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Episode: Daniel Yergin – Oil Explains the Entire 20th Century

Author: Dwarkesh Patel
Duration: 01:27:37

Episode Shownotes

Unless you understand the history of oil, you cannot understand the rise of America, WW1, WW2, secular stagnation, the Middle East, Ukraine, how Xi and Putin think, and basically anything else that's happened since 1860.It was a great honor to interview Daniel Yergin, the Pulitzer Prize winning author of The

Prize - the best history of oil ever written (which makes it the best history of the 20th century ever written).Watch on YouTube. Listen on Apple Podcasts, Spotify, or any other podcast platform. Read the full transcript here. Follow me on Twitter for updates on future episodes.Sponsors:This episode is brought to you by Stripe, financial infrastructure for the internet. Millions of companies from Anthropic to Amazon use Stripe to accept payments, automate financial processes and grow their revenue.This episode is brought to you by Suno, pioneers in AI-generated music. Suno's technology allows artists to experiment with melodic forms and structures in unprecedented ways. From chart-toppers to avant-garde compositions, Suno is redefining musical creativity. If you're an ML researcher passionate about shaping the future of music, email your resume to [email protected] you’re interested in advertising on the podcast, check out this page.Timestamps(00:00:00) – Beginning of the oil industry(00:13:37) – World War I & II(00:25:06) – The Middle East(00:47:04) – Yergin’s conversations with Putin & Modi(01:04:36) – Writing through stories(01:10:26) – The renewable energy transition Get full access to Dwarkesh Podcast at www.dwarkeshpatel.com/subscribe

Full Transcript

00:00:00 Speaker_02
Today I have the pleasure to chat with Daniel Yergin. He is literally the world's leading authority on energy. His book, The Prize One, the Pulitzer Prize, about the entire history of oil.

00:00:11 Speaker_02
His most recent book is The New Map, Energy, Climate, and the Clash of Nations. Welcome to the podcast, Dr. Yergin. Glad to be with you. My first question is, a book like The Prize, it's literally a history of the entire 20th century, right?

00:00:26 Speaker_02
Because everything in the last 150 years involves oil. That's happened since then. How does one begin to write a book like that?

00:00:34 Speaker_00
I think you begin by not realizing what you're doing. I mean, I agreed to do that book. I said I'd do it in two years. It took me seven. And the stories just became so compelling and it became woven in with the history of the 20th century.

00:00:49 Speaker_00
And the funny thing was that some years before that, a publisher had flown up from New York to see me when I was teaching at Harvard and said she had a very interesting idea for a book. And I said, what? And she said, a history of the 20th century.

00:01:02 Speaker_00
I said, that's an interesting idea. And I thought to myself, rather broad and actually the century wasn't over yet at that point. But I think somehow I think that was kind of in the DNA of the book.

00:01:15 Speaker_00
And so as I told the story, it really was looking, it was not the history of the 20th century, but a history of the 20th century.

00:01:25 Speaker_02
I found that there's a lot of books which are nominally about one subject, but the author just feels the need to, like, if you really want to understand my topic, you have to understand basically everything else in the world.

00:01:35 Speaker_02
And I think a couple of biographies especially, if you read Akira's biography of LBJ or Calkins' It is a history of the entire period in their country's history when this is happening.

00:01:47 Speaker_02
And I wonder if it was for you, you actually did just want to write about oil and you just have to write about what's happening in the Middle East, what's happening in Asia, or is it just like, no, you set out to write about World War II and World War I and everything.

00:01:58 Speaker_00
I think it's also, I mean, because I think geopolitics, narrative, storytelling, those are things that are very much in my interest. And my first book had actually been a narrative history of the origins of the Soviet American Cold War.

00:02:11 Speaker_00
So I brought that perspective to it. And as I was writing the prize, it was just, I didn't intend to do all of that, but the discoveries, just one thing led to another.

00:02:22 Speaker_00
And I would just be amazed and think, this is an incredible story and no one knows it.

00:02:27 Speaker_00
And I did see how somehow in my mind, I did not do a detailed outline, but the pieces kind of came together in this larger narrative that located oil and in this larger context of the 20th century.

00:02:47 Speaker_00
And because it made it clear how central oil was as a way to understand the 20th century.

00:02:54 Speaker_02
Yeah. So we'll get to the new map and the contemporary issues around energy later on, but first I want to just begin with the beginning of the history of oil.

00:03:02 Speaker_02
One of the things you notice, not only in the early stories of oil with people like Drake and Rockefeller, but also even very modern, like the frackers like Mitchell and so forth, is just that you have these incredibly risk-taking and strong personalities who have been the dominant characters in the oil industry.

00:03:18 Speaker_02
And I wonder if there's a specific reason that oil attracts this kind of personality.

00:03:22 Speaker_00
Well, I think maybe it attracts those are the ones who are successful. It takes a lot of, you know, willpower and perseverance.

00:03:28 Speaker_00
I mean, clearly Rockefeller had an idea of what to do and how, but he was also creating a new kind of business organization as he's doing it and a new kind of industry at the same time that he was doing it.

00:03:40 Speaker_00
And then if we jump ahead to this guy, George Mitchell, who's more responsible than anybody else for the shale revolution that has transformed the current position of the United States in the world, he,

00:03:53 Speaker_00
I mean, he kept at it for 18 years when people told him, you're wasting your money, you're wasting your time. He said, well, it's my money and I'll waste it. But one of the things that comes through in the book is the power of willpower.

00:04:05 Speaker_02
One thing that really struck me is how fast things kick off. So 1859, Colonel Drake hits the first oil well in Pennsylvania.

00:04:15 Speaker_02
And in less than a decade, you have many oil boom towns and oil busts and standard oil is formed and millions of barrels of crude are being pumped out every year. I don't know if there's been any deployment like that.

00:04:31 Speaker_00
Well, I think actually, when I think about what we saw with the oil industry, then what we saw with the automobile industry in the 1920s, is kind of what we saw with the internet at the beginning of the 21st century.

00:04:47 Speaker_00
You know, another example of that that always struck me is the movie industry. At one point you have guys who are showing, you know, these sort of silent movies in over vaudeville houses for five cents.

00:04:58 Speaker_00
And 15 years later, they're living in mansions on Long Island and have chauffeurs.

00:05:03 Speaker_00
So it is striking to sort of see these businesses that come from nowhere and then they just take off and gravitate and develop so quickly when people grab hold in 10 or 15 years.

00:05:14 Speaker_00
You know, I was writing something comparing the energy position of the United States in the 80s and today, if you go back, which is, you know, it's a while back, certainly. But there was no tech. Nobody talked about tech. It didn't exist.

00:05:28 Speaker_00
Well, and, you know, now we talk about big tech the way people talk about big oil.

00:05:32 Speaker_02
Yeah, so I thought I think the analogy of the internet is interesting, because what you have with the internet in the 90s, you have this big internet bubble, the dotcom bubble, and a lot of people lose money, but they were fundamentally investing in something that actually was a real technology actually did transform the world.

00:05:48 Speaker_02
And I think in many cases through energy, you have investors who kind of go go broke,

00:05:54 Speaker_02
But they're like, I think fracking is a particularly good example of this, where they've like changed the geopolitical situation in the United States, but they've been like so right that they've eaten away at each other's profits, right?

00:06:05 Speaker_00
And you saw that in the 19th century. I mean, that was one thing when I was writing about like the beginning of the 20th century in the end. I mean, it's far away and yet it felt contemporary because you saw a very similar pattern.

00:06:16 Speaker_00
You saw booms and busts. You saw trees that were going to grow to heaven and then fell apart. And then those people who came in and either had resilience or picked things up and carried them forward.

00:06:29 Speaker_02
In the beginning of the oil industry, when it was just kerosene and used for lighting, why was oil so centralizing?

00:06:38 Speaker_00
Why was it the case that Standard Oil and Rockefeller controlled so much of their- Well, people think of John D. Rockefeller and Standard Oil, they go, you know, gasoline, nothing to do with gasoline.

00:06:50 Speaker_00
John D. Rockefeller was a lighting merchant because what they did is that they rolled back the darkness with kerosene, with lighting.

00:06:57 Speaker_00
Before that, the number one source of lighting, you know, candles and whaling, you know, the whaling industry was delivering light, lighting. And so the first 30 or 40 years of the oil industry was a lighting business.

00:07:15 Speaker_00
And then comes along this other guy, this other guy named Thomas Edison, and suddenly you have electric lights and you say, well, that's going to be the end of the oil business. But by the way, over here is Henry Ford and others.

00:07:26 Speaker_00
And you're creating this whole new market in the 20th century for gasoline. In the 19th century, gasoline was a waste product. It went like for 3 cents a gallon.

00:07:34 Speaker_02
Yeah. One of the things I learned from the prize, which I didn't appreciate before, is that before the car is invented, when Edison was a light bulb, people were saying, you know, standard oil will go bankrupt because the light bulb was invented.

00:07:47 Speaker_00
John D. Rockefeller became the richest man in the United States as a merchant of lighting, not as a merchant of mobility.

00:07:54 Speaker_02
So, I think one of the things you say in some of the earlier chapters is that Rockefeller was especially interested in controlling the refining business and not the landowning and the drilling. And a lot of the producer surplus went in refining.

00:08:08 Speaker_02
Why did the economics of it shape up such that the producer surplus went to refining?

00:08:12 Speaker_00
That was the control of the market. That was the access to the market. And so the producers, they needed John D. Rockefeller. I mean, there were a few other people, but you know, Rockefeller had like 90% of the business.

00:08:25 Speaker_00
And he would either give you a good sweating, drive down prices and force you out of business or force you to sell to him or to amalgamate with him.

00:08:33 Speaker_02
What can we learn about management today from Rockefeller and the way Standard Oil is run?

00:08:36 Speaker_00
Well, I think it was the discipline of the business. He really created a very disciplined business.

00:08:41 Speaker_00
They pay, they went out to, you know, two decimal points and, you know, that was before it was not even no computers or no calculators, but, uh, it was at rigorous attention to detail, but scale.

00:08:52 Speaker_00
But I think it was also boldness and being able to, to see where you needed to go next and then to implement it.

00:08:59 Speaker_02
What did they do with the non-kerosene parts of crude oil in the early history of the business?

00:09:03 Speaker_00
Well, it was really a waste product. You know, there was not much to do with it because it was all about lighting. Today, of course, you know, oil, you know, it's so much in everything. It's, you know, it's in your furniture. It's in your COVID vaccine.

00:09:19 Speaker_00
I mean, it's, you know, it's everywhere.

00:09:21 Speaker_02
Was the antitrust case against Standard Oil unwarranted? Because when I'm reading the prize, I'm like, oh, these guys actually were doing a ton of great stuff.

00:09:29 Speaker_02
As their name implies, they were standardizing oil, the logistics, the transportation, the refining, and also their market share was going down, the price of crude was going down. In retrospect, was the antitrust a mistake?

00:09:41 Speaker_00
Well, a mistake, I don't know. It is the most famous antitrust case in history. and it reflected the times because you had these big trusts.

00:09:51 Speaker_00
And it was a mistake, I don't know, it broke up these companies and created more independent companies, provided more room for innovation, for people to develop, so probably actually led to a stronger industry.

00:10:03 Speaker_00
Of course, the other thing that happened as a result of the breakup of Standard Oil was that these individual parts then got valued in the marketplace.

00:10:12 Speaker_00
And lo and behold, as a result of that, that John D. Rockefeller, as a shareholder, actually became three times as rich.

00:10:19 Speaker_02
And there was also some scientists who came up with a new way of refining gasoline, right?

00:10:24 Speaker_00
Yeah, exactly. Things, because they're not centralized, there was more room for entrepreneurship, for experimentation, for research, for people to solve problems that other people said, oh, you can't solve them.

00:10:37 Speaker_02
Going back to the management thing, one thing that stunned me is that the people who ran Standard Oil were people who were initially competing against him.

00:10:47 Speaker_02
And I'm curious, why did he only recruit the people who were hard-nosed enough to compete against him?

00:10:51 Speaker_00
I think he respected his competitors, particularly the hardy ones. And those were the ones who were players who said, OK, rather than fight you, I'm going to get on board this ship as well. And so he brought them in.

00:11:06 Speaker_00
You know, they all prospered as a result of that. You know, they gave up. They said, we're not going to fight you. We're going to join you.

00:11:14 Speaker_02
Why was Rockefeller so hated in his time?

00:11:18 Speaker_00
He became the very epitome of the monopolist. There's a famous woman journalist, one of the great women journalists named Ida Tarbell, wrote this book about him, about the Standard Oil Trust.

00:11:30 Speaker_00
She said it was a great company, but it always played with loaded dice. So he was a very embodiment. You had this trust busting president, Theodore Roosevelt, and this was the most obvious trust.

00:11:43 Speaker_00
And I think also, because like today with gasoline, it's the one thing everybody buys. You and I don't go out and buy steel, but you go to a gasoline, unless you have an electric car, you go to a gasoline station to fill it up.

00:11:56 Speaker_00
And I think that was the same thing. This was the omnipresent product, but Rockefeller, his idea was to get scale and drive down the price in a sense, expand the market, but it was a monopoly and we have an antitrust law.

00:12:17 Speaker_00
And I think there's also the suspicion that it was not only the economic monopoly, but the political muscle that came with that.

00:12:25 Speaker_02
Right. The thing I'm curious about is, is there some, cause it seems like they really messed up the PR, right?

00:12:31 Speaker_02
Like Theodore Roosevelt ran for the presidency on busting, if you were like, if you messed up the PR so bad, like the guy who becomes president runs on breaking up your company.

00:12:39 Speaker_02
Like probably maybe it would have been intrinsically unpopular, but it feels like you really, like the PR could have been better.

00:12:44 Speaker_00
Why does anybody need to know about our private business was his notion. We're private business. It's nobody's business. Today, you know, you would have a PR advisor tell him that's not really the right stance to take.

00:12:58 Speaker_00
But at that time, you know, it probably also came from the arrogance of having created this huge company with its, you know, running a global company from an office on a 26 Broadway, you know, you did have a sense of power.

00:13:15 Speaker_00
I mean, another thing you see is that he retires early.

00:13:17 Speaker_00
But let me mention, but I do know that, you know, one of his guys who was running the company went to see Theodore Roosevelt and brought him copies of Roosevelt's books, especially bound in leather, thinking he could win over Roosevelt.

00:13:30 Speaker_00
Didn't do any good.

00:13:31 Speaker_02
How come?

00:13:31 Speaker_00
Because Roosevelt, he was the trust buster.

00:13:36 Speaker_02
Yeah. Let's go to World War I and World War II. So I had on the, a couple of months ago, I interviewed the biographer of Churchill, Andrew Roberts.

00:13:50 Speaker_02
And as you discuss in your book, and he discusses, you know, Churchill was this sort of technological visionary, and that's a side of him that isn't talked about often. Maybe talk a little bit about what Churchill did and how he saw the power of oil.

00:14:03 Speaker_00
I think Churchill was the first Lord of the Admiralty. And he saw that if you can convert all the naval ships at that time ran on coal, which means you had to have people on board shoveling coal. And it took a long time to get the coal on board.

00:14:20 Speaker_00
And if you switch to oil, you would have faster, the ships would be faster. They wouldn't need to take the same time. They wouldn't need to carry the same people.

00:14:28 Speaker_00
And so he made the decision, obviously others like Admiral Jackie Fisher were pushing him to convert the Royal Navy to oil. And people saying, this is treacherous, because we'll depend upon oil from far away from Persia, rather than Welsh coal.

00:14:44 Speaker_00
And he said, this is the prize of the venture. That's where I got my title from. Originally it was gonna be called the prize of the venture, because that's what he said. And then I just made it the prize.

00:14:57 Speaker_00
But he saw that during World War I, he promoted another military development. I'm forgetting what it was called initially, but it eventually became known as the tank. I mean, so he really did kind of constantly push technology. Why? I don't know.

00:15:20 Speaker_00
I mean, he was, you know, he was not educated as that. He was educated and, you know, in the sort of in classic, that's why he wrote so well. But he understood technology and that you had a kind of constantly push for advantage.

00:15:36 Speaker_02
Yeah, World War One is, you know, World War Two is just like who can produce the most amount of things.

00:15:43 Speaker_02
But World War One is especially interesting as a technological war because in the span of four or five years you have, you go from battlefields with horses to literally the tank is invented during this time and thousands, you go from hundreds to thousands of trucks and cars and planes and

00:16:01 Speaker_00
Yeah, I mean, it's extraordinary. I think in 1912, the head of the Italian military said, planes are interesting, but of no use in war. And the war did begin with cavalry charges.

00:16:14 Speaker_00
And it began, the German military position was based upon the railroad, inflexible. But I was, you know, as people said, suddenly you had trucks, you had motorcycles, you had tanks, you had airplanes.

00:16:29 Speaker_00
And so a war that began with cavalry ended up with tanks and airplanes and trucks. And it turned out that it was World War I in my reading and the writing of the prize is what really established oil as a strategic commodity.

00:16:45 Speaker_00
And the person who became the Britain's foreign secretary, a foreign minister, said that the allies floated to victory on a sea of oil.

00:16:55 Speaker_02
Yeah. And I think even the Germans said that we would have lost, we would have won the war if it wasn't for the tank or the trucks or something like that, right?

00:17:03 Speaker_00
Exactly. It was, what the allies had is mobility that the Germans didn't have.

00:17:08 Speaker_02
I mean, one thing I sort of worry about, it seems like today, if you had a sort of World War III type conflict,

00:17:17 Speaker_02
It seems like there's an overhang of new technologies, just like, you know, before World War I, there's this sort of overhang of, we could develop planes and war tanks and so forth if we wanted to.

00:17:29 Speaker_02
And with drones and other sorts of robots and other kinds of things today, it feels like if you did have a World War III today, it would be fought with very different weapons by the end than the beginning.

00:17:38 Speaker_00
You know, people say that the Spanish Civil War in the second half of the 1930s was the dress rehearsal for World War II, where a lot of technologies were and techniques of warfare were developed.

00:17:51 Speaker_00
And I think, sadly, if you look at Ukraine today, you see that happening today, because on one hand, it is the advanced technologies that is

00:18:03 Speaker_00
you know, information technologies, cyber warfare, and it's, of course, drones, you know, in a way that hadn't been conceived that hobby drones could become agents of war. Obviously, the automation of the battlefield.

00:18:23 Speaker_00
But it's also, you know, World War II war and that there's been tank battles. And it's a World War I one that is called positional warfare, trench warfare.

00:18:33 Speaker_00
So, you have like a whole century of warfare there, but it is certainly the beta test for new technologies.

00:18:42 Speaker_02
So, let's go forward to World War II. Why wasn't Hitler able to produce more synthetic fuel? Because it seems like he could have won if he had more synthetic fuel.

00:18:51 Speaker_00
Well, I think you would have needed to get to a scale that they could never get to. That was one thing, the synthetic fuel, which meant making oil out of coal using a chemical process. And the other thing is that the allies bombed the plants as well.

00:19:07 Speaker_00
But the way I thought, you know, I intended when I wrote the prize to write one chapter on World War II. I ended up writing five because it was just so amazing. World War II was not an oil war, but there was an oil war within World War II.

00:19:20 Speaker_00
When Hitler invaded Russia, he was not only going for Moscow, he was also going for the oil fields of Baku.

00:19:29 Speaker_00
When the Japanese bombed Pearl Harbor, as Admiral Nimitz, who was the naval commander, said if they'd come back a third time and hit the oil tanks, World War II in the Pacific would have taken another two years.

00:19:41 Speaker_00
General Rommel in North Africa runs out of oil. He says, He writes his wife, shortage of oil is enough to make one weep.

00:19:49 Speaker_00
General Patton's lunge in 1944 for Germany is held back by oil, and the US is going after the oil lines that are supplying the Japanese. attacking them to basically drain the oil out of the Japanese war machine.

00:20:09 Speaker_00
And one of the things that was a real eye-opener for me, you know, people have heard of the kamikaze pilots who would fly their planes into the aircraft carrier. One big reason they were doing that was to save fuel so they wouldn't have to fly back.

00:20:22 Speaker_02
Right. And also the Pacific war was instigated. Yeah. I mean, I don't know if instigate is the right word, but the Japanese needed more oil because of the war in Manchuria, but precisely because of the war, there were embargoes on oil.

00:20:36 Speaker_00
Yeah, the US put an embargo on them. And one of the Japanese admirals said, you know, without the oil, our fleet will become scarecrows.

00:20:46 Speaker_02
World War I is when people realized that oil is a strategic resource, but in World War II, it's really... I'm kind of curious about when different parts of the world realized how crucial oil is as a strategic resource.

00:20:58 Speaker_02
Was it after World War I, after World War II?

00:21:00 Speaker_00
Well, I think after World War I, it clearly was on the agenda in a way that it hadn't been before. And you had governments much more engaged in supporting US companies. There was also this vision that the US, which by the way, the US,

00:21:14 Speaker_00
was so dominant as a producer. Remember that six out of seven barrels of oil that were used by the allies during World War II, six out of seven of them came from the United States. So, but after World War I, you had these fears of running out.

00:21:29 Speaker_00
And so that was one reason the US government supported American companies beginning to go into the Middle East because governments recognized you needed oil.

00:21:41 Speaker_02
So after World War II, big picture, you have the dominant ally powers and they're trying to figure out what to do with the rest of the world and they realize oil is such an important resource.

00:21:55 Speaker_02
It seems to be just like fast forward 30 years after that, you know, you're in a position where you've lost a ton of leverage against the OPEC countries and you're like not in a position to control the supply of oil. How did that happen?

00:22:08 Speaker_00
The U.S. had been this huge supplier, but after World War II, we had economic growth, we had highway systems, we had the suburbs, oil demand is going way up, and we outrun production. So the U.S. becomes in 1946, 47, 48, an importer of oil.

00:22:26 Speaker_00
but modest amounts. But then as we go into the late 60s, you have this global economic boom and Japan is suddenly a vibrant economy.

00:22:35 Speaker_00
Europe has recovered a vibrant economy and oil demand is shooting up really rapidly and the markets that were quite amply supplied become very tight.

00:22:45 Speaker_00
And I think that in the United States, people didn't realize that we were becoming the world's largest importer of oil. They just weren't paying attention to that.

00:22:57 Speaker_00
And it was thought, well, you know, there are only limits to what we can do as a country anyway. And then there were, when we finally get to the crisis, the famous oil crisis of 1973, which probably opened the modern age of energy,

00:23:11 Speaker_00
Well, what's going on at the same time, this political crisis in the United States called Watergate, and the front page of the newspaper is not about, you know, we have tight oil supplies, we're running risk.

00:23:24 Speaker_00
It's all about, you know, what did Richard Nixon do in terms of subverting the election, subverting the political process? So, there was just sort of inattention, and I think that's one of the risks.

00:23:39 Speaker_00
I think a lot about energy security as an issue, and it tends to fall off the table until it hits you in the face.

00:23:50 Speaker_02
When did we realize that there was just a ton of oil in the Middle East?

00:23:59 Speaker_00
Well, I think it was after World War II. I mean, people had begun to know it, but during World War II, a famous geologist named Everett de Gaulle did a trip to the Middle East on behalf of the U.S.

00:24:12 Speaker_00
government and came back and said the center of gravity of world oil is shifting to the Middle East. So that then led to, but no one knew how much or anything, but they knew it was a strategic resource.

00:24:22 Speaker_00
And by the way, they didn't want it to fall into the hands of the Russians. That was a concern.

00:24:26 Speaker_00
Sometimes people, most people don't know the first post-war crisis with the Soviet Union was over actually Iran and the Soviet Union making a grab for a part of Iran.

00:24:38 Speaker_00
So, you know, after World War II, there was this real sense you've got to secure oil supply because it's such a strategic resource. And the Middle East now suddenly becomes much more important as a source than anybody had thought about it.

00:24:52 Speaker_00
Really, the only person, only place producing oil in the Middle East before then was Persia, Iran. Oil was discovered in 1938 in Kuwait and Saudi Arabia, and then got bottled up until after World War II.

00:25:06 Speaker_02
Yeah, so I when I read about in the prize about what happens after World War Two in the Middle East, it's about 200 pages of, you know, initially, the Western companies make these deals with exporting countries.

00:25:21 Speaker_02
And over time, what happens is that first, it's just like an incredibly favorable deal towards the Western companies. But then the exporting countries are like, No, we got to do the 5050 split, and then to do the 5050 split. And

00:25:34 Speaker_02
And then it just over a couple of decades, what happens is that they just keep asking for more and more concessions. Instead of we want 55, we want 60%. This is the exporting countries I'm talking about.

00:25:45 Speaker_02
And they formed the cartel, obviously, OPEC in 1960. But even before that, it just like, what they have, they have leverage over these Western companies, in the sense that they can say, like, if you don't agree, we'll just nationalize you.

00:26:00 Speaker_00
a mentor, an economist named Ray Vernon, who came up with this term, the obsolescing bargain, which is, Dorkesh oil invests in such and such a country, and you put $2 billion in there, and it's great, and everybody's very happy.

00:26:16 Speaker_00
governments change or times change and people forget the risk that you took to do it. And they say, we want a different deal. And that just happens again and again and again. It happens with all natural resources, with oil, with minerals.

00:26:29 Speaker_00
And then it was also, you had, you know, it was the end of colonialism, countries becoming independent. Today, if a company makes a deal with a country to go develop oil, the country will take, gets 80% of the profit.

00:26:43 Speaker_02
Yeah. So if you're one of these Western companies, what should you have, like, let's say it's 1950, and you know that over time you're going to, you know, they have obviously the monopoly of violence, so they can nationalize you if they want.

00:26:58 Speaker_02
What should you have done so that you can basically prevent the outcome that kind of universally happens? if you were in charge of.

00:27:05 Speaker_00
Yeah, probably. I mean, obviously you work really hard on government relations, but the countries are generally poor and they say, well, we just want our, it's our resource, we want our share of it.

00:27:17 Speaker_00
So I think over time, now what you have as a company then, you had the access to the market, you have the refineries, you have the tankers. So it isn't like they can just take it over and they don't necessarily also have,

00:27:30 Speaker_00
It takes time to train your population to develop your indigenous oil people who can run it.

00:27:39 Speaker_00
But, you know, if you look back on it, I think you just say, you know, there was an inevitability to it, which also had to do with the consolidation of nation states.

00:27:52 Speaker_02
Why didn't the US government or the UK government or so on, why didn't they do more to be like, okay, you guys are companies, you guys can't negotiate that hard, but we really care about making sure that America has a lot of oil.

00:28:03 Speaker_00
I think the governments did back up and I think the British, remember the British owned a big share of British petroleum, now BP, until the late 1980s.

00:28:16 Speaker_00
So, you know, the British government was in there, but then you had the nationalization of what was then called Anglo Persian, Anglo Iranian oil, which became BP.

00:28:28 Speaker_00
So I think it was, I think it was inevitable, but I think the governments did try and support, but there were, you know, there were limits that they could do.

00:28:38 Speaker_00
I mean, but, you know, the question of access of maintaining the supplies then and now remains, that question of access remains crucial today.

00:28:53 Speaker_00
I mean, you have the US Navy today trying to push back on the Houthis in Yemen who are attacking oil tankers.

00:29:04 Speaker_02
Thinking purely from the perspective of the companies, if you were in charge of one of the majors, would you have refused to train domestic workers in the exporting country?

00:29:15 Speaker_00
No, I think that was part of your way of trying to embed yourself there, to bring them in so that you were not this isolated island. And, you know, if you do look at, you know, Venezuela and nationalized its company, you know, the oil operations.

00:29:34 Speaker_00
But by that point, they had people who were very well trained at running refineries, at drilling, at finding oil.

00:29:42 Speaker_00
And so, and they still carried some of, for quite a number of years, carried some of that DNA with them in their operations until the complete nationalization and Chavez came to power.

00:29:55 Speaker_02
Was the continuation of antitrust in oil after World War II, was that a mistake?

00:29:59 Speaker_02
Because what happens often when I'm reading your book is like, the oil producing countries can negotiate together, obviously after OPEC, they're literally a cartel, but then these different Western companies- In 1973, finally, the US government did gave an antitrust waiver to the companies to try and have a united front in the negotiations.

00:30:18 Speaker_00
But remember, it got all tied up with geopolitics. It got tied up with Arab-Israeli wars and so forth. So it wasn't just about oil. There were other things going on and the use of what was called the oil weapon.

00:30:31 Speaker_02
Yeah, okay, so let's talk about the oil crisis in 1973. One thing I was surprised to learn is that the supply of oil didn't actually go down that much, like global supply 15% or something declined.

00:30:44 Speaker_00
Why did it have such a huge effect? This was completely unprecedented, unexpected, so it created a panic and it was also right towards, you know, as the final months were coming of the Nixon administration,

00:30:59 Speaker_00
So, it got all tangled up and then we had the system of price controls and allocation controls, which made it much harder for the market to adapt. I mean, one of the lessons to me from the prize is actually

00:31:16 Speaker_00
enabling markets to adjust because when governments try and control them and make decisions and allocate, and governments even in the United States and some states want to do that today, it accentuates shortages and disruptions and price spikes.

00:31:33 Speaker_00
But the tendency is to want to control them. But I think there was far less knowledge about the market, where supplies were. There was no sort of coordination. Now there's much greater knowledge and transparency. I mean, it was just...

00:31:51 Speaker_00
And you had what were called integrated companies, the same company that produced the oil in the Middle East, put it on their tankers and sent it to their refineries in the United States or Europe to their gas stations. And that system is gone.

00:32:05 Speaker_00
When you see the names of the big oil companies on a gas station, if you're not driving an electric car and you pull in, odds are that it's not owned by that company there, it's a franchise.

00:32:18 Speaker_02
I see. OK, so that's another thing I was confused about because I wasn't sure how before a spot and future exchanges for oil, this is this happens after the oil crisis in the late 70s and 80s.

00:32:31 Speaker_02
I didn't really understand how oil is getting priced and also how different countries are able to have such a because, you know, traditionally, the price is set by supply and demand. It's not set by.

00:32:42 Speaker_00
Well, so OPEC was setting prices, but then the market responds, demand goes down. And in fact, that's exactly what OPEC did with its prices. It created incredible incentive to bring on new supplies and to be more efficient.

00:32:58 Speaker_00
And thus it ended up undercutting its own price. I mean, one of the things I really carried away from the prize

00:33:06 Speaker_00
is there, as you know, there are hundreds of really interesting characters in the book, but the two most important characters, one is named Supply and one is named Demand.

00:33:15 Speaker_00
And that's something that I keep, you've got to keep in mind with all the other drama that goes on.

00:33:22 Speaker_02
But the interesting thing from the book is that oil did seem to be, at least until very recently, pretty different in that with other sorts of commodities, you have strong elasticities of supply where if, I don't know, lithium gets more expensive, you'll figure out substitutes for lithium and it's not that big a deal.

00:33:41 Speaker_00
Yeah.

00:33:42 Speaker_02
Whereas at least during the oil crises, it really felt like the entire world economy is just on hold.

00:33:47 Speaker_00
Well, I think that goes back to the centrality of oil as a strategic commodity. Japan had basically just switched its economy from coal to oil. Europe was switching from coal to oil and it was just such a high dependence.

00:34:06 Speaker_00
I mean, markets did eventually respond. I mean, you had a price collapse in 1986, which was the result of that. I mean, in early 1980s, people were saying, oh, the price of oil is gonna go to what in today's dollars would be two or $300 a barrel.

00:34:21 Speaker_00
It collapsed. And so markets do respond. It just took longer for that to happen.

00:34:26 Speaker_02
Daniel Juergen tells the story of oil and power. But how did electricity go from this novelty to something that's powering businesses and households worldwide? It was standardization and infrastructure.

00:34:40 Speaker_02
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00:34:51 Speaker_02
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00:35:02 Speaker_02
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00:35:16 Speaker_02
Learn more at stripe.com. And now back to Daniel Juergen.

00:35:20 Speaker_02
If you were in charge of one of these OPEC countries in 1973, and you realize that you have a tremendous amount of leverage in the short term on the world economy, because everything's a standstill, but over the long run, substitutes will be developed or more oil will come online and so forth.

00:35:38 Speaker_02
But you have this unique moment of leverage where, you know, people really need your oil. What would you have done? Would you have like, give me a seat on the UN Security Council and I'll open up the gushers or in the long run?

00:35:49 Speaker_00
Well, I think these countries did assert their political power. Certainly, again, it was a very different Iran, but the Shah of Iran, you know, until he fell, he got sick and then he fell, asserting, you know, we're players on the world economy.

00:36:07 Speaker_00
Suddenly people, you know, Saudi Arabia had been a country that people didn't think much about in the United States. Suddenly Saudi Arabia became really important.

00:36:15 Speaker_00
And you had this huge flow of money that went into these economies, what were called petrodollars. And that made them, was a whole other source of influence. In the book, I talk about Richard Nixon's vice president, Spiro Agnew, who had to quit.

00:36:35 Speaker_00
you know, he actually resigned because he was corrupt and even had people paying for his groceries. And a couple years later, he shows up in Saudi Arabia trying to do business as a consultant. I mean, people went there, that's where the money is.

00:36:50 Speaker_00
If you go today, if you're, you know, a private equity fund, many of them, you know, their number one place to go to raise money today is not necessarily the pension funds of, you know, various states in the United States.

00:37:05 Speaker_00
These private equity funds or venture capital funds are going to the Gulf countries again because that's where the money is.

00:37:11 Speaker_02
Does this happen with you? You're the world's expert on energy. I'm sure it's like your expertise is worth a lot to them.

00:37:19 Speaker_00
Well, I mean, yeah. So I mean, I certainly speak in that part of the world. I mean, it's pretty much, you know, sometimes I joke. The best thing about the energy business, if you're a curious person, it's global in some ways.

00:37:35 Speaker_00
It's the worst thing, because it involves so much travel and so much jet lag, but I certainly will spend time there.

00:37:41 Speaker_00
And of course, for me, it's a constant process of learning, because you have to sort of show up to get the perspectives and understand what's in people's minds.

00:37:51 Speaker_02
Which of the oil producing countries, they got tremendous gush revenues in the 70s because the price of oil jumped up so high. Which of them used it best?

00:38:01 Speaker_02
Because if you look at a bunch of them, obviously like Soviet Union didn't do enough to make sure it didn't fall when oil prices collapsed. Iran, Iraq use the money to go to war. Saudi Arabia uses it on welfare.

00:38:11 Speaker_00
Well, I think the country that has done the best, it was not a big player then, is the United Arab Emirates, Abu Dhabi. They built a, you know, probably sovereign wealth fund that's worth a trillion dollars, diversified their economy.

00:38:28 Speaker_00
A couple of years I looked at it, more than half their GDP was no longer oil.

00:38:34 Speaker_00
So, and that's what Saudi Arabia is trying to do today to diversify their economies and make them not just dependent upon the price of oil because you don't know where technology is, where the markets are gonna be.

00:38:49 Speaker_00
So, you know, the Shah of Iran used to say, who fell from power in 1979, he used to say that, you know, he wanted to save the oil for his grandchildren.

00:39:00 Speaker_00
Now, the grandchildren are in charge in many of those countries and they want- Not his grandchildren. Yeah, not his. somewhere else, that's right.

00:39:08 Speaker_00
But on the Arab side of the Gulf, and they're focused both on continuing that revenue stream, but needing oil in order to diversify their economies away from oil.

00:39:21 Speaker_00
I mean, that's interesting, like Russia is still, at the end of the day, heavily dependent upon oil and gas, and it distorts their economy.

00:39:32 Speaker_02
The Middle East obviously today has a lot of crazy ideas, a lot of the worst sort of pathologies, political and sort of religious pathologies in the world exist there. Is it just a coincidence that this is where the oil happened to be?

00:39:51 Speaker_02
Or did the oil in some way enable or exasperate this radical tendency?

00:39:59 Speaker_00
That's a very good question. And how people, you know, looked at oil independence. I don't have a good answer to that because it also, I mean, there's oil, but there's also religion. There's also the Arab-Israeli conflict.

00:40:17 Speaker_00
You know, there's Iran, which is really, you know, in some ways, a neo-colonial power in the Middle East.

00:40:24 Speaker_00
I mean, it has probably, if you look at its proxies, 250,000 troops and other countries who belong to various militias and so forth, and Iran that

00:40:39 Speaker_00
You know, it's interesting when sometimes when I'm in the Arab Gulf countries, they don't refer to Iran, they refer to the Persians in the sense that Persia wants to dominate the Middle East as it did in centuries past.

00:40:53 Speaker_02
Right, right. They're imagining Xerxes armies. So we're talking about sovereign wealth funds, and I think this is up.

00:41:01 Speaker_02
Yeah, this is a very interesting aspect of the modern world where some of the sort of biggest investment vehicles in the world are the offshoots of oil proceeds over the last decades of... Yeah, I think, I mean, most, you know, if you look at Norway or if you look at the Middle East, they're offshoots of oil.

00:41:19 Speaker_00
Singapore's, of course, is the offshoot of hard work.

00:41:22 Speaker_02
Right. If you are in charge of an oil-producing country's sovereign wealth fund, and it's, I don't know, a trillion dollars or something, which per capita is actually not that much, right?

00:41:33 Speaker_02
If you're like Saudi Arabia, you've got a trillion dollar sovereign wealth fund. The population is like 30, 40 million people. So per capita, it's like 20, 30,000.

00:41:43 Speaker_02
And so it's not that much per capita, but also you know that majority of your GDP is not going to be sustainable over the long run. And you're in charge of it. What do you do tomorrow? Is it important that you use that money domestically?

00:41:56 Speaker_02
Or would you just like globally just put it in?

00:41:58 Speaker_00
Well, it's very interesting in Saudi Arabia. It's a question whether you use that money as a national development bank. which is one thing, which is quite another thing to use it as a, basically as a global diversification investment vehicle.

00:42:17 Speaker_00
And I think in Saudi Arabia, what's called the PIF, the Public Investment Fund, is doing both. I think in Abu Dhabi, they've differentiated the roles of these different funds. as to what is a global fund.

00:42:31 Speaker_00
But I think, you know, the argument is the same argument that you would get from a financial advisor in the United States, which is diversify.

00:42:39 Speaker_02
Right. But if you're just purely thinking of it as an investment vehicle, then maybe the rates of return aren't that high domestically.

00:42:48 Speaker_00
Well, yeah, but you do want to diversify your economy. You want to bring in investment. And there's also another critical need. You need to create jobs. And the oil industry is a capital intensive business, it's not a labor intensive business.

00:43:06 Speaker_00
So you need to bring in other kinds of industries as well. Because if you look at your population, maybe 60% of your population just roughly is under the age of 30, something like that. So you have a real need, a real job creation need.

00:43:22 Speaker_02
I'm What is it that you tell them to do to avoid getting Dutch disease themselves?

00:43:44 Speaker_00
So we need to explain the Dutch disease, which means that you create an inflationary economy and make businesses uncompetitive, you know, the heart of the Dutch disease.

00:43:54 Speaker_00
And of course, that concept was invented for the Dutch because that happened when they when the Netherlands became a big producer of natural gas. So I think it is a cautionary tale.

00:44:07 Speaker_00
You want to, as I say, sterilize some of the money that comes in, put it into a sovereign wealth fund, invest it overseas.

00:44:14 Speaker_00
And then you want to put money into education and health and those basic human needs create, I mean, you want to turn, I guess, financial capital into human capital.

00:44:24 Speaker_02
Why is it so hard to set up a stable oil rentier state?

00:44:37 Speaker_00
Some have, some have not.

00:44:39 Speaker_02
But I was just about to say, like, if you, uh, there's like, if you look at the examples, it's like so many just go off kilter, right? Um, like Iran, Venezuela, Libya, so forth. Um, and very few of them are like just stable.

00:44:51 Speaker_02
Yeah, we made a ton of money, Saudi Arabia type states.

00:44:54 Speaker_00
Well, I think it is. If you have that huge inflow of money, it really can create a lot of distortions.

00:45:01 Speaker_00
And, you know, I think if you look back at the events that led to the overthrow of the Shah of Iran, I mean, things don't happen for one reason or another. He probably had cancer for two years and was losing it.

00:45:12 Speaker_00
And he also had been so arrogant that he kind of alienated people and he had his secret police and so forth. And then in this pale male rush of overspending created inflation, dislocated the economy.

00:45:25 Speaker_00
So, I mean, it's a good question for study, to look at it on a comparative basis, what worked and didn't work. you know, and it isn't just oil and it isn't just money. There are other things that are involved as well.

00:45:42 Speaker_00
I mean, clearly there was a huge religious, well, a religious reaction led by the Alatoya Khomeini against modernization, against the role of women.

00:45:54 Speaker_00
I mean, the Shah was, you know, saying women should, you know, can get educated, play major roles in their economy. And that was not something that the very conservative clerics could stand.

00:46:07 Speaker_00
So it isn't just about oil and just about money, but it's part of a larger mix.

00:46:14 Speaker_02
Why is Aramco so much better run than other companies tied to, other basically sort of nationalized oil companies?

00:46:22 Speaker_00
Well, I mean, there are others that are well-run, but Aramco is a very well-run company because I think they did, you know, you described it before, they rather smoothly did their transition and retained, and their people are highly trained.

00:46:36 Speaker_00
I mean, you know, if you go to Aramco, you meet people who have PhDs from MIT or Stanford or, you know, University of Texas.

00:46:45 Speaker_00
They have a very well-trained global workforce and a very high standard, but I think they drew upon initially the cultures of the companies that were eventually nationalized out of the business, but the people were trained.

00:47:04 Speaker_02
I'm curious if there's any sort of stories you can tell. I don't know. I imagine since you wrote the prize, you're like, the world leaders are inviting you to come meet them and give advice and so forth.

00:47:13 Speaker_02
I don't know how many stories you can tell from these sorts of conversations. But is there some person who's like really struck you as they've got their head on straight on these kinds of issues?

00:47:22 Speaker_02
Or I don't know, just like you've been all around the world. I'm just curious. You have some sort of crazy stories.

00:47:28 Speaker_00
Well, I think one that is in the new map and that you and I have talked about is the meeting with Prime Minister Modi in India, where India was really at a crucial point, whether to get out of, in a book you probably don't know that I did called the Commanding Heights, in the Permit Raj, where government really tightly controlled the economy.

00:47:51 Speaker_00
And, you know, I describe a scene in the book where he brought his senior advisors together to argue about whether you allow market forces to work or not. And it was a very heated discussion.

00:48:04 Speaker_00
And then I just remember his remarks is we need new thinking.

00:48:09 Speaker_00
And that, you know, just those simple words, I think, have pointed to how India has become so much of a bigger force in the world economy today, as opposed to being a sort of enclosed, closed economy.

00:48:25 Speaker_02
So in 1973, oil crisis. Before that, if you look at the sort of- We're back to 1973.

00:48:32 Speaker_00
I thought we were already in 2024. Okay. We're moving around.

00:48:36 Speaker_02
If you look at the sort of rates of economic growth or rates of total factor productivity growth before that date, it's like pretty high for a long time. It's like 2% total factor productivity growth before 1970s.

00:48:55 Speaker_02
And then afterwards, it's like less than 1% in the United States. How much of that is tied to the energy crisis or was that just a coincidence?

00:49:04 Speaker_00
Well, I don't have expertise on that, but I know people like Ben Bernanke, the former head of the Fed, have actually studied that crisis and why you had that slowdown that occurred. But it was a, you know, the US went from a

00:49:20 Speaker_00
you know, being on a very strong growth trajectory, went into, you know, what at that time was the deepest recession since the Great Depression. Of course, we've had deeper recessions since then.

00:49:30 Speaker_00
And, you know, it took, you know, it took a decade to get out, took a decade to dig out of that hole.

00:49:37 Speaker_02
But then, I mean, the rates of economic growth didn't go back to... Well, also the U.S.

00:49:44 Speaker_00
was, you know, as your economy becomes bigger, you don't grow at the same rate, but you're growing off a much larger base.

00:49:52 Speaker_02
One of the things in Silicon Valley that these techno-optimistic people really talk about is, what if you had just ridiculously cheap energy because of solar, because of other things?

00:50:02 Speaker_02
And the question is, would you just have, would the economy just explode because the economy is bottlenecked by the price of energy? Or would it just, would it not be a big deal because there's other bottlenecks?

00:50:13 Speaker_00
Well, I don't think, it seems to me today, I mean, we'll come to it in terms of AI and electricity. I mean, I need to reflect on that, but it doesn't seem to me that the cost of energy is a general constraint on the economy.

00:50:28 Speaker_00
It is probably somewhat of a constraint in California because it has the most expensive energy in the country, but that's because of state regulation. Yeah. But, you know, all of the big tech companies,

00:50:45 Speaker_00
you know, big tech wasn't born in 1973, it was much more recently that it's happened. I mean, it is, you know, like the oil industry, it's happened pretty quickly actually in this space of time.

00:50:57 Speaker_00
And so I don't think, I mean, I think when you have price spikes, when you have disruptions, then that's when you see the costs and those risks are there.

00:51:07 Speaker_00
But in general, although when you get into a presidential election, the incumbents always worry about the price of gasoline because it's so sensitive, because people pay it. It's the one price you pay all the time and you see it.

00:51:22 Speaker_00
I need to think about it more, but I don't think it's a huge constraint. Now, maybe nuclear energy way back in the 1950s was supposed to be so cheap that you wouldn't meter it. Too cheap to meter was the phrase.

00:51:38 Speaker_00
And now there's the fusion, which seemed to be 50 years away is now maybe 10 years away.

00:51:44 Speaker_00
And I think technology will change things, but I don't think, electricity may be a constraint on the growth of AI near in the medium term, but that's a very specific problem.

00:52:03 Speaker_02
There's been different projections made about how much energy will be required for AI, but you know, the big thing is they need these big training runs and they keep getting bigger and bigger over time.

00:52:12 Speaker_00
I mean, there's one projection is that 10% of U.S. electricity by 2030, which is half a decade away, will be going to data centers. Yeah. And it's about 4% today.

00:52:22 Speaker_00
What a change it's been in the last year and a half in terms of thinking about data centers, AI, and electricity. It wasn't on the agenda a year and a half ago.

00:52:30 Speaker_00
And I remember I was at a CEO conference with electric power utility CEOs about a year ago, and they were talking about growth, being surprised by it. Then we have our conference in Houston in March, and by then people have woken up to, in fact,

00:52:45 Speaker_00
you're talking about going from 4% of U.S. electricity to 10%. And U.S. electricity hasn't grown very much over the last 10 years. It's grown at 0.35%. Now you're looking at maybe it's gonna grow at 2% or more. And that adds up very quickly.

00:53:06 Speaker_00
And I was very struck. I did a discussion with Bill Gates at our Syr-Week conference in March. And he said, we used to talk about data centers as 20,000 CPUs. He said, now we talk about them as 300 megawatt data centers. And the sense is that

00:53:28 Speaker_00
you have electric cars and sort of energy transition demand. Then you bringing back chip manufacturers and smart manufacturing United States, that's electricity demand. Then you have AI and data centers.

00:53:42 Speaker_00
And suddenly this industry that had been very flat is now looking at growth and how are you gonna meet the growth is very much on the agenda right now.

00:53:52 Speaker_00
And data centers are looking where can we position ourselves so that we have access to the electricity that we need reliable 24 hour electricity.

00:54:03 Speaker_00
So now there's energy security in terms of oil and gas, but actually it's also energy security in terms of electricity. So there's your potential constraint on economic activity.

00:54:17 Speaker_00
Now, let me say, some will say the answer to that is innovation, that chips will become less electricity dependent, or data centers will operate differently, that the demand will not grow as much.

00:54:29 Speaker_00
So there is those who say that will happen, but it hasn't happened yet. And those who are saying, how are we gonna meet that demand?

00:54:40 Speaker_00
And, you know, AI is going to demand a lot more electricity than, you know, than we had thought about a year or a year and a half ago.

00:54:49 Speaker_02
And it's potentially even worse than the 10% number implies because it's not just widely distributed like households would be. In many cases, they have to be one gigawatt to one specific campus or location.

00:55:01 Speaker_00
Right. You look at developing data centers where they'll take all of the electricity generated by a nuclear power plant. Well, if they do that, that means you've taken that base load nuclear power off the grid.

00:55:16 Speaker_00
So, there's a kind of scramble to understand this. And then there's the issues that we have in our country, which is you can't get things permitted. It takes so long, you have supply chain problems and you have a workforce that is aged out.

00:55:33 Speaker_00
It's said that to be a fully trained lineman, you need seven years. So, you can see that this area of electricity is, pardon me for saying it, is hot.

00:55:46 Speaker_02
Yeah.

00:55:47 Speaker_02
You know, the thing I find wild when I'm reading the prize is that how much sort of economic development is ultimately contingent on the laws of physics, where suppose that fossilization happened in a different way and then oil didn't form, right?

00:56:02 Speaker_02
And so you have to, let's say coal didn't form either. And then it's hard to imagine how society goes from like water wheels to solar power.

00:56:10 Speaker_00
That's right, what you really realize is that hydrocarbons have been the fuel, the engine really of economic development. I mean, people would still be in sailboats. They would still spend six weeks crossing the Atlantic.

00:56:29 Speaker_00
It would take weeks to go from one place to another. It's hard to, that's a very interesting question to imagine our world without them.

00:56:38 Speaker_02
It's also interesting that we're like, the tech trees play such that like, just when you need more runway, you get like the next energy transition, and then you get a little more runway, and then you get, you know, just like, it's weird that it's, or maybe we would have gotten in anyways.

00:56:49 Speaker_00
Well, you were kind of gonna run out of whales, basically.

00:56:53 Speaker_00
And I loved it, you know, that these kind of consultants, this professor at Yale did this experiment, he needed some extra money, and he did some studies that showed, well, actually this stuff called rock oil, you could turn it into a lighting fuel, a fluid,

00:57:08 Speaker_00
and the risk-taking of it. But yeah, it's hard to, we wouldn't be where we are. We wouldn't have the world today. We wouldn't be a world of 8 billion people were it not for it. Obviously there's gonna be change.

00:57:23 Speaker_00
And I'd say right now, the incentives for innovation are there. That's why we may see a runway of what's gonna come, but it may really come from the side.

00:57:36 Speaker_02
Yeah. And something else that the kerosene, the fact that oil for the first 50 years is used for only lighting. Yeah.

00:57:43 Speaker_02
Another thing that's interesting about that is people are asking now about these AI models where you can literally get a million tokens, like many books length of content out of these models for 15 cents.

00:57:55 Speaker_02
And so one question people are asking is, you know, if you're using, let's say if you did $100 billion worth of tokens, What does that look like? What does an industrial scale use of intelligence look like?

00:58:07 Speaker_02
And the fact is, with crude oil, you're in the beginning, you're like, you're producing a certain amount, but you're out of glut because you're only using it for lighting.

00:58:14 Speaker_02
And then you then you discover this sort of industrial scale use of this technology, which is obviously motorized transportation. And one question you can have for AI is like,

00:58:23 Speaker_02
If currently what we're using these models for like research and chat and whatever is like the kerosene, what would the billions of vehicles equivalent of AI look like?

00:58:33 Speaker_00
Well, I think that's a question that I'd like to ask you. But it is a sense that we are at the beginning of something new.

00:58:47 Speaker_00
I remember when, actually it was interesting, a political leader in Central Asia saying, you know, AI is going to be the true source of power in the future.

00:58:58 Speaker_02
Look, right now, all the top 10 most popular songs have the same structure, the same chords, they're the same three minutes of mass market appeal. Over the last 20 years, music has just become progressively more uniform.

00:59:10 Speaker_02
Sunoo is building the world's best AI-generated music, and they need the help of some amazing researchers. People haven't played with melodic form and structure in decades. With Sunoo, people can finally experiment with how beautiful music can be.

00:59:26 Speaker_02
Like the music you're listening to right now, which was generated by Sunoo.

00:59:30 Speaker_02
So if you're an MR researcher and you want to work on a killer team with lots of GPUs and leverage a ton of interesting data, and you want to study the ultimate frontier of beauty and creativity and humanity's oldest art form,

00:59:45 Speaker_02
Email your resume to dwarkesh at suno.com. All right, back to Juergen. How mad are the frackers that they basically solved America's main geopolitical problem, but they were so successful that they've competed away their profits?

01:00:02 Speaker_00
Well, no, I think that that was a period, and that was a period... up till about 2017 when it was growth for growth's sake. And then basically the financial community said, hey guys, the party's over. I'm not gonna reward you for growth.

01:00:19 Speaker_00
I'm gonna reward you for sending money back on my investment. And so I think, in a sense, shale is almost a mature industry. And I think people don't understand how transformative it's been.

01:00:32 Speaker_00
I mean, the United States was the world's largest importer of oil. We were importing, we were only producing 5 million barrels a day of oil in 2008. Now we're 13.2 million barrels a day. The U.S. is energy independent. People thought it was a big joke.

01:00:47 Speaker_00
It could never be energy independent. It was every president said, we want energy independence. And it was like, you know, it was the late night comedians could make fun of it. Actually it's happened. And it's had huge economic,

01:01:02 Speaker_00
Back in like 2008, the US was spending like $400 billion a year to import oil, basically spend nothing to import oil. And it's been geopolitically very significant.

01:01:13 Speaker_00
And I think that's been a learning experience for the Biden administration because it turns out that if it wasn't for shale gas made into what's called LNG, liquefied natural gas shipped to Europe,

01:01:29 Speaker_00
Putin could well have shattered the coalition supporting Ukraine when he used the energy weapon, not oil, but gas. Suddenly you had European politicians coming to the United States to try and secure supplies of LNG because so worried about it.

01:01:49 Speaker_00
It's something that is... You know, it really is a revolution that is playing out today. China imports 75% of its oil. It wishes it was in our position.

01:02:01 Speaker_02
So, we're energy independent, but how far are we from a scenario where our allies, most notably Japan, are also energy independent? Very, very, very far. But including our exports.

01:02:16 Speaker_00
Well, that's why when the Japanese prime minister was here for a state visit a few months ago, they were expressing great alarm about future LNG exports.

01:02:28 Speaker_00
They, for them, being able to import energy from the United States is very critical to their energy security. Otherwise, they're pushed back where they're going to get their LNG.

01:02:38 Speaker_00
They'll get some from the Middle East, some from Australia, but they'll be pushed back to getting it from Vladimir Putin. So for them, their energy security, this has become U.S. energy exports, U.S. shale has become part of their energy security.

01:02:54 Speaker_00
I never thought of it quite that way, but I think, you know, if you think about what the Japanese are saying, that's really what their message is.

01:03:01 Speaker_00
You know, I did an event with the Japanese prime minister and, you know, now I think about it in the springtime, that was very much, that came through very clearly that for them, U.S. exports to them are part of the security relationship.

01:03:18 Speaker_00
US LNG is now part of the arsenal of NATO. You know, we're talking about the geopolitical significance of US shale. No one would be happier to see a ban on US shale production than Vladimir Putin.

01:03:32 Speaker_00
And, you know, I have firsthand sense of that because in 2013, before he annexed Crimea, I was at this conference, which is his version of a global economic conference. And they said, you could ask the first question.

01:03:47 Speaker_00
And so I said, you know, and it was gonna be about something we were talking about before there, over dependence on oil and gas revenues. I mentioned the word shale and he erupted and kind of said, it's barbaric, it's terrible. And he got really angry.

01:04:01 Speaker_00
And this is in front of 3000 people. So it's rather uncomfortable in that position. But I realized there were two reasons. One, he was worried about shale gas competing with Russian gas.

01:04:13 Speaker_00
And two, he saw that shale revolution would augment the position and influence of the United States because the US would no longer be energy independent. And he was very prescient. He was right about both of them.

01:04:24 Speaker_00
I think when he invaded Crimea, I don't think he ever imagined that if he cut off the gas to Europe, that Europe could survive. Europe survived.

01:04:35 Speaker_02
Yeah, one thing I'm actually very curious about is the prize, especially when all your books have a narrative, are, you know, narratively driven, and you have detailed understanding of like, people and events and so forth.

01:04:51 Speaker_02
As compared to somebody who's just like, here's how many barrels are produced in year X, here's how many barrels are produced in year Y.

01:04:58 Speaker_02
Do you feel like when you're in these conversations or you're trying to think about the future of energy, you really need to know how Drake was thinking about the drill well and how... Yeah, I mean, I think in one way, I see myself as a storyteller and I like narrative.

01:05:18 Speaker_00
I think that's the best way to communicate. I like writing about people and not just about abstractions.

01:05:24 Speaker_00
You know, it's funny when I was like writing the prize or writing these books, I almost, it's strange to say, I almost see it like a movie when I'm writing. You know, I see what's happening and that makes it more vivid for me. And I also think that,

01:05:42 Speaker_00
there are more and more things you're competing with. If you're a writer, you're competing with TikTok, you're competing with YouTube and everything.

01:05:52 Speaker_02
Podcasts.

01:05:53 Speaker_00
Podcasts. So, you've got to draw people in and people love stories. I mean, I mean, I started writing when I was like a child. My father had an old typewriter, he'd been a newspaper reporter and I would hunt and peck and just write stories.

01:06:14 Speaker_00
So in high school, I was student body president, but I was also editor of the literary magazine. And when I was an undergraduate at Yale, I started a magazine called The New Journal, which was narrative journalism.

01:06:29 Speaker_00
And, you know, so I learned a lot of my writing doing that. I learned a lot of my writing, writing magazine articles, how to tell a story. And so I really, I love shaping a story. I love finding a character.

01:06:43 Speaker_00
I love finding the great quote that just kind of illuminates everything you're trying to do. And I love not boring people.

01:06:53 Speaker_02
When you were writing the prize, it's a seven year process where there's the endurance, but there's also like the sense of, you gotta have like faith that at the end of this- Yeah, you're making a deal with yourself.

01:07:06 Speaker_00
You're making a deal that what you write in year four, you're not gonna totally rewrite in year seven, because otherwise you'll never get it done. And see the odd thing, the strange thing is I started a business the same year I started the prize. So,

01:07:19 Speaker_00
I felt that I learned, so I was living entrepreneurship. And I think that sometimes people, when they go back and write history, they know the outcome.

01:07:28 Speaker_00
So I think everybody knows what was, they had all the information, they had all the time and they knew the outcome. Of course, you never have all the information. You certainly don't have all the time and you surely don't know the outcome.

01:07:43 Speaker_00
And I think that sense of contingency which is such a part of human history. I think, I feel I tried to capture, I think that is one of the things that made the prize distinctive, that makes the new map, that makes the quest distinctive.

01:07:57 Speaker_00
I mean, in the quest, the middle book, you know, it was a question, where the hell did the modern solar and wind industry come from anyway? And, you know, sort of entrepreneurs.

01:08:06 Speaker_00
And so I, you know, because I have been an entrepreneur, you know, I have a, a feeling for it. I mean, you're an entrepreneur in terms of what you're doing with podcasts. You sort of invent it as you go along. And I tried to capture that.

01:08:23 Speaker_00
At the same time, I love writing narrative.

01:08:29 Speaker_02
The thing I'm curious about is if, let's say you meet another analyst who doesn't have a vivid sense of narrative history. But just like knows the facts and figures, what is it that they're missing?

01:08:41 Speaker_02
What kinds of understanding do they often lack when you talk to them and so forth?

01:08:45 Speaker_00
Well, sometimes, I mean, I will have great respect for them and I have great respect. I mean, I also love reading the monthly energy review from the Department of Energy, which is only statistics or the statistical energy review. So I love it.

01:09:02 Speaker_00
But I think what you may miss is, the contingency, the human agency, the decisions that went onto things, the right decisions that were made, the mistakes and the things that you missed, that you were wrong about or that would have been wrong.

01:09:22 Speaker_00
So I think, so it's, you know, it's the texture. I mean, there is a tendency to think that things are inevitable, but you know that the world can change from one day to the next. That's what happened on, you know, December 7th, 1941, September 1, 1939.

01:09:43 Speaker_00
It could happen any day in the Middle East right now that you could go from one day to the next and it's a different world.

01:09:53 Speaker_02
Yeah, and I mean, just reading it, you can tell like, it's hard to understand many of the things if you don't have an understanding of like Arab nationalism forced the Saudis to support the embargo.

01:10:04 Speaker_02
And then why did Egypt like launch a tackle because they wanted the ceasefire to be in a different place, but they actually wanted to end the war.

01:10:10 Speaker_00
That's right.

01:10:11 Speaker_02
Like there's so many different things like that.

01:10:12 Speaker_00
Yeah, you don't understand why these things happened and you just look at the numbers, but why did it happen? And so, you know, part of it is, you know, through narrative explaining why it happened.

01:10:25 Speaker_02
Yeah. Let's talk about solar and renewables. With oil, you have a commodity which is a flow and you can cut it off and you can turn it back on again. So it gives the person who's producing it a lot of leverage.

01:10:39 Speaker_02
Whereas with wind and solar, if you're the people producing it, it's just a capital stock, right? So you just, it has, how does that change the geopolitical situation and the kind of leverage that the producer might have?

01:10:50 Speaker_00
You know, it's a question of scale and how long. I mean, I think what I carried away, basic premise of energy security goes back to Churchill. He said, safety lie in variety and variety alone, diversification.

01:11:05 Speaker_00
So wind and solar give you diversification. Electric vehicles diversify your fleet. So I think those are all there. I think,

01:11:22 Speaker_00
You know, so for China, I think wind and solar electric cars is very much a strategic issue because they see the vulnerability of importing 75% of their oil, much of it coming through the South China Sea.

01:11:38 Speaker_00
They know the story of what happened with World War II with Japan. And so for them, it is, you know, the shift to electric cars is less about air pollution, much more about energy security.

01:11:52 Speaker_00
And it's also about knowing that they couldn't compete in the global market with gasoline powered cars, but they can with electric cars. So those are the strategic things. But wind and solar give you a more diversified system.

01:12:07 Speaker_00
until you have batteries that can really deliver the storage, you have the intermittency problem. So you take California today, people think wind and solar is advanced.

01:12:15 Speaker_00
It's true, they're 25% of your electric generation in California, but 43% of electric generation comes from natural gas.

01:12:23 Speaker_00
So, you know, natural gas and that gets back to the data centers, you know, you're gonna need to bolster your electricity power system. How much can you do with batteries and how much can you do with and using natural gas?

01:12:37 Speaker_00
So, but, you know, wind and solar are also stories about entrepreneurship and in the quest I have, you know, I asked myself, where did the wind and solar industries come from?

01:12:49 Speaker_00
And the wind and solar industries came from two, the solar industry from two émigrés who had left Europe, one of whom had driven his car out of Hungary in the 1956 revolution. 1969, he's a chemist working for the U.S. government.

01:13:06 Speaker_00
He and his partner decided to go in the solar business, and that became the first solar company. They started in 1973.

01:13:14 Speaker_00
And the wind business, I like to say the modern wind business is a result of the marriage between California tax credits and the sturdy Danish agricultural industry, because it was driven by tax credits, but they needed to find wind machines that could stand up when the wind blew in the Hatchipee Pass.

01:13:34 Speaker_00
And so, but it took, you know, it's interesting. It took about 30 years, both those industries to become competitive. And it only happened around 2010 that they actually became competitive. Now, of course, they're very competitive, but then guess what?

01:13:51 Speaker_00
Now they're all tied up, renewables are also now tied up in geopolitics. And, you know, in what I call the new map, the movement to, you know, the great power competition.

01:14:03 Speaker_00
There's a, US just put 100% tariffs on Chinese electric cars, 25% tariffs on Chinese storage batteries.

01:14:11 Speaker_00
So, you know, if you, we just had this bill, the Inflation Reduction Act, not just, it's very recent, huge, you know, trillion dollars people, the treasury estimates when it's done. but it's about climate and renewables.

01:14:24 Speaker_00
Oh, but it's also about competing with China.

01:14:27 Speaker_02
Speaking of solar deployment, I think solar deployment is on an annualized $500 billion. That's the yearly amount that we're investing in deploying it.

01:14:40 Speaker_02
Is there anything when you look through the history of the prize or the history of energy, is there anything comparable to this scale of deployment? Maybe initially electrification or is this just unprecedented scale?

01:14:55 Speaker_00
I'd have to think about it. I mean, it's happening fast, but as I say, these guys started the solar business in 1973. It's now taken off.

01:15:06 Speaker_00
It's also interesting that what really gave the boost to the solar industry is German feed-in tariffs, which provided the incentive for the Chinese to dominate, to develop, because they dominate the business. And

01:15:25 Speaker_00
But solar, I mean, right now, wind is about 10% of US electricity, solar is about three and a half percent, but solar is gonna grow, it certainly will grow very fast. You do see,

01:15:40 Speaker_00
And I just heard this when I was at this utility commissioners conference, real tension between states and localities where the states wanna push it, but localities don't want solar or don't want wind.

01:15:51 Speaker_02
I think we're in Nantucket and I saw a couple of signs around of no more wind.

01:15:55 Speaker_00
Well, they just had a thing where one of the blades off one of the big wind turbines ended up, fell off and washed up on the beach and has now created, it's really huge and consternation and suddenly reopened the discussion.

01:16:09 Speaker_00
But you need supply chains and wind and solar are different, of course.

01:16:13 Speaker_00
I mean, if you want to start a new offshore wind project in the United States, you can order your cables, but you won't get them until 2029 or 2030 because they're the supply chain issues.

01:16:28 Speaker_00
Solar is different, but of course, solar is so dominated by China.

01:16:34 Speaker_02
So oil companies are investing a lot in renewables. Is there a bunch of skill transfer here that actually means that these oil companies will actually be really good at deploying solar or something? Or is that a mistake?

01:16:44 Speaker_00
Well, it's very interesting. There's a difference among some companies. Some companies say yes, and they look at offshore wind and say, well, we're in the offshore oil business. We could do offshore wind.

01:16:53 Speaker_00
And you see that in Europe, where Equinor, which is the Norwegian company, or BP, or Shell, or Total, are big in offshore wind. And they say we have skills in that. Solar is a little different.

01:17:08 Speaker_00
Exxon is now going into mining lithium, thinking that they can use skills that they use for that. But the U.S. major companies say, well, we do... Basically, we do molecules. We don't do electrons. And that's where the difference is.

01:17:26 Speaker_00
The European companies say we can do all of it. The Europeans say we can do all of it. The American companies say, well, you know, we have no comparative advantage in electrons, but there's a lot of interest in hydrogen because that's another molecule.

01:17:41 Speaker_00
and the degree of hydrogen can substitute for natural gas, for instance. And that's where a lot of investment, but it's very early. And again, sometimes people forget about the energy business. It's scale, it's so big as what the requirements are.

01:17:59 Speaker_02
Yeah, but also it's surprisingly small as a fraction of GDP, like oil is like two to three percent of GDP. And obviously the entire world depends on it, but you wouldn't see that in the GDP numbers.

01:18:09 Speaker_00
Yeah, I mean, it used to be a much bigger share of the stock market. You know, Dow Jones, it's also a smaller share. That's right. It's still the strategic commodity, but there are a lot of other things that go into it.

01:18:24 Speaker_00
Now, if you look at what the Department of Commerce uses, there are different categories of jobs. Altogether, they'll say that there are about 12 million people in the United States whose jobs are connected to the oil and gas industry.

01:18:42 Speaker_02
I'm curious about how you imagine the demand elasticity for oil changing in the future. And so this will be a sort of run on question.

01:18:53 Speaker_02
But so you can imagine in the past, it's like, you know, you're not going to stop going to work because oil is 10% more expensive, right? So with the Arab oil embargo, prices went up like 300%, even though supply only went down 15%.

01:19:07 Speaker_02
But now, you know, if oil goes up in price, you can like zoom, zoom, you can video conference or something. And fracking also, you can increase supply if you want to.

01:19:19 Speaker_02
And so yeah, I'm curious how you, because of these new sort of flexibilities we have, is there going to be a lot more elasticity in demand? And also, actually, maybe the main thing is that

01:19:33 Speaker_02
with, with AI and with compute, you have this sort of thing where you can just like dump arbitrary amounts of energy into this, and it gets better. And currently, there's nothing where you just like keep dumping more energy into it.

01:19:44 Speaker_02
There's a huge elasticity of demand.

01:19:45 Speaker_00
Yes. I mean, I think you would know, and you know, the podcast you've done. how AI is really gonna change everything, which is kind of the expectation now that it's gonna change everything, including energy.

01:20:05 Speaker_00
And then you have $6 billion of venture capital money has gone into fusion. So, there's a lot there that can change. My own view is that,

01:20:20 Speaker_00
the energy transition, it's not going to happen because of price, it's going to happen because of policy and technology, I think is what's driving it. I have the view that people have

01:20:34 Speaker_00
you know, have had kind of simple notions of how the energy transition will work. That's one of the things in the new map.

01:20:40 Speaker_00
If people read one part of it, it's read the section on energy transition, because it tells you what we're talking about today is not anything like any other energy transition. Every other energy transition we've had has been energy addition.

01:20:54 Speaker_00
Oil discovered in 1859, overtakes coal as the world's number one energy source in the 1960s. Last year the world used more coal than it's ever used, three times as much as the 1960s. Now the idea is can you change everything literally in 25 years?

01:21:11 Speaker_00
And I think some of that thinking was developed during COVID when demand went down and price went down, collapsed. Part of it is, you know, people worry about energy security.

01:21:22 Speaker_00
I was just reading last week the budget message from the finance minister in India. And she talked about energy security and we have to maintain economic growth.

01:21:32 Speaker_00
And we, you know, it's very important to do that and energy security as well as energy transition. So it's a different balance. You know, there's a difference between the North and South.

01:21:42 Speaker_00
And then there's the constraints on minerals because, you know, as you make an energy transition, what people talk about, it's more mineral intensive. An electric car uses two and a half times more copper than a conventional car.

01:21:54 Speaker_00
Well, we did the study and said, okay, let's take the 2050 goals. And if you want to achieve them, copper supply has to double by about 2035. What's the chance of doing that? It takes 20 years to open a new mine.

01:22:08 Speaker_00
In the United States, we just did a study, it takes 29 years to open a new mine. you know, changing $109 trillion world economy, it's going to change.

01:22:19 Speaker_00
And you said that development of solar is going to be really important, but things are not going to move in a straight line. I mean, we are in an energy transition, but it's going to be, you know, a longer one.

01:22:36 Speaker_00
Here we are, as you mentioned in Nantucket, which was a key part of the energy transition because it was a source of lighting in the 19th century from whaling.

01:22:45 Speaker_02
It was like in the first chapter of Moby Dick.

01:22:46 Speaker_00
Yeah, exactly. And then it came to an end. It came to an end because of the electric light. And so, I mean, things are not gonna stand still. So I think the most important thing is the technologies either that you can see coming

01:23:02 Speaker_00
or they come from left field like fracking or grasping what AI is gonna mean for how our economies work. But I think you made a very important point and that was the discovery in COVID. You don't have to travel, you can do it by electrons.

01:23:19 Speaker_02
Well, one of the final questions I wanted to ask you was,

01:23:23 Speaker_02
If somebody was to write a kind of definitive history about a subject for another subject that's not energy, and you don't have to personally write it, you can just like delegate to somebody else to do it and they'll do a good job.

01:23:36 Speaker_02
Is there a topic which you feel could make for another sort of thousand page fascinating history of the world?

01:23:43 Speaker_00
Well, I was always actually interested.

01:23:46 Speaker_00
you know, my father had worked at Warner Brothers for a time and I was always interested in, you know, the movie and entertainment business, you know, and how that developed and, you know, a big epic story of that.

01:24:03 Speaker_00
I mean, that's, I just think that's so interesting where you can, I mean, one of the things that is fun when you're writing this, when you have these oversized personalities,

01:24:11 Speaker_00
There may be kind of obnoxious people who you would hate to meet in person, but are very interesting to write about. And so you look for an industry. Here's something nobody's ever thought about, history of the internet. No, I'm just joking.

01:24:24 Speaker_02
But I don't know if somebody has written a sort of modern definitive history of the internet.

01:24:28 Speaker_00
Yeah. I mean, the thing is that, You know, the one thing I've learned from doing these books is it's the three X rule is however hard you think it's gonna be, it's gonna be at least three times as hard to do.

01:24:42 Speaker_00
So, I mean, I started off with really unrealistic expectations on the prize, but I think the thing that kept me going was just how great the stories are and how important the stories were.

01:24:53 Speaker_02
Yeah, I've heard this from multiple sorts of historians who have written similar definitive books about their subject. I think Kiro said like, I'm going to write this over the summer and then we'll use the book deal to go on vacation afterwards.

01:25:06 Speaker_02
And I interviewed Richard Rose, the author of The Making of the Manhattan Project and similar story there, but obviously took longer.

01:25:14 Speaker_00
Well, I mean, I used the advance for the prize to actually, that's how I capitalized the company we started with, which created an incentive to finish the prize.

01:25:26 Speaker_02
And you were doing the business in the day and then writing at night?

01:25:29 Speaker_00
Yeah, writing at night, writing at weekends, vacations, filling up our car with books and just immersing it. And the way I would do it is, did not have a master plan. I really should have. It would have saved a lot of time probably.

01:25:42 Speaker_00
I would just immerse my something and get it all in my head. And then my mother was a painter and I would watch her sketch. And that's the image I have is that I sketch it out. And then I, fill it out and work on it.

01:26:00 Speaker_00
And another thing, I mean, unlike a lot of people, I love to edit and polish. I mean, I love going over it and just making a sentence better and then saying how to make it better.

01:26:11 Speaker_00
And then like with the prize, one of the things, I read the whole book aloud to myself to test every sentence. Does every sentence have resilience? Does it, you know, does it sing?

01:26:21 Speaker_00
And so, you know, for me, that's, you know, a source of pleasure to do that.

01:26:28 Speaker_02
Did you know while you were writing it that it would become this sort of definitive history?

01:26:32 Speaker_00
No, I, you know, sometimes we lived, had an apartment overlooking the Charles River in Cambridge. I'd look out there at 2am in the morning and think, you know, what's going to happen?

01:26:43 Speaker_00
You know, and I think those around me kind of a little bit despaired, you know, this could be, this could end up in a, a veil of tears, you know, but it turned out, you know, and then the book was basically five years late, brilliantly timed.

01:27:00 Speaker_00
People said they have a great sense of time. And I said, I was five years late. So, but I did have a sense that I needed to get it done. That's something that some crisis was gonna come. I had a sense of that and that drove me.

01:27:14 Speaker_00
And, but, you know, otherwise there's this danger that you just keep working on it.

01:27:21 Speaker_02
Yeah. Okay. I think that's an excellent place to close.

01:27:24 Speaker_00
Thank you so much for coming on the podcast.

01:27:25 Speaker_02
This was wonderful.

01:27:26 Speaker_00
It was great to have this conversation. Gave me a lot to think about too. So thank you.