Macro analyst Richard de Chazal and group head of energy and power technologies Jed Dorsheimer explore the seismic changes reshaping the U.S. energy landscape as rising electricity costs and surging demand—especially from AI—put unprecedented pressure on the grid. The discussion also unpacks a five‑pillar plan for energy abundance, the balance between renewables and firm baseload power, and the economic and geopolitical forces driving a new era in energy markets.
Podcast Transcript
00:20
Chris Thonis
Hey everybody. Today is November 5, 2025. Welcome back to another episode of Monthly Macro. This month, we got William Blair macro analyst Richard de Chazal, as usual. But he is joined this time by Jed Dorsheimer. He’s group head of energy and power technologies. Jed, along with energy analyst Neal Dingmann, recently published an in-depth white paper called, “Pain at the Plug: Five Pillar Energy Plan for American Energy Abundance” which lays out why rising electricity costs and surging demand, especially from AI, are putting unprecedented pressure on America’s energy systems.
So, we’ll explore how those trends could mark a major turning point for the sector, what is driving the current challenges and what it means for energy markets and investment.
So, with that, Richard, why don't you go ahead and kick things off and I'll come back to this at the end.
01:04
Richard de Chazal
Great. Thanks, Chris. Jed, thanks for being here, and congratulations on a really thought provoking and well researched report, that you and Neil put out. I think you both view this as, really, your manifesto on energy and the economy and where we’re all headed.
It’s quite a big report. But maybe, we can just start out by just getting, kind of, an overview from a high level, you know, what is “Pain at the Plug?” What is it all about? What’s the key message?
01:53
Jed Dorsheimer
Yeah. Since I joined William Blair three years ago, we put out several white papers and I think, you know, all of those, kind of, built into “Pain at the “Plug,” which is, how do you use energy as a signal or lens to better understand the economy and, and what does that mean? And I think the, you know, the core idea, which was U.S. focus is, does the energy policies, kind of, match up to growth projections?
And I think that, they do not. And that, you know, is one of the major takeaways for this report, that the substrate of the economy is energy.
And I think if we look back over the past 100 years, a lot of the growth that we've seen has been a function of offshored, which is bringing that energy intensity per GDP down.
And if you are going to be reversing that or that isn't going to be continuing, what does that mean for the economy? I think near term, it means that we're going to have pain at the plug, which is a play on pain at the pump, which was always the litmus test for economic health of an economy.
And I think that is shifting from hydrocarbon molecules over to electrons.
03:07
Richard
So effectively, you know, energy is central to everything when it's cheap and abundant. You know, that's great for economic growth. Everyone's a hero. You know, we can get strong growth and low inflation. But, that's kind of not what you're seeing going forward, that you, sort of, state in your report. You know, we basically seem to have a bit of a problem of too much demand chasing too little supply.
So, what do you think the game plan is going forward? Where do we need to focus, you know, our concentration on production and you know is it all sort of going back to nuclear now
03:36
Richard
So, what's what do you think the game plan is going forward. Where do we need to focus, you know, our concentration on production? And, you know, is it all, sort of, going back to nuclear now? Where should we be looking?
03:51
Jed
I think it's a mistake to reduce it to any one particular technology. And, I think growth itself is a function of energy. All you're doing is degrading that energy, in order to then get some productive goods and services that we exchange in terms of monetary growth or the economic system.
I think one of the major problems with most modern economic systems is that a lot of these were created when, as you say, energy was abundant. So, it's largely looked at as a small output and not a major input. And, so, that's one of the big differences. We look at it as the substrate of the economy. And, so, if you don't understand that, you know, the mechanisms of growth, then you're going to be surprised by what's happening.
And so, you know, you ask the question, I think nuclear is part of the solution. I think what has changed, though, is if we look at, so if we look at energy density per dollar, we peaked in the U.S. in 1923 at about 17 megajoules per dollar and have come down to about three megajoules per dollar today.
And, if you look at China or India, you see an opposite curve, where you are seeing low energy density moved to high energy density, as industrial processes have moved offshore.
Now at 3.9 Megajoules per dollar, you cannot support steel mills, or shipyards or data centers. So, if we’re moving or reshoring some of these processes, you're going to need high density energy systems, of which nuclear, natural gas, oil used to be 100 to one energy return on energy invested, a metric that we use to determine what the energy density is.
And that's the problem with variable sources like solar or wind. I mean, I'm not anti-solar at all, actually. I see a lot of value for that. But, you have to recognize that it supports a system that's going to be more services based, not heavy industry. And, the reason being is because people, like you or I, we're going to use the energy at different times during the day.
And if you have a manufacturing plant, you need 24/7. So, part of this is a return to firm baseload, and away from peak or surge. And that's, kind of, our first pillar.
The second one is, you know, creating a market design that actually, price is reality. What does that mean? It means price reliability versus just marginal cost.
The third is provide, sort of shore up our, our resilience. Do we have holes in the supply chain?
Create a finance architecture is number four to, kind of, support that. If you do all four of those right, it leads to a fifth, which allows us to take greater risk and create moonshots of new technologies.
07:04
Richard
So, you mentioned solar there. And, so, you're not against solar but isn't solar part of the solution. So, I guess you're saying it is, but it's just secondary. It's more about… what's happening is the re-industrialization of the U.S. There's not enough power supply to support that. Solar's not going to do it.
But solar can still help relieve some of the baseload stress at least for consumers? Or, is it just nowhere near enough? I mean, you just keep seeing charts of declining solar cost and, you know, output increasing. And, you know, you talk about batteries in the report, isn't batteries the solution for solar to sort of get us over that, kind of, hump of downtime, if you will?
07:53
Jed
Yeah, so I think it's really important to kind of pick a few of these things apart. And that's why, you know, we really need true cost analysis, in terms of what is the cost. Often, it's used as, you know, this idea of levelized cost, which is going to benefit renewables because your utilization is relatively low. It would be like having a factory that you're costing out at a underutilized rate and not carrying all those fixed costs.
I think there is a real place for solar, particularly, you know, it can unburden some of that, you know, population or at the edge based for surge. You know, I've always said that it never made conceptual sense to me that I am capturing photons from the sun and, you know, turning those into heat in my shingles, and then using good electrons that are paying the price of distribution and transmission to then run an air conditioner to condition that space inside the home.
And, you know, when you look at the roundtrip, there's a lot of loss. I think that would be an excellent opportunity for solar. But, you have to recognize where that presents some challenges. If I'm a really good customer for my utility, they don't want to lose me, you know, to that edge base. And, if I completely decouple from the grid, there's an economic impact in terms of what my home's resale value may be.
And, so, those are some real considerations. Where we use solar in a utility or mow down, you know, cut a huge forest down to, kind of, put a solar farm up, is that the best use for baseload?
And the answer is no, you know. And, there's not enough batteries that you're going to be able to connect where you're going to make that for 24/7.
Now, that isn't to say that that doesn't have real efficacy associated with that technology. It's just, are you using it within the system in the highest possible value? So, I think what you're seeing shift is and, if we stay at that 3.9 megajoules or go lower in a services based economy where we've offshored our heavy production, then it's really just about migration shifts and surge or peak, and the, you know, famous duck curve in terms of when the sun sets and, you know, when people need that. That is an area where renewables can have a greater impact for a data center or for, you know, a steel mill, you're not going to run that on solar with a battery. And, so, that's where you're bringing back, you're seeing a lot of demand on natural gas for combined cycle, and even simple cycle turbines. And, you're seeing the attempt to stand up the nuclear sector, which gives, you know, 96% capacity factor. And coal is good for that, but coal, I think is politically and environmentally toxic in terms of, you know, we're not going to be building new coal plants. So, then you look at like, how do I achieve that baseload? And, I think that's one of the things that you’re seeing.
11:18
Richard
So, natural gas, I mean nothing, sort of, fundamental has changed there. It's just, you know, there's no, sort of, new innovation there. We had fracking, where, you know, we were getting more of it. It's more available. But, we're just going back to it, in a sense? We're relying more on it because we have to, essentially, correct?
11:41
Jed
I think what's changed, and this is why we brought Neal Dingmann into the energy group here. He's been a great addition and has rolled out on a bunch of coverage. One of the things we've realized is there's a lot more gas than we thought. And, so, that's one of the reasons that you have depressed pricing right now from a molecule perspective, there's more supply, right now.
So, that's a good thing in terms of setting up in and the longevity of that and what, you know, whether that's a bridge for five years, 10 years, 30 years, what does that look like? I'll leave that to Neal to discuss. That's his area of expertise. But I think that’s why you’re seeing, you know, a lot of utilities and IPPs, independent power producers, move towards gas, which benefits, you know, companies that are selling those turbines in the space.
So, I think that's what's changed. And, I think overall, the recognition that if you're going to reindustrialize, you need that baseload, and how do you build that? And, also recognize that we've underinvested in the sector for 40 years, and, all of a sudden you have this big demand driver in terms of data centers. And the idea of reshoring that is stressing the system more than it can handle. And those signals are saying, hey, we need to kind of come back to reliability and firm baseload
13:17
Richard
And, so, in your sort of five pillars, your, kind of, pathway to an energy abundant, you know, America. How much of that do you think is contingent on politics? So, how much is that contingent on a republican administration? I mean, we just had some elections, state and local elections this week, which weren't overly favorable to the republicans. If, say, you know, a democrat president comes into the White House three years from now, does that, sort of, wipe the slate clean? And, we have to go back to thinking about a new policy, or is there a lot of bipartisanships in terms of how politicians are thinking about this path ahead? There's a recognition that we really have to go here.
14:03
Jed
Yeah, I get this question a lot. I think it's very little on the political side. I think that whether it's republican or democrat, there's probably, you know, marginal shifts that can happen around the edge with respect to policy. I think the bigger question is, do you believe that we are moving back towards globalism from our current state, which seems to be a fracture of that, in a move away from the tectonic plates of the global economic system that we've seen for the past 100 plus years, towards a multipolar system.
If you believe that we move back, then I think that's really your driver, and less so whether or not it's a republican or whether or not it's a democrat. If, however, you see that as a system shift, then reshoring becomes a necessity. And, if reshoring is a necessity, then what I'm saying in terms of, baseload versus peak, that's not going to change based on, you know, ideological views of one administration versus next.
Now, one may say, oh, I like this technology, and we're going to support it a little bit more than this technology. But I think the physics is actually what's driving these major shifts, not the politics.
15:26
Richard
Yeah. I mean, if we spread that net a little bit wider, sort of, globally, where do you think the U.S. stands relative to say Europe or China? You know, it strikes me that Europe is going down a difficult path. If they're going to continue with sort of net zero by 2050, you know, it doesn't seem like they're going to get there. Has China, sort of, understood this better pursuing, kind of, an omnichannel approach to energy sourcing? Where do you think the U.S., sort of, compares to the Europe and China on their energy policy and which is which is better?
16:11
Jed
I'll try and say this without getting myself in too much trouble, but I believe that the U.S. is incredibly well positioned. If you look at it from a geopolitical stance in terms of it's basically an island, we have neighbors with that offer a lot of benefits. Up north, you have tremendous amounts of resources. Down south, you have the ability to industrialize with low-cost labor. So, from a North American perspective, how does that sit, you know, vis-a-vis, the rest of the world? I think that fits, that sits very, very well. Look at China and, sort of, the partnership with Russia, and perhaps even in India. You know, debatable what the strength is there. I think you have a similar type dynamic with respect to the natural resources that Russia brings to the table, and the ability to industrialize, that energy into productive output.
Now, one of the major differences, a truly, you know, a capitalistic system versus a socialistic system, history would suggest that in socialism, the major problem is the energy efficiency of that system where you have a top-down push by a government, to push ideologically driven policies. And there's never enough energy to support that. The same reason a blue whale doesn't grow beyond 125 feet.
So, I like the U.S.'s position, relative, you know, globally. You asked about Europe. I think Europe's in the worst position, you know, from a global perspective, largely because you have an amalgamation in terms of the euro with states that might have differing interests, and you have an energy policy that you lack natural resources.
And, as you come down that energy intensity, that's going to support more outsourcing. So, I really think that the U.S. has a, you know, if you look at the negatives, the U.S. has a tremendous amount of growth, sorry, tremendous amount of debt. So, what is debt? Debt is just a future lean on energy production.
So, again, I kind of come back to energy really is the calculus in terms of solving. And if we pursue a energy policy and don't miss allocate capital to things that have low value, then I think there's an opportunity to really emerge in whatever this new system may look like.
When I say system, I mean economy.
19:04
Richard
Yeah. I mean you talked about, sort of, you know, top down, you know, the government taking a top-down view of energy policy and, and we're sort of seeing the Trump administration buying stakes in tech companies or rare earth companies. I think they've taken the decision that, you know, Scott Besson, Treasury Secretary, talks about it all the time that Covid was, a sort of a wakeup call for if there was ever kinetic war, the U.S. would have lost it.
It didn't have access to critical supplies and materials. And, it seems like, you know, the government is taking the view that it needs to buddy up and take equity stakes in some of these critical areas. What do you think that means for investors? I mean, you know, do you want to be in a company that the government is your, sort of, co-investing with the with the government as sort of an activist investment, their investor?
Any thoughts about that? Is that or are we going down that route in, you know, in a broader sense, or are you getting any sense for your coverage area that we might see more of that happening, given the sort of, how, you know, the importance of many of your companies?
20:20
Jed
I think in pillar three, in the report, we talked about, you know, securing our supply chains. And, you know, when we talk about nuclear in particular, there are some major gaps in those supply chains that require, you know, a national security type effort to shore those up. I might reframe it a little bit from, you know, if I was in a company and the government, came in in some capacity to set a floor from a market perspective, I would think that would give investors more confidence in terms of what the guardrails might look like in terms of an investment framework.
And so, you know, having government intervention, which is, you know, if we were in a war right now would not be abnormal. We've seen this before, but we haven't seen it in absent, you know, a period of war. So, if you say, if we deem reshoring is within the national security interest of the United States, and that it's critical taking these positions does not seem outlandish to me.
And, I think if you do it in a way that you're not nationalizing a company, allowing their sovereignty to exist, but creating an economic framework to set a floor on pricing, I would think, from an investor perspective, that might create a more attractive situation in terms of, you know, understanding what my downside protection would be in investing in a company.
So just putting that hypothetical out there, I don't necessarily see that as a bad thing.
It depends on how far you take that. So, if it was nationalizing companies, well, as I said before, I'm a firm believer of capitalism and smaller government and that that would be the opposite of that.
22:27
Richard
Great. I wanted to switch gears a bit because it is, sort of, a macro podcast. I just want to get your thoughts. I mean, you know, what do you think, you know, if we are going to be facing a pain that the plug and higher electricity and higher energy prices, you know, should we be expecting big inflationary pressures coming through?
I mean, is this going to be kind of a repeat of the 1970s? Any thoughts there?
22:54
Jed
You and I, yeah. You and I, for the audience, Richard and I have had many discussions around this in terms of what time frame. And I think, you know, my take is that maybe the 1940s are probably more appropriate than the 1970s. I think, you know, your position is, maybe, who's driving the bus in terms of who's in charge, is it fiscal or monetary?
And I think might where you and I may differ a little bit, is I'm saying, that, you know, that paved road has ended and we've now entered a dirt road going over this mountain pass and is the bus even the right vehicle to kind of take us over versus who the driver is? And, so, my take is that what we're seeing is things that we have not seen in our lifetime, or really anyone that's working today, what they've experienced in their lifetime.
So, I think we're shifting. Now, the question, as I framed in the beginning is, are we moving? If we think that what we're seeing is an aberration and we will return to a global economic system, then I will be wrong, because then the system is not shifting. This is just a pause, for example.
But if I'm right, then that requires that 3.9 megajoules per dollar to move towards a seven to eight megajoules per dollar, that will be significantly inflationary to the likes that we have not seen historically. So, what does that mean? Well, I think if we look at the productive function, so that's on the supply side. If we look at the demand side and we look at the productive function, and what AI, and you'd be better to, you know, explain to the audience this. But if we look at the role that AI could play, which would be disinflationary, technology is always disinflationary.
If you align that perfectly with the energy, the inflationary effects of the energy increases, you can potentially get growth. However, if there's an out of phase where you need the energy first before you can have the benefits, you know it's going to be this situation where you could have an inflationary pressure, or you have the deflationary disinflationary effects.
And I think the challenge with this is going to come back to the political side. You know, we look at the elections last night, you know, and I'm not a political expert, so, just, what I'm reading, though, is the losses that the GOP has suffered. I do say that that is pain at the plug. Right. You're seeing a squeeze on the consumer, and I suspect that these are not near term, no matter what any politician does versus what they may say.
I think that you're locked into higher energy prices going forward. So, as you think about midterms, this is going to be a real challenge. Now, I think the major challenge for any politician is how do you sell the benefits, the disinflationary benefits, which are needed, by the way, from artificial intelligence.
If constituent is feeling that pain first, and that's going to be a major challenge, I think it's good for you and I for job security, because there's going to be a lot to talk about.
But I think it's, you know, whether these align perfectly or out of phase is going to, determine how an investor might want to be positioned to capture that opportunity.
26:40
Richard
Yeah. So, we're really leveraging our future on AI working because we're spending a lot of money and energy to get it to work. And, if it doesn't materialize, then we're in big trouble.
26:53
Jed
Well, yeah. And I think it's a little bit of game theory. So, if we don't, then who does?
26:58
Richard
Yeah.
26:58
Jed
And I think we're at the very beginning of what this the power of this technology and what it could actually do. And, so, I kind of fall into the camp that you have to, in the similar way that, you know, you would have to develop a technology that could reshape humanity.
And I think AI has that that level of power.
27:24
Richard
Yeah. Maybe in the time we have left. Just, maybe one final question. If you were thinking, you know, from an investor perspective, there's been a lot of articles in the press recently, in the financial pages, complaining about, you know, some of these energy companies saying, you know, they're combining a lot of dollars with a lot of untested technology, returns may take longer to materialized than expected. You're also maybe allowing the government to pick winners. So, from that perspective, how do you think about these companies? It feels almost in some senses that they're almost kind of biotech-ish. There's a sort of, a hit and miss about them. Or is that completely a completely off base?
28:08
Jed
I think, you know, in pillar five of our report, we lay out moonshots and the quest to get to $25 a megawatt of delivered electricity. And, just for context, you know, we're about 100 right now. So, that would be, you know, a 5X reduction from a cost perspective. We laid that out as pillar five because you really need to do the first four correctly so that you have a surplus of energy.
And if you think what is risk? Risk is a function of having that surplus. So, the ability to take greater risks from a capital allocation perspective is predicated on having the systems that deliver that high output. If you move to the higher risk without the first four, you have greater risk of collapse. And so, you know, I think the two cannot be decoupled in the sense that, you know, you can't throw all of your eggs at a moonshot unless you have that savings, energy savings, if you will, to be able to make those investments said otherwise.
The and the more and so we look at this the economy we estimate as a break even in the US about a seven to one energy return on energy invested. And, so, if we put more technologies that fall below that, like ethanol, a corn-based ethanol for fuel additives, that was a one to one or green hydrogen point nine six to one.
The more, that becomes a tax on society. And, so, the more we miss allocate that capital, the less risk we're going to be able to take in the future. So, that's one of the reasons we put that out, in terms of, I really believe firmly, pun intended, that we need to move back. If the system is shifting in this way, we have to come back to firm baseload, which will support the ability to take greater risk for these new technologies, like fusion, or hot rock geothermal, or thorium-based fission reactors. Those are the types of things that have the potential to actually have a $25 a megawatt, in our opinion, delivered power.
30:35
Richard
Last question, would you say you're optimistic, then, about where we're heading?
30:40
Jed
I’ve never been more optimistic in my life. And the reason being is, you know, and I think it's really important for people to hear this because we live in an echo chamber where, you know, if I have a negative view of things, I'm going to see all of those negative things throughout my day.
For the first time in history, we have the potential where the foundation of our system may be changing, which is going to create massive opportunity to the likes we've never seen before. And understanding energy's central role, where we're anchor around energy production is critical, as well.
And, so, from that perspective, I think if I was an investor or advising investors, I've never been more optimistic because of the opportunities that we have in front of us, instead of being locked with tight guardrails in a situation. It's really like, okay, what does this canvas look like? And what could this opportunity present? And, I think now that, you know, from a global scale, there's just so much potential that exists despite, you know, the fact that, you know, our media attaches to a lot of the negativity in our systems are designed to keep people small.
I think if you can break out of that, and, that's why I liken this to the movie The Matrix and taking the red pill that allows you to kind of see through this and the opportunities. Once you start looking through this lens, I don't think you can help going back to the previous way of seeing the world.
32:14
Richard
Great. Well, very interesting, Jed. Thank you, again, I know it's earnings seasons, so, you’re probably pretty tied up with reporting, as well. But, certainly appreciate your time today, so thank you very much.
32:26
Jed
Thank you.
32:27
Chris
All right. Jed, Richard, thank you.
For those interested in reading Jed's report, it's called “Paint the Plug.” You can request a copy by visiting WilliamBlair.com/contact-us. Thanks for joining. We'll be back next month. Jed, Richard, it has been a pleasure.