TFTC: A Bitcoin Podcast - #249: Indian Point shutdown, electricity prices, Bitcoin 101, and externalities of wind energy w/ Robert Bryce

Episode Date: May 10, 2021

Join Marty as he sits down with Robert Bryce; author, documentarian, and host of the Power Hungry Podcast, to discuss: - The Indian Point power plant shutdown - Energy mix - Subsidies leading to capital misallocation - Bitcoin's value prop - The externalities that come with wind turbines - Land use and green energy - much more Follow Robert on Twitter Check out Robert's latest book, A Question of Power: Electricity and the Wealth of Nations Check out Robert's website Shoutout to this week's sponsors. Cash App. Start #stackingsats today. Use the promo code: "stackingsats" to receive $10 and contribute $10 to OWLS Lacrosse when you download the app. Lend at Hodl Hodl is a new non-custodial bitcoin backed lending platform, that allows peer to peer lending and borrowing between users, globally, anonymously & on your own terms. Create you offers & set your own terms on lend.hodlhodl.com Compass Mining. Compass wants to democratize bitcoins hashrate and give everyone the ability to strengthen the network while mining bitcoin profitably. Thanks to Compass, it’s never been easier to mine bitcoin. Check them out at compassmining.io Braiins. Braiins are leaders in the mining industry; running Slush Pool, creating firmware to make miners more profitable (Braiins OS+), and building out Stratum V2 to help further decentralize mining and make Bitcoin more robust. Check out their mining profitability calculator.

what is up freaks it's your boy marty bent here to introduce this episode of tales from the crypt yet another cross post with the great american mining podcast i had the pleasure of sitting down with robert bryce who's the host of the power hungry podcast documentarian documentary called juice prolific author author i just had to re-record this because i couldn't say author first time around messed it up again he's an author he's written many books on electricity power hungry being one of one of the books most recently um he he wrote a book that piggybacked on um his documentary juice uh in the name of that book is a question of power electricity and the wealth of nations i wanted to cross post this episode particularly because

I thoroughly enjoyed the conversation with Robert and I think this is a very important problem that many people in the mainstream are not talking about specifically the fragility of our energy grids and the nonsensical policies that are being forced upon Americans particularly that are that are pushing them away from reliable energy sources and towards unreliable sources making us more fragile making electricity more expensive and making us worse off as a result we talked a lot about the indian point nuclear plant shutdown in this episode as well as how subsidies bastardize incentives in capital allocation in the energy sector we talked about getting back to objective truth i think you guys are gonna like this one it's brought to you by our good friends at the

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if you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for bitcoin if you're not paying attention you probably should be welcome back to gamcast it's marty bent here sitting down with robert bryce prolific author and documentarian robert how are you doing today fine thanks marty happy to be with you Happy to have you here. Again, as we were just discussing before we hit record, your voice in the energy industry is one that is desperately needed and one that we want to highlight and project here at Great American Mining. you had the power hungry podcast where you do an incredible job of of just bringing on quality

guests who who talk logic in the energy markets is is the way i like to view it and i wanted to bring you on again because you you've done some incredible things on the content side your newest book a question of power uh electricity and the wealth of nations and that and that follows up on juice how electricity explains the world which is your documentary where you went around the world and trying to highlight how important electricity is for humanity, particularly for poor nations that need cheap electricity to join the first world and enjoy a higher quality of life. So I guess to start and to learn a little bit more about you,

particularly what drove you to want to tell these stories and highlight what's going on in terms of energy generation, electricity, and how it affects humanity. Sure. Well, first, thanks, Marty, for having me on. And I, you know, I care deeply about these issues. And in in juice, and in my book, a question of power, I talk about Bitcoin mining and Ethereum mining, and that these are, to me, it's very interesting business. And I'm not, you know, my son is all about Ethereum. And he's my he's been mining ether for a long time. And we've had many talks about it. But to answer your question, I've written a lot about energy and power systems for a long time. and for decades but i realized over the last five years or so well really the game is the electric grid and that is when and trying to think about it over over those years why are some countries rich

and why are some poor and further well one of those is because they have reliable electricity the wealthy ones do and the poor ones don't well why not what are the what are the characteristics and so um societal integrity is the key one and that's the part that to me is the most difficult You know, we talk about Nigeria, some of these other countries where they don't have electricity, good electricity service today, and they didn't have it 40 or 50 years ago. Well, why not? It's because the system fails. It doesn't work very well. The people don't believe in the system. It doesn't work for them. And there's corruption. And so that's the nut of a lot of the what the work that we did in the film and both in what I'm writing about in the book is that electric grids have to have integrity, they have to be, they have to support themselves. And you know, this is a Bitcoin miner, you have to make sure you have reliable, abundant and electric electricity that's as cheap as possible. And if you don't have it, you're going to go somewhere else. And so electricity is the key to modernity. And that was the motivator for a lot of my work on the book and the film. And it's one that I'm really tuned in now into now, because in frankly, in the Biden administration, despite the blackout in Texas in February, I was blacked out despite the

blackouts hit California last year. They haven't changed their rhetoric. It's still the same kind of, frankly, misleading and under informed rhetoric about, oh, we need more renewables. And meanwhile, we're shutting down nuclear plants. So giving you a long answer. But yeah, these these issues are the most important issues that we are dealing with in terms of energy and power today. Yeah, I agree. And it's a good transition towards the end of your explanation there is is the Indian Point power plant closure.

I touched on it with Meredith Angwin earlier this week, but it's pretty incredible that New York State has decided to shut down this extremely reliable source of energy and electricity. And so you wrote about it in your newsletter and in a Forbes article as well. Was that last week? That's right. It was last week, the plant closed down April 30, on a Friday, and my piece came out late on on February 20, or April 29. And, you know, the point to me, and I'm doing a whole series of podcasts this week on the closure of Indian Point, because

it, it is so sick. I mean, I get so cynical about this talk about climate action. And yet, here's the what is arguably the single most important power plant for the city of New York. It's important for grid stability. It's important for frequency control. It's important for fuel diversity. Even if you don't care about zero carbon, it still matters. And yet here we have all these politicians, including Governor Cuomo and de Blasio, Joe Biden, John Kerry, all these other ones say, oh, we're facing a climate crisis. Well then, excuse me, goddamn, why are you letting this power plant close down? If it's a crisis and you keep saying it's a crisis, this plant should

never have been closed and yet it was and so i just it it's it's truly staggering to me the the the political and and governmental malpractice here and and this should be a watershed moment in in terms of climate reality in america i hope it is i hope it is too it's particularly perplexing because it's going to be replaced by natural gas exactly generation and so they're going to have to get that nat gas delivered in from out of state after they basically barred any producers from from drilling wells in the Marcellus shale in New York State as well. So they've created a problem where they're literally just going to increase electricity prices for

the people of New York. I think he said, on average, over time, this will increase prices by one to one and a half cents a kilowatt hour for people in New York City. Yeah, those are some of the projections and that may well be low. Because what and Meredith, I'm glad you had her on your podcast. I think she hung the moon. I just think she's wonderful, you know, and to write and I've probably sold more copies of her book than I've sold in my own. And good for her. I mean, you know, she spent her career in

the electric business. And, and she approaches this in a very, very constructive way, I think. But she's got her point about the fatal trifecta of the too much rely the grid relying too much on renewables, too much reliance on imports and too much reliance on natural gas. That's exactly what is going to happen is hap has happened now in new york they're too much reliance on just in time natural gas at the at a time when the state has choked it has prevented drilling for shale gas and they're choking off their pipelines and so they're saying oh we'll do it with renewables well not only can you not build enough renewable capacity in new york you're gonna you're gonna have to import your electricity from somewhere else so it it's the the fragilization of the

electric grid for no good reason and it just is uh it's outrageous frankly i mean it really is outrageous what makes you question like how far are we going to go to virtue signal right this is all a virtue signal at the end of the day correct yeah well and that's the part that to me that and in i interviewed an episode for the podcast with uh mayor theresa knickerbocker and i said i asked a simple question i said why did indian point close and she said um it was uh that the fear mongers uh kept telling us that the plant was going to blow up and kill us all and so it was this rank fear-mongering by some of the mo by one of the most powerful environmental groups in the united states natural resources defense council has an annual budget in excess of 100 million

dollars claiming they claim they're all about climate change and climate crisis and the rest of it and then they go and their principal goal and then they tweeted about it on the day the plant did an indian point closed oh gosh gosh we did a great job thanks to all of our allies in closing this plant and we're going to move forward for clean energy and it's just i mean it really is just a disgusting move and i'm just it's why i mean it's just reinvigorated me in terms of my work because i just realized we're being had and and and for no good reason except this kind of of political muscle flexing yeah and it's we're being had and it's going to have pretty severe consequences for americans than humanity at large if the paris accord um becomes something that

the world's superpowers earnestly work towards and how many countless examples do we have to see around the world for for people to wake up right germany's transition to renewables over the course of the last two decades rising their residential uh electricity costs up to somewhere i think the latest number i saw was like 35 cents a kilowatt hour which is that's right pretty insane uh i mean what you just experienced in austin the push uh to over produce renewable solar and wind particularly leading to an unreliable grid when when peak demand hit earlier this winter similarly in california the decommissioning of the natural gas and nuclear power plants that that never had their generation replenished leading to rolling blackouts

and brownouts in that state and this is having real consequences i mean there were deaths in texas because the grid went down i'm sure there were deaths in california and other parts of the world as well because of this like and it's it's it's very funny too because all the larping and all the virtue signaling is to save lives and um it seems that their policies are either making people worse off economically, which could have sort of second order effects in terms of cause of death and or direct effects where people actually die because they don't have electricity to stay warm. Yeah. And I think as I've thought about this, you know, why did Texas end up in the situation that it did, right? This isn't California. And to me, having been blacked out

for 45 hours here i live in central austin we were blacked out for 45 hours sub zero to sub freezing temperatures um but thank god we had natural gas in our home you know because then we could cook and we had uh we could you know heat water on the stove and put a little steam in the air and we had a fireplace so we had firewood so we could burn things and yet the radical environmentalists the radical climate change activists are saying oh we need to ban combustion. We need to quit burning things. I mean, they've said these things out loud. And that Bill McKibben wrote a piece in the New Yorker to this very effect. This is one of the most powerful, highest profile environmentalists in America saying we need to quit burning things.

OK, look, climate change is a concern. There's no doubt about it. It's not the only concern. And that absolutism, I think, is the key problem, that this is the only concern. Therefore, no amount of money that we can spend is too no no no no invoice is too large we can we'll spend anything we we have to because of climate change well no we have to consider human welfare and we have to consider saving human lives and if the grid had failed in Texas and it came oh so close Marty I mean within a few minutes we've heard the the the CEO of ERCOT say that that tens of thousands of people could have died hundreds of thousands of people could have frozen to death. And yet we you know, we

continue with this ignorance and fragilization of the grid in large part, because I think policymakers, elected officials and non elected, don't understand how fragile the grid is and how we need to keep investing in resilience and reliability. Yeah, I completely agree. And I'm starting diving deeper into this particularly my my whole life it's been immersed in bitcoin the bitcoin network since i was 22 21 22 um and so i've been very dedicated to learning about bitcoin its inner workings how

how it works as i've gotten more into mining with great american mining and by extension of that the energy energy industry and just having to learn like how we're finding our cheap energy and diving into the climate emergency thing like is it really as like at what point do we begin strong men and women begin to stand up and scream at these climate emergency people these hysterics and say you've been consistently wrong for decades you were predicting that there was going to be like a billion climate related deaths in the 80s and climate related deaths have fallen since then like you're you're predicting that the

maldives are going to be under the ocean uh for the last five decades they're they're they're fine you're predicting miami manhattan going to be underwater in the next 10 years if that doesn't happen like at what point are we able to say like listen you people are simply crazy you're saying things that aren't coming true and we shouldn't be kowtowing to to your demands to to make our our grid system and our energy delivery systems more fragile what i try and do marty is i you You know, to me, arguing about the climate science and the number of parts per million that we should have in the atmosphere to me is a is a is a losing game in that I to me, those issues are they're important. But to me, the bigger issue and the one that I think answering the question is, if we're going to agree that climate issues are climate changes is a real concern. How do we respond? What are the things that make the most sense that are the provide the best no regrets strategy?

And in my view, and I've written about this for now for more than a decade, it's natural gas and nuclear. These are the fuels that are low carbon, scalable, relatively low cost, and that can meet the needs in various different sectors. We can use natural gas for transportation. We use it for fertilizer. Its supplies are super abundant geographically. This makes a lot of sense. And the same with nuclear. But this is one of the challenges is that we face a lot that that kind of policy doesn't get the kind of response among particularly among the most aggressive climate activists. So you see Bill McKibben, you see the Natural Resources Defense Council, other was saying, Oh, well, we can't use nuclear energy. Well, if we can't use nuclear energy, we cannot

make significant reductions in our CO2 emissions full stop. So I don't I avoid getting, you know, too far into the climate debate about who's right, who's wrong. Instead, what about humans? What about price? And what are we going to do that is makes the most sense both in terms of if we can't mitigate that is we can't cut CO2 emissions dramatically. And I don't think we will because of the enormity of our hydrocarbon consumption, then what's the best path forward. And I think Bjorn Lomborg's arguments are that are very powerful in that mitigation is going to be far too expensive, we have to spend more and focus more on adaptation. And that is a better use of our money. And we don't have unlimited money. Depends on who you ask. Yes, and you'll cash

car, you can just print it out of thin air, bring anything into this world. This is modern monetary theory, right? That's the Well, so let me ask you about that. Because I'm, you know, I'm curious, I'm, you know, I've written about Bitcoin, I've been at ether mining data centers in Iceland, I'm well familiar with the energy intensity of it. And I, you know, I get it. And to me, it's kind of fascinating, really, this is a whole, you're creating a currency that's an arbitrage on the price of electricity. That's how I see it. Right. But what about the I mean, how would you use it? And I'm asked this earnestly, because I don't know, if that it is, it can be a valuable store of money. Well, how are value? How do you then deploy it? How do you buy a

cheeseburger with it? I mean, that's the one of the things that I'm asking this in complete sincerity because i don't understand that part of it you just send bitcoin to somebody who's willing to accept it for a good right like the network's peer-to-peer so when you want to send money i have bitcoin on a wallet i paid for things in bitcoin um yeah you just send them some bitcoin this and then on top of that at the protocol level right now so the protocol layer of the bitcoin network is should be seen as a settlement layer comparable with central banks that settle between each other using gold and so at the protocol level it's a little bit more expensive to transact because demand is high and the amount of transactions you can fit in the

block is limited due to right scarce block space and so settlement transactions compete and the way they compete is they add fees to their transactions and so that can get a bit expensive for the little guy and so bitcoiners are building layers on top of the protocol layer to make it easy to transact simultaneously like instantaneously excuse me uh and for extremely low fees compared to uh the base layer chain so an example that is the lightning network um and so you can send so actually this podcast um if i were to post it on tales from the crypt and eventually on great american mining uh this will be possible as well i'm working on getting it on podcasting 2.0 but when people listen to my other podcasts about bitcoin tales from the crypt on particular apps

they can stream me Bitcoin payments every minute listen so I actually got my phone right here and you should actually be able to see this so you can see you receive payment you receive payment 49 sats so there's 100 million satoshis

in one Bitcoin so it's divisible down to 100 million units and even further divisible in that lightning network you can send Bitcoin pretty easily if you want to it's just whether or not people are willing to accept it That's probably the bigger problem is convincing merchants to accept it for a burger.

Right. Yeah. Well, that's good. I'm glad to get that because I genuinely didn't understand it. And that was one of the knocks on, you know, from Nouriel Roubini, who's a longtime critic, of course, and, you know, others, but that you can't, you're not able to build enough transactions on top of that to make it a substitute for credit cards or checks or something, you know, or cash. No, you can. Bitcoiners are working on it. again there will be different second layer solutions

there already are centralized second layer solutions like exchanges being one of them where you can exchanges can just keep ledgers on their back end and you can move bitcoin through them and they're not making any transactions

on the bitcoin chain they're just appending their ledger there's many ways in which it will scale it's still very early days that's the other thing most people don't want to spend their bitcoin right now because if the economic yeah the economic uh thesis and the monetary thesis plays out uh bitcoin is still extremely cheap right now relative to its total addressable market uh-huh right so what would that upper upper bound be then in terms of valuation or is there an upper bound it depends

So you ask, so I'm pretty bullish, I think, right? Fiat monetary system, you can print money ex nihilo. And so people look to store cash assets and look to store cash and other assets to get yield and use them as a store of value. Real estate being one of them, gold being another, people can argue the stock market as well. um people are literally pushing money into uh these assets because they want to keep up with inflation over time or potentially outperform inflation um and store their values and they

need to do it in hard assets they can't hold in cash because their cash is being inflated away um right that and treasury print a bunch of money sure um and so you have consumption goods so focus on real estate right now real estate should arguably be consumption good you should It's very static. You can't move it with you. The overall value of real estate, I would argue, should be limited to its consumption and aesthetic status in the eyes of the individual. But as you know, real estate prices are going crazy right now. new york city being one of the places people are near saudi russian chinese nationals literally just in rich america just storing value and high rises in new york city without uh without ever

going to them and so that's one addressable market right there is bitcoin sucks the store value use case out of real estate instead of storing value in in a real estate asset in manhattan why not Just buy Bitcoin, something that you can hold in your mind and hold on a piece of paper at your house instead of having to deal with the jurisdictional risks that come with real estate and eminent domain risk and deterioration risk, all that stuff. Gold, similar thing. I think Bitcoin makes gold bugs very angry, but I think it's going to replace gold just because it's better at the purpose that gold serves. It's scarcer. It's more divisible. It's easier to transfer.

um and it it it's not physical right so the physical nature of gold is arguably what bastardized the gold standard the fact that central governments and central banks could physically centralize the um the uh supply of gold issue notes on top of that and then eventually just say actually we're not just going to completely disconnect from a gold standard right old physical nature arguably led to the bastardization of of gold standard and i don't think we're going to be able to return to one simply because of what i just laid out that all the gold is still held in central bank vaults and other vaults around the world um it's easy to it's easy to replicate gold or to create like tonson bunk gold and fool people with that with

bitcoin it's extremely hard if you're running a full node you can verify that the bitcoin you're receiving is actually bitcoin um the cost to verify gold is two hundred thousand dollars where the cost to verify bitcoin is tens of dollars um and so when you when you take all those addressable markets real estate gold you can even throw stock in a season there would be reduced to their cash flows instead of speculative that we're seeing today some people say like 200 to 300 trillion dollar market cap um which would be 200 300 x what it is now i think one bitcoin in today's purchasing power is going to be worth millions of dollars by the end of the decade at least potentially tens of millions within a couple decades to three decades wow well i guess i

need to go out and buy me some then right now i i have minded in the past with uh one of the uh one of the mining firms and uh so anyway yeah i mean it's fascinating to me but i think you know for you know the purposes of what we've talked about here is the that um idea the arbitrage on top of electricity markets and where that goes and so that was one of the reasons we went to iceland uh in it for the filming of of juice um how electricity explains the world so it was why are these companies locating there well the their electricity costs for industrial users are about two cents kilowatt hour well that's pretty cheap and there's no and they can and not only is the electricity cheap they can use natural air cooling so for the for the data center so it was

a it was an impressive and very sophisticated operation and um and and now i you know i know people here in texas they're doing bitcoin mining out in west texas where it's hot there's no natural cooling um but they're running on on on on excess wind energy and so they're getting very low cost electricity so this you know this the reality is whatever the industry and i see this you know i've seen it myself, right, that when industry needs a lot of energy, they're going to go they're going to locate where they can get low cost energy, whether it's people, you know, they're making urethane, or any kind of, you know, you know, the

chemicals, plastics, whatever, they're going to go where the energy is the cheapest and that and mobile and capital is mobile. And that's what, you know, the shale revolution ignited in the US was a massive increase in foreign direct investment in the United States that has been very positive for both employment and for consumers in the United States. Yeah, I mean, I think Bitcoin takes that search for cheap energy and turns it up a notch, right?

Because what we say at Great American Mining, we use gas, natural gas that is not connected to a pipeline or a grid, typically flared. When we show up, we say, hey, we're gonna bring the market to the molecule. And so the beauty of Bitcoin mining is, particularly you show up, we go on a well pad, you say, hey, turn off that flare,

pipe that gas to our generators, going to mine bitcoin with it and you literally liquidate those gas assets into a monetary asset on site you don't need to build a robust piping infrastructure delivery system have trucks come on and off to to take your your assets and get them to market to then sell you literally monetize your your molecules on site via bitcoin mining you get multiple payouts a day that you can you can liquidate the us dollars if you want to or decide to hold it in bitcoin but yeah you you take those scarce molecules on site run them to this generator create electricity electricity powers our computers that produce hashes and those hashes allow miners to add blocks to the network

which then produces bitcoin as a reward right and i've seen that and i'm aware of that i mean some of these you know these mining operations very actually they're micro mining right i mean these just some of them are trailer mounted from what i've seen are they just using regular reciprocating engines on those like cat cat uh natural gas and fire generators and i'm assuming that's what they are like big v16 or you know one one one megawatt gen sets something like that is that was that your understanding yeah resips you can go you can daisy chain a couple 350 kilowatt generators together some 22 liter dusans and we just use generation equipment that's pretty common in the field oh yeah yeah no and those and that's one of the things that i've thought about too in terms of

resilience in in the in the texas grid and the texas legislature of course now is looking at a whole lot of measures that would add resilience to the grid and one idea that i had you know which would not pass the climate activists uh stan uh their standards i'm assuming is well why don't we deploy a lot of these big you know mobile gen sets and you know diesel fuel is a very good fuel been used for a long time and that's what they use in data centers for their backup systems so why not that why why couldn't we use just deploy you know at the gigawatt scale you know cat diesels or or cummins or doosan or you know you name it there's that there's a very liquid and large market in those generator sets that could provide that backup reliability that

that is clearly needed but you know whether that would be the the solution adopted i'm rather are doubtful. Crazy heads will prevail. Not even as a backup diesel not even as a backup. People need to freeze. Can't be using diesel. You know, one of the things Marty that really to me and I think it was Texas Monthly that did a good good piece which I've just glanced at but and I've wrote about it in a piece I published in Forbes after the after the blackouts was we had

roughly 200 people die in Texas, over 100 died of hypothermia. But the final tally of people who died of carbon monoxide poisoning, I think was in the dozens. And to me that and I wrote about it in Forbes, and I thought about it quite a lot. I mean, this is the ultimate example of people dying of energy poverty, that they're running diesel running, you know, a small gasoline generators in their garage, and they don't understand it has to be vented, or they're running a barbecue or something else inside. And these are horrific deaths. People are essentially being suffocated. And that one of the prime examples was after I think was Hurricane Harvey. There were five or six people who died in Port Arthur, Texas. They were taking refuge in a pool hall and they had a gen set and they fell asleep with the generator inside the building.

And they, you know, they were found the next day, all of them dead, not all of them dead. Some of them carbon monoxide poisoning had to be hospitalized. But I mean, this is the ultimate example of energy poverty during a time it was course of a natural natural disaster, but it's similar. But more people died, more people die because of cold and die of heat. And so this, you know, these deaths are eminently preventable. But we have to focus on that resiliency and reliability of energy availability. And that's the key part that I think in particular, I've been focused on lately, especially after the winter storm Yuri in February. so idea that we should um make everything electric right we can ban natural gas uh there's a bill in fact that's going to the governor hb 13 in fact i think today that is going to prohibit natural gas bans in the state of texas where you've had 40 communities in california already who've implemented bans the city of seattle a bunch of cities in massachusetts seeking the same thing it just makes the system less resilient wrestle less reliable and it's a ends up being a regressive

tax on the poor in the middle class because they are going to pay four times as more for electricity as they would for per btu as they would for for natural gas in their home so these are some of these policies are just they're not only wrong-headed they're in fact deeply dangerous i agree i'm sorry i'm looking away because i'm looking up for a chart that got pulled up earlier today and it's and an article that you wrote right like the generation for these renewable sources wind and solar particularly is extremely expensive like you wrote an article uh last week after the texas blackouts filed the wind and solar all 66 billion dollars of it the the amount of infrastructure investment that's going into building these wind and solar projects is not

producing the same amount of return in terms of energy produced capacity, yada, yada, yada. And that's where it gets difficult. Because you know, the point that I made in that article was that there's 60 before the blackouts, the industry's own numbers say $66 billion was spent in Texas on wind and solar, the overwhelming majority of that being in wind about 55 billion, something like that 56 billion well why was so much capacity built in texas in in those in for those two forms of generation it was because the federal tax incentives for solar and wind are so large why would you build anything else so you had a in between 2006 and 2020 the amount of electricity generated with wind went up something like 20 the amount generated with coal went down

by about the same amount so and then after the blackouts all the renewable promoters are saying oh well don't blame us that you know ercot wasn't expecting wind and solar to produce very much well okay well congratulations then you we spent 66 billion dollars and yet at 2 a.m on on february 15th when i was blacked out and every you know millions others the texans were blacked out at that very moment all that wind and solar spending was essentially worth nothing well so then why the the hell are we spending so much money on it? I mean, it's just like, the resilience and the reliability of the grid have been taken for granted. And I think it's because the

policymakers just don't understand the nature or the importance of the electric grid. Jay Haynes They don't, they don't understand much of anything. Honestly. It is getting frustrating. I read about a bill on the New York Senate floor yesterday, wants to put a three-year moratorium on bitcoin mining uh within the state because of its climate um impact when like i'm pretty positive something like 90 of the energy that bitcoin miners within new york state uses hydroelectric upstate is that right so they're locating upstate

where the where where they're getting uh cheap power from from uh new york power authority right yeah like in the fingerlings yeah right finger finger lakes yeah yeah and it's but it's like it's subs subsidies just ruin everything like you subsidize university student loans prices of university goes up and you you indebt a whole generation you subsidize these solar and wind projects and you you create fragile grits and just how bad is the subsidy program for energy in this country right now from your perspective well the issue is that it's it's it's it's it's contributing to the fragilization of the grid so that grid uh you know people that are are adding generation to the to the grid their their foremost concern is not how is this helping uh reliability

and resilience it's how much am i going to be able to make in in tax incentives and so that's what's driving a lot of the investment. And further, and this is the key part, Marty, is that because the tax incentives are so lucrative, what you end up creating in these markets where you have high penetration of renewables is negative pricing. So if the wind guy, you know, the wind developer is getting $20 or $25 per megawatt hour for the energy that he's producing, well, then he can actually bid prices that are negative into the grid and still make money. And so what does that do? Well, it has the knock on effect then of the thermal generator, whoever that is with a gas fired plant or a coal fired plant or something that reduces their profitability because they

can't bid negative. They're still buying fuel and they're not getting the same incentives. So that was one of the key problems in Texas was that the state did not have enough standby generation, effectively enough capacity because there were no, no gas fire generator, coal, the coal was being shut down. They couldn't finance their plants. They couldn't go to a bank and say, lend me money because the bank would look at their deal and say, well, you're not going to run enough hours in the year at a certain price level that can justify your loan. So we're not going to lend on it. And so this has really created a major problem in the state in terms of how now that you've had all these subsidies in place are we going to have to counter those with

some other subsidies in some other fashion in order to make the grid more reliable and it's the you know that that's a very bad outcome yeah bitcoiners are all about this when you distort when you distort the pricing mechanism and the allocation of capital which easy money allows you to do you're gonna have all these weird externalities negative externalities point pop up this being one of them i think that's why i'd be interested to get your take like as bitcoiners they're like a common phrase that we say is fix the money fix the world like we need to fix the money so you can't make these stupid decisions to allocate capital in this like it literally like you just mentioned like these projects would not have been able to go

get a loan if they were able to just put their numbers out there um without the subsidy i think right they're not the and and that's the part that you know gripes me i mean as my brother used to say grills my cheese chaps my hide we hear over and over oh well solar and wind are they're cheaper in the market well then if they're cheaper and they're this is the way we should be going why are you still collecting subsidies and why then in last december then where the production tax credit and the investment tax credit the the tax incentives for the wind and solar industries respectively they were extended in this massive spending bill the long the largest piece of legislation of nearly 6 000 pages ever passed by congress they were

added as writers onto this big omnibus spending bill with no debate so we've gotten these were temporary subsidies who was you know the the only thing that lasts longer and nothing lasts longer in washington than a temporary program i guess i don't know ronald reagan's line about that but this proves it like these oh these interest well we don't need these subsidies anymore you know charles grassley the father of the production type well this is never designed to be a permanent credit it's what's happened and so what you have then and and to your point about you know where bitcoin fits into this is that you have the big wall street and banks the investment banks you have the biggest of the big businesses amazon google etc saying oh no no no no no no don't

don't require us to provide any power when power is dear in the texas market that's what they're effectively arguing now at the legislature because we don't want to do that we want a free ride on the coal and gas and nuclear plants that that that the ones that actually provided power when the grid was going to collapse we don't want to have to provide power when the grid's ready to collapse because that messes up our economics so it's a it's a case of how these subsidies have have distorted and undermined the most critical network in society yeah and then it's starting to become compounded as well with the esg movement and the carbon credits accounting game that gets played you're just again creating these terrible incentives

within an economic system particularly in the energy industry that is distorting reality to a point that it's backfiring on humanity it's making humanity worse off John Greenewald And if I can follow that, that's the part where I don't quite understand where the ESG thing ends, because when you know, as I look at that, it's really only about carbon dioxide. I mean, that seems to me the fundamental issue around ESG. And you've seen BlackRock and others saying, well, when and now, European Development Bank saying, we're not going to fund any hydrocarbon projects. Well, okay, but hydrocarbons provide 85 87% of all global primary energy. So we're going to do with

it I mean the potential knock-on impacts of this these decisions and the lack of financing could be really catastrophic particularly for low-income countries and low-income people and then they're caught a catch-22 it's like because then you can't you can't subsidize these these solar and wind projects because they take a shit ton of hydrocarbons to produce themselves could you like you can't all right you want to go on down this ESG route you can't invest in wind solar you know how many hydrocarbons and how much iron you know how much coal it takes to produce all all these solar panels and all these wind turbines like it's it's so i'm getting angry now

because again we need to get to objective truth this is all bullshit larping and virtue signaling and larping i don't know that word what does that mean live it stands for live action role playing and like people trying to play hero in a game they've created in their mind and so okay the The ESG movement is a huge LARP. They're trying to save the world from a problem that probably doesn't exist. I'll be as bold as to say that. And they're making people worse off as it's all stemming from a need for a certain class of people throughout the world to attempt to separate themselves from the working class, be a moral superiority, because they can't do it financially anymore because wages have been suppressed so much. You've had an elite overproduction where you have hundreds, millions of people who have college degrees and they expect that to separate them financially from the working class. And that just isn't coming true because you've diluted the job market with people with degrees and they're not as competitive as they used to be. And now these people need to separate themselves morally. they need to be morally superior and the climate alarmism is one of the the biggest issues that a

lot of people are are tying themselves on but you have like the exons of the world all these producers begin to like larp be like oh we're gonna go esg it's like this is not in your best interest nor in the best interest of humanity but the subsidies and the economic incentive and the access to capital most importantly for these companies has gotten to a point where they can't do it and they can't get that capital if they don't virtue signal if they don't larp and it's just we live in a clown world it's like objective truth does not uh shine anymore it's it's all masquerading and putting makeup on a bunch of shit to make people feel better you know i mean you're speaking to some of the languages that i've i've thought about i haven't put it

quite in the way you've you just did. But I agree. And it's a lot of that. Meaningless rhetoric is I don't know if there's any area of modern discussion, modern society, where that's more obvious than in the climate change discussions. And so you have, and I wrote about this last week, you have President Biden addressing his first really his first major speech as President to joint session of Congress. He talks about climate, climate crisis he talks about nuclear weapons he talks about proliferation he talks about nuclear

programs in north korea but and and repeatedly saying we have to do something about climate change does not use the phrase nuclear energy one time not once well why is that why would the president who's a democrat and and to be clear last year for the first time in 48 years since 1972 the the democratic party included language in its uh party platform that said something positive about nuclear energy but then biden becomes president it's like it doesn't exist oh well we're going to talk about future reactors and advanced reactors and we're going to fund some of this and it's going to be the future and la la la what about the existing reactors these are the cheapest if we're serious if we're serious this is a this is a this is a a two-inch tap

in putt in golf it's a it's a layup in basketball instead they're allowing the indian point to close and then we're looking at the closure of the the byron and dresden plants in illinois this year and in four years the closure of the diablo canyon nuclear plant in california even if you don't believe in climate change the closure of these plants is bad policy from a land use standpoint which is the other part of my work that i'm very passionate about because of how rural America is getting screwed by big business. And that because the tax incentives are so lucrative, that companies like Invenergy, NextEra, and a lot of foreign companies are essentially forcing small towns in America to accept wind projects and solar projects that

they don't want. So it's, it really is an insidious system that we've created around these issues that are serving the interests frankly of a very few elites and and i and i hesitate to say that because it sounds cynical it sounds conspiratorial but increasingly i just see that's exactly what it is i mean charlie munger notorious bitcoin hater he has a very good quote show me the incentives i'll show you the outcome the incentives are all screwed they're all screwed by these subsidies by these tax breaks like show me the incentives of the system put before these people and i'll show you the outcome and i know we only have 10 minutes left but we were discussing this before we hit record let's dive more into that and that land particularly on the article

that you're writing for the wall street journal right now what's what's the situation well so i did a report that was published about two weeks ago now for the center of the american experiment which is a conservative think tank based in minneapolis i'm i'm a visiting fellow at the foundation for research on equal opportunity here in austin which i quite like free op here because my focus is on low and middle income people and how energy policy affects them but what what the report that i did for the center of the american experiment was documenting that there are now since 2015 about 300 different communities from vermont to hawaii who have rejected or restricted wind projects well you don't read about this in the new york times the new york times will not

cover this issue they will not cover the backlash in new york state against the wind business even though it's right in their in their state why because it doesn't fit the narrative and the narrative is oh there's just all this land out there and flyover country you know those hicks out there that don't have very much tea never your teeth and they married their cousin and you know they chew tobacco and drive pickups and they have guns and we're just going to put it out there because they you know well they don't really matter and in fact that's the as state to say it that is bluntly as that is but that's really the narrative and so the piece that i the report that I did for the Center of the American experiment, very proud

of it's called not in our backyard. You can find it on American American experiment.org. You can find a link on my website, robertbrice.com documents with links, the small town media outlets that have covered these, you know, the situate Massachusetts board of the town board or the town board in Yates, New York, or Madison County, Iowa, which in December banned new wind turbines and in reply, mid American energy is subsidiary of Berkshire Hathaway sued the county. So I mean, you

know, how cynical is all this? Show me the incentives and I'll show you the outcome. Well, yeah, the incentives in Iowa are to for Berkshire Hathaway, mid American to build a lot of wind turbines. The county, the county that's famous for its covered bridges said, we don't want any more of those damn wind turbines. And what happened Berkshire Hathaway sued him. So I mean, it's just like, how can you make this up? So my piece is going to be in the Wall Street Journal is on this, this report and, and

these issues that we're talking about. It's it's red versus blue urban versus rural and big business versus small town America. Yeah, well, it's really ironic that that came full circle to Charlie Munger at Berkshire. I like that quote, though. Yeah, show me the incentives and I'll show you the outcome. Okay, well, the incentives is for Berkshire Hathaway to make more in tax incentives, which is what

Warren Buffett said, right? The only reason you build wind turbines is for the tax credits. They want more tax credits. So they're suing Madison County, Iowa. Well, okay, what is what about the bridges of madison county you really don't care you want the bridges of madison county covered with wind turbines really i mean it just it's it's it's you know follow the money follow the money it's the oldest rule it's the oldest axiom in politics and it does highlight the disdain that a lot of these coastal and corporate elites have for middle america just oh yeah we'll dump it in the middle of the country and you know what like maybe they'll end up killing themselves

from the sounds of the turbine that drives them crazy like that's probably how they think because that's another thing too that people don't take into consideration again these knockoff externalities that second order effects that aren't uh visible in terms of kilowatt hours produced and uh the price and of of the electricity is all right you're dropping these in communities and like literally the physical structure and the sound it makes is having a psychological effect on the people around it um and i and i would say marty and i've followed this now for more than a decade. And the scandal, and it is a scandal, is how the wind energy business has expanded despite the massive amounts of noise pollution that their systems are creating.

And I've interviewed dozens of people over the last decade who've had wind turbines built near their homes and the stress that they suffer, the physical stress that they suffer due to the low frequency noise and the audible noise from these wind turbines is real and yet the industry has skated around it and it denied it and denied it and denied it and it's a scandal and you know my response they say oh it's not an issue you know oh it's only a it sounds of a refrigerator it's a small small hum you know these people are making it up these people are making it up really well then why are people in new zealand australia why are people in in germany in france in in taiwan in nova scotia in wisconsin and why are people all over the world complaining in almost the

exact same ways and why would they do it if they know by complaining about it that their home that they own or have worked for all their lives is going to be devalued because they they're disclosing that their home has been poisoned with noise pollution i mean are they that dumb i mean you know so the cynicism of this and the and the outright refusal of the main biggest media outlets in this country to even cover it is just absolutely disgusting to me and it's it's given me purpose i mean you know and for that i'm thankful but it's just the the the the the deception the outright lying about this i just it's something that um i i i it gives me purpose and it gives and it gets me worked up but these these issues need to be discussed and they need to be in in

the public sphere and they are large largely ignored well hopefully i don't know how big this podcast is i do know how big it is it's not that big but hopefully we can get this discussion permeating throughout throughout more avenues it's not going to be discussed in the mainstream it's got to be us which is uh both scary but also promising the fact that you're seeing all this independent journalism you with power hungry here at great american mining our podcast tales from the crypt, all the documentaries, books that you put out, hope, I think it's making a difference. I found you. And I'm well,

and that's heartening to me. And you know, I, one of my, well, I'd say I'd say one of my journalistic heroes is Jessica Mitford, who was a famous muckraker. She was born British born socialite and was one of the famous or infamous Mitford sisters. And she wrote a great book, an expose of the funeral industry called the american way of death in the 1970s if i remember anyways her great line was she well two great lines she said uh objective or no what is it objectivity i always have an objective and then she said the one that i really like the other one came to mind just as i was

mentioning her name she said uh uh you may not be able to change the world but at least you can embarrass the guilty hey there that makes sense to me i might not be able to change the world but at least i can embarrass the guilty and so you know yeah i'm just going to try and do my part that's all i can do and you know and i'm going to do it and with as much gusto and and hopefully as much fun as i can bring to it thank you for doing it and i do agree we need to ridicule these people because they're stupid um and they're doing bad things to humanity and they should be made fun of And I think that's when it helps break down some barriers for people who may be afraid to approach these subjects, a little humor, not in a mean way, but in a, hey, this is funny because it doesn't make any sense type of way. Yeah, the nanny, nanny, nanny, poo-poo kind of.

Robert, I would encourage you to look further into Bitcoin because I think particularly fixing the money part, A lot of the incentive, perverse incentives stem from the fact that we fucked up the money and we messed the money. It's so easy to print money that you can go subsidize all these projects without any consequences. You can just keep printing trillion dollar infrastructure plans, just give it out to people and keep making the incentive structure as perverse as possible. If we fix the money, we can fix that incentive structure and hopefully cooler heads and sanity will prevail at the end of the day.

at least that's what bitcoin or i'll speak for myself at least that's what i'm hoping bitcoin success will will bring back to the world your son tell him to be wary tell him to uh watch out with the ether mining ether is gonna gonna transition to a whole new consensus mechanism i'm sure he's aware of this but he's not gonna be able to mine ether at some point potentially in the next year we'll be able to stake he's he's he's all about it he's he's follows it very closely so yeah i'm proud of him he's very ingenious and hard working and so he's he's uh he's on it so yeah but let's do it again marty i look forward to it these are you know these issues are important and i appreciate the passion you're bringing to them as well because

you know you have to speak truth to power and you you know these are issues that are matter to ordinary americans and what we've seen in the climate debate i think is that it's been dominated by frankly a class of elites and that they're not looking out for the best interests of rural Americans or low and middle income Americans. And, and I may flatter myself, but I that's what I hope to do is just bring to the table these issues that point out what's happening if we follow through on some of these, frankly, not just misguided, but deeply dangerous policies. Well, Robert, I think you're doing an incredible job. Thank you for doing what you do. Thank you for joining me on this episode of gamcast. And yeah, I can't. I can't wait to do

it again. All right. Well, let's do it again, Marty. I appreciate it. All right. Have a great day. Okay. Thanks. You too.