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- [00:00]
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- [00:30]
Chris Wright
Bloomberg Audio
- [00:31]
Joe
Studios Podcasts, Radio News Kaylee these stories all collide somehow when we talk about energy prices. And you introduce the idea of data center, which many believe is driving electric bills higher. And it started a conversation about a closed circuit around these facilities. And here's a new take on this. You probably heard about the Nextera story. It was out first thing this morning. Nextera teaming up with Brookfield to build build $100 billion data center campus. In this case though, it's going to be run by a nuclear facility in Kentucky. They're basically relighting a nuclear plant powered by uranium that will be home to a data center campus.
- [01:13]
Interviewer
Yeah. So this is a generating plant that is coming with it. It all feeds into this rate payer protection notion we've heard so much from the President about. He was just at the EPA last week announcing an expansion of that ratepayer protection prejudice pledge. He essentially wants these data centers to be bringing their own power, to be insulating everyday consumers from the higher utility costs that come with could come with them.
- [01:33]
Joe
This is down near Paducah, the Paducah gaseous diffusion plant. And the Secretary of Energy is there right now because the administration is very much supporting this effort. We're glad to have Chris Wright with us. Mr. Secretary, welcome back to Bloomberg TV and Radio. It's good to see you. And it looks like the weather's nice today in Kentucky. This plant made uranium for the US during the Cold War privately funded. So. So I'm curious, what is the extent of government involvement and exposure here other than simply transferring the site? Is that why you're in Kentucky?
- [02:07]
Chris Wright
Yeah, I'm here, Joe. You summarized it well. We're here just to celebrate. The Department of Energy is leasing these federal lands to multiple private companies to build some new nuclear technologies, as you spoke about. Also to build 2 gigawatts of new natural gas power generation that'll serve both. A 1.2 gigawatt data center that will be built here. That's the majority of that $100 billion, but also to add 800 megawatts of additional power onto the grid here, which will benefit all of the surrounding states. This is sort of a cornerstone move of the Trump ratepayer protection pledge, driving prices down and industry and job creation up.
- [02:52]
Interviewer
As I'm sure you're well aware, Mr. Secretary, there is a live conversation happening in and around financial markets right now as to whether there is investment happening in data centers, that too much is being poured into the infrastructure. And I wonder if it does turn out that we have a surplus of these. If you expect the power that is being generated by them as part of these large projects is going to stick, that that won't ultimately leave the grid if, if we see some kind of data center collapse.
- [03:21]
Chris Wright
No, it definitely won't leave the grid. In fact, it's one of the great things data center development is doing is it's funding and underwriting the development of so much new power generation cap. Look, I think the upside for artificial intelligence is tremendous. But if there did turn out to be over investment and surplus of artificial intelligence, we would love to have the extra power that will allow reshoring manufacturing in the US and continual downward pressure on electricity prices.
- [03:50]
Joe
Interesting. Mr. Secretary, the NIMBY issue is one I'm sure you're familiar with. And I wonder if what you're announcing today in Kentucky is an answer to it. This is sort of the ultimate form of a closed circuit data cent. From what it sounds like. Would that include water as well? Will you have your own water supply for this campus?
- [04:12]
Chris Wright
Absolutely. But as you know, a modern data center uses precious little water. These closed loop cooling systems, you know, you build a giant data center and it uses as much water as a McDonald's. So we do have water supply here. We are building new power generation. But you're right, using federal lands that was already an industrial site during the early part of the Cold War and repurposing it for a data center. Tremendous community support to have that development going on here. And we are doing this at multiple locations across the Department of Energy, taking old industrial sites, bringing development to communities that are hungry for these investments, for these tax dollars and for these job opportunities. Well, yeah.
- [04:56]
Interviewer
How much opportunity is there, Mr. Secretary, to tap federal lands? Further, where should we be looking for the projects of the future?
- [05:06]
Chris Wright
There's a lot of 17 national labs and then additional federal sites. So we announced a big one in Portsmouth, Ohio. We have this one in Paducah. You'll hear about one in South Carolina. You're going to hear about one out in Washington State and Idaho. So we have a lot of federal lands. And there's a lot of interest to develop. And again, not just data centers and power production, but right here in Paducah in Kentucky, we're going to have a new company called General Matter is developing modern uranium in Richmond, essentially a more modern way to do what the giant buildings down here were built to do to. To fuel the commercial reactors that are coming in the nuclear renaissance. So a lot of new technology and industrial development across our country.
- [05:54]
Joe
Well, we don't see those buildings behind you right now, Mr. Secretary. If you're watching Bloomberg TV right now or with us on YouTube, you see Chris right in front of a beautiful open field with some trees. What's the timeline? How long will it take for you to get this site up and running and actually producing electrons to create whatever this data center will be cranking on?
- [06:18]
Chris Wright
So the data center should be under construction in the next six months. There actually is construction already underway. You can't see it because it's off to my right. Not in your camera. There's already 100 acres under intense development right now to build new uranium enrichment capabilities. And then the power generation and data center will come on in phases over the next four years. But simply a large commercial development already started here in Paducah, Kentucky. And this is again what the Trump administration is about. Let's build additional energy generation to put downward pressure on prices. And with that additional power we're going to generate, let's bring American jobs, American industrial might, and lead artificial intelligence right here in the United States of America.
- [07:06]
Interviewer
Well, of course, you tell utility prices are one thing, prices at the pump, Mr. Secretary, are another. And we have seen those climbing back above $4 a gallon as we're seeing oil prices today once again spiking as the president's threatening to hit Iran hard once again. How high, realistically, should we expect prices to go if there is no immediate reopening of the Strait of Hormuz in the near term, if the diplomatic process is indeed not going to be successful and we see a return to military action?
- [07:41]
Chris Wright
Well, if there's military action, it's relatively brief. We are using the United States military today to escort out oil and natural gas out of the Strait of Hormuz that actually has gone remarkably well, little reported in the news, and probably that's because we don't talk about it too much. But we are restoring supplies of global oil and refined products to the world out of that region, independent of how much supply.
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Interviewer
Sir, do you have, do you have an updated number for us in terms of how much is actually getting through the strait.
- [08:15]
Chris Wright
So a seven day trailing average right now out of the Arabian Gulf region is 13 million barrels a day, about half of that flowing through the Strait and half of that through bypass pipelines. So we're about two thirds of the delivery of oil out of the Arabian Gulf region as we were before the conflict started.
- [08:36]
Joe
That's really great information, Mr. Secretary. And I wonder your thoughts on what is now the involvement of Houthi rebels from Yemen creating a potential second choke point, as we've discussed in the Red Sea. This is something that Saudi Arabia had already tried to pipeline around with regard to the Strait of Hormuz. Is there a bypass to the bypass, as Javier Blas put that, that you're talking to Saudi Arabia about where additional pipe could be installed to get around this second choke point?
- [09:09]
Chris Wright
There is a bypass to the bypass called the Suez Canal. So you can go across to the Red Sea and instead of going south down to the Band El Mandeb, you can go through the Suez Canal. That is happening as we speak. There's both oil tanker capacity through the Suez and there is a pipeline that follows the same route, both of which will be employed to divert more oil that way.
- [09:36]
Interviewer
Well, of course, as we consider the supply of oil, we also have to factor in the reserves that the US has and that the rest of the world has been tapping into over the last several months as this conflict has been ongoing. Mr. Secretary, we know the SPRO is at the lowest level in four decades. More than that, and I wonder how much lower, realistically it can be allowed to go where the operational floor is and what the plan is if we reach it.
- [10:05]
Chris Wright
We are a long way from the operational floor. I've heard some people that don't understand. Not you, but I've heard people who don't understand how the SPR works saying, oh, it can't go below X amount of barrels. That's just not true. They seem to misunderstand that it's just oil in these caverns and otherwise it's air. All of these caverns are full of a combination of water and oil and they are always 100% full. We just use the water to displace the oil out of these caverns. But with the planned sales we have, which will run into this fall, we'll still have meaningful supply, over 200 million barrels of oil in our SPR at the end of those releases. And what's great about the releases we're doing through the Trump administration is we're not selling These barrels, we're trading them. At the end of the day, these releases will add more than 40 million barrels a day to the storage in the SPR. Are after the conflict than we had before the conflict started. These are additive, not subtractive.
- [11:03]
Joe
We're looking at $4.09 a gallon on average nationally today. Mr. Secretary, is it even possible to forecast where we will be by the end of summer, by Labor Day?
- [11:17]
Chris Wright
It's not possible to forecast. But look, all I can say is gasoline prices today are a dollar a gallon cheaper than they were four years ago. In the Biden administration that was just about a war on fossil fuels and selling fear. Here we are ending Iran's nuclear ambitions, ending a 46.
- [11:37]
Joe
Well, it had to do with the war in Ukraine as well, right?
- [11:38]
Chris Wright
Still have gasoline prices. That didn't interrupt the flow of oil. It was just the fear of the interruption of the flow of oil. The Biden administration feared that, that Russia would slow their exports of oil or refined diesel. And the Russians did not reduce their exports, just fear and bad management. They drained the SPR and they sold those barrels and didn't replace them. So misunderstanding energy and selling fear has not been effective. The Trump administration is about being honest, about being fact based, about solving our geopolitical problems and balancing our energy markets. I'm confident we will see gasoline prices continue their long term trend downward later this year. And of course we are working every day to lower prices for the American consumers.
- [12:28]
Interviewer
Well, you mentioned there, Mr. Secretary, finally the question of Russian diesel, which now is not being exported because so many refineries have been targeted by Ukrainian drone strikes. I understand that for, you know, most gas that consumers are seeing at the pump, it may be one thing and you may expect prices to go lower, but is the same to be said for diesel, which also powers a lot of our economy?
- [12:55]
Chris Wright
No, you're right. Ukraine's attacks on Russian refineries have reduced the supply of diesel globally. It's reflected in prices. The best offset we have to that is the American refining complex we are refining today. More diesel, more gasoline, more jet fuel than ever in American history. America has been the savior for world energy markets during this crisis and will continue to do so. But yes, of course we want to see diesel prices come down, increasing the throughput from the American refineries, something the EPA and the Trump administration is working with our refiners to just again move towards more common sense regulations and how refineries operate. That's allowing increased output. But to truly get diesel prices down low again, that'll take another year or so of President Trump, Trump's leadership, but the trajectory will be downward, downward with diesel prices, downward with gasoline prices.
- [13:54]
Interviewer
All right, we'll leave it there. Mr. Secretary, thank you so much for joining us. The Energy Secretary Chris Wright joining us live from Kentucky at the site of, again, a $100 billion data center project being spearheaded by Nextera and Brookfield.
- [14:06]
4imprint Announcer
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