Freight Efficiency with NACFE's Mike Roth and Friends. In episode 61, we have joining us Jigar Shah. He's senior director of the Loan Programs Office at the United States Department of Energy, where he explains what's happened over the last 10 years with decarbonization, the need to crack the code to deploy technologies faster, getting people past the valley of inertia, the history and goals of the DOE's loan program, and measuring the program's success. He also encourages the industry to be more vocal about what it needs from the Department of Energy.
Today, we have joining us Jigar Shah, who is the director of the Loan Programs Office at the United States Department of Energy. It's a real pleasure to have you on today. I'm really excited about our time together here.
Well, it's great to be on your podcast and obviously great to see you again.
Yeah. So, we named this podcast Freight Efficiency with NACFE's Mike Roth and Friends. And we sort of did that intentionally because we wanted it to be a very, you know, casual conversation with somebody I know. Do you recall exactly how we met and became friends, Jigar?
Well, I think we met through my work at the Carbon War Room, and when we looked around for the smartest person in the entire country on freight efficiency, your name popped up, and so we were like, we should bring Mike into the fold, and we worked closely together after that.
Yeah, yeah. You're too kind. I, at the time, well, a few years before that, NACFE was born out of an RMI workshop, Rocky Mountain Institute. We, Ned Harvey and I, came to, I think we were calling them Creating Climate Wealth.
Yeah, our Creating Climate Wealth conferences. Yep.
Yeah. So Ned and I joined one at Nationals Stadium in Washington, D.C., and I think that's actually the event we met at. So, yeah, that goes back a ways. You're too kind, though, with your compliments. I'm always in awe of how deep people have really gotten into some of these sectors. It really is breathtaking and, frankly, required. I mean, if you're going to make change at the gigaton scale level, you got to have that level of detail.
Yeah. And I find with us, the work, you know, the credibility that we had when we started and continue in the trucking industry and freight is really helpful to help lead some of these conversations. So, but before we get into your work today, let's go back 10 years. Let's go back to 2012, and maybe you can go first and then I might add it as well. I mean, take yourself back to 2012, and then kind of let's do an assessment of what happened over the last 10 years. I mean, what areas might we have gotten, you know, gone pretty well in decarbonization, and where are some other areas that we wish we got and thought we could have gone farther?
Well, look, I think that in general, the thought process 10 years ago was not really around full electrification. I think the thought process was a lot more around efficiency and figuring out how we could really double the efficiency of, particularly, you know, Class A trucks, but lots of other things as well on the roads, and then how we do, you know, multimodal support. So we could try to take a lot more volume off of trucks and put it into rail and all those things. And I would say that on balance, I think we've been quite successful in all of those areas. I do think that particularly on the retirement of old trucks, I mean, the new ones that have come in are quite a bit more efficient than the old ones that retired. And I do think that on the margins, I mean, COVID notwithstanding, that there was a fairly good effort to debottleneck multimodal so we could move a lot more freight by rail.
Yeah, yeah. And then, you know, about midstream in that decade, I would add, is when, you know, the electrification of trucking sort of made its way. I mean, I remember standing watching Elon Musk. I mean, I was at his event, and sure, you know, that just sort of broke free a bunch of skunk works projects that were already going on around electric trucks that even I didn't know about. You know, the Cummins and the Daimlers and, you know, Volvos and all just kind of came out of the woodwork, as well as a bunch of other startups. So, you know, I've always loved your passion, and, you know, you're super smart around all these things and these solutions when you think about investing and so forth. But take us back through your career a little bit, and sort of what drove you to the work you're doing now, so that we can get a sense of where you've come from.
Yeah. Well, I mean, look, I appreciate that. I have always been in awe of the technologies, right, that we have invented, not only the entrepreneurial effort but also the effort that the Department of Energy has taken in helping with funding a lot of these things. But it's always been a real consternation of mine that these technologies never seem to make it into the market fast enough, and so we end up having to wait for 15, 16-year sort of replacement cycles before we can get them into the field. And my career, you know, I've been thinking about solar and nuclear for a long time, probably when I was 16 years old. And, you know, my first job out of college was working at Atlantic Orient Corporation, which was a wind turbine company, and then I, you know, worked at Energetics, supporting the Department of Energy as a contractor, and then went to BP and learned a lot about that, and then, you know, started Sun Edison. And, you know, Sun Edison was really around figuring out how you do pay-as-you-save financing so that people didn't have to pay the upfront cost. I mean, and so I would say my career largely has been around how you take technologies that are really worth deploying at scale and figuring out the micro issues with the private sector and the adoption cycle to figure out how to really move that a little bit faster.
Yeah. You know, when we first started looking at trucking and freight, we created a benchmarking, a technology benchmarking, where we continue to this day to draw adoption curves of all kinds of technologies around energy efficiency. And now, you know, we're even looking at solar on tractors, solar on trucks and trailers. And it becomes pretty sobering when you look back in history and say, wow, it took 10, 15 years to scale to a saturation point of some of these technologies. Some of them, efficiency, it could be other things, safety and other types of technologies. Just look at it and go, why did it take so long? But I guess that's change. And some of these changes are pretty significant. And moving freight's one of those things that, you know, we all expect to be perfect all the time. You know, we want the exact pair of jeans that fit us, or the right coffee, or the right thing in the stores. And so I guess there's a little bit of risk around change there.
Well, I like to think that it was the freight industry's fault that the jeans don't fit me, but I think it might be someone else's fault that jeans don't fit me. But I think, look, I think in general, when I worked as a contractor at the Department of Energy, we had this thing called the Clean Cities program, and it's what we used to, like, test out, you know, electric buses in Chattanooga, Tennessee, and, you know, dimethyl ether or dimethylthoxy or lots of other fuels in trucks and things around the country. And, you know, people say all the time, right, that change never comes fast enough, like, you know, year to year, but then when you look back a decade, it's amazing how fast you've changed. I would say that we still haven't cracked the code on how we move things faster during an emergency. Like, I think when you think about right now where the cost of diesel is really high, and the amount of technologies that we have that have already been fully piloted by NACFE and others over the last, you know, seven years is a very long list. One of the things that I struggle with is there's a lot of people saying, 'Well, I don't know if I want to deploy those technologies because I might be moving to electric trucks in three years.' I just don't think they're all going to move to electric trucks in three years. And so then the question is, how do we get people past that inertia? Because we have technologies to cut their fuel consumption by a third. We have them right now. We've already piloted them all. I mean, even those solar technologies, I mean, hell, I was working with some of those companies in 2014. They fully piloted them. I mean, it costs over a dollar a kilowatt hour to take electricity off the engine. It's a lot cheaper to put solar panels on the top of some of these trailers. It's a lot cheaper to generate power than a dollar a kilowatt hour that way. But I really do think we have a deployment problem in these times of crisis where, you know, folks can't automatically make a decision to move.
Yeah. Well, many of those technologies you're talking about do switch over and continue with electric trucks. And I would submit, and we've talked about this a lot, studied it a great deal, is that they're even more important on electric vehicles. Now, you don't have the fuel savings because the percent of fuel cost per mile is much lower with electric, but what you do have is a range extender. So, if you get the right tires and you drive the truck efficiently and so forth, and you get that 30 or 40%, you're talking about 30% less battery is a make-or-break for these electric truck adopters. So, yeah, I want to get into the loan program. So, tell us about that, tell us about that, its history, and what's your goals right now?
