Speaker 1: This is Lee Habib and this is our American Stories.
Speaker 1: And we love to feature great authors that tell great
Speaker 1: stories in their books. And today's guest is Daniel Jergen,
Speaker 1: an energy expert, economic historian, and author of the book
Speaker 1: The New Map, Energy, Climate and the Clash of Nations. Daniel,
Speaker 1: thanks for joining us. I want to jump right in.
Speaker 1: In your book, you talk about how our country CO
Speaker 1: two emissions have actually decreased from nineteen ninety. Talk about
Speaker 1: that and who are what do we have to thank.
Speaker 2: For that our CO two emissions are down to the
Speaker 2: level of nineteen ninety, our carbon dinoxide emissions even though
Speaker 2: the economy has doubled in that time. And the reason
Speaker 2: is that coal has been supplanted by inexpensive natural gas
Speaker 2: in our electric generation system. So the biggest contribution that
Speaker 2: has been made to reducing CO two emissions in the
Speaker 2: United States goes back to that gas man who is
Speaker 2: also an environmental man, George Mitchell. George Mitchell was a
Speaker 2: Texas entrepreneur, the son of an immigrant. He worked his
Speaker 2: way through school. He never wanted to work for anybody else.
Speaker 2: He started his own company. But he wasn't an oil man.
Speaker 2: He was a gas man and he believed in natural
Speaker 2: gas and that was almost his vocation. He built up
Speaker 2: a substantial company, but he had a problem. He had
Speaker 2: a contract to supply gas to Chicago, ten percent of
Speaker 2: Chicago's gas, and he was running out of reserves. And
Speaker 2: he read an article about the ability to get natural
Speaker 2: gas out of this very dense rock called shale. And
Speaker 2: everybody's scoff They said, the textbook said it was impossible,
Speaker 2: can never do it commercially. He kept at it for
Speaker 2: eighteen years and it's just about to throw in the
Speaker 2: towel when one of his guys, and this is the
Speaker 2: accidents of history, went to a baseball game in Dallas,
Speaker 2: sat next to somebody else who said, there's this other
Speaker 2: technique called slickwater fracking as they called it, and he
Speaker 2: tried it. And this was going to be the last will
Speaker 2: they were going to close it down. After eighteen years,
Speaker 2: it's succeeded. And that was the beginning in nineteen ninety
Speaker 2: eight of what became the shale revolution. And you know,
Speaker 2: Mitchell turned out to be a prophet and an individual
Speaker 2: who really has changed the course of history by his stubbornness.
Speaker 1: And Daniel, what might surprise folks is that George was
Speaker 1: actually a conservationist, which is why he was such a
Speaker 1: proponent of natural gas.
Speaker 2: Talk about that George was committed to natural gas because
Speaker 2: he thought it was environmentally preferable, much cleaner fuel than coal.
Speaker 2: I remember once, just out of the blue, when I
Speaker 2: was just kind of starting out of my career, he
Speaker 2: thought I'd said something nice about coal, and I just
Speaker 2: pointed out that in the eighties the US government was
Speaker 2: really promoting coal as a domestic energy source. And he
Speaker 2: called me and just you know, denounced coal. And so
Speaker 2: he was committed to gas. And in fact, he actually
Speaker 2: created outside Houston a community called Woodlands, which by its
Speaker 2: name was you know, with trees and a planned community
Speaker 2: that was meant to be very environmentally dedicated, you know,
Speaker 2: a great place to live, a great place to work.
Speaker 2: And so he was a strong environmentalist and was building
Speaker 2: this community at the same time he was building the
Speaker 2: gas business. But then times were tough before the success
Speaker 2: was fracking, and he had to sell the Woodlands because
Speaker 2: he needed the money to keep looking for natural gas.
Speaker 2: And that was one of the great ironies of his life.
Speaker 2: But the man was an environmentalist before his time, just
Speaker 2: as he was a shale gas revolutionary before his time.
Speaker 1: Another revolutionary you mentioned in your book is Mark Papa.
Speaker 1: Set the scene what was going on in the industry,
Speaker 1: and explain Mark's role in developing shale oil.
Speaker 2: He started to see the build up of shale gas
Speaker 2: around two thousand and three two thousand and four and
Speaker 2: started to build up pretty rapidly, changing people's you know,
Speaker 2: we went from shortage basically a surplus. But people didn't
Speaker 2: think that you could do the same thing for oil.
Speaker 2: And Mark Papa headed an oil CUPNY down in Texas
Speaker 2: and he sort of said, there's going to be a
Speaker 2: huge clot of natural gas. Why can't we do this
Speaker 2: for oil? So he said to his people, I mean,
Speaker 2: the question this is it's a funny question. The question
Speaker 2: is how big is a molecule of oil? Because the
Speaker 2: shale rock is so dense, you need to know once
Speaker 2: you've done the fracking, which is sort of loosening into
Speaker 2: the rock, you need the shale the molecules.
Speaker 3: Of oil to be able to flow through it.
Speaker 2: And he said, well, how big is a molecule of oil?
Speaker 2: And people said, oh, I don't know, and somebody else
Speaker 2: said I don't know, and he said, well, look it up,
Speaker 2: and they looked it up and there was no place.
Speaker 2: So they used all this equipment that is used, you
Speaker 2: know in hospitals and stuff to figure out what is
Speaker 2: the size of an oil molecule and they said, you
Speaker 2: know what, this will work for oil too. And up
Speaker 2: till two thousand and eight, people thought this wouldn't work
Speaker 2: for oil because the molecules were too big. And that's
Speaker 2: when we started to see two thousand and eight to
Speaker 2: two thousand and nine, Mark Pappa got.
Speaker 3: The thing going.
Speaker 2: And on the oil side, and here's the United States,
Speaker 2: which was importing sixty percent of its oil in around
Speaker 2: two thousand and eight, is now energy independent. In fact,
Speaker 2: we can export oil. And again it was kind of
Speaker 2: one person's conviction was really important. So you know, the
Speaker 2: whole story in the new Map is the story of
Speaker 2: you know, it's technology, big forces in the world, and
Speaker 2: then of individuals who really make a difference.
Speaker 1: Let's talk about another individual. You talk about a character
Speaker 1: named Harold Ham, a man that described himself as a
Speaker 1: quote hungry young man end quote. Who was he and
Speaker 1: why was he so important?
Speaker 2: Harold Ham was a son of a sharecropper. I think
Speaker 2: they had twelve or thirteen children, and he had to
Speaker 2: help his parents, you know, gather cotton and harvest. He
Speaker 2: would miss part of the school year and everything. It
Speaker 2: was a very poor family. But he was a very hungry, motivated,
Speaker 2: driven person. And he started off working i think in
Speaker 2: a gasoline station and then delivering fuel to oil sites.
Speaker 2: And he just hung around and learned from these guys,
Speaker 2: and he just had a conviction that he could do it.
Speaker 2: And so he scraped together some money and began exploring.
Speaker 2: Didn't have success, and then he did have success, and
Speaker 2: that became the basis of building a company called Continental Resources.
Speaker 2: But it came from a guy who just started really
Speaker 2: with absolutely nothing. He had to go kind of to
Speaker 2: night school and just go down to the library to
Speaker 2: read to understand about how geology worked.
Speaker 1: And by the way, Daniel, it's important to note that
Speaker 1: before his success there was a lot of failure. In
Speaker 1: your book, you mentioned that he had seventeen dry holes
Speaker 1: in a row. What does that mean and how bad
Speaker 1: a streak is that?
Speaker 2: Dry holes means you put the money and the effort
Speaker 2: into drilling well and you come up with zippo. You know,
Speaker 2: you know, it didn't work, And seventeen dry holes. You know,
Speaker 2: just as you say it, I think about it. How
Speaker 2: do you keep going? How do you not?
Speaker 3: You know you're running out of money?
Speaker 2: You have a conviction, you juste but one after another,
Speaker 2: one disappointment after another, because you know in that business
Speaker 2: you have to be an optimist. You have to think
Speaker 2: it's going to work. And so to keep yourself going
Speaker 2: when you have that kind of discouragement, you need, let's see,
Speaker 2: a high octane conviction to carry you forward.
Speaker 1: And we're talking to Daniel Jurgen and his book is
Speaker 1: The New Map, Energy Climate and the Clash of Nations.
Speaker 1: Get it wherever you can. It is a heck of
Speaker 1: a thriller when we come back. More of Daniel Jurgen's
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Speaker 1: That's our American Stories dot com. And we're back with
Speaker 1: our American Stories and our talk with author, energy expert
Speaker 1: and economic historian Daniel Jurgen and his book The New Map.
Speaker 1: We left off with the discovery of shale oil. Daniel,
Speaker 1: where is this oil found and how is it cultivated?
Speaker 2: Well, there are only certain areas in the United States
Speaker 2: that really lend themselves. They have this very dense tight
Speaker 2: rock or shale. Maybe just explain when you're doing a shale, Well,
Speaker 2: what you're doing is you're drilling maybe you know, ten
Speaker 2: thousand feet down into the earth, well below the water table,
Speaker 2: and then you're going to go two miles drill parallel
Speaker 2: to a horizontal fashion. If you can visualize that, and
Speaker 2: the kind of precision and computer capabilities you need are
Speaker 2: very extensive to do that. So what are the big
Speaker 2: areas in the United States? The Balkan is in North Dakota.
Speaker 2: It produces more oil, maybe as much oil as Venezuela,
Speaker 2: the country of Venezuela, which actually has the world's largest
Speaker 2: oil reserves. But the biggest thing of all is this
Speaker 2: area called the Permian which is in West Texas and
Speaker 2: into New Mexico, and that was a very important oil
Speaker 2: resource for the United States during World War Two when
Speaker 2: the US was six out of seven barrels of oil
Speaker 2: used by the Allies in World War Two came from
Speaker 2: the United States and West Texas was an important part
Speaker 2: of that. But you know, by two thousand and six,
Speaker 2: two thousand and seven, people were saying, oh, the Permian's finished,
Speaker 2: you know, just kind of doing benedictions over it, and
Speaker 2: then lo and behold, they started to apply these technologies
Speaker 2: to it, and it turned out because you have a
Speaker 2: kind of layer on top of layer of shale rock
Speaker 2: with oil in it, that it's now become like this
Speaker 2: super area in terms of oil production, and it rivals
Speaker 2: the largest oil field in Saudi Arabia in terms of
Speaker 2: its importance in scale. So it's a world resource that
Speaker 2: technology has has unlocked. If you take the state like
Speaker 2: of New Mexico, its royalties from shale are what helped
Speaker 2: pay the salaries of teachers, of firefighters, of law enforcement officials.
Speaker 2: But people don't think about that, but it is a
Speaker 2: pretty big contribution, particularly at the time when government budgets
Speaker 2: are stretched.
Speaker 1: You know, Daniel what's remarkable about this is that while
Speaker 1: you'd expect the Exxons, the Mobiles, the Chevrons, the big
Speaker 1: energy giants of the world to lead this innovation, it
Speaker 1: was individuals. It was wildcatters like George Mitchell and Harold
Speaker 1: Ham were the true pioneers. What explains that.
Speaker 2: It's often been the case in the oil industry around
Speaker 2: the world that it's kind of what you call an independent,
Speaker 2: a smaller company run, a more entrepreneurial company, where kind
Speaker 2: of people pursue ideas, develop new fields, and then the
Speaker 2: larger companies come in and bring their scale and their
Speaker 2: ability to execute do large projects, who then come in later.
Speaker 2: But it is true that this was done by the independence.
Speaker 2: We're now at a stage where, because of what's happened
Speaker 2: with oil prices and demand and pressure on costs, that
Speaker 2: you're getting the kind of consolidation and the big companies,
Speaker 2: the Exxons and Mobiles and the Chevrons, are now big
Speaker 2: players in shale, But it's the little guys who opened
Speaker 2: the door.
Speaker 1: In your book, you addressed three of the recurring themes
Speaker 1: for what's wrong with fracking, and that's water contamination, earthquakes,
Speaker 1: and methane and you explain these three concerns.
Speaker 2: Sure, certainly there have been environmental opposition, and early on
Speaker 2: there was concern about whether this would affect water. And
Speaker 2: I was on the commission set up for President Obama
Speaker 2: to review the environmental aspects, and the conclusion was that
Speaker 2: if this is managed properly, regulated properly, and it's a
Speaker 2: highly regulated industry by the way, which people don't understand often,
Speaker 2: that if you did that, then you know this, like
Speaker 2: any industrial activity, we could go forward. And I think
Speaker 2: that we found on the water side that the concerns
Speaker 2: were way exaggerated about any impact on water, because you're
Speaker 2: operating at a whole different levels in much below the
Speaker 2: water table. There's still controversy about a couple of incidents,
Speaker 2: but water turned out not to be a problem. Earthquakes
Speaker 2: had to do not with the fracking, but with the
Speaker 2: injection of wastewater into geological formations that were inappropriate, and
Speaker 2: you saw that particularly in Oklahoma in terms of what
Speaker 2: called earthquake swarms, and there was a quick case where
Speaker 2: regulation had to step in and manage more carefully how
Speaker 2: you deal with wastewater. And by the way, there's increasing
Speaker 2: efforts to recycle and clean up wastewater to reduce the
Speaker 2: need to reinject methane is an important issue, and there's
Speaker 2: a lot of focus on methane, which is only you know,
Speaker 2: more emerged in the last few years as a concern,
Speaker 2: and capturing methane because it is a oppotent greenhouse gas,
Speaker 2: is now become a major focus. Companies are working on it.
Speaker 2: I think it will become with a Biden administration. It
Speaker 2: will be a focus of activity so methane can be
Speaker 2: managed and captured and in fact it has economic value
Speaker 2: because it's natural gas, but not allowing it to escape
Speaker 2: into the atmosphere because of leaks, so that I think
Speaker 2: is a priority to focus on.
Speaker 1: Let's talk about LNG. What do those initials stand for?
Speaker 1: Why does it matter to people listening?
Speaker 2: LNG stands for liquified natural gas that is taking gas
Speaker 2: and basically freezing it at a temperature I think it's
Speaker 2: two hundred and sixty degrees below zero at a very
Speaker 2: low temperature, which compresses it, makes it take up one
Speaker 2: six hundredth the size if it would as a gas,
Speaker 2: and you put it into a tank on a ship
Speaker 2: and you send it from a place that has extra
Speaker 2: natural gas to places that don't have natural gas.
Speaker 3: And in fact, you.
Speaker 2: Know, this started in the United States. The first shipment
Speaker 2: of LNG went from the United States to England in
Speaker 2: nineteen fifty nine because England was having trouble with air
Speaker 2: pollution from burning coal. People were using coal for heating
Speaker 2: in their houses and so forth, and that was the
Speaker 2: beginning of this LERG industry. In the last ten years
Speaker 2: or so fifteen years, it's become a really big business,
Speaker 2: a global business. The Middle East is a big supplier,
Speaker 2: country called Gutter, Australia is a big supplier, and now
Speaker 2: the United States is becoming a big supplier because we
Speaker 2: have so much gas and it's a way to find new.
Speaker 3: Markets for it.
Speaker 2: And the gas is going to places like Asia which
Speaker 2: want to reduce their coal burn because you can use
Speaker 2: gas to generate electricity instead of coal. And the US
Speaker 2: is now going to be you know, the US is
Speaker 2: one of the big three of the world oil producers,
Speaker 2: with Saudi Arabia, with Russia, US is going to be
Speaker 2: one of the big three LNG exporters as well.
Speaker 1: One of the key components to this industry are pipelines.
Speaker 1: Talk about the drama that's unfolded over pipelines in this country.
Speaker 2: Pipelines used to be about the most boring part of
Speaker 2: the energy industry. The joke was that going through a
Speaker 2: approval process to build a pipeline was as exciting as
Speaker 2: watching paint dry. Well, it's gotten pretty exciting since then,
Speaker 2: a lot more exciting, and they have become the focal
Speaker 2: point for those who don't want shale development. And two
Speaker 2: of the pipelines I write about. One is called Keystone,
Speaker 2: which is a pipeline system that already runs from Canada,
Speaker 2: which is our main source of oil. Although we're self sufficient,
Speaker 2: some quality of our oil is better sold in the
Speaker 2: world market, and then we import others because it runs
Speaker 2: better in kind of what's called the refining part of
Speaker 2: the industry that turns things into gasoline and jet fuel
Speaker 2: and so forth. So Keystone it already exists. Canada provides
Speaker 2: over half of our imports. But Canada has continued to
Speaker 2: develop its own oil industry and proposed an additional pipeline
Speaker 2: called Keystone Excel. And this has been basically controversy for
Speaker 2: more than a decade. In twenty twelve, when gasoline prices
Speaker 2: were five dollars before we saw the impact.
Speaker 3: Of the shale revolution.
Speaker 2: But subsequently the Obama administration prohibited the Keystone XL pipeline
Speaker 2: from getting a permit across the border because you need
Speaker 2: the State Department to sign off on that.
Speaker 3: It's getting approvals.
Speaker 2: Is a very byzantine, complex system that runs through a
Speaker 2: lot of different regulatory agencies, ends up in court with
Speaker 2: a lot of you know, a lot of lawyers get
Speaker 2: involved in it, and it got stopped. The Trump administration
Speaker 2: gave the go ahead. I think the Biden administration we'll
Speaker 2: see again, we'll seek to stop it. But so what
Speaker 2: happens instead that oil, instead of going through a pipeline,
Speaker 2: actually comes by railcar. The other pipeline I write about
Speaker 2: is the Dakota Access, and that goes back to what
Speaker 2: you talked about the BACAN, because again, you either move
Speaker 2: the oil out by railcar and you have these trains
Speaker 2: with one hundred cars, or you put it in a pipeline,
Speaker 2: a modern, safe pipeline. And that became a huge battle
Speaker 2: and finally got built. But it continues, you know, the controversy.
Speaker 2: Even though it's been running for about three years now,
Speaker 2: it continues to be controversial. So the battle over pipelines
Speaker 2: has become a very critical issue in terms of the
Speaker 2: development of North American energy resources.
Speaker 1: And we're talking to Daniel Jurgen. The book The New Map,
Speaker 1: Energy Climate and the Clash of Nations. It's a heck
Speaker 1: of a read, a heck of a story. More with
Speaker 1: Daniel Jurgen here on Our American Story And we're back
Speaker 1: with our American Stories and with Daniel Jurgen, author of
Speaker 1: The New Map, Energy Climate and The Clash of Nations.
Speaker 1: Before the break, Daniel, you discussed the grueling and often
Speaker 1: impossible legal process to approve national pipelines. So the next
Speaker 1: best alternative or trains to move that gas? Daniel, do
Speaker 1: you think people get the comparative advantages of pipelines, for instance,
Speaker 1: versus rails.
Speaker 2: No, No, I don't think at all that they don't
Speaker 2: visualize it. And again, if you look at I mean,
Speaker 2: if I go back and look at the coverage of
Speaker 2: these issues, it focuses on some aspects that it doesn't
Speaker 2: focus on the other aspects. People get very much caught up,
Speaker 2: shall we say, into drama of it, you know, the demonstrations,
Speaker 2: the visual story and without you know, people don't really
Speaker 2: have in their heads, well, what are the trade offs
Speaker 2: here and what are the advantages and how would you
Speaker 2: rather move these supplies across? But approval processes take five, six,
Speaker 2: seven years. They've just become industries. It becomes an industry
Speaker 2: itself just to go through an approval process, because there's
Speaker 2: always another court or another judge, another issue to raise.
Speaker 2: And sometimes people finally say they just throw in the
Speaker 2: towel and say, okay, forget it.
Speaker 3: You know we're not going to.
Speaker 2: We can't keep spending hundreds and hundreds of million dollars
Speaker 2: a year working on trying to get a pipeline built.
Speaker 2: You know, we have a very complex system for getting
Speaker 2: things approved, and I think people don't realize how complicated
Speaker 2: the regulatory system is in the United States, and how
Speaker 2: many different levels, and there's so many different ways for
Speaker 2: people to get involved and define something to object. So,
Speaker 2: you know, it's tough building new pipelines. At least, it's
Speaker 2: not tough building new pipelines if you're building, say in
Speaker 2: the southwest Texas. But to build a pipeline that would
Speaker 2: carry Marcella's gas to the east coast somewhere today, it's
Speaker 2: a pretty daunting endeavor to take on.
Speaker 1: In chapter eight, you wrote quote for four decades US
Speaker 1: energy policy was dominated, and it's foreign policy hobbled by
Speaker 1: the specter of shortage and vulnerability, going back to the
Speaker 1: nineteen seventy three oil embargoes, in the nineteen seventy nine
Speaker 1: Iranian Revolution, you know, Daniel, not long ago we had
Speaker 1: to wait in line for gas. Many of us remember that.
Speaker 1: Talk about that.
Speaker 2: Yeah, it's been transformative. And it used to be such
Speaker 2: a big issue that we were dependent upon imports, and
Speaker 2: being dependent on imports meant that our economy was vulnerable politically,
Speaker 2: and it was vulnerable economically to shocks of one kind
Speaker 2: or another. And what's now been transformed is the United
Speaker 2: States actually has a kind of flexibility and freedom and
Speaker 2: foreign affairs that it just didn't have before. And our
Speaker 2: economy is much safer, and we have what's called energy security,
Speaker 2: which we really didn't have for decades, going back to
Speaker 2: the nineteen seventies. I think it's roughly eight presidents who
Speaker 2: kept calling for entergy independence so we couldn't get there,
Speaker 2: And now we got there.
Speaker 1: Although this show is called Our American Stories, let's talk
Speaker 1: about China because they are one of our biggest rivals.
Speaker 1: What is the Belt and Road and why should listeners.
Speaker 3: Care in the I have these.
Speaker 2: My book is called The New Map, and I sort
Speaker 2: of mean the New Map in a kind of metaphorical
Speaker 2: way of thinking about how the world has changed so
Speaker 2: dramatically in ten years and trying to provide a map
Speaker 2: or a guide to that, but it's also literal. And
Speaker 2: I have a map of what's called the Belton Road,
Speaker 2: which are really six different routes that China has proposed
Speaker 2: and is working on to in a way connecting Central Asia,
Speaker 2: South Asia, Middle East, Europe, Africa too much more tightly
Speaker 2: to the Chinese economy and in since making the Middle
Speaker 2: Kingdom is China's known much more of the middle of
Speaker 2: the world economy, and it's already in a very substantial
Speaker 2: position in the world economy. So this is a kind
Speaker 2: of a manifestation of China's growing role in the world.
Speaker 2: And there's a very strong energy component. And you make
Speaker 2: a very important point that China now is described as
Speaker 2: a strategic rival, peer competitor, but it's also really important market.
Speaker 2: We're really connected with them. At the same time, General
Speaker 2: Motor sells more cars in China than it does in
Speaker 2: the United States. China is the biggest holder of US
Speaker 2: government debt the biggest holder, so we're very connected, and
Speaker 2: yet we're also increasingly a competitor with them. So this
Speaker 2: is a big challenge to figure this out for the
Speaker 2: United States. And you know as part of the American story.
Speaker 2: This will be part of the American story in the
Speaker 2: years ahead.
Speaker 1: And how is America preparing itself for this rivalry?
Speaker 3: Well, I think it's confused.
Speaker 2: I think that some of China's actions, like what are
Speaker 2: taking over Hong Kong, have been very disturbing. In fact,
Speaker 2: the US government has just sanctioned a whole group of
Speaker 2: Chinese officials for that. So and another map by point
Speaker 2: to is the map of what's called the South China Sea,
Speaker 2: which may seem very far away from America, but it's
Speaker 2: where one third of world trade goes through. It's also
Speaker 2: the most dangerous body of water I think in the
Speaker 2: world today, because that's where US naval warships and Chinese
Speaker 2: naval warships come close to colliding with each other on
Speaker 2: a number of occasions. Because China says the South China
Speaker 2: Sea is Chinese territory, we don't recognize that. The other
Speaker 2: countries in that area don't recognize it. I don't think
Speaker 2: there's any simple solution here, I think, you know, I
Speaker 2: think we have to look where we can work with China,
Speaker 2: and then we need to be clear where we have problems.
Speaker 2: We have problems with them on what's called intellectual property,
Speaker 2: stealing know how, technology and so forth. But you know,
Speaker 2: we need to get rules in the relationship. I think
Speaker 2: it is important to stabilize a relationship because increasingly our
Speaker 2: military is focused on China, China's military is focused on us,
Speaker 2: and you know, I write, I really want Americans to
Speaker 2: understand how important what's going on with China is. That
Speaker 2: it's not an easy there's not an easy solution to it.
Speaker 2: But you hear the language, you see what's happening, and
Speaker 2: it kind of has echoes of before the First World
Speaker 2: War when they talk about great power competition. And so
Speaker 2: we have to be very careful how we go forward
Speaker 2: here because you know, China's economy probably within a decade,
Speaker 2: will be larger than the US economy. They're embedded in
Speaker 2: the world economy. We're embedded in the world economy. We're
Speaker 2: very interdependent. We're competitors and rivals at the same time.
Speaker 2: That is a complicated situation, but it's one that I
Speaker 2: think Americans need to have an understanding of this complexity
Speaker 2: so you can see try and see the whole picture,
Speaker 2: not just part of the picture.
Speaker 1: Let's move on to evs. In your book, you spend
Speaker 1: some time on electric vehicle. Talk about Elon Musk and
Speaker 1: the two men he partnered with to form this company
Speaker 1: called Tesla, and how that's helping me shape the energy
Speaker 1: map too. Right.
Speaker 2: I loved my story of the origins of Tesla, which
Speaker 2: is two guys from Silicon Valley had lunch with Elon Musk,
Speaker 2: you know, early in the century, and they wanted to
Speaker 2: try and sell them on the idea of an electric airplane,
Speaker 2: and he says, I'm not interested in that. Then they said,
Speaker 2: but what about electric car? You know, I might be
Speaker 2: interested in that. And this fellow JB. Strawbo had this
Speaker 2: idea that you could take lithium ion batteries that you
Speaker 2: would use like in a cell phone or in a computer,
Speaker 2: string them together and use them to power a car. Now,
Speaker 2: the electric car. We had an electric car before. In
Speaker 2: the United States. In nineteen hundred, there were more electric
Speaker 2: cars on the streets of New York than there were
Speaker 2: gasoline powered cars. And Thomas Edison was riding high in
Speaker 2: the electric car, and then along came Henry Ford and
Speaker 2: mass production the Model T, and it killed the electric car,
Speaker 2: and it was dead for century. But now obviously it's
Speaker 2: come back, and this idea that came out of that
Speaker 2: lunch has now kind of changed the automobile industry worldwide
Speaker 2: that all the major automobile makers now are investing in
Speaker 2: electric cars. And there's another example of what we're talking about,
Speaker 2: a stubborn person who really made a difference in Elon Musk.
Speaker 2: That and his SpaceX. It's pretty amazing. So I have
Speaker 2: this great photo in the book of Thomas Edison standing
Speaker 2: by his car in like nineteen hundred, his electric car
Speaker 2: and Elon Musk in almost exactly the same pose standing
Speaker 2: next to his car.
Speaker 3: And then also a man named.
Speaker 2: Wang Gang who's kind of the Chinese the Elon Musk.
Speaker 2: But you sort of look at it and it's like,
Speaker 2: is Elon Musk Thomas Edison reincarnated? But he's you know,
Speaker 2: he's there's another guy who's changed the world. If you
Speaker 2: went back a decade and said, oh, the electric car
Speaker 2: is going to become a really big thing, people say, ah,
Speaker 2: now it's just you know it's just a toy thing
Speaker 2: of Silicon Valley. Well, Volkswagen says it's going to eventually
Speaker 2: only be producing electric vehicles at some point, and governments
Speaker 2: are coming in really hard, really strong, with regulatory policies
Speaker 2: to try and push that.
Speaker 1: And you're listening to Daniel Jurgen his book The New Map, Energy,
Speaker 1: Climate and the Clash of Nations. More of this remarkable
Speaker 1: story of energy here on our American Stories, and we
Speaker 1: continue with our American Stories. We're back with author, energy
Speaker 1: expert and economic historian Daniel Jurgen discussing his new book,
Speaker 1: a heck of his story called The New Map. Daniel,
Speaker 1: we last talked about electric vehicles and how corporations and
Speaker 1: governments are preparing for a complete transition. If you're taking
Speaker 1: a long drive in this country, there's a gas station
Speaker 1: every two minutes where you can fill up. But if
Speaker 1: we moved entirely to electric cars, well, it would take
Speaker 1: a lot of work to get there. Talk about some
Speaker 1: of the challenges of creating an infrastructure for electric vehicles as.
Speaker 2: You're talking about transforming a global industry that employs tens
Speaker 2: of millions of people, and you know you need everything
Speaker 2: from the lithium batteries and all the materials. By the way,
Speaker 2: electric cars a lot of plastic is used in making
Speaker 2: electric cars to the charging stations. That charging stations don't need,
Speaker 2: you know, what happens to the gas stations all those people.
Speaker 2: So I think you have politicians setting targets and we'll
Speaker 2: here more targets, but I think getting there and getting
Speaker 2: consumers to you know, that's still not clear how that's
Speaker 2: going to happen. But you have governments kind of trying
Speaker 2: to regulate it into happening. But if everybody tries to
Speaker 2: kind of rush to the same side of the boat
Speaker 2: at the same time, it can it can kind of
Speaker 2: tip over because you need a lot of materials to
Speaker 2: make this happen. You know, you hear these targets that
Speaker 2: are coming out, and that combined with where the automobile
Speaker 2: makers are investing, it's going to move in that direction.
Speaker 3: But you're going to have to be I say this.
Speaker 2: To you and to the listeners, You're going to have
Speaker 2: to be pretty confident that you can go somewhere and
Speaker 2: charge your car and you know, not run out of electricity.
Speaker 2: So California has these targets to stop selling the internal
Speaker 2: combustion gasoline cars in twenty thirty five. But California is
Speaker 2: also having disruptions for their electricity supply, and you know
Speaker 2: you're going to want to be confident that you can.
Speaker 2: You know, when you want to charge up instead of
Speaker 2: filler up, you'll say charger up, but you want to
Speaker 2: be sure the charge is there.
Speaker 1: Daniel, when talking about moving the automotive industry to electric cars, well,
Speaker 1: you have to consider the cost of buying the cars,
Speaker 1: making the cars, running them, and storing the energy. Can
Speaker 1: you explain the comparison of costs? Tell that story.
Speaker 2: Electric cars obviously they run electricity. It becomes very interesting
Speaker 2: to do a comparison of costs, and a lot depends
Speaker 2: upon the battery. It also depends whether you got a
Speaker 2: tax credit from your federal government in the state government
Speaker 2: to buy the car, and so forth. So all of
Speaker 2: those things go into it. And then it's of course,
Speaker 2: what does the electricity run on. Is it on wind
Speaker 2: and solar or as in China, most electric cars are
Speaker 2: actually running on coal because most of the electricity is still
Speaker 2: generated by coal, so it's not as clear cut. And
Speaker 2: then of course you also have the mining of the
Speaker 2: stuff that you need to build the electric car, and
Speaker 2: as I said before, you need plastics for the body
Speaker 2: and so forth. So doing cost comparison and an energy
Speaker 2: comparison and an emissions comparison is much more difficult than
Speaker 2: people would think.
Speaker 3: The other thing that really struck me is.
Speaker 2: If all of the cars in the world today were
Speaker 2: electric cars running on wind and solar, do you know
Speaker 2: how much you'd reduce man made carbon emissions. You'd reduce
Speaker 2: them by six percent. So people, again, that goes to perceptions.
Speaker 2: People see cars, they go to the gasoline station, they
Speaker 2: think that's the major source of greenhouse gases and so forth.
Speaker 2: Cars only use twenty percent of total oil consumption. But
Speaker 2: it's what's vivid, what's in front of people's eyes, that
Speaker 2: stands out.
Speaker 1: And you note by the way that China manufactures three
Speaker 1: quarters of the lithium batteries in the world. China is
Speaker 1: a major player in the places where the minerals are
Speaker 1: needed to create these batteries, where their mind talk about that.
Speaker 2: Certainly, what China has done is made themselves a very
Speaker 2: strong player and what they call new energies. So seventy
Speaker 2: percent of the solar panels in the world come from China.
Speaker 2: Probably about another ten percent come from Chinese companies that
Speaker 2: are in other countries that Chinese dominate the lithium ion
Speaker 2: battery chain at least right now. They also a very
Speaker 2: active around the world in carving out resources, and large
Speaker 2: part of the world's cobalt supply comes from the Democratic
Speaker 2: Republic of Congo, the second largest country and physical area
Speaker 2: in Africa and one in which they are children who
Speaker 2: are working in minds. So I think as the demand
Speaker 2: grows for electric cars, for solar and so forth, there
Speaker 2: will be more examination of the supply chains and what
Speaker 2: call the supply chains. You know, because the wind is free,
Speaker 2: the sun is free, but the metal, the plastics, the
Speaker 2: minerals you need, all of those things have to come
Speaker 2: from somewhere and they have to move by ships from
Speaker 2: one place to another. So I think the scale of
Speaker 2: really moving this direction, it's very large, and it's you know,
Speaker 2: I write about earlier energy transitions. The first one started
Speaker 2: in seventeen oh nine, in January seventeen oh nine, and
Speaker 2: they normally take a long time, and you add new sources,
Speaker 2: but you continue to use the current ones. The coal
Speaker 2: as an example, it was in the nineteen sixties that
Speaker 2: oil overtook coal as the world's number one energy resource.
Speaker 2: But the world uses a lot more coal today, the world,
Speaker 2: not the United States of the world than it did
Speaker 2: in the nineteen sixties. So as we get the scale
Speaker 2: of the as we build up, it's it's going to
Speaker 2: kind of not ripple, but it be big waves through
Speaker 2: the world economy.
Speaker 1: And Daniel, as you point out, for a lot of
Speaker 1: these developing countries, how do they go from burning wood
Speaker 1: in their own homes to solar panels? Are we going
Speaker 1: to let them go through the stages of development that
Speaker 1: the rest of the world has gone through.
Speaker 2: Yeah, this is you know, we're talking about the American story.
Speaker 2: This is a story outside America, which you don't think
Speaker 2: about it because it's so different. I mean, we haven't
Speaker 2: been there for a century or century and a half.
Speaker 2: Almost three billion people out of the seven point eight
Speaker 2: billion people in the world use.
Speaker 3: Wood, animal waste, crop waste to cook.
Speaker 2: And the World Health Organization, which is now famous because
Speaker 2: of COVID, says that indoor air pollution is the world's
Speaker 2: number one health problem and it affects like three billion people,
Speaker 2: number one environmental problem. And so those people that you know,
Speaker 2: I've been in India and discussions with Indian government and
Speaker 2: officials and Indian people there in India, they want commercial energy,
Speaker 2: they want natural gas so that they can clean up
Speaker 2: their air and help people so people are no longer
Speaker 2: cooking with all these waste products. And so for them,
Speaker 2: they look at a very different picture than let's say
Speaker 2: somebody's sitting in Europe. I have a quote in the
Speaker 2: new map from the Nigerian energy minister saying, it's fine
Speaker 2: what they want to do in Netherlands in Germany, but
Speaker 2: we have tens and tens and tens of millions of
Speaker 2: port people. They need natural gas, they need commercial energy.
Speaker 2: So it's a very different perspective and one that you know,
Speaker 2: you don't hear in the United States because we don't
Speaker 2: have the for the most part, we don't have those problems.
Speaker 1: Let's talk about another big shift in the energy world,
Speaker 1: and that's auto tech. We're talking about Uber and ride
Speaker 1: sharing and so much more. How might this transformation in
Speaker 1: transportation as we know it affect us all? And why
Speaker 1: did you write about uber in your book?
Speaker 2: Uber is sort of like zoom. It became a verb.
Speaker 2: Everybody knows the term now, and yet it's not so
Speaker 2: long ago that a fellow, a Canadian engineer, was standing
Speaker 2: on a street corner in San Francisco. He was late
Speaker 2: for a date. This is two thousand and eight. He
Speaker 2: couldn't get flagged down a taxi, but he had in
Speaker 2: his pocket his new iPhone and he said, well, wait
Speaker 2: a second, could we use the iPhones and not have
Speaker 2: to call a taxi dispatcher who hangs up on you
Speaker 2: because he or she is so overwhelmed with angry people
Speaker 2: calling up.
Speaker 3: And that was the origin of Uber.
Speaker 2: And again when they started, people thought it was crazy,
Speaker 2: But of course it's not crazy anymore. So I sort
Speaker 2: of said, I can imagine, you know, if we sort
Speaker 2: of think in a more linear way with electric cars,
Speaker 2: we see them. You know, by twenty fifty, maybe half
Speaker 2: a third to a half of the global automobile fleet
Speaker 2: will be electric cars. But then let's do a thought
Speaker 2: of experiment and think entirely differently. Let's imagine that you
Speaker 2: canbine electric cars with ride hailing, with self driving autonomous vehicles,
Speaker 2: and maybe you have a whole different vision of transportation
Speaker 2: that is not the one that started with Henry Ford,
Speaker 2: and it is the one we still have today where
Speaker 2: you own your own car, and you know, you sort
Speaker 2: of identify with your car. But rather we have a
Speaker 2: world in which there are large fleets of self driving
Speaker 2: cars that are that you just hail when you need them.
Speaker 2: And so I had this whole other vision, you know,
Speaker 2: to challenge thinking, because you need to continually challenge thinking,
Speaker 2: called imagine this industry called auto tech. Think about it
Speaker 2: as a merger of Silicon Valley and Detroit. That would
Speaker 2: be a very different way that you know, you need
Speaker 2: a car, Oh, here comes to ride hell or you
Speaker 2: get in it.
Speaker 1: I want to leave with one final question, Daniel, like
Speaker 1: you to talk about this thing called the energy mix.
Speaker 1: Where was it? Where is it? For everyone listening? Where
Speaker 1: is it heading?
Speaker 2: So we had this eighty seven trillion dollar world economy
Speaker 2: before COVID eighty percent on oil, gas and coal, wind
Speaker 2: and solar about four percent. So I don't you know,
Speaker 2: I just think the numbers don't work to just say
Speaker 2: we're going to completely turn that around in thirty year.
Speaker 2: So I think the energy mix to use the term
Speaker 2: that gets used, will be mixed. There will be much
Speaker 2: more renewables, there will be breakthroughs in technology, there will
Speaker 2: be new things, maybe hydrogen batteries that can store electricity,
Speaker 2: but I think oil and gas the convention will also
Speaker 2: be part of the energy mix as we go forward,
Speaker 2: So it will be very mixed. And that mixed is
Speaker 2: what our economies will require to operate, and that will
Speaker 2: what we require to maintain people's living standards. But I
Speaker 2: will continue to look for innovation. I'll continue to look
Speaker 2: for big companies doing interesting things. And I'll continue to
Speaker 2: look for those stubborn Americans who have an idea that
Speaker 2: everybody thinks is ridiculous, and then they come along and change.
Speaker 3: At least they're part of the world.
Speaker 1: Well special thanks to Daniel Jergan his terrific storytelling in
Speaker 1: a book called The New Map, Energy, Climate and the
Speaker 1: Clash of Nations edit at Amazon dot com. Hey go
Speaker 1: to a bookstore, buy one, and buy one for a
Speaker 1: family member or friend. They'll enjoy this read. And it's
Speaker 1: one of those things where if you don't think you're
Speaker 1: interested in the subject, it's the people. It's the people
Speaker 1: in this book that are so fascinating. Daniel Jergen The
Speaker 1: New Map, the story of energy in the United States
Speaker 1: and around the world. Here on our American Stories