Daniel Yergin: evaluation

Transcript context

…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?…

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