1
00:00:13,960 --> 00:00:17,440
Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast.

2
00:00:17,560 --> 00:00:19,880
Speaker 1: My name is Mike Reagan. I'm a senior editor at

3
00:00:19,880 --> 00:00:23,880
Speaker 1: Bloomberg and I'm gonna higher across acid reporter with Bloomberg.

4
00:00:24,360 --> 00:00:27,120
Speaker 1: And this week on the show, well, that red hot

5
00:00:27,160 --> 00:00:30,240
Speaker 1: inflation is proving to be the biggest story in markets

6
00:00:30,280 --> 00:00:34,080
Speaker 1: this year, and obviously energy prices are a huge part

7
00:00:34,080 --> 00:00:36,280
Speaker 1: of it. So we're going to tap the brain of

8
00:00:36,280 --> 00:00:39,360
Speaker 1: an expert who The New York Times calls quote America's

9
00:00:39,479 --> 00:00:44,760
Speaker 1: most influential energy pundit, but Bill Downa first, I need

10
00:00:44,800 --> 00:00:48,919
Speaker 1: to talk to Bloomberg's most influential markets fund in you.

11
00:00:49,680 --> 00:00:52,080
Speaker 1: But you, I'm very jealous. You're going to London next week?

12
00:00:52,120 --> 00:00:54,040
Speaker 1: What is up with that? Am my more influential than

13
00:00:54,080 --> 00:00:59,560
Speaker 1: you are. I'm starting your bone there. You know you can? Yeah, yeah, yeah, yeah,

14
00:00:59,600 --> 00:01:01,480
Speaker 1: I am. I am going to London and I'm so

15
00:01:01,520 --> 00:01:04,840
Speaker 1: excited to see all of the London colleagues I've never

16
00:01:04,920 --> 00:01:07,360
Speaker 1: even met in real life, and I've never been to

17
00:01:07,400 --> 00:01:10,280
Speaker 1: the Bloomberg golfice there, so um. But then at the

18
00:01:10,400 --> 00:01:11,840
Speaker 1: end of my trip, I'm going to a wedding in

19
00:01:11,880 --> 00:01:15,040
Speaker 1: a castle. Oh that's cool. What's the name of the castle.

20
00:01:15,800 --> 00:01:17,920
Speaker 1: I have no idea. I think actually people live in it,

21
00:01:18,040 --> 00:01:21,679
Speaker 1: so might not have a name. It's not where it's

22
00:01:21,680 --> 00:01:27,160
Speaker 1: not where the Queen's living, is it. I think it's

23
00:01:27,160 --> 00:01:29,840
Speaker 1: a royal adjacent wedding. Yes, do you have one of those?

24
00:01:29,920 --> 00:01:32,960
Speaker 1: You need one of those hats? Fascinating It's called a fascinating. Yeah.

25
00:01:32,959 --> 00:01:36,120
Speaker 1: I wish I could pull that off. But yeah, and

26
00:01:36,240 --> 00:01:39,080
Speaker 1: maybe I need to go shopping for a fascinating And

27
00:01:39,120 --> 00:01:41,000
Speaker 1: you also need to go to the myth reum in

28
00:01:41,040 --> 00:01:44,120
Speaker 1: the basement of the Bloomberg building, the temple to the

29
00:01:44,240 --> 00:01:48,280
Speaker 1: Roman god Mithros. Yes, I heard about that. Yeah, then

30
00:01:48,320 --> 00:01:51,720
Speaker 1: you'll be at a castle and a Roman temple. You'll

31
00:01:51,160 --> 00:01:54,280
Speaker 1: see that that London has to offer. Yeah, how cool

32
00:01:54,320 --> 00:01:57,480
Speaker 1: is that? But I want to bring in our our

33
00:01:57,520 --> 00:02:00,240
Speaker 1: guests this week. You just introduced him and want to

34
00:02:00,240 --> 00:02:03,880
Speaker 1: welcome Daniel Jurgen. He's the vice chairman at SMP Global

35
00:02:04,240 --> 00:02:07,440
Speaker 1: and he's also the author of the New Map Energy

36
00:02:07,600 --> 00:02:10,960
Speaker 1: Climate and the Clash of Nations. Welcome to the podcast.

37
00:02:11,480 --> 00:02:14,200
Speaker 1: Glad to join you both. Thank you. I have to

38
00:02:14,280 --> 00:02:17,200
Speaker 1: say your team sent over a copy of your book

39
00:02:17,240 --> 00:02:20,839
Speaker 1: before the podcast, and I highly highly recommended. I love

40
00:02:20,919 --> 00:02:24,360
Speaker 1: stuff like this. It's all about geopolitics and the role

41
00:02:24,520 --> 00:02:27,440
Speaker 1: that energy is playing, which obviously has been a huge

42
00:02:27,480 --> 00:02:30,680
Speaker 1: topic this year. So maybe just to start out very

43
00:02:30,720 --> 00:02:34,400
Speaker 1: broadly speaking, you start the book book actually saying there's

44
00:02:34,440 --> 00:02:38,240
Speaker 1: this growing coldness between the US and China and Russia,

45
00:02:38,600 --> 00:02:41,400
Speaker 1: and I want to ask you about energy's role in

46
00:02:41,440 --> 00:02:46,200
Speaker 1: this growing coldness. Energy is a very important part of it. Obviously,

47
00:02:47,000 --> 00:02:51,360
Speaker 1: I focused in the book on really how this war

48
00:02:51,480 --> 00:02:56,040
Speaker 1: began in Ukraine by explaining the focus and the conflict

49
00:02:56,080 --> 00:02:59,280
Speaker 1: between Russia and Ukraine, uh, and how that ties into

50
00:02:59,360 --> 00:03:03,520
Speaker 1: natural gas in Europe and similarly, of course China. The

51
00:03:03,560 --> 00:03:07,000
Speaker 1: big geopolitical story the twenty one century is the relationship

52
00:03:07,040 --> 00:03:09,840
Speaker 1: between the US and China, and that is getting colder

53
00:03:09,840 --> 00:03:13,400
Speaker 1: and more difficult, it seems almost day by day. You

54
00:03:13,440 --> 00:03:15,840
Speaker 1: know that. No, I read your book too. I agree,

55
00:03:16,000 --> 00:03:18,919
Speaker 1: very excellent book. Uh, And I know you have several others,

56
00:03:18,919 --> 00:03:20,600
Speaker 1: so we've got a lot of reading to do, Wildonna

57
00:03:20,720 --> 00:03:22,680
Speaker 1: to catch up with these, but well, I think Bill

58
00:03:22,720 --> 00:03:26,000
Speaker 1: Donna just has a long plane ride which still get

59
00:03:26,040 --> 00:03:30,000
Speaker 1: us started. I'm loading them all on my kindle until

60
00:03:30,040 --> 00:03:34,200
Speaker 1: you fall asleep. But you know what I thought occurred

61
00:03:34,200 --> 00:03:37,800
Speaker 1: to me Daniel. As I was reading it is, um,

62
00:03:37,840 --> 00:03:40,560
Speaker 1: what's a company that sort of you know, new Cold

63
00:03:40,560 --> 00:03:43,240
Speaker 1: War if you will, or however you want to describe it.

64
00:03:43,320 --> 00:03:47,400
Speaker 1: Is America's growth of its own domestic energy industry, the

65
00:03:47,680 --> 00:03:51,480
Speaker 1: shale patch and the tracking and whatnot. And I wonder,

66
00:03:51,760 --> 00:03:55,440
Speaker 1: you know, it almost seems like going from sort of

67
00:03:55,840 --> 00:03:58,600
Speaker 1: being renowned as the biggest consumer of energy in the

68
00:03:58,640 --> 00:04:03,840
Speaker 1: world to now made your producer almost escalates the geopolitical tensions.

69
00:04:04,120 --> 00:04:06,760
Speaker 1: I feel like it does. It almost make sort of

70
00:04:06,800 --> 00:04:12,880
Speaker 1: America's influence, um, if not weaker, uh, but different in

71
00:04:13,200 --> 00:04:16,040
Speaker 1: this environment since we are such a big producer. Now. Yeah,

72
00:04:16,040 --> 00:04:18,520
Speaker 1: I think it well, I think that's that's absolutely right.

73
00:04:18,600 --> 00:04:21,040
Speaker 1: You know. I deal with a lot of things from

74
00:04:21,080 --> 00:04:23,479
Speaker 1: you know, Ukraine to climate in the book, but I

75
00:04:23,520 --> 00:04:27,159
Speaker 1: start with shale and because shales really had a much

76
00:04:27,200 --> 00:04:31,559
Speaker 1: bigger impact on geopolitics and people recognized. In the story

77
00:04:31,600 --> 00:04:35,040
Speaker 1: I tell in the book is when I was in St.

78
00:04:35,040 --> 00:04:38,800
Speaker 1: Petersburg at a conference where Bootin was speaking, and uh,

79
00:04:38,960 --> 00:04:42,039
Speaker 1: I three thousand people there and I was told to

80
00:04:42,040 --> 00:04:44,279
Speaker 1: ask the first question. I started to ask a question,

81
00:04:44,320 --> 00:04:46,240
Speaker 1: I mentioned the word shale, and he started shouting at

82
00:04:46,279 --> 00:04:50,359
Speaker 1: He's saying shales barbaric. He knew that US shale was

83
00:04:50,400 --> 00:04:53,640
Speaker 1: a threat to him in two ways. One because it

84
00:04:53,680 --> 00:04:57,279
Speaker 1: meant that the US natural gas would compete with natural

85
00:04:57,320 --> 00:05:01,480
Speaker 1: gas in Europe, and that's what we're seeing today. Secondly, Uh, Mike,

86
00:05:01,560 --> 00:05:05,160
Speaker 1: it's your point because this would really augment America's position

87
00:05:05,200 --> 00:05:07,080
Speaker 1: in the world and give it a kind of flexibility

88
00:05:07,440 --> 00:05:11,159
Speaker 1: it didn't have when it was importing its oil. I'd

89
00:05:11,160 --> 00:05:13,200
Speaker 1: love to know who decided that you get asked in

90
00:05:13,240 --> 00:05:15,440
Speaker 1: the first question. That's the talk about drawing the church

91
00:05:15,839 --> 00:05:19,440
Speaker 1: straw there. That's uh, that's not a position I'd want

92
00:05:19,440 --> 00:05:24,720
Speaker 1: to be in. Well, it was, I will tell you. Um.

93
00:05:26,520 --> 00:05:28,840
Speaker 1: It was started off innocuously that I was gonna ask

94
00:05:28,880 --> 00:05:34,359
Speaker 1: him a normal question about UH diversifying your economy, and

95
00:05:34,400 --> 00:05:36,960
Speaker 1: I said shale And you know, to be shouted at

96
00:05:37,080 --> 00:05:39,920
Speaker 1: him by him in front of three thousand people are

97
00:05:40,040 --> 00:05:43,880
Speaker 1: really unpleasant experience. The other thing, and now that we're

98
00:05:43,880 --> 00:05:46,040
Speaker 1: talking about I realized the other person on the stage

99
00:05:46,440 --> 00:05:49,760
Speaker 1: was Chancellor Merkel, who was chance of Germany for sixteen years.

100
00:05:50,200 --> 00:05:53,000
Speaker 1: And you can see the enemy between the two. But

101
00:05:53,120 --> 00:05:58,160
Speaker 1: you know, Merkel is now being criticized for UH policies

102
00:05:58,200 --> 00:06:01,440
Speaker 1: like shutting down nuclear that to Germany being more dependent

103
00:06:01,480 --> 00:06:05,120
Speaker 1: on Russian gas, and you know, the sort of judgment

104
00:06:05,160 --> 00:06:09,440
Speaker 1: of history is shifting a little bit. Yeah, I actually

105
00:06:09,480 --> 00:06:11,720
Speaker 1: wanted to ask you about this because I noticed that

106
00:06:11,800 --> 00:06:13,800
Speaker 1: early on in the book you had actually mentioned that

107
00:06:13,839 --> 00:06:17,320
Speaker 1: Marco said about nord Stream that it linked Russia in

108
00:06:17,360 --> 00:06:21,039
Speaker 1: Europe in a safe and resilient partnership. And then later on,

109
00:06:21,240 --> 00:06:24,960
Speaker 1: as you continue reading you you lay out that she says, uh,

110
00:06:25,040 --> 00:06:27,840
Speaker 1: you know, actually putting his living in his own world,

111
00:06:27,880 --> 00:06:31,120
Speaker 1: where her judgment maybe was shifting a little bit or

112
00:06:31,200 --> 00:06:33,000
Speaker 1: changing a little bit. So I wanted to ask you

113
00:06:33,120 --> 00:06:36,520
Speaker 1: where everybody sort of went wrong or where people made

114
00:06:36,560 --> 00:06:40,600
Speaker 1: mistakes and over the last ten years or so, well,

115
00:06:40,640 --> 00:06:43,800
Speaker 1: I think that's a really important question and what I've

116
00:06:43,839 --> 00:06:47,120
Speaker 1: been thinking about because you know, now there's a kind

117
00:06:47,160 --> 00:06:51,239
Speaker 1: of revisionism that we shouldn't you know, the world shouldn't

118
00:06:51,240 --> 00:06:53,560
Speaker 1: have traded with Russia, shouldn't have tried to integrate Russian

119
00:06:53,560 --> 00:06:56,800
Speaker 1: to the world economy, particularly as Putin got more and

120
00:06:56,800 --> 00:06:59,800
Speaker 1: more authoritarian. But you say, well, what was the ald

121
00:06:59,839 --> 00:07:03,200
Speaker 1: term native to leave it festering there? I mean, the

122
00:07:03,240 --> 00:07:06,080
Speaker 1: best thing was to get it anchored in the world. Uh,

123
00:07:06,720 --> 00:07:09,080
Speaker 1: but you know Putin, I mean, he's been in power

124
00:07:09,120 --> 00:07:11,960
Speaker 1: now almost as long as Joseph Stalin, and I think

125
00:07:12,000 --> 00:07:16,200
Speaker 1: he was becoming more and more authoritarian. And people who

126
00:07:16,280 --> 00:07:19,120
Speaker 1: have known him over the years said that that COVID

127
00:07:19,200 --> 00:07:22,200
Speaker 1: changed him. He was isolated for two years. He wasn't

128
00:07:22,280 --> 00:07:27,880
Speaker 1: meeting Western business people, he wasn't meeting Western government officials,

129
00:07:27,880 --> 00:07:30,840
Speaker 1: and so forth, very isolated with a small group of

130
00:07:30,880 --> 00:07:36,280
Speaker 1: people around him. May be ill and developed this incredible paranoia, uh,

131
00:07:36,320 --> 00:07:40,040
Speaker 1: and this anger that led him to unleash this terrible war.

132
00:07:40,160 --> 00:07:43,280
Speaker 1: So I don't think there was an alternative to not

133
00:07:43,360 --> 00:07:47,600
Speaker 1: trying to integrate Russia into the world. But obviously what's

134
00:07:47,600 --> 00:07:50,760
Speaker 1: happening now is the world, at least the Western world,

135
00:07:51,200 --> 00:07:54,480
Speaker 1: is slamming the door on Russia. You know, it's such

136
00:07:54,480 --> 00:07:58,040
Speaker 1: a thing, Daniel. I feel like this conflict between Russia

137
00:07:58,040 --> 00:08:02,040
Speaker 1: and Ukraine has lasted longer than most people expected. I

138
00:08:02,040 --> 00:08:04,480
Speaker 1: think people I think, if I can jump in, like

139
00:08:04,840 --> 00:08:07,880
Speaker 1: longer than anybody expect, right, I think most people thought

140
00:08:08,040 --> 00:08:10,120
Speaker 1: that they would go in and take over in a

141
00:08:10,160 --> 00:08:14,000
Speaker 1: matter of a couple of weeks. If if not sooner, well, well,

142
00:08:14,080 --> 00:08:16,160
Speaker 1: I mean, just to tell you, I mean putin thought

143
00:08:16,200 --> 00:08:18,480
Speaker 1: it was gonna be three or four days, right right,

144
00:08:19,040 --> 00:08:22,400
Speaker 1: So as it drags on, I'm just trying to wrap

145
00:08:22,480 --> 00:08:25,760
Speaker 1: my head around. Um. You know, Luckily the spring weather

146
00:08:25,800 --> 00:08:29,000
Speaker 1: in Europe now is sort of made the the energy

147
00:08:29,040 --> 00:08:32,000
Speaker 1: situation a little less acute than it would be otherwise. Obviously,

148
00:08:32,400 --> 00:08:36,040
Speaker 1: you know, uh, they still need natural gas for electricity, um,

149
00:08:36,640 --> 00:08:39,440
Speaker 1: and you know, keep the factories running and the lights on.

150
00:08:39,600 --> 00:08:43,240
Speaker 1: But as it drags on closer to the fall and winner,

151
00:08:43,600 --> 00:08:47,600
Speaker 1: I mean, is Europe going to be able to just

152
00:08:47,720 --> 00:08:52,319
Speaker 1: soldier on without uh sort of succumbing to Russia uh

153
00:08:52,640 --> 00:08:56,040
Speaker 1: and their demands. Um, when it starts getting colder again,

154
00:08:56,080 --> 00:08:58,200
Speaker 1: it is what do they need to do to sort

155
00:08:58,200 --> 00:08:59,920
Speaker 1: of be able to do that? Well, I think that's

156
00:09:00,000 --> 00:09:03,760
Speaker 1: a question that's really weighing now because in terms of oil,

157
00:09:04,679 --> 00:09:08,040
Speaker 1: there's enough oil crude oil in the world. Uh, you

158
00:09:08,160 --> 00:09:12,160
Speaker 1: have to move it around, but between strategic stocks demand

159
00:09:12,200 --> 00:09:14,920
Speaker 1: being down in China, you can manage that. When you

160
00:09:14,920 --> 00:09:19,520
Speaker 1: get into products site diesel, it gets harder and then uh, Mike,

161
00:09:19,559 --> 00:09:22,280
Speaker 1: you're going to the hardest thing was natural gas, and

162
00:09:22,360 --> 00:09:24,640
Speaker 1: that is exactly as you go into the winter. So

163
00:09:24,720 --> 00:09:28,800
Speaker 1: the big question now is can you feel, can they

164
00:09:28,840 --> 00:09:32,240
Speaker 1: feel storage so that that they can get to the

165
00:09:32,280 --> 00:09:34,920
Speaker 1: winter and, by the way, not only stay warm, but

166
00:09:35,040 --> 00:09:38,680
Speaker 1: keep industry operating. And I think, you know, we can

167
00:09:38,679 --> 00:09:42,319
Speaker 1: say that Putin made a series of decisions which kind

168
00:09:42,360 --> 00:09:44,920
Speaker 1: of were rational, that his army was really good, that

169
00:09:45,040 --> 00:09:49,320
Speaker 1: Ukraine wouldn't be able to resist, that the US had

170
00:09:49,360 --> 00:09:52,400
Speaker 1: just gone through getting out of Afghanistan, and was deeply divided,

171
00:09:52,679 --> 00:09:55,600
Speaker 1: that Europe was so dependent on his energy that they

172
00:09:55,600 --> 00:09:59,240
Speaker 1: would say, Okay, this is terrible, but life goes on. Uh,

173
00:09:59,280 --> 00:10:01,839
Speaker 1: and none of that. But I think he's still calculating,

174
00:10:01,880 --> 00:10:06,720
Speaker 1: and he said it that ultimately this energy disruption and

175
00:10:06,760 --> 00:10:09,920
Speaker 1: we are in a huge energy disruption at this huge

176
00:10:09,920 --> 00:10:13,600
Speaker 1: disruption of energy markets would be such a big threat

177
00:10:13,679 --> 00:10:18,440
Speaker 1: to the European economy that that that the coalition that

178
00:10:18,480 --> 00:10:21,920
Speaker 1: now exists would fall apart. I think that's that's his

179
00:10:22,000 --> 00:10:25,400
Speaker 1: wager right now. And uh, and the Achilles Heal is

180
00:10:25,440 --> 00:10:28,720
Speaker 1: what you pointed to. What happens is uh as Europe

181
00:10:28,760 --> 00:10:31,400
Speaker 1: goes into the fall and winter, right, so you can

182
00:10:31,440 --> 00:10:33,520
Speaker 1: still sort of counting on that to happen, I imagine

183
00:10:33,559 --> 00:10:35,640
Speaker 1: at this point. Yeah, and we've had at least one

184
00:10:35,800 --> 00:10:39,800
Speaker 1: German very prominent industrialist is said, you know, this is

185
00:10:39,840 --> 00:10:42,880
Speaker 1: too dangerous for the European economy. We should negotiate something

186
00:10:42,880 --> 00:10:47,839
Speaker 1: with Putin. And before we get into more of the intricacies,

187
00:10:47,880 --> 00:10:50,280
Speaker 1: I actually wanted to ask you to lay out because

188
00:10:50,320 --> 00:10:52,800
Speaker 1: in your book you you really presciently lay out what

189
00:10:52,920 --> 00:10:56,120
Speaker 1: happened between Russia and Ukraine. I mean you go back

190
00:10:56,480 --> 00:11:00,520
Speaker 1: centuries really, but you know over the last eight to

191
00:11:00,720 --> 00:11:04,280
Speaker 1: ten years how important that's been. The war that broke

192
00:11:04,320 --> 00:11:09,080
Speaker 1: out back when Russia invaded Crimea. Can you just talk

193
00:11:09,120 --> 00:11:13,040
Speaker 1: about that and just lay out for our listeners what happened. Yeah,

194
00:11:13,080 --> 00:11:15,560
Speaker 1: I mean there's always been this question and the Russian

195
00:11:15,640 --> 00:11:18,440
Speaker 1: narrative there wasn't There is no Ukraine. Putin has said

196
00:11:18,480 --> 00:11:21,680
Speaker 1: that Ukraine was simply part of Russia. And he published

197
00:11:21,760 --> 00:11:26,880
Speaker 1: last summer bizarrely a five thousand word essay, particularly bizarrely

198
00:11:26,880 --> 00:11:29,800
Speaker 1: in terms of what's happened now san Ukrainians and Russians

199
00:11:29,840 --> 00:11:33,640
Speaker 1: are brothers. He had this mystical Slavic notion, and so

200
00:11:35,320 --> 00:11:37,640
Speaker 1: he had described the breakup of the Soviet Union as

201
00:11:37,679 --> 00:11:41,679
Speaker 1: the greatest geopolitical catastrophe of the twentieth century, and so

202
00:11:41,760 --> 00:11:45,080
Speaker 1: he never really accepted the breakup of the Soviet Union,

203
00:11:45,120 --> 00:11:48,760
Speaker 1: particularly Ukraine, because that was part of Russia and it

204
00:11:48,880 --> 00:11:51,319
Speaker 1: was like the West, particularly United States, had taken it

205
00:11:51,360 --> 00:11:54,439
Speaker 1: away from Russia, taken away from him, and so this

206
00:11:54,480 --> 00:12:00,560
Speaker 1: relationship was always very acrimonious, uh really from the nineteen nineties,

207
00:12:00,600 --> 00:12:03,480
Speaker 1: but particularly when Putin came to power and there was

208
00:12:03,520 --> 00:12:07,280
Speaker 1: a series of crises over gas and Ukraine was, you know,

209
00:12:07,720 --> 00:12:11,760
Speaker 1: not a very is a pretty corrupt, uh country with

210
00:12:11,840 --> 00:12:16,440
Speaker 1: a lot of conflict going on in internally and so forth,

211
00:12:16,760 --> 00:12:19,480
Speaker 1: and a lot of Russian efforts to kind of dominate

212
00:12:19,520 --> 00:12:25,200
Speaker 1: the country, and so uh, Putin really you know, regarded

213
00:12:25,240 --> 00:12:28,400
Speaker 1: it as part of his mission as he became maybe

214
00:12:28,440 --> 00:12:32,320
Speaker 1: more and more megalomaniacal uh, that Ukraine had to be

215
00:12:32,400 --> 00:12:35,800
Speaker 1: brought back into Russia, and he started with primea. He's

216
00:12:35,880 --> 00:12:39,000
Speaker 1: and ever since fourteen there's been a war going on

217
00:12:39,160 --> 00:12:43,680
Speaker 1: actually which one doesn't realize, but the Ukrainian army is

218
00:12:43,679 --> 00:12:45,520
Speaker 1: as good as it is because it's been fighting a

219
00:12:45,559 --> 00:12:50,640
Speaker 1: war in eastern southeastern Ukraine and so um, you know,

220
00:12:50,679 --> 00:12:54,360
Speaker 1: these tensions were just there and they remained today where

221
00:12:55,080 --> 00:12:57,600
Speaker 1: he says there's I mean, he said it to people,

222
00:12:57,800 --> 00:13:00,800
Speaker 1: He said it to George W. Bush One said Ukraine

223
00:13:00,840 --> 00:13:02,840
Speaker 1: never existed as a country. Two thirds of it it

224
00:13:02,920 --> 00:13:05,120
Speaker 1: was ours, and one third of it belonged to the

225
00:13:05,160 --> 00:13:09,680
Speaker 1: Austro Hungarian Empire. So it was really a question of

226
00:13:09,800 --> 00:13:13,880
Speaker 1: the refusing to accept the settlement at the end of

227
00:13:13,880 --> 00:13:17,440
Speaker 1: the Cold War, refusing to accept the breakup of not

228
00:13:17,480 --> 00:13:20,559
Speaker 1: only the Soviet Union but the Russian Empire. And that

229
00:13:20,679 --> 00:13:24,120
Speaker 1: unsettled question was and I, as I wrote in the book,

230
00:13:24,559 --> 00:13:27,600
Speaker 1: that Ukraine was likely to be the issue that blew

231
00:13:27,679 --> 00:13:30,920
Speaker 1: up between Russia and the West. Um that it took

232
00:13:30,960 --> 00:13:33,560
Speaker 1: this form as something that one, you know, might not

233
00:13:33,640 --> 00:13:37,480
Speaker 1: have expected. Um. But um, you know, this is what

234
00:13:37,840 --> 00:13:40,520
Speaker 1: sort of boiled up in Putin's mind during his two

235
00:13:40,600 --> 00:13:45,480
Speaker 1: years of Covid isolation. But as you say, uh, it was,

236
00:13:45,960 --> 00:13:49,280
Speaker 1: it was long and coming, and it always been festering

237
00:13:49,480 --> 00:13:54,160
Speaker 1: in his mind. He'd always been denouncing that. Daniel. One

238
00:13:54,160 --> 00:13:56,600
Speaker 1: thing that stuck out to me in your book is

239
00:13:56,640 --> 00:13:59,880
Speaker 1: you mentioned the notion of sanctions and how they can

240
00:13:59,880 --> 00:14:02,440
Speaker 1: be sort of a wasting asset. I think is the

241
00:14:02,480 --> 00:14:05,320
Speaker 1: words I believe it was. Uh, George Schultz, you were

242
00:14:05,400 --> 00:14:09,440
Speaker 1: quoting the Secretary of State under Reagan about how well, yes,

243
00:14:09,520 --> 00:14:14,200
Speaker 1: you can impose sanctions. Um, but they sort of have

244
00:14:14,360 --> 00:14:16,880
Speaker 1: a a short shelf life, so to speak. You know,

245
00:14:16,920 --> 00:14:21,840
Speaker 1: if you try to lock Russia out of getting certain technologies,

246
00:14:21,880 --> 00:14:25,720
Speaker 1: well they'll they'll develop their own, um that sort of thing.

247
00:14:26,080 --> 00:14:29,640
Speaker 1: And I wonder if we when we look at the sanctions, Uh,

248
00:14:29,760 --> 00:14:33,080
Speaker 1: so many sanctions that have been placed on not only Russia,

249
00:14:33,160 --> 00:14:38,360
Speaker 1: but uh, you know, the the oligarchs, the billionaires of Russia. Um,

250
00:14:38,520 --> 00:14:40,560
Speaker 1: is there any risk of these sanctions do you think

251
00:14:40,600 --> 00:14:44,040
Speaker 1: being a wasting asset? I mean, you know, I was,

252
00:14:44,240 --> 00:14:46,880
Speaker 1: I was. I always found that comment by George Schultz

253
00:14:47,000 --> 00:14:50,120
Speaker 1: very wise because there, you know, there is a tendency

254
00:14:50,800 --> 00:14:52,560
Speaker 1: for the United States to just say, well, let's just

255
00:14:52,600 --> 00:14:54,960
Speaker 1: put sanctions and that will solve the problem. And then

256
00:14:55,520 --> 00:14:59,160
Speaker 1: well Ran is still there, Venezuela is still there. Um.

257
00:15:00,000 --> 00:15:03,360
Speaker 1: I think, hey, or we've never seen sanctions. They have

258
00:15:03,400 --> 00:15:07,240
Speaker 1: two characteristics. One as massive as they are, and too

259
00:15:07,360 --> 00:15:09,520
Speaker 1: it's not just the United States, but the United States

260
00:15:09,600 --> 00:15:14,240
Speaker 1: and Europe together and some other countries, and so uh,

261
00:15:14,360 --> 00:15:19,680
Speaker 1: the impact on the Russian economy will be enormous in Russia,

262
00:15:19,800 --> 00:15:23,560
Speaker 1: really will you know, the the door to the West

263
00:15:23,640 --> 00:15:26,840
Speaker 1: is closed and it will really have to look to China,

264
00:15:27,440 --> 00:15:30,320
Speaker 1: um will they wear away? I think that goes to

265
00:15:30,960 --> 00:15:33,440
Speaker 1: some of the questions. A kind of basic theme in

266
00:15:33,440 --> 00:15:37,200
Speaker 1: in your podcast is what happens to markets and you

267
00:15:37,240 --> 00:15:40,680
Speaker 1: know how turbulent is it? And this is a contributor,

268
00:15:41,200 --> 00:15:45,080
Speaker 1: a major contributor to the energy crisis or energy disruption

269
00:15:45,120 --> 00:15:47,800
Speaker 1: we're seeing with all the impacts on the economy and

270
00:15:47,840 --> 00:15:52,600
Speaker 1: of course tying into the struggle over inflation. But I

271
00:15:52,640 --> 00:15:56,560
Speaker 1: think this is I think at a level that's never

272
00:15:56,640 --> 00:16:01,280
Speaker 1: been been done before. And uh, it was interesting because

273
00:16:01,320 --> 00:16:03,600
Speaker 1: at the beginning, remember talking to people in the in

274
00:16:03,640 --> 00:16:07,040
Speaker 1: the US government, they said, we're excluding energy because Europe

275
00:16:07,040 --> 00:16:09,920
Speaker 1: is too dependent and so we can't do that. But

276
00:16:10,080 --> 00:16:12,760
Speaker 1: now the Europeans themselves are saying we don't want to

277
00:16:13,160 --> 00:16:16,680
Speaker 1: send to a fifty billion dollars a year to Russia,

278
00:16:17,160 --> 00:16:21,840
Speaker 1: and so most of German countries, led by Germany, actually

279
00:16:21,880 --> 00:16:31,840
Speaker 1: want to put on sanctions on energy as well. Before

280
00:16:31,840 --> 00:16:34,640
Speaker 1: we talk more about the US and China, I want

281
00:16:34,680 --> 00:16:37,320
Speaker 1: to ask you about what the future of oil and

282
00:16:37,360 --> 00:16:40,480
Speaker 1: gas exploration looks like when it comes to Russia, because

283
00:16:40,480 --> 00:16:44,040
Speaker 1: you have this passage and actually a really great picture

284
00:16:44,040 --> 00:16:47,040
Speaker 1: where you show I think it was a titanium flag

285
00:16:47,120 --> 00:16:50,400
Speaker 1: that the Russians planet at the north pole to sort

286
00:16:50,440 --> 00:16:53,400
Speaker 1: of stake it and say this is ours and this

287
00:16:53,440 --> 00:16:55,720
Speaker 1: is where we'll be looking for oil in the future.

288
00:16:55,800 --> 00:16:58,040
Speaker 1: So can you talk about that because it's that that

289
00:16:58,200 --> 00:17:01,680
Speaker 1: is like so striking to me. Yeah, it is. It's uh, well,

290
00:17:01,720 --> 00:17:05,520
Speaker 1: really there are two parts to that titanium flag. This

291
00:17:05,880 --> 00:17:10,359
Speaker 1: Russian uh mariner went down and planted it at the

292
00:17:10,560 --> 00:17:13,080
Speaker 1: you know, the on the seabed because the Russians want

293
00:17:13,119 --> 00:17:17,040
Speaker 1: to claim the Arctic, and of course that will looks

294
00:17:17,040 --> 00:17:19,960
Speaker 1: like it's going to be a new arena of competition,

295
00:17:20,440 --> 00:17:23,680
Speaker 1: and the US has been slow to wake up to it.

296
00:17:24,560 --> 00:17:27,000
Speaker 1: But you know what do they call it the high Arctic?

297
00:17:28,560 --> 00:17:34,119
Speaker 1: But uh and for Russia, offshore oil was a major

298
00:17:34,160 --> 00:17:38,160
Speaker 1: new frontier. But I think they're not gonna without Western technology,

299
00:17:38,240 --> 00:17:40,400
Speaker 1: without the Western companies who have said, you know, they've

300
00:17:40,400 --> 00:17:42,719
Speaker 1: said so long, we're out of here. I think it's

301
00:17:42,760 --> 00:17:45,359
Speaker 1: going to be very hard for them to develop the

302
00:17:45,440 --> 00:17:49,719
Speaker 1: off shore or or developed further their Arctic ellen gy

303
00:17:50,040 --> 00:17:53,600
Speaker 1: and so forth. So I think they'll be more focused

304
00:17:53,600 --> 00:17:57,280
Speaker 1: on their traditional areas in western Siberia and they probably

305
00:17:57,320 --> 00:18:00,760
Speaker 1: have the you know, the capabilities to cantinue to produce.

306
00:18:00,800 --> 00:18:03,000
Speaker 1: But I think they're going to produce. I think their

307
00:18:03,040 --> 00:18:07,800
Speaker 1: production will go down, and so Russia will not. It

308
00:18:07,800 --> 00:18:10,040
Speaker 1: will be a very important producer, but it won't be

309
00:18:10,440 --> 00:18:14,000
Speaker 1: an energy superpower, and it won't be able to tap

310
00:18:14,119 --> 00:18:19,840
Speaker 1: into the globally economy, technology and capabilities and partnerships that

311
00:18:19,920 --> 00:18:23,479
Speaker 1: it did up till February. I love that idea of

312
00:18:23,520 --> 00:18:27,159
Speaker 1: just dropping a flag to to claim ownership. You know,

313
00:18:27,800 --> 00:18:31,960
Speaker 1: what is it? Technically? Is it Canada? I guess it's

314
00:18:31,960 --> 00:18:35,600
Speaker 1: a little titanium flag. And I mean, but the funny

315
00:18:35,600 --> 00:18:37,679
Speaker 1: thing was I think it was a Canadian foreign minister,

316
00:18:37,760 --> 00:18:40,720
Speaker 1: which also has a big interesting Arctic center. What is

317
00:18:40,920 --> 00:18:43,320
Speaker 1: this is? This is? This isn't the nineteenth century. You

318
00:18:43,359 --> 00:18:47,520
Speaker 1: don't go around planting flags, but in a way putin

319
00:18:47,560 --> 00:18:51,520
Speaker 1: lives in the nineteenth century. The fair point, you know,

320
00:18:51,560 --> 00:18:56,239
Speaker 1: Danniel will bring it back to the US energy industry. Um. Uh.

321
00:18:56,400 --> 00:18:59,320
Speaker 1: One thing in your book that I found interesting and

322
00:18:59,320 --> 00:19:01,480
Speaker 1: I don't think a lot of people appreciate this that

323
00:19:02,040 --> 00:19:05,280
Speaker 1: the notion that will yes, um, you know, these shale

324
00:19:05,280 --> 00:19:09,159
Speaker 1: producers in Texas are producing a tremendous amount of oil,

325
00:19:09,640 --> 00:19:13,240
Speaker 1: but are refining capacity in this country isn't a perfect

326
00:19:13,240 --> 00:19:16,959
Speaker 1: match for all that light suite Texas crew that were

327
00:19:17,000 --> 00:19:21,640
Speaker 1: actually better set up to refine heavy crew from overseas.

328
00:19:22,280 --> 00:19:26,080
Speaker 1: So I'm curious. To me, I'm guessing you know, the

329
00:19:26,160 --> 00:19:29,840
Speaker 1: capital intensity and the time intensity of of upgrading that

330
00:19:29,960 --> 00:19:35,280
Speaker 1: refining capacity must be h harder even than you know,

331
00:19:35,560 --> 00:19:39,080
Speaker 1: drilling and exploring for oil, you know, more more capital

332
00:19:39,119 --> 00:19:43,679
Speaker 1: intensive and more time intensive. Is is that going to change?

333
00:19:43,720 --> 00:19:47,120
Speaker 1: Do you think where you know, some more refineries will

334
00:19:47,240 --> 00:19:50,400
Speaker 1: maybe get retrofitted or come online that will be able

335
00:19:50,440 --> 00:19:52,919
Speaker 1: to process more of that shale oil. And would that

336
00:19:52,960 --> 00:19:54,879
Speaker 1: be the in the best interests of this country? Do

337
00:19:54,880 --> 00:19:57,720
Speaker 1: you think? Well? I think, um, it depends. I mean,

338
00:19:57,920 --> 00:20:00,560
Speaker 1: you know, the basic theme of your show with your

339
00:20:00,600 --> 00:20:04,600
Speaker 1: podcast is markets, and it's kind of efficient. This is

340
00:20:04,640 --> 00:20:08,280
Speaker 1: efficient markets at work. It economically makes more sense to

341
00:20:08,520 --> 00:20:12,879
Speaker 1: export that oil somewhere else, uh, and then import the

342
00:20:12,880 --> 00:20:16,439
Speaker 1: crew that fits the system. You can run you know,

343
00:20:17,000 --> 00:20:20,440
Speaker 1: ill fitting crews through refineries. But it's just a lot

344
00:20:20,520 --> 00:20:25,160
Speaker 1: less efficient than and costs are are higher. I think

345
00:20:25,640 --> 00:20:28,280
Speaker 1: I think to some degree we'll see you know, that retrofitting,

346
00:20:28,280 --> 00:20:31,159
Speaker 1: that investment go on. But the US made such a

347
00:20:31,240 --> 00:20:34,359
Speaker 1: huge investment I think we estimated like a hundred billion

348
00:20:34,400 --> 00:20:38,800
Speaker 1: dollars to get our refinery system because we were an

349
00:20:38,800 --> 00:20:41,480
Speaker 1: importer of oil to be able to take those uh,

350
00:20:41,720 --> 00:20:45,200
Speaker 1: heavier crudes and so forth, and so it takes you

351
00:20:45,240 --> 00:20:48,480
Speaker 1: know a lot of money to change it. So uh,

352
00:20:48,680 --> 00:20:51,119
Speaker 1: but you know, it was a big political battle to

353
00:20:51,240 --> 00:20:53,760
Speaker 1: get the crew to export band lifted. It was a

354
00:20:53,800 --> 00:20:57,680
Speaker 1: relic of the nineteen seventies that you had this band.

355
00:20:57,680 --> 00:21:01,200
Speaker 1: It really didn't you know it actually, I mean if

356
00:21:01,200 --> 00:21:03,359
Speaker 1: you think markets are the best way to do it,

357
00:21:03,720 --> 00:21:07,120
Speaker 1: then it didn't. It didn't make sense. And without lifting

358
00:21:07,160 --> 00:21:09,600
Speaker 1: that band, we would not be able to produce as

359
00:21:09,680 --> 00:21:14,920
Speaker 1: much oil as we are doing because given our refining system,

360
00:21:14,920 --> 00:21:19,280
Speaker 1: it just you wouldn't have had the global You needed

361
00:21:19,320 --> 00:21:24,480
Speaker 1: the global market to just to justify the continuing investment

362
00:21:24,520 --> 00:21:27,960
Speaker 1: and the growth of production. So do you think the

363
00:21:27,960 --> 00:21:31,800
Speaker 1: American producers, I mean, clearly they must be reacting to

364
00:21:31,840 --> 00:21:36,639
Speaker 1: these elevated prices and uh increasing production to some degree.

365
00:21:36,720 --> 00:21:38,679
Speaker 1: But well, when you think about it, you know, if

366
00:21:38,680 --> 00:21:42,320
Speaker 1: I were a CEO of an energy company, and you know,

367
00:21:42,400 --> 00:21:46,080
Speaker 1: first I lived through the crashing prices in like two

368
00:21:46,119 --> 00:21:49,480
Speaker 1: thou two thousand and sixteen, and then the actual negative

369
00:21:50,080 --> 00:21:55,720
Speaker 1: prices during the covid epidemic. I imagine that's got to

370
00:21:55,800 --> 00:22:00,119
Speaker 1: be causing some reluctance um to sort of go in

371
00:22:00,200 --> 00:22:03,879
Speaker 1: with both feet and yeah, yeah, exactly. I mean in

372
00:22:03,920 --> 00:22:06,720
Speaker 1: the last decade we saw this incredible growth where the

373
00:22:06,800 --> 00:22:09,560
Speaker 1: US was at one point adding two million barrels a day.

374
00:22:09,920 --> 00:22:14,720
Speaker 1: It's been a much more muted reaction for exactly the

375
00:22:14,760 --> 00:22:17,120
Speaker 1: reason you say. That's one of the big reasons. Because

376
00:22:17,200 --> 00:22:19,720
Speaker 1: prices go up, just like the title of your show,

377
00:22:19,760 --> 00:22:22,200
Speaker 1: they go up, and then the other side of your

378
00:22:22,200 --> 00:22:25,320
Speaker 1: the title of your shows that prices go down, and uh,

379
00:22:25,400 --> 00:22:27,920
Speaker 1: and they've been through those cycles. They've been through two

380
00:22:28,000 --> 00:22:33,520
Speaker 1: down cycles. So there's that factor at work. Second factor

381
00:22:33,760 --> 00:22:38,879
Speaker 1: is investors are saying to them, don't go hog wild.

382
00:22:39,680 --> 00:22:42,160
Speaker 1: You you know, you have to return money to us.

383
00:22:42,200 --> 00:22:45,240
Speaker 1: This is an investment. This isn't the gift. And so

384
00:22:45,640 --> 00:22:52,080
Speaker 1: uh they are uh, you know, returning their cash flow

385
00:22:52,520 --> 00:22:56,159
Speaker 1: because investors are, uh, are are demanding it. It's like

386
00:22:56,680 --> 00:23:00,840
Speaker 1: a new social contract between the producers and the investors.

387
00:23:01,480 --> 00:23:05,160
Speaker 1: And the third thing is the same supply chain problems

388
00:23:05,240 --> 00:23:07,240
Speaker 1: that would be definitely the rest of our economy or

389
00:23:07,280 --> 00:23:12,800
Speaker 1: be deviling them, not enough pipe, not enough truck drivers,

390
00:23:13,400 --> 00:23:17,000
Speaker 1: you know, not enough crews to work on things, and

391
00:23:17,080 --> 00:23:21,640
Speaker 1: so they're competing for workers with other people. So, um,

392
00:23:21,680 --> 00:23:25,280
Speaker 1: you know that supply chain is is a big problem.

393
00:23:25,400 --> 00:23:29,400
Speaker 1: And it's just came back from Houston. People were saying, well,

394
00:23:29,440 --> 00:23:31,280
Speaker 1: you know, well that might have taken six months to

395
00:23:31,280 --> 00:23:33,760
Speaker 1: get the production, will take nine or twelve months to

396
00:23:33,840 --> 00:23:37,560
Speaker 1: get the production. So productions going up. Uh. Maybe at

397
00:23:37,600 --> 00:23:39,080
Speaker 1: the beginning of the year people thought it would go

398
00:23:39,160 --> 00:23:40,720
Speaker 1: up by a million barrels a day, which is a

399
00:23:40,760 --> 00:23:43,600
Speaker 1: big number. Now you know, at least some of the

400
00:23:43,640 --> 00:23:46,240
Speaker 1: producers are saying more like US production will by about

401
00:23:46,280 --> 00:23:48,800
Speaker 1: six hundred thousand barrels a day. So it is going up,

402
00:23:48,840 --> 00:23:51,640
Speaker 1: but it's you know, people are not shall we say

403
00:23:51,680 --> 00:23:56,320
Speaker 1: that this uh irrational exuberances out of fashion and the

404
00:23:56,359 --> 00:24:01,439
Speaker 1: oil patch. That makes sense. And just to give listeners

405
00:24:01,600 --> 00:24:04,560
Speaker 1: a bit more background information, can you as you lay

406
00:24:04,560 --> 00:24:06,560
Speaker 1: out in the book, can you lay out how it

407
00:24:06,680 --> 00:24:11,280
Speaker 1: is the US became such a big oil and gas producer. Yeah,

408
00:24:11,440 --> 00:24:14,359
Speaker 1: it's really it's it was. It was a revolution. You know,

409
00:24:14,400 --> 00:24:17,280
Speaker 1: we had eight presidents in a row, starting with Richard

410
00:24:17,400 --> 00:24:21,880
Speaker 1: Nixon and uh saying right up through Barack Obama saying

411
00:24:21,880 --> 00:24:24,879
Speaker 1: we want to become energy independent, and it seemed a joke,

412
00:24:24,960 --> 00:24:28,960
Speaker 1: it was never going to happen. Uh, But there was

413
00:24:30,119 --> 00:24:35,960
Speaker 1: this technology called shale, which really involves sort of umu

414
00:24:36,359 --> 00:24:41,440
Speaker 1: hydraulic fracturing as it's called, combined with horizontal drilling, and uh,

415
00:24:41,520 --> 00:24:44,679
Speaker 1: there was one really obsessed individual. You know, it's so

416
00:24:44,800 --> 00:24:46,720
Speaker 1: it's so interesting when you you know the role of

417
00:24:46,720 --> 00:24:51,520
Speaker 1: obsessed individuals in economic change, named George P. Mitchell, who

418
00:24:51,560 --> 00:24:55,840
Speaker 1: was convinced if you just worked somehow, even though the

419
00:24:55,880 --> 00:24:57,960
Speaker 1: textbook said it was impossible, you can make it work.

420
00:24:58,000 --> 00:25:01,560
Speaker 1: And for twenty years, twenty five years, people scoff. But

421
00:25:01,640 --> 00:25:04,240
Speaker 1: then it did work. And uh, you know, even his

422
00:25:04,280 --> 00:25:06,720
Speaker 1: own company people were telling him not to spend money

423
00:25:06,720 --> 00:25:08,920
Speaker 1: on it. But if he hadn't spent that money, I'm

424
00:25:08,960 --> 00:25:11,040
Speaker 1: not sure that we would have been where we were.

425
00:25:11,080 --> 00:25:14,320
Speaker 1: And then so in the early two thousand's you started

426
00:25:14,359 --> 00:25:18,280
Speaker 1: to see kind of wildcatteries as independence as are called,

427
00:25:18,280 --> 00:25:23,320
Speaker 1: small companies starting to adapt that technology. And then people said, oh, us,

428
00:25:23,400 --> 00:25:25,880
Speaker 1: natural gas supply, instead of going down, is going up.

429
00:25:26,640 --> 00:25:29,040
Speaker 1: And then they said, well, if it works for gas,

430
00:25:29,040 --> 00:25:31,119
Speaker 1: maybe it works for oil too. And about two thousand

431
00:25:31,160 --> 00:25:34,800
Speaker 1: and eight, two thousand nine. So this all really happened

432
00:25:34,920 --> 00:25:37,919
Speaker 1: in you know, in that period from around two thousand

433
00:25:37,960 --> 00:25:42,040
Speaker 1: and eight till you know, up until that's when it

434
00:25:42,080 --> 00:25:45,240
Speaker 1: all really began, the shale revolution, and it just took

435
00:25:45,280 --> 00:25:49,280
Speaker 1: the US from an entirely different position. And if you

436
00:25:49,320 --> 00:25:51,119
Speaker 1: had told people in two thousand and two that the

437
00:25:51,200 --> 00:25:53,440
Speaker 1: US was going to be the world's largest oil producer,

438
00:25:54,119 --> 00:25:57,760
Speaker 1: larger than Russia, larger than Saudi Arabia, the world's largest

439
00:25:57,800 --> 00:26:02,280
Speaker 1: producer of natural gas, and this year the world's largest

440
00:26:02,280 --> 00:26:04,760
Speaker 1: export of L and G, they would have said, you're

441
00:26:04,800 --> 00:26:09,840
Speaker 1: living in a fantasy world. So I know, no one

442
00:26:09,880 --> 00:26:12,520
Speaker 1: I know likes to make predictions on prices, Daniel, but

443
00:26:14,640 --> 00:26:19,040
Speaker 1: I'm getting the vibe that, um, from where you're sitting, Um,

444
00:26:19,760 --> 00:26:22,920
Speaker 1: it doesn't sound like we should expect these desalivated prices

445
00:26:23,000 --> 00:26:26,520
Speaker 1: to show much improvement in the near future. Any any

446
00:26:26,560 --> 00:26:29,320
Speaker 1: thoughts on on what we can expect. So, you know,

447
00:26:29,400 --> 00:26:31,720
Speaker 1: one of the things I've seen from studying the industry

448
00:26:31,760 --> 00:26:34,080
Speaker 1: is that it about every three years is a consensus

449
00:26:34,080 --> 00:26:36,840
Speaker 1: about what's going to happen, and then something entirely different happens,

450
00:26:37,200 --> 00:26:40,320
Speaker 1: particularly when it particularly when it comes to price um.

451
00:26:40,480 --> 00:26:43,200
Speaker 1: But you know, I think that before we went into

452
00:26:43,280 --> 00:26:47,520
Speaker 1: the Ukraine crisis, uh, the Ukraine War, we were already

453
00:26:47,520 --> 00:26:51,040
Speaker 1: in an energy crisis. And it started last autumn in

454
00:26:51,080 --> 00:26:54,760
Speaker 1: Europe and Asia with much higher prices. And that's because

455
00:26:55,920 --> 00:26:58,960
Speaker 1: supply demand balance had become very tight, because the rebound

456
00:26:59,040 --> 00:27:02,600
Speaker 1: from COVID had been quite strong, and you simply had

457
00:27:02,600 --> 00:27:05,399
Speaker 1: had what I started to call preemptive under investment, just

458
00:27:05,760 --> 00:27:07,800
Speaker 1: not you know, picking up one of the things we're

459
00:27:07,800 --> 00:27:12,159
Speaker 1: talking about, not enough investment around the world. Uh. I

460
00:27:12,160 --> 00:27:17,040
Speaker 1: think that condition still persists, and I think uh, Russian

461
00:27:17,119 --> 00:27:19,240
Speaker 1: oil is not gonna rush, is not going to be

462
00:27:19,240 --> 00:27:23,600
Speaker 1: producing as much oil. So I think my expectation would

463
00:27:23,640 --> 00:27:27,919
Speaker 1: be tight markets. And some people you know, have much higher,

464
00:27:27,960 --> 00:27:32,439
Speaker 1: you know, higher expectations of price uh. And you know,

465
00:27:32,520 --> 00:27:35,960
Speaker 1: because you know this, no one thought this war would

466
00:27:35,960 --> 00:27:38,399
Speaker 1: go on for as long as it has, and you know,

467
00:27:38,520 --> 00:27:40,080
Speaker 1: is it may be going to go on much longer?

468
00:27:40,480 --> 00:27:43,840
Speaker 1: And is Putent going to use nuclear weapons? You know,

469
00:27:43,920 --> 00:27:46,480
Speaker 1: just there's so many questions you don't know the answers to.

470
00:27:47,000 --> 00:27:51,239
Speaker 1: I'd say the big counter fact out there. And by

471
00:27:51,280 --> 00:27:53,800
Speaker 1: the way, and if China comes out of its COVID lockdown.

472
00:27:54,080 --> 00:27:56,560
Speaker 1: Then that starts to push demand up. And that's why

473
00:27:56,760 --> 00:27:59,720
Speaker 1: you know you've seen prices, you know, they've been pretty volatile,

474
00:27:59,800 --> 00:28:03,040
Speaker 1: but days it goes up. It's because Shanghai is ending

475
00:28:03,080 --> 00:28:08,359
Speaker 1: its lockdown. Um. Uh. But the other side of it

476
00:28:08,480 --> 00:28:14,159
Speaker 1: is um, the growing, the growing, you know, way to

477
00:28:14,320 --> 00:28:17,919
Speaker 1: voices about recession and downturn. And if you do have

478
00:28:17,960 --> 00:28:22,840
Speaker 1: a downturn, uh, you know significant recession, energy prices will

479
00:28:22,840 --> 00:28:27,919
Speaker 1: come down along with uh, you know, other commodities. But

480
00:28:28,720 --> 00:28:32,920
Speaker 1: commodities are tight and natural gas you know, this expectation

481
00:28:33,000 --> 00:28:37,840
Speaker 1: this summer is for higher you know, natural gas prices

482
00:28:37,840 --> 00:28:41,719
Speaker 1: to remain high. So I think that the one factor

483
00:28:41,720 --> 00:28:44,480
Speaker 1: on the other side is the recession, is the FED

484
00:28:44,920 --> 00:28:48,320
Speaker 1: and with the central banks do um. But I think

485
00:28:48,400 --> 00:28:51,040
Speaker 1: that if you look at supply demand balance, it does

486
00:28:51,120 --> 00:28:56,080
Speaker 1: say we're in a period of tight supply. Well, you're

487
00:28:56,120 --> 00:28:58,400
Speaker 1: saying the book that the world has grown to worry

488
00:28:58,440 --> 00:29:01,800
Speaker 1: about peak demand or how long consumption of oil will

489
00:29:01,800 --> 00:29:03,640
Speaker 1: continue to grow. So I want to I want to

490
00:29:03,640 --> 00:29:06,240
Speaker 1: ask you to make that prediction as well, like how

491
00:29:06,240 --> 00:29:11,080
Speaker 1: long will it continue to grow? Okay? Well there, um,

492
00:29:11,160 --> 00:29:15,040
Speaker 1: you know, there were some people during the lockdown we

493
00:29:15,120 --> 00:29:19,680
Speaker 1: thought world oil demand had peaked. Uh. My response was,

494
00:29:19,800 --> 00:29:22,680
Speaker 1: you shouldn't make generalize about the future in the middle

495
00:29:22,680 --> 00:29:26,320
Speaker 1: of a pandemic. Uh. And Uh, I think that we've

496
00:29:26,360 --> 00:29:28,680
Speaker 1: seen I mean what coming out of the pandemic, We've

497
00:29:28,720 --> 00:29:32,160
Speaker 1: seen growth, and we have growth in the developing world,

498
00:29:32,240 --> 00:29:35,320
Speaker 1: in emerging markets, add two billion people, more demand will

499
00:29:35,360 --> 00:29:38,160
Speaker 1: continue to grow. So I think it's very reasonable at

500
00:29:38,160 --> 00:29:40,880
Speaker 1: this point to expect world oil demand to continue to

501
00:29:40,920 --> 00:29:44,560
Speaker 1: grow until the early twenty thirties in that period and

502
00:29:44,600 --> 00:29:49,080
Speaker 1: then kind of reach a plateau and maybe start to

503
00:29:48,760 --> 00:29:52,800
Speaker 1: to to slope downward. But you know, that's you know,

504
00:29:52,840 --> 00:29:55,520
Speaker 1: maybe ten years away from that. But I think that

505
00:29:55,560 --> 00:29:59,080
Speaker 1: growth is still there, and I think natural gas actually

506
00:29:59,080 --> 00:30:02,560
Speaker 1: consumption grows for a longer period of time. And that

507
00:30:03,000 --> 00:30:05,920
Speaker 1: sloping downward in in ten years or so, is that

508
00:30:06,080 --> 00:30:08,840
Speaker 1: because of the electrical vehicle Electric vehicles will finally be

509
00:30:08,880 --> 00:30:13,520
Speaker 1: sort of more economical. Yeah, exactly, that that e v

510
00:30:13,760 --> 00:30:17,600
Speaker 1: s will become much more common, although there's still now

511
00:30:17,680 --> 00:30:20,760
Speaker 1: the new question is about what about the minerals and

512
00:30:20,800 --> 00:30:24,360
Speaker 1: the medals that you need for a highly electrified society.

513
00:30:24,400 --> 00:30:25,920
Speaker 1: I wanted to ask you about that. I mean, I'm

514
00:30:26,040 --> 00:30:28,840
Speaker 1: I'm a worry work by nature, you know, or the

515
00:30:28,840 --> 00:30:31,520
Speaker 1: new geopolitical tension is going to be about, you know,

516
00:30:31,800 --> 00:30:35,160
Speaker 1: the supplies of nicol and cobalt and all the other modems.

517
00:30:35,160 --> 00:30:38,040
Speaker 1: I think so, yes, I think you're quite right. I think, uh,

518
00:30:38,240 --> 00:30:40,880
Speaker 1: we'll have a you know, oil and gas have been

519
00:30:40,880 --> 00:30:44,400
Speaker 1: wrapped up in geopolitics. Uh, you know from the beginning.

520
00:30:44,880 --> 00:30:48,120
Speaker 1: I think that now these minerals, which people didn't think

521
00:30:48,200 --> 00:30:50,480
Speaker 1: much about unless they were in the business or near

522
00:30:50,520 --> 00:30:53,320
Speaker 1: the business or investing in the business, will also be

523
00:30:53,560 --> 00:30:56,800
Speaker 1: much caught up in geopolitics. We're doing a study now

524
00:30:57,480 --> 00:31:02,000
Speaker 1: on copper and just uh, you know how kind of said, okay,

525
00:31:02,040 --> 00:31:04,720
Speaker 1: if you have these goals for how much copper will

526
00:31:04,760 --> 00:31:07,280
Speaker 1: you need? Uh? And it turned out you'll need a

527
00:31:07,280 --> 00:31:10,000
Speaker 1: lot more than we have now. And where the minds,

528
00:31:10,200 --> 00:31:13,400
Speaker 1: and you know, they're in Chili there in Peru. Uh.

529
00:31:14,360 --> 00:31:18,000
Speaker 1: It takes a much longer time to open develop and

530
00:31:18,080 --> 00:31:20,040
Speaker 1: open a new mind than it does to bring on

531
00:31:20,120 --> 00:31:24,480
Speaker 1: even an offshore oil field. So uh, I think I

532
00:31:24,520 --> 00:31:27,120
Speaker 1: think that's kind of looming out there, and that may

533
00:31:27,200 --> 00:31:31,240
Speaker 1: affect the cost curve for for wind and solar but

534
00:31:31,480 --> 00:31:34,880
Speaker 1: I think, uh so that's part of it. But I

535
00:31:34,880 --> 00:31:38,040
Speaker 1: do think Yeah, as you get more electric cars and

536
00:31:38,120 --> 00:31:42,080
Speaker 1: as kind of population world population starts to stabilize. I

537
00:31:42,120 --> 00:31:45,440
Speaker 1: think those are the factors that would mean that you know,

538
00:31:45,600 --> 00:31:49,440
Speaker 1: and more efficient, that demand just starts to uh flatten

539
00:31:49,480 --> 00:31:52,960
Speaker 1: out demand growth. I have a two part question for you,

540
00:31:53,000 --> 00:31:55,600
Speaker 1: which listeners will know. Mike is very well known for

541
00:31:55,720 --> 00:31:59,160
Speaker 1: having multi multi, multi part questions. So do I need

542
00:31:59,200 --> 00:32:03,040
Speaker 1: to get a penny? Possibly? No? No, that was like

543
00:32:03,760 --> 00:32:12,400
Speaker 1: two part question is amateur? Okay, I'm piling on. So

544
00:32:12,480 --> 00:32:15,920
Speaker 1: I want to ask you to grade how what grade

545
00:32:15,920 --> 00:32:18,920
Speaker 1: you would give all of us in terms of the

546
00:32:18,920 --> 00:32:22,640
Speaker 1: progress we've been making when it comes to renewables. And

547
00:32:22,760 --> 00:32:25,520
Speaker 1: the second part is just because we were just talking

548
00:32:25,560 --> 00:32:30,160
Speaker 1: about international developments and how that plays a part. But

549
00:32:30,240 --> 00:32:33,240
Speaker 1: in the book you had said that COVID could actually

550
00:32:33,400 --> 00:32:36,560
Speaker 1: lead to more failed states, and I want to ask

551
00:32:36,560 --> 00:32:39,800
Speaker 1: you how that also plays a role in this right.

552
00:32:40,560 --> 00:32:43,440
Speaker 1: So on renewables, you know I spoke before about the

553
00:32:43,440 --> 00:32:46,400
Speaker 1: shale revolution, there's been a solar revolution. Solar costs have

554
00:32:46,480 --> 00:32:51,760
Speaker 1: come down. Uh. It's interesting. Wind and solar as modern

555
00:32:51,800 --> 00:32:55,200
Speaker 1: industries about half a century old, but it's about ten

556
00:32:55,320 --> 00:33:00,840
Speaker 1: years ago when they started to really achieve scale. Uh

557
00:33:00,880 --> 00:33:04,480
Speaker 1: and costs came down so dramatically, and so that's been

558
00:33:04,560 --> 00:33:08,960
Speaker 1: very significant. So there, you know, most of the new

559
00:33:09,000 --> 00:33:12,880
Speaker 1: capacity that's been put in place for US utilities is

560
00:33:12,960 --> 00:33:16,200
Speaker 1: wind and solar, and so I think you know that's

561
00:33:16,200 --> 00:33:20,479
Speaker 1: been a big success story. Uh. They are intermittent, so

562
00:33:20,560 --> 00:33:24,000
Speaker 1: you need something else like natural gas to balance them

563
00:33:24,000 --> 00:33:29,400
Speaker 1: out or otherwise you have brownouts. So uh, and I

564
00:33:29,400 --> 00:33:31,680
Speaker 1: think you know, we're now starting to see the development

565
00:33:31,720 --> 00:33:35,000
Speaker 1: of offshore wind, which is on a whole different scale

566
00:33:35,680 --> 00:33:39,960
Speaker 1: and um, you know it's more advanced in Europe. Um.

567
00:33:40,120 --> 00:33:44,120
Speaker 1: But by the way, um about the solar panels are

568
00:33:44,120 --> 00:33:49,440
Speaker 1: made in China and their tariffs on them, and you know,

569
00:33:49,520 --> 00:33:53,520
Speaker 1: so that gets back to our kind of geopolitical question

570
00:33:53,600 --> 00:33:58,280
Speaker 1: about as we move in that direction. Um. So I

571
00:33:58,280 --> 00:34:04,040
Speaker 1: think that's uh, that's part one of your question. Part two. Uh.

572
00:34:04,080 --> 00:34:08,719
Speaker 1: I mean, covid is really has been pretty devastating for

573
00:34:09,560 --> 00:34:13,279
Speaker 1: you know, many economies in developing countries that don't have

574
00:34:13,360 --> 00:34:16,200
Speaker 1: the resources like the United States have and don't have

575
00:34:16,239 --> 00:34:19,600
Speaker 1: a printing press actually, and so I think it's created

576
00:34:19,600 --> 00:34:22,120
Speaker 1: a lot of hardships for a lot of states right now,

577
00:34:22,160 --> 00:34:25,160
Speaker 1: Sri Lanka. I mean, there are other factors at work too.

578
00:34:25,239 --> 00:34:29,279
Speaker 1: Is is just its economy is just broken down. And

579
00:34:29,480 --> 00:34:34,520
Speaker 1: uh so, I think the recovery from uh COVID, I mean,

580
00:34:34,520 --> 00:34:37,120
Speaker 1: there's an economic recovery that has to go along with

581
00:34:37,160 --> 00:34:44,040
Speaker 1: the with the with the health recovery. So I think,

582
00:34:44,600 --> 00:34:46,600
Speaker 1: you know, I think the economic scars are going to

583
00:34:46,760 --> 00:34:50,839
Speaker 1: be there for a longer time. So if we do

584
00:34:51,000 --> 00:34:53,320
Speaker 1: have if we do end up seeing war field states,

585
00:34:53,320 --> 00:34:55,640
Speaker 1: how much more difficult does it make, you know, to

586
00:34:55,640 --> 00:34:59,880
Speaker 1: to mind Cobalt or any of these other well either

587
00:35:00,040 --> 00:35:07,200
Speaker 1: failed states or um states swept up in populism. And uh,

588
00:35:07,360 --> 00:35:10,880
Speaker 1: we've seen some elections in Latin America that point in

589
00:35:10,920 --> 00:35:15,680
Speaker 1: that direction. Uh you know there there will be more

590
00:35:15,719 --> 00:35:18,399
Speaker 1: of those. Uh. If you look at the political map

591
00:35:18,440 --> 00:35:21,680
Speaker 1: of Latin America, it's not people. The people who are

592
00:35:21,680 --> 00:35:26,120
Speaker 1: who are in power are not people who believe in

593
00:35:26,160 --> 00:35:30,120
Speaker 1: the necessary the free flow of capital and investment and

594
00:35:30,160 --> 00:35:34,959
Speaker 1: so forth, and um so I think and they will

595
00:35:35,200 --> 00:35:38,000
Speaker 1: want to, you know, change the terms on which people

596
00:35:38,000 --> 00:35:41,040
Speaker 1: have made investment. And so I think that will I

597
00:35:41,040 --> 00:35:45,600
Speaker 1: think those political factors will hinder investment and slow down

598
00:35:45,640 --> 00:35:50,319
Speaker 1: the investment. And you know, Chile has a thirty five

599
00:35:50,400 --> 00:35:53,839
Speaker 1: year old president who wants to change the terms under

600
00:35:53,840 --> 00:35:59,480
Speaker 1: which companies operate. Chili is the world's largest producer of copper. Uh,

601
00:35:59,520 --> 00:36:03,160
Speaker 1: you know, and and therefore, if the politics change, companies

602
00:36:03,160 --> 00:36:05,960
Speaker 1: are more reluctant to make investment and are more cautious.

603
00:36:07,000 --> 00:36:09,640
Speaker 1: So I think that's something to watch that. It's not

604
00:36:09,840 --> 00:36:13,040
Speaker 1: don't it's it's you have to pay attention to the

605
00:36:13,080 --> 00:36:18,440
Speaker 1: politics that are happening above ground, right, Daniel, You mentioned,

606
00:36:18,640 --> 00:36:23,080
Speaker 1: um how Germany had shut down their nuclear power plants. Um.

607
00:36:23,120 --> 00:36:28,400
Speaker 1: I guess under Angela Merkel, and I believe that was

608
00:36:28,480 --> 00:36:31,520
Speaker 1: after Fukushima, when they sort of got freaked out about

609
00:36:31,520 --> 00:36:35,239
Speaker 1: the Fukushima incident. I think that Mike, I think that's

610
00:36:35,239 --> 00:36:39,359
Speaker 1: the right word, freaked out rightly. So I can't blame him,

611
00:36:39,400 --> 00:36:42,160
Speaker 1: I guess. But at the time, but is um, do

612
00:36:42,200 --> 00:36:46,040
Speaker 1: you anticipate any change of heart on on nuclear Yeah, yeah,

613
00:36:46,080 --> 00:36:49,160
Speaker 1: there's been. Um, there's even been a change of heart

614
00:36:49,239 --> 00:36:51,560
Speaker 1: in Germany. Who we even had people in the Green

615
00:36:51,680 --> 00:36:53,799
Speaker 1: Party saying it may have been a mistake to shut

616
00:36:53,840 --> 00:36:58,680
Speaker 1: down the nuclear uh. And uh, you see, what you

617
00:36:58,760 --> 00:37:02,600
Speaker 1: see now is a lot of focus on small nuclear reactors.

618
00:37:02,880 --> 00:37:05,440
Speaker 1: We just had our big SERWEE conference in Houston. I

619
00:37:05,560 --> 00:37:08,480
Speaker 1: heard three Industrial is just kind of almost talking like

620
00:37:08,520 --> 00:37:11,800
Speaker 1: they expect that. By the twenty thirties, you had President

621
00:37:12,200 --> 00:37:15,319
Speaker 1: Emmanuel mccrown and France who came into power saying we

622
00:37:15,360 --> 00:37:19,000
Speaker 1: want to downplay nuclear and do more renewables. He's just

623
00:37:19,160 --> 00:37:21,840
Speaker 1: now set elected for a second term. He wants to

624
00:37:22,960 --> 00:37:26,279
Speaker 1: UH six new nuclear reactors and maybe another eight. Even

625
00:37:26,320 --> 00:37:30,239
Speaker 1: Brittain has talked about it. So I think that and

626
00:37:30,280 --> 00:37:34,640
Speaker 1: in the US there's something like UM sixty at this

627
00:37:34,719 --> 00:37:38,680
Speaker 1: point companies and research groups that are working in nuclear

628
00:37:39,320 --> 00:37:42,239
Speaker 1: And I heard the other day that something like four

629
00:37:42,280 --> 00:37:45,760
Speaker 1: billion dollars has gone into kind of venture capital funding

630
00:37:45,840 --> 00:37:51,279
Speaker 1: for fusion not vision. So I think that UM and

631
00:37:51,600 --> 00:37:54,520
Speaker 1: and the U. S. Government is putting money into, you know,

632
00:37:54,640 --> 00:37:58,239
Speaker 1: into these new nuclear technologies. So I think there has

633
00:37:58,640 --> 00:38:02,759
Speaker 1: been a turnaround, not an embraced by any means, but

634
00:38:02,800 --> 00:38:05,760
Speaker 1: a turnaround. And I thought that particularly that maybe small

635
00:38:05,840 --> 00:38:11,120
Speaker 1: nuclear reactors will be economically manageable by the way UH

636
00:38:11,200 --> 00:38:16,239
Speaker 1: to UH to deploy, and sense that it needs to

637
00:38:16,280 --> 00:38:19,400
Speaker 1: be part of our electricity supply, by the way the

638
00:38:19,960 --> 00:38:23,919
Speaker 1: countries that's the biggest international vendor kind of nuclear power

639
00:38:24,040 --> 00:38:29,560
Speaker 1: and uranium happens to be a country called Russia. What

640
00:38:29,680 --> 00:38:36,400
Speaker 1: could go wrong there? Right? Yeah, yeah, it's a reliable supply. Daniel.

641
00:38:36,480 --> 00:38:38,600
Speaker 1: You you lay at all these characters in the book

642
00:38:38,640 --> 00:38:43,160
Speaker 1: who helped revolutionize boil and gas exploration in the US.

643
00:38:43,239 --> 00:38:46,040
Speaker 1: So Harold Ham or Sharif Suki, and I want to

644
00:38:46,080 --> 00:38:49,680
Speaker 1: ask you who the Harold Hams are of the renewable

645
00:38:49,760 --> 00:38:54,880
Speaker 1: space today? Well, uh, they are today. Well, obviously the

646
00:38:54,960 --> 00:38:59,000
Speaker 1: person who has you know, this is no secret. The

647
00:38:59,040 --> 00:39:02,160
Speaker 1: person who has trans form the automobile industry is Elon Musk.

648
00:39:02,880 --> 00:39:06,920
Speaker 1: And I have that wonderful story in the book about J. B. Strabo,

649
00:39:07,120 --> 00:39:10,879
Speaker 1: who was this technology as electricity enthusiasts, who had lunch

650
00:39:10,920 --> 00:39:13,080
Speaker 1: with them in two thousand three and tried to sell

651
00:39:13,160 --> 00:39:14,840
Speaker 1: them on the idea of electric airplane. Says I'm not

652
00:39:14,880 --> 00:39:18,399
Speaker 1: interested as an electric car, and must says I might

653
00:39:18,480 --> 00:39:21,640
Speaker 1: well be interested in that. And uh, Musk a couple

654
00:39:21,680 --> 00:39:23,319
Speaker 1: of years ago said it had not been for that

655
00:39:23,440 --> 00:39:27,040
Speaker 1: lunch in Los Angeles, there might not have been a tesla.

656
00:39:27,120 --> 00:39:30,000
Speaker 1: I mean, it's just the contingency of history. And look

657
00:39:30,000 --> 00:39:32,279
Speaker 1: at now all the automobile makers are all staying. By

658
00:39:32,320 --> 00:39:36,400
Speaker 1: twenty five, they want to go all electric or mostly

659
00:39:36,440 --> 00:39:40,680
Speaker 1: electric So I think he stands out there the most

660
00:39:40,800 --> 00:39:48,239
Speaker 1: in terms of in terms of wind and renewables. I mean,

661
00:39:48,280 --> 00:39:53,560
Speaker 1: I I mean there's a pioneers. I mean I think

662
00:39:53,560 --> 00:40:01,600
Speaker 1: there you know, people who are playing UH leadership roles,

663
00:40:02,280 --> 00:40:06,240
Speaker 1: but it's I think, I think the breakthrough period is

664
00:40:06,400 --> 00:40:25,360
Speaker 1: behind us. I mean, now these are well established industry. Well, Daniel,

665
00:40:25,680 --> 00:40:27,640
Speaker 1: you're the one who brought up Elon musk, which I

666
00:40:27,640 --> 00:40:31,200
Speaker 1: feel like is the perfect segue to our craziest things

667
00:40:31,200 --> 00:40:34,120
Speaker 1: of the week, because mine is is UH elon related.

668
00:40:34,200 --> 00:40:36,960
Speaker 1: But Daniel, what a treat to catch up with you.

669
00:40:37,320 --> 00:40:41,480
Speaker 1: Daniel Jurgen is the author of the New Map, Energy

670
00:40:41,600 --> 00:40:44,640
Speaker 1: Climate and the Clash of Nations. Also about a half

671
00:40:44,640 --> 00:40:47,439
Speaker 1: dozen other books, right, yeah, there are a few weather

672
00:40:47,880 --> 00:40:51,560
Speaker 1: as well. And he's the Vital Quest vice chair just

673
00:40:51,960 --> 00:40:55,719
Speaker 1: to UH and the vice chairman of SMP Global. And

674
00:40:55,760 --> 00:40:57,960
Speaker 1: it's a better real honor to to get your thoughts

675
00:40:57,960 --> 00:41:01,080
Speaker 1: on on energy markets, Daniel with you. It's been great

676
00:41:01,120 --> 00:41:03,239
Speaker 1: to talk to both of you, and thanks for the opportunity.

677
00:41:03,400 --> 00:41:05,640
Speaker 1: But but first we're gonna get your thoughts on the

678
00:41:05,680 --> 00:41:10,120
Speaker 1: crazy things in the markets. We can't let you go without. Okay, well,

679
00:41:10,360 --> 00:41:13,480
Speaker 1: I think the thing that's on my mind, is um

680
00:41:14,520 --> 00:41:19,759
Speaker 1: kind of this schizophrenic US policy about energy, Uh on

681
00:41:19,840 --> 00:41:23,520
Speaker 1: the one hand, wanting more production on the other hand,

682
00:41:23,760 --> 00:41:28,520
Speaker 1: UH kind of beating up on you know, on the industry.

683
00:41:29,080 --> 00:41:31,359
Speaker 1: And you know, Germany has been able to work out

684
00:41:31,800 --> 00:41:34,960
Speaker 1: what to do about oil because they had this dialogue

685
00:41:35,000 --> 00:41:38,759
Speaker 1: between government and the private sector, and we don't have

686
00:41:38,800 --> 00:41:41,759
Speaker 1: that in the United States. And I think when you're

687
00:41:41,800 --> 00:41:44,239
Speaker 1: in a crisis and in a disruption, you ought to

688
00:41:44,280 --> 00:41:47,080
Speaker 1: do that. So I'm not sure I would put the

689
00:41:47,120 --> 00:41:51,200
Speaker 1: label crazy on it, but it is UM is something

690
00:41:51,239 --> 00:41:55,360
Speaker 1: that really stands out that you know, we need to prepare.

691
00:41:57,120 --> 00:41:59,000
Speaker 1: It may not happen, but we need to prepare for

692
00:41:59,239 --> 00:42:04,360
Speaker 1: greater disrupt right. You know, politicians love to use gasoline

693
00:42:04,400 --> 00:42:07,760
Speaker 1: prices as a blunt tool to to beat up their

694
00:42:07,800 --> 00:42:10,840
Speaker 1: their opponents with. And you know, obviously Biden's getting a

695
00:42:10,840 --> 00:42:15,600
Speaker 1: lot of abuse about gas prices. But is there is

696
00:42:15,640 --> 00:42:19,239
Speaker 1: there any blame to be shouldered on the administration? I mean,

697
00:42:19,280 --> 00:42:22,400
Speaker 1: I get the impression that US producers have some spare

698
00:42:22,440 --> 00:42:25,879
Speaker 1: capacity that they could be using. They don't need sort

699
00:42:25,880 --> 00:42:30,719
Speaker 1: of looser regulations to increase production. Well I think, I mean,

700
00:42:30,760 --> 00:42:33,239
Speaker 1: I think they need confidence that if it goes back

701
00:42:33,280 --> 00:42:35,239
Speaker 1: to what you said earlier, that if they invest, that

702
00:42:35,320 --> 00:42:37,480
Speaker 1: the rules of the game won't change two years from

703
00:42:37,520 --> 00:42:41,840
Speaker 1: now when prices come down again. Um, and you know

704
00:42:42,000 --> 00:42:46,440
Speaker 1: they I mean, they would give them confidence to invest.

705
00:42:46,520 --> 00:42:48,680
Speaker 1: I mean one thing, if you're gonna invest, you need confidence.

706
00:42:49,719 --> 00:42:51,799
Speaker 1: I think we could be you know, we could be

707
00:42:51,840 --> 00:42:56,200
Speaker 1: talking to Canada right now and uh, you know more

708
00:42:56,480 --> 00:42:58,319
Speaker 1: we need more oil. We could get it from there.

709
00:42:58,800 --> 00:43:00,719
Speaker 1: But it is I was talking the other day to

710
00:43:00,920 --> 00:43:06,239
Speaker 1: a Democratic congressman and he kind of sees all of

711
00:43:06,239 --> 00:43:08,600
Speaker 1: that and everything we said. But you know, you gotta

712
00:43:08,640 --> 00:43:11,680
Speaker 1: understand we have an election in seven months, and of

713
00:43:11,719 --> 00:43:14,400
Speaker 1: course gastling prices really do hurt a lot of people,

714
00:43:15,080 --> 00:43:18,560
Speaker 1: and so uh, but it's very familiar because it's it's

715
00:43:18,560 --> 00:43:22,120
Speaker 1: the same language. We recently had a you know hearing,

716
00:43:22,239 --> 00:43:25,120
Speaker 1: a big dramatic hearing, you know, where their line up

717
00:43:25,160 --> 00:43:28,080
Speaker 1: all the executives and you know, accuse them of price

718
00:43:28,120 --> 00:43:33,479
Speaker 1: doudging everything. And I found actually looked at my previous book,

719
00:43:33,520 --> 00:43:35,759
Speaker 1: The Prize, and I found that the first congressionally hearing

720
00:43:35,840 --> 00:43:40,920
Speaker 1: on the high gasling prices was in n really and

721
00:43:41,040 --> 00:43:45,920
Speaker 1: you know what, it was the same script that's hilarious.

722
00:43:45,960 --> 00:43:50,480
Speaker 1: That's really good. Um, all right, well, Donna, I will

723
00:43:50,520 --> 00:43:52,480
Speaker 1: give you my I tease it a little bit. I'll

724
00:43:52,480 --> 00:43:55,319
Speaker 1: give you my crazy thing. I will not make you

725
00:43:55,360 --> 00:43:57,719
Speaker 1: play prices right this week. Usually I make build down

726
00:43:57,760 --> 00:44:00,239
Speaker 1: to play prices right and guess the price of what

727
00:44:00,280 --> 00:44:03,000
Speaker 1: I'm talking about, Daniel. But does I'm not good at

728
00:44:03,040 --> 00:44:05,600
Speaker 1: it though I don't enjoy the game. Well, let's see,

729
00:44:05,719 --> 00:44:07,440
Speaker 1: maybe I think you can guess this one. I still

730
00:44:07,520 --> 00:44:11,359
Speaker 1: have to make it a game somehow. So, Uh, Elon Musk,

731
00:44:11,840 --> 00:44:14,800
Speaker 1: as you put it out, brought into the program, Daniel.

732
00:44:15,080 --> 00:44:18,799
Speaker 1: It's obviously got a little side endeavor going on where

733
00:44:18,800 --> 00:44:22,400
Speaker 1: he's trying to buy Twitter, and then he's sort of

734
00:44:22,440 --> 00:44:26,520
Speaker 1: pulled the plug on the deal, saying he's not sure

735
00:44:26,600 --> 00:44:29,560
Speaker 1: how many of these accounts are really actual humans and

736
00:44:29,600 --> 00:44:32,960
Speaker 1: how many are fake bots, And so the CEO of

737
00:44:33,040 --> 00:44:36,960
Speaker 1: Twitter put out a very elaborate long list of tweets

738
00:44:37,320 --> 00:44:42,760
Speaker 1: explaining they're how they deal with bots. Uh, and Elon

739
00:44:42,840 --> 00:44:46,560
Speaker 1: Musk replied with one emoji, Bia, do you know what

740
00:44:46,600 --> 00:44:50,279
Speaker 1: the emoji was? I don't, but I'm going to guess

741
00:44:50,320 --> 00:44:59,200
Speaker 1: it was good. Guess it only makes sense for there

742
00:44:59,360 --> 00:45:04,880
Speaker 1: is It makes then the visionary of electric vehicles, of

743
00:45:05,200 --> 00:45:09,520
Speaker 1: space exploration and the richest man in the world. Uh,

744
00:45:10,719 --> 00:45:15,040
Speaker 1: replying with a with a poop emoji. So Twitter diplomacy. Yeah,

745
00:45:15,760 --> 00:45:17,319
Speaker 1: so what do you think do you think he wants

746
00:45:17,360 --> 00:45:21,040
Speaker 1: to buy Twitter? Uh? Good question. I don't know what

747
00:45:21,080 --> 00:45:25,280
Speaker 1: do you think? I was struck by a bluemgarticle earlier

748
00:45:25,360 --> 00:45:28,160
Speaker 1: this week they talked about the debt burden that that

749
00:45:28,320 --> 00:45:31,640
Speaker 1: comes along with Twitter. I think it's something like thirteen

750
00:45:31,640 --> 00:45:34,359
Speaker 1: billion dollars or you know, just the annual interest rate

751
00:45:34,400 --> 00:45:38,680
Speaker 1: payments are something around a billion dollars. Just he must

752
00:45:38,680 --> 00:45:42,439
Speaker 1: be thinking about that now after he had rushed into

753
00:45:42,480 --> 00:45:45,960
Speaker 1: the deal so quickly and watching the share price reaction

754
00:45:46,000 --> 00:45:47,960
Speaker 1: in Tesla, I think might have made him change his

755
00:45:48,000 --> 00:45:52,640
Speaker 1: tune a little bit. Yes, yes, yeah, Well I have

756
00:45:52,680 --> 00:45:56,840
Speaker 1: the craziest thing in the electric vehicle market as well. Okay,

757
00:45:57,000 --> 00:45:59,200
Speaker 1: at least I think it's in the electric vehicle market.

758
00:45:59,239 --> 00:46:01,359
Speaker 1: But I had never heard of this company before. But

759
00:46:01,480 --> 00:46:04,640
Speaker 1: my craziest thing. And and just to to lay the

760
00:46:04,680 --> 00:46:07,760
Speaker 1: record tread there were so many crazy things this week.

761
00:46:08,200 --> 00:46:12,160
Speaker 1: We had Walmart and Target I think each had their

762
00:46:12,320 --> 00:46:16,279
Speaker 1: largest one day declines in share price since seven and

763
00:46:16,360 --> 00:46:19,920
Speaker 1: just massive amounts of crazy stuff just happening on a

764
00:46:20,000 --> 00:46:23,840
Speaker 1: daily basis. But there was this Bloomberg story about some

765
00:46:23,960 --> 00:46:26,120
Speaker 1: of the wealth that has been coming out from the

766
00:46:26,200 --> 00:46:31,319
Speaker 1: spack market. And so there's a company called Arrival, and

767
00:46:31,360 --> 00:46:33,239
Speaker 1: maybe Daniel can tell us about it if if he's

768
00:46:33,280 --> 00:46:36,960
Speaker 1: familiar with it. But the founder or the CEO or

769
00:46:36,960 --> 00:46:40,080
Speaker 1: whoever is behind Arrival, he was worth the eleven point

770
00:46:40,160 --> 00:46:43,400
Speaker 1: seven billion dollars a year ago and he's lost nine

771
00:46:44,800 --> 00:46:50,560
Speaker 1: of his wealth. So there's just been massive losses of wealth,

772
00:46:51,000 --> 00:46:53,000
Speaker 1: you know. But I think there were a couple of

773
00:46:53,520 --> 00:46:56,239
Speaker 1: tycoons in China who had lost similar amounts of the

774
00:46:58,600 --> 00:47:02,240
Speaker 1: CARBONA founders all so had lost huge amounts of wealth,

775
00:47:02,280 --> 00:47:06,279
Speaker 1: and so just it's that that market has created. Yeah,

776
00:47:06,360 --> 00:47:09,440
Speaker 1: I mean it is interesting. I mean this happens that

777
00:47:09,800 --> 00:47:11,879
Speaker 1: you know, people thought they had all this wealth, and

778
00:47:12,080 --> 00:47:13,560
Speaker 1: you know, they thought it was sort of like golden

779
00:47:13,640 --> 00:47:16,920
Speaker 1: Fort Knox, and it turns out it was paper. And

780
00:47:16,960 --> 00:47:20,719
Speaker 1: so I guess we're gonna see a lot of fortunes

781
00:47:20,800 --> 00:47:24,919
Speaker 1: just uh pulverize. And that's even before we start talking

782
00:47:24,920 --> 00:47:29,280
Speaker 1: about crypto, where they it's it's it's going off, Okay,

783
00:47:29,320 --> 00:47:31,000
Speaker 1: I have when I have I have a game I've

784
00:47:31,000 --> 00:47:34,920
Speaker 1: played I just mentioned to you, which uh is. There

785
00:47:34,920 --> 00:47:37,160
Speaker 1: are a lot of teslas on the street in Washington,

786
00:47:37,520 --> 00:47:39,880
Speaker 1: and so my hobby is to account how many tests

787
00:47:39,920 --> 00:47:44,239
Speaker 1: I see in a day, the numbers going up. Okay,

788
00:47:44,680 --> 00:47:48,520
Speaker 1: is it really? Yeah? It's at and Lelan is a

789
00:47:48,560 --> 00:47:54,560
Speaker 1: new uh, a newfound conservative politically leaning, so curious to

790
00:47:54,600 --> 00:47:57,080
Speaker 1: see how sales do I don't. I don't picture. I

791
00:47:57,120 --> 00:47:59,520
Speaker 1: don't know. I picture a lot of Democrats buying those cars.

792
00:47:59,520 --> 00:48:02,359
Speaker 1: I don't know if he's uh actually that you're right,

793
00:48:02,400 --> 00:48:05,640
Speaker 1: I mean, you're right his that's a really good point

794
00:48:05,719 --> 00:48:11,000
Speaker 1: that his uh, his market may not be where his yea,

795
00:48:11,040 --> 00:48:16,280
Speaker 1: where he is politically currently. Yeah, he might might regret

796
00:48:16,280 --> 00:48:18,480
Speaker 1: some of this, but we'll see. Maybe we'll get him

797
00:48:18,480 --> 00:48:20,160
Speaker 1: on the show of all, Donna and he can answer

798
00:48:20,200 --> 00:48:27,319
Speaker 1: all our questions, the invitations out right. But Daniel, you're

799
00:48:27,360 --> 00:48:29,960
Speaker 1: going again. Thank you so much. Vil. Donna and I

800
00:48:30,040 --> 00:48:32,880
Speaker 1: were not exactly book critics, but we both love the

801
00:48:32,920 --> 00:48:37,440
Speaker 1: new map. Big endorsement for us, great storytelling, great writing,

802
00:48:37,640 --> 00:48:41,359
Speaker 1: and just um really putting it all together. Everything going

803
00:48:41,440 --> 00:48:45,240
Speaker 1: in around the world now with you Tew, politics and energy,

804
00:48:45,320 --> 00:48:47,680
Speaker 1: it's um. The two are really joined at the hip

805
00:48:47,719 --> 00:48:49,200
Speaker 1: and and you really did a good job of putting

806
00:48:49,200 --> 00:48:52,279
Speaker 1: it all together. Well, thank you. I appreciate it. Thank

807
00:48:52,320 --> 00:49:02,880
Speaker 1: you for joining us. Meant thank you. What Goes Up

808
00:49:02,920 --> 00:49:04,799
Speaker 1: will be back next week and so then you can

809
00:49:04,800 --> 00:49:07,680
Speaker 1: find us on the Bloomberg Terminal, website and app or

810
00:49:07,719 --> 00:49:10,520
Speaker 1: wherever you get your podcast. We love it if you

811
00:49:10,520 --> 00:49:12,560
Speaker 1: took the time to rate and review the show on

812
00:49:12,640 --> 00:49:15,880
Speaker 1: Apple Podcasts, so more listeners can find us. And you

813
00:49:15,880 --> 00:49:18,719
Speaker 1: can find us on Twitter, follow me at reag Anonymous.

814
00:49:19,320 --> 00:49:23,000
Speaker 1: Bildanna Hirach is at Bildanna Hirach. You can also follow

815
00:49:23,040 --> 00:49:27,640
Speaker 1: Bloomberg Podcasts at Podcasts. What Goes Up is produced by

816
00:49:27,680 --> 00:49:31,040
Speaker 1: Stacy Wang. The head of Bloomberg podcast is Francesco Levie.

817
00:49:31,200 --> 00:49:32,759
Speaker 1: Thanks for listening. To see you next time.