WEBVTT - Yergin on New Book 0:00:00.160 --> 0:00:03.760 This is Bloomberg Business Week with Carol Masser and Jason 0:00:03.840 --> 0:00:08.000 Kelly on Bloomberg Radio. Well, I'm here, it's Friday, so 0:00:08.039 --> 0:00:09.760 it has to be about energy. It has to be 0:00:09.760 --> 0:00:12.480 about green energy and oil. And I'm subjecting Jason to 0:00:12.520 --> 0:00:14.520 this because I think it's a really important issue that's 0:00:14.520 --> 0:00:16.319 playing out in the election in the US. It's also 0:00:16.320 --> 0:00:18.799 playing out in a big, big way in Europe as well. 0:00:18.880 --> 0:00:20.880 So we want to bring in a special expert. He's 0:00:20.920 --> 0:00:23.560 been in this industry for decades. He knows everything about 0:00:23.600 --> 0:00:25.640 anything when it comes to energy. That's Dan your again. 0:00:25.680 --> 0:00:29.560 He's vice chairman of I H S Market. Um. Dan, 0:00:29.640 --> 0:00:32.920 you have a new book out called The New Map, Energy, 0:00:33.000 --> 0:00:35.159 Climate and the Clash of Nations. It's always good to 0:00:35.200 --> 0:00:36.879 talk to you, by the way, and I wondered if 0:00:36.880 --> 0:00:38.560 you could just let me know how why did you 0:00:38.600 --> 0:00:40.239 write the book? Like what was your impetus? What were 0:00:40.280 --> 0:00:42.880 you thinking? Um, you talked to C. E. O. S. 0:00:42.960 --> 0:00:45.960 You give presentations, you're all involved with the opaque, Like 0:00:46.360 --> 0:00:49.720 why did you write it? Alex? What The basic reason 0:00:49.800 --> 0:00:52.120 is that the world had really changed dramatically from even 0:00:52.159 --> 0:00:54.760 to decade ago, whether it's in terms of the US 0:00:54.840 --> 0:00:58.240 be the world's largest oil producer, whether it's a Paris agreement, 0:00:58.600 --> 0:01:01.840 whether it's a disruption and West Chinese relations, and we 0:01:01.920 --> 0:01:04.720 needed and I saw, this is a new terrain, a 0:01:04.840 --> 0:01:07.120 rough terrain, and we needed a map through it. And 0:01:07.200 --> 0:01:08.760 that's why I set out to write the map and 0:01:08.959 --> 0:01:12.000 try and make sense of where it's all going. A 0:01:12.080 --> 0:01:14.680 new map, Dan, And it's really nice to connect with you, 0:01:14.800 --> 0:01:17.880 so delighted you're here with us. Is it is hard 0:01:17.920 --> 0:01:20.559 to to create it in many ways, I think any 0:01:20.600 --> 0:01:24.120 cartographer which would tell you that, and certainly I mean 0:01:24.160 --> 0:01:27.120 this is three dimensional in many ways. So how do 0:01:27.200 --> 0:01:30.120 you even set about doing this? Well? I did it. 0:01:30.160 --> 0:01:32.000 I organized it well. First of all, I wanted to 0:01:32.040 --> 0:01:33.720 make it a narrative. I wanted to make it very 0:01:33.760 --> 0:01:36.200 accessible to people, and I wanted to have good stories 0:01:36.200 --> 0:01:38.319 in it. At the same time, I really wanted to 0:01:38.360 --> 0:01:41.440 be a framework, and so I organized it around America's 0:01:41.480 --> 0:01:44.319 map that changes China and Russias the Middle East, and 0:01:44.319 --> 0:01:46.120 then what I called road map to the future and 0:01:46.200 --> 0:01:49.840 climate map, and so those are the maps within. And 0:01:49.880 --> 0:01:52.280 of course the term maps by this point is is 0:01:52.280 --> 0:01:55.840 a metaphor for the changes and how the world is changing. 0:01:56.320 --> 0:01:59.160 And things that just people wouldn't have expected and where 0:01:59.200 --> 0:02:02.080 they might be going. And Dan um I was in 0:02:02.160 --> 0:02:04.120 touch with you while you're writing the book, and of 0:02:04.160 --> 0:02:06.880 course you're almost done and then all of a sudden 0:02:06.880 --> 0:02:09.160 COVID happened, and then you have to go back and 0:02:09.240 --> 0:02:12.359 sort of a tweak everything to incorporate that as well. 0:02:12.600 --> 0:02:14.600 And I'm wondering how we talk a lot about how 0:02:14.600 --> 0:02:18.000 the COVID pandemic reflects on what climate change in terms 0:02:18.080 --> 0:02:21.639 of putting more stress on the poor, showing the vulnerabilities 0:02:22.320 --> 0:02:25.520 of governments and lack of healthcare, et cetera. What did 0:02:25.560 --> 0:02:28.880 you learn in your research that showed you how these 0:02:28.919 --> 0:02:33.640 countries handle COVID and then how they can handle climate change. Well, 0:02:33.680 --> 0:02:36.560 I think that um I did go obviously went back 0:02:36.600 --> 0:02:39.200 and integrated because this is you know, it's it's more 0:02:39.200 --> 0:02:42.440 than a huge story. It's a cataclysm. Really, what's happened 0:02:42.720 --> 0:02:45.040 one chapter I called the Plague to describe, you know, 0:02:45.280 --> 0:02:47.560 that takes us up to actually mid July when they 0:02:47.600 --> 0:02:50.840 finally took the book away from me. But I think 0:02:50.919 --> 0:02:52.840 I'll tell you one thing that really hits me. One 0:02:52.880 --> 0:02:56.240 of the themes of the book is how the US 0:02:56.320 --> 0:02:59.760 and China are are pulling apart and is going from 0:02:59.800 --> 0:03:04.639 being you know, uh, interdependent to what's now the term 0:03:04.680 --> 0:03:07.359 people use strategic rivals. And you saw it in terms 0:03:07.400 --> 0:03:09.800 of COVID and you know, in terms of climate, but 0:03:09.840 --> 0:03:12.480 in terms of COVID, this was one occasion when you 0:03:12.560 --> 0:03:16.320 really needed international collaboration and working together, and instead we've 0:03:16.320 --> 0:03:20.640 got acrimony and lack of flow of information and people 0:03:20.680 --> 0:03:22.399 all over the world have paid a cost for that. 0:03:22.919 --> 0:03:25.000 And that's such a good point because it's very similar 0:03:25.040 --> 0:03:28.639 with climate in in a President Trump presidency. I mean, 0:03:28.720 --> 0:03:31.959 China has agreed to some kind of emission standards and 0:03:31.960 --> 0:03:35.120 that neutrality by sixty it's still really vague, but the 0:03:35.160 --> 0:03:36.920 country is committed to it in a way that the U. 0:03:37.080 --> 0:03:39.960 S has not. What does that mean for Saudi Arabia? 0:03:40.080 --> 0:03:42.600 What does that mean for Russia? What does it mean 0:03:42.680 --> 0:03:45.680 for the frackers in the US? Well, I think it 0:03:45.760 --> 0:03:48.480 means obviously China. As you say, it's it's vague. China 0:03:49.040 --> 0:03:51.280 has had the world's solar and half the world's win 0:03:51.400 --> 0:03:53.680 but it's still adding three coal fired plants a month, 0:03:53.760 --> 0:03:57.960 So in six is pretty far away. But I think 0:03:58.040 --> 0:04:01.640 for but you know, even while there's great divergence. And 0:04:01.680 --> 0:04:03.240 we heard it at the end of the debate the 0:04:03.240 --> 0:04:06.240 other night, of that incredible debate. I guess it was 0:04:06.280 --> 0:04:11.120 a debate. Uh. But in fact, the change is happening 0:04:11.160 --> 0:04:13.280 in any way. You know, you look at the electric 0:04:13.600 --> 0:04:16.920 power industry in the United States, it's moving towards being uh, 0:04:17.200 --> 0:04:20.440 lower carbon and you know across it and more wind 0:04:20.480 --> 0:04:24.920 and solar, greater efficiency and so forth, natural gas replacing coal, 0:04:25.000 --> 0:04:28.400 which has been the biggest contribution to reducing our emissions. 0:04:28.920 --> 0:04:33.159 So that's happening for Russian Saudi Arabia. Uh. You know, 0:04:33.240 --> 0:04:36.359 putin just this last week said, you know, it's great, 0:04:36.800 --> 0:04:39.040 oil is only thirty of our budget. Now, well that 0:04:39.080 --> 0:04:42.440 the reasons is they're selling less oil and the prices down. 0:04:42.839 --> 0:04:46.440 But nevertheless, Russia has had problems for twenty years of 0:04:46.440 --> 0:04:49.440 trying to to to reform its economy to make it 0:04:49.480 --> 0:04:52.880 more diversified, and it's just, you know, really not done it. 0:04:53.400 --> 0:04:57.280 And Saudi Arabia has a policy of saying, well, we 0:04:57.400 --> 0:05:00.760 really got to diversify, not only because of what's happening 0:05:00.760 --> 0:05:05.240 with climate and Paris and so forth, but because population 0:05:05.320 --> 0:05:07.159 is under the age of thirty and they need going 0:05:07.200 --> 0:05:10.080 to need jobs, and but they find out it is 0:05:10.160 --> 0:05:13.880 hard to diversify an economy that is so heavily dependent 0:05:13.960 --> 0:05:16.960 upon oil even before COVID, and one of the things 0:05:16.960 --> 0:05:19.880 you discover is you need oil revenues in order to 0:05:19.880 --> 0:05:23.520 diversify away from oil. So I think I think both 0:05:23.560 --> 0:05:26.440 of those countries, uh, you know, it's both what's happening 0:05:26.360 --> 0:05:29.119 on climate in Paris and it's also this weak oil 0:05:29.200 --> 0:05:31.520 market that is a result of the persistence of the 0:05:31.839 --> 0:05:34.560 of the virus. And Dan, what do you make of 0:05:34.600 --> 0:05:37.880 that job's question? Because I feel like we hear so 0:05:37.960 --> 0:05:41.800 much from those who talk about sort of a new 0:05:41.880 --> 0:05:45.080 green economy and a green new deal and all those 0:05:45.080 --> 0:05:48.640 sorts of things, that there is the potential to unlock 0:05:48.880 --> 0:05:52.039 this whole new economy and ecosystem, especially when it comes 0:05:52.040 --> 0:05:58.560 to jobs, if there is more investment, uh in alternative energy. 0:05:58.600 --> 0:06:01.680 What have you discovered is as you've thought about that, well, 0:06:01.800 --> 0:06:05.560 the question is who's going to make the investment. It's happening, 0:06:05.600 --> 0:06:08.719 I mean wind and solar. You know, there's a solar revolution, 0:06:08.760 --> 0:06:11.160 there's a shale revolution, there's a solar revolution. Costs of 0:06:11.240 --> 0:06:15.599 solar have come down tremendously in considerable part because of 0:06:15.680 --> 0:06:19.720 Chinese manufacturing scale. But those costs have come down, wind 0:06:19.760 --> 0:06:23.320 has come down, uh, and there are obviously jobs they're 0:06:23.400 --> 0:06:26.880 they're also over. Before COVID, there were over twelve million 0:06:26.960 --> 0:06:29.240 jobs in the oil and gas industry, So there's a 0:06:29.320 --> 0:06:32.200 kind of balancing between the two of them. I think 0:06:32.200 --> 0:06:35.280 the challenge about we hear about, you know, green stimulus. 0:06:35.800 --> 0:06:39.960 Joe Biden has a you know, two trillion dollar climate plan. 0:06:40.720 --> 0:06:42.960 I think there is but listening just to you know, 0:06:43.040 --> 0:06:45.680 just before I came onto the condition of the economy 0:06:46.240 --> 0:06:51.120 and uh, the need for recovery and particularly small business, 0:06:51.440 --> 0:06:55.240 uh and just the economic wounds, I think that's going 0:06:55.320 --> 0:06:57.760 to take a lot of government focus for the next 0:06:57.960 --> 0:06:59.600 couple of years. So there's clearly going to be a 0:06:59.640 --> 0:07:02.880 step up. If Joe Biden's president, will be more money 0:07:02.880 --> 0:07:06.480 going into renewables, there will be more money supporting electric 0:07:06.520 --> 0:07:09.520 car sales and charging two things and things. But I 0:07:09.520 --> 0:07:11.880 think also we're still going to need a kind of 0:07:12.000 --> 0:07:16.640 really really heal the wounds of this protractive of a 0:07:16.760 --> 0:07:19.400 crisis from the COVID. Dan, I am going to ask you, 0:07:19.400 --> 0:07:21.920 I'd feel like we'd be um, we'd be silly if 0:07:21.960 --> 0:07:24.400 we didn't ask you, you know, the energy markets they 0:07:24.480 --> 0:07:28.840 reacted obviously to news from from the president today. A 0:07:28.920 --> 0:07:34.400 reminder that politics and energy and global markets they're all intertwined, right, 0:07:35.040 --> 0:07:38.440 they become more intertwined than ever. In the oil market 0:07:38.680 --> 0:07:41.920 is a register of what's happening in the economy, of course, 0:07:41.960 --> 0:07:45.720 but also politics and uh this question of what happens 0:07:45.720 --> 0:07:48.720 with the virus and the resurgence of the virus is 0:07:48.760 --> 0:07:51.360 weighing heavily on on the oil market because it means 0:07:52.160 --> 0:07:55.320 things shut down, less demand, So all those things are 0:07:56.200 --> 0:07:58.280 bound up in the price of oil right now. By 0:07:58.280 --> 0:08:00.680 the way, just one thing interesting to mention. You know, 0:08:01.680 --> 0:08:04.320 a long time ago, President Wilson, when he was at 0:08:04.320 --> 0:08:08.120 the Versailles Treaty negotiating the treaty after World War One, 0:08:08.520 --> 0:08:10.640 every you know, they said he had a stroke. It 0:08:10.680 --> 0:08:13.280 turns out that he actually had the Spanish flu. So 0:08:13.320 --> 0:08:15.840 we've had another president who had once been in capacity. 0:08:15.840 --> 0:08:19.120 Well we don't know that this president hadcapacitated, but it 0:08:19.200 --> 0:08:22.040 really affected the I think the outcome of the First 0:08:22.080 --> 0:08:24.840 World War because Wilson was kind of out of commission. 0:08:25.200 --> 0:08:28.640 Oh that's really interesting. I didn't know that. Um. It 0:08:28.720 --> 0:08:32.120 also is interesting in terms of the balance of power 0:08:32.240 --> 0:08:35.640 that shifts, um, if you relate kind of the demand 0:08:35.679 --> 0:08:38.719 for COVID for who's in power control. And something that 0:08:38.840 --> 0:08:41.160 President Trump has done has been a huge champion of 0:08:41.240 --> 0:08:43.880 energy and dependence here in the US. UM in some 0:08:43.920 --> 0:08:46.560 ways very much helped broker the deal that OPEC plus 0:08:46.600 --> 0:08:48.560 wound up doing, kind of taking Sadie's to the table 0:08:48.600 --> 0:08:50.520 and say, look, guys, you gotta cut production. You've gotta 0:08:50.520 --> 0:08:55.040 get this done. Um. How does that geopolitical dynamic shift 0:08:55.559 --> 0:08:58.520 when we start talking about things like solar and wind 0:08:58.760 --> 0:09:03.840 instead of well, you know, the big winner, Uh, Actually, 0:09:04.200 --> 0:09:07.880 in some ways is China, because China h first of all, 0:09:08.040 --> 0:09:10.760 unlike the United States, which is now essentially self sufficient, 0:09:10.840 --> 0:09:14.120 China imports its oil and they regard that as a 0:09:14.200 --> 0:09:17.200 really big problem. So if there's a big shift, they 0:09:17.240 --> 0:09:19.800 report less oil. The other thing is that they're very 0:09:19.800 --> 0:09:22.320 well positioned in the supply chains for what they call 0:09:22.440 --> 0:09:26.840 new energies. Sevent of solar panels come from China to 0:09:26.920 --> 0:09:30.800 the entire world. Uh, the lithium ion battery supply chain 0:09:31.200 --> 0:09:35.480 rare Earth. And this is where where as we were 0:09:35.480 --> 0:09:38.960 saying things come together, this is where geopolitics and energy 0:09:38.960 --> 0:09:42.960 transition come together because the question of the supply chains 0:09:43.000 --> 0:09:45.520 and the scale of the new materials that will be 0:09:45.600 --> 0:09:49.760 needed will kind of focus on a different, different view 0:09:49.800 --> 0:09:53.800 of dependence, not about oil, but about the elements of 0:09:53.800 --> 0:09:59.160 of for a renewable, more renewable energy economy. Absolutely, So 0:09:59.200 --> 0:10:04.200 what's the next big sort of leg of this new energy? 0:10:05.120 --> 0:10:08.200 Where's the uncharted territory as it were, So they sort 0:10:08.200 --> 0:10:10.640 of use the metaphor of your book, what should we 0:10:10.679 --> 0:10:14.000 be looking at next? Well, I think on the technology side, 0:10:14.040 --> 0:10:17.520 it's you know, will there be breakthroughs, big breakthroughs on 0:10:17.640 --> 0:10:22.440 big batteries, Will there be breakthroughs on on carbon capture? 0:10:23.280 --> 0:10:25.800 Will there be breakthroughs on hydrogen? So that's on on 0:10:25.880 --> 0:10:29.079 that side. I think actually where the U. S. China 0:10:29.200 --> 0:10:33.760 relationship goes will be very important for the future of energy. 0:10:34.200 --> 0:10:36.400 So those are a couple of things that I would watch. 0:10:36.600 --> 0:10:39.160 And then what kind of recover economic recovery do we 0:10:39.200 --> 0:10:42.920 actually have coming out of this COVID crisis which is 0:10:42.960 --> 0:10:46.560 now clearly more extended, uh than you know, people would 0:10:46.559 --> 0:10:48.840 have thought when they left their offices on March fifteen 0:10:49.120 --> 0:10:52.800 and thought they'd be back in a week, right, right, Absolutely, 0:10:52.880 --> 0:10:57.760 now remember those days. Yeah, the world it is fundamentally changed. 0:10:57.800 --> 0:11:01.200 That is. If I can tell you one other thing, 0:11:01.440 --> 0:11:05.680 digital digitalization, seven years of digitalization has been compressed into 0:11:05.720 --> 0:11:09.080 seven months. The nature of work will change and is 0:11:09.120 --> 0:11:11.640 insofar as work becomes remote and at home. One thing 0:11:11.679 --> 0:11:15.280 I think we all notice is the boundaries between work life, 0:11:15.280 --> 0:11:19.560 work balance. That those boundaries get a lot less clear 0:11:19.679 --> 0:11:22.920 when you're in a digital world. Absolutely, that is true. 0:11:23.000 --> 0:11:25.320 Dan Jurgen, you're such a gentleman. Thank you for spending 0:11:25.360 --> 0:11:27.560 some time with us this afternoon on a very very 0:11:27.559 --> 0:11:30.319 busy day we know. Congratulations on your book. It's called 0:11:30.360 --> 0:11:33.720 The New Map Energy, Climate and the Clash of Nations.