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Foreign Affairs Media Call with Fred Krupp

Speaker: Fred Krupp, President, Environmental Defense Fund
Presider: Gideon Rose, Editor, Peter G. Peterson Chair, Foreign Affairs magazine
May 1, 2014
Foreign Affairs



OPERATOR: Excuse me, everyone. We now have all of our speakers in conference. Please be aware that each of your lines is in a listen-only mode.

At the conclusion of today's presentation, we will open the floor for questions. At that time, instructions will be given as to the procedure to follow if you would like to ask a question.

I would now like to turn the conference over to Mr. Gideon Rose.

Mr. Rose, you may begin.

ROSE: Hi, everybody. Gideon Rose here, editor of "Foreign Affairs."

I'm delighted to be able to preside over this call today with Fred Krupp, the president of the Environmental Defense Fund, who is a great guy and a great environmentalist, and a very sensible, practical expert on a lot of things, as well.

In an era in which development and the environment and the people who support both are often at odds, Fred has always been a voice of reason trying to get win-win solutions for all concerned, wherever possible. And we're delighted to be able to bring him and his expertise to bear on the crucial issue of fracking and the shale revolution.

So the source of this call is that he did a wonderful article for "Foreign Affairs" called "Don't Just Drill, Baby -- Drill Carefully," in our new May/June issue. And he and Mike Bloomberg did a nice op-ed for the "Times" yesterday on the same subject. The former mayor couldn't be with us today, but we've got Fred.

So Fred, let's just kick it off. Basically right now you have a very polarized environment in which half the community seems to be interested in fracking at all costs and half the community seems to be preventing environmental disasters and banning it entirely.

So you seem to believe that there is a middle ground that fracking can be made safer for the environment and the shale revolution can be both tapped for its value, economically, and perhaps even for its benefits, while not destroying the climate and the environment and so forth.

What is the middle ground and what needs to happen for it to get there?

KRUPP: Well, thanks, Gideon. And it's a pleasure to be with you again.

The - I think first of all we need to recognize the reality, and the reality is that natural gas has benefits, both economic benefits and environmental benefits.

Here in the United States specifically, starting there, although this is clearly a global -- a resource that's present in a lot of countries around the globe, the economic benefits for the United States have been that it's lowered the cost of heating homes and other spaces, businesses; it's lowered the cost of electricity; it's created jobs; it's bringing manufacturing back.

And the environmental benefits are clear, as well. There's so much less sulfur dioxide in particulates, in mercury, miniscule amounts released when you burn natural gas to make energy as opposed to when you burn coal.

Equally clear, though, is that the concern about using natural gas arises from very legitimate issues. That is, that oftentimes in the country, and Pennsylvania is one example near to where I work in New York, it's been done in many cases sloppily.

It's contaminated water supplies despite industry denials. It hasn't necessarily contaminated water from the fractures, and the rock industry has been right about that. But it's contaminated water from -- in some cases, from surface spills of chemicals or from improperly cemented well casings that allow the fracking fluid to leach into the water.

And then there are other problems that communities have experienced. Local problems, like trucks and roads; air pollution problems; people have gotten sick near these wells from noxious fumes that are released sometimes from some of the drilling operations.

And then you have the global issue of methane, which is a very potent greenhouse gas. So even though when you burn natural gas, it's about half the carbon dioxide, half the greenhouse gases than coal, that advantage can be undermined, even completely undermined, depending on how much methane is released not only at the well site but then downstream before it gets to the burner tip.

So a long answer, Gideon, but it's a complicated issue. Just suffice it to say that the problems that this industry has posed for communities, I think we've seen they're solvable. We've seen the regulations getting tighter. We've seen industry improving its practices. But we've got a lot of work left to do before we can say that the potential to do this right has been realized.

ROSE: So my question I guess would be, are the problems with fracking, in your view, basically problems when you do it wrong or when you don't follow best practices? Or are they problems that occur even when you do it right? In other words, are there inherent downsides to the process?

Because if it's the latter, then the -- the consequences are a lot more mixed and you end up having a kind of zero-sum game between the environment and industry, let's say. But if it's the former, then there are ways you could proceed that would be still economically viable, but would allow the benefits to be reaped without some of the downsides.

So which is it? Is it -- is it -- if you did it all right, if you had some kind of ideal fracker or energy company who listened to everything you say, could they still make a viable, healthy economic contribution in a way that you would consider a win-win for everybody?

KRUPP: Great question. We've spent time talking about the benefits, both economic and environmental. So now are the costs unavoidable or are they avoidable?

I would say two things are true, Gideon. The first is that when you drill wells in a community or in a forest, you inescapably add an element of industrialization to that landscape. Even after the drills are gone and the trucks are gone and the noise of drilling the well is gone, you're going to have a well pad with lights on it pumping.

So you're not going to have pristine forest anymore. And so there are certain places where the -- the downside of some level of industrialization probably states and communities won't want in the middle of a park, in an area that you -- that the public has decided they want to keep pristine.

You'll unavoidably be industrializing to some extent. So that's inherent.

However, in other communities that are willing to accept a level of industrialization, then the other problems can definitely be mitigated and reduced. And some of them can be avoided entirely.

The air pollution problems and the methane problems can be dramatically reduced, I think, in some cases gotten to be near zero emissions. So -- and the -- the water contamination problems I'm convinced done right with the right system of rules in place and compliance with those rules, which is tricky in a dispersed industry, but I think the -- the costs or risks, other than the industrialization, are manageable.

Now having said that, a lot of my friends in the business community want to end the conversation there, as though they've won. OK, you're an environmentalist. You've just admitted they're manageable. Conversation over.

I guess the point of the piece that I wrote for "Foreign Affairs" was OK, they're theoretically manageable, but now we've got to do the hard work, the local, state, and federal level of getting the rules in place and the compliance systems in place so that they're actually managed.

ROSE: OK, let's press that point. I'm -- let's say I'm a major industry player and I understand everything you just said. Why wouldn't it be in my interest to create a set of industry-wide best practices, to reap the benefits and diminish the opposition?

Couldn't you say, and wouldn't people who support the free market say that, look, this is a case in which the industry actually has real incentives to police itself and since there are answers, we can sort of rely on the industry and free markets to provide those answers themselves?

Or are you saying, and is there a role for government at various levels to basically set out regulations which force the industry to follow the best practices that are, in effect, in its own long-term best interest?

KRUPP: There's definitely a role for government. I mean, a clear answer here, Gideon, is that the -- this industry is so decentralized, the piece before mine in your magazine by Mr. Hefner talked about 6,000 different operators in the oil and gas industry.

ROSE: Let me ask you something about that. So one of the things that piece talked about was why this occurred in the United States, the shale revolution, and not in other areas.

And there were a couple different reasons for that, one of which was that mineral rights are locally held in ways that are not nationally held. So you can make deals with local people to try to experiment things.

And the second was that the energy industry in the United States is not entirely dominated by a few majors, but has a large independent presence who are hungry and want to innovate and try new things. And it was this combination of interested demand and potential supply that has created the innovation and experimentation that has led to the fracking revolution going so far in the U.S.

And your point is that that very source actually makes it problematic in terms of establishing rules of the road for everybody.

KRUPP: Exactly. I mean that was a fascinating article. And I think right on target from what I have observed, that this is a strength, but at the same time it means that, unlike off-shore drilling where the costs to entry are so high you only have a few operators, and ideally they can police themselves. Although we've seen a big accident in the Gulf, of course, and elsewhere.

Here that's impossible. Even in some idealized world, you're not going to get all the actors to police themselves. If you have -- the last I looked, there's been some consolidation since. But as of a couple of years ago, the top 40 producers of oil and gas on shore only represented half of the production in the United States.

You'd need to get up to several hundred producers to get to 75 percent. And then you have thousands to get to 100 percent.

Here is where you really need a role for government -- standards and a system that inspires and mandates compliance.

ROSE: Got it. And to -- which -- which level of government are we talking about? Is this municipal? Is this state level? Is this national level? Is it a little bit of all the above? Is it international?

KRUPP: It's a little bit of all the above. The local communities, my view is they should have their traditional zoning powers intact to regulate things that local communities traditionally do.

The states, which have traditionally taken the lead in regulating oil and gas operations, and have a lot of expertise, they need to be engaged, too.

And at the federal level in our country, EPA has traditionally taken the lead on the air size. There are some air regulations in the -- on the natural gas industry. Unfortunately, even though they've been incrementally improved, they're still woefully inadequate to protect either the local communities or the atmosphere from global warming gases.

And internationally, you mentioned, Gideon, internationally there have been good conversations at the International Energy Agency about -- to inform really governments on what sort of rules should be put in place.

ROSE: OK. So the -- at some point we're probably going to have to move beyond fossil fuels to renewables to a different kind of energy economy for a variety of reasons, including obviously climate change.

Do you think that the shale revolution, with proper rules in place, can be a useful bridge towards that kind of environment in which gas and even the oil that comes from shale can be a sort of bridge technology that is better than some of the coal and some of the other kind of stuff, and a way station there for -- to the longer-term economy based on sort of renewables or hydrogen or other kinds of things?

KRUPP: I don't really think of it as a bridge, Gideon. I think of it more as an exit ramp. It's an exit ramp off of coal. It can help us get off of coal faster in the United States.

It can help us get off of coal, I hope, in China, which is right now over 70 percent of their electricity is generated by coal. If they were to have shale resources accessible, it would be a good exit ramp.

But I do believe, you know, to solve the climate problem we have to have zero carbon sources of energy. Geo-thermal, wind, solar, massive energy efficiency demand shifts, a newly modernized grid.

Having said that, as natural gas is serving as an exit ramp from coal, I think it can also serve to help integrate the intermittent resources like solar and wind into higher penetration in the grid because natural gas plants fire up much more quickly than coal plants.

And finally, I would say that right now we still in this country have vast quantities of under-utilized existing natural gas generating capacity. And so, there's a lot of room in a lot of sections of this country, without investing more money in a fossil fuel infrastructure, just to fire up existing natural gas plants more to take out coal and to back up renewables, as well.

ROSE: Got it. We have a great crowd on the call and I wanted to get to them and their questions and get them into the discussion.

But let me just close with one more question for you. Whether or not it's related, I'm not sure, you tell me. But the entire giant fight over Keystone. Does this relate to shale and fracking and the broader natural gas revolution, and the alternative sources revolution? Or is it something entirely different?

And do any of the same kinds of ways of thinking that you're talking about when it comes to fracking and shale, do those ways of thinking have applications to how we think about Keystone, how to maybe solve that kind of problem?

KRUPP: Well, I think the goal here that we all have to recognize is over the next few decades we're going to have to get to a whole lot more clean energy and a whole lot less fossil fuel. That's the only way we're going to solve the climate problem.

And so Keystone is a wonderful symbol of a very carbon-intensive fuel, extremely carbon-intensive way to make gasoline and other fossil fuel products. Natural gas is much less carbon-intensive, if we control the methane leaks. And so, therefore, it's -- it can serve the goal of getting us to clean energy in a -- in a way, conserve as that exit ramp off coal in a way that I don't see any rationale for how Keystone and the tar sands could do that.

Last point...

ROSE: So it's possible to be pro-shale and fracking and anti-Keystone because they're sort of separate issues entirely?

KRUPP: Well, I think it's possible to be anti-Keystone and not pro-shale, but saying that shale gas needs to be cleaned up, which is what the EDF's position is.

You know, we're taking 28 trillion cubic feet of natural gas out of the United States' ground every year. Two-thirds of it, Gideon, is not used to generate electricity. It's used for heating and cooling spaces or for industrial uses.

And as we take that out of the ground, it's important we protect the neighbors who live around these installations.

And as we take it out of the ground and get it to its final use, it's critical from a climate perspective that we reduce these methane leaks because at even very small leaks, one or two or three percent of the product, natural gas methane, if just three percent of that product leaks from the well or from the long-distance transportation pipes or from the smaller distribution pipes or back upstream in the gathering or processing in the natural gas, just three percent leaking is currently a huge part of America's natural gas -- of America's climate footprint on the world's atmosphere.

I -- I should rush here to say that we don't know how much is leaking, but we do know there's a lot of opportunities to minimize leaks and with the cooperation of more than 100 scientists, universities, companies, we are working to quantify where those opportunities are as well as to get a better fix on how much is leaking.

ROSE: OK. So Fred, you said enough to please and piss off everybody on all sides of this. Let's get our -- our experts and people on the call in on the question.

So we're going to turn it over now to our moderator to take some questions.

OPERATOR: At this time, we will open the floor for questions. If you would like to ask a question, please press the star key followed by the one key on your touchtone phone now.

Questions will be taken in the order in which they are received.

If at any time you would like to remove yourself from the questioning queue, just press star, two.

Please limit your questions to one at a time.

Again, to ask a question, please press star one.

And our first question comes from Kathy Kowalski and she is a freelance journalist.

KOWALSKI: Thank you.

My -- I guess my first question is how long do you expect the exit ramp to be? Is it like those very short ramps on the parkways on Long Island, or a mile or two like some of the ones in Indiana? And -- in terms of time comparisons.

And what sorts of water regulation would you want to see in the meantime?

KRUPP: Great question. Well, it's not one of those exit ramps that you drive off of in 30 seconds, I can say that.

But we absolutely need to be working while we're trying to clean up natural gas and reduce the methane leaks from a greenhouse perspective. We need to be pedal to the metal on doing everything we can to accelerate the deployment of solar and wind and other truly clean sources of energy.

And it will take -- you know, I expect it will take a decade or more before we've done everything we can and reached maximum penetration of those sources.

The -- I would say there's lots of things we know how to do on water. The Environmental Defense Fund has been working for several years with Southwestern Energy on a model set of regulations to protect the ground water.

And those regulations have been the basis for now several states updating their regulations. Texas, most recently, dramatically improved the quality of their water regulations to make sure that these facilities -- that the wells themselves, the well shafts have integrity. They're tested and they -- they don't leak.

In addition to the ground water question, wells leaking, there need to be careful tracking of everything that comes out of the well, all the produced water. Where does it go? It should not be going in open ponds. There should not be places where birds can land in it.

It needs to be treated effectively and disposed properly. The best thing to do with it is to use it in another well. And we need to be very careful as to where we get the water. We can't be depleting aquifers where water is scarce, and we can't be taking water out of streams where -- where we're endangering the critters in those streams.

So we've got to be -- there's a bunch of water issues that are really important. And the -- I think the Department of Energy Commission that I served on, when President Obama was looking for a safe path to develop shale, has a more comprehensive listing of the protections that are needed, not only for the water but the other issues associated with fracking, as well.

ROSE: Fred, let me take a two-finger (ph) here. It's Gideon again.

We actually looked at a lot of different sectors, parts of the energy sector, for the issue, the energy package in our May/June issue. And we actually did not hear a lot of encouraging interesting things about renewables, which is why there isn't the piece that's really interesting and exciting on renewables in the issue.

On the other hand, there are pieces both on the nuclear industry and its potential and electric cars and the battle for powering transportation, both of which seem like they're more -- they hold more potential for getting past fossil fuels than -- than the kind of renewables you were just talking about.

What do you think about either nuclear or electric transportation?

KRUPP: Well, look, Gideon, here's the plain reality, is we're in a hell of a fix, we denizens of this earth we inhabit. And we've got to have an open mind about how we generate electricity.

So from the standpoint of EDF, if -- if we can come up with nuclear technology that's safe, a way to dispose of the waste, not only scientifically but politically, and do it at a cost that's affordable, that doesn't drive electric rates sky-high, which would be unacceptable, we've got an open mind.

We have not seen that technology commercially available yet. The proposals to build plants so far involve substantial government subsidies.

In terms of electric cars, I think there is promise there. We're -- I don't think it's the role of governmental or environmental groups to be picking winners and losers. But I think the progress that particularly Tesla has made is encouraging. The cost of these offerings has come way down so just plain folks can afford them.

But I think both of those developments are things we should be watching and rooting for with interest.

At the same time, the work of Bloomberg New Energy Finance has taught me that the cost of solar has come way, way down. And I find that very exciting. And the opportunities to modernize the grid, to move load to nighttime where we're grounding wind power in Texas, where we don't have uses for some of the nuclear power that we're generating at night.

There are opportunities beyond just nuclear and electric car, as well.

ROSE: Got it. OK. Let's go to our crowd.

OPERATOR: Our next question comes from Brendan Gibbons with the Times-Tribune.

GIBBONS: Hi, thank you. I would ask, how do you identify companies that are willing partners in your efforts to reduce methane emissions, and maybe carbon emissions in general?

How do you find the Dukes and the Anadarkos and the Nobel Energies (ph)? And what separates them from those that are less willing to adopt these kind of common sense measures that would save them money and protect the environment?

KRUPP: Well, that's a really good question. Thank you.

I guess most recently the experience has been in Colorado and just a shout-out for Governor Hickenlooper's leadership there. The governor decided that Colorado would have no tolerance for methane emissions. And he began announcing that a year and a half ago.

And then he asked the three largest drillers in the state, Anadarko, Encana, and Noble Energy, to come sit in a room with the Environmental Defense Fund. And so last September, we got in a room, we spent three months talking to each other.

And by November, we had a proposal that we worked out with the governor's staff, as well. And the governor proposed it. It was publicly vetted, criticized, praised, lots of hearings in Colorado. And ultimately the relevant commission approved it by an 8 to 1 vote the last few days in February.

I think what separates those companies out is that they want an industry that's sustainable and part of being sustainable is not only in the environmental sense but also supportable by the public.

And instead of just denying that the problems exist and stiff-arming the public, these were companies that said, you know what, we've got a problem with these air emissions, not only methane, but the (INAUDIBLE) organics that we're beginning to increase the brown cloud that Denver had done such a good job in decreasing the brown cloud. Here it was growing again.

These companies decided it was in their self-interest.

I guess, in my view, there are other companies who take a view that, hey, we can just keep doing things the way we are doing them because we've got the political might to win today and tomorrow.

And I think this is changing, but I think that's the key difference -- companies that are willing to look beyond the fact that, yeah, maybe they can win today or tomorrow, but in the long-run, if you operate less than a good citizen, if you don't have natural gas being as clean as it can be, if you don't protect the neighbors, if you don't make this a fuel that's better than coal, a lot better than coal from a greenhouse gas perspective, then ultimately public support will vanish.

And the fact of the matter is, according to the latest Pew (ph) Poll, 49 percent of Americans now oppose expansion of fracking, 44 percent in favor of it. So the license to operate for the oil and gas companies, you can see that license eroding over time.

And that's why I hope more companies will follow the path of the three in Colorado or the companies like Shell or Chevron and EQT in Pittsburgh that have formed the Center for Sustainable Shale Development, which is a different sort of thing. It's a voluntary thing. But with strict third-party auditors inspecting the company on 16 different criteria.

ROSE: Fred, this is Gideon again. Let me ask you about your kind of role as sort of a middleman between some of the environmental concerns and some of the industry and governmental concerns.

There are a wide array of environmental NGOs. And in some respects, you have a position that's more willing to work with government and industry than some of the colleagues of yours in the movement.

Do -- how do the people in industry and government sort of see you? Do they see you as sort of someone who can be worked with? Or are you like a good cop with the bad cops drive the government or drive the industry into sort of working with the good cop to come up with at least something to forestall a complete or total ban?

How do you operate sort of between industry and the broader environmental movement?

KRUPP: Well, Gideon, I would say this. First of all, if you want to know how other people view us, you're going to have to ask them. You've got the wrong guest for that. So I'm not going to go there.

I can tell you, from my vantage point, I don't see the EDF as a middleman. I see us as working for very ambitious environmental goals. And I don't think you'll find a space between most of the environmental groups on the future we need to create.

I do us as ambitious pragmatists, that we're looking to get things done in the world that we live in, and to move as fast as we can, but recognize the realities of the world that we move in, too.

I guess maybe -- the previous caller mentioned Duke Energy. And when Jim Rogers was the CEO of Duke Energy, we were in litigation with Duke Energy, EDF was, litigation that they hadn't complied with the Clean Air Act.

While that litigation was pending, I approached him and Jeff Immelt also approached him to be part of something that eventually became called the U.S. CAP, U.S. Climate Action Partnership. Jim joined that; Duke Energy was a real leader in that effort.

They along with companies in the oil and automotive industry and aluminum industry all raised their hands, said to the government, "Regulate us. Regulate our carbon emissions." That was pretty rare sort of leadership.

But as we were having those conversations at U.S. CAP, literally one day when we were sitting at the table, word came in on our cell phones simultaneously that the Supreme Court had decided our litigation. And in fact, it was EDF versus Duke Energy, and EDF, the Supreme Court ruled in our favor, 9 to 0.

So we were definitely contesting the legality of what Duke had done. Ultimately, we prevailed. I suppose if we hadn't, I wouldn't be telling the story. But at the same time, we were mature adults willing to work with each other where we thought we could find common ground. And that's the approach EDF's taking.

We're pressing these companies where that's what has to be done, but we're working with them where there's a possibility of them standing up and raising their hands and saying, "Regulate us on carbon."

ROSE: Got it. OK, so one more question, actually for the audience here. We have a lot of people from trade media on this call. I'm curious, how do you think these issues have been covered, the whole question of fracking, the whole question of shale, the question of the various competing energy and environmental and other kinds of concerns?

Do you think that the media -- from your perspective, Fred -- do you think that the media coverage in the general and in the trade media has been adequate or should it be different in some way? What would you like to see?

KRUPP: Well, I think until very recently the media's coverage of global warming has focused on carbon dioxide. And I have to say, my focus has been on carbon dioxide cause it is the big, long-term pollutant that we absolutely have to solve.

I think what the media didn't recognize, and I'm not sure, to be honest, that I recognized until two or three years ago, is that so much of our -- the climate change we're experiencing today is due to these short-lived climate pollutants like methane. In fact, methane being by far the most important greenhouse gas that causes so much damage short-term.

So I think the significance when Colorado passed those rules and reduced volatile (ph) organics by 100,000 tons as much as taking all the cars and trucks off the road annually, that's how much annual volatile (ph) organics will be reduced, that was covered in the press.

And it got some attention that Colorado was the first state, the first place in America that was directly regulating methane, as well, and another 100,000 tons of methane will be reduced.

But the significance of these short-lived climate pollutants and the fact that we could make such a big dent in America's global warming footprint, I don't think there's been feature stories or stories in the "Science Times" about this that I've seen. And I think it's -- it's a big deal.

In the -- in the case of the natural gas industry, we're now paying -- those of us who have natural gas in their homes -- I do. I heat with natural gas. It's $4 and change for 1,000 cubic feet of natural gas.

EDF commissioned a study showing that for just one penny more, the emissions of methane, which is a third of America's footprint on global warming for the next 20 years, for one penny more -- in other words, instead of paying $4.30, for $4.31, the industry could reduce methane emissions in North America by 40 percent. (INAUDIBLE) receive no coverage.

Everybody things climate change is so insolvable. And yet here we have this incredibly low-hanging fruit, so affordable to do it, and yet the media hasn't really yet told that story.

ROSE: Excellent. OK. Let's prompt.

OPERATOR: Again, if you'd like to ask a question, please press the star key, followed by the one key.

There are currently no questions in the queue at this time.

ROSE: OK. So I'm going to give one more prompt. Fred, we're going to end this after 45 minutes, I think, because everyone's very busy. It's the middle of the day. But I think this has been a really valuable discussion. I think it's a great package in FA that I encourage you all to read carefully in all its dimensions.

And I was really pleased to see the op-ed that you and Mayor Bloomberg were able to do, to bring some of these things together.

And in general, I mean, look, since we're not going to deindustrialize, and since we're not going to destroy the planet, at the end of the day, we're going to find some kind of middle ground in which we can make industry and growth and the environment all work together.

And I think that the challenge is on us all to find ways of doing so in a pragmatic and sensible way, and hopefully sooner rather than later.

So let's throw it open for one last round of questions or any final comments from you before wrapping it up.

OPERATOR: OK. We do have one final question. It's from Brendan Gibbons at the Times-Tribune.

GIBBONS: Sorry to ask again after that nice wrap-up, but I would be curious what you think about compressed natural gas and liquefied natural gas as a vehicle fuel. Would that -- that seems like something that would lengthen the exit ramp in a lot of ways.

And I do wonder if that's a direction we should be going. We hear from economists a lot that those kinds of things, especially -- also with LNG exports, would get some price stabilization to dry (ph) gas.

What's EDF's take on that?

KRUPP: Well, I think there's a wonderful piece in the proceedings in National Academy of Sciences by a team of scientists. The lead author is Ramon Alvarez, on our staff. It was a couple of years ago.

And it compares from a climate change standpoint using compressed natural gas or liquefied natural gas with gasoline. And basically the bottom line is this -- while to be better than coal, the leak -- for the next 20 years in terms of climate impact, the leak rate of -- from the entire natural gas system has to be less than around 2.5 percent, to be better than gasoline, gasoline and diesel are much less carbon-intensive than coal. And the engines are pretty efficient.

So you'd have to get the leak rate down to under one percent.

So what my belief is, before we move a bunch of vehicles to natural gas, either compressed or liquefied, there's got to be a lot more work done. I've got to see a lot more evidence that governments are willing to regulate and reduce the leak rate.

And I think that would be a prerequisite to making it at all safe for the climate to consider massive switches of the car fleet.

The last thing I would say, Gideon, is, in addition to thanking you for publishing the piece in "Foreign Affairs." I've gotten just an outpouring of compliments reading it. I appreciate being in part of the package and part of your magazine.

Is -- I'm also very thankful and I think it's very important that Mike Bloomberg has been not only supporting this work on natural gas and making natural gas cleaner, but was the co-author of the "New York Times" piece. Because he is a leader, he is a problem-solver, he is a pragmatist.

And having me take this position is one thing, but having one of America's great figures in both the business community and the political community take this pragmatic position on natural gas, wanting to clean it up, needing -- recognizing it needs to be cleaned up, I think that's a really important moment for the country.

I just wanted to acknowledge how important that is and thank Mayor Bloomberg for doing that.

ROSE: Well, that's great. Thank all of you. Thank you, Fred. And we look forward to continuing the discussions in the pages of "Foreign Affairs," in the pixels of our website and other digital operations, and on future conference calls and events.

Thanks, all.

OPERATOR: Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect.


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