← Smart Girl Dumb Questions
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- [00:00]
A
Is all politics about power, like oil and gas power? And is the energy transition still transitioning? This is Smart girl, dumb questions. I'm Neymar Raza, and today my guest is a Pulitzer Prize winning author and authority on all things energy, geopolitics and economics. He's most famed for this book, the Prize, which is such a heavy book. You could kill a man with this book.
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B
I guess so, but if you pretend there's not an index in footnotes, it would be lighter. But it reads like a novel.
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A
It does read like a novel, but the book is called the Prize, the Epic Quest for Oil, Money and Power. And the big prize, of course, is.
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B
Is oil.
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A
And when you're not writing these bestselling books, you're vice chairman at S and P Global. You're the chair of Sarah Week, which is a global energy conference. That sounds really boring until you know that CNBC called it the super bowl of energy.
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B
Yes, the super bowl of world energy.
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A
Oh, my gosh. I want to start, though. We're in the midst of what seems like a very chaotic time in the world. And I guess my first question is, is every war about oil or is that just a conspiracy theory with really good pr? Smart girl, dumb questions.
- [01:06]
B
That's not true if you think about, I mean, just the Vietnam War, the Korean War. You can go through a list of them. Putin's War on Ukraine is more about ideology, about his messianic vision. But oil often figures well in it. And when I was writing the Prize, one of the things I said, oh, I'm going to write a chapter in Oil in World War II. And I ended up WR5 chapters because I did see that within this larger World War II, there was an oil war that was going on. Hitler invaded Russia, the Soviet Union, not only to get to Moscow, but he wanted to get the oil in Central Asia. And by the end of the war, the US was sinking the Japanese ships and they were running out of oil. And kamikaze pilots only had to fly one way because that saved fuel.
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A
Yeah. So it wasn't the raison d', etat, obviously, of the whole World War, but there was this. This kind of what we would call in film a B plot, I guess,
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B
but a very significant one. And I think the First World War had really established that oil was about national security.
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A
As we're taping this, which is March 6th, the US is entangled in two countries that it wasn't six months ago, one being Iran, one being Venezuela. There are lots of narratives about this. You'll hear oh, it's about oil. We went to Venezuela because it was about oil. Iran, it's about oil. Other people tell you it's about Israel or it's about China, or it's about regime change. You are the energy guy.
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B
What do you think on Venezuela? I think there were reasons beforehand and then I think oil came to loom afterwards. Venezuela is said to have a lot of oil, but a lot of that oil is not economic. It's just very expensive to produce. Today, Venezuela produces less oil than the state of North Dakota. Huh?
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A
Oh, really?
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B
Less oil. But I think people were kind of mesmerized by these numbers that, oh, Venezuela has the largest oil reserves in the world. Oil reserves are not only what's physically there, but is it economic to produce? So if it costs $80 to produce, this so called heavy oil in Venezuela really doesn't count as reserves. And who's going to rush to do that? There are better, cheaper things to do. The Iran war has been brewing for half a century. It goes back, of course, to the second Iranian revolution. And I think you people will parse, you know, why did this war take place? And they'll find lots of explanations and they'll blame it on things like that. I don't think that you could say that, you know, Israel convinced the United States to do this. I mean, it's really not. It actually doesn't make sense.
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A
It kind of also betrays the US's power and agency in this situation.
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B
I mean, I think at the heart of it, it's still the conviction that if Iran has nuclear weapons, it's going to be a very difficult country and a dangerous country to deal with. So I think that's the rational. There will be much debate as to was this the right thing to do? Could there have been negotiations? Was there other ways to do it?
- [03:57]
A
But as we're taping this, I mean, just this week, the Iranians have closed the Straits of Hormuz. So when that kind of thing happens, when there's a chokehold on global oil supply, I mean, I was listening to the Journal podcast this morning and there was a question like, will the Iran war show up at your gas pump?
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B
And the answer is yes.
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A
And the answer is yes.
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B
Yes. Iran's exports are less than 2% of world oil. They go to China at a discount. What does count? Is the oil on the other side of the Gulf? Saudi Arabia, Abu Dhabi, Kuwait, and in terms of natural gas, lng Qatar, that's what counts. The question is, is this the nightmare scenario or not?
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A
What is the nightmare scenario.
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B
The nightmare scenario is prices skyrocket to a very high level, financial markets tank and the world economy plummets into a recession. That's the nightmare scenario. The nightmare scenario would be an extended closure of the Strait of Hormuz and very extensive damage of the infrastructure. You know, today we've seen oil 50% higher than it was before the Trump administration started the military buildup there. So it's registering on oil. And I think that Iran knows that this is one of its high cards, which is to close the Strait and also to inflict damage on countries on the other side.
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A
I think a lot of people look at a headline like the one I saw in the Journal today and think that's such a sad way to think about the cost of war. It's not about, you know, the price I'm paying for gasoline. It's the fact that people are dying.
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B
Yes, it's a really dangerous situation. And once, you know, one of the things I found is that people start wars and they don't. They have no idea how they end. What the conclusion is. World War I was going to be over a matter of months. You know, six weeks before World War I began, the British fleet paid a friendship visit to Germany. The Iran Iraq War. Iraq thought it would be over in a matter of weeks. It went on for more than half a decade. So once you open the gates, you know, you don't know where they're going to go. And the human cost can be very high. And I think, you know, it's a very dangerous situation.
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A
I mean, it's odd to me that in media, other ways we kind of reduce it to the price of a pump.
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B
You know, I think it's always, ever since the oil crises of long ago in the 1970s, and there's this visceral memory of gas lines which occurred before most of the people who hear about them were born. But nevertheless, there is this sense of disruption. And gasoline prices are a very important. They matter in elections. We have an election coming in November, and President Trump is actually made no doubt that what he wants is low oil prices because he wants low prices at the pump, partly to offset inflation coming from tariffs and partly because he thinks this will be really good politics. So it always, you know, you make that point. It's such a good point. Whatever happens to the world, it always seems to radiate back to what's going to happen at that gasoline pump.
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A
Yeah. Which is, I don't know, for, I think a lot of people in my generation, we think A sad, sad way to look at war. But this conversation has started off with a bit of a doomer perspective, so I'm going to lighten it up. Do you watch movies, Daniel? You do?
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B
Yeah.
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A
Okay. So, Dan, which movie do you think it's the oil industry? Most correct.
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B
Oh, gosh, I watch rom coms myself.
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A
You do?
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B
Because you know why?
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A
Why?
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B
Because they have happy endings.
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A
Really?
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B
Yeah.
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A
You write about war so much and you need to watch. What's your favorite rom com?
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B
I mean, they're the classics like When Harry Met Sally.
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A
Yeah.
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B
There's so many. But then I watch them and then I forget the titles.
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A
But you haven't seen like Deepwater Horizon, Syriana, There Will Be Blood.
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B
Oh, I saw Syrian New and There Will Be Blood.
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A
What does Hollywood get most wrong when it's conveying kind of oil or the Middle East?
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B
Basically. I mean, it is a very business with great stakes and great drama and tied up with geopolitics. It's kind of also run by engineers. It's actually a business.
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A
Yeah. That's not as sexy for a Hollywood screen.
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B
Yeah, yeah. You know, you do need villains. I think There Will Be Blood. I thought it was too long.
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I love it. Critics notes from Dan Urgent.
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B
Now, of course, the hot thing today is his Landman.
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A
I haven't seen that.
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B
Permian basin.
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A
Yes, the Permian basin is very in now. It's very. I haven't seen it yet, but everyone is talking about this.
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B
You should watch it.
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A
Yeah, it's on Paramount, right?
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B
Yeah, yeah, yeah.
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A
Okay. Well, the fact that this industry is run not by, you know, people who look like George Clooney, but instead by a bunch of engineers is a good segue because I want to get into some of the kind of history here. The prize that came out in 1991, it's this amazing chronicle of oil, money, power. It's really consumerism, capitalism, politics, and the creation and endurance of something that you call the hydrocarbon man. Explain what the hydrocarbon man is.
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B
Well, the concept of the hydrocarbon man was the degree to which our world was changed by oil and how dependent we are in it. Not only in terms of transportation, but in terms of, you know, of the building blocks. If you look around the room we're in, so many things will actually be based on an oil product. You don't think about it that way.
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A
Clothes is oil in everything.
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B
It's very pervasive.
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A
I remember reading your book and thinking like, wow, it's in everything. It's in your medicine, it's in your Cleaning supplies. It's in your lip balm. I mean, Vaseline is literally oil, petroleum jelly.
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B
So yeah, so it's very pervasive.
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A
Yeah, let's actually. I want to stop there and do like a 101 about energy because explain what fossil fuels are and in a very high level way, and what the different types of fossil fuels are.
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B
Fossil fuels are the result of compression underground for millions of years of organic material. If I can use that. And they either become solid, which is coal, or they become liquid, which is oil, or they become natural gas, which is invisible because it's the gas. Those are the basic. When we say hydrocarbons and it means that they're hydrogen, carbon composition.
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A
Yeah. Dan, you have to forgive me here, but I'm going to ask you a question. I asked Neil Degrasse Tyson in some form, but the fact that we power cars, trains and automobiles with fossil fuels, a resource that came to be from zooplankton and dinosaurs who were destroyed, basically life that was destroyed by an asteroid. Do you think it's possible that we.
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B
Well, it's probably not quite that simple, but.
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A
It's not that simple.
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B
But it makes it more vivid.
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A
Yeah, it makes it more vivid. But the fact that we power our world through these fossil fuels that are the result of organic life, zooplankton, dinosaurs, et cetera, that were destroyed by an asteroid. But doesn't this make you sometimes think we live in a simulation? I mean, this is a crazy reality.
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B
Well, I think the plankton. I mean, it isn't just whether the dinosaurs were wiped out by asteroids. I mean, it's plant matter and everything, but.
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A
But it feels like a video.
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B
Yeah, I'm just processing. Processing. Is that a video game? Well, you know, if this didn't happen, what would we do? How would we get around? And you know, people would just stay in their villages and maybe go to the next village and that would be it. And you know, you'd spend most of your time just harvesting food and trying to survive.
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A
You cover a 140 year period in this book. We're not gonna go through the full time period here, but I wanna do a bit of a lightning round through the major moments of the book.
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B
I'd be very interested to find what you find to be the major moments.
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A
I will tell you which ones stuck out to me. So the first is the book starts in the 1850s and this dude discovers that this thing, rock oil, can be refined into kerosene. That was the first major moment for me. I know, I translated it In a smart girl, dumb questions kind of way. But faithful.
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B
Yeah, that's right.
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A
And you call this the age of Light?
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B
Because the first 30 years or so of the oil industry, first 30, 40 years, was really an illumination business. People know the name John D. Rockefeller, and he was the richest man in America in his time. He made his money as an illumination merchant. He was selling light. He was selling kerosene.
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A lamp guy.
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B
A lamp guy. Because up till then, people either use candles, if they had money, they bought whale oil, which was used for illumination, or they went to bed really early.
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A
They live and die by the sun. Yeah. And basically this innovation actually helps save whales in a way. This thing that we think is so dangerous and harmful for the environment now, at the time.
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B
Yeah, because, you know, Moby Dick, people were going out getting. Why did they want whales? They wanted it for the whale oil. It was so valuable.
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A
And the whale oil came from, like, whale sperm.
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B
Right.
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A
And they made the whale oil and they would kill a whale to get this light.
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B
Yeah. It was not. Yeah, it was. This was not good for whales.
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A
The second part, and I'm very sorry. Cause, I mean, it's a beautiful book and everyone should read it. But the next key moment for me is all of a sudden we move from the age of light to age of mobility because all of a sudden, Germany, Detroit, I mean, the car business starts taking off. So I guess, is Detroit responsible for that shift?
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B
Well, not Detroit per se, but the lighting business is going to go downhill like that because electricity. Because Thomas Edison in 1882 put wires under lower Manhattan and showed that you could turn on a light switch. That was pretty amazing. But just around that same time, people were starting to innovate with these internal combustion engines and led to, you know, the automobile. It's interesting partly, you know, how one innovation can lead to another. I mean, you. You've spent time in Silicon Valley. One thing. So bicycles helped pave the way for automobiles because you had people who were working with tires and things like that. And so the car, automobile comes along, and of course, what Henry Ford does is he makes it economic and then sales really start to take off. So.
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A
And what year is this?
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B
Well, it's 1910. 1908 is the period when the Model T's first start.
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A
Okay. And John D. Rockefeller, at this point, he's like, cashing it in. Right. Because he formed Standard oil in the 1870s.
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B
Yeah.
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A
Is that correct?
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B
Yeah. And then he. By then, he sort of is stepping aside and his successors are taking over. I mean, he'd built this company that dominated World oil. At one point it produced 90% of US oil and world oil until you had these upstarts come along, like companies with names like Shell.
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A
Yeah, Shell, right. That really threatened Rockefeller's global monopoly. And then of course, there's an antitrust suit in the 1910s leading to one
- [14:21]
B
of my favorite quotes, which was, this suit has gone on for a long time. There's a famous, very brave woman journalist named Ida Tarbell. And she. She set out to tell the story of Standard Oil and she wrote this book. It was incredibly influential and led to this lawsuit, to the breaking up. So the guys, the directors of Standard Oil are standing in the office at 26 Broadway. And over the tape comes through the report that the Supreme Court has broken them up. And this guy named John Archbold, who's Rockefeller's successor, standing there and he starts whistling. And then he said, life's just one damn thing after another. And he starts whistling again. But you know what? Breaking it up made John G. Rockefeller a richer man. Because once you broke it up, as happens sometimes today with companies, you break up company and the parts actually are worth more than the whole.
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A
Of course. Yeah. And biggest anti monopoly or antitrust suit in American history.
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B
Yeah, it's the landmark case. The guy who heads legal for one of the big tech companies that was involved in antitrust told me that he read the prize because it was the analog to what they were going through. When I was writing about that period, late 1890s into the first decade, it felt far away. But you know what? It felt very funny because it also felt close. And the kind of. Kind of spirit of innovation, kind of what we have today.
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A
The next, I think, big moment, you get into World War I, that's when we kind of see how important energy is for innovation, for national security. And then your book goes through World War II, which I'm not going to dig into in great detail here. But what was shocking is that you say six out of seven barrels of oil for the Allied forces were made in the U.S. at that time.
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B
Made in the U.S. the U.S. had a tremendous. It was a tremendous advantage. It took real effort because ships would get sunk by U boats and so forth. But it was the US Oil industry that really fueled the Allied war effort.
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A
Yeah. And this gets us to what I thought was another kind of pivotal moment in the book, which is toward the end of that war, actually in the last year of that war, in early 1945, Franklin D. Roosevelt on his last few months of life or last Couple months, I think. Says he has one more deal to make and goes out to meet with Ibn Saud, the King of Saudi Arabia.
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B
Yes. In the Suez Canal.
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A
Yeah, it's a little bit of like, you bring your crew, I'll bring my crew, we'll rendezvous at the Suez around
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B
too kind of vibe. We'll promise to get along with each other. If you go to Saudi Arabia today, they still invoke and have pictures of that meeting of King Ibn Saud and. And Franklin Roosevelt.
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A
And why was that meeting? I mean, you describe it in the book, but share with our audience, why was that so pivotal? And what was the deal that FDR was trying to broker?
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B
Well, I would say it was more like a relationship than a deal. But it's funny, somebody was saying to me just last week, energy security always comes back because there's a war or as a result of a war. And World War II had drove into home the importance of oil, because, as we say, there was this oil war within the larger war, and it was a huge advantage for the Allies and was really one of the keys of victory. That said there was this feeling that, oh, us was going to peak out, because that was one of those periods. And there was this geologist named Everett de Goliar who had gone during World War II, had made an expedition to the Arab Gulf, Persian Gulf countries, and came back and said, there's a lot of oil there. And this kind of led to a rivalry between Franklin Roosevelt and Winston Churchill for the affections of King Ibn Saud, because after Roosevelt met with him, Churchill rushed out to meet with him as well, because who was going to get there? Oil had been discovered in both Saudi Arabia and Kuwait in 1938, but hadn't been developed because of the war, but the recognition that oil was there and it was going to be really important. And so that was the beginning of a relationship that was heightened by the Cold War, by the. The fear that the Soviets, who had actually seized, at the end of World War II, seized Northern Iran and tried to incorporate it into the Soviet Union, that the Soviets would capture this oil. And so this goes to the point you were making that at this point, this oil is seen as a geopolitical prize. Who is going to develop it? Who's going to own it?
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A
Right. And that relationship gets fraught through all kinds of tumult in the 1970s, Yom Kippur War, et cetera. We won't get into that, but I think that is very important to kind of establish how we came to discover this resource. And then also how it became, as you say, the hydrocarbon man. How we as a species became so dependent on it.
- [19:10]
B
Right. And that's of course after World War II. Then you have suburbanization in America. You have, I mean, we've already had a lot of motor cars, but around the world, transportation, you know, coal, which had been the dominant energy source, gets pushed aside and becomes oil. The Industrial revolution was based upon coal. I mean, that was a great energy source. And then oil. It was only in the 1960s that oil. This goes back really to what you're talking about. Hydrocarbon man overtook coal as the world's number one energy source.
- [19:42]
A
And then of course, later on, and this is covered in your next book, the Quest, you get into fracking. And that obviously creates a whole new opportunity for fossil fuels in our environment. But what I think is really powerful is like you describe how this resource becomes a swirl of capitalist motivations to keep on innovating and monetizing this resource and this product and all its downstream uses.
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B
But it's not only capitalism, there's the Soviet Union doing it too.
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A
Sorry, there's the business imperative.
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B
It becomes a really big global business.
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A
Right. It becomes hyper consumer driven as well. It's like we feel all of a sudden, hydrocarbon man. We can't live without this thing.
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B
We want more and more grocery store, your supermarket and try and, you know, you wouldn't have the products there.
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A
You know, we have been told that we would hit peak fossil fuel demand in 2030. That was some of the estimates that we would see from the International Energy Agency or Goldman Sachs. Those predictions have been revised now. And you have Goldman saying we're at least a decade away from our peak fossil fuel moment. I think the IEA has one scenario where it'll be 2050. And so I feel like I'm part of a generation. And I heard you describe this in 1991 when your book was published. You were interviewed by the LA Times and you talked about your son being part of a generation that believes in recycling and, and that they're growing up differently with a different kind of education and awareness about these things. It feels, Dan, like we've moved backwards, or at least we haven't moved forward in the ways that we believed we would when it comes to the energy transition to sustainable.
- [21:11]
B
Yeah, so I think we should. I think that's what we need to get thinking about. But let me say that one of the things that, you know, I think we could have peakology because there was both peak demand and that some People thought it was 2019 or 2030 and then does it fall away or is it just kind of plateau? And then there was peak supply because we go through these panics. And I remember one panic ago that we were running out of oil and I remember being called, you know, oil prices were going up and called to testify at Congress and they like had so many people there. I mean they didn't all get their questions in and everything because everybody wanted to get on it because prices were up. Of course the next year prices went down, but that's what happens. But so I looked back in the prize and found that there were at least five times when the world was going to run out of oil. It's just a recurrent.
- [22:07]
A
So you don't be worried. Well, I'm less worried about running out of oil and I'm more worried about like do we, you know, how do we think about this energy. Energy transition that we were sold our fears about global warming, climate change, the greenhouse gas emissions, the need to become greener. And. And you talk about this in your book the New Map. And you also wrote, I thought, an excellent piece in Foreign affairs early last year about how the energy transition is not going to be some linear thing.
- [22:36]
B
I mean there became this kind of single minded, it seemed to me, focus on climate as the only issue, forgetting these other things like economic growth, energy security. I think some of that changed on the morning of February 24, 2022, when Russia invaded Ukraine and Sudd energy security is back on the agenda. Suddenly the Chancellor of Germany who had been leading the green revolution is going to Senegal and Canada asking them for LNG liquefied natural gas and going to Kazakhstan asking them for oil, that suddenly you realize these things don't move, you know, as you say, in a linear fashion. And I think then the second is just the recognition that in fact a lot of the thinking about the energy transition and how, how easy it would be was shaped during COVID when prices were down and demand was down. The other thing that led us to write the article is we did a series of roundtables in developing countries and we found, listening to people not talking, listening to them, that they were saying kind of a different thing. And it was brought home to me when we did a conference in Kuala Lumpur, in Malaysia, where they Prime Minister of Malaysia said we're concerned about climate, we're also concerned about economic growth, we're also concerned about reducing poverty, we're also concerned about improving health. And I think, you know, from the peregrinations of your own childhood growing up, that those are very big concerns in the developing world.
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A
The north south divide is very clear on this issue of like the climate imperative. I mean, a lot of countries think this is ridiculous, that the, you know, the rest of the world got to have this kind of industrial revolution develop in all these ways, and now when it's their turn, they have to all of a sudden go green.
- [24:18]
B
You said it. You said it. It's a north, south divide on this issue. This prime minister says we're going to pursue our path and we're not going to be dictated to by Northwest Europe and North America.
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A
But do you think it's important, Dan, that the west has an obligation to do its part to correct the damage that has been done historically, even if other countries that are earlier in the development cycle don't? I mean, I'm asking you a normative question. Do you think that, that we as kind of consumers in the west should be thoughtful about this or our governments should be thoughtful about this?
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B
Yes, absolutely. I think that's it. And I think it's addressing, but I think it is understanding also the perspective of the global south on these issues and that, you know, countries in Africa don't want the European Parliament telling you can't build a gas pipeline when they have gas pipelines all across Europe.
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A
Yes, I understand that. And, but that's a very different situation than say, consumers or manufacturers in the United States saying, don't tell me I have to sell an electric vehicle. Which was kind of the Biden push. Right. He wanted 50% of newly sold vehicles to be electric by 2030. Obviously that's gone out the door right now. But do you think that those kinds of objectives are important for us to maintain?
- [25:32]
B
Well, I think it is. I think energy security, as well as addressing climate, environmental concerns is diversifying. And one of the things I would love to see is that we take the ideology out of energy choices. That in fact, the US Faces a really big challenge in electricity now in delivering electricity, and it kind of shouldn't be either or. I mean, solar has a role to play, wind has a role to play, natural gas has a role to play. And if we don't bring all of them into the mix, then we're actually going to have real problems with our electricity supply. So I was, you know, I had this hope that just kind of could put the ideology out of the discussions.
- [26:11]
A
Yeah, that's what I want to do here because I think that's why I'm talking to you, because you've advised the Department of Energy under four different presidents, two of whom happen to be Republican, two of whom happen to be Democrats. But you're kind of focused on how do we build American energy and economy moving forward and diversify that and make
- [26:31]
B
it sustainable and also make it affordable. I mean, as we're going to see certainly going into this election, the November election of 2026, it sure looks like affordability is a very big issue. And we were talking before about people being concerned about gasoline prices. They're really concerned about their electric power
- [26:48]
A
prices, their Con Edison bill. Yeah, yeah, well, and you noticed that one. You noticed that one when it comes in. So let's talk about this because most of us are not going to make big decisions to go into war or not, but most of us as consumers are going to make big decisions about how we live. And probably most important to the topic of kind of sustainability, how we move through the world, our mobility. I'd like to talk about different technologies and I'd love you to tell me kind of three things, what they are. So you know, how do they work basically, what's their promise and what's in the way? So the first is battery electric vehicles. This is a technology we've seen a lot, as opposed to the combustible engine.
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B
And the way they work is with batteries. Yeah, they're electric.
- [27:31]
A
Yeah. So it's about minerals, not oil.
- [27:33]
B
Yeah. And we should come back and talk about minerals.
- [27:35]
A
We will do. And what's their promise and what's in the way of kind of electric vehicle development?
- [27:41]
B
Well, I think, you know, a big issue has been range and a big issue has been cost. But you know, a lot of Teslas have been sold in the United States. I mean, you know, some states more than others. So China has gone all in on EVs. I was driving in Beijing with a woman who works in our Beijing office and I was in her Tesla. So I asked her, why did you buy a Tesla? And she said, oh, I have a four year old daughter. So I said, what does a four year old daughter have to do with buying a Tesla? And she said, well, she goes to nursery school five days a week. If I buy a gasoline car, I'm only allowed to drive it by government regulation four days a week and my daughter's stranded. So the Chinese have really driven that and they've really done a lot of innovation. They've brought down the costs. I was talking to a colleague who's in Karachi and he was raving about his SUV that he Chinese SUV that he bought that was $15,000.
- [28:39]
A
Wow.
- [28:40]
B
So EVs are not selling in the United States very much. They're selling somewhat in Europe, but around the world. I looked at these numbers just to put numbers around it. Last year, about 16 million new cars were sold in the United States. Around the world, 23 million EVs were sold. A lot of them in China. So, you know, that's bigger than the entire US so EVs are coming. They're part of the mix. Hybrids are part of the mix.
- [29:07]
A
What about hydrogen? Can you explain the technology? It's like, literally hydrogen. It's water.
- [29:13]
B
Well, yeah, yeah, hydrogen. You know, you split it.
- [29:16]
A
You split it and you get hydrogen and oxygen.
- [29:19]
B
Yeah, yeah, yeah. Then you can convert it into ammonia if you want to transport it. Hydrogen was really hot subject, that hydrogen would replace natural gas. And people rushed into it. Big incentives from government to do it under the Biden administration. And then it turned out that actually it was expensive, you needed new infrastructure. So people are still working on it, but it's lost a lot of the. The momentum that it had three years ago. Hydrogen is used actually in oil refineries. The other thing it's used is to make fertilizer.
- [29:55]
A
Oh, interesting. But there are hydrogen vehicles coming out, I think, you know, Toyota and BMW, which is one of the sponsors of this show, they're invested this new IS5 hydrogen hybrid.
- [30:08]
B
Yeah, yeah.
- [30:10]
A
Do you think. Are you bullish on it?
- [30:12]
B
I. I'm neither bullish nor bearish on it. I didn't know they were doing that. I know that BMW has worked very assiduously to bring electric cars.
- [30:23]
A
Two other technologies that have less to do with car, or actually maybe carbon capture. What's up with carbon capture?
- [30:29]
B
So carbon capture, the idea is, okay, CO2 released into the atmosphere, climate change, concern about it. So can you capture that carbon and either inject it back into the ground, or can you capture it either with basically machines that pull it out of the air, or just from industrial processes or use plants? Plants are a great way to capture carbon. So that's progressing. But again, cost and scale are the challenges.
- [31:00]
A
The challenge there. Yeah. And what's up with nuclear? Because that came up in your kind of energy transition piece.
- [31:07]
B
Yeah, nuclear is back.
- [31:09]
A
Yeah, it's hot.
- [31:10]
B
Yeah, hot in a good way, not in a bad way. Nuclear. After the accident in Japan and Fukushima, people backed away. And then the other thing with nuclear, building plants in the United States was very expensive. Took twice as long, was twice what was budgeted, went through a lot of permitting. But I Think one of the reasons it's come back is because the big tech companies, which are now called hyperscalers, have, have embraced it because that gets to the electricity challenge that the United States is facing. And that comes particularly with data centers. And they see nuclear as a zero carbon energy resource. So there are existing nuclear power plants in the United States. Some are being closed down, they're now being brought back. And then there are what are called small modular reactors. And that gets a lot of discussion. People look out for those initials, smrs, Small Modular Reactors. And they've been under development for several years. And the idea of those who are the proponents of it is that because they'll be smaller and replicable, that you can sort of reduce the cost by just keep building this similar ones over and over. But it's still, again, early days and we probably won't see the first ones in the United States in place or North America till somewhere between 2030 and 2032.
- [32:37]
A
Yeah, they still feel like they're more on PowerPoint than in real life.
- [32:40]
B
And let me say you're seeing a lot of investment coming from the big tech companies into, into these, into these areas.
- [32:48]
A
Well, they got to feed the beast, right?
- [32:49]
B
Exactly.
- [32:51]
A
Did you ask?
- [32:51]
B
The beast is hungry.
- [32:53]
A
The beast is hungry with AI. We're going to get to that. I want to shift our conversation into, well, updating this idea of the hydrocarbon man.
- [33:00]
B
Well, first of all, I wouldn't call it a hydrocarbon man today.
- [33:02]
A
Well, I did read in this LA Times article that you were worried that the term would be seen as sexist.
- [33:06]
B
Yeah. Did I even say that then?
- [33:07]
A
You said it in the piece. Yes. I mean, you said hydrocarbon woman, person didn't have the same.
- [33:12]
B
I mean, what I was doing, you know, it was obviously what I was doing was playing off Neanderthal man, CRO Magnon man, you know, those charts we'd see of the different evolution of humanoids.
- [33:23]
A
So are we ever gonna become a renewable man or a renewable person?
- [33:28]
B
I think renewables are going to continue to be part of the energy mix. It's a question of timing.
- [33:34]
A
It was crazy to me to read in that piece you had in Foreign affairs that I can't remember the timeline, but it was like, I think since 1990 to the 2000s, we had only gone from 15% diversification away from hydrocarbons to 20% diversification.
- [33:46]
B
Along with that, if you look at energy, we were maybe at 82, 83% hydrocarbons. We're, we're probably today like around 80 81%. So with all the investment now, I will say that Last year, over 90% of the new electric generating capacity put into the world was either wind or solar. So that's, you know, that's continuing.
- [34:08]
A
I mean, all these new technologies that are being developed, things that seem, you know, maybe that they're not in our close future right now when it comes to small modular reactors or for nuclear or hydrogen, you know, do you see those coming kind of becoming mainstream one day? Cliffhanger. We'll be right back. Do hydrogen cars hydrate themselves? This is a sponsored dumb question brought to you by BMW. Lately, I've been hearing a lot about hydrogen cars. And I started thinking, how does this technology even work? It turns out, unlike battery electric vehicles, hydrogen cars are fuel cell electric vehicles. Which sounds fancy, right? But basically it means that they have this stack technology that combines hydrogen and oxygen to make electricity. And the only thing that releases in the process is water and heat, which is a lot better than greenhouse gases. So do hydrogen cars hydrate themselves? Not really. You still have to refuel. But that tank lasts longer and can refuel quicker. That's what she said. And hydrogen isn't just cool tech. It's part of a broader strategy to explore options that keep us moving, reduce emissions, and have us not relying on a single energy source. That's why companies are investing here like this, the new BMW IX5 hydrogen, which is due to be on roads in 2028. The race is on to make hydrogen cars more mainstream, affordable and chic, like this BMW ix5 hydrogen. It's pretty chic, right?
- [35:24]
B
You can learn more at bmwgroup.com or wherever you get your BMWs.
- [35:29]
A
I mean, all the wrongs we must
- [35:33]
B
right, the fights we must win, the future we must secure together for our nation. This is what's in front of us. This determines what's next for all of us.
- [35:47]
A
We are marines.
- [35:49]
B
We were made for this.
- [35:52]
A
This episode is brought to you by Peloton Break through the busiest time of year with the brand new Peloton Cross training Tread plus. Powered by peloton iq. With real time guidance and endless ways to move, you can personalize your workouts and train with confidence, helping you reach your goals in less time. Let yourself run, lift, sculpt, push and go. Explore the new peloton cross training tread +@1peloton.com this episode is brought to you by ebay.
- [36:20]
B
On ebay, behind every car and part is a story waiting to be shared. I read about this guy who bought a nearly scrapped 2020 Porsche, Cayman, he rebuilt the whole thing, all with parts he found on ebay. And now that Cayman is out tearing up the track from Toyota to Ash and Martins, ebay has thousands of cars and the largest online selection of vehicle parts and accessories. EBay, things people love.
- [36:46]
A
These new technologies that are being developed, do you see those coming kind of becoming mainstream one day?
- [36:51]
B
Well, I think that nuclear probably will come back as a more. You know, it now has positive support. It lost positive support. And it has it. And there's. I think there's a lot of momentum there. We did at our Energy Syraway conference last year, we had a.
- [37:08]
A
The Super Bowl.
- [37:09]
B
The super bowl of world energy. Exactly. We had a panel with this guy who started a fusion energy company, which always was 50 years away, on the panel with the head of the big electric utility in Virginia and the governor of Virginia, and they're saying, oh, by 2032, we're going to have a fusion machine. Fusion, which was always something that was 50 years away and you did a lab somewhere, has gotten 7, $8 billion of venture capital money. You never had venture capital money going into nuclear before.
- [37:39]
A
Oh, my gosh. So when, you know, this idea of the transition, it's extremely expensive enterprise. Right. It would cost something like, I think you had written trillions of dollars, five,
- [37:49]
B
six, seven trillion dollars a year. If you're really going to get to that 2050 goal.
- [37:54]
A
The global global GDP is how much?
- [37:55]
B
About $120 trillion.
- [37:58]
A
Yeah, I think between $110, $120 trillion. So you're talking about 5, 6, 7% of the global GDP being spent on getting to sustainability targets.
- [38:09]
B
Yeah. The country that's really run into problems, the region is Europe, because they have been so focused just on driving energy transition investment that they've really driven up their energy costs de industrializing, losing jobs, and by the way, fueling the rise of a populist right. For whom this has become, you know, who are anti all of this. But Europe now has this problem about competitiveness. They need to restore it. And they're supposed to go from like 1 1/2% of their GDP on defense to 5%. So Europe is in a really tough position and is struggling to how to. How to redefine its objectives, some of which are locked in laws which, you know, are gonna really hurt their economies. And I think that one of the things that wasn't anticipated was the political backlash.
- [38:58]
A
Yeah, the political backlash has been real in the United States. We've seen President Trump's EPA retract A bit of the endangerment. Finding this in the Clean Air act, which allows the government to regulate emissions effectively. Decide what kind of car you're driving. Is that kind of policy change? Do you see that as a response to something or do you see that as driving a change?
- [39:16]
B
I think it's a response. I think, think we've gone from 180 degrees change from the Biden administration to the Trump administration. If they said yes, they say no. If they say yes, they said no.
- [39:26]
A
But what's the right answer in all of this?
- [39:28]
B
Well, probably the right answer, which in our policy is somewhere in the middle. I mean, it will sound funny to say most people don't think about this, but you pour too many regulations on and it becomes difficult to get things done. But on the other hand, you take away too many regulations and you create a lot of problems.
- [39:46]
A
Yeah, well, China's definitely a different ecosystem to test or laboratory to test this in. But they have made tremendous headway with their regulations. As you were saying, the woman driving in the car five days a week.
- [39:56]
B
Yeah, they have five year plans. I was there in December. They're working on their new five year plan. It's the roadmap. And you get on that road and you go down that road because that's the road you have to be on.
- [40:08]
A
It's in their interest to do that. I think that's the interesting thing about the, the sustainability agenda. It's very different to the Prime Minister of Malaysia saying to you, I can't do this, I got other priorities. I got to figure out how the economy works. And the Chinese are saying this is good for our economy.
- [40:21]
B
Let's go back to electric cars again. China, I think their drive for electric cars was partly about air pollution. It was partly about they import 75% of their oil. Their oil comes from the Middle East, a very substantial part of from the Middle East. So they're living with that threat today. And that oil also traverses the South China Sea where During World War II U.S. submarines sank Japanese tankers torpedoed them. Yeah, exactly. So they've made the determination that they can't continue to grow their oil demand. So they do that. The other thing is they said we can't beat Detroit, we can't beat Japan, we can't beat South Korea, we can't beat, beat Germany on conventional cars. We're going to just go on EVs and that's where we're going to win and we're going to be the big exporter. So they have adopted the, you know, EVs, batteries that are by far the leader in batteries. I mean they're one of the battery companies, like 20,000 engineers. And it's interesting, often these Chinese companies were actually not government, but they were started by sort of individual entrepreneurs who just built these huge companies in a very short period of time. And you know, like 90% of the world's solar panels come from China. And so they have said that we're going to dominate that and we're going to dominate kind of the new technologies. And of course, you know, this is. To call it industrial policies is an understatement. It's a five year plan.
- [41:51]
A
Yeah, they've got the ability, that state society dynamic where they're able to kind of drive that down. They've also been thinking about their supply chains and their kind of investments in Africa and how they're going to fuel these batteries for themselves. So we should come back to that because my question for you is when you look at the development of the world that we've come to from the 1990s when this book ended, to the 2000s where we are today in that 30 year period, it's like, do you think we're going to continue to be hydrocarbon man 50 years from now or do you think we're going to become hydro copper man because we're so driven by batteries or something else?
- [42:25]
B
Well, I think we are going to be more electrified.
- [42:28]
A
Hydroelectric.
- [42:30]
B
Hydroelectric man.
- [42:31]
A
Hydroelectric chick also.
- [42:33]
B
Right, Exactly.
- [42:34]
A
The smart hydroelectric chick. Dumb questions.
- [42:37]
B
Podcast Smart girl. That's right.
- [42:39]
A
That's it.
- [42:39]
B
The electrified smart girl. Right.
- [42:41]
A
That's the next show. That's what you think we're going to become, I think.
- [42:45]
B
Well, I think electrification is a big direction and that's what got me so interested in copper as a metal and all the demands. People never think about copper and we just take lighting everything for granted. But then started to look and say, well, the second demand that's coming is from energy transition. What we've been talking about. And that was one of the things that was left out of the thinking about energy transition. It's very metal intensive. An EV, an electric car uses 2.9 times more copper than a conventional car. Photovoltaics use copper.
- [43:23]
A
What is a photovoltaic?
- [43:24]
B
Solar panels.
- [43:25]
A
Oh, solar panels, sorry, gas. I should know that.
- [43:28]
B
So you have that demand growth, then you have this data center revolution which only really took off in November of 2022. And then you have defense and the electrification of the battlefield that we can see in Ukraine. And then walking down the street are humanoid robots. And we talk about people being wired. Those are really wired. They're very copper intensive. So suddenly you have this demand for this metal, for all these things.
- [43:57]
A
Oh, we're literally going to become hydro copper man.
- [43:59]
B
Yeah. So it becomes.
- [44:01]
A
Yeah, a metal man.
- [44:02]
B
Yeah. So metals become much more important. And we saw, you know, when Donald Trump put had his liberation day with tariffs, you know, China was going to be a big recipient of tariffs, but it turns out China controls these things called rare earths. And China says, well, you're going to do that to us. We're going to restrict rare earths. And you're not, we're not going to let you use it in military programs. And so there's now this recognition of mining and minerals as essential, both for national security, but also energy transition.
- [44:32]
A
Let's talk about AI because that is, as you've said, the hyperspace.
- [44:35]
B
Nobody's talking about it.
- [44:37]
A
No one's talking about it. We couldn't possibly leave. I mean, you did bring up humanoid robots, which I feel like is the gateway drug for AI Hyperscaler conversation. I mean, there is a huge race between the US and China to power the chips right now. Will AI prolong the fossil fuel era, or do you think it will drive innovation in new forms of energy development?
- [45:00]
B
Both.
- [45:01]
A
Both.
- [45:01]
B
Let's put it this way. You need a lot of electricity for data centers. Data centers in the United States today are about 4 to 5% of our total electricity consumption. It looks like within five years, it'll be somewhere between 14 and 17% of our electricity. But the Biden administration wanted to get all hydrocarbons, all natural gas out of electric generation. Sorry, that's. It's going the other direction. It's increasing now because if there's a race for AI, there's a race for electricity. The CEO of Amazon, Andy Jassy, said the main constraint on AI is electricity.
- [45:36]
A
Yeah. So I guess here's a smart girl jam question. Is it possible there is not enough energy in the world to keep feeding us? Like, I don't mean feeding us food, I mean powering our consumption desires?
- [45:48]
B
I think that, you know, if, if there isn't, then you'll do less of it.
- [45:52]
A
Is it possible that that's the concern?
- [45:54]
B
I think right now we're living in a time where people are really scrambling to meet like this growing electricity demand in the United States, at least for about 25 years. Electricity demand didn't really grow. They added electric equipment of everything, but we became more efficient. Suddenly it's you know, suddenly you have demand growing for electricity, and people are scrambling to, how do you meet it? And the data centers are at the. At the front of that. You know, if you want to order a natural gas turbine today for electric generation.
- [46:21]
A
I ordered one yesterday, so I'm good.
- [46:22]
B
Well, exactly. It's not going to be delivered overnight. It'll be delivered in five years.
- [46:25]
A
Yes.
- [46:27]
B
I mean, when I came up, I noticed some Amazon packages in the elevator, but none of them look like a natural gas turbine.
- [46:32]
A
I don't know. How big would that be? How big is the natural gas?
- [46:35]
B
It'd be pretty big.
- [46:36]
A
Bigger than the studio or the room that we're in. Okay, that's interesting. Elon Musk says he might just be talking his own book here because he wants to be out in outer space developing the place. But he says that we'll soon be making chips that we cannot turn on, that we'll have more chips than electricity, and that China is not going to have this problem, but that Americans are going to have this problem. His natural conclusion to that is build, baby, build. But build in outer space.
- [47:03]
B
Yes.
- [47:03]
A
What do you think about this?
- [47:05]
B
The two parts of it? It is true. China does not have a constraint on electric power because they've built so much and they have much more generating capacity than we do. And by the way, they can do things really quickly that, you know, they're building, you know, nuclear power plants quickly and everything. They're doing everything. They're doing wind and solar, they're building new coal plants, they're using natural gas for electric generation, and they're also building nuclear at a pretty rapid rate. And so I think there's a general view that we have a problem about sufficient electricity. He has said, and others have said about data centers in outer space. I have, you know, no expertise to speak on that, but it certainly has gotten people's attention.
- [47:51]
A
Yeah.
- [47:51]
B
Somebody who worked for Musk said to me the other day, he's very prescient in what he says. He doesn't just always get the timing right, but given what he's, you know, the things he's done a. With Tesla, and I wrote about that a lot in the quest about, you know, where did this all come from? Because electric car was considered dead. You know, how it all came together.
- [48:11]
A
It also came together from taxpayers. Right. Came together from policy, not just for.
- [48:15]
B
Well, that's true. That people don't. That a lot of the profits of Tesla came from people having other automobile makers having to pay credits to them.
- [48:26]
A
Whether we build data Centers in space or we're, you know, we see them kind of pollute or populate our world. There's also another question that I think AI has raised and climate change has raised for a lot of people who are millennials, maybe Gen Z as well, which is there's a population problem in the world. There's a replacement rate issue that we're seeing across various countries, including the U.S. including South Korea, where people are not having enough babies. And part of the reason that people are citing for not having children, I think, has historically been climate change can see and a negative outlook on the world. And now I think there's a big question of with AI coming and with this like, energy challenge and this push away from sustainability and, you know, people are worried about having kids and I wonder what you, what advice you would give to them.
- [49:15]
B
Well, I think, you know, I know it became in some circles in maybe North America and in Europe, women say, I'm not gonna have children because I'm worried about climate change and this kind of apocalyptic view that the world was gonna end in 2030. But I wonder if, you know, but if we look at birth rates in South Korea or Italy or elsewhere or Japan, is that the main reason that people and women not having children or is it age? Is it. What do you think?
- [49:51]
A
I mean, I talk about it a lot on the show and I think that it is part of the shift in gender roles and, you know, the idea of a working woman, a woman working through a career. I think it's the kind of independence culture and the hyper individualized society we live in where everyone needs to have their own car and their own X and their own Y that we've just pushed away from family. I think it's a reality that we just as a society haven't absorbed yet. And it's going to take multiple generations to figure out, how does this, this man woman thing work? I do think the climate change, like, if you look at the data and you really push on people, that wasn't often the reason people weren't really having changes.
- [50:24]
B
Yeah, that's what I wanted to ask and ask you. I mean, it got a lot of attention and you heard women on the west coast saying that, but it just didn't seem that that would be the main reason.
- [50:33]
A
I think it's a global issue. I think part of it is, I think having a negative outlook on the future is a real reason. There are a lot of people who look around the world and say, do I want to bring a kid into this world? You know, and maybe it's always felt this way. I mean, you have a longer view of history than I do, both because you've lived more years and because you added an extra hundred something while writing this book to your portfolio. But I think people are really worried about the fate of the world, and I think there's a tremendous amount of uncertainty that probably isn't even captured in this book. It probably was there before the Industrial Revolution or around the time of the Industrial Revolution of what's the future of work? What's the future of humans? There is an AI slop video that exists where it's a documentary, a mockumentary made 20 years into the future. And you have kind of like Sam Altman having gained a few pounds and Jeff Bezos no longer going to the gym, and they're talking about how the world has changed. Then you see a bunch of human beings at what looks like a peloton, like, rowing for energy, and they're like, yeah, we've had the humans, we've made it their purpose that they will go to work, to work out to power the data centers that we need to consume. So there's a really dystopian vision in some people's minds.
- [51:48]
B
What's often cited now is, you know, the economic prospects of younger people as to. At what age you're able to buy a house and all those things. The affordability issues there as well.
- [51:59]
A
Yeah, I think it's a real challenge, and I think that's part of the. Part of the. The problem of the energy transition has been when it's more expensive to do a thing right, when it's more expensive to do the right thing or the green thing, or, you know, but I think it is a combination of, like, all the things that you're talking about. Countries feeling they worry about their own security, they worry about their own economies, they worry about their own ability to innovate. And I think humans, at a personal level, we have all these questions about our changing futures, you know, and what will happen. I think the data is a little bit out of whack with the vibes right now. There's this huge sense that people have that, like, the world as it's projected to us or told to us as it is, is not actually how it is. The, you know, every government, whether it's this one or the one that was previously in power, will tell you that the numbers are better, that the prices are getting cheaper, that the world's getting better. And I think a lot of people just haven't internalized that to their own life.
- [52:52]
B
Yeah. And I think that's. Yeah, I understand what you're saying, that there isn't optimism about the future.
- [52:58]
A
Yeah. Do you think that's unwarranted, this pessimism about the future?
- [53:03]
B
Well, I think it's better to be optimistic than pessimistic. It's better for your health to be optimistic than pessimistic. But there are questions out there. I mean, one of the themes I talked about in the new map, with the end of the Cold War, we kind of thought, okay, the risk of world war, that sort of thing is over. We're seeing these wars going on now, and we see that China and the United States are in rivalry and see people building up their militaries against each other. So there's that to worry about then, clearly. And I think we'll see that in the election in November. A lot of anxiety about the impact of AI on jobs.
- [53:38]
A
Yeah, that's. I mean, that I think is a big question for people about, I mean, take away what kind of job your kid's gonna have, are you gonna be able to have your job to keep, keep, you know, having kids?
- [53:49]
B
Yeah, you know, blue collar jobs partly got exported, but also, I mean, there's still a lot of them, but they were also automated away.
- [53:58]
A
Right.
- [53:59]
B
You know, new factories are going to be much more automated than in the past in robotics. But I think that now it's, you know, kind of the white collar thing. There's that newspaper in Cleveland which has hired a new reporter, which is AI to do the reporting.
- [54:15]
A
I mean, so many people like Claude Cowork is a whole thing. But everybody, everybody who runs a business, their expense for tokens is going through the roof. I mean, they're spending so much money and there's a lot of thinking that, oh, the future of work depends on when are the tokens that are required to do the task. The job description of a human going to be cheaper than the human.
- [54:35]
B
Right. I think that is an anxiety. I don't know where you would say put your finger on it, but I think it's last eight months or so that it's become more pervasive.
- [54:46]
A
There are a lot of viral blog posts about the future of work and AI that are being circulated in kind of millennial Gen Z, Gen X, probably group chats and people are freaking out.
- [54:57]
B
And you do hear that young people who are getting out of school now are finding it more difficult to find jobs.
- [55:03]
A
Yeah.
- [55:04]
B
I mean, and one of the things also just to note that Like I heard an engineering company say, well, we'll eliminate our younger people, but then you won't have people who have been apprentices
- [55:15]
A
to be able to take over.
- [55:16]
B
To take over.
- [55:17]
A
We'll just have the robots do it. Yeah, they'll just have the robot CEO.
- [55:20]
B
Yeah, yeah. I mean, we know some people who are robotic, but they're not yet robots.
- [55:25]
A
We do. Do you want to name some.
- [55:27]
B
No, not later.
- [55:29]
A
Later. Off. Off the cameras. But let me ask you, then again, I mean again, you have, you know, lived more decades than I have and you have studied 140 years prior to the 1990s. So you've looked at history from the mid-1800s to today. Does this moment feel scarier than anything you've seen since 1850?
- [55:51]
B
No, I think this is a scary moment in many ways, but we've had scary moments before. Living During World War II, people didn't know how that war was going to come out. With the nuclear arms race between the United States and the Soviet Union, people worried about nuclear war. We instead, in elementary school, we used to have drills of what to do during nuclear war. I think there have been other periods of great fear about the united future of the United States, whether a country would hold together. That said, I think in some ways this is a scary time because we're looking at a whole new technology that only really, although it's been in development a long time, only really burst on the scene three years ago. And there is this growing sense that maybe this new technology is going to change everything.
- [56:43]
A
Do you think it's going to change everything?
- [56:45]
B
Probably not.
- [56:47]
A
I mean, the interesting thing, and this goes back to your book, the prize, is that it's often not the technology or the resource that's changing it. It's the entire ecosystem of the, of what's being developed around it. If Rock oil were still the thing that the guy in the 1850s had, were it not for lighting and then Thomas Edison discovering the light bulb and that becoming competitive and somebody else coming along and saying, hey, cars, that's going to be a big thing and that becoming an opportunity, the world wouldn't have shifted in the way that it did, right?
- [57:16]
B
Well, I mean, we are definitely at a big shift in the economy, in the nature of work, in how we do things, and in the relationship among countries.
- [57:28]
A
Do you think that our system in the United States is able to govern through that change?
- [57:34]
B
Well, that is a very big question that I think our institutions are going through a period of testing. I mean, here we are at the 250th anniversary of the United States and thinking, well, you know, made it this far, but how do we adapt to the world and how is it changing and realizing, you know, the founders or the framers, as they call it, really did have this idea that you needed to deal with power, you needed to balance power. And I think that was kind of a fundamental principle. It's not necessarily the most efficient way to get things done, but it is a way to keep things in balance and the checks and balances and, you know, that's the great art of American civilization.
- [58:24]
A
And those institutions are under threat right now.
- [58:26]
B
Yeah, definitely under pressure about that. And I think we're in a period of testing the resiliency of our institutions. So I think that's part of the uncertainty that's there too. But I think the, the dominant question out there is how does. Does AI change lots of things or does AI change everything?
- [58:48]
A
In 1991, you were quoted saying what your book, the Prize says is that it's not enough to have good science or righteous belief in the environment. You have to understand how power and economics affect policy. You must have perfected a battery for an electric car. But if you don't figure out how Wall street works with Washington, you'll be sitting there with that battery until the year 2020. 2010.
- [59:08]
B
Did I say that in 1991?
- [59:10]
A
Yeah. Do you feel press yet now you want to pat yourself on the back?
- [59:13]
B
I thought I was talking about batteries then, when no one was talking about batteries.
- [59:16]
A
I think talk about looking down the road.
- [59:18]
B
Yeah.
- [59:18]
A
Then 1991, how Wall street works with Washington.
- [59:23]
B
That's right on the agenda today.
- [59:25]
A
That seems very much on the agenda today.
- [59:26]
B
About 2010 was when the electric car started to prove its economic viability. Yeah, that's a pretty good call.
- [59:32]
A
Pretty good call. But this is also seems to be changing. I mean, the way in which Washington is doing business these days. You know, I mean.
- [59:41]
B
Well, it even started under the Biden administration with industrial policy. I remember I was in Japan because for many years the US had criticized Japan for having industrial policy where the state would guide investment and make decisions. And they were sort of now saying, well, now actually the US government is doing that. And now, of course, course it's on a wholly different scale.
- [60:03]
A
Yeah. The Trump administration has its own form
- [60:05]
B
of it's super industrial policy and describing it as such.
- [60:10]
A
Yeah. And do you think it'll pan out? You think it'll be successful?
- [60:14]
B
Boy, you're asking me to be prescient again.
- [60:17]
A
I mean, you did it in 1991, Dan?
- [60:19]
B
Well, I think some things will work out, but I think things will take longer. I mean, it's funny, we're talking about employment and not enough jobs, but actually we don't have enough electricians. We do not have enough people to build things in the United States. That's an area that actually we need more if we're going to get these things built. And I am conscious how long it takes. I mean, if you decide you want to open a new copper mine and you have a discovery, if you did it on average around the world, it would take you 17 years. In the United States, it would take you 29 years.
- [60:51]
A
So I want to end discussing domestic politics because, as we started off saying, is every war fought for oil? There's a question of is every election one in the pump? And you discussed this. I mean, there is this idea of a Strategic Petroleum Reserve that exists. And what is it exactly?
- [61:08]
B
The Strategic Petroleum Reserve was an idea originally. President Eisenhower had it after World War II because he'd known how important oil was. But it was after the oil crisis of the 70s that said we need to store oil. So if there's a disruption in some place like the Strait of Hormuz, we will have oil that we can draw upon that will last us 60, 90, 120 days.
- [61:30]
A
And Biden drew down on that several times during the Ukraine war, effectively. Right. And that was to keep the prices manageable at the pump.
- [61:39]
B
Yeah, that was to keep prices. I mean, it was a sort of form of price control. Yeah.
- [61:44]
A
And is that. Is there a lot of Strategic Petroleum Reserve left for America right now? Is there, like, a limited storage?
- [61:51]
B
There are about, like, 400 million barrels. So it's there. And other countries have reserves, too.
- [61:56]
A
And then is it common for presidents to deploy that?
- [62:00]
B
It's only sporadically been used, but we do notice that sometimes it gets used invoking strategic reasons, but it seems to not be unconnected to the price of gasoline at the pump.
- [62:11]
A
Right.
- [62:11]
B
Because you have to be seen to be doing something.
- [62:14]
A
Got it. It's like their version of monetary policy a little bit with oil. Right. It's kind of like. But they don't need to go through the independent Fed.
- [62:22]
B
Yeah, that's right.
- [62:23]
A
They just do it themselves. So now we find ourselves, obviously, in this pickle in Iran. Oil prices have gone wild in recent days. I'm curious, when you look back at the Iraq war past this book, Part of the Quest, there were a lot of theories then that, like, we were going to this war for I mean, we clearly weren't going there for the information that was presented by the Bush administration. 2003, not 1991, the 2000. We clearly weren't going for the reasons that were presented by the then Bush administration to the United Nations. There was a theory that that war was about oil.
- [62:53]
B
Yeah.
- [62:54]
A
Looking back 20 years, was that war about oil? And what was the consequence?
- [62:57]
B
Let's say two. First, there was the Gulf War in 1991, and I think that was about oil. It was a question of whether Saddam Hussein would dominate the. At that point, it was by far that we didn't have shale oil or anything.
- [63:11]
A
Yeah, but this was 1991 they were talking about.
- [63:12]
B
Yeah. So I'm saying that was clearly about oil. I remember talking to one of the decision makers and he said, well, it was the control of oil. What you're saying, the geopolitical importance of oil was that was what that was there. But he said, we couldn't say that. So we said, jobs, jobs, jobs.
- [63:30]
A
They said jobs was the reason that they went in to preserve Kuwait being annexed from Iraq. That was what was sold.
- [63:37]
B
Well, they said, because otherwise it would indirectly would be because of oil would lead to grave economic problems. So 2003, that question is still there. I asked one of the key decision makers, I said, exactly why did we go to war? And he said, well, the answer's murky, but 2003, invading Iraq, we'll never, I think, have a clear idea of whether it was just the unfinished Finnish business of 1991, where George H.W. bush did not go on to Baghdad and they did. And then, of course, that's another example. I remember talking to, again, to somebody who said there had been this great confidence that, oh, in 10 weeks we'd solve the problem of Afghanistan. It turned out we didn't. And that led to this overconfidence of going in. And, you know, overconfidence is. Is one of the big mistakes that people make, but they don't know they're making it at the time.
- [64:38]
A
So what are we overconfident about right now?
- [64:41]
B
Well, I think that's going to bite
- [64:44]
A
us in the future.
- [64:44]
B
Yeah. I mean, I think as a country, I think that alliance system that we had in the past with NATO, with Europe, with Japan and so forth, that's not what it was. And I think that was a real source of strength for the US and the strength for Europe and a strength and a source of stability for the world.
- [65:04]
A
Ukraine, Venezuela, Iran. Which one will have the greatest impact on oil prices?
- [65:10]
B
Absolutely. Iran Will have the biggest impact because it involves all of those, the sources, such important sources of oil.
- [65:19]
A
This is a scary time.
- [65:21]
B
Yeah. But we should also think about the things to be optimistic about.
- [65:25]
A
Sure, there's lots to be optimistic about. We won't talk about them here, but no, there's a lot.
- [65:29]
B
Podcasts.
- [65:30]
A
Podcasts. The podcast market is booming. Everyone's gonna have their own podcast. No one will be listening to anyone else's podcast.
- [65:35]
B
Yeah, exactly. The podcasts are great innovation and they've changed the way we get information.
- [65:41]
A
They have. Sometimes for good, sometimes in concerning ways. And I'm trying to be part of the good. Two last questions before we leave here. One, if you were to write. If someone. It won't be you, maybe. I don't think if someone in 140 years is gonna write the book the prize or 100 years from now, what do you think the prize would be? Is it still going to be oil? Is it going to be chips? Is it going to be.
- [66:01]
B
Well, yeah, some people describe chips as the new oil. I think it's probably. I mean, the story is going to be the story of A.I. i mean, and just how transformative, how it came about and kind of. Not that it just didn't start in November 2022 when OpenAI did its release, but you know, how long it had been. So I think that would be the epic story of AI will be a very eye opening and important story for somebody to write.
- [66:29]
A
Yeah, the Pulitzer Prize in the year 2130 will maybe go to that book. I think it'll be shorter because the speed and the scale, the hyperscale.
- [66:38]
B
Yeah, the books have to be shorter
- [66:39]
A
anyway because attention spans are getting less. We end every episode of Smart Girl. Dumb questions asking our guests, who are so esteemed, so Pulitzer Prize winning, et cetera, what they are dumb about. A dumb question that you have that you haven't bothered or wanted to ask out loud.
- [66:53]
B
Well, I had two questions on my mind in the last week. Why is interval training better than regular training? Ah, so that was one question.
- [67:02]
A
You're doing a lot of high intensity interval training.
- [67:04]
B
Well, I've just started to understand it. And then the other one just, you know, when you're in a skyscraper. Just a question. How do they put it? How do they put this all together?
- [67:17]
A
How do they build that?
- [67:18]
B
Yeah, how do they build that? So that, you know, I was thinking I should really read a book on engineering just to understand all the things that have to go into building something.
- [67:26]
A
I mean, you probably know how long it might Take to build that in the United States versus China. But you don't know how long all
- [67:31]
B
the people that you have to do and make sure. How is it that everything actually fits together and some things aren't orthogonal or something like that?
- [67:39]
A
Some days, Daniel, I think that we are in a video game. That's what I was getting at with the fossil fuels powering the cars. You know, this whole simulation theory argument. No, there's a whole universe of people, or not universe. It's probably too big. But there's a cohort of people who believe that we're living in a video game simulation.
- [67:57]
B
Right. Like the Truman show, in a way.
- [68:00]
A
In a way. So I think Elon is one of the people who thinks that might be possible because it just seems so insane that you're. That these, you know, all this organic life was on the earth so many years ago, and then it got destroyed over time. And then we discovered that that is fossil fuels and that we use that. Then we pump it into a Mario Kart. You know, it's like the mushroom gets bigger when it gets out of the block. And now we're thinking about exploring the edges of the universe, like going to space to build data centers. And I don't know, I think it's. Sometimes when I speak to people who cover technical topics like energy or AI or electricity, I find myself very curious about simulation theory.
- [68:40]
B
Right. Just that this is all. We're all living in a video game.
- [68:44]
A
I don't know, because it seems inexplicable, but it is.
- [68:47]
B
I mean, this question. Question, why did all of this civilization, with all these people rushing around and all these people doing everything, why did this all come about? Yeah, yeah. How did this all come about? Just what's the theory of how we got here?
- [69:03]
A
Yeah, that's a good question.
- [69:06]
B
How did we all get here?
- [69:07]
A
How did we all get here? That's a good. That's a good. But that's not a dumb question. That's a very smart question. Anyways, thank you so much, Daniel, for being with me. I. I so appreciate you showing up and hanging out with us at Smart girl dumb questions.
- [69:18]
B
This was really great fun.
- [69:19]
A
This was fun.
- [69:20]
B
Very interesting and very probing and a lot to think about. So I appreciate the way you shaped the discussion.
- [69:28]
A
Oh, thank you. I appreciate that. That means a lot coming from you. I appreciate that very much, Dan. Okay. A lot of history, future car buying, career shaping, and baby making to think about after that conversation. But I went in kind of dumb about where we were going in the sustainability agenda like what's happening with everything green. And I left feeling a lot smarter about what's practical, where we're headed and why we need to keep trying to diversify not just for sustainability, but also for energy, security and innovation and the future of civilization and optimism I guess. And I think I also like left smarter and somewhat sadder about how some things don't change. Like our hundred plus year lust for oil that will at least extend or expand wars even if it's not the primary reason they all start. And omg I cannot believe that Daniel Jurgen did not know about simulation theory, but I just love how he is knowledgeable about everything else except high rises and high intensity interval training. Next time we're going to take the podcast at Barry's Boot Camp with Daniel Jurgen. But I loved how he showed up. He hung out, he was down to talk through the minutia and the kind of meta of life. I want to know what you think of this conversation, so please drop us a comment. Follow us ontgirl Dumb Questions. You can email me at naimaraza101gmail.com I will always reply and obviously share this episode with your friends, your family, your mom, someone else who doesn't know about high intensity interval training and wants to come to Barry's Boot Camp with us. Anyways, we'll see you next week on an all new Smart Girl Dumb Questions the Second this episode was produced with Desta Wonderad and Melissa Gibson. It was edited by Darlene Machiem, mixed and engineered by Johnny Simon and I'm your host Nae Ma Raza. See you next week. Two Good and Coffee Creamers are made with farm fresh cream, real milk and contain 3 grams of sugar per serving. That's 40% less than the 5 grams per serving in leading traditional coffee creamers for a rich, delicious experience. Whether you enjoy your coffee hot, cold, bold or frothy, two Good Coffee Creamers make every sip a good one. Two Good coffee creamers Real goodness in every sip. Find them at your local Kroger in the creamer aisle.