1 00:00:02,520 --> 00:00:08,320 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Let's go to Texas. 2 00:00:08,320 --> 00:00:10,360 Speaker 1: Now back to Houston where Sarah week By, S and 3 00:00:10,440 --> 00:00:13,040 Speaker 1: P five hundred s and Peak Loobal is taking place. 4 00:00:13,080 --> 00:00:15,840 Speaker 1: It's one of the biggest energy conferences of the year. 5 00:00:16,400 --> 00:00:19,680 Speaker 1: Alex Steel of a Bloomberg TV just spoke with John Ketchum, 6 00:00:19,680 --> 00:00:22,239 Speaker 1: CEO Next Era Energy. She's sitting down with another big 7 00:00:22,320 --> 00:00:25,920 Speaker 1: name and energy lord, John Brown, former CEO of BP. Hey, Alex, 8 00:00:27,960 --> 00:00:28,800 Speaker 1: all right, guys, thanks all. 9 00:00:28,840 --> 00:00:30,920 Speaker 2: I really appreciate it. It's a tough tape today, to 10 00:00:31,000 --> 00:00:34,000 Speaker 2: be sure, Laura. John Brown, Yes, former CEO of VP, 11 00:00:34,120 --> 00:00:36,600 Speaker 2: but also now chairman of Beyond net Zero as a 12 00:00:36,600 --> 00:00:40,360 Speaker 2: climate growth equity venture established in partnership with General Atlantic. 13 00:00:40,600 --> 00:00:43,800 Speaker 2: Also a tough tape for anything Beyond net zero right now. 14 00:00:44,080 --> 00:00:46,080 Speaker 2: Great to see you. Thank you so much for being here, 15 00:00:46,120 --> 00:00:50,400 Speaker 2: Johncial markets were falling on a bed. Oil prices are 16 00:00:50,440 --> 00:00:53,880 Speaker 2: higher lower. Excuse me. Everyone seems to be panicking about growth, 17 00:00:54,120 --> 00:00:58,639 Speaker 2: about recession fears, tariff fears. You have been in this industry, 18 00:00:58,680 --> 00:01:01,320 Speaker 2: you've been a CEO. What is it like right now? 19 00:01:01,840 --> 00:01:05,959 Speaker 3: Well, right now, it's Uncertainty is as high as I 20 00:01:06,000 --> 00:01:09,920 Speaker 3: can remember it since my entire career, which goes back 21 00:01:10,319 --> 00:01:12,320 Speaker 3: a long way to the sixties. 22 00:01:13,360 --> 00:01:15,800 Speaker 2: That's a long long way, so you've lived through a lot. 23 00:01:16,680 --> 00:01:19,520 Speaker 2: What would make it more certain? What is the biggest uncertainty? 24 00:01:19,800 --> 00:01:23,080 Speaker 3: Well, I think people are playing with many multiple uncertainties 25 00:01:23,400 --> 00:01:26,400 Speaker 3: in different jurisdictions in the world, you know, but the 26 00:01:26,520 --> 00:01:29,920 Speaker 3: underlying one is, you know, does this impact the world? 27 00:01:30,000 --> 00:01:33,959 Speaker 3: And can it? Would it change overall growth? Could the 28 00:01:33,959 --> 00:01:37,160 Speaker 3: growth stop in the world. I personally think it's unlikely, 29 00:01:37,240 --> 00:01:40,320 Speaker 3: but who knows. So I think people want to see 30 00:01:40,360 --> 00:01:44,679 Speaker 3: some certainty, and of course that's very tough to get 31 00:01:45,120 --> 00:01:48,000 Speaker 3: as each of these things change. You know, everyone's being 32 00:01:48,040 --> 00:01:54,040 Speaker 3: affected at the moment by uncertainty in demand, affecting oil prices, markets, 33 00:01:54,640 --> 00:01:58,600 Speaker 3: so people want to wait and see is the weight. 34 00:01:58,400 --> 00:02:02,640 Speaker 2: And see going to then become a continued search for 35 00:02:02,720 --> 00:02:07,559 Speaker 2: beyond net zero an energy transition decarbonization. Is that still 36 00:02:07,640 --> 00:02:09,840 Speaker 2: something that the energy community is committed to. 37 00:02:10,400 --> 00:02:14,120 Speaker 3: Well, we think it is obviously will be as pragmatic 38 00:02:14,200 --> 00:02:18,280 Speaker 3: as anybody, but we've found over the last few years 39 00:02:18,360 --> 00:02:24,520 Speaker 3: by investing in things that improve efficiency and effectiveness, we 40 00:02:24,840 --> 00:02:28,040 Speaker 3: can invest for all seasons. We don't have to worry 41 00:02:28,080 --> 00:02:31,840 Speaker 3: about whether a government supporting something or not supporting it, 42 00:02:32,200 --> 00:02:35,160 Speaker 3: whether giving us tax breaks or not tax breaks. We 43 00:02:35,360 --> 00:02:38,000 Speaker 3: just look at things that are commercial and have pretty 44 00:02:38,000 --> 00:02:41,320 Speaker 3: good returns, and they're in efficiency, as I said, and 45 00:02:41,360 --> 00:02:44,600 Speaker 3: actually in things like the circular economy, doing more with 46 00:02:44,680 --> 00:02:48,800 Speaker 3: what we've already used and redoing it is great for 47 00:02:49,040 --> 00:02:52,400 Speaker 3: efficiency and effectiveness. But all these things are great for 48 00:02:52,440 --> 00:02:56,800 Speaker 3: the environment because they reduce carbon dioxide output. 49 00:02:57,160 --> 00:02:58,919 Speaker 2: Is that a different message than a couple years ago 50 00:02:58,960 --> 00:03:00,920 Speaker 2: where it would be like, we need to reduce carbon 51 00:03:01,240 --> 00:03:03,239 Speaker 2: emissions because it's good for the environment. 52 00:03:03,639 --> 00:03:07,480 Speaker 3: Well, we also believe that, but we've also been we've 53 00:03:07,480 --> 00:03:09,919 Speaker 3: been do you think can be true? We can or 54 00:03:09,960 --> 00:03:13,720 Speaker 3: they are. I mean it's a virtual coincidence. But you know, 55 00:03:13,760 --> 00:03:18,800 Speaker 3: we're an investor not in heavy assets. We're asset light. 56 00:03:19,400 --> 00:03:23,200 Speaker 3: So we look at the way software and today there's 57 00:03:23,560 --> 00:03:26,639 Speaker 3: what a choice we have of that with generative AI, 58 00:03:27,880 --> 00:03:30,200 Speaker 3: how it can make things better for the world and 59 00:03:30,280 --> 00:03:36,480 Speaker 3: thereby reduce greenhouse gas emissions, thereby reduce the worst impacts 60 00:03:37,200 --> 00:03:40,600 Speaker 3: of climate change. And we'd like to do our bit 61 00:03:40,680 --> 00:03:44,360 Speaker 3: in that we're not big enough to affect the whole world. 62 00:03:44,760 --> 00:03:46,840 Speaker 3: What can you do with three and a half billion dollars. 63 00:03:48,120 --> 00:03:51,880 Speaker 3: You can't do as much as you can with three 64 00:03:51,880 --> 00:03:52,640 Speaker 3: and a half trillion. 65 00:03:53,200 --> 00:03:56,680 Speaker 2: This is very true. Are there certain new energies or 66 00:03:56,760 --> 00:03:59,840 Speaker 2: alternative energies right now where the value is really good? 67 00:04:00,840 --> 00:04:05,640 Speaker 3: Yes, their energies. So wind and solar and batteries have 68 00:04:05,680 --> 00:04:08,920 Speaker 3: come a long way and they are now actually really 69 00:04:09,480 --> 00:04:15,240 Speaker 3: cost competitive sources of energy. Cost competitive for people who 70 00:04:15,400 --> 00:04:19,400 Speaker 3: want to diversify, cost competitive for people who don't have 71 00:04:20,000 --> 00:04:24,040 Speaker 3: energy in their nation. You know, these are really important 72 00:04:24,080 --> 00:04:27,480 Speaker 3: things for the future. So this is not about subsidies. 73 00:04:27,960 --> 00:04:30,080 Speaker 3: It's about economics. 74 00:04:30,360 --> 00:04:33,920 Speaker 2: The other side would say, or a counter argument would be, oh, well, 75 00:04:33,920 --> 00:04:37,200 Speaker 2: it's intermittent and we need the base loads of nuclear 76 00:04:37,320 --> 00:04:39,720 Speaker 2: or natural gas or call the supplement. How do you 77 00:04:39,760 --> 00:04:40,360 Speaker 2: guys view it? 78 00:04:41,200 --> 00:04:43,880 Speaker 3: You need all of the above. You know, wind and 79 00:04:43,920 --> 00:04:49,120 Speaker 3: solar with batteries can produce effective base load supply depending 80 00:04:49,120 --> 00:04:52,720 Speaker 3: on where you are. One size, I'm afraid doesn't fit 81 00:04:52,800 --> 00:04:55,600 Speaker 3: all and you know you can make loss of swiping statements, 82 00:04:55,640 --> 00:04:59,080 Speaker 3: but it all depends on the details. But actually, you know, 83 00:04:59,360 --> 00:05:02,760 Speaker 3: even in the U, you know the wind and sun 84 00:05:03,000 --> 00:05:07,520 Speaker 3: are out of sync between Arizona and New Mexico, so 85 00:05:07,880 --> 00:05:10,080 Speaker 3: you know, if you add the two together you could 86 00:05:10,120 --> 00:05:14,280 Speaker 3: produce great semi bostload supplies for California. 87 00:05:15,080 --> 00:05:18,120 Speaker 2: So it's been a tough lesson for the energy shift 88 00:05:18,120 --> 00:05:21,360 Speaker 2: transition over the last few years with the war in Ukraine, 89 00:05:21,600 --> 00:05:25,320 Speaker 2: along with now President trump policies, the inflation that we 90 00:05:25,440 --> 00:05:28,039 Speaker 2: got as well. Are you getting an indication that on 91 00:05:28,080 --> 00:05:32,640 Speaker 2: the margin abandoned oil and gas areas or areas that 92 00:05:32,680 --> 00:05:36,160 Speaker 2: were too risky or something might become viable again. 93 00:05:36,560 --> 00:05:39,560 Speaker 3: So first of all, no one abandoned oil and gas 94 00:05:40,000 --> 00:05:43,880 Speaker 3: or coal. I mean coal demand has been kind of 95 00:05:43,920 --> 00:05:46,800 Speaker 3: flat for the last ten years, so people forget that. 96 00:05:47,400 --> 00:05:51,159 Speaker 3: And oil has been rising roughly at a million barrels 97 00:05:51,200 --> 00:05:54,840 Speaker 3: a ay a year for a long time, and gas 98 00:05:55,120 --> 00:06:00,720 Speaker 3: at one hundred billion cubic meters a year rules of thumb, 99 00:06:01,160 --> 00:06:04,479 Speaker 3: and they carry on. So we've had a lot of supply, 100 00:06:05,200 --> 00:06:08,400 Speaker 3: and oil and gas will remain part of the energy 101 00:06:08,520 --> 00:06:12,240 Speaker 3: mix for a very very long time because there's nothing 102 00:06:12,279 --> 00:06:15,800 Speaker 3: to substitute them. So some things will open up, but 103 00:06:16,040 --> 00:06:20,480 Speaker 3: opening up is about the price of energy, and it 104 00:06:20,520 --> 00:06:23,640 Speaker 3: has to be competitive pricing, and it has to be 105 00:06:23,680 --> 00:06:26,280 Speaker 3: about your sense of the risk you're prepared to take. 106 00:06:26,680 --> 00:06:28,480 Speaker 3: In the case of oil, you have to be sure 107 00:06:28,839 --> 00:06:31,560 Speaker 3: that whatever price you think you're going to produce at 108 00:06:32,160 --> 00:06:35,560 Speaker 3: is going to survive for twenty thirty years, and so 109 00:06:35,760 --> 00:06:37,920 Speaker 3: that's always a big consideration. 110 00:06:38,360 --> 00:06:40,599 Speaker 2: Yeah, and the curve has been changing quite rapidly. 111 00:06:41,000 --> 00:06:42,240 Speaker 3: It changes daily. Yeah. 112 00:06:42,279 --> 00:06:44,080 Speaker 2: There was a report from the UK government that they 113 00:06:44,160 --> 00:06:47,760 Speaker 2: unveiled proposals that could use a tax burden and offshore 114 00:06:47,839 --> 00:06:50,719 Speaker 2: oil and gas. They'd still ban any new leases, but 115 00:06:50,760 --> 00:06:53,640 Speaker 2: they could use that tax burden. Is that a signal, Like, 116 00:06:53,680 --> 00:06:55,359 Speaker 2: what does that tell us? I thought the UK was 117 00:06:55,400 --> 00:06:56,479 Speaker 2: going to be like all wind. 118 00:06:57,279 --> 00:06:59,640 Speaker 3: No, it can't be all wind, and it can't be 119 00:06:59,680 --> 00:07:02,240 Speaker 3: all I wish it could be all solar. 120 00:07:02,400 --> 00:07:03,240 Speaker 2: Definitely, not solar. 121 00:07:04,040 --> 00:07:06,960 Speaker 3: Well, no, some Actually as time goes by, the solar 122 00:07:07,040 --> 00:07:11,000 Speaker 3: is better even in cloudy conditions. So it's got to 123 00:07:11,000 --> 00:07:15,120 Speaker 3: be a mix. The key thing is diversification, you know, diversification. 124 00:07:15,240 --> 00:07:17,800 Speaker 3: If one thing goes wrong, you've got another thing. If 125 00:07:17,840 --> 00:07:20,520 Speaker 3: geopolitics gets on the way, you can't get electrics d 126 00:07:20,680 --> 00:07:25,440 Speaker 3: from a connector or gas from imports. You need diversification. 127 00:07:25,480 --> 00:07:28,600 Speaker 3: It's what Winston Churchill said, the only point of security, 128 00:07:28,920 --> 00:07:34,160 Speaker 3: the only key of security is diversification. So making sure 129 00:07:34,200 --> 00:07:37,120 Speaker 3: that what remains in the north Sea, which is not 130 00:07:37,200 --> 00:07:40,200 Speaker 3: a lot. It's really come let's at its way past 131 00:07:40,240 --> 00:07:44,200 Speaker 3: its best is used appropriately is probably a good thing. 132 00:07:44,840 --> 00:07:48,600 Speaker 2: So regionally, when we talked about the how you guys 133 00:07:48,600 --> 00:07:52,080 Speaker 2: invest right like asset light, really about the circular economy 134 00:07:52,440 --> 00:07:56,400 Speaker 2: where regionally is there the best opportunity for that. 135 00:07:57,040 --> 00:08:00,560 Speaker 3: So we've focused on really quite big chunk of the world, 136 00:08:00,600 --> 00:08:04,320 Speaker 3: the United States. It's not by no means the majority 137 00:08:04,360 --> 00:08:10,000 Speaker 3: of investments Europe subs are Africa. So all of these 138 00:08:10,040 --> 00:08:14,160 Speaker 3: areas have different things you can invest in depending on 139 00:08:14,440 --> 00:08:18,240 Speaker 3: the particular nature of the region. You know, is it 140 00:08:18,360 --> 00:08:23,120 Speaker 3: long or short energy, what is its what does it 141 00:08:23,200 --> 00:08:26,560 Speaker 3: really want to do, what's its ambition in life? And 142 00:08:26,640 --> 00:08:30,240 Speaker 3: it changes over time, and so you've got to be pragmatic, 143 00:08:30,400 --> 00:08:33,959 Speaker 3: got to work these different places to see what's really 144 00:08:33,960 --> 00:08:34,319 Speaker 3: good for. 145 00:08:34,280 --> 00:08:37,160 Speaker 2: You or it changed quickly, as in the United States, 146 00:08:37,240 --> 00:08:39,080 Speaker 2: So what would be good investments right now in the 147 00:08:39,160 --> 00:08:42,320 Speaker 2: US where a lot of the uncertainty you could argue 148 00:08:42,400 --> 00:08:43,439 Speaker 2: is originating from. 149 00:08:43,520 --> 00:08:46,400 Speaker 3: Well, what's changed, of course is the way in which 150 00:08:46,440 --> 00:08:51,360 Speaker 3: the federal government is looking at these investments, and that 151 00:08:51,960 --> 00:08:56,320 Speaker 3: one should expectan governments change. You know, governments tend to 152 00:08:56,880 --> 00:08:59,280 Speaker 3: I always like to think that what governments do for 153 00:08:59,320 --> 00:09:03,880 Speaker 3: the energy business is kind of temporary, and they come 154 00:09:03,920 --> 00:09:07,839 Speaker 3: and they go, and there are long cycles of change. 155 00:09:08,160 --> 00:09:10,680 Speaker 3: It doesn't change what has to be done over the 156 00:09:10,720 --> 00:09:15,079 Speaker 3: long term. Obviously, if you've got public market investors, you've 157 00:09:15,080 --> 00:09:18,040 Speaker 3: got to worry about them quarter by quarter. We're in 158 00:09:18,040 --> 00:09:20,960 Speaker 3: the private markets, we can take a longer term view. 159 00:09:21,480 --> 00:09:24,600 Speaker 3: But long term it's clear. You know, the world needs 160 00:09:24,640 --> 00:09:29,880 Speaker 3: more energy. It moves fifty million people out of poverty 161 00:09:29,960 --> 00:09:33,360 Speaker 3: every year by getting access to energy. It's good for 162 00:09:33,400 --> 00:09:36,600 Speaker 3: the climate if it's done in the right way. And 163 00:09:36,840 --> 00:09:40,800 Speaker 3: remember making sure we don't are not subject to climate change. 164 00:09:41,080 --> 00:09:44,360 Speaker 3: It's not about saving the planet, it's about saving humanity 165 00:09:44,840 --> 00:09:48,000 Speaker 3: from being ravaged by what's going on around them. 166 00:09:48,280 --> 00:09:50,679 Speaker 2: A different voice than what we normally hear at Sarah. 167 00:09:50,960 --> 00:09:53,600 Speaker 2: I really appreciate John. Thank you very much, Laura, John Brown. 168 00:09:54,000 --> 00:09:56,959 Speaker 2: Of course he's chairman beyond net Zereal guys. I'll send 169 00:09:56,960 --> 00:09:57,760 Speaker 2: it back to you, all. 170 00:09:57,679 --> 00:10:00,400 Speaker 1: Right, Thanks so much, Alex, do you appreciate it? Once again? 171 00:10:00,520 --> 00:10:03,280 Speaker 1: Alex Steele out there at Sarah Week in Houston. Lord 172 00:10:03,320 --> 00:10:06,040 Speaker 1: John Brown, the former CEO of BP. For more of 173 00:10:06,080 --> 00:10:08,480 Speaker 1: our Sarah Week coverage, check out our live blog on 174 00:10:08,480 --> 00:10:12,080 Speaker 1: the Bloomberg Terminal and for Day two tomorrow as well.