One Word That Triggers Putin

of it. So we're going to tap the brain of an expert who The New York Times calls quote America's most influential energy pundit, but Bill Downa first, I need to talk to Bloomberg's most influential markets fund in you. But you, I'm very jealous. You're going to London next week? What is up with that? Am my more influential than you are. I'm starting your bone there. You know you can? Yeah, yeah, yeah, yeah,

I am. I am going to London and I'm so excited to see all of the London colleagues I've never even met in real life, and I've never been to the Bloomberg golfice there, so um. But then at the end of my trip, I'm going to a wedding in a castle. Oh that's cool. What's the name of the castle. I have no idea. I think actually people live in it, so might not have a name. It's not where it's not where the Queen's living, is it. I think it's a royal adjacent wedding. Yes, do you have one of those?

You need one of those hats? Fascinating It's called a fascinating. Yeah. I wish I could pull that off. But yeah, and maybe I need to go shopping for a fascinating And you also need to go to the myth reum in the basement of the Bloomberg building, the temple to the Roman god Mithros. Yes, I heard about that. Yeah, then you'll be at a castle and a Roman temple. You'll see that that London has to offer. Yeah, how cool is that? But I want to bring in our our

guests this week. You just introduced him and want to welcome Daniel Jurgen. He's the vice chairman at SMP Global and he's also the author of the New Map Energy Climate and the Clash of Nations. Welcome to the podcast. Glad to join you both. Thank you. I have to say your team sent over a copy of your book before the podcast, and I highly highly recommended. I love stuff like this. It's all about geopolitics and the role that energy is playing, which obviously has been a huge

topic this year. So maybe just to start out very broadly speaking, you start the book book actually saying there's this growing coldness between the US and China and Russia, and I want to ask you about energy's role in this growing coldness. Energy is a very important part of it. Obviously, I focused in the book on really how this war began in Ukraine by explaining the focus and the conflict between Russia and Ukraine, uh, and how that ties into

natural gas in Europe and similarly, of course China. The big geopolitical story the twenty one century is the relationship between the US and China, and that is getting colder and more difficult, it seems almost day by day. You know that. No, I read your book too. I agree, very excellent book. Uh, And I know you have several others, so we've got a lot of reading to do, Wildonna to catch up with these, but well, I think Bill Donna just has a long plane ride which still get

us started. I'm loading them all on my kindle until you fall asleep. But you know what I thought occurred to me Daniel. As I was reading it is, um, what's a company that sort of you know, new Cold War if you will, or however you want to describe it. Is America's growth of its own domestic energy industry, the

shale patch and the tracking and whatnot. And I wonder, you know, it almost seems like going from sort of being renowned as the biggest consumer of energy in the world to now made your producer almost escalates the geopolitical tensions. I feel like it does. It almost make sort of America's influence, um, if not weaker, uh, but different in this environment since we are such a big producer. Now. Yeah, I think it well, I think that's that's absolutely right.

You know. I deal with a lot of things from you know, Ukraine to climate in the book, but I start with shale and because shales really had a much bigger impact on geopolitics and people recognized. In the story I tell in the book is when I was in St. Petersburg at a conference where Bootin was speaking, and uh, I three thousand people there and I was told to ask the first question. I started to ask a question, I mentioned the word shale, and he started shouting at

He's saying shales barbaric. He knew that US shale was a threat to him in two ways. One because it meant that the US natural gas would compete with natural gas in Europe, and that's what we're seeing today. Secondly, Uh, Mike, it's your point because this would really augment America's position in the world and give it a kind of flexibility it didn't have when it was importing its oil. I'd love to know who decided that you get asked in the first question. That's the talk about drawing the church

straw there. That's uh, that's not a position I'd want to be in. Well, it was, I will tell you. Um. It was started off innocuously that I was gonna ask him a normal question about UH diversifying your economy, and I said shale And you know, to be shouted at him by him in front of three thousand people are really unpleasant experience. The other thing, and now that we're talking about I realized the other person on the stage was Chancellor Merkel, who was chance of Germany for sixteen years.

And you can see the enemy between the two. But you know, Merkel is now being criticized for UH policies like shutting down nuclear that to Germany being more dependent on Russian gas, and you know, the sort of judgment of history is shifting a little bit. Yeah, I actually wanted to ask you about this because I noticed that early on in the book you had actually mentioned that Marco said about nord Stream that it linked Russia in

Europe in a safe and resilient partnership. And then later on, as you continue reading you you lay out that she says, uh, you know, actually putting his living in his own world, where her judgment maybe was shifting a little bit or

changing a little bit. So I wanted to ask you where everybody sort of went wrong or where people made mistakes and over the last ten years or so, well, I think that's a really important question and what I've been thinking about because you know, now there's a kind of revisionism that we shouldn't you know, the world shouldn't have traded with Russia, shouldn't have tried to integrate Russian to the world economy, particularly as Putin got more and

more authoritarian. But you say, well, what was the ald term native to leave it festering there? I mean, the best thing was to get it anchored in the world. Uh, but you know Putin, I mean, he's been in power now almost as long as Joseph Stalin, and I think he was becoming more and more authoritarian. And people who have known him over the years said that that COVID

changed him. He was isolated for two years. He wasn't meeting Western business people, he wasn't meeting Western government officials, and so forth, very isolated with a small group of people around him. May be ill and developed this incredible paranoia, uh, and this anger that led him to unleash this terrible war. So I don't think there was an alternative to not trying to integrate Russia into the world. But obviously what's happening now is the world, at least the Western world,

is slamming the door on Russia. You know, it's such a thing, Daniel. I feel like this conflict between Russia and Ukraine has lasted longer than most people expected. I think people I think, if I can jump in, like longer than anybody expect, right, I think most people thought that they would go in and take over in a

matter of a couple of weeks. If if not sooner, well, well, I mean, just to tell you, I mean putin thought it was gonna be three or four days, right right, So as it drags on, I'm just trying to wrap my head around. Um. You know, Luckily the spring weather in Europe now is sort of made the the energy situation a little less acute than it would be otherwise. Obviously, you know, uh, they still need natural gas for electricity, um, and you know, keep the factories running and the lights on.

But as it drags on closer to the fall and winner, I mean, is Europe going to be able to just soldier on without uh sort of succumbing to Russia uh and their demands. Um, when it starts getting colder again, it is what do they need to do to sort of be able to do that? Well, I think that's a question that's really weighing now because in terms of oil, there's enough oil crude oil in the world. Uh, you have to move it around, but between strategic stocks demand

being down in China, you can manage that. When you get into products site diesel, it gets harder and then uh, Mike, you're going to the hardest thing was natural gas, and that is exactly as you go into the winter. So the big question now is can you feel, can they feel storage so that that they can get to the winter and, by the way, not only stay warm, but

keep industry operating. And I think, you know, we can say that Putin made a series of decisions which kind of were rational, that his army was really good, that Ukraine wouldn't be able to resist, that the US had just gone through getting out of Afghanistan, and was deeply divided, that Europe was so dependent on his energy that they would say, Okay, this is terrible, but life goes on. Uh,

and none of that. But I think he's still calculating, and he said it that ultimately this energy disruption and we are in a huge energy disruption at this huge disruption of energy markets would be such a big threat to the European economy that that that the coalition that now exists would fall apart. I think that's that's his wager right now. And uh, and the Achilles Heal is

what you pointed to. What happens is uh as Europe goes into the fall and winter, right, so you can still sort of counting on that to happen, I imagine at this point. Yeah, and we've had at least one German very prominent industrialist is said, you know, this is too dangerous for the European economy. We should negotiate something with Putin. And before we get into more of the intricacies, I actually wanted to ask you to lay out because in your book you you really presciently lay out what

happened between Russia and Ukraine. I mean you go back centuries really, but you know over the last eight to ten years how important that's been. The war that broke out back when Russia invaded Crimea. Can you just talk about that and just lay out for our listeners what happened. Yeah, I mean there's always been this question and the Russian narrative there wasn't There is no Ukraine. Putin has said

that Ukraine was simply part of Russia. And he published last summer bizarrely a five thousand word essay, particularly bizarrely in terms of what's happened now san Ukrainians and Russians

are brothers. He had this mystical Slavic notion, and so he had described the breakup of the Soviet Union as the greatest geopolitical catastrophe of the twentieth century, and so he never really accepted the breakup of the Soviet Union, particularly Ukraine, because that was part of Russia and it was like the West, particularly United States, had taken it away from Russia, taken away from him, and so this relationship was always very acrimonious, uh really from the nineteen nineties,

but particularly when Putin came to power and there was a series of crises over gas and Ukraine was, you know, not a very is a pretty corrupt, uh country with a lot of conflict going on in internally and so forth, and a lot of Russian efforts to kind of dominate the country, and so uh, Putin really you know, regarded it as part of his mission as he became maybe more and more megalomaniacal uh, that Ukraine had to be

brought back into Russia, and he started with primea. He's and ever since fourteen there's been a war going on actually which one doesn't realize, but the Ukrainian army is as good as it is because it's been fighting a war in eastern southeastern Ukraine and so um, you know, these tensions were just there and they remained today where he says there's I mean, he said it to people, He said it to George W. Bush One said Ukraine

never existed as a country. Two thirds of it it was ours, and one third of it belonged to the Austro Hungarian Empire. So it was really a question of the refusing to accept the settlement at the end of the Cold War, refusing to accept the breakup of not only the Soviet Union but the Russian Empire. And that unsettled question was and I, as I wrote in the book, that Ukraine was likely to be the issue that blew

up between Russia and the West. Um that it took this form as something that one, you know, might not have expected. Um. But um, you know, this is what sort of boiled up in Putin's mind during his two years of Covid isolation. But as you say, uh, it was, it was long and coming, and it always been festering in his mind. He'd always been denouncing that. Daniel. One thing that stuck out to me in your book is you mentioned the notion of sanctions and how they can

be sort of a wasting asset. I think is the words I believe it was. Uh, George Schultz, you were quoting the Secretary of State under Reagan about how well, yes, you can impose sanctions. Um, but they sort of have a a short shelf life, so to speak. You know, if you try to lock Russia out of getting certain technologies, well they'll they'll develop their own, um that sort of thing. And I wonder if we when we look at the sanctions, Uh, so many sanctions that have been placed on not only Russia,

but uh, you know, the the oligarchs, the billionaires of Russia. Um, is there any risk of these sanctions do you think being a wasting asset? I mean, you know, I was, I was. I always found that comment by George Schultz very wise because there, you know, there is a tendency for the United States to just say, well, let's just put sanctions and that will solve the problem. And then well Ran is still there, Venezuela is still there. Um. I think, hey, or we've never seen sanctions. They have

two characteristics. One as massive as they are, and too it's not just the United States, but the United States and Europe together and some other countries, and so uh, the impact on the Russian economy will be enormous in Russia, really will you know, the the door to the West is closed and it will really have to look to China, um will they wear away? I think that goes to some of the questions. A kind of basic theme in in your podcast is what happens to markets and you

know how turbulent is it? And this is a contributor, a major contributor to the energy crisis or energy disruption we're seeing with all the impacts on the economy and of course tying into the struggle over inflation. But I think this is I think at a level that's never been been done before. And uh, it was interesting because at the beginning, remember talking to people in the in the US government, they said, we're excluding energy because Europe

is too dependent and so we can't do that. But now the Europeans themselves are saying we don't want to send to a fifty billion dollars a year to Russia, and so most of German countries, led by Germany, actually

want to put on sanctions on energy as well. Before we talk more about the US and China, I want to ask you about what the future of oil and gas exploration looks like when it comes to Russia, because you have this passage and actually a really great picture where you show I think it was a titanium flag that the Russians planet at the north pole to sort of stake it and say this is ours and this is where we'll be looking for oil in the future. So can you talk about that because it's that that

is like so striking to me. Yeah, it is. It's uh, well, really there are two parts to that titanium flag. This Russian uh mariner went down and planted it at the you know, the on the seabed because the Russians want to claim the Arctic, and of course that will looks like it's going to be a new arena of competition, and the US has been slow to wake up to it. But you know what do they call it the high Arctic? But uh and for Russia, offshore oil was a major

new frontier. But I think they're not gonna without Western technology, without the Western companies who have said, you know, they've said so long, we're out of here. I think it's going to be very hard for them to develop the off shore or or developed further their Arctic ellen gy and so forth. So I think they'll be more focused on their traditional areas in western Siberia and they probably have the you know, the capabilities to cantinue to produce.

But I think they're going to produce. I think their production will go down, and so Russia will not. It will be a very important producer, but it won't be an energy superpower, and it won't be able to tap into the globally economy, technology and capabilities and partnerships that it did up till February. I love that idea of just dropping a flag to to claim ownership. You know, what is it? Technically? Is it Canada? I guess it's

a little titanium flag. And I mean, but the funny thing was I think it was a Canadian foreign minister, which also has a big interesting Arctic center. What is this is? This is? This isn't the nineteenth century. You don't go around planting flags, but in a way putin lives in the nineteenth century. The fair point, you know,

Danniel will bring it back to the US energy industry. Um. Uh. One thing in your book that I found interesting and I don't think a lot of people appreciate this that the notion that will yes, um, you know, these shale producers in Texas are producing a tremendous amount of oil, but are refining capacity in this country isn't a perfect match for all that light suite Texas crew that were actually better set up to refine heavy crew from overseas.

So I'm curious. To me, I'm guessing you know, the capital intensity and the time intensity of of upgrading that refining capacity must be h harder even than you know, drilling and exploring for oil, you know, more more capital intensive and more time intensive. Is is that going to change? Do you think where you know, some more refineries will maybe get retrofitted or come online that will be able to process more of that shale oil. And would that be the in the best interests of this country? Do

you think? Well? I think, um, it depends. I mean, you know, the basic theme of your show with your podcast is markets, and it's kind of efficient. This is efficient markets at work. It economically makes more sense to export that oil somewhere else, uh, and then import the crew that fits the system. You can run you know, ill fitting crews through refineries. But it's just a lot less efficient than and costs are are higher. I think I think to some degree we'll see you know, that retrofitting,

that investment go on. But the US made such a huge investment I think we estimated like a hundred billion dollars to get our refinery system because we were an importer of oil to be able to take those uh, heavier crudes and so forth, and so it takes you know a lot of money to change it. So uh, but you know, it was a big political battle to get the crew to export band lifted. It was a relic of the nineteen seventies that you had this band.

It really didn't you know it actually, I mean if you think markets are the best way to do it, then it didn't. It didn't make sense. And without lifting that band, we would not be able to produce as much oil as we are doing because given our refining system, it just you wouldn't have had the global You needed the global market to just to justify the continuing investment

and the growth of production. So do you think the American producers, I mean, clearly they must be reacting to these elevated prices and uh increasing production to some degree. But well, when you think about it, you know, if I were a CEO of an energy company, and you know, first I lived through the crashing prices in like two thou two thousand and sixteen, and then the actual negative prices during the covid epidemic. I imagine that's got to be causing some reluctance um to sort of go in

with both feet and yeah, yeah, exactly. I mean in the last decade we saw this incredible growth where the US was at one point adding two million barrels a day. It's been a much more muted reaction for exactly the reason you say. That's one of the big reasons. Because prices go up, just like the title of your show, they go up, and then the other side of your the title of your shows that prices go down, and uh, and they've been through those cycles. They've been through two

down cycles. So there's that factor at work. Second factor is investors are saying to them, don't go hog wild. You you know, you have to return money to us. This is an investment. This isn't the gift. And so uh they are uh, you know, returning their cash flow because investors are, uh, are are demanding it. It's like a new social contract between the producers and the investors.

And the third thing is the same supply chain problems that would be definitely the rest of our economy or be deviling them, not enough pipe, not enough truck drivers, you know, not enough crews to work on things, and so they're competing for workers with other people. So, um, you know that supply chain is is a big problem. And it's just came back from Houston. People were saying, well, you know, well that might have taken six months to get the production, will take nine or twelve months to

get the production. So productions going up. Uh. Maybe at the beginning of the year people thought it would go up by a million barrels a day, which is a big number. Now you know, at least some of the producers are saying more like US production will by about six hundred thousand barrels a day. So it is going up, but it's you know, people are not shall we say that this uh irrational exuberances out of fashion and the

oil patch. That makes sense. And just to give listeners a bit more background information, can you as you lay out in the book, can you lay out how it is the US became such a big oil and gas producer. Yeah, it's really it's it was. It was a revolution. You know, we had eight presidents in a row, starting with Richard Nixon and uh saying right up through Barack Obama saying we want to become energy independent, and it seemed a joke,

it was never going to happen. Uh, But there was this technology called shale, which really involves sort of umu hydraulic fracturing as it's called, combined with horizontal drilling, and uh, there was one really obsessed individual. You know, it's so it's so interesting when you you know the role of obsessed individuals in economic change, named George P. Mitchell, who was convinced if you just worked somehow, even though the textbook said it was impossible, you can make it work.

And for twenty years, twenty five years, people scoff. But then it did work. And uh, you know, even his own company people were telling him not to spend money on it. But if he hadn't spent that money, I'm not sure that we would have been where we were. And then so in the early two thousand's you started to see kind of wildcatteries as independence as are called,

small companies starting to adapt that technology. And then people said, oh, us, natural gas supply, instead of going down, is going up. And then they said, well, if it works for gas, maybe it works for oil too. And about two thousand and eight, two thousand nine. So this all really happened in you know, in that period from around two thousand and eight till you know, up until that's when it all really began, the shale revolution, and it just took

the US from an entirely different position. And if you had told people in two thousand and two that the US was going to be the world's largest oil producer, larger than Russia, larger than Saudi Arabia, the world's largest producer of natural gas, and this year the world's largest export of L and G, they would have said, you're

living in a fantasy world. So I know, no one I know likes to make predictions on prices, Daniel, but I'm getting the vibe that, um, from where you're sitting, Um, it doesn't sound like we should expect these desalivated prices to show much improvement in the near future. Any any

thoughts on on what we can expect. So, you know, one of the things I've seen from studying the industry is that it about every three years is a consensus about what's going to happen, and then something entirely different happens, particularly when it particularly when it comes to price um. But you know, I think that before we went into the Ukraine crisis, uh, the Ukraine War, we were already in an energy crisis. And it started last autumn in

Europe and Asia with much higher prices. And that's because supply demand balance had become very tight, because the rebound from COVID had been quite strong, and you simply had had what I started to call preemptive under investment, just not you know, picking up one of the things we're talking about, not enough investment around the world. Uh. I think that condition still persists, and I think uh, Russian oil is not gonna rush, is not going to be

producing as much oil. So I think my expectation would be tight markets. And some people you know, have much higher, you know, higher expectations of price uh. And you know, because you know this, no one thought this war would go on for as long as it has, and you know, is it may be going to go on much longer? And is Putent going to use nuclear weapons? You know, just there's so many questions you don't know the answers to.

I'd say the big counter fact out there. And by the way, and if China comes out of its COVID lockdown. Then that starts to push demand up. And that's why you know you've seen prices, you know, they've been pretty volatile, but days it goes up. It's because Shanghai is ending its lockdown. Um. Uh. But the other side of it is um, the growing, the growing, you know, way to voices about recession and downturn. And if you do have a downturn, uh, you know significant recession, energy prices will

come down along with uh, you know, other commodities. But commodities are tight and natural gas you know, this expectation this summer is for higher you know, natural gas prices to remain high. So I think that the one factor on the other side is the recession, is the FED and with the central banks do um. But I think that if you look at supply demand balance, it does

say we're in a period of tight supply. Well, you're saying the book that the world has grown to worry about peak demand or how long consumption of oil will continue to grow. So I want to I want to ask you to make that prediction as well, like how long will it continue to grow? Okay? Well there, um, you know, there were some people during the lockdown we thought world oil demand had peaked. Uh. My response was, you shouldn't make generalize about the future in the middle

of a pandemic. Uh. And Uh, I think that we've seen I mean what coming out of the pandemic, We've seen growth, and we have growth in the developing world, in emerging markets, add two billion people, more demand will continue to grow. So I think it's very reasonable at this point to expect world oil demand to continue to grow until the early twenty thirties in that period and then kind of reach a plateau and maybe start to to to slope downward. But you know, that's you know,

maybe ten years away from that. But I think that growth is still there, and I think natural gas actually consumption grows for a longer period of time. And that sloping downward in in ten years or so, is that because of the electrical vehicle Electric vehicles will finally be

sort of more economical. Yeah, exactly, that that e v s will become much more common, although there's still now the new question is about what about the minerals and the medals that you need for a highly electrified society. I wanted to ask you about that. I mean, I'm I'm a worry work by nature, you know, or the new geopolitical tension is going to be about, you know, the supplies of nicol and cobalt and all the other modems.

I think so, yes, I think you're quite right. I think, uh, we'll have a you know, oil and gas have been wrapped up in geopolitics. Uh, you know from the beginning. I think that now these minerals, which people didn't think much about unless they were in the business or near the business or investing in the business, will also be much caught up in geopolitics. We're doing a study now on copper and just uh, you know how kind of said, okay, if you have these goals for how much copper will

you need? Uh? And it turned out you'll need a lot more than we have now. And where the minds, and you know, they're in Chili there in Peru. Uh. It takes a much longer time to open develop and open a new mind than it does to bring on even an offshore oil field. So uh, I think I think that's kind of looming out there, and that may affect the cost curve for for wind and solar but I think, uh so that's part of it. But I do think Yeah, as you get more electric cars and

as kind of population world population starts to stabilize. I think those are the factors that would mean that you know, and more efficient, that demand just starts to uh flatten out demand growth. I have a two part question for you, which listeners will know. Mike is very well known for having multi multi, multi part questions. So do I need to get a penny? Possibly? No? No, that was like

two part question is amateur? Okay, I'm piling on. So I want to ask you to grade how what grade you would give all of us in terms of the progress we've been making when it comes to renewables. And the second part is just because we were just talking about international developments and how that plays a part. But in the book you had said that COVID could actually lead to more failed states, and I want to ask you how that also plays a role in this right.

So on renewables, you know I spoke before about the shale revolution, there's been a solar revolution. Solar costs have come down. Uh. It's interesting. Wind and solar as modern industries about half a century old, but it's about ten years ago when they started to really achieve scale. Uh and costs came down so dramatically, and so that's been very significant. So there, you know, most of the new capacity that's been put in place for US utilities is wind and solar, and so I think you know that's

been a big success story. Uh. They are intermittent, so you need something else like natural gas to balance them out or otherwise you have brownouts. So uh, and I think you know, we're now starting to see the development of offshore wind, which is on a whole different scale and um, you know it's more advanced in Europe. Um. But by the way, um about the solar panels are made in China and their tariffs on them, and you know, so that gets back to our kind of geopolitical question

about as we move in that direction. Um. So I think that's uh, that's part one of your question. Part two. Uh. I mean, covid is really has been pretty devastating for you know, many economies in developing countries that don't have the resources like the United States have and don't have a printing press actually, and so I think it's created a lot of hardships for a lot of states right now, Sri Lanka. I mean, there are other factors at work too.

Is is just its economy is just broken down. And uh so, I think the recovery from uh COVID, I mean, there's an economic recovery that has to go along with the with the with the health recovery. So I think, you know, I think the economic scars are going to be there for a longer time. So if we do have if we do end up seeing war field states, how much more difficult does it make, you know, to to mind Cobalt or any of these other well either

failed states or um states swept up in populism. And uh, we've seen some elections in Latin America that point in that direction. Uh you know there there will be more of those. Uh. If you look at the political map of Latin America, it's not people. The people who are who are in power are not people who believe in the necessary the free flow of capital and investment and so forth, and um so I think and they will want to, you know, change the terms on which people

have made investment. And so I think that will I think those political factors will hinder investment and slow down the investment. And you know, Chile has a thirty five year old president who wants to change the terms under which companies operate. Chili is the world's largest producer of copper. Uh, you know, and and therefore, if the politics change, companies are more reluctant to make investment and are more cautious.

So I think that's something to watch that. It's not don't it's it's you have to pay attention to the politics that are happening above ground, right, Daniel, You mentioned, um how Germany had shut down their nuclear power plants. Um. I guess under Angela Merkel, and I believe that was after Fukushima, when they sort of got freaked out about the Fukushima incident. I think that Mike, I think that's the right word, freaked out rightly. So I can't blame him,

I guess. But at the time, but is um, do you anticipate any change of heart on on nuclear Yeah, yeah, there's been. Um, there's even been a change of heart in Germany. Who we even had people in the Green Party saying it may have been a mistake to shut down the nuclear uh. And uh, you see, what you see now is a lot of focus on small nuclear reactors. We just had our big SERWEE conference in Houston. I heard three Industrial is just kind of almost talking like

they expect that. By the twenty thirties, you had President Emmanuel mccrown and France who came into power saying we want to downplay nuclear and do more renewables. He's just now set elected for a second term. He wants to UH six new nuclear reactors and maybe another eight. Even

Brittain has talked about it. So I think that and in the US there's something like UM sixty at this point companies and research groups that are working in nuclear And I heard the other day that something like four billion dollars has gone into kind of venture capital funding for fusion not vision. So I think that UM and and the U. S. Government is putting money into, you know, into these new nuclear technologies. So I think there has been a turnaround, not an embraced by any means, but

a turnaround. And I thought that particularly that maybe small nuclear reactors will be economically manageable by the way UH to UH to deploy, and sense that it needs to be part of our electricity supply, by the way the countries that's the biggest international vendor kind of nuclear power and uranium happens to be a country called Russia. What could go wrong there? Right? Yeah, yeah, it's a reliable supply. Daniel.

You you lay at all these characters in the book who helped revolutionize boil and gas exploration in the US. So Harold Ham or Sharif Suki, and I want to ask you who the Harold Hams are of the renewable space today? Well, uh, they are today. Well, obviously the person who has you know, this is no secret. The person who has trans form the automobile industry is Elon Musk.

And I have that wonderful story in the book about J. B. Strabo, who was this technology as electricity enthusiasts, who had lunch with them in two thousand three and tried to sell them on the idea of electric airplane. Says I'm not interested as an electric car, and must says I might well be interested in that. And uh, Musk a couple of years ago said it had not been for that lunch in Los Angeles, there might not have been a tesla. I mean, it's just the contingency of history. And look

at now all the automobile makers are all staying. By twenty five, they want to go all electric or mostly electric So I think he stands out there the most in terms of in terms of wind and renewables. I mean, I I mean there's a pioneers. I mean I think there you know, people who are playing UH leadership roles, but it's I think, I think the breakthrough period is

behind us. I mean, now these are well established industry. Well, Daniel, you're the one who brought up Elon musk, which I feel like is the perfect segue to our craziest things of the week, because mine is is UH elon related. But Daniel, what a treat to catch up with you. Daniel Jurgen is the author of the New Map, Energy Climate and the Clash of Nations. Also about a half dozen other books, right, yeah, there are a few weather as well. And he's the Vital Quest vice chair just

to UH and the vice chairman of SMP Global. And it's a better real honor to to get your thoughts on on energy markets, Daniel with you. It's been great to talk to both of you, and thanks for the opportunity. But but first we're gonna get your thoughts on the

crazy things in the markets. We can't let you go without. Okay, well, I think the thing that's on my mind, is um kind of this schizophrenic US policy about energy, Uh on the one hand, wanting more production on the other hand, UH kind of beating up on you know, on the industry. And you know, Germany has been able to work out what to do about oil because they had this dialogue between government and the private sector, and we don't have

that in the United States. And I think when you're in a crisis and in a disruption, you ought to do that. So I'm not sure I would put the label crazy on it, but it is UM is something that really stands out that you know, we need to prepare. It may not happen, but we need to prepare for greater disrupt right. You know, politicians love to use gasoline prices as a blunt tool to to beat up their their opponents with. And you know, obviously Biden's getting a

lot of abuse about gas prices. But is there is there any blame to be shouldered on the administration? I mean, I get the impression that US producers have some spare capacity that they could be using. They don't need sort of looser regulations to increase production. Well I think, I mean, I think they need confidence that if it goes back to what you said earlier, that if they invest, that the rules of the game won't change two years from

now when prices come down again. Um, and you know they I mean, they would give them confidence to invest. I mean one thing, if you're gonna invest, you need confidence. I think we could be you know, we could be talking to Canada right now and uh, you know more we need more oil. We could get it from there. But it is I was talking the other day to a Democratic congressman and he kind of sees all of

that and everything we said. But you know, you gotta understand we have an election in seven months, and of course gastling prices really do hurt a lot of people, and so uh, but it's very familiar because it's it's the same language. We recently had a you know hearing, a big dramatic hearing, you know, where their line up all the executives and you know, accuse them of price

doudging everything. And I found actually looked at my previous book, The Prize, and I found that the first congressionally hearing on the high gasling prices was in n really and you know what, it was the same script that's hilarious. That's really good. Um, all right, well, Donna, I will give you my I tease it a little bit. I'll give you my crazy thing. I will not make you play prices right this week. Usually I make build down to play prices right and guess the price of what

I'm talking about, Daniel. But does I'm not good at it though I don't enjoy the game. Well, let's see, maybe I think you can guess this one. I still have to make it a game somehow. So, Uh, Elon Musk, as you put it out, brought into the program, Daniel.

It's obviously got a little side endeavor going on where he's trying to buy Twitter, and then he's sort of pulled the plug on the deal, saying he's not sure how many of these accounts are really actual humans and how many are fake bots, And so the CEO of Twitter put out a very elaborate long list of tweets explaining they're how they deal with bots. Uh, and Elon Musk replied with one emoji, Bia, do you know what the emoji was? I don't, but I'm going to guess

it was good. Guess it only makes sense for there is It makes then the visionary of electric vehicles, of space exploration and the richest man in the world. Uh, replying with a with a poop emoji. So Twitter diplomacy. Yeah, so what do you think do you think he wants to buy Twitter? Uh? Good question. I don't know what do you think? I was struck by a bluemgarticle earlier this week they talked about the debt burden that that

comes along with Twitter. I think it's something like thirteen billion dollars or you know, just the annual interest rate payments are something around a billion dollars. Just he must be thinking about that now after he had rushed into the deal so quickly and watching the share price reaction in Tesla, I think might have made him change his tune a little bit. Yes, yes, yeah, Well I have

the craziest thing in the electric vehicle market as well. Okay, at least I think it's in the electric vehicle market. But I had never heard of this company before. But my craziest thing. And and just to to lay the record tread there were so many crazy things this week. We had Walmart and Target I think each had their largest one day declines in share price since seven and just massive amounts of crazy stuff just happening on a

daily basis. But there was this Bloomberg story about some of the wealth that has been coming out from the spack market. And so there's a company called Arrival, and maybe Daniel can tell us about it if if he's familiar with it. But the founder or the CEO or whoever is behind Arrival, he was worth the eleven point seven billion dollars a year ago and he's lost nine of his wealth. So there's just been massive losses of wealth,

you know. But I think there were a couple of tycoons in China who had lost similar amounts of the CARBONA founders all so had lost huge amounts of wealth, and so just it's that that market has created. Yeah, I mean it is interesting. I mean this happens that you know, people thought they had all this wealth, and you know, they thought it was sort of like golden Fort Knox, and it turns out it was paper. And so I guess we're gonna see a lot of fortunes

just uh pulverize. And that's even before we start talking about crypto, where they it's it's it's going off, Okay, I have when I have I have a game I've played I just mentioned to you, which uh is. There are a lot of teslas on the street in Washington, and so my hobby is to account how many tests I see in a day, the numbers going up. Okay, is it really? Yeah? It's at and Lelan is a new uh, a newfound conservative politically leaning, so curious to see how sales do I don't. I don't picture. I

don't know. I picture a lot of Democrats buying those cars. I don't know if he's uh actually that you're right, I mean, you're right his that's a really good point that his uh, his market may not be where his yea, where he is politically currently. Yeah, he might might regret some of this, but we'll see. Maybe we'll get him on the show of all, Donna and he can answer all our questions, the invitations out right. But Daniel, you're

going again. Thank you so much. Vil. Donna and I were not exactly book critics, but we both love the new map. Big endorsement for us, great storytelling, great writing, and just um really putting it all together. Everything going in around the world now with you Tew, politics and energy, it's um. The two are really joined at the hip and and you really did a good job of putting it all together. Well, thank you. I appreciate it. Thank

you for joining us. Meant thank you. What Goes Up will be back next week and so then you can find us on the Bloomberg Terminal, website and app or wherever you get your podcast. We love it if you took the time to rate and review the show on Apple Podcasts, so more listeners can find us. And you can find us on Twitter, follow me at reag Anonymous. Bildanna Hirach is at Bildanna Hirach. You can also follow Bloomberg Podcasts at Podcasts. What Goes Up is produced by

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