Yergin on New Book

anything when it comes to energy. That's Dan your again. He's vice chairman of I H S Market. Um. Dan, you have a new book out called The New Map, Energy, Climate and the Clash of Nations. It's always good to talk to you, by the way, and I wondered if you could just let me know how why did you write the book? Like what was your impetus? What were you thinking? Um, you talked to C. E. O. S. You give presentations, you're all involved with the opaque, Like

why did you write it? Alex? What The basic reason is that the world had really changed dramatically from even to decade ago, whether it's in terms of the US be the world's largest oil producer, whether it's a Paris agreement, whether it's a disruption and West Chinese relations, and we needed and I saw, this is a new terrain, a rough terrain, and we needed a map through it. And that's why I set out to write the map and

try and make sense of where it's all going. A new map, Dan, And it's really nice to connect with you, so delighted you're here with us. Is it is hard to to create it in many ways, I think any cartographer which would tell you that, and certainly I mean this is three dimensional in many ways. So how do you even set about doing this? Well? I did it. I organized it well. First of all, I wanted to make it a narrative. I wanted to make it very accessible to people, and I wanted to have good stories

in it. At the same time, I really wanted to be a framework, and so I organized it around America's map that changes China and Russias the Middle East, and then what I called road map to the future and climate map, and so those are the maps within. And of course the term maps by this point is is a metaphor for the changes and how the world is changing. And things that just people wouldn't have expected and where

they might be going. And Dan um I was in touch with you while you're writing the book, and of course you're almost done and then all of a sudden COVID happened, and then you have to go back and sort of a tweak everything to incorporate that as well. And I'm wondering how we talk a lot about how the COVID pandemic reflects on what climate change in terms of putting more stress on the poor, showing the vulnerabilities

of governments and lack of healthcare, et cetera. What did you learn in your research that showed you how these countries handle COVID and then how they can handle climate change. Well, I think that um I did go obviously went back and integrated because this is you know, it's it's more than a huge story. It's a cataclysm. Really, what's happened one chapter I called the Plague to describe, you know, that takes us up to actually mid July when they finally took the book away from me. But I think

I'll tell you one thing that really hits me. One of the themes of the book is how the US and China are are pulling apart and is going from being you know, uh, interdependent to what's now the term

people use strategic rivals. And you saw it in terms of COVID and you know, in terms of climate, but in terms of COVID, this was one occasion when you really needed international collaboration and working together, and instead we've got acrimony and lack of flow of information and people all over the world have paid a cost for that. And that's such a good point because it's very similar

with climate in in a President Trump presidency. I mean, China has agreed to some kind of emission standards and that neutrality by sixty it's still really vague, but the country is committed to it in a way that the U. S has not. What does that mean for Saudi Arabia? What does that mean for Russia? What does it mean for the frackers in the US? Well, I think it

means obviously China. As you say, it's it's vague. China has had the world's solar and half the world's win but it's still adding three coal fired plants a month, So in six is pretty far away. But I think for but you know, even while there's great divergence. And we heard it at the end of the debate the other night, of that incredible debate. I guess it was a debate. Uh. But in fact, the change is happening

in any way. You know, you look at the electric power industry in the United States, it's moving towards being uh, lower carbon and you know across it and more wind and solar, greater efficiency and so forth, natural gas replacing coal, which has been the biggest contribution to reducing our emissions. So that's happening for Russian Saudi Arabia. Uh. You know, putin just this last week said, you know, it's great,

oil is only thirty of our budget. Now, well that the reasons is they're selling less oil and the prices down. But nevertheless, Russia has had problems for twenty years of trying to to to reform its economy to make it more diversified, and it's just, you know, really not done it.

And Saudi Arabia has a policy of saying, well, we really got to diversify, not only because of what's happening with climate and Paris and so forth, but because population is under the age of thirty and they need going to need jobs, and but they find out it is hard to diversify an economy that is so heavily dependent upon oil even before COVID, and one of the things you discover is you need oil revenues in order to

diversify away from oil. So I think I think both of those countries, uh, you know, it's both what's happening on climate in Paris and it's also this weak oil market that is a result of the persistence of the of the virus. And Dan, what do you make of

that job's question? Because I feel like we hear so much from those who talk about sort of a new green economy and a green new deal and all those sorts of things, that there is the potential to unlock this whole new economy and ecosystem, especially when it comes to jobs, if there is more investment, uh in alternative energy. What have you discovered is as you've thought about that, well, the question is who's going to make the investment. It's happening,

I mean wind and solar. You know, there's a solar revolution, there's a shale revolution, there's a solar revolution. Costs of solar have come down tremendously in considerable part because of Chinese manufacturing scale. But those costs have come down, wind has come down, uh, and there are obviously jobs they're they're also over. Before COVID, there were over twelve million jobs in the oil and gas industry, So there's a

kind of balancing between the two of them. I think the challenge about we hear about, you know, green stimulus. Joe Biden has a you know, two trillion dollar climate plan. I think there is but listening just to you know, just before I came onto the condition of the economy and uh, the need for recovery and particularly small business, uh and just the economic wounds, I think that's going to take a lot of government focus for the next couple of years. So there's clearly going to be a

step up. If Joe Biden's president, will be more money going into renewables, there will be more money supporting electric car sales and charging two things and things. But I think also we're still going to need a kind of really really heal the wounds of this protractive of a crisis from the COVID. Dan, I am going to ask you, I'd feel like we'd be um, we'd be silly if we didn't ask you, you know, the energy markets they

reacted obviously to news from from the president today. A reminder that politics and energy and global markets they're all intertwined, right, they become more intertwined than ever. In the oil market is a register of what's happening in the economy, of course, but also politics and uh this question of what happens with the virus and the resurgence of the virus is weighing heavily on on the oil market because it means things shut down, less demand, So all those things are

bound up in the price of oil right now. By the way, just one thing interesting to mention. You know, a long time ago, President Wilson, when he was at the Versailles Treaty negotiating the treaty after World War One, every you know, they said he had a stroke. It turns out that he actually had the Spanish flu. So we've had another president who had once been in capacity.

Well we don't know that this president hadcapacitated, but it really affected the I think the outcome of the First World War because Wilson was kind of out of commission. Oh that's really interesting. I didn't know that. Um. It also is interesting in terms of the balance of power that shifts, um, if you relate kind of the demand for COVID for who's in power control. And something that President Trump has done has been a huge champion of

energy and dependence here in the US. UM in some ways very much helped broker the deal that OPEC plus wound up doing, kind of taking Sadie's to the table and say, look, guys, you gotta cut production. You've gotta

get this done. Um. How does that geopolitical dynamic shift when we start talking about things like solar and wind instead of well, you know, the big winner, Uh, Actually, in some ways is China, because China h first of all, unlike the United States, which is now essentially self sufficient, China imports its oil and they regard that as a really big problem. So if there's a big shift, they

report less oil. The other thing is that they're very well positioned in the supply chains for what they call new energies. Sevent of solar panels come from China to the entire world. Uh, the lithium ion battery supply chain

rare Earth. And this is where where as we were saying things come together, this is where geopolitics and energy transition come together because the question of the supply chains and the scale of the new materials that will be needed will kind of focus on a different, different view of dependence, not about oil, but about the elements of of for a renewable, more renewable energy economy. Absolutely, So what's the next big sort of leg of this new energy?

Where's the uncharted territory as it were, So they sort of use the metaphor of your book, what should we be looking at next? Well, I think on the technology side, it's you know, will there be breakthroughs, big breakthroughs on big batteries, Will there be breakthroughs on on carbon capture? Will there be breakthroughs on hydrogen? So that's on on that side. I think actually where the U. S. China relationship goes will be very important for the future of energy.

So those are a couple of things that I would watch. And then what kind of recover economic recovery do we actually have coming out of this COVID crisis which is now clearly more extended, uh than you know, people would have thought when they left their offices on March fifteen and thought they'd be back in a week, right, right, Absolutely, now remember those days. Yeah, the world it is fundamentally changed.

That is. If I can tell you one other thing, digital digitalization, seven years of digitalization has been compressed into seven months. The nature of work will change and is insofar as work becomes remote and at home. One thing I think we all notice is the boundaries between work life, work balance. That those boundaries get a lot less clear when you're in a digital world. Absolutely, that is true.

Dan Jurgen, you're such a gentleman. Thank you for spending some time with us this afternoon on a very very busy day we know. Congratulations on your book. It's called The New Map Energy, Climate and the Clash of Nations.