How the Iran war will reshape the future of energy

Have you ever wondered what businesses are doing and should be doing to tackle climate change? Then check out the award-winning and chart-topping podcast, Climate Rising, produced by Harvard Business School and hosted by me, Professor Mike Toffel. Recently named one of the best environmental podcasts by earth.org, Climate Rising shares a behind-the-scenes look at how some of the world's top entrepreneurs and business leaders are addressing climate change, from climate storytelling and marketing to AI, regenerative agriculture and beyond. Don't miss out, follow and listen to Climate Rising wherever you get your podcasts. Hi, it's Akshath. There is now a ceasefire agreement between US, Israel and Iran for two weeks starting Tuesday. This week's episode, which was recorded before the ceasefire announcement, looks at the long-term impacts that the war will likely have on the energy system. Even if traffic of oil and gas ships from the state of Hormuzri starts, the effect on energy markets and policies will play out over months and years. Welcome to Zero, I'm Akshath Rati. This week, the big energy pivot. When the US and Israel attacked Iran on February 28th, energy markets panicked, but not a lot. There was an expectation that even though Iran was attacking ships in the Persian Gulf and had effectively stopped traffic in the state of Hormuz, that things will calm down and the ships carrying 20% of the world's oil and gas will be back on the job. Thousands of people have been killed and dozens of ships have been attacked. When I wrote climate capitalism, which documented the solutions the world has deployed at scale, two cut emissions, the story typically had two major pivot points. The oil crises of the 1970s and the Paris Agreement of 2015. If a book about climate solutions is written in 2050, I think there will be a third pivot point, the energy crises of the 2020s. So today, I want to look at the kinds of long-term changes that happen from energy shocks. The 1973 and 1979 oil crises happened in short succession. It mostly affected rich countries that were prodigious consumers of imported oil from the Middle East. Those countries shifted their consumption of oil in power plants to natural gas and nuclear. Major oil companies launched solar businesses and invested in energy research, which led to the invention of the lithium ion battery and the international energy agency was born, creating the strategic petroleum reserve to try and avoid such price shocks. There were also a slew of energy efficiency measures that were taken, including the Americans buying more efficient Japanese cars. The 2022 energy shock hit Europe the most. But many gas importing countries also recalled a sky high prices of natural gas. The current shock is much bigger. It's both oil and gas and it is bigger for countries in Asia and Oshania particularly. That means we are no doubt going to see long-term changes, say's Bloomberg opinion columnist David Fickling. I look forward to every column he writes, and right now particularly his view on how the Asian energy market is going to evolve is very useful. I hope you enjoyed this broad-ranging conversation. David, welcome back to zero. Hey, thank you. So let's start in your home country to understand the myriad ways in which the closure of the state of Hormuz is having an impact on the energy world. Australia is one of the world's largest fossil fuel producers. So you would kind of hope maybe that Australia actually gets away more lightly in this energy shock than other countries. But Australia doesn't have much of its own oil. And so it really relies on imports and you wrote a column about the country's diesel imports and some of the numbers in there were really shocking. Therefore a country that is less than 30 million people, Australia is one of the biggest world's biggest importers of diesel. It consumes more diesel per capita than any other country in the world. 80% more diesel than US per capita which really does consume a lot of oil and it times as much as China. So why did Australia get hooked on diesel? It's fascinating. I was actually taking a long road trip. I had been Sydney and I was taking a road trip up to Brisbane which, funnily enough, was like my first long EV car trip. It's about 900 kilometers. It's nine hour drive. A lot of the time, the only other vehicles on the road with me are just these enormous, technically we don't call them road trains, we call them B doubles in Australia. It's a big truck with two trailers behind it. Further out in Australia it can be with three trailers behind them or even four trailers behind them. But these are immense diesel powered monsters. There's biggest you'll see sort of anywhere else and there's just a constant stream of them going up and down the coast and going on all the big intercity routes. And that's just a small part of the pitch that you have in Australia and I think part of it is really because of geography and the structure of the economy. In terms of geography, most journeys between major cities in Australia are best part of a thousand kilometers journey. So our rail system is quite underdeveloped and the distances are not very suitable for freight rail. So a lot of that gets done with diesel. Our economy is very dependent on mining and agriculture and mining machinery is all powered by diesel and agriculture, farming machinery is generally powered by diesel. So all of those contributed to the fact that as I say you know 7.7 barrels of diesel per person per year get used in Australia and it's sort of far more than any other country. Having said that I think there's a crucial factor that you need to add to that which is that we also subsidise diesel very heavily. It's one of the biggest spending programs that the government has. It's treated as essential to the economy because this is treated as a business input. If you're running a mine, one of your business inputs is diesel so this you get a rebate on what you spend. But the scale of it and the distortion of it is what makes it really striking. We spend more on the diesel rebate than we spend on the army on the Air Force. We spend almost as much on the diesel rebate as we spend on public education. You really get the sense of the importance of that when you start talking to people who are using a lot of diesel and on paper would like to reduce their use of diesel. All the mining companies they're obviously shying away from this now but a few years ago they were very seriously looking into decarbonisation and they were talking a lot about decarbonisation. But lots of fairly low hanging fruit that exists elsewhere just doesn't really happen very much in Australia. There's a lot of sort of talk about tentatively having electric mining trucks and things like this but they essentially had some studies of this and most of them are not doing very much with this. You go to Chile, one of the biggest copper mines in the world, ColoCoAsi has overhead lines, a little bit like tram lines for hauling the ore out of the pit. And that's the standard way of doing it if you go to Brazil, S11D, part of the biggest iron ore mine in the world has a huge piece of electric mining equipment that mines and prices and crushes the ore inside the mine. And of course actually if you're a nerd about electric vehicles, of course the biggest electric vehicles ever built actually in Germany, they're not a very net zero activity there and some of these enormous lead night mines in Germany and they're all fully powered by electricity. So electric mining equipment is common elsewhere in the world, not in Australia. And I would argue part of the reason is that we subsidise diesel. So aggressively that it doesn't make sense for miners to switch. Those gold diggers in Germany are so enormous. I think they're like five story buildings that run on electric just essentially taking tons and tons of earth with just one single swipe. But the point you're making here is also one that I think we know but we don't really absorb which is just how much policy matters in shaping our choices, especially energy choices. Let me give you the example of UK's diesel problem. So around 2002 there is a policy brought in to encourage people to buy more diesel cars than petrol cars because at that time there was the assumption that diesel was cleaner than petrol. And so even though the total volume of cars in the UK diesel made up only 15-20% at that time because of the incentives that were given tax incentives that were given the sale of diesel cars really rocketed. And by 2015 more diesel cars were being sold than petrol cars. And of course we know diesel gate happened. So I can got caught in the scandal. We learned that actually it is not cleaner than petrol and then diesel car sales plummeted. But heavy goods vehicles, you know, UK doesn't have that much industry but there are a lot of trucks. They continue to run diesel and actually the consumption of diesel hasn't fallen off. And now because of the way the country has been reconfiguring its refineries etc, the UK is heavily dependent on importing diesel. About 60% of the diesel comes from the crude in the Middle East in some form or the other, director and director. And so these policy choices really have have a huge impact on the fuel. dependency that is created as a result. But talking through other examples in your part of the world where the diesel dependency is something that could really be walked away from, at least on the road vehicle level. I think the most striking thing is actually what we saw happening last year in China. And this is, I think, not talked about nearly enough, but there's enormous potential there. And that's the scale of the electrification of heavy trucks. I remember going back, I think it could be about eight years now, eight or nine years, when Elon Musk first unveiled the Tesla semi, the electric semi truck. I was very skeptical about that. I wrote about it at the time and I was very skeptical that the economics and the sort of battery weight elements of electrified truck were actually going to work very well. And I think I've been proved wrong about that. And we know that it took Tesla eight or nine years to actually have the semi on the road because it's only last month that of the first commercial semi has been put on the road. Indeed. China, of course, got there sooner. Well, yeah, China has got there so much sooner that actually in December, more than, I mean, the number is astonishing to me, more than half of the heavy duty trucks sold in China in December were electrified trucks. And this is the number that just really sort of defies belief to the eyes. I mean, again, I remember writing about two years ago, there was at that point, compressed natural gas was actually seen as the sort of the thing that would take over large scale truck. And I was saying, well, that's actually going to damage diesel demand in Chinese trucks. But then batteries have really come from nowhere and saw this huge surge towards the end of last year. And a thing that you have to bear in mind about a lot of this trucking is a lot of the companies that produce these electric trucks companies like Sanny Heavy and XC MG. They made a lot of money during China's construction boom. They were essentially their construction machinery companies and trucks are a sort of sideline. And of course, China's construction boom has comprehensively granted a halt. The amount of new floor space built in January and February this year, we've only got the sort of first two months of the year, but it's the lowest since 2002, which was just a couple of months after China joined the WCO. We're talking about a completely different China. Now, these companies were built for that market and they need a new market and electrified trucking could be that. But there is also diesel dependencies in developing countries where it is used for public transport. There are all these mini trucks running around in Africa that run on diesel. The Philippines, you've noted, has tried to switch to immobility, but it hasn't really worked. So what kind of policies would help developing countries to figure out how to cut their diesel dependency? With a lot of those developing countries, it's a very thorny problem that involves, I mean, I think it involves a lot of a sort of subsidy structure and it involves this sort of shift that you always know since development between sort of CAPEX and RPEX. RPEX is something that might be more expensive if you're in the long term, but it's easy to do because you don't need low money on hand to do it. You don't need to borrow a bunch of money. Whereas capital spending, you need to persuade someone to lend you some money. This is a problem that we see in the sort of low end of transport across developing world. I was chatting to a tournets work today actually in the Philippines where, if you've been to the Philippines, you'd know their sort of iconic public transport is what's called Jeepney, which started after World War II with military jeeps getting converted into little buses with people on the flatbed truck. But they're all diesel powered, they're almost in the diesel powered. They tend to be very, very old vehicles with sort of terrible pollution. Passengers don't really like going in there anymore. People would like to be in something more modern. And the Philippines really for the last 10 years has been trying to sort out the Jeepney sector. To be honest, it's not gone as well as you might have hoped. They've been big strikes by drivers. Because what's sorting this out would involve is individual drivers getting turned into sort of big cooperatives and then cooperatives borrowing a bunch of money. And then they can get electric Jeepneys. And the drivers will get a wage, the drivers will get benefits. It'll be much more regularised as a sort of business. And people who have converted tend to be a bit happier about it. But the people who have not converted, they like running their own business, they like the independence context that makes sense for Australian UK. They're a bit like Uber drivers. They have that sort of independence. They have the upside that you get if you have a good day of driving. The government wants to switch the more to something like a bus driver model, where you don't get any upside if there's more driving. And there's been a lot of resistance to that and it has proved difficult. One other thing which I've been thinking about this energy shock is having lived through what happened after Russia attacked Ukraine here in Europe. It feels like that kind of energy shock is now really an Asian problem. In a way, this is Asia's Ukraine moment. You know, it was mostly a gas crisis in Europe. Of course, there were other fossil fuels involved as well because you're been imported a lot of diesel from Russia, some crude oil, but also a bunch of coal. But in Asia, this is going to be both an oil and gas crisis. Let's stick to oil and let's look at electric cars. You know, we keep hearing that yes, they are now lower in price. There's all these availability. Actually, there's a cool factor. We also see that in sales figures. Some of the Asian countries are now selling more electric cars as a proportion of new cars than many of the rich economies better than the US, better than the UK, Vietnam, Thailand, Nepal, these countries come to mind. When you were thinking about the switch to EVs, how are you thinking this particular shock will affect EV sales in Asia? I think this has been another of these emerging trends. But again, it was sort of emerging last year and then this energy shock has come on top of it. And I think it could prove very dramatic. The numbers that we've seen in the last six, just in the last six months for some of these Asia markets are extraordinary. And the one little caveat I would add to them is that these markets tend to be quite driven by the fact that there have been some quite high tariffs on a lot of these vehicles. And the tariffs were sort of knocked off and a lot of those tariffs reductions were coming to an end at the end of last year. So a lot of people were rushing to buy cars in time for that. So that's probably distorted things a lot. But it's shown what you can actually achieve if you decide not to tax green energy, basically. And then yeah, the numbers are extraordinary, like 50% of cars sold in Thailand and Singapore in the last few months have been battery-only models. That not just plug-ins, but battery-only without an engine at all. That third in China and Indonesia, South Korea and Vietnam, far ahead of numbers. I think the UK is about 20%. The US is about 8% Japan's about 3%. The one that's actually notably that lagging of the big economies is India is also similar to Japan is about 3% in just on a very low level. But across Southeast Asia, really, there's been this really dramatic change. Thailand, EV cars are at price parity, which is still not quite the case in a lot of places that are not as exposed. I think there's not the case in UK. Here in Australia, it is the case. EVs are pretty much at price parity. And certainly in China, EVs are cheaper. But the thing that always holds people back is the sticker price. It's actually not the price of fuel. But obviously, the price of fuel is suddenly very much on everyone's mind at the moment. So I think that really does, you know, that gives an opportunity for a much broader shift. The tariff policy you can argue makes sense for some countries. Like in India, it probably makes sense because it has its own domestic car industry that it wouldn't very much like to protect, that has a number of people that are employed. For most countries, there isn't really an auto industry to protect. So what is the reason for those tariffs to exist and what could be done to encourage countries to actually drop them? I mean, a lot of these tariffs to be clear are in the countries that are protecting their car industries. But as you say, I mean, a crucial factor about a lot of these emerging markets where, you know, to be clear, people's models about the future of oil demand will depend on the idea that these countries are going to buy petrol cars, not electric cars. If you don't have an incumbent car industry to protect, you just want to buy whatever the cheapest car is. And also, if I'm a government, I want the car that does the best thing to my balance of payments because of course, the other much bigger thing to consider is that the amount that you spend on imported cars in any one year is just dwarfed by the amount that you spend on imported petroleum. If you're not an oil producer, then the amount that you're spending on oil to fuel all those cars is many orders of magnitude. In most cases, greater than the amount that you're spending on cars. So it makes no sense if you don't have your own car industry to put a 50% tariff on cars. When you don't have a tariff on the petrol, you're just blowing out your own balance of payments basically. There is also the psychology of what happens during an energy shock that sort of remains with people for much longer than what the numbers might always be able to capture. You know, talk to anybody in America who's lived through the 1970s and they'll talk about rationing of fuel and never all these long cues and, you know, many vowed, this will never happen again. That's why you've got the strategic petroleum is a very important thing. of etc. Well, we are already starting to see those kinds of cues across Asia now. I was just going to say, I mean, I grew up in Britain and I remember my parents telling these stories of the four-day week in the 1970s, which was when this was fuel rationing at the time of the 73 oil crisis. And today I'm talking to someone in the Philippines and she's telling me about how everyone's working a four-day week. This is something that happened before I was born and and it is a phrase that I remember from my childhood more than 50 years ago. And this is happening right now in Asia. I don't even feel the sort of recent film, great film, licorice pizza came out about five years ago. It's sort of set in Los Angeles in the 1970s and there's this wonderful cameo scene of people having basically having punch ups in 1973 at gas stations in Los Angeles. And I was seeing these videos recently of punch ups in India at retail sales of LPG for cooking gas. It's exactly the same thing and this is memories of a generation ago, you know, the new memories are being made right now. After the break, more of my conversation with David Fickling. And while I have you, please take a moment to read or review zero on Apple Podcasts, Spotify or YouTube. It helps new listeners find the show. Recently a reviewer wrote in a world with so much bad news, love that this podcast has some episodes of things that are going in a positive direction. Hello, I'm Stephen Carroll. I'm in Brussels where many of Europe's biggest decisions get made. And I'm Caroline Hepgett in London with the hosts of the Bluebeak Daybreak Europe podcast. We're up early every week day keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens. It's smart, calm and to the point. And it fits into your morning. You can find new episodes of the Bluebeak Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. On Apple, Spotify, YouTube or wherever you get your podcasts. So let's come to natural gas because this crisis is both an oil crisis and a gas crisis. And in the climate conversation, the industry keeps promising that, look, natural gas, which is a bit cleaner than coal, will be the bridge fuel between coal and renewables. Well, after the Ukraine crisis, that promise of a bridge fuel was really under question. And then I saw your piece in March where you talked about how Asian industries are switching away from gas. And this was happening even before the war started. How exactly? I mean, the most striking thing I think has been what's happened in Pakistan with the solar boom there. But the effect that's had on gas has been really striking because Pakistan is a very similar picture to a lot of countries. Egypt is a similar story, Bangladesh, a similar story, Thailand, Malaysia, Indonesia. They're all similar stories. They used to produce a lot of gas. But their own gas fields are declining. Their energy demands are increasing. They have outgrown their own declining gas industry and they're needing to import LNG. And in Pakistan, we saw at the time of the Ukraine war, Europe basically went out and bought all of the LNG that would otherwise have headed towards Pakistan. Pakistan had a big energy crunch as a result. They'd also spent far too much on a bunch of Chinese finance coal plants. And the price of electricity went through the roof. People were spending more of their income on energy bills than they were on their rent. And so as we know, we saw this sort of huge growth of solar. And a thing that got talked about a lot is the way a lot of households just put solar on their roof. But I think the thing that's really striking is what corporates have done. So I was speaking to this cement manufacturer, Fajii cement. They started putting in solar panels in 2019 just because they were getting a lot of sort of power cuts and things. They now 69 megawatts of solar panels across their sites, which to put that in context, Tesla doesn't tell us exactly how many megawatts they put on their factories. I mean Elon Musk originally said that they were going to be fully solar powered. The best I can see in this is literally from counting. Looking at satellite photos and counting solar cells, they probably got about 30 megawatts of solar panels. So this cement company in Pakistan that most people have not heard of has at least twice as much solar panels as solar power, power operations as Tesla, which is the obviously the biggest clean energy stock for in some ways in the world. And they're not the only ones you can go like Nisha Mills, interlude, these are names that are not at no-none outside Pakistan, but they are their big suppliers to, you know, Hennies and Moritz, to the gap to Adidas, to all the sort of high street brands. They have 35 megawatts, 25 megawatts. There's enormous amount going on because the grid electricity is so expensive. And as a result, Pakistan is turning away LNG cargoes. And it's actually in some ways, I think doing better than, of course, Bangladesh is the other country that is heavily associated with the garment trade. Bangladesh has some challenges Pakistan doesn't have. It's obviously much more land constrained than Pakistan. It doesn't have. it's not as sunny as Pakistan, but it's really done. It's policy-wise, it still hasn't like a 30 percent tax on solar panels. It makes it quite hard to install solar. And it's in its imports of LNG, but more or less double since the Ukraine war. So Pakistan seems to actually be riding this out pretty well because it's installed all this solar. And someone like Bangladesh is doing much worse. And it's again, not just developing countries that get affected by energy prices. There is a huge dependency in South Korea and in Taiwan on gas that comes from the state of Formos. And of course, those are also the hubs for the other big industry that is being powered by investors right now, which is AI. And you wrote about that? Talk us through how South Korea and Taiwan's gas problem becomes an AI problem. Yeah, well, I mean, these are really interesting economies because, of course, both. You don't think that it's South Korea, but South Korea is essentially an island because the only bit connected to mainland is North Korea. So these are both islands, essentially. They're island grids. And so they've had difficult decisions about how to power themselves. They're small countries as well. They don't have a lot of land. But I don't think they've made it easy for themselves because a lot of their restrictions against renewables are some of the toughest in the world. I mean, just actually in the last six months, Taiwan passed some laws that effectively make it impossible to build utility-scale solar. South Korea, until recently, had similar laws. So as a result, these countries are very dependent on LNG. They're very dependent on coal as well. But LNG is a very large part of their grid, sort of, 25, 35% of their grid. Japan is similar, but Japan was quite smart in diversifying its supply. But South Korea and Taiwan, each of them, as I say, about 30 to 40% of their grid comes from LNG, and about 30% of their LNG comes from Qatar and the UAE. South Korea is one of the countries that's declared, sort of energy emergency. Taiwan, last year, closed down. It's last nuclear power plants and the politics of nuclear are very sort of fraught issue in Taiwan. They're now possibly looking at restarting some of those nuclear power plants. They are obviously scrambling around for coal at the moment to get more coal. And there's been vocal support from South Korea, certainly, for pushing harder for renewables. Those are the countries where all our chips come from. The South Korea is where all the memory chips, the vast majority of memory chips come from. Taiwan is where the vast majority of our processing power comes from. Those factories will probably be prioritized, but in a prolonged energy crunch, we are going to see problems that ripple through the economy, through the AI economy, through everything that uses chips. And one other thing I want to touch on from the street of our moves is fertilizers. So because there's so much gas that comes from the Middle East, they created, as you would, fertilizer production, because natural gas is a key input into essentially stripping out the carbon from methane from CH4, you get to hydrogen, and then you combine that hydrogen and nitrogen making ammonia fertilizer. Which is used around the world and often just given the politics of farming, it is heavily subsidized. There's usually reserves that countries have, but natural gas is a key, but whether it's coming through the state of foremost, do a fertilizer plant in India or through being turned into fertilizer and then being exported to Asia? How are you seeing the fertilizer problem playing out? I think like with India, it's particularly crucial, obviously, like the season we're coming into the sort of monsoon crop planting season. So that's when a vast amount of the fertilizer gets consumed. It's very dependent on a Gulf-Matchell gas, and we're actually seeing in some of the decisions being made by the Indian government there, sort of prioritising the fertiliser industry, because that's seen as so crucial just for rural livelihoods. The other aspect of this that I don't think is talked about as much, though, is the role of China in this. China is not thought of as a big fertilizer exporter, but actually for a lot of the world, it's much more important than the Middle East. And China, in terms of nitrogen production, is by far the biggest player. Now, China is not using all of its nitrogen as fertilizer. A lot of it you can use it for making laminated wood. You can use it for sort of pollution control equipment. China uses a lot of this nitrogen production ammonia, urea production for stuff that's not fertiliser. And of course, we've seen in terms of China's long-standing attitude to resources and also how it's dealing with the current crisis. It doesn't want to extend all its stockpiles to the world. It's not a country that is releasing its petroleum stockpiles, and it's not a country that they've tightened exports of urea and ammonia rather than increasing exports of urea and ammonia. But if you look across a lot of East Asia and actually across the world, places like Indonesia is I think about 75% or 80% of its fertiliser comes from China, Vietnam, Malaysia, Pakistan, they're all sort of 30 to 40 to 50%. It's a big player in this market. And if you think of the long-term dynamic, the risk is if a lot of fertilizer production from the Gulf becomes more risky and less certain. Obviously, this is something where China has a lot of export potential. And we've seen with rare earths, Chinese abilities to sort of weaponize a lot of that stuff. So I would worry in the long term that this is another critical mineral, essentially. Yeah, and I think this is something that again is worth noticing just because China has built all this clean tech capacity and might be the country that provides all the climate solutions at least to a majority of the countries in the world that cannot produce it. It is not doing it for climate concerns or even really for the economic growth of those countries. These are industries born out of energy security as the priority for China. They built a whole course to chemicals industry that is very underutilized to try and make liquid fuels just in case of exactly this moment where the state of Hormuz is brought to a halt. The fertilizer capacity is also one as we see it's stopped the export of diesel and gasoline from its fiat shores right now. So it's really looking inwards as really people should know China would do in these circumstances. But let me come to a bigger broader view. I mean, this crisis, who knows how long this lasts and how it all shakes out. But if you're a betting man, what do you think happens to the energy system in five years and ten years as a result of this war? I think the best thing to think about is if you just look at the way prices have changed since Ukraine, of a lot of the key components of an energy system. Because obviously when anything like this happens, you can sit back and decide how do these pieces fit together and how do we rework the system in future. One thing I think that's really underappreciated is how much these prices have changed. The price, just going by China prices here because they're the sort of a glow market. The China price of solar panels is down 30-50% since the Ukraine war. The China price of wind turbines is down 30-50% since the Ukraine war. The China price of lithium ion batteries is down the same amount, electric vehicles is down the same amount. The price of gas turbines has doubled or possibly tripled. So if you think that the shift towards renewables accelerated in the immediate aftermath of the Ukraine war, which I think it has, if you look at the figure I love to look at, five years ago, I think it was the IAA when they put out the first net zero report, they said, "Well, to achieve net zero, you need to be installing about 600 gigawatts of of solar a year." This was pipe dream stuff in 2020. That's what we're installing. We may not keep installing that much if it's an interesting debate to see what will happen now. But we have the capacity to do that and we did that last year and that is that that's the sort of net zero pathway and that's before any of this stuff happened, before the uncertainty over the LNG, it's been treated as this bridge fuel, before the costs of gas went up the way they have since. So I think certainly here in Asia, LNG has been pushed as the fuel for energy security in the last few years and it's been pushed very hard like if you go to Japan, which consumes a lot of LNG, but also sees itself as a ambassador for LNG. They've been very much pushing developing Asia, the dot more and more LNG over the past few years. It provides a export market for a lot of their own gas turbine equipment and that sort of stuff. These arguments are going to be looking incredibly weak at the moment because these countries are going through, as we were saying, once in a generation, lifetime social crises because of these and they're going to start thinking a bit more seriously about what LNG security really means as a lot of people have pointed out. If your LNG supply runs out, then you have whatever it's 30 days you've got left in stocks. If China stops selling you solar panels for whatever reason, you still have a third years of solar power until you need to buy a new one. So it's a materially different situation. Well David, this was a lot of fun. I look out to every column you write, but I think given this energy crisis is really hitting Asia the worst. If there were more reasons people needed to read your columns, this is the moment. So thanks again for joining this show. Thank you, Aisha. It's great to talk. And thank you for listening to Zero. Now for the sound of the week. That is the sound of Bagger 293, a coal excavator. The world's largest land vehicle standing almost 100 meters tall and more than 200 meters long. It mines dirty coal, but is powered entirely by electricity, often from much cleaner sources. If you like this episode, please take a moment to read and review the show on Apple podcasts, YouTube and Spotify. This episode was produced by Oscar Boyd. Our theme music is composed by Wunderly. Special thanks to Somersadi, Laura Milan and Sharon Chen. I'm Akshadrati, back soon.