Exponential Energy: Technology and Policy

Michael Krigsman: Hello! Welcome to Episode #242 of CxOTalk. I’m Michael Krigsman, an industry analyst and the host of CxOTalk.

Energy. Energy is a big deal and today, we’re speaking with two folks who have the inside track. I want to thank Livestream for being a constant supporter of CxOTalk and if you go to Livestream.com/CxOTalk, they will give you a discount on their plans!

And I especially want to thank Singularity University for underwriting this episode of CxOTalk. Singularity talks and studies and teaches about exponential technologies. And, Singularity’s faculty was involved in creating the questions, the discussion agenda, that we have for today’s show.

So, our guests today are Pete Tseronis, who is the former Chief Technology Officer of the Department of Energy, and today, he runs a very interesting consulting firm. And, David Bray, who has been a guest on this show a number of times in the past and David is co-hosting today with me.

And so, without further ado, Pete Tseronis, how are you and thank you so much for being here on CxOTalk!

Pete Tseronis: Well, thanks, Michael. It's awesome to see David, my colleague, and friend. This is an honor. And, I'm excited on a couple of fronts: one, to talk about a passion and to frankly leverage a lot of that time I spent in government, not just working from the stand, but really, becoming part of the energy sector and its role, not just in our country but globally.

Michael Krigsman: And so, very briefly, when you say you’re part of the energy sector, what do you do exactly?

Pete Tseronis: Right! So, I left government after 25 years. As you mentioned, I had the fortune of being the Chief Technology Officer of the Department of Energy, which placed a significant role in governing that sector. It’s one of the sixteen critical infrastructure sectors that our country defined that arguably are sectors, relative to other nations. But I’m, today, almost two years out now, translating or taking that passion into the private sector and working with businesses and organizations affiliated not just with the energy sector, but the other fifteen and how does technology analytics drive the innovation necessary to modernize, in this case, energy entities, infrastructure being high in the power grids, and how globally we can move to an Art of the Possible state that we need because of sustainability matters.

Michael Krigsman: Well, that's pretty interesting, and we're certainly going to dive down into these topics. You know, before I introduce David Bray, I have to say it's all systems go here at CxOTalk Central, or CxOTalk HQ because we've had these internet problems. And right now, we're streaming the show mostly through my mobile phone. I have gigabit Ethernet, you know, gigabit internet connection, and the packets are sort of dribbling out mostly through my mobile phone and in this day and age… But at least we're streaming to two different places and it seems to be working. David Bray, welcome back to CxOTalk!

David Bray: Thanks for everything, Michael! I’m great to join Pete, and I think it’s fascinating to mention your mobile phone as distinctly hosting the show. And we know we’re about ten years after the advent of the iPhone. It was three years ago that actually the estimate was 2.3 billion mobile broadband connections on the planet, and that number is supposed to double about every two years. And so, I guess your show is now living proof that one can actually do everything on a mobile device; and that was only possible on a desktop ten years ago.

Michael Krigsman: Well, it is pretty extraordinary that you can stream a show like this mostly through the … I say “mostly” through the phone because we’ve got multiple connections, you know, none of which are sort of working completely. [Laughter]

David Bray: [Laughter] There’s something about critical infrastructure we can dive in … And that actually is, to me, the fascinating topic of today in energy, and I want to hear Pete’s views. I mean, all these things, the Internet of Everything, artificial intelligence, autonomous cars; we don’t have them working and if they don’t have power, it doesn’t really matter. And so, in some respects, if you think about Maslow’s hierarchy, if we don’t have power and energy, then nothing’s going to go. So, I’ll be interested in Pete’s talks about critical infrastructure both the here but even more importantly, the exponential future ahead.

Michael Krigsman: Well, that seems like a great introduction! Pete, so what about critical infrastructure and our exponential future, and exponential energy? Please, share your thoughts on this!

Pete Tseronis: Thank you! Thank you, and I have to put a plug in there just, not be biased towards the energy sector, but it being one of the sixteen and I would ask if we will use some terms that I think need to become part of the lexicon, both in the technology space, but also in the consumer space.

When we talk about critical infrastructure, it's pretty basic. These are the things; these are our roads; these are our cars; this is the food we eat; the wastewater treatment plants; the energy that we consume every day. And as a consumer, and as a federal employee and now on the industry side, I think it's a topic that we can relate to the consumer as we move to this term called "smart infrastructure" or the "digitalization of the internet" that's impacting our lives.

David commented a bit on that. We make up jokes about how we got patchwork quilts even though there’s all this technology out there. The energy sector powers the other fifteen. And, if you think about if there’s no power, we joke in this town with “Snowmageddon,” and we have these blizzards in Washington, DC that shut the city down. The joke sort of wanes after three or four days when we don’t have water, we don’t have electricity, and we get frustrated. And that’s where I think the reality of how critical the infrastructure, roads, planes, cars, food, dams, the communications themselves become apparent to not just governments, and not just industry and owners and operators of [infrastructure], but the consumer.

And Mike, the point there as we talk today; I think critical infrastructure should and will be a theme. How technology’s impacting that is the exciting part, again, the Art of the Possible, where are we going with interconnected devices? David mentioned this; billions of connectivity or devices that will be connected; the industrial Internet of Things; the Internet of Things. I think people get it, but how you integrate that and in the case of energy, how we start to integrate renewables, store energy; those are matters that ring in the policy regulatory matters that are significant. But, they need to be happening in those conversations, I feel, in a concurrent stream to not stifle the innovation of where we need to get to.

Michael Krigsman: David, Pete just raised about, you know, a year of discussion. And so, in this, and I think we also need to overlay public policy so we have technology with exponential technologies; we have consumption and demand; we have critical infrastructure, and then we have public policy as well. So, how do we start to sort through these things, David?

David Bray: So, you’re absolutely right. I mean, we could obviously have a yearlong CxOTalk and then that would be … I brought my sleeping bag. I don’t know about you, but it would be interesting to roast some marshmallows and have a discussion. But, time to pack into the next thirty minutes, I think we need to think about what are these issues that are both opportunities that are currently not being focused on either by industry because Industry is focusing on linear change, not exponential change; or, by the public sector.

I’m putting on my hat right now in the role that I’m here today, and it’s as an Executive-in-Residence at Harvard, where I focus on leadership in the networked world; I think we still think about the world as being nation-states. We still think about the world as being existing legacy institutions, and we miss that network effect. And so, what Pete mentioned was what happens when things start getting more interconnected? They start getting smart.

One of the questions that I think would be worth asking, I would put one and then a second one; the first would be: As things become more interconnected, we may become resilient or we will become more vulnerable to disruption, whether from nature or from, say, cyber attacks and things such as that. So that would be the first question I would toss out.

And then, the second question I would say is ... Ten years from now; you know, we talked about how the iPhone happened ten years ago and nobody could have predicted the amount of impact it had. But now, let's fast-forward to the year 2027. So Pete, in your view, what are going to be those technologies that we are not currently focusing on that in ten years, we couldn't possibly imagine the implications that they now have ten years ago?

Pete Tseronis: Great! Now, I appreciate that [set up], and just a comment on … Before I go there, obviously, there are things that we will touch and feel. I think, personally, the autonomous vehicle is the most relevant thing that is cool, is scary, is exciting, presents an opportunity; because, why? It’s going to be something that we will; hopefully, at least I will; allow us to use and at the same time, it’s transportation. But what’s happening with the LIDAR that’s going to be on top of the car and the collection of big data and analytics; and making decisions; is where, in the weeds, what I like to call the “ping, the power, the pipe;” the plumbing of what’s happening behind the walls in the airwaves, in the frequencies, and the radio bands where I think, to your point, David, the opportunity and the vulnerability, that tension exists.

And I think that in ten years, we will have a much more mature infrastructure; that ping, power, pipe; that’s needed so that all these applications that are advancing much faster than the infrastructure behind the walls will catch up. And, for me, in the energy sector, or at least in the energy sector, we’re talking about synchrophasors and microgrids, distributed energy generation; how do you ingest or connect the renewable fuels that could be your car, your home, a solar panel on your roof for example, in addition to just some stations that are leveraging these new technologies? And that all has to happen.

Now, what is happening today, as a testament to the backdrop of my time at the department of energy, the national laboratory infrastructure, which are national laboratories, not just energy laboratories; and the international community […] working on this integration, which will afford the opportunity … Let’s not lose sight of the fact; and again, I want to go back to David’s point, and for those listening; the Internet of Things, which is something I think most of us can relate to – it’s our smartphones, it’s being connected all the time, having access to information. The beauty of the future is machine learning, artificial intelligence, the latest buzzwords in the technology communities, will allow us, as consumers, as business owners, as operators of this new generation or next-generation infrastructure, as a federal government and international community to advance the innovation necessary because today, the power grid in our country is a century old.

And whether you want to throw terms like SCADA Industrial Control Systems and so-forth, that power, that ping, that infrastructure, those pipes, they work. You flip the switch on, you want the light or the heat to turn on. But when it doesn’t, where do you turn? And in the future, hopefully, you will have information in a more predictive manner: weather changes, what could happen if the storm’s coming …

So, I believe there’s an opportunity in ten years. Yes, we’ll probably be driving in autonomous vehicles. We probably will have smart meters. We will enjoy using our smart device; not so much our phone anymore; to control things. We see commercials today about, “Hey! I forgot to turn my AC off when I went away for a month, [or] close my windows.” The beauty in the application of the touch and feel of these innovations, I think we have most of those today. It’s, again, the infrastructure microgrids, smart, secure infrastructure from the standpoint of new substations, leveraging drones to protect the physical capabilities.

But, just in summary, I think that how we learn to store energy to deal with the supply-demand matters, which we all know in the energy sector, we use it, we consume it the minute it’s available. Fossil fuels have been that power for us for years. Renewable fuels, alternative energy, has nothing to do with what side of the fence you’re on, they are going to be integrated and it just enhances the complexity of the grid.

Michael Krigsman: This issue of supply and demand seems to be a fundamental driver, especially if we look at alternative energy. And, we also have a question from Twitter relating to this from Gus Bekdash, who makes the comment, "Much innovation outside the energy sector was motivated by expensive energy and so, can cheap energy reduce innovation in other sectors?" So, supply and demand have this impact both directly on energy, as well as innovation across sectors, including outside of energy. So, what are your thoughts on that, David?

David Bray: Yes! And that's a great question from Twitter. I mean, clearly, as Pete mentioned, we're dealing with an ecosystem, an energy ecosystem that is not monolithic in nature, and not simple in nature. I think if you'd ask people ten years ago about what was going on with energy trends, energy was seen as increasingly scarce, where it was talked about what was called "peak oil" at the time. There were concerns about that. And here we are now, ten years later, where through a variety of methods, it does seem like right now, for North America, we've been able to address some of our energy consumption needs that have brought down the price.

The question is how long-term is that? Is that a five-year blip? Is that a ten-year blip before it goes up again? Or do we find new technologies? And as that question asked, as the price goes down in energy, there is less money or less incentive for other entering technologies to enter that are more expensive at the moment.

That said, I think there are still innovation opportunities. And, sort of to circle back to what Pete was talking about, right now, it's pretty much a model where homes receive power from a source and they use it on demand. And if it's disrupted, it's disrupted and you don't have power in your house. Most of us don't have backup generators, much fewer batteries of our own that are storing power […] if we lose power to that source, it can run on the battery.

But we know through Tesla and other companies that are looking into battery innovation; that storage capacity issue; it could very well be ten to fifteen years from now, homes are being outfitted both with batteries to store their own power that they're actually producing themselves, whether it's from smart materials on their roof. I wouldn't be surprised if the future is actually some of our road materials may actually when a car's not driving over them, maybe collecting energy from the sun when a car's not driving over them.

So, we need to actually think about the future being completely different from a supply and demand where a central source has energy and it’s sending it to your home, it may very well be your home, your car, but also energy producers and energy storers of themselves in the future, and then as Pete mentioned, how do we get them to exchange energy and power to where it’s needed in this much more complex, adaptive system?

Pete Tseronis: And if I can just comment, David can just probably riff off of that comment; terms that we hear: "resilience," "flexibility," obviously "sustainability," with energy-efficient renewable resources; that's the plan. That's the big picture. The devil is in the details, to David's point, whether it's a power wall with your Tesla being charged in your home, a solar panel on your neighbor's roof; how that stores energy. And that's where a lot of the innovation, for those on the call who are really in the weeds, working […] to create solar panels that can store energy we can use later to deal with the supply-demand challenges that Michael brought up.

That’s the beauty of what’s happening in the R&D community is, as we consume and use energy, those that are frankly the consumers who don’t really care if the light’s on and how they turn on, that’s the infrastructure that we’re building in our country that takes advantage of maybe one day, not just our nation-state, but other nation-states because of the R&D being done in parts of the country that have poverty to deal with. And, it’s on 24/7 or round-the-clock, and how to capture and store the energy to be used at a later time.

And so, let's remember in this conversation, if nothing else, that there's no shortage of cool tech that's going to get us to where the Internet of Things makes sense. It's integration. And, [the] energy security and energy storage that is really the [...] the problems that we're tackling behind the scenes. And I think, big shoutout to all the academics and folks and frankly, entrepreneurs in the garages around the world who are trying to solve these problems.

Michael Krigsman: Let me introduce a couple of other threads. So, again, I want to thank Singularity University for underwriting and participating in the preparation of these topics. And so, let’s suppose … So, here’s thread number one. Let’s suppose that solar power costs fall to the point where energy is almost free. Does that eliminate energy policy challenges? Or, does it just create new ones? And then, again, Gus Bekdash on Twitter comments, “Fossil fuel prices are very sensitive to demand. And so, during the transition to renewables, prices will collapse.” And so, what are the impacts of that? I think the broader question from both of these threads is as energy prices fall to zero, what happens? Do the policy issues simply go away? Evaporate? What goes on? Maybe David, you can hit on that one.

David Bray: I'll go quick and then I'll let Pete take [it]. And then I would say, I think it was Scott Adams who said that there are two ways to predict the future. One is through Ouija boards and crystal balls and the other one is feeding facts through a computer; but in either case, a complete waste of time. These are predictions of the future that are simply extrapolating trends that may not be exactly what happens. So don't hold me to years from now and the future's not exactly what I predict.

Michael Krigsman: But we’re taking notes, David. I mean, we have our little notebooks anyway.

David Bray: Yeah, and the Internet Archive forever!

Michael Krigsman: Exactly! Anyways…

David Bray: So, I do think that we are seeing improvements in solar technology such that prices are getting cheaper. It’s getting more effective. I don’t know if it will get to zero, per say, but it will get that we will start having more abundance of solar power.

That said, I do think if you look at past policy, future […], present success is [to] set yourselves up for future failures. For example, the good news is the US rolled out the internet to the world. That was great. The challenge is now we have cybersecurity threats. And so, we should not be surprised if the success of reducing the limitations of solar power to the planet will create second and third-order effects that we haven’t thought of. For example, maybe people can start running server farms that allow them to do massive DDOS attacks, and then now, we have another issue. That said, it doesn’t mean we shouldn’t try for that success, it just means that humans are complex, adaptive systems. What we do are complex, adaptive systems so there will be more challenges.

On the fossil fuels, I don’t know if I get that fossil fuels are going to crash completely in price. I do think that there maybe are other things that will start to supplement fossil fuels, but let’s recognize fossil fuels are also good for plastics, cosmetics, and other activities as well. So, it may be that they are being used less to produce energy, but they may be used for other chemical activities and other structures that we need as humans.

I do think there’s going to be a challenge, though, because as mentioned, all these things are subject to disruption, whether they are from a hurricane, an earthquake … If you’re in a city that’s running solar power and it turns out that there is a massive earthquake that destroys all the solar power panels themselves, how are you going to get power to that in the interim? If there’s a war, if there’s strife, that too, as well.

So, I think that gets to what Pete is talking about with resiliency, which is how can we have resiliency both from natural events with the grid, as well as from human-caused disruptions or institutional disruptions, right?

Pete Tseronis: Yeah. I’ll just chime in. This discussion about if it goes to zero that I think it comes down to choice. I’m going to harp today on grid integration. Fossil fuels have been dominant and my bet is they’re going to be extremely dominant. Why? Mostly, they’re easier to transport, and they're easier to store than alternative fuels today. They just are. And, the innovation happening in the alternative fuel markets; price-wise alone, at any given time, to David's point, there’s an act of God that occurs. You know, matters like the weather, incidents that we can’t predict that just happen, the concept of having, “Oh my gosh, that’s a region of this country or the world that relies heavily on fossil fuel. Oh my gosh!” Today, it’s, “Well how could we make sure that those lives aren’t disrupted by having an integrated grid?”

So policies and incentives for companies to not make it an either-or, regardless of the price, I think the option needs to be there. And I think […] I can tell you from my visits to several national labs, most notably the one up in the West Virginia-Pittsburgh area […], the National Energy Technology Lab, which does a ton, an amazing about of research and development in the fossil fuel space. Hearing the stories of how those academics and researchers when Fukushima happened, how they were reached out to, and essentially, traveled to Japan and understood how here’s a country that was all-in on nuclear power but immediately, something bad happens. And an interest in fossil fuels, natural gas, hydraulic fracturing, overnight becomes something that says, “Hey. Maybe we should be prepared for scenarios where we have a choice.”

And I think that’s what it comes down to. So, I’m going to leave it there, versus getting mired in the fact that, hey, as a current stream, policy regulation incentives, there’s a whole opportunity as we have more options out there for everybody. But for now, look. Fossil fuels, they’re available, transportable, and we can store them. Renewables, exciting, brings more opportunities for us, maybe it makes you feel better about wind, or solar, or biomass, or what-have-you, biofuels; but it’s about options. And that’s what we want, I think.

Michael Krigsman: And you know, it's interesting. Alternative fuels not only make you feel better about other sources of energy, but they're positioned to make you feel better about ourselves; which is a psychological dimension of all this, that I suppose is linked, in some ways, to the policy dimensions. And so, it's not just a matter of the attributes of fossil fuels being easy to transport, easy to store, but there's also this set of policy implications that have a significant impact as well, right?

Pete Tseronis: Yup. Well, if I could just jump in for a second here. There’s something interesting here as we’re diving into the energy sector and back to David’s point. And I think I couldn’t agree … I agree one hundred percent. The energy sector, I would say, is critical to the other fifteen. The energy, water, food nexus; and they all happen to be three of our critical sixteen infrastructures; that relationship opens up a whole other discussion from a policy standpoint. From a potential […] of standpoints, and a subsidy standpoint has an opportunity for business to enter this market.

And so, when we talk about making changes and introducing alternative fuels, whether you feel good about using wind power as your supplier from a generation standpoint, or how it impacts the pump when you're pumping gas into your car, you're using gasoline today; or thereabouts on a hybrid vehicle. It didn't get really complex on the policy-regulatory side, but we're at a point where we don't want that to stifle the innovation because, as David said, the opportunity, while introducing vulnerabilities; and we haven't gotten to cyber security and energy security yet, because when you talk IoT, you have to get to that point. Let's just accept the fact that there will be a natural, I don't know if it's "tension," but a necessity for regulatory and standards bodies to do what they need to do, because we're seeing this integration not just on ping, power, pipe, but of sectors themselves which each has their own stovepipe or cylinder of excellence view of the world.

Michael Krigsman: So, David, we don't want public policy to stifle innovation. I suspect that's a topic near and dear to your heart.

David Bray: And darn all those government people and why do we have them, is what you’re saying? [Laughter]

Michael Krigsman: [Laughter]

David Bray: I think … and Pete is a wonderful example that I hope to embody too; there are plenty of positive change agents that are trying to carry the balance of thinking about the good of the many, the nation, what happens to those that lose power, lose energy; that multiple people are trying to weigh these different calculus demands, and yes, we definitely want transformation and innovation as well. But there’s also the dimensions of the security, safety, and I think that, to me, gets to why public servants exist. I mean, public servants in my mind exist to help address those things that we can’t do by ourselves individually.

Now, there are two interesting possible futures to consider. One is that what we've seen in the information space that things are increasingly getting to levels of one. Personalization of one. Now, that's in the information space, not the energy space. But it could be in the next ten to fifteen years that the technologies allow you to produce your own energy, at least to be carbon-neutral or energy-neutral when there's not a disruption; that when there is a disruption, or when there's an earthquake or something like that, you have to pull from another source. That may be an empowering model that says we're going to sort of distribute and decentralize energy production to give you more choices, as Pete mentioned.

Now, the other thing, though, is that we’ve been talking about energy sources but there’s a whole other side of this conversation which is that of energy efficiency. We might not necessarily dramatically transform the different sources that we’re actually pulling from, but if we can get our electronic devices that consume power to be more energy-efficient, that will be transformative by itself as well.

And the good news is as microprocessors get smaller and smaller, they do get more and more efficient. Now, the downside is there’s also more and more of them so it’s sort of a net balance, but if we can more focus on the energy efficiency, that might be an easier thing to tackle than trying to address sources, per say.

Pete Tseronis: Michael, can I comment on that? Or again, build off of David there? I think that's a great segue-way as we accept that there are policy and regulatory matters and there's technology. But you mentioned early on, Michael, about exponentially growing technologies, i.e. artificial intelligence, materials science, and robotics, and the like. That is what I believe David just eloquently teed-up, and that is if we can be more efficient and predictive, and prescriptive, in the management of energy; I don't care what source it is, right? But, predictive algorithms to balance grids, negotiate self-healing networks, these are the terms a lot of the folks in the information sharing analysis centers that I have the fortune of pep-talking now and again. Whether it's in the case of a bug or a hack or the consumption and production figures, that's the beauty like a self-driving car, an autonomous vehicle, is going to be available to us as not so much as consumers, but the introduction of relying on technology to have 24/7 monitoring of this balance that's needed so that we can have energy on demand. That we can drive autonomous vehicles. That we don't worry about three days of no power after a snowfall.

That’s, again, maybe ten, fifteen, maybe not even that long; that’s a very exciting discussion. If we move from critical infrastructure to integration’s important. Yes, policies need standards and regulatory bodies have to do their job. But the exciting part of having real-time, 24/7 information to manage these hundreds of billions of devices that David pointed out, not just in the Internet of Things, to those consumers listening, but those industrial internet of things, to use SCATA operators, your industrial control system operators; so you have information at your fingertips, which is what we really hope to be monitoring more so, real-time, anywhere, and know that it's secure because we haven't touched on it and hopefully soon here. The concept around information-sharing, collaboration on data, with data, to information safeguarding, which is how do we protect those information assets? That's a healthy discussion, which I think takes us into the cyber security discussions.

Michael Krigsman: Yeah. And actually, we have a couple of questions from Twitter. Several that I’d like to briefly get to. So, on this subject of collaboration, Sal Rasa is asking, “Can you point to successful examples of public-private collaboration in energy?” Either one of you?

David Bray: I’ll jump on one and then I’ll let Pete go, but the one I sort of think is …

Michael Krigsman: And I’m sorry to interrupt, but I’m going ask you guys to keep these answers relatively short because we have a lot to cover, and we have only a little bit of time.

David Bray: Sure! I’ll keep it really short. The example I would say is Energy Star, which was an effort to try and make it more visible to consumers. The energy consumption of their technology device or their washer or dryer, and by providing that visibility and how much you spend extra, it was less deficient. It turns out it was a market-driven approach that allowed basically consumers themselves to make the choice that drove to more efficient, effective technologies. And so that would be the one I raise.

Pete Tseronis: Yes. And, quickly, I have to give a shout out to my National Laboratory colleagues yet again. The Large Synoptic Survey Telescope, also known as LSST, this is the telescope that’s going to give us pictures of the universe in the future. And, if you just read about it, it is an amazing public-private partnership. Universities, academics, federal government, industry, to build and mount this telescope to take pictures of the universe and discover things that we can then use to cure a lot of these diseases and continue the R&D in their country. So, LSST represents a way of collaborating internationally, but also protecting a lot of that collection in the infrastructure ping, power, pipe behind sharing that data globally.

Michael Krigsman: And you said, Large Synoptic … and what was the third word?

Pete Tseronis: Yes. Large Synoptic Survey Telescope, LSST. It’s an amazing use-case that, on the scientific side, will not only, I believe, help us solve a lot of these challenges today, but it really represents what I think the question that our colleague there asked, which is are we really collaborating internationally? And the answer is, absolutely.

Michael Krigsman: And it’s also got a really interesting name. Large Syno … [Laughter]

Pete Tseronis: I like to say “LSST.” It’s a little cooler and quicker, but you know, it’s another acronym that both David and I know from the world of government. That’s what we live in, so…

David Bray: Yes. It’s a very secretive vocabulary. You’re now queued in, Michael. You’re now an LSST badge holder.

Pete Tseronis: Yes.

Michael Krigsman: I love it! I love it. And who would have thought?

Okay. We have another question. This one is from somebody who's watching on the Livestream platform. And this is Doug Natale, and he's asking, "When do we get to the point where energy is moved, shared, and stored where it is needed? And will Big Data help make those decisions through machine learning?

Pete Tseronis: So, to Mr. Natale, absolutely. I think the reference earlier to artificial intelligence is significant. And, the question is brilliant. Again, working at the Department of Energy, the term “Big Data” in government means something to each agency. I like to brag that at Energy, we really do Big Data. When you talk about the supercomputer and the high-performance computing platforms taking nothing away from my colleagues in the other agencies.

But, Big Data and the analysis necessary to extract value from data, which is essentially information, is critical to the future as we move into this modernized, smart infrastructure grid. And Big Data analysis, today, which is being leveraged in the national labs, Big Data doesn’t really mean something new to the national lab community, R&D community I should refer to…

But yes, short answer: Big Data analytics team with critical infrastructure needs and requirements and wants, and then the third leg of that stool being how do you cyber-protect that while the goal [is] innovation is critical. You can’t have one without the other. So, it’s significant, but yes. The analysis and the innovation to allow human-to-machine interfaces do that type of dialogue, if you will, or conduct that dialogue so that we can have the answers immediately, instantaneously, will drive the innovation of our country in this space.

David Bray: And, […] a real quick add to that; and I'll be really short because I know we're short on time, Michael; everything Pete said with the recognition that in some respects, what the internet is allowing to happen what the consumerization of technology is allowing to happen is for us to move to decentralize forms of energy production and of consumption. And, that model actually we’ve solved back in the 1800’s. So in some respects, we’re partying like it’s 1800 all over again.

Michael Krigsman: Okay. Moving on quickly, and I apologize. I really like to take the questions from Twitter folks that are watching. And Andrew, and I’m probably going to pronounce his name wrong, Andrew Zagorodnyuk … maybe I got it right. Andrew works for a drilling rig manufacturing company, and he’s wondering, “What about the future of the

oil and natural gas industries in the next ten years?”

Pete Tseronis: Well, I'll jump in. And again, [...] hopefully not sounding redundant. I think just as we're doing technological R&D related to alternative fuels, there is, as I mentioned at the National Energy Technology Lab in Pittsburgh and West Virginia, constant research into being into drilling, hydraulic fracturing. You go to the Idaho National Lab, they're looking at new ways to understand nuclear energy. Oak Ridge National Lab is building next-generation fission nuclear platforms. There is no doubt, and that's the beauty of these seventeen amazing crown jewels in this country alone that are internationally collaborating with other nation-states. You just need to check out and understand that there's a number of dollars or investment monies being placed into these institutions to drive innovation towards this integration of the grid.

Everybody sees the smart grid, "smart" meaning connected 24/7. And there is not one particular … The National Renewable Energy Lab, for example, is focused on a lot of alternative fuels. But, I hope that paints a picture because, again, we can just go down the fossil [fuel] channel, but know that the R&D in this country, where, give or take a couple billion, $150 billion or so are invested in all of this R&D so that we can get to the smart, secure infrastructure that will provide energy on demand in the future.

Michael Krigsman: Now, this issue of security that you had raised earlier, Pete. Maybe we need to talk about that.

David Bray: And how much time do we have, Michael?

Pete Tseronis: Yeah!

Michael Krigsman: [Laughter]

Pete Tseronis: […] Umm, we tee it up, David if you're cool with that. And then you go ahead and riff off. I think that it's … And this is very important and a great, great segue-way. Energy security, cyber-physical systems, these are terms that are used in the lexicon of the community that I've been running in over the last couple of years. But, [it] could be applied to any of the critical infrastructures of the businesses today and in the future. But as David introduced at the outset, if you get the Internet of Things, you get the smart grid. You understand it. You want to know that your privacy and your civil liberties are protected.

What's kind of exciting and scary, though, when you talk about cybersecurity as it relates to the energy sector, is the amount of data that today, is transmitting between SCATA platforms, between substations, between transmissions. So, for those of you who want a real quick … Energy essentially has three phases: generation, transmission, and distribution to your home, geographically dispersed. It's not different than a network. This is arguably the  most compelling network in the world. Our country's power grid. And, it's a century old.

So, the same cyber concerns that we have today as we contemplate the cloud, as we think about leveraging networks of networks, that’s where the opportunity to move from a very somewhat firewalled-off, air-gapped, environment we have today, which is very available, but to have that grid of the future; to have that connectivity 24/7, to have all the amenities of the smarter infrastructure, and I’ll let David kick it off now, here. We have the same concerns, and we should, about how do we […] safeguard the information needed to transport around at any given time?

And that’s when you get into the artificial intelligence. It’s the same challenge: social engineering, insider threat, make sure the data is […] and inspections are in play, and encryptions algorithms you have to think about… So, just think of this as cyber to the power grid is very similar to cyber to our business networks and the network in your home, but at a larger scale.

David Bray: And I'll just add real quick to that and say [that] Pete is exactly right that all the concerns we have with internet cyber security and internet privacy, and […], that’s also present on energy consumption. You can learn a lot about a person when they're home and not home based on their energy consumptions, and so we need to be cautious about what's done with that data because that might give your information. If the power levels are low, they may not be home, and that might make them a target to go rob the house. And so, there are huge ramifications about what humans can do with this, how they can disrupt it, and then there's two additional layers that make the energy grid even more challenging to deal with because not only is it the information associated with this, it is the fact that you can actually create real-world what I would call "physical" or "kinetic effects by disrupting these systems. And that can actually end up killing people, that can end up causing disruption in the property, and that's something that we don't necessarily always see in cyber security although we also see ransomware hacks that are actually affecting hospital systems.

And so, there's that dimension. And then finally, there's the dimension that information itself can be encoded in the energy itself. Now, this is still in the realm of research and development, but there are actual experiments in place that are trying to divert and deliver both power and the internet over the same current. Which raises an interesting question because there are cases where, you know, hopefully, most of us know that if we go to a place that's not familiar to us, we don't know who we can trust in that work, we may not want to plug in your most valuable data to that network because we don't know what's going to happen. But if in the future, you're getting your internet provided over your power, are you at risk because now you've plugged in your system to get power, but you're now also connected to the internet?

And so, these are the things that obviously have to be addressed through research and development, and they should scare us into not addressing the future. We should embrace the future. But, we should do so knowing that there are going to be challenges that need to be solved.

Michael Krigsman: We're clearly not going to solve these problems today. But, in our last couple of minutes, I'll just ask each of you for your final thoughts or you're kind of summary thoughts on what are the key challenges or the key conflicting issues that we face in regards to energy? So Pete, maybe we'll start with you. What are the kinds of conflicting issues that we face right now? What makes this stuff so hard?

Pete Tseronis: Yeah, I don’t know if it’s hard. I think it’s those stakeholders whether you’re a C-level executive for a utility, if you’re president of a country, if you’re the owner and operator of a substation, if you’re a country that doesn’t have power today; people are still cooking on fires and, you know, makeshift stoves. Technology is key to the global energy future. No doubt. Absolutely it will be the underlying ping, power, and pipe.

I think that the energy source discussion can be mired in one better than the other, and that’s again, something that I find personally having worked at the Department of Energy for as long as I did, and being exposed to that can really stifle a discussion to accelerate the transfer of a lot of the technology that is being developed in our national labs, for example. I think whether you’re in Asia, or India, Indonesia, or South Africa, we didn’t talk about globally, where certain parts of this world are advancing the implementation of some of this alternative fuel energy that we could learn from. And that’s where collaboration, just how are you doing it in Africa? How are you doing it in China? What’s different in India today when it comes to how the integration in your country is leveraging a power source?

Because the big picture is we want to have a supply-demand ecosystem for a supergrid, is what I've read about as a […], that can be there for everyone. Because, this is where putting on my human hat, human being, you know, caring about the greater good; we can't operate in silence and I think that's still where we are. Regionally, internationally, there's no shortage of people trying to discover opportunities for investment. But it's a sad state when there is something that's been invented as sitting on a shelf in a lab somewhere in this world, and we get mired in the legalities and policies of licensing that for allowing it to be released to the public so that greater good is realized.

So, I want to finish with yes, cyberthreats are important. Extreme weather risks, supply-demand issues … Technology's not the problem; policy is a necessary thing that has to happen. It's when will that community, that global community of true influencers and folks who can say, "Look, this affects all of us at all ends of the Earth." And […] we have to build a smarter grid for our world, will we see, I think, a very bipartisan discussion evolve.

Michael Krigsman: Fantastic! And, it looks like David Bray, you're going to get the last word. And so, if you want to summarize all of energy policy technology and investment in sort of a tweet-sized byte, now's your chance. If you ever wanted to do that, now’s the time.

David Bray: I appreciate you dropping the mike on me, Mike! So, I would say what makes the United States great is we are a plurality. And we can do great things when we get what's being done in the private sector in alignment with what's being done in the public sector with nonprofits and individuals. But that's the big challenge is it takes a compelling narrative and a working towards shared goals to get everything in alignment. And, it's okay if they're not in alignment. And right now, they're not in alignment, which gets to what Pete is saying. That's the hardest part is we need people going in different directions; sometimes there’s bickering. That is the challenge.

Now, it would be easier if, in some respects, we were an autocracy and some nations are, and they’re able to have basically the public sector and the private sector in lockstep because they are backed. I don’t think that’s what we want to become in the United States, but that is our challenge in this exponential era is how do we remain a plurality that allows the private sector to be independent and do what it wants? The public sector, individuals, and nonprofits, how do we move forward together in that challenging era? And so, I hope that maybe, we can find a compelling narrative and those shared goals that as Pete mentioned can be a bipartisan conversation and can be a conversation that's across borders.

And I'll end with one sort of thing to think about the future: Ten years ago, you talked about delivering power over WiFi or over the air. People have said that's not possible. You know, microwaves are going to nuke somebody, it's not going to be good. We're beginning to see early signs that as technology gets small enough, and we're talking at the nanoscale, you can deliver power over the air, over some distance. And so, I'm hopeful that maybe ten to fifteen years from now, we'll be talking about how neat it was that we had plugs in our homes. Maybe it's a little bit ambitious to say that, but I think that's what we needed to think about is the world is going to be changing before we know it. The question is whether we, as a country, are getting our public sector and our private sector and our nonprofits doing it together, or are we a house divided?

Michael Krigsman: All right! What an amazing discussion on exponential energy! We have been talking with David Bray, and Pete Tseronis, and you have been watching Episode #242 of CxOTalk. Thank you so much to Singularity University for underwriting this episode, and tune in next week. Go to CxOTalk.com and you can see our upcoming episodes. Thanks so much, everybody, and have a great day.