WEBVTT - Daniel Yergin on What Happened to the Energy Transition 0:00:02.720 --> 0:00:15.840 Bloomberg Audio Studios, Podcasts, radio News. 0:00:18.680 --> 0:00:21.720 Hello and welcome to another episode of the Authoughts podcast. 0:00:21.800 --> 0:00:23.119 I'm Tracy Alloway. 0:00:22.920 --> 0:00:24.079 And I'm Joe Wasenthal. 0:00:24.480 --> 0:00:25.720 Joe, you know what's weird. 0:00:26.040 --> 0:00:27.280 Tell me what's weird. 0:00:27.320 --> 0:00:30.560 There's a lot that's weird. Actually, But we seem to 0:00:30.560 --> 0:00:33.920 be living in this extremely high tech world where you 0:00:33.960 --> 0:00:36.600 can get a chat bot to write you an essay 0:00:36.840 --> 0:00:42.000 or create a video. Sure, you could buy a robot 0:00:42.040 --> 0:00:46.360 dog to play with all that stuff, and yet we 0:00:46.600 --> 0:00:50.720 still seem to be struggling somewhat to provide cheap and 0:00:50.800 --> 0:00:54.760 affordable and abundant energy to power all these things. And 0:00:54.800 --> 0:00:58.440 in fact, because all this new technology guzzles so much energy, 0:00:58.560 --> 0:01:01.600 data centers you so much power, it feels like energy 0:01:01.640 --> 0:01:05.559 is becoming even more strategically important in many ways. 0:01:05.840 --> 0:01:08.480 It definitely feels like we're in an age of sort 0:01:08.520 --> 0:01:13.000 of people remembering the deep constraints that energy, yeah imposes, 0:01:13.080 --> 0:01:16.319 whether it's data center, all kinds of things. Energy is 0:01:16.319 --> 0:01:18.600 not a solve problem by any stritch, although I would 0:01:18.680 --> 0:01:21.679 say that in my limited sort of reading of the 0:01:21.760 --> 0:01:24.800 history of energy, it's never a solved problem. I know, 0:01:25.080 --> 0:01:27.400 at the moment we find we're in a period of 0:01:27.520 --> 0:01:31.280 energy surplus, we quickly find something to do with that energy, 0:01:31.319 --> 0:01:33.360 and once again we are in a period of constraint. 0:01:33.400 --> 0:01:35.200 But it does feel like we're in some sort of 0:01:35.200 --> 0:01:36.400 period of constraint right now. 0:01:36.480 --> 0:01:39.160 When Caines was doing his whole abundance theory, did he 0:01:39.240 --> 0:01:41.399 mention energy at all? What do you say, Well, I'm 0:01:41.440 --> 0:01:44.399 just gonna assume that Kaines promised us all abundant energy 0:01:44.400 --> 0:01:46.440 as well as everything else, and it's not here. So 0:01:46.560 --> 0:01:50.320 we're all upset. Okay. So even though we've had all 0:01:50.320 --> 0:01:53.880 these breakthroughs in alternative energy technologies, you know, things like 0:01:53.960 --> 0:01:57.600 solar and wind, we're still using more coal, more oil 0:01:57.680 --> 0:02:00.880 than ever. And in fact, there's sort of some old 0:02:00.920 --> 0:02:06.080 school energy behaviors going on with China stockpiling massive amounts 0:02:06.080 --> 0:02:06.400 of oil. 0:02:06.760 --> 0:02:10.600 Yeah, as you said, coal is booming, China stockpiling oil. 0:02:10.720 --> 0:02:15.160 Electricity prices in the US on the rise, maybe perhaps 0:02:15.280 --> 0:02:17.960 due to some of this AI data centered demand. It 0:02:18.000 --> 0:02:21.919 feels like I would say pre COVID at least. I 0:02:21.960 --> 0:02:23.919 don't know if people got a little bit naive or 0:02:23.960 --> 0:02:26.720 optimistic or goldilocks, but this view is it's only a 0:02:26.720 --> 0:02:28.959 matter of time before energy is solved because we're gonna 0:02:29.000 --> 0:02:30.680 have all this wind and solar is gonna be cheap, 0:02:30.720 --> 0:02:33.200 it's gonna be clean. We see all these cost curves 0:02:33.240 --> 0:02:35.240 coming down with like batteries and wind and so forth. 0:02:35.360 --> 0:02:37.320 It's only a matter of time before we don't need 0:02:37.320 --> 0:02:39.440 the dirty stuff. And right now it doesn't feel we're 0:02:39.440 --> 0:02:41.840 anywhere close to that. And I'm sort of curious what happened. 0:02:42.040 --> 0:02:44.600 Yeah, well, everyone talked about the energy transition, but so 0:02:44.680 --> 0:02:47.320 far it's not really a transition. It's like a compliment 0:02:47.400 --> 0:02:50.519 to existing sources. Anyway, we could keep talking, but why 0:02:50.560 --> 0:02:54.080 not go to our guest, who is truly, truly the 0:02:54.120 --> 0:02:56.240 perfect guest. We're gonna be speaking with someone I wanted 0:02:56.280 --> 0:02:59.519 to speak with on the podcast for a very long time. Dan, 0:02:59.560 --> 0:03:03.359 you're he is, of course, the author of the Pulitzer Prize, 0:03:03.520 --> 0:03:07.320 winning the prize the Epic Quest for Oil, Money and Power. 0:03:07.600 --> 0:03:10.440 He's also vice chairman of SMP Global, and he also 0:03:10.480 --> 0:03:13.200 has a new book out called The New Map, Energy, 0:03:13.200 --> 0:03:16.239 Climate and the Clash of Nations. So a lot to 0:03:16.320 --> 0:03:18.520 talk about, Dan, Thank you so much for coming on 0:03:18.560 --> 0:03:20.679 all thoughts, It's great to be on with you all. 0:03:20.840 --> 0:03:24.240 So does it feel like energy and security is still 0:03:24.280 --> 0:03:25.960 with us in many forms. 0:03:26.080 --> 0:03:29.480 Yes, it goes through cycles. You know, you mentioned COVID. 0:03:29.520 --> 0:03:32.760 I think during COVID demand went down, prices went down, 0:03:32.800 --> 0:03:35.680 and people kind of forgot about energy, and there was 0:03:35.680 --> 0:03:39.360 a sense in twenty twenty one, International Energy Agency did 0:03:39.400 --> 0:03:43.480 this scenario about getting to basically a renewable world by 0:03:43.480 --> 0:03:46.360 twenty fifty. But now we're in twenty twenty five, going 0:03:46.360 --> 0:03:50.400 into twenty six, energy demand is going up wind and solar, 0:03:50.440 --> 0:03:54.640 but also coal, oil, and natural gas. And this share 0:03:54.720 --> 0:03:58.480 of hydrocarbons and energy has gone from about eighty one 0:03:58.520 --> 0:04:01.400 percent to about eighty point five five percent roughly. 0:04:01.200 --> 0:04:02.880 So it's going to take a while to get down 0:04:02.920 --> 0:04:04.040 to zero in a while. 0:04:04.360 --> 0:04:07.360 You know, though you mentioned energy transition. I think it's 0:04:07.440 --> 0:04:09.920 time to do some rethinking about the energy transition. 0:04:10.120 --> 0:04:11.560 Well good, That's what I was going to ask you about. 0:04:11.680 --> 0:04:14.560 So when people talk about the energy transition, this fantasy 0:04:14.760 --> 0:04:17.400 or you know, maybe fantasy is a little bit scenario 0:04:17.480 --> 0:04:21.640 scenario scenario of Okay, we're going to get to net zero, 0:04:21.839 --> 0:04:24.800 et cetera. Is this just a matter of the timeline 0:04:24.800 --> 0:04:27.479 has been pushed back, or is there a fundamental flaw 0:04:27.560 --> 0:04:28.560 with the premise. 0:04:28.400 --> 0:04:31.040 I think certainly the timeline has been pushed back, the 0:04:31.080 --> 0:04:34.400 notion by twenty fifty the closer we get to twenty fifty, 0:04:34.880 --> 0:04:37.400 the farther way, it seems the goal of net zero 0:04:37.480 --> 0:04:41.159 by twenty fifty zero. And what Tracy said before energy 0:04:41.160 --> 0:04:42.839 transition has been energy addition. 0:04:43.440 --> 0:04:44.279 And what happened. 0:04:44.680 --> 0:04:47.200 What happened is I think the reality came back in 0:04:47.279 --> 0:04:50.159 that we live in a world that rests on an 0:04:50.240 --> 0:04:54.200 energy foundation, and that you just can't overnight take one 0:04:54.279 --> 0:04:57.400 hundred and fifteen trillion dollar world economy and change it 0:04:57.400 --> 0:04:58.440 from one thing to another. 0:04:59.440 --> 0:05:02.080 Are there any scenarios you could see where I guess 0:05:02.240 --> 0:05:05.279 new technologies like AI, the data centers that are getting 0:05:05.279 --> 0:05:08.839 built encourage new players to come in and provide capital 0:05:09.000 --> 0:05:12.360 for energy, so you know, Google building their own gas port. 0:05:12.360 --> 0:05:15.200 Well, exactly what we have now is the tech world 0:05:15.480 --> 0:05:19.160 meeting the energy world, and these two worlds have very 0:05:19.240 --> 0:05:23.159 different cultures. Tech world, things go happen pretty fast energy. 0:05:23.279 --> 0:05:26.159 You know, in your software engineer come out with new software. 0:05:26.440 --> 0:05:29.800 In the energy world, an engineer takes seven years to 0:05:29.839 --> 0:05:33.000 build something. And these cultures have come together, and I 0:05:33.000 --> 0:05:36.040 think one of the reasons that we're seeing kind of 0:05:36.040 --> 0:05:39.480 this called the easy or simple notions and transition pushed 0:05:39.480 --> 0:05:41.640 out is what you've mentioned. It's going to take a 0:05:41.640 --> 0:05:44.040 lot more electricity, and some of that will come from 0:05:44.080 --> 0:05:46.880 windows solar. But what's come back into the picture is 0:05:47.000 --> 0:05:49.760 natural gas is an electric generation. If you wanted to 0:05:49.800 --> 0:05:52.880 go out and buy a gas turbine today, you could 0:05:52.880 --> 0:05:55.200 get it delivered in twenty thirty. If we back go 0:05:55.240 --> 0:05:57.040 back to twenty twenty two. I was talking to one 0:05:57.040 --> 0:05:59.080 of the big companies in the field and the guy 0:05:59.160 --> 0:06:02.039 said that year, all over the world, exactly one gas 0:06:02.080 --> 0:06:04.520 turbine was sold and it wasn't one of ours. So 0:06:04.560 --> 0:06:07.599 we said, our market share that year was zero. Now 0:06:07.760 --> 0:06:08.839 they're all sold out. 0:06:09.360 --> 0:06:12.040 Is there an increase in capacity? We talked about this 0:06:12.279 --> 0:06:15.240 recently and this has come up, the shortage of gas turbans. 0:06:15.880 --> 0:06:19.280 Is the scarcity being addressed or is there still this 0:06:19.320 --> 0:06:22.640 phenomenon where no one really wants to do the initial 0:06:22.760 --> 0:06:25.640 upfront investment in a say, factory that makes the gas 0:06:25.680 --> 0:06:29.240 turbans because there's still uncertainty about say twenty thirty. 0:06:29.760 --> 0:06:32.000 What I you know, when I talked to the companies, 0:06:32.360 --> 0:06:35.120 those who are around in about two two and a 0:06:35.160 --> 0:06:39.120 half decades ago, remember there was a huge rush turbance 0:06:39.360 --> 0:06:41.080 and then it all collapsed. 0:06:40.880 --> 0:06:43.960 And there were and that was coincidentally or incidentally that 0:06:44.000 --> 0:06:46.799 boom was also at a time of massive tech investment 0:06:46.880 --> 0:06:50.000 the late nineties. That was another period of the sort 0:06:50.040 --> 0:06:52.320 of marriage of tech and energy at the time. 0:06:52.400 --> 0:06:56.120 Absolutely, that's right, and so I think they are expanding capacity, 0:06:56.120 --> 0:06:59.159 but they're not doing it helter skelter. Also, like so 0:06:59.160 --> 0:07:01.560 many other companies, the shortage of the talent that you need. 0:07:01.880 --> 0:07:03.640 I mean, these are not simple things to build. 0:07:04.839 --> 0:07:06.440 One of the reasons we wanted to talk to you 0:07:06.560 --> 0:07:09.320 is because you do such a fantastic job of connecting 0:07:09.360 --> 0:07:12.560 the oil space with capital markets, and I've always maintained 0:07:12.560 --> 0:07:16.160 that oil is very much a capital market story. Can 0:07:16.200 --> 0:07:19.120 you talk about the difference between how capital is sourced 0:07:19.320 --> 0:07:23.240 for something like oil or gas versus clean energy, and 0:07:23.280 --> 0:07:26.360 whether attitudes towards the two have changed at all. 0:07:26.480 --> 0:07:29.280 Well, I mean it was quite different with clean energy, 0:07:29.320 --> 0:07:31.400 and a lot of it, you know, had tax credits 0:07:31.440 --> 0:07:33.720 and ability to you know, to sell tax credits and 0:07:33.760 --> 0:07:35.640 things like that, and a lot of the oil and 0:07:35.640 --> 0:07:39.600 gas development may be funded by financial institutions, but a 0:07:39.640 --> 0:07:41.480 lot of it is funded by the companies themselves. 0:07:41.920 --> 0:07:45.480 What is it like we see these lines on charts 0:07:45.600 --> 0:07:49.360 that show the collapsing price of solar production, or the 0:07:49.400 --> 0:07:53.440 collapsing price of wind production, or the improvements in battery technology. 0:07:53.560 --> 0:07:56.880 All true, all true, and yet there is still so 0:07:57.000 --> 0:08:00.200 much public money that goes into these areas, and so 0:08:00.280 --> 0:08:03.400 many tax credits and subsidies, etc. To kind of accelerate 0:08:03.440 --> 0:08:06.560 them along. Why is it that you have these lines 0:08:06.600 --> 0:08:10.320 going down and yet they don't undercut traditional sources in 0:08:10.360 --> 0:08:12.520 the way that maybe the tech mindset. 0:08:12.200 --> 0:08:13.520 We yes so well. 0:08:13.560 --> 0:08:17.040 First, remember the renewables, wind and solar. Really we're not 0:08:17.080 --> 0:08:20.640 competing with oil until you started to have electric cars 0:08:20.680 --> 0:08:23.520 coming onto the scene. But you know, it's interesting. I 0:08:23.560 --> 0:08:26.520 was talking to a company that's developing a big battery 0:08:26.600 --> 0:08:30.400 project in Europe I probably shouldn't say which country, and 0:08:30.480 --> 0:08:33.360 they're very excited about it. It's really big. They said, Oh, 0:08:33.400 --> 0:08:35.720 by the way, they couldn't do it on their own. 0:08:35.720 --> 0:08:38.120 They had to go to the government and get incentive 0:08:38.160 --> 0:08:41.360 subsidies or a partnership with it. So the costs are 0:08:41.400 --> 0:08:43.440 still up there, and I think we're seeing a testing 0:08:43.559 --> 0:08:48.040 now for wind and solar. Everybody's rushing right now to 0:08:48.120 --> 0:08:50.440 get steel into the ground so they can get the 0:08:50.440 --> 0:08:53.200 tax credits which will expire in not very long time, 0:08:53.640 --> 0:08:56.400 so the testing will be how competitive will they be? 0:08:56.800 --> 0:08:59.360 And I think we'll still see wind and solar, particularly 0:08:59.440 --> 0:09:02.480 solar put in, but it won't be enough. And what 0:09:02.600 --> 0:09:05.719 they concern right now is about the reliability of the 0:09:05.720 --> 0:09:10.439 electric power system. And you see prognostications about this area 0:09:10.440 --> 0:09:13.559 that stretches from Illinois, you know, as far as New Jersey, 0:09:14.000 --> 0:09:16.000 that by the end of this decade, which is not 0:09:16.040 --> 0:09:19.040 so far away now, we'll be looking at very tight 0:09:19.120 --> 0:09:21.880 markets with really great pressure on it. And I'll tell 0:09:21.920 --> 0:09:24.000 you the kind of regulators. The people looking at it 0:09:23.840 --> 0:09:26.600 but are starting to get pretty alarmed. And that's why 0:09:26.720 --> 0:09:29.400 you see a lot of a lot of discussion and 0:09:29.440 --> 0:09:32.280 focus on can we get permitting reform so you can 0:09:32.320 --> 0:09:33.439 actually get something built? 0:09:34.000 --> 0:09:36.679 Can you just what is the source of alarm? Is 0:09:36.720 --> 0:09:40.880 it about the generation of electrons or is it about 0:09:41.040 --> 0:09:44.440 the transmission and with the grid capacity to balance and 0:09:44.800 --> 0:09:45.640 take in all these things. 0:09:45.720 --> 0:09:48.480 Well, it's both, and certainly the transmission is a very 0:09:48.559 --> 0:09:50.960 key part of it. But what we have been doing 0:09:51.040 --> 0:09:54.319 has been retiring coal plants. We thought, you know, we 0:09:54.360 --> 0:09:56.400 re mar going to have any more gas and electric generation, 0:09:56.520 --> 0:09:59.480 but that's coming back. And now you see kind of 0:09:59.559 --> 0:10:02.840 slow down and closing these coal plants. And also we 0:10:02.920 --> 0:10:06.319 see an election coming up in New Jersey where electricity 0:10:06.320 --> 0:10:10.319 prices are an issue, and suddenly this whole issue. I 0:10:10.320 --> 0:10:13.320 was looking at our numbers, and electricity prices have been 0:10:13.360 --> 0:10:15.280 going up at twice the rate of inflation in the 0:10:15.360 --> 0:10:16.199 United States. 0:10:16.640 --> 0:10:21.000 Why can't clean energy seem to exist without subsidies? Given 0:10:21.080 --> 0:10:23.880 that electricity prices are going up, and we all agree 0:10:23.920 --> 0:10:28.320 that energy is strategically important, why can't it, you know, 0:10:28.440 --> 0:10:29.120 fund itself. 0:10:29.240 --> 0:10:32.320 Well, it has to, you know, ultimately, it has to 0:10:32.360 --> 0:10:35.000 be that. But you know, obviously there's a lot of 0:10:35.040 --> 0:10:37.960 debate about what happened in this big beautiful bill where 0:10:37.960 --> 0:10:41.040 they you know, basically are cutting back and then eliminating 0:10:41.440 --> 0:10:44.920 the subsidies. And at least this administration says, well, wait, 0:10:44.960 --> 0:10:47.400 these were put in thirty two years ago for infant 0:10:47.480 --> 0:10:50.360 in industries, and now the prices come down, why are 0:10:50.400 --> 0:10:52.640 we were doing it? So I think these industries are 0:10:52.679 --> 0:10:55.079 going to have to stand on their own right now. 0:10:55.280 --> 0:10:57.240 Would they be economical in their current form? 0:10:57.360 --> 0:10:59.880 I think, you know, it depends on the circumstances and 0:11:00.000 --> 0:11:02.880 where they're built and whether they have access to transmission, 0:11:03.000 --> 0:11:04.720 because of course you can have solar, but then you 0:11:04.800 --> 0:11:07.640 need you need to connect it to the grid, and 0:11:07.760 --> 0:11:10.000 grid connection becomes a very important issue. 0:11:10.200 --> 0:11:13.559 That's the expensive thing. That's why with my solar panels 0:11:13.760 --> 0:11:16.560 on my farm, I mooch off of the entire Connecticut 0:11:16.559 --> 0:11:17.280 system grid. 0:11:17.600 --> 0:11:19.199 How is your solar panels working? 0:11:19.320 --> 0:11:23.080 They're fantastic. Our energy bills are like maybe twenty dollars 0:11:23.160 --> 0:11:25.520 a month. Sometimes we get paid so you. 0:11:25.559 --> 0:11:28.800 Put it back in the system. You didn't get any 0:11:28.840 --> 0:11:29.679 tax creditors. 0:11:29.920 --> 0:11:32.280 Well, the house had it when we bought it. Oh, 0:11:32.280 --> 0:11:34.880 but I'm just very happy with the low electricity bill 0:11:34.920 --> 0:11:37.360 and not having to shoulder the costs of the grid. 0:11:37.520 --> 0:11:39.439 Yeah, and somebody else will take care of it, that's right, 0:11:39.720 --> 0:11:56.920 somebody else's problem. 0:11:57.040 --> 0:11:58.760 I want to talk a little bit more about the 0:11:58.800 --> 0:12:02.959 return of natural gas or LNG. What do you think 0:12:02.960 --> 0:12:07.520 the prospects are for the US as an LNG export powerhouse? 0:12:07.800 --> 0:12:10.360 Can you continue to grow well at the pace that 0:12:10.400 --> 0:12:14.000 it's been growing, especially given some of the bottlenecks and constraints. 0:12:14.080 --> 0:12:17.440 Yeah, well, obviously you need pipes to get gas to 0:12:17.920 --> 0:12:20.440 the Gulf coast or to tide water in order to 0:12:20.840 --> 0:12:23.679 ship the gas, and that ability to build pipes is 0:12:23.720 --> 0:12:26.400 really difficult, or has been difficult. It's going to get 0:12:26.400 --> 0:12:28.440 easier now unless you're in Texas where you could build 0:12:28.480 --> 0:12:32.760 them anyway. But it's an amazing story. A decade ago, 0:12:32.800 --> 0:12:35.880 the US was not exporting any LNG in fact, and 0:12:35.920 --> 0:12:39.880 now it's the world's largest exporter of LNG. And our 0:12:39.920 --> 0:12:42.440 own numbers say that the next half decade or so, 0:12:43.080 --> 0:12:46.400 global capacity will increase by over fifty percent. Half of 0:12:46.440 --> 0:12:49.440 that increase will be in the United States, you know, 0:12:49.520 --> 0:12:52.600 and people don't think about it this way, but we're 0:12:52.760 --> 0:12:57.280 not for USLNG. Putin might well have succeeded using the 0:12:57.640 --> 0:13:00.840 energy weapon cutting off gas to Europe and shouted the 0:13:00.840 --> 0:13:05.439 coalition supporting Ukraine. And what prevented him from doing that 0:13:06.080 --> 0:13:10.160 was USLNG, which he hadn't counted on. In the book 0:13:10.240 --> 0:13:12.240 you mentioned the new Map. I have this story about 0:13:12.240 --> 0:13:16.160 where I had this interaction with Putin in twenty thirteen, 0:13:16.679 --> 0:13:19.280 and it was at the Saint Petersburg International Economic Forum, 0:13:19.320 --> 0:13:23.599 which was his version of Davos, was before he enexed Crimea, 0:13:24.200 --> 0:13:26.920 and he was up there on the platform with Chancellor Merkel, 0:13:27.040 --> 0:13:28.960 and you could see the ice between them, and they 0:13:29.000 --> 0:13:30.679 said to me, oh, you get to ask the first question. 0:13:31.400 --> 0:13:34.400 So I thought I was just asking the question. Yeah, exactly, 0:13:34.440 --> 0:13:38.560 no pressure, the normal question about you know, what are 0:13:38.559 --> 0:13:40.600 you going to do? Your budget is over dependent on 0:13:40.640 --> 0:13:43.200 oil and gas. By accident, I mentioned shale and he 0:13:43.280 --> 0:13:45.320 started shouting at me in front of all these people 0:13:45.640 --> 0:13:48.599 and said, shale is barbaric, it's terrible, poisoned people. He 0:13:48.679 --> 0:13:50.679 went on and on like that, and I can tell 0:13:50.679 --> 0:13:53.160 you it was very unpleasant being shouted at by Vladimir 0:13:53.240 --> 0:13:54.760 Putin in front of three thousand people. 0:13:55.160 --> 0:13:56.040 But it's a good story. 0:13:56.120 --> 0:13:59.160 Yeah, but it's a good story, you know exactly it 0:13:58.760 --> 0:14:00.800 did at the time and think it's a good story. 0:14:00.800 --> 0:14:02.200 At the time, I wanted to get out of there, 0:14:02.600 --> 0:14:06.360 But afterwards I thought he was actually precient. He saw 0:14:06.840 --> 0:14:11.400 that shale gas in the form of then LNG would 0:14:11.480 --> 0:14:14.240 augment us influence in the world, which it certainly has, 0:14:14.600 --> 0:14:17.600 and it would compete with his jewels crown jewel gas problem, 0:14:17.840 --> 0:14:20.960 which has also happened because now Russian gas is being 0:14:20.960 --> 0:14:24.440 pushed out of Europe. So I think, you know, people 0:14:24.520 --> 0:14:27.320 don't connect speaking of connecting the dots that the shale 0:14:27.320 --> 0:14:32.520 gas revolution there tied into the ability to support Ukraine 0:14:33.000 --> 0:14:35.000 in this war that's now gone on almost as long 0:14:35.040 --> 0:14:35.880 as World War One. 0:14:36.160 --> 0:14:38.680 It sounds like you're saying, Aubrey McClinton was a great 0:14:38.720 --> 0:14:42.040 hero for the West and democracy and all of this stuff. 0:14:42.080 --> 0:14:44.040 Well, i'd say a great entrepreneurial. Yes. 0:14:45.240 --> 0:14:48.280 When it comes to old school energy sources, whether it's 0:14:48.320 --> 0:14:51.720 oil or your term old school, is there any low 0:14:51.800 --> 0:14:56.320 hanging fruit left in terms of making the technologies more efficient? 0:14:56.400 --> 0:15:00.440 I remember, maybe like almost ten years ago now, there 0:15:00.520 --> 0:15:04.480 was a big standardization push and all these you know, 0:15:04.600 --> 0:15:08.080 drills that used to have custom parts started to standardize 0:15:08.080 --> 0:15:10.960 them and that actually brought down prices quite a bit 0:15:11.040 --> 0:15:13.240 or helped ease some of the pressure at a time 0:15:13.280 --> 0:15:15.880 when oil prices were quite low. Is there anything like 0:15:15.920 --> 0:15:16.960 that on the horizon. 0:15:17.080 --> 0:15:19.520 Well, I think you're right. I mean shale. The development 0:15:19.560 --> 0:15:23.000 of shale revolution is to kind of continue your memory, 0:15:23.280 --> 0:15:26.239 it really became a manufacturing process. It's a very repetitive 0:15:26.240 --> 0:15:30.600 manufacturing process. And you know, no one back then when 0:15:30.920 --> 0:15:33.280 days of you mentioned Ay mcclennan was one of the 0:15:33.360 --> 0:15:36.080 pioneers could have possibly envisioned the US being the world's 0:15:36.160 --> 0:15:40.320 largest oil producer, the largest natural gas producer. I think 0:15:40.560 --> 0:15:43.360 right now you know about maybe ten percent of the 0:15:43.360 --> 0:15:46.840 oil has recovered from shale. So one thing companies are 0:15:46.840 --> 0:15:49.360 working on, can we increase that output? Can we increase 0:15:49.400 --> 0:15:53.520 it be more efficient? But there is the sense now 0:15:53.600 --> 0:15:56.320 which you wasn't even had a year ago, that maybe 0:15:56.400 --> 0:15:59.520 shale has peaked out, peaked out at a very high number, 0:15:59.600 --> 0:16:02.520 but peaked doubt And people I start to see are 0:16:02.520 --> 0:16:05.560 starting to talk about what's known as exploration, going out 0:16:05.600 --> 0:16:08.640 and finding new oil sources in parts of the world 0:16:08.680 --> 0:16:10.240 where nobody really looked for them. 0:16:10.400 --> 0:16:12.560 Does it make you nervous to use the word peak 0:16:12.680 --> 0:16:14.480 in an oil conversation. 0:16:14.640 --> 0:16:19.400 Now that you mentioned it at times? What should I say? Plateau? 0:16:19.560 --> 0:16:20.200 How's plateau? 0:16:20.360 --> 0:16:20.480 Ok? 0:16:21.520 --> 0:16:24.200 Yeah? Peak oil. I remember when when people were talking 0:16:24.240 --> 0:16:27.720 about peak oil back in you know, decade and a 0:16:27.760 --> 0:16:29.920 half ago, and that the world was going to run 0:16:29.920 --> 0:16:31.760 out of oil. I remember I said, I better go 0:16:31.800 --> 0:16:33.880 back and look in the prize and went back and said, oh, 0:16:33.960 --> 0:16:36.680 the world's actually run out of oil five times, and 0:16:36.960 --> 0:16:40.600 every time it's where you pointed before. It's new technologies 0:16:40.680 --> 0:16:42.480 and new geographies, that changed the game. 0:16:43.120 --> 0:16:44.720 Tell us a little bit more about some of those 0:16:44.920 --> 0:16:48.440 times were, so, I guess probably the seventies, when else 0:16:48.720 --> 0:16:50.640 have there been well, right at the air of peak 0:16:50.640 --> 0:16:51.520 oil running out. 0:16:51.680 --> 0:16:54.280 World War One turned out to be a war that 0:16:54.400 --> 0:16:58.040 really sort of elevated oil because it started with people 0:16:58.040 --> 0:17:00.440 on horses and cavalry, it ended up with banks and 0:17:00.480 --> 0:17:03.360 airplanes and trucks and all of that. And there was 0:17:03.400 --> 0:17:05.560 this great fear after World War One that the US 0:17:05.600 --> 0:17:10.840 had what was it, nine years worth supply left, and 0:17:10.880 --> 0:17:13.120 so what happened as American companies started to go out 0:17:13.160 --> 0:17:14.560 and it went out to the Middle East and of 0:17:14.560 --> 0:17:17.600 course found lots of oil. So that was a period. 0:17:17.840 --> 0:17:20.760 Then after World War Two there was that concern because 0:17:20.760 --> 0:17:22.720 oil had been so important there had been an oil 0:17:22.720 --> 0:17:25.720 war within the larger war, and then of course the seventies. 0:17:26.000 --> 0:17:29.199 But it even happened in the nineteenth century that you know, 0:17:29.240 --> 0:17:32.480 people start ringing the bell saying, you know, it's all over, 0:17:32.560 --> 0:17:34.680 and technology keeps expanding the frontier. 0:17:35.240 --> 0:17:39.240 So, speaking of oil supplies and stockpiles, one of the 0:17:39.240 --> 0:17:42.679 big stories in energy markets has been China buying enormous 0:17:42.680 --> 0:17:46.520 amounts of oil and stockpiling them for reasons that we 0:17:46.800 --> 0:17:50.680 don't know for certain how important has that dynamic been 0:17:50.840 --> 0:17:54.280 to you know, a fairly resilient oil price. Crewd has 0:17:54.280 --> 0:17:56.399 come down a little bit, but it's still, you know, 0:17:56.440 --> 0:17:59.560 around sixty dollars a barrel, I think, and why are 0:17:59.560 --> 0:18:00.120 they doing it? 0:18:00.280 --> 0:18:02.760 In your rod, that is always the question of why 0:18:02.760 --> 0:18:05.880 they're Chinese stockpiling. I've we've been working on minerals too, 0:18:06.000 --> 0:18:09.240 and looking at the stockpile minerals too. It's what they do. 0:18:09.400 --> 0:18:11.760 Is it because they think there may be a conflict? 0:18:11.920 --> 0:18:14.840 Is there a problem? Are they worried about the South 0:18:14.920 --> 0:18:16.840 China Sea which I write about in the new map? 0:18:16.880 --> 0:18:20.000 And they know that during World War Two the US 0:18:20.119 --> 0:18:23.320 cut off the oil line to Japan, and so they 0:18:23.359 --> 0:18:25.800 want to be sure they have supplies. Or is it 0:18:25.840 --> 0:18:28.480 just because it's cheap and they're expecting it to go up. 0:18:28.800 --> 0:18:30.200 We don't know. I'll be there in a couple months 0:18:30.240 --> 0:18:31.760 and I'll ask them again. I'm not sure I'll get 0:18:31.760 --> 0:18:35.639 an answer. But they're doing it. But the role of 0:18:35.720 --> 0:18:40.640 China's changed because for two decades the growth in oil 0:18:40.680 --> 0:18:43.840 demand worldwide, half of it was in China. And now 0:18:44.440 --> 0:18:46.840 the view, I won't use the word peak I'll use 0:18:46.880 --> 0:18:51.639 the word plateau. That demand in China is plateauing at 0:18:51.680 --> 0:18:54.639 a high level. But they're importing seventy five percent of 0:18:54.680 --> 0:18:56.720 their oil and they don't want to continue to do that. 0:18:56.720 --> 0:18:58.840 That's why they've been pushing one of the reasons they've 0:18:58.880 --> 0:19:01.879 been pushing electric cars. The other reason is because I 0:19:01.920 --> 0:19:05.359 see it as a way to an export market, so 0:19:05.560 --> 0:19:07.679 you don't have the growth engine of China. And so 0:19:08.080 --> 0:19:09.920 you know, there's a fair amount of debate today at 0:19:09.920 --> 0:19:12.639 what rate at oil de Man will grow, but is 0:19:12.680 --> 0:19:14.920 it how how much will grow? Will be a million 0:19:15.000 --> 0:19:17.920 barrels a day, a million and a half barrels a day, 0:19:18.400 --> 0:19:21.800 And that is a subject within oil circles of a 0:19:21.800 --> 0:19:23.480 great deal of vigorous debate. 0:19:23.760 --> 0:19:27.879 We obviously don't know what chision ping strategic plans are, 0:19:28.320 --> 0:19:31.119 potential military plans in the future. But for all of 0:19:31.160 --> 0:19:35.120 the EVY adoption in China, which has of course been 0:19:35.280 --> 0:19:39.840 huge military conflict, whatever the source, will still be an 0:19:39.840 --> 0:19:42.240 incredibly oil intensive process. 0:19:42.440 --> 0:19:45.760 Yes, I think exactly. I mean, that's right. All you're 0:19:45.800 --> 0:19:49.879 not going to have battleships, you know, you know, solar 0:19:49.920 --> 0:19:53.320 power times yeah, yeah, yeah, I mean you do mention, 0:19:53.480 --> 0:19:55.159 I mean what is we know some things that are 0:19:55.200 --> 0:19:57.800 ensoes Youping's mind, because he said it, and he does 0:19:57.920 --> 0:20:01.720 talk about the dominating the new indust supply chains, which 0:20:01.760 --> 0:20:06.080 means evs, which means solar panels, which means when and 0:20:06.359 --> 0:20:10.960 of increasingly critical importance batteries, which is another issue that's 0:20:10.960 --> 0:20:14.840 going to actually is percolating up about here. We have 0:20:14.920 --> 0:20:20.800