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Robinson Meyer:
[0:46] Hello, it’s Friday, May 22. One of my big beliefs is that we’re living in a time of environmental victories that are huge, but that we don’t notice because they’ve become normal.
Robinson Meyer:
[0:57] Whales and dolphins regularly play in New York Harbor and its environs, for instance. Seals have returned to the beach in Cape Cod. And the air quality in Southern California is often pretty good. Now, it’s actually not pretty good today because there’s a brush fire right in the vicinity of Los Angeles. But even the fact that there’s a wildfire burning so close to Los Angeles and the AQI reading, the AQI index in Los Angeles is in the 50s, which is considered moderate, is by itself huge. Today, we’re talking about how this happened, how Southern California cleaned up its air pollution, to some degree why the story of cleaning up Southern California’s air pollution is the story of cleaning up the world’s air pollution, and why any of this matters. My guest today is Ann Carlson. She’s the Shirley Shapiro Professor of Environmental Law at UCLA. She’s the former acting director of the National Highway Traffic Safety Administration during the Biden administration. And she’s the author of a new book, Smog and Sunshine: The Surprising Story of How Los Angeles Cleaned Up Its Air. I would say, even before Ann was in government, she’s someone who I regularly called to understand car and truck pollution and how we handle those things in the U.S. And I learned so much from her new book, which is out last month from the University of California Press.
Robinson Meyer:
[2:09] Today on Shift Key, we’re going to talk about that new book, why Southern California has such terrible air pollution, how it initially misdiagnosed the causes of that pollution, how it eventually got them right, and why any of this matters today. I’m Robinson Meyer, the founding executive editor of Heatmap News, and it’s all coming up today on Shift Key. Ann Carlson, welcome to Shift Key.
Ann Carlson:
[2:33] Thanks so much. It’s great to be here, Rob.
Robinson Meyer:
[2:35] First of all, it’s so great to have you on Shift Key. I feel like it’s worth just saying before we get into it, we talk all the time, especially back, I feel like during Trump 1.0, we talked all the time. And then you had an illustrious turn in the government. But after years of talking to the phone, we finally met last month. So it was so good to meet.
Ann Carlson:
[2:50] Yes, it’s great to meet.
Robinson Meyer:
[2:51] So Smog and Sunshine is about the history of how Southern California went from having some of the most polluted air in the United States to having some of, if not the cleanest, extremely clean air. I think especially clean given the geography, which we can get into. Why is the fight to clean up Southern California and Los Angeles’ air important?
Ann Carlson:
[3:14] It’s important for a number of reasons. One, because it’s an extraordinary accomplishment. And it’s an accomplishment that could not occur but for government. We’re in an era where federal civil servants are being cut at rapid numbers. They are being pilloried as part of a deep state. And this is a story that shows why government is so important. The private sector would not have cleaned up Southern California’s air without the push of local government, state government, and ultimately the federal government. And it’s a story we need to tell. I think it’s also important because the reputation of Los Angeles continues to be that we have filthy air. And I don’t think everyone understands just how extraordinarily bad it was. A number of years ago, I grew up here, so I know firsthand how bad it was. And so I think it’s really important to remind people how bad it was and, again, what we’ve accomplished.
Robinson Meyer:
[4:10] Can you give us a sense of just how bad it was and how clean it is now? I’ve been to Los Angeles. It was beautiful. The air was not bad. But can you give us a sense in terms of maybe the numbers, just like how bad did L.A.’s air used to be and what is it like today?
Ann Carlson:
[4:27] Let me focus on a few different pollutants because we experience them all here. One is carbon monoxide, which used to come out of the tailpipes of vehicles in much, much higher concentrations. California set a carbon monoxide standard before the federal government did. And in 1964, Southern California violated on 366 days. It was a leap year. We don’t violate the carbon monoxide standard that was a tougher one that the federal government has set anymore at all. Let’s take lead, which is probably the single greatest public health story when it comes to air pollution that exists. We all used to use leaded gasoline. The catalytic converter couldn’t be used with leaded gasoline, and so we transitioned to unleaded gasoline. That had two effects that you can see numerically. One is that concentrations of lead in the air in Southern California were 50 times higher than they are today. That’s 5-0. And concentrations of lead levels in kids in the 1970s, when we first started measuring them, were 1,000% higher than the lead levels that were found in the kids in Flint, Michigan, after the drinking water crisis. And then we can talk about ozone pollution, because that is the pollution which we continue to struggle with. We continue to be what’s called an extreme non-attainment zone for ozone.
Ann Carlson:
[5:50] And that’s a real problem. And we have an ozone problem. But that problem is so much lower than it used to be. We violate federal standards at a much lower level, still on way too many days. But again, just to put this into context, we used to have these things called smog alerts. If you grew up in Southern California in the 70s, 80s, 90s, you knew about smog alerts. The worst ones were stage three. The least bad, which were still terrible, were stage one. We used to have stage one smog alerts more than half of every single year. So we’re talking 250, 280 days where the smog would be 300% higher than the current federal standards. We haven’t had even a stage one smog alert since 2003.
Robinson Meyer:
[6:36] Wow. You gave the high-level stat about Flint, Michigan, which I think is crazy, but I think it’s worth kind of translating it into units. So in 2020, the median data for children ages 1 to 5 in the U.S. Is that lead levels were 0.6 milligrams per decaliter. from 1976 to 1980, they were 15 micrograms per decaliter in Los Angeles. And at the peak of the crisis in Flint, Michigan, which was obviously a horrible public health crisis that attracted the attention of the country, lead levels in children ages zero to five were 1.3 micrograms. So lead, I mean, we regarded it as a crisis when kids in Flint had lead levels of 1.3 micrograms, But it was normal in Los Angeles in 1976, in 1980, I mean, during the Carter administration, to have lead levels of 15 micrograms per decollete. It’s just crazy how... How significant and how recently these improvements have come. I want to get into the story of how this happened, but can you talk about why maybe this story of what happened in Los Angeles matters to the world? Because that was what actually came out of the book to me is that, yes, it’s a book about Los Angeles, but so many innovations, so many technologies, and so many changes that were produced by L.A.’s drive to clean up their air wound up really driving the spread of air pollution control
Robinson Meyer:
[7:59] technology around the world.
Ann Carlson:
[8:01] That’s right. So let’s start with lead. Let’s go back to lead. Los Angeles was not alone in having those kinds of lead levels in their kids. This was a nationwide, indeed a global problem because leaded gasoline was the only fuel that really worked to improve the efficiency of engines until it was removed from engines. And so you could take kids in Chicago or kids in New York or kids in Pittsburgh, all of them were experiencing these unbelievably high lead levels. There are estimates that we collectively in the United States lost 850 million IQ points because of the presence of lead in gasoline that, again, ended up in our blood. And then that’s true across the globe. So what happened? The Clean Air Act passes, but within the Clean Air Act, there’s a really important provision. And that is that California is given special authority to regulate vehicle emissions because vehicle emissions are such a problem in Los Angeles. And the Clean Air Act is also really important because it sets these incredibly aggressive standards for auto manufacturers to cut emissions by 90% between 1970 and 1975. Auto manufacturers say they’re going to go out of business if they have to meet these standards, and ultimately the federal government extends them. But California holds the manufacturers’ feet to the fire. That is with the assistance of the EPA administrator, William Ruckelshaus, and catalytic technology becomes standard on every vehicle.
Ann Carlson:
[9:30] Again, that’s across the country. That’s just not in California. That’s now across the world. And as a result, we ban lead and gasoline and we remove all sorts of nasty pollutants that were coming out of the tailpipes of vehicles.
Robinson Meyer:
[9:43] I think this was a piece of the chronology that I didn’t fully understand, which was that getting rid of lead and gasoline, which obviously has had these huge, huge byproducts for the world, terrible, terrible environmental pollutants. Was almost like a positive externality. It was like a byproduct of actually trying to fight the smog problem in that catalytic converters would break with leaded gasoline. They weren’t durable enough if you ran leaded gasoline. And so we needed to find a way to get lead out of the gasoline, which turned out to be, I mean, I don’t know. I think of all the pollutants that we’re talking about here, obviously they’re all terrible. Particular matter is terrible. Ozone is terrible. Lead in the air is so bad. But we only tackled it as almost a byproduct of trying to tackle the smog problem and the conventional air pollution problem.
Ann Carlson:
[10:32] That’s exactly right. And so one of the things that happens early on as the catalytic converter is being really developed for widespread installation is that William Ruckelshaus, the head of EPA, mandates that all gasoline stations provide unleaded gasoline. And at first that seems like a little quirky thing. But ultimately, anybody who bought a new vehicle had to have access to unleaded gasoline. And it made it much, much easier to phase out leaded gasoline. Imagine if we didn’t have the catalytic converter and leaded gasoline still worked. You would have so much resistance to banning it just on its own terms. But instead, it just kind of phased out almost naturally as a result of the invention of the catalytic converter. Yeah.
Robinson Meyer:
[11:18] And only recently, only in the past, I think only in 2020, did we permanently phase it out of the global gasoline system. But it was all possible because
Robinson Meyer:
[11:26] of catalytic converters. Let’s start the story from the beginning. Why did Los Angeles have a particular air pollution problem?
Ann Carlson:
[11:33] It has the fate of geography, which definitely makes L.A. much more prone to being smoggy. It’s not that we’re morally worse than everybody else, which I sometimes think we get labeled as. We are ringed by mountains on three sides. Of course, we have the ocean on one side, and that forms a bowl, and that bowl prevents smog from blowing into Nevada and Arizona and neighboring states. In addition, we have something called an inversion layer, which essentially traps smog below a layer of weather.
Ann Carlson:
[12:07] And then on top of that, the thing that we really are infamous for ends up being one of the huge problems, and that is the automobile. And it is no longer true that we drive more than other cities. It is no longer true that we have car ownership rates that are significantly higher than other cities. But we did, starting in the 1920s, going well into the 80s or 90s. We had car ownership rates that were far larger than the rest of the country, and none of those cars had any pollution control technology on them, really until beginning in the 1960s, but really until the 1970s. And L.A.’s population was booming. So as the population expanded dramatically, so did the number of cars, and our pollution problems got worse and worse and worse. Then I should mention the final thing, and that is one of our great assets, and that is sunshine. And it turns out that when sunshine interacts with petroleum products, basically the burning of gasoline, that process catalyzes the development of ozone pollution. And so the sunnier it is, the more ozone pollution you have, also the warmer it is. So one of the things that we’re going to see with climate change is as temperatures increase, our ozone pollution problems will increase too.
Robinson Meyer:
[13:19] Did the rest of the country get closer to Los Angeles levels of driving, or has Los Angeles successfully reduced its amount of driving as compared to, say, the Houstons or the Dallases or the Denvers of the world?
Ann Carlson:
[13:31] I think it’s a little bit of each. There’s no question that the cities that developed in the post-war relied on the automobile. It’s wildly convenient. It changes the way we live. It changes the way we work. It changes the way we vacation. So it’s hugely convenient and land use patterns developed around the automobile. It’s not true in your city of New York, right, in the densest part. It is true in the suburbs of New York. And it’s not true in the densest part of Chicago, but it is clearly true of the suburbs. So part of it is that as we expanded west and as the western cities, southwestern cities developed, they caught up with Los Angeles. Part of it is that car ownership became much more ubiquitous. You know, one of the interesting things to know is they didn’t used to extend credit for vehicles. But once you could take out a loan instead of having to pay the full price of an automobile, they became far more available. L.A. also, starting in about 1980, finally began to invest in public transportation.
Ann Carlson:
[14:34] And there’s been a big push to densify the city. One of the funny facts that people probably don’t realize is that Los Angeles is the densest city in the country. New York City is very dense. But if you take into account Queens and Staten Island and the kind of greater New York area, it’s actually not as dense as L.A. And so that’s also made it somewhat easier to exist here without a car, along with expanding public transit options. Yeah.
Robinson Meyer:
[15:03] One thing that was quite striking about reading the history of Los Angeles as told through this book is that oil is central to the entire development of the city. So it’s not only that Los Angeles happens to grow during this period where everyone has cars. It’s also that it’s enabled by the rise of aerospace. And of course, it becomes an aerospace hub itself. You only can have planes when you have access to petroleum. Los Angeles at first and still is, I believe, the city with the most oil derricks and refinery complexes. is actually within the city proper. Houston might now eclipse it on refineries. But in terms of where people have the most oil extraction happening in their backyards, it’s still Los Angeles. And then the entire rise of retail options like the supermarket, all of that is dependent on the ability of people to drive to supermarkets, to park, and then of course trucks as well to deliver fresh produce.
Ann Carlson:
[15:55] Exactly. So these things are mutually reinforcing. There’s no single cause. You know, you see people have cars, so they can drive to the supermarket. It turns out you can refrigerate. The rise of refrigeration does a lot, too, because you can buy quantities of groceries that you wouldn’t buy if you couldn’t refrigerate them. That means you need a car to go pick them up at the grocery store that is not particularly close by. And then we see the development of not just the supermarket, there’s actually a precursor to the supermarket. There are these little markets in Southern California, some of which still remain, that allowed vehicles to actually get into them. If you think about a dense city again like Chicago or New York, there’s no place to park, right? If you have to, you know, get a big piece of furniture into a vehicle, you’re double parked or you’re parked in the red. Southern California invents a different way to access stores because everybody has a car. And then you need a car because...
Ann Carlson:
[16:50] Transit options aren’t going to be good enough. And then you spread. You know, part of the story of Southern California, too, is just its sheer size. And we don’t have the transit hubs everywhere that make public transit an available option for kind of everyday existence. One of the, you know, other interesting things about Los Angeles is for people who are in very low income brackets, the first purchase they make of any size is a car. So our public transit use is very stratified by income. That’s less true in cities like D.C. or, again, New York. That’s in part because the car offers such convenience here because of the way our land use patterns developed.
Robinson Meyer:
[17:33] One of the striking things about the story in the book is that air pollution and Los Angeles grow together. So at the same moment that Los Angeles is growing as a city, I think it’s worth also hitting that Los Angeles is in some ways the first sunbelt city. And the explosive growth that we see today in Houston or Dallas or the Rio Grande Valley or Oklahoma or Phoenix, all of that actually Los Angeles did first. And to some degree, the problems it now faces are problems that other cities will face in 20 or 40 years.
Robinson Meyer:
[18:04] But the rise of air pollution and the rise of the city happened together. Can you talk a little bit about how people realized that air pollution was a problem and how they then identified where it was coming from?
Ann Carlson:
[18:19] Well, it was easy to realize it was a problem because you could see it, you could taste it, you could feel it when you breathed in deeply, your lungs would ache, your eyes would tear up and sting. And so it was not hard to recognize that it was a problem. In fact, there was increasing public pressure to do something about it, including from groups like the Chamber of Commerce who wanted Southern California to continue to grow. And as the air pollution problems got worse, that growth was threatened. So for a long time, the belief was that Los Angeles was experiencing air pollution that was similar in kind to the air pollution of industrial cities in the Midwest, like Pittsburgh and like Chicago and St. Louis. And that pollution was largely the result of the burning of coal for heat, for electricity. And in fact, there’s this kind of amazing episode where the guy in St. Louis, who was a professor at Wash U, is hired by the Los Angeles Times to come out and study L.A.’s air problems. And he concludes basically that our problems are the same as St. Louis’s. And as long as we clean up stationary sources, utilities, stop backyard burning, which was something that was very prevalent in Southern California, our air pollution will improve just as St. Louis’s did. But that wasn’t true because the culprit was the car.
Robinson Meyer:
[19:42] You talk a little bit about this in the book, but I’m curious about this. Was air pollution understood as a public problem the whole time? I mean, obviously, it was a problem. People could remember if people had lived in L.A. Before its development boom and before World War II, they could remember a time when, you know, Pasadena had beautiful blue skies and beautiful pastures. But was there any fight over it being a public problem or a problem that required a political solution? Or was it understood to be a political problem roughly at the same time it was happening? In part because Los Angeles, while it was the first city maybe to confront air pollution from the car, and it took a while to realize that, you know, New York and London had had air pollution problems for half a century or a century before Los Angeles developed its...
Ann Carlson:
[20:30] So it was a political problem from the time that it became ubiquitous. And the county of Los Angeles and the city of Los Angeles responded quickly. So one of the great stories about L.A. is that its governments were trying to do something about smog very early on and succeeded in regulating some of the sources. So one, as I’ve already mentioned, was backyard incinerators. Los Angeles is the last major city to get public garbage pickup. That’s because everybody had an incinerator in their backyard. And if you talk to anybody who lived here in the 40s or 50s, they would take the garbage out and throw it into the incinerator and light it on fire. And on a really bad day, it would produce smoke that was so black you couldn’t see. That was a pretty obvious problem, and L.A. eventually banned those incinerators. L.A. did a lot on stationary sources, utilities, etc. I can tell you that one stat really stands out to show this. When the Clean Air Act passed and all these federal standards were established, the one we didn’t violate was sulfur dioxide. And that’s because we had been regulating utilities before we started regulating cars. But the story of the regulation of cars is a slow one. It’s one full of conspiracies. And it’s one that really took the state to recognize that Los Angeles couldn’t do this on its own. And then ultimately the federal government stepped in as well.
Robinson Meyer:
[21:53] So let’s talk about this. How did Los Angeles identify that air pollution was coming from cars in the first place? Because you tell the story, I mean, you just told it, of at first the city hires experts and at least this one expert who had a lot of success, you know, dealing with the air pollution problem in St. Louis came in and was like, oh, it’s coal. It’s all these stationary sources and that it worked in the East, but it didn’t work in Los Angeles. So how did people realize it was cars?
Ann Carlson:
[22:21] It’s really the story of a single guy, and his name is Arie Haagen-Smit. He was a professor at CalTech, actually relatively new to L.A. He and his wife, Zus, were basically immigrants from the East Coast, first from Europe and then from the East Coast. They had been in Boston and drove to Southern California. Zus is interviewed by an historian, and she recounts getting to Southern California and thinking they’ve reached paradise. And they moved to Pasadena, which is where Caltech is located.
Ann Carlson:
[22:52] And Pasadena had terrible smog because it’s up against the San Gabriel Mountains, and so the smog just really congregates in that area. But he’s a funny character because his academic specialty is, believe it or not, the pineapple. He studies the flavor of the pineapple, and he’s trying to determine with support from Dole pineapple and other agricultural interests what makes up the flavor of the pineapple. And he’s also a good civic citizen. So he’s on a subcommittee that the Chamber of Commerce is appointed to do something about or to try to understand the problem of smog. That subcommittee gets a letter from farmers who are experiencing their crops dying. And they know it’s from smog, but they don’t know how to stop it. And he gets this letter and he says, well, if you want to know what the problem is, you got to study what’s in the air. And it turns out that being a chemist of the pineapple gave him the skills to do that. So he started monkeying around in his lab using the very same equipment that he used for his pineapple studies, and he pretty quickly determined that the major culprit was petroleum.
Ann Carlson:
[24:03] That wasn’t quite enough because the hydrocarbons and other unburned chemicals that were coming out of the tailpipes of cars weren’t coming out in large enough quantities to actually explain the pollution. And he had this brilliant hypothesis. His brilliant hypothesis is that they were interacting with sunshine. And when they did that, it created ozone pollution. He built a plexiglass container outside of his office, blew the hydrocarbons into that container and exposed them to sunshine. And lo and behold, he recreated ozone pollution, which his colleagues called Haagen-Smog.
Robinson Meyer:
[24:39] And talk a little bit about how the car companies responded to this discovery. Was it immediately understood that he had hit upon the right answer, or did it take some time for this to maybe sink in?
Ann Carlson:
[24:49] It took some time. So we have two different industrial players here. We have the oil companies. We can talk about them separately because they behave differently. And then we have the car companies. The car companies simply ignore Hagen-Smith’s science. And this is published in very reputable scientific journals. And we know this because one of our supervisors, Kenneth Hahn, who served Los Angeles for 40 years, started a lettering campaign.
Robinson Meyer:
[25:17] Supervisors like a city council person.
Ann Carlson:
[25:18] He was first on the city council and then on the board of supervisors. Exactly. And he starts writing letters to the car companies starting the early 1950s saying, you need to do something about the problem. And the letters are fascinating to read. They start with the auto companies literally denying that their vehicles cause a problem. You can see this again all in the correspondence. So first they just deny. Even though these scientific studies are out there, they just act as though he doesn’t exist. Once it becomes very clear that his science is right and other scientists are validating Haagen-Smit’s work, then they just engage in delay. Oh, we don’t have the technology. We can’t possibly have the technology. The technology will take years to develop. This is so complicated. And then finally, they actually engage in a campaign of deception, and they are civilly charged with conspiracy because the big three conspire to keep missions control technology off the market in order to avoid having to do anything to regulate their own products.
Robinson Meyer:
[26:16] I thought this was such an interesting detail. I’ve heard about how the big three resisted car safety technology. I feel like that’s the famous story now. But I didn’t realize. So they established a consortium to share air pollution research and pollution control technologies with each other. And then having established this consortium, which all sounds very public spirited and smart, you know, then they’re pooling their resources. But of course, then having established the consortium, they use it to collude to make sure that they will never actually successfully develop this technology.
Ann Carlson:
[26:48] That’s exactly right. And part of that is a quirk of the law. So the California law that began to allow the state to regulate emissions from automobiles was what we call technology following. So it basically required that before California could regulate, there had to be available technology on the market. Well, lo and behold, if you keep it off the market, then California can’t regulate. Ultimately, some independent manufacturers came up with technology. And it turns out that, surprise, surprise, the auto manufacturers actually did have the technology, and then they were forced to install it. Again, sued civilly by the Johnson administration for conspiracy.
Robinson Meyer:
[27:30] So how do we go from a place where, I mean, I think Haagen-Smit’s work was in the 50s, right? He’s identified ozone. He’s found it. Within 20 years, the U.S. has mandated that this technology go in vehicles and we’re in the process of mandating, for instance,
Robinson Meyer:
[27:45] that lead-free alternatives be available at gas pumps. Just what is that arc like? Because that is the arc that’s conventionally described as the heart of the environmental movement. Environmental issues had been articulated as a problem, at least in Los Angeles, for a long time before, say, we get the major statutes of environmental law.
Ann Carlson:
[28:08] I think some of the reason that the issue becomes an issue that’s not just about Los Angeles, but about the rest of the country, is the rise of the automobile. Yeah. Because other cities are starting to experience the kind of pollution Los Angeles does. Not as bad, in part because of the accident of geography. Again, this basin that we sit in, like Denver, gets disproportionate amounts of smog because the wind doesn’t blow the smog out and so forth. But still, it becomes such a national problem, along with water pollution and other really glaring environmental problems, that we get Earth Day in 1970, which coincides with the rise of the major federal statutes. Something like 20 million people rallied in favor of environmental protection at the first Earth Day. I mean, think of that. That number is extraordinary. We’re trying to get, you know, 8 or 10 million people to No Kings rallies with a bigger population. And so it becomes this huge environmental issue. It’s big enough that Richard Nixon thinks he needs to be an environmentalist when he runs for president. And in fact, he establishes the Environmental Protection Agency. The Clean Air Act passes with one negative vote. And the negative vote is from someone who thinks it doesn’t go far enough. So we’re just at a time where it feels like a crisis. And we should talk more about the Clean Air Act itself because it’s a pretty extraordinary piece of legislation. Hard to imagine something like that passing today.
Robinson Meyer:
[29:33] As you are a professor of environmental law, I can’t think of a better topic to talk about. So one, there’s a few nuances that are important. The first is that California is early to air pollution law. So it’s beginning to explore how to regulate cars by the time that the Clean Air Act passes. But the second is this distinction that you’ve begun to draw in this conversation between technology following versus technology forcing regulation, where California had adopted technology following regulation, and that made it kind of captive to the car companies. Can you talk a little bit about why the Clean Air Act is different and why it was different? And Did people understand maybe how different it was when they were writing it?
Ann Carlson:
[30:15] I think they did understand how different it was. And what they did was instead of focusing on whether technology was available or what was possible to demand of auto companies based on that technology, they focused on public health. And the basic overarching idea in the Clean Air Act is we are going to set standards that protect public health. We’re not going to worry about cost. We’re not going to worry about technological availability. We’re going to tell manufacturers, for example, you cut pollutants by 90% by 1975 and 1976, depending on the pollutant. We understand there’s no technology. Go out and invent it. That’s the technology forcing part of the statute. Of course, the auto manufacturers say they can’t do it. Lee Iacocca famously says that Ford will stop manufacturing vehicles if the Clean Air Act passes. Ford continues to manufacture vehicles to this day. He, of course, was engaged in hyperbole, but that gives you some sense for just how intense the opposition was and how kind of panicked the manufacturers were. But that technology forcing statute, again, combined with California’s authority to regulate, set off this arms race to really figure out how do we cut pollutants dramatically. And that’s where we get the invention of the catalytic converter.
Robinson Meyer:
[31:33] So the catalytic converter is invented. Just tell us a little bit about how it was invented. And then how rapidly does it penetrate the vehicle fleet and get rolled out? And I don’t know, do people understand when they buy vehicles that they’re much cleaner? Like, is it a step change overnight that people realize their cars aren’t pumping out this pollution anymore? Yeah.
Ann Carlson:
[31:52] The catalytic converter is wildly successful right from the get-go. There is a huge drop. There have been a number of other changes to automobiles that today make them 99.5% cleaner than they were in 1970. But the really big invention is the catalytic converter. There’s a lot of nuance to that. First, we had a two-way catalytic converter, then three-way. It had to get all the different pollutants that were being emitted from tailpipes. There’s a bunch of other stuff, again, that happens often because California is pushing the technology. It takes a while because, again, it’s not mandatory. So we have an early catalytic converter in the 1950s, and catalytic technology begins to be installed on forklifts that are used inside because the chemicals that are coming out of the exhaust pipes are so intense they could kill people because they’re used inside.
Ann Carlson:
[32:42] Again, the technology isn’t mandated, and so there’s no real incentive for the private sector to invest a lot of money in improving it and making it available on a widespread basis for automobiles. Remember, it’s not just automobiles. It’s also automobiles that are going to be driven in hot summers in Texas and cold winters in Alaska on vehicles that last for 50 or 100,000 miles. So these have to be extremely durable. They have to work in all sorts of different temperatures. And it’s the Clean Air Act, again, that forces that technological development. We see huge investments, not just by the auto industry, but also by some other important players. One of my favorites is Corning Glass gets very involved in developing this honeycomb structure that’s really crucial to the operation of the catalytic converter. There’s another company called Englehard. The scientists there are actually awarded medals of honor for science because this invention is so important. It’s not going to come into existence until there’s a market for it. We talk about the private sector all the time, but the market comes because government mandates it.
Robinson Meyer:
[33:50] I’m convinced that Corning Glass is like one of the most important kind of long-running stories in the American economy. I had no idea they played this role in the catalytic converter. They’re also very important. I mean, they invented the glass that we use or the type of glass that’s used in iPhone and smartphone screens. And now they’re also super involved in the kind of CHIPS reindustrialization process. I want to skip fast forward through two major episodes in the book.
Robinson Meyer:
[34:17] Obviously, people can read the book. The first is that, look, the EPA at first when it is established as a bipartisan agency and William Ruckleshaus, as you said, is a Nixon appointee, winds up playing quite an important role in the Saturday Night Massacre, but is known as the first administrator of the EPA. But by the time that Reagan is elected, there’s quite a backlash brewing to the EPA. And there’s, in fact, an effort to repeal the Clean Air Act. And you write about the efforts of Representative Henry Waxman to slow this repeal effort. Can you just describe what was involved? Why does he wind up playing such an important role? And who’s his nemesis?
Ann Carlson:
[34:55] So there are a couple of different nemeses. One is Reagan himself. So Reagan campaigns on a very strong anti-regulatory platform, famously says that government is the problem, not the solution. And central to his story is the Environmental Protection Agency and the Clean Air Act. And he appoints extraordinarily anti-regulatory political appointees to head the Interior Department, to head the Environmental Protection Agency. The mother of one of our Supreme Court justices is the head. She ultimately actually is criminally convicted for some of the behavior at EPA. And Reagan does what looks remarkably similar to what’s going on today, and that is propose enormous cuts in the EPA budget. He’s less successful in getting them through. And that’s partially because the cleanup of our air is extraordinarily popular, turns out. And Waxman knows this. So Waxman represents Los Angeles, the west side of Los Angeles, including UCLA, and he is an extraordinary legislative tactician. He understands how to use the legislative process to muck up things he doesn’t like.
Ann Carlson:
[36:03] Point attention to things that are important to him. And he does this to great effect. His congressional nemesis is John Dingell, who represents the state of Michigan and the city of Detroit, which is, of course, extraordinarily important for the auto industry. And so they kind of go head to head. And ultimately, Waxman puts together a coalition of opposition that doesn’t just look like what you might think of today as blue and red. Instead, it’s more regional. So the Midwest utilities and car plants make air pollution reduction politically controversial. The Northwest, the West wants cleaner air. So there’s this interesting kind of coalition that he can put together to put the brakes on attempts to really weaken the Clean Air Act. And then ultimately, he’s heavily involved in very important amendments to the Clean Air Act in 1990, which is important to note, are signed into law by George H.W. Bush, again, a Republican president signing into law one of the most important
Ann Carlson:
[37:05] series of amendments to the Clean Air Act that we’ve ever seen.
Robinson Meyer:
[37:08] Well, something surprising to me is that it’s those 1990 amendments to the Clean Air Act that enable a new set of conventional air pollutants to be described as public problems, identified as public problems, and then reduced. Among them, and I didn’t realize this, was particulate matter. So PM2.5, the tiniest form of particulate matter, which could be soot or dust or any sort of, or sometimes it’s toxins. I mean, it’s any little, little material that I think is less 2.5 microns.
Ann Carlson:
[37:35] Exactly.
Robinson Meyer:
[37:36] And so it’s very tiny. You inhale it, and then because it’s so tiny, it’s able to penetrate into your lungs, inflame your lungs, and then penetrate into your bloodstream. It gets across the blood-brain barrier. It’s a terrible, terrible form of pollution. We didn’t identify it as a public problem until 1998, which I didn’t realize it was so recent. I knew that, you know, there were a set of initial pollutants identified by the Clean Air Act. I knew that we began to expand that list in 1990. I didn’t realize how recently particular matter, and then also as well, nitrogen oxides, NOx, had been successfully reduced.
Ann Carlson:
[38:15] Yeah, so part of the brilliance of the Clean Air Act and part of its legal challenge currently is that it gives a lot of discretion to the Environmental Protection Agency to do what’s right for public health. And one of the ways it does that is by giving the agency the power to set standards for pollutants that are all around us, ubiquitous pollutants that come from a lot of sources and to set them at a level that protects public health with an adequate margin for safety is the language in the statute. PM2.5, we don’t even see a standard until 1997. That’s because we don’t really understand that this tiny particulate matter is so deleterious to health as you’ve described. And so the first standard gets set in 1997. Let me give you some more numbers about L.A.. So in 2001, L.A. violates that standard on close to 90 days. Today, we violate that standard on a handful of days, four to five. And that includes the entire basin, not just the city of Los Angeles. With one exception, and that is that some of the wildfire days actually get excluded. I’m experiencing one today. We’ve got wildfires all around us. You can smell smoke in the air. Not good for us. New source of pollution that we’ve got to figure out how to tackle.
Robinson Meyer:
[39:31] One striking thing about the book was actually how recently so many of these air pollution issues were dealt with. Obviously, the history goes back to the 20s. It goes back to the 50s when Haagen-Smit’s work happened. It goes back to the establishment of the EPA and the passage of the Clean Air Act in the 1970s. But you describe seeing the sooty ozone smoggy skyline of Los Angeles or the smoggy skyline of a number of cities with that brown, shimmery look. As recently, I mean, it can still happen today, obviously, but as recently as the 1990s, and then a lot of the reductions in air pollution have happened since the 1990s. First of all, your descriptions made me realize that this, to some degree, is how cities looked when I was a kid and how they look no longer. I mean, as a kid, I have memories of driving into Philadelphia or driving into New York and seeing through the shimmery, brownish, ugly haze, the skyline, in a way that you actually no longer see when you drive into those cities on most days. And it seems to me that this is an environmental success that, although it had long roots, has actually happened much more recently than people think, that a lot of the fruits of laws passed in the 1970s didn’t really come to bear until maybe the late 90s and the aughts.
Ann Carlson:
[40:58] That’s exactly right. And I think it’s actually a really important observation about tackling a problem as serious as air pollution. And that is that there’s no magic bullet, although the catalytic converter did a lot. It wasn’t the only thing. We had lots of other sources of pollution, including stationary sources that don’t use the catalytic converter on them. It’s taken decades of political leadership. California’s been at this since the 1940s. It’s still at it today. We still have an ozone pollution problem in Los Angeles. We cannot meet that ozone standard unless we eliminate the last remaining emissions from all vehicles. We need to electrify the fleet. We won’t even meet the federal standard. So there’s still a lot of work to be done. So it’s decadal-long efforts at every level of government. And it’s, I think, an important lesson for climate change. We’re not going to fix it overnight, right?
Robinson Meyer:
[41:52] What lessons do you think that this long odyssey has for the battle against climate change and the fight for decarbonization?
Ann Carlson:
[41:59] I think there are a lot of lessons, although I will also acknowledge at the get-go that the problems are different and kind in some ways that are important, and I’ll talk about those in a moment. But one is that the public really matters. We haven’t talked much yet about the importance of public pressure on politicians, but it was really widespread, and it was sophisticated, and it was interesting. The importance of journalists is another really important part of the story. The Los Angeles Times was crucial to getting Southern California to focus on air pollution, and at the time, the L.A. Times was probably the most important and powerful institution in the city and county. Political leadership obviously matters. Really important figures like Mary Nichols, who has served on the Air Resources Board two different stints in the 1970s and again much later attacking climate change. Henry Waxman, Kenneth Hahn, there are a whole bunch of important figures. Scientists matter.
Ann Carlson:
[42:57] The development of technology matters. All of that is important as we think about how we move forward with climate change. The courts are important. Lawyers are important. Can’t forget the lawyers since I am one. Super important that we have citizen groups that are using the citizen suit provisions of the Clean Air Act to push government when sometimes government doesn’t want to take politically unpopular stands, even when it matters for our public health. So all of those, I think, are super important lessons and very directly parallel. Another one that’s really important is that the same sources that cause air pollution are some of the biggest sources that cause climate change. The burning of fossil fuels caused a lot of our air pollution problems in Southern California. The burning of fossil fuels today are putting CO2 and other greenhouse gases into the atmosphere and continuing to contribute to ongoing air pollution problems. So one good part about that is that if you reduce your reliance on fossil fuels, you get not only reductions in greenhouse gases, but reductions in conventional air pollution, too. There are some differences, and I think we should acknowledge those.
Robinson Meyer:
[44:02] I think the biggest one, right, is that there’s no immediate political or public payoff to decarbonizing or eliminating fossil fuel, eliminating carbon dioxide emissions. As a politician, you can clearly fix fossil fuels. The problem of conventional air pollution for your constituents in a way you really cannot fix the problem of climate change.
Ann Carlson:
[44:22] In the short run.
Robinson Meyer:
[44:23] In the short run, exactly.
Ann Carlson:
[44:25] Yeah, I think that’s one. I think another is that climate change is not as readily visible, even though we’re seeing the effects on the ground. You don’t always tie the hotter day to carbon dioxide emissions. You knew when you were experiencing air pollution that it was coming out of tailpipes and it was coming out of smokestacks. You could see it. And you could see, as you have already said, visible changes. And then the third is that it’s a global problem.
Robinson Meyer:
[44:46] Yeah.
Ann Carlson:
[44:46] And you can’t solve the problem of climate change simply by having the United States stop emitting or even China stopping emitting, which is the global leader in greenhouse gas emissions. You need everybody cooperating. And we really need to cut greenhouse gases to net zero, which is not an easy task. But this story shows that we have made dramatic progress in solving environmental problems in the past.
Robinson Meyer:
[45:11] One story you tell is this story. Relay race among governments almost, where there are moments where the city and the federal government are pushing harder than the state, when the state and the city are pushing harder than the federal government. And it’s this pressure across the three levels of government, which are almost never quite lined up, but enough of them are on the right side of things to kind of keep momentum moving forward, that delivers ultimately these huge reductions in conventional air pollution. You also tell a story about citizen groups and nonprofits suing to force governments to act. And I think we’re in a moment now where there’s more skepticism. I think much of it well-earned about the effects of, let’s call it like litigative environmentalism, where these outside nonprofit groups sue to get the government to do something that the government maybe didn’t, political leadership didn’t want to do. This has been tried with climate change. It hasn’t always been as effective in climate change. I think there’s even now questions about how often using litigation as a tool for social justice or progressive policy has been through the long arc of it. I wonder what your reflections are on the history here and how you think litigation is appropriate as a tool to pursue these aims and when it’s maybe not appropriate or not fit for purpose.
Ann Carlson:
[46:29] Well, litigation got us Massachusetts vs. EPA, which forced the Environmental Protection Agency to begin regulating greenhouse gases. So I’m a fan of litigation in the right instances. But here’s what I think the real problem is. I think the real problem is Congress. We had bipartisan commitment in 1970 really through, you know, again, the 1990 amendments to the Clean Air Act to clean up our environment. And we don’t have that anymore. I thought the Inflation Reduction Act was absolutely the right direction to go. I thought Congress was doing the right thing. I thought it would be durable. It is durable in some places, but I thought the EV manufacturing credits and the EV consumer incentives would hold in part because a lot of that money was going to red congressional districts.
Robinson Meyer:
[47:19] And the manufacturing credits themselves did hold. It’s just the consumer credits didn’t.
Ann Carlson:
[47:23] With some tweaks. Yeah, with changes. So I don’t think we should overlook the fact that Congress did something about climate change and Congress is really the body that has to be the leader. I think one of the things we’ve said, I would add to the litigation story, the back and forth regulatory activity that has taken place as a result of changing presidential administrations. So, you know, I worked on car standards for the Biden administration. This is the corporate average fuel economy standards that we issued in conjunction with EPA greenhouse gas standards. I don’t know what iteration it started with California trying to regulate in the early 2000s, then the Obama administration, then the Trump administration withdrawing those and replacing them with very weak standards, then Biden coming back with strong standards, then Trump coming back with very weak standards or no standards at all. That is no way to run a railroad. We need congressional direction. We need strong direction about how to cut, how to get there, how to really tackle what remains the greatest existential environmental challenge we face.
Robinson Meyer:
[48:29] Anne Carlson, it’s so good of you to join us here on Shift Key. We will have you back to talk about policy in the future and kind of what it all means. But I wanted to focus on this story. So, Anne Carlson, anyway, thank you so much for joining us on here on Shift Key.
Ann Carlson:
[48:41] Sure, Rob. It’s great to be with you.
Robinson Meyer:
[48:47] Thanks so much for listening. That will do it for Shift Key today. And that will do it for the week. We’ll be back early next week for the new episode of Shift Key. Until then, enjoy your Memorial Day. Shift Key is a production of Heatmap News. Our editors are Jillian Goodman and Nico Lauricella. Multimedia editing and audio engineering is by Jacob Lambert and by Nick Woodbury. Our music’s by Adam Kromelow. Thanks so much for listening. We’ll see you next week.
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Current conditions: Tropical Storm Edouard is making landfall over Texas and Louisiana, bringing flooding as it moves inland • Already facing a southwest monsoon, or habagat, the Philippines is now staring down Tropical Storm Pilandok • Intensifying flooding in South Sudan’s Sudd, the largest wetlands in Africa, is displacing families by the droves.
Oil prices surged north of $90 per barrel Tuesday as the United States exchanged fire with Iran amid the ongoing fight to control the Strait of Hormuz. West Texas Intermediate, the U.S. benchmark, rose nearly 2% to $91.74 per barrel. Europe’s Brent crude measure closed less than 2% higher at just below $97. Murban crude, the yardstick for oil out of Abu Dhabi, soared nearly 8% to over $106 per barrel. In a post on Truth Social, President Donald Trump said he was “not trying to force Iran to the bargaining table.” Rather, “I couldn’t care less if they sign a worthless, to them, agreement,” he continued. “I like our position now much better, with almost total control of the Hormuz Strait, and their economy totally collapsing.” Referring to the U.S. military as the “American terrorists,” the Tasnim News Agency, a semi-official outlet associated with Iran’s Islamic Revolutionary Guard Corps, reported that Tehran “had previously warned and promised” that “the Iranian armed forces will respond decisively and extensively to any aggression against our country’s territory and interests.”
Meanwhile, the Group of 20 — the club of 18 rich economies, plus the European Union and African Union — concluded its latest meeting with a joint statement that affirmed the necessity of central bank independence, called out energy affordability in the age of AI, and admonished “non-market economies” with “excessive and persistent external surpluses” that distort the global market. China didn't like that, U.S. Treasury Secretary Scott Bessent told CNBC, issuing a dissent.
If the sun were blasting onto all the solar panels in China all at once, the overall electricity output would top that of every one of the country’s coal plants firing at the same time. It’s a major milestone, Bloomberg reported, highlighting just how extensively Beijing has glazed its fields, foothills, and urban rooftops with photovoltaic panels in recent years. But the achievement comes with an asterisk. “No matter how you feel about solar or coal as an energy source, CAPACITY is not ENERGY,” energy analyst Nicholas Birkhead wrote in a post on X. “These solar capacity numbers way overstate the energy mix, which is what matters! I really wish we’d all just publish capacity numbers after they’re adjusted for capacity factor.” In other words: As significant as this seems, China is still burning a whole lot of coal more frequently than the midday sun is shining.
Last year, upward of $440 billion flowed into solar worldwide, while $540 billion went to upstream oil drilling. It’s a sign, according to a new report from McKinsey, that “markets are financing both fossil fuels and low-carbon energy simultaneously” and that “the system is not replacing one fuel type with another but rather building them in parallel.” Moving forward, the consultancy cautioned, policymakers and planners need to assess not just the cheapest available options for new generation but what best supports the performance of the entire energy system. Just look at what Ontario did when deciding to move forward with what’s expected to be North America’s first small modular reactors. Instead of looking at the upfront cost of the generating assets alone, the province-owned Ontario Power Generation considered the whole cost of transmission and backup generation that would have come in the fine print of choosing wind turbines over nuclear reactors. The example, as my colleague Matthew Zeitlin wrote, highlights the problems with levelized cost of energy, the widely used measure of the overnight costs of building new generation assets: “Everyone’s favorite energy metric is wrong.”
A long-awaited California bill covering state policy on wildfires, insurance, and utilities collapsed in the state legislature Tuesday. The proposal, called Senate Bill 492, had been the product of intense negotiations between legislative leaders and Governor Gavin Newsom. The deal was released on Saturday and included provisions to speed up payouts to victims of fires and nibbled around the edges of the vast payouts California utilities are forced to make to insurers when their equipment sparks a blaze. The legislators fractured because it failed to address the core issue of California’s strict rules around wildfire liability and insurance, where insurers can sue utilities to recover damages when, for example, a transformer or power line ignites dried brush. Instead, the deal would have tweaked the system, making it harder for insurers to sell claims to investors, pushing out payouts to victims faster, and limiting utility executive bonuses when their companies’ equipment causes a fire. These payouts can drag utilities into bankruptcy, as happened with Pacific Gas & Electric in 2019 following a series of wildfires, and end up elevating electricity rates. “The only solution is to return to fix the entire problem, not part of it,” Newsom said in a statement to Politico.
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Fervo Energy’s stock soared nearly 30% on Tuesday after the next-generation geothermal giant announced its biggest deal yet, to sell nearly 400 megawatts of electricity to Google. When Fervo starts up its Cape Station project in southwestern Utah sometime in 2028, the facility will become the world’s largest enhanced geothermal plant. In enhanced geothermal plants, the underground heat harnessed for power production comes from artificial wells drilled with fracking technology rather than naturally forming subterranean reservoirs of hot water. If Houston-based Fervo can bring down the cost of its drilling, the technology could enable construction of geothermal power stations in vastly more locations than the industry previously believed possible. “Even though right now we don’t have clarity yet on how this will serve a data center … we know that it will be a foundational building block of power generation for a data center presence in Utah,” Lucia Tian, Google’s director of advanced energy technologies, told The Wall Street Journal, which broke news of the deal.
Next-generation nuclear startups, meanwhile, are facing a looming challenge over plutonium. The material, which doesn’t occur naturally, was largely produced in the 20th century for weapons production. Now, however, developers of novel kinds of reactors are angling to use some of the world’s 571 metric tons of stockpiled plutonium for energy production. In a feature on the topic published this week, the Financial Times outlined the split between countries such as the U.S., which I told you in May was giving out plutonium to startups, and the United Kingdom, which opted to bury its material. “It’s like a car that runs on diamonds. Plutonium reserves are about the same size as diamonds around the world, which gives you an idea of how rare this precious element is,” a French official told the newspaper.

The Department of Energy is pumping $12 million into developing and manufacturing technology for solar panels that can be used in space. In keeping with the Trump administration’s skeptical position on the weather limits of wind and solar, the agency pointed out that, “unlike terrestrial solar energy systems, which are subject to regulate interruption by weather and the Earth’s rotation, space PV can deliver near-constant power.” The funding is aimed at projects that will enhance the durability and cost of solar cells for space and develop manufacturing methods that can provide “innovative, high-volume” processes for mass production. “The next frontier for solar PV power generation is in space,” Audrey Robertson, the assistant secretary of energy, said in a statement. “As demand for space-grade PV skyrockets, this investment will establish American leadership in next-generation, space-based PV, bolster our national security, and enhance our economic competitiveness.”
Investors are putting big G’s behind VPPs. Virtual power plants promise to ease stress on grids and direct power that might otherwise have been wasted toward all the new demand coming online. Amid the scramble to supply power to data centers, money is flowing into companies that can harness those distributed assets. On Tuesday, the VPP software maker Light announced a $46 million Series A. That same day, the British distributed energy giant Octopus Energy closed its deal to buy a majority stake in the VPP provider Uplight.
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Robinson Meyer:
Hello, it’s Wednesday, September 2. I cannot believe it is already September. Last month, it became clear we’re witnessing a new kind of natural gas build out in the United States. Just think of the announcements we got in a few days in the middle of August. First, around August 11, the market intelligence service Cleanview identified that Amazon was behind a 7.6-gigawatt natural gas plant in Texas called Gigawatt Ranch. So just for comparison, that is huge. That would be the country’s biggest natural gas power plant. In fact, it would be the country’s biggest power plant, period. It’s about half a gigawatt bigger than the Grand Coulee Dam in Washington State, the largest power plant in America for like half a century. Then, just a week later, we learned that OpenAI and Nvidia are working together on a 9.2-gigawatt gas plant in Ohio.
Robinson Meyer:
That plant would obviously dwarf the Grand Coulee Dam. It would be the biggest power plant in America by far. But it would also even rival the Jebel Ali Power and Desalination Facility in Dubai as the world’s largest natural gas power plant of any kind. It would be a truly gargantuan facility. My colleague Emily Pontecorvo recently tried to identify the scale of the ongoing gas buildout. And she found a number of power plants, of projects that I think weren’t on my radar, weren’t generally on people’s radar. It’s been interesting because we’ve been getting a sense of the scale of this buildout at the same time that it’s become clear that the data center buildout is enormously unpopular in itself. If you’ve been reading Heatmap News, you know that according to a Heatmap Pro and Embold research poll conducted also in early August, 75% of Americans are now opposed to a data center being built near where they live, including a majority of Democrats, Republicans, independents, rural voters, urban voters, suburban voters, basically any demographic you can think of. They don’t seem to want a data center near them right now.
Robinson Meyer:
I recently sat down with Emily, a Heatmap founding staff writer, to talk about her reporting on the gas buildout, how she identified the 10 largest gas power projects now under construction or being permitted or being proposed in the United States, and how to think about this messy period. Also, how to think about the fact that it’s tech companies, who often have some of the most ambitious climate policies in America, who are now behind, a natural gas buildout on the scale that could actually increase the country’s, greenhouse gas emissions from the power sector, or at least increase them compared to the baseline. How should we think about these net zero commitments from companies like Amazon, Microsoft, Google, when often it’s those same companies that are now building some of the biggest fossil fuel projects ever proposed in the United States? And what would a good net zero commitment or climate commitment look like from those companies? We get into all of it in this conversation. It was a really generative, really interesting conversation for me. I’m Robinson Meyer, the founding executive editor of Heatmap News, and it’s all coming up on this episode of Shift Key. Emily Pontecorvo is here. Welcome to Shift Key.
Emily Pontecorvo:
Thanks, Rob. Glad to be here.
Robinson Meyer:
So you recently wrote a piece for us about the scale of the natural gas buildout in the United States that’s happening to service data centers and to service AI. And I think it’s quite interesting because we will talk about this, but I don’t know if we understood just how large this buildout was going to be as recently as the beginning of this year.
Emily Pontecorvo:
Yeah, I think that’s right.
Robinson Meyer:
What I think back to is, we did our poll, our annual poll of climate insiders, which are kind of sources and experts and former officials and chief sustainability officers. And we asked them at the end of last year, do you think the AI build out is going to significantly slow down decarbonization? And most people said no. And at the time, I don’t know how I would have answered, but ... I feel like we’re much closer to a place where the AI buildout is slowing down decarbonization now than we were even eight months ago. And so just to start off, can you put the scale of this gas buildout in context for us? So how many plants have been proposed? How many of these plants are going to happen? What do we understand about the scale of this next generation of gas that is being planned across the United States right now?
Emily Pontecorvo:
Yeah, so I will say to start that a lot of this information is very slippery because there’s been so many announcements. The announcements are constantly kind of changing. And so we have some numbers, but they’re definitely estimates. So last week, the Global Energy Monitor, which is this group that tracks oil and gas projects all over the world, they put out a report saying that they counted 189 gigawatts of natural gas plants in the U.S. that have either been announced, that are in a pre-construction phase, like they have some permits, or that are under construction. And that is nearly double the amount that they found at the end of last year, which was about 97 gigawatts.
Robinson Meyer:
And is that entirely behind the meter plants, or are those any kind of natural gas plant being planned across the United States, kind of for any purpose on the grid or off the grid?
Emily Pontecorvo:
So these numbers, 189 gigawatts up from 97 six months ago, those are projects that are specifically being motivated by data centers. So some of them are being built on the grid that utilities are building to kind of meet new demand room data centers. And a lot of them are off-grid projects that are being directly tied to data centers.
Robinson Meyer:
And I guess you’ve kind of alluded to this already, but like, So it’s almost 200 gigawatts of gas plants coming online. Do we know, like, how large is the existing U.S. gas fleet?
Emily Pontecorvo:
Yeah, so I, you know, had to look this up for this story. But as of last year, the existing natural gas generation capacity in the U.S. was 512 gigawatts.
Robinson Meyer:
Wow. It’s like 40% of the gas fleet we’re going to add to our existing fleet. Like, this is not a small change to the size of the gas fleet. This is like a major expansion of U.S. generation capacity.
Emily Pontecorvo:
Yeah. And the thing is, the numbers I gave earlier, those are just projects that have some relationship to the data center build out. The report also gave an estimate of just total natural gas generation that’s being planned across the country. And that number is 378 gigawatts. So it’s almost, you know, nearly doubling what we have today. And what was really interesting was I went back and looked at when was a lot of the existing natural gas generation built? Was there a time in the past where we ... Natural gas plants this quickly. And there’s like a pretty clear kind of analogous time period in the early 2000s where we built, what was it, like nearly, it was like more than 150 gigawatts in just four years. I saw different estimates. It was like maybe closer to 200. But that was a very different build out where this time the plants are much, much bigger. And so many of them are being built off-grid.
Robinson Meyer:
It is actually crazy to me the scale of the build-out that is not being built to service AI, first of all, because I would have assumed that basically the number, that upfront number, was basically all the gas because all of it would be going to AI. So the fact that there’s another, what, 150, 140 gigawatts going to just general generation is pretty crazy.
Emily Pontecorvo:
Yeah, I will say it is possible that some of that is duplicative. Like I was talking to Brendan Pierpont from Energy Innovation. He is on their electricity team, and he was pointing out that they’re seeing that in a lot of cases, the developers will go to the utilities first and ask for a certain amount of capacity. And then when they see how long that’s going to take, then they’ll kind of turn to an off-grid project. And so it’s possible that both of those are getting included in this data, but it’s so hard to really pinpoint what the numbers are.
Robinson Meyer:
So how should we think about these 189 gigawatts? Because as you said at the top of this episode, like there’s a haziness to all of this because sometimes the same gigawatt, so to speak, of demand gets requested in multiple different venues, either in different grids or at different locations, or they ask for it on grid and then they try to build it off grid. At the same time, One through line of this AI story since the beginning has been the difficulty of getting any kind of bead on demand and on the scale of demand. And it seems entirely possible to me that these 189 gigawatts are not going to all get built, but that we are going to add 189 gigawatts because maybe there’s another 100 gigawatts of demand that’s waiting to be requested. And, you know, if we build 70% of these requested gigawatts and 30% of those requested gigawatts, we’re still hitting 190 gigawatts, we’re still hitting 200 gigawatts. And so how do you think about the likelihood that this demand becomes like real capacity in the economy?
Emily Pontecorvo:
I think that the demand is real. I don’t know that 189 gigawatts of natural gas fired power plants, and especially the particular list that this report comes up with, I don’t know that those are real. But I think between data centers and a lot of other kinds of demand that we’re putting on the grid, air conditioning, electric vehicles, manufacturing, like absolutely 189 gigawatts is real. I think that the really big question is how real are these natural gas projects and how quickly will they get built? What kinds of equipment, what kinds of technology they’ll use? So
Emily Pontecorvo:
I basically went through this exercise of trying to identify the 10 biggest projects. And my initial list and my final list are not the same because as I was like researching each individual one, everything felt like sand slipping through my fingers. Like I would see one press release and then one, you know, news article with rumors about XYZ. And then the company’s website said one thing and the permit said another thing. And it was really hard to get a good grasp of, here’s a developer with a project that they say can meet five gigawatts of demand someday. And yet, in the near term, they’re actually just going to build 150 megawatts.
Emily Pontecorvo:
And so, like, should we think about that? Right, exactly.
Robinson Meyer:
This is the case for the OpenAI facility. I wrote about this for Heatmap Daily, our daily afternoon newsletter that everyone should hopefully be subscribed to. But there is this big OpenAI Department of Energy data center that is being planned in Ohio. It’s being built on a kind of ex-nuclear site that the DOE owns. And I think one of the interesting things, I mean, there’s a lot of interesting things about this project. But first of all, it’s massive. It’s nearly 10 gigawatts. It would rival the largest natural gas power plants in the world. I think it’s going to be right now.
Robinson Meyer:
Neck and neck. If the whole thing gets built, it would be right around the same size as the Jabal Ali power and desalination gas plant in Dubai. And it’s all going to go to an open AI data center. It’s backstopped by Nvidia. We learned that last month, it’s really going to increase the likelihood that this facility gets built out. But what’s interesting is that the natural gas plant is going to be built on federal land, on Department of Energy land. It’s going to be owned by the DOE and financed by Japan as part of this Trump-Japan trade deal. Now, I think there’s still a lot of questions about how much this gets built. But to your point, what’s difficult about thinking about this plant is that they want to eventually build more than nine gigawatts of power. They plan to initially build 800 megawatts of gas, which is a lot of gas, but not like a Grand Coulee Dam’s worth of gas. That is a very large gas plant, but it is not a unprecedentedly large gas plant. And how do you assess the scale of that demand, right? Do you think of it as an 800 megawatt gas plant that could literally grow 10x over the next few years? Or do you think of it as a nine and a half gigawatt gas plant, and therefore the largest power generation project in American history?
Emily Pontecorvo:
Right. I mean, so there’s like so many projects that are in this data, that are in that 189 gigawatts, like Fermi America, the big project in Texas.
Robinson Meyer:
The Rick Perry associated project, yes.
Emily Pontecorvo:
Yes. And so they’re also aspiring to even bigger than the OpenAI project. I believe their stated total power generation for the site is like 17 gigawatts, 11 gigawatts of natural gas, plus a bunch of nuclear and some other stuff. Just completely pie in the sky numbers. they already have a permit for the 11 gigawatts of natural gas though or actually no i’m sorry they have a permit for the first six and submitted a permit for the next five but
Robinson Meyer:
Big plant that’s still a really big.
Emily Pontecorvo:
Plant it’s a really big plant and yeah there’s all these projects in the list that have these huge numbers but then what’s actually happening is they’re being built in phases and the first phase might just be a couple hundred megawatts or one gigawatt or between one and two is what I’ve mostly seen. And so whether that first phase is successfully built will determine whether the additional phases are built will determine how much of that 189 gigawatts.
Robinson Meyer:
Right. Well, and also like if the AI boom is still going strong in 2028 and 2029 and 2030, then they can keep building gas to service it. Who knows what the economy will be like by then? You and I will work for AI map or something.
Robinson Meyer:
Can we talk a little bit about like, why are companies building gas? Clean energy advocates talk a lot about how wind and solar, especially solar and batteries are the cheapest source of electricity. I would say when you talk to electricity traders, too, like when you talk to people in the market every day, they also talk about how cheap solar is. So why are companies building gas and not solar to service these facilities?
Emily Pontecorvo:
So there’s like, a lot of different reasons that are all kind of coming together. Maybe the biggest one of all are the bottlenecks to connecting to the grid, the transmission bottlenecks. And that’s really pushing a lot of these companies to look for off-grid solutions.
Robinson Meyer:
And specifically just to like play that out, because they cannot site enough acreage of solar on the site where they would put a data center to generate the power they need, which means they need a grid hookup. But if they need to generate their own power on their own acreage, then you need an extremely energy-dense form of generation, and that means you go to gas. Right, right.
Emily Pontecorvo:
And then I think that’s coming together with a bunch of political factors, like the Trump administration has a strong interest in pushing natural gas. They have gotten rid of the tax credits for clean energy. They’ve made renewable energy, wind and solar, really hard to build with all of these permitting freezes and permitting obstacles for renewables. I think another element is just like the extreme speed and kind of urgency that AI companies are expanding at and demanding power at, which I guess kind of circles back to the interconnection issue and just not wanting to wait to be connected to the grid. And then the last one that I think is important is this issue with affordability in data centers where people are really worried about the build out, increasing their energy bills. And a lot of data center developers are pushing this idea that by bringing their own generation, by building these gas power plants on site, not connecting to the grid, they’re kind of putting their project in a box and ensuring that it doesn’t have any impact on regular rate payers.
Robinson Meyer:
It’s interesting to me, the ratepayer protection pledge from Trump pledges that, data centers won’t make electricity rates go up. And the solution to this for a lot of these companies, as you were saying, when they look at the set of constraints that they’re working within that include acreage, cost, regulation, local grid interconnection capacity, speed to power, they solve this set of constraints by going with gas. And I mean, I think there’s a few interesting aspects about it. First of all, it’s not clear to me that it makes data centers any more popular. He recently did polling that made a lot of news that found that 75% of Americans at this point would oppose the data center being built near where they live. I’m not convinced that adding a fossil fuel power plant to a proposed data center project makes it any more popular because it’s taking a quasi-industrial site and turning it into a full-on industrial site. But that being said, one of the promises made by adding gas generation at the data center is that by generating your own electricity, you’re not increasing local demand for electricity and therefore not increasing anyone’s rates. Now...
Robinson Meyer:
There’s a whole separate conversation to have here about whether adding marginal large-scale loads to electricity grids outside of markets like the Mid-Atlantic, which are structured in a particular way where that jacks up everyone’s rates. There’s a whole separate question and discussion to have here about basically, if you add large customers to an electricity grid because of how electricity rates are designed, that may actually bring down everyone’s bills. But I don’t want to have that conversation now. But like, it’s not clear to me that they are actually like, companies build gas to protect everyone’s electricity rates from going up nearby. And whether or not that is a good idea, and whether or not that is true, what gets left out of that conversation is whether they’re protecting everyone else’s gas rates. And the natural gas system is also a fixed system. And unlike the electricity system where you’re moving electrons around, so to speak, and you can re-rate lines, you can up-rate existing transmission lines, like you are moving molecules around with natural gas. And one thing I have wondered is like, if we’re adding gigawatts and gigawatts of gas generation to an existing gas grid.
Robinson Meyer:
Are we about to see natural gas prices go up around the country, especially when you take into effect that LNG demand is also about to double over the next few years? And so there’s like we were already worried about LNG export driving up natural gas rates. Now we’re adding LNG and a nine gigawatt scale natural gas power plant is basically like a medium sized LNG plant’s worth of demand. You’re just exporting carbon dioxide into the sky and producing electricity right so like hyperscalers can protect electricity rates by building local gas generation it’s not clear to me they can protect gas rates.
Emily Pontecorvo:
Yeah I, I mean we’ve talked about this. I, I think it’s a ... I did talk a little bit about this with folks when i was reporting on this gas build out, and I think the natural gas international natural gas market is complicated, and it’s not like there’s like a one-to-one, you know, increased demand here prices go up here…
Robinson Meyer:
It’s also like when you talk about natural gas pricing like what drives natural gas pricing in the united states is like number one weather and then like ... dot dot dot ... like a gap as big as the grand canyon and then number two like, local supply constraints and then number three is like local demand you know like there’s the number one thing driving natural gas rates remains weather but I don’t know whether these.
Emily Pontecorvo:
Things wonder yeah like if any of these mega projects get built to this the scale that they are trying to and like will they be fighting with lng exports for capacity it’s hard to it’s hard to imagine
Robinson Meyer:
Of these 10 projects, like what surprised you most? Or what project kind of wound up on the list that you did not expect to see on the list at the beginning?
Emily Pontecorvo:
So, you know, going back to a few things that we’ve talked about, like, why is this happening? Why are why gas plants? There were two projects on the list that I was surprised to learn about that were, I think, have been sort of overshadowed by the OpenAI project. But there are two additional natural gas mega projects that are coming out of this U.S.-Japan trade deal that are going to be financed by Japan and owned by the U.S.
Robinson Meyer:
I think they’re financed by Japan, owned by SoftBank’s new energy subsidiary.
Emily Pontecorvo:
In this case, SoftBank is not involved. So NextEra is building a big project in Pennsylvania. They haven’t said where yet. And a big project in Texas, neither is like has a data center attached to it. It’s a little bit unclear whether there will be a data center attached to it. The Pennsylvania one might connect to the grid. But nonetheless, these deals have been advertised as being sort of motivated by increased data center demand. And so just going back to what we were talking about before, like, I do think that a significant amount of this buildup is the Trump administration wanting to build gas plants. Like, that’s nearly 20 between these three projects, the OpenAI one and the two NextEra projects. That’s nearly 20 gigawatts of natural gas fired capacity that the Trump administration is behind through this trade deal.
Robinson Meyer:
That’s crazy. Do we know for the 180 gigawatts built-to-service AI, for the hundreds of gigawatts that we think might be coming online for these 20 gigawatts, do we know what ... Kind of power plant they’re going to build. Because as we’ve discussed on previous episodes of Shift Key, there’s several different kinds of gas plants that are being built. The most efficient tend to be these combined cycle plants, which use the exhaust from generating electricity to then generate more electricity. And then that can kind of scale up through a peaker plant all the way to just basically now people are running jet engines to generate electricity. That matters a lot to the emissions profile of these plants because it matters a lot to their energy efficiency in just a very kind of classical sense. Do we have any sense of how efficient this nearly 190 gigawatts could be?
Emily Pontecorvo:
No, we don’t. In the case of these three projects that came out of the U.S.-Japan trade deal, it’s a little bit fuzzy still what technologies they’ll be using. I think in the case of the OpenAI plant, they said that they have the initial generation equipment secured, which maybe that just leads me to think that it’s combined cycle turbines since those are in shorter supply.
Robinson Meyer:
The hardest to get. Or maybe it means that they absolutely don’t have combined cycle turbines. Maybe, maybe.
Emily Pontecorvo:
But in going through this list, what I learned is that like, yeah, a lot of these projects are the ones that are permitted where, you know, you get really specific information about exactly what technology they’re using. A lot of them are using these combustion engines, just putting like dozens of them on site and,
Robinson Meyer:
Let’s ask the question that I think is nearest and dearest to both of our hearts. Like, what does this mean for U.S. emissions? Do we have any ability to estimate what a gas build out of the scale, what does this mean for U.S. emissions?
Emily Pontecorvo:
I tried to answer that question for this story, and I think it’s one that I’m going to continue to look into. It’s really hard to say at this point because so much of it is speculative. We don’t know, you know, is a third of this real? Is half of it real? Will it all eventually be real? What technologies will they end up using? How much of it will be on-grid versus off-grid? Like all of those questions will impact what it means in the long run. I think the best kind of estimate that I found was to look at the Rhodium Group’s taking stock report. They just put out their latest version of this last month. And this report they put out annually, it basically looks at, you know, if we take current policy, energy, technology trends, and we project them out into the future, what happens to emissions. So they found power sector emissions could decline 24 to 48% by 2040.
Emily Pontecorvo:
Compared to today, yeah. So, you know, that maybe it’s hard to tell, like, is that good? Is that bad? That is a significantly worse outcome than what they found two years ago when they did the same exercise and the Inflation Reduction Act was kind of in full swing. At that point, their estimate was power sector emissions would decline by at least 42%, so near the high end of the current estimate, by 2035, so five years earlier. Both of those reports did take into account lots of data center demand growth, but they did not, neither of them took into account the potential for a lot of that demand growth to be met with off-grid natural gas combustion engines. And so, you know, those are much worse from a mission standpoint. And the other thing, when I spoke to Ben King, one of the authors, and he was saying, you know, not only are these less efficient systems, these combustion engines and simple cycle turbines, but putting them off-grid also, they’ll be running around the clock. Whereas like if they were on the grid, you have this amazingly efficient system that’s, they’re being called upon when they’re needed, but they’re not necessarily...
Robinson Meyer:
Right, you have price-based dispatch.
Emily Pontecorvo:
Yeah, yeah.
Robinson Meyer:
What does this mean for corporate net zero goals? And to what extent is the AI high boom kind of turning corporate net zero goals into a dead letter?
Emily Pontecorvo:
So, you know, all of these companies, the biggest AI hyperscalers, Microsoft, Google, Meta, Amazon, those four specifically, they are still the biggest clean energy buyers in the world. Like Amazon has funded, you know, has more clean energy PPAs than any other company in the world. At the same time, Amazon is behind this natural gas power plant in Texas that’s going to be 7.65 gigawatts, depending on what else gets built, could be the biggest natural gas plant in the U.S. So it’s really hard.
Robinson Meyer:
For about a week, we thought it was the biggest natural gas plant in the U.S. And then this OpenAI project got announced.
Emily Pontecorvo:
Right, right. So yeah, it’s very hard to square these two sides of the coin where like these companies, on the one hand, seem to be totally throwing out their net zero goals and just trying to build as quickly as possible with whatever they can get. And on the other hand, they are still publicly stating their commitment to the net zero goal and still publicly signing power purchase agreements with clean energy. I don’t know that we have a good accounting yet of how much gas are they helping get built versus how much renewables. And I don’t know if that exercise is possible, but if you know, reach out to me. But there is something sort of absurd or like it just feels so implausible that these companies could still say we’re committed to go net zero and meanwhile be supporting these natural gas mega projects.
Robinson Meyer:
How many of these companies are still pledging to hit net zero by 2030?
Emily Pontecorvo:
Those four, the big, like Amazon, Microsoft, Meta, Google, the thing is
Robinson Meyer:
They all still have 2030 net zero goals.
Emily Pontecorvo:
They’re either 2030 or 2035. But I mean, on one hand, Google calls it a moonshot. And they have language like that, where they’re like, this is our guiding principle. This is our aspiration. But even that if this is your guiding principle how is it guiding you to support it
Robinson Meyer:
We did get to the moon, do you know what i mean a lot companies the government does this now too like public sector organizations they use moonshot to refer to something they want to do but are not probably going to do but in fact the whole thing about the moonshot was we did in fact get to the moon.
Emily Pontecorvo:
The thing is, like, is it still possible for a company like Microsoft or Google to hit net zero emissions by whatever date they choose on paper? Probably. That will maybe depend on the corporate standards that rise up in the next couple of years that determine what they are allowed to say on paper and how we account for certain things like carbon removal and clean energy purchases, those accounting rules can really change what these companies say they’ve accomplished. Will they have achieved net zero in the true spirit of trying to get the whole world to go net zero? I think that seems a lot less likely.
Robinson Meyer:
Well, this is, I mean, you’ve written about this too, but I guess what all this suggests to me is that corporate net zero goals and arguably even national net zero goals are not even the right thing to be training on because, and I’m not trying to make excuses for the tech companies here, because I completely agree with you that this gas build-out is not at all in line with their climate commitments. However if they were to basically give up on their climate commitments, and pull out their investments in all these other technologies that are crucial for global decarbonization and those technologies never got developed that would be a tragedy, like that would be really bad and to some degree if google, or microsoft with their investments that they’re making to meet their net zero goal, were to seed, a technology that is crucial to overall global decarbonization. To some degree, that is more important than whether Google is able to make a zero appear on its books in 2035 or 2040.
Robinson Meyer:
And I don’t mean to be too glib about this, but I do think we actually accept this logic in the case of other industries. I would argue, I think climate advocates would argue pretty forcefully that like the coal that was an input into the Chinese solar industry ultimately at this point has been overwhelmed by the emissions reductions from the Chinese solar industry, number one. But it was number two, it was like important because now we have the Chinese solar industry, which is able to produce solar panels at this unprecedented scale for global decarbonization. And setting aside the particular kind of security implications of that, it just seems to me that like, It is bad that these companies are doing this, but it would in some ways be worse for them to kind of stop.
Emily Pontecorvo:
I don’t know why one precludes the other.
Robinson Meyer:
I mean, well, just because I think that the charge here is not hypocrisy. I would rather they remain hypocritical, but doing something for net zero. I would like them to stop emitting. But if they are going to emit, I don’t mind that they’re hypocrites, I guess is maybe what I’m saying.
Emily Pontecorvo:
Sure. I mean, I do think that there is a potential problem with using net zero as the kind of defining goal.
Robinson Meyer:
Yes, yes. Right. In fact, the goal is a bad one.
Emily Pontecorvo:
Yeah, I mean, I would love for these companies to come up with a new set of commitments that continue to motivate them to make the kind of transformative investments that they’re making, but that don’t lead people to believe that achieving this balance of inputs and outputs is not only feasible, but is like for one company by itself to do that is important.
Emily Pontecorvo:
And it’s much more important to look at the kind of global picture.
Robinson Meyer:
How do you think about this whole build out in context of climate? I mean, at this point, Heatmap has written extensively about the unpopularity of data centers. It’s clear that some people hate data centers because of their emissions impact, but it doesn’t seem to be driving that trend. Though in some ways that trend is so big, so generalized, and so amorphous in some ways that like everything is kind of driving it. How has your recent reporting made you think about the AI build out broadly?
Emily Pontecorvo:
I mean, I’d come back to the fact that we really don’t know the scale of it yet, because there are so many unknowns. So much of this development is speculative. How much natural gas will actually get built? We don’t know. I think there are some other kind of exciting unknowns, like will we be able to speed up the development of geothermal and some nuclear and some other cleaner sources that could maybe displace some of this gas? And then I also started to think about some other questions, which are like, in a future administration that wanted to do something about climate or a future Congress that had more capacity to do something about emissions, what kind of new constituencies does this build? Like, I wonder if, you know, in the past, companies like Microsoft and Google have been supporters of emissions regulation and clean energy policy. But if they suddenly have all this natural gas on their books, are they going to still support regulating emissions? Like, they might have a vested interest in fighting natural gas power plant controls.
Robinson Meyer:
It’s been so fascinating watching the political backlash to data centers. And I think especially because data centers threaten to be this massive emissions bomb, right? But also because that doesn’t really seem to be what the backlash is about. And I am filled with a little bit of a sense of foreboding watching this because I know the scale of infrastructure change that is going to have to happen to decarbonize. And it is smaller than the data center build out. Now, I think we have a lot more to offer people in some ways than AI does. But I don’t know that, for instance, the faces of that decarbonization infrastructure change will be any more trusted than the faces of this infrastructure build out. And so, you know, Tom Perriello, former congressman, actually was in climate philanthropy for a long time.
Robinson Meyer:
Was a fairly important figure in climate philanthropy, is now running for Congress again. His odds aren’t great, but he’s running in this Republican district near Charlottesville, Virginia. And he just came out with an ad that was against transmission lines. It was against a transmission line. And it was also kind of against data centers because there’s an unpopular transmission line in his district. And listen, he’s a politician, right? He’s going to do what he needs to do to win that election. But like, if Tom Perriello, of all people, is willing to nod along to the threats of transmission lines, which are non-existent and, in fact, essential to the energy transition. I can’t look at the data center backlash and be entirely like, yes, only good can happen, to paraphrase our president.
Emily Pontecorvo:
Yeah. I mean, the one thing that I, when I think about comparing, if we didn’t have this crazy data center build out, and instead what we had was a huge surge of electric vehicles and heat pumps that created this energy crisis that, you know, where we needed to build a lot of power plants. I think the main difference in those two scenarios is the speed of it. Like, less the scale. I think the scale is somewhat equivalent, but it would at least have happened or it can still happen in the it might have been, people wouldn’t have been bombarded with a project in their backyard in every county in the country.
Robinson Meyer:
That’s not happening. And there’s an interesting angle here. We’ve talked about it on previous shows, but we always expected load growth to come back in the 2030s. In fact, we kind of need it to come back in the 2030s if we’re anywhere close to hitting climate goals. And if the economy not only decarbonizes, but modernizes in the way that we would like it to modernize, it will require load growth to go up. But I wonder if climate advocates are a little lucky that the people eating, the initial wave of load growth, the people who are kind of the clarions of load growth, as it were, are not decarbonization industries, but the big tech companies, which already had their own PR issues.
Emily Pontecorvo:
I don’t know. Well, a second ago, you were wondering if this doesn’t bode poorly for...
Robinson Meyer:
I think it ... I don’t know. I don’t know. I managed to feel bad about it either way. We’re going to have to leave it there. Emily Panacorvo, thanks so much for joining us on Shift Key.
Emily Pontecorvo:
Thanks, Rob.
Robinson Meyer:
And that will do it for us today. I hope you enjoy the dwindling days of your summer. Remember to stick around after the show for a conversation between Heatmap Labs and the sponsor of this episode, Verse. It should be really, really interesting. Until then, Shift Key is a production of Heatmap News. Our editors are Jillian Gibbon and Nico Loricello. Multimedia editing and audio production is by Jacob Lambert and by Nick Woodbury. Our music’s by Adam Cromelow. Thanks so much for listening. See you next time.
Mike Munsell:
My name is Mike Munsell, and I’m the Vice President of Partnerships with Heatmap News. In my last conversation with Seyed Madaeni, we talked about Versus’ business model helping data centers and large energy consumers connect to power. In today’s conversation, we chat about Versus’ recent Series B, and we go deep on speed to power. Let’s talk about speed to power. Why is everyone talking about this concept today, and how is Versus helping to accelerate that deployment? Very good question. And I think this is the billion dollar question, if not a trillion dollar question. So as we know, AI is compute, and compute needs power. So the first order of business, if you’re, I’m just going to use an example, if you’re developing 100-megawatt data center, the size of these data centers are measured in units of power. Let’s say for the sake of the argument when we talk about 100 megawatt data center if you apply for interconnection meaning that you want to power your facility so your chips start running and your AI models start training that takes a long time the reason that it takes a long time is utilities need to do planning studies they’re basically answering two questions one is there enough energy at the grid level to serve your consumption and your demand? Second, if there is, is there enough transmission and distribution wires to get the power to your location?
Seyed Madaeni:
Given this enormous amount of growth, the answer usually fails on both fronts. And as days go by and our grid becomes more and more saturated, the wait times are going to be even longer and longer because the world of power and energy doesn’t move at the speed of AI. It takes years to build transmission lines. It takes years to build power facilities. So how do we solve this problem? Is there a magic wand that we can use to accelerate the time for in a connection of these large loads the answer is yes in a nutshell is to bring your own generation to the mix and that is by deploying behind the meter assets behind the meter assets that are capable of
Seyed Madaeni:
Charging up energy giving it back to the grid like energy storage or solar or nimble gas plants. So really the solution is to pair your data center with these large physical assets such that when you are being studied by the local utility, you’re not no longer seen as a 100 megawatt fixed load that consumes electricity around the clock. You have the capability to shape and form your energy profile. But those physical assets, they’re not just going to drive themselves. They need software. Ironically, they need AI to solve the AI compute problem. And that’s where we come in. We control these assets on a second by second basis to, again, make sure the needs of the utilities are met, the needs of the data center is met. And then plus, we can give back to the grid and be grid grid citizens by participating electricity markets and really trying to offer that capacity to suppress electricity prices. That’s the solution that’s really being adopted. And we play a role in kind of controlling those assets on a 10, 15 year basis.
Mike Munsell:
And I saw you recently completed a Series B of which Nvidia and Google Ventures were big backers. Can you talk more about that and why Nvidia and Google are invested in versus success? And is it related to that speed to power equation?
Seyed Madaeni:
We just closed the Series B round. It was led by Bessemer Venture Partners. They’re an amazing group of folks, have more than a century of experience in investing. You’re absolutely right. Nvidia backed us. Also, Google Ventures, which led our Series A round. They also took part in our Series B round. Essentially, the value prop that we have in the investment thesis that these investors try to pursue is, can Verse be the entity to solve the grid problem so we can be good grid citizens and also simultaneously win the AI race? That was the fundamental investment thesis. and we managed to prove that we are the team, we are the platform. And as a result, they did participate. Now we’re working alongside Nvidia to integrate with their DSX platform and kind of be that part of the standard reference design, which we are working towards. Obviously, Google has a big need of data centers. Plus, we’re also serving a lot of hyperscalers and we have a deep backlog in the queue to kind of help contribute to bring these CapEx online.
Seyed Madaeni:
But we also have a very good angle that we can look back and not only we solve the problem, but we also help towards sustainability because believe it or not, solar and storage is the quickest and cheapest solution that you can deploy. We’re at the moment of time that CFOs like clean energy because it’s economic and clean, which gives us momentum to try to solve this problem.
Mike Munsell:
Let’s get into that. What is VERS deploying today? And what does the system look like when you integrate it with a data center?
Seyed Madaeni:
We as a company, we are AI software driven. So we are not really developing the physical projects. That requires financing, that requires a balance sheet, that requires expertise in EPC and construction. That’s why we have partners like Calibrand and And they’re top notch, not from the kind of physical development, but understanding how the systems work, holding the hands of these customers to understand what the value proposition is. Our work is mostly on the software side. Just think about it when you build an amazing car. That car needs a driver. And in this case, these assets need a driver, but it can’t be a human driver because you’re making decisions every millisecond, whether to fire up the battery, curtail the solar. Draw from the grid so we’re you need a autonomous self-driving car and this is like self-driving assets so ironically we’re using ai to train our models to control these assets but that’s the role that we play and in terms of the underlying assets that we’re seeing a lot of lithium-ion batteries systems from tesla influence and etc.
Seyed Madaeni:
A lot of solar and some nimble gas generators that can and be part of the mix and the solution. But we have integrations with a lot of these OEMs, SCADA systems, meters to be able to effectively control.
Mike Munsell:
And you mentioned Calibrand. Can you talk more about your partnership with them and how they’re helping you deploy today?
Seyed Madaeni:
Yeah. So basically, as we announced in our Series B, I would look at them, the OG of energy infrastructure development, and they’ve made significant progress in this field. So they’re deploying assets, they’re financing assets, they’re their owner and operator. And our partnership, our involvement is on the software side because this is not a software and AI problem. You can’t build amazing software like the one that we have and just use it up in the air. You need to deploy it on physical assets. And it takes a whole team to do that from people that understand hardware, understand financing, understanding project development, and people who understand AI models and software platforms, we fit in more of the latter camp.
Mike Munsell:
Can you talk more about your project pipeline right now and maybe how your Series B is helping to deploy technology faster, perhaps?
Seyed Madaeni:
Yeah, so basically our backlog is pretty deep. We are in the business of managing assets at the end of the day. So we have gigawatts on the management. We’ll soon come out with some press releases in terms of showcasing what those numbers are. And then our backlog, it’s on the kind of plain vanilla contract management, utility bill management, a lot of enterprises ranging from retail to hyperscalers to manufacturing, steel companies. But on the dispatch intelligence, which is part of ARIA, we have a deep backlog and commitment from a lot of blue chip hyperscalers that need speed to power tomorrow. So really, our mix of customer base is, I would say, enterprises that spend $100 million and above on electricity, which by frame of reference, some of them spend billions of dollars. So that’s really our target ICP. And so far, the traction has been amazing.
Mike Munsell:
That wraps up today’s conversation with Sayed Medini, CEO of Verse. Stay tuned after the next episode of Shift Key to learn more about Verse’s next five years and what Sayed believes is needed for U.S. energy policy.
Rob talks with Heatmap’s Emily Pontecorvo about how the data center boom is changing our emissions trajectory.
The United States is staring down a natural gas buildout of gigantic proportions.
Amazon wants to build what would be the country’s largest power plant in Texas — and run it entirely on natural gas. Not to be outdone, OpenAI is plotting an even larger power plant in Ohio that, if built, would become the world’s largest gas power facility. How should we think about this boom — and about the AI and technology companies behind it, who remain some of the world’s biggest buyers of clean energy?
On this episode of Shift Key, Rob is joined by Emily Pontecorvo, a Heatmap founding staff writer. They discuss what Emily learned identifying the country’s 10 biggest gas projects, what surprised her most, and what this means for the country’s climate trajectory — and Big Tech’s corporate net-zero goals.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from their conversation:
Robinson Meyer: Can we talk a little bit about , why are companies building gas? Clean energy advocates talk a lot about how wind and solar — especially solar and batteries — are the cheapest source of electricity. I would say, when you talk to electricity traders, too, like when you talk to people in the market every day, they also talk about how cheap solar is. So why are companies building gas and not solar to service these facilities?
Emily Pontecorvo: So there’s a lot of different reasons that are all kind of coming together. Maybe the biggest one of all are the bottlenecks to connecting to the grid, the transmission bottlenecks. And that’s really pushing a lot of these companies to look for off-grid solutions.
Meyer: And specifically, just to play that out, because they cannot site enough acreage of solar on the site where they would put a data center to generate the power they need, which means they need a grid hookup. But if they need to generate their own power on their own acreage, then you need an extremely energy-dense form of generation, and that means you go to gas.
Pontecorvo: Right, right. And then I think that’s coming together with a bunch of political factors, like the Trump administration has a strong interest in pushing natural gas. They have gotten rid of the tax credits for clean energy. They’ve made renewable energy, wind and solar, really hard to build with all of these permitting freezes and permitting obstacles for renewables.
I think another element is just the extreme speed and urgency that AI companies are expanding at and demanding power at, which I guess kind of circles back to the interconnection issue and just not wanting to wait to be connected to the grid. And then the last one that I think is important is this issue with affordability in data centers, where people are really worried about the buildout increasing their energy bills. And a lot of data center developers are pushing this idea that by bringing their own generation, by building these gas power plants onsite, not connecting to the grid, they’re kind of putting their project in a box and ensuring that it doesn’t have any impact on regular ratepayers.
Meyer: It’s interesting to me — the Ratepayer Protection Pledge from Trump pledges that data centers won’t make electricity rates go up. And the solution to this for a lot of these companies, as you were saying, when they look at the set of constraints that they’re working within that include acreage, cost, regulation, local grid interconnection capacity, speed to power — they solve this set of constraints by going with gas. And I mean, I think there’s a few interesting aspects about it.
First of all, it’s not clear to me that it makes data centers any more popular. We recently did polling that made a lot of news that found that 75% of Americans, at this point, would oppose the data center being built near where they live. I’m not convinced that adding a fossil fuel power plant to a proposed data center project makes it any more popular because it’s taking a quasi-industrial site and turning it into a full-on industrial site. But that being said, one of the promises made by adding gas generation at the data center is that by generating your own electricity, you’re not increasing local demand for electricity and therefore not increasing anyone’s rates.
You can find a full transcript of the episode here.
Mentioned:
The U.S. Is Building Natural Gas Power Twice as Fast as China
Emily on Amazon’s Gigawatt Ranch
Rob on OpenAI and the PORTS-Pike Technology Campus
This episode of Shift Key is sponsored by ...
Verse's software platform Aria helps data centers connect to the grid faster and optimize power operations in real time. Learn more at verse.inc.
RE+ 26 is the largest clean energy event in North America, happening November 16th through 19th at the Las Vegas Convention Center. Register at re-plus.com and use code SHIFTKEY20 to save 20% off a Full Conference pass.
Music for Shift Key is by Adam Kromelow.