WEBVTT 1 00:00:07.679 --> 00:00:09.919 You're listening to Redefining Energy. 2 00:00:10.560 --> 00:00:12.199 Your co hosts. 3 00:00:11.960 --> 00:00:13.679 From Berlin Gerard Reed. 4 00:00:13.960 --> 00:00:19.160 And from London Laurent Today on Redefining Energy, we're going 5 00:00:19.239 --> 00:00:22.359 to talk about fossil fuels and whether we're going to 6 00:00:22.399 --> 00:00:24.800 actually see peak demand in the next few years or not. 7 00:00:25.480 --> 00:00:29.399 And of course there are furious debates around experts whether 8 00:00:29.760 --> 00:00:33.359 we're going to see the consumption stay around one hundred 9 00:00:33.439 --> 00:00:35.799 million barier level per day or if we're going to. 10 00:00:35.799 --> 00:00:39.679 Go down exactly. So we decided we bring in an 11 00:00:39.719 --> 00:00:43.320 expert someone Listen, I've known a long while. It was 12 00:00:43.439 --> 00:00:46.039 like myself. Comes in the equity research background, and what's 13 00:00:46.039 --> 00:00:46.479 his name? 14 00:00:50.960 --> 00:00:53.920 His name is Bond, King's Mill Bond. 15 00:01:04.159 --> 00:01:06.760 He's definitely got the coolest name in the industry, doesn't it. 16 00:01:08.319 --> 00:01:12.319 Yes, not only has a great name, but he works 17 00:01:12.359 --> 00:01:16.680 at RMI and he publishes exceptional research on the future 18 00:01:16.719 --> 00:01:17.359 of energy. 19 00:01:17.879 --> 00:01:20.560 So let's bring him on the show. King's Milk, Welcome 20 00:01:20.599 --> 00:01:21.079 to the show. 21 00:01:21.439 --> 00:01:22.799 Thank you for having me. Folks. 22 00:01:23.159 --> 00:01:26.120 Well, I'm going to jump right in. Last month's ex 23 00:01:26.239 --> 00:01:29.079 and Mobile release a report saying that basically we're going 24 00:01:29.159 --> 00:01:32.519 to continue burning one hundred million buried of oil for 25 00:01:32.640 --> 00:01:35.959 the foreseeable future, which, of course Appeck found it very 26 00:01:36.000 --> 00:01:39.239 interesting report. But we brought you because you have a 27 00:01:39.239 --> 00:01:41.280 bit of a contrarian view on the subject. 28 00:01:42.040 --> 00:01:45.640 I don't think it's especially contrarian to say that incumbents 29 00:01:45.680 --> 00:01:49.480 taught their own book, and incumbents expect a future in 30 00:01:49.519 --> 00:01:53.159 which they remain extremely profitable. Think about the famous debate 31 00:01:53.200 --> 00:01:56.840 about horses and tractors in the nineteen twenty see Horse 32 00:01:56.879 --> 00:02:00.959 Association of America regularly put out report telling us that 33 00:02:01.079 --> 00:02:04.400 forces were the future and the tractors didn't work. It's 34 00:02:04.439 --> 00:02:07.560 the same thing here with excell It's not surprising that 35 00:02:07.640 --> 00:02:10.199 exot is telling us that in twenty fifty we'll still 36 00:02:10.240 --> 00:02:12.879 be using a lot of oil. But you have to 37 00:02:13.039 --> 00:02:16.919 believe in a lot of very profoundly improbable things if 38 00:02:16.919 --> 00:02:20.159 you want to believe their forecosts. Give us the contrarian view, 39 00:02:20.240 --> 00:02:23.039 then it's not contrarian at all. I think it's merely 40 00:02:23.280 --> 00:02:27.000 a realist view and a reflection of what is happening 41 00:02:27.159 --> 00:02:29.759 in the real world, rather than the kind of make 42 00:02:29.840 --> 00:02:33.360 believe world of spreadsheets in which fossil fuel incumbents inhabit. 43 00:02:33.840 --> 00:02:37.360 And reality similarly is that you have exponential growth of 44 00:02:37.520 --> 00:02:42.000 clean energy technologies which are now large enough to disrupt 45 00:02:42.039 --> 00:02:46.280 the current fossil fuel system, and they will push fossil 46 00:02:46.280 --> 00:02:49.400 fuel demand into permanent decline by the end of this decade. 47 00:02:50.000 --> 00:02:52.520 That's a big statement. Tell us where does that start 48 00:02:52.599 --> 00:02:54.800 and how do we when do we know we've really 49 00:02:54.840 --> 00:02:57.400 reached that tipping pointer, because that tipping point is a 50 00:02:57.439 --> 00:02:59.800 game changer for the oil industry and also I think 51 00:03:00.199 --> 00:03:01.240 clean energy in general. 52 00:03:01.800 --> 00:03:04.800 It's very important to focus on the facts of the 53 00:03:04.800 --> 00:03:07.280 case and just to look at the information, the data 54 00:03:07.280 --> 00:03:11.360 that's coming out. Year after year, we're seeing the exponential 55 00:03:11.360 --> 00:03:14.680 growth of these clean energy technologies of solar and wind 56 00:03:14.719 --> 00:03:17.639 and batteries and of course all of the paraphernalia surrounding 57 00:03:17.719 --> 00:03:21.000 that system. And then equally, year after year we're seeing 58 00:03:21.280 --> 00:03:25.439 peaking demand for one aspect after another of the current 59 00:03:25.479 --> 00:03:28.199 fossil fuel system. So just to give you a couple 60 00:03:28.240 --> 00:03:31.400 of examples, So, fossil fuel demand peat in the OECD 61 00:03:31.680 --> 00:03:35.120 almost a generation ago in two thousand and seven. Fossil 62 00:03:35.159 --> 00:03:39.120 fuel demand peat in the industrial sector a decade ago 63 00:03:39.319 --> 00:03:42.479 in twenty fourteen, as the result of the electrication of 64 00:03:42.599 --> 00:03:48.039 Chinese industrial sector. Ice car demand peaked in twenty and eighteen. 65 00:03:48.560 --> 00:03:50.319 I could go on for a long time, but you're 66 00:03:50.360 --> 00:03:54.919 just seeing one absolutely indisputable peak after the next in 67 00:03:54.960 --> 00:03:57.479 the old system as the new stuff comes in. And 68 00:03:57.520 --> 00:04:00.319 that's precisely what you would expect in any. 69 00:04:01.039 --> 00:04:05.879 Can I be contrarian to the contrarian square contrarian if 70 00:04:05.879 --> 00:04:09.120 I look at the world globally and I'm totally with 71 00:04:09.199 --> 00:04:13.400 you on the OECD, only this year will the addition 72 00:04:14.000 --> 00:04:17.240 of wind and solar be one hundred percent of the 73 00:04:17.240 --> 00:04:21.319 growth of electricity. Why it's because let's name it the 74 00:04:21.360 --> 00:04:26.240 global sauce India groing. It's called demand that's for electricity. 75 00:04:26.839 --> 00:04:30.759 And the second thing is, although the EV market is 76 00:04:30.839 --> 00:04:34.480 going we're going to do seventeen million evs, so the 77 00:04:34.639 --> 00:04:37.600 time it's going to take to move the transportation sector 78 00:04:37.680 --> 00:04:40.920 to electric while at the same time jet fuel is 79 00:04:40.959 --> 00:04:43.759 going up and chemicals is going up. So are you 80 00:04:43.879 --> 00:04:46.680 really confident that we're going to see a significant decline 81 00:04:46.720 --> 00:04:48.439 because I'm still on the fence here. 82 00:04:49.240 --> 00:04:52.399 So, Laura, you're putting together a lot of different issues 83 00:04:52.439 --> 00:04:54.800 here and hard to address them all in a single comment. 84 00:04:54.800 --> 00:04:59.279 But let's stop with electricity. Electricity system, there are full 85 00:04:59.399 --> 00:05:02.839 basic pieces when it comes to countries inside electricity demand. 86 00:05:03.120 --> 00:05:06.319 So you've got the OECD, you've got China, you've got 87 00:05:06.319 --> 00:05:09.079 the Global self, and you've got the Better States. Those 88 00:05:09.079 --> 00:05:12.160 are your four pieces inside the system. And we have 89 00:05:12.199 --> 00:05:14.879 this SECDP about fifteen years ago, I should say, we 90 00:05:14.920 --> 00:05:18.000 have the China peak in twenty twenty three. Those two 91 00:05:18.199 --> 00:05:22.920 regions alone around sixty percent of the total, so we 92 00:05:23.000 --> 00:05:25.680 already crossed, as it were, the tipping point. You then 93 00:05:25.720 --> 00:05:27.519 have the global self, or actually one third of the 94 00:05:27.519 --> 00:05:30.759 global self has also seen peak electricity demand. It's right 95 00:05:30.800 --> 00:05:34.839 across Latin America and in various other countries. So you're 96 00:05:34.879 --> 00:05:37.160 kind of left with two or one and a half 97 00:05:37.160 --> 00:05:39.920 pieces petro states, which is about five percent of the 98 00:05:39.920 --> 00:05:43.079 global population, and the rest of the global self, where 99 00:05:43.079 --> 00:05:45.720 in fact there's also growth taking place quite quickly. The 100 00:05:45.720 --> 00:05:47.959 one I guess is that the decline in the two 101 00:05:48.040 --> 00:05:51.399 biggest pieces of the system OECD in China will outweigh 102 00:05:51.680 --> 00:05:54.600 the relatively small amount of growth in the remaining growing 103 00:05:54.720 --> 00:05:58.519 parts of the system, and that again is absolutely normal. 104 00:05:58.519 --> 00:06:01.160 You'd see that in many other transition. Then when it 105 00:06:01.160 --> 00:06:03.920 comes to your second point, for about the electric vehicle 106 00:06:04.199 --> 00:06:06.680 story once more, here you've got to look at what's 107 00:06:06.680 --> 00:06:09.319 happening in the world's largest market, which of course is China. 108 00:06:09.439 --> 00:06:12.399 As everyone knows, electric vehicles are now fifty percent of 109 00:06:12.639 --> 00:06:16.680 total sales in China, and if we continue to extrapolate 110 00:06:16.720 --> 00:06:18.800 the S curve, then we're going to be basically near 111 00:06:18.800 --> 00:06:21.240 one hundred percent by the end of this decade. And 112 00:06:21.399 --> 00:06:25.560 from China, the low costs and that technology then spreads 113 00:06:25.600 --> 00:06:27.879 across the global self, and that means you can of 114 00:06:27.920 --> 00:06:30.920 course have what Hues called reverse sedience, that is to say, 115 00:06:31.040 --> 00:06:34.160 certain specific countries which hold back against change, but it's 116 00:06:34.160 --> 00:06:36.399 not going to slow aback the global tig King. 117 00:06:36.519 --> 00:06:38.120 Can I ask you about I can sort of get 118 00:06:38.160 --> 00:06:40.639 my head around peak oil demand. I can ask get 119 00:06:40.639 --> 00:06:44.399 my head around peak coal demand. Where I sort of 120 00:06:44.439 --> 00:06:48.000 can't get my head around is natural gas. Can you 121 00:06:48.000 --> 00:06:49.399 give your sort of thoughts on that and how you 122 00:06:49.439 --> 00:06:50.959 see demand for that going forward? 123 00:06:52.079 --> 00:06:52.480 Gas? 124 00:06:52.639 --> 00:06:54.279 The first point to be made, of course here is 125 00:06:54.279 --> 00:06:59.240 that all prices are linked, and therefore, as you have 126 00:06:59.399 --> 00:07:04.680 this new enormous, cheap energy source of renewables coming into 127 00:07:04.720 --> 00:07:09.000 the energy system, it will impact the entire system in 128 00:07:09.079 --> 00:07:12.120 ways that we can't necessarily forecast in detail. In twenty 129 00:07:12.199 --> 00:07:15.079 twenty four. But one has to realize that very simple economics, 130 00:07:15.079 --> 00:07:17.800 when a cheap, giant new energy source comes into a 131 00:07:17.800 --> 00:07:20.720 massive system, everything gets impacted. So then when it comes 132 00:07:20.759 --> 00:07:23.120 to gas, the first bottombout gas is that, as you know, 133 00:07:23.279 --> 00:07:27.800 basically half of gas is used for electricity generation. In 134 00:07:27.839 --> 00:07:31.920 the electricity generation space, the requirement for the gas fulfills 135 00:07:31.920 --> 00:07:36.439 for intermittency is relatively small. The requirement for baseload, however, 136 00:07:36.560 --> 00:07:40.040 is going to be continuously eroded away by superior, cheaper 137 00:07:40.160 --> 00:07:43.600 renewable energy technologies. And this again brings me to something 138 00:07:43.639 --> 00:07:47.279 which is really significant in the debate. We are not 139 00:07:47.639 --> 00:07:50.439 arguing about the date of the endgame, or when the 140 00:07:50.519 --> 00:07:52.959 endgame happens, or how do you solve the last twenty 141 00:07:53.079 --> 00:07:56.800 or even thirty forty percent. We're arguing about a peak 142 00:07:56.839 --> 00:07:59.959 and a decline in a system which is eighty percent 143 00:08:00.079 --> 00:08:04.360 a primary energy production. That's much easier to podcast as 144 00:08:04.439 --> 00:08:07.600 much easier to see that this is happening will happen. 145 00:08:08.319 --> 00:08:11.279 I love what I hear, but also I can see 146 00:08:11.439 --> 00:08:14.800 stuff like in the US or in Canada, gas is 147 00:08:14.839 --> 00:08:18.519 a two dollars pum and btu which creates a fuel 148 00:08:18.560 --> 00:08:22.839 costs omega. What hour a ten dollars, okay, I multiply 149 00:08:22.959 --> 00:08:25.319 by three point four, and then I put the energy 150 00:08:25.319 --> 00:08:28.959 efficiency of the turbine, so ten dollars promega what our 151 00:08:29.439 --> 00:08:31.879 plus is dispatchable. It's going to take a bit of 152 00:08:31.920 --> 00:08:35.440 time for solar plus batteries or even when to reach 153 00:08:35.480 --> 00:08:39.120 that level. Just to illustrate that the data centers are 154 00:08:39.120 --> 00:08:42.279 really power hungry. They took the big talk about their emission. 155 00:08:42.320 --> 00:08:45.000 I think they cook their books, but in reality they 156 00:08:45.120 --> 00:08:48.240 just want power wherever it comes from. So on the 157 00:08:48.320 --> 00:08:51.080 gas story, as long as it's that chip, it's a 158 00:08:51.120 --> 00:08:53.559 tough one to be now, of course, when you're importing 159 00:08:53.600 --> 00:08:56.240 it from Russia and cost of fortune, I understand. But 160 00:08:56.279 --> 00:08:58.480 there are places where they're just going to continue to 161 00:08:58.600 --> 00:08:59.919 use gas as much as they can. 162 00:09:00.679 --> 00:09:04.480 There is no dispute that in the very low cost 163 00:09:04.559 --> 00:09:07.559 locations of gas in the United States, or oil in 164 00:09:07.559 --> 00:09:11.679 Saudi Arabia or coal in eastern Russia, people will carry 165 00:09:11.679 --> 00:09:14.039 on doing this stuff. There is no dispute about that. 166 00:09:14.519 --> 00:09:16.080 Good luck to them, and they'll carry on doing it 167 00:09:16.120 --> 00:09:19.519 for decades to come. But the marginal change is not 168 00:09:19.639 --> 00:09:23.639 happening in those locations. All of the global growth now 169 00:09:23.799 --> 00:09:28.039 in primary energy demant is taking place in the Global South, 170 00:09:28.679 --> 00:09:31.679 and in those countries, they're not channing and out handering 171 00:09:31.720 --> 00:09:34.480 out prices of two bucks. They're buying an energy at 172 00:09:34.480 --> 00:09:37.320 ten and if you're infer multiple is five. In fact, 173 00:09:37.320 --> 00:09:40.279 I suspect the real multiple actually is eight. With a 174 00:09:40.360 --> 00:09:43.159 level of efficiency in those markets, ten bucks is eighty 175 00:09:43.240 --> 00:09:45.759 dollars per mega. What hour you can churn out soda 176 00:09:45.799 --> 00:09:47.960 at forty You could put a battery on that and 177 00:09:48.000 --> 00:09:50.279 account for the intermittency, and it's going to be sixty. 178 00:09:50.639 --> 00:09:54.919 This debate is completely over. Ninety percent of all new 179 00:09:55.080 --> 00:09:58.440 electricity capex globally, in eighty percent in the Global South 180 00:09:58.600 --> 00:10:03.120 is now renewables. There's a few little pockets of resistance 181 00:10:03.200 --> 00:10:05.559 still to be cleared up, but that's completely irrelevant to 182 00:10:05.600 --> 00:10:07.480 the global story. I mean, sorry, I know you don't 183 00:10:07.480 --> 00:10:10.399 necessarily disagree with this at all, but it's also really 184 00:10:10.399 --> 00:10:14.000 important to say that the existence of continuity of fossil 185 00:10:14.039 --> 00:10:17.120 fuels in various parts of the system doesn't matter. It's 186 00:10:17.200 --> 00:10:19.720 all about what's happening at the margin, and what's happening 187 00:10:19.720 --> 00:10:22.279 to growth in the growth markets, and what's happening to 188 00:10:22.399 --> 00:10:24.399 price at the margin, which counts. 189 00:10:24.840 --> 00:10:26.399 Kingswell, I just want to follow up there on the 190 00:10:26.399 --> 00:10:29.320 Global South. My own view is that these countries can 191 00:10:29.440 --> 00:10:33.720 really take a big leap ahead of us because we've 192 00:10:33.720 --> 00:10:35.679 got an old system and I don't mean just a 193 00:10:35.720 --> 00:10:38.320 father fuels. Actually it is a fossil fuel based system. 194 00:10:38.320 --> 00:10:40.720 Even the electricity system is fossil fuel based. It's been 195 00:10:40.720 --> 00:10:43.240 around for one hundred and twenty years. They can embrace 196 00:10:43.399 --> 00:10:47.000 electrification and renewabilization and by doing that they can make 197 00:10:47.080 --> 00:10:48.080 a huge leap. 198 00:10:48.000 --> 00:10:52.360 For that is indutedly true. So basically two narratives of 199 00:10:52.399 --> 00:10:55.840 the Global South. The first narrative is that the Global 200 00:10:55.879 --> 00:10:58.679 Self is a useful way to prop up the dyeing 201 00:10:58.720 --> 00:11:01.320 fossil fuel system decline in the wears, but growth in 202 00:11:01.360 --> 00:11:03.840 the global selth thin good is for that everything is fine, 203 00:11:04.240 --> 00:11:07.360 And that's one narrative that the fossil fuel folks are pushing. 204 00:11:08.080 --> 00:11:11.679 The reality is that the Global Self will ride the 205 00:11:11.720 --> 00:11:16.799 clean tech revolution to energy prosperity and to growth, and 206 00:11:16.879 --> 00:11:20.679 they will use these new technologies in the same way 207 00:11:20.759 --> 00:11:23.759 as they would use any new technology in order to 208 00:11:23.799 --> 00:11:27.120 satisfy the legitimate desire of their own citizens for more growth. 209 00:11:27.679 --> 00:11:30.360 And what's happening in Africa and in Latin America and 210 00:11:30.480 --> 00:11:35.159 South Asian Southeast Asia is you are seeing certain wise 211 00:11:35.240 --> 00:11:39.519 government deploying clean energy technologies in order to get energy 212 00:11:39.559 --> 00:11:42.799 to their citizens, which is cheaper. And to be clear, 213 00:11:43.039 --> 00:11:47.080 the global South is a net fossil fuel importer, just 214 00:11:47.200 --> 00:11:51.000 like Europe and China and India. They don't have a 215 00:11:51.000 --> 00:11:54.039 lot of fossil fuels. They've got sixty percent of global population, 216 00:11:54.559 --> 00:11:59.320 but twenty percent of fossil fuel production and reserves and 217 00:11:59.519 --> 00:12:04.120 seventy percent of global renewable potential. So these folks, of 218 00:12:04.200 --> 00:12:06.919 course they're going to embrace renewables now that the prices 219 00:12:06.919 --> 00:12:09.720 have fallen. So they're basically two barriers in the way 220 00:12:09.759 --> 00:12:13.039 of change in the global cell. The first barrier, not 221 00:12:13.120 --> 00:12:15.639 work can necessarily solved on this podcast, is the fact 222 00:12:15.679 --> 00:12:18.480 that some elites make so much money out of fossil 223 00:12:18.480 --> 00:12:21.320 fuels that they like to continue to important use them. 224 00:12:21.519 --> 00:12:24.200 That's kind of a very specific issue one hundred percent. 225 00:12:24.559 --> 00:12:27.320 But the second issue which has been holding back change 226 00:12:27.480 --> 00:12:30.840 is capex and the observation that the capital costs of 227 00:12:30.879 --> 00:12:34.960 clean tech was higher than the capital costs of deploying 228 00:12:35.000 --> 00:12:37.600 fossil fuels. Now, of course, because of the collapse in 229 00:12:37.679 --> 00:12:40.080 clean tech costs, that is no longer the case. So 230 00:12:40.480 --> 00:12:43.000 the capital cost if you're building new stuff, the capital 231 00:12:43.000 --> 00:12:46.440 costs of solar is broadly comparable with the capital cost 232 00:12:46.679 --> 00:12:50.080 of building coal or gas. And of course you have 233 00:12:50.159 --> 00:12:53.399 the great benefit for the next thirty years. You don't 234 00:12:53.399 --> 00:12:55.720 have to fork out ten dollars per remember to you 235 00:12:56.120 --> 00:12:59.039 to buy your energy whatever it is. So what we're seeing, 236 00:12:59.039 --> 00:13:03.440 of course, is a tenuous shrinkage in reasons not to 237 00:13:03.480 --> 00:13:07.080 deploy clean energy technologies in the Global South. And if 238 00:13:07.080 --> 00:13:09.679 I may give you one further observation of what's happening 239 00:13:09.679 --> 00:13:12.039 across the global self, there is this perception that people 240 00:13:12.080 --> 00:13:15.679 are not changing. Actually, folks, they are. We're writing in 241 00:13:15.759 --> 00:13:18.039 port of this. At the moment, sixty percent of countries 242 00:13:18.240 --> 00:13:21.440 in the Global South have already passed the five percent 243 00:13:21.480 --> 00:13:24.799 tipping point in solar wind as a share of electricity generation. 244 00:13:25.600 --> 00:13:28.840 Thirty three percent have already seen peak fossil fuel demand. That, 245 00:13:28.960 --> 00:13:31.639 as I say, is cross Latin America, in Thailand, in 246 00:13:31.679 --> 00:13:34.879 South Africa, in a series of other countries around the world, 247 00:13:35.039 --> 00:13:37.600 and in fact, twenty percent Girarda doing exactly what you 248 00:13:37.639 --> 00:13:41.120 suggest and have elite frogged. What's going on in the west. 249 00:13:41.440 --> 00:13:43.639 Look, I'm with you on this one one hundred percent. 250 00:13:44.039 --> 00:13:46.159 I don't know if it's putticy. I thinking about this 251 00:13:46.320 --> 00:13:49.639 pain point. I was in South Africa six months ago 252 00:13:49.759 --> 00:13:53.240 and at seven pm you had blackouts everywhere in Cape 253 00:13:53.240 --> 00:13:56.960 Town and there were start to disoginerate ours, every shop. 254 00:13:57.000 --> 00:13:59.440 You know, they gues, oh you know we're putting putting sola. 255 00:13:59.559 --> 00:14:02.600 Next year, were fed up with s com You look 256 00:14:02.639 --> 00:14:06.720 at Nigeria, the moment they stop subsidizing oil, it was 257 00:14:06.759 --> 00:14:10.679 a solar alboom. I can foresee next year it's gonna 258 00:14:10.679 --> 00:14:13.720 be Egypt because EGIP has been relying on this gas 259 00:14:13.720 --> 00:14:16.159 field which is not producing. Now they need to import. 260 00:14:16.440 --> 00:14:20.120 Guess what EGYP is super sunny. Plus the demand is 261 00:14:20.159 --> 00:14:23.080 for cooling during heat waves. So I can foresee Egyp's 262 00:14:23.080 --> 00:14:26.039 going to be a massive, massive, and in a more 263 00:14:26.159 --> 00:14:31.480 sinister but nevertheless interesting negdotal way. The guys who are 264 00:14:31.679 --> 00:14:35.559 the biggest solar installer in Lebanon are the Esbola because 265 00:14:36.480 --> 00:14:39.840 it is what it is energy security, right yeah yeah, 266 00:14:39.960 --> 00:14:42.720 So even for people which you don't want to spend 267 00:14:42.759 --> 00:14:47.320 your vacation with, sola is the solution. These are just examples, 268 00:14:47.360 --> 00:14:48.480 but I'm with you. 269 00:14:49.440 --> 00:14:52.360 A couple of the observations. Globally, we have about one 270 00:14:52.440 --> 00:14:55.840 hundred times as much so little inn potential as fossil 271 00:14:55.879 --> 00:14:59.080 fuel extraction today, but in the global South it's four 272 00:14:59.159 --> 00:15:01.879 hundred times because they lack fossil fuels, they have a 273 00:15:01.919 --> 00:15:05.120 lot of your space. Actually for these countries and for 274 00:15:05.200 --> 00:15:07.799 everyone around the world, we have new options at the moment, 275 00:15:07.840 --> 00:15:09.519 I think this is what we really want to get across. 276 00:15:10.159 --> 00:15:12.559 A lot of them modeling being done by Xon and 277 00:15:12.639 --> 00:15:15.559 other folks in the fossil system. They're modeling the current system. 278 00:15:15.600 --> 00:15:19.399 They're not thinking about the new, They're modelling old. And 279 00:15:19.519 --> 00:15:21.200 what you want to do is you want to model 280 00:15:21.279 --> 00:15:24.679 the suite of possibilities that people across the globalself have 281 00:15:25.000 --> 00:15:27.200 in front of them today. So going to be you 282 00:15:27.279 --> 00:15:31.000 a householder or a small business, or or a large business, 283 00:15:31.080 --> 00:15:34.279 or a utility you can install so lead any level 284 00:15:34.720 --> 00:15:36.759 and that can then get you energy where you had 285 00:15:36.840 --> 00:15:39.279 Number four. If I may come also, folks to at 286 00:15:39.279 --> 00:15:42.399 this point about political economy and resistance to change, which 287 00:15:42.399 --> 00:15:45.960 I guess is ultimately going to become the primary reason 288 00:15:46.039 --> 00:15:49.279 why people don't deploy clean tech because they leaks make 289 00:15:49.360 --> 00:15:52.360 so much money from the current system. So let's think 290 00:15:52.399 --> 00:15:55.600 for a second about how big resistance is. So if 291 00:15:55.639 --> 00:15:57.759 I go back to my framing before, if they're being 292 00:15:57.799 --> 00:16:01.240 four parts to the world, the OECD, the Global SEUTH, 293 00:16:01.320 --> 00:16:04.679 and the petro region petro regions add the whole lot 294 00:16:04.720 --> 00:16:06.639 up to about five percent of global population, about ten 295 00:16:06.679 --> 00:16:09.879 percent of energy demod that's kind of a separate bucket. 296 00:16:10.360 --> 00:16:13.159 They need to change, but the political resistance to change 297 00:16:13.200 --> 00:16:16.559 will be very, very powerful. But within the global South, 298 00:16:16.919 --> 00:16:20.519 only five percent of demand is coming from petro states, 299 00:16:20.559 --> 00:16:24.559 places like Equatorial Guinea or Guiana for example. It's five 300 00:16:24.600 --> 00:16:27.639 percent of demand. And there's a further six percent of 301 00:16:27.639 --> 00:16:31.320 demand which is coming from countries which are major fossil 302 00:16:31.440 --> 00:16:34.960 fuel exporters, such as Nigeria. So that's basically about another 303 00:16:35.039 --> 00:16:38.480 ten or eleven percent. These are simply going to be 304 00:16:38.679 --> 00:16:42.240 the last people to change, but that's not going to 305 00:16:42.240 --> 00:16:44.759 stop changing the system as a whole. And there are 306 00:16:44.759 --> 00:16:47.399 a couple of classic analogies which I would love to 307 00:16:47.399 --> 00:16:50.559 get across because if very often missed that you don't 308 00:16:50.679 --> 00:16:54.200 need to worry too much about endgame problems. Think, for example, 309 00:16:54.320 --> 00:16:58.200 about electricity electricity was invented in nineteenth century and then 310 00:16:58.480 --> 00:17:01.039 started to get deployed and run nineteen hundred and here 311 00:17:01.039 --> 00:17:03.559 we are in twenty twenty four. We still have ten 312 00:17:03.600 --> 00:17:07.039 percent of the global population which doesn't have electricity, But 313 00:17:07.119 --> 00:17:09.400 nobody is saying that the fact that ten percent of 314 00:17:09.400 --> 00:17:13.240 people don't have electricity means that electricity doesn't work or 315 00:17:13.279 --> 00:17:15.240 the electricity is not going to have a major impact 316 00:17:15.319 --> 00:17:18.160 upon the world. And equally, if you look at the Internet, 317 00:17:18.559 --> 00:17:21.400 thirty three percent of people still don't have internet access, 318 00:17:21.559 --> 00:17:24.640 but Internet has nevertheless radically changed the world. And it's 319 00:17:24.680 --> 00:17:28.279 the same thing here solar win. Today's about fifteen percent 320 00:17:28.319 --> 00:17:31.319 of global supply. It's going up towards forty to fifty 321 00:17:31.440 --> 00:17:34.839 sixty leaders are above fifty percent, and as it does that, 322 00:17:34.880 --> 00:17:38.279 it will radically change and disrupt the current system long 323 00:17:38.319 --> 00:17:40.279 before you get to any of these endgames. 324 00:17:40.960 --> 00:17:44.079 Kings, Well, I'm hearing a lot of positive news from you. 325 00:17:44.599 --> 00:17:46.880 There's one thing that we haven't talked about, which I 326 00:17:46.880 --> 00:17:48.759 think is a correlation of all of this, which is 327 00:17:49.079 --> 00:17:53.359 carbon emissions. We must be close to global peak emissions. 328 00:17:53.519 --> 00:17:57.000 If you're right, it looks as if we are at 329 00:17:57.039 --> 00:18:01.559 the peak of global emissions coincident with peak fossil fuel 330 00:18:01.599 --> 00:18:03.839 demand because of the growth, the very rapid growth of 331 00:18:03.880 --> 00:18:07.599 these clean energy technologies. If you look, for example, at 332 00:18:07.640 --> 00:18:11.440 emissions per person, emissions per person have clearly fallen off 333 00:18:11.480 --> 00:18:15.160 the global peak for about five years beyond peak emissions 334 00:18:15.240 --> 00:18:18.759 per person. That's a kind of harbinger of the change 335 00:18:18.880 --> 00:18:21.519 to come. And you combine this peak emission series to 336 00:18:21.559 --> 00:18:24.839 deep peaking emissions in China and then those two being 337 00:18:24.880 --> 00:18:27.960 sufficient to drive decline at a global level. But as 338 00:18:28.000 --> 00:18:31.119 you say, Gerard, it's a start. There's always a distinction 339 00:18:31.240 --> 00:18:34.519 to be made between the argument we make that there's 340 00:18:34.599 --> 00:18:39.200 disruption coming to the fossil fuel system, which is absolutely obvious, 341 00:18:39.680 --> 00:18:43.519 versus will we drive emissions down quickly to get to 342 00:18:43.559 --> 00:18:47.759 a certain temperature target where it's still completely moot. And 343 00:18:48.039 --> 00:18:50.160 I agree with what the scientists are telling us, and 344 00:18:50.559 --> 00:18:53.039 we need to do a lot more to get to 345 00:18:53.240 --> 00:18:55.480 what point five degrees or even two degrees than we're 346 00:18:55.519 --> 00:18:58.880 currently doing. But that's a different debate to the fact 347 00:18:58.960 --> 00:19:01.240 that the current fossil fuel system is going to be 348 00:19:01.279 --> 00:19:03.200 disrupted whatever happens. 349 00:19:03.680 --> 00:19:06.680 I don't know about carbon accounting, but what is sure 350 00:19:06.799 --> 00:19:09.240 is that although we kind of have a decent idea 351 00:19:09.359 --> 00:19:11.839 of what's going out of the tailpipes. There are a 352 00:19:11.839 --> 00:19:16.240 lot of problems upstream with the methane. Here. I want 353 00:19:16.279 --> 00:19:19.000 to do a shout out with a wonderful woman called 354 00:19:19.039 --> 00:19:22.599 Sean Wilson. She's in Texas and she has a special 355 00:19:22.720 --> 00:19:25.599 camera and she checks all the gas wells and you 356 00:19:25.640 --> 00:19:28.599 know they are spewing methane and after they are not 357 00:19:28.720 --> 00:19:31.000 reporting them to to the EPA. So I mean, this 358 00:19:31.119 --> 00:19:34.839 is a real ecoher of ours. And I think there 359 00:19:34.839 --> 00:19:38.119 are much more methane emissions that are reported for at 360 00:19:38.319 --> 00:19:41.799 those big cups and so on. That's number one. Then 361 00:19:41.839 --> 00:19:44.200 this is the all effect about deforestation. I don't know 362 00:19:44.240 --> 00:19:47.279 how well it is master or not. The fight continues, 363 00:19:47.319 --> 00:19:48.079 in my opinion. 364 00:19:48.759 --> 00:19:50.119 I'd also like to give a shout out to my 365 00:19:50.200 --> 00:19:54.079 starn Oscar who is also working to reduce methane emissions 366 00:19:54.119 --> 00:19:57.680 in the UK system, and lots of heroes all across 367 00:19:57.720 --> 00:19:59.799 the world who seeking to do that and reduce the 368 00:20:00.519 --> 00:20:03.079 But Laur, I think you might have gone a little 369 00:20:03.079 --> 00:20:05.440 bit above my pay grade in terms of what I 370 00:20:05.480 --> 00:20:07.759 actually know much about, which is the change in the 371 00:20:07.920 --> 00:20:11.400 energy system that clenty many other pieces and as you say, 372 00:20:11.440 --> 00:20:15.759 it's very important that we curtail deforestation and reduce methane losses. 373 00:20:16.559 --> 00:20:18.160 There is one point I would make where there is 374 00:20:18.200 --> 00:20:22.839 an intersection with energy, which is the use of biomass 375 00:20:22.880 --> 00:20:27.839 to generate electricity is one of the most spectacularly stupid 376 00:20:27.920 --> 00:20:32.799 and wasteful ways to pour resources away, and we shouldn't 377 00:20:32.880 --> 00:20:36.000 do it because it hardly reduces your carbon emotions. It's 378 00:20:36.039 --> 00:20:40.240 incredibly inefficient, and now we have far superior ways of 379 00:20:40.519 --> 00:20:45.799 generating electricity. Getting sunshine or getting electrons via a tree 380 00:20:46.319 --> 00:20:50.599 is absolutely crazy way to get electricity in twenty twenty four, 381 00:20:51.279 --> 00:20:55.880 and actually stopping the use of biomass to produce electricity 382 00:20:56.000 --> 00:20:57.920 would actually free up a lot of space which we 383 00:20:57.960 --> 00:21:01.000 could be using for reforestation also, so pree up pressure 384 00:21:01.039 --> 00:21:03.640 upon land in many different areas is not of course 385 00:21:03.759 --> 00:21:08.559 just pres also biomass for driving, which is another incredibly 386 00:21:08.599 --> 00:21:11.960 wasteful use of resources now that we have far superior resources. 387 00:21:12.000 --> 00:21:14.759 So that's where for me the intersection lies, and that's 388 00:21:14.799 --> 00:21:16.759 where if we can free up, as I say, this 389 00:21:16.960 --> 00:21:19.279 land that needs resources to try and tackle the global 390 00:21:19.279 --> 00:21:19.839 warming problem. 391 00:21:19.839 --> 00:21:23.440 From another angle, kings Mid, we took a lot about 392 00:21:23.559 --> 00:21:26.920 supply and not really about demand. And I know that 393 00:21:27.039 --> 00:21:29.319 RMI is doing a lot of work in energy efficiency, 394 00:21:29.400 --> 00:21:32.000 so maybe in conclusion you want to talk a bit 395 00:21:32.039 --> 00:21:32.440 about that. 396 00:21:33.519 --> 00:21:36.720 Sure, thank you. Efficiency again is a supremely complex topic, 397 00:21:36.839 --> 00:21:40.480 but there is a way pioneered by Nickair at Oxford 398 00:21:40.599 --> 00:21:44.400 to simplify an extremely complex debate in its simplest terms. 399 00:21:44.480 --> 00:21:48.559 We are currently pouring half of our heat sources, that 400 00:21:48.680 --> 00:21:51.799 is to say, col oil, and gas into work uses, 401 00:21:52.000 --> 00:21:55.880