Dan Yergin: Recording, chat and transcript

About 200 Yalies assembled for an hour to listen to, and interrogate, Dan Yergin (’68) on the current state of geopolitics, markets and climate-motivated transitions of the oil and gas markets.


12:05:54 From Rick Moody (San Mateo, CA) to Everyone:
For those interested in this subject, I do a regular newsletter, “Climate Change in an Aging Society,” reflecting my experience (retired VP for Academic Affairs, AARP). For a sample copy or free subscription, send a request to me at: hrmoody@yahoo.com
12:15:36 From Tim Weiskel to Everyone:
As you said CERA began as the “Cambridge Energy Research Associates,” founded by Daniel Yergin. The alternative to CERA is the “Cambridge Climate Research Associates” (CCRA) also founded in Cambridge.
* Daniel, as you see it “What was the “oil crisis” we all experienced?
* Have you considered the “other oil crisis” — studied more continuously by the CCRA?
12:19:05 From Brooks Bowen to Everyone:
How educate media and public there is Very Little a President can do in the short term about gasoline prices?
12:21:02 From Thomas Carey to Everyone:
Would it be feasible for Germany to address its energy problem, at least in part, by restarting its mothballed nuclear plants?
12:21:53 From Yale Boom to Everyone:
Re: the discussion of The New Journal http://yaleboom.org/the-new-journal/ has links to all issues in the first year.
12:22:42 From Bill Primps to Everyone:
At both Harvard and Yale, student climate activists have attempted to limit professors with links to the fossil fuel industry from classroom activities–Have you observed any of this type of activism?
12:23:32 From Bill Baker to Everyone:
There is current talk about putting a cap on prices that can be paid to Russia for oil with secondary sanctions against those who do so or requiring that all money paid to Russia for oil be held in escrow. Are these proposals feasible to prevent Putin from profiting from rising oil prices?
12:24:39 From James Foorman to Everyone:
I think I saw that the EU has a plan to wean itself off of Russian gas/oil. If I got that right, will it work?
12:27:39 From Paul Mason to Everyone:
China is a major creditor of the U.S., as well as supplier, unlike Russia. This has totally different financial and other implications.
12:29:32 From Robert (Bob) Wimpelberg to Everyone:
Would a future Trump administration be likely to cancel the Biden sanctions (buffered by a Republican Congress) and might Putin be counting on that?
12:29:45 From Tim Weiskel to Everyone:
Through the Cambridge Climate Research Associates CCRA – (the “alternative” to CERA) there has been a continuous critique of the fossil fuel perspective of large international corporations over the last several decades.
Cambridge Climate Research Associates (CCRA) | Cambridge Community Television https://environmentaljusticetv.wordpress.com/2016/10/05/cambridge-climate-research-associates-ccra-cambridge-community-television/
This has been evident through the “alternative Reunions” of the Class of 1968.
“Nostalgia ain’t what it used to be…” (Yogi Berra)
“Nostalgia ain’t what it used to be…” (Yogi Berra)
What has been your assessment of the CCRA approach as opposed to the CERA approach to global energy issues?
12:31:50 From James Foorman to Everyone:
If you’ve read it, what’s your view of Bill Nordhaus’ book, Spirit of Green? Those who are greener than Nordhaus seem to think he’s collaborating with planetary destruction. I don’t know what to think, though I found the book interesting.
12:35:40 From Tim Weiskel to Everyone:
As Reid points out the direction of change is clear …. the problem is that because of the legacy of “Yale ’68” has meant that whatever we do now is too late….
The Tragic Legacy of The Class of 1968: Carbon Fuels, Catabolic Climate Collapse and the Future of the Human Prospect
The Tragic Legacy of The Class of 1968: Carbon Fuels, Catabolic Climate Collapse and the Future of the Human Prospect | EV & N 276 | CCTV
“…a Gift from God.” – Cowboys and “Revolutionaries” (and the problem of intergenerational ethics)
“…a Gift from God.” – Cowboys and “Revolutionaries” (and the problem of intergenerational ethics) | EV & N 275 | CCTV
Climate Damage Assessment: Assessing the Full Cost of 40 Years of Profits, Lies, and Deception from the Fossil-Fuel Industries
Climate Damage Assessment: Assessing the Full Cost of 40 Years of Profits, Lies, and Deception from the Fossil-Fuel Industries | EV & N – 254 – CCTV
12:38:39 From JeanPierre Jordan to Everyone:
Is there a role for Nuclear in any of this? Or is it too late even for that?
12:42:09 From JOHN WEBER to Everyone:
Why in the climate debate are we not discussing world population growth which ultimately increases the demand for energy and resources?
12:42:51 From M Bruce Parker to Everyone:
With a plug-in Hybrid, we are able to use electricity for 80-85% of our urban vehicle transportation. Still, transitional.
12:43:00 From Ian Glenday to Everyone:
Vaclav Simil’s books points to materials and NIMBY issues seem critical to green energy?
12:43:05 From Yale Boom to Everyone:
what do you think of carbon fee and dividend
12:43:38 From Bob Schloss ’73 Ossining NY to Everyone:
@Reid — Good set of questions. Well done!
12:43:57 From Yale Boom to Everyone:
Bill Gates, John Doerr and others have mapped out the sequence for the transition. Which other views do you like?
12:44:25 From JeanPierre Jordan to Everyone:
Where will electric vehicles get their power from? Fossil fuel plants?
12:45:25 From Tim Weiskel to Everyone:
There is a reason why we see headlines about “big oil” and that is that even PBS recognizes that they have lied for the last 40 years to the American public and the world.
The Power of Big Oil Parts 1, 2 & 3: Denial, Doubt, Delay | FRONTLINE
The Power of Big Oil Parts 1 & 2 & 3 : Denial, Doubt, Delay (full documentary) | FRONTLINE
What was your role in this 40 year deception? You initially made important public stattements about “peak oil” then decided it was not a problem.
Then you went on to tell us that “fracking” was the salvation of the American economy. This turns out to be a part of the deception that has lulled Americans to sleep on the need to transition beyond fossil fuels.
How do you speak about your role in these “technologies” that turn out to be a failure — amplifying the climate crisis rather than addressing it?
How cn you be a “technological optimist” in the face of these evident catastrophic failures?
12:46:00 From Patricia Locuratolo Hymanson to Everyone:
Would you expound on your thinking about government and markets shifting power?
12:46:05 From Steve Sorett to Everyone:
Is it true that most of the oil released from the strategic petroleum reserve after refined went overseas?
12:46:08 From Charles Shamas to Everyone:
Can you venture an assessment of green electricity generation -> green hydrogen as a least metal intensive transport solution (less or no battery reliant)?
12:49:43 From Christopher Khoury to Everyone:
In response to the question about fossil fuels providing electricity for EVs, I get the electricity for my two EVs from my photovoltaic rooftop solar
12:49:59 From M Bruce Parker to Everyone:
Until hydrogen is green, it is at best a neutral energy transfer medium.
12:51:02 From Mike Gawel 1968 to Everyone:
Will Ocean Thermal Energy Conversion become a source of green hydrogen?
12:53:38 From Howard Newman to Everyone:
Plants. Don’t forget the power of plants
13:00:00 From Ian Glenday to Everyone:
Why import Algerian gas to Boston. Should go to Germany?
13:01:15 From Timothy Powell to Everyone:
Thank you for this excellent and enriching session!
13:01:20 From Howard Newman to Everyone:
Thanks, Dan, for a balanced and fact based conversation which focused on trade-offs instead of simple solutions that won’t work.
13:01:39 From Charles Shamas to Everyone:
13:01:50 From Tom Linden to Everyone:
Thanks, Dan. Good to see you again.
13:02:05 From Patricia Locuratolo Hymanson to Everyone:
Thank you. SY ‘79
13:02:56 From Ben Slotznick to Everyone:
Thanks Reid!👍
13:03:24 From Howard Newman to Everyone:
how do I go to my college
13:31:35 From Steve Sorett to Everyone:
mike…my email is steve.sorett@kutakrock.com
13:48:37 From Edward Landler to Everyone:
Gentlemen, this discussion has been of great value. I must away to prepare for the Class of 70’s Reunion next week. Be good…

Closed Captioning

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Now I don’t need to say much to introduce dan yergan if you don’t know who he is.

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You wouldn’t be on this call so that makes it easy but suffice it to say, he’s he’s had a remarkable career become the go to energy expert. for the global media. every time the energy world blows up

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which seems to be a roughly an annual occurrence.

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And written many very highly registered books chiefly noted for his fondness of the Colon and I’m gonna illustrate energy future Colon.

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The report of the energy project at the Harvard Business school.

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The quest, colon energy, security, and the remaking of the modern world.

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The prize colon, the epic quest for oil, money, and power.

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Commanding heights, Colon, the battle between government and the marketplace that is remaking the modern world.

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And now the new map going energy client and the clash of nations.

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Of course, Dan had to make a living, so he founded Cambridge Energy Research associated It’s a consulting firm.

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Cambridge. We don’t have to have cambridge in the title did perhaps an oversight it was acquired by I. H.

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S. became Ih s market, which merged with S and P.

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Global. But dan’s original Sarah week Sarah for Cambridge energy research associates 0 week conference in Houston can continue modestly build as the world’s premier energy event or some say, the domos of the oil and

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gas industry. Dan, I think you said that you’d conducted 74 on stage 42 42.

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Okay, Well, a bit number, anyway. So so he’s moderately well connected. may know something about the topic.

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But to get us started, and as people inevitably are still joining, indulge our baby, our baby boomers are Yale boomers here, Dan, and

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Take us back to your undergraduate days. What? what in the world possessed you?

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And I think, Jerry Brooke, and according to Wikipedia, Peter Yeager to launch the new journal.

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I was kind of amazed to see, is still publishing in print and online under the venerable slogan.

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This will make us all feel with weird 1,967.

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It’s its original mission statement in which I detect the Rye urgent tone was this University has once again reached that stage in history when people are talking about the new Yale, presumably to be distinguished from the

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old Yale, which in its own day was presumably considered new.

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Wishing to share in this modernity, we have chosen the new journal as the name for our publication.

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Besides, it adds, things seems slow around here to again tell us how that all happened.

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Who was there, and how it led you on to where you are today.

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Well, thank you, and thank everybody for joining today.

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I’m really pleased to have this opportunity to connect virtually with you all.

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And both on topics of the past, but more important, and topics of the future.

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First given your introduction read it seems to me in this age of Twitter.

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It’s very clear with the title of my next book should be.

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It should just be entitled Colon. and go from there and anybody can fill in what they want.

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It’s a vaguary of publishing that you need a subtitle.

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It’s interesting I mean the new journal started I I was with Jerry Brock co-edited this what was called a Friday section.

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The Yale Daily News, and i’m still amazed by the way, that you found that introductory call clarion call to action.

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And it turned out basically the daily news chose a wonderful person to be.

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It’s chairman next chairman and it wasn’t me and

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So I was kind of disgruntled and I was really loved doing narrative writing, and had this idea that could kind of as I look back on it, I it’s often you do things you wonder what was I thinking Well, we could just

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start this alternative publication, and we found a Yale alumni alumnus who was generous enough to give us $5,000, and that was our capital to start the publication, and we were very much caught up and what at that time was called the

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new journalism which was this notion of of using fictional narrative techniques to write about real things, and that became the basis of what we did.

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So it was a little bit of New York magazine, a little bit of esquires, a little bit of New York Review.

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All those things. And then what happened is that people gravitated to?

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Once we existed we became an alternative outlook, and people who like to write showed up.

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And I think that I, you know, just in terms of my own education.

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Combined with you know what I, you know studied. but I think that experience taught me a lot about writing about narrative, about storytelling, which carried over and so into what I did in life.

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To, and you know, and I was always, I mean for me.

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Writing was just kind of a vocation. I think my father had been a sort of unsuccessful writer, and it just it just seemed to be something really important to be doing.

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I thought when we were undergraduates the most important, and i’m sure there’s not had other things. but I thought the most important thing was to be account Campus journalist that seemed to me the number one goal so Anyway, I kind of I ended up

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doing a PHD. at Cambridge University, in England mainly because you didn’t have to do any additional classes, and you didn’t have to pass a language exam.

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So they said, go away and write a book. So my first book was was my PHD.

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And so I continued on that track, you know accidents happen as as redescribed it, and I had a postdoctoral fellowship at Harvard, and had a subject to work on, and I just found it really boring and so for 2

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years no one was supervising me, so I just sort of became an autoodact on the subject of energy, and ended up in a place I never expected to be as a teaching at the Harvard business school, and then start at this

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company with one other person, a file cabinet and as it’s now grown to you know, so now i’m you know, just become vice chairman of S.

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And P global you know. So I think writing was always what I was determined to do.

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And then I became obsessed with energy and geopolitics.

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I think this where the professional career has led me was something I never expected or really thought about.

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So. I so I just say that just in march I started a new job.

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But but i’ve always been able to I I mean i’m always late with books.

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I mean the the prize which is the pulitzer Book post Surprise book was 5 years late, but it turned out that it was very well time when it came out.

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And you it’s funny with the new map it came out in the middle of the Presidential campaign, which was not an ideal time, and it’s almost like It’s now that it’s gained its life that where i’m doing

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so much that normally do in a book gets published.

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But but i’ve been able to you know my mother would say, and as read, Just say, make a living. but at the same time, also I’ve been able to write these books and just immerse myself in the subject that I just find

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constantly interesting. So, Dan, you you got launched on that trajectory about the same time as the Arab oil embargo and became very timely, obviously front of mine for everybody.

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But there you were in your twenties. observing this without a deep background in the industry except your auto did act work?

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How How of your views and your perspectives changed in in the interim?

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Obviously you’ve you’ve deserved a lot more you’ve learned a lot more and has it changed in in more fundamental ways.

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How you look at it. Well, I think 2 things and then I want to Also, since everybody here actually lived through the oil crises, I want to just answer question.

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I’ve gotten a lot, but it’d be meaning to fruitful to this group about where we are now completely.

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Then I think that what’s evolved for me is a really healthy respect for markets and how markets work, and and the combination of markets and innovation I think that’s kind of the big

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takeaway for me, I think if I look at everything, including commanding heights, and obviously I find the energy industry is just a really interesting business.

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It’s. you know It’s often people imagine it’s run by the John D.

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Rockefellers controlling things and it’s actually it’s an industry largely run by engineers who think about kind of problem solving.

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So. but it there’s a political overlay and we hear it right now with all the you know accusations of price gouging.

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So I think those are couple of the big things that i’ve learned.

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I do as I say, get this question and it’s very meaningful to everybody here.

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Well, how’s this You know is this like the 1,900 seventys, and, unlike people on this call, many of the people are asking me that question.

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Either we’re not born or we’re watching sesame street. So I realized that the 1,900 seventys has become an iconic sort of metaphor for a major energy disruption, and I think right now

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we’re going through a major energy disruption there are many differences, but I would say 2 things that stand out to me.

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We went into this, and this was before the war in Ukraine, with very tight energy markets.

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The balance between supply and demand was very tight, and as a so it was set up sort of crisis prone, to begin with, and the other change.

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The other thing is that the world after the energy crisis 1,900 seventys was different from the world before the energy crises.

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And I think We’re what we’re living through now the world after this is going to be different than the world that existed on February the 20 third before that war began.

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So those are 2 big changes and similarities. I guess there’s one other big lesson that that I took away from actually writing 2 of the books that are big impact on me. one.

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Was the prize, because it has hundreds of characters, and people said great characters in it.

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But the 2 most important characters at the end of the day, I decided, was one name supply, and one named demand, and I keep that perspective in mind.

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And then the commanding heights had a big impact about kind of Where’s the role of government? Where’s the role of market?

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Where’s the balance between the 2 of them and how the frontier between governments and markets?

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Keep shifting, and we’re in been in a period when that frontier is certainly shifting in one direction again.

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Well, just to pick up on that oil industry in particular is unique in the way that national governments.

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Yeah, yeah, but otherwise would be companies around the world and act in their own political self-interest.

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And I I would imagine most everybody on the call wants to.

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Yeah, think about that in terms of Russia and Ukraine right now.

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Putin evidently thought he had to leverage to count Europe and the United States in invading.

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And after all, the Eu in effect, bankrolls his his military endeavors.

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With its oil and gas purchases in in the new map. You write that in normal times oil and gas exports provide 40 to 50% of the Russian government’s budget.

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You. You observe that for the invasion, which is always a trick he was riding high. Putin was just shows how wildly the worm is turned.

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He could point to quote. Nato, divided the Eu in disarray, and American politics, fragmented, nasty, and polarized.

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Well, the last one is still true, but, the other 2 have shifted parade dramatically. and I wonder if your perspective is the invasion of Ukraine, a new and historically unique use of energy as a

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weapon and did it in turn out, and found prove a less effective weapon that it would be well.

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I think that energy you know there’s a whole I ended up.

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I was going to write one chapter about Oil World War 2 and the prize I ended up writing for, because oil was so significant to what? How?

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How World War 2 played out, and a clearly in 1973 energy was used as a weapon and it worked for time and to a degree, and it changed the world.

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I think that you know I think you you’ve pointed read to you know.

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Putin’s thought processes, and he made 4 rational get for rationale decisions, but they all turned out to be miscalculations.

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You assumed, as you say, the Us. was divided. He looked at what happened in Afghanistan or January the sixth, that Europe was so dependent on energy that it would go.

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You know. it was sort of say protest, and then sort of wave it away like they did with with Crimea that his army would perform brilliantly.

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They, apparently the forces that were headed towards Kiev carry dress uniforms to wear in their parade.

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And then the fourth thing was that that that Ukraine would fold, and Zelensky would be gone.

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But I think the one calculation that’s still kind of indeterminate is that it does recognize that this energy shock, and then the sanctions that are coming will create a lot of turmoil for Europe and a lot of

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political contention, and you know we can see what happens here with gasoline prices. As they go up.

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They become such a big you know, obviously big political issue. and he’s counting, I think, on that Western unity to break down.

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He’s been wrong so far and all this assumptions and he may ultimately be wrong about this.

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But and right now, ironically, because prices have gone up he’s actually making more money from oil than he did oil and gas, and he did last year.

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But I think I think the Europeans are determined are really determined to.

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Shut the door on Russia. move away and the dependence. that they’ve had, and it’s not total by any means about 35% of their gas, 35% of their oil.

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But particularly important, let’s say for germany in terms of natural gas.

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But I think the Eu is very close to putting, saying an embargo on Russian oil imports.

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Crude oil products, like Diesel are harder and natural.

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Gas is the hardest, and so ultimately, I think Putin will pay A.

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You know a a big economic price for this but but we’re we’re still gonna be in a period of several months, particularly as if you get closer to winter in Europe. and how much gas is in storage that’s when

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the let’s say the political temperature temperatures will go up as temperatures will go up as the atmospheric temperatures go down so that economic sword cuts both ways, but obviously the

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principal Western response to the invasion. A new, surely was economic sake.

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And those have been increasing over time in the new map.

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You look back at, say sanctions against the Soviet Union and against Durham, and characterized them.

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It seemed to me as being pretty ineffective.

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Do you think this term will be different? Well, always risky.

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To say, this time is different. Yeah, It’s true I mean Iran is still in business.

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Venezuela is still in business. you know not as you I mean they’re both have heavy sanctions on them.

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I think I I think if you go back I did another book with a colleague called Russia 2,010.

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We did in the early ninetys, and it was really sort of focused on.

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Will Russia be integrated into the rest of the world?

00:21:21.000 –> 00:21:26.000
And you know. now there’s some revisionism wasn’t a mistake to do that.

00:21:26.000 –> 00:21:33.000
I’m not sure there was an alternative stroke Talbot or my classmate was much involved in that.

00:21:33.000 –> 00:21:38.000
I think it was the right thing to do you Couldn’t just walk away from Russia after the collapse of the Soviet Union.

00:21:38.000 –> 00:21:43.000
But what’s happened is that Russia has been quite integrated into the world?

00:21:43.000 –> 00:21:48.000
Economy, and more so than you know. I think putin thought he’d made his economy.

00:21:48.000 –> 00:21:55.000
Say, sanctions proof after 2,014. but I think never envisioning this scale of sanctions.

00:21:55.000 –> 00:22:08.000
Something like 800 American companies have left. Russia I we just saw Mcdonald’s is pulling out Google’s pulling out the flow of technologies is really being aggregated.

00:22:08.000 –> 00:22:13.000
People are, you know, no one wants to violate sanctions and pay a 1 billion dollar fine.

00:22:13.000 –> 00:22:28.000
So I think that the hit on the Russian economy over a year or 2 is going to be quite significant and much larger, and I know that some of the chief architects of what was putin’s economic success of the last 22 years,

00:22:28.000 –> 00:22:35.000
which has now been smashed, wrote him in the first week of the war, and said, You’re making a terrible mistake.

00:22:35.000 –> 00:22:47.000
You’re gonna destroy what we’ve built up over 22 years. and his reply, i’m totally called one of them on the phone and said to them, You may be right, but the West is trying to and particularly the United States and Nato are

00:22:47.000 –> 00:22:49.000
trying to destroy Russia, and they’re using Ukraine to do that.

00:22:49.000 –> 00:22:59.000
So we need to do what we’re doing but I think the I think that this may be sanctions on this scale.

00:22:59.000 –> 00:23:05.000
You know, may well have a very dramatic impact on Russia.

00:23:05.000 –> 00:23:10.000
The Chinese. we’re gonna be very sure are studying them very carefully.

00:23:10.000 –> 00:23:17.000
You know one of the Chinese diplomat saying, you know, very busy.

00:23:17.000 –> 00:23:28.000
And the question, What are you, very busy doing, I think He’s very busy studying us sanctions because of course, they’re thinking about it in terms of Taiwan? and you know, just like the Russians set up an instant after the

00:23:28.000 –> 00:23:33.000
fall of the Soviet Union to study what did Gorbachev do wrong.

00:23:33.000 –> 00:23:38.000
I think they’ll study this really Intensively as they keep their eye on, on, on Taiwan.

00:23:38.000 –> 00:23:49.000
But of course, China, it’s a different story. because the us and China are so integrated economically that we don’t have the freedom.

00:23:49.000 –> 00:23:59.000
I don’t think to to put sanctions you know, to do the same thing with China, because it would be sanctions on ourselves as well.

00:23:59.000 –> 00:24:03.000
So, you know, but I think the Chinese are watching this very carefully.

00:24:03.000 –> 00:24:16.000
Obviously well. That relationship with China is is a really interesting piece of the current geopolitical situation.

00:24:16.000 –> 00:24:27.000
It seemed to me that the invasion, both coincided with and drew support from putin’s meeting with and closer and brace, if she

00:24:27.000 –> 00:24:33.000
Since that time seems like the signals of support from China, have been more muted.

00:24:33.000 –> 00:24:41.000
But the Chinese were market remains, probably the most important lifeline for his oil and gas supplies.

00:24:41.000 –> 00:24:50.000
So i’m i’m wondering about the evolution of you know, affect an authoritarian block in your book.

00:24:50.000 –> 00:24:56.000
You quote, Don’t show paying is predicting quote one planet 2, i. e.

00:24:56.000 –> 00:25:14.000
The Western and the rest of the world Do you think that Ukraine and the the events We’re going through Does it increase the danger of block a global block led by China and Russia and perhaps India that would be a credible

00:25:14.000 –> 00:25:18.000
counterweight to the Us. and the West? or do you think that it lessens it?

00:25:18.000 –> 00:25:23.000
Well, I think in India I would say, would not be part of that, because India is sees.

00:25:23.000 –> 00:25:29.000
Its biggest threat is China, and, in fact, India has joined with the United States.

00:25:29.000 –> 00:25:44.000
Japan, Australia. Yeah, the United States, Japan and Australia, , and and of course, India itself, to create what they call the quad, which is cooperation in the Pacific.

00:25:44.000 –> 00:25:48.000
They say it’s not to contain China but the Chinese say is to contain China.

00:25:48.000 –> 00:25:56.000
And so I think India is not in there. India has sort of gone back to its 9 non-aligned status.

00:25:56.000 –> 00:26:00.000
But I think Russia and China is very definite. I.

00:26:00.000 –> 00:26:07.000
In the new map I have a scene. I was at Co. I go to this thing called the St.

00:26:07.000 –> 00:26:18.000
Petersburg International economic forum, and the last one I went to in 2,019 who was Putin’s guest because she’s you Ping, and they begin sitting on the stage and putin says to she I

00:26:18.000 –> 00:26:22.000
apologize. I kept you so late at talking up till 4 Am.

00:26:22.000 –> 00:26:34.000
In the morning, and she replied, Oh, that’s okay? we never have enough time to talk, and you know one of the main things they talk about is and would be talk about.

00:26:34.000 –> 00:26:44.000
Is there common opposition to what they’ve seen as a Us. dominated international order and putin, and she would describe each other as best friends.

00:26:44.000 –> 00:26:56.000
I have another scene in the book where putin brings G’s favorite ice cream to Russian ice cream to him is a birthday present when they’re meeting in somewhere in Central Asia.

00:26:56.000 –> 00:27:06.000
So there’s a very close personal relationship. they have met dozens and dozens and dozens of times and I think, and I sketch out.

00:27:06.000 –> 00:27:14.000
You know how Russia China was. Russia was hanging back, and then Russia decides It will share its most advanced weapons with China.

00:27:14.000 –> 00:27:19.000
It hung back because it’s right afraid the Chinese would reverse engineer them.

00:27:19.000 –> 00:27:26.000
But then part of the relationship, they would share technology, and we noticed that both countries have made big advances in hypersonic weapons.

00:27:26.000 –> 00:27:30.000
I think 2 things to say As a result of this crisis.

00:27:30.000 –> 00:27:36.000
The none of us know what putin or we’ll ever know what putin said to G.

00:27:36.000 –> 00:27:40.000
On the eve of the Olympics, when they signed that agreement of unlimited cooperation.

00:27:40.000 –> 00:27:53.000
My guess is that putin spoke about a special military operation as he’s described it and suggested it would be taking back the Don bass just like China would like to take back Taiwan and did not say Oh, by the

00:27:53.000 –> 00:28:01.000
way we’re gonna launch a war. that’s going to go on for 3 weeks, and reorder the world’s 3 months and rewarded the world system.

00:28:01.000 –> 00:28:06.000
And I think my guess is, and this is purely a guess that she is not happy.

00:28:06.000 –> 00:28:18.000
With having been drawn in by putin into this, because putin may want disorder because she wants order, and he wants, by the way, to be re-elected President of China.

00:28:18.000 –> 00:28:30.000
And at this point he has no opposition, in the primary So I think it’s pretty likely what happened. but but they want order to achieve what they want to achieve with that said I Think one consequence.

00:28:30.000 –> 00:28:44.000
Of this is exactly what you said. Read the China. that Russia becomes basically an economic dependency of China which they were not keen to do, because, remember, Europe was Right’s main market for its energy.

00:28:44.000 –> 00:28:52.000
Now will be China and it’ll be India by the way going back to your your question, because India imports 85% of its oil.

00:28:52.000 –> 00:29:01.000
It’s having its own energy crisis. It needs a high oil prices are real problems, so they can buy Russian oil at a 40% discount.

00:29:01.000 –> 00:29:11.000
It will do that, and it’s interest so but and it’s been a big new buyer, but China will step up its purchases. but I think there are limits to how far that will go from china’s point of view because

00:29:11.000 –> 00:29:20.000
they’ll want to maintain good relations with saudi Arabia with the Uae, with other suppliers as well, and they don’t want to become overdependent on Russia.

00:29:20.000 –> 00:29:24.000
But I think putin is going to have a bigger problem when Russian.

00:29:24.000 –> 00:29:36.000
When Europe does really get off Russian gas because you can’t take the gas pipelines and put them on a tanker and send them somewhere else, so he will have stranded gas and he’ll be able to sell some of

00:29:36.000 –> 00:29:46.000
that gas to China will take 4 or 5 years to build the kind of pipeline that they need, and it’s the complex pipeline that, among other things, will go across another country.

00:29:46.000 –> 00:30:01.000
Mongolia course, what are the things about what we guess Is the fixed assets that are required to move it around, and and, as you know, I’ve been working right.

00:30:01.000 –> 00:30:08.000
Life, mostly on the intersection of energy. and climate and renewable energy installations.

00:30:08.000 –> 00:30:21.000
They’re not exactly transportable on trucks but they’re pretty easy to put up and and and yeah it’s it’s it’s pretty obvious that we’re at a point where the world has to more away from fossil

00:30:21.000 –> 00:30:29.000
fuels as as fastly fast as technically possible, and economically feasible, and a common aspiration.

00:30:29.000 –> 00:30:41.000
It’s reaching that 0 or carbon emissions by 2050 I I may be over reading it, but it seemed to me that the end of the new map you seem to be shifting from a skepticism

00:30:41.000 –> 00:30:48.000
about that energy transition to a recognition of the benefits that it would provide. and a quote.

00:30:48.000 –> 00:30:53.000
This is to plug your book, but to plug my ideas a quote.

00:30:53.000 –> 00:30:57.000
It will the the transition will require huge investment.

00:30:57.000 –> 00:31:04.000
Bring dislocations, add to financial burdens on governments, and impose heavy costs on some parts of the economy.

00:31:04.000 –> 00:31:12.000
True enough, but then you add quote same time, it will create major new economic opportunities.

00:31:12.000 –> 00:31:19.000
Open new frontiers for technology and innovation, and stimulate entrepreneurship and creativity.

00:31:19.000 –> 00:31:26.000
And you conclude, In fact, you conclude the book by not giving away a punchline here quote.

00:31:26.000 –> 00:31:38.000
Of one thing we can be sure: the emergence of climate change as one of the defining features of the new map is opening a new era in the relationship between energy and nations.

00:31:38.000 –> 00:31:57.000
So the question in my mind is, is one of the many unintended consequences of putin’s miscalculations gonna be a rapid acceleration of the energy transition particularly in Europe, possibly with consequences one Well, I think certainly in

00:31:57.000 –> 00:32:06.000
Europe. and I think just yesterday Europe came out that it’s gonna If I can use that phrase step on the gas with renewables with wind and solar and seek to speed them up.

00:32:06.000 –> 00:32:12.000
I think it’s important to say, Europe because I mean I also looked in the book.

00:32:12.000 –> 00:32:19.000
As you know, energy transitions, and and went so far as to actually say, the energy transition began.

00:32:19.000 –> 00:32:29.000
This is really going out on the limb in January the seventeenth 9. When an English metal worker figured out you could make iron better using coal rather than wood.

00:32:29.000 –> 00:32:35.000
But also these other energy transitions have happened over a very long time, and it’s never been an energy transition.

00:32:35.000 –> 00:32:39.000
Exactly. My favorite example is in the 1,900 sixtys oil.

00:32:39.000 –> 00:32:48.000
After 100 years over to coal is the world’s number one energy source, and today, the world is using up more than 3 times as much coal and read.

00:32:48.000 –> 00:32:52.000
Last year coal consumption went up several percentages.

00:32:52.000 –> 00:32:57.000
So I take a So I think, actually, the direction is clear.

00:32:57.000 –> 00:33:03.000
I think that achieving the goals that particular goal by 2,050.

00:33:03.000 –> 00:33:18.000
I think it’s going to be quite challenging and difficult and I think it’s embraced in I mean countries have embraced it, but not necessarily their policies, and I think they’re kind of 4 question marks that I

00:33:18.000 –> 00:33:24.000
would point to about it. Number one is that there seems to be a new North South divide.

00:33:24.000 –> 00:33:33.000
Some of you may remember, the North South Divide was a feature of the energy term oil of the 1,900 seventys, and this is over climate.

00:33:33.000 –> 00:33:46.000
I chaired a a a panel with a group of African energy ministers, and they were all in favor of dealing with climate, but they also had other imperatives which is poverty, economic growth.

00:33:46.000 –> 00:33:57.000
Improved health, rising standards of living, and they want to use more natural gas, so that they can eliminate the women.

00:33:57.000 –> 00:34:04.000
Gathering wood and then cooking, for, you know, spending hours gathering wood and then indoor air pollution, which is a huge environmental problem.

00:34:04.000 –> 00:34:14.000
And you yes, 2 cases examples. one. I was very struck by what the the Energy minister from Senegal said.

00:34:14.000 –> 00:34:25.000
She said she was very upset because European banks refuse on climate grounds to finance the natural gas pipeline in Senegal, and she said, But that natural gas is the latter.

00:34:25.000 –> 00:34:37.000
We need to. We raise our standard of living you know your per capita income, and Brussels is 12 times our per capita income, and she said, You’ve taken away the latter by not providing finance what are we supposed to

00:34:37.000 –> 00:34:44.000
do jump or fly. And then India is spending 60 billion dollars to build out a natural gas supply system.

00:34:44.000 –> 00:34:51.000
So I think there is in practical terms a a gap between developed and developing nations.

00:34:51.000 –> 00:34:59.000
On this Europe is clearly at the forefront. Us is there as well read, since you, you know, worked on renewables.

00:34:59.000 –> 00:35:03.000
You know the cost of renewables has come down we talk about a shell revolution.

00:35:03.000 –> 00:35:08.000
There’s also been a solar revolution solar costs are way down 80 90%.

00:35:08.000 –> 00:35:15.000
So our so is our wind costs but I think there’s that gap.

00:35:15.000 –> 00:35:22.000
I think the second one is you know just the financial or maybe it’s not the second.

00:35:22.000 –> 00:35:38.000
But I mean things work very well in powerpoint and I run an energy security seminar at proteins, and somebody had their powerpoint that demonstrated that it was even easier to get to the 2,030 goals But then

00:35:38.000 –> 00:35:53.000
there’s the real world, and I was very impressed by a French professors here in Washington at the Peterson Institute, who wrote a paper’s name is John Pasani Ferry, saying that in fact, if and

00:35:53.000 –> 00:36:05.000
he’s found it the leading energy economic think tank in Europe visor to President Macron. You know he’s on board and climate, but he says if you try and push the 2050 goals into 2,000 thirtys

00:36:05.000 –> 00:36:13.000
You’re, gonna have a lot of economic turmoil it’s going to be very disruptive, and of course he’s a Frenchman, and he’s aware of the yellow jackets as they were called or the and you know

00:36:13.000 –> 00:36:22.000
that there will be a political reaction to it as well. And as we saw this energy crisis in Europe last autumn, you know, I was wondering.

00:36:22.000 –> 00:36:25.000
Is this a one off at the same time as the Classical Climate Conference?

00:36:25.000 –> 00:36:29.000
Or is this kind of what this economist was talking about?

00:36:29.000 –> 00:36:32.000
Is it going to be more turmoil so I think it’s an open question?

00:36:32.000 –> 00:36:38.000
I think one other thing I would mention and this is suddenly getting a lot of attention.

00:36:38.000 –> 00:36:55.000
It’s one thing to build some wind turbines and to have some electric cars, but we’re are moving from as the, Ia put it, from a liquid fuel, a fossil fuel or

00:36:55.000 –> 00:37:04.000
hydrocarbon based energy economy to one that’s based upon metals, and that the demand and I don’t know if read or others are looked at.

00:37:04.000 –> 00:37:14.000
The demand for metals is going to skyrocket as you’re trying to make this transition I’m just I just came.

00:37:14.000 –> 00:37:19.000
We’re working on a study on copper and taking the 20 over 50 goals and saying how much copper will you need?

00:37:19.000 –> 00:37:23.000
And, by the way, only about half that amount of copper is available.

00:37:23.000 –> 00:37:26.000
Now, and it takes a really long time to build a copper.

00:37:26.000 –> 00:37:30.000
Any mine in the Us. probably forever to open a new mind.

00:37:30.000 –> 00:37:44.000
So, and but if this is really risen to have been a great concern here, and and Brussels, I am up to the paper on it, really concerned about the supply chains and the cost of them, and by the way, those supply

00:37:44.000 –> 00:37:53.000
chains many of them run through China, you know, if you talk about copper or lithium, So this could be efforts to restore re rebase.

00:37:53.000 –> 00:37:58.000
But the demand is going to increase, so there may be just a I mean.

00:37:58.000 –> 00:38:03.000
We were just working at this afternoon. Is there going to be a supply constraint?

00:38:03.000 –> 00:38:10.000
On how fast this this can go as you really accelerate.

00:38:10.000 –> 00:38:13.000
You know all the automobile makers say 2030 or 2035.

00:38:13.000 –> 00:38:24.000
They’re gonna go all electric. Well, what about the Lithium and the cobalt supplies and half the world’s cobalt currently comes from the democratic Republic of the Congo.

00:38:24.000 –> 00:38:35.000
Where you know the prevalence of child miners is is is not scarce, and you know Esg. investors will be looking at that as well.

00:38:35.000 –> 00:38:39.000
So so I think it’s kind of a long long answer to your question.

00:38:39.000 –> 00:38:44.000
Read. The direction is, I think, absolutely clear in which things are moving.

00:38:44.000 –> 00:38:55.000
Whether achieving them is going to and to what degree and how the economics will shape got shake out is unclear.

00:38:55.000 –> 00:39:00.000
What we do know is your is really gonna step on it as having closed down nuclear.

00:39:00.000 –> 00:39:07.000
And I saw there’s a question about nuclear in Germany gonna step on renewables to for alternatives.

00:39:07.000 –> 00:39:13.000
So they’re not using this that much gas to generate electricity.

00:39:13.000 –> 00:39:18.000
Well, it’ll be a relief. to the rest of the audience that this is my last prepared question.

00:39:18.000 –> 00:39:26.000
Okay, can I ask what so i’m just gonna add one thing before, i’ll just say you know, we all see particularly now, with high gasoline prices?

00:39:26.000 –> 00:39:33.000
We see the term big oil in headlines, and we see big oil, you know, when you turn on your television or whatever.

00:39:33.000 –> 00:39:44.000
But I think what the bottom line of what I was just describing about minerals will move from a focus from big oil, I think, to very big shovels for mining.

00:39:44.000 –> 00:39:51.000
Sorry your last question. No, and and encourage people to put their questions in the chat.

00:39:51.000 –> 00:39:54.000
We’ll see if we can figure out a way to organize them.

00:39:54.000 –> 00:40:00.000
But The energy market essentially is electricity and transportation.

00:40:00.000 –> 00:40:14.000
And now cost effective alternatives to call, and natural gas has completely upended electricity markets globally, whether in the Us.

00:40:14.000 –> 00:40:24.000
Europe or India, but for a 100 years oil has had on our monopoly, on transportation field, which is giving them enormous profits.

00:40:24.000 –> 00:40:33.000
The arrival of the electric vehicle tells us that that monopoly is about to be shattered, and I think your point about the duration of energy transitions.

00:40:33.000 –> 00:40:38.000
But there’s another staple of environmental powerpoints in this time.

00:40:38.000 –> 00:40:44.000
That it shows fifth avenue in new York City, and say I can’t remember the year exactly.

00:40:44.000 –> 00:40:54.000
But let’s say 1914 and it’s filled with horses, and 4 years later, 8 years later, so with cars and not a horse and site.

00:40:54.000 –> 00:41:00.000
So they transition can happen quickly if the technology is more attractive.

00:41:00.000 –> 00:41:09.000
Now i’m reminded of a an anecdote that former Cia director, Jim Wolsey.

00:41:09.000 –> 00:41:14.000
Sure you’ve heard it in the nineteenth century salt.

00:41:14.000 –> 00:41:19.000
We was a strategic commodity, because it was the only way to preserve meat.

00:41:19.000 –> 00:41:28.000
Odd as it seems today’s salt minds national power and wars were even far.

00:41:28.000 –> 00:41:40.000
Yeah, it’s my last one I gotta get in right So the question is, technology change in the form of refrigeration made salt useful, but not strategic.

00:41:40.000 –> 00:41:49.000
Today all the smartest people at Yale harvard Stanford, mit, thank God or not, going into mergers and acquisitions.

00:41:49.000 –> 00:42:05.000
They’re going to try to solve climate change through innovation? Do you think that technology change like an innovation can make oil like salt become useful, but not strategic?

00:42:05.000 –> 00:42:21.000
Pc. signs of that in the near future. Well, I think that the turnover, the automobile fleets is I think that I think all oil demand probably is going to continue to increase into the early 20 thirties and Then as the

00:42:21.000 –> 00:42:29.000
fleets change. but I think it’s harder to have electric cars and countries where you don’t really have a functioning electric stable electric power system, which is the developing world.

00:42:29.000 –> 00:42:38.000
So I think I think oil will have longer legs and even in the ieas net 0 by 2,050 scenario.

00:42:38.000 –> 00:42:44.000
There’s still, you know, 30 or 35 million barrels about a third of the world current consumption.

00:42:44.000 –> 00:42:51.000
But I think that, you know, I think maybe other minerals other minerals will take on that strategic thing.

00:42:51.000 –> 00:43:06.000
I think that’s probably right that as transportation changes. There’s still no alternative to real alternative to jet fuel on any scale.

00:43:06.000 –> 00:43:14.000
So I think there will be some parts of it. but I think the transportation system is certainly going to change, and therefore oil demand will start peeking down.

00:43:14.000 –> 00:43:19.000
So I think that makes sense. I think the other part of your question is the answers.

00:43:19.000 –> 00:43:28.000
And you know, i’m a technology optimist and I think the Ia is said, You know you have the technologies you need, you know.

00:43:28.000 –> 00:43:35.000
Don’t you know don’t exist now so I think there’s a lot of effort going on around innovation.

00:43:35.000 –> 00:43:46.000
And you know a lot of excitement and a lot of money, and as long as that funding remains constant or increases, I think that’s where things will come out.

00:43:46.000 –> 00:43:52.000
But you know innovation takes time. Your your moderner, your pfizer.

00:43:52.000 –> 00:43:57.000
Vaccine was really 30 years in development, not not 9 months in development.

00:43:57.000 –> 00:44:05.000
The shale revolution took 25 years before it got going I Think what’s happened with cars is really quite remarkable, but it’s about It’s now.

00:44:05.000 –> 00:44:18.000
What I in in the new map I have the story where a lunch in La where Elon Musk somebody was trying to sell them on the idea of a electric airplane, said i’m not interested in that electric car I might be interested in

00:44:18.000 –> 00:44:26.000
that. And musk later said, you know actually if that lunch hadn’t happened there might not be a tesla.

00:44:26.000 –> 00:44:38.000
But I think the fact that we’re now. 2019 years after that, and we’re starting I mean I can go out and start to see a lot of tesla’s on the street in Washington you know that’s that’s

00:44:38.000 –> 00:44:46.000
pretty significant, and you know, and the financial incentives to buy an electric car are very large.

00:44:46.000 –> 00:44:51.000
And right now in gasoline prices are high that’s a powerful incentive to so that’s an example of how change can occur.

00:44:51.000 –> 00:45:01.000
But it it just doesn’t. It may seem to happen overnight, but usually it take their long legs to get to overnight.

00:45:01.000 –> 00:45:11.000
Well, yes, and and a cool and the energy. 2050 is Overnight, yeah, that’s right. I mean that’s exactly this.

00:45:11.000 –> 00:45:22.000
It’s a really short time. 2030 is 8 years away. Yeah, in in the auto industry 2030 is just about already happened that have got their designs.

00:45:22.000 –> 00:45:35.000
And so so Wayne i’m not sure exactly how we’re supposed I can’t remember how we’re supposed to organize the questions whether you’re doing that or not but I have seen a couple about nuclear Dan and that

00:45:35.000 –> 00:45:49.000
usually comes up. what whether nuclear is going to have a resurgence in this context, and whether that will be long, lasting or insignificant, or just a little blip because of your green.

00:45:49.000 –> 00:45:53.000
Well, when I was researching the book, I found that there are about 60 Us.

00:45:53.000 –> 00:45:58.000
Companies and research firms in the United States are working on advanced nuclear.

00:45:58.000 –> 00:46:11.000
So I think the interest in nuclear is really back. We just had our conference, our Syria Conference, which you said we we give high marks to from marketing point of view.

00:46:11.000 –> 00:46:17.000
We’re, 3 of the industrial’s not from the energy industry, talked about small nuclear reactors.

00:46:17.000 –> 00:46:23.000
There’s President Macron of France who came in saying i’m going to wind down nuclear in his first term.

00:46:23.000 –> 00:46:26.000
Now, he said, i’m going to build 6 new reactors maybe 8.

00:46:26.000 –> 00:46:31.000
I don’t think anybody in the United States is going to build a conventional new nuclear power plant.

00:46:31.000 –> 00:46:35.000
I was told last week that there’s over 4 billion dollars of venture capital that’s gone into diffusion.

00:46:35.000 –> 00:46:42.000
So I think nuclear nuclear can have a resurgence.

00:46:42.000 –> 00:46:50.000
It will depend upon what you were just talking about innovation and That’s where the effort is right now.

00:46:50.000 –> 00:46:56.000
Meanwhile, by the way, the major supplier of uranium to the rest of the world, including the United States, is Russia.

00:46:56.000 –> 00:47:08.000
Just to note that in passing, Yeah. and and just in response, in a sense to another question on here.

00:47:08.000 –> 00:47:21.000
Clearly shifting to electric vehicles without shifting the Generation system to 0 carbon sources is quasi pointless.

00:47:21.000 –> 00:47:29.000
And so the the transitions can happen to occur in in both industries to make that happen.

00:47:29.000 –> 00:47:49.000
I work with a call. The energy transitions cool mostly out of the Uk Lord of Dare Tours, the chair of it. and they do very good analysis, and as great that by 2050 you meet the needs of a

00:47:49.000 –> 00:48:01.000
retrofine affect the entire economy. you would need to quadruple at least the production of electricity worldwide.

00:48:01.000 –> 00:48:13.000
So this is a huge huge lift. right so i’m gonna yeah, no. I was just gonna say let’s get a couple of the other questions on the table.

00:48:13.000 –> 00:48:31.000
Because we have a hard stop at 3 I wanna give a shout out, We have one from a female viewer, which, like it needs a special shout out, would you expound on your thinking about government

00:48:31.000 –> 00:48:38.000
and market shifting power. Okay, let’s Let me Take a couple of other questions, so we can you know.

00:48:38.000 –> 00:48:49.000
Be sure. Try and get more questions in sure I’m not well sorted here, but we have a question about green hydrogen as an opportunity.

00:48:49.000 –> 00:49:00.000
And the general use of this petroleum reserved.

00:49:00.000 –> 00:49:11.000
Whether that was a significant and let’s see carbon fee and dividend there’s a few different topics.

00:49:11.000 –> 00:49:17.000
Okay, So let me let me take that first one governments and markets. That’s really yeah, that’s the commanding heights question.

00:49:17.000 –> 00:49:22.000
And I mean my own interest in arose from just saying, Why was all these privatizations happening?

00:49:22.000 –> 00:49:35.000
Why was deregulation happening? Why, was the civil aviation board no longer regulating the size of sandwiches on airplanes, as Steve Breyer, now a Supreme Court just has put it to me once when

00:49:35.000 –> 00:49:47.000
we’re talking about this when I was researching the book and I think that there was a sense, you know, when it’s felt they’re built up that governments markets fail.

00:49:47.000 –> 00:49:52.000
But governments fail too, and that the vitality of markets.

00:49:52.000 –> 00:49:58.000
But I remember at the end of commanding heights writing if it seemed that markets have not done a good job if they’re seen as unfair.

00:49:58.000 –> 00:50:08.000
If there’s, big disruptions, the balance it would call it not the bounce of power, the bounce of confidence would shift back, and we’ve been in a period when the balance of confidence seems to

00:50:08.000 –> 00:50:17.000
be shifting back towards, you know, particularly after the 2,008 financial crisis towards you know, the Government needs a bigger role.

00:50:17.000 –> 00:50:21.000
Certainly in the United States this is a constant battle that goes on.

00:50:21.000 –> 00:50:28.000
This frontier is never stable. but you know, I think that was what was at the heart of the battle over build back.

00:50:28.000 –> 00:50:36.000
Better about government. do it? or is it better for markets to do it, and it’s a struggle that’s going on.

00:50:36.000 –> 00:50:46.000
The Democratic party. Compare, you know, Bill Clinton to Bernie Sanders in terms of Elizabeth Warren in terms of how people think governments and market should function.

00:50:46.000 –> 00:50:51.000
So on that point on the green. I hope that answers the question and gets it.

00:50:51.000 –> 00:50:58.000
What you’re getting at on green hydrogen for those who don’t follow it.

00:50:58.000 –> 00:51:01.000
I used to give speeches, and people would say well what about hydrogen, that’s say.

00:51:01.000 –> 00:51:11.000
Well, what about hydrogen? and then about 2 or 3 years ago? It started to be this new focus on hydrogen as going back to the kind of things that reed’s been talked about?

00:51:11.000 –> 00:51:17.000
What are the technologies that would make a difference? What would replace natural gas for heating or industrial processes?

00:51:17.000 –> 00:51:20.000
Hydrogen. And so this is now really a big focus.

00:51:20.000 –> 00:51:27.000
And you have big companies, engineering companies, oil companies, and others who have the engineering skills to do it.

00:51:27.000 –> 00:51:39.000
The difference. Blue hydrogen is where you make hydrogen as it’s made now principally from natural gas, and then the ideas you would capture the carbon sea crest sequester.

00:51:39.000 –> 00:51:54.000
The carbon green hydrogen has the idea that you would take renewed extra renewable electricity. Let’s say extra solar when the sun is really hot, and use that to split water and make hydrogen that way

00:51:54.000 –> 00:52:05.000
and get your hydrogen supply so that’s the I would call that the that’s the the great objective.

00:52:05.000 –> 00:52:11.000
Now. it’s very early days it needs to be done at scale.

00:52:11.000 –> 00:52:18.000
People say the cost of green hydrogen at this point would be 5 or 10 times higher than blue hydrogen.

00:52:18.000 –> 00:52:22.000
But the the key point is we don’t really have a hydrogen business right now.

00:52:22.000 –> 00:52:27.000
We have a hydrogen business, but it’s used for other things it’s like used for making fertilizers.

00:52:27.000 –> 00:52:39.000
So you need to create a huge hydrogen business and That would be a very big scale, and it would be big engineering strategic patrolling reserve for those who don’t follow.

00:52:39.000 –> 00:52:53.000
It was created after the crises of the 1,900 seventys, to have, like an insurance policy of your store, 600 million barrels of oil, and the Biden Administration went big big release of strategic controlling

00:52:53.000 –> 00:53:02.000
stocks. I think that was a very smart thing to do, because it puts it right now is to get more volume into the market to reduce the the scarcity that exists otherwise.

00:53:02.000 –> 00:53:15.000
And so important signal doesn’t answer the whole problem I’d like to just pause in that for a second to say Germany has made quite a turnaround from a month a month ago, or 2 months ago, where they said we can’t

00:53:15.000 –> 00:53:22.000
possibly leave Russian energy now. the other week the Germany Economics Minister said we could get off it in days.

00:53:22.000 –> 00:53:28.000
They just have basically one. refinery it’s a big problem, because it’s the refinery that supplies Berlin.

00:53:28.000 –> 00:53:33.000
But it’s it only its main supply comes directly from a pipeline from Russia.

00:53:33.000 –> 00:53:41.000
But what the what made the Germans able to be much more flexible is really close consultation with the private sector.

00:53:41.000 –> 00:53:54.000
The industry, the logistics, the people who manage it and it’s disappointing to me, and maybe this goes back to the commanding heights question that you don’t have a dialogue now between industry and government to say how do we

00:53:54.000 –> 00:54:06.000
manage what’s a major crisis which can have major economic impact. as we we did have that dialogue in 1990 during the 91.

00:54:06.000 –> 00:54:19.000
During the golf crisis we had it earlier and it’s just a pity that we don’t have that kind of dialogue to say, how can we take the pressure off the system, But it depends upon not the clash between

00:54:19.000 –> 00:54:27.000
governments and markets. but the cooperation and you know. instead, you know, we hear price gouging which doesn’t invite dialogue.

00:54:27.000 –> 00:54:32.000
I think the last question was about a carbon feat you know that’s out there.

00:54:32.000 –> 00:54:35.000
A lot of people. a lot of companies wanted because it would say would get predictability.

00:54:35.000 –> 00:54:45.000
They don’t call it a carbon tax they call It a carbon fee, but it would be a tax, and it. you know it’s a favorite solution of economists, but economists.

00:54:45.000 –> 00:54:52.000
There are not many economists in Congress and voting for another tax, at least right now is not something that people are going to do.

00:54:52.000 –> 00:54:59.000
In fact, the the effort now is to take the take off the gasoline tax, which is, although it goes for roads.

00:54:59.000 –> 00:55:05.000
It’s basically a carbon tax take it off because of the pressure on price, with the fact that an election is 7 months away.

00:55:05.000 –> 00:55:19.000
So I raced through a bunch of questions that this time for more If they’re okay I gotta give you one tough question from 10 high school pivoting off of the front line series.

00:55:19.000 –> 00:55:30.000
That you’ve probably at least been aware of last about denial, doubt away by big oil and the climate crisis.

00:55:30.000 –> 00:55:36.000
He’s he’s curious as to what you’re observation about that.

00:55:36.000 –> 00:55:48.000
It’s been over time. like most of us you were concerned about peak oil, and then it doesn’t seem to be the the problem anymore.

00:55:48.000 –> 00:55:58.000
And then it’s, peak demand fracking has arisen and followed and risen again in terms of it’s public acceptability.

00:55:58.000 –> 00:56:09.000
And meanwhile, there’s a need to disengage from fossil fuels more generally so

00:56:09.000 –> 00:56:24.000
Do do you think that there are lessons to be learned from these past iterations about how how we can encourage technological progress to make the changes we need?

00:56:24.000 –> 00:56:29.000
Well on the technological progress. I I didn’t see the Pbs series, so I don’t.

00:56:29.000 –> 00:56:31.000
I can’t comment on it. I headed a task force on energy R.

00:56:31.000 –> 00:56:47.000
And D for the Department of Energy some years ago, and came away saying that you know the most important thing is your your investment in in research and development and innovation and sciences and research in engineering That’s where the answers will come

00:56:47.000 –> 00:56:54.000
from the on shale. I mean the person Who’s really accepted shale.

00:56:54.000 –> 00:57:06.000
Now is Joe biden and the recognition that that that the shale revolution, the environmental concerns about shale have been mostly dissipated.

00:57:06.000 –> 00:57:18.000
It’s it’s made the us the world’s largest oil producer, largest gas producer largest Lng exporter, and I think it’s really seen as a strategic asset for the United States that’s

00:57:18.000 –> 00:57:25.000
why Biden has told Europe will provide more lng and the Europeans now regard.

00:57:25.000 –> 00:57:33.000
You know they’re now looking to us lng us natural gas as a strategic asset for them, and a critical asset for them.

00:57:33.000 –> 00:57:40.000
So I think that’s a a big turnaround to say that this you know.

00:57:40.000 –> 00:57:44.000
Obviously it’s an industrial activity and has to be regulated properly.

00:57:44.000 –> 00:57:51.000
But it’s better you know we still don’t have very many electric cars on the road.

00:57:51.000 –> 00:58:03.000
Better that they? you know that the the money that goes into you know, developing and paying for oil stays in this country rather than going into some sovereign wealth fund somewhere.

00:58:03.000 –> 00:58:09.000
So, and it’s turned out to be a real you know flexibility.

00:58:09.000 –> 00:58:15.000
I mean, you know I have that anecdote in the book where I was at another one of those St.

00:58:15.000 –> 00:58:22.000
Petersburg International Economic Forums, and I was asked the first given the first question to ask.

00:58:22.000 –> 00:58:28.000
Putin putin and Merkle were up there on the stage, and it’s asking in the normal question, What are you gonna do about diversifying your economy?

00:58:28.000 –> 00:58:43.000
And I mentioned shale, and he started shouting at me and saying, shale is barbaric, and everything and I realized afterwards, and it’s very unpleasant in front of 3,000 people I I realized afterwards that for him us

00:58:43.000 –> 00:58:55.000
shale was a big problem, because a our gas would compete with his in Russia, which is exactly what’s happening today, and is so critical for the outcome of this war and the ability to maintain the coalition and that it

00:58:55.000 –> 00:58:58.000
would give the us a kind of flexibility in the world it didn’t have.

00:58:58.000 –> 00:59:06.000
One is importing 60% of its oil so it’s a form of, you know, an important form of innovation as well.

00:59:06.000 –> 00:59:09.000
So I think you know the energy mix is going to change.

00:59:09.000 –> 00:59:14.000
Hydrocarbons will be less important. Renewables will become more important.

00:59:14.000 –> 00:59:21.000
Hydrogen, you know. I think it probably will become a significant energy resource.

00:59:21.000 –> 00:59:28.000
Carbon capture will be important batteries will improve which is you know, will make renewables a more base load rather than intermittent.

00:59:28.000 –> 00:59:36.000
And then there’s a lot of white space where new technologies are going to come that we very few people have a clue of that will change things.

00:59:36.000 –> 00:59:43.000
When Elon Musk first came out with the Tesla, it was just considered a Oh, this is an interesting oddity.

00:59:43.000 –> 00:59:53.000
Thomas Edison is alive again. and look at how it’s changed things so massive, you know, there will be technology that will bring massive changes.

00:59:53.000 –> 01:00:03.000
You just Can’t, you just have to leave white space for it and make sure you fund what’s necessary to get to that white space.

01:00:03.000 –> 01:00:08.000
Well, Dan, the hour of 3 o’clock, having arrived I was gonna ask you for a sum up answer.

01:00:08.000 –> 01:00:13.000
But in your still free to offer it. But your last answer came to me to be pretty.

01:00:13.000 –> 01:00:28.000
Darn close to exactly that. as usual you’ve shown your mastery of an incredibly complex both I economic and geopolitical subject.

01:00:28.000 –> 01:00:36.000
We’ve ranged all over the map literally but within an hour I don’t know what more we can do.

01:00:36.000 –> 01:00:44.000
So i’m gonna say, thank you and remote people that there will be breakouts by college. I see.

01:00:44.000 –> 01:00:57.000
Wayne standing by to to say that but if you want to say a few last words, Dan. while all the chats come in with all the Thank you, as i’m seeing come across the screen right now feel free to to offer a

01:00:57.000 –> 01:01:05.000
concluding thought. But I just want to thank everybody for taking an hour to discuss this subject, and for the chance to share some of the thinking with it.

01:01:05.000 –> 01:01:13.000
And and to wish you all well, whatever class you are and whenever your reunions are so, it’s great to be with you.

01:01:13.000 –> 01:01:19.000
So again. Many thanks for this opportunity. Thank you. Take care, everybody.