Speaker 1: Welcome to Zero. I am Akshatrati. This week Asia's Ukraine Moment.
Speaker 1: It's been more than three months since the US attacked
Speaker 1: Iran and Iran responded by closing the Strait of hormones.
Speaker 1: The world has moved beyond the idea that this is
Speaker 1: a short term crisis, and many countries are now beginning
Speaker 1: to take longer term measures to cope with the disruption
Speaker 1: to nearly twenty percent of the world's oil and gas
Speaker 1: supply that used to flow through the strait. I've been
Speaker 1: tracking what kind of measures countries are taking, and all
Speaker 1: that reporting, I'm pleased to say, is now a big
Speaker 1: feature for Bloomberg News, with great charts and photos that
Speaker 1: I hope you will read. We will link it in
Speaker 1: the show notes. But as with any story, there's much
Speaker 1: more to talk about than ends up on the page.
Speaker 1: This energy shock, after all, comes just four years after
Speaker 1: the other one that was precipitated by Russia's attack on Ukraine,
Speaker 1: and dual shocks of this kind, like those in the
Speaker 1: nineteen seventies, can have a deep impact on the energy system.
Speaker 1: So to discuss the story, I have invited my editor
Speaker 1: Peter Guest to ask me the questions instead, Peter, welcome
Speaker 1: to the show. Thank you.
Speaker 2: So actually we're recording this May twenty seven, and things
Speaker 2: may change. But what's the state of the closure of
Speaker 2: the Strait of Hormones.
Speaker 1: It is virtually closed. So we are colleagues here track
Speaker 1: the ships that go through the Strait of Hormues, but
Speaker 1: the numbers are something like ninety to ninety five percent closure.
Speaker 1: So some ships still go through, but almost no oil
Speaker 1: and gas from the inside of the strait is getting
Speaker 1: out these days. And it's been the case for the
Speaker 1: last three months.
Speaker 2: And even if the strait was to open in immediately,
Speaker 2: how serious would just that three months be.
Speaker 1: So before the closure there were about one hundred ships
Speaker 1: going in and out on a daily basis. It's going
Speaker 1: to take months if the street was completely open, for
Speaker 1: all the hundreds of ships that are trapped inside the
Speaker 1: street just to get out. And so the soonest you
Speaker 1: could see relief is months out. And if you look
Speaker 1: at the future price of oil, which is a good
Speaker 1: indicator of how the market thinks this disruption will play out, well,
Speaker 1: oil prices are not expected to fall below the seventy
Speaker 1: dollars a barrel, which is what it was before the
Speaker 1: war till until twenty twenty eight. And it isn't just
Speaker 1: high prices, right, it's also volatile. These things have swung
Speaker 1: often just on the basis of a news report from
Speaker 1: the Iranian media or a Trump tweet. Yes, I mean
Speaker 1: the last three months, you know, we could say the
Speaker 1: oil price has hovered around one hundred dollars a barrel,
Speaker 1: but really a post from Trump on truth social will
Speaker 1: drop it five to ten percent sometimes, and then a
Speaker 1: denial from the Iranian semi official Fars news agency will
Speaker 1: increase it again two to four percent. And it just
Speaker 1: happens far too often. But I think one hundred dollars
Speaker 1: is sort of a psychological number that plays on people's
Speaker 1: mind that energy has become far too expensive.
Speaker 2: To use given the scale of that disruption. Now, why
Speaker 2: hasn't the price gone up even more?
Speaker 1: Yeah? So, we had Jason Border of Columbia University on
Speaker 1: the podcast one week after the war began, and he
Speaker 1: described the closure of the strait as the nightmare of
Speaker 1: all scenarios for the oil and gas markets, and he
Speaker 1: expected the price to grow up. And you know, since
Speaker 1: then he's been giving many more interviews about this, and
Speaker 1: he's like I am still surprised why the price has
Speaker 1: not gone up to two hundred dollars a barrel. Now
Speaker 1: we know there are a few factors that have played
Speaker 1: a role to keep the price at only about one
Speaker 1: hundred dollars a barrel. One is that before the war started,
Speaker 1: there was already more supply on the market than there
Speaker 1: was demand, so there was an expectation something like three
Speaker 1: million barrels a day higher supply this year relative to
Speaker 1: how much demand there was. There was a bunch of
Speaker 1: oil sanctioned oil that was floating on ships in the ocean,
Speaker 1: mostly Russian and Iranian oil. That oil was then unsanctioned
Speaker 1: by America during the week's past, and much of that
Speaker 1: oil found buyers in Asia, including in India. And there
Speaker 1: are two pipelines, one from Saudi Arabia going to the
Speaker 1: Red Sea which is not blocked, and one from the
Speaker 1: Ue going into the Arabian Sea, which is allowed for
Speaker 1: something like five to seven million barrels of oil per
Speaker 1: day to get out. Still, before the war, nearly twenty
Speaker 1: million barrels per day was coming out. So it's still
Speaker 1: a pretty bad shock, but the price doesn't reflect it,
Speaker 1: and we keep getting told by analysts that at some
Speaker 1: point this physical shortage will show up in price.
Speaker 2: Let's see, and as we say, the price isn't necessarily
Speaker 2: the deepest signal of what's going on. It tends not
Speaker 2: all of other things. But how are we actually done
Speaker 2: to see supply shortages impact countries, economies, individuals, businesses around
Speaker 2: the world. Where are we seeing the greatest impact?
Speaker 1: As you know, the fossil fuel industry just has these
Speaker 1: boom and bus cycles, and they go through a high
Speaker 1: price and a low price environment pretty much cyclically. Almost
Speaker 1: every decade, there'll be a point where prices go up
Speaker 1: a lot, and countries, especially feel importing countries have developed
Speaker 1: a playbook on how to deal with high energy prices,
Speaker 1: and so what we typically see is rich countries that
Speaker 1: have money to spend will try and help consumers not
Speaker 1: feel that shock by either cutting fuel taxes or directly
Speaker 1: subsidizing fuels at some point, and poorer countries, which do
Speaker 1: not have that physical capacity, will typically put out notifications
Speaker 1: around be more frugal with your energy used, try to
Speaker 1: work from home, if you can, make public transport cheaper
Speaker 1: for people to use. And we saw in the aftermath
Speaker 1: of the war, within the first few weeks those types
Speaker 1: of immediate, short term measures being put in place. The
Speaker 1: International Energy Agency has put a policy tracker where it
Speaker 1: looks at all the countries that are doing it, and
Speaker 1: we put that in our story and we see something
Speaker 1: like eighty countries have had some form of energy conservation
Speaker 1: measure or some form of pricing management measure. But these
Speaker 1: are short term measures, and the longer this crisis lasts,
Speaker 1: the weaker they are in impactors on actually doing the
Speaker 1: job that they're supposed to do, which is protect the consumer.
Speaker 2: Maybe took me through some of those measures, all sort
Speaker 2: of things that we've seen.
Speaker 1: So Philippines is a good example because it probably deployed
Speaker 1: some of the most number of these measures. They instituted
Speaker 1: a four day work week for public officials. They encourage
Speaker 1: that people limit the use of air conditioning to twenty
Speaker 1: four degrees celsius. They said all government officials should end
Speaker 1: any non essential travel. You know, in some cases, and
Speaker 1: there's not just the Philippines, but a few countries have
Speaker 1: declared a national energy emergency, allowing them to do things
Speaker 1: that in normal operation they won't be able to. Philippines
Speaker 1: has also made bus rides free and has tried to
Speaker 1: encourage people to work from home if they can.
Speaker 2: Well, I mean these aren't quite short term measures, right
Speaker 2: as you say, there's a limited amount of fiscal space
Speaker 2: to keep on subsidizing. So am we starting to see
Speaker 2: now three months in more comprehensive long term shifts start
Speaker 2: to come into play.
Speaker 1: Yeah, So this is something that right on the weekend
Speaker 1: of the war is something that we and the Green
Speaker 1: team started discussing because we experienced what happened when Russia
Speaker 1: attacked Ukraine and the policy response that came from European
Speaker 1: governments within weeks, and so this time we wanted to
Speaker 1: be prepared because if countries put policies in place, that
Speaker 1: has much longer term impact on how the energy system works.
Speaker 1: So you know, all of the team was like looking
Speaker 1: for places where countries start to make these policy changes.
Speaker 1: And unlike in twenty twenty two, where there was a
Speaker 1: clear aggressor in Russia and there was a clear dependence
Speaker 1: in Europe from Russia for all the fossil fuels they
Speaker 1: were importing, and there was some form of coordination within Europe,
Speaker 1: it took much longer for Asia to react in policy
Speaker 1: terms than it took Europe to react when the twenty
Speaker 1: twenty two crisis played out, but we have seen policies
Speaker 1: come through. So again I'll bring up the example of
Speaker 1: Philippines because it's an example where it didn't just do
Speaker 1: the short term things. It started thinking long term. So
Speaker 1: it put out loan programs for people to get rooftop
Speaker 1: solar and to get electric bikes. It had a bunch
Speaker 1: of renewable projects that it had approved and some of
Speaker 1: them were even constructed, and it put out a dictat
Speaker 1: saying we will connect all these to the grid by
Speaker 1: the end of April twenty twenty six. Not all of
Speaker 1: them happened, but we know from on the ground reporting
Speaker 1: that many of them did get sped up as a result.
Speaker 1: We also saw long term measures in Europe because despite
Speaker 1: the crisis hitting Asia the hardest this time around, European
Speaker 1: oil and gas prices have also gone up. So the
Speaker 1: EU came out with a large plan called Accelerate EU,
Speaker 1: which looks at trying to electric the economy as fast
Speaker 1: as possible. But it's the European Union they're putting out
Speaker 1: a statement. It's countries that have to put out the policies.
Speaker 1: The first one to come out with a clear policy
Speaker 1: stance was France, and France has for the past few
Speaker 1: years since the Ukraine crisis, actually have more electricity than
Speaker 1: it consumes. So it has become one of the biggest
Speaker 1: exporters of electricity to the rest of Europe, and it
Speaker 1: would much prefer if that electricity was used domestically, and
Speaker 1: so it came out with a plan to try and
Speaker 1: increase the deployment of electricity consuming devices. So there are
Speaker 1: now subsidies that they already had on electric cars and
Speaker 1: on heat pumps, but they've been doubled in price. They've
Speaker 1: also become more targeted. So new homes that are being
Speaker 1: built in France can no longer as of the end
Speaker 1: of this year, have a gas boiler in them. They
Speaker 1: will have to come up with a heat pump. Similar
Speaker 1: policies were also brought in here in the UK where
Speaker 1: we are where new homes cannot have gas boilers now
Speaker 1: they'll have to have heat pumps. There's also been pushed
Speaker 1: to try and increase the sale of electric cars, so
Speaker 1: we saw policy changes in Germany and Spain where governments
Speaker 1: are spinning up the network for electric car charging, and
Speaker 1: that alongside the existing incentive that they have to buy
Speaker 1: electric cars. We've already seen electric car sales numbers skyrocket,
Speaker 1: so it is still early days, but we are starting
Speaker 1: to see policy change, and this policy change is what
Speaker 1: will really make a difference.
Speaker 2: So we'll come back to twenty twenty two, but in
Speaker 2: your PC, we actually start further back and look at
Speaker 2: the energy stock that happened in the nineteen seventies and
Speaker 2: how structural changes happened. Then maybe come back to that comparison.
Speaker 2: First of all, what happened then how did it reshape
Speaker 2: the energy mix?
Speaker 1: So the nineteen seventies oil shock, two of them, one
Speaker 1: in nineteen seventy three because of the Yom Kippur War,
Speaker 1: and then the nineteen seventy nine oil crisis was precipitated
Speaker 1: by the Iranian Revolution. Both those shocks are talked about
Speaker 1: a lot because of the share of the global oil
Speaker 1: supply that was disrupted as a result. So really, until
Speaker 1: this energy crisis in twenty twenty six, no energy supply
Speaker 1: shock had been as large as the supply shocks in
Speaker 1: the nineteen seventies. And I wanted to look at the
Speaker 1: nineteen seventies because there is something powerful that happens when
Speaker 1: there are these deep shocks coming in quick succession, so
Speaker 1: seventy three seventy nine, six years apart. We have very
Speaker 1: oil dependent economies, and so what we saw after the
Speaker 1: seventies is a series of policy changes, both in America
Speaker 1: and Europe that led to, for example, in the electricity mix,
Speaker 1: a rapid decline in oil consumption. So countries like France
Speaker 1: and Japan put their government might behind building nuclear power plants.
Speaker 1: Nuclear had just started to become a real source of
Speaker 1: power for the world Atoms for Peace program that started
Speaker 1: after World War Two, but really France and Japan and
Speaker 1: the scale of their deployment tens of reactors within a
Speaker 1: decade that were built, allowed nuclear to become cheap and
Speaker 1: more widely accessible, and oil disappeared from the European electricity
Speaker 1: mix within a decade. In the US and in Canada,
Speaker 1: we saw some nuclear deployment but also the return of coal.
Speaker 1: So oil had started to replace coal because oil was
Speaker 1: a better energy source and was cheaper. So there were
Speaker 1: both sort of positive things because you got a non
Speaker 1: carbon source in nuclear, but a negative thing in that
Speaker 1: coal returned. We also saw that countries used the moment
Speaker 1: to come up with fuel efficiency standard so before the seventies,
Speaker 1: car makers could make whatever cars they wanted. But after
Speaker 1: the seventies and nineteen seventy four is when the US
Speaker 1: introduces the car fuel efficiency standards. Suddenly, within a decade,
Speaker 1: cars are essentially going twice the distance per gallon compared
Speaker 1: to the cars that you could buy in the nineteen seventies,
Speaker 1: and the numbers are rather astonishing. US oil consumption actually
Speaker 1: declined in the eighties before it started to rise again
Speaker 1: because oil became cheap again in the eighties, But that
Speaker 1: policy had an impact not just in America, in Europe too,
Speaker 1: So Europe did not come up with fuel efficiency standards
Speaker 1: still the nineties, and yet because of high fuel prices
Speaker 1: and the availability of more fuel efficient cars and smaller cars,
Speaker 1: even the mileage of European cars improved in that time.
Speaker 1: So to me, the nineteen seventies were just an astonishing
Speaker 1: time to see how the energy makes can rapidly change
Speaker 1: when with a crisis, and I wanted to see if
Speaker 1: there were parallels from that time to now.
Speaker 2: And that change comes as a result of combination of policy,
Speaker 2: consumer action, and technology. Right, fuel efficiency this time around,
Speaker 2: it's going to be the same. Right this time the
Speaker 2: technology is electric correct. This time it is the same
Speaker 2: three steps, but more options to play for. So yes,
Speaker 2: you could, if you're a country so committed to nuclear,
Speaker 2: choose to move away from natural gas to nuclear. But really,
Speaker 2: right now most countries are looking to an option that
Speaker 2: was not available in the nineteen seventies, which is being
Speaker 2: able to build cheap solar and wind and combine them
Speaker 2: with batteries. So on the electricity mix there are more fuel.
Speaker 1: Switching choices available. And then on efficiency side, it's not
Speaker 1: just trying to make your internal combustion engine, which is
Speaker 1: now one hundred and fifty years old, that much more efficient.
Speaker 1: It is going electric. So now with an electric car
Speaker 1: you can use the same unit of energy to go
Speaker 1: three times the distance compared to a fossil fuel car.
Speaker 1: And for the first time, these electric cars are affordable,
Speaker 1: so even more than the twenty twenty two shock, twenty
Speaker 1: twenty six is a time when the number of car
Speaker 1: models that are available, the affordability of those car models,
Speaker 1: and the number of countries where we are seeing the
Speaker 1: sales is astonishingly large. So you get this difference in
Speaker 1: the twenty twenty shock, which allows you to have more options,
Speaker 1: and that is likely to shape reshape the energy system.
Speaker 2: And when we're talking about the economics of electrification and
Speaker 2: renewable energy, we're talking about China. Right, China's changed the game.
Speaker 2: Maybe you don't be through that.
Speaker 1: So China's case, which we've talked about a lot on
Speaker 1: this podcast, is one that we typically say, oh, it's
Speaker 1: the world's largest deployer of these clean andergy technologies, makes
Speaker 1: the most amount of solar and batteries and electric cars,
Speaker 1: and makes it the cheapest, and does it not just
Speaker 1: for domestic consumption, which is huge, but really for exports
Speaker 1: and makes billions of dollars as a result of those exports.
Speaker 1: But those decisions took a long time to bear fruit.
Speaker 1: And China was thinking about the disclosure of the Strait
Speaker 1: of Hormones or other choke points like the Strait of Malaca,
Speaker 1: which is close to Singapore, and what that might do
Speaker 1: to it because in a war save with America, these
Speaker 1: choke points that used to be controlled by America could
Speaker 1: be shut and suddenly this fossil fuel import dependent country
Speaker 1: that is China, which has cold but really doesn't have
Speaker 1: much oil and gas, will have to find ways to
Speaker 1: get those fuels. And so it started to do a
Speaker 1: bunch of things. One, it built a huge storage network
Speaker 1: for its oil. It also created a huge numbers of
Speaker 1: plants that convert coal right now into chemicals but can
Speaker 1: be really quickly switched to making liquid fuels or gaseous fuels,
Speaker 1: depending on whatever you want. But it also had these
Speaker 1: five year plans to create new industries that would convert
Speaker 1: its usage of energy from fossil fuels to renewables, and
Speaker 1: that took a while, but it's paying off. The energy
Speaker 1: prices in China compared to other economies, haven't gone up
Speaker 1: that much. The government has been able to absorb a
Speaker 1: bunch of it. We had reporting in April, for example,
Speaker 1: that some of the Chinese oil companies were actually selling
Speaker 1: off their cargoes to European countries where they could make
Speaker 1: more money because they had plenty of oil for themselves
Speaker 1: at that time. It's a vindication of an energy security strategy,
Speaker 1: because that is how China's thought about this. It's not
Speaker 1: really for climate goals. It's from an economic perspective and
Speaker 1: from a security perspective that it's worked out for them,
Speaker 1: and I think other countries may not be able to
Speaker 1: replicate what China has done but can certainly take advantage
Speaker 1: and learn from what China has been able to do.
Speaker 1: After the break, Peter and I discussed whether this crisis
Speaker 1: is the kick up the backside the world needed to
Speaker 1: begin the transition away from fossil fuels. And Hey, if
Speaker 1: you like what you're listening to and want to help
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Speaker 1: a rating, write us a review, and share this episode
Speaker 1: with someone else who think might enjoy it. It helps
Speaker 1: new listeners find the show. Thank you.
Speaker 2: For so long the conversation has been inflected very heavily
Speaker 2: by the idea of climate concerns, But what is really
Speaker 2: driving the shifts that are kind of macro scale is security.
Speaker 2: So let's look go back to twenty twenty twenty two,
Speaker 2: because we mentioned earlier Europe has been talking about shifting
Speaker 2: to renewable energy for a variety of reasons for some time.
Speaker 2: Then February twenty twenty two, Russia launched a fall scale
Speaker 2: invasion of Ukraine. Europe is very dependent on Russian gas
Speaker 2: and suddenly has a choice to make. So it's February,
Speaker 2: it's cold. What did they do well?
Speaker 1: We had within two weeks a plan from the International
Speaker 1: Energy Agency and then from the European Union itself laying
Speaker 1: out the steps that they will take to wean the
Speaker 1: block from Russian fossil fuels. So about forty percent of
Speaker 1: its natural gas came from piped natural gas from Russia,
Speaker 1: which is a huge amount, and so the first thing
Speaker 1: they did was try to find gas from other places.
Speaker 1: There are some pipe gas networks in northern Africa, some
Speaker 1: in the Mediterranean, but that was only going to solve
Speaker 1: five ten percent of the problem. So they looked to
Speaker 1: the US, which had become the world's largest gas supplier,
Speaker 1: partly because of the nineteen seventies, where the one of
Speaker 1: the policies that the government invested in was to try
Speaker 1: and invest in the invention of fracking as we know it,
Speaker 1: so drilling for shale, and that has allowed America to
Speaker 1: become the world's largest producer of oil and gas. And
Speaker 1: so to go to America for some of its gas
Speaker 1: supplies through liquified natural gas, or to Katar, which is
Speaker 1: the other large gas supplier, then it did the thing
Speaker 1: that we expect countries in the twenty twenties to do now,
Speaker 1: which is to look to other fields like renewables and
Speaker 1: start to deploy them faster. So Europe already had one
Speaker 1: of the world's most ambitious climate goals and had targets
Speaker 1: to reach these renewables figures. But the thing that was
Speaker 1: holding it back was not money or target setting. It
Speaker 1: was bureaucracy. The like most governments are bureaucratic. You have
Speaker 1: to go through a bunch of permitting processes, environmental assessments
Speaker 1: before you can deploy your renewables solar or wind, or
Speaker 1: even transmission network that is necessary, and so we saw
Speaker 1: lots of countries really speed up the deployment. Germany is
Speaker 1: the example I reported on in twenty twenty three, which
Speaker 1: I think did the most. So we saw it past
Speaker 1: laws that made the states in Germany dedicate two percent
Speaker 1: of their land to clean energy. They reduced the number
Speaker 1: of environmental assessments that need to be done for clean
Speaker 1: energy projects. They declared many clean energy projects as national
Speaker 1: security importance. That allowed them to go through the bureaucracy faster,
Speaker 1: and suddenly we could see in the numbers. There was
Speaker 1: a boom in solar in Europe in twenty twenty two
Speaker 1: and twenty three, and then after that there was in
Speaker 1: twenty three and twenty four a boom in battery deployment,
Speaker 1: and within four years of these deployments, Europe is already
Speaker 1: taking advantage of this cheap power. So power prices in
Speaker 1: places like Spain and Portugal and Germany and even in
Speaker 1: the UK have not gone anywhere close to the levels
Speaker 1: that they had reached during the Ukraine crisis. In this
Speaker 1: Iran War crisis, so you know, we saw three hundred
Speaker 1: and four hundred percent increase in power prices in twenty
Speaker 1: twenty two. This time they went up maybe one hundred
Speaker 1: percent at one point, but for a very little period,
Speaker 1: and now they're about fifty percent higher for gas consumption today.
Speaker 1: So you can see that the playbook is changing and
Speaker 1: countries are learning that the new technology set allows you
Speaker 1: to speed up the change in the energy system in
Speaker 1: ways that wasn't possible in the past.
Speaker 2: And you say in the piece that this is this
Speaker 2: is Asia's Ukraine moment. So they're following the same pathway.
Speaker 1: Now, yes, except that unlike Ukraine, Asia doesn't have one enemy.
Speaker 1: It's not like the Middle East is the enemy, and
Speaker 1: so there isn't as much coordination and there isn't as
Speaker 1: much planning across governments as would happen in the EU,
Speaker 1: but we know there are blocks in Asia. So the
Speaker 1: RCN block is trying to build an interc cocted grid
Speaker 1: that would allow countries to be able to trade a
Speaker 1: lot of their clean energy resources that they're starting to deploy.
Speaker 1: We heard from world leaders, we heard from the South
Speaker 1: Korean president, from the Indonesian president, from the Vietnamese prime minister,
Speaker 1: all saying we want more renewables, we want more electrification.
Speaker 1: We'll see if they are able to deploy it at
Speaker 1: the scale that Europe managed. These are not countries that
Speaker 1: have the same financial heft or planning ability that European
Speaker 1: countries have, but they do have something going for them.
Speaker 1: So one of the analysts I spoke to at Ember,
Speaker 1: Dinita Satyavati, was talking about the fact that developing countries
Speaker 1: are building out their energy infrastructure and it is easier
Speaker 1: to build new than it is to replace the old.
Speaker 1: So developed countries will struggle more, will have to pay
Speaker 1: more because they have to retire a bunch of things,
Speaker 1: whereas developing countries can choose to build clean and electric
Speaker 1: because they are growing their energy system and with what
Speaker 1: China has been able to do, electrification now is also
Speaker 1: an economic opportunity for these countries, and that will drive
Speaker 1: that adoption way more than target setting or climate ambition.
Speaker 2: How do you think that argument will go down in Washington,
Speaker 2: d C. Where you've seen new hydrocarbons being made such
Speaker 2: a feature of the economic thinking and this kind of
Speaker 2: almost quite aggressive rejection of the idea that renewable energy
Speaker 2: is incompatible with growth.
Speaker 1: So we've seen that, you know, even before the Iran War,
Speaker 1: America not just domestically trying to scupper the deployment of
Speaker 1: clean energy under Donald Trump's second term, but also go
Speaker 1: out and try to fight on international stage. So one
Speaker 1: of the things they did was fight this carbon tax
Speaker 1: that was going to be deployed on shipping at the
Speaker 1: International Maritime Organization and succeeded. That carbon tax is not
Speaker 1: coming as a result, but it's also turned these countries
Speaker 1: to think about energy in sovereign terms, something that America
Speaker 1: has been pushing forward. America first right, and for most
Speaker 1: of the fuel importing countries, when they put their interest first,
Speaker 1: they don't think, oh, yes, let's go to America to
Speaker 1: import more oil and gas. They think, well, we'll take
Speaker 1: America's oil and gas if we must. But we should
Speaker 1: try and deploy as much of domestic energy resources as
Speaker 1: we can, which tend to be renewables these days. So
Speaker 1: we'll see how much America can continue to influence the
Speaker 1: energy system. You know, It's not like because of the
Speaker 1: straight disclosure, suddenly American oil companies are drilling, you know,
Speaker 1: fifty or one hundred percent more to try and fill
Speaker 1: up the gap that's been created in the market. And
Speaker 1: so there is going to be a you know, a
Speaker 1: flux in the energy system in a way created by
Speaker 1: the shock that you know, would be fun to report
Speaker 1: and observe in the years to come.
Speaker 2: We say flux. But there's something longer term here as well,
Speaker 2: in the conduct of this war in the way that
Speaker 2: it's preceded.
Speaker 1: Right.
Speaker 2: You have it in the piece that for long time
Speaker 2: America was the guaranteur of energy security via the oil
Speaker 2: markets and the state that the straight up form is
Speaker 2: in the state of the war. That's the way that
Speaker 2: it's played out, and those wild swings that we mentioned
Speaker 2: at the beginning suggests that maybe no longer has that role.
Speaker 2: Hw profound is that for the energy system.
Speaker 1: Yeah. I spoke to Tim Sahai, who's a research scientist
Speaker 1: at Johns Hopkins University and focuses on climate and energy policies,
Speaker 1: and he said hydrocarbons have now entered a different risk
Speaker 1: regime with the US unable to guarantee stable supplies from
Speaker 1: the Middle East. We thought of the US as the
Speaker 1: safety feature for shipping supplies, and if it is going
Speaker 1: to be the one that's blocking the Strait of Foremos
Speaker 1: as it has done now, how much security does fossil
Speaker 1: fuels have anymore? There are fundamental questions that countries are
Speaker 1: going to have to ponder over and think about much
Speaker 1: more deeply than they've done before, because this energy crisis
Speaker 1: has just precipitated that decision moment for them sooner than
Speaker 1: they would have liked.
Speaker 2: But not just for countries, also for individuals. I think
Speaker 2: that's another feature of the story is that as well
Speaker 2: as governments taking action, people are often moving ahead of
Speaker 2: their governments, motivated by very much the same same things.
Speaker 1: Yeah, I mean, Tim also talks about he calls it
Speaker 1: the hyper agency of the consumer. Like unlike in the
Speaker 1: nineteen seventies, where the energy system was this big system
Speaker 1: that governments and large corporations could change. Now because a
Speaker 1: lot of the new energy electrotech as it's called, is
Speaker 1: modular and people can purchase it now at a supermarket.
Speaker 1: This changes the dynamic of how the energy system can
Speaker 1: switch over. So some of the most fun reporting in
Speaker 1: the story was actually talk to the people who did
Speaker 1: these switches for themselves. So one of them was a
Speaker 1: guy named Walter Serrano who's a nurse in the Philippines.
Speaker 1: His annual salary is about ten thousand dollars and he
Speaker 1: wanted to have his own energy, he said, but just
Speaker 1: couldn't afford it because putting solar on the rooftop would
Speaker 1: have cost about ten thousand dollars and that's his annual salary.
Speaker 1: And when the crisis happened, Philippines came out with this
Speaker 1: program for public workers, which he was he worked at
Speaker 1: a government hospital to get loans of up to eight
Speaker 1: thousand dollars, and he jumped at the opportunity and got
Speaker 1: it installed middle of April. And now he says his
Speaker 1: power bill and the loan repayment will be about half
Speaker 1: the price that he was paying in his power bills before.
Speaker 1: So you're getting these individual cases that I think are
Speaker 1: fascinating to watch. I mean, some of them become real
Speaker 1: nerds in this. So another person I spoke to, his
Speaker 1: Mark Purcell, who retired from the Australian Navy and has
Speaker 1: now become a home electricity trader because his utility, named Amber,
Speaker 1: allows him to be able to trade electricity at spot prices.
Speaker 1: Australia has some of the world's deepest penetration of rooftop solar,
Speaker 1: so about forty percent of homes in Australia have rooftop
Speaker 1: solar and that causes power prices to swing quite wildly,
Speaker 1: especially when the sun goes down. And he's installed a
Speaker 1: bunch of batteries and he decides when to store energy
Speaker 1: and when to put it back on the grid and
Speaker 1: says sometimes I can make hundreds of dollars in the night.
Speaker 1: And he's become a community advocate, converting his conservative non
Speaker 1: climate change believing Queenslanders to deploy solar and batteries in
Speaker 1: their homes. So I think that part of the energy
Speaker 1: transition that has come down to the individual level is fascinating.
Speaker 2: So if this moment is pushing retired in Australian Navy,
Speaker 2: bet Turans and Filipino nurses to take control of their
Speaker 2: own energy supplies and move to renewables. Is this sort
Speaker 2: of finally the kickout the backside the world needed to
Speaker 2: actually make the transition away from fossil fuels happen.
Speaker 1: Well. Oil companies were worried about this moment because one
Speaker 1: of the things that they used to say about the
Speaker 1: energy transition is that they want an orderly energy transition,
Speaker 1: that governments decide what the energy mixes and how it changes,
Speaker 1: and do so slowly. But as these crises show, the
Speaker 1: energy transition is not going to be a smooth, simple
Speaker 1: curve and it's not going to be orderly. Do we
Speaker 1: need a crisis for the transition to move forward? I
Speaker 1: hope not. But now that it's here, it's interesting to
Speaker 1: watch what happens.
Speaker 2: I think we're going to be shorter crises.
Speaker 1: Well, that will keep us busy as journalists. Thank you, Peter,
Speaker 1: thanks Lashat, and thank you for listening to zero now
Speaker 1: for the Sound of the week.
Speaker 3: The atomic age has moved forward at such a pace
Speaker 3: that every citizen of the world should have some comprehension,
Speaker 3: at least in comparative terms of the extent of this
Speaker 3: development of the utmost significance to every one.
Speaker 1: Of us, that is US, President Eisenhower giving his Atoms
Speaker 1: for Peace speech in nineteen fifty three, which kickstarted the
Speaker 1: development of nuclear power for civilian use. If you like
Speaker 1: this episode, please take a moment to rate and review
Speaker 1: the show on Apple Podcasts, YouTube, and Spotify. This episode
Speaker 1: was produced by Oscar boyd Ati. Music is composed by
Speaker 1: Wonderly Special. Thanks to all the people who worked on
Speaker 1: the story with me, Neil Jerome Morales, Kayley Warren, Aba Krakowska,
Speaker 1: Steven Stopchinski, Francuas de Boboi, Petra Sorgei, Kisu Le, Sam Dodge, Samersadi,
Speaker 1: Doro Milan and Sharon Chan. I should Ratty back soon.