Episode 22: Daniel Poneman of the U.S. Department of Energy and Centrus Energy

Host Cortney Piper interviews Daniel Poneman, former president and chief executive officer of Centrus Energy Corporation, United States Deputy Secretary of Energy and chief operating officer of the Department of Energy. He has worked for three United States presidents on issues ranging from nuclear nonproliferation to clean energy. 

In the interview, Cortney and Daniel discuss his long career and mission to champion an all-of-the-above energy strategy. The episode includes stories and behind-the-scenes tidbits you won’t want to miss.

Learn more about TAEBC and Daniel.

Transcript

Cortney Piper: Welcome to Energizing Tennessee, powered by the Tennessee Advanced Energy Business Council and FirstBank. We're your number-one podcast for news about Tennessee's advanced energy sector. I'm your host, Cortney Piper.

Today's show features a special guest. Who's worked for three United States presidents on issues ranging from nuclear nonproliferation to clean energy. Daniel Poneman is a man of many talents and titles who's championed in all of the above energy strategy while serving as the Deputy Secretary of the Department of Energy, and President and CEO of TAEBC Member Centrus Energy, an iconic company tied to the World War II era Manhattan project.

He also practiced law for nine years in Washington, DC, and published three books on national security issues. Keep listening to hear our conversation, which includes stories and behind the scene tidbits from Daniel's career. 

And as always, if you like what you hear, subscribe to our channel, and don't forget to leave a rating or review. It helps us reach a wider audience to champion Tennessee's advanced energy sector.

Energizing Tennessee would not be possible without the support of TAEBC members and our sponsor, FirstBank. To learn more about FirstBank and how they can support you or your business, visit FirstBankonline.com.

Today on the show, I'm speaking with Dan Poneman, former President and Chief Executive Officer of Centrus Energy Corporation and the Former Deputy Secretary of the United States Department of Energy. Between April 23 and May 21, 2013, he served as the Acting Secretary of Energy. Dan, welcome to the show.

Daniel Poneman: Thank you for having me. 

Cortney Piper: Of course. Now, Dan, before we really get into it, I want to take a walk down memory lane because I first met you in 2012 when the state of Tennessee and the University of Tennessee were cutting a ribbon on the West Tennessee solar farm in Haywood County. At the time, it was the largest solar farm in the state at a whopping five megawatts.

Do you remember that? I mean, you must've gone to a million of these things, but do you remember your time in Tennessee? 

Daniel Poneman: Oh gosh, Cortney, I spent so much time in Tennessee. Most of the time I spent was, of course, in East Tennessee, mainly Oak Ridge and a little bit at Knoxville. That was memorable for me for a couple reasons.

I'd never been to Memphis before. That was where we flew into, and to see that it's not just localized in the eastern part of the state but that the ecosystem that was so supportive of energy innovation was just as vibrant on the West side of the state. And I've always been an all of the above person.

And so East Tennessee, I always think of in terms of our nuclear excellence there. And then around that same time, I was in Smyrna, Tennessee, more in the Nashville area, we did a battery factory and then that was my one big renewable play in terms of solar was at that event. And I was really happy to see you there. And I'm happy to see you again. 

Cortney Piper: Great. And you know, I'll tell you a little update on that region and Haywood County, where the West Tennessee solar farm is. That is where Ford recently announced its BlueOval City facility. So this is where they will be hiring 6,000 people to build the Ford all electric F-150 as well as their battery manufacturing plant.

So that legacy and that advanced energy sector continues to grow and flourish in West Tennessee, which is just absolutely wonderful. 

Daniel Poneman: That's outstanding. 

Cortney Piper: And I'll share one more story before we actually move on to why we had you on this podcast. I don't know if you remember this, but we were planning for that ribbon cutting.

It was a big ribbon cutting press conference for the West Tennessee solar farm. And I think it was someone from your team that said, Hey, before we do that, the deputy secretary would really like to do a round table with some clean energy business leaders. Do you think that's something we could get together?

And I said, Sure. Of course. Absolutely. I mean, I knew we had the people. And I remember I went to the general contractors who were on that site that was building that facility. And they said, Cortney, where on earth do you think we're going to host the deputy secretary of energy? We are in a rural county in West Tennessee.

And I looked around, and I was like, well, that construction trailer looks pretty nice. And they said we cannot have the deputy secretary of energy in a construction trailer. I said, listen, you know, it'll be fine. We mop up the floors. We'll clean off the tables and chairs.

It'll be great. It'll be intimate. It'll be wonderful. Be authentic. It'll be fine. And it was fantastic. I remember we had a lot of people from Schneider Electric, FedEx, all over came to that and just had the opportunity to sit and chat with you and talk about what we have going on in Tennessee with advanced energy.

Daniel Poneman: The best sessions were in trailers. For sure. Who needs another fancy conference room in some hotel in an anonymous metropolis? 

Cortney Piper: Exactly. You've seen 'em all right? 

Daniel Poneman: It's much more memorable. And it was great, but it really goes to show Tennessee has been such a magnet for both innovation and the investment dollars that support it. I had the opportunity to be with Senator Hagerty and some of the people from SK Group, and probably aware they've made huge investments in this country and in Tennessee, and it's because it's such a supportive environment between the community support, which is incredible, and then the political support right across the aisle. You know, my good friend Congressman Fleischman gets along very well with the Mayor of Oak Ridge, and the fact that one's a D and one's an R doesn't really get in the way in the fact that everyone's for the country and everyone's for Tennessee and everyone's for clean energy.

So it's a great part of the country. The only thing is, when you're in such a good part of the country, everyone wants to get there. And then it gets a little crowded, but that's what my late father would call a high class problem. 

Cortney Piper: It is a high class, and we're happy to have it. It's better than the alternative.

All right, Dan, you have been dubbed a renaissance man of the energy sector, and I want to talk a little bit about that. I would love to reflect on your career and some of your major accomplishments and highlights. So, what are some of the highlights of your career? What are you most proud of? What really stands out to you?

Daniel Poneman: Well, I don't want to argue with the premise, but I don't know. I would say illustrious. I've been lucky. I would say I've been fortunate, and I've had a series of lucky breaks, really. And I think a lot of life is like that. But really, one of my first breaks was when I was a freshman in college. I had intended to go into oceanography, and turns out there's a lot of science, and my aptitude was maybe not what it could have been.

And I then took a class in international relations, which turned me on to this whole new world. So I got a summer internship in short for my home state, Senator John Glenn, our hero astronaut, the first American to orbit the earth. And I ended up working on nuclear Non-Proliferation and ironically, I mean, this is crazy in light of this podcast, but one of the first memos I wrote, this is Cortney, this is 1975, was on the interaction between, I'm not kidding you, TVA electricity rates, natural uranium prices, and uranium enrichment tails assays.

Cortney Piper: Wow. 

Daniel Poneman: Basically, I got hooked in 1975, and it has been sort of a centerpiece of much of what I've done in and out of government ever since. That really put things in a different direction. Then led to the first book I wrote was about nuclear power in the developing world. And one of the countries I studied was Argentina.

And that got me interested in this country that had been in the top 10 in the world and per capita income in 1930, and now it'd fallen apart. And so I then did another book on the transition to democracy because when I finished law school, they had just gotten rid of the military after the Malvinas war.

So that was fascinating. And then I guess, you know, the next lucky break I got was as a practicing lawyer, which I actually was not super enthusiastic about having gotten into it. I found that my curiosity sort of ran out before my responsibilities did. So I was very happy to get a White House fellowship, and that took me to the Department of Energy and that took me to the National Security Council under President Bush 41.

And that was a fascinating experience. And I actually was one of very few who stayed at a senior level of the National Security Council when President Clinton was elected and I became the first special assistant to the president for nonproliferation and export controls. And I think during those years, we basically extended the Nuclear Non-Proliferation Treaty, which was about to expire.

We extended it for eternity, which is a mainstay of our global efforts to stop the spread of nuclear weapons. We negotiated a deal with North Korea to stop their Plutonium production, and we were very happy to do that. There were lots of things that went sideways afterward we could talk about later.

So that sort of takes me through NSC years, and then I had the opportunity in 2009, as you've already mentioned, to come back to the Department of Energy, where I'd been a little kid. A couple of decades before, as a deputy secretary, and I guess there, I would say I was very proud, and I'm glad you mentioned the solar farm to really work hard. I got a bunch of these tombstones behind me on the loan program. We got under deadline of having the funds evaporate on   September 30, 2011, I guess it was, we got $30 billion out the door, supported Tesla, supported the biggest wind farm in the country, got solar PV going, which never existed at grid scale.

During those years, we worked hard on improving the department's work on storm response at Superstorm Sandy. We were working 7 24 for weeks and months on end to address the Fukushima crisis. So there've been a lot of memorable events along the way, and it's been fun. 

Cortney Piper: So, if I've counted correctly, you've worked across three or four administrations?

Daniel Poneman: So I worked for President Bush, 41, President Clinton, and President Obama. 

Cortney Piper: Okay. So, three administrations, what were the differences in how they approached energy policy, both, you know when you think about nuclear non-proliferation and sort of our advanced and emerging energy sectors, what was that like, kind of doing that over three different administrations in terms of their approaches and then how markets and innovations evolved?

Daniel Poneman: Well, candidly, I would say that the consistency was more striking. I have an easy time thinking of the consistency. I have a hard time, maybe because it was me doing the work and I was the same person, but I will tell you this. I worked for six years at the NSC. I was the longest survivor at the time that I left.

I was never once asked what my political affiliation was. Not once. Our line was his first name is, Mr. President, and we worked for the president, and I will even tell you a small I don't think I've ever mentioned this anecdote, but early in the Clinton administration, I was sitting in the White House situation room, and the Deputy National Security Advisor, Sandy Berger was chairing a meeting and somebody in the meeting made a reference to the administration, you know, the administration position is this, or that and Sandy says, stop, and he pointed at the American flag that was in the situation room behind the chair of the chair of the meeting.

And he goes, you see that American flag? We're the United States. And that became, for me, Cortney, a watchword anytime I was in government. And even when I was out of government making references. I never talked about the administration because I believe this is a core belief that we need, especially on things that we're talking about today, national security, energy security, we need to be bipartisan because these policies take decades to execute, and we have alternating parties.

I'll give you one, just small. It's even a slogan that I think attests to what I'm saying. One of the watch words of the Obama energy policy. Which I'm sure you remember it was all of the above. Well, if you look back at the recorded remarks of Secretary of Energy Dan Brouillette from the Trump administration, you will find that same rhetoric.

So I think in energy, there has been a real emphasis and just two quick words. I would note that both the Republican and Democratic administrations worked hard to restore our energy security through the development of our hydrocarbons. You know, we went from like 5 million barrels a day. I don't know. I think it got up to 13, and we're now the biggest supplier and natural gas exporter. And the nuclear is just as powerfully bipartisan. We had a bill passed the Senate on nuclear fuel in 2023, 96 to three. You couldn't get that kind of vote to say the sun rises in the east. 

So, the transitions that I personally experienced and I have the highest regard for the presidents I worked for. And every one of them, I think was a very strong supporter of the kind of energy policies. I think you and I would agree are the right course. 

Cortney Piper: Well, and I'm so glad that you shared those anecdotes because that's really why the Tennessee Advanced Energy Business Council was created. I remember when we first started this organization it was right after some of the climate and energy policies were being discussed in Washington, DC, 2010, 2009, sort of that kind of timeframe. And there was a group of businesses that had mobilized in the state of Tennessee to support those discussions.

And when that all ended, I thought, you know, there are a lot more of these companies in Tennessee than I bet anyone had ever realized. I wonder if they'd want to all come together under one banner. After we ran a lot of focus groups, consistently what we heard from business leaders and researchers and government officials was we don't need another organization that's going to debate whether a particular technology is clean, green, or sustainable, and that goes with the, all the above sort of approach where our strengths are as a state because we have TVA, Oak Ridge National Lab, and the University of Tennessee is energy innovation as a means to economic development and job creation.

 And so it's so good to hear some stories and those anecdotes coming out of the federal level because we're also seeing that at a local level too, at a state level as well. And I think energy is one of those issues that can really, you know, we can, we can find common ground on energy because it does provide a lot of opportunity and innovation and, everything that we just talked about. So, thank you for sharing those. 

Daniel Poneman: My pleasure. 

Cortney Piper: All right. Now, let's talk about your time as President and CEO of Centrus Energy. Centrus is a valued TAEBC member. You were there from 2015 to 2023. So, talk about some of the changes you brought about at Centrus during your time there. 

Daniel Poneman: Well, it was a great experience. And as a student of history. I just love the organization. I'm sure you know, this maybe not all of your listeners know, that Centrus Energy Corp., Which many people never heard of, was originally called the Manhattan Project. Literally, it is a direct descendant after the war ended. The Uranium Enrichment Enterprise which started in Oak Ridge, Tennessee.

You will know we're the ones putting the marbles in the bowl right in that big glass bowl, but that became the Atomic Energy Commission, and when the Atomic Energy Commission was basically split into the Nuclear Regulatory Commission and the Energy Research and Development Administration, ERDA. The Uranium Enrichment Enterprise from the Manhattan Project and the Atomic Energy Commission winds up in ERDA, which becomes the Department of Energy and was privatized in 1998 under the name U.S. Enrichment Corporation. After Fukushima, it went underwater and, frankly, went bankrupt. And when it came out that's when I was hired to basically restore it to profitability. And so the first thing I gotta say is the people there are just incredible. They're talented, and they're dedicated and they're patriotic.

But Chapter 11 is a harrowing experience for any company. And in the course of this, Basically, a lot of the longstanding commercial relationships were damaged, frankly. And so I would say one thing I did was work very hard to restore the confidence of our customers. The major U.S. utilities and I work, it was, it was, I don't want to call it hand to hand combat because that suggests it's a fight, but it was a very personal effort, at the CEO level, at the marketing level to regain the confidence of our customers.

Because as I said, these are long term investments, and people needed to know that we were going to be able to deliver in a trustworthy, reliable way, and to do that after coming out of a bankruptcy proceeding is challenging. So I would say that was a big one. And related to that, Cortney, there was a very challenged balance sheet, as you'd imagine, the finances of a company coming out of bankruptcy are fragile.

And the company had a huge debt that was coming due in 2019. Now, if you're a utility fuel buyer, and you're expecting a company to deliver fuel in 2023, 2024, 2025, but they have a potentially fatal debt maturity in 2019, you're going to be pretty reluctant. So, we restructured the balance sheet. We strengthened the balance sheet. We addressed the pension obligations, and that was very helpful. And then we restructured our supply contracts, which were frankly underwater. And we were basically generating massive losses for a number of years. And finally, after restructuring those supply contracts, we became profitable.

But to me, in some ways, the most exciting thing was after a huge gap from 1954 to 2023, we at Centrus. And when I say we. It was truly all hands on deck, all employees and their families, frankly, are part of the story here. We started the first U.S.-owned, U.S. technology uranium enrichment production line to launch since 1954.

Cortney Piper: Wow. 

Daniel Poneman: And so that felt like a nice capstone. I had never stayed any place that long and this was over eight years. But I really feel happy that we really strengthened the company. We made it profitable. We increased the market cap. By a factor of 20, and we started enriching uranium and you know, the national security as well as the energy security implications of that were something I think all Tennesseans can really be proud of.

Cortney Piper: It's huge. It's huge. We, especially in East Tennessee and throughout Tennessee, are very thankful for your leadership. So, thank you for serving in that capacity. Let's continue talking about nuclear energy and what your thoughts are on the future of nuclear in the U.S., specifically focused on some of the exciting developments we have coming out of East Tennessee.

Daniel Poneman: Well, it really is a moment. You used the word earlier in this podcast, renaissance, and sometimes people have referred to a nuclear renaissance, which I never thought was good karma. I always thought that was very risky rhetoric. And then sort of ratified my skepticism about the term that having been said in the nearly half century I've been working in this field, I have never been more excited about the future of this industry. The needs are enormous. And just to put this in some perspective in about April or March or April, 2023, the U.S. Department of Energy published a report that said for the United States to meet its net zero emissions objective by 2050 would require 700 gigawatts of new power generation of which 500 would be renewable and 200 should be nuclear. Now to put that in perspective, we have a little less than 100 gigawatts of installed nuclear today. And so that would mean in 25 short years to go from 100 to 300. That's huge. Meanwhile, as Stephen Colbert likes to say, we find that the tremendous electricity demands Generated by data centers and generative AI have just gone through the roof. And just a few weeks ago, Cortney, a new DOE paper came out that now says we need 950 gigawatts. 

Cortney Piper: Oh boy. 

Daniel Poneman: You know what that means? And now if you want it to be clean, you're going to have to have nuclear. And so to me, I think that means both small and advanced generation, but I think big reactors coming down the road, people are a little bit traumatized by what happened at Vogel, but I think that the learning curve is a steep one.

And I think having now built a couple, I think the next ones will come better. And, you know, in terms of East Tennessee, I have to just give a shoutout to TVA, which I've already indicated I love history. Just go to their lobby. They've got so many incredible things from their past, but they are very smart in this space.

And Jeff Lyash is an incredible CEO and business leader in his own right. And he's also the chairman of the Nuclear Energy Institute and a great spokesperson for our industry. But you know, they've completed before Vogel, the only large plant to be completed this century is Watts Bar and, and they have made commitments to both GE and Kairos in the advanced reactor space.

So I think between the incredible innovation that comes out every single day out of Oak Ridge, Tennessee, and the incredible at the utility level, I think you've got something going. And just to make this a perfect trifecta, I would be remiss if I did not mention that technology and manufacturing facility of my old company, Centrus, which it has got the capacity, it's got exquisite capabilities. And to the extent that you're going to see a lot of nuclear energy. You're going to need a lot of nuclear fuel, which some people forget about. And that means for East Tennessee that facility is just down the road from the Oak Ridge Lab and Y-12 complex that Centrus has. It's just an incredible hotbed of activity and I'm so optimistic about the future. The last thing I've got to say is you can't find anywhere in the country, I would submit to you a community that is richer, both in terms of the talent pool, but also in terms of As I mentioned earlier, the community support, the political support thanks to you for your personal leadership in this and so I think East Tennessee, the past has been glorious, but I think the future is even more glorious.

Cortney Piper: And, you know, I'll raise you one more in terms of our nuclear energy workforce in particular, and that is the University of Tennessee's nuclear engineering department is tops in the nation. So we've got that. And then we've had a lot of our community colleges like Roane State University, for example, are really prioritizing and churning out different kinds of nuclear engineering certifications and programs like that to support the entire supply chain. We've got it all. It's not just a trifecta. There's a quadra something happening in here too. 

Daniel Poneman: I will I will accept the the improvement. You remind me not only UT, which is a great Institution, but the community colleges, I'm glad you mentioned it. I remember one of my most moving moments was is it Pellissippi?

Cortney Piper: Yes. Pellissippi State. Yeah. 

Daniel Poneman: Yeah. Pellissippi State. One of the last visits I had as, as deputy secretary was to preside over the commencement ceremonies and they had a program supporting veterans and the most severely amputated Serviceman who survived his injuries because medical technology is so great graduated and you know, especially fitted wheelchair and everything.

And you know, just the opportunities that it provides for everyone, including our veterans is just awesome. So it's a great community. I'm looking forward to getting back there. 

Cortney Piper: Absolutely. Well, on that note, Dan Poneman, tell our listeners where they can learn more about you and your work.

Daniel Poneman: You know, some, some people set up websites and so forth. I have never really done that, but I have been from time to time. A Senior Fellow at the Belfer Center for Science and International Affairs at the Kennedy School of Government at Harvard. Actually, as an undergraduate, I was a $5 per hour work study student taking notes at the seminars there.

And so I've maintained my ties there. And if you go, if you just Google, Poneman Belfer I think you'll find a page. It's got not everything, but a bunch of publications and so forth. And just I think today is coming out that I'm also going back to another organization I've been involved with in the past, the Council on Foreign Relations, and they usually set up an experts page. So those might be a couple of places that people could find my works, but I've got some books and articles and that sort of thing, but that would be one place to look. 

Cortney Piper: And then you'll be in Knoxville in August. Is that right? 

Daniel Poneman: Yeah, I'm excited. Can't wait to get back.

I heard from Dean Wanamaker and she is setting up this great Southeast Energy Policy Forum at the Baker School there at the University of Tennessee. And First of all, I had the highest regard for Senator Baker. I knew him first as Senator Baker. I actually had the privilege to visit him in Japan when he was Ambassador Baker, but truly a great American and someone who was deeply committed to our national security but also to nuclear energy. And so anytime anyone invokes the memory of Howard Baker, I'll show up because he was personally extremely kind to me. You like anecdotes. I'll tell you one last anecdote. So I actually had worked for him when the folks at Los Alamos misplaced a classified hard drive.

The president and the secretary of energy asked Lee Hamilton and Howard Baker to investigate what had happened. And so they, in turn brought in my first boss from the Department of Energy, John Tuck, who was a long time Baker associate, and myself to work on this. So we just traveled the country and had great stories from Senator Baker. Years later, when I was nominated to be deputy secretary of energy, he was nice enough to call, and you know, I was nominated, even though I'd worked for both Republicans and Democrats, I was nominated by a democratic administration. And so he said to me he was quoting somebody else who I don't remember who it was.

He said, "Dan, if it helps you, if I'm for you, I'm for you. And if it helps you, if I'm against you, I'm against you." So, he's a great American, and I'm delighted to be returning to the Baker School for the Southeast Energy Policy Forum next month. 

Cortney Piper: All right, we will look forward to seeing you there, Dan Poneman. Thank you so much for joining us on Energizing Tennessee.

Daniel Poneman: Thank you. Cortney and, have a great day 

Cortney Piper:  And that’s our show. Thanks for tuning into Energizing Tennessee, powered by the Tennessee Advanced Energy Business Council and FirstBank. We’re glad to be your number-one podcast for news about Tennessee’s advanced energy sector. If you like what you heard, please share it with others or leave a rating and review.

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