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We’re going to be talking about the current incoherent world of US ENERGY POLICY.
ANNA KRAMER joins the podcast to help us get our arms around the future of energy in the United States. Anna is a reporter for NOTUS, a non-partisan longform journalism outlet. She has written a series of stories on the the disconnect and frustration around US Energy Policy and paths forward.
We talk about:
- The chaotic policy at the federal level (and beyond)
- The huge cost overruns and administrative complexity
- The role of nuclear
- The increased energy demand in this country
- Finally, we muse about what can be done about it going forward.
Outline
Section 1: The US Energy Policy Transition:
The Goals and the Problem. Discussing Brandon Shores Coal Plant and electricity prices in the Mid-Atlantic Region.
https://www.notus.org/policy/biden-clean-energy-coal-maryland-brandon-shores
https://www.notus.org/policy/electricity-prices-spiking-biden-clean-energy-transition
https://www.notus.org/policy/nuclear-power-energy-crisis-cost
- Evidence that the transition is happening. Electrifying = efficiency. Cheap wind and solar, look at the free markets in Texas — ballooning wind and solar there
- The reliability, capacity, and resource problem: Needing certain amounts of energy and voltages at all times of day. Leads to keeping coal plants online past scheduled retirement dates, plus spiking prices
- How much do emissions and climate change goals matter to the industry? What role does nuclear energy play?
Section 2: Interconnection Queues and Permitting Reform. Bipartisan and Industry wish for Permitting Reform: Why is it so hard for US Energy Policy?
https://www.notus.org/policy/permitting-reform-bill-manchin-environmentalists
https://www.notus.org/policy/solar-farm-culture-war-biden-climate-change
Section 3: Trump’s US Energy Policy “dominance agenda” disappointing every part of the energy industry.
Idea is not aligning with reality.
DOGE cutting into the basic functions of energy governance.
https://www.notus.org/policy/doge-cuts-trump-drill-baby-drill
https://www.notus.org/policy/donald-trump-tariffs-trump-energy-agenda
Transcript
Frazer Rice (00:01)
Welcome aboard, Anna.
Anna Kramer (00:03)
Thanks for having me, really psyched.
Frazer Rice (00:04)
I went through a bunch of your articles covering the power industry and energy generation and a lot of things that are happening federally, state level, and it’s going to be a lot to get our arms around, but you were the person to do it. So just generally speaking, we’re at a point in time with energy and transition ⁓ that policy is moving. Maybe take us through a little bit about the goals and the problem we face.
Anna Kramer (00:31)
So there are sort of two, I would say, competing problems right now. ⁓ The first one is load growth, which means basically more demand on the electricity grid.
And that is something that we haven’t seen in this country in decades. for really around 2000 up until maybe a couple of years ago, energy demand on the grid has been fairly constant or even declining slightly. And the reason for that is that everything has become more efficient. Like every appliance you use, every light bulb, your car, everything that could possibly have a demand on the grid is more efficient than it used to be, which is awesome.
There’s a lot of wonderful benefits that we get from that, including the fact that for a long time utilities and transmission planners and states and the federal government have not really ever had to think about the grid or about like where you get your power aside from these sort of technical conversations that the average person doesn’t really pay any attention to. That has really started to change as of the last few years.
There’s a large number of reasons for that. Basically for the first time in decades we have significant demand expected on the grid. We expect it to grow over the next several decades. The reasons for that are widespread and hotly debated. A lot of people talk about data centers and artificial intelligence which require huge amounts of energy to power
At the same time, there’s a lot of research that shows that some of the larger sources of demand are actually going to be manufacturing facilities built in the United States for things like semiconductors. Electric vehicles are a huge demand source on the grid. Basically, the more that we electrify, the more demand there is on the grid. So for the first time in decades, we have the need for a lot more power. And then at the same time, we also have climate change. And for those who really care about
With the emissions we create in the United States or globally, there’s a compelling argument that we should be addressing the emissions from the power sector. These are quite significant between coal and gas plants, and then the emissions that come from regular vehicles.
Those are somewhat competing because if you have increasing demand on the grid, while you’re trying to reduce emissions, you’re both trying to transition the economy from fossil fuels while increasing the amount of power that’s available. There are a lot of competing tensions there.
Frazer Rice (03:06)
So as we’re trying to get more efficient ⁓ and we’re sort of transitioning to electricity, how do you think about sort of the downstream effects of that? To me, energy generation is a symphony of measures you’ve got in everything from coal, the natural gas, to oil, to nuclear, to hydro, to solar, ⁓ hydro or sort of hydrogen based things, that type of scenario. Getting power generated and where it’s needed, everything you just described, that’s the part that’s tougher for everybody to understand.
Anna Kramer (03:44)
Yeah, definitely. And this is really where all the debates come in because…
It’s not as simple as just creating the power in one place. The act of moving it to the place where it’s needed is complicated and equires transmission infrastructure. That’s the grid that everybody sort of sees, right? Your power lines, your substations. And there’s only a maximum amount of power that can move, know, or sorry, maximum amount of electricity. My power and energy sources would be very mad at me if I said power. There’s only a maximum amount of electricity that can move on any given part of the grid at any given time. So you need your transmission infrastructure to be really well built to sort of facilitate maximum movement of electricity to the people that need it. And it’s really hard to do that.
And our…Transmission infrastructure system in the United States is not well built. It’s quite old. It’s aging. It hasn’t been well maintained. There are some incredible technologies that can be applied to transmission infrastructure to make it better. They can make one line have the ability to carry a lot more electricity than it does currently. There’s a lot of politics around who has to pay for that.
When it comes to gas fire generation, one thing you can do is build a gas plant near a place that needs the electricity to minimize the transmission infrastructure that is needed. But there’s a lot of politics there too because the question is sort of like who bears the cost for building, for example, a gas plant next to a data center?
If a gas plant isn’t going to contribute to the transmission network, should they have to avoid the costs that somebody would normally have to pay in to maintain it. There’s so many complicated political questions involved in all of this ⁓ down and there’s so many fights about who pays for what. And at end of the day, the average electricity consumer doesn’t know any of this is happening and doesn’t want higher electricity bills. But we’re now in a situation politically and practically speaking where
Everyone has to understand how electricity moves around and everyone’s going to have to reckon with higher bills if we’re trying to meet all this new demand.
Frazer Rice (05:59)
So let’s take as a given, which it isn’t a given, but let’s take it that the costs could be figured out and we print lots of money and do all that stuff. Where does the world of NIMBYism kick in here? When do people say, “I don’t want the power line to go through my backyard or I’m worried about the externalities of a power generation plant within five miles of my house. I don’t want to breathe difficult air or radioactivity is a problem” – that type of thing.
Anna Kramer (06:04)
It’s probably the single greatest problem getting in the way of all of this. It’s not just NIMBYism necessarily. In general this very anti… It’s not just like I don’t want things built in my backyard, but people in general don’t really like to change the status quo, broadly speaking. So you have a number of things that happen there. The first thing is that…
Anytime you try to build a transmission line, takes years to longer to build it than it should because people are fighting it in in local systems. The same thing goes for a gas plant and wind turbines. The same thing goes for a coal plant that, you know, might need upgrades and instead the local community wants that coal plant to close because of air pollution issues.
But it’s even broader than that. One of the stories that I wrote was about a solar farm that was going to be built in somebody’s backyard. Basically they have a large farm, they were gonna cover a lot of the land with solar panels because the farm isn’t financially sustainable and the solar panels were going to help.
And the local community essentially revolted against the farmer and prevented them from building the solar infrastructure. Not necessarily because any of them would ever interact with or see it, but the idea that this solar farm would sort of change the constitution of the community was so revolting to so many people that they essentially made this family like local pariahs.
So it’s important to understand like just how passionate people are about energy infrastructure and specifically how much they don’t like changing it. And that has so many weird political ripple effects.
You see, you know, members of Congress coming out against a plan that would make a lot of sense to lower electricity bills in their district because of the fact that that plan will upset a local community in the process.
It’s such a huge problem. I’m sure we’re going to talk about this more. There are also a lot of federal, state and local rules and regulations that enable communities to prevent anything new from being built. It’s really important to understand how big of a problem those rules and regulations can be.
Frazer Rice (08:38)
Well, you combine federalism with sort of consensus-based decision-making and you can turn something that doesn’t, that shouldn’t take much thought into a multi-decade process. So we’ll talk about that in a second.
But one of the problems I think that’s interesting is sort of in terms of understanding what is important about energy policy is sort of the physics of it in many ways and having a reliable source of energy that has the capacity and ⁓ the resources to support it.
Maybe talk a little bit about that. mean, it goes to the idea of if we like the idea of climate change addressing that and incorporating other types of energy, but then it’s not there for you when you need it, that’s a problem.
Anna Kramer (09:05)
Huge problem. Yeah, so basically we all take for granted that our electricity system in the United States just kind of works. We’re not experiencing regular blackouts. That is because there is enough power of different types, all the time, to maintain this extremely complicated system.
I’m not going to get too far into the physics of it but basically the voltages really matter and the amount of baseload electricity that sort of keeps the grid moving really matters and you need to be able to control precisely how much electricity is moving through the system in different places. And there are parts of the system that are extremely sensitive.
Without perfect control of how much is pulled off and put on the grid at the same time, you get this risk of a blackout or a grid collapse. It’s way more complicated than that at the end of the day. But the reality is that our grid system works very well in part because we have sources of energy that you can call upon ⁓ in times of crisis, especially, and those sources of energy tend to be fossil fuels- coal and natural gas for the most part.
They’re critically important for those moments where suddenly you have a huge amount of demand on the grid. You need to meet it. Otherwise, what’s being sucked off of the grid is going to cause the whole thing to collapse. They’re also important for maintaining this sort of base load power. One of the other things that works here is nuclear power, which is utterly critical for this base load element where you basically have some guaranteed amount always flowing into the grid at a certain time.
Nuclear provides that sort of certainty in a way that literally no other resource can. Nuclear is not so great for the other side of the coin when you have something where you really need an extra amount of electricity pulled onto the grid, sort of at the last minute in order to prevent collapse because of increasing demand. That’s the kind of situation where natural gas-fired power plants tend to be extremely helpful because you can just burn more gas. So…
The fossil fuels and the nuclear tend to be really, really valuable baseload power, and they’re really, really critical for making the grid function.
Frazer Rice (11:39)
You wrote extensively about this related to the Brandon Shores problem and ⁓ sort of what looks like a spike in consumer, how much they’re going to be paying for it in the mid-Atlantic region. Maybe talk a little bit about that because that gets back to the concept of people wanting to shut down coal for good reasons, but then you go and do it and it has all these spillover effects that no one really likes, i.e. you get your, in New York, your Con Ed bill at the end of the month and you go, what the hell happened?
Anna Kramer (11:49)
Mm-hmm. Yeah, exactly. So what’s happening in Maryland is that Maryland is an electricity ⁓ importing state. Basically, they consume way more electricity than they produce there. So the few things they do have that make electricity are extremely valuable, including a large coal plant called Brandon Shores.
The coal plant was scheduled to shut down. I think this year actually was the formal shutdown date, retire. And that it was gonna retire for a number of reasons. It’s not terribly economical. The Sierra Club and state regulators applied pressure shut it down because of the polluting effects of the plant.
The the shutdown would have essentially created this problem that I was talking about with your grid physics, where you can’t maintain the appropriate. sort of voltages and flow of electricity that you need for the grid to function normally.
The grid operator, the large organization that manages the regional grid, is called PJM, It made the decision that they have to force the coal plant to stay online for several more years. before they can build the transmission. AKA all the wires that I was talking about, that could compensate for the loss of the coal plant.
But…when you don’t want the grid operator forcing a coal plant to stay online because it’s extremely expensive. That’s not an economic, there’s no economic logic that’s inducing that coal plant to stay online. PJM is saying, “we’re going to force the rate payer, you, with your electricity bill to bear the cost of keeping a plant online that was supposed to otherwise retire.” This isn’t just happening in Maryland, this is happening all over the country.
You have a plant that’s supposed to shut down. Then everyone goes, “my God.” There is nothing else that we have available to address this problem. We have to pay to keep it online even though it wasn’t supposed to be. So there’s huge problems here in Maryland. It is complicated.
One thing happened over the course of the last year since I’ve written about this. PJM and then FERC, which is the… federal independent agency that regulates utilities and power in the United States have come to a conclusion. The way that was handled with this particular coal plant could have been done better and lower costs a little bit more. Yeah, unfortunately what’s happening now is…
Frazer Rice (14:27)
You’re like, “great, thanks!”
Anna Kramer (14:34)
Rate payers in Maryland are gonna see enormous increases on their utility bills this year. ⁓ The reality is there are probably over the long term are solutions that will sort of allow these coal plants to retire in more economical ways.
But because of this problem I was talking about earlier, it’s really hard to build new things now and really hard to change things. Those solutions are sort of stuck. This leaves us in a really weird kind of terrible place right now. We’re keeping coal plants online. It is the only option in large parts of the United States. The other options are too hard, expensive and too politically complicated to get done in the timeline that we need.
Frazer Rice (15:16)
One of the things, so I think we can all agree the grid needs to be upgraded. I don’t think anybody would contradict that statement. We could use lots of different types of power generation, whether it’s nuclear or solar or wind or whatever, which have their own expenses and issues.
Why is this so hard? I get, you know, this gets back to, you know, federalism and consensus and, you know, states interacting with people who have their own interests and red tape that goes with dealing with FERC and other regulatory agencies. But why can’t we get our arms around this and push this forward a little bit more efficiently?
Anna Kramer (15:48)
Yeah.
There are so many problems with US energy policy here that we could go into. The first and the biggest one is permitting. So permitting reform is like the catchphrase of every single person in energy world these days. Every conference I go to, every meeting I have, the number one thing on the wish list of any kind of company or industry group is permitting reform, which means changing the rules of how you get permits from the federal, state, and local governments.
US energy policy has complicated rules. They extend from environmental legislation, These environmental laws, passed in the 70s, try to reduce serious pollution effects, try to protect endangered species, that kind of thing. Some of the laws here that we’re talking about are NEPA. which is the environmental protection law.
We’ve got the Endangered Species Act. There’s historic buildings conservation. Tons of different kinds of laws that require all these different permitting processes that are really long and complicated. If a company, any company in industry could have one thing fixed, it would be permitting issues. That is insanely politically difficult.
We are just not at a place where Congress can reach the kind of compromise that they need to fix these laws. It’s basically like a toxic, horrible mess in Congress anytime anyone talks about it. Everyone says they want to do it However, the reality is no expert expects to see anything significant with permitting reform, at least in the next year, maybe longer. Congress is not really capable of that kind of compromise anymore.
Unfortunately, if it were to happen, a couple of folks have said to me maybe next year when they have to do reauthorization of the bill that will sort of manage the federal highway system, that’s like a must pass bill. So maybe there’s a way to end this. There are folks involved in that legislation that are the kinds of folks more inclined to compromise. So if there’s a chance, that’s when it would happen.
I’m not optimistic after all of the reporting and conversations I’ve had over the course of the last year that we’ll see that transformation. It doesn’t seem that likely to me, despite the fact that it is like the number one desire of almost everyone who works in or around energy. Yeah, there are others as well.
Frazer Rice (18:04)
So, maybe we’ll do one more besides permitting. I’m sure there’s a long list, but what else is there that’s causing the roadblock in US Energy Policy?
Anna Kramer (18:07)
So we have interconnection queue problems and the interconnection queue is the line that power companies get into to get permission from the grid to move, to build a new generation facility and connect it to the grid.
There is a reason they call it the interconnection queue. Tying something to the grid is a complicated physics problem. These grid operators need to very carefully do the assessment of what it’s going to cost to bring something onto the grid. They have to know whether it’s going to overwhelm that really complicated system that we’ve been talking about.
What has happened, and this is largely the fault of renewable energy, whether this is a good or bad thing is kind of a personal assessment, but… there are so much demand for new sources of renewable energy and it’s so easy to build some of it, especially solar and wind.
The projects are on average much smaller than your average gas, or nuclear plant that suddenly you have thousands of projects applying to interconnect to the grid across the country all at the same time. Up until now that has never happened before. Up until the last few years, it’s like a couple of gas plants would try to get online in one place in one year. It’s not that hard for a grid operator to sort of do the mathand figure out what it costs and whether they can connect.
Now you have thousands and thousands of generation facilities applying to get onto the grid at the same time across the country. You have no idea if any given project is going to break ground quickly. Or get online if they get application approval. So all the grid operators across the country are overwhelmed. They are struggling to process the applications to interconnect from these different generation facilities.
Suddenly you have this like huge quagmire that nobody can resolve. It’s like a massive tangled knot that has essentially stopped approvals for a large number of new energy generation projects.
The grid operators are trying to come up with solutions as is FERC. There are things that can expedite this. There’s a lot of pressure to expedite it now and to come up with some solutions. But the reality is that interconnection is now such a huge barrier to entry. It hasn’t improved yet.
Frazer Rice (20:30)
Crazy. So we have a new president in who in theory is taking a chainsaw to bureaucracy and supposedly wants to have an energy dominant policy where the US is, I guess, not only an exporter where possible, but so self-reliant that everything kind of works as well as possible. But that’s not necessarily the way the energy industry is seeing it. And the Doge efforts are a little bit at cross purposes. Maybe explain that.
Anna Kramer (20:40)
Yeah, absolutely. the president says he has an energy dominance agenda and the way he defines that is he’s basically going to do everything in his power to increase our energy production and export in this country.
If you were to actually do that in a sort logical way, there are a number of things that you would do, which involves some efforts on permitting reform, it involves speeding up the processing of permits. ⁓ You would support really every single kind of innovative energy technology.
You would support the production of basically every new source of energy, something a lot of Republicans like to say is an all of the above energy agenda is what they have, meaning they support everything without discrimination. ⁓ None of those things are actually happening, despite the fact that the administration says that’s what they’re doing.
The oil and gas industry was a huge donor to the Trump campaign because they assumed that this energy dominance agenda was going to benefit them enormously. Even folks in that industry are disappointed with where things stand right now. Not everyone, this is not an across the board assessment, but everybody that I talked to in my reporting has a lot of disappointment.
I had somebody who’s a huge Republican reform advocate for the energy industry say to me the Delta between what they expected and what’s happening is so much larger than he ever could have predicted.
He said this to me yesterday because folks are really, disappointed about what’s been happening. So I’ll give you a list of some of the problems here. ⁓
The biggest one now is the tariff and trade situation. Basically, the size and scale of the tariffs that Trump implemented or has threatened to implement are disastrous for anyone that produces anything. That includes energy, the costs for oil and gas drilling, the cost to build batteries and solar plants, the cost to build manufacturing facilities. Anything that you need to make energy in this country is way more expensive than it was before. That’s counterproductive to any kind of energy dominance. It’s a huge problem. Also, if tariffs do shrink the economy in any way or lower consumption or demand, that’s a huge problem. for the oil and gas industry. They can’t drill more, justify drilling more oil or gas if there’s no increased demand. Right?
One of the things that always happens when the economy shrinks is that oil prices plummet because there’s less demand. And that’s something that we’re already seeing. ⁓ That’s now the biggest problem.
Before this happened, DOGE was the biggest problem. DOGE made the cuts without very careful policy prioritization. This includes staffers, to rules and regulations, to offices and facilities, .So there are very talented federal government workers, or not so talented government workers, who do tasks that are essential for things to function. Especially they produce permits, which we’ve been talking about are very slow and complicated and a problem for folks.
If you fire the people who work on permits, it lengthens the permit time. If you fire the people who are really good at working on the permits, it exposes those permits to more litigation later, which also slows projects down.
Same thing goes for the folks who inspect an oil and gas rig, or somebody who makes sure a pipeline isn’t leaking, or somebody who inspects a transmission line. You need those federal workers ⁓ in order for all these companies to be in compliance with the law.
If they’re not in compliance, then the have litigation exposure. They have lawsuit exposeure, which slow things down. All the cuts happening across government. Because they have not carefully tailored the cuts to policy priorities, they hurt the administration’s agenda, unfortunately.
Frazer Rice (24:43)
What is the way forward on this? It looks like Trump’s been able to accept doing about faces every other day on lots of different things. Are we too far gone or is this something we can remedy?
Anna Kramer (24:51)
I mean, it really depends. I think theoretically, yeah, the administration could do a number of things to try to remedy this. There are certain things that are really, unfortunately, of difficult to fix at this point, especially when it comes to government workers. If you wage a campaign of war against government officials, if you make them feel as if their jobs are not important, why would the most talented people ever take a job in government?
This is the question that people ask me every day. It’s distressing. The administration hasn’t “ensured” that there are adequate staff to do the necessary work. Because even if you were to try to rehire or hire for very specific issues and hire the best people who work on those most specific things, why would the best people take those jobs, right? ⁓ That’s a question that people ask me every day.
A lot of folks who are really good at their jobs are leaving the Department of Energy. There are political appointees in the Department of Energy trying to come up with ways to persuade employees to stay. Because of how important their jobs are! They won’t stay. Why would you not take a job in the private sector?
So that’s the area that I think is unfortunately not that remediable at this point. Some of this other stuff that we’re talking about here. When it comes to policy choices, definitely, there are things that Trump could do. If only he could maintain a consistent trade policy and find a way to convince people that that’s the case.
That would be huge for the industry. Same thing goes if he decided to leverage his power to force Congress to get it together on permitting reform. That would be such an amazing win that people in the industry. They might not care about all of the other things that have happened. ⁓
As folks have said to me, there’s damage that has been done there that will be hard to undo.
Frazer Rice (26:52)
As we wind down here, Somehow we’ve managed to cover so much ground in 25 minutes. It’s unbelievable. I’m a big fan of having nuclear being a keystone of future energy policy. It’s expensive to put these things together. Lots of permitting issues, et cetera, What is the state of the union on nuclear energy in this country?
Anna Kramer (26:56)
I know. People have come around to nuclear sort of across the board ⁓ politically, which is huge. A lot of folks call it the second nuclear renaissance. We’re living in an era where it’s so politically popular. Enough people have finally understood that a lot of the safety concerns around nuclear are not sizable anymore.
Where we are with the technology is so good. The track record of nuclear is so good that a lot of folks are finally coming around to it politically. Most of these power plants last a lot longer than projected. Suddenly you have basically free energy after 50 years of a power plant.
Which is incredible! I mean that is such an insanely good asset to our grid. There’s a lot of people that agree with that now. We’re finally at a place where it’s you know, where it’s really popular The problem is that even with a strong deregulatory agenda that the Trump administration professes to have but has not yet implemented, nuclear remains bananas expensive to build. One of the few pieces of progress we’ve had in nuclear is the construction of the Votal Plant in Georgia.
This is the first new nuclear power plant to come online in a really long time in the United States. The utility commissioners there have said that they sort of regret approving this. It will be expensive for the people who are taking that power, you know, any of the ratepayers.h
Which is a real problem, right? How do you build new nuclear when utility commissioners across the country are suspicious of the cost. What will that bring for the people paying the electricity bills? There are a lot of answers to that question. The federal government could step in and subsidize in the early stages. You know, you could…find a way to get a tech company to pay for a lot of the costs. They really want the power for a data center.
There’s a lot of interesting theories going around. Theories about things that we could do to make it more affordable. Ironically, one of the most compelling arguments is a really strong policy around climate and around low emissions. That would really help justify the cost, the initial cost, because nuclear power is emissions free.
If you have financial incentive for emissions free power, it makes more sense to build nuclear power. If you don’t care about emissions, or greenhouse gasses, it’s harder financially to justify building these plants right now. It is a complicated problem, I have to say.
Frazer Rice (29:59)
Really, really cool stuff. ⁓ Anna, how do we follow you and your reporting going forward?
Anna Kramer (30:04)
Absolutely, so there’s a number of ways you can follow me. I’m on Twitter and blue sky on Twitter It’s Anna underscore C underscore Kramer. I write for NOTUS. We have a daily newsletter which encompasses everyone’s work, but
Anytime I write something large, it’ll be in there. If you’d rather sort of get a broader political newsletter. But otherwise, you can find me on Twitter or Blue Sky or LinkedIn, and I post almost everything that I write there.
Frazer Rice (30:35)
Great, I will have all of that in the show notes. Thanks so much for being on.
Anna Kramer (30:39)
Thank you, it was really fun.
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