Arun Majumdar and I would like to welcome you back to the Stanford Global Energy Dialogue series. We are, of course, living in extraordinary times, and to understand this unique moment in history through the lens of energy, we at Stanford have started a series of conversations about the future of energy. Two weeks ago, we held our first such dialogue with a 13th U.S. Secretary of Energy, Dr. Ernest Moniz. We had a rich discussion about how investments in clean energy would help not only address the current economic crisis, but to also accelerate climate change solutions. Today we have the pleasure of welcoming the 12th U.S. Secretary of Energy, Stephen Chu. Dr. Chu is the William R. Keenan Professor of Physics and of Molecular and Cellular Physiology at Stanford University. As the first scientist to ever hold the cabinet position in the U.S., he is the longest serving Secretary of Energy from 2009 to 2013. Dr. Chu is currently the President-elect of the American Association for the Advancement of Science. He is the Co-recipient of the 1997 Nobel Prize in Physics for his contributions in laser cooling and atom trapping. And he continues to do research in his laboratory working on ultrasound and optical biomedical imaging, electrochemical systems such as batteries and electrolyzers, as well as energy storage in general. Today we will have a two-part dialogue. The first part will focus on using investments in clean energy to stimulate the economy. Dr. Chu has a unique perspective on this topic. Since his Secretary of Energy, he had to execute on the 2009 American Recovery and Reinvestment Act, which was created to stimulate an economic recovery from the Great Recession. This involved a $35.2 billion investment in clean energy, and we'll get into this in some detail. The second part of the dialogue will involve a presentation by Dr. Chu about energy storage, particularly long-duration, cost-effective storage for the grid, which remains a significant challenge for deep renewables adoption. After the presentation, we will open this up to Q&A with the audience and integrate some student questions as well. Arun, let's go ahead and get going. Thank you. Thank you, Sally. And Steve, welcome to this dialogue.  So the question is the following. Roughly how many terawatt hours of electricity did the U.S. consume in 2019? 1,000, 4,000, 7,000 or 10,000? And you have 15 seconds to answer this, and we will display the results of what you... So the majority of the people said 7,000 terawatt hours, 54%, 5% said 1,000, 15%, 4,000. You can see the results. The actual answer is 4,000 terawatt hours of electricity consumed by the United States in 2019. So that's the 15% of the people got that right. Okay, so let's get started. So first, we'll talk about the Recovery Act. And Steve, as you know, we are in an economic crisis, a global economic crisis, which is larger than the financial crisis that we had in 2009. And at that time, the Recovery Act was passed, and you were involved in executing. In fact, you were leading the effort in the Department of Energy. So let me just quickly recap what we saw, because it was a watershed moment for the energy sector in the United States. I'll divide it into two parts. One is the deployment part, and the other is the research part. We saw in the deployment part, doubling of renewable energy in the United States. Just to give you a few examples, the first Tesla plant was built with the help of a DOE loan. Which was returned with interest ahead of schedule. There were 15 million smart meters that were installed in homes and buildings. 650,000 low-income homes were weatherized, and many, many more. From the R&D point of view, under your leadership, we saw the first budget and the launch of RPE, the energy innovation hubs, which were really your idea, your vision, because of your experience in Bell Labs. There was a massive increase in energy frontier reach-it centers, because these were started under Secretary Bartman, and then you came in and you doubled down using Recovery Act. They were doubling down on the bioenergy reach-it centers, which were really the precursor for the energy hubs. And then the SunShot Initiative, and there are many more. So again, this was a watershed moment in the U.S. energy sector. And both for deployment and innovation, it's been 10 years. When you step back from this, what are your lessons learned from what went well? What did not go well? What should we repeat? What are your top three lessons learned from that experience? Okay. Thank you, Arun. Can you all hear me? Yes? Good. All right. So I suppose that there were some things that went well. One of the things that went well, for example, is some of the research institutions. We started ARPA-E, which grew out of rising above the gather and storm report that was written in 2005, where we specifically recommended that because energy, clean energy is so important in the 21st century, that a new funding agency should be formed. And it was formed with, again, a mentality of Bell Labs. The way Bell Labs parts about money is that there wasn't really a peer review. It was a superior review. Your department head, your director, would talk to the person proposing an experiment and just decide on the spot. Could take a few days, but very quickly whether this was worthwhile. Those people were intimately involved in knowing what was going to happen. And so we thought in 2005 and six that if we get outstanding people to administer this program, scientists and engineers who were as good or better than you normally find in the applicant pool, you'd have the best chance of success. And I think that worked in the sense that if you look at the people who worked at ARPA-E, certainly the first two or three rounds, including Ruma Jhambar, the first director, it was unlike anything the department saw before or since. In the sense that many, many people came in who would never thought of working in the government and worked long hours, 60-hour work weeks were not unusual at all because they were the type of person in the private sector, typically in universities, but some industries would also be working, loving what they did, dedicated to what they were doing. And quickly due to the respect of the applicant pool and when they got funding, I had several people come up to me and said, where did you find these people? They're helping solve our technical problems and formulating better business people. Usually they just give you money and they ask for a lot of paperwork and that's all we see of them. So things like that worked very, very well. Sunshine, as you mentioned, which wasn't a new program, it was a revitalized program out of renewable energy and energy efficiency part of the Department of Energy, also founded on the same principles, got similar like-minded individuals and so you couldn't tell the difference in the ethic between something like Sunshine and ARPA-E. Those things worked very well, mostly because of the quality of the people. That meant the decision-making and who to fund and to help the people who got funded, rather than just say, give me more paperwork, was something, I think we can look back and say that was something that really went well. Another thing that, although heavily criticized, that went well was, believe it or not, the loan program. The loan program, the loan guarantee program, without it Tesla would not have survived. By the time they got our loan, they were within one month of, wouldn't even say Chapter 11, probably Chapter 7 itself, all the parts. And yet it still remains a pioneering company in electric vehicles and has really, safe to say, set the standard of what high-end electric vehicles can be and how attractive they can be. And as time goes on, they're working towards bringing their products down more towards the average household, where the average car price is not $50,000, but more like $20,000. But this is something that worked very well. We also gave large loans to Ford, would not have survived without that, and Nissan to build the Leaf in America. And so these are things that actually work. The thing that worked even better were our large loans to solar and wind farms. Before the Recovery Act, before 2009, there were no solar farms at 100 megawatts. And the first five solar farms of greater than 100 megawatts was actually financially engineered by the Department of Energy, working in cohort with banks, Chase, Citibank, people like that. We were able to issue loans, loan guarantees, meaning if all goes well, the project is built on time on budget. All the customers had what are called off-take agreements. And so the contract would be you buy our electricity at a certain rate for, let's say, 20 years or so. Virtually all of those projects did come in on budget, on time, and are making money. We were only able to charge very, very low interest, 200 basis points above the Treasury, but it worked. But what really worked was before that, Wall Street would not touch large solar wind farms. They considered it too risky to invest hundreds of millions of dollars on these large installations. And since that time, nowadays, Wall Street considers investing wind farms and solar farms probably a better investment today than investing in oil companies. So times have really changed. So this loan program actually got the very large wind farms and solar farms started. And you can see in our history, both wind and solar took a market jump upward. The most important thing is that it showed you can build these very large farms and keep on time on budget. And it got the finance community to say these are good investments. You mentioned the hubs, things of that nature. That also worked well. It's hard to say, because there's no controlled experiment, if these things did not exist, had something happened faster or better that we had these energy innovation hubs versus did we not have them? We didn't do a controlled experiment. So it's hard to say. But certainly the people participating in the programs, the people looking back and saying, what are we getting as taxpayer worth, do feel it's okay. And these things continue today. I should also say, by the way, RPE has gotten bipartisan support after the first year or so. The first two years of RPE were only Recovery Act. There was no base budget funding. And so the critical time came in 2011, where the president asked for a large increase in the budget. We had $400 million of Recovery Act money for the first two years, roughly $200 million a year. He asked for $300 million the next year. Congress gave him $180 million. But as years went on, we're now close to nearly $400 million a year. In the last two years, all three years of President Trump's budget, he first asked for $20 million to close it down. The next year, he didn't even ask for $20 million. He asked for zero. He wanted to zero funded. And the following year, he also asked for zero. But in each of these times, Congress has actually increased it since that time. So Steve, let me ask you, what did not go well? I mean, in your thing, because now we're talking about a stimulus act, what could we have done better? Yeah. I would say when we are giving things away or partnering with industry, there should have been more conditions. Let me give you an example. We gave a lot of way in what's called a weatherization program. And in this weatherization program, it's for low division people who are living within 200% of the poverty line. And they would have to, nothing would come out of their pocket. And so if they were in a home where, which is under heated, and you can convince them to let people crawl around and do an energy audit and do these things, it wouldn't cost them anything. They'd insulate there, for example, would close off the leaky drafty spaces. Sometimes they would replace an old boiler. This is mostly heating, not air conditioning, that we were installing, or an old boiler, an old heater, sometimes blow insulation into the walls. Of course, there's no insulation, the ceiling, lots of insulation, the ceiling. It did not work well for two reasons. First, that was not a new program. It was a program, in fact, all these programs, the loan program was not a new program either. All the programs that we did in Recovery Act were actually authorized. That's Washington DC talk, which says that Congress passes a law that says you're allowed to start something, but they don't give you any money. And so RPE was authorized in 2007, but it wasn't until 2009 that, and the Recovery Act, they got money. Weatherization was authorized years ago in the 70s, but the people said, we'll dump a lot more into it. And there you have an AB comparison. If you look at the years just before Recovery Act and just after, and the idea is that if you invest a certain number of dollars in weatherizing, the return on your capital would be how much money would you have saved had the homeowner invested in it, right? Not the government. So the government says we'll invest this money, but we'll make some estimate of utility bills. This is what you would have saved. And they say they would save 1.4, but it's not, it's a funny number 1.4. First of all, it means they barely saved, but the net present value they chose was 2.7%, which is anomalously low. Number one, number two, a lot of the savings weren't really monitored. They were estimated. It's sort of like when you build a lead building, you make an estimate of energy costs, but you don't actually go and measure it.  Did a controlled experiment, you randomly go and you say, well, ask these families to do it. We want to ask those families to monitor what happens. And we'll look at the actual energy bills. And you also look at the thermostat, because you can also have some evaluation of the comfort level. And so both the advocates of the program and the critics, and boy, there were a lot of critics of the program, were mostly basing criticism or advocacy on estimates, things like that, where we could have gotten hard data. So that was a mistake. To really find out whether it was really worth it in terms of the social dollars spent versus social gain you get, and you can even include in social gain, abatement of CO2, or you can put some price on a comfort level. All those things economists do. So we should have done that. Another thing we did, which was very good, but again, where we missed our opportunity to maximize what could have happened is we gave a lot of what are called synchro phasors. These are devices, power management units, that would actually for distribution and especially transmission, large centers, they would measure the voltage and the phase. Measurements would come out 60 to 30 times a second. So very, very high frequency measurements of voltage and phase. And these so-called synchro phasors, the idea would be you would link them up to these major substations. And you could see a coordinated bridge, how the grid is interacting with itself. If there's a wobble in the phase or an oscillation in the voltage, as is caused by a blackout strongly more than a wobble, but even with large wind farms beginning to turn on, there are these voltage instabilities. And they were very helpful in actually saying, oh, we're near the threshold of something very bad. If an equipment is about to fail, you can actually begin to see it in these phasors. That was great. But what we wanted, what I wanted especially, and we gave out over a thousand of these, was that you can actually form an integrated information in real time, finding out what was going on across all the little power companies that constitute the United States grid. We're not just one big mother power system. We've got a lot of little things within certain regions, three, four major regions, but there are a lot of little power companies. And the mindset of power companies was that consider that confidential information. They don't want to have their competitors know what they're doing, what they're selling, how much, what are the flows of electricity. And it took about three years before I found they weren't sharing the PMU data with each other, which was the real advantage, because then you have a full view of the grid. They're still not fully sharing. They're beginning to share the western sectors beginning to share the eastern sectors beginning to share, but they're not sharing all over. As we go from 20, 25% renewable energy to 30, 40, 50, 60% renewable energy, we will need these more and more. And they actually have the capability of literally preventing blackouts, or at least localize them. And you begin to see a phase wall and then you can quickly automatically say there's something brewing here, what's going on, isolated, fix it, rather than the usual, which is wait for a blackout, you shut off things. And when you shut off things, then the power has to be diverted to other lines.  And that's what happened, for example, in the same day. But the basic message is that if the government is giving out money for things, they should have the option of collecting the data, sharing it, analyzing and really doing it like a scientific experiment. That is one big, big lesson learned. I'm going to hand in the interest of time, I'm going to hand this to Sally, because she has a question on the international side as well, because you were involved in that too, Sally. So Steve, clean energy, climate change, and increasing global energy access, particularly in emerging economies, these are really global issues. And on the international front, you started the Clean Energy Ministerial, you started the US China Clean Energy Research Program, you started the US India Research Program. And given the global nature of these issues, and given your experience from these programs, what would you recommend as the top two priorities for international collaboration today? Thank you. I would say the Clean Energy Ministerial is really high on the list. We weren't there to forge international agreements like UN, IPCC, Paris Accords. All we were there to do was say, we have some policies that we use in our country, like appliance standards. And if you use these appliance standards, you can save your country a lot of money. And that in particular made a very big deal, because usually what happens in developing countries is they get really cheap junk. For example, air conditions or refrigerators that weren't allowed to be sold in China by their own country would be dumped in Southern Africa. Very, very large energy costs. And in many developing countries, electricity is subsidized, just as kerosene is subsidized. And so best practices and said, you don't even have to set up an energy efficiency center. You can look at what other countries have done and follow two or three years behind and just see, you know, because they're worried about, it's all worry about first cost. That worked great. I think the whole idea that just as this pandemic has shown us that we're all in it together, it's just one big world, and there's no way you can put up borders that can actually isolate. Try as you will. Climate change is impossible. The carbon dioxide, the greenhouse gases go everywhere. Everybody's going to suffer the consequences. And so then again, sharing best practices and what works in cities, policies, the building, encouraging more energy efficient buildings, these things seem to work very well. Sometimes shared research, the US-China thing was shared research. There were some good things, especially in the building energy efficiency, less good. They weren't really willing to share electric vehicle technology. One can understand why, because the companies, if they're successful, they want to export it everywhere. But things where it's going to be built or used or operated locally, so it's not as though you can export it, put it on a boat and sell it as a commodity, ship it around the world. Those things, especially, there's no reason, you know, you have a captured market. When you build roads in a country, you know, someone in the country is building roads. So it's those things that worked especially well, that you could get honest discussions of what are called best practices, mostly policy best practices. Okay. Thank you very much. And we'll turn this back over to everyone for the next segment of the program. Terrific. Steve, maybe you could get your presentation ready. I know you're going to talk about energy storage, but before and while you do that, we have another quiz and poll. And so maybe we could get this, this is about storage. And this is just as a precursor for Steve's presentation. The US total, total electrical power generation capacity is about 1000 gigawatts. It's about a terawatt. Pumped hydro is more than 90% of all storage capacity in the US, storage capacity. Roughly how many gigawatts of pumped hydro capacity does the US have? 20, 40, 60 or 80 gigawatts. So let, we have 15 seconds for you to answer this. Okay. The 44% 20 gigawatts, 29. So it's kind of a decreasing, monotonic decreasing order. 29% is 40, 60 and then 80 is 11%. I think most people got it right. The answer is about 22 gigawatts of capacity. So it's roughly 20 gigawatts. So correct answers. So Steve, you want to go on to your presentation? This is an internal review written by Oak Ridge, but reviewing the weatherization. And if you look at the savings to investment ratio, before the Recovery Act, retrospective 2008, they found that they broke even. They did a little bit better. The ratio is 1.4. When they looked at the two years of the Recovery Act, it fell below one, which means the money you're investing isn't being recouped. And if you look back and they asked why was, they said we try to expand too fast. And there were things that went wrong, less well-trained people, too aggressive, started to give out too much money, things of that nature. So if we anticipate a Recovery Act going into this current recession we're in, there's going to be lessons learned in this. Now, this is the optimistic view. This is internally DOE report commissioned by, from Oak Ridge. This is the, another point of view. This is Michael Greenstone and collaborators who can sometimes be very critical of government programs. And he tried to analyze the weather program itself. And what he did is he made a little pretend he was the government and tried during this time and actually tried to convince people to weatherize things like that. And in the end, in order to recruit these people, they were spending about $1,000 per household weatherize to actually convince them to weather. This is like solar companies trying to convince customers to put solar on the roof. They could spend a third, a quarter, at least a tenth of the cost acquiring customers. Rather than saying the product sells for its buy itself. I'll just give you the bottom line. Essentially, it does not pay for itself. It doesn't pay for itself, maybe negative fivefold. And if you try to, and he's using a discount rate of 3% and 7%, the other guys use 2.7%.  And how much did you have to pay for in order to get these carbon emissions? And then he's estimating depending on whether the weatherization lasts 10 years, 16 years or 20 years, even at this very low discount rate, he's getting numbers somewhere between $322 and $160. That you pretend that you've actually paid by weatherizing homes. Now, I have to say that there's a lot of fluff in this. Their estimates, again, no real numbers. And so both sides had no real numbers. And they're about an order magnitude apart. And so going forward, boy, do I want data. Right. So anyway, and you know, there is this thing about this. This is another example of data. This is refrigerators, room air conditions, clothes washes and central air conditioners. It's something I started when I was a secretary of energy, but it was delayed in publication because we sent it to Science Magazine, and it got soundly rejected. We were showing data of appliances. The red, the blue number is the cost of purchase and the power and the money you spent on electricity. The arrows are starting with California standards and then national standards. The red is just purchase price costs. And everybody expected when you start an appliance standard, you'll increase the purchase price, but the money saved from lower operating costs would make so you break even with some discount rate. And what we found with quite to our surprise was that the purchase price, there was maybe a little take up in the purchase price for refrigerators, but it just went back down the learning curve, which you're learning curves, you're applying exponentially, shipments on the x-axis and price on the y-axis. But what was surprising is clothes washers central and room air conditioners, the purchase price went down, probably because more efficient one meant smaller compressors, they went back to the drawing board, but that's theory. The fact is it went down. We were very proud of this. We got huge databases and the the reviewers said, you know, we don't care what these authors who, by the way, seem to be mostly ex-physicists say about this, the economists are not going to believe it.  They don't really believe in data. But anyway, but you can read when I start to read their papers, they will make mathematical models. And when they have data that suits their purpose, they stick it in where they don't, they simulate the data. All right. Okay, so let me start off. This is a paper written 2020 by three ex-RPE veterans. And it says, if I wanted storage, I'm looking at penetration renewables, wind and solar in the United States. And how much wind or solar would I need in order, how much storage rather would I need in order to get, let's say, 30% penetration? The answer is, I would need no wind and solar. In fact, we're getting close to 30% penetration. We don't need much storage. But once you go to 50% penetration, then you're beginning to need peak load shifting, significant peak load shifting. But what's surprising is when you go to 80% energy storage, and these are sort of the uncertainties of where you are, you would need, this is time of storage, how many, how much storage you would need, and somewhere between five to 100 hours worth of storage. So the question is, you don't need to get to seasonal storage in order to get to 80% utilization. But the real question is, how much would it cost to get a 10 hour, 100 hour storage? And so these people develop, it was a call for proposals, it was called days for days long storage. And it's an interesting exercise. So if you looked at it, they said, okay, anywhere between 10 hour storage, 50 hour and 100 hour. And the difference between the green and red dotted lines and dashed lines are whether this was utilized 50% of time or 80% of the time. These are dollars per kilowatt hour, dollars per kilowatt, dollars per kilowatt hour. So energy storage has two things, how much power it can deliver, and how much energy over a period of time it can deliver. And they're actually not too far apart. And so we need both. And so in this, they were saying, is there something that can be technologically developed that could come into this price range of, say, of order $100 per kilowatt and so for 50 hour storage, something like $20 per kilowatt hour. So that was the challenge. Lithium ion batteries were even a decade from now will be landing at somewhere around $200 per kilowatt hour. And so they're asking, can you get something that would be in order of magnitude cheaper than lithium ion batteries, pump hydro storage and press air storage they put up here. But I will say that it's not exactly that. Another form of energy storage has to do with taking excess electricity and turning into a chemical form. The most talked about is taking electricity and hydrolyzing water. And if you look at on the X axis, the cost of energy and how many dollars per megawatt hour does it cost to make this versus how many kilograms of hydrogen you can actually make the current price at the gate at the user is maybe a dollar to a dollar 50 per kilogram of hydrogen, which has to be trucked in. This white line is the current electrolyzer we use today. And you see that at $40 a megawatt hour, or since a kilowatt hour, the electricity costs alone would be more than the marketplace. But if you had electricity at a dollar 50 per kilowatt hour, $15 a megawatt hour, you see that the cost of the energy would only be half the cost, which opens up the possibility with efficient electrolyzers, you can actually do something. I'm going to skip these curves because they're really just saying these are estimates from EIA, McKinsey and others about how to actually what the estimates will be by 1920-1930 with an anticipation of lower costs and more excess renewable energy. I should say this electrolysis of water is a very old technology, but it's being looked at in new ways. We all know from high school, if you put it in positive or negative, you get oxygen, hydrogen, bubbles. This is a cartoon of the catalyst on the oxygen side. When you make oxygen on that catalyst side, the oxygen is very insoluble, and so they run around and find each other and make little bubbles. And finally, the bubbles are released and collect the oxygen. So here's the point. When the bubble grows, you have to, it's a resistance to the formation because there's surface tension collapsing the bubble. So I add still electrical resistance. And as the bubble gets bigger and bigger, it's actually blocking catalytic sites.  If you could avoid bubbles and allow the gases, oxygen and hydrogen, as soon as they're made to be within microns of some hydrophilic border where the gases are allowed to escape, you can greatly reduce the resistance. And so these are some technical things. Right now, where does hydrogen come from? It comes from steam, methane reform, and that's what SMR stands for. You take natural gas and you can convert it essentially when all is said and done to hydrogen and CO2. You bent the CO2. So although hydrogen is a clean fuel, it's not the full life cycle is not clean at all. It admits as much CO2 as if you burn the natural gas. So what happens is the possibility of using electrolytic formation of CO2 means that you greatly reduce the CO2 output. There's a possibility that hydrogen can go negative if you use biomass materials and efficiently turn this biomass into hydrogen and sequester the hydrogen. And at that point, hydrogen is not only a low carbon fuel, it becomes negative. Again, I don't want to go into the details of that, but the possibility of this happening and what are the artifacts in this are an issue. Of course, it's the collection of the biomass, which is a major issue. But still, people are beginning to relook at hydrogen for this reason. Now, people are seriously considering hydrogen as stationary storages. You get the hydrogen, you pump it underground in a hollowed out soul cavern at moderately low pressures, hundreds of PSI, not seriously considered for general fueling of vehicles, except for long haul trucks with central fueling stops, because we don't have a distribution. But if you can store hydrogen locally in an underground cavern, that could work. You can always fuel a vehicle faster with hydrogen than an electric vehicle, because you can pump in the gases and chemicals much faster than charging a battery. But what is lacking is the gas infrastructure. People talk about repurposing natural gas lines, but unfortunately, you need higher pressures and hydrogen seats into the steel and there's embrittlement and pipes fail. This is a materials problem that has not been solved for decades. And so we don't really know whether it's possible to get steel pipes that have hydrogen. So now the talk is having fiber reinforced polymer pipes. And whether you can make these inexpensively enough when you go to scale and the claim in some places like Oak Ridge or USU can, that these indeed could be less than the cost of steel pipes. And so if you can make these and make them so they don't leak out of hydrogen or very, very low. So you get rid of the metal, because people begin to say we may never solve the embrittlement problem. And you have this, this could work. But again, this is more research and development. The costs are for the pipelines, things like that. But a huge cost of pipelines roughly have to cost them right away. So if you begin to say, if we can go to a partial hydrogen economy, you use the existing pipeline right of way, you've actually got rid of heads or costs and you replace the steel gas pipelines with hydrogen pipelines, it may be feasible. But it really depends on the technology, how well you can make these pipes, how well you can seal them compared to your standard seal pipes. Okay, so let me go to this several days storage. This is an RPE, a recent RPE call for proposals for long duration in addition to electricity storage, several days storage. And again, it comes in two tranches. It comes for store for one day and, you know, say 10 hours and store for up to 100 hours. And what they said in this proposal is say, let's assume you buy electricity at two and a half cents a kilowatt hour and the whole electrical storage into some other form of energy and the conversion of that energy back into electricity, we're going to say, well, let's keep, you've got to keep the price below five cents a kilowatt hour. So you sell at seven half cents a kilowatt hour, you're buying energy or power at two and a half cents a kilowatt hour, energy two and a half cents a kilowatt or you're selling at seven and a half. How does that compare to natural gas standby generation? They chose these numbers because that's what they think future natural gas combined cycle plants will cost somewhere between four to seven cents a kilowatt hour. And so they say, if you come at these values, perhaps you will be competitive without a cost of carbon. So that was the idea. Now, if you think about turning electricity into energy storage, the most important thing that hits you in the face is that the conversion of electricity into mechanical motion as in a motor or the conversion of mechanical motion, rotary motion into electrical energy as in a generator can be greater than 95% and in some cases even greater than 99% efficient. Very, very high technology motors can be made. So if you have electricity from renewable energy, wind or solar, what you want to do is turn that electricity into something that you can recover back in terms of mechanical motion in a generator motor. I'm going to skip these lines and say that it turns out the most efficient energy storage is you take that electricity and you pump water up a hill. And if you look at all the energy storage across the world today, you find that pumped hydro storage dominates way more than thermal storage, electrochemical battery storage or electric mechanical storage. It turns out if you have a height of more than 250 feet or so, the round trip efficiencies can actually exceed 80%. Once you're at a few hundred meters or reaching as high as 85%. That is better than a chemical flow battery. It's not as good as the lithium ion battery, which is about 95%. But in terms of energy storage, it's really one of the best. The problem with hydro is that it takes a long time to get permanent. There are a lot of certain types of environmentalists who are very much against a hydro storage. Even if you have an existing dam and put below the dam, a few percent pool that you can pump up and down there against that as well. So that's an issue. And if you look at hydro electricity in the world, China leads the world by far in hydro electricity. This is 2014 and they're actually on their way to increasing this by 50%. If you look at pump storage in the world, Japan actually leads in pump storage. But China is now by the end of this year, or at the latest next year, they will become the leader in pump storage. The United States is not this beginning to catch up actually, only in the last few years. So what's the idea of pump storage? It's gravity. You take your electricity and if you take this mechanical motion and you pump water up the hill. So it's essentially still remains as roughly mechanical motion. When you want the energy, these turbines work both ways and you know, the flow down, but you don't throw the water away. You keep it down. So you're just actually pumping between an upper and a lower reservoir. So this is systematically what the picture looks like. This is a more detailed version of this. You have, you know, water coming in, turning some turbo veins exiting out here, turns the shaft and turns the generator. This is one of those turbo veins and this is this variable speed generator. New technology is variable speed generators, meaning that you can have the motor perform at high efficiencies in conversion of electricity to mechanical power or vice versa at different speeds.  But I just want to press upon you the scale of these devices. Those are the people. These are people and they're normal sized people. And so these generators are quite large. The pipes in which the water flows to the generators are also quite large. Everything is very large. There are, I believe, ways of getting pump hydro to lease costs and people beginning to look at now standardized parts. Right now dams remain as one horse. Are the more pump storage places around the world? And the answer is yes. There's a group in Australia. This is the website. And those little dots and where you see red dots, they say these are very pump storage. It's in that was all around the world. Of those are the places where you have large height differences, let's say 100 meters or higher. They could mean very efficient and lower cost pump storage. Now, of course, no countries can build on old sites, but a small fraction of these sites can really substantially improve energy storage. Let me give you an example of something that's taken roughly 10 years to permit. This is an abandoned mine in California, in eastern Riverside County, California. This is this big hollow space, which is an open pit mine. And they wanted to make this in a section below a lower reservoir. This is the upper reservoir and to use it for pump storage. This is typically what happens to our mines. They're kind of left from the state. Environmental spot is for a very, very long time. Finally, gave it a permit and they're proceeding ahead. And since the mining costs are already been paid for, you've got the big hole. All you need to do is put in the turbines, the 10 socks, the things that allow the water to flow, generating stations and then a line. You're free. There is an added cost. The environmental said you can't use fresh water. You're going to ruin the water supply in the United States. So in the end, they compromise and they have some desalination plants. So they will take some brinish, brackish water and fill it up with that. But nevertheless, they believe it's still economical. Here's the thing about pump storage. And this is something if I were going to do this again, I would look at large projects that have very long time scales and give them and pump storage time scales can be quite long. The generators can last 50 years. The dam itself, we know last roughly 100 years, many dams that we built 100 years ago are still in operation. But the issue is when you do make these investments, what do you take as the cycle of these pump storage things? I believe a conservative estimate is a 50 year cycle. The dam itself, which is a half the cost, you can say 100 years because many dams are 100 years old. But it then depends on the discount rate. If you take a seven to 10% discount rate per year, you're getting no credit for an energy asset that could last 100 years. So it's partly an economic thing and how we can arrange for tax credits or something like that to allow pump storage to work be economically more than competitive. But again, there's been a resurgence and a look at pump storage because it is the one thing we do have and we do know it works. It lasts a long time. And in this relook at pump storage, what I'm finding out is that it's landing in places significantly better, for example, than chemical batteries. So that's one thing. An innovative pump storage generated by a theoretical physicist at UC Santa Barbara for Lubin. And his idea of pump storage is, well, you know, if height is good, the oceans are deep. And so if you put these canisters down the C4 bottom, one or two kilometers below, and you pump air, compressed air into this and displace. So you displace the seawater down here. This is a concrete ballast that keeps it situated on the seafloor. There are thin pipes because the pipes have to withstand this tremendously high pressure of one or two kilometers deep because at the top of the pipe, you have one atmosphere pressure. Down below, you have many hundreds of atmospheres. In any case, just pumping air down and leaving it up again, it's mechanical. So it's going from electricity motors to pumps to doing something like that.  So as the air compresses, it heats up, which means it makes it harder. You have to do more work. So you have what's called isothermal cooling. So it cools down. But it's a huge change of words both ways. So as you allow the pressure to come up, then with isothermal heating, you don't lose that pressure. And so this reservoir is now your ocean, and the idea is you can get isothermal heating and cooling. If you can make that efficient, then there is no thermodynamic loss in the pumping down of the gas, which will heat up or cool down and expand. So this is part of this technology. Compress the air storage. Again, the same idea. What they're thinking now is 80 bath storage. So as you pump air in as it heats up, you cannot have it heat up too much or as you can't get that much into your cavern for temperature low reasons. And it's also thermodynamically inefficient. Can you store the heat adiabatically? And so when you expand the gas, it's expanded cools. Can you recover the heat to drive the turbine? Trouble is even adiabatic and the two air compressed storage we have don't have any of this. But can adiabatic really do the trick? Because when you store the heat adiabatically, it does leave a lot for the energy storage, temperature, qualities of that adiabatic container. The idea that you can actually build a salt home is something which we are capable of doing. You can send in rock, you can hollow out a salt dome, and then this makes a very good seal. This is good for pump air storage. It's good for hydrogen storage. And sometimes you for natural gas reservoir. So here the idea is you pump in water, you get up running water, and then after you've hollowed it out and you have sufficiently good cap rock, you can do this. The next new kid on the block is try to design isothermal storage. If the isothermal storage is 100% efficient, again, as you're compressing the air, you're giving it to the reservoir so you don't do any extra heat and compressing this. So it does begin to look like an electrical motor to something mechanical. As the gas expands, it cools down. But if it's isothermal heating again, it looks more like a mechanical. So these are things that are looking at and if you can get good isothermal compression and reheating, then these large-scale energy storage devices begin to look very good. The last thing is everything I've shown you, pump hydro, pump gas storage, is mechanical. It's electrical motor to lift mechanical. People are actually thinking of electrical motor to lift weights. But it turns out lifting weights and seal cables and something don't seem to be as efficient as in pumping fluids, especially water because it's incompressible. You use no extra energy. But what about using electricity just to heat something up? If you have one-and-a-half cents to kill one hour and you do an energy conversion, that's $40.40 a million BTU, which is comparable or less than the cost of natural gas in many places around the world. Then the question is, what about using electricity? These are some of the places around the world where natural gas prices are destined to be. If you have any modest price on carbon, for example, $60 a ton, you just added another $10 per million BTU in natural gas. So renewable electricity will undercut natural gas. The question is, all the other stuff, can it be made cheap enough so that you're doing better than natural gas? And it goes through utility-scale thermal storage. I'm going to skip this stuff. This is the worst thing you can do. You can take electricity and you can put a resistor in a vatum molten salt and heat it up. Then you have this vatum molten salt that you heat up and you have an exchange and you heat up steam or something like that. It spins the turbine.  This is what we do when we put in coal, for example, or natural gas. I'm going to skip these things and just say I'm going to skip all the thermodynamics and I'm just going to get to the fact that there are better ways, very novel ways of reinventing how do you take electrical energy, turn it into heat, and make it come back. And it actually goes directly to this diagram. Just focus on this diagram here. Here you have electricity coming in and you take a low-temperature reservoir and you use a mechanical engine, in this case a turbine, either a Rankine engine turbine or a Brayton cycle turbine, and you take fluid and you take low-temperature heat and put it in high temperature. If this were a fluid, it would be pump storage. But the question is, can you mimic mechanical energy into getting a heat pump that takes energy from low-temperature to high temperature when you're so-called charging it or lifting water? And can you take this high energy in a same engine, let's say a Brayton turbine, and you put it into a low-storage tank and discharge? So these so-called Carnot batteries, where you have the electricity, you pump it into hard and cold reservoirs and then you take that energy and use another heat pump, another turbine of some kind, to turn it into thermal power and you make electricity. So this has been taking a fresh look. Daze is investing in a number of programs. One such cycle, I'll just close with this, was composed by Bob Loughlin in the physics department here at Stanford in 2017, which is part of an evolution of the so-called Brayton type of heat pumps. Instead of two reservoirs, a hot and a cold, he says, I want four reservoirs. So I have a very hot reservoir, oscillating with another cold reservoir and another hot reservoir, another cold reservoir. This is my Brayton cycle pump. And so, for example, in charging, so-called charging, you use electrical energy, mechanical energy, you take energy from the cold side, you compress it onto the hot side. Now this idea has two things. Mostly you're worried about very high temperatures, so you lower the highest temperatures by actually operating these reservoirs below room temperature. And so that's point number one. Point number two is he uses what's called a regenerator, something well known to mechanical engineers in the power generation business, to actually more efficiently don't lose any of the energy as you're sloshing this, the energy from cold, hot, hot to cold, really to try to mimic pump storage. And whether you can get heat to mimic pump storage remains the question. In this paper and other papers, it's being claimed that perhaps you can get to 70% carnal efficiency. If there was 100% thermodynamic efficiency in the compressor and expander, if this was working on 100% efficiency and the heat exchangers were working at 100% efficiency, this would have an efficiency of 100%. And then the question is, what will it really have? And using what Bob often thinks are realistic numbers of efficiencies. And getting to the highest temperature differences you get with known existing materials, he thinks you can get to 70% efficiency, which would be excellent. If you don't try, you get a 40% efficiency. There is a world of difference between 40 and 70% energy. A lot of new companies beginning to look at this, I'm going to skip this. One final comment is that in terms of the fluid that you use in these turbines, people are beginning to think that carbon dioxide in a closed cycle is maybe the best fluid. I just want to not go into it, but supercritical carbon dioxide has a density of half of water. So the size of a 300 megawatt turbine comes to this size. And there are a lot of other advantages. It's less corrosive, many other things. But let me just close here. There's new slow batteries. And go back to this day's call for proposals. The exciting thing is by the time you have 100 days storage, you could be 80% renewable wind and energy. And I think with all the pump storage that is untapped that could be made without offending a class of environmentalists, you can get this 100 day storage in combination with thermal storage. At least that's the hope. We'll see what's happening. And we'll see how the public responds to would you rather have carbon free energy and a few more ponds of water. All right. Thank you. Thanks, Steve. So to get the Q&A started, like we normally do, we will have a student ask the first question. And then we'll go back and forth between Sally and me and the student. And we have Will Gent, who's actually not a student. He just finished his PhD. And he will ask the first question. Will, go ahead. Right. Thank you. So yeah, I have some questions that were submitted from the current and former members of the Stanford community. And so the first question, Dr. Xi mentioned a lot about the research and infrastructure investment needed to make hydrogen a viable long duration storage technology. Do you see those necessary investments being made in the U.S.? And what do you see the role of hydrogen being in the future? Yeah, I think both government investments, but also part of the sector, about two or four years ago, I'm on a advisory board for Shell, the Solar Science Council. And I began to realize that electricity really is going to be one and a half to two cents a kilowatt hour. And the Shell people said it is going to be like that, 20, 30, 20, 40 with the ways. Then you can use electrolysis. And since that time, it's been part of Shell's strategy. And they're beginning to invest considerable money into making more efficient electrolysis, doing things like that. There is no solution yet to the pipeline. But they're beginning to look at using right-of-way and fiber piping, things like that. It's for stationary storage, definitely, for centralized fueling that it's also going to work. But also hydrogen, because they're the biggest users of hydrogen. They, the oil and gas companies, because they take heavy crude and turn high value products. So that's the biggest commercial use of hydrogen. But beyond that, hydrogen, we'd love it if you can convert hydrogen and CO2 into hydrocarbons with clean energy. Then the transportation, long-haul transportation problem is solved. That we don't have yet. But just hydrogen as the energy storage medium, or ammonia as another one, are things that they're looking at very seriously now. And the U.S. government DOE does invest something in hydrogen. I'm not sure the American oil companies are doing this. But I can tell you, Royal Dutch Shell is. Okay, let's move on to the next question. So the question is, how should the Department of Energy be restructured or what activities should it add to its portfolio to help bring ARPA-E or other technologies that it's invested into maturity? Well, it's, it's, I'm not sure if it was a restructuring. I'm thinking, you know, room would remember in 2010, we formed SunShot with the same, you know, feelings and abilities and looking for the town that we got an ARPA-E. And so SunShot was actually a clone of ARPA-E in a certain sense, but it was focused on photovoltaics and solar thermal, but very, very capable people. We didn't actually have a substantially bigger budget. But I started gaining things. Did you guys double your budget or something? I said, no, we went up by 5%. I said, oh, really? Well, something's changed and you're funding the right stuff. So, so, so I think there's just getting really talented people. One of the things Department of Energy really has to do and they do a terrible job is they, they create paperwork like you cannot believe. And despite all of the things in the Loan Program, the Loan Program paperwork was horrendous. And if you got out of government loan, it's as if during the whole time you have that loan, it's as if you've got government colonoscopy without anesthesia up you the whole time, generating tons of reporting requirements and compliance. You're just crazy. And so one of the things, so there's a huge overhead and a lot of companies didn't want to cut your government loan, but they said, I don't want to deal with all this paperwork. If you notice in the COVID-19 crisis, they wanted to get some money out to people. They did not create a government program. They said we'll let the banks get it out. The only trouble is they gave it to the big commercial banks. Finally, they got wise and said, you know, we need to set aside a little money for the little banks because we need to get the little people. This idea of using a private sector to disperse seems to be more efficient. And the best of all possible things, and I mentioned this, if we work with banks so that they do some of the legwork, because the paperwork and weatherizing housing, the paperwork and getting loans programs, that is horrendous. Because if you slip up and there's a little bit of a scandal, then the opposite part is all over you. And it becomes very inefficient. So I think there's something in the middle where the government can co-opt the private sectors to do it. The private sector has to take some of the responsibility, but to get the money out faster because of the larger bureaucracy and unfortunately in the Dewey, as in other bureaucracies, you constantly have to have your machete and hacking at the growing bureaucracy year after year after year just to keep even. If you let up one year, it just grows. And so this is something that is true of the U.S. government, but it's also really true of the Department of Energy. You've got to get really good people and you've got to always fight the bureaucracy growth. Okay. Well, thank you for that graphic image as well. Will, you have another question? So this one is about the global supply chain for batteries. So today most of the supply chain is overseas, largely in China. Should the U.S. do something to help create supply chain in the U.S.? And if so, what needs to be done? The short answer is yes. There's no way we could allow critical manufacturing to proceed only in certain countries, especially countries who are not above using that to control the marketplace. And batteries is one of them. They tried to corner and largely did corner the market and rares for displays and for efficient electrical motors. We're fighting this because rares are not rare. It's just a very pluding mining situation. And so we have to mine the rares in a way with improved environmental concerns. Batteries, definitely. But I would say it's the same of a lot of key industries. The next one would be integrated circuit chips. There are only two major players, TSMC in Taiwan and Intel. IBM is longer in the business. And there are no other real major players and a little bit of Samsung for memory. And so certain key industries, I would say the government should protect them a little bit because China, Incorporated, has no bones about helping these key industries and nurturing them and supplying them with all sorts of help. And if the United States says, stands and said, we want to be pure, we don't want to do this, we're at a disadvantage. In the end, if you look at Airbus versus Boeing, we subsidize them in different ways. We subsidize Boeing because of the military contract. And Airbus just subsidizes directly. But without subsidy, if either Boeing or Airbus didn't get subsidies, the other one would win. So I would say I would look at any of these key industries and energy technologies and say yes, you cannot depend on just pure, superior ingenuity when you have huge financial backing.  But this also, I mean, if you're looking at the intermittency of renewables, there are options to minimize the storage investments by looking at high-voltage DC transmission, effective demand management. You have electric vehicles that'll be on the grid that could be leveraged as well to some extent. So if you really were to design an optimal system, what would be, how do these interplay with each other? Well, I think demand side management is something very real. You can give financial incentives. The financial incentives should leak into building buildings with a little more thermal inertia. So we're talking mostly about air conditioning.  And if you had enough thermal inertia, the occupants wouldn't suffer that much. The other thing that's not fully appreciated is decoupled the cooling from the air circulation. What I find is if you have a ceiling fan, you need far less air conditioning. And so there are many, many things like that. But in the end, you will still need storage. And so we're talking a few percent of total capacity to really change to the needle. So the original idea, first the idea is we have all that we need. We can go to 100% renewable.  But the opposite is also true. You don't need one third of your total average output storage in order to get to 80%. You need far less than that. If you have a reasonably good transmission distribution system, right, which goes to everything else. I was talking about the phasers, the long distance transmission, all these things. And it's an optimization. When do you do long distance transmission? And when do you do energy storage? And it also depends on the technology. The technology for long distance transmission is improving, led by China. They're now sending six gigawatts per wire for two wires at high voltage DC. That's a lot of power. And Germany and other countries are now taking the same towers they use and replacing them with DC lines. And you get five times more power, six times more power, same right of way. So there are things like that, the on stage should be doing in a new recovery act. What I would spend my money on would be these long term infrastructure issues. But it has to be, you don't give this away for free. It would have to be at least a 50% match, maybe a two thirds match. So that the companies who are investing is know that they have a good business case. The best thing we could do is to clear the right of way crap. When I was secretary of energy, I was trying to do transmission lines. And I wanted to do get it from 11 years to three years. The resistance I ran into was enormous. From the Obama administration, Secretary Salazar, Interior, he was all for it. But within his administration, fish and wildlife game, they were the biggest resistors. There's no way you're going to send transmission lines to where I hunt and fish. And so I think, you know, if you want to live in a two degree world instead of a four degree world, there has to be a different discussion. I'm going to combine two of the questions we had from the audience into one. So the first one was about small modular pumped hydro systems. You know, are these viable and, you know, does it create a real alternative to having to build dams and go through the permitting process? So that's part of the question. The second one is a little bit bigger question. And it's, you know, to what extent should small modular distributed microgrid systems be viewed as an alternative to replacing aging energy infrastructure and developed economies? And then likewise, in developing economies, you know, should they should we think of those as a fundamental element of the energy system in those areas? Great questions.  People are beginning to look at hydro instead of these, you know, I showed you pictures of these beautiful one offs. And just like all the nuclear actors were one off. And so now it's a realization that if you can, especially for smaller ones, where you can take run of river, put a small holding pond, pump it up there, and then let it go back down. So you haven't really done anything to the river. You haven't destroyed the fish in the river, all sorts of things that are objectionable. There are fish, friendly turbines, but it's harder when the things get bigger. So small modular hydro is small modular hydro is could really help a lot. And all you're you're comparing to is a battery. So you don't have to say, well, the old time we had, you know, 300 to one gigawatt generators, which are crazy, you know, you don't think of batteries giving one gigawatt.  And so I think we have to rethink this. Now distributed versus other, it really depends. And because you always it's like, you always want to put your wind farms and your solar in the best sites, you want to put your pumped hydro in the best sites, the best sites have the highest vertical drop. And so it's then it's just a trade off, you know, transmission is not cheap. People don't like transmission lines. You so I don't see it's either or I think it's it's going to be both. There is more resiliency, the more you have local generation and local storage for sure. And so you can factor all that in. Okay, thank you. So let me turn the several questions on geothermal and geothermal being that if you could do this, it's zero carbon as well as you may not need the storage, you can use it when you need to. And it generally is a question of cost. And I was wondering if you could comment on what you have seen and what needs to be done to bring down the cost of geothermal and do it in a way that it's could be used in multiple places, not just in the thermal gradient areas. Well, okay, so right now, most virtually all the geothermal we have is where natural geothermal you have a natural source of water. The water is the heat fluid for the conductivity. And they are in high grading where local, you don't have to go too deep where there's local hot. Okay, so hot springs places works well. But there are very, very few places far less than pump store sites, where you have natural flow water that actually have this. So then you go to what's called enhanced geothermal where you have a fluid, and you have hot rock, you still want a site where there's a very high gradient to get the pretty hot stuff. And so that has a little bit of tension because the places where you have a high thermal gradient are places which are generally speaking, more geologically unstable. And if you start pumping in fluid, and you start sending off tremors, this makes people nervous. And so this is one of the issues. Now, having said that, I think it's possible. I don't know of any large demos, but the fluid of choice would probably be carbon dioxide, even better than water. It doesn't have the beautiful heat capacity of water, but it has about half the density at these temperatures and pressures, and it can see through with less resistance. Now, so the idea is now you're pumping in fluid, either CO2 or water, you pump it down, and you learn to develop very rapid small board drilling that then pumps the fluid and has it come back up. That technology, that's one of the RPE things that did work, that you can drill very rapidly with less weight on bit, because you're using a laser to help chew up the rock. These things are being looked at. To the best of my knowledge, I don't know of any really successful ones being tried yet. You may know, but the other thing about enhanced geothermal is it's not a permanent source, because unlike the hot springs we now have, they're regarded as semi-permanent. It's a steady state thing, because nature has been very kind in these spots, but very few spots. You actually go and you mine the heat, and after about 40 or 50 years, you've taken out too much heat, the gradient is less, because dry rock is a good insulate. Remember, you're pumping in the fluid, and so what enables the current geothermal sources is there's a lot of water around, so you're taking heat from the rest of the earth. I don't see geothermal, it's so geographically limiting until you go to enhanced geothermal where you pump and fluid. It remains to be seen. We'll see what happens to pumped thermal. If you can get pumped thermal, it's 65% efficient. That's a big deal. You can put that anywhere. We'll finish with two questions. Will has another one. Go ahead, Will. CleanTech 1.0 was the name given to the initial wave of private sector investment in the early 2000s in clean energy and energy storage. Now there's a second wave called CleanTech 2.0. Do you believe that the private sector has learned the necessary lessons from the first wave of investments? Golly, that I don't know. What I saw in this very fork investment period, about the time President Obama got elected, is that there was a feeling that now we've got the right president, we had the right congress, things will go our way, and a lot of investors invested in lots of clean tech and lost their share. What I saw was many of the investors actually they made their fortunes on internet companies or information tech companies. Very, very different than an energy company where the time scale is much longer, the margins are much smaller, and it's real hard work. And so it's a very, very different sort of business. And sadly, the most knowledgeable people in businesses like us with the old people, the GEs and the Siemens of the world, people like that, it really had engineers and a long tradition of engineering excellence. And when the new startups come along, they have to relearn all this stuff. Tesla was a great example, great, great idea of a car. The Tesla battery electrical system is one of the world's best, it's not the world's best. The ability to manufacture the rest of the car that manufacturers figured out 30 years ago, they had to learn to make the doors fit and things like that. And so I think energy is a little bit of, there's hundreds of years of manufacturing experience that people know coupled to these new technologies that you'd love to see. I mean, if we could get the GEs is now in shambles and Siemens is looking around, if we can get those type of engineers to a couple with some of the other people, that would be great. Because you want to tap in these years, you know, mechanical engineers and chemical engineers understand thermodynamics far more deeply than a physicist. I won't disagree with you on that one. So let me ask the last question, we have only a minute left. If you look at the Paris Agreement, let's start global, because this is a global energy dialogue. The Paris Agreement before the year before that, US and China got together and actually had a discussion and agreement on what to do, which is why the Paris Agreement as opposed to the Copenhagen was much more successful than we got the whole world together. And right now, things are not as, the relationship in the US and China is not as good. If you look ahead now, the climate change is not waiting for us. What should the US, China, India, EU be doing? What should we do internally in the United States to really address climate change from the energy perspective? And also what should we do globally? If you have a quick sort of thoughts on that, that would be great. Yeah, I think it's very sad because, well, look, we should have an administration that actually listens to scientists. We start with that. It's just as we really need an administration that listens to medical warnings and risks of COVID-19. The climate risks are much deeper, that will last millennia. And so then you need to say, okay, these are the risks, these, with these risks, it's once you've developed a risk, you can begin to talk about the least costly way of mitigating risk, adapting to risks, things like that. But right now, we're not there yet. And so, in fact, we've turned away from that. And so the hope when Obama was president and we had a different world and we had the EU 28, the hope was that China, US, and the EU would lead the way. With those three leading the way, that actually gets most of the world because the developing world, its fraction of greenhouse gases is very, very small. And if those people actually established a price on carbon and started doing those things, it wouldn't really punish the developing world. But they're so carbon-intensive, non-intensive, certainly believe that capital has to flow to developing countries, that the richer countries have more wealth, they can adapt better, and it would help speed it along. I'm a big believer in that. If we take the attitude, no, why should we say it's paid for anyone else's things, we're going to look at it after number one. Well, that's sort of what US society has been doing for a while and it comes back and bites you. And so we saw this in the COVID crisis, two different types of populations and how they can deal with this medical emergency. We see this in the way the police treat different sectors of society. Climate change is this whole thing magnified. One world, one planet, we've got to do this. And so I think there's a few things like that. The United States for a while has been leading in the technologies. But now even to have us collaborate on things, again, going back to some of the original questions like energy efficient buildings, sharing best practices and energy efficient buildings. Well, the Chinese are going to build the buildings in China and the US will build buildings in the United States. It's rare that you get a Chinese company that comes in the United States and builds a building, although I wouldn't put a pass, anything. But then sharing these best practices. So there's so many things someone can do. Of course, surprising carbon is essential. But and we know Europe did the experiment $30, 30 euros a ton doesn't do anything. And it's got to be 60 or above. And people have to have comms that is going to stay at 60 to 80 or above. You can ramp up slowly, but it's just got to stay there. And so there are many things that can be done. When you have things like that that also I'm a big believer, let's just stimulate huge innovations. You know, I'm pretty confident we'll get much better batteries and we'll get thermal storage. I don't know if it's going to be $30 a kilowatt hour, but it's going to be less than 50. And that would be very good because batteries the full scale all in costs are about 200. And so, you know, thank you. Thank you, Steve. And thank you, Steve, for a wonderful dive. This could go on for many hours, but we have to end now. And let's all thank Secretary Chu for this discussion and dialogue and the presentation. And to the audience worldwide, we hope you found this dialogue to be informative and useful and enjoyable. We invite you again to join us at the next Global Energy Dialogue, which will be on July 7th. And we will have Chad Holliday, the chairman of the board of Royal Dutch Shell for a dialogue. And we will do this every two weeks. And please come and join us. And on behalf of the entire Stanford Precourt Institute for Energy, we really thank you for joining us. Thank you very much.


There are a lot of doubters every time any new business gets started. Maybe there are even more doubters when you try to start a co-op. It means a lot of people getting together. Many people don't want to take the trouble, but by 1938 most of us around here were pretty well convinced of the co-op way of doing things. It wasn't a very good year. Prices were down, there wasn't much work. Some of the boys who had gone up to the big cities and factories in busy years drifted back to the farm. They found the old homestead looked pretty good and life was more pleasant. Prices of chicken was down as low as 11 cents a pound and sometimes no takers even at that. Nothing to do but eat them. It's a slow mean job to pluck a turkey or a chicken. The feathers and pin feathers are only the beginning. After all that you still have to clean the bird and show away everything but the giblets. But this Rockingham farmer had learned something up in Detroit. He figures if you could make automobiles on a moving line you could sure clean poultry the same way. He sketched out his idea of how it would work. Sunday. Just about the only time to show his neighbors the new idea. He'd show them how to process poultry on a moving line. Sell a lot more that way and do it real fast. Save a lot of money and turn out a better finished bird. Some of them said he was dreaming. It would cost too much. People wouldn't bring the birds in. Where was all the money coming from? He told them you could run and put in there everything as a cooperative. Store, a milk plant, cannery. There wasn't any reason not to run a poultry plant as a co-op. Some of them said it was too big. You'd never get the money. He came awfully close to being right. But after a lot of wrangling we managed to do it and on our own. Three thousand poultrymen put up twenty-five dollars each for a share of common stock. A lot of them bought preferred stock too. They all share in the profits. Let's go in and take a look at the way our friend's line works. Rubber beaders strip off the feathers. They're dipped in hot wax. After cooling the wax is stripped off. That takes care of the fin feathers. Some of them are sold whole. They're sorted out by weight. Another line takes care of the birds that are to be packaged and frozen. Here's the government inspector always on the job. Every bird is inspected to make sure they're all okay. After they've been pieced and sorted they're wrapped and packed into individual boxes. The box birds are quickly frozen in this modern cold storage and freezing plant. Then they're shipped to the big cities for sale. This mutual cold storage is another of our co-ops. Members can have beef butchered here. They have their own freezer lockers too. One more thing we do cooperatively in Rockingham County. Any true co-op is actually run by its members. The members choose a board of directors like any other big business. The board tells the manager what to do and decides important questions by vote. They have complete control. I'm a member of the board of the poultry marketing co-op. This is a pretty typical meeting.  But with something big like grading of the birds comes up takes a lot of talking. One man says it'll be fine to raise their quality by paying a premium price for top birds and buying only the best grade. Another thinks that wouldn't be fair to all members. A lot of them aren't equipped to produce top quality birds. But they're all members and they have the right to sell what they produce. Finally it's decided to grade by the flock instead of the bird. That way we'd pay a premium for a top quality flock and a lower price for a second grade flock. Simple and it puts the emphasis where it belongs on the flock. That's the way it works. Maybe there's a lot of talking but these are individual businessmen with free choice. Doing business the way they themselves chose. They own their own business and together they run it. Let's see how these co-ops get started in the first place. They're all alike but just for example let's take the poultry co-op. First we formed an organization and got ourselves incorporated so we could sell stocks. Then we each put in $25 and each got a stock certificate in the corporation. Lots of co-ops start with less. Some of ours around here started with as little as two dollars per member. You don't have to have any special amount. 3,000 turkey and chicken raises each put in 25 dollars. That made a total of 75,000 dollars. That's a heap of money and nobody has over 25 dollars in the kitty. Then with the bird stock that doesn't carry any voting or management rights at all. We got a total of 160,000 dollars. Then we had a meeting. Elected a board of directors and a manager. Hired a builder and at no time at all we had a new plan and it belongs to all of us. The members and non-member producers who wanted to market their birds through the co-op but didn't want to join brought in their turkeys and chickens. The birds from both members and non-members anybody can deal with this co-op were paid for at the standard market prices. They were boxed, frozen, shipped in special refrigerating cars and sold. Money from sales began to come in. It belonged to all of us. After the workers, the taxes and all costs were paid there were still some left. It was ours so we divided it. Simple isn't it? Well, simple and principal anyway. We had to do a lot of work and there was a lot of people who made it tough. We did it ourselves.  Yes, we formed all this ourselves. Anybody can do it though not without work. You have to argue quite a bit. This show is a little to what we've got. That square building is their mutual coal storage and behind it's the poultry co-op. The building under construction is a new meatpacking co-op. We just got started and there's their co-op cannery. We buy our supplies through co-op stores and sell our wool. We buy electric current and sell our milk. We produce about 31 million dollars worth of farm products every year in this county. There's my neighbor, Fred McNeil, taking his family to church like he does every Sunday. Now Fred's just an ordinary farmer but he's a pretty important man in our county. He didn't have anything to start with and doesn't much money now. He works hard because farmers always work hard. But now there's nothing too new or wonderful about all this and we don't say there is. Anybody could do it. Millions of folks have. But there's a proud satisfaction that you want to share in your country. About 6,000 of us all together put up the money to build all these things and nobody put up very much. We own them. We meet and wrangle and fire and fire. It's a democracy right down to the limestone. It outcrops the same way. Here in this rocky land where people have lived and worked and suffered, where women have born children and struggled and died, just like they do everywhere, we just happened to carry through an idea. It was hard work but it was worth it. I guess the most important thing about it all is that we're just an ordinary group of people. But we've learned how to live and work with each other. This is Rockingham County, Virginia. It's my home and when I get away from the store I like to come up here and look at it. We have a way of doing business here that works pretty well. Nobody told us we had to do it this way. Other sections of the country do things differently. But this way works out fine for us. I'd like to tell you about it. It's just an ordinary county I guess though it's mighty pretty. It's in the Shenandoah Valley between the Blue Ridge and the Allegheny Mountains. A lot of people drive through here on this fine highway. Tourists come through by the hundreds. They drive too fast to see much. But if they slowed down they'd see pleasant little villages with fine old houses. It's old country for this part of the world. First settled at Builder's House in 1727. Here it is. Of course they've patched up now and then. The Civil War left this section burnt out, gutted. Some of the wounds still show. But the people instead of crying over the ruins dug in and began to build for the future. There's a lot of history been made around here. George Washington wrote a fine Morgan stallion through this gap during our fight for independence. Yes a lot of people go through the valley but they don't have much time to look around off the main roads. If they did they might see farmers like Fred McNeil plowing his field or doing the endless things that farmers everywhere have to do. It's a rocky 70 acres but then the whole country around here is rocky. It's been farmed a long time. It's too hilly to start with. Fact is a lot of it's pretty well worn out. Fields must be fertilized. Pences must be fixed. Coming is tough work in any country. There's a lot of turkeys down here. There's a lot to do even with electric ponds. Where you've got chickens you've got eggs to sell. To be done in town today. Harrisonburg the county's seat. It's a shopping center for everybody around here. It's a good friendly town just about like any other. But it's a little different from a lot of other towns in this country. Most of the people in this region decided to go into business together. We organized cooperatives. A lot of them. Most of us, not all of us, belong to one or more of these customer-owned business organizations. Fred takes his eggs into sell just like all farmers do. Takes them to a big store. It's got everything just like every farm supply store. But this one is owned and run by its customers. It's a co-op. Yes, we built this ourselves. Started with the buying club. That's where a lot of farmers all chip in to buy a carload of fertilizer or something to save money by buying in large quantities. Now we get everything the same way. The store buys for all of us. We buy each other's farm products and sell them on the open market. We buy the finest supplies and quantity lots at good prices to sell to our members. Started with a little shed. Now we've got this $100,000 store and four branches out in the country. 4,500 of us put up the money. We own it and we run it. I've been with it since it started. In fact, I'm a storekeeper here. Fred pays the same for his can of tobacco as he'd pay anywhere. Same with everything else bought here. But at the end of the year there's a surplus. Yep, candy for the kids too. Everything we farmers need. Shoes. All kinds of hardware. Everything the farmers need or want. We sell everything here from tractors to lipsticks. Fertilize or feed in special mixtures for any requirements. This is one of the many things we do for members here. Is all this equipment make money? It sure does. Though we call it surplus rather than profit. But it's all money. Every year we have a meeting and all vote on how much we want to put back in to expand or buy new equipment. Then we divide up what's left and every one of our 4,000 members gets back in cash a percentage of his purchases during the year. Generally it's about 8% and he also gets a bigger share in the plant. Last year it averaged about 120 dollars a piece. Gas, we have our own gas station too. Gas, oil, tractor fuel, everything needed to feed the modern workhorses. There were a lot of people who didn't believe in this at first. Thought the farmers wouldn't get along with each other. They were too independent financially. Getting it started took a lot of talking to people who couldn't quite get the idea. They thought it was too complicated and couldn't be made to work. Well it did work and now most of the doubters belong. We all own it. We all manage it the way we think best. Here's another business run the same way. A milk processing plant. While the kids and Mrs. McNeil look around town, Fred delivers his milk. He belongs to this too. Matter of fact, Fred belongs to a number of co-ops. Some of the people in the county don't belong to any. Others have joined all of them. Just depends on what they have to sell and what they want to do. Fred gets a better price for his milk here. Besides that gets his share of the plant surplus. Works the same way as the store. Every member owns it and runs it. The milk is weighed and credit is given to the farmer. A sample is taken of each farm's milk as it comes in. It's tested for a bacterial count. 90 percent of the milk sold in Harrisonburg goes through our plant.