1 00:00:00,680 --> 00:00:06,399 Speaker 1: Welcome to zero. I'm Akshatrati. This week peaks Politics and Predictions. 2 00:00:19,400 --> 00:00:22,079 Speaker 1: Today we are going to talk about oil. Whether you 3 00:00:22,160 --> 00:00:25,680 Speaker 1: love it or hate it, you cannot deny that the 4 00:00:25,720 --> 00:00:29,040 Speaker 1: world needs it, at least right now. And if you 5 00:00:29,080 --> 00:00:31,760 Speaker 1: care about tackling climate change, then you also need to 6 00:00:31,800 --> 00:00:34,680 Speaker 1: care about what happens to the demand for oil over 7 00:00:34,720 --> 00:00:38,040 Speaker 1: the coming decades. Growth in oil demand has so far 8 00:00:38,200 --> 00:00:41,600 Speaker 1: been a close proxy for economic growth. While it's clear 9 00:00:41,680 --> 00:00:44,720 Speaker 1: some of that economic growth and the energy that powered 10 00:00:44,760 --> 00:00:47,920 Speaker 1: it has been responsible for climate change, it has also 11 00:00:47,960 --> 00:00:51,519 Speaker 1: pulled hundreds of millions of people out of poverty. As 12 00:00:51,560 --> 00:00:54,160 Speaker 1: we transition to clean energy, there is now a real 13 00:00:54,240 --> 00:00:56,520 Speaker 1: prospect of breaking that linkage. 14 00:00:57,240 --> 00:01:00,320 Speaker 2: If you're talking about structural decline in oil demand. Until 15 00:01:00,440 --> 00:01:03,440 Speaker 2: very recently you were talking about structural decline in the 16 00:01:03,480 --> 00:01:06,039 Speaker 2: global economy. I don't think we are talking about that 17 00:01:06,160 --> 00:01:09,520 Speaker 2: now because we do have these quite effective substitutes, and 18 00:01:09,520 --> 00:01:11,320 Speaker 2: they're becoming more effective by the year. 19 00:01:11,760 --> 00:01:14,800 Speaker 1: That's David Fickling, a columnist for Bloomberg Opinion and my 20 00:01:14,920 --> 00:01:18,520 Speaker 1: guest today. He's joining me to talk about peak oil. 21 00:01:19,400 --> 00:01:21,600 Speaker 1: In a matter of mere decades, the world has gone 22 00:01:21,680 --> 00:01:24,679 Speaker 1: from the specter of running out of oil to soon 23 00:01:24,760 --> 00:01:28,280 Speaker 1: being able to choose not to extract every last job, 24 00:01:29,200 --> 00:01:31,840 Speaker 1: Or to put it another way, the world has gone 25 00:01:31,840 --> 00:01:35,360 Speaker 1: from watching for the day that oil supply peaks to 26 00:01:35,440 --> 00:01:39,679 Speaker 1: trying to predict the day when oil demand peaks. All 27 00:01:39,720 --> 00:01:42,640 Speaker 1: this matter is because burning oil contributes about a third 28 00:01:42,680 --> 00:01:46,320 Speaker 1: of global emissions, and getting to net zero will mean 29 00:01:46,400 --> 00:01:50,440 Speaker 1: finding ways to wean the economy of this still essential commodity. 30 00:01:51,200 --> 00:01:54,400 Speaker 1: There's also that tiny matter that oil commands the most 31 00:01:54,440 --> 00:01:59,520 Speaker 1: attention in global geopolitics among all other commodities. What happens 32 00:01:59,520 --> 00:02:02,440 Speaker 1: to the major oil powers once the world starts wanting 33 00:02:02,600 --> 00:02:06,400 Speaker 1: less oil. This week is a good time to talk 34 00:02:06,440 --> 00:02:10,079 Speaker 1: about it because is the fiftieth anniversary of the OPEC 35 00:02:10,160 --> 00:02:13,600 Speaker 1: oil embargo in nineteen seventy three, and those powers showing 36 00:02:13,680 --> 00:02:16,520 Speaker 1: how much of a stranglehold oil can have on the 37 00:02:16,520 --> 00:02:17,440 Speaker 1: global economy. 38 00:02:17,840 --> 00:02:21,040 Speaker 3: The oil producing countries of the Arab world decided to 39 00:02:21,160 --> 00:02:24,360 Speaker 3: use their oil as a political weapon. They will reduce 40 00:02:24,440 --> 00:02:27,920 Speaker 3: oil production by five percent a month until the Israelis 41 00:02:27,960 --> 00:02:30,000 Speaker 3: withdrawal from occupied territories. 42 00:02:30,200 --> 00:02:32,960 Speaker 1: As expected, there was a huge reaction in countries like 43 00:02:33,000 --> 00:02:33,480 Speaker 1: the US. 44 00:02:33,880 --> 00:02:36,240 Speaker 3: This is a pearl harbor again, as far as the 45 00:02:36,320 --> 00:02:38,520 Speaker 3: United States is concerned because of the fact that it 46 00:02:38,880 --> 00:02:41,760 Speaker 3: invasions a whole change in our lifestyle, a whole change 47 00:02:41,760 --> 00:02:43,840 Speaker 3: in the way this country has been built. 48 00:02:44,040 --> 00:02:47,680 Speaker 1: All that happened because Arab countries were opposing Western countries 49 00:02:47,760 --> 00:02:51,799 Speaker 1: support for Israel in the nineteen seventy three Arab Israeli war. 50 00:02:52,880 --> 00:02:55,480 Speaker 1: It's tragic that almost to the date, the region is 51 00:02:55,520 --> 00:03:00,440 Speaker 1: experiencing yet another war and yet another humanitarian crisis. Back 52 00:03:00,480 --> 00:03:03,880 Speaker 1: in nineteen seventy three, oil producing nations could use oil 53 00:03:03,880 --> 00:03:08,280 Speaker 1: as a weapon because supply was an issue. Now David 54 00:03:08,280 --> 00:03:11,040 Speaker 1: predicts that demand is going to be the issue. That 55 00:03:11,120 --> 00:03:15,040 Speaker 1: is the day humanity can say, dear Oil, it's not you, 56 00:03:15,400 --> 00:03:19,200 Speaker 1: it's me is on the horizon. In fact, last year, 57 00:03:19,280 --> 00:03:21,560 Speaker 1: David wrote a column where he said pea coil has 58 00:03:21,600 --> 00:03:25,359 Speaker 1: finally arrived. No really, So I invited David to come 59 00:03:25,400 --> 00:03:27,560 Speaker 1: on the show to help me understand why the world 60 00:03:27,639 --> 00:03:30,560 Speaker 1: cares so much about pea coil, why he still thinks 61 00:03:30,600 --> 00:03:33,160 Speaker 1: his prediction is the right one, and to explore the 62 00:03:33,200 --> 00:03:51,040 Speaker 1: truly wild world we will enter after oil demand peaks. David, 63 00:03:51,120 --> 00:03:54,600 Speaker 1: Welcome to the show. Hey, this is an interesting week 64 00:03:54,680 --> 00:03:57,360 Speaker 1: to talk about what we are going to talk about, 65 00:03:57,440 --> 00:04:02,600 Speaker 1: which is peak oil. It is the fiftieth anniversary of 66 00:04:02,840 --> 00:04:07,600 Speaker 1: a pivotal week in energy history. I'm talking about the 67 00:04:07,720 --> 00:04:12,040 Speaker 1: nineteen seventy three oil crisis, which began on the seventeenth 68 00:04:12,080 --> 00:04:14,720 Speaker 1: of October. So can we just start there as a 69 00:04:14,760 --> 00:04:18,960 Speaker 1: moment in time which changed the world and perhaps bring 70 00:04:19,000 --> 00:04:22,159 Speaker 1: it to a point where you feel peak oil is 71 00:04:22,200 --> 00:04:24,479 Speaker 1: a thing that people started to talk about. 72 00:04:24,680 --> 00:04:27,640 Speaker 2: Absolutely, I think something we're going to talk about throughout 73 00:04:27,680 --> 00:04:31,960 Speaker 2: this conversation is about the interplay between supply and demand. 74 00:04:32,320 --> 00:04:35,200 Speaker 2: The seventy three oil crisis and also the seventy nine 75 00:04:35,200 --> 00:04:37,680 Speaker 2: to one, which in some ways had a more lasting effect, 76 00:04:37,760 --> 00:04:41,200 Speaker 2: which is proked by the revolution in Iran. Obviously, they 77 00:04:41,200 --> 00:04:43,760 Speaker 2: were events in the history of oil supply, but they 78 00:04:43,760 --> 00:04:46,680 Speaker 2: had immense consequences on the history of oil demand. If 79 00:04:46,680 --> 00:04:50,120 Speaker 2: you look at oil demand projections before nineteen seventy three 80 00:04:50,320 --> 00:04:53,760 Speaker 2: through the fifties and sixties, energy demand was increasing at 81 00:04:53,760 --> 00:04:56,960 Speaker 2: a rate that looked almost exponential. You had these very 82 00:04:57,040 --> 00:05:01,479 Speaker 2: dramatic projections about how fast demand energy and in particular oil, 83 00:05:01,560 --> 00:05:04,200 Speaker 2: was going to go up overcoming decades. And that trend 84 00:05:04,279 --> 00:05:06,719 Speaker 2: was broken by nineteen seventy three and it's for very 85 00:05:06,720 --> 00:05:11,920 Speaker 2: obvious reasons. Supply and availability of oil suddenly looked less secure, 86 00:05:12,680 --> 00:05:15,960 Speaker 2: and so consumers had to sort of start rethinking a 87 00:05:15,960 --> 00:05:17,720 Speaker 2: lot of the things that they were doing. So, I mean, 88 00:05:17,760 --> 00:05:20,240 Speaker 2: the most obvious example of this was that in nineteen 89 00:05:20,279 --> 00:05:22,640 Speaker 2: seventy three, about a third of the world's oil went 90 00:05:22,640 --> 00:05:27,720 Speaker 2: into fuel boilers it was producing electricity. That is now 91 00:05:27,800 --> 00:05:30,320 Speaker 2: about seven percent of the world's oil. The world has 92 00:05:30,360 --> 00:05:34,440 Speaker 2: given up on that because essentially after seventy three, European economies, 93 00:05:34,480 --> 00:05:36,560 Speaker 2: a lot of the US, they turned to domestic coal 94 00:05:36,600 --> 00:05:41,040 Speaker 2: reserves instead. France turned to nuclear of course famously, and 95 00:05:41,120 --> 00:05:45,200 Speaker 2: we saw the birth of a lot more investment in renewables, 96 00:05:45,200 --> 00:05:47,720 Speaker 2: although of course at that stage it was far too 97 00:05:47,760 --> 00:05:50,000 Speaker 2: early stage. But what we saw was that when you 98 00:05:50,040 --> 00:05:53,040 Speaker 2: have a supply problem, demand starts to respond. And that's 99 00:05:53,080 --> 00:05:55,000 Speaker 2: been a lesson that continues for decades. 100 00:05:55,839 --> 00:05:59,159 Speaker 1: So in initial days, you know, this is talking from 101 00:05:59,200 --> 00:06:03,480 Speaker 1: the nineteen seventy era, when the term peak oil was used, 102 00:06:03,960 --> 00:06:08,200 Speaker 1: it almost always meant peak oil supply. But today we're 103 00:06:08,240 --> 00:06:11,400 Speaker 1: talking about a very different kind of peak oil. 104 00:06:11,800 --> 00:06:13,839 Speaker 2: Yes, absolutely, I mean, in fact, if you look at 105 00:06:13,920 --> 00:06:17,520 Speaker 2: the projections for peak oil supply, they go back even 106 00:06:17,560 --> 00:06:19,960 Speaker 2: further than that. At one point, I remember looking at 107 00:06:19,960 --> 00:06:23,360 Speaker 2: this in nineteen nineteen, the chief geologist of the US 108 00:06:23,400 --> 00:06:27,560 Speaker 2: Geological Survey said that the US domestic output, this was 109 00:06:27,600 --> 00:06:29,920 Speaker 2: no one was even projecting anything on a global basis 110 00:06:29,960 --> 00:06:32,640 Speaker 2: at that point. They said that within two to five years, 111 00:06:32,880 --> 00:06:36,160 Speaker 2: US oil production was going to start declining. And at 112 00:06:36,160 --> 00:06:38,000 Speaker 2: that point it was about one million barrels per day. 113 00:06:38,120 --> 00:06:42,080 Speaker 2: So it's thirteen million barrels per day now more or less. 114 00:06:41,960 --> 00:06:44,760 Speaker 1: Whether it's in the case of supply or it's in 115 00:06:44,760 --> 00:06:48,200 Speaker 1: the case of demand. We care a lot about pea coil. 116 00:06:48,839 --> 00:06:52,000 Speaker 1: Why is it that we care so much about pea coil? 117 00:06:52,520 --> 00:06:54,640 Speaker 2: If you look around you you can see how important 118 00:06:54,680 --> 00:06:57,200 Speaker 2: to US oil is in all sorts of ways. From 119 00:06:57,200 --> 00:07:00,960 Speaker 2: the consumption point of view, obviously the cars we drive, 120 00:07:01,160 --> 00:07:04,039 Speaker 2: the consumer products that we have. Oil is in a 121 00:07:04,120 --> 00:07:06,680 Speaker 2: vast array of uses. It's not just cars, it's the 122 00:07:06,680 --> 00:07:08,560 Speaker 2: trucks that drive things, the planes that we fly, the 123 00:07:08,640 --> 00:07:11,440 Speaker 2: ships that move things around. Also like the plastics and 124 00:07:11,520 --> 00:07:16,000 Speaker 2: consumer goods, the greases, the asphalt on the roads, it's everywhere. 125 00:07:16,240 --> 00:07:19,160 Speaker 2: Of course, From the climate perspective as well, oil is 126 00:07:19,280 --> 00:07:22,240 Speaker 2: one of the largest contributors to climate change, and that's 127 00:07:22,280 --> 00:07:25,000 Speaker 2: something that we need to reduce. So before we were 128 00:07:25,040 --> 00:07:28,880 Speaker 2: worried about peak oil supply, we were worried, gosh, we're 129 00:07:28,920 --> 00:07:30,840 Speaker 2: not going to be able to have all these useful 130 00:07:30,840 --> 00:07:34,080 Speaker 2: consumer goods that oil provides us. We're less worried about that. 131 00:07:34,160 --> 00:07:35,960 Speaker 2: Now we're more worried about the fact that oil is 132 00:07:35,960 --> 00:07:39,560 Speaker 2: actually destroying the environment around us. We are concerned about 133 00:07:39,880 --> 00:07:43,360 Speaker 2: ways to substitute and reduce substitution is I think the 134 00:07:43,400 --> 00:07:45,440 Speaker 2: thing that's really changed in this area when we're talking 135 00:07:45,440 --> 00:07:49,480 Speaker 2: about peak oil demand. There are alternative ways of doing 136 00:07:49,560 --> 00:07:53,160 Speaker 2: the things that oil does, for instance, electric vehicles, bio 137 00:07:53,200 --> 00:07:57,600 Speaker 2: fuels in conventional vehicles, and alternative feedstocks like hydrogen for 138 00:07:57,640 --> 00:08:00,720 Speaker 2: the chemicals industry. And that's what's changed at the moment. 139 00:08:01,080 --> 00:08:05,000 Speaker 1: So you published a bold article last year which started 140 00:08:05,080 --> 00:08:08,520 Speaker 1: with sort of a trepidation. Yes, it said, I'm going 141 00:08:08,600 --> 00:08:10,680 Speaker 1: to make a bold claim, and I may come to 142 00:08:10,760 --> 00:08:14,160 Speaker 1: regret it, but my bold claim is that peak oil 143 00:08:14,240 --> 00:08:17,760 Speaker 1: demand is here. Twelve months on, tell us why you 144 00:08:17,800 --> 00:08:21,160 Speaker 1: thought peak Alderman is here, and do you think you're 145 00:08:21,200 --> 00:08:21,720 Speaker 1: still right? 146 00:08:22,000 --> 00:08:25,120 Speaker 2: Sure? Yeah, well, yeah, I mean the main reason I 147 00:08:25,160 --> 00:08:27,200 Speaker 2: wrote the column at the time was that it was 148 00:08:27,240 --> 00:08:30,320 Speaker 2: a period of very sharp tightening by the US Federal Reserve, 149 00:08:30,600 --> 00:08:34,079 Speaker 2: and at that point everyone was predicting that the world 150 00:08:34,160 --> 00:08:37,120 Speaker 2: was going to face quite a severe global recession, really 151 00:08:37,120 --> 00:08:39,600 Speaker 2: on the scale of the Volka Recession of the early eighties. 152 00:08:39,840 --> 00:08:42,720 Speaker 2: You know, this was when Paul Volka, the US Federal 153 00:08:42,760 --> 00:08:45,840 Speaker 2: Reserve governor, tried to stamp out inflation in the wake 154 00:08:45,880 --> 00:08:49,280 Speaker 2: of the nineteen seventy nine oil crisis during the Irana 155 00:08:49,400 --> 00:08:52,720 Speaker 2: ark War, and that's one of the most dramatic reductions 156 00:08:52,760 --> 00:08:54,920 Speaker 2: in oil demand that we've seen in history. The argument 157 00:08:54,920 --> 00:08:57,120 Speaker 2: I made at the time was essentially that we saw 158 00:08:57,160 --> 00:08:59,960 Speaker 2: a recession on that scale that was probably going to 159 00:09:00,040 --> 00:09:03,240 Speaker 2: crimp oil demands until the mid twenty twenties, sort of 160 00:09:03,240 --> 00:09:05,599 Speaker 2: twenty twenty five, and at that point we start to 161 00:09:05,640 --> 00:09:08,760 Speaker 2: see some of these long term factors like rising energy 162 00:09:08,800 --> 00:09:11,959 Speaker 2: efficiency in vehicles and the rise of electric vehicles, mean 163 00:09:12,040 --> 00:09:15,480 Speaker 2: that oil is entering a secular decline. Now, there has 164 00:09:15,480 --> 00:09:17,840 Speaker 2: not been a global session. In fact, the global economy 165 00:09:17,840 --> 00:09:22,680 Speaker 2: has grown extremely strongly. We're really sort of above trend growth. However, 166 00:09:23,000 --> 00:09:25,439 Speaker 2: the specific prediction I made was about crude oil. 167 00:09:26,000 --> 00:09:29,920 Speaker 1: Yeah, so let's do that because it is nerdy. Beyond 168 00:09:29,960 --> 00:09:33,760 Speaker 1: the fact that you can make these pronouncements about peak oil, 169 00:09:34,080 --> 00:09:36,680 Speaker 1: oil is not one thing. We kind of think of 170 00:09:36,720 --> 00:09:38,600 Speaker 1: it as a commodity, but it's not one thing. So 171 00:09:38,679 --> 00:09:41,640 Speaker 1: let's just break it down and then explain to us 172 00:09:41,800 --> 00:09:43,840 Speaker 1: where you think we have reached a peak. 173 00:09:44,400 --> 00:09:46,319 Speaker 2: If you think about how you measure oil, it's actually 174 00:09:46,400 --> 00:09:49,120 Speaker 2: quite a difficult thing to measure oil demand. And you 175 00:09:49,160 --> 00:09:50,800 Speaker 2: can go right back to the nineteenth century. You know, 176 00:09:50,920 --> 00:09:54,120 Speaker 2: John d. Rockefeller and standard oil. John d. Rockefeller was 177 00:09:54,160 --> 00:09:57,880 Speaker 2: not controlling oil fields all supply. He controlled refineries, and 178 00:09:57,960 --> 00:10:01,160 Speaker 2: refineries are the bottleneck in the global oil supply chain. 179 00:10:01,240 --> 00:10:03,080 Speaker 2: So if you want to count how much oil is 180 00:10:03,120 --> 00:10:05,760 Speaker 2: being consumed, the best way to do is go to 181 00:10:05,760 --> 00:10:07,920 Speaker 2: the gate of a refinery and measure how much is 182 00:10:07,920 --> 00:10:10,920 Speaker 2: coming out of a refinery. And so generally when you 183 00:10:11,000 --> 00:10:14,880 Speaker 2: hear the OPEC or the International Energy Agency saying like 184 00:10:15,080 --> 00:10:17,439 Speaker 2: what is the level of oil demand, essentially what they're 185 00:10:17,480 --> 00:10:20,040 Speaker 2: saying is how many barrels are coming out of oil refineries. 186 00:10:21,760 --> 00:10:25,680 Speaker 1: David is making an important distinction here when measuring oil consumption, 187 00:10:26,240 --> 00:10:29,760 Speaker 1: organizations like the International Energy Agency and OPEC are not 188 00:10:29,840 --> 00:10:33,440 Speaker 1: counting what's going into the refinery, but what's coming out. 189 00:10:34,200 --> 00:10:37,200 Speaker 1: For much of history, refineries took in pretty much only 190 00:10:37,320 --> 00:10:40,240 Speaker 1: crude oil, so the amount of refined products was a 191 00:10:40,240 --> 00:10:43,000 Speaker 1: good proxy for the amount of oil coming out of 192 00:10:43,000 --> 00:10:46,679 Speaker 1: the ground. That's changed over the past few decades, and 193 00:10:46,720 --> 00:10:49,640 Speaker 1: now refined products come not just from crude oil, but 194 00:10:49,720 --> 00:10:53,320 Speaker 1: also bio fields and natural gas liquids. And because a 195 00:10:53,360 --> 00:10:56,000 Speaker 1: barrel of refined products can be made from more than 196 00:10:56,040 --> 00:10:59,559 Speaker 1: one source, it means there can be a significant difference 197 00:10:59,600 --> 00:11:02,240 Speaker 1: between the amount of crude ole going into a refinery 198 00:11:02,559 --> 00:11:05,120 Speaker 1: and the number of barrels of refined products coming out. 199 00:11:06,080 --> 00:11:10,720 Speaker 2: Global supply of refined products, so things like gasoline and 200 00:11:10,760 --> 00:11:13,960 Speaker 2: diesel and jet field and things like that, that's about one hundred, 201 00:11:14,040 --> 00:11:16,880 Speaker 2: one hundred and one hundred and two million barrels per day. 202 00:11:17,200 --> 00:11:20,720 Speaker 2: Global supply of crude oil, which is what we think 203 00:11:20,720 --> 00:11:23,040 Speaker 2: of as oil black stuff, you know, that will fit 204 00:11:23,120 --> 00:11:26,079 Speaker 2: in a barrel that's subject to opec quotas the stuff 205 00:11:26,080 --> 00:11:28,280 Speaker 2: that's quoted on the news for the price of West 206 00:11:28,280 --> 00:11:32,280 Speaker 2: Texas intoneedit or brent. That's only about eighty three million 207 00:11:32,320 --> 00:11:34,760 Speaker 2: of those one hundred million barrels, probably a little bit 208 00:11:34,840 --> 00:11:37,079 Speaker 2: less than that. At the moment crude ol, which was 209 00:11:37,120 --> 00:11:39,600 Speaker 2: what I made this prediction about. We are still actually 210 00:11:39,640 --> 00:11:43,680 Speaker 2: below twenty eighteens levels of crude oil demand at this point, 211 00:11:43,760 --> 00:11:47,240 Speaker 2: and the International Energy Agency, if you look through their numbers, 212 00:11:47,480 --> 00:11:50,360 Speaker 2: they don't predict that next year we're going to exceed 213 00:11:50,440 --> 00:11:54,360 Speaker 2: twenty eighteen's levels of crude oil demand. So at this point, 214 00:11:54,360 --> 00:11:56,520 Speaker 2: crude ole demand is still below its peak. And there's 215 00:11:56,559 --> 00:11:59,600 Speaker 2: a lot of headlines you'll see about we're seeing record 216 00:11:59,600 --> 00:12:02,080 Speaker 2: old demind but that's actually largely to do with growth 217 00:12:02,080 --> 00:12:05,360 Speaker 2: and biofueld supply and to a similar extent, growth in 218 00:12:05,559 --> 00:12:07,880 Speaker 2: natural gas. Liquid's not actually in crude oil. 219 00:12:08,160 --> 00:12:11,640 Speaker 1: Okay, So what you've just said is basically oil demand, 220 00:12:12,600 --> 00:12:16,480 Speaker 1: as we understand all kinds of product demand is growing 221 00:12:17,280 --> 00:12:22,320 Speaker 1: and is at a new peak, but the black goole 222 00:12:22,440 --> 00:12:27,199 Speaker 1: that is feeding that oil demand has actually peaked. There 223 00:12:27,280 --> 00:12:31,680 Speaker 1: is all this other stuff, some of which is actually biofields, 224 00:12:31,960 --> 00:12:36,560 Speaker 1: which is the fastest growing segment of supply. Why have 225 00:12:36,679 --> 00:12:39,679 Speaker 1: biofields become such a big part of the supply mix? 226 00:12:40,280 --> 00:12:44,080 Speaker 2: Biofields is essentially policy. One of the earliest responses to 227 00:12:44,080 --> 00:12:47,600 Speaker 2: the seventy three oil crisis was Brazil started introducing very 228 00:12:47,840 --> 00:12:51,400 Speaker 2: dramatic biofield mandates from the nineteen eighties. We've added the 229 00:12:51,520 --> 00:12:54,320 Speaker 2: US to that in the two thousands. In the late nineties, 230 00:12:54,679 --> 00:13:00,000 Speaker 2: hardly any US crops went into making fuel. At this point, 231 00:13:00,440 --> 00:13:04,480 Speaker 2: more US crop volume goes into making fuel than goes 232 00:13:04,480 --> 00:13:09,000 Speaker 2: into making food for Americans. It's grown to that extent, 233 00:13:09,360 --> 00:13:12,360 Speaker 2: and we're seeing other countries moving in the same direction. 234 00:13:12,880 --> 00:13:15,319 Speaker 2: Just in the past twelve months, India has doubled its 235 00:13:15,320 --> 00:13:20,239 Speaker 2: biofuel mandate I think, to twenty five percent from ten percent. Indonesia, 236 00:13:20,280 --> 00:13:23,920 Speaker 2: another big source of transport demand growth, has raised its 237 00:13:24,000 --> 00:13:26,000 Speaker 2: bar fuel mandate to twenty five and I think is 238 00:13:26,000 --> 00:13:28,120 Speaker 2: going to fifty percent in the next few years. These 239 00:13:28,160 --> 00:13:30,880 Speaker 2: are quite significant slices of oil demand. 240 00:13:31,280 --> 00:13:34,000 Speaker 1: So if that is the case, and yes, let's assume 241 00:13:34,040 --> 00:13:38,040 Speaker 1: the total demand for oil will continue to grow as 242 00:13:38,120 --> 00:13:42,560 Speaker 1: many predictions say it will. But if biofields also continue 243 00:13:42,559 --> 00:13:46,280 Speaker 1: to grow, why did you feel any trepidation making the 244 00:13:46,360 --> 00:13:50,600 Speaker 1: claim that crude oil demand has beaked. 245 00:13:51,240 --> 00:13:53,319 Speaker 2: I think the reason for that is that every prediction 246 00:13:53,360 --> 00:13:56,840 Speaker 2: anyone has ever made for history has turned out to 247 00:13:56,880 --> 00:14:00,200 Speaker 2: be transted wrong. And this is about a series of 248 00:14:00,559 --> 00:14:03,400 Speaker 2: lines on a chart and the direction that they're moving, 249 00:14:03,679 --> 00:14:05,960 Speaker 2: and I think if I can give common ground that 250 00:14:06,000 --> 00:14:09,400 Speaker 2: really very few people would disagree on the amount of 251 00:14:09,559 --> 00:14:14,160 Speaker 2: liquid fuels demand over the coming decade. The pace of 252 00:14:14,200 --> 00:14:17,439 Speaker 2: growth has clearly slowed. Even oil bulls would agree about that. 253 00:14:17,880 --> 00:14:20,400 Speaker 2: And so we're on about one hundred and two million 254 00:14:20,440 --> 00:14:23,240 Speaker 2: barrels a day of liquid fuels demand. You don't see 255 00:14:23,240 --> 00:14:26,240 Speaker 2: many predictions heading much above, say one hundred and five 256 00:14:26,520 --> 00:14:29,760 Speaker 2: million barrels a day, and maybe some people do predict that, 257 00:14:29,840 --> 00:14:33,040 Speaker 2: but that's over the previous decade. I think I'll supply increase. 258 00:14:33,160 --> 00:14:36,360 Speaker 2: Liquid fueld supply increase by say ten million barrels a day. 259 00:14:36,760 --> 00:14:39,000 Speaker 2: So we're quite close to the peak in that sense. 260 00:14:39,280 --> 00:14:41,960 Speaker 2: And the question is how much of that peak gets 261 00:14:42,320 --> 00:14:44,840 Speaker 2: used up by crude oil, how much gets used up 262 00:14:44,840 --> 00:14:47,840 Speaker 2: by biofuels, how much is natural gas liquids, and how 263 00:14:47,920 --> 00:14:52,040 Speaker 2: much is processing gains. The argument I've made is that biofuels, 264 00:14:52,200 --> 00:14:55,440 Speaker 2: natural gas, liquids, and process and gains, they make up 265 00:14:55,960 --> 00:14:57,360 Speaker 2: all of that increase in supply. 266 00:14:58,880 --> 00:15:01,640 Speaker 1: You might be wondering if having more biofuels in the 267 00:15:01,680 --> 00:15:04,720 Speaker 1: mix is a good thing for the climate. It's really 268 00:15:04,760 --> 00:15:08,320 Speaker 1: complicated to calculate how much carbon saving can be achieved 269 00:15:08,360 --> 00:15:12,680 Speaker 1: with biofuels. What most studies agree on is that biofuels 270 00:15:12,720 --> 00:15:16,080 Speaker 1: aren't carbon neutral. Just because they come from growing food 271 00:15:16,360 --> 00:15:19,640 Speaker 1: that captures carbon dioxiet in the process of growth does 272 00:15:19,680 --> 00:15:23,720 Speaker 1: not mean biofields do not have additional emissions. Processing crops 273 00:15:23,720 --> 00:15:29,000 Speaker 1: into fuel requires energy. Burning biofuels creates air pollution. That's 274 00:15:29,000 --> 00:15:32,120 Speaker 1: why biofuelds for road transport isn't a good solution to 275 00:15:32,160 --> 00:15:35,120 Speaker 1: pursue in the long term. Instead, it's better to focus 276 00:15:35,200 --> 00:15:38,240 Speaker 1: on using biofuels to reduce emissions from aviation. 277 00:15:40,400 --> 00:15:42,640 Speaker 2: There are more people in the world who are buying 278 00:15:42,800 --> 00:15:46,280 Speaker 2: vehicles as incomes rise, there are more trucks moving around, 279 00:15:46,280 --> 00:15:48,600 Speaker 2: people are flying, or there's all those things that are 280 00:15:48,640 --> 00:15:53,160 Speaker 2: increasing top level demand. But also every vehicle in the 281 00:15:53,200 --> 00:15:55,800 Speaker 2: world has been getting more efficient. This is actually not 282 00:15:55,840 --> 00:15:58,440 Speaker 2: as much about the rise of electric vehicles. It's actually 283 00:15:58,480 --> 00:16:01,640 Speaker 2: about fuel efficiency rules that have been implemented for about 284 00:16:01,640 --> 00:16:06,040 Speaker 2: fifteen years Obama era fleet fuel economy rules, similar rules 285 00:16:06,040 --> 00:16:09,240 Speaker 2: in Europe, the same sort of standards in China, in India. 286 00:16:09,760 --> 00:16:12,600 Speaker 2: All of those vehicles from the sort of pre two 287 00:16:12,600 --> 00:16:15,000 Speaker 2: thousand and eight era, they are now being scrapped. They're 288 00:16:15,000 --> 00:16:17,720 Speaker 2: fifteen years old, and they're getting phased out of the fleet, 289 00:16:18,000 --> 00:16:21,720 Speaker 2: and new vehicles are strikingly more efficient. I think if 290 00:16:22,440 --> 00:16:26,400 Speaker 2: you look at some US examples, a current model car 291 00:16:26,880 --> 00:16:29,280 Speaker 2: and just I have the numbers here in front of me, Actually, 292 00:16:29,520 --> 00:16:32,960 Speaker 2: new US cars now travel twice as far per gallon 293 00:16:33,200 --> 00:16:35,240 Speaker 2: as they did at the start of the Obama administration. 294 00:16:35,800 --> 00:16:39,840 Speaker 2: And that's just normal US gasoline cars. So that is 295 00:16:40,080 --> 00:16:42,520 Speaker 2: an incremental reduction in oil demand, and it's nothing to 296 00:16:42,520 --> 00:16:43,560 Speaker 2: do with electric vehicles. 297 00:16:43,920 --> 00:16:47,920 Speaker 1: As we know, there's an explosive growth in the number 298 00:16:48,000 --> 00:16:52,239 Speaker 1: of electric vehicles being sold. The total oil demand destruction 299 00:16:52,760 --> 00:16:55,640 Speaker 1: from all vehicles, not just cars, but buses and two 300 00:16:55,640 --> 00:16:58,520 Speaker 1: wheelers and three wheelers is only about a million barrels 301 00:16:58,520 --> 00:17:01,680 Speaker 1: a day of oil. So much of the game, so 302 00:17:01,800 --> 00:17:06,600 Speaker 1: to speak, from decreasing demand has come from as you say, efficiency. 303 00:17:06,040 --> 00:17:09,400 Speaker 2: Gains absolutely and so you know, if you break down 304 00:17:09,400 --> 00:17:11,240 Speaker 2: the oil barrel, about a quarter of the oil barrow 305 00:17:11,280 --> 00:17:15,600 Speaker 2: goes into gasoline, another thirty percent goes into diesel, and 306 00:17:15,640 --> 00:17:18,399 Speaker 2: then the remainder about eight percent of it is actually 307 00:17:18,400 --> 00:17:21,399 Speaker 2: just a fuel that oil refineries use. About fifteen percent 308 00:17:21,520 --> 00:17:25,440 Speaker 2: is for shipping and for aviation and the rangers, petrochemicals, asphalt, 309 00:17:25,560 --> 00:17:27,840 Speaker 2: that sort of thing. So you know, if you look 310 00:17:27,840 --> 00:17:31,240 Speaker 2: at those different fractions of the barrel, fuel oil demand 311 00:17:31,400 --> 00:17:34,639 Speaker 2: peaked way back in nineteen seventy nine, Gasoline demand according 312 00:17:34,640 --> 00:17:38,400 Speaker 2: to the International Energy Agency, that peaks probably in twenty nineteen, 313 00:17:38,480 --> 00:17:40,919 Speaker 2: and he's already in decline. Road Field demand as a 314 00:17:40,920 --> 00:17:43,239 Speaker 2: whole is going to peak in the next sort of 315 00:17:43,400 --> 00:17:45,800 Speaker 2: four to five years. And of course, the Fatty Birol, 316 00:17:45,920 --> 00:17:48,560 Speaker 2: the head of the IEA, just said last month that 317 00:17:49,000 --> 00:17:51,560 Speaker 2: oil demand and here he means not crude oil, he 318 00:17:51,640 --> 00:17:54,280 Speaker 2: means liquid fuels demand as a whole that is also 319 00:17:54,359 --> 00:17:55,760 Speaker 2: going to peak this decade. 320 00:17:56,320 --> 00:17:59,399 Speaker 1: Just on a sidetrack here, Even as the IEA was 321 00:17:59,520 --> 00:18:03,159 Speaker 1: born out of the fossil fuel era, in recent years 322 00:18:03,240 --> 00:18:06,320 Speaker 1: it's become a lightning rod for all kinds of people, 323 00:18:06,520 --> 00:18:11,040 Speaker 1: first climate people and now oil people, because every pronouncement 324 00:18:11,240 --> 00:18:15,119 Speaker 1: it makes today it makes for massive headlines in energy press. 325 00:18:15,560 --> 00:18:20,200 Speaker 1: And so this prediction that Fati Birol made you use 326 00:18:20,320 --> 00:18:24,440 Speaker 1: this term, which is all fossil fuels will go into 327 00:18:24,520 --> 00:18:30,000 Speaker 1: structural decline in this decade, including of course oil. Why 328 00:18:30,119 --> 00:18:35,080 Speaker 1: is structural decline such an important phrase in there? 329 00:18:35,400 --> 00:18:38,480 Speaker 2: I think that is because we have actually seen periods 330 00:18:38,520 --> 00:18:43,120 Speaker 2: of cyclical oil demand in the past, and this has 331 00:18:43,160 --> 00:18:45,840 Speaker 2: been driven by these economic factors that we talked about. 332 00:18:45,880 --> 00:18:48,840 Speaker 2: I mean, essentially, one of the main reasons that people 333 00:18:49,000 --> 00:18:51,480 Speaker 2: have always been very reluctant to make that call on 334 00:18:51,760 --> 00:18:55,680 Speaker 2: peak oil consumption is that oil and economic growth. If 335 00:18:55,720 --> 00:18:59,200 Speaker 2: you track global economic growth and oil supply, they track 336 00:18:59,280 --> 00:19:03,080 Speaker 2: almost perfect because oil has for so long been the 337 00:19:03,080 --> 00:19:06,680 Speaker 2: best way of producing energy, the best energy carrier. If 338 00:19:06,720 --> 00:19:10,080 Speaker 2: you're predicting peak oil, it's like you're predicting peak economic growth, 339 00:19:10,080 --> 00:19:14,680 Speaker 2: which is obviously a disaster for the world. And historically 340 00:19:14,720 --> 00:19:17,359 Speaker 2: we've not had the substitutes for oil that we have 341 00:19:17,560 --> 00:19:20,240 Speaker 2: right now, and I think that is why it is 342 00:19:20,280 --> 00:19:23,679 Speaker 2: so important if you're talking about structural decline in oil demand. 343 00:19:23,760 --> 00:19:27,000 Speaker 2: Until very recently you were talking about structural decline in 344 00:19:27,040 --> 00:19:29,600 Speaker 2: the global economy. I don't think we are talking about 345 00:19:29,600 --> 00:19:33,200 Speaker 2: that now because we do have these quite effective substitutes, 346 00:19:33,400 --> 00:19:36,560 Speaker 2: and they're becoming more effective by the year. But that's 347 00:19:36,600 --> 00:19:39,240 Speaker 2: the difference. We have seen these cyclical declines in oil demand. 348 00:19:39,280 --> 00:19:41,160 Speaker 2: We saw it in the early eighties, when you had 349 00:19:41,240 --> 00:19:44,160 Speaker 2: the nineteen seventy nine oil crisis. You had the Iuranarak War, 350 00:19:44,200 --> 00:19:47,040 Speaker 2: you had the Vulka tightening at the federal reserve. We 351 00:19:47,160 --> 00:19:52,160 Speaker 2: did actually see oil demand decline, but then that decline reversed. 352 00:19:52,760 --> 00:19:56,120 Speaker 2: If you remember the old nineteen eighties American soap opera Dallas, 353 00:19:56,240 --> 00:19:59,320 Speaker 2: Dallas was set in a period of oil decline, it's 354 00:19:59,320 --> 00:20:01,560 Speaker 2: all about that, the sort of crises in the Texas 355 00:20:01,560 --> 00:20:04,440 Speaker 2: oil fields, and it covers that turning point actually when 356 00:20:04,440 --> 00:20:07,520 Speaker 2: the oil market started to reverse and demand started to 357 00:20:07,520 --> 00:20:10,359 Speaker 2: grow again. Those are the sort of cyclical declines we've seen. 358 00:20:10,480 --> 00:20:12,879 Speaker 2: We've not seen a structural one, and of course, if 359 00:20:12,880 --> 00:20:15,760 Speaker 2: you're talking about heading to net zero, a structural decline 360 00:20:15,800 --> 00:20:17,159 Speaker 2: is the one that you need. You don't want a 361 00:20:17,160 --> 00:20:20,639 Speaker 2: temporary blit. You actually need decline to decline forever. 362 00:20:26,040 --> 00:20:27,960 Speaker 1: One other thing that came out of the nineteen seventy 363 00:20:27,960 --> 00:20:31,679 Speaker 1: three oil crisis was the International Energy Agency. If you 364 00:20:31,680 --> 00:20:33,639 Speaker 1: want to learn more about it, you can listen to 365 00:20:33,720 --> 00:20:37,240 Speaker 1: an interview with the current head, Fatty Birole, in our archives. 366 00:20:37,480 --> 00:20:40,240 Speaker 1: There's a link in the show notes. After the break, 367 00:20:40,520 --> 00:20:55,919 Speaker 1: Humanity says to Oil, it's not you, it's me, in 368 00:20:55,960 --> 00:21:00,920 Speaker 1: response to the IA's prediction about structural decline in oil demand. 369 00:21:01,080 --> 00:21:05,040 Speaker 1: OPEK had an interesting response. It said, it is an 370 00:21:05,080 --> 00:21:09,520 Speaker 1: extremely risky and impractical narrative to dismiss fossil fuels or 371 00:21:09,560 --> 00:21:12,800 Speaker 1: to suggest that they are at the beginning of their end. 372 00:21:13,359 --> 00:21:16,800 Speaker 1: In past decades, there were often calls of peak supply 373 00:21:17,160 --> 00:21:21,480 Speaker 1: and in more recent ones, peak demand. But evidently neither 374 00:21:21,680 --> 00:21:25,879 Speaker 1: has materialized, and those are all facts. And yet the 375 00:21:26,040 --> 00:21:29,600 Speaker 1: tone is an interesting one, a tone that I'd like 376 00:21:29,640 --> 00:21:33,200 Speaker 1: to explore by just trying to understand what happens after 377 00:21:33,480 --> 00:21:37,520 Speaker 1: we reach peak oil. Because maybe you're right that we 378 00:21:37,680 --> 00:21:40,880 Speaker 1: have reached pea coil. Maybe you're wrong, maybe crude oil 379 00:21:40,960 --> 00:21:45,160 Speaker 1: demand actually does peak later in the century. However, what 380 00:21:45,400 --> 00:21:49,639 Speaker 1: is I think no longer a question of contention, is 381 00:21:49,680 --> 00:21:53,840 Speaker 1: that eventually the demand for oil will peak. What is 382 00:21:54,080 --> 00:21:57,160 Speaker 1: more interesting is what happens after. 383 00:21:57,600 --> 00:22:00,200 Speaker 2: I think the first thing I would say is what 384 00:22:00,359 --> 00:22:05,639 Speaker 2: does the liquid fuels sector look like after peak crude 385 00:22:05,640 --> 00:22:08,520 Speaker 2: oil consumption. A crucial part of that is, of course, 386 00:22:08,560 --> 00:22:11,639 Speaker 2: how fast do liquid fuels decline? And I think the 387 00:22:11,720 --> 00:22:13,640 Speaker 2: best answer is probably not as fast as we would 388 00:22:13,720 --> 00:22:16,159 Speaker 2: like them to be declining, because of course you are 389 00:22:16,200 --> 00:22:18,840 Speaker 2: going to see this decline in transport fuels, which is 390 00:22:18,920 --> 00:22:21,680 Speaker 2: fifty fifty five percent of the barrel road fuels. Rather, 391 00:22:22,160 --> 00:22:26,119 Speaker 2: that's going to accelerate as electric cars penetrate and as 392 00:22:26,160 --> 00:22:28,920 Speaker 2: the old vehicles get more efficient. But of course you've 393 00:22:28,960 --> 00:22:31,560 Speaker 2: also got this other forty five percent of the barrel, 394 00:22:31,960 --> 00:22:33,720 Speaker 2: which is shipping fuel. 395 00:22:33,680 --> 00:22:36,960 Speaker 1: And aviation fuel, which we are hearing about in the background. 396 00:22:37,119 --> 00:22:39,840 Speaker 2: Yes, right over my house, but yes, you know, forty 397 00:22:39,880 --> 00:22:42,240 Speaker 2: five percent of the oil barrel, fifteen percent of it 398 00:22:42,280 --> 00:22:45,000 Speaker 2: is shipping an aviation fuel. Shipping fuel is actually quite 399 00:22:45,000 --> 00:22:48,159 Speaker 2: an interesting one. We're seeing quite a rapid change in 400 00:22:48,200 --> 00:22:51,480 Speaker 2: the engines of ships being built with alternative fuels, which 401 00:22:51,480 --> 00:22:54,320 Speaker 2: is the biggest change in shipping since essentially since Winston 402 00:22:54,440 --> 00:22:57,560 Speaker 2: Churchill turned the British fleet to oil in nineteen ten 403 00:22:57,680 --> 00:23:01,120 Speaker 2: nineteen twelve. So that's a dramatic chain. That's only about 404 00:23:01,119 --> 00:23:03,639 Speaker 2: eight percent of the old barrel. Seven percent goes to 405 00:23:03,680 --> 00:23:06,320 Speaker 2: aviation fuel. There is a lot of talk in the 406 00:23:06,320 --> 00:23:09,919 Speaker 2: industry about the growth of sustainable aviation fuel from biofuels. 407 00:23:10,280 --> 00:23:13,120 Speaker 2: I'm quite skeptical about that. I think we are likely 408 00:23:13,160 --> 00:23:16,399 Speaker 2: to see aviation fuel increase quite a bit. Plastics is 409 00:23:16,440 --> 00:23:18,720 Speaker 2: the other thing. I think we'll probably see plastics increase 410 00:23:18,800 --> 00:23:21,639 Speaker 2: quite a bit. So really what we're talking about is 411 00:23:21,680 --> 00:23:24,800 Speaker 2: the decline of the road transport fuel bit of the barrel. 412 00:23:25,320 --> 00:23:28,240 Speaker 2: I think there's a fairly straightforward path to getting rid 413 00:23:28,280 --> 00:23:30,920 Speaker 2: of about fifty percent of oil demand. Beyond that it 414 00:23:30,960 --> 00:23:33,920 Speaker 2: gets quite a bit more challenging. And of course we've 415 00:23:34,040 --> 00:23:37,760 Speaker 2: seen with the energy transition that the world is quite 416 00:23:37,800 --> 00:23:40,720 Speaker 2: good at coming up with solutions for the next sort 417 00:23:40,720 --> 00:23:43,400 Speaker 2: of slice of emissions that we need to reduce. 418 00:23:43,640 --> 00:23:46,399 Speaker 1: And so we really haven't started thinking about the forty 419 00:23:46,400 --> 00:23:48,399 Speaker 1: five percent of the barrel and how to tackle it. 420 00:23:48,640 --> 00:23:51,600 Speaker 1: And there is hope given when we come to a problem, 421 00:23:51,760 --> 00:23:54,959 Speaker 1: we typically do find solutions. It's starting to happen in 422 00:23:55,000 --> 00:23:58,399 Speaker 1: the cement sector, in the steel sector, but it leaves 423 00:23:58,440 --> 00:24:03,320 Speaker 1: behind a very crucial question about what happens after, which 424 00:24:03,359 --> 00:24:08,080 Speaker 1: is to do with geopolitics. And that would mean only 425 00:24:08,560 --> 00:24:12,639 Speaker 1: the places that can produce a low cost barrel of oil, 426 00:24:13,000 --> 00:24:16,959 Speaker 1: which is typically Middle Eastern producers, will be the producers 427 00:24:17,080 --> 00:24:20,000 Speaker 1: producing most of the oil. That means, as a share 428 00:24:20,080 --> 00:24:25,800 Speaker 1: of the global supply, their weight becomes bigger and they 429 00:24:25,840 --> 00:24:30,159 Speaker 1: can use it as a geopolitical weapon. How do you 430 00:24:30,240 --> 00:24:34,119 Speaker 1: think about the Middle Eastern countries in an era of 431 00:24:34,520 --> 00:24:35,560 Speaker 1: peak oil demand. 432 00:24:35,960 --> 00:24:37,840 Speaker 2: I think that is right. I think if you look 433 00:24:37,840 --> 00:24:40,200 Speaker 2: at things like cost curves, which is what the industry 434 00:24:40,280 --> 00:24:43,000 Speaker 2: uses to work out who's most profitable, as you say, 435 00:24:43,000 --> 00:24:44,680 Speaker 2: the Middle East is at the bottom of the cost curve, 436 00:24:44,720 --> 00:24:47,040 Speaker 2: it's the most efficient. So I think a lot of 437 00:24:47,040 --> 00:24:50,000 Speaker 2: projections I've seen OPEC increases its share to about fifty 438 00:24:50,040 --> 00:24:52,679 Speaker 2: percent over the coming decades, which is at this stage 439 00:24:52,680 --> 00:24:55,680 Speaker 2: it's about thirty percent, so it's quite a significant increase. 440 00:24:56,400 --> 00:24:59,160 Speaker 2: One thing I'd say, though about geopolitics is that the 441 00:24:59,200 --> 00:25:02,800 Speaker 2: real power of OPEK in the Middle East within geopolitics 442 00:25:02,880 --> 00:25:06,760 Speaker 2: is about gasoline and the crucial importance of gasoline as 443 00:25:06,760 --> 00:25:10,040 Speaker 2: a consumer product that affects people's feeling of well being 444 00:25:10,359 --> 00:25:13,159 Speaker 2: and their political views and whether Joe Biden is going 445 00:25:13,200 --> 00:25:16,080 Speaker 2: to win the twenty twenty four election and all sorts 446 00:25:16,119 --> 00:25:17,000 Speaker 2: of factors like that. 447 00:25:17,359 --> 00:25:20,639 Speaker 1: Oh, that's very interesting. So you are saying, in a 448 00:25:20,680 --> 00:25:25,399 Speaker 1: world where oil demand peaks and gasoline it's not the 449 00:25:25,440 --> 00:25:29,120 Speaker 1: hot topic that a US president won't get elected if 450 00:25:29,160 --> 00:25:32,840 Speaker 1: the price of a gallon is at five dollars versus 451 00:25:32,880 --> 00:25:36,280 Speaker 1: four dollars. In that world, a barrel could be two 452 00:25:36,400 --> 00:25:39,760 Speaker 1: hundred dollars a barrel and would still not make a difference. 453 00:25:40,000 --> 00:25:43,720 Speaker 2: Well, absolutely, I think it depends on the share of 454 00:25:43,760 --> 00:25:47,280 Speaker 2: the population and the sort of pivotal political importance of 455 00:25:47,280 --> 00:25:49,760 Speaker 2: that share of the population who are using gasoline cars. 456 00:25:50,000 --> 00:25:51,440 Speaker 2: But I think if you look at a couple of 457 00:25:51,520 --> 00:25:56,639 Speaker 2: other countries, China, for instance, is an unusually non oil 458 00:25:56,680 --> 00:25:58,439 Speaker 2: dependent economy today. 459 00:25:58,840 --> 00:26:01,359 Speaker 1: It wasn't the case five to ten years ago. 460 00:26:01,840 --> 00:26:04,920 Speaker 2: Yes, but actually compared to the US, China is much 461 00:26:04,920 --> 00:26:07,600 Speaker 2: more dependent on oil imports, which you would think would 462 00:26:07,600 --> 00:26:10,800 Speaker 2: make it very vulnerable to this. But of course China 463 00:26:10,840 --> 00:26:13,800 Speaker 2: also doesn't have to worry about democratic elections and the 464 00:26:13,840 --> 00:26:17,040 Speaker 2: effect of that. But certainly there is not a sort 465 00:26:17,080 --> 00:26:20,119 Speaker 2: of sense of impending crisis that the government needs to 466 00:26:20,119 --> 00:26:23,119 Speaker 2: repair when oil prices go up, because most people are 467 00:26:23,160 --> 00:26:25,080 Speaker 2: much less exposed to oil prices than they are in 468 00:26:25,119 --> 00:26:27,840 Speaker 2: the US. One area that the US is quite unique 469 00:26:28,280 --> 00:26:34,080 Speaker 2: is that the consumer is unusually exposed to OPEC decisions. Basically, 470 00:26:34,320 --> 00:26:37,280 Speaker 2: so most of the world is not as exposed to 471 00:26:37,320 --> 00:26:40,000 Speaker 2: the volatility and oil prices as US consumers are. 472 00:26:40,240 --> 00:26:43,960 Speaker 1: Right, how do you think geopolitics will play out in 473 00:26:44,320 --> 00:26:48,119 Speaker 1: an era where demand for oil has beaked and the 474 00:26:48,160 --> 00:26:53,080 Speaker 1: political connections of gasoline prices in the US are broken. 475 00:26:53,200 --> 00:26:58,360 Speaker 2: I think as a subject that affects political outcomes to voters, 476 00:26:58,800 --> 00:27:01,960 Speaker 2: I think it will clearly that. But I think one 477 00:27:02,000 --> 00:27:05,520 Speaker 2: area that where we'll see the geopolitics being surprisingly resilient 478 00:27:06,200 --> 00:27:08,840 Speaker 2: is actually about US involvement in the Middle East. And 479 00:27:09,080 --> 00:27:11,760 Speaker 2: obviously we're quite aware of this right now because we 480 00:27:11,800 --> 00:27:13,760 Speaker 2: have a war going on in the Middle East, and 481 00:27:14,119 --> 00:27:15,919 Speaker 2: I think there is a tendency and you see this 482 00:27:16,040 --> 00:27:18,760 Speaker 2: in US politics, particularly in this era when Saudi Arabia 483 00:27:18,880 --> 00:27:22,080 Speaker 2: is becoming much less friendly to the US. You see 484 00:27:22,080 --> 00:27:24,679 Speaker 2: a lot of people in America going, why are we 485 00:27:24,760 --> 00:27:26,960 Speaker 2: so invested in the Middle East? Why are we so 486 00:27:27,000 --> 00:27:29,879 Speaker 2: involved in the Middle East? They don't share our interests. 487 00:27:30,160 --> 00:27:32,280 Speaker 2: Most of the oil from the Gulf goes East, goes 488 00:27:32,320 --> 00:27:35,560 Speaker 2: to China, and our navy is basically providing the security 489 00:27:35,600 --> 00:27:38,399 Speaker 2: detail for China's oil. Why don't we get China to 490 00:27:38,440 --> 00:27:42,840 Speaker 2: do it itself? And this is a growing groundswell of opinion. 491 00:27:42,960 --> 00:27:44,840 Speaker 2: We see this, and I think, actually, if you think 492 00:27:44,880 --> 00:27:48,080 Speaker 2: about it, it's quite easy to see why the US 493 00:27:48,160 --> 00:27:51,879 Speaker 2: is probably going to want to maintain that geopolitical setup 494 00:27:51,920 --> 00:27:55,040 Speaker 2: in the long term. They do not want China to 495 00:27:55,080 --> 00:27:59,879 Speaker 2: be providing the security detail to Gulf oil heading EA 496 00:28:00,240 --> 00:28:04,320 Speaker 2: because regardless of what happens with transport fuel road fuel, 497 00:28:04,720 --> 00:28:08,240 Speaker 2: oil is also going to remain a pretty crucial war 498 00:28:08,440 --> 00:28:11,119 Speaker 2: fuel for a long time to come. The military is 499 00:28:11,160 --> 00:28:12,679 Speaker 2: going to be one of the last to give up 500 00:28:12,680 --> 00:28:16,320 Speaker 2: oil as a transport fuel. Now, if China is providing 501 00:28:16,320 --> 00:28:19,320 Speaker 2: a security detail for oil heading to Asia, that's going 502 00:28:19,359 --> 00:28:21,560 Speaker 2: to have implications for all the other big oil consumers 503 00:28:21,600 --> 00:28:23,679 Speaker 2: in Asia. That's going to have implications for Japan, for 504 00:28:23,720 --> 00:28:26,720 Speaker 2: South Korea, for Taiwan, for all these other allies, and 505 00:28:26,760 --> 00:28:29,960 Speaker 2: that's going to upset them a great deal as a result. 506 00:28:30,119 --> 00:28:32,320 Speaker 2: I think if you look in the long geopolitics of oil, 507 00:28:32,680 --> 00:28:36,200 Speaker 2: control of these sea lines of communication is a very 508 00:28:36,240 --> 00:28:41,120 Speaker 2: important geopolitical tool. The US appreciates that a real crucial 509 00:28:41,160 --> 00:28:43,400 Speaker 2: battleground is going to be the Indian ocean. Who is 510 00:28:43,440 --> 00:28:45,280 Speaker 2: going to be the naval hedgemon there? Is it going 511 00:28:45,320 --> 00:28:48,520 Speaker 2: to be the US who has been that naval hedgemon 512 00:28:48,600 --> 00:28:51,080 Speaker 2: for decades? Is it going to be China, which is 513 00:28:51,120 --> 00:28:53,000 Speaker 2: where most of the oil are going, or of course, 514 00:28:53,120 --> 00:28:55,080 Speaker 2: is it going to be India itself, which you would 515 00:28:55,280 --> 00:28:58,880 Speaker 2: argue is the natural hedgemon in that region. It's got 516 00:28:58,880 --> 00:29:02,640 Speaker 2: the land based to maintain that, and that's actually really 517 00:29:02,680 --> 00:29:06,240 Speaker 2: going to be a very important factor throughout the coming century. 518 00:29:06,400 --> 00:29:07,720 Speaker 2: Even as Olgamander. 519 00:29:07,280 --> 00:29:10,760 Speaker 1: Clients sticking with the idea that the price of oil 520 00:29:10,840 --> 00:29:13,520 Speaker 1: will be low in a world of peak oil demand, 521 00:29:14,200 --> 00:29:17,760 Speaker 1: you could also imagine that, given prices will be low, 522 00:29:18,280 --> 00:29:21,480 Speaker 1: that the transition may slow down in certain parts. India 523 00:29:21,640 --> 00:29:24,480 Speaker 1: may think we still don't have enough battery metals, we 524 00:29:24,520 --> 00:29:27,800 Speaker 1: don't have enough lithiuman battery factories, and so we're not 525 00:29:27,880 --> 00:29:29,720 Speaker 1: going to be able to make as many electric cars. 526 00:29:30,040 --> 00:29:33,400 Speaker 1: Oil is pretty cheap. Now, let's just keep burning gasoline 527 00:29:33,400 --> 00:29:36,200 Speaker 1: for longer. How do you think about cheap oil in 528 00:29:36,280 --> 00:29:38,800 Speaker 1: a world where we will still need to reach net 529 00:29:38,880 --> 00:29:42,600 Speaker 1: zero targets and actually cut oil consumption, but the incentives 530 00:29:42,600 --> 00:29:46,000 Speaker 1: to cut oil consumption from a financial perspective will not 531 00:29:46,120 --> 00:29:46,560 Speaker 1: quite be. 532 00:29:46,560 --> 00:29:49,320 Speaker 2: There as it happens. I would actually sort of challenge 533 00:29:49,320 --> 00:29:50,959 Speaker 2: the premise a little bit of that. I think like 534 00:29:51,160 --> 00:29:55,040 Speaker 2: economists generally assume that in a world of declining demand 535 00:29:55,040 --> 00:29:57,719 Speaker 2: for a commodity, the price of that commodity will naturally 536 00:29:57,720 --> 00:29:59,960 Speaker 2: be lower. But I think actually if you think about 537 00:30:00,240 --> 00:30:02,680 Speaker 2: a little bit more. The prices don't come that. They're 538 00:30:02,720 --> 00:30:06,440 Speaker 2: not a direct outcome of demand. They're an outcome of 539 00:30:06,440 --> 00:30:10,000 Speaker 2: the interplay between supply and demand, and suppliers get to 540 00:30:10,040 --> 00:30:12,400 Speaker 2: adjust the amount of supply they produce according to the 541 00:30:12,440 --> 00:30:15,120 Speaker 2: demand that they see. And I think the classic example 542 00:30:15,120 --> 00:30:17,960 Speaker 2: of this that you'll see is of course coal coal consumption, 543 00:30:18,440 --> 00:30:20,200 Speaker 2: with what we've seen in China over the past year, 544 00:30:20,200 --> 00:30:23,280 Speaker 2: it's actually creeping up towards its sort of historic peak. 545 00:30:23,320 --> 00:30:25,600 Speaker 2: But coal consumption more or les peaked in twenty fifteen, 546 00:30:26,120 --> 00:30:31,080 Speaker 2: and coal prices have not been structurally drastically low since then. 547 00:30:31,120 --> 00:30:33,160 Speaker 2: In fact, coal prices in the trading market have often 548 00:30:33,200 --> 00:30:37,680 Speaker 2: been extremely high. And that's for fairly simple, straightforward reasons. 549 00:30:37,720 --> 00:30:40,080 Speaker 2: If you think about it, If you're a producer of 550 00:30:40,120 --> 00:30:43,760 Speaker 2: a fossil fuel and you see demand declining, then you're 551 00:30:43,760 --> 00:30:46,480 Speaker 2: going to produce less. And of course, right now, if 552 00:30:46,480 --> 00:30:50,040 Speaker 2: you go to any Saudi Aramco earnings presentation, you will 553 00:30:50,080 --> 00:30:53,200 Speaker 2: see Salur Ramco saying the world is not investing enough 554 00:30:53,240 --> 00:30:56,000 Speaker 2: in oil, and in fact you'll actually see the IA 555 00:30:56,080 --> 00:30:58,840 Speaker 2: saying the world it's investing far less in oil historically 556 00:30:58,880 --> 00:31:02,280 Speaker 2: than it has particularly considering the oil price. So the 557 00:31:02,320 --> 00:31:05,320 Speaker 2: supplies of oil are producing less of it, and they're 558 00:31:05,320 --> 00:31:08,400 Speaker 2: doing that because they want to keep prices high. Saudi Arabia, 559 00:31:08,560 --> 00:31:11,320 Speaker 2: Russia clearly want to keep prices high. So I think 560 00:31:11,360 --> 00:31:13,960 Speaker 2: the assumption that the pathnet zero is going to be 561 00:31:14,000 --> 00:31:17,720 Speaker 2: guided by low prices, I think sort of underestimates the 562 00:31:17,760 --> 00:31:21,200 Speaker 2: extent to which the suppliers of these fossil fuels can 563 00:31:21,240 --> 00:31:24,440 Speaker 2: see that the writings on the wall and actually respond accordingly. 564 00:31:25,000 --> 00:31:27,840 Speaker 1: And that also speaks to the point that many of 565 00:31:27,920 --> 00:31:32,960 Speaker 1: the Middle Eastern oil producers balance their books their budgets 566 00:31:33,400 --> 00:31:36,400 Speaker 1: at a much higher oil price. So the Arabia right 567 00:31:36,440 --> 00:31:39,360 Speaker 1: now wants one hundred dollars barrel because it wants to 568 00:31:39,360 --> 00:31:44,280 Speaker 1: spend all this money building neon and other projects, and 569 00:31:44,320 --> 00:31:47,160 Speaker 1: so there is motivation to keep those high oil prices 570 00:31:48,000 --> 00:31:50,200 Speaker 1: even just to be able to keep doing the things 571 00:31:50,200 --> 00:31:51,120 Speaker 1: that they do on a. 572 00:31:51,120 --> 00:31:54,520 Speaker 2: Day to day basis absolutely And I think a really 573 00:31:54,600 --> 00:31:57,320 Speaker 2: striking thing that you see in Saudi Arabia, and it 574 00:31:57,360 --> 00:32:00,000 Speaker 2: goes to this point, is that what are they say 575 00:32:00,040 --> 00:32:02,560 Speaker 2: spending all these profits that you know, oil is immensely 576 00:32:02,560 --> 00:32:04,800 Speaker 2: profitable for Sadu arab at the moment and it's using 577 00:32:04,840 --> 00:32:07,600 Speaker 2: it to buy football teams, it's using it to build 578 00:32:07,600 --> 00:32:09,760 Speaker 2: cities in the desert, it's using it to sort of 579 00:32:09,840 --> 00:32:12,440 Speaker 2: cut back on some of the fiscal consolidation that they've 580 00:32:12,440 --> 00:32:15,120 Speaker 2: done in recent years. What it's not doing is it's 581 00:32:15,200 --> 00:32:17,280 Speaker 2: not using very much of it to produce more oil. 582 00:32:17,720 --> 00:32:20,440 Speaker 2: And historically, when Sadi Ramco is getting the sort of 583 00:32:20,480 --> 00:32:22,920 Speaker 2: profits it's getting right now, they would be investing a 584 00:32:22,960 --> 00:32:25,600 Speaker 2: lot in future oil consumption. But if you actually break 585 00:32:25,640 --> 00:32:28,520 Speaker 2: down what Sadi Ramco is spending on in its capex, 586 00:32:28,920 --> 00:32:31,040 Speaker 2: quite a lot of it is going on natural gas 587 00:32:31,040 --> 00:32:33,520 Speaker 2: for local supply, A surprisingly large amount of it is 588 00:32:33,520 --> 00:32:37,120 Speaker 2: actually going on energy transition projects, on hydrogen and renewables. 589 00:32:37,280 --> 00:32:39,760 Speaker 2: Quite a lot of this is going on chemicals and refining, 590 00:32:39,880 --> 00:32:41,640 Speaker 2: and if you look at the spending that it's doing 591 00:32:41,720 --> 00:32:43,560 Speaker 2: at the moment, a lot of it is investing in 592 00:32:43,640 --> 00:32:48,240 Speaker 2: offshore refineries basically as future consumption for Saudi oil. But 593 00:32:48,440 --> 00:32:50,760 Speaker 2: a really rather small proportion of it is going on 594 00:32:50,840 --> 00:32:55,520 Speaker 2: actually increasing supply of oil. And of course Ramco always 595 00:32:55,520 --> 00:32:57,240 Speaker 2: needs to be increased in supply of oil because it's 596 00:32:57,400 --> 00:33:00,120 Speaker 2: existing oil fields are always declining. And if you're not 597 00:33:00,160 --> 00:33:04,200 Speaker 2: investing in increasing supply, then supplies a whole declines. If 598 00:33:04,240 --> 00:33:07,480 Speaker 2: you look at the behavior of every oil producer in 599 00:33:07,520 --> 00:33:09,800 Speaker 2: the world out there, even there's this big deal in 600 00:33:10,080 --> 00:33:14,200 Speaker 2: the market at the moment Exomobile buying Pioneer, it's buying 601 00:33:14,280 --> 00:33:17,280 Speaker 2: existing production. It's buying a shale oil producer. What it's 602 00:33:17,400 --> 00:33:21,080 Speaker 2: not doing is investing heavily in these big, long term 603 00:33:21,240 --> 00:33:24,200 Speaker 2: offshore new oil fields, some of which in place like 604 00:33:24,240 --> 00:33:27,400 Speaker 2: Guiana have been very successful for Exon. But by doing 605 00:33:27,680 --> 00:33:31,320 Speaker 2: M and A of another company, it's basically buying existing production. 606 00:33:31,480 --> 00:33:32,880 Speaker 2: Is not increasing production. 607 00:33:33,360 --> 00:33:36,280 Speaker 1: We're talking about pic oil demand. But in the moment 608 00:33:36,320 --> 00:33:39,400 Speaker 1: that we sit, there is a spring in the step 609 00:33:39,440 --> 00:33:42,680 Speaker 1: of the fossil fuel industries, especially the oil and gas industry. 610 00:33:43,320 --> 00:33:46,680 Speaker 1: And we will be having COP twenty eight in the 611 00:33:46,800 --> 00:33:50,760 Speaker 1: UEE an oil and gas producer, and that will be 612 00:33:51,000 --> 00:33:55,720 Speaker 1: headed by the president who is also a CEO of 613 00:33:56,120 --> 00:33:58,600 Speaker 1: their national oil company. How do you think that's going 614 00:33:58,640 --> 00:34:01,800 Speaker 1: to affect climate diploma to see ad coptently. 615 00:34:01,360 --> 00:34:05,800 Speaker 2: It Clearly you've seen a shift. As you say, there 616 00:34:05,880 --> 00:34:09,239 Speaker 2: is more of a spring in the step for oil producers. 617 00:34:09,520 --> 00:34:11,480 Speaker 2: There is that sense that they have the wind at 618 00:34:11,520 --> 00:34:14,640 Speaker 2: their back. But again I think if you look at 619 00:34:14,840 --> 00:34:20,120 Speaker 2: actual production, OPEC plus has cut production over the last 620 00:34:20,120 --> 00:34:22,839 Speaker 2: twelve months, if they've introduced about four or five million 621 00:34:22,880 --> 00:34:25,560 Speaker 2: barrels a day of oil production cuts over the last 622 00:34:25,560 --> 00:34:28,359 Speaker 2: twelve months, and the oil price is basically exactly where 623 00:34:28,360 --> 00:34:31,720 Speaker 2: it was twelve months ago. It's moved around over that period, 624 00:34:31,719 --> 00:34:34,759 Speaker 2: but it's actually where it was. So I think the 625 00:34:34,800 --> 00:34:37,000 Speaker 2: thing that I would sort of worry about more with 626 00:34:37,040 --> 00:34:39,840 Speaker 2: the energy transition is actually not really to do with 627 00:34:39,920 --> 00:34:42,480 Speaker 2: the interplay and the energy market at all. It's more 628 00:34:42,480 --> 00:34:45,399 Speaker 2: to do with trade factors. I think that's the real 629 00:34:45,440 --> 00:34:47,440 Speaker 2: threat to the energy transition at the moment. It's actually 630 00:34:47,480 --> 00:34:51,080 Speaker 2: much more the sort of rising levels of protections and 631 00:34:51,080 --> 00:34:53,720 Speaker 2: that we're seeing that a really choking off the market 632 00:34:53,960 --> 00:34:56,680 Speaker 2: in renewables equipment. We're seeing that in the way that 633 00:34:56,719 --> 00:34:59,800 Speaker 2: the US is apply more tariffs to Chinese solar equipment, 634 00:35:00,000 --> 00:35:04,360 Speaker 2: the European Union is investigating Chinese electric vehicles, and that 635 00:35:04,360 --> 00:35:07,360 Speaker 2: sort of thing. That's actually I think the bigger threat, 636 00:35:07,400 --> 00:35:10,960 Speaker 2: because I think the money is actually already moving away 637 00:35:11,280 --> 00:35:13,680 Speaker 2: from oil and towards renewables. I think if you look 638 00:35:13,680 --> 00:35:17,439 Speaker 2: at investment in upstream oil, there's not enough investment going 639 00:35:17,440 --> 00:35:21,560 Speaker 2: into fossil fuels to maintain the demand levels that the 640 00:35:21,600 --> 00:35:23,480 Speaker 2: fossil fuel industry is arguing. 641 00:35:23,560 --> 00:35:26,120 Speaker 1: We're going to say, and so, if on the numbers 642 00:35:26,200 --> 00:35:28,360 Speaker 1: case that you make, and you've made this in a 643 00:35:28,640 --> 00:35:31,799 Speaker 1: number of columns that you've written over the years, oil 644 00:35:31,840 --> 00:35:37,400 Speaker 1: producers are not investing more money into new oil production, 645 00:35:37,680 --> 00:35:41,960 Speaker 1: into significant oil production. Yet on a rhetorical level, they 646 00:35:42,040 --> 00:35:46,600 Speaker 1: keep saying the world is not investing enough in more 647 00:35:46,600 --> 00:35:50,239 Speaker 1: oil production. You say that in between the lines, you're 648 00:35:50,280 --> 00:35:54,080 Speaker 1: reading this as their admission that actually, big oil is 649 00:35:54,160 --> 00:35:57,040 Speaker 1: kind of here, is going to come soon, and we 650 00:35:57,239 --> 00:36:00,239 Speaker 1: just are starting to prepare for the world after. But 651 00:36:00,520 --> 00:36:02,279 Speaker 1: while we do that, we don't really want to tell 652 00:36:02,320 --> 00:36:03,399 Speaker 1: anybody about it. 653 00:36:03,760 --> 00:36:07,160 Speaker 2: I think it's I think it's very curious, and I 654 00:36:07,160 --> 00:36:10,319 Speaker 2: don't have like a conspiratorial theory that they're lying to 655 00:36:10,400 --> 00:36:12,640 Speaker 2: us about what they really think. But there's this concept 656 00:36:12,640 --> 00:36:16,760 Speaker 2: in economics called revealed preference where you'll say to people, 657 00:36:17,000 --> 00:36:18,680 Speaker 2: do you want to eat some healthy food or do 658 00:36:18,719 --> 00:36:21,640 Speaker 2: you want to eat some sugary delights? And people say, oh, 659 00:36:21,800 --> 00:36:23,839 Speaker 2: I believe in eating healthy food, And then you put 660 00:36:23,880 --> 00:36:25,239 Speaker 2: a bunch of food in front of them and they 661 00:36:25,280 --> 00:36:28,600 Speaker 2: just eat all the chocolate, and you call that revealed preference. 662 00:36:28,640 --> 00:36:30,880 Speaker 2: There's the thing that you say that you want, and 663 00:36:30,880 --> 00:36:33,040 Speaker 2: then this is the thing that you actually do. And 664 00:36:33,120 --> 00:36:36,040 Speaker 2: I think you see an example of revealed preference in 665 00:36:36,080 --> 00:36:39,000 Speaker 2: the oil market, because, as I say, the last time 666 00:36:39,719 --> 00:36:42,600 Speaker 2: of prices were over one hundred dollars a barrel, capital 667 00:36:42,640 --> 00:36:46,600 Speaker 2: investment in upstream oil was close to a trillion dollars 668 00:36:46,600 --> 00:36:48,960 Speaker 2: a year, I think, sort of eight hundred to nine 669 00:36:49,040 --> 00:36:53,200 Speaker 2: hundred billion dollars a year. Right now, oil is again 670 00:36:53,320 --> 00:36:56,239 Speaker 2: around one hundred dollars a barrel, and capital investment is 671 00:36:56,280 --> 00:36:59,640 Speaker 2: about five hundred billion dollars a year. It's significantly lower 672 00:37:00,000 --> 00:37:02,919 Speaker 2: if you look at the way that they're investing. They're 673 00:37:02,960 --> 00:37:06,520 Speaker 2: not able to justify the level of investments within their 674 00:37:06,560 --> 00:37:09,759 Speaker 2: own fields to meet this supply, and no one is 675 00:37:09,800 --> 00:37:12,960 Speaker 2: finding the level of investments that they can justify. And 676 00:37:13,000 --> 00:37:16,760 Speaker 2: I think that is an acknowledgment that really oil demand 677 00:37:16,800 --> 00:37:19,320 Speaker 2: is not going to zero, but they're sort of projections 678 00:37:19,360 --> 00:37:21,360 Speaker 2: where it goes from it's sort one hundred million barrels 679 00:37:21,360 --> 00:37:23,799 Speaker 2: a day to sort of eighty million barrels a day 680 00:37:23,840 --> 00:37:27,160 Speaker 2: over the next decade, and further down beyond that. I 681 00:37:27,160 --> 00:37:28,800 Speaker 2: think that that's perfectly credible. 682 00:37:29,520 --> 00:37:31,279 Speaker 1: When you look at the numbers and we've gone through 683 00:37:31,280 --> 00:37:35,239 Speaker 1: so many of them, there's always a case, especially in 684 00:37:35,239 --> 00:37:38,160 Speaker 1: the oil markets, to pick a slice of the numbers 685 00:37:38,200 --> 00:37:40,600 Speaker 1: and make a case that would be completely opposite to 686 00:37:40,640 --> 00:37:44,160 Speaker 1: the one you have made today. But it is fascinating 687 00:37:44,280 --> 00:37:48,520 Speaker 1: that the longer term trends are starting to show up 688 00:37:48,560 --> 00:37:51,319 Speaker 1: in such interesting ways. And so I'm glad you're on 689 00:37:51,360 --> 00:37:54,239 Speaker 1: the Pea Coyle beat and I look forward to your 690 00:37:54,239 --> 00:37:57,560 Speaker 1: future columns. Hopefully you're not wrong, and if you're wrong, 691 00:37:57,600 --> 00:37:59,279 Speaker 1: then you'll tell us why you were wrong, and you'll 692 00:37:59,280 --> 00:38:02,200 Speaker 1: make a new prediction. So thank you for all that insight. 693 00:38:02,400 --> 00:38:03,600 Speaker 2: Thank you, Acsha, thank you. 694 00:38:10,960 --> 00:38:14,239 Speaker 1: In researching my book Climate Capitalism, I kept coming back 695 00:38:14,280 --> 00:38:17,879 Speaker 1: to the years nineteen seventy three and twenty fifteen. That's 696 00:38:17,920 --> 00:38:20,839 Speaker 1: because the OPEC oil embargo in nineteen seventy three kicked 697 00:38:20,880 --> 00:38:24,160 Speaker 1: off a race to develop alternative energy sources such as 698 00:38:24,200 --> 00:38:28,320 Speaker 1: batteries and solar. Decades later, when the world finally agreed 699 00:38:28,360 --> 00:38:31,439 Speaker 1: on a climate goal in Paris in twenty fifteen, those 700 00:38:31,520 --> 00:38:35,560 Speaker 1: green technologies were ready to work at scale. Now, fifty 701 00:38:35,640 --> 00:38:38,879 Speaker 1: years later from that pivotal year and eight years after 702 00:38:38,920 --> 00:38:42,680 Speaker 1: the Paris Agreement, it's clear those clean energy technologies are 703 00:38:42,760 --> 00:38:47,839 Speaker 1: finally eating into the world's addiction to fossil fields. Thank 704 00:38:47,880 --> 00:38:50,320 Speaker 1: you for listening to Zero. If you liked this episode, 705 00:38:50,360 --> 00:38:52,600 Speaker 1: please take a moment to rate or review the show 706 00:38:52,719 --> 00:38:56,520 Speaker 1: on Apple Podcasts and Spotify. It really helps and if 707 00:38:56,560 --> 00:38:58,920 Speaker 1: you write a review, we might read it on a 708 00:38:58,920 --> 00:39:02,400 Speaker 1: future episode. Share this episode with a friend or with 709 00:39:02,600 --> 00:39:04,920 Speaker 1: someone who is a fan of the TV show Dallas. 710 00:39:05,680 --> 00:39:07,800 Speaker 1: You can get in touch at zero port at Bloomberg 711 00:39:07,800 --> 00:39:11,480 Speaker 1: dot Net. Zero's producer is Oscar Boyd and senior producer 712 00:39:11,560 --> 00:39:15,080 Speaker 1: is Christine Driskell. Our theme music is composed by wonderly 713 00:39:16,000 --> 00:39:19,919 Speaker 1: Special Thanks as always to Kira bindram i'm Akshatrati. Back 714 00:39:20,040 --> 00:39:20,520 Speaker 1: next week.