00:00Clara, did did the did the like the energy markets told us a few weeks ago that the worst was
00:06behind us and it seems like they got it wrong.
00:10What is the price action reflecting to you about the current state of affairs of what's happening in the Middle
00:15East?
00:17For me, one of the biggest takeaways in what we're seeing with oil prices right now is just the degree
00:23of uncertainty that we're seeing on still a day to day basis,
00:27because this is another week in which energy markets have remained incredibly fragile.
00:32And yet, even so, we've seen resilience adaptation coming from a number of fronts.
00:38I think one of the challenges that we're dealing with is now we're talking about a situation that's not just
00:43an ongoing conflict.
00:44It's a conflict that's expanding on multiple fronts with implications for markets.
00:49Yeah. What are the implications?
00:51Like, you know, one of the things, Clara, that we've been talking about is, you know, watching China, how they
00:56are increasingly embracing other forms of energy.
00:59They want to not be beholden to the world when it comes to their energy needs.
01:03And that's whether it's nuclear, whether it's alternative energy, like we see that.
01:06I do wonder, you know, when we think more broadly about energy, and we're still very reliant on fossil fuels,
01:17but longer term, I mean, Saudi Arabia, the whole region, Middle East, they are thinking about like life after fossil
01:26fuels, aren't they?
01:29You know, I'm not sure yet if countries are thinking about life after fossil fuels, but I do think increasingly
01:36we're seeing questions about life after peak oil, or at least the kind of reliance on oil that we've seen
01:43in previous years.
01:44A big part of this and what we've seen in the number of adaptations over the last few months is
01:50this kind of rising interest and focus on electrification, on vehicles, on other things that can help curb that demand
01:57for oil.
01:58It's certainly something that has also factored into Saudi Arabia's thinking as well on multiple aspects of its energy security
02:04strategy.
02:06And for that reason, I think also influences how it thinks about its remaining export potential.
02:11But the reason I'm hesitant to say that we're in a world that's thinking beyond or kind of post fossil
02:18fuels yet is some of the broader things that we've seen on this front.
02:22One of the questions is, of course, what we've seen with natural gas trade, where I think some of the
02:28stories continue to be more mixed and there are questions there.
02:31But I also think quite a bit about coal demand as well, where you have, for example, in response to
02:39this crisis and rising demand for electricity, Asia really increasing its consumption of coal to make up for that gap
02:47it's had in tight LNG markets.
02:49And so longer term, a question is, you know, do we see that sustained clearly multiple economies, not just China,
02:57but you also have Vietnam and others have been thinking about that transition to greater use of renewable energy sources.
03:04They were thinking about that pre Hormuz as well.
03:08So there is a question of how much more they can do and what they see as their most challenging
03:13sources of potential system strain.
03:15Yeah, well, what's the I mean, coal for now is easier than some of the renewables you talk about and
03:21perhaps some of the nuclear because you can just increase what you're you're actually doing when it comes to coal.
03:27What are the long term implications if there is a higher reliance on coal in some of those countries you
03:32mentioned?
03:34There are a couple of implications of longer term reliance on coal.
03:37And I'll say it's not just that coal is easier.
03:40It's in some case the capacity is just already in place.
03:44It's underutilized if you continue to utilize it.
03:48And so why has it been underutilized?
03:50What are the risks of if it's utilized at a greater degree over the long term?
03:55We talk a lot about air pollution in particular, which the Asia Pacific and region in particular has really been
04:02front and center.
04:03We've all seen the stories of, you know, years and years of really toxic air pollution out of Beijing, New
04:09Delhi, elsewhere.
04:10I think that's one of the implications.
04:13Another is we often talk about coal as this sort of low cost source of energy.
04:19We talk about it as something that's domestically abundant.
04:22We are seeing more and more across the region, both rising prices on coal and rising requirements for coal imports
04:31as well to meet those needs.
04:32So there's a little bit of a geopolitical concern there as well.
04:36Wait, so more demand for coal, you're saying, in general, or what?
04:42I'm sorry.
04:43I think I kind of missed the point here.
04:44Yeah.
04:45Absolutely.
04:46In the near term, we're already seeing more demand for coal, more than both today and more than our expectations
04:54that already saw demand for coal rising in South and Southeast Asia as well.
05:00But beyond just kind of the near term shock, there are things that I'm watching now where it's going to
05:07be interesting to see what actually moves forward or does not.
05:10So, for example, there's been some reporting on Vietnam of questions of if it is considering new construction of coal
05:18-fired power plants.
05:19It is not the only one across the region that has had trouble, not just in questions of reducing its
05:25use of existing plants, but holding off on additional builds.
05:29Right.
05:29And that's something that could further incentivize demand higher.
05:32So I think about your senior fellow for climate and energy.
05:35So how do you think about all of this in terms of the global climate picture going forward in a
05:42year where certainly here in the U.S.
05:44we've been dealing with smoke coming down from wildfires in Canada, you know, extreme weather again, whether it's water or
05:52heat.
05:53So I'm just curious, as you watch the global energy picture and what's going on there and what it means
05:58for global climate, how do you tie it all together?
06:00Is it worrisome?
06:03It's worrisome.
06:04And I would also say that it is a bit of a mixed story because you have seen already a
06:09number in the region who, in the response to this ongoing global energy market shock, have talked about the increased
06:16use of nuclear energy, earlier restarts or new builds.
06:19They've talked about their greater ambitions for not just the renewable energy sources that we think about, so wind and
06:26solar, but also biofuels and other alternatives as well.
06:30So I think these are all great friends, but I think they do not fully eliminate my concern about, one,
06:38the potential for rising use of coal.
06:40And in turn, even with greater progress, I think we still do have those real serious growing challenges of the
06:47reasons rising carbon emissions and the challenges that creates, not just for individual communities in the region, but for global
06:55action at large.
06:56We just have 10 seconds and I want to end where we began, and that's with oil prices.
07:00And just your prediction as we get into the fall, are we going to stay around $100 a barrel?
07:06You know, I think we are still in an environment where there are so many uncertainties.
07:11We are wondering if the price point that we're at now is sustainable.
07:16Okay.
07:16And if some of the things, yeah, I would love to know too.
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