1 00:00:00,080 --> 00:00:03,640 Speaker 1: Welcome to Zero, I am Akshatrati. This week what the 2 00:00:03,680 --> 00:00:18,440 Speaker 1: war with Iran means for the energy transition. Over the weekend, 3 00:00:18,560 --> 00:00:21,600 Speaker 1: President Donald Trump announced that the US and Israel had 4 00:00:21,640 --> 00:00:25,880 Speaker 1: launched coordinated attacks on Iran. The early strikes killed the 5 00:00:25,920 --> 00:00:30,160 Speaker 1: country's leader, alongside many members of the regime. There have 6 00:00:30,240 --> 00:00:34,280 Speaker 1: been civilian debts too, including many goals at a primary school. 7 00:00:35,159 --> 00:00:38,120 Speaker 1: In response to the attacks, Iran, a major oil exporter, 8 00:00:38,720 --> 00:00:42,800 Speaker 1: launched retaliatory strikes across the Middle East, killing both civilians 9 00:00:42,800 --> 00:00:46,480 Speaker 1: and military personnel. Ships in the Strait of Hormuz, which 10 00:00:46,520 --> 00:00:49,000 Speaker 1: carries as much as a fifth of global oil supply, 11 00:00:49,240 --> 00:00:52,240 Speaker 1: have come to a halt. Qatar has stopped a liquefied 12 00:00:52,280 --> 00:00:57,000 Speaker 1: natural gas facility. Saudi Arabia has shut its largest oil refinery. 13 00:00:57,760 --> 00:01:00,240 Speaker 1: All of this will have ripple effects for money to 14 00:01:00,280 --> 00:01:03,640 Speaker 1: come in the region and globally. So today on Zero 15 00:01:03,880 --> 00:01:06,399 Speaker 1: we try to answer the question what will the war 16 00:01:06,440 --> 00:01:10,640 Speaker 1: with Iran do to the energy transition? My guest is 17 00:01:10,760 --> 00:01:14,320 Speaker 1: Jason Bordoff, director of the Center on Global Energy Policy 18 00:01:14,360 --> 00:01:17,560 Speaker 1: at Columbia University. He served as a special assistant to 19 00:01:17,600 --> 00:01:21,280 Speaker 1: President Barack Obama and was the energy and climate expert 20 00:01:21,360 --> 00:01:25,000 Speaker 1: on the National Security Council. As always, if you have 21 00:01:25,040 --> 00:01:27,720 Speaker 1: any feedback for Zero, get in touch at zero port 22 00:01:27,720 --> 00:01:31,039 Speaker 1: at Bloomberg dot net. And just a note. This interview 23 00:01:31,160 --> 00:01:38,680 Speaker 1: was recorded on Tuesday morning, March third. Jason, Welcome back 24 00:01:38,680 --> 00:01:39,120 Speaker 1: to Zero. 25 00:01:39,280 --> 00:01:41,120 Speaker 2: Great to see you, Akha, Thanks so much for the invitation. 26 00:01:41,480 --> 00:01:45,640 Speaker 1: So over the weekend, US and Israel attacked Iran and 27 00:01:45,680 --> 00:01:50,600 Speaker 1: there have been reactions from Iran all over the Middle East. 28 00:01:51,120 --> 00:01:52,120 Speaker 1: What do we know so far? 29 00:01:52,480 --> 00:01:56,320 Speaker 2: Well, we know that we know that there's a huge 30 00:01:56,320 --> 00:02:00,120 Speaker 2: amount of uncertainty and risk involved in the operation. And 31 00:02:00,160 --> 00:02:03,320 Speaker 2: I think the US President Donald Trump has offered different 32 00:02:03,360 --> 00:02:07,160 Speaker 2: explanations for the objective. That's really important. And as an American, 33 00:02:07,160 --> 00:02:08,880 Speaker 2: I think if you're going to put American soldiers in 34 00:02:08,919 --> 00:02:12,120 Speaker 2: harm's way, it's pretty important that our leaders explain why 35 00:02:12,160 --> 00:02:15,440 Speaker 2: we're doing this. Is it about regime change, Is it 36 00:02:15,440 --> 00:02:20,160 Speaker 2: about the nuclear weapons which we were told were obliterated 37 00:02:20,240 --> 00:02:22,840 Speaker 2: a year ago, or is it something else? And that's 38 00:02:22,880 --> 00:02:26,000 Speaker 2: really important to understand why we're using so much capability 39 00:02:26,120 --> 00:02:28,560 Speaker 2: to attack a country in the Middle East, end, how 40 00:02:28,600 --> 00:02:31,079 Speaker 2: long this might last, and what success looks like, and 41 00:02:31,120 --> 00:02:36,400 Speaker 2: how it might end. There's a lot of uncertainty about 42 00:02:36,520 --> 00:02:40,160 Speaker 2: the response from Iran and also other countries in the Gulf, 43 00:02:40,720 --> 00:02:44,840 Speaker 2: and how this might escalate, and how we're starting to 44 00:02:44,840 --> 00:02:50,760 Speaker 2: see indications of how countries the Iranians could retaliate. Initially, 45 00:02:50,840 --> 00:02:54,760 Speaker 2: they hit US military installations in a variety of golf 46 00:02:54,840 --> 00:03:00,000 Speaker 2: Arab countries, also some softer targets, like in the tourism infrastructs. 47 00:03:00,080 --> 00:03:05,560 Speaker 2: Sure initially pretty restrained in what their actions were to 48 00:03:05,600 --> 00:03:09,679 Speaker 2: retaliate against energy infrastructure or water desalination plants or other 49 00:03:09,720 --> 00:03:13,440 Speaker 2: things that could impose a lot of pain on countries 50 00:03:13,480 --> 00:03:16,000 Speaker 2: in the region, or perhaps more broadly, But even there, 51 00:03:16,040 --> 00:03:18,840 Speaker 2: we're starting to see a few indications with the major 52 00:03:18,880 --> 00:03:22,480 Speaker 2: Saudi refinery Rastnora and some other things that maybe those 53 00:03:22,520 --> 00:03:25,799 Speaker 2: are not off limits. So what we don't really know 54 00:03:25,840 --> 00:03:28,799 Speaker 2: is how long this will last and how significantly it 55 00:03:28,919 --> 00:03:30,120 Speaker 2: will escalate. 56 00:03:30,360 --> 00:03:33,920 Speaker 1: So let's start with the purpose of this war, because 57 00:03:34,240 --> 00:03:37,680 Speaker 1: until we know the aims, we won't know when this 58 00:03:37,720 --> 00:03:41,400 Speaker 1: will end and how this will end. The stated purpose, 59 00:03:41,440 --> 00:03:44,760 Speaker 1: at least from the Trump administration, is that they want 60 00:03:44,800 --> 00:03:47,640 Speaker 1: to make sure that Iran never gets a nuclear weapon. 61 00:03:47,800 --> 00:03:50,920 Speaker 1: The other is to try and destroy the security apparatus 62 00:03:50,920 --> 00:03:54,000 Speaker 1: of Iran. So that it is no longer a threat 63 00:03:54,000 --> 00:04:00,560 Speaker 1: to Israel or to others. Are either of those aims achievable. 64 00:04:00,720 --> 00:04:04,280 Speaker 2: And also to overthrow what I think the administration called 65 00:04:04,280 --> 00:04:07,640 Speaker 2: a bloodthirsty regime. And we should be clear, I don't 66 00:04:07,680 --> 00:04:12,480 Speaker 2: think anyone is deeply upset that the Supreme Leader would 67 00:04:12,520 --> 00:04:14,920 Speaker 2: not be in power anymore in Iran. It was a 68 00:04:14,960 --> 00:04:18,520 Speaker 2: regime that imposed a lot of suffering on the Iranian people, 69 00:04:19,279 --> 00:04:22,320 Speaker 2: and both parties have agreed that it is their policy 70 00:04:22,360 --> 00:04:25,040 Speaker 2: that and many other countries too, that Iran should not 71 00:04:25,080 --> 00:04:27,960 Speaker 2: get a nuclear weapon. Most recently, we heard our Secretary 72 00:04:28,000 --> 00:04:31,080 Speaker 2: of State give comments about how the US had learned 73 00:04:31,080 --> 00:04:34,000 Speaker 2: that Israel was going to strike, and in order to 74 00:04:34,360 --> 00:04:38,480 Speaker 2: preempt that and minimize the casualties that might come from that, 75 00:04:38,520 --> 00:04:41,480 Speaker 2: the US wanted to get ahead of this, which, in 76 00:04:41,520 --> 00:04:45,880 Speaker 2: a sense Israel driving US foreign policy and military action 77 00:04:46,120 --> 00:04:50,120 Speaker 2: in ways that some people were concerned about. So we 78 00:04:50,160 --> 00:04:52,640 Speaker 2: don't really know. Obviously, there's a long history here. When 79 00:04:52,640 --> 00:04:55,039 Speaker 2: when I served in the White House under President Obama, 80 00:04:55,160 --> 00:04:58,640 Speaker 2: initial sanctions were imposed on Iran. The sanctions were with 81 00:04:58,680 --> 00:05:02,760 Speaker 2: bipartisan support an Act of Congress. So that's another issue here. 82 00:05:02,880 --> 00:05:05,480 Speaker 2: Was Congress consulted. If you go to war, Congress should 83 00:05:05,480 --> 00:05:07,880 Speaker 2: presumably have a role. We just had the State of 84 00:05:07,880 --> 00:05:10,919 Speaker 2: the Union address not long before the President undertook this effort, 85 00:05:11,000 --> 00:05:14,240 Speaker 2: and we didn't really hear an explanation for why we 86 00:05:14,560 --> 00:05:18,599 Speaker 2: might be going to war in that address and the 87 00:05:18,680 --> 00:05:21,279 Speaker 2: sanctions on Iran, which part of the role I played 88 00:05:21,320 --> 00:05:23,520 Speaker 2: in the White House was really thinking about the energy implications. 89 00:05:23,560 --> 00:05:25,159 Speaker 2: How do you put a lot of economic pressure on 90 00:05:25,200 --> 00:05:28,360 Speaker 2: Iran without pushing up oil prices for everyone else. And 91 00:05:28,640 --> 00:05:31,719 Speaker 2: years later that resulted in an Iran nuclear deal, which 92 00:05:31,760 --> 00:05:36,240 Speaker 2: was controversial, many Republicans disapproved of. President Trump tore it up, 93 00:05:36,680 --> 00:05:38,600 Speaker 2: and we know that Iran went back to rebuilding their 94 00:05:38,640 --> 00:05:41,080 Speaker 2: nuclear weapons program. So there has been a stated goal 95 00:05:41,200 --> 00:05:44,760 Speaker 2: to take that out. And again that was the rationale 96 00:05:44,800 --> 00:05:47,479 Speaker 2: a year ago for the bomb strikes on Iran, which 97 00:05:47,520 --> 00:05:50,880 Speaker 2: we were told were quite successful, but it seems like 98 00:05:51,000 --> 00:05:54,200 Speaker 2: now there's concern that maybe they were closer than people 99 00:05:54,200 --> 00:05:55,839 Speaker 2: thought to being able to rebuild that and that was 100 00:05:55,839 --> 00:05:58,320 Speaker 2: the least part of the motivation here. It is hard 101 00:05:58,400 --> 00:06:03,839 Speaker 2: to orchestrate regime change from air strikes alone, and we 102 00:06:03,880 --> 00:06:07,200 Speaker 2: don't really know. We've had many people in the leadership 103 00:06:07,240 --> 00:06:10,279 Speaker 2: circle around the Supreme Leader who were killed in these strikes. 104 00:06:11,000 --> 00:06:12,680 Speaker 2: He was eighty six years old, So I think the 105 00:06:12,720 --> 00:06:16,840 Speaker 2: Iranians were planning at some point for their own leadership change. 106 00:06:17,240 --> 00:06:20,080 Speaker 2: But obviously that's not the same as regime change and 107 00:06:20,880 --> 00:06:24,760 Speaker 2: democratic government coming into place, or the people of Iran 108 00:06:25,200 --> 00:06:28,400 Speaker 2: having a stronger say in who rules that country were 109 00:06:28,440 --> 00:06:30,320 Speaker 2: and we seem pretty far away from that right now. 110 00:06:30,480 --> 00:06:32,960 Speaker 1: So so far we haven't mentioned energy, but we have 111 00:06:33,120 --> 00:06:37,279 Speaker 1: seen that past US military interventions have been tied to 112 00:06:37,360 --> 00:06:40,120 Speaker 1: energy in one form or the other. Most recently the 113 00:06:40,320 --> 00:06:47,000 Speaker 1: Venezuelan change of leadership from Maduro to Maduro's other partners. 114 00:06:48,360 --> 00:06:51,960 Speaker 1: That was explicitly stated as a desire to make sure 115 00:06:52,040 --> 00:06:56,440 Speaker 1: Venezuelan oil is available to the US in some form, 116 00:06:56,480 --> 00:06:59,039 Speaker 1: either through US companies going there or for the US 117 00:06:59,080 --> 00:07:03,200 Speaker 1: to sell it to other partners abroad. Maybe the Iraq 118 00:07:03,240 --> 00:07:05,680 Speaker 1: War had a little bit of energy going in, if 119 00:07:05,720 --> 00:07:08,640 Speaker 1: not the stated purpose, because the stated purpose was to 120 00:07:08,720 --> 00:07:12,200 Speaker 1: destroy weapons of mass destruction. But of course after that 121 00:07:12,480 --> 00:07:17,000 Speaker 1: we did have US companies making deals in Iraq for 122 00:07:17,200 --> 00:07:20,680 Speaker 1: oil and gas. How much of this might be to 123 00:07:20,760 --> 00:07:25,240 Speaker 1: try and get access to Iranian all in gas assets. 124 00:07:25,120 --> 00:07:26,600 Speaker 2: Well, it seems like the risk here is in the 125 00:07:26,640 --> 00:07:31,200 Speaker 2: other directions. So you're right that after the US military 126 00:07:31,200 --> 00:07:34,360 Speaker 2: went in and seized Maduro and brought him to the 127 00:07:34,440 --> 00:07:38,000 Speaker 2: US for trial, the press conference from the United States 128 00:07:38,000 --> 00:07:41,000 Speaker 2: from President Trump put oil front and center in the 129 00:07:41,080 --> 00:07:43,520 Speaker 2: rationale for that military action in a way that frankly, 130 00:07:43,520 --> 00:07:46,320 Speaker 2: I found surprising, because there were many other rationales one 131 00:07:46,320 --> 00:07:49,520 Speaker 2: could imagine, we're motivating the US action. Our Secretary of 132 00:07:49,520 --> 00:07:53,480 Speaker 2: State Marco Rubio from Florida has long been focused on 133 00:07:53,520 --> 00:07:58,200 Speaker 2: the issues of Cuba and Venezuela and populations in the 134 00:07:58,280 --> 00:08:01,600 Speaker 2: US that really were supporting of action to remove Maduro 135 00:08:01,640 --> 00:08:05,680 Speaker 2: from power. So I think there were many reasons for it. 136 00:08:05,760 --> 00:08:08,200 Speaker 2: But then President Trump put front and center the idea 137 00:08:08,200 --> 00:08:10,360 Speaker 2: that Venezuela, which we should remember back in the nineteen 138 00:08:10,440 --> 00:08:13,840 Speaker 2: nineties was one of the most well respected oil companies 139 00:08:13,880 --> 00:08:17,600 Speaker 2: in the world, working with foreign partners, and was producing 140 00:08:17,640 --> 00:08:21,160 Speaker 2: at quite significant levels three four million barrels a day. 141 00:08:21,240 --> 00:08:25,280 Speaker 2: That's been completely decimated. The possibility that you could return 142 00:08:25,400 --> 00:08:27,320 Speaker 2: it's going to take many years, lots of money. We 143 00:08:27,320 --> 00:08:29,760 Speaker 2: could talk more about that, that you could return to 144 00:08:29,920 --> 00:08:32,760 Speaker 2: much larger oil production in Venezuela, and it seems like 145 00:08:32,760 --> 00:08:35,040 Speaker 2: the Trump administration wants a more active role and how 146 00:08:35,080 --> 00:08:37,520 Speaker 2: that oil is marketed and how the revenues are used 147 00:08:37,559 --> 00:08:41,000 Speaker 2: by the Venezuelan government that has the potential to bring 148 00:08:41,000 --> 00:08:43,480 Speaker 2: more supply to market. I think in this case, Iran, 149 00:08:43,679 --> 00:08:45,959 Speaker 2: even with the sanctions that were in place, although being 150 00:08:46,000 --> 00:08:51,680 Speaker 2: loosely enforced, has been producing oil at levels close to 151 00:08:51,880 --> 00:08:55,400 Speaker 2: historic levels before since the Iranian Revolution. So if anything, 152 00:08:55,400 --> 00:08:59,240 Speaker 2: this military action puts Iranian supply at risk and obviously 153 00:08:59,280 --> 00:09:02,200 Speaker 2: puts broader oil supplies in the region at risk, all 154 00:09:02,240 --> 00:09:05,480 Speaker 2: of which would be a risk to push oil prices up, 155 00:09:06,120 --> 00:09:08,880 Speaker 2: which we've heard President Trump say quite clearly he is 156 00:09:08,920 --> 00:09:13,120 Speaker 2: not a fan of. He wants lower, not higher oil prices. 157 00:09:13,480 --> 00:09:18,160 Speaker 2: So I don't think there's too much motivation here of 158 00:09:18,200 --> 00:09:22,480 Speaker 2: trying to bring more oil supply to market. Perhaps the 159 00:09:22,559 --> 00:09:27,720 Speaker 2: ideas that with more US control over the Iranian government, 160 00:09:27,760 --> 00:09:31,080 Speaker 2: there's more opportunities for US companies and maybe even for 161 00:09:31,120 --> 00:09:33,240 Speaker 2: the US government to be involved a little bit and 162 00:09:33,280 --> 00:09:35,839 Speaker 2: how the oil is marketed and sold and the revenues used, 163 00:09:36,200 --> 00:09:38,080 Speaker 2: But I think we're pretty far away from that at 164 00:09:38,080 --> 00:09:40,040 Speaker 2: this point. If anything, there's just a risk to supply, 165 00:09:40,320 --> 00:09:41,240 Speaker 2: and that's why prices have. 166 00:09:41,280 --> 00:09:45,679 Speaker 1: Searched right, The prices on Monday when the training began 167 00:09:46,080 --> 00:09:50,320 Speaker 1: searched by about fifteen percent. We are at price levels 168 00:09:50,360 --> 00:09:54,960 Speaker 1: now that we're back in June twenty twenty five. Some 169 00:09:55,000 --> 00:09:59,680 Speaker 1: say that's just not much of an increase, given this 170 00:10:00,000 --> 00:10:03,000 Speaker 1: region of the world produces so much of the oil, 171 00:10:03,040 --> 00:10:06,200 Speaker 1: and the Strait of Horror Moves is responsible for nearly 172 00:10:06,240 --> 00:10:10,640 Speaker 1: twenty percent of the oil transport that goes out to 173 00:10:10,640 --> 00:10:14,839 Speaker 1: the rest of the world. Why was the price rise 174 00:10:15,360 --> 00:10:17,640 Speaker 1: not as high as many expected it might be. 175 00:10:17,840 --> 00:10:20,400 Speaker 2: I think that's the right question to ask, because yes, 176 00:10:20,440 --> 00:10:22,959 Speaker 2: oil price is surged, and all the headlines said energy 177 00:10:22,960 --> 00:10:25,679 Speaker 2: prices went through the roof, and natural gas prices even more. 178 00:10:25,679 --> 00:10:25,760 Speaker 1: So. 179 00:10:25,800 --> 00:10:28,680 Speaker 2: I'm sure we'll come to that. But if you had said, 180 00:10:28,720 --> 00:10:33,440 Speaker 2: what's the mother of all worst case scenarios for the 181 00:10:33,440 --> 00:10:35,720 Speaker 2: global oil market that would send prices to one hundred 182 00:10:35,720 --> 00:10:38,000 Speaker 2: and fifty or two hundred dollars a barrel, it would 183 00:10:38,040 --> 00:10:40,160 Speaker 2: be war in the Middle East that would close the 184 00:10:40,160 --> 00:10:42,559 Speaker 2: Strait of Hormoos. And right now we see war in 185 00:10:42,600 --> 00:10:44,840 Speaker 2: the Middle East, and at least temporarily as a precautionary 186 00:10:44,880 --> 00:10:48,000 Speaker 2: MEP measure, traffic through the Strait of hor Moos restricted 187 00:10:48,520 --> 00:10:50,760 Speaker 2: and oil prices are around eighty dollars a barrel. This 188 00:10:50,840 --> 00:10:54,920 Speaker 2: is not a historically very high oil price, and it's 189 00:10:55,000 --> 00:10:57,560 Speaker 2: quite striking actually, And I think this variety of reasons 190 00:10:57,559 --> 00:11:00,360 Speaker 2: for that. One is I think a lot of people 191 00:11:00,360 --> 00:11:02,800 Speaker 2: in the oil market have become a little bit immune 192 00:11:04,120 --> 00:11:08,320 Speaker 2: to the possibility of real significant oil supply disruptions. We 193 00:11:08,360 --> 00:11:11,560 Speaker 2: have seen so many conflicts in recent years that since 194 00:11:11,600 --> 00:11:14,000 Speaker 2: the oil crises of the nineteen seventies, people would have 195 00:11:14,040 --> 00:11:18,840 Speaker 2: thought geopolitical events that would have really significantly affected oil supply. 196 00:11:19,760 --> 00:11:24,880 Speaker 2: Russia's invasion of Ukraine and then sanctions and the response 197 00:11:24,920 --> 00:11:28,960 Speaker 2: from Europe, the bombs and drones and missiles being lawed 198 00:11:29,000 --> 00:11:32,040 Speaker 2: back and forth between Iran and Israel, the US strike 199 00:11:32,240 --> 00:11:35,280 Speaker 2: on Iran, and in almost every one of these cases, 200 00:11:35,520 --> 00:11:38,040 Speaker 2: oil suppli has been barely disrupted. Even when Iran in 201 00:11:38,040 --> 00:11:42,560 Speaker 2: twenty nineteen I think, attacked Abcake, the important Saudi oil facility, 202 00:11:43,480 --> 00:11:46,280 Speaker 2: Saudi Ramco did a remarkable job of getting that facility 203 00:11:46,400 --> 00:11:50,160 Speaker 2: back up and running very very quickly. So we have 204 00:11:50,280 --> 00:11:52,120 Speaker 2: all of this conflict, we have a new world of 205 00:11:52,120 --> 00:11:57,480 Speaker 2: geopolitical competition and disorder and fragmentation and oil keeps flowing, 206 00:11:57,600 --> 00:11:59,520 Speaker 2: So that's one thing. The second is the market's pretty 207 00:11:59,520 --> 00:12:02,120 Speaker 2: well supplied. We were already expecting in twenty twenty six 208 00:12:02,200 --> 00:12:04,920 Speaker 2: that supply would exceed demand by two or three million 209 00:12:04,920 --> 00:12:07,839 Speaker 2: barrels a day. There's some measure, not a huge amount, 210 00:12:07,920 --> 00:12:10,320 Speaker 2: but some measure of spare capacity, and we saw Opek 211 00:12:10,559 --> 00:12:13,480 Speaker 2: plus countries on Sunday increase production a little bit. You 212 00:12:13,520 --> 00:12:16,200 Speaker 2: still have strategic stocks that can be used, so there 213 00:12:16,240 --> 00:12:18,640 Speaker 2: are some buffers in the system, and I think all 214 00:12:18,720 --> 00:12:22,720 Speaker 2: of that are giving some comfort to the oil market. 215 00:12:22,960 --> 00:12:25,720 Speaker 2: But we should be clear that the Strait of Hormus 216 00:12:26,000 --> 00:12:30,880 Speaker 2: vitally important maritime straight for energy transit, and if that 217 00:12:31,000 --> 00:12:35,640 Speaker 2: were to remain disrupted for more than this week or 218 00:12:35,640 --> 00:12:38,240 Speaker 2: a couple of days, you're going to see oil prices 219 00:12:38,280 --> 00:12:40,480 Speaker 2: go up further from here, probably to the triple digits. 220 00:12:40,880 --> 00:12:44,079 Speaker 1: Now, let's come to gas, because it's not just oil 221 00:12:44,120 --> 00:12:46,440 Speaker 1: that flows through the Strait of Hormos, although that is 222 00:12:46,440 --> 00:12:49,720 Speaker 1: the commodity we talk about the most with where gas 223 00:12:49,720 --> 00:12:52,160 Speaker 1: markets are more and more of it is coming from 224 00:12:52,200 --> 00:12:55,520 Speaker 1: liquefied natural gas, a lot of it being transported on 225 00:12:55,600 --> 00:13:00,240 Speaker 1: these bulbous tankers. Qatar is producing about a phi the 226 00:13:00,280 --> 00:13:03,760 Speaker 1: global supply of gas. Some of the countries, like Pakistan 227 00:13:03,880 --> 00:13:08,480 Speaker 1: is completely dependent on Qatar imports. India gets about half 228 00:13:08,559 --> 00:13:11,839 Speaker 1: of its gas from Qatar. China gets about thirty percent 229 00:13:11,840 --> 00:13:14,680 Speaker 1: of its gas, So some countries are much more exposed 230 00:13:14,880 --> 00:13:19,400 Speaker 1: to Qatar gas. And we know currently the LNG production 231 00:13:19,720 --> 00:13:22,920 Speaker 1: is shut down in Qatar because the Qataris claim there 232 00:13:22,920 --> 00:13:27,240 Speaker 1: was a drone attack from Iran. We have seen a 233 00:13:27,360 --> 00:13:31,480 Speaker 1: much bigger price spike on the gas market here in Europe, 234 00:13:31,960 --> 00:13:34,800 Speaker 1: which in the last few years has seen quite a 235 00:13:34,800 --> 00:13:38,000 Speaker 1: few gas price spikes because of what happened in the 236 00:13:38,080 --> 00:13:41,280 Speaker 1: Russia Ukraine War. How do you think about the risk 237 00:13:41,320 --> 00:13:44,600 Speaker 1: premium on the gas price? What are the factors playing 238 00:13:44,880 --> 00:13:45,560 Speaker 1: a role here? 239 00:13:45,920 --> 00:13:48,040 Speaker 2: Yeah, then, I mean it's a really important question because obviously, 240 00:13:48,040 --> 00:13:49,920 Speaker 2: when we talk about the Persian golf in the Strait 241 00:13:49,920 --> 00:13:52,280 Speaker 2: of Hormuz, oil springs top of mind to people. And 242 00:13:52,320 --> 00:13:54,560 Speaker 2: that's especially true in the United States because the US 243 00:13:54,640 --> 00:13:56,440 Speaker 2: is kind of blessed with an abundant amount of cheap 244 00:13:56,480 --> 00:13:59,240 Speaker 2: natural gas and a price for natural gas that is 245 00:13:59,240 --> 00:14:01,520 Speaker 2: for the most part connected, at least of the time 246 00:14:01,520 --> 00:14:04,680 Speaker 2: being from geopolitical events and from the world price. So 247 00:14:04,960 --> 00:14:07,840 Speaker 2: you're not going to see the same increase in prices 248 00:14:07,880 --> 00:14:09,960 Speaker 2: in the United States that you might see in the 249 00:14:10,000 --> 00:14:13,199 Speaker 2: price of gasoline at the pump, because oil prices go up. 250 00:14:13,440 --> 00:14:15,760 Speaker 2: But on a global basis, the straight of hormonvez is 251 00:14:15,880 --> 00:14:20,200 Speaker 2: vitally important to flows of natural gas, and particularly energy 252 00:14:20,320 --> 00:14:23,840 Speaker 2: gas on tankers. LG's become more important to the global 253 00:14:23,840 --> 00:14:26,480 Speaker 2: gas market in recent years. The United States is a 254 00:14:26,480 --> 00:14:29,720 Speaker 2: big part of that, but Katar comes next, and of 255 00:14:29,720 --> 00:14:33,360 Speaker 2: course in Europe, which has suffered this enormous energy crisis 256 00:14:33,400 --> 00:14:35,160 Speaker 2: in the last couple of years, and prices are not 257 00:14:35,200 --> 00:14:37,840 Speaker 2: where they as bad as they once were, but they're 258 00:14:37,880 --> 00:14:42,200 Speaker 2: still quite well elevated above the gas price pre Russia's 259 00:14:42,240 --> 00:14:45,360 Speaker 2: invasion of Ukraine. High energy prices are still a source 260 00:14:45,400 --> 00:14:48,760 Speaker 2: of political and economic concern their concerns about de industrialization 261 00:14:48,800 --> 00:14:52,520 Speaker 2: as a result of high energy prices here in Europe, 262 00:14:52,520 --> 00:14:56,920 Speaker 2: and we saw prices surge thirty forty percent when trading 263 00:14:56,960 --> 00:14:59,840 Speaker 2: opened because with the loss of Russian gas, Europe has 264 00:15:00,000 --> 00:15:03,280 Speaker 2: really struggled to cope and to find alternative sources as supply. 265 00:15:03,480 --> 00:15:07,200 Speaker 2: There's not as much slack in the global gas system 266 00:15:08,120 --> 00:15:11,440 Speaker 2: as there is in the global oil system. Frankly, you 267 00:15:11,520 --> 00:15:15,400 Speaker 2: don't have same levels of spare capacity. Europe is ending 268 00:15:15,400 --> 00:15:20,680 Speaker 2: this winter with quite low inventories of natural gas, maybe 269 00:15:20,720 --> 00:15:23,120 Speaker 2: twenty or thirty percent full. The next several months would 270 00:15:23,120 --> 00:15:24,800 Speaker 2: be the time you'd start to fill those because if 271 00:15:24,840 --> 00:15:28,080 Speaker 2: there's a really cold winter next winter, Europe is really 272 00:15:28,080 --> 00:15:30,000 Speaker 2: going to struggle to handle that unless it can get 273 00:15:30,000 --> 00:15:33,120 Speaker 2: its inventory levels full. I suspect what you'll see in 274 00:15:33,160 --> 00:15:36,520 Speaker 2: response to disruptions in gas supply will be that gas 275 00:15:36,560 --> 00:15:40,040 Speaker 2: prices will surge. In response to those higher prices, Europe 276 00:15:40,040 --> 00:15:43,160 Speaker 2: will pull LNG supplies in from other places that might 277 00:15:43,200 --> 00:15:46,080 Speaker 2: have otherwise gone to Asia, and frankly, the alternative is 278 00:15:46,080 --> 00:15:48,560 Speaker 2: going to be coal. We're going to see in Asia, 279 00:15:48,600 --> 00:15:53,120 Speaker 2: in particular, in response to those higher prices, more consumption 280 00:15:53,160 --> 00:15:54,640 Speaker 2: of coal. That's going to free up some of those 281 00:15:54,680 --> 00:15:58,400 Speaker 2: gas supplies to go elsewhere. Hopefully we can talk about 282 00:15:58,400 --> 00:16:00,760 Speaker 2: this later. It'll remind people to send a signal that 283 00:16:00,840 --> 00:16:03,960 Speaker 2: maybe things like energy efficiency and some amental of electrification 284 00:16:04,080 --> 00:16:07,200 Speaker 2: might help with energy security in the long run, but 285 00:16:07,280 --> 00:16:08,880 Speaker 2: in the near term, I think it's a real risk. 286 00:16:14,240 --> 00:16:16,360 Speaker 1: Join me after the break for more of my conversation 287 00:16:16,440 --> 00:16:19,440 Speaker 1: with Jason Bordoff. If you're enjoying this episode, please take 288 00:16:19,440 --> 00:16:22,560 Speaker 1: a moment to rate and review the show on Apple Podcasts, Spotify, 289 00:16:22,680 --> 00:16:23,240 Speaker 1: and YouTube. 290 00:16:23,560 --> 00:16:23,920 Speaker 2: Thank you. 291 00:16:38,080 --> 00:16:40,360 Speaker 1: Now, let's talk about the fact that what we are seeing, 292 00:16:40,400 --> 00:16:42,440 Speaker 1: at least in the markets, now, this is a you know, 293 00:16:42,480 --> 00:16:44,760 Speaker 1: every war is different, and the scale of this war 294 00:16:45,000 --> 00:16:48,400 Speaker 1: is much bigger than what happened between Russia and Ukraine, 295 00:16:48,400 --> 00:16:51,360 Speaker 1: two countries that were just barring for very long, but 296 00:16:51,560 --> 00:16:56,280 Speaker 1: they did keep at least the weapons and attacks to 297 00:16:56,800 --> 00:17:00,800 Speaker 1: a regional limit. This is spreading out all the Middle least. 298 00:17:00,880 --> 00:17:04,400 Speaker 1: But in terms of the energy market, there are parallels 299 00:17:04,520 --> 00:17:07,920 Speaker 1: with the Russia Ukraine war that are worth exploring because 300 00:17:07,960 --> 00:17:12,080 Speaker 1: we've seen this kind of price spike, both in oil 301 00:17:12,359 --> 00:17:16,520 Speaker 1: and in gas, show up in energy policy, in the 302 00:17:16,560 --> 00:17:20,040 Speaker 1: political environment in many countries. Here in the UK we've 303 00:17:20,040 --> 00:17:22,720 Speaker 1: had a cost of living crisis conversation that's led to 304 00:17:22,960 --> 00:17:25,640 Speaker 1: a change in government. That's true of many other governments 305 00:17:25,640 --> 00:17:30,080 Speaker 1: around the world. What did we learn from the Russia 306 00:17:30,200 --> 00:17:36,359 Speaker 1: Ukraine War and managing these price spikes that we could 307 00:17:36,359 --> 00:17:38,359 Speaker 1: apply in energy policy today. 308 00:17:38,560 --> 00:17:40,399 Speaker 2: Yeah, I think it's a really good thing to go 309 00:17:40,480 --> 00:17:42,880 Speaker 2: back and look at, because again, Russia, Europe just came 310 00:17:42,920 --> 00:17:47,000 Speaker 2: out of this severe energy crisis four years ago, triggered 311 00:17:47,000 --> 00:17:50,960 Speaker 2: by Russia's invasion of Ukraine. Russia cut off most of 312 00:17:51,000 --> 00:17:53,439 Speaker 2: the gas supply to Europe, but not all of it, 313 00:17:53,480 --> 00:17:57,280 Speaker 2: and for a while russia pipeline and energy supplies were 314 00:17:57,280 --> 00:18:00,520 Speaker 2: continuing it maybe a third of the level were before 315 00:18:00,560 --> 00:18:05,240 Speaker 2: the conflict. A month ago, the European Parliament agreed to 316 00:18:05,280 --> 00:18:08,400 Speaker 2: take Russian gas to zero. And if this conflict continues 317 00:18:08,440 --> 00:18:11,240 Speaker 2: and Katari LNG is disrupted for any meaningful amount of time, 318 00:18:11,359 --> 00:18:15,320 Speaker 2: I'm sure people in Brussels will be requestioning that timeline, 319 00:18:15,800 --> 00:18:20,000 Speaker 2: just because the economic effects are so dire. And so 320 00:18:20,080 --> 00:18:22,399 Speaker 2: what we learned is that in any energy crisis, this 321 00:18:22,520 --> 00:18:24,919 Speaker 2: is true in oil crises. As soon as oil prices 322 00:18:24,960 --> 00:18:27,399 Speaker 2: go through the roof, you see politicians running around like 323 00:18:27,480 --> 00:18:29,280 Speaker 2: chickens with their head cut off to find something to 324 00:18:29,280 --> 00:18:32,760 Speaker 2: do to help consumers. Wave the gasoline tax, release the 325 00:18:32,800 --> 00:18:36,320 Speaker 2: strategic petroleum reserve. Most of the things that you need 326 00:18:36,400 --> 00:18:40,679 Speaker 2: to do to increase your resilience to shocks to the 327 00:18:40,680 --> 00:18:43,600 Speaker 2: global market take time, so it's hard to do in 328 00:18:43,640 --> 00:18:46,000 Speaker 2: the immediate crisis. But when the immediate crisis fades, you 329 00:18:46,000 --> 00:18:47,320 Speaker 2: want to stay the course and you want to do 330 00:18:47,359 --> 00:18:49,600 Speaker 2: those things so you're better prepared for next time. We 331 00:18:49,640 --> 00:18:51,919 Speaker 2: don't tend to do that. When the crisis passes, we 332 00:18:52,000 --> 00:18:54,320 Speaker 2: tend to forget about the problem, and then we're faced 333 00:18:54,320 --> 00:18:55,840 Speaker 2: about it the next time it comes around. And I 334 00:18:55,840 --> 00:18:58,679 Speaker 2: think that's true in the gas market as well. So 335 00:18:59,480 --> 00:19:03,840 Speaker 2: when rush and pipeline supplies to Europe were disrupted, prices 336 00:19:03,880 --> 00:19:06,960 Speaker 2: went up. And because Europe had taken steps to build 337 00:19:07,000 --> 00:19:12,159 Speaker 2: out some reverse flow capability, some more pipeline interconnections, and 338 00:19:12,280 --> 00:19:15,520 Speaker 2: had some import capacity and build some more import capacity 339 00:19:15,600 --> 00:19:19,000 Speaker 2: very quickly, it had an ability to pull alternative supplies 340 00:19:19,080 --> 00:19:21,719 Speaker 2: into its market from a global market, but it had 341 00:19:21,760 --> 00:19:24,840 Speaker 2: to pay a price for it. And so you know, 342 00:19:24,880 --> 00:19:29,199 Speaker 2: since the nineteen seventies oil crises, when oil was not 343 00:19:29,240 --> 00:19:32,040 Speaker 2: even traded as a global commodity on the nim X 344 00:19:32,119 --> 00:19:36,600 Speaker 2: market or anything, the development over time through the nineteen 345 00:19:36,600 --> 00:19:40,920 Speaker 2: eighties in particular of a well functioning, interconnected, deep liquid 346 00:19:40,920 --> 00:19:44,120 Speaker 2: global market, in my view, provided more and not less security. 347 00:19:44,160 --> 00:19:46,960 Speaker 2: We talk a lot about independence, but actually security comes 348 00:19:47,000 --> 00:19:50,439 Speaker 2: from interdependence in a global market in case there's a 349 00:19:50,440 --> 00:19:53,360 Speaker 2: disruption somewhere. The gas market is starting to function more 350 00:19:53,400 --> 00:19:55,440 Speaker 2: like that. It's why Europe was able to cope because 351 00:19:55,440 --> 00:19:57,520 Speaker 2: it could pull alternative supplies in. It just had to 352 00:19:57,520 --> 00:20:00,000 Speaker 2: pay a steep price for it. And that's probably where 353 00:20:00,200 --> 00:20:02,760 Speaker 2: Europe is right now. Again. In the long run, the 354 00:20:02,760 --> 00:20:06,000 Speaker 2: stuff you want to be doing simultaneously is picking up 355 00:20:06,040 --> 00:20:08,840 Speaker 2: the low hanging fruit of energy efficiencies, starting to think 356 00:20:08,880 --> 00:20:13,159 Speaker 2: about how to electrify some uses of natural gas like heat, 357 00:20:13,359 --> 00:20:15,240 Speaker 2: that will put you in a better position the next 358 00:20:15,240 --> 00:20:17,560 Speaker 2: time this might happen. Who knows when that might be. 359 00:20:18,119 --> 00:20:20,080 Speaker 2: The problem is, as you know because you've been writing 360 00:20:20,080 --> 00:20:21,760 Speaker 2: about it and talking on this podcast for a long 361 00:20:21,800 --> 00:20:23,680 Speaker 2: time about it, that takes time, and it takes a 362 00:20:23,720 --> 00:20:26,800 Speaker 2: lot of money upfront to put those capital investments in place. 363 00:20:27,280 --> 00:20:30,840 Speaker 2: At a time when European countries are facing levels of 364 00:20:30,840 --> 00:20:33,600 Speaker 2: debt they haven't seen since World War Two, having to 365 00:20:33,640 --> 00:20:36,680 Speaker 2: increase their spending on defense, there's not as much fiscal 366 00:20:36,680 --> 00:20:39,399 Speaker 2: space for the kind of upfront investments you need to 367 00:20:39,440 --> 00:20:41,960 Speaker 2: try to push toward electrification and the kind of energy 368 00:20:41,960 --> 00:20:43,560 Speaker 2: transition that in the long run we need. 369 00:20:43,840 --> 00:20:45,760 Speaker 1: We now have a little bit of evidence that it 370 00:20:45,880 --> 00:20:48,960 Speaker 1: wasn't just industry that got shut down. Of course, Germany 371 00:20:49,040 --> 00:20:53,040 Speaker 1: was particularly affected by high gas price spikes, and some 372 00:20:53,160 --> 00:20:55,880 Speaker 1: industry did shut as a result, but there have been 373 00:20:56,119 --> 00:20:59,720 Speaker 1: efficiency gains at least at the household levels that have sustained. 374 00:21:00,200 --> 00:21:03,399 Speaker 1: So some of the efficiency gains came through. But we 375 00:21:03,440 --> 00:21:07,080 Speaker 1: did see legislation from the European Union to try and 376 00:21:07,160 --> 00:21:12,040 Speaker 1: speed up it's built of renewable energy built out of 377 00:21:12,560 --> 00:21:16,000 Speaker 1: the grid. That also had an impact on trying to 378 00:21:16,040 --> 00:21:19,680 Speaker 1: reduce both coal use because there is still significant coal 379 00:21:19,800 --> 00:21:25,879 Speaker 1: use across Europe and gas use in the market. But 380 00:21:26,000 --> 00:21:29,920 Speaker 1: it is something that Europe, which has even though it's 381 00:21:29,960 --> 00:21:33,800 Speaker 1: fiscal capacity stight, still has capital to start to do. 382 00:21:34,280 --> 00:21:38,680 Speaker 1: What about developing countries where there is much less room 383 00:21:39,000 --> 00:21:43,880 Speaker 1: to actually spend money, and places like Pakistan and Bangladesh 384 00:21:43,960 --> 00:21:50,040 Speaker 1: in those gas bikes saw blackouts much longer than people 385 00:21:50,080 --> 00:21:53,719 Speaker 1: are used to, which caused all kinds of political problems. 386 00:21:53,880 --> 00:21:58,640 Speaker 1: What solutions do those places come up with in these situations. 387 00:21:58,000 --> 00:22:00,360 Speaker 2: Well, we're sort of seeing it in Pakistan in time. 388 00:22:00,440 --> 00:22:03,080 Speaker 2: When we talked about the energy crisis that hit Europe 389 00:22:03,080 --> 00:22:06,359 Speaker 2: four years ago after Russian invaded Ukraine, Europe lost a 390 00:22:06,400 --> 00:22:08,200 Speaker 2: lot of its gas supply. It had to go into 391 00:22:08,240 --> 00:22:10,600 Speaker 2: a global market and find other sources of supply. It 392 00:22:10,640 --> 00:22:13,159 Speaker 2: pulled a lot of those LG supplies that would have 393 00:22:13,160 --> 00:22:15,919 Speaker 2: otherwise gone to Asia into Europe again being willing to 394 00:22:15,920 --> 00:22:18,480 Speaker 2: pay a price premium able to pay a price premium. 395 00:22:19,000 --> 00:22:21,320 Speaker 2: We saw coal use in Asia go up instead, and 396 00:22:21,359 --> 00:22:24,840 Speaker 2: coal prices surge in response and then lower to lower 397 00:22:24,840 --> 00:22:27,800 Speaker 2: income countries or lower middle income countries. You mentioned Bangladesh 398 00:22:27,840 --> 00:22:31,119 Speaker 2: and Pakistan really struggled because they got priced out, and 399 00:22:31,160 --> 00:22:33,959 Speaker 2: there were certain countries that struggled to afford any energy 400 00:22:34,040 --> 00:22:37,320 Speaker 2: at all when that kind of response hits the global market. 401 00:22:38,000 --> 00:22:40,760 Speaker 2: At the same time, Pakistan, which had a plan to 402 00:22:41,000 --> 00:22:44,560 Speaker 2: kind of go big on LNG, saw in real time 403 00:22:44,840 --> 00:22:51,639 Speaker 2: the potential volatility, price volatility, and exposure to geopolitical events 404 00:22:51,680 --> 00:22:53,760 Speaker 2: that would come with that. At the same time that 405 00:22:53,840 --> 00:22:56,600 Speaker 2: cheap Chinese solar panels were flooding the Pakistani market. So 406 00:22:56,600 --> 00:23:00,159 Speaker 2: while the Pakistani government had a plan in place to 407 00:23:00,160 --> 00:23:04,280 Speaker 2: build new coal and to do more with LNG, businesses 408 00:23:04,280 --> 00:23:07,080 Speaker 2: and consumers were snapping up Chinese solar panels as fast 409 00:23:07,119 --> 00:23:08,719 Speaker 2: as they could get them because it was the cheapest 410 00:23:08,760 --> 00:23:11,440 Speaker 2: form of energy, so much so that it's starting to 411 00:23:11,440 --> 00:23:13,080 Speaker 2: cause a little bit of a financial crisis in the 412 00:23:13,080 --> 00:23:15,480 Speaker 2: coal sector in Pakistan, which needs to repay debt to 413 00:23:15,480 --> 00:23:18,359 Speaker 2: the Chinese government for building those coal plants. In a 414 00:23:18,400 --> 00:23:21,240 Speaker 2: world where energy security is back at the forefront of 415 00:23:21,240 --> 00:23:24,800 Speaker 2: the conversation, top of mind for policy makers, countries are 416 00:23:24,840 --> 00:23:28,439 Speaker 2: concerned about in a world of geopolitical competition and fragmentation, 417 00:23:28,640 --> 00:23:31,679 Speaker 2: energy being a tip of the spear for sources of 418 00:23:31,800 --> 00:23:35,679 Speaker 2: leverage and weapons that countries have to deploy against others. 419 00:23:36,160 --> 00:23:38,879 Speaker 2: How do countries build their resilience. We see the United 420 00:23:38,880 --> 00:23:41,200 Speaker 2: States pursuing a policy which as we're the largest oil 421 00:23:41,200 --> 00:23:42,800 Speaker 2: and gas producer in the world, so why are we 422 00:23:42,800 --> 00:23:45,520 Speaker 2: buying all this clean energy stuff like EV's from China. 423 00:23:45,560 --> 00:23:48,120 Speaker 2: We're going to double down on petroleum and natural gas. 424 00:23:48,119 --> 00:23:49,960 Speaker 2: We can talk about whether that makes sense or not. 425 00:23:50,600 --> 00:23:52,760 Speaker 2: But Europe is a huge importer. It's exposed to a 426 00:23:52,840 --> 00:23:54,600 Speaker 2: volatile global market. 427 00:23:54,840 --> 00:23:57,400 Speaker 1: One of the sources I spoke to trying to understand 428 00:23:57,480 --> 00:24:00,959 Speaker 1: what's happening in it on but this way David hosted 429 00:24:00,960 --> 00:24:06,160 Speaker 1: from Bloombergenief, who said, you can look at the reaction 430 00:24:06,440 --> 00:24:10,280 Speaker 1: to the war in Iran as a roshak test of 431 00:24:10,320 --> 00:24:12,439 Speaker 1: what people want to see. If you're an oil and 432 00:24:12,480 --> 00:24:16,199 Speaker 1: gas producer, you will turn back and say this is 433 00:24:16,280 --> 00:24:20,240 Speaker 1: exactly why we must invest more in our domestic resources, 434 00:24:20,320 --> 00:24:23,679 Speaker 1: just the way those UK ministers were talking about exploring 435 00:24:23,920 --> 00:24:27,840 Speaker 1: Nazi oil and gas. If you're an importer of fossil fuels, 436 00:24:28,160 --> 00:24:30,359 Speaker 1: this is the moment you'll turn around and say, this 437 00:24:30,480 --> 00:24:33,520 Speaker 1: is exactly why we need to depend on domestic clean 438 00:24:33,600 --> 00:24:37,200 Speaker 1: energy resources. Electrified become more efficient, and we are going 439 00:24:37,240 --> 00:24:39,560 Speaker 1: to see a lot of that playing out across many 440 00:24:39,560 --> 00:24:43,520 Speaker 1: different countries. One example that I've been reporting on over 441 00:24:43,600 --> 00:24:46,800 Speaker 1: the past year has been what's happened in Ethiopia. You know, 442 00:24:46,840 --> 00:24:50,240 Speaker 1: it's a low income country, but it's made a policy 443 00:24:50,320 --> 00:24:53,720 Speaker 1: change that's pretty radical, completely banning the import of fossil 444 00:24:53,760 --> 00:24:56,320 Speaker 1: fuel cars. As a result, the only cars that are 445 00:24:56,320 --> 00:24:59,639 Speaker 1: coming in are electric cars, and people are pretty happy 446 00:24:59,720 --> 00:25:02,000 Speaker 1: right now now two years on now that the charging 447 00:25:02,000 --> 00:25:04,639 Speaker 1: network is starting to be put in place, because electricity 448 00:25:04,680 --> 00:25:09,040 Speaker 1: prices in that country are particularly low given its hydropower resources. 449 00:25:09,800 --> 00:25:13,880 Speaker 1: How much can electric cars really contribute to trying to 450 00:25:14,119 --> 00:25:19,720 Speaker 1: reduce the world dependence on oil If this oil shock 451 00:25:19,840 --> 00:25:22,960 Speaker 1: or if this type of oil shocks keep coming. 452 00:25:23,000 --> 00:25:25,200 Speaker 2: Yeah, well we should remember about twenty percent of global 453 00:25:25,200 --> 00:25:27,480 Speaker 2: oil demand as cars, so we need oil for lots 454 00:25:27,480 --> 00:25:31,240 Speaker 2: of other things. In transportation and in industry and elsewhere, 455 00:25:31,280 --> 00:25:35,399 Speaker 2: and so these price effects. High prices do have an 456 00:25:35,400 --> 00:25:40,560 Speaker 2: effect economically. Even with a higher share of electric vehicles penetrated. 457 00:25:40,600 --> 00:25:43,960 Speaker 2: And we saw in Norway, which has very high rates 458 00:25:44,000 --> 00:25:47,280 Speaker 2: of electric vehicle sales, you know, oil demand didn't fall 459 00:25:47,359 --> 00:25:48,840 Speaker 2: that much, and it took a really long time for 460 00:25:48,840 --> 00:25:50,520 Speaker 2: it to happen because it takes time for the vehicle 461 00:25:50,560 --> 00:25:53,080 Speaker 2: stock to turn over. All that said, there's been a 462 00:25:53,119 --> 00:25:56,080 Speaker 2: lot of reporting about how gasoline prices in the US 463 00:25:56,240 --> 00:25:58,920 Speaker 2: are going to surge. And I have a Tesla, so 464 00:25:59,000 --> 00:26:01,560 Speaker 2: I'm not that concerned about it. Although I live in 465 00:26:01,560 --> 00:26:03,600 Speaker 2: New York, cudit never drive a car anyway. My e 466 00:26:03,720 --> 00:26:05,800 Speaker 2: bike is the way I get around, and so I'm 467 00:26:05,880 --> 00:26:08,680 Speaker 2: especially not concerned about it. So to the extent one 468 00:26:08,720 --> 00:26:11,439 Speaker 2: was more insulated from it, that would definitely help. I 469 00:26:11,480 --> 00:26:16,760 Speaker 2: do think this comes to the broader point of the 470 00:26:16,880 --> 00:26:21,760 Speaker 2: energy transition, electrification, a move toward a clean energy economy, 471 00:26:22,600 --> 00:26:28,159 Speaker 2: and this new world of geopolitical competition and fragmentation that 472 00:26:28,200 --> 00:26:31,960 Speaker 2: we're in. Because the transition you're talking about, and certainly 473 00:26:31,960 --> 00:26:35,200 Speaker 2: if things are more electrified, you still care about gas 474 00:26:35,240 --> 00:26:37,680 Speaker 2: because gas is an important determinant of power prices. They're 475 00:26:37,680 --> 00:26:40,680 Speaker 2: setting the power price here in the UK. Maybe oil 476 00:26:40,680 --> 00:26:43,480 Speaker 2: prices will start to matter a bit less over time, 477 00:26:44,440 --> 00:26:46,879 Speaker 2: but at least in the oil market, you have a 478 00:26:46,880 --> 00:26:50,399 Speaker 2: pretty diversified supply base where no country is responsible for 479 00:26:50,440 --> 00:26:52,919 Speaker 2: producing more than ten to twenty percent of global supply, 480 00:26:53,560 --> 00:26:56,280 Speaker 2: as you know, as well as anyone. When we're talking 481 00:26:56,320 --> 00:26:59,200 Speaker 2: about solar panels and evs and batteries and critical minerals, 482 00:26:59,240 --> 00:27:02,120 Speaker 2: you're talking about seventy eighty ninety percent concentration of those 483 00:27:02,119 --> 00:27:05,000 Speaker 2: supply chains in China. And so there's a different set 484 00:27:05,040 --> 00:27:07,840 Speaker 2: of geopolitical risks that come about. I'm not saying we 485 00:27:07,840 --> 00:27:10,720 Speaker 2: shouldn't have a transition and electrify more, but we do 486 00:27:10,800 --> 00:27:13,240 Speaker 2: have to figure out how to manage those risks and 487 00:27:13,280 --> 00:27:15,040 Speaker 2: how to think about it. Because what I see happening 488 00:27:15,080 --> 00:27:18,520 Speaker 2: now is a lot of countries are responding to that 489 00:27:18,800 --> 00:27:26,719 Speaker 2: with calls for domestic manufacturing, a more vigorous industrial policy, 490 00:27:26,760 --> 00:27:30,960 Speaker 2: putting up walls and fortress like policies, because I said 491 00:27:30,960 --> 00:27:34,600 Speaker 2: a moment ago, security actually comes from interdependence and interconnection. 492 00:27:35,160 --> 00:27:39,120 Speaker 2: But if every country responds to concerns about geopolitical risk 493 00:27:39,160 --> 00:27:41,479 Speaker 2: by trying to build domestic supply chains and do all 494 00:27:41,520 --> 00:27:43,560 Speaker 2: the mining for critical minerals at home, and then the 495 00:27:43,600 --> 00:27:48,280 Speaker 2: refining and processing and then the battery manufacturing. That's incredibly inflationary, 496 00:27:48,320 --> 00:27:50,680 Speaker 2: and that makes all the clean energy we're talking about 497 00:27:50,760 --> 00:27:54,440 Speaker 2: that much more expensive. And so again in the United States, 498 00:27:54,480 --> 00:27:57,600 Speaker 2: you see an administration that admittedly has said, quite literally 499 00:27:57,640 --> 00:28:00,159 Speaker 2: through reversal of the Endangerment Finding, we shouldn't work so 500 00:28:00,200 --> 00:28:03,000 Speaker 2: much about climate change. But it said, we're the largest 501 00:28:03,000 --> 00:28:05,000 Speaker 2: oil and gas producer in the world. So security comes 502 00:28:05,000 --> 00:28:06,840 Speaker 2: from doubling down on that. What are we doing all 503 00:28:06,840 --> 00:28:09,560 Speaker 2: this clean stuff for if all of that is manufactured 504 00:28:09,960 --> 00:28:12,040 Speaker 2: in China. So I say that only because of an 505 00:28:12,080 --> 00:28:14,920 Speaker 2: example like Ethiopia, where I do think a country that's 506 00:28:14,960 --> 00:28:17,399 Speaker 2: not exposed to shocks to the global oil market for 507 00:28:17,400 --> 00:28:20,800 Speaker 2: at least part of its transportation economy can be more resilient. 508 00:28:21,160 --> 00:28:22,800 Speaker 2: We have a whole set of other risks that we 509 00:28:22,880 --> 00:28:25,320 Speaker 2: need to think a lot harder about how to navigate. 510 00:28:25,880 --> 00:28:28,320 Speaker 1: One of the reason which I've been thinking about all 511 00:28:29,040 --> 00:28:34,560 Speaker 1: consumption reductions is this analysis from Kevin Book, an energy analyst, 512 00:28:34,960 --> 00:28:39,280 Speaker 1: who calculated that about a million electric car sold take 513 00:28:39,320 --> 00:28:44,240 Speaker 1: off fifteen thousand barrels of oil consumption per day. Twenty 514 00:28:44,240 --> 00:28:48,680 Speaker 1: twenty five, the world sold about twenty million electric cars, 515 00:28:49,120 --> 00:28:51,760 Speaker 1: and so you're taking off three hundred thousand barrels a 516 00:28:51,840 --> 00:28:54,400 Speaker 1: day of consumption now relative to one hundred million. That's 517 00:28:54,440 --> 00:28:57,320 Speaker 1: still a small number, but we know that the number 518 00:28:57,360 --> 00:29:00,720 Speaker 1: of electric car sold is going up pretty rapid as well. 519 00:29:01,360 --> 00:29:04,520 Speaker 1: But as you said, this is all happening as a result. 520 00:29:04,560 --> 00:29:08,800 Speaker 1: At least the clean energy price declines are happening mostly 521 00:29:08,880 --> 00:29:12,880 Speaker 1: because of China. We've seen in the examples of Pakistan, 522 00:29:13,040 --> 00:29:18,400 Speaker 1: of Cuba, of Ethiopia, that for the first time in 523 00:29:18,440 --> 00:29:25,120 Speaker 1: an energy crisis, developing countries have an access to an alternative. Yes, 524 00:29:25,160 --> 00:29:29,640 Speaker 1: it might be China, but they don't mind the Chinese 525 00:29:29,800 --> 00:29:34,800 Speaker 1: providing these supplies to them because they have political relationships 526 00:29:34,840 --> 00:29:39,880 Speaker 1: that go deeper, or they're forming newer, deeper political relationships 527 00:29:39,880 --> 00:29:42,960 Speaker 1: as we are seeing in Brazil. You have looked at 528 00:29:43,160 --> 00:29:47,080 Speaker 1: energy crises over the last many decades, studied them, use 529 00:29:47,160 --> 00:29:50,680 Speaker 1: them for analysis. Informed the US President based on your 530 00:29:51,280 --> 00:29:55,720 Speaker 1: understanding of these energy crisis Are we now in a 531 00:29:55,760 --> 00:30:00,720 Speaker 1: fundamentally different place given that we have an alternative, at 532 00:30:00,840 --> 00:30:03,480 Speaker 1: least for some part of the world, in a China 533 00:30:03,560 --> 00:30:06,880 Speaker 1: providing clean energy very cheaply. 534 00:30:07,600 --> 00:30:12,280 Speaker 2: I think to an extent, meaning that Chinese electric vehicles 535 00:30:12,320 --> 00:30:14,760 Speaker 2: are quite high quality, they're quite cheap, and as you said, 536 00:30:14,760 --> 00:30:18,680 Speaker 2: many countries are happy to buy them, although some of them, 537 00:30:18,720 --> 00:30:21,360 Speaker 2: like Brazil, would like the manufacturing to be done domestically, 538 00:30:21,560 --> 00:30:23,479 Speaker 2: even by the Chinese firms, in order to get the 539 00:30:23,760 --> 00:30:26,600 Speaker 2: jobs associated with that that come and they don't displace 540 00:30:26,640 --> 00:30:31,400 Speaker 2: domestic manufacturing. It is still really hard to displace oil 541 00:30:31,400 --> 00:30:33,160 Speaker 2: in the global economy, and we're seeing that all the 542 00:30:33,160 --> 00:30:35,240 Speaker 2: calls for peak oil and the idea that we were 543 00:30:35,760 --> 00:30:37,800 Speaker 2: moving to a post oil world and all those calls 544 00:30:37,800 --> 00:30:40,720 Speaker 2: for peak oil demand are being pushed back, notwithstanding the 545 00:30:40,760 --> 00:30:43,560 Speaker 2: advances that you just described, which are true in the 546 00:30:43,600 --> 00:30:47,320 Speaker 2: pace of deployment of electric vehicles. The majority of oil 547 00:30:47,440 --> 00:30:49,479 Speaker 2: use is not cars. It is for things that are 548 00:30:49,520 --> 00:30:53,200 Speaker 2: harder to find alternatives for in heavy trucks and airplanes 549 00:30:53,240 --> 00:30:58,360 Speaker 2: and industry and ships and other uses. But there's some 550 00:30:58,720 --> 00:31:03,400 Speaker 2: degree to which, in response to higher oil prices, you're 551 00:31:03,440 --> 00:31:05,800 Speaker 2: going to see on the margin, countries and consumers and 552 00:31:05,840 --> 00:31:09,160 Speaker 2: businesses make different choices. And you know, we've always seen, 553 00:31:09,160 --> 00:31:12,480 Speaker 2: as OPEC has managed the global oil market for decades, 554 00:31:12,960 --> 00:31:15,400 Speaker 2: this sort of not too high goldilocks, not too high, 555 00:31:15,400 --> 00:31:18,680 Speaker 2: not too low scenario. Obviously, OPEC countries want to capture 556 00:31:18,680 --> 00:31:21,600 Speaker 2: as much revenue as they can, but recognize that if 557 00:31:21,640 --> 00:31:24,000 Speaker 2: you let oil prices serge too much, it's going to 558 00:31:24,000 --> 00:31:26,280 Speaker 2: incentivize people to find alternatives. And that's what happened in 559 00:31:26,280 --> 00:31:28,880 Speaker 2: the nineteen seventies when we had an oil crisis. In 560 00:31:28,920 --> 00:31:31,280 Speaker 2: response to that, we not only tried to look for 561 00:31:31,320 --> 00:31:34,480 Speaker 2: alternative sources of production in the North Sea the Trans 562 00:31:34,520 --> 00:31:38,000 Speaker 2: Alaska pipeline, but we pushed oil out of the power sector, 563 00:31:38,040 --> 00:31:40,880 Speaker 2: which before the Arab oil embargo, twenty percent of American 564 00:31:40,920 --> 00:31:43,320 Speaker 2: electricity came from oil, and we found all that was 565 00:31:43,320 --> 00:31:45,560 Speaker 2: a pretty low hanging fruit to find alternatives to that, 566 00:31:46,040 --> 00:31:49,560 Speaker 2: and for even an environmentally minded present like Carter, that 567 00:31:49,640 --> 00:31:51,880 Speaker 2: was coal was part of the way we did that 568 00:31:51,920 --> 00:31:56,320 Speaker 2: for energy security reasons, fuel economy standards, other things, to 569 00:31:56,520 --> 00:31:59,400 Speaker 2: find the low hanging fruit of efficiency. And now you 570 00:31:59,440 --> 00:32:03,360 Speaker 2: have that extra potential to do that because evs are 571 00:32:03,440 --> 00:32:08,840 Speaker 2: much more available and cheaper than they were before. So 572 00:32:08,920 --> 00:32:11,160 Speaker 2: I think if we see this oil crisis go on, 573 00:32:11,240 --> 00:32:13,360 Speaker 2: if it really becomes a crisis with prices in the 574 00:32:13,400 --> 00:32:15,880 Speaker 2: triple digits, you'll see a surge and demand for that. 575 00:32:16,360 --> 00:32:19,920 Speaker 1: I want to end on trying to understand the American 576 00:32:20,000 --> 00:32:23,840 Speaker 1: perspective on this war from two perspectives. First, we are 577 00:32:23,840 --> 00:32:27,440 Speaker 1: going into the midterms in the US later this year. 578 00:32:28,800 --> 00:32:32,280 Speaker 1: We know that President Trump's approval ratings are pretty low 579 00:32:32,400 --> 00:32:37,520 Speaker 1: right now, and there is all this concern that a 580 00:32:37,560 --> 00:32:41,240 Speaker 1: president who had said he'll not start any wars, and 581 00:32:41,360 --> 00:32:44,520 Speaker 1: wars are not popular in the US across the aisle 582 00:32:44,640 --> 00:32:47,600 Speaker 1: right now has started a war and that would have 583 00:32:47,680 --> 00:32:51,720 Speaker 1: an impact on the outcome for Republicans going into the midterms. 584 00:32:51,840 --> 00:32:55,240 Speaker 1: How do you see that playing out in the politics 585 00:32:55,240 --> 00:32:55,600 Speaker 1: this year. 586 00:32:55,960 --> 00:32:59,600 Speaker 2: Well, the polling numbers for President Trump are not great, 587 00:33:00,320 --> 00:33:04,560 Speaker 2: much higher disapproval than approval. The political expectation, and this 588 00:33:04,680 --> 00:33:06,840 Speaker 2: is not sort of my area of expertise, is that 589 00:33:06,920 --> 00:33:10,160 Speaker 2: the Democrats would regain the House and maybe even the Senate. 590 00:33:10,280 --> 00:33:14,400 Speaker 2: Now and one of the political issues that's quite salient 591 00:33:14,600 --> 00:33:16,800 Speaker 2: and we saw actually play a pretty big role in 592 00:33:16,840 --> 00:33:19,440 Speaker 2: recent elections in places like Virginia and New Jersey was 593 00:33:19,480 --> 00:33:22,640 Speaker 2: high energy prices, particularly power prices. You know, high energy 594 00:33:22,640 --> 00:33:24,640 Speaker 2: prices for a long time and for people who study 595 00:33:24,920 --> 00:33:29,560 Speaker 2: energy geopolitics, energy prices has always been about oil, gasoline, 596 00:33:29,600 --> 00:33:32,560 Speaker 2: maybe natural gas, but power prices are a big focus. 597 00:33:32,640 --> 00:33:37,920 Speaker 2: Now we've kind of taken relatively cheap gasoline for granted 598 00:33:37,920 --> 00:33:40,600 Speaker 2: for a while. President Trump has said he wants to 599 00:33:40,600 --> 00:33:44,040 Speaker 2: see energy prices even lower and wants to make energy 600 00:33:44,120 --> 00:33:46,720 Speaker 2: cheap for lots of Americans, even though that doesn't necessarily 601 00:33:46,760 --> 00:33:50,480 Speaker 2: help US producers or allow for continued growth in US 602 00:33:50,560 --> 00:33:51,280 Speaker 2: oil production. 603 00:33:52,160 --> 00:33:56,479 Speaker 1: But this war has now put gasoline prices at above 604 00:33:56,560 --> 00:33:57,280 Speaker 1: three dollars. 605 00:33:57,360 --> 00:33:58,880 Speaker 2: Well, that was my point that you know, we're going 606 00:33:58,920 --> 00:34:01,840 Speaker 2: to see gasoline prices go up twenty thirty cents over 607 00:34:01,920 --> 00:34:04,800 Speaker 2: three dollars, diesel up to four dollars. And that's even 608 00:34:04,960 --> 00:34:07,160 Speaker 2: not assuming yet that we're going to see triple digit 609 00:34:07,280 --> 00:34:10,520 Speaker 2: surge and oil prices. That's going to become a political issue. 610 00:34:10,560 --> 00:34:13,840 Speaker 2: And you know, I suspect it may be hard for 611 00:34:14,320 --> 00:34:18,759 Speaker 2: the administration to explain to Americans why not just US 612 00:34:18,840 --> 00:34:22,440 Speaker 2: troops may be dying, but they're paying higher energy prices 613 00:34:22,480 --> 00:34:26,319 Speaker 2: for this conflict in Iran, an attack on Iran. With that, 614 00:34:26,760 --> 00:34:30,640 Speaker 2: as we started the conversation with a real appreciation for 615 00:34:30,960 --> 00:34:33,680 Speaker 2: why we're doing this and what the endgame is. And 616 00:34:33,719 --> 00:34:36,279 Speaker 2: so I think that high energy prices would just become 617 00:34:36,400 --> 00:34:39,920 Speaker 2: even more of a political issue. We should note, by 618 00:34:39,920 --> 00:34:41,680 Speaker 2: the way, that one of the consequences of this, I 619 00:34:41,680 --> 00:34:45,120 Speaker 2: suspect as prices surge above eighty dollars a barrel would 620 00:34:45,160 --> 00:34:49,640 Speaker 2: be US producers hedging and locking in those higher prices, 621 00:34:49,800 --> 00:34:53,440 Speaker 2: because over the last decade and when I was in 622 00:34:53,480 --> 00:34:55,600 Speaker 2: the Obama administration and we were thinking about how to 623 00:34:55,640 --> 00:34:58,200 Speaker 2: take Irani and oil off the market as a way 624 00:34:58,200 --> 00:35:00,839 Speaker 2: to impose sanctions in economic pressure, one of the things 625 00:35:00,880 --> 00:35:03,000 Speaker 2: that made that either was the fact that US production 626 00:35:03,120 --> 00:35:05,200 Speaker 2: was growing a million or million and a half barrels 627 00:35:05,200 --> 00:35:08,279 Speaker 2: per day every single year in the shale revolution. Those 628 00:35:08,360 --> 00:35:10,800 Speaker 2: days are over. Now shale is projected to be roughly 629 00:35:10,840 --> 00:35:13,759 Speaker 2: flat this year. At these higher prices, it could grow 630 00:35:13,800 --> 00:35:15,640 Speaker 2: a bit, not a million and a half barrels per day, 631 00:35:15,640 --> 00:35:19,200 Speaker 2: I don't think, But you know, it's a different fundamental calculation. 632 00:35:19,280 --> 00:35:22,800 Speaker 2: The politics are still true where voters don't like to 633 00:35:22,800 --> 00:35:26,319 Speaker 2: see high gasoline prices and it affects polling. But the 634 00:35:26,400 --> 00:35:29,360 Speaker 2: US is a net exporter, and so the effect of 635 00:35:29,440 --> 00:35:32,640 Speaker 2: higher oil prices on the macroeconomy are not nearly as 636 00:35:32,640 --> 00:35:35,719 Speaker 2: bad as they used to be. When some analysts argue 637 00:35:35,719 --> 00:35:39,080 Speaker 2: they're even positive. It's a transfer from consumers to producers, 638 00:35:39,480 --> 00:35:42,360 Speaker 2: and so it's a somewhat different calculation now, which I 639 00:35:42,400 --> 00:35:44,040 Speaker 2: don't think in the US we fully wrapped our heads 640 00:35:44,080 --> 00:35:46,560 Speaker 2: around that we're a massive petro state and a large exporter. 641 00:35:46,680 --> 00:35:49,000 Speaker 2: So higher oil prices hurt a lot of people, but 642 00:35:49,040 --> 00:35:51,960 Speaker 2: they help some people in the overall economy too sometimes. 643 00:35:52,440 --> 00:35:55,200 Speaker 1: So to end the conversation, we are on day four 644 00:35:55,480 --> 00:35:58,080 Speaker 1: of the war with Iran. We don't know how long 645 00:35:58,120 --> 00:36:01,840 Speaker 1: this lasts. The present and says it could be four weeks, 646 00:36:01,880 --> 00:36:06,000 Speaker 1: five weeks, but as long as it's necessary. We know 647 00:36:06,160 --> 00:36:10,000 Speaker 1: that going into the war, energy and the prices of 648 00:36:10,200 --> 00:36:14,320 Speaker 1: energy played a role. Energy prices well lower. The US 649 00:36:14,400 --> 00:36:17,080 Speaker 1: had become the world's largest producer of oil and gas 650 00:36:17,160 --> 00:36:20,640 Speaker 1: was a net exporter. We have seen in the price 651 00:36:20,719 --> 00:36:24,399 Speaker 1: impact that that decision sort of made sense. Given oil 652 00:36:24,440 --> 00:36:27,919 Speaker 1: prices haven't gone into the one hundred dollars region, gas 653 00:36:27,960 --> 00:36:31,319 Speaker 1: prices haven't reached in Europe three hundred dollars or more 654 00:36:31,840 --> 00:36:36,000 Speaker 1: mega what are it's about fifty sixty right now. How 655 00:36:36,040 --> 00:36:38,920 Speaker 1: does the endgame play out? And how much does energy 656 00:36:39,440 --> 00:36:42,439 Speaker 1: play a role in deciding the endgame of this war? 657 00:36:42,920 --> 00:36:44,800 Speaker 2: I think energy is a huge factor. I mean first, 658 00:36:44,880 --> 00:36:48,319 Speaker 2: energy is a massive tool that both sides have to 659 00:36:48,400 --> 00:36:52,359 Speaker 2: impose economic and military and political pressure if they want to. 660 00:36:52,400 --> 00:36:55,920 Speaker 2: Now again, they've been somewhat restrained in doing that potentially, 661 00:36:56,640 --> 00:37:00,319 Speaker 2: I suspect because it's sort of a mutually assured destruction game, right. 662 00:37:00,360 --> 00:37:03,360 Speaker 2: Iran has not yet really tried to take out in 663 00:37:03,400 --> 00:37:07,719 Speaker 2: a massive way for the long term ros lafon rost Noor. 664 00:37:07,800 --> 00:37:10,040 Speaker 2: There's been some reports of damage, but to go after 665 00:37:10,080 --> 00:37:14,760 Speaker 2: infrastructure or to really target tankers in the strait of hormones, 666 00:37:14,760 --> 00:37:16,399 Speaker 2: because as soon as you do that, the first thing 667 00:37:16,440 --> 00:37:18,640 Speaker 2: that I suspect people would do in retaliation is take 668 00:37:18,640 --> 00:37:21,960 Speaker 2: out carg Island, which is Iran's production capability, and the 669 00:37:22,000 --> 00:37:26,600 Speaker 2: Irunnan government needs that oil revenue to survive and vice versa. 670 00:37:26,640 --> 00:37:29,239 Speaker 2: I think if the US has not yet targeted, Iran 671 00:37:29,320 --> 00:37:31,319 Speaker 2: is still producing, although it can't necessarily put it on 672 00:37:31,360 --> 00:37:33,520 Speaker 2: tankers and access the global market because of the strait. 673 00:37:33,840 --> 00:37:36,000 Speaker 2: It's still producing as far as we know what it 674 00:37:36,040 --> 00:37:38,359 Speaker 2: was before the conflict started. We haven't taken out its 675 00:37:38,440 --> 00:37:43,480 Speaker 2: production capability yet. So energy is a tool of escalation 676 00:37:44,280 --> 00:37:47,359 Speaker 2: that is sitting there waiting for either side. To use, 677 00:37:47,800 --> 00:37:50,120 Speaker 2: and as soon as they do, the other likely retaliates 678 00:37:50,120 --> 00:37:53,200 Speaker 2: and does it as well. I think at the same time, 679 00:37:53,360 --> 00:37:56,239 Speaker 2: energy is probably has the potential to be a tool 680 00:37:56,280 --> 00:37:59,879 Speaker 2: of de escalation, because I'm not sure what the willingness 681 00:38:00,440 --> 00:38:04,400 Speaker 2: of people is and certainly the US public is to 682 00:38:04,480 --> 00:38:07,319 Speaker 2: cope with a real energy crisis, which Europe is well 683 00:38:07,360 --> 00:38:09,800 Speaker 2: familiar with from what happened four years ago with Russia's 684 00:38:09,800 --> 00:38:12,319 Speaker 2: invasion of Ukraine. You know, we haven't seen that in 685 00:38:12,320 --> 00:38:15,560 Speaker 2: the United States. We've seen low energy prices even throughout 686 00:38:15,560 --> 00:38:19,439 Speaker 2: that crisis because we're pretty insulated from the global market. 687 00:38:19,480 --> 00:38:22,560 Speaker 2: Obviously oil is priced in a global market. I think 688 00:38:22,560 --> 00:38:26,320 Speaker 2: if we see a real surge in energy prices because 689 00:38:26,480 --> 00:38:30,799 Speaker 2: these installations, key energy installations are attacked, or because the 690 00:38:31,280 --> 00:38:33,399 Speaker 2: strait of our moves remains closed for an extended period 691 00:38:33,440 --> 00:38:35,800 Speaker 2: of time, it's going to put a lot of political 692 00:38:35,800 --> 00:38:38,680 Speaker 2: pressure on leaders to try to bring this conflict to 693 00:38:38,760 --> 00:38:42,279 Speaker 2: an end more quickly. Thank you, Jason, Thanks Accha, thanks 694 00:38:42,320 --> 00:38:47,960 Speaker 2: for having me, and thank you for listening to zero 695 00:38:48,320 --> 00:38:49,600 Speaker 2: Now for the Sound of the Week. 696 00:38:50,239 --> 00:38:53,760 Speaker 1: Isn't this disgusting? Why doesn't anybody contact the president? 697 00:38:53,800 --> 00:38:55,279 Speaker 2: Why is he letting this happen to Us. 698 00:38:56,440 --> 00:38:58,920 Speaker 1: That is a driver complaining about the long lines at 699 00:38:58,920 --> 00:39:02,640 Speaker 1: a US gas station during the nineteen seventy nine oil crisis. 700 00:39:03,760 --> 00:39:05,719 Speaker 1: If you liked this episode, please take a moment to 701 00:39:05,800 --> 00:39:08,880 Speaker 1: rate and review the show on Apple Podcasts, YouTube, and Spotify. 702 00:39:09,239 --> 00:39:11,839 Speaker 1: This episode was produced by Oscar Boyd with help from 703 00:39:11,880 --> 00:39:15,600 Speaker 1: Eleanor Harrison Dengate. Our theme music is composed by Wonderly 704 00:39:15,880 --> 00:39:19,759 Speaker 1: Special Thanks to Samersadi, Laura Milan, and Sharon Chen. I'm 705 00:39:19,760 --> 00:39:21,480 Speaker 1: Makshadrati back soon.