Episode 20 Oil Shocks and the Energy Tradeoff: Efficiency vs Resiliency

Wesley Herche, PhD – Co-founder of Sustainability Decoded, joins Emanuel Petrescu and Kevin Carney to explore the connection between energy, economic growth, supply chains, and human prosperity.

The conversation moves from oil shocks and strategic reserves to the hidden energy inside everyday life, the limits of just-in-time systems, and why resilience often loses to short-term cost savings. Solar power, China’s manufacturing scale, Pakistan’s distributed solar growth, batteries, grid design, energy sovereignty, nuclear power, comparative advantage, and the future of human innovation all become part of a broader discussion about how societies power themselves.

Episode Show Notes

Hosts

Emanuel Petrescu
Kevin Carney

Guest

Wesley Herche, PhD – Co-founder of Sustainability Decoded 

Topics covered

Energy as the foundation of modern prosperity
Oil shocks and the Strait of Hormuz
Efficiency versus resiliency in global systems
Buckminster Fuller and the concept of energy slaves
Fossil fuels as stored solar energy
Supply chain fragility and just-in-time inventory
Puerto Rico, pharmaceuticals, and intravenous bag production
Capital allocation and long-term resilience
Globalization, energy independence, and oil refining
Light sweet crude, heavy sour crude, and refinery constraints
Comparative advantage and trade
China’s solar manufacturing scale
Solar, batteries, heat pumps, and electrification
Pakistan’s distributed solar adoption
Grid design, community solar, and virtual power plants
Battery storage and peak demand
Nuclear power, SMRs, cost, and infrastructure vulnerability
Energy, innovation, the space race, and the future of human thriving
James Watt, steam engines, and horsepower

Episode Timestamps

0:00 – Intro & podcast promotion

1:19 – Guest introduction: Dr. Wesley Herche

2:22 – Energy as the foundation of civilization

3:59 – GDP and energy consumption correlation

5:03 – Efficiency vs. resiliency framing

5:53 – Capitalism exploits energy, not just workers

6:39 – Buckminster Fuller’s “energy slaves” concept

7:28 – All energy is solar energy

8:38 – Nuclear energy and fusion explained

9:30 – How much energy does the sun deliver?

12:11 – Charlie Munger on fossil fuels as a national treasure

13:00 – The case for transitioning away from oil

15:33 – The Strait of Hormuz crisis and the surge in solar/EVs

12:55 – Intravenous bag shortage after Puerto Rico hurricane

13:50 – Just-in-time inventory and supply chain fragility

14:36 – Why markets resist building resilience

16:28 – Capitalism and short-term decision-making

17:04 – Rory Sutherland and quarterly metrics vs. long-term thinking

22:40 – Could Canada or the US achieve energy independence?

23:01 – Light sweet vs. heavy sour crude — the US oil paradox

26:27 – Comparative advantage and why oil trade works the way it does

34:00 – China’s solar dominance: more panels in 6 months than the US in 60 years

35:20 – Kevin’s challenge to pure comparative advantage theory

36:43 – Why China violated Ricardian rules and won

38:53 – China’s path from silicon wafers to solar panels

45:22 – Pakistan’s bottom-up solar revolution

51:15 – Distributed energy production and grid benefits

55:13 – Prosumers and energy sovereignty

57:50 – Should we talk about nuclear?

1:02:36 – Nuclear’s negative learning curve

1:03:36 – Small modular reactors: promise vs. reality

1:05:07 – Renaming nuclear for better marketing

1:06:02 – France and China as nuclear success stories

1:07:10 – DARPA, government R&D, and the iPhone analogy

1:12:14 – Mariana Mazzucato: the role of government in innovation

1:14:46 – Energy for space exploration and Mars colonization

1:18:15 – The space race gave us the microchip

1:21:33 – Where to find Wes (LinkedIn, sustainabilitydecoded.com)

1:24:39 – Why do we measure energy in horsepower? (James Watt story)

1:26:52 – Outro

Episode Links

Curious Pundits: https://curiouspundits.com/

Sustainability Decoded: https://www.sustainabilitydecoded.com/

LinkedIn profile of Wesley Herche: https://www.linkedin.com/in/herche/

Peak Oil, by Stuart McMillem: https://www.stuartmcmillen.com/comic/peak-oil/

Decoder Special Report: The Jugaad (Bottom-Up) Energy Revolution https://sustainabilitydecoded.beehiiv.com/p/decoder-special-report-the-bottom-up-energy-revolution

Rory Sutherland on how nuclear power is the worst marketed good idea ever!!! https://www.youtube.com/shorts/bBaYwXFmgWE

Rory Sutherland on why we measure power in Horsepower https://www.youtube.com/shorts/QSZaI-w8oO0

About the Podcast

Hosted by Kevin Carney and Emanuel Petrescu, two curious minds exploring ideas, culture, and everything in between. Curious Pundits is a conversational podcast where each episode starts with a topic that caught our attention and unfolds into thoughtful, unscripted discussion. We follow curiosity wherever it leads, across disciplines, opinions, and perspectives, without pretending to have all the answers.

Their main ventures are https://1307.digital/ (Emanuel) and https://organicgrowth.biz/ (Kevin).

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Entities mentioned in the podcast

People

Emanuel Petrescu
Kevin Carney
Wesley Hersh
Buckminster Fuller
Stuart McMillen
Charlie Munger
Rory Sutherland
Alvin Toffler
Gary Dirks
Bill McKibben
Jimmy Carr
David Ricardo
Bill Gates
Don Draper
James Watt
Mike Pasqualetti

Organizations and companies

Curious Pundits
Arizona State University
Boston Consulting Group
AWS
Amazon
Bell Labs
BP
BP Asia Pacific
Ember
NuScale
Oklo
Apple
Spotify
Stitcher
Amazon Music

Places and regions

United States
Canada
Puerto Rico
Iowa
North Dakota
Arizona
California
Toronto
Romania
China
France
Pakistan
Shanghai
Murray Hill, New Jersey
West Texas
Mexico
Caribbean
Persian Gulf
Middle East
Strait of Hormuz
Americas
United Kingdom
Australia
New Zealand

Books, media, and resources

Future Shock
Sustainability Decoded
The Thread of Energy
Stuart McMillen comic
TikTok
WhatsApp
LinkedIn

Concepts and frameworks

Efficiency versus resiliency
Energy slaves
Solar energy
Fossil fuels
Oil shocks
Strategic reserves
Global GDP
Energy consumption
Industrial Revolution
Comparative advantage
Ricardian comparative advantage
Just-in-time inventory
Supply chain resilience
Energy independence
Energy sovereignty
Kardashev scale
Type I civilization
Type II civilization
Type III civilization
Negative externalities
Carbon capture
Electrotech
Prosumer
Prosumption
Virtual power plant
Community solar
Moore’s Law
Wright’s Law
Learning curve
Small modular reactors
Nuclear marketing
Horsepower

Energy sources and technologies

Oil
Gasoline
Coal
Natural gas
Light sweet crude
Heavy sour crude
Light sour crude
Heavy sweet crude
LNG
Solar panels
Photovoltaic energy
Wind energy
Hydro energy
Nuclear energy
Fusion
Fission
Electric vehicles
EVs
Heat pumps
Battery storage
Utility-scale batteries
Rooftop solar
Distributed solar
Gas peaker plants
Geothermal
Coal-fired power plants
Semiconductors
Silicon wafers

Infrastructure and systems

Oil refineries
Power grid
Residential solar systems
Commercial solar systems
Nuclear power plants
Supply chains
Pharmaceutical production
Medical equipment production
Intravenous bags
Strategic oil reserves

Podcast platforms and channels mentioned

Curiouspundits.com
Apple
Spotify
Stitcher
Amazon

Transcript of the episode

​[00:00:18] Emanuel: Hi everyone, and welcome to another episode of the Curious Pundits podcast. My name is Emanuel, and I co-host this podcast alongside Kevin.

[00:00:27] Kevin: I’m Kevin.

[00:00:28] Emanuel: Today we have another very special guest. I’m gonna let Kevin make the introduction for this one, and I’m just gonna do a prompt because I’m a marketer that’s what I do every day, and I wouldn’t be much of a marketer if I wouldn’t ask any of our, the people who are watching or listening to this episode to go to curiouspundits.com. Over there they’ll find links to this episode, to previous episodes, to future episodes, and links to all the platforms where you like to listen to your podcasts: Apple, Spotify, Stitcher, Amazon, and I think there isn’t any other place where we’re not there. So if it’s a podcast platform, most likely we’re there.

Curiouspundits.com, that’s where you’ll find. Any share, comment will help us grow. Thank you so much for watching, and I’m passing along to Kevin to introduce our special guest today and the topic of course.

[00:01:19] Kevin: Actually, one more quick promo before we get to the topic and the guest is if you like the podcast, please give us a five-star rating on your favorite podcast platform, as that will help other thoughtful people find us.

So I have a personal curiosity, it might even verge on obsession, with the movement of stuff around the world, and the ultimate stuff, the commodity that allows us to make every other commodity, is oil. Right now, there’s a oil shock related to the hostilities in the Persian Gulf. And of course, that got me thinking about the future of energy. So the framing for this episode is efficiency versus resiliency, and today’s guest has a strong background on that. His name is Wesley. I may pronounce your last name incorrectly, and if I do, I apologize. Is it Herche?

[00:02:14] Wes: Herche. Yeah, you got it. You nailed it. Good job.

[00:02:18] Kevin: Dr. Wesley Herche. And at this point, please introduce yourself.

[00:02:22] Wes: Yeah. Hey, everyone Wes Herche. Thanks for having me on the show. Appreciate it. Yeah. I come from a background of being a former intelligence officer for the US government, and then transitioned to my career to energy and sustainability as an energy executive for renewable energy infrastructure, for supply chain decarbonization, and some related topics that I’ve worked on at a number of companies including Arizona State University, Boston Consulting Group, AWS and Amazon, and more recently, Prologis.

And yeah, excited to be here and dig into these topics. I’ve also been maybe borderline obsessed with what powers the world and how things move around and how we enjoy the sort of life that we live and what underpins that and how we can better shape that. So Yeah. Excited to dig into that.

[00:03:07] Kevin: I’d like to start a little high level, because we have this narrative in culture that capitalists exploit workers. It’s a common theme. And it’s not not true, but when you peel back the layers, what you really get is that capitalists exploit energy. The relative abundance in which we live is because we figured out how to turn energy into stuff. And way back when, that energy was provided by people, slaves, paid workers, and animals. But starting with the Industrial Revolution and the discovery of the ability to burn fossil fuels, we have ramped that up like never before. Somebody I know built a, a data correlation model between global GDP and global energy consumption, and they track one to one.

The correlation is .98. And when he also tracked the changes in energy consumption to the changes in GDP, they track as well. Every time energy consumption goes down, GDP does. Every time it goes up, GDP does. And right now, we’re in a situation where the conflict in the Middle East has basically choked off 20% of daily oil production, and what I’m reading is the reason that we’re not experiencing an 80% consumption limit right now is because various nations around the world are drawing down their strategic reserves. If this conflict continues to the point where those strategic reserves are depleted, then daily energy consumption cannot be 100 million barrels a day because it has to fall to match the daily production of 80 million barrels a day. And that means the global GDP drops by 20% and stays dropped until the oil starts flowing again.

So that’s what got me thinking about efficiency versus resiliency. Efficiency allows us to get oil really cheap until something happens and suddenly it’s not cheap anymore.

[00:05:15] Wes: Yeah. Yeah.

[00:05:17] Emanuel: Where do we start, huh?

[00:05:18] Wes: Yeah. So you put a lot on the table there starting with…

[00:05:20] Kevin: Yeah, sorry.

[00:05:21] Wes: Capitalism, right? And then oil and all the global markets of the world and energy.

[00:05:25] Kevin: I’m very pro-capitalism. I want to say that, right? But that concept of capitalists exploit workers, capitalists exploit energy.

[00:05:32] Wes: No, let’s start there. That’s actually a good place to start. So one thing I recommend looking up for your listeners is two things.

One Buckminster Fuller who I’ve read I think pretty much everything he’s ever written. A really interesting guy to look into. He came up with a term called energy slave. And that sounds more controversial than what it actually is. Probably not great at marketing, so Emanuel, maybe he could have hired you if you were around back then.

There’s a great comic by there’s a, an artist, a cartoonist, I think is Stuart McMillen. I think he’s out of Australia or New Zealand. It’s Stuart, S-T-U-A-R-T, and then M-C-M-I-L-L-E-N. He has a great comic book that illustrates this concept, and it’s like a digital comic book. You can flip through it.

But what Buckminster Fuller had an insight, I think back in the ’50s and ’60s to the point you mentioned, and I think a lot of people talk about, is how much energy capacity is contained within a barrel of oil. And I forget the exact conversion, but I think it’s the equivalent of, something like 10,000, I can’t remember, of hours of human output of work.

So if you just had a human, fueled by oatmeal or whatever it is you’re eating, and you were pushing like a sled, and you measured the weight of that sled and how far you moved it and what the friction resistance was, and you compared that to the energy capacity of a barrel of oil that would represent thousands of people working all day, right?

And that Buckminster Fuller said, “Hey, in some sense, like the services that you’re consuming them, when you get into a car and it drives, it’s as if there’s a bunch of people pushing that car for you,” which is the only thing you would have had, pre sort of fossil fuels. And the way he coined it was energy slaves, but there was the idea that you’re taking advantage of this energy that’s compressed and stored.

So that’s a good starting point. The other thing I would say is that luckily, oil is not the only form of energy we have, and we can talk about like where all energy comes from, which is always the sun. We can come back to that. All energy is solar energy not just photovoltaic energy. All energy is solar energy.

I think people sometimes have a hard time wrapping their head around that, so let’s take a tangent really quickly on that. The reason we have oil is because I think mostly phytoplankton and other organisms figured out how to take photons and turn those into chemical bonds, and those got stored and compressed, and over geologic time, got condensed and condensed down into different fossil fuels like coal and oil, being a big one, and then gas that’s also sort of part of the hydrocarbon mix.

So you’re re-releasing or reusing all of that energy that was built up over millions of years. You also have other forms of energy which are also solar energy, like wind as an example. It’s another renewable energy. You say that’s a different form of energy. That is solar energy because the sun heats the Earth but not evenly, and that temperature differential has to be relieved.

The pressure has to be relieved, and so we experience that as wind, right? Because the air is moving around to alleviate the pressure differential. You can harness that and capture that under wind turbines, and then it becomes energy that we can use again. Hydro is solar energy because the sun takes water and moves it from a low potential energy state up on a hill to a higher potential energy state, and then that runs back down because of gravity, and you’re able to capture that and its energy.

Some people always like to have a gotcha and say, “Ah, what about nuclear?” And it’s because the isotopes that we use to extract nuclear energy were formed in the accretion disk when the sun was forming, and that captured in the Earth’s crust, which is just a little part of the sun.

We’re able to extract that through fission, so nuclear energy is solar energy. They say, “Ah, what about fusion?”.

[00:08:57] Kevin: That question occurred to me, so thank you for answering in advance.

[00:09:00] Wes: I always get it. Say, “What about fusion, though?” It’s because you’re recreating the sun on the surface of the Earth, which if we can do, that’s great. I always figure we have a stable fusion reactor.

It’s been stable for four billion years. It delivers what is it? 100,000 or 10 million times more energy than humans will ever consume. So some other stats is there’s enough energy delivered in eight minutes to power the entire Earth for all human energy use on the surface of the Earth just from the sun, to power all human energy use for a year.

If you ran that clock forward for about four days, that represents all the energy that is in the Earth’s crust and fossil fuels. So all the known strategic predicted reserves anywhere that even can theoretically be harvested, you get that in about four days of solar, right? So we have plenty of energy, to be clear.

We are using energy that’s been trapped in the Earth’s crust through these processes over geologic time, and that’s great because, to your point there is a direct correlation, right? Where you see wow, let’s measure GDP over hundreds of thousands of years, and it’s flat for about 300,000 years, right?

And then it goes directly vertical, and that directly vertical happened with the discovery of fossil fuels, right? Because we were able to finally capture all that energy that had been stored up, that energy bank and stored up and stored up. But I think Charlie Munger made a really good point on this when he compared fossil fuels to the black soils of Iowa.

He said, “Hey, that is a national treasure in whatever country you’re in,” right? And he was like, and I’m not… His view was he’s not interested in depleting that as fast as possible, just like you wouldn’t be interested in depleting the soils of Iowa as fast as possible, because there’s a lot of use that comes out of that.

And we think a lot about powering an automobile or some other forms of energy. But to your point, with oil, it touches so many things and produces so many things that we would use. I think when we have other forms of, say the energy services that we need that we can get from other sources when it comes to powering a home, moving a car, moving a lot of light manufacturing and other pieces, as many of those as that we can move away from that really precious energy resource that took a very long time to build and has all of these other uses and is immensely fungible… you would want to save that.

Coming back to, and I’ll close with this Buckminster Fuller again made a point that If you actually calculated, and this was I think in, I can’t remember when he said this, maybe 1965, the value that you’re actually deriving from, say, a gallon of gasoline, or I think he was talking about a gallon of gasoline.

He said that should cost about $300,000 per gallon, right? That’s how much energy you’ve stored up over time in there. And then how much in terms of if you converted that directly to I think whatever minimum wage was at the time for physical human labor. We’re probably not pricing that correctly.

So and then we see that than the way we do currently. And I don’t know that we should price it at $300,000 a gallon, but I think as we have many, and I don’t wanna call them alternatives because I don’t think they’re very alternative anymore when they’re supplying like major portions of power and other sort of energy sources and energy services.

We have other forms of energy, then let’s allocate and use those in a way that makes the most sense and also minimizes the most negative externalities. So to your point the crisis in the Strait of Hormuz shutdown over the last six weeks is a great time to be thinking about that, right? Because it says, ah that, that thing you were gonna think about later, or remember the sort of simmering obsession that you had, like that’s becoming like a topic now that we need to deal with today.

And then by the way, we see the ramifications of this, right? Like in terms of the amount of uptick that we’ve seen in solar, in EVs, in heat pumps, in any type of electro tech has skyrocketed in the last three months, right? Ever since the Strait of Hormuz was shut down because, to your point, people realize… oh wait, we’ve taken so much of our economy and tied it to one thing, which again, is incredibly powerful, so it makes sense.

But should we be thinking about how we diversify that? And does that give us more resilience against when you have these shocks?

[00:12:55] Kevin: We have a bad habit of not learning from our past mistakes, and I’m gonna use a different manufactured item to illustrate the point. So about 10, 12 years ago, a hurricane came through the Caribbean, and the United States ran out of intravenous bags. So the connection was, it turns out almost all of the intravenous bags manufactured in the United States are manufactured on the island of Puerto Rico.

And when you combine that with a hurricane, shut down the factories and our addiction to just-in-time inventory, the US hospital system had to ration intravenous bags for four or six months until the factories could be reopened and production could be ramped up again.

Guess where we still manufacture intravenous vaccines, right? So why we didn’t learn a lesson in resiliency and maybe open factories in Iowa and North Dakota I don’t know. But we didn’t, right?

We’re just obsessed with the lowest possible cost per intravenous bag, right?

[00:13:57] Emanuel: Capitalism is the answer because it didn’t make sense economically to put a factory in some other place.

[00:14:04] Wes: Yeah, and if we can get a bit philosophical… the answer I think to your question is a systems dynamic answer, right? So one, let’s recognize, two, just as a side note, Puerto Rico doesn’t just produce intravenous bags. It produces an incredible amount of pharmaceuticals or medical equipment that I think is underappreciated by the rest of the United States, so I wanna get that on the table for one.

And these kind of shocks make that sort of very relevant, right? And present. The answer to your question, I think, is… this is gonna sound so oblique. I’ve never liked the expression, like people go around, say, in a neighborhood and there’s a few old houses, right? And maybe they’re built 100 years ago, and people say, “Wow, they just don’t make ’em like they used to. Look at that house. That looks great,” right?

And it’s oh, it’s sturdily built, well done, good craftsmanship, blah, blah, blah, and then we romanticize that. And do you know why? because all the other houses fell down because they weren’t built very well. They don’t exist anymore. The ones that still remain systemically are the ones that you see, and then you have a confirmation bias saying, “Wow, they just made great houses back in the day.”

No, they didn’t. They did not. Like most of the houses they made were awful, which is why they don’t exist anymore. Some were crafted… This is gonna sound very– Everybody’s gonna hate this, by the way, because we love to romanticize those things and say, “Ah that was, the good old days,” and whatever.

Most of the materials and the techniques and the things that we had were not great. Some were, and we tried to move those forward, right? And you see some examples of that.

My point here is that this is a result of the system, right? So some things will survive, and then we’ll see that, and that’ll be a confirmation bias in terms of what we see.

The same thing happens with markets when we say “Why don’t we diversify supply chains? Why don’t we have more resilient supply chains, et cetera?” And it’s because, to your point, if it’s very cheap to manufacture intravenous bags in Puerto Rico, and if you come to the table and say “But there might be a shock in the future, and so I wanna be positioned for that,” you have to then make that bet.

And to make that bet, you have to invest and allocate capital somewhere else, right? Maybe you wanna diversify to another area where it doesn’t have maybe that same type of vulnerability. But in order to do that, that capital has to be recouped somewhere. So now you have to charge more for intravenous bags, right?

And when the buyers are sitting there saying “this one or this one,” and you can go as your sales pitch and say “but I’m gonna be more resilient if there’s another hurricane in Puerto Rico.” And whatever procurement manager is going to say is “that’s great. We’ll solve that problem when it comes.”

And they’ll keep buying the cheapest one that’s a fraction of a penny cheaper, right? And then you say “why did that happen over and over again?” And a lot of times we attribute that to these sort of individual decisions. This is the point I was making with the house. I know it’s a very oblique thing where we’re like, “Oh, it’s about handcraftedness, and we wanna make a very personalized story around that,” right?

And say it’s about individual actors and decisions. But I think, and oftentimes, that is important, but I think we don’t appreciate the systemic environment that creates these decision factors over and over again. Now, if your bet happens to land at the right time where let’s say another version of this story is you diversify and you build in Iowa or Arizona or wherever, somewhere that doesn’t have hurricanes.

And then there is a hurricane, and then Puerto Rican production of intravenous bags shuts down, and you’re the only one on the block that’s selling intravenous bags, right? And you’re charging a high price for that. You might get accused of price gouging or whatever else, but you’re saying, “Oh, but I’m recouping that cost where I took that big bet.”

Now let’s take it one layer more, right? Not even just capitalism. Let’s think about how corporations work internally. If you’re the person that says, “Hey, look, I think we should make huge capital investments to go build another intravenous bag production facility in some place that doesn’t have hurricanes, because I have a belief that there’s gonna be another hurricane shock, and that’s gonna shut down Puerto Rican production, et cetera,” you gotta really stick your neck out there, right?

In terms of there’s real money on the line. You gotta really build that up. And you gotta think every leader, every executive then who’s trying to make that decision has to really also believe in that bet, right? And then think that a hurricane’s imminent, and we’re gonna shut down again, et cetera.

But those are some of the system dynamics I think that, that drag us into decisions that we know intuitively after the fact are not optimal. But it makes it very difficult beforehand, right? And so I think there’s probably parallels, and I imagine this is why you brought it up in terms of, like, how that works within the energy industry.

But again that’s why we lock into these systems because those individual decisions, you’d have to really go out and make a big bet. I think this is also why energy transitions or any type of transition takes a long time, right? Because you need time for those things where statistically you’re probably gonna be right, because there probably will be more hurricanes in Puerto Rico right?

But it’s like how much time will it take for that system to evolve into a place where, you know, that bet pays off. And so far, it sounds like with intravenous bags and production in the United States at least that it sounds like that remains in Puerto Rico. And maybe that will until again, there’s a big enough system shock to move that along.

[00:19:04] Kevin: Yeah. Yeah, one thing I don’t know about intravenous bags in particular, like another way of dealing with the eventuality of another severe hurricane in Puerto Rico is just to stockpile bags someplace, right? To carry you through the duration when they’re not being manufactured. Maybe we’re doing that and I just don’t know it, right?

[00:19:22] Wes: So again, that comes down to capital allocation, right? because those bags aren’t free to stockpile.

[00:19:27] Kevin: But that’s a lot cheaper than building a new factory.

[00:19:29] Wes: Yes. Yeah. So maybe that’s… Yeah, totally. That could be a different way to stopgap that, right? But even then and your point about, like, why are we locked into just in time, what’s the guy? Rory Sutherland a great, another great marketing guy actually, Emanuel, makes this point all the time.

[00:19:43] Emanuel: I know him. Yeah.

[00:19:44] Wes: Because the decision and the quarterly metrics always drive that immediacy on what’s the immediate way to cut costs, not what’s the long-term way to make profit. And when those two are at opposition, the immediate way to cut costs this quarter that boosts the P&L this quarter almost always wins.

It’s very hard, and if you look, the same talk I was watching where Rory made the point, and he was talking about commercials, which I thought was interesting. He said that last year, like four out of the five of the companies that won awards for having the most interesting marketing and commercials, et cetera, were all family companies.

And his theory on that was that it’s because family companies might be able to take a longer-term view and to think about that long-term customer relationship, that strategy, et cetera. But if you’re a publicly traded Fortune 500 company, Fortune 2000 company, it’s very hard. There’s immense pressure to… and what I mean by immense pressure, again, it comes back to that ecosystem or systems thing. You could be the person who says “no, I’m not gonna do that. I’m gonna think long term,” and then you might find you don’t have a job, and then you’re not there to make that change, right? And then who survives?

The people that said, “I’m gonna cut costs this quarter. I’m gonna make that decision to go back to the cheapest place to get intravenous bags”, the ones that don’t stockpile them, so they’re not charging a premium, and they’re not building a factory in Iowa, so it’s not upping the price per unit. And someone says, “That’s a great decision. We can immediately measure the impact of that.”

And then you’re like, “Ah that’s the system dynamic pushing towards that.” My point with all this is it’s not that it’s impossible to change or to throw up your hands, but I think it’s really important when we say “Okay how are we gonna tackle these big systemic issues?”

You have to really know what you’re up against. You have to really understand the, what are the dynamics that the ecosystem that makes that sort of, those type of decisions emerge more often than not. And then you can understand how you might want to affect change in those areas.

[00:21:28] Emanuel: Then that prompts me to the question, what are the dynamics today? Just to give some context, we are recording this somewhere close to middle of May 2026, where I like to say the world is upside down. You have– It’s the best time to be alive as well, I totally agree. I don’t think they don’t make them as they used to.

You don’t actually want to drive a car that was made like it was in 1970 perhaps.

The design, yeah, might be nostalgic to it and some of them look cool, but the mechanism I’m pretty sure that 80% of today’s drivers won’t be able to drive it out of the parking way. But given all this and also say moving back to energy consumption, what are we doing globally and also locally if that may say.

You’re in the US, Kevin is in the US, I’m in Canada. So one could argue the dynamics are a little bit different. One of our previous guests, and I tend to agree, Canada is probably the only country that could shut down their borders and live okay with everything that they have, especially energy for sure. But globally and locally, what are the dynamics today given what’s happening and all these constraints?

[00:22:40] Wes: Yeah. First let’s tackle the premise of could Canada shut down? So it’s interesting. Let’s start with the fungibility of oil. We talked about how oil is highly fungible in terms of the products that it can create and how you can export and import products. But I think sometimes we confuse net exporter of, let’s say, oil or fossil fuels in general as synonymous with energy independence.

That is not true. I wanna disavail anyone of that assumption. Let’s take the United States as an example, because that’s where I live and what I probably know the most about. We export more oil and technically oil products than we import. So you’d say, “Wow, okay, great. We’re energy independent. More oil goes out than goes in, so we’re doing just fine.”

This is not the case. So just to get into the basics of oil, we don’t have to deep dive on this. Imagine a two-by-two matrix, right? Four quadrants. And this is how this is a basic starting point for oil. On the one hand, you have light versus heavy in terms of crude oil.

And the types of refineries that are set up for light crude oils cannot refine heavy crude oils and vice versa. To update those takes sometimes up to and sometimes exceeding a billion dollars per refinery and takes years. It’s not a quick thing to, to switch that. It can take five, six, sometimes even more years to switch.

There’s also you’ve heard maybe sweet versus sour. I know that sounds weird but it’s actually the sulfur content. And apparently the prospectors back in the day, particularly in the US, they used to taste the oil to see how much sulfur content it had. And lower sulfur content is a sweeter oil, quote-unquote, and higher sulfur content, the sour smell.

So you have that quadrant, right? So you have light sweet or heavy sour or light sour or which one did I miss? Heavy sweet, yes. So those are the four quadrants, right? A refinery for upstream and midstream refinery is set up for one of those four. There’s actually nuance in between there as well, so it gets a little more technical than that.

But even just taking those four, and again, you can’t just switch really quickly. So in the United States, we extract from the earth, our upstream, is mostly light sweet crude. You hear this a lot in West Texas and other places where we pull a lot of light sweet crude out of the ground. We do not refine light sweet crude.

We refine crudes that mostly come from Canada, actually, I think about 70%. The next biggest chunk comes from Mexico, and then there’s about 10% that’s a smattering mostly from other countries in the Americas. So could Canada withstand economically no longer exporting this massive amount of their crude oil to the United States if we really put walls around all these countries?

Maybe, right? Maybe we all could if we spent billions and probably trillions and then switched what types of refineries we have. We have not chosen to do this goes back to your point about just-in-time markets, because it is not financially or economically optimal in any way. The reason we’ve globalized over the last 100 plus years is because it makes way more economic sense to do and the world has prospered for that.

Now, should we reverse course and every country become super insular and build walls around themselves? We could do, right? I’d argue, like you’d also regress economically back to the levels when you didn’t have a global economy, right? Now you might still have lots of energy and oil and other technologies but I think, again, this is these sort of nostalgic notions around oh, more self-reliance and less like dependent…

And I get it, right? The feeling’s very real. I don’t wanna downplay that, right? When you don’t really… and you wouldn’t, like you’re trying to go to work day to day raise your family, live a life that, that you are proud of, right? And things are happening in other parts of the country some of which your country may or may not been involved with, and then all of a sudden, like you’re having a really hard time paying to fuel your car to get to work.

You have a really hard time feeding your family. And you get this sense like, that sounds like all that craziness over there, I just wanna insulate from that. And if we just circled the wagons and protected our own, like then we wouldn’t have to deal with any of that. And I get that. That comes from a place of I think we shouldn’t dismiss where that emotion comes from.

But at the same time, we have built over the last hundreds of years, again, through fossil fuels and through global markets and through the combination of both energy and those abilities to deliver products and services wherever they can be best produced and then best consumed, that has lifted billions of people out of poverty, right?

We forget that… I know that number sounds just ah, whatever, right? We lifted billions of people out of poverty. If you go back two hundred years not only did absolute poverty, even though the population was way less, there were still more human beings living in poverty two hundred years ago than today.

And then the percentage is from, what was it, eighty-some percent plus living in poverty to twenty-some percent living in absolute abject poverty today. So both the percentage and the total numbers are better. And again, that was all derived from the global economy that we have now.

Is it perfect? No. Does it have a lot of problems? Absolutely. But I, I’m not personally in favor of trying to revert back to a world where you put, artificial or real giant sort of walls around everything and then think about how you isolate your country from the rest of the world and then see if you can survive.

Again, you probably could. Some countries would do better than others. Certainly, countries in North America are blessed with a lot of resources. But I just, I don’t think that as a whole, as a species, we would benefit more than the situation we’re in now. And my focus is thinking about how do we take the best of what those systems have delivered and then try to build an even better world for the future versus I’m not interested in reverting back to something or, again closing ranks because these things seem scary or new or different or uncomfortable.

[00:28:26] Emanuel: Speaking of species and civilizations as well, there are the scales, the metrics of measuring a civilization based on the energy consumption.

And I think we touched that before a little bit, but maybe wanna go there into the not necessarily fantasy, not necessarily sci-fi, but future, into the future, and where would we be today?

[00:28:49] Wes: Yeah. I think we talked before when the three of us had talked about, I think it was the Kardashev scale. So if you’re, if your listeners wanna look that up, it’s interesting. It’s usually talked about in terms of sci-fi, but it is a real measurement, right? We are currently not yet a type I civilization.

A type I civilization, I believe, would be able to utilize all of the power that’s generated by their star but from the Earth. And then I forget type II and III. I think II is you’re actually controlling the star and harness it directly, and then type III is you’re doing the same at a galactic level.

I could be off on that, so someone correct me in the comments if I got that off. I know we are not yet type one. We’re like type zero point seven or something in terms of the amount of energy we’re able to leverage and harness. The thing I do like about thinking about the Kardashev scale is it reorients you to– It’s very different, like when you live a life as a human running around the planet and your mental relationship to the sun is not at the appropriate scale for what’s actually happening in the universe, right?

So I know this is gonna sound super esoteric, but I’ll try to land this. So you walk around on the planet, the sun in the sky is physically about the same size as the moon. It’s actually literally millions and millions of times bigger. It’s just so far away, but it looks about that big. You see some clouds come, and you say that’s whatever.

Sun kinda went away. These clouds blocked it out. By the way, if you’re into– like if you look at even the the ancient religion of the Greeks, right? Zeus was more, far more powerful than Apollo, and he controlled the clouds because he could block out the sun, right? So we’ve mentally had this picture for thousands of years that the sun is just something that sits there, but it’s important, it’s not that important. And it turns night, right? The Earth rotates around, and we turn our backs to the sun, and then we see it again the next day. What we don’t think of– And then often hear th-there’s no solar at night, and the sun, and then there’s clouds,” et cetera. And I always think “Okay true.”

It’s like the sun is about a million times the volume of the Earth and again, produces so much energy like that actually hits the Earth through all the clouds and everything that it’s just, it’s s- it’s so much energy. It’s unfathomable. It’s compared to the actual energy consumed and used on the planet.

You think about what are all the different ways you could immediately and over time harness that. So when you think of these Kardashev scales, you start thinking at oh, that’s where all the energy in the entire universe actually comes from. Everything else that we do on this planet and how we harness that are these little tricks and little hacks that we’ve had.

Now, go back to how fossil fuels are created. It wasn’t just the, the millions of years ago that started. As far as we know organisms evolved to figure out photosynthesis on this planet maybe about half a billion years after the planet was formed and cool enough for any life to exist.

And as soon as they did, that one simple trick people that have been around the Internet for a while know that used to be a meme, right? Made plants the most dominant species for three billion years. Still are. And so then when I hear stuff like I don’t know about solar because of nighttime or clouds,” and I was like, “Yeah, remember why we used to have plants but they all went away because it was cloudy one day?”

It’s no there’s plants all over the Earth a reason, right? because again, if you figure out that one simple trick of how to harness that energy directly- You immediately become the most dominant species on the planet for billions of years. That’s exactly what happened on this planet, right?

And it makes sense, because that’s an abundance of energy. So anyway, these Kardashev scales and thinking about this now, does that change what I do tomorrow when I wake up in the morning? No. But it helps you start to think in scales that you’re like, “Oh yeah, we’ll have no problem building an energy system that is able to capture and harness that.”

[00:32:22] Kevin: An economist that I pay attention to recently came up with a pithy little response to that complaint.

It’s “The sun doesn’t always shine. The wind doesn’t always blow.” And he’s “Oh, yeah? The Strait of Hormuz is not always open.”

[00:32:34] Wes: Sure. Yeah, true. Yeah. Yeah, I think it was Bill McKibben said that every photon travels, what is it? It’s, I forget how many hundreds of millions of miles, and none of them traverse the Strait of Hormuz, so yeah. Yeah, it’s true, right? It’s delivered all over the planet. And again, I’m very bullish on solar for obvious reasons that maybe I’ve elucidated here.

But the bigger picture is there’s so much energy abundance that part I’m not worried about. So much energy abundance, then I start thinking about then great what are the jobs to be done for those energy tools? And what’s the best way you can configure that so that you get the maximum sort of output which you want, which is human thriving and abundance with the least amount of external harm or economists call them externality or negative externalities, right?

These are things that like, hey if, as an example, and a colleague and friend of mine, Gary Dirks, who’s at Arizona State University, made this point all the time. He worked in oil and gas for British Petroleum for years before he was there. Said, “Look if oil didn’t have negative externalities, like if it didn’t emit carbon while you’re burning it, you would think it was a miracle”.

It’d be the greatest thing ever, right? And in some ways, it still is, literally. It’s amazing. Then you say ” but it comes with negative externalities.” So you think about, okay, great, then you use that for as much as you can until you can build a better energy system or you can figure out a way you could look at carbon capture or other things that try to address those negative externalities or start to build your economy around what those other tools are that you have.

But again, that takes time because you’re talking about systemic change, but there’s plenty of options on the table for doing that.

[00:34:06] Kevin: I would like to talk about possible ways of moving into the future in terms of future energy systems, but I’m really interested in how the United States developed a system where we produce a lot of light sweet crude and yet are set up to refine heavy sour.

If you go back far enough in time, every oil industry was domestic because it was a brand new industry, it had just been invented, and it just seems to make sense that you would refine what you are pumping because the industry is so small, it’s domestic. And yet somehow over time we deviated from that. Like, how did that happen?

[00:34:47] Wes: Yeah. So I’m gonna misquote it, and then my MBA professors are gonna be mad at me. Was it a… I wanna say it was a Portuguese economist. I could be wrong on that. It goes back to the idea of comparative advantage, right? This is whether you’re thinking about it at any unit, whether it’s a national unit, whether it’s a state-by-state unit, whether it’s one village trading with another, it’s a matter of comparative advantage.

Could you try to build and consume every single thing you need, right? So if you the easier way to understand this is take the most extreme example. So when you’re talking about nation to nation, it’s still quite abstract, right? Because I can’t comprehend three hundred million people, say, in the United States.

Let’s just say you as an individual, why don’t you just yourself with your own hands and no shovels, no tools, just dig up with your fingers every single thing you need to live, right? Every other animal on the planet does it that way.

[00:35:42] Kevin: That’s actually a different question. I get the whole concept of comparative advantages, and there’s ways in which it makes sense and there’s ways in which it doesn’t, but specifically relative to the refining of oil.

[00:35:51] Wes: Yeah. Yeah. No, we’ll get there. We’ll get there. We’ll get there. Give me a minute. Yeah. So think about, though, like every other animal other than maybe ants and bees maybe, every other animal is fully self-sufficient. They don’t rely on any other, they don’t rely on supply chains.

They very rarely even rely on other members of their own family, right? Maybe initially, right? They’re fully self-resilient. They’re just, they’re out in the earth doing their thing, and then they use their own hands or claws or feet or tails or whatever. We don’t. For good or bad, right?

Similar to other social animals to ants, to bees, to dogs, like we’re social creatures. Then you start saying you as an individual, “why don’t you just go live in a cabin in the woods and whatnot?” And it’s then even you might want an ax or you might want some way to carry water.

But no, you don’t get any of that. You cannot rely on anyone else, nothing else that any other human ever touched. It’s very difficult, right? It’s that, what’s the comi- Jimmy Carr, the comedian from the UK, had a great quote on this where he said, “If you took a single human individual and just dropped them in the middle of the most remote forest, jungle, whatever, they’d probably be dead within ten minutes. If instead you dropped a few dozen human beings, within a year they’d be the apex predator of that entire ecosystem.” We just are social creatures. So I think this gets to, we’ll get to like why oil refining specifically. So then you start saying why do you have comparative advantage in terms of the things you produce?”

And because again, even for a single village of maybe twenty to a hundred people- Does it make sense for that village to produce every single thing that it consumes? And economically, it never does, ever. This is why you have trade, right? It’s why we’ve had trade for as long as we’ve had history and pre-recorded history, right?

And then you get to, okay then that starts to answer the question of what were the forces that drove us to extract light sweet crude but then refine and import other types of crude and export? And the shorter answer or the more glib answer is because it was more economically viable, right?

We could get better deals on imports of those heavy sour crudes and other types of crudes, and then we could make more money by exporting the crudes that we had. And also, in the case of the United States, we export quite a bit of finished product as well. Not just LNG, but just finished goods that come out of oil manufacturing, refinery, petrochemicals and sort of other things.

I’m not a oil historian, so there’s probably like some very good data points around why the specific decisions were made at each key point and probably, I’m sure ties back to the oil barons of the United States. But if you look at a sort of bigger picture macro level, I think there’s always going to be that force.

And we said a lot of these answers can be explained through understanding the systemic and ecosystem forces that drive them. There’s always gonna be pressure to do that because there’s always gonna be comparative advantage. And again, where you draw that system boundary can be different depending on what works at that time.

But I think it’s going to be very hard. If you started over from scratch and then you said, “Let’s rerun this whole simulation and see if it came out that way again,” I think you’d find that it came out that way over and over again because again, the dynamic of how human beings actually produce stuff.

[00:38:48] Kevin: So basically, if I was to summarize that, it sounds as if at some point in the past, it was cheaper to import heavy sour than it was to pump light sweet.

[00:38:57] Wes: I presume so, yeah .

[00:38:58] Kevin: Yeah. That kind of makes sense.

[00:38:59] Wes: And both can be true. That’s the irony of comparative advantage, where both things can be true. It could be more financially lucrative to export light sweets and also more financially advantageous to import heavy crudes, right?

It’s a paradox, right? In terms of even like when you learn basic comparative advantage, like in a business class they usually say like one group produces bananas and another group produces clocks or something like that. And you say “couldn’t the group that produces clocks, like maybe they’re more advanced, couldn’t they also produce bananas?”

And they’re like, “Yeah, they could, but then they wouldn’t be able to spend time producing clocks.” And if that is a more valuable use of their time, they’ll keep doing that and they’ll import bananas. And the people that are exporting bananas, they’d say why don’t they also try to learn to produce clocks?”

And they could, and often over time they do. But they can get more value from just exporting their bananas and buying the clocks they need. And this is how, all global economies work, supply chains and trade, so yeah, I would imagine I don’t know again the specifics on oil in the United States or that level of detail, but I think these are forces that drive that are fundamental in how our economy works.

[00:40:03] Kevin: So I do have one kind of issue with the whole concept of comparative advantage that I’d like to actually talk about later. But I wanna get back to, in terms of the US oil industry, when we pump and export light sweet, where does it go? Who refines it?

[00:40:17] Wes: Oh, yeah, I’m not the expert on that. From what I understand, other countries within the Americas. And then I think we export also I believe– I don’t wanna say, I don’t wanna misquote, but I believe we export that quite broadly.

[00:40:31] Kevin: But for some reason, in those countries…

[00:40:33] Wes: It’s mostly Canada and Mexico, but on the export side I think we have quite a big global market for that.

[00:40:38] Kevin: But for those countries, it’s somehow economically viable for them to refine the light sweet…

[00:40:44] Wes: Yeah.

[00:40:44] Kevin: and then export the, the finished products from that.

[00:40:47] Emanuel: One might think, but I was born in Romania and we were communist for the first four years of my life, and especially in the Soviet and other socialist countries, these tradings and all the production was… not done according to the logic that we just discussed here. So I’m just putting this out there. You don’t want to know how many factories were producing all kinds of stuff that nobody actually needed.

There wasn’t a demand in the market. People didn’t need it, but they were trading with other friendly countries. I’ll give you something that we don’t need and you don’t need, and you’ll give us something that you don’t need and we don’t need as well. And usually it came with a caveat in a sense that here’s also something else that we actually need and whatnot.

Or if you want to buy this thing that you need, you also need to buy the other thing that you don’t need. So this unfortunately things happen. I do want to come back to something that you said here and I wrote down wrote it down. I take a lot of notes. I like to take a lot of notes. I can’t read my handwriting, but hey.

When we were discussing about the evolution, you said something like the– ones that figure out either a organism or a civilization figure out how to harness the power of the dominant star, the sun, the photosynthesis becomes the dominant force in the system, the ecosystem on the planet, in our case specifically. As far as I know, when it comes to solar energy, China is I would say a few steps in front of the…

[00:42:12] Wes: That’s putting it lightly. Yeah, we can talk about that.

[00:42:15] Emanuel: what we might call the West.

[00:42:17] Wes: Yes, sure.

[00:42:18] Kevin: They seem to be yes.

[00:42:20] Emanuel: Where are we with that essentially, and where does…

[00:42:22] Wes: Here’s one of my favorite, more mind-blowing… to my mind, more recent statistics. So the United States invented the first solar cell at Bell Labs in Murray Hill, New Jersey in 1946 Then if you look at all the solar the United States produced from that time until 2025. And you added all that up cumulatively, all the solar.

Keep in mind originally a lot of that was used for satellites and then we started a lot of domestic manufacturing and capacity and building out solar again, up until very recent times. Then you take the first six months of 2025, so January through the end of June, for China’s solar capacity production.

The amount of solar panels that China produced in that six months is bigger than the entire, what is that? Six-decade history of the United States.

[00:43:17] Kevin: I’d like segue now into my prior comment, because weirdly, my issue with a pure Ricardian comparative advantage argument

[00:43:26] Wes: Ricard, there you go. Yes. Thank you. Yes. Good.

[00:43:29] Kevin: Yeah, so if you roll the clock back on China like 50 or 60 years, their comparative advantage was relatively low value agricultural exports.

[00:43:40] Wes: Yeah.

[00:43:41] Kevin: So if they had been really Ricardian purists about comparative advantage, they would not be the manufacturing juggernaut they are today. So them kind of like violating the rules worked out very well for them.

[00:43:55] Wes: So I think… to your point, that comparative advantage is not an equilibrium, right? And you, I think you’ve illustrated this really well, where you, as a nation or as a person even, innovates, right? You start to try to gain new comparative advantage. So it doesn’t mean that if you happen to have a lot of bananas, you just export bananas forever, right?

Or if you happen to know how to make a clock, you just make clocks forever. The idea is that while you have that comparative advantage and the other big part about this is it’s odd because we call it comparative advantage, but the thing that’s more important is that both of those entities actually benefit, right?

They both gain. They both get more wealth. They both get more prosperity. When they do that frees up time and resources so that they can invest in innovation for things that will drive new comparative advantage, right? And We think of it a lot of times in terms of when we say comparative, we think competition, right?

And we think, and that means zero-sum game. Someone’s gonna win and someone’s gonna lose. But in fact, everybody wins in those scenarios. Both of those countries that are trading bananas and clocks both win. Then if the, you’re the country that’s, let’s say you’re exporting bananas, you have more time and resources and capital, and you’re like, “Hey, we should think about what we can innovate in, within our borders or tribe or whatever that is,” right?

So to your point, and actually I want to go back to, I’m going to credit Gary Dirks again, because this was a conversation he and I had a couple months ago. He was living in… I believe it was in Shanghai for a number of years in the ’80s and ’90s when he was running BP Asia Pacific And he talked a lot about why China went so hard into solar.

His view was that originally they were looking at getting in the semiconductor business and it was basically a play for silicon… silicon wafers. At the time, it was very difficult for China to produce silicon wafers at the quality level that was needed and expected in the world, so they weren’t able to get that comparative advantage.

But it’s actually much easier to manufacture solar panels out of silicon than it is semiconductor wafers. The technology’s similar, but the level of engineering and precision is much, much higher for computation than it is for solar energy extraction.

[00:45:58] Kevin: Right.

[00:45:59] Wes: And they kept developing, particularly within the provinces, the ability to produce solar panels.

That capacity grew and grew. There was a couple reports that came out last year. I know Ember re-reported this. I can’t remember who the original report came from. That the total national investment in China to produce the sort of solar juggernaut that exists today there was about $50 billion.

That number is a lot for us, I imagine, unless you’re– unless I happen to be talking to multi-billionaires on the other end of this call. It’s for me, I’ll say. But for a nation, especially for a G8 nation or a G20 nation 50 billion is nothing. That’s basically a rounding error. That’s the level of national investment it took to build the national capacity.

Now, that doesn’t mean that was all the investment that was made in solar, but that was where the government is incentivizing different ways from, again, R&D or they’re running tax incentives, like other ways they’re trying to build that capacity up. A relatively really small investment. And then I’ll go back to what that ultimately in addition to being innovative and having an export-driven economy where you’re able to produce now more solar panels in six months than the entire six-decade history of the country that invented the solar panel.

That’s so shocking for one, but phenomenal in terms of the output. But for me, again, because I don’t think of it in terms of competition, I think of it in terms of that should be a wonderful sign to anybody else that’s thinking about what do we do about domestic manufacturing or building a resilient energy infrastructure and economy.

It’s like you have lots and lots of viable alternatives. Now, if you look at those exports, China’s now doing the same thing with electric vehicles. China exported more electric vehicles, just exports, just electric vehicles, than what the big three United States auto manufacturers produced last year, right?

Just EVs, just exports. The level and scale there is phenomenal, but I think that’s because the opportunity is phenomenal. To come back to again, pulling in these seemingly sci-fi things, but they don’t sound so sci-fi anymore when you’re like, remember, this organism that figured out how to harness that power directly became the dominant form of life for three billion years.

When nation states start to think about, “Hey, like, how do we start to take things that are free and abundant and harness those directly?” By the way, China still has oil, to be clear. They still import a lot of oil.

[00:48:22] Kevin: They’re still building coal-fired power plants.

[00:48:25] Wes: Yes, they are, although that has decreased significantly. And then their total emissions have actually plateaued or started to decrease now as well.

But my point is like you have lots and lots of tools to work with and to build, and at national scales that are relatively affordable to build that capacity. Now you have an export market and the ability to buy those commodities very cheaply in order to continue to power things with zero fuel cost technologies.

So again, I take a hopeful, or optimistic view on that, where I’m like, “Look, we have the capability to start to harness those things,” and that won’t happen evenly all over the world, but it’s happening.

[00:49:04] Emanuel: My question, follow-up question is, what do they do with all those panels, the solar panels they produced in six months as much as for the past sixty years, the country that created them? They use it internally? How– I never

[00:49:17] Wes: Yeah, both. So both installed, deployed internally, and the biggest solar exporter in the world. If you think about again the think tank Ember out of the UK has done some really good reporting and research analysis on this. If you think about… Okay, let’s pull back again. We talk about oil, or we talk about megawatt hours, or we talk about BTUs of natural gas, et cetera.

These are energy inputs, and a lot of times those are primary energy inputs. No human ever consumed a barrel of oil, right? We don’t directly consume oil. We don’t directly consume gas. We don’t even directly consume solar, for that matter. We want energy services, right? We don’t think about it or talk about it that way, but this is what we want.

We want to be able to move our body or goods or other things from point A to point B. We want supply chains that deliver and compile different components into devices and things and services that we want. These are useful energy services, right? When you have complexity, because you, part of how you’re delivering that useful energy service has a very complex origin story, let’s say, where first you have to dig it out of the ground, then you have to refine it, then you have to ship it, then you have to sometimes refine it again, then you have to consume it, then 60% of it’s lost to heat at the final point of consumption, not to mention a lot of it’s lost to heat throughout the process.

That’s a wildly inefficient system. We are very fortunate that we’re alive at a time when we can afford to be so wildly inefficient because all of this energy has been stored up over millions of years, right? But when you start to look at, okay how can we be way more efficient in how we’re consuming those final energy services or deriving those final energy services from sources that are abundant and direct?

The more sort of pragmatic or main street way to talk about this is most of those things that the other portions of electrotech that aren’t solar and wind, so electric vehicles, which are basically just batteries on wheels, batteries themselves, heat pumps, et cetera, that’s the handshake.

You say, okay, you have a generation capacity that can take a zero fuel cost source of energy and start to produce lots and lots of electrons cheaply and abundantly. If you do nothing other than that and just power your light bulbs, that’s great. That’s one way to do it, and that is a conversion from fossil fuels because you would’ve had to burn a lamp in order to get that light.

Now you’re getting it from an incandescent or LED bulb. But you think how many other things can you electrify? And you start thinking about it on what are the actual services that you need. You need heat, right? That’s a basic human need. There are ways to get that from fossil fuels.

There are a way to get that from electrified sources, electrotech sources. You need propulsion or mobility, so you need the ability to move yourself or other things from point A to point B and C and D and E. And then you need electricity for light, for computation, for other things that you would have.

As you start to electrify more and more of those things, you’re not doing it just because there’s less emissions and less carbon footprint, et cetera. You’re also doing it because now you can directly couple yourself to that source of energy that has zero fuel costs and doesn’t transit the Strait of Hormuz and is not subject to supply chain shocks, et cetera, because the sun just always delivers.

And you say, okay, as you’re doing that, you think about when you plug that into every single portion of your supply chain to manufacture any good or service, you’re making every single tier of that supply chain more and more efficient, more and more cost-effective, so that it’s harder and harder for anybody else that’s not doing that to compete on the price of those delivered products and services.

So in answer to your question, Emanuel, Yes, they’re deploying a lot domestically, they’re exporting a lot, et cetera, because both China and countries that they’re deploying solar to or selling solar panels to realize oh, we can get more and more derived energy services directly by doing that.

A good example of this is Pakistan, which I’ve written about. Between 2022 and 2024, Pakistan, just in that amount of time, brought on about twenty-five gigawatts of solar, mostly distributed. About twenty gigawatts of that was off the books. Essentially not part of their official net metering program.

And that was in shops and houses, just rooftop solar, basically. If you look, they’re now up to a little over fifty gigawatts total solar, which is more energy generation than all other forms of energy generation they have combined. So if you add up all of their coal-fired generation, their nuclear generation, gas generation, et cetera, solar now exceeds all those other sources combined.

And that solar sits directly at the point of use, right? Somebody says, “Hey, I need power for my shop, for my home,” whatever that is. And a lot of the… It’s a really cool story if you look into it. I wrote about it at sustainabilitydecoded.com. There was a lot of knowledge and know-how in this bottom-up revolution around watching TikTok videos and WhatsApp groups on how to install solar, how to hook it up, et cetera.

And that bottom-up movement has had a massive impact on their overall sort of energy scheme. All of those panels came from China, right?

[00:54:28] Emanuel: So consumers…

[00:54:29] Wes: All, yeah, all the solar modules came from there. There was some help, I think, from the government in removing import restrictions, so I think that was a big part, right?

And saying, yeah “Hey, like we need to deploy abundant energy infrastructure as fast as possible.” Now, someone could look and say, “Yeah, but that wasn’t the most efficient, and you could have built that system better,” et cetera, and that’s all probably true. But just allowing that to happen, again created this massive movement because it’s really hard to compete with zero fuel cost.

[00:55:00] Kevin: Right.

[00:55:00] Wes: And when those technologies that can harness that are the cheapest form of energy generation on the planet, it’s very hard to compete with that. And now I think, like I think that will continue. We are now producing… What did we produce last year? Eight hundred gigawatts of solar and wind.

I think we’ll probably be producing a terawatt per year with- if it’s not next year, probably by the end of twenty thirty. And again, you’ll see again, a lot of that will come out of China. There’s other countries I think that will ramp up their production. But yeah I think like it’s a changing dynamic that we’re living in.

[00:55:35] Kevin: And it seems to me that another potential advantage of what you were talking about is the closer you can put the production to the consumption of electricity, the less you have to spend building out the grid.

[00:55:48] Wes: Much simpler, yeah. Yeah, and there’s a lot of questions, right? A lot of good system engineers are working on. We still rely on the grid for backup power, or in most parts of the world we do. What do you do with all the capacity? There was a great story that came out actually over the weekend about there was so much battery storage capacity that was deployed in California that now there’s some, I think it was eighty different gas peaker plants that… the way the headlines wrote it was they were displaced or taken out, but that’s not true.

They’re actually still sitting there. They’re still sitting there, and you have to make capacity payments for those, right? And I think we’re going to struggle, and a lot of grid operators are gonna struggle to think about, like, how much backup and reserve do we need? Like, how resilient can these systems be?

We’ve learned a lot from Germany over the last 15 years. There’s a lot of questions, right? So it’s not that this is a solved problem for sure. But certainly from the perspective of the person actually directly benefiting from the energy service, yeah, it makes the most sense, right? Which is again, why when the Strait of Hormuz crisis happened, and it’s been happening you start to see this surge, not just in interest, but in purchasing of electric vehicles, of both commercial and residential solar because people are saying, “Hey I want to have more direct control over the energy services I consume.”

Now, I think you don’t see a lot of grid defection. I don’t think I’ve seen numbers on that, right? So there’s still a huge benefit in being tied to that larger construct, but starting to take a more active role in thinking about how you’re Was it Alan– Not Alan Watts. Who was the gentleman who came up with the, the– coined the term prosumer?

Alvin Toffler, sorry, “Future Shock,” who coined the term prosumer, where you’re doing more and more prosumption, right? Where you’re producing the thing that you’re consuming. I think that trend will probably continue for a while. I think there’s still gonna be a huge benefit in terms of having that greater interconnection on the power system and on the fossil fuel system for that matter.

But again, yeah, like it’s just… I’m trying to figure out a way to succinctly capture it and I’m struggling a bit with words, but I think it’s more around energy sovereignty, right? Like we’re starting to take a much more thoughtful approach at a national scale to the point you’ve made several times at a local scale and even at a personal scale where we’re thinking much more about what is my relationship with energy in the world and then realizing like how…

It’s the point that was made at the beginning of the show about how, I don’t even wanna say directly tied, how these two things are one and the same between energy and human thriving and prosperity.

[00:58:10] Emanuel: We passed the one-hour mark. I don’t wanna close this and I’ll move along to Kevin as well because he had a few comments. But I don’t wanna end this without touching a little bit on nuclear because especially i’m in Canada and they’re promoting a lot. Downtown Toronto posters and even on screens advertising nuclears and so forth.

There’s a couple of companies in the US that are producing some modular, smaller scale nuclear reactors. I think they’re about to deploy out of the first one in Romania somewhere, either Nuscale or Oklo from California, publicly traded companies as well. So definitely as we know, it’s clean, cheap.

Those are the main arguments and, I tend to agree, so I wouldn’t wanna end the conversation without touching a little bit on that as well. But also Kevin may have to add to that.

[00:59:00] Kevin: Before we get to that, I wanna talk about two things. One is something I know something about, and the other is something I wanna ask about. So the thing I know about is there’s… Electricity production, distribution, consumption is very heavily regulated, so if you wanna update the way the system works, you have to update the laws. So something really interesting in my mind is happening in California, and I don’t know if it’s happening elsewhere, where there’s at least one company who is an electrical producer who will come to you as a homeowner, install a solar system at your home that they own, and they purposely size it to be larger than your household needs. You get preferential rates the electricity because it’s on your home, and then whatever excess is available, they sell it to the power company, who in turn sells it to other people in the neighborhood. And their aggregate electrical production is all of these residential and potentially the occasional commercial rooftops spread out throughout the state of California. That’s just an interesting approach to what you were talking about.

[01:00:09] Wes: Yeah. Yeah, you see those, and you see those at the commercial scale too in terms of community solar. I’ve heard differing views on this in terms of should you be able to monetize your own rooftop or should someone else? That’s probably a different debate. An interesting, And you see the same argument being made for battery storage is a big one… in terms of having different battery storage devices that are at your house, but maybe participate in on an opt-in basis in a virtual power plant market. Yeah.

[01:00:35] Kevin: Is the segue into my question, right?. The question is, in terms of a transition of energy, if we’re gonna go deeper into solar, are industrial scale batteries a part of the future transition? And if so, how’s that going?

[01:00:51] Wes: Yeah, I think so. I just mentioned the case in California, right? Where so much battery storage, utilities got battery storage has come online. I think my numbers are a little out of date, but I think for a while in the US we were deploying about five gigawatts per year of battery storage. That’s only at the utility scale.

I don’t have good numbers on what that looks like at the commercial and residential scale. But absolutely, I think unequivocally battery storage is a key unlock for any energy generation source. Because even if you say I wanna do all therm power, so all geothermal, all nuclear, all coal, let’s say, right?

because it’s just steady and just produces all the time, and that’s great. But the problem is humans don’t consume at steady rates. So I always liken this, and maybe this is a also a segue into the nuclear question of, if I had a sandwich shop and I said I feel better just producing 100 sandwiches an hour every hour.

I don’t care if there’s people here or not. That’s what I wanna produce. And it’s the market doesn’t care what you wanna produce. Humans don’t eat 100 sandwiches an hour at 2:00 AM, right? People get hungry for sandwiches at lunchtime and dinner. And so you probably should think about how you’re gonna produce more sandwiches then, or how you’re gonna store more sandwiches that you produced at 2:00 AM and that you can serve somehow effectively at lunchtime the next day, right?

So we don’t consume 24/7 at peak, right? So then regardless of what your energy generation system is, I think battery storage becomes an absolutely critical point because you need that flexibility. Battery storage also does a lot of things I think that are… Maybe it’s less known for in terms of grid stability and regulation and voltage regulation.

There’s a bunch of… And synthetic inertia and a bunch of other things that battery storage does that plays a critical role. So yeah, I think that’s gonna happen. And I think similar to solar, I think it’s also gonna continue at all scales. I think we’re gonna see, continue to see huge rollouts of utility scale battery storage, residential to your point and commercial scale as well.

[01:02:42] Emanuel: Nuclear?

[01:02:43] Wes: Oh,

[01:02:44] Kevin: I’m interested in nuclear as well.

[01:02:46] Wes: Sure. I’m definitely not a nuclear expert. I don’t have a lot to say on it. I have not seen nuclear be, I think it struggled with affordability. So I know we talk about it’s clean and cheap. I don’t know where the cheap comes from. That is just factually not true. It’s the most expensive form of energy generation in all of human history.

I think there’s a pretty clear track record on that. Yeah. It also is somewhat interesting in that a lot of people have heard of Moore’s Law that was popularized around the how semiconductors get cheaper the more you produce. It was initially stated in terms of time. I think it was like half the price every 18 months.

That’s a derivation of something called Wright’s Law, which is the more you produce of something, the cheaper it tends to get, and everything has a different sort of factor in terms of what that learning curve looks like. So you see that with solar, that with wind, you see it with battery storage. You see it with any technology typically.

Nuclear is special in that it has a negative learning curve which is remarkable. I don’t think there’s any other technology we’ve invented that has a negative learning curve in that the more nuclear capacity we’ve produced, the more expensive it has gotten.

I’ve heard a bunch of theories as to why that is. I’m agnostic to whether or not those theories are correct or not. I’ve also seen a lot of enthusiasm for small modular reactors. Again, would be great if someone actually figures out how to invent that and deploy it.

So far, that has not happened. There is no SMR currently active anywhere on planet Earth that I’m aware of. Also, like every other forecast for nuclear said that the way you’re gonna get the cost to come down is to do exactly the opposite. It’s to go much bigger because you can get economies of scale.

So now we’re saying two things at once that we’re gonna get cheaper nuclear by going bigger and having less regulation, just saying, “Ah, everyone’s scared, so we’ll just do more and more of it.” But also we’re going to do SMRs. All that said, I’m happy to be wrong on nuclear. If everything I said, someone points out and says, “No, actually, they have deployed SMRs and it’s cheap, and actually in deregulated markets, we have produced more nuclear and it’s getting cheap,” great.

I hope it happens. I just so far it seems to be this technology that we keep betting on for six, seven, eight decades that just doesn’t seem to be paying off. And if it does tomorrow and I’m wrong, then great, produce more nuclear. Right now, the other thing I think about is and there’s good evidence for this, much better uses of that capital.

Even if you think about how long it takes to produce a nuclear plant, and again, people come up with yeah, but that’s because there’s too much NIMBYism and there’s too much permitting,” whatever that is. But if you look at the last, like at least in the UK and the US, the last, what, five or six nuclear plants that were built, it took over a decade.

I think they were three times over budget and two times over time budget. I thinking about all of the solar we could have deployed in the meantime, all of the batteries we could have deployed in the meantime, all of the wind we could have deployed in the meantime, all of the… even more gas plants that we could have deployed in the meantime, right?

So again, that’s fine. Maybe it has the longest technological sort of development curve on Earth, and maybe in the future, it really pays off. The question I often ask is, sorry to get a little bit cheeky Emanuel, because you mentioned you’re a marketer. If I were teaching a marketing class, Nuclear would be the only subject.

We’d learn about it for an entire semester. Because given the track record that nuclear actually has and people that I know and respect have so much just unbridled hope and aspiration for nuclear. They just, they know it’s the future. They know it’s amazing and just so great.

And I’m like, “I don’t know how nuclear did that.” And then look at what it’s actually delivered. But its marketing is… Don Draper holds nothing on nuclear. It’s so good. I don’t even know how they did it. It wasn’t a concerted effort. There’s so much again just optimism for that technology.

And I haven’t seen it personally, but if I’m wrong, then great, because yeah great way in theory to produce electricity.

[01:06:37] Emanuel: Rory Sutherland actually has addressed this topic in one of his speeches, and he said he was proposing actually to change the name because nuclear has so many negative connotation. You have the atomic and nuclear bomb that…

[01:06:49] Wes: Yeah. Yeah, that’s a

[01:06:50] Emanuel: all those things. So he was suggesting changing to something else.

Also I think elemental was the latest term that they used.

But why I’m saying cheaper and– is because Bill Gates has popularized the idea of nuclear being cheaper and fast and clean.

[01:07:05] Wes: Yeah and two other things I’ll say about nuclear, probably this will be taken out of context or my previous comments might, but some countries have done quite well with nuclear, particularly France and China right? And another thing that I think about is…

If you have a working nuclear power plant, please keep that on.

I do not believe in mothballing current the ones that are, they’re safe, they’re operating, et cetera. Even if people have philosophical differences to nuclear, I’m like, “What?” If you’ve spent all of the time and effort to that and now it can produce very cheaply, to be clear, right? Once it’s there.

Then run that thing for as long as you safely can, right? Get all of the benefit out of that you can because it took a tremendous investment. We haven’t talked about it much, but again going back and putting on my hat as a former intel officer, I also think the amount of vulnerability that introduces to your country, because they’re incredibly easy to target, impossible to defend, and would absolutely destabilize probably your entire country if you hit one.

I think that’s probably something to consider. But again, if you’ve done that, you’ve made that investment, you’ve put your chips with that, keep running that thing, right? Don’t mothball it because now you have consistent, reliable energy, like you wanna get the most out of that. So I’m a bit of a what is the word?

Maybe I’m a gadfly for nuclear. I don’t know. because again, I look and say economically, I don’t see the case. But again, if other people do, and if you have that and you’ve already built it, keep running it.

[01:08:25] Kevin: There is a possibility that nuclear may become cheaper in the future. And for the benefit of listeners and viewers, the three of us discussed this briefly in a pre-recording call. There’s a long history of governments spending big on something for national defense or strategic advantage, and those things bleeding over into the larger economy.

Five of the things that make our smartphones smart is Wi-Fi, internet, geo-positioning, touch screen, and computer voice activation, and all five of those started within departments of defense for purposes of we’re gonna need this capability one day for our war effort. DARPA….

is building that prototype.

And that prototype is going to exist come hell or high water because they have no budgetary constraints.

They’re DARPA, right? So then once a small modular reactor exists, then we have a prototype, and the supply chains and the manufacturing processes can be continuously tuned and improved from there. We’ll have a baseline, if you will, of what it costs, and the typical trajectory is once that happens, from that point forward, it starts to get cheaper.

So it could happen.

[01:09:38] Wes: Yeah, no, I agree. And your point about government up-funded R&D I think is a really critical one. And this actually ties back to the very beginning of the podcast, right? When you’re asking like, “Hey, why is the supply chain for intravenous bags not more diverse and so tied to Puerto Rico?”

And I said it’s because people are trying to make quarterly numbers,” right? DARPA doesn’t have to make quarterly numbers. That’s the big difference, right? I know for a fact their budgets aren’t unlimited. I used to work in that space and have done DARPA-funded research. But they do have budgets, right?

And what they don’t have is quarterly reporting. Now I think what makes the US sort of innovation ecosystem really work is that you have both of those things happening at the same time.

I don’t think you want to run your country the way like a DARPA research project or DARPA research funding.

But I think you definitely need that as a component because then you can do this sort of base level R&D that the market wouldn’t find a way to immediately reward, like especially within the quarter, and would therefore make it difficult to have that innovation ecosystem.

I used to work for President Michael Crow, he’s president of Arizona State University. He makes this point… Oh, I gotta do it like he does. He’s, he always holds up his iPhone and he talks about, like there are over more than 100 different patents, different university laboratories, government laboratories that produced and invented different things that went into this that were enabled… Apple and Android and other companies to compile that and leverage that together into a product that we could sell and that, has become integral to our lives, right?

And you mentioned five, right? There are hundreds, literally just for the iPhone or just for the mobile phone. And that’s continuing, right? And the next generation that will definitely impact other energy generation resources, including nuclear, et cetera. And again I know my comments maybe sound sour on nuclear, but all I’m saying is like that has yet to pay off, right?

If it does in the future, great. There’s probably where people that were looking at the different accelerometers and GPS and the other things that are in the phone and saying “what are we doing with these? I’m not sure this is gonna pay off,” right? And some of those didn’t. To go back to my point about when you see a couple really good old buildings and you say, “Wow, they just used to build them great in the day.”

No, most of them are now in the waste pile of things that didn’t work, and that’s fine. You need that, right? In order to have a thriving innovation ecosystem, you need to have waste. And I know from a sustainability person, I have a PhD in sustainability, that sounds weird to hear, right?

You have to have the ability to try things, and not all of them are gonna work. And so again, with my comments on nuclear, I think maybe not working the way we thought. But again, maybe we just needed to try all those different things to figure out a way that it does work and it’s economical and it delivers, and then great.

And then I’ll be like, “Hey, yeah, but I didn’t see that coming, but I didn’t see the iPhone coming either.” So what do I know? But you have to have those different people with different sort of views that have different ways that they’re trying to drive innovation, and they have the space to try things.

And some of them work and some of them don’t, and we don’t shame the ones that don’t work. This is why I don’t shame nuclear, right? And saying “Oh no, it might take a different configuration or one more step, and then that will deliver.” And we’ll be like, “Oh of course, that was always a good idea in hindsight,” we’ll say.

But it takes the ability to be able to do that, and I think that takes a little bit of humility, but also the willingness to try stuff. And that’s really important.

[01:12:52] Kevin: There’s another economist that I pay attention to. Her name is Mariana Mazzucati, and her whole thing is what you just spoke about. Never in a million years is DARPA going to produce an iPhone.

[01:13:05] Wes: Yep.

[01:13:06] Kevin: But unless DARPA creates the technology building blocks that Apple later makes use of, neither can Apple.

[01:13:14] Wes: Yep.

[01:13:14] Kevin: That’s her whole– not whole, but that’s like the bulk of everything she does is related to the interplay between big government basic R&D funding, some of which works, some of which doesn’t, and then corporations who take that technology and use it to build products and services.

[01:13:31] Wes: That’s right. I don’t know if that’s a question, but yeah, fully agree. I think you need that dynamic between those two things and…

[01:13:36] Kevin: I’m just giving her a plug.

[01:13:38] Wes: Oh, yeah.

[01:13:38] Kevin: I think more people should know who she is.

[01:13:40] Wes: That’s… No, I, yeah, I’ve read some of her work. I think that’s a salient point, right? And we’ve, we’re all living as the beneficiaries of that dynamic, so yeah.

[01:13:50] Emanuel: I do wanna invite Wes again to be open to come as a guest again to one of our episodes, perhaps in a couple of months, year. Who knows? We’ll see how the feedback comes. Maybe we’ll have a lot of questions and saying, “Wes, you’re so wrong about this or something… “.

[01:14:04] Wes: Sure, yes. Please tell me yeah, all the places I’m wrong.

[01:14:07] Emanuel: I don’t wanna end, not end before I ask this question, and this is fairly important.

We’re talking about putting humans outside of our planet, a colony on the Moon, most likely, and on Mars, of course, we all know a certain character by the name of Elon Musk, who said that he wants to actually die on Mars, not when on its way there, not when they land, but of old age, of course.

And one can only think, right? Okay, to get there, you’ll need energy. And even if this is one-way journey, right? So once you get there, you’ll need energy to stay, to live, to produce, to prepare the colony, and so forth. What kind of practical solutions are there at the moment in 2026 when we’re looking at this? Because if you’re asking Elon Musk tomorrow, they’re going to Mars to put the colony, right?

Last time I checked, it was 2025, the moment they’ll launch towards Mars. Where are we essentially? It inevitably, it will happen either in the next 50 years or 500 years, somewhere around that time. Definitely in my lifetime, because I plan to live 1,000.

[01:15:15] Wes: Yeah. Yeah. I– My take on this is you have to hold two things in your mind at the same time, which are not actually contradictory, but I think, again we like to, for some reason, diametrically oppose things. I’m very excited about space exploration, about lunar exploration, colonization, Mars exploration and colonization and then even extra solar system, outside of the solar system.

At the same time, I think the thing that makes that work is making sure we take care of spaceship Earth, right? And I’m not the one who coined that but I think that’s a good way to look at how we take care always of our home world. In order to produce the innovations and the things that we need to reach further and even to the stars.

And yeah I’m bullish on both.

[01:15:58] Emanuel: Let’s say this will happen sometime soon. What kind of energy source would you need? And there’s many theories out there being harnessing solar from the space, with all the panels that can be used to actually navigate a vessel with humans inside and so forth. And I’m assuming some batteries would be an important component in all these schemes. The robots definitely would help because, they can carry more and don’t need oxygen and food and all the other stuff, but they need power. So in that context, briefly, from a more experienced energy expert what, should the layperson know?

[01:16:35] Wes: Yeah, this is definitely beyond my personal area of expertise in energy. To the point we made earlier, right? The way to think about stars, or the way I like to think about stars, is the engine of the universe, right? So if you have these little points, these little clusters of gravitational compression that are producing immense amounts of energy, the one that we have closest to us is our sun.

I fundamentally believe that will provide and has provided all of our energy needs for the foreseeable future. I think that’ll be true on this planet. I think it’ll be true in space. By the way, that so far, that has always been true in space. Every satellite that we’ve ever put into orbit is solar powered.

I don’t see that changing anytime soon, because why would it, right? There you don’t have to worry about clouds or daylight, daytime, nighttime cycles, right? You have such an… Yeah. Now if you’re literally, trying to make your way to Pluto and beyond and outside the… we’ve not reached that yet, right?

We think Voyager’s the manmade object that’s now furthest away from our planet. And I think that’s still well within the boundaries of our solar system, right? That’s also solar powered, to be clear. So I think that will be the sort of dominant form of power and energy consumption for some time.

And if we develop other ways, again, through fusion or other more exotic ways to produce energy then great. That hopefully will propel us even further. I don’t know that there’s much pragmatic like advice I could give on that. Not my area, but yeah I’m optimistic and hopeful. I think like a lot of people are, and excited about what that will bring. I think this ties back to a point Kevin made too, that I think it’s worth touching on one more time. When you have R&D and even for corporate R&D as well, and you have innovation, people say ” what did the space race give us?” The space race gave us the microchip, for one.

That’s how we landed on the moon. We had to figure out how to compact all that computation into smaller and smaller spaces, which eventually created the microchip. I think that’s a pretty important thing that I use every day, right? We’re using it to have this discussion right now. Anytime you’re pushing towards innovation and R&D to dream big about what the sort of what life is gonna be like for us in the stars, on other planets, et cetera… you also get so much benefit that’s derived from that, and secondary and tertiary and other benefit where, you know, this ties back to all the things that we talked about, and you start talking about comparative advantage and how different people are taking different things and remixing things and creating new products and services, creating new ways for humans to thrive.

That’s an ecosystem that builds upon itself. We talk about the knee and the curve as from fossil fuels, but also I think of that as like a launchpad, right? Because now you have these thriving ecosystems of human ingenuity and innovation and invention, and I don’t think that will stop.

And to your point, I don’t think, Emanuel, I don’t think that will stop even at the planetary boundary. And that’s, for me, it’s a little bit scary if I’m being honest, but also very exciting. And so yeah. Again, not much practical takeaway, but I think a note for hope.

[01:19:27] Emanuel: Point of view. We had definitely at least an interesting, if not more, conversation.

Thank you so much for being with us today and sharing all this information. I don’t have anything to add at the moment, but Kevin, if you want to make a conclusion and leave our– the final words to our guest today. I’m gonna make the prompt again to say, to invite everyone to go to curiouspundits.com, subscribe share, and leave a comment.

That will help us. Leave a positive review if you like it. If you didn’t like it don’t leave us a bad review essentially. But nevertheless I’m gonna pass it along to Kevin now.

[01:20:04] Kevin: I don’t really have any closing remarks. We meandered around quite a bit, and for what it’s worth, much of that is on me. I do that.

[01:20:11] Wes: Okay. That’s, that was the

[01:20:13] Kevin: interesting discussion

[01:20:15] Emanuel: Where if somebody wants to reach out to you Wes, where’s the best place to find you… website? LinkedIn?

[01:20:23] Wes: Yeah, for sure. Connect with LinkedIn. If you spell my name I’m the only one, so you’ll be able to find me. And feel free to connect or reach out or follow. I also write for a newsletter that I co-founded called sustainabilitydecoded.com. So the piece on Pakistan, I did a piece on that, actually on Chinese solar.

Interestingly, I was writing both a piece on China and Pakistan and was gonna think of it as like a bookend, and this was all before the Strait of Hormuz happened. And I had published the China one, and then the Strait of Hormuz crisis happened, and then I was like, “I need to rewrite portions of this Pakistan one” because now all these things that had been building, I was like, “Oh, these are so much more relevant now.”

But I’ve been putting stuff out there. I mostly write on energy, write on some other sustainability topics. We also write a lot about people that are trying to navigate careers in sustainability, especially more junior folks that are newer to the energy industry or sustainability or decarbonization space.

But yeah, otherwise yeah, connect with me there, connect with me on LinkedIn and pleasure to be on the show. I really appreciate it. And I love the meandering conversation and the variety of topics that we’re able to bring in and weave in. The last thing I’ll say about that is one of my PhD advisors, Mike Pasca- Dr. Mike Pasqualetti who’s out at, also at Arizona State University, he’s one of the leading foremost thought leaders on energy geography. So he’s a geographer that is an energy expert, right? He has a class, he’s taught it for decades called The Thread of Energy, and it’s exactly this point about how energy threads through all of these things because it’s so fundamental to our lives.

So the good thing is when you come on to a show like this, like you got plenty to talk about, right? From, why are we trading oil the way we are, to how soon are we gonna get to Mars, right? And you’re like, how could those things be related, right? It’s that thread of energy that, that lets us have that broader conversation, which I think is cool, and happy that I got to have it with both of you.

[01:22:09] Emanuel: And we’ll put links in the description on YouTube and on the website and everywhere else.

[01:22:13] Kevin: Actually, can I close with one story that I heard from Rory Sutherland?

[01:22:18] Wes: Oh, Yeah, absolutely.

[01:22:19] Kevin: Like, why do we measure energy in horsepower?

So James Watt invented the steam engine.

He’s looking around for who can I sell it to? And we had already started pretty extensive mining operations for coal primarily, going down into the ground. The problem with underground mines is they flood, so you need to pump them out, right? So up on the surface, they had some kind of a mechanical mechanism where horses would be tied to these arms, and they would just walk around in circles.

[01:22:50] Wes: Yeah.

[01:22:51] Kevin: And that would activate the pump that would drain the mine. So when James Watt is going to sell his steam engine to these mines, the question they all had is, “How many horses can I get rid of?” That’s why measure energy in horsepower.

[01:23:06] Wes: Horsepower. Yeah. It’s good. Yeah. At least it’s, Yeah it’s hard because if you start talking about gigawatts and whatnot, it’s so esoteric, right? So maybe horse is a better way to measure.

[01:23:17] Kevin: That story just brings it down to something that the mine owners could definitely relate to.

[01:23:21] Wes: Yeah. Yeah. Yeah, I think they had a really good insight there. That’s probably something, and I’m just as guilty of this as other people in the industry, that’s there’s a lesson we can learn there about how to make these sort of big and complex problems land a little bit better with an everyday person’s interaction with their world and their reality.

Yeah.

[01:23:41] Emanuel: I can’t find a better way to end this episode. Thank you so much. My name is Emanuel.

[01:23:45] Kevin: My name is Kevin.

[01:23:49] Wes: Hi, I’m Wes Hersche.

[01:23:51] Emanuel: And thank you for listening.