Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. Well, I'm here, it's Friday, so
Speaker 1: it has to be about energy. It has to be
Speaker 1: about green energy and oil. And I'm subjecting Jason to
Speaker 1: this because I think it's a really important issue that's
Speaker 1: playing out in the election in the US. It's also
Speaker 1: playing out in a big, big way in Europe as well.
Speaker 1: So we want to bring in a special expert. He's
Speaker 1: been in this industry for decades. He knows everything about
Speaker 1: anything when it comes to energy. That's Dan your again.
Speaker 1: He's vice chairman of I H S Market. Um. Dan,
Speaker 1: you have a new book out called The New Map, Energy,
Speaker 1: Climate and the Clash of Nations. It's always good to
Speaker 1: talk to you, by the way, and I wondered if
Speaker 1: you could just let me know how why did you
Speaker 1: write the book? Like what was your impetus? What were
Speaker 1: you thinking? Um, you talked to C. E. O. S.
Speaker 1: You give presentations, you're all involved with the opaque, Like
Speaker 1: why did you write it? Alex? What The basic reason
Speaker 1: is that the world had really changed dramatically from even
Speaker 1: to decade ago, whether it's in terms of the US
Speaker 1: be the world's largest oil producer, whether it's a Paris agreement,
Speaker 1: whether it's a disruption and West Chinese relations, and we
Speaker 1: needed and I saw, this is a new terrain, a
Speaker 1: rough terrain, and we needed a map through it. And
Speaker 1: that's why I set out to write the map and
Speaker 1: try and make sense of where it's all going. A
Speaker 1: new map, Dan, And it's really nice to connect with you,
Speaker 1: so delighted you're here with us. Is it is hard
Speaker 1: to to create it in many ways, I think any
Speaker 1: cartographer which would tell you that, and certainly I mean
Speaker 1: this is three dimensional in many ways. So how do
Speaker 1: you even set about doing this? Well? I did it.
Speaker 1: I organized it well. First of all, I wanted to
Speaker 1: make it a narrative. I wanted to make it very
Speaker 1: accessible to people, and I wanted to have good stories
Speaker 1: in it. At the same time, I really wanted to
Speaker 1: be a framework, and so I organized it around America's
Speaker 1: map that changes China and Russias the Middle East, and
Speaker 1: then what I called road map to the future and
Speaker 1: climate map, and so those are the maps within. And
Speaker 1: of course the term maps by this point is is
Speaker 1: a metaphor for the changes and how the world is changing.
Speaker 1: And things that just people wouldn't have expected and where
Speaker 1: they might be going. And Dan um I was in
Speaker 1: touch with you while you're writing the book, and of
Speaker 1: course you're almost done and then all of a sudden
Speaker 1: COVID happened, and then you have to go back and
Speaker 1: sort of a tweak everything to incorporate that as well.
Speaker 1: And I'm wondering how we talk a lot about how
Speaker 1: the COVID pandemic reflects on what climate change in terms
Speaker 1: of putting more stress on the poor, showing the vulnerabilities
Speaker 1: of governments and lack of healthcare, et cetera. What did
Speaker 1: you learn in your research that showed you how these
Speaker 1: countries handle COVID and then how they can handle climate change. Well,
Speaker 1: I think that um I did go obviously went back
Speaker 1: and integrated because this is you know, it's it's more
Speaker 1: than a huge story. It's a cataclysm. Really, what's happened
Speaker 1: one chapter I called the Plague to describe, you know,
Speaker 1: that takes us up to actually mid July when they
Speaker 1: finally took the book away from me. But I think
Speaker 1: I'll tell you one thing that really hits me. One
Speaker 1: of the themes of the book is how the US
Speaker 1: and China are are pulling apart and is going from
Speaker 1: being you know, uh, interdependent to what's now the term
Speaker 1: people use strategic rivals. And you saw it in terms
Speaker 1: of COVID and you know, in terms of climate, but
Speaker 1: in terms of COVID, this was one occasion when you
Speaker 1: really needed international collaboration and working together, and instead we've
Speaker 1: got acrimony and lack of flow of information and people
Speaker 1: all over the world have paid a cost for that.
Speaker 1: And that's such a good point because it's very similar
Speaker 1: with climate in in a President Trump presidency. I mean,
Speaker 1: China has agreed to some kind of emission standards and
Speaker 1: that neutrality by sixty it's still really vague, but the
Speaker 1: country is committed to it in a way that the U.
Speaker 1: S has not. What does that mean for Saudi Arabia?
Speaker 1: What does that mean for Russia? What does it mean
Speaker 1: for the frackers in the US? Well, I think it
Speaker 1: means obviously China. As you say, it's it's vague. China
Speaker 1: has had the world's solar and half the world's win
Speaker 1: but it's still adding three coal fired plants a month,
Speaker 1: So in six is pretty far away. But I think
Speaker 1: for but you know, even while there's great divergence. And
Speaker 1: we heard it at the end of the debate the
Speaker 1: other night, of that incredible debate. I guess it was
Speaker 1: a debate. Uh. But in fact, the change is happening
Speaker 1: in any way. You know, you look at the electric
Speaker 1: power industry in the United States, it's moving towards being uh,
Speaker 1: lower carbon and you know across it and more wind
Speaker 1: and solar, greater efficiency and so forth, natural gas replacing coal,
Speaker 1: which has been the biggest contribution to reducing our emissions.
Speaker 1: So that's happening for Russian Saudi Arabia. Uh. You know,
Speaker 1: putin just this last week said, you know, it's great,
Speaker 1: oil is only thirty of our budget. Now, well that
Speaker 1: the reasons is they're selling less oil and the prices down.
Speaker 1: But nevertheless, Russia has had problems for twenty years of
Speaker 1: trying to to to reform its economy to make it
Speaker 1: more diversified, and it's just, you know, really not done it.
Speaker 1: And Saudi Arabia has a policy of saying, well, we
Speaker 1: really got to diversify, not only because of what's happening
Speaker 1: with climate and Paris and so forth, but because population
Speaker 1: is under the age of thirty and they need going
Speaker 1: to need jobs, and but they find out it is
Speaker 1: hard to diversify an economy that is so heavily dependent
Speaker 1: upon oil even before COVID, and one of the things
Speaker 1: you discover is you need oil revenues in order to
Speaker 1: diversify away from oil. So I think I think both
Speaker 1: of those countries, uh, you know, it's both what's happening
Speaker 1: on climate in Paris and it's also this weak oil
Speaker 1: market that is a result of the persistence of the
Speaker 1: of the virus. And Dan, what do you make of
Speaker 1: that job's question? Because I feel like we hear so
Speaker 1: much from those who talk about sort of a new
Speaker 1: green economy and a green new deal and all those
Speaker 1: sorts of things, that there is the potential to unlock
Speaker 1: this whole new economy and ecosystem, especially when it comes
Speaker 1: to jobs, if there is more investment, uh in alternative energy.
Speaker 1: What have you discovered is as you've thought about that, well,
Speaker 1: the question is who's going to make the investment. It's happening,
Speaker 1: I mean wind and solar. You know, there's a solar revolution,
Speaker 1: there's a shale revolution, there's a solar revolution. Costs of
Speaker 1: solar have come down tremendously in considerable part because of
Speaker 1: Chinese manufacturing scale. But those costs have come down, wind
Speaker 1: has come down, uh, and there are obviously jobs they're
Speaker 1: they're also over. Before COVID, there were over twelve million
Speaker 1: jobs in the oil and gas industry, So there's a
Speaker 1: kind of balancing between the two of them. I think
Speaker 1: the challenge about we hear about, you know, green stimulus.
Speaker 1: Joe Biden has a you know, two trillion dollar climate plan.
Speaker 1: I think there is but listening just to you know,
Speaker 1: just before I came onto the condition of the economy
Speaker 1: and uh, the need for recovery and particularly small business,
Speaker 1: uh and just the economic wounds, I think that's going
Speaker 1: to take a lot of government focus for the next
Speaker 1: couple of years. So there's clearly going to be a
Speaker 1: step up. If Joe Biden's president, will be more money
Speaker 1: going into renewables, there will be more money supporting electric
Speaker 1: car sales and charging two things and things. But I
Speaker 1: think also we're still going to need a kind of
Speaker 1: really really heal the wounds of this protractive of a
Speaker 1: crisis from the COVID. Dan, I am going to ask you,
Speaker 1: I'd feel like we'd be um, we'd be silly if
Speaker 1: we didn't ask you, you know, the energy markets they
Speaker 1: reacted obviously to news from from the president today. A
Speaker 1: reminder that politics and energy and global markets they're all intertwined, right,
Speaker 1: they become more intertwined than ever. In the oil market
Speaker 1: is a register of what's happening in the economy, of course,
Speaker 1: but also politics and uh this question of what happens
Speaker 1: with the virus and the resurgence of the virus is
Speaker 1: weighing heavily on on the oil market because it means
Speaker 1: things shut down, less demand, So all those things are
Speaker 1: bound up in the price of oil right now. By
Speaker 1: the way, just one thing interesting to mention. You know,
Speaker 1: a long time ago, President Wilson, when he was at
Speaker 1: the Versailles Treaty negotiating the treaty after World War One,
Speaker 1: every you know, they said he had a stroke. It
Speaker 1: turns out that he actually had the Spanish flu. So
Speaker 1: we've had another president who had once been in capacity.
Speaker 1: Well we don't know that this president hadcapacitated, but it
Speaker 1: really affected the I think the outcome of the First
Speaker 1: World War because Wilson was kind of out of commission.
Speaker 1: Oh that's really interesting. I didn't know that. Um. It
Speaker 1: also is interesting in terms of the balance of power
Speaker 1: that shifts, um, if you relate kind of the demand
Speaker 1: for COVID for who's in power control. And something that
Speaker 1: President Trump has done has been a huge champion of
Speaker 1: energy and dependence here in the US. UM in some
Speaker 1: ways very much helped broker the deal that OPEC plus
Speaker 1: wound up doing, kind of taking Sadie's to the table
Speaker 1: and say, look, guys, you gotta cut production. You've gotta
Speaker 1: get this done. Um. How does that geopolitical dynamic shift
Speaker 1: when we start talking about things like solar and wind
Speaker 1: instead of well, you know, the big winner, Uh, Actually,
Speaker 1: in some ways is China, because China h first of all,
Speaker 1: unlike the United States, which is now essentially self sufficient,
Speaker 1: China imports its oil and they regard that as a
Speaker 1: really big problem. So if there's a big shift, they
Speaker 1: report less oil. The other thing is that they're very
Speaker 1: well positioned in the supply chains for what they call
Speaker 1: new energies. Sevent of solar panels come from China to
Speaker 1: the entire world. Uh, the lithium ion battery supply chain
Speaker 1: rare Earth. And this is where where as we were
Speaker 1: saying things come together, this is where geopolitics and energy
Speaker 1: transition come together because the question of the supply chains
Speaker 1: and the scale of the new materials that will be
Speaker 1: needed will kind of focus on a different, different view
Speaker 1: of dependence, not about oil, but about the elements of
Speaker 1: of for a renewable, more renewable energy economy. Absolutely, So
Speaker 1: what's the next big sort of leg of this new energy?
Speaker 1: Where's the uncharted territory as it were, So they sort
Speaker 1: of use the metaphor of your book, what should we
Speaker 1: be looking at next? Well, I think on the technology side,
Speaker 1: it's you know, will there be breakthroughs, big breakthroughs on
Speaker 1: big batteries, Will there be breakthroughs on on carbon capture?
Speaker 1: Will there be breakthroughs on hydrogen? So that's on on
Speaker 1: that side. I think actually where the U. S. China
Speaker 1: relationship goes will be very important for the future of energy.
Speaker 1: So those are a couple of things that I would watch.
Speaker 1: And then what kind of recover economic recovery do we
Speaker 1: actually have coming out of this COVID crisis which is
Speaker 1: now clearly more extended, uh than you know, people would
Speaker 1: have thought when they left their offices on March fifteen
Speaker 1: and thought they'd be back in a week, right, right, Absolutely,
Speaker 1: now remember those days. Yeah, the world it is fundamentally changed.
Speaker 1: That is. If I can tell you one other thing,
Speaker 1: digital digitalization, seven years of digitalization has been compressed into
Speaker 1: seven months. The nature of work will change and is
Speaker 1: insofar as work becomes remote and at home. One thing
Speaker 1: I think we all notice is the boundaries between work life,
Speaker 1: work balance. That those boundaries get a lot less clear
Speaker 1: when you're in a digital world. Absolutely, that is true.
Speaker 1: Dan Jurgen, you're such a gentleman. Thank you for spending
Speaker 1: some time with us this afternoon on a very very
Speaker 1: busy day we know. Congratulations on your book. It's called
Speaker 1: The New Map Energy, Climate and the Clash of Nations.