Daniel Yergin – Oil Explains the Entire 20th Century

Speaker 1 Today I have the pleasure to chat with Daniel Jürgen. He is literally the world's leading authority on energy.
His book, The Prize, won the Pulitzer Prize about the entire history of oil.

Speaker 1 His most recent book is The New Map, Energy, Climate, and the Clash of Nations. Welcome to the podcast, Dr.
Juergen.

Speaker 2 Glad to be with you.

Speaker 1 My first question is, a book like The Prize, it's literally a history of the entire 20th century, right? Because everything

Speaker 1 in the last 150 years involves oil that's happened since then. How does one begin to write a book like that?

Speaker 2 I think you begin by not realizing what you're doing. I mean, I agreed to do that book and I said I'd do it in two years.
It took me seven. And

Speaker 2 the stories just became so compelling and it became woven in with the history of the 20th century.

Speaker 2 And the funny thing was that Some years before that, a publisher had flown up from New York to see me when I was teaching at Harvard and said she had a very interesting idea for a book.

Speaker 2 And I said, what? And she said, a history of the 20th century. I said, that's an interesting idea.
And I thought to myself, it's rather broad. And actually, the century wasn't over yet at that point.

Speaker 2 But I think somehow I think that was kind of in the DNA of the book. And so

Speaker 2 as I told the story, it really was looking, it was not the history of the 20th century, but a history of the 20th century.

Speaker 1 I found that there's a lot of books which are nominally about one subject, but the author just feels a need to, like, if you really want to understand my topic, you have to understand basically everything else in the world.

Speaker 1 And I think a couple of biographies, especially, if you read Kira's biography of LBJ or Cockins and Stalin, it's just like...

Speaker 1 It is a history of the entire period in their country's history when this is happening.

Speaker 1 And I wonder if it was for you, you actually did just want to write about oil and like you just have to write about what happened, what's happening in the Middle East, what's happening in Asia, or is it just like, no, you set out to write about World War II and World War I and everything?

Speaker 2 I think it's also, I mean, because I think geopolitics, narrative

Speaker 2 storytelling, those are things that are very much in my interest. And my first book had actually been a narrative history of the origins of the Soviet-American Cold War.

Speaker 2 So I brought that perspective to it. And as I was writing

Speaker 2 the prize, it was just,

Speaker 2 I didn't intend to do all of that, but the discoveries, just one thing led to another. And I would just be amazed and think, this is an incredible story and no one knows it.
And

Speaker 2 I did see how somehow in my mind, you know, I did not do a detailed outline, but the pieces kind of came together in this larger narrative that located oil

Speaker 2 and in this larger context of the 20th century.

Speaker 2 And

Speaker 2 because it made it clear how central oil was

Speaker 2 as a way to understand the 20th century. Yeah.

Speaker 1 So we'll get to the new map and the contemporary issues around energy later on. But first, I want to just begin with the beginning of the history of oil.

Speaker 1 One of the things you notice, not only in the early stories of oil with people like Drake and Rockefeller, but also even very modern, like the frackers like Mitchell and so forth, is just that you have these incredibly risk-taking and strong personalities who have been the dominant characters in the oil industry.

Speaker 1 And I wonder if there's a specific reason that oil attracts this kind of personality.

Speaker 2 Well, I think maybe it attracts those are the ones who are successful. It takes a lot of, you know, willpower and perseverance.

Speaker 2 I mean, clearly, Rockefeller had an idea what to do, but he was also creating a new kind of business organization as he's doing it and a new kind of industry at the same time that he was doing it.

Speaker 2 And then if we jump ahead to this guy, George Mitchell, who's more responsible than anybody else for the shale revolution that has transformed the current position of the United States and the world,

Speaker 2 he...

Speaker 2 I mean, he kept at it for 18 years when people told him, you're wasting your money, you're wasting your time. He said, well, it's my money and I'll waste it.

Speaker 2 But one of the things that comes through in the book is the power of willpower.

Speaker 1 One thing that really struck me is how fast things kick off. So in

Speaker 1 1859, Colonel Drake hits the first oil well in Pennsylvania.

Speaker 1 And in less than a decade, you have many oil boom towns and oil bus and standard oil is formed and millions of barrels of crude are being pumped out every year.

Speaker 1 I don't know if there's been any deployment like that.

Speaker 2 What was it like?

Speaker 2 Well, I think actually what I think about what we saw with the oil industry, then what we saw with the automobile industry in the 1920s is kind of what we saw with the internet at the

Speaker 2 beginning of the 21st century.

Speaker 2 Another example of that that always struck me is the movie industry. At one point, you have guys who are showing

Speaker 2 these sort of silent movies over vaudeville houses for five cents. And 15 years later, they're living in mansions on Long Island and have chauffeurs.

Speaker 2 So it is striking to sort of see these businesses that come from nowhere and then they just take off and gravitate and develop so quickly when people grab hold in 10 or 15 years.

Speaker 2 You know, I was writing something comparing the energy position of the United States in the 80s and today, if you go back, which is, you know, it's a while back, certainly. But there was no tech.

Speaker 2 Nobody talked about tech. It didn't exist.
Well, and, you know, now we talk about big tech the way people talk about big oil.

Speaker 1 Yeah. So

Speaker 1 I think the analogy to the internet is interesting because what you have with the internet in the 90s, you have this big

Speaker 1 internet bubble, the dot-com bubble, and a lot of people lose money, but they were fundamentally investing in something that actually was a real technology, actually did transform the world.

Speaker 1 And I think in many cases through energy, you have investors who kind of go

Speaker 1 broke, but they're like, I think fracking is a particularly good example of this where they've like changed the geopolitical situation in the United States, but they've been like so right that they've eaten away each other's profits, right?

Speaker 2 And you saw that in the 19th century.

Speaker 2 I mean, that was one thing when I was writing about like the beginning of the 20th century and the end of the, I mean, it's far away, and yet it felt contemporary because you saw a very similar pattern.

Speaker 2 You saw booms and busts, you saw trees that were going to grow to heaven and then fell apart. And then those people who came in and either had resilience or picked things up and carried them forward.

Speaker 1 In the beginning of the oil industry, when it was just kerosene and used for lighting,

Speaker 1 why was oil so centralizing? Why was it the case that

Speaker 1 Standard Oil and Rockefeller controlled so much better?

Speaker 2 You know, people think of John D. Rockefeller and Standard Oil, they go, you know, gasoline.
Nothing to do with gasoline. They were in, John.
D.

Speaker 2 Rockefeller was a lighting merchant because what they did is that they rolled back the darkness with kerosene, with lighting. Before that, the number one source of lighting you know candles and

Speaker 2 whaling you know the whaling industry was delivering light lighting and uh so for the first 30 or 40 years of the oil industry was a lighting business uh and then comes along this other guy this other guy named thomas edison and suddenly you have electric lights and you say well that's going to be the end of the oil business but by the way over here is henry ford and others and you're creating this whole new market in the 20th century for gasoline.

Speaker 2 In the 19th century, gasoline was a waste product and went like for three cents a gallon.

Speaker 1 Yeah.

Speaker 1 One of the things I learned from the prize, which I didn't appreciate before, is that before the car is invented, when Edison was a light bulb, people were saying

Speaker 1 standard oil will go bankrupt because the light bulb was invented.

Speaker 2 John D. Rockefeller became the richest man in the United States as a merchant of lighting, not as a merchant of mobility.

Speaker 1 So I think one of the things you say in some of the earlier chapters is that Rockefeller was especially interested in controlling controlling the refining business and

Speaker 1 not the landowning and the drilling. And a lot of the producer surplus went in refining.

Speaker 1 Why did the economics of it shape up such that the producer surplus went to refining?

Speaker 2 Well, I guess because that was a control of the market. That was the access to the market.
And so the producers, they needed. John D.
Rockefeller.

Speaker 2 I mean, there were a few other people, but Rockefeller had like 90% of the business.

Speaker 2 And he would either give you a good sweating, drive down prices and force you out of business or force you you to sell to him or to amalgamate with him.

Speaker 1 What can we learn about management today from Rockefeller and the way standard oil is run?

Speaker 2 Well, I think it was the discipline of the business. He really created a very disciplined business.

Speaker 2 They went out to two decimal points. And that was before it was not even no computers.
There were no calculators. But it was that rigorous attention to detail, but scale.
But I think it was also...

Speaker 2 boldness and being able to see where you needed to go next and then to implement it.

Speaker 1 What did they do with the non-kerosene parts of crude oil in the early history of the business?

Speaker 2 Well, it was really a waste product.

Speaker 2 There was not much to do with it because it was all about lighting. Today, of course, oil

Speaker 2 is

Speaker 2 so much in everything.

Speaker 2 It's in your furniture. It's in

Speaker 2 your COVID vaccine. I mean,

Speaker 2 it's everywhere.

Speaker 1 Was the antitrust case against standard oil unwarranted? Because when I'm reading the prize, I'm like, oh, these guys actually were doing a ton of great stuff.

Speaker 1 As their name name implies, they were standardizing oil, the logistics, the transportation,

Speaker 1 the refining, and also their market share was going down. The price of crude was going down.
In retrospect, was the antitrust a mistake?

Speaker 2 Well, a mistake. I don't know.

Speaker 2 It is the most famous antitrust case in history, and it reflected the times because you had these big trusts. And it

Speaker 2 was a mistake. I don't know.
broke up these companies and created more independent companies, provided more room for innovation, for people to develop. So probably actually led to a stronger industry.

Speaker 2 Of course, the other thing that happened as a result of the breakup of Standard Oil was that these individual parts then got valued in the marketplace. And lo and behold, as a result of that, John D.

Speaker 2 Rockefeller as a shareholder actually became three times as rich.

Speaker 1 And there was also some scientists who came up with a new way of refining gasoline.

Speaker 2 Yeah, exactly.

Speaker 2 That, you know, things, because they're not centralized, there was more room for entrepreneurship, for experimentation, for research, for people to solve problems that other people said, oh, you can't solve them.

Speaker 1 Going back to the management thing.

Speaker 1 So one thing that stunned me is that he would have the people who ran Sandard Oil were people who were initially competing against him.

Speaker 1 And I'm curious, why did he only recruit the people who are hard-nosed enough to compete against him?

Speaker 2 You know, I think he respected his competitors, particularly the hardy ones.

Speaker 2 And those were the ones who were players who said, okay, rather than fight you, I'm going to get, you know, I'm going to, I'm going to get on board this ship as well. And so

Speaker 2 he brought them in and

Speaker 2 they all prospered as a result of that.

Speaker 2 They gave up, they said, we're not going to fight you, we're going to join you.

Speaker 1 Why was Rockefeller so hated in his time?

Speaker 2 He became the very

Speaker 2 epitome of the monopolist.

Speaker 2 There's a famous woman journalist, one of a great woman journalist named Ida Tarbell wrote this book about him, about the Standard Oil Trust.

Speaker 2 She said it was a great company, but it always played with loaded dice. You know, so he was the very embodiment.

Speaker 2 You know, you had this trust-busting president, Theodore Roosevelt, and this was the most obvious trust. And I think also, because like today with gasoline, it's the one thing everybody buys.

Speaker 2 You know, you and I don't go out and buy steel. But, you know, you go to a gasoline, unless you have an electric car, you go to a gasoline station to fill it up.
And I think that was the same thing.

Speaker 2 This was the omni-present product.

Speaker 2 But Rockefeller, his idea was to

Speaker 2 get scale and drive down the price, in a sense, expand the market. But it was a monopoly.
And,

Speaker 2 you know, it just,

Speaker 2 and we have an antitrust law. Yeah.
And I think there's also the suspicion that it was not only the

Speaker 2 economic monopoly, but the political muscle that came with that.

Speaker 1 Right. But the thing I'm curious about is, is there some...
Because it seems like they really messed up the PR, right? Like Theodore O'Reilla ran for the presidency on busting up.

Speaker 1 If you messed up the PR so bad, like the guy who becomes president runs on breaking up your company,

Speaker 1 like probably maybe it would have been intrinsically unpopular, but it feels like you really the PR could have been better.

Speaker 2 Why does anybody need to know about our private business was his notion. We're a private business.
It's nobody's business.

Speaker 2 Today,

Speaker 2 you know, you would have a PR advisor tell them that's not really the right stance to take. But at that time, you know, it probably also came from

Speaker 2 the arrogance of having created this huge company with its,

Speaker 2 you know, running a global company from an office in on a 26 Broadway. You know, you did have a sense of power.
Yeah.

Speaker 1 I mean, another thing you see is that he retires early to focus on.

Speaker 2 But let me mention, but I do know that, you know, one of his

Speaker 2 guys who was running the company went to see Theodore Roosevelt and brought him copies of Roosevelt's books, especially bound in leather, thinking he could win over Roosevelt. Didn't do any good.

Speaker 2 How come? What do you do with theater? Because Roosevelt, it was, you know, Debbie, he was the trust buster. Yeah.

Speaker 1 Let's go to World War I and World War II. So I will,

Speaker 1 you know, I had on the

Speaker 1 a couple of months ago, I interviewed the biographer of Churchill, Andrew Roberts.

Speaker 1 And as you're discussing your book, and he discusses, you know, Churchill was this sort of technological visionary, and that's the start of him that isn't talked about often.

Speaker 1 Maybe Maybe talk a little bit about what Churchill did and how he saw the power of oil.

Speaker 2 I think Churchill was the first Lord of the Admiralty.

Speaker 2 And he saw that if you can convert all the naval ships at that time ran on coal, which means you had to have people on board shoveling coal, and it took a long time to get the coal on board.

Speaker 2 And if you switch to oil, you would have faster

Speaker 2 the ships would be faster. They wouldn't need to take the same time.
They wouldn't need to carry the same people. And so he made the decision.

Speaker 2 Obviously, others like Admiral Jackie Fisher were pushing him to convert the Royal Navy to oil. And people saying this is treacherous because we'll depend upon oil from far away, from Persia,

Speaker 2 rather than Welsh coal. And

Speaker 2 he said,

Speaker 2 you know, he said,

Speaker 2 this is the prize of the venture. That's where I got my title from.
Originally, it was going to be called the prize of the venture, because that's what he said. And then I just made it the prize.

Speaker 2 But he saw that during

Speaker 2 World War I, he promoted another

Speaker 2 military development.

Speaker 2 I'm forgetting what it was called initially, but it eventually became known as the tank.

Speaker 2 I mean, so he really did kind of constantly push technology. Why, I don't know.
I mean, he was edgy, you know, was not. he was not educated as that.

Speaker 2 He was educated and, you know, in the sort of in classic, that's why he wrote so well.

Speaker 2 But he understood technology and that you had to kind of constantly push for advantage. Yeah.

Speaker 1 World War I is,

Speaker 1 you know, World War II is just like who can produce the most amount of things.

Speaker 1 But World War I is especially interesting as a technological war because in the span of four or five years, you have you go from battlefields with horses to literally the tank is invented during this time and thousands, you go from hundreds to thousands of trucks and cars and planes.

Speaker 2 Yeah, I mean, it's extraordinary. I think in 1912, the head of the Italian military said planes are interesting, but of no use in war.

Speaker 2 And the war did begin with cavalry charges.

Speaker 2 And it began, the German military position was based upon the railroad,

Speaker 2 inflexible.

Speaker 2 But I was,

Speaker 2 you know, as people said, suddenly you had trucks, you had motorcycles, you had tanks, you had airplanes.

Speaker 2 And so a war that began with cavalry ended up with tanks and airplanes

Speaker 2 and trucks. And it turned out that it was World War I in my reading and the writing of the prize is what really established oil as a strategic commodity.

Speaker 2 And the person who became Britain's foreign secretary, foreign minister, you know, said that the Allies floated to victory on a sea of oil.

Speaker 1 Yeah. And I think even the Germans said that we would have lost, we would have won the war if it wasn't for the tank or the trucks or something like that, right?

Speaker 2 Exactly.

Speaker 2 What the Allies had is mobility that the Germans didn't have.

Speaker 1 I mean, one thing I sort of worried about with regards to it seems like today, if you had a sort of World War III type conflict,

Speaker 1 it seems like there's an overhang of new technologies, just like, you know,

Speaker 1 before World War I, there's a sort of overhang of we could develop planes and war tanks and so forth if you wanted to.

Speaker 1 And with drones and other sorts of robots and other kinds of things today, it feels like if you did have a World War III today, it would be fought with very different weapons by the end than the beginning.

Speaker 2 Well, you know, people say that the Spanish Civil War in the second half of the 1930s was the dress rehearsal for World War II, where a lot of technologies were

Speaker 2 and

Speaker 2 techniques of warfare were developed. And I think, sadly, if you look at Ukraine today,

Speaker 2 you see that happening today, because on one hand, it is the advanced technologies, it is,

Speaker 2 you know, information technologies,

Speaker 2 cyber warfare, and it's, of course, drones,

Speaker 2 you know, in a way that hadn't been conceived that

Speaker 2 hobby drones could become agents of war, obviously

Speaker 2 the automation of the battlefield. But it's also, you know, a World War II war in that there's been tank battles.
And it's a World War I one in that it's called positional warfare, trench warfare.

Speaker 2 So you have you have like a whole century of warfare there, but it is certainly the

Speaker 2 beta test for new technologies.

Speaker 1 So if we let's go forward to World War II.

Speaker 1 Why wasn't Hitler able to produce more synthetic fuel? Because it seems like he could have won if he had more synthetic fuel.

Speaker 2 I think you would have needed to get to a scale that they could never get to.

Speaker 2 That was one thing, the synthetic fuel, which meant making oil out of coal

Speaker 2 using a chemical process.

Speaker 2 And the other thing is that the Allies bombed the plants as well. But the way I thought, you know, I intended when I wrote the prize to write one chapter on World War II.

Speaker 2 I ended up writing five because it was just so amazing. World War II was not an oil war, but there was an oil war within World War II.

Speaker 2 When Hitler invaded Russia, he was not only going for Moscow, he was also going for the oil fields of Baku.

Speaker 2 When the Japanese bombed Pearl Harbor, as Admiral Nimitz, who is the naval commander, said, if they'd come back a third time and hit the oil tanks, World War II in the Pacific would have taken another two years.

Speaker 2 General Rommel in North Africa runs out of oil. He says, he writes his wife, it's enough shortage of oil.
It's enough to make one weep. General Patton's lunge in 1944 for Germany is held back by oil.

Speaker 2 And the U.S. is going after the the oil lines that are supplying the Japanese,

Speaker 2 attacking them to basically drain the oil out of the Japanese war machine.

Speaker 2 And one of the things that was a real eye-opener for me, you know, people have heard of the kamikaze pilots who would fly their planes into the aircraft carrier.

Speaker 2 One big reason they were doing that was to save fuel so they wouldn't have to fly back.

Speaker 1 Right. And also

Speaker 1 the Pacific War was instigated.

Speaker 1 I mean, I don't know if instigated is the right word, but

Speaker 1 the Japanese needed more oil because of the war in Manchuria, but precisely because of the war, there were embargoes on the Chinese.

Speaker 2 Yeah, the U.S. put an embargo on them.
And

Speaker 2 one of the Japanese admirals said, you know, without the oil, our fleet will become scarecrows.

Speaker 1 World War I is when people realize that oil is a strategic resource, but in World War II, it's really I'm kind of curious about

Speaker 1 when different parts of the world realized how crucial oil is for as a strategic resource. Was it after World War I, after World War II?

Speaker 2 I think after World War I, it clearly was on the agenda in a way that it hadn't been before. And you had governments much more engaged in supporting U.S.
companies.

Speaker 2 There was also this vision that the U.S., which, by the way, the U.S. was so dominant as a producer.

Speaker 2 Remember that six out of seven barrels of oil that were used by the Allies during World War II, six out of seven of them came from the United States.

Speaker 2 So, but after World War I, you had these fears of running out. And so that was one reason the U.S.
government supported American companies beginning to go into the Middle East

Speaker 2 because governments recognize you needed oil.

Speaker 1 So

Speaker 1 after World War II, big picture, you have the dominant ally powers and they're trying to figure out what to do with the rest of the world and they realize oil is such an important resource.

Speaker 1 It seems to be just like fast forward 30 years after that, you know, you're in a position where you've lost a ton of leverage against the OPEC countries and you're like not in a position to control the supply of oil.

Speaker 1 How did that happen?

Speaker 2 The U.S. had been this huge supplier, but after World War II, we had economic growth.
We had highway systems. We had the suburbs.
Oil demand is going way up and we outrun production. So the U.S.

Speaker 2 becomes in 1946, 47, 48, an importer of oil, but modest amounts. But then as we go into the late 60s, you have this global economic boom, and Japan is suddenly a vibrant economy.

Speaker 2 Europe has recovered a vibrant economy, and oil demand is shooting up really rapidly, and the markets that were quite amply supplied become very tight. And I think that

Speaker 2 in the United States, people didn't realize that we were becoming the world's largest importer of oil. They just weren't paying attention to that.

Speaker 2 And it was thought, well, you know, there are only limits to what we can do as a country anyway. And then there were,

Speaker 2 when we finally get to the crisis, the famous oil crisis of 1973, which probably opened the modern age of energy, well, what's going on at the same time, this political crisis in the United States called Watergate.

Speaker 2 And the front page of the newspaper is not about, you know,

Speaker 2 we have tight oil supplies, we're running risks. It's all about,

Speaker 2 you know, what did Richard Nixon do in terms of

Speaker 2 subverting the election and subverting the political process?

Speaker 2 So there was just sort of inattention. And I think that's one of the risks.
I think a lot about energy security as an issue. And it tends to fall off the table until it hits you in the face.

Speaker 1 And when did we realize that

Speaker 1 there was just a ton of oil in

Speaker 1 the Middle East?

Speaker 2 Well, I think it was after World War II. I mean, people had begun to know it, but during World War II, a famous geologist named Everett de Gaullier

Speaker 2 did a trip to the Middle East on behalf of the U.S. government and came back and said the center of gravity of world oil is shifting to the Middle East.

Speaker 2 So that then led to, but no one knew how much or anything, but they knew it was a strategic resource. And by the way, they didn't want it to fall into the hands of the Russians.
That was a concern.

Speaker 2 Sometimes people, most people don't know the first post-war crisis with the Soviet Union was over actually Iran and the Soviet Union making a grab for a part of Iran.

Speaker 2 So, you know, after World War II, there was this real sense you've got to secure oil supply because it's such a strategic resource.

Speaker 2 And the Middle East now suddenly becomes much more important as a source than anybody. that thought about it.

Speaker 2 Really, the only person, only place producing oil in the Middle East before then was Persia, Iran.

Speaker 2 Oil was discovered in 1938 in Kuwait and Saudi Arabia and then got bottled up until after World War II. Yeah.

Speaker 1 So

Speaker 1 when I read about in the prize about what happens after World War II in the Middle East, it's about 200 pages of, you know, initially the Western companies make these deals with

Speaker 1 exporting countries.

Speaker 1 And over time, what happens is that first it's just like an incredibly favorable deal towards the Western companies, but then the exporting countries are like, no, we got got to do the 50-50 split.

Speaker 1 And then to do the 50-50 split. And

Speaker 1 then it just over a couple of decades, what happens is that they just keep asking for more and more concessions. Instead of

Speaker 1 we want 55%,

Speaker 1 we want 60%.

Speaker 1 This is the exporting countries I'm talking about. And

Speaker 1 they formed the cartel, obviously, OPEC in 1960. But even before that, it just like,

Speaker 1 what they have, they'll have leverage over these Western companies in the sense that they can say, like, if you don't agree, we'll just nationalize you.

Speaker 2 So you just give us private. I had

Speaker 2 a mentor, an economist named Ray Vernon, who came up with this term, the obsolescing bargain, which is

Speaker 2 Dorkesh oil, invests in such and such a country. And you put $2 billion in there, and it's great, and everybody's very happy.
Governments change or times change.

Speaker 2 People forget the risk that you took to do it. And they say, we want a different deal.
And that just happens again and again and again. It happens with all natural resources, with oil, with minerals.

Speaker 2 And then it was also, you had,

Speaker 2 you know, it was the end of colonialism, countries becoming independent. Today,

Speaker 2 if a company makes a deal with a country to go develop oil, the country will take it, gets 80% of the profit. Yeah.

Speaker 1 So if you're one of these Western companies, what should you have, like,

Speaker 1 let's say it's 1950.

Speaker 1 And you know that over time, you're going to, you know,

Speaker 1 they have obviously the monopoly of violence, so they can nationalize you if they want. What should you have done so that you can basically prevent the outcome that kind of universally happened? Well,

Speaker 1 if you were in charge of.

Speaker 2 Yeah, probably. I mean, you would obviously work really hard on government relations, but the countries are

Speaker 2 generally poor and they say, well, we just want our, it's our resource. We want our share of it.

Speaker 2 So I think over time, now what you have as a company then, you had the access to the market, you have the refineries, you have the tankers.

Speaker 2 So it isn't like they can just take it over and they don't necessarily also have

Speaker 2 it takes time to train your population to

Speaker 2 develop your indigenous oil people who can run it. But, you know, if you look back on it,

Speaker 2 I think you just say, you know, there was an inevitability to it, which also had to do with the consolidation of nation states.

Speaker 1 Why didn't...

Speaker 1 Why didn't the U.S. government or the U.K.
government or so on, why didn't they do more to be like, okay, you guys are companies, you guys can't negotiate that hard.

Speaker 1 but we really care about making sure that America has a lot of oil.

Speaker 2 You know, I think the governments did

Speaker 2 back up. And I think the British, remember, the British owned

Speaker 2 a

Speaker 2 big share of British petroleum, now BP,

Speaker 2 until the late 1980s. So the British government was in there, but then you had the nationalization of what was then called Anglo-Persian Anglo-Iranian oil, which became BP.

Speaker 2 So

Speaker 2 I think it was inevitable, but I think the governments did try and support, but

Speaker 2 there were limits that they could do. I mean, but the question of access, of maintaining the supplies

Speaker 2 then and now,

Speaker 2 remains,

Speaker 2 that question of access remains crucial

Speaker 2 today. I mean, you have the U.S.
Navy today trying to

Speaker 2 push back on the Houthis

Speaker 2 in Yemen who are attacking oil tankers.

Speaker 1 Thinking purely from the perspective of the companies, if you were in charge of one of the majors,

Speaker 1 would you have refused to train domestic workers in the exporting industry?

Speaker 2 No, I think that was part of your way of trying to embed yourself there to

Speaker 2 bring them in so that you were not this isolated island.

Speaker 2 And, you know, if you do look at, you know, Venezuela nationalized its company, you know, the oil operations.

Speaker 2 But by that point, they had people who were very well trained at running refineries, at drilling, at finding oil.

Speaker 2 And so, and they still carried some of, for quite a number of years, carried some of that DNA with them in their operations until the complete nationalization and Chavez came to power.

Speaker 1 Was the continuation of antitrust in oil after World War II, was that a mistake? Because what happens often when I'm reading your book is like

Speaker 1 the oil-producing countries can negotiate together. Obviously, after OPEC, they're literally a cartel.
But then these different Western companies, they can't.

Speaker 2 In 1973, finally, the U.S. government did give an antitrust waiver to the companies to try and have a united front in the negotiations.
But remember, it got all tied up with... geopolitics.

Speaker 2 It got tied up with Arab-Israeli wars and so forth. So it wasn't just about oil.
There were other things going on and the use of what was called the oil weapon.

Speaker 1 Yeah, okay. So let's talk about the oil crisis in 1973.
One thing I was surprised to learn is that the supply of oil didn't actually go down that much, like global supply of 15% or something declined.

Speaker 1 Why did that have such a huge effect?

Speaker 2 It was completely unprecedented, unexpected. So it created a panic.
And it was also right towards, you know, as the,

Speaker 2 you know,

Speaker 2 the final months were coming of the Nixon administration. So it got all tangled up.

Speaker 2 And then we had the system of price controls

Speaker 2 and allocation controls, which made it much harder for the market to adapt. I mean, one of the lessons to me from the prize is actually

Speaker 2 enabling markets to adjust. Because when governments try and control them and make decisions and allocate,

Speaker 2 and governments, even in the United States and some states, want to do that today,

Speaker 2 it accentuates shortages and disruptions and price spikes. But the tendency is to

Speaker 2 want to control them. But I think there was just a, you know,

Speaker 2 there was far less knowledge about

Speaker 2 the market where supplies were. There was no sort of coordination.
Now there's much greater knowledge and transparency. I mean, it was just,

Speaker 2 and you had...

Speaker 2 what were called integrated companies, the same company that produced the oil in the Middle East, put it on their tankers and sent it to their refineries in the United States or Europe, to their gas stations.

Speaker 2 And that system is gone. When you see the names of the big oil companies on a gas station, if you're not driving an electric car and you pull in,

Speaker 2 odds are that it's not owned by that company. It's a franchise.

Speaker 1 I see. Okay, so that's another thing I was confused about because I wasn't sure how

Speaker 1 before spot and future exchanges for oil.

Speaker 1 This happens after the oil crisis in the late 70s and 80s. I didn't really understand how oil is getting priced and also how different countries are able to have such a strong, because

Speaker 1 traditionally price is set by supply and demand. It's not set by

Speaker 2 setting prices, but then the market responds, demand goes down.

Speaker 2 And in fact, that's exactly

Speaker 2 what OPEC did with its prices. It created incredible incentive to bring on new supplies and to be more efficient.
And thus it, you know, it ended up undercutting its own price.

Speaker 2 I mean, one of the things I really carried away from the prize is there are, as you know, there are hundreds of really interesting characters in the book, but the two most important characters, one is named supply and one is named demand.

Speaker 2 And that's something that I, you know, keep, you know, you've got to keep in mind with all the other drama that goes on.

Speaker 1 But see,

Speaker 1 I mean, the interesting thing from the book is that oil did seem to be, at least until very recently, pretty different in that with other sorts of commodities, you have

Speaker 1 strong elasticities of supply where if, I don't know, lithium gets more expensive, you'll figure out substitutes for lithium and it's not that big a deal.

Speaker 2 Or find more lithium. Yeah.

Speaker 1 Whereas at least during the oil crises, it really felt like the entire world economy is just on oil.

Speaker 2 Well, I think that goes back to the centrality of oil as a strategic economy, as a strategic commodity.

Speaker 2 Japan had basically just switched its economy from coal to oil. Europe was switching from coal to oil.
And it was just such a high dependence.

Speaker 2 I mean, markets did eventually respond. I mean, you had a price collapse in 1986,

Speaker 2 which was the result of that. I mean, in the early 1980s, people were saying, oh, the price of oil is going to go to what in today's dollars would be $200 or $300 a barrel.
It collapsed.

Speaker 2 And so markets do respond. It just took longer for that to happen.

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Speaker 1 If you were in charge of one of these OPEC countries in 1973 and you realize that you have a tremendous amount of leverage in the short term on the world economy because everything's substantial, but over the long run, substitutes will be developed or more oil will come online and so forth.

Speaker 1 But you have this unique moment of leverage where

Speaker 1 people really need your oil. What would you have done? Would you have like, give me a seat on the UN Security Council and I'll open up the gushers?

Speaker 2 Or in the long run? Well, I think these countries did assert their political power. Certainly, again, it was a very different Iran, but the Shah of Iran, you know,

Speaker 2 until he fell, was he got sick and then he fell, asserting, you know, we're players on the world economy.

Speaker 2 Suddenly people, you know, Saudi Arabia had been a country that people didn't think much about in the United States. Suddenly Saudi Arabia became really important.

Speaker 2 And you had this huge flow of money that went into these economies, you know, what were called petro dollars. And that made them, you know, was a whole other source of

Speaker 2 influence. You know, in the book, I talk about Richard Nixon's vice president, Spyro Agnew, who

Speaker 2 had to quit.

Speaker 2 He actually resigned because he was corrupt and even had people paying for his groceries. And a couple of years later, he shows up in Saudi Arabia

Speaker 2 trying to do business as a consultant. I mean, people went there.
That's where the money is. If you go today,

Speaker 2 if you're

Speaker 2 a private equity fund, many of them,

Speaker 2 their number one place to go to raise money today is not necessarily the pension funds of, you know, various states in the United States.

Speaker 2 These private equity funds or venture capital funds are going to the Gulf countries again because that's where the money is.

Speaker 1 Does this happen with you? Or like you're, you know, you're the world's expert on energy.

Speaker 1 I'm sure it's like your expertise is worth a lot to them.

Speaker 2 Well, I mean, yeah. So I mean, I mean, I certainly

Speaker 2 speak in that part of the world. I mean, it's pretty much,

Speaker 2 you know, sometimes I joke,

Speaker 2 the best thing about, you know, the energy business, if you're a curious person, it's global. In some ways, it's the worst thing because it involves so much travel and so much jet lag.

Speaker 2 But I certainly, you know, will spend time there. And of course, for me, it's a constant process of learning, you know, because you have to sort of show up to

Speaker 2 get the perspectives and understand what's in people's minds.

Speaker 1 Which of the

Speaker 1 oil-producing countries,

Speaker 1 you know, they got a tremendous gush of revenues in the 70s because the price of oil jumped up so high. Which of them used it best?

Speaker 1 Because if you look at a bunch of them, obviously like the Soviet Union didn't do enough to make sure it didn't fall when oil prices collapsed. Iran, Iraq use the money to go to war.

Speaker 1 Saudi Arabia uses it on a lot of them.

Speaker 2 Well, I think the country that has done the best, it was not a big player then,

Speaker 2 is the United Arab Emirates, Abu Dhabi.

Speaker 2 They built a... you know, probably a sovereign wealth fund that's worth a trillion dollars, diversified their economy.
A couple of years I looked looked at it, more than half their

Speaker 2 GDP was no longer oil.

Speaker 2 And that's what Saudi Arabia is trying to do today, to diversify their economies

Speaker 2 and make them

Speaker 2 not just dependent upon the price of oil, because you don't know where technology is, where the markets are going to be. So

Speaker 2 the Shah of Iran used to say, who fell from power in 1979, used to say that, you know, he wanted to save the oil for his grandchildren. Now the grandchildren are in charge in many of those countries.

Speaker 2 Not his grandchildren.

Speaker 2 His grandchildren are somewhere else. That's right.
But on the Arab side of the Gulf, and

Speaker 2 they're focused both on continuing that revenue stream, but needing oil in order to diversify their economies away from oil. I mean, that's interesting.

Speaker 2 Like Russia is still, you know, at the end of the day, heavily dependent upon oil and gas. And, you know, that's a, it distorts their economy.

Speaker 1 Um, the Middle East, obviously, today has

Speaker 1 a lot of

Speaker 1 crazy ideas, a lot of the worst sort of pathologies, uh, political and sort of religious pathologies in the world exist there.

Speaker 1 Is it um, is it just a coincidence that this is where the perm this is where the uh oil happened to be, or it did, did the oil in some way enable or exasperate this uh uh uh radical tendency?

Speaker 2 That's a very good question.

Speaker 2 And how people

Speaker 2 looked at oil and dependence,

Speaker 2 I don't have a good answer to that because it also, I mean, there's oil, but there's also religion. There's also the Arab-Israeli conflict.

Speaker 2 There's Iran, which is really

Speaker 2 in some ways a neo-colonial power in the Middle East. I mean, it has probably, if you look at its proxies, 250,000 troops in other countries who belong to various militias and so forth.

Speaker 2 And Iran that, you know, it's interesting when sometimes when I'm in the Arab Gulf countries, they don't refer to Iran.

Speaker 2 They refer to the Persians in the sense that Persia wants to dominate the Middle East as it did in years, in centuries past. Right, right.

Speaker 1 They're imagining Xerxes armies.

Speaker 1 So we're talking about sovereign wealth funds, and I i think this is up yeah this is a very interesting uh aspect of the modern world where um

Speaker 1 some of the sort of biggest investment vehicles in the world are the offshoots of uh oil proceeds over the last decades of yeah i think i mean most you know if you look at norway or if you look at the middle east they're offshoots of oil singapore's of course is the offshoot of hard work right if you are in charge of um um an oil producing country's sovereign wealth fund and it's i don't know a trillion dollars or something, which per capita is actually not that much, right?

Speaker 1 If you're like Saudi Arabia, you got a trillion-dollar sovereign wealth fund. It's like

Speaker 1 the population is like 30, 40 million people. So it's per capita, it's like 20, 30,000.

Speaker 1 And so it's not that much per capita, but also you know that the majority of your GDP is not going to be sustainable over the long run.

Speaker 1 And you're in charge of it. What do you do tomorrow? Is it important that you use that money domestically?

Speaker 1 Or would you just like globally just put it?

Speaker 2 Well, it's very interesting In Saudi Arabia, it's a question whether you use that money as

Speaker 2 a national development bank,

Speaker 2 which is one thing, which is quite another thing to use it as a

Speaker 2 basically as a global diversification investment vehicle. And I think in Saudi Arabia, what's called the PIF, the public investment fund, is doing both.

Speaker 2 I think in Abu Dhabi, they've differentiated the roles of these different funds

Speaker 2 as to what is a global fund. But I think the argument is the same argument that you would get from a financial advisor in the United States, which is diversify.

Speaker 1 Right.

Speaker 1 But

Speaker 1 if you're just purely thinking of it as an investment vehicle, then maybe the rates of return aren't that high domestically. And then so.

Speaker 2 Well, yeah, but you do want to diversify your economy. You want to bring in investment.

Speaker 2 And there's also another critical need. You need to create jobs.
And the oil industry is a capital-intensive business. It's not a labor-intensive business.

Speaker 2 So you need to bring in other kinds of industries as well. Because if you look at your population, maybe 60% of your population just roughly is under the age of 30, something like that.

Speaker 2 So you have a real need, a real job creation need.

Speaker 1 Oil famously makes rich countries richer and poor countries poorer when they discover it.

Speaker 1 And if you're, let's say, you're a country that just discovered oil today, but it's got a really low GDP per capita,

Speaker 1 maybe you're already advising such countries. But if you were advising them,

Speaker 1 what is it that you tell them to do to avoid getting Dutch disease themselves?

Speaker 2 Yeah, so we need to explain the Dutch disease, which means that you create an inflationary economy and

Speaker 2 make businesses uncompetitive,

Speaker 2 the heart of the Dutch disease. And of course, that concept was

Speaker 2 invented for the Dutch because that happened when

Speaker 2 the Netherlands became a big producer of natural gas. So I think it is a cautionary tale.

Speaker 2 You want to, as I say, sterilize some of the money that comes in, put it into a sovereign wealth fund, invest it overseas.

Speaker 2 And then you want to put money into education and health and those basic human needs.

Speaker 2 I mean, you want to turn, I guess, financial capital into human capital.

Speaker 1 Why is it so hard to set up a stable oil rentier state? Because you have, like, theoretically, it should, it seems like, I don't know, you've got trillions of dollars of wealth right under your feet.

Speaker 2 Well, I think there's no single,

Speaker 2 some have, some have not.

Speaker 1 But I was just about to say, like, if you, uh, there's like, if you look at the examples, it's like so many just go off kilter, right? Um, like Iran, Venezuela, Libya, so forth.

Speaker 1 Um, and very few of them are like just stable. Yeah, we made a ton of money, Saudi Arabia-type states.

Speaker 2 Well, I think it is. Uh, if you have that huge inflow of money, it really can create a lot of distortions.

Speaker 2 And, you know, I think if you look back at the events that led to the overthrow of the Shah of Iran, I mean, things don't happen for one reason or another.

Speaker 2 He probably had cancer for two years and was losing it.

Speaker 2 And he also had been so arrogant that he kind of alienated people and he had his secret police and so forth. And then in this palemail rush.
of overspending created inflation, dislocated the economy.

Speaker 2 So, I mean, it's a, you know, it's a good question for study,

Speaker 2 you know, to look at on a comparative basis what worked and didn't work.

Speaker 2 And it isn't just oil and it isn't just money. There are other things that are involved as well.
I mean, clearly, there was a huge religious, well, a religious reaction

Speaker 2 led by the Alatoya Khomeini against modernization, against the role of women. I mean, the Shah was saying women should, you know, can get educated, play major roles in their economy.
And

Speaker 2 that was not something that the very

Speaker 2 conservative clerics could stand. So it isn't just about oil and just about money, but it's part of

Speaker 2 a larger mix.

Speaker 1 Why is Aramco so much better run than other

Speaker 1 companies tied to other basically sort of nationalized oil companies?

Speaker 2 I mean, there are others that are well-run, but Aramco is a very well-run company because I think they did, you know, you described it before, they rather smoothly did their transition and retained and their people are highly trained.

Speaker 2 I mean, you know, if you go to Aramco, you meet people with PhDs from MIT or Stanford or, you know, University of Texas.

Speaker 2 They

Speaker 2 have a very well-trained global workforce and a very high standard. But I think they

Speaker 2 they drew upon the initially the cultures of the companies that had were eventually nationalized out of the business, but the people were trained.

Speaker 1 I'm curious if there's any sort of stories you can tell.

Speaker 1 I don't know. I imagine since you wrote the prize, you're like, the world leaders are inviting you to come meet them and give advice and so forth.

Speaker 1 I don't know how many stories you can tell from these sorts of conversations, but

Speaker 1 is there some person who's like really struck you as they've got their head on straight on these kinds of issues? Or I don't know, just like you've been all around the world.

Speaker 1 I'm just curious if you have some sort of crazy stories about that.

Speaker 2 Yeah, well, I think one that is in the new map and that you and I have talked about is the meeting with Prime Minister Modi in India, where India was really at a crucial point, whether to get out of, in a book you probably don't know that I did called The Commanding Heights, in the permit raj, where government really tightly controlled the economy.

Speaker 2 And, you know, I describe a scene in the book where

Speaker 2 he brought his senior advisors together to argue about whether you allow market forces to work or not. And it was a very heated discussion.

Speaker 2 And then I just remember his remarks is, we need new thinking. And that, you know, just those simple words, I think

Speaker 2 have pointed to how India has become so much of a bigger force in the world economy today, as opposed to being a sort of enclosed

Speaker 2 closed economy.

Speaker 1 So in 1973,

Speaker 2 oil crisis, before that, if you look at the sort of back to 1973, I thought we were already in 2024. Okay.

Speaker 2 We're moving around.

Speaker 1 Yeah.

Speaker 1 The

Speaker 1 if you look at the sort of rates of economic growth or rates of total factor productivity growth before that date, it's like pretty high for a long time.

Speaker 1 You know, it's like 2% total factor productivity growth before 1970s. And then afterwards, it's like less than 1% in the United States.

Speaker 1 How much of that is tied to the energy crisis? Or

Speaker 1 was that just a coincidence?

Speaker 2 Well, I don't have expertise on that, but I know people like Ben Bernanke, the former head of the Fed, have actually studied that crisis and why you had that slowdown that occurred.

Speaker 2 But it was a,

Speaker 2 you know, the U.S. went from a, you know, being on a very strong growth trajectory,

Speaker 2 went into, you know, what at that time was the deepest recession since the Great Depression. Of course, we've had deeper recessions since then.
And

Speaker 2 it took a decade to get out took a decade to dig out of that hole.

Speaker 1 But then

Speaker 1 I mean, the rates of economic growth didn't go back to

Speaker 2 the... Well, also the U.S., the U.S.
was,

Speaker 2 as your economy becomes bigger, you don't grow at the same rate, but you're growing off a much larger base.

Speaker 1 One of the things in Silicon Valley that these techno-optimistic people really talked about is, what if you had just ridiculously cheap energy because of solar, because of other things?

Speaker 1 And the question is, would you just have, would the economy just explode because the

Speaker 1 economy is bottlenecked by the price of energy? Or

Speaker 1 would it not be a big deal because there's other bottlenecks?

Speaker 2 Well, I don't think it seems to me today,

Speaker 2 I mean, we'll come to it in terms of AI and electricity, but

Speaker 2 I mean, I need to reflect on that, but it doesn't seem to me that the cost of energy is a general constraint on the economy.

Speaker 2 It is probably somewhat of a constraint in California because it has the most expensive energy in the country, but that's because of state regulation.

Speaker 2 But,

Speaker 2 you know, all of the big tech,

Speaker 2 you know, big tech wasn't born in 1973. It was much more recently that it's happened.
I mean, it is, you know, like the oil industry, it's happened pretty quickly, actually, in this space of time.

Speaker 2 And

Speaker 2 so I don't think, I mean, I think when you have price spikes, when you have disruptions, then that's when you see the cost and those risks are there.

Speaker 2 But in general, although when you get into a presidential election, the incumbents always worry about the price of gasoline because it's so sensitive because people pay it.

Speaker 2 It's the one price you pay all the time and you see it.

Speaker 2 I need to think about it more, but I don't think it's you know, a huge constraint.

Speaker 2 Now, maybe, you know, nuclear energy way back in the 1950s was supposed to be so cheap, to so cheap that you wouldn't meter it. Too cheap to meter was the phrase.

Speaker 2 And, you know, now there's the, you know, fusion, which seemed to be 50 years away, is now maybe 10 years away. And, you know, I think technology will change things.

Speaker 2 But, you know, I don't think

Speaker 2 electricity may be a constraint on the growth of AI

Speaker 2 in the near and the medium term, but that's a very specific problem.

Speaker 1 There's been different projections made about how much energy will be required for AI, but the big thing is they need these big training runs, and they keep getting bigger and bigger over time.

Speaker 2 I mean, there's one projection that 10% of U.S. electricity by 2030, which is half a decade away, will be going to data centers.
And it's about 4% today.

Speaker 2 What a change it's been in the last year and a half in terms of thinking about data centers, AI, and electricity. It wasn't on the agenda a year and a half ago.

Speaker 2 And I remember I was at a CEO conference with electric power utility CEOs about a year ago, and they were talking about growth, being surprised by it.

Speaker 2 Then we have our conference in Houston in March, and by then, people have woken up to, in fact, you're talking about going from 4% of U.S. electricity to 10%.

Speaker 2 And U.S. electricity hasn't grown very much over the last

Speaker 2 10 years. It's grown at 0.35%.

Speaker 2 Now you're looking at maybe it's going to grow at 2%

Speaker 2 or more.

Speaker 2 And that adds up very quickly. And I was very struck.
I did a discussion with Bill Gates at our SERWEEK conference in March, and he said,

Speaker 2 you know, we used to talk about data centers as 20,000 CPUs. He said, now we talk about them as 300 megawatt

Speaker 2 data centers. And the sense is that

Speaker 2 you have electric cars and and sort of energy transition demand. Then you're bringing back chip manufacturers and

Speaker 2 smart manufacturing in the United States. That's electricity demand.
Then you have AI and data centers. And suddenly, this industry that had been very flat is now looking at growth.

Speaker 2 And how are you going to meet the growth is very much on the agenda right now.

Speaker 2 And, you know, data centers are looking where can we position ourselves so that we have access to the electricity that we need, reliable 24-hour electricity? So

Speaker 2 now, you know, there's energy security in terms of oil and gas, but actually it's also energy security in terms of electricity. So there's your potential constraint on

Speaker 2 economic activity. Yeah.

Speaker 2 Now, let me say,

Speaker 2 some will say the answer to that is innovation, that ships will become less electricity dependent or data centers will operate differently, that the demand will not grow as much.

Speaker 2 So there is those who say that will happen, but it hasn't happened yet. And those who are saying, you know,

Speaker 2 how are we going to meet that demand?

Speaker 2 And,

Speaker 2 you know, AI is going to demand a lot more electricity than

Speaker 2 we had thought about a year or a year and a half ago.

Speaker 1 And it's potentially even worse than the 10% number implies because it's not just widely distributed like households would be.

Speaker 1 In many cases, they have to be one gigawatt to one specific campus or location. Right.

Speaker 2 You know, you look at

Speaker 2 developing data centers, well, they'll take all of the electricity generated by a nuclear power plant. Well, if they do that, that means you've taken that baseload nuclear power off the off the grid.

Speaker 2 So, you know, there's a kind of scramble to understand this. And then there's the issues that we have in our country, which is you can't get things permitted.
It takes so long.

Speaker 2 You have supply chain problems

Speaker 2 and you have a workforce that is aged out.

Speaker 2 You know, it's said that, you know, to be a fully trained lineman, you need seven years.

Speaker 2 So, you know, you can see that this area of electricity is,

Speaker 2 pardon me for saying it, is hot. Yeah.

Speaker 1 You know, the thing I find

Speaker 1 wild when I'm reading the prize is that how much sort of economic development is ultimately contingent on the laws of physics, where suppose that fossilization happened in a different way and then oil didn't form, right?

Speaker 1 And so you have to,

Speaker 1 you let's say coal didn't form either. And then it's hard to imagine how society goes from like water wheels to solar power.

Speaker 2 Well, that's right. I mean, what you really realize is

Speaker 2 that hydrocarbons have been the fuel,

Speaker 2 the engine really of economic development. I mean,

Speaker 2 you know, people would still be in sailboats. Yeah.

Speaker 2 You know, they would still spend six weeks crossing the Atlantic.

Speaker 2 You know, it would take weeks to go from one place to another. It's hard to, you know, that's a very interesting question to imagine our world without them.

Speaker 1 It's also interesting that we're like the tech trees play such that like just when you need more runway, you get like the next energy transition and then you get a little more runway.

Speaker 1 You know, just like it's weird that it's, or maybe we would have gotten in any way.

Speaker 2 Well, you were kind of going to run out of whales, basically.

Speaker 2 And I love that, you know, that these kind of consultants, this professor at Yale did this experiment.

Speaker 2 He needed some extra money, and he did some studies that showed, well, actually, this stuff called rock oil, you could turn it into a lighting fuel fluid and the risk-taking of it.

Speaker 2 But yeah, it's hard to, you know,

Speaker 2 we wouldn't be where we are. We wouldn't have the world today.

Speaker 2 We wouldn't be a world of 8 billion people were it not for it. Obviously, there's going to be change.
And I'd say right now, the incentives for innovation are there. That's why,

Speaker 2 we may see a runway of what's going to come, but it may really come from the side.

Speaker 1 Yeah. And

Speaker 1 something else that the kerosene, the fact that oil for the first 50 years is used for only lighting.

Speaker 1 Another thing that's interesting about that is people are asking now about these AI models where you can literally get a million tokens, like many books' length of content out of these models for 15 cents.

Speaker 1 And so one question people are asking is: you know, if you're using, let's say, if you did $100 billion worth of tokens, what does that look like?

Speaker 1 What does an industrial scale use of intelligence look like?

Speaker 1 And the fact that, so with crude oil, in the beginning, you're like, you're producing a certain amount, but you're out of glut because you're only using it for lighting. And then

Speaker 1 you discover this sort of industrial scale use of this technology, which is obviously motorized transportation. And one question you can have for AI is like,

Speaker 1 if currently what we're using these models for like research and chat and whatever is like the kerosene,

Speaker 1 What would the billions of vehicles equivalent of AI look like?

Speaker 2 Well, I think that's a question that I'd like to ask you.

Speaker 2 But it is a sense that we are at the beginning of something

Speaker 2 new.

Speaker 2 And

Speaker 2 I remember when actually it was interesting, political leader in Central Asia saying, you know, AI is...

Speaker 2 is going to be the true source of power in the future.

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Speaker 1 All right, back to Jürgen. How mad are the frackers that they basically solved America's main geopolitical problem, but they were so successful that

Speaker 1 they're now not even making, they've competed away their profits.

Speaker 2 Well, no, I think that that was a period, and that was a period up till about 2017 when it was growth for growth's sake.

Speaker 2 And

Speaker 2 then basically the financial community said, hey, guys, the party's over. I'm not going to reward you for growth.
I'm going to

Speaker 2 reward you for sending. money back on my investment.
And so I think, you know, in a sense, shale is almost a mature industry. And I think people don't understand how transformative it's been.

Speaker 2 I mean, the United States was the world's largest importer of oil. We were importing, we were only producing 5 million barrels a day of oil in 2008.
Now we're 13.2 million barrels a day.

Speaker 2 The U.S. is energy independent.
People thought it was a big joke. It could never be energy independent.
It was every president said, we want energy independence. And it was like, you know,

Speaker 2 the late-night comedians could make fun of it. Actually, it's happened.
And it's had huge economic significance.

Speaker 2 Back in like 2008, the U.S. was spending like $400 billion a year to import oil, basically spend nothing to import oil.
And it's been geopolitically very significant.

Speaker 2 And I think that's been a learning experience for the Biden administration, because

Speaker 2 it turns out that

Speaker 2 if it wasn't for

Speaker 2 shale gas made into what's called LNG, liquefied natural gas, shipped to Europe, Putin could well have shattered the coalition supporting Ukraine when he cut off.

Speaker 2 He used the energy weapon, not oil, but gas. And

Speaker 2 that, you know, suddenly you had European politicians coming to the United States to try and secure supplies of LNG because they're so worried about it. So it's something that is,

Speaker 2 you know, it really is a revolution

Speaker 2 that is playing out today. China imports 75% of its oil.
It wishes it was in our position.

Speaker 1 We're energy independent, but how far are we from a scenario where our allies, most notably Japan, are also energy independent?

Speaker 2 Very, very, very far.

Speaker 1 But including our, like, including our exports.

Speaker 2 Well, that's why when the Japanese prime minister was here for a state visit a few months ago, they were expressing great alarm about

Speaker 2 future LNG exports because they, for them, being able to import energy from the United States is very critical to their energy security.

Speaker 2 Otherwise, they're pushed back. Where are they going to get their LNG? They'll get some from the Middle East, some from Australia, but they'll be pushed back to getting it from Vladimir Putin.

Speaker 2 So for them, their energy security, this has become U.S.

Speaker 2 energy exports, U.S. shale has become part of their energy security.
I never thought of it quite that way, but I think,

Speaker 2 you know, if you think about what the Japanese are saying, that's really what their message is.

Speaker 2 You know, I did an event with the Japanese prime minister, and now I think about it in the springtime, that was very much,

Speaker 2 that came through very clearly that for them, U.S. exports to them are part of the security relationship.
US LNG is now part of the arsenal of NATO.

Speaker 2 You know, we're talking about the geopolitical significance of U.S. shale.
No one would be happier to see a ban on U.S. shale shale production than Vladimir Putin.

Speaker 2 And, you know, I have firsthand sense of that because in 2013, before he annexed Crimea, I was at this conference, which is his version of a global economic conference, and they said you could ask the first question.

Speaker 2 And so I said, you know, when it was going to be about something we were talking about before, their overdependence on oil and gas revenues, I mentioned the word shale and he erupted and

Speaker 2 kind of said it's barbaric, it's terrible, and and he got really angry. And this is in front of 3,000 people, so it's rather uncomfortable in that position.

Speaker 2 But I realized there were two reasons. One, he was worried about shale gas competing with Russian gas.

Speaker 2 And two, he saw that shale revolution would augment the position and influence of the United States because the U.S. would no longer be energy independent.
And he was very prescient.

Speaker 2 He was right about both of them. I think when he invaded Crimea, I don't think he ever imagined that if he he cut off the gas to Europe, that Europe could survive.

Speaker 2 Europe survived. Yeah.

Speaker 1 One thing I'm actually very curious about is the prize, especially, but all your books have a

Speaker 1 narrative,

Speaker 1 are narratively driven, and you have detailed understanding of people and

Speaker 1 people and events and so forth.

Speaker 1 As compared to somebody who's just like, here's how many barrels are produced in year X, here's how many barrels are produced in year Y.

Speaker 1 Do you feel like when you're in these conversations where you're like trying to think about the future of energy,

Speaker 1 you really need to know

Speaker 1 how Drake was thinking about the Drill Wall and how...

Speaker 2 Yeah, I mean, I think in one way, I see myself...

Speaker 2 as a storyteller, and I like narrative. I think that's the best way to communicate.
I like writing about people and not just about abstractions.

Speaker 2 You know, it's funny, when I was like writing the prize or writing these books, I almost, it's strange to say, I almost see it like a movie when I'm writing.

Speaker 2 You know, I see what's happening and that makes it more vivid for me. And

Speaker 2 I also think that,

Speaker 2 you know,

Speaker 2 there are more and more things you're competing with

Speaker 2 if you're if you're a writer.

Speaker 2 You're competing with TikTok, you're competing with YouTube and everything. Podcasts.
Podcasts. So, you know, you've got to draw people in and people love stories.

Speaker 2 I mean,

Speaker 2 I mean, I've been,

Speaker 2 this is, I started writing when I was like a child.

Speaker 2 You know, my father had an old typewriter. He'd been a newspaper reporter and I would hunt and peck and just, you know, write stories.

Speaker 2 You know, so in high school, I was student body president, but I was also editor of the literary magazine. And

Speaker 2 when I was an undergraduate at Yale, I started a magazine called The New Journal, which was narrative journalism. And, you you know, so I learned, so I learned a lot of my writing doing that.

Speaker 2 I learned a lot of my writing, writing magazine articles, how to tell a story. And so I really,

Speaker 2 I love shaping a story. I love finding a character.
I love finding the great quote that just kind of illuminates everything you're trying to do. And I love not boring people.

Speaker 1 When you were writing the prize, it's a seven-year process where

Speaker 2 there's the endurance, but there's also like the sense of you you got to have like faith that at the end of this yeah you're making a deal with yourself yeah you're making a deal that what you write in year four you're not going to totally rewrite in year seven because otherwise you'll never get it done and see the odd thing the strange thing is i started a business the same year i started the prize so I felt that I learned.

Speaker 2 So I was living entrepreneurship. And I think that, you know, sometimes people, when they go back and write history, they know the outcome.
So they think everybody knows what was,

Speaker 2 you know, they had all the information, they had all the time, and they knew the outcome. Of course,

Speaker 2 you never have all the information. You certainly don't have all the time, and you surely don't know the outcome.
And I think that sense of contingency,

Speaker 2 which is such a part of human history, I think...

Speaker 2 I feel I tried to capture, I think that is one of the things that made the prize distinctive, that makes the new map, that makes the quest distinctive.

Speaker 2 I mean, in the quest, the middle book, you know, know, was a question: where the hell did the modern solar and wind industry come from anyway? And, you know, it's sort of entrepreneurs. And so I,

Speaker 2 you know,

Speaker 2 because I have been an entrepreneur, you know, I have a

Speaker 2 feeling for it. I mean, you're an entrepreneur in terms of what you're doing with podcasts.
You sort of invent it as you go along.

Speaker 2 And I tried to capture that. At the same time,

Speaker 2 I

Speaker 2 love writing narrative.

Speaker 1 Well, the thing I'm curious about is if, let's say you meet another analyst who doesn't have a vivid sense of narrative history,

Speaker 1 but just like knows the facts and figures, what is it that they're missing?

Speaker 1 What kinds of understanding do they often lack when you talk to them and so forth?

Speaker 2 Well, sometimes, I mean, I will have great respect for them and I have great respect. I mean, I also love,

Speaker 2 you know, reading the monthly energy review from the Department of Energy, which is only statistics or the

Speaker 2 energy, the statistical energy review. So I love it.
But I think

Speaker 2 what you may miss is

Speaker 2 the contingency, the human agency,

Speaker 2 the decisions that went onto things, the right decisions that were made, the mistakes, and the things that you missed

Speaker 2 that you were wrong about or that would have been wrong. So I think,

Speaker 2 so it's, you know,

Speaker 2 it's

Speaker 2 the texture. I mean, there is a tendency to think that things are inevitable, but you know that the world can change from one day to the next.
That's what happened on, you know, December 7th, 1941,

Speaker 2 September 1, 1939. It could happen any day in the Middle East

Speaker 2 right now that you could go from one day to the next,

Speaker 2 and it's a different world.

Speaker 1 Yeah. And I mean, just reading it, you can tell, like, it's hard to understand many of the things if you don't have an understanding of like Arab nationalism forced the Saudis to support the embargo.

Speaker 1 And then, why, why did, why did Egypt launch attacko? Because they wanted a ceasefire to be in a different place, but they actually wanted to end the war. That's right.

Speaker 1 Like, there's so many different things like that.

Speaker 2 Yeah, you don't understand why these things happened. And you just look at the numbers, you know, but why did it happen? And so, you know, part of it is,

Speaker 2 you know, through narrative, explaining why it happened. Yeah.
Let's talk about solar and renewables.

Speaker 1 With oil, you have a commodity which is a flow and you can cut it off and you can turn it back on again. So it gives the person who's producing it a lot of leverage.

Speaker 1 Whereas with wind and solar, if you're the people producing it, it's just a capital stock, right? So

Speaker 1 it has to, how does that change the geopolitical situation and the kind of leverage that the producer might have?

Speaker 2 You know, it's a question of scale and how long. I mean,

Speaker 2 I think what I carried away, basic premise of energy security, goes back to Churchill.

Speaker 2 He said safety lie in variety and variety alone, diversification. So wind and solar give you diversification.

Speaker 2 Electric vehicles diversify your fleet.

Speaker 2 So I think those are all there.

Speaker 2 I think,

Speaker 2 you know, so for China,

Speaker 2 I think wind and solar, electric cars is very much a strategic issue because they see the vulnerability of importing 75% of their oil, much of it coming through the South China Sea.

Speaker 2 They know the story of what happened with World War II with Japan. And so for them, it is,

Speaker 2 you know, the shift to electric cars is less about air pollution, much more about energy security.

Speaker 2 And it's also about knowing that they couldn't compete in the global market with gasoline-powered cars, but they can with electric cars. So

Speaker 2 those are the strategic things. But wind and solar give you a more diversified system until you have batteries that can really deliver the storage.
You have the intermittency problem.

Speaker 2 So you take California today. People think wind and solar is advanced.
It's true. They're 25% of your electric generation in California, but 43% of electric generation comes from natural gas.
So,

Speaker 2 you know, natural gas and that gets back to the data centers. You know, you're going to need to bolster your electricity power system.
How much can you do with batteries and how much can you do with

Speaker 2 using natural gas? So,

Speaker 2 but, you know, wind and solar are also stories about entrepreneurship. And in the quest, I have, you know, I asked myself, where do the wind and solar industries come from?

Speaker 2 And the wind and solar industries came from two,

Speaker 2 the solar industry from two

Speaker 2 emigres who had left Europe, one of whom had driven his car out of Hungary in the 1956 revolution. 1969, he's a chemist working for the U.S.
government.

Speaker 2 He and he, his partner, decided to go in the solar business.

Speaker 2 And that became the first solar company. And they started in 1973.

Speaker 2 And the wind business, I like to say, the modern wind business is a result of the marriage between California tax credits and the sturdy Danish agricultural industry.

Speaker 2 because it was driven by tax credits, but they needed to find wind machines that could stand up

Speaker 2 when the wind blew in the Tehachapi Pass.

Speaker 2 And

Speaker 2 so, but it took, you know, it's interesting. It took them about 30 years, both those industries, to become competitive.
And it only happened around 2010 that they actually became competitive.

Speaker 2 Now, of course, they're very competitive. But then guess what?

Speaker 2 Now they're all tied up. Renewables are also now tied up in geopolitics.
And, you know, in what I call the new map, the movement to

Speaker 2 great power competition. There's a US just put 100% tariffs on Chinese electric cars, 25% tariffs on Chinese storage batteries.

Speaker 2 So if you we just had this bill, the Inflation Reduction Act, not just its very recent huge

Speaker 2 trillion dollars, people, the treasury estimates when it's done. But it's about climate and renewables.
Oh, but it's also about competing with China.

Speaker 1 Speaking of solar deployment, so solar is on,

Speaker 1 I think solar deployment is on an annualized $500 billion,

Speaker 1 that's the yearly

Speaker 1 amount that we're investing in deploying it. Is there anything when you look through the history of the prize or the history of energy, is there anything comparable to this scale of deployment?

Speaker 1 Maybe initially electrification or or is this just unprecedented scale? I'd have to think about it.

Speaker 2 I mean,

Speaker 2 it's happening fast, but

Speaker 2 as I say, these guys started the solar business in 1973.

Speaker 2 It's now taken off. It's also interesting that what really gave the boost

Speaker 2 to the solar industry is German feed-in tariffs, which provided the incentive for the Chinese to dominate, to develop, because they dominate the business.

Speaker 2 But I don't know, you know, solar,

Speaker 2 I mean, right now, wind is about 10% of U.S. electricity, solar is about 3.5%,

Speaker 2 but solar is going to grow, it certainly will grow very fast.

Speaker 2 You do see,

Speaker 2 and I just heard this when I was at this utility commissioners conference, real tension between states and localities where the states want to push it, but localities don't want solar or don't want wind.

Speaker 1 I think we're in Nantucket and I saw a couple signs around of no more wind.

Speaker 2 Well, they just had a thing where one of the blades off one of the big wind turbines ended up, fell off and washed up on the beach and has now created, you know,

Speaker 2 it's really huge and consternation and suddenly reopened the discussion. But, you know, you need supply chains and wind and solar are

Speaker 2 different, of course. I mean, if you want to

Speaker 2 start a new offshore wind project in the United States, you can order your cables, but you won't get them until 2029 or 2030 because they're the supply chain issues.

Speaker 2 Solar is different, but of course, solar is, you know, is so dominated by China. Yeah.

Speaker 1 So oil companies are investing a lot in renewables.

Speaker 1 Is there a bunch of skill transfer here that actually means that these oil companies will actually be really good at deploying solar or something? Or is it a very interesting thing?

Speaker 2 Well, that's a very interesting thing. There's a difference among some companies.
Some companies say yes, and they look at offshore wind and say, well, we're in the offshore oil business.

Speaker 2 We could do offshore wind. And you see that in Europe where

Speaker 2 Equinor, which is the Norwegian company, or BP or Shell or Total or big and offshore wind,

Speaker 2 and they say we have skills in that.

Speaker 2 Solar is a little different. Exxon is now going into mining lithium, thinking that they can use skills that they use for

Speaker 2 that.

Speaker 2 But the US major companies say, well, we do

Speaker 2 Basically, we do molecules. We don't do electrons.
And that's where the difference is. The European companies say we can do all of it.

Speaker 2 The Europeans say we we can do all of it. The American companies say, well,

Speaker 2 we have no comparative advantage in electrons,

Speaker 2 but there's a lot of interest in hydrogen because that's another molecule.

Speaker 2 And the degree hydrogen can substitute for natural gas, for instance. And that's where a lot of investment, but it's very early.
And,

Speaker 2 you know, again, things sometimes people forget about the energy business. It's scale.
It's so big as, you know, what the requirements are.

Speaker 1 Yeah, but also it's surprisingly small, it's a fraction of GDP. Like oil is like 2% to 3% of GDP.
And obviously, the entire world depends on it, but you wouldn't see that in the GDP number.

Speaker 2 Yeah, I mean, it used to be a much bigger share of the stock market. Dow Jones, it's also a smaller share.
That's right.

Speaker 2 It's

Speaker 2 still the strategic commodity, but there are a lot of other things that

Speaker 2 go into it. Now, if you look at

Speaker 2 what the Department of Commerce uses,

Speaker 2 there are different categories of jobs. Altogether, they'll say that there are about 12 million people in the United States whose jobs are

Speaker 2 connected to the oil and gas industry.

Speaker 1 I'm curious about

Speaker 1 how you imagine the

Speaker 1 demand elasticity for oil changing in the future. And so this will be a sort of run-on

Speaker 1 question. But so you can imagine in the past, it's like, you know, you're not going to stop going to work because oil is 10% more expensive, right? So people

Speaker 1 with the arable oil embargo, prices went up like 300%, even though supply only went down 15%.

Speaker 1 But now, you know, if oil goes up in price, you can like zoom,

Speaker 1 zoom, you can video conference or something. And then fracking also, you can increase supply if you want to.

Speaker 1 And

Speaker 1 so yeah, I'm curious how you,

Speaker 1 because of these new sort of flexibilities we have, is there going to be a lot more elasticity and demand? And also, actually, maybe the main thing is that

Speaker 1 with

Speaker 1 AI and with compute, you have this sort of thing where you can just like dump arbitrary amounts of energy into this and it gets better.

Speaker 1 And currently, there's nothing where if you just like keep dumping more energy into it, there's a huge elasticity of demand. Yes.

Speaker 2 I mean, I think you would know, and you know, the podcast you've done,

Speaker 2 how AI is really going to change everything,

Speaker 2 you know, which is kind of the expectation now that it's going to change everything, everything, including,

Speaker 2 you know, including energy.

Speaker 2 And then you have $6 billion of venture capital money has gone into

Speaker 2 fusion. So

Speaker 2 there's a lot there that can change.

Speaker 2 My own view is that

Speaker 2 the energy transition, it's not going to happen because of price. It's going to happen because of policy and technology, I think, is what's driving it.
I have the view that people have,

Speaker 2 you know, have had kind of simple notions of how the energy transition will work. That's one of the things in the new map.

Speaker 2 If people read one part of it, it's read the section on energy transition, because it tells you what we're talking about today is not anything like any other energy transition.

Speaker 2 Every other energy transition we've had has been energy addition. Oil discovered in 1859 overtakes coal is the world's number one energy source in the 1960s.

Speaker 2 Last year, the world used more coal than it's ever used, three times as much as the 1960s. Now the idea is, can you change everything in

Speaker 2 literally in 25 years?

Speaker 2 And I think energy, and I think some of that thinking was developed during COVID when demand went down and price went down, collapsed. Part of it is, you know, people worry about energy security.

Speaker 2 I was just reading last week the budget message from the finance minister in India, and she talked about energy security, and we have to to maintain economic growth.

Speaker 2 And we, you know,

Speaker 2 it's very important to do that, and energy security as well as energy transition. So it's a different balance.
You know, there's a difference between the north and south.

Speaker 2 And then there's the constraints on minerals because, you know, as you make an energy transition, what people are talking about is more mineral intensive.

Speaker 2 An electric car uses two and a half times more copper than a conventional car.

Speaker 2 Well, we did the study and said, okay, let's take the 2050 goals. And if you want to achieve them,

Speaker 2 copper supply has to double by about 2035. What's the chance of doing that? It takes 20 years to open a new mine.
In the United States, we just did a study. It takes 29 years to open a new mine.
So,

Speaker 2 you know, changing a $109 trillion world economy, it's going to change. And you said that

Speaker 2 the development of solar is going to be really important, but things are not going to move in a straight line. I mean, we are in an energy transition, but it's going to be,

Speaker 2 you know,

Speaker 2 a longer one. Here we are, as you mentioned, in Nantucket, which was a key part of the energy transition because it was a source of lighting in the 19th century from whaling.
Yeah.

Speaker 1 It was like in the first chapter of Moby Deck.

Speaker 2 Yeah, exactly. And then it came to an end.
It came to an end because of the electric light. And so, I mean, things are not going to stand still.
So I think the most important thing is

Speaker 2 the technologies either that you can see coming or that come from left field like fracking or

Speaker 2 grasping what AI is going to mean for how our economies work. But I think you made a very important point and that was the discovery in COVID.
You don't have to travel.

Speaker 2 You can do it by electrons.

Speaker 1 One of the final questions I wanted to ask you was if

Speaker 1 If somebody was to write a kind of definitive history about a subject for another subject that's not energy.

Speaker 1 And you don't have to personally write it. You can just like delegate to somebody else to do it and they'll do a good job.
Is there a topic which you feel could make for another sort of thousand page

Speaker 1 fascinating history of the world?

Speaker 2 Well, I was always actually interested.

Speaker 2 You know, my father had worked at Warner Brothers for a time, and I was always interested in, you know, the movie and entertainment business, you know, and how that developed and,

Speaker 2 you know, a big epic story of that.

Speaker 2 I mean, that's, I just think that's so interesting where you can, I mean, one of the things that is fun when you're writing this, when you have these oversized personalities, they may be kind of obnoxious people who you would hate to meet in person, but are very interesting to write about.

Speaker 2 And so you look for an industry.

Speaker 2 Here's something nobody's ever thought about. History of the internet.
No, I'm just joking.

Speaker 1 But I don't know if anybody has written a sort of modern definitive history of the internet.

Speaker 2 Yeah. I mean, the thing is that,

Speaker 2 you know, the one thing I've learned from doing these books is it's the 3X rule is however hard you think it's going to be, it's going to be at least three times as hard to do.

Speaker 2 So, I mean, I started off with really unrealistic expectations on the prize. But I think the thing that kept me going was just how great the stories are and how important the stories were.

Speaker 1 Yeah.

Speaker 1 I've heard this from multiple sorts of

Speaker 1 historians who have written similar definitive books about about their subject. I think Kiro said, like, I'm going to write this over the summer and then we'll use

Speaker 1 the book deal to go on vacation afterwards. And I interviewed Richard Rose, the author of the Making of the Manhattan Project, and similar story there, but obviously it took longer.

Speaker 2 Well, I mean, you know, I used the advance for the prize to actually, that's how I capitalized the company we started with, which, you know, created an incentive to finish the prize.

Speaker 1 And you were doing the business in the day and then writing at night?

Speaker 2 Yeah,

Speaker 2 writing at weekends, vacations,

Speaker 2 filling up our car with books and just immersing it. And the way I would do it is, I did not have a master plan.
I really should have. It would have saved a lot of time, probably.

Speaker 2 I would just immerse my something and get my and get it all in my head. And then my mother was a painter, and I would watch her sketch.
And that's the image I have: I sketch it out, and then I

Speaker 2 fill it out and work on it. And another thing, I mean, I'm like a lot of people, I love to edit and polish.

Speaker 2 I mean, I love going over it and just making a sentence better and then saying how to make it better.

Speaker 2 And then like with the prize, one of the things I read the whole book aloud to myself to test every sentence. Does every sentence have resilience?

Speaker 2 Does it sing? And so, you know, for me, that's a,

Speaker 2 you know,

Speaker 2 a source of pleasure to do that.

Speaker 1 Did you know while you were writing it that it would become this sort of definitive history or no?

Speaker 2 I, you know, sometimes we lived, had an apartment overlooking the Charles River in Cambridge. I'd look out there at 2 a.m.
in the morning and think, you know, what's going to happen?

Speaker 2 You know, and I think those around me kind of a little bit despaired. You know,

Speaker 2 this could end up in

Speaker 2 a veil of tears, you know, but it turned out, you know, and then the book was basically five years late, brilliantly timed. People said they had a great sense of time.

Speaker 2 And I said, I was five years late. So, but I did have a sense that I needed to get it done,

Speaker 2 that something, that

Speaker 2 some crisis was going to come. I had a sense of that.
And that drove me. And,

Speaker 2 but,

Speaker 2 you know, otherwise there's this danger that you just keep working on it. Yeah.

Speaker 1 Okay. I think that's an excellent place to close.

Speaker 1 Jorgan, thank you so much for coming on the podcast.

Speaker 2 This is wonderful. Well, it's great to have this conversation.
Gave me a lot to think about, too. So thank you.