Professor at the Harvard Kennedy school runs say Global Energy project in a special assistant to george w. Bush and a contributing assistant for iraq and afghanistan and spend some time as an adviser in iraq and working on this book several years times change but maybe we will start first why you decided on this book for what started this. Could afternoon thanks for spending your lunch hour with us, dan has been a source of advice and inspiration moving into this world with energy and politics. But my impetus for writing the book is almost on reflecting after my time has how much the world needs to be understood and then 2. Back and that is from the Foreign Policy perspective. And then to meet those saudi officials to leave maurer supportive of baghdad. Is seems to be working now but it is interesting to see that saudi resistance regime and that is motivated by a sectarian differences. And that what people did not fully appreciate that the time that they were the only holders of capacity had no rivals. So did become challengers to those saudis. So you really need to look get those defense with a Foreign Policy lessons with the understanding of Energy Markets and technologies. With that point there is no energy windfall. So what do you mean by a windfall . I want to call the of book serendipity. Not many people as Simon Schuster likes that name but that is the unexpected gain. Began as with the premise that moves from a world that was formed with Energy Scarcity to the reality and contrary to many expectations is virtually fueled by increases of production of natural gas. Is somewhat evasive promised that japan and the challenge that i talk about how does reshaped Global Affairs and to take advantage of this moment to maximize it. You said it is a powerful antidote to systemic american decline. What does that mean . The reality that americans have begun to understand the there is some misunderstanding to a the benefits because they expect liberation from middle eastern politics and they try to argue there are benefits but they are more subtle with a better understanding of the Energy Markets. So that an adult is a manifestation of how the energy boom is a source of soft power. Ten years ago in the context of Energy Scarcity you hear the chinese russians talk about american decline but 10 years later there is more of a debate in these countries, particularly in china. Women commends them america is great but there is a question mark with a lot of reasons that is the energy boom to underscore the power of innovation and ingenuity. So there is people around the world. So those in the United States have less of the recognition of windfall than other countries . This is the americans perceive this. They are now aware of the fact that energy is an asset rather than the vulnerability so there are many who have worked in government under the assumption is just a vulnerability. But i still think there is a misunderstanding of the Strategic Benefits for people to understand this could be good for jobs or the economy and i acknowledge that and the book by try to underscore the this is change the global strategic environment. Ben bernanke in 2014 said one of the most positive things that could happen is a financial collapse. And you touched on that. There are millions of jobs but they are based on the price when the price went down in those contracted but overall to say the benefits to the economy were even greater than the supplemental that was passed. Just in terms of sheer numbers. One other prominent candidates, not just of the nomination wanted to stop all tracking and with that if there would be an effort and like many books you are sympathetic that first was before a the way they should anticipate the price clasper crow. So a 1. Five was writing that with the idea of the challenge for what is in the political realm. There could be a political push leading to a severe restriction of fracking. The argument to make people think about the cost benefit analysis. So it would be a significant reversal of american fortune if we begin fracking. But there are legitimate concerns about the environment. It is highly regulated to begin with. And with that state is a little wonky you can explain that. If i can be wonky with this crowd then who can i . [laughter] but still not there should be fracking and i bet the right level of regulation. And there are certain issues that make more sense of the federal level across the state border implications the there are other issues as long as there is capacity to do that so we dont look at chernobyl but lets get those local risks and communities with the state level officials with that right level of risk. With that broader geopolitics if you had at peoples like venezuela of teetering on collapse, of that geopolitics . It is interesting so before the price class to say leave the Energy Trading business it is an interesting because of geopolitics was divorced from the Energy Markets after the arab spring so there was a sense the dont think they have decoupled but the issue is there is a lot more excess supply that could absorb shock better than otherwise. That doesnt mean geopolitics is not an issue that if we look back at libya and venezuela together these our geopolitical a certain moments that could have a significant restriction. So to get more specific how has the windfall in your view change u. S. Relation in the middle east . Here is where it tends to disappoint people because of the desire of Many Americans that they would like to have more distance. The were not importing that would give us the opportunity to disengage. So without first the answer to the question if we look not as a Foreign Policy but Energy Market once it is harder to make that argument we are not energy attendant and probably would not be in most scenarios. But with all these countries that affect global supply. Because of the price we pay at the pump is determined internationally. So again this is a craft that can understand this so you are preparing a president or senior official to go into a meeting with a counterpart there is only a certain number of things you can talk about. Pas infers Saudia Arabias oil was always up there of the list. So there is room to talk of other things so the nature of that relationship has changed it is a dramatic but it is significant. Have a defined those key Decision Makers . To change their view . That is the great question and in many parts of the aisle world perception is reality so there has been a sense america and told recently with President Trump visit that they were disengaging from that part of the world. Many senior people said this must me because you dont need our oil anymore. It did seem we are disengaging for other reasons the there is a perception that we are less interested in even the analysis suggest it is with those relationships even to inform the way china looks at the involvement of the of middle east. May be to be less invested to be more dependent. What do you say to these decisionmakers . So that we still have a lot of Energy Interests in common but in the bottom line is we will continue to be interested and invested in the middle east for a long time to come. The cachet of revolution could be with the subject of loyal. And looking a Foreign Policy in Energy Markets together and there are many scenarios that others could talk to our Energy Markets could look in the future. And if there is of low price for a hard period time that is in some ways but in that environment isnt commercially to produce to have more of the will the world is consuming. And that is where they have more influence from Global Politics. Given your view with the nuclear deal. And with your previous book on sanctions would that work otherwise . This is an interesting story and i do think that with the increase of Oil Production because of fracking and that makes it easier to secure the sanctions. It isnt a coincidence they are put in place and a low price environment. But then to get support in the highpriced environment. And then to talk to officials and then if it comes off the market every year for the last several years and then promote these sanctions and then add to the Global Market. And then with the of the Global Market at the time with the Global Economic recovery. Talking about sanctions with those economics in the white house to say keep in mind you have a fragile economic situation. In most with those wheels sanctions or oilproducing countries are in russia. But in the way that balance as shifted to the legislature. Peas were controversial all sanctions that was a big departure to take that prerogative away from the executive branch and then given back to congress. So basically there is something called a waiver and 10 years ago they made it mandatory to include the wafer. With the executive branch to have leeway to simply say i will waive the sanctions because theyre not in the National Security interest. President clinton used wavers when he said this will upset our relationships with the europeans, president bush, it has been a broad authority. And congress has the right to racked. And can act whether not they could be lifted. But my problem is that we think about sanctions to maximize havent gone the country but in that is where the negotiation can happen. You one to the negotiator to have that ability to say to be effective in those circumstances to go back in time in the normalization between in the u. S. And vietnam. It is harder to engage and russia to be short of that capitulation. Those certainly worked on iran. Are they working on russia . What do you mean by working . As a change russian behavior . Jealousy evidence of that so in that regard there isnt the end desired effect that there has been some punitive the fact. And to fight one does have financing for growth so as you know, and with those technologies. That is not part of the supply now a part of the future. To use the term windfall or Strategic Firm boom and Energy Dominance . You never mentioned any one in particular. But Energy Dominance. In some ways i think they are right to a knowledge to think of energy as a strategic tool with the way this concept of been developed. Inactive is twofold and thats been that is a program under the right conditions but in todays world and that includes other forms of energy as well. So china has been talking about a date certain that will stop selling cars to use petroleum. I think they also realize the Strategic Benefits to be a leader in those renewable technologies. The letter my real contract critique with the just on production trying to find a way to create a policy. That is required with the non energy Foreign Policy so the position on trade and energy demands. That could backfire with the strategic environment and the changes made so that a real strategy would take advantage of that as well. How has this changed the u. S. China relationship equation . Given this argument china and the u. S. Will have a difficult relationship in the foreseeable future. And to look for places that we can build with cooperation in the hopes of those relationships and interactions to affect the rest of the relationship. And to create those openings. In bin to expand on this with this energy abundant environment and are more comfortable in the Current International order. And to remake the order or if they can live in it . But but i fame that is one of the casualties from the paris accord to withdraw from but this is where we have a common interest in with that is made possible so we are determined to get in there. And then to go back to the middle east. And with the u. S. And china to work more closely. Debt with mexico how concerned are you but energy has many facets. It is important but often is overlooked how integrated we are with mexico. It is the largest importer of americas natural gas. That is likely to grow significantly if it continues energy reform. To be tied to prospects of Economic Growth in imports across the border it is cheap and available in with this political climate. To go to the negotiation end of nafta there is huge elements them with the International Energy company it may take you 36 hours to get that from anywhere it could be exponentially longer if you are in argentina. So that seamless interaction is beneficial with natural gas and Oil Production. If we head down in maurer confrontational rose. Is there any geopolitics with those issues with north korea . And with those options are not attractive but but with the diplomatic cancer with that and attractiveness were the risks is the one to go for. To with that strategy put that in place and that is a big part of the sanctions package it package to that extent of the Global Economy a lot of those our energy in nature with exporters and importers. But with that analogy has limited use isnt any domestic political mechanism so i would make the case the sanctions created pressure has a mandate to negotiate now but what we talk about is one individual with there is work if we could substitute technology this is expensive and creating problems but they do have some of that capability and they certainly have enough but there is a report they could easily do that. So there is that Energy Dimension it isnt the answer. Please ask questions that the microphone. Make a question and not a speech. Congratulations but my question is it seems that with the windfall doesnt have so much to do with energy as the way of life so do you see evidence around the world that countries are looking through the lens to say it is the way of life . That u. S. Policy makers say this is a lover of strategic advantage and using energy. Thanks for coming today. And to agree with the premise it isnt just about geology but the institutional environment with the Financial Markets all of these were critical but five years ago and very few have and they are still very small quantities so it is very hard to reproduce on much have they thought that we could use as the entry point for conversations around the world . So in the earlier days so what institutional factors made a difference . And with my understanding with the Obama Administration about promoting development with those fossil fuels overseas. Connected be even more than that was. And even with soft power and to help make other countries develop their own resources and with the transparency year rule of law not sounded like you are lecturing. To help pay country understand here are those variables required to be successful unfortunately i will end of this but to those budget cuts that would further degrade the ability rather than augment. Thank you very much for this terrific job. And the bull was 20 40 phasing out combustion engines so what does that mean for Energy Abundance . The assistant minister said that. Could you and pat . John bin at any moment. Embroidered china would end up but with china calling an end to the sale of petroleum in the context of england and france. So as a policy initiative and China Matters a lot more to the Global Energy market and automobile markets, so the significance there is what is driving this there are Environmental Concerns that is partially the case but also a recognition to have strategic advantage of britain and france and this is a gravy train. And this change is the conversation. And those other questions of people are asking me so what is that breakeven price for shale . And then not quite to one year ago all the discussions were about electric vehicles so the nature of the conversation has changed even if we dont know when that moment will come but that change of mindset will start to affect the Decision Making as well. So in the chinese car but that point medicine Just Technology but a leader in the Global Automobile market they can leapfrog over the of wellestablished competitors. And to make the commitment. That was misleading. On one charge you get 14 miles. [laughter]. Em with the prosperity and Economic Growth in those nations throat history from dutch disease or corruption with volatility on the banking sectors stability so maybe do have that now as the exporter of capital goods as a resort results of shale . Is there a way to think about that for other countries . So those two . Reactions, sometimes get questions from my students will that apply to america but despite the fact is the important industry the american industry is so complex that i am not so much concerned to have for friends of other parts of the world but this is still playing and other parts of the world. But the effect is his had so those Reform Efforts in saudi arabia in particular with never have happened if there is more energy on the market if there is shale will with a new Business Model makes it very hard for the oil markets to work in the same way so they come to terms itll just have to survive and is just the new oil market world. They still a time and resources but the need for reform into have that opportunity. And it is imperative if it will survive. And there is a seriousness. And from the atlantic council. With that Shale Oil Revolution g maun negative to attract . And to be very expensive . So this is still an object of debate the natural gas is an easy substitute. Salon that environmental side so unquestionably where renewable may have been seen as more attractive that makes it less so. With the Renewable Energy investment with very low Natural Gas Prices those numbers are high. And then to a precipitous drop to attribute that to lowpriced natural gas. It is just the way that natural gas for now is a compliment. That is important but to make sure that the there was no precipitous decline. And with that incentive that is very powerful tool move provided incentives for those requirements. I want to go back. Select 100 percent agreed a huge benefit with the Massive Energy importer has been neutralized but now it is a huge asset. Theres still a net importer of energy one of the largest importers of oil and will carry on through the 23rd days. So i understand that liability but i am not sure how it is an asset. In which way . With a Foreign Policy context. So now that is an asset . But we should remember that net importer of energy for many years to come. It is true the imports have gone 60 percent at 21 and half of those come from other countries and north america. So i use the phrase that if it is fair to say many in the Foreign PolicyCommunity Say we have a Foreign Policy area to use those energy exports. And then to talk about natural gas to food displace exports to europe so they are looking for something tangible that that active component ms. Jean jean the strategic environment to augment hard and soft power. Is less of the sense to you as exports to make others do things they want to do. Thats the sources of hard and soft power changing the environment and a variety of ways to have the appreciable benefit to to put america in a better position to a dance its interest. With the impact of innovation is faster than expected. To be slower than we expected. But it has declined faster. And then what would happen . To american than to demand. With those global trend reports. End to talk above a of a coming anergy transition is all about the renewable space where things were already happening. To put day bid question mark around this but there would be technologically chances with the whale and gas revolution and. But there is still some runway to be covered so we can still expect technology to have impact on the ability of others to produce more that will eventually come to of halt but on the other Side Technology moves much more slowly or more quickly then you would expect. So that is what were all waiting for. If you told me in the next 10 years of the sectors would switch to read it completely believe that. I would imagine if we are sitting here we would talk about the geopolitics of Renewable Energy. Is a very interesting crow with bad energy mix of sex Global Politics . We should expect a big change of clothes will politics what is your view . So there is a lot of momentum there doing a study now to understand that innovation pathway in the United States. There is momentum there as to which goes faster i dont know but obviously Renewable Solar has benefited greatly from over capacity and whether more people work on anything else other than solar . Em that funding whether it comes from government or not. So is in norway the electric car is virtually free for the you have to pay for it but there is a reason for that. The book is terrific thank you for your research. And then to run back a little more opportunities eventually toward electrification of the vehicles and as they emerge from Energy Poverty to different mechanisms that he has seen historically and also including nuclear. So what you see from the advanced Energy Markets . Give us your vision. The geopolitics of nuclear and renewable Energy Markets that you and expected the find yourselves into dominance was also seeking dominance in other sectors. Im trying to get people to talk windfall. [laughter] so going back that there will be geopolitical implications i hold a small workshop and it is interesting the feel of your inner room then finally i try to figure out what is the resistance . I am for all renewals but the change of energy is a change of politics so on the good side to alleviate Energy Poverty that have not invested in fossil fuels but will never do so because of the potential to leapfrog over the. That is a benefit to them need to think about in the world in which we rely on Renewable Energy the way have that base to end of adoptee but that is a scenario 70 percent of the world could be run on Renewable Energy. That is interesting so to take that scenario what does that look like . What is the vulnerability of a Global Economy that is so electrified . There will be from our abilities. So a lot of these leven be more important than they are today. But because something is electrified doesnt mean it is better for the environment depending on your source of electricity. If it is it is worse. Naturalgas, renewable or nuclear could be beneficial. Talk about 20 but 82 percent of the Global Economy now was hydrocarbons. That is a dramatic shift. So with that question on windfall. In those areas with that natural gas boom with that he exchanged. That could have been the former rust belt. So let me jump in there because he looked at that carefully even in new york state banning fracking. Coming from the supply chain in the midwest to result from that to double the Capital Investment that is why there is a couple of million jobs in was also jobs in ohio and michigan. Isnt just jobs from production battle so were Natural Gas Prices a Competitive Edge sivas seen a number of companies this is true even seen some German Companies invest. 125 billion dollars invested in manufacturing in the United States. That is the last number or even Chinese Companies investing in manufacturing. Is there the last question . You have not touched on coal yet so can you give us a few words given the fact the foreign budgets may reduce with renewable . Or how does that affect clean coal . I have been waiting for this. What exactly is it . I have not seen much evidence there is a lot of talk but not a lot of evidence. And terms of what is the future of coal . Looking at the big economies of china you can see if it will be able to retain the market share. We seen the percentage of energy is nearer 64 and that has started to come down with huge incentives as they continue to bring that down but it does suggest coal is not phased out around the world there are still some places they have such enormous energy gaps