00:16:18 · Chris Wright
[00:16:18] S1: So gas will certainly be the dominant source. I mean it's just by far the cheapest, fastest way to produce new firm, meaning 20 fourseven generation. As Scott said, we've lowered greenhouse gas emissions in this country not because of subsidies or government policies. Dominant amount of it has just been natural gas has outcompeted coal in the power stack. It's just gas plants are cheaper to build and they're cheaper to operate They're more flexible. They can turn up and down faster. Now don't get me wrong, love coal. It has been the largest source of global electricity since the data started in 1900 and it will be the largest source of electricity globally when I die. That's a long ways away. Natural gas is number two and in rich countries it's usually the reverse. Natural gas is number one and then coal or nuclear will be number two and the other will be number three and those three things are what run modern power grids. But on the natural gas side in The United States, gas turbines as Scott mentioned, they've gotten tight supply. So people say, Oh, if you sign up now you can't get one for five or six years. Well that's true if you get in line now but the deliveries in the next five or six years of turbines that are already ordered and already under construction is probably close to if not over a 100 gigawatts. So there's a massive amount in construction. And of course it's not just turbines, there's gas reciprocating engines that are used to produce, think diesel generators that now can run on natural gas. We are going to see gigawatts and then tens of gigawatts of reciprocating engines that burn natural gas to generate electricity. I used to have those at my former company. We're also seeing fuel cells, which is another way to take natural gas and turn it into electricity. Fuel cells, something that's been talked about for years, that's finally scaling up and hitting scale. I think we will certainly in the next five years we will see multiple gigawatts of new electric generation from fuel cells which also take natural gas as their input fuel. The one thing I should say just so people cannot worry about this one is this supply of natural gas, the fuel itself is no problem whatsoever.
00:18:32 · Chris Wright
Today in The United States' biggest oil field, the Permian Basin in West Texas and Southeast New Mexico, oil production is curtailed a little bit because we don't have enough capacity to take all the associated gas. When you produce oil, you always produce natural gas too. Just the shortage of pipeline capacity to move natural gas out of the Permian Basin, so it's like 2%, 2.5% of US natural gas production, that shortage is enough to produce about 15 to 20 gigawatts of electricity. Just the gas we can't find a home for. So gas is cheap. It's wildly abundant. If you want to go to a different location you may need to build a pipeline or some transmission thing. But The United States has an amazing abundance of natural gas. People often think that the cost of electric generation, it's about the fuel. We want fusion because it's water and it's really cheap fuel. Well, there's not a lot of tritium in water. But Scott knows in the nuclear space you've got to have that affordable reliable fuel but mostly the price of electricity is dictated by the price of the machine. It's not the price of gas that determines gas generated electricity. It's the price of the machine that turns that gas into electricity or the machine that turns that coal into electricity or turns that uranium into electricity or turns that deuterium and tritium into electricity or turns that wind and sun into electricity. It's the cost of the machines that matter. The problem, again, with the intermittence is they don't produce a product anyone will buy. They produce electricity. Some of the time, we're not sure when. So to make them real machines, it's just enormously expensive to build giant amounts of storage to last a few days where you can have cold spells or hot, you know, lit darkness or high pressure masses where the wind doesn't blow.
00:20:22 · Scott Nolan
[00:20:22] S2: Yep. Yeah. And it depends on how many 9s you're going for. So what sort of uptime do you need? If you're trying to do a high end reliable data center, you're looking for more than 99% uptime, 99.999 often. And so you can't afford to have the power source go down. That's why we think a lot about baseload, then baseload being really the dominant thing that you have to solve. You can get there with enough of a portfolio mix in certain geographies, but it's often getting to those same nines through a mix of different things with all the storage you might need or all the peaker turbines you might need, that ends up being just as expensive. So I think, yeah, it's exactly right. If you're trying to achieve baseload, it becomes all about the upfront CapEx, not as much about the OpEx, even for nuclear. The bigger the nuclear plant, the lower the cost of the fuel relative to the cost of energy. If you look at the classic huge gigawatt scale nuclear plants, the fuel is in the single digit percentages of total cost. The smaller you go, though, the more you solve the machine problem of actually building the plan and bringing that cost down, then the fuel becomes more expensive, which is why we're not just focused on schedule and being online this decade. It's how do we also bring the cost down over time just so The US can compete on baseload, just across the board?
00:21:40 · Ty Morse
[00:21:40] S0: There's this interesting idea that people are not very good at understanding exponentials. And right now, we can pretty well extrapolate the growth of energy demand for the next few years. But I think it's interesting to think about, like, what if we're massively underestimating what is required and what the demand might be? What are the biggest, like, constraints and things that are stopping us from moving faster on just turning on more generation?
00:22:04 · Chris Wright
[00:22:04] S1: Well, you know, we we do have transmission problems as well. Right? If you don't locate the source of electricity right next to the demand center and you can't always do that, we have a pretty extensive power grid. It's very expensive and crazy slow to build new power lines. That's a longer term problem we are also trying to fix, but you can take existing power lines and replace the conductors, you know, old school conductors with conductors, superconducting conductors or conductors with lower lighter weight cores and higher conductivity materials where we can deliver much more electricity down the existing power lines. Department of Energy and the Trump administration are pushing this reconducting so we can allow electrons to move faster. Permitting has been a problem. That still remains a problem, the Trump administration is working very hard at fixing that. In fact, the Federal Energy Regulatory Commission came out today with statements on natural gas power plants, how we're to sweep out a lot of the regulatory burden to allow people to build and permit natural gas plants and pipelines much faster than you previously could. This is very helpful. We want to move at the speed of AI and move at the speed of innovation. We've to have our government to move at the speed of business and innovation. We call Trump speed. He's willing to break things to make it move faster. Most people in government want to nudge and they want to push things that direction or that direction. President Trump has been very bold. He's like, We cannot have China lead the world in AI. Imagine a world where America's bumbling around with the bureaucracy. We had the second Biden administration come in and we were where we were before where we were more focused on taking power plants down and not letting you build anything that might generate greenhouse gas emissions. Just AI wouldn't be happening much in The United States. And to me, if you have a dominant power in AI, they will be the dominant power on the planet militarily, economically, technologically and ultimately socially. And I'm not ready and I don't think any Americans are ready for China as the dominant global power. We've had a freedom, opportunity loving America as the global power for the last century, I think, been fantastic. Is America perfect? Of course not.
00:24:20 · Chris Wright
But we are by far the greatest, most innocuous, most benign, most human promoting global dominant power the world has ever seen. And it's critical that we keep that going. And that means we must bring the dynamism, we must fix all the problems that need to be fixed. But again, it's America. We have American people. We have American businesses. Can we do it? Of course we can do it. Will we do it? We will do it. Am I wrong, Scott?