www.washingtonexaminer.com/
WEST FINLEY, Pennsylvania — In his first visit to a coal mine since becoming the 15th secretary of energy, Dan Brouillette said the innovations he witnessed at the Consol Energy Pennsylvania mining complex along the Washington County and Greene County lines were some of the most impressive technologies he’s seen in his career in the fossil fuel industry.
“If they can develop that technology and scale it up, it represents a unique marketing opportunity,” he said of experiments that were demonstrated to him at the facility that included not burning coal, but turning waste coal into clean fuel.
(Justin Merriman/for the
Washington Examiner)
The former energy regulator said coal is like oil in terms of negative public perceptions of how clean (or not clean) they burn. Oil, he added, especially in the days of gas-guzzling vehicles, was seen as the bad guy. “Why?" he said. "Because cars weren't efficient as they are today. They weren't as technologically advanced as they were today. So, we thought negatively about the fossil fuel that fueled it.”
(Justin Merriman/for the Washington Examiner)
The result, he said, is that folks want to move away from it. “Previous administrations wanted to move it out of the stack for electricity generation. That may still happen. It may be that the economics drive coal off to the side, but that doesn't mean coal dies. It doesn't mean that coal goes away. And that's what we see here in this facility.”
Brouillette spent hours at the Pennsylvania Mining Complex, the largest underground coal mine complex in North America, one day after visiting the Lordstown Motor Company to witness the unveiling of the Endurance, an electric pickup truck that will be produced at the former GM plant just across the state border in Ohio.
“Everything about that facility, about that particular place, is Americana,” he said of the Mahoning Valley 6.2 million-square-foot plant. “Their work ethic, their faith, their commitment to quality. Everything. If you want to see America, in my mind, that's where you go."
(Justin Merriman/for the
Washington Examiner)
Brouillette was confirmed to the post in December 2019. Like any new person to a position in the last six months, it has been a baptism by fire as he navigates running a complex government department in charge of the nation’s energy supply.
The Louisiana native has a long history of working in public service, beginning with joining the Army at the age of 20 during the Cold War. It was there where he met his wife, who was an Army officer and nurse. Since then, the parents of nine children have navigated their lives back and forth between Texas and Washington. Brouillette's career has jumped back and forth between government service and the corporate boardroom — he was a vice president at the Ford Motor Company before joining the Trump administration.
In a wide-ranging interview at the coal facility, Brouillette discussed President Trump's "all of the above" approach to energy, the Energy Department's role during the pandemic, and the irony that coal may just end up being “the savior of renewable energy.”
This transcript has been edited for length and clarity.
Washington Examiner: Let’s begin with your trip Thursday to Lordstown. How does a battery-fueled truck play into the president’s vision of the energy sector's possibilities?
Dan Brouillette: Lordstown is interesting for me, personally, because I spent some time at Ford Motor Company. So, GM was a competitor to us, but Lordstown was always something that we looked at because they produced so many cars there. Millions of cars were traveling around the world that came out of Lordstown. Everything from the 1966 Chevy Impala to the Cruze that was made.
So, it was devastating, in some respects personally, to see that facility closed because it's such a historic site for GM and for the auto industry, and then to see a small, upstart company like Lordstown Motors come in and not only come in with a good product but just make the commitment to buy the facility that way, which is a great deal for them, but nonetheless, it's a startup company, and to see them buy such a historic property was just exciting.
Startup companies have always been symbolic of the American work ethic. Everything about that facility, about that particular place, is Americana. Their work ethic, their faith, their commitment to quality. Everything. If you want to see America, in my mind, that's where you go. So, to see Lordstown Motors come in and realize that maybe that's the next generation or the next leap forward was just phenomenal.
And with all due respect to Elon Musk and the announcement that he made not that long ago with his pickup truck, which I'm sure is a great product. ... I haven't seen it personally, but it is a great product. What I saw at Lordstown in this particular product was something that also looks like America. It looked like a pickup truck.
This has got a hitch on it. I'm thinking to myself, yeah, my truck's got a hitch. It's got a pickup bed that looks like my pickup bed. It's got everything that looks like America is part of this product, yet the technology is so far advanced from what we're so accustomed to.
The battery technologies; the fact that it has four motors, one on each wheel; the fact that it produces 600 horsepower equivalent. That's stunning, right? That's what America is all about. Big horsepower, man. Let's go. Let's go fast. Let's get out there. Let's be free.
We had a great time. We met a lot of the engineers, a lot of the employees. I'm just excited about it. I think it's going to be a great, great run for them.
Washington Examiner: You travel 100 miles southeast, and you're here at a coal plant, this massive coal plant, and not only do you see how coal was made throughout the years, you also see its future. What did you learn today from that demonstration?
Brouillette: We got a chance to see a lot of that. We think about coal, in my opinion, in that it is just antiquated, and it's almost similar to thinking about the automobile industry and thinking about what it was, say, 50, 60, 70, 80 years ago. We didn't think about automobiles back then the way we do today. How did you think about an automobile back then? Well, it was a gateway to freedom for a lot of people that could drive out and just enjoy the countryside. For some, it was just a way to get to and from work.
A lot of people today think about cars as almost a second home. They want high-end electronics. They want to be able to communicate. They want it to have all the latest GPS technologies. RVs are rolling computers, in many respects. The technology that has advanced in the automobile industry, we could not think about 40, 50, 60 years ago. We just talked about a Chevrolet Impala in 1966. One of my first cars was a 1966 Chevelle. Very fast, back then. Today, you can buy a Toyota Corolla with a four-cylinder engine that will blow past that in no time flat. The advancements that have been made in the technologies in the automobile industry are simply stunning. We go further, we go faster, and we go more efficiently than we ever have.
Now, what were we doing, back then? We were importing oil. We thought about oil in a negative light. Why? Because cars weren't efficient as they are today. They weren't as technologically advanced as they were today. So, we thought negatively about the fossil fuel that fueled it.
And I think that happens today in the coal industry. We think about electricity generation, and we think about what's clean and what's not clean and what's efficient and what's not efficient, and coal doesn't stack up well next to some other generation technologies, for instance, like nuclear, which is carbon-free. Zero emissions.
So, folks want to move it out. Previous administrations wanted to move it out of the stack for electricity generation. That may still happen. It may be that the economics drive coal off to the side, but that doesn't mean coal dies. It doesn't mean that coal goes away. And that's what we see here in this facility.
So, when you look at the products that they can make here, such as coal decking — I think he said it's roughly 70% coal, 30% plastic. That's a bright future for coal in the building materials space.
With the cracker plant a couple counties away, you have the combination in this region in particular, much like we had where I grew up in the South with the production of oil and gas in the refining capacities and storage.
So, we had unique advantages for oil and gas. This area has a incredible advantage when it comes to the production of those types of materials. You've got storage. You've got coal. You've got the infrastructure being developed through the petrochemical cracker facilities. You've got all these things coming together in a region of the country that just has an enormous advantage. You're still close to the ocean. You're still close to ports. The export opportunities are enormous here. You have infrastructure like railroads. Pennsylvania is known for the railroads, right? It doesn't get much better than Pennsylvania in terms of rail access.
So, just enormous competitive advantages, which I think all speaks to a very bright future for coal if we're willing to think about it differently. And that's what I want to impress upon Congress and other policymakers who are responsible for the regulatory construct under which we're going to look at this industry. I think it's very important that we do it and we do it now because if we don't do it now, we face things like pandemics and other catastrophic events. We could watch this industry just go away completely, and we can't have that.
Coal, I think, forms a very vital cog in our supply chain infrastructure. We talked about rare earth elements. We talked about critical minerals. About 80% of our critical minerals today are imported from China. Fourteen are not even produced here in the United States at all. If we can develop the technologies to extract some of that from coal, we fix a very important national security problem for the country.
And it also relates to what I talked about in Lordstown. They're going to build their own batteries right there on-site. The battery technology is good. Lithium ion is a phenomenal invention. It's a phenomenal battery technology that we're proud to have been a part of at the Department of Energy because two of the most recent Nobel laureates in chemistry are people that we funded at the DOE for many, many years throughout their entire careers. They invented lithium ion batteries. So, these are important people in our world at DOE, but we also have scientists who are looking at the next generation and looking beyond it.
And in order to do that, we're going to have to have the rare earth elements and the critical minerals that we need to make that next generation of battery technology, and if we can do that here in the United States, if we can extract that from coal, then we have fixed a huge national security problem. And you think about the irony of coal being the potential savior for renewable technologies because now, we have grid-scale storage. We have battery technologies that allow us to use renewable energy in a much more efficient and effective way. Wouldn't that be the irony of ironies, that coal is the savior of renewable energy?
Washington Examiner: What is the Department of Energy's role? What is your role? What are you doing to be part of the government's response to the virus?
Brouillette: I'm enormously proud of what the DOE role was from the very beginning. Up until last week, as a matter of fact, we owned the fastest two supercomputers in the world. Last week, it was announced that Japan has overtaken us, and it's a great accomplishment for Japan. There's no question about that, but I can assure you, they won't be looking at that trophy very long because it's coming back to the United States by the end of the year. We have two other computers coming online in 2021. They're exascale computers. They're going to be exponentially faster than what Japan just put on the market.
But up until last week, we had the two fastest supercomputers in the world, and we were able to use that supercomputing capacity along with the biosecurity scientists that we have at DOE, as well as the mathematicians that we have. They were able to develop algorithms, and they were able to apply artificial intelligence to what we knew about the coronavirus generally.
So, a very practical example. They were able to peel through literally millions of drug compounds to find roughly 70 that we figured out would have a positive effect on coronavirus patients. They were able to do that in a matter of hours, which would have taken months in years past. Because of the speed of the supercomputers, they're able to just parse through this stuff really, really fast. They did the same thing with medical literature. Billions of pages of medical literature had been written over the last 50 years, 100 years, whatever. They were able to go through that in a matter of hours and find the most relevant pieces of research and say, "Let's look at this." And that's how we identified the various protein strains.
So, we knew kind of what we were looking at. Didn't know exactly, but we were able to narrow it down in a very short amount of time.
That's all DOE. And we supported all of the medical agencies. So, the CDC, HHS, all the acronyms, the coronavirus task force, all of those guys we supported, and it was a joint effort. But it was a whole of government efforts, and DOE was part and parcel to that. I'm very proud of what they did. The scientists that we have in our 17 national laboratories are just extraordinary people.
We now have over a hundred Nobel laureates, more than any other institution in the world. These are very, very bright people.
Washington Examiner: What has been the impact on our energy that's produced here with shale? Can you talk about how the industry and those jobs have been impacted by the virus?
Brouillette: Well, look, the demand curve, it fell off the edge of the table, and rightfully so. The president did the right thing by moving very, very early in January, and when we first started to figure out that, hey, this may be something different than we thought, he moved very quickly to lock down travel and that kind of thing from where we knew the virus was taking hold.
But as we moved into this and the economies began to shut down not only here in the United States but around the world, the demand for oil and gas and refined product in particular just fell off a cliff. And if you know anything about the production of energy, especially in oil and gas, and coal to some degree, you can't shut production down as fast as the demand went down. The oil is under pressure, it keeps coming up, and you have to put it somewhere. Once you start drilling, you have to keep drilling.
So, we ended up with huge storage problems, acute storage problems, and a glut on the marketplace. And the pricing just went through the floor.
And then, to top it all off, I guess, you had the Saudis and the Russians getting into a dispute over in Vienna as a part of their OPEC and OPEC+ conversation. The Saudis in particular, we thought, probably took the wrong step here to sort of address the situation as they saw it from the Russian viewpoint. They decided to not only increase their production but lower prices even further, and they could do that because they're a state-run enterprise. They can decide today what they're going to sell their oil at.
They cut pricing, they raised production even further and added to the glut, and just devastated the oil market. So, we went to negative $37 a barrel pricing. Unheard of. Has never happened in history. Matter of fact, there were many in the industry [who] didn't think it could happen, didn't think that that was possible in the marketplace. So, we ended up for a couple of days at negative pricing. A lot of that is speculators and folks who got caught in the market with long contracts that they had to get out of, and they have to pay people to take the contracts. That wasn't physical oil that was trading, for the most part.
But nonetheless, it devastated the market. So, you started to see people would react to that almost immediately, and the blessing and the curse in the oil industries that we've developed technologies like hydraulic fracturing and horizontal drilling and all of those things to make us much more efficient. They're very efficient, so, when they saw that kind of pricing, they started shutting down immediately. And they can do that today. They couldn't do that many years ago, but, nonetheless, production still lags in the demand curve, and we ended up with the storage issues that I talked about.
It's coming back very, very strong. I was just talking to the CEO of a major oil company, and they're coming back online because now they can begin to see the economy coming back in ways they couldn't see just 30 days ago. And you know the real retail numbers that were announced and all of that, and the job numbers and all that.
But what we're starting to see is when we looked at Google data, we look at Apple data, we look at other data, we can see that people are moving around, now. And you know it anecdotally because you're starting to see traffic on the highway, but we can see it very clearly in the movement of the people and the populations around the country. Very strong in the Midwest. A little less strong on the coast but very strong in the Midwest, and we're starting to see the data come in and the refining capacities that we're looking at. So, we're back now in parts of the country in the Midwest. Roughly 90% of the refining capacity that we were pre-pandemic.
As the president said, we have to be mindful of the health and welfare of the American people. That will always be our highest priority, but it's time to reopen the economy, and we have to push this forward. And he's doing the right thing by looking at these stats, looking at this data, and saying, "It's time to get going." We understand the risk better than we did 30 days, 60 days, 90 days ago.
We understand it better than we did awhile ago. So, we now know: OK, if you're 6 feet apart, you've got minimal risk, for all intents and purposes. If you're outside, you have a minimal risk. So, knowing that now, we're able to address it and be flexible in what we're doing and how we're doing it. And there's a lot of folks where I grew up — look, I grew up a young kid, was welding on a pipeline. Believe me, there's no coronavirus out there on a pipeline. I'm by myself on a pipeline, welding. I'm not getting coronavirus by welding on a pipeline by myself in the middle of nowhere. There's not a COVID-19 monster standing behind a tree, waiting to get me. We know that. We didn't know that in January. We understood how infectious it was, but now, we know.
And I think the president's right. We can make these risk-based decisions in a way we couldn't do just a couple months ago. And it's important that we do it. As we see across the country today, people are anxious to go back to work. Again, we talked about Americana. What are Americans good at? What do we do best? We innovate. We build. That's what we do. We build. They want to raise their families. As a father of nine, I want to take care of my family. That's just in my DNA. It may be in my DNA as an American. I suspect it's probably in everyone's DNA to some level. It doesn't matter where you come from. If you have children, if you have kids, your instinct is to take care of them. That's what we do as parents.
How do you do that? You take care of them by providing them food, by producing an income that allows you to put a roof over their head. Very basic things. We've got to get back to that. People understand intuitively the government will not take care of them, cannot take care of them for the rest of their lives. There's an appropriate role for government. No one's denigrating that. No one's mitigating that. It's important that we have programs in place to help people when they need the help, but we all know that at the end of the day, as Americans, people want to go back to work. They want to take care of their families.
Washington Examiner: Where is nuclear in this administration? What is with that energy? Because we've seen that pullback. We've seen some plants close. What is the administration's position, and what are you doing about that?
Brouillette: Our view is that nuclear energy is important for a number of different reasons. One, as we talked about in the past, it provides baseload power. It provides the 24/7 electricity that we need to allow renewables to come online because of their intermittent nature. It provides the baseload power that's needed to respond to a natural catastrophe, like a pandemic. Imagine if the lights go off, and in New York City, because the sun's not shining. What do those hospitals do? How do they operate? They're going to do it on diesel generators? What are they going to do? You need baseload power to make sure that when you turn that switch on, the lights go on every single time. Nuclear does that in a way that not many energy sources can. Natural gas can do it. Coal certainly does it. Hydro can do it to some degree, but nuclear, we know, does it 24/7, and it's important that we retain that.
Now, that being said, facilities are closing at too fast a pace, and that, in our view, is largely due to market rules that were created by previous administrations that had every intent of moving certain fuels out of the stack, and it was a very deliberate attempt to do that. The president directed me and my predecessor, Secretary Rick Perry, to begin the process initially. He did it literally out of the box. I forget the exact number of days, but it was probably no more than 60 days. "Begin the process of peeling back these onerous regulations that make no sense. Their only purpose is to push out this type of energy." So, we did that.
We worked closely with the Federal Energy Regulatory Commission. FERC initiated a rule that's called the Minimum Offer Price Rule. That's going to fix the distortions, we feel, in the marketplace. It's going to allow nuclear to be competitive again. It's going to allow coal to be competitive again.
The other thing that we're doing because nuclear is very expensive to build new facilities, as everybody knows, and that's part and parcel to the regulatory construct that it has to operate in as well. But what we want to do is to look at the next technology behind nuclear, the next type of reactor technology that's coming online. And what that looks like is a very small reactor. The current reactors that we have on the marketplace today, it's about roughly a gigawatt. About 1.2, 1.3 GW of power. That's enormous. That's an enormous facility. We can now make these things that only produce one megawatt or maybe one to five MW.
In order to do that, you have to have a denser fuel, so you take uranium and you enrich it, today with the big ones, about 4%. That gives you a certain amount of energy density. In order to make the reactor smaller, you make the fuel more dense, so you enrich it from 4% to, say, 19%. Very high density. It's high-assay, low-enriched uranium.
What we've done is we've initiated a pilot project that's in Portsmouth, Ohio, that's going to create the specialized fuel for the small microreactors. And we're hopeful that that catalyzes enough private sector interest to have this technology move forward. We've got the reactors that are being built at one of our national laboratories in Idaho. And if we can show the market that the reactor works and there's fuel available for it, we're hoping that it catalyzes private investment into it.
And if we can do that, now you have nuclear that's affordable because it's smaller and more efficient. You also have nuclear that's safer because these types of fuels are accident-tolerant, so there's no Chernobyl. It doesn't melt down. You can unplug it. You can turn the water off to it, turn the cooling systems off, nothing happens. It just shuts down. Very, very safe.
The other important component of it is that it's nonproliferate, so you can't steal the fuel, pull out the uranium, pull out the plutonium, and make a warhead. It's impossible to do with these new fuels, so it's very safe. Over time, hopefully, it will change the public's attitude toward the safety around nuclear because it's always been the challenge, right? And you guys know that here in Pennsylvania because you dealt with Three Mile Island back a couple of decades ago.
If we can fix those issues, and if we can do that credibly in the minds of not only the scientists but the public, then nuclear has a bright future as well.
Washington Examiner: Solar and wind. How does that fit in this administration?
Brouillette: The president's been very clear. The president is a very practical, direct, matter-of-fact, CEO guy.
And when he says, "All of the above," he means all of the above. He doesn't mean some of it. He means all of it. And that's the approach we've taken. So, we're very supportive of renewable technologies. And, again, just to speak to solar, just as we're doing with nuclear, just as we saw here with coal, we're looking at the next generation, the next advancements.
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