Build Fast or Fall Behind with Michael Webber

title: Build Fast or Fall Behind with Michael Webber
author: Energy Capital Podcast
contenttype: podcast
publication: Energy Capital Podcast
published: 2026-03-11T10:09:00+00:00
sourceurl: https://api.substack.com/feed/podcast/190544147/e6745383e97dcb8b56ada991a59618db.mp3

word_count: 10186

Hey everyone and welcome to the energy capital podcast. I am really excited to have Dr. Michael Weber on to talk about, well, energy. He's an energy guy and I'm really excited to talk to him about energy and Texas energy and all kinds of things. Most of you probably know Michael, but just really quickly, he's got a PhD from mechanical engineering from Stanford, he's worked at Rand, various clean energy incubators. He'd been in kind of the energy space for a long time, but really the kind of the main areas right now that Michael's at, he's a double chaired professor at the University of Texas, which is a pretty rare thing. The Sid Richardson Chair at the LBJ School of Public Affairs and the Cockrole Family Chair number 16 in mechanical engineering. He's a former CTO at Energy Impact Partners, which is a big climate, clean tech venture fund, and a former chief science and technology officer at Inji, one of the world's largest energy companies, as well as a founding partner of IDISMIS, upon which he and I worked together. So he really sits at the intersection of engineering and policy and commercialization. Welcome to Energy Capital Podcast. Oh, thanks for having me, very excited to be part of the conversation today after being a long time listener. Awesome. And so you really are a kind of like a rare three world energy person, I mean, you've kind of like gone across the spectrum from engineering to policy and, you know, commercialization. One of the things that this is actually a reminder me of, and I'm going to go off script almost immediately, is kind of like the three body problem. You're familiar with the three body problem in classical mechanics, is that it's basically impossible to predict the motions of three things that are gravitationally connected to each other at the same time. Do you feel this way in your three worlds, an engineering policy in the technical space, like, is it similar? That is a great orbital mechanics for our friends. I did my undergraduate degree in aerospace engineering at UT. I took a class on orbital mechanics from one of the famous professors, Zebehe, professors Zebehe taught that. And we could solve the two body problem. You cannot solve the three body problem. You can only approximate it. So you're exactly right. Right. And it does feel like this tension between engineering and policy and market certain commercialization are in tension, where you can't completely solve the problem with all three. Although in orbital mechanics, you do get alignment if one's solved, where the planets align or the different celestial bodies align. In my observation, at least in the United States, things work best when policies and markets in innovation are all aligned. If they're all pointed the same direction, amazing things can happen very quickly. And so I like this sort of idea. Like, you can't solve it perfectly. You can kind of get close. You can do some numerical approximation, but sometimes you have alignment. And if you have alignment, then great things happen. So give an example of that from 2005 to 7 timeframe, the energy policy act of 2005. In other things, we're happening where the policies were calling for more domestic production. We need more natural gas in particular. The markets were calling for more natural gas production. Natural gas prices were quite high, say 2003 in other years. So the markets were calling for more natural gas. The policies were calling for more natural gas. In the innovation and engineering was also unlocking a lot of new natural gas, which was a combination of technologies of hydraulic, fracturing, and horizontal drilling. So we had engineering policy and markets all aligned. The world flipped. The whole shale revolution of producing so much oil and gas in such a sudden turnaround flipped geopolitics on its head, where we went from LNG in order to exports. We went from feeling at the mercy of foreign countries for their oil and gas production to feeling a little more confident on the energy stage globally. That was a remarkable instance where things aligned and we don't have that very often in the industry frequently. For the decades before that, we had groups calling for less production because of our mental concerns. We have policies that inhibited production and the markets and innovation work there. So we often have misalignment, though when you have alignment, it goes quickly. And that's another cool thing from celestial mechanics to maybe that we should write an article that says, what celestial mechanics teaches us about the energy three body problem? That'd be a great op-it. Let's write that essay. Like we're getting work done immediately, even when we're doing a podcast, it's great. Yes. Our to-do list just grew though. If folks are interested in three body problem, there's actually a Netflix series on it right now based on the series of books that have been written. Yeah. And I think I should watch it. I hear it's violent, though. I don't know. So we'll have to check it out. I read the first book. I think there's three of them, which of course there would be three, a trilogy on the three body problem. But it is on my list of things to watch. So that was interesting that we immediately got into a situation where we're talking about fracking just a minute ago. If you had gone just a few years before that, no one saw that coming or very few people saw that coming. I didn't exercise once where I went back and looked at all of the annual energy outlooks from the EIA in like early 2000s, and you know, natural gas was on the decline. We were going to be importing natural gas like LNG imports were like big chunks of charts. Cold consumption was going up. And then boom, this thing happened, hydraulic fracturing that no one was really thinking about, or people didn't see, weren't predicting, and it completely flipped the script, as you say. Turned around import terminals, and you know, turned them into export terminals, and you know, made this one of the energy powerhouses of today. So the era of say like 2001 to 2007, it was a uniquely bad era when it comes to EIA forecasting. And I'm not trying to pick on them because what they do is very hard, and they're better out of than anybody, yet they were wrong. Right. They were wrong on top level energy consumption, like they thought energy consumption was going to increase forever in the United States. So the EIA forecast for particularly bad, they thought top level energy consumption was going to grow forever. They failed to anticipate the effects of efficiency, for example, with the light bulbs and cars and other things. They missed it on the fuels. They missed it on whether it's import or export or whether it's domestic producer, like a lot of mistakes were made. And that's something we should all keep in mind and use as a source of humility. It's easy to be wrong about the future of energy when making predictions, so just keep that in mind. The first I heard of shale in the potentially hydraulic fracturing was in 2007 from a named Robert Heffner, who is a very famous sort of producer of gas, especially, but all the gas in Oklahoma. He and I were at a conference together. He gave a presentation of the shale resource in the United States and how much energy is there. And I was like, I'd never heard of this. So I heard about it in 2007, then Teibun Pickens, another Oklahoma came to Texas UT and gave a lecture around 2008 and he talked about it. So shale really hit my radar in 2007, 2008. It had been on policy makers' radars in 2005. The Energy Policy Act 2005 had some clarity around how hydraulic fracturing would be regulated. And they clarified that it would be the states would regulate it to the federal government. People called that the Halliburton loophole, Dick Cheney could put that into place. Dick Cheney, from all I guess, since you knew very well. So it was certainly on the radar of industry, it was on the radar policy makers, and a few wildcatters. But it wasn't on my radar until I heard them talk about it. And then so to my eye, the shale revolution was really born from me around 2007, 2008. It really took off around then. And it went from basically a zero dollar industry in 2008 to $150 billion a year in 2019. So from zero to 150 billion in 11 years, and then if you dig in the history, people like George Mitchell and Mitchell Energy or Devin Energy have been trying it since the 70s or the 80s. If you go back in time, there was dynamite fracturing in the 1860s and 1880s, it wasn't hydraulic fracturing. So we've been knocking on the door of it quite some time, but it didn't really hit the popular conscience, even for energy analysts like me, until 2007 or so. So there were a few people who saw it, there were a few people who were evangelical about it, sort of preaching that it was going to change things, and then it ended up being correct. But I feel like a lot of people missed it. I feel like Exxon Mobile missed it, like some really big companies didn't have a play. So they had to do an acquisition, they had to buy their way into it at the top of the market. So a lot of us missed it. But there were a few people who were singing it from the rooftops, and that's something for us to keep in mind, that the conventional wisdom could be wrong. But there's always someone who's got some idea the future, they might be right, but there's also a lot of people who are wrong who are singing it from the rooftops, so we can't believe all of them. But hydraulic fractures really changed things quickly. Didn't in the 70s, we also tried to do it with nuclear, did we try to do nuclear bombs? Yeah. So there was a project to put nuclear downhole in the 70s to do fracturing. Yeah. There were a lot of downhole nuclear tests for weapons purposes, but also for energy production. In the 70s, there were a couple oil crises, we're like, it was striver, then I turned coal into liquid, let's try gasification, let's put nuclear downholes, yeah, that goes, whether it's a nuclear aircraft that made people nervous. So there was like all sorts of things we tried in the 70s. Some were goofy, some ended up leading to the development of hydraulic fracturing, which would be very beneficial in solar and wind, got their start in the 70s, didn't really make sense for decades, but we fiddled around with it back then as well. Yeah, though absolutely. So now that we've talked about how hard it is to get things right, I kind of want to put you on the spot a little bit because you're a bit famous or infamous, I don't know, depending on how you want to say it, for making predictions about the future, but I appreciate you willing to talk about the predictions after you've made them because like most people make them and then try to forget them, right? That's right. And I write them down and I publish them and so everyone can hold me accountable, which is, I think silly, anyway, here we are, yeah, well, here we are. So about a year ago, roughly, you made some predictions about kind of where US energy would be in 2029 or so, kind of at the end of the Trump administration, let's just take like intermediate step on these and just kind of see how they're going. And if you would change them or if you're still bullish in the direction that you're going, one of the first ones you said is you said you think that national energy consumption will decrease, which is kind of counter in terms of we have a lot of, we're talking about data centers and like for occasion, like building out all this infrastructure. So what do you mean by that? And do you still stand by that? So the context was, it was April 19th, 2025. So we're at the end of three months of the Trump administration. So by the end of three months, we had a pretty clear view of what the Trump administration's energy priorities would be. Not really many surprises. They were the things that he said he would do in the campaign trail. And so trying to flash, okay, at the end of the Trump administration, which is four years, so three years and nine months remaining when I wrote this on LinkedIn, what will the energy situation be in the United States on January 20th, 2029? And I think I stand by all of my predictions, I haven't really changed my mind, but we can go through them. But the first one is you're putting out, and I've even tagged this or pinned it or bookmarked it or whatever on LinkedIn. So people can come back and make fun of me when I'm wrong. Is that national energy consumption will decrease? And primarily, that is my haptip towards energy efficiency, that efficiency will continue to be deployed. And that despite population growth and economic growth, we will use less energy as a nation four years from now, then today, well, I guess three years from now, at this point, because of the new devices we are implementing. And the ones that come to mind when you're like electric cooktops, electric heat pumps, electric cars, more efficient industry, we already have better light bulbs, so if we already done what we can there, we have more ways to do things that accommodate even the low growth of data centers because we have so many savings elsewhere. If we just take cars in the electrification of cars, and despite Trump and despite policies that are not friendly to electric cars, electric cars are growing in their adoption, might not be fully electric, it might be electrified drive trains, like hybridized drive trains, other things, that will reduce the amount of gasoline and diesel we need to move about, plus we will work from home and zoom in other things. So we have a variety of ways that our gasoline consumption will drop, it actually beats in 2018, we'll continue to drop. And the electricity we use in place, either for working remotely or for electric cars, is all more efficient, we use less energy. And so we can get a couple of percentage points of savings just on light duty vehicle transportation, and then add this through the devices, we'll get some savings. In fact, I think efficiency is the unsung hero of the last 25 years. In the last 25 years in the United States, our energy consumption has been level or dropped, but our population is going 20% and the economy is doubled or triple depending on whether you look at nominal or real terms. So I think we'll continue in population economic or but energy consumption will drop, primarily because of this efficiency play. I say by that, I think that's going to be the trend that continues. I think it'll be resilient even in terms of the rollback of the endangerment finding. Yes, so the endangerment is very big news. So endangerment finding has been rolled back, we'll also have a lot of lawsuits that will go to the Supreme Court and those with Supreme Court says, sure, but I think at this point, the endangerment finding really drives EPA decisions, for example, but it doesn't drive all the market decisions and the market decisions are going to go by what's easier to keep us to build, and that's not going to be a coal plant. And coal plants, even if they don't have endangerment finding for CO2, do have to deal with ash and nox and sox, the precursors to acid rain, and they have to deal with mercury and the mercury rolls are from the busher administrations. Those rolls aren't going away. And so no one's going to build new coal and then we have all this gas and wind and solar and batteries that are cheaper than coal, so we'll shut that down and even cheaper than gas in some cases. And then if we look beyond the Trump administration to the rise of geothermal nuclear. So I think endangerment finding is kind of sand in the gear. I'm going to keep using that phrase probably in our property, sand in the gears. It slows down the progress, but it doesn't stop the progress. We're still going to move towards cleaner stuff. Yeah, I mean, I think for a lot of our industry to be competitive in the global market, if we're going to be at trade parity with other countries, they're not going to want to buy stuff that they can't use that's less efficient, right? I mean, maybe the Trump administration doesn't care about CO2, but customers in Europe do. And so people making products here for your PN market are Japanese market, you name the market that cares about CO2. There are several. They sell to clean up the supply chain to satisfy that market. I think those fundamentals haven't shifted. In fact, in Europe, now I've got the CBAM, the carbon border adjustment mechanism. So there are even policies in place that will push for cleaning things up, even if those policies aren't domestic out at DC. Yeah. You touched a bit on oil consumption, gasoline consumption. One of the predictions you made is gasoline exports will increase. So where are we going to send that gasoline? Yeah. So there's a phenomenon going on right now for the oil and gas world where half the product is slated out of a barrel. The barrel goes of crude and the refinery comes out roughly half gasoline. The other half is diesel, jet fuel, waxes and tires and things like that. Yeah. The demand for diesel and jet fuel is increasing, but the demand for gasoline domestically is dropping. It has been dropping. We're in year eight of the drop of gasoline. And so that means gasoline will be cheap. So gasoline is pretty cheap in the United States right now, and that will slow down the dumps should have let you vehicles, but not stop the adoption of electric vehicles. So I expect we'll dump cheap gasoline on the world markets to other customers around the world. For their light duty transportation and the older cars or other purposes. So I'm thinking to sub-Saharan Africa or the markets around the world that would be happy to have the gasoline but export it. Now that might be a uniquely American problem because the refineries in Europe already produce more diesel and jet fuel than gasoline. So they're less at risk for this problem, but the American refineries have been tuned for a hundred years to produce more gasoline. So I think we'll have to find other markets for it, we still need our diesel and jet fuel. So the refineries we keep running and they'll have this excess gasoline, which will lower prices. We'll find some on for it potentially. Yeah. I get similar for natural gas, like you predict natural gas production will increase and LNG exports will increase. I get similar things for that, like finding customers and in there are a lot of customers for natural gas globally. There might be more customers from natural gas than gasoline. The way I think about it, I feel like we're entering a natural gas era, we had a wood era, coal era, we're in an oil era, natural gas might have overtaken oil in terms of consumption in the United States last year, if not last year probably this year. We just are producing so much gas, we consume so much gas, but we produce more than we consume. So we have gas that we can export to customers in Europe or Asia who are happy to have it. And for us that's good because they might use that gas to displace coal or they might use that gas to be electricity to displace some gasoline in those countries and that would be good for the environment. I think natural gas as a nation we're leaning in in the Trump administration, people are very angry about the Biden administration, they're frankly natural gas, production and consumption grew a lot under the Biden administration as well and under the first Trump administration and under the Obama administration. So natural gas has been on the rise, has been ascended for a while, and I'll see that stopping anytime soon, maybe in a few decades, but it looks like the next five or 15 years natural gas, that's a really good run ahead of it. Yeah, absolutely. I think we've been talking about this in more of kind of a US context, like what do you think this means for the traditional energy production in Texas and how all these like new exports and other things like that, like what does that mean for Texas here? Texas has a good export capacity, like we actually all have the ports, we have the LNG refrigeration trains, we have a lot of pipes that can move the oil and gas from West Texas or the Hainesville or wherever to the ports. We can export to other states, the United States, not just other countries, so Texas is in all positions. But if you look at the oil and gas policies under Trump administration, they're actually not so good for oil and gas, in particular, they're bad for domestic oil drillers. So oil drilling is down 20% or something in Texas. Gas drilling is up 10% nationally, and so drilling overall is down, say 10% nationally. The rise has been in gas, the decline in oil, and that gas drilling is mostly in like Pennsylvania. The gas we produce in Texas is mostly, at least in West Texas, mostly associated gas. It is the gas that is associated with oil production. So as long as we're drilling for oil, we will have a lot of gas in Texas from the West. But if we drill less for oil or produce less oil, we will eventually have less natural gas in West Texas, the Hainesville areas in East Texas probably will still keep producing gas in demand. And so there's already been some warning signs that the CapEx, or the capital expenditures, the drilling investments, new sites for drilling in West Texas are down. So far, oil production has not dropped because they're more efficient or more productive or well, but you can anticipate that in 2026 oil production in West Texas might drop, which means gas production in West Texas might drop, which mean prices might go up, that might be good for natural gas sellers, might be tough for consumers, if natural gas prices go up, it might make our exports less desirable on the global scene, depending on what price Australia or Russia are charging their Qatar or you name it country. We'll begin a global marketplace and American gas is always undercut on price, other providers, but that might be harder for gas prices to go up because our oil production goes out. That gets a very tingled mess, as I guess I'm going to say. And Texas benefits and loses simultaneously from all these maneuvers. As we've been talking about energy writ large and focusing it on electricity, I mean, one of the policy decisions we've made in Texas is to electrify those oil and gas operations out in West Texas. Right? And so if we run into these other kinds of pressures they've been talking about, at the same time we're getting them cheaper energy to get the energy out of the ground, does this a wash? Do you think it's net positive, net negative? One of the hidden heroes of the oil and gas success in Texas, certainly a lot of innovation in the oil and gas sector, hydraulic fracturing or zone drilling, but electrification of the oil patch, I believe that the West Texas production in the Permian is the most electrified oil field in the world at any significant scale. In having access to cheap electricity has improved productivity, it's cleaned up production by reducing the venting or flaring of gases in some cases. It's also improved the boost with these downhole electric submersible pumps. So electrification oil, I guess, helps keep it competitive while also making it more environmentally friendly because it reduced emissions. And so I think if we keep expanding the grid and keep installing transmission lines, which I know you've talked about and thought about, that will keep electricity cheaper for all of gas. That is a competitive advantage that we get to have in Texas that not every oil and gas patch in America or around the world, I think that's kind of cool. And then if you look at Governor Abbott really pushing to expand the grid, he's really men hard on nuclear, especially, but he seems friendly to geothermal and other technologies. We're going to have a pretty diverse mix of electricity. We're going to build a lot of power plants that meet, in my mind, despite data center load growth, we might still have low prices, and that'll be really good for all, I guess. So oil and gas benefits from my big cheap reliable grid, just like we all do. Yeah. At the same time, you know, your bullish on wind, your bullish on solar, geothermal, nuclear stay roughly about the same. I think some of this transmission we've been talking about are going to benefit particularly those first two. Your bullish on geothermal. Talk about that. Most on geothermal. I don't think a whole lot of new geothermal come online before January 20, 29, but there'll be some. Okay. I think we're entering in a few years the geothermal decade. We've been in a solar and battery decade before that we were in a wind decade in wind growth has slowed down a lot. Solar growth doesn't really get slowed down again soon, but geothermal is about to take off for a couple reasons. The technology's gotten better, especially for drilling, the technology's for finding the pockets of heat has gotten better, we start up like Zanscar and others. The demand for the power is there. We have a new customer class, these data center companies that have a lot of money and really want round clock performance, but they want clean and they want renewable. So geothermal meets a lot of those geothermal doesn't really compete with wind solar. It competes with nuclear or compete with natural gas with carbon capture. Yeah. And so geothermal looks pretty good. It's against gas prices and it's a good sort of speed to power choice because probably you can get geothermal online faster than nuclear. So geothermal looks good. It also seems to be a favorite in a bipartisan way. Democrats and liberals and environmentalists like it because it's clean and renewable and sustainable. I think Republicans like it because it leverages drilling technologies. It's domestic. So it's got unique bipartisanship among maybe sightening along with nuclear has bipartisan support. And I think that means you'll get good alignment on policies at the state, local and federal levels. And so there's some port for the Trump administration. I think Trump doesn't love it as much as he loves nuclear, but he seems to like it. He's not beating it up on that for sure. So geothermal is like a winner. And one of the things that geothermal can leverage is all the advances in drilling technology that have happened in the last 20 years. It will also make advances, but it can leverage other people's investments, namely the only gas industry's investments in drilling technology. The geothermal industry can ride that cost curve down. And then they have this stable around the clock performance and customers who have the cash to pay for it. So geothermal looks really good. It's limited in location. It tends to be Nevada, Utah, California, Hawaii, place where volcanoes or tectonic activity. There are a few pockets in Texas where you can do it. What I like from the Texas perspective as a Texas Patriot is, even if we're not producing a lot of geothermal in Texas, the companies are tall or know how might be here. So there's a real good Texas angle for this, even if it's for a site in Utah. Yeah. That makes a lot of sense. I was thinking about its concept of talking about multiple different constituencies. They probably won't want to use this as a tagline, but carbon-free drilling or something like that or low carbon drilling. You know, it's like got both buzzwords for both sides of this thing. Yes. It's one of the few options that satisfies most different people's priorities, which is really great. I think that's one reason why it'll be a winner. Yeah. It reminds me of the Green Tea Party, which is a coalition of Sierra Club and the Tea Party in Georgia back in like the early 2000s. They got together to force the utility to let them put solar on their roof, and it was the libertarians were like, you won't tell me what I won't do on my own property. Thank you very much. And Sierra Club was, we like solar. In the VIN diagram of things, I was like the one thing that they kind of agreed on, but it was powerful enough to force Southern companies to let them do it, which is not an easy thing to do. It worked. I worked, right? Yeah. And that's a sign, and I think solar still has that, by the way. So solar will continue to grow because it satisfies some libertarian instinct as well as some environmental instinct. And so you look at the solutions that get there, they'll do okay. Nuclear doesn't satisfy a libertarian instinct so much. Nuclear is very clean. It is very reliable. It needs a very strong hand from government notice back to succeed. So you have a different kind of intervention in the markets to really give nuclear boost, but some of the other options too. Yeah. Nuclear feels like it's gone through a bit of a renaissance too in terms of like its acceptance. There's a lot of new environmentalist movements that are very pro-nuclear, just like, okay, we got to build something. We can't just say no to building everything like the new environmental movement has to be about building something, and it doesn't seem like it's getting beat up on as much as it used to. I feel like this is my third nuclear renaissance I've watched in the last 20 years. Everyone feels different. This one feels different. I feel stickier for that reason, as you said, which is the environmental movement has been sort of looking at nuclear with a wary eye for a long time because of the concern for nuclear waste or meltdowns or public risk. Some security folks have looked at nuclear with a wary eye because of the connections with wetlands proliferation. Yeah. But I think the security establishments are more concerned about other things in the energy system. Yeah. And the environmentalist had come around to the idea like, okay, nuclear still needs a lot of water. There's a nuclear waste issue, but there's technologies for that. It's got a really clean profile. It doesn't have the error missions that are toxic. It doesn't have the greenhouse gases. So the environmental movement's kind of come around on nuclear after a hesitant relationship for many decades. But then there's a cultural movement where you have students at universities like, why don't we build nuclear? So you see nuclear engineers students from Texas A&M on ESPN College game day holding them a sign like, we love nuclear. And this moment with viral and you have like beauty pageant winner, his nuclear engineering working for constellations, she's talking about nuclear, a Brazilian fashion model. So we have like fashion models and beauty pageant winners and engineering students on college game day, all seeing the same thing, which is nuclear as a part of the future. And so there is a youthful cultural force that's very different than the people who have been promoting nuclear for many decades. It's just in the way older engineers who work out of you told you or something. So it's very different profile. So nuclear looks good. And then what that sort of manifests to self as is local state and federal policies is for a certainly Trump administration supportive, but as I mentioned, governor, I have a supportive. But even cities like city of Austin, doesn't seem to pose are awesome. Actually has a six of nuclear reactor. I think you started to get this political and policy alignment, which is really interesting. Oh, totally. So thank you for letting us go through your historical predictions, predictions from last year about still into the future. And so I'm hoping you can come on and we can do this multiple times and you can either be proved right over and over again. I got switching gears a little bit. So some folks may know that like every year we have the annual Weber Energy Group symposium, which is at the University of Texas, I'm in your research group and it's kind of a celebration of all the research that we do in the group. But one of the highlights of that event is you kind of give state of the energy or whatever talk, like a big wide ranging talk about where we've been, where we are, maybe where we're going in terms of energy. And to keep with the theme of this podcast, one of the big themes of that talk you gave was energy is going through a three part transition, right? So could you tell me what is that three part transition that you think energy is going through? Yeah. And now we're our third tritlam, our third free part transition, I would say. So to my eye, it looks like three dimensions of the energy transition we're going through right now. One is expanding the energy system, or particularly expanding the energy access. We have universal energy access in the United States, but we don't around the world. There's a billion or more people who don't have access to electricity, a billion or more people don't have access to other modern fuels, like gasoline or propane or something. They're using solid fuels like wood or caldaunder straw or something like that. And then we have a couple of billion people who don't have access to pipe treated water or sanitation. So the sole access problem to clean resources or modern energy forms. And part of the transition is to expand energy access so that those people will have access to the energy that you and I already have access to. So that's part number one, expanding energy access globally. And as cleaning up the energy system, those of us who have access, have a lot of emissions or land or water impacts, must reduce our impacts. And the energy system generally gets cleaner per unit of energy and cleaner per person, but we have more people. So it gets dirtier as a whole. It feels like we're hitting a turning point where the energy system will get cleaner on absolute terms, even as we have population economically gross. We have to expand energy access as part one, but to clean up the energy system as part two, part three is operate in a warmer world. A lot of our energy system was built, for example, in the power sector, 40 or 50 years ago in the United States. The pipelines often built long before that or the transmission lines built long before that. So we have a multi-decade or century old system in many parts of the United States that is designed for a different population, different strain on the system from the population, but also different weather. So as the climate warms on average, that means we'll have milder winters warmer summers, some more heat waves and droughts in the summers, but also perhaps more frequent and intense polar portacies or these cold snaps, which we just had a couple weeks ago in Texas and five years ago with winter storm Yuri, and we had all sorts of winter storms. So we have warmer weather, which will strain the system if you design it for different weather. And the heat waves are typical problem in Texas, but the heat waves are hotter and lasting longer together. The heat dome in 2023, where it was summer for like four and a half months or something, or heat waves in early May and heat waves and that was that six months. I can't even do my math. The heat waves in November and it was so hot for so long, that's a real strain on the system, but it is accompanied by droughts. You don't have the cooling water you need for the power plants. We also have more people doing irrigation, which means more electric pumps for water, which means that the man goes up and all of the loss we have all these things, that's a real problem. So expanding energy access, decarbonizing, operating a warming world, that's what we have to do with the entire system. And a lot of these assets are kind of old. The newer assets will be easier to design for, but we have to work with what we got and a lot of what we got is new. Yeah. No totally. I think sometimes, you know, for some people now, the term energy transition is kind of a triggering phrase. We have any other ideas for other things? Yeah. I've got a list of phrases we know longer. We used to call energy revolution, unacceptable for a while. We talked about energy evolution. That's no longer acceptable. For the last few years, we talked about energy transition. That's also unacceptable. So we're now like a short list of acceptable phrases, meaning like non-triggering for different constituencies, things like energy innovation, or energy expansion, or energy addition, or energy abundance, or energy dominance. And you hear like with the Trump administration's energy dominance, Secretary of Energy Chris Wright talks all about energy addition, and energy abundance. And I like the innovation, I don't really like the word dominant. That sounds like you're beating someone up, but these are the kind of the phrases that work with the Trump administration that are less triggering. But within, say, the concept of energy, innovation, or energy expansion, or energy addition, we have a lot of opportunity to add a lot of cool things to the grid, or to the energy system, better cleaner and higher performing, and more affordable, and more reliable. Totally. And so, yeah, maybe we're beating it up on the term energy transition. I mean, as it's become, I guess, embody what it means. Is it getting anything wrong right now, like in 2026, what does the phrase energy transition get wrong? I feel like it transition is still happening. I feel like for the most part, the fundamental trends are still occurring. We have to label it something different. Energy dominance, I think, means exporting a lot of energy to the world and dominating the geopolitics of the markets, which actually we started around 21 or 22. Like, a few years ago, we became the biggest exporter of electronic gas. For example, the biggest producer of hydrocarbons in the world. So, we were kind of already been energy dominant for years, but we didn't call it that. The Biden administration didn't talk about energy dominance, they talked about energy transition. The Trump administration talks about energy dominance, but not transition, but not a whole lot has changed for the most part. Some of the rhetoric has changed, some of the policies has changed, the market preferences haven't changed a whole lot to my eye. No one in the markets is really clamoring to build into coal plant, and the people own coal plants are actually looking to shut them down, but they're often forced to keep them online, even if they're expensive, because of policy fiat. So, I think the word transition is too triggering. We have to drop it, but what the markets are doing hasn't changed a whole lot. The biggest change of the Trump administration has been sort of the all out war on offshore wind. So, the President has had the biggest impact, he's revoked the permits, he tried to cancel five projects that are either operating or close to operating, all have led to lawsuits, he's lost every one of those lawsuits, all five of those wind farms will operate or are operational, but it's going to be hard to build a new offshore wind farm. So that's one distinct change from the dominance, and I was like, well, if you really believe an energy expansion will expand everything, so that doesn't make sense to me. But he's got his preferred fuels and the fuels he doesn't like. Onshore wind and onshore solar will also suffer, but not as bad as off-road wind. And onshore solar is too competitive to keep out of the markets, just are calling for it. Yeah. Winds actually started to slow down in 2021 in the Biden administration, primarily because it's supply profile as a matter of low profile, and the lines were getting congested. So, the new power plants with solar are a good complement to that wind. I think we just had different phrases, but the trends are basically the same. But even so, you said like the output, maybe not matching our low profile, but if we add a bunch of data centers that have not exactly flat, but flat-ish low profiles, I think that that script could flip back. I mean, data centers want round the clock load, that's not wind, that's not solar, but wind plus solar plus a little bit of battery looks pretty flat in most places because this supply profile is a solar wind or so out of phase, that you might get there, data centers are a key thing, they're rich, they're in a hurry, and they have high demands of reliability. And so, that's why they could pay for geothermal and nuclear, which is exciting, but because they're in a hurry, they can't wait till 2029 or 2035. And if you're in a hurry, it's going to be wind solar and batteries. So, I think there's room for everybody. I'd say we need fast simplicity of wind solar and batteries and it's cleanliness, we need around the clock, performance, renewable source like geothermal, we need around the clock, performance of large-scale dense options. There's room for all of them, but they arrive on different timelines. If you're in a hurry, you'll start to say, we'll pay for everything, we just want everything we can get. Yeah, do you think we're given that we need everything? Like are we in an era, are we entering an era of energy scarcity or energy abundance? That's a good question. So, if you look at the backlogs for like, say natural gas turbines at Siemens and GE, there's a rush on gas turbines, primarily for data centers behind the meter, say they might want natural gas combined cycle power plants, which are really good for around the clock performance. For grid reliability reasons, there's a rush for the era derivative fast ramping gas turbines, which you don't use around the clock, but you use on the hours or days, you don't have to say, wind or solar or other options. So there's a rush on the fast ramping gas turbines, there's a rush on natural gas to mind cycle, but there are backlogs at all the different manufacturers. Yeah. And so, you could say, oh, there's a backlog, there's going to be scarcity. But fundamentally, we have plenty of energy available in the grid, we don't have plenty of power. The scarcity is only a few hours of a few days of the year, and if we get to operate flexibly, down the data centers or water treatment plants or steel smelters or whatever, we actually are fine. We're having all this argument, it seems like over a few hours of a few days of the year, the rest of the year we have access capacity. And I think what people will find in our finding again and again is that the fastest way to get our power is through flexibility, where you can ramp your load up and down. You and I don't worry about that so much at our houses with our light switches in each back, and you know, heating and cooling, if you're a crypto miner, especially, but if you're some other big industrial load, you get totally dialed down your load at peak times. And that flexibility is going to look really cheap and fast to bring online, and we're already seeing that. So I think that avoid scarcity. So I don't think we're heading towards a scare situation, frankly. The scarcity will solve itself with flexibility. Now, you noted in that presentation, you know, peak load is a challenge, but the, you know, the grid is utilized on average less than 50% of the time or something like that. So yeah, with these new loads that are causing a lot of these backlogs at Siemens and GE and others are these new loads, data centers in particular, are they a problem or an opportunity? And I think they're an opportunity. I know they're painted because there's a fear they'll drive up electric rates. There's a concern about the land impacts and the water use. People worry that it'll make electricity more expensive. If we do it the right way in data centers and other loads are flexible, then all that new investment with the grid actually lower the cost for everybody should improve the capital utilization. So we have a multi-trillion dollar power sector. We use it less than 50% of the time, but if we had a lot of new electric users to the grid and they're able to schedule their load, like charge management for a lot of vehicles or flexibility at peak times with data centers and crypto miners, then we'll get greater than 50% capital utilization of until 60 or 70 or 80%. That means we're using the same asset base, the same trillion dollars, but for more kilowatt hours. And so if we're dividing the same trillions over more kilowatt hours, that's the lower cost per kilowatt hour. I think that's where we'll end up a few years from now. The intervening fears will be very painful because it takes a little while to get there. So we're going to feel great to go up, rates have already gone up, rates are on the way up. But I think as we get through this crush, we'll get to higher performance, lower emissions, lower cost. That's where I think we'll end up. And I think we'll get there within three to five years. I don't think we'll get there in one to three years. So it's going to be pretty, particularly painful in incumbents for the next few years. In fact, we already have politicians paying the price, losing offense because rates have gone up. So I think that will continue for another couple of years. You talk about we're moving into a transmission scarce environment. Is that part of that short term these issues or is that more of a long term? It's all happening right now. So these transitions, I talked about the tri-lima now with energy access expansion, decarbonization in our regular world. But we've always had change. These changes happen in a condensed period of like 10 to 20 years. And we've had prior energy transitions that were very rapid. We call that the industrial revolution or the second industrial revolution or the age or the silicon age and now maybe the next energy transition. So there is a timing situation right now. And one thing we've been at for almost, we've generally had an excess of transmission capacity. Those days are over. Because you can build new load, a new data center, a new factory, a gigafactory, whatever it is. You can build a new solar wind farm and say a couple of years, a new gas plant, maybe in five years, new geothermal, nuclear, or like four to ten years. The transmission historically is six years in Texas, say, about 20 years elsewhere. So the time it takes to build new load is faster than the time it takes to build new supply is faster than it takes to build new transmission. And we've gotten away with this tiny mismatch because of excess capacity in the grid. Yeah. But we're running out of excess capacity in the grid. We're running out of excess capacity at the power plants. So we're going to have to manage everything out better. And I think we're going to expand transmission. It's just hard to expand it as quickly as the other things. But if you ramp up on flexibility, then we can solve all that, I think. Yeah. There's other parts of that too. I think you mentioned that we've got a gas turbine backlog that's masking a gas pipeline backlog. Like it's not just one part. It's all parts of the system that are going to have to like grow quickly, right? Everybody's in a hurry for everything. We're all waiting two to five years for transformers and three to five years for turbines. And then, by the way, a gas pipeline hookup might take four to six years as well. So there's just a lot to ask to happen. And I think a lot of that is a consequence of we haven't really grown to the power sector for 20 years. Yeah. We've gone from a level mode where you don't grow to also grow very quickly. So we're taking a very large, lumbering, continental size industry, causing it to grow, five to 10% a year. Yeah. I saw for it. And then they know how to do it, the energy power sector, we've kind of forgotten how to do it. We've lost our muscle memory. So we got to work ground quickly, get steel on the ground quickly, regulatory approvals quickly, get your investment mind up quickly, anyone's really done this since the 80s. So it's been a while since we've had to learn how to do that. So if there's something you could get every policy maker out there to understand about how the energy sector is changing different, how fast it needs to go, like, what's one or two things you wish every policy maker would know about this current state of the energy sector? I think there are two things on my mind. One is we're going through a CAPEX wave, a CAPO expenditures wave that is at really rare levels exceeds what we did in the 50s with interstate highways, that exceeds what we did in 2000 with rural broadband, that exceeds what we did with the railroads and canals in the late 1800s, that exceeds wartime footing in some cases. So it's really a dramatic level of investment. So this isn't some kind of ephemeral fly by night thing. There might be a bubble, but the numbers are read all like those big investments. So just appreciate the scale and the situation and the opportunity. And secondly, I think we've been too fussy about our culture war of hating particular forms of energy or preferring certain forms of energy. I think if we just let people build stuff and make it easier to get our permitting, for the most part, we'll build the right thing. So it won't be perfect. We have to be willing to tolerate some imperfection. But I say the moment is calling for us to build quickly, let's go quickly, or also we won't meet the moment. If we build quickly, meet the moment, we'll mostly meet it the right way. We'll have a few things we build that we regret without a doubt. But I'd rather have a few things that we regret that we built than not build enough and then regret having missed out at one of the most important economic and national security opportunities in history. So I guess I'd rather on the side of build too many things we regret than build too few capable days that we're really going to need in the future. Yeah. Otherwise, we're not going to meet the moment. Those are the two things I say is a real sort of interesting historical time. Let's build. Let's catch up. I think it also exceeds a moon landing, but like we landed a few times, we haven't been back. Maybe we're going back. I don't know. We'll see what Elon's talking about in this day and age. He's talking about Mars too, so who knows? Right. So a lot of things going on and mostly private capital for that. So that markets evolve as well. Okay. There's a part of the podcast where we've flipped the script. You're now interviewing me. I'm on your podcast. What do you want to ask me? I want to ask you. I love this. Okay. So if you were to talk to 18-year-olds graduating from high school, yeah, and they're confident what they should do with their future for studies, their career, whatever, would you recommend they go into energy? Totally. Of course, I'm going to be biased, but I definitely would recommend folks go into energy. I mean, that doesn't necessarily mean that you're out on an oil rig or being in utility space. There's lots of companies that are in this space, but in particular, I think I would focus people on electricity. And again, I'm going to be double biased here. That's what I study. That's what I do. I've heard people say the phrase peak oil. I've heard people say peak gas. I've never heard anyone say peak electricity like a real straight face. Peak electron. Yeah, that's interesting. Yeah, that's right. I've never heard that. That's right. Yeah. So I don't think anyone said it because I don't think anyone's ever thinking that we're going to use less electricity over time. I mean, energy, perhaps, but I think the electrification part of that continues to grow. So I think energy is going to be, or electricity, in particular, is going to be in a growth phase. Particularly right now, it's in a massive growth phase with AI and data centers and all these other types of things. But yeah, no, I think it's a great place to be in. I think some of this stuff AI is not going to be able to take over at least in the next employment cycle way for whatever we'll see where we eventually get to. I know we're all kind of struggling with this, but yeah, I think energy is a great place to be in electricity in particular. So maybe it's because you're biased, but you also did your own thinking and arrived at that conclusion. Yeah. Electricity is a exciting place to be. And that's why you're excited. Okay. Can I ask you one more related follow-on question? Yeah. Let's say those 18-year-olds are trying to decide to go to college or not, if they don't go to college, should they just start working or get like a technical trader or some other thing? So what would you tell that 18-year-old? Yeah. I mean, I think if you're not going to go to college, I mean, right now, sticking with the theme, like, electrician is a great career to be in. I've heard rumors of folks like working on data centers and now you're working multiple over times and other types of things, but making the equivalent of like $3,400,000 per year salaries right now, a hard work, a lot of work, but it's probably hard to automate that at least at this point. I mean, if you're going to college, I mean, I think one of the things that has changed that I would say, I mean, the advice I always give to people is study the hardest thing you like because it opens the most doors. If you like history and you like physics, equally, then study physics, minor, and history or something like that, just like study the hardest thing that you like. And that's been the traditional advice that I've given to most that are going to college. Right now, I would focus on critical thinking. We've pushed hard into STEM. We've pushed hard into computer science and coding and a lot of this other kind of stuff. A lot of these things that are rules based and AI is pretty good at that kind of thing. AI is really good at things that have definite rules and even getting into law and like other types of things. But if you can still have the critical thinking to know how to guide these systems that we're starting to use more, I think that's still going to be valuable. I mean, it's going to evolve over time. But yeah, so study the hardest thing that you like, but don't skip liberal arts, the humanities, other types of things that make you actually have to think because some of the other types of technical thinking are getting co-opted by some of these machines, but kind of the bigger questions. I mean, I think we're still going to need to know how to handle to guide the systems wherever they're going to go. I would say get a trade, pipe fitting, welding, electrician work, something, and study philosophy or humanities. So you could do both, by the way, you don't have to do this, but I think humanities prepares us better to deal with the complexities of society that hasn't presented this all yet with rise of AI and everything else. But the trades will call for a lot of work and lucrative careers and will be displaced by robotics later than coders who will be displaced by AI today or have even displaced. So I think I agree with you. There's some combination there, perhaps. Yeah. And I still think things like engineering are extremely valuable in terms of just understanding systems and how they work and being able to like look at something and say, oh, that's a perpetual motion machine. That kind of intuition, I think, is super valuable. Intuition is, I think, is going to be lacking going into the future as we offload some of our cognitive processing. That's a good point. Yeah. And you only get that intuition from grappling with the problem and thinking that through. Yeah. Absolutely. Michael Weber, thank you for being on the Energy Capital Podcast. Thanks so much. I have a great conversation as always. Thanks for listening to the Energy Capital Podcast. If today's conversation helped you make better sense of how the energy system actually works, share the episode with a colleague and hit follow on your podcast app. You can find us on Apple Podcast, Spotify, and all the usual platforms. For deeper analysis and context each week, subscribe to the Texas Energy Empower at texasenergympower.com. That's where we'll find every episode, every article, and our latest updates. We're also on LinkedIn, X, and YouTube, where we share clips, insights, and ongoing commentary on energy policy, markets, and the grid. Before we go, a quick note. Did you use Express on this podcast our my own and do not represent the official positions of the University of Texas, Ideas Miss, Austin Energy, or Columbia University? A big thanks to Nate P.D. our producer. I'm Joshua Rhodes. Thanks for listening. And we'll see you next time.