This is Tom Rowland's Reese and you're listening to Switched on the podcast brought to you by BNF. The first one hundred days of Donald Trump's second term in office have now passed, and in this short period of time, the impact of his administration has already been deep and
wide ranging. Prior to retaking the presidency, Trump threatened to cut some of the Biden administration's Inflation Reduction Act tax credits, clamped down on ESG investing, and repeal clean energy policies, only for some court states and members of Congress to steiny his immediate efforts. Having assumed office. Elsewhere, his Liberation Day tariff announcement created significant turbulence on global markets as funds and investors struggled to find certainty in safe havens.
With most tariffs now being paused, some rolled back, and others entering negotiations. The current political landscape in the US is confusing, with some decisions taken at pace and with little warning, and overall, the impact on the clean energy
sector seems hard to weigh. To help get a better understanding of what has happened up to this point, on today's show, I'm joined by Derek Flakol Bloomberg and EF Senior Policy Associate for North America, and together we discussed what has unfold under the first hundred days of the second Trump administration. B ANYF clients can find related notes, including analyst reactions to breaking news stories at BNF go
on the Bloomberg terminal or on bf dot com. All right, let's get to talking about one hundred days of Trump with Derek. Derek, thank you for joining us today. Happy to for those of you that are BNF clients and that show any interest in US politics. I presume that Derek doesn't need any introduction because he is our main man when it comes to figuring out what is going on in Washington. I would also add that he has
knowledge of many other topics. At Bloomberg, we have this thing on our internal system where we can put a comment about ourselves, and Derek says approximate knowledge of many things. This is a bold face lie. He has in depth knowledge of many things. I have many times try to outflank him on esoteric knowledge, whether it is physics, the philosophy of Carl Popper, Japanese anime. So Derek knows many things, but we are truly playing on his home turf right now.
So I'm really looking forward to this conversation and I will let you speak in a moment, Derek. But just one other sort of point of framing here is that with this latest US election, it has been a lot of work for him. For those of you, again who have been F clients, you will have remembered the series of election notes we did in the build up to the election, and then the subsequent analysis that Derek has been working on himself or collaborating with others covering all
of the changes of this latest administration. And as a particular moment that I want to cast Derek's mind back to, which is when we did and ask BNF, which is a webinar for our clients on the day after the election, analyzing what we expected to happen based on the results of the previous day. So, Derek, do you remember that conversation that we had and what was our take on where things were likely to be did from the offset with this new administration.
So we tried to assess the different possible outcomes of
the election based on control of Congress. Both houses could be Republican or Democratic, and both needed to agree on any legislative changes and control of the presidency, which is really primarily about administering and implementing regulations for loss that Congress passes, whether those are tax credits where the Treasury Department gets to write the rules for how those were claimed, or grants and loans where places like the Department of
Energy or Environmental Protection Agency can select the recipients and the process by which they're chosen. So our whole thought overall was that generally speaking, while this would vary depending on the mix of power in the legislature and the executive branch, intermittent renewables like wind and solar and some related sectors like storage would be most compromised, I guess, or face the biggest downgrade in their prospects from a
republican control of government. The sectors that would face the best improvement in their prospects from real and control the government would be fossil fuels, coal, oil, and gas, and then a few dispatchable or so called baseload renewables like
hydro power and potentially biofuels as well. And then somewhere in the middle were different kinds of emerging technologies like hydrogen and carbon capture, which are fairly close to the oil and gas industry, but maybe we're dependent on government subsidies that could end up facing cuts, as well as some things like transmission, which has some resilience in national security characteristics, but are also seen as closely tied to renewables.
As we all know, the Republicans won both Houses of Congress and the presidency, so that's the scenario we're dealing with now.
So that was our expectations back then, and obviously there's been a huge amount of activities since then. I'm sure that has translated into many late nights and very busy days for you personally. And I'm sure that no day was more frantic than that first day in office, where there were so many executive orders signed. So this has been one of the themes of the presidency so far.
The use of EXECUS fielders, particularly on that first day, did play out how we expected in terms of the immediate actions taken.
Initially on the first day pretty much. Yes, we saw Trump's early executive orders, such as declaring a National Energy Emergency and unleashing American energy focus on trying to reduce barriers and ease permitting for the buildout of fossil fuel infrastructure, but also for biofuels and bio energy, geothermal, hydropower, nuclear, and critical minerals, all of which are either dispatchable or base load energy sources or have certain national security characteristics.
At the same time, a lot of these executive orders also called for pulling back funding for clean energy related programs and removing regulations that try to promote a transition away from fossil fuels. So this included specifically called out electric vehicle charging funding, but also looking at trying to pull back money from the Inflation Reduction Act Infrastructured Investment of Jobs Act, the major sort of clean energy investment
programs under his predecessor Joe Biden. And I should also note some specific executive orders that try to target permit and leases for offshore wind and to lustser extent on shore wind as well.
I could categorize executive orders into three buckets, maybe ones that have an impact, you know, indisputably ones and this is a specific I think Trump phenomenon that don't immediately have an impact because they are trying to do things that he doesn't have the power to do without Congress or support from the legislature, but maybe will lead to activity as they fight it out in the courts, So
things that could make a difference. And then the third category is executive orders that are as much symbolic as they are actually impactful. So which of the of the actions taken on that first day and in subsequent executive orders as well, how does it fit between those three categories overall?
If we're to speak to some of the symbolic actions, you could maybe point to a series of orders on a beautiful clean Call that President Trump signed after his first day office. That's getting a little bit further in their chronology, but it's the easiest to explain this way effectively. There's a lot of discussion of trying to promote more capacity market payments for coal in particular and fossil fuel generation generally, and this is kind of a repeat of
what he did in his first term. There were executive orders to that effect, and they didn't really stop the general decline in coal power in the US or the rise of natural gas and renewables. In terms of your first category, the things that will sort of bear fruit, it should be noted that there were some immediate action on trying to designate projects for accelerated permitting. The Army
Corps of Engineers has produced a list. The Department of Interior has tried to put out environmental impact statement guidelines as fast as twenty eight days for fossil fuel infrastructure. But here's the tricky part. It's very hard to tell the sort of first category of executive orders you're talking about with the second category. Generally speaking, the Trump approach has been to basically make pretty sweeping claims and then
fight things out in the courts. Some of the recent permitting reform procedures from places like the Department of Interior fall into that. If you're trying to accelerate permitting under the National Environmental Policy Act, there's actually nothing in the law to my knowledge, that allows for a faster emergency procedure, unlike the Endangered Species Act, Clean Water Act, and other laws that other agencies from acting under, and so you can be sure that that's going to be challenged in
the courts a bit more. Another area where there's a bit more ambiguity isn't spending. Shortly after President Trump signed in order to try and pull back clean energy spending from the Inflation Reduction Act, we've seen a major move from different government agencies, led by Elon Musk's Department of Government Efficiency, to basically pull back not even spending that hasn't previously been contracted, but contracted funding which had previously
been considered pretty sacro sayct. So this has gone to courts, but operationally there's been a lot of back and forth and mixed reporting and changes about who and whether different businesses or nonprofits can access loans of the Department of Energies Loan Program Office, grants from the doe's Office of Clean Energy Demonstrations or the EPA, and so forth. So this is still really being litigated, but right now Congress hasn't been pushing back too much, largely because they're of
the same party as President Trump. It remains to be seen how much of these grants and programs will ultimately survive, not only you know, legally and in terms of the staffing which has also been cut back, but in terms of trust from the business sector, and in terms of how many grantees can really survive without some of the government loans and guarantees being accessible to them as they face rise and costs and other pressures.
So what you're saying is even if ultimately it proves to be the case that Trump has proven wrong in his assertion that he has the right to make some of these cuts and some of these changes, it's too late because for those areas, the damage is done.
Yeah, we've already seen this happen with some specific projects. The battery manufacturer core Power, if I recall correctly, had a conditional commitment from the Department of Energy's Loan Program's office to build a battery manufacturing plant in Arizona, and it's had to cancel that because they are aware that they're not going to get funded in time. The effect is going to be particularly intense, not only for manufacturing for existing clean energy technologies like wind and solar, but
especially for new ones that haven't really scaled yet. The Office Clean Energy Demonstration's Industrial Demonstrations Program, for example, was meant to fund major first projects to off take clean hydrogen or to implement carbon capture and industrial processes, and to help create low emission materials like steal aluminum and cement.
And without some indial help to get those mergence sectors off the ground, we might see considerably less progress on those in the United States than we could otherwise expect.
Got it. And even if that help proves to be legally secure, the uncertainty has already had its effect, is what you're saying.
Yeah, there's also something to keep in mind. There's something called the Impoundment Control Act, which allows the President to submit something called recisions basically cuts to Congress, and if they approve, they can pull that back. The House and Senator currently voting on a giant budget package, and it's part of that. They might agree to rescind some of that spending. Now, it's possible that that will fall out of the usual legislative time window when you're allowed to
do that. But this is going to be a live area of contention, not only in courts, but also in Congress too.
This is the first time I've heard of was it the Impowerment Control Act? Yes, I told you that Derek knew his stuff that we're playing on his home turf right now. While on the topic of things that President Trump and his administration would symbolically like to impact but maybe don't have the leavers to impact them in its own way, and there's this whole area of things that
he can't legally control. But there's another area, which is where a president, whoever they are, they can't change fundamental economics. And so one of the things that seems and people have been calling this out a little bit in the public domain, but is a bit of a paradox, is this idea of bringing down gasoline prices, which I believe is something that Trump has spoken about wanting to do a lot, and then this idea of drill baby drill,
because cheap gasoline prices means cheap oil. Cheap oil means, particularly given the marginal cost of a barrel in the US, which is not at the bottom of the supply stack, it's one of the more costly barrels globally, the US shale industry needs high oil prices to drill baby drill. So there's this paradox. Do you have a sense from any of the actions that the administration has taken, which of those two seemingly conflicting ideals they are in favor of, or anything to resolve that paradox?
Well, as with a lot of things, the trum administration is kind of trying to pursue both objectives at once, but it's hard to be really confident that that'll work. I think on the cost side, they're trying very hard to remove regulatory barriers, including you know, pollution controls and long permitting timelines in order to allow projects to get built. We've seen a lot of this in particular, and trying to expand global loqui financial gas exports by approving new
export terminals which the DOE has control over. At the same time, fundamentally, it seems like there's a very strong interest in low oil and gasoline or petrol prices. Certainly, some have attributed the recent OPEC plus production cuts partly to an attempt to curry favor with the president, and I believe there's been some cheer leading of the general
decline and oil prices. But of course, if you look at the Federal Reserve Bank of Dallas survey of energy producers, there's not a lot of happiness with Trump's recent policy moves and tricle support for lower prices. In particular, the sense that the tariffs might hit global aggregate demand and thereby drive oil prices down has caused a great deal of ajitah among some of the major oil and gas
industry backers of Trump's administration. So ultimately it seems like there might be a little bit more of a hope or a prioritization for cheap consumer prices, with the sense that in the longer run, removing regulatory barriers opening more federal land for oil and gas production will make things cheap enough to expand supply. Ultimately, the real growth in US supply has mostly been from the shale patch, which has those surprisingly rapid price sensitivities, even if they're often
able to undercut other producers. In short, we're going to have to see what happens, but I'll just leave you with the classic commodity traders point of view. The solution to high prices is high price, and the solution to low prices as low prices. We're going to be on a bit of a merry go round for quite a while going forward, based purely on economics, to say nothing of the policy.
Yeah, I mean well, based purely on the economics and what OPEC decides to do, which is always this uniqueness to the oil market, and presidents of the United States are famously not able to influence that. You touched on something else, which is a major topic here, which is Tariff's What was the date of liberation day? April second April. Second.
I don't know how you have been able to sleep since then, because I'm sure that one piece of analysis you've been working on, you wake up the next day find you have to delete it because there's new news and the things have changed again. Have things sort of settled down? I mean, are you starting to see a little bit of a an equilibrium setting in, you know, because there's been a lot of flip flopping, and you know, Trump detractors will say that that's because keeps changing his mind.
His supporters will say this is all negotiation tactics. We're not here to determine which one it is. But the fact is is that what has been said has changed pretty frequently. So are we seeing an equilibrium on tariffs generally? And where are you seeing the biggest impacts?
Well, I think the calm that we're seeing now isn't so much the calm before after the storm as the eye of the hurricane, right, a sort of calm patch
before further progress continues. Just as a reminder, we are in the middle of a ninety day pause on high tariff rates on a select set of countries such as the European Union and Southeast Asia, but there's still a general ten percent tariff on all imports to the United States, with a handful of exceptions which are mostly following into other categories like autos, steel and a lunium or Mexican
Canadian goods that were tariffed separately by Trump earlier. All of these are kind of in the midst of ongoing negotiations.
The administration has touted good talks with nor Way, South Korea, and Japan, just to name a few, But the real big enchilada here is effectively the tariffs on China, which are currently at one hundred and forty five percent based tariffs for every good, with higher tariffs on a lot of goods, particularly in the energy sector, especially on batteries, on electric vehicles, which China doesn't really sell much to the US, and for solar which China has not directly
sold to the US for a long time because those exist. In short, we're seeing a bit of a deadlock between the Trump administration, which is claiming that it might be willing to flower some tariffs for a deal, and reports out of China suggesting that there might be some reduced tariffs at least for industrial inputs. However, there's disagreement between the two sides on whether talks are even happening right
now at all. There's disagreement about protocol, with Trump preferring a face to face with Chinese leader she's in pink and the Chinese bureaucracy preferring a more formal process. In short, we are waiting to see what happens with a lot
of these things. The Canada and Mexico tariffs are further complicated by the fact that probably by the time this pot is out, will have a final determination on the government and Ottawa in Canada, and that'll contribute to questions of whether the US Mexico Canada agreement, Trump's revamped version of NAFTA gets renegotiated yet again this year or next.
The current Prime Minister Mark Carney of Canada has argued that they should accelerate the USMCA renegotiation, which is due next year, and so we could see a bit more instability and uncertainty moving forward before things settle down.
Just reflect on what you said about China, like really highlights the complexity of analyzing geopolitics. The fact that China and the US cannot even agree on whether they are talking to each other it's publicly wow, But I want to I want to actually drill down a little bit on China because you know, you mentioned the tariffs on sola specifically, So when I think about what the US is importing in terms of energy equipment, and you mentioned the US doesn't actually buy that many evs from China.
Maybe batteries is a different topic, I'm not sure. But one thing that comes indirectly from China that the US does import in large volumes solar. So, for those of you not familiar with this, there's for a long time been really high tariffs on Chinese solar from the US, and that goes all the way back to Obama. But instead, Chinese solar manufacturers have been setting up factories in Southeast Asia. A lot of the equipment, the upstream equipment is imported
into Southeast Asia from China. The later stages of assembly happened in Southeast Asia. Then it's exported to the US, thus circumventing these tariffs. And I feel like that has been a situation that everyone has been kind of content with because there's sort of this very public facing We're not being flooded with solar from China, but on the reality for the industry, they still have access with maybe a little bit of a markup to all the cheap
solar from China. Now, with these very high tariffs on Southeast Asia, that loophole appears to have been shut. And I've been to our solar analysts about this. I thought they would be freaking out, and they were like, oh, no, you know, because all of the major developers they've built up inventory of solar. They've got enough for at least
the next year or so of build. So then the question is is do we see this situation still being as it is in a year's time, if that's the rough timeline of whether tariffs really start to impact the energy transition in the US. Do you think that the current tariffs on Southeast Asia are part of a negotiation or are they likely to stay in place and you know, would impact the solar industry in the ways that it could.
Well, there's two different tariffs to be speaking about here, a set of tariffs on all goods from Southeast Asia that the Trump administration imposed, then paused, and seems to be negotiating about as we speak. It's hard to be predictive of those. But the recent solar specific tariffs were the result of investigations at US agencies initiated by labor
unions and US manufacturers. So those tariffs, you might have heard the eyewatering number of three thousand percent on Cambodian solar imports, several hundred percentages on imports from certain manufacturers in Vietnam and elsewhere. Those certainly raise prices, no question. But when I've spoken to our colleague poll about this, who covers this, there's not a lot of concern there. Ultimately, even when you add costs, solar is generally still fairly cheap.
There's been a tendency in Southeast Asia to shift production and onshore some of the upstream aspects to minimize some of these so called anti circumvention and anti dumping tariffs that target assembly of Chinese components in Southeast Asia, and more to the point, there's growing capacity in other markets like Turkey and India, to say nothing of the US itself,
where there's somewhat economically competitive production. At the end of the day, it should be noted that Southeast Asian solar still tends to be the cheapest thing that the US can import, and it still remains economically competitive when you consider the higher costs of upstream imcore components that are then assembled in the US and to US made solar modules. So things will be a bit more expensive, but the hit isn't necessarily going to be as intense, at least
for commercial and industrial or utility scale solar. You might see more damage to the rooftop solar market, which is a bit more price sensitive.
So while it's talk about global trade and tariffs, a few weeks ago, we did a podcast with our colleagues Andy Leach from our batteri's team and Matthew Hill's from our Global Trade and supply chains team, I'm talking about the EU's battery strategy, which has somewhat similarities with the US's in that it is about creating a space for a homegrown industry to develop. They're they're using joint ventures with Chinese companies and that's how you can access the market.
But the question I asked them at the time is are they shooting themselves in the foot a little bit? Because the real prize is dominating the automotive industry. And so if we believe the future of the automotive industry is electric vehicles, by kind of fixating on trying to have their own battery supply chain. Are they stemying themselves from what actually matters, which is dominating vehicles And shouldn't
they just be importing Chinese batteries. So with that in mind, what are the tariff specifically on on batteries and I for the US and are we seeing a sort of a similar I would say maybe paradox at the heart of the strat I'm not front.
Well, the Trump administration isn't particularly eager to transition the US auto industry to electric vehicles. They've cut back or tried to cut back a fareantom of regulations on that front. But accepting the premise that evs are probably going to be the future of the auto market, which I think we believe, there's decent economic reasons to want the batteries at home. That's kind of a lot of the value of the car and a lot of the jobs associated
with art could be associated with making the battery. Right now, the US has already sort of erected higher trade barriers against batteries for electric vehicles than it has for stationary storage. That was true even under the Biden administration, and certainly while it takes some time to scale up domestic battery production, it's going to be a real challenge to raise the costs of them further by raising the costs of imported batteries.
On top of that, even US made batteries might depend on upstream components from China, particularly critical minerals which are largely processed in China lithium, nickel, and so forth, and the Trump administration is considering raising additional tariffs on those and also graphite and which are a critical component of the cost of battery and which could face tariffs of
over nine hundred percent under another investigation that's ongoing. As our colleague Eli Gomez Callus has written about, on the stationary storage side, the effects are actually more immediate and somewhat more dire, because the US really does import the vast majority of its stationary storage lithium ion batteries from China, and it's not going to be able to upgrade its manufacturing capacity soon enough to fill that gap, if at all.
Really imports would still be a critical component, and so that means it's going to be considerably more expensive to import something that makes renewables a bit more competitive, especially at peak power demand times. In the evening with natural gas and peaker plants.
Yeah, that's interesting, and that will potentially have an impact on markets like California and on KOT the power market in Texas which have high penetrations of solo and whose battery markets were then following suits. So we will see what happens there, and in particular in Texas, if you can't manage peak load, then that can have serious impacts on power price. And that's a region where there is ambitions to develop AI data centers on the basis partly
of having a stable power supply. So it will be really interesting to see how that particular impact that the knock on effects that could happen. That's just my two cents, just adding that in As because my jam is analyzing power markets. So final angle, I want to look at this first hundred days from and I can't believe we haven't really talked about it yet, but I kind of wanted to save one of the big ones to last,
which is the Inflation Reduction Act. Looking more and more like, I don't know, this sort of ship in the water that is going to just have holes put in it from all sorts of different angles. I don't know, but it is certainly endangered, at least in terms of the rhetoric. So, firstly,
is it actually that endangered. I know that there's a little bit of nuance there, and has anything happened in the first hundred days that gives us any more insight into whether the tax credits for wind, solar storage, electric vehicles, hydrogen carbon c from storage, how are they all faring or have they fed in this first hundred days.
Well, it's important that you mentioned the tax credits because those really are the bulk of the Inflation Reduction Acts funding for clean energy technologies, at least about seventy five percent of the clean technology deployment funding that we cataloged back when it was passed, and in fact probably more because the tax credits are uncapped a percentage that would really only grow as certain grant your loan programs get rolled back. So generally speaking, this is a thing that
you would need Congress to take away. Ultimately. You know, if you just pay the government lesson your tax forms and show that you've documented and complied with the various rules for your tax credits, that's a little bit safer and harder for the executive branch to interfere with than say a grant or loan that has to be continuously funded from government bank accounts, although we'll also see what IRS enforcement looks like later in the year. At the
end of the day. In the background, with all the sort of sterm and drang of the Trump administration's executive policies, there's been much quieter work going on in Congress to try and arrange a tax bill by the end of the year in an attempt to make individual tax cuts
in Trump's first term permanent. As part of that, they're looking for everything they can find to sort of cover the costs of that, and among those sources to funding, the Inflation Reduction Act has looked like a prime target due to controversies about supporting electric vehicles, about the intermittency of solar and storage, and so forth. That said, the vast majority of the sort of project funding for the Inflation Reduction Act has gone into Republican states and districts.
We're seeing a lot of factories claim manufacturing or forty five X tax credits, and a lot of those factories have their off take dependent on keeping the existing Clean Energy Deployment tax credits with their domestic content bonuses intact. Twenty one Republicans in the House and four Republicans in the Senate have both publicly put out letters saying that any changes to the Inflation Reduction Act should be cautious
and they shouldn't jeopardize exists projects. All of which is to say, the tax credits are probably going to survive in some form, but we could still see some major modifications through them, such as tougher rules on domestics content sourcing. We're on keeping Chinese firms out of the tax credit subsidization scheme, or potentially earlier phase outs for those tax
credits so as to reduce their effective fiscal impact. Now, what's usually happened to the tax credits before the IRA is they have a sunset date and then Congress swoops in at the last minute to bring them back as part of a negotiation. But if you make it seem like it's going to phase out, then its scores better in the Congressional Budget Office. We're not really sure which of these things were ultimately going to see. We have
a few deadlines coming up. How Speaker Mike Johnson has said that he wants to get a tax bill passed by May. The federal government is going to hit its debt ceiling sometime in probably September or October, at which point they're really going to want to have passed some
kind of budget. So we're going to see by the end of this year, unlikely sooner the final product, and that's going to really dictate how the Inflation Reduction Act changes and even if it survives, if it's the kind of thing that can really drive the energy transition as it was intended to do.
I mean, it's interesting what you mentioned about there's twenty one Republicans in Congress in House of Representatives, and did you say for senators from the Republican Party that are somewhat supportive of the Inflation Reduction Act tax credits in some form, And ordinarily I would say, well that's that. Then it's not going to get repealed because as presuming
the Democrats will vote with it. But given this administration's track record in these first one hundred days, which very much seems to be make a declaration via executive order, even if it falls outside of the bounds of what it is legally allowed to do, and then fight about it later in the courts and maybe with Congress, do we see that being a potential outcome? And I suppose what it fundamentally boils down to is what is the Trump administration's view on these tax credits.
Well, generally speaking, you've heard a lot of conversation from people like Energy Secretary is right saying that baseload power is important, that technology neutral support for different energy sources is important, and that certain things subsidized by the tax
credits like nuclear or geothermal are potentially important. However, you've also heard a lot of criticism of particularly wind, but also to a lesser extent, imports of solar and storage, and have touched Chinese supply chains as a bit more controversial. So there's some conflicting forces here that might raise questions about how these tax credits are going to be allowed or enforced. In particular, I would look to IRS actions to see if there ends up being some form of
selective enforcement. That said, I think it's important to think about the broader context here. The administration has claimed that it wants to reindustrialize the United States, and it's certainly shown a lot of active support for data centers and AI and all of those really require power as of course, to individuals' homes, and everybody wants that power cheaply and fairly reliably. The vast majority of the new electricity sources that are going to come online in the United States
are going to be wind and solar. Natural gas turbine makers like giev Rnova, and I think believe Zemans have said that they don't want to expand the production of their natural gas turbines too quickly because that they've gotten burned by that before and eaten into their profits. And so the fastest and in many cases cheapest and most reliable thing you can build across the US is solar plus storage or similar technologies, and between that and support
for things like nuclear and geothermal. Pragmatically speaking, if you want data centers, if you want AI if you want new factories, and if you want consumers to not be extremely mad at you because their power bills are rising, you're going to want renewables that are partly paid for by the federal government and rather than on rate payers bills. So it remains to be seen, but I think there are reasons to believe that pragmatism might have to win out in the.
End, costing yourself back to when we did that, webinar together and we talked about what the outlook would be for you know, the Trump administration, and I realized that the first hundred days is not the whole story, but it is an interesting bell weather of what is perhaps going to happen. So what has surprised you? What did we not expect to happen that has happened or hasn't happened that we expected to happen. What has happened that
is exactly as you expected? And what were things that we talked about were you know, likely to happen with this administration where we still don't have a good indication of how that's going to go.
Excellent question. I think often the specifics were more surprising than the general. I think we anticipated that the Trump administration was going to try and take funding back, but we didn't think that they would try to bring back contractually obligated funding. So more seems to be at risk than we had initially anticipated.
So it's just the just to put it into sort of more in English, just the aggression with which they are going after funding that has been committed to the energy transition.
Yeah, and on top of that, there were more or less the moves towards some form of permitting reform that we anticipated, but there's also attempts to fast track it to ignore the Administrative Procedure Act and some of the rules that govern whether a regulatory change can be legally made. That's someone in line with his first term, but again more aggressive than before. And what the jury is really still out on is this case I made for energy
pragmatism going to win out. Are we going to see attention to the needs of consumers and data centers and manufacturers, or are we going to see ideology kind of Trump that, so to speak. And I have my bets, but as we've seen, the only certainty with this administration has generally been uncertainty. So as the President says, we'll see what happens.
I think that's a really excellent question, this idea of particularly because the data sent question is relatively new. It's an exciting new industry, and it does create just like I was saying earlier with the cheap gasoline versus drill, Baby drill, it creates a paradox between various things that the administration says it wants to achieve. And I completely agree with your assessment that is a really key question
that we don't know the answer to currently. That will certainly have a really big bearing on what the ultimate legacy of this administration is in terms of the energy transition and the development of those industries. Derek, thank you so much for joining us. It's been a really fascinating conversation. It's always great to get your take on the political aspects of the energy transition. You do such a great job with managing to successfully weave it into the economic
and trade considerations that are all adjacent to that. So real pleasure speaking to you.
It's been a pleasure to speak with you. Tom. Today's episode of Switched On was produced by Cam Gray, with production assistants from Kamala Shelling. Bloomberg NEF is a service provided by Bloomberg Finance LP and its affiliates. This recording does not constitute, nor should it be construed as investment a vice, investment recommendations, or a recommendation as to an
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