The Trump Administration’s approach to energy, climate change and environmental policy shows a marked departure from the path put forward by the previous administration. On this edition of the Columbia Energy Exchange, host Jason Bordoff sat down in Washington to discuss the outlook for federal energy and environmental policy with Michael Catanzaro, the former Special Assistant to President Trump for Domestic Energy and Environmental Policy at the National Economic Council. He is now a Partner at CGCN Group, an issue advocacy and lobbying firm in Washington, D.C.
Jason and Michael discuss the current and future policy outlook and the potential impact of the recent U.S. midterm election, in which the Democrats took over the majority in the House of Representatives. Michael and Jason also discuss the Trump administration’s policy priorities, approach to climate change, whether opportunities exist for bipartisan cooperation, and the changing impact of falling oil prices on the U.S. economy as the nation has become a net energy exporter.
Michael also shared his thoughts on the respective roles of states and federal government in shaping energy and environmental policy, the future of the electricity grid and the implications of renewables on other power generation sources.
READ THE TRANSCRIPT
Jason Bordoff: Hello and welcome to Columbia Energy Exchange. A weekly podcast from the Center on Global Energy Policy at Columbia University. I’m Jason Bordoff. The Trump’s Administration’s energy policy has focused on a goal of energy dominance and it’s been marked by a sharp break from its predecessor when it comes to climate change and environmental regulation. Trump’s foreign policy has also been highly consequential for the energy sector on everything from sanctions to trade. So, what’s next for U.S. energy and environment policy especially now that the democrats have taken control of the U.S. House of Representatives. To discuss this and much more, I visited last week with Michael Catanzaro. Catanzaro served until April of this year as the top domestic energy advisor to President Trump as special assistant to the president at the National Economic Council. He previously served on the senate environment and public works committee, worked on the George W. Bush White House and was a senior adviser to then speaker John Boehner. After leaving the White House, he returned to CGCM Group and I caught up with him at the firm’s offices in Washington DC. I hope you enjoy this conversation. Mike Catanzaro, thanks for joining us on Columbia Energy Exchange.
Mike Catanzaro: Good to be here.
Jason Bordoff: So I want to start, we’re meeting just two days after the death of George HW Bush and people this week are reflecting on his legacy. Reflecting on the ways in which our politics maybe have changed a bit since he was president and I was wondering if you could just start by offering some reflections on his life and legacy as it relates to energy and the environment and then just more broadly political discourse today.
Mike Catanzaro: Sure. First condolences to the Bush family. You know, it’s real mourning the loss of as you say, a great patriot, statesman, someone dedicated to public service. I do think as you say, you know the politics these days are much more difficult to navigate, much more toxic as opposed than they were in 1989, 90 when we were dealing with the 1990 clean era amendments. You know, those were days, I suppose where deal making was kind of an accepted practice. These days I think deal making and compromise are kind of dirty words. So, the 1990 memos really dictate presidential leadership. People forget that it took most of the decade in the 80s to get to the point where you could sort of trans in the regional differences I think that are really in play and get a national policy to deal with for example with acid rain, clean amendments of 90 as well as title 6 dealing with the Montreal protocol and _____ [00:02:33]. So, President Bush made campaign promises in 1988 to deal with those issues and he dealt with them and…
Jason Bordoff: And he ran on his intention to be the environmental.
Mike Catanzaro: He did. President, yes he did. And so, that, yes, I think that was his probably signature accomplishment, I think, so signed the Global Change of research act of 1990.
Jason Bordoff: National climate, just came out.
Mike Catanzaro: Exactly right. So, yeah, just a very different time, I suppose and you know, I think President Bush to his credit brought both sides to the table and was able to handle that agreement, I think the issues we’re dealing with now, I mean the principle issue of course, the political realm is climate change and you know, when you think about acid rain and that problems, more regional problem versus the global climate change and global issue, it’s much more complex and much more difficult from a scientific, from a technical and then even from a political standpoint. So that, I think that issue has proven to be much more interactable and again I think in the era in which we live, given how complicated that issue is. Politically it’s just been very difficult to get anything done at least from a congressional standpoint let alone from executive standpoint. So that’s kind of where we are.
Jason Bordoff: And what’s your view on the climate change issue in terms of what needs to be done today at the federal level or the state level or at private sector?
Mike Catanzaro: Yeah, you know, certainly, continue to try to hammer out something via regulation, I don’t think is the way to go. I am sort of one who thinks that congress did not intend for CO2 to be a regulated pollutant out of the act. CO2 is just way too different than other so called sort of traditional or conventional pollutants like sulfur dioxide or smog, ozone, those sorts of things. Much more difficult to deal with and so we saw that from the previous administration to the clean power plans, Supreme Court stated and this administration obviously working to repeal and replace it. We’ll see where that goes from a litigation standpoint. But I suspect that, if you’re doing it through regulation, you’re going to continue to see regulation or litigation going forward. It’s not clear, if that’s probably the best way to address the issue. So congress really does need to step up but you know the notion of a carbon tax passing congress any time soon seems very remote to me. I think unless, we are talking about really streamlining the regulatory process as part of that deal whether you’re looking at preempting say EPA’s ability to regulate greenhouse gases under the clean air act, unless that’s on the table and I suppose the preemption provisions probably should extend beyond just the clean air act. You have to look at things like the endangered species act, NEPA. I don’t think, that would be at all acceptable to the environmental community. I think they want both, you know, tax for mandates and the ability to regulate and so for republicans, it’s gonna be very, very difficult. It’s not impossible for them to sign on this. So the path forward for some sort of legislative solution here, at least in terms for a comprehensive solution, I think is very remote. But you do see republicans interested in and over the last few weeks, they’ve stressed this. Some sort of innovation or technology advancement program and I presume they mean, you know, through R&D out of DOE administration, of course, has a certain view of that, an approach but it remains to seen whether maybe to the appropriations process congress can provide some additional dollars for R&D to see if we can get some additional innovation, technology to deal with the issue.
Jason Bordoff: And that, I mean, there is strong support for innovation. America leading the way in new technologies and then the question is do you steer it toward lower carbon technologies because you think there is a problem to solve there. I just want to ask you about that because I think for some people, watching what the Trump Administration has been doing, sort of a and even the response to the national climate assessment that we saw which was, should we believe the signs? So that raises the question. You said that the congress needs to step up and here is why carbon tax might be politically difficult. The clean air act wasn’t designed to deal with certain thing. And I understand those concerns. But that’s, so one view is like this is a really tough problem to solve politically but yeah, there is a problem that we need to solve and another is well, maybe it’s not a problem. And it’s like, how do you think, how should people understand the way this administration approaches the issue?
Mike Catanzaro: I think it’s a matter of priorities any time, you know a new president comes in, you have to set priorities and you have a very limited sort of focus. You have a limited budget and a limited around of time to get certain things done. And so the question is for, this administration, I guess for republicans, generally to acknowledge a problem. I think many of them do. But then the question is, relative to what. Relative to what other issues should we be addressing as an administration or as a congress or as a country and I think that is a key sort of fundamental differences that republicans don’t think climate change is the number one or two issue that we should be spending all of our time on. I think the democrats to a considerable extent do. I think they take the issue to be, you know, something that should be high top their list, things to address, you’re seeing that right now, I think with the incoming majority in the house thinking about whether they should resurrect the select committee on global warming and energy independence to try to make it sort of a signature issue for them over the next couple of years. So that, that’s really what it comes down to and I don’t think republicans are gonna be unwilling to address problem. Again, it’s just, if you have things like healthcare, if you have things like national security, economy, jobs, trade, where should climate change fit within that priority list? And I think, yeah, that’s the fundamental disconnect.
Jason Bordoff: So, where do you think, I mean, national climate assessment obviously tried to answer that and gave some scientific views that were pretty alarming. But given what you just said, I mean, where do you think we can try to build a little bit of bipartisan consensus on the issue of climate and environment more broadly harkening back to sort of celebrated HW. Bush era we are talking about this week.
Mike Catanzaro: Well, certainly there is two areas in the energy space. Certainly with natural gas. I mean, I think natural gas obviously is kind of have been seen or seem to be the alternative fuel for our generation. Obviously has lower emissions and so going forward, you’re gonna see, I think greater use of gas in electric power generation which I think should be plotting in terms of its environmental profile.
Jason Bordoff: I think a lot of people do as long as you make sure like methane emission are controlled and so I mean, this administration has weakened those regulations. Do you think that, should we have regulations is a question of federal versus state or do you think…
Mike Catanzaro: Yeah, I think there is the question of federal versus state. I think the states have done a pretty good job of addressing methane where you have significant gas production. I think the administration has tried to recognize that and make sure the federal government doesn’t come in and. Yeah, there is differences in state to state and region to region in terms of production. So you have to be very careful and I think that’s the balance the administration has tried to strike. I grant that I guess that it’s probably controversial in some quarters to say that gas could help or in the long haul to be a solution here. But, how about nuclear. Emissions free, carbon free energy. I think you’re seeing actually some positive signs on the hill over the last year or two. I think, you’re starting to see some democrats really breaking ranks and coming out and saying, yeah, we actually think nuclear is part of the solution.
Jason Bordoff: We just saw bill passed by bipartisan support.
Mike Catanzaro: Correct. Because it is signed in the law of the nuclear energy and capabilities act which is a great piece of legislation again by bipartisan. You have also weighing in the wings to nuclear energy leadership act, with senator _____ [00:10:15] and senator Booker. So great developments there, I think that’s over the next two years, if one wanted to ask me, you know, what do I think actually should get passed from an energy standpoint, that would probably be top of the list.
Jason Bordoff:And what do you think needs to happen from a policy standpoint? And the administration has a nuclear review ongoing.
Mike Catanzaro: Correct.
Jason Bordoff: Tell me, what we should expect coming out of that and what would that mean from a policy agenda on nuclear?
Mike Catanzaro: Yeah, I think what’s relevant here to the discussion we’re having is thinking about, how do you support advanced nuclear and but even before you get to the advanced nuclear question, I do think, you do need to be careful in looking at the existing fleet. Now, I think there is the sense that if we don’t address or do something about the existing fleet to help support it, maintain it going forward, this could be very difficult as a country at least globally to go out? Make the case that we can continue to be the leader in nuclear power. So I know that’s a big concern. You know you have southern companies trying to complete its reactor. _____ [00:11:19] reactor of Georgia. But you have stress on existing plants and there is a bunch of reasons for that. I think, some thing, it has to do with sort of the market rules and policy architecture. Others blame subsidies for renewables. Others blame gas and just the fact that gas is very competitive, very cheap and…
Jason Bordoff: And renewables too. Subsidy but also the cost have come down.
Mike Catanzaro: Correct. Just can’t keep up. So a lot of different reasons for why nuke is under stress and you see states in fact intervening and trying to fill the vacuum there, to try to protect their existing plants because there are job issues but there are also issues that the state have said relating to the climate change and environment. The exact program in Illinois for example. It’s explicitly about trying to address carbon free energy and the environment and emissions and in fact, in Ohio, you’re starting to see some progress being made and the legislature of the new governor coming in, Governor DeWine are potentially doing his _____ [00:12:19] like program as well. So, now this question is about whether or not the states intervening in that way, whether that’s continent with federal power act jurisdiction that’s exercised by _____ [00:12:30]. You’ve had a couple of Supreme Court decisions in that vein over the last few years. So, but it seems like the way states are moving forward, at least in terms of the federal appeals courts, they’ve been appaled those programs. So, going forward, we’ll see to have we’ll continue.
Jason Bordoff: And so there is a lot of concern about the retirement of nuclear plants for different reasons including, we’re talking about a minute ago some groups who want, they want to see zero carbon energy coming off the grid. This administration had said, we are concerned about the retirement of base load capacity like coal and nuclear because of reliability and resilience concerns which at least in my reading of a lot of comments submitted to _____ [00:13:09 I think, they were very strong arguments that tried to debunk how big a problem that is. I’m just curious, your view on kind of the argument for supporting coal and nuclear for reliability and then moving to now more recently national security arguments.
Mike Catanzaro: Yeah, so I think this policy initially came out of some concerns about specific plants, I think in PGM region that were going to close down or were slated to close down in 2021 time frame. And so, initially the policy was looking at section 2 or 2C of the federal power act and whether or not there was some sort of emergency on the grid that was a result of the specific plants were retired. And I think there was sort of this broader question which was raised that well, it’s not just these particular plants in these particular regions, it’s something that continues to recur, you have retirement in hese so called base load power plants, coal and nuclear, that’s gonna put an enormous amount of stress on the grid. Now, we have to do, to see instance, at least in my view is you have to go back and sort of look at how are these things done in the past. And the way that they were typically done is that, DOE would work with, you know, regional grid operator with an RTO who work with a state. They all sort of come together, operators will come together and usually there is an agreement or a consensus about the need for some sort of support to keep a particular plant open for reliability reasons. And DOE exercised through authorities across different administrations, many times. I’ve worked with 2C and I’ve worked in the George W Bush administration, the _____ [00:14:50] plant in Alexandria something we worked on and then DOE and this administration has issues some 2OC request. Again, all very non-controversial. And again in this case, in terms of what the administration was looking at was much more controversial because you didn’t have that kind of consensus. You didn’t have for example PJM coming forward and saying, we agree that these plants need to be supported. They need to stay open. In fact, PJM has been saying the opposite and just recently, they kind of gave their sort of liability outlook for the next few years and they think everything is or seems to be okay. There was a concern about well, for moving more to gas fired generation what happens if a pipeline goes out, you really have no alternatives. We should be looking at fuel security and onsite fuel supplies as a way to sort of address these things. I think the administration, you know, one place to look in terms of their view point on this is the New England ISO. So, while there is not maybe a sort of crisis or emergency right now, you can make the case that over time, unless certain things are done, there could be some problems and I think New England faces serious problems if they don’t address some of the core issues in front of them. The New England ISO, I think it was January this year basically said the 2022, 2023 time frame. The fact that they are moving to such a high concentration of gas, they are concerned if for example, we can’t build state natural gas pipeline to transport the gas to get to these plants. That has to be fixed. Well, how do you fix that because I think the reason we are not building this is because of political opposition. So, you could imagine, you could imagine some scenarios over the next four, five years where there could be some issues related to the grid, I think the administration is trying to…
Jason Bordoff: I mean, New England had challenges with gas for a long time. I don’t know if 90 days of fuel onsite is the right way to solve that problem but…
Mike Catanzaro: And so that goes back to, you know the question, do we…
Jason Bordoff: Do you think the administration is going to continue to push forward on sort of support for _____ [00:16:53]. Partly we’ve seen a change in people, you know it looks like a prove it left, it’s a lot of public report that you and he weren’t always on the same page about things. I don’t know how true there were but do you think this is gonna, this policy priority will remain?
Mike Catanzaro: I think, it’s kind of on the shelf right now. I think that, you know it did morph into so federal power is still the issue there. But it’s also now changed into a change into this defense production act. Potentially using authorities under the defense production act to provide support, legal support in any case for these plants and that actually was much more controversial, I think than even the federal power act 2OC authority. So that sparked heated debate over the summer whether the DPA was the appropriate vehicle to use to intervene here. And there were a lot of very difficult questions that were raised that I think folks are still thinking about. One of which is if you use the DPA and the FPA in this way, who is going to pay the power plant owners in order for these plants to stay open. Usually an FPA, 20C context, the grid operator, the RTO will, you know, reach an agreement and they’ll provide a payment to the plant to stay open. You wouldn’t get that in this case because you don’t have anywhere near consensus. So then does _____ [00:18:16] ultimately default, they are the ones that are supposed to provide the payment here. That’s how it usually happens again in a 20C respect.
Jason Bordoff: Do you expect for it to be a kind of take on this to change with _____ [00:18:26] coming in and unfortunately the health of the chairman is well, not former chairman is not good.
Mike Catanzaro: Right. Yeah, I… You know, there has been a lot of questions about Bernie and sort of where he stands on this and Bernie worked on _____ [00:18:41]. That’s what at least is alleged and you know…
Jason Bordoff: Not many, just for people to be clear that new nominee for _____ [00:18:50].
Mike Catanzaro: Yes, Bernie _____ [00:18:49]. Great guy and Bernie really hard as a markets guy and I think that’s exactly what he conveyed at his, during his senate testimony. And so I would expect him to take that to _____ [00:19:00] and I expect him to be an independent regulator. So, he’s going to evaluate this according to the facts and the law what’s warranted and not warranted so I think if this ultimately ended up in _____ [00:19:12] lap then it’s not necessarily the case. That they would just take whatever the administration gave them and just ratify it and then we saw how _____ [00:19:21], very clearly they will find nothing on that. So _____ [00:19:24] I think would exercise his independent judgment and we’ll see but I think even with the administration moves forward on something, I think the amount of litigation will be considerable and I think even if _____ [00:19:36] acts there will be litigation point from that and so the actual effect of whatever is done wouldn’t be felt for quite a long time. Maybe the political impact would be there just from acting but in terms of actually saving these plans, that’s another matter.
Jason Bordoff: I was just curious, you mentioned litigation and we see that in a lot of places now. There is nothing new about that obviously. But you know, there is a perception sometimes that when the position now of these rapid bipartisan, this polarized partisan environment, you see a new group of democrats coming into congress, talking about a 100% renewables and agreeing to new deal. We talked about kind of where republicans are. Even on places where there was some desire from the industry to move in a certain direction like in fuel economy. A sense of the administration went even beyond what the industry wanted to do and I’m just wondering if you think we’re in this place now and if you think about what helps to encourage investment in the energy sector seems to actually potentially undermine it if we are just in this period of rapid pendulum swings, regulation and deregulation that actually is not good for any part of the energy sector. Is that kind of what we are just destined for now?
Mike Catanzaro: I think so unfortunately. And I think you’ve hit the nail in the head in terms of, yeah, we were just talking about this before, about the congress intervened and address some of these issues, whether it’s climate change or whatever the issue we care about. We’ve been dealing with this problem for decades and I think we’re gonna continue to deal with it for a very long time. And that is that congress, you know over a period of time in the 70s and 80s delegated a lot of its law making authority to executive branch agencies and there is a lot of reasons for that. But they did that and as a result congress sort of get out of the game of legislating. Left it up to EPA, left it to other regulatory agencies to sort of fill that void. And that’s precisely what they’ve done. And given that we have such a high politicized environment right now, you just can’t agreement, at least on the big core sort of energy issues that we’ll think about in a day to day basis. So then what you’re left with. You’re left with agencies trying to fix these things and you get different administrations that come in. One administration has a philosophical approach to things and a policy approach to different from the one that came before. So they come in and they try to change what came before and then what happens? You get litigation and it’s actually interesting because it’s very kind of anti-democratic because you have, you know, a large sort of bureaucracy of great people by the way. No, this is not to diminish them in any way. But, these parts are unelected and largely responsible for putting these rules together and then you have a small _____ [00:22:09] of effected industries and you have NGOs that come and sue and you have unelected judges who affect the outcomes of the rule. Whether it’s remanded back to the agencies prove or vacated or what have you. The congress, the body that is ultimately responsible to the people into their constituent is out of the game. Now, they can have oversight, responsibilities, they do exercise that to some degree and we’ll see that considerably over the next couple of years. But at the end of the day, there is this sort of _____ [00:22:36] of people who make these momentous decisions about the economy, how it can be regulated. And so in terms of energy and environment that’s where we’re gonna be, I think for a very long time.
Jason Bordoff: You just mentioned, you know, threw in there oversight will continue. So talk a little bit about what you expect now with democrats taking the house. Are we gonna see anything on the energy, on energy coming out of congress?
Mike Catanzaro: I don’t think so. I think there could be. Again as I say, I think you know, there are some promising signs about nuclear energy and maybe getting another nuclear bill passed. I think there is decent chance, we can get that done. And maybe some other things…
Jason Bordoff: There is taking finance effect, the renewable fuel standard in your review.
Mike Catanzaro: I don’t think it will affect how the administration will carry it out. I think the administration, the president anyway has been largely in agreement with _____ [00:23:27] on some of the key issues facing the renewable fuel standard. I’m not clear…
Jason Bordoff: And just so our listeners know getting a sense that kind of does with the oil and gas industry. On the renewable fuel standard, that’s not the case.
Mike Catanzaro: Correct. Correct, I think the refining industry has not always gotten what it wanted out of the renewable fuel standards and _____ [00:23:48] has done a really, really effective as he, _____ [00:23:50] really effect the senator for his state and his state’s interest and he’s done I think a tremendous job of protecting them particularly in this hour. But, in terms of actual legislation coming out of congress, I’m not very optimistic when it relates to energy and environmental policy but the oversight, I think is what’s gonna have the biggest impact on administration policy, I think the democrats are going to be very aggressive. Going forward the democrats are very, very good at oversight. They know how to do it. They know how to slow things down and tie things up in knots and they will do that. And they will go aggressively after interior and EPA especially. So we just have to wait and see but I would expect that.
Jason Bordoff: What, I’m curious on this topic energy broadly speaking we are meeting this week while nations are gathering and pull into talk about the future of international climate cooperation and countries are meeting in Vienna to talk about whether to cut production at the OPEC and non-OPEC meeting. Those who are watching, what’s happening in oil markets, you know, I think they’ve been struck that prices have fallen really quickly and there was a sense when prices were rising in the summer toward $80, 85. President Trump was very vocal in kind of beating up on OPEC to cut production. We need you to make oil prices lower and people might have been a little surprised that even when oil prices were low, he was still doing that. So, you worked for him. I’m just curious like, share with us your thoughts on kind of how he thinks and how the administration thinks about oil prices especially when the U.S. is a much larger producer. Lower prices help consumers but, you know, they hurt a lot of the firms that are producing or elsewhere. What do you think? Is it always going to be the case that lower prices are better no matter what the level for this president?
Mike Catanzaro: Well, that’s kind of the tricky thing, isn’t it. Because we’re now in this new era, you can call it energy down or whatever you want to call it. But you know the fact that you’re seeing this tremendous surge of oil production, you look at permeate, I mean, it’s really amazing to watch what’s going on down there. But, you know, these other basins, United States being the world’s, you know, leading oil producer according to I think _____ [00:25:59] just recently. I mean, this is a remarkable turnaround which has been well documented and so, the tricky thing now is given how important oil and gas and oil is to this economy, the U.S. in terms of supporting economic growth, prosperity and jobs and communities, what then happens if oil prices do go too low. I don’t know what exactly too low is in terms of numbers, I guess I have a range in my head but that does tend to have much more significant impact than it once did. So, if you’re kind of rooting for a lower oil price, is it not necessarily in the best interest of the united states. Certainly not in the best interest of maybe the oil industry in the United States. Is it broadly still a boon for consumers when they go to a pump? Absolutely. And so that’s sort of the trade off here just think about more than ever is lower oil prices are good at the end of the day because I think as President Trump said tweeted, acts like a tax cut for people for going to the pump and filling up and it’s a lower price than what they used to but again you do have to think about, you know, what the impact is going to be in some of these key basins and communities and again what that means for the country as a whole, how that supports the economy.
Jason Bordoff: So we were talking on Monday, this will come out after but they meet on Thursday, so are we gonna see a tweet on Wednesday.
Mike Catanzaro: I would suspect, yes. I put a lot of money on it. What’s going to be in it. I would do bet what he’s going to say but you can bet he’s going to say something.
Jason Bordoff:The other issue that’s got a little bit of attention, a lot of attention that relates to environmental protection and oil markets is these rules coming out of the international maritime organization to reduce sulfur emissions from maritime fuel and there were some reports in the newspaper that the administration concerned about rising prices and maybe not always supportive of international organizations, it seems to me outside. You can tell me if that’s wrong. Especially in election year might get step into to try to delay or slow those. Do you, what do you expect?
Mike Catanzaro: Yeah, there is a lot of turmoil, I think a few weeks back, I guess, it was a Wall Street journal story that talked about meeting at the White House. I think the White House and the administration is still thinking about IMO and trying to get its head around sort of what this policy will mean, what this impact will mean particularly for consumers in the united states. My own view is I think IMO is a good deal. I think the administration, the United States should move forward with it on time. But that, you know, remains to be seen. I think there has to be a lot more investigation in terms of what the impacts will be. And we’ll see that. You’ll probably see the debate by picking up here in the next three to six months. I think congress is going to get more engaged in, I think senator _____ [00:28:40] for example chairman of the senate energy committee is concerned about IMO and she may be looking at it from, you know, either from a hearing perspective or from a legislative perspective. I don’t think anything can move but again, I think it’s a good deal. We should move forward. It’s gonna be great for the United States and it’s just gonna be a matter of coming out with data to try to show that.
Jason Bordoff:And we just, you know, it’s interesting we’ve just talked about a couple of issues and it shows as I think about it, you know, lower versus high oil prices and the impact on the economy that’s also a geopolitical dynamic. The U.S. relationship with Saudi especially now the Saudi relationship with Russia or the IMO, which has environmental mark upon it. It’s just reminder of how energy kind of slices across so many aspects geopolitical national, security, economic, environmental. Just give our listeners like a little bit of, you know, take of inside baseball of the energy and environmental apparatus. Every White House organizes a little differently. Where does energy sit? Who’s in charge? Who drives the agenda and those equities can impact a little bit how you view these issues between the counts on environmental quality and national economic counsel, or the national security council plus the agencies. How does it work now?
Mike Catanzaro: Yeah, so I think for domestic energy environmental policies, it’s clearly within the scope of the national economic counsel that was kind of established when the administration came in. Obviously, the council on environmental quality does have an important role to play as well sort of formulating domestic energy environmental policy and then the international side usually get a push in kind of where, sort of it lies between the NEC and the national security council as well. So there, you know _____ [00:30:18] who is my former colleague. We worked hand in glove. I mean, every single day we had to communicate with one another because in terms of the overlap that you kind of talk me about, I mean, what is in the international realm, that’s gonna affect the domestic realm and sometimes vice versa, domestic international. So we have to stay in constant touch to make sure that as we were developing policy in our lanes, we were, you know, making sure that we were not, you know, screwing anything up in terms of what Day was trying to do internationally and what I’m trying to do domestically. So and that’s…
Jason Bordoff: And the goal will be objective. I mean, sort of framed as energy dominance or unleashing American energy is all these slogans but like, it’s often framed as maximizing U.S. particularly but not only but particularly hydrocarbon production and exports. Is that sort of like when you have to work every day and say here is the problem we’re trying to solve. Here is our goal. Is that the right way to think about?
Mike Catanzaro: I think that’s right on the whole, I think, yeah I think the administration gets the credit it should on renewable side. I think the administration is perfectly in support of renewable energy. I think it’s just didn’t necessarily want to put thumb on the scale and favor one fuel type over another and there is a lot of crisis and says, well, you certainly did that on coal space. You know, the dominant scale for coal and nuclear and certainly appreciate that. But yes, I think first and foremost, hydrocarbons will be the focus because in terms of energy dominance, I think that’s clearly United States is now leading or will continue to lead but, I think on the renewable side, the administration of the United States is doing remarkable things particularly in the solar and wind category. You know, the growth has been tremendous. Thanks both to just the innovations but also to sort of policies, I think particularly at the state level. But administration is not inimical in any way to turn nuclear energy in the sort of all the above moniker that you’ve heard for many years, something also they take pretty seriously.
Jason Bordoff: And then sort of layering into that increasing production and exports with environmental protection and the president talks about air quality and water quality and then brings us back to where you started which is this topic of climate change.
Mike Catanzaro: Right.
Jason Bordoff: And he did seem to have, I mean, tell me, if you disagree. He seem to almost go out of his way to attack the findings of the national climate assessment and it just seems when you have a report like that identifying such a large challenge and a scientific consensus, I believe around it. And then, and one part that’s mobilize when you think of energy and environment, that’s very in the top of the list, if not the top of the list. And on the other side, we talked about before how do you find bipartisan consensus when that, that base of common facts like to believe the same thing. It seem, is just isn’t there. And that scientific view that was on the national climate assessment seems to be marginalized or maybe not taken, viewed very differently by different groups. What do we do about that?
Mike Catanzaro: Well, it’s always typical because any time, you know, a scientific report comes out or you have a body of scientific evidence on a particular issue that affects public policy, I think there is some who expect then that, it’s necessarily that policy will inevitably flow from that and that would sort of dictate, you know, what a policy outcome should look like. But I don’t think that’s the case at all. I think science and data and research obviously are extremely important to informing policy. It’s one factor that one among many factors that go into formulating public policy. So, I think, yeah, the climate context, again, we can go back to this discussion about, you know, even if you had the administration that took the national assessment and agreed with everything in here, what is it that you really can do at the end of the day in terms of the policy, you can pull. You know, certainly café’s policy, things you can do out of EPA and the clean air act policies but, yeah, we discussed, are you gonna get staffed through litigation whether it’s an industry side or whether it’s on the environmental side. And so, at the end of the day, really the response you would have liked to have seen congress would have step up in the national assessment and say, here is kind of what our view is. Maybe here is a path for it because congress is ultimately the one responsible for coming in and developing a new policy. And now that as I said before is gonna be extremely difficult. It depends what congress is gonna focus on. If you’re gonna focus for the next two years, four years on a carbon tax, you’re not gonna get anywhere. But if you’re focusing on things like RD and D, technology and innovation, SaaS for example, it was very articulate on that point, a few weeks ago and he’s asked about the national assessment and nuclear power. Those are things that have bipartisan support and those are things that can advance and those are things that, you know, if you put legislation on a president’s desk, for example, the senator _____ [00:35:06] bill on nuclear, I think he would probably sign it. So, you can advance the ball in some ways but I think if you get bogged down and politicize headlines about what the national assessment said or didn’t say and you’re focusing on things like carbon taxes that you know, no republican or very few republicans would support or even democrats, I think are probably gonna be a little bit, you know, low to sort of take that head on. You are not gonna advance the ball.
Jason Bordoff: One of the, we only have a minute left but one of the areas that I know, you’ve thought a lot about because talked about it before is, the future of the electricity system. And the role of _____ [00:35:41] and the federal power act, state utility commissions in a world where the grid is undergoing dramatic technological change, needs to be modernized, to respond to things like digitalization. Talk about that issue in kind of what you think the policy priorities need to be.
Mike Catanzaro: The area that I really like to focus on and I think is very important is when I was talking about before which is the state sort of stepped in on you know, key questions about for example whether or not you can support nuclear power plants going forward or provide additional subsidies to power generation. You know, Illinois and New York must prominently did that through their zero emissions credit programs. Of course, it was litigation. Both were upheld and I think in the second in seventh circuit. _____ [00:36:22] actually sort of blessed the approach that Illinois and at least Illinois used now as I said before is gonna try to move forward with something. They do think though that, that is a significant problem going forward because I’m a market’s guy. I think wholesale competitive markets is sort of standard market model, we’ve had for a number of years now has worked pretty well. To not say, it’s perfect and we don’t need to improve it. We do but I think the states continue to move forward in additional subsidies, more mandates, more support for these plants. It’s gonna be harder and harder for _____ [00:36:55] to sort of figure these things out. And _____ [00:36:57], I think has done a very good job, kind of asserting itself of late, you know, they did this with PJM, with its capacity proposal that they’ve sent in and actually _____ [00:37:06] said guys, you got to go back to the drawing board. We don’t think you’ve dealt with the state subsidy question adequately enough in terms of your capacity markets. Go back to the drawing board and figure it out again. So _____ [00:37:17] on to this and hopefully over time, they’ll, you’ll get to some sort of solution but that’s gonna take a lot of time. But, the greatest change so much the technologies on the grid have changed so much. There are these variable resources growing to a significant degree in solar, more gas on the system. So, you know, the problem we’ve had, I think is that a lot of the roles that were passed in the 1930s are still in place. And so what happened over decades is that we sort of put new policies under oath and so some of the problems, you see with the policy architecture have to do with that fundamental issue and so, I keep coming back to it but I wish congress would take a step and try to address the federal power act and update it, you know, congressmen Greg Walden did a tremendous job in trying to educate his colleagues with power America series as he called it. Series of hearing, so you can have different aspects of the problem trying to move to 21st century grid but…
Jason Bordoff: And we can get some of that done at state level as well or…
Mike Catanzaro: Yeah, I mean again, I think that’s where you see, I mean the states on a whole host of issues, I think the states are moving forward on regulatory issues, policy issues, some on climate change. But the states are gonna be the lavatories of democracy.
Jason Bordoff: What do you make of the election results? It really focuses on Dems you know taking the house in congress but we had a lot of interesting state results. The carbon tax defeated in Washington. The RPS defeated in Arizona. The kind of limitations on shale development in Colorado. Some pro, I don’t want to say, pro representatives _____ [00:38:47], some congressmen who have taken a forward leaning position on climate were defeated. What should we take away from the state results?
Mike Catanzaro: Yeah, the one state result that I thought was really, really interesting was Washington state with the carbon tax or carbon fee as it should say because it was carbon fee in the constitution. This is the second time around the date they’re trying to do this. And the second time around the activist behind it were smart and they said, well how can we make this more politically palatable and there were various groups and constituencies that under the referendum would have gotten certain payments. They exempted, I think manufacturer, some manufacturers from the task itself. Some sort of energy intensive global competitive manufacturers would have been out as well. So, I think they developed this in a way that…
Jason Bordoff: Which led to some of the large oil companies opposing it even they are on records, we support carbon tax but these exemptions, this one is not designed in a way that we like.
Mike Catanzaro: That’s right. So, you know, you can chalk it up to whatever reason, I think the environmental act, this will say, well, it because oil companies spend a lot of money, that’s why it went down. I think it gets to this fundamental problem of climate policy that, I think sometimes environmental NGOs may not appreciate. I think they are appreciating it more which is, you know, if you take a poll and you ask people on the street, are you concerned about climate change? I think overwhelmingly people will say, yes. But then if you turn around, you say hey policy x will mean that you’ll pay a thousand dollars more a year or that you’ll pay $2 extra a gallon at the pump, you’ll say well, actually I’m not sure I’ll support that. And that’s when, again the other problem too is that when it come to climate change, in terms of priorities for people, I mean, _____ [00:40:22] has lifted this for years and they asked me to sort of blank order. The issue that they think is more, most important to them. They go to the polls. And climate change has appeared to kind of dead last pretty consistently now for several years. So, would that change going forward? It certainly could.
Jason Bordoff: People, believe, it’s really but it’s just not a priority.
Mike Catanzaro: Correct. They have many other issues, the economy, jobs, terrorism, security, healthcare, things just continue to come up in its place and so, and so again when I looked at the results in Washington this is exactly what, you know, we’ve seen for a long time with climate parts, with cap and trade another good example where I think the[00:40:58] bill passed in 2009. Yes, it was got through narrow in the house but you know, democrats were in control at the senate when that came up and they have close to 60 votes and still couldn’t move the bill and never even came up because they were unpopular. Because the constituents were complaining that they didn’t want to pay for it. So, that’s again, gonna be the challenge going forward. And so that’s what, I look at the other one of course is Colorado, I thought was interesting that the, I think it was proposition 112. It went down decisively.
Jason Bordoff: Set back provision that would and shale activity, fracking within 2500 feet to home.
Mike Catanzaro: Home schools, other, you know vulnerable areas.
Jason Bordoff: And the result of which would have been a fairly large segment.
Mike Catanzaro: Again large dent in production in state, yes. No, question about it. I think that was independently validated by some pretty decent work from a lot of different groups. But, yeah, I mean, that went down pretty decisively as well. Again the charge was well, the only gas industries spend a lot of money but I think Colorado voters, you know, looked at that pretty reasonably and said, we think that only gas development is important. State is very important. State from a revenue standpoint, from a job’s standpoint, you know, we need to figure out from a safety and environmental standpoint on how it works but I think they were convinced that at the end of the day…
Jason Bordoff: I mean, it’s interesting that they elected a governor who had backed measures like that and then softened it a bit…
Mike Catanzaro: He was opposed to 112, so that, that certainly I think helped those who wanted to get down. But yeah, so those are the two to focus on. But you know, as I said, I think the states are gonna continue to move forward on close fronts because if there is continued gridlock and inaction at the federal level and I predict that there will be both in congress and at the federal level in terms of executive branch move with regulations, those will not only will be litigated and then uncertainty and sues and so, state legislators well step up the plate and do this, will address it. So that’s what you’re gonna see, I think in this context and maybe in many others going forward as the states are gonna be taking the lead on certain policy.
Jason Bordoff: I wish we had another hour or more. There is so much to talk about with you. Hopefully, we can do it again but Mike Catanzaro, thanks for making time to be with us. We don’t always agree on everything but I always learn a lot talking with you and enjoy hearing your perspective on things and I know our listeners do as well. So thank you.
Mike Catanzaro: Thanks. Good to be here.
Jason Bordoff: And thanks to all of you for listening. For more information about the Columbia Energy Exchange Podcast and the Center on Global Energy Policy visit us online at Energypolicy.Columbia.edu or follow us on social media at Columbiauenergy. I’m Jason Bordoff. We’ll see you next week.