Energy Impacts Podcast: S&P Global Vice Chairman Daniel Yergin, Author of 'The New Map'

In this insightful episode of the Energy Impacts podcast, David Blackmon sits down with renowned energy expert and author Dan Yergin to explore the evolving landscape of global energy. Yergin’s best-selling books include “The New Map,” “The Quest,” and “The Prize.”

In the fast moving 30-minute interview, Daniel and David unpack key takeaways from the recent CERAWeek conference, including the rising demand for electricity driven by AI and data centers, the U.S.'s growing influence in global LNG markets, and the strategic implications of rare earth mineral supply chains dominated by China.

Yergin also discusses the urgent need for infrastructure reform, the long timelines for mining and nuclear deployment, and why the energy transition may be more of an “energy addition.” From geopolitical tensions to copper shortages, this conversation provides a comprehensive look at the forces reshaping energy policy, markets, and global power dynamics.

Foreign Affairs “The Energy Transition Needs a Reality Check” op/ed by Yergin

Books by Daniel Yergin

CERAWeek Home Page

S&P Global Study on The Future of Copper

S&P Global Report on Chinese Control of Supply Chains

Highlights of the Podcast

00:01 - Introduction

01:21 - CERAweek Themes

03:43 - U.S. LNG as a Geopolitical Power

05:20 - Pipeline Infrastructure & U.S. Gas Abundance

07:26 - Strait of Hormuz & Geopolitical Stakes

09:16 - U.S. Global Energy Role Post-WWII

11:14 - Rare Earths & Mineral Security

13:33 - Copper Shortage: “Copper in the Age of AI”

15:21 - U.S. Permitting Crisis

18:00 - Grid Strain & Nuclear Outlook

20:33 - Solar & Wind Investment Timeline

22:19 - Crypto and Industrial Power Demand

23:46 - Ukraine War & NATO Shifts

25:42 - Defense Spending vs. Energy Transition

27:07 - Energy Transition: Reality vs. Aspirations

29:15 - Looking Ahead

[End]

Enjoy the show!

That is all.

Transcript:

Dan Yergin, on the Energy Impacts With David Blackmon

David Blackmon [00:00:14] Hey, welcome to Energy Impacts podcast with David Blackmon. I am your host, David Blackmon, and with me today is one of our favorite guests. I believe this will be our fourth interview on my podcast with Dan Yergin, who is vice chairman, of course, of S&P Global and author of some of the greatest books about energy and the geopolitical impacts of it, including the prize, the quest, and most recently, the new map. Dan, how are you today? It's so good to see you.

Daniel Yergin [00:00:46] Fine and glad to be back with you, David. Lots changed since we talked last.

David Blackmon [00:00:50] Oh man, it really has so much has changed. And, uh, you know, you, you just, of course conducted earlier this year, another extremely successful Ceraweek that, uh to me, of course is really the major event that kind of sets the stage of where energy is going, uh in the coming year. And, um, your agenda is always so amazing. I don't know how you guys put all that together. It's, it's, truly an astonishing event to me.

Daniel Yergin [00:01:21] Well, certainly. And I would say that it just shows how much the agenda has changed. I think back to it. Obviously, one of the really big things was AI and energy. And we had the big tech companies there and they were there not as suppliers of technology to the energy industries, but rather as customers for energy, because that's so much on their minds. I Think a second big theme was natural gas and in particular, LNG. And this huge position the United States has of leadership in it. And third, it was, of course, a rollout for the Trump administration. The year before, we'd had the U.S. Energy Secretary under the Biden administration. Now we had the US Energy Secretary, Chris Wright, and we had the Interior Secretary, Doug Burgum. And of course as you well know, a very different message.

David Blackmon [00:02:11] A very different message in so much of their own personal energy invested into this. I don't think we've ever had an energy secretary quite as energetic personally as Chris.

Daniel Yergin [00:02:23] And also, and also one who comes from the energy industry. I was, you know, his own story, he'd gone to MIT to study fusion. Then he went to University of California at Berkeley to study solar energy. And then he was a very key player in terms of, of the development of shale and hydraulic fracturing, otherwise known as fracking. So he brings an experience to the job that, you No, he didn't. He didn't have to go up any learning curves.

David Blackmon [00:02:53] He certainly didn't, and he has such a wide-ranging background in it. As you mentioned, he went to MIT to study fusion. He's a huge proponent of nuclear energy, and I know they've taken a lot of steps already to try to jump-start, kick-start that industry that's had so many problems for 40 years in our country, get it growing again. And that's a.

Daniel Yergin [00:03:17] Of course, a huge task. He told me that, like when he was a high school sophomore, he was reading a book on, I guess it was on nuclear technology. And I asked him why he was doing that. And he said, oh, it was to meet girls. But I think he was joking. I don't think that's a social life as a sophomore in high school.

David Blackmon [00:03:43] Well, you mentioned, uh, let's talk about LNG first, because you mentioned it upfront. Um, we do have a very predominant position now in the United States that's come about all in the last 10 years or so, basically, uh thanks to a law, some, some changes in our laws here in the U S enabling that industry. And, uh. Uh, it's just such a geopolitical asset for our country. Isn't it? I mean, we can just exert so much in global.

Daniel Yergin [00:04:14] It's extraordinary. Here's an industry that didn't exist 10 years ago. It's now, people said, oh, it's just the energy industry. Well, it is about 300,000 jobs so far in the country. It is turned into a major export industry with the largest export industry. And we did our recent study on LNG. As we're finishing, I said, well, how big is this compared to other industries? US LNG exports are equivalent in value to half of all of US semiconductors. Greater than soya beans, which we export to China. And here's the killer, it's twice the value of all of Hollywood and television and entertainment exports. So it's a big business, economically significant, impact spread across the country. But as you said, it's also very important geopolitically.

David Blackmon [00:05:02] Do we have a, you know, I constantly get feedback from people worrying about all these exports of our natural gas that are gonna raise prices here at home and costs on consumers. I mean, has that done, does that happen to this point? It's a big, big industry now.

Daniel Yergin [00:05:20] No. I think the constraint is on pipeline capacity. If we can solve that problem, get the pipelines built, the US is very abundant in terms of gas and you sort of see the industry somewhat shifting a little bit more towards gas because that's going to be a growth area the need is going to be there. We're slated to add a lot more capacity that will take gas, but it will take those pipelines. And as to your point, David, we've certainly seen the geopolitical significance most dramatically in terms of Europe. When Putin, you know, in You know, in the new map, I have that section where Putin is at a conference, started shouting at me because I mentioned Shale instead of Barbaric. And he was prescient because he saw Shale would challenge the position of Russian gas, Gazprom, it would increase, as you say, US influence in the world. And it did so dramatically when he cut off the gas to Ukraine, not to Ukraine to Europe in order to break the coalition support in Ukraine. And LNG. Filled much of the gap, and half of the LNG that went to Europe came from the United States. If we hadn't had the shale revolution... Putin might have prevailed.

David Blackmon [00:06:44] And it's also created, it was so interesting to me in the dust-up, the recent conflict between Israel and Iran. You know, forever we have worried about the Strait of Hormuz in terms of free flow of oil. And now, because Qatar is such a big LNG exporter. You know we also have this consideration about the world being concerned about the free flow of LNG through the Straight of Horemuz and that's just been added, you know, it's just an added dynamic. And that helps illustrate just how vital, you know, avoiding major conflicts in that part of the world really is to everyone, not just in the Middle East, right?

Daniel Yergin [00:07:26] Well, it is, what is it, about 20 million barrels a day go through the Strait of Hormuz. And of course, a significant amount of LNG from Qatar, which is the other major supplier. And there was a lot of concern, would the Iranians do it? But of course if the Iranian had disrupted the Streat of Horemuz, three things would have happened. One, they would have lost a million and a half barrels a days of exports. Two, the U.S. Navy has been training for this for decades. Three, it probably would have involved retaliation on their export facilities. And then there's a fourth factor, which is the biggest. You know, who's the most dependent on the Strait of Hormuz? Not the United States. Shales changed that. Shales transformed the geopolitics of global energy. It's China. China gets five million barrels a day, roughly, coming through the Straight of Horemuz. Disruption, it would have been very disruptive of the Chinese economy. And we are led to understand that China has a degree of influence over Iran.

David Blackmon [00:08:27] Right. And so from a geopolitical perspective, you know, this also raises the question, you know, the United States, it's the end of World War II and the Marshall Plan and all the agreements made after World War Two. You know, at that time, we agreed to be kind of the policeman of the world to ensure free flow of the shipping lanes. And now there's this rising, I don't want to say it's momentum, but it's got has to be a rising concern in China. How long is the U S going to really be interested in, in retaining that role? Uh, where the middle East is concerned because it's not as big as security concern for us as it is for them. You see that equation changing anytime.

Daniel Yergin [00:09:16] Out there. In the past, we might have looked towards U.S.-Chinese cooperation, and I think a few years ago, the U. S. And China, among others, were cooperating and dealing with the pirates in that region. But it's very hard to see that happening in the future, although I mean, it's interesting. If you include natural gas liquids we export, our exports are twice the volume overall liquids. Of Russia and Saudi Arabia combined, so it's huge, but we export a lot and then we import to balance because of our refining system. But even if there was a disruption, even given our current position where we are essentially energy independent on a net basis, if you had a change in the market, a disruption those prices would be felt by American motorists just as they would be found everywhere else in the world because it's still a global market.

David Blackmon [00:10:17] Well, you mentioned China, and of course, China is a big player in anything related to energy these days and most prominently in controlled supply chains where energy minerals are concerned and rare earth minerals. And of course they've implemented increased controls. There was a great blog at the S&P Global site last month about all of this. Talked about how those increased controls have really created some security problems here in the U S and other countries because of how much they've diminished the flow of rare earths to our country and others. Do you think the recent trade deal that was announced by Secretary Besant between the U.S. And China, is that going to significantly relieve

Daniel Yergin [00:11:14] Well, I mean, the specific problem of Rare Earths is a real problem. You know, when you hear a CEO of a major industrial company saying, we only have a week and a half supply. This problem was telegraphed in 2010 when China wanted to punish Japan and cut off the supply temporarily. But I think it's this example where people talked about it but were really asleep about doing anything about it. And the production is environmentally, at least in China, has a heavy environmental footprint and so people aren't. Is, you know, that keen to do it elsewhere, at least, and it's more expensive. And then they have the processing, which is really very critical. That's where China's real grip on everything is on the processing. And so this is an issue and it can't be solved in one or two years. But I think it's a key part of the negotiations. And of course, these negotiations are continuing, maybe day by day, when he hears that the Chinese are still being putting a lot of regulatory burdens on exports. They talk about dual use. We talked about dual use. We do want to send ships to them for their commercial sector that would also be used in the military. They flipped on the side and said, well, dual use, we don't want these being used by your military. Well, there's not much choice there actually, if you're building these airplanes. So that's a very critical part of the trade negotiations that maybe hadn't been clear when people were looking at US-China trade a couple of years ago. And there's a larger issue. Right now, the biggest research project I'm involved in right now is about copper, called Copper E-AI. And we did that copper study a couple years ago that we talked about in 2022, the demand is going to be so much greater. And I think the world is not prepared for the scale of the demand in order to meet these ambitions around AI, around defense, around energy transition, and then traditional. So I think it's a really critical that to focus in, as you're saying, on these minerals and what do you do to assure that you have the supply to keep your economy running.

David Blackmon [00:13:33] Yeah, and S&P Global, for people who don't understand, they put out so much great information, so many good studies two years ago. S&p put out a wonderful study identifying the copper issue as something the world's not prepared for. And so here we are two years later.

Daniel Yergin [00:13:52] And I would say, David, we're even more unprepared because since we did that study, you've had the explosion of data centers, AI, looking US electricity demand now is about 4% data centers. You see it going to 10% in five years. That's a lot of copper and it's elsewhere too. And so, as I say, really trying to pull together and understanding of where we are today. Building upon the study we did in 2022.

David Blackmon [00:14:25] So will there be a subsequent piece coming out later?

Daniel Yergin [00:14:31] Copper, we call it a copper in the age of AI and our aim is to have the report done by November.

David Blackmon [00:14:37] Fantastic. I really look forward to that.

Daniel Yergin [00:14:39] So we'll come back and talk about it then.

David Blackmon [00:14:41] Yeah, absolutely. Let's plan on that. So the Biden administration talked about it. The Trump administration is currently talking about the need to free our supply chains of these minerals from China. I mean, you have talked, I know, and you and I have talked about this before, doing that requires getting back into mining. It requires building the capability to process these minerals, won't you mind them? Manufacturing issues, you have to build a manufacturing base to make the magnets and other products that are made from them. I mean, this is like a 20 year project, isn't it?

Daniel Yergin [00:15:21] Right. I think that's right. If you're a company and you're going to commit several billion dollars to build a new smelting capacity and you think you can get it permitted and built in a reasonable period of time, it's still a multi-year process and you are making a bet. And mining, oil and gas, not shale, but offshore oil might have a five-year time horizon. We did this work And on average around the world. It takes 16 years from discovery to first production of a new mine. And at least so far in the United States, it takes 29 years. Oh, my gosh. I mean, you start and then your career is over. You're thinking about retirement at that point. Yeah. Yeah. That's crazy. That is an entire career. Yeah. So I think there's been, you know, this goes back was in the Biden administration goes back to the first Trump administration trying to reform the permitting process in the United States. And it's not only permitting, it's the subsequent judicial review that goes on and on. There's some great projects in the United States that have just, you know, instead of mining ore, what they do is mine legal briefs to to, you you know, that's the activity.

David Blackmon [00:16:41] Well, yeah, I wrote a piece last year about the Transwest transmission project from Wyoming to California, taking power generated by wind projects in Wyoming to the west coast. It took 17 years just to get the permits in place, and then it's going to take another four years to build it. I mean, people don't understand. And that's a wind, that's transmission for wind power that the environmental community was holding up. So it's an enormous problem. And I just, uh, I don't, it just, I know the Trump administration has good intentions, but I just kind of wonder, you know, how much progress they're really going to be able to make in just four years, and then you have another administration and who knows.

Daniel Yergin [00:17:27] Well, it depends on where they are exactly that, you know, that's why the you know the Chinese, it's clear that the Chinese look at us at the US as a disorderly society. And, you know, I remember some years ago, somebody talking about China time, how quickly you can get things built in China. And even I even to see roadworks in Washington, DC that go on for. Years that you realize in China would probably be done in weeks.

David Blackmon [00:18:00] And this of course has all sorts of implications for nuclear as well, because you mentioned the data centers and AI and the proliferation of all that in these companies. I think there's kind of a general consensus being formed that they're probably gonna need natural gas generation in the short term behind the meter generation and then in the longer term, nuclear. I believe that longer term. You know, I think they're thinking five to 10 years. It seems to me it's going to be more like 15 to 20.

Daniel Yergin [00:18:31] Well, that is a lot of discussion as to whether you're talking mid-late 30s or before that. At Cira Week, we had the CEO of a company called Commonwealth Fusion that came out of MIT and the CEO Dominion Power, which is Virginian. Virginia has more data center demand than the next five states combined, so they're very concerned about electricity. And Glenn Youngkin, the governor of Virginia, flew in for the conference, too. And they were talking about first fusion 400 megawatts up by 2032. But I think even with all the discussion about small nuclear reactors, small modular reactors, there's a recognition that the first ones are probably not installed until about 2030. And the rollout, you're talking about a rollout that would, as you're suggesting, would be over a decade, not, you know, not in a matter of a couple of years.

David Blackmon [00:19:34] Yeah, it's a real conundrum because I mean, the strains on the grids for the, you know, so much of these companies are going to want to obtain power from the local grid. And we already have so many power grids across the country that are already a little constrained with problems getting worse. And now you have these policies now and the big beautiful bill that are going take away the subsidies for wind and solar gradually over time and. Know here in Texas the proliferation of solar here in the last five years has really helped with the grid ability to get through periods of high demand uh at least to some extent and so I kind of wonder and I wonder what you see if if these new policies really do constrain the growth of solar and wind what are the implications for the grid and the stability of the grids

Daniel Yergin [00:20:33] The grid needs baseload power and it needs dispatchable power to balance it. I think you had that blackout that shut down Spain and Portugal, and that bears careful analysis. The Prime Minister of Spain went out of his way to say, oh, it had nothing to do with the changes they've made in their power system, but probably does. Wind and solar That's still a lot of the new capacity that's going to come in is wind and solar. Obviously, people will be rushing to get it done so they can get the tax credits. The economics will be more challenging. States will still demand it and utilities will still have in their planning. But we've also seen, you know, at CeraWeek, one of the turbine suppliers. Set in 2022. The total market was one, and he said that that was an hour, so our market share was zero. Now the major turbine producers, manufacturers are all basically booked out to around 2030, because there is this rush now to get more gas into the system to meet this demand growth, because we've been accustomed to flat demand for about 20 years, and suddenly it's growing again. And that's a change in mentality, to change in investment, to change in regulation, and it's kind of playing catch up. I mean, I saw in Texas that the electricity use of crypto for cryptocurrency exceeds the electricity demand of Austin. Yes. So it's down to AI. We didn't even mention crypto.

David Blackmon [00:22:19] And crypto, you know, is actually in Texas, been something of a growth industry. Absolutely. You know, there's a lot of reasons for that, a friendly policy environment.

Daniel Yergin [00:22:28] One of the things I remember Bill Gates at our conference was saying that the great ideas and technologies and breakthroughs may be developed in the East Coast and the West Coast, but if you want to build something, go to Texas.

David Blackmon [00:22:47] Well, that's, uh, you know, it's, and it's been the case for a while. I hope the state can maintain that. Uh, there's a lot of pressure, you know, from, from parts of our state to, to be a heavier regulating state. And uh... Has a potential for killing a golden goose there. I want to just also ask you, you did, you were so prophetic about what's happening in Russia and Ukraine in, in the new map. And of course we now have a different administration that has taken a somewhat different posture towards that conflict, the president has tried to engage Putin. Negotiations, but Putin doesn't even appear to be willing to engage in a serious negotiation for a settlement. Where do you see that going? I mean, what are the implications of his unwillingness to even talk?

Daniel Yergin [00:23:46] David, let me just ask you, were you picking up that ring? Oh, no. We had a ring, you didn't hear it, okay. Oh, No. Okay, okay, the phone was ringing. So I'll just go from where your question ended. It's a day-by-day issue. I mean, what we see now that President Trump seems to become very exasperated with Putin, and he's been explicit about it and realizes he's playing him along. It's turned into like a World War I situation in one way with trench warfare inch by inch, but also with all these new technologies. And it's been a testing ground for drone warfare and that a whole different pattern and everybody's going to be studying, including the Chinese, about how this war is gone. So it's kind of been a stalemate. What's critical is will Ukraine get the weapons to resist Russia because Putin thinks time is on his side. All he has to do is wear down Ukraine and that the West will change its mind. But he's had the opposite effect. He's expanded NATO. He now has a whole new border with Finland. Europe is now talking about going to 5% of GDP on defense. This is not necessarily what he expected to see. But right now, it's a stalemate as of today, as we're speaking. It seems that Russia is kind of grinding away forward, but let's see if Ukraine gets the weapons it needs. But we've heard that Europeans and the Germans very strong about support.

David Blackmon [00:25:31] I wonder how serious this 5% of GDP really is. I know in some of the countries, they're including a lot of things that really don't have anything to do with.

Daniel Yergin [00:25:42] Well, yeah, they'll certainly agree that. But one of the things we did this article a couple of months ago, I don't know if you saw it, it was in Foreign Affairs called the Troubled Energy Transition. And one of things we talked about the cost of the energy transition as conceptualized by the last administration, as conceptualize by the European Commission today. And in terms of upset. Can afford to continue to have its single-minded focus on energy transition when A, it's gonna have increased defense spending and B, this new emphasis on being competitive so they're not left behind. And will they have to rearrange their priorities if they're going to achieve what they're talking about? Whether they get to 5% or how it's defined, that time will tell. But it's certainly a very different thing from being at 1.5 or 1%

David Blackmon [00:26:39] Oh yes, for sure. You know, and of course, you know, the conventional wisdom about Trump was he wanted to get rid of NATO and now suddenly it's stronger than it's ever been.

Daniel Yergin [00:26:49] Well, look at, I mean, in effect, what they said in the last, look at the impact he's had in effect strengthening NATO by strengthening the commitment.

David Blackmon [00:26:57] Yeah, exactly. So last question, and then I'll let you go. Where are we with the energy transition? Is there actually going to be a transition in our time?

Daniel Yergin [00:27:07] Well, I think that's what we attempted to answer in this Troubled Energy Transition article, and said rather than just think about a linear energy transition with a line on a graph, the kind of thinking that occurred during COVID, let's look at the post-COVID world where demand is going up. The newest statistical review of world energy just came out few days ago and it shows. Everything is increasing. Yes. Yes, wind and solar, but so is oil, gas, and coal. And it's energy addition rather than energy transition. So in this article we went through, said, okay, we've had the experience the last couple of years. What does it tell us? Tells us there's not going to be the kind of transition, smooth transition that had been predicted. And, you know, all you needed was more ambition. It's going to be multi-dimensional. It is going to unfold in different regions at different paces with different technologies and different mix of technologies. And with different priorities. We just had our Energy Asia Conference in Malaysia, kind of Asia, and the perspective there is really different. The number that really stuck out to me is over 20 years, European electricity demand is flat. In the Southeast Asian countries, it's tripled. So economic growth, affordability, energy security, those are all important things. And what you talked about before, David, about minerals. The constraints on minerals and the fact that that gets you into what we were just talking. The China issues, the data center issues, that means that I think the kind of concept of the energy transition that was kind of out there is really in a process that needs to be rethought, needs to catch up with reality.

David Blackmon [00:28:58] So we when we come back in November after that next copper report comes out to assess where we are then. But until then, I'm gonna let you go. We've already gone a little over. I really appreciate it. It's always so wonderful to have these conversations with you.

Daniel Yergin [00:29:15] Well, it's great to talk with you, David, and it enables us to touch on a lot of the really key issues. So, yeah, let's get together in November again. And, you know, there'll be a lot of things that will have happened by then, by late November, and we will reassess. But by then we will have finished Copper in the Age of AI, which is really our big initiative right now. So, great to be together and talk to you in several, in next November.

David Blackmon [00:29:43] Well, absolutely. And we'll make a point of doing that. I really appreciate it. And then hang on after we end this, I want to talk to you offline for just a second.

Daniel Yergin [00:29:51] Sure.

David Blackmon [00:29:52] That's all for today. I'm David Blackmon. Thank you for joining us and we'll see you again soon.

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