This is not just true for bureaucracies. This is kind of a human behavior, right? Where it's easier to allow the status quo to go on until the easier decision is to put a stop to it.
SPEAKER_01And so I just wanted to say that I think it's a great loss, uh, unfortunately, that we lost David at 60 years old. He was a great critic of the tech industry, of computation. You know, he wrote a fantastic book about the politics of Bitcoin that was far ahead of our discussions about crypto in the past couple of years. You know, he published it back in 2016 that really dug into the libertarian roots of those technologies and, you know, was proven correct when we had this big wave of interest in cryptocurrencies over the past couple of years. David had been working on a book called Cyber Libertarianism for quite a while. You know, I would check in on him every now and then and see how it was going, and I was looking forward to interviewing him on the podcast about the book, but unfortunately that won't be able to happen now. His editors at the University of Minnesota Press will be finishing that book, and I will be looking for some way to cover it once it is finally released. But I just wanted to note David's passing and to say that, you know, it's a real loss for all of us who care about critical perspectives on the tech industry, because David was often quite ahead of the curve in his critiques, and they were always very welcome, and it was always great to engage with him. So rest in peace, David. And if you do want to know more about David and his work, I've linked something that I wrote in my newsletter in the show notes, so you can feel free to read that and find out some more about David's work if you did want to explore it further by reading some of his articles or books or a talk he gave last year on cyber libertarianism. So with that said, this week's guest is Eric Resch. Eric is an expert in environmental compliance and risk assessment, and he also writes about the intersection of capitalism markets and greenwashing under the name ESG Hound. Eric has done some great writing in the past number of months and years really on SpaceX and what it's been doing in Texas as it's been seeking to launch ever larger rockets in that part of the United States. And of course, you know, people might remember that back in April it launched its Starship rocket, which exploded, but also caused a lot of damage on the ground when it exploded the launch pad and caused a lot of environmental harm in the wildlife area that surrounds it, not to mention the communities where people live even further afield that saw dust dropping on their homes and their cars and their communities. And so the regulatory side of this and kind of the environmental assessment or impact side of it has been developing for the past number of months. And so I figured it was a good time to have Eric on the show to dig into what the actual impact of this launch was, but also to talk more broadly about kind of the regulatory evasion that happens in Silicon Valley and among many of these tech companies, and with Elon Musk's companies in particular, and the risks that that poses to the public, as they are not held to account when they do those things, but are constantly able to get away with it. And so I thought that this was a really great conversation with Eric to dig into those questions to find out, you know, what might be happening with Starship launches into the future and whether it looks like SpaceX will be able to move forward with them again soon, but also why it's so necessary for us to expect regulatory agencies to be holding these companies to account more often. Because if they keep getting away with it, then that can have some really serious consequences, as we, you know, saw with what happened with the Starship launch in April. So I hope you enjoy this conversation. I certainly enjoyed having Eric on the show finally. If you did enjoy it, make sure to leave a five-star review on Apple Podcasts or Spotify. You can also share the show on social media or with any friends or colleagues who you think would learn from it. And if you do want to support the work that goes into making Tech Won's Save Us every single week, so I can have these critical conversations about many aspects of the tech industry. You can join supporters like Alice from San Francisco, Gillian Rochevel, and Leyland in Victoria, Canada by going to patreon.com slash tech won't save us, where you can become a supporter as well. Thanks so much and enjoy this week's conversation. Eric, welcome to Tech Won't Save Us. Thanks for having me on, Paris. Absolutely. We've been talking about having you on for a little while because I've been reading your work on SpaceX and kind of its abuse of the regulatory system, I guess, for a while, and in particular since the Starship explosion in April of this year. And so I want to dig into that with you further, but just to start off, you know, when the Starship exploded on April 20th, what was your like immediate thought when you saw those photos of what happened at that launch site?
SPEAKER_00I guess a couple things. The thing that people really focused on in the immediate aftermath, people who were not super steeped in the story, they noticed the mid-air explosion. And that ended up being a bigger issue because the self-termination system for that for the for the vehicle didn't go off as intended. But the rocket itself was there was always a good chance it was going to explode in mid-air. And so people really focused on the explosion. And you know, I saw a lot on social media people were dunking on the company, and they they kind of I actually think they did a pretty good job of caveating that a failure in, you know, shortly after launch in air was a very real possibility.
SPEAKER_01Yeah. When you see those images though, it's like it's hard not to uh have a little dunk on SpaceX.
SPEAKER_00Oh, oh, absolutely. I'm certainly not gonna fault anyone for doing that, given the narratives that go around about them and the nature of who owns and runs SpaceX. Certainly I'm I'm not gonna begrudge anyone from it, but I had spent so much time, maybe an unhealthy amount of time, you know, reading and writing about the site. And so my focus was less on that and and obviously more on the images that came out. And I I guess, you know, in retrospect, you know, I had I had written that it was, you know, gonna be a lot worse on the impact than people had thought. Even I was kind of taken aback, you know, everyone's, I think, seen the imagery of how much that rocket just tore up foundation and flung just massive boulders of concrete and debris in into the ocean, basically, you know, a mile or two away. That part was, you know, as someone who'd spent so much time about it and, you know, maybe sometimes suffers from chicken little syndrome myself, being, you know, freaking out about stuff that you spend a lot of time researching on, I was still, I was surprised actually at how far out kind of the physical impacts were to the surrounding areas. And it's funny because people were like, well, you were right about this. And I said, Well, the actual mode of failure I didn't pick up specifically. So I found it really, you know, kind of in a way I wasn't surprised, but in a way, just the imagery. And I think this is a really important issue when you're talking about environmental regulations and when the public cares about environmental protection, that there's this really emotional visceral component of it that is really effective for making environmental change. And you see just giant pieces of concrete with rebar jutting out of them in the middle of a flat next to some scorched bird eggs, and it's got this really visceral component that is uh effective on the public. And then, you know, I've been in the field for a long time, and part of being in the field is mitigating and preparing people for impacts, but even that visceral emotional response still works on me, kind of to be like, oh wow, this is like a direct impact of industry on environment as they butt up against each other.
SPEAKER_01Yeah, it it was really notable to see those images and really kind of shocking, right? And for people who haven't seen those images, I'll include some links in the show notes so you can go check that out if you haven't already. But as you say, like these massive pieces of concrete, like on the beach next to um this launch pad and the video showing the the big pieces of concrete like flinging into the water beyond that, which was quite a distance from the launch pad itself. And then, of course, seeing how the launch pad was like destroyed by this massive you know explosion to get the rockets and to get the ship like into the air. And even then, you know, when you saw the debris kind of being dropped on like a community that was quite a distance away from the launch site, it was like these are major things, and it felt like this had not been disclosed or like messaged to the people around the site that the impact would be this great beforehand.
SPEAKER_00Right. And I think that's kind of the key, as you know, I was writing about this as early as September of 2021. I think that's kind of the core issue here is that, you know, a lot of people who don't understand how policy and how law and how some of these environmental review processes go, they're like, they come to me and they're they say, Well, you know, Kennedy Space Center in Florida is surrounded by wildlife. They light off rockets, and so like what's the difference? And I think that's the whole story, right? So you talk about Port Isabel, which is about five miles as as the crow flies, is that the the closest, you know, actual suburban or I guess a suburban area where people live from kind of the these big launch pads, um, which are kind of nestled back in Kennedy Space Center in Florida, they're something like 15 to 20 miles away. And so kind of that part is one thing. And the second part is really just the way the site itself is situated. I think if the media hasn't done a great job of really focusing on that, is that Kennedy Space Center itself is just thousands of acres. And then the individual launch pads where you see the whole area cleared out, they've got the infrastructure in there, the area of those pads is something like four to five times bigger by area than what SpaceX is working on there, which is this postage stamp of land.
SPEAKER_01I guess it's notable to say there as well that like at Kennedy Space Center, at least for the moment, the rockets being launched there are smaller than what this starship is, which is uh kind of breaking the record for the largest rocket that has been launched from planet Earth, which was previously held by the Soviets back in like the 60s or 70s or something, right?
SPEAKER_00To be clear, you know, the the the Artemis rocket is 75 to 80 percent of that size. And so, yeah, that is certainly uh an interesting point, too. It is, but yeah, I mean, the the land that's directly surrounding Starbase is owned by the state. It's owned by a few federal agencies. There's a war memorial there that's owned by the Department of Interior, the National Park Service, and then a large chunk of the land is owned by the federal government and exists as uh basically a protected wildlife habitat. And so Kennedy Space Center was allocated back in the 60s, obviously, and and they were given a lot of land here. But SpaceX basically bought a tiny spot of land, and instead of developing that land, working with locals and you know, maybe purchasing more land and and planning for it over a long period of time, they basically just put all their stuff in this, you know, super cramped area. And then they're like, well, these consequences outside of our out of our launch pad, you know, the public just has to suck it up. And I think that's where this is a totally different situation. They're simply just not, they're not the same thing. And and the fact that NASA is a federal agency run by very smart people and they they kind of have this history of actually pretty good environmental protection, um, especially in the last few decades, having them, you know, coordinate all the different activities that occur at Kennedy Space Center is just such a stark contrast from this down in Texas, where basically SpaceX is responsible for all components of it, and the FAA is okay with basically rubber stamping stuff that NASA does because NASA does the right thing. And that same approach does not work with a lot of private companies, and especially does not work with Musk run companies. He has a long record of this, and this isn't the first time he's done similar things. Um, or basically you have you force your externalities, your very obvious and destructive externalities on your neighbors, and you say, I'm not gonna pay for this land, I'm not gonna follow the rules, and you just have to deal with the consequences. It's this weird, like eminent domain almost situation, but SpaceX doesn't actually even have to compensate. They're just like, Well, we're gonna do it, and I dare you to stop us.
SPEAKER_01Move fast and break things, basically.
SPEAKER_00Right, right. Yeah, and I think that's really interesting because because right, Musk comes from that kind of tech culture you see that's really especially relevant in um Silicon Valley. And look, I worked for oil companies, and I'm not gonna downplay externalities they've had, and certainly don't want to, you know, excuse any behavior by that industry because there's plenty of problems, but kind of on the surface, they've learned over the years to to to at least nominally on on the surface, you know, say or act like we're gonna uh comply with the rules, and because the consequences of not doing so have been kind of more painful as time goes on. And I think the tech analog is really interesting because we saw it first happen with with software. You look at Facebook and basically helping to normalize or cause large genocides in in Southeast Asia. And so you see those consequences, and it took us a while to realize the connection between those two things. And that was more of like a software human engineering, you know, human networking type of thing. Not that it's not dangerous because it certainly is, it's less obvious, and we haven't seen it, you know, kind of in the past before. And then I think the middle step is if you look at basically what Uber did, right? So Uber and Lyft to maybe a slightly lesser extent, but they walked into jurisdictions that had very clear rules about what a taxi could be, and they said, Too bad, we're just gonna do our thing, and I dare you to stop us. And obviously, you saw the consequences of that. What's interesting is that Musk is doing this with hard industry that has had regulations for a long time and people have kind of understood these consequences, but it's just it's just wild because it's like we're inventing some of the stuff that the Koch brothers were trying back in the 1980s. He's just like rediscovering this kind of 1980s Ayn Rand inspired paying the fine after the fact is a lot easier than actually complying with the law. It's kind of like what's old is new again. It's I find it really interesting that it's like it took us, you know, almost the tech industry just getting all this money where they took it from software to then things like ride sharing and taxis, and now they're doing it with these very hard industries that have, you know, use a lot of chemicals that have a lot of very obvious impacts in the environment. And it's like he's trying to do that again, and it's kind of working, and it's very strange to watch as kind of someone who's spent a lot of time and and has degrees in studying things like environmental law and policy. It's uh really interesting to watch.
SPEAKER_01I completely agree with that, right? And it's really fascinating to think about how these tech companies, as they have kind of increased the power and wealth that they have, have been able to kind of replicate things that we have seen other industries doing to ensure that they can make their profits and they can do what they want and they'll just ignore kind of the regulatory state. And, you know, if they need to pay some fines later, that's not a big deal because the amount of money that they're actually making compared with the fines that are often levied at them is just so kind of infinitesimal, right? Like they make crazy money and the fines are are just so small that it really doesn't matter, which is why you see Amazon like, you know, they're happy to pay fines for like worker abuse and you know not providing good uh conditions in their warehouses. You know, we see them pay OSHA fines and things like that, and like it's nothing to them. And we've seen this with tech more generally, where, you know, time and again, like you say, the Uber example, they move into these industries, they claim that they are different or distinct from what has existed there in the past. And so they feel like they're able to just run roughshod over the rules and regulations that apply. And unfortunately, regulators seem to be just totally okay with allowing them to do that, right? As is the case or as seems to be the case with SpaceX and this Starship launch, where it almost seems like, you know, NASA is like public sector, right? So they are forced to abide by a particular kind of regulatory framework, and they kind of have to do that because they are a public agency at the end of the day. Whereas because SpaceX is a private company and SpaceX is trying to do this in a more quote unquote entrepreneurial way and like use this tech mindset, that it's happy to like just run roughshod over these regulations and dare the regulators to come after them. And in many cases, they're just not willing to do it.
SPEAKER_00Right. And I think really fascinating part of Musk himself, and I've brought this up a few times before, is that his currency, right? And this is you know, maybe early to mid-stage, you know, just straight up running an oligarchy, is that his currency, right? So his wealth is kind of a fearal, right? So we we talk about him like having to pick through the couch cushions to to pay, you know, a few hundred million dollars for Twitter. And then we keep in mind that this man is, you know, worth somewhere between 100 and 250 billion dollars. And it's like, well, where's the disconnect there? And the disconnect is that, you know, so much of his wealth is tied into equity markets. And I think you can kind of go back to basically, you know, corporate and actually government pension plans in the 1980s were transitioned over to the IRA, right? To the to this 401k type format. And that made Americans in particular really sensitive to equity markets. And so now you've got basically Tesla, the actual operation itself is not too big to fail. There probably aren't enough jobs. They don't make enough cars for it to be kind of this too big to fail, similar to what GM was in 09. But because, right, if you look at like the S P 500 or the NASDAQ index, which is a huge portion of so many people's retirement funds, like you're talking about Tesla being like, you know, 4% of it, right? And so it's it's this really interesting dynamic that it's like, I think there's some small part of it that is like if we stop this guy, then we're gonna, you know, nuke the markets and we're gonna lose re-election. And it's really this. I mean, I don't want to claim that's all of it, but that's certainly a large component of it. And so that's kind of the financial incentive to not do it, and that bleeds over to government policy. But on a more like specific front, you know, people really talk about fines for individual bad actions on a regulatory front, like you talk about OSHA or EPA. And even kind of going back to that Koch brothers example, I've brought it up a few times before, is that they basically came out and said, one of the Koch brothers, it was, I think it was David actually, back in the 1980s, the refinery in Minnesota was discharging a bunch of ammonia into the groundwater. The cost to add a refinery unit that would prevent this was, you know, in the hundreds of millions of dollars, and their maximum fine per year was like capped at five, 10 million. And they said, look, if I do a if I do a calculation on you know return on invested capital and then the cost of financing, it's just it's cheaper for me to just pay this fine. And that's that that was a large fine back then. But even the coke companies finally realized that there were other costs, reputational risks. And then the DOJ started getting more aggressive with EPA about doing things like having consent decrees, where if you bad enough actor, they would put you into a debarment or a or a consent decree permit. And I I've worked with companies that have been undergoing this. And what the federal government says is forget the fines. If you don't comply with this program and fix stuff structurally, like, you know, with how you comply with the law and have, you know, internal whistleblowers and all this stuff, we're gonna take away your license to do business in the US. Like for pipeline companies, it's a it's a really strong tool because the commerce clause allows the DOJ to say we regulate interstate commerce. And if you want to run a pipeline company, we're gonna put you through this exercise. And so the risks are less on the actual fines for the individual bad behavior, and they should be more focused on you know reputational risks, and then again, stuff like the government saying we can take away your license to do business. And it's been a tool that the GOJ used a lot and then has used less and less by year, kind of really starting actually, ironically enough, with the Obama administration, and then you know, obviously Trump kind of supercharged that. So um, it was something we're actually the funny enough, and is that the the George W. Bush era administration was really pretty strong on going out against corporate crime, and part of it was just like Enron was this visceral and like obvious thing, and they had no choice. I mean, like, if you if you want to talk about like going against bad corporate behavior, the George W. Bush administration was miles ahead of what the Obama administration did after the fact. And it's just wild to look at that in retrospect.
SPEAKER_01Absolutely wild. But as you say it, like I'm also not super surprised, like, unfortunately, like, you know, seeing the Obama administration more generally. I do want to use that to kind of pivot back to what we were talking about with SpaceX, though, because you were talking about how, you know, one of the tools that these regulatory agencies have, whether it's the DOJ or other ones, is to actually stop these companies from being able to do business. And of course, one of the issues that SpaceX faces is that it needs these licenses to be able to launch, and that depends on meeting certain conditions, right? And so one of the things now is that the Federation. Aviation Administration, the FAA, is saying that as a result of this launch that caused a lot of environmental damage, it needs to meet certain conditions if it wants to launch again. And so, you know, to work our way up to talking about that, I want to ask you, you know, before this launch happened, as you said, you were writing about how the impact of this was going to be much greater than what the agencies and what SpaceX was saying. So how did you identify that when the agencies were saying otherwise? And what do you make of kind of what has happened post you know launch and after all of this kind of damage was caused with the various kind of regulators and agencies having to respond to what happened at this SpaceX site?
SPEAKER_00That's a great question. And it's it's really sometimes I'm guilty of being a little too wonky, but on a real you know simple basis, the approval that FAA did, and it's not the only approval that exists, but it's kind of it was kind of the big one in the holdup, was under NEPA, which was kind of the original national environmental law. It was kind of the foundational one. Basically in the 1960s, these federal departments and then also state departments were just running highways and interstates just all over the place. And uh there were some bad impacts, and people realized that there needs to be a framework to kind of disclose these risks to the public at the very minimum. And so NEPA exists, uh that's the National Environmental Policy Act um signed into law in 1970. That law exists primarily as a way to basically disclose to the public what the risks would be. And so I've used this example before, and it's a little bit silly, but but bear with me here. So if I wanted to go into the middle of the Everglades in Florida and I wanted to open an open pit tire burning operation for whatever reason, I just want to I just want to light some tires on fire in the middle of the Everglades. You would obviously run into a lot of other laws, but from a NEPA standpoint, NEPA says you have to disclose the impact. So if I'm if I'm using federal land for that and I want to do that, then NEPA doesn't care what the impacts are in a way. If you go through this full NEPA review process for what we call a significant environmental impact and you've disclosed it, then NEPA doesn't care after that point as long as you've disclosed it. So I start with that example because it's based on environmental significance. And the full-blown um, you know, NEPA review process, um, you know, your environmental impact assessment, um, is going to be or sorry, environmental impact study in EIS is going to be based on crossing that significance threshold. So it has to have a significant impact on the environment. And sometimes that term is really well defined and sometimes it's open to interpretation. And so in SpaceX's example, and this is, I think it's why it's actually really patently absurd, is that this Starship project above what they had approved before, which was for you know four or five, you know, much smaller Falcon 9 launches, the Falcon rocket being uh has turned into a very reliable launch vehicle. They turned it into what they have now, which is you know, construction and launch of test vehicles with explosions expected on a fairly regular basis. The argument starting back in September of 2021, when the original draft statement came out, was that they were using a lower process below the EIS process. And that's only available if the net environmental impact is going to be below significant. And so just kind of on its face, if you look at the rocket itself, and you know, as you mentioned, it's the biggest rocket in history, right? And being able to light that off and for that to have been approved under a pretext that it was a not significant environmental impact is just it's simply laughable on its face. And that's just kind of from a what words mean standpoint, like what does significant mean?
SPEAKER_01Am I right that other rockets um are not approved under this framework and are generally held to a higher standard?
SPEAKER_00So it's it's a little more complicated than that because, for example, the Kennedy Space Center has kind of an overarching EIS that they update on some frequency that and so for individual projects within NASA, they will use this lower environmental assessment program to authorize them. But yes, generally speaking, if you were to be building a launch site from scratch, yeah. I mean, like that's the example that I gave. And for people who weren't paying attention back then, that the reason I actually got interested in Starbase in the first place, I come originally from an oil and gas background. I moved to Texas in in 2015. And I mean, I worked in oil, and so I'm a little bit, I have maybe a little bit more nuanced of a view than a lot of other people that are kind of as progressive as I am. But but I spent a lot of time basically, this is while I was working in industry, writing, you know, anonymous comments to different federal approvals of LNG terminals and some of these condensate uh production and and because Texas has this just beautiful coast that's kind of really just it's it's kind of it's it's wild land. And so I I was really concerned with um you know oil and gas kind of encroaching on our last, you know, virgin coastlands that are just really kind of wonderful and and really underrated. Um and so I got involved with SpaceX because part of this assessment was not only the rocket launches, but they actually were like, we're gonna build a 250 megawatt power plant, we're gonna build a LNG uh processing unit, we're gonna build a gas plant. And this was on top of the rocket stuff. And so I made the observation that a power plant of that size, standalone, would itself, by itself, be an EIS project, would be a significant environmental impact. And they ended up dropping the kind of natural gas production type stuff eventually. But that's the reason I started writing about it. And so it's just people want to, you know, try to try to rules lawyer, um, especially people who haven't don't understand how environmental programs work. They they try to, you know, do gotchas on on things I've written. But at the end of the day, I mean, what I guess what I'm getting at is that this launch site was obviously a significant environmental impact from the get-go. And that's kind of where all these failures came from. So we talk about things like the impacts in the surrounding area not being disclosed properly. That's as a consequence of them doing this review. And when you do the review, you're supposed to say, what are the impacts going to be? And then we discuss them realistically. But what you it was pretty obvious from looking at all the different communications and documents I've I've I've looked at was that they were gaming to write the impacts in a way that they would come just below this environmental significance threshold. And what it does is it creates a situation for you to outline in your maps less area that would be impacted by debris. You minimize these impacts because you want to pass it through. And then when you launch and those impacts are visceral and immediate and obviously outside of the bounds, that even the FAA, who's been kind of a rubber stamp organization for not only space but for a lot of other industries, you see that failure and they they have to do some of these reassessments because even they, they've got lawyers, you know, that are working for them that are very smart and are saying, we can get away with a lot, but we can't get away with this much. And so I think that's what you're seeing right now is that they are doing the paperwork needed to be able to reapprove it. And, you know, kind of a disaster scenario for SpaceX were would be for them to come back and say, whoops, this is actually a significant project and we need to start an EIS again, um, because you'd be talking about years of review before you'd ever be able to test or launch a rocket again.
SPEAKER_01And when we look at what is going to be necessary for SpaceX to launch Starship again, you know, obviously you've talked about the FAA. Are there other agencies that will need to give approval for this as well, like environmental agencies and things like that, or is it really just up to the FAA at the end of the day?
SPEAKER_00Yeah, so the FAA is the they they make a lot of the decisions, but NEPA and then their own policies require them to coordinate with state and federal agencies. I have had no shortage of very not nice words about the FAA basically being cronies. I was actually shocked because what they did is they wrote and requested the Fish and Wildlife Service, who does on land reviews and approvals under section seven of the Endangered Species Act. They actually requested that Fish and Wildlife Service reopen the biological opinion and review they had finished in June of last year. And that was at FAA's discretion. So that was really interesting because that is something that on its own is going to take months and months. And it's really fascinating that Musk was tweeting up a storm, right, saying, you know, we're ready to launch any day, we're waiting for the FAA. But but they had known well beforehand that the Fish and Wildlife Service was going to have to redo this approval. I don't think the Fish and Wildlife Service uh does a lot of really great work, but in some of these Endangered Species Act reviews, they tend to not deny uh requests that have gone through agencies, just as a matter of course. It's been, you know, in the last decade, it's been like under a half a percent of formal ESA reviews have been basically rejected for jeopardizing a species. And so I don't think it's gonna be a showstopper by itself, but it will delay this for many multiple months. And even more so because this ESA evaluation and because their decision to do a programmatic re-review of their NEPA approval, it's a tacit admission by the FAA that uh I was right. So it's I mean, they they're basically saying like we the impacts have to be re-reviewed, and and that was a consequence of them not doing a very good review in the first place. So so my guess would be that this delays it several months. I think it'll proceed, but it's certainly there's certainly a real risk, especially now, kind of post-Ronan Farrow interview, that there's all of a sudden this skepticism on like, wait, why is Musk being able to tell federal agencies what to do? And I don't think that's a great time for this Starship launch for all these questions to start being asked, because then you will have to ask the question, why is SpaceX able to kind of bully the FAA around?
SPEAKER_01Yeah, I I I want to circle back to that point in a little while before we end off our conversation. But so, you know, when you talk about the timeline that we're looking at here, right, for another Starship launch, you know, there was a story, I believe it was last week, after the FAA had put out that SpaceX needs to do, I believe it was 63 corrective measures before it will be able to launch again. There was a story suggesting that in the next month or two, the FAA could approve a further launch. And so when we're actually looking at like a launch window, does it sound realistic that it will be in the next month or two just based on the FAA approval, or will this take longer based on, you know, an environmental species review or things like that before another starship is going to be able to get into the air?
SPEAKER_00Well, I think this is this is where the FAA kind of does disservice. And I think this is the area where Musk really excels in, is that when they were talking about next month, they were talking about the safety review, right? So you for your flight systems to make sure that there's not kind of the failures with the launch itself. I think based on the reporting and the commentary we saw, that it's certainly reasonable to think that that safety review component would be done by then. But because the license itself by statute uh is predicated on making sure that all those environmental requirements that were listed in that NEPA document that SpaceX seems to have not read several times, which is funny because there's things that they were basically committed to do that they have not done. But, you know, just the the fact of the matter is is that Endangered Species Act I review I brought up, FAA didn't say it as explicitly as they should, but they put out a statement last week that is like, no, we have to do these other environmental actions beforehand. And, you know, I will eat my hat if, you know, a formal re-review by the Fish and Wildlife Service, who has not been pleased with SpaceX's behaviors historically and recently. There was a great piece in Bloomberg. They they got a great uh FOIA dump from officials who were just kind of aghast at it. The idea that the Fish and Wildlife Service would even have the resources to speed through a compliant and correct Endangered Species Act review, it's ludicrous. So, you know, technically that next month was correct on the safety front, but a lot of things goes into them issuing a license, and there there are going to be environmental holdups. And that one is, you know, maybe even smaller than the one I've brought up recently, uh, which I've actually been talking about as a potential risk for a while, which is that, you know, they installed a water, sound, and heat suppression system, and that water is going, you know, directly off of cooling the rocket and is being directly discharged into a wetland or waters of the United States, which is pretty obviously a violation of the Clean Water Act and they're not allowed to do it. It's not just like we'll apply for a permit and you know just do what we're doing in the interim. The Clean Water Act, which the state of Texas is responsible for kind of day-to-day compliance with, like the Clean Water Act says you can't do that and they're doing it. And so I don't know what's going to happen with that, but if someone takes a serious review and actually looks at case law and actually looks at just you know kind of the basics of the Clean Water Act, like that that activity, that water runoff from cooling the engine is an industrial, you know, wastewater and it can't be discharged into waters of the United States. It's this isn't like a new law. I mean, this is straight up from the 1970s Clean Water Act. If they actually do a serious review of that, there's no way they can green light it. Best case scenario for SpaceX is that TCEQ, that's uh Texas' environmental regulator and the EPA just doesn't say anything because if they do a serious review of it, what what they're doing with this water discharge is patently unleash illegal and everyone knows it. But TCQ is taking their sweet time on it.
SPEAKER_01Yeah, of course. And you know, just to kind of uh explain what you're talking about there, you know, one of the things that was really notable about the SpaceX launch site there in Texas is that it didn't have a water suppression system and it didn't have a flame trench, which are features that are very common on launch platforms, not just in the United States, but in Russia and China and other places as well. They at least have one, but they often have both. And SpaceX's launch site had neither of those things, which is part of the reason that you saw the launch pad kind of get utterly destroyed when this rocket launched, and of course then was flinging concrete everywhere and things like that. And so SpaceX is adding this water deluge system to you know try to suppress the impacts of a future launch. But as you say, they haven't received the approval to actually, you know, have that water be drained off into this, especially this natural kind of wildlife area that that is protected. And I believe you wrote that earlier this year, the Texas Commission on Environmental Quality already found that SpaceX was in violation of the Clean Water Act in February 2023. Is that right?
SPEAKER_00Yeah, uh that's and that's man, that's super fascinating to me because that approval, right? So the what they got dinged for in February of this year was for non-compliance with uh stormwater requirements. So that's different than like a direct wastewater treatment plant or industrial discharge. If you have a bunch of industrial equipment outside and rainwater washes over it, um, it can incidentally contact chemicals on the process, stuff like oil drips from cars parked, all that stuff. That is covered under a separate but parallel portion of the Clean Water Act uh for stormwater prevention. And what's fascinating is that the NEPA approval noted that they needed to get it and they should have had it years ago, and they just didn't. And the thing about this is, you know, I talked about the deluge system, and that's a complicated permitting process. Like the permitting process for getting the stormwater approved, it's a general permit. Once you submit via an electronic record system to the state you reside in, you know, you're authorized almost immediately. And you can get stormwater permits that are authorized immediately in every state because it's this general permit that everyone has to do. And it's just like I understand in a way, like them not going for the deluge permit and just saying, like, well, you know, I dare you to stop us. But like not getting a stormwater permit is just it's incompetence and just like really dumb incompetence. I found that really super fascinating because the state of Texas has requirements that if you're out of compliance with certain laws, that future investigations and future concessions for you know expedited permitting and stuff like that have to be impacted. And so you're shooting yourself in the foot. And I think that's kind of what's just so maddening about like, you know, musk-run companies. It's like there is no the amount of man hours and time to get that simple stormwater, you know, permit is so simple. And they're just like, we're not gonna do it. For a company this big, I've never seen anything like it. You know, you take the worst behaved major oil company or chemical company or any other manufacturer, and one of the first things they do after they build their site is if it's subject to stormwater permitting, they're gonna get a permit because it's easy. That whole dynamic is just super. I've no, I don't even know how to describe it because I've been in industry and I've been a regulator, and I just I almost can't believe that they are that. I want to say they're foolish, but it's almost like it's just like stubborn, stubbornness that kind of permeates the entire musk ink across all his companies.
SPEAKER_01It's almost like a dare, you know, to try to come after us, right? This obvious thing that we should be getting that we're just not gonna bother with. And if you really have a problem with it, try to stop us, basically, right? Um I want to ask you about a couple other things before we pivot back to like the kind of wider questions here. And that's, you know, the FAA was sued by environmental groups in May. SpaceX joined that lawsuit later as a result of kind of what happened at this launch site and the environmental impacts that came of it. And when you kind of analyzed the earlier, you know, environmental submissions for this launch site, you found that they were based on kind of thrust that was 20% lower than the rocket that was actually launched. And it was known ahead of time that you know this rocket that they were launching was going to be greater than the models that they were using and had submitted environmental impacts based on. And so what do you make of what's going to happen there? Like, will this lawsuit mean anything? And why were they not forced to like update their models when it was very clear that they were not using ones that were accurate for what they were actually launching?
SPEAKER_00That's a really good question. And I don't know. It feels like stubbornness. On the lawsuit itself, I think there's two ways to look at it. And one is that I think FAA's decision to, you know, maybe be a little bit more aggressive than they could have gotten away with in terms of requiring additional review this past week, um, the statement they put out, there's probably some influence that the existence of that lawsuit is having on that, right? They want to make sure before this goes to litigation, we we want to show we're being good actors. So I think that probably played a role. It is important that even though I think the case itself has strong technical merits, the federal judiciary has historically, and this isn't just a liberal versus conservative court. This is fairly true, even with the you know, so-called woke uh Ninth Circuit, is that the federal judiciary tends to defer by default for better or for worse with agency discretion, right? So if you're if you're a jurist, I mean, I know being a federal jurist tends to the territory is like you know a lot about everything, but I think even there, they're a little bit humbler in that they say, I'm not the EPA. I haven't studied these laws. And so they say, well, if EPA gave the blessing or the state agency gave the blessing, or shoot, I mean the FAA, right? Your job, your function for existence is to comply with these regulations, jurisprudence here has been almost overwhelmingly to defer to the agencies. So that's a big handicap going in. And so I think if you have something that's just hilariously wrong, especially after you've seen the impacts that we saw, would be just really great fodder for a judge just say, okay, this is actually an example of we tend to side with agencies for, you know, because that's just what we do. But I think that may be one example where if it's like so absurd that you know the judge would actually say, no, we need to go and you need to go back and do an EIS, something like that.
SPEAKER_01You know, it's no surprise to hear that the judiciary, you know, isn't very hard on on these agencies. I talked earlier about how the FAA has uh expected 63 corrective actions of SpaceX in order to allow it to launch again. Is there anything that really stands out in those 63 actions that might be kind of major, or is it pretty standard stuff?
SPEAKER_00I mean, I would be going way over my skis in terms of expertise. There are a lot of very silly and not knowledgeable SpaceX fans, but there are lots of very smart ones. So I think I'd be probably getting too in over my skis because those corrective actions mostly had to do with protecting the public from uh the rocket launch itself instead of those externalities. I mean, just kind of looking at it, the length of time it took them to do the review and the fact they kind of got into the weeds of these control systems, nothing really stands out to me. I mean, I don't think you know, when we talk about like audits and and corrective actions for things that go wrong, um, you know, I've I have a background in in process safety as well. You know, one action item can be more difficult than. Than the other 62 combined. So, unless I have more detail, it looks pretty comprehensive in scope. And so I think Musk posted a uh Excel screenshot of them, and it it doesn't look entirely unreasonable to me, I guess. I'll leave it at that.
SPEAKER_01Yeah, no, that's fair. So, you know, kind of zooming out again, we've talked specifically about the SpaceX case. You know, one of the things that has really stood out in the comments that you've been making is how Elon Musk and his companies in particular tend to avoid these regulations, tend to not care about the regulations that uh governments and agencies are expected to apply and that these companies are really expected to follow. And of course, that does have consequences, but it seems like in many cases, judges and and agencies are not holding these companies to account when they do breach these rules. And so what is the consequence of not actually enforcing these rules on these companies and consistently allowing them to kind of skirt these regulations and get away with it?
SPEAKER_00I think my concern is, and this is actually going to be hopping entirely away from the regulatory sector, is that I don't know if you've seen, there's been a bunch of really smart pieces where people have noticed that other tech CEOs are starting to talk like Elon Musk.
SPEAKER_01Yeah, absolutely.
SPEAKER_00So given that, it's not surprising, right? If you look at how much market capitalization, the the share price performance of Tesla, it's not surprising you would see people try to ape him, right? I look at that, and my concern is that we talk about Uber, we talk about Amazon, um, we we talk about some of the union busting by Starbucks in particular, has just been silly. And so it's not like it doesn't happen before, but but they still like right. So if an agency comes in and and yells at Starbucks, they'll still go through their legal department and they'll say, you know, they'll they'll try to make an argument why this wasn't a problem, but at least they like try to comply with the rule. Well, I don't want to say that because Starbucks in particular absolutely has not. So I don't know if it's the best example, but they at least like most companies like try to at least like pretend like they're in compliance. And my concern is that if we're talking about aping musk, that that it kind of rolls over into the regulatory sphere, that instead of having these conversations that are, you know, kind of at least like polite and discussing the actual topics and laws at hand, that you just have a CEO that becomes, you know, memes himself into popularity on social media and then just says, you know, it's a it's a conspiracy against my companies. And Musk has already gone down that road. And my concern when it comes to that is that there are others who will follow in his footsteps, which is it's a different kind of risk to the people's faith in regulatory systems, which is already kind of fractured. And uh, you know, not to go back to Obama too much, but I would point to the breakups of those Occupy Wall Street events, you know, following the great financial crisis, and then the lack of enforcement for, you know, kind of the head honchos of companies that destroyed our economy. I think you can kind of point back to that as maybe a turning point in that. And then Musk is kind of leading the charge on taking it to a new level of absurdity when it comes to just I don't care what the rules say.
SPEAKER_01Yeah. And then you also have the difficulty, I guess, where people like Elon Musk and many of these tech companies are fabulously wealthy, have a ton of capital that they can use to push back on any attempts to make them follow these rules. Whereas the regulatory state and these agencies have been consistently cut over time, you know, do not have the necessary staff to really go through even what they were supposed to be dealing with, let alone any additional requirements that would be placed on them. So if you do have this kind of corporate sector that is increasingly learning from someone like Elon Musk and trying to further challenge rules and regulations that exist to protect the public, then all of a sudden, already like the regulatory system is not properly resourced to be able to deal with that. But then that becomes even more difficult and it's easier to get away with it because you know the government and the regulators and the agencies have been so kind of slashed over the past number of decades.
SPEAKER_00Right. And it's not just a headcount situation. I mean, that's certainly part of it. It's really just this fear, and this is not exclusive to Musk. And and I I I think he's I think he's kind of unique in how much attention he's brought to it and and kind of him, as I mentioned, you know, trailblazing. It's this, there's actually a uh pretty good case to be made by kind of the libertarian right, and and I hate to say it, but you know, a lot of these regulations in practice, you know, especially I've done work in in California is the perfect example because, you know, people always complain about the regulatory state. There's absolutely some truth. You know, the actual enforcement of regulations exists as kind of this tax, right? It's not just the companies treating it this way, it's that the regulators treat it that way. They're like, well, here's your fine, we'll move on. We're writing you a check. This is your this is your tax. And so there's a really good case that that's how we've moved towards. And I would rather see less of that and more of putting executives in jail who actually blatantly disregard the rules and actually punishing companies by doing things like threatening to debar them from doing business in the United States. I would rather see less kind of nitty-gritty paperwork violations. Not not to say those rules aren't important in some ways, but I would rather see less of that and more of you go after the people that have systematic regulatory failures that are actually causing significant impacts to you know human health and the environment, and you go after them hard. I would rather see that, that kind of type of enforcement well predates Musk. So it's not just him, but that's that's something that I would, as someone who's been in industry and who's been a regulator, I would rather see more of that kind of action than kind of this taxing scheme, which is how it actually works out in practice a lot of the times.
SPEAKER_01Yeah, even even as someone who was not in industry, I would prefer to see that as well. You know, for these people to actually have consequences for the actions that they take instead of just having to pay a little fine and get away with whatever, right? Because they have more money than they could ever know what to do with. You talked earlier about the Ronan Pharaoh piece and also how, you know, governments look at the fact that Elon Musk's companies and Tesla in particular is incredibly large. You know, it's worth much more than it should realistically be worth for cars that it makes and things like that because of the message that it has sold, and that has made it really important to kind of the financial markets and people's investments to the degree that if it was the collapse, it wouldn't just take down Elon Musk, but there would be a lot more people affected by that. And so I wonder what you think about the different um aspects of what kind of keeps Elon Musk from feeling this kind of regulatory scrutiny and the power that he has accumulated to be able to push these things off, right? Like when you have a private company that is solely responsible for American launches to the International Space Station is one of the main providers of launches for satellites. And now it's Starlink is kind of essential for military campaigns for like the Pentagon and things like that, you know, which we've seen in the recent kind of Ukraine, you know, reporting on what was going on on you in Ukraine. What do you make of how much more difficult that makes it to hold someone like him to account?
SPEAKER_00I think it makes, I mean, it obviously makes it a lot more difficult. And this is kind of your uh my my concern is, you know, I talked about oligarchy and and this is really, you know, kind of the end game of of capitalism, right? It's been discussed, right? And so, you know, people who are cheerleaders for, you know, unfettered capitalism will be like, well, this is crony capitalism, but really, you know, the end game of capitalism as people, you know, amass resources and as companies merge and and we we have this huge focus on a on a small number of companies being responsible so much of our economy, you as a consequence, you have just explicit capture of the state. And so that's I would say that's a natural consequence of you know amassing capital in a an increasingly small number of people's hands. On a basic level, that's super important. But I think when it comes to government action, I think the Ronan Farrow piece was so important, not because it actually there were really no like bombshell revelations, there were a few of really uh surprising quotes. Is that the consequence of that is that he put it together in a way where people are like, holy shit, this guy controls so much and has so much power, not just soft power, but like hard power. And I think when it comes to regulators deciding to actually do something and put a stop to something, I think it's best to discuss it in terms of what I call bureaucratic inertia, which it's easier, and this is not just true for bureaucracies, this is kind of a human behavior, right? Where it's easier to allow the status quo to go on until the easier decision is to put a stop to it. So you keep rubber stamping stuff and rubber stamping stuff because it's easier just to keep if shit ain't broke, we're gonna we're not gonna fix it, right? But then when it becomes so personally embarrassing, or you're the person making that decision at the regulatory agency and you say, Oh shit, if I sign off on this, I'm gonna get called in front of Congress if something goes wrong. And so I don't know where that, you know, inflection point is, but it exists, and I truly believe that Musk will keep pushing it until he crosses that line. And I think it will only be obvious in retrospect, but it would not surprise me if this Pharaoh piece, you know, kind of tying together how much influence he has, does all of a sudden people in the DOD and NASA and FAA and the EPA say, if we allow this and something bad happens, like not only am I gonna get called in front of Congress, but then we'll be able to point out to say, hey, look, everyone was saying this beforehand. How could you have not known? If I'm gonna speculate, that's kind of where I think the importance of that comes in. And you see it, this is like it's the whole history of regulatory action, right? The Clean Water Act only exists because people have been, you know, noting obviously uh water pollution for years. Um, and in fact, funny enough, TCEQ was a spin-off of the Texas Railroad Commission, and they were actually one of the most aggressive environmental regulators. They actually, the state of Texas, because there was so much dumping of oil in basically waterways, Texas was actually probably the most progressive and innovative regulator of all time when they first started up. And this is like in the in the in the early 1900s, but it's really funny to think about that you have these cases, and and going back to the Clean Water Act, kind of the inciting incident people talk about is that the Cuyahoga River that runs through Cleveland was catching on fire on a regular basis. And so when I talk about the visceral impact, right? So I talk about the concrete, you know, and then the scorched bird eggs and whatever, regulatory action happens when there's good coverage by the media, there's a visceral emotional connection to it, and there's an obvious person or cause you can point at. So I think that Musk for himself will at some point cross that Rubicon. I don't know if we're there yet, but I it certainly feels it feels close, but I've been wrong before.
SPEAKER_01Yeah, I I completely agree with what you're saying. I've been feeling that for a while. Like, what is the moment? Like what finally pushes this over the edge where it becomes untenable to keep allowing Musk to get away with these things, especially as kind of the reality of who he is becomes much more apparent, right? And I agree that the Ronan Farrow piece was important for that, even though there wasn't a whole ton of new things in there for people who follow Musk closely, it still kind of presents it in a way that is very revelatory for a lot of people who haven't been following him in that way. And so I want to close with one more question because we've been talking a lot about environmental regulations throughout this conversation, right? Related to Elon Musk, but also much more broadly. And before we started recording, you were talking about the importance of considering climate change in in light of all of these things, right? Because it's not just that we have this kind of static environment that is staying the same, but we're seeing these kind of rapid changes in weather systems and what we kind of kind of expect from our environment as climate change accelerates, basically. So how do you see that as playing into this larger conversation around environmental regulations in this moment?
SPEAKER_00You know, it's actually funny because I've I enjoy giving myself brain worms. I've been watching just on occasion some content on like Rumble and just to kind of get how are people talking about climate? And you see it, I think, happening a little bit in that it's this recognition that something is wrong. They have not obviously the you know, these kind of you know, right-wing, crank conspiracy types have not correctly identified the issue. It's it's boring and we've known it forever, right? Which is that we have to we have to decrease carbon emissions. But I think it's going back to that exact same thing we talked about with the river catching on fire, is that climate is super nuanced. Yes, weather patterns from year to year change. But I think it's that point where something happens and it's undeniable. And sadly, with climate in particular, that once it becomes obvious we've maybe gone too far down that road. Um, a lot of these other systems, you talk about things like, you know, lead emissions, right? Within a few decades, it was really obvious that lead was causing, you know, developmental difficulties, was causing death, was causing all sorts of horrible things. And, you know, we've done a tremendous job in cleaning up our air in the United States in particular, even as car ownership has gone up, even as refining capacity has gone up, like a lot of these ambient conditions were systems that could be healed over a kind of more relatively short time span. It feels like that's not possible with climate. And I guess I don't know what we do about it. And kind of as a closing thought going back to market capitalism, I think, I think the thing that freaks me out more than anything is that a couple of years ago in particular, you had a lot of these oil companies that they would say, well, you know, net emissions globally are gonna go down, right? But if you talk to each individual company and you look at them, each of them would say, Well, but our production is going up. So what they're saying is is they're talking out both sides of their mouth because they're saying if your production is going up, and this was even before considering things like carbon capture, you're saying we're just gonna capture more of the market. And that's the fundamental problem with how markets are structured globally and then in the United States, is that if you're a public company, you either grow or you die. So the reason that Tesla has such an extremely high valuation is some of it is uh fantasy thinking, bubble thinking, whatever. But part of it is that Ford and GM stopped growing. And so that's why they trade at such low valuations. And Tesla is well behind them. I don't think they'll ever catch up, but they have this huge multiple put on them because they see growth. And so, kind of going back to the oil companies, we can't, and this is what really frustrates me about climate is that the people that act like it's fake or just against any sort of action whatsoever, they're like, we shouldn't do anything because it's fake. And then a lot of the advocates are like, well, we need to shut all oil down tomorrow. And that's just not possible. This this has to be a 10, 20 year process where we get to, you know, maybe 10 or 20%, you know, a few decades down the line and we'll be ahead of our targets. But that is impossible with how markets are structured. So my fear is the only way really to slowly wind down oil companies without, you know, for example, stopping pharmaceutical production or people being able to fly or things that'll be untenable to the public. It's only possible if you nationalize all oil companies, which I just can't see that happening. That's the part where, you know, I'm not like a strict like anti-capitalist across the board, but I think that shows a real failure is that companies either grow or they die. And what we need is for oil companies to slowly wind down operations, and our market and our economy is simply not set up to do it.
SPEAKER_01Yeah, I I very much agree with that. And I feel a lot of frustration, you know. I mean Canada, right? Seeing how the government's kind of policy on climate change, and this is the case in many Western countries, of course, is basically like how can we put in the right set of incentives to try to nudge the market to do the right thing? And it's like that will never get it done fast enough if we're actually going to like meet the emissions reductions targets that we need to meet in order to address and kind of minimize the worst of climate change. But yeah, it's a huge challenge. And Eric, I really appreciate you coming on the show to talk to us about all of these issues, you know, the SpaceX launch in particular, but also kind of the bigger picture of what this kind of regulatory capture and also kind of regulatory evasion by these major companies actually means for us. So thanks so much for taking the time.
SPEAKER_00Well, thanks for having me and uh anytime.
SPEAKER_01Eric Resch is an environmental expert and the writer behind ESG Hound. I'll include a link to his sub stack in the show notes. Tech Won't Save Us is produced by Eric Wickham and is part of the Harbinger Media Network. And if you want to support the work that goes into making the show every week, you can go to patreon.com slash TechWon't Save Us and become a supporter. Thanks for listening.