LNG CEO: Asia, Europe Demand Propel U.S. Gas Projects

New Energy Finance Summit in New York City. One big question is about natural gas, especially as it increasingly replaces coal fueled power plants, and we are so lucky to have with us. Greg vs He is chief executive officer and managing director of llen G Limited based in Houston, joining us here New York. Greg, thank you so much

for being here. Let's just start with the idea of llen G, a major natural gas supplier working on a whole bunch of projects right now, trying to build out the infrastructure at a time when natural gas prices have kind of declined. Give us a sense of the layout of land from your perspective. Sure will, and thanks Lisa all.

It's great to be here. Uh, you know, it's it's interesting across the globe how competitive And I never thought in thirty nine years of the U S Energy industry that I'd be saying how competitive US gas is for export. And what people across the globe are seeing is this huge resource that we continue to make more and more of. It's at a price at Henry Hub, which is a stable price. Now I'm used to huge volatility in this price. They look out and see it very stable, and it's

a very favorable political and business environment. So it's very much pointing to the US to be a place to come. All right, who's coming here? Is it? China? Uh? If you look out, the big the big growth areas are going to be Europe and China. Um, I shouldn't say Europe and China, Europe and Asia. Obviously China the biggest component of Asia. But yes, Europe and China the two that are really hitting it hardest right now. Europe. It's interesting.

We had a kind of a industry meeting in Berlin a couple of weeks back, and the German Minister of Energy made the point of saying, we used to say we're all about being electrified, now we're saying natural gas is the best next step for us to take. That's a huge change for them, and they're gearing up. They're looking at re gas facilities. The whole region is putting in re gas facilities. They're very focused on l and G and Gulf Coast. L en G is going US.

Gulf Coast ellency is going to be the most affordable and competitive for them. So great, let's let's talk about the Gulf Coast. Is the infrastructure there and the Gulf Coast right now to really take advantage of this robust demand you've been talking about. It really is more so in Louisiana. I think that you know because of where Henry Hub is, it was originally designed to be the

place where all the gas comes on shore. Well that model is completely reversed now all the gas is up north and it's coming to the south, but the hub is still that indicate that everyone will look at, and all the end of the infrastructure has been built around that. So there's pipes that were granted, they were intended to take gas from south to north. Now they're all turning

around and bringing gas from north to south. But it can bring huge amounts of that gas at competitive it's to the Gulf coast, and you have a very friendly environment in southwest Louisiana where we are. They are really excited. They want to be like leading the US and leading the world in lergy exports, and they are ready for all that infrastructure development. How quickly does the US give out permits for you to do these projects. It's a

great discussion, Lisa Um. It's not a quick process, but it wasn't designed to be because it's the first and foremost to make sure it's the right thing for the country to do and to do it safely. As the process gotten faster, it has gotten faster. Yes, I think what we experienced and you're we're fully permitted. We've been through all the FIRC in the deal. We were ready to go with our Magnolia project. That was probably a

two and a half year, three year exercise. It's a little faster than that, but not materially, and I think as as business people and citizens, we should be a little bit okay with that that it's a good process that works. How competitive is US natural gas on the world market and what needs to change maybe to make it more competitive? You know, it's been very competitive of the market that we all looked at was Europe, and about a year and a half ago it turned where

it was much more competitive. It was very competitive versus europe gas. And you've had a little downturn this winner both in Asia and Europe, so it's kind of borderline, um, but it's still very competitive on the world stage. What you have to look for, you know, what we call freight on free on board, where it's picked up at the tailgate of a US plan, is a very competitive price. Then it's how far do you have to pay transportation

to travel? All right? So we are at the New Energy Finance Summit and natural gas is definitely a growing source of energy, but it's not a new energy and I'm just wondering, especially as it competes with renewable sources of energy, how does it compete environmentally? So it's it's a great question. I think there's two things. It's very necessary for renewables because you have the intermittency of renewables. Natural gas is a quick startup and can do that.

I think the US has shown the world a great example that natural gas is an excellent bridge fuel. And how long that bridge fuel is we don't know, but the market brought permissions down in the US by switching from coal to natural gas. The rest of the world has seen that and they want to replicate that. So still that just real quickly that where's the price of gas and what kind of how do you view it

right now? Well, it's interesting at the price of us Henry hub Is is probably two eighty to three dollars um. When I started in the industry in it was two dollars, So that that tells you that's a very competitive price. I think it's interesting that the volatility that we see over the Winner hasn't been there this year. In fact, the price got to its lowest point on If you remember that coldest day of the year when people in Chicago couldn't go out of their apartments, it's it's the

day of the price was the lowest is Winner? Okay? Interesting? Greg vc, CEO and Managing director of l n G A Limited based in Houston, Texas, but joining us here at the Bloomberg dew Energy Finance Conference in New York. We are broadcasting live from the Bloomberg New Energy Finance Summit at the Grand Height Hotel in Midtown, Manhattan. And when I think New energy. I think solar, I think wind. I think there's big wind farms onshore, offshore generating electricity.

So that's why I am very excited for our next guest, John Lavelle. John is the president and chief executive officer of Offshore Wind for Ge Renewable Energy. He joins us here in New York. John, Welcome. Thanks. You know, when I think about some of these big offshore wind farms, you know, it's just you know, you could really think about the scale of this business. So if you could just start us off in this size up what the

global wind business is and kind of the growth story though. Yeah, if you think about it today, there's about seventy gigawatts of offshore wind installed globally, uh, and conservative estimates would have that go into ninety gigawatts by That would be comparable to the entire installed base of the Okay for example. Uh. But I think beyond that, China, Taiwan, create Asia, the northeast of the US are coming strong, and I think that number could grow by another fifty percent, So I

think you could end up with fifty gig watts globally. Okay, So demand and use of wind power definitely increasing, and there has been a consolidation as far as market share goes with General Electric invest as some of the other big turbine producers. Profitability, however, has been a challenge. Can you talk a little bit about why UH profitability fell at the end of last year and kind of what

we'll what we'll pick it back up going forward. Well, you know, from an offshore wind perspective, you know, we're just getting in the game, you know, so Gees not UH has not historically been in offshore wind. We got into offshore wind when we acquired Alstom. So our game today is to invest, to generate, to develop the technology to compete in the future. So we're we've invested, we're investing now two developed the Holly at X, which is the largest offshore wind turbine in the world by far um.

It'll stand nearly nine feet off the ocean floor, the blades will be well over a football field long each and it will drive the economics low for our customers and if we can help our customers compete and grow, we'll be successful to in the future. So our our our point is we're gonna we're investing and offshore because we see the market growing. We see that GE can add value with technology development. We know how to do that. We have a global scale. We've been in the energy

industry for a hundred years. Of all the electricity that's produced comes from some form of G technology. So I think we can help the industry grow by playing So how competitive is wind energy relative to maybe traditional energy sources and maybe even Yeah, it's a great question because you you know, in the end, you have to compete right against everything and uh and as you as we look at these technologies. Uh, in all the business I've run and worked in every facet of the energy industry,

so I've watched the costs come down with volume. So it's a it's a volume curve as cost comes out. More volume you have, the more productive you have, the more scale you have, the more your costs will compete. We're seeing bids now in the UK. UK auctions will come up in June. You'll see those prices. We've seen the auctions in Germany. Uh, you saw the auction in Massachusetts.

You've got offshore wind now competing with with on shore levels that have had a you know, almost two decades of a head start, right, So you see the costs come down. You want to get to the point where it's unsubsidized so that you can compete without subsidies, with zero subsidies. UH. And what helps you get there. It's scale, it's size, so that you get you you minimize your infrastructure. Every we we had a six megawatt machine, now we

go to a twelve. That means you have to build half the pedestals out in the ocean, you have to build half the cabling. It's easier to service. So as you take cost out and you get volume, volume and size and standardization will help the industry. So John Leavel, president and CEO of for the offshore wind unit of GE Renewable Energy with us here right now, I'm wondering, how about storage. That's been one of the challenges, certainly for solar. What about winds? Yeah, a great question. In

our renewable energy portfolio. UH. In g E, we have on shore and offshore wind. We've got hydro. We got a hydro business. We have an LM Blade Manufacturing, we acquired them in two thousand seventeen, the largest maker of blades. We have a grid business. G IS Grid all the transmission and distribution and very, very important to have that grid business marry up with the wind because you have to be able to stabilize the grid as you convert

from baselow nuclear and coal to cyclical renewables. And then you get the storage. Should we also have a hybrid and storage business that we've just put in place, And so I think, uh, the value of us being able to bring green electrons if you will, two people that want it, not just households, but two companies that have said, well, by green having a storage so you can store the the wind energy. How I just think I'm through battery story,

through battery battery storage. Yeah. Yeah. You can decide where you want to put it. Where you want to store it. Do you want to store it at the site. Do you want to store at a local distribution, uh network out in your neighborhood? You know? Where do you store it? So? What? So what are some of the constraints, Like I don't want a big wind thing in my backyard. Maybe? How about for offshore? What are the constraints whoever owns who has the rights to that water? Say, I don't want

to decide where to put these things. Keeping it simple, Paul, I think normally it's the government the land, all right, and we'll allocate the land through some process, whether it's in the US, Taiwan, Japan, China, uh, you know, UK, whatever, they allocate the land. Uh. Then in all the cases they have to go through some permit process typical to a zoning board in the local town. You'll say this is gonna be built. You have so many so much time to raise your questions or your concerns that have

to come. And it's a lot. It's the birds, right, So there's concerned for the birds. Uh, there's concerned for the site in the visual impact it may have for local residents. So putting these things deeper and deeper into the ocean, it becomes uh um, you know a question for that helps right farther you're out. But then gott to bring the power back. You have to bring the

power back. So some of the some of the projects like are going on in the UK now are so far off they're gonna use high voltage DC interesting to bring them back. John Lavell, thank you so much for being with you. John Lavell, President, chief executive Officer of the Offshore Wind Unit at GE Renewable Energy, joining us here at the Bloomberg New Energy Finance Conference. We're a broadcasting life from the Bloomberg New Energy Finance Summit at

the Grand Hyatt Hotel in Niptown, Manhattan. Right now, we're gonna turn our attention to the America power markets. A lot of change going on there as renewable sources compete with some of the more traditional sources of energy in this country. To help us walk through that story, as Paul Browning, Paul is the President chief executive officer of

Mitsubichi Hitachi Power Systems America's Paul, welcome U to the show. Paul, give us a sense a kind of where we are in the US in terms of power generation to what extent are renewables really becoming a competitive player in the marketplace? Well, thanks, Paul and Lisa. Um. Yeah, so there's really a lot of change happening in the power sector right now. We are seeing the cost of electricity from renewables and battery

storage dropping rapidly. At the same time, we're actually also seeing the cost of electricity from natural gas power generation dropping rapidly as well. Um, And so there's a there's a you know, a real uh competitive dynamic. They're happening between renewables with storage and natural gas competitive endemic or race to the bottom, either one go on. And of course it depends. You know, the cost of renewables. You know that the cost of solar here in New York

City is very different than in the desert in Arizona. Um, the cost of natural gas and different parts of the country is different. So you know a lot at the times. The answer to you know, which one of these is going to be less expensive is you know, it depends. So but in this race, a lot of governments have subsidized the renewables to try to reduce the carbon emissions. How much is that necessary to get the renewable market up to speed to truly be competitive in a free

market type of environment. You know right now renewable plus battery storage needs a subsidy in order to compete with natural gas in almost every market. Significant subsidy, well investment tax credit that exists today is the kind of subsidy it needs to be competitive in in in some markets. Um and so uh and and you know the thing that I always talk to people about is is um. You know, natural gas is not standing still. Um. You know, our turbans are less expensive today on a dollar per

killer lot basis than they were in the past. They're more freel efficient, and the price of natural gases dropping due to new drilling technologies, so, you know, while and the good thing for consumers is they're getting lower carbon, lower cost electricity, you know, as we all compete with one another in a you know, in a marketplace where competition and technology is determining who wins. So it is big coal in terms of the context of energy or electricity.

Is big coal just done? Is its day over well in the United States right now, it's just it's cheaper to produce electricity from natural gas and renewables than it is from coal, And of course it's also much more carbon efficient, and that combination of cost and carbon efficiency is just very, very difficult to beat. So I really

don't see any new coal power plants being built. And as a matter of fact, what we're seeing is a lot of you know, coal that was built in the sixties and seventies is now being retired and it's being replaced by a combination of natural gas and renewables. So talking about bringing down the cost, how does artificial intelligence play into this, especially as it takes over the human

component of running some of these plants. Yeah, so, actually, you know AI, what we're really not there's only about thirty five people who work in a combined cycle natural gas power plant, and actually less than that in a renewable power plant. We're actually not going after the people with our AI. What we're really going after our lost production and unplanned downtime, which are very big expenses for

our customers. So we're trying to eliminate unplanned maintenance because the AI is able to identify a problem before it becomes a problem, and we turn unplanned maintenance into planned maintenance and and do it in a very cost effective way. Paul Sweeney, this is such an interesting point because people look at artificial intelligence is the bogeyman at the boogeyman for why people are losing their jobs. But this is an example of how to increase productivity and profitability without

actually cutting jobs. Yeah, exactly. It's interesting. But just technology in general, is how much is that impacting the traditional power business in the in the U S. When I think of these power plants, I think these monster things. Again. I live New Jersey, so I see these monster plants all over the place. We have lots of power plants and lots of plants and new but house technology impacting

just that creation electricity. Yeah. So as as I said before that you know that the biggest impact is the cost of renewables, storage and natural gas power generation are all dropping dramatically and so and those happen to be the most carbon efficient choices that we have right now. You know that combination of natural gas and renewables is about eight lower CEO two emissions than a retiring coal fired power plant. So we're actually in the US people

a lot of people don't realize this. In the US power sector, carbon emissions are down thirty three since two thousand five. UM. We sponsor Carnegie Mellon University that they have a website that the Switch from It's it's the switch from coal to a combination of gas and renewals and you can go to www dot Emissions index dot org and once a quarter we update that number. One word, Paul Browning, if you've been in this market for decades, if you had to invest in one renewable energy source,

what would it be. I just started a renewable power technology company yesterday there announced it's it's a it's a distributed power generation for PV solar and battery storage. There you go, solar and battery storage. Paul Browning, thank you so much for being with us. Paul Browning as President, chief executive officer of Mitsubishi Hitachi Power Systems America's joining

us here at the Bloomberg New Energy Finance Conference. So interesting to sort of see the price dynamic as everybody tries to bring costs down, including gas, so it makes it a kind of shifting competitive landscape. Some big news in the healthcare industry four the United States President Trump's administration, the Department of Justice coming out and now trying to claim that the entirety of the Obamacare Act is unconstitutional. Joining us now is Max Nisson, biotech, fharma and healthcare

columnist for Bloomberg Opinion. Joining us from our Bloomberg Interactive Broker Studios. Max, what exactly just happened and how big of a reversal is it by the do o J. It's a pretty substantial one. So the d o J had had previously supported the lawsuit in partial form, and that itself was pretty unusual. You know, the d o J generally tends to defend the law of the land

as opposed to um, you know, supporting case Concer. But they had only they had elected to keep big chunks of the A C A. So this move would basically means that they're supporting a dramatically more disruptive potential result in which really the entire and the entirety of the

A C A would go away. That's everything from the Medicaid expansion to the changes to the individual market protections for people with pre existing conditions, and you know, little things like calorie counts on menus and the FDAs ability to approved by similars. It would be just a giant mess. So, Max, what do you think changed for the Trump administration to take this more aggressi approach here? I'm actually still trying to puzzle that out because from a purely kind of

political and policy standpoint, it's it's pretty puzzling. You know, the ten mid terms kind of told us that Americans are gravitating towards liking the A C A more than they did over the initial years of his implementation, and um, you know, the move to to kind of more aggressively try to take it away, uh not only kind of goes against what the lesson that the administras should probably

should have learned. But against even its own budget, which you know still you know, has massive cuts to Medicaid and UH repeals parts of the a c A. But doesn't you know, do what this case does and just kind of you know, potentially rip away coverage from from tens of millions of Americans overnight. Yeah, I'm wondering from a market perspective, are their companies that you would expect would either benefit or UH lose out should the Department

of Justice be successful in this attempt. So the you know, insures that are focused on on medicaid and the individual market would definitely suffer. You know, they would get some some market power back in the form of reduced regulation, but you know, the millions of customers they lose with would outweigh that, especially in the near term. And then hospitals in the sense that you know, when people don't

have courbadge that they don't get care. But you know, it's still pretty unlikely that this case will will go through or you know, actually end up invalidating the a c A because it's based on pretty shaky legal ground of the idea that you know, negating the penalty of the individual mandate somehow means that the entirety of the rest of the law when should be invalid when Congress is pretty explicitly given an indication that it doesn't think that's going to be the case, because when it had

the opportunity to do exactly that, it elected not to. So, Max, what do you think the next steps are here? Um? You know, I think we'll see kind of an aggressive pushback from Democrats who are actually, you know, outloading a set of bills that would actually strengthen the A c A today in in pretty pretty good timing for them. It just gives them a kind of a new avenue of attack and and a really immediate one. Well, but Maxie said of liberal opinion, this is exactly where I

wanted to go with you, this whole political deliberation. What politically was President Trump trying to go for, perhaps the Department of Justice, given the fact that in the midtell elections it did seem like voters did want the Obamacare, they did want some sort of healthcare base for people who might work you know, gigs or things where they

don't get healthcare. Yeah, I that's what makes this so inexplicable, and beyond just what you saw in the mid terms, you also have a bunch of states and and pretty republican states electing to adopt the medicaid expansion that we had through through referendums. Now even Kansas is considering it, So that the move to kind of try to uproot this law entirely is really just at the moment at least inexplicable, maybe a triumph of of ideology over over

smart strategic political thinking. I really don't know what what they had in mind. Maybe we'll find out, but it clearly seems to indicate that they haven't really learned the political lesson about healthcare, and they're gonna campaign on a full repeal once again, which I don't think will work

out terrifically well for them. Max. Do you think this was just a coincidence that the Muller report comes out and gives the president of victory and and then we've kind of got this announcement or just I mean, if it was deliberate, I can't imagine what what the thinking was, because you know, it gives Democrats are ready made opportunity to pivot towards an issue that's a clear winner for them with voters as opposed to the Miller Report, which

you know, I haven't seen the whole thing, but you know, at least optically, at least in the beginning stages, didn't seem to damage the president as much as some people expected. So now they have a perfect opportunity to pivot away from it, and they'll use it. So we've talked about this before, Max, and that is that Obamacare is not perfect. It's been highly flawed. The rollout was not perfect. Uh,

there are ways to make it better. There's a question of, you know, could this be uh the first step in the GOP presenting some sort of plan of their own to grab with some of the healthcare issues problems in

the United States. You know, they if there's such a plan from the Trump administration, it doesn't really exist or doesn't deviate particularly far from you know, what they what they tried and failed to pass over the last couple of years, which you know, the main effect of that was to basically kick a lot of people off their coverage, make government healthcare and it's generally more difficult to access,

and reduce regulation. Um. Other than that, there's not kind of an overwriting ethos or or any plan that does much more anything different than that. And uh, you know, if one exists, we've yet to see it. Maybe it'll come. But considering that this, you know, this would repeal the law with without any effort at a replacement, and just rely on a divided Congress to to finally, I guess come up with something. Uh just don't don't don't see yet, Maxineessa,

Thanks so much. Max's Biotech format and healthcare calumness for Bloomberg Opinion, joining us in our Bloomberg eleven three oh studios. Thanks for listening to the Bloomberg P and L podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Paul Sweeney. I'm on Twitter at pt Sweeney. I'm Lisa abram Woyit's I'm on Twitter at Lisa abram woits one before the podcast, you can always catch us worldwide. I'm Bloomberg Radio