Cap and Trade's Effect on the Energy Sector

" They eliminate Chicago right off the -- this is after the president made a surprise visit there. You know basically is he wasn't gonna go he was going to go the First Lady was going to go in glass and the presence -- hopping a plane on the political and Hagan -- going to put us over the top and it didn't."

" And Jesse Jackson actually Jeff Flock is out of Chicago on the Fox Business now network right now talking to people out their faces were stunned the interface is doable in right. He spoke to Jesse Jackson Jesse Jackson's -- I don't know what happened I can't even tell you said. We -- the eighteen and you're right it was the president Jason versus the AT and joyful part of an old rock. Everybody."

" Bomb everybody Olympics -- I'm glad somebody got that -- all right now I agree with you we sent everybody out there when you send the president and First Lady out there yeah."

" and the big old man who would have been the clincher when of that without any violence to see because nobody ever got killed in the eighteen that's very the."

" Yeah allows it went -- back it would have been in 1989. The year they announced that Atlanta was going to get the Olympics and the place you know it's like you here. You're honest court you're quell the spring and as soon as. Juan Antonio -- monster who that was at the time the president of the international victory when he said the city of Atlanta you know we all freaked out if everybody the -- like freaks out because you think it's a windfall. You're buying houses that by four houses down town and rent each one of them out for the month that the Olympics are here don't make millions. And nobody ever made anything they're buying pushed carts to -- Olympic you know hats and tee shirts and everything. And it being a lot less of -- financial went back and we thought."

" Well and that's up whatever it was insane and that's what that big debate has been right if it comes to Chicago Chicago -- end up broke after at all but admitted it good for patriotism and how cool to have that your city. Jeff Flock interviewed people that said that they were ready to volunteer for the next seven years to prepare a cut -- they don't get."

" But an office in the next seven years of their lives and -- and I don't mean the next seven years in -- allies on the part of that big -- jobs which by the way. It's been talking about this for a little -- today actually -- here with this and maybe some and that Robert has few things to say about jobs today. Ugly and it really sent futures. Down before the opening bell yeah how surprises that we rebound that little definitely you know what we've seen as a result selling coming into the number I think people are anticipating. You know this is sort of the changing environment we've we've discussed a load on the show we saw this week with the IS MI another closely followed not manufacturing number. Out yesterday is the -- the fact that you know it's instantly it's not less bad. Yeah when we were coming off the bottom everyone's very pessimistic and suddenly we've sort of swallowed up. More optimistic now as CEO who you we've heard the proclamations the recessions over stock's up fifty or 1% or more off their lows. But suddenly it's not quite good enough so we sort of seem like -- the pendulum is swinging the other way now and it again. You know anyways it's better than the numbers we are seeing a job losses -- couple months ago. It's just not as. It's viewed the the number we were expecting restricting see fewer jobs lost then then the number that was also -- it's all relative in a lot of its expectations."

" You know we look for a little things you know every time these numbers come on the economist to start to pour into it and -- can I find a silver lining here can't find something to be positive about. Could you find anything looking through the numbers that you could say you know what. This actually is a leading indicator sign that things might be turnaround."

" So far it's been really tough to find out I mean aside from the the overall numbers being you know lower than they had been. But -- Harold all the numbers you keep looking through and here you have continuing to yet the manufacturing sector it -- down dire. Average work week it's down now we're talking -- record lows and that's what we are looking for the signs that my working longer and making more."

" And the place is that we were seeing hiring in the past we didn't -- government education that's right you know Chris low of FT and financial for the report out this morning actually said there is very little -- like about this morning's of one point he couldn't find a silver lining either. -- and I agree if you I think. You could argue that we are getting a little spoiled that we're looking for too much to say that this market is turning. And that this that little bit of bad news that -- of the party kind of thing and that's I think catalyst parents."

" I really get pizza but no pepperoni I don't know -- bowl yeah well solid column now and I thanks probably our guys here. All right that's a quick break -- her -- on this show today it's all about energy oil and everything else like that but we're going to talk the talk Schoenberg right now about. The markets still before we get to our energy specific topics. Todd joins us in San Antonio right now he of course managing director at league colds. Trades -- how are you. I'm doing great thanks for having me they -- problem why what do you make of the fact that we are down right now seventeen points on the day time and not. We had eight an absolute abomination. Of an economic report this morning with the jobs number and yet we're still okay what do you make about that."

" Lack -- clearly agree we get christening the number this morning was catastrophic as far as I'm concerned anytime you start seeing. -- continue to go down it does bring back the the feeling that idea we might have a double dip recession and that could be cause for concern going forward. But it's nice to see the markets actually just you know like December down seventeen right now S&P 500 is down about 4% since the last fed meeting on September 23. So I would -- have a -- pre sold the leading up to today's number. And and there were some evidence out there that they're really made analysts and pundits out there really feel that the the number might be worse than expected -- I'm happy to see the markets rebound as they have to that."

" what is you talk about it sentiment that the market is moving because of sentiment and we've heard this before you know well. You gotta go that you can't fight the tape all that that is that's a great reason for this market to keep going up just because people think it should."

" What it's not the right reason Tracy and here's the thing when we saw the sell off earlier this year we won't we reached that level on March ninth. What really drove the markets and even a one year ago we saw the intense volatility in the markets. That really had a lot to do with the notion that had zero to do a technical charts had zero to do with fundamentals. It was all based on emotion which was spear because people were selling because they wanted to sell. They felt that they should have been doing it they do what they felt that they should have done years a gallon and sold at the Hyatt during the last bull market. The point as to say going forward -- short term. This is fine and you remember -- that unemployment or -- the employment numbers that's a lagging economic indicator and there's still a feeling that we will have positive growth going into 2000 attend. Yeah pretty here people coming out saying yes we of poverty accidentally the recession which is great. But that we have Fed Chairman Bernanke just speaking yesterday to the house financial services committee. He's actually setting expectations saying this is going to be a jobless recovery. But overall foreign investors that we start look at the fundamentals and that's ultimately how this market's going to start trading again. And it kinda did actually over the last couple months. But you're really going forward you will see investors out with focusing on those fundamentals and that's actually going to be what's pushing it which will push the market higher."

" Todd got to go to break and about a minute but I want to get your thoughts on what would change your mind you very bullish right now isn't anything out there that you see. All one particular thing that is that it it change your mind and -- make -- little more bearish even in the near term."

" While those two things here one we need jobs we already know that a number two more importantly I think its oil. I mean once you start seeing oil prices going higher that pushes prices at the pump even higher and that cuts into discretionary incomes and air force shoppers can't go out and spend. Remember Chris 70% of gross domestic product in this country comes from the American consumer so they're not spending that's going to have a damaging impact to the bottom line today is publicly traded companies and it would have a negative impact on the market so I would say it's oil."

" We're going to break quit but I that's why then you don't like the home -- sex does septic is well we're not buying anything."

" Absolutely correct I mean we're actually inventories are down 54% from the peak in mid 2006. But still people are not buying right now the sentiment that. The confidence is just not there to go out and buy com right now I'm not happy with whom voters the incentives that they have coming out right now. I would stay away from right now I was in the."

" Yeah I can tell you I'm with you I went out looking I've been like toying with the housing market and I'm not happy with what I see either. Todd always great to have you -- Schoenberg from San Antonio Texas thanks for being with us today -- CC and thank you I don't forget about going to break you know please email us."

" At -- live at foxbusiness.com. At Twitter on Twitter I'm not putting your -- don't. -- Tracy -- and I and of course at at the end -- and we want to hear from you in any shape or form."

" We'll be right back -- an oil. Falling gas from cold water. Welcome back to foxbusiness.com. Chris -- and Tracy -- special -- weekend edition I guess you could say we're talking abouts. Oil and energy all things energy may certainly a lot of sensible cap -- going on right now joined -- president triple. Double advisors. And I. Eight I PK KR welcome to the show. Thanks very much press -- what do you make right now all of the energy markets in terms involvement and investment standpoint do you see opportunity there."

" Absolutely the receive fundamentals for oil globally improving with supply and demand balance is coming out together. And a lot of a very strong feeling that oil in the seventy dollar barrel range will hold for awhile."

" Well let's talk about specifically what you like in this energy sector you you lay the broad energy market you don't like their refineries. Because I mean for a lot six reasons right supplies nobody needs anything right now so wit you're looking more at the exploration side. The services side where even the equipment. Right that people need to replace the machines they need to hire for certain that services to fix them."

" Exactly well the other is that. Increasing demand for oil worldwide and we require -- at least a thousand rigs active in the US to out. Supply the natural gas and oil that we need. We think that the sweet spots in the energy exploration induction area are we should focus on the oilsands producers and in Canada. That's. Suncor Canadian natural -- action. And then we like the that the -- US where. There's something really exciting happening something called the shale gas revolution where. They've found ways to unlock these some vast quantities of gas from. Areas are -- rocks that previously were thought to be an economic."

" We'll but it is it still economic as I think that's the -- my understanding is that it's it's too expensive to be able to extract that whether it's crew and its natural gas from the sale from the sands. Seven dollars a barrel for crude oil up."

" Well the two markets have completely separated natural gas has traded as low as two dollars a million -- used this year. But the -- Herbert is in -- can tango and gets up to 67 dollars. In 2010 and beyond. There's a recognition that they rig count has fallen so quickly. And the supply of gas in the US will start declining. In the months ahead and how to bring supply and demand back in the balance and gas is really cheap even at six dollars -- equipment. Forty dollar oil so it's extremely will be extremely competitive. And add to that the fact of liquefied natural gas supplies are coming on -- the world we see. A future of plentiful. Highly economic natural gas in the years ahead."

" Bob let's talk about natural gas I know it's you what you say is the real story whenever. You -- just wrote in and said he can't fight the natural gas story so why why natural gas why do you like so much."

" While the number one is say it's economically competitive they convicted it actually now is displacing coal and not utility generation. And because of the ability to find these large quantities of use of new gaffes we're still a mystery still trying to figure out just how big game this is going to be. But it appears to be a game changer if that's been said. The problem is that in the the short run we have too much of a good thing we have 500 BCF. Oversupply in an inventory of gas right now. But we think that'll be worked off and we think that the the market for natural gas will expand substantially in the years ahead and -- you've heard about compressed natural gas vehicles we've we think that the administration and policy makers will begin to figure this out. And there's. Just a lot of natural gas that can be produced and displace. Other -- types of energy."

" But is that because if I -- oil and -- if cap and trade -- is natural gas winds so is that I definitely part of the play here. -- you're betting that actually -- going to go through."

" All -- I'm I'm not going to bet on anything in Washington but I will say that I think that there is immense pressure for us to work on the carbon emission problem. So I think over time yes that's -- it will it will -- that -- natural gas and natural gas has the distinct advantage it clean burning its plentiful. We have a pipeline infrastructure in the US which is a second -- none. And add to that the LNG supplies which are coming on -- the world there's a huge buildup about -- G now coming on the market."

" But you say it alternative energy plays -- little overrated here obviously there's the threat of that being propped up like government. Intervention but what about just based on the price of oil mean. You like oil about 6570 dollars a barrel here at what price. Does the alternative energy become viable disguise because people don't want to pay a much for oil anymore."

" Well the problem without the the primary alternative energy -- sources are wind and solar. Most everything else is still a a pipe dream at this time. And neither wind nor so work can be competitive with natural gas that's priced at five dollars to seven dollars million BTU's. -- thought I'm not a believer in subsidies of any kind. And I don't and and I think that. The chances of us really changing the mix here in the in the short run are pretty -- so I don't like subsidies I don't like I don't like alternative energies."

" Which is seeing now is that I was going to send me your stock picks and yours you know stocks like Canadian Natural Resources suncor Smith Weatherford. All of that Anna Taylor since it you know over the last three months since the beginning of the year where you're natural gas plays like XTO. Haven't been up that month so it is that maybe because they haven't really taken off to the races yet and maybe these other. Old old style is if I could say that -- old school and energy plays are done tradition traditional I like that that."

" Why -- I think all of the leading. Oil and gas companies are have some stake in these emerging shale gas play. So XTO is us get a company as it gets it gets -- resources. We -- we've we're following Chesapeake and some of the others it sub. It said that the big thing is that it's a game changer due David this is a a new technology that's going to really enhance the ability of the US to use gas and provide a competitive. Priced. Wonderful fuel."

" By the continuing to around the country thank you very much -- I appreciate Art Smith. From a triple double advisers think do we go from Houston to Pittsburgh right now victim Lewis COO and president called soul energy. Joins us right now from Pittsburgh PA -- thank you very much for joining us. Trade secret side on the good OK you -- to held out one thing first what on earth is high BTU by two monus coal."

" The -- that -- Tim is coal -- leading. Producer of underground coal in the United States and was the leading producer of natural gas and Appalachian basin so. Going back to hear your prior comments were about as old school on traditional -- again."

" So that means you are from clearly against cap and -- you got an --"

" Well we've got a lot of concerns with regard to cap and trade and in most of those concerns go to the cost side of it. And when you look at the costs it's really a regional issue within United States is going to be regional winners and it's going to be regional losers in the regional winners are typically going to be. The California's in New York's. And the other regional losers are basically going to be the middle of the country with regard to his neck pace for this person's net benefits. When you look at the benefits side. There's also concern there because if you do think that CO2 is a problem. And that we need to regulate that. Across our activities with regard industries. He Waxman Markey bill on the nature of CO2 emissions. It's basically going to have a miniscule effect with regard CO2 levels looking out the next hundred years so going to cost issue and we're concerned about -- benefit issue. And energy is the most basic building block you find in any economy our economy it's no different. And coal and natural gas being able to be below cost producer and provide a cost of -- that's really important not just to -- energy but also to the country but."

" But that's I guess my hesitation with all that stuff about 46% of electricity produced from coal these days. And the numbers dropped 22% natural gas 20% nuclear and only 12% goes to the other other wind solar and other. So we have all this but do we have the mechanisms and or will we have the mechanisms in place to make that conversion out to cold by the time. And cap and trade is supposed to take effect."

" Well you know when you look at the issue in terms of how you solve the carbon problem. Technologically look at coal and clean coal technology. Carbon capture and sequestration exists we've already commercialized and demonstrated. Across a range of industries that different links of the chain."

" The -- need to accomplish capturing the CO2 coming out of smokestacks. But we haven't done is we haven't commercialize that in demonstrated that on commercial scale and it power plant coal fired power plant some really all we need to do if we want. Is to invest the time invest money."

" To bring all those links of the chain together which has already been commercialized. Already demonstrated. And shows that on an integrated basis -- given power plant. And this will work so technically I think we're very comfortable with the pieces which they make the investment and put the focus on showing that an integrated fashion."

" Nick you are talking a little while ago about the viability of alternative. Energy sources whether it's wind or solar. What about the viability of clean coal I hear about that all the time and I really. You know I don't know that it -- clean coal in the traditional coal but is that viable and is that something you're looking at and explain the differences to -- quickly if you will."

" Sure clean coal technology it's a fact it's not something that might be or will be down the road it's been here for the last plus 35 years. And what we used to focus on in terms of the mission control for clean coal technology."

" With things like sulfur dioxide with acid rain on nitrogen oxides and ozone and particulate."

" You look at a coal fired power plant today that has built a new one it is over 90% cleaner with regard to all of those emissions I just mentioned relative to the one replaces. And that's been through the demonstration technology over the past 35 years and fifty billion dollars -- of investment. Into the out of power plant flee across the United States would change today. Is basically now adding carbon dioxide to that list as something we want to control or reduce emissions from. And again when you look at technology we would want to apply to power plants with regard to that. That's already been demonstrated on individual links. We need to do now as we integrate that. Bring that together and given commercial power plant demonstration project and show the world that within the next ten years we can demonstrate what's already been demonstrated individually by different segments."

" attempt to break it's cheaper to make electricity. With coal that any of those other sources is that not."

" Coal is the cheapest form of electricity outside of nuclear that's been proven decade after decade. Cheap electricity. Electrification improves quality of life across a range of parameters doesn't matter what country -- what region you're looking at it's one of the most important strategic advantages we've got within this country. We look at things like Waxman -- cap and trade need to be very careful from a policy perspective -- don't undermine the strategic advantage."

" And -- the kids at Christmas time without coal let's face it I'm powerhouse a lump of coal is not necessarily about a ten."

" Could mean yeah that's sort of like you know the the pot of gold a -- cold reading rainbow for I -- from art. Thanks -- we appreciate you know. Need to access CEO and president Consol Energy joining us in Pittsburgh all right coming up Bart Chilton a member of the Commodity Futures Trading Commission. We'll do -- to talk about what carbon trading market. Could look like."

" Welcome back Bob. Business dot com live Saturday it's Friday. We're not -- there's so much time I -- is clouded already with all this information but it's so good and both sides of the argument aren't you get you votes you know. -- administrator of the US Energy Information Administration is here that's helped un cloud my brain matter wrapped around coal. Nuclear natural gas you name it. Richard. 20%. US energy. By natural gas right now what are your thoughts going forward with natural gas."

" Well -- as mentioned on natural gas is 20% per 20% of a US energy needs. Over 50% of US households -- use natural gases or home heating fuel. A 3% of electricity approximately. And its major source of fuel for for industry. Over evil over B last year we've seen significant changes. In on natural gas markets. The demand has come down to be economic downturn primarily in the industry it's actually increased somewhat in the electricity sector. At the same time we've seen a significant production increases in the United States primarily in the form of -- path. Which over the last several years has become economically viable due to -- technological advances in horizontal drilling. And hydraulic fracturing. So this decreasing demand this increase in supply of last for several years has led to substantial increase in inventories which are now -- an all time high. And we expect him to continue to build until December heating and the winter heating. Season begins -- as a result we've seen significant declines in natural gas prices over the last year. Are falling by about half more than half on average on this here compared to last. And did what about inimical to it will change is gonna depend on on the rate of economic recovery and also what that implies in terms of doctor gas prices. Increases in and really -- the United States in the longer term prospects for for -- So our energy prices below this winter because of that. We expect that they will be another result. We expect that winter home heating bills for those who use natural gas will probably be lower this winter. On Tuesday. The CIA will be releasing a winter fuels outlook which will give more details on that. I'm of course there's a large degree of uncertainty in natural gas prices as there is an oil prices. And depending upon whether we have a particularly warm winter or cold winter. Could have a significant effect on natural gas prices. "

" Rich real quick hurricane season it's sort of -- and down right now we didn't get a major hurricane in the gulf. How -- an idea -- have on prices and if one would you just happen to pop up here in the next two to three weeks. How much how much of impact could have been on the other side."

" Well -- you would always have that tendency if it was to shut in natural gas a more even if there was the expectation that which -- natural gas would tend to have an upward. Effect on prices however we have very significant inventory is at a record high and so -- The degree to which that would affect prices would be probably modest."

" Richard I think that's really good news for people like me who keep the heat cranked in the winter even now I'm not supposed to and I announced flat I had about what he going to do Richard now administrator of the US Energy Information Administration. Thank you so much for being let us."

" Thank you and by the way it is freezing in this news and I. -- credit or -- you everybody for cranking the ACF and we needed Bart Chilton joining us right now as we continue our. Conversation on energy CFTC commissioner joining us that in DC -- welcome that if you don't. Good to be with you guys are now in the big thing we -- talking about cap and trade a little while -- no this is going to create a secondary market's going to create a market it here. If you're buying and trading. The futures if you will. I mean how how this be regulated in -- there are concerns because of understand there might be some concerns that this is going to be very readily. I'll open to fraud. Going forward are you concerned with that and how how do you see it regulated moving forward."

" What what was a lot of your your question -- take them one at a time. One it's going to be a large large market the derivative market could be a very large market though I've estimated it could be. Two trillion dollars now to give you a sense so how large that is. It would be not as large as Euro dollars which for the number one futures traded the US. But it would be larger than say crude oil which is the largest physical commodity so would be pretty large -- two trillion dollar dollars. But I'm not worried about the pride if if all of the transactions are done. On regulated exchanges. Right now we have over the counter transactions that have that happened for many commodities in the the energy India. Metals complex in particular. But I'd like to see all of this trading done on exchange so we can avoid that fraud abuse. Or as you suggest the potential of even manipulation I want somebody looking at these things all the time it's too important. For the environment but it's too important to the economic engine of our democracy that we actually get this right and have steadfast sure -- regulations."

" but this a win for you are for you guys and as a people understand. Under cap and trade if it goes through oatmeal every company will get a little permit on how much they -- didn't CO2 they can emit into the net. -- what they don't use they basically good trade off and if you need more appeared. If you're sloppy and admitting more into the universe you can somehow buy mine and bar. You -- would be controlling this little bartering back and forth."

" Yeah we -- that you know that it if that happened trade part where the trade part of -- you know congress would establish the captain and of the allocations that you're talking about -- they'd be. Established. Under the house bill by the yeah by yeah. The EPA there are no protection agency and then the commodities futures trading commission but my agency would be in charge of making sure there's no. Fraud abuse or manipulation I don't look at added as a as a win ferocity what will do whatever congress tells us to to do. But I do want to let people know that we can handle this. We do all sorts of contract to -- long as we have the staff to do it. We can not only do we can to a really good job of avoiding fraud abuse and manipulation these cap and trade markets."

" Is there any concern here about some. All of horror manipulation if you will by the government all but -- over regulation because he's been hearing that obviously I'm in in the banking industry here. For so long is there any concern about bad in this particular market that'll discourage."

" Participants. Yeah I mean there's there's that that at least a sort I think. Two different issues one is you need to get the allocations right to begin with and that's that I said the EPA's perspective. What happened in the European Union when they started this is they over allocated. And therefore they discredits themselves weren't much weren't worth much people didn't need them so the first thing is to get the allocation right. And by the way that's about the the only thing that's different from say. A crude oil contractor. Gold contract is that. At the government doesn't. Doesn't control the allocation that's only -- different with with with these carbon credits. But once we let it get it. As long as we have the people looking at it. I'm not worried about the broader or abuse it's it -- long as we can see everything in the markets I don't want bid large transactions going on. In what people called dark markets and that essentially just means unregulated markets where there's not transparency does not daily reporting. But we've got a whole plethora of oversight and surveillance. And accountability measures that we used every day 24/7 365. So we're ready if in fact congress decides to give us this authority look at these markets."

" But this seems to me like it had the potential to be an over active market. And are you are you excited about this. Cap and trade decide whether -- you believe in the policy at all just -- all this coming T I mean I think this could be an exciting. Trading place just to even watch this."

" It is I mean you wouldn't. Do something like this just for the trading venue America that it has that that the bonus of saving the world maybe but from from my perspective this very exciting because. The the enormous potential of these markets. What it can not only do four. Of markets but what can actually you do for consumers and for the economic engine of our democracy. We can really fuel inject our economy it can be a stimulus if you will. And so I am super excited about it I think it's a neat thing enough. I'm hopeful that we get the chance to vote -- participant."

" Block I think you hit right on the head it's a stimulus for the economy you can make a lot of money and you can save the world I don't think there are three things that we could really you know with. Will come up with that would be better than that. It's like six yeah well that's right tree right banks why we appreciate it art thank you so I just bored children -- got a gun. Commissioner of the Commodity Futures Trading Commission thank you so much. Right up next we'll talk to excellent executive Betsy Mohler about the utilities decision. The split with the chamber of commerce over cap and trade -- nuclear so excited about that they would."

" Foxbusiness.com. -- even -- can always email -- at BM live at foxbusiness.com. -- on Twitter at -- and live. We want to hear from you I'm on Twitter and -- I'm like I'm slowly you know there's like four people following me I'm following link him but nevertheless I'm out there for people are swear and related to all of them. Becky Moeller is here Exxon executive and former FE RIC chair -- This is one of the largest electric utilities out there so clearly now you are in support of cap and trade tell us why."

" Yes we are where it's part of passing legislation this sentence we can to cap pollution. To give us the tools to that make at least. Expensive. Program possible most cost effective program possible for our customers. And to get on with it."

" Why is -- such a split here Betsy within the chamber of commerce is the US chamber of commerce for talking about here. Why there's some like his -- source -- supported and others who are so against that."

" Well the chamber has taken a position that we should wait until there's an international agreement before it passed legislation. We believe the time to pass legislation is now. It will be more expensive for everyone in the long run if we wait. If we pass legislation now we can both curb the pollution. And clean up our environment and create jobs we think that's a very positive thing to do and we shouldn't wait we should be leaders not followers in the international community."

" Now I hear anyone -- but doesn't -- put American companies at a distinct disadvantage when we talk about the consumption of the -- nations particularly. Brazil Russia India China and if you've ever flown into a city like Mexico City for example you'll know that -- environmental. Laws are much tougher than they are and other parts of the world. It doesn't have put us at a real disadvantage."

" I think it all depends on whether the bill is done right we believe it's possible. And there are a lot of economic studies that show it is possible to do that to do the bill in a way that he is very positive for our economy. We also believe that ultimately other nations will follow. Betsy you are also the largest operator of."

" New clear plants. And we -- about 20% of electricity comes from nuclear so you stand to benefit. Tremendously a company I should say stands to benefit tremendously from a cap and trade policy."

" Well we have been advocating. Passage of climate legislation for a number of years our CEO John -- First testified in 1992. When he was with a different. Companies that we needed to address. The climate issue. And that's why were in favor of legislation we believe that done right what proper protection for our customers that this can be. -- for the United States economy but why do you think that if the if it's handed over to EPA it would be more closely. The EPA doesn't have the tools. That would enable it to do. A cap and trade bill where you cap the amount of pollution that there can be and then used the ingenuity of the marketplace. To figure out the least cost way to implement the bill EPA doesn't have the ability to do that they're going to be much more command and control. And we've seen with other programs of the EPA has run. That that's a much more cost and --"

" Give way to do it. -- we still just keeping with the nuclear feeds him because yeah I support nuclear power I see in -- the Europe and it's very popular in Europe. Are do we still have Three Mile Island and Chernobyl in you Jack -- from the China syndrome on our brains. And we miss the point in terms of the fact that this is a much cleaner energy than than maybe we're. Yeah we remember that we think about."

" Well it is a clean energy source and our world is changed dramatically. Since Three Mile Island by the way we on a unit on Three Mile Island that is producing electricity today. And isn't cleaned. Safe secure heavily regulated source and we're proud that we think it has a very important part to play in the future in a low carbon economy."

" What's the fear than just look at what is the fear that people have twelve nuclear energy. Well it's a fear based on a lack of understanding and knowledge of what the industry is about. It also is a fear based on another year so we say get past that."

" We have a question from a -- he asks about micro generation to reduce power -- loads and potentially encouraging renewable development on the smaller scale. Is that -- way to go about doing it up from another angle."

" Well we need to and the studies have shown that we need all kinds of electricity and a low carbon future we need we need renewables. We need clean coal. We need natural gas we need nuclear we need them all to keep our lights on com and us safe reliable futures so micro -- are important part of it. But they're not can't be the whole story."

" we appreciate your time thanks for joining us this afternoon. Thanks for having -- from next -- joining us to talk about it -- her company's. And -- roll if you will after cap and trade to fuel there and supportive and -- had nuclear is a big part of how they'll wind with this thing. You know it's going to be interesting moving forward it's it's this conversation is very seem to me about alternative energies because we talk about how. Solar could be such of a benefit for us but this I think this size and Scoble both solar and wind power. Is hard for you with a get their arms around -- are we going to have wind farms from Montana to Texas are we going to have a solar field. The size of Rhode Island out in the desert in Nevada -- Utah on you know those that things that you have to think about. The cost of that in the scope in order to generate enough power. For us is is pretty astronaut."

" And will really be ready will we have the technology in place when the cap and trade rules say we should be I think this conversation is so interesting because it is black and white. If you're cold guy you're against cap and trade if you are all alternative sources of energy person you clearly want to -- you gonna win at the end of the day. When and that and that means that seems to be the consensus thus far."

" When I lived in Boulder, Colorado a little. Look like left. Conclave in issues right -- state of Colorado. There's so many girl is out there that had -- huge solar panels on on our house that -- almost to the new house twice the size as a live and out the solar panels and they were great but it's not seat when he was almost a science -- my father."

" To be able to put these solar panels on top of that house -- and not actually is looking a viewer wrote and said solar is not seem. Not another seat but he wind power's not cheap even you think about the land you gotta have the land you've got to have to do it seven has lit."

" But yet you seem to Europe you see these are huge -- all the time -- on top of mountains and one not a lot of people don't like it but the thing about his."

" We've got to make change is one way or another be out of those solar field."

" We've got to have a Winfield. Where guests are using less energy and it has to be some sort of give and take in this whole process we cannot continue to burn coal. In burnt oil until it runs out there will run out but it -- cap and trade the way to go honestly triple I don't think so I don't think so either I mean and this I -- I get reports coming from -- to win for him but there are alternatives -- tax breaks and things like that other than that right let you know. Will will wait and see."

" Yeah goats are coming up after the break the CEO of Edison International parent company of Southern California Edison will join us. We're back."

" Welcome back to foxbusiness.com. Chris cutter Tracy Byrnes with you and Ted Kramer is with us right now chairman president and CEO of Edison. Half as we continue our discussion. On energy one of the audio largest electric utilities in the nation ten welcome to the shelf. Thanks very much a life I've referred a lot about the smart grid in Southern California explained to us -- about this what this is. -- how this is helping your customers in Southern California save money and use electricity more efficiently."

" Yes will we're really excited about a number of the things will be able to do and the smart grid. Space. Particularly those smart meters or what we call -- Edison smart connect. This gives us the opportunity to. Really provide our customers with the additional operating efficiencies as well as energy efficiencies. And importantly also strengthen the reliability of the electric grid."

" So are they working means you are you seeing people benefit from these things are -- big pain in the neck at the end of the day."

" Well -- a pain in the neck we really believe these are going to be. A key ingredient for. Building out the entire smart grid. At this point we're in beginning stages of our installation of what will ultimately be over five million meters. For our residential and small business customers. We've already installed. Smart meters for our. Large commercial and industrial customers in fact we do that between 2001 and 2003. But this is a huge deployment -- Providing benefits to our residential customers and small business customers."

" what can explain what makes -- smarter you know that we are also about the grades when we were talking about electric cars and if we'll -- our cars in the grades it's certainly in this area just Indy lights out around here so what makes the grid smart certain."

" Well it's a really good question. And I think there's a lot of confusion about exactly what this term smart grid means. To me what it means is that's making our electric system more efficient. More cost efficient and very importantly more energy efficient. In. When he really look at electric system for instance and our companies are. First legacy company was formed in. -- 1886 so we. Really a long history when when you look at that technology. It really hasn't changed that much in the last 100 years. Now what's beginning to happen is the introduction of solid state electronics. Digital. Electronics the ability to add computing. Into our control of the electorate system. This is a huge change and something that truly is transformational. As we -- around our company will probably see more changes to the electric system in the next ten years and we have in the past 100 -- So we see a lot of promise. To really provide energy efficiency. And operating efficiencies. Two. To the customers through the so called smart grid."

" Tit for years I have been getting literally years I've been hearing people say you know what I'd love to own an electric car. But I just don't Knoll -- when a deal to flaunt it and I parked on the street when I going to do run and 11 of those big 200 foot orange. Cable's out there extension cords and plug the thing in there's no gas station that has -- that I can plug in the service stations and eight. You won't run one of the largest privately it's the largest privately electric vehicles in the nation. What do you tell people when they say you know what I do something it's viable."

" Well. We have had a lot of experience as you mentioned we actually. Largest private fleet. Of electric vehicles we've been at this since 1987. We have over 300 electric vehicles in our -- so for instance meter readers use electric vehicles we even have. The bucket trucks. That the -- use. Some of those are essentially electric vehicles. So we have had a lot of experience and a lot of the issues that you mention are. The ones that we're really trying to to understand and figure out how do we build a robust infrastructure system. That can really allow. For widespread deployment of electric vehicles. You mentioned four apartment dwellers or for instance in New York City. Or any large urban setting. Where people don't have. A steady place city garage space to put their core. Well those are relatively. Unique circumstances but ultimately we need to find a way. To build the infrastructure. That will support all electric vehicles. In Southern California. Going back to the eighties and particularly into the early ninety's. A lot of infrastructure was built public charging stations. At malls. That government buildings. And I think there's a lot more that can be done and certainly will be done on that front. One of the one of the key issues is trying to make sure that. In working in partnership with other utilities working in partnership. With the car manufacturers. With the battery manufacturers that we make. The customer experiencing good experience."

" Right well that's and that brings me to my question at what -- and costs to be cut customer at the end of the day is clearly he's going to take work. If these are stronger self healing grids if they're more powerful that must mean more money to get them that way. How the costs and pass on to the consumer."

" That's a great question and I think it's only fair to understand. Something -- this transformational. Going. To a solid state digital. Equipment. Throughout the entire herbal energy system and all the way to a customer. That is a large and costly transformation. We feel. Just taking the smart meters for instance which were in the middle of deploying right now. We worked for a number of years to be able to prove to herself and ultimately to the public utilities commission and to our customers. That the benefits that we saw from. Better efficiency better operating efficiencies that are energy efficiency. Would ultimately pay for the cost of the meters. So in our business case which we worked on for quite awhile. The benefits to exceed the cost of installing all of those smart meters."

" Well Ted we got that coming from a viewer to Virginia says remember folks there are people out there will live upgrade just not it can be done so. That's one for your team said Ted Kramer chairman president and CEO had -- and."

" National thanks so much for joining us and explaining all that."

" Thank you Tracy pic -- sites and we appreciate it we'll be right back with Eric Bolling. -- gas blood in the CEO of gas buddy dot com I don't yeah there's no and I home. Yes I -- and -- 600 going to ask for gas tax. These -- with a."

" Apparently -- gas buddy. Yeah bullying host of happy hour is here to talk to us about the oil he's -- he's that he's all my instinct snowball weekend wasn't that wasn't an email address."

" Pulling at gas or -- got gas or something a little while falling gas was the email address. I'm going to pick and I can't people remembered it yeah unsalted -- all matters -- still active -- gas at foxbusiness.com. If you want to complain about gas -- because -- North Carolina when they're on they're not. Now that's not to -- on gas -- and it is famous. I actually think oil prices are gonna come down barring any major you know incident with with Iran in the Middle East but then again that's a big barring any because that can happen any time and he's literally got beat it does is thumbing his nose at the international community as we speak in Geneva. Saying look of whatever you I'll -- have but give me two weeks and may go straight maybe I won't in the bottom lines will be Obama's statement yesterday after. After a lot of the information that Kamal from the Geneva meeting was all right we want to see what's going on and if not than they -- will step up sanctions well. That's all he's heard -- job and in the Iranians for three years now we don't have any. Sanctions with any teeth. Or we haven't we don't use them Russia won't jump on board China won't get involved. So it's going to be the same thing in the bottom line is. In a few years or less you can have another country with a bomb a nuclear weapon and here's a guy who says Israel shouldn't even. The on the map as it is it's going to be very scary place you know we've got a lot of supply in the system that capacity at the refining level. When we return to fundamentals at some point time in terms of price and if we do where where is that need -- because speculation is still the market is the driving the market isn't. Yep but you know when they see speculation would mean I mean you'll -- oil oil stocks and all are okay but I -- backyard all out Israel on an oil stocking your 41 K or your. -- mutual fund that has exposure to any sort of energy or whether it's infrastructure or. Or services. You -- speculator you're speculating on oil up the price of 68 dollars a barrel to 69 dollars a barrel today. I would say probably fifteen maybe eighteen dollars is is geopolitics is and what if Israel says I'm not -- very United States were just gonna go we're going to take out this nuclear facility because we don't want to be the on the on the you know on the business end of a bomb. So maybe eighteen dollars to bring it down to fifty and and may be another five dollars of of what you'd call speculation dreadful hedge funds buying in the in case you know. The world blows up and they want to be on the side like -- is my question is is. Does -- demand right now which seems to still be -- support seventy dollars a barrel oil eighty dollars a barrel level point time to use that doesn't really. Break down because that is is in the demanded by that big oil lost its pure. The tie to supply and demand may be. When across fifty dollars for the first time was that maybe 45 years ago and everyone started to hate -- oil Yang had it's good inflation hedge you know also to would you politics hedge. You know what. The stock market doesn't look so good we better jump in in in the commodities markets in the two places you go in between when you buy commodities gold and oil look at -- cold. Called 1004 bucks announced that it so."

" I I have -- I don't know about you know and we we would complain -- four dollars a gallon but we still go to work."

" People we -- what can -- the funny thing is. We drove suvs to work at four bucks all Detroit did -- they. They turned it over to hey let's start building hybrids smaller vehicles higher fuel efficient vehicles and then the price would tell -- what's up. I want my suvs that account so I really -- chasing their tail. The auto makers are so. And I think my guess. At four bucks Tracy you know it liken it to -- used and so I -- yeah so where is not a vast plains this whole picture. Two guesses is just the -- I've treated natural -- for 23 years it's the court case commodity on the planet. Natural gas traded as low as about two dollars and thirty cents per and then BTU which is the unit they traded him while. Oil was still trading 75 dollars a barrel there that -- is the widest discrepancy between the price of the barrel and a unit of natural gas ever. The price of the barrel still here in the -- and I did watch what was it like that it. That there's no economic fund function to natural gas for now now the biggest players in the world big hedge funds have been realized that they can throw around natural gas is so much. Less liquid commodity no no -- But they realize that they can move the price and a couple of big big players natural gas who have directional bets on and they kept the price down for a long time I think. For now you talk about historical because the -- people talk all the time about. Well historically it's seasonal historically now from the summer to December it drops and it picks back up. Is this year different whether it's on an accrued little talk about that August Cole is well because of this pending legislation might really change the -- world -- as far as you know forever look here's here's the issue would -- if your member of 20063 years ago Ameren advisers big big hedge fund had a directional bet on oil and natural gas bullish. All they need it was a cold winter or her -- summer they got neither they lost six billion dollars plus six billion dollars us that you haven't. Right what that was of your prior period if everybody that I. They wanted to wait one or Katrina and in the years after that. We're we're very bullish before for those commodities they miss that so. We haven't had really cold winter in a couple winters and we hadn't had a massive hurricane season and a couple of seasons now since Katrina and her gusts of I was kind of -- but. It either one of those events would drive prices a lot higher so you know you really kind of playing on the weather. The very by the way the most the -- closely tied to money too but whether it would be natural gas."

" Kicked out because at Blakey said at any moment after that John could do something in America."

" Theory your training with a crazy person in the background Malia but imagine if you had a bomb on the workers who by the way you if they do -- or Wendy's you get the bomb. You want to talk viable toll and sector energy energy prices lately I have a couple of seconds Apple what do you do with him what do you do without vision."

" If I'm Obama yes."

" I saved Israel it's all yours you want to do you want to take care this -- use our space use airspace -- landing strips and in Iraq."

" And and just get them -- they'll do it."

" They're waiting for us and I know. That's his new little bit soon -- there a lot of reasons Eric -- thank you I've got."

" Acts as a problem and -- during the three you've got Trace. I you wants human face it and not I'm the guy -- do this term treatment at all your unfortunate telling Soviet Goodling did. And give you -- thankfully along with. It's not rightly or wrongly the naked how to. -- doing the make I had to get -- big public life listened to the naked cowboy at three but it makes more sense treated you know. Have you seen that make it cowgirl by the way I've seen it since she scary Wahlberg got lover but she's -- Allen. By legal merit -- cowboy it'd Jason's phase right now founder and CEO of gas buddy dot com these candidates guest but he. He's up in Saskatchewan Jason thanks for joining us. But it's. Jason you say -- notes that eludes thought to Eric about how. Gasoline prices may start to go up here certainly in the summertime it's seasonal and it typically a higher. You say we might see four dollars a gallon gasoline again by next summer why is that."

" Well you know it when the economy picks up this and a lot of demand for gasoline. In the US and also globally as well. In in -- of notebook or sever her by December orders he gets personal accounts and probably around me one sending money per gallon."

" Sent us what you. What gas but he does the -- of critical and helps people find the cheapest gas in their area."

" Well guess what is a network of over 200 cast Crist upsets. Us live Geffen got on their -- let's say -- don't have about Los Angeles desperate stunt car. Basically beginning city prosperity where it is absolutely for people who shared tips -- what -- its guests everybody can help Tennessee my."

" Yeah so you could I could go to my little gas station and saying hey this gas was cheap but my car broke down mile -- may be it's bad gas like them but something like that on the --"

" Let's say you know like it it's it's a forum for people to host the cheapest and most expensive gas. And bite -- if everybody -- hit some of the cheapest gas is the site easier to see my guess."

" Jason we run a website you want to get the most eyeballs possible and want to find a way to monetize that Cyprus here. I would imagine things are better off for you when this four dollars a gallon gasoline. Then when it is a hill right now two dollars and fifty cent gasoline because people people perceive as being cheap gas right now."

" What people do proceed as being cheap -- most cities across Turkey could still see it there you're forty cents per gallon by knowing where to shop. There's a -- discrepancy between those stations. Well we invited when president moving when they're Alltel going up or doubt you know more capitalists -- flat."

" I have very frustrating that gases. Two cents more expensive. I'm from New Jersey so the closer I get to the time of the more expensive gas is the further out it's cheaper so. And because they never get my act together in time I'm just about to -- the town I need to fill up. Why it why the big discrepancy is it based company isn't based on who has the better snacks in the convenience store."

" Stations actually hate different also -- depending on -- so where they held its own -- need one major city may have dozens of zones. But it's insular thinking that -- it. -- largely -- competitive factors between stations. Wesley noticed some stations have that little maybe a couple cents per gallon cheaper. -- but it hasn't -- strategy. How aggressively they're trying to get. --"

" I would also ask you -- geographical standpoint just I just don't know this. It seems like in some areas of the country United States gas is always less expensive than another rarity even in areas we -- major metropolitan areas you would think. Well you know the transportation routes to get there must be easier you would think it would be less expensive that is necessarily the case."

" Yeah and it really depends on the area -- finance affluent suburbs and -- but more for gasoline the -- I sense. But bedroom communities and convoluted cheaper prices because -- young families with big suvs or any bad. And they have to live in the bedroom communities -- you a quarter house there. Us they have these big -- needs and what gas princess rule 34 dollars per gallon for the impacts people."

" Okay so did the sick days used seem to think that gas going up you say five to six dollars a gallon. --"

" Yes you know I think looking within two to three years we will see. About six hours ago no this is of course zoom. That the economy's going to pick up."

" That's against the big assumption over the next at least year to limit and that flat line and you're saying that it's because we're driving less so therefore. Left to man price goes up that's just basic economics."

" Well you already know pace in -- lower because that key piece of man. But there's lots of international factors such as China and indeed India. There's an excuse lower gasoline and crude oil than they ever have to pass no check of the population. Or times the glass and using a lot more crude oil and gas I don't know Jason just -- a website before we got as we got around. -- gas -- dot com."

" Jason hockey season is underway and enjoy that I yeah. It Jason -- from he's from Saskatchewan -- away. Moose jaw Saskatchewan my favorite city in Saskatchewan. -- on is my favorite city in Manitoba to want to get that straight so if you had your favorite city in the province of Manitoba let us know here on the website Lynn -- flying minutes nobody heavily body Clark the great Philadelphia flight was from moose Johnston sketch one maybe calculus I'm ready at that has children that sounds like all these -- characters. And I don't know what that is because I don't have kids not been fun -- a lot on energy. Us in the -- pulling giving us his insight on what's going on out let's talk geopolitical. You know environment with a loyal. On natural gas solar. Certainly nuclear is well variants just to see how that goes particularly attached if cap and trade. Does get passed in some form nuclear certainly looks like one of the big beneficiaries."

" And have been trying to get beyond the table for a long while we're going to keep talking about it thanks for joining at this Harry you know he's kept -- box that this back. -- every weekday at he -- look down -- of course check out I didn't."