1 00:00:00,840 --> 00:00:04,080 We are very fortunate to have a back seat in Germany. 2 00:00:04,960 --> 00:00:11,760 She was here as a visiting research scholar who years 2005. 3 00:00:12,600 --> 00:00:23,460 Yes, I was very, very early on in the iteration of this program when it's been ongoing, Houston and others, as the other has been engaged in, 4 00:00:24,030 --> 00:00:28,560 not only having been a serving officer of Fleet our own, 5 00:00:29,160 --> 00:00:38,310 but also has been engaged in trying to make sense of how strategies have worked out or not worked in the last two decades. 6 00:00:40,020 --> 00:00:43,350 A moment ago it appeared on movie screen. Actually, it was biography. 7 00:00:43,830 --> 00:00:48,239 I can't get through all of the list of the appointments he's had in the Sea of 8 00:00:48,240 --> 00:00:53,990 Service because it reads like a sort of you're left with this the raconteur movie, 9 00:00:54,000 --> 00:00:57,450 right? He's not the only one. I think both of you get to the end of the list, 10 00:00:58,020 --> 00:01:06,629 but it would be worth pointing out that in the context of what discussing here his role as strategy director in embassy in Afghanistan. 11 00:01:06,630 --> 00:01:11,820 We were we just briefly got right to I people who would have known completion of Afghanistan his 12 00:01:11,820 --> 00:01:17,340 observation of the third in order to make this conversation today that we hear about today. 13 00:01:18,420 --> 00:01:21,460 I'm not going to I didn't actually vote. 14 00:01:21,810 --> 00:01:26,490 You live in Cornwall. Justice might not work, so I'm delighted that you're doing that. 15 00:01:26,670 --> 00:01:31,080 This is a new departure in many ways, things that weren't certainly for us. 16 00:01:31,740 --> 00:01:35,760 But we are delighted that you've come to talk to us again after all these years 17 00:01:35,760 --> 00:01:39,780 and that you come out enriched with experiences to bring to our attention. 18 00:01:40,950 --> 00:01:48,079 Thanks very much. I'll get my presentation running soon. 19 00:01:48,080 --> 00:01:53,030 It's just. It's just. Just take your time. Here we go. 20 00:01:54,580 --> 00:02:02,630 It's good for you to stay on. Great, important first slide, as you can see. 21 00:02:04,040 --> 00:02:09,260 Thank you for the invitation. Great to be back here in Oxford. 22 00:02:10,430 --> 00:02:11,930 I'm a bit down from approach from the weather. 23 00:02:12,020 --> 00:02:19,700 You expect that comments made lots of wonder whether I actually come and say, oh no, I don't like it as you flew. 24 00:02:19,700 --> 00:02:24,860 But probably not because my background is very. 25 00:02:24,890 --> 00:02:28,080 I started off as a scientist. I read Mass Motion on the Reef. 26 00:02:28,100 --> 00:02:33,139 My first script went up to join the Navy. They wanted me to be a hydrographer. 27 00:02:33,140 --> 00:02:35,240 I didn't want to do that. My venture into that flight. 28 00:02:36,530 --> 00:02:42,320 They released me after flying and a little bit of ship grinding at Cambridge that year at Cambridge. 29 00:02:42,830 --> 00:02:48,740 And my big subject there was international economics. I studied that latterly. 30 00:02:48,770 --> 00:02:55,190 I did some time in Afghanistan because the only thing that I was there to observe in Afghanistan and was report on that. 31 00:02:56,900 --> 00:03:00,080 I also eventually left the service, did a couple of things that went into energy. 32 00:03:00,080 --> 00:03:03,860 And I now work in marine renewable energy, but I'm being generous to my company. 33 00:03:04,130 --> 00:03:09,650 I should say that I'm here in a private capacity and nothing that I'd say will will should be attributed to the company. 34 00:03:09,980 --> 00:03:16,790 They've asked me to say that. So it's really very much my own private thinking and work that I've done. 35 00:03:17,690 --> 00:03:20,980 The work started really, and here is the title. 36 00:03:21,320 --> 00:03:24,049 The work started, I suppose, thinking about strategy. 37 00:03:24,050 --> 00:03:33,800 I've worked with Houston for a bit here in 2005 2006, and was thinking about how we made strategy out of working in the policy department, 38 00:03:33,800 --> 00:03:38,060 in the Ministry of Defence and had a strong view that we didn't do very well. 39 00:03:39,200 --> 00:03:47,600 I found that latterly when I worked for the Chief of Defence Staff as his principal staff officer and again came to that same conclusion. 40 00:03:48,530 --> 00:03:57,500 I ended up after that appointment in Afghanistan and I remember well walking or getting out in that campaign away from Helmand, 41 00:03:58,010 --> 00:04:06,799 which was where the British forces were, and instead getting around the campaign to essentially central moments for me was going out to Iraq and 42 00:04:06,800 --> 00:04:12,710 going to Bagram to the divisional headquarters for the Army office a month junior or a couple at least. 43 00:04:13,220 --> 00:04:17,540 Iraq was amusing because I was a Commodore. That got very confusing. 44 00:04:17,540 --> 00:04:22,010 And Cheryl Coles, who was the ambassador, started to call me Brigadier General. 45 00:04:22,220 --> 00:04:26,560 So I arrived at the Brigadier General was therefore in that sort of capacity. 46 00:04:26,900 --> 00:04:27,860 I thought, this is amusing. 47 00:04:27,860 --> 00:04:34,370 Until the divisional commander in Iraq got out his maps and it suddenly occurred to me that he thought I really was a brigadier general. 48 00:04:35,300 --> 00:04:37,700 So we spent some time talking about the dispositions. 49 00:04:37,700 --> 00:04:43,400 Fortunately, I I'd just read Rommel's book and infantry tactics, and I was able to give sage advice. 50 00:04:43,490 --> 00:04:53,060 And I'm pleased to say that Harold is still not in the hands of Taliban. But more importantly, that I talked to the J5 were the planners in Herat. 51 00:04:53,390 --> 00:04:58,510 It was a Spanish and Italian brigade. 52 00:04:58,520 --> 00:05:03,320 It was clear to the planners in background, which is an American division and second level, 53 00:05:03,800 --> 00:05:09,380 and to both of those sets of people, I asked the same question and the question was, what's the strategy? 54 00:05:09,470 --> 00:05:14,270 What are you working to? And from both of the sets of young majors, who were the planners? 55 00:05:14,630 --> 00:05:18,170 I got the same response and response was to look down at their feet and go home to me. 56 00:05:18,830 --> 00:05:22,280 And then when I eventually I to persuade them that that's actually the same question. 57 00:05:22,280 --> 00:05:24,920 The same response came up with no strategy, General. 58 00:05:26,060 --> 00:05:32,300 We didn't go on and say that we were what we were five or six years into the campaign with no strategy going yet. 59 00:05:32,960 --> 00:05:36,440 And that really what led me to start to write more. I came home and read the book. 60 00:05:36,950 --> 00:05:40,160 I was quite pleased with myself when I had written it. Actually, it was quite a good book. 61 00:05:41,390 --> 00:05:46,790 There is now a very, very serious flaw I used to denote by saying the best book written by a senior military officer, 62 00:05:47,150 --> 00:05:50,000 British military officer for the last 70 years in that troop isn't there anymore. 63 00:05:50,810 --> 00:05:54,740 But that in itself tells the story, which is I don't think we have been thinking about strategy, 64 00:05:55,640 --> 00:06:01,460 but there was not a point of my presentation, which my presentation is that I can now see having written it in 2011. 65 00:06:01,820 --> 00:06:05,300 But there was so much that I was missing at a much higher and deeper level. 66 00:06:05,540 --> 00:06:12,230 And that really is the subject of today's presentation structured in a in this way, 67 00:06:12,800 --> 00:06:19,850 I'm going to talk about the conventional geopolitical narrative as I think of it, what's going on, how we tend to explain it. 68 00:06:19,850 --> 00:06:21,559 Those of us who are working on strategy, 69 00:06:21,560 --> 00:06:27,889 what I'm then going to give you an alternative structural logic to show you that I think something much deeper is going on, 70 00:06:27,890 --> 00:06:30,920 much more profound, much more crime is going on. 71 00:06:31,400 --> 00:06:36,920 Then I would say to a little bit about so what the consequences and I'm going to try and distinguish between problems, 72 00:06:37,460 --> 00:06:42,890 which are things that we can solve and predicaments which are things that we can't solve but just have to navigate. 73 00:06:45,220 --> 00:06:45,940 So it's not off. 74 00:06:48,430 --> 00:06:54,490 I'll come straight into this, which is conventional geopolitical narratives, but this has been a Jenkins for those of you who don't know him. 75 00:06:54,940 --> 00:06:59,200 He, like me, believes strongly that we don't do you very well in this country. 76 00:06:59,800 --> 00:07:04,810 And he sort of puts it in his he puts one of the problems in terms of how things have not gone 77 00:07:05,110 --> 00:07:10,060 well in places like Iraq and Afghanistan and a lack of strategy and lack of strategic thinking. 78 00:07:11,140 --> 00:07:20,740 He's right. But at the superficial level, I think it's fair to say that actually these endeavours that we've engaged in not been successful. 79 00:07:21,280 --> 00:07:23,350 I can see little sign of them being successful. 80 00:07:23,660 --> 00:07:27,970 The question about why there was a different story, and that's something that we could talk at length about. 81 00:07:30,460 --> 00:07:36,790 This is my view. I use the medical metaphor and I use the medical metaphor. 82 00:07:36,840 --> 00:07:47,830 We tried to conduct open heart surgery on other countries, and we've tried to re-engineer them in many ways in our own images or similar images. 83 00:07:48,310 --> 00:07:52,390 It's has been costly. It's been costly in treasure. 84 00:07:52,540 --> 00:07:57,130 Huge amounts of money spent by the Americans, for example. It's been costly in blood. 85 00:07:57,730 --> 00:08:03,760 And I think ultimately it doesn't work. I've yet to actually look at one of these interventions and find out that it really worked. 86 00:08:05,260 --> 00:08:10,719 If you want my opinion, when we look back in the middle of the 21st century at these times, 87 00:08:10,720 --> 00:08:19,810 I think they will look at engagements in these places akin to how we look back at the Victorians proselytising, 88 00:08:19,810 --> 00:08:30,070 a form of Western values and Western thinking through the use of military force and development aid with little consequence of success. 89 00:08:33,800 --> 00:08:38,310 I don't think our politicians are much interested in much more. 90 00:08:39,000 --> 00:08:42,300 We saw David Cameron try it out in Libya. A mistake, in my view. 91 00:08:42,330 --> 00:08:47,640 I wrote about this for the Defence Committee and we saw them try it out in Libya and think we got away with that. 92 00:08:47,790 --> 00:08:52,980 The British and the French by the skin of our teeth. It didn't turn out as we expected. 93 00:08:53,280 --> 00:08:59,610 Furthermore, it seemed clear to me and I wrote about this at the time that the Libyan intervention would have implications elsewhere. 94 00:09:00,180 --> 00:09:04,020 I felt it might lead to uprisings elsewhere such as Syria. 95 00:09:04,410 --> 00:09:08,280 I also thought it would skew our relationship with the Chinese and the Russians. 96 00:09:08,370 --> 00:09:18,440 And so it has. I felt that because we were going in there on a agenda or with an objective, which was to do with protecting people. 97 00:09:18,450 --> 00:09:22,470 Whereas actually the real agenda, as was the case in Iraq, was actually regime change. 98 00:09:22,890 --> 00:09:25,080 We were intent on regime change, and that's what we did. 99 00:09:26,280 --> 00:09:33,120 I think, though, that there's been enough of this actually for our politicians to be much, much more much more cautious about what we're doing. 100 00:09:33,540 --> 00:09:37,560 So I do believe that this age of neoliberal intervention is drawing to a close. 101 00:09:38,700 --> 00:09:46,950 I also think, though, that there are other things going on. And I think one of the things that we cannot stop thinking about is energy. 102 00:09:47,550 --> 00:09:53,070 I'm going to talk quite a lot about energy today because I think it's going to define the next 30 or 40 years. 103 00:09:53,070 --> 00:09:56,070 And I'll explain why. That's a map in the Middle East. 104 00:09:57,210 --> 00:10:00,990 You can see those green in the black areas where the key oil fields are. 105 00:10:01,320 --> 00:10:09,330 The Ghajar field here is the Supergiant amongst all the oil fields and Saudi Arabia produces about between nine and 10% of the world's oil. 106 00:10:09,870 --> 00:10:15,850 It's a huge it's a huge oil from Iran to Iraq. 107 00:10:15,870 --> 00:10:19,710 This is the really the centre when it comes to world energy. 108 00:10:20,340 --> 00:10:26,459 And it's worth bearing in mind that in world energy, 84% of world energy is a result of fossil fuels, 109 00:10:26,460 --> 00:10:30,270 of which the bulk of that well, the biggest proportion of that is actually from oil. 110 00:10:30,540 --> 00:10:37,140 So oil is major. So we cannot no matter how much I might like us not to intervene in these places, 111 00:10:37,470 --> 00:10:42,150 we cannot take our eye off the ball in places like this, nor can we take off the ball in places like the Gulf. 112 00:10:43,860 --> 00:10:49,710 We've seen some of the consequences of this. We saw it in Paris, what I would call consequential, terrible. 113 00:10:51,110 --> 00:10:53,170 I think some people will take different views on this. 114 00:10:53,180 --> 00:10:59,749 I think that one of the mistakes that we've made and this is something Rob and I talked about a little bit over lunch, 115 00:10:59,750 --> 00:11:02,570 was we had not understood the proper political context. 116 00:11:03,500 --> 00:11:09,200 I think the context within which we are operating is a context which goes back to the seventh millennium. 117 00:11:09,620 --> 00:11:15,050 And I see it from two axes, I imagine an axis and where to the right and the left is Shia and Sunni. 118 00:11:15,980 --> 00:11:21,110 An up and down is conservative and modernisers. 119 00:11:21,680 --> 00:11:27,770 And you can pretty much place most of the Middle East in that sort of sense, and it helps you think about it. 120 00:11:28,550 --> 00:11:34,670 I think we completely misunderstood that context in Iraq and we've completely misunderstood its inverse, which is Syria. 121 00:11:35,390 --> 00:11:42,920 And without understanding these contacts, I increasingly take the view that we should not engage in these places unless we really have to. 122 00:11:43,070 --> 00:11:49,280 And that is, to use the magical phrase, we should first do no harm before thinking about what we're doing. 123 00:11:50,690 --> 00:11:55,610 It's not the big story, but it's drawing people's attention into what is the big story, I think. 124 00:11:56,180 --> 00:11:58,190 I think the big story happens that sort of three levels. 125 00:11:58,190 --> 00:12:02,840 The story of tragedy we talked about had what we did in Afghanistan, what we're doing in Syria. 126 00:12:03,260 --> 00:12:08,630 That's the superficial level. There's a deeper level in which there's this millennial conflict that I've been talking about. 127 00:12:08,960 --> 00:12:14,510 But the real deep level is the one that I want to draw your attention to alternative structural logics. 128 00:12:15,860 --> 00:12:20,120 I'm going to talk a little bit first about the environment. Are there any climate scientists here? 129 00:12:21,230 --> 00:12:27,120 Well, that includes me as well. I mean, I do have a degree in oceanography, but it's a long time ago and I can't remember much it. 130 00:12:28,490 --> 00:12:35,060 Climate change is happening. No doubt it's happening amongst those of us who are scientists and who work in this technological area. 131 00:12:35,510 --> 00:12:44,510 Anthropogenic climate change has the same scientific validity as Newtonian physics or Darwinian evolution. 132 00:12:44,750 --> 00:12:50,420 So amongst the scientists it's a non-issue. It's not politically, I'm afraid, and that's the sadness. 133 00:12:50,870 --> 00:12:55,220 I happen to think also that it's not the big issue. For reason banal explain. 134 00:12:55,430 --> 00:13:04,010 You can see that that we see the reductions in the Arctic ice floes. 135 00:13:04,190 --> 00:13:09,110 This is methane which is being given off as a result of climate heating up. 136 00:13:09,110 --> 00:13:14,540 There hita is another slide which for me actually sort of really highlights one key issue, 137 00:13:14,540 --> 00:13:18,900 which is the speed with which that's changing this for the non climate scientists 138 00:13:19,520 --> 00:13:25,910 here or is it just here is an event called the Pegasi is in trouble maximum. 139 00:13:26,960 --> 00:13:31,070 It's the most violent event on the recent climate record. 140 00:13:31,070 --> 00:13:35,030 And during that period the temperature rose six degrees in 20,000 years. 141 00:13:36,020 --> 00:13:41,480 It's a spike and a big spike. And the most violent event went up there, stayed up then then came down later. 142 00:13:42,140 --> 00:13:45,530 At the moment, we're predicting 1.5 degrees to 150 years. 143 00:13:46,550 --> 00:13:54,260 So you can see the different rates that 1.5 years, that 1.5 degrees C is actually happening, six degrees in 2000 years versus 1.5 degrees. 144 00:13:54,260 --> 00:13:58,219 And and in 150 years, I'm quite friendly. 145 00:13:58,220 --> 00:14:04,160 And he was helpful writing my book with James Lovelock, the great climate scientist who wrote a lot about this. 146 00:14:05,270 --> 00:14:07,430 He's 94 now, but is sharp as a whisker. 147 00:14:07,970 --> 00:14:15,860 And he takes the view, which seems to make sense to me, that we cannot trust the models because actually what we're trying to model is so complicated. 148 00:14:15,890 --> 00:14:22,370 And he says that our understanding of the climate is about the same as our understanding of the human body at around about the 1750s. 149 00:14:23,060 --> 00:14:29,390 So I think we have to be cautious about those models. I cannot speak as a as a as a rather out of date mathematician, but that makes sense to me. 150 00:14:30,530 --> 00:14:34,370 But I don't think it's a big issue. Let me come on to what I think are the two big issues. 151 00:14:38,300 --> 00:14:46,200 First is economics. Are there any economists who. I'm not only a Keynesian economist. 152 00:14:46,800 --> 00:14:50,100 For those of you who are, I think some of this will come as a shock. 153 00:14:51,480 --> 00:14:57,660 Debt is a big issue. We are more indebted at the moment in global terms than we have ever been through history. 154 00:14:58,140 --> 00:15:04,170 I think British interest rates as their lowest for the poor, for recorded history, certainly for the last 50 years. 155 00:15:04,890 --> 00:15:09,150 And this debt is a major, major issue. This is a famous book amongst economists. 156 00:15:09,150 --> 00:15:10,380 It's called This Time is Different. 157 00:15:10,590 --> 00:15:16,140 And what it essentially says is that actually, when you come into these sorts of situations and then time and again, 158 00:15:16,530 --> 00:15:19,290 when indebted countries get to where they are and have economic problems, 159 00:15:19,290 --> 00:15:24,630 actually they construct a narrative which says that actually this time is different. 160 00:15:24,750 --> 00:15:28,970 So whether it's in 2001, the bubble that occurred there or 2007 there, 161 00:15:29,070 --> 00:15:34,080 always a narrative which takes you to explain to you that actually we're not going to have a problem this time. 162 00:15:34,680 --> 00:15:39,330 We are more indebted, much more than we were at the start of the 2007 2008 crisis. 163 00:15:40,770 --> 00:15:47,250 And there are not much more protections, despite the fact that governments have been looking at banks and how they might do that. 164 00:15:47,910 --> 00:15:51,420 This is a massive problem because it's actually slowing down the world economy. 165 00:15:51,870 --> 00:15:57,720 It's a burden and it's difficult to see how we'll get out of it. Growth, growth. 166 00:15:57,870 --> 00:16:02,489 And this is really where we're starting to get to the nub of it. Growth is something we all talk about, isn't it? 167 00:16:02,490 --> 00:16:08,230 Something our politicians talk about it. They talk about the need to get back to sustainable growth. 168 00:16:08,250 --> 00:16:12,389 And sustainable growth is an oxymoron. As a mathematician, 169 00:16:12,390 --> 00:16:19,710 you cannot keep growing if you grow up to seven and every 5 to 6 years it doubles and that's exponential and sooner or later it tops out. 170 00:16:20,220 --> 00:16:28,379 So growth cannot keep going mathematically, and it certainly can't be physically on one point the planet, but current global growth levels. 171 00:16:28,380 --> 00:16:36,300 But what you can start seeing this growth just starting to peak a little bit and that's just a hint about where I'm going with this. 172 00:16:36,870 --> 00:16:40,740 Has anybody bonds by any chance read this book called Limits to Growth? 173 00:16:42,060 --> 00:16:47,070 It's a fascinating book, is written in the 1970s during the Club of Rome time. 174 00:16:47,070 --> 00:16:51,330 And what they did there were systems analyst, two meadows, a husband and wife. 175 00:16:51,630 --> 00:16:55,740 And I think a Swedish was was the first. I'm looking for advice, Rob. 176 00:16:55,740 --> 00:16:56,610 He's sort of nodding his head. 177 00:16:56,610 --> 00:17:06,660 So it's a fascinating book because what it basically says is that we approach and will approach in this 21st century a time when growth stops. 178 00:17:07,770 --> 00:17:12,479 I believe that we've arrived at it and I'm going to explain why. It was in the 1970s. 179 00:17:12,480 --> 00:17:15,690 It was prepared. It was really looked at in 2010. 180 00:17:16,020 --> 00:17:18,560 And what a lot of its predictions are still coming true. 181 00:17:18,570 --> 00:17:24,870 And indeed it's most recently looked at by the Melbourne Sustainable Institute and almost all of the graphs which are in it. 182 00:17:25,320 --> 00:17:30,720 I'll show one of them to show that all of its predictions are coming true. 183 00:17:33,120 --> 00:17:39,230 So let me just leave economists aside for once. I'd actually put that doubt in your mind that we can continue to grow and turn instead to energy. 184 00:17:40,620 --> 00:17:43,590 I think energy is the big issue, and I'll explain why. 185 00:17:44,610 --> 00:17:51,930 It looks to me that growth is incompatible with energy prices at $140 a barrel and perhaps even as low as $75 a barrel. 186 00:17:53,160 --> 00:18:01,200 And so we've now got a massive, massive issue in energy. We watch and I watch energy like a hawk because it's my job at and what I'm 187 00:18:01,200 --> 00:18:08,520 showing you there is what we're seeking to but demand over there as predicted. 188 00:18:08,850 --> 00:18:15,210 And this is how we're seeking to supply this demand. We're seeking to supply it with as yet undiscovered oilfields. 189 00:18:16,200 --> 00:18:26,370 A lot of you will no doubt have read in the press and perhaps been drawn in by the arguments about fracking. 190 00:18:26,520 --> 00:18:30,560 Do not be. The fracking thing is a short lived thing. 191 00:18:30,570 --> 00:18:38,010 The American fracking the American fracking industry will probably peak if it's not already peaked, which it may have done. 192 00:18:38,010 --> 00:18:46,110 It will peak by 2020. It's worth bearing in mind that each of those fracking fails actually meets its maximum consumption at about six months, 193 00:18:46,560 --> 00:18:50,970 and within 24 months it's down to 10% of its consumption. With 30 months, they've usually stopped. 194 00:18:52,680 --> 00:18:57,240 So it will not be a it will not be a panacea, I guarantee you that. 195 00:18:57,390 --> 00:19:01,650 Furthermore, it does not produce usually oil, usually produce condensates, 196 00:19:01,650 --> 00:19:04,680 which are oil substitutes, and do not have all the things that we need in oil. 197 00:19:05,400 --> 00:19:10,980 That very good evidence suggests that oil has indeed peaked and peaks around about 2010, 198 00:19:11,170 --> 00:19:19,440 which I mean, crude oil did come across the Hubbert's curve, Hubbert's curve. 199 00:19:19,440 --> 00:19:28,620 Hubbert was a oil geologist professor who wrote in the 1950s, and he used a quite simple mathematics to map out. 200 00:19:28,620 --> 00:19:33,330 He saw what he thought was happening in terms of world discoveries and produced this red curve. 201 00:19:33,450 --> 00:19:36,240 It's called a logistics curve for those of you who are mathematicians. 202 00:19:36,600 --> 00:19:41,610 And what it basically shows that when you've got a resource which is like oil or like coal. 203 00:19:42,120 --> 00:19:46,770 More like natural gas, but its exploitation follows a predictable curve. 204 00:19:47,820 --> 00:19:55,710 This is the curve that this is the theoretical curve in rate and the actual curve that American oil production followed is that curve. 205 00:19:56,610 --> 00:20:01,559 And you can see he predicted in around about 1956 with one year he was one year out, 206 00:20:01,560 --> 00:20:06,180 I think actually when American oil would would peak and was one year out. 207 00:20:06,180 --> 00:20:11,280 The little bit of a spike just here, which is fracking coming in, but fracking will not last. 208 00:20:11,460 --> 00:20:16,050 As I've said, it's cutting back massively now. So he's just about spot on. 209 00:20:16,950 --> 00:20:20,550 This is a terribly important curve in trying to understand the future. 210 00:20:21,000 --> 00:20:24,960 Terribly important. Not coming back to it to other issues. 211 00:20:26,550 --> 00:20:31,850 Here is something called energy return on energy investors. Very easy to get drawn into prices on oil. 212 00:20:31,860 --> 00:20:35,100 How much does it cost? $75 a barrel. What's exportable? 213 00:20:35,340 --> 00:20:39,090 This is much, much more interesting. It's the energy return. Energy invested. 214 00:20:39,660 --> 00:20:44,500 How many barrels of oil do I get for every barrel of oil that I invest in Saudi Arabia? 215 00:20:44,500 --> 00:20:50,640 NORTH Well, it's something like 1 to 100. This work is all been done in New York State University by a brilliant professor called Charles Hall, 216 00:20:51,530 --> 00:20:54,540 U.S. environmental biologist or an ecologist, actually. 217 00:20:54,840 --> 00:21:03,090 But it's very, very interesting work. So for Saudi Arabian oil, for every one barrel of oil you invest, you get about 100 back, 200 and Garfield. 218 00:21:04,110 --> 00:21:09,269 But what you can see, if you look at these little things, they're coming down and they're coming down over time. 219 00:21:09,270 --> 00:21:13,530 So we're now down to about four for a new field, a new conventional field. 220 00:21:13,530 --> 00:21:17,790 It's about 12 barrels to one for fracking. It may be as low as 3.5 to 1. 221 00:21:18,930 --> 00:21:22,140 That tells us a message, because when you get to 1 to 1, it's a waste of time. 222 00:21:22,620 --> 00:21:25,469 It doesn't matter how technically technologically exportable it is. 223 00:21:25,470 --> 00:21:31,050 If you're using more energy to get it out than you get in return, it's an it's a sink, not a source. 224 00:21:31,920 --> 00:21:37,320 And what that curve is telling you is that actually we're on the other side of that bigger curve. 225 00:21:37,560 --> 00:21:43,950 It means that actually energy and particularly fossil fuels or oil in particular is getting more expensive to extract. 226 00:21:45,420 --> 00:21:49,920 That will not stop. We have seen no big new oil fields, so no big new cheap oil fields. 227 00:21:50,310 --> 00:21:53,750 And it doesn't really sort of matter in terms of the price as well. 228 00:21:53,820 --> 00:21:58,139 What matters is that actually if we can't, we use more energy, how much it costs. 229 00:21:58,140 --> 00:22:01,260 We use more energy to extract the oil than we get in return. 230 00:22:01,800 --> 00:22:08,850 There's very good evidence to suggest that ethanol and the use of biodiesel is actually uses more energy than it returns. 231 00:22:09,630 --> 00:22:17,400 Not quite as bad as the the situation in Japan not so long ago where actually they managed to put some wind turbines up in completely the wrong place. 232 00:22:17,760 --> 00:22:23,130 And we're so embarrassed about it. And they're actually powered for that power by electricity to make it look as if they're working. 233 00:22:23,430 --> 00:22:26,850 I'm right. This is the limits to growth. 234 00:22:27,510 --> 00:22:32,190 But will I mention the reason I bring this up is to just put in to that this diagram. 235 00:22:32,190 --> 00:22:34,860 I won't bother you that this is what's called system analysis, 236 00:22:35,310 --> 00:22:40,890 and essentially it uses a one dimensional mathematical model to come up with a one dimensional look at the world. 237 00:22:41,640 --> 00:22:45,570 And one thing I want to draw attention to is this. This is industrial output. 238 00:22:45,930 --> 00:22:55,960 Industrial output is growth. Growth as well. And where do we see the peak of this assistance now as we see the peak at around about 2015, 2017? 239 00:22:57,130 --> 00:23:02,140 And if I was to show you the mobile analysis, which I haven't got, it shows the dots just running up here. 240 00:23:03,310 --> 00:23:06,790 Now, what you can also see here is that actually coming down the other side. 241 00:23:06,790 --> 00:23:13,030 And I want you just to start to think about the idea of a massive reduction in global GDP, 242 00:23:14,290 --> 00:23:20,170 a reduction in millennial proportions, perhaps 23% for the next 15 years, which is what I'm predicting. 243 00:23:21,040 --> 00:23:22,689 When I saw that, it really made me think a lot, 244 00:23:22,690 --> 00:23:29,560 but I wasn't totally convinced because you can't actually it's quite difficult to actually work out to relate that to actual property GDP. 245 00:23:30,070 --> 00:23:34,510 But it really set me thinking and it sent me thinking about what was really going on in the world. 246 00:23:35,650 --> 00:23:40,600 So let me just leave that. It's the first bit of analysis, but it's not the final part of the jigsaw. 247 00:23:42,130 --> 00:23:52,210 And let me come to really what I think is more interesting part of the jigsaw. This is Hubbert's Curve again, but it's used with CO2 emissions. 248 00:23:52,780 --> 00:23:56,290 So what we're now looking at, and if you think of CO2 emissions, what do they represent? 249 00:23:56,290 --> 00:24:00,760 They represent the burning of coal, oil and gas. 250 00:24:01,120 --> 00:24:10,300 So the three big fossil fuels and what you're seeing here is that this burning is following, again, a similar curve. 251 00:24:10,810 --> 00:24:15,820 Now, if you're a climate climate scientist here, they would show you a thing which shows that CO2 is going up. 252 00:24:16,360 --> 00:24:21,820 So we see more and more and they get very, very, very worried about how much how much fossil fuels are being burned. 253 00:24:23,020 --> 00:24:28,210 I'm less worried. I'm less worried because I think the fossil fuel burning throughout the world will follow this curve. 254 00:24:29,290 --> 00:24:31,060 That's a good thing for the climate. 255 00:24:31,840 --> 00:24:40,329 It's a disastrous thing for the economies is disastrous because actually we are talking about reducing GDP over time. 256 00:24:40,330 --> 00:24:47,620 And I'll connect this in a second. Reducing GDP over time, following pretty much the curve that we've thrown that limits the growth way. 257 00:24:48,980 --> 00:24:54,310 I'll just connect those two in a slightly more sophisticated way. This is the one bit of maths. 258 00:24:54,550 --> 00:24:58,270 It's not that difficult maths, but it's not that difficult maths because I'm not very good at math. 259 00:24:59,080 --> 00:25:03,240 It's not that difficult. But I just wanted to get this is the original part of this presentation, 260 00:25:03,250 --> 00:25:08,830 the original thinking and what I'm doing in this is I'm just connecting about five things. 261 00:25:09,040 --> 00:25:12,969 This is the basis of a paper that sort of half drafted. 262 00:25:12,970 --> 00:25:16,810 It's for the Royal Society. It's not a theory, it's more a hypothesis. 263 00:25:17,140 --> 00:25:23,410 But I want you to run run you through it because it really matters in terms of understanding the structure of our future. 264 00:25:25,060 --> 00:25:31,540 What's the purpose of the GDP? What I'm saying is GDP here is equivalent to GDP, which is the gross domestic domestic energy production. 265 00:25:31,540 --> 00:25:37,990 So I'm trying to make a link between how much we produce as human societies and how much energy we use. 266 00:25:38,350 --> 00:25:45,850 There is a very close link between these two things. People tend to assume that that economics production is a function of two things. 267 00:25:46,630 --> 00:25:55,870 My economist colleague would probably say usually people talk about the fact the production of capital and labour well is the third critical one. 268 00:25:55,870 --> 00:25:59,510 And it's energy. Energy is critical. It's a critical factor. 269 00:25:59,540 --> 00:26:02,860 Production is so much all around us, we don't even really think about it that much. 270 00:26:03,100 --> 00:26:06,490 But it is a critical part of production, in my view, much more important than Labour. 271 00:26:07,000 --> 00:26:12,700 So I think that we can actually start to look at GDP, how much we produce and the energy we consume and produced. 272 00:26:12,700 --> 00:26:14,470 You can think of one as a property for the other. 273 00:26:15,760 --> 00:26:20,799 I also know that if I look at my energy supply across the world, you may think it's all buried there, but it's not. 274 00:26:20,800 --> 00:26:25,660 Actually, 84% of the world's energy is both transport and stationary. 275 00:26:25,660 --> 00:26:33,820 Energy is fossil fuels. It's a mix between gas, between coal and between oil. 276 00:26:34,270 --> 00:26:40,390 But 84% is fossil fuels. Anybody talks to me and says which which of those is the most important? 277 00:26:40,720 --> 00:26:46,000 It doesn't really matter. I think the key thing, the key message that I've arrived at is that we're going to need them all. 278 00:26:46,420 --> 00:26:52,510 Nuclear makes up a relatively small proportion. Hydro and renewables make up the rest and still a pretty small proportion. 279 00:26:52,720 --> 00:26:58,750 And one thing I can tell you about nuclear and hydro working in the business, we will not grow these at the levels that we need to. 280 00:26:59,380 --> 00:27:04,870 It doesn't matter how hard we go in renewables, we'd love to do it. We'd love a bit more money to do this as well as many investors out there. 281 00:27:04,870 --> 00:27:12,730 But we'd love to do it, but we will never be able to grow them at the speed we need to to actually replace fossil fuels if they start to burn down. 282 00:27:13,150 --> 00:27:18,630 So I'm going to make the assumption that actually that because 84% of the world's fossil fuel, 283 00:27:18,940 --> 00:27:22,060 well, world's energy is fossil fuels that actually I'm going to call 100%. 284 00:27:22,840 --> 00:27:29,040 So roughly speaking, I'm going to say that the way that the energy in the future will match will be according to that curve. 285 00:27:30,250 --> 00:27:34,450 So the energy supplies that we all have to do the work in the future will follow the habits. 286 00:27:35,800 --> 00:27:40,930 So if I that's what I'm essentially take is I'm ignoring nuclear, I'm ignoring renewables. 287 00:27:40,930 --> 00:27:43,660 I'm assuming that they won't grow that quickly and certainly not quickly. 288 00:27:43,870 --> 00:27:48,820 And therefore, I'm making as a simplifying assumption the idea that actually fossil fuels. 289 00:27:49,560 --> 00:27:54,930 Will be our primary energy source and that actually it will start to decline as a primary energy source following that curve. 290 00:27:57,060 --> 00:28:02,110 What's the best proxy for fossil fuels? In terms it could be kilowatt hours like burn. 291 00:28:02,130 --> 00:28:06,900 It could be all those barrels of oil that I burn. It could be whatever fuel, so on. 292 00:28:06,900 --> 00:28:10,740 I could actually have a look at a very complicated mathematical equations and try to solve those. 293 00:28:10,980 --> 00:28:15,990 But a much simpler way is to relate it simply to CO2. 294 00:28:16,860 --> 00:28:19,950 They all put CO2 in the atmosphere. 295 00:28:19,950 --> 00:28:23,820 And that's why that curve that I showed you originally is CO2. 296 00:28:24,600 --> 00:28:32,910 Following the Hubbert's curve, we then assume that it therefore follows that I can use CO2 as a proxy for energy use. 297 00:28:33,390 --> 00:28:40,500 I can use energy use as a proxy for GDP, and it therefore follows that our GDP, I think, will follow the same curve, the habits curve. 298 00:28:41,610 --> 00:28:46,889 So in other words, what I'm saying is that not only does that represent CO2 emissions and how much we use energy, 299 00:28:46,890 --> 00:28:49,920 I also think it represents our future GDP. 300 00:28:51,040 --> 00:28:58,230 Now, if I look at that future where we are about 2010, 20 with the amount here, you look at that reduction to we get to 2020, 301 00:28:58,560 --> 00:29:04,860 that means a global reduction in GDP of around about 7 to 8% in the next five years. 302 00:29:04,860 --> 00:29:14,020 And a further I think the figure is about 16% in the ten years after that, that that is a global reduction in GDP approaching 25%. 303 00:29:14,040 --> 00:29:22,740 That sort of figure, it's rough and ready in the next 15 years at a time when the the world's population continues to grow. 304 00:29:22,770 --> 00:29:31,139 So not only is GDP going down well, reducing to think about it another way, but also the population is increasing. 305 00:29:31,140 --> 00:29:36,270 So GDP per capita is going down even more quickly. And I think this is the issue. 306 00:29:36,450 --> 00:29:42,899 I think this is the structure of our future. It's a future in which there is much less wealth out there, 307 00:29:42,900 --> 00:29:48,660 in which countries are having to cope with a quite different structural future than they're used to. 308 00:29:49,200 --> 00:29:53,160 We, all of us in this room, I've spent my life on this side of the curve. 309 00:29:54,240 --> 00:30:00,360 All of us in this room have spent our lives on this side of the curve. We've fought wars, are using lots of energy. 310 00:30:00,930 --> 00:30:04,050 We've used huge amounts of energy around the world to do whole loads of things. 311 00:30:04,710 --> 00:30:08,160 One of the things we've used huge amounts of energy to do is to extract energy. 312 00:30:09,420 --> 00:30:14,309 I've talked a little bit about fracking, but I can tell you the oil and gas offshore market, 313 00:30:14,310 --> 00:30:25,800 which makes up 30% of the oil and gas produced in the world, is in carnage at the moment, and things are cutting back like nothing I've ever seen. 314 00:30:26,370 --> 00:30:30,210 It's incredibly shocking for us what fortune? I mean, renewables, but it's carnage. 315 00:30:30,240 --> 00:30:33,960 So this sooner or later will show up and reduce production. 316 00:30:34,350 --> 00:30:37,500 There may be a slight glut of world gas, but it will not last. 317 00:30:38,250 --> 00:30:44,200 We're absolutely certain about working in the energy industry. And let's just take those two. 318 00:30:44,200 --> 00:30:45,830 And this really was the final bit of it for me. 319 00:30:46,140 --> 00:30:51,720 I looked at that graph, that graph, and I thought, goodness me, that is not a very mathematical observation, 320 00:30:52,230 --> 00:30:58,740 but it's an observation that's important in a way that very different logics and very different sciences that they arrive at the same conclusion. 321 00:30:59,130 --> 00:31:04,500 They arrive at the conclusion that their growth is over. I'm absolutely certain of it. 322 00:31:05,520 --> 00:31:11,310 And as I start to see the world in a different way, I see the things that are happening around me in a completely different way. 323 00:31:12,390 --> 00:31:17,190 I see things like the Arab Spring. What started the Arab Spring off? 324 00:31:17,190 --> 00:31:23,550 It was a it was the Tunisian who was struggling to feed his family, set himself on fire. 325 00:31:23,910 --> 00:31:29,250 My brother, who's a brilliant Arabist, was talking to an Egyptian about 2 to 3 years ago. 326 00:31:29,550 --> 00:31:33,270 He said, What's the problem in Egypt? And I'm not an Arabic speaker. 327 00:31:33,900 --> 00:31:39,510 But his Egyptian friend said he used the Arabic phrase, But people are hungry. 328 00:31:41,760 --> 00:31:45,770 The people are hungry. Migration is not, to my mind. 329 00:31:45,810 --> 00:31:51,000 What we're seeing a political issue. It's an economic issue. And I think it's just the start. 330 00:31:51,330 --> 00:31:57,690 So anybody who thinks this migration thing's going away, if I'm right on this, I think again, it's just the start. 331 00:31:58,890 --> 00:32:05,640 What will happen? I use the term predicaments and problems because actually I think this is a predicament and I can't see a solution, 332 00:32:06,930 --> 00:32:11,940 which means that the only issue is how we navigate it, how we navigate as human societies. 333 00:32:13,110 --> 00:32:16,979 I'm early in my thinking here and it'd be great subjects for questions, 334 00:32:16,980 --> 00:32:22,200 but I'm starting to think about what sorts of things will happen as a result of this end of growth. 335 00:32:22,860 --> 00:32:30,510 The start of contraction, I call it contraction, the great economic contraction, which is possibly starting and what that will mean. 336 00:32:32,370 --> 00:32:41,010 Bear in mind that all our Western systems, the banking systems, the pension systems are based on the idea of growth and the need for growth. 337 00:32:41,280 --> 00:32:43,290 And at the moment, we are not growing, 338 00:32:43,290 --> 00:32:50,460 despite the fact that we've had over six years of quantitative easing and interest rates are low, as they've been for generations. 339 00:32:50,880 --> 00:32:55,950 Despite that fiscal stimulus, we're not growing. I think we'll see debt defaults. 340 00:32:56,340 --> 00:33:00,120 I think we'll see currency collapses. Indeed, it's happening. 341 00:33:00,570 --> 00:33:05,250 Venezuela is in the middle of hyperinflation and I don't think Venezuela will be the last place to have it. 342 00:33:06,180 --> 00:33:11,000 I think we'll also see banking system failures. Banking systems are designed for growth. 343 00:33:11,010 --> 00:33:20,069 That's how debt gets repay. The debt can't get repaid. We're likely to see banking system failures in terms of politics, increasing volatility. 344 00:33:20,070 --> 00:33:27,330 I think we're seeing it already. We can see it in Europe. I think we'll see the rise of the left and the right again. 345 00:33:27,360 --> 00:33:33,310 I think we're seeing that already. And I think actually there'll be a general slow recognition of what's going on. 346 00:33:33,330 --> 00:33:39,540 I don't think it'll come the lights will come on straight away, but there'll be a slow recognition that neoliberalism is over. 347 00:33:40,290 --> 00:33:48,330 When I said to you that, I felt that people will look back on us in the Victorian as Victorians were in the 21st century, 348 00:33:49,230 --> 00:33:56,880 proselytising a neoliberal system through war and through development aid. 349 00:33:57,360 --> 00:34:00,990 There was a third want to add to that, and it's the business system and our economics. 350 00:34:01,860 --> 00:34:06,900 And I think actually that I tend to look now on business schools in a strange way, 351 00:34:07,260 --> 00:34:19,830 but I look at them in the same way that people look on the madrassas and look at them as exporting a idea of Western profits and capitalism, 352 00:34:20,250 --> 00:34:23,260 which is based on lots of energy. 353 00:34:23,280 --> 00:34:28,089 People don't realise it, but it is. And that actually I think that idea will come to its it's close. 354 00:34:28,090 --> 00:34:32,399 So there are three things that we've been proselytising not to the societal. 355 00:34:32,400 --> 00:34:35,400 I think we're going to see mass migration. I just think that's the start. 356 00:34:35,580 --> 00:34:43,440 It was obvious. I wrote a paper on this about 15 years ago because it was obvious that the population of North Africa was growing more commercial GDP. 357 00:34:44,040 --> 00:34:48,210 So, you know, people are getting poorer, so they're going to migrate. Well, I think this is going to get worse. 358 00:34:49,320 --> 00:34:53,130 I think I think we'll see the blaming of the other. I think we'll see reversion to localism. 359 00:34:53,640 --> 00:35:00,180 Internationally, though, it's all going to be a bit variegated because a lot will depend on where you live and what sort of society you live in. 360 00:35:00,570 --> 00:35:05,010 I tend to think the poor societies will will probably do as well as any because actually they're poor. 361 00:35:05,550 --> 00:35:10,830 And what we're talking about is the return to poorness. So I think my wife is from Zimbabwe. 362 00:35:11,790 --> 00:35:19,019 We've watched that we were in Africa recently and you can see the poor societies, which they do seem to have the poor in some ways, 363 00:35:19,020 --> 00:35:24,450 but what actually they get by they used to getting by because actually they had much less to get by with. 364 00:35:25,710 --> 00:35:28,890 I think that what we will see, though, and this is very general, 365 00:35:28,890 --> 00:35:34,710 I think we will see the middle income countries are where we'll see the first major problems. 366 00:35:34,890 --> 00:35:40,620 And if you just think about what's happening in the world, Brazil is having significant troubled. 367 00:35:40,620 --> 00:35:45,329 So in South Africa, Venezuela is in serious trouble. So I think that's where we'll see. 368 00:35:45,330 --> 00:35:52,629 It will come from the from the periphery towards the core. The core being the G7 nations, the G20 nations of the G20. 369 00:35:52,630 --> 00:35:55,920 In the G7 nations. A lot will depend on how you do and how you do with energy. 370 00:35:56,370 --> 00:35:59,820 If you're a major energy importer like Japan, you would seriously struggle. 371 00:36:00,960 --> 00:36:08,100 I think those nations, which have a high degree of energy security, will actually probably do better, but none will do hugely well. 372 00:36:09,220 --> 00:36:17,879 The energy use matters a lot. If you look at Canada and Australia and the US, their per capita and use is twice as high as the EU nations. 373 00:36:17,880 --> 00:36:23,040 So I think they'll struggle. It's very interesting when you look at EU and what's going wrong in the EU. 374 00:36:23,460 --> 00:36:27,810 One of the most interesting factors when you look at the PIGS nations Portugal, 375 00:36:27,810 --> 00:36:33,150 Ireland, Italy, Greece and Spain, they are the highest energy importers in the EU. 376 00:36:33,780 --> 00:36:38,130 There are other issues, but they're the highest energy importers. And again, I think that's a factor in their struggle. 377 00:36:39,780 --> 00:36:47,880 And I think actually it's the energy. Reporters who will struggle. What does this mean for the current of future military operations? 378 00:36:48,510 --> 00:36:52,420 Your guess is probably as good as mine, actually, but I think we're going to see different things. 379 00:36:52,440 --> 00:37:00,570 I don't think will we might see high intensity war. I don't know. But I think we'll see a need, increased need for military edge the civil power. 380 00:37:01,830 --> 00:37:06,479 We're seeing it already in the Mediterranean. You will see the need to patrol already. 381 00:37:06,480 --> 00:37:10,559 That's conduct disaster relief. Notice that none of this has to do with climate. 382 00:37:10,560 --> 00:37:13,580 I'm not saying that climate is an issue. This is to do with economics. 383 00:37:13,600 --> 00:37:21,570 Energy, resource security will matter. The protection of resources, sea lines of communication, the ability to protect those. 384 00:37:22,380 --> 00:37:27,120 I think there will be conflicts, but I think we'll sort of see them. And I think actually we will not want to engage with them. 385 00:37:27,360 --> 00:37:32,100 We would need to engage in one or two places in the world. And the obvious one is the Gulf. 386 00:37:32,940 --> 00:37:36,930 The second obvious one is probably the Suez, but actually the Gulf is the most important one. 387 00:37:37,740 --> 00:37:41,340 Border controls the rise of the lead to control borders. 388 00:37:41,880 --> 00:37:47,940 I think we'll also see failures in some of the great multinational experiments, starting with the EU. 389 00:37:48,570 --> 00:37:50,930 I don't think it'll be a question of the UK getting out. 390 00:37:50,940 --> 00:37:56,790 I think it will be a question of the EU struggling to cope with this massive migration challenge which can only get worse. 391 00:37:58,090 --> 00:38:04,770 I think we'll see. The counterterrorism, I suspect, will continue, but it will be sort of different actually, 392 00:38:04,770 --> 00:38:08,970 because in a way it will be it will be overtaken by these bigger, epochal events. 393 00:38:09,750 --> 00:38:15,240 Will we see Will? I honestly don't know. The problem with war is it's extremely energy intensive. 394 00:38:16,720 --> 00:38:24,750 You know, I think it takes 400 to get one. One barrel of oil into Afghanistan, took about 400 barrels. 395 00:38:24,750 --> 00:38:28,350 It was an extraordinary number, actually, to actually make that work. 396 00:38:30,000 --> 00:38:37,950 So I don't know, is this a picture in which I sound pessimistic? 397 00:38:37,960 --> 00:38:41,250 You know, in the funny way, in the long term, I'm actually quite optimistic. 398 00:38:41,740 --> 00:38:43,920 I sort of think, well, this is sort of got to come. 399 00:38:44,310 --> 00:38:49,200 And I'm not sure as I look around the world and watch this, driving around at high speed all over the place, 400 00:38:49,200 --> 00:38:52,859 actually, where we're already going and what it's all about. 401 00:38:52,860 --> 00:38:57,149 So I think actually one way or another, actually, I think we could well find that the world, 402 00:38:57,150 --> 00:39:03,330 which will be a slower world and a smaller world will perhaps in the long term be better. 403 00:39:03,930 --> 00:39:08,330 But that right on the other side of that graph will be complex. 404 00:39:08,730 --> 00:39:18,000 And I think it's the thing that will define the next 30 to 40 years, certainly the rest of my life and possibly the rest of all of our lives. 405 00:39:18,720 --> 00:39:25,470 Please challenge me. Please challenge the science. It's the first time I've presented it like this again. 406 00:39:25,470 --> 00:39:29,640 I don't want to be apocalyptic because I feel strongly that actually it's important for us to understand 407 00:39:29,640 --> 00:39:34,500 this because I believe that this is a predicament for us to navigate and not a problem for us to solve. 408 00:39:36,120 --> 00:39:44,940 Thank you very, very much indeed. Of women already depressed by the weather in this country now people should probably be saying that.