For the past 68 years, BP has published its Annual Statistical Review of World Energy, an impressive collection of global energy data that offers a retrospective view of what has happened in the world of energy production, consumption, trade, and related issues.

This week, host Jason Bordoff is joined by Spencer Dale, BP’s Chief Economist. He is responsible for advising BP’s board and executive team, and manages BP’s global economics team, providing economic input into the firm’s commercial decisions.

Jason and Spencer discuss trends, key findings and insights from this year’s report, including the fact that as global energy consumption grew rapidly in 2018, carbon emissions rose at their highest rate in seven years. Jason and Spencer discuss the mismatch between growing calls to act on climate change, growing energy demand, and increasing global carbon emissions. They discuss the unique double-firsts in the U.S. last year, recording the single largest-ever annual increases by any country in both oil and gas production. They discuss how an unusually large number of hot and cold days in the U.S., China and Russia drove strong growth in energy consumption in 2018, and the importance of decarbonizing the power sector to meet our global climate goals. They also discussed BP’s role in fighting climate change.

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Jason Bordoff: Hello and welcome to Columbia Energy Exchange, a podcast from the Center on Global Energy Policy at Columbia University. I’m Jason Bordoff. For the past 68 years, BP has published its annual statistical review of world energy. Impressive collection of analysis of global energy data. And for energy wanks like me who work with energy data on a regular basis, it’s an incredibly valuable resource to help us understand on an ongoing basis for over a period of decades how the energy world is changing and what’s happening. And at a time when the oil and gas markets are in flux, clean energy costs are falling and especially where we feel the urgent need to move more quickly toward a lower carbon future and the level of ambition and rhetoric about that is as strong as it’s ever been. The value of the statistical review is that it gives us a check in to see how we are doing. What happened last year in 2018 in the energy sector and where are we against the goals we have, the ambitions, we have for the energy sector. It’s like going to the doctor on a regular basis, you do a check in. You have goals for your health, for your weight, for your blood pressure but you have to check in with the doctor every year to see how you’re doing? Are you on track and that’s what the statistical review tells us about the global energy system. So, it’s a pleasure to welcome to Columbia Energy Exchange today the person responsible for the team that creates the BP statistical review, BP’s group chief economist Spencer Dale. Spencer, thanks for joining us on Columbia Energy Exchange.


Spencer Dale: It’s my pleasure.


Jason Bordoff: Pleasure to see you again. Thanks for being with us at Columbia this morning to present for the first release in the U.S. the statistical review that came out yesterday. You launched in London. It’s kind of a sobering story. There is the story you told when you presented at this morning was one where the level of ambition and rhetoric about a clean energy transition is not reflected in the reality of what’s happening with the energy mix today. Tell us about that.


Spencer Dale: Yeah, so the, you’re exactly right, Jason. So, BP is producing the _____ [00:02:12] review about energy for 68 years. And when you launch it, it’s an odd thing to launch because the main thing to say is, those data is now available, every one go along, download from BP’s website and these are just the public good for the rest of the world. But that doesn’t take very long, if you’re doing a launch and say, you want to try and also take the opportunity to sit back and reflect about what happened last year. Sometimes, you have to think hard about how do I make this interesting. It was not difficult this year. It was, because at a time, as you say, when the world is increasing societal demands for the urgent action on climate change. When the world is becoming more and more worried about climate change, the actual data on moving quite significantly in the other direction. The growth of energy demand and the growth of carbon last year was the strongest, we have seen for years. And so, you say, there is this mismatch between societal hopes on action on climate change and the harsh reality of the data which is moving quite significantly in the other direction.


Jason Bordoff: And the reason for that is…


Spencer Dale: It’s complicated. But we saw last year energy demands, global energy demand growing by 2.9%. The fastest growth since 2010. That despite weakening in GDP growth and a strengthening in energy prices. So, those two things to guess energy demand to go, should have weakened last year but in fact, it went up and it appears a key factor driving this is weather effects. And so the story here particularly in the U.S., Russia and China, there is an awful lot more hot days and cold days last year. And when it was hot and cold, families and businesses around the world turned for their air-conditioning and their heaters, as they turned that on, energy demand went up and that accounted for a very significant part of the increase in energy demand growth last year.


Jason Bordoff: So, you explained how you develop the model to roughly predict, pretty accurate, good accuracy over the last several decades, the energy demand growth, largely based on GDP growth and energy prices.


Spencer Dale: Yes, I mean, it’s quite, we just did this to try. I would like to get my arms around the surprise in the data. It’s always what you want to do and so, we run this very simple model of just GDP growth and oil prices, the change in oil prices. And what we did is, we did our country levels. We estimated so 90 separate equations and aggregated up. It’s relative, if you got clever people in your team, then it’s a relatively simple thing to do. And what was striking is it really was able to explain the data quite well. But then completely failed to explain 2018 data. But then if we then added to that model just a measure of what’s called heating degree days and cooling degree days which takes into account.


Jason Bordoff: And usually hot, unusually cold.


Spencer Dale: Unusually cold. So, it’s both of a function of how many of those days and also the intensity of those days and it weights two things together. And you put those in and then suddenly that really explains a big chunk of that big pick up in energy growth.


Jason Bordoff: It explain the big chunk but not all of it.


Spencer Dale: Not all of it.


Jason Bordoff: I thought the final component was pretty interesting because it’s a change in what we have seen in recent years.


Spencer Dale: So, the final bit solved two puzzles. One was an extra bit of strength, we couldn’t explain 2018 and it also explained, a sort of a bigger puzzle of why energy demand growth had been so weak in 2014, 15 and 16. And it relates to the pattern of Chinese economic growth. The more you observe in 2014, 15 and 16 was three sectors, iron, steel and cement which had been growing at double digit growth fail in outright terms in those years. A very sharp slowing. And that matters because those three sectors account for about a quarter of China’s energy consumption. So, when they slowed very sharply in 14, 15, 16, they pulled down China’s energy consumption and with it global energy consumption.


Jason Bordoff: And steel, cement, these have been growing for a decade at roughly 10% per year.


Spencer Dale: And then would actually fell in that during that period. Some of that is gonna persist. There has been a rebalancing of the Chinese economic away from those heavy industrial sectors to all services in consumer facing sectors. So, that’s, some of that is gonna persist. But some of that was cyclical. And so some is always going to bounce back. That’s what we saw in start of 2017. But pick up in 2018. So, if I add one more variable to my model which is sort of to capture this sort of movement in these heavy industries, suddenly, it explains both the weakness in 14, 15 and 16 and the remaining sort of strength in 2018. So, I think the answer to the story is we understand why energy demand was so strong. It’s a combination of those weather effects and those industrial factors. Carbon emissions are just a natural quality of that. Once you got strong growth in energy demand, the change in the fuel mix was pretty similar to previous years and so the increase in carbon emissions was just a logical consequence of that increase in energy. So, there is no puzzle in carbon emissions and no extra story other than the fact that we have very strong growth in energy demand and that wasn’t offset by any sort of huge improvement in the fuel mix.


Jason Bordoff: Now, that story of industrial demand growth in China for a decade was a huge driver of global coal use of global emissions and so, when it sharply changed in that period, 2014, 15, 16, but you’re saying, I just want to make sure, I understand, that’s not, that wasn’t a structural change. That was, what else can you tell us about what’s gonna happen in the future?


Spencer Dale: Some of it was structural. So, all the way through that period. So, if you cast your mind back to two, three years, what we saw for two, three years was very weak growth in global energy demand, less than 1% or so. And almost flat to zero growth in carbon emissions. So, I think many people thought, wow, we’ve reached the point of inflection. We have not carbon emissions falling yet but at least, it has stopped growing. This is quite significant. And at the time, it sounds a bit pompous to say but at the time, I did sort of raise the flak and say, careful guys, some of this is structured and will persist but I think some of this is cyclical and will bounce back because I can’t understand the world where China’s energy, if China’s economy is gonna continue to grow at 5, 6% a year, it will be very hard to do that with continuing outright falls in steel, cement and iron. And so, some of it was like to come back. And so, it’s a little bit of both. I think some of it was structural but there was an extent of it was exaggerated by the cyclical bit.


Jason Bordoff: And let me come back to that first point because it’s really interesting conclusion from the statistical review that one of the key drivers of emissions growth not withstanding a rebound in prices and weaker GDP growth was severe weather. And severe weather, we know is likely to be one of the consequences of climate change, moving forward. So, are we in a world now, where we are gonna see this feedback loop where the more climate change contributes to severe weather, the more that’s gonna contribute to energy demand growth and more carbon emissions?


Spencer Dale: So, this is where I can play my economist card and say, that I’m an economist. I’m not a meteorologist. I’m not a climate scientist. My, I’ve done some very amateur reading on this and it’s a very, very, amateur reading and so I will quickly exhaust my reading. The way, I understand, what the consensus in the literature at the moment on this is, as the world warms, you can think of there being a distribution of temperature and that distribution is shifting to the right, if you like. It’s warm getting as the world gets warmer. And so, the frequency of hot days where you need cooling will increase but what one would expect the frequency of cold days will get less. Now, there is some debate about exactly how much that will be if the distribution if you like gets _____ [00:09:59]. But I think to have an increased number of both hot days and cold days, it’s not sort of part of this sort of mainstream consensus at the moment. And I’ve now completely exhausted my knowledge of that sort of science. But it was an interesting science to read.


Jason Bordoff: I’m not asking of like climate scientist but to the extent there was more severity of hot days and cold days, that’s gonna drive faster energy demand growth. That’s what we saw last year.


Spencer Dale: And so, yes. If we see repeating weather patterns like this, then that does introduce that sort of feedback that you’re discussing.


Jason Bordoff: Right. Can you talk a little bit about what we saw in the oil market last year? What were some of the highlights for you?


Spencer Dale: Yes, the oil market is a sort, it was a, it was a play that will be one boring character that carried on doing the same thing every day and something very exciting, sort of a mischievous person on the other side misbehaving. And that and so the boring repetitive character is all the demand. Or demand just carries on growing really quite strongly and steadily and so last year, we saw a growth by 1.4 million barrels a day. So, gain went above what we have come to name as train growth rates. China and India accounting for around two-thirds of that. That’s normal. There is sort of glimmer of interest or surprise on the demand side was the U.S. where oil demand in the U.S. grew by 0.5 million barrels a day. That’s not at all gasoline into your tank story. That’s an increase, a big chunk of that was increase use of ethane. So, ethane which is used as a byproduct or product in petrochemicals, more capacity came off protesting capacity came on in America last year. As it did came on that increase in demand for ethane which ultimately would feed into the petrochemicals sector. That was a demand side. Again, all the excitement and action was on the supply side. Where global production grew by 2.2 million barrels a day last year. That’s double, more than double of ten year average. It’s extraordinary strong growth. U.S. oil production last year 2.2 million barrels a day. So, in that terms, all of the entire growth in global oil production last year was driven by the U.S. Very large is driven by U.S. tight oil and associated natural gas liquids, NGLs. As a result of that, last year the growth in U.S. oil production last year was the largest ever annual increase in oil production that we see. So, BT, Saudi Arabia in the 70s and 80s, so the growth in oil production last year in the U.S., the largest ever annual increase by any country ever seen.


Jason Bordoff: And it seem like the U.S. was a key part of the story of what was interesting and unusual about last year across the board in oil and in gas, in carbon emissions, relative to other OCD countries on the supply side and on the demand side.


Spencer Dale: It’s interesting because normally when you give these presentations on energy outlook or on the stats, the answer to almost every question always is China. This year the answer to almost every question this year is United States. In terms of another key feature of this year stat review is natural gas. Natural gas grew by over 5% both demand and production this year. That’s the strongest growth we’ve seen in natural gas for over, one of the strongest growth for 30 years. In terms of what drove that, the answer is America. 40% of the growth in demand of the increase consumption in natural gas last year was here in America and over 45% of the increase in production last year was in America. And just as we round up that story, not only did U.S. have the largest ever increase in oil production last year, it also has the largest ever annual increase in gas production last year. So, it’s a unique double first for the U.S.. So, looking back across the entire history, the largest ever annual increases, we have seen in oil or in gas came in one year, last year in America, quite stunning.


Jason Bordoff: And stunning indeed. The largest oil and gas annual increases ever in the same country in the same year. And U.S. which we have long thought of as one of the largest energy importers in the world. Is that, I presume the reason for that, you know, we have now this huge amount of associated gas, that’s coming out of the permian, the question is what’s the U.S. gonna do all of these cheap gas? People are trying to finance the next wave of export, projects and define somewhere to put it because of a sense that there is no, there isn’t nearly enough demand in the U.S. to absorb this. This last year, tell us that we might be wrong, it was unique because of these weather events which, I would guess probably accounted for a lot of that rapid growth.


Spencer Dale: Yes, and last year was somewhat different in the sense that, the vast majority of that big growth last year did actually go to feed quite the thirst the domestic demand. Some of it went into the three new LNG which have started up in the U.S. last year but the vast majority went into domestic demand and that was meeting those weather effects. Both directly and increase use of oil within residential and commercial buildings with central oil, central heating and similar. Even more importantly, indirectly in the power sector where people turned on air-conditioning, power demand went up and a very large part of that was met by natural gas. We estimate around half of the increase of consumption of natural gas in America last year was via the power sector. So domestic, just another sort of fact in here is in the growth of domestic demand or domestic consumption of natural gas last year grew by 78 billion cubic meter. So, that’s the same as, that’s the same growth as seen in the previous six years in America or another way, making that point even more dramatic, the growth of natural gas demand in U.S. last year was equivalent to the entire gas consumption of the U.K. So, it’s like adding another U.K. to the gas demand last year, just the increase in that.


Jason Bordoff: But that’s probably not a replicable.


Spencer Dale: One would expect if, you see a slow, if some of these weather effects dissipate, some of that power demand will dissipate and therefore that some of that gas will then be freed up. And that’s when you get your story about the increasing exports via particularly via, liquified natural gas, LNG. What we saw last year and you know, we are quite proud in BP, each year, we try and add new datasets. And this year we added a new dataset in the fiscal review in terms of certainly identifying exports of liquefied natural gas, you can follow those data far more clearly now than you could before in the stats review. You saw a very big increase in LNG exports again last year over 10%. That’s in Australia, U.S. and also Russia coming on stream. And much of that went to Asia and the growth of Asian gas demand particularly in China was able to absorb those LNG supplies for much of the year. But towards the backend of the year, particularly because the winter in Asia was quite mild the end of last year. Combined with sort of big sort of increasing surge of exports. We started to get a market with becoming oversupply, then you see prices in Asia dropping off at the end of the year and that dropping off is continued into this year.


Jason Bordoff: And China was another big part of the growth story for gas. As in prior years, policy driven because they are trying to reduce local air pollution and move away from coal even us in the power sector then for use of heating, coal fire boilers in residential. It’s a big number.


Spencer Dale: These are big numbers and it’s a big story. So, in the last two years, natural gas demand in China has increased by over third, over third in two years. Okay, so essentially grew by 15% in 2017 and 18% in 2018. That is very largely driven by coal to gas switching which is driven by policy encouraging local air quality. This is coal to gas switching in industry and in buildings. So, not in the power sector, it’s not a power sector story. And it’s encouraged by a whole range of policies designed to improve local air quality. Official estimates estimate something like 10 million households in China. That’s roughly half the number of households in the U.K. 10 million households switch from coal to gas boilers in that two year period. And the switch in industry is even greater. And so, you see a very significant shift here and so, those two sectors together, the U.S. largely power sector meeting weather effects, China, local air quality, industry and buildings were the big drivers of natural gas last year.

Jason Bordoff: And as you said, there is a huge mismatch between the kind of goals that nations have committed to in the Paris climate agreement and what’s actually happening to achieve decarbonization. The trends you’re talking about of switching from coal to gas have huge air pollution benefits. Carbon benefits as well but there is a growing consensus that given how far away, we are from achieving our climate goals and how much time remains to get there. There is not room in the carbon budget to grow the use of natural gas. Talk a little bit about the role of natural gas in achieving our carbon goals and how you think about that?


Spencer Dale: So, I think for a period of time, that’s a very significant role for natural gas to play in terms of the breach in fuel, in terms of particularly within the power sector. So, one of the stories we saw last year was power demand continue to grow very significantly. Renewable energy, wind and solar power were by far the fastest growing source of energy and make the largest contribution to the power sector. It accounted for about a third of the growth in power sector generation. But it was only a third and so something else has to fill the gap and so the contribution from coal was nearly as great as we saw for renewables. That was particularly the case in Asia. So, in China and India…


Jason Bordoff: Just want to clear what you just said. So, because people see all the time, headlines about how dramatically the cost of renewables have fallen and how extraordinary, the annual growth rates are. But we are not even meeting incremental annual demand for power from renewable, nevertheless, starting to displace way the current electricity generation is coming from.


Spencer Dale: Exactly. So, people should be extraordinarily excited about the cost reductions of renewables. They should be extraordinarily excited about the very rapid growth in renewables. But they should able be aware that not enough and so, two examples of that are China and India last year. In China and India last year, renewable energy in both those countries grew by over 25%. So, over 25% growth of renewable energy in both China and India. All of that renewable energy is going into the power sector. But that was nowhere near enough to meet all of the power demands in those countries because… Growth _____ [00:21:56] and so, as a result of which and coal was sucked into those sectors to make up, to balance the system. So, as you say, renewable energy, not growing enough to meet the increase in power demand, never learn to start to decarbonize the power sector. Now, we share a chart, in the stats review which is similar to previous stat review which makes the point, the fuel mix going into the global power sector, the share of coal in 2018 in the global power sector is 38%. If you go back 20 years, the share of coal in the global power sector is 38%. The same, share of non-fossil fuels in 2018 is same as what it was 20 years ago.


Jason Bordoff: And just to be clear, you’re talking about the share, what climate change cares about is not the share of the total but tons of CO2.


Spencer Dale: Indeed.


Jason Bordoff: So, this is the same percentage of presumably a 100 denominator.


Spencer Dale: Indeed. Absolutely. And so, the point here is a point that I think the international energy agency being very good at making and that point is saying the shift towards electrification, we see around the world can work as a pathway, as part of a pathway to a lower carbon energy system only if it goes hand in hand with the decarburization of the power sector. Electrification without decarburization is of little use.


Jason Bordoff: But as we think about the climate, the carbon math of that, just the numbers. I mean, you’re saying forget growth, before we start growing electricity demand to electrify transport and heating and other things, we’re unable, how should we think about our ability to do that and what’s required in terms of the technologies and the policies that are gonna be needed?


Spencer Dale: So my view is to achieve this, renewable energy, rapid growth of renewable energy is absolutely essential. But it’s not likely to be sufficient. We did a little thought experiment in this year’s statistical review and said, by how much more would renewable energy had to have grown over the last three years, if we wanted to have held carbon emissions in the power sector flat, the 2015 levels. So, not declining. Just flat at 2015 levels. And what we show is renewable energy would have to grow more than twice as quickly as it did. So over the last three years, renewable generation increased by that 800 terawatt hours. To keep carbon emissions flat, just from the power sector over the last few years, it would have to grow by more than 1800 terawatt hours. It’s a staggering number. For those who don’t, think, what is that extra one 1000 tera watt hours look like? That’s…


Jason Bordoff: Just want to make sure because people, we are not looking at slides. It’s audio, so to, in order, we saw emissions grow in the power sector. If we were to have held them flat and have achieved that delta through renewables.


Spencer Dale: And so achieve it, so you have the same growth in power demand but you use cleaner fuels. And so, if I use cleaner fuels just to maintain to meet that increase in power demand but with no increase in carbon.


Jason Bordoff: If that was all achieved through renewable.


Spencer Dale: If that all just achieved through renewables, that delta, if you like. You would have to renewables would have to grow twice as quickly. Sort of a 100 tera watt hours, 1800 tera watt hours. That additional 1000 tera watt hours is equivalent to the entire renewable generation of China and the U.S. combined in 2018. So, what you have need to seen in addition to the rapid growth, we did see over the last few years, you would have seen, sufficient to generate the entire, replicate the entire renewable generation of China and the U.S. in just three years, just to keep the power sector and carbon emissions of the power sector flat. Or equivalently, you could have achieved the same outcome via 10% switch away from coal into natural gas. I drew two lessons.


Jason Bordoff: Just because the numbers.


Spencer Dale: I have a intuition here is yes, it’s not because it’s some magic wand, it’s just because coal is so much bigger, the relative shift you need in coal of that much small and proportional. The message, I took from this is, one electrification with decarburization which is what we need, it’s very hard. You have to stand very, you have to run very fast to stand still. It’s your point Jason. You have to run very fast just to generate enough power to meet this much, this year’s generation. Never learn to start decarburizing. So, electrification with decarburization is very difficult. The second point is when thinking about how to achieve that, yes, rapid growth of renewable energy is essential. But the arithmetic suggest it’s unlikely to be sufficient at least for the foreseeable future. The foreseeable future, we need many fuels and many technologies to be able to achieve this. Widespread coal to gas switching, increasing adoption of carbon capture, use of storage. Improving energy efficiency particularly here in the developed world where many of us enjoy very plentiful access and to electricity. So, we should be thinking hard and hard about how we can use that electricity and economize in our electric consumption, if we are going to try and achieve these aims.


Jason Bordoff: And the fuel mix, I thought was interesting when you came to Columbia the last few years, that we started to see was not only energy intensity of the economy fall which has been a trend for a long time. But carbon intensity falling even faster. So we are starting to change the fuel mix. But that actually slowed down last year.


Spencer Dale: Well, it was sort of pretty much in line last year and to see, if anything, I think that’s quite, that is quite an encouraging thing for the following reason. Energy demand growth was very strong last year. It turns out in the data, renewable energy tends to be not to move very, not to be very responsive to the cycles. So the amount of renewables that will grow this year will be driven by policy and long term investments and incentives, not by what’s happening to the most recent data. So, what happens is, if you have very strong growth in energy demand, you will see an increase in portion of that met by hydrocarbons, are met by oil, gas and coal. They tend to be more responsive to the cycle. So, what I had expected this year, when looking at the 2018 data of anything is that the fuel mix have gotten worse because you have this increase of oil, gas and coal. And sure enough, you did have an increase in load of oil, gas and coal accounted for over 70% of the growth of energy demand last year which is sort of the highest growth of five years. But within that, natural gas was by far in the way, the fastest growing source of energy. It’s taking share from coal and oil and as a result of which, the fuel mix continue to decline pretty much at its trend rate. So, that was a sort of, that was one bit of encouraging thing, we saw last year.


Jason Bordoff: So, the level of ambition seems to be accelerating, the democratic candidates, you were last talking about net zero by 2050, by 2030 for some. I mean, it’s but what we are seeing is pretty much emissions continuing to rise each and every year. What you’re explaining in quantitative terms is really how difficult and the scale and magnitude of the challenge, we have to bend this curve and start to decarbonizes. So, what’s needed to get there and talk a little bit about the role of a company like BP in helping us get there. That was a question, you got in our and then today about where companies are putting their capex budgets and how that meets, does that need to shift over time.


Spencer Dale: Yeah, and the point I make today and I think it surprised some of your audience today when I was talking, I said, a company like BP really wants a rapid transition to a low carbon energy system. And I can see some of the faces look at me going, really? BP, don’t you sell oil and gas? Surely, you want to sell as much oil and gas as long as you possibly can. And somebody’s instinct but then I just think about this for a moment longer. Just think a little bit harder. If you accept climate science is real, which I certainly do which BP certainly does, then the transition to a low carbon energy system is inevitable. We have to go to a net zero carbon energy system. The only thing which is for debate is the pace and nature of that transition. An accelerated transition as envisaged by the Paris climate goals would certainly be very challenging for a company like BP. We would have to rapidly change our businesses, developing a more zero carbon businesses as we change from an oil and gas company to an energy company. That will be hard thing to do. But think about any other scenario. So, think we’re sitting here Jason, ten years time and carbon emissions are continuing to rise over that ten years which is under many scenarios very plausible. How can we run a business, and a business the size of BP, with investments of BP, have long term investments, we have. If you know, you’re not on stable path. If you know at some point you’re gonna need to get off this path and get carbon emissions falling really quite dramatically and the longer, you be there, the harder it becomes. And so, as soon as you think about this for more than a minute, it becomes obvious about why a company like us, needs to play our role. And so, why we want to be part of this process and why, not only is it good for society, it’s good for companies and like BP and so, we stand committed to playing our role. Somebody else ask us today.


Jason Bordoff: Why are you shifting…


Spencer Dale: Why are you doing it, why don’t you just shift all your capex budget…


Jason Bordoff: To make that transition happen more quickly.


Spencer Dale: And the problem here is, those same governments that signed up to the Paris climate goals, if you actually look to what their policy commitments were, their so called nationally determined contributions, their NDCs, that some of those contributions didn’t have carbon emissions falling by 40-50% over next 20 years. In fact, they didn’t even have carbon emissions falling over the next 20 years. That some of those actual policies will have carbon emissions rising over the next 20 years and so, for a private company, for them to say, let’s start investing huge sums of money on the basis that governments will deliver this policy when some of the policies, they’ve committed to is still rising. It’s a difficult thing to do. And I think, we feel strongly here that the best role that we can play in this energy transition is making sure that we remain a financially powerful company that we can actually undertake these investments and so, yes, we will play our part but it’s, we can’t get ahead of society and heads of governments because that will be very difficult thing to do and largely recipe for losing money which, if you go back in BP’s history, it will be on petroleum, sort of beam that back once before and so, we are clear that we want to play our role but we also be clear that we can’t do this on our own.


Jason Bordoff: Can’t do on your own meaning, society needs to collectively policy makers, need to drive that transition and then the capital reinvestment plans will follow the technology, will follow and you agree, we need that sort of…


Spencer Dale: Yeah, absolutely. And so, we have been very strong advocates of carbon pricing. We remain very strong advocates of carbon pricing. We need more decisive policy actions and to repeat again, we want this because it’s in our own interest, not it is in society’s interest. It’s in our own interest and when I launched in London yesterday, somebody drew the distinction between we had protesters on the street protesting for greater change on climate. But they also pointed out, we have protesters on the street in France, protesting about increase in carbon prices, raising energy. And this is part of the problem here. Yes, we want change. But that has consequences as well and so, it is a societal thing and a government thing to try and how do I bring those people who are protesting on the streets in Europe for wanting climate, action on climate change alongside those people who are protesting against the increases in carbon prices that we saw in France.


Jason Bordoff: So, there is a lot, I would love to spend more time teasing out these issues. We obviously spend a ton of time thinking about at the energy center the scale and magnitude of what is required for this transition? How to make the numbers add up? What sorts of policies, we needed to move capital and how to think about the political economy as well as the economics and the policy there but unfortunately, we are out of time right now. But hopefully, Spencer, we’ll have you back, continue this conversation in the future. Thank you for sharing your insights on 2018 with us. Thanks for continuing to produce this incredibly valuable source of data for those of us who spend our time analyzing data and making it publicly available over so many decades now. I look forward to talking with you again soon at Columbia.


Spencer Dale: Thank you, my pleasure.


Jason Bordoff: Thanks to all of you for listening to this episode of Columbia Energy Exchange, until next time, I’m Jason Bordoff. For more information about the Columbia Energy Exchange and the Center on Global Energy Policy, visit us online at or follow us at Columbiauenergy on social media. Thanks for listening. We’ll see you next week.