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'Up w/Chris Hayes' for Saturday,December 8th, 2012

December 8, 2012

Guests: Dan Dicker, Dave Roberts, Uni Blake, Tanya Fields, Frances
Beinecke, Kathleen McGinty, Steve Coll, Bob Freling, Shalini Ramanathan

CHRIS HAYES, MSNBC ANCHOR: Good morning from New York. I`m Chris

Egyptian newspaper, Al-Ahram, reports that President Morsi will issue
a law giving judicial immunity to the military as it quells protests there.
Demonstrators are marching in Cairo to protest Morsi`s attempt to push
through a new constitution written by his allies.

And Charlie Crist, the former Republican governor of Florida who ran
for Senate as an independent in 2010, announced late Friday that he is
officially joining the Democratic Party.

Right now, I`m joined by Dave Roberts, a staff writer covering energy
and politics for, Tanya Fields, an urban farmer and founder of
the BLK Projek, which promotes urban agriculture and small business
creation by Women of Color, Dan Dicker, author of "Oil`s Endless Bid:
Taming the Unreliable Price of Oil to Secure our Economy," a CNBC
contributor and president of Mercbloc, an independent wealth management
firm, and Uni Blake, director of environmental affairs for Hometown Energy
Group, an independent energy consulting firm with clients in the oil and
gas industry.

Republican senator, Rand Paul, of Kentucky on Wednesday lambasted the
actress, Ashley Judd, who is reportedly considering a run for Senate there.
Paul said Judd`s politics were too far left for Kentucky and that her
opposition to one industry in particular would doom her candidacy.


VOICE OF RAND PAUL, (R) KENTUCKY: She`s way damn too liberal for our
country and for our state. She hates or biggest industry, which is coal.
So, I say good luck bringing the "I hate coal" message to Kentucky.


HAYES: But as it turns out, Paul`s comments reveal a fundamental
misunderstanding of his own state`s economy. According to data from the
Bureau of Economic Analysis, first caught by political researcher, James
Carter IV (ph), mining is only the 13th largest industry in Kentucky by
GDP. Manufacturing is at the top of the list.

And if you go by jobs, mining is only 15th in the state, employing
only about 30,000 people. Health care is at top of that list with almost
eight times the number of workers. So, Paul`s claims are just flat wrong.
They, nonetheless, reveal a deep anxiety and defensiveness about the coal
industry, which is very much on the wane in America.

Today, coal provides only a third of the nation`s power down from
nearly half. Just four years ago, coal-burning power plants are shutting
down across the country. There`s a war on coal as you may have heard
during the campaign, but the aggressors aren`t bureaucrats or

The biggest culprit in the demise of coal is a rival energy industry,
natural gas, specifically, the technology that has radically transformed
natural gas production over the last years something called hydraulic
fracturing or fracking. The name is incredibly opaque, but the goal is
simple. Tens of thousands of feet below the surface, there are deposits of
natural gas trapped within giant rock formations.

Fracking lets energy companies drill down and get those deposits by
pumping a mixture of water, sand, and chemicals into the rock to release
the gas. That process has fundamentally revolutionized America`s energy
economy in just a few years. The average annual price of natural gas is
less than half what it was in 2008.

Large swaths of the United States from Colorado to Texas to Ohio to up
state New York have massive natural gas reserves making them right for
fracking. Residents for (INAUDIBLE) based primarily on concerns about
health and the safety of the process. Those battles may well decide the
course of America`s energy economy over the next century.

I think there`s a real mismatch between the amount of -- between the
scale of the change that`s happening in America right now because of the
fracking boom and the amount of intense consternation, debate, and politics
around the local level on the amount of coverage it`s getting naturally.
It`s sort of this thing that`s happening under the radar.

Natural gas, the natural gas revolution that`s happening right now is
-- you`re someone who works in the energy sector. You`re a trader in the
energy sector. It`s fundamentally transforming the economics --

DAN DICKER, CNBC CONTRIBUTOR: And it`s new. And that`s what needs to
be -- you need to say that clearly. This is in its absolute infancy,
fracking as -- it`s been going on for one time, but deep fracking that
they`re doing now really only began in 2007 in Texas in the Haynesville,
and it`s been moved quickly into the major place.

So, we`ve gotten at a very strange kind of movement in the timeline of
fracking. It`s run almost haphazardly in three different directions from
the industry, which has gone unto a land grab bonanza and a mania into a
fracking without much regulation and much oversight that has started with
it. Now, I`m not saying what`s been done has been badly done.

Most of it has been well-done, but there`s been bad examples of bad
wells fracked out there. And, what it is it`s going at a break neck pace
now trying to capture what is what you say is a boom that`s just begun.

HAYES: Dave, is there -- I mean, I guess, you know, at the top line
you say, look, there`s this huge, plentiful source of energy. Here`s the
president talking about fracking and its promise in Ohio in July.


with incredible natural gas resources that are now accessible because of
new technologies, but natural gas actually burns cleaner than some other
fossil fuels and is an ideal fuel energy source that we potentially can use
for the next 100 years.

There are a lot of folks right now that are engaging in hydraulic
fracking who are doing it safely. The problem is is that we haven`t
established clear guidelines for how to do it safely and informed the
public so that neighbors know what`s going on. And, you know, your family,
you can make sure that any industry that`s operating in your area, that
they`re being responsible.


DAVE ROBERTS, GRIST.ORG: Yes. Part of the fracking being so new,
like you said, especially deep fracking being so new is that there`s just a
lot we don`t know about it. We just -- it does burn cleaner than coal in
power plants. That`s pretty uncontested, but if you go look at the, say,
methane released by fracking and by transporting this stuff through
pipeline, there`s a lot of methane released, and methane is a very powerful
greenhouse gas as well as CO2.

So, the balance in terms of climate change between natural gas and
coal is still somewhat a question mark. It looks based on most science we
have now cleaner than coal, but we just don`t know. We just don`t know a
lot about the local impacts. We don`t know how long these prices are going
to stay low.

We don`t know how long these wells are going to last. We really --
there`s a lot we don`t know about it, and it`s moving so quickly. I think
that`s why you see a lot of this.

HAYES: There`s a lot of fear.

ROBERTS: -- at the local level.

HAYES: Yes. And you`re someone who is familiar with this. You live
in upstate. You`ve consulted for the oil and gas industry and you`re a
toxicologist, right? What are the fears you hear, and what`s your feeling
about how people are understanding the process?

UNI BLAKE, HOMETOWN ENERGY GROUP: People are not understanding the
process at all. The information is out there. The industry has been doing
this for a while. They have the information, but the problem is a lot of
people don`t believe what the industry says.

HAYES: Right.

BLAKE: So, even if the industry --

HAYES: Which is not ridiculous. Let me just say it for the record,
right? I mean, like, you know, this is just as a basic kind of -- I mean,
I think you`re right, right? What ends up happening is there`s this -- you
get this debate, right? And, you know, the natural gas company says X and
a group of activists say Y.

And I as a third party entering into this, I say, well, the natural
gas company has, you know, hundreds of millions if not billions of dollars
riding on X being the case. I`m going to view it a little skeptical.

BLAKE: I understand what you`re saying, but if you want a solution to
a problem, then, sometimes, you know, you have to look within. The
industry has spent a lot of years doing research on a lot of these issues.
All you have to do is go to, let`s say, SPE. They do an annual conference,
and they have a lot of information there, a lot of reports about health
issues, about water issues.

But the problem is, again, nobody wants to believe what the industry
is saying. And so, you have the environmentalists putting their reports
out, and then you have the industry saying, well, we don`t want to believe
what you`re saying either. And so, we`re at a really bad impasse. At some
point, we have to come together and decide, you know, what is and what is


TANYA FIELDS, THE BLK PROJEK: Because the people don`t -- you say
they don`t believe what the industry is saying as if we were all inherently
naturally skeptics if there`s not a history that would lend to that. We
have people in towns whose water is flammable, whose livestock are
delivering calves and breeds that die before the year is over.

Disproportionately, two instances before there was fracking, right?
This country has a long history in terms of the industry dominating and
saying one thing, and people actually putting their trust that what they`re
saying is the truth and then turning around and ending up with billions of
dollars in public health issues degradation of their environment,
disinvestment of their local economic development.

And, of course, I wouldn`t believe what you said. You`re asking the
fox to watch the henhouse, essentially. So, there is a lot of investment
in telling people, you know -- what they -- not telling them anything,
right? Chemicals are looked at trade secrets.

HAYES: Right.

FIELDS: So, you`re put tons of chemicals into the -- potentially into
the water tablet -- water table, and you`re not telling them because it
could help the competition.

DICKER: Look. There are real environmental challenges with fracking.
They are real. They are measurable. We are getting a handle on these, but
the idea that they are infecting water tables is a bit overwrought. We`ve
had well over 40,000 wells fracked in this country. The EPA has found one
kind of species example of some sort of water table activity in Wyoming.

Even they`re not sure about that one. It seems the water table --
now, a greenhouse gas effect of loose methane, that`s real. In terms of
water that`s coming up, recyclable water that`s coming up as brine after
the fracking process, that`s real, in terms of (INAUDIBLE) we have to
separate what --


HAYES: Let`s do that, because I do think -- I think there`s a bunch
of stuff on the table, right? And the part of this, it`s a complicated
process, and it`s a scary process in the fact that these are areas that,
you know, West Texas is used to energy extraction, right? Southeast
Pennsylvania is not necessarily used to it or upstate New York is not used
to it, right?

So, all of a sudden, you have this industry that`s coming in. So, I
want to sort of step through these different risks, because I do think
there are risks and I do think there`s a little mix of anecdotal fear and
then some real -- but there`s also very grounded reason to be skeptical
about a lot of the processes. So, let`s sort of dive deep into that right
after we take this break.



UNIDENTIFIED MALE: It`s all settled out, but that`s what our water
looked like.

UNIDENTIFIED MALE: That came just out of the tap?


UNIDENTIFIED FEMALE: So, in three weeks, they contacted mike by phone
and said, we`ve tested your water. There`s nothing wrong with your water.


UNIDENTIFIED FEMALE: With this. There`s nothing wrong with the water
that will be affected by the oil and gas production in your area.

UNIDENTIFIED MALE: Whoa! Jesus Christ!


HAYES: So, that`s the iconic moment from the "Gasland" documentary.
And it`s incredibly effecting. And I think -- Tanya, you made this point
about water contamination. I think, basically, look, you`re drilling down.
There`s the water table. You are fracturing the shale. Right now, the
aquifer tends to be much, much, much, much higher up in the earth than
where the actual fracking is happening.

Yes. A mile maybe, but the question of ground water contamination, I
think, looms incredibly large, and I want to get your sense, Uni, of where
your sense the specter of ground water contamination.

BLAKE: Well, time has said a lot of things, and a lot of it have to
say is based again on misinformation. We live over shale, and this is a
gas-producing shale. I have tested water in Oswego (ph) County, and 20
percent of the water that we have tested with no gas drilling occurring
already has methane in it.

There`ve been people lighting their faucets in our area for a long,
long time. Ask any of the old (INAUDIBLE) that live in the area. It`s
something they did as kids. It was fun.

HAYES: Right.

BLAKE: So, the methane is in the water.

HAYES: Let me say this, and this is an important footnote. I don`t
want to litigate "Gasland" too much, but the natural resources department
of state of Colorado are going to follow-up investigation into some of the
examples of the -- in three of the instances that are shown in "Gasland,"
and their determination was in two those instances the methane coming was
this sort of natural what`s called biogenic methane.


HAYES: No, no, but in one of them, in one of them, the Department of
Natural Resources found it was due to a poorly constructed well, and a
poorly constructed well with improper casing, the disposal of the
wastewater which comes up by the millions of gallons and sits there in a
toxic pool and has to be transported out or put somewhere, right? If you
don`t do any of those steps (ph) along the way properly, you can get
massive contamination.


BLAKE: I think the definition of the word "toxic," again, a toxic
pool, a toxic -- cocktail, toxicity has many -- is a combination of many
different things, OK? Number one, toxicity is the length of exposure. How
long are you exposed to if? Number two, toxicity is, obviously, a
concentration thing.

Toxicity is also, you know, is it chronic? Is it acute? If you sit
here drinking coffee, OK, are you drinking a toxic solution? Do you
consider your coffee toxic?

HAYES: I sort of do, but continue.

ROBERTS: Worth it.


BLAKE: Well, caffeine has an LD-50 of 190, which means that the 190
mg, two liter, (ph) half the critters will die if they given caffeine. One
of the toxic chemicals has an LD-50 of 143. So, the whole point is it`s
all relative.

HAYES: But let me tell you something, if you went to the folks in the
Marcellus Shale or upstate and said, you know what, we`re actually swapping
out the fracking chemicals we`re using with coffee and we actually have
eight million gallons of coffee sitting around, no one would be psyched
about that either.


HAYES: I mean, that`s the point is that the volume of what you`re
talking about is on a scale that is -- that is worrisome to people.


BLAKE: Can we put the word toxic out of the conversation?

FIELDS: But I don`t think that we should. And let me push back a
little bit, because we`re talking about this as if this is the end-all be
all, right? We heard President Obama say we could do this for 100 more
years, but we act as there`s no other alternatives, that we have
deliberately ignored.

HAYES: Right.

FIELDS: And that we have not put the proper resources into actually
looking at, right? We`re not looking at making sure that we have a country
that really is focusing on energy efficiency, looking at real clean energy
that`s actually renewable energy, because that doesn`t make as much money
as natural gas, right?

And, it also doesn`t open up the same kind of economic development
benefits for folks, right, when we start talking about green (ph) jobs.
All like you said, it`s all relative. That`s a really important point.

HAYES: This --


HAYES: -- and I think it`s also interesting, because what the
fracking boom is doing to the price of natural gas. I mean, I think the
idea, right, is the price comes down and that`s good for consumers. Energy
is cheaper. But it`s having a lot of knock-on effects, that diminution
(ph) of price.

ROBERTS: Yes. Let me say what I think about water before we move on


ROBERTS: -- because it`s a point worth making. It`s true that the
fracking steps (ph) is taking place well below the water table, but what
you have is very slow dispersions, very low concentrations, and extended
contact. And we just don`t know a lot about that. There`s a big question
mark there.


HAYES: OK. But there -- no, but there are some of it -- look, some
of the things we know, right? We know some of the chemicals that are in
there --


HAYES: here`s an example of this.

BLAKE: Yes, we do.

HAYES: Some city or neighbors (ph) industry pumped a mixture of
chemicals identified only as EXP (INAUDIBLE) 17311 into half-dozen oil
wells in rural Karnes County, Texas in July. This is from Broloomberg.
One ingredient and other identified solvent can cause damage to the kidney
and liver.

The solvent and several other ingredients to the product are
considered a (INAUDIBLE) by superior well services, the neighbor`s
subsidiary (ph). That means they`re exempt from disclosure. Drilling
companies in Texas claim similar exemptions about 19,000 teams this year
through August. So, there are -- just as a matter of fact, there are
chemicals that are being put in the ground that are not disclosed because
they are --

DICKER: Part of the legislation is designed to make this transparent,
by the way. I think within the next year, you will see transparency
entirely in whatever cocktails they`re throwing down these wells, because I
don`t think that they are so proprietary. And even the oil companies said
they`re not so proprietary that they can`t keep up --

HAYES: Also, all the companies are spying on each other all the time.
Who are they kidding? They all know --

BLAKE: A company could not do any work in New York State without
disclosing what chemicals they`re going to use. The DEC will not issue any
permits, unless, the DEC knows what chemicals are in those proprietary
mixtures. The same with the coffee (ph) drink, OK? It has chemicals in
it. You know what they are. What you don`t know is whatever the -- I
mean, the different amounts of the chemical.

HAYES: What are the requirements under the DEC, because it seems to
me that part of the problem also is regulation, right? I mean, there is a
fear that this is being inadequately regulated or nowhere near, you know,
regulated enough. And I want to talk about that and talk about the
solutions here.

There are some people who think there should be a ban like there is in
France. There are others who think that you can do this in the regulatory
margins. Let`s talk about that when we come back.


HAYES: We`re talking about fracking, which is an incredibly pitch
battle. It is transforming the economics of energy in the country. It`s
transforming many local landscapes places that used to be farms or little
league fields now sporting wells. There`s a rush of capital into natural

I think, in 2011, I want to say five of the top ten performing stocks
were associated with natural gas extraction. It`s true. Look it up.


ROBERTS: Not the ones I own.


HAYES: And there`s lots of fears about what its environmental effects
will be, what its health effects will be, and we`re trying to sort of tease
through some of that, and we`re talking about water contamination and my
sense of the literature here is that the ground water contamination through
the fracking process, itself, has been documented in extremely rare cases.

But, contamination of water because you have all this wastewater,
right? I won`t call it toxic. You have this wastewater that is a slurry
of things that you probably will not want to opt to put in your body. And
you have millions of gallons of it, and then you have to do something with
it. You got to truck it out or you got to let it sit there and essentially
off-cycle, I guess.

You know, what you do with that. And then, I think also, you come
back to this -- we`re talking in the broad sense about a risk profile and
about regulation, right? You know, deep water drilling is safe, right,
when done correctly. And then it`s fine until it`s not done correctly,
right? We`ve all seen what that looks like when it`s not done correctly.

There`s a question. Let me give you a little statistic here. Active
oil and gas inspectors per well in 2010 by state. This is the amount of
active wells there are per inspector, OK? And the amount of the percentage
of wells inspected. In Colorado, 63 percent of the wells were inspected,
and there were nearly 3,000 wells per inspector. And in a state like
Pennsylvania, 91 percent and 1,400 per inspectors.

So, even in the best states, right, New York actually is in the top
there in terms of the number of wells per inspector. There is this
question, this broad question about whether we believe. It gets down to
this trust issue, right? If you say theoretically this can be done safely
under the right conditions with the right regulation, it can be done
safely, there`s this basic trust question about, do we trust our political
system to bring about those conditions?

ROBERTS: Yes. And you know, the story of what happens when a
resource is found in a rural, remote areas among politically powerless
people has played itself out many, many, many times over the past, and
eventually, you have to learn from history. There`s always these anecdotal
complaints, there`s always experts from industry saying there`s nothing to
worry about.

There`s a flood of capital, out of state capital, and out of state
workers, you know, the economic boom that is inevitably temporary. And
then, once everything has moved on, you find out that these towns end up
being wastelands and, you know, some of the health concerns prove out and
some don`t.

But right now, they`re just -- you know, there`s motoring through it
before the science and before the regulation can catch up even close.

DICKER: One of the issues you bring up about trust and our government
being able to regulate this, and you talk about, for example, deep water
drilling. Now, that`s federal, because that`s federal water and you need
federal permission. You need to follow federal regulations and other (ph),
but the fracking debate is difficult because its state-run for the most


DICKER: And every state environmental agency has control over each
state which is why you see, for example, a lot of discussion about the
Marcellus in New York where a lot of people are up in arms and really care
about the environment to a certain degree, and you don`t see that much in
Texas, for example, in the Eagle Ford and in the Haynesville and other
areas (ph) in Texas because Texas is a more happy kind of fracking state
which has a lot easier --

ROBERTS: Intense pressure on state governments to grab what economic
boom they can when they can, which is a lot more difficult to resist.

DICKER: What it does is it adds to the difficulty of getting a
unified sort of trust going in terms of the technology itself, because each
state looks at it differently.

HAYES: My sense is your position is this can be done safely and
largely is being done safely now. Obviously, there are exceptions to that,
but largely (INAUDIBLE). Are there standardized rules that you would like
to see as someone who does think that should be done safely, you would like
to see put in place to ensure that always happens?

BLAKE: Have you reviewed the New York supplemental GIS? Two thousand
pages worth of regulations. Just to kind of backtrack, there`s a lot of
discussions going around this table, I wanted to bring up the wastewater
issue since we keep alluding to it.

The wastewater as we know, obviously, is regulated under the Clean
Water Act. There`s been a lot of talk about this Dick Cheney and the
Halliburton loophole.

HAYES: Let me just say there`s an exemption put in 2005 essentially
exempting from the drilling process from a particular kind of scrutiny
required by federal law in the Safe Drinking Water Act.

FIELDS: There are six other federal acts that it is exempted from.

BLAKE: Yes. That`s a federal.

HAYES: Right. Yes. That`s a federal exemption, right.

BLAKE: He alluded to the fact that this issue is actually regulated
at the state level. And so, the state is the one that manages the Clean
Water Act. If you go through the SGIS and you look at it --

HAYES: Explain what the SGIS is.

BLAKE: It`s a Supplemental Environmental Impact Statement that New
York State requires, you know, for the industry to get its permits. A part
of that Clean Water Act at the state level is a program called NPDS
program, which is where a wastewater discharger gets a permit. And so
whatever they put out in the wastewater is monitored.

And so, if the industry supplies them with wastewater, the wastewater
treatment plant is expected to clean it up to the level that meets their
permit regulation. And so, that permit is under the Clean Water Act. For
people to go around and say that the industry is not regulated by the Clean
Water Act is kind of twisting words, because their wastewater is at the
wastewater outfall.

DICKER: There are some trace chemicals and others that are not under
the Clean Water Act that happen to come up inside when fracking fluids come
back up out of the ground. They`re in the ground naturally, and they come
back up as wastewater. Some of those are not covered in terms of the route
that they have to go in order to be cleaned up and then released into
rivers and so forth here. Most of them are. Most of them are, but some
are not.

BLAKE: The permit is the one that determines what that wastewater
plant is supposed to put out.

HAYES: Right. Yes. But the collection of the information is highly
non-standardized, right? I mean, you`re talking about New York State, and
New York State has had -- and let me just say this, the background to New
York State, right, which has a relatively high level of regulatory scrutiny
is precisely the presence of fracking activists, right?

It wasn`t just that they magically thought, you know what, let`s have
really tough standards on this. No. Actually, people showed up at
meetings and yelled and protested, right? And so, my point is that if
you`re -- often the industry will point to regulatory bars that they have
to clear and say, look, we have to clear these bars.

Those regulatory bars don`t come around (ph). They don`t just sprout
out of the ground. They come about because --

DICKER: -- states like New York --


HAYES: Tanya Fields, founder of the BLK Projek and Uni Blake,
director of Environmental Affairs for Hometown Energy Group. That was
really a great discussion. I want to continue it in the future.

David, you mentioned something about the way that fossil fuel
extraction can change the political, economic facts on the ground of a
place. The U.S. is on tract to become energy independent. Why that`s bad
news after this.


HAYES: My story of the week, Saudi America. Right now, in Dickinson,
North Dakota, the local McDonald`s is offering up $300 signing bonus to new
employees. You heard that right, but 7.7 percent nationwide unemployment
rate, persistently sluggish job growth, and wage stagnation, the labor
market of this one town in North Dakota is so tight, and employers are so
desperate for workers, they`re offering a signing bonus for a job slinging

And it`s not Dickinson. Unemployment in the entire state in North
Dakota is 3.1 percent. GDP growth in the state is a whooping 7.6 percent,
and housing there is in such short apply (ph) that one bedrooms are renting
for more than $1,000. What economic miracle has taken place in the planes
(ph), you might ask, to bring this about?

The answer is the Bakken formation, a subterranean rock formation that
contains a thin, and until recently, more or less inaccessible sea of oil
within relatively hard rocks. The revolution in the technology of its
fraction, including fracking has helped unlock the oil in the Bakken and
some speculate that the amount of extractable oil from just this one
geological formation alone could surpass the reserves of all of Iraq and
Kuwait combined.

Production from the area has skyrocket and this new production boom is
driving a larger national trend, pushing U.S. oil production up for the
first time in a generation and arresting what many believe was a permanent
decline. This chart shows the comparative growth in crude oil supply among
a number of non-OPEC countries.

And what you see is the U.S. obliterating the rest of the world.
Employment in oil and gas extraction has surged to the highest level since
1992, though, we should note they still provide a tiny, tiny sliver of the
country`s job just under 200,000.

Our net oil imports are crane ring (ph) as you see here, and now, a
number of analysts are predicting that in the near future, the U.S. will be
producing more oil than any other country in the world. By round 2020, a
recent international energy agency report predicts the U.S. is projected to
become the largest global oil producer and starts to see the impact of new
fuel efficiency measures and transport.

The results in a continued fall in U.S. imports to the extent that
North America becomes a net oil exporter around 2030. Yes, that`s right.

The United States, which is according to the spokes fuel from the coal
industry already the Saudi Arabia of coal, which is, thanks to the fracking
revolution, now essentially tied with Russia as the single largest producer
of natural gas in the world could also once again find itself the world`s
biggest oil producer on a consistent basis for the first time since the
first half of the 20th century.

In energy circles, you`re beginning to hear the phrase "Saudi America"
used to refer to this future fossil fuel juggernaut. And you might look
overall this and say fantastic. America is finally within sight of that
much mythologized, long promised destination, energy independence.

Not only will we be able to cheaply supply our own power grid,
vehicles, and army, well actually be able to make money, exploring our
resources all over the world reversing the long trend towards ever widening
trade imbalances. And indeed, during the campaign, this was more or less
the argument President Obama made.


OBAMA: We have increased oil production to the highest levels in 16
years. We`re actually drilling more on public lands than in the previous
administration. We`re less dependent on foreign oil than any time in 20

We`re moving in the right direction in terms of energy independence.

We`ve built enough pipeline to wrap around the entire earth.


HAYES: But delighting in our carbon extraction boom is staggeringly
almost psychopathically perverse, because, well, it`s exactly that carbon
extraction that is hurling the world toward the dystrophic (ph) future, a
possible four-degree Celsius global temperature rise, droughts, floods,
storms, disaster, disease, death, crop failure and on and on.

In other words, you cannot separate energy policy from climate policy.
There are one in the same. And based on calculations by Bill McKibben and
the rest of the folks in, only one fifth of the current proven
world fossil reserves which includes everything, oil, gas, everything, can
be taken out of the ground and used without our planet passing the critical
two-degree increase threshold.

In other words, 80 percent of the fossil fuels that we, at this very
moment, know we can take out have to stay in the ground. But there`s
another related threat posed by the ramping up of our fossil fuel
extraction, and that is as America begins to ape (ph) Saudi Arabia`s
productive capacity, it also begins to more closely resemble politics.

Economists have long talk about the resource curse and the fact that
countries with massive, lucrative natural resource found this tend to be
developmental and governance basket cases ruled over by a tactless (ph),
ruthless, in trend set (ph) of extractive oligarchs (ph). And if you think
that sounds foreign, go take a look at the politics in places like West
Texas and West Virginia.

The promise of energy independence is a kind of liberation, but it is
a false promise. If history or a look across the globe tells us anything
it`s that the extremely lucrative industry of extracting and selling carbon
fuel offers all of the actual freedom of the devil`s handshake. How we
escape it after this.


HAYES: We are talking about the remarkable fossil fuel extraction
boom that is happening in the United States leaving some energy analysts to
refer to Saudi America as the U.S. becomes possibly the top producer in the
world of oil in the near future. It has the largest known proven coal
reserves in the entire world and is tied with Russia for the largest
natural gas annual production.

Joining me at the table is Kathleen McGinty, senior vice president and
managing director for strategic growth at Weston Solutions, Inc., a company
which does green property renovation, Steve Coll, author of "Private Empire
ExxonMobil and American Power," which is just a remarkable book, and
president of the New American Foundation.

He`s also a staff writer at the "New Yorker" magazine. Frances
Beinecke, president of the Natural Resources Defense Council, and Dan
Dicker is still at the table.

I`m really curious about how this boom is going to transform American
politics. And I`m particularly concerned about climate, right? Because it
seems to me that we are basically in certain ways headed in exactly the
wrong direction, but also, at the same time, headed in the right direction.
And here`s what I mean by that.

Carbon emissions are the lowest in the country since 1992, right? And
that is largely because every BTU of natural gas you substitute for BTU of
coal, you basically get 50 percent of the emissions. So, at the same time,
we`re having this fossil fuel boom. We`re also having this decline in our
carbon emissions. And so, I wonder, how should I feel from an
environmental perspective about these two facts that seem to be in deep
tension with each other?

FRANCES BEINECKE, PRESIDENT, NRDC: I think the main thing, Chris, is
that we have to get on a path way to reduce emissions over time. Natural
gas is better than coal, but it does not get you there. And you have to
have a clean energy plan that gets you to a cleaner solution, which
includes efficiency and renewables and the cleanest burning fuels that you
can get.

And basically, the natural gas boom is a temporary benefit from a
climate standpoint, but a long-term disaster because it prevents the
transition from happening.

we`re in a position where because of the production of gas at such great
levels, it has caused the price of that gas to come down precipitously.
Now, that turns out not to be very good for the gas companies who aren`t
making the money that they were making.

HAYES: Right.

MCGINTY: They`re shutting in some of those wells, but it also turns
out not to be very good for the renewables --

HAYES: Right. Who are now have to compete with this --

MCGINTY: Exactly. And it`s pretty darn hard to finance that
renewable project when the price of gas has brought that price of
electricity down.

HAYES: But I`m also really worried about the political economy here,
because to me, this seems a big issue, right? It`s like, if you`re going
to actually have a climate policy, you have to go through the fossil fuel


HAYES: And the fossil fuel companies are big and mean and tough. And
they are some of the most profitable companies in the history of human
civilization. And you`ve written entire magnum opus about one of them.

And I wonder what you think, how is this going to shape the political
relationship between the state and its ability to bring to heal these
companies if we have this massive expansion in the extractive capacity of
the nation?

STEVE COLL, AUTHOR, "PRIVATE EMPIRE": Well, the basic problem is that
while it`s true that climate and energy policy are the same thing, and our
politics, they`re not integrated. We don`t have a government. We don`t
have a democracy that can bring those two policy strands together, and part
is the political power of the fossil fuels industry.

Between 1998 and 2012, the combined spending in Washington disclosed
lobbying spending of the oil and gas industry and the electric utility
industry $3.5 billion. Pretty much top of the chart. And that means that
they have a kind of blocking position in Congress. So, when -- even when
you had a Democratic House in 2006 and a Democratic presidency in 2008, we
couldn`t get a price on carbon enacted, even a relatively modest one.

Now, we had a recession. There were extenuating circumstances, but
people understand that the politics of putting a price on carbon-heavy
fuels, which is the easiest way just start to integrate climate energy
policy is pretty much dead in the Congress. Even now, you don`t even hear
the president talking about it in the campaign where you had the
opportunity to start to set that agenda.

BEINECKE: So, Chris, on that point, the fact is that the president
has the authority to reduce emissions under the Clean Air Act. He can do
it efficiently, he can do it cost-effectively, and I think that grassroots
from all over the country are going to be demanding that action from the
president and from this administration.

HAYES: In fact, the natural resources defense council just put out a
wonderful report, which I recommend earlier. We`ll put out on our Facebook
page and our blog and our Tumblr, basically, sketching out what that will
look like, how -- because the EPA has found it can regulate it under --

BEINECKE: The Supreme Court authorized the EPA to regulate it under
the Clear Air Act. And our program basically promotes massive investments
in efficiency to reduce emissions 26 percent by 2020 from the power sector
of largest single source of emissions in this country. So, we have to get
on a path to reducing our emissions. We have to use the authority we have.

As Steve says, Congress doesn`t have the appetite now. Hopefully, at
some point, they will, but we can`t wait for them.

DICKER: I think you got to give Congress the appetite and Steve -- to
make the -- put the politics into the climate and into the energy equation,
and this is the way you do it. I think this president has a tremendous
opportunity, one that no other president has had because of the infancy
nature of both fracking of natural gas and the shale oil, as you say, in
the Bakken, and what`s going on deep water in the Gulf of Mexico.

This is we`re at a moment in time where we`re at the infancy of a
great revolution, as you say, and there`s a moment where you can say -- the
president can say, I`m going to have a consolidated energy policy, the
first of its kind in the last 50 years where if you want $5 billion in
subsidies for big oil, then you`re going to have to pay for that with $5
million of getting us further along the way towards a renewable future.

And if you don`t do this, then you`re not entitled to this. You have
to integrate everything so you can use a hammer, the hammer of money
against the big oil companies to make that move forward in the renewables
that they won`t do by themselves.

HAYES: Kate, I want to hear some thoughts on this right after we take
a quick break.


HAYES: Kate, you have something you want to say.

MCGINTY: Well, on energy policy, I agree. It needs to be an
integrated comprehensive energy policy, but here`s the point. Even then as
since as some gain (ph), who`s producing the electrons where they coming
from? I`m hoping we can expand the equation beyond that, and what am I
talking about?

What about the value enhancing end uses of either oil or gas where
you`re using it not necessarily as an energy source primarily, but you`re
keeping those good jobs in the United States by using it as a feed stock
for high-tech industries or pharmaceuticals or chemicals or fertilizers,
that kind of thing. If you can do that, it may dial down some of the
animosity between fossil fuels and renewables as it relates to electricity
or transportation fuels.

HAYES: But that animosity seems to me like that animosity exists at
this table but like it barely seems to exist at Capitol Hill. I mean, it`s
just like -- you know what I mean? It`s like Goliath and then like David`s
puppy poodle in terms of like the size of the industries that we`re talking

BEINECKE: That`s absolutely true, but I think the other thing that`s
happening and it`s happening on the ground across the country is they`re
climate victims from all the energy development that`s going on. The
people who`s homes are being affected in Pennsylvania, the people who lost
their homes in Staten Island and the Jersey shore from hurricane Sandy, the
people who live along the Keystone Pipeline.

I mean, there are people across the country who are beginning to rebel
against the huge fossil fuel development that is taking over their
communities. I think that`s the counterweight. It`s going to come from
the grassroots. It`s going to demand -- it`s going to end up in

COLL: I think that`s the key point, because you look at the history
of environmental movements in this country.

The American people, including in red states, have proved themselves
willing over and over again to tax themselves to address current risks to
their health, their children`s health, their communities, their water
supply, the air they breathe. The problem with climate to date has been --
that it has been seen as a future risk, and it`s coming forward, and as it
does, the politics are going to change.

HAYES: The politics also change -- you made this really interesting
point during the break about geography of it changing, right? It`s like
well, we know -- we basically know how the senator from West Virginia are
going to vote on stuff that has to do with coal. Democrat, Republican,
Marxist, whatever.

I mean, whoever you would elect from West Virginia, they`re going to
vote a certain way on coal. And the fact that we now have this incredibly
distributed development because of the fracking boom means that a lot of
different places now are geographically playing and that can go two ways,

One way is we produce more senators from the state of West Virginia
and how they vote. The other is that we produce this broad grassroots
activism that actually has some political traction.

COLL: Well, the effects of a national politics, too, because look at
this last election. Why was President Obama as muted as he was about
climate and about oil and gas and coal production? Well, Virginia,
Colorado, Ohio, Pennsylvania. These are --

DICKER: Michigan.

COLL: You know, this -- and the way our Electoral College --


COLL: -- we only worry about ten states that they`re very invested in
oil and gas production.

MCGINTY: Some of it says come back to the economics as well. I look
at my own state of Pennsylvania where we had the early stages of huge boom
in the Marcellus shale. Hundreds and hundreds of wells being deployed.
Some companies now are down to just a couple wells. Well, why? Because
that price has plummeted.

HAYES: Right.

MCGINTY: The reason why it`s relevant to the politics is if this
genuinely does become a boom and bust, then those politics that get really
engrained when a big part of the state`s economics depend on that industry,
maybe that doesn`t take hold. That`s where I think it`s interesting in
terms of those end use industries, if you can see them come in, you have a
different equation with that same resource.

HAYES: I want to talk about the price that has happened, because
that`s the background for all of this, and this is what consumers tend to
care about and voters, particularly, when we talk about price of the pump
and Wolf Runner (ph), the role of people filling up here on cable news.

And, my sense is that the price of energy in some ways is too low at a
certain level right now, and I want to talk about that right after we take
this break.


HAYES: Good morning from New York. I`m Chris Hayes here with
Kathleen McGinty from Weston Solutions which does green property
renovation, Steve Coll, author of "Private Empire ExxonMobil and American
Power," CNBC contributor, Dan Dicker, and Frances Beinecke of the Natural
Resources Defense Council. And we are talking about the massive,
extractive energy boom that`s happening in America right now. How it`s
transforming our politics? What it might do to our politics in the future
and how that can be made to work with a same climate policy, which is
really the difficult question.

And I -- before the break, I left the question on the table about the
price of energy being too low right now, that basically what we`ve seen is
this massive amount of supply has come onto the grid, thanks largely to
natural gas. The price has come down. And, I think we generally think,
oh, lower prices are better.

But, it seems to me that there`s a lot of problematic stuff about the
price coming down as sharply as it is right now in terms of what incentives
it provides for things like efficiency et cetera.

DICKER: Yes, you would want the prices to go up a lot because it
would drive the next stage towards renewables and would make that at least
cost-effective. Algae fuel, for example, we talk a lot about that. But --

HAYES: Some people talk a lot about that.


DICKER: The cost is about $8.50 to $9 a gallon, compared to gasoline
as it is now.

So, you want the prices to go up to make this a little more cost-
effective to drive the technology into them.

Unfortunately, it`s actually going quite the opposite. You talk about
increased supply here in the United States. In fact, overseas demand is
dropping. We are still in the midst of an economic problem in Europe.
Chinese growth is going down. Indian growth seems to be going down.

In this country, we`ve certainly done better in terms of the
efficiencies and our demands are starting to drop. So, in terms of what
economically you can expect, you will expect the opposite -- or at least I
do -- over the next several years that oil prices will in fact go lower,
natural gas, in fact, you can -- you know, because we have a futures
market, we look forward to the future and see what people are betting the
price is going to be. That doesn`t go over $5/Mcf until 2020 according to
the futures markets.

So, although you might want -- we have to drive the renewable argument
some other way, because price doesn`t look like it`s going to do it.

BEINECKE: The only thing to change that is if we put a price on

HAYES: Right. That`s the big --

BEINECKE: The fact is that externalities of all the fossil fuel
development are not incorporated in the current price, so the environmental
effects, the health effects, the consequences to communities, none of that
is factored in. We have to change that and get a price on carbon, drive it
up so that we can promote renewables and efficiencies first and foremost.

HAYES: And part of what`s so strong about the politics of all of this
to me, and I always -- it always strikes me, you know, gas prices go up and
then gas prices will briefly dominate the campaign and then, they`ll go
down. And no one is saying -- it`s like completely asymmetrical, right?

If gas prices go up, it`s a problem. If they go down, no one is like
-- hey, awesome, gas prices went down, I`m doing a victory lap, right? It
goes up and it`s a problem.

And then, more broadly, when something like Sandy happens, right?


HAYES: It`s really fascinating to think about this. You know, you
lose power, OK? My parents in the Bronx lost power and other people lost
it for days.

And all of a sudden, you`re like, oh, right. Everything about my life
literally every last detail is dependent on this massive invisible
infrastructure. I never think about it that a whole bunch of people are
running and litigating about and legislating and regulating and making a
lot of money off this massive industry that is just like huge mountain I
sit at the very top of it, and I live my life.

And then when it goes away, what`s the deal? Like how does my utility
company actually work, and why can`t they get my parents` power restored in
a week?

And I think one of the things that`s been positive about the fracking
boom is it produced this grassroots response in which people are educating
themselves about the chain of production of how does a molecule of carbon
go from the ground to firing up your grid so you can turn your light on.

MCGINTY: Sandy, too. One of the other things that became very
visible with the mile after mile of these poles and wires that are down --

HAYES: Right.

MCGINTY: -- it hit you in the face, that is this what we`re running
the greatest superpower on Earth? Is poles and wires that get blown down?
Is that the way to power a 21st century economy?

I think that could be one of the forces that becomes a bit of a
counterbalance to the economics, so that the economics are the toughest

HAYES: But the problem is it`s so opaque, right? I mean, in the case
-- this is why I think the politics get so tricky. It`s like I don`t --
like what is my utility company? As a citizen, I don`t know. He they send
me a bill, but like, if you ask how many people work for it or like what
degree it`s public and private, like all of this is just remarkably
shrouded in complexity.

COLL: It is utility regulation that`s one area in our economy, where
your right to be heard and have public interest in is embedded into the
regulatory system, unlike the oil industry and gasoline provision which, as
a practical matter, is also a utility function. It isn`t regulated in the
public interest.

You know, just to come back to this price discussion here --


COLL: -- the history of oil and gas prices, the history of commodity
prices in general is that they fluctuate. They go up and down. And on the
base of price signals, people shut down wells when pieces are too low,
supply contracts, prices go up, people boom.

HAYES: It`s a classic boom/bust thing.

COLL: You can`t build pub policy on the basis of extrapolating
commodity prices from the present.


COLL: And so, to go back to the idea that we need a carbon price,
which we do, the implications is that politically you ought to enact it
when prices are low --

HAYES: Right.

COLL: -- so that you do relatively little damage to the economy.

HAYES: Right, right, right.

BEINECKE: Now is the time. That`s a great thing, Steve. We should
be doing it right now.

COLL: Right.

BEINECKE: And everyone knows it`s coming. That`s the other thing. I
mean, it`s not as though --

HAYES: Do they?

DICKER: I don`t think so.


BEINECKE: You`re saying that the utility companies, the coal
companies, the fossil fuel industry, this is something they`re examining
every day. Everyone is looking at what the emissions rate around the world
is, the fact that the earth is warming very, very quickly. The arctic is
melting in front of our eyes. The city of New York was closed down from a
massive storm.

I mean, this is very much present. As Steve said we used to say it`s
a problem of the future. It`s a problem of now, and we have to build the
politics to get that result.

DICKER: There`s a massive link between flooding in the Brooklyn
Battery Tunnel and a carbon tax coming to be, a massive link.

BEINECKE: I think people are awakening to the impact.

COLL: Even ExxonMobil, their corporate planning department, assumes a
price on carbon is coming. It`s a question of timing and amount.

I think everybody understands in the business that the politics are
rising. They`re putting it into the business plan. But in the lesson of
2009 when the Congress came as close as it ever has to enacting --

HAYES: It passed in the House by one vote, right?

COLL: By one vote and died in the Senate in the midst of a severe
recession where the jobs narrative overtook the climate narrative. But the
lesson is that there are oil companies, big oil companies in the coalition
that was working to pass that carbon price.

And the reason is they`ve got a great business. It`s incredibly
durable. It`s incredibly profitable.

What they want is price certainty. They want to be able to plan, and
they`re willing to accept a carbon price, some of them, if they have to if
it`s made clear that it`s inevitable politically because they can still run
a great business and still believe in the viability of the oil and gas
business. They provide a different story in public, but in private they`re
planning for this price.

So the politics -- we tend to see these politics as impossible and
captured by lobbyists and frozen. You know, the reality is in 2009 we as a
country were that close to doing it. And --

BEINECKE: We`re going to be that close again.

COLL: We have to --

HAYES: But here`s the deeper question, right? Because -- and this --
I think this structures our conversation about fracking as well, which is,
you know, when we look at the short term, it`s reduced carbon emissions.
But in the long term, if you -- if you look at this sort of Bill McKibben
framework and I think estimating what total known fossil reserves in the
world, it`s a very difficult thing to do. That`s a rough picture.
Technology has come online, et cetera.

But if you`re talking about -- look, all the stuff we know that`s in
the ground now, we can only stay a fifth out of it and stay at 2 degrees.
You`re talking about asking an industry, you`re basically talking about
dispossessing this industry of trillions of dollars of wealth.

And the politics of that are not some sort of trivial thing that
people are pricing in. That`s a battle. That`s as much of a battle you
can get in anything.

MCGINTY: It is a battle. And some of it is really not very visible
at all, but really consequential to what gets to compete, right? So,
renewables have this bad wrap of being, they`re too expensive. We can`t
afford them.

Good news with technology is actually the price of producing that
electron from a solar panel has really plummeted. Well, what`s the
difference? The difference is you have to actually build that new
renewable energy plan. It`s not just the cost of the electrons, it`s the
cost of the plan.

HAYES: Right.

MCGINTY: Now, if it`s competing against the legacy coal plant, the
rate payers already paid for that.

HAYES: Right, right.

MCGINTY: So the competition is really unfair. And then there are
these aspects to the utility market, something called a capacity market.
What`s that? Well, it`s a new market invented where to keep power plants
online, there is an extra price we pay for plants already paid for just to
keep them around. We need that from a reliability point of view.

HAYES: Right.

MCGINTY: But what if we said, OK. Capacity payment, but now we`re
going to have performance standards and we want clean, new generation. You
want the check. Build something clean and new.

There are levers out there if we can level the playing field, the cost
of electricity from renewables right now has really starting to become very

BEINECKE: It absolutely is getting competitive. And I think that`s
where the rules come in. We have to incentivize the newer, cleaner
technologies and we have to have policies to do that, because right now,
the price doesn`t allow that because the natural gas price is driven so

So, you know, that`s where we need a national energy plan. Now, you
know, career -- eight presidents have called for a national energy plan.
None has delivered. You know, we`re hoping to get one that actually looks
to the future and addresses climate change as the gravest threat facing the
planet at this point.

HAYES: I`m glad you cued up the renewable conversation because that`s
we`re going to take things next.

Steve Coll, author of "Private Empire: ExxonMobil and American Power,"
and CEO of New America Foundation, CNBC contributor Dan Dicker -- thanks
for joining us this morning. It was great.

The energy revolution that no one is talking about but can prove our
salvation, up next.


HAYES: Along with the Bush tax cuts, the adjustments to the
alternative minimum tax end payments to doctors under Medicare, there`s
another crucial piece of legislation set to expire. In December 31st, if
Congress doesn`t act, the renewable tax credit which costs us a billion
dollars a year gives wind producers a tax credit that according to the
industry has led to $20 billion in private investment and the creation of
75,000 jobs.

In fact, we`re in the midst of an incredible boom with wind energy.
With wind energy generation increasing 600 percent between 2006 and 2011,
going from supplying 18 percent of American electric generating capacity to
32 percent.

And there`s solar, which according to the International Energy Agency,
is the fastest growing renewable technology in the world, mainly because
the price of solar panels is dropping at an astonishing rate, about 7
percent a year, pushing the price of solar power generation down 40 percent
in the past year.

All of this is encouraging, but because of the costs we pay for carbon
emissions aren`t included in the production cost of gas and coal, the only
way for wind and solar to be competitive is through subsidies like the
renewable energy tax credit.

As you can see from this chart, from 2005 to 2008, continuity and the
availability of the renewable tax credit has ensured steady growth in wind
power. Conversely, expiration of the tax credit in `99, 2001 and 2003
wrecked havoc on the wind power industry in the years that followed.

In other words, until we start pricing carbon appropriately, the fate
of clean energy lies in the hands of lawmakers which is generally a scary
place to be.

Joining us now: we have Bob Freling, executive director of the Solar
Electric Life Fund, Shalini Ramanathan, vice president of the Development
and Renewable Energy Systems America and a leading developer of wind
projects, and also a next generation project fellow at the Robert S.
Strauss Center for International Security and Law at the University of


HAYES: Wow. And Dave Roberts, staff writer on energy politics and
policy of is back at the table. Kate McGinty is also here.

Let`s start with the subsidy issues, because I think when we talk
about renewable. I mean, there`s a sort of wonderful narrative that`s been
established. And Solyndra became this kind of iconic thing, which is like
these are basically welfare cases, right? Like, we`ve got real energy over
here and then we`ve got this sort of, like, I don`t know, charity case. We
throw some money at them, but this --

MCGINTY: I have to dive into this one --

HAYES: Yes, please?

MCGINTY: -- because the only thing that`s new about the subsidies for
renewables is that, in fact, over the last couple of years as your graphic
showed we have had them. They`re only catching up to the decades and
decades and decades we have had for fossil fuels and for nuclear. In those
industries they have permanent tax incentives. Renewables, by contrast,
this year maybe, another year not and it leads to a plummeting in the
industry and a rise in the cost.

DAVE ROBERTS, GRIST.ORG: And it`s worth pointing out the explicit tax
breaks that oil and gas and fossil fuels get is only a tiny sliver of the
subsidy, depending on how you find subsidy. There`s the unpriced carbon,
of course.

HAYES: Which is the biggest, subsidy.

ROBERTS: Of course, there`s all this built infrastructure designed
for fossil fuels. So, it`s not just --

HAYES: What do you mean by that?

ROBERTS: Pipelines and electricity transmission lines lead to coal
plants where there`s the most wind and solar. You don`t yet have
transmission lines built there.

The point is, it`s not a matter of just sort of plucking one piece of
a system out and putting a new piece in. You`re talking about building a
whole new system, and that`s -- it`s very hard to sort of compare unit
costs when you`re talking about that. You know, you`re talking about a
more holistic view of things.

HAYES: Shalini?

it`s important to point out that with the wind industry we have the
production tax credit, which is a credit. It`s not a subsidy.

HAYES: Right.

RAMANATHAN: And it attracts an enormous level of private investment.

In fact, what we do is bring in capital from all over the world,
people who want to own wind and solar projects. So, as Katie said, all
energy is incentivized and subsidized if anything from the playing field
and renewables are barely beginning to catch up.

Wind and solar projects, utility scale projects are infrastructure, as
Dave was saying. And it takes two, three, five years sometimes to work on
these projects and get them ready.

HAYES: Why is -- why is -- I want to talk to Bob and Shalini. I want
to talk about why this price has come down, because it`s really kind of
amazing and encouraging. What`s going on in wind that we`ve gone through
this kind of wind boom?

RAMANATHAN: I think there are a couple of factors. The renewable
portfolio standards in key states in California, Texas have really made a
huge difference.

HAYES: Explain what those are.

RAMANATHAN: Renewable portfolio standards require utilities to
procure green power.

HAYES: Right.

RAMANATHAN: So in Texas, we have blown past the RPS, that`s 10,000
megawatts by 2025, and we`re already there.

HAYES: So, it says to utility, it dictates and demands from the
state, it`s passed by the state. Of the -- you know, however much power,
100 percent of the power, right, some percentage has to come, has to, no
excuses, come from renewable sources?

RAMANATHAN: That`s exactly right. That`s a huge driver for private
investment in the industry. It`s also been very important, as Katie said,
to have the production tax credit, the investment tax credit for solar,
especially in a plummeting gas price environment.

HAYES: Right.

RAMANATHAN: We need these incentives in order to keep building the

HAYES: Solar, I think, is undergoing a sort of remarkable decline in
the costs of production, but it doesn`t have nearly the share that wind
does, right? Is that where solar is at right now?

FRELING: Let me put this in perspective, because you talk about the
photovoltaic cell.

HAYES: Right.

FRELING: Convert satellite into electricity. The first commercial
use of that was in 1954, Bell Labs used solar cells to power telephone
repeater stations. At the time, it was -- it was literally astronomical in
costs. And had it not been for the space race, with the Soviets, where we
needed satellites in space, we needed sources of power for these

HAYES: Fascinating.

FRELING: So, NASA turned to solar cells as a source of power for the
satellites. But at the time, they cost literally hundreds of dollars per
watt. NASA didn`t care, right?



FRELING: But over the last decades, the cost of solar cells has come
down and down and down. The efficiency, the conversion efficiency has
continued to go up and up and up, right? And now, you`ve got solar cells
that are being produced for under a dollar a watt. Just in the last few
years, they come down a factor of three, thanks mostly to the Chinese which
ramped up production and made 50 percent of it.

HAYES: Hugely.


RAMANATHAN: Put some numbers around. The price of solar panels have
come down 46 percent since the first quarter of 2010.

HAYES: That`s crazy.

RAMANATHAN: It`s incredible.

HAYES: I`m glad that you cued up the international discussion because
that`s -- there`s a lot of exciting stuff happening internationally. And I
think it`s important for Americans to hear this can be done. That it
doesn`t have to be this sort of after thought welfare case. That actually
it can actually be integrated into how a nation gets its power.

So, more on that after this break.


HAYES: In Germany, right now there`s been a real revolutionary
transformation of the grid there. I have some video looking at what this -
- what the kind of new German energy future or present looks like. You`ve
got times when half the power in Germany is being produced by renewables.
You have a tremendous explosion of wind and solar generation.

How did this happen, Dave? How did -- how did Germany begin to
undertake this?

ROBERTS: It`s a really fascinating story. The German law doesn`t
cost -- this is what it says. It doesn`t cost the government any money.

Electricity rate payers pay an extra fee to subsidize people who
install solar or wind. And people who install solar and wind are
guaranteed a higher than market rate of return for something like a decade.
These are called feed-in tariffs in keeping with green`s -- you know,
aptitude for great terminology.


HAYES: Screw it. Tomorrow, we`re doing an hour on feed-in tariffs.

ROBERTS: Yes. I had dinner with the parliamentarian in Germany that
got this passed last year. I asked him, this one law is like a lever that
is transforming one of the biggest industrial economies in the world. How
in the world did you make this happen? You know, especially relative to
the frozen politics in the U.S.

And he`s like, we passed it in 2000, and everybody laughed at me. And
everybody thought it was this trivial. Everybody thought, you know, it`s
not going to make a material difference to anything. And so, they just
didn`t pay attention.

The big utilities in Germany are just as opposed as --

HAYES: Sure.

ROBERTS: As big utilities are. But they sort of snuck this thing in
and it ratcheted its way up to forcing Germany to make these big systemic

HAYES: So, it`s basically for the person that wants to have a wind
turbine or solar panel, it`s giving them the incentives and guaranteeing a
sort of return.

ROBERTS: A certainty, yes.

HAYES: A certainty, right? Like I put this in -- and is that the
reason? I ask myself -- I remember being in Turkey, OK? I looked -- you
drive through a town of 50,000 in the middle of Turkey, in the center of
Turkey, and every single water heater is solar power water heater.

And I`m just thinking of myself, why isn`t that the case in California
or Arizona? Like, if this is not some super sophisticated technology.
This is a place that per capita GDP is way lower than the U.S. I`m not in
some cosmopolitan high-tech center. I`m in the middle of a town in Turkey.
And yet, there`s every single water heater is solar powered.

Why isn`t it not the case that we have this -- we have more deployment
like that in the U.S.?

FRELING: I wish I could answer that.


RAMANATHAN: A couple of points there. In terms of solar hot water
heating specifically, which is a simple solar technology, we actually have
a lot of natural gas water heaters in this country which are very
efficient. So, I think solar hot water heaters are a great idea, but I
think that natural gas if you have that, if you`ve got a tankless water
heater --

HAYES: It`s already doing it fairly efficiently.

RAMANATHAN: Very efficient.

In terms of solar P.V. technology, it`s growing very quickly in the
U.S. And I think we touched a little bit on the fallen prices which, of
course, has pushed, you know, the adoption. Another big factor are the
number of different products that solar companies are offering.

You know, you asked why don`t more people do it? Well, it`s hard to
pay for something up front that you`re going to use over 25 years.


RAMANATHAN: But when a company like Solar City that I think is going
to have a very successful IPO in the next couple of weeks, if they say you
don`t have to pay any more than what you`re paying currently for solar.
And we`ll take care of everything, all you have to do is, you know, just
give us the real property on your roof. I think that has --


RAMANATHAN: Many companies are doing that.

MCGINTY: That`s a great example of how most of this is driven by
private dollars, your dollars, my dollars, various businesses` dollars.

You know, Dave, I was thinking when you`re talking about feed-in
tariffs, I go, geez, is there something about solar that it needed that
special price guarantee? If you look back six decades in the United
States, not only were prices guaranteed for the big conventional power
plants that were built, but each company got a monopoly guarantee market

HAYES: Right.

MCGINTY: That`s how those plants got built. Today, with solar and
renewables, it`s mostly private dollars driving that industry.

ROBERTS: Another thing that she brings up is with the price of panel
being so low now, basically being commoditized, it`s a cheap commodity now,
the differences in solar prices between installed solar in the U.S. and the
installed solar in, say, Germany are what`s called soft costs, which are
things like acquiring customers, installing, maintenance, and financing,
which is a huge, huge piece.

And the U.S. is just sort of getting in that game of soft costs. In
Germany, you know, those costs are tiny relative to the U.S. So there`s
lots of room there to move.

FRELING: Just like to pickup on your reasoning of finance, because it
is so critically when you talk about solar electricity. You know, solar
panels are warranted for 25 years, right? So they`re going to generate
power reliably for decades to come.

And, you know, if somebody asks me to pay for three decades of
electricity, you know, through my utility bill I`d have a hard time.

HAYES: Right.

FRELING: That`s what you`re effectively asking folks.

HAYES: When you ask them to buy.

FRELING: Financing is absolutely critical to enable users of solar
systems to pay for these systems over time.

HAYES: We`ve talked about the U.S. and we talked about what`s
happening in Germany, which is a one path forward. From the climate
perspective, the single most important thing is what happens in the pathway
the development of those places that are not very energy intensive right
now as they become energy intensive. And do they go the path way of clean
and renewable energy or do they go the path way of essentially diesel
burners and coal? Because if they do the latter, we`re basically screwed.

And, Bob, you run an incredible nonprofit that works on electrifying
places that don`t have electricity with solar. I want you to talk about
the work you do, because I think it`s really remarkable right after this


HAYES: So, we`re sitting here in a well-lit studio, on the grid in
the wealthiest cities in the world, New York City, where we take energy for

But, Bob, there are 1.5 billion people on this planet who do not have
reliable access to electricity, and they should. The question is, are they
going to -- how is that electrification going to happen? Tell me what your
organization does?

FRELING: Sure. The Solar Electric Life Fund, SELF, is a nonprofit
organization founded in 1990. So, for the last two decades we`d been bring
solar electricity to rural and remote villages in the developing world,
places that have never been connected to a conventional power line and
aren`t likely to be connected anytime in the foreseeable future.

You mentioned reliable electricity. These folks have zero
electricity, right?

HAYES: Right.

FRELING: So basically what does that mean? When the sun goes down,
these folks retreat into homes that are light dimly, if at all, by candles
or smoky polluting kerosene lanterns, right? And children aren`t able to
read or study at night. They have to breathe in the kerosene fumes which
are toxic, 1.5 million die every year from indoor air pollution, right?

There`s basically nothing they can do to lift themselves out of
poverty. They`re condemned to live their lives in utter darkness. No way
to pump water. No way to refrigerate vaccines. No way to deliver a baby
at night. No way to communicate with the outside world, right?

So, energy poverty undermines every attempt of these people to achieve
a better life for themselves. The question as you pointed out is how are
these people going to emerge from centuries of darkness into a brighter
future is a critical question. Are they going to rely on fossil fuels and
centralized power sources?

Well, the fact is it costs up to $20,000 a mile to extend a grid to
these rural villages.


FRELING: Very disperse population. So it`s not economic to do so.
They could fire up a diesel generator, right?

HAYES: Which is what a lot of places do do.

FRELING: Absent the grid, they turn to diesel generators. We`re
working with a group called Partners in Health, a well-known organization
out of Boston delivering health care to the poorest of poor, initially in
Haiti, later in Lesotho, Rwanda, Malawi.

HAYES: Right.

FRELING: They have been using diesel generators because they had no
choice to power the hospital, right?

We turned them and said there`s a better way. It will cost more up
front with a solar solution, but over time, they`re actually saving money,
lots of money. And so, it`s not just a more sustainable way to go
economically. It`s a smarter way.

HAYES: I want to show this -- a little bit of video about a project
in West Africa, because it`s not just the power and lights. It actually
undergirds that whole sort of revolution in irrigation. Take a look.


NARRATOR: Thanks to irrigation, the production has been multiplied by
10. The crops are more varied and today maize, tomatoes or even salad grow

UNIDENTIFIED FEMALE: I`m always in the garden. We didn`t know that
the sun could do all of this. Now we sell, we eat. We eat a lot here.

NARRATOR: These women can now feed their families all year-round, but
also earn money and rise from poverty by selling their crops on the

Commerce has appeared thanks to solar power, a first step towards


HAYES: You and I met a few years ago, and you told me about this
project. I just -- I feel like you should have a budget of a billion


HAYES: I`m serious. It does seem to me like this is -- you know, we
have a -- it`s such a crazy conversation about energy in this country and
this world, and I know in this country, people who are extremely poor and I
know a lot of folks that work among populations that are extremely poor,
your energy bill is a big part of your disposable income. We`re talking
about cheap energy and for people who are relatively affluent, it`s like
this afterthought about your cable bill is eating much more than your
energy bill.

But when you don`t have a lot of money, energy costs are extremely
important. So, there`s a huge disconnect at the top of the social pyramid,
at the bottom of the social pyramid both in the country and globally about
how we think about energy and its price. And we can have a system that`s
both equitable and also sustainable.

ROBERTS: Yes. One connection I wanted to draw with this work is
you`re talking about bringing solar power to people in very austere
conditions. But there are other people who are working in austere
conditions right now, who are looking to solar and that`s the U.S.
military. I did a story last year on the Marines who are out in these
forward bases in Afghanistan.

HAYES: Off the grid as well.

Hold that thought because we have great video of that as well and I`m
going to play that and talk about what the Department of Defense is doing
on this, right after this.



UNIDENTIFIED MALE: The experimental solar panel is designed to power
a small military operation center. It`s called the GREEN System, which
stands for the Ground Renewable Expeditionary Energy Network System.

1,700 watts of pure energy into the controller system. The controller
system will then take that and put it into a high energy lithium battery.


HAYES: That`s a publicity clip from the Department of Defense about
the GREEN products they`ve been deploying.

ROBERTS: Yes. I talked to some Marines about this. Not one
mentioned greenhouse gases. Every one of them loves these things because
it`s just purely a utility for them. It`s purely an advantage for them.

And the connection I was going to make is they`re working in austere
conditions in the front lines in Afghanistan. If we`re right about climate
change, you know, post-Sandy New York is another set of austere conditions,
there`s going to be a lot more conditions in the world where you need
portable, self-contained electricity generation.

RAMANATHAN: I think another driver for the Department of Defense,
their interest in renewable energy isn`t just the green. It`s also
concerns about cyber security. I think installations want up the ability
to island systems in case of an attack they`re not completely down.

HAYES: Right. And the sort of resilience question gets to the work
you`re doing in places that haven`t had electricity, right? I said this
earlier on the show. I mean, it`s a remarkable thing how much you take
electricity for granted and then when it goes away, you realize everything
about your life is entirely dependent on it.

And so, this -- I guess my question is if you put a solar panel in a
village that hasn`t had electricity, what happens if six months from now it
breaks or there`s a problem with it? I mean, it seems like this could be a
recipe for this kind of brief period, this brief renaissance and then going
back and forth?

FRELING: Right. The solar panel is not likely to break, but what you
need to take care of is long-term maintenance with the battery if you`re
using batteries to score electricity. There are some applications such as
water pumping which do not require batteries. In this case, you are using
the sun`s energy to pump water to a reservoir and you`re letting the
gravity to do the rest, which is actually what we were using with the
project in Benin.

If I could just --

HAYES: Yes, please.

FRELING: -- quickly, you know, elaborate a little on the project
because it`s pretty remarkable how far a little bit of energy goes.

In this case, we were asked to go and provide power for an entire
community. And we`ve developed this whole village model where we use
electricity for lights at home but also for the clinic, the school, for
street lighting, right, for water pumping, for microenterprise and even
wireless communications.

Now, in this particular village when we did a needs assessment, what
became clear was their number one concern was food security, because during
the six-month dry season which from November through April, there`s no food
production, no rain and malnutrition is widespread. So, we simply combined
solar water pumps, pumping water from an underground aquifer or in some
cases, a river and pumping that water to a reservoir, and then feeding a
drip irrigation system, right, which is allowing these women farmers we`re
working with to grow high value fruits and vegetables year-round.

You go back to this village and they`re well-fed. They`re also
earning income with the produce they`re selling to the market. Suddenly,
we have a model that`s not only providing access to energy, but water and
food and income and women`s empowerment.

MCGINTY: Yes, I`m just wondering when you think about telephones, the
developing world kind of leapfrogged the U.S. in terms of the poles and
water to mobile.


MCGINTY: Do you see the same thing potentially in energy?

FRELING: Well, it`s exactly what we`re doing. These folks in Africa
went straight to 21st century technology -- wireless power, right? They`re
bypassing the distribution lines. You don`t need to run these transmission
lines to the villages. Wherever the sun shines, you can capture those
times and generate power for just about everything you need in a
sustainable carbon-free way.

ROBERTS: It`s worth emphasizing if they go the other way --

HAYES: Right.

ROBERTS: -- if they go the central fossil fuel generation and big
transmission line model in the developing world, we are toast.

HAYES: Right, right.

And there`s also costs to even if you don`t do that, the kerosene that
you talked about and diesel generators and even wood stoves, which is a
whole literature now about wood stoves and the environmental havoc that
wood stoves are wreaking. So, there`s a lot of different ways to get power
that aren`t necessarily this huge distributed power system that have pretty
intense environmental effects.

What do we know now that we didn`t know last week? My answer is after


HAYES: In just a moment, what we know now that we didn`t know last
week. But, first, a quick update on the story we`ve been following.

I`ve commented about the unfolding drama in the New York state Senate
and my frustration with New York Democratic Governor Andrew Cuomo`s seeming
unwillingness to expend effort to help Democrats security a majority in
that body. Despite a redistricting map very favorable to Republicans,
Democrats managed to win 31 seats and they are expected to win two
additional recounts which would give them a majority in the 63-seat body.

But one Democrat, Simcha Felder, announced immediately after the
election he`d be caucusing the Republicans. And this week comes word that
the four members of the self-described independent Democratic caucus who
joined the Republicans last time around will join them again along, with
one new member, creating a Republican-dominated coalition majority in the
state Senate despite Democrats gains at a ballot box. In a state where
more than 40 percent of residents are nonwhite, this new majority coalition
I should note is 90 percent white.

Governor Cuomo publishing an op-ed in the "Albany Times Union"
tentatively endorsing the new majority coalition, citing previous
dysfunction by the last Democratic Senate majority and laying out a litmus
test for the new body of legislative priorities. Some of these ideas are
questionable but some are genuinely excellent progressive ideas that
urgently need to pass.

And I agree with Governor Cuomo that the issue now is outcomes and not
process. Having given his blessing to the new arrangement, the governor
now owns the outcomes it produces. Progressives in New York state and
around the country should judge him by those outcomes. Does the state
raise the minimum wage, reform New York City`s stop and frisk policy, take
strong action on climate, and perhaps most importantly, does it pass an
ambitious public financing law for campaigns?

The governor asked voters and progressives to judge him on what his
administration delivers, not how the Senate majority came to be. And we
will be happy to oblige him. We`ll be watching very closely.

So, what do really we know now that we didn`t last week?

Thanks to a study by the World Bank, we know more clearly who will
suffer most severely from the effects of climate change. It is ironically
the source of much of the world`s oil, northern Africa and much of the
Middle East. And it is, of course, not the region`s oil barons who will
pay the price.

The World Bank estimates that rising temperatures and reduced rainfall
in some areas will have a devastating effect on the region`s most
vulnerable. Household incomes will drop 7 percent in Syria and Tunisia, 24
percent in Yemen. Malaria and malnutrition will be wild spread.

We also know now that while today`s world leaders stand by and let it
happen, the young people who will inherit this hostile planet are taking
action. As Bill McKibben discussed on this program, his group is
helping a lot of students to push their colleges to divest their endowments
from fossil fuel stocks.

Unity College president Stephen Mulkey wrote a letter to college
administrators saying, quote, "In the near future, the political tide will
turn and the public will demand action on climate change. Our students are
already demanding action and we must not ignore them."

Suzanne Welsh, V.P. of finance for Swarthmore, told "The New York
Times", quote, "The endowment is not to be invested for social purposes.
We already knew that investments are inextricably linked to social
purposes, and now we know some institutions prefer not to see that."

And, finally, of the gases put in the air by big corporations
transform our world to one more prone to weather-related disaster, we now
know that other big corporations are working hard to block the changes we
need to deal with the consequences.

A new report by "ProPublica" details how cell phone carriers have
waged a campaign against proposal that would require them to improve cell
phone service during disaster. Specifically after Katrina, industry
thought up a rule that will require cell towers to keep 24 hours of backup
power in reserve. The cell phone users sought areas with service in the
first hours after Sandy struck, AT&T and Sprint did not release details on
where their service was down.

We know the forces of the status quo and entrenched incumbent
interests will have to be fought every step of the way if we want to bring
about a sustainable and resilient future.

I want to find out what my guests know now they did not know at the
beginning of the week.

Kate McGinty?

MCGINTY: Thanks.

Mine is a DOD piece and some good news. During the height of the
election campaign, on a partisan move, the House took out dollars from
DOD`s budget for energy efficiency and renewable energy. The good news is
post-election, it`s restored. That`s important.

DOD is the biggest consumer of energy. So, great market for
renewables and efficiency.

Second, DOD has become a great driver of innovation and energy
technology. Just like DARPA did on the Internet.

The last one is something that Dave touched on, the credibility of
renewables. When you are talking security -- and DOD cares -- it brings in
a whole different perspective in furtherance of renewables and efficiency.

HAYES: Yes. And, obviously, there is a tremendous amount of research
dollars in the world of the Pentagon as we saw it with the development of
DARPA and things like that. And a lot of times, technologies that begin at
military technology, GPS is the best example, right, started as military
technology and then become broadly successful in the public and cost comes

MCGINTY: Absolutely. And we`re back on track now for good news.


FRELING: Last week, NASA released images from their visible infrared
imaging radiometer suit. I`m now told that basically it`s a satellite
using high resolution, visible and infrared imaging to reveal the most
detailed images of earth at night that we`ve ever seen.

And, for me, that was just another reminder of the reality in which we
live where you have 1.5 billion people without power. You look at Africa
at night, and you see it`s basically a continent shrouded in darkness. And
to me, that`s something we keep needing to remind ourselves.

You know, for any of your viewers that want to know what they can do
to help bring light and power.

HAYES: To get to that $1 billion budget.

FRELING: Absolutely. And hope to the poorest people in the world. I
would like to welcome them to visit our Web site, which is A
little bit goes a long way.

HAYES: For full disclosure, I always give to your organization every
year. And I think it`s an incredibly worthy organization to give to. And
folks should definitely check that out,


RAMANATHAN: I learned that Rio Tinto, the big mining company, is
using wind turbines for a diamond mind in northern Canada, and they`re
doing it not for any kind of environmental reasons but because it`s the
only reliable source of fuel there. So, I think it points out, there are
many reasons to do renewables and in a lot of context, they are the best
source of electricity for people.

HAYES: And is that a situation where we`re talking about before where
you can basically just have power generation local and not have to be
hooked up to the grid or not have to extend lines out, et cetera?

RAMANATHAN: It is. And I think it`s important to point out that, you
know, renewables can happen a lot of different ways. You can do what Bob
is doing and have solar panels on people`s roofs, which is happening in the
U.S. as well. Or you can have the big power projects that are big wind
turbines like what my company has done and others have done, and big solar

So, really, wind and solar can be either grid connected or stand-
alone. It depends on the problem you are trying to solve.

HAYES: Dave?

ROBERTS: It has been taken for granted by politics watchers that at
the federal level, climate politics is broken, nothing out of the federal
government. But it turns out not to be true. There is a provision of the
Clean Air Act that Obama can use to reduce total U.S. carbon emissions 10
percent by 2020 with the stroke of his pen without permission from

So, he`s got no excuse now. And if people are looking for a place to
focus their energy on trying to make something actually happen here, this
is a tool that is laying on the table. And, right now, the EPA is very
nervous, for obvious reasons, about using it and could use some bucking up,
I think.

HAYES: The EPA is in the midst of a process internal about what rules
are going to come out. They have come out with some rules and others. The
Supreme Court has authorized them to regulate carbon under the Clean Air
Act. So, they have that -- they have that legal authority.

And NRDC has put out this report sketching out a way they could go
about doing it in a plausible fashion that wouldn`t be too much.

ROBERTS: Yes. And if you are interested in the details, I wrote it
up at, which also deserves $1 billion.

HAYES: Just throwing around billions here.

My thanks to Kathleen McGinty from the sustainable construction
company WESTON Solutions, Bob Freling from the Solar Electric Life Fund,, Shalini Ramanathan from the wind energy company RES Americas, and
Dave Roberts from Thanks for getting up.

Thank you for joining us today for UP.

Join us tomorrow, Sunday morning at 8:00 when we`ll have Dan Savage.
He`s getting married tomorrow. The first day it will be legal in
Washington state.

I sat down with him last night for a bottle of champagne at this desk
for an amazing talk about same-sex marriage and what it means for the gay
community, Supreme Court`s decision to hear a challenge to DOMA, Defense of
Marriage Act -- all of that we will have for you tomorrow. I`m really
excited. It was a great, great conversation with Dan.

Coming up next is "MELISSA HARRIS-PERRY". On today`s "MHP", "Reefer
Revolution", recreational marijuana use in Washington state is now legal.
Are we seeing the beginning of the end of a misguided harmful war on drugs?
That and more on "MELISSA HARRIS PERRY", coming up next.

We`ll see you right here tomorrow at 8:00. Thanks for getting UP.


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