Today Chris and Johan are joined by James Van Nostrand, Director at the Center for Energy and Sustainable Development, Professor of Law at West Virginia University and author of The Coal Trap: How West Virginia Was Left Behind in the Clean Energy Revolution. Professor Van Nostrand discusses the political and environmental landscape in West Virginia, a state holding on to their coal mining past and present, even as the world is moving on to renewable energies.
Today Chris and Johan are joined by James Van Nostrand, Director at the Center for Energy and Sustainable Development, Professor of Law at West Virginia University and author of The Coal Trap: How West Virginia Was Left Behind in the Clean Energy Revolution. Professor Van Nostrand discusses the political and environmental landscape in West Virginia, a state holding on to their coal mining past and present, even as the world is moving on to renewable energies.
Transcript
13:42.39
Chrissass
Welcome to insider's guide to energy I'm your host Chris sass and with me as always his co-host Joan Oberg Yohan what's happening today.
13:42.76
Jamie Van Nostrand
Yes.
13:50.86
Johan
Doing good Chris has always been having one eye on cop 27 that kicked off today when we started the and when we record this and quite interesting. Some good interesting news coming out of it how you been.
14:07.27
chrissass
I'm doing really? well. Yeah, absolutely very aware, especially when we've been scheduling guests. We were very aware of when that was because it bumps into a lot of our energy transition guests coming on board as well. Um, interesting to see what's going on today happens to be election day in North America which also will have a policy say um, kind of I think the theme of the day right? Even our interview today. We're going to be leaning towards policy. And how that impacts you and I have been speaking to energy professionals now for a couple of years together regularly and it almost always comes down to policy at some point of what the impact at the energy transition can be or is in my opinion.
14:47.29
Johan
No I totally agree and I think I think it's kind of a common theme throughout the shows. It's kind of the transition to digital. But also how this politics and kind of the both locally but also globally place a fact into this one. it' something that I'm really interested in and we mentioned that in the beginning of the show as well. Pre-show is you have the politics but also something that's very late is the culture around it. You know usually culture is also playing a big role in this one and you know as you know I grew up in a blue color town. So I'm really interested also to hear a little bit about this from today's show maybe a little bit touch on the ah side of the energy. But.
15:26.12
chrissass
Yeah I'm interested to talk about policy and see what other people have that say what's happening. You know what some of the regulations and bills in the Us have done and what the impact is right I think.
15:26.46
Johan
Related anyway.
15:38.36
Johan
Um, a.
15:38.94
chrissass
A lot of time when there's a legislation. There's unintended consequences. There's ah, there's a Goodwill or a knee-jerk reaction that creates some sort of legislation and at the end of the day. The chips don't always fall where people intended them to fall so I'll see if any of that comes up in today's conversation
15:54.25
Johan
But I think it's time for us to stop talking and introducing our guest.
15:59.25
chrissass
Absolutely I'd like to invite James Van Nordstrand to the program James welcome to the program. So I say this every week Johann and I at this moment have an unfair advantage of our audience. We know who you are. We've done our own work and we looked a little bit into your background before we invited you to speak.
16:04.38
Jamie Van Nostrand
Thank you Chris good to be here.
16:19.50
chrissass
But our guests have no idea who you are so let's start by who are you and what do you do.
16:24.59
Jamie Van Nostrand
Um, teach energy and environmental law at West Virginia University I also run a center for energy and sustainable development I've been at Wu for 11 years prior to that I spent 22 years in the energy regulatory sphere. Representing primarily investor own utilities in energy regulatory proceedings in the western United States as I transition into law school teaching I also headed up an environmental NGO based in in New York the pace energy and climate center.
16:53.70
chrissass
So you're teaching in West Virginia and as an American our audience is global. Um I think coal town coal miner's daughter things like that I don't think renewable energy for West Virginia help me get my head around how someone has your role in West Virginia or is it just old school thinking on my part.
17:16.90
Jamie Van Nostrand
It's been a challenge. We're trying to get more renewable energy in West Virginia I think the images you have of West Virginia probably from a lot of movies is really centered around the coal industry I think it's ah it's a source of great. Pride in the states. The legacy of the state. Um I think west virginias think you know we industrialized the United States on the back of the West Virginia Appalachian Coal miners and so it's a source of great pride and that's one of the reasons when I wrote my book. The title is the coal trap. It's how can you. Honor that legacy that culture that source of pride while still you know, moving in this inevitable transition. That's underway positioning ourselves for the future and trying to move away from coal. It's been It's been a challenge.
18:02.87
Johan
So when we're talking about moving away from coal which I think it' it's part of also reading your book and I think all over it. We're not just talking about West Virginia we're talking about you know Poland and we're talking about ah China and a lot of other reason in some places we're also talking about the war on coal which. Which I think this might be a little bit different way of talking about it and gives a different sense of meaning. So where do you come from around in terms of this transition from cold.
18:31.33
Jamie Van Nostrand
I spent a lot of time in the book talking about the war on coal. Um I've been in West Virginia since 2011 so it was during this period when you know natural gas the shale gas revolution being able to extract natural gas from shale horizontal drilling that was a. Was a big game changer. The term was overused but it really fits. It was a real game changer in terms of the energy industry in the United States and it had big implications for the coal industry.
00:03.94
Johan
So we talked a little bit about the transition around this and maybe this is more of a vocabulary thing or the way you position it You mentioned this quite a bit in your book as well and that is the war on coal was it really a war on coal or was it more a normal transition.
00:21.84
chrissass
Power.
00:22.67
Jamie Van Nostrand
I think it was best described as the cold industry's response to the market forces that were happening. Um I said I've been in West Virginia since 2011 so I got here pretty much when the shale gas. Revolution I call it. The revolution started up in terms of being able to extract massive quantities of natural gas at fairly low prices which venus sits on top of the Mar Marcellus Shale which is now the largest gas producing region in the in the country that had huge implications for the coal industry but the war on coal. Was really ah had a lot to do when Obama became president. We had a real focus on climate change a real focus on greenhouse gas emission reductions. Obviously the coal industry at the time generating electricity with coal was the largest producer of greenhouse gases in the electric industry. So in the administration. Decides we're going to tackle greenhouse gases that has implications for the coal industry the epa became very active with endangerment finding and off to the races on terms of regulating greenhouse gas emissions and so the narrative in West Virginia was the war on coal. It was Obama's job-kieling Epa we had billboards up and down I seventy nine welcome to Obama's no-job zone. So it was a way of saying everything would be fine in the coal industry if the Epa would just leave us alone so all the politicians it was.
01:45.32
Jamie Van Nostrand
The governor United States senators congressmen legislators all up and down republican or Democrat it was the narrative it was. It was the war on coal and it's policies in Washington d c that are driving down the coal industry.
01:59.23
chrissass
And so where is that today I mean West Virginia's beautiful country I go there as we talked about in the pre-show to go rafting or to go spend time in the wilderness. It's this gorgeous area but where are those towns that were coal towns today. How are they going to make it through the inevitable. That that seems to be the energy transition. Underway.
02:22.10
Jamie Van Nostrand
It's going to be a challenge I mean the coal producing regions of the state in Southern West virginia Mcdowell Mingo Logan Wyoming counties Boone counties. They've been hit the hardest and if you look at the employment statistics you know over the years those numbers are way down the populations in those. Towns are way down I mean a lot of it was just due to mechanization in the coal industry and in terms of the number of miners went down dramatically even though production in many cases was going up because you just need fewer miners when you mechanize then we moved into mountaintop removal which even needs fewer miners. So that transition was happening in terms of population moving away and now we're down to around 12000 coal miners in the in the state. The probably lowest figure in decades. Um, and those regions are still very hard hit. Um. There's some things. The new federal legislation. The inflation reduction act I think has some programs that are targeted towards those energy communities that have been disproportionately affected by the decline in Fossil Fuel jobs but it's there's a lot of work to do.
03:25.61
chrissass
And so you started by saying that you came from more of a regulatory background and you got in this space. So are you teaching law class is that what you're teaching right now.
03:38.60
Jamie Van Nostrand
Yeah I teach an energy law class and I teach environmental law classes. So and it's really the 2 subjects really converged I think once we had the Massachusetts versus Epa case in April of 2007 that says you know greenhouse gases contribute to climate change. Major source of greenhouse gases was really production of energy and so if you're an energy lawyer you pretty much had to learn some environmental law and vice versa and so I went to Pace University in white plains New York and got my llm. It's an advanced law degree in environmental law and it. More or less transition from being an energy lawyer to an energy and environmental lawyer. So I teach I teach the both subjects and at the law school.
04:19.72
chrissass
And then how much the policy and the law that your students are doing will be impacted by administration change and how much is the inflation reduction act and things like that become a long-term impact kind of like you talked about you know the change from. Cold ah to gas perhaps when the Epa rulings came out.
04:42.87
Jamie Van Nostrand
It's a combination I would I think of regulatory policy type changes and then it's just it's market forces as well advances in technology when you look at the decline in in solar prices between 2010 and 2020 the decline In. And wind prices I mean those were the real driving forces for the demise of the coal industry that plus a lot of cheap and plentiful natural gas I mean those were the drivers and some of it's driven by regulatory policy and statutes and legislation a lot of it's driven just By. Market Forces. You know, just wind developers and solar developers spending a lot of money on R and D research and development making those making those facilities much more efficient and much more productive.
05:23.92
chrissass
But in previous shows we've had Hydrogen experts on and one of the use cases they give for old minds is for storage. So is that taking place for storage for other molecule type fuels and things of that nature in.
05:41.65
Jamie Van Nostrand
Not yet, there's certainly a lot of interest in it with the infrastructure bill that got passed November Twenty one and the inflation reduction act inflation reduction act puts hydrogen and nuclear and carbon capture and sequestration and renewables in many senses on the same.
05:42.30
chrissass
But Virginia.
05:58.91
Jamie Van Nostrand
Footing and then we've got $8000000000 to create regional hydrogen hubs and so West Virginia is definitely in the hunt to try to get one of those lots of talk about the strategic uses of hydrogen where it makes economic and technical sense I think some in West Virginia would use hydrogen much more than maybe warranted and in terms of um, interfering with investing more in renewables which I think is really the long-term solution.
06:27.43
Johan
So how do you? How do you? what? I like about this is if you look at Silicon Valley we'll take Silicon Valley as an example where this shifts his transition. So we started off with some Intel and then it came into software then come into cloud but they reinvented themselves throughout.
06:44.10
Jamie Van Nostrand
Yeah.
06:46.25
Johan
Not being an expert on the us and especially not in West Virginia but there must be a lot of knowledge. No matter what in terms of energy production in terms of energy distribution coming out of the coal industry. So how do you How does this then apply to the transition into to. Renewable energy because at the end of the day. It's producing and distributing energy. Ah so there must be so a great deal of knowledge. Still there that can be capitalized on.
07:14.60
Jamie Van Nostrand
I think there is I mean West Virginia often refers itself as an energy state. My experience is it's more of a coal state because there's been resistance even when the Marcellus Shell play became a big deal. Ah, we didn't have utilities in West Virginia building natural gas plants. Um, they in fact, they doubled down on coal plants the utilities in West Virginia while the shill gas revolution was going on between 2010 and 2020 actually brought 3 economic uneconomic whole plants that were formerly in the competitive wholesale markets into the regulator rate base and so um, that's the one of the themes of my book from the introductory chapter the know the lost decade. It's like this transition was inevitable and.
08:00.74
Johan
Are um.
08:05.57
Jamie Van Nostrand
How do we position ourselves for the next phase and the energy and the energy industry and we didn't at all we just clung to coal and so yeah I think I agree. There's a lot of knowledge about energy in the state and if had we really been an energy state instead of a coal state I think we could have positioned ourselves. Better to take advantage of this clean energy revolution. But in fact, we had failed political leadership that that for the most part denied that and the energy transition was either inevitable or and or necessary and no the coal jobs aren't going anywhere I mean our last our governor was re-elected in 2020 um, on the campaign slogan was Jim justice. He never gave up on coal. That's I mean that's and so it's hard to talk about and of course we had 4 years of Donald Trump he comes to Charleston West Virginia and says the coal jobs are coming back. Jim Justice a guy who made his fortune in the coal industry says the coal jobs are coming back. So it's. Hard to talk about a transition when you've got political leaders who are sending the citizens a different message There's no transition necessary. The coal jobs are coming back Trump says we're going to put a lot of miners back to work I mean I think we see after the Epa was effectively dismantled under Scott Pruitt and in the Trump administration. Coal plants were closing down just as rapidly why because it's market forces. It's cheap and plentiful natural gas. It's renewables the citizens West Virginia were sold a bill of goods with the whole war on coal narrative and blaming all on Obama's job-killing Epa we're talking about overwhelming market forces and political leaders. Just.
09:39.85
Jamie Van Nostrand
Chose to ignore them and chose to tell people what they thought people wanted to hear rather than what they needed to hear and actually help the state manage through this transition.
09:47.18
Johan
Which is which is an interesting part. You mentioned that in the book as well in the the lost decade and it's a bit of a gloom picture. You're pointing or you're kind of painting here in terms of what happened and when most of us and in the industry and also outside of the industry. Saw the. Transition into renewable both on the environmental part but also purely on financials and the economics around it. Ah so maybe what was the reason to the last decade you mentioned some of the politicians but surely it's not a handful There must be a number of things of losing a whole decade. But.
10:09.34
Jamie Van Nostrand
You take.
10:25.40
Johan
Maybe painting the picture a little bit more positive with coming out of this now. Do you see any changes or is the same people going to do this transition in the same way you're going to lose another the decade.
10:34.29
Jamie Van Nostrand
No I mean I think one of the big drivers was what I what I say the coal trap in terms of it being such a source of pride in in the state very popular and it's almost unpatriotic to suggest that we move away from coal. So that's definitely part of the. Part of the reason for this for the you know the failure to basically embrace the transition. No I think we are seeing some positive signs in the last in the last few years at you know at the same time. Our electricity supply is still ninety. One percent coal-fired as of 2021 and so we're not making a whole lot of movement but there has been some movement and I think you know we have the inflation reduction act which got passed in August which potentially provides a lot of benefits for West Virginia we have ah this term called energy communities if they're there. Regions that are disproportionately affected by the decline in the fossil fuel industries you have a coal plant closing down a coal mine closing down you get extra tax incentives to invest in those energy communities that could be a real benefit to West Virginia and I think we're starting to turn the corner. Um, the lost decade really focuses on this is these are the kind of things I think we should have been doing ten years ago that we really lost that period of time we wasted a lot of energy. Um with this whole war on coal narrative and that that effort could have much better been spent positioning us for this transition. But it's underway it's just.
12:01.73
Jamie Van Nostrand
You know it was we knew we knew it was going to happen as early as 2009 really which is what I call the start of the lost decade because that's when shale gas really started taking off driving down wholesale prices putting coal plants out of the money and that's and then that was. And then and then since the later part of the decade then it's renewables right? wind and solar are now more cost competitive than coal. So these are market forces and it's just really a real disservice to West Virginians for the political leaders to not. Step up to it when they themselves I think recognized it but still let's go along with this narrative and blame it all on Washington D c
12:39.29
chrissass
So you're saying that the politics played at hand and you gave ah an alarming statistics and the amount of electricity still produced by coal and I'm assuming that's West Virginia that statistic that that's state I was gonna say.
12:47.82
Jamie Van Nostrand
Yes, race nationwide. It's about 19% nationwide yes exactly
12:53.90
chrissass
The gas transition was the biggest carbon reduction step I thought right and now with energy transition because even the gas transition still produces c o 2 but moving to wind and solar should continue to reduce that um, what.
13:03.86
Jamie Van Nostrand
Correct.
13:09.11
chrissass
Is the liability of 1 state producing that much carbon compared to its neighbor states how is there legal ramifications from still having that much coal being burned and carbon released or is that not a consideration.
13:23.94
Jamie Van Nostrand
Well, there's still the environmental impacts of extracting and burning coal but those are mostly felt by west virginians I think it's um, it's been more of an economic impact when I did the calculation of where our electricity prices went from roughly 2008 to 2020 which bookends. But I call the lost decade our electricity prices on average went up at a rate that's 5 times the national average and so the rest of the country is taking advantage of low-cost natural gas later in the decade they're taking advantage of low cost and cost competitive renewables West Virginia didn't um, we don't take advantage of energy efficiency. So we were. We have the lowest electricity rates in the country in 2008 and as of now there are 18 states that have lower electricity prices. We do. We're still below the national average. But when you look at how fast electricity prices have gone up the fact that the state has continues to claim to coal. Has been very bad for the electric utility rate payers in the state and we're a poor state. We can't afford it.
14:24.67
chrissass
That's where I was going to go isn't the average income in West Virginia fairly low across the United States and so you have more expensive energy so where are the policies.
14:28.98
Jamie Van Nostrand
Um, I think we're still the second lowest in per capita income. Yeah so and they failure the failure for energy efficiency programs means our bills even though our rates are still you know the eighteenth Nineteenth lowest in the country. Our bills are above the national average. Because we don't have any energy efficiency programs the public service commission does not require the utilities to offer extensive energy efficiency programs. So we don't give rate payers the tools to help manage their energy costs. So it's ah it's a double hit in terms of high prices and then high bills. Because we have a bunch of big old leaky houses in West Virginia because they haven't been insulated.
15:05.84
chrissass
But the time for change right? is that taking place now I mean if there's only 12000 miners left. Um I mean that's not a lot of people in an entire state. So have you seen whether the students coming through your classes or whether it's community wise has the culture changed because pop culture has changed right? You can't watch Tv or read or listen to music or whatever not have some sort of climate indication so has that trickled into.
15:30.63
Jamie Van Nostrand
Gifts.
15:38.76
chrissass
Other generations yet in West Virginia
15:38.93
Jamie Van Nostrand
Oh I think I think this generation the students that I'm teaching and a lot of them 2 wo-thirds of the students at w come from West Virginia a lot of these students have cold backgrounds in their family their fathers or grandfathers or uncles I don't hear much you know climate denial I think a lot of them I think. Not only the students. But I think a lot of the population in the state is more is more willing and ready to move on which is the leaders political leaders don't are really holding us back I think but I think the next generation does get it. They want to have opportunities but they want to stay in West Virginia they would they would like to see. More opportunities bring in new businesses different businesses. Clean energy businesses because there's no future in the coal industry. You know, fewer than 12000 miners and there's just not a lot of good prospects. We we run the risk of the brain drain when these students graduate from college or law school. They leave the state because they don't see. A whole lot of opportunity in the state.
16:36.12
chrissass
But who's lobbying or where are the dollars coming to keep these policies in place because if coal isn't in demand nationally and you're feeding your own power plants. You know where are the economics you know politicians will generally follow the economics or the lobbyists. So who's pushing this agenda.
16:55.66
Jamie Van Nostrand
Fossil fuel industry I mean the west coal association has been very effective. They pretty much started the whole war on coal the friends of coal um that they have a fewer resources now than they did just because then you know the number of big coal companies that can they can fund a large. Lobbying organization that has declined but you still have just overwhelming influence of the coal industry in the legislature. Um, and at the national level I mean a lot of people talking to Joe Manchin and shaping his views on energy which you know and to some extent we're talking about cop 27 I mean it's not just. Us energy policy. But what we get across the finish line affects how much the United States can effectively lead on a global level and it's unfortunate that because mansion listens a lot to the American Petroleum Institute he listens a lot to the executives of the coal-fired electric utilities. And so that's been really holding us back in terms of 7 all of the above energy strategy which he likes to talk about. It's still. It's still way too much emphasis on coal and natural gas.
17:58.61
Johan
But if we if we then look at the economics around which I can understand and then you have the inflation reduction acts coming out where there is I haven't read through all the documentation around the ira but there's a lot of money being invested in this transition. Which means that you there's money up for grabs. So how do you think this will affect because if a politician follows the money suddenly there is money in Washington he can get and he can actually even invest that in into West Virginia is that happening or is it still. I don't get it when there's money now on the table for the renewable transition. Why is not but they should jump for it Europe when as soon as that they had it some of the poor areas Italy Spain Portugal they just ran for the money and took it right away and did lot of good things.
18:50.19
Jamie Van Nostrand
There's a lot of money on the table and I think the energy communities if you look at a map of the energy communities are like brown fields and then communities with high unemployment and communities are proportionately hit by fossil fuel the decline in the fossil fuel industry almost the entire state of West Virginia qualifies as an energy community. So that's. That's a 10% kicker for your investment and your free tax incentives to invest in West Virginia and I think senator manchion has been pretty good about you know, touting these things that are there for West Virginians one of the things I've been talking about more recently is we don't have the policies at the state level. That are necessarily embracing that and leveraging that we have ah a governor who's a coal baron. He made his billion dollars in the coal industry. We have the public service commission which regulates our utilities of a current commission on the public service commission is the former president of the West Virginia coal association the chairman a former lobbyist for the coil oil and gas industry and a lobbyist for the electric utilities. So we don't the burn the burn the coal so we have the policies of the public service commission are actually requiring the utilities to continue to operate and burn coal at the coal plants even when it's not. In the best interests of the rate payers even when they were lower There's lower cost power available on the market so you have all these signals coming out of Washington Invest in West Virginia energy communities renewable energy but at the state level where are those electrons going to go because we have the public service commission telling our 2 largest utilities.
20:22.60
Jamie Van Nostrand
We want you to keep running the coal plants at their historical capacity factors to stop backing them down and replacing them with lower cost purchases on the market. We want you to keep running them at historical capacity factors. It's insane. I've never seen anything like it in all my 40 years in the energy industry I've never seen anything like it where a commission is telling the utilities to do something That's not an economic interest of the ratepayers. But that's what's going on here. So while Washington is sending these signals invest in West Virginia the state is sending the signals. Well there's no room for those green electrons produced by that wind farm or that solar array because the utilities are going to keep burning coal because the public service commission's telling them to do that with the governor's blessing.
21:04.33
chrissass
That I think it's interesting. 1 thing I want to ask about um in in your response you said the hydrocarbon industry and you threw oil and gas in. Is lobbyists against this. But your example was all clearly coal and state-wide because I think there's a lot of folks that are pro energy transition but understand that it might be really hard to get rid of hydrocarbons totally today and so. I don't know that in your answer and this is just from what you said that I heard that gas oil. Although you know part of you know hydrocarbons were the exact culprits that. Maybe they are but in a lobbying I don't see why they'd be lobbying for coal right? I mean that they are making transitions. There's still going to be uses in certain circumstances for hydrocarbons for some period of time unless you want the economy to stop in the way of living that we're comfortable, comfortable with to go away overnight. Um.
21:53.72
Jamie Van Nostrand
Um, yes.
22:03.77
chrissass
But I don't know that's true about coal right? I mean I don't know is there is there a use case that I don't understand that we still need coal in the future that that the other hydrocarbons aren't covering.
22:16.51
Jamie Van Nostrand
No I mean there's um I mean you have the use of met coal to make steel's and that's one of those industries where you know where there are substitutes if you're using coal that generate electricity. There are substitutes. We use renewable zero carbon substitutes or even nuclear but 0 carbon substitutes. There are some uses of coal for which there aren't substitutes and that's where you need to focus on that's where you deploy the hydrogen or you deploy the carbon capture and sequestration technology. There's still is too much talk about hydrogen and carbon capture sequestration as a way of extending the lives of coal plants. And that's where the concern is that there's going to still be a lot of just uneconomic foolish investments because we need to be very strategic about where we deploy hydrogen where we think about carbon capture and sequestration and it has to be in those areas where we can't substitute non-zero carbon sources for it. But there's going to be ah, there's you know, senator manchion just about a month ago says we're going to have an eighteen hundred Megawatt um combined cycle combustion turbine generating plant burning natural gas generate electricity and it's going to have carbon capture and sequestration. Well why But well because they get an $85 per ton tax credit for 12 years and that plant might be economical for 12 years depending upon where natural gas prices go and where wholesale power prices. Go I suspect that plant's not going to be economical when the $85 per ton payment for capturing and sequestering the carbon disappears and so isn't that money better spent just.
23:50.10
Jamie Van Nostrand
You know, investing in battery storage technology or renewables or hydrogen this strategic deployment of the lower carbon resources hydrogen where we were we don't have better substitutes and I think there're better substitutes better ways of generating electricity than continue to rely on coal or natural gas.
24:08.56
Johan
Isn't this one of the problems we've seen this in the on the show before with other guests where you have short term versus long-term strategy thinking. So okay, it might be the best thing to do actually start. Taking the hit and doing the transition because in 12 years or 10 years Whatever that subsidies is gone. It will pay off but very few including corporates maybe including our consumers and especially politicians will not take that decision. So how does that work and not being in an American. How does that work on a state level who decides for the long-term strategic decisions for your energy policies because energy is not just the lights here. It's it has to do with national security. It has to do with so many things it plays around. Maybe that's a problem.
24:53.22
Jamie Van Nostrand
And.
25:00.25
Jamie Van Nostrand
It's a big problem in in West Virginia I mean um, my background having that spent the 5 years with the New York public service commission and then trying utility cases in front of 10 different commissions. Um, the state utility commissions have a lot of authority and a lot in terms of shaping.
25:09.72
chrissass
Perfect.
25:18.23
Jamie Van Nostrand
Signals that they send to utilities in terms of what we want you to invest in. Do. Do we have a rigorous integrated resource planning process where we expect you to acquire a portfolio of resources that results in the lowest cost to customers over time. That's very important you want the utilities to really sharpen their pencils and say hey. Need to close down this coal plant early and replace it with wind and solar and battery storage technology or maybe in maybe natural gas in the short term. We don't have that in in West Virginia and all the other states that I'm familiar with more of ah a central energy planning or rigorous. Planning process required by the utility commission. So you're making sure the utilities are managing their resource in a way that's going to hold cost down for customers and that's sorely missing in West Virginia because we've been going down this coal path for the last ten years unnecessarily and that's caused a huge variance in terms of what rate payers are paying now versus what they would be paying had there been a rigorous integrated resource planning process and had utilities diversified into energy efficiency natural gas wind and solar.
26:28.97
chrissass
How does this change you know talking about it being frustrated about it I can hear the emotion when you speak and the passion about the situation. It seems to be changing elsewhere in the United States so it seems like you're a pocket or an anomaly. Across the United States is that a reasonable perception.
26:49.86
Jamie Van Nostrand
Yeah I think so I mean Wyoming is also fighting pretty hard to keep their coal plants open Wyoming is a number 1 coal producing state in the country West Virginia is number 2 I mean there have been some positive changes I think in just in the last three years 2020 the legislature the legislature is getting it I think you know a big driver in terms of the decarbonization. The energy industry are the job creators. The large employers who have aggressive corporate sustainability goals as our economic development folks in West Virginia they meet with them. These job creators and they so and the job creators say well can we get access to renewable energy in West Virginia because we've got this goal that says we're going to be 100 % renewable by 2030 or 2040 how how's it going to work out for us and I said well we're 91% coal-fired. So not so much. No by the way our electricity prices have gone up at 5 times a national average over the last ten or twelve years but our legislators legislature is starting to hear that and so in 2020 they passed a bill that said we can now have third party power purchase agreements for solar arrays right? So the folks want to install rooftop solar. Don't have to pay those upfront cost. You can finance them through a power purchase agreement that was illegal prior to 2020 2021 they passed another bill that gave the utilities the authority to develop renewable energy programs. You could you could you could develop fifty Megawatts solar arrays tranches of fifty Megawatts and make those available for these large customers who want access to renewable energy and then just about a month and a half ago we had Berkshire Hathaway
28:20.60
Jamie Van Nostrand
Um, Berkshaway renewables saying we will build a two hundred Megawatt renewable solar array with battery storage basically an industrial park a micro-grid and the legislature had to basically had to pass a bill to carve that out from Psc Jurisdiction basically what Berkshi Hathway can do whatever they want within that micro-grid. With their two hundred Megawatts solar array and battery storage technology. So there's going to be precision cast parts and other Berkkeshi Hathway company that locate there but the legislature stepped up and said what's it going to take to get bekes rathway to come to the state. Well if you're going to have to give him a micro-grid where the pse can't get its fingers on it and mess it up and so the legislature responded to that. So. They're getting the message because they know we've got we have to attract those jobs and the job creators are demanding renewable energy and low cost energy. But in my mind that to some extent that just highlights. The real problem is why does berkshire hathaway demand that it be that it that it. Be not regular, but by the public service commission that kind sort of highlights. The real problem because they have a lot of authority. They're really driving the energy policy and it's being driven in a very bad way for the rate pairs.
29:29.58
Johan
Yeah, it's it sounds like it's ah it's quite of a journey. 1 thing I have to go back to West Virginia as you know when we so when we start looking at any gene in in. In anything in production. You have natural resources. So of course in in Virginia if I understand you correctly you have the coal in the ground you have the gas if the transition or let's say when the transition that we like to talk on this show. How is best West Virginia then positioned for renewable is it a. Is it is it a lot of sun is a lot of wind. Can you build this or is that also a kind of an obstacle in order for making this transition happen.
30:10.71
Jamie Van Nostrand
I mean our sunlight isn't great, but you look at the surrounding states we get. We get as much sun as Pennsylvania and Ohio and Kentucky and Virginia um, and so that's not an issue and as a as technology has improved for solar. That's not really a ah barrier I don't think and when we've already got. Six hundred Megawatts of windfire generation in the state due to renewable energy policy of the surrounding states. You can put your wind turbines in West Virginia and still get credits in the wholesale market for the renewable energy aspects lots of good but wind potential in West Virginia um it's just you know the policies. State policies don't really um, embrace that to some extent There's still this zerosum game that says well every electron that's generated with wind or solar is electron. That's not generated by coal. But I think there has been there is a lot more interest because I think the solar is nwind to a lesser stand is pretty much untapped potential and so there's a lot of. Lot of interest in coming to West Virginia and particularly with the incentives from the inflation reduction act. It's we need to have you know stronger policies that encourage you know the utility should be buying that the output from wind and solar arrays and those are cheaper resources.
31:22.66
Johan
Me.
31:27.20
Jamie Van Nostrand
For customers and continuing to run coal. But that's not the signal that the regulators are giving them.
31:27.48
chrissass
Um, much of what you're talking about is state level power right? So how is the federal mandate interacting. You know the state's rights versus the federal rights you know from kind of your legal perspective. How is that.
31:32.87
Jamie Van Nostrand
Yeah, yeah.
31:45.15
chrissass
Impacting all this because I'd imagine a certain point they're going to come to a head right? because it's clearly not where the United States as a whole seems to be much further ahead than the state. So where do state rights and federal rights kind of combine on the energy policy here.
31:58.81
Jamie Van Nostrand
Well, the federal Energy Regulatory Commission you know has adopted very pro-competitive policies in terms of these competitive wholesale markets. So West Virginia operates in the pjm wholesale market which is 13 mid -Atlantic states and I think fork the federal energy regulatory commission. Has done a good job of making sure that the way the energy is priced and the auctions and the market the way the markets are designed um provide those opportunities and you know and what I was saying in terms of ah of wind or solar array. If you don't have the utilities in west virginia acquiring the output what's the option for the developer. They're going to sell it directly into the wholesale market so you have to figure out well can you? then you have the transmission bottlenecks those are still issues in terms of the queues to get an interconnection from pgm the path would be easier if the utilities in west virginia really responded to policies that were embraced renewable energy and said hey we'll take that wind output. We'll take that solar output and then then the developers aren't left to selling it into the wholesale markets because those prices are going to be less certain and much a much less attractive deal than it'll sometimes have a long-term. Purchase a agreement with an investor in utility. So it would help but no I think the federal policies um are helping but you know yeah, the energy markets and retail prices and retail ratemaking is all done at the state level and you're really.
33:25.41
Jamie Van Nostrand
Dependent on a large extent on what is the what kind of what kind of signals is the industry getting from state law and state policies. Do you have a renewable portfolio to and or a clean energy standard or an energy efficiency resource standard or rigorous integrated resource planning process. We have none of those things in West Virginia and so it's a hard. It's hard for a developer to say well we don't really have a track record for you know the business is open for you know for renewable energy in West Virginia we haven't sent out those signals. Very. Very well yet. Even though I guess with the inflation reduction act. There's lots of incentives to do that. But we don't have this policy at the state level to embrace that.
34:03.98
Johan
So with your with your expertise your experience in this transition now being in and the last decade living in in in West Virginia with the inflation reduction acts now coming in where difficult question I know because we're always trying to think long term.
34:08.32
Jamie Van Nostrand
So.
34:23.85
Johan
But where would you see is there anything specific from the investment reduction act that you see this is the one we should get now that will help us short term but maybe also help us to kind of bridge or to overturn this. Culture of yes, it's possible kind of a thing is there anything specific that you would like to see.
34:40.76
Jamie Van Nostrand
Well, the tax incentives for the clean energy manufacturing jobs. You know we talk about a just transition. The fact is that the clean energy jobs generally don't pay as much as what the coal miners used to make right? So we need so part of the inflation reduction act we have to be prevailing wages. But. But you know we need to be looking for those white collar jobs where you're building manufacturing facilities whether it's solar or wind. You're building or energy efficiency products those you're building those manufacturing facilities. It's not just the job for the solar array installers or the wind. You know. Putting ah installing the wind turbines or in energy efficiency measures installing those at your house. It's the jobs associated with the manufacturing There's lots of tax incentives encouraging that as well. So that's where your long-term play and your long-term higher paying jobs I think are attracting those sorts of jobs to West Virginia so and we need to be going after that. But you know we need to be sending a stronger signal at the state level as a matter of policy that we are embracing this clean energy future. We want the jobs in the clean energy and men and the associate associated manufacturing jobs.
35:50.22
chrissass
So as we approach time here. We're getting to the end of our program. Um, if these coal plants continue to shut down. Is there money needed then environmentally to shore things Up. So if you if you do transition to cleaner energy. Are we leaving. Kind of a lot of damage from the mines or are these things that can gracefully shut down without needing a lot of money in in themselves to stop operation.
36:17.36
Jamie Van Nostrand
Well, the coal plants themselves I mean they become brownfield sites you know and there's lots of interest in redeploying those sites you got all the infrastructure there. The transmission lines. Um. Lots of interest in in Nuclear West Virginia just repealed a prohibition on nuclear. Can we build small module reactors the smrs can we put those on the same sites at the coal plants where a lot of interest in that senator manschion I think is interested in that so those are those are opportunities in in terms of. The coal mines themselves I mean there's just been widespread destruction failure to restore the land. You know western is the number 2 state in terms of abandoned mine land that hasn't been properly reclaimed so it's these environmental scars that are still that are still left of course in. And infrastructure bill gave Eleven point three billion dollars to start reclaiming some of these abandoned minelands West Virginia's number 2 in terms of the number of acres. So those jobs that that money's starting to be rolled out. Those are pretty good pretty good jobs so there's a lot of the environmental carnage. That's already occurred that still needs to be. Needs to be cleaned up.
37:22.35
chrissass
You had any final thoughts as we wrap this episode up.
37:25.28
Johan
As always Chris I have a thousands of more questions on my on my notepad but unfortunately but on a top who'd love to go into more of the culture and also maybe touch a little bit on the nuclear. Ah, road as well as a base load because it's I'm always big curious here when we talk about nuclear as being the base load because yes he works. It's kind of sustainable depending on who you ask but is it worth it in terms of pricing because we see in Europe I do.
37:39.73
Jamie Van Nostrand
Yeah.
37:50.24
Jamie Van Nostrand
Exactly that's the challenge. You can't get the. It's not cost competitive. Um, we got to get we need the 0 carbon base load generation. But I'm not sure we can get there fast enough with nuclear.
38:02.70
Johan
Ah, no I think and but with that I think really interesting discussions and I learned a lot more also from an American point of view around this. So I Really appreciate you coming on.
38:14.50
Jamie Van Nostrand
Thanks I really enjoyed it. Thanks Chris.