WEBVTT 00:00:01.229 --> 00:00:04.389 The global energy transition is often painted 00:00:04.389 --> 00:00:07.290 as an inevitable and harmonious shift towards 00:00:07.290 --> 00:00:10.769 a sustainable future. However, the reality is 00:00:10.769 --> 00:00:14.410 far more complex, involving a myriad of challenges 00:00:14.410 --> 00:00:16.949 ranging from volatile markets and geopolitical 00:00:16.949 --> 00:00:19.829 tensions to technological and economic hurdles. 00:00:20.629 --> 00:00:23.089 As nations strive to combat climate change and 00:00:23.089 --> 00:00:25.750 reduce reliance on fossil fuels, the promises 00:00:25.750 --> 00:00:28.969 of renewable energy are vast, but so are the 00:00:28.969 --> 00:00:32.079 risks and disruptions it brings to the established 00:00:32.079 --> 00:00:35.700 global order. In this episode, we unravel the 00:00:35.700 --> 00:00:39.359 tangled relationship between clean energy, geopolitics, 00:00:39.740 --> 00:00:43.259 and the economic forces shaping our world, highlighting 00:00:43.259 --> 00:00:46.920 the winners, losers, and unforeseen consequences 00:00:46.920 --> 00:00:50.159 of the journey toward a cleaner, greener planet. 00:00:51.020 --> 00:00:52.920 This is the Diplomacy and Discourse channel. 00:00:53.159 --> 00:00:57.920 I'm AR. Thank you for listening. In Europe, the 00:00:57.920 --> 00:01:00.399 clean energy crisis has been a stark reminder 00:01:00.399 --> 00:01:03.719 of the continent's vulnerabilities. High electricity 00:01:03.719 --> 00:01:06.599 prices have led to the closure of numerous businesses 00:01:06.599 --> 00:01:10.319 and the bankruptcy of several energy firms. This 00:01:10.319 --> 00:01:13.120 crisis stems from the EU's heavy reliance on 00:01:13.120 --> 00:01:15.959 imported energy and the rising cost associated 00:01:15.959 --> 00:01:19.219 with these imports. Although the EU has made 00:01:19.219 --> 00:01:21.780 strides in investing in renewable energy sources, 00:01:22.319 --> 00:01:25.579 these efforts have not been sufficient. to significantly 00:01:25.579 --> 00:01:28.900 reduce reliance on imported energy and lower 00:01:28.900 --> 00:01:32.939 electricity prices. Meanwhile, Russia's President 00:01:32.939 --> 00:01:36.159 Vladimir Putin has been leveraging his country's 00:01:36.159 --> 00:01:39.060 natural gas reserves to gain influence over the 00:01:39.060 --> 00:01:43.540 EU, posing a major security risk for the EU and 00:01:43.540 --> 00:01:47.459 its member states. China's approach to energy 00:01:47.459 --> 00:01:51.439 security has been proactive. In September 2022, 00:01:51.879 --> 00:01:55.079 Vice Premier Han Zhong ordered energy companies 00:01:55.079 --> 00:01:57.359 to ensure sufficient supplies for the winter 00:01:57.359 --> 00:02:01.480 season. As oil prices have increased, other countries, 00:02:01.819 --> 00:02:04.659 including the US, have been urging Saudi Arabia 00:02:04.659 --> 00:02:08.020 to boost its production. This situation has given 00:02:08.020 --> 00:02:10.240 Riyadh more leverage in its relationship with 00:02:10.240 --> 00:02:13.300 Washington and raised concerns about US energy 00:02:13.300 --> 00:02:18.120 independence. In 2024, the US achieved energy 00:02:18.120 --> 00:02:20.719 independence for the first time in 40 years, 00:02:21.000 --> 00:02:24.330 but the ongoing geopolitical tensions and reliance 00:02:24.330 --> 00:02:27.909 on imported materials for renewable energy technologies 00:02:27.909 --> 00:02:32.770 continue to pose challenges. The transition to 00:02:32.770 --> 00:02:35.750 renewable energy is often seen as a pathway to 00:02:35.750 --> 00:02:38.590 reduce global tensions over energy resources. 00:02:39.370 --> 00:02:42.849 By shifting to sources like solar and wind, countries 00:02:42.849 --> 00:02:45.550 aim to lessen competition for limited fossil 00:02:45.550 --> 00:02:48.750 fuel resources, potentially reducing conflicts 00:02:48.750 --> 00:02:53.590 and fostering greater cooperation. However, this 00:02:53.590 --> 00:02:56.389 transition also has significant geopolitical 00:02:56.389 --> 00:03:00.270 implications. It affects power dynamics, alters 00:03:00.270 --> 00:03:03.590 relationships between leading powers, and influences 00:03:03.590 --> 00:03:08.129 the development of globalization. Implementing 00:03:08.129 --> 00:03:10.930 a sustainable energy system is not without its 00:03:10.930 --> 00:03:14.349 challenges. It is likely to lead to new confrontations 00:03:14.349 --> 00:03:17.550 and competition. Governments must take decisive 00:03:17.550 --> 00:03:20.590 actions and make difficult decisions to facilitate 00:03:20.590 --> 00:03:23.780 this transition. Businesses need to invest in 00:03:23.780 --> 00:03:26.860 green technology and collaborate to ensure success. 00:03:28.180 --> 00:03:31.039 Ultimately, the transition success depends on 00:03:31.039 --> 00:03:34.099 the collaboration and coordination between governments, 00:03:34.599 --> 00:03:38.500 businesses, and citizens. The idea of a smooth 00:03:38.500 --> 00:03:41.780 transition away from fossil fuels is not feasible, 00:03:42.319 --> 00:03:44.919 as the energy system that underpins the global 00:03:44.919 --> 00:03:48.300 economy and supports the geopolitical order will 00:03:48.300 --> 00:03:53.159 have to be fundamentally restructured. The energy 00:03:53.159 --> 00:03:55.740 transition is shaking up the global landscape, 00:03:56.259 --> 00:03:58.840 and it's not as straightforward as it might seem. 00:03:59.500 --> 00:04:04.599 Let's break it down. Investment in renewable 00:04:04.599 --> 00:04:08.159 energy is on the rise, even amid global uncertainties. 00:04:08.699 --> 00:04:12.460 In 2024, global investment in the energy transition 00:04:12.460 --> 00:04:17.459 hit $2 .1 trillion, marking an 11 % increase 00:04:17.459 --> 00:04:20.379 from the previous year. This surge is driven 00:04:20.379 --> 00:04:23.399 by countries like China, which has heavily invested 00:04:23.399 --> 00:04:26.459 in electrification and clean technologies to 00:04:26.459 --> 00:04:30.439 reduce dependency on foreign oil and coal. Similarly, 00:04:30.899 --> 00:04:33.319 the U .S. has seen growth in solar capacity, 00:04:33.800 --> 00:04:36.959 with solar surpassing hydropower and nuclear 00:04:36.959 --> 00:04:41.000 as the fourth largest source of installed capacity 00:04:41.000 --> 00:04:47.879 in 2024. However, geopolitical tensions and market 00:04:47.879 --> 00:04:51.740 volatility are likely to persist. Conflicts such 00:04:51.740 --> 00:04:54.680 as the Russia -Ukraine War and tensions in the 00:04:54.680 --> 00:04:58.000 Middle East have impacted energy and food security, 00:04:58.519 --> 00:05:01.800 leading to higher prices and increased inflation 00:05:01.800 --> 00:05:06.319 rates. Additionally, OPEC Plus's decision to 00:05:06.319 --> 00:05:10.199 increase oil production despite weak global economic 00:05:10.199 --> 00:05:15.180 conditions has added to market volatility. In 00:05:15.180 --> 00:05:19.250 2024, The energy transition created both opportunities 00:05:19.250 --> 00:05:22.870 and challenges. Renewables accounted for over 00:05:22.870 --> 00:05:26.870 90 % of total power expansion globally, with 00:05:26.870 --> 00:05:31.850 585 GW of capacity additions. Yet, the global 00:05:31.850 --> 00:05:34.730 energy demand growth in emerging markets slowed, 00:05:35.410 --> 00:05:40.529 falling to below 3%, down from nearly 4 % in 00:05:40.529 --> 00:05:46.220 2023. Looking ahead to the rest of 2025, and 00:05:46.220 --> 00:05:49.100 the later years, the energy transition will continue 00:05:49.100 --> 00:05:52.879 to evolve. While investment in renewable energy 00:05:52.879 --> 00:05:56.540 is expected to rise, challenges such as geopolitical 00:05:56.540 --> 00:05:59.860 tensions, market volatility, and the need for 00:05:59.860 --> 00:06:03.819 infrastructure development will persist. Countries 00:06:03.819 --> 00:06:06.959 heavily invested in renewable energy like those 00:06:06.959 --> 00:06:10.079 in Europe and East Asia are leading the charge, 00:06:10.579 --> 00:06:13.660 while those reliant on fossil fuels face significant 00:06:13.660 --> 00:06:18.360 challenges. The winners and losers of the transition 00:06:18.360 --> 00:06:21.439 will not necessarily mirror those of the current 00:06:21.439 --> 00:06:25.319 energy system, making it a complex and dynamic 00:06:25.319 --> 00:06:31.240 process. Oil -rich countries often referred to 00:06:31.240 --> 00:06:34.660 as petrostates may experience economic booms 00:06:34.660 --> 00:06:37.720 before facing potential downturns due to their 00:06:37.720 --> 00:06:41.040 dependence on fossil fuel exports. Their reliance 00:06:41.040 --> 00:06:43.899 on major fossil fuel suppliers like Saudi Arabia 00:06:44.079 --> 00:06:47.160 and Russia is expected to rise before it eventually 00:06:47.160 --> 00:06:50.800 declines. Meanwhile, the world's poorest regions 00:06:50.800 --> 00:06:53.439 will need to use more energy to meet their growing 00:06:53.439 --> 00:06:56.680 needs. Despite the potential of clean energy, 00:06:57.139 --> 00:06:59.519 its impact on the global economy and political 00:06:59.519 --> 00:07:02.779 landscape remains uncertain. While clean energy 00:07:02.779 --> 00:07:05.620 will eventually become a vital part of national 00:07:05.620 --> 00:07:09.379 power supplies, it will also introduce new uncertainties 00:07:09.379 --> 00:07:15.000 and risks. Despite widespread concerns about 00:07:15.000 --> 00:07:17.740 climate change, these arguments are not aimed 00:07:17.740 --> 00:07:20.319 at discouraging countries from moving toward 00:07:20.319 --> 00:07:24.100 a clean energy future. Instead, they urge policymakers 00:07:24.100 --> 00:07:27.279 to recognize the risks and dangers associated 00:07:27.279 --> 00:07:30.639 with this transition. The rapid emergence and 00:07:30.639 --> 00:07:33.660 evolution of clean energy technologies have presented 00:07:33.660 --> 00:07:36.939 new geopolitical risks that will affect the global 00:07:36.939 --> 00:07:39.819 economy and the energy transition in the coming 00:07:39.819 --> 00:07:43.959 decades. Clean energy sources such as solar, 00:07:44.439 --> 00:07:48.220 wind, and nuclear are becoming increasingly viable 00:07:48.220 --> 00:07:53.079 alternatives to traditional fossil fuels. The 00:07:53.079 --> 00:07:56.040 global shift towards renewable energy is reshaping 00:07:56.040 --> 00:07:59.319 international power dynamics. Countries rich 00:07:59.319 --> 00:08:02.399 in clean energy resources or critical minerals 00:08:02.399 --> 00:08:05.699 like lithium, cobalt, and rare earth elements 00:08:05.699 --> 00:08:10.120 are gaining strategic leverage. China, for instance, 00:08:10.300 --> 00:08:13.240 has heavily invested in electrification and clean 00:08:13.240 --> 00:08:16.480 technologies, reducing its dependency on foreign 00:08:16.480 --> 00:08:21.160 oil and coal. Conversely, nations that have historically 00:08:21.160 --> 00:08:24.339 relied on exporting fossil fuels such as Russia 00:08:24.339 --> 00:08:27.699 and Saudi Arabia are facing challenges as global 00:08:27.699 --> 00:08:30.519 demand shifts away from their primary exports. 00:08:32.659 --> 00:08:35.870 This transition isn't without its tensions. As 00:08:35.870 --> 00:08:38.590 demand for clean energy technologies increases, 00:08:39.090 --> 00:08:41.950 so does competition for the necessary resources. 00:08:42.850 --> 00:08:45.690 This competition can lead to geopolitical conflicts, 00:08:46.169 --> 00:08:49.029 especially in regions where these resources are 00:08:49.029 --> 00:08:52.669 abundant but governance is weak. For example, 00:08:52.889 --> 00:08:55.730 the reliance on critical minerals sourced from 00:08:55.730 --> 00:08:58.250 politically sensitive regions has raised concerns 00:08:58.250 --> 00:09:03.080 about supply chain vulnerabilities. In 2024, 00:09:03.620 --> 00:09:06.659 these dynamics were already evident. The Russia 00:09:06.659 --> 00:09:09.059 -Ukraine conflict highlighted Europe's dependence 00:09:09.059 --> 00:09:12.799 on Russian energy, prompting a push for diversification 00:09:12.799 --> 00:09:16.679 and investment in renewables. China's advancements 00:09:16.679 --> 00:09:20.279 in clean technology manufacturing further solidified 00:09:20.279 --> 00:09:23.600 its position in global supply chains. However, 00:09:23.759 --> 00:09:26.519 these shifts also led to market volatility and 00:09:26.519 --> 00:09:28.679 highlighted the complexities of transitioning 00:09:28.679 --> 00:09:34.850 to a new energy paradigm. So looking into 2025, 00:09:35.830 --> 00:09:38.370 investment in renewable energy continues to rise, 00:09:38.769 --> 00:09:41.809 driven by both environmental goals and the desire 00:09:41.809 --> 00:09:45.730 for energy independence. Yet, geopolitical tensions 00:09:45.730 --> 00:09:49.190 and market volatility persist. The competition 00:09:49.190 --> 00:09:52.049 for critical minerals, the restructuring of global 00:09:52.049 --> 00:09:55.009 energy trade routes, and the varying pace of 00:09:55.009 --> 00:09:58.769 transition among nations contribute to an unpredictable 00:09:58.769 --> 00:10:02.159 landscape. Policymakers are grappling with these 00:10:02.159 --> 00:10:05.299 challenges, often underestimating the unintended 00:10:05.299 --> 00:10:10.460 consequences of the energy transition. As we 00:10:10.460 --> 00:10:14.039 move toward 2026 and beyond, the energy transition 00:10:14.039 --> 00:10:18.019 is expected to accelerate. However, without comprehensive 00:10:18.019 --> 00:10:20.279 strategies that address both the opportunities 00:10:20.279 --> 00:10:23.259 and challenges, including geopolitical risks 00:10:23.259 --> 00:10:26.659 and market instabilities, the path forward may 00:10:26.659 --> 00:10:32.139 remain fraught with complexities. If people believe 00:10:32.139 --> 00:10:35.179 that plans to address climate change endanger 00:10:35.179 --> 00:10:39.059 the affordability or reliability of energy supply, 00:10:39.740 --> 00:10:41.899 the transition to clean energy may be slower. 00:10:42.700 --> 00:10:45.620 This is because people are likely to oppose strategies 00:10:45.620 --> 00:10:48.779 and policies seen as detrimental to their own 00:10:48.779 --> 00:10:52.220 economic well -being. As a result, they may be 00:10:52.220 --> 00:10:54.799 less likely to support plans that could increase 00:10:54.799 --> 00:10:59.259 energy bills or result in power shortages. Fossil 00:10:59.259 --> 00:11:02.440 fuels may eventually disappear, but politics 00:11:02.440 --> 00:11:06.000 and geopolitical factors will not. This means 00:11:06.000 --> 00:11:09.120 that even if renewable energy sources are available, 00:11:09.539 --> 00:11:12.620 they may not be economically viable or politically 00:11:12.620 --> 00:11:16.220 popular, making it difficult to completely transition 00:11:16.220 --> 00:11:21.299 away from fossil fuels. Oil became a strategic 00:11:21.299 --> 00:11:24.559 commodity during World War I. The Allied powers, 00:11:24.639 --> 00:11:27.019 mainly Britain, France, Russia and the United 00:11:27.019 --> 00:11:30.409 States, were able to win the war through a wave 00:11:30.409 --> 00:11:33.909 of oil. From then on, British security depended 00:11:33.909 --> 00:11:38.110 more on oil from Persia than coal as energy became 00:11:38.110 --> 00:11:41.610 a vital source of national power. The importance 00:11:41.610 --> 00:11:44.889 of oil was further cemented after World War II, 00:11:45.049 --> 00:11:48.129 when the United States and the Soviet Union competed 00:11:48.129 --> 00:11:51.230 to develop and control oil producing regions. 00:11:52.350 --> 00:11:54.970 Today, oil remains one of the most important 00:11:54.970 --> 00:11:57.789 commodities in the international market. with 00:11:57.789 --> 00:12:00.509 countries all around the world vying to control 00:12:00.509 --> 00:12:06.070 the resource. Countries blessed with natural 00:12:06.070 --> 00:12:09.230 gas and oil resources developed their economies 00:12:09.230 --> 00:12:11.710 and expanded their influence in the international 00:12:11.710 --> 00:12:15.070 system. Saudi Arabia is a prime example of a 00:12:15.070 --> 00:12:17.370 country that has benefited from its access to 00:12:17.370 --> 00:12:20.870 oil resources. The country is one of the largest 00:12:20.870 --> 00:12:24.129 producers of oil in the world, with its oil industry 00:12:24.129 --> 00:12:27.960 accounting for a large portion of its GDP. Another 00:12:27.960 --> 00:12:30.379 prominent oil producing nation is Venezuela, 00:12:31.120 --> 00:12:35.000 which has the world's largest oil reserves. Venezuela 00:12:35.000 --> 00:12:37.740 relies heavily on its oil industry for economic 00:12:37.740 --> 00:12:40.679 growth and has used its access to oil to gain 00:12:40.679 --> 00:12:43.940 influence in the international system. Those 00:12:43.940 --> 00:12:47.000 that were unable to meet oil demands were forced 00:12:47.000 --> 00:12:50.279 to change their foreign policies. This has led 00:12:50.279 --> 00:12:52.980 to a shift in power dynamics between nations. 00:12:53.279 --> 00:12:56.500 as those with access to oil have been able to 00:12:56.500 --> 00:12:59.779 make use of its economic advantages and increase 00:12:59.779 --> 00:13:02.100 their influence in the international system. 00:13:03.320 --> 00:13:05.980 Oil importing nations have had to adjust their 00:13:05.980 --> 00:13:09.879 foreign policies to ensure access to needed resources, 00:13:10.580 --> 00:13:13.799 while those who export oil have been able to 00:13:13.799 --> 00:13:17.379 use their access to oil as a lever in international 00:13:17.379 --> 00:13:23.139 negotiations. Saudi Arabia has not yet achieved 00:13:23.139 --> 00:13:26.419 a state where its revenues are entirely independent 00:13:26.419 --> 00:13:30.000 of oil. However, the nation has made significant 00:13:30.000 --> 00:13:32.720 strides in diversifying its economy, marking 00:13:32.720 --> 00:13:36.840 a pivotal shift in its financial landscape. In 00:13:36.840 --> 00:13:40.580 2024, Saudi Arabia's non -oil exports reached 00:13:40.580 --> 00:13:47.440 an unprecedented SR515 billion or $135 billion 00:13:47.980 --> 00:13:52.379 representing a 113 % increase since the launch 00:13:52.379 --> 00:13:56.759 of Vision 2030. This surge underscores the country's 00:13:56.759 --> 00:13:59.179 commitment to reducing its dependence on oil 00:13:59.179 --> 00:14:03.759 revenues. Furthermore, the non -oil sector's 00:14:03.759 --> 00:14:06.240 contribution to the Gross Domestic Product, or 00:14:06.240 --> 00:14:09.700 GDP, has seen notable growth. In the third quarter 00:14:09.700 --> 00:14:14.639 of 2024, non -oil GDP increased by 4 .3 % year 00:14:14.639 --> 00:14:18.659 on year, outpacing the oil sector's growth. This 00:14:18.659 --> 00:14:21.419 trend indicates a successful implementation of 00:14:21.419 --> 00:14:26.200 economic diversification strategies. These developments 00:14:26.200 --> 00:14:29.460 are part of Saudi Arabia's broader Vision 2030 00:14:29.460 --> 00:14:32.580 initiative, which aims to transform the economy 00:14:32.580 --> 00:14:36.039 by investing in sectors such as tourism, entertainment, 00:14:36.320 --> 00:14:39.820 and technology. Projects like the Red Sea Luxury 00:14:39.820 --> 00:14:43.820 Resorts and the Neom City are emblematic of this 00:14:43.820 --> 00:14:48.879 transformative vision. While oil remains a significant 00:14:48.879 --> 00:14:51.700 source of revenue, these advancements signify 00:14:51.700 --> 00:14:54.320 a proactive approach to economic diversification. 00:14:55.059 --> 00:14:58.259 The progress made thus far suggests a promising 00:14:58.259 --> 00:15:01.179 trajectory towards a more balanced and sustainable 00:15:01.179 --> 00:15:06.980 economic future. In 2025, Saudi Arabia is intensifying 00:15:06.980 --> 00:15:09.759 its efforts to diversify its economy beyond oil, 00:15:10.320 --> 00:15:14.519 building up the momentum gained in 2024. The 00:15:14.519 --> 00:15:17.480 non -oil sector continues to expand, with non 00:15:17.480 --> 00:15:21.080 -oil GDP growing by 4 .2 % in the first quarter 00:15:21.080 --> 00:15:26.500 of 2025, outpacing overall GDP growth of 2 .7 00:15:26.500 --> 00:15:30.860 % during the same period. This growth is driven 00:15:30.860 --> 00:15:34.679 by robust performance in sectors such as finance, 00:15:35.100 --> 00:15:38.360 insurance, business services, and utilities, 00:15:38.960 --> 00:15:41.399 which are projected to see growth rates between 00:15:41.399 --> 00:15:47.600 5 % and 6%. Saudi Arabia is also making significant 00:15:47.600 --> 00:15:51.360 strides in expanding its non -oil exports. Re 00:15:51.360 --> 00:15:55.179 -exports have surged to SR 90 billion, marking 00:15:55.179 --> 00:15:59.799 a 205 % increase since the launch of Vision 2030. 00:16:00.639 --> 00:16:03.299 Services exports have reached an all -time high 00:16:03.299 --> 00:16:08.330 of SR 207 billion. reflecting a 14 % year -on 00:16:08.330 --> 00:16:12.789 -year increase and a substantial 220 % rise since 00:16:12.789 --> 00:16:17.509 the inception of Vision 2030. To further diversify 00:16:17.509 --> 00:16:20.730 its energy sources and reduce domestic oil consumption, 00:16:21.409 --> 00:16:24.429 Saudi Arabia is pursuing a civil nuclear agreement 00:16:24.429 --> 00:16:27.450 with the United States. This initiative aims 00:16:27.450 --> 00:16:30.549 to support the country's energy needs for electricity 00:16:30.549 --> 00:16:34.179 generation and water desalination. aligning with 00:16:34.179 --> 00:16:38.700 the goals of Vision 2030. In the mining sector, 00:16:39.200 --> 00:16:41.620 Saudi Arabia is engaging in discussions with 00:16:41.620 --> 00:16:44.480 the United States to establish cooperation in 00:16:44.480 --> 00:16:48.039 mining and mineral resources. The country has 00:16:48.039 --> 00:16:50.360 nearly doubled its estimated mineral reserves 00:16:50.360 --> 00:16:54.100 to $2 .5 trillion and is seeking partnerships 00:16:54.100 --> 00:16:56.980 to develop its mining industry, which is a key 00:16:56.980 --> 00:16:59.940 component of its economic diversification strategy. 00:17:01.519 --> 00:17:05.440 Tourism remains a focal point of Saudi Arabia's 00:17:05.440 --> 00:17:09.640 diversification efforts. The Amalab project, 00:17:10.099 --> 00:17:13.119 a luxury tourism destination along the Red Sea, 00:17:13.619 --> 00:17:17.720 is set to open its first phase in 2025, reaching 00:17:17.720 --> 00:17:21.940 multiple resorts and wellness centers. Similarly, 00:17:22.380 --> 00:17:25.339 the Red Sea project is progressing, with several 00:17:25.339 --> 00:17:29.299 resorts expected to open in 2025. enhancing the 00:17:29.299 --> 00:17:34.339 country's appeal as a global tourism hub. While 00:17:34.339 --> 00:17:36.839 these initiatives demonstrate Saudi Arabia's 00:17:36.839 --> 00:17:40.220 commitment to reducing its reliance on oil, challenges 00:17:40.220 --> 00:17:43.619 remain. The International Monetary Fund has adjusted 00:17:43.619 --> 00:17:46.960 the country's GDP growth forecast for 2025 to 00:17:46.960 --> 00:17:53.220 3%, citing a slower rebound in oil prices. Nonetheless, 00:17:53.579 --> 00:17:56.339 the continued growth of the non -oil sector and 00:17:56.339 --> 00:17:59.519 strategic investments in various industries indicate 00:17:59.519 --> 00:18:02.799 a promising trajectory towards a more diversified 00:18:02.799 --> 00:18:08.779 and sustainable economic future. The world's 00:18:08.779 --> 00:18:11.859 shift away from fossil fuels will have a profound 00:18:11.859 --> 00:18:15.500 impact on society. However, discussions about 00:18:15.500 --> 00:18:18.059 the future of energy often fail to address the 00:18:18.059 --> 00:18:21.500 most critical details. Despite global efforts 00:18:21.500 --> 00:18:24.990 to achieve net zero emissions, fossil fuels will 00:18:24.990 --> 00:18:29.589 continue to exist. In 2021, the International 00:18:29.589 --> 00:18:32.789 Energy Agency released a report estimating that 00:18:32.789 --> 00:18:35.990 to avoid dangerous levels of greenhouse gas emissions, 00:18:36.549 --> 00:18:40.130 the world should aim to reach net zero by 2050. 00:18:40.950 --> 00:18:43.950 This means the world would still use around half 00:18:43.950 --> 00:18:47.670 as much natural gas and one quarter as much oil. 00:18:48.269 --> 00:18:51.170 A Princeton University study revealed that even 00:18:51.170 --> 00:18:54.329 if the U .S. stopped using fossil fuels by 2050, 00:18:54.829 --> 00:18:57.730 it would still use around one quarter to half 00:18:57.730 --> 00:19:01.670 as much oil and gas as it does today. Despite 00:19:01.670 --> 00:19:05.190 this, energy producers could still enjoy tremendous 00:19:05.190 --> 00:19:10.349 advantages from their geological resources. The 00:19:10.349 --> 00:19:13.490 fluctuation of oil prices is expected to continue 00:19:13.490 --> 00:19:16.170 as the world transitions to a more sustainable 00:19:16.170 --> 00:19:19.769 energy system. This is why traditional suppliers 00:19:19.769 --> 00:19:22.269 can benefit from the uncertainty surrounding 00:19:22.269 --> 00:19:25.690 the future of oil. As renewable energy sources 00:19:25.690 --> 00:19:28.369 become more affordable and widely available, 00:19:28.849 --> 00:19:32.690 the demand for oil is expected to decline. This 00:19:32.690 --> 00:19:35.609 has led to the speculation in the market, causing 00:19:35.609 --> 00:19:39.529 oil prices to be volatile. This volatility creates 00:19:39.529 --> 00:19:42.029 opportunities for traditional suppliers to take 00:19:42.029 --> 00:19:45.130 advantage of the uncertainty and make profits 00:19:45.130 --> 00:19:49.319 from short term speculation. However, the combination 00:19:49.319 --> 00:19:52.140 of investor pressure and the lack of clarity 00:19:52.140 --> 00:19:55.619 about the future of oil could lead to a significant 00:19:55.619 --> 00:19:59.240 decline in investment levels. This could result 00:19:59.240 --> 00:20:02.160 in companies reducing their production, which 00:20:02.160 --> 00:20:04.839 in turn would cause a decrease in supply and 00:20:04.839 --> 00:20:08.519 an increase in prices. Furthermore, as the cost 00:20:08.519 --> 00:20:11.299 of renewable energy sources continues to decline, 00:20:11.980 --> 00:20:14.200 the demand for oil could gradually diminish. 00:20:14.519 --> 00:20:20.339 leading to a further decrease in prices. The 00:20:20.339 --> 00:20:22.900 uncertainty surrounding the future of oil prices 00:20:22.900 --> 00:20:26.019 could lead to frequent shortages causing higher 00:20:26.019 --> 00:20:29.740 and more volatile prices. This could also boost 00:20:29.740 --> 00:20:32.980 the power of the Organization of Petroleum Exporting 00:20:32.980 --> 00:20:37.660 Countries, OPEC. Its members, such as Saudi Arabia, 00:20:38.099 --> 00:20:41.420 have sufficient capacity to increase or decrease 00:20:41.420 --> 00:20:45.200 global production. OPEC's ability to influence 00:20:45.200 --> 00:20:48.220 the global oil market gives it considerable power 00:20:48.220 --> 00:20:50.960 and the uncertainty surrounding future prices 00:20:50.960 --> 00:20:53.640 could give it an even greater ability to control 00:20:53.640 --> 00:20:57.599 the market. This could lead to OPEC manipulating 00:20:57.599 --> 00:21:01.180 prices to its own benefit, resulting in shortages 00:21:01.180 --> 00:21:06.839 and higher prices. The shift toward a more sustainable 00:21:06.839 --> 00:21:09.519 energy system will also increase the influence 00:21:09.519 --> 00:21:12.930 of gas and oil exporters. While the demand for 00:21:12.930 --> 00:21:15.930 oil is expected to decline, it will still remain 00:21:15.930 --> 00:21:19.190 substantial for a long time. This is because 00:21:19.190 --> 00:21:22.470 renewable energy sources such as wind and solar 00:21:22.470 --> 00:21:25.990 are intermittent and require a backup system 00:21:25.990 --> 00:21:29.490 to provide reliable energy. This backup system 00:21:29.490 --> 00:21:32.630 is most often provided by natural gas and oil, 00:21:33.049 --> 00:21:35.769 which will still be in high demand for the foreseeable 00:21:35.769 --> 00:21:39.289 future. High cost producers such as Russia's 00:21:39.289 --> 00:21:42.019 Arctic Territory, and Canada could be forced 00:21:42.019 --> 00:21:45.119 out of the market as oil prices go down. These 00:21:45.119 --> 00:21:47.720 regions are considered high cost producers due 00:21:47.720 --> 00:21:50.279 to the higher costs associated with extracting 00:21:50.279 --> 00:21:54.680 oil. As the demand for oil decreases and renewable 00:21:54.680 --> 00:21:57.480 energy sources become more competitive, these 00:21:57.480 --> 00:22:00.339 higher costs could make it difficult for these 00:22:00.339 --> 00:22:03.839 producers to remain competitive. If oil prices 00:22:03.839 --> 00:22:07.339 decline, they may be unable to remain profitable 00:22:07.339 --> 00:22:12.259 and could be forced out of the markets. Some 00:22:12.259 --> 00:22:14.740 oil -producing nations that are seeking to be 00:22:14.740 --> 00:22:16.960 leaders in the fight against climate change, 00:22:17.220 --> 00:22:21.039 such as the US, Norway, and the UK, could restrict 00:22:21.039 --> 00:22:23.319 their domestic production in response to public 00:22:23.319 --> 00:22:26.160 pressure and the need to hasten the shift to 00:22:26.160 --> 00:22:30.119 low -carbon energy sources. These countries could 00:22:30.119 --> 00:22:33.039 set emission reduction targets, establish clean 00:22:33.039 --> 00:22:36.059 energy and efficiency standards, and incentivize 00:22:36.059 --> 00:22:39.940 the shift to renewable energy sources. They could 00:22:39.940 --> 00:22:43.279 also set limits on domestic production such as 00:22:43.279 --> 00:22:46.720 through taxes or quotas to reduce their emissions 00:22:46.720 --> 00:22:49.140 and encourage the transition to cleaner fuel 00:22:49.140 --> 00:22:53.019 sources. As a result of the reduction in financial 00:22:53.019 --> 00:22:56.660 institutions dependence on oil, Gulf states could 00:22:56.660 --> 00:23:00.119 grow their market shares. This could help them 00:23:00.119 --> 00:23:02.680 diversify their economies and make them more 00:23:02.680 --> 00:23:06.079 resilient to future economic shocks. Additionally, 00:23:06.460 --> 00:23:09.619 By setting emissions reduction targets, they 00:23:09.619 --> 00:23:12.119 could reduce their exposure to climate change 00:23:12.119 --> 00:23:15.819 risks, such as water scarcity, extreme temperatures, 00:23:16.240 --> 00:23:20.900 and flooding. The world's nations would gain 00:23:20.900 --> 00:23:23.579 more geopolitical clout if they supplied all 00:23:23.579 --> 00:23:27.079 of the oil that the world consumes. For instance, 00:23:27.480 --> 00:23:30.160 countries such as the U .S. and Argentina, which 00:23:30.160 --> 00:23:33.140 have large deposits of shale oil, can quickly 00:23:33.140 --> 00:23:36.769 bring their resources online. Shale oil is a 00:23:36.769 --> 00:23:39.930 type of oil extracted from shale rock formations 00:23:39.930 --> 00:23:43.349 using fracking. It is a relatively new source 00:23:43.349 --> 00:23:46.130 of petroleum and has been increasing in production 00:23:46.130 --> 00:23:49.869 in recent years. This can attract investors looking 00:23:49.869 --> 00:23:54.009 for faster payback periods. However, due to uncertainty 00:23:54.009 --> 00:23:57.490 about the long -term outlook for oil, investors 00:23:57.490 --> 00:24:01.190 may shy away from investing in the sector. The 00:24:01.190 --> 00:24:04.349 cost of extracting shale oil is high. and there 00:24:04.349 --> 00:24:06.970 is no guarantee of profitability in the long 00:24:06.970 --> 00:24:10.970 run. Additionally, the extraction process involves 00:24:10.970 --> 00:24:14.369 environmental risks such as water contamination, 00:24:14.950 --> 00:24:18.910 air pollution, and seismic activity. These risks 00:24:18.910 --> 00:24:22.529 can make investors wary of investing in the sector. 00:24:24.779 --> 00:24:28.160 In the natural gas market, small producers that 00:24:28.160 --> 00:24:30.640 can offer the cleanest and cheapest supply of 00:24:30.640 --> 00:24:33.700 gas will be able to increase their market shares. 00:24:34.420 --> 00:24:36.900 As the world starts using less gas, the cost 00:24:36.900 --> 00:24:40.240 of production will rise. Companies that can produce 00:24:40.240 --> 00:24:42.460 gas more cheaply and with less environmental 00:24:42.460 --> 00:24:46.279 impact will have a competitive edge. Consumers 00:24:46.279 --> 00:24:48.839 and businesses are increasingly aware of the 00:24:48.839 --> 00:24:51.759 environmental costs of burning gas and are looking 00:24:51.759 --> 00:24:55.180 for alternatives. This creates opportunities 00:24:55.180 --> 00:24:58.099 for smaller producers that can provide cleaner 00:24:58.099 --> 00:25:01.240 and cheaper gas. If countries follow through 00:25:01.240 --> 00:25:04.099 with climate action and reduce production, this 00:25:04.099 --> 00:25:08.400 could grow their market shares. This will lead 00:25:08.400 --> 00:25:11.240 to an increase in Europe's reliance on Russian 00:25:11.240 --> 00:25:15.039 gas, as the Nord Stream 2 pipeline which connects 00:25:15.039 --> 00:25:18.140 Germany to Russia will boost the country's gas 00:25:18.140 --> 00:25:21.779 consumption. The pipeline provides a direct route 00:25:21.779 --> 00:25:25.460 for Russian gas to reach Germany, bypassing existing 00:25:25.460 --> 00:25:29.640 pipelines through Ukraine. This reduces the amount 00:25:29.640 --> 00:25:32.839 of transit fees Ukraine receives, leaving it 00:25:32.839 --> 00:25:35.839 with fewer resources to invest in its own energy 00:25:35.839 --> 00:25:39.460 sector. European lawmakers have urged Moscow 00:25:39.460 --> 00:25:42.519 to increase gas production to avoid an energy 00:25:42.519 --> 00:25:45.700 crisis this winter, highlighting Russia's growing 00:25:45.700 --> 00:25:49.220 importance to the region's energy security. However, 00:25:49.779 --> 00:25:52.500 Russia has been reluctant to increase gas production, 00:25:53.140 --> 00:25:57.059 fearing lower prices for its exports. This has 00:25:57.059 --> 00:25:59.700 led to concerns about the reliability of Russian 00:25:59.700 --> 00:26:02.559 gas supplies and the overall energy security 00:26:02.559 --> 00:26:06.339 of Europe. The uncertainty has caused energy 00:26:06.339 --> 00:26:09.720 prices to rise, putting a strain on businesses 00:26:09.720 --> 00:26:13.039 and households in Europe and increasing tensions 00:26:13.039 --> 00:26:18.170 between Russia and the European Union. Understanding 00:26:18.170 --> 00:26:21.289 the geopolitical implications of a world transitioning 00:26:21.289 --> 00:26:24.789 away from fossil fuels is key to influencing 00:26:24.789 --> 00:26:28.450 decisions that affect the planet. Renewable energy 00:26:28.450 --> 00:26:31.849 sources require significant investments in infrastructure 00:26:31.849 --> 00:26:35.150 and technology. Political cooperation between 00:26:35.150 --> 00:26:38.190 countries is essential to ensure this investment 00:26:38.190 --> 00:26:41.009 occurs and that the planet is protected from 00:26:41.009 --> 00:26:44.960 climate change. Governments must prioritize long 00:26:44.960 --> 00:26:47.880 -term planning and investments in renewable energy 00:26:47.880 --> 00:26:51.160 and infrastructure. The reality is different 00:26:51.160 --> 00:26:54.259 from what most people believe, and the transition 00:26:54.259 --> 00:26:57.059 will be very different from what most governments 00:26:57.059 --> 00:27:00.519 have planned. Governments must recognize that 00:27:00.519 --> 00:27:03.180 this transition requires planning and investment, 00:27:03.680 --> 00:27:05.880 and they will need to work in partnership with 00:27:05.880 --> 00:27:08.779 other countries to ensure the necessary resources 00:27:08.779 --> 00:27:13.460 and technology are available. Furthermore, this 00:27:13.460 --> 00:27:16.579 transition will not be quick and it will require 00:27:16.579 --> 00:27:20.019 long -term planning and investment. In the long 00:27:20.019 --> 00:27:23.519 term, cheap capital and innovation will determine 00:27:23.519 --> 00:27:26.700 which countries dominate the clean energy revolution. 00:27:28.519 --> 00:27:31.460 As we navigate through the rest of 2025, the 00:27:31.460 --> 00:27:34.380 global energy landscape is marked by a complex 00:27:34.380 --> 00:27:38.059 interplay of economic, geopolitical, and technological 00:27:38.059 --> 00:27:42.509 factors. In the United States, the administration's 00:27:42.509 --> 00:27:46.009 protectionist trade policies, including the imposition 00:27:46.009 --> 00:27:49.089 of tariffs, have led to economic uncertainties. 00:27:49.750 --> 00:27:52.210 These measures have impacted investor confidence 00:27:52.210 --> 00:27:55.710 and slowed down new drilling activities, particularly 00:27:55.710 --> 00:27:59.289 in the oil and gas sectors. The resulting economic 00:27:59.289 --> 00:28:02.470 contradiction in the first quarter of 2025 has 00:28:02.470 --> 00:28:07.720 further complicated the energy outlook. Trade 00:28:07.720 --> 00:28:10.559 tensions have contributed to a decrease in oil 00:28:10.559 --> 00:28:13.900 demand growth. The International Energy Agency, 00:28:14.220 --> 00:28:18.779 IEA, has revised its 2025 global oil demand growth 00:28:18.779 --> 00:28:23.700 forecast to 730 ,000 barrels per day, citing 00:28:23.700 --> 00:28:27.380 escalation trade tensions and a slowdown in economic 00:28:27.380 --> 00:28:31.059 activity. These factors have led to a more cautious 00:28:31.059 --> 00:28:34.019 approach among energy producers and investors. 00:28:35.470 --> 00:28:39.130 Despite these challenges, there has been significant 00:28:39.130 --> 00:28:42.589 progress in renewable energy adoption. The United 00:28:42.589 --> 00:28:46.369 States has seen renewables outpace coal in electricity 00:28:46.369 --> 00:28:49.869 production, with wind and solar generating more 00:28:49.869 --> 00:28:53.150 power than coal for the first time. This shift 00:28:53.150 --> 00:28:56.470 indicates a positive trend towards cleaner energy 00:28:56.470 --> 00:29:01.329 sources. However, the transition is not without 00:29:01.329 --> 00:29:04.559 its hurdles. The global goal of achieving net 00:29:04.559 --> 00:29:08.400 -zero emissions by 2050 faces significant challenges, 00:29:09.079 --> 00:29:11.259 including the vast scale of transforming the 00:29:11.259 --> 00:29:16.799 current $115 trillion global energy system. The 00:29:16.799 --> 00:29:20.099 transition from fossil fuels to renewables such 00:29:20.099 --> 00:29:23.660 as wind, solar, and hydrogen is progressing slower 00:29:23.660 --> 00:29:28.740 and more unevenly than expected. Political, economic, 00:29:29.019 --> 00:29:32.220 and infrastructural limitations especially in 00:29:32.220 --> 00:29:37.240 developing countries, complicate progress. As 00:29:37.240 --> 00:29:40.619 we move into the latter half of 2025 and beyond, 00:29:41.160 --> 00:29:44.079 the energy sector is expected to continue grappling 00:29:44.079 --> 00:29:47.420 with these multifaceted challenges. The balance 00:29:47.420 --> 00:29:50.059 between advancing renewable energy initiatives 00:29:50.059 --> 00:29:53.700 and managing economic and geopolitical complexities 00:29:53.700 --> 00:29:57.440 will be crucial. Stakeholders across the globe 00:29:57.529 --> 00:30:00.769 will need to collaborate and innovate to navigate 00:30:00.769 --> 00:30:05.170 this transitional period effectively. In summary, 00:30:05.690 --> 00:30:09.329 2025 has been a year of both progress and setbacks 00:30:09.329 --> 00:30:13.049 in the global energy transition. While strides 00:30:13.049 --> 00:30:15.589 have been made in renewable energy adoption, 00:30:16.349 --> 00:30:19.009 economic and geopolitical factors have introduced 00:30:19.009 --> 00:30:22.390 new challenges. The path forward will require 00:30:22.390 --> 00:30:25.230 concerted efforts to address these issues and 00:30:25.230 --> 00:30:27.980 accelerate the shift towards a more sustainable 00:30:27.980 --> 00:30:33.259 energy future. But before we conclude this episode, 00:30:33.660 --> 00:30:37.420 let's consider another perspective. Some argue 00:30:37.420 --> 00:30:40.319 that fossil fuels might be more beneficial for 00:30:40.319 --> 00:30:43.920 our planet than we realize. Without fossil fuels, 00:30:44.140 --> 00:30:46.920 we might have resorted to cutting down all the 00:30:46.920 --> 00:30:50.099 trees for energy. Additionally, fossil fuels 00:30:50.099 --> 00:30:53.259 have saved whales. as we previously relied on 00:30:53.259 --> 00:30:55.740 whale oil for various products before fossil 00:30:55.740 --> 00:30:59.259 fuels became prevalent. Therefore, those who 00:30:59.259 --> 00:31:01.960 want to save the whales might appreciate our 00:31:01.960 --> 00:31:06.839 use of fossil fuels. However, is transitioning 00:31:06.839 --> 00:31:11.079 away from fossil fuels an unrealistic goal? Many 00:31:11.079 --> 00:31:13.700 climate change issues revolve around controlling 00:31:13.700 --> 00:31:17.640 our energy resources. If we move away from fossil 00:31:17.640 --> 00:31:20.960 fuels and rely entirely on electricity, We must 00:31:20.960 --> 00:31:23.440 consider that the necessary minerals for this 00:31:23.440 --> 00:31:26.460 transition are often mined under harsh conditions. 00:31:27.339 --> 00:31:30.220 Many of these minerals are extracted by laborers 00:31:30.220 --> 00:31:33.119 in countries with authoritarian regimes, where 00:31:33.119 --> 00:31:37.680 exploitation is rampant. These regimes exploit 00:31:37.680 --> 00:31:40.460 their citizens, making it challenging to view 00:31:40.460 --> 00:31:43.339 this as a viable alternative to fossil fuels. 00:31:44.180 --> 00:31:47.019 Fossil fuels generate revenue by extracting resources 00:31:47.019 --> 00:31:49.920 from the ground which involve less exploitation 00:31:50.079 --> 00:31:54.839 compared to forced labor. There is also a debate 00:31:54.839 --> 00:31:58.079 about the motivations behind climate change research. 00:31:58.700 --> 00:32:01.700 Some claim that scientists who affirm climate 00:32:01.700 --> 00:32:05.400 change receive grant money while those who dissent 00:32:05.400 --> 00:32:09.099 face budget cuts and black listing. This has 00:32:09.099 --> 00:32:12.140 led to a significant movement to change our energy 00:32:12.140 --> 00:32:15.359 resources. Changing our energy sources could 00:32:15.359 --> 00:32:20.619 shift global power dynamics. Looking ahead, we 00:32:20.619 --> 00:32:23.740 must balance the environmental benefits of reducing 00:32:23.740 --> 00:32:26.660 fossil fuel use with the ethical implications 00:32:26.660 --> 00:32:30.940 of alternative energy sources. Developing sustainable 00:32:30.940 --> 00:32:34.319 and ethical energy solutions is crucial. This 00:32:34.319 --> 00:32:37.279 includes investing in renewable energy technologies, 00:32:37.940 --> 00:32:41.160 improving mining practices, and ensuring fair 00:32:41.160 --> 00:32:44.660 labor conditions. By addressing these challenges, 00:32:44.910 --> 00:32:47.809 We can work towards a future where our energy 00:32:47.809 --> 00:32:51.369 resources are both environmentally friendly and 00:32:51.369 --> 00:32:56.490 ethically sourced. An approach that emphasizes 00:32:56.490 --> 00:32:59.589 the diversity of human experiences and the need 00:32:59.589 --> 00:33:02.970 to assimilate them is needed. We should also 00:33:02.970 --> 00:33:06.009 regularly draw conclusions and make comparisons. 00:33:06.950 --> 00:33:10.230 While we must be careful not to predict the future, 00:33:10.670 --> 00:33:13.849 we should always be humble. Despite the various 00:33:13.849 --> 00:33:16.410 factors that can affect the world's operations, 00:33:17.109 --> 00:33:19.890 geopolitics still reflects the importance of 00:33:19.890 --> 00:33:23.390 acknowledging limits. Through careful analysis, 00:33:23.849 --> 00:33:26.710 we can gain a deeper understanding of how the 00:33:26.710 --> 00:33:31.609 world functions in a certain way. The transition 00:33:31.609 --> 00:33:34.549 to a sustainable energy future is not merely 00:33:34.549 --> 00:33:37.690 an environmental necessity but a geopolitical 00:33:37.690 --> 00:33:41.150 and economic revolution. While the world grapples 00:33:41.150 --> 00:33:43.779 with climate change, The move away from fossil 00:33:43.779 --> 00:33:47.039 fuels reveals a landscape fraught with challenges 00:33:47.039 --> 00:33:50.980 and opportunities. Countries must navigate shifting 00:33:50.980 --> 00:33:54.420 alliances, market volatility, and technological 00:33:54.420 --> 00:33:57.420 uncertainties as they work toward a greener future. 00:33:58.619 --> 00:34:02.119 As we've discussed, the journey is complex, and 00:34:02.119 --> 00:34:05.740 its success hinges on collaboration, innovation, 00:34:06.099 --> 00:34:09.179 and a recognition of the diverse impacts this 00:34:09.179 --> 00:34:13.550 shift will have globally. Thank you for joining 00:34:13.550 --> 00:34:17.150 us, and stay tuned for more episodes that explore 00:34:17.150 --> 00:34:20.329 the critical intersections of diplomacy, energy, 00:34:20.869 --> 00:34:22.070 and international relations.