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QUEST MEANS BUSINESS
Transcript from Key Impeachment Witness Released; President Trump Ordered to Pay $2 Million to Nonprofits; Funerals Begin for American Mormon Family Murdered in Mexico; U.S. House Releases New Transcript From Impeachment Probe; Beijing And Washington Are Now Signaling They Are Almost Ready To Start Rolling Back The Tariffs; Emmanuel Macron Issues A Wakeup Call For Europe Claiming It Needs To Rethink Its Political And Economic Future. Aired 3-4p ET
Aired November 7, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST, QUEST MEANS BUSINESS: An hour away from the closing bell and just look at all green, maybe off the top of the
day, but still a strong robust session on Wall Street. Obviously, it's a record. It's just a sintered off a record last night -- 27,700 let's see
how that holds between now and the close. The market as you look at them and the reasons why.
Investors are cheering a potential turning point in the trade wall. Beijing and Washington are now signaling they are almost ready to start
rolling back the tariffs -- almost.
Emmanuel Macron issues a wakeup call for Europe claiming it needs to rethink its political and economic future.
And Germany's Lufthansa cancels 1,300 flights. Cabin crew strikes has left the airline grounded.
We are live tonight from the world's financial capital, New York City. What a difference a day makes. Virtually, the weather is dreadful today,
but it is Thursday, November 7th. I am Richard Quest, and I mean business.
Good evening we have a busy hour together, and as we begin, allow me to give you some news just in. The U.S. House of Representatives has released
new transcripts of testimony from their depositions of their impeachment probe.
Now, this is from the Deputy Assistant Secretary for State for European and Eurasian Affairs, George Kent. He has testified on October the 15th and we
will bring you any news that we get once we've plowed through these transcripts and seeing what Mr. Kent told the Committee members.
Tonight, though, on the business agenda, talk of a trade war detente in Washington and it has lifted Wall Street dramatically. We are seeing
record highs across the board in the U.S. If you look, you've got a high on the Dow, high on the S&P, high on the NASDAQ, as it shows on the screen.
Strong gains, and they are holding.
China says talks about Part 1 of a trade deal include rolling back some existing tariffs. These tariffs have escalated for nearly two years; all
the while, a fall in the side of the global economy with a risk of recession.
Jeremy Diamond is at the White House. Jeremy, is there any sort of an agreement by the White House that if Phase 1 is signed, then either the
future tariffs will not be increased, and existing tariffs might be rolled back?
JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: That appears to be the case, Richard. A source is confirming to us now some of those reports that we
saw emerging this morning from the Chinese side, which is that the U.S. is willing indeed, to start rolling back some of those tariffs that have been
imposed in phases, and also some of this pertains to those tariffs that have not yet been instituted.
We were expecting some tariffs to come down the pike in mid-December, Richard, as you know. Look, the details of this have not yet been
finalized. So I don't think we want to get too far ahead of ourselves.
Particularly, you know, we know that the Chinese like to kind of hype up expectations as it relates to these trade talks and suggest that the U.S.
is making more concessions than they are.
That being said, we have confirmed that the U.S. is in agreement on rolling back some of the terrorists in phases. We'll see how much of that actually
happens during this Phase 1 agreement.
We're also still looking to see where exactly this Phase 1 trade deal will be signed between President Trump and Chinese President Xi Jinping. We
believe, you know, there was some discussion of it potentially happening in the U.S. and now it appears that it's more likely to happen in Europe, but
a location has not yet been set, Richard, and as you know, we still don't have that actual deal finalized.
QUEST: You see that's -- but, Jeremey, that's the point. There is no deal yet, which begs the issue that they're -- obviously, everybody thinks there
will be a deal that is in form and processed in substance willing and ready to be signed.
DIAMOND: Right. That's true. And we know that we've seen this movie before, right, Richard? Where we have seen these two parties come so very
close to agreements in the past. The most recent occasion, of course, was when the Chinese actually pulled back, we were told from several different
components of this agreement.
That being said, it does seem like all of the factors are in place for this Phase 1 trade agreement to be signed. You know, we've seen President Trump
actually talk about this in public, say that he wants to sign this Phase 1 trade, say that there was this agreement in principle, so we're going to
have to wait and see if it actually comes together.
But it seems like the Chinese wants it, President Trump wants it. Just the details need to be finished up.
QUEST: Jeremy Diamond in the White House. Thank you. Paul La Monica is here to give me the business side of all of this. The day is strong. I
mean, the market is up and it's resilient. It is holding its gains. Let's break down who is winning and why? Who should we look for here?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, it is a pretty broad based rally as that chart shows, but the one that I really hone in on is Apple.
Apple being up more than one percent. Obviously, it is a company that would really benefit from having these tariffs rolled back and not having
to worry about any retaliation in China, which is increasingly an important market for them and they bring obviously all those iPhones that are made
overseas, back here to the U.S.
Toy makers, not part of the Dow, but I think Hasbro and Mattel could be good for them if you wind up having some relief and they're able to sell
toys that are made in China here over not having to worry about tariffs right before the holidays.
QUEST: And our classics of course, Dow Chemical companies; similarly, Caterpillar, Boeing and even oil companies as well. All the usual
But I wonder, this idea that they will roll back tariffs on the back of a signing of Phase 1 when we don't know that real details of Phase 1 or how
much of it is smoke and mirrors?
LA MONICA: Yes, I think, we, as you pointed out with Jeremy, obviously, we have had several occasions where we thought we were getting closer to a
deal, and then the Trump administration or Trump himself decided that no, the Chinese weren't playing fair.
China has many times come back and said, no, they want more from the U.S. So until a deal is actually on paper, and we have Trump and Xi in the same
room signing it, I think there -- it is right to be skeptical of whether or not this is actually going to take place.
QUEST: Is the market setting itself up for a fall in the sense that you can cobble together -- you could probably cobble together something that is
sustainable, but perhaps the harder work comes in Phase 2 and Phase 3, which might never come.
LA MONICA: Yes, I think there's a couple of things. One, we may never get those next phases. Two, even if we do get a trade deal, China's economy is
already slowing that's hurting Europe that eventually could hurt the U.S. as well. And then there's the possibility that investors are way too
You look at the CNN Business Fear and Greed Index, it's at extreme greed levels.
LA MONICA: Because we've had the markets at all-time highs, volatility has come down, the VIX has really come down. You have strong demand for stocks
right now. So that really shows that investors believe a deal is going to happen.
QUEST: Or --
LA MONICA: And if it doesn't, then it could be look out below go.
QUEST: That's the point.
LA MONICA: Yes.
QUEST: Sorry. Now, we can do it.
LA MONICA: There we go.
QUEST: Look out below.
LA MONICA: Yes, sir.
QUEST: Timber. We're not saying, we're just saying. All right, Angela Merkel is rejecting Emmanuel Macron's claim that Europe is experiencing, in
his word, brain death of NATO.
The French President made a comment to "The Economist." President Macron said Europe can no longer rely on the U.S. to defend NATO allies, and he
doesn't know if NATO's collective defense stipulation still stands. He also says there's a lack of cohesion in Europe when it comes to economic
Melissa Bell is in Paris. These are fairly stunning words from Emmanuel Macron and although Merkel has rejected them, I suspect the fact he said
them, particularly that Europe can no longer rely on the Article 4 Common Defense.
MELISSA BELL, CNN PARIS CORRESPONDENT: That's right, Richard. I mean, it was what Angela Merkel described as fairly drastic view of NATO and of the
stage of the world. It is perhaps no surprise that this is the conclusion that Emmanuel Macron has come to.
We knew that he was a champion of liberalism, of universalism of the European project. And frankly, this is a fairly bleak warning not only
about the United States disappearing as a sort of steadfast ally and backer of NATO and lender and this country of last resort, but also that all of
these other forces have been growing, not least within Turkey, of course inside NATO and that is extremely alarming to him.
So a very bleak warning and a wakeup call, exactly what you called it, Richard. Emmanuel Macron trying to get his European neighbors to sit up
and listen because he has been having trouble finding the kind of cohesion in Europe that he wants.
QUEST: Yes, but what is it that he wants? We know Macron wants to be the heir apparent as the leader of Europe in the sense that the de facto senior
leader of the Council once Merkel goes in a couple of years' time.
BELL: That's right. And indeed that is what he aspires to be. Bear in mind that it was on that very strongly pro-European platform that he
presented himself as a candidate in the French election two and a half years ago. He has championed it ever since. He has been the one, almost
impatient to see the United Kingdom go and get Brexit over and done with.
What does he want, Richard? He wants a small, fairly tightened European Union that moves ahead with federalism. On that, he is pretty clear and in
fact, one of the ways in which he has recently ruffled European feathers is by blocking the accession of some of the Balkan countries.
He is trying to drive Europe in a particularly way and it is not making him that popular within Europe -- Richard.
QUEST: Right. Now, just remind us, as is important when Macron has to go to the polls next. And if there is an election tomorrow, how would he
BELL: That's an excellent question. We have a bit of time before that comes because it was 2017 his election. There are five year terms in
France now, and he has been facing so much pressure from abroad, although internationally, he has been seen as champion of a particular vision of the
world and indeed looked to with a certain sense of hope by many.
Inside France, as you know, Richard, he has been having these problems. The yellow vest will mark their one year anniversary next weekend, and I
suspect that where he to go to the polls, he would find it a bit of a challenge, particularly as he is trying to push through right now this very
unpopular pension reform.
So an awful lot of trouble at home, but a bit of time before he has to go and get anyone's vote.
QUEST: Thank you. Melissa Bell is in Paris. Lufthansa, the German airlines has been forced to cancel 1,300 flights as cabin crew kicked off a
massive 48-hour walk out on Thursday.
The strike has hit 20 percent of the German carrier's flights impacting 180,000 passengers. The Workers Union says it is necessary amid deadlock
talks with Lufthansa bosses over pay and conditions. The Union's Vice President is warning further strikes could come at any time.
Daniel Roeska is the Senior Research Analyst at Sanford C. Bernstein. He joins me now. Look, Lufthansa on strike, then we all of course had BA
pilots on strike. Why Lufthansa? What are they complaining about?
DANIEL ROESKA, SENIOR RESEARCH ANALYST, SANFORD C. BERNSTEIN: Well, I think what's important to understand here is that actually the company is
trying to switch unions on the go. They've been in deadlock with the current union, UFO for about 12 months now and are trying to bring in a
different German union called Verdi, and that is of course, something the UFO Union is fundamentally opposed against.
Lufthansa has tried to go the court route, but definitely the Union has showed that it's got some teeth.
QUEST: And the ability for this Union to continue strike is hurting Lufthansa, which frankly is only in the last year or two sort of really
turned itself around with its latest restructuring and managed to present anything like a coherent plan, I mean, I'm thinking of the Germanwings this
and then it wasn't and then this was going and then long haul low cost came and went.
But this is the last thing that Carsten Spohr needs.
ROESKA: Yes, I think what they also need is really a Union on the other side of the bargaining table that is reliable and there has been a lot of
upheaval at this Union. That is what is concerning Lufthansa management at that point, that they need a bargaining partner that is actually able to
strike a deal.
Now, that's what Lufthansa has been contesting here, but clearly the Union believes it should be the one Lufthansa is negotiating with.
QUEST: Lufthansa's profitability as an airline in the last year has come back really quite strongly. The pieces of the jigsaw I was outlining do
seem to be creating a coherent picture and a strong performance. How long can that continue?
ROESKA: Well, I think what you see in the German market is after the Air Berlin airline, a large secondary player in Germany went bust, a lot of
capacity piled into Germany and actually oversubscribed and left the market and that created really a glut of capacity in 2019, which has hurt
Lufthansa. That is reversing right now, at the same time when fuel costs are lower for the airline.
And so that's actually why probably the fortunes for Lufthansa into winter and next year look quite positive.
QUEST: If you look at what they did with Germanwings and then Eurowings at Lufthansa and you consider the turnaround that they're trying to do with
Brussels, you add in the issues of profitability say at Austrian. How is Carsten doing?
ROESKA: I think he is doing better because I think they finally have found an answer, at least, in their view to the issues, which is one, be it a
tougher restructuring on the core network within Eurowings, and then they're actually ceding control for some of the flights to the other
So long haul flights within Eurowings will actually be controlled by the network airlines, and they're also pushing parts out to Austrian. So that
seems to be his current answers and today on the earnings call when we talked to him, he sounded very confident.
QUEST: And finally briefly, if you look at the three big groups, network carrier groups, IAG and Lufthansa and Air France KLM, which is the
strongest bearing in mind of course this week, Willie Walsh bought Air Europa for nearly a billion, which of the three do you like the best?
ROESKA: We still like IAG the best. It's definitely the most shareholder from the management team. Lufthansa a second and Air France probably a
distant third at this point.
QUEST: Good to see you, Daniel. We must talk more about this. Thank you.
ROESKA: Richard, thanks. See you soon.
QUEST: Thank you. Now as QUEST MEANS BUSINESS continues, the race to lead the world in 5G continues, this time T-Mobile is rolling out a plan across
the U.S. The President of T-Mobile is with me, next.
QUEST: Welcome back. It's QUEST MEANS BUSINESS from New York. Elizabeth Warren is taking aim at T-Mobile and Sprint. A few moments ago, the 2020
U.S. presidential candidates said a multibillion dollar merger between the two would hurt competition, slash jobs and reduce wages.
Her comments come after U.S. regulators signed off on the takeover earlier this week. And yet, amid it all, T-Mobile is working to roll out its 5G
network on December the 6th.
The President, Mike Sievert is with me. Good to see you, always.
MIKE SIEVERT, PRESIDENT, T-MOBILE: Good to see you, sir.
QUEST: So let's see Elizabeth Warren's comments. I mean, you've answered them a million times, but she still comes forward and says this. The
F.C.C. has clearly ruled in your favor. But there are lawsuits outstanding.
SIEVERT: They have ruled in our favor. In fact, we received the final approval from the F.C.C. just this past week. Over the summer, we entered
into it consent decree with the Department of Justice. So all the Federal level stuff is done, but we do face a trial with a number of Attorneys
General at the state level who are challenging the merger and you know, obviously that's the final hurdle.
QUEST: Right. How worrying or damaging is it when somebody who could become extremely powerful -- Elizabeth Warren -- well, she is powerful, but
you know, could be even more powerful does say that your merger reduces competition, slashes jobs and wages?
SIEVERT: Well, here's the thing we've learned, people who have questioned the merger, the things that they're questioning, they want more
competition, they want lower prices, they want more innovation in this industry. So do we.
And so a lot of times what happens is these are well intentioned questions, but the information and the facts are on our side. And so our job is to
make sure that people like the Senator have the facts. This is going to result in more jobs, lower prices, more innovation, better network for
QUEST: It's highly likely now that this will go through once this cold case is out of the way and today you've been announcing about 5G, but the
interesting thing about 5G, of course, earlier this week we saw China's first 5G network rollout. Is this competition? Is global competition
SIEVERT: Of course it is. And that's why this merger is so important because without it, the U.S. won't have a player with the kind of
comprehensive 5G to really be a global competitor.
This network that we will create, when we put T-Mobile and Sprint together, it's like nothing else that Americans will have anytime in the next several
years, and that's important because the digital economy depends on us having a great 5G network in this country.
QUEST: But does it matter who gets there first versus say the Chinese? The Germans or the Americans? Does it matter?
SIEVERT: Of course. Look at the 4G race. The US had 4G networks before the rest of the world and U.S. companies wound up dominating the digital
economy over the last decade, Facebook and Apple became the world's most valuable companies, Google and Amazon.
These are companies that seized mobile technology in the U.S. Uber was invented here, not in China, because mobile technology was deployed here
QUEST: So when the U.S. government decides, for example, to restrict or put on a blacklist Huawei, is that actually helpful to U.S. industry? U.S.
telecoms industry or not?
SIEVERT: I'm not an expert on that. Our technology at T-Mobile is based on technology that we partner with Nokia and Ericsson by and large.
SIEVERT: So it doesn't affect us. But, you know, for us, it's very important that what we're able to do is invest big, big money in that
technology over the next few years and that's what the merger is all about.
QUEST: Okay, so you've got the merger and you've got some new plans that you've introduced today. And they all rely -- they're all designed to show
SIEVERT: That's right, and they're designed to show what the particular 5G network of this merger can create.
QUEST: But what is it? I mean, what is it --
SIEVERT: It's got more G.
QUEST: No, no. But what has it got? Look, I've read numerous descriptions of 5G, about how it is going to let me download 15 gigabytes
quickly to whatever in seconds rather than minutes. What is it going to do?
SIEVERT: Well, it a great question because this has been flubbed by the major carriers so much this year. Verizon and AT&T have rushed out
technology that wasn't ready, and they tried to say that 4G advanced is 5G. AT&T calls it 5GE. It's crazy.
What we're doing on December 6th is we're finally launching the real 5G and we're not going to do it in parts of 15 cities like Verizon. When we turn
that switch on December 6th, it's 200 million people all in one day.
QUEST: It is brutal this industry in this country. I mean, I'm obliged to now say, since you've mentioned AT&T, parent company of this network, as
I'm obliged, I would of course make clear. But it is brutal, isn't it?
SIEVERT: Well, it's a very competitive industry, and it's only getting more competitive.
SIEVERT: And that's our goal. Our goal in bringing this company together with this merger is to make this industry even more competitive, to take
share from AT&T and Verizon.
And I'll tell you what, the news -- the news we put out today, this was one of the biggest news days in our history. It was just the rollout of 5G on
December 6th. It was a set of unprecedented initiatives around what we can do with this network with the new company like providing free service for
the next decade for every single first responder in this country.
QUEST: Good to see you, sir.
SIEVERT: Great to see you.
QUEST: Thank you very much indeed. Thank you. That's a look at our job. Thank you. All right.
Two former Twitter employees are accused of spying on behalf of Saudi Arabia. According to the U.S. Justice Department, the two men, one Saudi
national and one a U.S. citizen used their access to target known critics of the Saudi Royal family.
Apparently a third man acted as a go between and paid the other two hundreds of thousands of dollars. Now, the Saudi national in the case, was
a web engineer accused of accessing data of over 6,000 Twitter users before he left in 2015. This is what he actually did. Okay.
First of all, he was able to not use the equipment as it was supposed to be used. He was able to collect IP addresses here and take them into the
phones. He was able to get browser information and take them. He was able to take phone numbers and put them in the phone. He was able to take e-
mail addresses and put them in the phone.
Now if you -- there we go -- all working beautifully now. If you do all of that, if you get all of that into the phone, the information that the Saudi
government could then use to target its critics, and that was the problem. It was the ability of Saudi government to get hold of other people's
Brian Fung is our tech reporter in Washington and joins me now. There is a lot of dispute about this. But how significant was the case or is the
BRIAN FUNG, CNN TECHNOLOGY REPORTER: Yes, this is a very, very big deal. This is the first time that the United States government has accused anyone
of spying for Saudi Arabia on U.S. soil. In this case, we had two men, one of whom is already in custody, the other one is believed to be at large and
possibly in Saudi Arabia, accessing information that could theoretically be used to go after Saudi dissidents.
FUNG: And of course, it's very difficult to talk about this without of course, talking about the Saudi government's involvement in the murder of
"Washington Post" journalist, Jamal Khashoggi earlier.
QUEST: Right. Okay. But, Brian, when you start talking about the Saudi government being involved with spying to get this sort of information,
Saudi, of course, is an ally of the United States. The way in which the President has remained on good terms and feted the Crown Prince, it raises
the question, if the Saudi government had engineered such as spying on operation, what does the U.S. government say about it?
FUNG: Well, you have a number of lawmakers already weighing in on this. Senator Mark Warner, who is the top Democrat on the Senate Intelligence
Committee, saying this shows how tech companies need to impose more safeguards on the data that they collect and to collect less data overall.
He said, the more information a private company holds, the more attractive a target it will be to foreign intelligence agencies.
FUNG: Now you also have, you know, a lot of security experts in the tech industry themselves also saying this is a potential problem, and you're
going to see many more cases of this moving forward.
QUEST: Brian, thank you very much. Good to see you. Thank you very much. Brian Fung joining me. Shorter program today. That is QUEST MEANS
BUSINESS. The markets look for you. There we are. We are going to be our record on the Dow. We are going to be a record on the Dow. We're going to
be a record on the NASDAQ and we're going to have a record on the S&P 500, so records across -- there they are over there. As always, whatever you're
up to in the hours ahead, I hope it is profitable.
I'll have the headlines in a moment.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, this is CNN news now. House impeachment investigators have released more
testimony from a U.S. State Department official who says he raised red flags about President Trump's personal attorney and was told to lie low.
Deputy assistant Secretary of State George Kent told lawmakers Rudy Giuliani's efforts undermined U.S. foreign policy in Ukraine where Giuliani
was pushing for investigations into Mr. Trump's political rivals.
A New York State Court has ordered President Trump to donate $2 million to charity. The order comes as part of a settlement in a lawsuit that accuses
the now defunct Trump Foundation of misusing funds for Trump's personal and political benefit.
The first funerals for the victims of the horrific massacre in northern Mexico are being held today. Nine American women and children, all members
of an extended Mormon family were killed in a gruesome attack on Monday. Investigators are still trying to determine who was behind the carnage.
Officials suspect at least one drug cartel was involved.
The French President Emmanuel Macron says Europe can no longer rely on the United States. In a bluntly word in an interview with "The Economist",
Macron blasted the U.S. decision to pull troops out of Syria without consulting NATO allies. He called the lack of coordination in his words
the brain death of NATO. You're up to date with CNN news now, the "GLOBAL ENERGY CHALLENGE" is next. This is CNN.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR (voice-over): The United States consumes more energy in 2018 than ever before, 80 percent of it was
generated by fossil fuels. As the world urgently debates the global energy transition, what happens in America impacts the globe. For this nation of
330 million people, so much is at stake. The picture complex. How to allow the economy to thrive, to raise and maintain living standards for all
citizens, and uphold the responsibility to the environment.
My journey begins in Midland, Texas, population, less than 150,000. What makes it special is all underground. There's an abundance of shale, oil
and gas across America, 8 million barrels produced each day. The premium basin straddling New Mexico and Texas is the country's most productive
site. Midland is at the epicenter.
UNIDENTIFIED MALE: OK, I think the best place to start would be right here, it's a pump for our oil.
DEFTERIOS: I'm taken on a tour of the pioneer facility. A whopping 680,000 acre site.
(on camera): What happens here has far reaching implications on U.S. energy policy, but foreign policy as well.
(voice-over): This is a critical turning point for U.S. shale. After plans for retirement, Scott Sheffield came back as Pioneer CEO to
restructure the company. In the last four years alone, nearly 200 oil and gas companies in the U.S. have gone bust with over $100 billion of debt.
SCOTT SHEFFIELD, CHIEF EXECUTIVE OFFICER, PIONEER: The premium basin started in 1920s. And so we've been producing for over 100 years. And so
with the recent unconventional shale revolution which started here in the premium basin about five, six years ago, it will allow it to last another
So, we're probably about halfway through. Before we thought we were on a significant decline until unconventional was discovered out here in the
premium basin was just probably 2011.
But now it's going to last another 100 years. We're at 80 billion barrels recoverable in the Midland basin, and probably about the same in the
Delaware which puts us around 160 billion barrels of oil, equivalent, which is pretty close to what the numbers are in some of the Middle Eastern
DEFTERIOS: How do you think you fit into the energy equation because there's much more awareness now to introduce solar and wind to the
equation. And where natural gas fits into the future, say 20, 30 years from now.
SHEFFIELD: Yes, we're still -- in this country, we're still using about 80 percent hydrocarbons for energy use. We have some of the cheapest energy
costs in the world today in this country. And it's kept renewables probably from growing faster because they have to compete with natural gas.
That's the competitive nature.
DEFTERIOS: Pioneer has some 6,000 wells currently in operation. Each one is closely monitored to maximize efficiency. But fracking is not benign to
the environment. Heavy water use and flurrying, the burning of excess methane gas are issues still to be addressed by everyone.
You use a lot of water. There's concerns about the methane leakage that's --
SHEFFIELD: Yes --
DEFTERIOS: Still taking place. Have you advanced it to the level that you're happy with.
SHEFFIELD: Pioneer has been a leader on both fronts. In regard to water, we decided to move away from fresh water several years ago. We entered
into agreements with the cities of Midland, Odessa, to use their affluent water and use that to frack with. Secondly, in regard too, we take methane
emissions seriously, we're the first company to start aerial flying over all of our sites.
Our tank batteries and our well sites, so we use a plane flying about 3,000 feet above the surface, we do it once a year, and we have methane sensors
and flare guns that we use on the local surface side. And so we try to estimate, do we have any leakage going on? When we detect it, we fix it
The biggest issue in the premium basin today is the flaring issue in my opinion. We're flaring about 700 million a day. It's roughly about 7
percent to 8 percent of the current gas production in the premium basin, and it's got to stop. And the best way to stop it, we've got to build more
natural gas pipelines to get the gas from the premium basin to the gulf coast.
And I wish every company would adopt a policy, do not connect your oil well. A lot of people are producing their oil wells right off the bat and
DEFTERIOS: Rapid growth of shale has outpaced the infrastructure needed to handle what's unearthed. In the last few years, it created an opportunity
for America to do what was unheard of, export gas to global markets.
(on camera): For decades, these terminals on the Louisiana-Texas border handled inbound oil tanker traffic to satisfy America's thirst for energy.
But in 2016, this equation has been turned upside down. There's so much natural gas around that the U.S. exports to better than 30 countries. This
vessel is headed for Chile.
ROBERT FEE, VICE PRESIDENT, INTERNATIONAL AFFAIRS, CHENIERE: Asia is the primary driver of energy demand, and a lot of our cargo is over 40 percent
since 2016 are landing in Asia. So, countries are trying to meet their growing energy demand and do so in a way that reduces carbon emissions and
improves air quality. And natural gas, LNG from this facility, it plays an integral role, particularly compared to coal, and it also enables
DEFTERIOS: What are you doing internally in the United States to reduce methane emissions for example to pressure the industry to do even more than
it's doing today?
FEE: I think it's important for us to have a dialogue to think about what industry can do in addition to local, state and federal regulations to
address methane emissions. And that's something that U.S. producers want to do because every molecule of natural gas they capture -- every molecule
of methane is one that they can send to us, we'll pay them for, and then we'll liquefy and send on our tankers.
DEFTERIOS (voice-over): At president, America is the world's number one oil producer, outflanking heavyweights Saudi Arabia and Russia. But job
creation and less reliance on imported crude need to be balanced with the threat to the environment. As I leave Texas, you can see the winds of
change. In 2019, for the first time, Texas wind power outpaced coal in terms of electricity generation.
The drive for more solar on the grid is underway. To understand what determines the speed of change, I travel north to see if Wall Street is
willing to continue to finance America's shale.
(on camera): The growth of U.S. production in the future will depend in large part on what happens here on the floor of the New York Stock Exchange
because major stock funds are looking for a higher return on their investment. And many are shying away from oil and gas now altogether.
(voice-over): The market value of energy stocks has shrunk over the last five years. Step off the trading floor, for those who analyze commodities,
one can see that the shale boom has altered the global energy landscape. But this should not be confused with U.S. energy independence. United
States is still a major oil importer.
HELIMA CROFT, MANAGING DIRECTOR, PBC CAPITAL MARKETS: I joined the U.S. government right after 9/11. We never thought we would have this resource
endowment in the United States. We really saw ourselves as perpetually dependent on foreign supply. So this story is explosive growth of American
production has been an enormous game-changer in terms of economics, in terms of foreign policy, and it really is a story of the sort of individual
companies in the U.S.
It wasn't really U.S. policy, U.S. policy facilitated it, but it's really the story of like individual companies and their entrepreneurial spirit.
DEFTERIOS: Do you make the link between global independence or growing independence and climate change?
CROFT: I do think there's this kind of general malaise about energy, about investment and energy. Because there's this view of maybe we're not going
to meet a few decades out. Maybe, this is potentially a dying industry. And so, I do think that there's kind of a dark cloud hanging over the
DEFTERIOS: Despite the storm clouds brewing for the energy sector, the federal government lacks a unified direction of action. The president
prone to make wild claims.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: More than 100 Democrats in Congress now support the so-called Green New Deal. Their plan is estimated
to cost our economy nearly $100 trillion.
You know, you're not allowed to use hair spray anymore because it affects the ozone. You know that, right? If you have a wind mill anywhere near
your house, congratulations, your house just went down 75 percent in value. And they say the noise causes cancer. You tell me that one.
DEFTERIOS: The rhetoric from the White House has given individual states a new sense of urgency to pursue their own green policies. More, when we
DEFTERIOS: Washington D.C., the seat of America's political power. We are living in turbulent times as we navigate through the global energy
transition. Change is not entirely driven by the men and women who occupy Capitol Hill.
(on camera): Donald Trump is the first U.S. president to tout America as the number one oil and gas producer, allowing it greater energy
independence and providing an option to disengage from Middle East conflict. But on the policy side, many wonder whether American innovation
is being held back in the green economy as a result.
(voice-over): For political thinkers and analysts, it's a time of frustration.
MICHAEL ECKHART, FINANCIAL & RENEWABLE ENERGY EXPERT: The lack of a relationship, a working relationship between our political world and our
capital world is shocking. Just not too many people work on that access. But that's what's happening here in the energy transition, because business
as usual is financing in the debt market, in the bond market and in the equity market, oil companies, gas companies, coal companies, it's just
grinding along. While we're talking about an energy transition.
The bond market issues $12 trillion a year, mind boggling, that's 12,000 billion a year in the bond market, and a trillion of that is investor grade
corporate bonds, most of which is to the energy and industrial sectors that are causing the climate change we're talking about.
We're financing climate change, not solutions to climate change, we're financing climate change in the capital markets at a phenomenal level. So,
we both have to start new things, and the question is, should we keep doing these things? It's like buying heroin, you've to stop doing that stuff.
DEFTERIOS: Former U.S. Energy Secretary Ernest Moniz is the founder of an organization intent on nurturing the next energy breakthroughs. He's a
realist, there are no quick solutions.
ERNEST MONIZ, FORMER U.S. ENERGY SECRETARY: The carbon dioxide removal from the atmosphere through a variety of processes, I actually put at the
top of the list as a giant game changer. And if we have this rapid technology transformation to go to low carbon, many of those technologies
depend upon a supply of critical materials and minerals -- and metals.
Let's call it an order of magnitude increase in the supply of these minerals and metals. That implies a lot more mining activity going on.
Some you know -- that's part of the underbelly of this transition.
DEFTERIOS (on camera): Give me the best example, do you think? What are the states that are really driving the energy transition and doing it well
in the context of where we are today.
MONIZ: States first of all, are really in the lead in terms of addressing climate in the absence of any explicit climate policy at the federal level.
Now, clearly, states like California and New York, well, and the New England region have always been out front in terms of state energy policy,
energy efficiency, low carbon, getting into carbon pricing.
When President Trump made his announcement to start the withdrawal process from Paris, a very strong "we're still in" movement began. And that
certainly had roughly half of the governors in the United States.
MAYOR BOB PEDUTO, PITTSBURGH, PENNSYLVANIA: I'm speaking out on this as mayors all across the country have already committed to following the Paris
Agreement, and we'll continue to do so.
GOV. JERRY BROWN (D), CALIFORNIA: This is a crazy decision. It's against the facts. It's against science. It's against reality itself.
MONIZ: It didn't take long for more than 2,000 business people to say, you know, we're still in, too because handwriting is on the wall. We're going
to low carbon. The pace, the scope, the scale remains in some state of uncertainty, but we're going there. So in California's case as an example,
they say, OK, we're going to net zero by 2045.
We looked at that in great detail at our organization energy future initiative. And we looked at 33 technology pathways to meeting that 40
percent reduction in just over a decade. We found that actually it could be done. Not easy, we really need to see, I think more cost reduction
across the board to get there.
Frankly, we need to see a very coordinated economy-wide approach to address all the sectors of the economy to make that -- to make that goal.
DEFTERIOS (voice-over): I grew up in California, the side of pumpjacks, not in in-fields or found clustered in urban areas is a familiar sight to
me. The gold rush and oil fuelled past fortunes. Going forward, the California Energy Commission has declared clean tech will define its
(on camera): You have an ambitious target to go 100 percent renewable by 2045. Is it overly ambitious?
DAVID HOCHSCHILD, CHAIRMAN, CALIFORNIA ENERGY COMMISSION: So, it's absolutely achievable. And to those who believe its mythology, I will just
point out what's happened in the last 10 years. We've tripled renewable energy production in the state of California over the last decade.
Renewables have fallen radically in price.
So, go back to 2000, solar energy was about 50 cents a kilowatt hour, we're now getting bits of 2 cents a kilowatt hour, energy storage has fallen
almost 90 percent in the last decade. So there's incredible momentum in this space. We're at 55 percent carbon-free electricity on the grid today.
So we're already -- you know, the term alternative energy is a misnomer for renewables. We really shouldn't use that. Fossil is actually the
alternative energy now.
DEFTERIOS: Hochschild has cause to be enthused. California is blessed with natural resources, hydropower, thousands of hours of sunlight each
year, a terrain favorable to offshore and onshore wind. But infrastructure upgrades are critical to enable this energy mix of renewables and
hydrocarbons to power the state.
HOCHSCHILD: The modern wind industry globally was born in California, the modern solar industry was born in California, obviously electric vehicle
industry born here, and the very first energy efficiency, codes and standards born here and spread around the world. So, we have a good track
record of doing that, and I think we're going to continue.
You're seeing even more of a push towards clean electricity, towards clean transportation. The market here has grown for these technologies. We're
adding for example about 20,000 electric cars to the road every month in California. And we're deploying a new program here, 200 electric buses
that we're supporting for public schools around the state.
So, the maintenance of electric buses is virtually nothing. And so, that's a sector we expect will grow very rapidly.
DEFTERIOS: Many see natural gas as a transition fuel, we have it in abundance in the United States, it's not going to be needed in California
in your view though.
HOCHSCHILD: The trend is very much away from natural gas. We now have more pollution coming from natural gas appliances in our buildings than
come from our entire gas power plant fleet.
DEFTERIOS: OK --
HOCHSCHILD: That's partly a function of the gas power plant fleet shrinking as more renewables come on. We've had nine cities and one county
in California since May of this year that have adopted natural gas bans on new construction or electrification preferences. And we expect as many as
50 cities to adopt similar policies in the next few months.
DEFTERIOS: Citizens would need to embrace the policy. It may be easier to sway people to give up gas in their homes than change their cars. High
electric vehicle costs makes switching unaffordable for most Californians. A lot of our daily distraction, the hunger for content has seen internet
traffic double since 2015.
By 2025, 5 billion of us will be online while on the move. Data centers are set to drive electricity consumption worldwide. Apple, the world's
first trillion-dollar company claims to have become 100 percent renewable energy sourced. Their space age HQ a testament to their intent with power
to influence its global supply chain as well.
(on camera): How do you define 100 percent renewable energy in practicality?
LISA JACKSON, VICE PRESIDENT OF ENVIRONMENT, POLICY & SOCIAL INITIATIVES, APPLE: I love your word practicality. Because we have to work with what
we're given. And we are very much in the middle of a transition, right, to clean energy around the world. And so what our goal has been is a couple
First, to add new, clean energy to the grid. So, we didn't want to do this through simply offsets or renewable energy credits. Those are great tools
for transition for us, but we thought, wouldn't it be cool if we're putting new -- what we call additionality, additional energy on the grid.
We'd love to whenever possible displace dirty energy, ground(ph) versus the power like fossil fuel generation.
DEFTERIOS: Is there a lot of pushback from the supply chain? Or do you have such a predominant position in this segment of the market that they'll
follow suit if you set the example?
JACKSON: You know, I think one of the sort of surprising things for me at least, was how eager the supply chain is to embrace the idea of clean
energy. What they don't have is know how. So, a lot of what we bring to them is, you know, know how. We have done it, we can show them how to do
it in their country, we'll be right alongside them, sometimes we're investing right alongside them.
DEFTERIOS: Can design and innovation be compatible with renewable energy?
JACKSON: Our approach at Apple has been to bring the same level of innovation and engineering and design to the clean energy journey as we do
to our products. Recycling rare earth elements and getting those into our products. Recycling the aluminum that forms the enclosure for so many of
our products, all of those things are part of the innovation our engineers love.
They love being a part of rethinking what, you know, the iPhone will be as it continues to be more friendly for the planet.
DEFTERIOS: Apple is more than hardware. Products of their ingenuity and operations consume vast amounts of electricity. To mitigate this, Apple
invests in its own renewable infrastructure. Solar farms like this one in San Louis Obispo powers their grid.
JACKSON: You know, America had a power system that was designed to get as many people energy as quickly as possible. And we should take a minute and
realize that our energy system has been key to our success and prosperity as Americans. It is a gift that our parents and grandparents and others
The lesson of what's happening today, and you know, the tragedies of the wildfires that we've seen, the loss of life, the -- certainly -- you know,
the property damage and now the blackouts that we're seeing in the state right at this second, it's that we need to think about climate resilience.
Investing in our energy system is much more forward-looking than defending the old systems. A new energy to system is what we need.
DEFTERIOS: After this tour of the United States, I can see firsthand that the energy transition is well underway. The pace will be set by the big
states. California out here in the west, New York in the east, Texas in the south. But after a quarter century of under investment in energy
infrastructure, it is also clear that business as usual will not work especially with climate change knocking at the door.