00:00Well, let's drill down into this a little further and explore the implications for the international oil and gas sector
00:05and talk to a familiar expert, Kingsmill Bond, the director for EMBA.
00:10Kingsmill, what's your intelligence? What are you hearing specifically on supplies in the region?
00:18Well, I mean, you just have to look at the prices.
00:21European prices have doubled, and this is a full-blown energy crisis right now,
00:29right around us.
00:31Tanker traffic nearly halted through the Strait of Hormuz, through which, and we'll say it again,
00:36roughly 20% of global oil and gas flows.
00:40You're saying this is a full-blown energy crisis?
00:46Yeah, it is, and it is once more reinforcing the point that dependency upon fossil fuel imports
00:56at a time when the world is becoming more fragile is a category error.
01:03And the point is that for Europe, last time around, what did Europe do when it had the Russian gas
01:09crisis?
01:09It pivoted to America and Qatar.
01:12America then blackmailed Europe, and now Qatar's cut off.
01:14So the answer is to deploy renewables and to electrify, and this is the key message that we're seeking to
01:23get out there.
01:24No more thinking you could diversify by getting your energy through the Strait of Hormuz.
01:29You've got to get it yourself.
01:31Time is everything, presumably.
01:33If this goes on for a matter of days, or perhaps a few weeks, is the crisis so pronounced?
01:40So, of course, if it were to be over in a matter of days, it would be less problematic.
01:46But Iran's a big country.
01:49It's unlikely to roll over in a very short period.
01:53So I think we need to dig in and assume this is going to last.
01:57And strategic decisions are now being made, both in Europe and in Asia,
02:00these major importing nations of fossil fuels.
02:05And they need to move down a new path of deploying their own energy.
02:09I mean, the big fight, incidentally, we've been talking about for a long time is between LNG and solar in
02:14Asia.
02:15And, you know, America's trying to put, and Qatar are trying to push LNG.
02:19China's been trying to push solar.
02:21And this just massively increases the strength of those who want to electrify and deploy domestic renewable resources.
02:29So it's a big setback for the LNG industry, from which it may never recover in Asia.
02:36I guess this is going to reshape the arguments around renewables, isn't it?
02:42Yeah, because renewables are the instrument of harnessing domestic sun and domestic wind.
02:48And people have these legitimate concerns that you might be setting up dependency upon China if you're importing renewables.
02:55But as we and many other people have been saying for a long time, there's a massive difference between importing
03:00a solar panel that lasts for 30 years
03:02and importing a barrel of oil that goes through the Hormuz Straits, which can be closed in the click of
03:08a finger.
03:08So once more, it's going to redirect people to a renewable electrification future.
03:15And to be clear, the famous Middle East oil crisis in 1973 led to peaking of the share of oil
03:24demand in the global system.
03:25And it's been on a constant downward decline ever since then as a share of the global energy system.
03:31This type of crisis creates very material consequences.
03:36The longer it lasts, the more likely that it's going to have significant implications for those who want energy.
03:44Kingsmill, good to see you. Thanks for your time. Kingsmill Bond, the director for Ember.
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