The Great Simplification with Nate Hagens - Energy Crises & Global Power Shifts: The Struggle for Stability in Israel, Iran, and Beyond | Helen Thompson

Episode Date: November 27, 2024

(Conversation recorded on November 11th, 2024, prior to a ceasefire declared between Israel and Lebanon on November 27th, 2024)   If you've followed TGS for some time, you've heard Nate speak about The 5 Horsemen – the biggest risks for humans and civilization in the coming decade. Today's episode delves into one of the most rapidly escalating: geopolitics.  Today, Nate is joined by Political Economy Professor Helen Thompson to explore the evolving understanding of energy's role in international relations, particularly in the context of recent conflicts in the Middle East. They discuss the challenge of anticipating the volatile changes in energy supplies, the complexities of navigating information in a rapidly changing geopolitical landscape, and the role of global powers like BRICS and OPEC. How will resource conflicts continue to shape the long-standing tensions in the Middle East? What would a transition from a unipolar world to a multipolar world mean for the global geopolitical landscape and its energy implications? Given how connected these issues are to the delicate balance of our world, how can we increase awareness and preparation for future crises?   About Helen Thompson:  Helen Thompson has been Professor of Political Economy at Cambridge since 1994. Her current research concentrates on the political economy of energy and the long history of the democratic, economic, and geopolitical disruptions of the twenty-first century. She is a regular panelist on Talking Politics and a columnist for the New Statesman. She is a co-presenter of UnHerd's podcast, These Times, and recently published Disorder: Hard Times in the 21st Century.   Show Notes and More Watch this video episode on YouTube   ---   Support The Institute for the Study of Energy and Our Future Join our Substack newsletter Join our Discord channel and connect with other listeners  

We're just kind of condemned to carry on these trends until the crisis is so overwhelming that actually something else comes out of it. Historically, it tends to be that something else has to come after a great deal of suffering and trauma. So the question in a way is what would it mean to have some kind of reset that changed the path that we were on in a decisive way? And how could any of us as individuals have any influence over that? You're listening to The Great Simplification. I'm Nate Hagen's. On this show, we describe how energy, the economy, the environment, and human behavior all fit together and what it might mean for our future. By sharing insights from global thinkers, we hope to inform and inspire more humans to play emergent roles in the coming great simplification.

This platform will not typically chase news news. events because I think that looking at the longer term backdrop and the systemic underpinnings of all the different situations we find is more valuable. I don't want to have sensational this happened yesterday, sorts of things. So with that in mind, I am rejoined today by political economy professor Helen Thompson for an update in energy and geopolitics from her perspective as a history. historian and an academic. And today we discuss some of the most difficult questions that are arising around the rapidly evolving and high-stakes situation in the Middle East, Russia and

Ukraine. This episode was recorded before this morning's IRBM missile from Russia to Ukraine, and there's lots to learn about, and the implications of that are huge. But I'm no expert on that. and neither is she. So we talk about the Middle East situation and what it might mean for the stability of the world at large. It is nearly impossible to know everything about the complex and fraught conflicts in our world. Helen's deep scholarship on the history and the importance of energy and the regional dynamics, especially in the Middle East, offer a valuable perspective on these unfolding events. And as a reminder, if you enjoy this podcast, one of the biggest ways that you can support us is by subscribing on your various platforms and sharing this episode with someone who also might learn from it.

We believe that making this content free and accessible to as many people in the world as possible. So we appreciate your social support. With that, please welcome Helen Thompson. Helen Thompson, welcome back to the Great Simplification. It's a great pleasure to be back now. Thank you for having me again. I just looked. It's been almost exactly a year.

It was October 30th, 2020. Was our first conversation. And a lot has happened since then. A lot has happened since October 30th, 2024, which was last week. So you are an energy and a political historian. You're an academic. You have erudition and scholarship on the importance of energy. geopolitics in humanity's past and energy's fundamental role in the world economy.

Do you think that energy's fundamental role is being more widely and deeply understood in the circles that you run in since the Ukraine war and the ongoing crisis in the Middle East? What have you experienced? I think the people are a lot more interested in general in energy questions than they were and I can see that in the way in which there was a difference. The reaction I got when I talked about energy prior to the 24th of February, 2002, so the day of the Russian invasion of Ukraine, and what happened when I talked about it literally from that day onwards, I think though in a way that there's a kind of fade

out again from the intensity of energy awareness compared to, what it had been in 2002. And that's in part, I've been reflecting on this a bit, I think it's in part because the Middle East conflicts since the 7th of October of 2023 don't seem to have delivered the kind of energy shock that many people might have expected them to. And so I think that there's some sense in which the energy problems are not quite as dramatic as they were. Nonetheless, I would say that you can't really understand quite a lot of the way in which

things are playing out at the micro level within those conflicts without having a reasonable level of energy awareness. And even if we go back to 2022, I think there's a difference between people beginning, or more people, I should say, beginning to understand that energy may be really important and actually being able to think about it in a clear and specific way and then keeping that knowledge that they might have acquired from some engagement in their consciousness. I think it's easy for them to get a grip for a while and then think, oh, it's gone away, it doesn't matter quite in the same way. Well, this is once again another prime example of risk homeostasis that we get exposed to something

that's incredibly important, but the risk that we were warned about doesn't happen. And so we kind of psychologically acclimatized to, oh, all that risk in the Middle East of possible giant war with Iran and the closing of the straight-or. of Hormuz raising oil prices to $250, $300 a barrel. That never happened. So let's just go back to watching Monday night football and ordering pizza. But the risks remain nonetheless. Depending on the constraints, half to two thirds of the world's recoverable oil is within 600 miles of Tel Aviv.

And many people in power in the world are aware of this. Obviously, that's why the United States and other countries have so many military bases there. Can you give us an update? I've got a lot of specific questions, but can you give us an update on how you see events in that arena in light of what's happened the last few months in Israel? I mean, I think that there's several things that are significant here. The first of them is that the oil price shop that could have materialized, and I think part of that would actually have been. in terms of disruption to oil tankers coming through the Red Sea to Europe has not really materialised. And that isn't because the Red Sea hasn't been pretty strongly disrupted,

and that the oil tankers don't need to go the long route around rather than through the Suez Canal. But this is playing out in a context in which China's oil demand is relatively weak. in the context, I would say, more of China's economic problems rather than China's energy transition away, supposedly at least, from oil. I think then there's the fact that Israel itself has, in a way, positioned itself for this conflict by moving away from dependency on any Middle Eastern country to any extent for oil, and Israel's primary oil will exports or exporting to Israel, but I mean by that, and there's been Azerbaijan, and the Turkish government, whatever it's rhetoric on the subject, is not actually acted

in any way really to disrupt the transit of oil through Turkey from Azerbaijan to Israel. If you then, they say, like, how would this conflict between Iran and Israel and the United States playing out. And what have been the decisions made not only in Iran, in Tehran, but in Washington, about how to act, including from Washington's point of view about how to constrain Israel, I would say that oil has been like very much to the fall there.

And that isn't just a matter of the fact that the Biden administration did not want a spike in the price of oil in the run-up to the presidential election in the United States. It didn't help much. No, but it's also, I think, more primarily because the question of whether Iran would retaliate against Saudi oil facilities, which goes back to the events of September 2019 when Iran attacked Saudi oil facilities, that is, you have to understand, I think, that to understand the way, in which both the Americans think, the Saudis think, and actually ultimately the way the Iranians think as well, and that has constraints upon, and it has constraints upon Israel. In that sense, is America is very much bound up still with the problem of oil in the Middle East. Well, the whole world is bound up to the issue of oil generally. They're just not yet really aware of it. So I think a potential large conflict,

with Iran is existential to the current global economic system, but it's also existential to real nation states in the Middle East. So let's talk about Israel versus Iran. What is your primary message you want to convey about Netanyahu's decision not to attack Iranian nuclear sites and oil facilities? I think we have to see that while it has been the case that Washington has not been able really to constrain Israel's options in dealing with Gaza or dealing with Hezbollah in Lebanon, that Iran is a whole other matter. Iran is a whole other matter both because it's very difficult for Israel to launch these kind of attacks on Iran, including even the one that it did, without the use of airspace of Jordan and Iraq, possibly over Syrian airspace as well, but Americans can't get much say about that, and needing to deal with refueling issues, which also require American help. Now, they're not directly oil questions, but what really is an oil-like question is, what do you do if you're Saudi Arabia in this position?

and their underlying fear, as I said, goes back to the events of September of 2019. I don't think it can be stressed enough that that was kind of like a Pearl Harbor moment for Saudi Arabia. There that they were facing a direct attack from Iran, having purchased American air defense system that didn't work. And then you have Putin sitting next to the Iranian president mocking both the Saudis and the Americans, effectively. And this is at a time when Saudi Arabia and Russia are in leading effectively OPEC plus as the world's oil cartel. And even if you look at the action that came from Washington in the end, so this was under Trump's presidency, not either Obama's or Joe Biden's, it was the assassination of General Soleimani. Now, that's not insignificant. and I think that was not insignificant,

but it wasn't a directly helpful act to Saudi Arabia in the position in which it found itself. It did not give Saudi Arabia a better security guarantee from the United States than the one that it turned out not to have in September 2019. And I think if you then look at the messaging that was coming out from Saudi Arabia in the days leading up to Israel's attack on Iran, you can see that Saudi Arabia was wanting to move a bit closer to Iran

and was saying that certain things were off limits, which means in part certain things are off limits for using Saudi airspace because they will not accept the prospect of retaliation from Iran on their oil facilities. And that that is a really, it's a completely different question for them than the question which might be presented for public consumption, including their own citizens consumption about whether it's, where they, you know, presenting the issue as the Palestinians,

that those oil facilities are existential for Saudi Arabia and they cannot accept the risk of another September 2019. And I think that Netanyi was made to understand that pretty clearly. I have so many questions here. I want to stick to the linear unpacking of the story. otherwise this will be a five-hour conversation. How does the reshuffle of the Israeli cabinet last week and a new defense minister, is that going to change things?

Is that more escalation or what is your sense? I think that's quite difficult to tell in one sense because the question of why Netanyar you sacked Gallant, the defense minister, I think is open to a number of different interpretations obviously he made some pretty devastating criticisms of Netanyu in the run-up to the attack. I think it was a few hours before the attack on Iran, and that was focused on essentially Netanyahu not having a strategy for dealing with a set of predicaments that Israel faced. If you look at what he said or reported as being his position,

since the SAC King. Some other issues have come to the fore, and one of them, I think, in particular, is the issue of conscription and the fact that he's been a supporter of implementing the Israeli court's decision from, I think it was July, June of July,

saying that the ultra-Orthodox community was not exempt from conscription. And I think that this is a very, very big, divisive question. in Israeli politics. I think it's probably that issue that has sent some Israelis out on the street in support of him. So if that's the question that's really to the fall in this struggle, rather than the question of the strategy for dealing with Hamas, Hezbollah, Iran, then we might not actually see a different tack from Netanyahu because of the change of his defence minister. There could

still be a different tack from Netanyahu because Trump is going to be the president of the United States from January now. But at the moment, I'm a little bit leaning. And again, this is something where I've kind of got competing hypotheses in my mind about it, that the conscription issue is to the fall rather than there being a clear thing

strategically in relation to Iran that Ness and Arie wants to do that he couldn't do with Gallant. Is there a ticking clock here with respect to Israeli society? Is the society itself fracturing and there needs to be a resolution? I think that if you look at Israeli politics and you put it in a broader context, almost like in a Western context, it's not immune from this issue of fragmentation of parties. and what we see in Europe of it being rather difficult these days for the party that gets the most seats in an election

actually to assemble a governing coalition. Now, hence why Netonoi has ended up with this coalition that doesn't give a very big majority and has got these two ultra-Orthodox, all parties well to the right, shall we say, in it who feel very strongly on the conscription issue. and we can see, and this was true obviously, before the 7th of October in terms of the demonstrations over the judiciary issues in Israel, that Israeli politics is divided over some of the same kinds of

questions that happening in other Western countries, and then you add on to it this completely existential war from Israel's point of view in a society that for religious reasons does not apply the principle of conscription on an equal basis. And it's very difficult to see how Israel can continue to fight the wars that it is without mobilizing more people into the army. And yet, the issue of who should be mobilized is now dividing Israeli politics. So put that in context for our UK and US listeners, the conscription that's happening in Israel. What would that be akin to in Britain or the United States? Well, I think that that's a good question

because I think that it's quite hard to think what a parallel would have been in the years in which conscription, you know, was operative in either the United Kingdom or the United States. I mean, interestingly, the place where you might say there's a politics of conscription that's divisive in terms of the citizens of that country and who gets called up might be Russia,

you know, whether there's a very considerable win. as we've seen from Putin to conscript from the ethnic minorities in Russia rather than from ethnic Russians. I think that the politics of conscription is quite a factor in quite a few countries' politics at the moment in terms of Ukraine, in terms of Russia, in terms of Israel, and then in terms of the Baltics, I can't for the moment remember which of the Baltic states it's going in the direction of reintroducing conscription. And the question about whether actually in the 21st century, it is possible to conscript large numbers of people

unless they are under a very, very direct threat. Now, you could say that condition holds in Israel. Yeah. It holds in Ukraine, to some extent, it's just that Ukraine is territorially in a lot bigger country so you can live in parts of Ukraine that are safe in the way it's much more difficult to live in a part of Israel that is safe.

But I think that the question of religious exemptions for conscription in Israel has got the capacity to tear that politics apart. I mean, if you just look historically, conscription divides. You can see that in the United States in the Vietnam period very clearly. What was that? I'm unaware of that. Was there a religious divide? No, no, I don't mean it's a religious divide.

I mean just the question of having people who had education. educational deferments. Oh, right. But a religious divide, I mean, it's kind of like saying, if you go to church, you're, you don't have to, you're not going to be at risk of being drafted. But now you are. We're drafting people that go to church. I mean, something like that directionally, right?

Yeah, it would be the equivalent of something. Yeah. But this has obviously been a longstanding position in Israel. And then the court has essentially undone what had been this longstanding position and reintroduced it as an actually politically contested question. From what I can see and understand is, in terms of the conscription orders that went out then on the basis of the court decision, actually very few people who were conscripted then turned up. Helen, I have so many questions, and you're one of the few people in my network that I know that has expertise on energy

historically and on the Middle East and on what's going on. So, first of all, You're an energy historian. So what's been happening in the Middle East has been building for thousands of years. And recently, we've discovered that, oh, by the way, the ancient oceans that refined phytoplankton and diatoms into magic pixie dust in the form of crude oil, happen to be under their sands and under their lands. So it's important to the rest of the world. But how do you merge your erudition and scholarship of looking what's, happened in the last

hundred or several hundred years to now like decades are happening within weeks in the Middle East so you're a professor, you're a historian but stuff is happening every single day. You're not a hedge fund manager or a military strategist. How are you keeping up with

all this when really in one way all the things you've been writing about and talking about are coming to the four in real time? I think the honest answer to that and they at the moment is like with great difficulty I think that the discipline of

of doing a weekly podcast and the podcast that I do with a journalist Tom McTay we range over quite a lot of different subjects we have spent quite a lot of time on the Middle East in the last year perhaps more than any other single

topic shall we say. So a lot of the time that what I'm absorbing and trying to think about as clearly as I can is round trying to get an episode of a podcast out. So you try to distill one salient aspect of the crisis and talk about that? Yes. Got it. Obviously it's overlapping. And what I increasingly find is that we're doing something. I think the last one we did on the Middle East was after the Israeli attack on Iran. And then I'm going back through all the notes that I made about previous Middle East in episodes over the course of the past year.

And then I'm reading what I can from a range of sources about the week's events and trying to really use the prior knowledge, if you like, to work out what I think is most significant about the week's events. Right. So contrary to the average person, you have like x-ray goggles or you're looking two or three cars ahead in a snowstorm because you understand the energy and the political backdrop. I get that.

Let me ask you this, though. As a geopolitical analyst, how do you ensure that the raw information you use to draw your conclusions is valid? And the reason I bring that up is, for instance, instance, intelligent agencies often float stories that support government policy that go mainstream and then are accepted that ultimately turn out to be false. So how do you navigate that environment against stories like Nord Stream and the Andromeda, which turns out to not be capable of even holding station in the North Sea to do the dive they were purported to have? Because how can you

filter against that? Well, ultimately, you can't if you're sitting in like an office in Cambridge or I'm at home. I think Nord Stream is an interesting example of this issue. I try to be very resistant as these various stories have come out about who might be responsible. Certainly in terms of any particulars, like you said, about the yacht for, you know, instance. And I've always with Nord Stream started, I guess, with what I thought initially when it happened. And I found, I have to say, that moment of the, the explosions of the Nord Stream pipeline, perhaps the most terrifying part of 2022, because it seemed to me there were two

possibilities from the start. Either the Russians had done that. And that seemed an astonishing nihilist thing to do if they had done that. And if they were that nihilist about blowing those pipelines up, they could be nihilist about nuclear using nuclear strike as well, or that the Americans had sanctioned somebody else with an interest in the pipelines no longer being there to deliver gas from Russia to Germany. and that seemed pretty frightening, like, prospect too, if the United States was sanctioning the destruction of one of its principal allies' energy infrastructure.

And I mean, Germany, obviously, in relation to that. So there were the bottom lines for me, like, where Nord Stream was concerned. And so I was all only ever really thinking about it in relation to which of those two, hypotheses, terrifying as I found like both of them, was more likely or not, and not getting sucked in to the weeds of stories that were appearing in the press. Now, I think that the interesting thing about this example is it was reasonably clear quite quickly that there were lots of stories being thrown about, some of which might well have been planted by, you know, intelligence agencies or people close, like, to them.

and there was a kind of like muddy in the waters as to like what was going on. The more difficult things are the ones where that kind of thing might be in play and then, but you don't really have a reason to be that suspicious. Historians and podcast hosts are no match for intelligence agencies and limited hangouts

except for we can tell the long form background leading up to these issues. and the fundamental drivers of the conflict, the importance of energy, etc. I was just curious because, you know, I'm in a similar boat. So let's, if you don't mind, let's get back to Israel. I live in the United States, as you're aware, and most people I talk to live in the United States, my friends, my colleagues, my network.

So we're informationally zeitgeist, biased, if you will. Let me ask you this, although the UK is not so dissimilar, but it is. How much international goodwill has the West, particularly the U.S. lost with its support of Israel over the last year? On the one hand, I think the answer is quite a bit. There's no doubt that Israel-Palestinian question is. seen very differently in many other parts of the world, not all, than in the United States, in particular, or at least majority opinion in the United States. But I think that it's come into, let's call it, a geopolitics around these questions

that was already pretty sharply formed by the experience of the end. energy shock and the way in which Western countries responded to it in 2020. And I think that the heart of that was Western and particularly actually European hypocrisy. So that you have a energy crisis in Europe in 2022, particularly after the Russians cut the supply through Nord Stream 1. So that was a few months before the explosions of the Nord Stream pipelines. And the response of many European governments, including the UK government, was to say, we need to burn more coal where electricity is concerned and will keep open coal-powered stations

that were due to close. And this came, what, a few months after, that the same countries had been lecturing a set of developing countries at the COP summit, the previous autumn, about how they had to really commit to phasing out coal by, I can't remember what the year. We told you that when we didn't need coal, but now we need coal, so we're going to burn it. Yeah, they showed that in the, in the, the, coal was the energy source of last resort for the generation of electricity. And at the same time as they were doing that, they were squeezing a number of Asian countries, including some quite poor ones like Pakistan out of the liquefied natural gas market.

they were boasting effectively of how well Europe had coped with the gas crisis of 2020. So benefited from a very warm winter for one thing. Yeah. The Israeli question and what's perceived, I'm not saying that's right that it's perceived in the Israeli case. The hypocrisy about this came in to a situation in which there was already, I think, very considerable anger in non-Western parts of the world about how Western governments acted and the fact that they were pretty hypocritical about in the first instance energy questions and what seemed in the second instance like the question of like civilian killing. Let me ask you this on that civilian killing issue. Will the world, the United Nations,

the international body of countries really let Israel ethnically cleanse the West Bank and Gaza without any interventions, it seems like that's the default path. This is obviously a very hard and painful question as well. I mean, I think that what we've seen thus far is that it's very difficult for Western governments, even the United States, to apply a lot of pressure on Israel in relation to what it does in Gaza, so long as Hamas keeps the hostages, and so long as Hamas remains in charge in Gaza. And however difficult it is for people to think about civilian killings, as a result of Israeli

military action against Hamas in Gaza, it's still I don't want to use the word easy but the answer that still is going to come back is that Hamas has brought this upon the Palestinians and not that Israel has brought this upon the Palestinians I think when you get to the West Bank

I think tensions have been there in the West Bank ever since the day after the 7th of October but I think that they are intensifying I think that that's becomes a different question in terms of how much latitude Western governments are likely to give Israel for how that they handle, particularly given that some European governments are upping the criticism and upping the pressure on Gaza so today is November 11th Monday we're not even a week out from the u.s presidential election but

and therefore I'm giving you a large, wide berth of uncertainty and speculation. But at this point, how do you foresee the potential consequences of a Trump presidency on Israel's approach to Iran? And is it likely or less likely that Israel gives a freer hand in destabilizing Iran? I think that one of the things it's hard to think about here is the fact that Trump is pretty cavalier. as we know with his words at times. So you can find quite a number of instances where he seems to be saying that he'd give Netanaui like a relatively free hand

and encouraging him to hit the nuclear sites. If you look at what happened during the last Trump presidency, and you look at the criticisms he subsequently delected against John Bolton, who's the probably a struggle. proponent as any of the hit Iran strategy. They're not really compatible, I think, with a man who thinks he's going to want to start his presidency with either Israel full-scale war against Iran or the United States getting

involved in Israel's war against Iran. I think if you look at it then in terms of Trump wanting to get back to where Iran policy was when he left the presidency, which was maximum economic pressure, and that was pretty much focused on the energy sanctions against Iran and trying to force down Iran's oil exports in order to reduce the revenue that it got from them and that could then be distributed to groups like Hamas and Hezbollah in particular, the difficulty there is, is that now more than 90% of Iran's oil goes to China. So when Trump was enforcing those, putting the sanctions back, having repudiated the nuclear deal, the Europeans were quite big losers of that decision,

hence the efforts that they made to try and find some alternative financial payment system to get around the sanctions. now trying to get Iran's oil exports down from 3 million barrels a day to, say, under a million barrels of oil a day. That involves imposing harm on China and that it's more likely, I think, now than to have consequences for oil prices, if he would to do that. And that gets us back to the fact that Trump does not like raising higher oil prices. It seems to me that in retrospect, not even actually in retrospect,

because I remember commenting upon it at the time. His tolerance level was about $73, $74 a barrel, and he tended to get on Twitter, as it still then was, and be tweeting at Mohammed bin Salman to increase production once it got anywhere above. Okay, so I agree with that. I think Trump wants a growing economy and to, you know, empower the machine for more productivity, et cetera,

and we need not only affordable oil and gas, but we need a ready flow of it. So when I think of Iran, I think of two aspects. One is there are three million barrels a day of production and you said that 90% of it goes to China. So there's a risk of Iran's oil. But the other risk is their eastern coast is the Strait of Hormuz that the world produces or extracts and refines a better term

around 100 million barrels of oil per day. And a lot of that oil is used in the countries that extract and refine it. Of the amount that is exportable and purchasable in the open international markets, fully half of it gets transported through the Strait of Hormuz, which borders Iran. So the second issue is if there is any meaningful military engagement with Iran, the military combatants better be sure that they can keep the straight open with all those mines and everything else at its narrowest point. It's less than two miles across because that even setting aside Iran's oil.

What about the impact on all the other oil from Saudi Arabia and Oman and UAE and Qatar and everywhere else? can there be any meaningful military action without possibly upsetting that dynamic? I think if we were moving into a situation of like full-scale military confrontation between Iran and Israel, the answer to that is going to be no. But part of the reason why I think that it's not so likely that that will happen is precisely because the stakes of closure of the straight home weeks are so high. And that is true for all the parties to the region. It's true for the United States.

And it's true for China. I realize that they know this. They must know this. But I have heard some quite delusional, in my opinion, plans where they can take out all of the Iranian military installations that would then free up the straight. And there is a way to surgically. you know, declaw Iran and keep the straits open. Yeah, maybe and maybe not. So I wonder if the financial markets are already looking beyond, and maybe Trump has a role in this, already looking beyond the conflicts in Ukraine and in the Middle East and pricing in a peaceful

resolution, at least for the near term, and then the spice will flow. for a few more years. What are your thoughts on that? I think there's no doubt that Trump wants to be a peace president. I mean, he thinks that peace is good for business. And he wants American business boom, driven by what he thinks of as, I mean, I don't agree with it, he thinks of as America's energy abundance. And then the Silicon Valley people like Musk want to add technological innovation.

including things that are very energy intensive on the AI side. And so it all doesn't add up. I mean, I don't think it adds up in the first place, but even just take some of it at face value. It's not going to add up if you're going to have an overwhelming energy crisis that's generated by a full-scale crisis in the Persian Gulf. And I think that from Moran's point of view, the Iranian leadership point of view, is that a full-scale crisis of that order,

would be quite destabilizing for the regime itself. Iran has threatened many times to close the Strait of Hormuz and has not been close at any time as far as I can see to doing it. In terms of the military options, I mean, if you go back to September 2019, as I say, nobody could protect the Saudi oil facilities from an Iranian attack. So I wouldn't be very confident about anything like hugely military ambitious that was being planned, which said, We can just isolate this in terms of what Iran can do and will be, we be in the U.S., I mean, like by that, in military control of the Persian Gulf.

With respect to U.S. energy abundance, it is a snapshot in time that it is true, and it's certainly way more true than Europe. We're over 90% energy independent, but oil, you know, the shale plays are the bottom of the barrel. And so almost 60% of our oil is light tight oil, the shale oil, which depletes at, you know, 80% in the first 18 months or so. So right now, yes, we are the world's leading producer of oil, but that has a fuse on it before it's no longer the case. Iran and Iraq are among the only countries in the world with growing production. and we'll have lots of oil 10, 20, 30 years from now, not the case in the United States. So my follow-up kind of money question for you, Helen,

given all the history of the religious conflicts and the different territorial disputes and the geopolitics of history, how are we going to navigate between now and just pick a year, 2050, 25 years from now, without a giant military conflict in the Middle East about the most important resource, well, the most important resource in the world is the stability of our biosphere, but with respect to our current economic system, it's oil. So how are we going to avert a giant war eventually based on your study of history? I mean, the truth is,

I don't know what the answer to that question is. I think that a lot of assumptions have been made, including by the Biden administration and in Europe, on a set of false premises that the age of oil can come to, not an end, but can be in decline and a different energy future open up, that those premises have been erroneous. As you know, I agree.

And if you think of that, and I think I may have even said this like last time, Nate, if you think of it as a race between depletion and the Permian basin and the electrification of transport, particularly like road transport, the depletion of the Permian basin is going to happen quicker. Yeah, but not only that. I mean, the oil that comes out of the Permian is used for 6,000 more things than just transporting electric cars. So it's way more important than just an internal combustion or an electric vehicle.

No, I agree. I agree with time. I was just using that to make the point in terms of like time is not on the side of, we're reaching the end of the age of oil. And then as you say, look where the reserves, the large reserves are. Now, there's no doubt that some countries in the Western Hemisphere go on as obviously an example, maybe potentially like Suriname now as well, are going to become somewhere between minor players and mid-level players.

But that doesn't really engage with the fundamental. fundamental fact that the lion's share of the usable reserves are either in the Middle East or that they're in Russia or the fact of probably the best prospect for shale outside the United States is in Russia. Right. And so then I would expect, if you look at history, that there will be ongoing, indeed deepening in some sense resource conflicts. around those parts of the world. And on the Russia front, it will raise some questions a certain point, maybe not 10 years times, 15 years time, as to whether this confrontational stance with Russia

in which the United States in particular tries to attack Russia's capabilities as an energy export, which we can see in relation to the Arctic 2 LNG sanctions, which looked like over the last month or so that they've closed down production there, or at least radically like reduced production there. These conflicts are going to be part of the politics, the geopolitics of the next few decades.

Now, how in the case of the Middle East, those conflicts about resources play out at the same time as the Israel-Iran confrontation plays out. That's where I think it gets like incredibly difficult to think about. This is all incredibly difficult to think about. And we're not involving climate or debt or, you know, human behavior or the Amazon tipping into a savannah or any of those things. It gives me a headache, but it's my job to talk to smart people like you about this.

Let me ask you this, something that I really don't know a lot about. Bricks is an economic group of nations who's around 50% of the world's population and around a third of the world's GDP. And their biggest unifying principle might be that they don't really like the United States and the unipolar worlds. But within the bricks and they control around 50% of the world's oil exports, there are different historically not friendly factions like Shia and Sunni, is the Shia and Sunni split within the Middle East going to play an important role in the complexity you just described? To some extent, but I think that the way to think about

the Middle Eastern BRICS members is actually through the lens of OPEC Plus because I think that that's actually quite revealing of how willing the members of OPEC plus have been to set aside differences about any number of questions, to continue, including the Shiite-Sunni divide Saudi Arabia, Iran, to cooperate with each other in controlling the price of oil. That's where they've been since the autumn of 2016. And that survived, you know, Putin's gloating. after the Iranian attacks on the Saudi oil facilities in 2019.

It survived in the end, or a bit with Trump's help and putting back together again. Bin Salman crashing the oil price in March 2020 during the pandemic. It survived the American pressure on Saudi Arabia after Russia's invasion of Ukraine. And even in the space, I would say, over the last few weeks, since, really from the moment Netanyi started talking about the possibility of attacks on oil facilities in Iran. We've seen Saudi Arabia move a bit closer back to Iran again, contrary to the willingness of Saudi Arabia earlier this year back in April, effectively to help Israel defend itself from that first set of attacks from Iran. They have shared oil interests, and I think that that does overwhelm quite a lot of other considerations, including the conflicts between the Sunni and the Shiite states within OPEC Plus.

So when we look at countries in the world and nations and nationalities and cultures, there's a certain power that's at stake. There's military power, of course. There's monetary power. There's energy and resources under the ground power. But then there's also an ethics and a morality and just a sense of humanity and humanitarian causes. And all these things are shifting. Can humanity and humanitarian causes have a meaningful voice globally? that either trumps or influences the military economic and energy power of the nations that we've mentioned.

I think that that question comes very much to the fore over the Israel-Palestinian conflict. And I think that if you look at this from like a long historical perspective, not about energy particularly this time, but about the formation of states you go back in European history and you go actually into the creation of the United States as a continental state the exercise of state building in our country's histories

and continent's histories that's put it that way, it's incredibly bloody that is that it's so buried back in the past particularly in Britain that it's not thought about. It's easier for us in Britain to think that, you know, we've had this, like, quite peaceful politics where change comes about in these sort of...

Well, that peaceful politics is a product of energy surplus. Yeah, but it's just kind of like, doesn't stand up to any actually, like, looking about either where the history of the English state came from or where the history of the British state, when it became, like, British state in the 18th century. And it seems to me that what's going on in the Middle East, in part, it's not the only thing that's going on, obviously, is that these conflicts about the formation of states and borders

are still being contested, very violently. And that's quite at odds, particularly with that discourse, which I think, despite all the disruptions that have hit, you know, like Western politics in the last like decade, there is still a kind of innocence in some sense, I can't think of a better word for the moment, about the way that we talk about politics in Western countries, because we don't think about it from like this long historical perspective. Is it innocence or is it fear of speaking things that are culturally unpalatable? Well, it's probably both in that sense.

But I think that it interjects into these questions a humanitarian language, not that it's not very understandable. I mean, don't get me right. I'm not trying to say, because clearly the suffering of the Palestinians raises all kinds of ethical questions, as does the suffering of Israel. I'm sorry to say that. We in the West are so removed from the kind of history out of which these conflicts come that we don't quite know what to do with that.

But because in the West we've also got the idea that we're the powerful ones, and in some sense the moral ones, which is obviously nonsensical when you think about it. You know, like an historical... It's totally nonsensical. We want to interject that narrative from a distorted view of our own country's history into these political conflicts. Okay, so as an energy historian, is there a way that we can move from a unipolar world, let's just call it the United States and the UK?

as shorthand to a multipolar world. And can such a shift happen relatively peacefully, given our past, given all of your scholarship? What is your opinion on that question? I mean, I'm quite skeptical about that. If you look at it in energy terms, I mean, I think that you can tell the story, again, forgive me if I said this last time,

of the 20th century in terms of, of the geopolitical shifts from the beginning to the end of it around the relationship of the principal powers to oil. So if you say, how is it the case that the British Empire was superseded by the United States as the most powerful single state in the world, a lot of it has got to do with the fact that when the age of oil began, that Britain didn't have it, and it didn't really have much in its empire either. And the United States did have it.

And the other country that had it in large quantities early was Russia. That played out complicatedly during the Tsarist period, and there wasn't much of a Soviet oil industry to begin with, but there was by the 1950s again. such that in the early part of the 1970s or the mid-1970s anyway that the Soviet Union was the largest oil producer in the world. And then you can tell the story of the fall of the Soviet Union, in part, I'm not trying to be energy determinist again, but in part, by the effects of the oil price crash of 1986 coming at the moment that it did in terms of Soviet economic and fiscal vulnerabilities and there need to import food from abroad. and they'd had a pretty devastating effect, I think,

at least in terms of accelerating the end of the Soviet Union. So there isn't, I think, an example of where we're going to say, actually, that it's not going to be raw competition where energy and power are concerned. And my take now would be that the United States still has considerable short-term advantages that have come from shale in terms of maintaining its position, but on the non-fossil fuel energy side of it, including the manufacturing side of that, then China is in a quite strong position,

all the be it, China maintains a set of quite acute fossil fuel energy vulnerabilities. I don't think the age of oil will end the same way that the age of coal and the age of wood never ended. We're just entering an advanced stage of the age of overshoot, where we're adding more and more energy onto the different sources we've used in the past. How do AI and potentially nuclear power play into this story? I mean, I entirely agree with you about the ages don't end. You've only got to look at the chart of coal alone that shows that's the case.

What changes is which of the energy sources is the most geopolitically significant in terms of the exercise of power? And under coal, Britain had a considerable set of advantages. Under oil, it didn't have them, and the United States did have. But what's going to supplant oil as being more geopolitically? I mean, the energy density, the properties, liquid at room temperature, transportable in pipelines. I mean, the EROI, everything is pretty important and not going to be dethroned soon, in my opinion. No, I mean, I think one of the things I've thought about why I haven't got systematic thoughts about this,

but I do think that one of the reasons why the nuclear power issue has returned in the way in which it has, because after all, is if you leave France out of it, it looked like a quite general story of retreat from nuclear power. Germany is just the extreme example of it, but it wasn't against the general trend. France was the actual outlier there was the importance of nuclear power in submarines. I don't think that is actually coincidental. Having said that, I think that the AI question is interesting here because I think that what we can see is that quite a number of the proponents of saying AI is the economic future through innovation are very keen on nuclear power

because the electricity demands are as high as they are where AI is concerned. and nuclear power is extremely expensive, but it's also reliable, which is not true as things stand in most places about wind and solar. So I think there's a quite direct connection, actually, between the renewed interest in nuclear power as an electricity source and the push for AI. All right, let me put you on the spot.

Given what you know about history, given what you know about the importance of energy to the human economy and our aspirations and our institutions, what sort of advice would you give to the U.S. government, the incoming Trump administration or the UK government with respect to what we're doing in the Middle East and the world militarily and geopolitically to arrive. that some benign outcome given all the constraints we've discussed. And what would you avoid? I think that all-out confrontation, allowing for any all-out confrontation between Iran and Israel has to be avoided with the big bot, if you like, that too much cannot be asked of Israel also in the circumstances in which it is in relation to Iran. talking about specifically now in relation to Iran, not in relation to the Palestinians. In the same way in which the Israeli leadership has been made, I think, to understand that

there are limits in what it can do. Is there also going to be limits in terms of what Israel can be asked to tolerate in terms of direct threats from Iran? I mean, I guess one optimistic, on the more optimistic scenario is that Saudi Arabia is quite crucial here, and that it's important not to allow Saudis to drift as they look like that they've been doing, I think, for the last month now, maybe, into prioritising some kind of repression with Iran. that might need some movement on the American side in terms of a stronger security guarantee to Saudi Arabia.

Do you think a Trump administration has potential to have a better relationship with Saudi Arabia than the Biden administration? In principle, absolutely yes, because of what happened last time. But it was also on Trump's watch, so to speak, that the Saudi Pearl Harbor in their minds like happened. So I don't think they've got any reason to have really complete, anything like complete trust in Trump. I think on the UK side, I just say on that,

is that the UK government has to like realize that the United States' interests and the UK's interests in the Middle East, particularly in the Red Sea, are not the same. And I think that might quite sharply come to the form under Trump because the UK has been bound to the US military action against the Houthis is generally being very ineffective. If you think about Trump as a president who is pretty keen on American shell companies

selling a lot of LNG to Europe and if you think then about Russia as trying to move away from pipeline gas for the reasons we know into the LNG market, and then using the Red Sea as a route to sell into Asia, then not only is it the case that from Trump's point of view or Trump's perspective that the United States doesn't have the same direct interest in the Red Sea that the UK does, but actually it's just a lot less important if it's also going to be used by the Russians to be selling LNG.

So I think that the British government has got to be, it just, it's got to be really hard-headed about thinking about like, How can it protect its own energy security in relation to LNG from Qatar in particular without thinking that the Americans are going to do the work for them? Will Ansarala still potentially have a large role in how this unfolds in the Red Sea and their activism and aggression? Or what are your thoughts there? Did you say, Hezbollah?

The Houthis. The Houthis. Yeah. I mean, I think that the Houthis are the, um, the, um, the new. feature of this Middle Eastern conflict compared to, you know, what has gone on in the past. And if you say that Israel has had considerable success against Hamas and considerable success against Hezbollah, it's only had a little bit of success, I think, against the hooties. It's done some, like, direct hits, but it's also shown that it's exposed to direct

attacks on Israel coming from the hooties and that nobody I think has got any idea, you know, whether it's in Israel, in Saudi Arabia or in Washington about what really to do about them. And to see that as, you know, the notion that they might be removed from controlling sufficient territory in Yemen that allows them to cause havoc in the Red Sea. And that's the bit that hasn't really shifted in terms of Israel's strategic, you know, like dilemmas. And it's not an enemy that had had in the same way, you know, not that long ago. So let me ask you this, which is probably not a question you've been asked before. But I do this podcast, one a week for the last three years.

And I have people who have expertise in politics and technology and energy and neuroscience and anthropology and forest and climate change and ethics. And we are approaching a species level conversation. And as an energy historian, you undoubtedly, it is implied that you are a student of human behavior. And as we approach this era fraught with peril with 13,000 odd nuclear warheads and national leaders trying to support their own agendas, but in the fragile international political space of all the other nations. We default to the leaders that have kind of made it through the gauntlet up that were self-selected by left brain over right brain,

on caring about things rather than connections, kind of a linear rather than a systemic worldview, and all dolloped with grandeur and delusion and overconfidence, is there any pathway towards humans? Those people in your country, in my country, and the world can approach some sort of maturity of discourse and wisdom over cleverness on the issues of our time. To me, in a longer time frame, climate change and the environmental leaving of the stability,

of the Holocene is number one, but in the next few years, how we navigate the Ukraine and the Middle Eastern situation, if we can't get out of those without Archduke Ferdinand moment on steroids, none of the other things matter. So what is your just big picture aerial advice on that, Helen Thompson? I think there's several like different questions there. No, I think that there is no reason whatsoever to be optimistic about the quality of the political judgment of the leaders that we have. And that isn't really about any of them as individuals. It is a version of what you said, which is that I'm just going to use the system as a shorthand because what that system means is quite complicated, like perhaps, has kind of elevated

the four certain kinds of individuals who don't seem particularly well suited in terms of just the cognitive mindset in some sense that they bring. But the well-suited ones wouldn't have been elected. Yeah, to these problems. I mean, you know, in my worst moments, I guess, I fear that there's so many now difficulties both at the, you know, existential level and in terms of the individual problems in the individual states, the politics of particular places that we're just kind of condemned to carry on these trends in which that we're going on until the crisis is so overwhelming that actually.

something else comes out of it. And the problem, if you look about that historically, is it tends to be that something else has to come after a great deal of suffering and trauma. So the question in a way is, what would it mean to have some kind of reset that changed the path that we were on in a decisive way? And how could any of us as individuals

think that we could have any influence over that reset? reset. Well, I think the answer that I've come to is any reset now because of the fragility of the Rube Goldberg machine, which is our global economy, is unlikely to be a minor one. We've passed that date long ago. So my hope is that conversations with people like you and others on your podcast, on mine, and beyond, start to paint how disastrous any of those scenarios would be. And so we get the emotional experience of that disaster ahead of time, at least conceptually, and make better decisions.

It's perhaps a naive hope. No, I think that there is, I mean, it's a way of saying that we have got maybe some time to adjust to reality. Yeah. Before reality overwhelms us. That is another way of saying it. Do you have any closing words for our listeners and viewers today? and where can they find you on your own podcast? I mean, first of all, thank you very much, Nate, for having me back.

I've very much enjoyed the conversation and the way that you forced me to answer questions that I might not always want to answer. I mean, I do have some sense that all of us have some kind of responsibility to each other and to ourselves. to try to think through as clearly as we can what is coming at us. And it's not that I can't see that there are some political use for politicians for encouraging us to engage in collective denial, but I think that in terms of the coming crisis, whatever forms it takes, that we will better endure it

whatever it turns out to be if we've got some kind of mental preparation for it. I'm willing to be wrong about that and naive about that, but that's the ground on which I stand. In terms of the podcast that I do, with Tom McTay, it's called These Times. Excellent. Thank you for your scholarship and continuing to describe the game board, which is our reality.

with you that understanding these things and how they're interconnected is itself part of the solution set going forward. Professor Helen Thompson, thank you so much. Thanks so much, Nate. If you enjoyed or learned from this episode of The Great Simplification, please follow us on your favorite podcast platform. You can also visit thegreat simplification.com for references and show notes from today's conversation. And to connect with fellow listeners of this podcast, check out our Discord channel. This show is hosted by me, Nate Hagen's, edited by No Troublemakers Media, and produced by Misty Stinnett, Leslie Batlutz, Brady Hyann and Lizzie Siriani.