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“In the case of fossil fuels, he doesn’t seem to recognize how quickly our ability to develop and deploy clean energy is growing — and how cheap that energy is becoming.”
If you’re looking for a relatively optimistic read on the fight against climate change, Tom Steyer’s new book is out today. Called Cheaper, Better Faster: How We’ll Win the Climate War, it dives into the billionaire’s perspective on the state of the climate crisis and the clean energy solutions helping the world decarbonize. Steyer’s perspective is informed by the many hats he wears — investor, philanthropist, long shot 2020 presidential candidate, Yale man, and co-founder of the investment firm Galvanize Climate Solutions.
I chatted with Steyer a few weeks ago about his book, his guiding investment principles, and how and why people become environmentalists. Here are three things I found noteworthy:
1. Steyer thinks Warren Buffett is making a bad bet.
While Steyer admits that “no one’s ever gotten rich betting against Warren Buffett,” he believes the billionaire investor has got it wrong when it comes to oil and gas investments. Buffett’s firm, Berkshire Hathaway, has a 28% stake in Occidental Petroleum and a nearly 7% stake in Chevron.
“Of the 8 billion people alive today, it’s possible that no one is better than Warren at predicting the future of commercial activity,” Steyer writes in his book. “But in the case of fossil fuels, he doesn’t seem to recognize how quickly our ability to develop and deploy clean energy is growing — and how cheap that energy is becoming.”
“He has generally been a very high minded, good guy,” Steyer told me. “[But] I look at these investments, and I don’t understand how those reserves can get developed without pushing us to a place from a climate standpoint that is unsupportable ... Every scenario like that puts us in a climate bind.”
Steyer ultimately likens investing in fossil fuels to betting on whale oil, a fuel that powered lamps in the 18th and 19th centuries. “We should not be rooting to keep the whale blubber business going and spending a lot of American tax dollars to support whale blubber. Because it turns out, that’s not the future. It’s really important for America that we be at the forefront of economic change.”
2. Galvanize Climate Solutions is more than a VC firm.
Steyer co-founded the climate investment firm Galvanize in 2021 with fellow investor Katie Hall. Last September, the firm announced that it had raised over $1 billion for its first fund, which targets investments in early to growth stage climate companies “that can drive meaningful decarbonization over the next decade,” according to Saloni Multani, co-head of the fund.
What helps set the firm apart is its variety of funding strategies. It not only makes venture capital investments in early stage companies, but growth equity investments to help companies reach scale, public equity investments (that is, purchasing stock) in publicly traded corporations, and even real estate investments. Last month Galvanize purchased its first building, an industrial facility in the Baltimore-Washington corridor that the firm aims to decarbonize via rooftop solar, mechanical upgrades, and other energy efficiency measures. The firm also plans to invest in and decarbonize apartment buildings, student housing, and storage facilities.
“We want to buy buildings and make them net zero and prove you can make more money doing it. We want to be in the early stage companies that are leading the tech revolutions. We want to actually be a partner in the public domain, owning stock and partnering with the corporate leaders, the CEO, the C suite,” Steyer told me. “So it’s an actual activist strategy, but as partners to the organizations that are trying to lead the revolution, not as opponents.”
3. The path to sustainability runs through economic self interest.
When I asked Steyer to what degree he’s been able to mobilize his friends and fellow billionaires to get onboard with the climate cause, he didn’t exactly say it’s been a rousing success. Instead, he emphasized that people end up making sustainable choices for a variety of reasons – and that it often starts with economic practicalities rather than climate consciousness.
“A lot of people think that you are an environmentalist, and then you put solar on your roof. But actually, I think you put solar on your roof, and then you become an environmentalist,” Steyer said. “I think getting in the game actually changes people’s attitudes.”
This ladders up to statewide politics around renewables as well, he said. “So if you think about a state where the elected officials have been very outspoken against renewables and climate response, it would be Texas. But if you look at Texas, they’ve tripled the amount of solar they have over the last three years. It’s expected to go up 35% more this year. They’re by far the biggest wind generator in the country. They’re not being nice. It’s a good deal.”
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While the impact so far has been light, there are some snarls to watch out for.
The American renewables industry is a global industry. While the Biden administration has devoted three-plus years and billions of dollars to building up wind and solar supply chains in the United States, many of the components of renewable energy generation — whether it’s the cells that make up solar panels or the 1,500-ton monopiles that serve as the foundation for offshore wind turbines — are manufactured overseas in from Spain to Denmark all across East and Southeast Asia.
With the members International Longshoremen Association on strike in the U.S. due to a contract dispute with the United States Maritime Alliance, shutting down ports up and down the Gulf and Atlantic Coast, one might wonder, what happens to U.S. renewables development?
The answer so far is: Not much. The closure of these ports’ cargo operations has not yet had a massive effect on the U.S. economy outside of businesses that work directly with the shipping industry, like trucking. There is no single port — or coast, even — that serves as a chokepoint for renewables-related imports. Many components from East and Southeast Asia come through west coast ports that are staffed by longshoremen in a different union, the International Longshore and Warehouse Union; shipments were being diverted there for weeks leading up to the strike.
That’s not to say the industry can simply coast through a prolonged strike. But there are some differences between different sectors, especially wind and solar.
Much of the wind industry, especially offshore, runs on foreign-manufactured equipmentthat is then processed and assembled in the United States. “Almost 70% of all wind-specific imports that are tracked through trade codes came from Mexico, Germany, Spain, and India, with the remaining imports mostly from Canada and various countries in Europe and Asia,” according to a Lawrence Berkeley National Laboratory report on the wind industry.
At least so far, much of the wind business — including the offshore wind business — appears to have largely dodged substantial issues from the strike so far.
Orsted’s work at three East Coast ports in Connecticut, Rhode Island, and New York has been unaffected, a source familiar with the situation told me. And the Portsmouth Marine Terminal in Virginia, where 70 of those monopiles have been shipped, is continuing to operate normally, according to the Port of Virginia. (Virginia's offshore wind industry is still vulnernable to vagaries of international trade — last year, Siemens Gamesa cancelled a plan to build a blade manufacturing facility in Virginia, where Dominion Energy is working on an offshore wind project.)
While the East Coast is an active hub of offshore wind activity, if the greater wind industry were to be affected by a prolonged strike, it would likely happen in Texas, which is both a major importer of wind equipment and has the country’s largest wind power sector.
Texas is “the dominant entry point” for wind equipment, according to the Lawrence Berkeley report, with almost $1 billion in annual wind imports.
At least one of those ports is still operating. The Port of Galveston is so-far unaffected by the strike, a port spokesperson told me. The port has become a major importer of wind turbines. In June, the port said that 400 wind turbine components had come through the port just since April, and that another 300 or so would flow through “over the coming months.” So far this year, some 25,742 tons of turbine pieces have come through the port, largely from Spain, Denmark, and other countries in Europe.
Neighboring Port Houston, however, is being picketed and “not handling container operations at this time,” the Houston Chronicle reported. In the run-up to the strike, Port Houston said that imports of wind power equipment had “increased notably” in August. In 2020, the port imported some 19,000 tons of wind power equipment.
The Houston area also has a number of recently opened solar manufacturing facilities, where cells, often imported from Asia, are assembled into panels. Proximity to the port was one reason why the manufacturers set up in shop in the area, according to the Houston Chronicle. “When you look at Houston specifically, you have one of the best ports in the country,” SEG Solar chief executive Jim Wood said in a company release when the facility opened. (SEG Solar has said it plans to start manufacturing cells domestically, though it currently makes them in Indonesia.)
Sophie Karp, an analyst at KeyBanc, forecast in a note to clients that some renewables manufacturers could be “disproportionately affected” by the strike. U.S. manufacturer First Solar “is the top importer at the Port of Houston,” Karp wrote, importing the equivalent of 17,200 shipping containers in the last year. The Korean solar company Qcells, meanwhile, which has made massive investments in Georgia, is a major customer of the Port of Savannah, which has been shut down due to the strike and has imported 31,400 container equivalents, according to KeyBanc. Karp also speculated that companies like the inverter manufacturer Enphase or the solar tracking company Array “are likely to have some exposure through their supply chains as well.”
“If the strike continues for an extended period, supply disruptions in the U.S. solar market are likely,” Karp wrote — especially for solar companies “that do not have ample inventory cushion on the ground.”
Trade disruptions are nothing new for the solar industry, which saw imports slow in 2022after the passage of a law meant to ban companies from subsidizing forced labor in Xinjiang in Western China, where much of the raw material for the world’s polysilicon is mined. Just this week, fresh tariffs were slapped on solar cells from manufacturers in Southeast Asia, which officials say function as cover for Chinese solar businesses. In fact, the California Chamber of Commerce specifically warned of congestion in the state’s ports as solar companies hurried up their purchases of panels ahead of the new duty.
So far, the solar and renewables industry has been quiet about the strike, in comparison to their unified voice on tariffs. Other portions of the electrical industry have been more vocal.
“The electroindustry is one of the largest manufacturing sectors of the U.S. economy, with one of the most complex international supply chains of any industry,” Debra Phillips, president of the National Electrical Manufacturers Association, said in a statement. “Over $195 million per day of electroindustry goods, representing nearly 30% of the nation’s electroindustry imports, is now stranded in unloaded cargo ships, threatening widespread disruption to our critical grid infrastructure.”
NEMA was one of more than 250 business groups that signed a letter published Wednesdaythat called on the Biden White House to “to take immediate action to resolve this situation expeditiously.” While one major clean energy group, the American Clean Power Association, signed the letter, others such as the Solar Energy Industries Association and Advanced Energy United, did not.
On Mayorkas’ warning, damage at the Palisades plant, and violence against women
Current conditions: Typhoon Krathon has made landfall in Tawain with 100 mph wind gusts • Hurricane Kirk became a Category 3 storm but is not yet threatening land • The October heat wave baking California has yet to break.
The death toll from Hurricane Helene is nearing 200, which makes it the second-deadliest hurricane to hit the U.S. mainland since 2000. Hurricane Katrina in 2005 killed 1,392 people. President Biden and Vice President Harris toured affected areas yesterday, alongside Homeland Security Secretary Alejandro Mayorkas. “We have towns that have disappeared, literally,” Mayorkas said. “This is a multi-billion-dollar, multi-year recovery.” Search and rescue operations continue in remote Appalachia, with nearly 5,000 federal personnel on the ground. Mayorkas said the government had shipped “over 8.8 million meals, more than 7.4 million liters of water, 150 generators, and more than 225,000 tarps to the region.” He warned that FEMA “does not have the funds” to get through the rest of hurricane season.
Meanwhile, election officials are working to restore some level of secure voting access in hard-hit North Carolina, a battleground state in the upcoming presidential election. More than 190,000 people in the state had requested mail-in ballots before Helene, but the Postal Service has suspended operations, Gristreported. “The destruction is unprecedented and this level of uncertainty this close to Election Day is daunting,” Karen Brinson Bell, one of North Carolina’s top election officials, told reporters.
A new report from the Federal Reserve Bank of New York found more than 1 million homes (and their 4 million occupants) in New York, New Jersey, and Connecticut are at serious risk of flooding – ranking among the top 25% of riskiest properties in the country. This includes some inland areas like Buffalo and Newark. In Brooklyn, the number of households at risk exceeds those of anywhere else in the tri-state area. More than 400,000 of the buildings that are at risk of flooding in these states are located in low- or moderate-income communities. “This risk has grown in recent years and is projected to continue increasing,” the report said.
Federal Reserve Bank of New York
The Palisades nuclear plant in Michigan has damage in its steam generators that “far exceeded” estimates, according to the U.S. Nuclear Regulatory Commission. The plant shut down in 2022 but is aiming to re-open late next year. This week the Energy Department finalized over $2.8 billion in loans and grants to help restart the plant and generate emissions-free power. The NRC found that 1,163 steam generator tubes showed signs of stress corrosion cracking, which the plant’s owner, Holtec, said it wasn’t surprised given that the plant was not maintained during its shutdown. Holtec said the damage would be repaired and that they’re still on track to re-open next year. “Steam generators are sensitive components that require meticulous maintenance and are among the most expensive units at a nuclear power station,” according to Reuters.
Over in Illinois, the first large-scale industrial carbon capture and storage facility in the U.S. is reportedly leaking. Archer-Daniels-Midland has paused operations at the site in Decatur after signs of a potential brine fluid leak were detected at the end of September. Some locals are worried the facility could threaten drinking water, a concern ADM has dismissed.
A new study published in the journal PLOS Climate finds that some “climate shocks” – like storms, floods, and landslides – are associated with a rise in violence against women that can linger for two years. The researchers examined data about intimate partner violence taken from 363 surveys across 156 countries between 1993 and 2019. They compared this data to climate shocks and found a significant link. The relationship was exacerbated in poorer countries. Interestingly, climate shocks such as earthquakes and wildfires did not appear connected to higher rates of violence against women, but the researchers can’t figure out exactly why. “We need further work to understand why these disasters impact on violence against women, and climate resilience strategies need to consider how to integrate violence prevention in the future,” said study co-author Dr. Andrew Gibbs, a social psychologist at the University of Exeter.
Tesla announced third-quarter sales figures yesterday, revealing that global sales were up 6.4%. This marks the first quarterly increase this year, perhaps signaling an EV rebound.
This is a special Hurricane Helene edition of Shift Key. Our regular programming will resume next week.
Nearly a week after Hurricane Helene made landfall, we are still coming to terms with the scale of its destruction. The storm killed at least 182 people, making it the deadliest cyclone to make landfall in the continental United States since Katrina. From Tampa Bay to Asheville, North Carolina, it caused the worst hurricane-related damage in a century.
Why was Hurricane Helene so bad? Why did it cause such horrible flooding in western North Carolina, South Carolina, Tennessee, and Georgia? And did climate change have anything to do with its destruction? To answer these questions, Rob and Jesse speak with Gabriel Vecchi, a Princeton geoscientist and one of the world’s top experts on hurricanes and climate change. Shift Key is hosted by Robinson Meyer is the founding executive editor of Heatmap, and Jesse Jenkins is a professor of energy systems engineering at Princeton University.
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Here is an excerpt from our conversation:
Jesse Jenkins: One of the things that always strikes me, too, about these sorts of events is, you know, think about a dam or a levy, right? It is resilient to the point where it’s not, right? You can have one more inch of rainfall, and that’s what it takes to overtop the dam, or to flood the river banks, or these kinds of things.
And so we have designed so much of our civil infrastructure for these one-in-100-year events, what used to be one-in-100-year events, right? The design specs were for that infrastructure. And now those probability distributions are shifting, and the kinds of events that can overwhelm the design basis of this infrastructure are much more probable.
And you go, it’s not like this event was 20% more intense, and so the damage is 20% more. It’s a binary thing. You go from something that our systems were designed to handle to something that they weren’t, and they break in spectacularly damaging ways. And that’s what I see when I look at these kinds of events. This is not the first flooding that we’ve seen in Appalachia, right? We have built out a flood control system because this happens in river valleys in the mountains, where water gets concentrated.
But this kind of rainfall event was so catastrophic because it just overtopped all of that infrastructure. And like you said, there’s very little you can do, once the infrastructure is fixed, to prepare once you see a storm like this coming. We have to really rethink all of the civil infrastructure planning that we’re doing, and that’s just going to take so much time and so much investment.
Gabriel Vecchi: Well, but I think you’re getting there to the issue of the time scales, right? So the National Weather Service did a phenomenal job of predicting this. But this could only be predicted on time scales of days. In order to change our infrastructure, in order to find an infrastructure that is better, it’s a question of years and decades, and maybe longer. And I think there, we need to be forward-thinking. It is important to see this as a call to think about what can start doing now so that in 10 years, in 20 years, whoever is in this situation is in a better position to handle whatever’s there.
Part of it, of course, is going to be to improve our forecasts, to make them longer range, more reliable, capture the universe of possibilities that a weather event can throw our way. But part of it is going to be relatively … maybe sophisticated is not the right word — build actual things on the ground that are different, right? Put rebar in concrete places, rethink the way that we site our buildings, rethink the way that we, where we take water up from. And one way to look at that is as a challenge. Another way to look at that is an opportunity.
I went to, initially, to college, I wanted to be an engineer. I wanted to build bridges. That was my, coming out of high school, I want to be a part of building things. And as I was in college, I realized, number one, I couldn’t take any electives. I didn’t like that. But number two, we weren’t really building many things. And it was sort of like, I wanted to build things right now.
We’re in a position where we do need to build things. We should be building a lot of things. This is, in a way, a call to opportunity.
This episode of Shift Key is sponsored by …
Watershed’s climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.
As a global leader in PV and ESS solutions, Sungrow invests heavily in research and development, constantly pushing the boundaries of solar and battery inverter technology. Discover why Sungrow is the essential component of the clean energy transition by visiting sungrowpower.com.
Intersolar & Energy Storage North America is the premier U.S.-based conference and trade show focused on solar, energy storage, and EV charging infrastructure. To learn more, visit intersolar.us.
Music for Shift Key is by Adam Kromelow.