>> i'm the program director of the miami book fair. miami book fair takes place in downtown miami on the campus of miami-dade college. we had a little over 525 authors representing every genre, everything that you can think of we are representing at miami book fair. >> joint booktv for the miami book fair live from miami-dade college saturday and sunday november 18 and 19th on c-span2. >> good afternoon, everybody. welcome to the council on foreign relations. the book we're talking about today is called "windfall: how

the new energy abundance upends global politics and strengthens america's power." we have the author here of course, meghan o'sullivan. meghan is now a professor at the harvard kennedy school and once the global energy security project to bear. she was a special assistant to president george w. bush and deputy national security assistant for iraq and afghanistan, and spent some time as an advisor in iraq and has been working on this book for several years. time has changed while you been working often. maybe we'll start by just talking about how you decided and why you decided to write the book. >> let me just begin by saying good afternoon and thanks so much for spending your lunch hour with us, and a special thanks to dan for doing this. dan has been a source of advice, support and inspiration as i really moved into this world and

looking at this intersection between energy and politics, so thank you very much for that. my impetus for writing the book, i wouldn't go back directly to iraq but it's almost reflecting after my time in iraq as to how much the world needs to be understood both by wearing a foreign-policy lens and a lens to understand energy markets. so i can point back to specific moments during the time i was working in government whereas mostly looking at the picture from a foreign-policy perspective. a great example that i would like to give is just times when i traveled with secretary rice to meet saudi officials to try to convince them to be more supportive of baghdad. i tended to look at that -- >> did it work? >> potentially seems to be working up out but i can't taky credit for that. it was interesting, we saw a lot of the saudi resistance to the regime in baghdad or the

government in baghdad as being motivated by sectarian differences. clearly that was some of it but there's also an energy dimension which i don't think i didn't fully appreciate that at the time, 2007 high oil prices, the saudi and the only holders of spare capacity. they didn't have any rivals in the department. the iraqis were talking about becoming challengers to the saudis, talking about pumping 12 million barrels a day eventually and holding spare capacity. from that i learned you really need to look at events with a foreign-policy lens and an understanding of energy markets and technology. >> by that point, at that point there was no energy windfall. >> it was a different world. >> that was not peak demand. what do you mean by the windfall? this is her book. >> thank you. i mean windfall, i i want to cl

the book originally serendipity, and that -- >> it's hard to spell. >> apparently not a lot of people at the time at schuster like that name. the whole idea is this is bit of an unexpected gain or been for the united states. it begins from the premise that over the last ten years, as dan just mentioned, we had moved from the world that was informed by this sphere of energy scarcity to a reality of energy abundance. contrary to many expectations this energy abundance has not exclusively but being largely fueled by increases in production in oil and natural gas. so the windfall element is that it's somewhat of a surprise and it's a huge strategic boom, the challenge i talk about indie book is understanding how this has reshaped global affairs, and as americans how we can take advantage of this moment to really maximize it. >> you say one of the things

that jumped out at the book is it's a partial antidote to the notion of systemic american decline. >> i think it gets at the reality a lot of americans have began to understand this linkage between energy and foreign-policy, but there still a lot of misunderstanding as what the benefits are. people are expecting energy independence, expecting liberation from middle eastern politics. my book tries to argue there are benefits, they are just more subtle and they require a better understanding of energy markets. and here i would say the antidote to american decline is a manifestation of how this energy bill and has been a source of soft power or the united states -- energy bill. ten years ago in the context of energy scarcity it was frequent. you would hear the chinese, russians talk about american decline. ten years later there's more of a debate in these countries, particularly in china.

>> do they think america is great now? >> we haven't yet convince them of that but they certainly say, there's a question mark, a lot of reasons for this but one of them is this energy been. it is underscore the power of american innovation and ingenuity. >> you've traveled an awful lot of countries to do this, talkedo an awful lot of people around the world. are you implying actually people within the united states have less of a recognition of the significance of this as you call windfall and other countries? >> then other countries? let me take the part about how americans understand or precede this. i do think that americans are not aware of the fact or becoming aware of the fact that energy is now an asset for the united states rather than a vulnerability. looking around the room there are many who have worked in government and we got used to working under the assumption our energy position was one of those enduring vulnerabilities. that has changed dramatically in

the last year. i still think there's a misunderstanding of what the strategic benefits are. i think people understand a bit more about this is good for jobs, , this can be good for the economy. i acknowledge that in the book but i also really try to underscore how this has changed the global strategic environment in a way that's good for the united states. >> i remember ben bernanke before the, before he left the fed said this whole children was one of those positive things that happen to use economy since the financial collapse. there are millions of jobs that flow from this. >> there have been millions of jobs. of course they have ebbed and flowed although that based on the price. we have seen when the price went down some of the places that were booming contracted a bit, but overall i use numbers in the book that say the benefits to the economy were even greater

than the supplemental that was passed to try to address the financial crisis in terms of sheer numbers. >> one of the prominent democratic candidates in 2016, not the one who got the nomination, -- >> guessing game. >> yes. want to stop all fracking which of course would stop fracking in conventional oil and gas. there is an assumption here that this windfall continues. did you think in the book about kind of weather there would be an effort to kind of bring it to a halt? >> sure. in fact, like many books, and i know you are sympathetic to this, this book went through many iterations. the first iteration was before the price collapse and most of the book focus on how we should anticipate a price collapse which is --

>> prosthetic. >> exactly. at one point i was writing it with more in mind with the idea that the challenge was in the political realm. and that there could be a political push that would lead to a severe restriction of fracking. my argument was trying to make people think about the cost benefit analysis in a way that incorporate strategic gains as well as economic ones. i think it would be a very significant reversal of american fortunes if we were to ban fracking. it's not to say there isn't a lawful regulations because there is because there are legitimate concerns about environmental -- >> and it is a highly regulated activity to begin with but one of the things i was struck with in your discussion which maybe is counterintuitive, you sort of advocated more state regulation, a balance between federal and

state that things shouldn't swing too much to the federal but should stay with the states. i think it's a little wonky but you might explain that. >> i can't -- that i can't be wonky with this crowd then who can i be walking with? one of the questions is not sure that the fracking are no fracking, it's what's the right level of regulation? there will be a debate about this but one of the sub debates is who should be the right, who are the right regulators. there are certain issues that may be make more sense to regulate on a federal level if they have crossed the border implications, maybe methane emissions is one of them. there are other issues that make more sense to be regulated at the state level of funguses capacity. because a lot of the effects, we're not looking at the potential of a chernobyl or something people looking at a lot of local risks, local effects and local communities may be best positioned or

state-level officials best position to regular and figure out what the right level of risk is for that state or community. >> let's now turn to the broader geopolitics. if you had a peoples, wars in the mideast, venezuela teetering on collapse, et cetera, et cetera, all this conflict with russia, geopolitics is not affecting the price. >> it's interesting. in the context of writing this book, again before the price collapse i had an acquaintance of mine say was leaving the energy trading business because it had gotten so i'm interesting because geopolitics have become divorced from energy markets. this was after the arab spring where you had the most volatile politics in the region in decades but the price was not affected by. there was this sense these two things had decoupled. i don't think they had decoupled. the issue is the world has a lot more excess supply.

it is able to absorb shocks better than it would've otherwise. that doesn't geopolitics will not still be a big issue and that it could affect price. in fact, i would anticipate, ap look at libya and venezuela together, these are two geopolitical uncertain moments that could well end up in a significant restriction of global supply that could affect price. i don't expect that you would write off geopolitics and i'm not going to write up geopolitics. >> to get more specific on geopolitics, how fast this windfall in your view changed u.s. relations and interest with the mideast? >> here's where my answer tends to disappoint a lot of people. because of course there's a desire on the part of many americans and myself included, elliott i'm sure included, many of us who worked on the middle

east that we would like to have more distance from the problems of the middle east and the sense if we're not importing a lot of middle eastern oil that will give us the opportunity to somewhat disengage. here again going back to my first answers to your question, if we look at the world not only wearing a foreign-policy lens but also an energy market lens, it's much harder to make that argument. we are not energy independent and we probably won't be in most scenarios and, therefore, we are tied to the global market and so saudi arabia, iran, iraq all of these countries. if something happens in middle east that's going to affect global supply, global prices and that will affect americans because the price we pay at the pump is determined internationally. that said i don't think it means nothing changes in the relationship. this this is a crowd that can ry understand this. if you are preparing a president or a senior official to go into a meeting with his or her

counterpart, there's only a a certain number think you can talk about. it's not a dozen, it's more like two or three. for saudi arabia in many countries in the middle east oil was always high on the list. now it doesn't need to be high on the list. there's room in scope to talk about other things. so the nature of the relationship i think has changed. it's not dramatic but it's not insignificant. >> how do you find some of the key decision-makers? how do they see this windfall and change their view of the u.s. and our commitment to the region? >> it's a great question, and, of course, in many parts of the world i would say certainly in the middle east perception is reality. there has been a sense that america up until very recently with president trump's visit to saudi arabia has said america's been disengaging from the part

of the world and many senior people in the region would say and this must be because you don't need our oil anymore. i would say it does seem weird disengaging not because of oil but for other reasons and that i think is immaterial. i think there's a perception that we are less interested in the region even if a real cold analysis of the facts would suggest we still have a lot of intertwined interest. it is informing those relationships. in the way a country like china looks her involvement in the middle east and it makes the chinese alone nervous and maybe we will be less invested in that part of the world which they are becoming more dependent upon. >> what did you say to decision-makers to express these concerns? >> i generally will walk out as you say. i will say we still have a lot of energy interest in common but we also have a whole raft of not

energy interests which you and is a very the money with. i think the rally, the bottom line is that we are going to continue to be interested and invested in the middle east for a long time to come. >> another thing somewhat counter counterintuitive, you say said that she'll revolution could make the mideast more important to the source of oil. i think people find it quite interesting. >> and again this is the value of look at foreign-policy and energy markets together. the assumption is there are many scenarios that could play out and i see mark findley and others here who could talk to us about the different projections about how energy markets could look in the future, and say we're in a world where there is a low price for a very long. of time. most people say that would be bad for the middle east. well, , it could be that in some ways but the reality is in that environment a lot of higher cost

producers outside of the gulf could no longer decide to produce. it's not commercial for them to produce and it would mean more of the oil the world is consuming would come from the middle east. you could find as in a situation of long-term low-price situation where the middle east has more influence than it does right now on global politics. >> let's focus on one country in the middle east. in your view, would the sanctions on iran that got into the table negotiating the nuclear deal, this blend your previous book on sanctions come with the sanctions have worked without shale oil? >> i i think this is a really interesting story, and i do think that the situation in the united states, an increase in oil production because of fracking really help create and in private which made it easier to secure the sanctions.

the look at the history of sanctions and oil-producing countries, it's not a coincidence most of the time the sanctions put in place in a low-price environment where people feel like if the oil comes off like it's no big you because the price is low. but the obama administration was able to get support for any high-priced environment, and they did that by going around the world and talking to various government officials and are able to make the case. one, the saudi set said they will step in if the iranian oil comes off the market, and two, look at the american energy sector. every year i think for the last several years at the time they were promoting the sanctions, america has produced another 1 million barrels of oil a day adding to the global market. that really eased some of the fears that would normally be in place when you're trying to talk about taking significant quantities of oil off the global

market at a time when the markets seem to be tight, the prices were high in the global economic recovery was very fragile. if you talk to tom donilon who said this on the record on a number of occasions, and he was talking sanctions a lot of his economic counterparts in the white house were saying keep in mind we have fragile economic situation. >> you mentioned sanctions on oil-producing countries. most recently the news sanctions are on russia. how do you evaluate those sanctions? they were unusual in some ways in which the balance shifted to the legislature out to the executive. >> sure. these were controversial sanctions, and for the reason many of the people in the criminal remember they were a big departure from most sanctions legislation and that they took the prerogative virtually away from the executive branch for lifting the

sanctions and gave it back to congress. this undermines the -- >> explain how they took it back, the authority. >> okay. so basically usually there something called a waiver. and almost pieces of legislation. ten years ago there were members in congress to pass legislation to make it mandatory to include this waiver. that basically, the executive branch, either the president or the secretary of state has had leeway to simply say at this particular moment i'm going to wave the sanctions because and not in the national security interests. that is been very broadly defined. president clinton has used waivers when he was saying this is going to upset our relationships with europeans. president bush used waivers. this is been a very broad authority. this piece of legislation basically said before waiver could be used, congress has right to act on it or has the

requirement to act on whether or not the sanction can be lifted. my problem with this is one of kind of a generic problem with sanctions, that we think about sanctions as maybe trying to maximize economic impact that has on a country but there's also another use for sanctions. that is to try to create an environment in which a negotiation can happen. in that environment you want the negotiator, whoever the person is that is in charge of that relationship, to have the ability to say if you do x i can do why for you. this is been effective in other circumstances. it was important and iran deal, going back in time. it was important in the normalization of relations between u.s. and vietnam. essentially this piece of legislation takes that away and it means it will be harder to actually engage in russia at any

point in the future for some kind of short of the capitulation kind of deal. >> you can say sanctions worked on iran. are they working on russia? >> i think it depends on what you mean why working. if you meet as a change russian behavior, i does he evidence of that. so in that regard i i would say they haven't had the desired effect, but if you say the objective is punitive in some way, there's been some punitive effect of the sanctions. i think it's not just now, although there has been an effect on the ability of companies to get financing and the type of thing, but also an effect on russian energy production in the future. as you well know a lot of the sanctions have to do with technologies that russia needs to develop a lot of its unconventional energy, which is a part of their supply now that might be part of their supply in

the future. >> used the term windfall. you refer to as a strategic boon. other people have different describing the change in use energy position. they call it energy dominance. what's your reaction to the concept of energy dominance. >> with i should learn from you. you never mention anyone in particular, just a general reference. energy dominance -- >> i was at the administration. >> i think that's clear. energy dominance, i think in some ways i think the trump administration as a mention is right to acknowledge this is an asset, and to think about energy as a strategic tool. but i think there's some problems with the way this concept has been developed. i don't even like the sense of it because it sounds aggressive and it sounds like a zero-sum game. my real issues are twofold. the first is quite simple, that

the focus has been i think largely on fossil fuels and increasing production of fossil fuels. in my mind that's appropriate under the right conditions, but in today's world there's just no denying it that energy superiority or energy problems, whatever you want to use as the terminology needs to include other forms of energy as well. we are seeing the last week that china has been talking about putting a date certain that which it will stop selling cars that use petroleum. this has something to do with the environment but i think china realizes there's strategic benefits to being a leader in these renewable energy technologies. we risk losing that. however, my real critique of energy dominance is we can't focus, this is a theme in the book, just on production, that if we are looking at trying to find a way to create a policy or

a strategy that maximizes this moment for the united states, it requires doing other things as well. not just looking at production but looking at, for instance, our non-energy foreign-policy in thinking about how that affects energy. our position on trade affects global energy demand which affects american energy exports to looking at our towards mexico. that policy would backfire and have implications. it also requires taking advantage of the strategic environment, the changes that have been made in a non-energy realm. this is open to possibilities for cooperating with shimek. i real strategy would take advantage of that. >> how has this changed u.s.-china relationship equation? then we want to talk about nafta, discussion with mexico and how this all fits in so let's take a china first. >> my argument is i'm aware that

china and the u.s., we are going to have a difficult relationship for the foreseeable future. i know this is the case, and so as i think policymakers and concerned citizens and everyone else should be looking for places where we have common cause and we can build little islands of cooperation in the hopes that those who build relationships that can possibly affect the rest of the relationship. there are many ways in this new energy environment i think creates those openings. just very quickly i would say, one, and i'm happy to expand on this if people are interested, one, , i think this energy abundant environment actually opens the space for china to be more comfortable in the current international order. i could talk about why that's the case. that's one of the big questions a lot of people in this room are concerned about, is china going to remake the order or can it

live within a? i think the energy abundance affects that the calculation wm happy to talk about. i also think it created a real opportunity to work on climate issues with china. that is one of the casualties of us potential or actual withdrawing from the paris accord, is simply that this was an area where we have common interests and we actually had credibility because of the shift in emissions to get in there, negotiate with china, come to an agreement and then catalyze the paris accord. that's the soft power thing. going back to the middle east, there's an opportunity for the u.s. and china to work more closely on that. the areas that are made outside of asia that would be useful -- >> and on mexico, how concerned are you about, i mean, how does energy fit into the kind of relations between u.s. and mexico now?

>> energy is, obviously a relationship with mexico has many, many facets. energy is an important one. it's often overlooked how integrated we are with mexico in terms of energy. i don't know how many americans know that mexico is the largest importer of american natural gas. that is likely to grow very significantly over the coming years if mexico continues its energy reforms. because their energy reforms are tied to their prospects for economic growth, which the mexicans have up until this point decided well, we have our own natural gas but we also could import natural gas from across the border. it's cheap, available. let's build pipelines and let's encourage that integration. they may decide that creates strategic vulnerability in this political climate. if we go to the negotiation of nafta, here i think there's huge

elements that could be lost if nafta is abrogated, in the sense that if you are working for international energy company in mexico city, you want a piece of an american equipment, it might take you, someone told me, 36 hours to get it from anywhere in america to mexico. this might be 36 days if you're in colombia and a mighty exponentially longer if you're in argentina. so that kind of seamless interaction is really beneficial to american companies, to natural gas and really oil production. and all of these things could be lost if we kind of had that and more confrontational road. >> meghan, one more question before we open it up to the audience. this is a sort of energy geopolitics mr. manchin to the

complex of issues with north korea? >> sure. it is interesting in this real difficult situation we find ourselves in where the options, none of the options are attractive. this understandable focus is on a diplomatic answer to this crisis. i'm skeptical but given the unattractiveness of a military option or the risks of the deterrent option i think it's the one to go for. there are a lot of parallels people are using saying we could have a iran surge on north korea, put sanctions in place and bring north korea to the table. energy is a big part of that sanctions back at even north korea is very, very small economy to the extent that it has links with the global economy, a lot of them are energy in nature, our coal exporters and oil importers.

.. influencing one individual as far as we know except there's a lot of interesting work being done about, maybe the north koreans could substitute for their oil with coal to liquid technology. this is expensive and we create problems >> and we don't know that they have any of that capability. >> the thought is they do have some of that capability and they certainly have enough coal they could do that, especially now that there coal exports are coming down. there's a report saying they could easily do it. i don't know that they could

easily do it and it would be expensive so there's an energy dimension that energy is not the answer here. >> let's open it up to discussion and we have two microphones in the room or maybe three and so ask dustin's . your name, affiliation and a question, not a speech.so go for it. there's several hands up there. do the microphones come to them or do they go to the microphones? >> thank you, dark mark finley with bt congratulations , i look forward to your reading. my question is, it seems to me that a lot of what drove this american windfall doesn't have so much to do with energy as it does with the above ground factors, the way of life, whether it's the financial markets, business systems, bankruptcy laws, whatever and i wonder do you see evidence around the world that countries are looking at

, looking through the lens of the energy revolution to say about the way of life, can we reform our political economic social systems to , and or you see evidence that us cost metrics are saying this is a lever in terms of our strategic advantage to promote these broader concepts . and using energy to, as the window into those broader questions? >> thanks for coming today. it's a great question and i would agree entirely with the premise that what happened in the us is not just about geology. a lot of it is about the institutional requirements. the financial markets, the google mess of small companies, all these things were critical in the energy outcome here. as we know, five years ago there were lots of countries that were very optimistic about their ability to replicate this and very, very

few have. in fact, only a couple other countries are producing in commercial quantities they are still more quantities so it has been hard for them to reproduce this. but the interesting bit, the geopolitical bit is what you get, how much has the us government bought? this issomething we might be able to use , to use as a entry point into conversations around the world. i talk about this in the book , that our state department in the earlier days of the boom really did try to respond to other countries that were interested. tell us how you wrote your loss, tell us what institutional factors made a difference. these programs went along not because there wasn't demand for them but there wasn't a lot of funding and my understanding was this listlessness in the obama

administration about promoting the development of these fossil fuels overseas where there were still environmental concerns so they did not reach their full potential. >> secretary clinton did have a global shale initiatives. >> she did and it could have been more than it was. and i think the potential is still there. going back to the idea of soft power, this is a way not only for america to help other countries, develop their own resources but if you have a seat at the table to talk about issues that are hard to talk about in other countries. you want to talk about transparency, rule of law, anticorruption and not sound like you're lecturing but if you're doing it in the context of helping a country understand here are some of the variables that are required to be successful, then i think you could have a qualitative different conversation. unfortunately and i'll end on this, it seems like the budget cuts in the state department would further degrade that capability rather than augment it. >> right here.

>> hi, joe serenity ono, fox. thank you very much for this terrific talk. could you unfold a little bit the issue of china and i believe their goal is 2040 when they want to phase out the production of combustion engine. what does that mean for energy abundance? >> must first say as assistant minister presented, there are other portions who said we disagree with you totally so i think -- could you unpack and not unfold? >> again, i told dan jumping at any moment because i know we'd like to hear his views on this as well. dan is right, it's still unclear where china is going to end up on this but it's interesting that this debate in china on calling an end to the sale of petroleum.

in the context of both britain and france this summer, actually saying 2040 is the date we are no longer going to sell these kinds of cars you have britain and france already making that as a policy initiative and then china, which obviously matters a lot more in terms of global energy markets and automobile markets, debating this. i think the significance there, there's a couple of things.one is what's driving this? i think in france and in britain there were environmental concernsdriving it. in china, especially the case that as i indicated it's also a recognition that china can really , there's a strategic advantage in being a leader on the technologies. just those signals, think about what those signals of britain, france and then potentially china. then getting that this is a kind of a finite gravy train.

that i think really does change the conversation. i said to a couple people today that i'm always interested when i go to saudi arabia questions people are asking me. 2014, everybody was asking what's the price for sale? everybody focused on that and that was critical and when i was last there not quite a year ago but all the questions were about electric . so the nature of the conversation has changed even if we don't know when that moment is going to come, there's an expectation thatit will come . and that in , in mindset will start to affect our decision-making and behaviors as well. >> any people in this audience own volvos? >> yes, there's a global decision. >> but there's that decision on chinese cars owned by chinese companies but the point that megan made, is not about leader in technology but it's being a leader in the global automobile market.

>> in the sense that perhaps with electric cars, they can leapfrog over the well-established and more advanced international competitors. >> volvo made the commitment by 2019 no more oil. >> that was misleading because they said it could be an electric car or it could be a hybrid. and my mind went to see the new volvo and on one charge you get 14 miles. >>. >> the lady is back but there are two ladies and in order we will go. >> stacy worden in the center for financial markets. and the road to national prosperity and economic growth i would say it is strewn with the dead bodies of oil-producing countries and nations throughout history. the from disease, corrupt until now. oil price volatility on banking centers, and i was wondering if you have a view on that with maybe a geopolitical patina, and ratner has written commodity

exporter rather than a capital exporter as a result of shale and other things. you have a way of thinking about that and a lesson for the us and other countries? >> we're still exporting boeing area. >>. >> on that though? >> two quick reactions, first on the us, i sometimes get questions from my students like is theus going to be subject to dutch disease, is this a new worry, is the resource going to apply to america? despite the fact that this is a large industry , that the american economy is still so complex and there's so many other sectors to it. that i'm not so much concerned that we are going to bear the same effects that

you have referenced in other parts of the world. however, i think that this story is still very much playing out in other parts of the world and one of the most interesting things to watch from this energy abundance is the effect that it had on both countries in saudi arabia. and so the reform efforts that we've seen conceptualized and begun to be implemented although their stalling, in saudi arabia in particular i think would have never happened without the shift in energy so it's not just that there's more energy on the market as i described in some detail in the book, it's that this shale oil for tied oil introduced a new business model. which has made it very hard for oil markets to work in the same way as they did before. though coming to terms with the fact that they don't just have tosurvive the load , but there's a totally different oil market world and so they still have time. they still have resources but the need for reform that they don't become one of these

bodies along the side of the road that you described is very, very real.and i think anyone who travels to the kingdom has the opportunity to meet with the crown prince or other people, you really get the sense that they understand that reform is imperative. if they're going to survive, which doesn't mean that it's inevitable, that it's going to be successful but there's a seriousness that maybe hasn't been there before. >> the radio lady). >>. >> thank you, barbara slayton from the atlantic council. to what extent did the shale oil revolution attract from our ability to develop renewables? was it a divergent that an environmental terms is going to be expensive? >>. >> i would say and is always jumping in the queue. i would say this is still an object in debate. >> there's the very obvious point that not so much oil but natural gas is an easy

substitute for renewables. >> as well as for cold. when we do the net net on the environmental side, we need to take the whole elements of the substitution into account so unquestionably in some cases we are renewables my fencing is more of a attractive. very very low natural gas. or the foreseeable future, that makes that less so. if you look at the statistics about renewable energy investment in the last few years. even in the context of very low natural gas prices, those numbers have still been quite high. there's subsidies and there's a lot of government policy in there we have to take into account but we can't really get points to a precipitate strong investment in renewable energy andattribute that to low-priced natural gas busbar. there's also , the way in which that natural gas at least for now is a complement

to a lot of renewables, because their intermittent energy sources. >> that last one is important, because of the intermittency, to make sure that there has been no precipitous drop in renewable investment. the subsidies and incentives that went in an effort in 2015 are very powerful, they continue to provide great incentives combined with state mandatory requirements for renewables. >> that marches on. >>. >> ice said down from bp. >> i want to go back to the incident on assets and liabilities. i touched on the dutch disease issue as well so i'll hundred percent agree that the shower revolution has fundamentally changed the us economy. it's a huge benefit to the economy and a huge liability as it's been a massive energy importer has been neutralized.

but the bid i'm struggling with that now gone out of the way is that's a huge asset. the us is still a net importer of energy. it is still one of the largest importers of oil in the world. it will carry on under most scenarios being an importer until the 2030s or so. so i understand why that liability has been neutralized but i'm not quite sure how this has become a big asset and how one can get to the world of energy dominance. >> are you speaking asset in the financial terms? or in strategic terms? >> more generalized. >> in a foreign policy context. now it's an asset and i understand the liability being neutralized but we remember the us is still a net importer of energy and it still will carry onand importing oil to many years to come . >> i was going to say, it's

true that our imports have gone from that 60 percent to 21 percent and half of those come from other countries in north america. is that a preamble to your answer? >> that's great, thanks for getting those statistics out there. i'm using the phrase, this gives me an opportunity to elaborate on a point i made before that i think it's fair to say that many of the foreign policy community look at this as great, do we have a foreign-policy cudgel? and we now use energy exports to force countries to punish our adversaries or aid our allies. and we saw a little bit of that when president trump went to poland and he talked about natural gas, being able to displace russia and in the exports to europe and i think people naturally are looking for something very tangible. and my argument is that the asset component of this is

more in the realm of changing the strategic environment. and augmenting american sources of hard and soft power. note that the asset. it is less of a sense that we can suddenly use exports to make others do things we want to do. there's more subtlety to the argument but my argument is that in effect that augmenting sources of hard and soft power and changing the environment in a variety of ways through markets actually has an appreciable benefit and puts america in a better position to on the whole, there's some liabilities that come with it but in a better position to advance its interests. >> so i'll put it on the side of the room. with one and then go down that side. >>. >> i was curious. so in terms of the analytics. it's true that the impact of the issue in the industry has

been faster than many of us expected and the impact on safe solar authorization has been slower. and we expected. >> best for the past few years. solar has declined faster in price than oil and gas. what do you think it's a hard question, but what do you think will happen over the next decade? >> this is a question i'm going to demand dan give his answer to. >> it is interesting if you read so many of the national intelligence, he comes out of these global trend reports every four or so years and if you read the 2008 national intelligence council report, it talks about this coming energy transition and how this could change global politics but it's all about

the renewable space and not about the oil and gas they swear these were already happening at that point. i think it'sright to put a big question mark around this . my sense is that there will still be technological advances. to affect the oil and gas revolution. so i wouldn't say that we are at the end of that at all, is there still some runway to be covered. so we could still expect technology to have some impact on our ability and the ability of others to produce more maybe for lower prices. will eventually come to ahalt . on the other side, there's some here and i don't know who attributes this, that technology moves much more slowly but then when it arrives, it happens much more quickly than you expect. i'm sorry? >> thank you. and so that's i think what we're all waiting for on the battery side, when is that

moment going to come? and if you told me in the next 10 years, that the speed of these relative sectors and the rate of technology and transforming them would switch, i would completely believe that. i think i could imagine that the next 10 years, if we were sitting here or we are sitting here in 10 years that we might be talking a lot about the geopolitics of renewable energy. and i started to look into that already because i think it's an interesting space. if you agree with the premise that the energy mix really affects global politics, if we are moving to a different kind of energy future as i think we inevitably are, then we should expect there will be a big change in global politics that will go with that and that is a really good area for investigation. again, >> whatever happens to federal spending in this area, i think there's a lot of momentum on renewable

alternative technologies. i just was doing a big study trying to understand the technology innovation pathways in the united states for the new technology, but i think it could be momentum there so i think it's sort of as to which goes faster, i don't know. obviously renewable solar has benefited greatly from overcapacity in china's manufacturing relations to local governments and is there any reason to think that will stop? i'm on the advisory board mit energy initiative and i once asked what are more people working on than anything else in solar? i think it's batteries, maybe i don't know. but i think there's enormous innovative efforts to continue and the funding that comes from government or not. >>. >> that's right. >> is, that's right.

the, there are a lot of incentives on electric cars, you look at norway. >> electric cars are virtual free. from the government if you get one, you have to pay for it. >> tesla, on the left. >> there's a reason for that. i gave some questions on the side. >> . >> maybe not. somebody, the lady there. oh okay. >> sherry goodman. will sil international center. thank you. the book is terrific and i you for your research. could you go from and one, question for both of you on packing a little more of the opportunity in the advanced energy economy as we move towards financially toward electrification of vehicles and cut and reach into the world in africa and india, emerged from energy poverty through different mechanisms and we've seen historically and maybe leapfrog into

certain renewable sectors. it also including nuclear, potential revival of a nuclear, what do you see for the emerging advanced energy markets . give us your vision. >> what you mean emerging advanced? >> the nuclear, geopolitics of both nuclear, and the renewable energy market. that you will see as you talked about comedy unexpectedly find ourselves in fossil energy dominance now. what but should we also be seeking a quest for energy dominance in other sectors? >> however you adopted energy dominance is our policy. >> the kinds of people to talk windfall. >> a strategic boon. >> strategic boon. >> on the renewable side, going back to what i started to talk about, i do think there will be geopolitical implications of this. i hope a small workshop on

this in berlin and mark and i invited mostly europeans and it was interesting. i sat here in the room and sometimes you feel like there's lots of resistance what you're saying and finally i kind of try to figure out, what's the resistance and people said why are you saying all these bad things about renewables? i said i'm not, i'm all for renewables but we have to assume that a change in the energy mix rings about in change in politics and some of it will be good and some of it will be bad. on the good side there's potential to alleviate energy poverty in big parts of the world that haven't invested in fossil fuels, in infrastructure already and will never do so because their potential to kind of leapfrog over that. that is definitely a net geopolitical benefit. but then we also need to think about okay, in a world in which we are relying a lot more on renewable energy,

arena, international renewable energy agency based in abu dhabi, but a global institution, they've done a scenario area i think it's 2050, they say 70 percent of the worldcould be run on renewable energy. that's interesting. that was kind of, let's take that scenario, what do global politics look like ? we have to think about what are the vulnerabilities of a global economy that is so electrified? there will be vulnerabilities so you mix that with cyber, a lot of these things will be even more important than they are today. and of course, it bears keeping in mind that because something is electrified doesn't necessarily mean it's better for the environment. think of your source of electricity. if it's cold, then it's worse for the environment. if it's naturalgas or renewables or nuclear, this

would be a beneficial for the environment . >> it's interesting to take that, to talk about 70 percent in 2050, about 82 percent of the global economy is i throw carbons so were that happen it wouldbe a shift . >> exactly. >> there's a question in front here. >> carolyn campbell, i'm a large private equity investor in emerging markets. my question relates to the united states and i have a question on the windfall, does the windfall that you are discussing extend to the united states rustbelt and you see in other areas where you have a natural gas bloom that there are related industries that develop, he exchanging producers, producers that can revive potential for industrial centers on the basis of achieved energy. do you think the windfall could have happened to the former rustbelt? >> let me jump in there.

yes, we look at carefully and even in new york state which in fracking, there are 50,000 jobs that derive and the rustbelt manufacturing, that came from these wholeloan supply chains . a lot of jobs in the midwest resulted from that. and we basically seen a doubling of capital investments in those states as a result of this so the supply chain side of it, that's where you got couple million jobs and that was not well received, not just jobs in the permanent basin, there was also jobs in ohio and michigan. >> just completely consistent with that is that it's not just jobs for production as dan was saying but also the lower natural gas price is a competitive edge of manufacturing you've seen a number of companies bring investments back home and this is true. we've seen some of that. we've seen some german buddies invest in the united states.

>> i think it's $125 billion at this point, new investments in manufacturing in the us. i think that's the last number as a result of the competitive energy prices that came from gas and as you say many european companies, even chinese companies invest in manufacturing. >> because of that input. >> i think it's the last question right there. >>. >> john adams, global lbd partnership, you haven't touched on coal so i was wondering if you could give us a few words on that, particularly whether it has a future at all as a transition fuel given the fact that foreign budgets may reduce in terms of renewables and is there anything on the technology horizon that could create an oxymoron in cold? >> i'm of the crowd that's

still waiting for this clean coal. what exactly is it and wouldn't it be a great thing but i haven't seen much evidence of it. you go to china and there's a lot of talk about clean coal but not a lot of evidence of it. >> in terms of what is the future of coal, i think it depends on what country are asking the question two. >> and that looking at the big economies of china and india, those are the places to watch to see if coal is going to be able to maintain its market share. we've already seen the percentage of energy needs in china which is maybe the most coal, i don't know if it's the most coal heavy but one of the large economies, somewhere like 64 percent of china's energy needs are met michael. has started to come down and there are huge incentives on the part of the chinese to continue to bring that down. just how large that number is suggests that coal is not being phased out around the world. there are still places, india

being one of them where there is a lot because they have such enormous energy gas. coal in the united states despite the efforts of the current administration, i wouldn'tsay there's a big future here because i think natural gas , we are looking at a future of you know, along future of low prices for natural gas and a variety of other factors which are going to continue to make it the preferred fuel but in other parts of the world it's still an open question . >> we covered a vast part of the world, a whole host of issues in which energy and geo-policy interact. i realize the only one we've left out is the question of us lng versus russian gas area we will have to leave that for next time. megan, thank you for writing this terrific book and thank you on behalf of everybody today for a discussion. >>.

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