Today I have the pleasure to chat with  Daniel Yergin. He is literally the world's  

leading authority on energy. His book, The  Prize, won the Pulitzer Prize. It's about  

the entire history of oil. 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. Here’s my first book question. A book like The  

Prize is literally a history of the entire 20th  century, right? Because everything that’s happened  

in the last 150 years involves oil. How  does one begin to write a book like that? 

You begin by not realizing what you're doing.  I agreed to do that book and I said I'd do it  

in two years. It took me seven. The story  just became so compelling and it became  

woven in with the history of the 20th century. 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. She said she had a  

very interesting idea for a book. I said, "What?"  She said, "a history of the 20th century." I said,  

"That's an interesting idea." I thought to  myself that it's rather broad and that actually  

the century wasn't over yet at that point. But  somehow that was in the DNA of the book. As I told  

the story, it really was not the history of the  20th century, but a history of the 20th century. 

I've found that there are a lot of books which  are nominally about one subject, but the author  

just feels a need to say, "If you really want  to understand my topic, you have to understand  

basically everything else in the world." I  think of a couple of biographies especially.  

If you read Caro's biography of LBJ or Kotkin’s  of Stalin, it is a history of the entire period in  

their country's history when this is happening. I wonder if this was the case for you. Did you  

actually just want to write about oil and  you just had to write about what's happening  

in the Middle East, what's happening in  Asia? Or no, you set out to write about  

World War II and World War I and everything? Geopolitics, narrative, storytelling, those  

are things that are very much in my interest.  My first book had actually been a narrative  

history of the origins of the Soviet-American  Cold War. So I brought that perspective to it. 

As I was writing The Prize, I didn't intend to  do all of that. But with the discoveries, one  

thing led to another. I would be amazed and think,  “This is an incredible story and no one knows it.”  

In my mind, I did not do a detailed outline,  but the pieces came together in this larger  

narrative that located oil in this larger context  of the 20th century. It made clear how central oil  

was as a way to understand the 20th century. We'll get to The New Map and the contemporary  

issues around energy later on. First I want to  just begin with the beginning of the history  

of oil. There’s one thing you notice not only  in the early stories of oil with people like  

Drake and Rockefeller, but also even with very  modern ones like the frackers like Mitchell and  

so forth. You have these incredibly  risk-taking and strong personalities  

who have been the dominant characters in the  oil industry. I wonder if there's a specific  

reason that oil attracts this kind of personality. Those are the ones who are successful. It takes  

a lot of willpower and perseverance. 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. 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  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. 

One thing that really struck me is how fast  things kick off. In 1859, Colonel Drake hits  

the first oil well in Pennsylvania. In less than  a decade, you have many oil boom towns and oil  

busts and Standard Oil is formed. Millions  of barrels of crude are being pumped out  

every year. I don't know if there's been any  deployment like that since. What was it like? 

When I think about what we saw with the oil  industry, then what we saw with the automobile  

industry in the 1920s, it’s kind of like what  we saw with the internet at the beginning of  

the 21st century. Another example that always  struck me is the movie industry. At one point,  

you have guys who are showing these  silent movies in vaudeville houses for  

five cents. 15 years later, they're living in  mansions on Long Island and have chauffeurs. 

It is striking to 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 to 15 years. I was writing something  

comparing the energy position of the United States  in the eighties and today. It's a while back  

certainly, but there was no tech. Nobody talked  about tech. It didn't exist. Now we talk about  

Big Tech, the way people talked about Big Oil. The analogy of the internet is interesting.  

With the internet in the 90s, you have this big  Internet bubble, the dot-com bubble, and a lot  

of people lose money. But they were fundamentally  investing in something that actually was a real  

technology and actually did transform the world. In many cases through energy you have investors  

who go broke, but… Fracking is a particularly  good example of this. They've changed the  

geopolitical situation in the United  States, but they've been so right that  

they've eaten away at each other's profits. You saw that in the 19th century. That was one  

thing when I was writing about the beginning of  the 20th century and the end of the 19th century.  

It's far away and yet it felt contemporary  because you saw a very similar pattern. 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 either had resilience  or picked things up and carried them forward. 

In the beginning of the oil industry—when it  was just kerosene and used for lighting—why  

was oil so centralizing? Why was it the case that  Standard Oil and Rockefeller controlled so much? 

People think of John D. Rockefeller and Standard  Oil and they go: gasoline. It had nothing to do  

with gasoline. John D. Rockefeller was a lighting  merchant. What they did is that they rolled back  

the darkness with kerosene, with lighting.  Before that, the number one source of lighting  

was candles and whaling. The whaling industry  was delivering lighting. For the first 30 or  

40 years of the oil industry it was a lighting  business. Then came along this other guy named  

Thomas Edison. Suddenly you have electric lights  and you say, “That's going to be the end of the  

oil business.” But by the way, over here is Henry  Ford and others. You're creating this whole new  

market in the 20th century for gasoline.  In the 19th century gasoline was a waste  

product. It went for like three cents a gallon. One of the things I learned from The Prize,  

I didn't appreciate before. Before the car was  invented, when Edison invented the light bulb,  

people were saying Standard Oil would go  bankrupt because the light bulb was invented. 

John D. Rockefeller became the richest  man in the United States as a merchant  

of lighting, not as a merchant of mobility. In some of the earlier chapters, you mention  

that Rockefeller was especially interested in  controlling the refining business, not the land  

owning and drilling. A lot of the producer surplus  went into refining. Why did the economics shape up  

such that the producer surplus went to refining? Because that was the control of the market. That  

was the access to the market. The producers  needed John D. Rockefeller. There were a few  

other people but Rockefeller controlled about  90% of the business. 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 amalgamate with him. What can we learn about management today from  

Rockefeller and the way Standard Oil was run? It was the discipline of the business. He  

created a very disciplined business.  They went out to two decimal points.  

That was before computers or calculators. It was  rigorous attention to detail but at scale. It  

was also boldness and being able to see where  you needed to go next and then implement it. 

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

It was really a waste product. There wasn't  much to do with it because it was all about  

lighting. Today of course, oil is in  everything. It's in your furniture,  

your COVID vaccine. It's everywhere. Was the antitrust case against Standard  

Oil unwarranted? Reading The Prize, I'm  thinking these guys were doing a ton of  

great stuff. As their name implies, they were  standardizing oil, logistics, transportation,  

refining. And their market share was going  down. The price of crude was going down. In  

retrospect, was the antitrust a mistake? A mistake, I don’t know. It is the most  

famous antitrust case in history and reflected  the times because you had these big trusts.  

Was it a mistake? I don’t know. It broke up  these companies and created more independent  

companies. It provided more room for innovation  and for people to develop. It probably led to a  

stronger industry. Of course the other thing  that happened as a result of the breakup of  

Standard Oil was that these individual parts  got valued in the marketplace. Lo and behold,  

as a result of that John D. Rockefeller as a  shareholder actually became three times as rich. 

There were also scientists who came up  with a new way of refining gas, right? 

Exactly. Because things weren't centralized,  there was more room for entrepreneurship,  

experimentation, research, and  for people to solve problems  

that other people said couldn't be solved. Going back to management, one thing that  

stunned me is that the people who ran Standard  Oil were initially competing against him. Why  

did he only recruit the people who were  hard-nosed enough to compete against him? 

He respected his competitors, particularly the  hardy ones. Those were the players who said,  

"Okay, rather than fight you, I'm going to  get on board this ship." He brought them  

in and they all prospered as a result.  They gave up and said, “We’re not going  

to fight you. We’re going to join you.” Why was Rockefeller so hated in his time? 

He became the very epitome of the monopolist.  A famous woman journalist, Ida Tarbell,  

wrote a book about the Standard Oil trust. She  said it was a great company, but it always played  

with loaded dice. He was the very embodiment of  it. You had this trust-busting president, Theodore  

Roosevelt, and this was the most obvious trust. Also, like gasoline today, it was the one thing  

everybody bought. You and I don’t go out and  buy steel. But unless you have an electric car,  

you go to a gasoline station and fill it  up. This was the same thing. This was the  

omnipresent product. Rockefeller's idea  was to get scale, drive down the price,  

and expand the market. But it was a monopoly  and we have antitrust laws. There was also  

suspicion that it wasn't only economic monopoly,  but about the political muscle that came with it. 

The thing I'm curious about is, it seems like they  really messed up the PR, right? Theodore Roosevelt  

ran for the presidency on busting. If you mess  up the PR so badly that the guy who becomes  

president runs on breaking up your company, maybe  it would have been intrinsically unpopular but it  

feels like the PR could have been better. “Why does anybody need to know about our  

private business?” was his notion. “We're a  private business. It's nobody's business.”  

Today, you would have a PR advisor tell him  that's not really the right stance to take,  

but at that time… It probably also came from the  arrogance of having created this huge company,  

running a global company from an office on  26 Broadway. You did have a sense of power. 

Another thing is that he retires early— Let me mention this. I do know that 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. Didn't  

do any good. How come? 

Because with Roosevelt,  Teddy was the trust buster. 

Let's go to World War I and World War II. A  couple months ago, I interviewed the biographer  

of Churchill, Andrew Roberts. As you discuss  in your book, he discusses that Churchill was  

this sort of technological visionary and  how 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. 

Churchill was the First Lord of the Admiralty. All  the naval ships at that time ran on coal, which  

means you had to have people on board shoveling  coal. It took a long time to get the coal on  

board. If you switched to oil, the ships would be  faster. They wouldn't need to take the same time.  

They wouldn't need to carry the same people. So he made the decision—obviously others like  

Admiral Jackie Fisher were pushing him—to convert  the Royal Navy to oil. People were saying this  

is treacherous because we'll depend  upon oil from far away, from Persia,  

rather than Welsh coal. He said, "This is  the prize of the venture." That's where I  

got my title from. Originally it was going to be  called “The Prize of the Venture" because that's  

what he said. Then I just made it The Prize. 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. He really did constantly push technology.  Why? I don't know. He was not educated like that.  

He was educated in the classic sense. That's why  he wrote so well. But he understood technology and  

that you had to constantly push for advantage. World War II is just who can produce the most  

amount of things. But World War I is especially  interesting as a technological war because in  

the span of four or five years, you go from  battlefields with horses to literally the  

tank being invented during this time. You go from  hundreds to thousands of trucks, cars, and planes. 

It's extraordinary. In 1912, the head of the  Italian military said planes were interesting,  

but of no use in war. The war did begin with  cavalry charges. The German military position  

was based upon the railroad and inflexible.  Suddenly you had trucks, motorcycles, tanks,  

airplanes. A war that began with cavalry ended up  with tanks and airplanes and trucks. World War I,  

in my reading and writing of The Prize, is  what really established oil as a strategic  

commodity. The person who became Britain's  Foreign Secretary said that the Allies  

floated to victory on a sea of oil. Even the Germans said, “We would have  

won the war if it wasn't for the tank,” or  the trucks or something like that, right? 

Exactly. What the Allies had was  mobility that the Germans didn't have. 

There’s one thing I worry about with regards to  today. If you had a sort of World War III-type  

conflict, it seems like there's an overhang  of new technologies. Before World War I,  

there's a sort of overhang where we could develop  planes and war tanks and so forth if we wanted to.  

With drones and other sorts of robots 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 at the beginning. 

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 and  techniques of warfare were developed. Sadly if you  

look at Ukraine today, you see that's happening  now. On the one hand it's advanced technologies,  

information technologies, cyber warfare, and  drones in a way that hadn't been conceived before.  

Hobby drones have become agents of war. Obviously,  there’s automation of the battlefield. But it's  

also a World War II battle in that there's been  tank battles. It's a World War I one in that it's  

called positional warfare, trench warfare. So you  have a whole century of warfare there, but it is  

certainly the beta test for new technologies. 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. You would have needed to get to a scale that they  

could never get to. Synthetic fuel meant  making oil out of coal using a chemical  

process. The other thing is that the Allies  bombed the plants as well. When I wrote The  

Prize, I intended 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. 

When Hitler invaded Russia, he was not only going  for Moscow, he was also going for the oil fields  

of Baku. When the Japanese bombed Pearl Harbor,  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. General Rommel in  North Africa runs out of oil. He writes his wife,  

"Shortage of oil, it's enough to make one  weep." General Patton's lunge in 1944 for  

Germany is held back by oil. 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. 

There’s one big thing that was a real eye-opener  for me. People have heard of kamikaze pilots who  

would fly their planes into aircraft carriers.  One big reason they were doing that was to  

save fuel so they wouldn't have to fly back. I don’t know if “instigated” is the right word,  

but the Pacific War was instigated because  the Japanese needed more oil because of the  

war in Manchuria. But precisely because  of that war, we’d put an embargo on oil. 

The US put an embargo on them. One of the  Japanese admirals said, "Without the oil,  

our fleet will become scarecrows." World War I is when people realized that oil is a  

strategic resource, but in World  War II it's really crucial. I'm  

curious about when different parts  of the world realized how crucial  

oil is as a strategic resource. Was it  after World War I, after World War II? 

After World War I, it clearly was on the  agenda in a way that it hadn't been before.  

You had governments much more engaged  in supporting US companies. By the way,  

the US 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 came  from the United States. But after World War I,  

you had these fears of running out. That was  one reason the US government supported American  

companies beginning to go into the Middle East,  because governments recognized you needed oil. 

After World War II, in the big picture  you have the dominant allied powers.  

They're trying to figure out what to do with  the rest of the world, and they realize oil  

is such an important resource. Fast forward  30 years after that, you're in a position  

where you've lost a ton of leverage against the  OPEC countries and you're not in a position to  

control the supply of oil. How did that happen? The US had been this huge supplier, but after  

World War II we had economic growth, highway  systems, and suburbs. Oil demand is going way up,  

and we outran production. The US becomes an  importer of oil in 1946, ’47, ’48. But it’s modest  

amounts. Then as we go into the late 60s, you  have this global economic boom. Japan is suddenly  

a vibrant economy. Europe has recovered, a  vibrant economy. Oil demand is shooting up  

really rapidly. The markets that were quite amply  supplied become very tight. 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. It was thought there are  only limits to what we can do as a country anyway. 

When we finally get to the crisis, the famous  oil crisis of 1973—which probably opened the  

modern age of energy—what's going on at the  same time? There’s this political crisis in  

the United States called Watergate. The front  page of the newspaper is not about tight oil  

supplies. It's all about what Richard Nixon  did in terms of subverting the election and  

the political process. There was just inattention  and that's one of the risks. I think a lot about  

energy security as an issue. It tends to fall  off the table until it hits you in the face. 

When did we realize that there was  just a ton of oil in the Middle East? 

It was after World War II. People had begun  to know it, but during World War I a famous  

geologist named Everette DeGolyer did a trip to  the Middle East on behalf of the U.S. government.  

He came back and said the center of gravity  of world oil is shifting to the Middle East.  

No one knew how much or anything, but they  knew it was a strategic resource. By the way,  

they didn't want it to fall into the hands of  the Russians. That was a concern. Most people  

don't know that the first post-war crisis with  the Soviet Union was actually over Iran, with the  

Soviet Union making a grab for a part of Iran. After World War II, there was this real  

sense that you've got to secure oil supply  because it's such a strategic resource. The  

Middle East suddenly becomes much more important  as a source than anybody thought about. The 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. 

When I read in The Prize about what happens  after World War II in the Middle East,  

it's about 200 pages of how initially, the  Western companies make these deals with  

exporting countries. First, it's just incredibly  favorable towards the Western companies. But then  

the exporting countries are like, "No, we got to  do the 50/50 split." Then they do the 50/50 split. 

Then just over a couple of decades, what happens  is that they just keep asking for more and more  

concessions: “We want 55%, 60%.” These are the  exporting countries I'm talking about. They formed  

the cartel, OPEC, in 1960. But even before that,  they have leverage over these Western companies,  

in the sense that they can say, “If you  don't agree, we'll just nationalize you.” 

I had a mentor, an economist named Raymond  Vernon, who came up with this term,  

the obsolescing bargain. Let’s say Dwarkesh  Oil invests in such and such a country. You  

put $2 billion in there and it's great and  everybody's very happy. Governments change or  

times change. People forget the risk that you  took to do it. They say, “We want a different  

deal.” That just happens again and again. It  happens with all natural resources, with oil,  

with minerals. It was also the end of colonialism.  Countries were becoming independent. Today,  

if a company makes a deal with a country to go  develop oil, the country gets 80% of the profit. 

So if you're one of these western companies,  what should you have done? Let's say it's 1950.  

You know that over time they have obviously the  monopoly on violence, so they can nationalize you  

if they want. What should you have done so that  you can basically prevent the outcome that kind of  

universally happens? If you were in charge of it… You would obviously work really hard on government  

relations. But the countries are generally poor.  They say, “We just want our share of it. It's  

our resource.” Over time, as a company, you have  access to the market. You have the refineries. You  

have the tankers. It isn't like they can just take  it over. It takes time to train your population to  

develop your indigenous oil people who can run it.  But if you look back on it, I think you just say  

that there was an inevitability to it, which also  had to do with the consolidation of nation states. 

Why didn't the US government—or the UK  government or so on—do more to be like,  

"OK, 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. I think the government did back them up.  

Remember the British owned a big  share of British Petroleum, now BP,  

until the late 1980s. 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. I think it was inevitable.  

The governments did try and support, but there  were limits to what they could do. The question  

of access and of maintaining the supplies, then  and now, remains crucial. You have the US Navy  

today trying to push back on the Houthis  in Yemen, who are attacking oil tankers. 

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 expedition? 

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. If you look at Venezuela, they nationalized their  

oil operations. But by that point, they had people  who were very well trained at running refineries,  

at drilling, and at finding oil. They still  carried some of that DNA with them in their  

operations for quite a number of years, until the  complete nationalization and Chávez came to power. 

Was the continuation of antitrust in oil  after World War II a mistake? Often when I'm  

reading your book, what happens is that oil  producing countries can negotiate together,  

obviously after OPEC they're literally a cartel,  but then these different Western companies can't. 

In 1973, the US government finally did give  an antitrust waiver to the companies to try  

and have a united front in the negotiations. But  remember, it got all tied up with geopolitics.  

It got tied up with Arab-Israeli wars and  so forth. It wasn't just about oil. There  

were other things going on and you had the  use of what was called the “oil weapon”. 

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. Global supply declined by 15% or  

something. Why did it have such a huge effect? It was completely unprecedented, unexpected.  

It created a panic. It was also right towards  the final months of the Nixon administration. So  

it got all tangled up. Then we had the system of  price controls and allocation controls, which made  

it much harder for the market to adapt. One of the  lessons to me from The Prize is actually enabling  

markets to adjust. Because when governments try to  control them and make decisions and allocate—and  

some states want to do that today—it accentuates  shortages and disruptions and price spikes.  

The tendency is to want to control them. There was just far less knowledge about  

the market, where supplies were. There  was no coordination. Now there's much  

greater knowledge and transparency. 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 US or Europe, to their gas stations. That  system is gone. When you see the names of the  

big oil companies on a gas station—if you're  not driving an electric car—and you pull in,  

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

I see. That's another thing I was  confused about. I wasn't sure how,  

before spot and futures exchanges for oil, this  happens after the oil crisis in the late seventies  

and eighties. I didn't really understand how oil  is getting priced and how different countries  

are able to have such a… Traditionally,  the price is set by supply and demand. 

OPEC was setting prices, but then the  market responds. Demand goes down. 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 and undercut.  It ended up undercutting its own price. Here’s  

one of the things I really carried away from The  Prize. 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. That's something that you've got to keep  in mind with all the other drama that goes on. 

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. If lithium gets more expensive,  you'll figure out substitutes for lithium and  

it's not that big a deal. Or find more lithium. 

Yeah. Whereas, at least during the  oil crises, it really felt like the  

entire world economy was just on hold. 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. It was just such a  high dependence. Markets did eventually respond.  

You had a price collapse in 1986, which was the  result of that. In the early 1980s, people were  

saying, “Oh, the price of oil is going to go  to $200 or $300 a barrel,” what it would be in  

today’s dollars. It collapsed. So markets do  respond. It just took longer for that to happen. 

Let’s say you were in charge of one of these  OPEC countries in 1973. You realize that you  

have a tremendous amount of leverage  in the short term on the world economy  

because everything's at a standstill. Over  the long run, substitutes will be developed  

or more oil will come online and so forth. But  you have this unique moment of leverage where  

people really need your oil. What would you have  done? Would you have said "Give me a seat on the  

UN Security Council and I'll open up the gushers"? I think these countries did assert their political  

power. Certainly it was a very different  Iran, but the Shah of Iran until he got sick  

and fell, was asserting, "We're players in the  world economy." Saudi Arabia had been a country  

that people didn't think much about in the US.  Suddenly Saudi Arabia became really important.  

You had this huge flow of money that went into  these economies, what were called petrodollars.  

That made them a whole other source of influence. In the book I talk about Richard Nixon's vice  

president, Spiro Agnew, who had to quit.  He actually resigned because he was corrupt  

and even had people paying for his groceries. A  couple of years later, he shows up in Saudi Arabia  

trying to do business as a consultant. People  went there. That's where the money is. Today,  

if you're a private equity fund, for many of them  their number one place to go to raise money is  

not necessarily the pension funds of various  states in the US. These private equity funds  

or venture capital funds are going to the Gulf  countries again because that's where the money is. 

Does this happen with you? You're the  world's expert on energy. I'm sure your  

expertise is worth a lot to them. I certainly speak in that part of  

the world. Sometimes I joke that the  best thing about the energy business,  

if you're a curious person, is that it's global.  In some ways it's the worst thing because it  

involves so much travel and so much jet lag. But  I certainly will spend time there. Of course,  

for me it's a constant process of learning.  You have to show up to get the perspectives  

and understand what's in people's minds. Of the oil producing countries that got  

a tremendous gush of revenues in the 70s  because the price of oil jumped up so high,  

which of them used it best? Because if you look  at a bunch of them… Obviously the Soviet Union  

didn't do enough to make sure it didn't fall when  oil prices collapsed. Iran and Iraq use the money  

to go to war. Saudi Arabia uses it on welfare. The country that has done the best was not a  

big player then, the United Arab Emirates and  Abu Dhabi. They built a sovereign wealth fund  

that's probably worth a trillion dollars. They  diversified their economy. A couple of years ago  

when I looked at it, more than half their GDP was  no longer oil. 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 and where the markets are going to be. 

The Shah of Iran, who fell from power in 1979,  used to say that he wanted to save the oil for  

his grandchildren. Now the grandchildren  are in charge in many of those countries. 

Not his grandchildren. Yeah, not his. His grandchildren  

are somewhere else. That’s right. But on the Arab  side of the Gulf, they're focused on continuing  

that revenue stream, but needing oil in order to  diversify their economies away from oil. Russia is  

still, at the end of the day, heavily dependent  upon oil and gas. It distorts their economy. 

The Middle East obviously today has a lot of crazy  ideas. A lot of the worst sort of political and  

religious pathologies in the world exist there.  Is it just a coincidence that this is where the  

oil happened to be? Or did the oil in some way  enable or exacerbate this radical tendency? 

That's a very good question. I don't have a good  answer to that. There's oil, but there's also  

religion. There's also the Arab-Israeli conflict.  There's Iran, which is really in some ways a  

neo-colonial power in the Middle East. If you look  at its proxies, it has probably 250,000 troops in  

other countries who belong to various militias  and so forth. It's interesting. 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. 

They're imagining Xerxes' armies. Yeah. We  were talking about sovereign wealth funds. I  

think this is a very interesting aspect of the  modern world. some of the biggest investment  

vehicles in the world are the offshoots  of oil proceeds over the last decades. 

If you look at Norway, or if  you look at the Middle East,  

they are offshoots of oil. Singapore's,  of course, is the offshoot of hard work. 

Let’s say you are in charge of an oil producing  country's sovereign wealth fund. It's a trillion  

dollars or something, which per capita is  actually not that much. If you're Saudi Arabia,  

you’ve got a trillion dollar sovereign wealth  fund. The population is 30-40 million people.  

Per capita, it's like $20-30,000.  It's not that much per capita. Also,  

you know that the majority of your GDP is not  going to be sustainable over the long run. You're  

in charge of it. What do you do tomorrow? Is it  important that you use that money domestically?  

Or would you just put it to work globally? 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. It’s quite  

another thing to use it as a basically  global diversification investment vehicle.  

In Saudi Arabia, what's called the PIF, the  Public Investment Fund, is doing both. In Abu  

Dhabi they've differentiated the roles of these  different funds. As to what is a global fund,  

the argument is the same argument that  you would get from a financial advisor  

in the US which is: diversify. If you're just purely thinking  

of it as an investment vehicle, then maybe the  rates of return aren't that high domestically. 

Yeah but you do want to diversify your  economy. You want to bring in investment.  

There's also another critical need: you  need to create jobs. The oil industry is  

a capital intensive business. It's not a labor  intensive business. You need to bring in other  

kinds of industries as well. If you look at your  population, maybe 60 percent of your population  

roughly is under the age of 30, something like  that. So you have a real job creation need. 

Oil famously makes rich countries richer and poor  countries poorer when they discover it. Let's say  

you're a country that just discovered oil today,  but it's got a really low GDP per capita. Maybe  

you're already advising such countries. If you  were advising them, what is it that you tell them  

to do to avoid getting Dutch disease themselves? So we need to explain the Dutch disease, which  

means that you create an inflationary economy and  make businesses uncompetitive. That's the heart of  

the Dutch disease. Of course, that concept was  invented for the Dutch. It happened when the  

Netherlands became a big producer of natural  gas. So it is a cautionary tale. You want to,  

as they say, sterilize some of the money that  comes in. You put it into a sovereign wealth fund,  

invest it overseas. Then you want to put  money into education and health and those  

basic human needs. You want to turn  financial capital into human capital. 

Why is it so hard to set up a stable oil  rentier state? Theoretically it seems,  

you've got trillions of dollars  of wealth right under your feet… 

Some have, some have not… But if you look at the examples, so many just go  

off kilter. You have Iran, Venezuela, Libya, and  so forth. Very few of them are stable, "We have a  

ton of money," Saudi Arabia-type states. If you have that huge inflow of money,  

it really can create a lot of distortions. Look  back at the events that led to the overthrow of  

the Shah of Iran. Things don't happen for one  reason or another. He probably had cancer for  

two years and was losing it. He also had  been so arrogant that he alienated people  

and he had his secret police and so forth.  Then this pell-mell rush of overspending  

created inflation and dislocated the economy.  It's a good question for study, to look at on  

a comparative basis what worked and didn't work. It isn't just oil and it isn't just money. There  

are other things that are involved as well.  Clearly there was a huge religious reaction,  

led by the Ayatollah Khomeini against  modernization, against the role of women.  

The Shah was saying women should get educated  and play major roles in their economy. That  

was not something that the very conservative  clerics could stand. It isn't just about oil or  

just about money. It's part of a larger mix. Why is Aramco so much better run than other  

basically nationalized oil companies? There are others that are well run,  

but Aramco is a very well run company. As  you described before, they rather smoothly  

did their transition and retained their people  who are highly trained. If you go to Aramco,  

you meet people who have PhDs from MIT or  Stanford or University of Texas. They have a  

very well trained global workforce and a very high  standard. They drew initially upon the cultures of  

the companies that were eventually nationalized  out of the business, but the people were trained.

I'm curious if there are any stories you can  share. I imagine since you wrote The Prize, world  

leaders are inviting you to meet them and give  advice. I don't know how many stories you can tell  

from these conversations. Is there someone who's  really struck you as having their head on straight  

on these issues? You've been all around the world.  I'm just curious if you have some crazy stories. 

One is in The New Map and you and I  have talked about it. It’s the meeting  

with Prime Minister Modi in India. India was  really at a crucial point whether to get out  

of the Permit Raj, where government really tightly  controlled the economy. I discussed this in a book  

you probably don’t know I did  called The Commanding Heights. 

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. It was a very heated discussion  

and then I just remember his remarks: "We need  new thinking." Those simple words 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 and closed economy. So in 1973 you have the oil crisis. Before that,  

if you look at the sort– We’re back to 1973,  

I thought we were already in 2024. Yeah we're moving around. If you look at  

the rates of economic growth or rates of total  factor productivity growth before that date,  

it's pretty high for a long time. It's 2% total  factor productivity growth before the 1970s.  

Afterwards it's like less than 1 percent in the  US. How much of that is tied to the energy crisis,  

or was that just a coincidence? 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 that slowdown occurred. The  US went from being on a very strong growth  

trajectory to what at that time was the deepest  recession since the Great Depression. Of course,  

we've had deeper recessions since then.  It took a decade to dig out of that hole. 

But then the rates of economic  growth didn't go back to… 

Also with the US, as your economy becomes  bigger you don't grow at the same rate.  

You're growing off a much larger base. Here’s one of the things in Silicon Valley  

that techno-optimistic people really talk  about. What if you had ridiculously cheap  

energy because of solar and other things? Would  the economy just explode because the economy is  

bottlenecked by the price of energy? Would it not  be a big deal because there are other bottlenecks? 

We’ll come to it in terms of AI and electricity. 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. 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. Big Tech wasn't  born in 1973. It's much more recently that it's  

happened. Like the oil industry, it's happened  pretty quickly actually in this space of time. 

When you have price spikes, when you have  disruptions, that's when you see the cost  

and those risks are there. Although when  you get into a presidential election,  

the incumbents always worry about the price  of gasoline. It's so sensitive, because people  

pay it. It's the one price you pay all the time  and you see it. I need to think about it more,  

but I don't think it's a huge constraint. 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. Now  

there's fusion, which seemed to be 50 years away.  It’s now maybe 10 years away. Technology will  

change things. Electricity may be a constraint  on the growth of AI in the near and medium term,  

but that's a very specific problem. There's been different projections made  

about how much energy will be required for AI. The  big thing is they need these big training runs,  

and they keep getting bigger and bigger over time. There's one projection that 10% of US electricity  

by 2030, which is half a decade away, will be  going to data centers. It's about 4% today.  

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. I remember I was at  

a conference with electric power utility CEOs  about a year ago. They were talking about growth,  

being surprised by it. Then we have our  conference in Houston in March. By then  

people had woken up to the fact that you're  talking about going from 4% of US electricity  

to 10%. US electricity hasn't grown very much over  the last 10 years. It's grown at 0.35% a year. Now  

you're looking at maybe 2% annual growth or  more. That adds up very quickly. I was very  

struck. I did a discussion with Bill Gates at our  CERAWeek conference in March. He said we used to  

talk about data centers as 20,000 CPUs. Now we  talk about them as 300 megawatt data centers. 

The sense is that you have electric cars and  energy transition demand. Then you're bringing  

back chip manufacturers and smart manufacturing to  the US. That's electricity demand. Then you have  

AI and data centers. Suddenly this industry that  had been very flat is now looking at growth. How  

you are going to meet the growth is very much on  the agenda right now. Data centers are looking at  

where they can position themselves so that we have  access to the electricity that they need: reliable  

24-hour electricity. Now there's energy security  in terms of oil and gas. Actually it's also  

energy security in terms of electricity. There's  your potential constraint on economic activity. 

Some will say the answer to that is innovation.  Chips will become less electricity dependent or  

data centers will operate differently. So  the demand will not grow as much. There are  

those who say that will happen, but it  hasn't happened yet. Others are saying,  

“How are we going to meet that demand?” AI is  going to demand a lot more electricity than we  

had thought about a year or a year and a half ago. It's potentially even worse than the 10% number  

implies, because it's not widely distributed  like households would be. In many cases,  

they have to be one gigawatt to  one specific campus or location. 

Right. You look at developing data centers.  They'll take all of the electricity generated by  

a nuclear power plant. If they do that, that means  you've taken that baseload nuclear power off the  

grid. There's a scramble to understand this. Then  there are the issues that we have in our country,  

which is that you can't get things permitted. It  takes so long. You have supply chain problems. You  

have a workforce that has aged out. It's  said that to be a fully-trained lineman,  

you need seven years. You can see that this area  of electricity, pardon me for saying it, is hot. 

The thing I find wild when I'm reading The  Prize is just how much economic development  

is ultimately contingent on the laws  of physics. Suppose that fossilization  

happened in a different way and then oil  didn't form. Let's say coal didn't form  

either. Then it's hard to imagine how society  goes from like water wheels to solar power. 

That's right. What you really realize  is that hydrocarbons have been the fuel,  

the engine really, of economic development.  People would still be in sailboats. They  

would still spend six weeks crossing the  Atlantic. It would take weeks to go from  

one place to another. That's a very interesting  question, to imagine our world without them. 

It's also interesting that the tech trees  play such that just when you need more runway,  

you get the next energy transition and then you  get a little more runway. It’s just weird that  

it's… or maybe we would have gotten it anyway. You were going to run out of whales. I love that  

this professor at Yale, kind of a consultant, did  this experiment. He needed some extra money and  

he did some studies that showed that actually  this stuff called rock oil, you could turn it  

into a lighting fuel fluid. I love the risk  taking of it. But it's hard to imagine… we  

wouldn't be where we are. We wouldn't have the  world. Today, it wouldn't be a world of eight  

billion people were it not for it. Obviously,  there's going to be change. I'd say right now,  

the incentives for innovation are there. That's  why we may see a runway of what's going to come,  

but it may really come from the side. And something else that the kerosene is the  

fact that oil for the first 50 years is used for  only lighting. Another thing that's interesting  

about that is people are asking now about these  AI models. You can literally get a million tokens,  

like many books length of content, out  of these models for 15 cents. This is  

one question people are asking. Let's say you  did a hundred billion dollars worth of tokens,  

what does that look like? What does an  industrial scale use of intelligence look like? 

With crude oil in the beginning you're producing a  certain amount, but you had a glut because you're  

only using it for lighting. You then discover  this industrial scale use of this technology,  

which is obviously motorized transportation.  That’s one question you can have for AI.  

Currently what we're using these models for is  research and chat and whatever. That’s like the  

kerosene. What would the equivalent of  billions of vehicles look like for AI? 

That's a question that I'd like to ask  you. It is a sense that we are at the  

beginning of something new. I remember a  political leader in Central Asia saying,  

“AI is going to be the true  source of power in the future.” 

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? 

That was a period up till about 2017, when it  was growth for growth's sake. Then basically  

the financial community said, "Hey guys, the  party's over. I'm not going to reward you for  

growth. I'm going to reward you for sending  money back on my investment." So in a sense,  

shale is almost a mature industry. I think people  don't understand how transformative it's been. The  

US was the world's largest importer of oil. We  were only producing 5 million barrels a day of  

oil in 2008. Now we're more than 13.2 million  barrels a day. The US is energy independent.  

People thought it was a big joke. It could never  be energy independent. Every president said, "We  

want energy independence." Late night comedians  could make fun of it. Actually, it's happened and  

it's had huge economic significance. Back in  like 2008, the US was spending something like  

$400 billion a year to import oil. Now  we basically spend nothing to import oil. 

It's been geopolitically very significant.  That's been a learning experience for the  

Biden administration. It turns out that if it  wasn't for shale gas made into what's called LNG,  

liquefied natural gas, shipped to Europe, Putin  could well have shattered the coalition supporting  

Ukraine by using the energy weapon with,  not oil, but gas. Suddenly you had European  

politicians coming to the US to try and secure  supplies of LNG because they were so worried  

about it. It really is a revolution that is  playing out today. China imports 75% of its  

oil. It wishes it was in our position. 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? 

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. For them, being able to import  

energy from the US is very critical to their  energy security. Where else are they going  

to get their LNG? They'll get some from the  Middle East, some from Australia, but they'll  

be pushed back to getting it from Vladimir  Putin. For them, US energy exports, US shale,  

has become part of their energy security. I never thought of it quite that way,  

but if you think about what the Japanese are  saying, that's really what their message is. I  

did an event with the Japanese prime minister in  the springtime. That came through very clearly.  

For them, US exports are part of the security  relationship. US LNG is now part of the arsenal  

of NATO. It's really different. 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. I have  

firsthand sense of that. In 2013, before he  annexed Crimea, I was at this conference,  

which was his version of a global economic  conference. They said I could ask the first  

question. It was going to be something we were  talking about before, overdependence on oil and  

gas revenues. I mentioned the word “shale” and he  erupted and said, “It's barbaric, it's terrible.”  

He got really angry in front of 3000 people.  It's rather uncomfortable in that position. 

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

gas. Two, he saw that the shale revolution  would augment the position and influence  

of the US because the US would no longer be  energy dependent. He was very prescient. He  

was right about both of them. When he invaded  Crimea, I don’t think he never imagined that  

if he cut off the gas to Europe, that  Europe could survive. Europe survived. 

The Prize especially, but all your  books are narratively driven. You have a  

detailed understanding of people and events and  so forth 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." When you're in these conversations, or  you're trying to think about the future of  

energy, do you feel like you really need to know  how Drake was thinking about the drill well and…? 

Yeah in one way, I see myself as a storyteller.  I like narrative. I think that's the best way to  

communicate. I like writing about people and not  just about abstractions. It's funny. When I was  

writing The Prize or writing these books, I almost  see it like a movie when I'm writing. I see what's  

happening and that makes it more vivid for me. I also think that there are more and more things  

you're competing with if you're a writer. You're  competing with TikTok, YouTube and everything 

Podcasts. Podcasts. So you've got to draw people  

in and people love stories. I started writing when  I was a child. My father had an old typewriter.  

He'd been a newspaper reporter and I would hunt  and peck and just write stories. In high school,  

I was student body president but I was also  editor of the literary magazine. When I was an  

undergraduate at Yale, I started a magazine called  The New Journal which was narrative journalism. I  

learned a lot of my writing doing that. I learned  a lot of my writing writing magazine articles,  

how to tell a story. I really love shaping a  story. I love finding a character. I love finding  

the great quote that just illuminates everything  you're trying to do. I love not boring people. 

When you were writing The Prize, it's a  seven-year process. There's the endurance,  

but there's also the sense that you have  to have faith that at the end of this– 

You're making a deal with yourself. You're making  a deal that what you write in year four, you're  

not going to totally rewrite in year seven because  otherwise you'll never get it done. The odd thing  

is I started a business the same year I started  The Prize. I was living entrepreneurship. People,  

when they go back and write history, they know  the outcome. So sometimes they think everybody  

had all the information, all the time, and  knew the outcome. Of course, you never have  

all the information. You certainly don't have  all the time. You surely don't know the outcome. 

That sense of contingency, which is such a part of  human history, I tried to capture. That is one of  

the things that made The Prize, The New Map, and  The Quest distinctive. The Quest, the middle book,  

was a question. Where the hell did the modern  solar and wind industry come from anyway? It's  

entrepreneurs. I have been an entrepreneur, I have  a feeling for it. You're an entrepreneur in terms  

of what you're doing with podcasts. You sort of  invent it as you go along. I tried to capture  

that. At the same time, I love writing narrative. Here’s something I'm curious about. Let's say you  

meet another analyst who doesn't have  a vivid sense of narrative history,  

but just knows the facts and figures. What is it  that they're missing? What kinds of understanding  

do they often lack when you talk to them? I will have great respect for them. I also  

love reading the monthly energy review from the  Department of Energy, which is only statistics,  

or the Statistical Energy Review. I love it.  But 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 or  were wrong about. It's the texture. 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 December 7th,  1941, September 1, 1939. It could happen any day  

in the Middle East right now. You could go from  one day to the next and it's a different world. 

Just reading it, you can tell. It's hard to  understand many of the things if you don't have  

an understanding of other things. Arab nationalism  forced the Saudis to support the embargo. Why did  

Egypt launch an attack? Because they wanted  a ceasefire to be in a different place,  

but they actually wanted to end the war…  There's so many different things like that. 

That’s right. You don't understand why these  things happened. You just look at the numbers,  

but why did it happen? Part of it is,  through narrative explaining why it happened. 

Let's talk about solar and renewables. With oil,  you have a commodity which is a flow. You can cut  

it off and you can turn it back on again. It gives  the person who's producing it a lot of leverage.  

Whereas with wind and solar, if you're the people  producing it, it's just a capital stock. How does  

that change the geopolitical situation and the  kind of leverage that the producer might have? 

It's a question of scale. What I carried away,  the basic premise of energy security goes back  

to Churchill. He said that safety lies in variety  and variety alone, diversification. Wind and solar  

give you diversification. Electric vehicles  diversify your fleet. Those are all there. 

For China, 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.  

They know the story of what happened with World  War II with Japan. For them, the shift to electric  

cars is less about air pollution and more about  energy security. It's also about knowing that  

they couldn't compete in the global market  with gasoline powered cars, but they can with  

electric cars. Those are the strategic things. Wind and solar give you a more diversified system.  

Until you have batteries that can really deliver  the storage, you have the intermittency problem.  

You take California today. People think wind  and solar is advanced. It's true. They are 25%  

of electric generation in California, but 43%  of electric generation comes from natural gas.  

And that gets back to the data centers. You're  going to need to bolster your electricity power  

system. How much can you do with batteries  and how much can you do with natural gas? 

Wind and solar are also stories about  entrepreneurship. In The Quest I asked myself,  

where did the wind and solar industries come  from? The solar industry came from two émigrés who  

had left Europe, one of whom had driven his car  out of Hungary in the 1956 revolution. In 1969,  

he's a chemist working for the US government.  He and his partner decided to go in the solar  

business. That became the first solar company.  They started in 1973. With the wind business,  

I like to say the modern wind business is the  result of the marriage between California tax  

credits and the sturdy Danish agricultural  industry. It was driven by tax credits, but  

they needed to find wind power machines that could  stand up when the wind blew in the Tehachapi Pass. 

It took about 30 years for both those industries  to become competitive. It only happened around  

2010 that they actually became competitive. Now,  of course, they're very competitive but then guess  

what? Now,they're all tied up. Renewables  are also now tied up in geopolitics and,  

in what I call The New Map, the movement to the  great power competition. The US just put 100%  

tariffs on Chinese electric cars, 25% tariffs on  Chinese storage batteries. We recently had this  

bill, the Inflation Reduction Act. It's huge,  a trillion dollars the Treasury estimates when  

it's done. It's about climate and renewables,  but it's also about competing with China. 

Speaking of solar deployment, I think  solar deployment is on an annualized  

$500 billion budget. That's the yearly  amount that we're investing in deploying  

it. Is there anything—when you look through  the history of The Prize or the history of  

energy—comparable to this scale of deployment?  Maybe initially, you could say electrification?  

Or is this just an unprecedented scale? I'd have to think about it. It's happening  

fast. As I say, these guys started the solar  business in 1973. It's now taken off. 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. Because they dominate the business. 

Right now, wind is about 10% of US electricity.  Solar is about 3.5%, but solar is going to grow.  

It certainly will grow very fast. I just heard  this when I was at this utility commissioner's  

conference. There’s real tension between states  and localities. The states want to push it, but  

localities don't want solar or don't want wind. We're in Nantucket and I saw a couple signs  

around like, “No More Wind.” They just had a thing where one  

of the blades of one of the big wind turbines  fell off and washed up on the beach. That has  

now created some really huge consternation  and suddenly reopened the discussion. 

You need supply chains. Wind and solar are a  little bit different, of course. If you want  

to start a new offshore wind project in  the US, you can order your cables but you  

won't get them until 2029 or 2030 because of  the supply chain issues. Solar is different.  

But of course, solar is so dominated by China. Oil companies are investing a lot in renewables.  

Is there a bunch of skill transfer here that  actually means that these oil companies will  

be really good at deploying solar or something? There's a difference among some companies. Some  

companies say yes. They look at offshore wind  and say, “We're in the offshore oil business,  

we can do offshore wind.” You see that in Europe  where Equinor, which is the Norwegian company,  

or BP, or Shell, or Total, are big  in offshore wind. They say, “We have  

skills in that.” Solar's a little different. Exxon is now going into mining lithium, thinking  

that they can use skills that they use for that.  But the US major companies say basically, “We do  

molecules, we don't do electrons.” That's where  the difference is. The European companies say,  

“We can do all of it.” The Americans say, “We  have no comparative advantage in electrons.”  

But there's a lot of interest in hydrogen because  that's another molecule and to a degree, hydrogen  

can substitute for natural gas for instance.  That's where a lot of investment is happening but  

it's very early. Again, sometimes people forget  about the energy business. Its scale is so big  

as to what the requirements are. Yeah, but also it's surprisingly  

small. It's a fraction of GDP. Oil is 3% of  GDP. Obviously the entire world depends on it,  

but you wouldn't see that in the GDP numbers. It used to be a much bigger share of the stock  

market, Dow Jones. It's also a smaller  share. It's still the strategic commodity,  

but there are a lot of other things that  go into it. 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 US whose  jobs are connected to the oil and gas industry. 

I'm curious about how you imagine the demand  elasticity for oil changing in the future. In  

the past, you're not going to stop going to work  because oil is 10% more expensive, right? With  

the Arab oil embargo, prices went up like 300%  even though supply only went down 15%. But now,  

if oil goes up in price, you can Zoom or video  conference or something. With fracking also you  

can increase supply if you want to. Because  of these new flexibilities we have, is there  

going to be a lot more elasticity in demand? And also, maybe the main thing with AI and  

compute is that you have this sort of thing where  you can just dump arbitrary amounts of energy into  

this and it gets better. Currently there's nothing  where if you just keep dumping more energy into  

it, there's a huge elasticity of demand. I think you would know with the podcasts  

you've done how AI is really gonna change  everything. That is the expectation now,  

that it's gonna change everything including  energy. Then you have $6 billion of venture  

capital money that has gone into fusion. There's a  lot there that can change. My own view is that the  

energy transition is not going to happen because  of price. It's going to happen because of policy  

and technology. I think that's what's driving it.  I have the view that people have had too simple  

notions of how the energy transition will work. That's one of the things in The New Map. If people  

read one part of it, read the section on energy  transition. It tells you that 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. Oil discovered in  1859 overtakes coal. Coal is 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? 

Some of that thinking was developed during COVID,  when demand went down and price collapsed. Part of  

it is people worrying about energy security. I was  just reading last week the budget message from the  

finance minister in India. She talked about energy  security and how they have to maintain economic  

growth. It's very important to do that and energy  security as well as energy transition. So it's a  

different balance. There's a difference between  the North and South. Then there's the constraints  

on minerals because 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. 

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 in the US. We just did  a study. It takes 29 years to open a new mine.  

Changing a $109 trillion world economy… it's  going to change. You said the development of  

solar is going to be really important. But things  are not going to move in a straight line. We are  

in an energy transition, but it's going to be  a longer one. Here we are, as you mentioned,  

in Nantucket, which was a key part of the  energy transition because it was a source  

of lighting in the 19th century from whaling. It was like in the first chapter of Moby Dick. 

Exactly and then it came to an end. It  came to an end because of the electric  

light. Things are not going to stand still.  The most important thing are the technologies  

that you can see coming or the ones that come  from left field like fracking or grasping what  

AI is going to mean for how our economies work.  But I think you made a very important point and  

that was the discovery in COVID. You don't  have to travel, you can do it by electrons. 

Here’s one of the final questions I wanted  to ask you. If somebody were to write a  

definitive history for another subject that's  not energy—you don't have to personally write it,  

you can just delegate it to somebody else  to do it and they'll do a good job—is there  

a topic which you feel could make for another  thousand-page fascinating history of the world? 

My father had worked at Warner Brothers for a  time. I was always interested in the movie and  

entertainment business and how that developed.  A big epic story of that. I just think that's  

so interesting. One of the things that is fun  when you're writing this is when you have these  

oversized personalities. There may be obnoxious  people whom you would hate to meet in person,  

but are very interesting to write about. So  you look for an industry… Here's something  

nobody's ever thought about: the history  of the internet. No, I'm just joking. 

But I don't know if somebody has written a  modern, definitive history of the internet. 

The one thing I've learned from doing these books  is the 3x rule. However hard you think it's going  

to be, it's going to be at least three times as  hard to do. 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. I've heard this from multiple historians  

who have written similar definitive books  about their subject. I think Caro said,  

"I'm going to write this over the summer and  then we'll use the book deal to go on vacation  

afterwards." I interviewed Richard Rhodes, the  author of The Making of the Atomic Bomb. It’s a  

similar story there, obviously it took longer. I used the advance for The Prize to actually  

capitalize the company we started, which  created an incentive to finish The Prize. 

You were doing the business in  the day and then writing at night? 

Writing at night, writing at weekends,  vacations, filling up our car with books,  

and just immersing in it. I did not have a master  plan. I really should have. It would have saved a  

lot of time probably. I would just immerse myself  in something and get it all in my head. My mother  

was a painter and I would watch her sketch.  That's the image I have is that I sketch it out  

and then I fill it out and work on it. Like a lot  of people, I love to edit and polish. I love going  

over it and just making a sentence better and  then saying how to make it better. With The Prize,  

one of the things is that I read the whole book  aloud to myself to test every sentence. Does  

every sentence have resilience? Does it sing?  For me, that's a source of pleasure to do that. 

Did you know while you were writing it that  it would become this definitive history? 

No. We had this apartment overlooking the Charles  River in Cambridge. I'd look out there at 2 a.m.  

in the morning and think, "What's going to  happen?" I think those around me despaired  

a little bit. This could end up a veil of tears.  But it turned out. And then the book was basically  

five years late, brilliantly timed. People  said they have a great sense of timing. I said  

I was five years late. But I did have a sense  that I needed to get it done. That something,  

that some crisis was going to come. I had a sense  of that and that drove me. Otherwise there's this  

danger that you just keep working on it. Okay, I think that's an excellent place to  

close. Thank you so much for coming  on the podcast. This is wonderful. 

It's great to have this conversation. It gave  me a lot to think about too. So thank you.