Latest / Bloomberg Intelligence / LNG CEO: Asia, Europe Demand Propel U.S. Gas Projects

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LNG CEO: Asia, Europe Demand Propel U.S. Gas Projects · Bloomberg Intelligence

• 0:02
  Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you
• 0:05
  Speaker 1: along with my co host Lisa Brahmas. Each day we
• 0:07
  Speaker 1: bring you the most noteworthy and useful interviews for you
• 0:10
  Speaker 1: and your money, whether at the grocery store or the
• 0:12
  Speaker 1: trading floor. Find a Bloomberg Penl podcast on Apple podcast
• 0:16
  Speaker 1: or wherever you listen to podcasts, as well as at
• 0:18
  Speaker 1: Bloomberg dot com. We are broadcasting live from the Bloomberg
• 0:22
  Speaker 1: New Energy Finance Summit in New York City. One big
• 0:25
  Speaker 1: question is about natural gas, especially as it increasingly replaces
• 0:29
  Speaker 1: coal fueled power plants, and we are so lucky to
• 0:33
  Speaker 1: have with us. Greg vs He is chief executive officer
• 0:35
  Speaker 1: and managing director of llen G Limited based in Houston,
• 0:39
  Speaker 1: joining us here New York. Greg, thank you so much
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  Speaker 1: for being here. Let's just start with the idea of
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  Speaker 1: llen G, a major natural gas supplier working on a
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  Speaker 1: whole bunch of projects right now, trying to build out
• 0:51
  Speaker 1: the infrastructure at a time when natural gas prices have
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  Speaker 1: kind of declined. Give us a sense of the layout
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  Speaker 1: of land from your perspective. Sure will, and thanks Lisa all.
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  Speaker 1: It's great to be here. Uh, you know, it's it's
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  Speaker 1: interesting across the globe how competitive And I never thought
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  Speaker 1: in thirty nine years of the U S Energy industry
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  Speaker 1: that I'd be saying how competitive US gas is for export.
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  Speaker 1: And what people across the globe are seeing is this
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  Speaker 1: huge resource that we continue to make more and more of.
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  Speaker 1: It's at a price at Henry Hub, which is a
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  Speaker 1: stable price. Now I'm used to huge volatility in this price.
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  Speaker 1: They look out and see it very stable, and it's
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  Speaker 1: a very favorable political and business environment. So it's very
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  Speaker 1: much pointing to the US to be a place to come.
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  Speaker 1: All right, who's coming here? Is it? China? Uh? If
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  Speaker 1: you look out, the big the big growth areas are
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  Speaker 1: going to be Europe and China. Um, I shouldn't say
• 1:42
  Speaker 1: Europe and China, Europe and Asia. Obviously China the biggest
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  Speaker 1: component of Asia. But yes, Europe and China the two
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  Speaker 1: that are really hitting it hardest right now. Europe. It's interesting.
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  Speaker 1: We had a kind of a industry meeting in Berlin
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  Speaker 1: a couple of weeks back, and the German Minister of
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  Speaker 1: Energy made the point of saying, we used to say
• 2:01
  Speaker 1: we're all about being electrified, now we're saying natural gas
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  Speaker 1: is the best next step for us to take. That's
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  Speaker 1: a huge change for them, and they're gearing up. They're
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  Speaker 1: looking at re gas facilities. The whole region is putting
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  Speaker 1: in re gas facilities. They're very focused on l and
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  Speaker 1: G and Gulf Coast. L en G is going US.
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  Speaker 1: Gulf Coast ellency is going to be the most affordable
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  Speaker 1: and competitive for them. So great, let's let's talk about
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  Speaker 1: the Gulf Coast. Is the infrastructure there and the Gulf
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  Speaker 1: Coast right now to really take advantage of this robust
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  Speaker 1: demand you've been talking about. It really is more so
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  Speaker 1: in Louisiana. I think that you know because of where
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  Speaker 1: Henry Hub is, it was originally designed to be the
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  Speaker 1: place where all the gas comes on shore. Well that
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  Speaker 1: model is completely reversed now all the gas is up
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  Speaker 1: north and it's coming to the south, but the hub
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  Speaker 1: is still that indicate that everyone will look at, and
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  Speaker 1: all the end of the infrastructure has been built around that.
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  Speaker 1: So there's pipes that were granted, they were intended to
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  Speaker 1: take gas from south to north. Now they're all turning
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  Speaker 1: around and bringing gas from north to south. But it
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  Speaker 1: can bring huge amounts of that gas at competitive it's
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  Speaker 1: to the Gulf coast, and you have a very friendly
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  Speaker 1: environment in southwest Louisiana where we are. They are really excited.
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  Speaker 1: They want to be like leading the US and leading
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  Speaker 1: the world in lergy exports, and they are ready for
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  Speaker 1: all that infrastructure development. How quickly does the US give
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  Speaker 1: out permits for you to do these projects. It's a
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  Speaker 1: great discussion, Lisa Um. It's not a quick process, but
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  Speaker 1: it wasn't designed to be because it's the first and
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  Speaker 1: foremost to make sure it's the right thing for the
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  Speaker 1: country to do and to do it safely. As the
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  Speaker 1: process gotten faster, it has gotten faster. Yes, I think
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  Speaker 1: what we experienced and you're we're fully permitted. We've been
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  Speaker 1: through all the FIRC in the deal. We were ready
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  Speaker 1: to go with our Magnolia project. That was probably a
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  Speaker 1: two and a half year, three year exercise. It's a
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  Speaker 1: little faster than that, but not materially, and I think
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  Speaker 1: as as business people and citizens, we should be a
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  Speaker 1: little bit okay with that that it's a good process
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  Speaker 1: that works. How competitive is US natural gas on the
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  Speaker 1: world market and what needs to change maybe to make
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  Speaker 1: it more competitive? You know, it's been very competitive of
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  Speaker 1: the market that we all looked at was Europe, and
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  Speaker 1: about a year and a half ago it turned where
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  Speaker 1: it was much more competitive. It was very competitive versus
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  Speaker 1: europe gas. And you've had a little downturn this winner
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  Speaker 1: both in Asia and Europe, so it's kind of borderline, um,
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  Speaker 1: but it's still very competitive on the world stage. What
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  Speaker 1: you have to look for, you know, what we call
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  Speaker 1: freight on free on board, where it's picked up at
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  Speaker 1: the tailgate of a US plan, is a very competitive price.
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  Speaker 1: Then it's how far do you have to pay transportation
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  Speaker 1: to travel? All right? So we are at the New
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  Speaker 1: Energy Finance Summit and natural gas is definitely a growing
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  Speaker 1: source of energy, but it's not a new energy and
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  Speaker 1: I'm just wondering, especially as it competes with renewable sources
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  Speaker 1: of energy, how does it compete environmentally? So it's it's
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  Speaker 1: a great question. I think there's two things. It's very
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  Speaker 1: necessary for renewables because you have the intermittency of renewables.
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  Speaker 1: Natural gas is a quick startup and can do that.
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  Speaker 1: I think the US has shown the world a great
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  Speaker 1: example that natural gas is an excellent bridge fuel. And
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  Speaker 1: how long that bridge fuel is we don't know, but
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  Speaker 1: the market brought permissions down in the US by switching
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  Speaker 1: from coal to natural gas. The rest of the world
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  Speaker 1: has seen that and they want to replicate that. So
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  Speaker 1: still that just real quickly that where's the price of
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  Speaker 1: gas and what kind of how do you view it
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  Speaker 1: right now? Well, it's interesting at the price of us
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  Speaker 1: Henry hub Is is probably two eighty to three dollars um.
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  Speaker 1: When I started in the industry in it was two dollars,
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  Speaker 1: So that that tells you that's a very competitive price.
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  Speaker 1: I think it's interesting that the volatility that we see
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  Speaker 1: over the Winner hasn't been there this year. In fact,
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  Speaker 1: the price got to its lowest point on If you
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  Speaker 1: remember that coldest day of the year when people in
• 5:36
  Speaker 1: Chicago couldn't go out of their apartments, it's it's the
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  Speaker 1: day of the price was the lowest is Winner? Okay? Interesting?
• 5:42
  Speaker 1: Greg vc, CEO and Managing director of l n G
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  Speaker 1: A Limited based in Houston, Texas, but joining us here
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  Speaker 1: at the Bloomberg dew Energy Finance Conference in New York.
• 6:04
  Speaker 1: We are broadcasting live from the Bloomberg New Energy Finance
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  Speaker 1: Summit at the Grand Height Hotel in Midtown, Manhattan. And
• 6:11
  Speaker 1: when I think New energy. I think solar, I think wind.
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  Speaker 1: I think there's big wind farms onshore, offshore generating electricity.
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  Speaker 1: So that's why I am very excited for our next guest,
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  Speaker 1: John Lavelle. John is the president and chief executive officer
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  Speaker 1: of Offshore Wind for Ge Renewable Energy. He joins us
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  Speaker 1: here in New York. John, Welcome. Thanks. You know, when
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  Speaker 1: I think about some of these big offshore wind farms,
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  Speaker 1: you know, it's just you know, you could really think
• 6:36
  Speaker 1: about the scale of this business. So if you could
• 6:38
  Speaker 1: just start us off in this size up what the
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  Speaker 1: global wind business is and kind of the growth story though. Yeah,
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  Speaker 1: if you think about it today, there's about seventy gigawatts
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  Speaker 1: of offshore wind installed globally, uh, and conservative estimates would
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  Speaker 1: have that go into ninety gigawatts by That would be
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  Speaker 1: comparable to the entire installed base of the Okay for example. Uh.
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  Speaker 1: But I think beyond that, China, Taiwan, create Asia, the
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  Speaker 1: northeast of the US are coming strong, and I think
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  Speaker 1: that number could grow by another fifty percent, So I
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  Speaker 1: think you could end up with fifty gig watts globally. Okay,
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  Speaker 1: So demand and use of wind power definitely increasing, and
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  Speaker 1: there has been a consolidation as far as market share
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  Speaker 1: goes with General Electric invest as some of the other
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  Speaker 1: big turbine producers. Profitability, however, has been a challenge. Can
• 7:34
  Speaker 1: you talk a little bit about why UH profitability fell
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  Speaker 1: at the end of last year and kind of what
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  Speaker 1: we'll what we'll pick it back up going forward. Well,
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  Speaker 1: you know, from an offshore wind perspective, you know, we're
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  Speaker 1: just getting in the game, you know, so Gees not
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  Speaker 1: UH has not historically been in offshore wind. We got
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  Speaker 1: into offshore wind when we acquired Alstom. So our game
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  Speaker 1: today is to invest, to generate, to develop the technology
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  Speaker 1: to compete in the future. So we're we've invested, we're
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  Speaker 1: investing now two developed the Holly at X, which is
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  Speaker 1: the largest offshore wind turbine in the world by far um.
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  Speaker 1: It'll stand nearly nine feet off the ocean floor, the
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  Speaker 1: blades will be well over a football field long each
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  Speaker 1: and it will drive the economics low for our customers
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  Speaker 1: and if we can help our customers compete and grow,
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  Speaker 1: we'll be successful to in the future. So our our
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  Speaker 1: our point is we're gonna we're investing and offshore because
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  Speaker 1: we see the market growing. We see that GE can
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  Speaker 1: add value with technology development. We know how to do that.
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  Speaker 1: We have a global scale. We've been in the energy
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  Speaker 1: industry for a hundred years. Of all the electricity that's
• 8:48
  Speaker 1: produced comes from some form of G technology. So I
• 8:52
  Speaker 1: think we can help the industry grow by playing So
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  Speaker 1: how competitive is wind energy relative to maybe traditional energy
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  Speaker 1: sources and maybe even Yeah, it's a great question because
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  Speaker 1: you you know, in the end, you have to compete
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  Speaker 1: right against everything and uh and as you as we
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  Speaker 1: look at these technologies. Uh, in all the business I've
• 9:13
  Speaker 1: run and worked in every facet of the energy industry,
• 9:16
  Speaker 1: so I've watched the costs come down with volume. So
• 9:18
  Speaker 1: it's a it's a volume curve as cost comes out.
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  Speaker 1: More volume you have, the more productive you have, the
• 9:24
  Speaker 1: more scale you have, the more your costs will compete.
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  Speaker 1: We're seeing bids now in the UK. UK auctions will
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  Speaker 1: come up in June. You'll see those prices. We've seen
• 9:32
  Speaker 1: the auctions in Germany. Uh, you saw the auction in Massachusetts.
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  Speaker 1: You've got offshore wind now competing with with on shore
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  Speaker 1: levels that have had a you know, almost two decades
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  Speaker 1: of a head start, right, So you see the costs
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  Speaker 1: come down. You want to get to the point where
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  Speaker 1: it's unsubsidized so that you can compete without subsidies, with
• 9:54
  Speaker 1: zero subsidies. UH. And what helps you get there. It's scale,
• 10:00
  Speaker 1: it's size, so that you get you you minimize your infrastructure.
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  Speaker 1: Every we we had a six megawatt machine, now we
• 10:09
  Speaker 1: go to a twelve. That means you have to build
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  Speaker 1: half the pedestals out in the ocean, you have to
• 10:14
  Speaker 1: build half the cabling. It's easier to service. So as
• 10:18
  Speaker 1: you take cost out and you get volume, volume and
• 10:22
  Speaker 1: size and standardization will help the industry. So John Leavel,
• 10:27
  Speaker 1: president and CEO of for the offshore wind unit of
• 10:30
  Speaker 1: GE Renewable Energy with us here right now, I'm wondering,
• 10:34
  Speaker 1: how about storage. That's been one of the challenges, certainly
• 10:37
  Speaker 1: for solar. What about winds? Yeah, a great question. In
• 10:41
  Speaker 1: our renewable energy portfolio. UH. In g E, we have
• 10:46
  Speaker 1: on shore and offshore wind. We've got hydro. We got
• 10:49
  Speaker 1: a hydro business. We have an LM Blade Manufacturing, we
• 10:53
  Speaker 1: acquired them in two thousand seventeen, the largest maker of blades.
• 10:58
  Speaker 1: We have a grid business. G IS Grid all the
• 11:01
  Speaker 1: transmission and distribution and very, very important to have that
• 11:04
  Speaker 1: grid business marry up with the wind because you have
• 11:08
  Speaker 1: to be able to stabilize the grid as you convert
• 11:11
  Speaker 1: from baselow nuclear and coal to cyclical renewables. And then
• 11:16
  Speaker 1: you get the storage. Should we also have a hybrid
• 11:18
  Speaker 1: and storage business that we've just put in place, And
• 11:22
  Speaker 1: so I think, uh, the value of us being able
• 11:25
  Speaker 1: to bring green electrons if you will, two people that
• 11:28
  Speaker 1: want it, not just households, but two companies that have said, well,
• 11:32
  Speaker 1: by green having a storage so you can store the
• 11:37
  Speaker 1: the wind energy. How I just think I'm through battery story,
• 11:41
  Speaker 1: through battery battery storage. Yeah. Yeah. You can decide where
• 11:45
  Speaker 1: you want to put it. Where you want to store it.
• 11:46
  Speaker 1: Do you want to store it at the site. Do
• 11:48
  Speaker 1: you want to store at a local distribution, uh network
• 11:51
  Speaker 1: out in your neighborhood? You know? Where do you store it? So? What?
• 11:53
  Speaker 1: So what are some of the constraints, Like I don't
• 11:55
  Speaker 1: want a big wind thing in my backyard. Maybe? How
• 11:58
  Speaker 1: about for offshore? What are the constraints whoever owns who
• 12:01
  Speaker 1: has the rights to that water? Say, I don't want
• 12:04
  Speaker 1: to decide where to put these things. Keeping it simple, Paul,
• 12:09
  Speaker 1: I think normally it's the government the land, all right,
• 12:12
  Speaker 1: and we'll allocate the land through some process, whether it's
• 12:16
  Speaker 1: in the US, Taiwan, Japan, China, uh, you know, UK, whatever,
• 12:21
  Speaker 1: they allocate the land. Uh. Then in all the cases
• 12:25
  Speaker 1: they have to go through some permit process typical to
• 12:28
  Speaker 1: a zoning board in the local town. You'll say this
• 12:31
  Speaker 1: is gonna be built. You have so many so much
• 12:33
  Speaker 1: time to raise your questions or your concerns that have
• 12:37
  Speaker 1: to come. And it's a lot. It's the birds, right,
• 12:41
  Speaker 1: So there's concerned for the birds. Uh, there's concerned for
• 12:44
  Speaker 1: the site in the visual impact it may have for
• 12:47
  Speaker 1: local residents. So putting these things deeper and deeper into
• 12:51
  Speaker 1: the ocean, it becomes uh um, you know a question
• 12:57
  Speaker 1: for that helps right farther you're out. But then gott
• 13:00
  Speaker 1: to bring the power back. You have to bring the
• 13:02
  Speaker 1: power back. So some of the some of the projects
• 13:04
  Speaker 1: like are going on in the UK now are so
• 13:06
  Speaker 1: far off they're gonna use high voltage DC interesting to
• 13:09
  Speaker 1: bring them back. John Lavell, thank you so much for
• 13:11
  Speaker 1: being with you. John Lavell, President, chief executive Officer of
• 13:16
  Speaker 1: the Offshore Wind Unit at GE Renewable Energy, joining us
• 13:19
  Speaker 1: here at the Bloomberg New Energy Finance Conference. We're a
• 13:38
  Speaker 1: broadcasting life from the Bloomberg New Energy Finance Summit at
• 13:42
  Speaker 1: the Grand Hyatt Hotel in Niptown, Manhattan. Right now, we're
• 13:46
  Speaker 1: gonna turn our attention to the America power markets. A
• 13:49
  Speaker 1: lot of change going on there as renewable sources compete
• 13:52
  Speaker 1: with some of the more traditional sources of energy in
• 13:55
  Speaker 1: this country. To help us walk through that story, as
• 13:57
  Speaker 1: Paul Browning, Paul is the President chief executive officer of
• 14:01
  Speaker 1: Mitsubichi Hitachi Power Systems America's Paul, welcome U to the show. Paul,
• 14:07
  Speaker 1: give us a sense a kind of where we are
• 14:09
  Speaker 1: in the US in terms of power generation to what
• 14:11
  Speaker 1: extent are renewables really becoming a competitive player in the marketplace? Well, thanks,
• 14:16
  Speaker 1: Paul and Lisa. Um. Yeah, so there's really a lot
• 14:19
  Speaker 1: of change happening in the power sector right now. We
• 14:22
  Speaker 1: are seeing the cost of electricity from renewables and battery
• 14:25
  Speaker 1: storage dropping rapidly. At the same time, we're actually also
• 14:29
  Speaker 1: seeing the cost of electricity from natural gas power generation
• 14:32
  Speaker 1: dropping rapidly as well. Um, And so there's a there's
• 14:36
  Speaker 1: a you know, a real uh competitive dynamic. They're happening
• 14:40
  Speaker 1: between renewables with storage and natural gas competitive endemic or
• 14:44
  Speaker 1: race to the bottom, either one go on. And of
• 14:47
  Speaker 1: course it depends. You know, the cost of renewables. You
• 14:49
  Speaker 1: know that the cost of solar here in New York
• 14:51
  Speaker 1: City is very different than in the desert in Arizona. Um,
• 14:54
  Speaker 1: the cost of natural gas and different parts of the
• 14:57
  Speaker 1: country is different. So you know a lot at the times.
• 14:59
  Speaker 1: The answer to you know, which one of these is
• 15:01
  Speaker 1: going to be less expensive is you know, it depends.
• 15:04
  Speaker 1: So but in this race, a lot of governments have
• 15:08
  Speaker 1: subsidized the renewables to try to reduce the carbon emissions.
• 15:12
  Speaker 1: How much is that necessary to get the renewable market
• 15:16
  Speaker 1: up to speed to truly be competitive in a free
• 15:19
  Speaker 1: market type of environment. You know right now renewable plus
• 15:23
  Speaker 1: battery storage needs a subsidy in order to compete with
• 15:26
  Speaker 1: natural gas in almost every market. Significant subsidy, well investment
• 15:32
  Speaker 1: tax credit that exists today is the kind of subsidy
• 15:35
  Speaker 1: it needs to be competitive in in in some markets.
• 15:38
  Speaker 1: Um and so uh and and you know the thing
• 15:40
  Speaker 1: that I always talk to people about is is um.
• 15:43
  Speaker 1: You know, natural gas is not standing still. Um. You know,
• 15:46
  Speaker 1: our turbans are less expensive today on a dollar per
• 15:49
  Speaker 1: killer lot basis than they were in the past. They're
• 15:51
  Speaker 1: more freel efficient, and the price of natural gases dropping
• 15:53
  Speaker 1: due to new drilling technologies, so, you know, while and
• 15:57
  Speaker 1: the good thing for consumers is they're getting lower carbon,
• 16:00
  Speaker 1: lower cost electricity, you know, as we all compete with
• 16:03
  Speaker 1: one another in a you know, in a marketplace where
• 16:06
  Speaker 1: competition and technology is determining who wins. So it is
• 16:10
  Speaker 1: big coal in terms of the context of energy or electricity.
• 16:15
  Speaker 1: Is big coal just done? Is its day over well
• 16:17
  Speaker 1: in the United States right now, it's just it's cheaper
• 16:20
  Speaker 1: to produce electricity from natural gas and renewables than it
• 16:23
  Speaker 1: is from coal, And of course it's also much more
• 16:25
  Speaker 1: carbon efficient, and that combination of cost and carbon efficiency
• 16:29
  Speaker 1: is just very, very difficult to beat. So I really
• 16:31
  Speaker 1: don't see any new coal power plants being built. And
• 16:34
  Speaker 1: as a matter of fact, what we're seeing is a
• 16:35
  Speaker 1: lot of you know, coal that was built in the
• 16:38
  Speaker 1: sixties and seventies is now being retired and it's being
• 16:40
  Speaker 1: replaced by a combination of natural gas and renewables. So
• 16:43
  Speaker 1: talking about bringing down the cost, how does artificial intelligence
• 16:47
  Speaker 1: play into this, especially as it takes over the human
• 16:50
  Speaker 1: component of running some of these plants. Yeah, so, actually,
• 16:53
  Speaker 1: you know AI, what we're really not there's only about
• 16:56
  Speaker 1: thirty five people who work in a combined cycle natural
• 16:59
  Speaker 1: gas power plant, and actually less than that in a
• 17:01
  Speaker 1: renewable power plant. We're actually not going after the people
• 17:04
  Speaker 1: with our AI. What we're really going after our lost
• 17:07
  Speaker 1: production and unplanned downtime, which are very big expenses for
• 17:12
  Speaker 1: our customers. So we're trying to eliminate unplanned maintenance because
• 17:16
  Speaker 1: the AI is able to identify a problem before it
• 17:19
  Speaker 1: becomes a problem, and we turn unplanned maintenance into planned
• 17:23
  Speaker 1: maintenance and and do it in a very cost effective way.
• 17:26
  Speaker 1: Paul Sweeney, this is such an interesting point because people
• 17:29
  Speaker 1: look at artificial intelligence is the bogeyman at the boogeyman
• 17:32
  Speaker 1: for why people are losing their jobs. But this is
• 17:34
  Speaker 1: an example of how to increase productivity and profitability without
• 17:38
  Speaker 1: actually cutting jobs. Yeah, exactly. It's interesting. But just technology
• 17:42
  Speaker 1: in general, is how much is that impacting the traditional
• 17:44
  Speaker 1: power business in the in the U S. When I
• 17:46
  Speaker 1: think of these power plants, I think these monster things. Again.
• 17:49
  Speaker 1: I live New Jersey, so I see these monster plants
• 17:51
  Speaker 1: all over the place. We have lots of power plants
• 17:53
  Speaker 1: and lots of plants and new but house technology impacting
• 17:56
  Speaker 1: just that creation electricity. Yeah. So as as I said
• 18:00
  Speaker 1: before that you know that the biggest impact is the
• 18:02
  Speaker 1: cost of renewables, storage and natural gas power generation are
• 18:06
  Speaker 1: all dropping dramatically and so and those happen to be
• 18:10
  Speaker 1: the most carbon efficient choices that we have right now.
• 18:13
  Speaker 1: You know that combination of natural gas and renewables is
• 18:15
  Speaker 1: about eight lower CEO two emissions than a retiring coal
• 18:20
  Speaker 1: fired power plant. So we're actually in the US people
• 18:23
  Speaker 1: a lot of people don't realize this. In the US
• 18:25
  Speaker 1: power sector, carbon emissions are down thirty three since two
• 18:29
  Speaker 1: thousand five. UM. We sponsor Carnegie Mellon University that they
• 18:32
  Speaker 1: have a website that the Switch from It's it's the
• 18:36
  Speaker 1: switch from coal to a combination of gas and renewals
• 18:39
  Speaker 1: and you can go to www dot Emissions index dot
• 18:42
  Speaker 1: org and once a quarter we update that number. One word,
• 18:46
  Speaker 1: Paul Browning, if you've been in this market for decades,
• 18:49
  Speaker 1: if you had to invest in one renewable energy source,
• 18:52
  Speaker 1: what would it be. I just started a renewable power
• 18:54
  Speaker 1: technology company yesterday there announced it's it's a it's a
• 19:00
  Speaker 1: distributed power generation for PV solar and battery storage. There
• 19:04
  Speaker 1: you go, solar and battery storage. Paul Browning, thank you
• 19:07
  Speaker 1: so much for being with us. Paul Browning as President,
• 19:10
  Speaker 1: chief executive officer of Mitsubishi Hitachi Power Systems America's joining
• 19:14
  Speaker 1: us here at the Bloomberg New Energy Finance Conference. So
• 19:18
  Speaker 1: interesting to sort of see the price dynamic as everybody
• 19:21
  Speaker 1: tries to bring costs down, including gas, so it makes
• 19:24
  Speaker 1: it a kind of shifting competitive landscape. Some big news
• 19:40
  Speaker 1: in the healthcare industry four the United States President Trump's administration,
• 19:43
  Speaker 1: the Department of Justice coming out and now trying to
• 19:47
  Speaker 1: claim that the entirety of the Obamacare Act is unconstitutional.
• 19:52
  Speaker 1: Joining us now is Max Nisson, biotech, fharma and healthcare
• 19:55
  Speaker 1: columnist for Bloomberg Opinion. Joining us from our Bloomberg Interactive
• 19:59
  Speaker 1: Broker Studios. Max, what exactly just happened and how big
• 20:02
  Speaker 1: of a reversal is it by the do o J.
• 20:05
  Speaker 1: It's a pretty substantial one. So the d o J
• 20:07
  Speaker 1: had had previously supported the lawsuit in partial form, and
• 20:11
  Speaker 1: that itself was pretty unusual. You know, the d o
• 20:14
  Speaker 1: J generally tends to defend the law of the land
• 20:17
  Speaker 1: as opposed to um, you know, supporting case Concer. But
• 20:20
  Speaker 1: they had only they had elected to keep big chunks
• 20:23
  Speaker 1: of the A C A. So this move would basically
• 20:26
  Speaker 1: means that they're supporting a dramatically more disruptive potential result
• 20:32
  Speaker 1: in which really the entire and the entirety of the
• 20:34
  Speaker 1: A C A would go away. That's everything from the
• 20:36
  Speaker 1: Medicaid expansion to the changes to the individual market protections
• 20:40
  Speaker 1: for people with pre existing conditions, and you know, little
• 20:43
  Speaker 1: things like calorie counts on menus and the FDAs ability
• 20:46
  Speaker 1: to approved by similars. It would be just a giant mess. So, Max,
• 20:50
  Speaker 1: what do you think changed for the Trump administration to
• 20:53
  Speaker 1: take this more aggressi approach here? I'm actually still trying
• 20:56
  Speaker 1: to puzzle that out because from a purely kind of
• 20:59
  Speaker 1: political and policy standpoint, it's it's pretty puzzling. You know,
• 21:04
  Speaker 1: the ten mid terms kind of told us that Americans
• 21:07
  Speaker 1: are gravitating towards liking the A C A more than
• 21:11
  Speaker 1: they did over the initial years of his implementation, and um,
• 21:15
  Speaker 1: you know, the move to to kind of more aggressively
• 21:17
  Speaker 1: try to take it away, uh not only kind of
• 21:19
  Speaker 1: goes against what the lesson that the administras should probably
• 21:22
  Speaker 1: should have learned. But against even its own budget, which
• 21:25
  Speaker 1: you know still you know, has massive cuts to Medicaid
• 21:29
  Speaker 1: and UH repeals parts of the a c A. But
• 21:31
  Speaker 1: doesn't you know, do what this case does and just
• 21:33
  Speaker 1: kind of you know, potentially rip away coverage from from
• 21:36
  Speaker 1: tens of millions of Americans overnight. Yeah, I'm wondering from
• 21:40
  Speaker 1: a market perspective, are their companies that you would expect
• 21:43
  Speaker 1: would either benefit or UH lose out should the Department
• 21:47
  Speaker 1: of Justice be successful in this attempt. So the you know,
• 21:51
  Speaker 1: insures that are focused on on medicaid and the individual
• 21:55
  Speaker 1: market would definitely suffer. You know, they would get some
• 21:58
  Speaker 1: some market power back in the form of reduced regulation,
• 22:01
  Speaker 1: but you know, the millions of customers they lose with
• 22:04
  Speaker 1: would outweigh that, especially in the near term. And then
• 22:06
  Speaker 1: hospitals in the sense that you know, when people don't
• 22:09
  Speaker 1: have courbadge that they don't get care. But you know,
• 22:11
  Speaker 1: it's still pretty unlikely that this case will will go
• 22:15
  Speaker 1: through or you know, actually end up invalidating the a
• 22:18
  Speaker 1: c A because it's based on pretty shaky legal ground
• 22:21
  Speaker 1: of the idea that you know, negating the penalty of
• 22:24
  Speaker 1: the individual mandate somehow means that the entirety of the
• 22:27
  Speaker 1: rest of the law when should be invalid when Congress
• 22:29
  Speaker 1: is pretty explicitly given an indication that it doesn't think
• 22:32
  Speaker 1: that's going to be the case, because when it had
• 22:34
  Speaker 1: the opportunity to do exactly that, it elected not to. So, Max,
• 22:38
  Speaker 1: what do you think the next steps are here? Um?
• 22:40
  Speaker 1: You know, I think we'll see kind of an aggressive
• 22:45
  Speaker 1: pushback from Democrats who are actually, you know, outloading a
• 22:48
  Speaker 1: set of bills that would actually strengthen the A c
• 22:51
  Speaker 1: A today in in pretty pretty good timing for them.
• 22:55
  Speaker 1: It just gives them a kind of a new avenue
• 22:57
  Speaker 1: of attack and and a really immediate one. Well, but
• 23:00
  Speaker 1: Maxie said of liberal opinion, this is exactly where I
• 23:03
  Speaker 1: wanted to go with you, this whole political deliberation. What
• 23:05
  Speaker 1: politically was President Trump trying to go for, perhaps the
• 23:08
  Speaker 1: Department of Justice, given the fact that in the midtell
• 23:11
  Speaker 1: elections it did seem like voters did want the Obamacare,
• 23:15
  Speaker 1: they did want some sort of healthcare base for people
• 23:19
  Speaker 1: who might work you know, gigs or things where they
• 23:21
  Speaker 1: don't get healthcare. Yeah, I that's what makes this so inexplicable,
• 23:26
  Speaker 1: and beyond just what you saw in the mid terms,
• 23:28
  Speaker 1: you also have a bunch of states and and pretty
• 23:31
  Speaker 1: republican states electing to adopt the medicaid expansion that we
• 23:36
  Speaker 1: had through through referendums. Now even Kansas is considering it,
• 23:40
  Speaker 1: So that the move to kind of try to uproot
• 23:42
  Speaker 1: this law entirely is really just at the moment at
• 23:46
  Speaker 1: least inexplicable, maybe a triumph of of ideology over over
• 23:51
  Speaker 1: smart strategic political thinking. I really don't know what what
• 23:54
  Speaker 1: they had in mind. Maybe we'll find out, but it
• 23:57
  Speaker 1: clearly seems to indicate that they haven't really learned the
• 24:00
  Speaker 1: political lesson about healthcare, and they're gonna campaign on a
• 24:03
  Speaker 1: full repeal once again, which I don't think will work
• 24:06
  Speaker 1: out terrifically well for them. Max. Do you think this
• 24:08
  Speaker 1: was just a coincidence that the Muller report comes out
• 24:11
  Speaker 1: and gives the president of victory and and then we've
• 24:14
  Speaker 1: kind of got this announcement or just I mean, if
• 24:17
  Speaker 1: it was deliberate, I can't imagine what what the thinking was,
• 24:21
  Speaker 1: because you know, it gives Democrats are ready made opportunity
• 24:24
  Speaker 1: to pivot towards an issue that's a clear winner for
• 24:28
  Speaker 1: them with voters as opposed to the Miller Report, which
• 24:31
  Speaker 1: you know, I haven't seen the whole thing, but you know,
• 24:34
  Speaker 1: at least optically, at least in the beginning stages, didn't
• 24:38
  Speaker 1: seem to damage the president as much as some people expected.
• 24:41
  Speaker 1: So now they have a perfect opportunity to pivot away
• 24:43
  Speaker 1: from it, and they'll use it. So we've talked about
• 24:46
  Speaker 1: this before, Max, and that is that Obamacare is not perfect.
• 24:49
  Speaker 1: It's been highly flawed. The rollout was not perfect. Uh,
• 24:53
  Speaker 1: there are ways to make it better. There's a question of,
• 24:56
  Speaker 1: you know, could this be uh the first step in
• 25:01
  Speaker 1: the GOP presenting some sort of plan of their own
• 25:03
  Speaker 1: to grab with some of the healthcare issues problems in
• 25:07
  Speaker 1: the United States. You know, they if there's such a
• 25:10
  Speaker 1: plan from the Trump administration, it doesn't really exist or
• 25:14
  Speaker 1: doesn't deviate particularly far from you know, what they what
• 25:18
  Speaker 1: they tried and failed to pass over the last couple
• 25:20
  Speaker 1: of years, which you know, the main effect of that
• 25:23
  Speaker 1: was to basically kick a lot of people off their coverage,
• 25:27
  Speaker 1: make government healthcare and it's generally more difficult to access,
• 25:30
  Speaker 1: and reduce regulation. Um. Other than that, there's not kind
• 25:34
  Speaker 1: of an overwriting ethos or or any plan that does
• 25:38
  Speaker 1: much more anything different than that. And uh, you know,
• 25:43
  Speaker 1: if one exists, we've yet to see it. Maybe it'll come.
• 25:45
  Speaker 1: But considering that this, you know, this would repeal the
• 25:48
  Speaker 1: law with without any effort at a replacement, and just
• 25:52
  Speaker 1: rely on a divided Congress to to finally, I guess
• 25:54
  Speaker 1: come up with something. Uh just don't don't don't see yet, Maxineessa,
• 26:00
  Speaker 1: Thanks so much. Max's Biotech format and healthcare calumness for
• 26:03
  Speaker 1: Bloomberg Opinion, joining us in our Bloomberg eleven three oh studios.
• 26:06
  Speaker 1: Thanks for listening to the Bloomberg P and L podcast.
• 26:08
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• 26:11
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• 26:19
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