then went with that agency. And so now they manage, I'm exclusive with them, they manage the different partnerships. And I've said that these are the kinds of companies that I am trying to work with.

And obviously most people working at an influencer agency, they're not — they don't know what Scope 1 to 3 emissions are and things like that. So we work together to do that kind of vetting. But they know where I stand in terms of who I'm trying to partner with. And just because something's labeled eco-friendly doesn't necessarily mean that it's an authentically like, sustainable brand. But I think there is kind of this gray area that I'm figuring out in real time of, okay, where are companies that are genuinely trying to do better and the right thing, but maybe they're not like at a true net-zero place.

And so, yeah, it's tricky. And my brand is a lifestyle brand, so it's not necessarily just sustainable, eco-friendly, clean energy, climate things at all. I don't think that that's for me necessarily the holistic part that I want to convey. Like I want to convey that a person can be a multifaceted person and still care about these things and still want to travel and still like, want to talk about their home decor, you know?

David Roberts

Yeah, yeah. I honestly think that like, you know, I'll never forget — this might be dating me —but back in the mid-2000s, NBC had Green Week. You might remember the first Al Gore wave of sort of green hype.

Taylor Krause

And everyone got light bulbs.

David Roberts

Yes, everyone got light bulbs. All the magazines did a green issue. It was the mid-2000s, but I remember NBC basically told all their producers, "Put something green on your show this week with clearly no further guidance." And so what popped up again and again is a character on the show got obsessed with green stuff, became annoying and naggy about it, irritated everyone else, and then eventually got over it. Right. So it's like, I think this has always been part of the public's perception of like, people who care about this stuff only care about this stuff and they're self-righteous about it and they're annoying.

Taylor Krause

Yes, exactly. Thanks for saying that better than I could say.

David Roberts

I do think there's value in showing that you can be like a normal person, you know, like a normal aspirational person. And care about this stuff organically.

Taylor Krause

Thank you. Trying to be as authentic as possible and sharing parts of a normal life that are in some ways inspirational to other people, but not in an oversaturated way is something that I'm really trying to just figure out so.

David Roberts

Well, this is, you know, Chris Hayes, the MSNBC host, has a book out on attention recently and I interviewed him about it on the pod. And you know, it's just all about sort of how attention is sort of like the coin of the realm these days. Everybody's got a million different competing demands for their attention. Screens everywhere. And it's also about sort of the kind of mind-f that is involved in suddenly getting a lot of attention, you know, all the different ways that it can mess you up.

And, you know, I just sort of wondered, like, how self-aware or how self-conscious are you going into this about the sort of danger of, like, you know, it's one thing if you're just, like, showing people your life, but, you know, the danger is always there of, like, "Am I crossing a line where I'm sort of, like, performing now? Am I performing all the time?" Like, what still is my normal life versus me performing? You know, just like, the psychology of it all is so daunting to me.

Like, are you thinking proactively about sort of how to, like, keep your wits about you, how to keep your sanity about you?

Taylor Krause

I think I was really lucky to have gone through the experience and sat there for a year.

David Roberts

Yeah. That's so weird. Can you just describe that? So you went through it and got married and did all that, and as yet, no one knew.

Taylor Krause

Yeah.

David Roberts

So you had to, like, basically be in hiding with your new husband for a full year before the show came out.

Taylor Krause

Yeah, yeah. We just didn't have a digital footprint. But you could still do, like, Christmas with, like, your family somewhere, go to dinner. But when the show came out, you couldn't be out in public together until it was done airing. And I'll just say that, like, the Internet, like, just people are the FBI. Like, it's crazy.

David Roberts

No kidding. Especially on, like, reality TV. I mean, these. Like, everybody's a sleuth about these things.

Taylor Krause

Yes. And most people that watch reality TV are women. And I now believe that if women solely ran the CIA, there'd be no crime. No crime in this country.

David Roberts

Did you get sussed out? Did you get exposed? Did someone track you down?

Taylor Krause

People, yeah. They went through every nook and cranny. And luckily, I think I'm just a good person that hasn't done anything terrible, that nothing happened. But to your earlier question, like, I just was myself, because clearly you're making the biggest decision of your entire life. And so I just showed up as myself with my husband. I would be doing myself a disservice by not doing that and to him, obviously, as well. But I thought that I would just be perceived as, like, a very boring person. So when it turned out that, like, just being myself and being celebrated for, I think, an authentic kind, genuine person that's really stuck with me.

And I'm lucky that that was my experience, that I'm carrying that forward. And for me, that's the only way that I'm gonna be able to do this sustainably. But to your point, I have not figured out or thought too much about the fear of whenever you put anything out there, that people — you probably have this all the time — have opinions.

David Roberts

Yes, people, I mean, are at least just judging my professional work. Once you become an influencer like this, people are judging your life, you know, and there's like millions of them doing it. That's part of what's such a mind screwer about it.

Taylor Krause

The human brain is not supposed to undergo that much attention. No, let alone — it was very positive for me and it was overwhelming. So having it be a majority negative, like I feel for my colleagues and I have bad days, I still, I'll get mean messages or things that really, you know, make you question yourself sometimes. And that's okay. Like, I think it'd be super weird to not have those moments of really questioning things or not feeling good. I think that's just human nature. But being able to pick myself back up over those moments and try to be better.

I do appreciate when people call me out, especially as I'm learning how to do this. And this is an extension of myself in a lot of ways that I've gotten a lot better at not taking things as personally and taking it as feedback to get better and increase my influence and impact. Because if I'm not constantly learning and taking feedback from the people that follow me, I don't think I'll be successful at this. So that's what I'm trying to do. Maybe let's circle back in a year.

David Roberts

How about Garrett? Is he equally enthused about the life of influencing or is he sort of like, along for the ride? Does he still have his day job? What's his disposition towards the influencing game?

Taylor Krause

So for, I guess, more from a brass tax perspective for influencers, women just tend to be able to make a living from it much more easily than guys can.

David Roberts

Huh. I guess if you're a guy influencer, you gotta, like, eat meat and whatever, like pump, pump iron. I don't know what that you gotta get into that you make protein shakes or whatever the hell that all that is.

Taylor Krause

Yeah. And I mean, even looking at our Instagram, I think is kind of the most tangible metric for whatever influence means coming from a show. And we went through the same exact experience with the same exact outcome, and I have twice as many followers than he does from it. I think the opportunities are not the same. So it has to make sense for him, too, where, like, I'm able to, I think, authentically show up and be able to monetize that more than he is. And so we're still doing brand deals together, and we'll be doing maybe different shows in the future together.

And, like, we'd love to start a podcast or something else together. So I think there's more opportunities. We just have to create them.

David Roberts

Well, I've been told by several people online that I'm supposed to ask you about his glow up. I had to Google what a glow up is, but he's looking quite dapper these days.

Taylor Krause

Thank you, my little model husband.

David Roberts

Did you. Are you are we thanking you for that?

Taylor Krause

No, he genuinely was just a person that lived in Fredericksburg and just did physics and went fishing and didn't really care about how he looked. But he kind of always has had this, like, flair for fashion and stuff. And, I mean, he had this, like, haircut that was this, like, this military haircut. And I was like, I don't care. Love is blind. I don't care what you look like. But I'm someone that, I like to dress up and I like to travel and I'm from D.C. which is very different than Fredericksburg.

And so, I think it gave him the opportunity to do that stuff. Like, there was no opportunity to do that before. And so, in terms of his glow up, like, I just say this, like, if a woman went on and, like, had a "glow up" and they attribute it to her husband, like, people would, be raked over the coals. So, my husband makes his own choices, and I'm very supportive of it.

David Roberts

Well, everyone's pleased with the results, so I think that's the important thing. Well, final question, then. You have been catapulted from one life into a very different life, a life now which sort of lives or dies by attention. And it's sort of kind of a law of the universe that anyone's tumble in that particular barrel is limited. Right? No one knows. No one ever knows how limited. You know what I mean? I think particularly these days, the sort of fickle nature of attention. I don't think anybody really has a handle on the whys and how's of it.

So, have you — I mean, and maybe this is premature since you're just getting your feet under you — but have you thought at all about the lifespan of this life, of the life of the influencer? Do you know what I mean? Like, how long could it last and are you going to be pushed out of it, clinging the whole way? Or have you thought about, like, what is the end state of this? Like, what is a graceful exit from this? What does the lifespan of this look like, start to finish?

Taylor Krause

So, I did think maybe not the way that you're framing the question. But I thought about it obviously, like, really long and hard before leaving a great job, a great place, like something that I've worked really hard to have a position in, to kind of take this leap into of way more risky career. Career is maybe not the right word, but opportunity. And so, I think I understand that I probably have, I think I understand that I have an opportune Overton window of like, influence.

And I really have the opportunity to make whatever it is that I do into, have a following from it that's sustainable, that can maybe materialize into other opportunities for the next year. And so, I was kind of like, I'm gonna give it as much as I got and do something that I think is fulfilling and interesting and cool. And then if it doesn't work out, I'll hopefully, like, in the next couple years, like, could come back to a different, like, environment. But yeah, it's a great question. I know that there's finite time to really make something of it.

And so, I'm kind of in that window of really giving it a go and making it into something that's successful.

David Roberts

Still is fascinating. Yeah, I'd love to come back and talk again in a couple of years just to hear, like, what is the, you know, as you sink into it and learn more about it.

Taylor Krause

Yeah, I'm gonna have to read Chris Hayes', his book on attention because —

David Roberts

Well, he doesn't — spoiler — he doesn't have it. He doesn't have any great answers. There's not really anything to be done about it. It's just the nature of the world these days. We're all being called upon to deal with levels of attention, even people, you know, like me, who's like modest niche podcast, like everybody who's got any kind of online presence is getting more attention than humans are built for. So we're all. Almost everybody has to deal with it on some level or another.

Taylor Krause

Well, if it's any consolation, when you reached out, I was over the moon because obviously being a climate and clean energy nerd, you're like, "Oh my God, David Roberts. Like, this is crazy."

David Roberts

Oh, well, thank you. Vice versa. Yeah. Let's reconnect in a couple of years and see how things are going.

Taylor Krause

Okay. I won't disappoint you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, I chat with Johanna Wolfson, co-founder of Azolla Ventures, about their unique philanthropic-backed VC model tackling the tough problem of sustainable mining for the clean energy transition. We explore the promising tech Azolla is backing to reduce mining's impact, from using electrochemistry to refine copper without dirty smelting to advanced techniques for processing low-grade ores and even waste.

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Text transcript:

David Roberts

Hey everybody, this is Volts for June 4, 2025, "How to reduce the impact of mining." I'm your host, David Roberts. When it comes to the subject of mining and the clean energy economy, it is important to keep two truths in mind at once: First, relative to the fossil-fueled status quo, a clean energy economy will involve vastly less disruption of the Earth's crust via digging, drilling, and mining.

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The materials that compose clean energy technologies only need to be extracted once. When you build a fossil-fueled machine, you have to keep extracting fuel for it as long as it runs. There's no comparison.

That said, it is also the case that clean energy technologies involve much more of certain minerals and metals than fossil energy technologies, and will require much more of certain kinds of mining. As listeners surely know, that mining — of copper, lithium, rare earth metals, etc. — can have extremely damaging social and environmental consequences. Clean energy advocates shouldn't wave those consequences aside or ignore them. They should think about how to reduce them!

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Obviously, a comprehensive approach to mining will involve social movements and public policy, not just technology, but it's still worth seeking out the technologies that could help. That is what Johanna Wolfson set out to do when she co-founded Azolla Ventures, a VC firm that is distinguished by deploying, in part, philanthropic money, for explicitly pro-social purposes. The mining industry is one of Azolla's main targets, so I thought it would be illuminating to talk with Wolfson about the kinds of promising mining tech she's funding and how it might help.

All right then, okay. With no further ado, Johanna Wolfson, welcome to Volts. Thank you so much for coming.

Johanna Wolfson

Thank you. It is awesome to be here.

David Roberts

So we are here to talk about mining, but what tell us your life story and how did you end up where you are and where are you? What is it that Azolla does?

Johanna Wolfson

So, I'm with Azolla Ventures. I'm a co-founder there and we are bringing a different way of investing forward in climate tech. What makes us unique is we are impact-first investors. That's not because we're such great people — though we like to believe that — it's really because we aggregate philanthropic tax-exempt capital as the heart and soul of our fund and that lets us take on outsized risk relative to what other venture funds can and really should do. And it requires that we're impact-first in our mindset and methodology and deployment of capital. And so, we're out after big swings in climate and taking on pretty meaningful risks.

Most often, that means science and engineering risks. That can also mean market and other sorts of risk. But we've gotten to do some interesting things along the way. And the way I got here was, I'm a scientist by training, physical chemistry, and came to think that all the amazing science getting done in lab benches around the world didn't have the right way out. That's not an original thought, but I really wanted to do something about that and wanted to spend my career on it. And so, found my way through working at initially an industry lab, then spent some time at the Department of Energy in D.C., getting to know what government can and can't do, and decided to work on the capital problem for early-stage companies and probably wouldn't have been that compelled to go to an investment firm for its own sake.

But the idea to build something different in terms of what types of things we could do and invest in, and bring a different model forward, was super compelling. So, we've been at it for coming up on eight years now.

David Roberts

This went by really quickly, but let me just pull it back up. You are deploying exclusively philanthropic capital?

Johanna Wolfson

Not exclusively. So, we have built a fund structure that pairs philanthropic capital with more typical impact-aligned but not tax-exempt capital. And by drawing on those two different pools side by side, first weighted toward the higher risk and then later when companies graduate from that especially high-risk zone, pulling on the more conventional capital, we're able to both kind of launch, catalyze, and then scale companies that we partner with.

David Roberts

You know, when I threw this out there online, a lot of people's questions were related in one way or another to "How does the VC model line up with this?" So there's sort of a broad discussion in our space. I'm sure you've followed it, that like the limitations of the VC model. The VC, they're looking for unicorns, they're looking for 10x, you know, etc. And they're looking for relatively quick payouts. Whereas lots of infrastructure-type things, you know, that type of capital doesn't work well in this type of business. And I would think intuitively that mining is sort of paradigmatically conservative, slow, doing investments that are multi-decadal.

You know what I mean? It's like big and conservative and slow. So, the match between the VC model and mining is not obvious to me. So, maybe talk through a little bit about how you think about that.

Johanna Wolfson

Yeah, how long do we have here? Okay, so lots to say there. For one, climate tech generally, yes, absolutely, all of those critiques about venture are true and make a lot of sense. And yet, over the last five plus years, a great deal of climate tech capital, as I'm sure you've known, covered extensively, has shown up. And some of those sources of capital have more patient structures associated with them. We're the only one I know of that has this tax-exempt philanthropic angle, but lots of them have longer timelines, so that helps somewhat.

David Roberts

So as far as you know, you're the only fund that is doing this blending of philanthropic and private capital?

Johanna Wolfson

As far as I know, we're the only fund doing this blending in climate tech at this scale. So, there's a couple of other kind of smaller, earlier efforts. But yeah, we're a $250 million fund and we'd like to see more, but as of now, not yet. So, we do see increasingly more patient capital coming into heavy infrastructure technologies, which you could say about a lot of climate tech, not just mining. On the mining front, all of those challenges are super real. So, I could speak from experience with many of our portfolio companies starting to pilot with mining majors or starting to get out in the field.

I mean, it is slow. The challenges are real. Not a sector historically known for quick innovation. You can imagine all of the things that make it hard. So those are all true. Over the last couple of years, I've actually seen more of our peer investors start to make mining investments and that is probably driven by a recognition of both the extraordinary need for securing critical materials in light of a coming clean energy transition, which I'm sure we'll talk more about, coupled with, you know, mining is a pretty stable and reliable sector. And so if you were canvassing across all the different things in cleantech, it's actually, I would argue, one of the more reliable places you could invest.

Now that said, it doesn't make any of the challenges around integrating with existing legacy infrastructure or selling to mining majors that might be fine with the way things are going now. It doesn't make any of those problems go away. But in across all the areas that we invest in, some of which are more challenging for VC to engage in, I wouldn't say mining is among the most challenging. Now, the other thing I'll say — just in terms of where we're seeing other capital show up — this is kind of my bugbear issue about clean tech investing in general. Where I really wholeheartedly agree with those questions and maybe the critique that's coming behind them is that just because you can find technologies or companies to invest in with a venture mindset doesn't mean that you're going after the biggest set of problems that we need for achieving a clean energy transition.

These are two totally different mindsets. And I think the venture community can get caught up in a story that, "Oh, because I'm able to put together this company markup or this narrative, therefore look, venture is working!" It's like, well, we're not looking across the broad swath of emission sources.

David Roberts

The worry, I think, is that the set of things that are receiving investment, that set is being shaped more by the sort of character of the investors than the shape of the problem. Do you know what I mean? It's like it's the VC susceptible problems that are getting invested in.

Johanna Wolfson

I'm like raising my hands in cheer right now that you said that. And this is a whole separate area that I'm looking into and working on with some like-minded colleagues at other places. It's just, you said it so well. The places where money is going are being shaped by the venture mindset and we're leaving a lot of impact on the table. And by the way, I'm not supposed to say that as an investor.

David Roberts

Well, I guess my follow-up question is the answer then to broaden the types of things that VCs are comfortable investing in or is the right answer to bring in other types of funding that aren't VC?

Johanna Wolfson

I fall into Camp B. I think that you can only push the VC model so far, and that's not because of closed-mindedness or anything. It's because of the type of capital that's being aggregated, the expectations that sit behind that capital, and the nature of running a conventional VC fund which is, you know, I'm going to go ask these folks for more capital in a few years and they're going to want to see what I've done with it. And you know, so it's very all natural in terms of the incentives and there are some things that we can do that I think we're experimenting with at Azolla successfully about changing that model or pushing it or prodding it or making it extend in a different direction.

But can that get at the whole of the impact that's being left on the table? I don't think so, unless you come at it with a new set of capital constraints.

David Roberts

Yeah, someday I want to do a pod on what those alternative investing vehicles are.

Johanna Wolfson

Because everyone says venture is not the only path and then you say "Great, what are the other paths?"

David Roberts

Yeah, yeah, that's right. There's a lot of hand-waving around that.

Johanna Wolfson

Yeah, yeah, I have more thoughts on that. We can keep talking about it. I kind of am assembling a group of people who want to figure this out, and I'm happy to keep in touch about it.

David Roberts

I mean, it comes up on this pod again and again and again. We just need capital that will hang out longer and accept lower returns over longer periods of time, basically. Like that comes up over and over again.

Johanna Wolfson

Right. And as excited as I am about our model, and I think it's extraordinary, the premise is not quite that it's, we're taking higher risks. But we don't think it's practical at this point, where there aren't other pools to draw from, to go after lower returns. There could be other capital that is suited for that. But we're saying, "Let us take on the highest risk right now, the risk that something might fail is higher." But the potential that it has extraordinary impact is higher too. So let us underwrite that risk where other funds aren't able to go, and we'll get something ready for more mainstream VC.

David Roberts

Right. It would be nice, I mean, in some bright future, to have a funding ecosystem where there's a smoother sort of like, "We'll help you on this bit, hand you off to these people who will help you through this bit." It's a little scattershot right now and every company is sort of wandering in the wilderness trying to assemble its own contract. But anyway, let's not get too diverted. Let's talk about mining.

Johanna Wolfson

Yeah, we should do that.

David Roberts

So share, as you see it, an overview of the mining challenge and in particular, sort of which materials you have your eye on, either sort of as problems or as opportunities?

Johanna Wolfson

So, at the highest level, the mining challenge stems from the fact that we're going to need a lot more of certain materials to enable the clean energy transition that we are striving for. And in terms of which materials, I will tell you top, top, top of that list are copper and lithium, and I would probably say copper even higher, because copper is the backbone of electricity. So whether you're talking about the grid, wind, solar motors, batteries, electric vehicles, everything requires copper. And that is set against a background where to meet clean energy demands that are forecast — you know, demand will double, which means we need to, some estimates say, double mining production and triple recycling, something like that.

Ore grades are declining, so we're, we've gotten the easy stuff already. The harder stuff is what's left. Permitting is really hard and takes forever. And that's for some not-so-good reasons and some very good reasons, which is that the backdrop, as you know, of the mining industry, is in many ways incredibly problematic in terms of environmental justice issues. Not a great record. And so, and then you add, there are other things bound up in the copper ball.

Like, because copper smelting, which is the majority of how we process copper today, is incredibly hazardous to the environment using traditional techniques, we actually have closed down most of the copper smelters in the US, which is a good thing for people who breathe that air. But it also means that we are taking, you know, copper mined in Arizona and we're offshoring it for refining and then sending it back, you know, as refined copper ore in products. And so that is challenging from a global supply chain risk standpoint, not to mention emissions associated with that transport. And so there's just a ton bound up with, "Okay, we need more copper, but..." And then there's a long list of buts for why getting more copper is hard.

David Roberts

And more lithium. Just briefly, because I want to talk about copper a little bit more, but briefly, it's striking that you don't include, I think, what a lot of people think about when this comes up, which is these allegedly rare earth minerals. The word "rare" is so unfortunate in that term because people think that those are kind of the linchpin.

Johanna Wolfson

Well, rare earths are interesting, and we haven't invested in that area yet. We may, but you're right that they didn't top my list. So we're talking about things like neodymium. Right. And the materials that go into magnets. And then, depending on your definition, you may or may not be including nickel, cobalt, manganese, and other things that go into battery chemistries, which I put those in the second tier only because, you know, I think we have more tunability and flexibility in battery chemistries on the margins. But rare earth elements, to your point on the word "rare", we are actually not at a global deficit on those, but 80% of the materials are in China.

And so, until recently, there was a risk and now, recently, a reality that, you know, China might withhold rare earth exports into the US, and that is what we're now seeing. And that, you know, probably will upscale domestic efforts. But on the other hand, then there's always the possibility that China will flood the market and disrupt the pricing, and it's just incredibly fraught. That's why they didn't top my list.

David Roberts

For instance, China might withhold them if we slap them with 100% tariffs.

Johanna Wolfson

Just as a forensics.

David Roberts

I always think it's hilarious. We're like, "What's China going to do?" And then we just go like, punch China in the nose, "Well yeah, they're going to do it."

Johanna Wolfson

Yeah, absolutely.

David Roberts

Our worst fears will come true if we go force them to come true. In the larger sort of policy community, there's all this concern about reshoring and all this concern about China dominating supply chains. Those are, though, economic security, political security, national security concerns. Do you adopt those? Is reshoring and securing supply chains part of something you think of as a goal of yours?

Johanna Wolfson

Not explicitly for that reason. I mean, we see geopolitical constraints and risks as something that could hold back the clean energy industry as a whole. So, in that sense, yes. But it is not a principal goal of our fund to specifically have a US mineral supply, although we think it's a good idea for a lot of reasons in terms of having optionality. So, I guess that's how I would thread that needle.

David Roberts

Yeah, let's talk about copper then. And taking a kind of step back, I'm just sort of curious, as a VC, when you approach something like copper, you know, you get these stats, "We're going to need twice the copper," "Copper ore quality is declining," etc. Copper is a problem. How do you go about approaching that sector? Because I'm sort of like all my training and the way I think about it is from a policy perspective, like that's sort of how I think, but that's not your angle. So when you approach something like copper, are you going and looking for companies that are just getting started, are you going to an area where you think there needs to be a company and sort of planting a flag and looking around saying, "Hey, somebody come start a company here." — like what is a VC methodology when you approach something like copper?

Johanna Wolfson

Yeah, that's a great question because it is so wide open. So, I'll say a couple of things. One is that we tend to, just as a firm, seek opportunities both ways, both opportunistically, "come one, come all," we kind of want to look at everything. And then we also do a lot of thesis-driven work and, in particular, an associate on our team, Cass Vickers, put together a pretty comprehensive look at copper over the last couple of years in terms of "Where should we be looking?" Because of our unique vantage point in the venture investment scene, that also means we're looking, where are others funding already? We don't need to go there, but let's go where others are not funding.

So, to take one example of that, there's a process called heap leaching where mining companies take degraded ores that are uneconomic assets, put them in a heap, it's called a heap, and they leach, you know, an acid through it. And there are companies like Jetti and Ceibo who have been very well funded. It's very exciting, actually, for the sector that these companies have been well funded by climate tech VC, not us. And those are kind of novel leachates that they're putting into solution to get more out.

We looked at that and we said, "We're not really needed there." But guess what, this whole idea of a heap leach process is really a data-starved process overall. They're not distributing those assets correctly.

David Roberts

It's extremely analog; one might even say, kind of gross.

Johanna Wolfson

Yeah, absolutely, yes. They don't even try. Right, with the word. It's heap leaching.

David Roberts

Yeah, they don't even try to disguise how gross it is.

Johanna Wolfson

So, we invested in a company, you know, just very, very pre-seed stage that, you know, in many ways we partnered with hand in hand to just get a narrative together around, you know, instrumenting that heap and being able to — I know I'm trying to make it sound more glamorous and it's just not going to happen. And being able to, you know, actually achieve the yield enhancements that should be possible if you're treating that like an instrumented asset, which it's traditionally not done. It's like an 18th-century technique.

David Roberts

What was that one? It's called Muon, right?

Johanna Wolfson

It's Muon Vision.

David Roberts

They're shooting muons, which are what? Subatomic particles? What the heck are muons?

Johanna Wolfson

The universe is shooting muons. We don't have to do anything to get them. We just need to bury a scintillator under the heap and watch the muons come in and see how the liquid density is varying as a result.

David Roberts

So, what it's telling you is like, where is the liquid in the heap coming down through? Like, where is it coming faster and slower? Where do you need more liquid? Basically, it's like telling you a little bit about what's happening inside.

Johanna Wolfson

Exactly, yes, exactly. And to put this in the broader context of the copper industry, you've got pyrometallurgy, which is the traditional way of mining copper, hard rock mining, and you put it in a smelter and you go, there's more work to do there. And I mentioned earlier that smelters are pretty bad, so there's more to do there. And we've actually made another investment on that side into a company called Still Bright. But the industry as a whole is actually wanting to shift more to what's called hydrometallurgical processing, which is how they might be able to get at some of these lower-grade ores that aren't as much using the traditional methods, but they're going to need help to do that.

And that's part of why we see, you know, a lot of opportunity here.

David Roberts

And just broadly, we don't have to get too deep into it. But pyrometallurgy is basically like, you burn things to separate them. Basically, you're trying to get something out of the material and you burn it off, burn it with the presence of various chemicals that separates it.

Johanna Wolfson

You got it.

David Roberts

Super dirty, super energy intensive — just like the iconic, unpleasant industrial process.

Johanna Wolfson

It is the iconic, unpleasant industrial process. It is the reason we barely have any smelters left in the US. Like, that is a good thing. But, we need alternatives.

David Roberts

But hydrometallurgy, just to orient people, is basically, you are immersing the stuff in a solution of liquids that contain various chemicals that leach the materials apart. So, you don't require heat. I mean, basically, it's like a room temperature process. Is that one of the big advantages?

Johanna Wolfson

You don't require heat, although it's interesting that you get more out if you do heat it. And so, some companies are looking at, you know, siting geothermal alongside heap leaching to, you know, make it even better. But it kind of needs to be geothermal to make it worth it. You can imagine it's always, you know, a spreadsheet exercise. But that's right, that's a good description. And you know, it should be said, just because I'm so focused on the environmental justice aspect of all this stuff, is that heap leaching is not, you know, it's not some glorious alternative that doesn't touch people either.

You know, it takes up a lot of space and, you know, it leaves behind an asset.

David Roberts

It's a giant pile of waste with acid running through it.

Johanna Wolfson

It's exactly, yeah. Look, none of this stuff is what we might choose to do just for fun. It's all about what, you know, what are the cost-benefit trade-offs that we have to make if we decide we are prioritizing and how do we minimize damage in doing that? And I want to, if I can just go to one other thought on, you had asked me how do we think about scoping the space and how do we think about making investments? And as I was reflecting on the investments we've made, I realized something, which is that while the high-level point to do any of this is what we started our conversation around, which is to enable the energy transition because we're going to need all these materials.

That almost ignores this big thing underneath, which is how emissions intensive all these processes are. And you went there on the smelting side. But we've actually, because when we make an investment, we underwrite not just to an eventual financial outcome that we know the financing sector will pay attention to, but we underwrite to a gigaton scale of impact. And we've decided to, when we do that underwriting, focus on the process emissions, not whatever downstream enablement and unlocking of a clean energy industry might occur. And I think that's important because it keeps us focused on making sure whatever we do, it has to be better than what's been done before.

David Roberts

Right. Although, it is worth saying, just as a bit of information, that the emissions of the copper-making process are relatively modest in the grand global scheme of things, especially compared to all the clean energy, you know, technology that it enables. Like, if you're going to spend emissions, you know, getting copper is pretty good.

Johanna Wolfson

Yeah. They are certainly modest in the scheme of what could be avoided and unlocked by the industries they are enabling. Otherwise, I hope we wouldn't be even doing this. But they're not tiny. They're meaningful enough to clear our bar, which is the gigaton scale bar on process emissions alone, which in some cases I was surprised by.

David Roberts

Let me get into a few of the nooks and crannies of copper here. First, I want to talk about electrochemistry because here at Volts, we love ourselves some electrochemistry. You mentioned a company that is using electrochemistry.

Johanna Wolfson

Still Bright.

David Roberts

Still Bright, yes. Talk a little bit about what they're doing and what it is substituting for.

Johanna Wolfson

Great. So, we talked a little bit about the traditional pyrometallurgy and the smelting process. And so, Still Bright is essentially taking out the smelting process, which is really awesome. So, they are going after what's called chalcopyrite, which is part of the universe of sulfide ores that pyrometallurgy traditionally goes after, although chalcopyrite is generally considered a lower-grade ore. So, there's a lot of it lying around. And it's been challenging for smelters to extract copper from, not least because it's a dirtier, lower-grade ore. And so, when you put it through a smelter, it emits all sorts of nasty stuff, notably arsenic, which is like, could you think of a worse thing to be, you know, gasifying and spreading into a community?

And that is one reason why it's just not done. But again, if we're going to meet this demand, we need to find clean ways to go after the ores that we do have. And so, Still Bright has — this is a spin-out from Columbia University, tremendous technology — they essentially react copper concentrate through a vanadium redox flow battery and they're able to produce solid copper through that electrochemical process and have demonstrated pretty extraordinary efficiency. And they're going to market with the case that we can do processing of sulfide ores right here in the US and we don't have to smelt them and we're not going to emit anything.

David Roberts

So this is an alternative to smelting?

Johanna Wolfson

This is an alternative to smelting, which makes it pretty powerful.

David Roberts

Yeah, we can take these ores and produce copper with them on site. So, you don't have to ship anything away for processing. And this is just a gleam in someone's eye, what's the state of it?

Johanna Wolfson

This is excitingly, you know, a few steps beyond that. So a couple of years ago it was. And Jon Vardner, who's the founder of this company, was kind of working on it after his PhD postdoc at Columbia University and realized he had a pretty powerful concept here. And so, in the last couple of years, he spun that into a company. He got some preliminary funding from us and others, and he recently, I don't think it's been announced yet, but closed a pretty meaningful series seed round and is going to be building the first demonstration of this at a demonstration but still meaningful non-lab scale.

And that's going to be for the world to see within about 18 months from now. So, a lot of exciting things to watch there. And they've seen really promising results in the lab. Of course, new engineering challenges do emerge when you take it up the next level, but the numbers that we're seeing are pretty promising and we're excited to be able to see that at the next scale.

David Roberts

Yeah, I'm so excited about electrochemistry. It seems like the solution to all the most difficult problems. I've had someone who's making steel with electrochemistry on the pod, someone who's making concrete with electrochemistry, basically substituting electrons for carbon molecules. What a beautiful thing. You just need a lot of cheap electrons.

Johanna Wolfson

To me, it is the most exciting way to interpret "electrify everything" because once you see it, you can't unsee it.

David Roberts

For all the "difficult to abate" sectors, electrochemistry is the answer. Almost every one of those, I think, in the long term, we'll see.

Johanna Wolfson

And we've made a number of electrochemistry-focused investments and the challenges are hard. Like the engineering, it really, truly is very hard and I don't want to dismiss that. But they are tractable. It's not an intractable set of challenges.

David Roberts

Interesting. And what about something I sometimes hear about mining in situ, mining underground? Are you invested in that? And how the heck does that work?

Johanna Wolfson

Yeah, so we have not invested in that. I've sometimes heard that term applied to heap leaching, but I don't think that's what you mean. I think you might be referring to an electrostimulation approach that we've seen, it's called ISR mining. Where you can sort of stimulate to the surface the ore that you're after. But I don't know a ton about it. We haven't made an investment in that area.

David Roberts

And what about these two different methods of basically mining waste? One is mining what are called tailings. Are you getting involved in that and how much promise is there in that? Because there's a lot of mining tailings lying around the world.

Johanna Wolfson

It is a huge opportunity. It is a tricky one to crack because typically the tailings are what's left behind. And sometimes those are, you know, inactive sites. And there's a question of who owns it and how do you get access. But putting that aside and just thinking about an active mining operation with tailings, we think about separations there. So another one of our portfolio companies, SiTration, which has developed a silicon-based membrane that shows really tremendous selectivity for multiple of these elements that we care about, copper, lithium and others, it can be tuned and be highly selective to not only size but valence of the ion you're after.

So, some of these technologies that were actually, they have flexibility in how they can go to market in mining. You could think about them as technologies to deploy in the secondary recovery market, which we didn't talk about yet. But we need to, we should do just a ton more of because it is maybe the one way we avoid some of these most thorny community and justice issues. And then secondly, they could go to market on the tailings front, you have these waste streams on site at mines and you should be able to valorize them.

And that's, you know, kind of, it's in many ways it's a variation of the heap leach concept. I have now what I have designated as uneconomic or what previously, according to my prior technology toolkit, was uneconomic and it's just a calculation of what's my ROI on bringing this new tool on board and whether I can reliably valorize what was previously written off as a waste stream. So there's quite a lot happening there. And also on the, we talked briefly up top about the rare earth elements. I've seen a lot of companies going after mining tailings to find the little stuff.

This might be a copper, a silver, a gold, or a lithium mine, but there's other stuff in there. You know, the earth's crust is very interesting that way. And so, if you can find cheap enough ways to go get after it and recover, you know, smaller amounts of still valuable materials, if you haven't invested all the upfront, you know, CapEx to mine those, the mining company did that for its main thing, but it can have secondary revenue streams. That's where we're seeing a lot of activity and there's quite a bit of innovation on that front from, you know, materials innovation like the one I mentioned to biological leaching microbes that secrete kind of an especially effective leachate for some of these rare earth minerals.

So there's quite a lot happening there.

David Roberts

And the other waste stream to mine that gets discussed, which I've always thought seems promising, is just landfills. Like, people throw away a lot of metal. A lot of processed pure metal in devices and so little of that gets separated, so little of that gets recaptured. I just feel like we're in a world with tons of landfills with tons of valuable materials in them. But then I also think, what is the cost structure of schlepping through a landfill picking out good stuff? Is that a reasonable thing that we are ever going to be able to do?

Johanna Wolfson

Well, I love that you went there. I was just on the phone yesterday with an entrepreneur who I was asking some of these questions to, not for the metal waste reason but because she's working on — to keep it the heap topics — instrumenting landfills to find where RNG pipes might need to be rerouted to capture methane. But anyway, so I was asking some of these questions about landfill economics and operations and probably not a shock, but it's not like the most innovative sector. And so, you can imagine sets of drone-based scanning or, you know, AI-driven imagery deduction that's saying, "Well, look here, you know, there's something promising and you know, go send a robotic arm to pick it up and then send it through, send it through a line that can do some visual analysis" and we have seen companies by the way doing that visual analysis of waste not from landfills but just online and recycling facilities.

And so, that technology is developing. And so, I can certainly invent in my mind a future where what you describe is real, but it's probably not an especially soon thing. Although, I will say that this is an area where I think in the US, we're pretty far behind Europe as an example. People just, I think, care more about separating and the landfill setup, and actually, the innovation landscape in Europe is quite a bit more evolved from what I understand. So, maybe we need to go over there first and see what our future looks like.

David Roberts

One thing I thought was interesting in your sort of investment thesis document about copper was that you are going to steer clear for now of the seafloor stuff, which is a hot topic now because Trump, I don't know exactly what he did, it's just all these executive orders. I think he, at one point, it was either an executive order or a Truth Social post. It's hard to keep them distinct where he's like, "Yeah, go mine the seafloor." But you for now are staying away from that. What's the thinking there?

Johanna Wolfson

Well, and we haven't made any definitive, "we will never" kind of statement about it. I will say we do talk to companies doing that. We find it interesting. As of yet, we haven't made an investment in that area. My thinking is maybe twofold. One is that there is, we were talking earlier about how mining is a data-starved industry and we were just talking about landfills where the same is true. And I think if you think about low-hanging fruit, there is quite a lot of it on land or I guess out of the sea.

And so, in terms of just like where to focus time and energy in dollars, it hasn't been our focus. It would be reasonable for someone to make a different decision. But that's true as of now. And then secondly, we do a fair amount of active investing in ocean tech. It has tended toward shipping and carbon removal. And so, we know a little bit about, and I emphasize a little, about maritime regulation and international waters and the complexities associated with that and I think are under no illusions about, you know, what would need to be sorted to responsibly and reliably do deep sea mining.

And it's not to say that it's an intractable problem. It's just again, like we're, you know, I'm always staring down the clock, I feel at 2050, and thinking about what this trade-off between we're, we're a risk-embracing fund that can do really big swings, but we're increasingly hurtling toward some points of no return here. And so we have to make tough trade-offs about what is likely to come to fruition in time. Oof, that got dark.

David Roberts

Yeah, let's talk about a more pleasant topic, which is recycling. I think everybody holds out hope when they think about the far future, you know, that we can get to a place — I mean, this is the idea, right — eventually we get to a place where we've mined enough and we are recycling and we've created something close to a closed loop. I mean, this is sort of like the dream. It's pretty far off. I noticed a note of caution about recycling in the document. So, how are you thinking about recycling?

Just, I mean, physically and environmentally, obviously, it's a dire need. But in terms of like VC, you know, targets, where do you find in there?

Johanna Wolfson

Well, we actually see a lot of activity. So, I don't know if that note might have been referring to less critical need for catalytic capital. I would have to look back to see if that's maybe what it was referring to. But because there are a number of companies that are out there and doing a lot and, you know, looking successful. Redwood Materials and lithium would be the prototypical example — Glencore. But there are others. And then we see emerging companies and Cycle is a good example that I think are going to maybe give some of those a run for their money.

And so, there's some promising activity. And I think the revenue model is tough. It's a tough nut to crack, but again, probably a tractable one. And I think some of those founders and entrepreneurs are really paving the way to figure some of that out.

David Roberts

There's some cool electrochemistry.

Johanna Wolfson

There's electrochemistry everywhere.

David Roberts

I know once you start, once you start seeing it.

Johanna Wolfson

Yeah, and I mentioned earlier, SiTration, who plays in that space. But I think recycling is so interesting because, you know, keep in mind for these mining and materials calls to action, it's still a little bit future looking. It's, you know, over the next 10 years or out to 2030 or 2040, copper demand will double and lithium will quadruple or whatever it is.

David Roberts

But copper demand has not. I mean, you make a note of this in the document. Copper demand has not gone up yet. So, this is all "probably."

Johanna Wolfson

It's all predicated on predictions, which are just that. Right. So, well, I'll come back to that. But to finish the recycling, I think it's interesting. Let's assume for a moment that those predictions do come true. It's actually very hard to see, see permitting and the ores in the quality that they are, really meeting that. And so, the demand for secondary materials will probably skyrocket in a way that we don't yet feel today. And so, I love those companies that are kind of getting ready for it because I think they're going to be really well positioned. It's just we're not feeling it yet.

But to your point, this is all predictive and they're just that. And so, it's kind of this strange thing that we're doing when we invest in this space. We're sort of warding off a future what could be a lock in the future, but it's not an active unlock. And so, one of the things I think about while this space is really important to me, and I think there's a lot that can be done especially to clean up the mining industry in the scheme of climate tech investing. It's just one prong. And when it's an indirect prong that is predicated on a future thing, we're always weighing — when you compare that to, you know, taking a molecule of methane right out of the atmosphere, you know, how should we be weighing that?

Which is, you know, that doesn't have a simple answer. But it's an interesting question.

David Roberts

Yeah, a certain amount of skating to where you think the puck is going. You talk to the people in the long-duration storage crowd, those poor people who are hearing simultaneously, "There's no current demand for your product. But yeah, don't you worry, in 10 years there's going to be so much." It's sketchy. Tell us about lithium. So, copper is the big one. I don't really feel people get that the need for more copper. So, I'm glad we're highlighting that. But also lithium. And as a background to this question, this is also a general question about materials.

So, I frequently, I've been doing this for 20 years now. You frequently hear like, "This or that material is rare." You know, "There's going to be exploding demand and there's not enough supply. There's going to be a giant choke point. It's going to stop everything." And like, it just inevitably never happens. Like, somehow or other, we innovate or substitute around materials challenges and so like this, all these projections of like in 10 years, you know, "X material is going to be $2 billion a pound," they just never come true. Which seems to me, it makes it tricky to invest in this area.

And so, this brings us to lithium. Like you undoubtedly recall, it was not that long ago that people were saying, "Lithium's price is skyrocketing. Everybody wants lithium. We're heading up to a giant, a giant lithium shortage that's going to grind the whole industry to a halt." And now, lithium's like dirt cheap again.

Johanna Wolfson

Yeah, it's dirt cheap. But will it go back up?

David Roberts

Yes, well, again, who knows? So how do you think about that in terms of investing? Are we going to need a ton of lithium? Is it going to be cheap? Is it going to get scarce? How do you begin to approach that?

Johanna Wolfson

So, that is totally true, that deep and staggering uncertainty. But that's no different than anything else we should be looking at as good venture investors in terms of whether we're talking about carbon markets or something even further afield. So I guess, you know, there's comfort in that discomfort. But I think your point is right and the, you know, the way we've thought about this and you know, we actually made our first lithium investment back in 2018, which is a long time ago and not many people were talking about it. That was in Lilac Solutions, which is, you know, doing direct lithium extraction from brines.

And then, more recently, we invested in a company called Rock Zero, which is doing hard rock mining of lithium, which is sort of a different part of the landscape. But we think that there will be, even if you don't get into the game of what exactly will the demand curve look like and when, what you can be pretty sure of, or at least I think so, is that if you have an extraordinarily better way of doing something, then you're going to be able to unlock value in that. And the market projections that may or may not come to pass are kind of unbounded upside on that. So that's a little bit about how we think of it.

And we have to remember that this is a long game. So, lithium prices crashing are unhelpful for a lithium company out raising money during that time. But it's not probably a statement about yes or no on the long-term target. But I do value your point that we tend to find a way, and that's probably what is behind my statement about in the grand portfolio of technologies to be supporting, I think this has a role. I think it's a role that needs to be kept in balance to all the other problems we're chasing after for those of us who care about achieving this transition.

David Roberts

So then, mining-wise, you guys are all over copper. You're in several early stages, sort of improving copper mining. You're in a couple of lithium. Are there other mining... is it just copper and lithium? Mostly like those are the big buckets. Are there others in this general area that you are excited about?

Johanna Wolfson

So, in terms of investments that we've made, it's copper and lithium and the company that's going after secondary extraction, SiTration, that can be deployed across many materials. We've also looked at others. We may make other investments, but it's no accident that we focused in on copper and lithium. And I displayed my bias upfront that those are the two that are really most critical. I would say there are others that we'll continue to look at. There are other companies though in our portfolio that touch on mining, even though they're not part of this critical or rare material conversation.

And those interestingly tend to fall into the carbon removal space where we're talking about, you know, doing some form of enhanced rock weathering or accelerated weathering of limestone, where if those approaches are successful, and I'm thinking, you know, in our case companies, Calcarea going after decarbonizing shipping and Vesta, which is doing coastal carbon capture. But there are many others, you know, going after different iterations of that carbonate chemistry. Basically, if those types of approaches are successful, there are some meaningful mining implications there too, in terms of where those materials are being sourced from, how they're transported, grinding costs, grinding emissions and so forth. So it really does, I think, underline how foundational the mining industry is to a lot of what we care about, even if we don't always look directly at it.

David Roberts

Yeah, yeah. And I should make my point that I always make when mining comes up. It is true that clean energy technologies require more per unit of generation of these materials than fossil fuel generating energy generation technologies require. But what you don't have to do is mine a continuous supply of fossil fuels to dump into those machines. So, you just need the materials once and then you're done. As opposed to needing fewer materials to build the machine, but then needing a continuous stream of fossil fuel to put in the machine, which does more landscape, social, whatever damage you want, whatever kind of damage you want to talk about, lots more being done by fossil fuel, you know, digging up than there is by materials mining.

So, yes, more mining of these materials, but less overall disruption of the Earth's crust, let's say.

Johanna Wolfson

Right, but I'm so glad you brought up that point because just the truth that there is more of these materials in the renewable energy and electric energy sector, you know, it just, it drives home the point that we have to do mining better. And I know we've said it, but I just, I do worry about sometimes the conversation in climate tech around mining seems to be, you know, just, "Let's get more." And it's like, no, that's not it. "Just get more" hasn't served us that well as a human race, so we have to do it better.

David Roberts

Yeah, there's like, there's two unproductive sides of that conversation, which I saw online when I threw this out there. One is just like, "Why are we worrying about these relatively modest impacts when the whole fate of the planet is on the line? Blah, blah, just mine what you need to mine, et cetera." That's that attitude. And then there's the sort of like, "Mines are bad, they ruin communities, they ruin landscapes. Let's get rid of them. Just recycle." Yeah, I got, I got that one thrown at me several times. And it's worth saying that, like, if you're gonna need 2x the copper, even if you recycle 100x of the copper that you currently have, you're not gonna turn it into 200x. So, like, just reinforcing your point, like, there's a lot of mining needed, no matter which direction you face, no matter what you want to do. So you might as well do it better.

Johanna Wolfson

You might as well do it better, and you might as well kind of throw yourself into the learning of that. So, if there's one thing that I would say that I've really benefited from, it's kind of throwing myself headlong into what is hard about mining and not looking away from it, and, you know, talking to folks in the communities affected and visiting them. And that's what I advise portfolio companies to do when we make an investment: go there, feel it, and talk to people. So, this is not academic for you, because if it's academic, you're going to make the wrong choice.

You're not going to be able to fully value the complexity of what you're engaging in. Doesn't mean that you shouldn't do it. Like, let's grapple with it, but let's grapple with it for real.

David Roberts

Yeah, final-ish question. I think maybe energy, in a way that is unlike sort of digital tech, which is the tech that everybody's kind of more familiar with, kind of what they think of when they think about tech. Like if you're developing apps, it's kind of a wild west, you can kind of do what you want. But in energy, everywhere you turn, there's policy, there's politics and policy that are incredibly relevant and germane to a lot of these industries. You know, depending on which way the policy winds blow, entire industries in this area can be sort of like created out of whole cloth or shut down.

Johanna Wolfson

Totally. I mean, I saw the announcement yesterday, "Coal designated as a critical material." No, I'm serious. Because of metallurgical steel.

David Roberts

Hilarious.

Johanna Wolfson

Metallurgical coal for steel. So yeah, there you go.

David Roberts

Yes, yes, I know. So, but just like my impression is from the tech and investor community that they're super informed on tech and tech risk and business risk, but maybe aren't super savvy when it comes to politics. Of course, I think that about everyone, I yell at everyone about that. But like, how do you think about policy risk? Is that a big column in your spreadsheet or is that, do you just sort of treat that like, you know, acts of God that you can't, that you have no control over?

Johanna Wolfson

Are you asking for mining in particular or for our investing practice in general?

David Roberts

Well, let's start with mining in particular, but I'm interested in the general answer too.

Johanna Wolfson

It's probably different between the two. So for mining in particular, I think by and large, in terms of the march of history and mining, hopefully getting better over time, currently lax regulations notwithstanding, I think that in general, policy forces will be tailwinds for most companies innovating in this sector because they're doing things better, cleaner, more efficiently. And that's where all the pressures over time are going to point things. So there will be differences in terms of which geographies is that true in first? And by the way, there's a cautionary tale there because startup companies need to, we often say everyone needs to go fast. But in areas where there's kind of really heady, fraught issues, you sometimes need to go slower now in order to go faster later.

And so, don't go necessarily to the place to deploy where you have the most lax regulations. Right. So, either apply more strict regulations to yourself elsewhere or actually start in a place with stricter regulations so that you have kind of a squeaky clean reputation from the start. So, that's just kind of a side note of the playbook. But, I think in general, the policy factors will be tailwinds for startup companies in the sector generally.

And I guess that does map to how we think about policy risk more generally at Azolla, which is, we both eschew and totally welcome policy risk on different timescales. So, on the near-term timescale, what we probably will never do is underwrite an investment that requires a subsidy of any kind to be economic because it's not reliable, it's not durable, and it's not the way we think people are incentivized, and it's just not the political system that we've seen. But in the longer term, we have made a declaration that in certain cases policy will land.

We may not know the specifics, but we know that in the arc of time, mining regulations will tighten or regulatory carbon markets will grow. That kind of macro confidence we do sometimes have about the policy environment and —

David Roberts

The arc of history bends towards justice?

Johanna Wolfson

Yeah, there we go. Absolutely.

David Roberts

Yeah, well, let's hope so. I mean, and in a certain sense, like if it isn't, we have bigger problems, we're all screwed anyways. Might as well fill your time with something. Mining, as you say, as I think everyone acknowledges, globally, mining is a grim, not just grim physically, but like the industry has a terrible record. It's been rapacious, it's destroyed a lot of landscapes, destroyed a lot of communities and has a sort of established a history of "We're gonna do the cheapest thing, come what may." So, I guess just like an actual final question which is just like until and unless these things you're investing in become cheaper than the alternatives, do we have any reason to believe that the mining industry is going to make sort of good faith efforts that they will spend extra money to clean themselves up or they're just going to...

In some sense, you almost need policy to force them to clean up to make these things you're investing in viable. Do you know what I'm saying?

Johanna Wolfson

So, I mean, look, good faith efforts, probably. I mean, I think that there are good people who work on the community engagement sides of mining companies that are kind of trying to do the right thing. Like, I really believe that. And you know, you look and you learn about the programs going on at say, the Resolution Copper Mine in Arizona, which has met with a lot of challenges and they're not doing negative things in the community alongside the mine, they're doing positive things. How does that weigh? Well, the community should decide. But just to say that there are good faith efforts, but I would say good faith efforts are probably not enough.

And so, I just agree with your actual conclusion that you probably need policy to force it. And that's because every incentive, by the way, for a mining company is to kind of promise the world and then it's actually very, very hard to deliver the world because reality intervenes. And so, you're just like setting up for this huge disparate outcome in terms of what the vision was and what the reality was. But I do think that policy and regulation is totally critical here because I don't think mining companies really have the incentive to go as far as absolutely possible, which is what's necessary.

You know, it's not necessary to do a little bit more here or there. And then, maybe a final thought here, and this is where I'm going to start to sound like an optimist, which is that these companies that we support and others support and that are bringing in many ways the new front of mining technology, whether that's cleaner or more efficient or more intelligent, they actually have an extraordinary opportunity to sort of demand a different set of behaviors from the mining companies that will be their customers if their technologies prove successful. And so, if you have the most, you know, the most promising electrochemical approach to refining copper and you are licensing that out or deciding where to site your facility, you are going to call the shots. Now, the startup companies that are developing those technologies today, they're not yet in a position to call the shots, but if they are successful, they will be.

And that's why, to me, it's so important to kind of, from the start, think about what kind of business you are trying to build and what is the change you're trying that you might be able to demand just by dint of having a better solution.

David Roberts

Yeah, the landscape looks different when there's no other way of doing it but the bad way. Like the minute there's a different way of doing it, even if the new way is more expensive, the whole sort of social and political landscape shifts.

Johanna Wolfson

That's right. But I think, I mean, for a lot of these companies, the new way of doing it won't be more expensive. It's actually a win on many levels.

David Roberts

Well, your lips to God's ears. All right, well, Johanna, thank you so much. It's really fascinating. I'm glad you've dived into this, you know, sometimes unpleasant area. I appreciate it.

Johanna Wolfson

Absolutely, I had a lot of fun. Thanks for the discussion.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

This week on "What the F is Happening" (periodic episodes in which we reluctantly discuss current events) we talk with Adrian Deveny, a former Senate aide who was in the trenches for the IRA's creation, about the House GOP's "Big Beautiful Bill." In its current form, it amounts to wholesale destruction of the last four years of climate policy. We ponder…

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In this episode, I talk with Catie Gould and Alan Durning of the Sightline Institute about the "dark matter" of urban land use: parking — specifically, the municipal parking mandates that help make housing more expensive and scarce. We discuss a landmark new parking reform bill in my home state of Washington, what it does and the coalition that made it possible, and point to other places where parking reform is coming soon.

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Text transcript:

Parking reform in Washington, parking reform everywhere!

David Roberts

Hello everyone. This is Volts for May 28, 2025, "Parking reform in Washington, parking reform everywhere!" I'm your host, David Roberts. When it comes to urban and suburban land use, there is no topic more delicate and contentious than parking.

Just between us here on the pod, the real reason to think poorly of parking is that, ipso facto, it works against density: the more land devoted to concrete car stalls, the less devoted to everything else, including uses that create much more tax revenue. Excess parking creates urban and suburban dead zones.

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But reformers who work on the ground trying to change this stuff will beg you not to talk that way in public, because the average voter's disposition towards density ranges from uncomprehending to neutral to negative, whereas parking is something everyone knows, often needs, and is generally happy to find. "Less of something you like in the name of something you don't give a damn about" is not exactly a political winner.

So how can reformers work to remove some of the onerous parking regulations that make building housing more difficult and expensive than it needs to be? What kind of coalitions do they build? What kind of policies do they push?

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To get into all of that, today I am going to talk with some folks from my home state of Washington, where an absolutely kick-ass bit of parking reform was recently passed by the legislature and signed into law. They are from the Pacific Northwest's own Sightline Institute, which is, in my humble opinion, pound for pound, one of the best think tanks going — they choose good fights and have an impact well out of proportion to their size. And they played a key role in this parking victory.

Catie Gould is a senior transportation researcher there, and Alan Durning is the founder and executive director. They're going to fill me in on what's in the bill, how it got done, and what's next. So, let's parallel park this thing.

With no further ado, Catie Gould, Alan Durning, welcome to Volts. Thank you so much for coming.

Catie Gould

Thanks for having us.

Alan Durning

Oh, thank you for having us.

David Roberts

Very excited to get into this. This is juicy, juicy stuff. Catie, I want to get to you in a minute for the details of Washington's bill. But Alan, maybe let's just start with you. You have been running Sightline, gosh, since the 1900s. So tell me, when did urban land use come on your radar and become a priority? And then secondarily — this is a tripartite question — secondarily, when did parking reform emerge out of that as its own distinct fight? And then third, why do you think parking reform is a good fight to pick?

Alan Durning

Wow, right up front, three hard questions. Just to tell the historical answer and wind up to the big one about why parking is so important. Since 1993, Sightline has been focused on making Cascadia, the Pacific Northwest region, a model of sustainability. And quickly, like within the first year, we were focused on urban sustainability as well as rural. At that time, the big fights were about salmon and old growth forests and things like that. And we said, "Look, climate change is the epochal challenge before us, and to get to that, we need to look at the shape of our cities and sprawl and all the rest of it."

So, land use was on the agenda from the very beginning. In 1994, I was doing an interview for our flagship book with a transportation scholar in Victoria, and he turned me on to parking. He was talking about this guy named Donald Shoup.

David Roberts

Yeah, Shoup goes way back.

Alan Durning

Exactly. He went on to become the patron saint of parking reform. May he rest in peace. He passed away earlier this year. The author of an amazing book called "The High Cost of Free Parking."

David Roberts

Highly recommended on this subject.

Alan Durning

It's the way to get parking-pilled. Catie and I have each read all 733 pages at least once. But in 2012, I think I was just wrapping up a series of articles about silly regulatory barriers to doing common sense, good green things. And I thought, "Oh, I'll just finish out the series by doing a single article about parking regulations." And that metastasized into 40,000 words and 15 articles. You know how this goes, David.

David Roberts

I'm familiar.

Alan Durning

You're familiar. Yeah, I just thought I'd do it, I'd just whip out a quick article, and it turned out that parking connects to everything that we care about in the world. It connects to economic opportunity and prosperity. It connects to climate, of course, a core issue for Sightline, but also it attaches to and is important to the cost of housing and the opportunities to start and operate small businesses. Everything turns out to be connected to parking. That's why I say we're kind of parking-pilled. So, in 1993, we started writing about it.

David Roberts

So you were on urban land use then, before, it was cool?

Alan Durning

That's true. I mean, is it cool now?

David Roberts

I think it's cool.

Alan Durning

Is it?

David Roberts

We're making it cool, Alan. Come on, buck up. It's cool now, we're cool.

Alan Durning

Okay. Well, it's news to me. My children will be delighted to learn that I'm cool. And why parking? I just kind of gave the answer. Parking turns out to be — it's like dark matter. It's like most of the universe turns out to be dark matter, according to the cosmologists. And parking policy turns out to be just similarly influential in how we live our lives and how our cities are shaped. It's this invisible force that shapes how cities develop. It affects everything that we care about. Most prominently in Washington, the cost of housing, which is the key driver of most political movement in the states, is the top political issue.

David Roberts

When we talk about parking regulations, are we mostly talking about parking minimums, parking mandates? Is that the evil here that we're after?

Alan Durning

Well, let's not define it as an evil, but it is the dark and invisible force. And yes. So, when we say parking regulation, what we're talking about is that cities all over the United States and other countries as well, to a certain extent, have hidden in their code books, in their local ordinances, requirements on every building lot about how many off-street parking spaces need to be provided based on what type of building it's going to be. And these mandates, these parking mandates, dictate what home builders can do and what developers of office buildings can do, and so on and so forth.

These lists of these mandates, these requirements run to, you know, sometimes dozens of different rules for like what, what's required of a bowling alley? What's required of a daycare?

David Roberts

Yeah, and the really fun part is that like a bowling alley in one town might, you know, be required to have like two parking spaces per lane, and in another town it's five, another town it's ten. These things are not derived from any formula or math or science.

Alan Durning

Like, I think it's 12.5 in Puyallup, Washington for bowling.

David Roberts

Completely arbitrary.

Catie Gould

Because they don't regulate it per lane, they regulate per square footage there. And bowling alleys require huge amounts of square footage. So, if someone was actually going to build one, they would be proposing their own number and having to provide their own study because no one could build that much.

David Roberts

Yeah, yeah. And we should say that, like parking, is expensive. Like, this is another thing I think people intuitively don't necessarily get about it because it looks like it's just a patch of concrete on the ground. But that's expensive. It's expensive to build, it's expensive to maintain. It's not a small thing to require it of a builder.

Alan Durning

Yeah, that's exactly right. And I maligned Puyallup, mistakenly; it was Redmond that required 12 or the equivalent of 12, and Catie can explain all the details of it. We need to get Catie into the conversation. But let me talk a little bit about the cost. The cost of parking is really very substantial. The real estate value of a parking space in the Pacific Northwest, just as space, starts at at least $5,000. And if you're talking about a constructed space, like underground parking or something, it might cost, like, $60,000 or more. In fact, there are calculations that we did years ago that suggest that the aggregate value of our parking exceeds the aggregate value of our vehicles.

Yeah, this is just epic quantities of money because we're allocating 10-20% of the surface area of our cities to parking.

David Roberts

Yeah, what blew my mind in this — I mean, you know, I've gotten a little parking-pilled, too — and one of the things that did it for me is these aerial maps that they have now where they just shade parking in a city. And you look at these aerial maps, and you're like, "Holy crap, that's like half — that's literally like half the city is just dead concrete. That's, like, occupied, like, 5% of the time." It's really insane when you contemplate it. So when we talk about reforming these parking mandates, generally, what we want is just to get rid of them.

And to be clear here, we'll probably say this 10 times throughout the pod. That does not mean getting rid of parking. Getting rid of parking mandates does not mean getting rid of parking. You just are allowing the developer of the bowling alley to determine on their own, contextually, how many parking spaces will be needed. Is that right? I mean, that's the nut of it.

Catie Gould

Yes, it's really about who gets to make this decision about what is an adequate amount of parking. Is it the property owner deciding what they want to do on their own land or what they think they need? Or is it someone from the city planning office, whoever was on city council back in 1967, the last time that these rules were updated, which is the case in many places.

David Roberts

I know. And they were just pulling these — it's not like there was good science in 1967, either — they pulled them out of their wazoo 50 years ago, and they've completely shaped urban space ever since. It's wild. Like dark matter, I think, is a good comparison. All right, so that's background. Catie, let's talk about this bill. Very exciting, the Parking Reform and Modernization Act just passed legislature, just was signed by the governor a couple of weeks ago. I want to talk about some of the background of the bill, but first, let's just get to the meat and potatoes of what it is and what it does.

Oh, and one other note before I toss it to you, I just want to put on record here that this bill was sponsored by Senator Jessica Bateman, who may be familiar to Volts' listeners who knew her two years ago as Representative Jessica Bateman. I talked to her two years ago just after she had been instrumental in passing a bunch of incredible housing reform through the House. Now, two years later, she's in the Senate and she's passing kick-ass parking reform. We stan Senator Jessica Bateman here on this pod.

Alan Durning

Absolutely.

David Roberts

All right, Catie, go for it. What does this bill do?

Catie Gould

The bill does a lot of things, but the basic summary is it removes parking minimums as a binding constraint of construction in most circumstances in Washington State. So anyways, I'm going to go through a list of the specifics, but generally, that's going to be the future of Washington.

David Roberts

Right. And the core of it is certain building types are exempted whole cloth. There's like a set of those. What are those?

Catie Gould

So, that includes, this is going to sound really basic. Existing buildings that are changing from one use to another use. Maybe a hotel turning into apartments or an office turning into a restaurant. Whatever amount of parking you already have is fine. It's very hard for existing buildings to add more parking. This is a big barrier that keeps buildings vacant or kind of stuck in a use anyway. So, that's the first on the list. Others are small residences. So, any housing that's smaller than 1,200 square feet, this is the vast majority of apartments that are getting built today.

David Roberts

So, any apartment under 1,200ft, there's no —

Catie Gould

Sure, or an ADU or a house, any type of residence.

David Roberts

Right.

Catie Gould

Commercial spaces under 3,000 square feet, affordable housing, senior housing, childcare facilities, any ground floor use on a mixed-use building. Think of something with a store on the bottom and apartments on top. That bottom floor is not required to have any parking.

David Roberts

Ooh, that's a good one.

Catie Gould

Yeah, mixed-use buildings where there are multiple types of uses are particularly challenging for parking mandates now, because additional uses, they get added up together. So, if you have three different things going on in one building, you have an apartment, a store, an office, those peak times are going to happen during different times of the day. But city code usually assumes that nobody is sharing the parking lot, or they might give you a little 10% reduction or something. So anyways, we know this is going to be a really impactful reform. So, those are the list of spaces that no longer are required to have any parking.

And for situations outside of that, cities and counties are limited to requiring only a maximum of one parking space for a single-family detached house, a half a parking space per home for multifamily housing, and two parking spaces for every thousand square feet of commercial space.

David Roberts

Okay, so for those of us who are not sort of like parking mandate literate, what is the significance of these caps? Are these caps low? What's this going to translate to?

Catie Gould

They are low. So, we did a huge survey of zoning codes in Washington. We probably spent a year working on it, off and on, to put it together. So, for reference, the average in Washington state of how much parking is required for just a typical office is three parking spaces per thousand square feet. That is a general rule of thumb. Three parking spaces per thousand square feet means that the parking lot is required to be equal to the size of the building. Because parking takes up a lot of room. So, if you're kind of doing this math, right, if you want to build an office, the city is requiring half of that property to be a parking lot.

This is the low end today. It goes up from there. The average is for a retail store, four parking spaces. For restaurants, the most common requirement is 10 parking spaces per thousand square feet, which means the diner is taking up a really small percentage of the property, and most of it is required to be a parking lot.

David Roberts

So, if you wonder why you drive around the state and you see all these little, like a Denny's, plopped in the middle of a giant sea of concrete, that's why. They have to.

Catie Gould

Yes, there are many factors that go into anyone deciding how much parking they want to build, including what the banks and the lenders are expecting or what comparable buildings are like. How are they doing? But this is kind of the first step of what can you legally do? What can you legally build?

David Roberts

Right. Okay. So, you have a set of building types that are exempt completely, and then you have these caps for everything else. You are not allowed to require more than one space per detached house, two spaces per thousand square feet of commercial, and half a space per home for multifamily.

Catie Gould

Correct.

Alan Durning

And this is a good moment to interject, which does not limit any property owner in the state of Washington to install exactly as much or as little parking as they would like. It just says, "What can cities require of them?"

David Roberts

Can't repeat that enough. None of this specifies what developers have to do. It just says the city cannot require them to do more than this.

Catie Gould

That's right. So, this bill just gives builders more flexibility, more choices, more options.

David Roberts

Right, right. So, the bill excludes cities with populations under 30,000. That just looks to me like a classic bit of, like, horse trading there. There's no substantive — I mean, all the reasons parking regulations are bad still apply when you're in a small town. What is the sort of politics of that? How did that come about? Like, is 30,000 — did someone just make up that number?

Catie Gould

Well, it's a great story, actually. So, just from the policy perspective, there is no justification for parking mandates anywhere, right? I would like to be absolutely clear. They do not make sense in rural places. They do not make sense far away from transit. These numbers are made up everywhere. They cause problems everywhere, right? One of the little stories that I found over the last year was this mini mart in Mattawa, right, which is way out in eastern Washington, a very small little town. Someone wanted to build a mini mart and they just wanted to build 33 parking spaces, but the zoning code required 10 parking spaces per thousand square feet, so they would have to build 100, right?

And they applied for a variance and got denied. Now, the Port of Mattawa is sending a letter to the mayor, saying, "This number's too high. We would love to have this business in our community."

David Roberts

And who wants a mini-mart if it's surrounded by 100 parking spaces? Like, in a small town? That's not a small amount of the total land. You know what I mean? And we've all been to these small towns in Washington and elsewhere where there's just like 12 people here. "Why is there so much parking?" I always think that when I go to those places. Anyway. Go on.

Catie Gould

Yeah, nobody loves a huge empty parking lot either, right? They're kind of universally hated, but this is like one of the ways that they come into being. So, the main opposition to any parking reform bill comes from city councils, mainly in different types of communities of different sizes, for sure. But many people say, and this is true, "People in my community drive. They're dependent on our cars, our built environment. You have to drive to get around." This is kind of the argument against parking reform. And there's a fear, "What if there's not enough parking?"

You know, people drive, therefore they need parking. This is a true statement, right? Cars have to be stored somewhere.

David Roberts

And if you're just a normal, everyday driver, like, that's your experience of things. Like, you don't experience excess parking, you know, on a sort of macro level from your little micro level, driving around. Parking is almost always something you want.

Catie Gould

Yeah, so the bill started out when it was introduced. It applied to every community in Washington. That was the correct place to start. It got narrowed down to just cities, over 20,000 people in the Senate and then in the House to 30,000. And that amendment specifically came from Representative Stuebe, who is the mayor of Washougal.

David Roberts

Which, let me guess, has between 20 and 30,000 people?

Catie Gould

It has 17,000. But they're also one of the few cities that have recently increased their parking minimums. A couple of years ago, they increased their parking minimums downtown. I hate to say it, but this is what happened in response to a presentation about an affordable housing project.

David Roberts

Ah, that's perfect, of course, beautiful. Let's get parking in. Keep the affordable housing away. Ah, love it. I'm guessing the rhetoric around that was like, "Out here in, you know, the sticks, we don't want you city folks telling us what to do with our land." This type of, I mean, was that the shtick?

Catie Gould

Yeah, "The people here drive. We don't have good transit. People are going to keep driving." Yeah. So that's all true. This is the kind of the biggest narrative fight that we're constantly arguing is that, you know, actually nobody has to stop driving for this reform to make sense. What we're talking about most often is situations where, you know, there's room for a 19 car parking lot but 24 are required by code. That's the problem that is most common. We're not talking about a ton of new buildings having no parking at all. And that all of a sudden, Washougal is going to become this like car-free community.

David Roberts

I know you have to imagine — to be scared of this — you have to imagine a developer coming in, building a big new building, purposefully not building enough parking, and then several more developers doing that too over the course of years. Such that what, like in 10, 20 years it's hard to find a parking space? Like literally, what is the fear? I can't even sort of construct a worst-case scenario that they're imagining here. Developers don't want to put in too little parking. You know what I mean? It's weird to imagine that they would do that systematically.

Alan Durning

There is a good faith argument for parking requirements, which we think is mistaken, but at least it's somewhat rational. And then there's bad faith arguments. The Washougal example is a bad faith argument where an off-street parking requirement is being used to exclude certain types of land use.

And so, it's a pretext. It's not the actual reason. The actual reason is that Washougal doesn't want affordable housing, and it is entirely within the state's purview to intervene and say, "No, every community needs to take affordable housing," which is why affordable housing is now exempted from off-street parking requirements statewide in Washington. But the rationale that's often given, and that most cities gave in their testimony on this — or the cities that opposed, we had the support of a number of cities — but is the idea that developers will shirk on their responsibility and that there'll be visitors to their buildings who will end up parking on the street in the neighborhood, and that the people who already live there will dislike that.

Those people may put pressure on their local elected officials. Nobody gets elected to a city council or mayor because they want to work on neighborhood parking conflicts.

David Roberts

Even the phrase itself sends a shiver down the spine, doesn't it?

Alan Durning

You do not want to get yelled at by neighbors. And so, off-street parking requirements evolved, we think, as best we can tell. This has not actually been carefully studied by historians, but we think that they developed as a defense against neighbors getting mad about what's called "spillover parking."

David Roberts

Yeah, this is something you hear on Nextdoor a lot. It's just like, "If this happens, these people are going to come park where I'm accustomed to parking in front of my house."

Alan Durning

So, if the council says to the planners, "Bring me a policy that will prevent me from ever getting yelled at by neighbors about some stranger parking in front of their house..." And the planners also don't study parking policy in school. They're not trained in parking policy. They're like, you know, trained in, like, how to design nice things and where to put the streets and where to put the parks and so on. And so they look around for some solution. And in one study, it showed that 45% of them were just copying and pasting the regulations from some other nearby community.

We continue to see that happen. So, His Highness, Donald Shoup, the great theorist of parking policy, described this process as "nonsense on stilts." It's pseudoscience.

David Roberts

If you study policy long enough, you find lots of things like this, like, "Why do we do things this way?" And it really turns out to be there's no reason other than, like, the last person did it that way and the person before that did it that way. And you can trace that line back for decades, sometimes, decades since anyone sat down and said, "But why?"

Alan Durning

And it's completely true. In this circumstance, it solves a political problem for local elected officials that they don't have to hear anymore. But it imposes enormous costs because it ends up with putting — Catie was saying that, to steal your line — this is like trying to hang a picture with a sledgehammer. Like maybe you'll get the picture hung up, but you're going to put giant holes in the walls and you're putting giant holes in our communities by requiring so much off-street parking that no visitor ever might park on the street. There is a legitimate on-street parking management issue and cities need to figure out how to manage that.

But they can do that at a much lower cost than the current policy.

Catie Gould

Parking mandates are the worst tool for the job. There are so many examples that I've seen where, you know, the street parking is full. It's becoming an issue. Meanwhile, the off-street parking, like there are thousands of parking spots off the street, and they're half full. But they're not being managed in a great way because they're all owned by different entities.

David Roberts

Well, I believe King Shoup was a fan of pricing as a way of managing scarcity, which I believe, you know, it's really a favorite way of managing scarcity going back centuries now. But good lord, I imagine if you go to a small town and propose charging them for what used to be free parking, you would get run out on rails. Catie, talk a little bit about the significance of this. Also covering commercial uses because as I understand it, that's unique to Washington that we got that in. Is that true?

Catie Gould

Yes, I believe it is true. I mean, there's a lot of focus, rightly so, on housing right now. But the commercial does help the housing as well. And I'll give you an example. In Olympia, there's the Capitol Mall. I don't know if you've ever been there. It has a huge parking lot that is mostly empty most of the time. And officials from the city and planners, they would love to grow that whole area into, you know, a denser, walkable, mixed-use area where there's housing and different types of businesses and to really focus some growth there.

Currently, they cannot. You cannot take away a single parking spot from that mall because it is under parked. Right. If that mall was built today, it would need over 200 more parking spaces just to meet the zoning code today.

David Roberts

So even if you updated the building, you would trigger those new mandates.

Catie Gould

Yes, you cannot do anything to the building right now because the category that it's under in the commercial code requires 4.5 parking spaces per thousand square feet. That's the current requirement for that mall. And that is stopping any development from happening in that area. Right. So now, they have space to play with because of this bill.

David Roberts

Yeah, it's madness that we did this to ourselves. I wonder what is the opposition from the commercial sector relative to opposition from homeowners? Like, do business owners also get upset about this or were they easier? Was it easier to sort of roll them into this? What's their political sort of disposition?

Catie Gould

Every business owner is a person, so I'll start there.

David Roberts

So you say.

Catie Gould

And everyone has had experiences of where it's hard to park. And I would say the business community is not a monolith; they all want lower parking mandates. I think sometimes businesses have a lot of fears that if it's harder to park to get to my store, that's bad for me. And all the decisions that are happening outside of me kind of impact that, you know, and what we talked about were some very specific, really sympathetic cases. One of the stories that was just really emotionally resonant was about this daycare that couldn't open in Ridgefield. Dana Christiansen, she runs another daycare.

She is on the board of the Washington Childcare Centers Association, and she found this large property that seemed suitable. She made an offer and purchased this property. She and her architect were working through the layout of the site kind of in this 60-day period. They could only find room for 29 parking spaces, which, for the record, was way more than she thought she needed. She thought, you know, a dozen, 18 spaces would be totally adequate for her. But that land is regulated by Clark County, and they require two parking spaces per employee for daycare centers.

So, she needed 32 parking spaces.

David Roberts

Per employee? Every one of these sounds more random than the last.

Catie Gould

I mean, we can go all day. So, they were trying to — we're three spaces short. They're trying to figure this out. And then the city calls and says, "Don't forget about the landscaping islands that are required to be in the parking lot. To like, ameliorate the impacts of large parking lots with the stormwater runoff."

Anyways, they walked away from the site. This area is in a daycare desert, where there's a real lack of childcare spots compared to the number of children. Most Washington families live in childcare deserts. So, I think, no matter where you think about parking mandates, this is a great story that I love to start with because I think most people could agree it's ridiculous to not be able to open a daycare over three parking spaces. That's what these rules do.

David Roberts

I know people love stories; the public loves stories. But I'm a nerd, and I love studies. So, talk about that study that the Colorado government did, because I thought that was very striking. Like, I think people can sort of accept on an intellectual level, yeah, if you need more parking, you're going to get less other stuff, but it's not a small effect.

Alan Durning

Yeah, it's dark matter.

Catie Gould

So, there was some analysis in Colorado that got published this fall that really helped push the salience of the bill this year where they modeled — not no parking buildings. Right. Just for the record, we're not talking about any buildings having no parking. All buildings had some parking, but they modeled for new buildings that are going to be near transit. They're building a half a spot per unit, and then everything elsewhere is building one parking space per unit. So, we're making assumptions about lots of car ownership here. And they found that those numbers compared to the current zoning codes in those Colorado cities, it meant an overall increase, 40% more homes would become financially feasible to build.

And the main mechanism for that is, think about a multifamily building that's already planned. Right, that's going to happen maybe no matter what. But they can only build, you know, 20 apartments. They're limited by the parking. And once that barrier goes away, now they can add an additional floor to the building with the same amount of parking. So that's how those numbers happen.

David Roberts

Yeah, that's the biggest effect. It's adding more units to existing buildings in a way that you couldn't if you had to add a bunch more parking.

Catie Gould

Correct.

Alan Durning

That's exactly right. And that's why there's such a huge effect on housing costs. On the one hand, housing parking is expensive to build, but even more importantly, physically, you just can't put an apartment and a parking space in the same location on a lot. You have to choose one or the other, and it ends up being a huge constraint, reducing the number of units that can be built, the number of dwellings, maybe as much as a third in some cases. So, this is why the issue of parking in Washington's legislative debate ended up being part of the multi-year effort to address Washington's housing shortage.

I think we'll maybe come around to this more. But the reason that I think we were able to win this was that it wasn't a debate about transit and transportation and people's cars. It was about where are we going to live, where are our children and grandchildren going to live? And that trumps people's love for parking.

David Roberts

You wrote that this parking reform was unthinkable even two years ago. Like, it actually, there was a failed attempt, I think, prior to this. So, things changed pretty dramatically in two years. And you wrote a really great article about why — you have seven, I counted them, seven reasons why this was able to happen this time and not last time. So, maybe let's just go through a few of those because I think they're really educational. Because a lot of this I want to orient toward like other people in other places who want to get into parking reform.

You know, what helps, what's good. So, let's talk about a few of those reasons that enabled this sort of a really transformation.

Catie Gould

Yeah. Hold on, let me pull up my own article.

David Roberts

Well, starting with, I'll cue you for the first one, which I thought was interesting. The previous attempt had gone after parking mandates via their proximity to transit.

Catie Gould

Yes.

David Roberts

It had attempted to say, if you are X distance from transit, you have lower mandates. That ended up kind of falling apart. A lot of arguments about what counts as transit, what counts as proximity, what counts as this or that. And so, there is a different focus for this bill. Talk about that a little bit.

Catie Gould

Yeah. So, that initial bill two years ago, and this is kind of where I enter the Washington story. I'd been doing work in other jurisdictions on parking reform, including Oregon and Anchorage. This was a copycat essentially of California's successful AB 2097 that did eliminate parking mandates near transit. That happened maybe in the fall of 2022. And Washington legislators said, "That sounds like a great idea. Let's do that here." And yeah, it really fell flat. There was, I think, a lot of opposition. "People still drive," you know, like "More people aren't going to use transit. There's maybe one qualifying bus line in my community, but the transit's enough to get around."

David Roberts

Yeah, this is what people hear that and they're like, "Well, I'm close to transit, but I can't live without a car." You know what I mean?

Catie Gould

And they cannot imagine giving up their car. And when the conversation is over there in that space, there's just no possible way to win it. Like, you get stuck, you know, in this just like, pit of, like this is not even the right issue to be talking about. And transit kind of pushes the conversation that way. It's also very vulnerable to being watered down. I think to get a vote out of one committee, they shrunk the radius by half. And that cuts your reform area by 75%. Right. So these small tweaks in the numbers, all of a sudden, all these properties that were going to see benefits from reform now aren't.

David Roberts

And it seems like you're going to get — I mean, I don't know if this is going to happen in California or not — but you're going to get weird things where, like, builders are sort of like targeting areas based on their distance to transit. You know what I mean?

Catie Gould

Yes, I mean, people want to — it's a good idea to maximize the number of homes and businesses and services near transit. Of course, that's a good idea. These are areas where people want to build anyway. So there's nothing wrong with eliminating parking mandates near transit. But the issue is so much bigger than that. So what we did kind of after we lost that fight was really to focus on stories about how parking mandates cause issues everywhere in all these small communities, places that aren't well served by transit. So people can think about the issue more broadly.

And the bill was designed to go after these, you know, kind of sympathetic uses, but I would say high impact uses. One of the findings that came out of Oregon, they had some administrative rules that went into effect a few years ago where parking mandates were eliminated near transit, but also this whole host of other kind of equity uses, which, if you notice, is going to look very similar to what we passed in Washington. And in the case studies, when I was talking to builders about "I'm trying to find examples of, like, how are people using the parking reform? Let's see examples of projects that wouldn't have been possible before."

A lot of those projects, yes, they would have qualified in their transit proximity — Oregon also had a very generous transit proximity — but they also would have qualified for being a small residence, for affordable housing. For some of these other uses as well.

David Roberts

So, you want to get the public thinking, "Should we really require X amount of spots for a daycare?" It's just a better context to be contemplating these things than this transit distance.

Catie Gould

It is.

David Roberts

And so, that won a lot of people over because, you know, it's a lot harder to argue, you know, like, "This small town is better off without this daycare because God forbid they had, you know..."

They don't have enough bus service for a daycare.

Catie Gould

Some backup in the morning, pickup line. We don't want that. All right. Focusing on building types and sort of specific situations, contexts rather than transit distance was a real key. You also mentioned pulling together real stories. You mentioned this woman with the daycare. Like, that's gold. People whose lives are concretely affected by these things. By the way, how do you find those people?

David Roberts

Do you just, like, put out a bat-signal? People who know someone who knows someone. Like, how do you come up with those?

Catie Gould

I think I found her specifically. I was going through a different bill in the legislature a few years ago that was about daycare-related zoning. And she kind of told this story in her testimony. So then I reached out to her. But, you know, sometimes people come to me to say, "Oh, this thing happened to me. Can you help? Do you know how to help me with this situation?" That happens sometimes. People give me tips for stories all the time. But also, and I'll just say this to, like, any regular listener, if you just look into the notes of what's happening at the planning commission, these cases happen all the time.

And I love working with city planning staff because they know all the projects that are not getting built in their community. This stuff is universal.

Alan Durning

That's right.

David Roberts

The third thing which I'm also really interested in is, you come at this with a broad coalition, which, you know, on one level, like, "Duh." Obviously, a broad coalition is better than a narrow one. But on the other hand, it's a little mystifying because, as I said up top, like, this is not something that spontaneously moves — most voters don't think about it at all. And if they think about it at all, they like parking. Who's in this coalition and how are you pulling them together?

Alan Durning

Maybe I could jump in and help with this one. John F. Kennedy said, "Success has many fathers, but failure is an orphan." And we've been an orphan on this issue for a lot of years. We've been howling in the wilderness about parking reforms. Three years ago, we couldn't find anyone to sponsor a bill. This year we had Jessica Bateman, who is the ace of the legislature, and her leadership was incredibly important. But Catie and the rest of Sightline's team were able to assemble an amazing coalition in support of this reform. And it's partly, you have to understand this in the context of seven years of Sightline working on abundant housing legislation in the Washington legislature and in neighboring jurisdictions as well, where we've been having one conversation after another with legislators and with other interest groups, with the AARP and the Habitat for Humanity and the realtors and the builders and the trade unions and everyone else gradually building up understanding of the importance of zoning regulations and parking regulations as well.

Catie was able to pass a bill last year that was kind of a starter bill. It was rather modest in scope, but it, for the first time, got the legislature to begin intervening in parking regulations statewide. Then, building on that, this year, she and the rest of our team were able to assemble what, 56 different Washington organizations and cities spanning the political spectrum, from the Building Industry Association of Washington, which is usually a very conservative Republican-aligned organization, or the realtors or the master builders, all the way over to the social justice and climate justice organizations on the left. Everyone was in lockstep on this, along with lots and lots of individual elected officials from localities, all lined up against basically just the Association of Washington Cities whose job it is to defend the prerogatives of cities.

It's their job to protect local control. So, it's no surprise that they would be standing up. But, we did not find huge opposition from other organizations. The homeowners did not mobilize against us.

David Roberts

Interesting.

Alan Durning

AAA didn't mobilize against us. This was largely a process of building enough comfort among the legislators by surrounding them with supportive messages. We built a — Catie and her team put together a huge parade, and then we invited Jessica Bateman and other legislators to walk in front of it. And we ended up winning with bipartisan support. A majority of Republicans and a majority of Democrats in the state Senate.

David Roberts

Wild.

Catie Gould

And I'm going to fact-check you on that, Alan. I don't know, I don't think it was a majority of Republicans.

Alan Durning

In the State Senate, it was, Catie. I looked it up on your fact sheets. In the State House, we did not have a majority of Republicans, but we had a substantial number of Republicans in the Senate.

Catie Gould

Great.

David Roberts

Yeah, and this is — how to ask this question? Like, there are some issues where you win, where most of the people in your coalition are in your coalition for sort of contingent or unrelated reasons. But is this more of an issue where persuasion worked? Like, all these people are on the right side of this because they heard the arguments and they were convinced?

Catie Gould

Yeah, a lot of these organizations have direct experiences with these regulations. And I think, at least on my end, talking to these organizations over the years, as I'm doing reporting on this issue, is that lots of people would love to see reform. They just don't think it's politically possible and therefore they're not going to make it their top issue for the next session. And we say, "Okay, well, we're going to make it our top issue and you can come along with us." And I think when Bateman decided to sponsor the bill that year, it really changed the dynamics and all these organizations are going to invest more of their time into making this pass.

David Roberts

Well, this is a classic case of pluralistic ignorance, which I'm sure you guys are familiar with, which is like, everybody's sort of on the right page on this, but they don't know that other people are. So in those situations, like an organization like yours coming in and saying, "Hey, look, you all already agree."

Alan Durning

That's right. Lots and lots of individual conversations. And remember, this is part of an effort where there's a lot of other housing-related bills. Sightline worked on seven and there were a few others as well. And so the strength of relationship and trust that had been building over these years carried over into parking. When we and others said, "You know, the next thing on the agenda is parking. We're going to go big on parking this year." And folks who we'd worked with for years on things like legalizing accessory dwelling units or legalizing duplexes, were like, "Oh, okay, well, you guys keep nattering on about parking. We'll listen a little more closely this year." And this year, everyone was ready to go.

David Roberts

And, Catie, you also mentioned local progress. So, there are towns and cities in Washington who have removed parking mandates. And so, we're not guessing or speculating about what happens when you do this. So, share a little bit about what happens, because it's like, it's one of those things where when I read it, I was like, "Oh, well, obviously." But I wouldn't have guessed beforehand, but basically, what happens is very little. Like, people continue to build parking.

Catie Gould

Like, yeah, the sky doesn't fall.

David Roberts

Everything's fine. Yeah.

Catie Gould

This was certainly really helpful, I think, in making legislators more comfortable. Back in 2023, no city in Washington had fully repealed their parking minimums. And this year, coming into the session, three had. Right. Of all different sizes. Port Townsend, Bellingham, and Spokane.

David Roberts

Ooh, go Bellingham! All right. My kids go to school in Bellingham, so I love a Bellingham story.

Catie Gould

And we had public officials from all three of those cities in support of the bill, so that was really helpful. Some things that have happened, let's see: In Bellingham, their reform is really, really recent. They just adopted it in January, but their planning director testified at the hearings, and they're already having some buildings — what's happening is there are buildings that are already somewhere in the permit process, and now the builders are going back and adding more housing units because they have that flexibility. So they have one building that went from 60 to 80 homes, another from 12 to 40.

So, those are just some examples, right? Of, like, more housing is happening because of these reforms. Spokane, which is a much bigger city, said that it's only in really rare circumstances where a property is really oddly shaped or there's some really constraining circumstances, is no parking getting built at all. The vast majority, they're still building parking.

David Roberts

Yes, like, developers will build enough parking to service the buildings they're building. Like, why wouldn't they? So, like, the sky doesn't fall, and generally, the amount of parking doesn't change dramatically. It's mostly just these sort of edge cases, like a few more units here, squeeze in a daycare here that you couldn't before. It's mostly these sort of marginal cases that are on the verge that are helped.

Alan Durning

Well, Catie might mention that we actually have some numbers on the reductions in parking from Seattle and Buffalo.

David Roberts

Buffalo, New York, they did reform?

Catie Gould

Yes. So, these are two studies that came out, academic studies that measured — there was more flexibility given in parking, Buffalo, no mandates, Seattle, no mandates in some areas — and how much of an impact that had on housing. And surprise, the vast majority of new buildings still built parking. 70% of new multifamily buildings in Seattle still built parking. 83% of new multifamily buildings in Buffalo still built parking.

Alan Durning

And how much did they reduce the parking that they provided?

Catie Gould

So in Seattle, out of what ended up being built, they ended up with, when there's no parking required, those new buildings had on average, a half a parking space per home ratio.

David Roberts

So, they end up roughly where the cap is in the new bill.

Alan Durning

That's right.

David Roberts

In the neighborhood. So, this again, it's not going to require dramatic change on any particular person's part.

Alan Durning

A modest reduction. What we see in apartment buildings across the Northwest where this has been studied is in the middle of the night, between midnight and 3 a.m., if you go look in their parking lots or parking garages — and people do this, planning students are sent out in the middle of the night — they're finding like, you know, 30 to 40% of the slots are empty because the parking requirements when those buildings were built were excessive. All the parking requirements are just a little bit too high. Everyone errs on the side of it. It's a little bit like in the electricity sector, where you're planning for the peak.

David Roberts

Yes, exactly.

Alan Durning

And so, every parking lot is built for the peak maximum occupancy on Christmas Eve or something. When everyone's going to be at home or for commercial parking at retail establishments, they go out and measure how many people are parking there the Saturday, a week before Christmas, and then they make that the law for the entire state all the time.

David Roberts

That's so dumb. Catie, you mentioned guardrails, including some guardrails in the bill to make people feel more comfortable. Like what?

Catie Gould

Yeah, multiple exceptions got added to this bill.

David Roberts

Oh, yeah, yeah. These little side deals. None of those are — I mean, you can tell me, but just from my glance at those, like they're a little, you know, maybe not totally savory, but they don't seem like they hurt the bill particularly.

Catie Gould

Yeah, there was a concern about what about these really rural county roads where there's no parking on the shoulders. It seems like there should be some off-street parking. We still should require parking there. So, one of the exceptions is that for properties along county roads that do not meet the current local standards, roadway standards, the parking minimums still apply. And I'm going to add a "but" here. But if you're — and this isn't even that rural, there are places in Clark County that are building multifamily apartment buildings that are technically unincorporated Clark County.

It is true that, like going in — I talked to a planner, we looked at some aerial shots — this road didn't have any sidewalks, didn't have any street parking. Often in the development process, builders are required to do what we call frontage improvements, where you have to build a sidewalk, you have to maybe widen the street along your property to get it up to code. And in that case, it seems like they would get the benefits from this parking reform. So, it's hard to say how often this kind of scenario is going to play out in real life.

David Roberts

Yeah, but it made somebody feel better and presumably got a vote.

Catie Gould

It gave reassurances, and the county's lobbyists stopped testifying against the bill.

David Roberts

So, yeah, there's a real art to concessions that do not hurt the main mechanism of the bill. I always love to follow the sausage-making. You said it accommodates disabled drivers quickly. What does that mean?

Catie Gould

Just before we move on, there are two other study options that cities or counties can make a case to commerce that parking mandates, getting rid of them, would pose a safety issue or that their regulations are already close enough to the bill that they don't need to do anything else. So, we'll see how many of those actually get sent in.

David Roberts

Safety? I don't even... I'm trying to construct a scenario where more parking saves a life or whatever. I'm not sure.

Catie Gould

I'm happy to see them make the case.

David Roberts

Yeah. All right, so what do you mean by accommodating disabled drivers?

Catie Gould

One of the provisions of the bill — and this idea came from Disability Rights Washington in a meeting that we had — was that we're directing the Building Code Council to look at the state building code, the kind of ratio of parking spaces that need to be made accessible. Right now, these ratios follow the federal ADA, which was last updated 20 years ago. We have a growing senior population. Right, Adam? And like many people who need those spaces, they feel like the supply is already inadequate. And they have, I think, a very real concern that if the number of parking spaces goes down, these spaces will reduce.

So, we just asked for a study to look at these ratios and maybe update them to go above and beyond the ADA.

David Roberts

Got it. And then the final item on your list is to have good legislative champions, you know, which is obvious, but really crucial. And so, it's good that Senator Bateman was there and is on the right page. And, you know, I just love to see competence these days in our current circumstances. I'm developing a real competence fetish. So, with our time left, let's talk a little bit about beyond Washington here. Who else has done this, is doing this, will do it next? Are there exciting stories outside of Washington?

Catie Gould

Absolutely. Montana passed a very similar bill. It looks a lot like Washington's, just days after we passed ours.

David Roberts

So really substantively similar?

Catie Gould

Yes, I'm friends with the parking advocates in Montana. So, it is a small community of reformers across the country that get online for regular chats about different flavors of bills and different messaging that's working in different places.

David Roberts

Montana is just such a fascinating story, though. I mean, it's housing absolute housing champions here in a red state. I'm going to get some Montana people on the pod soon. Talk about how they did that, how they're talking about it.

Alan Durning

It's a perfect example where Sightline was able to support a Republican-led coalition in Montana and a Democrat-led coalition in Washington to pass basically the same legislation.

David Roberts

Really interesting.

Catie Gould

Yeah, there's also, I'm keeping my eye on this year, there are two states that have full repeal bills in the legislature right now. That's North Carolina. They're very focused on water quality. The Riverkeepers organization is the main driver behind that bill.

David Roberts

Is this like impermeable surfaces and runoff type of thing?

Catie Gould

Yes, runoff. They're also like, most of the argument has been about banning this certain type of pavement sealant, which is also part of the bill. And then also, Connecticut is running a full repeal bill.

David Roberts

Interesting. Is there something we can say to generalize about what states are doing this, or is this just like somebody in those states got a wild hair and did it? You know what I mean? Like, what makes a state a good candidate?

Catie Gould

I think it's the right combination of people getting together to make this possible. These rules are arbitrary everywhere. They're causing problems everywhere. You just need the right collection of people with the right messengers to kind of make this politically possible.

Alan Durning

I think that Washington's win is going to give courage to others in other places. The YIMBY movement, the pro-housing movement, is having increasing success in more and more states, red and blue. And I think that the win in Washington will give them courage to take on housing, which some have regarded as sort of a third rail — that is, you touch it and you die. But we should also mention that there have already been wins in Oregon where we were very involved in getting a rulemaking from the Department of Land Conservation and Development that is resulting in, now I think, 40% of the population of the state is in cities that have no off-street parking requirements.

And more and more cities are coming into conformity with the new state rule. And by the end of the next few years, we'll probably be in a situation in Oregon much like the situation in Washington. California eliminated off-street parking requirements close to transit. And British Columbia, not America, but part of the Cascadia region, so we have to mention it, has similarly eliminated off-street parking requirements close to transit on the California model. Anchorage, Alaska did the same thing thanks to Catie's leadership. And there are a lot of cities that have done this, not just states. Catie can maybe tell us what the current tally is?

Catie Gould

It's constantly changing.

Alan Durning

Constantly changing, yes, but in the scores of American cities that have eliminated their off-street parking requirements, giving flexibility back to property owners.

David Roberts

And not a single traffic apocalypse to point to out of all those examples.

Alan Durning

Absolutely not.

Catie Gould

I mean, the average person will have no idea that this reform passed.

David Roberts

I know it's one of those reforms that's a little frustrating in the sense that, once you've succeeded, no one will remember these things and they will not even believe that they existed. In like 10 years, you try to convince someone that this used to be the case, they'll be like, "What, no?"

Alan Durning

But hopefully, the result is more abundant and therefore affordable housing, nicer neighborhoods, main streets, old-fashioned main street neighborhoods, redeveloping where you can go for a nice walk.

David Roberts

Let's pause there because, you know, as I mentioned in the intro, nobody wants to hear about density. Yeah, I'm constantly getting people yelling at me for using the term density. Like, average people do not care about density. If they care about it at all, they sort of don't want it. So, how do you talk about the pleasant experience of density that is enabled by these reforms without saying the word density? You invoke old-fashioned main streets. I think that's quite clever because that really is, for most people, for most Americans especially, their only personal experience of walkable density is that one block in the center of their town that hasn't been ruined yet because it came in before the —

Alan Durning

Before the parking rules, yeah, mostly the pre-war parts of our cities.

David Roberts

And you couldn't make that street in most places today because of parking mandates. So, I think personally, that's a very clever rhetorical bit.

Alan Durning

Sightline, as you mentioned, we published lessons from this parking win for advocates elsewhere in the country who want to learn about them. And we will soon be publishing an article about the messaging lessons that we've learned from this fight and from some opinion research we've done as well.

David Roberts

Could you give us just a couple of top lines preview? Are there big obvious lessons? Don't say "density," I'm guessing it's one.

Alan Durning

The ways that Catie and I have been talking during this podcast, I hope, embody or else we're going to get a tongue-lashing from our communications boss after it airs. But generally, we anchor in housing costs. When we're talking about homes and small businesses, we're winning. When we're talking about cars, we're losing.

David Roberts

Yeah, more of what you want, right?

Alan Durning

You're right. When people are in a car, they're worried about parking. But people are complicated beings, and they can want multiple things. They know there are trade-offs in life. They know they would like more ice cream, but they may not want the consequences, and the same thing they like to be in, as you said, you latched onto the idea of talking about main streets, walkable neighborhoods where you can wander down the street and window shop and walk your dog and not be worried about cars coming in and out of parking lots. Focus on the wastefulness of these expanses of asphalt is a good place to go in conversations. So, those are some of the things.

Catie Gould

And my number one tip is just to focus on the real-life stories of these regulations. I'd like to tell just one more kind of non-scary one.

David Roberts

This will be our finale here. Take us out with an anecdote.

Catie Gould

In the city of Mount Vernon, there is this woman, Mary Jean Rack. She moved there to take care of her aging mother and she is a schoolteacher. She purchased a property with the intention of building a home. She wants just a small, thousand square foot, single level, you know, no stairs, a place where she can also age in place. The city of Mount Vernon requires four parking spaces.

David Roberts

For a thousand square foot single home? Holy crap!

Catie Gould

It doesn't matter the size, just for any detached home. The most common requirement is two parking spaces for a single-family home. But there it is, four.

David Roberts

Four. So, every home in that town has four parking spaces?

Catie Gould

No, that is not correct. Because most homes were built before these rules went into place. So, she did a little survey, in the two blocks around her property, about how many parking spaces houses actually have. And at the time, because this was a couple of years ago, two of those spaces were required to be in a garage and two in a driveway. And she said only 1% of the houses in her little neighborhood had a two-car garage. So, that's how many houses would have actually complied with this code. Most of them just have a one-car garage.

But over a third of the houses in our neighborhood had no off-street parking at all.

David Roberts

I mean, that's just a very stark "don't build new housing" rule. You know what I mean? Like, it could not be more, I don't know if that was the intent when they passed it, but it could not be more clear.

Catie Gould

We're trying to constantly say these rules are above and beyond what is common in our existing neighborhoods, and we just want to lower the bar so that she can build a house. We're just really lowering the barriers to make buildings possible to build. And I think everyone can kind of relate to stories like that, you know, "Don't you know how much parking you need for your own home better than the government?" Yes, I think most people would agree with that statement. And the same thing for building, you know, a little backyard cottage.

"Like, it should be really your choice, and now it is your choice about if you want to build additional parking or not."

David Roberts

Did you go after Republicans with the property rights and "Why should the government be telling you what to do with your own land?" kind of arguments? I'm guessing those are potent on that side.

Alan Durning

We didn't go after the Republicans at all. They were our partners in this effort and they talked about property rights, individual liberty and freedom, and supporting the development of businesses and people making good choices for themselves. Absolutely. The last lesson for our parking allies elsewhere is exactly what Catie just demonstrated. Just tell stories. Once we started doing it and inviting these people to testify, legislators themselves started telling stories from their own communities about properties that they knew about that couldn't be converted from a furniture store to a cafe because of the rules or what have you.

Everybody knew a story about these regulations, and that was uniting and ultimately helped us win.

Catie Gould

Yeah, and it's helpful because there are all these future fears about what might happen, and there's — I can have all the data in the world and none of it is going to be really reassuring. So we're just constantly going back to, like, what's happening today because of these regulations.

David Roberts

Yeah, we can see now that they're safe, which is a huge step forward. It's good. I do think this Washington win is going to uncork a lot of momentum. Well, thank you both for walking us through it and for all your work on this bill. Really cool stuff.

Catie Gould

Thank you.

Alan Durning

Thank you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

This week, I chat with Dawn Weisz of MCE Clean Energy about the nitty-gritty of community choice aggregation, where local governments take control of their electricity procurement. We get into issues like navigating utility obstruction, the complexities of rising grid costs they don't control, and their push for smarter, more autonomous regulation.

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Text transcript:

David Roberts

Hello and greetings, everyone. This is Volts for May 23, 2025, "The past and future of community choice aggregation." I'm your host, David Roberts. Some communities do not like the way their utility purchases and manages energy. In 10 states, they can do something about it.

"Community choice aggregation" goes by various names in different places — "community choice energy," "municipal aggregation" — and the legislative and regulatory details vary from state to state, but the basic idea is that a local government or a group of local governments can opt out of their utility, procure their own electricity, and in some cases manage their own efficiency and DER programs.

The utility still manages the physical infrastructure, the grid itself, but it becomes the community's responsibility, through a new nonprofit entity, to decide what kind of energy it wants and to buy it.

(I did a podcast on CCAs with MIT professor David Hsu in 2022 — I recommend going back and listening if you haven't heard it.)

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California is generally acknowledged as the leader and pioneer in community choice aggregators (CCAs), which now serve almost 40% of the state's total load, over 6 million people. CCAs tend to be bigger, beefier, and more powerful in California than in most other states: they can represent multiple communities, sign long-term contracts, engage customers in demand-side programs, and support local development.

To discuss the long history and uncertain future of California CCAs, I thought I would talk with someone who goes back to the very beginning. Dawn Weisz helped launch the state's first CCA, Marin Clean Energy, in 2010 and has led it ever since through feast and famine to its impressive current size: Now called MCE Clean Energy, it serves over 1.5 million people in 38 member communities.

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I am eager to talk to Weisz about some of that history, the cool programs that CCAs are offering customers today, and the difficult current challenges facing not only CCAs but California electricity generally.

All right then, with no further ado, Dawn Weisz, welcome to Volts. Thank you so much for coming.

Dawn Weisz

Thanks so much. It's a pleasure to be here.

David Roberts

To begin with, let's start with just a few basics. I sort of passed over it quickly, but let's talk a little bit about what a CCA is. One question I think a lot of people have when I try to describe them is, how is this different than a municipal utility? Like, people have heard of municipal utilities. So, maybe just describe what a CCA is and isn't, to give people a good sense of what it does.

Dawn Weisz

Yeah, that's a great way to start. So, CCAs are local government agencies that can become the power purchasers for their communities, and that means for all the load in their communities. And the way that we're different from municipal utilities is that we aren't in charge of the poles and wires, but we buy the generation and we're in charge of getting the generation purchased and onto the grid. Then, we're in charge of serving customers with information about that energy and making sure it's accounted for correctly.

David Roberts

So what about like billing, like customer interaction? Does the utility still do that or do you do that or do you both do it?

Dawn Weisz

By law, the utility still handles all of the billing, and the CCA charges show up on the bill. That tends to work pretty well from a customer simplicity standpoint. However, it does take a bit of question answering when customers see our charges on the bill and want to understand and make sure they're not being double charged.

David Roberts

Right, right, right. And so, when people pay utility bills, in part, they're paying for energy for procured electricity, but in part, they're paying what are called "fixed costs" or just costs to maintain the grid, do upkeep on the grid, manage programs required by the government, et cetera, all these costs that aren't energy. I'm assuming that customers of your CCA still pay those to the utility? So, their bill is like, "Here's your utility bit and here's your CCA bit." Is that roughly what they see?

Dawn Weisz

Exactly. And I think an easy way to refer to those charges is transmission and distribution charges, or T&D charges. So, those show up on the bill as a separate line item. And the line item we're responsible for is the generation line item. But the T&D charges are paid directly through to the utility. Also, gas charges are paid directly to the utility, and any generation revenue collected by the investor-owned utility is sent to the CCA to cover our cost of buying that energy.

David Roberts

In my understanding, California electricity bills are rising, have been rising — it's kind of a problem, people are upset about it — and that most of what is responsible for those rising prices is T&D, is transmission and distribution costs. Actual generation costs have actually been steady or falling, which means that your customers' bills are rising, but it's not your fault. How do you explain, what's that process of trying to explain that to people look like? Has that proved problematic to you?

Dawn Weisz

Yeah, it's problematic. But what I think is really surprising is that 15 years ago, when we launched MCE as the first CCA, the big concern at that time was, "How can we increase the amount of renewables on the grid and how could we ever afford to get more?" And you know, at the time that we launched, PG&E's renewable content was only 13%.

David Roberts

And it was extremely expensive at that time, too.

Dawn Weisz

Yeah, yeah, yeah. And you know, at that time before launching, we asked, "Hey, could y'all double our renewable content? Could you get us more?" And they said, "Oh no, you know, it would never be affordable. We couldn't do it." So, you know, after doing a lot of analysis, we realized we could launch this CCA program and end up with prices that were at or below what PG&E was charging and double the renewable content that we were supplying. And we were able to, in year one, we started with 25% renewable energy and then by the next year we were able to bump that up.

We're now at 60% renewables for our default product, and we have a 100% renewable product. And you're right, the generation costs have become less of a concern than the T&D costs.

David Roberts

So, do you have a way of communicating that fact to your customers? I guess they can see it on their bill if they're paying attention. But like, people don't pay attention.

Dawn Weisz

We have an in-house call center. So, our CSRs are our MCE staff, and we take calls all the time with questions about bills. Often, folks are asking about the T&D side of the bill. We do our best to explain based on the information that's provided.

David Roberts

Talk to PG&E?

Dawn Weisz

Yeah, we do. And we also have a number of staff dedicated to the policy side of the shop, and we're engaged at the California Public Utilities Commission (CPUC) to try and make sure there's good accountability for how those dollars are being spent.

David Roberts

Well, let me ask a question then about prices, since you brought it up. So, back in 2010, I'd say probably like the 2010-2015 era, PG&E had, as you say, California generally had pretty low renewables penetration and it also had extremely expensive renewables. This was sort of a notorious problem. It even remains a problem today in California, which is that there were long-term contracts signed with extremely expensive renewable generation. And a lot of those long-term contracts, PG&E is still dragging them around. So, from your perspective, from a CCA perspective, you can say, "Well, look, we can, if we opt out and procure our own power, we can opt out of being saddled with those long-term contracts."

We can opt out and just buy like cheap RECs, or even just buying new power. Like by 2015, just buying new power, you could buy it at like half the price of what you were paying with those long-term contracts. In other words, there's a very obvious reason why a CCA could get lower prices than PG&E back then when it was starting out. Like, I always understood why they had cheaper power. It's like, "Yeah, PG&E is stuck with these horrible contracts," but it seems like that should have kind of worked itself out by now.

And yet, you still got a little bit of a price premium over PG&E. So, how and why, and do you expect that price advantage to endure?

Dawn Weisz

Yeah, there's a couple of things that aren't quite right with that line of thinking. And it's understandable because I think from the beginning, we've had to correct a lot of misinformation that's been put out, sometimes by the utilities, sometimes by others who don't want to see the change that's been happening in the market. But first of all, I want to correct that when we entered the market, the cost of renewables was very high. It was still very high. And we entered into quite a few long-term, 25-year, 20-year contracts for solar, wind, waste, and landfill waste to energy.

We entered into those contracts too. And those contracts are still in our portfolio. So, it's not just, you know, we might hear that the IOUs, PG&E in particular, might say that they're the martyr that helped, you know, bear that load, but that's really not accurate. And the primary reason, you know, in addition to our portfolios which are similarly situated, PG&E and all IOUs in California have access to what's called the Power Charge Indifference Adjustment or the PCIA, which is an exit fee. And it accounts for any above-market costs of power that the utility bought on behalf of the customer before they departed.

And that PCIA is on every customer's bill for probably the next 40 years; it doesn't fall off quickly.

David Roberts

Oh, it's not a one and done?

Dawn Weisz

Oh no, it is not a one-and-done. And it includes the utility-owned generation; the UOG is part of it. And that's one reason it lasts for so long.

David Roberts

Yeah, let me clarify that quickly. So, when I'm a local government and I go to PG&E and I say, "I want to opt out," right, they charge me a fee for exiting the utility setup. And that fee is supposed to cover the difference between the market price of the power I'm going to procure and the extra cost that they have to pay by virtue of being the utility. So, the idea is that you shouldn't be able to opt out of those extra costs. So, you'll have to pay them over time through this fee.

Dawn Weisz

Yeah, and to put a little bit of a finer point on it, it's really the assumption that is made that they could sell that extra power in the market. What is the value of that power today? If the power is worth more today than it was yesterday or when they bought it, the PCIA could actually become negative. And we've seen that happen in the last couple of years. The PCIA has gotten very low.

David Roberts

Interesting.

Dawn Weisz

Because power supply costs were really going up. But when you see the opposite, when you see power costs low, the PCIA tends to be high because the value of that power has gone down. But either way, the IOUs are made whole. And we would argue that the playing field is tilted a bit in their direction. They're being made more than whole.

David Roberts

Well then, I'm even more confused. So, you are buying power off the same wholesale market that they're buying power off of, and you're paying this extra fee, yet somehow you're getting cheaper power. So, why and how long will that last?

Dawn Weisz

Yeah, well, as a local government agency, we're a not-for-profit. We do not pay shareholder profits. We tend to have more modest compensation structures, salaries. And we entered the world in a competitive market and we are very careful with what types of power supply contracts we enter into because we do not have a guaranteed cost of recovery the way the investor-owned utilities do. So we're more efficient. I think we are really driven to find those good counterparties that can supply renewables to us. And I think we work hard to keep our prices low for customers.

David Roberts

And so how much cheaper is your power than PG&E's like currently?

Dawn Weisz

Well, our power isn't always cheaper than PG&E, and we don't have a guarantee because we can't control PG&E's rates. But our power does tend to be cheaper because of the reasons I just mentioned. About 75% of the time, customers get a bill savings with us. And if you add up all the bill savings since we launched in 2010, it adds up to $97.5 million saved for customers on their generation.

David Roberts

Yeah, I guess, I just still don't completely get it because from what I've been able to tell, pretty much all the CCAs are beating — I mean, there's like 25 CCAs in California as far as I can tell. Like most of them, almost all of them are beating PG&E on the price of power. And it's just amazing to me, I guess, like they're all smarter and more efficient than the actual professionals whose job it is to do this all the time. It's just, it's puzzling.

Dawn Weisz

Yeah, keep in mind that we are run by professionals too. We pull from the same market that PG&E does to hire folks. In fact, we have several former PG&E employees with us and other great utility folks working with us. So, we have the professionalism, we have the experience. We're years old now. We just celebrated our 15-year anniversary. But I think the key is that we're not paying shareholder profits and we're publicly accountable. We're managed by a public board. So, when it comes to raising rates, it's not as easy as going into the CPUC. I think often there's kind of a "check the box" exercise.

David Roberts

So you think it's actually easier to get a rate boost through the CPUC than it is through one of these municipal sort of boards?

Dawn Weisz

I do.

David Roberts

That's funny. That's really funny. I mean, sad but funny.

Dawn Weisz

Well, yeah. I mean, think about it. All local government agency meetings are open to the public.

David Roberts

Yeah, right.

Dawn Weisz

They're subject to the Brown Act. And so, we have members of the public giving us input, giving us advice. We're accountable to the local community. So, every dollar really matters. And we think carefully about how we can provide the best service at the most efficient price point.

David Roberts

One other technical question I'm trying to figure out, sort of like where your authority ends and the utilities begin. Like, you are out there running distributed energy resource programs, doing stuff with EV charging. You've got green loan programs where you're doing cheap loans to low-income customers. You've got VPPs you're starting up now. All of which I want to talk about later. But like, what can you not do? What is reserved for the utility? Like, where are the edges of your power and authority?

Dawn Weisz

I think the primary difference between what we can do and what the utilities can do is transmission. The transmission and the interconnection really need to be done by the investor-owned utility or someone else that has the ability to do that. But we are able to offer all sorts of programs: energy efficiency, electric vehicle charging, our virtual power plant program. We do a lot in the multifamily sector and we do a lot through an equity lens. There's a lot of untapped energy efficiency out there in the low-income sector. So, we really focus on that.

David Roberts

So, all the utilities do, once a CCA has sort of claimed this right to buy the power, is just maintaining the grid and just charging customers for grid costs and interconnecting people to the grid. Everything else in terms of interfacing with customers is on you guys.

Dawn Weisz

Correct, yeah.

David Roberts

Got it. And so, I don't want to spend too much time on the history here because you've logged quite a bit of it at this point. But I do think it's sort of interesting and telling to talk a little bit about the early days, all the ways the utility tried to prevent you from existing in the first place, then tried to kill you once you existed, and then the sort of, like, hostility. I'm just sort of curious, like, the utility's attitude towards you at the beginning and how it's evolved over time.

Dawn Weisz

Yeah, great question. And, you know, I will say it was a very interesting ride, you know, getting things launched. There really wasn't a roadmap for how to launch a CCA in California.

David Roberts

Were you the first state to legalize these things?

Dawn Weisz

No.

David Roberts

Oh, no, it was Massachusetts. Right. I did a podcast.

Dawn Weisz

Massachusetts and Ohio had programs. So, yeah, California's enabling legislation passed in 2002. It was AB117 by Carole Migden. And it took us a long time. You know, I was with the county of Marin at that time, and we supported the bill, and then we wrote some grants to do some analysis and see if we'd be able to launch a CCA program, really, because we had set some carbon reduction goals, and we were looking for ways that we could reduce our carbon impact without really having a budget to do that.

David Roberts

And you're at the mercy, you find yourself at the mercy of your utility, basically.

Dawn Weisz

Yeah, exactly. And, you know, the buildings were a big piece of our carbon emissions. And, you know, we looked at, "Well, we've only got 13% renewables in the mix. How can we really move the needle here?" And, you know, so lo and behold, this bill comes along that would allow local governments to redirect where we're getting our power from and run it through a local agency. And we thought, "Well, gosh, this could be a relatively small change that could have a really big impact." And it seemed really promising and compelling, but it also was daunting.

And, you know, we didn't know if it could work because it had never been done before. So, you know, we did some analysis, and over many years, analysis and peer reviews kept coming back looking good. And so we partnered with the other local governments and the water districts and a few other interested large businesses and started developing a business plan. And it was around the time we were developing that business plan that PG&E got really engaged in trying to stop us. They would show up at our local, you know, small little city council meetings when we'd be presenting on the idea, and they would have someone get up and present kind of a counter presentation on "What are all the risks?" And, "Oh, it's really not going to work out. And this is a really bad idea."

David Roberts

I'm just curious, like, what were they saying the risks are? Like, what was their — I can imagine a substantive case against CCAs, but I'm guessing that what they were stressing were just scary stuff. So, what scary stuff did they try to scare people with?

Dawn Weisz

Yeah, well, you know, they had the not-too-distant energy crisis in the 2000s to point to. And that was scary, you know, for local government agencies' reps who weren't doing energy yet and weren't eager to add something new to their list. You know, PG&E talked about the high cost of power, the volatility in the market, the fact that there might be blackouts, and, you know, "What if things went wrong?" And, you know, "You really don't have the expertise to do this." So those were some of the things that they said. Since then, we've developed a more collaborative relationship.

David Roberts

Wait, before you skip past. You launched in 2010, and didn't they then immediately launch a ballot initiative to try to kill you right after that?

Dawn Weisz

Yeah. As part of our process of launching, PG&E put $45 million into a ballot initiative called Prop 16.

David Roberts

I'm guessing you did not have $45 million to counter that.

Dawn Weisz

We did not. And we also had to adhere to the law which says that local government agencies can't spend public money on ballot initiatives.

David Roberts

Oh, funny.

Dawn Weisz

So, we were kind of in a fight with our hands behind our back. But PG&E did spend a lot of money on that campaign and set up a number of other hurdles, including a phone banking campaign through a third party that called, as far as I can tell, every customer in our county.

David Roberts

$45 million will get you a lot of phone calls.

Dawn Weisz

Well, that was in addition. They spent $4 million just in our county on phone banking. And mailers, they sent out a lot of mailers. One of the funny ones said that MCE is a huge government bureaucracy and would be serving customers with coal and that the prices would be double what customers are paying now. And I looked around and it was me and one part-time intern. And I was like, "Gosh, where is this big government bureaucracy? I really could use a little help."

David Roberts

I mean, it's very rich for PG&E to come along and be like, "You don't want a big bureaucracy. There might be blackouts, power might be expensive." Like, yeah, don't throw me in that tar pit, PG&E.

Dawn Weisz

So, there were a lot of tactics used. There was kind of interference with the banks we were trying to work with. There was interference with the water districts we were trying to work with. There were threats of California Environmental Quality Act (CEQA) lawsuits for buying renewable energy, which is also a bit rich. But, you know, a lot of scare tactics and a lot of misinformation that we had to counter. And the ballot initiative narrowly failed. We actually had to speed up our launch in order to complete the one-month process of enrolling customers, our first set of customers to be completed before the vote.

Because we determined that if the vote went the wrong way, we might not be able to legitimately continue.

David Roberts

So, the way it works is, you send something to all the customers in an area like this and there's like a checkbox — as I understand it, it was opt-out, not opt-in. So, you sent out a mailer saying basically, "If you don't want to be involved in this new CCA thing, check here to opt out." Is that right?

Dawn Weisz

Yes, we send five mailers, two before and three after.

David Roberts

And do people, I'm guessing, just knowing what I know about human behavior and behavioral science, I'm guessing most people did not opt out. Like, what was the, what were the percentages on that first signup?

Dawn Weisz

Yeah, on the first signup, we saw about an 80%, 83% participation rate. Since then — and I'll fast forward because after we launched, we worked with the legislature to pass a code of conduct that prevents misinformation from being sent around by the utilities — we've enrolled other communities since that time. As you noted, we've got 38 member communities now. We've seen much higher participation rates in our other communities where that negative marketing campaign didn't occur. We see around a 93% participation rate in those communities. And it's interesting because that marketing was a long time ago, but the effects have persisted.

We've noticed the communities that received that negative marketing back in 2010 still have lower participation rates.

David Roberts

Oh, interesting. Propaganda works, I guess.

Dawn Weisz

I guess.

David Roberts

So, the people who opt out, they just stay with PG&E, continue paying the rates they were paying before. Nothing changes for them, basically. And so, I guess I'm wondering, like, I'm opting out of this program. My neighbor's opting in the next month. My neighbor gets a cheaper power bill than I do and gets all the same electricity. Why don't I then opt in the following month? You know what I mean? Like, why are people still opting out? If you're offering cheaper prices to the people who are opting in, what is keeping people away anymore?

Do you do any sort of opinion research about this kind of thing?

Dawn Weisz

Yeah, I think this will probably come as little surprise to you and most of your audience, but electricity bills are really confusing, and it's hard for customers to decipher what's going on. So, a lot of the calls that we get from customers are, "Hey, my bill is higher than last month. I don't understand why." Often, we get a lot of those calls in the winter when folks are using more gas and they don't quite realize, or "Oh, well, did anything change recently?" "Well, I did buy an EV." And, okay, well, that might be why.

But, you know, folks don't spend a lot of time digging into the weeds or comparing with their neighbor or, you know, knowing what the options are out there. We try to make it as easy as possible. You know, as a public agency, we're all about transparency. So, we've got a cost comparison tool on our website where folks can figure out what they would be paying with PG&E versus MCE. We include that exit fee, of course, so they can figure it out. But a lot of folks don't want to spend the time doing that.

Or, they might want to just set it and forget it, and not revisit every year to see if they could save a little more.

David Roberts

So, explain why PG&E wouldn't want a community to break off and form a CCA. I mean, I guess in some sense it's intuitive, like they're losing customers, but they're a monopoly and they get a guaranteed rate of return. Like, what's it to them? I guess I'd like a little bit more explanation. Like, what is their beef? Why don't they want people doing this?

Dawn Weisz

Yeah, I share your curiosity. I'm not certain, and I think there's a difference of opinion depending on who you talk to at PG&E. I have spoken to folks who have since retired and felt that PG&E's approach maybe wasn't the right one. So, I don't know. You know, it might just come down to control. And I think that we have proven that a different business model works.

David Roberts

Well, it is humiliating if you're running this thing and like town after town is opting out and providing their customers with cheaper power than you are providing. Like once is one thing, twice, three times. But like, if 25 separate towns all bail out and then they all end up better off, it's embarrassing, if nothing else, I guess. You know what I mean? It's like, it is embarrassing. It's like a big signal to the entire world that you're not doing your job very well, I guess.

Dawn Weisz

Yeah, possibly. And I, you know, and I don't want to be disparaging PG&E, you know, too much because I think they do a lot of things well and we collaborate with them in a lot of ways. But I do think that, you know, we have opened up a new way of doing energy for the public good in California by saying, "Hey, we can double the amount of renewables and keep prices the same. Hey, we can offer a 100% renewable option at a small premium." And folks signed up for it.

David Roberts

Again, like PG&E's been telling people, "No, you can't" for years and years. And then you just go do it. I think that's part of the explanation for what they're up to. But I should say I'm piling on PG&E too much too. I will say they have changed an enormous amount since 2010, since your launch. And as you say, they've launched lots of cool programs. They're doing lots of cool things now. So, I'm sort of curious, what is your current relationship? Are you closely involved with one another?

Are you sort of on parallel tracks? Like, do you work with one another? What's the current relationship look like?

Dawn Weisz

Yeah, I think that we work really well together on customer engagement because we see the customers as our shared customers. We have a great point person at PG&E that we meet with on a regular basis and compare notes on issues that are coming up. Sometimes their call center will provide inaccurate information that we can help correct, and vice versa. We compare notes, making sure that their team has accurate information about what we're doing so that they can be accurate with customers. I feel like that part of the relationship and the logistics in interfacing with customers is going really well.

I think there are areas of improvement. You know, one area you touched on earlier is there's a lot of load growth in California.

David Roberts

Yeah, that's my very next question, actually.

Dawn Weisz

Well, maybe it's a good segue, but we aren't getting informed by PG&E when they have big loads anticipated, like data centers.

David Roberts

Interesting.

Dawn Weisz

We kind of need to know that. We're buying the gen. So, that's a bit of a sore spot right now that we're hopefully going to be able to work through.

David Roberts

So does that mean you're doing your own load forecasts separately than PG&E?

Dawn Weisz

We always have. Yes, we do our own load forecasts. We're looking at weather.

David Roberts

You would think they would share that. I mean, you would think. I mean, you would think the CPUC would tell them to share that.

Dawn Weisz

Yes, agreed.

David Roberts

But they don't. So, they don't have to share their load forecast. So, the way it currently works, a data center can go to PG&E, work out a contract, and connect to the grid. And you find out about it when they connect to the grid?

Dawn Weisz

Yeah, something like that. We're still getting the timing down. And one other area where I think we can do a better job is we have a lot of programs, and we would like to know which programs PG&E has that they're already offering to which customers so that we're not spending time double enrolling customers. It's not efficient for us to be reaching out to customers they are already working with, and vice versa. We, of course, will share with them who we're reaching out to and who we're working with. But we'd like to have more of an equal exchange there so that we could both be more efficient and keep costs down for customers and keep confusion down.

David Roberts

Right, well, let's segue then, because how are you thinking about — everybody in the electricity biz is grappling with this right now — how are you thinking about this supposed giant demand growth that is impending? Like for one thing, are you serving areas where there are likely to be lots of data centers cited?

Dawn Weisz

We have the potential for data centers in our service area. We have some areas where there are mothballed fossil facilities that could be a good location for that type of thing. So, yeah, we certainly do. And there's certainly a lot of demand and load in our area. We're looking at ways that we can serve that load with a lot of load flexibility.

David Roberts

Yeah, yeah. I was going to say, you know, you're not in control of the grid or T&D costs, as you say. Mostly D costs, if we're being honest, T&D cost is like 75% distribution cost. You're not in charge of that. So, you can't directly reduce those costs for your customers, but you can do demand-side stuff that enables them to generate, store, and manage more of their own power and thus just require less distribution.

Dawn Weisz

Exactly.

David Roberts

So, talk a little bit about what you're doing along those lines.

Dawn Weisz

Yeah, so we have a number of load-shifting programs that are aimed at aggregating load shift, being able to bid it into CAISO, and reduce the amount of supply that we need to put on the grid, particularly during the peak hours that happen in the evening.

David Roberts

VPPs, right. And this, and this is all in California, this is all legally — like you don't need any rule changes or law changes. You can form a VPP and bid into the wholesale market today?

Dawn Weisz

Yeah, we sure can. And I think there are some structural simplifications that could happen that could make it simpler, but we'll get there. And we're working with CAISO and the regulatory bodies to try and streamline. Practicing with different program elements is a great way to figure out where the pain points are, where adjustment is needed. But we have a bi-directional EV charging tariff, for example, we have a battery storage tariff, which by its nature would be bi-directional as well, as long as we have the protocol set up to allow for that at CAISO. We have an MCE Sync program which is managed EV charging.

And that program has been really successful. We've been able to shift 96% of participants' EV charging off of peak periods. And we have thousands of customers in that program, so that's helping them and us avoid buying extra power during that peak. And like I said, we bought a lot of expensive solar back in the day. So we have a lot of solar on our grid during the middle of the day. So we're trying to make the charging happen then as much as possible. We're putting in a lot of workplace charging, multifamily charging and that sort of thing.

David Roberts

When you say "we're working on" you just provide incentives, like the customer buys it and you help defray the cost, or you buy it and install it in customer houses, what does that mean? How do you encourage batteries? Are you just like trying to make them slightly cheaper or are you actually going beyond that?

Dawn Weisz

We're going a little beyond that, both for EVs and for batteries. So, we will often provide technical support if there's a need, particularly in sectors that have the need, like multifamily and some small businesses where they can't access the bigger rebates that are set up for bigger businesses. So, we'll go in and help connect customers with technical support to plan out their EV charging and their battery installation. And then we'll also provide incentives. Sometimes the incentives will cover most of the costs. Sometimes the customer will have to pitch in a bit, but over time they come out ahead within a year or two.

So, we try to do a little bit of both to move the needle.

David Roberts

I'm curious about the VPP thing, how far along that is, do you have a VPP up and running and selling power into the market?

Dawn Weisz

We have a VPP up and running, and we are a month or two away from doing our first bid into CAISO. So, we're at a really exciting, pivotal point.

David Roberts

Can I ask about the size you're going to sort of launch with?

Dawn Weisz

Yeah, so our target is 100 residential customers; these are homes. And a few of them — I just have to add this element to it — because we're doing this in Richmond and we've partnered with the Richmond Community Foundation to buy dilapidated or abandoned homes and turn them into smart homes and offer them up to first-time home buyers to make sure that the frontline communities, which in many cases have really borne the brunt of the difficult impacts of energy for many years, we want them to be at the forefront of getting some of the benefits of the green energy transition. So, we're offering these smart homes up to these customers and they have mini splits, solar battery, EV chargers, efficient induction cooktops, efficient washer, dryer, and heat pump water heaters.

David Roberts

And no gas hookup, I'm guessing.

Dawn Weisz

No gas hookup. That's right. And we're using Home Area Network (HAN) devices to control the load, and we allow customers to override our signals if they need to. If it's a hot day or they need to charge their EV and avoid our signal, that's fine. But, you know, as long as they're sticking with our signal, there will be some financial benefit to them, and we split the benefit between them and us to make it fair.

David Roberts

I mean, I'm sure, I'm guessing it's too early to know, but do you have any sense of the scale of that benefit to the customer? Like on a monthly basis, is this like a couple of dollars, you know, $20, $100? I have no sense of what's possible.

Dawn Weisz

Yeah, we think it could be between $15 and $20 a month, but at some times of the year, it could go much higher. And it really depends on how much load they have in the home. These are small homes without a lot of fancy equipment. So it's really the scale that's going to make a difference here. And that's why we want to grow our VPP beyond this hundred home pilot to encompass a lot of bigger chunks of load throughout our service area.

David Roberts

Yeah, sort of curious. Like, 100 homes is clearly a, you know, a starter pack, an experiment to make sure it works. Is your thought, idea, vision here that eventually something close to all the homes in your service area will be participating in this kind of thing? Is that where you see this going eventually?

Dawn Weisz

That would be our vision. That would certainly be our goal.

David Roberts

And then, would that really allow you to suppress those peaks? I mean, once you have over half a million customers you're currently representing, that's a lot of potential load.

Dawn Weisz

Absolutely.

David Roberts

At this point, you are pretty empowered. The legal structure is set. What, at this point, would be helpful from either the California legislature or the CPUC? Do you have a list of asks to either of those bodies?

Dawn Weisz

Yeah, our number one ask is maintaining local control and CCA autonomy because we've really been able to lead the way for the creation of more than 25 CCAs across the state. What sets us apart as CCAs is that we're governed by a board of elected officials with a unique ability to tailor our programs and services to meet the needs locally of our customers and our service area.

David Roberts

It's kind of like you're getting all the good bits of being a municipal utility without the hassle of maintaining the grid. It kind of seems like the best of both worlds, a little bit.

Dawn Weisz

I don't know about that. I mean, we really are constrained. You know, our local government members come to us all the time saying, "How can we speed up getting this facility connected?" You know, we have a hospital or, you know, an affordable housing complex.

David Roberts

You can buy it, but you can't interconnect it. You're still waiting for the utility to do that.

Dawn Weisz

Yeah. And that has a real impact on our electrification programs. You know, we're trying to help folks switch to heat pump water heaters and all the other great gadgets that you talk about on your show.

David Roberts

Has there been any discussion in taking that further step and becoming a full-on municipal utility?

Dawn Weisz

There's been some discussion. It would certainly be a lot more to bite off. I know that some of our sister CCAs have been working towards that for many years and have run into a lot of hurdles.

David Roberts

Yeah, well, I think everybody heard about Boulder's experience and has been slightly daunted away from that.

Dawn Weisz

Yeah, I mean, ultimately, there isn't really a level playing field, and that can make it challenging to consider.

David Roberts

So when you say protect their autonomy, is there some current threat, what are the current dangers that you're facing, the biggest challenges facing you right now?

Dawn Weisz

Yeah, I think sometimes, well-informed or well-intentioned regulations can have unintended consequences that really constrain innovation. And, you know, this is a theme I've heard about on a number of your shows where it really resonates with me. When making a rule, sometimes you think you know the right answer, so you say, "Oh, just do this." But instead, what you should say is, "Hey, here's the goal we want to get to. Please avoid doing X, Y, and Z and figure out the best way to do it." We often get pushed down a specific path that isn't the most efficient path.

And instead, I think the way to set rules is to kind of put out a high-level standard. I think the Renewables Portfolio Standard (RPS) is a good example of a great standard.

David Roberts

Right. Well, you say, "We want X outcome."

Dawn Weisz

Yeah, right.

David Roberts

You regulate the outcome and you say, "You figure out how to get there."

Dawn Weisz

Exactly.

David Roberts

Every regulated entity in the world wants that. I don't know why, regulators, but for some reason, regulators really don't like doing it that way.

Dawn Weisz

That's right. And what you get if you do it that way is innovation, creativity, flexibility, and ultimately affordability. Because we're always looking for the cheapest way to do it.

David Roberts

Is there a handy example offline where you feel like the CPUC or the legislature has sort of gone overboard on specificity?

Dawn Weisz

Sure, I can give two high-level examples. One is when we get procurement mandates to buy a certain technology within a certain timeframe, say within two years, everyone has to buy this large amount of geothermal, for example. Well, if you own geothermal, all of a sudden your negotiations might be put on hold and your prices might go off double or triple. So that's not a smart way to do it. Instead, regulation could say, "Hey, we want this amount of reliable clean energy that generates during these hours." So that's one example of a regulation that causes non-affordability in the market, causes prices to go up a lot, and also causes constraints in the market because everyone's trying to get the same thing within a very small time period.

Another example is when load-serving entities are told to enact real-time rates that have these very strict parameters, using certain named databases and following protocols that really aren't the most efficient protocols. That sort of requirement eats up a lot of time and prevents us from doing the things we're already doing, which are working better and are more efficient.

David Roberts

So, what would it look like then for the California legislature to grant you more autonomy? Are you talking about something like CCAs are exempt from XYZ regulations as long as they achieve XYZ targets? What would it look like to boost your autonomy?

Dawn Weisz

Really, what I'm saying is that we don't want to have any more encroachment on our autonomy. I think having a clear standard like an RPS, for example, is a great way to keep us all rowing in the right direction. And if there is going to be a new standard set, give the market some time to adapt to it. Say, "Hey, in four years we want everyone to do X and in 10 years we want everyone to do Y." And then we might meet those standards. You know, for example, the current target for renewables for the state, the 2030 target, we met it 13 years early because our board believes in getting those renewables on the grid as fast as possible.

David Roberts

I feel like the state should say, "If you get to this target early, you get a treat, which is exemption from all further regulations." You did it. Clearly, you know what you're doing.

Dawn Weisz

Yes, yes, good one. I like that.

David Roberts

So, maybe from the legislature and the CPUC, a lighter hand and more sort of outcome-oriented regulation. What about from incumbent utilities? What would be helpful to get from them?

Dawn Weisz

Yeah, I think better information flow would be great, particularly around customers and programs, and more collaboration. You know, I feel like the VPP that we're working on is very, it's cutting edge, and that can sometimes be painful because, you know, there are rules that haven't yet been set up to align with what we need to do. Like, as an example, right now, every time we want to enroll an asset like someone's water heater, we're going through a very complex process that was really set up for a large generator.

David Roberts

Oh, you're talking about small-scale interconnection to the distribution grid.

Dawn Weisz

Yeah, and I think that we could partner with the IOUs in a collaborative way to scale up the programs that we want to see succeed. And you know, in my mind, it's about leadership. You know, I think leadership isn't about the spotlight, it's about responsibility. And when you're in a position of power where you have the ability to influence the way people are using their power and having to pay for their power, it's your responsibility to do the very, very, very best that you can to keep it affordable and make it work efficiently. And there's not time for, there shouldn't be time for holding information hostage and not just collaborating openly to try and find the best solution.

You know, we're in a climate crisis and I think we need all hands on deck, working together in parallel, to find the best end result.

David Roberts

Yeah, I did a whole podcast in August of last year about the data that utilities get from smart meters and stuff like that, and their unwillingness to share that with VPP companies and all sorts of other entities that sort of need that information to plan their businesses or to plan their futures. I think this is a widespread problem, the sort of unwillingness of utilities to share information.

Dawn Weisz

Yeah, and what the result is that we are having to physically go to each of our customers' homes and businesses and put a HAN device in their facility so that we can read their load and control their load because the smart meters really aren't smart. We don't get information in real time. We get information with about a 72-hour lag.

David Roberts

Yeah, that's hilarious.

Dawn Weisz

It's not even in hourly increments.

David Roberts

Yes, the failure of the first generation of smart meters is... I should probably do a podcast completely on that at some point. Yeah, I've just been doing some podcasts recently on people who are basically inventing devices that are either collars that go on the meter or sort of adjuncts to the meter to sort of boost the function of the meter. Like what it can know and what it can do.

Dawn Weisz

Yes, I heard your Span panel a couple of weeks ago. That was fantastic. And that's one example where I was excited to hear that PG&E is interested in that. But I'm frustrated to hear they haven't done more already. Like, you know, if you have this huge volume of customers, you have power, you have control. And I feel like it's our responsibility as load-serving entities to find those good outcomes and get them going.

David Roberts

What about CAISO, the grid manager? Is there anything in particular that CAISO could do that you would find helpful?

Dawn Weisz

Well, I found CAISO to be really innovative and a great partner, and I feel like they're always looking for the best solution to keep things flowing well, often with an eye towards economics. I think they understand the market because they're in there every day working on it. So, I've really enjoyed collaborating with CAISO. I think they are looking for ways to grow the VPP interface from a pilot-based model to a scalable model and to break down the silos. I think right now there are a few distinct ways you can engage with them with your VPP, but there's not really a way to optimize a device to move across platforms.

And one day, it might behave as an exporter, and on one day, it might behave as absorbing load at a different time. And so, being able to optimize is, I think, the next frontier for CAISO, and I'm so happy to see that they're already working on that and we're excited to be partnering with them.

David Roberts

Are you engaged at all in the discussion about a shared Western grid? You know, because there's no, you know, CAISO is just California and there's all these, I forget how many in the west, but there's like dozens of different little balancing areas in the west and there's all this talk about trying to create a larger western ISO. Are you engaged in that? Would that help you at all? Are you involved in that discussion?

Dawn Weisz

The discussion around regional coordination is really a discussion about affordability. And we're very engaged and we're very supportive. I am worried that if it doesn't move forward, California is going to become a bit of an island that is going to make it much more costly to serve our load and use our resources efficiently. We have some of that expensive solar power in our portfolio in the Central Valley being curtailed, and we're losing several million dollars every year or every month to account for that. And if there were places for that energy to go when it's not needed in California, that would help with affordability.

And if there were more resources for us to access across the grid. You know, already the trading across states is saving $800 million every year on California's electric bills. With regional coordination, we would see 10% less curtailment of California's solar and wind. That's a lot of dollars. It would also reduce the use of in-state fossil gas power by 31%.

David Roberts

Oh wow.

Dawn Weisz

Yeah, so that would help us reduce our GHGs and also improve our air quality and health outcomes for communities living near those plants. And it would give us access to 25 GW of added supply that we could tap into during extreme weather events when our grid is stressed.

David Roberts

Yeah, of all the difficult decisions in electricity, just like hooking up grids over larger geographic areas, is just such a no-brainer. It's just such a... It's good, it's good for literally everyone.

Dawn Weisz

Yeah, I agree.

David Roberts

Final question. When I checked in on CCAs in 2022, there were 10 states that had enabled them. I checked back on that. It's still 10 states in 2025. Two-part question: Is there some momentum for expanding these things? Is there still a push to get them passed in new areas? Is that still ongoing? And then two, what advice would you give city leaders in a city or town that is thinking about doing this, that is thinking about launching their own CCA?

Dawn Weisz

Yeah, well, to answer your first question, there is still an interest in other states regarding CCA enabling legislation. There was definitely a lot of buzz around this back in 2018 through 2020, and sometimes it can be driven by the success of some communities. The word spreads and that can spark others. I'm not aware of big pushes right now, but I do tend to stay a bit more focused on what's happening in California. One thing I'll note though is that the California model is a bit different from some of the other states in that the local government agency is really holding the reins, managing the budget, doing the procurement.

You know, we have 75 different energy suppliers that we work with, so we're putting together our own portfolio.

David Roberts

How big is your staff right now? How big is the MCE operation?

Dawn Weisz

Yes, about 100. We have a little over 100 staff. And then we also have some external support on the legal and procurement side and a few other areas. But we do all of our procurement. You know, we schedule our resources, we schedule with CAISO, we manage our budget, we manage our credit ratings.

David Roberts

So, in some other states where there are CCAs, CCAs are not that empowered. They have somewhat less authority than that, as I understand it.

Dawn Weisz

Well, I wouldn't say they necessarily have less authority, but they often are using a third-party vendor to handle everything for them: to handle their customer interface, their customer acquisition, their billing, and their procurement, all through a third-party shop. And so, that's a bit of a more volatile model and it doesn't allow for as much continuity as we've seen in California. Because in California, these are local government agencies that are built to stay and we've really redirected a revenue stream that exists in all of our communities. And I guess this gets to your second question, which is, you know, what would we tell someone at a local government agency that doesn't have a CCA?

David Roberts

Because you are making it sound like, you know, like if I'm a small town, you know, whatever mayor, and you're describing like, "Oh, we're, I've got 100 people and we're procuring and scheduling," you know, it sounds daunting.

Dawn Weisz

Yes, but it pays for itself if you do it well. You know, if you're hiring experts and professionals that know how to do their jobs, then you can run a load-serving entity very efficiently and effectively. And you know, with a strong credit rating and with a large budget, you know, we have an $800 million a year budget and a lot of that goes to energy. We've built up reserves and developed those strong credit ratings as a result. And that allows us to buy power at a cheaper level than entities that don't have as strong of a credit rating.

David Roberts

So what's step one then for my little small town mayor? How do you get into this?

Dawn Weisz

Yeah, well, we have developed a trade association across the state called CalCCA that is really a connection point for any local governments that are interested in community choice and want to get involved. We share everything, and that's what I really love about working in the CCA space or the local government space. We share our marketing information. Here's our business plan. Here's how we address this compliance obligation. We have working groups and teams across the CCAs that really help each other out. We have a list of best practices, and we have ongoing calls and gatherings where we're sharing information and helping each other.

And we don't have to reinvent the wheel as a result. I can learn from one of my sister CCAs.

David Roberts

Yeah, I was sort of wondering. I'm guessing it's a lot easier now than — I mean, obviously, it's easier to do it now than it was when you were starting.

Dawn Weisz

Yeah, I think it is because there's such a great network across the state.

David Roberts

Awesome. Thank you so much. This is really fascinating. I feel like these should be better known. A lot of people out there in the world wish that there was something like this, and there is something like this. You know, you could have this in your state, theoretically, if you did some organizing and pushing for it.

Dawn Weisz

Exactly.

David Roberts

Thank you so much.

Dawn Weisz

Thank you. My pleasure.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, I sit down with Page Crahan, who leads Tapestry, an audacious effort to “make the grid visible.” We explore how disparate, scattered data sources can be stitched together by AI into a coherent realtime map of the grid, to slash operation and maintenance costs and speed up the grid interconnection process.

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Text transcript:

David Roberts

Hello everyone. This is Volts for May 21, 2025, "A Google Maps for electrons." I'm your host, David Roberts. Birthed out of Google some 15 years ago, X — not to be confused with the other X, run by that other guy — calls itself a "moonshot factory." It's best known for spinning off Waymo, the self-driving taxi company, but it hosts all kinds of quirky research into sci-fi long shots from robotics to molecular recycling.

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One of the more recent moonshots launched out of X is called Tapestry, and it is devoted to our favorite subject here at Volts: the electricity grid. It bills itself as a “Google Maps for electrons” that will "make the grid visible," using AI to map and model grids in a more comprehensive and cohesive way than current tools can manage.

Tapestry has worked with the government of Chile and, just a few weeks ago, announced a big partnership with PJM, the mid-Atlantic grid operator. The idea is that Tapestry's tools will allow PJM to accelerate its glacial interconnection process, enabling more power to be added to the grid faster.

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I am somewhat skeptical of AI, and somewhat skeptical that any technological tool can cut through the Gordian knot that is the US grid, with its Rube Goldberg regulatory regime and lack of central planning. Nonetheless, making grids work better is my jam, and I am extremely geeked to hear more about it from Tapestry General Manager Page Crahan.

With no further ado, Page Crahan, welcome to Volts. Thank you so much for coming.

Page Crahan

Thank you so much for inviting me to geek out with you today on this great topic. Dave, it's great to be here.

David Roberts

You know, when your guy got ahold of me and he's like, "Hey, we're doing this. Would you like to talk about it?" And I was like, "Well, that certainly sounds like my kind of thing." But, having dug into it now, there's not a ton of public information available on it. So, I'm going into this a little bit more wide open than I usually do. I'm very curious to hear what the heck you're doing. So, maybe the place to start is, were you at X when they came up with this or did you get hired into X to do this? What is the origin story of Tapestry at X?

Page Crahan

Great question. It's interesting. When I joined X about seven and a half years ago, there were a heck of a lot of people — and there still are — thinking about energy. I think the impetus of working in this building is you come and you really want to address one of the world's biggest challenges. And a lot of people think energy, climate, etc., is a big topic. So, you will have maybe thought about some of the things that have come from this building, like Malta, which is storage technology, etc. So, when I joined, there were a lot of folks thinking about all things energy and grid — like it has to connect to something. So, what do we do about the grid itself?

And so, there was a sort of band of hobbyists, enthusiasts thinking about coming together, as folks do here at X, to just think about topics and maybe someone who's a mechanical engineer and a mathematician kind of having lunch and thinking about, "Well, what do we do about the grid?" So, I would say that there has been a longstanding dialogue that is interested in energy in general and the fact that the grid itself and the network that connects these things is a really big component.

So, I joined and there were folks thinking about this space, but it was definitely a nascent — what is now Tapestry — quite a nascent team. Kind of a handful of folks about seven and a half years ago getting started, thinking about, "Well, gosh, what about the grid itself and how much data and how we could run it differently...?" There's the preamble.

David Roberts

Yeah, well, I mean, thinking about energy for any length of time, any solution you come up with, you realize the grid is like — what's the right analogy — it's the eye of the needle that the camel has to get through to have any effect on the world. Like, it all has to go through the grid. And as I'm sure all you smart people noticed after doing this for a few years, it's awfully hard to make anything happen through the grid these days. Is there like a clear mission statement, or is this just like, "We're going to approach the grid and try to figure it out as we go" kind of thing?

Page Crahan

No, no. Tapestry's vision and mission statement is really to make the world's electric grid visible so that everyone can access reliable, affordable, clean energy. And we chose that language largely because it feels like better data, better information, better insights about the network will unlock a lot of the decision-making and sort of improve the way we handle an increasingly complex system. And I think an analogy that has remained apt even from the early days of the project was thinking about building that Google Maps for electrons. Waymo incubated here and I like to learn from other efforts and I think the notion of course, when Waymo was created, there were maps that got drivers from A to B. We all had maps.

They were good or bad, or however we sort of thought about the accuracy of the maps. But what needed to be, you know, the technology that allowed Waymo to really take root was the ability to map the physical world around it. Because if you have a map, you don't necessarily know that there's a pothole or the road is at a slight grade, and that might be information that's important to you. And so, I think when Tapestry thinks about making the grid visible, it's not because we're unaware that there are current maps and tools. It's that we think that because of how complicated the grid is itself — humankind's largest machine, transmission, distribution, generating energy, using energy — we think we just need much better visibility.

David Roberts

Yeah, and so, you know, when Google Streets set out to do its thing, and I will just say, like, just as a matter of historical curiosity, I sort of remember. I'm old enough now to remember when Google said, "We're going to make maps of everything everywhere. And we're not just going to make maps, we're literally going to drive cars over every square inch of it and take pictures of every square inch of it so that we literally have a picture of every juncture of every street in the world." My first thought was just like, "That's crazy. That is an absolutely crazy thing to set about to do."

And they did it. So, these things are possible. So, is the idea here just the same thing? Drive cars around and take pictures of the grid? Is that sort of the root of it here?

Page Crahan

Well, I think, to extend your analogy, you think, "That's kind of crazy." And then you think, "Could they do it?" And then you think, "Well, what would it be useful for? Because I've gotten along okay without pictures." But then once you have them, "Oh, wow!" And you can sort of imagine all the value. So the analogy for Tapestry is what we looked at is there are not just Google Street View, but many, many different types of geospatial — you know, there are drone programs that utilities run. Yes, of course, there are Street View cameras that are still mounted on cars that Google uses to increase the sort of fidelity and accuracy of those maps.

There are satellites that are run for various things that you can hop on the Internet and find. So, the thing that gets me really excited about this particular moment in time is, as a species, we've gotten really good at mapping stuff. And so, Tapestry doesn't think we need to go create that wheel again. What we think we could maybe be quite helpful with is taking the existing imagery and maps and drones and satellites and insert all of the amazing things that are happening and synthesizing that information, drawing insights from it in ways that perhaps haven't been looked at before.

And again, I will take your bait of appropriate skepticism about this sort of panacea of AI, but that is actually a place where, if you take sort of a vast amount of information, especially about the built world, our physical world, one can apply artificial intelligence to derive insights from that geospatial information that are sort of repeatable and scalable and knowable. And so, yeah, the vision for Tapestry is not to start from scratch. It's to say, "Gosh, look at what we've created already with all of these tools."

David Roberts

So, your idea is that through one way or another, through some combination of these cars and satellites and everything else, there are already pictures of the whole grid out there and you're just gathering them.

Page Crahan

That's right. I think the name Tapestry hopefully evokes weaving, weaving things together. And that is really the thesis for us. There are wonderful images — for sure, you can't get everything from imagery. Some of this is either not visible, maybe it's underground, or maybe it's inside of, you know, other apparatus.

David Roberts

Yeah, I was going to say, this is not like streets in a lot of ways. There are parts of the grid that are not on a public right of way. There are parts of the grid, technically these days, like DERs, etc. Some of them are behind the meter, they're literally on private property. Some of it's underground. So, what do you do about all those patches?

Page Crahan

Yep. I think that is the exciting part of this challenge. You start with what is sort of easy, which is what you can get from a basic street view map. But a lot of the grid is not visible. A lot of the components that we care a lot about, when we think about reliable infrastructure, are maybe behind a breaker box or something, maybe just not visible. But what we think is interesting is, again, it's sort of this, I'll use a phrase, the multimodal insights. So you can use a schematic or a single line diagram to augment what you can see that is visible.

And then again, it's the weaving together of — in one voice, we could say that we have a lot of data and insights about the electric grid. And in that same conversation, you could say, well, we also don't have enough. And those can both be true. Right? And so to us, it's really about weaving together those insights. Some may be visual, some may be acoustic or thermal or schematic. When you think about what is already happening and with the distribution utilities or DER providers, folks that are connecting things or managing things on the grid, they actually have data about the network.

Our partners fly drones on their own to manage their assets, which makes sense because maybe this is happening in an area that wouldn't be visible by a car driving by on the road. But if you're a distribution utility, you need to understand what's happening to your assets. So maybe you have flown a drone. So we can use that existing information and we can draw inferences. And so to me, the thing that's been most exciting is looking at how rich some of the insights are about the grid and seeing if we can stitch together, weave together those insights to create better maps.

David Roberts

Definitely, I want to get to the insights. I just want to get clear on what is the kind of source of the raw data that's going into this. Like, what are all the sources?

Page Crahan

Our own information partners. One of my terrible jokes is, "We don't have a grid to sort of experiment with." There is no kind of like garage grid to experiment with. So, we had to, at the very beginning of this effort, partner with distribution utilities and others around the world to try to understand, "Well, what data do you have, what's missing?" And so, happy to talk about that more. But this would not work, this effort would not work without amazing partners.

David Roberts

Okay, so say, just hypothetically, like the state of Washington came to you and was like, "We want to do this. We want you to map our grid so we understand it better." And you gathered all these sources of information, gathered all the data sources that you could find. Is there a case in which you would look at that and say, "There's just like a piece missing here that we don't have. We're going to send someone out to get that." Like, do you have resources at all to go get information you lack, or are you dependent on what you can find?

Page Crahan

Well, I think we always will use what is available, and there's a question of what data is needed to make which decisions. So, we may want to have a, you know, millisecond model of every node of every grid. But if you really think about it, you probably don't need that for much of what is decided. And so, this is again the sort of "fit for purpose" information. What decision are we trying to make? There may be a section to your example where we say, "We believe this area of the network might be more fragile and we don't have great information about it. We think it actually would be valuable to gather more information."

Tapestry, we don't fly our own drones. We're not an image collection entity. But we would offer the insight to our partner and say, "Hey, we think over here you might have something you want to look into. And this is why we believe that." And that's how we think about sort of completing those gaps.

David Roberts

So, you have all this data that you're pulling together into a big comprehensive map. And when we say map, just to sort of spell it out a little bit, we're talking about where the lines, transformers, circuit boxes are, you know what I mean? Like, we're literally just mapping out where all the physical chunks of the grid are.

Page Crahan

That's exactly right. First, it's where everything is. And you listed a few components, but you can go pretty deep on the components that you might want to understand. You know, a switch or an insulator, et cetera. But you're exactly right. First is, where are these assets? The second set of questions you might ask for your map is to apply a little time series information. When was this picture taken? Is this current? A lot of components, particularly on the distribution grid, actually do change. Not every day, but relatively often. You might have a storm, you might have an upgrade or a maintenance issue.

So, the grid is dynamic, not every component changing every five minutes. But we do need to layer in a sense of time to what you're mapping. And then of course, the final piece are the physics and sort of power flow and that's kind of differential equations and those sorts of things. So when you really think about the robust "Google Maps for electrons" — the reason we use the word electrons, it's a bit provocative, right? Do you actually need to see what every electron is doing? We'll save that for a rainy day. It would be nice, right?

And sort of be aspirational, but it does bring that final kind of component of physics and harmonics, and sort of exactly what's happening from a mathematical perspective on the network.

David Roberts

Well, on that though, aren't there lots of appliances and devices, basically, that would have some effect on power flows, etc., located on private land, where you can't take a picture of it? Do you know what I mean? Where you just are sort of having to estimate what's behind the meter from what you can see in front of the meter? Is that sort of how that's working?

Page Crahan

Yeah, and again, it goes to the earlier point of what level of information do you need to make good decisions about the network? I don't think we're going to need to know when I turn my toaster oven on in the morning to make regular decisions about how we run the network. That's just not required. But we can use the grid-connected smart devices to help us understand. To help us, I will talk about utilities as well, to understand the health and safety of the network in certain areas. So, you might not need a sample from every node of every network to get a sense of what's happening on the grid, but you might need to know that, you know, some particular component of the grid is regularly seeing challenges or reliability challenges. That would be enough information as an energy provider to sort of investigate more and want to reinforce the network.

But there is no requirement, sort of behind the meter, device level information needs to be part of a fulsome picture. I think what is most exciting to us as we as Tapestry starts building out this technology is we can get a lot of information from — it doesn't need to be a perfect map to drive insights. And that's really exciting and helpful in the near term to distribution utilities, for example.

David Roberts

All right, so as far as I can tell, you've got kind of like once you have this information, there's sort of two tools that you've developed out of it. One is this what you call the GridAware tool, which is just, the way I read it on the website, it's almost meant to augment utilities. You know, distribution utilities have to go inspect things periodically and frequently do not have the resources to inspect them as often as one might like. And so, part of what you're doing here is just sort of automating and speeding up that process.

Is that a fair summary of that tool?

Page Crahan

Yes, and it is again, if you sort of step all the way back and think about what's happening in the network. We do have good information about a lot of things on the network, but this information is really siloed. So, the reason GridAware, for example, is so helpful is if I want to plan for the future of my network, I want to think about my community adopting a lot of EVs or I want to think about retiring a certain generation asset and replacing it with another generation asset. The very first thing I'll need to think about a long-term infrastructure upgrade will be to understand what my current network looks like so that I can map what those changes would be.

And today, the tools that manage the current network might not talk at all to the tools that plan for the future of the network. So that's sort of how we came about this set of products or tools that all together bring that kind of Google Maps for electrons view. But first step, where is your stuff and what state is it in? And that's what GridAware really helps with. And the place that that's most helpful is generally in the distribution network. We'll talk probably later on about our work with transmission folks. And in general, there is better, you know, higher quality information about high voltage and transmission networks.

So, they might not have that same issue from which to run their planning. But you're exactly right. The GridAware product seeks to give distribution operators richer insights about the current state of their infrastructure to augment inspection cycles, but most specifically to help them prioritize where they perform proactive maintenance for reliability, et cetera.

David Roberts

Right. And I think maybe not everyone listening appreciates the fact that you can — lots of the signs of incipient problems, let's say on a distribution grid, are visually identifiable. Like, you can look at a line and say, "That's sagging too much, that is going to turn into a problem soon." So, just having their eyes on everything makes this much easier.

Page Crahan

Well, and it's really amazing, the experts in this field — again, Product 101: go walk a mile in the shoes of someone who does this job. And early on when we were building Tapestry, we drove around with a lot of career field technicians, distribution network operators, and you hear those folks exactly what you just said. If you're driving in a car with someone who's run that network for 20 years or of their career, they can look up off the side of the road and say, "Oh gosh, I need to send a note to XYZ person because that isn't supposed to be sagging or tilting that way," or whatever it is.

And that insight is intuitive to an expert. And so, to me, this is like, "Wow, that's gold." Let's take those insights that are hard-earned, those engineering insights, and this is where computer vision can really help. That expert can train the computer vision to say anytime you see something that has those characteristics, it's sagging in this area or whatever it was that alerted the engineer or the expert. We can train a model to proactively look for those things.

David Roberts

Right. And I've often, you know, I often say on this pod that a lot of people underestimate how analog the grid still is. You know, I think they think about it the same way they kind of think about the Internet. I think people don't appreciate how many, like, you know, some technician named Bob who's been on the job for 20 years and has developed this sort of like intuitive, this sort of instinct for things. You know, the whole thing relies on Bob continuing to be out there and it's just not a particularly secure way to run a railroad.

Basically, like hoping Bob doesn't get sick or whatever.

Page Crahan

If you gave me a magic wand, and I don't know if you have one available, but if you did, the thing that —

David Roberts

Well, look around you. If I had a magic wand —

Page Crahan

Might be some other things you would start with. One of your top five would be to call me and say, "Okay, what were we going to do again about the grid?" And I think the grid topic is sort of at a fever pitch. We're reading about it in periodicals that normally wouldn't write about interconnection queues, et cetera. And so my magic wand is like: let's get everyone who's worried about the grid and the network to spend a day with Bob, go ride along with him and see what tools we have Bob using to run this equipment. Because I think it would be an incredibly sort of galvanizing reality check.

To your point, the tools that we're asking these folks to use, many of them predate the internet. And so, it's like, "Come, let's help Bob."

David Roberts

Yeah. So, then you have this. It helps a distribution utility identify problems in advance, do some preventative maintenance, save money, you know, a better alternative to waiting for something to break and then again, like waiting for something to break and then very often, like waiting for someone to call them on the telephone and tell them that the thing broke. Which again, is just like crazily primitive when you think about the kinds of things that we're doing with electricity. It's just crazy that that's still the case. So, like this will save distribution utilities money and help them maintain their grid better.

So, then what is the, what you're calling, the grid planning tool, which is less sort of like day-to-day maintenance and more long-term thinking. Who's that for and how does it work?

Page Crahan

Yeah, and a little context. So, I came to Tapestry and X from Sunrun and a few other renewable energy kind of experiences, and this notion of wanting to make faster decisions about deploying infrastructure, period. Just please, can we please speed it up?

David Roberts

Also a hot topic these days.

Page Crahan

Yeah, and before it was en vogue, we were thinking about it. Those of us who have been in the energy space for a while, we're kind of watching. Wow, this is really more laborious than it should be to evaluate how to deploy capital and capex infrastructure into the network. And so, that's what the planning tool was designed for. It cannot be the case that we are asking a decision maker to hand create a model for every possible scenario in the future: sunny year, a lot of EVs, not a lot of EVs, a drought year. For 20 years, assign probability to that and then make a recommendation.

And that was so alarming. We just talked about our friend Bob and his job, making sure that the distribution infrastructure is reliable and resilient. But Bob's got a cousin, for lack of naming our new best friends, who's sitting in a transmission planning role and is trying to assess with the number one objective of meeting energy demand with reliability. And we're asking this person to run all these scenarios and counterfactuals and then come back with an answer that would never compromise reliability. And so now here we are with a six or seven-year interconnection queue process. So the planning tool, we started working on this about five years ago because we saw interconnection requests increasing, we saw the challenge increasing, we saw the actual simulators that this industry uses to assess "Can this connect to the grid?"

You run steady-state power flow simulation, you run economic simulation, you run several simulations in parallel. And those were again designed to run in a world where we were connecting — I don't know, 10, 20, 30 things to the grid per year. And now we're using those same tools and we're evaluating thousands of connections. And so the planning tool is really designed to kind of supercharge transmission planning. And again, step one is to just evaluate the current process today. And as I always promise folks, there is not a single grid planner, transmission planner anywhere on planet Earth who comes to work saying, "I'd like to do this really slowly and painfully today."

David Roberts

Well, I mean, I think it's worth calling out and just sort of making explicit, like if your mandate is reliability, and that is the number one thing, the number one thing you're judged on, the number one thing you have to pay attention to, and you have tools that have limited information and in which you have limited confidence, all of that adds up to conservatism, basically. It just adds up, I think, to institutional, endemic conservatism about doing anything. Do you know what I mean? Like, if it has to stay reliable, your inclination is just "Let's not mess with it because we don't have the tools that will give us the confidence we need to mess with it."

Page Crahan

That's right. But if you ask that same person whose job it is to keep the lights on and keep it affordable, just imagine that I gave you perfect information, you could simulate anything. What would you do? And then they'll happily tell you, "Oh, it would be great because I could make this decision or I could run some if-then scenarios. If I connect this, then I will need to change that." And so that, in my mind, is beautiful because you say, "Well, I understand we have some work to do to get to that nirvana state as an industry, but if we could make progress on it."

And so, Tapestry started working — the first transmission planning team that we started working with was in the country of Chile several years ago — and the very first thing we did, before we even tried to augment the process in completely new ways, was just speed up what they do today. To your point, that decision maker may be resolute in using their current tools, but if it takes them two days to prepare a model and then 24 hours to run a simulation and then a week to review the results, well, if Tapestry could help them do that in a couple of hours, that whole process, wouldn't that be better? And then from there, we can sort of add new features.

David Roberts

Yep. And as with any sort of automation like this, you have to think about not just the benefits of having the existing process be faster and better, but also the sort of second-order benefit. Bob's cousin used to spend 80% of his time on laborious math calculations, now has that 80% of his time to do higher-level stuff. Right. Planning or thinking or, you know, things more suited to human minds.

Page Crahan

This is the most, you're spot on. And the folks that are, that have the role of transmission planning for a country or for an RTO or regional transmission operator, are exceptional. They're expert engineers and they don't want to be managing paperwork and assembling PDFs and like, you know, highlighting data entry issues. And so, I think we owe it to them as an industry to give them better tools so we can unlock them to do what they're experts at. Which is, you're exactly right, might include creative, wonderful solutions to keep reliability high and affordability high, costs low, were they to have the time to run those scenarios.

David Roberts

Right, right. Part of my question about this is, especially in the US context, the US RTO, how much of that slowness that exists today is a technological limitation versus bureaucratic cruft that has just kind of built up over the years. Do you know what I mean? Like, is it the case that if you give them a much better tool, that would sort of clear the way and then they would start moving much faster? Do you have any reason to believe, have you seen a success story along those lines?

Page Crahan

Yes, we have. And I don't believe that this challenge, the energy transition, the breadth of that challenge, is a "technology will solve it all." Because there are politics, policy, people, all of that. We're all in this together to figure it out. But the piece that I get excited about is when I see evidence that if we could bring better tools to bear, better technology. That is a major tailwind in sort of moving some of the other barriers, creating confidence in decision making. And Chile is a great example. You know, we worked in that network for about three years. We'll continue to grow and expand the features there.

David Roberts

But, so wait, can I, when I think about what you said earlier about there being existing sources of information scattered all over the place and if you just gather them all together, you can get a good picture of the grid? It makes total sense to me in sort of like wealthy, advanced US. Is it true in all other countries? Is it true in Chile? Like, did they have all the information you needed?

Page Crahan

It is not the case that every country has the same level of, you know, data and insights around their physical network. But what is the same everywhere is this issue of visibility on the network and what can we, Tapestry, and just basically the energy community infer. So, Chile has, we work with the transmission operators. They've got a good set of information about their network. We have not worked with their distribution utilities.

David Roberts

So this was transmission planning?

Page Crahan

This was transmission planning only in Chile, with SEN, the national transmission operator, which is a slightly different world a bit. The challenges are not totally dissimilar. But as you know, transmission and high voltage networks are different than distribution networks.

David Roberts

And Chile is, you know, legendarily very tall and skinny. So, it's very, very long transmission lines.

Page Crahan

It's a fascinating network for grid nerds.

David Roberts

Yeah. Such a weird geography, or whatever the word is. The shape of it.

Page Crahan

The shape of it, with load in the center and generation at the north and south with a lot of sun and hydro, but all the load in the center and then this long skinny radial grid and only one connection elsewhere. So, it kind of operates like an island, like super fascinating as a place to assess information. But again, I think what we see in Chile is this synthesis of information. They have a lot of exciting generation from renewable energy sources. Really growing wind and solar kind of generation community.

When I think about kind of where you're getting at with scalability, and if we go to a geography that might not have as rich of a data set as another geography — and not to be just extolling the virtues of AI when we talk about this — but sitting next to a bunch of machine learning engineers for seven years has kind of made me not an expert, but a bit of a believer in what it can do. And I think what I'm excited about is the physics of the networks that we work on, that Tapestry works on. The physics are the same everywhere in the world. The laws of physics don't change. What we see in a simulation in Chile that has certain physical conditions or scientific conditions, we will expect the same outcome everywhere in the world with the same conditions. And so this is what I get really excited about in terms of, you know, moonshot type advancements.

How can Tapestry help ensure, but also the kind of community that's working in energy transition, that each region around the world doesn't have to relearn the same lessons? If someone in Australia has seen, you know, interaction between two wind farms, can that insight just be baked into the simulations and models that Chile or US or someone else runs?

David Roberts

Well, this actually brings me to my very next question. So, you teed me up perfectly, which is I know that like, you know, the laws of physics are the same everywhere and I guess at a rudimentary level, grids are kind of the same everywhere. They're wires and transformers and stuff. But there are differences from grid to grid. And I think the probably wider differences if you go to different countries and I'm thinking of stuff just like transformers might be shaped differently or placed in a different spot on the pole or like more or less sagging might be allowed.

You know what I mean? I guess what I'm asking is, how much of the learning that you derive from a particular geography is transferable? Like, how much of it is sort of universal? Are you finding that most of what you learn applies to the next one you go look at?

Page Crahan

Yeah, I'm going to give you two data points because I wake up and think about this all the time. You know, if the ability for the Tapestry team to make an impact on planet Earth relies on us learning every geography on planet Earth one by one, I might not get there by the time I retire. So, that cannot be the case. So, let me give you a few data points that give us a little enthusiasm that there is a lot of transition ability here. 50 Hz, 60 Hz, European grid. We know that there are both visually and physically differences, although they're not infinitely different.

Right. There's sort of a few different ways that we look at things and those are knowable. What we've seen, we applied our computer vision to the distribution assets of a network here in the US, in the Midwest, and we took that same computer vision model and we applied it to some of the work we're doing in New Zealand. Again, those grids are very different. To your point, transformers, pole mounted or ground mounted, 50 Hz, 60 Hz, et cetera. And we saw that for some of the components, about an 80% accuracy is sort of off the bat.

Now, not for every component, some are different. 80% is good, but we'd like it to be better. So, I'm not saying it's solved, but I do think that gave us a strong indication that there is transferability and we'll get smarter and smarter on these different types of grids. And ideally, the dream would be you could show up to grid number 15 and say, "Yep, we've seen it all before. It's right off the shelf. This is exactly what's here and we're ready to rock." The other thing that I think is interesting, and now that we're starting to get working on the planning tool, the transmission tool in the US with PJM, we are applying the lessons from Chile, which is a very different network.

A lot of hydrology, a lot of hydro. And so, we're assessing what is transferable and interoperable. And again, this gets to sort of software development basics. No matter what grid you're operating in, you need to plug in a forecast of the generation. In Chile, that includes a really important forecast around hydrology. Yeah, in PJM, they're going to say, "Yeah, we don't need the hydrology forecast, but we need — " insert what it is that they work on. And so, what's again exciting is assessing the consistent kind of components that we can build. And then, as you go to these different geographies, you allow the reality of that network to kind of, in a modular way, plug in the part that's most important to that network.

David Roberts

So the PJM partnership, the idea, is it specifically to speed up interconnection? Like, is that the main thing or is that just one part of a larger project?

Page Crahan

It is one part. And because I think you have some grid nerds that listen, and I'll do the grid nerd. Thank you, bless them, I hope I meet all of them someday. High fives. We think about transmission planning. I mean, interconnections become a topic — when my mother knows what interconnection is, I know we've sort of gotten to a special place, but interconnection is one component, a very sort of au courant component of transmission planning. And so, we are trying Tapestry's work really everywhere. And PJM thinks about, "Can we rethink transmission planning, of which interconnection queue evaluation is of course a component?"

And PJM is the first time, to our knowledge, that artificial intelligence will be applied to really intelligently manage and optimize that fulsome transmission planning process, end to end, of which one of the things that is evaluated, of course, is interconnection queues.

David Roberts

Well, this gets back to the sort of tech versus bureaucracy question then, because when I think about the difficulties of transmission planning in the US, a tool like this could solve the problem of "Where on a physical basis do we need more energy?" Or "Where on a physical basis do we need to connect load and generation?" And that can be helpful, I'm sure. But then I think about transmission planning and I'm thinking about perverse utility financial incentives. You know, just sort of the lack of inter-regional coordination, the intense and endless debates over cost allocation, et cetera, et cetera.

Just like this isn't going to cut through that whole Gordian knot, right? I mean, this is just going to help them know things better. You still have to solve all those other problems, right?

Page Crahan

The magic wand would still be helpful. That is correct. I also think that just forward momentum helps start cutting the Gordian knot. And so, while we do need a lot of other — we as an energy community, you know, not just PJM, not just Tapestry, it's all of the above and that's a phrase we use now. But it is incentives. It is, frankly, the work you're doing, storytelling, helping communities understand what the heck's going on with the grid. Why did the lights go out? Why is my bill going up? All of that stuff is so, so important.

But what I think I am excited about is, at its foundation, giving better information to the people who make decisions about our energy is how you start. I think loosening up this Gordian knot that could be for all many different stakeholders. I think starting with PJM is so important to us because they are kind of that hub of everything here. But I just come back to, if you give more stakeholders high quality, trustworthy, visible, consistent information, they will be able to make decisions that are aligned with the energy needs of their community. Which is everyone's job, right?

Whether it's politicians, utility workers, or renewable energy developers, that's our job.

David Roberts

Well, one of the main questions that pops up out of this, and this, I got a lot of this on social media, you'll not be surprised to hear. The public discussion over AI is vexed these days. And lots of heat, not tons of light. But one of the things that has definitely come up is that the AI that people are familiar with, these large language models, have what are called hallucinations. Basically, they'll just confidently tell you the wrong answer, they'll just make stuff up, and we have backup sources of information against which we can thus identify hallucinations when AI spits them out.

And I guess everybody's first thought when they hear AI managing the grid is, "What about AI hallucinations? What if the AI just gets it wrong?" In this case, they're doing something that's so complex and multi-layered that humans can barely do it at all. So, you know, I wonder, will they spit out hallucinations and if they do, will people be able to identify them as such?

Page Crahan

Hopefully, we can talk about Bob again, our best friend from a couple of minutes ago. Yeah, but I think the first step of it — so first of all, this is the right topic to have on what is the reality of the technology, what should we consider? There are some certain upsides and there are things we need to understand. What I have been seeing in the energy industry and how we as a community are adopting this technology is the explainability and the kind of human in the loop is the only way that this technology will ever be adopted and deployed, period.

So, what Tapestry thinks about is, "How can I give Bob, remove all the junk that he spent the day doing so that all Bob's doing is like double-checking the work and confirming it or updating something?" And that is in my mind what will happen as practitioners accept this technology. Because again, back to our earlier point, under no circumstance will folks working, making decisions about the grid, compromise reliability, period. So, if they can't explain what is underlying the decision, if there's not a human looking at it and saying, "Yep, I agree." I think we're not talking about self-driving grids now, we're talking about supercharging the tools that our amazing intelligent experts use to make decisions.

David Roberts

Yeah, I think, I mean, this is one of the things people worry about, you know, is like, is AI making decisions? Is AI eventually worming its way to a point where it is actually making decisions? And of course, legally, regulatorily, morally, you can't really hold an AI accountable for those decisions. You know what I mean? Like, are you confident that this will stop short of self-driving grids, or do you think it'll get better enough that it could drive the grids well? Like, where do you see it going longish term, 10 years out?

Page Crahan

Yep, I am completely confident and excited with all of the brilliant people that are working on where does AI stop on planet Earth beyond just grid delivery? Because that's sort of one of the questions of our generation, right? How will this technology —

David Roberts

I don't know why I expect you to have the answer to that.

Page Crahan

I don't know. I would love it. I love that you have that confidence in my ability to deliver that answer. But I think what I know is, or what I believe is, that holding back from applying the technology until we answer, "50 years from now, what will AI be doing?" is not good for addressing some of the biggest challenges of humankind. If I look at some of what AI is doing today in medicine, a field that I'm not an expert in, I think, "Great, we would all say, if it can supercharge the way we do drug discovery, please do that."

And I think the same here with the grid. I mean, the reality is what we just talked about today, the folks that make decisions are comparing PDFs and I think before we talk about sentient grids or I don't know how far we want to go, we can just say, "Can we please do better so we can meet today's needs?" and let's start there and be honest and have the dialogues. I'm super excited that people like you are asking this question. I think as an industry, we will all need to figure out how we use the technology that is machine learning and AI.

But from now until then, we've got a lot of good work to do to help people make decisions today.

David Roberts

Well, actually, I forgot to ask, but what is X? Are you a business? Are you licensing this to partners? Are you selling it to them? Are you donating it as a service? Are they buying a service? What is the, what's the financial situation?

Page Crahan

So, X is — the job is to invent and launch the technologies that will build the businesses that will make the world, you know, improve the world.

David Roberts

Like an incubator, I think is the term.

Page Crahan

You're exactly right. It is an incubator. And an incubator eventually builds a business. It is not a not-for-profit or research. And that's for a reason. There are great folks that are doing research and our job is to deliver the technology to users and support a business. So, Tapestry thinks about our technology that same way. What can we build that is massively useful to address a problem? And what is the delivery mechanism to the industry that can endure and last for a real, real long time? No one on the Tapestry team wants to do a research project, get it published, and then have no one use it.

And so, for the industry, energy industry, to adopt some of this technology, we know that the products and the delivery are a big part of what we do.

David Roberts

Okay, and I'll just, I've already asked this, but I want to push on it maybe one more time. So, step one here is pulling information together and drawing insights out of that information. Insights which you then hand to a person and the person makes the decision. Maybe not 10 years out, but three years out. You know what I mean? Like, what's the next proximate step? I mean, the first, obviously, is you want to get your tool performing well and in as many hands as possible. Like, what are the, what's, like step two, three, and four here?

Page Crahan

Yep. Well, step one is exactly what you just said. How do we deliver this to more grids more quickly? Because we have, you know, we need to build as a society 80 million kilometers of grid in 15 years. That's step one. I think step two is once you've described insights turn into decisions. What I'm really keen to think about is how can we introduce predictable insights on those decisions? So it's like, I like to use the analogy because a lot of us, you know, when we type our email, it will guess the next few words in the sentence.

And to me, it's like, "How can I do that for our good friends that are working on the grid?" Not only is it the decision, but it's like, "Oh, the last time you wrote this sentence, you did this, but the last time you made this decision, you did this." And so, I think what the crawl, walk, run is, you know, insights to decisions and confidence. Decisions become familiar and predictable, and those allow us to potentially optimize the decisions, have better information. What I get, you know, I have a lot of energy nerd friends that are working in new technology and startup spaces, can those decisions start introducing some of the new technologies we want to bring to bear on the grid?

Can I talk about, you know, dynamic line rating? Can I talk about what a virtual power plant could do in this moment? So, if I'm thinking about the progression over the next couple of years, it's... I really don't want every grid on planet Earth to have to learn lessons on their own over and over again. And then number two is, I want everybody who makes decisions about this network to have, you know, at the tip of their finger, insights about the best decision, what others have done in that moment, whatever it is.

David Roberts

Not just like, "Here's what the Bob before you did," but like "Here's what Bob in another county did or another country did or..." You know what I mean? Like, there are Bobs all over the world making these decisions. So, in a sense, just sharing the heuristics is a big step.

Page Crahan

That's exactly right. And then, eventually, all of those heuristics and all of those Bobs are bringing together totally different kinds of tools and insights that maybe someone else hadn't seen. So, you do create, in the very, very long term, this sort of marketplace or management of electrons. Because all those Bobs have so many tools in their tool belt and they're so confident and comfortable with what happens when they choose that tool, they can do anything. They can make any decision they want.

David Roberts

Yeah. Maybe they could make bolder decisions or try more experiments or whatever, if they had a little bit more confidence that they knew the bounds, that they could predict the bounds of the results a little bit more precisely.

Page Crahan

That's right.

David Roberts

Might make them more adventurous.

Page Crahan

I think the Bobs want to be adventurous.

David Roberts

All right. All right. Maybe that'll be my takeaway here. Thank you so much, Page. This is really super interesting and what a fascinating job to have. What a fun place to be.

Page Crahan

It is very, very fun. Lucky us. And thank you so much for talking about one of my favorite, favorite topics. Dave, it's great to talk to you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, I’m joined by Marissa Hummon, whose team partnered with NVIDIA to tuck a credit-card-sized GPU computer with AI software into the humble electricity meter. We discuss how that edge computing digests 32,000 waveform samples per second, spots failing transformers, and orchestrates VPPs — plus the guardrails that keep it from becoming Skynet.

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Text transcript:

David Roberts

Hello everyone, this is Volts for May 16, 2025, "Embedding intelligence at the edge of the grid." I'm your host, David Roberts. One problem that we discuss frequently here on Volts is that there is a tidal wave of distributed energy devices heading for the grid out at the edge, at the distribution level. Utilities currently have very little visibility into that level, at least on any granular real-time basis.

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Many people are taken with the idea of gathering real-time data at the grid edge and using AI to analyze it in real time, providing utilities and device manufacturers with valuable insights on where and how to improve performance.

One company that has been at it for a while now is Utilidata, which has created a special version of an NVIDIA chip, an AI module specifically designed to gather and analyze real-time data on electricity flows. It's already being integrated into smart meters and used by utilities in the field.

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Today, I'm speaking with Marissa Hummon, the chief technology officer at Utilidata, about why grid-edge data is needed, how to protect its privacy, what it enables grid operators to do, and whether an AI-infused grid is going to lead to a Terminator-style dystopia.

All right, with no further ado, Marissa Hummon, welcome to Volts. Thank you so much for coming.

Marissa Hummon

Thank you, David. I'm very excited to be here.

David Roberts

Let's just begin by telling me what this thing is. I tried to sort of briefly describe it in my intro without saying anything too specific, because I don't know that I totally have my head around it. So, the best I can tell is you have these NVIDIA chips and you have sort of made a customized version of that. Is that what's going on?

Marissa Hummon

Yeah, that's correct. We've collaborated with NVIDIA to create what they call a module. So, the chip part is the silicon; the rest of it, you know, surrounding it, is the module. And that module is something that is specifically designed to be embedded in grid-edge devices. Things that sit outside, things that need a high degree of security and reliability. They need to be able to sit on the grid for, you know, 10, 15, 20 years without, you know, sending a truck out to repair it. And so, all of those kind of like physical characteristics are part of what we did with NVIDIA to bring that compute into the utility space.

David Roberts

Yeah, and this might be a futile question since I don't know anything about this stuff, but just like when I think of chips, I just think of sort of computations, you know, sort of like raw computations, and then I think of software as, like, things you tell arrays of chips to do. So the whole idea that you've packed software onto the chip itself is blowing my mind a little bit. Is that something that other people do for other reasons? Like, is that a thing?

Marissa Hummon

In the field of embedded intelligence or embedded systems, that has been around for a long time, but for the most part, people have built, you know, single-purpose chips that do like one, one thing, and they do that one thing really well and they do it really efficiently. But what we saw a need for, and NVIDIA agreed, was to have a, like a real computer that you could program and you could reprogram it later if you wanted it to look at something else or calculate something differently or take a different action. And in order to have a real computer, you need a lot more than just a chip that does one thing right. So you need an operating system and you need memory and you need storage for data, connectivity to things.

David Roberts

And all that is on the chip?

Marissa Hummon

Yeah, and it's less than the size of your credit card, and about as thin.

David Roberts

Yeah, the size involved in all this is a little bit mind-boggling. So, it's a programmable computer with sort of like your proprietary software on it, embedded on a chip?

Marissa Hummon

Yes, and proprietary software being — I think that's probably the wrong term for us. I think what we have done is build a platform on top of NVIDIA's tools. So, we incorporate all of the NVIDIA tools that allow you to utilize the GPU part of that chip efficiently. And we've just made it really easy for somebody else to build an application, manage that application, make sure it's secure, make sure the data is secure. Because all of those building blocks, the things that you were mentioning at the beginning — this device can't create a security risk for the grid, and it can't be something that the utility has to worry about servicing at a hardware level over a long period of time.

And so, we took all of those requirements and turned them into a platform that is easy to embed in a meter, a transformer, or a switch on the system.

David Roberts

Mm. So, the idea here is you will sell these chips to entities that will then program them to do specific things.

Marissa Hummon

Yeah, your use of the word programming is very similar to how we would think about an IoT system. Right. So, this idea that you could take a sensor, you could program it to look for, maybe it's a temperature sensor, and you say, "Okay, I'm going to take temperature sensor readings continually and every one hour, I want you to send me the average for the last hour." That's a program. And this is much closer to your computer. So, you have an operating system, you have some libraries and services, and then you have applications that maybe you wrote your own applications, but maybe somebody else wrote an application and said, "Hey, if you run this, you'll get this really cool thing out of it."

David Roberts

So, the analogy, or maybe it's not even an analogy, is you would sell these to people who would then put their own apps on them, basically? Apps to do specific things. And so when you say it can be embedded in any electronic device, does that mean any "any"? What is the class of devices you're targeting? It can't just be all things that are electronic.

Marissa Hummon

So, the class of devices for the electricity system that we target are ones that are measuring properties of the electricity system. The meter is measuring the voltage and current at the house or the building premise. A transformer also measures voltage and current, and then it has additional things that it's trying to control for. We're suitable for anything that is making a measurement on the grid that you would like to turn that measurement into better information.

David Roberts

And just to be clear, because one of the things I wondered about this is just measuring. So, if you're going to do something with the insights you've gained, you can't do anything with this chip. This chip is just measuring. In other words, is that...?

Marissa Hummon

No, actually, the meter is measuring and we're taking the data feed off of that meter and bringing it into the chip. Then, the chip actually computes things like: Does it see if an EV is starting to charge? And if so, was there a degradation in power quality that the utility wants to be aware of? Or has it increased the loading on the transformer near that premise above 50%? And again, the utility might want to start to take action or at least, you know, start to manage for that new event. So, it really is the piece of the meter that is going to understand what those measurements mean.

And because it has local communication and backhaul communication capabilities, it can take that information and either create the right event packet back to the grid operator's room, system operator's room, or maybe it actually does something locally in real time to make the grid more reliable, more secure.

David Roberts

Like if it measures, you know, if it's measuring an EV charging and the voltage is getting too high or something, or something's happening? Can it intervene in that and dial back the voltage? Can it do things, in other words?

Marissa Hummon

Yes, absolutely. It can do things. But what it's allowed to do is part of that programming you were talking about. Like, the utility can decide how it wants the intelligence at the edge of the grid to manage the actual grid.

David Roberts

Right. So, in theory, if a utility wanted it to, it could measure the EV charging happening, determine that something's going wrong, and it could respond with an automated routine that then dials back the amount of power going to the EV. Like, you can program it to take action in response to the things it is measuring.

Marissa Hummon

You could choose to have it do that. And I would say that might be — I think that is something that will be necessary when we have enough EVs on the grid that the utility needs to manage their charging in order to keep infrastructure up and running.

David Roberts

Yeah, I guess what I was just trying to get at is this purely to show what's going on in the grid, or is this also a tool to manage the grid and make the grid do things? That's kind of what I was trying to get at. So, you call this an AI module. You probably decided on that terminology before the current war over AI broke out. And AI sort of has gotten a bit of a — at least in my social media circles — gotten a bit of a bad reputation, mostly associated with large language models confidently telling you false things, that kind of thing.

This, I think, is what people associate AI with now. The other thing that makes people mad about calling everything AI is, and there's a lot of the nerds in my social media circle saying, "Look, what you're doing here is like advanced sensing and measurement and automated routines and analysis and telemetry software. This is just all software. This is all normal stuff. None of this deserves the term AI." So, you get people mad at you from both sides. So, maybe you could just tell us a little bit, like, what do you mean and what do you not mean when you say this thing is an AI module?

Marissa Hummon

So, it's a great question. I think you can kind of divide AI into pre-ChatGPT and post-ChatGPT. AI, at its kind of basic elements, is using data to build a model, not based necessarily on the physics that would explain the phenomena, but just letting the data speak for itself.

And what large language models did was they took that way, way further than we've seen in the past, and they built those huge inference models based on reading the Internet, for lack of a better term. And the computational infrastructure you need to build a really big language model is these graphical processing units, these very specialized transistors that can, in parallel, like in massively parallel, compute across a whole range of things. And so the reason why we call ourselves an AI module is because that module has the capability to do that. We have a CPU and a GPU.

We have that graphical processing unit that allows you to do some really computationally intense modeling. I think this is the part that I think is really interesting and was not available five years ago, is that it's really power and thermally efficient. So, like, you can get 100 or a thousand times more math problems done for the same amount of power delivered on a GPU. And that's important because — well, first of all, inside of a meter, it's a closed space. So, you've got to be really cognizant of how much heat you generate.

David Roberts

Yeah, true.

Marissa Hummon

But also, you don't want to use a lot of excess power to do something if you don't need to.

David Roberts

Yeah, what is the power draw on this relative to a normal NVIDIA chip? Like, it's also microscopic. It seems like it couldn't be that much, but I guess it adds up.

Marissa Hummon

It's actually really slim. So, the off-the-shelf version is in that kind of 10 to 15 watt range. Probably peaks out at 20 watts. We've pulled that back to right around 5 or 6 watts is what we're aiming for. And that is mostly through, like how we actually handle the operation of the computer and then a little bit of how we handle the data going into it.

David Roberts

And so, that is technology, basically, that was not around five years ago, like making things this small and this power-thrifty.

Marissa Hummon

Yes, and the credit goes to NVIDIA for this, not Utilidata. We just happened to pick the right base technology.

David Roberts

Yeah, they sort of really grabbed the AI chip thing a few years ago and kind of ran with it. And now they own the world. This is kind of my — and just tell me if this sounds right to you — this is the way I've tried to conceptualize AI: it takes a bunch of data, finds patterns in the data, uses the patterns to sort of build a model of how the data works, and then uses the model to predict the future. Predict what will happen next.

Marissa Hummon

Correct, yes.

David Roberts

And so in this case, what is the raw data?

Marissa Hummon

So, the raw data that you have at the edge of the grid is the voltage measurements and the current measurements, and it's across any of the legs that are being measured. Most of the houses in the United States have a split phase. So, it'll measure the voltage and current on all of those pieces that are coming into the house. Upstream, you'll get that full three-phase measurement. The thing about the digitized voltage and current data is that it resolves the waveform at a really high level of resolution. So, we have about 32,000 measurements per second.

And at that sampling rate, you can see things about the grid — if you analyze it correctly — that you wouldn't be able to see if you needed to bring that data back to a data center. Right. So, like, to get that kind of data back from the edge of the grid would require a massive pipeline.

David Roberts

Right. It's a lot of data, and you have to send it back to the cloud and then send it back to the meter. Presumably, that lag is too long; it will no longer matter by the time it gets back.

Marissa Hummon

And too expensive, frankly. So, having the compute right there allows us to extract things from that waveform data that we haven't been able to do in the past. So, we can see specific harmonics in the power quality that will tell the utility, it's an indicator of when other equipment is going to break down sooner. We can actually see a transformer's insulation is starting to fail. We can see things like tree branches rubbing against a line or when a power line starts to become a risk.

David Roberts

So, when you say you see tree branches rubbing on a line, what you see is several hundred thousand data points about current and voltage. And the AI is looking at those and inferring from that there must be a tree rubbing on a line somewhere.

Marissa Hummon

Yes, and at the beginning of the journey, it will not know that it's a tree branch. It will just know that something is wrong.

David Roberts

Right, right.

Marissa Hummon

And after, you know, after enough data and enough connections, then it will be able to identify that as like, "Oh, that's a tree branch and you should send a truck that can trim trees," as opposed to some other kind of truck.

David Roberts

Well, here's a question. If you're measuring like 32,000 times a second, you're measuring sub-second events, basically. And I wonder, do we have technology that can intervene in sub-second events? Do you know what I mean? To harmonize the three phases, are we capable of doing that, like on a sub-second level?

Marissa Hummon

We are, and we do it right now for transmission lines on a regular basis. It's part of the protection of power flow at the transmission level, and the measurement device there is called a PMU, a phaser measurement unit. That has about the same resolution, but it's looking for very specific faults and events in order to protect the system so the grid can take action that quickly. The other thing that I guess is important about being able to measure at that higher resolution isn't so much about how fast you could take action, but if the event itself is very, very short, but you know that it's forecasting a problem in two minutes or five minutes, you want to be able to capture that very short event that is going to become a problem.

David Roberts

I see. Well, that's sort of my other question, what are you learning from these sub-second events that we couldn't know before?

Marissa Hummon

The first kind of bulk of work is really — you asked me earlier if it's just visibility or if you can take action as well. That first piece of visibility has been an amazing adventure. So, as in, I think there's a lot of things that are happening on the grid that the utility just wasn't aware of. And now that they are, they can manage to that.

David Roberts

What we always hear about the grid is that it's this super finely tuned and balanced machine where, you know, it has to be balanced exactly. You have to be putting on exactly as much as being consumed and keep the wave phase. So, like, it sounds intuitively like it's already dialed down to the sub-second level, you know what I mean? But now you're telling me that there's all this stuff happening out there that grid operators just didn't even know was happening at all.

Marissa Hummon

Yes, and I think the example is that — okay, I'll take my neighborhood as an example. So, this is a 1950s neighborhood. The grid is about 75 years old now. It's above ground. So, it's wires strung between poles. And when they originally built this neighborhood, no one had an air conditioner and no one had an EV charger. I have both. I know all my neighbors have air conditioners, and I think probably 10 or 15% of them have an EV. And when they originally designed the equipment for this neighborhood, they anticipated some level of load growth, but they probably didn't anticipate that level of load growth, at least not uniformly across the whole area.

David Roberts

I mean, in the 1950s, there literally were not consumer devices available that could consume that level of power.

Marissa Hummon

Right. So, their design criteria fit the needs at the time. But now, the utility needs the insights into where those hotspots are. Which transformer is routinely at 75% of its capacity and peaks at 100% of its capacity, and which transformers are not, because those surrounding houses or buildings don't have as high of a load? And so, having that granular information allows the utility to invest in infrastructure upgrades where they know they need it right now and defer the ones that they can defer till later.

David Roberts

I see. Does it allow them to do anything in the moment? Do you know what I mean? Like, they can go build more capacity to handle the higher capacity, obviously. But like, if that one transformer is getting dangerously overloaded, do they have the tools to route power away from it? Do you know what I mean? My sense is that their control over the grid is much more kind of chunky and not quite as sophisticated as people have in their heads, you know what I mean?

Marissa Hummon

Yeah, I think the tools for really fine-tuning power flow, those tools have not been invested in. And frankly, if you were to invest in them, you would want to do it on the basis of where you need them most. But back to your question of, "Hey, could we turn down your EV charger because the voltage is peaking too high or the transformer load is reaching its capacity?" Today, you could do that if you had the right information and you had the right agreements with the customers.

David Roberts

That's what a VPP is, right?

Marissa Hummon

Exactly. But this would be a VPP that would be directed at managing local power flow to alleviate a congestion problem, as opposed to most VPPs, which are like a big supply/demand balance, part of the balance equation.

David Roberts

Right, but presumably, if you had the VPP, you could do either thing with it or both.

Marissa Hummon

Yes, absolutely.

David Roberts

So, let's talk about privacy a little bit, because I feel like now when people hear AI, the first thing they think of is just data mining and all this kind of stuff to like customize ads at you and things like that. So, it sounds like when I threw this out on social media, I'm like, "Oh, we're putting AI at the edge of the grid to gather data." Everybody immediately is like, "Oh, they're going to know when I turn my stove on and when I'm driving my car," and you know, their heads go to privacy invasion. It sounds like these devices could know that stuff, like by measuring current and voltage could be like, "Well, now Dave's turning a stove on."

So how do you think about privacy? Who has access to this data? Does the homeowner have ownership over the data? Who gets the data and is that kind of a little bit downstream of you? Like, what privacy mechanisms are you thinking about and building into the thing?

Marissa Hummon

So first, I'll kind of set the stage. Data privacy and data access rules are state by state, because this is governed at the state regulatory level. But I'll use California as one example because they are probably the most strict on privacy. Their rules kind of mimic what's going on in Europe. And I think the ability to do that kind of analysis at the edge of the grid gives you two things. One is that the data doesn't have to leave your premise. Right. It's on the side of your house. And then I think both the utility and the customer now have a choice as to how that data is used.

Maybe that data goes over Wi-Fi just to your phone, and you can see the information. But maybe the only thing that makes it back to the utility is events that are going to cause a grid reliability issue. And so, if you have that computation infrastructure, you can program that in. Does that make sense?

David Roberts

To your app? To return to our previous analogy, your app can have privacy built into it?

Marissa Hummon

That's right. And basic things like encryption of the data at rest, encryption of it in transit, all of that is built in from a security standpoint. But what you were asking for was, "Who will know what's going on in my house?" And I think that by having a more sophisticated computer at the edge of the grid, you can actually keep that data local if you want to. And you can, you know, your application can have specific permissions from maybe the customer or the utility about where that data goes and how it's used.

David Roberts

You could program your app that way. You could program your app to be invasive and terrible, but basically, like, the app programmers are downstream from you, I guess, is what I'm trying to get at. Like, do you have any influence over them? Are there things you can hard code to prevent them from doing? Because it's just like everybody's very paranoid about this now, about misuse of their data.

Marissa Hummon

Yeah, so what we have built in on the platform side is some basic frameworks for handling different kinds of data: This is PII (personally identifiable information), this is not. And again, the utility could use our platform to grant a particular application access to only non-PII data, or they can grant access to all of it, but what is sent back to the cloud has to be non-PII. And we could check that that data is actually non-PII. Does that make sense? The platform can provide some governance and some oversight.

David Roberts

I want to talk a little bit more about what these insights allow you to do. What do you do with this information? You said you can look for particular transformers that are getting overloaded. You can look for voltage or current flaws or fluctuations that indicate some sort of developing problem. What are some other things? Maybe talk about the EV study just as an example of what you can do with this information.

Marissa Hummon

I think one of the biggest use cases that utilities are looking for more advanced computers at the edge of the grid to handle is distributed resource management. And that's both things that produce power like batteries or solar panels and things that consume power in a variable way. So, you know, your air conditioner has some leeway in exactly when it turns on and your EV charger, you could decide, "Oh, I want to start that at 12:35 am instead of 12:30 am" and what the utility has noticed is that some of those devices, especially devices that push power back onto the grid, like solar, that the local conditions are the most important thing to solve for. And you do need that reaction time to be very fast.

So, you don't want to send the data back up to the cloud for analysis, especially if the analysis could take place locally and not have to worry about it not making it back down. Like, the analysis doesn't make it back to the device in time. So, the utility is looking at this AI compute to manage the coordination of those distributed energy resources in a highly localized and highly real-time way. There still needs to be something that coordinates across locations and over broader areas of time, so the next day or something like that.

But it's that autonomous kind of grid operations that the utility thinks having an intelligent decision-maker and orchestrator will really help them better utilize and better incorporate those resources into their grid.

David Roberts

Well, here's a question: Are distribution grid operators equipped to deal with the amount of information incoming being exponentially increased? Are they equipped to do anything with this data? Because one of the things we discuss here on Volts a lot is a bottom-up grid and distribution service operators like they have in England, just sort of like utilities dedicated to distribution systems that can do more detailed control and management. Because you know, managing them from an ISO a million miles away is... So, are there utilities ready to handle this amount of information?

Marissa Hummon

I think that, like real-time, lots of insights, I actually think that they're probably not. And maybe I should say, I don't know if their system operations room needs to. So, I think what happened or is happening on the grid is that the amount of change at the edge of the grid, new types of loads, new types of resources, that has evolved much faster. And if there was a technology that could manage that, that was complementary to, like, the system operations, the coordination of generators and loads, the coordination of the substations, I think that's the system where we're trying to get to.

And I think it's complementary to what the utility's toolbox is today. This is adding a new layer of information and controls, and hopefully, the information that comes back into the system control room is fairly sparse in terms of really only sending back the things that the system operator needs to know in order to run the whole grid. Does that make sense?

David Roberts

In other words, these local problems will be sort of diagnosed and solved locally without the utility having to hear about it at all in most cases. Like these sort of micro, little micro events, micro corrections.

Marissa Hummon

I think we might be like a couple of months, maybe a year away from that. But, yeah, that is where we're going.

David Roberts

But the idea is that eventually, the grid edge will have enough intelligence and computing power on it that it will be sort of continuously diagnosing and smoothing out these micro-fluctuations at the edge of the grid. And you're not going to need some central person pulling levers, basically. It's going to be automated; this is the shorter way of saying all that.

Marissa Hummon

Yes, I mean, imagine it's very analogous to your Internet service, which is managed by routers and distribution devices for all of those packets. And those packets have a little bit different quality than electricity. But the concept is the same, that there is automated management of the system.

David Roberts

One of the things I think is difficult for people to wrap their heads around is, I think people have it in their heads that we already have something like this. You know what I mean? I think people have it in their heads that the grid is more sophisticated than it is. But it is a little wild to me as I learn more about the grid, how kind of analog it remains even in 2025. Like, how kind of crude the information is and how much of it still involves, like, making phone calls to people and asking them to turn things off.

So, this is just all part of the march toward digitization and automation. So, you've got a meter company that is building these into its meters now? And you've got those meters installed in some numbers. What have you learned from actual field deployment of these equipped meters?

Marissa Hummon

Well, I think the first thing we learned is that you can have an AI meter. So, you know, meters traditionally are designed to accurately measure how much electricity a premise is using and then to bill that customer accurately. Right. So that is the primary purpose of it. And I think there was not skepticism, but hesitance to turn that device into multipurpose: This is not just for billing, but this is for billing and for grid operations. And so I think the first major achievement is just getting, frankly, it was us and Aclara, NVIDIA, the utility, to all work together to make sure that that specification was going to meet everybody's needs and then to build it.

David Roberts

Because it's a very basic building block for utilities. I mean, it is sort of the foundation of everything they do. So, you can understand why they're nervous about messing with it.

Marissa Hummon

That's right. And we're working on putting that meter through UL right now. I should say Claire is doing that, and we will be deploying it this summer. The devices that we have in the field today, where we've been kind of getting our insights, are actually in a meter collar or a meter adapter, which is basically a device that you can put between the meter and the socket. It has its own measurement device. It has its own communications network. And that's where we've been embedding Karman as a way to test or trial. And that's because we didn't want to get in the middle of the billing system right away.

David Roberts

Why not just stick with that? Because you could put a collar on any meter. You know, you could just go stick your collars on all the meters in the world. Now, why build a custom meter?

Marissa Hummon

So, when you roll out meters with Karman in them, it is a little bit cheaper than putting — actually, it's probably a lot cheaper than putting a collar behind it. And then it's an extra piece of equipment that the utility wants to not worry about. So, I think that it's a great way for utilities to get comfortable with the technology, to understand how they want to use it, and to write their specification into their next meter RFP. The meter collar is a good way to do that. And then, I think it makes a ton of sense to not repeat the metrology, not repeat the communication network, and instead just add the right computer into the meter.

David Roberts

Yeah, I mean, there is a certain logic to putting all this stuff in the meter. Like, it is the one piece of equipment that literally every building has; all the electricity goes through it. Like, you know, it is a pretty obvious gateway for putting a lot of intelligence in. Although, I'm sure utility executives everywhere are listening to this and cringing in fear. But let's talk about, I mean, one of the things that actually brought this all to my attention is the sort of application of this same model. So the model here is that on the distribution grid, you've got all these little micro-events and flaws and fluctuations that could be smoothed out to make a more efficient grid that would do the same amount of work with less energy input, basically.

And your idea that they originally emailed me about is that the same basic structural problem is replicated in data centers. Tell me a little bit what you mean by that.

Marissa Hummon

So, the design for power delivery in a data center is very akin to how the distribution system is designed. They are looking for reliability and risk management. The traditional data center, especially when we weren't power constrained for them, delivered 2x what they anticipated using. They would have a full failover. If they lost one power source, they could fall over entirely to another power source.

David Roberts

And when you say 2x, you mean the pipe. Basically, the electricity capacity reaching that building is 2x what they typically use on a day-to-day basis.

Marissa Hummon

Yeah, so if it was a 50-megawatt data center, 100 megawatts would be delivered. But then, and actually, I'm not even sure what a 50-megawatt data center means exactly. Because in addition to that kind of like site-level reliability, there's also over-provisioning of power for every server rack row. And that is because of the anticipation of power spikes at full capacity utilization of the servers.

David Roberts

So basically, yet another system — I end up discussing these on almost every Volts episode, it seems — yet another system that's basically built to the peak, built to satisfy the peak. In this case, the peak being demand for compute which has these weird spikes. Not really — I mean maybe I'm wrong about this, but you know, when you look at like electricity demand at a distribution area, there's variation, but there's patterns day to day, month to month, it's semi-predictable. Is that true in data centers? Like, is there any rhyme or reason to the spikes in demand for data centers or is it just like anything could happen anytime?

Marissa Hummon

No, no, I think there is, there are patterns and I think there are qualities you can predict. And we've started to do a little bit of that with a data center kind of POC. And you're right that when we build power delivery for that very worst-case scenario, we're leaving a lot of opportunity on the table, basically an opportunity to use that excess power for additional computation. What I think the parallel that we've seen between the distribution system and data centers is that it is the lack of visibility and the lack of controls that are preventing somebody from changing the way their data center could be operated.

Now, there's probably also like a bunch of resistance to change and fear of risk. But when you get into kind of that server level or rack level architecture, the crossover from like power delivery to power utilization is not well coordinated. So, the power that comes into the power distribution unit and then the way that power is distributed amongst the servers, those are not well coordinated and they could be. And we could save quite a bit of power that is wasted right now.

David Roberts

So, the long and short of this is a lot of the power that is going to current data centers is being wasted by inefficient distribution. Basically, maybe the way to think of it is like inside the data center there is another distribution system, another electrical distribution system that basically replicates the flaws of the larger distribution system that it's embedded in and thus could have the same types of solutions, basically.

Marissa Hummon

Absolutely, yeah.

David Roberts

And so the idea is you would put these AI-enabled chips all throughout the data center and it would just read the power demands of the servers more closely, distribute it more accurately, like what exactly would it be doing in the data center?

Marissa Hummon

So, the first thing is, you do want to pair the measurement of what's going on, so that is the measurement of power flow, with the compute. Because you do want to immediately take that high-resolution information, turn it into a forecast. And that's that AI model building that we can do on chip that we can't do on a regular computer. So, we'll build that model, you know, the inference model of like, "What's coming in the next 2 seconds, 5 seconds, 5 minutes?" And then yes, connecting that up to the control system to change the way the data center is operating in order to get more compute for the same amount of power delivered to the site.

And that's kind of the metric that is used for efficiency, like site delivered power and the amount of compute you could get out of that.

David Roberts

Right. So, give us some sense of the magnitude here. You've got your 50-megawatt data center, 100-megawatt pipe coming to it. Could you, through your clever use of AI, cut that down to like a 75-megawatt pipe, could you cut it down to like a 51-megawatt pipe? You know what I mean? How efficient is efficient? How much energy could we save from these data centers?

Marissa Hummon

We're estimating that we could increase compute utilization at the rack level by about 30%.

David Roberts

Interesting. That's big. That's a big chunk.

Marissa Hummon

It's a big jump. And that one is very low risk. Taking away the redundancy of power delivery is a different calculation. And I think that one, visibility and forecasting come into that, but we're not currently trying to tackle that. I've seen some universities put together models and demonstrations that they think that that could also come down by about what you were saying, like 25%. So instead of delivering 100 megawatts, they could deliver 75. And then there's basically a risk calculation going on about how you manage the compute load to that new failover capacity.

David Roberts

Right. But basically, if your system is smarter, you're going to end up needing less redundancy. It's sort of the take-home there. And is that like, are you doing that in a data center currently? Like, are you getting data back about performance? Like, are you seeing this at work in any data centers yet?

Marissa Hummon

So, we have a proof of concept running on our own NVIDIA servers that are the rack type that would go in a data center. But we're not fully deployed in a data center and that probably won't happen until 2026. We're working through the research phase. This is very new compared to where our product that's going out on the grid is fully commercialized, productized, ready today.

David Roberts

Right. Let me ask you another, what is probably another dumb and naive question about AI. So, say I have this AI and I put it to work in this data center. It is learning, as you say, so like its performance will improve over time as it learns the details of how the servers work and how the power is distributed, etc. And I've just always wondered about an AI, will it get better and better and better forever, amen? Is there some asymptote we're reaching of like perfect reliability that it can't get any better than? Or is that just like different from system to system?

You know what I mean? This whole thing about their learning, is there an upper bound on the learning or how much better can they get? Do they just keep getting better forever or is there like a ceiling?

Marissa Hummon

So, there are two, in my mind, factors that go into that. One is the quality of the data you're training on. So, we'll take the data center analogy. Let's say this is deployed on the power flow, the distribution of power inside of a data center. That's a fairly limited set of data. I mean, you're probably going to see the full breadth of power flow characteristics in a three to six-month timeframe. And so, that will probably limit how advanced that piece can happen. And then, the other side of it is, what's the size of the computation that can put that model together?

And this is where I think we had that kind of big breakthrough in language models because we really increased the amount of compute that we could give it.

David Roberts

So, there's the data and the compute. Would there be any way? Obviously, the chip in the data center is learning about that data center that it's in. But presumably, there would be something like shared learning across data centers, patterns that hold across data centers that could inform the operation in a particular data center. Do these things have ways of sharing their learning and knowledge?

Marissa Hummon

In theory, absolutely. And we can definitely transfer learnings without transferring private information. And I think we'll see how that plays out in data centers because I think —

David Roberts

I'm sure they're very paranoid about any information leaving the data center.

Marissa Hummon

Yeah, I think any sort of operational devices are entirely isolated inside of the data center. They're not connected to the internet.

David Roberts

But maybe to take it back out of the data center, just in normal distribution systems, like presumably if you have these AIs, you know, they're learning all the granular details of like Dubuque and then, you know, Tacoma and etcetera, there's going to be commonalities and patterns. Are those able to share or are distribution utilities also paranoid about information?

Marissa Hummon

Yeah. So, today our load forecasting algorithm builds the model on the device, shares model parameters to the cloud. So, that's very obscured from the actual data that it used to get those model parameters. And we use those model parameters across devices to build a better load forecasting model, and then we push that model back out to the edge. And that sequence is a way to share insights and share learnings without sharing the actual raw data.

David Roberts

And my other final, dumb, naive question about AI is, you know, everybody's favorite sci-fi vision of AI is, it eventually AI no longer needs you running it because it has in a sense learned enough to start self-improving. Is that possible here? I wonder, at some point, is the level of data and information they're getting going to be so granular and so complex and so voluminous that it's going to be a little bit of a black box to us that we're just going to have to trust the insights that come out of it?

And I think that's kind of what makes people nervous. Do you know what I mean? Like, does that apply here, or am I just rambling at you?

Marissa Hummon

I think that concept is really far in the future compared to where we're at today.

David Roberts

I keep hearing podcasts telling me it's like a couple of months away.

Marissa Hummon

Well, I can tell you, on the grid, it's not a couple of months away. There's still a lot of humans and paperwork in the loop, so don't worry there. And really, it comes down to — you put guardrails around what you're allowing, what are the decision parameters that this device has to stay within? So, as humans, we have full control over how we see this implemented.

David Roberts

For now, okay, final question. You've built this Grid Edge Advisory Board. I spend so much time on Volts on this grid edge stuff. Like to me, it's just the most exciting thing going on, the coolest thing going on. And I'm just sort of curious — it's another difficult question to answer — but I'm just sort of curious like what the vibe is among grid edge people. Like, I guess one question is because, as you notice, I keep raising privacy because I did this pod with Cory Doctorow about, I don't know if you followed his work about enshittification of tech platforms. Basically, about the way tech platforms and modern life kind of capture customers by promising them all sorts of great service and then once they're captured, start degrading the service to the users in favor of serving advertisers or corporate users.

And then, you know, the whole nine yards. So, like I've become nervous about tech platforms and I've become very nervous about them — you know, it's one thing if it traps you on a social media site, but it's another thing when these things are like controlling your home and your hot water heater and your furnace. It seems to me like the possible consequences of platform capture and abuse are much worse when we get into this area. And I just want someone to tell me that the people who are coming together and talking about this stuff are appropriately sensitive to that danger and the possibility of consumer blowback if they're not sufficiently sensitive to it.

Marissa Hummon

So, these are utilities and their risk aversion is very high, and they're regulated.

David Roberts

It's also true.

Marissa Hummon

And they can't sell your data to an advertiser. They are very limited in what they're allowed to do with your data in order to serve you better, you know, by either making the grid more efficient or providing you directly with services. But there's a huge amount of governance over the utility and then us as vendors trying to meet that governance requirements. And then when we get those utility execs in a room to talk about AI on the grid, of course, that is top of mind for them is the security, safety. And then you know, obviously, like this has to pose no threat to the reliability of this system.

So, we spend a lot of time talking about that. And the utilities that are there, they're there because they see the possibility of serving their customers better if they had better tools.

David Roberts

This is the. My other question is about the Grid Edge Advisory Board. Everybody's sort of on this, has mixed feelings about utilities. Everybody involved in this area has mixed feelings about utilities. I'm just sort of curious, like in your experience, when you're talking to utilities about the general subject of just sort of like grid edge computing, grid edge energy, grid edge energy management, all this stuff. My sense, at least in the early years, is that utilities were very slow, very averse, very... they didn't like distributed energy, it takes away from their revenue model, et cetera, et cetera.

Are they catching on to the sort of scale of what's possible? Do they view it with dread or are some of them actually like excited about doing cool stuff with it?

Marissa Hummon

I agree with you that two years ago, if you'd asked me that question, I would have said that the utility still has a lot of questions and needs a lot of convincing. If you walked the DTEC floor this year, that's the trade show. The idea that AI is inevitably going to be part of grid operations was highly apparent. I think it's not so much as to whether or not they believe it's the right technology for the edge of the grid or believe that it's going to help them. I think they've concluded that it will and now they're working on all of those things, governance and implementation and execution of that strategy, and obviously coming up with the right benefit-cost analysis to justify the investment in that technology.

I think the other shift that happened is distributed resources were initially seen as, at least the ones that produced power, as maybe a threat to the utility. But I think as that adoption of that has occurred, it has also become apparent that the grid is essential. Like, even if you want to be off-grid, you still want to be connected to the grid. The grid is the backbone of the country.

David Roberts

Well, these entities were on a self-identified death spiral just a few years ago. And now we're like, "Guess what, not only are you not dying, you're like the hot center of literally everything in the world now." Like, "You're the hot molten core of tech advancement in the world," which is like vertiginous and odd in a different way, I imagine, for utilities. What a decade for utilities, right?

Marissa Hummon

Absolutely.

David Roberts

So, they're clued in on this and active. Yeah, I've just been wondering about that. Also, here's a final question, which maybe is outside of your area of expertise, but similarly about big institutions. One of my theories is sort of that the hyperscalers, these big data center people, are just going to be a forcing agent to drive all kinds of change. That has been sort of in the works for a while, but now all of a sudden, like there's big moneyed corporate people here demanding this stuff. And as I've said many times on this pod, the logic to me is they need energy fast.

That is their number one thing now, right? It used to be like energy, siting, water, whatever. Now it's just like energy, energy, energy. And it's just inexorable in the logic of the power system that the slowest way to get new power is a nuclear plant. You know, the next slowest is gas, then wind, then solar. But if you really want it fast, the fastest way to get it is by exploiting the spare unused capacity that we already have lying around everywhere. And that is the kind of thing that you're doing on the grid edge. I'm sort of curious, I've been wondering, are the hyperscalers going to eventually realize that, eventually realize that the fastest way they can get power is through the VPP kind of stuff? And your conversations with them, are you getting a sense of that?

Marissa Hummon

I think the answer is definitely yes. There will come a point where they have either to wait a long time for a new interconnection or they can take an existing site and get more compute out of it. The investment in the technology to get more compute out of it is going to be pennies compared to what they can actually make on it. And so, I think it's going to be a no-brainer for them. And I really liked your description of the cheapest and fastest capacity is the capacity that is already there and is just not being utilized.

David Roberts

Yeah, I feel like that logic is inexorable and eventually all the hyperscalers are going to show up demanding VPPs and AI-enabled computing at the edge of the grid and all this stuff that I'm so into. Eventually, they're going to realize this is our golden goose here. This is where the most capacity fastest can be found. Fun and exciting stuff, Marissa, thank you for coming on and talking through it. I'm sorry if my questions were dumb. I always feel like I'm asking dumb questions about AI, but I guess probably everybody feels like that.

Marissa Hummon

There are no dumb questions about AI.

David Roberts

All right, thanks for taking the time.

Marissa Hummon

Thank you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

The hype about hydrogen is back with a vengeance, and thus, so is Joe Romm, who just issued a revised and updated version of his 2003 book The Hype About Hydrogen. We discuss the persistent economic and technical hurdles that make widespread hydrogen adoption unrealistic, explain why most applications are better served by direct electrification, and scrutinize the massive investments and motivations behind the current hydrogen push.

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Text transcript:

David Roberts

Hello, everyone. This is Volts for May 14, 2025, "Taming the Hydrogen Hype." I'm your host, David Roberts. The idea that hydrogen might serve as the foundation for a new energy system dates back to the 1800s, long before anyone was worried about climate change, and hydrogen hype has come and gone in cycles and waves ever since. You might recall that George W. Bush took it up in the early 2000s, promising hydrogen cars.

In the last five years, the hype has returned with a vengeance. Governments and private investors are pouring resources into the promise of clean hydrogen. Virtually every major oil and gas company has some kind of hydrogen strategy. The Inflation Reduction Act directed hundreds of billions of dollars in subsidies to it.

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Despite all that, the fundamental problems facing hydrogen as an energy carrier — its low volumetric density, difficulties transporting and storing it, its persistently high costs — have not gone away and have not been solved. That is why hydrogen, though it is quite commonly used as a chemical or industrial feedstock, remains, after a century of hopes and dreams, virtually invisible in the energy system.

One early voice calling foul on the hydrogen hype was famed climate blogger, author, and researcher Joe Romm, who wrote a book in 2003 called The Hype About Hydrogen. Seeing the hype return, Romm has returned to the book, substantially rewriting and expanding it for a revised edition that came out on Earth Day this year. I'm excited to dig into it with him and talk about realistic expectations for hydrogen.

With no further ado, Joe Romm, welcome back to Volts. Thanks for coming.

Joe Romm

Oh, well, thanks for having me back, Dave.

David Roberts

Let's talk hydrogen. First, just tell me, like, what is it that sort of tripped it for you, where you finally said, "I gotta go back and bulk this book up." Why return to this book at this particular moment?

Joe Romm

Well, it's like a vampire. It's hard to kill. 30 years ago, I was helping to oversee the billion-dollar Office of Energy Efficiency and Renewable Energy at the Department of Energy. And one of the things that we did was the hydrogen program and the fuel cell program, and there were some advances at the time, so I was supportive of increasing the budget. As you mentioned, about 10 years later, George Bush gave his famous speech, "That a child born today," you know, "their first car, would run on hydrogen and it would just emit water."

And I think that was like a $1.3 billion program. It was a lot of money at the time. It's sort of like Dr. Evil. But then, I proposed to Island Press that I would do a primer, because it wasn't until I started writing that and talking to people and reading the literature and doing my own calculations that I realized that there were multiple problems that were going to make it unlikely that hydrogen was going to be able to compete with electricity. And the book came out then, as you said, and I gave a lot of talks and wrote papers and then moved on to the rest of my life and all of the other things, including the real solutions.

And 20 years ago, I don't think we would have imagined all of the amazing advances in electric cars, electric batteries, electric heat pumps.

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David Roberts

I would never have allowed myself to be so optimistic. Never.

Joe Romm

Yeah, I mean, I knew when we were at the DOE that eventually — and solar and wind, I should have mentioned, obviously — we knew that those would eventually be able to come down a learning curve. And so today, hydrogen makes less sense than it did 20 years ago, mostly because the competition has gotten so much better and hydrogen hasn't. Then, a year ago, this guy named Neal on LinkedIn wrote a review of my 2004 book and said, "Oh, well, this is a pretty good book. It could have been written almost today. And, you know, this guy was right that, you know, electric cars were going to beat hydrogen cars."

And I read that and I was like, "Oh, well, but it's come back." And before, I was worried about spending a billion or two. Now, as you say, it's hundreds of billions and everywhere in the world.

David Roberts

Yeah, every country. You know, I do these little pods on different countries here and there, just kind of parachuting in, seeing what's going on. Almost all of them, some part of the government is like, "This is going to be our part of the energy transition." You know, like, "This is our niche. We're going to do the hydrogen thing." And I'm like, "Well, everybody's going after that, and nobody's succeeding. Like, why is everybody so excited?"

Joe Romm

And so, yeah, I got motivated to rewrite the book. Originally, I thought I was just going to put an appendix on the end saying, "I told you so." But I ended up rewriting large parts of the book because people started talking about making hydrogen from nuclear power, or they started talking about the e-fuels, where you would take direct air capture CO2 and combine it with hydrogen from electrolyzed water that was made with renewables, and then run it through a Fischer-Tropsch plant and turn it into e-kerosene and run airplanes on it.

David Roberts

We're going to get to that. Joe, quit jumping ahead.

Joe Romm

No, I'm sorry, it's just so. I ended up writing about all these other things too, like direct air capture and carbon capture and storage. So anyway, now the interesting thing is, over the course of the last nine months when I was writing the book, a lot of sobering stuff came out. And it became clear that some of the problems that I and others had identified long ago were not just challenges, but remained quite unsolved and might be intractable, not the least of which is, "Can you make green hydrogen from renewables affordably?" And because of the events of the supply chain problem and inflation — originally, a lot of people had predicted that electrolyzers, right, electrolyzers are the key component.

You run electricity into an electrolyzer and it will split water back into oxygen and hydrogen. And I think people, maybe when they were in high school chemistry or physics, probably placed two electrodes in water and noticed that at each end of them bubbled up: one oxygen, one hydrogen. And if you captured the hydrogen, you could ignite it. But they're not terribly efficient.

David Roberts

I want to start back a few steps. First, let's start by talking about what hydrogen is used for today. What is the current hydrogen market? How much clean hydrogen would it take to replace just what we're doing now? You know, then we can go on to expanded uses. But let's just talk about sort of like, what is the situation with hydrogen now?

Joe Romm

Excellent. Yes, I do get ahead of myself. So, hydrogen, there's about 100 million tons of hydrogen used globally. The main use, number one use, I think, is making ammonia for ammonia fertilizer. Ammonia is NH3, one nitrogen, three hydrogen. So we have to do nitrogen fixation, that's what fertilizers are a big part of. So that's one of the biggest uses. The other big use is sticking hydrogen onto petrochemicals. When you're refining oil, if you add hydrogen, you can make the gasoline cleaner because hydrogen burns cleanly. And I should say, if you want to get to very basics, hydrocarbons: coal, oil, and gas, they're made up of hydrogen and carbon.

When you burn the carbon, it oxidizes, gives off heat, and turns into CO2, a greenhouse gas. And when you burn the hydrogen, it turns into water and gives off heat. So it's the clean part of the combustion. So we use the hydrogen sometimes to make gasoline cleaner, reformulated gasoline, and hydrogenation of petroleum. And we also use it for other things like methanol.

David Roberts

So, most of those are chemical feedstocks, basically, like using it as a chemical additive in an industrial process. In terms of the things people talk about doing with it — so this is a fundamental distinction that we need to make upfront, the two separate uses of hydrogen. One is as an element in an industrial process, as a feedstock, a raw material.

And the other is as an energy carrier, as a way of basically taking energy from one place to another. All the excitement is around hydrogen as an energy carrier. But today, in the world, is hydrogen used that way in any substantial way anywhere?

Joe Romm

No. And in fact, while I was doing the book in the fall, the International Energy Agency came out and said, and there's a quote I use in the book, "That under 0.1% of global hydrogen is used for these advanced purposes." So, yes, it is a feedstock. And in that sense, hydrogen is actually not a solution to climate change. It's currently a problem. Virtually all hydrogen is made from fossil fuels, principally natural gas, which is mostly methane, which is to say one carbon, CH4, one carbon and four hydrogens. And so that's responsible for 2% of global greenhouse gas emissions right now.

David Roberts

Right. So, today, hydrogen is made from fossil fuels and thus is responsible for a lot of greenhouse gases in its production. So, give us some sense of the scale of just scaling up clean hydrogen enough to replace that hydrogen, the raw material hydrogen.

Joe Romm

Absolutely. It's quite a stunning number. If you were to replace just the 100 million tons of hydrogen used as a chemical feedstock around the world with green hydrogen, which is to say, we take renewables, we run it through an electrolyzer, we split water, we end up with pollution-free hydrogen. That would require the equivalent in renewable electricity of the entire US electric grid, which is to say everything, nuclear plants, coal, oil, plus all the renewables. It's funny because someone read a draft of that book, said, "No, you made a mistake, you must mean it's just the renewables on the US grid."

No, no, it's the whole grid. So, yes, and this is one of the points I make in the book: It would be a mammoth undertaking, I think we could agree, just to do that.

David Roberts

Yes, yes. And that has to be done. I mean, sooner or later that has to be done. So there's reason — separate from all these energy carrier dreams — there's reasons to work on electrolyzing and try to drive down the cost, etcetera, because we are going to need a lot of green hydrogen just to replace dirty hydrogen in current uses.

Joe Romm

Right. And I'm going to leap on your phrase "sooner or later" because one of the points of the book, one of the points, hopefully in this conversation, is that some things are harder and more expensive to do and there tend to be niche things and we do have to do them sooner or later. But there's a lot of "sooner" stuff that is easier, which is, and this is a key point in the book, we don't have an infinite supply of renewable energy.

David Roberts

Not yet.

Joe Romm

And so, using renewable energy to make hydrogen and solve a hydrogen problem is a lot less efficient than simply using the renewable energy directly to replace fossil fuels on the grid.

David Roberts

You mean efficient in terms of greenhouse gas reductions?

Joe Romm

In terms of efficiency and cost, because you don't have to buy the electrolyzer and you don't have to throw away the 30 plus percent of energy you have to do for the electrolysis. So, if I said to you, "I want to reduce 100 million tons of CO2 cost effectively," what would be the best way to use my money and my renewables? My thing would be, you should replace fossil fuel power plants and then you should also use renewable electricity directly to power electric vehicles that replace gasoline cars or to power electric heat pumps to replace gas boilers.

Those would get you a lot more CO2 for a lot less money.

David Roberts

Well, one of the responses might be, and this is sort of kind of been my take on hydrogen for a while, which is like, "You know, why not throw a few billion at it while we're doing everything else, if it makes people happy, if it brings new constituencies along?" But there are real questions about opportunity costs. There are real questions, like if you're throwing money at that, that's money you're not throwing at something else. And so there are trade-offs we have to consider.

Joe Romm

Could I comment on that? So, there are two points. One is the opportunity cost. And when you say "throw billions," as you know, I ran a billion-dollar research, development, and demonstration program. So, I'm a very big fan of that and I agree: Let's do R&D. You know, the Inflation Reduction Act is deployment money. That's the key thing. The money that we're talking about in the world that totals hundreds of billions of dollars is "We're gonna build some steel plants that run on green hydrogen, we're going to build pipelines." "We're gonna try to make hydrogen in Namibia and somehow ship it up to Germany." Which Bloomberg did a story on and the German Government still seriously talks about.

So, you know, I don't want to say it's crazy stuff, but it's just way disproportionate to the plausibility. Let's solve some of the basic problems. And I'll throw out one more thing which can't be avoided. It's something we didn't know 20 years ago, which is when this great interest in hydrogen became clear to everyone. Several years ago, scientists used their better understanding of atmospheric chemistry to ask the question, "What is the impact of hydrogen leaks and emissions on the warming of the planet?" Because although hydrogen is not a direct greenhouse gas, it is an indirect greenhouse gas.

Because releasing hydrogen into the atmosphere changes the chemistry. And the number one thing it does is increase the lifetime and therefore duration and quantity of methane in the atmosphere. So, the global warming potential of hydrogen over a 20-year period is around 35 times that of CO2. And methane is already 80 times CO2. That's why we're all obsessed with these short-lived climate forcers I'm sure you've talked about.

David Roberts

So, hydrogen is in that bucket of short-lived climate forcers? Because the promise, you know, around methane too, the promise is like as we're working on the long-term gases, CO2, we can avert some short-term warming quickly by reducing these short-term forcing gases like methane. And so, hydrogen is one of those. So, it's again not innocent to build a hydrogen — it's not just some idle sort of like demonstration exercise. You are risking making climate change worse. You're risking, you know, exacerbating climate change.

Joe Romm

Especially because hydrogen is the leakiest gas known to humankind. It's tiny, it is very hard to detect those leaks. And we already see significant leaks in the natural gas system of methane, which has, as you know, and I'm sure you've done pods on them, you know, the leakage of methane because of its huge global warming potential over 20 years, changes the environmental benefit of methane immensely. And so, if you imagine now let's throw in a leakier gas and imagine scaling that up in volume. It's just like, well then you have to ask, is the benefit really that overwhelming to justify this kind of risk?

And the answer is no.

David Roberts

Yeah, it's amazing how much of the hydrogen dialogue these days is like tons of short-term risks and costs, all with this sort of Valhalla in the far distance that you can barely see shimmering in the distance. It's worth being suspicious about. So before we talk about the various ways of making hydrogen, which I want to get to, let's just talk about what you do when you have it. You have some hydrogen. Why is it so difficult to use and manage as an energy carrier? Let's just talk about some of the intrinsic qualities of hydrogen itself that make it difficult for that purpose.

Joe Romm

Well, sometimes they say it's got the highest energy density per unit weight, which is true, but because it's so diffuse, you have to add a lot of weight to move it around, right? If you put them in, you know, 10,000 pounds per square inch canisters, right. Most of what you're lugging around is the canister.

David Roberts

You can't, this is crucial, you can't transport it in large quantities as is because it's so diffuse, because it's gaseous. So, you have to compress it before you transport it and there is additional energy and additional weight.

Joe Romm

Or, you have to liquefy it, which is even more popular because then it gets to about half the density of water. But unfortunately, liquefying hydrogen takes you down to about below negative 400 Fahrenheit, and it uses about 40% of the energy in the hydrogen simply to liquefy it. So, you lose massive amounts of efficiency. And you get this other problem, which is it's hard to keep at that temperature. If you, for instance, want to truck it around or put it in a truck as a fuel, it's going to slosh around and it will start to evaporate and it will create internal pressure, which you have to get rid of, generally by venting.

So, that boil-off and venting problem: not solved yet.

David Roberts

And that's venting hydrogen into the atmosphere.

Joe Romm

And we're talking a lot. So, if you wanted to have these trucks, lots of liquid hydrogen trucks, as some people propose to fuel whatever it is you want, ships, planes, long-distance trucks, you're going to be venting hydrogen into the air and it could be 10% of the hydrogen that you have. It's not a trivial matter.

David Roberts

What about pipelines? Is that why everybody's converging on pipelines? What is the energetic requirement for pipeline transport?

Joe Romm

Pipelines are by far the best. That is the desired end state. And you need special pipelines because hydrogen will, in fact, embrittle typical steel. So, you've got to use specially coated pipelines. You cannot run this through a natural gas pipeline.

David Roberts

So, let's put an exclamation point on that. You cannot use existing pipes for this. It would entail building a new set of pipes and pipelines.

Joe Romm

Yes, and the other key issue here, and this is where you move into the realm — and a lot of what I focus on in the book isn't so much "Is something theoretically doable?" It's "Is it practical and scalable in the real world?" Because in order to justify the financing of a pipeline, you need a long-term offtake agreement. You need a long-term guarantee of a supply at a fixed price. And here's your problem, and this is the famous chicken and egg problem which I wrote about 20 years ago and it affects many other industries.

But you aren't going to get someone to make the investment in the hydrogen production and pipeline side, which could cost tens of billions, until someone has shown that they have a successful hydrogen-using technology that's going to compete in the marketplace and can make a guaranteed offtake agreement for 10 or more years. On the other hand, no one's going to build the factories to build this, let's say, hydrogen-consuming vehicle, a fuel cell vehicle, unless they know there's a guaranteed producer of low carbon, preferably green hydrogen, at a low cost. So someone has to gamble, someone has to take a large gamble.

David Roberts

Our governments have to come in with sort of like brute force money, which appears to be what a lot of them are doing. Like a lot of governments are trying to get past precisely this chicken and egg problem just by dumping hundreds of millions of dollars on these things to get them started.

Joe Romm

And unfortunately for governments, these things are expensive and they have taxpayers and they can't make any guarantees on either end. They can't guarantee that if you build this new steel plant for several billion dollars, that somebody could give green hydrogen at a price that anybody would be interested in. And you can't tell the green hydrogen producers, "I can guarantee you 10 years of sales needed to justify this." And so the result has been, for instance, in this country, after 20 years of trying, there are about 56 hydrogen fueling stations for cars, one of which is in Hawaii and the rest are in California.

And because they were promised a lot more sales in order to justify the sales of hydrogen — in other words, the utilization rate of these fueling stations was over-promised. No one built all those cars. And that's why in the last few years, the price of hydrogen in the state tripled, making people, as you can imagine, the owners of these cars very worried because their cars now would cost 10 times as much to fuel.

David Roberts

I don't know. I feel like if you bought a hydrogen car, your life has been nothing but regrets ever since for all kinds of reasons.

Joe Romm

Well, absolutely.

David Roberts

Well, let's talk about, I mean, what people really want to hear here, let's get nuts and bolts about the various uses of hydrogen and let's try to do this relatively quickly because there's a lot to go through. So, I'm going to start at the kind of the dumb end: Cars, I think, are the dumbest. And I know, like your original version of this book, spent a lot of time on the car question because it was a live question back then.

Joe Romm

Still is.

David Roberts

Ah, is it?

Joe Romm

There are still major auto companies introducing cars into the US market that are hydro. I'm not going to say — you and I think it's ridiculous, but it's still happening. It's not the big delusion it used to be, but it is still happening.

David Roberts

I feel like we don't even need to spend much time on why hydrogen cars are delusional. Just like you have to build a giant infrastructure, you have to hyper-pressurize the hydrogen, which makes it dangerous and difficult to move around and dangerous in the car. On and on and on. And the evidence that that's never going to happen is just look, they tried and tried and it didn't happen. It's not happening. EVs are stomping all over the place.

Joe Romm

A thousand to one sales.

David Roberts

A thousand to one sales. So, I think cars we can check off.

Joe Romm

Yes.

David Roberts

Next, dumbest is heating buildings, mixing hydrogen in with natural gas to moderately lower the carbon intensity of the natural gas in pipelines that are used for heating and cooling buildings. I think it was Michael Liebreich who compared this to pouring champagne in your municipal water supply. But this is, to me, if anything, dumber than cars.

Joe Romm

I was going to say it's not fair to —

David Roberts

But alive. More alive than the cars, as far as I can tell. Like, they're actually doing large-scale tests of this, I think, in the UK.

Joe Romm

Right. And the reason it's more alive is because it's more straightforward and because it's an existential issue if you are a gas distributor. Because if the future is, in fact, all carbon-free electricity producing, heating people's homes with better and better electric heat pumps, then where's the growth market, let alone the saving the existing market for the natural gas distribution system? But there are now, as I'm sure you may know, literally 50 studies, at least 50 published studies on why this idea makes no sense.

David Roberts

Yeah, it's funny. Like every new study that comes out, researchers are getting, you can sort of see them losing their patience. The conclusions get more strident and unequivocal. Every time I see a new study, they're like, "People, this is dumb! We told you already."

Joe Romm

And let's be clear why, among other things, already commented on the point, you can blend a little bit of hydrogen in with natural gas in an existing pipeline. Exactly how much? Not quite yet proven at scale, it is viewed that 20% is max. But people start to worry when you get above 10%.

David Roberts

And that's about the embrittlement of the steel?

Joe Romm

And of course, the problem is that hydrogen is so diffuse and the methane has four hydrogens and a carbon. So, the extra energy of throwing this diffuse hydrogen in there is even less a percentage than whatever the percentage of hydrogen is. So, you might have a 20% hydrogen blend, but it only might be, let's say, 70% of the energy content in the whole thing. And what's the point? Because you're still committing to natural gas, right? It's a microscopic benefit for a huge amount of money and a headache.

David Roberts

And if you think that replacing all existing chemical uses of hydrogen is tough, imagine trying to produce enough clean hydrogen to heat and cool the world's buildings. Like, I don't even know how to do that math. But suffice it to say, it is exponentially beyond what we can imagine producing. So, it's really just, I mean, I hesitate to be, you know, strident like this, but specifically, hydrogen for heating seems to me just a pure natural gas propaganda play. They're just completely fooling and manipulating governments about this. There's no chance this is going to work or matter.

Joe Romm

And let's remember, by the way, that electric heat pumps don't make heat the old-fashioned electrification way of running electricity through a resistor, right? They actually have a net gain in so-called coefficients of performance (COP) because they use the electricity to move heat from outside to inside.

David Roberts

And so, if you're combusting a fuel, you are physically, mathematically getting less energy out of the fuel than is contained in the fuel. You can't get a COP above one, right? Physically, whereas every heat pump has a COP above one.

Joe Romm

And people are heading towards, as you know, COPs of three, four, and now even five, right? Which is to say, you put a kilowatt hour of electricity in and you get four units of kilowatt hours of heat back. So, you know, this is, I don't want to say it's a no-brainer because there are issues involved. And that's why, by the way, there's a massive campaign to spread bad information about heat pumps throughout the world, and particularly in Europe. But yes, we know what the future is. It's not always the case that we know what the medium and long-term winner is, but we do here.

David Roberts

Right, okay. So, let's go to more challenging — those, I think, are just dumb and dismissible, cars and heating. Silly. Now, let's talk about e-fuels, which is more complicated.

Joe Romm

Well, we should say there's a lot of uses for heating. There's not just heating homes and buildings. You know, this gets to the secondary issue, which is at what point, how high a temperature can you beat burning natural gas with electricity?

David Roberts

Yes, a moving target for the last several decades.

Joe Romm

And industrial heat pumps are now getting up to pretty high temperatures, enough to already get close to 40% of industrial heat. Then, I know you've probably had a number of companies interviewed here. I think I've heard you do some —

David Roberts

Box of rocks, box of rocks!

Joe Romm

And so, this is one of those classic cases where I say something I said 20 years ago: If you can do something directly with electricity, hydrogen will never compete.

David Roberts

Yes, I mean, I think you could even say as a general takeaway from this pod, the extent to which we're going to use hydrogen is directly correlated to the extent to which electricity is going to fall short. You and I, of course, are on Team Electron and believe that electricity is going to do a lot more than anyone thinks. So, our sort of low estimation of hydrogen's contribution is basically tied to that high estimation of electricity's.

Joe Romm

Which is not based on flights of fancy, but staggering advances in batteries. Not just in the battery cost, but in the energy densities of the—

David Roberts

And the evidence of markets. I mean, it's what's happening. So, even industrial heat, I think, used to be one of those things where people are like, "Oh, it's difficult to decarbonize, you're going to need some liquid fuel." I don't think so. I think we're going to get to industrial heat purely through electricity.

Joe Romm

Certainly, 80 to 90%.

David Roberts

Something like that. So, one of the challenging areas to me then is these e-fuels you're talking about. So, the idea here is specifically with aviation and shipping. You are moving giant vehicles and thus you need an incredible amount of energy density on board. And the idea is, or the thought is, you are never going to get that energy density out of a battery. So, you need a liquid fuel and you need a carbon-free liquid fuel. And the only way we know how to do that is making these e-fuels which, as you say, is using renewable energy and then carbon captured from somewhere, either from a flue gas or from the atmosphere, and then you refine those into basically a carbon-neutral liquid fuel.

And there's a lot of work going into that, tons of startups, tons of activity and, as far as I know, no one yet has — well, actually, I've talked to a couple of guys in aviation who will be bold enough to say this — but very few people are bold enough to say that electricity is going to get good enough to do those directly. So, do you see a niche for e-fuels and, if so, what are the policy implications?

Joe Romm

Well, we're going to jump to the "sooner or later" here again. If you're talking about long-distance intercontinental air travel — let's just put that in the category of replacing hydrogen directly — a small, growing but small, 2-3% of global greenhouse gas emissions and one of the three or four hardest, so deserving of a lot of R&D but not the priority for scaling up deployment. We have a long way to go on all these other things we just talked about, which is electrifying ground transport, electrifying heating, and getting rid of the fossil fuels already producing on the grid.

We have how many years of that? We're not moving at a fast pace, let's say two decades. Right. So we're talking about things, technologies that would be good to have in the 2040s. We don't have to go to zero-emission sustainable aviation fuel for all jets today. Right. That's not the right order of things and it's certainly worth putting a lot of money into figuring the problem out. But it's not worth saying, "Oh, I know it's gotta be this. So let's bet the farm on this." And let's be clear what we're talking about with the sustainable aviation fuel which would be basically e-kerosene, the equivalent of jet fuel, something like that.

You have to have green hydrogen. So, that green hydrogen is going to need its electrolyzer, and it's going to need 100% new renewables, hourly matched. You've had Jesse Jenkins and others on. So, you got to have the renewables running that. If you use direct air capture, then that direct air capture plant also has to run on 100% new renewables, hourly matched. And whatever plant you use, this Fischer–Tropsch or some other plant that's going to combine the CO2 from the atmosphere and the hydrogen from water and back into a hydrocarbon. And I'll just say, what you are doing here is reversing entropy, right? You burned the fossil fuel in the first place.

David Roberts

You're trying to put the molecule back together.

Joe Romm

So, there are two things you're trying to do: You're trying to take a diffuse gas right in the atmosphere, 420 parts per million, right? You have to capture that. You took a solid or a liquid that was storing that hydrogen, that carbon very easily, it's got diffused. You're going to spend a lot of energy getting it back in that form. And then of course, you're splitting the water, which is, remember, water is the waste product of combustion, much as carbon dioxide is the waste product of combustion. And we're going to take two waste products and try to convert them back into the original so we can burn them again.

Okay, now if that isn't clear, clearly one of the most inefficient last things you would ever do. And you'd never do it until you had so much excess renewables that you would solve every other problem first.

David Roberts

Well, let me pause here because this is — I do think that the people working in this area are betting on abundant, trivially cheap renewable energy. But I will also say that lots of other people working in lots of other areas are also betting on abundant, trivially cheap renewable energy. Like a lot of things that we want to work are not going to work without abundant, cheap renewable energy. So, do you know what I mean? Like, I don't know if we should hold that against e-fuels specifically.

Joe Romm

Well, if what you're telling me is that there are a lot of business plans out there that assume that they're going to be using dumped excess renewables, then I would say to you, "Good luck trying to get an offtake agreement if you're trying to use the same stuff in your business plan 10 years from now." If you think that there's going to be zero-cost renewable electricity 10 years from now, that this isn't going to get bid up in price by all the electric vehicle companies who at least have a product people want to buy, right? Or the people who want industrial or smaller-scale heat pumps.

I think between data centers and electrification, there will be people bidding for that renewables. And by the way, that renewables is not predictable. That's the dumped renewables. Most of the things we're talking about, like electrolyzers, do not like to run on randomly delivered amounts of power, right? So, because they again, these are expensive devices, they have to run round the clock. And that's why this is the great, we'll get to it, I guess, the green hydrogen failure. There's a reason why literally 99% of all green hydrogen projects out there do not have guaranteed, do not have firm offtake agreements and are in the process of going bankrupt, shuttering down, or selling off to somebody else.

That's the big failure that has happened in the last six months as people have realized, as Bloomberg New Energy Finance, which in 2021 said, "Oh, we think electrolyzers are going to come down a learning curve like everyone else, 10% per year." And now, three, four years later, "Oh, actually electrolyzers went up 40 to 50% in price. So we're redoing all our numbers and we now think by 2050 they might come down 50%, if there's free trade."

David Roberts

That shouldn't be a problem.

Joe Romm

And I just want to say this generically because I know you've brought on some very sophisticated people to talk about the literature on learning curves, but everyone in their business plans assumes that their new technology will come down a learning curve. But as we know, most things actually aren't batteries or solar panels. And so, electrolyzers are mostly not composed of things that have any reason to believe are going to come down a learning curve. And the same is true of a direct air capture plant. Right. We're talking steel, cement.

David Roberts

So you don't think on either of those can be modularized and replicated and factory produced and all the other kind of things that bring that bring cost down over time?

Joe Romm

Well, the problem with this, the same problem with nuclear power, is that there are vast economies of scale for making these things bigger. That's why we built 1,000 megawatt plants. We don't have the 200 megawatt plants because it doesn't take five times as much steel and five times as much concrete and five times as many people. Right? So, most industrial things have big economies of scale, right? There's this imaginary world where, "Oh, I'm going to shrink down the cost, but the cost per unit is also going to go down." That requires magical thinking. It requires making it so small that you can make it in a factory and ship it in a shipping container.

But again, that's small. I mean, shipping containers are big, but they're not big in the world of power. And so, I talk about all this in the book. I don't want to say it's crazy, but — look, I'm a physicist. I don't want to say things are impossible. But in the history of energy, in the history of products that you buy when you go to the store, the little packages are higher cost per package, per unit. I hope that's called shrinkflation. There's a whole word for it. So, no, I do not believe that things that have big economies of scale can mysteriously have even larger economies of shrinkage that make up for the diseconomies of shrinkage.

Again, and I say this to you, Dave, we've known each other a long time. People may make some money with some products. What they're not going to do is scale up to create a solution for climate change that you and I need to spend a lot of time talking about.

David Roberts

Okay, well, let's go back to e-fuels then, because I want people to come out of this with some sense of how they are supposed to think about this. How are they supposed to think about aviation and shipping? In your framework here, we just deploy, deploy, deploy the stuff we know how to do, which are the big buckets, cars, heating, etc. Do R&D on aviation and shipping and just be content that we'll solve them later. Is that basically your idea? And what is that later, like the physics of hydrogen aren't going to change? Do you think batteries dense enough to do this are going to come along?

Joe Romm

I now believe it was in the realm of possibility that the vast majority of the air travel problem, yes, is solvable in the following sense: that clearly the energy density of batteries is getting better and better, and the upper bound is pretty large. You can google something called "structural batteries," right? And I'm not saying — they're not commercial now, but we're now talking about what could be available in the 2040s, right? So, if you would tell me now, "I know that we're not going to have vastly better batteries that could actually be put into the structure of a plane," I would say, "Well, you might be right, but you might be wrong."

And what's more, along the way, we are going to hybridize our airplanes anyway, right? We're going to, as the batteries get better, we don't have to fly the whole trip on batteries. We can just use it as, you know, let's say, take power assist in the most important places. And so, I think you can imagine vehicles that, let's say, reduce 50% of the long-distance air travel. So what I'm saying is that we're talking about a problem that in the year 2040 might still be just 2 or 3% of global emissions. So, I think until we get to 80% reductions from current levels, I wouldn't obsess about these things that are in the 2 or 3% level, which includes intercontinental shipping, because as you may know, the Chinese are deploying electric shipping along some of their longer rivers and they're doing battery swapping.

You put the batteries in a container ship. This is an important conceptual point that dawned on me over the last year, which is, yes, we haven't solved all the electrification problems, but that's because no one's been thinking about electrifying a lot of stuff because we had these fuels that were sitting right there below the ground you could just burn.

David Roberts

Yes, this is. Thank you for making this point. I make this point all the time. I make this point every time I talk to a young audience of students or whatever. It's just like, it's not like finance where there's been like millions of people come before you and there are just tiny marginal scraps left. There are like major discoveries to be had. Like no one's been thinking about this stuff for centuries and all of a sudden everyone's thinking about it. So, like, you can enter this field and make substantial contributions. Do you know what I mean?

Like, there are still low-hanging fruits around electrification. We're nowhere near where we're going to get with electrification.

Joe Romm

Yeah, there's been no incentive for our great entrepreneurs and our great scientists, innovators. And as we've seen, you've reported on as much as anybody, the amazing companies, and we both know not all those companies will succeed. But there are some very smart, serious people. And then you have things like geothermal. So, it's a very exciting time in the solution space. As long as we don't get sidetracked by the things that are considerably less plausible.

David Roberts

Well, let's talk about then the other big one, which is steel. Here again, you can do what's called "hydrogen direct reduction," which just uses hydrogen instead of a fossil fuel for that stage of production, that exists now. It's quite expensive. There's also electrochemical — you know, I've had a couple of companies on. This is like my personal dark horse thing that I'm super geeked about. I'm super geeked about electrochemistry, but that is like you can make steel with renewable energy through electrochemistry if you have abundant, cheap, renewable energy. Again, like decarbonizing steel without hydrogen is going to require abundant, cheap, renewable energy.

Joe Romm

Right. But let me make the following point. So does decarbonizing steel with hydrogen.

David Roberts

Right.

Joe Romm

There's only one way to make carbon-free hydrogen, and that is with carbon-free power. Right. And so, you know, I've been saying this for 20 years. Yes. One of the reasons people are excited about hydrogen now is because the cost of green hydrogen has come down sharply. But that's because its principal competitor has come down in price sharply. So that's the flaw there. Yes, you're right: Green hydrogen is now whatever, five to ten dollars a ton or, you know, a kilogram. Okay, that's great.

Unfortunately, that's because the green electricity, which you can use directly, got a lot cheaper. So, yeah, anybody who thinks you can make low-carbon hydrogen from natural gas and capture the CO2, that, I'm afraid to say, is a fossil fuel hype, but it's just not the real world. If you want the green hydrogen to power your thing, and if it's a steel mill, yes, you need a lot of it, then you're talking about using those same renewables you need in abundance, except you're now going to need two or three times as much.

David Roberts

Right. So, replacing existing hydrogen would take as much renewable energy as the total US grid. Replacing steel mills with hydrogen direct reduction, that's probably like another grid or two worth of renewable energy. So, do you then think of steel the same way you think about aviation and shipping, which is, let's do the things we know how to do, let's do R&D on this, let's basically work out electrification on this and not spend a bunch of proximate money on a solution that is not going to be the long-term solution?

Joe Romm

Look, the reason they went to sustainable aviation fuel is because it's a liquid fuel. I think that, you know, I know you've had guests who've had a different opinion, but I think the notion that you're actually going to use the hydrogen in a jet is implausible. Particularly if you're saying, "I'm going to liquefy it."

David Roberts

It's a fuel cell. He's going to use a fuel cell. I wanted to ask you about that. Like, what do you think about hydrogen fuel cells to get some of the density you can't yet get with batteries?

Joe Romm

Well, I will say, you know, as I did in the book and as I said 20 years ago, you know, but it's even more clear now: There has never been a profitable hydrogen fuel cell company. And there was one that turned a yearly profit, you know, a couple of years ago. And I haven't kept track of it, but they're all, I mean, you know, Plug Power.

David Roberts

What about Bloom, the Bloom box? Am I making that up? That's a thing, right?

Joe Romm

Right. But Bloom has never made — it's funded by venture funds. And I often ask people, when I'm speaking, "When do you think the first fuel cell was invented, discovered?"

David Roberts

I have no idea. I'm so ignorant about fuel cells.

Joe Romm

They'll say, "I don't know, the 40s maybe." And I say, "Well, close but wrong century. 1839." It was a reverse battery, a guy was working on basically reversing a battery. So it's been 180 years. Normally, things that are plausible get commercialized relatively soon. It could be decades. But I can tell, you know, it's not for lack of trying.

David Roberts

But as you say, we're in a new world. Fossil fuels are being taken off the table. That is going to change the relative economics of a lot of things. Why wouldn't it do that for fuel cells?

Joe Romm

Because fuel cells aren't an energy-using device, they're an energy-transforming device. So yeah, could someone build a fuel cell that makes economic sense? Perhaps the problem is the fuel cells aren't even that efficient. I mean, maybe in a high-temperature fuel cell, which people haven't cared about so much because you can't run a car on a fuel cell that takes hours to warm up. The cars use the proton exchange membrane fuel cells, which are low-temperature fuel cells and have an efficiency in the 40s. There are fuel cells at a high temperature that might be in the 50s.

But again, if someone is saying, "I'm going to build an airplane and it's going to have a fuel cell, not yet a commercial product, running on green hydrogen, not yet a commercial product, and I'm going to liquefy it and somehow get it to the airplane in every major airport in the world."

David Roberts

Well, part of this vision is that all these little mid-sized airports would basically be running their own little electrolyzers and storing their own liquid hydrogen stores, basically. There'd be little electrolyzers all over the place, I think, is part of the idea.

Joe Romm

And of course, the reason that makes no sense is because those electrolyzers would all have to run on 100% new renewables that are hourly matched. And that's the whole problem with both hydrogen and direct air capture: wherever you site it, you gotta have a lot of "excess" or low-cost renewables that nobody else wants. Right? That's why in any medium-sized city, if you have low-cost renewables, you're gonna use it directly because you're going to use them to power the cars and the power stations and the electric heat pumps and industrial heat and all the other uses we're going to come up with.

And then you're going to tell me, "I'm going to plop this electrolyzer down and it's going to be small scale," so the unit cost is going to be high, so the unit cost coming out is going to be high. So, I can't say, "Oh, this is going to be cheap green hydrogen." If I'm doing it with a small electrolyzer and I'm using some local excess. I mean, it's not going to be excess renewables. I'm going to have to build new renewables. So again, it's just as you say, there's a lot of business plans out there that assume everyone else doesn't succeed in their business plans, but they succeed in theirs.

And I'll just tell you, "Good luck." It's fine for a venture capitalist to pursue that, but if you tell me we should have massive tax credits or we should start building this out, I'll say to you, "This is ridiculous." And this is where I'll cut to the chase: We're coming up on COP 30. For 30 years, every year, the nations of the world get together to address the climate problem and guess what? Coal, oil, gas use have continually risen. So, we can't keep dawdling when we know how to get 80% of the reductions now, right?

That's the top priority. Because if we don't get those 80% now, it doesn't matter if somebody comes up with a brilliant idea to solve 2% of the problem in the 2040s.

David Roberts

Yeah, it's hard to avoid the sort of, when you, when you hear people talk about hydrogen, it's never quite stated explicitly, but part of the rationale seems to be, "Well, we need to find a way for these giant oil and gas companies to be partners in this effort and this is a way for them to be a partner in the effort. So let's do it." And I guess my alternative is, "No, they don't. Let's destroy them and burn them and urinate on the ashes." You know, that's not everyone's position, but it seems like a bad justification for spending hundreds of billions of dollars.

Joe Romm

Well, it still assumes that when you're done, you have the answer. And it's entirely possible when you're done, you just have tens of billions of dollars in stranded assets because electricity has solved the problem. Or maybe the former oil drillers who are now working for geothermal plants are making a living providing their green electricity that's actually dispatchable and near baseload. So look, the point is certain things we know now and we should bet big on them. Other things deserve some longer-term R&D and maybe toning down some of this hype about hydrogen and direct air capture and small modular reactors, all these other things I talk about in the book.

David Roberts

Oh, one other thing. There was one of the uses I wanted to ask about. One of the promising ideas around hydrogen is people have this idea, which I have mixed feelings about, that we need storage, long-term storage. Not just diurnal, not even like 50 hour, not even weekly. We need like seasonal, massive, seasonal storage. And so, you're not going to get massive quantities of storage that will sit there indefinitely with electrochemistry, I don't think. What's your take on that? You think that problem's going to be solved some other way? It's not actually going to be a problem?

Joe Romm

I think that as you know — because I've listened to, one of the reasons I know these things is I've listened to your interviews — there's not a market for long term storage. That is the problem.

David Roberts

Right. Not yet.

Joe Romm

Right. So, it's all hypothetical. If there were an actual market, then the marketplace would come up with the answers. You and I wouldn't have to speculate. You have certainly talked to people who believe they have a technology that can go months. They can't sell that, so they have to figure out the benefit that's shorter. Now, there is a staggering amount of money going into batteries, right? Because there's actually a financial incentive to get 5% better out of a battery or a new chemistry that could be longer duration. So, I think that, and I will agree with Jesse Jenkins and others who would say, I think that as things become economically viable, longer and longer storage, we will find solutions for them.

And clearly, we now have. What is it in the Middle East? Someone's got their gigawatt-scale solar. It's got a huge amount of solar and it's got 24-hour storage. As you know, I don't think we're anywhere near that point. I am bullish on enhanced geothermal, as is the Department of Energy and Jigar Shah and people who have analyzed that. It's not a done deal. I think it's far more plausible than, let's say, small modular reactors. But the point is, it doesn't make a lot of sense to place a large bet on solving a problem that you can't even make money on today.

Let's do long-term R&D. As we said, no one's had to look at long-term storage until people woke up and realized we have to go to zero emissions. It wasn't until we all had to go to zero that you had to solve every single problem. So that was the Paris Agreement, right? That was really December 2015. Followed on with the Intergovernmental Panel on Climate Change report on 1.5 degrees C. Those were the things that led the world to say, "We need to go to zero" or net zero. But let's... I don't know about the net.

Let's just say you have to get really, really close to zero. In the world where you have to get really, really close to zero, you have to solve all of these niche problems too. These niche problems force you to really contort yourself. In the introduction of the book and also later in the conclusion, I talked to the guy at the International Energy Agency who co-wrote their 2019 hydrogen report and still does a lot of that work. He basically said to me, "If we didn't have to go to zero in every sector in 2050, we would probably have a lot less hydrogen in this equation."

And in fact, as he also said, and you could read the quote in the book, every advance that we've seen in the past decade has led us towards electrification and away from things like hydrogen and carbon capture and storage. So, I would say I expect very big things to appear that are near commercial now or will be commercial in five to 10 years.

David Roberts

Yeah, I sort of think of hydrogen a little bit in the same bucket. I think of direct air capture and carbon dioxide removal, which is their enormous presence in models in 2050 net zero models, is more a placeholder than it is a serious plan to do those things. It's more like, "We don't yet know how to do this electrically."

Joe Romm

And look, they were invented, the direct air capture and the bioenergy carbon capture and storage — which I've written a couple of reports for at UPenn, the Penn Center for Science, Sustainability, and Media, a couple of long reports — and it's basically the same thing: these were kind of invented by the modelers, not by the technology. This was not a bottom-up thing where you said, "Oh, we could use an LED light bulb and save this much." This was the top-down modeler saying this is the "then a miracle occurs" part of the blackboard equation from the Gary Larson cartoon.

So yes, I agree, and I think the "then a miracle occurs" stuff, whatever you want to say, it is 10 to 20%, it's going to shrink. That number is going to shrink every year. And it is just a mistake to say, "Let's scale up stuff now to solve this final 10% when we have 80% that we need to spend that money on today."

David Roberts

We're over time, but I just very briefly wanted to touch on the ways of making hydrogen. So, you have a whole long section on the idea of using nuclear power plants to make hydrogen. I think that all the reasons you think that is dumb derive from your general feeling that nuclear is dumb and big, expensive, and thus it's dumb for this, just like it's dumb for everything else. We don't need to go over all that.

Joe Romm

No. Well, let me just say no one has solved the cost problem on nuclear. I don't call nuclear dumb, I just call it expensive. And so, if you can't make green hydrogen from cheap solar and wind, how exactly are you going to make affordable green hydrogen from a nuclear plant? And the answer is, well, we're going to do it thermochemically. We're going to use high-temperature waste heat from the plant. Right. But that requires you to build the hydrogen production facility right next to the nuclear reactor.

David Roberts

Even like partially integrated. And like, of all the ways to, you know, they joke about all the ways to like make steam, like of all the ways to create a little heat. It seems like you could do it in a simpler way than building a giant nuclear power plant.

Joe Romm

Well, the other point is, hydrogen production is a problem in nuclear accidents. This has been studied to death by the International Atomic Energy Agency and others. Huge volumes. The Three Mile Island accident had a hydrogen bubble inside. So, you don't ever want to put — the fact that hydrogen is invisible and burns invisibly and it's very leaky and hard to detect the leak is that there's like a hundred-foot setback between a hydrogen production facility and any place where you're worried about safety or explosions. Right.

So, when the French tried to do this, they found that they had to move the hydrogen production facility a few hundred feet away from the nuclear plant, by which point the heat isn't so hot and the size of the amount of hydrogen that could be produced shrunk immensely. And so, I'm just saying that, from a safety perspective, you wouldn't want to introduce something as dangerous as a hydrogen production, massive hydrogen production facility near a nuclear plant, even if it were affordable, which it isn't.

David Roberts

Right. The other big idea is, well, a couple of other big areas. One of the other big ideas is blue hydrogen. There's a million colors. I'm not going to go through all of them. But basically, blue is the idea that you continue to make hydrogen with natural gas. Except then you attach carbon capture and storage onto your natural gas plants. This, to me, is dumb on its face, to the point that it is amazing to me that it is happening at all. And yet, there it is happening indeed. I don't know if you've caught the latest news, but you remember all the hydrogen hubs that were going to spend hundreds of billions of dollars on and the Inflation Reduction Act.

Trump is going to — his plan is to cancel the ones that are located in blue states that were going to run on renewable energy, but to keep the ones in red states that are going to run on natural gas. Even good faith hydrogen supporters have to look at that, I think, and think that it shows a little what the real game is. But like, I don't know that we need to spend a lot of time on this.

Joe Romm

Just make a couple of comments. As we know, the natural gas system has leakage of methane. And as we also know, we've tried carbon capture. By the way, no one has ever built a commercial natural gas plant with carbon capture and storage, which is quite a statement.

David Roberts

So, I know it's crazy. We've been talking and talking and talking about them.

Joe Romm

So, the notion that you're going to put a carbon capture and storage system on a, let's say, steam methane reformer — and remember, you're gonna have a parasitic loss, so you gotta burn more natural gas and therefore you're gonna have more of the leakage — you're not gonna capture 95% of the CO2, because the CO2 from the steam methane reformer, if that's the way you go, some of it comes out pure, maybe 60% or so, but some of it comes out in the flue gas. And that's the hard part, right? Because that's very diffuse and expensive.

So, the point is this: it's not likely to capture anywhere near 90%. None of those plants out there that promise 90 to 95% on average, they do like in the 70s. So, what you're going to end up with is methane leakage in the system. Excess methane burned to power the carbon capture and storage system and the leakage associated with that. Then, you're going to have the CO2 that isn't captured. And of course, you're still going to have to worry about any methane of any natural gas that leaks out. And when you do the calculation, you find it's not very green, it's certainly not carbon-free, and it's again, since hydrogen is barely worth the trouble in the first place, if it is carbon-free, it's definitely not worth the trouble if it's putting out all these greenhouse gas emissions that you were trying to prevent in the first place.

David Roberts

However, the subsidy regime that has been set up for it and the Inflation Reduction Act is so florid that they can make a lot of money doing this.

Joe Romm

They can potentially. The Inflation Reduction Act has a flaw. It has been discussed by people, and the people who worked on getting it passed tried to prevent, which is that it is a supply-side subsidy. It's a subsidy for producing it. It should have been a subsidy for, let's say, methane ammonia producers to use green hydrogen, not a subsidy for people to just randomly produce it. And as a result, it is open to exploitation. And yeah, I think the fossil fuel companies would love... And by the way, the other thing, as you may know, because it was in the paper, also the Occidental people who bought the direct air capture company, Carbon Engineering, the oil company, they've been trying to persuade the Trump administration to have an equal subsidy for using the captured CO2 for enhanced oil recovery.

David Roberts

Oh, to just layer one more subsidy on top of the multi-layer subsidy cake that's already been cooked for them.

Joe Romm

The Inflation Reduction Act does subsidize captured CO2 in the utilization case of enhanced oil recovery. It just gives you a bigger subsidy if you actually permanently bury it. But just so your listeners know, enhanced oil recovery is a profitable thing. And studies have indicated that subsidizing CO2 use for direct oil enhanced oil recovery is going to tilt the usage, as you can imagine, the first usage for just getting more oil out of the ground. Because again, what enhanced oil recovery is, we're going to use CO2 to squeeze — the inherent pressure of the oil well doesn't get all the oil out, but if you squeeze in another compressed gas, you can get a lot more oil out.

And people have been doing that for decades, but now they want to capture the CO2. So, imagine using methane, natural gas to make the hydrogen. You have all the leaks, you don't capture all the CO2. The CO2 you do capture, you use to squeeze more oil out of the ground to burn. And that's all subsidized both on the green hydrogen and maybe also on the CO2 burial end.

David Roberts

Ugh, fun stuff. I assume all of that is going to... I mean, it was like under Biden, it was a real open question how sort of grotesque and ridiculous those subsidies were going to get. I feel like now it's no longer an open question. They're going to get ridiculous, grosser, and more corrupt, more useless in climate terms.

Joe Romm

That's why my main message to anybody who works at a Natural Resource Defense Council or Environmental Defense Fund or other people who do file lawsuits — besides to read my book, Hype about Hydrogen — please, you need to launch lawsuits against this. Because if you look at the Inflation Reduction Act, it's actually supposed to go through a life cycle analysis.

David Roberts

Yes, it says in the statute, "It must lower greenhouse gases," does it not? It says that in the law. So, this is like, it's boggling to me that this is a debate. It says it in the text of the law. You have to really contort to get around that.

Joe Romm

Well, unfortunately, you can. It doesn't necessarily say that you can't hire somebody to give you the — as you know, you can twist the life cycle analysis almost any way you want, depending on who you are, who's funding it.

David Roberts

The final topic that I know a lot of people were curious about, that I want to touch on before we're done, is geologic hydrogen. This is the new hype. The idea that we've discovered, basically underground in these sort of caverns, giant quantities of gaseous hydrogen, which then we don't have to produce at all and thus could be cheap and finally bring the hydrogen energy system into reality, etcetera, etcetera. What's the deal with geologic hydrogen?

Joe Romm

Well, I do have a chapter on that discussion, a lengthy discussion of that. So, the problem is that the hydrogen doesn't — there isn't a lot, no one has discovered a lot. And what they've discovered is not very high percentage hydrogen. And typically, it's got a lot of natural gas and CO2 in it. And what's more, it can change over time. There was one place that had a high percentage of hydrogen in the beginning, and then over time it turned into a high percentage of CO2. But many of these things, the large quantities might only have 1%, 2% hydrogen, you know, and so you have two basic problems.

One, you're going to have to figure out how to capture all the other stuff or separate out the hydrogen, and it's probably going to be an intractable problem. The second is, it's not near where you use it. So, unless you discovered a massive amount of very pure underground hydrogen that you knew how long it would last, because remember, you want to build a pipeline, someone's got to say, "Oh, I understand the geology well enough to say there's going to be this pure hydrogen coming out for 10 years," right? Otherwise, guess what? No one's going to build your pipeline for you and you're going to have to use tube trucks.

And so, the other thing is, hydrogen still got all these other problems. If someone just gave you cheap green hydrogen, you could make use of it locally, but the notion that you're going to be shipping it around thousands of miles, let's say this were in a non-industrial place. So, I have a long discussion of this. I think it's safe to say that this is not — right now, this is how I phrase things, right now there is no reason whatsoever to believe that so-called geologic hydrogen is going to be a game changer or even a substantial provider of carbon-free hydrogen for the foreseeable future.

That being what matters in timescales that you and I care about.

David Roberts

Right. In the book, you wrap up the whole thesis of your book into a tidy lesson, which is roughly like: There's a good reason to research green hydrogen because we need it to replace existing uses of hydrogen, but there's just no reason to expect it's going to ever be a substantial contributor to the energy system. Is that fair? Is that a fair summary?

Joe Romm

And therefore, not a substantial contributor to the solution to climate change.

David Roberts

Right, yeah. And therefore, while we should continue researching, it's crazy to be pouring tens and hundreds of billions of dollars into trying to scale up something prematurely, basically.

Joe Romm

Exactly. There are many technologies that are very worth continuing R&D, and that's the government's job because, of course, venture capitals don't like long-term R&D. That's highly speculative. That's why their business plans, all these business plans that we talk about, all have to say, "In year five, I start making a lot of money. So, I'm going to have access to all the free green power that I need. And everything's coming down a learning curve. And by the way, all my competitors are failing at their business plans." But that's what they have to do to get the VC money.

And so, yes, that's what I'm saying, that this is suitable for the Department of Energy's long-term R&D effort. And along the way, there might be worth doing some medium-scale demonstration plants if something seems very promising. But it's not clear that there are very many things that are very promising and what's more, in the hydrogen pipeline, whereas you and I both know there are a lot of near-commercial companies, near-commercial technologies that have, I would say, a very decent chance that a substantial fraction are going to pan out by 2030 and so we can recalibrate everything. When I was blogging, I wrote a piece like 10 years ago saying, "Any technology that's commercial or near-commercial in 2020 is going to have a big advantage." Right, because I thought we were going to be scaling up like wild this decade.

David Roberts

Would have been nice.

Joe Romm

Naive optimists that we both are, but the point is still true. Anything that's on a learning curve today is going to be very hard to catch up to. Batteries have been coming down a learning curve in cost and improving in the energy density for two decades, and most people think, and the literature suggests it's going to continue for another two decades. So, good luck with your new technology that hopes to come in at a high cost and then come down a learning curve even faster to catch up. If someone wants to throw money, some venture capitalist wants to throw money at that idea, God bless them.

But those of us who want to solve climate problems, we know where we put our money.

David Roberts

Yes, generally, on electrons over molecules, I think, is the simplest way to put it. Team Electron. I'm going to get T-shirts.

Joe Romm

Team Electron.

David Roberts

All right, Joe, this has been fascinating as always. I've been wanting to sort of try to wrap my head around hydrogen, and this is a bracing opportunity to do so. So, thanks for coming on.

Joe Romm

Oh, thanks for having me, Dave. It's always great talking with you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

David’s Notes

1. 🎤 We’ve got two excellent live events coming up! As always, we’ve set aside a handful of free tickets for paid subscribers. Register your interest via this form; you’ll hear from Sam in the next few days if you’ve won tickets!

The first is here in Seattle. On May 20, at the 9Zero Climate Innovation Hub (the same place I did the Climate Papa podcast), I’ll interview Jigar Shah on stage about the difficulties Washington state is facing in financing its ambitious climate policies. Volts listeners know that Jigar — formerly of DOE’s Loan Programs Office — is always entertaining and provocative. Come down and join us!

The second is a big Canary Media event in Washington DC on June 4. There will be all kinds of interesting interviews and panels (click the link), culminating with me interviewing … a guest who has not yet confirmed. (Stay tuned!)

I’ll be in DC that whole first week of June, so even if you can’t come to the event, hit me up and we’ll get coffee.

2. 📬 It’s a mailbag month — leave your questions below! 📬

📌 A reminder that paid subs can listen to full episodes of bonus content via the Substack website/app or by sending them to their preferred podcast player using these instructions.

3. 🏠 Subscriber Jeff dug up a decade-old piece I wrote for Vox:

I love that piece — it’s one of my favorite things I ever wrote, not so much because it’s brilliant prose or anything, but because it’s an important and overlooked issue. It was especially overlooked in 2015, but even in the decade since, as housing and loneliness have both become big topics in mainstream discourse, the overlap of the two remains under-explored.

4. 🔫 I feel quite confident that subscribers do not come to Volts for my thoughts on Star Wars. Indeed, it could be argued that the last thing the internet needs is more opinions on Star Wars! Nonetheless, I have some of those opinions, and since SW has been much in the discourse lately (Andor is just as good as people say), I decided to put them down in a thread, once and for all. It’s mostly about SW but also applies, I think, to a great deal of what currently passes as popular entertainment, and to modernity generally. It has kicked up all kinds of interesting feedback & discussion, so if you’re into that kind thing, follow along:

5. ✅ Community comment of the month: An aside from Roy that he knew I couldn’t resist. Small modular nuclear reactors remain, to date, neither small, nor modular, nor affordable.

Monthly Thread — How It Works

This is your monthly opportunity to share! Use the comments section in this community thread to:

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In this episode, I chat with Kathy Hannun of Dandelion Energy about ground-source heat pumps, which are twice as efficient as air-source units but still more expensive up front. Dandelion has designed its own drills and heat pumps, and with a new 1,500-home partnership with a developer in Colorado, it’s looking to scale up and bring costs down.

(PDF transcript)
(Active transcript)

Text transcript:

David Roberts

Hello everyone, this is Volts for May 9, 2025, "Trying to bring geothermal heat pumps to scale." I'm your host, David Roberts. As Volts listeners undoubtedly know by now, the most efficient way to heat a building is with a heat pump, for the simple reason that it takes much less energy to harvest heat, as a heat pump does, than it does to generate heat, as a combustion furnace does. A heat pump that harvests its heat from the air, AKA an air-source heat pump (ASHP), is about twice as efficient as a gas furnace. A heat pump that harvests its heat from the ground, AKA a ground-source heat pump (GSHP), is twice as efficient as that.

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Indeed, ground source heat pumps, sometimes called geothermal heat pumps, are the most efficient available way to heat and cool a building — to get any more efficient, you have to start heating and cooling multiple buildings at once, as with ageoexchange system. So then, why don't you see more of them? The simple answer is that, while they save money over time, they are extremely expensive up front to install.

Dandelion Energy is a company that spun out of Google's X shop back in 2017 to try to address that problem and increase geothermal heat pump deployment. It has installed tens of thousands of its systems, developed its own drills and heat pump, and recently announced a partnership with a builder called Lennar that will see geothermal heat pumps installed in some 1,500 new homes in Colorado in the coming two years.

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I've been meaning to talk with the Dandelion folks for years, and the Lennar announcement seemed like a good excuse, so I'm delighted to welcome Dandelion's president and co-founder, Kathy Hannun, to the pod today. We're going to discuss how geothermal heat pumps work, their advantages, and the way their costs can be brought down.

With no further ado, Kathy Hannun. Welcome to Volts. Thank you so much for coming.

Kathy Hannun

Thank you. I'm delighted to be here.

David Roberts

It's been a long time coming. I swear we talked years ago about something, but I searched on Volts and I can find no sign of it. So, it must have been pre-Volts.

Kathy Hannun

But it was. You wrote a really helpful overview of the different types of geothermal.

David Roberts

Oh, right.

Kathy Hannun

And you were thoughtful enough to actually include geothermal heat pumps, and we use that pretty often to help explain what the technology is to people. So, it's great to speak with you again.

David Roberts

Yeah, that was my own crash course, learning about geothermal. I guess that was back in 2018. Good grief. Well, anyway, good to have you here. So, I'm going to ask you a bunch of questions that I'm sure you've answered a gajillion times. But just as a treat for you to do a nice thing, let's start by talking about the news that I'm sure you are actually excited to talk about, which is this Lennar deal. Tell us a little bit about how that deal came about. And, are you aware of anyone else in the US installing geothermal heat pumps in numbers like this?

Kathy Hannun

I'm not aware of any other project to install a similar scale of residential geothermal heat pumps. So, it's a special opportunity for Dandelion and the industry. I thought your introduction was great. And it is true that the main thing holding geothermal back is the upfront cost. And when you have a chance to install 1,500 of something at once, that alone can go such a long way to bringing down the cost. But the deal came together because Lennar has a reputation among home builders for always looking at new technologies and new products they can offer their homeowners.

And they're also, like many builders, facing some pressure to electrify in various states where they make new homes.

David Roberts

Worth noting, this is taking place in Colorado, which has all kinds of building code things, building laws, and laws about decarbonization of various sectors. There's a lot pushing in Colorado.

Kathy Hannun

That's right. And one thing in Colorado — I mean, there are many factors which we can get into later — but now, builders have to pay, for example, to extend gas if they want gas to a new development. It's no longer a socialized cost. So, the state is taking real steps to level the playing field and even boost the chances for electrification through some nice incentives there. But yeah, so anyway, they were interested in finding alternatives to air source. And we explained, "Yes, there is the upfront cost and sort of need to put in a ground loop, but when you do it 1,500 times in a row on a brownfield construction site, it's actually not that expensive."

And then, you know, the homeowner can benefit from this really premium, high-performance, low-cost system forever. And Lennar benefits as well in a lot of ways. Specifically in Colorado, because the incentives are so favorable for geothermal, it's actually more cost-effective for them upfront as well. So everyone's incentives were aligned to make this happen.

David Roberts

Obviously, doing this 1,500 times at a single site will mean that each one of those individual installations is cheaper than the average, you know, sort of standalone installation for obvious reasons. You can share drills and share labor, etc. But the second part of that question is, do you expect doing this at scale at 1,500 homes, do you expect that to lower costs going forward? In other words, is the 1,501st installation going to be cheaper because of learning through doing, or I don't know, like buying equipment in bulk? How do you expect costs to come down and if so, how?

Kathy Hannun

Yes, well, you know, first to clarify, the 1,500 homes will be across 14 different communities in the suburbs of Denver. But your point is still absolutely correct. Nonetheless, you do have the ability to just stand up drilling resources in that area and the overhead is very low when you're doing so much volume, which is why commercial drilling tends to be cheaper than residential drilling in general, one-off residential. It's so much cheaper because a lot of the cost of drilling is getting the rig there, setting it up, figuring out what you're drilling into, taking it down, transporting it to the next site, and you're able to amortize all of those costs.

But to your question, you know, it already has lowered the cost of geothermal for the 1,501st home. Our manufacturing partner is able to invest in more automation and sort of a higher scale line.

David Roberts

You mean the company manufacturing the heat pumps that you install?

Kathy Hannun

Thank you for clarifying. Yes, exactly. That's just one example. And also, another supplier, just for another example, who's supplying the parts used to connect the heat pump to the ground loop, has also invested in new equipment that allows him to make these parts much more cheaply than he was doing before. I mean, one takeaway is just the geothermal industry, the geothermal heat pump industry, has been operating at a relatively small scale to date.

David Roberts

Yes, it's all very bespoke. It's all very sort of one-off. It's not set up currently for modularity and cost reductions.

Kathy Hannun

That's correct. So, even at a 1,500 home scale — which is really small compared to every other HVAC product that's used mainstream in the United States — even at that scale, we're seeing significant cost decrease. And to me, it's very exciting because it's like, "Okay, there's so much low hanging fruit here." When we get to 15,000 homes, imagine.

David Roberts

Right. Well, I was going to ask about that. I mean, this is 1,500, which is big, as you say, relative to the previous geothermal heat pump industry, but relatively small in the HVAC game. Does Lennar have plans beyond that? I mean, if Lennar did this and they're like, "Wow, this is awesome. We're going to do this on all new homes." Like, what kind of scale is that? I have no idea what the numbers are. You know, like, how many homes is Lennar building a year-ish?

Kathy Hannun

Lennar builds tens of thousands of homes each year, I think north of 70,000. They're operating at a very large scale. And everyone wants this to not just be the only time. Like, Lennar would not be doing this if they intended to just stop at 1,500 because it would not be worth it for them to learn and put in the work to make this happen. And of course, Dandelion, we exist to try to make this geothermal heating and cooling a mainstream way that Americans heat and cool their homes. So, this is exactly what we exist to do.

And so, we talk regularly with Lennar about how we can, and other home builders, how we can work together to continue to bring the cost down and continue to make it scalable in different markets. Like in Colorado today, the costs are such that Lennar is actually not paying a premium upfront to put geothermal in, which is amazing. But that's not the case in all the states.

David Roberts

My next question was sort of like, how crucial are Colorado's incentives in this? Like, in the absence of these incentives in Colorado, would Lennar be doing this?

Kathy Hannun

The incentives that exist, just to be specific, the incentives that exist right now that are supporting this project include an Xcel Energy incentive. They have both an all-electric homes incentive and clean heat incentive. There are two different incentives; you can't take both, but some of our homes are taking one, some are taking the other. Both are quite helpful. And we can talk more about why utilities are motivated to make geothermal work. And then there's also a $3,000 Colorado state tax incentive. And there are code requirements that really incentivize geothermal because it's such an efficient technology.

And there's the fact that I gave earlier about how in Colorado, the developer would have to pay to extend gas. So, it's a savings if you don't have to do that, which always helps to be competing against something that's free.

David Roberts

Are you getting federal tax incentives, too?

Kathy Hannun

It's an interesting one because there is a federal tax credit, but it goes to somebody who owns the home for five years or more. And because Lennar's model is that they build the home and then they sell it, or often it's sold even before it's built, the homeowner is actually getting that tax incentive, not Lennar. So there's a bit of a split incentive problem there where Lennar doesn't value that tax credit as much because it's going to the homeowner. And often, the homeowner, you know, isn't making the decision about whether to buy the home...

You know, it's a little complicated for them. They might be surprised in a very positive way to be receiving —

David Roberts

It would be great to buy a home and just discover a $5,000 tax credit lying between your couch cushions.

Kathy Hannun

Totally. So, it's great, don't get me wrong, but it's not as integral to the sale as the other ones today.

David Roberts

Okay, well, let's back up just for listeners maybe who aren't familiar with the general idea of what's going on here. Let's just talk a little bit about ground source heat pumps in general. So, air source heat pumps, they pull heat out of the air, they dump heat into the air. Pretty straightforward. Ground source heat pumps, they do it with the ground. And the way they do that is with a network of pipes. And this is, I guess, the main reason that it's more expensive than alternatives is you have to do this digging and laying of pipes.

So, just to start with, are you mostly doing this in suburbs? Like, how urban of an environment can you do this in? Because I'm just guessing that urban environments, even underground, have more stuff in your way, more existing infrastructure and other kinds of pipes and things. Whereas, like a suburban yard, I'm guessing, is an easier target. Is it mostly suburban single-family homes that are getting these?

Kathy Hannun

What you're saying is correct, that it is more challenging in many ways to drill and install ground loops in an urban environment. And yet, I don't know that it's more common today to see geothermal in the suburbs than in urban environments. There's a lot of geothermal being installed in colleges and university settings, commercial buildings, that type of thing. There's also quite a bit going on in more urban communities. Multifamily buildings. There's some utilities experimenting with thermal energy networks.

David Roberts

Yes, we're very familiar with those over here.

Kathy Hannun

Yes. Okay, great. And then Dandelion has been mostly focused on suburban residential, but I don't think it's the focus of many others in our industry. For new construction, you have the advantage of sort of the easiest drilling conditions that you can imagine, because it's just a blank slate with nothing. So that's helpful to make it very cost-effective in that scenario.

David Roberts

How do you, if you're just going to a house in the suburbs, Dandelion, how do you know if there's stuff buried under there? Like, are there city records? Do you have to dig and look like, how big of a problem is that?

Kathy Hannun

Yeah, you have to file a sort of request for information from the utility. There's a standard process for doing that. Then they come out and mark where the underground utilities are. And then, some utilities are private, like septic systems, that type of thing. So, you have to work with the homeowner to understand what the private utilities that are under your yard are and where they are. And then, of course, it's tricky because sometimes people don't know exactly what's under there, you know, so that is a challenge, but you can kind of look like, where do the pipes look like they're exiting the home in the basement.

And then, like, where would they likely be going to the street? And so, let's just avoid that general area. You do a lot of stuff like that as well.

David Roberts

So, how much yard or just open space do you need? I mean, I know there are variations. Like, you can go horizontal with sort of shallowly buried pipes, in which case you need a lot of sort of area, yard area. Or you can go deeper, which you can use less yard area and go deeper. But, like, what's the minimum amount of space I need if I want one of these systems? Like, I need a patch of ground X big minimum to make it work.

Kathy Hannun

Well, as you said, there are many different types of geothermal systems. Dandelion's whole mantra is "simplify and standardize." If we can just, like, do the same thing over and over, it will be cheaper. And that has led us to embrace the vertical closed-loop system. It's a vertical hole, so we're just going straight down. It tends to be 300 to 500 ft for a typical house. And then you put what's called a ground loop in the hole. The ground loop is an inch and a quarter plastic pipe. You can imagine it goes straight down, then it makes a hairpin turn at the bottom and comes straight back up.

So, it's actually kind of like two pipes next to each other, connected at the bottom.

David Roberts

And it's just a single loop, it's just one of those?

Kathy Hannun

Typically, I mean, if you have a very large home, you would have two or three or four, it scales. But typically for a home, you can get away with one. And to answer your question, one of the things that was a real bottleneck for the company when we first started back in 2017 was that the drilling rigs that were being used to install vertical geothermal boreholes were just water well rigs. So, you would just call somebody who was usually installing water wells and ask them to install a geothermal well instead. But these water well rigs, you know, they typically serve more rural customers by their nature, the people who tend to need water wells.

And they tend to be very large; they're truck-mounted. So the rig is mounted on a big truck. And they're very messy. They create a lot of mud and debris. So, about half the homeowners who were interested in getting our product in those early years, we had to disqualify because the rig would not fit in their yard.

David Roberts

Oh, interesting.

Kathy Hannun

And we ended up going to Sweden because Sweden has a very high penetration of geothermal heating and cooling systems. About a fifth of buildings in Sweden are heated and cooled with geo, and it's like 70% of new construction. So, it's really a mainstream product over there. And so, we just went to learn. And it was a transformative trip. The rigs they were using were tiny. They were simple. They were more lightweight. A single man could operate the rig and did so in Sweden. He could carry the pipe; it wasn't too heavy. They had sort of ancillary products that they used that were simple, that would keep the site clean.

David Roberts

Like a bulldozer?

Kathy Hannun

Yes, like a bulldozer, exactly.

David Roberts

Not what you want to call to mind.

Kathy Hannun

No, it's a good example. That's exactly right. So, when you have a piece of equipment mounted on tracks, it has a very tight turning radius and it also doesn't disturb the ground as much because the weight is more evenly distributed. So anyway, the Swedes basically took us under their wing. Not kidding, they really did, they taught us their ways. And we couldn't copy exactly what they were doing because Sweden has different laws and highway rules, and they use different trucks. Everything's slightly different than in the US. So, we had to Americanize it.

But we basically took the concepts that they were using in Sweden and built them over here in the US, and created a very residentially friendly, much less expensive, much cleaner approach to installing those ground loops. So, this is a very long-winded way of answering your question: So today, in a retrofit, you really don't need much patch of ground at all. Like, we very, very rarely disqualify somebody today for not having enough land. I can't think of the last time that happened. If you lived on a very steep slope or something like that, that might be a problem.

David Roberts

So, you just need a pretty small patch because you're going straight down.

Kathy Hannun

That's right.

David Roberts

I don't know that I had put that together. And so, one of the big advantages of ground source heat pumps is they're more efficient than air source. What are the numbers on that? I said 2x in my introduction, but I think that's very rough.

Kathy Hannun

That is right.

David Roberts

What are the actual numbers?

Kathy Hannun

I mean, of course, it depends on the weather, right? The colder the winters, the warmer the summers, the more geo will excel.

David Roberts

This is the question I was going to ask. So, this is kind of what I thought. The more extreme your weather on either end, hotter and colder, the more geothermal is going to be advantageous over air source, basically.

Kathy Hannun

Yep, that's right. And it is about twice as efficient. Like in our Lennar project, for example, homeowners will pay about half on their utility bills of what they would be paying if they had adopted air source. So that's about right.

David Roberts

That's interesting. And back on the drills, briefly, it occurred to me, since you're only doing one loop, I guess maybe this doesn't apply. But I just wonder, like, anytime you talk to anybody, geothermal, it's always sort of better to go deeper. It's always hotter, deeper, and you can always get more energy the deeper you go. So, is there talk or innovation around that side of the drilling? Like, would it be meaningful for you to be able to drill much deeper, or do you feel like you're going the right depth?

Kathy Hannun

The idea that you get exponentially more energy as you get hotter for geothermal electricity, it's not as applicable to heat pumps. Going deeper isn't necessarily better. If we hit a geology that has a lot of water production, for example, we might decide to put in multiple shallower holes because it's just easier. It kind of depends on the conditions at a given site, whether it makes sense to do a greater number of shallower holes or fewer deeper holes. But the impact of the change in temperature, we're only going 300 to 500 ft, so it's not a gradient that makes a big difference.

And the deeper you go, the more pumping energy you actually need, the greater your head loss; these factors are more significant for us.

David Roberts

Well, speaking of pumping, these systems mostly use water, or as I understand it, in very cold climates, there's a little bit of antifreeze in the water. Is there any innovation around that? Is there any thought that like some other kind of fluid might carry heat more efficiently? Is there any looking into that or is water, you know, good enough here?

Kathy Hannun

There is looking into that and thought about that. Absolutely. Water's pretty good. But the type of antifreeze you use can matter. So, what's standard in the industry today is propylene glycol, which has some nice properties. It's not toxic, it's pretty inexpensive. But the viscosity of the fluid increases as the fluid gets colder. So, as you reach your sort of highest heat loads, like the end of January, your loop is the coldest it will get. You need to make sure your viscosity doesn't increase too much to get in the way of your pumping requirements. And there are other non-toxic antifreezes that have better properties than propylene glycol.

They're cheaper, they have lower viscosity when it's cold. In every way, they would be better, but they're not allowed in many of the places we operate. Again, another element of us being a relatively young and unscaled so far industry is that a lot of the regulations just chose "You must use propylene glycol." I wish the law was something like "You must use a non-toxic antifreeze that has these properties that are good for customers." Like, it's not about not having the regulation. It's just sometimes they're written in a way that doesn't leave a lot of room for innovation. And so, it's something that we're working on. I think that particular lever isn't the most high potential of all the levers for reducing costs, but like, why not use an antifreeze that's better in every way? And so, that is the type of thing that we're thinking about all the time at Dandelion.

David Roberts

And are you committed to just doing houses or are you, do you want to do commercial and multifamily buildings?

Kathy Hannun

We absolutely do multifamily. So, we do residential, both single-family and multifamily today. And then, we also have a commercial drilling business. So, the boreholes that you install, they look the same sort of regardless of what the building is that they're serving. So, we will drill boreholes for any type of building. We're open for business on that.

David Roberts

Oh, interesting. Just like a "drilling as a service" type of thing.

Kathy Hannun

Yeah, exactly. So, we do that. But in terms of the actual sales that we make that include the interior as well as the exterior, we really do stick to residential, but we're open to all sorts of residential models, multifamily included.

David Roberts

And for a multifamily building, it's just one big unit and ducts to the different apartments. Right. There's no separate wall units. How does it work when it's a multifamily building?

Kathy Hannun

I mean, there can be different designs, but what's typical is you might have small units in utility closets. So, actually, units in each apartment and then water going to each of those units. That would be sort of a typical design you might see for multifamily.

David Roberts

And so, another thing you ran into and decided, "screw it, we're going to make our own" is the heat pump itself. You have developed your own heat pump called Dandelion Geo. I have wondered about this a lot over the years as I've been talking about heat pumps with people, just whether there's much innovation in the heat pump itself. The actual heat pump unit itself. I hear weirdly little about, relative to like, batteries, where you're hearing about fundamentally new chemistries every five minutes. Just weirdly little talk around innovation in the heat pump space.

You made your own heat pump? Why and what are its advantages?

Kathy Hannun

My impression when I started the company was that there was no need to make a heat pump because it's such a mature and large category. It was like, what could a startup offer? What we ran into is the US geothermal market is quite isolated from the rest of the world. One reason for that is that it's a niche industry, low volume, but also Americans tend to use ducts for heating and cooling and that's very unusual in the world. The Europeans use geothermal, but it's all water to water heat pumps.

David Roberts

Like water radiators, type of deal.

Kathy Hannun

Yes.

David Roberts

And you don't have those, you couldn't if I had an apartment building running that had radiators in it, you don't have a water to water heat pump that you could use in that case?

Kathy Hannun

So, the heat pump we developed is specifically for our retrofit market. There are a lot of homes with radiators in the Northeast US, but those radiators tend to have a much smaller surface area than the radiators you find in Europe. That matters because the temperature of the water that goes through the radiators in the Northeast is very high.

We ran an analysis that was like, "What would the efficiency be of a geothermal heat pump that would serve radiators at that temperature?" And how does that compare to just installing mini splits, air source mini splits in the home? And it's like the same or low. You know, there's like no advantage once you have to make water that hot. First of all, it's hard to do with the equipment available on the market.

David Roberts

That's just your compressor doing that. It's whatever is pulling the heat out of the water and concentrating it. Would it have to just work much harder?

Kathy Hannun

We would have to get it to such a high temperature that your efficiency falls off. And it's kind of like, why are we even doing geo anymore? And you don't get air conditioning. So, the other thing about mini splits is you would get air conditioning. So, probably a better product would be sort of like a geothermal mini split, which doesn't exist yet.

David Roberts

Yeah, that literally doesn't exist, or they just don't have them here?

Kathy Hannun

There's a geothermal VRF (Variable Refrigerant Flow) system that you can buy from Samsung. And we did experiment with that a little bit a few years ago, offering it because we do have customers with radiators that want geo. But it was very complex, very expensive. It wasn't a scalable product. So, we discontinued offering it. So, I'm sorry this is so circuitous.

David Roberts

No, I love it.

Kathy Hannun

So anyway, the US market's a little bit on its own because there's not a lot of manufacturers around the world making water-to-air geothermal heat pumps. The market that does exist here, which is very small, has optimized its geothermal heat pumps pretty much for new construction in the Southeast or in warmer climates. I think that is just an artifact of historically heat pumps having been most common in the Southeast. So, what that's resulted in is the geothermal heat pumps on the market today in the US are optimized for cooling, not for heating.

They do both, but they're designed to be better at cooling than at heating. And they just didn't have some features that we thought would be really useful. So, those features include: We developed a heat pump that is optimized for heating. First of all, since we really target customers in colder climates, that allows it to operate more efficiently in heating. It can also produce more heating capacity for a given compressor size. Meaning, like if you get a nominal 5-ton heat pump, the Dandelion Geo will just produce significantly more heat than a competitor. Which is useful because a lot of retrofit homes need a lot of heat because they're not necessarily that well insulated.

We also designed it to tolerate lower entering water temperatures. So, when you design a geothermal system, you size the ground loop by answering the question with a model: How long does this ground loop need to be so that it never goes below 30 degrees Fahrenheit? And 30 degrees is just the industry norm. It's what a lot of heat pumps are designed for as a minimum. And so, we thought, you know, what if you designed a heat pump to be totally fine and produce enough heat at 25 degrees Fahrenheit or 23 degrees Fahrenheit, you know, like that allows you to significantly reduce the length of the ground loop you need.

So, we are able to install, I don't know, 20% less ground loop and still deliver the same amount of heat as a different heat pump. So, it's like this small change you can make to the heat pump to actually save a lot of money on the ground loop. So, we did that. The heat pump also is designed to need a lot less electrical capacity. And the reason for that is in the air source heat pump paradigm, you often have an air source heat pump that needs to be supplemented by electric resistance sort of auxiliary heat.

Because the air source heat pump's capacity, its ability to heat will drop when it gets very cold out. So, it has an electric element to supplement.

David Roberts

Which is very intensive, electrically speaking, it uses a lot of electricity.

Kathy Hannun

It is. The geo industry had just adopted that same template to geo heat pumps. But there's no need to adopt it in exactly that way because the key advantage of geo is that even when the outdoor temperature drops significantly, the geo heat pump does not lose its capacity that much. And so, what we did, our heat pump still has an auxiliary heating element just in case something goes wrong with the heat pump. It's like a safety mechanism. But we've designed it so that only a small amount of that auxiliary heat is able to come on at the same time as the main compressor because you're never going to need more than a very small amount.

And so, that allows us to sort of share the electrical capacity between the compressor and the auxiliary heat because they'll never both be on at the same time. The reason that was useful to do is that a lot of homes that switch to heat pumps of any type run into the issue of not having enough capacity on the main panel and then they need to go through a main panel upgrade. It's very expensive and you have to work with the utility. It can be like $5,000 to $9,000 or more if you have buried lines. And it's just a big fiasco. So, we want to avoid that wherever we can.

David Roberts

Oh, right. And you do that by keeping electricity demand tamed?

Kathy Hannun

Right. So, our 6-ton heat pump, which is the largest size, needs about 60 amps of main panel capacity, whereas a competitor unit would probably need 120 or more. So, it halves the amount. And then the last feature, and then I'll give it back to you, but a lot of our retrofit homes were designed to work for furnaces, of course, and furnaces heat air to a higher temperature than a heat pump does. And so, as a result, you don't need your ducts to be as large because if your air is hotter, you don't need as much of it to carry heat.

So, that's a huge friction point for retrofitting ducted homes.

David Roberts

Do you find yourself having to replace ducts a lot or enlarge ducts a lot?

Kathy Hannun

We did all the time before we made this heat pump, but then we designed the heat pump to produce hotter air than is typical for heat pumps. So, that really reduced the need to fiddle with the ductwork, which saved everyone a lot of cost and complexity. So anyway, you're getting a sense it was just like the product that we wanted to exist that was really tailored to the retrofit case, just didn't really exist. And so, we decided it was worth it for us to create the product we wanted to exist.

David Roberts

Are you selling those independently? Like, are you selling them to other installers or other people?

Kathy Hannun

We aren't currently focused on that. We use them mainly for our own customers. The decision was now that we're so focused on the opportunity with new build, so we've really shifted our focus as a company in recent years from the retrofit market to the new construction market.

David Roberts

Can we talk about that for a second? I was going to ask you about that. I mean, I guess the reasons are sort of obvious. Economically, the proposition is more attractive to someone building up front; it's just cheaper when you're building up front. There's probably more standardization and scale available in new builds than in retrofits.

Kathy Hannun

100%.

David Roberts

But there are more built homes than unbuilt homes. Do you know what I mean? Like, you are sort of tackling the smaller side of the problem. Is the long-term vision to sort of scale up and then go back into retrofits with sort of lower costs and more learning by doing in hand?

Kathy Hannun

Yes, that is exactly right. Yes, I think it would have been hard to start the company in 2017 going after new build because we had no track record. The policy landscape was very different. You know, there weren't as many parts of the country where the value proposition made so much sense as it does today for those new build customers. And it's just a much easier and faster sales cycle and feedback loop to sell to homeowners.

David Roberts

Nice to make one deal with Lennar rather than 1,500 separate deals with homeowners.

Kathy Hannun

Exactly. So, we almost needed to get to a place of maturity as a company where we could go after the new construction market. And the policy landscape had evolved to make that opportunity very attractive. So, it is the better opportunity for us right now. And I think it is the better opportunity not just for Dandelion, but also to scale geothermal and to bring it into the mainstream because you have those advantages of standardization and scale. But then, yes, we absolutely want to use the cost reductions and the simplifications and sort of the improvements that come from installing so much geothermal at scale to then go back to the retrofit market and continue to chip away at the existing home problem.

David Roberts

That's the big one. So, I have some nerdy grid questions. Everybody wants to electrify. We all want to get off fossil fuels; we want to get off gas. But one of the big fears, worries, concerns is that in cold climates, if you move everything over to air source heat pumps, you're going to get massive winter spikes in electricity demand in places where often the grid was built around summer spikes, not built for winter spikes. And this, of course, has everybody worried about grid capacity, etc. So, one of the advantages geothermal heat pumps have over air source heat pumps is, as you say, they use about half as much electricity, which is when you're talking about scale, when you're talking about doing HVAC at scale, really adds up and could make the difference in places' ability to electrify.

So then, my question is: That's a grid benefit. That's a grid stability and capacity benefit. Do you have any way of getting compensated for that benefit?

Like utilities — let's talk about the utilities. D oing this, a utility in a cold weather area has a lot of incentive, you know, to do it with as little electricity as possible. Are they coming to you? Are you working out deals with utilities? Are they giving you some value? Are there ways of making that value manifest in the price, I guess?

Kathy Hannun

This is a question and a project that we are focused on, and I would say today those mechanisms for internalizing that positive externality to the grid are not well established, but I do think there's increasing recognition that that benefit really exists for geo. There was recently a DOE report that analyzed the difference between electrifying with air source versus air source and geo. And you would, you'll save like I think the stat was something like 24,500 miles of transmission lines.

David Roberts

Really eye-popping numbers when you add it all up.

Kathy Hannun

Can be avoided if we do geo. Yeah, that's what I love. I'm so compelled by geo because it's like relatively easy to put a ground loop under a home when it's being built. And you do it one time, and that ground loop will be there, and then you get benefits for the lifetime of the structure. Including, as you say, like, you need less generation capacity, you need less transmission and distribution capacity.

David Roberts

Less T&D and T&D is the expensive thing now.

Kathy Hannun

It is so hard to permit, so hard to do. Why not just put in a ground loop? You know, it's just like putting in the infrastructure underground so you can avoid the infrastructure above ground, and then the homeowner benefits because they pay half as much. But anyway, to your question about, like, is there a way to monetize this? That is exactly the type of problem that we exist as a company to try and solve.

David Roberts

I mean, you would think utilities would be joining you in this effort somehow. Like, are you finding them cooperative? You think they would be coming knocking on your door?

Kathy Hannun

I think that utilities are starting to see the problem and understand it more. They see the challenges with electrification using air source and then start to learn that geothermal heat pumps are even a thing. I think, like a lot of people, they don't think of geo at all. And those who know about it, they think, "This is not scalable, this is niche, this is luxury." Because that's historically what it's been. So, I get that. But what I'm hoping that we can show with this Lennar project and with other projects we're doing is: actually, it is quite scalable.

And if it wasn't, Lennar certainly wouldn't be doing it. They're a very pragmatic, very mainstream home builder. And I think once people start to see this as a real option, hopefully, we will succeed in getting the value that these systems will deliver to the grid translated into an upfront incentive because that will allow it to be adopted in many more places.

David Roberts

Right. Like, if I'm a utility and there's a builder like Lennar in my service area, and it is debating whether to go air source or ground source, and I'm resource constrained, I have every incentive to go to that builder and nudge them. It seems like utilities ought to be more active in this. My second nerdy question is one of the things I noticed that you built into your heat pump that you built yourself is some intelligence. Some digital controls, some online-ness.

Which is raising the question, everybody's favorite subject, you are now installing a bunch of devices that you can communicate with and control centrally. So, have you thought about VPPing your GSHPs? By which I mean, coordinating your geothermal heat pumps in a way that is helpful to the grid from a central location. Like, is that on your radar?

Kathy Hannun

It's something we've talked about. But, you know, it's kind of funny. One of the implications of the fact that geothermal heat pumps are so efficient, even when it's very cold or very hot out, is it's actually less valuable to control them in that way than it would be if you had a much less efficient piece of equipment.

David Roberts

Because you're not actually moving that much electricity around, because they're not using that much electricity in the first place.

Kathy Hannun

That's right. So, whenever we've run the analysis, the value we could earn by doing that was just not worth it to actually go through the effort. But that could change. I mean, certainly if that changes and the incentives are there and it feels like something that would be good for our homeowners, we would absolutely be excited to try something like that.

David Roberts

That's funny. Like, we use so little electricity, it's not worth it. That's a good problem to have, though.

Kathy Hannun

It is, it is. It's like you just put a ground loop in and then that's all you need to do. Set it and forget it.

David Roberts

Well, here's something I really want to press you on, and it's something that has bugged me since I first found out about you all and found out about ground source heat pumps in general. It really comes up with, like this Lennar thing, which is the only way to make heating those Lennar homes more efficient than putting ground source heat pumps is all those houses having heat pumps inside them, but sharing a field of pipes, sharing pipes, basically, rather than having each their own individual installation of pipes in their yard. It seems to me just sort of like mathematical that you're going to save if you have multiple homes sharing the same field of pipes.

And I can see why that's super difficult to engineer in the retrofit market, because you would need multiple homes right next to each other, all wanting to do it at the same time, etc. But in new construction, why on earth not just build a big shared field of pipes?

Kathy Hannun

Well, I'm glad you asked, but I am a little more skeptical that you would save a lot of energy by connecting all the homes. I mean, let me start by saying the reason that we are doing individual loops is that again, we're just focused on scalability, simplicity, cost effectiveness, and one loop, one home. It's just very simple, very scalable. You know, it's very resilient. If something goes wrong with one home's loop, none of the other homes care or notice. Just like you don't need any fancy operations or maintenance on the system. It's just super simple. So that is appealing.

But let's just go to the other part of your question, which was an assumption that connecting them would lead to a more efficient system. So, I see the argument that you're diversifying the users of heating and cooling. And through that diversification, you might have more variability in your usage, which might allow you to get away with slightly less loop than if each home only has one loop. But I will say, like, all the homes are homes. And so, they're all going to have the same assumptions around.

David Roberts

Yeah, this is not a mixed-use. It would be different if it was a mixed-use development, sharing a network. If it's all homes, they're going to have probably like roughly synchronous demand curves.

Kathy Hannun

And certainly, the loop would have to be designed assuming that they have identical demand. It's like no one is going to be cooling, while some — you can't assume some of the homes will be cooling while others are heating. They're all going to be heating at the same time. They're all going to be cooling at the same time. And then if you connect the loops, all of a sudden your underground infrastructure becomes way more expensive and you have way more pumping energy you need to pump the water everywhere between all the homes. You have to do a lot more excavation to connect all the loops.

You have a lot more maintenance. You might need to actually create a separate pumping station to manage all of it. It's going to be a lot more. You might actually use more energy just because you're going to be using a lot more pumping energy than you will be using with individual. So, I think in the case of like an urban center where you have commercial buildings next to residential buildings and some are heating and some are cooling, then it makes a lot of sense.

David Roberts

And some buildings have a lot of waste heat, like your data center, your factory, or whatever has a lot of heat that can dump into the network.

Kathy Hannun

Yeah, if you had a data center in South Dakota next to a neighborhood, that would be a great option. But if you just have a bunch of homes in Denver, Colorado, a single loop is the way to go.

David Roberts