Daniel Yergin on What Happened to the Energy Transition

SPEAKER_2 (0:02)

Bloomberg Audio Studios, podcasts, radio, news.

Tracy Alloway (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:22)

And I'm Joe Weisenthal.

Tracy Alloway (0:24)

Joe, you know what's weird?

Joe Weisenthal (0:26)

Tell me, tell me what's weird.

Tracy Alloway (0:27)

There's a lot that's weird, actually, but we seem to be living in this extremely high tech world where you can get a chat bot to write you an essay or create a video. I don't do that, by the way. Sure, sure Joe. I write my kind of stuff. You could buy a robot dog to play with, all that stuff. And yet, we still seem to be struggling somewhat to provide cheap and affordable and abundant energy to power all these things. And in fact, because all this new technology guzzles so much energy, data centers use so much power, it feels like energy is becoming even more strategically important in many ways.

Joe Weisenthal (1:05)

It definitely feels like we're in an age of sort of, people remembering the deep constraints that energy imposes, whether it's data center, all kinds of things. Energy is not a solved problem by any stretch. Although I would say that in my limited sort of reading of the history of energy, it's never a solved problem.

Tracy Alloway (1:24)

I know, I know.

Joe Weisenthal (1:25)

At the moment, we find we're in a period of energy surplus. We quickly find something to do with that energy. And once again, we are in a period of constraint. But it does feel like we're in some sort of period of constraint right now.

Tracy Alloway (1:36)

When Keynes was doing his whole abundance theory, did he mention energy at all? What did he say? Well, I'm just going to assume that Keynes promised us all abundant energy as well as everything else. And it's not here, so we're all upset. Okay. So even though we've had all these breakthroughs in alternative energy technologies, you know, things like solar and wind, we're still using more coal, more oil than ever. And in fact, there's sort of some old school energy behaviors going on with China, stockpiling massive amounts of oil.

Joe Weisenthal (2:06)

Yeah. As you said, coal is booming, China stockpiling oil, electricity prices in the US on the rise, maybe perhaps due to some of this AI data center demand. It feels like, I would say, pre-COVID at least, I don't know if people got a little bit naive or optimistic or goldilocks, but there was this view, it's only a matter of time before energy is solved, because we're going to have all this wind and solar, it's going to be cheap, it's going to be clean. We see all these cost curves coming down with like batteries and wind and so forth. It's only a matter of time before we don't need the dirty stuff. And right now it doesn't feel like we're anywhere close to that. And I'm sort of curious what happened.

Tracy Alloway (2:42)

Yeah, well, everyone talked about the energy transition, but so far it's not really a transition. It's like a compliment to existing sources. Anyway, we could keep talking, but why not go to our guest who is truly, truly the perfect guest. We're going to be speaking with someone I wanted to speak with on the podcast for a very long time. Dan Yergin, he is, of course, the author of the Pulitzer Prize-winning The Prize, The Epic Quest for Oil, Money and Power. He's also Vice Chairman of S&P Global, and he also has a new book out called The New Map, Energy, Climate and the Clash of Nations. So a lot to talk about. Dan, thank you so much for coming on Odd Lots.

Daniel Yergin (3:19)

It's great to be on with you all.

Tracy Alloway (3:20)

So does it feel like energy and security is still with us in many forms?

Daniel Yergin (3:26)

Yes, it goes through cycles. You know, you mentioned COVID. I think during COVID, demand went down, prices went down, and people kind of forgot about energy. And there was a sense in 2021, the International Energy Agency did this scenario about getting to basically a renewable world by 2050 But now we're in 2025, going into 26, energy demand is going up, wind and solar, but also coal, oil and natural gas. And this share of hydrocarbons and energy has gone from about 81% to about 80.5% roughly.

Joe Weisenthal (4:01)

So it's going to take a while to get down to zero.

Daniel Yergin (4:03)

Take a while. You mentioned energy transition. I think it's time to do some rethinking about the energy transition.